When Obama was running for President and citing billions that could be saved in Medicare and Medicaid by eliminating fraud and waste, this was one specific example that he pointed out. It is still out there in his original White Papers. But the GOP has opposed it at every step.

The article does not make it clear that Medicare and Medicaid are forbidden to negotiated prices down (even though they have purchasing power that makes Walmart look like small potatoes.)

There are a number of these issues that are opposed by the GOP, but could help everyone:

1) Group Purchasing Options. The thing this article was about is a good thing. The idea of hospitals and even Medicare and Medicaid setting up specs for a product and then buying from the lowest bidder that meets the specs is a very good thing. In the case of the for-profit medical industry, it would be necessary to share some of the savings with the institution, but in the case of Medicare and Medicaid, it would be all savings. Except that it is forbidden by law with both Medicare and Medicaid.

2) Group Purchasing of drugs. The disastrous Medicare Part D forbids any negotiations over price of drugs by Medicare or Medicaid, and in fact, raises everyone's prices by using Manufacturer's Suggested Retail Price (MSRP) instead of Usual and Customary Rate (UCR) on which to base prices. This caused everyone's drug prices to go up, even those with private insurers. This is why an American drug company can have a drug made in India and sell it in the U.S. for 4 times what it sells for in Canada (up from 3 times before Part D.) This is also fixable. Use the FDA to monitor efficacy and negotiate substantial reductions in drug prices for everyone for the best drug in each class. (The rest will fall because of free market forces.)

3) Allow drugs and medical equipment to be purchased in Britain or Canada with no restrictions. This would bring down prices dramatically. I take two blood pressure meds, one statin, one pain killer for arthritis, and a NSAID for arthritis. (unfortunately, none of them is currently available in generic form.) I am in the process of shifting all my drug purchases to Canada for the simple reason that I can buy them mail-order for less than my co-pay in this country (and that includes shipping.)

4) Another issue is the use of electronic medical records, the most cost saving of which is requiring prescriptions to be printed from a physician's medical system that checks for dosages "not compatible with life" and and for drug conflicts and filled by a pharmacy computer system that checks the prescription against a federal database for the same issues. The leading cause of malpractice suits in this country is hand-written scripts that are either wrong or are not correctly read by the pharmacist. Personally, I never accept a hand-written prescription.

5) And the last major issue is that of "cost per procedure" versus itemized cost. I had a knee replacement in December. I looked over my records carefully and there were over 6,000 separate charges. I was charged for a number of items that I did not receive --- for example I was charged for a demand morphine pump and I am allergic to morphine and for slippers that I did not get. There are a number of companies that will review your itemized hospital bills for free and their only fee is 10% of the savings --- there are that many "mistakes" in billing. (I personally consider this fraud because where these "errors" have been studied closely, over 80% are in favor of the hospital or physician whereas true accidental errors would only favor these people by 50%.) Would you buy a car if you were billed separately for each tire, the engine, the spark plugs, the wheels, the seats, the brake pedal, etc separately and did not know the full cost of the car until months after you bought it? Of course not. So why do we tolerate this for health care when we know that it allows Medicare, Medicaid, and private insurers to be bilked? Why do we get surgery and then have to pay for a hospital-acquired staph infection? We need to be moving toward a cost for procedure system where a knee replacement is paid for as a single item with no place to hide fraudulent charges.

6) And please, please, let's look at the profitability of drug companies, physicians, and the rest of the for-profit medical industry. Profiting off the misery of others is not part of a Judeo-Christian ethic. The major drug companies do not discover new drugs --- they buy patents from the companies that do and most new drugs, devices, and treatments are developed at taxpayer expense with no way of recovering that money, even when a "blockbuster" drug can easily make a target 8,000% profit. If people could see the true profits from the for-profit medical industry, they would rise up in revolt. It isn't 1-2% as the health insurance companies claim, but a whopping 24-25% (they hide most of the profits in subsidiaries, parent companies or REITs.)

7) And last but not least we need to take a hard cold truthful look at what other countries are doing with health care and adopt practices that are universally beneficial and avoid the practices that we consider mistakes. Just saying that British and Canadian residents hate their health care system (which is an outright lie) is not helping anything. There is currently enough money in the health care system to cut costs by over 50% while covering every single person in this country and improving the quality of health care dramatically. But to get there, we must look at things from a factual basis, not political mud-slinging.

And BTW, as a personal note. Why is no one upset about the fine that was included for anyone eligible for Medicare Part A that did not immediately subscribe to Medicare Part D. Why is it okay for a fine if the GOP proposes it and a sin if the Democrats do the same thing? I will be 67 in December and did not take Medicare Part B or D when I retired and started drawing social security checks because my wife is still working and has excellent private insurance, which includes dental and vision (neither of which is covered by Medicare.) I am fined 1% for every month that I wait before signing up for Part D. Right now I am up to a 22% fine and there is no upper cap. When I finally sign up for Parts B & D, I will have to pay substantially more for Part D, even though I have been saving taxpayer money for all that time.

