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Tuesday, October 4, 2011

Medicare: A Garbage Scow of Cash...

A Garbage Scow
There is an abiding principle (or, rather, ignorance) within our government regarding people and their motivations.  As you know I have written before about the elderly and, in particular, my mom and some of the challenges they face with regard to healthcare.

The other day I found this gem in the WSJ.

The idea, ostensibly, is that instead of having elderly mom in the nursing home or hospital its far cheaper to have a visiting nurse come to her house.  The senior can stay in their home yet still have the help that they need.  There are three large companies in this business today: Amedisys Inc., LHC Group Inc. and Gentiva Health Services Inc.  They supply the nurses and bill Medicare for their services.

Only one small problem.

It turns out that, according to a Senate investigation, most of the services provided are the "high value" ones - at least as far as billing Medicare - very few of the "low value" ones are provided.

The problem here, of course, is not that you have companies working toward maximizing their income.

The problem is you have Senators who do not see the obvious flaw in the model which they themselves have create.

Years ago I knew a guy with a "bread route" in NYC.  This is a business where you get a load of baked goods from some company and then visit a variety of stores (convenience stores, grocery stores, and so on) at ridiculously early times of the morning to drop things off and collect money.  Some stores perform better than others and, of course, as the owner of the business, you want the stores that sell the most to get the best products.  Stores that sell less and less usually fall off the radar at some point because there is no value in serving them.  There is a natural ebb and flow to the winners and losers in this from the perspective of the "bread guy."

But look what the Senators have done to this model.

Instead of having a natural, market driven value for, say, nursing services they have instead created a faux "fixed price" value.  The visiting nurse goes from door to door - but instead of the market determining what sort of services might best fit someone the Medicare cost structure says that if you provide service "A" your get $100 and if you provide service "B" you get $10.

I wonder what services are going to be performed more often?


What did these Senate folks expect?  Are they stupid?

My mom recently had eye surgery, she's 81, and hired some private local company to provide helpers each day (she cannot drive until she gets the okay from the doctor, she can't lift above a certain weight, and so on).

The "folks" that come are young women - 19 to 30 or so - mostly who have left jobs in nursing homes.

They get paid for whatever they do directly by my mother.

(Each of these women tells a variety of horror stories about nursing homes and senior care.  All are most pleased to be in a job where they are not part of that system.)

Now imagine if these women were to get paid regardless of what they did or did not do or, worse yet, could decide whether my mother got the got service "A" for $100 or service "B" for $10 just by checking some box on a form.

Since my mother, in the case of Medicare, would not be paying and would, due to ridiculous secrecy laws, never be allowed to even see her own medical or billing records - what sort of service would she "get" from a company like this?

Certainly not the $10 one...

Now who are these government idiots setting up systems like this which are designed to enhance fraud and corruption?

The current members (according to this site) are Thomas R. Carper, Robert Menendez, Bill Nelson, Maria Cantwell, Debbie Stabenow, Charles E. Schumer, Ron Wyden, Jim Bunning, Pat Roberts, John Ensign, Michael B. Enzi, John Cornyn, Blanche L. Lincoln, John F. Kerry, Jeff Bingaman, John D. Rockefeller, IV, Chairman Max Baucus, Ranking Member Chuck Grassley, Orrin G. Hatch, Olympia J. Snowe, Jon Kyl; Not Present: Kent Conrad, and Mike Crapo.

The problem is that these companies are blamed for what's going wrong - but they are not to blame (yes they did wrong - but wrong like a child left in the driver's seat of a running car by an irresponsible adult).
People "follow the money" and when you have a large group of "know-it-alls" setting up business mechanisms with no checks or balances which encourage making the most expensive treatments the default ones what do you expect except corruption?

If some 25 year old woman is standing in an elderly persons home she is not the CEO of the nursing company. 

She's the peon. 

With a boss, a bosses boss, and so up up to a real big-time CEO.  Certainly someone above her is going to be encouraging her to "do her best" for the company - because, after all, its her job at stake.  And poor old Mrs. X might need service "A" or "B" - it might not be completely clear to a peon - or her boss might have said "you'd better turn in more money or we'll fire you" or whatever... but you get the picture.

And bingo - the spawn of corruption.  Not even through malice or ill intent.

You see Medicare is a 1/2 a Trillion (yes Trillion) dollar enterprise annually.  A spigot of almost unimaginable size out of which flows an enormous percentage of our countries wealth.  Just like NYC dumping garbage at sea (a practice no longer followed today) its going to attract scavengers, bottom feeders and other undesirables just because its there, its visible for miles, and those overseeing the spigot are so small in comparison that they themselves really cannot tell where the outflow is going or how its being used.

And, like a NYC garbage scow, the more sloppy the operation the more the sea gulls and other bottom feeders will be attracted from far and wide.

But my mom, who is spending her own money, doesn't have this same problem.

Why not?

Because she is responsible for the money (because its her's) and responsible overseeing the results.

My dad, when he was alive, worked hard to ensure she would have the means she needed to get buy.

But the Senate Finance Committee didn't work hard for any of the Medicare money being thrown over the side of the NYC garbage scow.  They took that money from others - faceless nameless individuals who they will never see or meet or care about.

It's not their money to begin with so to them its just so many numbers on a page.  Unlike my mom who is frugal with the hard earned efforts of my father these clowns couldn't even reliably count the money they are spending if that were their only job.

The scavengers, bottom feeders, and so on snapping up the cash as it goes over the side don't care since its not their money either.  (These same bottom feeders ply the Senate with gifts and "lobbying" to ensure the spigot never gets smaller.)

These criminals are just working hard to collect some of that cash - after all its just floating there in the water waiting to be taken.  Put there by a clueless few who don't know the first thing about what they are doing.

The bottom line here is so simple...

The value of something you give to someone else is exactly what the receiver paid for it: zero.

So if this model corrupts visiting nurses - what about hospitals, doctors, and all the rest?

They're human too... and like the child left in the drivers seat of the running car likely to make similar mistakes...

My question is: Where are the parents?  Why are they so irresponsible?  Why are they unaccountable?


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  2. I try to highlight the concepts of "consequences" and "taking something to its logical conclusion" to delivering opinion and reporting news - which few do I am afraid - including our leaders.

    Most of the citizenry has no idea what these "consequences" might be nor any historical perspective on past failures in this regard.

    Yet most of what is wrong with the US is mired in the consequences of past bad decisions.

    Thanks for the compliment.