Bureaucratic Managers

The average American citizen is utterly unaware of the multiple levels of bureaucratic managers and their respective underling work force that siphon off the dollars that he, she or their employer spend on health care. Even if one happens to be fortunate enough to work for a company that pays the premium, at the end of the day, every worker eventually shells out because the healthcare dollars spent by industry are monies that could otherwise have gone toward the take-home income of the employees; whether they are salaried or hourly wage earners.

There used to be an assumed, unspoken patient/doctor contract in force whenever we had to seek medical care by making a visit to a physician’s office. There were few, if any complaints about the $7.00 office fee that I charged back in 1967. But when the so-called Health Maintenance Organizations (MCO) took over the healthcare system, the patient and his or her doctor were suddenly out of the loop. The MCO negotiators met with the business executives and their employee’s union representatives and the healthcare contract was settled to the satisfaction of the union, the employer and the MCO. The patient and the physician had no voice in the matter what-so-ever and furthermore the patient’s personal physician may not have even been included in the HMO’s panel of “primary caregivers,” as we ultimately were called. The patient was thus forced to seek medical care elsewhere, attended by some unfamiliar physician who did not know them as well as their personal doctor had.

A large survey of companies, performed in September of 2007, indicated that that the average healthcare plan for a family of four costs an employer $12,100, with payment almost evenly divided between the employer and employee. The price tag of an insurance plan for a single employee was $4,400. Average premiums increased 7.2% for all plans in 2007. That was at a time when the median, net income of physicians was dropping due to the increasing costs of practice without a subsequent increase in reimbursement from Medicare or the HMOs. The 7.2% increase in dollars spent by the combined efforts of the employer and worker obviously went to fund the multiple layers of bureaucratic management. In fact, since the institution of the MCOs, that were allegedly put in place to stem the rising cost of medical care (which at the time had been erroneously attributed to the wasteful misappropriation of monies by those of us in the practice of medicine), the costs of medical care have risen in a logarithmic progression while the net, take home pay of physicians has steadily fallen. The cost of a medical practice continually rises due to increased malpractice fees, cost of goods and office supplies, utilities and employee salaries, while the reimbursement for physician services has been gradually pared away by both the federal government‘s Medicare plans and the MCOs.

For example, when I retired from active practice in 1998, having never been sued, my malpractice premium was $7,000 per annum; when I started practice in 1967 it was less than $300/yr. As an internist I and my fellow internists were at the bottom of the risk scale; while plastic surgeons and obstetrician/gynecologists lead the pack and paid 10 times that much in annual premiums. Now an internist pays $25,000 per year, while remaining at the bottom of the scale of risk and an obstetrician in Dade Florida paid as much as $270,000/yr in 2004. My employees expected and received an annual increase in salary and that also involved an increase in my contribution to their 401K plan which was based upon their base salary.

There has been a perpetual cost shift in the medical economic paradigm. The physicians who invested many years of their lives to learn the art and science of medicine and surgery, who do the tireless, conscientious, dedicated hands-on care in their attempts to point the health of our citizens in a positive direction, have been deprived of a portion of their income while that fraction, plus the steady increase in insurance premiums every year, go to line the pockets of the MCO administrators and their employees. As long as that trend continues, we will see the cost of medical care parallel the cost of driving our cars to receive that care. Furthermore, fewer young men and women in our nation will seek entrance to medical school and study to practice in the profession I love so dearly.

MCOs, being bureaucrats, have to find a way to justify their existence. They do that by adding rules and regulations that have little or nothing to do with the quality of care that you and I receive. If the truth be known, given the time those rules and regulations take from a physician’s work day, they may actually have the opposite effect. Physicians and hospitals have had to hire additional help to handle the paper work and address the countless regulations which have been built into the MCO and Medicare plans. When I entered into a year of internship and three years of residency in internal medicine at what was then known as the Youngstown Hospital Association, that fine institution had 1000 beds and residencies in internal medicine, surgery, family practice, pediatrics, radiology, anesthesiology and pathology. It also had a school of nursing and training for radiology technicians. We were the tenth largest, teaching, community hospital in the country. During my intern year, 1961-62, we had one chief administrator and a medical director and they shared the same secretary. The hospital ran like a clock and medical care was excellent. After two years on active duty with the USAF and during my residency in 1964 through 1967, I saw more and more administrators added to the mix and when Medicare finally impacted the hospital in 1967, with all of its rules and regulations, the three piece suits (administrative staff), records clerks, secretarial help, etc. rose in direct proportion to the increasing number of people who signed up for the federal government health program. Needless to say, when the MCOs began there was a concomitant and exponential rise in numbers of administrators and clerical help. Even the nurses, who used to spend most their time attending to the patients with tender, loving care, were required instead to spend a majority of the work shift filling out paper work. Where once we saw registered nurses assisting patients in their rooms, we eventually saw them spending more time writing in the patient’s chart while sitting at a desk. National health care will further exaggerate all of the current bureaucratic interference without improving our medical care one iota.

While I have entitled this series “Solutions to the Rising Cost of Healthcare,” being an internist I have learned to seek the cause of a problem (that’s called diagnosis) before prescribing the means to evoke its cure; I.e. the solutions. The recommendations for curing the problem will be forth coming but first we must identify the disease process that got our system to be as sick as it obviously is. Next week, we will look at that O’bama plan for nationalizing healthcare in more detail and as you will see, it is not a solution. If anything it will exacerbate the issues that caused the best medical care in the world to suffer from its debilitation in the first place.