So now the hard work comes- reducing costs.

First, let’s acknowledge the incredible victory in passing and then having confirmed by the Supreme Court the health care reform law.  It’s a great thing that millions will gain access to health insurance.

But this is only the beginning…

First, let’s face it, costs will rise in the short term.  With insurers covering millions who have previously gone without, many with pre-existing conditions, costs will rise.  The real challenge is in reducing costs, not so much of the insurance, but of the basic care services that the insurance must pay for- doctor visits, hospital stays and drugs.

The core problem underlying our runaway costs is that our system is designed, at nearly every stage, to deliver the highest cost service possible, and as many services as possible.  Reasons for this include:

  •             Fee for Service pay structure
  •             Defensive medicine and the fear of litigation
  •             Overcapacity of some service lines (supplier induced demand)
  •             A huge medical complex that can and does influence regulations

Until we focus on costs, and change key structural aspects of the health care industry to support a lower cost model, health care itself, whether accessed through insurance or not, will remain out of reach for many.

 

Maybe Doctors Can Learn From Lawyers

On May 2, an article was published in the New York Times, titled “Top Judge Makes Free Legal Work Mandatory for Joining State Bar”.  The article describes how more and more people need urgent legal services but cannot afford them.  It goes on to describe the pros and cons of requiring lawyers to provide some free services (pro bono) as a condition for joining the New York State Bar.

We have a similar problem in health care- a large number of people who cannot afford health care services.  And I am not talking about insurance.  I am talking about the doctor and hospital visit.

In health care, we have doctors refusing to see patients because Medicare or Medicaid do not pay enough.  And these patients have nowhere else to turn.  The doctors use the threat of refusal as a key part of their strategy when negotiating for higher reimbursement.

How can we allow this?

In a previous post on this blog, I have proposed that doctors be required to accept Medicare as a condition for receiving or renewing their DEA license (federal level- the DEA license is what allows them to prescribe), and to accept Medicaid as a condition for receiving or renewing their Medical license (State level).

We place physicians on a professional and social pedestal, and their incomes are higher than that of any other profession.  In return, we should require something of them- not grant the right to walk away from persons in need.  Doctors, take a lesson from the lawyers, or lose your protected, lucrative turf!

 

We (the consumer) are about to get trashed!

I saw three articles that disturbed me last week.  Taken together, they are no less than frightening.  All were printed in the New York Times.

First came an article titled “Insurers alter cost formula- patients pay” (New York Times, April 24).  The main point is that insurers have changed the way in which they reimburse doctors and hospitals.  The reimbursement has gone down, so the patient’s portion has gone up.

The second article, also printed in the New York Times on April 24, is called “Pricing confusion adds to pain at hospitals”.  The main point here is that hospital bills appear to have no rhyme or reason, with the price for the same procedure in the same geographic area varying wildly, sometimes by a factor of ten or more.

Finally, in the New York Times on April 25, “Debt collectors pursue patients in hospitals” describes how employees of a collection firm, “Accretive Health” are actually allowed front line positions in their client hospitals where they can, and do, get right in patient’s faces demanding payment for expected or past services, sometimes before emergency services are provided.

Now put all of this together-

  1. We don’t know what something will cost and may be off by a factor of 10
  2. Whatever it does cost falls more and more on our shoulders to pay
  3. We will subjected to very extreme collection practices, including denial of services, until we pay what we owe.

Now compare this to the experience of citizens of every other advanced country in the world- costs are simply not allowed to come between a person and their need for health care.

We, the consumer, are about to get trashed, and it is time to do something about it! (Stay tuned for future posts).

The Trend Towards Adult Day Care

A recent article in the New York Times describes a trend where elderly patients can be treated through a home based managed care model, rather than in a nursing home.  This model is generally referred to as “adult day care”.

It’s about time!  Why should patients be required to spend their entire existence in a nursing home, at much higher cost, when they can live in their own homes and receive visits from medical professionals and other caregivers?  Moreover, it has long been known that people much prefer to be cared for in their own homes, including during their final days- yes, people prefer to die at home than in an impersonal institution.

The luxury of being treated (and dying) at home has long been reserved for the well-off, who can afford private nurses and all of the related home-based equipment.  The thinking has long been that if the government is paying (Medicaid), then you need to be in an institution.

