The Sunday News carries a lead article “LGH surplus slips” today. NewsLanc has waited for them to report on LGH’s recently released Federal 990 Report covering the period July 1, 2009 through June 30, 2010. We will crunch the numbers and provide our own report, hopefully within the next couple of weeks.
The American health care system creates a running battle among physicians, hospitals, insurance companies and patients, generating at least twenty percent in additional administration costs and producing among the worst health care outcomes in the developed world.
From the point of view of most hospitals, Lancasster General being one of them, the more paying patients in beds, the more profitable for the hospital and the physician practices which it owns. Note “paying patients”, those insured and to a lesser extent Medicare patients. Those under Medicaid are not desired since bloated overhead and salaries make it uneconomical to treat them. The hospitals constantly struggle with insurance companies for payments and with doctors to minimize fees paid them for procedures conducted in the hospital. Preventive care is about as important to a standalone hospital as developing electric powered vehicles are to an oil company. (Hence LGH’s disinterest in funding a syringe exchange in Lancaster.)
From the point of view of the insurance companies, the less care, the better. They make their money through maximizing premiums and minimizing expenses. They want to review every charge with a jaundiced eye and the more paper work and hassle they can throw at the hospitals and doctors, the better to discourage invoicing. Although as an entire insurance industry they would benefit from reducing hospital and physician administrative costs, this is not an inducement in most circumstances for individual insurers. They would be interested in preventive care but have little, if any, influence over the physicians and hospitals to bring this about.
Physicians have to bear the costly and demoralizing costs and constraints of insurance company requirements for their reimbursements. There are as many persons working in financial record keeping as caregivers in medical practices. Doctors are expected to interview, diagnose and prescribe treatment for a patient in about ten minutes. The results are heavy reliance on lab tests (which often profit the hospitals), often solely to remove any chance of malpractice suits.
The patient and his or her employer pay astronomical fees today for far less coverage than was available five years ago. Much of this is due to our ‘fee for service’ approach rather than an approach that rewards successful outcomes.
About 52% of Americans are covered by far more efficient government sponsored health care provided through Medicare, the Veterans Administration or other programs. The administrative cost of Medicare is about a tenth of the cost in the private sector. These savings along would enable 1% of the Gross National Income to be redirected to investment in the future. There single payer system would like save 5% of the Gross National Income and enable the revitalization of our country and provide a bright future for future generations.
However, universal health care at this point in time is not feasible. It will take perhaps another five years for the population and businesses to be bled so dry that there will be a political uprising against our current system where some make millions (even a billion) while so many go untreated.
But there is another approach that has merit, an approach pioneered by Kaiser, the Mayo Clinic and especially Geisinger Health System. (These are models for Obama Care which, tragically, had to be so compromised to placate special interests – including insurance companies – as to hold little promise without curative legislation that will not take place short of a Democrat landslide in 2012.
That is where an insurance company owns the hospital and also many of the medical practices. Suddenly the economic interests among all four participants – hospital, physicians, patients and insurance company – are better aligned. The insurance company makes its money by encouraging preventive care, the avoidance of illness. Its goal is to keep customers well so they do not require hospital stays and expensive procedures. They require ‘Best Practices’ to avoid botched treatments and malpractice suits, they arrange for outreach programs to assist the aged and to follow up with those with health problems, and they encourage better diets and routine exercise.
The best thing that could happen to Lancaster would be for Lancaster General Health to be acquired or merge with the Geisinger System. Insurance coverage cost would drop and our health and future prospects would much improve.
