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.

That’s right!  Our new cost savings alerts for our TPA and employer clients (i.e. our employee users) are finally here… and boy are they hot stuff.  Now an employee can log into their change:healthcare account to see specific ways they can save money on their prescription expenses.  And all they really have to do is log in!

When they log in and click “YES! SHOW ME HOW NOW!” on the alert, we present them with all the information they need to go about making that smarter healthcare decision.  It sounds crazy… but it really is that simple.

Check it out! (Have no fear… consumers your alerts will be coming soon.)

New Cost Savings Alerts from change:healthcare on Vimeo.

I am soooo behind on sharing everything that is going on around me related to healthcare, employers, consumerism, and the proposed government ‘public plan’ for healthcare [I get 2-3 phone calls a week from various system constituents and politicians posing questions, ideas, or plans around healthcare consumerism].  However, what causes me to perk up is when ‘front-line and in-the-trenches’ discussions surface across the blog-o-sphere such as the one taking place over on Dr. Jay Parkinson’s blog of HelloHealth [click here for the blog post].

Of most interest to me (selfishly) is an insightful comment made by the Orthopod:

…In one of the only examples of its kind, a true randomized placebo trial was published on this in NEJM and there was found to be no difference in outcome for knee scope in pts with joint space narrowing, yet the procedure continues to be done at a very high rate.  Why?  Because it pays $800-$1000.  And it takes 1/2 hour.  In fact there are studies showing that people who get scoped, go on to get a knee replacement sooner.   I don’t know if any committee is the solution.  Since patients don’t pay their own money, they are not incentivized to ask the right questions or be skeptical enough. And the CMS fixed pie system makes the PMD/ specialist war almost inevitable.  Sad.

PUH-LEAZ-EEEEE  go read the full post but MORE IMPORTANTLY read further down where the Orthopod adds a longer follow-up comment.  This frame of reference from the front-line is worth the 10min time it takes to read.

Nice, Jay. Simply Nice and Well framed.

As of April 1 in Illinois, they have taken step 1 in protecting the uninsured. A new law caps uninsured patient bills at cost +35%.

Hooray! A good first step!

Now don’t rest on your laurels, Illinois.

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.

Still, congrats to you Illinois!

In a recent survey conducted by Hewitt Associates, about 20% of employers said they are planning to stop offering health benefits over the next three to five years.

Sad… as if we need another player in the health care game to quit! See Workforce Management for more details on the study.

Equally as interesting as those planning on leaving the game are the priorities of the employers who plan to continue to offer benefits. “Promoting employee accountability” was ranked as the number one component of employers 2009 health care strategies. “Offering competitive benefits” and “managing health risk” came in at second and third.

What I have to say is directed at those who plan on dropping benefits and those who plan on keeping benefits and promoting employee accountability:

LET change:healthcare HELP!!! Our site and online tools help employees save money (which saves the employer money) and make smarter healthcare decisions.

The problem is apparent… we are asking employees to be responsible for their health and healthcare when they still do not know what health care really costs, they do not have enough skin in the game ($20 co-pays are not going to increase responsibility) to care, and those who are on CDHPs are lacking the tools to understand how to save money and make better decisions.

The message to employees is simple … we want you to get engaged.  There are tools out there (if we are working with your employer) that will show you simple and tangible ways to save money on your healthcare… tools that will show you what your peers paid (the network price) for services and prescriptions you need, allowing you to proactively research costs and quality, allowing you to become an active participant in your healthcare.

The action for employers… call change:healthcare.  We want to help you preserve your benefits and engage (keep) your employees. We want to help you save 30% on your healthcare.

Healthcare does not have to be daunting and saving money does not have to be hard.  Let us show you how we make both of these things simple!

change:healthcare inc. is seeking a motivated individual looking to gain experience in the fast paced internet-based healthcare technology industry. Tasks for this position would range from assisting with health industry research to evaluating current and competitive products. Assist in coordinating implementation, facilitate/create new marketing campaigns, and participate in the product development process.

Distinguishing Characteristics:
Applicants should possess an interest in healthcare and its impact of society, Web 2.0, social networks, as well as the industry transition to increase quality measures, consumerism, health data exchange, and cost transparency tools. Strong social and communication skills, self-starter, entrepreneurially minded.

Email your resume and cover letter to info@changehealthcare.com.

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 saw the CNN report on 13 million uninsured 20-somethings in this country. New to the job force and turning down their health insurance.

What are they thinking?!?! Do they believe that they can just go out and buy what they need in terms of medical goods and services on the free market? Good grief! This is America for goodness sakes.

So what are they doing in lieu of buying insurance?

