Category Archives: Health Care

America – Home of Bizarro Health Care

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Bizarro World is a fictional planet introduced by DC Comics where things are the opposite of what you expect, where Superman isn't super. That's an apt description for the health care system in the United States, which is likely the only place on Earth where this story in the Wall Street Journal would not be shocking:

A Better LA, a decade-old Los Angeles nonprofit, said last week it was signing up 50 low-income people for health plans in California's health-insurance marketplace. The charity, which said it has the blessing of the state agency overseeing the marketplace, will pay $50 to $100 a month to cover the share of the people's premiums not already financed by federal subsidies.

Those 50 people are at the vanguard of a push that could shift the balance between hospitals and insurers across the nation. Nonprofits, including some hospitals, say paying premiums would ensure coverage for people currently uninsured who can't afford even a small monthly payment for health insurance.

But insurers say they can't make a profit unless the health-insurance exchanges created by the Affordable Care Act draw a balanced mix of healthy and sicker customers. The law's rocky start, many insurers fear, has already skewed the mix toward people in worse health. Help from nonprofits or hospitals could speed the arrival of less healthy customers into the exchanges, outpacing the arrival of younger, healthier people who might not cross paths with hospitals…

But such plans have drawn criticism. "It is a conflict of interest for hospitals and drug companies to pay patients' premiums and cost-sharing for the sole purpose of increasing utilization of their services and products," said Karen Ignagni, head of America's Health Insurance Plans, the health-insurance industry's trade group.

Jesus.

The Red State ACA Donut Holes

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North Carolina, like many states controlled by Republicans, opted out of the Medicaid-expansion component of the Affordable Care Act. A New York Times article explores the practical effect it's having on those states' citizens:

A sweeping national effort to extend health coverage to millions of Americans will leave out two-thirds of the poor blacks and single mothers and more than half of the low-wage workers who do not have insurance, the very kinds of people that the program was intended to help, according to an analysis of census data by The New York Times.

Because they live in states largely controlled by Republicans that have declined to participate in a vast expansion of Medicaid, the medical insurance program for the poor, they are among the eight million Americans who are impoverished, uninsured and ineligible for help. The federal government will pay for the expansion through 2016 and no less than 90 percent of costs in later years.

Those excluded will be stranded without insurance, stuck between people with slightly higher incomes who will qualify for federal subsidies on the new health exchanges that went live this week, and those who are poor enough to qualify for Medicaid in its current form, which has income ceilings as low as $11 a day in some states…

The 26 states that have rejected the Medicaid expansion are home to about half of the country’s population, but about 68 percent of poor, uninsured blacks and single mothers. About 60 percent of the country’s uninsured working poor are in those states. Among those excluded are about 435,000 cashiers, 341,000 cooks and 253,000 nurses’ aides.

“The irony is that these states that are rejecting Medicaid expansion — many of them Southern — are the very places where the concentration of poverty and lack of health insurance are the most acute,” said Dr. H. Jack Geiger, a founder of the community health center model. “It is their populations that have the highest burden of illness and costs to the entire health care system.”

We're going to be hearing a LOT about the ACA, aka Obamacare, rollout over the next few months. The program opened for enrollment on Tuesday (Oct 1) with a start date set for January and the traffic to the website was heavy enough that it slowed to a crawl.  Like any new program, especially one of this scale, there will be issues but it will be interesting to see if the overall benefits outweigh the problems enough that people will eventually say "Keep the government's hands off my ACA!"

If that does happen it will be with folks like the self-employed who couldn't get on a regular insurance plan that was anywhere near affordable, the employees working for small employers who stopped offering health insurance long ago because they couldn't afford to provide coverage and weren't legally required to, and the folks with preexisting conditions who couldn't get any coverage no matter how much they were willing to spend. Sadly it seems that a huge chunk of the working poor will fall in the "not poor enough" donut hole created by states' refusal to expand Medicaid and won't have access to a program that was most definitely intended for them.

As you can likely tell I'm one of those who is truly hoping that ACA is a step in the right direction for our country. I don't believe it's a silver bullet or that it truly fixes anything, but I'm hoping that it's a step in the direction of a comprehensive, effective reform of our health care system. It's still way too early to see what the end result of ACA is going to be, but quite frankly it would be hard to go backwards from where we've been in the recent past so I'm pretty confident it will be a net benefit for society. On the other hand I seriously doubt it's enough on its own and I hope we continue to look for ways to make sure the neediest have some form of health coverage without bankrupting the rest of us in the process.

What’s In a Name

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This is easily the most unsurprising video you'll see today. Street interviews with people who are against Obamacare but for the Affordable Care Act. If you don't know why that's funny then you may now understand why we have a problem here.

Two big points to make here:

  • This highlights why the names assigned to bills/laws are so important. People like the Affordable Care Act not because they know what it is, but because it must be affordable because that's what they call it!
  • We can also see how effective the relentless hammering home of simple talking points like "Obamacare is Socialist" has been. There's a reason political hacks on both sides of the aisle come up with a couple of simple blurbs and repeat them relentlessly-in this day of 10-second sound bites it's a very effective way to frame an issue.

