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- Open Thread – 30 March 2023
- Why We Fight* – TTG
- Mick Ryan on the coming Ukrainian offensive – TTG
- “It’s 7 a.m. in Tel Aviv after a night of protests. Here’s what you need to know about Israel’s political crisis” – TTG
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- ISW take on the Xi – Putin meeting – TTG
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The way we do prehospital care has GOT to be fixed.
Repealing that ridiculous dictat from Reagan that everyone who shows up to an ER must be seen is a good start.
I heard this morning that the GOP wants to privatize the VA. How does Trump view this?
I used to work in a VA and believe this is a mistake. We gave superb care.
Health Care is currently in the same place automobile repair was in 1960. There are no rates posted. There is no estimate of costs ahead of time. There are no recordds kept of success rates. Thus, providers may charge whatever they choose, after the fact. There is no transparent competition.
Binary buyer/seller markets are balanced and therefore stable.
However, the patient/doctor/insurance market is a trinary system. Everyone is spending OPM (Other People’s Money). (“Moral Hazard”.) Doctors hide prices and charge whatever they feel like after the fact, screwing the patient. Patients ask for expensive treatments they don’t need and don’t pay for, screwing the insurance companies. Some patients also gratuitously sue doctors, causing rates to soar for everyone else. And then insurance companies hike their rates, screwing the patients and the doctors. Everyone is screwing someone else.
A trinary system is largely unstable. When people expect to get something for nothing, spending OPM, the forces are not balanced. They are amplified. The force arrows go round and round in a circle, instead of pointing at each other. There is no reason for prices to drop. So they keep on rising, without limit. This is what we have been seeing in the health care industry.
This is systemic. It follows from the basic design.
So there will be no changes until the system changes.
Force balance depends upon perception, and not actuality. When people do not perceive adverse market consequences, it doesn’t matter if they’re there or not.
The man to see on all this is Michael Porter of Harvard, who has thought much on this basic theory.
I agree with the “suberb care.” I don’t use VA medical facilities but a friend’s wife is a VA doctor and if she works there it must be pretty good. My only suggestion about VA medical care is that a “credit card” feature that lets veterans use civilian facilities when VA is not available is a good idea. pl
Tyler, Abuse of the ER has long been a costly issue. We run analysis trending inappropriate ER visits. These are visits that should have been to a primary care physician or a clinic.
It seems to be an issue very resisted to amelioration. All sorts of solutions have been tried with marginal success at best. ER abuse is largely cultural, is largely urban and is a feature of low income, low education populations.
For the employed/insured, the most effective solution has been to simply raise the copay/deductible associated with ER visits to a level that is painful and influences a reasonable microeconomic decision. If it turns out the ER visit was for a medically appropriate reason, the patient’s financial responsibility (copay/deductible) can be reduced.
However, the unemployed patient on Medicaid or ACA is not impacted and their behavior continues.
We’re talking about millions of unnecessary ER visits each year at an avg cost of $1,200 versus $80 – $100 for an office visit or maybe $120 for an afterhours clinic.
In a strange sort of way, ObamaCare parallels that of ZIRP/QE. ZIRP/QE has made the financial economy very wealthy with very little of that wealth making its way down to the real economy. Similarly, ObamaCare has made the back-office economy very wealth with very little of that wealth making its way down to the front-line economy. Even though the financial economy isn’t exactly like the back-office economy and the real economy isn’t exactly like the front-line economy, there are enough parallels between the two to make the case that the ObamaCare is profoundly bad for the real economy, the place where the front-line economy is found.
Perhaps if the critics of ObamaCare would focus their criticism on the fact that ObamaCare enriches the back-office economy at the expense to the front-line economy, they would make better progress towards discrediting ObamaCare. After all, it’s not very hard to make the case that the back-office bureaucrats have little to nothing to do with delivering patient care, much less improving patient care, and the more money is thrown at these bureaucrats, the less money there is to delivery care on the front lines, causing the quality of care to erode even further.
Cee and pl,
I have to agree that the VA system is pretty damned good. My experience with the evaluation system couldn’t have gone better. What helped was the Virginia Veterans Affairs Office. They assisted with the paperwork and advocated for me to get everything done in a timely fashion. The VA kept me informed better than anything I’ve experienced. All evaluations in VA hospitals and contract facilities were on par or better than in any civilian facility. Not everybody has this experience, but I ended up with 70% disability while doing my best to prove that I was still in damned good shape.
