Tag: Costs

Crowd-sourcing Medical Bills

Nov 5, 2011• 7

By KATIE VAHLE

What if everyday purchases were priced and consumed like healthcare services?

These days you’d have to try hard not to know the price of a product or service before you buy it. So imagine booking an airline ticket with zero knowledge of the cost, only to return home to a bunch of outstanding bills for the trip. One statement may cover the seat rental and fuel used. Another bill may itemize each time the flight attendant handed out drinks. A few weeks later a bill for the pilot’s flying time may roll in. Can you imagine the resulting confusion, stress and angst?

I know it sounds absurd but this is the nightmare patients face every time they use the healthcare system. And it isn’t uncommon for these confusing medical bills to spiral out of control. Last year, the Commonwealth Fund (a non-profit healthcare research group) reported that 20% of US adults had medical debt or faced problems paying medical bills and only 58% of Americans felt confident they would be able to afford the care they needed.

So what options do consumers have when faced with the reality of paying for their healthcare?

What if the Supreme Court Strikes Down the Individual Mandate?

Nov 4, 2011• 20

By D. Brad Wright

Any ruling by the Supreme Court on the constitutionality of the Affordable Care Act’s controversial individual mandate isn’t likely for at least another several months, but it’s worth thinking about what might happen after the case is decided. The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear: If the Court finds the mandate unconstitutional, do they find it severable from the rest of the law? If not, they’ll strike the whole ACA down. This seems like the least likely outcome. If, on the other hand, they do invoke severability, the ball is back in the White House’s court. The decision at that point would be whether or not health reform can be successful without the individual mandate.

The concern here is the death spiral first described by Nobel Prize-winning economist Joseph Stiglitz. In essence, if we don’t require everyone to buy insurance, then insurance will be disproportionately purchased by the sick, making it more expensive and leading many to discontinue coverage in a continuous cycle that drives the price higher and higher until no one can afford insurance any more and the system collapses. By contrast, getting everyone into the pool is seen as the only way to keep costs down and maintain the insurance system. So the question is: What happens if the Supreme Court strikes down the individual mandate? Does the Obama adminsitration wash its hands of health reform, proclaiming that it can’t be done without the individual mandate because costs will rise too rapidly and the insurance system will collapse, or does it forge onward and see what happens?

Is Incentive-Driven Healthcare the Holy Grail of Engagement?

Nov 2, 2011• 16

By Michael Dermer

Industry studies confirm the strong connection between healthcare costs and the ingrained behavior of consumers and providers. Ironically, consumers and providers have access to more health information, tools, programs and support than ever before; yet healthcare costs continue to increase and chronic diseases continue to affect a larger portion of the population.

The healthcare industry is at an inflection point where payers, employers, providers and consumers must all be directly involved in the effort to manage the cost of care and to improve health outcomes. A critical aspect of this effort involves the motivation and behavior of all healthcare market participants, but primarily applies to the healthcare consumer and provider at the point of care delivery.

To drive engagement in programs designed to improve health, organizations have applied both incentives and disincentives, with varying degrees of success, as part of an overall engagement strategy. Generally, the presence of an incentive leads to improved results, but most incentive designs have fallen short of their potential. But some valuable lessons have been learned.

The healthcare industry has learned, for example, that incentives can drive behavior change, and can help establish a new baseline for consumer expectations, consumption patterns and health awareness. In turn, this newfound awareness has the potential to address the root causes of the nation’s healthcare crisis, leading to a more rational care model and slower rate of health cost increases.

More importantly, the well-intentioned but haphazard evolution of the application of incentives to various healthcare initiatives has yielded a robust volume of actual performance and cost-related information that can finally provide reliable links between program participation, behavior change, health outcomes and cost savings; and all of the necessary data to determine return on investment.