Enjoy:

NC DHHS’ Software Armageddon

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North Carolina's Department of Health and Human Services (DHHS) is responsible for the launch of two new software systems this year that have experienced significant problems, and things likely will get worse before they get better.

The first problem you've probably heard about: DHHS' rollout of the NC FAST system to handle food benefits, aka food stamps, has been problematic around the state and has led to local agencies working with local food banks to make sure people have access to food until their benefit situation can be straightened out. The problem is that NC FAST is supposed to also handle Medicaid claims as of October 1 and it seems highly unlikely it will be able to do so particularly in light of DHHS' other, less well known software snafu.

Earlier this year DHHS rolled out NCTracks which is a new system to process professional Medicaid claims otherwise known as claims from doctors, medical groups, hospitals and other health care providers. That system is so screwed up that some independent practices have already gone out of business. From an article at charlotteobserver.com:

Karimi, 28, had worked for his parents for the past five years. Their company, Right at Home, had provided home health and personal care to the elderly and people with disabilities in Granite Falls. Karimi handled the billing.

But now Karimi is out of a job and his parents are out of business after a decade. The reason? They weren’t being paid for the Medicaid-reimbursed services they delivered in July and August after the state rolled out its new Medicaid payment system, known as NCTracks…

And it’s not just small providers who are having trouble.

In an interview last week, WakeMed CEO Bill Atkinson said his institution was down $1.5 million since July 1 because of NCTracks. He worried that his billers would have to re-submit all of those claims by hand.

It would be easy to blame the current administration for all this  but the reality is that these systems were contracted long before Gov. McCrory was elected and his folks now have the unenviable task of implementing very complex systems that affect a lot of people. If the response to client issues has been as slow or nonexistent as is being claimed by folks interviewed for these stories then the new administration, and by administration I mean Gov. McCrory's appointees at DHHS, needs to take responsibility and do whatever is necessary to get people the help they need. If they don't we'll be looking at a lot of lost jobs in the health care industry, and in particular we could see some small medical practices under severe stress or maybe even folding.
Glitches happen and anyone who's been through a systems upgrade knows they rarely if ever go as planned, but how an organization responds to those glitches is where the "men are separated from the boys" and right now the DHHS folks look like a bunch of little boys at recess the day after Halloween trying to burn off all the sugar they had the night before.

BCBSNC Affordable Care Plan Rates

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Blue Cross Blue Shield of NC released their premium rates for their various Affordable Care Act plans and while the numbers are very general, which makes it impossible to compare directly to your current plan if you have one, and there's also no way of knowing which subsidies you might qualify for until you can plug your income numbers into the formula. Those subsidies will be significant for some people:

Consumers can purchase the same BCBSNC ACA health plans, and access subsidies, from the Exchange or directly from BCBSNC. BCBSNC’s buy online tool facilitates the transaction for those who qualify for a federal subsidy (consumers purchasing their own coverage with income levels between 100 percent and 400 percent of Federal Poverty Level2). The subsidy impact will be significant for some. For example, a person earning 100 percent of FPL could pay $19.15 per month for a Silver plan.

And then there's this tidbit:

ACA health plans generally offer richer benefits than plans many BCBSNC customers choose today, according to the insurer. In addition to requiring richer benefits, the ACA eliminates the use of gender or health status in setting premiums.

At work we have BCBSNC's Blue Options coverage. It's age-banded so every five years the rates go up pretty significantly – for instance when I turned 45 I cost a lot more to insure than when I was 44 – but when I compare my individual rate with the chart of sample plans on the BCBSNC announcement page I see that my premium is more than a 40 year old's platinum plan, but my coverage (70% of cost) is about the same as the silver plan. This leads me to believe that, all things being equal, my individual coverage might be cheaper under ACA than with Blue Options. 

Another factor working against us at the office is that we have a very small group of three families so we have experienced some very steep increases over the last few years as we each breach those five-year age bands. We've been lucky in that our employer has covered our individual coverage premiums – family/dependent coverage is 100% out of pocket – but the only way to continue that each year has been by increasing co-pays and deductibles, and reducing the percentage of expenses covered from 80% to 70%. If the premiums continue to rise at the 10-30% annual rate we've been seeing the last few years then we're likely going to have to start paying a percentage of premiums out of pocket as well.  Combine those increased costs with access to potential subsidies and all of the sudden those ACA rates look more and more appealing, especially if our employer agrees to raises in lieu of health coverage. 

My prediction? Lots of small employers will decide to forego the headaches of administering a health plan and save some money in the process by prodding their folks to utilize the marketplace. That, of course, is exactly what the marketplace administrators want.

