Medical Costs Rise 7.8 Percent in 2010 for Family of Four: Milliman

J Roberts

Healthcare Financial News

Medical costs are on the rise again in 2010. Read the article and then go to the report from Milliman that details the rise in costs for the third straight year in a row.

The medical costs paid by and on behalf of a typical U.S. family of four reached $18,074 in 2010, up 7.8 percent over the 2009 amount of $16,771, according to the 2010 Milliman Medical Index. For the third consecutive year, the annual rate of increase has been less than 8 percent, but the dollar increase is the highest in the past 10 years. Inpatient and outpatient facility services combined represent 48 percent of the total annual medical costs, up from 47 percent last year, according to the index. Physician services represent 33 percent, prescription drugs represent 15 percent, and miscellaneous services represent 4 percent.

Over the past five years, pharmacy care and facility costs, especially outpatient facility costs, increased at a higher average annual rate than physician services, the report states. The largest dollar increase in 2010 was for inpatient facility care, which rose by $498 annually. The increase includes change in both utilization and average unit cost. Average unit cost reflects the negotiated charge for each service and the service mix, according to Milliman.

Most of the hospital and physician cost increases noted in the 2010 index have been driven by average unit cost, not utilization, which frames the future cost-control effort, according to the report. Hospital and physician services contributed $820 and $301, respectively, to the increase in total annual medical costs between 2009 and 2010, while pharmacy services contributed $151.

As in 2009, medical costs in three cities (Miami, New York, and Chicago) continue to surpass the national average by at least 10 percent. Costs in all three cities now exceed $20,000 for a typical family of four, with Miami at $22,089. Phoenix and Seattle continue to have costs much lower than the national average.

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Study says companies expect health reform to raise costs

J Roberts

Many employers are worried that the new healthcare reform will raise the cost of care and that the increased cost will be passed on to employees. Read more.

THE ASSOCIATED PRESS • May 25, 2010

Big companies think health care reform will hike their costs, but most expect to continue offering subsidized benefits to workers, according to a new Towers Watson study.

The benefits consultant surveyed 661 companies this month and found that 94 percent of those that responded believe the reform law passed by Congress earlier this year will raise costs. Eighty-eight percent plan to pass the increases on to employees, and 74 percent anticipate reducing health benefits and programs.

That could mean insurance co-payment or deductible hikes or more high-deductible plans, said Mark Maselli, who heads Towers Watson’s North American Health and Group Benefits unit.

He added that companies will likely continue to offer “medical coverage that individuals are used to having” at least for the foreseeable future. Nearly three quarters of the companies responding to the survey said they expect to continue providing subsidized coverage for active employees.

Maselli said benefits could change as the reform law unfolds over the next few years. But he saw no need for employees to panic.

“You’ve got coverage now, you’re likely to continue to have it through your employer, and it’s something you want to monitor over time,” he said.

Some companies could see small reform-related cost hikes next year, after the start of provisions that ban lifetime maximums for benefits and extend coverage of young adult dependents on parental plans to age 26. Maselli and other benefits experts say the size of this hike will depend greatly on the company and the employees it covers.

Towers Watson’s national survey spanned several industries and involved companies with a median size of 5,600 employees.

It also found that big companies generally plan to continue offering health promotion and wellness programs. But 43 percent of employers that offer retiree benefits expect to reduce or eliminate them.

Containing health care costs was an essential or high priority for 96 percent of survey respondents, who were asked how important specific reform goals were to their organization.

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Increase in health tests, procedures is raising costs in frugal Utah

J Roberts

The rising cost of healthcare is everywhere. Even in small town communities, where spending tends to be small or limited, people can’t avoid the increase in healthcare costs.  What’s driving the increase? It appears to be over utilization. Essentially, this means that the number of test and procedures is on the rise. This is due to the addition of new surgical and other specialty suites and increased technology at hospitals. These services are all paid for on a fee-for-service type arrangement – meaning the more test one does, the more the doctor or the facility performing the test or service will receive in payment.

By Jordan Rau

Kaiser Health News

PROVO, UTAH — If there is any place that should have medical spending under control, this is it. Residents of Provo, many of them Mormons who don’t smoke or drink, are among the healthiest in the country. The city’s biggest hospital is run by Intermountain Healthcare, which President Obama has lauded for providing high-quality care while restraining costs.

Until recently, Provo seemed to be a model for the nation. But spending on Medicare patients here has accelerated rapidly, as it has in many other areas of the country that are known for cost-efficient care.

