Archive for category Response to SIA Poll

Tiers of U.S. Healthcare

A recent U.S. presidential-candidate debate included proposals on Medicare-for-all, care for illegal immigrants and private insurance: supposedly a three tier system. Exactly which existing tiers would be removed, which would be funded and how would the budget for care work?

Consider the layer cake of U.S. healthcare, as it exists. Start at the top where little figures of a bride and groom might stand. That is the highly-privileged care provided to members of Congress and many government employees (“Cadillac” health plans with a large percent government subsidized plus pre-tax perks). That insurance provides good care (not as good as the care in the French system, but pretty good).

The next tier is the “CEO” or “rich guy” healthcare. They have so much money they don’t need insurance. They just buy what they want at big name hospitals with private suites staffed by nicely dressed doctors in suits and young nurses with little pointed hats. The motto is “whatever you want”. CT scans of everything happen at least once a year and heart tests proceed just because “you can’t be too careful”. And, heavens, the food you like is on your diet. Rating of care: poor.

The next tier is a hodgepodge of layers or “options” offered by many insurance companies like Blue Cross, UnitedHealthcare, Aetna etc. These are mostly provided through an employer group plan. And, sometimes purchased individually at a higher cost if the person is part-time or retired before age 65. Some plans have high deductibles and high co-pays that financially make care difficult to obtain. Some closed panels of providers limit where a person can obtain care and limit the options for moving or travel. The insurance companies scrape off 15% of the icing (administrative fees). Rating of care: fair to good.

Next is the Medicare tier divided into several layers including Medicare with a supplement (fee-for-service) and Medicare Advantage (per-capita). Rating of care is good with a plus for lower cost compared to the higher layers. Unfortunately, Medicare does not negotiate drug prices according to laws supported by drug companies. Rating of care: good.

Next are decorations of socialized medicine. These include the Veterans Administration, Indian Health Service and various levels of military healthcare (Tricare). Rating of care: good.

Next is Medicaid. A State run and federally supported insurance for the poor. It is limited by budgets and willing providers. Rating of care: fair if you qualify, but many who need care don’t qualify for a variety of reasons.

Finally, the bottom layer. The layer for those with no insurance and no funds. All States require emergency rooms to provide care to “stabilize” a mental or physical illness. Anyone can obtain health care in the U.S. based on this nearly insane model where people wait until they are really sick to receive care in the most expensive setting. The bills, which none in this layer can pay, are astronomical and serve only to further bankrupt the unfortunate. Rating of care: poor with no connection to a primary care provider or mental health follow-up.

In conclusion, the recent superficial debate about healthcare seems to hinge on hot-button issues like rich insurance companies, greedy drug companies and desperate immigrants who become sick. Of course healthcare costs money — only a politician would say otherwise. The healthcare system we have or will have is exactly what we plan.

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Medicare For All — what does that mean?

Bernie Sanders popularized the idea of US national healthcare during his 2016 campaign. He described the idea as “Medicare For All”. That was a genius idea since most Americans have a family member with that program for seniors. In fact, with its 44 million participants it represents a very large, although incomplete, national healthcare program. It is very popular among seniors since it reduces insurance premiums dramatically.

There are two major versions of Medicare: Standard and Advantage.

Medicare Standard

  1. It sets the allowed price for hospital and medical provider services
  2. It pays 80% of the “allowed” price leaving 20% for the individual or a “medical supplement”.

Medicare Advantage

  1. Limits participants to one insurance company or organization
  2. Has lower premiums
  3. Wraps Medicare and a supplement together

What about Medicare For All

  1. What about premiums or supplements or services? (the specifics need to be chosen, not guessed at.) It’s like a dream house, but without a drawing or a list of deliverables.

The Choices

This is really the nuts and bolts of a national plan no matter what you call it. And, if the current providers sense they will make less money, the self-serving complaints will be very loud. Who will complain if patients don’t get a better deal — not very many people. That’s because not very many people understand healthcare. So, what do you as a consumer want?

