Sunday, February 10, 2008

Where to Cut?

(Click to enlarge)

Here's the hospital bill from a relative who recently underwent spinal fusion surgery from one of our local hospitals. The person was in the hospital two days. I found it illustrative for several reasons:

(1) Its itemization was remarkably vague.
(2) It showed what hospitals are billing insurers for surgical procedures these days.
(3) It demonstrates where "costs" can be padded that help pay for other expenses incurred by hospitals.

If you were a money manager or policy maker responsible to cut healthcare costs, which line item in the above bill would seem like the most efficient place to cut costs?

I guess it's better not to think about this and just cut doctors' Medicare reimbursements another 10% or so this June.

Sad how the Leapfrog Group and AdvaMed, two large hospital and business (read: medical device business) consortiums, seem to keep harping on patient safety, pay for performance, and medical error reduction as ways to save costs, while not looking at the grotesqueness of their own partnership arrangements in the continuation of sky-rocketing healthcare costs.



Anonymous said...

The hospital only paid about $17,000 for the implants or less. Also the pharmacy charges are crazy. I wonder what the MD charge will be for 1hour of work.

Anonymous said...

That was a zinger! Good for you, Dr. Wes...

Anonymous said...

Not terribly surprising.

Anonymous said...

One hour of work. That's a laugh anon. What doc who took care of this patient has put in only one hour of work. As the anesthesiologist doing fusions at my institution I would have had 6-8 hours continuous work; often without so much as a pee break. The surgeon of course works the same, but also in his global fee is responsible for all post-op care; followup in hospital or in the office is all without additional charge.

What to cut is obvious; the implants, nuts, bolts, screws, rods, that ain't a whole lot fancier than other mass produced specialty parts have a fantastic margin for the manufacturer. The guy in the OR who earns the most on spine day is the manufacturer rep hovering over the equipment trays counting his percentage.

But in a free market you can't cut below what the seller is willing to sell for. The bottleneck is in the FDA requirments for the equipment (and patent rights) that prevents any specialty metal shop from producing high performance hardware. Further, any new corporation would have to have a huge capitalization just to afford the insurance because back patients have a high rate of generating lawsuits.

So go where the money is. Reducing the hardware bill by 10% is better than getting the surgery for free.

Anonymous said...

Mr anon2,is that 6 to 8 hours of hard work ? Did you get to read a the complete novel or are you supervising 6 rooms and charging in all the cases? Go dig some postholes today then get back with us and tell us how hard your job is. Be careful and not pull your back out on the first hole because jobs like that dont have ins. You get fired on the spot.

Anonymous said...

Fusions are hard work. It takes me anywhere from 4 to 8 hours, depending on the circumstances. That is time spent standing, wearing a lead gown, concentrating, and alternating between delicate dissection and wrestling with large tools and implants. I cannot to more than one in a day or two in a week. I find them very stressful because you are leaving a permanent, easily reviewed, and easily criticized record of your work in the implants. Any problem, and these patients often have complaints, any you are open to a whole industry of lawyers and "experts" who will comment on your screw placement. I don't know what the surgeons in your area get for this. My reimbursement from medicare is less than $2000. That includes three months of postop care, and these patients require more attention. Those outrageous costs are largely going to the equipment manufacturer and the hospital.