The Massachusetts Disconnect

Oct 28, 2011• 4

By Trudy Lieberman

Much of the national press took a pass last week on another important “study says” story out of Massachusetts. This is the second time in the last month where the national media missed a story with implications for the success of health reform. The latest report, which came from the Harvard School of Public Health and the Blue Cross Blue Shield of Massachusetts Foundation, showed that Massachusetts residents have different views about what’s causing the high prices of medical care than do the state and national policy wonks who are framing the solutions. What a surprise! We have repeatedly reported that the public is disconnected from what the pols are saying. Why should we be astonished they are not in step with the policy community?

The study, says lead researcher Dr. Robert Blendon, found that the public generally believes the cost problem stems from excessive charges by drug companies, insurers, and hospitals. Why not doctors? “Doctors have managed to present a picture in the state that they are not the reason why costs are rising. It speaks to the efficacy of the physicians’ campaign that their fees are not high enough,” Blendon told me. Indeed, doctors around the country have mounted local media campaigns to build their case that Medicare’s fee cuts will result in patients not getting care. Furthermore, the state media have focused mostly on the duel between hospitals and insurers, and that’s the message the public has received.

The Big Lie

Oct 18, 2011• 3

By Paul Levy

There is a wonderful expression in politics, “If you say something often enough, it becomes the truth.” Of course, it doesn’t really become the truth. A lie retold is still a lie. But, you can succeed in diverting political attention, especially in today’s news environment, when reporters are not given enough time and bandwidth to really explore issues.

Take today’s New York Times story about Massachusetts health care costs by Abby Goodnough and Kevin Sack. The thesis is that the introduction of capitated, or global payments, will offset cost increases resulting from universal health care access. The reporters give credence to the premise, even though there is not empirical support for the conclusion. Indeed, such support as exists in Massachusetts suggests that the manner in which global payments were introduced resulted in higher, rather than lower, costs. The story also fails to discuss consumer concerns about such plans, which would limit choice.

But then, the reporters retell the big lie, the one that suggest that concerns about the cost trends of the dominant provider group have been alleviated by a recently signed contract. Ready? Here you go:

Under market and political pressure, Partners also agreed to renegotiate its contract with Blue Cross Blue Shield and accept lower reimbursements, which is expected to save $240 million over three years. … Blue Cross Blue Shield of Massachusetts said payments to Partners would increase at about 2 percent a year rather than the previously anticipated 5 percent to 6 percent.

Let’s deconstruct this.

Who Should Pay for EHRs?

Oct 4, 2011• 33

By MARGALIT GUR-ARIE

During the 2008 Presidential campaign, Candidate Obama promised an EHR for every American by 2014. The goal was to improve quality of care, reduce disparities and contain costs of health care. When the HITECH act became law in 2009, physicians found themselves under increased pressure to purchase an EHR. Many took action, went out and bought an EHR for their practice, and these are now well positioned to collect the financial incentives put forward by the HITECH act. Many more did not. EHRs are by and large a complex and expensive proposition and the HITECH incentives are not covering the average cost of purchasing and maintaining an EHR. In survey after survey, physicians consistently rank cost associated with EHRs as their top concern when considering transition from paper charts to electronic medical records. This is a bit disconcerting, since physicians have no problem buying other expensive tools and paying for human resources in their practices. How are EHRs any different?

There are three primary stakeholders in health care: those who receive care, those who provide care and those who manage the financial aspects of health care, and no, we are not getting into the quintessential argument of whether there should be only two primary stakeholders. There are several secondary stakeholders as well: those who manufacture medical goods, those who provide ancillary services and those engaged in medical research.

Making Sense of Health Care Prices

Sep 23, 2011• 43

By JOHN GOODMAN

Take a look at the chart below. It shows representative prices for a knee replacement for different patients in different settings. The most shocking thing about the chart is that prices for essentially the same procedure are all over the map. Here are some obvious questions:

Why is the price of a knee replacement for a dog — involving the same technology and the same medical skills that are needed for humans — less than 1/6th the price a typical health insurance company pays for human operations? Why is it less than 1/3 of what hospitals tell Medicare their cost of doing the procedure is?
How is a Canadian able to come to the United States and get a knee replacement for less than half of what Americans are paying?
How are Canadians getting knee replacements in the U.S. able to pay only a few thousand dollars more than medical tourists pay in India, Singapore and Thailand — places where the price is supposed to be a fraction of what we typically pay in this country?
Why do fees U.S. employers and insurance companies are paying vary by a factor of three to one, when foreign, and even some U.S., facilities are offering a same-price-for-all package?

