The Obama administration has determined that we will be able to supply healthcare to several million additional people without increasing the cost of doing so, and with no plan in place to increase the supply side of the equation: the healthcare providers. In fact, the administration would have us believe that we can increase the supply of the product with the same resources currently in play and save money at the same time.
There’s only one way there could be any reduction in the overall cost. Reduce the amount of money being paid to healthcare providers for Medicare and Public Aid services. That absolutely won’t work. The further you reduce the amount of money paid to the providers for their services, the fewer providers you will have available to get the job done and the less product you will have to spread around to those who need it.
If the providers are unable to cover their costs, they can’t continue to produce their product: your healthcare services. They either quit altogether or they decrease their services and no longer provide care to Medicare and Public Aid recipients. That’s already happening to a certain extent and will become epidemic with further decreases in reimbursements.
Every government supported entitlement healthcare program out there doesn’t reimburse at the full cost of providing healthcare services, with one exception — federal employee insurance plans. Federal employees have it made and the American people are paying out of their tax dollars! They have one of the best private insurance plans available. Let’s change that. Let’s require that federal employees pay for their own insurance, just like the rest of working Americans and let’s take a closer look at their retirement benefits while we’re at it.
Cut time or increase taxes
The results of continual under funding of our healthcare programs will be a rationed and corrupted product. We will need to spread a decreasing supply of available healthcare services to an increasing consumer base. Healthcare providers will spend less and less time with each of their patients in order to see more patients in the same allotment of time. The quality of that care will most certainly be corrupted. The only other way to cover costs and increase the available volume of providers is to tax the living hell out of you guys so that healthcare providers can afford to do their job; so the profession can attract or entice our young people into the profession. Here is an actual example of what happens in the real world of healthcare from a financial standpoint.
Let’s say that my ambulance company transports a patient with private healthcare insurance over a long distance and the trip takes about four hours. We receive $3,000 for our services from the insurance company. Then let’s compare payment for that same service to the other major sources of reimbursement: Federally funded Medicare and Public Aid.
Private Insurance: 1 patient is equal to $3,000 (4 hours)
Medicare Part B Insurance: 4 patients are equal to $3,000 (16 hours)
Public Aid Insurance: 15 patients are equal to $3,000 (60 hours)
Not only am I going to receive less money per transport for Medicare and Public Aid patients, I’m going to have to spend a great deal more money to increase the number of ambulances and crews to get the work done.
If this were your company and you were selling widgets, what would you do? I can tell you for certain, you would sell one widget to the guy who’s going to pay you $3,000, let the rest go wanting and have lots of free time left over to play golf. Healthcare providers are not going to expend huge sums of money in order to increase the supply side of their services for a whole lot less money. That’s called the law of diminishing returns.
Continuing to pour money into a product that brings in less and less net profit eventually leads to an upside down situation; the point where it takes more money to get the product to market than it can actually be sold for. When that happens, the supplier leaves the market place and the product disappears.
Think about this: When I purchase a new ambulance, no one in the federal government is going to go out and tell the people who manufacture my ambulances that they must accept thirty-five cents on the dollar and make due with it. That would be an invasion of the private business sector and would not be tolerated. Could my ambulance supplier stay in business if that happened? I don’t think so.
How we survive
Healthcare providers are told exactly that when they render care to Medicare recipients. So, how do we stay in business? We get the funds to continue right out of the pockets of upper and middleclass working Americans; those Americans who have private insurance policies. You are the only source capable of paying for healthcare and you are absorbing the reimbursement shortfall in federally funded programs.
As long as the feds can’t pay their fair share for services, the financial burden will continue to rest with the privately insured patient population. By placing an additional burden of federally funded patients into the mix, the shortfall will continue to increase and the working American public will continue to see increases in the amount of monies they pay for insurance premiums and out of pocket expenses. The providers will have no choice. They’ll bill more in order to meet that shortfall.
When the Obama administration addresses issues about unsustainable costs, they’re talking about not being able to pay for Medicare and Public Aid at its current rate of consumption. So how do they propose to pay for the new influx of several million more patients, many of whom will be given government subsidized health care? They want to bring the costs to the federal government down even further, which means even less money being paid to the providers. Do you really think that’s going to work?
Welcome to the real world of Obamacare. Let’s flood the market with demand, keep the available supply constant (or watch it decline) and reduce the amount that is paid for the service. Medicare and Public Aid are both government controlled and funded healthcare programs. So far, we know that Mr. Obama definitely wants to fund more Public Aid and less Medicare. Do you really want more of that?
If your answer is yes, you want more government control; then you need to be prepared to pay a great deal more money into the system in the form of taxes. Be careful what you ask for. You just might get it.
We are not going to increase the supply of healthcare providers. Let’s face reality here. The healthcare industry has nowhere near the attraction as a lifelong profession as it did even five years ago. The supply of healthcare providers will most likely decrease, if for no other reason than those who want to go into the profession will be faced with practicing in a substandard care atmosphere.
Philosophical issues aside; the reality is those who wish to go into a healthcare profession will be faced with huge costs for education, killer hours of service, patient overloads and virtually no decent reimbursement for their efforts. Not to mention the fact that they are going to get their butts sued off every time they turn around. Get real out there!
How many of you would go out and work for virtually nothing in a field with little financial reward after putting in efforts similar to those our young people undertake to become healthcare providers? You want to get top dollar for what you do and so do our physicians and healthcare providers.
Healthcare simply isn’t going to attract out best and brightest in the future because reimbursement will be sadly reduced. If Mr. Obama is telling us the truth when he says we will save money, we will have to corrupt and ration the product. Make no mistake about it: No matter what anyone tells you to the contrary, healthcare providers themselves will ration care out of absolute necessity even if the federal government doesn’t (which they surely will).
Editor’s note: The above is an excerpt from C.E. Nash’s book “Jiggered.”
C.E. Nash has taught medical residents and respiratory care students in the clinical setting, engaged in medical research projects, developed medical policies and procedures, and furthered educational programs within the structure of the healthcare industry. Currently, Nash has expanded into the ambulance transport business.
