Let’s talk a little bit more about price bundling, I mentioned in a previous blog how we actually came up with our bundled pricing. We asked the surgeons what they thought was fair. Anesthesia basically is based on the amount of time the case is going to take. The surgery center pricing basically is time and materials. That’s how we came up with it: we added it all up. There’s not even algebra involved; it’s actually simple math to come up with this bundled pricing.

So when is bundled pricing a bad idea? It’s a bad idea when the government does it. Right now, Medicare is requiring many hospitals to provide bundled pricing for many surgeries. This bundled pricing is not just for the surgery – it’s for anything that goes wrong for a certain period of time, typically 90 days after the surgery is completed. In other words, this bundled pricing is meant to cover complications. These facilities were not asked how much they would do it for; they were told how much they would do it for.

Here’s an unintended consequence and I’m giving them the benefit of the doubt here because I’m calling it unintended. The sickest and the neediest of patients – those for whom the postoperative course is not necessarily going to be a smooth one, those who are likely to have some complication – they’re going to the back of the line.

So, if you are covered by Medicare as I’ve said before, you should be angry. You should be particularly angry if you are a sick person that has multiple medical issues, for if you need surgery and it falls under one of these bundled payment schemes that the government has come up with, you’re going to the back of the line. You will be very lucky to see the inside of an operating room at all. Only government could mess up a great concept like bundling and I’m afraid that they have done just that with the Medicare bundling program.

I wanted to pass these thoughts along to you and we will see you next time.