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January 01, 2010

Cost Control

Another beautiful theory shot down by ugly facts:

The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.

More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.

Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.

“Many physicians have said, ‘I simply cannot afford to keep taking care of Medicare patients,’” said Heim, a family doctor who practices in Laurinburg, North Carolina. “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”

Well no kidding. Of course the Obama administration could have simply talked to any military family trying to find a civilian doctor or dentist taking TRICARE or Delta/United Concordia over the last decade or so. But then asking such a question implies that one is willing to pay attention to the answer:

Prices operate as signals in a free marketplace, efficiently allocating goods to those who want them and are able to pay for them. Few Americans would accept the proposition that we don't need information to make intelligent decisions and yet too many Americans buy off on the notion that markets will operate efficiently if the federal government restricts the free flow of information between consumers and producers.

It's almost as though we were living in an alternative universe where reality is kept strictly at arm's length.

Then again, maybe that's the problem.

Think high costs make it too hard to get a good or service? No problem! Just have the federal government change the price tag!

What could possibly go wrong?

Posted by Cassandra at January 1, 2010 11:08 AM

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As a reservist who has bounced 'tween tricare and a civilian plan, I wholeheartedly concur that tricare - as with almost every government plan - is broken.

I have made arrangements to keep my bride on my civilian job plan and not even mess with tricare. I am still - after a year - working on sorting out tricare failures to pay, and other doctor expenses. I wont even go into detail on dental but...We had minor work done, and I finally had to work that one out with the dentist becuse tricare dental would not pay (and I liked the dentist.)

Like most things where government pay is involved, they just drag it out to wear you down until you finally give in and pay, because its your credit rating and your reputation, not theirs.

Posted by: kbob in Katy at January 1, 2010 11:55 AM

What is really telling to me is the number of former military doctors and dentists who began taking TRICARE and DELTA dental patients b/c they wanted to continue supporting the armed services and discontinued the practice b/c it was putting them out of business.

There's a lesson there somewhere if anyone cared enough to think about what it is.

Yeah. Cost control.

*rolling eyes*

Posted by: Cassandra at January 1, 2010 01:06 PM

Hmmmmm, unlike most, apparently, I have no complaints about TRICARE. Of course the fact that I work at the AF Academy Hospital (just a large clinic now) and my wife and I get almost all of our medical care there, may have something to with it. TRICARE seems to work fine, at least for me, as long as you are receiving care at a military medical facility, but from the sound of things it may not be such a bargain if you have to go anywhere else.

Posted by: Charodey at January 1, 2010 02:16 PM

When I receive my billing statements I notice it usually takes 3 months from the time my doctor's office sends his bill in until he gets paid. He usually gets a little more than half of what he requests. During my yearly exam I ask him how that affects his cash flow and he stated the obvious. His office costs are predictable and reimbursements are unpredictable.

He is a military doctor from the Viet Nam era and is in his 70's. He can't retire because he can't afford to yet. I got the feeling I wasn't the only one in the room having his prostate checked. Worrying about finances is not conducive to a gentle bedside manner, if you get my drift.

Now that the Mayo in Glendale, AZ. is not accepting medicaid/medicare these patients are on the market with a finite number of physicians. Less time with patient, more chance that something is overlooked, more work for less money, rising cost of running the practice.

The lines on the chart are about to cross and trend downward. I think I will send a box of Krispy Kremes to the "Death Panel" and hope my Doc doesn't cut back on the K.Y.

Posted by: vet66 at January 1, 2010 04:57 PM

You know, its not fair that the big celebrities and CEOs get to fly around in Gulfstream IVs, while the public has to go Greyhound. I am looking forward to Obama making those private jets cost only one dollar, so every american can own one. Think of it as a variation of the "chicken in every pot" message.

When reality no longer applies to your actions, there's no end to what you can do!

Now, once that's done, I expect the govt to finally create those personal flying cars we were promised since the 50s.

Posted by: a former european at January 1, 2010 06:38 PM

Thank you for posting this!! I really like your blog...

Common Cents

ps. Link Exchange??

Posted by: Steve at January 1, 2010 09:39 PM

Mr/Ms Former European....

I'm not greedy. If Obie would make a single engine prop plane available for say...$250.00, I would go for it. I could fly the jet, but below 10K feet, you can't go more than 250 KIAS, and going up high you just don't get the pleasure of flying low and slow....so....$250 is a good price for me.

Reality is such a difficult concept when you live in a fantasy world where you are King of the world. Ask Obie.

Posted by: kbob in Katy at January 1, 2010 09:57 PM

The peasants are revolting. Just ask M'chelle.

On top of that, the dental premiums are more than TriCare, and the benefits are...pffft. We have three kids in braces. To date, we have paid $5,000 of the $7,000 cost, half of which the government dental plan was to cover. Uhhhh...sure. I had better get a huge refund or beg the IRS to allow us to deduct what we have paid instead of 7.5% of our income...but wait, that is CONGRESS who sets the ceiling for it.
The IRS are just the collection imps.

After 6 years, we are still having issues with a 'point of service' proviso.

There's more, but I don't want to spend the remaining holidays being torqued at a system that is being broken to get coverage for less than 7% of US residents who do not have it.

Posted by: Cricket at January 2, 2010 01:06 AM

Think high costs make it too hard to get a good or service? No problem!

