Medical Malpractice News and Views

Welcome to our blog where we discuss current issues in medicine and law. We welcome your comments.

Prostate Cancer News.

December 13, 2018

The New England Journal of Medicine just published the results of a 30 year study from Scandinavia of the effect of radical prostate surgery on the risk of death from prostate cancer.  The study sample was 695 men, all of whom had their cancers detected clinically.  This means that the cancer was large enough to be discovered either by the patient or by the physician during examination.  The study participants were enrolled before the advent of widespread PSA testing.

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The study participants were divided into two groups.  Members of the first group underwent a radical prostatectomy, a surgery in which the prostate gland is completely removed.  This surgery has a number of unfortunate side effects, including a high risk of incontinence and impotence.  Members of the second group were monitored carefully for changes in their tumors.  This is called “watchful waiting.”  In the event there is a significant change in the tumor, the doctors will begin treatment.

The study concluded that for men with a clinically detected, localized prostate cancer, radical prostatectomy increased the length of life by almost three years.  The results need to be considered carefully, however, as they may not apply to most patients whose prostate cancer is detected today.  In the first place, in order for a prostate cancer to be detected clinically, the tumor must be a large one.  Since most prostate cancers are slow growing, a large tumor is usually one that has been in the body for some time.  With the advent of widespread PSA testing, most men who are discovered to have prostate cancer will have their tumors detected much earlier than the men in the study.  In other words, the men in the study had what we would consider today to be advanced prostate cancer.  Had they been discovered earlier and enrolled in watchful waiting, they may have received treatment earlier than they did in this study.

Secondly, the longer length of life was only enjoyed by those whose tumors had not escaped the local area and whose Gleason scores were low.  The Gleason score is a measure of determining the aggressiveness of prostate cancer.  A high Gleason score indicates an aggressive tumor, which is more likely to be fatal.  The same is true of cancers which had spread outside the local area by the time they were discovered.  Those patients also had a higher risk of death due to the prostate cancer, but not as high as those with elevated Gleason scores.

Because of these limitations inherent in the study, one of the lead authors, Dr. Anna Bill-Axelson, says surgery may be beneficial for those with high grade, aggressive tumors but active surveillance is a good alternative for those who are otherwise healthy and who have small, slow growing tumors.  The older you are when your prostate cancer is discovered, the more likely you are to die with it than from it.

Each of the big three prostate cancer treatments, radical prostatectomy, radiation and brachytherapy have a high risk of leaving the patient incontinent and incapable of having a functional erection.  For this reason, these treatments should not be undertaken lightly.  Many treaters suggest they be used only in younger men and then only if the tumor is aggressive and watchful waiting has failed.  As many articles have suggested, however, it is often difficult to explain to friends and family that you have prostate cancer and are only going to watch it for the time being.  Many men end up getting pushed by family and friends into aggressive treatment, which they later regret.

The general consensus among doctors who treat prostate cancer is that we treat too many men who don’t really need it.  If you are diagnosed with prostate cancer, take the time to consider your options.  Don’t rush into treatment.



Posted in Cancer, Doctors, healthy living, Prostate Cancer, prostate cancer testing |

Generic Drug Price Fixing.

December 12, 2018

“Generic” is the name given to drugs that are not protected by patents.  Anyone can make a generic drug.  Because they are not protected by patents, it is anticipated that competition will drive down the prices of generic drugs to the benefit of all consumers.  Anyone who has been paying attention to drug prices in this country knows that the opposite has been happening; prices of generic drugs have been skyrocketing.  Turns out the big generic drug manufacturers have been fixing prices.  Take a look at this story from the Washington Post.

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It is against the law in the United States for companies to get together and fix prices or divide markets or engage in any other type of anti-competitive behavior.  Of course, a lot of things are against the law but people do them anyway because it is a way to make money.  That seems to be what is happening here.  According to the prosecutors, there has been corruption on a massive scale among the manufacturers of generic drugs.  Since generic drug sales in 2017 were $104 billion, there is a lot of money to be made in keeping prices up.

