Thursday’s Healthpopuli post caught my eye - Hospitals’ fiscal health is eroding. More than 50% of hospitals had a negative margin in Q4 2008. Sounds like the hospitals need wellness and disease management programs to address their ailing health just like patients are getting.

The main reason cited in Healthpopuli for the poor fiscal health is that admissions are down. Another oft-cited factor is the proliferation of HDHP (High Deductible Health Plans) where consumers are left with the first $1500, $2000 or even as much as $5000 of their healthcare expenses within a given year. 

It’s easy to place the blame on fewer people coming through the doors, but who knows, maybe we’re getting healthier or just using better judgement about what constitutes a needed procedure. Maybe our wellness and DM programs are working. Insurance companies and self-insured employers should be jumping for joy at the news because that SHOULD translate to lower healthcare expenses for them in the form of fewer claims - at least in the short term. Hospital should be taking a collective sigh of relief that they can finally slow down on adding yet another massive capital building project to meet the ever-increasing demand. That might save them some of their cash and get them closer to being profitable again.

It’s easy to place the blame on consumers not paying their bills, but perhaps it’s an opportunity for hospitals to take a good hard look at their processes and procedures and address ineffiencies. In reporting a negative earnings period, one hospital identified five reasons they were unprofitable, and there is no small amount of irony in the fact that they attributed $200K of their $1.6M shortfall to overruns in their self-insured health plan for the hospital as an employer.

With the average deductible rate topping $1000 for the first time in history and 20% of employers saying they are considering dropping their healthcare plan, it looks as if simply raising the rates at the hospital is not going to be a solution. Demand is already down. Payment is already off. Raising rates will only further stifle demand and higher rates will only result in increased non-payment. Blood will not flow from a stone no matter how deep you cut it.

Just as a physician must not allow themselves to treat the symptom, but instead identify the disease, hospitals find themselves in the same position. The health system as a whole is diseased - from patient, to insurer, to provider to government. As patients, we are being forced to take more responsibility through increased share of the burden of the costs, wellness and disease managemet programs. Insurers have work to do as well (that’s another post). Governement is studying where they need to go. Hospitals need to begin to look at what they can do in terms of equivalent wellness and disease management programs for their facilities. They need to trim the fat. They need to be more efficient. They need to proactively seek out better long-term solutions instead of resorting to quick fixes as the insurance company all too often forces them to do.

The poor fiscal health of hospitals is not the cause, it is the symptom. Time to get the diagnosis right, start treating the disease and not fixate on the symptoms.

And no sooner than I hit the publish button on this post, Jen McCabe Gorman tweets EXACTLY what I’m talking here on Henry Ford Clinic.

Just had a great interview with some allies in the battle to bring transparency to the healthcare system. I spoke with Kristy Williams of Alijor and for those not familiar with them, the concept is interesting. On Alijor, patients can connect with providers to address their specific need(s). Simply opening a line of communication between provider and patient is a huge need.Alijor facilitates just that and more.

Right now, there is a lot of effort going into the effort to bring transparency to healthcare, and we’ve met a lot of them in the past two years of doing this. We’re going to meet more in the coming years, but it’s nice to find friends in among the fray who are thinking outside of the box and who share our goals.

We need all of the friends we can get. Thanks guys!

We’ve got a hero in our midst.

Well, we always knew he was a neat guy and great boss, but now he’s an official, bona fide hero.
The Nashville Business Journal has just named our own Christopher Parks one of a handful of Healthcare Heroes. In a market like Nashville that arguably has been a healthcare Mecca for several decades now, that’s a pretty big deal. CP was tapped in the “Innovator” category — a professional who is breaking new ground in the medical arena through a new advancement or an improvement of efficiencies or a current initiative.

Many of you are well familiar with Christopher’s story… which is intertwined with the change:healthcare story.

