The Bush administration is trying to save the government costs in its health care expenditures. To me is seems like a mild system that will allow probably the largest group of health care recipients in the country to be charged 20% more than other patients without being penalized. But the industry is assailing this mild proposal on several fronts.

Are any of these points valid, or is advocacy running amok once again.

U.S. to get tough if Medicare drugs cost more

Here is the government proposal



Here are some industry counter points.

Valid objection?

Well if you charge an average of a dollar for a service and you charge medicare patients $1.25 you are overcharging. How hard is it to run a computer program to adjust down costs for medicare to stay at the level of your lowest private insurers. It only seems difficult to me if you are trying to find the right level of overcharging the government to extract every last available penny out of the government.

True?

Fair objection?

Yet another voice of the industry heard from. Fair complaint?

Every voice in the field seems to be against this, I think it means the Bush administration (Tommy Thompson in this case) has stumbled upon something good here.

This policy appeals to my socialist feeling about health care and it appeals to my sense of fiscal responsibility. I was worried about the recent Medicare Drug Supplement because it forbade the government to negotiate like and HMO.

But this would force the industry to give the same deals to the 75 millions Medicare and Medicaid beneficiaries or risk losing the entire group.

How much easier it would be if we simply could have a flat rate assigned to all health care recipients.

(Additional snippets from my hometown newspaper's version of this article (The Tennessean) include

Good point?
To me the answer can only be yes if these programs exist to subsidize the medical industry instead of providing as many health services to the poor, elderly, and dependent segments of our population as possible.

Ah, finally the voice of reason. (IMHO)

Are my points leftist nonsense or are the industry objections to this proposal attempts to gorge at the government trough?

Keep in mind, that you can substitute the word 'you' for 'the government' in these cases (after all, it's our tax money that's being spent). In which case I'm all for being charged less....

This is interesting news to me. I think we're discovering a large part of the problem. I can't believe the system is so screwy the hospitals have no earthly idea of the average cost of a service/laboratory test/ or drug they provide! That is beyond ridiculous.

If I go to Walmart, and the price of an item is a dollar, and then to another store and the price of the very same item is double, I will buy that product at Walmart. That sort of bargain shopping is virtually impossible when it comes to finding a reasonably priced hospital or medicine. I believe private insurance companies keep those costs in line by refusing to pay excessive charges. Apparently, the average hospital has been milking the government cashcow for years charging excessively. I wouldn't be surprised if this does end up raising insurance rates to compensate for the costs they can no longer zap the government. Insurance costs are already through the roof, so I don't know the answer to that one....it certainly isn't to allow the siphon to continue, though.

Bush's plan sounds good to me. I'm curious what VictoriaSilverwolf thinks, since she has worked as a pharmacist in hospitals for years. Perhaps an inside perspective is needed, because the 'leave no child behind' plan sounded good to me until I listened to more informed opinions on the issue. There must be something I'm missing.

Thanks for the vote of confidence, but I am no expert on the economics of health care. I can, however, vouch for the fact that the pricing of medications is insanely complicated. You might think that it should be easy enough. The hospital pays X for a drug from the wholesaler, the patient gets charged X + Y%. It doesn't work like that at all. The cost of the drug from the wholesaler can vary enormously, depending on special offers and rebates and contracts with the wholesaler, on what "buying group" the hospital belongs to, and so on. We're not talking pennies here, either. For example, a bottle of twenty Zyvox 600 mg tablets -- a drug used to treat infections resistant to other antibiotics -- costs the hospital more than one thousand dollars. You read that right; the wholesale price is more than fifty bucks per tablet. Or consider the problem of drug shortages. There used to be a whole bunch of brands of extended-release guaifenesin 600 mg tablets, a drug which is used a lot for respiratory diseases. Now there is exactly one brand available. Don't expect this to decrease the price at all. I'm glad I don't work in retail pharmacy, because they have to spend a huge amount of time haggling with insurance companies over pricing.

That said, I think the Bush plan or a similar one is a good goal, but it has to be realized that determination of pricing really is very difficult. Expect this to take time, effort and more money. Dropping health care providers from the Medicare and Medicaid programs is a pretty harsh punishment; without those funds, many facilities will simply cease to exist.

Health care is getting more complex and more expensive, and more people need the care than even before. There are no easy answers.

On the surface, this plan sounds good. The details involved in getting it into motion I can't even begin to imagine the pros and cons.

For years, there has been abuse in medical claims (duplicate billings, billings for drugs and services never administered or performed, doctors filing medical claims for services rendered to bogus patients or to patients agreeing to a kickback if the doctors can use their names, etc.). Although these instances are in the minority rather than the majority, it still amounts to millions of dollars that run up the costs of medical insurance out of greed and fraud.

