I’ve long wondered how US healthcare pays its bills? Sure they charge enormous amounts for everything, and Americans through workplace provided insurance pay the highest prices for their insurance. But, at least most places I’ve lived, and here in Colorado seems no different, the over provision of facilities is legend.
Within 10-miles of my home there are four major hospitals with ER departments, two stand-alone ER buildings, five Urgent Care offices(at least) and then hundreds of Doctor and other treatment offices. That capacity has to get paid for somehow, either higher prices, or subsidies.
Based on this FT(aka Financial Times) article, CV-19 is creating chaos among the hospitals and healthcare providers. [FT Paywall link] / [non-Paywall link]
As coronavirus has swept across the US, it has also ravaged the country’s healthcare system. Even with money from a $175bn bailout, many hospitals are facing critical cash shortages, because they have had to cancel the elective procedures that they rely on to make money.
How coronavirus broke America’s healthcare system – Hook, Kuchler – ft.com
The US spends $3.6 trillion a year on healthcare, which is some 17% of its Gross Domestic Product (GDP). One aspect of the US healthcare business that is likely to make things worse, much worse is that so much insurance is tied to people’s jobs. In the current climate they are losing them at unsustainable rates. Lost job (often) means Lost Medical Insurance. Even if Medicaid does pick up a lot of the slack, that won’t cover the lost revenue to the hospitals.
The high number of uninsured people in the US compounds the challenges of responding to coronavirus. At least 27 million Americans lack any health insurance, and that figure is set to rise as millions more lose their jobs. Without insurance, patients risk getting saddled with high bills from emergency room visits that they cannot pay, forcing bad debt on to the hospitals.
How coronavirus broke America’s healthcare system – Hook, Kuchler – ft.com
What is going to make this worse is the shambolic Federal response to the crisis, especially forcing States into a bidding war to get Personal Protective Equipment (PPE), Ventilators and so on. Also, there are the scams, one of many I’ve read about in recent weeks was the $69 million New York State paid as a follow-up to a response to a tweet from the President, and got nothing in return, except some of it’s money. [Newsweek link]
It’s clear those additional costs, patients who can’t pay; overpriced supplies, cancelled routine surgery, empty beds, additional staff costs, have to be paid for somehow, it can’t be through raised prices. The system just won’t take it. That means potentially mass closure and consolidation. “If you like your Doctor” you are likely out of luck. Lucky will be that your facility remains open.
The US government funds more than half of healthcare spending — but it does not run the hospital system. Instead, it supplies public insurance in the form of Medicare, for seniors, and Medicaid, for the poorest, paying through a fragmented network of healthcare providers. To get by, hospitals must also have enough money coming in from commercial insurers or beg for extra subsidies.
How coronavirus broke America’s healthcare system – Hook, Kuchler – ft.com
My Personal Situation
As a non-employed (as opposed to un-employed) legal resident, non-citizen, I’m ineligible for Medicaid and obviously do not have employer based insurance. I decided not to spend some $800+ per month on insurance just for myself. Add to that, I’m 62 years old, and have had a heart attack, so I’m definitely a high-risk COVID-19 patient. I’m staying at home and happy to do so until there is a reliable vaccination.
The real problem with the US Healthcare system for cash-payers like me is, the billing. It takes absolutely hours. They nickel and dime you for everything. You can’t get even a useable estimate for treatment before agreeing to it. Last year I needed a tetanus shot after getting a nail in my foot. I called around, cost circa $49. However, the actual bill came to some $269, by the time I was “consulted” with a Doctor to see if I had any other problems, I also had to pay a non-resident fee for going to an urgent care outside my city limits.
This is unuseable, unsustainable, and unworkable. If COVID-19 turns out to be the straw that breaks the camel’s back, that will be one good thing to come out of this pandemic.
Mark – a few thoughts after three years of working on the edge of the US health system.
Also, around 2/3rds of all healthcare expense is on chronic but mostly reversible conditions – which is are not politically allowed to address through fear of being called racist and other things. It is one of the reasons the minority population is so severely affected by COVID-19.. While poverty is the major issue – it is type 2 diabetes that’s killing people.
I was astounded by how much money is wasted managing and support Medicare and Medicaid, through businesses that make billions of dollars helping hospitals manage these programs.
Having said that, where Obamacare made the most significant error, IMHO, was that they could have extended medicare to the uninsured without f-ing up the rest of it as a way to try and fix the system.
BTW The US has the third-highest ICU beds per 100K, and its one of the reasons why we may be better than say, the UK with one of the lowest. See https://en.wikipedia.org/wiki/List_of_countries_by_hospital_beds.
Thanks Nigel, yes good points. Also the size of the US and number of people, also create unique challenges. I’m certainly not advocating for simple solutions like let’s just extend Medicare to everyone, there is way too much opportunity for abuse. Something does have to change though. I’m selling my rental house in Crockett TX to pay for an angiogram. The hospital group can’t even estimate the cost, beyond saying more than $30k. That’s nuts… Once I have the money I’m going to try to negotiate a flat fee deal with them for cash.