The Crockett Hospital’s Painful Demise

June 30, 2017 was a sad day for Crockett, Texas, our neighbor just 47 miles to the west. Little River Healthcare ended its management affiliation with the Houston County Hospital District that Friday, effectively shuttering the Crockett hospital. Nearly 200 employees are affected by the closure.

The simple sign taped on the front door said, “HOSPITAL CLOSED” and directed people to either call 911 in an emergency or to go to Palestine Regional Medical Center, the closest hospital 39 miles away.*

Though this seemed like a sudden event, in many ways it was a slow death over many years. The 49-bed Crockett hospital – most recently known as Timberlands Healthcare, under the management of Little River Healthcare since April 18, 2016 – had danced with several management partners over the last several years. Little River Healthcare didn’t even last 15 months. 

Prior to Little River Healthcare, CHC (Community Hospital Corporation) was brought in June 1, 2015 to run the Crockett hospital for an interim period after the hospital’s messy divorce from East Texas Medical Center (ETMC) in Tyler. ETMC ran the hospital for 10 years. ETMC claimed to have invested $27 million in facility and technology upgrades in Crockett, but for a hospital in the 21st century, that was a paltry amount when spread out over 10 years. 

So why didn’t Little River Healthcare succeed?

According to published news reports, Little River Healthcare blamed Blue Cross and Blue Shield for not paying $32 million it was owed; BCBS would not comment. Little River stated that when it took over the Crockett hospital, the hospital had been “cash flow negative for a long time,” but that they thought they could turn it around.

It was a helluva lot to turn around. Payroll alone was $1.5 million per month. To keep the hospital running in its current state would have cost $2.7 million per month. The Houston County Hospital District board had already increased property taxes to the max amount and even borrowed money in an attempt to keep the hospital afloat. 

LRH Co-Owner Ryan Downton was quoted as saying, “We came to the conclusion the patient volume just isn’t there in the town anymore.” The problem was not volume; it was reimbursement. You can double or triple the number of patients you see, but if you don’t get paid adequately, you are just digging a deeper hole.

Crockett is a dying town. According to the Census Bureau, its population is around 6,500 and shrinking. 39% of the population is living in poverty. Only half of those 16 years of age and older are employed. A mere 17.2% of the population 25 years and older has a bachelor’s degree or higher (and 22.4% don’t even have a high school diploma). 27.4% of the population under the age of 65 has no health insurance. In today’s medical climate, no hospital can survive with this demographic. No hospital district can squeeze enough taxes and reimbursement out of an uneducated, poverty-stricken, unemployed, and under- or un-insured demographic to keep a hospital afloat.

What happened in Crockett is, unfortunately, not unusual. At least 15 rural hospitals have closed across Texas over the last several years. Dozens of counties in Texas have just a single physician – or none at all.

I grieve for Crockett. My brother and his wife live there. I have had the privilege of treating many dear patients from Crockett over the years. We share a compassionate state representative, Trent Ashby, whose rural upbringing cannot be far from his mind in a situation like this. Trent has said he is “committed to working with all of the involved stakeholders to mitigate the loss of existing jobs and help move forward with a plan to increase access to healthcare in our area of the state.” I don’t doubt it one bit. But to be honest, there’s not much he can do. CHI St. Luke’s Health Memorial Lufkin leadership was over in Crockett even before the closing to assist some with employment, but even they can’t come close to softening the impact of nearly 200 jobs lost.

Ultimately, this falls far too heavily on the shoulders of the local Houston County Hospital District board to find a solution. They can’t pull money out of thin air or tax property any higher. And they certainly can’t get paid for healthcare when no insurance coverage or safety net exists. I hope the hospital district board can reassess and reallocate resources to focus on providing comprehensive primary care and prevention services to the citizens of Houston County, at a minimum. They also need to strengthen relationships with surrounding regional hospitals to provide higher level of care services where needed. 

Those of us outside Houston County need to open our eyes. Without a much deeper, systemic and national change in how we allocate and pay for healthcare in this country, what just happened in Crockett is going to be replicated in more and more communities around the country. Let’s help Crockett, but don’t think it can’t happen to us.