It’s amazing how often people cannot see the forest for the trees. Think how many volumes have been written trying (and failing) to explain why our health care costs are so high. Sometimes the answers to complex questions are more easily found by asking the simplest of questions.

Maryland Regulators Holding Hospital Costs in Check

Sep 16, 2011• 2

By MERRILL GOOZNER

President Obama’s health care reform bill is filled with experiments on how to hold down health care costs. There will be bundled payments for episodes of care and extra payments for raising quality standards. It calls for the reorganization of hospitals and physician practices into “accountable care organizations,” which will share in savings if their costs fall below previous levels.

What’s not in the legislation is old-fashioned hospital rate regulation, which only one state in the nation uses. The latest results from Maryland suggest rate regulation works.

The state’s Health Services Cost Review Commission (HSCRC) announced earlier this week that average costs per stay at Maryland’s 51 hospitals rose just 2 percent in 2010, significantly less than the 3 percent national average. Since 1977, when rate regulation went into effect, hospitals costs in Maryland have experienced the lowest cumulative growth rate of any state in the nation, going from 26 percent above the national average to almost exactly average, according to data contained in HSCRC’s latest annual report .

Maryland, which had the sixth highest hospitalization costs among 50 states and the District of Columbia in the mid-1970s, today ranks squarely in the middle of the pack. Its $10,983 in average costs per equivalent admission in 2010 was slightly less than the $10,996 national average.

2011 Costs of Care Essay Contest

Sep 5, 2011

By NEEL SHAH

Do you have a story about a medical bill that was higher than you expected it to be? Or a time when you wanted to know how much a medical test or treatment might cost? How about a time you figured out a way to save money while still delivering high-value care?

As part of our second annual essay contest, Costs of Care, a nonprofit group based in Boston, is offering $4000 in prizes for anecdotes like these that illustrate the importance of cost-awareness in medicine. Judges will include former White House Budget Director Peter Orzsag, former United States Surgeon General C. Everett Koop, Governor Jennifer Granholm, women’s health and cancer research advocate Dr. Susan Love, and Harvard University Provost Dr. Alan Garber.

The mission of Costs of Care is to expand the national discourse on the role of care providers in controlling healthcare costs. The stories we receive as part of our second annual essay contest will provide everyday examples from across the nation that illustrate the power patients and healthcare workers have to curb costs at a grassroots level. Many of the submissions we receive will be published right here on The Health Care Blog.

Submissions should be no longer than 750 words and are due by November 15th. More details are available at www.CostsOfCare.org/essay. Email submissions to co*****@*********re.org.

You can also read about our winning essays from last year here.

The Emperor Remains Unclothed

Aug 23, 2011• 33

By PAUL LEVY

I guess I shouldn’t be surprised when two of the architects of the health care reform act write an op-ed that continues in the deception that the law would deliver access, choice, and lower costs. But that is what Ezekiel Emanuel and Jeffrey Liebman offer in their New York Times article, “Cut Medicare, Help Patients.”

The authors start by saying some things that make a lot of sense. They point out that it would be smart to “eliminate spending on medical test, treatments and procedures that don’t work — or that cost significantly more than other treatments while delivering no better health outcomes . . . [and that} can be made without shortchanging patients.”

But they quickly give up that fight: “The sad truth is, Washington is never going to do a good job of making smart cuts to Medicare. Elected officials hate being blamed for directly restricting access to medical treatments — even when those treatments are proven to be worthless.”

So then they revert to their underlying bias, er, theology: “The responsibility for ending unnecessary medical spending needs to be placed in the hands of doctors and hospitals. This can happen only if we change our fee-for-service payment system.”