By George Capsis
Over the Labor Day weekend, the Leonard Lopate show ran a segment with two doctors talking about the high cost of US medicine. Then in the following Tuesday’s Times we learned that hospitals really don’t know what it costs them to provide medical services (I mean they have no idea). They do know how much Medicare and the insurance companies will pay, so they send them whopping big crazy bills and get back more or less the same amount of money each time.
I wrote about this a few months ago after experiencing two very different operations and getting more or less the same bill $1260.30 for my part of the costs. When I asked the lady in charge of the accounting depart for twenty-five years how they could charge $5000 a night she said “I don’t know, this is the way we have been doing it.” What she was saying is what this Times article is talking about—hospitals don’t know what it costs them to provide medical treatment, so obviously they have no way to figure out how to save money.
I mean in response to the astonishing question of Vivian Lee, the chief executive of University of Utah Health Care, “What does an hour in the operating room cost?” her staff just chuckled.
As the Times article explains, “The cost issue has taken on a new urgency as the Affordable Care Act accelerates the move away from fee-for-service medicine and towards a system where hospitals will get one payment for the entire course of treatment like hospitalization for pneumonia… Medicare too, is setting new goals for payment based on the value of the care. Under such a system, if a hospital does additional tests and procedures or if patients get infections or are readmitted, the hospital bears the cost.”
The Times also says “To make money medical centers have to figure out what it actually costs to provide care and how to spend less while maintaining or improving outcomes.” Wait a second, I don’t like this—what they are saying is let us see how much we can cut down on service before we start losing patients then bring it up a notch.
Now, what the University of Utah Health Care has done is to create a computer program for every item in the health care process and right now they have 200 million items and still more to come. The cost per minute for an emergency visit is 82 cents. In the surgical intensive care room, the cost per minute is $1.43. And in the operating room for orthopedic surgery—like I had—it is $12.
Utah Health Care also found that 20 to 50 percent of hospital lab tests were completely unnecessary. Since most insurance companies pay a lump sum, the hospital ends up paying for these extra tests.
Oh wow, I never knew that hospitals have no idea what it costs to provide service. A few years back when I asked our laconic accountant what should I do if the cost of producing and distributing WestView exceeded the ad and subscription revenue he replied, “discontinue the paper.”
And that is what the management of Saint Vincent’s did when they discovered they did not have any more money in the bank to pay the salaries—they locked and boarded the doors.
Now, hospital managers, while they have no idea of how much it actually costs them to run a hospital came to the conclusion that old fashioned, open to everybody, 24-7 emergency rooms in which by law you had to treat everybody who stumbled in was too expensive and had to be eliminated so they invented “urgent care” (and I can still hear Michael J. Dowling with his high pitched Limerick accent responding to an angry jam packed PS 41 crowd “we can treat 95% of the cases.)
OK, Idrissa Camara the security guard who was shot on 201 Varick Street was not a part of that 95%. He was brought to the Lenox Health Greenwich Village urgent care facility on 13th and 7th Avenue and died there. Why was he not taken to a for-real trauma one emergency room at Beth Israel or NYU or Bellevue?
In answer, it is reported that the Lennox Health urgent care center head Dr. Alex Hellinger allowed that it is the responsibility of the EMS team to decide how critical the emergency is and if the victim needs to be treated in an emergency room. Hmm, having done three ambulance trips in the last year, I have genuine admiration for the EMS teams—but they are not experienced emergency room physicians.
Let us hope that with this new University of Utah computer program hospitals can learn what it actually costs to provide services and figure out how they can save your life if you get a heart attack and still make money.
