Negotiate medical bills

The $2.7 Trillion Medical Bill

Doug

The fragmented health care market in the United States has driven up costs, putting deep economic strains on consumers and the country. The Affordable Care Act promises to help Americans become insured and obtain access to the system. What about reducing health care cost? Reducing the cost of care has been more elusive. In the mean time consumers need to find trusted partners to reduce medical bills.

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

 By ELISABETH ROSENTHAL, NY Times

 Deirdre Yapalater’s recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385. That is fairly typical: in Keene, N.H., Matt Meyer’s colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500. “Could that be right?” said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.”

In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care. Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

 While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.

Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries. Their numbers have increased manyfold over the last 15 years, with data from the Centers for Disease Control and Prevention suggesting that more than 10 million people get them each year, adding up to more than $10 billion in annual costs. Largely an office procedure when widespread screening was first recommended, colonoscopies have moved into surgery centers — which were created as a step down from costly hospital care but are now often a lucrative step up from doctors’ examining rooms — where they are billed like a quasi operation. They are often prescribed and performed more frequently than medical guidelines recommend.

 The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.

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Tips for Lowering Your Medical Bills

J Roberts

Don’t be intimidated by high medical bills. What patients don’t realize is a review to find errors and working with the provider can often enable you to reduce medical bills. To enhance your outcome, enlist the services of a medical bill negotiation expert. With the help of a professional who can provide data, most providers will negotiate and offer some type of discount on out-of-pocket medical expenses. Here are some excellent tips that every health care consumer should know when faced with large and expensive medical bills.

By Alice Park, Time Magazine Online

It doesn’t happen often, but occasionally you can catch a mistake on a restaurant check or a miscalculated receipt from the grocery store. Hospital bills, however, are another matter: as many as 8 out of 10 bills for health care services contain errors, according to Medical Billing Advocates of America. Since Americans spend nearly $7,000 per capita on health care every year — and since these expenses climb steadily, at an average annual rate of 6.5% — it’s probably worth scrutinizing the remittance from your last hospital visit. It just might save you hundreds, if not thousands, of dollars.

According to medical-billing advocates, who are the health care world’s equivalent of tax-refund specialists, there are ways to protect yourself from huge health care expenditures both before you’re seen by a doctor and after you receive your bill. “When you are in the hospital, you should concentrate on getting better,” says Kevin Flynn, president of HealthCare Associations, a company that helps patients decipher their medical bills. “Do what is best medically first, then worry about the finances second.”

At the emergency room or in the hospital:

If you are insured, ask to be seen by a doctor who participates in your insurance plan. Just because a hospital is considered in-network by your plan doesn’t mean that all the physicians who work there are as well. This may not always be possible, but if your preference is noted in your file, once you receive your bill, you may be able to negotiate with the hospital to accept your insurer’s higher in-network reimbursement rate, leaving you with a smaller financial responsibility, even if you are seen by an out-of-network doctor.

For the same reason, if you are able to, ask to have any lab testing that is sent outside the hospital to be sent to facilities that participate in your insurer’s plan.

If possible, ask about the tests the doctor or nurses are ordering. If a less expensive test can provide the same information, then request that option. In some cases, for example, less expensive ultrasound tests are just as effective as costly CT scans.

Once you get your bill:

Always ask for an itemized bill so you can see every charge.

Ask for an explanation, in writing, from the hospital’s billing department for any disputed charges.

If you go to the hospital at night and end up being admitted after midnight, make sure your charges for the room start on the day you start occupying the room.

Check the level of room for which you were charged. Hospitals charge for ER services by level, depending on the amount of equipment and supplies needed, with Level 1 requiring the fewest (e.g., a nosebleed) and Level 5 representing an emergency (trauma, heart attack). Question the level indicated on your bill and ask for a written explanation of why that level was billed. Hospitals have their own criteria for determining levels and should make this available upon request. “They don’t freely hand this information out, but they will send it to you if you ask for a written response,” says Pat Palmer, founder of Medical Billing Advocates of America.