I haven’t used a VA hospital or clinic yet, but my next door neighbor has gotten excellent care. He’s a retired Sergeant Major and has received several life saving treatments over the years. His wife was medically retired after the first Gulf War and has also gotten great care. That’s what they tell me. One of these years, I’ll go get a physical at the Fredericksburg clinic and let you know how that goes.
I like the idea of a “credit card” feature that lets veterans use civilian facilities when VA is not available. The reality is that it’s also tough getting an appointment with civilian doctors. A month long waiting list is not unusual.
This is Trump’s plan for the VA. It’s not bad at all, but it will be expensive. He does not call for privatizing the system.
I’d like a single payer healthcare insurance system. Medicare for all? The idea behind the PPACA (Obamacare is a misnomer.), was to have that single payer system. But it didn’t end up that way. My question is: how do we go from where we are, to that? Healthcare employs very many people, and earns numerous businesses profits. If we were to switch to a single payer government system, what would happen to all those jobs, and profits? I don’t see how it can happen.
I’m right there with you. I’ve seen so much nonsense from people calling for knee pain, claiming 10 out of 10 back pain with a BP of 108/66 and a pulse of 75, someone gets into an argument with her boyfriend and says she “can’t breath” in between screaming at him.
Its absolutely ridiculous, but people think if they go to the ER via rescue they’re going to get their faster and get pretty upset when they get triaged to the waiting room.
That is what Trump wants to do.
Personally, I find that VA care is a matter of where you’re at.
Reimbursement rates that providers can charge are negotiated by insurance companies and put in written contracts. The rates are based on massive amounts of analysis involving everything from trends in medical technology development, to demographics, to network issues, to inflationary forces, to (especially) prior years utilization and cost trends. There is nothing arbitrary about it.
There is some truth to you statement re; OPM – at the point of purchase. However, the bigger issue is the principal/agent dilemma. The provider (agent) is the one with the knowledge and is incentivized to tell the patient (principal) that what is needed is more expensive treatment of the modality that is easiest for the provider to provide. Resolving this dilemma is one of the services the insurance companies try to resolve by using their huge databases to understand what treatment is appropriate and what it should cost and denying that which is inappropriate and/or not cost effective. Of course the insurance companies have an incentive in the opposite direction of the providers, but we hope that somewhere in the middle is where things sift out.
Technology is biggest driver of cost. The ability to increase treatment on both the intensive and extensive margins means that more people are receiving treatment for a wider range of conditions. However, the bang for buck just isn’t there much of the time. New technology often comes in with a huge cost increase, but only a marginal benefit increase. The socialized systems are much better at simply issuing a government directive that either the marginal cost = the marginal benefit, or the new thing won’t be approved. In the US politics, lawyers and insatiable consumers spending OPM interfere with insurance companies’ ability to limit benefits to cost effective treatments (e.g. the poor widow and mother of six is dying because the evil insurance company won’t approve what her doctor says is a miracle cure…call the press! call a lawyer! call Michael Moore!).
Insurance companies provide a lot of value; managing members’care, organizing and contracting provider networks to ensure full access for members, detecting fraud and abuse, negotiating reimbursements at a % of what the providers bill and attempting to only approve appropriate and cost effective care. The savings incurred by these and other activities to the members far outweighs the % net profit that the companies keep.
Even so, despite all those efforts, cost inexorably increase because of ceaseless introduction of new technologies. If cost is to be curbed, some hard choices will have to be made concerning what treatments will be approved and for whom. Not everyone can get everything. The nation isn’t ready to have that conversation and continues to be distracted by magical shiny things.
I repeat, socialized govt run single payer, private enterprise…doesn’t matter. Access and utilization must be rationed. Otherwise, any savings realized will be a one off and the trend will resume itself toward increased % of GDP spent on healthcare.
Thank you. If we stop starting more wars and building weapons that nobody wants there should be enough cash to do this.
Cynthia, I may be missing something, but from my office (in insurance) I don’t see anyone making money off the ACA. Quite the opposite, actually. The government is printing money to keep the carcass of the ACA from totally rotting.
Insurance companies are losing money on the ACA even with the govt reimbursements for reinsurance and risk adjustment. Providers are trying their best to not accept the members due to low reimbursement rates, low income/low information patients that physician can’t stand and getting stuck with bills (insurance gets stuck for the first month or so when a member doesn’t pay the premium, but incurs medical claims, per ACA rules – after that, the providers suck up the loss and there’s a lot of that kind of behavior from ACA applicants).
