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Efficiency Gone Astray in Health Care

Our medical system defines efficiency as maximizing revenue-generating care. This compromises clinical interactions and indeed access to care, as highlighted in today’s excerpts. Single payer defines efficiency as eliminating wasteful non-clinical tasks and paying fair prices … to achieve universal access to high quality care.

June 3, 2023

Twitter post (video 2 min)
Dr. Mark Lewis
May 28, 2023

This son of a preacher man worries that he’s losing both the spirit of medicine and the identity of the patient when we reduce clinical encounters to measurable (and, not coincidentally, billable) “value units”

This Nonprofit Health System Cuts Off Patients with Medical Debt
New York Times
June 1, 2023
By Sarah Kliff & Jessica Silver-Greenberg

Doctors at the Allina Health System, a wealthy nonprofit in the Midwest, aren’t allowed to see poor patients or children with too many unpaid medical bills.

Many hospitals in the United States use aggressive tactics to collect medical debt. They flood local courts with collections lawsuits. They garnish patients’ wages. They seize their tax refunds.

But a wealthy nonprofit health system in the Midwest is among those taking things a step further: withholding care from patients who have unpaid medical bills.

Allina Health System, which runs more than 100 hospitals and clinics in Minnesota and Wisconsin and brings in $4 billion a year in revenue, sometimes rejects patients who are deep in debt, according to internal documents and interviews with doctors, nurses and patients.

Although Allina’s hospitals will treat anyone in emergency rooms, other services can be cut off for indebted patients, including children and those with chronic illnesses like diabetes and depression. Patients aren’t allowed back until they pay off their debt entirely.

About 20 percent of hospitals nationwide have debt-collection policies that allow them to cancel care, according to an investigation last year by KFF Health News. Many of those are nonprofits. The government does not track how often hospitals withhold care.

Comment by: Jim Kahn

Efficiency is good. That view is integral to my identity as a health economist. By efficiency, I mean the ability to achieved agreed-upon goals with the fewest possible resources, via minimized waste. Put differently: to maximize reaching our goals with the resources we have. In health care, to raise access to care and reduce disease.

Yet in today’s health care system efficiency is used in the service of revenue and profit. Provider organizations are adept at using “relative value units” (the payment unit for outpatient care) and aggressive billing practices to maximize revenue. Even not-for-profits adopt these industry norms and practices. The result is reduced time with patients and, as we see with Allina, denial of care access. This harm affects physicians too: burnout from intense work conditions and the moral hazard of providing suboptimal care.

My colleague, retired gastroenterologist and long-time single payer advocate John Roark, puts it very well: “Business profits have commandeered something that’s laudable. Corporations, rhetoric aside, aren’t really interested in other things. It’s much more likely that with single payer the health care system would make a more honest attempt to treat human beings as human beings.”

Right on, John. Treat human beings as human beings, not revenue centers to be pursued and cost centers to be shunned.

About the Commentator, Jim Kahn

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Jim (James G.) Kahn, MD, MPH (editor) is an Emeritus Professor of Health Policy, Epidemiology, and Global Health at the University of California, San Francisco. His work focuses on the cost and effectiveness of prevention and treatment interventions in low and middle income countries, and on single payer economics in the U.S. He has studied, advocated, and educated on single payer since the 1994 campaign for Prop 186 in California, including two years as chair of Physicians for a National Health Program California.

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