Doctors also charge for ER services by level, also ranging from 1 to 5. Their levels are standardized, and physicians are required to meet three criteria to justify billing at each level. Question the level listed on your bill and ask for a written explanation of why that level was billed by your physician.

The hospital level should be equal to or lower than that of the doctor-billed level; if it’s higher, that’s a red flag that there may be a billing error.

Question charges for what seem like routine items, such as warm blankets, gloves and lights. These should be included as part of the facility fee.

Question any additional readings of tests or scans. You should be charged only once for one doctor’s reading of a scan, unless it is a second opinion or consultation.

If you received anesthesia, check that you were charged for only one anesthesiologist. Some hospitals use certified registered nurse anesthetists (CRNAs) but require that an anesthesiologist supervise the procedure, so some bills will contain charges from both, which amounts to double billing.

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Three Ways to Slash Your Medical Bills

J Roberts

Medical Cost Advocate’s CEO Derek Fitteron was recently interviewed for Fox Business. Read the following BLOG post to learn more about reducing medical costs. Dont forget to negotiate your medical bills and save money. It’s worth the effort. In these difficult economic times, why pay list price when you may be able to save.

By: Donna Fuscaldo

FOXBusiness

Published July 10, 2012

Many things in life are negotiable, including medical bills.

“More and more billing offices, whether it’s a hospital or doctor’s office, are much more receptive to bargaining,” says Nancy Fase Guernon, director of operations at CareCounsel, an health advocacy firm. “There’s definitely ways to negotiate the bill.”

 According to a survey of Angie’s List members who asked for discounts from their doctors, 74% said they were successful. “We’ve heard some great success stories from members who have successfully negotiated with their health care provider,” says Angie Hicks, founder of the peer-review website. “It doesn’t hurt to ask. You’ll be amazed at what you can save and still get great care.”

 From making sure your bill is correct to negotiating ahead of a procedure there are ways to get as much as 40% off your medical bill. Here’s how:

Step One: Check the accuracy of the bill

Medical billing mistakes are common, so review the invoice carefully before submitting payment.  Experts say it’s common for a procedure to be coded wrong by the doctor’s office and lead to excess charges.

 Patients should review their health insurance plan to know what is and is not covered. “You want to make sure if it’s the insurance company’s responsibility to pay it, it’s paying what it should according to the plan,” says Fase Guernon.

 If you don’t have insurance or are going out of network and are paying out of pocket, Derek Fitteron, founder and CEO of Medical Cost Advocate, advises getting a full cost estimate of the procedure upfront to avoid any surprises at the end and you avoid getting overcharged.

 Fitteron also suggests asking for an itemized bill so you can review the charge for every procedure. “Sometimes there are mistakes and those mistakes might include bills for the wrong procedures or procedures that didn’t happen.”

 Step Two: Negotiate Up Front

Think of negotiating health care like shopping for a car. A dealership wants your business and will working with you—same idea applies to a doctor. For instance, many times doctors will reduce their price if you pay in cash or pay for the procedure ahead of time.

 According to Hicks, some hospitals and doctors will cut a health-care bill by as much as 50% if you pay in cash on the day of service. “We had a member from Washington D.C. who saved $9,000 on his mother’s in-home care by bargaining ahead of her treatment.”

 To negotiate ahead of time, experts say it pays to do your homework. Procedure prices vary be region, so know what know what is common in your area before negotiating. “Do the research so you are not throwing out numbers. That can be insulting,” says Fitteron.

 Step Three: Be honest about your financial situation

 If you get hit with a medical bill that you can’t afford, the best thing to do is call your doctor or hospital and honestly explain your financial situation. Often times the medical facility will be willing to reduce the bill as long as you agree to pay something.

 “If you ask the billing office for a discount and you are willing to pay something right then more times than not they will knock down the bill 30% to 40%,” says Fase Guernon.