*Will Johnson, Senior Reporter for the Messenger News in Grapeland, and Caleb Beames with KTRE-TV have done an excellent job reporting on the hospital closure, and I am indebted to them for some of the details and quotes in this column.

A Truly Community-Wide Cancer Program

Every three months or so, I chair a meeting at CHI St. Luke’s Health Memorial in Lufkin of the Cancer Committee. As an accredited cancer program through the American College of Surgeons Commission on Cancer (CoC) since 1995, we have many different standards we have to meet dealing with quality of care and services provided. Our Cancer Committee – which is composed of the radiation, chemotherapy, and surgical doctors, radiologists, pathologists, and others (nursing, social work, etc.) involved in cancer care – is charged with maintaining a program that meets or exceeds the CoC standards.

There are around 1,300 CoC-accredited cancer programs in the U.S. This represents about 25% of hospitals. However, accredited facilities treat nearly 70 percent of recently diagnosed U.S. cancer patients annually. A multidisciplinary approach to cancer treatment is a key defining feature of accredited programs. In other words, do your cancer physicians communicate with one another and work together on a plan of care for you. The patient is the center and focus of care.

The benefit to you as a cancer patient is knowing that you are receiving quality and comprehensive care, close to home, with a complete range of state-of-the-art services and equipment. A multidisciplinary team approach ensures you are offered current, national guideline-recommended treatment options, including access to clinical trials if desired. Prevention and early detection programs, cancer education and support services are available. Some of these services are in the Temple Cancer Center (radiation treatment) or the East Texas Hematology and Oncology Clinic (chemotherapy), but others may be in local surgeon’s offices or even in the hospital.

Actual diagnosis and treatment of cancer is just the tip of the iceberg of a comprehensive cancer program. As I chaired our Cancer Committee meeting last week, I heard reports about all the great things we are doing out in the community related to cancer patients. Our community outreach coordinator, Tina Alexander-Sellers, presents cancer prevention and screening information to literally thousands of people each year at health fairs and industry and workplace events, educating our community on getting screening mammograms and Pap smears, smoking cessation, colorectal cancer screening, and even lung cancer screening for smokers at high risk for getting lung cancer.

We got an update from Sharon Shaw on the colorectal cancer screening efforts for under- and un-insured patients through the Angelina County & Cities Health District as part of a state grant in which we participate. Angie Whitley, our nurse over Women’s Special Services, detailed the number of low income women reached for mammograms and Pap smears through our state grant in her area.

Jay Gilchrist, our Vice President of Mission Integration, talked about CHI’s Community Needs Assessment and a new FQHC (Federally Qualified Health Center) branch office to be opened soon in North Lufkin, further expanding the healthcare options for our minority and underserved populations.

We discussed how we can meet a need we have in the community for more and better palliative care, which extends beyond just cancer patients and end-of-life care. Palliative care is focused on providing relief from the symptoms and stress of any serious illness, even while curative or aggressive treatment is being administered. It is a recognition that all patients and families want to maintain or improve quality of life even when dealing with a serious illness, not just when an illness is terminal.

The American Cancer Society representative, Daisy Drinkard, updated us on the impact the ACS is having by reaching patients through our oncologists at the East Texas Hematology and Oncology Clinic and at the Temple Cancer Center as well as through their strong work at the ACS office.

The Temple Cancer Center social worker, Apollonia Ellis, described how she is helping meet the needs of dozens of cancer patients already this year with navigation needs, be it transportation, lodging, or psychosocial and spiritual support. Our nurse practitioner, Kim Burnett, and oncology nurse, Madelene Collier, reviewed programs we recently developed dealing with genetic counseling and testing as well as cancer survivorship.

In addition, patients that are diagnosed and/or treated at CHI St. Luke’s Health Memorial in Lufkin are tracked and followed by our Cancer Registry, which has entered more than sixteen thousand patients since 1990. Our certified tumor registrar, Ginger Strange, can analyze patient data over the years for type of cancer, stage, treatment given as well as results.