The only people benefitting are the insured people taking advantage of the no pre-existing condition exclusion rule and the premium subsidies. There is abuse here too. Members sign up when they know they have expensive treatment coming, pay the premium for a month or two or three and, when the expensive treatment is complete, they drop out. That is not how insurance works and we all lose because premiums have to go up for everyone to cover that kind of abuse.
There are several reasons why ERs are being overused, Tyler. Profit motive is the number one reason. Insurers reimburse ER visits at a much higher rate than they do primary care visits. Which explains why hospitals are expanded their ER services to include freestanding ERs. In the past three years, for instance, the hospitals in my town alone have build three freestanding ERs.
Insurers can put a stop to this very expensive way to deliver care by simply cutting reimbursement for ER visits that are obviously not an emergency — things like a sore throat or a bellyache. But they have yet to do that. The only thing they have done to discourage people from using the ER as a primary care clinic is up the deductible for ER visits. I have private health insurance through my employer and my deductible for ER visits has increased from $50 to $150, while my deductible for a primary care visit has remained the same at $20. But people with a so-called ” Cadillac plan” still have a very low deductible for ER visits, and people on Medicaid or Medicare pay next to nothing to be seen in the ER. Neither of them have the incentive to stay out of the ER. And I don’t see that changing anytime soon. People with ” Cadillac plans” and people on Medicaid and Medicare are are too politically connected to see their ER deductibles increases to, say, $150.
But it doesn’t do much good to cut ER services when there are not enough primary care physicians to pick up the slack. Then again, even if we had an adequate supply of primary physicians, many of them won’t see patients after hours, holidays and weekends. What attracts doctors to go into primary care is not the money, it’s the hours. If that “perk” is taken away from them, they will demand more pay.
Which leads me back to what I regard as the best way to solve the ER overuse problem. It is not to reduce their use, but to reduce their costs. And the best way to do that is for insurers to reduce reimbursement for ER visits that are clearly not an emergency.
Agreed. My husband is a Vietnam veteran and he would like the same rather than paying out of pocket when he is treated elsewhere because of the wait time to be seen.
The idea behind PPACAbamacare was never to have a single payer system. The idea behind PPACAbamacare was to short-circuit the drive towards a single payer system and to preVENT a single payer system from EVER emerging.
Obamacare was designed, right from the start, as a bailout program for Big Insura, which saw itself losing money on the shrinking value of all the toxic assets in its investment portfolios.
There was an argument a few years ago when the VA was in the hotseat that the reason to vilify the VA was that the data that was coming from watching it work was making private health care look bad. The care results and administrative costs were a threat to private hospitals and insurance models.
Similar to the campaign to paint Social Security as needing saving by private groups. What is real and what is a determined and persistent marketing effort?
different clue – I think you have no clue.
Big insurance, as you call it, has in no way been bailed out by the ACA (as if it needed bailing out). We were highly suspicious of O care from its inception and our worse fears have been realized. It’s a big $ loser for us.
You really don’t know what you’re talking about. if you think you do, then I’d like to hear it.
I’m sure it will have to do with profits, which you probably oppose ideologically. Big insurance saves more money for members than it keeps in profits (see what I wrote up thread). If you prefer unfettered access with providers getting paid whatever they want, then prepare for 25% – 30% of DPP going to healthcare. If you think the government can do it better, then you have to explain why the govt handed management of Medicaid, Medicare and O-Care to the private payers. Answer; Govt cannot do it better in the US.
Eric, “Members sign up when they know they have expensive treatment coming, pay the premium for a month or two or three and, when the expensive treatment is complete, they drop out.” I’d like to see actual data that backs this up, and, have the opportunity to analyze the data as against more normative uses of health insurance (ACA.)
The fundamental dichotomy is between single payer, and, “too bad you’re irresponsibly poor.”
what ever happened to the simple idea of examining the ways the rest of the developed world does healthcare and picking out the best bits? Healthcare GDP numbers suggest your system is broken.
I am writing this from a hotel room. We are in town five days a week for Five weeks while my partner has radiotherapy each day as a precaution following her mastectomy. We could have been put up for free in an apartment but we like this place.
