Posts Tagged ACA
The U.S. healthcare system is going to change or at least be updated in the coming years. So, when congress tinkers with the system what might be good changes and what might be bad changes? That is the $3 trillion dollar question! It would be fair to say most people and most congressmen do not understand U.S. healthcare — the prevailing notion is overwhelming complexity and way too much cost. However, this blog is going to make the case the key to understanding and the key to making changes is to keep your eyes on the results.
What results? It’s not complicated, it has to do with measurements. Consumer Reports and J.D.Power know we want to buy value. And, value in this case is the reasonable cost for wellness, longevity and successful treatment of disease. That’s it, three things. Whatever changes or tinkering are contemplated we just need to know those three things will be getting better and simultaneously costing less. Politicians have a really bad habit of saying the changes they propose will do the job. Nobody can predict what will work — there are always unintended consequences — so, any proposal must include a dedication to measuring the outcomes we want — if the change does not work it needs to be discarded as soon as possible. And, discarding what does not work can’t wait for the next election and should not wait until tomorrow. Simply, we want results, and we want the data as proof. On a hopeful note, if something works, keep doing it.
The above diagram describes U.S. healthcare. It is more simple than the systems in other countries. The system is linear — people, illness and unlimited money on the left side pass to the results on the right side. This is a flow diagram of the system. The complexity can be hidden by thinking in terms of the five boxes. Later, some of the complexity will be discussed. First, consider the boxes:
- Money to pay for the system. The money people earn is paid to the health care system. Money is money — it does not matter if the money comes by way of taxes, insurance or cash. Funds that do not come from insurance come from the other sources. This is the cost of U.S. healthcare which is about $3 trillion. Don’t pay the money, you don’t get healthcare.
- The healthcare providers. Traditionally we only think of doctors, hospitals and drugs. We often overlook the other things in the box. Things we don’t like, things healthcare providers would like to see in another box. These other things are hugely expensive and fully under the control of the healthcare providers. Unnecessary treatment is perhaps one of the worst — treatment or tests that are not needed. For example, an EKG done as part of a yearly exam on a healthy person. Profit is in this category. Clearly, no profit, no healthcare system. But, profit beyond what is needed is just waste for the system — it is money that leaves the system and does not come back. Inefficiency comes in many forms. Failing to prevent diseases early, only to spend more money later is supremely inefficient. Corruption is a problem in every human endeavor. Errors turn huge amounts of money into waste. The money spent on medical liability suits is just the tip of the iceberg. Money spent to prevent errors is minuscule compared to the money spent on drug marketing.
- Who gets healthcare? Everybody. The aggregate need for healthcare is fairly stable for the system. But, for an individual the need is hugely variable — an auto accident is not predictable. And, when disease strikes most of us can not afford the cost without insurance. Statistics show 50% of Americans do not have access to $4oo for an emergency. The very people who don’t have emergency funds are the very people who do not want to purchase health insurance. Sadly, those people end up in bankruptcy while the system grudgingly provides the care. Now that more people have insurance those without may find less compassion from the providers. Many feel there are freeloaders in the system — people who do not contribute. Does a birth defect, mental illness or low IQ make people freeloaders — that’s an ethical question which is beyond the scope of this discussion.
- Waste. In monetary terms this about $1.5 trillion dollars per year with a huge death toll in the US. A hospital acquired infection is very expensive and kills many of those affected. The high profile infections from spinal injections are just the tip of the iceberg, again. Re-hospitalization for an unresolved health problem is another example. Paying $800 for a $10 epinephrine injector is another example.
- The results. We want those good results. Not just for cancer patients, not just for heart attack victims, not just for you, but for me too. We don’t want promises, we want results. In this age of smart phones and millions of apps there is no excuse for failing to have the data to prove the system is working in our hands every day. We want the results today, not after several years of scrubbing the data in some moldy university. We all must keep our eyes on the results and hold our elected officials accountable.
Complexity. Medicine is a science and by its nature is very complex. Open heart surgery is a good example — there are few people who understand the issues involved. But, the system, from the patient’s view does not need to be complex. In one country the cost of hospitalization is $400/day — the people there know exactly how much the illness will cost. In another country, the prices of office visits are posted in the waiting room — it does not matter what insurance company you might have. In another country all the providers use the same medical record system — not a big deal to move or see a consultant. We seem to tolerate the complexity of our system and think it should be as difficult to understand as heart surgery.