None indeed. Merely get yourself elected to Congress. The Congers -- as usual -- *exempted* themselves from the bill's provisions and, in order to ease their consciences (sorry -- the sarcasm just sorta slips out whenever I think about the Congers) for not giving either military retirees or medicaid recipients a COLA for the next two years, gave themselves a pay raise...

Posted by: BillT at January 2, 2010 03:44 AM

Good post, as always, Cassandra! And I so agree with Bill's point about Congress continuing with their lavish perks while imposing their cockamamie schemes on the rest of us and being miserly with our bravest!

To be fair, tho, my private insurer is so notorious for either delaying payment or paying way less than billed, that ALL my family's doctors require us to pay them up front in full. We then battle months to years to get reimbursed partially, with random things (like the treatment that saved my husband's eyesight) denied because they are experimental. We also had to give personal credit cards and promise to pay in full to a hospital for a kid's lengthy hospitalization because our insurer is so notorious for denying claims (Give me an A, give me a BC-BS). Even tho they paid most of it in the end, I was a basket case waiting to hear.

In addition, even several years ago (when things were a little better) we could not get one kid admitted to a hospital where there was a bed because they told us "your private insurance will only pay us 60 per cent as compared to 100 from X )

My point is not that Obamacare is the solution, but that many dupes who already have private insurance over-optimistically think that they will do better when hospitals are run like the DMV.

In our family, we have long spent approximately half of our family income on health care because we have the misfortune to have members of the family with chronic illnesses. The thing is, under private care, we have the freedom to make that choice, sometimes to spend more, and to get good care for our family members.

By contrast, my parents died prematurely under socialized medicine in the UK, and were denied tests, treatments that would have been routine in this country and that might have kept at least one of them alive considerably longer. One of the things I learned from this is that it is better to have expensive care available. A family can sometimes figure out how to pay for it if it is there.

Posted by: retriever at January 2, 2010 10:22 AM

Retriever -

I empathize with your situation. My husband is a heart transplant recipient on whom expensive tests must sometimes be done. He has an annual two-day series of invasive and non-invasive tests that must be done to kick the tires on the transplant. This year has been quite an ordeal, not from the point of the transplant, but from the results of a 3-day bout with food poisoning in March. That started a long period of diarrhea during which he lost 40 lbs. We got that sorted out, only to have him start vomiting after he had regained his lost weight. He lost 60 lbs with this last problem. He's been scoped and prodded for months, but on Dec 17 his symptoms went to eleventy. He was admitted for emergency surgery Dec 17, after it was discovered that his stomach had found its way into his chest, under his collar bone on the right. They found a hole in his diaprhagm through which his stomach exited (and must have been going up and down on its own for several months, according to speculation by the surgeon). They pulled the stomach down, patched him with Goretex, and he's now hobbling around very carefully, but keeping his food down for the first time in months. Five hours in the ER was $10K. That's the first bill that has come.

Our insurance, Aetna, routinely pays what they're going to pay very promptly, though I don't know how a doctor can stay in business with the steep discounts they must take from such insurers. We have to pony up 20%.

Why do I tell this sad tale? Because my good friend in Alaska has been self-employed for years, and has never carried health insurance. She has had many hospitalizations, most recently for a knee replacement, and after years of struggling with obesity got a lap band. How does she afford this?

She's a realtor, and negotiation is in her blood. She asks the billing department what BC-BS would pay, says she'll pay that amount and no more. They take it. If you are trying to pay 100% of your bills, and have not tried to arm-wrestle with them over price, you might want to give it a go. It works for my friend. It's true that she pays more than me for the same operation, but she doesn't pay what's written on the bill, not by a long shot.

It fries me that individuals with no insurance are billed at 100%, and they think they have to pay it, and pinch pennies, have bake sales, and cough up a lung to do so. They don't negotiate. They don't know they can.

When I saw the transplant surgeon's payment from Aetna I nearly choked. If memory serves, he billed $20,000 for the surgery (in my opinion, it was worth every penny and double that), but Aetna sent him $3000. This was $272/hour for the eleven hours he was personally attending to my husband, and I know he was negotiating with the organ-sharing people for an additional 7 hours before he started the transplant. That takes his pay down to about $167/hour. But the sad fact is, that if he'll accept that from Aetna, he should accept it from me, or you.

Stay strong!

Posted by: MathMom at January 2, 2010 12:44 PM


Your comment should be on a billboard somewhere.

Posted by: Cassandra at January 2, 2010 12:49 PM

Thanks, MathMom. You are an inspiration! :)

Posted by: retriever at January 2, 2010 04:26 PM


I'll have to remember this when I start getting my bills for my little trip to the hospital the Monday before Christmas...

Posted by: Miss Ladybug at January 3, 2010 01:21 AM

My friend who is a nurse practitioner with many years of experience just told me last week about her doctor friend who has 3 kids in college. He has a big practice with an office staff of 5 just to keep track of the paperwork. He is looking to change careers because with this new payment schedule from the feds eh will not be able to keep his practice going and make a living. He sees a lot of Medicare patients but he says his personal expenses in overhead are not even covered by that and what he would have to charge his non-Medicare patients would just chase them away. He has a degree in math so he is thinking of going into engineering and leaving the medical field entirely. I don't blame him at all. Shame because he is an excellent doctor who takes great care of his patients but the gov is essentially chasing him out of the field.

Posted by: dick at January 3, 2010 10:57 PM