In Health Care, It’s Location, Location, Location

Hospitals, that’s where a lot of the bills come from. And we are not talking about your everyday bill either; we are talking BILLS on steroids. These are bills that have $100 dollar aspirins, $500 dollar gauze bandages, and really expensive night-gowns that don’t even cover your butt. Given such excessive charges, there can be no doubt that this is where major responsibilities for health care costs lies. Except, if this is correct; why are hospitals not among the highest profit industries in the nation. I mean if you make that kind of profit on things like aspirins, you have got to be raking it in.
And if the hospitals were making those profits on every patients’ bills; they would be awash in gold stethoscopes and diamond studded tongue-depressors. So what’s going on here? They are charging people high prices, but they aren’t making tons of money! This sounds like creative accounting; and in fact, that is what it is. We have lots of number crunchers moving money around in order to do exactly what should not be done, distorting the true cost of our health care system. They are not doing this to make those huge profits which they are not achieving; they are doing it to literally balance their books. You know that stuff that accountants go to school to learn how to do.

Now why are they doing this. Well, it appears that the Health Care programs that the Government has created: Medicare, Medicaid, … are paying hospitals and doctors set rates for various items which do not actually cover the actual costs of those items. Add to this that states also require hospitals to provide emergency care to any and all who come in to the emergency rooms with treatment; and whether they can pay for that care is not a requirement. So add a cost here and a cost there; and as William Proxmire said: “Pretty soon your talking real money.”

And this is where the accountants come in. They tell the hospitals how much money they are short, and that they will have to make up from the “paying” customers. So if you are someone who has health care insurance, or worse someone who has to pay out-of-pocket, they you get to play the golden goose. You can pay for your care, and for the care of everyone else that cannot. Now if you are the unfortunate who pays for their self, well you are really going to hurt from your sickness or injury. If your insured then I am sure you think, hey at least I don’t have to pay for this; or your one of those individuals who think, hey let’s get as much care as I possibly can: I’m not paying. Well you are paying, and it does drive the cost up.

This behavior is driven by a system that is fundamentally broken. Bureaucrats set rates for various services that have to be provided, they make the rates lower than the real costs and then they promote a payment method that encourages the rendering of as many services as possible to jack up the total charges that can be reimbursed by the program. It fosters an atmosphere of playing the system, rather than focusing on helping the patient.

So hospitals are contributing to rising costs; but I would maintain more in a reactionary manner than in a motivator manner. These institutions would transition to a more favorable and beneficial mode of operation if they were driven by productive processes and by systems and programs that directed their activities to serving public health interests.