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!

Congratulations

Congratulations on your continued progress in gaining commitments from insurance companies to step away from the Ingenix Prevailing Healthcare Charges System (the database most health insurers use to determine “usual and customary rates” for out-of-network reimbursement rates). Most individuals inside and outside of the industry recognize the potential conflict of interest as well as the likelihood that what Ingenix defined as “reasonable” was probably less than reasonable by a significant margin.

And Then I Read…

My understanding of your settlement with each insurance Carrier (such as Wellpoint and Aetna) is based on the following excerpt::

…WellPoint will end use of the [Ingenix] database [to determine out-of-network reimbursements] and pay $10 million to help finance the development of a new independent database administered by a not-for-profit group. Cuomo, who reached similar agreements with five other health insurers earlier this year, said that his office hopes to have the new database operational in six months and estimated that the effort will cost about $100 million (Bray, Wall Street Journal, 2/19).

Without question, I applaud your efforts and commitment to create a not-for-profit entity that ensures objective, transparent and reasonable out-of-network insurance pricing. Spot on, sir. But an estimated cost of $100 million?! Good grief, I was caused to pause and try digest such a staggering expense for an informational tool that shouldn’t, nay, couldn’t cost that much.

A Drop In The Bucket

I then came across a New York Times article (2/18/09) entitled “For Uninsured Young Adults, Do-It-Yourself Health Care.  I contemplated the plight of New Yorkers but also people across the nation and noted that Gov. Paterson of New York proposed allowing parents to claim young adults as dependents for insurance purposes up to age 29. Unfortunately, this approach merely supports what I consider “a drop in the bucket“, as the article pointed out…

If Governor Paterson’s proposal is approved, an estimated 80,000 of the 775,000 uninsured young adults across New York State would be covered under their parents’ insurance plans. That would leave hundreds of thousands to continue relying on a scattershot network of improvised and often haphazard health care remedies.

And then the final straw smacked me in the face via yesterday’s (2/24/09) Washington (Associated Press) causing me to draw a deep breath while reading:

A new government report on medical costs paints a stark picture for President Barack Obama, who is expected to call for a health care overhaul in a speech Tuesday night to a joint session of Congress.

Even before lawmakers start debating how care is delivered to the American people, the report shows the economy is making the job of reform harder.

Health care costs will top $8,000 per person this year, consuming an ever-bigger slice of a shrinking economic pie, says the report by the Department of Health and Human Services, due out Tuesday.

As the recession cuts into tax receipts, Medicare’s giant hospital trust fund is running out of cash more rapidly, and could become insolvent as early as 2016, the report said. That’s three years sooner than previously forecast.

Based on current events and the state of our economy … The Offer

I would like to offer the LIVE and fully accessible healthcare consumerism change:healthcare platform, which currently is processing claims from multiple clients as a vastly less expensive, already HIPAA compliant and available TODAY for data connection to the carriers.

In fact, I would also be so bold as to say that we would offer our platform and Carrier integration for $3 million a year OR our annual operating/staff support cost (whichever is less) and we would immediately engage whichever University or not-for-profit entity you prefer for database auditing and oversight purposes.

I am offering you and the carriers an immediately available, already proven and secure platform that is currently used by employers and their employees to save money (30%) on their healthcare expenses and make informed decisions.  I’d rather you and the Carriers leverage our platform at “cost” than to unnecessarily spend $100 million to build something that already exists.  We would be doing this for the public good, but that’s in line with our company values and founding principles!

Why do we care?

I have been holding back on this proposition for several months, but my blood was brought to a “I’ve got to do something now” boiling point due to the February 19th USA Today article by Julie Appleby regarding double-digit premium increases on the individual insurance market (est. at 17 million people):

At a time when more people are forced to buy their own health insurance because of job losses, costs for many individual policies are soaring…

Among this year’s large rate increases on the individual market:

• Anthem Blue Cross in California has notified about 80% of its 800,000 individual policyholders of double-digit increases, many above 30%. Spokesman Ben Singer says rising medical costs are prompting the increases.
• Blue Cross of Michigan is seeking state approval for a 56% increase in individual premiums. Spokesman Andy Hetzel says the company needs to offset losses stemming from state rules making it the sole insurer required to take all applicants.
• Regence Blue Cross Blue Shield of Oregon will raise rates for approximately 10,000 Washington state customers by 27.1% on March 1.

