This is one of the reasons we pay such a ridiculous amount of money for healthcare as compared to other countries:
When a pharmacy sells the heartburn drug Zantac, each pill costs about 35 cents. But doctors dispensing it to patients in their offices have charged nearly 10 times that price, or $3.25 a pill.
The same goes for a popular muscle relaxant known as Soma, insurers say. From a pharmacy, the per-pill price is 60 cents. Sold by a doctor, it can cost more than five times that, or $3.33.
At a time of soaring health care bills, experts say that doctors, middlemen and drug distributors are adding hundreds of millions of dollars annually to the costs borne by insurance companies, employers and taxpayers through the practice of physician dispensing.
Most common among physicians who treat injured workers, it is a twist on a typical doctor’s visit. Instead of sending patients to drugstores to get prescriptions filled, doctors dispense the drugs in their offices to patients, with the bills going to insurers. Doctors can make tens of thousands of dollars a year operating their own in-office pharmacies. The practice has become so profitable that private equity firms are buying stakes in the businesses, and political lobbying over the issue is fierce.
Doctor dispensing can be convenient for patients. But rules in many states governing workers’ compensation insurance contain loopholes that allow doctors to sell the drugs at huge markups. Profits from the sales are shared by doctors, middlemen who help physicians start in-office pharmacies and drug distributors who repackage medications for office sale.
Alarmed by the costs, some states, including California and Oklahoma, have clamped down on the practice. But legislative and regulatory battles over it are playing out in other states like Florida, Hawaii and Maryland.
In Florida, a company called Automated HealthCare Solutions, a leader in physician dispensing, has defeated repeated efforts to change what doctors can charge. The company, which is partly owned by Abry Partners, a private equity fund, has given more than $3.3 million in political contributions either directly or through entities its principals control, public records show.
It should also be illegal for doctors to own equipment like MRI’s and x-ray machines and then order those expensive procedures for their patients and then bill the government and insurance companies. More than a few Mercedes and trips to Aspen have been paid for by that racket.
Villago Delenda Est
Yet another reason why single payer is the way to go.
We need to remove health care as a profit center. For anyone. The usual rules of the market do not apply when you have monopoly power, and doctors essentially have that.
cathyx
The higher price pays for those who aren’t insured and get the same medication for free or reduced costs.
Hey stupid idiots who are against single payer. We are already paying for the uninsured and underinsured.
Baud
To be honest, I’d much prefer to get meds straight from the doctor rather than having to make a separate trip to the pharmacy. Insurance companies usually negotiate reimbursement rates to prevent this type of thing, however.
SatanicPanic
Aren’t the insurance companies angry about this? Why not?
Steve in DC
@Villago Delenda Est:
Agreed. The issue is that people go into medicine for the same reasons they go into law or finance, get rich, and get status.
It wasn’t always that way, doctors weren’t paid well and put on a high platform, we do need to go back to that, but the howls of rage will be comical.
FlipYrWhig
But if you try to crack down on practices like these, oh what a hue and cry you’ll hear about “cuts.”
Less money doesn’t always equal less treatment, or worse treatment.
FlipYrWhig
@SatanicPanic: This is a good question…
General Stuck
That is only one facet of the racket we call health care in this country. The biggest by far, in my experience, is the construct of specialty practices for every kind ache and pain under the sun. About every time I see my VA primary doc, we get into a sometimes heated discussion concerning primary care doctors now being more and more like triage nurses to send every problem to some high dollar specialist that could be easily handled by the PC doc. Specialists are necessary, when they are necessary, like with diagnoses and some treatment that is more involved than other treatment. It is one reason there are such shortages of family doctor types, or PC internists. Not near the money in those things, even if they aren’t expected treat anything other than the most common illnesses. Having an autoimmune disorder that affects a variety of body locations, at one point I was doing nothing much more than daily doctor visits, basically to say hello to a specialist. and that was about it. I don’t do that anymore, unless necessary.
jl
Getting medications out of an office visit is also poor medical practice. Often causes problems down the road, for example, results in unnecessary medication switches, and risks drug interactions.
