Tag: Costs

Why Should We Cover People Who Don’t Take Care of Themselves?

Mar 21, 2012• 16

By Joe Flower

One of the most common ideas in the whole healthcare financing discussion is a moral one. Why, people say, should my taxes and my healthcare premiums go to take care of the huge medical problems of people who don’t take care of themselves? As one commenter on THCB put it: “…self inflicted injuries to not be covered at all, ideally. If someone drinks their liver away I don’t think we should all have to buy them a new one. Same for smoking.”

This is a common idea, one that seems logical and right on the surface. But there are four assumptions built into it, all four of which have problems:

1) That the “self-inflicted injuries” that people commonly identify (smoking, drinking, other addictions, obesity) actually are major predictors of cost.
2) That we can clearly differentiate “self-inflicted injuries” from other medical problems
3) That to the extent that they are actually “self-inflicted,” the patient could just stop doing them if they just had enough gumption, or enough something.
4) That if our goal is to cut unnecessary medical costs, refusing medical coverage would cut costs.

But each of these four is problematic.
1) The best predictors of medical costs are not smoking, drinking, or obesity, but depression and stress. (“Association Between Health Risks and Medical Expenditures“) So trying to dis-insure “self-inflicted injuries” might miss the target of lowering healthcare costs.

2) Trying to decide what is “self-inflicted” and what is not presents a major problem. A friend has a lifelong condition that gives him excruciating pain. He has struggled manfully (and successfully) against addiction to booze and painkillers to ameliorate his pain. He has always felt bitter toward his father because his father was addicted to booze and painkillers. He recently realized that his condition is genetic, and guessing from some symptoms he observed, realized that his father was fighting the same excruciating pain. His attitude toward his late father changed instantly.

It’s NOT the Economy, Stupid!

Mar 8, 2012• 51

By J.D. Kleinke

With the US economy dragging itself to its feet, the housing and stock markets crawling back, and the Republican presidential candidates (and their nationally syndicated Falstaff) doing everything imaginable to alienate most American women, President Obama has been having quite a run of good luck. But there is one piece of good news clearly not welcome around the White House: new data showing that health care costs are stabilizing.

I know, I know – this is health care, costs are always out of control, and the sky is always falling. What could I possibly be talking about?

I’m talking about the actual numbers. The accompanying graphs reveal that health spending has actually been stabilizing for several years, and the system we all love to hate is finally re-entering the economy’s normal orbit after three decades of skyrocketing growth.

This of course is hardly a cause for celebration around the Obama Administration, for obvious political reasons. Why else would economists from the same department tasked with implementing health reform choose to tell us that this long-awaited good news is actually – well – bad news.

Huh? In both graphs below, newly released data through 2010 show that health spending over the past several years has been normalizing to the rate of overall inflation rather than outpacing it – or grossly outpacing it – as has been the case, nearly without interruption, since the 1970s.

The Cost of Coercion

Feb 28, 2012• 4

By John Schumann, MD

Nora, a third year medical student, came to me in moral distress.

Ms. DiFazio, one of the hospitalized patients on her Internal Medicine rotation, was frightened to undergo an invasive (and expensive) medical procedure: cardiac catheterization.

The first year doctor [‘intern’] with whom Nora was paired, Dr. White, vented to her:

“These patients come to us seeking our help and then refuse what we have to offer them,” Dr. White steamed.

At the bedside, the intern demanded to know why Ms. DiFazio refused the procedure. When no reason beyond “I don’t want to” was offered, Dr. White told Ms. DiFazio that there was no longer cause for her to stay in the hospital.

By declining the procedure, Dr. White informed Ms. DiFazio that she would have to sign out ‘against medical advice’ (AMA). To signify this she would have to acknowledge that leaving AMA could result in serious harm or death. In addition, Ms. DiFazio would bear responsibility for any and all hospital charges incurred and not reimbursed by her insurance due to such a decision.

