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.

From Read Write Web, a post AND application  that shoud cause a lot of excitement in healthcare and Health2.0 for possibilities in our vertical:

What Twitchboard does is tie together different services on the social web and automates their interactions. Specifically, Twitchboard watches your Twitter stream and notices when you post a URL. It then automatically sends that link to your del.icio.us account. And, according to the company’s homepage, they’re working on connections to many other services for the future.

Blogger Chris Arkenberg says Twitchboard is a part of the “emerging class of cloud agents.” These cloud agents, as he describes them, will help us sort and search the massive volumes of data we interact with regularly. He envisions that soon we’ll have many of these cloud agents, swarming around us, working on our behalf, helping to parse the data flowing in and providing us with the information that we need, separated from the noise.

If that’s true, then we seriously can’t wait. We hope that in 2009, we’ll start seeing more of these smart cloud agents and less of those “yet another”apps. Developers, start your engines, it’s time to build some real tools.

full article is here

Some interesting stats from the big boys on how adoption of CDHP is going. The numbers are not staggering by any means, but it is reflective of the growing trend toward consumers having to take responsibility. The trend will only accelerate as employers shift to move consumer-centric plans.

Most of the larger companies we have spoken with have the PPO, HMO and now HSA plan options. However, as a bit of clarification, the HSA is generally just a type of PPO with a higher deductible. As companies look to shift to consumer-directed plans the pure PPO will eventually go away and become the HSA-PPO.

Plan design - or a steady reduction in the scope of benefits - has been the traditional approach to holding down healthcare costs. You may be old enough to remember having a dental plan, visions plan and behavioral health - all of which have been partial or total victims of the “plan design” cuts. Before long, we will be able to say, I remember when we used to have a PPO without a high-deductible. That day is just around the corner.

[Alert - this post is openly brown-nosing a friend's new venture launch. And I'm glad to do it!]

Super nice and authentic guy Dr. Jay Parkinson, whom i count as a personal friend and all-around good man, is officially opening Hello Health’s first store-front office this evening.  I sincerely wish that Nashville wasn’t so far away from NYC as I’d really like to be there to personally support and congratulate him.

Hello Health is located in NYC area or more specifically: Williamsburg at 105 Berry and North 8th Street. Members pay a $25 monthly fee, and an additional $75-100 per visit depending on condition.

His idea: target those who are uninsured, and offer them doctor services on a pay-per-visit basis, with the option to text, IM or email when you have questions or concerns. In a new development, Parkinson has decided to franchise his operations (which he now describes as "Geek Squad as doctors with a Netflix-type subscription fee") and is opening his first brick-and-mortar storefront.

I am neither in NYC nor uninsured. But, dang , I wish that someone in Nashville would get "ballsy enough" to open here in Nashville - as I would be one of the first people to sign up.

Ironically, as more employees begin to realize that they are getting more financial responsibility shiffted on to their own shoulders, an obvious unintended shift is/will happen — people are natural consumers and will want [nay, expect ] a better healthcare consumer experience when they spend their own dollar.

Yes, I would expect to hear about more and more people willing to pay for a Hello Health in their city.

So I just got an e-mail from our insurance company about our health insurance. I just HAD to share it with everyone. Bless their hearts, it takes s o little to get insurance folks excited, like when your premium goes up only a little bit. So here it is…
Robert, it is not often that I get excited about someone’s insurance renewal but without fail, it happens once per year. This year, you’re it. Your benefits are going to improve, the premium for an individual employee will go DOWN $13/month and the premium for a family will only increase $17/month. This net result is a total monthly premium for the ENTIRE group increasing ONLY $23/month.
All this being said, I would like to discuss these changes with you and I will need you to sign off on the changes. Please give me a call at your convenience. I can be reached on my mobile phone if you don’t get me here at the office.Thanks! If I don’t talk to you today, have a great weekend.

Kudos to the Nashville Business Journal Health Affairs Editor-in-Chief Susan Dentzer for her insightful comments on many issues surrounding healthcare at the recent Nashville Healthcare Council gathering.

The attention grabbing headline of her corresponding article about the potential for healthcare to be the next sub-prime mortgage crisis rings true though I’m not sure it can all be pinned on HSAs as she does in her article.

Compare the two industries and beyond the similarities in dollars paid out, there are some disturbing lessons begging to be learned.

Housing runs in the hundreds of thousands of dollars for a family. Healthcare has the potential to do the exact same.