MikeJ
Except the insurance companies won’t pay that inflated price. They’ll tell the doc how much they’ll pay and that’s it. I would guess only people with no insurance are paying the inflated price.
RSA
Have you ever had to shuttle a sick person around to different facilities with different equipment or drug supplies? If we need to regulate billing, then let’s regulate billing, not make things harder on patients.
Mike S.
“It should also be illegal for doctors to own equipment like MRI’s and x-ray machines and then order those expensive procedures for their patients and then bill the government and insurance companies.”
So if a hospital is owned by a partnership of doctors, you think that hospital should not own/operate x-ray or MRI facilities?
LOL.
Litlebritdifrnt
@General Stuck: I blogged about this years ago, I mentioned that I was having problems with my bunions, yet in order to get it sorted out (should I want to) I would have to go to a general practitioner who would then refer me to a right foot doctor for the right bunion and then a left foot doctor for the left bunion, at which point they would both refer me to a surgeon who would remove both my legs below the knees “just to be certain”. I was only half joking.
jl
@Mike S.: You joking? You see no conflict of interest in that kind of self referral?
Edit: needs to be some kind of arms length relationship between practice and lab work and exams in small doctor owned facilities.
MattR
@MikeJ:
I think that the insurance companies have their hands tied by the law since these are workman’s compensation claims. (see the following excerpt from the Times article)
Mike G
And the fetid state of Florida leads the race to the bottom in this. I’m so surprised.
RareSanity
Then they’ll just get a group of their buddies in on the action and get them to pay out a certain percentage for every patient they refer.
It may not be as profitable as having one in-house, but it’s a helluva lot more profitable than getting nothing,
JPL
Before congress passed a law preventing abuse by mandating doctor’s give a list of providers, my current rep. was an orthopedic doctor. This is quite awhile ago, but after asking what insurance I had, he suggested a MRI for my son’s knee injury. The choice was a cast or an MRI. The choice was given only after he asked about my insurance. It is the only time in 40 years I was called by the company asking if the dr. mentioned he had part ownership in the company that provided the MRI. That doctor is now a my representative. He has not had a debate since being elected btw.
Oh.. the son was fine.. he had Osgood-Schlatter disease..
He grew several inches in one year.
Steve in DC
@Mike S.:
Hospitals are a bit different. The issue is that doctors can set their own price, and oh boy oh boy do the good ones. So there are a lot of extra “services” they offer which are actually nothing more than a way to generate more income, because daddy has to buy that yatch don’t-cha-know.
Now, there would be nothing wrong with this if people new the actual price these things should cost, but they don’t! Because since only a doctor can do it, and only a doctor (often) has access to that information, there is no way for you to find out. So they take people for a ride.
I box, skate, snowboard and play rugby. I’m a walking disaster in that aspect. But the cost of painkillers at the doctors, from the pharmacy, or off the black market are all wildly different, and it’s the doctors that costs the most. The black market is often cheaper than going through the pharmacy is well, because places charge your insurance FAR more than the product is actually worth.
Which is why there is a LOT to be said for deregulating a fair amount of medications and selling them over the counter. But of course you can’t do that because “kids will drink cough syrup and get high!”
RSA
@Steve in DC:
The medical doctors I know don’t seem to be in it for the money. They’re honestly trying to improve people’s lives.
PeakVT
Best health care in the world, baby.
JPL
@RSA: I agree with you but unfortunately the few that are in it for the money have a big
voice in congress.
Brachiator
@Villago Delenda Est:
I’m not sure that just because you had a single payer plan, abuses like this would not be possible.
Also, if single payer is obviously the way to go, why isn’t this the universally adopted model for health care in every industrialized country that has universal health care programs?
The certainty of the value of single payer does not appear to reflect reality.
You can pretend to do this, but it will still creep back into any system you set up. But is your goal to try to provide good health care or to eliminate evil profit? The two things are not necessarily the same thing.
Villago Delenda Est
@Brachiator:
I think of profit in terms of “money to reinvest in the enterprise”
Not “hookers and blow for CEOs.”
The latter is the modern conception of profit.