The Unfortunate Side Effect of Death

Feb 16, 2012

By Andrew Schutzbank

Peggy was in her early 70s and suffered from a terrible lung disease known as pulmonary hypertension. Her case was so bad that she had a pump infusing a medicine under her skin 24 hours a day to keep the blood supply to her lungs open. Once started, this medicine, treprostinil, was known to improve life in those with pulmonary hypertension. Unfortunately, like all continuous infusion medicines of this type, it has the unfortunate side effect of sudden death if stopped for more than 4 hours. Starting it was a difficult choice for Peggy and her expert team of physicians, but her disease had progressed to a point where it was the right decision. As you can imagine, this drug was mighty expensive. We would only find out how expensive later.

On the day that I met Peggy, she was being admitted to the Intensive Care Unit (ICU) not for her pulmonary hypertension, but because she had a bleed in her stomach, which caused her to swallow blood/stomach contents into her already damaged lungs. Once stabilized, our first challenge was to ensure that she continued on the treprostinil. It took a little magic from pharmacy and the drug’s manufacturer, but we were able to get everything together and Peggy was no worse for the wear.

A few days later Peggy was improving, breathing tube out and awake and back to herself. Due to the special nursing needs with treprostinil, Peggy was required to be in the Cardiac Care Unit (CCU), a special type of (ICU), despite her progress. Even though Peggy managed this medicine at home by herself, hospital policy prevented her from transitioning out of the ICU to the general medical floor, at a fraction of the cost. Conceding that point, the decision was made to try and transition Peggy directly to Rehab. But her progress was stalled for one simple reason: treprostinil.
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Should Your Doctor Talk with You About the Cost of Your Pills?

Feb 15, 2012• 9

By Peter Ubel, MD

I first realized something was amiss when I picked up my prescriptions and the pharmacist explained that she could not fill the anti-malarial medications as prescribed: “Your medication plan only pays for 30 days of pills, and your prescription was for five pills.” The pharmacist continued: “Your PBM [that’s an acronym for pharmacy benefits management company, the type of company that coordinates many peoples’ medication coverage] only fills this medication for 30 days at a time. And 5 pills would last 35 days.”

Expert logician that I am, I countered with some math of my own: “Well four pills, taken weekly, only lasts 28 days. If they really want to give me 30 days of coverage, they need to give me a fifth pill.” I thought it was insane to pay a whole extra co-pay to get my fifth and last pill, a co-pay I’d have to pay for my two sons too since all three of us were traveling together.

But the pharmacist was unpersuaded: “Sorry, four pills is it. You’ll need another prescription for the last pill.”

Irked, I handed over my credit card and hastily signed the bill, too bothered by the conversation to look closely at the bottom line.

When I got home and told my wife Paula about the saga of the fifth pill, she calmly looked at the bill and asked me: “If you were so concerned about a $10 co-pay, why didn’t you notice that the antibiotic you were given cost almost $200?”

Huh?

It Takes a CEO to Save the U.S. Health-Care System

Feb 2, 2012• 22

By Darrell Moon

Forget Washington and the political debate over Obamacare. The real battle for the future of health care is being fought in the world of business, where tens of thousands of companies have seen their financial well-being undermined by skyrocketing employee health costs.

Although few people realize it, employee health costs have now become the third-largest expenditure for U.S. businesses today, constituting a whopping 8 percent of total compensation. And they are rising fast, more than doubling in just the last decade to more than $15,000 a year for family coverage. Of that cost, 73 percent is paid by the employer.

Yet most chief executive officers are curiously passive, failing to employ even the most basic management tools and market incentives to deal with the problem. Employees and employers alike — but first and foremost the boss — need to be held accountable for reducing the cost burden that is damaging so many companies’ bottom lines.

Here are seven things that CEOs can do:

No. 1: Give incentives to insurance brokers.

Most employers buy their health insurance through brokers who make more money when the plan costs more. Not exactly a smart way to get market forces working in your favor. Better to pay brokers on a fee-for-service basis. Better still to offer them a bonus tied to the amount by which they can reduce a plan’s costs, not a plan’s benefits.

No. 2: Give incentives to your managers.

Every CEO learned in business school that if you want to achieve a key business objective — be it launching a new product or reducing company health costs — you need to provide incentives to managers to help you succeed. Yet rare is the boss who offers bonuses to human-resources and benefits managers who reduce claims costs for the company. It’s long past the time for CEOs to get the incentives working in the right direction inside their companies, as well.