Too bad that it has taken a financial crisis- state budgets under pressure, led by Medicaid costs- to get state programs to relent and allow people to be cared for in an environment that is less expensive, more comfortable and inherently safer- the home.

A Brief Comment on the Ryan Medicare Plan

Medicare is too expensive and becoming more unsustainable every day.  Congress has also demonstrated that they will bow to special interests before implementing what they have already passed- the so-called “doc fix”, whereby reimbursement cuts to physicians that are already mandated by law are deferred, year after year.

One approach is the Ryan plan, named after Representative Paul Ryan of Wisconsin.  Without delving into the details of the plan, which are debated hotly by very partisan commentators, one great flaw in the plan appears to have escaped comment:

That is, the notion that physicians will compete for patients, thereby reducing costs.

This assumption is deeply flawed for one simple reason- there is a well documented shortage of physicians.  Economics 101, and the basic law of supply and demand, teaches us that if the supply is low, the price is correspondingly high.

Physicians will never have to compete aggressively for patients (the Ryan Plan assumes that they will) as long as there is a shortage of physicians.  Rather, patients will have to chase physicians and endure long wait times to get an appointment.  Physicians will continue to raise fees, not lower them, and they will threaten to stop seeing patients whenever their fees are reduced- hence the “doc fix”, which happens year after year.

If Medicare is changed to a voucher system, as Rep. Ryan proposes, seniors will be at the mercy of physicians, who are in short supply, and who will retain any negotiating leverage as long as there is a shortage of physicians.

Until we are able to address the shortage of physicians (train more and/or allow the greater use of nurse practitioners, midwives, pharmacists and other “physician extenders”), it is wrong to place seniors in this ruinous position.

Health Care Reform and the Mandatory Purchasing of Insurance

Is it right to require people to purchase health insurance?  I have mixed feelings on the subject.

First, I understand the concept of insurance and of “pooled risk”- the notion that the premiums of those whose homes do not burn will be used to pay for damages to the homes that do burn.  And I understand the need for everyone to participate in order for this system to work at its best.

The part where I struggle is when we are delivered to a voracious, for-profit industry like so many lambs to slaughter.  There should be, at the least, a “reasonably priced”, non-profit option (we can discuss what a reasonable price is separately).

When I discuss this with my friends, they invariably point out that auto insurance is mandatory.  To which I reply, “If one does not wish to pay for auto insurance, there is an alternative- it is called Public Transportation.

What alternative exists in the health insurance discussion?  If we choose to not purchase an overpriced product from a for-profit health system, what alternative do we have?  What happened to the “public option”?

So here is where I end up: if a reasonably priced, non-profit alternative exists, I support mandatory coverage.  But if the only option is to pay into an overpriced, for-profit system, then I do not support mandatory coverage.  What do you think?

What are your feelings about mandatory health insurance coverage?

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Re-published: Who is responsible for our out-of-control costs?

As we all know, the federal government and nearly every state is facing huge budget gaps. Health care is a large part of every crisis:

  • Medicare is a large part of the federal budget crisis
  • Medicaid is a large part of every state budget crisis

Health insurers are not to blame this time:

  • The Medicare discussion is about Medicare, not Blue Cross, Aetna, Cigna, United or Humana.
  • The Medicaid discussion is about Medicaid, not Blue Cross, Aetna, etc.

The health care reform bill that we recently passed was really health insurance reform- yes, we needed to reform the insurance system.

Since Medicare and Medicaid are not traditional insurers, but still seem to be drowning in costs, the question is, “Where should we focus our reform efforts going forward?” What do you think?

Since the Medicare and Medicaid discussion is not about the insurers, where should we focus our reform efforts going forward? Select all that apply.

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Should home health care budgets be increased (supported through legislation and payment), decreased or left alone?

An interesting part of the health care discussion concerns home health care.  It is unquestionably less expensive to treat someone at home, particularly someone who needs a lot of nursing care and assistance with eating/ dressing/ bathing.

However, many states, as the grapple with high Medicaid costs, seem to want to reduce funding for home care.  There is also some fraud in the home care sector, as there is throughout the health care industry.

