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eridani's Journal
eridani's Journal
October 13, 2014

Why Americans Are Drowning in Medical Debt


After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn't quite prepared for a $117,000 bill from an “assistant surgeon"—an out-of-network doctor that the hospital tacked on at the last minute.

It's practices like these that contribute to Americans' widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.
California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.

Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.

Americans pay three times more for medical debt than they do for bank and credit-card debt combined, the report found. Nearly a fifth of us will hear from medical-debt collectors this year, and they'll gather $21 billion from us, collectively.

October 13, 2014

The single-payer model: a foundation for professionalism


Dr. Brian Day, founder of Vancouver’s Cambie Surgery Centre, and other commercial specialty clinics are suing B.C. to allow private funding of medical care. This would facilitate expansion of private diagnostic and surgical procedures and undermine the single-payer model. The integrity of Canada’s entire health system could be at risk.

Advocates for commercialized healthcare funding, now prohibited by the Canada Health Act, often promote a “hybrid model.” In 2012, Dr. Day wrote in a newspaper column that European countries successfully combine universal care with a public-private system, but he failed to address the different contexts of North America and Europe.

European insurance and healthcare sectors are highly regulated. For instance, in France, even supplemental health-insurance funds are not-for-profit, unlike in Canada, where supplemental insurance, now limited to pharmaceuticals, dental, vision and complementary care, is offered by for-profit corporations.

Canada has extensive commercial ties to the United States, not to Europe, and were the “hybrid” advocates to prevail, U.S. insurers could invoke NAFTA to gain access to an expanding Canadian health-insurance market.

U.S. insurance companies are unlikely to submit to a European-style model in Canada, where regulation in most sectors is already more American than European because of harmonization under NAFTA.

Furthermore, these insurance companies have the resources to get what they want. In 2013 the leading U.S. health insurers reported $12.7 billion in profit on $313.7 billion in revenue (U.S. dollars). According to OpenSecrets.org, that same year health insurers spent $154 million on lobbying U.S. lawmakers.

Using their financial clout, they could quickly change the landscape in Canadian healthcare funding for not only procedural medicine but primary care, mental-health care and other specialties.
September 29, 2014

Costs Can Go Up Fast When E.R. Is in Network but the Doctors Are Not


Patients have no choice about which physician they see when they go to an emergency room, even if they have the presence of mind to visit a hospital that is in their insurance network. In the piles of forms that patients sign in those chaotic first moments is often an acknowledgment that they understand some providers may be out of network.

But even the most basic visits with emergency room physicians and other doctors called in to consult are increasingly leaving patients with hefty bills: More and more, doctors who work in emergency rooms are private contractors who are out of network or do not accept any insurance plans.

When legislators in Texas demanded some data from insurers last year, they learned that up to half of the hospitals that participated with UnitedHealthcare, Humana and Blue Cross-Blue Shield — Texas’s three biggest insurers — had no in-network emergency room doctors. Out-of-network payments to emergency room physicians accounted for 40 to 70 percent of the money spent on emergency care at in-network hospitals, researchers with the Center for Public Policy Priorities in Austin found.

“It’s very common and there’s little consumers can do to prevent it and protect themselves — it’s a roll of the dice,” said Stacey Pogue, a senior policy analyst with the nonpartisan center and an author of the study

Center for Public Policy Priorities study of out-of-network emergency room doctors:

KFF on state balance billing restrictions:

Comment by Don McCanne of PNHP: A consequence of allowing health insurers to contract selectively with health care professionals (physicians) and institutions (hospitals) is that patients not only are financially penalized should they elect to obtain their care outside of the contracted networks, they may unavoidably face such penalties when they have sought care only within networks.

One of the more egregious examples is when they obtain emergency services at a contracted emergency room only to find out after the fact that the physicians staffing the emergency room are not in the network. The patient then is billed not only for deductibles and copayments applied to allowed charges, but also for the balance of the charges in excess of the allowed charges - a process known as balance billing.

