Welcome to US Health Care 2.0. I named the blog this because we are on the edge of a huge change in the way health care is addressed, and more importantly how we as a nation allocate resources toward our citizen's health care.
According to the American Hospital Association, US Health Care is in crisis. They use the word "broken". As a nation, we spend over $1.6 Trillion a year on our health and are the least healthy nation of the developed nations. That dollar amount equals about 18% of our Gross Domestic Product, and by all estimates, will only increase to much higher levels.
Some studies say US Health Care will double by the end of the decade, others give it a little more time to double, but the result will be much more cost and expense in the future.
I was recruited to help market a start-up business that directly relates to the current inefficiencies in US Health Care, which has brought me into a world I had no idea existed. In the past, I used to have employer provided medical insurance benefits that had low visible costs. My premiums were deducted from my paycheck along with all the other things like stock purchase and retirement contributions. I had no real idea as to the cost of the overall policy, I only could relate to the relative pricing options at enrollment time, usually in mid-October, and forget about it until another year.
And that is exactly what we have now. The consumer is still not the entity seen as the purchaser of health care. The entity which provides the check to the hospital, doctor, lab, is seen as the customer. Unfortunately, the cost of insurance premiums are starting to become so high, many US workers are unable to afford insurance, proper insurance, or insurance with the ability to cover high deductibles.
The individual now has to step up to the plate to shoulder some of the economic decisions as to how to choose health care among the different options available. With that comes the need for clear, concise and accurate information about the true cost of medical procedures.
But, there is the problem we as a nation have about medical pricing information. It is almost impossible for the individual consumer to obtain it. Without honest information, no legitimate decisions can be made. In effect, the current environment of US Health Care shows itself to be controlled marketplace. My thesis is that the unnatural and unrealistic traits of US Health Care is a major contributing factor to its broken status.
The second part of this blog is to track the progress of a start-up company as we move it from just out of the gate to, hopefully, a major player in Health Care Audit and Accounting.
The parent company to which I refer is Southwest Medical Bill Review & Recovery. Southwest Medical Bill Review & Recovery is about 6 months old and launched our initial marketing efforts about a month ago. Part of the blog will relate to the overall situation of how the broken US Health Care system migrates toward something else while the other part will refer to the migration of Southwest Medical Bill Review & Recovery as a viable operation.
The most fortunate thing the company has is no payroll. All of us who are working to make this run are doing this on the side of some other ventures or work. It is being run out of different houses with only real expenses are for communication, web site hosting, printing and mail. With no overhead expenses, we can address our strategy toward the primary objective of getting contracts.
Would a venture capitalist like to invest in us? I doubt it, and I don't think there is any need or desire for funds. We are trying to get to that point of being real first.
When I say "real", I don't mean we are faking this project. I mean "real" in the terms that our name will inspire some emotion to our clients, the companies we audit and marketplace in general. We are real in terms of having already conducted hospitalization audits for patients and have discovered unbelievable overcharges!
According to a study by Equifax, over 90% of all US hospital bills are in error. Subsequent studies have found that errors range from 15 - 25%. When one does the math for all charges across the US for hospitalization and the amount of errors, we find that consumers are being overcharged, at minimum, $200 Billion! TWO HUNDRED BILLION DOLLARS A YEAR! Now, does that sound like an efficiently operating industry?
One hospitalization Southwest Medical Bill Review & Recovery audited was a 4 day stay by a close family member. I was shocked about every step of the way. First, I was shocked how difficult the hospital made it to obtain full and complete medical records. The hospital refused in the beginning. After being reminded the records were the patient's property, they contested anyone would need to have it. Going round and round on that issue was frustrating until they realized we weren't about to back down in our request. Eventually, the hospital did send out the records, but they were incomplete, edited and almost worthless.
The second attempt almost had security remove us from the office because the clerk behind the glass was so upset from our request, we thought she was about to get violent. Still, she tried to keep specific articles necessary for a thorough audit out of our hands. Eventually, she gave in when we cited specific passages from HIPPA law code of 1996. At the end of our meeting, the hospital clerk was nervous, shaking with what appeared to be rage, and very flushed.
The billing showed some very unusual things, like a single IV application that cost $70,000. A little lower on the bill, the same IV drip was charged $47,000. As we reviewed the audit, the actual medicine was shown to cost about $15,700 in the amount administered in the first application. Even allowing reasonable profit of 25% for the medicine, why was it overcharged by 446%?
And the list goes on and on and on with examples of outrageous overcharges. In the end, our insurance covered the bill. But, who is our insurance company? In this case, the coverage is from a large company that self-funds its health insurance plan. In other words, medical expenses for the employees are paid by a fund set-up and established by the company itself and that every dollar paid out for health care benefits comes out of capital. Corporate capital is funded by profits. If wasted dollars are being spent for 446% overcharges of medicine, it come out of the company's own profit structure.
Now, is it easier to understand how overcharging and medical inefficiencies impact a lot more than just the consumer? Medical expense waste is a huge toilet where we throw even larger amounts of money. As a result, I am learning to be very upset and afraid the issue is not looming larger on the minds of US citizens.
I will post more on the inefficiencies of US Health Care as we go along. I named the blog with a 2.0 designation in hopes we get to the next release voluntarily and based upon what we as a nation desires in health care. If we fail to change directions now, the future of this nation will be in pretty sad shape. Remember that!
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