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 | | From: | Mike | | Subject: | Productivity in the Healthcare industry | | Date: | Sat, 25 Dec 2004 18:20:43 -0600 |
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 | One of the hallmarks of the US economy is the rising productivity of US
workers. This is one of the reasons that inflation has been moderate.
One obvious exception is healthcare. Healthcare costs have been
steeply rising year after year. Why is this? What are the blocks to
improving productivity in the healthcare industry?
How would you weigh the contribution of the following factors to
slowing the rise of productivity in the US healthcare industry?
1. Work rules.
2. State Regulation.
3. Federal Regulation.
4. AMA.
5. Litigation.
6. Insurance.
7. Lack of competition.
8. Lack of innovation.
9. Other (explain).
--Mike
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| | From: | Chris Gunn | | Subject: | Re: Productivity in the Healthcare industry | | Date: | Sun, 26 Dec 2004 14:27:35 -0600 |
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| On Sat, 25 Dec 2004 18:20:43 -0600, "Mike" wrote:
>One of the hallmarks of the US economy is the rising productivity of US
>workers. This is one of the reasons that inflation has been moderate.
Howdy,
You are looking at the wrong numbers. The US productivity has been rapidly
declining for over twenty years. The inflation is based on easy credit and
the average family debt exceeds what they can earn in a single year.
The cost of equipment and training are some of the factors but the number of
people who fail to pay their medical costs through bankruptcy ranks near the
top. A bankruptcy for a $5,000 hospital stay requires the hospital to
collect over $50,000 in fees to recover from it. The profits for any
business must exceed the number of uncollected fees or they go bankrupt.
We are very lucky to have any hospitals left.
Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator cgunn@bizynet.com - (850) 936-1234
Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others
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| | From: | Mike | | Subject: | Re: Productivity in the Healthcare industry | | Date: | Mon, 27 Dec 2004 11:56:59 -0600 |
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| Chris Gunn wrote:
> On Sat, 25 Dec 2004 18:20:43 -0600, "Mike"
wrote:
>
> >One of the hallmarks of the US economy is the rising productivity of
US
> >workers. This is one of the reasons that inflation has been
moderate.
>
> Howdy,
>
> You are looking at the wrong numbers. The US productivity has been
rapidly
> declining for over twenty years.
We are reading different reports. Alan Greenspan has reported often on
the surge in US productivity. See for example,
http://www.federalreserve.gov/boarddocs/testimony/2004/20040225/default.htm
>The inflation is based on easy credit and
> the average family debt exceeds what they can earn in a single year.
>
> The cost of equipment and training are some of the factors but the
number of
> people who fail to pay their medical costs through bankruptcy ranks
near the
> top. A bankruptcy for a $5,000 hospital stay requires the hospital
to
> collect over $50,000 in fees to recover from it. The profits for any
> business must exceed the number of uncollected fees or they go
bankrupt.
Studies that I have seen show that most people pay their bills. I am
sure that this varies by local. But for example, one documented case,
http://www.wisbar.org/res/capp/2003/02-1473.htm
states that 98% of the people paid their bills.
"5. The Physicians Plus group included seven clinics located in
Madison, Wisconsin (the "Madison clinics") over which the Foundation
assumed control.3 At all relevant times, approximately 98% of the
patients treated by the Foundation at the Madison clinics paid for
their treatment at prevailing market rates, using personal funds,
private insurance, or government programs to pay their bills. The
Foundation adjusted rates for and provided some free care to the
remaining 2% of the patients treated at the Madison clinics. Although
the Foundation adjusted its normal charges for these patients for a
variety of reasons (e.g., the patient's death, dissatisfaction with
services rendered, etc.), approximately 80% of the adjustments were
related to either the patient's bankruptcy or other circumstances that
rendered the fees "uncollectible.""
Are you saying that if public policy wonks found a way to cover
patient's bankruptcy that the upward spiral in healthcare costs would
cease?
My hypothesis is that there are structural problems that can account
for the lack of productivity increases in healthcare. In macroeconomic
terms, there are several factors that affect productivity:
a) Capital Equipment and the Saving-Investment Process
b) Productive Skills of People
c) Size of Market and Scale of Operations
d) Incentives to be Efficient, and to Work, Save and Invest
Of these, the last stands out. "With weak or no competition, producers
can become inefficient and charge higher prices." Why is there weak or
no competition?
Hypothesis 1. The AMA represents a monopoly that precludes competition.
This monopoly is supported by state and federal regulations. The
intersection of the regulatary process and the costs of litigation make
innovation difficult.
Hypothesis 2. The incentives favor a focus on acute care, not
preventative care. It would clearly be more cost effective to develop
a vaccination to protect against heart disease
(http://www.newscientist.com/article.ns?id=dn6825) than to pay for the
treatment of acute heart disease. Why isn't there a greater focus on
new treatments that reduce the cost of healthcare?
There are other hypotheses that one could generate.
>
> We are very lucky to have any hospitals left.
>
> Thanks, Chris www.bizynet.com and www.bizycart.com
> BIZynet Coordinator cgunn@bizynet.com - (850) 936-1234
> Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
> biz.marketplace.web-design, biz.marketplace.international & others
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| | From: | Chris Gunn | | Subject: | Re: Productivity in the Healthcare industry | | Date: | Thu, 30 Dec 2004 13:59:10 -0600 |
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| On Mon, 27 Dec 2004 11:56:59 -0600, in biz.healthcare you wrote:
>Are you saying that if public policy wonks found a way to cover
>patient's bankruptcy that the upward spiral in healthcare costs would
>cease?
Howdy,
It might help a little. It's only one of many factors including simple
human greed. I also know that the more controls government attempts to
impose, things will get worse.
Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator cgunn@bizynet.com - (850) 936-1234
Moderator of biz.healthcare, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others
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