Healthcare, Who Pays?

Imagine that you own a store that sells nameplates. These nameplates come engraved on plastic, tin, or gold. Your cost is $30 for the plastic, $70 for the tin and $150 for the gold in addition to an extra ten-dollars for each letter.

Now, imagine that everyone needs nameplates on their house. This isn't a choice, it is a necessity. Additionally, many people need to replace their nameplates several times a year or even more often. So far, you are doing well, you have a product that everyone needs, you are producing that product, you have well trained workers whom you are paying well, and things are great.

However, since these nameplates are a need, in fact some people consider nameplates to be a basic necessity; the government has stepped in and required that you furnish them to anyone, regardless of their ability to pay for them.

The materials that the nameplates are printed on are also not a choice, it is all dependent upon each individual's needs and you must supply the appropriate material in every case or face lawsuits, criminal charges or even loss of your company.

Now comes the fun part. The government has stepped in with two programs to help you, and them: PlateCare and PlateAid. Not everyone is eligible for these programs, but the ones that are make up a large percentage of your sales. In these programs, the government has decided that they will pay you an average of $100 per nameplate, regardless of the actual cost. Some of your patients only require plastic nameplates on plastic with names like Dee, which will only cost you $60. Great, a profit on each one of those! Unfortunately though, an increasing number of your customers are requiring tin and even gold nameplates with names like Higginbottom-Harrington. You are losing money on each one of these, but the government has decreed that you must continue to provide these people with the necessary nameplates for the price that has been set.

Nameplate insurance companies have arisen to help those who are not eligible for the government assistance to afford your nameplates. These insurance companies have made deals with you to pay for their customer's nameplates. Some use the government's example and pay a set amount for every nameplate, regardless of its actual cost. Some will pay a percentage of your charges, usually enough to make a small profit per nameplate. The catch is that several of them require advanced paperwork that you must submit to them before they will cover the charges; all of them require vast amounts of paperwork to fully justify each and every charge. Missing any parts of this paperwork can lead to a rejection of all or part of their payments to you.

Finally, there are many who have neither government assistance nor insurance. Regardless, you must still supply them with the appropriate nameplate whether it is plastic or gold. You bill them of course, but only about ten percent of them ever pay. You have no effective recourse to make them pay, additionally, if they need new nameplates in the future, you will have to continue to issue them without regard to their bill with you.

If that isn't enough, you are also open to lawsuits. Sometimes the name is misspelled, sometimes the material comes defective from your factory, and even occasionally you choose the wrong material or, worse yet, the wrong name. These errors can lead to lawsuit judgments against you in the neighborhood of millions of dollars. To help defray this chance, you pay thousands every month to protect yourself against these losses.

You must also keep your nameplate factories up to date with technology that is increasing at a rapid pace. To help avoid the lawsuits and to remain eligible to receive the government money, you must spend thousands a year to keep all of your equipment the most modern possible and keep your people trained in their appropriate use.

Congratulations, you are now the proud owner of, not a nameplate factory, but a healthcare organization. Ever wonder why healthcare is in such a crisis?

Healthcare, in this country, is a business. Businesses, almost by definition, exist to make profits. How do you make a profit in this environment? Your only real choice is to raise your prices to high levels so that the ones that actually pay any portion of your prices cover those that pay less than your cost, or pay nothing at all. We have all heard the joke about the $5 Tylenols. The joke is really on the hospital; that Tylenol, which maybe cost the hospital 20 cents (don't forget that they had to pay the salaries of the pharmacist that verified the doctor's orders to make sure it was safe for your condition, the pharmacy technician who actually filled the order and then sent it to the nurse that brought it to you. Not to mention the employee in risk management who tracks all medication orders to assure that mistakes are not being made and the finance employee who audited the charges on your account to assure that everything was correct on the bill to submit to the insurance company), of that 20 cents, some insurances will give you 10, while many insurances will not pay for the Tylenol at all, claiming that it is 'part of the service' and a very few will actually pay you a small profit on it.

If we intend to keep healthcare as a business, then we need to create an environment in which it can survive. We need to pay hospitals enough to at least cover their costs, maybe we regulate their profit margins, but they have to be able to meet costs and have some left over. We need hospitals to control their costs, to eliminate costly and unnecessary procedures, to cut paperwork and get back into the business of providing health care to people. Hospitals need to be in the position to be able to charge reasonable fees instead of having to increase their fees to cover the costs of people who don't pay. Finally, yes, we need some form of socialized medicine. We need everyone in this country to have some ability to pay, because, whether we like it or not, every time someone doesn't pay, we're paying for it anyway.