Tomorrow marks the one year anniversary of the Mass State Health Plan deadline requiring most individuals to carry health insurance. Though the insurance law has been praised by some and criticized by others, Drew Altman president of the Kaiser Family Foundation believes the law falls somewhere in the middle.

So what’s the main problem, and everyone’s number one concern? COST… go figure.

The USA TODAY article Mass. Pioneering Health Plan turns 1 highlights some of the plans successes and failures. The success story highlights a woman who had lost coverage when she lost her job and was able to get coverage discounted through the state. Lucky – she was even able to get coverage after being diagnosed with cancer. She is now in remission!

Failures? Well the article doesn’t do a very good job of examining this side. They touch on a woman who is self-employed. Her monthly premium last year was $422. In August that will increase to $615. $615 x 12 = $7380. Now I am not exactly sure how that works with tax write-offs (being self-employed) but that number is ridiculous.

Now I applaud Mass for getting their uninsured down to 7%, however the program/law needs to take into account the cost of insurance to everyone… not just those with low income. In a scenario where someone is paying $615 a month for health care , or even half of that, is difficult for me to digest considering the amount of money I make (thank you change:healthcare for covering my health insurance). No wonder people don’t purchase health insurance. At that price… I would be tempted to keep my fingers crossed that I don’t get sick.

With the changes in our economy, especially on the verge of electing a new president, finding a health insurance solution for the whole country is going to be anything but easy. And the Mass approach will not work for every state, or the whole nation for that matter.

Keeping costs down needs to be one of our main concerns. The fact that health care is 20% of our GDP, compared with similar countries hovering around 10%, is proof that something has to change. (I would not harp on the 20% if we ranked near the top of the list for infant mortality and life expectancy… but we don’t, we are actually in the bottom third.)

Our second focus needs to be quality and subsequently preventative care. As one of our partners pointed out, we do not have a HEALTH CARE system, we have a SICKNESS TREATMENT system. The shift to health care must take place.

Renovating a system that is so set in its ways is not going to be easy. As you can see with Mass, its a work in progress, and very few people embrace change with open arms. However, focusing on changing the ways in which we approach insurance coverage and enrollment, as well as the ways in which we approach our health are good places to start. Add in the end goal of reducing cost, improving quality, and extending access… and we can begin to change:healthcare as a country. Since Mass has tried to change first, lets take this as an opportunity to learn from their successes and failures.

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!

I guess I’m a little confused with all of this concern over socialized healthcare. Seems like we’ve already got it . So what’s the big fuss?

Insurance = Socialism

Insurance is based on the concept of socialism.  Assemble a group and they all contribute to the group for the better of the whole to protect the individual. That’s what insurance is. We all pay in. Some really need it and use it and benefit from the group spread of the risk. Others don’t need it as much and they help cover the others who do with an eye toward having their future needs covered. Insurance is based on the most core principles of socialism.

Medicare = Socialism

Medicare is socialized healthcare. The government groups all people over 65 into a single pool. Everyone paid in with taxes and the government covers the majority of costs. So Medicare is already socialized. Ask anyone using it what they think of it. Most will say they are thankful that it is there, but that it does not do it all.

Medicare = Private Healthcare

Private healthcare rates are generally set based on Medicare rates. There are so many services and procedures that it would be terribly time-consuming and inefficient for an insurance company to negotiate each batch of services with a provider on a case by case basis. So they set most of the rates based on a percentage above what Medicare would pay. In essence, they let Medicare lead as the largest insurer in the market (a socialized one at that) and then just follow their lead. The larger an insurer’s group, the closer their reimbursements are to Medicare’s. The small the group, the more they pay.

Insurance = Socialism = Medicare = Private Insurance

So following through the equation, it’s pretty obvious that we already have socialized healthcare. Getting it more socialized will not solve the problems we have – overuse of the system, high costs, quality of care, and inaccessibility to care.

With fully socialized medicine, anyone can go any time is the idea people have. That will not breed discretion, it will only create more overuse as an “all you can buffet.”

The governement is inefficient and overpays at every turn for things. Costs will not be held in check.

Quality – controlled by the government? Oh my. Anyone ever heard the phrase “Close enough for government work? Look at the VA and its recent struggles.

And where are the additional doctors to address this new open buffet? I see nothing where the effort is being made to bring in more physicians to help address what will be an increased demand.

Does everyone deserve healthcare? Absolutely.

Do we want the governement running it? Absolutely not.

There is much the governement could do to improve healthcare, but taking it over is not part of it. Look for some ideas on where they might be able to help in  the next post.

So it turns out that I have been living under a rock the past week and did not hear about the Walmart vs. Shank story until yesterday when Walmart reversed its position. For those of you who have been living under a rock as well, here is a recap:

Ms. Shank signed up for Walmart’s health plan which contains a clause that states that Walmart may recoup money from an employee for medical expenses if said employee collects damages from an injury suit.

Ms. Shank was enrolled in Walmart’s health plan for about 3 months when she was in a car accident that put her in a wheelchair and caused brain damage which took most of her short term memory.

Walmart paid about $470,000 for her health care.

The Shank family sued the trucking company responsible for her accident and received a $1 million settlement.

Walmart then sued the Shank family to recover their costs for her health care. They just decided yesterday to reverse their position.