Australian Private health insurance costs us about 400 US$ per month. The out of pocket expenses so far for 16 weeks of chemotherapy, monthly MRI’s, bone scans, CT scans, ultrasounds, blood tests, oncologists visits plus five hours of surgery and three weeks in a private room in a private hospital is about $4000 – and all of it could have been provided for free under the public system with perhaps a few rougher edges and the same outcome, which is, fingers crossed, that she is going to be fine.
What p***** me off is that the big drug and medical companies are doing their level best to destroy our system and replace it with yours – where the healthcare industry takes many peoples last dollar as they take their last breath.
To put that another way bankruptcy through medical expenses is an obscenity in our view.
Whoa! This would be really expensive. How will he get this through Congress? They have been cutting funding for rural clinics, so having enough of those to make a difference in travel time for vets will be tough. Would probably make more sense to go back to funding the rural places we have now and make it easier for vets to use them.
I wrote this in response to a similar post you made, so will post as is. Will make sense if you remember what you wrote. This is written from the POV of an in the hospital doc, having worked ER, ICU and OR. Have run the business side for years.
Being one of those providers, I have a more nuanced view of HICs. I think you are correct about some of these and wrong, or exaggerating a bit on others. Or maybe our companies in PA just don’t do some of this.
1) In PA, the big companies don’t negotiate, they dictate, except for a few, very large, important academic places. Also, there is a nice curve well known to health care economists that shows when you have too many insurers, costs are high (they have little leverage with providers), but also that costs are higher when there are very few insurers, which is what we really have in most states. More power leads to higher prices for consumers at some point.
2) I agree with most of this.
3) Mostly BS. The constant credentialing costs me lots of money and time. I have a full time person devoted to just credentialing. What really happens is that the crappy docs get kicked out of the big hospitals. They go to the little ones in the sticks. You guys still pay them. Sometimes you pay them more than the good ones. (Have been on our credentials committee for a while.)
4) Not primary care, so maybe you do this. Don’t see any of this in the hospital.
5) It may save you money. It costs me money. I don’t know if it saves money for the consumer. More estimated physician billing and insurance related costs at about $80,000 per year. In Canada, they pay about $20,000 year of those costs. Comparing that to Medicare in the US, we find that we could save about $350 billion year. Maybe you save the consumer, I just don’t know, but I know it costs physicians a lot. A lot of time also. Medicare is straightforward and billing problems rare. All of our big problems have occurred with private insurers.
6) Mixed. At least on the inpatient side this is all driven by Medicare and physicians. The next private health insurance driven initiative I see will be the (almost) first. I agree you try to hold off on expensive, unproven procedures.
Overall, I don’t think you guys are leaches. You just provide health insurance at, usually, decent prices. I think some places try to do the things you describe, but most just sell the insurance and administer the plan, which is still a needed product. I think you guys are faced with real problems trying to cut costs. We all know, for example, that knee arthroscopies seldom do much good, but you guys pay for them. The public outcry if you didn’t would kill market share.
Finally, I think technology is a huge part of the problem. I agree with a lot of that. We docs are certainly culpable there. The profit motive runs strong for docs too. Also, you guys pay us a lot more so you give us incentives to use the new stuff. You are right about Obesity. Best paper I have seen on that just came out. Explodes the myth that obesity is protective. Anyway, providers (including hospitals and docs) are not blameless either, just responding on what i have seen over the years and, again, this may be a local and specialty related thing.
The VA when I trained, in the 80s, was pretty awful with just a few bright spots. Our SICU nurses were awesome. The MICU nurses didn’t know if a patient was dead unless you told them. Floor nurses were worse. Half the docs good and half awful. However, overall, the VA has undergone remarkable change. Its outcomes for the system as a whole rival the very good private hospitals. Individual places still have issues.
They got hit for wait times, but then up until recently few private facilities openly monitored wait times at all. There just wasn’t much public data on the topic. Once places like the Commonwealth group started looking at this they found that wait times in the US really aren’t as good as we had assumed.
What is missed, and will always be missed if you never worked at one or been a patient at one is the culture of a VA. Hard to describe. A lot of patients really like it.
Not really. It was accepted from the start that single payer was not politically acceptable. The decision was made to try to work within the current market system, i.e. the insurers. If you will recall, if old enough, it was the insurers sponsoring the ads that helped torpedo an attempt at health care reform by the Clintons. So this was designed to be inclusive with the insurers. They really modeled it on Romneycare and older GOP plans hoping to get support from across the aisle, and hoping to avoid heavily financed opposition from the insurers. Partly why we got such a mixed plan.
