Medical Cost Cutting by Ted Bacharach MD (retired)

The application of industrial methods to cutting medical care cost seemed to make good sense. Doctors who were busy and had little desire to be administrators figured it would be best to let others do this type of activity. It did not take long before some of these money saving features intruded on the medical scene. I have tried to present a few of these money saving measures and how they have helped or hindered.
The first and simplest means of reducing cost is to increase number of units delivered. In the case of medicine this seemed simple and all that was needed was to have each physician see more patients. It was easily possible to schedule more patients per day for each physician. The result should have been less cost per visit. This did indeed happen but its effect on the overall cost of medical care had not been expected. The physician saw more patients but had less time to spend on problems. The amount of definitive care possible in a routine office visit decreased and the number of referrals increased significantly. Patients with multiple system diseases found it increasingly difficult to be fully heard.——-   The result was more patient visits were needed, more consultations were needed and repeat visits became more frequent because the patients problem had not been fully addressed.——— The overall cost was not significantly reduced and may well have been increased significantly.
One of the other measures that were administratively worked out was cutting hospital care costs. The obvious way to cut costs as to cut the number of days spent  in the hospital. If no IV’s were needed and monitoring was not needed the patient could be discharged. Another method that was to cut costs, was to assign a specific number of days for specific jobs. One method in which this was applied was to allow a specific number of days for particular types of service the hospital provided. By this means it was felt that it would provide a greater incentive for the hospital to make sure the patients were discharge as soon as possible. If they could be discharged in three days instead of the expected and allowed five days , the hospital would make more money. ——- The result has certainly been a reduction in hospital stays. More patients need further care and nursing homes or home care is needed. The other problem is lack of proper follow up for possible infections and no physical therapy which plays a major role in patient outcomes. Definitive care and required re-hospitalizations all contribute to affecting the economy adversely. ——–Another factor that had not been fully considered was that shorter hospital stays are associated with much nursing care and needs. I suspect that the overall cost per day has increased appreciably.
Medications is another costly problems. A variety of measures have been utilized to cit the cost of medication. The influence of the drug detail representative has been shortened or eliminated as much as possible. The prescription for 50 or 90 days is felt to be desirable.——- The result has not been great. Newer medications are not brought to the physician’s attention as soon as possible. While this may prevent the use of newer more expensive medication it also makes it difficult to try a medication for a day or two to see if the patient can tolerate it. Giving the patient 30 days supply may be somewhat wasteful in many cases.
I have no simple method of cutting medical care costs but I think it would be wise in the future to have physicians become involved in how medical problems can be addressed most economically.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  8 comments for “Medical Cost Cutting by Ted Bacharach MD (retired)

  1. RC Davis
    May 16, 2012 at 6:15 am

    Amen brother.

    We lost it in the 60s and early 70s, first with Medicare and then with HCA starting its baby administrator school, creating the whole ” hospital administrator” class, inorder to “help” with all that newly dictate paperwork.

    The camel’s nose soon grew and physicians went from the top of the pyramid to TGE bottom, with all the responsibility and none of the authority.

    Thanks for a sharply insightful article

  2. big picture doc
    May 10, 2012 at 5:48 pm

    Thanks so much for the laugh of the day.
    Physicians sitting on their fat butts, writing out fat prescriptions are going to save us?

  3. Elwood L Schmidt,MD
    May 10, 2012 at 9:31 am

    I would expand the last paragraph by saying practicing physicians in the areas, geographically and expertise wise, be included in planning. Big emphasis on actually practicing in those areas.

  4. Pat Nagle
    May 9, 2012 at 10:47 am

    Back on my hobby horse:
    Excellent summary, and again I’m struck by parallels in education. The same naive MBA attitude toward education said: “Gee, if we measure what we can measure in the classroom, that will describe the whole experience of education. It will be easy to spot the good or bad teachers. We can put 30-40 kids in the classroom with the good teachers, and all will be well.”
    Of course, the bottom line is not how can we do it better, but how can we do it cheaper, so we can continue to support the Defense(?) Dept and taxbreaks for the 1%.
    Those in the ivory towers of medicine and education ignore the same truth: Everything measurable isn’t important; every important thing can’t be measured.
    And as Dr. B. points out, the last ones consulted are the folks
    on the front lines.

    • May 10, 2012 at 4:16 pm

      Oh please. The Dept of Defense is a constitutionally-prescribed function, whereas the provision of health care (or educatin, for that matter) is not. You seem frustrated by a tool unable to perform a task for which it was never intended. Throw in a little of the ol’ class warfare – the top 1% paid 39% of all tax revenues in 2010 per the IRS – and you make an excellent case for getting health care out of the hands of centralized power and back to the “front line” folks – on the local level.

  5. Aaron Levine MD
    May 9, 2012 at 9:30 am

    When DRG came into existence in the mid 80s, it was touted as a success. An oped piece in the NEJM wondered, though, why there was an increase in post acute care activity such as home health, nursing homes, etc. It suggested more research

  6. May 8, 2012 at 10:32 am

    A nice analysis, Dr. Bacharach, of what’s wrong with using the business model to control health care costs.

    Forget the tug of war between those who think health care is a right and those who think it is not. That’s beside the point. It’s irrelevant. The real issue is that no health care for many is far more expensive for us all than providing some level of health care for everyone.

    Cut the tug of war between the gimme toddlers screaming “it’s mine and I’m not going to share it with you.” No one says we don’t have a right to police protection or fire protection. These “rights” get paid for, but not with the ludicrous business model the insurance companies and big business medicine are so invested in forcing upon the public.

    We don’t have any answers for reducing health care costs because no one, especially those getting rich off the business model, have any incentive to look elsewhere for how to pay for something everyone needs.

    • May 10, 2012 at 4:07 pm

      But Dianne, does that not also apply to the legions of entitled ravaging our economy? Because of the perversity of Medicare, many seniors as well are able to prosper with no care to the mounting deficit, unemployment, and spiraling health care costs. “Cut the tug of war”, sure…unless its election time.

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