In 2006, Christopher lost both parents to cancer. In working through the piles of medical bills, invoices and EOBs that accompanied their care, he found himself unable to make heads or tails of all the paperwork. Despite having worked seventeen years in the healthcare industry, CP learned that sorting through mountains of medical bills and related documents was more than frustrating. It was almost impossible. And not nearly as much fun as a colonoscopy.

After reasoning that the healthcare system shouldn’t be this confusing, nor its paperwork so overwhelming, he united a variety of programmers and created something he called MedBillManager, a web-based tool aimed at helping consumers organize, track and manage their medical bills. Those of you who have been with us since the early days will recall this product, which also helped users compare healthcare costs and quality with peers in secure confidence.

The product put consumers back in the healthcare driver seat just as the new dynamic of consumer-driven healthcare was gaining traction. So joining with fellow entrepreneur Robert Hendrick, who had his own story to tell concerning challenges with the industry, Christopher created change:healthcare and transformed MedBillManager into the “change:healthcare bill management tool.”

With a focus to promote transparency in the healthcare industry by following the dollar for the consumer.

You know the rest. Today, the company provides cost and quality information about providers, prescriptions, health issues and insurances to consumers to help them better understand and navigate the healthcare system. But Christopher has also been lead us toward employers, as well, to help them help employees take control of their healthcare benefits… and make smarter decisions that save everyone time and money.

A little over a year later, more than 15,000 users are sharing vital information concerning more than 2.5 million providers and 10,000 medical services through the change:healthcare platform.

And it all started with a guy who didn’t like the way the healthcare system overwhelmed him. A healthcare hero.

And I knew him when…..

“The doctors said he’s comin’, but you’ gotta pay in cash”

-The Eagles

We’ve enjoyed a bit of a free ride for the past several decades when it comes to healthcare. Employers and the government have picked up much of the tab. But now we are starting to pay the price literally. Increasingly we are asked to pay for medical services. Locally, The Tennessean just featured a piece on a doc who is going to charge his patients $1,500 annually to maintain access to him. We had best get used to it.

I have nightmares of other businesses becoming like our current healthcare system. In these night terrors, I go to buy groceries, pay a $20 co-pay and then get the bill 30-45 days later, can’t understand what it is I got, have already consumed the product and am expected to pay far more than I would ever have dreamed it might cost.

Predictable costs in healthcare will have to become more the norm. Concierge healthcare is becoming more popular. Just ask Jay Parkinson, M.D. who has had a concierge practice in NYC and is starting Hello Health. He uses REAL docs, not nurse practitioners like the retail based clinics (RBCs), but like the RBCs, Hello Health has [gasp] transparent pricing. You will actually know what you are paying at the time of service. Novel concept.

It’s a different way of thinking and doing business on the healthcare front, but it has tremendous merit.

Our unfettered access to the healthcare system has taken much of the responsibility for our health off of our hands.  As partial proof of that, we can point to our obesity epidemic, overprescribing of drugs for any small ailment and overuse of the system (even I have kids who go to the doc at every sign of a sniffle, and then feel silly for being asked what I’ve done to treat it - I noticed it and brought them to the doc). Not only have we stopped being responsible for the cost, but we’ve also stoped being responsible as a society for understanding and managing our health. I’m guilty.

Now we are paying the price.

So it would appear that I’m not the only one less than thrilled about the balance billing practices of some hospitals:

Here’s what the WSJ had to say.

So the Mass. attempt at “socialized” healthcare turned one year old today. CONGRATS!

Our resident Bostonians on staff @ change:healthcare, George and Vic, must be so proud. Oh wait, they’ve already fled the state to be here.

Nevertheless the plan seems to be working well according to Julie Appleby of USAToday - residents are getting better coverage…and premium rate increases of 5.1 to 9.4% unless you take the person profiled in the article who got a 45.7% increase in premium over the first year’s premium. Wow! Even the private insurance industry is hard pressed to pull that one off!

An excerpt from the article: “I almost fell on the floor,” says Pelletier, 55, of Newbury. “Costs are getting out of control.”

No kidding.