You guys should watch this if you want to talk about ERs.
We have to get a handle on our medical costs and you are 100% right, we should certainly be using the “best bits” of others’ systems when we redo ours.
Australia seems to be one of the few First World countries left that actually is run for the benefit of its own citizens.
Do not let that change.
When I think of all that we will have to do to “get back our country again” I wonder if we’ll be able to do it, in the end. Not that it will be me doing it, it will be done by Americans who are kids today or not even born. What a terrible thing we are thrusting on them — a mess we allowed to be made mostly without protest.
Anyway, good luck to the Australians on keeping the great things they’ve got.
It’s probably a matter of perspective, emphasis and regional/corporate difference. The company I work for is national (international actually). We probably contract with you.
I don’t exactly recall what I wrote. But with regards to 3), I believe I was referring to a pay for performance model as opposed to credentialing. The company I work for is a pioneer in analyzing risk models based on members’ claims and determining the quality of care that has been provided. This would include gaps in care for chronic conditions, follow-up visits, various outcomes measures. Providers are reimbursed at a base rate. Higher quality relative to peers leads to higher reimbursement. Extremely low quality would lead to discontinuation of contract.
There are many good physicians that try very hard to work with us to keep costs down (as you note). So I don’t mean to disparage the whole provider community. As you know, these trends take on a life of their own. It isn’t always by design.
Yes, we pay for the knee arthroscopies. We’ve tried not too and we pretty much had a provider revolt on our hands.
I did study a few years ago concerning spinal surgeries. I was appalled by the poor outcomes (and the cost). Many members were far worse off than prior to surgery. We could see that analgesic/opiate prescriptions continues for years afterwards, suggesting a failure to relieve symptoms. Worse, direct evidence came from failed laminectomy syndrome, failure to fuse, etc. I was proud of that work because, based on it, we implemented much tighter parameters for approval of auth requests. We even went to full medical chart reviews for a period of time to make sure the surgeons knew we meant it. $millions were saved, but more importantly, a lot of people were spared inappropriate surgeries that could have ruined their lives.
Walrus, There is much to be admired and emulated in the Australian system. I would vote for its direct implementation in the US.
The private market ideologues would object as would the social justice rabble rousers. The latter b/c rich people could still get supplemental insurance they can’t and thus they would proclaim that a genocidal war was being waged against them. Politician would respond by expanding public benefits to = the supplemental and we’d be back where we started, now with 30% of GDP going to healthcare.
Its kind of ridiculous to strawman this situation as “greedy hospitals and insurance companies!” when the law won’t let anyone get turned away from an ER.
People need to stop using the ER as their primary care. Full stop.
lmbo a socialist finally finds something to complain about the cost of.
you’re pretty dedicated to picking those nits, huh?
You are write about the misuse (not abuse) of E.R. The patients show up in ER because they can not find PCP (Primary Care Physicians) who take their insurance. This whole Obama Care Insurance issue, though better than before, leaves a HUGE gap where lots of low income people fall through. Using monetary disincentives to avoid healthcare contacts, prevents budget overruns but it leads to poor healthcare delivery. What would be even better than building these financial barriers, would be just to shoot all the excess population. I am sure you are not advocating that.
What is needed is a complete reorganization of healthcare.
As I had said before, one has to remove the “paper pushers” from the system. In us 30% (yes THIRTY procreant) of the healthcare budget is spent on administration. A country like The Netherlands does it with 3% and Belgium with 5% of the cost. They are 6-10 times (600% to 1000%) more efficient in their administration, if one wants to believe this. Or the other explanation is that (like the contractor business in the defense sector, of which I know nothing) by creating these huge side-streams, milking it becomes easier.
More US graduate needs to be educated and at a lower cost. There is no reason why educating a physician in US costs 200,000.00 $ for the graduate school and probably another 100k to 150k $ for undergraduate school. And all this while the same level of education (no Belgium (highest per capita number of patents), Switzerland, Sweden, The Netherlands, UK, … are not inferior to the US education) costs only a fraction in the latter countries: range of 30k to 70k $.
US graduates can not AFFORD to choose for primary care as they have to repay a hundred of thousands of dollars in loans with continuous accruement of interest.