The culprit: a swift increase in the number of procedures and tests being performed — a trend that has coincided with the additions of new surgical and cancer treatment suites and diagnostic machines at hospitals and clinics throughout the growing region.

“It’s very discouraging to see costs increasing rapidly in those low-cost areas we believe to have good care,” said Paul B. Ginsburg, president of the Center for Studying Health System Change, a Washington-based research group. “They appear to be succumbing to the same forces that have led to high costs elsewhere.”

This transformation calls into question initiatives — including some in the new health-care law — to encourage more profligate regions to learn from their frugal counterparts.

Medicare spending trends often parallel those in the country’s overall health system, experts say. In 2007, average Medicare spending per person in the greater Provo hospital market was $8,064. That was below the national average of $8,682, but far higher than it had been a few years earlier.

Between 2000 and 2007, Medicare spending in the Provo region rose on average 8.6 percent a year, nearly double the average national rate of 4.7 percent, according to the Dartmouth Atlas of Health Care, which analyzes geographic variations in medical spending. Provo’s growth occurred as Medicare beneficiaries underwent surgeries more frequently and spent more of their dying days in intensive care units.

Provo’s spending increases aren’t an aberration. Annual average spending grew 7 percent or more in other traditionally low-cost areas, including Oxford, Miss.; Wausau, Wis.; and Durham, N.C. Even in Rochester, Minn., home of the highly regarded Mayo Clinic, and Salt Lake City, where Intermountain is headquartered, Medicare costs grew faster than the national average, according to Dartmouth.

The increases are particularly worrisome in places where many providers have made changes to try to reduce costs. These include adopting electronic medical records, focusing on prevention and increasing cooperation between doctors and hospitals.

But Provo’s regional hospital market, which stretches south of Salt Lake City and includes nearly 27,000 Medicare beneficiaries in a population of more than half a million, also has embraced some of the less admired traits of expensive health-care markets.

Many doctors have set up their own large clinics where they share in the profits from diagnostic tests and other services. Physicians in the Provo region performed 17.3 percent more procedures on Medicare patients in 2008 than they did in 2000, outpacing the median national increase of 13.7 percent, according to a Government Accountability Office study.

“The first surgical center in Utah County was built by a physician from the hospital,” said Rulon Barlow, a former county health commissioner who runs the student health center at Brigham Young University in Provo. “So what did the hospital do? It built a surgery center. It wasn’t too much longer that another outfit came in across the street.”

Wendell Gibby, a radiologist who owns an imaging clinic, said he has seen a dramatic change in the area. “The gastroenterologists owning their own CT scanners, the oncologists owning their own radiation machines” are examples, he said. “If you’ve got a $1 million scanner, you end up using it.”

Hospital executives and doctors insist that they guard carefully against performing unneeded procedures. Scott E. Bingham, a cardiologist at the Central Utah Clinic, said: “The only thing that I see increasing in Provo is the number of patients we see.”

And Mike Kennedy, a family doctor and the chief of staff at the Hospital Corporation of America’s Timpanogos Regional Hospital in Orem, just north of Provo, speculates that the higher costs are the result of better care. “You’re probably seeing more aggressive treatment earlier on in disease stages,” he said.

But some treatments were being performed more frequently in Provo while decreasing nationally, according to Dartmouth data covering 2000 through 2005. They included operations to clear leg arteries and replace heart valves.

The number of aortic-aneurism repairs and hospitalizations for hypertension and asthma also rose faster than the national average. Though many procedures are still performed less frequently than elsewhere, a Dartmouth study released in April singled out Provo for having the highest rate of shoulder-replacement surgery in the country.

Commercial insurers say prices in Provo and the rest of Utah still remain lower than the national average. But experts say that could change, too.

“We take some comfort that we have less of a problem in Utah than elsewhere,” said Kim Bateman, vice president for medical affairs at HealthInsight, a Salt Lake City-based nonprofit organization that Medicare has authorized to find ways to improve the quality of care in Utah and Nevada. “But really I think we’re just behind them on the same curve — that we’re going to be subject to the same kinds of cost pressures as everyone else.”

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Study says US cancer costs almost double in 20 years – but not because of pricey treatments

J Roberts

Here’s some news that’s probably not too surprising: Cancer costs have doubled over the past twenty years. As with any serious disease, usually the drugs and the various treatment associated with fighting the disease are expensive; however in this study researchers conclude that rising cost were the direct result of the increased number of cancer patients.