Why the Pilot Programs Failed

Feb 1, 2012• 12

By John Goodman

Just about everybody in the health policy blogosphere has noted with disappointment the failure of Medicare’s demonstration projects to reduce the costs of care. Recall that these are critical to President Obama’s challenge “To find out what works and then go do it.”

If nothing works, the fallback weapon in Obama Care is to reduce fees paid to doctors and hospitals. Yet the Medicare actuaries tell us that squeezing the providers in this way will put one in seven hospitals out of business in the next eight years, as Medicare fees fall below Medicaid’s. Under this scenario, senior citizens may be forced to line up behind welfare mothers, seeking care at community health centers and in the emergency rooms of safety net hospitals.

I believe this is the only blog that has confidently predicted that health care costs will never be controlled by running pilot programs and trying to “copy what works.” (Note, however: the Congressional Budget Office has shared our viewpoint from the beginning; see their previous conclusions here and here.) I’ll explain why I predicted failure all along below. First let’s review the latest results.

Over the past two decades, Medicare’s administrators have conducted two types of demonstration projects.

Disease management and care coordination demonstrations consisted of 34 programs that used nurses as care managers to educate patients about their chronic illnesses, encouraged them to follow self-care regimens, monitored their health, and tracked whether they received recommended tests and treatments. The primary goal was to save money by reducing hospitalization. With respect to these efforts, the Congressional Budget Office (CBO) finds:

On average, the 34 programs had little or no effect on hospital admissions.
In nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program.

Treating Heart Failure on a $100 Budget

Jan 30, 2012• 2

By Molly Kantor

As a third year medical student, I spent one afternoon each week at a health clinic at a community hospital affiliated with my medical school. This health clinic was focused on primary care for patients with HIV, and many of our patients were poor, homeless, immigrants, or uninsured. Many were also living with their diagnosis in secrecy and had to hide their medications and medical bills from family members.

One of my patients, who I will call Clara, was a 65 year old Haitian immigrant who diabetes, heart failure, and depression, along with HIV. Due to her medical conditions, she was unable to work. She had two grown children, but they did not live nearby and did not know about her medical problems, especially her HIV. Her husband, unfortunately, was very ill and lived in a nursing home. Clara somehow managed on her own, but her lack of insurance, poor medical literacy, and limited English proficiency made it difficult for her to stay healthy, and she was constantly coming to clinic for help.

At one visit, Clara seemed unusually tired and revealed that she had been feeling short of breath at home. In my mind, this raised many questions—Could this be a heart attack? Worsening heart failure? A blood clot in her lungs? Pneumonia?

Medical Records Supporting San Francisco’s Universal Care Add Millions to Official Cost

Jan 27, 2012• 3

By Angela Hart

The San Francisco Department of Public Health says it is ahead of the curve in rolling out databases that keep tabs on tens of thousands of patients across a citywide network of clinics and hospitals. The rollout is needed not just to make a local form of “universal health care” work, but also to meet a 2014 deadline under national health reform.

And the city says it spent just $3.4 million on new patient-tracking technology. Not bad for an unprecedented charity care initiative whose total budget has grown to $177 million just this past year.

But while clinics and hospitals across the city are now linked up to a common intake tool that eliminates overbilling and duplicated medical appointments, that is only the first step in making the Healthy San Francisco program successful, directors of local health centers and technology experts say.Continue reading…

(Almost) Nothing Works

Jan 21, 2012• 49

By Robert Laszweski

I will suggest that most of us believe the way to control health care costs, and at the same time maintain or improve quality, is to both use the managed care tools we have developed over the years, and perhaps more importantly, change the payment incentives so that both cost control and quality are upper most in the minds of providers and payers.

The Congressional Budget Office (CBO) has just released an important review of Medicare’s results in testing those ideas. The news is not good.

From the CBO’s blog post:

In the past two decades, Medicare’s administrators have conducted demonstrations to test two broad approaches to enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program. Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

In an issue brief released today, CBO reviewed the outcomes of 10 major demonstrations—6 in the first category and 4 in the second—that have been evaluated by independent researchers. CBO finds that most programs tested in those demonstrations have not reduced federal spending on Medicare.

Continue reading…