 Some providers will set up interest-free payment plans. Hicks points to one member who saved $4,000 by talking to her doctor about her financial concerns. The member couldn’t afford the costs that weren’t covered by the insurer so the doctor agreed to collect just the insurance portion, she says.

 “Too many consumers aren’t aware of just how much power they have to negotiate their health-care costs. There are many great doctors, dentists and other health-care specialists out there who are willing and eager to work with their patients to provide them with high quality, affordable care,” says Hicks.

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Aetna sues 9 N.J. doctors for “unconscionable” fees

J Roberts

Lawsuits claim that the out-of-network physicians charged as much as $50,000 for an inpatient consultation.

By Alicia Gallegos,

American Medical News

Aetna Inc. has accused nine New Jersey doctors of charging excessive fees for out-of-network services. Four are countersuing, alleging that the insurer is guilty of fraudulent billing practices.

The lawsuits are the latest development in a debate among insurers and health care professionals over “usual, customary and reasonable” rates for out-of-network doctors.

Aetna sued the physicians between July and November 2010, claiming that they had charged “unconscionable” fees for services and threatened to balance-bill patients if not paid.

Cardiologist Benjamin Hannallah, MD, of Watchung, N.J., charged up to $48,980 for an inpatient consultation in 2009, an increase of more than $47,000 from his 2007 rate, according to one of the lawsuits. The average Medicare charge for an inpatient consultation is $358.12, according to 2010 data from the Centers for Medicare & Medicaid Services.

Cardiologist Karan Nejad, MD, of Hackensack, N.J., raised his fee for seeing critically ill hospital patients from $2,040 in 2007 to $15,000 in 2008, another lawsuit claims. The average charge for the first hour of a critical care visit is $520.76, according to CMS data.

Gynecologist-obstetrician Waleed Abdelghani, MD, of Hackensack, who assisted in two cesarean sections, allegedly charged $30,000 for each surgery, while in-network surgeons were paid about $2,000 for the same procedure, Aetna said. Standard pay for a surgeon assisting a C-section is $1,400, Aetna spokeswoman Cynthia Michener said.

“These were just outrageous bills,” she said. “We are hoping to develop some case law here that there is such a thing as an outrageous fee.”

The sued physicians treated patients at hospitals in Aetna’s network. The patients had no knowledge they were being treated by out-of-network doctors, Michener said.

Attorneys for the doctors denied Aetna’s allegations and maintained the fee rates were reasonable. Aetna has taken the charges out of context and made much of simple clerical errors, said Robert J. Conroy, attorney for Drs. Hannallah and Nejad.

“Their case is built on half-truths, innuendo and omissions of material facts,” he said.

Aetna is attempting to establish regulations on out-of-network fees through the courts because of its failure to do so legislatively, said George Frino, attorney for interventional cardiologist Deepak Srinivasan, MD, of Hackensack, one of the defendants.

“[Dr. Srinivasan] was shocked and appalled that an insurance carrier would claim fraudulent billing activities when, for years, his invoices were processed in due course, and no complaint was ever made by Aetna,” Frino said. “In our mind, this is a gross misuse and abuse of the judicial system.”

Between November 2010 and March, four physicians, including Dr. Srinivasan, countersued Aetna. They allege deceptive billing practices and racketeering, among other claims. Aetna denies the allegations and has asked a judge to dismiss the suits.

Most out-of-network physicians practice fair billing, Michener said. Only a handful take financial advantage of hospital patients, she said.

Aetna plans to review similar billing patterns in other states to identify doctors who are potentially billing excessively.

“Some doctors who used to be in-network realized they could go out-of-network and raise fees because they had a captive patient base in the hospital,” she said.

Billing system at odds

Insurers and physicians have fought in court elsewhere over acceptable UCR rates.

