By KENDYL PARKER, Vice President, Sales and Marketing, GHPMA
With increasing clarity, it is evident the Affordable Care Act is not the ultimate solution to making healthcare more efficient, accessible or affordable in America. The program is considered to be divisive by many − raising premiums and deductibles, while creating chaos and confusion in the marketplace. Real change is going to take real reform on a national level.
On a recent fundraising trip in Houston, U.S. Sen. John Cornyn, R-Texas, attended a luncheon event at the home of Dr. Asit Choksi, founder of Apollo Hospital in The Woodlands and Greater Houston Physicians Medical Association. Civic leaders, physicians and healthcare professionals discussed the following realities behind the escalating cost of healthcare in America − and what could be done about it.
Cut down middleman profits
The first step in lowering the cost of healthcare is reducing the abusive amount of money being absorbed by insurance, pharmaceutical and medical equipment manufacturers. The false notion that doctors are becoming rich from inflated healthcare costs needs to be addressed through increased public education.
Physician compensation pales in comparison to the increased revenues going to brokers and administrative costs. In the bill for the average Medicare patient, on a Medicare advantage plan, only 12.5 percent of the total Medicare payment goes to the physician and a comparable amount to the physician practice for overhead. Hospitals take 25 percent and 34 percent of the revenue goes to insurance companies.
The allocation of healthcare revenue in the private sector is no better, with administrative costs and fees taking a high percentage of every healthcare dollar.
Healthcare costs in the U.S. are among the highest of any industrialized country, in part because it is also one of the only countries that does not regulate the industries that support the healthcare industry. Public education and meaningful reform should be enacted to put healthcare dollars to work improving medical care to U.S. citizens, not increasing the profitability of support industries.
Reduce red tape
In many cases, healthcare delayed is healthcare denied. Doctors are increasingly hindered by insurance company regulations that stipulate what procedures are allowed. Preapproval requirements take healthcare decisions out of the hands of physicians, effectively limiting the range of options for patients.
Administrative delays in securing insurance documentation/approval slow healthcare providers from rendering service. Complicated STARK laws limit physician earnings without benefiting patients.
Restrictive policies mandated by those without formal medical training limit patient access to care – effectively rationing healthcare dollars. Doctors should be given greater latitude to practice medicine without total oversight by the insurance industry. The doctor-patient relationship should be the most important aspect of healthcare.
Accountability is important, but physicians are also being overwhelmed with paperwork requirements from insurance companies and regulatory agencies. Doctors should spend more time with patients, not documenting and justifying every action.
Self-funded insurance options
High insurance company premiums and broker commissions are a major expense for corporations and organizations offering insurance plans to their workforce. In many cases, the fees are well beyond what is necessary to cover administrative costs and reasonable profits. Excessive monthly broker commissions should be restricted.
Poorly constructed insurance programs also take money away from legitimate healthcare services for those that need them.
The Affordable Care Act makes profound changes in our national healthcare system, particularly Medicare. Instead of targeting waste, fraud and abuse, the program calls for $716 billion in Medicare payment reductions in the next decade from Medicare providers like hospitals, nursing homes, home health providers and hospice agencies.
Medicare payments could become less than the providers’ costs − leading to a withdrawal of services for seniors and others that can ill afford the alternative. Reduced funding will likely lead to further reductions in physician reimbursement rates and a drop in the number of physicians accepting Medicare. Reduced profit margin potential could lead hospitals in certain demographic areas to limit services or close.
As a national health policy, ObamaCare does little to reduce the spiraling cost of care in America. It drives people to expensive insurance programs that provide the biggest benefits for the insurance companies and their stockholders.
Hardware maintenance excesses
Access to the latest advancements in medical technology is being hampered by excessive costs for maintenance contracts. Advanced diagnostic and treatment equipment is expensive, but escalating service agreements are making acquisition of such equipment cost prohibitive. In many cases service contracts, which are essential for expensive, highly technical equipment, are more lucrative for the manufacturer − with high incentives to the sales force to push service contracts on purchasers.
Many feel the government should limit the profit profile on service contracts − especially required service agreements − in the medical industry, or require open access for independent contractors to have access to parts and equipment to repair and maintain healthcare equipment.
The Cornyn position
Healthcare reform is a complicated matter by any definition. In addition to Sen. Cornyn’s very public stance in opposition to ObamaCare, his website (www.cornyn. senate.gov) lists his position on a wide range of healthcare issues.
The senator’s key issues are: making healthcare more affordable by addressing rapidly rising costs; allowing individuals more choices to select a plan that fits their needs; insuring access to insurance for those with pre-existing conditions; protecting the doctor-patient relationship and saving Medicare.
In the meeting, and the tour of Apollo Hospital that followed, local civic leaders, physicians and healthcare professionals found a lot of common ground with Sen. Cornyn and his official position. Dr. Choksi said future meetings are planned to discuss specific strategies and steps to help adopt realistic healthcare reform that will favorably impact the quality of care available to the public.
An important element of improving healthcare in America is educating the public − and the industry − about the realities of modern medicine and the industries that support it.
But education alone will not bring about material changes that will benefit the public with more affordable, more accessible healthcare. The federal government needs to review the reasons healthcare costs are out of control in America – and take honest, unbiased steps to restoring accountability and transparency to the system.
While a single meeting with Sen. Cornyn cannot bring the sweeping changes needed to restore functionality to the national healthcare system, it is important for physicians and legislators to be active, aware, and involved. If change is to come to the way medicine is practiced, it should be developed and structured by those who understand healthcare and work daily in the medical community