A wonderful article from Jane Sarasohn-Kahn (at Health Populi) on how making strides in healthcare is all about data liquidity. So many folks who are interested in healthcare reform have “talked” about this very thing, but it’s only now that it is actually becoming a realistic goal.
As we head off for Health 2.0 in SF next week, I begin to have visions of history repeating itself. Too many of us remember those business plans of the dot-com era that were brilliant yet the market for them had not reached critical mass. They became the casualties of the dot-com bust. Now, a decade later, many of those business plans are being dusted off and successfully rolled out.
I remember the dot-com days when we talked about live radio broadcasts and streaming video. Today we have YouTube and Mevio. It happened, just not when we envisioned it. At Health 2.0, I will look around for some old friends, and they will not be there any longer. Why? Bad economy. Bad business model. Bad management. Bad timing. Or simply bad luck.
Casualties.
It’s ugly, this war to achieve healthcare data liquidity. And, like any war, it’s so senseless.
Just got finished trying out the White House twitter site that allows tweeple to pop off a pre-formatted mantra in favor of healthcare reform. It’s a neat bit of technology – cool in many ways. But it’s an agenda pusher.
It’s all talk and NO action.
Now compare that with the recently-launched Twitter app from change:healthcare. It allows tweeple to receive information on health conditions and medication costs as well as prescription medication costs, generic alternatives and more using secure private messages via Twitter.
Government talks. Industry acts.
If you want to find the cost of prescription medication and medical term definitions via Twitter – Just Ask! Follow @askch on twitter and send a question in the proper format to see how you can change healthcare too.
“Have you heard of tiny Melinda Mae,
Who ate a monstrous whale?
She thought she could,
She said she would,
So she started in right at the tail…”
- Excerpt from Melinda Mae by Shel Silverstein
Healthcare reform is a “monstrous whale.” The federal government could learn a little something from the childrens’ tale about Melinda Mae. Instead of trying to cram ALL of healthcare reform into one big bill and get everyone to swallow it all at once, smaller bites would be more manageable.
Smaller bites might actually pass.
What Do Small Bites Look Like?
Let’s start with some easy small bites that most Americans are eager to agree on. How about a bill with just these points in it to garner support and get something/anything passed.
No more pre-existing conditions
No more pulling of policies for large claims
Same premium rates for all with premium adjustments only on the basis of tobacco use, age, family size and geographic location
Banish all attorneys to…erm…I mean…malpractice suit limitations
Those are things most all of us can get behind. Once we get that, let’s go for the next bite. Eventually we will finish the whole whale, or at least we’ll eat what we’re able to stomach.
The stock answer is NO, it will not add to the federal deficit. Note the qualifier – the FEDERAL deficit…FEDERAL. Now your personal deficit and that of your employer, well, that’s a different story. The government won’t speak for business. Government only addresses the federal cost issue. Hmmmm.
The Next Question: How will it impact Your Pocketbook?
Funny you should ask. The plan calls for 50% reduction in Medicare Part D prescriptions at a cost of $8B to the pharmaceutical industry. If you are naive enough to think pharma is simply going to cut $8B in profit to cover this expense out of the goodness of their heart – think again. The price of prescriptions to the private insurance portion of the population will rise to compensate. It’s called cost-shifting. It happens every time the government lowers Medicare rates on what it pays for medical services and products – the lost revenue has to be made up somewhere, and it is made up in increased rates to the private health insurance industry. This is also known as the healthcare policy your employer pays for and that has been eating your cost of living increase for the past few decades.
In addition, there is a law that prevents exclusion on pre-existing conditions. That HAS TO COST MORE for the insurance company to cover. Rates HAVE TO GO UP to cover services that, well, they were not covering before. And plans now HAVE TO OFFER WELLNESS PROGRAMS. Those incur costs that have to be covered as well, so that will increase insurance plan costs.
But the good news is all rates HAVE TO BE THE SAME for all groups. Insurers can only discriminate based on tobacco usage, age, family size and geographic location – all fairly legitimate adjustments to cost. More good news is that the rates for the oldest people can only be as much as 5x (five times) what they are for the youngest members on a plan. That’s a good way to keep costs within an artificially controlled range. But what does that mean will happen to costs? The cost for the youngest in the population (the very folks who put Obama in office) are going to go up – just so the insurance companies can get the 5x rate to cover the exponentially higher utilization of the older population. In other words, the most expensive portion of the population to cover will increase the cost of the lowest portion as they “drag the bracket upward.”