There was a time when the generic drug market operated as intended due to principles of supply and demand.  Competition was described as cutthroat and it kept prices low.  But then a change took place.  Prices for generic drugs began to climb and climb quickly for no apparent reason.  Furthermore, it was not just the generic drugs of one manufacturer that were increasing in price, the competing drugs of other manufacturers were going up as well, seemingly in lock step.  Clearly, something was happening.

In the absence of collusion, when one manufacturer raised its prices, the other manufacturers should have seen an increase in demand for their competing drugs.  This would have forced the manufacturer who raised prices to either back down or be driven out of the market.  Law enforcement, consumer advocates and health insurers noticed and began to investigate.

In late 2016, the attorneys general of a number of states got together and filed an anti-trust suit alleging price fixing for two generic drugs.  As the result of information learned during the discovery process, that suit has gained the participation of more states and has grown to include over 300 generic drugs and 16 manufacturers.  Based on comments from those in a position to know, it would appear that the evidence against the manufacturers is strong.  In a parallel federal criminal case, two former executives of Heritage Pharmaceuticals have pleaded guilty and are cooperating the Justice Department prosecutors.

While the manufacturers deny any collusion, they offer no explanation for the sudden and dramatic increases in generic drug prices among companies that should be strong competitors of each other.

The whole thing stinks.  I have written about the lobbying power of the drug companies and the influence it has bought in Washington, D.C.  Your representatives in Washington don’t want to offend their campaign contributors by reining in prices.  It is instructive that the efforts to hold the drug companies accountable are being led by the states, despite this being a national problem that calls out for a national solution.  The states are stepping in because Congress won’t act.

There is so much money changing hands in health care that it is inevitable greedy people will look for ways to game the system and take money out of our pockets.  We have to be constantly vigilant to uncover their schemes.  Looks like these legal actions are a good start.  Watch this space.  I predict the generic drug manufacturers are going to have to settle.


Posted in drug companies, Fraud, Health Care Costs, Health Insurers, Lawsuits, Medical Costs, Medicare, Secrecy |

$13M Medical Malpractice Verdict in New York.

December 12, 2018

There is a lesson to be learned from every medical malpractice verdict.  A recent verdict in New York City is no exception.

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A 43 year old wife and mother of three underwent what should have been a minor procedure to remove a polyp from her colon.  The polyp was burned off using an electric cautery device.  Although he did not know it at the time, the surgeon burned a hole in the patient’s small bowel.  The hole allowed bowel contents to escape into the body.  Infection is almost always the result and that is just what happened here.

I frequently see cases in which there is an accidental injury to the bowel.  It occurs most often in laparoscopic surgery where the surgeon does not have the same ability to see the operative field as he or she does in an open surgical procedure.  Usually it is not medical malpractice to cause an accidental injury during one of these procedures.  An accidental bowel injury is a risk of the procedure.  However, because it is a known risk of the procedure, the surgeon must be careful at the end of the procedure to inspect the area and look for evidence of a bowel injury.  Even then the surgeon may not find the bowel injury and may send the patient home with bowel contents leaking into the abdominal cavity.

Because patients can be sent home with bowel injuries even when the surgeon has been careful during the procedure and even when there was no evidence of an injury during the end-of-surgery inspection, the surgeon must be alert for post-operative complications that could be the result of a bowel injury.

The patient here was in excruciating pain for days after the surgery and had to take lots of pain medication.  Although the newspaper story does not mention it, it is almost certain that her vital signs and lab values were abnormal.  These are red flags that should have caused the surgeon to order tests for possible bowel injury.  However, it was not until four days later that the surgeon ordered a CT scan of the abdomen which revealed the likely bowel injury.  Although the surgeon took the patient back for immediate, emergency surgery, the infection had progressed so far that she could not be saved.

The jury deliberated for less than a day before awarding $3M to each of the three children, whose ages were from 17 to 13, and $7M to the husband.

