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The Groups Who Destroyed U.S. Healthcare

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The Groups Who Destroyed U.S. Healthcare

The Groups Who Destroyed U.S. Healthcare
January 08
16:54 2020

“It saddens me to know we went from #1 in the world in safe birthings – we’ve gone back decades – and it’s all because of DRGs.” – Carol Soppeland, critical care registered nurse (retired) whose specialty was intensive care and home health in San Diego, California, and St Louis, Missouri

In 1983, legal changes to the United States’ Social Security program under President Ronald Reagan and a divided bipartisan Congress imposed a sweeping and radical new payment plan for the Medicare program.

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Robert B Fetter, Ph.D., of the Yale School of Management, and John D. Thompson, MPH, of the Yale School of Public Health – neither one an actual doctor, mind you – came up with a scheme to classify hospital cases into one of 467 diagnosis-related groups (DRGs).

With the rise of computing and digital analysis, these ivory-tower theoreticians decided to help healthcare providers make bigger profits by identifying, cataloging and then charging for every “product” rendered, from an aspirin to an appendectomy.

The forced inventorying of a caregiver’s services and products for the sake of charging the patients was necessary to persuade Congress to replace the “cost-based” reimbursement originally implemented:

“Prior to this time, hospitals submitted bills to Medicare, which then basically just paid the facility in its fee-for-service methodology.”

The problem perceived in the early 1980s was that not all hospitals charged the same fees, they “didn’t bill for services not provided, only provided services that were medically necessary, didn’t admit people who were not sick enough to need an inpatient hospital stay, and discharged them as soon as they were medically stable enough to not require inpatient care” if Medicare had sufficient funds to cover the expenses.

Fetter and Thompson examined data for past patient care claims and invented the DRGs to solve Medicare’s economic plight:

“Once the most common groups of care packages had been chosen, a numerical weight was attached to each, and then a dollar amount was attached to that weight as a multiplier in order to calculate payment to each hospital. The weight stayed constant for all Medicare DRGs, but the dollar amount varied from facility to facility based on issues such as city vs. rural, local wage index, teaching status, and so on.”

The idea was to stop reimbursing hospitals that were gaming the system by admitting any and all patients regardless of condition, keeping them after they needed further care, charging for unneeded services, and generally gouged their clientele to keep their doors open.

Under this system, patients are classified by diagnosis, treatment, and length of hospital stay. The DRG assignment depends on the following variables:

  • Principal diagnosis
  • Secondary diagnosis(es)
  • Surgical procedures performed
  • Comorbidities and complications
  • Patient’s age and sex
  • Discharge status

DRG payment is “based on the care given to and resources used by a ‘typical’ patient within the group.”

National care facilities began to charge a predetermined specific rate for each discharge dictated by the DRG classification as a financial incentive to encourage hospitals to curb resource use while providing high-quality inpatient care. Experts agree that this has been successful: hospital stays are down and profits are up.

Nurse Soppeland was there from the beginning of this New World Medical Order and watched as other hospitals followed suit. She told this reporter:

“When the DRGs hit, people didn’t come in for treatment because they didn’t know how much it would cost. Lots of people died at home because they didn’t seek professional care – or by the time they came to the hospital.”

The healthcare insider listed several problems that nurses noticed after their employers made them change how they did business:

  1. Birth mothers were sent home without a 3-day hospital stay – even after a C-section. The same was true with a serious operation like a hip replacement.
  2. Patient discharges were based on time – not health condition.
  3. Medicare funds became limited to covering a few days regardless of how long treatment takes.
  4. Patients were taught to change their wound dressings after only one staff demonstration and forced to sign waivers to hold the caregiver harmless if infection or other complications arose after patient discharge.
  5. Patients with a new colostomy bag were sent home without having been told how to change them. They had to wait up to 24 hours post-operatively for a nurse to make an in-home training visit.
  6. Patients didn’t have money to fill their prescriptions so they didn’t take their cardiac medications. Then, they would have a heart attack after ignoring the obvious symptoms.
  7. Insurance company billing audits required exact accountings of IV solutions that required special stickers. Not every worker logged the usages accurately or for the right patients.
  8. Insurance auditors could refuse claims payments and could chargeback the expense if proper documents weren’t provided by the hospital. Hospital staff worked to produce their own audits to justify their billing to the insurance companies.

In short, a great deal of time, effort, and expense went into figuring out who would pay how much of an insured’s bill.

Soppeland was candid about her opposition to the modern state of hospital financing:

“I hated the DRGs because the medical industry lost its continuity of care. The old method relied on rulers and mark wound acetates with an ink pen to record an exact measurement. After DRGs, people would ‘wing it’ or ‘eye-ball’ the wound and estimate the condition rather than physically measure it because it took time to get out the ruler and take a measurement.

“Paperwork ruled. If you didn’t document it, it didn’t happen.”

Furthermore, said the seasoned nurse, DRGs “took away personalized care and made it a factory. It was hurry up and do paperwork.”

DRGs refocused healthcare from patient wellbeing to patient revenue. Small wonder that U.S. healthcare is coming under critical scrutiny by the office of the President on down with an eye toward privatizing this rigged and highly lucrative game.

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