More than one physician has said that a license to practice medicine is a license to steal. After nearly thirty three years of practice, I can assure you that truer words were never spoken. From Maine to California and from Washington to Florida, from the mountains to the prairies to the oceans white with foam, it is true. The medical system has become one run by money and, primarily, motivated by greed.
When Medicare and Medicaid were passed, it ushered in a financial bonanza and free-for-all that today completely dominates the health care system. Within a very short period of time, I think it was five years, the costs of the Medicaid program in New York State alone exceeded the twenty year projection for the entire country. You have to read that again to appreciate it.
Beneficiaries were given carte blanche to seek medical care. Physicians were given carte blanche to give it. It was a recipe for runaway expenses. Patients abused the system and physicians exploited it. The tales have become urban legends.
Store front medicine in the ghetto became a joke. Enterprising physicians opened up offices in store fronts in high welfare districts. Within a short period, some hustling physicians were seeing a hundred patients, and even more, daily. With the income they generated, they then purchased more medical equipment and started performing more and more expensive tests. Throat cultures, blood tests, x-rays, EKGs, breathing tests, etc. were ordered with abandon. Incomes skyrocketed and along with them, the costs of the program. Some medical providers, actually wandered around skid rows getting derelicts to sign claim forms and they received payment for medical visits.
Some of the stories of physician incomes are legendary. Medicare and Medicaid have always sent out their payment, or settlement checks, every two weeks. One physician at our small hospital in Rhode Island once purchased a brand new Cadillac Eldorado and a Pontiac Grand Prix with one Medicare settlement! The settlement, in essence, was for two weeks work. He worked mostly in his office and did very little hospital work which has always been the most remunerative. Personally, he was an obnoxious boor and if I ever needed medical care, I’d wouldn’t have gone to him on a bet but he made money as a lot of office based guys did. And the hospital based guys saw an opportunity and got in on the take, too.
To understand how they did it, you have to know about the organizational structure of hospitals. The medical staff consists of the physicians who determine the qualifications necessary for granting of privileges to new physicians who apply for them. Any new physician has to go through an application process to be permitted to perform certain services. The decision to grant or refuse privileges for various procedures are usually submitted to the department heads, usually specialists, that normally perform those procedures. They can place any requirements before the privileges are granted that they want. The decision to grant or withhold various privileges can make or break a physician. For years, that’s exactly what was done.
It sounded good on the surface to turn to specialists who were trained to perform the procedure under consideration to determine qualifications but there was an interesting side effect. They wound up being the only ones who were permitted to do most of the work. They effectively excluded a lot of family physicians from hospital work. Sometimes it was simply greed but often it was just due to sheer spite, vindictiveness and personality conflicts.
Our small teaching hospital had a surgical residency. The first chief of surgery trained a resident and, for years, refused to grant him surgical privileges. It’s part of the zero sum philosophy. Anything you get is less for me. Nothing like limiting the competition. If it works for teachers, trade unions and the post office, why not for medicine? Even today, many teaching hospitals have a disclaimer in their application form that states that training at the hospital does not guarantee that privileges will be granted after the residency is finished.
Another trick was to require a specialist consult on all admissions. That was the case at several hospitals that I worked at. That way, if a general or family practitioner wanted to admit a patient, an internist or a surgeon, often the chief of the department or one of his cronies did the consult. Their incomes skyrocketed.
The gold rush didn’t stop with physicians. Hospital administrations got into line to get in on the take. It was a tailor made opportunity for them and for it you have to understand the nature of administrators.
There isn’t an administrator in creation who is not an imperialist. Administrators have to expand their influence and power. It a survival mechanism.
One of the very first things a new hospital administrator does is assess the power structure. Then he tries to become an ex officio member of any committee even remotely associated with his hospital, to offer his ‘support’ which usually consists of conveying his inside information slightly before it becomes known to the general public. Thus he can impress the committee members who ooh and aah, ‘this guy is really in the know’ and embellish his position at the top of the dung heap, and a dung heap a hospital power structure surely is. Pretty soon, like the government, he has his tentacles into everything and at some point, he takes on assistants. At that point, there’s no getting rid of him.
Once you develop a network of assistants, your position and security become much stronger. Medicare and Medicare opened a huge number of opportunities. Within ten years of passage, the administrative staffs of most hospitals tripled or even quadrupled. The eyes of all but the most jaded CEO gleamed. Their incomes headed for the stratosphere.
Then, we had the insurers. In just about every state, Blue Cross and Blue Shield, we call them the Blues, were the obvious choices for the role of the fiscal ‘intermediaries’ for Medicare. They were the administrators for the program and they played to role with relish. You see, programs like Medicare represent money and, with it, power. Power to any bureaucrat is like heroin to an addict; there’s no such thing as enough. And, of course, they are all administrators at heart.
Blues, that for decades had made do with headquarters limited to a floor in a downtown office building, after a few years of Medicare were able to construct entire buildings for themselves, sometimes two and three. Today, Rhode Island Blue Cross/Blue Shield is one of the largest employers in the state. It’s power has exploded and it’s the same story in every state.
And just think. You’re paying for it through your taxes and your insurance premiums. But there’s more to come.
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”