Tuesday, August 16, 2016

High Costs of a Surgery

Some procedures are so complex that the recipient cannot be reasonably expected to "pay for" the procedure.  Most of our citizens don't really understand this.


Greg said...

No doubt Matt.

Take just about any transplant surgery, with maybe the exception of kidney transplants, and there is no way anyone can pay for all the technology and personnel that go into pulling it off successfully. Starting with the preparation; 1) all the specialists that are involved tuning you up so you have the best chance of survival. Mostly this is because if you have advanced enough liver disease or heart disease where you need a transplant, you already have other organ systems that are negatively affected and so you have cardiologists, pulmonologists, gastroenterologists, nephrologists and maybe even neurologists. For liver patients hematologists must be included as well 2) all the drugs which must be managed to prevent rejection and optimize your baseline state

Next comes the day of surgery; other than kidney transplants which are becoming pretty routine, organ transplants are multiple hours with likely transfusions of multiple blood products and then an ICU stay. The number of personnel involved in a procedure such as a liver transplant is 2-3x what is needed for a typical surgery.

Rehab is also labor intensive and takes many many weeks.

Almost no one can "afford" a liver transplant (outside of say Buffett etc) but at the same time we cant afford to only do these on people who can afford them. They wouldn't do enough to stay competent at them. If you want a chance to survive a transplant you want a guy who has done quite a few.

Ryan Harris said...

The US "spends" more than 17% of GDP on health care. Every other advanced economy spends between 9 and 11.5% of GDP on health care. The US has the lowest life expectancy of all these nations and outcomes for all of the top diseases and procedures are worse, with more mistakes, deaths, readmittances and just plain poor results.

"Heart bypass in the U.S. cost $75,345 on average, compared to $42,130 in Australia, the second-highest amount among the other countries. An appendectomy in the U.S. cost an average of $13,910, compared to $9,845 in Switzerland, which had the second-highest average."

Mo Money, Lower Quality. No matter how you spin it, that's not good. The government can always write the check, but as the medical industry spirals out of control and guys like Shkreli mark up drugs to higher and higher prices without adding any value, Doctors take home 20 times what other Phds earn and work half the hours, and the government pays, no questions asked... there is less fiscal space available for all those other priorities. Fiscal space is not endless, and of course, we could use every bit for medical care, that is a political choice. There is an argument that the US has an amazingly advanced health care system that is worth far more than all the other advanced nations on earth, but if true, why aren't the patient outcomes superior, but worse?

Matt Franko said...

It's all cost accounting Ryan it depends on how you do the accounting... Direct costs, overhead, G&A, etc.... It can look expensive "on paper"...

Matt Franko said...

99.999% of people probably never took an accounting class...

Ryan Harris said...

It's real money, real resources, real lives are destroyed by poor medical care. Cost accounting or not.

Greg said...


I agree with all you say except that Drs work half the hrs of most Phds.. In academic medicine it might be different (because of residents) but most of the private practice Drs in my area they work well more than 60 hours a week and have to be available 24/7 when on call

My own feeling is that we are great at disaster care. We are terrible at health care. Much of the complications like readmits and poor outcomes has to do with the poor baseline state of our specimens. Out of control obesity, diabetes and heart/lung dz makes many people very poor surgical candidates but we do it anyway because getting them to the proper baseline state isn't possible in the time allowed. The incentives are all wrong in our system. Most US patients needing surgery are in a much poorer state of health than other advanced nations, but we accept that because.... freedom! We want people to have the freedom to kill them selves slowly with poor diets and sessile lifestyles.

Ryan Harris said...

All true, Greg.

Most Docs do work pretty long hours, get paid well though, on average.

There are lot of issues wrapped into healthcare. Your comment makes me think about how un-walkable many of our neighborhoods are. The simple act of walking to and from places rather than driving makes a big difference in obesity and fitness, but like so many of the issues that you pointed out that also cause poor health, there is little public consensus, and hence a government that doesn't plan, promote or regulate these public interest issues for one reason or another. Democracy in-action.

Tom Hickey said...