As you can see, a comprehensive cancer program is about so much more than “simply” treating cancer patients, as if that alone was simple! Quality, multidisciplinary care includes recognizing and providing solutions for the needs of cancer patients both in and out of the clinic. I am proud of our truly community-oriented cancer program at CHI St. Luke’s Health Memorial in Lufkin. Kudos to all who are a part!

What I Learned in Medical School That Was Wrong

I recently attended my 30th medical school reunion at Baylor College of Medicine in Houston. It was a grand time of reminiscing and reconnecting with war buddies from the trenches of medical school. Part of our reunion weekend included lectures on current hot topics, such as the absurdity and danger of the anti-vaccine movement. But the lecture most of us were anticipating was on what we were taught in medical school that turned out to be wrong.

The topic itself was quite an admission from one of the most prestigious academic institutions in the world. I mean, everything science tells us is true, factual, indisputable, and remains so forever, right?

One example where the teaching of the time was wrong was peptic ulcer disease. When we started medical school, surgery for ulcers was common. Ulcers were thought to be caused by stress-induced excessive secretion of acid in the stomach. The surgical procedure known as antrectomy (removal of the distal end of the stomach) and vagotomy (cutting the nerves that lead to acid secretion) was performed basically to stop acid production. But this was not a small operation. Patients were often left with really unpleasant gastrointestinal issues such nausea, vomiting after eating, and dumping syndrome (abdominal cramps and diarrhea after eating).

What we now know is that ulcers quite often are caused by a bacterium known as H. pylori, which can be easily treated with an antibiotic – to kill the infection – and antacids. Not only was this revolutionary (and simple), but the medical establishment refused to believe it at first. There were many reasons, but it just didn’t fit what they thought they knew. It was, so they thought, a psychosomatic illness. And bacteria weren’t thought to be able to live in the stomach. The Australian doctor who co-led the discovery was so desperate to prove his theory that he even drank a cocktail of the bacteria to prove his point. History shows he was vindicated. The whole bacteria/ulcer connection was a radical idea at the time. Yet it was right, and the two who discovered it were awarded the Nobel Prize in 2005.

In my own field of oncology, there has been significant progress over the last 30 years. We now cure 70% of cancer patients compared with just 50% a generation ago. It was still a fairly paternalistic time in medicine. You didn’t question what the doctor told you to do. Physicians were taught – wrongly – that we should treat all patients aggressively all the way up to the end of life; otherwise, we would be taking away hope and devastating our patients.

In retrospect, it seems obvious that was a ridiculous and cruel assumption. Informed consent demands honesty. Hope cannot be reduced simply to wanting to live one more day at all cost, especially when ravaged by an incurable disease. What about hope for reconciliation with estranged family members? Hope for a pain and symptom-free death? Hope to die at home surrounded by family and friends, not alone in an ICU? Of course, now we have an entire field of comfort care/palliative medicine – including hospice care – to help with end-of-life symptoms and care.

Another example is less about what we were taught that was wrong than with what we just didn’t know. My class of 1987 started medical school in 1983. The AIDS epidemic was so new at that time that we didn’t even know caused it. The human immunodeficiency virus (HIV) – originally called HTLV-III, or human T-cell leukemia virus – wasn’t even called HIV until 1986. Fear and judgmentalism drove much of the public and academic response to this novel epidemic. We even had a classmate die of AIDS before the identification of the virus was made. These were scary times. With HIV/AIDS, we were living in and experiencing a time when urgent research and rapid discovery were needed to fight a terrible (and terribly misunderstood) disease. Our own fear and prejudice slowed that effort down.

I am curious what we will admit to being wrong about when the current medical school graduates have their thirty year reunion in 2047. Perhaps a brilliant discovery about Alzheimer’s, for example, will turn the medical world upside down. That is an illness where everyone would rejoice in acknowledging what we either got wrong or just didn’t know. Of course, more or unique discoveries in the field of cancer prevention and treatment would be welcome. In any case, we must be willing to admit that we don’t know everything there is to know today, and that we just might be wrong about some things. However, in today’s political climate I am not holding my breath to hear a mea culpa from the scientific community any more than when H. pylori was discovered. Maybe I’m wrong…

The Grass is Greener in Lufkin!