Sounds expensive for those of us on private insurance.
Is this the plan perfect? No way. Is it a step in the right direction? In some ways. Many ways. Is it going to cost more? No. Well, at least it won’t cost the government any more.
If your company is trying to find out how they could save their employees and themselves money now, and after the reform, check out some of the change:healthcare tools for employers. We have some interesting programs that help everyone save money on healthcare.
“If you knew what the price of items were at Wal-Mart before you went into the store to buy them, it would put Wal-Mart out of business.”
That has to be one of the single most insane statements ever written.Yet that’s exactly what many doctors and hospitals would have you believe about healthcare. If you knew the price before you went into the doctors office or hospital, it would put the healthcare provider out of business.
Excuse me?
No. It would not. In fact, it might make the patient consider whether they needed that service or not. It might make them question if they really need all 8 prescriptions.It might make the provider find ways to offer the procedure more cost effectively as John Stossel so elegantly pointed out about Lasik eye surgery.
When someone hesitates to tell you the price of an item, why do they do it?
4 Reasons Why People Hesitate to Tell you the Price:
They are ashamed at having to charge that much
They do not believe the product is worth the cost
They prefer you make an emotional commitment to purchase before knowing the price
They simply do not know the price (the fallback reason in healthcare)
Fortunately, rational thought does occasionally prevail. The recent post from KevinMD.com points out (from the physician’s perspective – no less) that price transparency won’t effect health care costs.
It won’t adversely impact the cost of healthcare. It will force providers to be more cost effective and up front about their costs. It will force consumers to be more selective and engaged in the purchasing decision.
But will knowing the price put healthcare providers out of business? Not likely. In fact, knowing the price seems to be working wonders for Wal-Mart and…oh…just about every other business model in the U.S.
As long as we’re herding cats on healthcare reform, let’s ask a critical question…What is the timing for the changes being made for healthcare reform? Not “when will it get passed” but rather “when will the changes, whatever they end up being, go into effect”?
Logistically, it’s a nightmare.
Healthcare Reform Will NOT be here by January 2010
Employee populations have already been underwritten for 2010. Rates have already been set. Policies are already in place. Open enrollment has already begun. Surely no one would jump in front of that rolling momentum even though the government has the authority to do so. It takes a full year to do all that needs to be done for a health plan when it is business as usual.
[cats like big balls of yarn, and this is a BIG one]
Imagine the implications of just two details…
Insurers Have to Cover Pre-existing Conditions
Insurers Cannot Drop Clients with Extreme Expenses.
In short, the very business practices on which insurers, doctors, hospitals and every company that provides health insurance have built their business are undermined. Wow!
[think two wild feral cats left to their own devices in the barnyard]
Insurance companies would be SCRAMBLING…
to change rates.
to underwrite to new standards.
to negotiate new provider agreements
to develop new policies.
to train people on the changes.
to print new materials.
to engage countless attorneys to understand and interpret changes.
[think of the crazy old cat lady with 72 cats in her one-bedroom 650 square foot apartment]
At the same time, employers would be scrambling to understand and reevaluate their business model as their health plan costs changed. They would be looking to alter their plan in an effort to control their rates and protect their business. They would be struggling to educate their employees. And struggling to meet a bottom line with new rules on one of their single largest line item expenses – health insurance.
[think of the animal shelter stuck with the crazy cat lady's 72 cats - what the hell do we do with these?]
Docs and hospitals and other care providers are little better off. They would have new rules on what is or is not covered. They would be left to figure out how much they could expect in income on those “Good Samaritan” services they had been providing for “free”. They would have new systems and rules to evaluate. Their very business model would shift.
[think of the vet trying to provide services out of the goodness of their heart, but faced with the financial implications of having to spay ALL 72 cats]
Cats would be living with dogs. And January 2010 would be here.
A Similar but Not Related Video that Conveys my Thoughts on This…
Senator Jim Cooper (D) of Tennessee has been one of the most prominent politicians traversing the country on the idea of healthcare reform. In his early presentations on the subject, the approach was a hard line push to get universal coverage (covering the uninsured) with NO FOCUS ON CUTTING wasted expense that could have paid for the program. Cooper is clearly the most articulate and knowledgeable politician I have run across with an in-depth perspective of healthcare AND business. I am convinced that he has a hand in the movement of the healthcare reform to something that will be more beneficial to Americans that earlier plans.
