Tuesday, March 01, 2016

Medical Economics

In the frantic, outraged howling over how the Affordable Care Act (AKA "Obamacare") is destroying the nation, there's a simple issue that gets buried amid the lawsuits and the neverending stream of useless Congressional votes to repeal the law: it represents an attempt, whether one agrees with it or not, to address the serious problem of the cost of health care in this country. I take no position on whether the ACA is good or bad ... nobody will ever agree on that and every side of the argument can marshal vast armies of data, statistics, and apocryphal stories to "prove" that they are correct and everyone else is either a heartless fascist or a dirty commiepinkoratbastard who hates America.

What's lost in the shouting is that this country has the best health care in the world ... but Real People can't afford it.

Allow me to illustrate the point by sharing with you a shocking lesson in medical economics that I learned in the last week.

I have health insurance through my employer with a major HMO (which I will not name here). I have been with this HMO ever since I retired from the Air Force in 1996. On the whole, Agnes and I have been very happy with our care and we have personal physicians we like and trust. It's expensive, but the cost has been bearable and I've always felt we were getting what we paid for.

On January 1st of this year, my employer changed its relationship with our HMO to what's known as a "High Deductible Health Plan," or "HDHP." An HDHP saves the employer money by shifting more of the cost of health care to the employee, who must pay a fairly large amount of money (the "deductible") out of pocket before actually seeing any cost relief; and it supposedly encourages the employee to manage his or her health better by making individual doctor visits and medications much more expensive, thereby discouraging the seeking of treatment until one has one foot in the grave and the other on a banana peel.

In December of last year, my doctor prescribed a three-month supply (90 tablets) of a specialized medication for me, for which I paid about $8.00 at the HMO's pharmacy. In early February, after some additional tests, the doctor decided to up my dosage from one to two tablets per day, and told me that when the prescription ran out, he would write a new one for a single tablet with twice the dosage of the medication so that I would only have to take one horse pill per day rather than two. This past Thursday, I went to the HMO pharmacy to pick up the new prescription. I fully expected it to be more expensive, because it was double the strength of the previous one; I went in estimating to pay anywhere from $20-$30 for what had cost me $8.00 two months earlier.

When the pharmacist brought out the new prescription, the cost for 90 tablets was $1275.98 ... an increase of nearly 16 thousand percent from what I had paid just three months earlier. Martin Shkreli would be proud.*

I walked out of the pharmacy without the medication, and with a profound new appreciation of exactly what a high-deductible health plan actually means. I am still trying to figure out how to afford the medication ... and to be fair, my doctor was shocked when I told him about the difference in price, and is working out an alternative approach to my treatment.

So riddle me this, Batman ... what is the point of the world's finest health care system if people cannot afford it? Should medical care follow the usual "charge whatever the market will bear" rules of a capitalist economy, which assume that the price of goods and services will come down to a level that balances the needs of the buyer and the seller? I think that the health care industry is a prime example of why that economic model doesn't work, at least not in all cases.

I don't know what the answer is to making health care affordable for Real People. There are a vast number of moving parts and an equally vast number of stakeholders in the medical care business, all of whom are motivated, in the last analysis, by the need to turn a profit rather than the need to provide affordable care to Real People. Obamacare, whatever its faults, was an attempt to fix it. For all their screaming and bluster, the GOP has yet to offer any comprehensive and workable alternative.

I didn't tell you my story to garner sympathy, but to offer a real-world illustration of the insanity that is our American system of delivering health care. If you have better ideas about how to control costs and deliver quality health care, let your elected reprehensives know. It won't do any good unless accompanied by a large campaign contribution, but you can enjoy the illusion of having tried.

Have a good day. Don't get sick unless you're rich. More thoughts tomorrow.


* Yes, I know that the comparison is not completely accurate, because although it's the same medication, the pills are of a different dosage strength. However, simple math (which clearly does not apply in medical economics) would have suggested that if 90 tablets at a strength of S cost $8.00, 90 tablets of the same medication at a strength of Sx2 might be estimated to cost somewhere in the neighborhood of $16. As noted, I was prepared to pay a larger sum of say, $20 to $30 ... but not nearly $1,300.00.


eViL pOp TaRt said...

Oh my God! That is a scary increase! Our health care system is totally bonkers. E.R.s are overcrowded most nights. The only bright side that I can see is that the nurse practitioners who are available at many clinics in drug stores do cost less. Some pills have gotten out of sight. We are screwed, and I don't see the politicians doing much about it.

The Mistress of the Dark said...

Totally true, and what's the point of having forced insurance that you can't afford to use? Heck some of my co-pays are insane...I'm still avoiding all doctors.

But what you say is true, we have the best doctors and hospitals in the world, but unless you are super wealthy you can't afford them.

Duckbutt said...

I've had to be in the hospital for surgery, and it didn't break our bank account. On the other hand, several of the drugs my wife and I have been taking are no longer on the list approved by our Plan D provider. Arghh!

John A Hill said...

Between the high cost of healthcare and the benefits of my current life insurance, I'm afraid to get sick. Chris might decide that I'm not worth keeping around!

Elvis Wearing a Bra on His Head said...

Undoubtedly, our health care system is totally screwed.

Linda Kay said...

Great post. In working with some of the really needy people, it is apparent to me that they can't even afford the premiums, let alone the deductible costs. My SIL has set up a health savings plan to assist with the deductibles for his employees, but they are faced with the same problem. Ugh!

Mike said...

The number one reason for bankruptcy these days is medical bills.

allenwoodhaven said...

It is an insane system. My clients, not to mention my non clients, have seen costs go so high it's ridiculous. Getting pre approval takes away time from patients for doctors and it's often denied anyway. It seems to me that the middle man has to be removed from the equation. The same medications cost far less in other countries from what I understand.

Gorilla Bananas said...

What do you think of Canada's health system? The people seem quite happy with it and they're not so different from Americans, are they?