The US pays about twice what other countries do for similar or better care. There is enough money in our system now. Our problem seems to be in the area of wasted money and effort. It seems unlikely that just reducing payments to providers will reduce errors and wasted money — this supply-side economics does not get to the real problem. More than likely, lower payment to providers will only result in lower income for them and perhaps more errors and unnecessary services. But, if it works, do it.
Back to the initial warning. Keep you eyes on the results of the system and the cost. Whether any economic hypothesis proves correct is irrelevant. What matters is the system must move in the right direction, always.
There is a lot to recommend the quality improvement method called “Plan – Do – Study -Act” or PDSA. The idea is to plan a change to a system of care, do the plan, make measurements to study the results then act to change the system to get better results. This is an ongoing process. Congress seems to be mired in a system of management which is one hundred years out of date — if anything, that’s what needs to change first.
Louise Radnofsky of the Wall Street Journal published her story (3/24/16) about illegal immigrants with the observation they do obtain healthcare (at a low level) in the United States. As with any good reporter she just reported the facts. But, what is missing is WHY illegal immigrants receive medical care in the United States. Clearly illegal immigrants are illegal and they don’t have insurance or money to pay for healthcare. So why?
The simple answer is because healthcare providers on the front lines believe all lives are worth saving. And, they will refuse to kill people by withholding care just because society says they should. If society is so stupid to hire aliens, to pay aliens, to house aliens, to feed aliens, and not have a guest worker program then the healthcare system unequivocally refuses to be “the wall” — ask any doctor who sees a 19 year old with an appendicitis — they will fix the problem and ask questions later.
Here is an actual case: 18 year old Manuel (not his real name) is brought by ambulance to the emergency room after a fall and is barely breathing. He is placed on life support then the ER doctors ask the on-call doctors in the intensive care unit to admit him. No questions are asked, he is admitted.
The background later became clear. Manuel’s father was killed in Mexico by a drug cartel leaving his widow and several children. Manuel could not find work in Mexico so he crossed the border to find work to support his mother and his siblings.
He was hired by a contractor to build bleachers for a local school football field. When Manuel fell off the bleachers and hit his head it was the contractor who called the ambulance. There was no money to pay the hospital bill which was over $100,000 — all the services were a loss to the hospital and doctors. And yes, this case and many others like it are passed on to the public and insurance companies through higher rates. That’s how our healthcare system works — like it or not. It’s been that way for decades.
The ACA with the push for universal insurance makes this under-the-radar care more obvious. The ACA prohibits payment for illegals. However, as many large counties in the US have found it is less expensive to provide healthcare, especially for pregnant women, rather than emergency care. One case of cerebral palsy due to complications of pregnancy can cost millions of dollars.
Manual’s case includes some disturbing facts: drug abusers in the US are the reason drug cartels exist and in this case were the root cause of Manual’s need to work. A contractor to a government entity (the county school district) hired Manual and did not provide insurance or workers compensation.
The school district took the lowest bidder for the bleachers and did not specify the workers should have workman’s compensation insurance. The school district should be responsible for the medical bills but they could not afford the medical bills — the hospital did not try to bankrupt the school with suits. There was talk of sending Manual back to Mexico by air ambulance, but the health care system in Mexico could not provide high level care. Absolutely nobody wanted Manual removed from life support because he was an illegal alien — if they did, they would be an accessory to murder.
So, the bottom line, the healthcare system is not ever going to be an accessory to harming people. Be thankful. If your son can’t find his insurance card and goes to the ER with an appendicitis he will get care — they will not tell him to go to the parking lot and just die.
The Affordable Care Act (ACA) does have some teeth to reduce drug prices. The ACA formed a 15 member group intended to restrain the growth in cost of Medicare without reducing benefits. The Independent Payment Advisory Board (IPAB) has powers to improve efficiency and prevent Medicare from being victimized by business interests.
Mergers of large pharmaceutical companies have created near monopolies for setting prices — the new specialty drugs are a case in point. Also, by repeatedly suing smaller companies and generic manufacturers the competition is under siege if not defeated. The huge rise in drug prices have become a national disaster because individuals and Medicare just can’t afford the price gouging.