“The Affordable Care Act provides some protections for enrollees in need of emergency services, but does not prohibit balance billing by out-of-network providers” (KFF). For further information on state restrictions on balance billing, use the KFF link above.

When something is not right, as it clearly isn’t here, it is important to define the problem before crafting a solution. State regulators and legislators are defining this as a problem of balance billing “abuse” and are looking at mechanisms to prohibit balance billing. But is that really the problem?

Insurers, with the complicity of state and federal legislators, have established limited networks of providers to leverage more favorable payment rates for health care services. But these rates neglect the health care delivery system outside of the networks. Now states are considering making out-of-network physicians comply with contracts to which they never agreed. That is as unreasonable as making insurers pay out-of-network fees in full simply because the insurers did not have a contract with the physicians. Do you have a contract or not? You can’t have it both ways.

The problem here needs to be redefined. Balance billing is not the primary defect. It is the nature of our complex, dysfunctional financing infrastructure that leads to a multitude of perverse consequences such as balance billing - an infrastructure that was perpetuated and expanded by the Affordable Care Act. We need to rebuild the infrastructure. We need a single payer national health program. Balance billing would not exist under such a system.

September 26, 2014

British Economist magazine on the Affordable Care Act


It is now nearly a year since the roll-out of Obamacare.

Ironically the “socialist” Mr Obama did not do the one thing that might have cut taxpayers’ costs dramatically: introduce a European “single payer” health-care system. Instead he tried to tweak America’s system in two ways - to expand coverage and to reduce costs.

The results are mixed. Practically every competent health-industry lobbyist managed to insert a line protecting the services his paymasters provide - so Obamacare is too costly and too complicated.

So what would make American health care better now? Since its failings lie more within the system than with the president’s attempt to reform it, health reformers should concentrate on three areas that could make its flawed market work better: directing handouts towards the poor rather than the affluent, nudging individuals to take charge of their own health care, and making sure that prices are transparent.

If America wants to stick to the idea that it has a health-care market, then it should focus on trying to make it more like a market - with prices, competitors and some form of choice.

Comment by Don McCanne of PNHP: After telling us that it is ironic that President Obama did not introduce a single payer system, The Economist tells us that we should use prices, competitors and choice if we want to make our health care system more like a market. That seems odd advice since their system is not only single payer, it is socialized medicine - a national health service.

The Economist is not naive. They certainly know of the work of Nobel laureate Kenneth Arrow showing us that markets do not work in health care. Maybe their recommendation for market reform of U.S. health care stems from their reputation as excelling in understated wit, but what the market approach has done to drive up costs and impair the functioning of our health care delivery system isn’t really very funny.

Let’s just take them at their word that a single payer system would have been a much more effective choice. And we can still make that choice.
September 23, 2014

MBAs vs MDs


On Health Care Renewal, we emphasize problems in leadership and governance in large health care organizations, and how they affect health care professionals' attempts to carry out their mission, and ultimately how they affect patients' and the public's health. Large health care organizations are increasingly led by people trained in business, not health care professionals, thus generic managers. The stewards of these organizations, the members of their boards of directors or boards of trustees, are also increasingly current or former managers without direct health care experience. Yet all too often, health care leadership is ill-informed, incompetent, unsympathetic or hostile to health care professionals' values, self-interested, conflicted, dishonest, or even corrupt.

Recently, in an effort to "bridge the gap" between physicians and MBAs, a new article in Becker's Hospital Review by Todd Kislak discussed differences in the thinking and values among business trained health care managers and physicians. The author, an MBA, listed nine issues on which MDs and MBAs have different views. I have summarized below what appear to me to be the main points, somewhat reorganized from how he did it. Whether he meant to or not, Mr Kislak showed why physicians may have reason not to trust their new generic managers.

1. Making Widgets vs Treating Patients Mr Kislak wrote that MBAs see health care in terms of orderly, uniform and standardized processes, while physicians see it in terms of the complexity and variability of patients, the ambiguity of diagnosis, and the unpredictability of outcomes.

