Wednesday, October 22, 2014

The Medical Mafia

"Are there really that many men who worry they won't be ready when the moment is right? "

Whenever we're exposed to broadcast television in the United States we are always amazed at how much of it has been paid for – how much of its time has been purchased – by medical-related corporations. If you turn on the evening news, for instance (and back when we were children that was actually how people became informed of world events, astonishingly enough), the advertising is overwhelming dominated by three sectors: cars, phones, and drugs. By and large, advertising is the principal means by which United States culture instills values in its children.

Other than billion-dollar bribes paid to the best elected officials money can buy, is there some compelling reason why drug advertising is not illegal? Are erections lasting longer than 4 hours really so common that we have to be warned about them 80 times every day? Are there really that many men who worry they won't be ready when the moment is right? Pfizer apparently thinks it is worth spending $1.2 billion per year advertising Celebrex to protect its consumers from such horrific conditions.  In contrast, NASA's total cost for the Apollo program that put a man on the Moon was $22.9 billion between 1962 to 1972.

Apart from the Pentagon or NSA budgets, what else do you know that costs as much as pharmaceutical advertising? Big Pharma spent 15 billion on direct mail promotions in 2012, all that junk mail that went directly to your trash without even being opened.  For contrast, the amount the US will spend on school nutrition programs in FY 2014 is 14.8 billion.

If you were a drug company, which do you think would be more important, money for research into new and better therapies for disease or advertising drugs? Given that most drugs being advertised are available only by prescription, the target audience must be doctors, who we must presume should prescribe on the basis of efficacy and safety, not ad hype. Nonetheless, Merck spends 27% of its revenue on advertising and 17.3% on research and development. Pfizer's ratio is even more lopsided, with 33% on advertising and 14.2% on R&D. 

We are (sort of) proud to say that once we came of Medicare age, we now have medical insurance for the first time in our life. Of course the medical safety net in Tennessee, or the USA generally, is not remotely close to say, that of Mexico, Andorra, Cuba, Singapore or Costa Rica.

Take Iceland, for example. Every citizen gets complete, state of the art health care regardless of their contribution to the system. There is no private sector.

In terms of life expectancy, and most other outcomes, the U.S. and European/Asian systems perform about equally well. But the U.S. spends a much larger portion of its GDP to achieve this performance, getting similar results for 1.5 or 2 times the price. The difference could be explained, and often is, by arguing that the US spends more on innovation than other countries, but as we've seen, that is not true. The US spends more on advertising, and on gaming government spending. The real difference that accounts for the greater cost, we would argue, is the criminal element in the system.

According to a report in The New York Times:

The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.
The line at top is the USA; below are all other countries
Mark T. Bertolini, the chief executive of Aetna, earned over $36 million in 2012. Ronald J. Del Mauro, a former president of Barnabas Health, a midsize health system in New Jersey, took home $21.7 million that year.

The World Health Organization declines to rank countries in their World Health Report 2010, but a report from the Commonwealth Fund ranked seven developed countries on their health care performance and the US came dead last. Maybe if it used its annual $2.7 trillion in health care expenditures for something other than television advertising of fertility enhancements, the US might be doing better when Ebola patients appear in a Texas ER than to kick them out for lack of insurance.

In June, sporting a shiny new plastic card giving us some limited access to the paywall-protected system, we showed up at the office of our assigned primary care physician for our first annual physical. We were handed a clipboard with about 3 pages of questions concerning our medical history, prescriptions and any symptoms of disease, which we dutifully filled out and returned. After about an hour's wait, we were weighed, had our blood pressure and temperature taken, and were shown into a small examining room, where we waited another 20 minutes before a Physican's Assistant came to review our questionnaire with us. The process took about 5 minutes, after which we were shown out and done for the year. We had a clean bill of health.

A few months passed and we started receiving bills. It seemed odd to us, because the annual exam is supposed to be free for people of our age, but they were only asking $10 for the "outpatient visit." We declined to pay on principle, knowing our rights, so the dunning notices have now become a regular feature of our mail and are becoming more strident. Some of the bills provided greater detail, so we dug down into the fine print.  

The doctor's office charged our (now federally-required) insurer $318.00 for the 5 minute exam with the Physician's Assistant. The Social Security Administration picked up $157.65 for that because apparently that is what they honestly consider to be the market value of a 5-minute review (!). Apparently the insurance companies have a special relationship with SSA because subsequently they got an "Adjustment" adding another $160.35 write-down from the government. This made the doctor's office whole without costing the insurance company anything apart from the time spent on paperwork and trying to collect our $10 co-pay, a futile effort.

We should note here that SSA deducts $100 per month from our social security check – money withheld from paychecks during our working career – or $1200 per year. They use this $1200 that we are forced to pay them every year to pay the $318 demanded by the doctor's office for our 5-minute annual checkup (actually $157.65), pocketing the remaining $1042.35 that we might otherwise have spent on canned cat food to have enough to eat. This is apart from the annual premiums we are required to pay to a private insurance company under Obamacare.

Our insurance company continues to cut down trees to send us dunning letters demanding $10 for what is supposed to be a free exam and we continue to ignore them. Next June we will spend another 5 minutes with a Physician's Assistant who will once more go over our answers to the questionnaire and charge $318 for her time, or perhaps 15% more, depending on the going rate of inflation in the industry. 

Although her office is billing her time out at $6360 per hour, she is probably making around $20,000 - 30,000 per year, or $10-15 per hour. But the job comes with a good insurance plan.

We use "industry" guardedly. What we are really talking about here is a grossly incompetent criminal syndicate, legally sanctioned. It might be laughable if it weren't killing so many innocent people every year.

1 comment:

Eddie Tennison said...

I've been an independent health care provider for nearly thirty years, and I've watched the insurance companies and big pharma take an ever increasing share of the healthcare dollar, while both patients and doctors have slowly been nickeled and dimed to death.

I dream of an insurance-free cash practice that provides a decent service for a fair fee, and I hope I live long enough to see that happen. Unfortunately, it appears that only a complete collapse of our present complex society is likely to lead in that direction.




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