Posts Tagged uninsured
Death can be caused by not having a car. If a sick person does not have transportation the effects can be serious. And, lack of insurance makes the problem worse.
A new study reported in Health Affairs finds closure of inner-city ER facilities causes more deaths. Poverty, advanced age, immigrant status, and lack of insurance were correlated with the increased mortality.
Poor people count on the ER as the clinic of last resort — our health system is designed that way — call an urgent care clinic and ask what services are available — “it depends on your insurance” is the answer — “you better go to the ER” is the advice if you have Medicaid or don’t have insurance.
Why wait until the last minute? Because, there is always hope the health problem will get better, the chest pain will subside, the blood in the stool will stop or the arm weakness will vanish. Once the heart attack hits, the bleeding is worse, or the whole side of the body is paralyzed the chances of death are much higher.
If you don’t have money one of the greatest concerns is NOT getting admitted — how do you get home, how do you pay for outpatient medications and how do you pay for the ambulance ride ($1000)? The logic is simple: wait until you are REALLY sick.
The ambulance-to ER-to-operating-room is usually a very profitable supply-line of patients, so lots of resources have been lavished to make the system work. If the ambulance-to-ER system brings diabetes, pressure ulcers and urine infections it drains a hospital’s resources, and finally leads to ER closure.
A good health system would provide transportation, guaranteed urgent care, medications and transportation home for a low-cost package price. The unloading of the ER might actually save the ER, save patients with true emergencies, and save poor patients who get care earlier. Wow — and what if that urgent care center was right next to the ER so if there really was an emergency it could be handled.
But no, all that would require planning and a health system where hospitalization was an overhead expense, not a profit center. So, the only viable solution in the US: include vouchers for ER visits with Cadillac purchases or golf club memberships.
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.
Two days ago the Centers for Medicare and Medicaid Services (CMS) published the fees hospitals charge uninsured patients. These fees are called the “chargemaster” of the hospital. Hospitals point out that most people have some type of coverage. That is true. But, 50 million people do not have insurance and the fees apply to them. The following are the statistics for Colorado hospitals for which CMS presented data on the charges for heart attack. The column in pink is the amount charged and the MC Allowed column is what Medicare has calculated as a fair payment.
Hospitals are businesses and can charge what they wish for services. Except, many hospitals are “not for profit“; which means the money they would normally need to pay in taxes is instead used to benefit the community. They often prove that benefit by writing off the money they can not collect from people who lack insurance.
The unfortunate effect is that hospital charges are the number one cause of bankruptcy. Furthermore, the extreme penalty of the “chargemaster” for people without insurance drives people to purchase insurance — certainly a happy situation for insurance companies.
If you go to any health insurance web site you can see what the “chargemaster” penalty actually is. Look at the charge for the highest deductible policy. That charge, in large part, is the fee to benefit from insurance company negotiations with hospitals. Of course, the hospital makes the charge very high so any mark-off for insurance companies is just for show. This is an old retail game — raise the price 100% then have a 50% off sale.
A simple solution:
If the charges by hospitals were restricted by law not to exceed 20% above the fee allowed by Medicare the cost of insurance would be substantially less. And, people who select a high deductible plan could really enjoy low rates with protection from the cost of catastrophic illness.
It is important to note insurance reform will NOT solve the US problems with high cost and low quality health care. Insurance just distributes financial pain over a greater number of people. The solution is to fix the underlying problem not distribute the problem to more people.
COST SHIFTING DIAGRAM
Hosptials are licensed by the state and certified to provide Medicare and Medicaid services. They agree to provide care sufficient to stabilize a patient. If the hospital is a non-profit institution they must provide community service (indigent care) in an amount equivalent to what they might otherwise have to pay in taxes. For- profit hospitals will try to transfer indigent patients to community or state hospitals but room is limited so they often provide uncompensated care. County, State and Federal (VA and Indian service) hospitals are financed from taxes. Much indigent care is paid for by the government.
Uncompensated care in hospitals is funded in a circuitous (underground) manner. Uncompensated care just means the patient can not pay — the patient may end up going bankrupt. However, the hospitals have another way. There is a constant stream of money that comes from insured persons flowing to insurance companies and then to hospitals. To balance the books for uncompensated care hospitals raise the price of care to insurance companies that in turn raise the price to insured people. Hospitals often have to negotiate the pay increases with many insurance companies. The “system” comes into a balance as long as the numbers of uninsured patients are not too great.
The net effect of the underground system is uninsured patients do get care and hospitals stay solvent. However, look at the system from a distance and try to follow the money. Complex negotiations, patient transfers, government payments, and patients shifting into Medicaid (Title 19). The cost of doing the paperwork is astounding and combined with the cost of a social-work army it almost matches the cost of delivered care. In the end, insured people pay twice, once in the cost of insurance premiums and second in taxes.
This is our system. We designed it this way. Is this graft and corruption? No. However, it is wasteful, inefficient, unmanageable and unsustainable. The most simple solution is to provide insurance for those who can not afford it. The cost is the same and possibly less than the sum total of private and governmental costs now. Such a system would be understandable and subject to being managed.
Four in ten Americans report that within a year illness caused a severe family financial problem. Americans obviously have not solved the problem of rising health care cost. During the past 50 years insurance seemed like the answer. If insurance premiums were the same as 20 years ago who would complain? The situation has changed. Now some can not afford insurance and almost no one can afford the cost of catastrophic illness. Businesses that provide insurance to employees are strained, so insurance deductible levels are higher. Pooled risk (insurance) has concealed the lack of health care cost control for a long time — hindsight is great. Now we wish we had paid more attention.
According to the Kaiser Family Foundation 31% of the healthcare dollar is spent on hospital care and 20% on physician and clinical services. Furthermore, major drivers of health care cost are:
- Technology and prescription drugs
- Rise in chronic diseases
- Administrative costs (currently 6% for medicare and 30% for private insurance)
The “where” we spend more money and “why” we spend more money are interesting facts but do sick people feel a lot better as a result?. America spent $2.6 trillion in 2010 but the “Sick in America Poll” very clearly shows dissatisfaction. The World Health Organization ranks U.S. health care at number 37 just after Costa Rica. In simple language, Americans are not getting a good bang for the buck. The phrase “drivers of health care cost” might be associated with the image of someone driving a car, following a map and getting good mileage. Erase that image. Replace the word drivers with “culprits” to get the right picture. We spend too much for technology and prescription drugs, we spend too much on chronic disease and we spend too much on administrative cost. The philosophy of each category needs to change to help solve the financial problems:
- Technology and prescription drugs: the current philosophy is “safe and effective”, the new philosophy needs to be “safe and cost effective”
- Chronic disease: the current philosophy is treat the same as acute disease, the new philosophy is prevent, treat early, follow-up to prevent progression. Also, exercise more, eat less sugar and remove nicotine from all products.
- Administrative costs: the current philosophy is to “manage complexity”, the new philosophy needs to be “keep it simple”. Reasonable efficiency demands 94% of premiums for all public and private insurance should be used to pay for care. By some estimates 30% of all health care cost is related to “paperwork”.
The current US health system is perfectly designed to deliver high cost low quality care with an ocean of paperwork. What a mess. Fortunately, there are islands in the paperwork ocean where low cost high quality care is delivered. There is hope.