Saturday, January 6, 2018

The World's Best Medical System: Medicare For All v For Profit Medicine

Next time someone tellsyou about what a  calamity socialized medicine would be, and how much more efficient the free market system is, with all its incentives, think about this story.

An executive at one of the big pharma companies told me over lunch his company had cut 4,000 sales jobs, but some of those folks could be retrained to be billing reps.
Let's not talk about him

What does a "billing rep" do? Well, when a group of oncologists sets up an infusion center in their office, or when a hospital sets up such a center, where cancer patients are given intravenous chemotherapy drugs, the doctors or the hospital buys the drugs, not the patient. The patient's insurance company then pays the doctor for the drug, and pays him a fee to start the IV and administer it. This is all quite apart from the fee the insurance company pays the doctor for the office visit, where the doctor decides what drug to give the patient.

The doctor then has to bill the insurance company for payment for the drug, and that's where the drug company billing rep comes in: The drug rep knows exactly how to bill the insurance company, so the number of milligrams administered fits the profile in the insurance company's computer for the disease the patient has. There's a whole elaborate system with numbers corresponding to diagnoses and another for procedures. The drug company helps the doctor maximize his reimbursement from the insurance company.
Iceland has a national health care system

Now, why would the drug company be so kind to the doctor as to guide him through the reimbursement system? Why would it it be worth the salary of a drug rep? 

Because the doctor has choices among several "me too" drugs, made by different drug companies, and there's often not a hair's breadth of difference among these competing drugs, save, perhaps, for the amount of money the doctor might pocket. 

"In the good old days, the doc could get 25% of the cost of the drug, which for a drug which costs $10,000 a month is $2500, multiplied by 100 patients, thats $250,000 a month. "A lot of beach houses got built on cancer chemotherapy," the drug guy laughed.
Some sort of bird on Batchelder's pond, Hampton, NH

"But now, it's not so good. They only get 6%, typically. That's only $600 a patient or $60,000 a month. 
Still, a mortgage payment, I thought.
It made me think of that old quip, "More people make a living off cancer than die from it." And it made me think of all those other blatant conflicts of interest our commercial system has fostered, like doctors who own the laboratories which run the tests they order on patients. The more tests they order, the more money they make. 

But, in the case of cancer drugs,  look beyond just the drug company and the doctor. The doctor has an office staff, a big office staff, often four or five ladies doing the billing, and the insurance company has its staff of folks receiving and entering the bills into their computers and issuing payment checks and the insurance company has its CEO and his staff. 

If we had a Medicare-for-all health care system, tomorrow all those jobs would evaporate over night.
Land of the free, home of the chumps

And with them, of course, so would all the expense built into our bloated system.

The cancer patients would still be going to the infusion centers, getting their drugs. But, of course, the choice of drug might not depend on which drug company offered the doctor the biggest paycheck.

Oh, but that would be the ruin of the best medical care system in the world!
Oh, its so sad to be ruined. 

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