Steve in DC
@RSA:
I can say that about some bankers I know as well… of course the exception proves the rule here, as with doctors.
SatanicPanic
@Brachiator:
Industrialized nations can always be counted on to make the wisest choice. That’s why we adopted a national healthcare plan in 2009.
MattR
@JPL: Now I am wondering if I had a minor case of that when I was younger. I grew a foot in high school (from 4’7″, 75 lbs to 5’7″ 125 lbs – which was still nothing compared to my dad who grew 10 inches in a single year while in high school) and had knee pains when I started running again sophomore year after taking six months off. The athletic trainer had me do a bunch of exercises to strengthen the muscles and it went away after a couple months.
JPL
You need to remove money from campaigns before single payer will take hold.
JPL
@MattR: That is unless you go to a dr. who owns a MRI machine. I changed doctor’s and never voted for the asshole. I see him on TV and cringe.
RSA
@JPL: Right–the organizational voice of the medical profession can be pretty retrograde.
@Steve in DC: I guess we have different perceptions about what the rule is for medical doctors. I’ve known more good than bad.
kindness
I’m insured by Kaiser. That doesn’t happen here. You have to go through their pharmacy no matter what unless you are already inpatient.
kindness
Moderation?!? Why? No curses, no ….is it because I mentioned my Health Care Provider Kaiser?
MattR
@kindness: It seems to be getting everyone today. I got nailed in the next thread up. Maybe it is the word ‘insurance’?
pseudonymous in nc
Atul Gawande’s talked about this. When a med student signs that first loan agreement or pays that first tuition bill, it establishes a dynamic where that person’s career will be dictated, to a greater or lesser degree, by the amount they get paid after qualifying. It shapes the choice of speciality, where they choose to work, and their willingness to play footsie with Big Pharma’s reps or provide referrals in exchange for kickbacks. Some doctors will do primary care as a vocation; some will become wealthy property speculators with a sideline in medicine.
@Brachiator:
What matters are the broad foundational principles. What unites very different systems like Canada’s, Australia’s, France’s and Britain’s is the understanding that they’re not designed to make a few people very rich. When British people see profiteers entering the NHS at the behest of the toffs in government, they know what it smells like.
MattR
@kindness: Pretty sure it is the word 1nsurance that gets you.
Judas Escargot, Acerbic Prophet of the Mighty Potato God
@Brachiator:
This is part of why I like the idea of single-payer/private provider.
Our current system basically monetizes sickness. Follow the money: Medications, hospital charges, ultra-specialists, etc. The market of course responds by optimizing for these things. Less monetizable things like cheap vaccines, preventative care, pre-natal care, good diet, etc? Not so much.
If we could figure out how to monetize efficiency instead, the market would then optimize for that. Instead of private companies fighting over who gets to profit from our diseases, they’d have to learn how to fight over providing services more efficiently given a fixed cost if they wanted better profits.
Medicare was supposed to work this way. But Medicare was unable to keep up with accelerating costs.
MattR
@kindness: I have two responses to you already in moderation. I think it is the I word that trips the filter (as in the thing that companies like Kaiser or Geico sell)
JPL
@MattR: yup..sent u a reply but it is in mod…
uncle rameau
I moved to Canada in 1979. Y’all are nuts.
Arclite
I live in Hawaii, and other than when I was staying in the hospital, my doctors never dispensed medicine to me. I feel left out of being overcharged. :(
Sly
@SatanicPanic:
They are. But reforming it will nonetheless be tough.
There are four major stakeholders in the healthcare system. The insurance industry (the private for-profit, the private-non-profit, and the public non-profit sectors), providers (doctors and hospitals), manufacturers (drug and device companies), and state insurance commissioners. Reforming the system will invariably mean pitting these stakeholders against one another and/or pitting different sectors of the same stakeholder category against one another.
One of the ways to do it is to pit insurance companies against providers, like with physician dispensing, but its usually done the other way around; make providers happy at the expense of the insurance industry, and squeak whatever reforms you can get by the providers.
