You want to know what the process is like for a physician to make a living as a physician?
Look only toward the Medicare Tomato. Imagine for the moment that you have been taken out of reality and into the alternate bizarro world of the Medicare Tomato. In this analogy, the Medicare Tomato represents a day in the life of a practicing physician.
You’re getting verrryyyyyy sleeeeepppppeeeee………….
I love tomatoes. They are one of my favorite foods. Buying tomatoes used to be easy. I would search the Sunday newspaper for the specials of the week. There are multiple grocery chains in my neck of the woods. There are multiple types of tomatoes.
The variety and quality are endless. Different stores offer different varieties. They try to differentiate themselves in quality and in price.
I have my pick of the tomato litter. I can go to any store I want.
I base my decision on price, geographic location, how the tomato looks and feels, and what I would use them for.
Life is great. I find a tomato I like for a price I consider reasonable. The store is happy. I am happy. I take my tomatoes, and I pay cash for my product. Sometimes I pay by credit card just to earn that extra 1% cash back.
One night I was awakened by a terrible thunder clap. A terrible storm had swept through over night. I didn’t think much of it. But the consequences of that brewing storm soon became obvious. That storm signified the end of the free market trading of cash for tomatoes, in which both customer and grocer were happy with the payment for services rendered.
Enter the massive government take over. A massive coup on the tomato market. By a midnight Congressional mandate, the destruction of the free market exchange of money for tomatoes was replaced and regulated by the Medicare National Tomato Bank (MNTB).
Tomatoes, by nature of their nutritional content, have been deemed a right for all Americans. By Congressional mandate, all Americans (and illegals) were given a Right to tomatoes. No American should ever be allowed to live without their tomatoes.
Wow, I thought. That’s great. I get free tomatoes for life. Life couldn’t be better. Born out of thin air was an entire nation of entitled tomato eaters. (ETEs) I was ecstatic. Somebody loves me, I remember thinking. However, that feeling of joy quickly faded.
Immediately after removing free market principles from the tomato market, the MNTB instituted the principles of most resistance. If something can be regulated, it will be. The word quickly spread through out this great nation of ours that the government would now make tomatoes a right for everyone.
The demand for tomatoes took off. Grocery stores everywhere were selling out. Nobody could keep tomatoes in stock. The grocery stores were ecstatic too. They simply sold their tomatoes and sent the bill to Uncle Sam. Uncle Sam sent them a check for their price of tomatoes. The grocers were happy. They sold out every day. The people were happy. They were getting free tomatoes. ETEs everywhere loved their Congress.
Unfortunately, the MNTB was not happy. They were footing the bill. And that bill was exploding. That $200 billion dollar tomato bill was quickly rising. Faster and faster. 10% a year. Year after year. The MNTB soon realized that they could not afford to continue paying for free tomatoes for everyone. In an effort to reign in the costs of the MNTB, Congress did something completely anti-American. They took capitalism out of the tomato market.
Cutting back on the benefits to the people was considered political suicide. How could these professional regulators, who promised tomatoes for ETEs everywhere; How could they ever back down. They could never ration the tomato consumption. They would be kicked out of office for even suggesting such a thing.
In their brilliant strike of genius, they decided to try something that had never been tried before in the world of capitalism. They would reign in the cost to the MNTB, not by cutting the demand (political suicide), but by instead instituting a policy of 80% payment of market prices.
By now, the people are happy. Their free tomatoes are safe. Their lives as ETEs live on. The grocers? Not so happy. They have just been taken to the cleaners. Their glorious tomato days have just ended. Instead of receiving just payment for a just product determined by market prices, a payment agreed upon between the customer and the producer, they have just been taken out of the loop. To the tune of an 80% payment rate.
This policy had a profound effect on the grocer’s mind set. No longer did they feel the desire to provide the best possible tomato at the best possible price. A price agreed upon between consumer and grocer. No longer did they feel the desire to offer a better tomato to compete with their grocer down the street. When the 20% cuts went into effect, the grocer’s responded by offering fewer tomatoes for sale. Gone were the hydroponic. Gone were the organic. The profit was leaving, and so were the choices of tomatoes available to the ETEs via the MNTB.