In 2000, the Litigation Center of the American Medical Association and State Medical Societies sued Aetna, UnitedHealth Group and several others over a database used to determine fees for out-of-network care. The Litigation Center said the system for years had been using flawed data to set the rates.

The suits triggered an investigation by Andrew Cuomo, then New York attorney general. In 2009, UnitedHealth Group reached a $350 million settlement.

As part of a separate settlement with Cuomo’s office, large health insurers operating in New York agreed to stop using the data. None of the companies that settled admitted wrongdoing. Cases against Aetna, Cigna and WellPoint are pending.

Ingenix, a subsidiary of UnitedHealth Group, which sold the database at the center of the Cuomo agreements, is now known as OptumInsight.

A database created by FAIR Health, an independent nonprofit, was launched in January. Database officials expect to send payments based on the new figures to physicians by the summer.

American Medical Association President Cecil B. Wilson, MD, said the AMA supports more transparency in the out-of-network billing system.

“The AMA does not condone excessive fees for medical care and encourages physicians and patients to discuss costs before medical services are provided,” he said.

Also named in Aetna’s lawsuits are: internist Magdy Wahba, MD, of Paterson, N.J.; neurological surgeons, David Estin, MD, Jonathan Lustgarten, MD, and Ty James Olson, MD, all of Ridgewood, N.J.; and obstetrician-gynecologist Azer Alizade, MD, of Hackensack, N.J. Aetna also listed several “John Does” in the suits to allow for more defendants if their involvement later becomes clear.

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Ultrasound at $59,490 Is Outrage in Aetna Claim Against Doctors

J Roberts

Here is recent news about doctors charging outrageous fees for some basic services. This is surely one of the reasons health care costs continues to rise. Consumers, please be sure to confirm what insurance your doctor accepts. If he or she is not in your plan’s network, inquire what the charge will be and find out what you may be responsible for in out-of-pocket costs. Medical Cost Advocate can assist you in negotiating your out-of-pocket costs. No one wants to be stuck with a $56,980 consultation fee.

by Peter Waldman

(Bloomberg) — Aetna Inc. is suing six New Jersey doctors over medical bills it calls “unconscionable,” including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74.

The lawsuits could help determine what pricing limits insurers can impose on ”out-of-network” physicians who don’t have contracts with health plans that spell out how much a service or procedure can cost.

One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.

“If these charges are accurate, consumers and purchasers should be outraged,” said David Lansky, president of the San Francisco-based Pacific Business Group on Health, a coalition of health-insurance buyers that includes Chevron Corp., Walt Disney Co. and General Electric Co.

Lawyers for the doctors declined to comment on specific charges in the suits, and said their clients did nothing wrong.

The insurance industry is grappling with how to respond to out-of-network hospital physicians who realize they have pricing muscle, according to Arthur Leibowitz, chief medical officer of Health Advocate Inc., a Plymouth Meeting, Pennsylvania, insurance adviser.

“These doctors can charge whatever they want,” Leibowitz said. “The challenge for the carriers is to come up with an agreeable, acceptable, unbiased judgment as to what a reasonable and customary reimbursement rate is.”

AMA Lawsuits

Aetna tried in 2007 to impose caps on some out-of-network payments, prompting doctor complaints to the New Jersey Department of Banking and Insurance. The agency sided with the doctors, fined the company $2.5 million, and ordered it to pay out-of-network practitioners enough so that patients wouldn’t be asked to pay balances other than co-pays.

In 2009, Aetna, UnitedHealth Group Inc., Cigna Corp. and WellPoint Inc. were accused by the New York attorney general of underpaying out-of-network physicians by manipulating a database used to calculate payments. They paid a total of $90 million in settlements without admitting wrongdoing. UnitedHealthcare agreed that year to pay $350 million to settle a lawsuit by the American Medical Association over the same issues. Similar AMA lawsuits against Aetna, Cigna and Wellpoint are pending.