On top of that, there is now a “security tax” that is being leveed on the healthcare system, hidden in the administration cost and another boondoggle for defense contractors. Yes you heard it correctly, the defense contractors are now milking the healthcare system.
I know for a fact that a certain company BAH is implementing ambient logics, via the electronic medical record and soon RFID and magnetic strips, to determine which healthcare worker is having “anomalous behavior”. For example whether a phlebotomist (drawer of blood) is somewhere that he should not be … in order to “assure patient safety”. This is being done, in light of prior attacks by healthcare workers in hospitals in UK (that were buried in mass media). Especially as large number of physicians in US are foreign medical graduates, in all likelihood, there was a predication that attacks, similar to the events in France and Belgium, would metastasis to the healthcare system as well.
This type of reactionary approach is antidemocratic, inefficient, backward and counterproductive. The solution for this problem is to have more AMERICAN physicians. I utilized the opportunity – that was created by misallocation of resources towards what the US government spends most of it’s money on – for professional and personal advancement. It feels awkward to deny these opportunities to other IMG’s but at the end of the day, avoiding a slippery slope towards fascism is more important.
If you want to pursue a “client centric” healthcare, you are on the right track. But please do not pretend that this type of healthcare is mirroring the mantra of Avicenna, Hippocrates, Meimonides… I was horrified to hear that in a certain healthcare system, they were talking about “Healthcare Customers”, in stead of patients. If anyone ever uses that word in Europe (that know), he/she will be ostracized without any hesitation.
I understand that there might be some hypocrisy in making a distinction between “Healthcare Customer” and patient. But at the end of the day, when you start from “healthcare customer” as a milestone, you will end up somewhere down the gutter.
In U.S., there is a multi-speedlane healthcare system. Good luck if you are destitute.
Best way to arrange for reduction of the ER visits is to arrange for PERSONAL primary care physicians for all Americans (if not all inhabitants of U.S., legal or illegal). This is not some leftist fantasy but rather cost effective.
Drug-seekers in U.S. end up in ER each time with “Chest Pain”. Believe you me, they know what to say and you know they are not completely truthful but at the end of the day, it is not appropriate to ignore the patient’s complaint. They are willing to get poked, irradiated, remain fasting and for some instances even undergo surgery to get their Dialaudid High. The solution is not barring these people from care but redirecting financing of jails to rehabilitation centers. Profit motive will always remain their but it is better to put it towards a benign than a indifferent, if not malign, goal. If and when you have a longstanding relationship with your personal physician, he is able to influence your healthcare choices much better.
Although the essence of your statement is correct, stating that “everyone should get a PCP, in order to avoid unnecessary ER visits”, is a more valid statement.
And one can stop paying for systems that are used to secure Lockheed Martin or Grumman, to protect hospitals and educate more caring local physicians with bonds to the same community they serve.
There are records kept: please check Propublica. But these records are skewed and easily manipulated.
(Obamacare is a misnomer.) The PPACA was not written by the President. It was written by Congress and the Healthcare industry. Healthcare insurance reform was brought about by the continuous increase in premiums and costs. Single payer was a non-starter, but I think it’s what many people want, and reformers had/have that in mind. ” The idea behind PPACA was to short-circuit the drive towards a single payer system and to prevent a single payer system from ever emerging.” You’re right, but the folks pushing for reform want single payer. It did get hijacked along the way. Now with the PPACA many more people are insured. Costs have increased, but less so than what would be the case without the legislation.
Cynthia, Actually, insurance cannot just cut ER reimbursement. Negotiations with providers often highlight the downside of the competitive free market model. Cut too deep into a provider’s pocket and they threaten to not take your members, which destroys the networks you need to maintain. They’ll contract with the other insurers who, being competitive against each other, will offer a little more reimbursement. A bidding war starts amongst the insurance companies and soon the reimbursement is right up there again.
So we try to work with copays/deductibles to incentive members properly (though we may tweak provider reimbursement to reflect inappropriate ER treatment at least a little).
Insurance companies cannot collude to set a low fixed rate for ER or any other services. The DOJ would be right on us.
This is an example of how a national, single payer system ^could^ have a positive effective – i.e. here’s what you get paid, take it or leave it – and one of the reasons the provider lobbies are so against single payer.