At 80%, they could still make a decent profit, so they sacrificed some margin for quality, in an attempt to keep market share. But as the MNTB soon learned, these false price controls did nothing to reign in the cost to the National Tomato Bank. Grocers responded by selling more technologically advanced super duper genetically modified purple tomatoes. The MNTB would pay for them, and pay at a much higher rate, considered a more valuable product via the relative value unit system (RVU) of tomato price controls, which was now in place to differentiate the value of each tomato.
While the benefit of these tomatoes over the cheaper tomatoes was suspect, the MNTB paid for them anyway, as part of the overall MNTB rules and regulations passed by the lifetime regulators known as Congress. What the MNTB soon realized was that the grocers were pushing far fewer of the cheap tomatoes and more of the expensive tomatoes.
Because they got paid more for selling expensive tomatoes. The MNTB got exactly what it paid for. In an effort to decrease costs, they actually got a high cost, low value tomato market, courtesy of the RVU system they signed off on. The cost to the MNTB exploded.
The volume of specialty tomatoes grew exponentially. As the grocers realized they could not make a living on the cheap tomatoes, they moved toward selling the expensive ones with marginal additional value. In response to the continued explosion of cost related to its cost controls, the MNTB did three things.
- They again dropped the payment rate to 50% of current cost for all services, including super duper purple genetic tomatoes.
- They set a sustainable growth rate where in the cost of all tomatoes to be paid by the MNTB would be set in stone, and determined by inflation and population growth
- They established a strict set of rules and regulations known as Evaluation and Management codes for the grocers to get paid by the MNTB.
The first response exacerbated the problem. Since the super duper technology tomatoes were paid at a higher rate, more and more grocers stopped offering cheap tomatoes. They simply removed the variety of product. They removed their rings of service. One product fits all.
The cheap primary tomato market was killed off. What remained was the expensive specialty tomatoes that continued to maintain a high value of importance, relative to the primary tomato market, to the MNTB. As the consumption of specialty tomatoes grew exponentially, the death of the primary tomato market simultaneously led to massive cost increases in the total cost of the MNTB program. The volume continued to explode, without so much as a brake on the demand. Because folks, tomatoes are a right, as decreed by the professional regulators.
Now, to make sure the groceries weren’t cheating the MNTB, the government instituted strict rules and regulations that had to be followed to get paid. Any deviation from those rules and the grocers risked fines of tens of thousands of dollars and jail time for defrauding the MNTB. Long gone were the days of submitting a bill and getting paid based on market prices.
Now you had to submit incredibly complicated paper work to get paid not what you were due, but what the MNTB says you were due, the rates set forth by the sustainable growth rate, as determined by the false economies of the MNTB. For each and every sale made to an ETE, the grocer had to submit to the MNTB a letter detailing the encounter the grocer had with the ETE.
This shall be known as the “progress note:”
A consumer came in today at 12:04 pm on March 7th, 2008. He did not complain of any tomato headache. He had no gas pains. He appeared to be in good spirits. He was not orange. His lips were drooling for a chance at free tomatoes. He appeared angered at the lack of options and declining quality. He was at one point found to be pointing and yelling profanities. He took 7.4 pounds of the super duper genetically altered tomatoes (verified by government scales) with a big fat giant grin on his face, yelling, “I ain’t paying for it”, all the way out the door.
By now, several years into the program, the grocers were tiring of the process. Every ETE that bought tomatoes, took the expensive ones. The cheap ones could no longer make a profit and the makers of the cheap tomatoes had all left the business. The payment rate of the cheap tomatoes had put all the cheap tomato growers out of business.
All that was left was the single brand of expensive tomatoes that the MNTB still considered beneficial to the public at large. It turns out that the lobby group for the special genetic laboratory that earned a profit in royalty for every genetic tomato sold; It turns out that they contributed $250,000 last year to the Congressmen who sponsored the MNTB program.
