Health Reform Breakdown

I started my career back in the days when we were trying to control health care costs by using certificate of need reviews. For those of you who don't remember, that was the effort in the late 1970s to control health-related capital spending. The assumption was that we were duplicating too much capital investment. Not much has changed.

Then came diagnostic related groups. I'm afraid the folks in Washington didn't figure that hospitals would figure out how to game the system. Again, health care costs kept going up.

In spite of evidence that DRGs did not work, a similar system was imposed on outpatient services based on what are called relative value units. Doctors don't get paid for an office visit, they get paid a standardized fee based on the diagnosis. If you wonder why your doctor doesn't spend time with you, it's because after somewhere between 7 and 10 minutes, they don't get paid especially well for their time.

The fact is that nothing in health care reform has even begun to address this Byzantine system that ends up requiring physicians to have specially trained staff to help them properly code their bills.

Don't think for a minute that somehow the single payer system will help all this along. The brain trust behind DRGs and RVUs is the Centers for Medicare and Medicaid Services (CMS http://www.cms.gov/).

Can we fix this mess? You bet. It starts by freeing physicians from this absurd reimbursement system and letting payments become a transaction between the patient and the doctor. Consumer driven health plans are a step, but without getting rid of the current reimbursement system, they simply cannot work. Doctors don't know what the cost of a visit will be until after the diagnosis, so price transparency is impossible. Other professionals charge for their time. Why can't doctors?