Healthcare...

[Highwayman]

Originally Posted by Army_of_One

I found this little quote on the 'net.....

It would be nice if you had a name and link to attribute that quote to.

[Outofdodge]

Originally Posted by Outofdodge

This is going to be a very long post and will probably be done in at least two parts over two or more days (sorry).

I will try to organize my thoughts and words a little better than I did in the last paragraph last night.

The modern era of the federal government involvement in healthcare dates back to the Truman presidency. As part of his "Fair Deal" initiatives, he wanted universal health care coverage. Then, as now, the approach was decried as socialized medicine and obviously did not pass, even after the 1948 election where the democrats gained house and senate seats. However during the Truman Presidency the Hill Burton act was passed and that provided federal matching grants and loans for communities to renovate and build hospitals. Many of the small town hospitals around today started with Hill Burton funds. The law was sunsetted in the mid-70's. Like anything else the government used to do, the funds came with strings attached, the biggest one was that facilities that received hillburton funds had to provide a level of free care to the medically indigent. (medically indigent being those who can not readily afford healthcare-this includes many comfortably in the middle class). There was no standard for what level of free care was to be provided and no real action to define it was done until the early 70's when the courts were dragged into it and levels began being set by judicial fiat.

Even though his universal health care coverage did not pass, Truman began advocating for health care coverage for social security beneficiaries. It took 20 years for this to occur when the Medicare program and it's State run companion for the financially indigent-Medicaid program became law during the Johnson administration in 1965 or so. Even then many decried it as socialized medicine and no sane politician would try to kill this now.

Medicare initially reimbursed providers on a reasonable cost basis. Basically if medicare beneficiaries made up 50% of a provider's business then Medicare paid for 50% of what it considered reimbursable costs. Marketing costs were not reimbursed, but most everything else was. Commerical Insurance companies were paying the full price of services and it was run as an inpatient business. Medicare and commercial insurances had their flaws for beneficiaries too. Most everything was inpatient based. Payments were better and out of pocket costs lower if you got admitted. Today a cataract removal is a two-four hour outpatient visit at the most. When i started, patients came in the night before and stayed over one night after the surgery. I remember people getting admitted so tests could be run for their physicals only so the insurance company would pay for the blood work, ekg's and xrays. As part of the conditions of participation, hospitals and doctors were required to police the medicare patients who were admitted to ensure they met the minimum standards.

There were some controls in place, most of them delegated to the state. Some states put in rate control boards, others set up certificate of need laws. Since the Feds paid the costs, including the capital costs, they didn't want beds springing up on every street corner so states developed Certificate of Need laws to approve medical projects. I remember a hospital in southern Alabama getting built even though it had no CON approval, when it came time to operate the state and the feds refused to pay them.

Since medicare paid costs and the commercial payors paid full freight and hospitals were mostly church or local government run and their was little in the way of business oversight. Cost based reimbursement may do just that, cover costs but it is also a 100% tax on any profit. Utilization was going up as more people took advantage of this operating model and everyone got fat and happy. Then a funny thing happened.

The amount of Medicare reimbursements kept going up as did the cost to business. Seniors complained that Medicare didn't cover enough (drugs, preventive care, long term and catastrophic situations-there are limits to the days a beneficiary can have their care paid for). The technologies in race to the moon and Vietnam led to new (expensive) diagnostic and treatment capabilities in the civilian market. The first of what was to be several "for-profit" healthcare chains started springing up about this time too (middle 70's). Using accounting rules on the valuation of capital costs that require organizations to record the asset at the lower of the cost or market meant that many of the hill burton facilities from the previous two decades were valued and reimbursed at their construction costs. By paying market value for the buildings and equipment the buying hospital could record their asset at the new higher market adjusted value. All of a sudden the feds and the commercial payors were paying more for the same services in the same building. HCA and Humana grew by leaps and bounds during this time. While they did bring business management principles and economies of scale in supply costs, that accounting rule and the increased government payments gave them increased cash flow.

Something had to give and by the late 70's and early 80's things were getting out of hand. A study had been done, primarily in New Jersey which indicated that most acute hospital admissions could fit into one of some 400+ Diagnostic Related Groupings (DRG's). The feds decided to change the Cost Based system to this new reimbursement methodology that was based on a patient's diagnosis and geographic factors. Because the initial factors were based on years' old cost data from the start there were disparities. The rates were broken out into a wage and non-wage portion. Higher costs areals like LA and NYC were targeted for more payment than hospitals in rural Kansas. Regardless the new system was sold to hospitals as a means of getting them to "act like a business" and in return for promised payment increases tied to the rate of medical inflation, hospitals could keep any "profit" from the DRG system. At this time the physicians started to go to a fee schedule arrangement based on codes for their work. It worked great if you were a surgeon or specialist because those codes paid much more than plain old primary care. The differences in reimbursements for docs has been tinkered with over the years but there the medicare payment methodology is a major reason why the average salary for an orthopedist is well over 375K per year while the average for a pediatrician is under 150K per year.