Stephen, I’m not making it up. I am in this data every day. We see the pattern very powerfully. Member enrolls, has an expensive (defined as $10k or more) claim or series of claims and then, when claims begin to taper off, they disenroll. Sometimes you see them re-enroll several months later, incur more expensive claims and then disenroll again. Repeat as needed.
And why wouldn’t they? That is the rational choice if they can get away with it, which they can because the ACA is structured exactly to permit it. But that means they are using a private business like a free ATM card.
Mark – “Costs have increased, but less so than what would be the case without the legislation.” How so? How have costs been held down by the ACA?
IMO, the most revolutionary aspect of the ACA in terms of impact is the removal of pre-existing conditions exclusions.
When the ACA was proposed I was skeptical that it would as advertised. A big feature was the notion that lots of young healthy people would sign up, incur very claims,and offset the expensive pre-existing condition members.
This made no sense to me. I usually work under the assumption that people are rational actors. You just need to know what it is they want/need. True, you can be dealing with an ideologue, and insane person or an incredibly selfless person, but generally, rational and self-interested is the best model. This is especially true when dealing with average Joes and Janes. We know what they need; to pay their bills and make ends meet. The cost of insurance, which they would be unlikely to utilize to any meaningful extent, far exceeds the cost of an occasional out of pocket doctor visit or the penalty at tax time for not having insurance. So why would they buy ACA? The ideologues in DC drank enough cool aid to think they would because it’s what everyone wants. The economics didn’t make sense to me. Fortunately the senior execs making the decision agreed with the rational actor model and as a result we went into the ACA market much more cautiously than some of our competitors. It turned out to be true. So the ACA brought in a bunch of very unhealthy people. The people who knew their medical claims would be in excess of their premium cost. So cost went up and premiums went up to cover the cost. The little start up companies selling ACA insurance have wiped out. That is the story.
It’s a bit more complicated than that, Tyler. People with “Cadillac” plans and people on Medicaid and Medicare don’t have any incentive to not use the ER as a primary care clinic. Then again, they don’t deserve all the blame for this. There are not enough primary care physicians to take care of their minor or even their chronic, yet minor healthcare problems — things like a diabetic with high blood sugar or or a CHF patient in fluid overlaid. This problem is made worse by the fact that most primary care physicians won’t work after hours, holidays and weekends. Why do you think ERs are the busiest after 5pm, and on holidays and weekends?
My solution to this, at least in the short term, is to reimburse minor ailments in the ER at a lower rate. All medical ailments, from a simple rash to a major heart attack, are already coded for reimbursement purposes. Just divide these ailments into minor, major, and all else in between, and reimburse them accordingly. This would significantly bring down ER costs without compromising care.
In the meantime, we can work towards increasing the number of primary care physicians. But that gonna take time — years, in fact — which is why I recommend developing a more affordable way to treat primary care problems in the ER, knowing that this is a just a temporary fix.
You can blame drug-seekers coming into the ER to get their “dilaudid high” on the healthcare bureaucrats in Washington. First they made the mistake of making pain the “fifth vital sign.” Then they came up with ridiculous idea to reimburse hospitals and other providers based on how well that treat pain. And no one can figure out why opioid addiction has reach epidemic proportions in the US! Connecting the dots could never be easier.
But nothing is gonna be done to correct this problem until the revolving door between the healthcare bureaucrats in Washington and the healthcare entrepreneurs in the private sector is shut down, for good. For instance, the company that came up with the patient satisfaction survey, which includes lots of pain management questions, lobbied to have their survey results tied to reimbursement. So doctors and nurses know that if they don’t give drug- seekers the “dilaudid high” that they want and crave, they are likely to get a poor patient satisfaction survey, and thus, in turn, get a lower reimbursement from private insurers, as well as from Medicaid and Medicare.
Nevertheless, I still will argue that bureaucratic bloat is the biggest yet least talk about problem facing healthcare. And it’s only gotten worse under ObamaCare. Prior to ObamaCare, there were roughly 10 back-office administrators for every doctor employed in the hospital. Now, thanks to ObamaCare, there are roughly 16 back-office administrators for every doctor employed in the hospital. This wouldn’t ‘t be such a problem if somehow all these employees in the back office did something to improve quality of care or reduce hospital readmissions. But that’s not the case. Far from it. Quality of care has only gone down and hospital readmissions have only gone up since the passage of ObamaCare.
