Who was that doctor?

So who was that doctor that treated my daughter in the ER and the hospital this past weekend??  Who was the radiologist that discovered that object?  Who was the nurse that made the ER visit so bearable?

Easy, right?  Not so much.

My daughter got sick over the Thanksgiving weekend.  She had two ER visits and one overnight hospital stay.  Fortunately, we averted what could have been a critical situation and she is now fully recovered.

This was due partially to serendipity.  We were simply lucky that I took her to the ER in time.  Had I waiting another 12 hours, her condition would have worsened and it's quite possible that the unthinkable might have happened.  But it was more than just luck which prevented that catastrophe.  I credit the many doctors, nurses and technicians who treated my daughter with saving her life.

I want to send a note commending the CT technician who decided to extend the field of view beyond my daughter's abdomen (which caught the potentially dangerous condition).  I want applaud the nurses and phlebotomists who worked so hard to get a good venipuncture.  I want to credit the X-ray technician who decided, on a hunch, to take an x-ray of her colon when all that was ordered was an esophagram.  I also want to find out more about the GI doctor who consulted on the case.

Unfortunately, I don't have this information.  Since my daughter was admitted to the hospital directly from the first ER visit, we never got ER discharge papers and I can't remember the name of the ER doctors or nurses (not an unusual event).  But even if we got discharge papers (such as we did from the second ER visit), it would not have included the nurse's name.  The hospital discharge papers did include the attending physician. But it did not include any consulting physicians.

The only way to give credit where credit is due is get my daughter's medical records and read thru the volumes of pages.  This requires a physical visit to the hospital with my daughter.  I am not even certain that the technicians and nurses' names would be included.

Maybe it's not that important to know the names of all of the team members.  Perhaps, I should simply be content with the positive outcome.  On the other hand, the entire healthcare system is moving quickly towards measured outcomes and accountable care.  This requires access to data on individuals as well as institutions.

Now, I am a big believer in providing constructive feedback not only when something goes wrong but also when something goes right.  I feel that I don't have the right to complain if I don't also acknowledge success.  This belief probably stems from a small poster my father (a CPA) had in his office which said:  "When I'm right no one remembers.  But when I'm wrong no one forgets."

Perhaps institutions want to protect the identities of these people from overzealous patients.  That would certainly be reasonable if an error was made.  Yet, I feel that is the patient's right to know who treated them and who performed the procedures and tests. It should be a lot easier to find out this information.

So who was that doctor?  I don't know.  (Third base.)

P.S.:  Surveying the successes and failures of hospitals is the main mission of Hospital Consumer Assessment of Hospitals Provider and Systems (HCAHPS).  (The data here is great and I wish that more people would access it.)

Higher Deductibles - The Black Hole of Coverage

In a recent post on Health Leaders Media, there was an interesting argument presented that these higher deductibles will backfire on insurers.  The idea is that as deductibles continue to climb, people will feel that they are not really benefiting from having insurance policies.  They will make decisions on health care based more and more on financial impact as opposed to health.  This in turn will force many people to not spend money on less critical health conditions. 

"The problem with high deductible health plans is you are shifting the decision making to the least informed, which is the consumer," says [Mike Ducote, chief operating officer of CirraGroup, a company that assists consumers with healthcare debt resolution]. "We're having to make these calls purely based on the dollars. I don't think that's a good recipe for success."

What does this mean?  Avoiding treatment for less severe medical issues can often lead to serious complications requiring even more extensive treatment.  So instead of reducing the costs of medical spending in our country by catching and treating illnesses at an early stage, higher deductibles are actually contributing to higher medical costs.

This is a nasty Catch-22.  To bring insurance costs down, deductibles continue to rise.  But these could create higher medical spending by discouraging early treatment.  Such higher spending will make the insurance companies look to contain their costs.

How do they do that? Increase deductibles and raise premiums.

Mandated coverage under the ACA was supposed to fix this due to the penalties for not having coverage.  The calculation can be complicated.  But in some cases, as detailed here, it can be cheaper to pay the penalty than it is to have coverage with a high deductible.  The number of such cases is likely to increase as the deductibles continue to rise.  If so, then this would create the very black hole of health insurance that everyone is trying to avoid.  

So, when deductibles are so high that it feels like a person doesn't have any coverage at all, then the consumer demand for such policies will decrease.  Higher deductibles may seem like a viable cost containment strategy when, in fact, it could backfire on insurers in a big way.

I'm sure most people would consider it a victory if deductibles and premiums just stayed where they are without any increases.  It would be more of a victory to consumers if deductibles fell even if premiums rose.  Hopefully there will be some smart people at the insurance companies to realize the diminishing returns of higher and higher deductibles.