So what are the lessons to be learned here?  The first and most important is that the patient and the patient’s family must also be alert for the possibility of an unrecognized bowel injury following laparoscopic surgery in the abdominal area.  They should be alert for unexpectedly severe pain that does not go away.  If severe, unrelenting pain is present or there are any other signs of infection, they need to be proactive in insisting that something is wrong.  Don’t let yourself be put off with the reassurance that severe pain following these procedures is normal.  It is not.  Keep after the doctor and the doctor’s staff until something is done to rule in or rule out the presence of a bowel injury.

Bowel injuries produce infections.  If the infection is caught in time, all will be well.  On the other hand, if the infection is allowed to persist, it will enter the bloodstream and overwhelm the body’s ability to fight it.  When that happens, blood pressures crash and organs fail.  This is called septic shock.  Many patients, like the poor lady here, cannot recover from it.

Be alert.  Be proactive.  Don’t accept every reassurance, especially if you think something is wrong.

Posted in blood infections, Doctors, Infection, Lawsuits, medical errors, Medical Malpractice, medical malpractice cases, medical malpractice lawsuits, medical mistakes, Medical Negligence, Misdiagnosis, plaintiff, Sepsis, Surgical Errors, Verdicts |

Pulmonary Embolism

December 10, 2018

Over the years, I have handled a number of medical malpractice cases involving pulmonary embolism, often called “PE.”  Each case involved a needless death.  PE is an insidious and sometimes fatal condition that is sometimes missed by doctors.  Most of the PE cases I have handled involved a failure to diagnose.

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A pulmonary embolism is a blood clot that enters the lungs.  It usually begins with a clot in the deep venous circulation of the leg.  These clots are called DVT’s for Deep Venous Thrombosis.  The leg clot may throw off pieces, which travel along with the venous blood on its way back to the heart.  A piece of clot which is cast off is called an embolus.  When the clot and the venous blood reach the heart, they enter its right side.  From there the heart pushes them into the lungs, where the blood gives off its carbon dioxide and takes on oxygen before returning to the heart and being sent throughout the body.

When an embolus gets to the lungs, it continues to travel along with the venous blood.  The lung vessels through which it travels get smaller and smaller as the blood moves along.  At some point, the vessel is too small for the clot to continue and it gets wedged in the vessel.  Once it gets wedged, it acts like a dam.  It prevents any blood from getting past it to be reoxygenated.  What happens next depends on the size and number of the emboli.

There may be one piece of clot thrown off by the main clot in the leg or as many as hundreds in what are called “embolic showers.”  The clots may vary in size.  Some may be large.  Some may be quite small.

If the clot is large enough, it can block all flow of blood to the lungs.  These large clots, sometimes called “saddle” emboli, cause death within minutes.  There is never time to get the patient to the hospital for treatment of a clot this size and they die where they fall.  The larger the clot, the sooner it will become wedged and the more lung it will block.  On the other hand, if the clot or clots are small enough and few enough, the patient may never realize that there is a problem.

If pulmonary emboli are allowed to remain in the lungs and the patient does not die, the clot will eventually dissolve.  Even small clots may be fatal, however, if there are enough of them.  As small clots continue to shower down on the lungs, they gradually block more and more of the lung and the patient has a harder and harder time breathing until finally there is not enough lung left unblocked to sustain life.  These are the cases that cause unnecessary death.

Once a person has had a DVT, they are at increased risk to have another.  DVT’s are most common when someone has been inactive for a while and the blood in the legs does not circulate as it would if they were walking around.  Long air trips where a person is forced to remain seated with their legs below them have been shown to put people at increased risk for DVT.  Prolonged bed rest puts a person at increased risk for DVT.  If you are taking a long air trip, get up and walk around the cabin from time to time and keep yourself hydrated.

If you are having trouble breathing, see the doctor as you may have PE.  If your breathing gets worse and worse, you may have PE.  Ask your doctor about PE in these circumstances and, if you have it, hope he or she diagnoses it in time.  Good luck.

Posted in Blood Clots, Doctors, Hospitals, medical errors, Medical Malpractice, medical mistakes, Medical Negligence, Pulmonary Embolism |

More Doctor Secrecy Hurting You.