Now I know that all of the blogs and comments on various news stories are ripping on Walmart for wanting the money.  Everyone seems to be considering the age old question of who needs it more… a disabled woman, or a company with a net profit of around $11 billion.  My background in philosophy and my own moral beliefs tell me that the woman obviously wins.  But there is so much more to consider here…

Last year Walmart paid $5 BILLION to cover their US health care costs.  They provide health insurance policies for full time workers after six months and part time workers after 12 months.  I hate to argue this point, but I would guess that the majority of these employees were previously uninsured and are now even able to provide health insurance for their children and spouses.

I hate to stereotype, but there is this American mentality that health insurance should be covered and paid for by employers… and this lack of social responsibility concerning how much YOUR health care REALLY COSTS.  Yes I believe that our country will remain better off the less that the government is involved in our health care, and that employers should continue to be offered tax breaks and rewards for providing employees with insurance coverage.  However, I also believe that everyone should get more involved in staying healthly, researching their health insurance costs, and  paying more out of their own pocket for health care… cause unfortunately when it doesn’t hit YOUR POCKETBOOK, you don’t seem to care how much it costs.

Now I am not saying that Walmart should be entitled to receive all of the money back for Ms. Shanks health care.  However I think that we need to consider more about what it means for a company (in our capitalist society) to pay $470,000 dollars for a worker who will never work for that company ever again.  As much as we want to make Walmart out to be the big bad wolf, I imagine that situations like this, and the fact their health insurance premiums are increasing anywhere from 8-15% every year (if not more), make them reconsider how their health insurance policies are offered.

So is your company entitled to part of your health or disability settlement??? I would have to argue that in some ways yes they are.  If nothing else they are entitled to a big fat thank you letter from you and your family.  Even though the Shank family has a long road ahead of them, they should be thankful that at least part of it has been paved by a company that offered their family a health plan and paid $470,000 of Ms. Shanks health care costs.

Walmart made the right choice in reversing their decision to take money from the Shank’s settlement, situations like this need to be considered separately within their policy due to the terrible circumstances surround this case.

However, Walmart has to set a precedent, and I think they did exactly that.  They maintained that they’re entitled to the money, but allowed the Shank family to keep the settlement.

I regret that this precedent had to be set in such terrible circumstance, however I applaud Walmart for the decisions that were made.

I must applaud Blue Cross Blue Shield of Tennessee for delaying the release of their doctor info. In doing research for the dCard standard, I personally witnessed the large discrepancies between different sources for physician information – BCBS of TN being one of them. I also applaud the doctors for paying attention to their profiles and bringing errors to light.

The article in the Tennessean today has a great quote. “The insurer’s chief medical officer, Dr. David Moroney, said the delay was aimed at fixing the mistakes. “Because of the sensitivities around this (issue), we’re very intentionally making this a very open process where we’re very actively seeking input and involvement of physicians and consumers,” Moroney said.”

I would like to make my point that I believe what is most important on the consumer directed health front is providing accurate information to all health care consumers. Not just those insured by various large insurance providers.

Also how often are we going to ask physicians to take a look at their profiles and make corrections to the mistakes?

Now I admit that I understand the incentive to keep your data private, or to only share it with your clients, however we are then only making strides on small fronts… helping those individuals that have the benefit of an insurance plan in the first place.

I propose that all those putting effort toward gathering physician data first and foremost join others on the standardization front. I would like to note that we are not only dealing with inaccurate information for hundreds of thousands of physicians, but also inconsistencies in the information that is being collected. Few sources record gender, others record age, while educational institution and graduation year appear on most.

If you have any interest in learning more about the dCard and what other organizations (beside change:healthcare) are participating in this effort to standardize and share physician information check out the Full dCard Release.

Or contact us at info@changehealthcare.com.

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.

Attached is another case study that reflects the utter confusion that healthcare consumers face… feel free to download. Page two is where the ironic humor is captured.

My favorite quote from a “supposed” physician in the case study who’s phone number was provided by the Insurer… “You have reached Veronica and ‘for the masters use…’”

SUMMARY

With the cost of healthcare continuing to grow, change:healthcare wanted to study a seemingly nondescript healthcare service as a snapshot indicator of how costs might impact consumers. We know that as companies shift a greater burden of the cost of employee healthcare to the employees – either through health savings accounts, high deductible health plans, or simply increased premiums — it’s important for employees to understand the impact of their healthcare purchase decisions. Consumers don’t appear to know the variations that exist in the cost of healthcare components. Our premise: if this is true for something as simple as a strep test – which families “purchase” many times during “the season,” — one can only imagine the cost variances for more significant tests, procedures and providers.

RESULT

Of the 13 providers contacted, two were incorrect numbers given by the insurer. One provider did not answer their phone. The staff member at a fourth location quietly suggested the caller take his wife to a retail walk-in clinic, which, according to them, would probably provide the least expensive care. A fifth provider said the caller had to first establish a primary care physician at their clinic before his wife could receive their strep test.

Of the other eight providers, the costs swung dramatically — and seemingly cavalierly — from a low of $50+ at one provider to a range of $152-$259 at another, a swing of 49%. The low was based on a sliding scale formula that involved family income/number of people in the household/and the specific services the physician would have to provide. The high cost provider was not explicit, except to say that the caller “would probably have an office visit around $150, plus $44 for the strep test.” At one point in that conversation, the cost hovered around $259.

Here’s the Case Study for Download… streptestcasestudy2.pdf