Buyers of Medical Services

Reach Upward nails it again when he talks about Serving Medical Customers.

One of the primary rules of economics is that suppliers do their best to supply what buyers actually demand. Who are the real buyers of medical services? Not you. Unless you pay for everything yourself or have only catastrophic insurance, you are not the buyer. . . The real buyers — the real power entities in purchasing medical services —are the government (via Medicare) and insurance companies.

Since suppliers provide what buyers demand, let’s ask ourselves what the real buyers of medical services demand. Do they demand the best possible medical outcome for each patient? Nope. It’s not possible for them to do that. So they design systems that aspire to that lofty goal. These systems seek to demand proof that proper procedures are being followed and tightly control what procedures will be covered.

Of course, to administer these systems, the government and insurers spawn massive bureaucracies of paper pushers. Medical practitioners actually serve their buyers quite well, supplying the desired paperwork. They report procedures that will bring payment. . .

Electronic Health Records (EHRs) have been touted as a way to improve the medical system. But it turns out that EHRs do not improve actual medical outcomes. This is because they are only a more efficient way of pushing paper around through the bureaucracy.

Every time I read anything about our health care system I come to the same conclusion – the best kind of insurance we could have would be catastrophic insurance that has incentives built in to reward consumers who avail themselves of preventive care. With the current push in Utah to provide universal coverage we cannot emphasize this issue too much. If we want to make the system better we must attack at the actual systemic problems (the shifting of the buyer role from individuals to corporations and government entities) rather than simply trying to massage the current system to assuage some acute and visible symptoms of systemic problems (the cost of health care and insurance).

9 comments for “Buyers of Medical Services

  1. February 25, 2008 at 7:10 am

    I am currently dealing with the medical bureaucracy . My father has been in the hospital since January 08, 2008. He was moved from Miles Memorial Hospital to Maine Medical, where both hospitals anticipated that he would die. When he survived it was called a “miracle” and said that 1 in 100 would have survived. Privately he told me the story of his visit with some Indian Monks but that is another story concerning another side of healing.

    There is a long list of functions that we were told he might not recover, which he did recover, and then he was moved to St Andrews hospital for short-term rehab. From the first St Andrews had nothing to say but that he is in decline and they predicted that he would not pass his benchmark tests that would allow him to continue in short term recovery and on Medicare. He has celiac disease, which is intolerance to gluten, and his underlying symptom is starvation. While at St Andrews he made steady progress in recovering his digestive and eating functions, but apparently the benchmark tests do not measure those functions, but instead measure his physical strength, in the form of his ability to sit up and stand. On the day that he received word that Medicare was discontinued, he finally got to work with professional physical therapists who had him standing up. Prior to that he was working with nurses untrained in physical therapy.

    St Andrews wanted to move him to the long-term facility that takes only Medicaid. It also is covered by the Veteran’s Insurance for six months. St Andrews was pushing the Medicaid form at us and we had to find out about the veteran’s coverage on our own, which St Andrews should be familiar with since there are many veterans in our community. The Veterans Department would not make claims on my father’s property in the event of his death, unlike Medicaid, which also functions as a wealth redistribution service.

  2. February 25, 2008 at 7:28 am

    Wow, that’s a real case in point. Thanks for sharing.

    I wish you well with your father’s continuing recovery.

  3. Laura
    February 25, 2008 at 8:19 am

    This is really a very good insight. Too true. It seems we are shifting responsibility for far too many things to other people.

  4. February 25, 2008 at 8:44 am

    There’s nothing wrong with delegating – that’s the underlying principle in free-market economics – but each person must ultimately retain accountability for their own situation if the system is to function properly.

  5. February 28, 2008 at 1:39 am

    What I would really like to know is how to get my father out of the nursing home and into home care. We want to take care of him at home but it isn’t even part of the discussion and when I look up home care on the internet all I get are articles about nursing homes. I want to ask my father what exactly they are doing for him in the institution that we could not do at home with a little training. I saw a too breif article on the Veteran’s site about a study in which those taking care of congestive heart patients in the home work with a video system.

    One thing I know is that if he were at home then he would be able to use the services of the professional physical therapists who works with out patients. I am not impressed by what I have seen in the nursing institution. I think I can at least do as well as what he is getting there.

    Dad told me he could change his mind whenever he wants but I still know nothing about what is invovled in home care because the information is not very accessible.

  6. February 28, 2008 at 7:42 am

    Why is it not part of the discussion – are the doctors, or the insurance personnel unwilling to discuss the option? If so, I would see that as an indication of a broken system.

  7. February 28, 2008 at 9:52 am

    Are you meaning something like Hospice? If your father is at an “end of life” status according to the medical staff, then it shouldn’t be difficult to get him switched to home care.

  8. February 29, 2008 at 7:08 pm

    The Hospital did not discuss it because they had their own agenda, as far as I can see, The staff at the nursing home seems a bit better, especially after I voiced my concerns. It seemed to me that the staff had the attitude that if some one is eighty six years old they are supposed to be dead or dying. I don’t think so. On my father’s side of the family it is very common to live to be over 100 years, and my father has continued to recover on a daily basis since he almost died.

    After a meeting with athe staff it seems more reasonable, although their idea of how long my father might remain in that nursing home is much longer than either mine or my father’s idea. But they understand that my father wants to return home, which is good, He needs more recovery at this point.

  9. February 29, 2008 at 7:53 pm

    I think this is a perfect example of how the system is broken when the hospital can have an agenda of their own and little reason to listen to you because they cater to insurance companies and government who provide the vast majority of their money.

    I’m glad to hear that you have found some people who will listen to you.

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