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Tag: Costs

The New Cost-Conscious Doctor

• 28

By JANE SARASOHN-KAHN

Doctors practicing in the U.S. are becoming increasingly conscious of the increasing costs of health care. Most consider themselves cost-conscious, and are considering the impact of their practice patterns — in terms of prescribing medicines, tests, and procedures — on the nation’s health bill. In fact, most physicians feel they have a responsibility to bring down health costs.

This perspective on physicians comes from the survey report, The new cost-conscious doctor: Changing America’s healthcare landscape, from Bain & Company, published in March 2011. Bain spoke with over 300 U.S. physicians to assess their perspectives on managing costs, drug and device usage, and standardized care protocols.

The top-line finding is that, regardless of physician demographic — whether male or female, salaried or productivity-based, specialist or generalized, urban or rural, young or mature, doctors uniformly see that they must change clinical practice patterns to accommodate the realities of health economics.Continue reading…

And the Worst Health Care System in the World Is…

• 53

By EVAN FALCHUK Evan Falchuk

The United States, of course.

Oh, no, wait, it’s Canada.

Actually, I think it could be Germany.

Geez, now I think it might be the UK.

You could go on and on like this.  But you know what?

No matter how good or bad your system is, there are certain universal truths.

Here are four of them that might make you look at global health care a little differently.

First, health care is getting more expensive, all over the world.  A new study by the global consultant, Towers Watson (disclosure: Towers Watson is a Best Doctors client) found that the average medical cost trend around the world will be 10.5% in 2011.  In the advanced economies costs will rise by an average of 9.3%.  While Americans tend to think of rising medical costs as a uniquely American problem (they’ll rise by 9.9% here), it’s just not true.  Canadian costs will rise by 13.3%.  In the UK and Switzerland, they will increase by 9.5%, and in France by 8.4%.

Continue reading…

The 100% Estate Tax

• 24

By MERRILL GOOZNER

There is a dangerous but beguiling econometric logic behind the idea that turning Medicare over to the insurance industry will lower health care costs. It’s an idea that could catch on if the general public became convinced that there is nothing we can do acting together as a society to lower the cost of care. Only the market can do it, the Republicans claim. Force seniors (or the poor or anyone, for that matter) to have more skin in the game, and they’ll use their clout as consumers to separate the wheat from chaff in modern medicine. Expensive, wasteful tests, procedures, and drugs will wither for lack of customers.

Democrats, in attacking the Republican plan that passed the House yesterday, relentlessly hammered away at the cost to future seniors of having “more skin in the game.” Two-thirds of the cost of care within a decade of Medicare privatization in 2023 will fall on them. But the 2030s must seem very far away to people in their 40s and 50s. Isn’t it likely that they won’t think about that far-off time, but instead grab on to the promise of future lower costs, which, let’s be frank, the Affordable Care Act (health care reform) may not be able to achieve.

So here’s the real argument young and middle-aged people need to hear, and the real reason why the “more skin in the game” argument can never work for seniors or other vulnerable populations, including them when they reach that age. Seniors and the poor account for over half of health care spending. Within those groups, 5 percent of the population accounts for 50 percent of health care costs; and 20 percent of the population accounts for about 80 percent. These costs come for the most part at times when economic incentives have no influence at all on medical decision-making: in medical crises; in treating chronic conditions; and, for most Medicare patients, in the last six months of life.

That’s why a voucher program for Medicare, which will shift an increasing share of those inevitable costs onto the elderly themselves, can fairly be categorized as a 100 percent estate tax or death tax. People under 55 need to know that if the plan crafted by Rep. Paul Ryan were passed, most of them will never have a cent to leave to their children. It will all go to the health care industry to support the American way of dying.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, Financial Times, The American Prospect and The Washington Post. You can read more pieces by Merrill at  GoozNews, where this post first appeared.

Three Formulas

• 51

By MERRILL GOOZNER

During the last election campaign, Tea Party-backed Republicans across the country rode to power on a tidal wave of advertising attacking health care reform as a cut in Medicare.  It is. If efficiency programs like the accountable care organizations being formed across the country don’t hold down spending by about $500 billion over the next decade, an Independent Payments Advisory Board would make recommendations for holding growth in Medicare spending to the growth in the domestic economy (GDP) plus one percentage point.

