Newsletter Updates
» galen institute press conference
Thursday, June 24, 2004 - The video of Dr. Alieta Eck's presentation can be accessed at the website of the Galen Institute. Here is the text of her talk.
Press Conference for the Galen Institute
Kaiser Foundation Building
Washington, DC
6/18/04
Good afternoon. My name is Dr. Alieta Eck, and I am a physician in private practice. I have bad news and good news. The bad news is that I come from New Jersey, the land of the 1992 health care reform that has caused a staggering increase in healthcare premiums, and an equally staggering increase in the number of uninsured citizens. 220,000 individual health insurance policies were purchased in 1996. Today that number has dropped to 90,000.
The good news is that I come from New Jersey, as our problems have caused us to think long and hard about health insurance, the role of government, and the role of charity. Our family of seven represents one of those families that have dropped the state-approved health insurance, and yet we have found a way to take care of ourselves and our families—not only because my husband and I are both physicians, but because we have sought out alternative to health insurance—alternatives that work.
My husband and I have been in private practice for 15 years—in family and internal medicine. We have four physicians in our practice and no HMO’s. When we would read an HMO contract, we realized that we would not be encouraged to do what was best for the patient, but would be protecting the HMO bottom line. Here is a slide that illustrates the frustration of health insurance as we know it. The health care dollars are concentrated at the top, and the patient and care-giver see about 32% of the funds spent. Much is spent in administration. We do not participate in Medicare, but bill the patients directly. We are required by law to submit the claim to Medicare, and they get reimbursed. The reason we are still in Medicare is that senior citizens are not allowed any alternative insurance.
We see many uninsured people and have felt their pain. We figure out ways to care for them with the best use of their hard earned dollars. But we have office overhead, and we have medical malpractice insurance costs, so we must limit our care to the very poor in our regular practice. We have developed an alternative.
We started the Zarephath Health Center, located on the grounds of our church. Volunteers fixed up a little building where we can see patients for a very low cost. The overhead is only $500 per month. Donations come in, we all volunteer our time, and patients are extremely grateful for the care they receive. You see, the funding of health care ought to begin at the bottom. People budget and pay for their own health care, but when they are in trouble, they get subsidized by friends, family, and their church.
Getting back to New Jersey, a family is charged about $800 per month for a $10,000 deductible health insurance policy—so few purchase it. We have discovered that, having founded the Zarephath Health Center in New Jersey, we can broaden our influence. We are starting to help those who are not so poor. Think of the self-employed person. He is mainstream America. He owns the mom and pop store, working long hours but delivering a quality service. He is actually the most vulnerable when it comes to health care. He might be earning a good salary today—maybe even $150,000, but what if he becomes ill? What if he can no longer work? Think of the ten employees who are working for him. They would lose their jobs if their employer became too sick to work. These employers might have assets, but if they are uninsured, the hospital will go after them and put a lien on their houses for the full billed amount of their care. These employers are caught in a bind. They cannot afford NJ health insurance, yet they are terrified to be without it.
We have learned a dirty little secret. The uninsured are billed 300% of the cost of their care. Say a hospitalization costs the hospital $10,000. The bill will be for $30,000. I believe that this is highly unfair, so we have been talking with hospital officials. Two cases: One was a friend who had a complicated appendectomy with a hospital stay of several days. His bill came to $40,000. BC/BS paid $6,000, and that was considered payment in full-- the negotiated price of the insurance company. Another friend had her gallbladder removed. Her bill came to $12,000, and BC/BS paid the negotiated fee of just $2,000. I asked the hospital VP, “Is that enough? Does that cover your costs?” When he realized that the patient with the gallbladder was discharged the same day, he said, “Yes, $2,000 covers the cost of her care.”
We have been working to negotiate a contract just like an HMO. If someone comes through the Zarephath Health Center, a 501©3 charity, they can access that same negotiated rate. We will be asking families to donate $100 per month to the charity. We will give them a donor card, much like the Red Cross gives to a donor of blood. If in the future he needs blood, he gets a unit for free or at a very low cost. So, if our donor needs a hospitalization in the future, he would show his donor card and get the lower rates. A $12,000 gallbladder operation now costs $2,000—suddenly much more affordable. He could use a credit card.
As for the donated money—it will be used to care for the truly poor—those who cannot work, or those who have come onto very hard times. We will try to pay the same negotiated rate to the hospital for their care—using the donated funds.
Why would a hospital agree to this? Our hospital is losing $6 million per year on uncompensated care. The government tells them that they must give state of the art care to whoever walks through the ER door. Then the secretaries work to determine if the patient qualifies for charity care. They submit the volumes of paperwork to the state government, and finally, six months later, they receive 12 cents on the dollar. The hospital has probably spent that much just determining if the patient qualifies for the charity care. What a waste. Our goal would be to see that the hospital gets paid the price of the care for both the poor and the uninsured. Leave out the middleman.
Direct payment for health care is the least expensive way to provide it, as cash paying people will access care for the lowest price. They can seek out doctors who charge reasonable prices, always knowing that should they fall onto hard times, the Zarephath Health Center will be there. This is called the “subsidiarity principle,” where people pay their own way, but get subsidized by family or a charity if the going gets rough. High deductible would be nice, but it is currently unavailable in NJ at a reasonable price.
There are three faith based cost sharing systems out there. They are Christian Care Medi-Share, the Christian Brotherhood Newsletter, and Samaritan Ministries. They are not “insurance” and do not fall under the jurisdiction of the Department of Banking and Insurance, but they are very reasonable and help out when medical events exceed a certain amount. The one that we are enrolled in paid for a liver transplant last year, causing our monthly donation to rise from $199 to $215 for a family of 7. It is a great alternative to health insurance, especially if you live in New Jersey.
One more point. There are excellent hospitals overseas that can treat Americans for a fraction of what we would be charged here. We have been attempting to push through the bureaucratic red tape of a little hospital in the Caribbean. They can do gallbladders for $1,000. We are actually considering bringing down surgeons and anesthesiologists, having them do 4-5 cases, let the patients recuperate in paradise, and giving the doctors a nice respite from the grind of US medicine. The tort system is completely different on these islands—there is no malpractice crisis. We would welcome partners to facilitate such a venture. So stay tuned—we will let you know how it turns out.
This is a wonderful time to break out of the current paradigms of payment for health care. Necessity causes one to think outside the box, so we are glad to be residents of the sovereign State of New Jersey.