People will eventually make the connection. The decisions you make regarding their healthcare - when to go, whom to see, and what to pay - are what ultimately determines the premium. The premium is an effect, not a cause.

Happy Birthday!

The best thing about this job is that we get to meet some really great people. Today we met some outstanding folks who are going to make a difference.

Cover America made a stop right here in Nashville today and a few of the change:healthcare team had a chance to catch up with them. The cross country trek to capture stories of consumers’ difficulties with the healthcare system is part of a Consumer Reports effort on the healthcare front.

We really enjoyed meeting Meg, Blake, Pauline and Liz. Even got our photo with the RV in Centennial Park, in the shadow of Hospital Corporation of America (oh, how we love the irony of that one). Many thanks to these folks for what they are doing - fighting for the healthcare consumer.

Meg is getting a much deserved break after three weeks on the road, and we wish her a happy mini-vacation.

The rest of the crew is headed on to eastern Kentucky before hitting Virginia. We are going to try and hook them up with our favorite West Virginian, Bob Coffield of the Health Care Law Blog when they hit Charleston.

Let’s be emphatic. Government will not help the country’s healthcare crisis in the least by nationalizing healthcare. However, there are some things they CAN do that will probably ease our pain.

1. Repeal HIPAA

Let’s start with a big one right off of the bat. HIPAA regulations guarantee privacy of medical information. That’s a good thing. Personal privacy is the highest priority we have. But the legislation allows self-serving insurance companies and providers to act in their own best interests and block access to data the very data that is most valuable to healthcare consumers.

2. Outlaw Balance Billing

The practice of balance billing is a disgraceful tactic employed by disreputable healthcare providers. It occurs when a provider bills a patient for the part of a bill that was negotiated as a discount under contract with the insurer! The balance billing comes enough after the fact that the patient, confused by an already arcane system and intimidated by aggressive collections practices, pays the bill thinking it is their portion of the bill.

3. Cut the Employer Tax Break

Cut out the tax break for companies that pay their employee’s healthcare and give it to the employee by increasing their pay to cover the increase. This would push the real cost of premiums down to employees and have the net affect of letting people see more of the true costs of healthcare. Then employee decisions about how they would handle their own care would truly be more informed. Imagine if we treated healthcare insurance like car insurance. Hmm. I have a little ding in the car. Do I call it in and pay the deductible and have it drive my rates up or just cover it with some of that chip paint? Hmm. I have a splinter. Do I go to the ER for $500 or go to the local clinic in the drugstore for $49? Sweet.

4. Cap Malpractice Suits

The multi-million dollar lawsuits against healthcare providers have to stop. They drive up costs astronomically. I understand that there is pain that comes with loss and poor care, but we have become far too litigious a society with too many of us looking for a lottery payout at the end of a lawsuit. It’s becoming increasingly difficult for physicians to afford malpractice insurance. And they pass on its cost to you and me. Docs are also picking up and moving practices from states where they simply cannot afford the rates.

5. Make Docs and Hospitals Post Rates

To me, this is a no brainer. Require doctors and hospitals to post what they charge for treatments and services, which is easy information to access. Government should mandate that rates be posted. I do not care if providers post their billed rate (that’s the rate they charge you before the insurance company gets hold of them and adjusts it down) or the amount they’re ultimately reimbursed. But I think the providers will sort that out pretty quickly once one of them starts undercutting the others by posting their reimbursable rate. Why do you think prices in most commodities come down when competitors start advertising their prices? Because most consumers like value.

6. Disallow Flat Rate Co-Pays

This puts the government in the insurance company’s business, but flat rate co-pays simply keep consumers from knowing what the true cost is. Again, one of the problems with our current system. Consumers are unable to make an informed decision because they don’t have an accurate idea of what the product really costs. Switch to a percentage of cost co-pay system. Some employers and insurance companies have already done this. It gives a consumer an easier way to move into truly understanding the costs without dumping them in cold-turkey like an HSA does, asking them pay the full amount until the deductible is met.

