Sunday, January 17, 2010

Achieving pact on health care is not easy

Understanding the problem is half the solution. But how can consensus be achieved when the health care system is little understood? Amid the confusion, a glimpse at the system may add some clarity.

The system generally consists of the following major components: Medicare for the elderly and disabled; Medicaid (known as Medi-Cal in California) for those eligible; County programs for indigents who do not qualify for Medi-Cal; private insurance; and private (or no) pay. Medicare generally pays less than private insurance, although some insurance companies reimburse at or below Medicare rates.

Under certain circumstances Medicare can be purchased by persons not otherwise eligible for it. Like Social Security, there is concern that Medicare will go bankrupt. In recent years, the federal government has imposed ever increasing cost controls. Medicare auditors who deny claims for lack of medical necessity are paid a percentage of the savings. There is a complex appeal process for providers. A number of hospitals are now paid more if they implement certain treatments deemed more effective and cost-efficient.

Medicaid is the federal-state matching funds program for eligible indigents. Rates paid are typically well below the cost of the services.

For indigents who do not qualify for Medi-Cal, California law requires counties to pick up the slack. This is why Fresno County owned and operated Valley Medical Center for decades and why it has a 30-year contract with Community Medical Centers. Private insurance and private pay cover the rest of the population.

Federal and California law requires hospitals that operate full-service 24-hour emergency rooms to treat any person's "emergency" medical condition, without first asking questions about payment. The use of ERs for debatable "emergencies" is well-known. An important question is whether, even if government provided direct support for these patients' care in an effort to limit use of ERs, there are enough primary care doctors available to treat them outside the ER.

"Medical necessity" confounds consensus on health care reform. Everyone wants the best care available, and politicians want to give it to them. If a person complains to his doctor about a neck strain, should the doctor order an immediate x-ray or should he prescribe aspirin and see if the patient improves before ordering more expensive procedures? Medicare will have the benefit of hindsight to declare the x-ray was not necessary, leaving the health care provider unpaid. But what if the doctor elects not to order the x-ray, and the patient in fact has a slipped cervical disk that causes permanent major weakness in the right arm? Enter the patient's attorney.

Indeed, because there can be wide disagreement among physicians as to what needs to be done, and because as technology improves there is an ever-increasing number of things that can be done, lawsuits against health care providers will not go away. To control the rising cost of medical malpractice insurance premiums, California enacted "tort reform" that, among other things, limited the amount of "noneconomic" damages a victim of medical negligence could receive to $250,000. So, one who is rendered a paraplegic by a physician who runs a stoplight can ask for million of dollars in "noneconomic" damages, but the same person injured by the physician's medical negligence is limited to $250,000.

National "tort reform" will be debated against the backdrop of ever increasing pressure for health care providers to control costs.

Consensus on health care is elusive without a thorough understanding of the present system.
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