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A Large and Quite Worthless Healthcare Cost

Posted Jan 14 2010 8:48am

There are ten factors that drive the cost of healthcare . Two of those ten deliver value to patients. The other eight do not. This post is about one of the eight worthless healthcare expenses: regulatory compliance.

I just finished one of the multiple, required-by-law-for-all-providers annual compliance training sessions. I had to review a Powerpoint presentation containing 36 slides and then take a test of ten questions. This took about one hour.

Every health care provider in the nation is required to do what I just did. Considering only nurses, doctors and allied health personnel, this translates roughly to 6 million hours. If you arbitrarily assign a cost of $50/hour, this one single compliance task (without adding the costs to develop and deploy the presentations) spent $300 million dollars for what?

The public believes that obeying healthcare regulations accomplishes three valuable tasks: it protects them, improve their outcomes, and reduces errors. This may seem logical, but as David Webber repeatedly warns, “Logic is a way to err with confidence.” The self-serving logic that Washington bureaucrats use to justify the trillion dollar regulatory industry is not backed by evidence .

Doctors are required to make evidence-based decisions. Why aren’t politicians held to the same standard?

The following assertions are neither author bias nor exaggeration. They are simple, well-documented and amply proven facts.

Patient Outcomes
According to the module I just studied, three elements of regulatory compliance must be monitored: “ Audit of Billing; Medical records review for documentation; and Review of business practices.” Patient outcomes were never, ever mentioned. Indeed, it is prohibited to monitor any PHI (personal health information), meaning it is against the law to track patient outcomes.

My hospital just had its dreaded review by the Joint Commission on Accreditation of Hospitals. The regulators looked for evidence of non-compliance such as: use of (prohibited) doorstops and surge protectors; boxes or files within 18 inches of the ceiling; use of improper or obsolete forms; and any other failure-to-comply by the providers. Patients and their outcomes were never mentioned.

Instead of being a learning tool for how to deliver better care and a disseminator of best practices, the entire regulatory machine exists solely to punish miscreant (out-of-compliance) providers and institutions. This provides job security for bureaucrats, raises costs, produces defensive medical practice, prevents providers from learning and probably fails to improve outcomes. I write “probably” because there is NO DATA on the effect or regulations on the welfare of patients.

Regulations are used as weapons of mass deception. Ignoring hyperbolic falsehoods uttered by politicians, regulatory compliance has nothing to do with making things better for patients.

Are we getting value for the hundreds of billions of healthcare dollars that go to the regulatory machine? The answer is easy and simple: I do not know, and much more important, neither do they!

Supporters of ObamaCare claim that healthcare reform legislation includes money for cost-effectiveness studies. This is a good idea in theory, but beware. The cost they will consider is next year’s budget cycle, not long-term net costs. When considering only the short-term outlay, the cheapest answer to any serious medical problem is…death. So if all they track is immediate cost and ignore the long-term as well as avoided costs, then the least care provided is the best, i.e., cheapest. That is just the way most “universal care systems” calculate cost/effectiveness.

In addition to measuring the wrong cost, most government supported health care research studies the wrong effects. They measure length-of-hospital-stay, lawsuits, mortality, and complications. No one measures effects we want: long-term health and complete restoration of health after sickness care.

There are no plans to study cost/effectiveness of THE largest cost item by far in the entire healthcare budget: the “ waste of the middle .” [] More money goes to the bureaucracy than to providers and healthcare institutions combined! What effect does the Public get for the money it spends on the bureaucracy ?

If health should be cost-effective,shouldn’t health care and healthcare also be cost-effective?

System MD

PS. For a chilling account of what could happen if current trends continue, read Daniel Putkowski’s 2009 novel “Universal Coverage.”

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