Sometimes our medical community gets a bad rap. In any community, there can be a tendency to think the grass is always greener somewhere else. This is true whether we talk about education, retail, quality of life, or in my case, medical care.

I have been accused of being critical of our local healthcare community. Perhaps my commentaries on healthcare in general, and the very real problems we all face, have been taken by some to mean I am not supportive of our local healthcare. Nothing could be further from the truth! 

Those who work with me know that I strive for excellence in all I do, and I expect the same from those who work with me. I have considered it an honor and a privilege to be part of this medical community for almost 25 years now, and had I not found this community to be welcoming, supportive, and high quality, I would not have stayed.

Think about it. We are a town of barely 35,000 people, and we have access to everything from neonatal intensive care to neurosurgery and open heart surgery. (Oh, and excellent cancer treatment as well!) These services are rarely seen in a town our size, and it happened for a number of reasons.

First of all, we are a destination for healthcare for patients coming from many surrounding counties. That give us an effective population of several hundred thousand - enough to support sophisticated specialties. Second, we have had visionary leadership from key physicians over the years. I won't try to mention all who have made a difference - there are many - but I do want to highlight just a few for what I see as having provided a significant and long lasting contribution to local healthcare.

Anyone's list would include Dr. Ravinder Bachireddy, a world-class cardiologist whose incessant focus on quality brought credibility and excellence to local cardiac care at a time when everyone in the state (indeed, the nation and the world) was headed to Houston. Along the same lines, Dr. Bill Shelton and Dr. Kavitha Pinnamaneni, in their respective radiation and medical oncology fields, made it possible for cancer patients to stay at home for outstanding cancer care, unifying many different physicians and surgeons involved in cancer treatment into a nationally accredited cancer program.

Dr. George Fidone's energy, intensity, vision, and incredible skill has brought pediatric care to virtually every child in the area. Our kids are healthier for it. Neurosurgery, neurology and stroke care are as good here as can be found in big cities, thanks not only to local medical leadership but also to philanthropic support. Robotic surgery has been embraced and mastered by our local surgeons and gynecologists to a far greater extent than our neighbor to the north or, frankly, most communities.

An early family practice pioneer, Dr. Anna Beth Connell led the way early on for women physicians to be not only allowed into the good ole boy network but also respected as colleagues. Women now make up the majority of medical school graduates and are coming to Lufkin in record numbers and in all specialties.

Finally, I cannot even begin to talk about healthcare without considering the incredible support of local foundations, especially the TLL Temple Foundation and the Kurth Foundation. Their contributions can hardly be totaled or their impact measured. We struggle at a national level to figure out how to care for all people, but that burden has been significantly lowered at the local level by the incredible generosity of our foundations. For that, I am eternally grateful.

Sometimes we all need a reminder of how green the grass is right here in Lufkin and Angelina County, and what a privilege it is to have the healthcare community and resources we have. Next time you see a local doctor, nurse, or other healthcare professional, thank them for living and working here!

What I Would Like to See in Healthcare Reform (Part 2)

Last month, I wrote about the bloated, incredibly inefficient federal bureaucracy that eats up hundreds of billions of dollars annually in administrative costs. I mentioned that Obamacare was not, in my opinion, true healthcare reform and did not address these inefficiencies; rather, it simply added people to the rolls of a broken system.

In this column, I am not intending to argue for or against Obamacare or whether we “repeal and replace” or go with “Obamacare Lite”, whatever that might be. I am simply pointing out areas where I see daily a burden for both patients and providers. My dream would be for simplification of much of the process of valuing, coding, and billing for healthcare services. Whether any of these thoughts are achievable or affordable, I don’t know.

