More Myths Around Healthcare

[UPDATE]  Michael Steinberg, a contributor to SeekingAlpha, had a write-up on the front page this morning about the WSJ piece, which I have to say was worse than the original article.  This is the classic example of someone hearing/reading a story with only partial facts and a lot of assumptions about a subject that they know very little about, and ultimately making conclusions from these misinformed stories lacking any real facts. 

This reminds me of Barrack Obama talking about healthcare.  He has been told one side of the story of our nation’s healthcare system, but he does not understand the big picture.  I have to even give it to Hillary Clinton, who as someone with much more experience than Obama, has taken the time to learn where the problems with the US healthcare system really lie and realistic ways that we can improve it.  Further, she developed a policy, which she has worked on for years (i.e., didn’t jump on any bandwagon like her opponent) and has gotten 100% behind it.  Obama has waivered and changed his policy in attempts to please everyone, but in the end will deliver a failed policy to everyone. 

Steinberg’s comments are unfortunately what has become typical of people discussing issues within the healthcare industry.  In the same way that “big business” gets labeled evil and oil has become the source of sin within the current global marketplace, people lambast healthcare providers as money grubbing profiteers turning down dying patients who are attempting to get in the door for life-saving care.  This depiction of doctors is what is causing our healthcare system to struggle more than anything.  That, and people like Stienberg and the author of the WSJ piece that have no clue about which they speak. 


I have been a loyal reader of the Wall Street Journal for years now (since college), and I have never read anything worse than an article that I came across in the online edition today.  The article, Cash Before Chemo:  Hospitals Get Tough, represents the typical myths that have developed around the US healthcare system, which have only grown with the media furthering shotty information thrown around by Democratic presidential candidates about an issue they do not understand. 

Let me first say that I am not trying to sound tough against cancer patients, or any patient undergoing any therapy needed from a hospital or any other provider.  I think it is our obligation to make sure that any person who needs life-saving care should receive it without having to worry about how much money is in their bank account first.  In a world of a perfect healthcare system, no one would ever go into debt as a result of healthcare services that are needed to live, but unfortunately this happens everyday, the reason for which is that our healthcare system is far from perfect.

So, I don’t want anyone to think that I am not sympathetic; indeed, I am extremely sympathetic to all patients and I believe that every citizen and human, including legal and illegal immigrants, deserve life-saving healthcare services.  Further, I believe that this is a necessary item that we should cover with our taxes, certainly more so than much of the absurd expenses that our government appropriates our tax funds for. 

With all of that being said, our healthcare system is very flawed and the article attempts to place blame on hospitals while missing the point and completely overlooking a key area where the flaws in our system reside. 

The article ultimately highlights purported situations at MD Anderson, one of the most respected cancer treatment hospitals in the world, whereby payments from certain chemotherapy patients  where demanded up front. 

I take issue with the article for more reasons that I can even write about here, but the first thing that jumped out at me was the tone by which the author was making it sound as though before any patient can receive services from MD Anderson, they must all first write checks for $60,000 or more.  Obviously, this is not the case, but the author would have you think that chemo patients are living in boxes on the street outside the  hospital in Houston waiting to receive life-saving chemotherapy.  I seriously doubt that MD Anderson has ever turned down a patient that needs life-saving care because they did not have the ability to drop $100,000 for the care.  In fact, I know they haven’t done this, because that would be illegal, in the same sense that emergency rooms cannot turn down patients that don’t have insurance or are illegal immigrants, criminals or whatever.  MD Anderson, like most hospitals in the US, will not turn down a patient whose life they can save for any reason, especially financial. 

Here is the major issue with this article, though.  Due to the current nature of our healthcare system, hospitals, whether for profit or non-profit, have to maintain profitable margins, meaning they must make money, in order to stay afloat.  They are not like hospitals and clinics in the UK that directly receive funding from the government.  Hospitals in the US act as a business, the same way that Coca-Cola, Wal-Mart, or Google does.  Indeed, many US hospitals are owned and/or managed by publicly-traded corporations, which have a feduciary duty to shareholders to maintain profitable margins and value-added investment returns. 

Now, you can take issue with the system and/or those that have created it, but how can we blame hospitals that must make money to stay alive for providing services in such a way that allows them to be profitable.  The author in this article made it sound as though MD Anderson is evil for being profitable, adding funds to its endowment; however, this is the nature of the US healthcare system.

Furthermore, there is another part of the article that is even more ridiculous.  The author mentions the story of a women claiming that nurses at MD Anderson refused to finish started therapy, because the woman’s husband had not come back with proof of payment.  From the article:   

One day, Mrs. Kelly says, nurses wouldn’t change the chemotherapy bag in her pump until her husband made a new payment. She says she sat for an hour hooked up to a pump that beeped that it was out of medicine, until he returned with proof of payment.