☐ Same old insurance, high drug prices and poor quality
☐ Premiums paid via payroll deduction
☐ Premiums paid via annual income tax
☐ Allow supplemental insurance for non-covered items (like plastic surgery or special drugs)
☐   Profits for drug companies limited to 5%

All covered medications available for $10/month
☐ All approved hospital days available for $400/day

☐ Out of pocket annual expenses limited to $5000/year
☐ Approved child medical care is free
☐  0.5% of premiums for research
☐ Regional claim processing (by current insurance carriers, limited to 5% profit)
☐ Limited list of available medications, generics are required where available, brand name drugs are selected by the plan
☐ 30% of provider payments linked to quality and quantity measurements
☐ Medical school tuition paid in exchange for 5 years of service in designated (poorly served) areas
☐ Mental health service included same as other health care (includes PhD psychologists)
☐ Maternity care, including midwife care at home when safe

☐ Primary care provider available for all persons
☐ Physicians and surgeons are salaried (not paid by number of services)
☐ Same day service for urgent problems
☐ Clinics open nights and weekends
☐ Massive increase in numbers of physician assistants and nurse practitioners with tuition paid in exchange for service

☐ Video visits with providers via Internet if desired
☐ Hospitals paid according to diagnosis (DRGs)
☐ Regional specialty hospitals (5% for growth and development)
☐ Local general hospitals
(5% for growth and development)
☐ Providers all use the same secure medical record
☐ Annual adjustment of payment levels based on a budget

☐ Ongoing and up-to-date quality measurements on all services
No need for malpractice suits — immediate compensation for injuries instead
☐ Strong quality system capable of sanctioning administrators and providers (important!! may need lawyers here)

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Insurance CEO Paid $66,000,000 — for what?

hatinringThe author of this blog is willing to be the CEO of United Healthcare for a mere $60,000,000 / year.  That would save the insurance company 6 million dollars a year — a real bargain.   So why does United Healthcare need a new CEO?

The Wall Street Journal reported today that United Healthcare (the nations largest healthcare insurer) can’t seem to make enough money with clients who get insurance on the government exchanges.  They feel other insurance companies should have those pesky patients, who cost more for a couple of years, because they did not have insurance before.

United Healthcare (NYSE:UNH) has been having a lackluster financial situation for the past few months, like almost all other stocks — perhaps a little worse.  Reports show the health insurer will lower its earnings-per-share outlook to $6 per share, down from its earlier forecast of $6.25 to $6.35 per share.

Could it be that the 25 cent drop in earnings is due to business on the exchanges? — surely it’s not the fault of the CEO?   But, why take a chance, get a new CEO.  The company could get a new CEO for half the price and even might be able to snag someone with a PhD in economics to help figure out what to do.   Duh — lower the operating costs!

Presidential candidate, Dr. Ben Carson*, says insurance companies should be low-cost non-profit operations simply to process claims.  It makes a lot of sense.  Why is so much profit being extracted from the US healthcare system by insurance companies?  It does not need to be that way.  The companies keep about 20% to 25% of premiums for CEO salary, expenses and profits.  In France, insurance companies are limited to 6%.  Yes, it can be done.

 


 

* This is not a political endorsement, just an observation.

 

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The Emergency Room — high cost of care

ER signPeople go the the ER but often do not get admitted to the hospital.  Why does this happen?  Do they think the problem is an emergency or do they just not have access to other health care?  The CDC presented the following data from 2011:
ER_1 ER_2 ER_3

(note respondents could answer yes to multiple items)

The bottom line:  people who go to the ER but do not get admitted do so because they think the problem is serious, but 80% also say they lack access to other providers.

Social factors often force the ER visit:

  • No primary care provider has been established
  • Primary care does not have enough walk-in capacity
  • In rural communities once the few primary care offices close there is no other alternative
  • Work hours force evening or night care for family members
  • ER is closer than other options
  • ER is more willing to see someone without insurance
  • Patients seek continuity of care once they have been seen at the ER — they return.

