As medical costs climb, it’s not just drip, drip waste, look at hospital bloat, too

eyedropWhether it happens in the drip, drip, drip of costly eye drops or it occurs in the flash of a pricey imaging scan, patients get gouged by modern medicine’s wasteful practices. The inefficiencies can be traced to many and different causes. But Americans need to keep asking whether they can allow or tolerate profit-seeking enterprises to keep getting bigger and ever more expensive.

It’s good to see that two online news organizations, Vox and Pro Publica, are digging into soaring costs for medical goods and services.

Vox is aiming to crowd-source some of its investigation, and it has tantalized its audience with a motivating source of outrage—a story detailing a sky-high bill for a 30-minute imaging scan for Elodie Fowler, an ailing 3-year-old girl. The site says her parents got socked with a $25,000 tab for her test. That sum was far higher than they expected, even after they researched and shopped around to find their most affordable option, given their insurance and various providers operating the service.

They eventually negotiated this medical debt to $16,000. But, given that their girl already racks up other big bills for her care for her rare genetic disorder, the family’s $700-a-month installment payments just for the MRI has strapped their budget. And they rightly are asking why this imaging work had such an astronomic charge, given that they had thought it might more appropriately be a few thousand dollars?

Costly liquids

More on this is a second. But first, let’s also look at the latest installment in the series of probes by the Pulitzer Prize-winning Pro Publica site into extreme medical costs. The new article scrutinizes a seemingly small and inconsequential kind of medical product whose overall expense bubbles up into a torrent of expense: eye drops and other liquid medications.

Pro Publica says Big Pharma “brought in about $3.4 billion in the U.S. alone on drops for dry eyes and glaucoma drops.” Drug makers boosted their revenues on profits on these medications, big time, by packaging their products in ways that guaranteed waste. It’s no accident that patients mop a lot of their eye drops off their cheeks, and end up with unused quantities of them.

Big Pharma knows how to deliver a smaller drop with a dispenser that can be more effective and less wasteful—and no more expensive. Drug makers know, too, that they could put less medication in a package because it far exceeds what a patient will use.

But, as with super high-priced liquid cancer drugs, Big Pharma declines to be efficient.  Clinicians and insurers don’t force them to change—and patients, ultimately, end up paying for the medical spillage. They watch their money dribble away because they end up paying for the waste. This can matter a lot with glaucoma medications running almost $300 a pop. With cancer drugs, such patient-unfriendly, single-vial packaging may cost consumers almost $2 billion annually, Pro Publica says, citing published medical journal studies on this topic.

In my practice, I see not only the significant harms that patients can suffer while seeking medical services but also their heart-breaking struggles to afford medical care. The health care sector now comprises 17.8 percent of GDP, and we spend $3 trillion annually on it. The costs continue to rise, even as our political leaders find themselves trapped like mastodons in a tar pit in their unending battles over health insurance, which is just one element of the system, albeit a crucial one.

Medicine has become such a big, profitable, and complex business that, it is true, it’s tough for anyone to wrap their heads and arms around it. But by tackling even seemingly small items—across the board—patients could see some real boons, savings running in the billions of dollars, as Pro Publica has pointed out:

Pro Publica has been documenting the many ways health care dollars are being wasted. We’ve shown how hospitals throw out brand new supplies, nursing homes flush tons of unexpired medication and drug companies concoct costly combinations of cheap medication. Recently we described how arbitrary drug expiration dates cause us to toss safe and potent medicine.

This digging is excellent, as is Vox’s announced intention to scrutinize all the ticky-tack, garbage-y fees that hospitals add on to their bills, including facility and inexplicable equipment and restock charges.

Dig deeper

Here’s hoping that health news reporters, policy-makers, and law makers go much further. We need to ask why elephantine, bottom-line medical institutions like hospitals should be allowed to grow more and to sink their tentacles into other enterprises for their gain, not necessarily to improve them nor to see them operate more efficiently and at lower cost.

With imaging costs, for example, isn’t it time we stop major hospitals’ mindless warring among themselves, halting their efforts to burnish their reputations and improve their bottom lines by spending huge sums for the shiniest new medical equipment, even if another institution a few miles away has all the same toys?

Hospitals have shown such avarice, notably with imaging services, that entrepreneurial doctors have tried to one-up them by opening competing, stand-alone centers. These don’t always have the Super Duper Hyper Megatronic machines seen at major academic medical centers. But they handle many of the more routine procedures at lower costs, siphoning off major revenues from fancy hospitals high on the hill.

Insurers also have started to call bull on the unchecked imaging costs. Anthem has declared it won’t cover hospitals’ imaging services when they’re delivered on an out-patient basis. That may lead to some pricing battles, doctor discomfort—and it certainly leaves patients with unwanted and unfair dilemmas, trying to figure differences between various imagining services offered and whether they’re cost justified.

Hospitals, of course, haven’t taken a lesson from their forays into pricey imaging expenditures. Instead, many are adapting a strategy not of being lean and more efficient but rather just to get even bigger and to seek higher profits.

Can elephants dance?

With visions of millions of Medicaid dollars dancing in their dreams, some hospital administrators are racing to buy up nursing homes. Hospitals in Indiana, for example, have exploited a loophole in federal law that boosts the Medicaid reimbursement for each nursing home resident if the facility is owned by a hospital. The hospitals, in turn, split the higher sums with the homes—though they do not necessarily improve the quality of care at the facilities, which was why this option was created.

Meantime, other hospitals also are sinking money into free-standing centers for urgent and emergency care, and those offering certain types of surgeries, notably those performing increasingly common and profitable knee and hip replacements, the Wall Street Journal has reported. Hospitals say they must do this because their traffic is down, as is their revenue and profits. And they’re following patients—many with higher deductible insurance and thus greater out of pocket costs—as they live farther away and demand cheaper, quicker, and more efficient care.

It may not seem like a natural business for them to branch out to but some hospitals also are getting into public housing. In spots like Sacramento, Calif., Orlando, Fla., and Portland, Oregon, hospitals are responding to the whopping emergency room bills that homeless and indigent patients can run up by trying to provide a holistic level of care that may include finding these high-cost “frequent flyer” patients affordable housing.

Under the law, hospitals cannot refuse care to patients in need of emergency services. But some poor, needy, and chronically ill and mentally ill patients can turn up with such frequency—even if just intoxicated and needing a warm place to stay off the streets—that they can dent hospitals’ budgets with their ER demands.

Hospitals point to increasing amounts of published research that shows that getting their ER frequent flyers off the streets and into steady, safe, clean, and affordable housing can be a major step in improving their health and eliminating their excessive medical care needs. The institutions, which are sinking tens of millions into affordable housing, insist they aren’t the cure for the nation’s crisis in this area.

It’s also critical to note that not only can they significantly improve their profitability, they also may reap big tax benefits with their housing altruism.


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