In most years when the economy is humming along, that would be about 4 percent. Over the past decade, health care spending for seniors grew at about 6 to 7 percent — the same as health care spending for the rest of the population. So if the Medicare delivery system reforms don’t work, Congress will either have to adopt the IPAB’s recommendations or institute cuts of its own to ratchet down spending.

This week, President Obama upped the ante to meet his budget deficit reduction targets over the next decade. Medicare spending would be held to GDP plus 0.5 percent, another approximately $300 billion in cuts. About $50 billion would come from eliminating unnecessary errors and hospital re-admissions. The rest was unexplained.Continue reading…

Unlucky Student

• 28

By KIMBERLY SEELYE

Last
 July,
 I
 found
 myself
 needing
 to
 visit
 a
 doctor
 for
 an
 urgent
 medical
 issue.
 My
 period
 had
 started
 in
 April
 and
 never
 stopped.
 It
 was
 light,
 so
 it
 wasn’t
 too
 much
 of
 an
 annoyance, 
but 
after 
three 
months 
I 
figured
 I
 needed 
professional 
help.

I
 had
 started
 graduate
 school
 in
 Michigan
 the
 year
 before
 and
 was
 back
 home
 in
 California
 for
 the
 summer.
 I
 wasn’t
 sure
 if
 the
 new
 insurance
 that
 I
 paid
 over
 $2,000
 per
 year
 for
 through
 the
 school
 would
 cover
 a
 doctor’s
 visit
 in
 a
 different
 state.
 I
 called
 the
 insurance
 company
 to
 check
 and
 they
 said
 they
 cover
 any
 doctor
 in
 the
 country.
 Happy
 to
 hear
 this, 
I 
called 
and 
made 
an 
appointment 
with 
the
 doctor 
I 
had
 been
 seeing 
for 
years.

Though
 my
 insurance
 had
 changed,
 my
 doctor’s
 appointment
 was
 the
 same
 as
 always,
 I
 just
 had
 a
 slightly
 higher
 co‐pay.
 I
 had
 a
 routine
 check‐up
 and
 the
 doctor
 ordered
 some 
blood
 tests 
to 
help 
diagnose 
my 
problem.
Within
 a
 few 
weeks,
the 
doctors 
figured 
out
 what
 was
 wrong
 and
 cured
 it.
 I
 returned
 to
 school
 in
 September
 happy
 and
 healthy.
 As
 far
 as 
I 
knew, 
my
 business 
with 
the 
doctor 
was 
finished.Continue reading…

Why Medicare Isn’t the Problem, It’s the Solution

• 200

By ROBERT REICH

I hope when he tells America how he aims to tame future budget deficits the President doesn’t accept conventional Wasington wisdom that the biggest problem in the federal budget is Medicare (and its poor cousin Medicaid).

Medicare isn’t the problem. It’s the solution.

The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

Continue reading…

A Case for Self Insuring Small Business

• 12

By MICHAEL TURPIN

Image via Wikipedia

During the course of 2009, an alarming trend line was broken. For the first time ever, more employers under 50 employees were not offering medical insurance to employees than those who continued to provide employer sponsored healthcare.

Unfortunately, achieving affordability is often a zero sum game and the current system often fails the weakest and most disenfranchised of its stakeholders.  While the burden of spiraling healthcare costs has effected virtually every employer, the weight of cost increases has been borne disproportionately by individuals and smaller employers (1-250 employees).  The opaque science of risk pooling, cost shifting and risk selection has as much to do with unacceptable increases as  poor consumerism, over treatment and inefficiency. As we march toward insurance exchanges and pooled purchasing for employers in 2014, we will continue to witness a game of pass the parcel leaving smaller employers holding the bag.

Healthcare cost shifting begins at the highest levels with federal and state governments routinely cost shifting to the private sector by serially under-reimbursing specialists and hospitals for the cost of their services. Doctors and hospitals, in turn, shift cost to the private sector charging higher fees for services to make up for underfunded Medicare and Medicaid rates. Health systems have consolidated along with multi-specialty medical groups gaining critical bargaining power that results in higher contracted rate increases negotiated with insurers.  Insurers, attempting to keep rising medical trends down, must exact concessions from less well leveraged providers such as community based hospitals and primary care doctors. The result is an Darwinian landscape where only the large survive.

