Managing Your Dermatology Practice

Managing Your Dermatology Practice: Fixing Health Care (Not)

August 15, 2011

My column on the potential impact of the 2010 health care legislation on private practitioners is now more than 6 months old; yet it continues to generate discussion.

Lately, many of the questions have become more fundamental in nature: What, exactly, is broken in our current system? And does the Affordable Care Act address any of the core problems?

There are no simple answers, of course, but in perusing the voluminous literature on this subject, there are a few basic truths on which most seem to agree. First, some kind of tort reform must be implemented. Second, the encroachment of third-party payers on the physician-patient relationship needs to be reined in. Yet neither of these basic issues was even on the table during the health care debate.

Most experts also agree that the present system of employer-financed health care is fundamentally flawed. Allowing employers to control health insurance has created thorny (and largely avoidable) problems. Think about it: What would happen, for example, if employers controlled food purchasing and employees could go to a grocery store, pay a $20 copay, and take as much food as they want? Clearly, food prices would increase enormously (and artificially) in a big hurry; but employees wouldn’t care, because they would never see the bill.

That is basically what has happened with health care: Costs have skyrocketed, but because most bills go from hospital or clinic to insurance company to employer, most patients are left completely out of the loop and have no idea of what their treatment costs.

The strange part is that nobody planned this nongovernmental, non–free market model. It was created through a series of historical accidents, beginning around World War II. During the war, a wage freeze was imposed to control inflation, but the war effort also created huge production demands and a worker shortage. Because businesses were unable to lure good employees with higher wages, they resorted to offering generous fringe benefits, especially health insurance. Before World War II, only 10% of American citizens had employer-based health insurance; by 1953, 60% did.