Mortgages can easily hit $1200 per month in expense. And at $1200-1400/month for family healthcare coverage, average healthcare premium costs alone are comparable to the size of a mortgage note for many families.

And houses have to be maintained. You need a new roof or air conditioning (that’s where I’m living right now). Those are not small expenses running $5K-$10K per instance. Under all too common circumstances, a major illness can generate bills into the tens and hundreds of thousands of dollars beyond premium.

The financial implications of healthcare are clear. They are equal to if not greater than housing expenses for most Americans. But that’s where many of the the similarities end. And this is where it starts to get worrisome. It is potentially far worse than the mortgage crisis.

With housing, you can see it, feel it, touch it. Now ask yourself if you know what tests your doctor ran that last time you saw them.

With housing you decide when to buy. You decide what the right size house is and the best schools. Healthcare is often times unplanned or in a best case scenario, that pregnancy might give you 7-8 months forewarning, but the cancer did not nor did the broken leg (don’t tell me you were planning on breaking your leg unless of course you had a ski trip planned).

In buying a home, you do your research. Find out what other people are paying. Compare features. Ever tried to find out the price of a strep throat test? Pretty basic, but we’ve tried it, and it’s all across the board. For that hip replacement surgery, did your doc ask if you wanted a plastic of a titanium hip, or did he put in what your insurance would cover or simply what he was trained on and what he knows?

With housing you get all sorts of disclosure information about costs. In fact law requires it. Pardon the uncontrolled laughter, but do you have any idea what you are going to be charged walking into your doctor or the ER? There is no pricetag on healthcare for the most part. Cost transparency does NOT exist and what you pay and what someone else pays for the exact same service can vary dramatically.

In buying a home, you budget for it. It’s a big expense. You don’t go outside of your means and say “Damn it all, that’s what I want and by gosh I’m going to get it even if it’s five times what I can afford.” (OK so those days only recently ended in housing). In healthcare, other than premiums, do you have a budget? Are you on a plan with a deductible? Do you have a co-insurance that saddles you with 10 or 20% of the costs incurred? That can be an unbudgeted $500 or even $10 thousand dollars or more.

Which leads to the terms. For a home, you set up terms. You pay out over 30 years or so. Truth in lending requires them to show you how much you will actually pay out in interest, etc. over the 30 years (try to avoid passing out when you see that one by the way). In home-buying, you set up terms that you are (at least theoretically) able to meet with your income. Healthcare is potentially a home-sized expense. And it generally runs its course within 60-90 days. Not a lot of time for an expense that is potentially the size of your home.

So if you default on your home loan, they repossess it. That’s the pledged asset because on debts that size, no one is going to give you the money for the purchase without securing an asset. Healthcare is really different. They can’t make you take back that nasty gall bladder or break your leg again (though the collections tactics they use sometimes border on that). There is no asset pledged against the expense. Hospital wants the money? You don’t have it. their option is to try to force you to liquidate your assets - like your home. The one you lost in the mortgage crisis?

Does healthcare have the potential to be the next sub-prime mortgage crisis?

No, it has far more potential.

It is like music to my ears when people talk about the dCard.  In case everyones crazy summer plans have caused you to forget about the alarming physician information inconsistencies… here is a brief reminder, and a great highlight from Nashville Medical News.

“Change:healthcare is also tackling a problem that’s been a bugaboo for physicians since the Internet became an overarching source of healthcare information. That problem is information inconsistency. In fact, change:healthcare and a similar technology company in Ohio joined forces to study just how big the problem is. They discovered that selected basic information about several physicians in the two states was wrong as many times as it was right. Thus change:healthcare is one of 12 members of a healthcare-technology consortium that earlier this year helped introduce the dCard – short for Doctor Card. The dCard is a standard format for capturing, maintaining and sharing data about physicians, thus making it easier for consumers to check up on a doctor and for physicians to follow what’s being said about them and correct any mistakes.

“For one thing, the dCard makes sure that when we’re sharing anonymous information about a physician that we’re all talking about the same doctor,” Hendrick said.

The new dCard format contains four sections: personal, professional, educational and training. Personal information includes the physician’s correct

name, specialty, certification, license number and so forth. The professional section includes office information such as hours and insurance accepted. Education information includes the schools and countries where the physician studied. Finally, the training section lists residency and fellowship information and societies.”

For more information on the dCard contact info@changehealthcare.com

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!

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.