ATLANTA (AP) —

The cost of treating cancer in the United States nearly doubled over the past two decades, but expensive cancer drugs may not be the main reason why, according to a surprising new study.

The study confounds conventional wisdom in several respects. The soaring price of new cancer treatments has received widespread attention, but the researchers conclude that rising costs were mainly driven by the growing number of cancer patients.

The study also finds cancer accounts for only 5 percent of total U.S. medical costs, and that has not changed in the last few decades.

“I will say I’m a bit surprised,” said Dr. Len Lichtenfeld of the American Cancer Society, who said he would have expected the proportion of cancer costs to rise.


The researchers also found that private insurers now cover a greater share of cancer treatment costs — about 50 percent — while patients’ out-of-pocket costs have fallen over the past two decades.

Though taken aback by some of the findings, Lichtenfeld and other experts did not dispute the study, which compared medical cost data from the late 1980s to that of the early 2000s. But they said the picture surely has changed in the last several years.

The study is being called the first to combine national cancer costs for all types of payers and see how they’ve changed over time. The figures are reported in 2007 dollars.

It found that cancer treatment costs rose from nearly $25 billion in 1987 to more than $48 billion by the end of 2005.

The rise in costs is mainly due to an increase over 20 years in how many cancer patients there are, said the study’s lead author, Florence Tangka of the U.S. Centers for Disease Control and Prevention.

The researchers used data from national telephone surveys done in 1987 and from 2001 through 2005, which gathered information on medical conditions as well as who paid the bills. More than 164,000 people were surveyed.

The study did not offer precise estimates of how the number of people treated for cancer changed from the late 1980s to the early 2000s. But it showed dramatic increases in the number of cancer cases covered by the government’s Medicare and Medicaid programs. Medicare, which covers the elderly and disabled, has consistently covered about a third of the nation’s cancer costs. Medicaid accounts for only 3 percent.

The U.S. population is aging, and older people tend to get cancer at higher rates, Tangka noted.

Better and more advanced treatments mean more people with cancer are remaining alive, so the spending increases represent money well spent, said Kenneth Thorpe, a health policy researcher at Emory University who has focused on the cost of health care.

“It seems like we’re buying increases in survival,” Thorpe said.

The study is being published in Cancer, a medical journal of the American Cancer Society.

The researchers also found:

—The percentage of cancer costs from inpatient hospital care fell from 64 percent to about 27 percent. A shift to less expensive outpatient care, along with cost containment efforts by large health insurers, helped keep down increases in the costs per patient, the authors said.

—The proportion of cancer costs paid by private insurance rose from 42 to 50 percent.

—The proportion of costs paid out of pocket by patients — including copayments and deductibles — dropped from 17 percent to 8 percent.

Those last two findings surprised some experts.

Recent government reports have found that the percentage of Americans with private health insurance has been shrinking and recently hit its lowest mark in 50 years. Yet the study found that the proportion of cancer treatment costs paid by private insurance rose.

And companies have been tightening or cutting employee benefits, causing out-of-pocket costs to go up for many patients. Yet the study found that the proportion of bills paid by patients declined.

That last finding in particular was striking, said Lichtenfeld, the cancer society’s deputy chief medical officer.

He alluded to widely reported increases in personal bankruptcies prompted by medical bills. “There’s no question that the out-of-pocket costs for some patients have risen dramatically,” Lichtenfeld said.


The rising price of certain treatments also should be acknowledged, he said.

The challenge of rising prices was recognized by American Society of Clinical Oncology (ASCO), which last year released its first guidelines counseling cancer doctors on how to talk to patients about deciding between less expensive chemotherapy drugs made more sense than newer, more expensive products.

The study did not add in the cost of diagnostic tests and scans, which are cost drivers. And the data does not include the last five years, which saw some extremely pricey cancer drugs come on the market.

The picture may have changed since the study’s data was collected and the U.S. economy deteriorated, said Dr. Neal Meropol, a Case Western Reserve University cancer expert who worked on the ASCO guidelines.

Newer treatments along with wider testing are driving up the overall cost of cancer care, Meropol said.

“My concern is that costs are getting shifted to patients and there is a potential for increasing disparities” in cancer care, he added.

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Americans Losing Confidence In Healthcare

J Roberts

Confused about healthcare reform? Don’t worry; you’re not alone. It seems that the majority of Americans are also confused. Read the following article and review the survey to find out just how little we all know about the healthcare reform legislation.