ACA Getting Real

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Despite the noise being made from the lunatic fringe of the Republican party about shutting down the government in an effort to force the defunding of the Affordable Care Act (ACA), the reality we're all facing is that the implementation of the ACA is set to begin in earnest over the next couple of months. For those of us who aren't intimately familiar with the effects that ACA will have on our lives there are now a few resources we can access to try and understand where this law is going to take us. Those resources include:

  • The Nevada Department of Insurance's site dedicated to explaining the ACA and allowing folks to get quotes for the various plans available through the state's exchange/marketplace. Obviously the quotes won't apply to non-residents of Nevada, but the general information is useful to non-residents and the pricing should be someone relevant to other states, especially when it comes to subsidies for lower income individuals and families.
  • The Triad Business Journal has an article about Blue Cross Blue Shield of North Carolina's announcement of its rates this coming Thursday and what we North Carolinians will likely be looking at come the October 1 deadline for insurers to make their rates public.
  • The US Census' site that shows how many uninsured there are in NC by demographics, which is a good indicator of how many people will be eligible for coverage and subsidies under the ACA.

While it's nearly impossible for anyone to predict exactly what's going to happen with the implementation of the ACA, it's becoming increasingly clear that major changes in the health care marketplace are afoot. One thing I personally hope to see is that the NC market for health insurance grows more competitive. We've had what is for all intents and purposes a duopoly in this state for years and it would be great to have more viable, competitive insurers to choose from.

 

Saving Money By Not Using Health Insurance

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Wall Street Journal piece found via Freakonomics explains how not using your health insurance can save you some serious bucks:

I explained that just because he had health insurance didn’t mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man’s policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn’t have been able to enlighten him….

Most people are unaware that if they don’t use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the “list” price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.

So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a “self-pay” (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance.

 

Who Says a Colon Exploration Should Take Two Hours?

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The Washington Post has a story on the 'secretive panel' of doctors who come up with the pricing on all medical procedures:

Unknown to most, a single committee of the AMA, the chief lobbying group for physicians, meets confidentially every year to come up with values for most of the services a doctor performs.

Those values are required under federal law to be based on the time and intensity of the procedures. The values, in turn, determine what Medicare and most private insurers pay doctors.

But the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors’ time, as well as interviews and reviews of medical journals.

If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting. This volume of work does not mean these doctors are doing anything wrong. They are just getting paid at the rates set by the government, under the guidance of the AMA.

So, who's surprised by this? And it gets better:

To determine how long a procedure takes, the AMA relies on surveys of doctors conducted by the associations representing specialists and primary care physicians. The doctors who fill out the surveys are informed that the reason for the survey is to set pay. Increasingly, the survey estimates have been found so improbable that the AMA has had to significantly lower them, according to federal documents…

In the late 1980s and early ’90s, the United States called on a group at Harvard University to develop a more deliberate system for paying doctors.

What they came up with, basically, is the current point system. Every procedure is assigned a number of points — called “relative value units” — based on the work involved, the staff and supplies, and a smaller portion for malpractice insurance…

This point system is critical in U.S. health-care economics because it doesn’t just rule Medicare payments. Roughly four out of five insurance companies use the point system for the basis of their own physician fees, according to the AMA. The private insurers typically pay somewhat more per point than does Medicare.

Once the system developed by the Harvard researchers was initiated, however, the Medicare system faced a critical problem: As medicine evolved, the point system had to be updated. Who could do that?

The AMA offered to do the work for free.

Has no one heard of the fox in the hen house? Sheesh. It's one thing for the doctors' groups to be consulted – they should be – but to drive the entire process? That's absurd.

It’s a Start

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In the past I've written extensively about how frustrating our health care and health insurance systems are in the good ol' US of A.  As I see it one of the biggest obstacles to true health care reform in this country is the lack of transparency in the system, or in laymen's terms, the fact that you generally have no idea how bad you're screwed until well after you've received whatever treatment or service for which you visited the doctor.

That's why I was very interested in this piece at the Triad Business Journal's blog:

Passed last week in the waning days of this year's legislative session, the "Health Care Cost Reduction and Transparency Act of 2013" (House Bill 834) will create an online database of what hospitals are paid, on average, for the 100 treatments they perform most frequently. They'll also be reporting their costs for the 20 most common surgical procedures and 20 most common imaging procedures.

Take a case of pneumonia. N.C. consumers will now be able to go online and compare a variety of prices for that treatment. The database will tell them what Medicare pays for the treatment of pneumonia, what Medicaid pays and the average of what the five largest insurers in the state would pay the hospital.

Additionally, the database will offer up what the charge will be for a person with no insurance, and what the average price that the uninsured are able to negotiate with the hospital to pay.

That's a lot more info than is now available to N.C. consumers, though a clearer picture of what health care costs are in the state is still emerging.

This is what NC's attorney general had to say:

N.C. Attorney General Roy Cooper, who had advocated for several of the provisions included in the final transparency law,praised its passage.

“We recommend that consumers shop around for a good deal, but our health care system doesn’t make that easy to do,” Cooper said. “Giving consumers straightforward information on what medical services cost and what they owe will help them make better decisions about their health care.”

He's got that right, especially when you're talking about preventive or non-urgent care. Obviously if you're in an emergency situation the last thing you're going to think about is whether or not the hospital nearest to you is the cheapest, but when a consumer has time to think having accurate information is the most valuable tool at his disposal. 

What I hope we see in the very near future is an app on our phones that will be linked to a database of ALL medical procedures from all health systems. And while I'm dreaming I'd love to see our state have more viable health insurance options than the duopoly we currently "enjoy" in North Carolina.