7. Create Competition among Insurance Companies

Insurance companies are licensed on a state-by-state basis as a result of ERISA. The government should centralize this process to create competition. Going state by state effectively holds down competition by limiting the number of choices. There are a few national insurance companies that have gone through the trouble of getting licensing in each state or built partnerships to use networks in other states, but not nearly enough.

8. Monitor Insurance Companies More Closely

It’s unbelievable that my large not-for-profit insurer can build lavish new offices, pay exorbitant salaries and go out and purchase for-profit wellness and disease management companies and other businesses with their excess cash. The government agency responsible for the oversight of this not-for-profit entity is asleep at the wheel. Some customer-friendly insurers return a portion of that excess to their members through premium rebates or reductions, which is smart business in a competitive marketplace. By at least making the general public aware of how companies use their excess, consumers could be mobilized to exert more pressure on insurance companies to keep their costs – and their ostentatious ness — low.

9. Create Incentives for Careers in Healthcare

Wake up Washington! We’re getting older as a whole and needing more care. So help incentivize more people to enter med school. More docs mean more ability for people to get access to healthcare. Usually at a cheaper price. It decreases the demand on the docs’ time which allows them to concentrate and focus on providing high-quality care versus pushing through yet another patient. Also, create more programs to help with med student loans. Perhaps urge more fellowships. Whatever it takes to keep docs from being $250,000 in debt upon leaving school and being in a spot where they HAVE to charge some outrageous amount to cover their malpractice insurance and student loans.

10. Pay for Performance

And we might as well go there. Establish scores for high quality care – the quality of care Americans should come to expect from this country’s healthcare practitioners – and use pay to incentivize physicians to meet and surpass those standards. Make it easy for patients to report who does quality work.

There are many other ways that government could be helpful in healthcare other than socializing it. We’d love to hear your ideas.

Got some nice ink today from our friends over at The Tennessean in the Healthcare section. Thanks to Getahn Ward there.

And double congrats to our friends at Data Advantage who got some in the same article. They have a nice new web site, too.

Be sure to check out what Data Advantage is doing with their Hospital Value Index.

And don’t miss their article in the WSJ!

Congrats!

Ran across this blog entitled medical bills suck. Have to say we empathized with their situation. This is a young couple with a new baby and lacking insurance. That’s a tough spot. They are getting hit with medical bills for the birth of their child now, and the mom despairs about not being able to realize the rest of her dreams of owning a home, etc. because of the medical bills that keep holding them back.

But like the comment I posted says, they probably won’t have to pay the whole bill amount. If they just pick up the phone and call and ask for a discount or failing that, ask to make monthly payments, the hospital will probably negotiate. Some rediculous percentage of people (I think around 60% or more. If I find the source, I will come back and add it) who called and asked for a discount got one.

Making that call can be hard for someone with high moral standards and a strong sense of responsibility. After all, if you incurred the bill, you should pay it. The problem is, the docs and hospitals are not burdened by those same standards. Yes, they are healers and are bound by the hypocratic oath, but that oath says nothing about fair payment between patients. It really would not hurt to add something to that end.

Providers (docs and hospitals) generally charge everyone the same for services. However, what they get paid varies drastically between the uninsured and the insured. It also can vary widely between insured. Uninsured usually wind up with the biggest payments made to providers. Then the privately insured. And then the low cost payors - Medicare and Medicaid.

So. All of that to say that chances are she’s looking at paying the equivalent of MSRP (Manufacturer’s Suggested List Price) or the sticker price for the healthcare. Nobody pays MSRP for a car. You should not for medical bills either.

So pick up the phone and negotiate. You’ll be talking to someone in the back office, not the doc. And there’s little need to be worried that the doc won’t take your appoinment next time. Hell, the doc probably won’t even know what you paid.

Even though providers don’t have to charge fairly, if you need them in the future, the hypocratic oath does require them to provide you with care whether you paid the full amount for your previous bill or not.