Radical things like minding their health– watching what they eat, working out, bundling up before they go out in the cold, washing their hands (oh, these kids – they’re like modern day hippies shunning the norms of society).

They go to the doctor only when absolutely necessary instead of for every little ache and pain. They go to retail clinics (like Minute Clinic and The Little Clinic) where they know the costs BEFORE they buy (oh my, what are these kids coming to wanting to know the price before they blindly incur the expense). They look things up on the internet (It may be MY chronic disease but shouldn’t the doctor know more about it than me? He treats it, and I only live with it…every single day of my life).

But why should these 13 million have insurance? In case something happens.

Hellooooo – they’re 20-somethings and invincible.

But seriously, why should they? Because it underwrites the rates of the older portion of the population. If they don’t get healthcare, they don’t offset the risk pool – they don’t underwrite the older segment of the population. And we know what that means – our rates will go up because they aren’t contributing monetarily (and taking less out than they put in) as we expect them to do.

But we can still get them. In New Jersey, children can stay on their parents insurance to age 30! Thirty!!!! In many other states it’s only 24 or so.

So now I’ll set aside the sarcasm.

What we are seeing is the revolution. The new generation is taking a stand. We have a product – health insurance – AND THEY ARE NOT BUYING! The business world should get the message here. These folks are going to opt for surgery overseas, retail clinics and internet consults. They are going to cost shop prescriptions and doctors. They are going to demand affordable access to care and they are going to want to know the price AHEAD of time. And they are going to return health insurance to truly being insurance – a safety net for catastrophic situations instead of the all you can eat buffet for $20 we have bad for soooo long – too long.

Do NOT think that it is the sage old regime of healthcare executives and politicos in D.C. who are going to change healthcare. It is the 20-somethings. They alone are able to break out of the old ways of thinking. It has been that way generation after generation. THEY have the new ideas. THEY are taking a more rational approach. They are getting organized and THEY are not content to go along with the system as it has been.

Yes, they are 13 million without health insurance…and growing. THEY will change healthcare.

I’m privileged to be part of the change:healthcare team. It’s been almost 8 months since I started and a day has yet to go by that I’ve not learned something new from this dynamic team. I think very highly of the group … and because I know she won’t call attention to herself, I just have to share the ink spotlighting our own Katrina Welty! Two years out of school and her wisdom (in life) and knowledge (of healthcare) is incredible.

Check out the entire story by downloading the PDF!

I have learned not to put complete blind faith in my Insurer. I do NOT blindly pay outstanding balances from providers and assume that my Insurer processed the claim properly, and neither should you as this story will show. Even though I’m a pretty savvy healthcare consumer (this IS what I do for a living – understanding the healthcare industry), this one had me confused for while.

My wife took my kids to a Clinic for their flu shots (No, I didn’t go and get mine, and that makes me far less of a person than those of you who did). Flu shots fall under “well care” on our plan, so there is no charge.

But then I got a bill from the clinic, an in-store deal – very convenient (I know, I should have gone too, stop already). The bill must be a glitch I told myself. I decided to wait and see if they figured it out rather than spend time on the phone with them and with my insurer. Then I got a statement for the bill again. Odd, I thought.

And then, I got a nice letter from Insurer asking me to confirm if I had another insurance plan. I procrastinated, was moving residences, etc. and did not answer that letter. I did not make the connection.

Doing something else entirely, I logged in to the online view of my insurance account (which I must say is a weak “silo” view of the information my insurer has). They only had two claims for the past year. That was wrong, I knew. Hmmm. Must’ve logged into the account for our previous policy (still active 2 years after moving off of that plan – can you say “we never update”). Yup. Logged out and logged in with the other username/password combo and suddenly, there are my claims for the year on my current plan.

Only then does it dawn on me. The clinic submitted the claim on the old insurance and did not confirm new insurance, or if they did, they simply accepted that my insurance info was current with them. My previous plan and this plan were with the same Insurer, so it’s an honest mistake.

So now my Insurer has denied the claim on my old insurance plan. The clinic wants their money because the Insurer denied it. Now I’ve got to go and straighten out both of them because my insurer who had BOTH policies is not able to do a simple lookup on my SSN and determine yes, I do have another policy AND LO AND BEHOLD IT’S WITH THEM!! Who’d a thunk since they only have 65% of the entire health insurance business in the state.

It’s only $60 bucks – 2 flu shots at $30 each, but it’s my $60. It’s money they planned on spending in the plan, so it’s paid in. Most folks would have simply assumed that the shots weren’t actually covered and paid the $60.

Thankfully, I called the Clinic’s 1-866 number, and Mona was very helpful and walked through things with me and resubmitted the claims.

Don’t put too much faith in your Insurer.