Hmm, didn't take long for somebody to blame one party on all our problems. If only we could silence a whole party right? Take away their right to vote, and I'm sure the Democrats would be angels, and do only good for the people.

Sounds kind of like unions, don't it. Can't work unless you pay the leadership.

Your not required to pay a union to work. Hospitals are required to pay these guys to do their work, because if they didn't they wouldn't have any equipment to use.

bingo! right the first time! but you're not likely to get much attention here, because you're not grinding a political axe.

Actually it needs to both, the problem is not so much the medical industry workers, I.E. doctors and nurses, but the industry manufacturers, the drug companies, the equipment makers, and senseless lawsuits, that are raising the costs of health care. Besides, there is a component in the health care reform law that will help. Its small, its simple, and could be quite effective: a study of what drugs, treatments, and proceedures are effective, and what ones are worthless

Eric,

I agree with you on every issue except the "senseless lawsuits" item. This country leads the world in medical malpractice --- it is the fifth leading cause of death in this country and not even in the top 10 in any other country in the world.

A majority of states have already enacted so-called "tort reform" which limits damages that juries can award. In the states that have adopted tort reform, medical malpractice premiums have gone up slightly more than in the states which have not.

Over 90% of medical malpractice claims are settled out of court and would not be effected by tort reform anyway. The primary reason is that settlements can require that the victim (or their family) will not pursue any further civil, criminal, or disciplinary action against the physician or pharmacist or hospital. This is the greatest reason why this country leads the world in medical malpractice --- the same bad medicine is practiced over and over because no one loses their license or goes to jail.

And another little known fact about these settlements is that the victim often gets little or nothing. The scenario too often goes like this. The victim settles for $1,000,000. But it is set up as an 20-year annuity, so they actually settled for around $300,000. But their lawyer took the case on contingency, so he gets $333,333 for his fee. The settlement pays the lawyer directly and reduces the amount to the victim to a 20-year annuity of about $185 a month. That's why you see all those "We want out money now!" ads on TV.

One of the reasons that juries award huge amounts to victims of medical malpractice that do get to trial is that the punitive award is based on the profitability of both the entity guilty of malpractice and the medical malpractice insurance company. There is an old Learned Hand decision that says in part that of a man with a net worth of $100 is guilty of the same thing as a man worth $1000, the jury must award ten times the amount to the latter in order to exact the same punishment or send the same punitive message. They get financial statements on which to base their awards.

Juries are not stupid. Medical malpractice is incredibly difficult to prove and there are plenty of "expert" witnesses who will testify to anything on both sides. Juries are very leery of lawyers just as everyone else is. And judges are even more difficult and despise frivolous or exaggerated claims and will throw out a case or make a directed charge to a jury in a heartbeat.

And unexpected medical bills accounts for over half the bankruptcies in this country. And of those who file for bankruptcy for this reason, over 40% had health insurance.

I would like to see tort reform that brought transparency to the process. "Pain and suffering" damages would be capped at a level tied to the gross income of the practitioner or institution found to be at fault --- for example, pain and suffering for someone who had to be operated on to remove a sponge left inside them by a surgeon would be capped at twice the surgeon's average annual average gross income for the past five years. Any settlement would not be allowed to include a) a prohibition of disclosing any detail of the settlement, b) that legal fees be capped at an amount half that for pain and suffering, c) and settlements would not be allowed to preclude any followup criminal or disciplinary charges, and d) that the judge approving the settlement could, at his own discretion, refer the offending party to a grand jury or a licensing board.

Those scooter chair ads are a scam and will hopefully be taken off the air soon. They are carefully worded that they will guarantee that the chair will be paid for by Medicare and/or your insurance company, but only if you pass their screening process first. Less than 1/2 of 1% who complete the screening process are eligible for a free scooter chair. And of the ones submitted to Medicare about 90% are turned down.

The idea is to get you to call them and hear their telemarketing spiel which promises low monthly payments "forgets" to mention huge fees, shipping costs and interest) and is designed to take advantage of the elderly. They tell you that they will send you a chair and charge your credit card monthly and if you are not completely satisfied you can return it within 90 days and you will only be charged what you have paid so far. But getting the charges stopped is another thing. No one ever answers the phone so the charges go on and on. And they sell your name and the information they have gleaned to other telemarketing companies that target seniors for $75 to $200 a name.

GPO has regs you would not believe and if you don't follow them you don't get on the list. Some of the things are how the bid is written, than how things are shipped, how many copies to the customers, how many copies to GPO, and there are other things. It is not as simple as it sounds and it is take allot time and it cost the company to do it. Oh before I forget these GPO are world wide. You should see what happens with a out of box failure. The paper work alone would bury you. So your comment profit and fraud are unfounded. As always just my opinion.

I will agree that there is a lot of profit and over charging in parts of the health care industry...but probably not so much on your doctor's end. There is more than just student loans to think about, there's the receptionist that needs to be paid, the nurse, equipment, accountant, rent or mortgage for place of practice, malpractice insurance, continuing education requirements, plus other odd and ends. It kills me that people will pay hundreds of dollars to see a game or go to a concert, but have a fit about paying a doctors bill. We will pay way more for entertainment then we will pay for health, playing a doctor on tv pays way more than playing one in real life. Out of all the people that work in healthcare, the actual providers are on the low end of the profit margin.