Pre-Existing Conditions...Pre-Obamacare. Remember Them?

I am so f***ing tired of politicians claiming that Obamacare is an obvious disaster and failure without explaining why they think so.  It's true that it's not perfect.  Insurance rates and deductibles are rising.  Networks of available doctors are shrinking.  But how would you feel if you had type 2 diabetes and couldn't get coverage at all!

Doesn't anyone remember what it was like to have insurance companies tell you that your pre-existing conditions were being excluded from your policy for 1-2 years or that they were charging you double or, worse yet, they were denying issuing a policy entirely?

I have pre-existing medical conditions.  My family has them.  In fact, most everyone I know has one or more health issues.  Here are some sobering stats:

• ~50% of all Americans have one chronic condition
• 1 in 4 Americans have two or more chronic conditions
• 7 out of 10 deaths in the U.S. in 2010 were due to a chronic condition

Source: CDC

Change the word "chronic" to "pre-existing" and you'll see just how big an issue this is.

I suspect that most of the ACA critics are covered under group policies that did not permit  pre-existing conditions to prejudice rates or coverage.  Certainly politicians who decry ACA are all covered under such policies.  I wonder how they would feel if they were forced to carry individual policies (not group) and were at risk for such exclusions.

So if the ACA is repealed, some politicians believe that increased competition between insurance companies will prevent pre-existing exclusions from returning.  Without mandated coverage, I highly doubt that.  There was plenty of competition before the ACA  and that did nothing to prevent these exclusions.

So try to remember what it was like before the ACA only 6 years ago!  Then see if your finances could survive an emergency treatment for pre-existing condition (after you have been denied coverage) or not.

I can already hear my critics saying that the rising deductibles are like being denied coverage.  But even the higher deductibles that ACA plans now have will be a pittance if you have to have any type of surgery for a chronic condition that was denied coverage.  

So, please remember.

PSA Tests vs. a Poke in the...

Very publicly, Ben Stiller wrote last week about how a PSA test probably saved his life.  On the surface it seems like a no-brainer to get a PSA test every year much like it would be for a woman to get a mammogram every year after a certain age.

However, recommended test frequencies have changed for both tests and in the wrong direction, in my opinion.  The logic appears to be similar to both tests in that very early detection can lead to surgical solutions when less drastic (and less costly) solutions might suffice.  These procedures can have possible adverse side effects which, arguably, could have been avoided.  I can completely understand why there is an increase in cancer surgeries.   The "C" word still generates a knee-jerk fear that often leads people to say, as some of my friends have said, "Just cut the damn thing out."

The reality, at least with prostate cancer, is that it usually has a very slow growth rate and early detection does not show a significant positive impact on the survival rate.  According to the American Cancer Society, the 5 year survival rates (the typical bench mark for all types of cancer) are:

• The 5-year relative survival rate is almost 100%
• The 10-year relative survival rate is 98%
• The 15-year relative survival rate is 95%

I don't know the statistics for all types of cancer.  But this seems about as good as it gets.   And these statistics were based on the traditional, annual PSA and other prostate examinations.  

But the other statistics from ACS about prostate cancer are sobering:

• Prostate cancer is the 2nd most common cancer for American men (behind skin cancer)

• 1 in 7 men in the U.S. will be diagnosed with prostate cancer during their lives

• Prostate cancer is the 2nd leading cause of cancer deaths in men (behind lung cancer)

So, as a layperson, I simply can not see the logic of preventing the earliest possible diagnosis of cancer. If the recommendations to lower the frequency PSA and prostate cancer are designed to reduce the costs and the potential complications of unnecessary procedures, then, perhaps, I think it's up to physician's to help patients developed a reasoned response to a diagnosis of prostate cancer.  

2567 Hospitals Fined $528 Million For Readmissions

There is a lesser-known Medicare program called the "Hospital Readmissions Reduction Program" (HRRP) that was created in 2012 under the ACA.  (It is another one of many hidden success stories of the Affordable Care Act.)  The main goal of this program  (unsurprisingly) is to reduce hospital readmissions.   Why is this important?  That's because his is considered one of the quickest ways to reduce health care spending.  The Network for Excellence In Health Innovation  (NEHI) estimates that $25 billion can be saved annually by reducing hospital readmissions alone.

So the HRRP program seems to be working.  Medicare readmissions were down 100,000 in 2015 and, since 2010, has fallen in every state but one, Vermont.  (Readmission Statistics)

Apparently it still has not been enough.  The CMS just announced that it has levied $528 million in fines to about 2600 hospitals for the upcoming fiscal year beginning on Oct 1st.  If you take into account the ~1400 hospitals that are exempt from this program (e.g., veterans, Children and psychiatric facilities), it comes to a whopping 60% of eligible hospitals who were fined!