REUTERS

Americans are steadily losing confidence in their ability to get healthcare and pay for it, despite the passage of healthcare reform legislation, according to a survey published on Wednesday.

The Thomson Reuters Consumer Healthcare Sentiment Index found that confidence lost three percentage points from a baseline of 100 in December to 97 in March.

“Strikingly, Americans expect the situation to worsen significantly in the next three months,” said Gary Pickens, chief research officer at Thomson Reuters.

“The thing I thought was interesting was … the level of sentiment about future expectations worsened more. The future outlook seems to be causing the people we interviewed angst.”

Thomson Reuters interviews more than 100,000 U.S. households annually via telephone surveys about healthcare behaviors, attitudes and utilization. This particular index is based in a subset of 3,000 people, representative of the nation as a whole, interviewed every month.

The survey, published at http://healthcarescience.thomsonreuters.com/indexes/, finds a steady erosion in confidence.

“I think it may have something to do with the reform legislation,” Pickens said in a telephone interview. “Getting legislation through hasn’t reassured Americans,” he added. “People are being unclear about what it means for them.”

Pickens said his team is now breaking down the survey by age, political affiliation and other factors to try to get more detail on who, precisely, is losing confidence the most.

“What we saw last summer was a big difference by political party,” he said. Republicans strongly opposed healthcare reform.

Pickens predicts older Americans may be among the most worried. “I think I would have angst because of the prospect of significant cost cuts, cutbacks in federal programs including Medicare,” he said.

In February, when the index fell to 98, a statistically significant number of people said they had delayed filling or did not fill a prescription in the past three months and expected to delay or cancel a diagnostic test in the next three months.

In March, more people said they had lost or reduced their health insurance coverage in the past three months or that they expected to delay or cancel an elective surgical procedure.

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Majority of Americans confused about health care

J Roberts

More than a month after the passing of landmark healthcare reform, Americans are confused more than ever over the legislation; some are down right angry. A recent poll by Kaiser Health illustrates the sentiments felt by Americans across the country. Read on to learn more.

Kaiser Health

The majority of Americans are confused about how the newly enacted health care law will impact them, according to a new Kaiser Health Tracking Poll released Thursday.

“People are struggling to understand how the law will affect them and their families and to separate fact from political spin,” said Kaiser President and CEO Drew Altman.

Nearly a month after its passage, the public remains deeply split over the legislation: 46 percent view it favorably and 40 percent don’t, with another 14 percent undecided. Further demonstrating the division: 31 percent expect the bill to help them, 32 percent expect the bill to hurt them and 30 percent don’t expect it to affect them at all.

The partisan divide is stark: 77 percent of Democrats support the law, while 79 percent of Republicans oppose it. Independents tend to side with Republicans, with 46 percent opposing the law while 37 percent support it.

The poll showed, however, that a clear majority of Americans support many specific provisions that go into effect this year. For example: 86 percent are in favor of tax breaks for small businesses that offer coverage to their employees. Also, 81 percent are in favor of stopping insurance companies from dropping someone who has a major health problem. Even the provision that allows children to stay on their parents’ health plans until age 26, which drew fire from some on the right, was supported by 74 percent of those surveyed.

Americans experience a wide variety of emotions when reacting to the new law – but, according to the poll, confusion wins out over anger and relief. On the whole, 55 percent of the public said they’re “confused” – with 45 percent “disappointed” and an equal number “pleased.” Forty-two percent said they were “anxious,” and 40 percent said they’re “relieved.”

There’s anger, too.

Thirty percent of Americans say they’re “angry” about the law – and 16 percent of that group describe themselves as “very angry.” According to Kaiser, the specific grievances of that 30 percent broke down this way: “9 percent did not like the way the policymaking process worked, 7 percent did not like the final content, and 12 percent did not approve of either.”

The poll, which surveyed 1,208 adults in mid-April, produced one fascinating nugget sure to raise eyebrows in newsrooms around the country: Regardless of how they felt about health care reform, more Americans turned to cable news shows for their updates than any other news source. Asked to choose their “most important” source of news when following the legislation, 36 percent said cable news channels and their Web sites – easily topping the competition of network news (16 percent), newspapers (12 percent), family and friends (10 percent) and radio (9 percent).

Republicans were more likely to watch cable news, while Democrats preferred network news programs.