2. Scalability. As a rule, MBAs tend to seek solutions to problems in a way that they perceive to be scalable and replicable, trained in the belief that the capacity to perform repetitively and consistently leads to better efficiency and quality. One-off situations are by definition outliers, and as such their importance tends to be downplayed.
September 22, 2014

After Surgery, Surprise $117,000 Medical Bill From Doctor He Didnít Know


Before his three-hour neck surgery for herniated disks in December, Peter Drier, 37, signed a pile of consent forms. A bank technology manager who had researched his insurance coverage, Mr. Drier was prepared when the bills started arriving: $56,000 from Lenox Hill Hospital in Manhattan, $4,300 from the anesthesiologist and even $133,000 from his orthopedist, who he knew would accept a fraction of that fee.

He was blindsided, though, by a bill of about $117,000 from an “assistant surgeon,” a Queens-based neurosurgeon whom Mr. Drier did not recall meeting.

“I thought I understood the risks,” Mr. Drier, who lives in New York City, said later. “But this was just so wrong — I had no choice and no negotiating power.”

In operating rooms and on hospital wards across the country, physicians and other health providers typically help one another in patient care. But in an increasingly common practice that some medical experts call drive-by doctoring, assistants, consultants and other hospital employees are charging patients or their insurers hefty fees. They may be called in when the need for them is questionable. And patients usually do not realize they have been involved or are charging until the bill arrives.

The practice increases revenue for physicians and other health care workers at a time when insurers are cutting down reimbursement for many services. The surprise charges can be especially significant because, as in Mr. Drier’s case, they may involve out-of-network providers who bill 20 to 40 times the usual local rates and often collect the full amount, or a substantial portion.
September 15, 2014

No cannabis in Seattle, but there is in Bellingham

The only Seattle cannabis store had every one of its varieties marked (out of stock) the last time I checked. This weekend I was in Bellingham for the state Democratic Party quarterly meeting, and took advantage of their pot store. They had plenty of varieties and also edibles. I didn't see any high CBD/low THC varieties, though. Those interested in serious pain relief will be dependent on medical marijuana clinics for the forseeable future as far as I can tell.

For myself I got an Indica-dominant strain with the highest gamma-cannabinoid content I could find--this if for my insomnia (not considered a condition rating a medical marijuana card in WA, unfortunately--though it is in CA).

For my husband I got a 95% Sativa-dominant strain for computer programming creativity. Don't know for sure if he really is more creative on the stuff, but he thinks he is.

I think it's time for another serious try at a state bank--the shops deal in cash only. This puts them at risk for theft, IMO. Not only that, but I would have gotten larger amounts if I had had more cash--so many people these days carry little cash and depend on credit or debit cards, and stores would sell more if a bank would accept credit. The state's tax revenue would be considerably higher.

People in Seattle are probably still relying on the underground economy. I've heard from the grapevine that prices have dropped a lot since legalization, and are certainly lower without all the taxes. But if street dealers even know whether their product is Indica or Sativa dominant (let alone more detailed information), I'd be seriously surprised.

I'd rather get mine from state-approved stores for two reasons. I approve of the boost to the state's revenues from marijuana taxation. Also, I'm a geek looking for marijuana with very specific components, and I like seeing a solid chemical analysis with as many components of interest quantified as possible. Date of harvesting is listed, and the material must be mold-free.
September 4, 2014

Implementing Health Reform: Tax Form Instructions


On August 28, 2014, the Internal Revenue Service re-released the draft forms that will be used by employer, insurers, and exchanges for reporting Affordable Care Act tax information to individuals and to the IRS for 2014 and 2015, as well as the instructions for completing those forms. The IRS also released in the Federal Register requests for public comments on three of those forms – the 1094-B, the 1094-C, and the 1095-C – under the Paperwork Reduction Act. This post reports on these forms and instructions and on a guidance released by the Centers for Medicare and Medicaid Services.

