Friday, April 26, 2013

If Hospitals Cause Health Care Problems the Result Can Be a Nice Benefit to Their Bottom Line

Proof Positive of the Idiotic Design of the U. S. Health Care System

This Forum has ranted a lot of times about the economics of health care in the United States.  Specifically, the pay-for-procedure economics of health care means that providers make money when people are treated for problems, and don’t make money if a patient is healthy.  Keeping patients healthy is just a prescription for losing money for health care providers.

A new study shows this problem in mind shattering detail.  If a hospital botches a surgery for example, and the patient has a severe post operative infection, the hospital makes more money.
Brian Harkin for The Wall Street Journal
A new study found complications
 can boost a hospital's bottom line.

Surgical complications such as infections and procedure-related strokes were on average twice as lucrative as operations that went smoothly at one large hospital system, researchers from Harvard Medical School, Boston Consulting Group and Texas Health Resources, reported Tuesday in the Journal of the American Medical Association.

That this should surprise anyone who knows basics economics would only mean they think they know basic economics.  Individual health care providers may indeed be highly motivated to preserve the health of their patients through measure designed to prevent illness and injury.  The system though makes money off illness and injury.  To expect them to reduce their income just to keep people healthy is idiotic.  And the same can be said about a system whose incentives are not to keep people healthy.


  1. Hola TDPE, again your friend from BR, LA. You are so right, except it should not be called a health care system, it should be called a Profit for Sickness System. And additionally, we must remember that, until the last few years, they didn't disclose that they also owned the lab or imaging centers they sent me to for more testing. I think I gave you the run down of how I am the wonder and the horror that is the "alleged" health care system in the 21st century in this country. Long to short, I'm self employed in CRE (commercial real estate brokerage) and had a great private policy until it had to pay. After half a decade or more with no claims, despite quarterly premium increases, they did pay 1/4 $ million for several spinal fusions. Within 90 days after the last fusion they sent me a loving letter that they were dropping my whole pool of insured. And, of course, and as underwriter friends told me, no one would insure me for 7 to 10 years post last fusion but as long as I'm on the permanent pain meds I must live with, like Fentanyl, Morphine, Oxycontin, plus lesser drugs, no one will ever cover me. That turned out to exactly right!! If you or any of your readers need anyone to testify before congress about how F**cked up our system is, I'd do it in a minute. After spending between $102,000 to $138,000 out of pocket on pain meds in roughly ten years I now have insurance thanks to the President's Affordable Health Care Act. DAMN has it changed my life!!! I sleep better knowing that I won't go broke or file bankruptcy over medical bills, which was most likely during the decade I went without insurance because NO ONE would insure me, despite asking for $10,000 to $25,000 deductibles. Or more importantly, the hell with bankruptcy, I went a long time with intermittent fears of illnesses, where going broke with the medical costs problem was NOT my biggest concern: the reality was that I might actually die for lack of ability to pay the INSANE medical costs. It is a sick care system and it is sick. As you know, aside from a retail business I own with a partner, I broker commercial real estate as my day job, Hence I will never get coverage under a group policy. As you and many of your readers know, getting a private policy before Obamacare, was just impossible...hell I can't even increase my life insurance because of the side effects of the drugs. Please TDPE, expand your coverage of this topic!!! I'm assuming your are well acquainted with all the nightmares of our system, I'll gladly help expand your understanding from the perspective of how a 37 to 40 year old (at the time) American's life was ruined in more ways than I care to explain. It's not the first time my shot spine ruined my life. It happened as early as while I was a college student. If you ever want to yak with me, my email is

  2. Thanks for sharing your story with us, and glad that the health reform act has helped you.

    To put it as succinctly as possible there are two major problem with health care in the U. S. The first is that the system is wrong, the incentives are built in to treat people, not to keep them healthy, and incentives are designed to prevent people that need the most care from getting it.

    The second problem is that those who can change the system all have wonderful health insurance provided by or sponsored by or paid all or in part by government. So they see no need to help anyone else. That they can rant against government involvement in health care while at the same time taking massive government benefits just illustrates how difficult it will be to change.

    The health care reform is a great step forward, but until the fee for service system is replaced nothing will stop the cost increases and the denial of benefits.