The IPAB has some power to help the problem — hopefully they will act to implement reference pricing of new drugs. It forces drugs with a similar effect to charge the same amount — old drugs and new. So if a new wonderful drug “Neximabob” is no better for arthritis than ibuprofen then the prices must be the same.
The Federal Drug Administration can not require drug-comparison research. This has been a wonderful marketing loophole for big pharma. It’s time consuming to do comparison research. By the time “Neximabob” is found to be a sham, billions of prescriptions have been filled,billions of dollars have been paid and Medicare has lost billions. But, you will be happy to know, the FDA says “Neximabob” is safe and effective.
The IBAP can act on expert opinion rather than wait for full comparison research. One option for drug companies is to do the comparison research (which they fight) or do more lobbying (more that the hundreds of millions they already spend).
Guess where the money for drug lobbying comes from? the very tax payers and Medicare recipients who pay for the medications in the first place — it’s just not fair. Next time you hear the IBAP is so so bad you will know who is speaking — it’s not consumers!
Note: According to the Congressional Research Service the IBAP is not currently active because the rise in Medicare cost in 2015 is not enough to trigger actions by the committee. There is some thought it may become active in 2017 unless repealed by Congress.
June 3rd 2015 Kaiser Health News reported the ACA seemed to cause more provider visits for management of diabetes “More Patients, Not Fewer, Turn To Health Clinics After Obamacare”. This is both good and bad.
The “good”: more attention to a patient’s condition is likely to result in better diabetic management, fewer complications, fewer hospitalizations and longer life.
The “bad”: since clinic visits can be billed to insurance, clinics make appointments and make money for each visit. The payment for visits rather than outcome is expensive and a known problem in US healthcare (fee for service). Diabetes can be managed over the phone in many, if not most cases — but there is no money for the provider in that approach. Phone care has a much higher value for the healthcare system and the patient; but, low-cost high-quality (high value) care is not getting the incentive.
The care of diabetics is further compromised by the pharmacy. A key piece of equipment for a diabetic is a glucose meter. The manufacturer almost gives away the meter so they can make huge profits by selling the disposable test sticks. The sticks are not interchangeable, not generic, sold in small lots, each lot sold with a co-pay, each lot requiring a visit to the pharmacy, and the use of gasoline to make the trip. If you don’t have much money the speed-bump turns into a mountain.
The solution: every few years mandate a generic test stick that manufacturers of glucose meters must support. “Uncouple” the meter maker form the test stick maker. And, sell the sticks in lots that last for at least 90 days, and that are sent to the patient by mail. Adjust the payment to providers so that they must contact diabetics by phone to adjust medications at least 2 times per month in order to bill for a medium or high level clinic visit. Also, each provider must obtain patient satisfaction data to prove the adequacy of service.
Addendum: Here is a link to an interesting court case about glucose meters
Wishful thinking is not sound public policy. (Bjorn Lomborg) The South, unlike the rest of the US, has rising numbers of the uninsured. The “Health Reform Monitoring Study” from the Urban Institute is disturbing . Why? Because insurance subsidies were supposed to insure more people. The problem seems to be the money is not reaching the people who can’t afford insurance. The original ACA plan was for Medicaid to cover the very lowest income people then at some higher income level the ACA insurance subsides would take over. Many states in the South did not elect to expand Medicaid so there is a gap between Medicaid and the income level at which ACA subsidies are available. According to the study, the most frequent reason given by uninsured people for not having insurance is: “it costs too much” and second “it might affect immigration status”. The following is a graph is a comparison of each region between 2013 and 2014: The South has a huge problem with health literacy — many residents have no idea how to approach health insurance. About 11% of Southern uninsured people say they do not want insurance — it’s like asking someone if they want a kumquat — if you don’t understand what it is or what it costs you might not want one.
The Governors of the Southern States are hurting people, not something expected. Somehow they thought by not expanding Medicaid and ignoring the ACA the health care problems in the South would go away or get better by magic. Wishful thinking is not a strategy for success.
Again, Steven Brill of Time Magazine twists the knife in the hospital chargemaster with his article “Bungling the Easy Stuff” published 12/16/13. Uninsured patients continue to suffer hospital price gouging and personal bankruptcy even though legislative relief was passed years ago when the Affordable Care Act was enacted.