I would put all of the money that I have in my investment accounts that there is not one nurse at MD Anderson that would refuse to provide life-threatening care because proof of payment wasn’t provided.  Can’t you just picture an oncology specialists saying, “Sorry, Ms Kelly, I would love to remove that IV and change out your $100,000 bag containing chemotherapy drugs, but I can’t do that until I see a receipt”?!?  Yeah right.  Give me a break.  I would guarantee that story is an outright lie, or at least a gross exageration of the facts at best. 

Not only is that ridiculous because it would be against everything that nurse has been taught in providing care, but it would ultimately cost the hospital more for keeping an uninsured (or underinsured) patient longer than was absolutely necessary. 

This shows you how little the author understands about the truth around the nation’s healthcare system and the business of healthcare in general. 

Another situation the article mentions, involving UCLA Medical Center goes like this:

Nataline Sarkisyan, a 17-year-old cancer patient who died in December waiting for a liver transplant, drew national attention when former presidential candidate John Edwards lambasted her health insurer for refusing to pay for the operation. But what went largely unnoticed is that Ms. Sarkisyan’s hospital, UCLA Medical Center, a nonprofit hospital that is part of the University of California system, refused to do the procedure after the insurance denial unless the family paid it $75,000 upfront, according to the family’s lawyer, Tamar Arminak.

The family got that money together, but then the hospital demanded $300,000 to cover costs of caring for Nataline after surgery, Ms. Arminak says.

UCLA says it can’t comment on the case because the family hasn’t given its consent. A spokeswoman says UCLA doesn’t have a specific policy regarding upfront payments, but works with patients on a case-by-case basis.

Let me get this straight … the family’s attorneys are claiming the hospital has done something wrong; however, they refused to give the hospital consent to respond, making them unable to even defend themselves in a one-sided story, which undoubtedly includes a gross exageration from a trial attorney.  Now, this situation sounds very horrible, in that the death of a family member is never easy to accept.  However, the largest problem our healthcare system faces is this exact situation:  torts where information is withheld,  making the amount of frivolous lawsuits increasing exponentially.  This ultimately is driving the cost of malpractice insurance for providers up so high, that many are having to go out of business, because they cannot afford it.  This problem trickles back down to the patient, because it drives up the cost of providing care, ultimately making it more difficult for patients to receive coverage and for businesses to provide healthcare for their employees.  It’s a horrible cycle, but the author of this article fails to mention that aspect. 

Another problem with the above story is that once again the author makes it sound as though transplant patients that have organ matches waiting for them are being turned down because they cannot pay for it.  I mean, come on … this is an outright disgrace. 

Overall, this type of story has become typical in the discussion of our nation’s healthcare, which have been dominated by people that have no clue what they’re talking about and are ultimately missing the far majority of the facts related to the topic.  They make assumptions and then the rest of the public only hear one side of the story, thus leading to more and more myths around the topic. 

It’s a horrible cycle of stupidity around the issue of healthcare in the US.  If you want to change it, that’s fine – let’s change it.  We absolutely need it.  As a taxpayer, I’m willing to pay more taxes to make sure anyone who needs life-saving care receives it.  Further, as an economist, I think this is an obligation of our nation to make sure people have access to basic healthcare. 

However, we cannot blame businesses for operating within the parameters of the system, whether it is flawed or not.  Indeed, if MD Anderson was to accept every single patient, paying or non-paying, they would lose money and ultimately go out of business,  ultimately causing a much bigger crisis.  If the government funded MD Anderson, or other hospitals, then yes, it would be wrong to turn away patients that hurt the hospital’s bottom lines.  But, the government doesn’t pay the hospitals.

Yes, this is a problem, but it is the system that is flawed.  This is where I think the UK system has done much better than the US at making sure their citizens have access to healthcare services.  Are their services at the same level of MD Anderson?  Absolutely not.  However, if I am a patient, I want to make sure I can get the services without worrying about going into debt, before my concern over having the world’s foremost doctor. 

These are ultimately things we must weigh, but under our current system, we can’t even do that.  However, we shouldn’t be crying afoul when hospitals are trying to operate efficiently in an overall inefficient system.  More on this later …



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  2. […] are wrote an interesting post today onHere’s a quick excerptObviously, this is not the case, but the author would have you think that chemo patients are living in boxes on the street outside the hospital in Houston waiting to receive life-saving chemotherapy. I seriously doubt that MD Anderson … […]

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