Furthest Right

Alternatives To Socialized Medicine Rise As The System Bogs Down

When we write the history of American healthcare, it will center on a policy of successive sabotage by which politicians wreck the existing system so that they can demand it push closer to the socialist ideal of “socialized medicine” or in the contemporary jargon, “single-payer.”

This began with the sabotage of our charity hospital system through early socialized medicine:

Before the 1980s, private hospitals charged patients according to their ability to pay, and this “cost shifting” allowed them to deliver a small amount of charity care. Over the years, this amount dwindled. Recent Internal Revenue Service reports found that 45 percent of private hospitals spend 4.8 percent or less of their revenues on uncompensated care. In contrast, public hospitals spend more than four times that amount (18.1 percent) on uncompensated care.

In 1983 the federal government established through Medicare a system that placed caps on how much hospitals could charge for treating patients with given diagnoses. This system, with charges tied to diagnosis-related groups (DRGs), made cost-shifting impossible, and, after its implementation, hospitals lost financial support for charity care. As changes in the economic climate made it more difficult for hospital EDs to care for indigent patients, reports surfaced that uninsured and publicly insured patients were either unable to access emergency care or were redirected from private EDs to public EDs.

Commentators who imply a causal relationship between EMTALA’s enactment and the nation’s health care crisis cite the surge in ED use from 85 million to almost 115 million visits per year, the closing of more than 560 hospitals and 1,200 EDs, and the shuttering of many trauma centers, maternity wards, and tertiary referral centers. In 90 percent of larger hospitals, the capacity to treat patients is saturated, primarily because of the lack of money to support inpatient critical care beds and nurses to staff them. The emergency care capability that does exist is plagued by rampant emergency medical services diversion and ED overcrowding, which alone accounts for 33 percent increases in wait times and has tripled the number of individuals who leave the ED before being seen.

Once the charity system had been destroyed, democracy thought it important to mandate emergency care, and we got EMTALA:

The Federal Emergency Medical Treatment and Labor Act (EMTALA) was passed as a part of the Consolidated Omnibus Budget Reconciliation Act of 1986, also called COBRA. It is a Federal statute which governs when and how a patient may be 1) refused treatment or 2) transferred from one hospital to another. Tellingly, the statute is also known as the “Patient Anti-Dumping Law”, which provides a clue as to its intent. The purpose of EMTALA is essentially to prevent hospitals from rejecting patients,refusing to treat them, or transferring them to “county hospitals” because they are unable to pay or are covered under Medicare/Medicaid.

One of the many provisions of the statute is to provide treatment without regard to the ability to pay. Any inquiry into payment ability is not to discourage individuals from remaining in the emergency department, or to delay stabilizing treatment based on the patient’s ability to pay. Operationally, this can pose a challenge to revenue cycle in the emergency department.

Patients are sorted, or “triaged”, based upon acuity level. Patients that present minor or non-emergent symptoms may be expedited, or “fast-tracked” through the emergency department, to make room and time for patients with more extensive injuries. It is not uncommon for hospitals to create an operational goal based upon the length of stay of these “fast track”patients.

Many health care organizations have wisely interpreted EMTALA conservatively in order to avoid liability.

Those conservative interpretations mean that anyone who shows up at a hospital emergency room for anything gets care, in case later on that minor need can be interpreted to be life-threatening. Lawsuits have affirmed the need for this conservative approach.

Not surprisingly, this means that many — the indigent and illegal, mostly — use emergency rooms as their source of all medical care, which is why EMTALA is bankrupting hospitals:

From 1994 through 2004, the number of ED visits increased 18 percent from 93.4 million to 110.2 million visits annually. This is an aver­age increase of more than 1.5 million visits per year spread over all age groups. During roughly the same period, the United States also experi­enced a net loss of 703 hospitals, 198,000 hospital beds, and 425 EDs, mainly in response to rising costs of care and lower reimbursements by managed care organizations and other payers, including Medicare and Med­icaid.

In addition, this fallout from EMTALA has lowered the quality of emergency care:

America’s emergency rooms (ERs) are in crisis. Crowding, delays, and diversions have increased to epidemic proportions. In the United States healthcare system, ER visits account for 11% of outpatient encounters, 28% of acute care visits, and 50% of hospital admissions. By default, ERs have become, as noted in the 2006 Institute of Medicine report, “the safety net of the safety net”. For many Americans, it is now a place of last and first resort.

These costs are passed on to consumers, who in some kind of slow motion panic demanded more of what caused them: insurance covering everyday medical care, and government backing that insurance, including the vast bureaucracy that drives up costs.

Consider how Medicare bureaucracy harms hospitals:

“Medicaid reimbursements are so low for OB that hospitals can’t survive,” Hunter said.

According to numbers from the University of Iowa, Medicaid — government-funded insurance for those with low incomes — reimbursed its hospital about a third of what commercial insurance plans did for services like ultrasounds and deliveries last year.

This means that our hybrid system has failed, just like single-payer would fail, based on the number of people using it. When you make something free, people avoid responsibility to take care of those issues themselves, and end up exploiting the system for avoidable and trivial problems.

The free market offers another option: (1) you pay for everyday care and (2) you purchase insurance for catastrophic care (chronic disease, debilitating accident, and disability). Some are taking the first steps toward this model with cash-over-counter medical services:

Wong’s practice is about as opposite of UPMC and AHN as a physician can get in Pittsburgh. He’s doesn’t accept any form of insurance. Patients pay up front for care at an iPad station when they check themselves into the clinic.

For each medical visit, Wong charges a flat fee of just $35.

Before opening iHealth in August, Wong had been a doctor at Indiana Regional Medical Center in Indiana County, where he was also the director of quality for the hospital system’s physician group. Insurance companies, he said, routinely argued with him about what was medically necessary for patients. This meant hours of paper work.

For a normal person who might have ten doctor visits at most a year, this plan works out very well: it is low cost for regular visits, and allows them to drop regular medical insurance coverage but keep their catastrophic plan, which tends to be much lower cost than full healthcare plans because far fewer people need catastrophic care.

If you wonder what the “solution” to our healthcare crisis might be, start with eliminating all the prior “solutions” and going back to the free market. It drives costs down and forces people to take responsibility for their own health instead of running off to the “free” doctor.

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