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Friday, February 22, 2013

The world of Medical Costs

Time's lead article is Bitter Pill: Why Medical Bills are Killing Us. It is well researched and well written. It takes some serious time to read (I haven't even yet finished it - it's 11 internet pages!) but if you want to better understand what is broken in our healthcare system I recommend reading it anyway. Obamacare is rightly blamed for not bringing down costs at all, but even exacerbating them. From what I can tell thus far, the litigious world (and lack of tort reform in Obamacare) we live in is not blamed for the unnecessary expensive cutting-edge medical testing which healthcare providers and doctors order to cover their backs in the event of a lawsuit, which is called practicing defensive medicine. This is, however, a big reason for costs whether or not that aspect of medical costs is investigated. The costs charged by healthcare providers (especially large hospital systems) are exorbitantly inflated for those on insurance, to be sure, but that problem is deeply described in the article. The problem is an antiquated "chargemaster" system, from which costs are adjusted upward annually even if prices have dropped for a given product or service in the real world. For more on this topic, please read the actual article!

UPDATE: medical tort-reform was appropriately mentioned:
His rationale speaks to the real cost issue associated with medical-malpractice litigation. It’s not as much about the verdicts or settlements (or considerable malpractice-insurance premiums) that hospitals and doctors pay as it is about what they do to avoid being sued. And some no doubt claim they are ordering more tests to avoid being sued when it is actually an excuse for hiking profits. The most practical malpractice-reform proposals would not limit awards for victims but would allow doctors to use what’s called a safe-harbor defense. Under safe harbor, a defendant doctor or hospital could argue that the care provided was within the bounds of what peers have established as reasonable under the circumstances. The typical plaintiff argument that doing something more, like a nuclear-imaging test, might have saved the patient would then be less likely to prevail.
When Obamacare was being debated, Republicans pushed this kind of commonsense malpractice-tort reform. But the stranglehold that plaintiffs’ lawyers have traditionally had on Democrats prevailed, and neither a safe-harbor provision nor any other malpractice reform was included.



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