Further, the amount of this year's fine is a 20% increase from last year.

So what's happening here?  Readmissions are down but more than half of the hospitals are getting fined.  There are two primary explanations:

• The fines are levied according to the amount of expected readmissions by the HRRP.  So it's possible that they are setting overly ambitious expectations that do not have a connection to real-world scenarios.  
• Many readmissions are simply unpreventable.  The idea is that with better discharge instructions and follow-up communications, patients will adhere to their treatment plans better. In other words, compliance would rise and this would affect the rate of readmission.
• The fines are simply not enough to encourage hospitals to take stronger actions

Nonetheless, an attempt to realize $25 billion in savings is certainly worth a $528 million slap on the hand.  Don't worry, there's a maximum limit to the fines of 3% of their Medicare payments and the average fine levied was only 0.71%.  So the hospitals are are not being fined out of business (as many ACA opponents might complain).

However, the HRRP program  is certainly showing positive results.  Further studies on its effectiveness are pending and should prove very interesting.

If You Need Expensive Prescriptions, Go To Norway.

• In 2015, the total amount spent on prescription drugs in the U.S. was $425 billion (12.2% higher than 2014).
• In 2015, the total amount spent on OTC (over-the-counter) drugs in the U.S. was $32.1 billion ( a modest 4.6% increase).

It's common knowledge that prescription drugs are more expensive in the U.S. than in other countries.  A great article in the Wall Street Journal summarizes the problem:  Why The US Pays More Than Other Countries  (check out the comparison to Norway).

But did you know that OTC (over-the-counter) medicines such as Tylenol, Zantac, and many others are also more expensive in the U.S.?  Probably not.  When drugs like Zantac, Allegra, Claritin got approved for OTC, it wound up costing consumers more to use the same drugs than if they were getting the generic prescription version.

Even commonplace medications such as Tylenol cost more in the U.S.  Why?  Mostly, the answer is just "because".  In other words, Americans are asked to spend more just because the drug companies decided that they should.   This is one reason why medical tourism is so high.  Sometimes, it's the only way to afford expensive, life-saving, medication.  (And don't get me started on the whole Epi-Pen situation.)

U.S. Census Report on Health Insurance

In case you have a lot of free time, the U.S. Census just issued a 44 page report on the state of health insurance in the U.S. for 2015.   This report does not attempt to suggest a cause/effect of the decline in uninsured.  It's "just the facts".  But the facts are fascinating.  You can download a link here:

U.S. Census Report

Key takeaways (in my opinion):

• Percent of Uninsured Americans fell 1.3% to an all-time low

• 29.1 million Americans are uninsured (9.1%) (another all-time low)
• Private insurance continues to be the primary source of health insurance over public insurance (e.g., Medicaid, Medicare, etc.)  67.2% vs. 37.1%
• The breakdown of the types of insurance for 2015 was:

• 28.9 % of noncitizen adults were uninsured.  This is ~2.5x greater than uninsured American citizens (10.8 %) 

The Hospital With No Beds

Fascinating story from CNN Money about a virtual hospital.  This is telemedicine taken to an extreme.  Mercy Hospital is a $54 million facility in St. Louis that offers 24/7 medical via iPads and computers.  It is a prime example of the hi-tech/hi-touch movement.   Using tablets along with biometric sensors, Mercy is able to do almost everything that a traditional home visit used to accomplish.  

It is also an excellent example of how to use "navigators" or "advocates" to help address chronic disease management and readmissions.  Patients of Mercy get "visited" twice a week by navigators. This makes it possible to detect problems early on.  It also reduces unnecessary hospital and doctor visits.  

The Hospital With No Beds

Mamma Said Knock Me Out (But, first, make sure you are in-network)

This week the California assembly passed a bill AB72 that addresses the problem of surprise medical bills.  It awaits the signature of Jerry Brown.  Its goal is to prevent excessive bills from out of network doctors.  It limits the allowable charges for such OON doctors to the average insurer's contract rate or 125% of the Medicare rate, whichever is higher.  Most importantly, it prevents the OON doctor from balance billing for the difference between their rate and the aforementioned limit.

This new law is great, then, right?  Not necessarily.  It can actually deincentivize insurers from negotiating rates if the doctor's rates become controlled by legislation.  That leaves the rates for this part of the health scare system still unregulated.  The result is that these doctors would raise their rates in order to compensate for the lower reimbursements dictated by law.  Who suffers?  The under or uninsured.

What are surprise bills?  The most common example of a surprise, OON bill is for anesthesiologists.  My family has had perhaps a dozen or two procedures over the years requiring general anesthesia.  In every instance, the anesthesiologists were OON even though the hospital and the surgeon were in-network.