Having known some physicians, it appears to me that most work hard and don't bank the outsized incomes that many suppose. Yes, a few at the top of the profession that deal with the top tier do make a bundle, but most aren't in that cohort. Many are well paid but they earn it not only in what they do but also the long years of study and training (internship and residency). Some of those who practice family medicine may not well paid at all, especially in poorer communities, generally rural. Compensation is somewhat uneven.

Medscape Physician Compensation Report 2015

The expense issues are not so much the doctors but plant and equipment, as well as pharma. Then there is admin. This is where a great deal of the expense lies, and it goes to the corporate sector than than the medical sector per se. Admin costs are high as well own to the reporting requirements.

The salaries of doctors can be be controlled through increasing competition by upping med school enrollment, but that requires investment in expansion of facilities. Physicians are also being supplemented now with nurse practitioners and physicians assistants, especially as the first line of defense.

Kaivey said...

I think that maybe psychologist PhD's are allowed to prescribe psychiatric meds in some parts of the US now.

All I can say is, thank god for the NHS. I have no concerns at all. Now for all that talk about capitalism and freedom, and all that BS, it's an enormous sense of freedom for me but to have to worry about any of this. Now that's freedom.

Greg said...


You are right about admin and corporatization of health care. One of the heart surgeons I work with relayed a conversation he had with a hosp administrator the other day; The administrator was "concerned" because last fiscal year the chest surgeons had done 411 cases and this year they were on pace to only do 362, a more than 10% decrease. The surgeon reminded him that he only does a percentage of what is referred to him by cardiologists and pulmonologists. Did he want him to operate on more people who dont need surgery?

The corporatization of health care is in stark opposition to the improvement of health. A situation where people are getting less heart dz or lung tumors, such that we are doing less heart and lung surgery, cant coexist with the current health care distribution model. It is frikken insane.

Matt Franko said...

"cant coexist with the current health care distribution model."

Its more like 'health care reimbursement model'.... people show up and get the care, then the issue is how the organization gets paid for the services provided... Medicare? Medicaid? Private Insurer? the patient? nobody?

Tom Hickey said...

That's where a lot of the needless cost is, Matt, and why single payer is much more efficient.

Plus they can't even get the billing right all the time because the doctors don't submit the correct code and either the wrong party gets billed, like the patient, and then has to call the provider to fix it.

This happened to me a couple of years ago when my yearly check up was refused by Medicare and then by my Blue Shield supplemental because Medicare didn't cover it. So I began by calling Blue Shield. They said there was nothing they could do since they only covered what Medicare approves and to call Medicare. So I called Medicare, and they were very nice, telling me that the visit is actually covered but that that he seems the providers submitted the wrong code and I should call the provider before submitting a Medicare appeal. I called the billing department of the provider and they told me that only the physician can change the code, so I should contact the physician and straighten it out, which I did, and she fixed it and then everything was OK. Of course, I didn't get to bill anyone for my time.

Greg said...

I used the term distribution because the way an area gets to provide a service is to do enough of something in order to get approved for reimbursement. To start a heart program, usually as a backup for cardiologists who want to do angioplasties/stents, a certificate of need is requested by the institution. So once you get it the pressure is on to maintain your numbers. There is no effort to actually minimize heart dz. The institution providing the heart surgery will try and expand its reach to take patients form other hospital service areas and if they cant they risk being shut down if the numbers fall off too much.

Tom Hickey said...

Sounds like the prison system too, as well as the quota system in law enforcement.

Roger Erickson said...
This comment has been removed by the author.
Roger Erickson said...

"It's real money, real resources, real lives are destroyed by poor medical care. Cost accounting or not."

Poor "Health Process Management" accounts for an order of magnitude more waste resource diversion than health "care" itself.

Last time I looked, a key budget ratio was this:

all 29 NIH Institutes - ~$30Billion/yr
food producer ADVERTISING budgets alone - ~$85Billion/yr

what's the economic term for "swamped" ?

This is very much like arguing over the most efficient engine rebuild methods, AFTER failing to filter or change gas/oil/air intakes.

If we did health process maintenance anyway like we do car/truck fleet management, there would be far stricter controls on "fuel" additives?

The VW diesel scandal? Peanuts compared to the neglected food-additive ignored scandal.