Penny Wise, Pound Foolish


Our colleague Elena Marks has written an insightful new column, “Penny Wise, Pound Foolish,” about dysfunctional health care policies and practices that waste money and endanger patients. This is vital data for those of us pursuing the “right care at the right time,” one of the key tenets for smart health care reform. Elena is the Baker Institute Scholar in Health Policy (Rice University) and is chair of the board of directors at Community Health Choice.

“…the underlying cause of these high charges is a dysfunctional, overly complex and politicized health care finance system. It’s no wonder the U.S. spends far more than any other country on health care while our health indicators are poor compared to many industrialized countries.”

Continue reading to see her full post

Penny Wise, Pound Foolish by Elena Marks

People were outraged after reading Steven Brill’s article “Bitter Pill” in Time Magazine, which reported on health care charges that appeared ridiculously high: $1.50 for a single generic acetaminophen tablet and 300 percent mark-ups on chemotherapy injections. The article led many to conclude that doctors and hospitals are greedy and take advantage of sick people. But the underlying cause of these high charges is a dysfunctional, overly complex and politicized health care finance system. It’s no wonder the U.S. spends far more than any other country on health care while our health indicators are poor compared to many industrialized countries. The way we pay for dialysis services for immigrants shows how our health care finance system wreaks havoc on people’s lives and our federal dollars.

Most people with end-stage renal disease — kidney failure — require regular dialysis, sometimes as often as three times a week, to stay alive. If they don’t get dialyzed, they experience renal failure and are hospitalized or die. Those with private health insurance may have coverage for regular outpatient dialysis. For U.S. citizens who have contributed to the Medicare fund (typically through payroll deductions), Medicare pays for outpatient dialysis because end-stage renal disease is considered a disability triggering Medicare coverage. But if you are an undocumented immigrant, Medicare will not cover regular outpatient dialysis.

Without access to regular outpatient dialysis, undocumented immigrants go into renal failure and seek help at hospital emergency rooms. If they come to the emergency room too soon, before their condition is life threatening, they are turned away and advised to return when their condition worsens. By the time they are sick enough to qualify for emergency treatment, they often require hospitalization to reverse the effects of renal failure. A study published in the Texas Medical Association’s journal Texas Medicine found significant differences in end-stage renal disease patients who were treated only when their lives were threatened (“emergent” vs. patients treated with regular outpatient dialysis [“chronic”], as summarized below).

……………………………………Chronic      Emergent
Admissions to hospital                1.1              12.8

Visits to emergency room           1.4              26.3

Days in hospital                           10               162

Days in intensive care                1.54             6.1

Transfusions                                2.2              24.9

Costs                                          $76,906       $284,655

Now here’s where the perversity comes in. While the federal government will not pay $80,000 for regular outpatient dialysis for undocumented immigrants through Medicare, it will pay $285,000 with emergency Medicaid funds. If hospitals provide outpatient dialysis for these patients, they will not be reimbursed, and likewise if they treat the patients through the emergency room before the patients’ conditions are life-threatening, they will not be reimbursed. But if hospitals treat the patients when they are near death, providing hospitalizations, intensive care stays and transfusions, the hospitals are eligible for emergency Medicaid funds. As if the human tragedy of waiting for someone to nearly die before treating them were not bad enough in and of itself, our health care finance system gives financial incentives to do just that.

The number of undocumented immigrants impacted is relatively small — an estimated 825 in Texas and fewer than 200 in Harris County. Emergency room staff watch the revolving door with dismay.  Jonathan Avalos, a fourth year student at The University of Texas Medical School at Houston, was shocked to learn of this inhumane and expensive debacle during his training. He is working on short and long term solutions to this fiscal, political and human problem with a group of physicians and policy experts, including immigration and border expert Tony Payan and myself from Rice University’s Baker Institute. The fiscal and human problems are relatively easy to resolve — paying for regular outpatient dialysis saves money and improves health. The politics, however, are another story entirely. The current immigration reform debate provides political opportunities and challenges. Stay tuned.

Elena M. Marks is the Baker Institute Scholar in Health Policy and the chair of the board of directors of Community Health Choice, a nonprofit organization serving more than 200,000 members. She is an attorney with a master’s degree in public health and currently works as a consultant to the health care industry. From 2004 through 2009, Marks served as the director of health and environmental policy for the City of Houston.

This post was originally cited on the Houston Chronicle


Please enter your comment!
Please enter your name here