Similarly, ER physicians are almost never in network even if an ER facility is.

This has resulted in some very large bills for me because the doctor charges whatever they want and is not bound by any contracted rate with an insurer.  In an emergent situation, an insurer is obligated to process the doctor's bills as in-network and their full amount.  But there's a catch.

If the doctor charges $1000 and the in network contracted rate is $500.  The insurance company will pay 80% of $500 (or whatever percentage is in your plan).  That's $400.  Normally, if the doctor was in network, the patient would be responsible for paying $100.  However, the doctor is allowed to balance bill for the $500 that exceeded the insurer's contracted rate.  So now the patient owes $600!  (Note:  there are restrictions for balance billing in some HMO plans.)

With anesthesiologists, sometimes they will honor the contracted rate and not balance bill the patient.  That has happened about 75% of the time with my family's procedures.  When it doesn't happen, then the patient gets hit with a large bill like above.

So you say, "Just make sure that the ER doctors and anesthesiologists are in network?"  Trust me, that's practically impossible.  I've tried to do this for the local ERs and gave up when no one could help.  For gas-passers, you never know who it is going to be until just prior to surgery.  Surgeons definitely do not like the patient demanding a new anesthesiologist minutes before a surgery.  In fact, they would likely cancel the procedure in such a situation.

Something has to be done about balance billing.  Those bills are a primary cause of medical debt and bankruptcy.  AB 72 is a great start.  However, it is still incomplete and will certainly be challenged in the courts for rate fixing.   I hope that Jerry Brown signs it and we can begin the process to solve this large problem.

Walmart Decides to Increase Their Pricing and Reduce Their Sales Force

Would Walmart actually thrive if they made their customers pay more and made it less convenient to do so?  Certainly not!  Walmart's success (as do most retailers and businesses) derives from keeping their customers happy.  Walmart does this by offering a wide variety of products at the lowest prices possible and making it easy for customers to buy them.  Their stock price rises and falls based on per customer loyalty and satisfaction which ultimately drive all other financial factors.  Walmart wouldn't survive if they made the radical changes suggested by this headline.

Health insurance companies are perhaps the only industry where consumer satisfaction is not the driving force for success.  Not surprising, the American Consumer Satisfaction Index published a study last year (ACSI Study 2015) showing that consumer satisfaction for health insurance companies is at a 10-year low.

It is no mystery why this is so.  Pretty much everyone is facing higher insurance costs next year with lower benefits.  Deductibles continue to rise, co-pay's increase (my ER copay went from $100 to $250), annual out of pocket maximums are getting higher...all the while, premiums just keep getting more expensive regardless of any rebates that ACA may offer.

Pay more...get less.  That's usually a formula for failure in the business world.  Not so with health insurance.  In fact that is pretty much their modus operandi.  This is why their CEO's are being rewarded with incredibly lucrative compensation packages and why insurer's profits continue to rise.

The main flaw in this equation is that we, as the insured, naively assume that our satisfaction is important to health insurance companies.  It is not.  CEO's are not striving to create happier consumers.  They are not beholden to the people paying the premiums.  Their main concern is to keep the shareholder's happy.   

And apparently, they are doing quite a good job at that.  Unfortunately, it's at our expense.

Presidential Medical Histories (Some Will Surprise You)

This week there has been a lot of controversy about the medical condition of Donald Trump and Hillary Clinton.  It may surprise you that many of our Presidents have had very serious medical issues many of which were not widely known.

Here's a great website that lists the medical histories of all the Presidents:

Presidential Medical Histories

$7000 CAT Scan (What would Einstein and Franklin do about it?)

"It is the first responsibility of every citizen to question authority"  (Benjamin Franklin)

"The important thing is to never stop questioning.  (Albert Einstein)

This month I received a bill for an ER visit to my local hospital.  The billed charges for the facility (not doctor fees) were $14,876.59 and the amount that I owed was $2082.72! Though I never received an EOB ("explanation of benefits") from Anthem for this, it certainly looked like the insurance company had paid down this bill somehow leaving me with only a measly $2000+ co-insurance amount due.

(Spoiler Alert:  the actual amount that I owed end up being $0.00!)

After recovering from the sticker shock and shot of scotch, I started to think a bit more clearly. Here's what I did:

1)  I called the hospital's billing department and requested a detailed, itemized list of all the charges.  I had to see how a two-hour ER visit ended up costing over $14k considering the fact that we left without needing any treatment or medicine.   

2)  After receiving the itemized bill, I verified that all of the services were actually rendered.  I also noticed that they charged $7000 for a CAT scan (which costs only $550 at our local radiology facility).  They also charged $900 to administer an EKG which took about only 1 minute.  The basic charge for simply stepping into the ER was $2352.  I actually don't find that charge to be so unreasonable. 