The tax forms had been published earlier and are described in an earlier post. The instructions for the forms, however, had not been available and had been eagerly awaited by employers, insurers, exchanges, and tax professionals. Forms 1094-C and 1095-C will be used by large employers with more than 50 full-time or full-time-equivalent employees to determine whether the employer is responsible for penalties under the employer shared responsibility requirements of the ACA. They will also be used to determine whether employees have received an affordable and adequate offer of coverage, rendering them ineligible for premium tax credits. Employers are required to provide each full-time employee with a form 1095-C and to file each of these together with a transmittal form 1095-B form with the IRS.

The instructions for the 1094-C and 1095-C are by far the most complex of the instructions released on August 28, filling 13 pages with dense, two column, print. Most of the complexity derives from the options for complying with the employer mandate and the transition exceptions to that mandate that the administration has created…

Comment by Don McCanne of PNHP: If you enjoy minutia, click on the links to the full blog post and the draft instructions and read away.

Although today’s message deals with only one minor provision of the Affordable Care Act - the instructions for tax forms used to report ACA tax information to individuals and to the IRS - the administrative detail required is mind-boggling. Extrapolate that to all aspects of ACA and it becomes obvious that, instead of gaining administrative simplicity, ACA greatly increased administrative complexity - on top of the most administratively complex health financing system in the world. What a waste!

Timothy Jost’s comment from yesterday’s message can be repeated again today: “We are doomed to continue to struggle with this complexity as long as we stubbornly cling to a private health insurance-based health care financing system.”

Single payer!!
September 4, 2014

The existence of private insurance strongly correlates with higher health care costs


Private insurance, however, is an expensive way to fund health care. When we look at the relationship between private insurance and a nation’s total health-care costs, we find a strong positive relationship: the more a country relies on private insurance the more it pays for health care, without any extra benefit.

It’s not just the bureaucratic cost of private insurance; it’s also the distortions it introduces, for when there is a private insurer in the market, able to pay premium prices for priority access to care, prices throughout the health system rise, both for the public insurer and for those who pay for health care from their own pockets.

The graph below shows the relationship between countries’ health-care costs (as a proportion of GDP) and reliance on private insurance. These are all countries with only minor differences in their health outcomes. (For the statisticians, R Squared = 0.66.)

At one end of the scale, the United States stands out. At the other end are three countries – Sweden, Norway and Iceland, where private insurance is either absent or plays a minuscule role in funding health care. And these countries contain their total health-care costs (as does Australia for now), to around 9% of GDP. This is in spite of the fact that Sweden, the largest of these countries, has a significantly older population than Australia.
August 23, 2014

Insurance companies go for profitable tests, but not for more doctor time spent with patients

Cardiologist Speaks From The Heart About America's Medical System


As a young doctor working at a teaching hospital, Sandeep Jauhar was having trouble making ends meet. So, like other academic physicians, he took a job moonlighting at a private practice, the offices of a cardiologist. He noticed that the offices were quick to order expensive tests for their patients — even when they seemed unnecessary.It was "made very clear from the beginning" that seeing patients alone was not financially rewarding for the business, he says."Spending 20-30 minutes with a patient might be reimbursed $80, $90, but sending the patient for a nuclear stress test was much more profitable," Jauhar tells Fresh Air's Terry Gross. "A nuclear stress test, at the time when I started working, was reimbursed roughly $800 to $900."

Jauhar was supervising the tests that had been ordered by a physician — and some physician assistants."So even though I wasn't ordering the tests, I was in the office while these tests were being performed — and I felt really dirty about it," Jauhar says.Jauhar's new memoir, Doctored: The Disillusionment of an American Physician, is about how doctors are growing increasingly discontent with their profession. And they're facing more pressures: As the number of patients they're expected to see increases, so does the amount of paperwork. While some doctors who perform a lot of procedures may be paid too much, he writes, many doctors, such as primary care physicians, aren't paid enough.And, he adds, "the growing discontent has serious consequences for patients.

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Gender: Female
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About eridani

Major policy wonk interests: health care, Social Security/Medicare/Medicaid, election integrity
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