As core medical trends hover between 7%-8%, insurer insured book of business medical trends have climbed into and remain in double digits. Larger employers remain more immune from peanut butter spread book of business trends due to their own unique claim credibility and in many instances, due to the simple act of self insurance.  Lack of size and actuarial credibility leaves smaller employers and individuals to be underwritten within pools of risk — pools that continue to pass on the rising costs of care at an alarming rate.  To add insult to injury, as states and the Federal government become increasingly larger medical payers (already representing over 50% of all medical spend in the US), cost shifting will only accelerate in the private sector resulting in higher medical trends impacting smaller employer pools.Continue reading…

The Cost of Apples

• 16

By SAMUEL YANG

Up until last May, my experience of medical costs was limited to the $100 per month premium I contributed towards my employer-sponsored insurance and the nominal co-pays associated with well-child checkups and generic prescriptions. There was never any hesitation in seeing a doctor or filling a prescription. That all changed when went I back to school.

I blindly signed up for the school-recommended family insurance and naïvely assumed myself, my wife, and my two young children would receive whatever health care we needed at a relatively small co-pay. The upfront premium of $10,000 was high, but I believed that this would cover whatever life threw at us. However, two experiences woke me up from my ignorance: my wife’s endoscopy and a visit to the pediatrician.

In July, my wife was sent by her doctor to get an endoscopy to determine the cause of her stomach pain. In the weeks following her procedure, we started receiving statements from our insurance company.

The statements declared that we were responsible for the full amount. We received the following explanation from our insurance company, “We don’t cover preexisting conditions.”

As we argued with the insurance company, the hospital bills started trickling in: $1200 from the outpatient center, $200 from our family physician, $400 for the anesthesiologist and $200 from the lab. We received six bills demanding $2600 for one procedure. As I examined the bills I was shocked by the redundancy—why is the cost for the anesthesiologist not included in the outpatient center bill? Why do I need to pay my family physician twice (the initial visit and the follow-up) for a procedure she ordered us to do? Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system. It seemed as if everyone in that hospital wanted to include something for our visit. Continue reading…

The Ultimate Sacrifice

• 29

By JOHN MAA, MD

An estimated 60% of American bankruptcies result from overwhelming medical costs. My uncle’s tale illuminates the dual tragedy of suffering catastrophic illness and being uninsured.

The 2008 recession claimed my uncle’s job, health benefits, and assets, except for a small inheritance. By 2009 he found work (but not health coverage) as a consultant.

One day he noticed that his eyes were yellow. He emailed a photograph, and I immediately recognized jaundice. I calmed him by suggesting benign causes such as hepatitis, gallstones, or liver cirrhosis. But I secretly dreaded a liver or pancreas cancer, given his recent weight loss and itching.

Laboratory and x‐ray tests, which he charged to his credit card, all suggested cancer. His doctor in New Jersey indicated urgent surgery was necessary. An appointment was unavailable for weeks at the county hospital, and private surgeons wouldn’t see him without a cash deposit. Time was ticking. Cure was already unlikely, and delays were allowing the tumor to grow. He decided to travel to the West Coast to expedite surgery.

My uncle arrived around midnight, glowing yellow; he had worn sunglasses to avoid frightening other airline passengers.Continue reading…

Fixing America’s Health Care Reimbursement System

• 14

By BRIAN KLEPPER, PHD

A tempest is brewing in physician circles over how doctors are paid. But calming it will require more than just the action of physicians. It will demand the attention and influence of businesses and patient advocates who, outside the health industrial complex, bear the brunt of the nation’s skyrocketing health care costs.

Much responsibility for America’s inequitable health care payment system and its cost crisis is embedded in the informal but symbiotic relationship between the Centers for Medicare and Medicaid Services and the American Medical Association’s Relative Value System Update Committee — also known as the RUC. For two decades, the RUC, a specialist-dominated panel, has encouraged national health care reimbursement policy that financially undervalues the challenges associated with primary care’s management of complicated patients, while favoring often unnecessarily complex, costly and excessive medical services. For its part, CMS has provided mostly rubber-stamp acceptance of the RUC’s recommendations. If America’s primary care societies noisily left the RUC, they would de-legitimize the panel’s role in driving the American health system’s immense waste and pave the way for a more fair and enlightened approach to reimbursement.

As it is, though, unnecessary health care costs are sucking the life out of the American economy. Over the past 11 years, health care premium inflation has risen nearly four times as fast as the rest of the economy. Health care costs nearly double those in other developed nations have put U.S. corporations at a severe competitive disadvantage in the global marketplace.Continue reading…

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