3)  Next, I went online to Anthem to find the EOB and see how Anthem had processed this claim since I suspected that something was amiss.  I couldn't find the EOB which is unusual. Anthem's patient portal is pretty good (albeit very, very slow) and it's usually easy to find an EOB. 

4)  So, I called Anthem figuring that maybe the EOB got stuck somewhere and they could look it up.  Guess what?  They couldn't find a claim submitted by the hospital for this DOS at all.    "OK, Anthem, I'll call the billing department at the hospital and see what's what." 

5)  I asked the billing department to explain to me how the $14,876 was paid and reduced so that my co-insurance became $2000.  "I see here that your insurance company is xxxxxx.  Is that right?"  "Huh?  I've heard of that company. My insurance is with Anthem." 

The hospital had never even submitted this claim to Anthem.  Further, it is a complete mystery how the hospital had the correct insurance information to process the doctor's fees but complete bungled their facility bill.  It's also a mystery as to how this unknown insurance company could have discounted or paid anything towards these charges.

I gave them my Anthem information and they will submit the claim.   Once they do, the claim will be paid at 100% because my wife had already reached her annual out of pocket (OOP) maximum before this ER visit.

This means that the $2082.72 bill is going to go down to... $0.00.  Yeah!

Key Takeaways:

1.  Never trust that the amount that a provider says you owe is actually the amount you really owe.  Always read and question every bill.  (See the above quotes from Einstein and Franklin.)

2.  Always read your EOB.  If you don't have it, get it.  Then read it.  If you don't understand it, make your insurance explain it clearly or find someone who can.

3.   Realize that billing mistakes occur every day.  Perhaps your bill is accurate.  But chances are good that a bill that seems too high has mistakes in it.  If it walks like a duck...

P.S. - I am not certain what would have been the amount I owed if my wife had not met her OOP maximum.   I estimate that it would have been about $1000 which is still a sizable savings from the original billed amount.

The Costs of Not Going to the Gym ($500 Billion)

Most of us know that we should be eating healthier and exercising more.  It's not a complicated formula.  And yet, the statistics on preventable illnesses are staggering.  Here's just a small sampling:

• Nearly 10% of the US population has diabetes (~30million)
• Approximately 1.4 million new cases of diabetes reported annually
• 30% of all Americans are obese
• Obesity related illnesses account for ~$200b per year in health costs
• 17% of all Americans over 18 are tobacco smokers
• Another 16 million Americans live with a smoker.
• Smoking causes $300b a year in health costs and lost productivity
• Cigarette smoking is responsible for 480,000 deaths per year and is the leading source of preventable deaths

(sources:  American Diabetes Association and CDC) 

The statistics on exercising are not very good either:

• 191 million Americans (60%) don't get the recommended amount of weekly exercise
• 25% don't exercise at all (79 million people)
• # of gyms in the U.S.:  30,500
• # of Americans with gym memberships:  58million
• % that don't use their memberships:  67%

(sources:  CDC and StatisticBrain) 

The average cost of a gym membership is about $60 per month.  That's $720 per year.  Many diabetes medicines cost far more than this.

So let's generously assume that there are ~85million people in the U.S. (27%) with a preventable illness.  If the government spent $720 per person on a gym membership for each of them, the cost would be $61billion per year.  

So the big question is:  could this $61b reduce health care spending by more than that amount?  If ~$500b is being spent on preventable illnesses, that means that it would have to result in 12.2% savings.

I haven't found any conclusive studies one way or the other.  But, personally speaking, I prefer the idea of spending $61b on gym memberships as opposed to the same amount on diabetes medicine.  

Of course, the big problem is how to encourage (or require) that people use their gym memberships?  Any solution would certainly be very controversial (just ask any ACA opponent about the mandate).

The Golden Triangle of Health Care

I am a big fan of inspirational quotes.  I even have a few of my own; some of them are even original.  One of them (and I don't think I invented it) is:  

"If money can solve it, it's not a problem."  

 [My Mom has a great variation that she swears that I did create:  "If there is a solution, then it's not a problem."  I think she just misquoted me.  But I like her version better than mine.  So, I'll claim ownership.]  

In the health care system, a lot of people and a lot of companies are spending a lot of money to solve its problems. It's not working.

Why?  It's the "Golden Triangle".  It looks like this:

Simply put, the Golden Triangle consists of three options:  Good, Fast, and Cheap.  You get to pick any two.  It often refers to the world of design.  But it can be applied to practically any service being rendered ranging from car repair to restaurants.  Of course, it's not unusual to want all three corners of this triangle. Sometimes you can actually get it.  Usually, not.  More often you get what you paid for.