Mr. Brill explains that the ACA prevents hospitals from collecting fees based on the chargemaster (the discredited fee schedule of astronomic charges). But, because no rules were published in the Federal Register no legal help is available to victims of the practice.
How could this happen? Because the work to implement the rules to prevent overcharging did not seem worth the effort, after all, in 2014 everybody will have insurance! Sadly, during the 4 years up to the time when everybody supposedly will have insurance legal enforcement was sidelined.
Although Mr. Brill piles blame on the Obama administration one must also blame those in congress who pass bill after bill to try to stop the ACA — this is unbelievable — one side not implementing the law and the other side trying to kill the law both without regard to the finances of the vulnerable uninsured while hospitals ignore the will of congress and continue an unethical practice.
Mr. Brill has been hammering on the problems of the chargemaster. It’s time to listen and help your fellow citizens — hospital boards need to stop the practice immediately. Citizens need to ask hospital board members why they stand for such a cruel and unethical practice? Perhaps they should give the money back. However, the current plan is to use the money to buy ads to extol the caring nature of hospitals — that will make us all feel better.
I waited a month before before using Connect for Health Colorado because I heard about the insurance exchange website problems. The exchanges started in October. It’s November now so I did it — I purchased health insurance with the exchange. There were a few minor website issues which I will discuss later but, overall it was a vast improvement over what I went through just a year ago. As expected, the price was higher than last year (it’s higher every year, nothing new).
Over the past few years I have had insurance problems. I left my previous employer and their group insurance plan but purchased individual insurance from the same carrier according to COBRA rules — other individual insurance choices were very expensive. After 18 months COBRA came to an end and so did my insurance. Along the way I moved to a different state. So, I had to get new insurance in a new state. I quickly learned insurance companies require payment of the first month premium before they would would consider an application (or tell you a firm price), a definite deterrent to applying for too many alternatives.
I applied to 2 insurance companies and dutifully filled out the 15 page health questionnaire for each. One company, the affiliate of my original insurance company, immediately rejected my application, no questions asked. I suddenly realized I had been designated persona non grata within that national carrier without even knowing it — the possibility of insurance with them had been cancelled. Too old, too many claims, who knows? They advised I contact a state program for people in my situation (increased risk so let the state take the case!)
The other company requested a letter from my doctor and after some anxious weeks they approved my insurance (for which I will always be grateful).
Now, a year later, my new insurance company sent me a letter stating that all their policies were being revised to comply with the new insurance rules. They promised to let me continue as a customer with a new policy but, the current policy was cancelled. Not again!
I fired up my computer and logged on to the insurance exchange. There were four insurance company choices. Each insurance company had a quality rating 1 to 5 stars and a list of prices and benefits. Thankfully, my current insurance company had 5 quality stars and was also the lowest priced. I noticed the original insurance company that gave me the lightning rejection last year now wants my business — sorry big buddy, your application is rejected by me!
The information I had to enter was minimal. The only intrusive information required was whether I smoked (heaven forbid) and my race. But, compared to the questions last year this was a piece of cake. Last year it took me 6 hours to get through all the questions, now the whole process took only an hour. Last year I felt like every question was intended to disqualify me or find some evidence of a preexisting condition. This year the pressure was off.
I added the insurance to my “CART” and checked out. I must pay the first month premium, but not right now. Finally, there was the “DONE” button which was a nice touch.
As I mentioned initially, there are a few website issues. On several pages the prompt to enter information overlaps with the actual information field. One page opens at the bottom not showing missing information at the top — when submit is clicked the site says information is missing — I scroll up and fill in the blanks. Finally, the system has difficulty finding my current provider’s name — only by using “ADVANCED SEARCH” is it successful.
Overall, I am very satisfied with the experience. I suppose people who have not applied for insurance in the past few years will fail to realize what a huge mess we had. Health insurance cost needs to come down — fodder for more blogs!
President Obama vs. Republican Congress. Another grudge match, the sweaty pugilists in the corners, puffs of smoke from the cigars in the front row, the referee holding the mike, saying it’s the 8th round, the clang of the bell, the jabs, the left hook, bam – a hard right to the teeth, finally the round ends with a flurry of punches under the belt. We now interrupt the show for an important announcement.
HEALTH CARE IS NOT A CONTEST. We are not in a reality show, this is real life. The consequences are life and death. Why is there an argument or a fight?