December 05, 2018

Many times I have recommended using the resources available to you to learn about your doctor before you allow him or her to make decisions that may affect you for the rest of your life.  At a minimum, you should look your doctor up on the web site of the Arizona Medical Board.  There is a lot of good information there about where the doctor went to school and what their area of medical specialty is.  You can also learn whether the doctor has been disciplined in the state of Arizona or not.  Unfortunately, there is a lot you cannot learn from a visit to the web site of the Arizona Medical Board.

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Discipline in other states.  You can’t learn whether the doctor was disciplined in another state.  All too often doctors are allowed to get in trouble in one state and then just move on to another with the public being none the wiser.  Here is a story from USA Today about the practice.  It amazes me that an entity charged by the state with protecting the public from bad doctors will allow a doctor who had to give up her license in another state to come to Arizona and just start over clean.  The public has a right to know.

As the USA Today article points out, you can inquire in other states, if you know your doctor practiced in another state and you know the name of that state.  As it also points out, there is a national clearinghouse which is supposed to have information about all doctors who have been disciplined in any state.  However, clearinghouses like this only work if every state is diligent about reporting its bad apples and many are not.  A doctor may also negotiate an agreement not to report his misconduct in return for an agreement to voluntarily surrender his license to practice.

Malpractice History.  When visiting the site of the Arizona Medical Board, you also cannot find out if your doctor has committed malpractice and has paid to settle malpractice claims.  That information is reported to the National Practitioner’s Data Bank but it is not available to the public.  You can find out if your doctor has been sued by checking the web sites of the Superior Court for your county but that won’t tell you whether the case settled or whether the doctor paid money or not.  As I wrote earlier in the week, doctors always insist on a Non-Disclosure Agreement when paying to settle malpractice claims so the public will not know that they have paid on a claim.

Doctor’s Experience.  You also will not be able to get any information from the Medical Board about the experience of your doctor.  Does she do these procedures often?  What training and experience does she have after leaving medical school or her residency that qualifies her to treat you and your problem?  There is nothing that prevents an eye doctor from deciding she can make more money in plastic surgery and holding herself out as a plastic surgeon, even though she has no training in that specialty.  You only find out about this and other experience questions by asking the doctor.  Don’t be shy.  Better to find out the doctor’s qualifications and experience before you get hurt than after.

Be an informed consumer.  It won’t guarantee you won’t be the victim of medical malpractice but it will give you the best chance of avoiding it.

Posted in Arizona Medical Board, disclosure of medical mistakes, Doctors, medical errors, medical ethics, Medical Malpractice, medical malpractice claims, medical malpractice lawsuits, medical mistakes, Medical Negligence, Secrecy |

Medical Secrecy and Non-Disclosure Agreements.

December 03, 2018

It seems the news has been full of stories involving Non-Disclosure Agreements, often called NDA’s.  Our President has one with an adult film actress, movie producers have them with actors and actresses, the soccer star Ronaldo has one with an accuser.  All of these agreements share a common feature: they involve a payment by someone accused of wrongdoing in return in part for an agreement by the person being paid not to discuss the events or the fact of payment.  So what do these NDA’s have to do with medical malpractice?  The answer is that, just like the people mentioned above, doctors and hospitals want their payments to malpractice victims to be kept quiet too.

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Non-Disclosure Agreements are not good for medicine or for patients.  They are not good for medicine because when mistakes are kept secret, no one can learn from them and doctors and nurses are doomed to repeat them over and over.  They are not good for patients because when you are choosing a doctor or hospital, you ought to be able to know if they have been accused of malpractice and whether there was a basis for the allegation.

When doctors and hospitals settle malpractice cases, they always insist on a Non-Disclosure provision in the Settlement Agreement.  Sometimes the Non-Disclosure provision is narrow and only prohibits disclosing the fact of payment and the amount.  Other times the provision is broader and precludes the malpractice victim from discussing the injury or the way in which the doctor or hospital caused it.  Either way the injured patient is often in no position to refuse to agree to silence.  He or she has been injured and wants to receive the money the doctor or hospital is willing to pay for the injury.  The only way to collect without agreeing to confidentiality is to go to trial and win.  That means more delay, more expense and a risk of losing, even when the doctor or hospital was clearly at fault.

