Minor Thoughts from me to you

How Much are Misaligned Incentives in Health Care Costing Tax Payers?

How Much are Misaligned Incentives in Health Care Costing Tax Payers? →

From Dr. Elizabeth Dzeng, at The Health Care Blog:

The social worker informed him that Medicare would not pay for home care nurse visits or supplies. BUT, Medicare pays for inpatient rehabilitation, which he would be eligible for to receive these antibiotics. Given the choice of paying $7000 for home administration versus $0 for inpatient rehabilitation, naturally he chose inpatient rehabilitation.

The problem is, is that his inpatient stay costs taxpayers approximately $21,000. $350 for room and board plus additional costs for antibiotics and supplies, totaling approximately $500 a day. Furthermore, although he was well enough to be discharged home before Christmas, he needed to stay until he could be placed in rehab. Because of holiday scheduling, most rehabilitation facilities were not accepting admissions. Thus, he had to stay in the hospital an extra four days in the hospital over the weekend and holidays. Given that the average cost of a hospital stay is $2338 in Maryland that added an additional $9352 or so of unnecessary expenses.

In sum, because financial incentives encouraged my patient to spend $0 rather than $7000 out of pocket, Medicare spent an unnecessary added $30,000 on his hospitalization and care.

This is the problem with third party payment. When someone else is paying for your medical care, you have to follow their rules. And their rules will often force you to make dumber decisions than you would make if you were spending your own money.

This entry was tagged. Responsibility