The sky-box view. Look down at the basic arguments of the two sides:
- Obama — health care is a right
- Republican congress — health care is not a right
- Both agree — health care costs too much
The punches and counter punches.
Punch: The southern US has poor health care
Counter: Not our problem, don’t fix it with our money
Punch: Insurance companies are unethical
Counter: They are just businesses trying to make a profit
Punch: Primary care is better and more efficient
Counter: The market determines what is better or more efficient
Punch: Everybody should have access to health care
Counter: Only those who have money should have access
Punch: If everybody has insurance the system would be more fair
Counter: Don’t tell me to buy insurance, I will do what I want.
Punch: Raise taxes to pay for the uninsured
Counter: We can’t afford higher taxes
Punch: We already pay enough to provide good health care for everybody
Counter: We don’t want regulations. Some of us get great health care already
Punch: U.S. health care only ranks 30th in the world
Counter: Poverty and old age are the fault of individuals, don’t count them
Punch: We need government oversight of health care quality
Counter: That’s what lawyers are for
Punch: Women need care for female health problems
Counter: What is good enough for men is good enough for women
Punch: The constitution gives the right to life, liberty and the pursuit of happiness. You can’t have any of those things without being healthy.
Counter: The Constitution says nothing about a right to health care.
Punch: All this fighting makes me forget about poor health care quality and high cost
Counter: Me too.
How much extra are you willing to pay to continue to see your current primary care provider? $100 per visit? $20 per visit, or $2 per visit? That’s an individual decision. But, insurance industry studies show an average person in a health plan would change primary care providers if they had to pay more than $2 extra.
This is one of those dichotomies where people rate choice of providers very highly but in practice are not willing to pay more than about $2 to pick one provider over another. Doctors uniformly place a much higher value on the doctor-patient relationship than patients themselves.
However, to paint the picture with a large brush leaves out details. Patients who have primary care providers that manage chronic illness like diabetes, asthma or migraine headaches are much more willing to pay higher co-pays to maintain that relationship. Sometimes the relationship with a specialist is worth more to patients, but not always, because of a prevailing notion specialists are more alike than primary care providers.
The $2 statistic also includes the huge number of people who do not see a health care provider regularly — they just go to a clinic when a problem arises. In fact, they just want to be seen quickly, the name of the provider is not important.
Over the past 10 years employers have changed insurance carriers on average every 3 years. A change in insurance often forces people to change providers in order to stay “in-panel” and avoid high out of pocket costs. Anna Wilde Mathews’ article “Health Plans Limit Choice of Doctors” appeared in the Wall Street Journal today (8/15/13). She suggests the Affordable Care Act causes patients to change health care providers, an assertion that has no relevance, since that’s how our current system works! Not to say this is good — in fact, forcing patients with chronic illnesses to change providers borders on unethical business behavior.
Conclusion: rather than whine about the Affordable Care Act we need reasonable legislation to improve US healthcare, NOT legislation to return to something worse. Businesses should not have to change health plans so frequently. We need more large high functioning health plans (like Kaiser Permanente and a few others) so businesses don’t feel the need to change insurance carriers so patients can keep the health care providers they like.
According to Louise Radnofsky of the Wall Street Journal 7/1/13 “Insurance Costs Set for a Jolt“. Should this really come as a surprise?
No surprise indeed, because very little has been done to reduce health care costs. The ACA has 2 important financial provisions:
- Everyone must purchase insurance
- Insurance companies can’t cherry pick healthy people and dump the rest on public institutions.
The rise in total cost of US health care will continue but those who pay for it will change. The bizarre system the US now has which forces hospitals to care for the uninsured by cost-shifting to private insurance will stop. The cessation of cost-shifting will make costs more transparent but not smaller.
The problem is in the transition from one method of finance to another. As the transition proceeds hospitals get a windfall profit, insurance companies raise rates due to uncertainty but score a profit with so many new policies, premiums rise for many, and taxes go up for some. Eventually, the system finds a new equilibrium.
Sadly, Congress has been paralyzed by partisan issues so no improvements to the ACA have been made and no actions taken to make health care more efficient. Other countries with health systems seem to steer the ship of healthcare but the US can’t seem to disengage the autopilot.
It seems likely that each State and even some large cities will need to act without help from the federal government. We need ACOs to reduce cost and States could help that system grow.
That’s my view, what’s yours?