On rare occasions, the judge in charge of a filed case will ask about the Non-Disclosure provision and will insist that it be removed from the Settlement Agreement on the grounds that it is contrary to the public policy of the state that settlements of court cases be open and transparent.  Most judges never ask about the terms of settlement and, even when they do, do not want to insist on a change which might torpedo the settlement.

As in almost all areas of medical malpractice, secrecy is the rule and transparency the extremely rare exception.  Doctors and hospitals rarely disclose their mistakes either to patients, to the Medical Board or to the public at large.  That they would disclose them when settling a case and actually paying something for a mistake is definitely expecting too much.  There isn’t a catchy Latin phrase for “Let the patient beware,” so I will leave you with the best substitute:  Caveat emptor.

Posted in Arizona Medical Board, disclosure of medical mistakes, Hospitals, medical errors, Medical Malpractice, medical mistakes, Medical Negligence, Secrecy |

The Problem With Drug Prices.

November 28, 2018

There was a good story in the Washington Post earlier this week discussing some of the reasons for our high drug prices.  So why are prices so high?  Why doesn’t our vaunted free market system drive them lower through competition?  While there are a number of explanations, they all revolve around the drug companies and the perverse incentives we have created for them to keep prices high.

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In the early 2000’s, insurance plans and hospitals created Pharmacy Benefit Managers (PBM’s) to negotiate with the drug companies for lower prices.  This would seem like a good thing.  Enter the doctrine of unintended consequences.  The drug companies immediately began gaming the system.  The PBM’s were paid on the basis of the discounts they were able to negotiate from the drug companies.  To deal with them, the drug companies raised their prices so they could give discounts without hurting their bottom lines.  So even though the PBM’s were able to negotiate discounts, the health insurers and the hospitals were not realizing any savings because they were still paying about what they were before the PBM’s came on the scene.

On top of that, the “savings” being created by the “discounts” negotiated by the PBM’s were being shared among the PBM’s, the insurers and the hospitals.  The public was not getting anything out of this shell game and was actually being hurt as some patients did not have drug coverage or, even if they did have drug coverage, were required to pay the inflated full list price until they met their deductible or had to make co-payments which were based on the full list price.

Other incentives for high prices are found in our patent system.  The drug companies are gaming the system there as well.  The patent system was designed to reward innovation by protecting it from competition for a short period of time.  The drug companies game the system by making subtle changes to a patented medication and then applying for a new patent.  They can keep repeating the process for many cycles.  According to the Post article, very few new drug patents are for new medicines; they are mostly for existing medicines to which some small changes have been made.

Drug companies also buy up what are called “orphan” medications.  These are medications for which there is no real competition because the condition they treat is uncommon.  The drugs are off patent and not much money can be made from them.  Enter the drug company which buys rights to an orphan drug and then jacks the price up.  New companies are reluctant to compete because there isn’t room in the market for two manufacturers given the small number of customers who need the drug.  Even if another company wants to come in and compete, it will take it at least a year or two to begin the manufacturing process and it has no guarantee that the company already selling the drug won’t drop the price and make it unprofitable for the new company.  The end result is that no one comes to compete and the buyer of the orphan drug forces everyone who needs it to pay through the nose.

The Post article also discusses some of the other reasons that drug companies get away with charging such high prices.  In the end, it all comes down to money and the lobbying power of the drug companies.  Time for this to end.

Posted in drug companies, Health Care Costs, Health Insurers, Hospitals, Medical Costs, medical research |

Why Does Medical Malpractice Happen Over and Over?

November 26, 2018

I have been doing some reading into the issues surrounding attempts to reduce medical errors and thereby reduce the incidence of patients injured by them.  Experts who study this problem agree that one of the biggest problems is that health care providers are reluctant to report errors.  When errors remain unreported, when malpractice is swept under the rug, the positive changes that come from addressing problems, from understanding what happened and trying to make sure it doesn’t happen again, those positive changes never have a chance to take place.