Let’s start with that dreaded hospital bill. Medical billing is indecipherable. Even patients with advanced degrees can spend hours trying to interpret the bill they receive for a hospital stay. And that bill is obscenely higher than what either the hospital or the providers are going to get paid. What’s ironic is that bill often has no correlation with the actual cost of the care received or the value that the federal government (or the insurance company) places on that care. We must simplify how we charge for medical care and how hospitals and providers get paid. Unfortunately, the only patients who get stuck with the full, inflated bill are those without insurance – the ones who can least afford to pay it. That is unethical.

The overall cost of care (and your bill) is determined by coding every aspect of care, from the Kleenex and bedpan to the heart valve. For every cancer patient I treat, there are dozens of separate codes submitted for reimbursement covering all different aspects of planning, designing, QA’ing, and delivering treatment. I have no doubt that much of that could be combined into, say, a fixed reimbursement for treating prostate cancer. The problem is, when the government wants to bundle procedures together, they do it to cut overall reimbursement immensely. We still do the work; we deserve to get paid. Why can’t we work out a way to simplify, cut administrative costs, and make it a win-win both for the providers and the payors?

Along the same lines, consider a simple office visit to the doctor. The complexity required to determine whether I get paid a level 2 or level 3 office visit – which reimburse only $25 and $50 – is outrageous. These so-called Evaluation and Management (E&M) codes – and there are many of them – are based on four different possible levels of complexity of three aspects of the patient encounter: history, examination, and medical decision-making. Take history, for example. The proper level of complexity is determined by the presence or absence of documentation for four sub-elements: chief complaint, history of present illness, review of systems, and past, family, and/or social history. Do you see where I am going with this? Documentation of these encounters (consultations, follow up office visits) often takes longer than the encounter itself! And, any "error" in billing is considered fraud and abuse. It is common to hear patients complain that their doctor never looked at them, but was always looking at the computer screen. We need to simplify coding and put physicians back face-to-face with their patients.

Then there is the ever-increasing burden of deductibles and co-pays. We have such a mishmash of healthcare plans, each with their own deductibles and co-pays, that it is virtually impossible to keep it all straight. At the beginning of every year, doctors’ offices and hospitals cringe. Did a patient change insurance plans, or did their insurance lapse? What about the deductible for the new year? What about co-pays? More than half of Americans have less than $1,000 in savings. Deductibles for individuals enrolled in the lowest-priced Obamacare health plans will average more than $6,000 in 2017. Can the majority of Americans afford that? Certainly not! This is an unfair burden both on patients and on providers, who end up providing that care for free. Why? Most of it gets written off, but only after we spend a lot of personnel time and effort proving we try to bill for what we can’t collect in order to avoid the appearance of fraud and abuse. Those patients who are forced to pay may rack up credit card debt, get sent to a collection agency, and/or go bankrupt. Some go without the care they need rather than add to their debt. I truly believe co-pays and deductibles are a vestige of a bygone era. I would like to see the dollars saved by decreasing the administrative burden of healthcare go to actually paying hospitals and providers what they deserve and earn, and do away with co-pays and deductibles. There should be one price for a procedure or encounter, and that cost should be paid 100% by insurance.

What about insurance companies? In the best of circumstances, they pay fairly and quickly. But too often they can and do delay patient care and prevent patients from getting the care they need in a timely manner, if at all. They do this through a process called precertification or prior authorization (read: denial). And sometimes when they do give prior authorization, they still deny payment. This ought to be illegal. But it happens without recourse because the state insurance regulations are written in favor of the insurance companies. We need to loosen the precertification grip on the practice of medicine, and we need to be able to hold insurance companies accountable to their agreements. A preauthorization is a contract to pay.

The two hospitals in Lufkin (Woodland Heights Medical Center and CHI St. Luke’s Health Memorial) have spent tens of millions of dollars on electronic health records, not to mention what individual and group physician practices have spent, all mandated by the federal government. To what end? This was supposed to be about “quality”, but that emperor had no clothes. There is precious little improvement in communication between providers and hospitals than before electronic health records. The various doctor’s offices use a number of different vendors, and each hospital uses their own separate vendor. None of them share information with each other. I dream of a truly universal electronic health record language with seamless interconnectivity between offices and hospitals, but I sure don’t want to live through the incredible expense, time and effort it would take to get there. But I do dream.