To reform anything in the health care system, you have to either bribe, coerce, co-opt, or steamroll these stakeholders into compliance. And their political influence is such that you can’t try to steamroll them all simultaneously and expect anything to pass. Physician dispensing may piss off the insurance industry, but the drug manufacturers and providers love it.
And, as an aside, its not the for-profit insurers that you really have to worry about when approaching reform. A common refrain of the “ACA Sucks” crowd is that it was a giveaway to the for-profit insurers when it decidedly is not. It wasn’t the for-profits that killed the Medicare Buy-In and the Public Option; it was the AMA and the Federation of American Hospitals.
MattR
@uncle rameau: That is the backup plan if things ever get unmanageably bad in the US.
J.W. Hamner
From a patient perspective having all that stuff in house is damn handy when you are sick. If we rule out single payer as a viable solution, just what are you guys proposing? Is your GP sending you across town for a chest xray to confirm a pneumonia diagnosis really the way we should go? The question is why do these loopholes in reimbursement exist and why aren’t the insurers fighting this stuff tooth and nail?
MattR
@Sly: WTF. How did you get that block quote through moderation? Is there some sort of platinum commenting package that I need to pay for?
Phoenician in a time of Romans
Well, let’s take a look at how it works in a single payer system.
If I need an MRI, I can get it for free from the local hospital, or I can pay for it from a private company. If I have to pay for it, I can do it out of my pocket, or I can get insurance to pay for it – insurance is not necessary, and probably less than half of NZers have it.
I had a serious spine infection a while back. When they thought it was a muscle problem, they scheduled a low priority MRI slot at the hospital and put me on a six week waiting list. When it was clear I had a real problem and was admitted to hospital, I had several MRIs with only a days notice, but usually after normal hours. When I was an outpatient, they tended to schedule these with a month’s notice or so. I must have had four or five MRIs during my sickness – none of them cost me a cent.
If I had gone private – http://pacificradiology.co.nz/wp-content/uploads/2012/04/Internet-Pricing-230412.pdf – it would have cost me only $1,300 NZ a pop, but there are community health schemes which may have paid for almost all of that. As I understand it, American hospitals offer them for about $1,800 US a pop – so even privately, I’m paying about half US prices.
As regards medicine, I have to get a prescription from a doctor (obviously), but most necessary drugs are partially or fully funded by a government agency Pharmac, and cost me a nominal $3 a pop. When I tried changing painkillers once to a non-subsidised medication, I paid a bit more, and you’re expected to pay the difference if you want anything other than the cheapest brand – which Pharmac negotiates for.
I’m just an ordinary worker, but I’ve been through a major medical crisis which would have bankrupted me in the US, and I never had to worry about money at all while I was dealing with the chance of never walking again.
I don’t know how Americans can stand it.
MonkeyBoy
On the one hand there is setting outrageous prices and getting them paid by patients or insuurers.
On the other is setting an outrageous prices that hardly anybody pays fully but exists as the “real price” so that when a treatment isn’t paid for it can be fully deducted as a “loss” against profits. I think this latter practice gets a wink and a nod from most who could regulate it because after all “free treatment’ is being provided.
Sly
@MattR:
I know the secret WordPress handshake. I can’t say much about it, but I can say that you will definitely sprain the muscles in your middle finger if you do it wrong.
patrick II
@Phoenician in a time of Romans:
In Japan, France, Germany, those MRI’s cost about $160 to $170 a pop. You often hear that the high cost of U.S. medicine is in part because of doctors running unnecessary tests to protect themselves from lawsuits, but in Japan you could have ten MRI’s for the cost of one in the U.S., and in fact the Japanese average more MRI’s per patient then we do and for considerably less total cost.
JoyfulA
It is (or used to be) illegal for physicians to sell drugs from their offices in PA.
I really don’t want orthopedic surgeons prevented from x-raying in their offices. Today’s visit, 6 weeks after staple removal (no x-ray then) from my new knee, would have required me to get a scrip for an x-ray from the doctor’s office, go somewhere else for the x-ray to be done, wait (usually overnight) for a radiologist to read the films (and be paid for doing so), go back to the x-ray place to pick up the films, and hand-carry them to the doctor’s office. Today I just went to the surgeon’s office, the x-ray tech did the studies to show exactly what the surgeon wanted to see, he looked at the x-rays, had me do some tests of how the knee works, and pronounced me AOK.