A not uncommon scenario is when a single parent picks up a child from day care only to find they are sick but doctor’s offices are closed.  And, the parent is expected back at work early in the morning.

Possible solutions:

  • Encourage urgent care or “community ER” clinics.  In many larger cities doctors or hospitals have opened urgent care clinics — they are not intended to provide continuity of care but just service when needed.  In the UK such clinics are often staffed by nurse practitioners.
  • Assign one provider in a primary care office to walk-in duty — thus increasing the capacity for unscheduled visits and allowing the other providers uninterrupted time to see scheduled patients.
  • Locate some primary care clinics with extended hours next to the ER.  The patients can see a primary care provider at a lower cost — but if the problem really is critical the ER is next door.
  • Use the phone more.  Also, use Skype since it is encrypted and should meet HIPPA guidelines.  Cost would be lower for everyone if health care providers made better use of technology.  Accountable care organizations (with less fee for service incentive) should find the lower cost aspect very attractive.
  • Provide more mobile care.  Some enterprising ambulance services provide service on location and don’t actually transport the patient to the ER.  Unfortunately, the overhead cost is rather high — but the same can be said for the ER in general.  It’s like the guy who comes to your driveway to replace a car windshield.  Instead, you might get a laceration sutured in your kitchen!  Or your child with a sore throat could be checked with a strep-screen.

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Warning: Price could cause ulcers — CMS drug data

purplepillThe purple pill tops the list of the most expensive drugs for government health programs in 2013.  No, your first reaction to blame the government is wrong — the drug is prescribed by health care providers — and, the government is prevented by law from negotiating drug prices.  Why is this a problem? –there was a perfectly fine OTC generic substitute available in 2013 at only 6% of the cost.

WHAT???  Prescribers wrote prescriptions for a drug that could have been substituted by an equivalent drug and saved 94%.  OK, at the margins of the argument, at the fringes of reality, at the level it makes no clinical difference, big pharma says it might not be a perfect substitute.  A good example where the “perfect”  is the enemy of the very good.

But, how could prescribers and patients have the wool pulled over their eyes? — fantastic marketing.  And, by the way, if you take this drug, send me your name, address, social security number, and bank account number,  I have a nice bridge to sell you.brooklinbridge

The magnitude of the problem became crystal clear when CMS published prescription data.  The following data is widely reported from CMS as the spending on drugs through Medicare’s Part D prescription-drug program in 2013:

Rank Brand Name Generic Name Number of Claims Cost in Billions
1 NEXIUM ESOMEPRAZOLE 8,192,362 $2.53
28 OMEPRAZOLE OMEPRAZOLE 32,250,368 $0.64

Omeprazole is a very good substitute for Nexium for heartburn and reflux.  Despite the cloud of industry generated studies many pharmacists say the two drugs have equal effects.  As the table above shows omeprazole was prescribed 4 times as often as Nexium but the providers who chose Nexium created a vastly larger and unnecessary cost.  Why Nexium is even be on the Medicare Part-D formulary is a mystery.  Who pays the bill? — taxpayers, of course, and the patients who paid a co-pay higher than the full cost of an equivalent.

In 2015 Nexium became an over the counter drug (OTC) and just as you might suspect it now costs about the same as OTC omeprazole — about $32 for 56 pills (at Costco) rather than $300.

Where is the oversight?  Where is the cost control?  Why is US healthcare so expensive?  Need more examples? Just look at the other medications on the list.

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Urinary Retention — 1 in 10 men over 70

urologybillboardOne ER visit is a red flag — more ER visits for the same problem become an example of  poor quality health care.

Urinary difficulty is something older men don’t like to talk about.  But, 1 in 10 men over the age of 70 will end up in the emergency room with urinary retention — an uncomfortable situation where they can not pass urine.  Urologists are aware of this frequent problem — see the billboard story.  It is a serious problem;  in third world countries it may be fatal.