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So why are providers reluctant to admit an error?  There are a number of reasons.  Chief among them is fear.  Fear of admitting a mistake.  Fear of admitting failure.  Fear of being ostracized for that mistake.  Fear of being disciplined.  Fear of being sued.  All of these are reasonable fears but none of them solve our larger problem of not being able to address the error and do our best to make sure it does not happen again.

Again, those who study these issues say that we need to remove the fear.  Our institutions need to work collaboratively and compassionately in a non-adversarial manner to address the existence of errors and to devise ways to prevent them in the future.  They argue that institutions that monitor health care delivery, and these include hospitals and medical boards, must move beyond blame but must, at the same time, require accountability.  They must recognize that the primary goal is to develop structures, policies and procedures that will prevent repetition of errors in the future.

It is also imperative to recognize that no matter what we do, we remain fallible human beings.  As fallible human beings we are going to make mistakes and so are those around us.  I often find that a significant medical injury is not caused by a single error committed by a single person.  They are almost always the failure of a number of people or systems.  For example, a specimen sent to the lab for analysis produces a critical result.  If something isn’t done immediately, the patient may die or be badly harmed.  The hospital has a policy which calls for such results to be immediately reported directly to the nurses caring for the patient who are then to notify the attending physicians.  Someone in the lab fails to notice that the value was a critical one or notices it but forgets to call the nurse or thinks his or her co-worker has made the call.  When the lab report comes back to the floor, no one notices the presence of the critical value until it is too late or they fail to immediately notify the attending physician.  In this hypothetical situation, there is a policy in place to address critical values.  If a patient is injured, it is because human beings failed to follow the procedure.  At some point we have to realize that there aren’t enough policies or procedures in the world to overcome the fact that health care is delivered by human beings and that human beings make mistakes.

Although there will always be mistakes, that is no excuse for failing to work to recognize errors when they occur and to ask whether we have done everything we can to prevent them.  We are a long way from being able to say that we have done everything we can and the road to that place begins with recognizing and reporting errors when they occur.

Posted in disclosure of medical mistakes, Doctors, Hospitals, Lawsuits, medical errors, Medical Malpractice, medical mistakes, Medical Negligence, Nurses, Secrecy |

Hospital Consolidation Is Driving Up Health Care Costs.

November 19, 2018

Last week I wrote about hospitals not knowing exactly what their costs were for various procedures.  Without that information, they cannot make informed decisions about pricing.  Without informed decisions about pricing, there can be no price competition.  There also can be no price or other competition when there is only one hospital chain in the area.  As hospital chains have been merging and growing ever larger, the cost of medical care has been rising as competition has been dwindling.

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Supply and demand is the most basic rule of economics for determining price.  When supply goes down, the price of the good or service in question goes up.  When there is only a single supplier of a product or service, the situation is called a monopoly.  If there are only a few suppliers, it is called an oligopoly.  The monopolist and oligopolists can charge what they want for the product or service because they don’t have any competition.  This is why we have anti-trust laws to break up or prevent combinations which reduce or eliminate competition.

For a variety of reasons, there has been a surge in the consolidation of hospitals in the United States.  Here in Arizona we see Banner Health gobbling up other hospitals and building new hospitals all over the state.  Less than twenty years ago Banner was formed with only a few hospitals.  Now it has over 50,000 employees and hospitals all over Arizona and in Colorado, Wyoming, Nebraska, Nevada and California as well.  As reported in a recent article in the New York Times, hospital consolidation is a national trend and it has led in almost every instance to higher prices.

Although one of the arguments for consolidation is the elimination of unnecessary duplication and waste and the promotion of efficiency, it doesn’t seem to result in a decrease in prices.  As I have mentioned before, we patients are insulated from the actual costs of hospital and other health care by our insurance.  We have Medicare or Medicaid (AHCCCS here in Arizona) or employer-provided health insurance.  We pay a co-pay but our insurer sees the actual charges and must respond to them.  Some policymakers have argued that giving patients more “skin in the game,” more exposure to the actual cost of treatment, would help drive down costs.  I am not so sure.