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Report says health care will cover more, cost more

J Roberts

A recent report says that healthcare costs will continue to rise even though landmark reform has been passed. There are some positive points; Medicare premiums are predicted to decrease and of course more Americans will have health insurance. Read the article, review the report and formulate your own opinion.

By RICARDO ALONSO-ZALDIVAR

The Associated Press

WASHINGTON — President Barack Obama’s health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up.

Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama’s aim of expanding health insurance – adding 34 million to the coverage rolls.

But the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.

It’s a worrisome assessment for Democrats.

In particular, concerns about Medicare could become a major political liability in the midterm elections. The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, “possibly jeopardizing access” to care for seniors.

The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration. White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings.

The report acknowledged that some of the cost-control measures in the bill – Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings – could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.” Foster’s office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system.

“A trillion dollars gets spent, and it’s no surprise – health care costs are going to go up,” said Rep. Dave Camp, R-Mich., a leading Republican on health care issues. Camp added that he’s concerned the Medicare cuts will undermine care for seniors.

In a statement, HHS Secretary Kathleen Sebelius sought to highlight some positive findings for seniors. For example, the report concluded that Medicare monthly premiums would be lower than otherwise expected, due to the spending reductions.

“The Affordable Care Act will improve the health care system for all Americans, and we will continue our work to quickly and carefully implement the new law,” the statement said.

Passed by a divided Congress after a year of bitter partisan debate, the law would create new health insurance markets for individuals and small businesses. Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship. Tax credits would help many middle-class households pay their premiums, while Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any changes.

The report found that the president’s law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

Administration officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans. They also point out that the law will decrease the federal deficit by $143 billion over the 10-year period.

The report’s most sober assessments concerned Medicare.

In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.

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Preventive care key to slowing health costs

J Roberts

Dr. James Proodian

Read the latest about health care reform. Wellness and its effects on reducing chronic illness needs to be addressed if we want to start reducing the ever growing cost of health care.

The effort put into the landmark legislation on the delivery of health care has been about everything but health care. The focus has been on manipulating the process rather than fixing the problem of rising health care costs and making Americans healthier.

The answer is preventive care, which has proven to reduce costs and improve wellness with disease prevention.

Today, the United States ranks 27th in the world in health, characterized by epidemics in obesity, depression, and type 2 diabetes. The bottom line is that 78 percent of all doctor visits are for chronic conditions, such as heart disease, obesity, type 2 diabetes, hypertension and other lifestyle-caused illnesses.

These are highly preventable, but there is no layer in our health care system that is defined, credentialed and committed to treating chronic illness.

Creating this new layer of health care is what legislators should be discussing. With all the focus on the cost of health care reform, no one is talking about the cost of chronic illness which accounts for 78 percent of all health care expenditures.

This means that three out of four patients are visiting their doctor because of chronic illness. Behavioral and lifestyle health changes are the best way to lower health care costs — and, more importantly, improve the health and wellness of individuals of all ages.

While there are health care professionals who are dedicated to chronic disease prevention and wellness, it is an individual’s responsibility to find them in their community. Real health care reform would be establishing a new layer in our health care system that is defined, credentialed and committed to treating chronic illness.

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Study: Riskier surgeries for back pain raise costs

J Roberts

A recent study reveals that certain surgeries are leading to increased costs without producing better and healthy outcomes.  In fact, the article suggests that certain surgeries may be performed too often and for inappropriate reasons.  Perhaps changing the economics of medicine, to reward better care rather than simply providing more care is the answer.

Associated Press

A study of Medicare patients shows that costlier, more complex spinal fusion surgeries are on the rise — and sometimes done unnecessarily — for a common lower back condition caused by aging and arthritis.

What’s more alarming is that the findings suggest these more challenging operations are riskier, leading to more complications and even deaths.

“This is exactly what the health care debate has been dancing around,” said Dr. Eugene Carragee of Stanford University Medical Center.

“You have one kind of operation that could cost $20,000 and another that could cost $80,000 and there’s not good evidence the expensive one is being used appropriately in the majority of cases,” Carragee said.

Add to that the expense for patients whose problems after surgery send them back to the hospital or to a nursing home and “that’s not a trivial amount of money” for Medicare, said Carragee. He wrote an accompanying editorial in the Journal of the American Medical Association where the federally funded study appears Wednesday.

The cost to Medicare, just for the hospital charges for the three types of back surgery reviewed is about $1.65 billion a year, according to the researchers.

All the patients in the study had stenosis in their lower backs, a painful squeezing in the spine that’s most common in people over 50. The researchers compared the risks for three different types of surgery for the condition: decompression, simple fusion and complex fusion.

