HEALTH CARE COSTS 2007

 

The Congress is gagging on a barely palatable bolus of Health Care Bills that the Administration wants it to disgorge sooner than seems possible. Meanwhile the media and some in Congress extrude talking points about cost saving measures aimed singularly at the Medical Profession. I believe that with proper management of Primary Care the system could save 100 Billion dollars a year perhaps more. That is astonishing MONEY considering that the Wars in Afghanistan and Iraq reportedly cost about $200 Billion a year.

 

Below is a breakdown of costs structure of Health Care for 2007. Surprisingly doctors are involved in only 21% of Total Health Care expenses. (Privatize Health Care for 1 year and resolve the debt crisis!)

 

 

HEALTH CARE CATEGORY

%

 

Equals $

1

 Total Cost 2007

100

*2.24*1012

 2.24 Trillion

 

 

 

 

 

2

Physician Clinical Services

  21

=4.707*1011

470.7 Billion

3

Hospital Care

  31

=6.944*1011

694.4 Billion

 

Total

  52

=1.17*1012s

1.17  Trillion

 

 

 

 

 

4

Investment

6

=1.34*1011

134 Billion

5

Government Public Health

3

=0.67*1011

067 Billion

6

Program Administration

7

=1.57*1011

157 Billion

7

Retail-other products

3

=0.67*1011

067 Billion

8

Retail-Rx Drugs

10

=2.24*1011

224 Billion

9

Home Health Care

3

=0.67*1011

 67 Billion

10

Nursing Home Care

6

=1.34*1011

134 Billion

11

Other Professional Services

10

=2.24*1011

224 Billion

 

Total

48

=1.07*1012

1.07 Trillion

 

 

 

 

 

 

GRAND TOTAL

 

=2.24* 1012

2.24 Trillion     

 

 

 

 

 

 

            The bill for Physician Clinical Services is 470.7 $Billion dollars.  If each Primary Care Doctor (PCD) practiced 300 days (D) each year; if each PCD saw 20 Patients (P) a day; if each P paid $20 (F) for  a visit: the total bill for Primary Care Services would be $42 Billion dollars a year.1  This represents about 10% of the total bill for Doctor-in office Care) ($470 Billion).  If the remainder (over $400 Billion annually) is applied to specialty care, how much of that might be due to a cascade of unnecessary referrals of patients for matters that might be attended at much lower cost in the offices of active Primary Care Specialists?

 

            Over more than half a century the role of the Primary Care Doctor has morphed from General Practitioner to Family Doctor, to Primary Care doc and currently to Gate-keeper---the turnstile that distributes patients helter-skelter to specialists and testing agencies. The “Gatekeeper” role has failed miserably.  The progression of patient-care has become more akin to a market place of “piece goods” rather than a procession of guardianships.

 

If the role of Primary Care were expanded as described in this and another web site the arithmetic suggests that hundreds of billions of dollars could be saved annually.

 

For the Medical aspects of Health Care to work properly and efficiently Patient Care must be governed by the Primary Care Doctor.

 

1    PCD=Primary Care Doctor: 350,000

    D     =Days work per year           300

    PD   =Patient Days (PCD*D)     350,000 x 300= (3*102*3.5*105) = 1.105*1010 = 105 Million Practice Days

    F     =Fee per patient  $                 20.

 

(350,000 PCD x 210 million days in office per annum x Fee of $20 for each patient =$42 Billion dollars a year)

 

THE OTHER SIDE OF HEALTH CARE

 

There is little if any emphasis on the 48% of items peripheral to Medical/Hospital care. For example, something called INVESTMENT costs $134 billion dollars but there is no breakdown. Was money lost or gained on the investment. What was the money invested in?

 

Program administration cost $157 billion. Does that include either or both Medicare and HMO administration? Veterans? Indian Health?

 

“Retail and other products” is $67 Billion is vague not itemized.

 

Other Professional services” for $224 Billion is vague not itemized.

 

We can mostly guess what Hospital and Medical Care is but included in the total of $2.24 Trillion dollars are $582 Billion (1/2 Trillion or 25%) of the ill defined distribution of money. Since this half a trillion has been approved by the Congress one might hope that in paring costs the Congress (as well as media) might take a closer look at this particular cluster of Health Care expense!

 

It would seem reasonable to parse those expenditures before the disseminating the outlandish suggestion that doctors will be reimbursed by “outcome” rather than the amount of work they perform. “Outcome”.  How will that be defined and who will govern the definition?  Doctors keep trying until optimum outcome has been achieved. That costs money.

 

Were we to the judge the entire Congress by “OUTCOME” nobody would ever be re-elected.