Medicare may be hazardous to your health

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July 12, 2014 by Tony Novak

Problems for Medicare are in the news this week. In contrast to the basic medical ethics of “do no harm”, AARP reports the results of an extensive study showing that one in five patients treated through Medicare actually wind up with a medical problem from their treatment unrelated to the original problem. This first of its kind study may lead to a shake-up in the perception of the massive program as AARP reports that “Medical care may be hazardous to your health”.

Meanwhile USA Today showed how medical providers worked together to commit Medicare fraud at patients’ expense. The investigation shows that Medicare fraud is not a victimless crime and that these patients physically suffered due providers’ greed.

Yet that does not deter some proponents of the system. I received an email yesterday from New Jersey CPA Lynn Petrovich, co-founder Medicare for All-NJ, saying “This is exactly why we need Improved and Expanded Medicare for All – truly cradle to grave universal health coverage which is not tied to employment and for which there would be no co-pays, deductibles, co-insurance (like under ACA which are staggering in the $5,000 to $10,000 annual range BEFORE insurance kicks in.)

If NJ were to implement such a plan, numerous reports have supported an annual $2 billion savings (from not having to pay thousands of profit-first health insurers – too many hands in the pot), to the complete elimination of our totally unfunded post-retirement health care liability which the current administration (somewhat) admits is between $40 and $60 billion.  That liability would go away with the stroke of a pen because everyone would already have comprehensive health coverage.  The majority of my senior citizen tax clients have such fractured coverage from Medicare, to “Medigap” insurance, to Medicaid, to cancer policies, dental policies, long-term care policies, including co pays and deductibles in the thousands of dollars.  It is totally insane.

We need doctors to go back to treating their patients instead of the “business” of health care coverage for employees.  It has worked in no less than 35 other countries (at costs which are as much as one-half what we pay)…why is it such a pie in the sky for this country?  Why?” While I don’t follow the logic that a “stroke of the pen” can eliminate post-retirement health care liabilities, I do understand the attack on the massive overhead that characterizes our health care system. This is a common position; blame health care administration that makes up, at most, 16% of the system costs. But with average health care spending now approaching $25,000 per household per year and growing at a rate of more than $1,000 per year, every cost component should be under examination. Despite these comments, I actually agree with Lynn that we are eventually headed toward universal basic health care, but only after we’ve failed at everything else first. Meanwhile, we have to deal with the system as it exits today.

I’m certainly not saying that we don’t have problems in health care delivery controls. Most people would agree that we need to make big improvements in every part of our health care delivery system. But it seems to me that an accountant, of all people, ought to recognize that the layers of audit and controls implemented by government and for-profit companies are the only thing preventing our health care system from harming us financially, and now, it turns out, physically as well.

This concept (and the idea for this blog post) was reinforced in a conversation yesterday with a 60 year old co-worker who had not had significant interaction with the health care industry since he was a child. Our conversation focused on a series of recent surgeries on several young adults we know in common that seemed, at least to us in our uninformed positions, to be of questionable benefit. We agreed that a patient is simply not in a position to know whether the medical care is worthwhile. If the doctor recommends a treatment and then the health plan approves it, then patients presume this is the treatment route to take. We don’t question this logic but maybe we should. One of the best sources for thought-provoking discussion that I’ve read on this topic is the 2007 book Overtreated by Shannon Brownlee.

For now, making health care difficult to access might actually be a benefit, not a problem. I would even take it a step further and say that the barriers to entry are arguably one of the better aspects of the current health care delivery system as it exists in the United States right now.

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