September/October 2002
HEALTH BYTES

Why it's easier to check into a hotel than a hospital

By Marc Ringel, MD

      Have you stayed at a hotel lately? How was check-in? If your experience was like mine, it was pretty smooth and efficient. The clerk had all the information she needed, including your arrival and departure date, the room rate, your demographic information, who was paying, your preference for smoking and bed size. All you had to do was hand over a credit card and you were on your way upstairs, with a computer-encoded door key in hand. If you decided you'd prefer a king bed or to be on the side of the hotel with a certain view, the clerk checked availability with a few keystrokes on her computer terminal and fulfilled your request if she could.

    Have you had to check into a hospital lately? How did that go? Did it take more than three minutes? Did you have to produce the same information you'd provided the day before at the laboratory and again at radiology? Was the clerk as friendly and efficient as the one who registered you at the hotel?

      If your experience is at all like mine, you've learned to expect much better service at hotels than at hospitals. As I see it, the difference comes down to incentives. In general, the main motivation in the healthcare system is not to provide excellent service to patients, but rather to get the maximum amount of money out of insurance companies and government, not because the people in healthcare are especially greedy, but because of the peculiar financial structure that has evolved around medical service delivery.

      And that structure is constantly changing. One day, for example, it doesn't pay to do screening colonoscopies; the next day it does, but only if you don't do it in the hospital. So you completely reconfigure your colonoscopy service at considerable expense to meet the latest set of rules. One day it pays to make more homecare visits; the next day it pays less, so you either redesign your homecare unit or close it because it cannot make a profit. Decisions are driven much more by what pays than by what's needed. If you don't play the game well you don't survive.

      Healthcare is organized around these rules. In a relaxed moment I asked an administrator friend of mine, a very fine, caring individual who got into healthcare for all the right reasons, how he could take part in this wasteful game without becoming cynical. His answer was simple: "I can't." Most everybody who chooses to enter the business does so out of the desire to help. But the best of intentions are subverted by all the screwy rules, rules that have created and sustained the most inefficient and one of the most inequitable healthcare systems in the world.

      In the United States over 40 million people, most of them working people and their families, do not have health insurance. Still, we spend $1.4 trillion, more than twice the per capita expenditure on healthcare of any other industrialized nation, to fund the largest sector of our economy. And our health indicators, such as infant mortality and longevity, continue to lag behind most of the industrialized world.

      Here's how we got into this mess. The trouble started during the Depression when hospitals and doctors were feeling the pinch. This was before the explosion of modern health science and the expensive technology that goes with it, so medical care was still cheap. Nevertheless, too many people couldn't afford to pay for their own treatment. And since the Crash, scores of the rich donors who had footed a big portion of the bill were too busy jumping out of the windows of their upper-story Wall Street offices to help much. So, in 1929, Baylor University Hospital in Dallas offered a hospital insurance plan to the teacher's union. Fifty-cents-a-month premiums guaranteed 21 days of hospitalization in a semi-private room. This was the beginning of Blue Cross. Blue Shield soon provided a similar service to assure payment of doctors' bills.

      From the beginning, health insurance was tied to the workplace. Untaxed health benefits quickly became a cornerstone of every negotiation between labor and employer. The trouble was that the patient got left out of the bargain. Health coverage was negotiated between workers' organizations and businesses. Once a deal was struck the affected workers and their families were signed up for whatever plan had been decided on. They could now get their medical needs met at little or no out-of-pocket expense. So, they didn't know the cost or value of the services they consumed and had little to say about them. Contracted providers themselves had slight incentive under cost-plus reimbursement arrangements to be efficient or even to please their guaranteed customers. In other words, the patient was out of the loop.

      Worst of all, basing health insurance on employment left a huge part of the population-those who were too young, too old or too sick to work-out in the cold. In this country, universal health insurance has never been a politically credible alternative, having been tagged early on with the handle, "socialized medicine."

      By the mid-60s there was enough consensus around the "Great Society" ideas of Presidents Kennedy and Johnson to get Medicare (universal health insurance for seniors) and Medicaid (health insurance for some of the poor) through Congress. Though these programs were vehemently opposed by the American Medical Association as steps towards socialized medicine, it didn't take the AMA and the hospitals long to figure out what a bonanza the generous reimbursement formula was. And so began the era of medical care hyperinflation. Since 1965, when the Medicare Act was passed, the cost of healthcare has grown inexorably, more than doubling its share of the gross national product to 14 percent, where it stands today.

      For the last 20 years or so virtually all of the focus on healthcare financing has been on cost containment. We've tried HMOs, PPOs, capitation, certificate-of-need, gatekeepers, prospective payment, diagnosis related groups, Office of the Inspector General audits, all sustained by gazillions of rules, to rein in galloping healthcare costs. And nothing seems to work because our medical institutions are filled with people whose sole job is to maximize reimbursement. Between 1970 and 1998 the number of physicians in the United States increased two and a half times while the number of healthcare administrators grew 24-fold.

      Reform never really gets anywhere (the most notable example in recent years is the Clinton Health Plan) because, as I said, it's a $1.4 trillion business. You can buy lots of lobbyists for that kind of money. There is a glimmer of hope, though. As health insurance becomes too expensive even for a huge segment of working Americans and as out-of-pocket expenses for those who are lucky enough to have insurance skyrocket, patients themselves will have to be ever more value-conscious about the healthcare dollars that come out of their own pockets. Armed with information gleaned off the Web, patients will feel as I did the last time I faced a car salesman, having looked up on the Internet exactly what the dealer's cost was for the vehicle.

      Knowledgeable and empowered patients who shop for value in the services that they purchase may be the key to motivating that admissions clerk to act as if a smooth entry at General Hospital is at least as important as it is at the Holiday Inn. The clerk will need better information systems to support her, technology that heretofore hasn't been worth investing in because service wasn't that high a priority. About three percent of the healthcare budget goes to information technology, compared to 15 to 18 percent spent by other information-intensive businesses like hotels and banks. And it will take a shift in attitude, brought about by knowledge that if you don't serve the customer well, somebody else will.

      On the other hand, without some sort of universal health insurance, the problem of the uninsured will only get worse. At this moment, caring for our less fortunate and less powerful citizens barely generates the smallest blip on the political radar screen. Perhaps a lot more of us will have to find ourselves uninsured or pauperized by outrageous medical bills before we have the political will to create a healthcare system that is fair, efficient, universal and organized around real needs.