Pen
@JPL: You’ve got my sympathy. I had that in both knees and while I don’t know how much I grew I do know that going to Mass with family was a royal pain in the knee. Stand up, kneel, sit down, repeat…. not good when your kneecaps feel like they’ve been hit with a hammer.
But an MRI? Really? The doctor couldn’t just do a pressure test with their fingers and gauge your son’s pain response? It’s a simple diagnosis, and definitely NOT one that needs an MRI.
FlipYrWhig
@Sly: This is a very wise comment. And it highlights how fatuous it is when people act like “corporations” and “corporatists” are all lining up on the same side of The Health Care Debate. Every nettlesome one is nettlesome in its own way.
Just Some Fuckhead
@SatanicPanic:
Insurance companies are just skimmers. They’ll take it in the shorts from the health care providers and then turn around and raise your premiums to make it back. It helps to imagine the health insurers and providers in cahoots working against you.
My wife was renewing her company’s health plan some time back and Optoma (the good one around here) told her that the previous year Optoma paid out 20% more in claims than her company paid in and so they upped her premiums close to 40% for the next year.
SatanicPanic
@Sly: Great points. I agree with you on the “ACA sucks” crowd- it never made sense that this is a giveaway to insurance. Maybe to hospitals, but then they were getting a raw deal having to provide service to people just showing up at the ER.
j
In the late Seventies I was in a hospital for 2 days. The nurse asked me if I wanted some foam rubber slippers so I could walk around the floor and go to the visitor room etc. as the doctor ordered, so I agreed.
My insurance company refused to pay for the slippers because although they were 15 cents of foam rubber the bill listed them as $24.99!!
And aspirin cost $8.00 each. Multiply that by 4 a day for 2ish days and you can go to Walgreen’s and buy 100 of those suckers and still make a profit.
FlipYrWhig
@SatanicPanic: The people who were certain it was a “giveaway to insurance” probably think home energy audits are a blatant giveaway to power companies.
gwangung
@FlipYrWhig: People who were shouting corporatist giveaway probably haven’t played any multi opponent games. They’re reducing everything to us vs. them mentality, when there’s actually multiple opponents on the playing field that a canny player can play off against each other in order to get what he/she wants.
In fact, I’d say the attitude of many anti corporatists may actually CREATE unity among the various factions where there wasn’t any before.
j
@SatanicPanic: NO! They raise the premiums and still soak up 40% as profit for themselves.
Hell, if a doctor charges $100.00 for one aspirin the insurance company will charge $140.00 in charge downs just to cover their overhead (bonuses and private jets for the executives).
Roger Moore
@RSA:
It’s not about billing, it’s about unnecessary, or questionably necessary, procedures. When you own a MRI facility, every case looks like it needs a MRI, maybe two or three just to be sure. Honestly, the real solution is something like NHS, where you have not just single payer but also single provider. Then you can have all the facilities under one roof without the worry that anyone will be tempted to run unnecessary tests to fluff up profit margins.
cmorenc
@Steve in DC:
@RSA:
I come from a medical family: my father was a doctor, my wife is a doctor (both OB-GYNs), my older daughter is a doctor (doing her residency in anesthesiology) and my younger daughter is about to start training to become an R.N. The answer to whether doctors go into it for the money, or to honestly try to improve people’s lives is: both and neither. The amount of hard work and long hours (often very personally inconvenient hours) involved in the training (four years of college + four years of medical school + three to four years of internship/residency) is an extraordinarily demanding gauntlet to run, all while living on a relatively modest income. The money is decent enough to live a very comfortable, affluent life starting sometime in most doctor’s early 30s, often though with a heap of student loans to begin paying back. YES there are quite a few doctors who have too much of a green-eyeshade mentality, and focus too much on running as highly profitable a business as possible, but there’s substantially more who love what they’re doing and enjoy the comfortably affluent income as a major side benefit of what they do, but not at all the reason for what they do. The fact that there are such a high percentage of physicians in this latter category is ironically reflected in the surprising frequency with which physician practices are victimized by practice managers or bookkeepers who successfully embezzle hundreds of thousands of dollars from the practice over several years before they are caught (fortunately none of the doctors in my family have been victims-yet).