Rare Glimpse

The Aetna lawsuits, filed in superior court in Camden, New Jersey, over the last eight months, allege the defendants violated New Jersey Board of Medical Examiners rules against excessive fees, and seek triple damages under state insurance- fraud laws against filing false or misleading claims.

The complaints provide a rare glimpse at the sums physicians earn from an insurer and the huge variations in what different doctors charge and receive for the same services.

Aetna reimbursed the defendants $8.3 million in 2009, up from $4.9 million in 2008, spokeswoman Cynthia Michener said, sometimes paying the full amount demanded and sometimes not. The insurer paid some of the large charges because of state regulations mandating timely payments and to prevent doctors from sending patients big bills, Michener said.

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If Healthcare Reform Fails: Fewer Well-Insured Patients Will Leave Doctors Hurting

J Roberts

Is the current Medicare reimbursement method flawed?  It depends on your perspective, but one thing appears more and more apparent – the recent healthcare reform bill does not appear to be a solution to the problem.

BNET Today

Judging by the opposition of surgical societies and some state medical societies to the Senate healthcare-reform bill passed last December, many physicians — particularly highly paid specialists — are relieved now that it appears the legislation is on its deathbed. But they shouldn’t be too gleeful, because in the absence of reform, fewer and fewer patients will be able to afford their services.

Just ask Clyde Yancy, a cardiologist who heads the American Heart Association (AHA). Yancy cited a recent AHA survey of heart patients in explaining why he believes that reform of the system is still necessary. In the survey of 1100 adults who said they had heart disease, a stroke, or high blood pressure, 56 percent of the respondents — most of whom had insurance — said they’d had trouble paying for prescription drugs or medical care in the past few years.

In an op-ed piece about the survey in a trade publication, Yancy referred to the “collective sigh” of relief among physicians about the stalling of reform and suggested that it’s premature. “The need for the discussion has not gone away,” he said. “If anything, that need is highlighted by this survey.”

Of course, Yancy is walking a fine political line. He chose not to highlight the financial pain doctors will feel as insurance coverage shrinks, and instead focused on the problem of patients not receiving proper care because they can’t afford it. But his intended audience of heart doctors can certainly read between the lines, particularly since they’re already battling to preserve their incomes in light ofsome recent Medicare changes.

Last fall, Medicare announced changes in its reimbursement methodology that basically lowered payments to specialists while raising them for primary-care physicians. Cardiologists, among the hardest hit specialists, were slated to lose an average of eight percent in 2010 and more in the ensuing three years. The new fee schedule also slashed payments for nuclear scans by 40 percent and cut the fees for echocardiograms and other tests by about a third. In late December, the American College of Cardiology (ACC) sued HHS Secretary Kathleen Sebelius to reverse the cuts scheduled to take effect Jan. 1. Two weeks later, a federal court in Miami dismissed the suit on jurisdictional grounds, but the ACC pledged to carry on the legal fight.

The cardiologists, of course, claim that the drop in Medicare payments for high-end imaging tests will drive some of them out of business and that they’ll have to cut back on the services for the poor. In actuality, though, heart doctors have steadily ramped up their use of tests and other services to maintain their incomes. A study released last fall by cardiology services provider MedAxiom found that visits to cardiologists had risen 12 percent in 2009 and that return visits had climbed 34 percent since 2000. Meanwhile, the number of echos that cardiologists performed jumped 15 percent in 2009 and 43 percent in the previous five years.

These numbers highlight the main issue: the more Medicare cuts back on reimbursement, the more tests, procedures and follow-up visits physicians do. And the more doctors do, the more Medicare cuts its fees. The only solution is to dump the fee-for-service payment system — a goal that some of the provisions in the healthcare reform legislation would move us toward. Having to live within a budget would upset cardiologists even more than the recent Medicare cuts. But it’s hard to see how their patients will be able to afford their services in the long run under any other reform plan.