The modifications that have been made in the past few weeks are significant. Socialized healthcare (a wholly government run program) is giving way to government incentives for consumerism coupled with universal healthcare (getting the uninsured covered), and more ethical treatment of members by health plans (no pre-existing conditions and protection from being kicked off of a plan for large claims).
It is encouraging to see that questioning of Senator Cooper and other prominent members of congress have started to take root in D.C., either as a result of that meeting or others. I hope the plan is not finished evolving. Private business needs to get behind the idea of making healthcare more efficient and some are fighting for the opportunity to do that through organizations like SIIA.
For far too long, companies have been passive about healthcare as an outsourced expense and did not get involved preferring to push the burden of understanding this to the insurance companies. The insurance companies obliged and took the power that came with that responsibility.
The government is pushing employers to get involved. Getting employers MORE involved and not less involved is what we help us drive the cost down while improving quality. If employers continue to wholly outsource their healthcare without actively addressing it, look for us to wind up back at the sort of option that Senator Cooper had originally presented.
Lots of interesting bits and pieces in the Presidential Speech last night. Lots of things people wanted to hear like no more pre-existing conditions and no getting dropped from insurance plans if you have a serious medical condition.
I LIKE these statements.
But what do they mean?
Follow the logic…
No more pre-existing conditions and no getting dropped = more costs covered by your private insurance = higher premiums = more employer cost control by raising deductibles to keep their part of the premium down = more costs passed to the consumer.
It’s the way to legislate into a more consumer-directed solution.It’s an assbackward way of doing it, but it should work. Whether all of the parts of government healthcare reform work according to plan or not remains to be seen, but this is one piece that no doubt will DRIVE UP THE COST TO THE CONSUMER and force the issue of consumerism in the private healthcare market.
Consumerism in healthcare has been hailed by many including ourselves as one of the key components in solving the healthcare crisis in the U.S.
“…one of…”
Pushing cost to the patient is merely the first step. Without transparency, consumerism has the potentially devastating affects on the gains that wellness and disease management have begun to make.
Under Consumer Directed Health Plans (CDHP), the patient is responsible for more of the costs. They are often shocked to find that the cost of an office visit is $70, $80, $100 or more. They are distraught to discover that a diabetes maintenance drug runs them $750/month. So while CDHP help to make consumers accountable for the costs they incur, it provides a negative reinforcement as well.
Remembering that the last office visit cost them $80, patients may opt not to go for their annual physical. Aware that the medication was $750 last time, the patient halves the dosage or forgoes the prescription. Not knowing what the cost of a different service is going to be, but having been hit hard for other healthcare expenses, the patient simply avoids or delays care. None of these scenarios bodes well for wellness or disease management.
As a consumer, the patient needs to be educated on how the costs and how the healthcare system works. They need to understand that the annual physical may be covered under wellcare in their plan and comes at little or no cost. They need to know that the same $750 prescription can be had for $450 at a different pharmacy directly across the street. They need to know the cost of services when referred to a specialist before they go, lest they decide they cannot afford the risk of incurring a large expense.
Consumerism without cost transparency and education of the patient/consumer threatens to undo all of the positives that healthcare has been working so hard on in the form of wellness and disease management.
The answer lies in transparency in the system. Make healthcare transparent and the consumers will ferret out the inefficiencies in the system, make rational decisions about trade-offs in quality versus cost, and in the end, the patient/consumer will be the solution to improving the U.S. healthcare system.
Step 1 is Consumerism.
Step 2 is transparency about cost and understanding the health plan.
Step 3 is the consumer stepping in to make rational decisions about what defines quality and what warrants reasonable cost in the market.
Cost plus is great if you can understand the “costs” portion, but most patients do not. Step 2 is to root out the inefficiencies and poor procedures.
For example, it’s reasonable to charge someone an amount for a service well done and efficiently. But for the patient who gets 5 nurses at bedside, 3 specialists and the whole battery of tests to determine that he has a splinter, cost plus is not effective. Cost plus just rewards the hospital with an amount they can pursue aggressively and justifiably in collections. The patient may still be exposed to inefficiencies like improper diagnosis, inappropriate treatment and inefficient practices.
Step 1 is easy. Now for the hard part. Step 2 – improve the standard of care.
Out of Tragedy, a Commitment to Change Healthcare is Born
When both of Christopher Parks' parents passed away within a year of each other in 2006, he was left with more than just grief.
