The reasons seem clear.
“It’s not primarily that we get a different bundle of services when we have a baby,” said Gerard Anderson, an economist at the Johns Hopkins School of Public Health who studies international health costs. “It’s that we pay individually for each service and pay more for the services we receive.”
Those payment incentives for providers also mean that American women with normal pregnancies tend to get more of everything, necessary or not, from blood tests to ultrasound scans, said Katy Kozhimannil, a professor at the University of Minnesota School of Public Health who studies the cost of women’s health care.. …
Only in the United States is pregnancy generally billed item by item, a practice that has spiraled in the past decade, doctors say.
Each new test is a new source of revenue, from the hundreds of dollars billed for the simple blood typing required before each delivery to the $20 or so for the splash of gentian violet used as a disinfectant on the umbilical cord (Walgreens’ price per bottle: $2.59). Obstetricians, who used to do routine tests like ultrasounds in their office as part of their flat fee, now charge for the service or farm out such testing to radiologists, whose rates are far higher.
Add up the bills, and the total is startling. “We’ve created incentives that encourage more expensive care, rather than care that is good for the mother,” said Maureen Corry, the executive director of Childbirth Connection.
And it’s not like US citizens are getting any better care. Other countries, “have the same access to care, high-tech care” and indeed, seemingly safer care, than here. As the article points out, the “United States has one of the highest rates of both infant and maternal death among industrialized nations” thanks to our screwed up health insurance system.
So the reasons for this mess are quite well-defined. Payment incentives. But of course, buried in the article is this obligatory throw-away line:
Some social factors drive up the expenses. …[for example] obstetricians face the highest malpractice risks among physicians and pay hundreds of thousands of dollars a year for insurance, fostering a “more is safer” attitude.
What’s that supposed to mean? Here’s what I think it means (if I might be so bold):
Despite all the incontrovertible proof that malpractice exposure has nothing whatsoever to do with this problem, doctors are really spending too much money on their patients because of the tiny risk that they'll be sued for negligence. And it's OK to just state this without any evidence. And to add to the confusion, let's connect malpractice premiums to all this.
I don’t know if the suggestion here is that obstetricians are doing this to get their insurance premiums down, or that their insurance premiums are part of the cost problems, in general. Whatever it is, it’s wrong. I wish reporters wouldn’t step into this politically toxic area unless they are willing to do more than repeat talking points from ACOG, the obstetricians’ lobby, and understand how malpractice risk and insurance works.
Actually, a recent article from Illinois provides some useful insight here. Here’s a state that enacted a clearly unconstitutional “cap” on compensation for medical malpractice victims a few years ago. In 2010, the cap was struck down – as expected. But also struck down was one of the best med mal insurance regulatory laws in the country, including strong oversight over rates and new transparency requirements. This is all because of a “non-severability” clause in the law. In other words, when the cap was struck down, all of those great medical malpractice insurance regulatory laws protecting doctors from price-gouging were also thrown out the window.
So what’s happened since? Insurance industry profits are through the roof, that’s what:
Profits at the state's largest medical malpractice insurance carrier reached a record $57 million in 2012, two years after the Illinois Supreme Court struck down a law capping damages in jury verdicts.
That's not the doomsday scenario the insurance industry was predicting.…
According to state filings, ISMIE's net income in 2012 was its highest in at least 20 years. The company, which holds more than half the market in policies for independent physicians in Illinois, earned it even after committing a $17 million dividend to its 12,000 members.…
ISMIE in May committed to pay $45 million in dividends to its members (view the PDF).
“I'd say they're doing extremely well,” says Keith Hebeisen, a malpractice attorney at Chicago-based Clifford Law Offices and a past president of the Illinois Trial Lawyers Association, a frequent adversary in Springfield of ISMIE. “Otherwise, how would they be able to do that?”
Indeed. However, with the state of Illinois now unable to do anything about premiums, as they can in a state like California, rates stay high:
Insurance rates remains a major expense of running an independent practice, and the Chicago area has among the highest rates in the country. …
In sum, insurers price-gouge doctors while making significant profits. I'd like to see an article focus on that for a change.