The major difference between applying the Golden Triangle to health care as opposed to graphic design is that  picking only two corners can end up with undesirable, and sometimes, deadly results.  Fast and inexpensive care would certainly not substitute for getting proper treatment. Nor would excellent care that you could afford but had to wait weeks to receive it.    And yet, when we are sick, we want to receive quality care in a reasonable amount of time and not worry about losing one's savings (or worse) in the process.  These are not unreasonable expectations in my opinion.

Most of the time, patients are more concerned with good and fast.  That is, work on the health issue as quickly and as effectively as possible. Inevitably, that leads to sticker shock when the bill arrives.

Unfortunately, too often, we are only getting one corner of this triangle.  And sometimes, patients get none of the corners.  The latter is often true for challenged populations such as uninsured and low-income patients.  

If you were only allowed two corners of the Golden Triangle for your health care, which ones would you choose?  This certainly will vary from person to person.  And that's why it has been so difficult to make systemic improvements in the health care system.  

Can we solve all three issues at once?  Perhaps not.  So, which corner(s) would you address?  And how would you justify ignoring the other corner(s)?  This is a very difficult decision which providers are wrestling with every day.  

Please let me know your preferred corner.

Don't Cry For Me Aetna (and UnitedCare and Anthem)!

(Update:  Aetna may have pulled out of these states because they didn't get Federal approval for their merger with Humana.  See Aetna's DOJ Letter)


Waaah!  Health insurers are crying.  They are losing money and can't carry on insuring all of the new ACA enrollees.  Aetna just announced that it was pulling out of 11 states where it offers ACA plans to individuals due to fabulous losses it incurred: $430million last year.  (CNN)  Other insurers have claimed similar or greater losses.  It kind of makes you feel sad for their financial burden. (Note: Aetna pulled out of California, my home state, after 2014 leaving me high and dry.)

I guess that's why Aetna's CEO saw a paltry pay raise of only $2.2m last year ($15.1m in 2014 to $17.3m in 2015 -  WJS).  UnitedHealth's CEO really suffered when he earned $66m in 2014, a belt-tightening increase of $42m from 2013 - FierceHealthCare).

It's true that a lot of insurers got slammed with a lot of new enrollees incurring more health services than expected.  Perhaps the most controversial part of the ACA was the mandate provision forcing people to buy health insurance.  The reasoning was simple.  How could insurers afford to get rid of all of those fancy restrictions on benefits (e.g., life time caps, pre-existing conditions, etc.) if they only had sick clients.  They needed healthy clients to pay premiums to make up the difference.  

As it turns out, many of the new ACA enrollees are not as healthy as anticipated.  They wound up (heaven forbid) actually using their health insurance policies for (wait for it)...health care. And now insurers want to stop offering individual policies because they claim that they are bleeding money.

A cursory examination of their woe-is-me claims shows that a loss in the individual health policy business is not actually making much of a dent in the overall profitability of major insurers:

• UnitedHealth's 2015 net profit: $5.8B (up from $5.62B)  
• Aetna's 2015 net profit:  $2.4B (up from $2B)
• Cigna's 2015 net profit: $2.09B (down from $2.1B 2014)
• Humana's 2015 net profit:  $2.4B (up from $2.2B)

(Note:  all figures taken from the company's own annual financial statements)

Remember, these figures have already accounted for the losses from ACA policies.  So not one of these companies showed a loss due to their ACA business.  They simply made less profit.  Aetna's profit actually increased despite their ACA losses.  

So if the individual policy business is tanking, then where is this profit coming from.  Turns out that most of these profits are coming from you, the taxpayer. Half, or even more, of these profits derive from Medicare, Medicaid and other government related policies. In other words, these companies are profiting from your tax dollars while making it harder for individuals to become insured by them under the ACA exchanges.

That's like paying the mechanic to fix your car and then someone else get's to drive it.  It's not right.

(Stay tuned...Are the insurers really spending more on patients?)

Deciphering your hospital bill - Good luck with that!

David Lazarus, a consumer rights columnist for the LA Times, just wrote an excellent article about hospital bills and how complicated they are.  In light of my recent post about this very same subject, I thought I'd repost his article in full (in case you are blocked by LATimes.com which sometimes happens).  

This column is also very relevant to me because like the subject in this piece, I had emergency gall bladder surgery in January 2015.  My hospital charges only came to ~$80,000 thankfully.  :)

(Here's the link to the article:  LA Times)

=================

Denis Robinson wasn’t bothered in the least that he was billed nearly $100,000 by Providence Tarzana Medical Center for the recent removal of his gallbladder.

“What do I care?” he said. “I have Medicare Plan F, the Cadillac of Medicare plans. They covered every dime.”