“All operations aren’t the same and some seem to be associated with higher complication rates than others,” said lead author Dr. Richard Deyo of Oregon Health and Science University in Portland. “It’s not necessarily true that the more aggressive surgery is better, at least in terms of safety.”

There’s little agreement about the best way to treat chronic lower back pain, and much depends on what’s causing the pain.

Patients should ask their doctors about alternatives to complicated operations, Deyo said. Could steroid injections and physical therapy be tried? Would a simple decompression procedure be as helpful as a spinal fusion and with less risk?

In a decompression procedure, the simplest method in the Medicare study, a surgeon cuts away part of the bone that’s painfully pressing on nerves. It can cost about $30,000 in hospital and surgeon fees.

For a fusion, a surgeon binds two or more vertebrae together using a bone graft, with or without plates and screws. The researchers defined a complex fusion as one involving three or more vertebrae or more than one side of the spine. Fusions cost $60,000 to $90,000.

The researchers analyzed data on more than 32,000 Medicare patients who had one of the three types of surgeries in 2007.

About 5 in 100 patients who had simple or complex fusions suffered major complications such as stroke compared to 2 in 100 with decompressions. The risk of death within 30 days after surgery was different too: 6 in 1,000 for complex fusions compared with 5 in 1,000 for simple fusions and 3 in 1,000 for decompressions.

The study didn’t address how successful the various types of surgeries were at relieving pain.

More than half the patients who had complex fusions had a simple stenosis, which usually calls for decompression alone. They did not have the curvature of the spine or a slipped vertebra — additional conditions that might suggest a fusion is needed. There’s not much evidence for doing a complex fusion for a person with simple stenosis, Carragee and other experts said.

“It certainly looks like there’s more complex surgery being done than we have very good evidence to support,” Carragee said.

Rates of complex fusions in Medicare patients rose 15-fold from 2002 to 2007, while decompressions and simple fusions declined, the study found. Although the overall procedure rate fell, hospital charges grew 40 percent.

Aggressive marketing of devices used in complex fusions is likely playing a role in the increase, Deyo said. The marketing includes ads in medical journals and lectures by surgeons on the payroll of device manufacturers.

Allegations of kickbacks to spine surgeons for using products and questionable financial arrangements to doctors as consultants have plagued the multibillion-dollar industry. One company, Medtronic Inc., reached a $40 million settlement with the U.S. Justice Department in a whistleblower case that included allegations the company paid doctors to use its spine surgery products. The company denied any wrongdoing.

Dr. Charles Rosen, a spine surgeon at the University of California, Irvine, founded the Association for Medical Ethics to nudge doctors toward scientific evidence over vested interests. Forty-nine spine surgeons have joined, pledging to refuse any type of compensation or earnings from companies for using a product.

Rosen applauded a provision in the new health care law that requires device makers and others to file annual reports to the government on their financial ties to doctors. Patients will be able to look up possible conflicts in a government database.

“Too much fusion surgery is done in this country and often for inappropriate reasons,” Rosen said. While complex fusions are needed for some conditions, he said, patients “should not hesitate to get a second opinion.”

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Employer Healthcare Costs Outpace U.S. Healthcare Spending in 2009

J Roberts

Another article detailing the rise in healthcare costs particularly for small business and individuals. It’s interesting to note that inflation for 2009 was actually negative, yet healthcare costs continued to rise. What’s the deal?

HFMA

Average healthcare costs for U.S. employers rose 7.3 percent in 2009, up from 6.1 percent in 2008, according to a study by Thomson Reuters. Overall U.S. healthcare spending (including Medicare, Medicaid, and other payers) grew at a more modest 4.8 percent in 2009, according to National Health Expenditures data from the Centers for Medicare & Medicaid Services Office of the Actuary. The U.S. inflation rate was negative in 2009.

Not surprisingly, smaller employers were hit the hardest. Among small employers (less than 5,000 employees), healthcare costs increased 9.8 percent in 2009, up from 5 percent in 2008. Medium-sized employers (5,000 to 50,000 employees) saw cost increases accelerate from 6.5 percent in 2008 to 10 percent in 2009. Among large companies (more than 50,000 employees) costs rose 5 percent in 2009, down from 5.8 percent in 2008.

The study analyzed insurance claims data for 144 small, medium-sized, and large companies that provided health benefits to 9.5 million individuals from 2007 to 2009.

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