Finally, let’s talk about rights. I have never felt that free or universal healthcare was a “right”. Hear me out. No one has a "right" to healthcare without some responsibility. That responsibility may be in purchasing insurance, but that is not the only way to contribute. The most glaring, but not the only, example is smoking. Half of long-term smokers will die of a smoking-related illness. If you smoke, the rest of us are burdened with some (or all) of your healthcare costs. On average, a pack of cigarettes in the US costs a smoker $5.51, while the combined medical costs and productivity losses attributable to each pack are approximately $18.05, according to researchers. This is where consumption taxes are attractive, but only if the tax truly goes to help offset the cost of healthcare. How we balance rights and responsibilities in healthcare is a good subject for a doctoral dissertation.

As well all hear about and read about proposed healthcare changes over the next year or two, look for what they are really trying to change, and ask yourself, are they really improving the system, or are they just trying to squeeze more people under a broken umbrella? Can they do both? Let’s hope they try.

Support Raising the Smoking Age to 21

The 85th Texas Legislative Session is in full swing. On Wednesday, February 15, a bill was filed in the House by Representative (and physician) John Zerwas (R) to raise the smoking age in Texas to 21 (so-called Tobacco 21, or T21 for short). A companion bill has been filed in the Senate. This is truly a bipartisan effort and is a great idea. For decades now, the legal drinking age has been 21. Tobacco kills far more people than alcohol, and almost all long-term smokers start smoking before they reach the age of 21.

Deep East Texas contains the lowest ranked counties in Texas for health outcomes, and part of that is due to our higher smoking rates. Nearly 90 percent of adults who smoke started smoking before the age of 18 and nearly 100 percent started by age 26. 18- and 19-year-old smokers are a major supplier of cigarettes for younger kids, who rely on friends and classmates to buy them. Raising the smoking age to 21 can help decrease our smoking rates as well as save tax dollars on future healthcare spending related to tobacco use.

Speaking of tax dollars, annual Texas health care expenditures directly caused by tobacco use amount to a whopping $8.85 billion, and we taxpayers bear part of that cost. The State Medicaid program’s total health spend as a result of tobacco use is $1.96 billion. No, we can’t save all of that, unfortunately, unless no one smokes. However, Jeffrey Fellows, PhD, in a Center for Health research report wrote, “Increasing the smoking age to 21 [in Texas] would result in 30,500 fewer smokers after three years, and lead to $185 million in reduced healthcare expenditures and productivity costs over five years. Lower cigarette excise tax revenue of $3.4 million would reduce the 5-year net savings; however the state would still generate a net financial savings of just under $182 million.”

It isn’t just about dollars; it’s about lives, too.

The Institute of Medicine predicts that smoking prevalence would decline by 12 percent if the national minimum age of sale was raised to 21. One of their models also predicted that raising the national minimum age of sale to 21 would result in approximately 223,000 fewer premature deaths, 50,000 fewer deaths from lung cancer, and 4.2 million fewer years of life lost for those individuals born between 2000 and 2019. Smoking kills.

In case you wonder if the tobacco companies think this will work, here’s a quote from a 1986 Philip Morris report (one of the largest suppliers of tobacco products worldwide): “Raising the legal minimum age for cigarette purchaser to 21 could gut our key young adult market (17-20) where we sell about 25 billion cigarettes and enjoy a 70 percent market share.” To the tobacco industry, it is always and only about market share and profit.

Raising the smoking age to 21 isn’t the only answer to our smoking and poor health epidemic. Many cities and even entire states have gone smoke-free. Texas needs to. Dietary and exercise components of good health also need to be emphasized. But if we can lessen the number of the next generation who start to smoke simply by increasing the smoking age of to 21, why wouldn’t we? That’s right… there is no good answer. For a healthier Texas and Angelina County, support Tobacco 21.