Actually, Robinson, 69, should care a great deal. Medicare is a taxpayer-funded system, so any claim submitted by a doctor or hospital affects the financial integrity of the entire program. The fact that Medicare paid less than $4,000 for a $97,000 claim — we’ll get back to that in a moment.

What sizzled Robinson’s bacon was the explanation of benefits he received from Blue Shield of California, through which he purchased his supplemental Medicare coverage and which covered about $900 of his massive hospital bill. It features three pages of itemized costs, each listed only as “surgical services.”

Seriously. Three pages of individual charges, ranging from $1 to $66,607, and no way to tell what any particular one might be for, or whether there were any errors or instances of double billing, or just the perverse satisfaction of knowing that $100 was paid for a Tylenol.

I pointed to a charge for $49.50. What’s that for? What about this one for $132.04?

“I have no clue,” Robinson replied. “I have no way of knowing.”

He could narrow down the possibilities. Each listing for a surgical service was accompanied by a billing code. A little rooting around online will reveal, for instance, that code 0636 is pharmacy-related. But it’s anyone’s guess what that may be.

This is, to put it mildly, nuts.

How can a hospital charge $97,000 for a procedure that Medicare and Blue Shield say is fairly valued at closer to $4,500, the total Providence received? Why aren’t all costs made clear to patients in their explanations of benefits, which insurers send policyholders ostensibly to shed light on the billing process?

“The way it’s set up, medical billing isn’t at all useful to the patient,” acknowledged Paul Ginsburg, director of public policy at the USC Schaeffer Center for Health Policy and Economics. “It’s not designed to let you understand things.”

A key problem is that almost the entire financial conversation regarding healthcare goes on behind closed doors between insurers on the one hand and doctors and hospitals on the other. The patient, who typically pays only a fraction of the overall cost, is little more than an afterthought.

However, that system was established before the current era of rising deductibles and co-pays, leaving patients responsible for an ever-growing share of medical costs, and before hospitals started defraying overhead expenses by charging $10 for a Band-Aid, say, or $50 for a piece of gauze.

“Hospital spending is so difficult to get under control because the patient has no idea about actual costs,” said Craig Garthwaite, an assistant professor of strategy at Northwestern University who focuses on healthcare.

The explanations of benefits that patients receive typically contain “fictional numbers that have no relation to the economics of what’s going on,” he said.

Clinton McGue, a Blue Shield spokesman, demonstrated the lunacy of medical billing by explaining that even though the insurer receives its own receipt from the hospital for all services rendered, spelling out details of each and every cost, Blue Shield feels no need to share such information with policyholders in its explanations of benefits, or EOBs.

“Blue Shield provides industry-standard EOBs to its members,” he said, in effect admitting that the company denies patients helpful information because everyone else does. McGue said that if people want a proper explanation of benefits, they can request one from the hospital.

I pointed out that since Blue Shield is sending out an explanation of benefits anyway, why not include real information?

“We adhere to an industry standard with EOBs,” McGue reiterated. “We will provide the detail if asked, but we think that it is best for the member to review and discuss the services with the provider.”

Patricia Aidem, a spokeswoman for Providence Health & Services, which runs half a dozen hospitals in Southern California, acknowledged that the billing system can be a challenge for most people.

“This is absolutely something that needs to be fixed and Providence is working to create and implement solutions that will make this easier for patients,” she said.

Well, let’s start with Robinson’s bill. Providence charged $97,000 for his operation and then, according to the explanation of benefits, willingly wrote off more than $90,000 as the “amount saved by using a network provider.” That’s a pretty hefty markup for anyone visiting the hospital on an out-of-network basis.

Aidem declined to elaborate on how the hospital arrived at these figures. She said only that “Medicare pays a preset, non-negotiable rate for diagnoses and procedures” and that “hospitals almost always lose money on Medicare cases.”

The federal Medicare Payment Advisory Commission says the average hospital is paid about 95 cents for every dollar spent treating a Medicare patient. Hospitals recoup some of those losses from the rates they charge private insurers. Hospitals also balance their books by charging uninsured patients about three times, on average, what Medicare allows, according to the journal Health Affairs.

If that sounds like a profit grab, Providence’s initial bill to Robinson — the starting price, presumably, for someone without coverage — was more than 20 times higher than what it received from Medicare and Blue Shield.

“This just shows that the system is crazy and that it’s manipulated by healthcare providers for their benefit,” said Alain Enthoven, a Stanford University health economist.

Here’s a thought: How about a requirement that explanations of benefits truly explain benefits, clearly and precisely?

Or we can just keep things as they are, forcing patients to seek explanations for their explanations.

