(01-31-2018 08:42 PM)bullet Wrote: You are also not considering the impact of our tort system. Malpractice insurance is a huge cost for many specialties and expensive for all. Extra tests run because of lawsuits add a huge amount of non-value added costs. The worker's comp system has driven out a huge amount of costs by getting rid of most of the lawsuits.
We also have an insurance system where the insurance companies are motivated not to pay meaning providers and insurance companies have a lot of employees adding no value, just shifting cash flow from one entity to another. We aren't regulating that and its getting worse.
And as Arkstfan says, there isn't much transparency in prices.
News today in Arkansas is that the company handling pharmacy benefits in Arkansas for Blue Cross (CVS something or other) is reimbursing pharmacies at below the wholesale cost of certain drugs.
In theory one might think that well that's good because the pharmacies can refuse to stock the drugs until the wholesaler drops the price.
Problem is Grandma needs the refill today. So the pharmacy has to either stock it and sell at a loss or Grandma can take her business to CVS (well in a few places in Arkansas) or Grandma can start ordering the medication online (from a CVS owned company).
That creates an interesting dilemma because it smells like CVS using the management contract to handle reimbursements to gain market share by squeezing its competitors in the retail market.
If it were a truly independent company handling the benefits it just looks like a business dispute.
The tort system is a double edged sword.
Years back there were dire predictions that we would not have anesthesiologists because the malpractice claims were going out the roof.
Their Board tasked a group of highly regarded members to comb through malpractice claims in coordination with malpractice carriers and identified a number of issues that could be addressed. Two fairly inexpensive changes (one was keeping an O2 monitor on patients, don't recall the other) and some procedural changes were suggested.
The Board declared their recommendations to be "the standard of care" which meant deviation would essentially be evidence of malpractice.
The number of anesthesia related deaths and injuries plummeted and 20 years later it was possible to buy malpractice coverage as an anesthesiologist for less than the price 20 years earlier without adjusting for inflation.
So that was good.
But the downside is that typically juries when they find someone at fault for a car wreck or malpractice or that loose step on your front porch they add up the injury costs (medical costs) and then give some related amount for pain and suffering or in some cases as punitive damages.
If medical costs rise 10% then you can certainly expect tort costs to rise a similar amount even though the other factor usually used, lost wages, has not been rising much at all the past 15-20 years.
I also wonder how much of "defensive medicine" is a way to justify to yourself ordering extra tests from your own lab or own imaging machines to make more money. I'm not doing it to increase my income, I really need it to protect myself from malpractice claims. I tend to suspect it is a little of both.