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Hijacked, Stolen Health Care Reform: Why Health Care Costs Will Not Be Contained

J Roberts

Costs continue to rise even with the passage of landmark healthcare reform. Read the following article for an interesting take on outcomes of the new reform.

John Greyman

The passage of the Patient Protection and Affordable Act of 2010 (PPACA), our new health care legislation, in March was hailed by its supporters as an historic event of the magnitude of Social Security and Medicare. But four months later, it remains controversial, with repeated polls showing three large groups of divisive opinion, including those who would work to repeal it and others who believe that it will make no difference. The Democrats have launched a $125 million PR campaign to defend the new law amidst growing signs that many Democrats facing re-election are failing to get political traction on the issue. (1)

We are being advised by many to “wait and see” how this complex new bill plays out over the next five to ten years, but we can already know what its outcomes will be. More than 30 years of health policy science, including documentation of the repeated failures of incremental changes built into the new law, together with well-entrenched trends in our market-based system, allow us to project its outcomes with confidence. For this legislation has been molded and crafted by the political power and money of corporate stakeholders in the medical-industrial complex.

Five previous posts in 2009 described the uneasy “alliance” of the five biggest players — the insurance industry, the drug industry, the hospital industry, business and organized medicine. They will do just fine with the new law at the expense of patients, families and Main Street.

Health care “reform” this time around was intended to address these four basic system problems: (1) containing health care costs, (2) making health care more affordable, (3) increasing access to care, and (4) improving the quality of care. This post introduces a series of five that will examine how well the PPACA will do on each of these four goals, followed by an overall assessment of the law. These posts will draw in part from my new book Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, soon to be released by Common Courage Press in both print and eBook format.

Continued Unrestrained Drivers of Health Care Costs

These are some of the many reasons that we can already conclude that health care costs will continue to run out of control at rates far exceeding the costs of living and median household incomes.

• No price controls. Wall Street has already factored in rapid expansion of markets for drugs, medical devices and other services in a system of expanded access. There is also a long line forming of providers of information technology and administrative services that will exploit the complex implementation of this law.

• No bulk purchasing. The PPACA has prohibited the government from negotiating the prices of prescription drugs and retains a ban on importation of drugs from Canada and other countries.

• Lack of control over perverse incentives that drive increased volume of services. These in turn are driven by retention of fee-for-service (FFS) reimbursement that encourages physicians and other providers to offer more services than are medically appropriate or necessary.

• No effective mechanism to rein in marginal or ineffective technologies. Coverage policies for new drugs and medical devices are still lax and not subject to rigorous evidence-based criteria for either efficacy or cost-effectiveness.

Although the PPACA does call for a Patient-Centered Outcomes Research Institute, its role is already neutered by not having the power to mandate or even endorse coverage or reimbursement rules for any particular treatment. (2)

• The dominant business model of health care prevails, with many facilities and services remaining for-profit and investor-owned and with an ongoing trend for increasing consolidation within industries.

• The PPACA has grandfathered-in specialty hospitals, typically physician-owned facilities that focus on well-reimbursed procedures in such areas as cardiology and orthopedics, whereby physicians can “triple dip,” earning high incomes as providers, owners and investors.

• More preventive services will further fuel health care inflation. While the PPACA does provide new coverage for many preventive services, this will lead to increased costs due to additional diagnostic and treatment services engendered. (3)

• Private insurers can’t contain health care costs, even where they have dominant market power. A 2009 report by the Congressional Research Service, “The Market Structure of the Health Insurance Industry,” concludes that:

The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. (4)

• There are no controls over premium rate increases by insurers. Despite the outcry by government officials, annual premium rates are escalating at rates up to 56 percent (5), and there is no end in sight for continued exorbitant rate increases. Insurers will continue to game the system by extracting maximal profits and offering reduced coverage with actuarial values (the amounts insurers actually pay in coverage) as low as 60 or 70 percent.