The usual cause is enlargement of the prostate preceded by symptoms of slow and frequent urination.   Sometimes there are few symptoms until a painful inability to pass urine forces a rush to the emergency room.

The usual medical approach is to insert a tube (a catheter) into the bladder to relieve the pressure, start a medication to help urination, and 3 days later to remove the catheter.  50% of men can then pass urine adequately (for a while).  The quality issue is that 50% have a recurrence within a week — so is another ER visit the answer?

A friend of this blogger landed in the ER a total of 4 times with urinary retention.  Why is the ER the center of after-hours treatment for this problem — once identified as an issue why is the health care system making it a recurring emergency?

The solution is Urologists need to own the problem and provide adequate patient care 24 hours a day once a catheter is removed.  Yes, own the problem, not turn off the phone and let the ER solve it.  Does that mean the urologist must be at the clinic 24 hours a day?  No, but there must be an arrangement for immediate care — no waiting in the ER, no ER charges, no secondary consultations.  An arrangement with a 24 hour urgent care center may be enough but some back-up plan and patient education are essential.

The majority of men with urinary retention end up having a surgery to ream-out the prostate (TURP).  According to healthcare-salaries.com a suburban US urologist makes $500k to $1M each year.  This is another example of the decoupling of cost and quality caused by involving multiple providers with no common financial risk.

A proactive patient who has a catheter removed should ask the urologist “what is the plan if this does not work?”  and “is there some alternative to the ER since you have already evaluated me?”.  At least find out how to get in touch with the on-call urologist!

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High Medical Cost in Winter Havens — unnecessary testing

mctestswithlegend

Snowbirds:  watch out for high medical costs in Florida, Texas, Arizona and California.  According to Elisabeth Rosenthal in the New York Times 2/1/15 “Patients Find Winter Havens Push Costs Up”.  She points out providers in Florida are the worst offenders — the same place notorious for Medicare fraud!

Ms. Rosenthal highlights one patient from New York wintering in Florida who had a checkup for his pacemaker but did not have any new symptoms.  Many in-office tests were ordered by the substitute cardiologist — tests the patient’s regular cardiologist said were unnecessary.

To be very blunt:  cardiologists, and other providers, who order in-office tests make a lot of money from those tests.  Many studies show providers who profit from tests do more tests than providers who don’t profit from tests.  A medical license is not a license to take advantage of patients or Medicare — profit motivation seems to blind some providers to this distinction.

The lure of profit is made greater by a patient not having any new symptoms, not having any record of previous tests, and not having plans for follow-up visits.  It is like the patient has a sticker pinned on their back:  “TEST ME”.   The choice for the cardiologist is simple: either pay the nurse to spend time getting out-of-town records OR make money by repeating tests.  Make money, right!

Suggestions:

  • If you are on vacation and have a sudden health problem your best bet is an urgent care center.  They can send you to a specialist, if needed.
  • If you have health problems and will be spending several weeks or months away from home:
    • Talk to you primary care provider:  they may want you to call in and give a report on the phone (diabetes is a good example).  If so, no office visit may be needed while away.
    • Get enough medication to last the trip.  Or, get prescriptions with refills at WalMart or Target and have the prescription transferred to a store near your winter location.
  • Identify a doctor to see in your vacation area before you leave.  Ask friends or other people who winter in the area for a recommendation.  Call the distant provider office and get a FAX number so records can be sent.
  • If your primary care provider thinks you need a health care visit while you are away then make an appointment and have your records sent before you leave home — also take a paper copy!
  • If tests or surgery are recommended then call your regular doctor’s office to see if they agree.
  • Give any provider you see your regular provider’s name, address, phone number and FAX number (a business card is good).  Request that results of visits, tests or hospitalizations be faxed or sent to them — and make sure it happens.  Fill out a release of information form while you are at the office or other facility.

Bon Voyage!

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