THE PROBLEM WITH PRIMARY CARE PRACTICES is that from the perspective of the doctors, as “gatekeepers”, is that the work is too little rewarding practice of medicine and too much practice of administration at too modest a rate of pay compared to the specialists they are referring to. Too many patients with essentially intractable partly self-inflicted lifestyle diseases, too broad a range of medical issues presented to be truly knowledgeably master. (My daughter, having just completed her intern year, echoes this sentiment strongly regarding internal medicine, and is glad she’s not going into it).
YES I’ll agree we can get enough competent people to become doctors if some of the specialties get paid less royally than they do now, and the work of becoming a physician gets rewarded with a reliably comfortable upper-middle class income rather than a yacht income.
Cluttered Mind
I wouldn’t be so sure that moving to Canada to get away from insane right wingers is going to work. Take a good look at Canada’s current government, they’re basically being governed by a smarter George W. Bush right now.
j
@RareSanity: That exists, and to make matters worse the pharma companies reward doctors with goodies like X-Ray machines and MRIs and dialysis machines based on how many pills they prescribe.
Remember in the 1970 to 1983 era where everybody was given tetracycline for anything from acne to anxiety?
I was joking about it with my doctor a few months ago and he told me the whole scam. The doctors called it “Vitamin T”
Companies like Baxter make equipment and also make drugs. The more drugs a doctor prescribed would count as points for discounts on machines.
A small town doctor could really use an expensive MRIay machine but he can’t afford it. So he gets together with another local doctor and all of a sudden the locals are all being treated for gout, or something, and presto a cheap semi-used MRI machine is jointly owned by these 2 doctors, who start a new clinic called “Local MRI Associates LLC”.
THEN all the other doctors in the area are suddenly using it (and buy in to the LLC) and Baxter or whatever drug company supplied that machine laughs all the way to the bank.
So, in short (although this was very long) the DRUG manufacturing companies should not be EQUIPMENT manufacturing companies.
We have a long way to go to bust up these monopolies.
j
@RareSanity: That exists, and to make matters worse the pharma companies reward doctors with goodies like X-Ray machines and MRIs and dialysis machines based on how many pills they prescribe.
Remember in the 1970 to 1983 era where everybody was given tetracycline for anything from acne to anxiety?
I was joking about it with my doctor a few months ago and he told me the whole scam. The doctors called it “Vitamin T”
Companies like Baxter make equipment and also make drugs. The more drugs a doctor prescribed would count as points for discounts on machines.
A small town doctor could really use an expensive MRIay machine but he can’t afford it. So he gets together with another local doctor and all of a sudden the locals are all being treated for gout, or something, and presto a cheap semi-used MRI machine is jointly owned by these 2 doctors, who start a new clinic called “Local MRI Associates LLC”.
THEN all the other doctors in the area are suddenly using it (and buy in to the LLC) and Baxter or whatever drug company supplied that machine laughs all the way to the bank.
So, in short (although this was very long) the DRUG manufacturing companies should not be EQUIPMENT manufacturing companies.
We have a long way to go to bust up these monopolies.
j
@RareSanity: That exists, and to make matters worse the pharma companies reward doctors with goodies like X-Ray machines and MRIs and dialysis machines based on how many pills they prescribe.
Remember in the 1970 to 1983 era where everybody was given tetracycline for anything from acne to anxiety?
I was joking about it with my doctor a few months ago and he told me the whole scam. The doctors called it “Vitamin T”
Companies like Baxter make equipment and also make drugs. The more drugs a doctor prescribed would count as points for discounts on machines.
A small town doctor could really use an expensive MRIay machine but he can’t afford it. So he gets together with another local doctor and all of a sudden the locals are all being treated for gout, or something, and presto a cheap semi-used MRI machine is jointly owned by these 2 doctors, who start a new clinic called “Local MRI Associates LLC”.