And it is no secret that companies billing the government for products or services rendered have always charged an obscene amount just because it was the government paying the bill.

So, although the above two situations really have nothing to do with the topic, maybe the Bush administration has hit upon a preventative measure that just may nip some abuses in the bud.

This is a topic that I am almost postive we will certainly hear more about for some time to come.

Am I the only one here who thinks this plan is ridiculous? Why are more laws needed? Isn't FRAUD already illegal?

This appears to be another attempt by politicians to make more laws for the mere sake of appearances. They can all be proud of themselves when they go back home and tell their constituents they 'did something.'

The problem does NOT arise from a lack of legislation. The problem is with the enforcement. We need to focus on WHY hospitals may be 'overcharging.' When there is evidence it is happening, fines should be levied and prison terms given to the worst perpetrators. To cut hospitals off is ridiculous. Hospitals have a duty to help anyone who comes in. Potential patients should not be harmed because the government and the hospital had a money dispute.

Let's also not forget the fact that the feds are notorious for underpaying services. Hospitals can't turn around and sue Medicare. I have links showing how Medicare routinely pays 70-90 cents on the dollar for services instead of the actual cost; I left them on my computer at work and will post them tomorrow. Sorry

I think the reason the healthcare system is so confusing is because we have regulated it to disfunctionality. I'm not saying we trash our laws. I would simply suggest we clean up what we already have on the books before we start anything new.

No I do not think you are the only one who thinks this. I back Bush on a lot of things but I would not back something that will cost more to investigate and enforce than the gouging in the first place.

Enforcement of current laws will be a lot more effective than adding to the mess by creating new laws that cannot or will not be enforced. I think you are right, this is just a way for politicians to say, “Hey we did something” and makes everybody but the clearheaded feel better.

My wife is a nurse in the Denver area and has to deal with the government paperwork that as she says “is more complicated than filling out your taxes and just as asinine” it is my understanding that I get better deals on healthcare by using one insurance program over another, why would Medicare be any different, especially if they are known to underpay and make the private sector jump through hoops to get paid at all, I know I would charge more if it were me.

My take on this is that Tommy Thompson is attempting to define overcharging or fraud in the case of prices charged to the government. This is not passing a new law and it is setting standards for how to police the prices charged to the government.

Comparing what the government gets charged with with those companies' other customers seems to be a valid way to find out if the government is being cheated or not.

For me even though they (the hospital) shouldnt overcharge that dosent give the government right to "punish" the hospitals extensivley. Im ok with fines of up to one million dollars US ($1,000,000 US) for "Misusing the taxpayers dollars in hopes to get more money". However the Government should raise taxes. If the hospitaal gets 1 million dollars ($1,000,000US) then the hospital should be required to pay at least 10% of their annual revenue.

So in short if the hospital overcharges at least a portion of that money goes to the Gov't.

As Jaime said, "There are already enough laws on the books, why not just enforce them?" Here's my thought...maybe this theory of "fines for overcharging" will cut down on percentage of abuses up front and thus cut down on the cases tied up in litigation to resolve.

We know we are losing good doctors because they are going broke with the rising cost of malpractice insurance and not receiving monies owed them due to payment disputes by insurance carriers, etc.

Don't know or understand enough about this issue to really make a decision whether it is a good idea or not.

I sincerely apologize for not responding to this debate sooner. I've searched for my links and seem to have lost them (typical )

Anyway, I've done a bit more homework. Based upon what I've found, I've not changed my mind that this proposal is NOT sound legislation and merely politics and back-patting.

If Sec. Thompson is so concerned about defining fraud, perhaps he out to check his own website. There is this handy-dandy little map there. You can click on the pretty states and it will take you to a directory of that state's Medicaid statutes. Funny thing is - of all the states I clicked (ok, so I didn't click ALL of them ) - 100% had a section on fraud. How about that? Looks like Sec. Thompson can save himself some time.

This is really starting to appear to be a state issue. Sure, the feds take in tax dollars and distribute it to the states, but that is where it should end for the federal government. From there, I suggest it be left up to the states to define and prosecute fraud as necessary. No need to create another level of prosecutorial beaurocracy.

An interesting follow up to my assertion that the government doesn't pay out as it should - looks like Georgia's Medicaid program may go bankrupt by May if we don't make some serious changes. GA Medicaid Bailout . I wonder how the hospitals are to be paid for services rendered to Medicaid patients if there is no money there?