• National health care spending will grow unabated despite the passage of
PPACA. The Centers for Medicare and Medicaid Services (CMS) projects that overall national health expenditures (NHE) will increase from its present 17 percent of GDP to 21 percent in 2019, a total of $4.470 billion. (6)

These well-documented trends leave no room to think that health care “reform” will have any chance to contain health care costs. Instead, health care inflation will be exacerbated by all the new incentives and inefficiencies in the new “system.” In our next post we will examine the impact of these trends on affordability of health care.

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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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Hospital costs: Pull back the curtain

J Roberts

Read how one state’s governor is not only reviewing insurance rates, but also hospital rates as he and the state look for ways to curtail excessive increases.

If nothing else, Governor Patrick’s proposal for state review of both hospital and insurance rates should start an overdue discussion of how to keep health cost increases from smothering economic growth in the state.

The course advocated by the state’s payment reform commission last year – a move away from fee-for-service payments – may be the long-term solution. But in the meantime, both employers and individuals are facing increases well in excess of the national rate of medical inflation. Forcing both insurers and hospitals to lay out their contract proposals before a rate-oversight body would at least end the shadow play that has kept the public in the dark about wide differences in hospital costs.

Also, Patrick’s proposed requirement that insurers at least offer small businesses a plan with a network lacking some higher-cost hospitals would ensure that companies have that more affordable option. In the past, consumers and their employers have been wary of plans that lack access to marquee hospitals, but years of spiraling health costs have probably changed some minds. Let the debate, or “conversation,’’ as Patrick calls it, begin.

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Too Little on What Controls Costs

J Roberts

Robert Reich’s comment stating the President’s speech should have been clearer about how his plan will contain future costs was right on the mark. See his blog posting below.

More than a week after the Presidential speech to Congress there still has not been any indication or revelation on how the administration intends to reign in the high cost of care that continues to grow at an unacceptable level.  While President Obama wasted no time bashing insurance companies for their unjust practice of dropping coverage for preexisting conditions or other catastrophic illnesses, he failed to touch upon or address the crux of healthcare reform: containing cost.

At no point was there mention concerning the myriad of components that contribute to the rise in health care costs such as physicians, hospitals, pharmaceutical companies and other entities all entrenched in our current health care system. It is true that insurance bureaucracies contribute to the rise in health care costs, they themselves are not the lone culprit. The fact is, there are so many moving parts to this byzantine system, all of which contribute to rise in costs. This is a fact that can’t be ignored by the Administration, Congress or anyone wanting to promote real change to the system. Without controlling the increasing rise in costs, any plan is doomed for failure.

Robert Reich, a professor at the Goldman School of Public Policy at the University of California at Berkeley, was secretary of labor in the Clinton administration. He is the author, most recently, of “Supercapitalism,” and he blogs at Robert Reich’s Blog.

The president’s rebuttal of the fear-mongers was strong and he made a compelling case for preventing insurers from denying coverage because of pre-existing conditions or dropping coverage because of a serious illness and for requiring all Americans to have health insurance. He clarified his goal of full coverage and his support for a public insurance option.

He should have been clearer about how he intends to pay for the coverage of Americans who can’t otherwise afford it.

But I thought he should have been clearer about how he intends to pay for the coverage of Americans who can’t otherwise afford it, and how he’ll contain future costs. A commission to look at health outcomes is a fine idea but how are its findings to be used and enforced?

Taxing high-cost insurance plans is worthwhile but won’t raise much money or dramatically reduce future costs. An optional public insurance plan that’s open to all would put competitive pressure on private plans to reduce costs while also pressuring drug companies and providers to do the same, but his version of a public option would be available only to a relatively small number of Americans who lack employer-provided care.

The proposed health care exchange could generate real savings if the federal government acts as gatekeeper and limits access only to private insurers that offer low prices and high quality, but he didn’t explain the government’s role.

Still, he recaptured the initiative on health care and provided some cover for conservative and Blue Dog Democrats who need it in order to vote for the plan — which, I assume, were his most immediate political goals.

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