In a few short years, what was once a thriving market of choice and quality in the tomato market was dwindled down to a single choice of expensive, but marginally beneficial tomatoes, whose sole ability to prosper was based on the corrupt contributions of a few corporate talking heads in high places…
The grocers were mandated by law to make sure that ETEs, who missed their appointment to buy their tomatoes were contacted on at least 16 different attempts to make sure they were aware of the consequences of not consuming their tomatoes and the consequences of not complying with the healthy tomato initiative as set forth by the MNTB. The burden of life was fully placed on the grocers and personal responsibility and common sense was completely removed from the ETEs.
The grocers had to hire additional accountants to run the paper work. They had to buy additional equipment to track the tomato statistics. 10% to the bottom line for the billing and collections department. The overhead of the grocer sky rocketed. While the payment rate from the MNTB plummeted. The grocer was caught in a swirl of capitalistic cost structure with a socialistic payment model. It was not sustainable…
The ETEs would wait for hours to get out of the grocery store and home with their specialty tomatoes. As the costs to the MNTB continued to explode, the government thought of more creative ways to try and keep the entitled tomato market alive. It put the burden of tomato quality on the shoulders of the grocers. Once again, another cost to burden and another way to reduce payment. It created quality incentives which, were at first optional, but eventually would carry a negative payment structure. Do it or lose more money.
The state of the entitled tomato market was in shambles.
A low quality, low choice, over burdened, over regulated, over expensive cost structured had replaced a once thriving enterprise of choice and competition between grocers. With time, one by one, the grocers left the tomato market. Access to free tomatoes by ETEs was dwindling. No longer could the ETEs walk to the grocer down the street. They had to drive miles to see the government mandated access to tomato market. Known as the emergency tomato grocer (ETG), the MNTB created rules and regulations that forced this group of grocers to stay open at all costs. No matter what. And to accept the price paid by the MNTB.
The result was a massive influx of ETEs into these government mandated ETGs. The waits piled up. Hours and hours of waiting a day. The entitled would come from miles around to get their free tomatoes. They would come, even though they hand hundreds of pounds sitting in their brand new stainless steal top of the line fridge. They wanted more, and they would get it by any means possible.
Eventually, the ETGs closed as well, as the payment rates failed to fund the operating costs of the grocers. Even the mandated ETGs closed up shop. One day, even the super duper specialty tomato and its high payment rate couldn’t keep the grocers and the ETGs from doing the inevitable.
They all quit selling tomatoes. All of them. The groceries moved on to selling canned goods and dairy, which carried a cash only high margin profit. The ETGs closed down, causing the back up access for ETEs to collapse on its own weight. The public, so used to getting free tomatoes as their right, was suddenly found scrambling for alternative sources of their free tomatoes.
The grocer decided to go back to the way it was before. The tomato lover and himself. He would start to sell tomatoes again, but he would only accept cash or credit. He would provide a quality product at a reasonable price and let the people decide what price they wanted to pay. He got rid of the forces of destruction and allowed his customers to tell him once again what it was that they wanted.
The Medicare Tomato is the reality of health care delivery today. It is the backwards approach to the rationing of a service that is finite. There is no question about it. Health care is not an unlimited resource and the policies of rationing will always best be determined by the personal financial stake that everyone has in their health care. It doesn’t mean cash only or insurance only, or free care for all or universal access. It is a rational approach to demand control, whether that be means tested or income dependent. Whether that means balance billing or high deductable policies. Whether that means shopping for service and quality through price transparency. Whether that means strictly catastrophic insurance coverage. Whether that means tort reform to reign in defensive medicine. Whether that means judicious use of a gate keeper Medical Home model. What ever it means.
It does not mean price control.
You can’t control costs by controlling price. It will never ever ever ever ever ever ever happen.
Thanks for listening. I think I’ll go eat a salad.
*This blog post was originally published at A Happy Hospitalist*