Grab a Calculator the Math is Getting Fuzzy

By: Jill Serbousek

I admit to needing a calculator when doing math problems that involve multiple digits. I even resort to using a spreadsheet because my calculator isn’t great when doing problems in the trillions. So, as I read through the news reports, government reports and analyst summaries, I actually attempt to keep up with them on the math. Sometimes the methodology and assumptions are tough to understand, but the math should make sense right? The hardest part is that they never give you all of the numbers that are needed to reproduce their answers. Often the ‘denominator’ or some key factor is missing. When this occurs, I try to track down the source reports that are referenced. This is typically when I get really concerned…..

Here are some of the “facts” currently being discussed:

·       An additional “$1 trillion over 10 years will be needed to cover the uninsured”, however, according to the Congressional Budget Office “36 million people would still be uninsured.” I need help understanding this one. Why would we change our entire healthcare system to compound the cost and not even take care of those that were supposed to receive help?

·       Obama stated that the government could save $106B by cutting federal payments to hospitals. Wouldn’t cutting federal payments further hinder the Medicaid program’s success in caring for it’s participants?

·       “…cost control (is) a coequal objective, just as important as the expansion of insurance coverage…” according to Rahm Emmanuel. Nobody will argue that reducing/controlling costs should always be a focus. However, I have yet to read an article where the government is willing to evaluate the costs that they directly impose on the healthcare industry. According to Christopher Conover, in 2004 the government imposed nearly $340B per year on regulation of the healthcare industry. I’m sure that this number has been increasing. His report also points out that almost half of this is wasteful. Hmmm… a great example of how regulation leads to increased costs. Why isn’t the government looking more closely at the cost/benefit of how they directly impact the overall costs?

·       Another major cost factor that is being treated as the ‘elephant in the room’ is the cost of defensive medicine. It is unrealistic to reduce the cost of healthcare without also evaluating how the legal system drives up the cost of care with increased number of diagnostic tests, medical malpractice insurance, litigation, etc. Obama actually dipped his toe in the water with this topic, but took a cap on malpractice awards off the table. (Which, according to the reports, received a loud “boo” from the audience) Of course, he is a lawyer. Plus, one of the largest lobbying groups in America, who uses 95% of their PAC funds for the Democratic party, is the American Association for Justice. This is a fund for trial lawyers and law firms. You can learn more about all of the lobbying groups in America at Open Secrets’website. This is an awesome and informative site. http://www.opensecrets.org/pacs/toppacs.php?Type=C&cycle=2008

·       Speaking of the costs that “defensive medicine” adds to the system, it was shocking to me that the whitehouse’s healthcare economic report does not even address the cost of defensive medicine or government regulatory costs in their self-proclaimed “comprehensive” cost report on healthcare. Not even a mention. As if the entire cost of care and coverage is the fault of doctors, insurance companies and industry. Obama had the chance to recognize that defensive medicine is the reason why doctors order “more diagnostic tests than necessary” when he spoke to the American Medical Association this week. However, he chose to blame those alleged “unnecessary” tests on the doctor’s “financial incentives.” That is a VERY broad and unproven allegation. Just ask a doctor, any doctor in the United States, about their practice costs. They will ALL tell you that the threat of being sued is their biggest worry, and the insurance to help them if this happens is one of the largest, if not largest costs. Guess who this cost is passed to? The consumers/insurance companies who pay for the doctor’s services. We simply cannot reform healthcare costs without looking at legal costs associated with medicine. Here’s a link to an earlier blog about the positive impact on tort reform. http://www.healthandsharing.com/13/healthblogdetail

Please post the math and cost issues that aren’t adding up for you in the commentary of this blog. I’m still evaluating 2 very lengthy government reports on this topic and will share those thoughts as I finish my notes. Thanks… http://www.healthandsharing.com/23/healthblogdetail