Medical Robbery

A sad story came on the radio last night about a couple who fell on hard times during the Recession. With the family income down, they decided to drop their health insurance. With precision bad timing, the wife started developing debilitating headaches. Persisting for some time, her husband convinced her to get them checked out in order to rule out anything really serious. So she underwent a series of diagnostic tests at a hospital. They ruled out anything other than migraines and was billed some $20,000 for services rendered. That's $20,000 they didn't have.

The crux of the story is that creditors can now garnish wages for all sorts of reasons. What used to be a means of collection restricted to child support, fines, and the like, can now be employed for consumer debt. So the collectors for the hospital began to garnish the lady's wages. For someone already having trouble make ends meet, this was a rude surprise. Presumably at the rate of a few hundred dollars a month, these garnishments will continue for years: America's broken healthcare market is breaking individuals.

The story made me wonder if collectors are preparing garnishment of my own wages for my son's emergency room bills. They have been eerily quiet, with no response to my protest over the level of charges. Maybe their greetings are going to show up in my paycheck.

Medical Robbery

Previous posts have described the pernicious effects of having no transparency in medical pricing: no one knows what a procedure or service is going to cost. The patient is at the mercy of the billing clerk. Comparison shopping becomes impossible. Price gouging can hide behind a curtain.

A few states have made faint efforts to correct this situation. Some have passed laws requiring the creation of a public website where consumers can consult the prices for different services. However, follow-up and implementation has been pathetic. An organization called the Healthcare Incentives Improvement Institute has done a methodical comparison of efforts at transparency by different states. Following an explicit methodology, it gives each state a grade on transparency. The results in this year's report gives an A to no state, a B to only Maine and Massachusetts, a C to Colorado, Vermont, and Virginia, and an F to every other state! New Hampshire had the distinction of going from an A last year to an F this year because the website it developed to report medical pricing mysteriously ceased to function.

True healthcare reform will have occurred in this country when no state gets anything below a C. Until that happens all we can do is funnel more money from other purposes toward healthcare and fight over who will get how much of that money. But those other purposes, the other items in both personal and government budgets, cannot keep feeding the medical beast forever. The data in the last posting should convince us of that. The data in this posting should convince us our representatives are not taking the problem seriously (yet).

Medical Robbery


It's been quite a while since I've posted anything here, travel and other writing keeping me busy elsewhere. Also, there is nothing to report in my battle over my son's emergency room billing. The providers have been eerily quiet; I keep waiting for the other shoe to drop, perhaps with a mean-sounding demand from a collection agency. Or maybe they're already busy trying to notch down my credit score. For indeed protesting against the cost of a healthcare service can end up in higher costs in other areas such as getting a loan.

Today I wanted to touch on the future, distant to me but perhaps not to younger readers. The Congressional Budget Office (CBO) is a non-partisan research arm of Congress whose job is, among other things, to provide forecasts of government spending assuming no changes in current law. A study released by them earlier this year forecast the future role of healthcare in total government spending. As a basis, they report that for the period 1974-2013 healthcare was on average about 25% of all other government spending besides Social Security. However, under current law by 2038 healthcare will be 113% of all other government spending beyond Social Security. That is, healthcare will cost more than national defense, infrastructure, justice, diplomacy, and every other activity of government combined! This vast and impossible increase is due to a combination of factors such as the aging of the population, but fully 40% of the total increase can be blamed on the rising costs for services.

So rising medical costs not only threaten our individual budgets but that of the nation as a whole.  We can venture to say that these rising costs can come to threat even our own national security. Therefore we know that healthcare is never going to get to a point that it will swallow more spending that the rest of government combined. The only question is whether the current generation with the reins of power will do something about the problem. If it doesn't the generation that follows will have no choice but to address it, albeit at a much larger cost to the nation. The first option is one of the motivators for writing this blog.