THEN all the other doctors in the area are suddenly using it (and buy in to the LLC) and Baxter or whatever drug company supplied that machine laughs all the way to the bank.
So, in short (although this was very long) the DRUG manufacturing companies should not be EQUIPMENT manufacturing companies.
We have a long way to go to bust up these monopolies.
Sly
@gwangung:
You can learn a lot about effective political strategy by playing lots of Risk and Monopoly as a child.
The early New Deal, under NIRA, basically pit Northern businesses, who had to operate under stricter state regulations enacted under the Progressive era, against Southern businesses, who did not. For instance, that’s how we finally got Federal Child Labor Statutes in the 1930s; business associations in states with strong child labor laws were compelled by financial necessity to lobby for it.
It was only after NIRA was struck down and the Wagner Act sidelined industry that they started revolting en masse against the Roosevelt administration.
@SatanicPanic:
Providers were co-opted by having the biggest cost control proposals taken off the table. There are still cost controls in the ACA, but none of them are really huge. Same deal with state regulators; instead of one Federal exchange managed by HHS, we’re getting state exchanges managed by… you guessed it… the state insurance commissioners.
If anyone was bought off in the ACA, it was the non-profit insurers and the drug companies. The non-profits got ways to undermine the for-profit competitors that have been bleeding them to the bone for decades (MLRs, guaranteed issue, etc). The business strategy of the for-profits has been to dump less profitable policy holders onto the non-profits and the public systems, due to their immunity from anti-trust law. And the drug companies got a very sweet deal on patents and generics.
If the ACA gave away too much, it was probably to the drug companies. But, then again, you never saw ads put out by drug lobby while the bill was being drafted.
Single Payer is exceptionally difficult because NONE of the stakeholders in the system want it. The for-profit and private non-profit insurers would either be put out of business entirely or restricted to a supplemental policy market (which is what its like in France). Providers, drug companies, and device manufacturers would be forced to negotiate on price with the Federal government, a powerful single entity, when they already chafe under having to negotiate with an insurance regime with multiple actors. And state regulators would lose regulatory control, and thus funding for their offices.
SiubhanDuinne
@JPL: Our Tom, eh?
Southern Beale
I guess I”m confused. I’ve never EVER gotten drugs from my doctor that weren’t freebie samples. I’m always given a piece of paper to take to my pharmacy to get filled.
joes527
@Steve in DC: The problem with making more drugs over the counter is that it actually makes them more expensive from the insured consumer’s perspective.
Instead of a co-pay for a prescription, you need to pay the whole cost of an over the counter. Theoretically the insurance companies could charge less because they are covering less, but in practice they just pocket more profit.
MikeJ
@Sly:
Diplomacy is still the best teacher, only because it is the most cutthroat.
There’s a free online version. We should get a game going here.
Mnemosyne (iPhone)
@joes527:
Yep. The Zyrtec that cost me $4 with insurance is $15 now that it’s OTC. So the cost savings to me are where, exactly?
Larkspur
@Southern Beale: Yeah, me too. And I have always been grateful for the samples. One time when I wasn’t able to get samples of a fairly expensive drug, which turned out not to work for me, I took the remaining 50+ pills to the doc for her to use to dispense as samples to other patients. It’s probably illegal (I know pharmacies can’t “recycle”), but I hope my doc was able to save someone a little money.
Wait: once I got a pitch to buy products directly from the doctor’s supply, but this was a dermatologist whose salesperson made the pitch before I even saw the doc, so I was out of there, stat.
Omnes Omnibus
@Steve in DC: Dude, you seem bitter about social liberals, educated professionals, female gamers, and, well, pretty much everything else.
SensesFail
Just another example of the innovative, “common sense” solutions of The Free Market!
/snark
Atticus Dogsbody
No health insurance. $5.80 per month for my Nexium. Aussie! Aussie! Aussie!
Tripod
The day of the owner-operator practice is about gone. Besides spiraling school and overhead costs, Medicare and insurance bill rates are better as the size of the provider scales up.
It’s now much more accurate to describe two provider templates: Clinics and Hospitals. They are very different beasts in regards to patient flow and where they make their money.