Another Washington insurer, LifeWise, raised rates 17.6% on Jan. 1, according to the Office of the Insurance Commissioner in Washington state…Some insurers say increases this year for individual policies aren’t out of the ordinary. Aetna, for example, says individual policy increases nationwide range from 8% to 22%.

…The average deductible, the amount paid before coverage begins, was nearly $2,000. Family coverage ranged from $219 to $494 a month with an average $2,600 deductible.

Insurers face shrinking enrollment in group plans because employers are shedding jobs. They also have deflated investment portfolios and higher costs as patients use more health services, says a report out last week from ratings agency A.M. Best. Those problems could lead to “higher rate increases than in the past,” says Sally Rosen, a managing senior financial analyst at Best.

Now it would be foolish of me to urge insurers to restrain premium increases. They are merely operating as businesses as any stock shareholder would expect (though I find a great deal of irony regarding these potential increases that will fall on the heels of the government’s COBRA subsidy plan for the recently unemployed). Yet, due to these decisions, there will be an immense welling of pressure on individuals to pay more for their premiums, swallow higher deductibles, and therefore urgently need help to understand and know where EVERY dollar is being spent and what their choices are.

As the tidal-wave of healthcare cost and utilization drowns individuals bearing the full weight of those costs, a dire need is raising it’s ugly head: The need for access to easily understandable negotiated prices for providers and the services they offer, allowing consumers to make informed decisions as well as save money that most of these people do not have. It’s rather simple, we need to enable a more transparent market for purchasing healthcare services. It’s not THE silver bullet, but rather one of many support mechanism that needs to be put into place.

Not a Perfect Solution, but it’s a start…

So there you have it. The wheels have begun rolling forward and what I am offering may seem trivial or naive but at least let us do something that would help you provide people with an easy to use tool at a fraction of the cost… in fact, at OUR cost.  I am offering our platform to support healthcare transparency combined with your choice of University or not-for-profit entity to ensure that out-of-network pricing remains independent and avoids (in your words) “manipulation”… all for $97 million dollars less than you anticipated. And yes, I really do stand behind this offer. Please feel free to contact me or my team to coordinate further discussions about our platform.

Sincerely,

christopher parks

CEO | co-founder
change:healthcare, Inc.

An individual in our office (their name shall remain anonymous) received a letter from a gentlemen who used to perform “blue collar” work (spraying for pests) on their house and property. The letter was a plea for “some kind of donation,” help may be a better word, because his heart condition has recently rendered him disabled. He has applied for SSDI and medical, but is having a hard time making ends meet during the waiting period.

What do you do in a situation like this?

Well the answer to that question is personal.  However, in reading the letter, I wondered how many people know where to turn for help when they become newly disabled.  How do we make these services more prominent?

My first thought was “why hasn’t his healthcare provider helped him?” and by helped I mean referred him to resources that may be available through his medical center.  Most larger health institutions have assistance programs to help individuals pay for healthcare costs.  Though you must qualify for this type of program, it seems in his situation he would.

Second, what not-for-profit serving heart conditions could direct him to assistance programs in his area?  I know some organizations offer premium and co-payment assistance programs to help constituents pay for care. This would be especially helpful if he is on COBRA.

Third, why are there not resources listed on the web or provided in print when individuals enroll in SSDI and medical. The program has a waiting period - five months.  Doesn’t it seem logical that some (if not a lot of) individuals enrolling in these programs would have a hard time making ends meet during this time, with no pay and potentially no health insurance coverage.  I am confused as to why resources are not suggested to these indivdiuals when they enroll in the programs. (Now I know that SSDI back pays for the waiting period, but that does not mean that individuals do not struggle during those months).

What kinds of programs are out there, and how do you best help someone experiencing a new medical disability during such tough economic times?

On January 9th, the Wall Street Journal published an interesting and especially note worthy article titled ‘Alternative’ Medicine Is Mainstream. The article summarizes and outlines simple evidence that diet and exercise are the best “cure” for our most common ailments.