Complicating the situation still further and driving up costs on its own is the trend for hospital groups to purchase the practices of physicians.  Your doctor used to be an independent contractor working for himself or herself, often in a group with similarly situated doctors.  Today, especially if you live in an urban area, your doctor is much more likely to work for a hospital chain.  The hospital chain may require your doctor to produce a certain amount of money for the chain, or it may set her fees, or may require a certain number of hospital admissions, or may require your doctor to admit patients only to the chain’s hospitals.  Some of these requirements may not be all that beneficial for you.

Interestingly, one of the justifications offered by hospitals for charging private patients so much is that they are the health care provider of last resort for those who have no insurance.  When people with no insurance get sick enough, they show up at the emergency department.  By law, they cannot be turned away.  They must be treated until it is safe to discharge them.  While they may leave with a large bill, the likelihood of the hospital ever collecting on that bill is very low.  The hospital reasonably and correctly points out that someone must pay for that care and that someone turns out to be you and me and any other patient who pays for treatment at that hospital.  The cost of treatment of those with no insurance is spread out over all of the hospital bills of all those who do have insurance.  Remember that the next time there is a debate about requiring everyone to have insurance.  Society is going to pay one way or the other for the care of those who can’t afford it on their own.

The hospital consolidation train has left the station and there is no way to bring it back and undo consolidation, even if we wanted to.  We may not want to because we have no good alternatives to it.  We need to explore other ways of controlling health care costs and getting good health care to all our citizens.

Posted in Doctors, Fee for Service, General Health, Health Care Costs, Health Insurers, Hospitals, Medical Costs, Medicare, Rationing |

Even Hospitals Don’t Know What Surgery Costs.

November 12, 2018

In August I wrote a post about why our health care costs keep going up and up and up.  We don’t dictate pricing to hospitals, we rely on the market to set a fair price using supply and demand.  Hospital consolidation, lack of transparency, and the existence of health insurance all contribute to prevent market forces from acting to drive prices down.  Our market based system is broken.

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Now it develops that there is likely still another reason why costs keep increasing: Even hospitals don’t know what it costs to perform a procedure.  In an article which appeared on the front page of the Wall Street Journal a few weeks ago, the Journal reported on a hospital that had been estimating its costs for knee replacement surgery and basing its list price on the estimate.  Of course, the hospital’s list price is just a starting point.  Hospitals and insurers or other interested parties negotiate down from the list price.

The hospital decided to find out what it cost to perform a knee replacement procedure, an operation done hundreds of times a year at this hospital.  It had efficiency experts monitor every step of the procedure from the time the patient arrived until the patient was discharged.  It learned that its actual cost was a little over $10,000.  Its list price, which had been based on an estimate, was a little over $50,000.  Significantly, the hospital discovered many inefficiencies in its process which were driving costs up.

For example, sometimes a bed on the orthopedic floor was not available following surgery and the patient had to be kept in the Post-Anesthesia Care Unit (“PACU”) until a bed became available.  The cost to the hospital of keeping the patient there was much greater than the cost of a bed on the orthopedic floor.  Furthermore, when the patient was in the PACU, the physical therapist could not come and begin rehabilitation exercises.  The sooner a knee replacement patient is up and walking, the lower the pain and the more quickly he or she can return home.  By keeping the patient in the PACU, hospital stays were being increased by a day.

The hospital discovered other places where it could be more efficient and implemented changes.  It was able to reduce its costs for performing knee replacement surgery by 18% and provide a better outcome for the patient in the process.   Truly a win/win.

It is a telling commentary on our broken system that even the hospital does not know what it actually costs to perform a procedure.  While this hospital now knows what it costs to do a knee replacement, it is still in the dark about its costs for the many other procedures performed under its roof.  A business that does not know what it costs to produce its product cannot set its price in a competitive marketplace.  Fortunately for this hospital and others, the lack of competition in offering surgical services means that there is no competitive marketplace.  We poor Americans just go on paying more than the rest of the modern world for exactly the same procedure.  It is time for a change.

Posted in Fee for Service, Health Care Costs, Health Insurers, Hospitals, joint replacement, Medical Costs, Secrecy |