Anyway, this isn’t about some M.D. running a pill shop to fund his middle age crazy. This is about CVS and Walgreens and every other chain pharmacy slapping in a couple of exam rooms, hiring some P.A.’s and going into the primary care business. It’s a loss leader for the Pharmacy business – and they are hammering traditional primary care providers on cost and convenience.
NR
It sure is a good thing Obama cut that secret backroom deal to kill drug reimportation in the health care bill. Otherwise, we might be able to do something about these costs, and Big Pharma’s profits would go down. Thankfully we had Obama to make sure that didn’t happen.
Dexter's new approach
@Sly:
This is a informed summary. But I’ll add that within the provider group there is tension between docs and hospitals. The hospital profit centers are focused in areas like high-cost surgical procedures performed by specialists (basic care is a loser for them.) Many/most of these specialists are free agents and can take their patients to different hospitals if they want to to a point (“if they hassle me about using $5K of InFuse on all my patients because it might improve my outcomes – and I get payed the same either way – I’ll go somewhere else.”) And many have been been showered with phony research dollars and boondoggles by drug and device companies to buy their loyalties (few admit they do it themselves, but most believe it is a common in the field.) This dysfunction undercuts the hospitals’ leverage when negotiating price for drugs and devices. Furthermore, procurement contracts typically forbid the disclosing the price paid, so price transparency – so important in a free market – barely exists.
And I agree that insurance companies are just along for the ride. I suspect that they’d rather make money being proactive, focusing on prevention etc, but the incentives aren’t there. Too many people leave after a few years (they change jobs, their company changes plans, plans suck) to invest hard in the that stuff. And the smaller companies that have tried this have mostly failed. So they can work around the edges to cut costs in good and bad ways, but mostly they peg their reimbursement off of Medicare +10-15% (+10% more more admin and in most cases 7-10% for profit) and that’s your premium.
Medicare is efficient admin-wise but is not a good price setter. Until recently, if a procedure costs X% more than last year, they raise reimbursement by ~X%. There’s been some adjustments to correct that but it’s still a positive feedback loop. Direct U.S govt pricing negotiations are a must to start.
RSA
@Roger Moore, @cmorenc: Thanks for pointing out some issues I wasn’t thinking of.
Dave
@Steve in DC: Minimum of 39,000 hours of education and training to be minimally qualified to sit for the medicine boards and Internal Medicine is one of the shorter residency programs. Almost $ 200,000 in educational debt at the time of graduation from medical school. I am well paid, but if Obama gets his way, the expiration of tax cuts for the top two brackets will not effect me. I don’t earn that much more than an experienced RN with an associates degree; once overtime is factored in.
The days when I can sneak out early are only 9 or 10 hours long. average days are 10 to 12 hours and the occasional 14 hour day does happen. I also work 12 hour night shifts for two months of the year — I’m a hospitalist. As for all that “respect,” more like walking around with a target on my back waiting to be named in a law suit. Oh and the narc seeking drug addicts are always enjoyable, the death threats from patients with violent pasts are a blast, and just the ever present threat of violence every single day is a treat.
I would be careful about making being a doctor too much more odious than it already is a lot of the time. Because if you do, nobody will be there when you are sick. Funny thing, after typing all of that, I do like my job. If I couldn’t be a physician tomorrow, I do not what I would be. I guess it is what I am. Unlike the other professions, I actually did stand on a stage and profess my intentions towards humanity.
And the only doctors I ever met who sold medications were the “alternative” types who push vitamins. And why would somebody buy Zantac from their doctor when they could by generic ranitidine for $8 to $15 a bottle ( 50 to 100 tabs )at Target?
mikeyes
@jl: The laws (Stark laws, Anti-kickback laws, etc.) are already on the books. Here is a start if you want to look them up.
Chrisd
As a fellow doctor, I can commiserate, but you’re wasting your time on a site that is lousy with lawyers. They want Canadian-style single payer, but without Canadian restrictions on malpractice. Actually, what they really want is U.S.-style medical bells and whistles for when they get seriously sick, but they expect it all at NHS prices.