‘Alternative’ medicine, as the authors of this article title it, is what most of us commonly think of as ‘Preventative’ medicine. The way in which we live our daily lives that will help to stave off America’s most common chronic conditions, such as obesity, heart disease, hypertension… I believe, though many of us choose to reject this line of thinking or simply just ignore it, that most of us know this to be true.

The most compelling aspect of the article comes quite a ways into the piece. Studies have shown that America spent more than $100 BILLION in 2006 on coronary bypass and coronary angioplasty procedures. The article continues, “Despite these costs, a randomized controlled trial published in April 2007 in The New England Journal of Medicine found that angioplasties and stents do not prolong life or even prevent heart attacks in stable patients (i.e., 95% of those who receive them).”  They have only been shown to prolong life in less than 3% of the cases. Further to this point, a study followed 30,000 men and women on six continents and found that lifestyle changes could prevent at least 90% of all heart disease.

So what’s the point you ask?  Well the point is that our healthcare system is set up to service and receive payment for disease treatment.  Sickness treatment - that’s it!!  Our government and private insurance companies are currently paying billions of dollars for procedures that are clinically proven to not extend life.  Why have we not begun incentivizing people to be healthy and the system for keeping them healthy?  Why have we not started spending insurance premiums on health and wellness, and as the article mentioned, finding out what “wellness” or “alternative medicine” works best for each individual?

Lifestyle changes are difficult.  I know!! I hit the snooze button this morning instead of getting up and going on the run I planned. I myself am guilty on not making 100% effort. If it were easy, everyone would be fit right?

But this is not the take away.  No more excuses - that’s the take away.  It’s time we start getting healthy.  It’s time to put down all those pills and pick up a gym membership.  The odds are that the gym membership costs less.  Heck, if you are taking a bunch of brand name drugs, you could probably even get a personal trainer, or a life coach, for that price. It’s time we start trying to change the healthcare system and the most tangible way for everyone to contribute is to make a little effort… let’s start getting healthy!

In an article posted by the Wall Street Journal on January 5th - IBM Chief: IT Investment Will Create Jobs -  IBM CEO Samuel Palmisano presented a report to the Obama transition team stating that a $30 billion  investment in computerizing health-care records, expanding broadband access, and improving the electrical grid could create more than 900,000 U.S. jobs. Considering we spent $2.2 trillion on healthcare in 2007, $30 billion almost seems like small change.

So what are the issues here??

Well first and foremost, IT investments are usually intended to reduce the number of employees and increase internal efficiency.  Will those jobs be short-lived once the IT practices become routine?

Second, the article states that there are very little metrics available (basically none) that site how IT  investments affect job creation. So the report is potentially more speculative than factual?

The good news: the breakdown of the government investment highlights that $10 billion invested specifically in electronic health records could create 212,000 jobs. Not bad.

Dr. Stanley Feld, “Top Health Blogger” by Wellsphere, claims that the healthcare reform agenda has already been set by Obama and Daschle.  You can read his post here.  He has some good points regarding reform and the need to involve physicians in the process.  However, his post struck a chord with me when he wrote about everyone believing that doctors are at fault, and that the government is out to change the way that doctors practice medicine.

I feel that most people agree that the quality of care in our system needs to improve.  Some might agree that reimbursement patterns must shift to reward high quality healthcare and wellness.  Few might agree that doctors are going to have to change the way they practice medicine, whether its integrating information technology and electronic medical records, or estabilishing stronger doctor patient relationships.  I would like to hear your opinions…

In the meantime, I wrote a response to Dr. Felds opinion piece.  It is available below:

“Dr. Feld,

I respect your opinion on the involvement of patients AND physicians in healthcare reform and policy. But without reading the by-line, about half way through your piece, I could tell you were an MD incapable of writing an unbiased piece on healthcare reform.

Problem: Unfortunately, not all doctors are out to service the best interests of their patients and some are most concerned with the thickness of their wallets. When I go to the doctor, why can’t he tell me about how much the services will cost?

Problem: We pay doctors only when patients are sick. You don’t make money if you keep me healthy, now do you?

Problem: The average patient does not understand medicine or the CONFUSING healthcare system.

The worst part of it all - is that I would argue that most MDs do not understand the system either. While I agree with you that “Socializing” healthcare is not the appropriate answer to our problem, I whole-heartedly disagree that the government is trying to “FORCE DOCTORS TO CHANGE THE WAY THEY PRACTICE MEDICINE.”