At the same time the commercial payors decided that they could control costs by increasing policyholders out of pocket costs and forcing providers to discharge patients sooner. New mothers having "normal" deliveries often stayed for four days. You could still stay four days if you wanted but now after the second day, you paid for it.

Hospitals started doing things unheard of in preparation for the new payment plan. They started reducing costs and the for profits were much better at it than the non-profits. Reducing costs meant layoffs. The old school thought was work in healthcare, have a job for life. No more.

Something else happened, the new payment system was to be phased in. The payment rates were blended as a combination of individual hospital costs and the area cost rates. With hospitals rapidly reducing costs and old cost data being used to set rates the first few years the hospitals made out like bandits on the system that was supposed to control costs. Because of this the promised payment adjustments were not made and by the time the system became fully implemented Medicare was no longer paying it's costs, so the hospitals weren't getting what was promised.

Medicare still paid on a cost basis for capital, non-acute services (psych, rehab), and outpatient services which by now much of the business was shifting. But there was still this group of payors who paid full charges or close to it. With medicare providing a base through it's payment system, hospitals began raising rates so they could "shift" the cost of uncompensated government care to the commercial providers. Even though the commercial providers had success in lowering utilization, they provided the profit for hospitals. Continued decreasing Medicare payments, many of them forced by various deficit reduction acts in the late 80's escalated the practice of "cost-shifting". Bascially if the government wouldn't pay, then commercial and private (no insurance) people would pay it. Thus began the high healthcare inflationary spiral that continues somewhat to this day.

The next two events I will get to tomorrow-managed care and the Clinton task force really shook things up. Thanks for your patience and I should be able to wrap this thing up tomorrow.

[Outofdodge]

Originally Posted by Army_of_One

I found this little quote on the 'net....

Ask any healthcare provider and they will tell you that since Hillary had her hand in healthcare, the amount of paperwork has increased tenfold.

Alas the administrative side of the business keeps me well fed, and the regulatory burdens are at times, overwhelming, the little quote you posted is blatantly incorrect. Can't pin that one on her taskforce, sorry.

[TexKan]

Finally someone with some real intell to make a statement on our helathcare in this country. It's disgraceful! I dont' care who has been in on it - I still feel the govt (our tax $$) could be doing so much more if it were standardized for everyone.......... not just the haves and have nots........ they standardized long ago but the "class" system is still alive and well. It is shameful and I'm willing to listen to any candidate than has a solution. Telling folks they get a tax credit isn't the answer. I don't use any tax credit cause of how I dile. I take the standard deduction - I don't even claim the taxes i pay on my property........... cause I go short form every year.

Offering a tax credit to someone then putting a hitch to the tax credit - is useless..... Carry on OOD............. yer doin a fine job and FWIW........... I don't neg rep anyone either......... me and AOO are skooled the same... LOL

Probably just someone driftin by that ya pissed off........... don't tlet it bother ya!.......... I'de rep ya fer "good" but it's too soon after the last rep I gave ya so my reppin is tied up!............. good postin there tho kiddo!

[lurker]

Originally Posted by Highwayman

It would be nice if you had a name and link to attribute that quote to.

You'll find it (along with another quote pasted today) here:
THE REAL HILLARY CLINTON: Episode #4 - Dissing Health Care Execs Who Offered Solution

[TexKan]

I went to that site - that is a truely pathetic site........... there are so many far left adn far right sites around now............. how could anyone ever really take either one serious???...............

[Bubba]

You know you shouldn't trust a website when the page begins with something like this...

the survival of our Republic is threatened by two things -- fundamentalist Islamic terrorists and Hillary Rodham Clinton.

The page is nothing more than a blog by some guy with a grudge against Hillary. I wouldn't trust it or a page that started with the same line and the name of Hillary replaced with George W. Bush. When they start off like that you know the rest is a cheap attempt to discredit the person they are talking about.

[JayhawkMom]

Originally Posted by Bubba

You know you shouldn't trust a website when the page begins with something like this...

The page is nothing more than a blog by some guy with a grudge against Hillary. I wouldn't trust it or a page that started with the same line and the name of Hillary replaced with George W. Bush. When they start off like that you know the rest is a cheap attempt to discredit the person they are talking about.

Again, Bubba, YOU ROCK! Two days in a row..........

[Army_of_One]

Originally Posted by TexKan

but the "class" system is still alive and well.

And in our society it will always be that way because there is competition..and when you have competition you have winners and not winners. There will always be different classes of people and no matter how much you tax certain classes there will always be poverty.

[TexKan]

That being so - doesn't mean that you shouldn't strive for the lower class to have decent healthcare. Just cause they are lower economic class doesn't mean they don't deserve the same medical care you or I get in a higher class. This isn't Europe with surfs and lords.............. course sounds like they got tired of that system and really did level the playing field. PSss.......... surfs work longer and harder when they are healthy!! Does you know no good to be healthy with all the wealth and no one alive to help you gain more wealth!!!!