What I Would Like to See in Healthcare Reform (Part 1)

I often tell people that if all I had to do was take care of patients, life would be grand. It is the countless hours of dealing with the administrative aspects of healthcare that have practically ruined the practice of medicine for many physicians. You should care; it takes away from our time with you.

TheHill.com, noted that physicians and their staff spent over 15 hours per week complying with quality reporting requirements and that for every hour a physician spends with patients, an additional two hours are consumed completing administrative tasks related to the visit. This meaningless (to physicians, anyway) work has costs in both time and money, leads to burnout, and is increasingly mentioned as the reason for early retirement. I, for one, found myself daydreaming in a committee meeting the other day and I calculated that it was 3361 days until my 65th birthday. That's 9 years, 2 months, and 15 days. No, am not planning to retire early, but sometimes I sure wish I could. Healthcare needs reform.

The average person thought Obamacare WAS healthcare reform. In reality, Obamacare did nothing to actually improve the healthcare system; it simply added more people to the rolls. Don't get me wrong. Having more people insured is not a bad thing. But we need more than just additional enrollees in a broken system.

After Trump was elected, there was an initial, overly optimistic assumption that Obamacare was on its last leg. Recent infighting among policy makers suggests Obamacare may be more like the proverbial cat with nine lives. I only hope true reform is part of whatever "replacement" or "repair" Congress and the President come up with.

In particular, let's hope some of that reform will significantly scale back a bloated, paranoid bureaucracy that sucks hundreds of billions of dollars out of healthcare that could go to those who actually care for patients. And, perhaps, some could go back into the taxpayers' pockets.

Back in 2012, Berkshire Hathaway CEO Warren Buffett called healthcare "the tapeworm of the American economy". To be more accurate, the federal government is healthcare's tapeworm. In an online article in Medical Economics last year, Ryan Gamlin, who studies what drives inefficiency, waste, and harm in U.S. healthcare, found that "as countries spend a larger percentage of their healthcare dollars on administration (as opposed to public health, or providing patient care, for example), things get worse for patients and healthcare providers. High administrative expenditures seem to be associated with negative experiences of providing and receiving healthcare." That is a nice way of saying there's a ton of money wasted going to paper pushers.

Helen Adamopoulos, writing in Becker's Hospital Review in 2014, noted that US hospital administrative costs account for more than 25% of hospital spending, more than double that of Canada, for example, where hospitals receive global, lump-sum budgets. In contrast, US hospitals must bill per patient or DRG (diagnosis-related group), requiring additional clerical and management workers and specialized IT systems. They also have to negotiate payment rates with multiple payers with differing billing procedures and documentation requirements, driving up administrative spending. Not to mention all the personnel, time, and IT required to satisfy CMS’s (the Centers for Medicare & Medicaid Services) monstrous appetite for "quality" and "safety" data, with the ever-present threat of fraud and abuse hanging over every unintentional misstep.

What should be a simple process of billing for services provided is a minefield. And anyone who has ever tried to understand a hospital bill knows it is an impossible task. Aliya Jiwani, writing in BMC Health Services Research, notes that billing and insurance-related (BIR) administrative costs in 2012 were estimated to be $471 billion and that fully 80% of this spending, which provides little to no added value to the healthcare system, could be saved with a simplified financing system. Jiwani predicted that greater use of deductibles under Obamacare will likely further increase administrative costs, stating, "Empirical evidence from similar reform in Massachusetts is not encouraging: exchanges added 4% to health plan costs, and the reform sharply increased administrative staffing compared with other states."

A CNBC report of a Health Affairs study tagged the extra administrative costs of Obamacare at more than a quarter of a trillion dollars, an average of $1,375 per newly insured person, per year, from 2012 through 2022. The Health Affairs blog authors reported, " The overhead cost equals a whopping 22.5 percent of the total estimated $2.76 trillion in all federal government spending for the Affordable Care Act programs during that time."

What do I wish we could be different in our healthcare system? In March, I will discuss some specific changes that would reduce the administrative burden on healthcare providers and, in many ways, return us to a simpler, more direct, and frankly better transaction of healthcare.