As private health insurers argue their talking points that we’re all going to die from bad health care if the government puts its fingers on the scale, while the cost of their policies rose at a rate of four times the earnings rate of the past 10 years, I had to laugh.  Living with Dr. Simple Justice, a/k/a SWMBO, I’ve come to hear a bit about this world from the other side.

Most private health care providing, those not working on salary, are providers for a number of systems, such as United Healthcare, as well as medicare and/or medicaid.  They have contracts with these HMOs, insurers and the government with require them to agree to their payment terms.  They set the reimbursement rates for medical services, sometimes providing for the patient to pay their deductible or a co-payment.

Since Dr. SJ first opened her shop in 1984, her reimbursement rates have fallen approximately 60%.  In other words, she now receives payment of 40% of what she received way back then for the same health care services.  Every year, she receives a letter from them informing her of what they will be paying for her services.  Each year, the number on the letter is a little lower than it was the year before. 

There’s no one to argue with about the number.  It is what it is.  The choice is to accept patients from that insurer or HMO or government program or not.  When the cost of providing the service exceeds the reimbursement rate, as it has with numerous outfits, she terminates her contract with them and stops taking their patients.  She’s done this a few times. 

If I do say so, Dr. SJ is awfully good at what she does.  She refuses to give her patients the bum’s rush, or put them on expensive equipment and pretend its the same thing as real treatment.  She makes herself available to them when they need her, calls in the evening to explain things again or to talk with family members who are worried about their parents or children.  It’s all part of the job.  It’s not reimbursable. 

When she first opened shop in 1984, we leased a bunch of expensive equipment because she felt that it was necessary to perform treatment in some cases.  The leasing company makes very clear that the only viable way to pay for their leases is to make sure that the equipment is fully utilized.  When managed properly, the equipment becomes a profit center.  When neglected, it’s a very expensive burden. 

Properly managed equipment means that you schedule patients to use it during every available hour.  Sometimes, patients don’t need this equipment, whether be cause the tests aren’t necessary or the treatment isn’t helpful.  The equipment can be used as a placeholder for patients, meaning that they feel as if you’re doing something useful even if you’re not.  Patients don’t argue about tests or equipment; if you tell them that’s what they need, they are happy to comply.  The equipment gets used (and billed), the patients are kept busy without eating up any hands-on time and everybody is happy.  Except it may be totally unnecessary and unhelpful.  Not necessarily harmful, but unhelpful.

Eventually, Dr. SJ got rid of the equipment that she didn’t believe to be beneficial to her patients and only kept the stuff that she thought was really needed.  And then, she only used it when it was appropriate, beneficial to her patients.  Instead of equipment being a profit center, it became an expense as it sat idle if it wasn’t indicated.  She ate the expense rather than use it just to bill it out or keep patients busy.

Most of Dr. SJ’s treatment is hands-on and personal.  This means that her time is what she gives to her patients.  It’s the scarcest resource she has, but it’s also the only resources that proves truly beneficial.  She receives the same reimbursement for her time as someone who spends 12 seconds putting someone on a machine for a half hour.  Her patients get better, and then they go away.

Dr. SJ loves what she does.  I bet she would treat her patients if she wasn’t paid at all, not that I’m suggesting such a thing.  Of course, she also has a swell husband to make sure that the milk money is always there.

Whether the government’s intrusion into the private domain of health care will put the private carriers and HMOs out of business has yet to be seen.  That it will drive costs down in a competitive climate is likely undeniable, at least at first.  Even without executive salaries and perks, it’s unclear that government won’t create a bureaucracy that will eat up money at pace that equals, if not dwarfs, private enterprise.  The fact that it could be done well is no assurance that it will.  The fact the private enterprise has been a disaster makes taking a chance on governmental involvement more palatable.

But with all the money being pumped into the health care industry, Dr. SJ makes a fraction of what she did 25 years ago.  It’s not going to her.  She could play the system, billing for needless tests, using expensive equipment as a profit center and quadrupling up on patients by putting them on unhelpful equipment where she need never actually touch them to make the reduced reimbursement rates less painful, but she won’t. 

I pay for healthcare insurance.  It costs a bloody fortune, and I’ve never come anywhere near using as much in services as I pay out in premiums.  I would prefer to be “self-insured,” but the problem is catastrophic disease or injury, which could swiftly bankrupt anybody.  We’re all just one car crash away from financial and medical ruin.

It’s not just what we pay into the system that matters, but what we get out of the system that counts as well.  Nobody talks about it in real terms.  Some complain about malpractice insurance rates, but they’re not really a problem for Dr. SJ.  She’s never been sued.  This vast amount of money is going somewhere, but it never manages to find its way to her mailbox.  One day, when the checks that come in are less than the checks that go out, I will ask her to pack her bags and enjoy life without health care insurers, HMOs or government programs. 

As people argue about how much money we pump into the system, there’s little understanding of what becomes of that money once it’s paid and where it comes out on the other end.  This isn’t a guessing game around our house.  We know one place where the money isn’t ending up, in Dr. SJs hands.  Lucky she has such a swell husband.