Reducing or eliminating home care services forces patients to seek more expensive in-patient care in hospitals and nursing homes.  Reducing funds for home care seems to be financially short sighted.  So what should we do?  What do you think?

Should funding for home care be increased, decreased or left alone?

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Would you sacrifice choice this time around?

In the ’80’s and 90’s, when HMOs first became widespread, we all experienced lower costs but less choice- we had to choose from a list of doctors and hospitals, i.e. “in-network providers”.  But costs did stop rising, and in some cases actually fell.

Then came the managed care backlash and insurers allowed a much broader choice of doctors and hospitals.

Health care costs have nearly tripled since 1990 and now, the federal budget and nearly every state budget is threatened by extremely high health care costs.  Of the many methods being used to try to contain costs, limiting consumer choice of providers is once again a common approach.

The way this works in practice is that health plans offer one set of prices for using “in-network providers”.  If we use “out-of-network” providers, the amount we have to pay out of our own pockets is higher.  Sometimes much higher.

Here is the question: How do you feel about having a limited choice of doctors and hospitals in return for lower costs?

Is limiting our choice of doctors and hospitals fair, if costs are significantly lower?

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Should wealthier people receive more and/ or better health care?

As health care costs threaten more and more of our economy, various methods of addressing the challenge have been proposed, the Ryan plan for Medicare being one of the best known.  In this plan, the Medicare system is revised to provide seniors with a fixed voucher to cover insurance premiums purchased through the private sector.  When the voucher is used up, patients will have to pay out of personal funds.

Clearly, the well-off will be able to afford more care after the voucher is gone.  Is this right?

This blogger believes that the quality of some things should vary with wealth:

  • the well-off should drive nicer cars
  • the well-off should wear nicer clothes
  • the well-off should eat at fancier restaurants

But some things should not vary with wealth:

  • fire protection
  • water quality
  • food safety

So here is the question- should the amount and quality of health care a person receives vary with wealth?  What do you think?

Should financially well-off people receive more and/ or better health care than those who are not well-off?

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Fourteen Zeroes!

Part 1- the problem.

If you look at our present level of health care spending ($2.6 Trillion), and project it forward, growing at 6% annually for the next 20 years, the total exceeds $100 Trillion.

That’s 14 Zeroes:

  • Just for health care
  • Just in America
  • Just for the next 20 years (if we look at 30 years, the number is over $200 Trillion).

That number is incomprehensible.  Not only is it not sustainable, it is not even possible to finance this number.  Yet, that is the path that we are on.

The present discussion aims to “bend the cost curve” and to somehow shift the burden:

  • Blame the insurers
  • Blame the pharmaceutical companies
  • Reduce provider reimbursement
  • Limit what Medicare pays on behalf of seniors.

Whomever we choose to blame, we are clearly headed for a scenario where we all  work our entire lives just to pay for health care, and when we get old, all of our assets, if there are any left, get paid over to our huge, for-profit health system.

We must fundamentally restructure our health care system, and our expectations of living and of dying, or life will become one long health-care payment treadmill.

Part 2- the discussion.  Please answer the following questions. One answer per question:

What is the responsibility of consumers (the system calls us "patients")?

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What is the responsibility of insurers?

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What is the responsibility of the government?

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What is the responsibility of providers (doctors and hospitals)?

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What is the responsibility of suppliers (pharmaceutical companies and device manufacturers)?

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Now, please consider all of the answers you provided.

What do your answers, taken together, mean for the 14 zeroes in our future?  Something to think about…

Is “bending the health care cost curve” enough, or do we need to do more?

All over the country, people, companies and entire sectors of the economy are experiencing, or will soon experience, drastic cuts.

  • benefits of unionized employees significantly reduced
  • layoffs
  • salary freezes and reductions
  • reductions in state provided services

Yet, in the health care industry, we talk about “bending the cost curve”, which means a reduction in the rate if increase, say, from 6% annual growth to 4% annual growth.

Why is health care exempt from the drastic cuts being made almost everywhere else? (In fact, it is health care costs more than anything else that is forcing states to the brink of bankruptcy).

So is bending the cost curve enough? What do you think?

Is "bending the health care cost curve" enough, or do we need to do more?

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