Healthcare's Perfect Storm of Greed and Incompetence

October 16, 2014

Physician sellouts to hospitals, hospital cabals, clueless and complicit regulators, lawmakers, and reporters create a perfect storm of greed and incompetence.

As the U.S. healthcare system slips further into the cellar of metrics for quality and outcomes among the advanced nations of the world, and does it at more than twice the average per capita cost, healthcare providers, the government, and the press are patting themselves on the back for "progress" the American people should be tarring and feathering them for.

What has long passed the standards of a national embarrassment to a national outrage is drowned out by hundreds of self-interested factions including, and especially, Obamacare's regulators and policymakers, scrambling to preserve and grow their power and piece of our nation's ever more bloating $3 trillion healthcare money trough.

If this sounds like a harsh indictment, it is. And, the facts are immutable, mounting, and ever more disturbing:

• CMS is perpetually self-congratulatory even though their accountable care organization initiative is a dismal failure with half of the Pioneer ACOs actually increasing costs. Most have dropped out. They have failed to move the cost dial enough to do much more than mitigate a fraction of relative annual cost increases.

• Virtual hospital systems like AllSpire Health Partners, created through an alliance of 30 hospitals in the Northeast worth more than $10 billion, are banding together in "clinical affiliations," barely disguised fee-negotiating cabals, with whom Blue Cross Blue Shield recently announced it will not negotiate. Bully for BCBS.

• Then there are hospitals buying up physician practices as fast as they can to capture patient procedures and diagnostics, for which they are paid in multiples of that which independent physicians are paid. For example, in New Jersey, a hotbed of independent physician practice sell-outs, cardiologists are paid $850 (down from over $1,000) for an in-office nuclear stress test while hospitals get about $5,000 for the same exact study - performed by the same exact physician, who charges a professional fee.

• Then there is the ubiquity of routine practices such as "drive-by surgeries" where a surgeon will scrub in to "assist" the primary surgeon at the last minute and bill tens of thousands of dollars out of network to the hapless and uninformed patient. Every administrative and clinical healthcare professional has "war stories" of this type.

• Cap it all off with crushing one-size-fits-all regulation, over-reaction, and mindless enforcement of the same ilk that forced a 5-year-old first grader to sign a "suicide contract" with her school, promising not to kill herself or others for pointing a crayon at another student and saying "pew, pew."

Think that's a "man bites dog" story that doesn't affect you? The cost of regulatory compliance in healthcare exceeds 25 percent by the government's own estimation, or as much as $750 billion every year. About a third of that amount is mandated because a handful of bad actors send fraudulent bills, canoodle in conflicts of interest, and a few other nefarious activities. The recovery from those whom the system catches by all of this expensive regulatory compliance is a penny or two on the dollar depending on the year. That would be a whole $4.3 billion last year versus a quarter trillion regulatory burden, a record according to the U.S. Department of Justice.

All of this and Congress, the DOJ, CMS, and even the White House dog Bo can't get it together enough to enforce EHR companies to allow their systems to talk to others as federal law requires, much less stop them from extorting outrageous fees, which federal law frowns upon.

It took just a few quality minutes with Mr. Google on a free hotel Wi-Fi connection on a Saturday morning to dig this up. Imagine what a professional journalist, regulator, or political aide could uncover with just a brief break from Candy Crush.

My suspicion is, however, that they already know.

The question for the American people is: Why is this allowed to continue?