Let’s not equate “changing the way doctors practice medicine” with “changing incentives and reimbursement.” This is about keeping more people healthy and increasing the quality of care delivered. This is about rewarding physicians for delivering high quality care and keeping their patients healthy. This is about asking doctors to do their job efficiently and accurately. If to do this doctors have to change the way they “practice medicine,” then I might argue that they entered medicine for the wrong reason to begin with.
Transparency. Accountability. Competition. – Its time to make some changes in healthcare!”

I can only imagine how many differing opinions there are about how to solve our healthcare crisis.  But how many opinions are out there about what is wrong with our healthcare system?  Dare I start a list…

Anyhow, in doing some recreational reading and email sorting this morning, I came across a link to an article (sent from a colleague) “Government Contemplates Financial Bailout While Taxpayers File Bankruptcy for Medical Bills – When Will Congress Intervene in Skyrocketing Healthcare Costs?”  Great title, right? As I read through the article I couldn’t help but wonder how many people think that our healthcare problem should be “solved” by our government. Yes, yes, please let the government solve our healthcare crisis (read: tax payers pay for it).

I do not have beef with the article, or with the government “solving” problems for that matter.  The piece is very well written and highlights the problems and costs Americans are facing in relation to their health expenses.

I guess my question lies in this last paragraph, “The unacceptable result of all this is that an increasing number of Americans are foregoing expensive but much-needed drugs and treatments, including those for serious conditions such as diabetes and high blood pressure, which if left untreated can result in worsening conditions, hospitalizations, or even death. The problems in our health care system need to be addressed by Congress now.”

Hmmmm, so what does Congress do… implement a mandatory exercise hour across America?

Our solution has to be a JOINT EFFORT.  This is not solely the government’s problem!!

Yes, a lot of this is their fault. However, I would argue that there are five major players in this mess, one of which is the government. (See my previous posts for the four contributors – since then I have added one). The other four: doctors, pharma (newly added), individuals, and insurance companies. Unfortunately, I have yet to appoint percentages of blame.

The majority of Americans know our system is failing, but are unwilling to make any sacrifices or changes. We have had a third party paying for our care for far to long, with ever increasing bottom lines and stricter rules for coverage. On top of that, the government cannot bail us out of our obesity (or sub other unhealthy behaviors) and sense of entitlement. Insurance companies sure aren’t going to help either.

There are three things that are going to help fix this system, and individual accountability is one of them.  We have to stop running to the doctor every time we have the sniffles. We must make health and wellness a priority – and start exercising.  Second, is transparency.  No one really knows what the true cost of healthcare is.  Guess what folks; an office visit does not cost $20.  To be accountable, cost and quality information must be available to consumers.  Last, is competition.  By being accountable for our decisions, and knowing the true cost and quality of healthcare, providers can begin to compete for our care. Until doctors/hospitals have to be accountable for the quality of care they provide and the amount they charge, nothing is going to change.  Every other market has competition, why should healthcare be any different.

Great article from a freelance writer in The Morning Call. Richard has some of the ledgers from NY and Pennsylvania banks the 1950s to 1960s showing how household expenses were distributed. Of particular note is that the family paid all of their medical bills in cash. When someone came down with a more serious illness, there were more and more payments finally totally a whopping $1084 for a fairly serious medical condition. It offers a great idea of household life during those times prior to privatized medicine and reminds us as we see the shift to consumerism in healthcare that history always repeats itself.

The proof of our book is in and people have already started to latch onto the free downloadable PDF version at My Healthcare Is Killing Me.

Seems like we might have struck a bit of a nerve.

Thanks so much to Bob Coffield for the shout out on the book. Can’t wait to catch up with him at Health 2.0 in just a few weeks. Bob is a master of Twitter. If you don’t know him, he’s @bobcoffield.

We’ll probably catch a lot of hell from Steven Krein at OrganizedWisdom for not calling it change:healthcare, but we’re working on that as another title and hope to have it out before November .

And many thanks to the others like Frank Hone and “Why Healthcare Matters” and Zane Safrit who have started to pick up on the book.

“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.