What If Your Hotel Bill Was Like A Hospital Bill

Many people are thoroughly confused when they get a detailed bill from a hospital.  How much was that bandage??  Two Tylenol cost $25??  Here's a video that clearly illustrates how idiosyncratic and arbitrary a hospital bill can appear to be:

Healthcare is the only consumer product that we purchase without knowing the cost in advance.  And even if we did know the price of that saline I.V., would we make different decisions about our care?  Maybe that would apply to non-emergent care.  We might opt for a doctor's visit instead of an ER or urgent care facility if we can wait to be seen.  Or we might choose the urgent care verus an ER visit if we had a facility convenient to us.

But in the hospital environment, we have no choice.  We can't ask for a lower-cost I.V. option or to have fewer bandages used.  We trust that all of the treatment and procedures given in a hospital are reasoned and necessary even if they are not.

The best advice that I can give when reviewing a detailed hospital bill is to look for services that were billed more than once or services that you suspect were never rendered.

Why examine your bill if you have insurance?  One word:  co-insurance.  If you owe a portion of your bill (after they reduce it per contractual discounts), then any amount which can be eliminated from the bill will save you on your co-insurance.  Let's say your co-insurance is 20% and you find a $1000 procedure (the contractual rate) that was scheduled but never performed.  Eliminating that charge would save you $200!

In most cases, the hospital won't even send you a detailed bill unless you request one.  Even if you can't find any errors, it is always good to review your bill because it will increase your health care literacy.  This will make finding mistakes easier the next time you have to review a bill.  

A Sincere Apology (A 5-Step Guide)

Nothing rings quite as hollow as an insincere apology. We hear them all the time in politics and the corporate world. They usually sound like: “I’m sorry if you were offended…” or “If my actions caused you any distress…” These are not true apologies since they generally try to deflect responsibility and often engage in victim-blaming (i.e., “it’s not my fault if you have such thin skin that were offended by something that I said”).

There are many great examples of non-apologies which we have all heard :

“I’m sorry you feel this way.” (avoids responsibility)

“I apologize to everyone who may have been hurt.” (apologies need to be specific and not general)

“I’m sorry that your _____ is not ready today. Please come back tomorrow.” (Deflects the apology from the person themselves to the desired outcome. Again avoiding responsibility).

“I’m sorry. There’s nothing that I can do.” (no contrition here)

“I just feel awful.” (misdirects the attention from the harmed party)

“Alright, I’m sorry. OK?” (completely insincere)

The list is practically endless. Even many of us who feel that we are sincere apologizers probably have used some of these false apologies without even realizing it.

So what makes an apology meaningful and sincere? A true apology is one that has these five components:

1.  Responsibility: There should be no qualifier or condition to the apology. There is no “but” or other explanation attached to the apology. In other words, a sincere apologizer should accept responsibility for their action and not try to minimize it.
2. Contrition: This may seem axiomatic. However, many apologies reflect a sense of regret as opposed to contrition. The apologizer often is more upset at being caught than at the repercussions of their actions. [This often happens with social media gaffs.] A true apology should demonstrate that the person is indeed sorry that the incident happened – not because they were caught. But because it was objectively the wrong thing to do.
3. Awareness: A key element in a successful apology is being aware of the repercussions or damages that transpired. Acknowledging the harmful effects of one’s action proves that you are empathetic and understand the other side of the equation.
4. Growth: Ideally, the apology should indicate that the person is treating the event as a learning or growth experience. It is not enough to be contrite and accept responsibility. The ultimate goal is to learn from one’s mistakes and prevent a reoccurrence of the triggering event.
5. Forgiveness: Requesting forgiveness is inviting the harmed party to continue a dialogue. One is expressing your willingness to reestablish a relationship instead of merely espousing empty rhetoric. The act of forgiveness allows both parties to engage with each other and work towards a solution to the problem.

Apologies may be perceived as a vulnerability, unfortunately. Too frequently, fear and ego prevent a person from displaying any signs of weakness. Further, in the business world, there may also be financial implications.  Doctors are shy to admitting liability for fear of a malpractice lawsuits. Likewise, CEO’s can be nervous about accepting responsibility for bad business decision that affect their company’s stock prices. The desire for self-preservation affects the quality of an apology.

However, just as there is nothing less comforting than an insincere apology, there is nothing quite so reassuring as meaningful one. Many times a good apology can instantly defuse an emotional situation or negotiation. It humanizes the participants engaged in any stressful situation. 

Much like death and taxes, it is practically inevitable that you will be in a situation that requires a thoughtful and sincere apology. Think about the above components when it is time to do so and take note of the recipient’s reaction. You will be pleasantly surprised.

(just found this funny cartoon and thought it was perfect for this article)