McKinsey report on US health spending; pharma

[ladelfina]

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/13/AR2007021301149.html

just a couple highlights:

While Americans spend fewer days in the hospital than people elsewhere, that efficiency is more than offset by a higher average cost per day -- $1,666, four times the industrial-country average. ... The hospitals will whine about all their free care for the uninsured. McKinsey concludes that is a relatively minor factor in an industry that has managed to rack up hefty operating profits in recent years, even at supposedly nonprofit hospitals.

Despite all that annoying drug advertising on TV, Americans pop fewer pills than people elsewhere. But, according to McKinsey, we still manage to spend $57 billion a year more for drugs than other developed countries. Some of that is because the newest and most expensive drugs are typically available here 18 months before most other places. But the much bigger reason, McKinsey found, is that drug companies are able to charge, on average, 60 to 70 percent more for branded prescription drugs.

http://www.mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp


On the "poor drug co." front.. I'll share one or two of the tricks pharma uses here to ensure profits:

1.) when you get your free or low-co-pay prescription here, it's dosed out in packages decided by the mfr. So if a doc prescribes 2 pills a day for 6 days, you still get a blister pack of, say, 30 pills. The pharmacists don't seem to handle loose pills. The gov't. subsidizes the drug companies in that it pays for the wasted medicine.

2.) There's a price stamped on each package. I believe the prices are the result of gov't. negotiations. Whether the price stamped is what the gov't. pays I don't know. If you are not signed up with the national health svc. you'd pay the price on the package; same for non-prescription drugs like aspirin and cough syrup. There's no price competition among pharmacies for these products and there are no generics at this point, though some are on the horizon, much to Bayer's chagrin. If you want aspirin right now, you get Bayer; all aspirin is Bayer, and the price is fixed.

I just wanted to be fair and point out that there's waste and bureaucracy in both systems.. both need to be combatted. I think the details are kind of interesting, but in the end I don't want to lose sight of the main issue, which is one of philosophy: one system treats health care as a luxury consumer item; the other as a basic, shared human need.

 

[TromboneAl]

In preparing for my minor surgery, there's already been a blizzard of paper work. Examples of things I've had to sign:

A four-page Notice of Privacy Practices, which includes the paragraph "You have a right to to obtain a paper copy of this Notice."

"In the event that this admission results in the delivery of a newborn, all of the consents granted apply to the newborn."

 

[Martha]

The HIPAA privacy stuff Al is referring to is mostly a bunch of useless BS that just creates more work for everyone.

 

[mykidslovedogs]

The HIPAA privacy stuff Al is referring to is mostly a bunch of useless BS that just creates more work for everyone.

I actually agree with you on that one...it's the anti-customer service, administrative nightmare, useless waste of time law! Who in the heck's bright idea was HIPPA privacy anyways? Someone must of sued someone for divulging some private information which spurred on the new laws.

 

[Martha]

It was politics gone wild. But it did get us the portability provisions of HIPAA.

 

[lets-retire]

I used to hate the HIPPA laws when they were quoted to mean hospital employees couldn't divulge any patient information, to include who's in the hospital, to me as law enforcement. It makes it very difficult to discover whether the John Doe in the ICU, ho just got his clock clean by a very large angry person, is the daddy of the distraught young lady looking for family and not thinking straight.


I know this was a misinterpretation of the law, but it still occurred very frequently.

 

[mykidslovedogs]

Let me give you A COUPLE examples of HIPAA privacy problems I run into daily:

1.) My client receives a letter from the insurance carrier stating that they are investigating a hernia surgery that her son needs to have in two weeks. All I want to know is if they received the medical records proving that the hernia occurred AFTER the child obtained coverage and there was no knowledge of this before. The service rep on the other line says that she can't tell me whether or not the medical records have been received yet, because telling me would violate HIPAA privacy laws. She then goes on to tell me the the customer must sign a form authorizing me to call on her behalf to ask these kinds of questions. However, the form cannot be emailed or faxed in - that would violate HIPAA privacy. Rather, the form must be MAILED to the client, signed and then MAILED back to the carrier. It will take upto 30 days to process the form once it is received. This is a COPOUT. I am absolutely sick and tired of service reps telling me they can't give me even the most non-private information because of HIPAA privacy. It takes me about an hour to talk the rep into letting me fax her the letter so I can get my simple question answered. Everything works out in the end, but it takes three times as long as it should have because of mis-interpretation of HIPAA privacy!

2.) I call an insurance carrier to find out why my client's bill is showing up late when it has been paid. I don't have my client's birthdate on hand, but I have all of their plan information, subscriber number, address, etc...I am told the question cannot be answered unless I can give them the client's birthday...without that information, it's a HIPAA violation to give out billing information! GIVE ME A BREAK!

This is the kind of stuff that absolutely drives me nuts.....not that I am a conspiracy theorist or anything, but it wouldn't surprise me one bit if the legislation wasn't passed to purposefully add billions of dollars to insurance administration, just so that the gov't could come back later on and say, "see, we need socialized care because admin. costs are running amuck!".

 

[Martha]

A large part of the HIPAA privacy law problems has been suppliers not understanding its terms. The faxed forms for example. I don't believe anything prohibits the faxing of forms. Lets Retire has another common example, where hospitals misunderstood requirements about releasing names of patients. Anyway, the benefits of the privacy rules seem minimal and the problems created and costs involved have been extensive. My old office had a number of staff people working on HIPAA matters for medical providers for a very long time.

 

[magellan_nh]

Re: HIPAA

This sounds exactly like what I saw with Sarbanes-Oxley when I was in corporate life. The intent of the law was reasonable. Usually, even the actual requirements were pretty reasonable.

The real problem was the consultants we hired to help us assure compliance. They were bent on interpreting everything in the most complicated and onerous way. It was a great way to increase their fee, but IMHO it made things more expensive than was needed.

Then, next thing you know, everyone's trashing the law (Sar-Box or HIPAA) as a giant waste of money and people want to throw the baby out with the bath water.

 

[ziggy29]

This sounds exactly like what I saw with Sarbanes-Oxley when I was in corporate life. The intent of the law was reasonable. Usually, even the actual requirements were pretty reasonable.

Exactly. My Megacorp's IT department does this to the extreme. Even things which aren't remotely related to financials are "blacked out" from changes for several weeks each quarter, citing SOX as the reason. Any deviations need VP level approval, so it's rarely tried.

 

[FinallyRetired]

"In the event that this admission results in the delivery of a newborn, all of the consents granted apply to the newborn."

Dude, better make sure they don't wheel you into the delivery room.

 

[cute fuzzy bunny]

Maybe that isnt a hernia...

 

[farmerEd]

Privacy is a joke...I was in the hospital surgical wing 10 days ago, visiting a relative, and two different tours groups of people come parading thru the place like it was Disneyland, with people(patients) half-dressed, and on display for all too see...first group was a bunch of suits, no idea who they were but the clearly didn't work for the hospital, and then about 15 minutes later a group of about 30 high-school age kids coming walking thru the place getting a tour of the facilities from a nurse...very unprofessional IMO (especially since I was told the same wing we were in is where, among other things, women terminating pregnancies etc would be if they were going on)...talk about a lack of privacy...I was appalled. What numskull would think it would be appropriate to parade a group of kids thru an active surgical recovery area for a "tour"....privacy indeed...

 

[ladelfina]

On the flip side of that, I just read this article, with a lot of insane HIPAA-related stories, like a woman driving from OK to FL to check on her mom, because the hospital would not give any info over the phone.

Keeping Patients’ Details Private, Even From Kin - New York Times