I think there needs to be another independent study done around this. There needs to be something done about the money that is wasted in health care...but look in the right places.

BW-267706

Hospitals are likely the culprits in rising health care costs. I had two orthopeadic surgeries due to an auto accident. The hopsital bill for each was about $30,000. The surgeon's fees were less than $3000.00 each time, which I consider reasonable (surprised it was so low). This was outpatient--go home same day as surgery. When the doc charges 3 thousand and the hospital charges 30 thousand, something is way out of kilter. Several thousand was charged for use of a video system the surgeon used. I can assume that system got paid for many times with charges like that. I call that a rip off. Insurance paid all costs. The hospitals probably count on that, thus the high bills, and high costs of insurance.

#16 - Wed Oct 6, 2010 10:46 PM EDT

My earlier post.

I think doctors' charges are quite reasonable. I agree with Dr Dave. No, I'm not a doctor.

The article was about the way hopsitals purchase equipment, not about fees charged by doctors.

What I notice when I go into almost any doctor's office is the number of clerical workers. How many clerks does it take to deal with all the different insurance companies? Maybe the billing practices could enjoy economies of scale if reconfigured. Sensible tort reform would go a long way also, though I think the malpractice underwriters would prefer that tort reform doesn't happen. After all, 5% profit of a million dollar premium is a lot more than a 5% profit on a $200K premium. How come it cost so much for medical devices, equipment, and supplies? Are there so many middle-men that by the time everybody gets enough cut to make a couple a hundred grand a year apeice that it ends up costing a patient three bucks an asperin or eighteen bucks for a plastic bedpan that's manufatured for less than a dollar? How about an artificial knee that cost the patient four grand for a device that has maybe 150 bucks in materials cost? Also, things like facilities management bleed money. I can't see where it's cheaper to contract out services to a middle man.

There is a lot of waste and frankly, greed in the health care industry. Though I'm a moderate and support the Health Care Act in most of it's provisions, I feel that many of the right wing are right when they say that it's an insurance reform bill instead of a health care bill. Getting all citizens eligible for quality care is only just in a country as rich as ours, but another leg on that stool needs to be finding practices that lower cost to the insurance companies. The other leg needs to be a provision in the law that allows insurance companies to compete across state lines. If the right wing of our country really believes in free market economics, that provision alone would lower premiums.

I understand your views guys and I'm sure there are allot of decent docs but there are allot who aren't (like the ones living in mansions) and nearly every end of the medical industry overcharges in all directions making the docs have to charge more to ensure everyone gets overpaid including themselves. Either way I didn't mean to seem to be attacking the Doctors. It's the whole industry!

Take note - the regs were changed in 1986 under Reagan and favor business over consumers by keeping the prices of the devices higher and therefore the charge to patients higher. So yes, a corrupt govt can be problematic but this is the govt that favors business over people and profit over health and well being of its citizenry. So go out and vote for more people that follow that philosophy and see how much further down that path we go.

Did you not read the article? When government was more involved, it was less expensive, because a (small d) democratic government is less susceptible to greed. Privatizing things is good in theory, but facts and history demonstrate that the theory breaks down in the real world. Government doesn't exist to make a profit (even if politicians do); making a profit -- i.e. NOT giving people a good deal for their money -- is the whole point of private industry.

The reality is that the insurance company and GPO's dictate what kind of care a patient can receive instead of leaving that to the provider and patient. Health care needs to be more streamlined and remove a lot of these unnecessary middlemen who are only thinking about the bottom line.

Surgical/Medical Device Senior Representative you have given another part of the story. My husband works the QA part, where the units come when a complaint is opened and his group has to find and fix the problem and is another part of the story. What people don't understand is that there is not just the develop, market, sell there is so much more to it. All they see is dollar signs. Thank you for the your part. As always just my opinion.

If you read the article, you would know that the word "government" is mentioned only once, and it is only in the context that the government runs hospitals, so it, too, can save a ton of money instead of being conned by private industry.

It is the mania of people like you for "small government" which has created most of the economic problems for the government.

This is what happens: some private industry decides they want to feed off the government. They then hire a couple of lobbyists to go around and explain to Congressmen that they should farm out some government function to them..after all, it will make government smaller. So they do. And the public ends up paying considerably more now because these people see it as a way to bilk to government.

Then the next guy comes along, points at these people and says, "See how bad government is. Let us help you do better." And the story repeats itself. After this has happened a few thousand times, the government has been gutted, the taxpayer pays hundreds of billions in wasted money on products the country doesn't even need, and everyone explains how government is bad.

If government actually governed, as opposed to giving away its core function, things would actually work. But no, we can't have that because it would make us, god forbid, socialists and see how Europe is mired in poverty and everyone there is dying of sickness and poor health care. Why, they are practically a third world country!