No doubt that ObamaCare has become a jobs program for the US. Which is largely why the Obama Administration doesn’t want to do anything to reduce all the bureaucratic bloat plaguing healthcare. If they do, US employment numbers would drop, making the president’s record on employment look worse than it already is. But if the Obama Administration wants to be honest with the American people, they would openly admit that all of this bureaucratic bloat in healthcare is putting a drain on the rest of the economy.
Simply put, no nation can have a vibrant, sustainable economy and compete successfully in the global market when healthcare is parasitically consuming an ever-increasing share of its GDP. The Obama Administration needs to come clean on this, even if it means death to ObamaCare.
You are assuming that providers wield more power than insurers do. I don’t believe this is the case, Eric. There has been a lot more consolidation the insurance industry than in the hospital industry. No doubt that this has given insurers the upper-hand over providers. But even if private insurers don’t wield enough power to cut ER reimbursements, or any reimbursements for that matter, the federal government can.
It’s worth noting that nearly half of all healthcare dollars now come from the federal government. Maybe you’re unaware, but 1 in 3 Californians is now on Medicaid. When all 50 states get on board to expand Medicare, and with Hillary as president this is likely to happen, 1 in 3 Americans will be on Medicaid. This is why Medicaid has become a cash cow for insurers.
As you mentioned below, insurers are losing money on managing ObamaCare plans, which, BTW, is somewhat irrelevant given that the number of people on ObamaCare, especially the ones that are subsidy free, is a drop in the bucket compared to the number of people on Medicaid. However, they are making up for these losses, minor though they are, by making a lot of money on managing Medicaid plans. Economy of scale can work wonders on your profit margins.
Speaking of profit margins, hospitals are known for having razor thin profit margins. Much of this is due to their high labor costs. But as I mentioned before, an increasingly higher portion of their labor costs is due to bureaucratic bloat. If hospitals would cut the number of beancounters and paper-pushers in the back office, their profit margins would fatten up in no time, and without compromising care one bit. Then they will have enough padding to withstand ER reimbursement cuts.
Needless to say, though, hospitals can’t reduce bureaucratic bloat until we get healthcare reform that discourages bureaucratic bloat. But we can’t do that until we shut down the revolving door healthcare bureaucrats in Washington and healthcare bureaucrats in the hospital industry. Hopefully a Trump presidency can do that.
As an employer I dug deeply into this during the Obamacare debates. Having eighteen months helped a lot…ahem…but I did develop a “starter kit” for the the genuinely curious.
First recommendation: “Dirty Rotten Strategies”
It’s about problem solving in general but used the “mess” of our system as their primary example to differentiate between “messes” which require comprehensive solutions from “problems” which only require fixes. They even issued a youtube for the non-book readers. It is unwise to approach the topic without determining which we are dealing with.
Second:”Best Care Anywhere” by Longman
This is about the VA system and is an examination of healthcare efficiency. Can’t get far without addressing that too.
Third and last in the order should be IMO the PBS series “Sick Around The World”
A comparative study of our system with five others.
Designed to set the stage for a realization of the reason nobody else has a “VA”, among other things. Comprehensive coverage of all, whether the evil NHS of the UK, the socialistical Canadian, the private insurance based German, or the mish-mash of Singapore and Japan and France eliminates the need for separate facilities for vets.
This is perhaps not totally on topic, but have any noticeable religious entities expressed an opinion on how health care should or shouldn’t be handled these days? Any of the various varieties of Judaism, Christianity, Islam, Hinduism, Buddhism, etc.?
As I pointed out, the costs could be cut quite a bit if they simply used existing rural clinics and just made them more accessible to vets. Would have to get Congress to stop shutting them down. Helped set up the trauma system at a critical access hospital so I have some familiarity with the costs, issues and politics.
You are right about the glut of administrators and case managers and social workers and home health care liaisons… As I had mentioned before, 30% of the total US health care budget is used for unproductive administrative work.
Regarding pain: the CMS has realized that pain scoring is leading to abuse and has removed it from the reimbursement criteria.
In principal you are right. Insurance companies have much more power than most providers, especially the smaller group practices. The consolidation leads to lack of choice and not necessarily to better care, on the contrary.
You are also right about paper pushers being leaches of the system. The system would be massively more efficient, if they would eliminate those bureaucrats through a reconversion plan that allows the same people to be productive in actual bedside patient care. This will reduce, though not eliminate, the resistance of this “Paperologist Class”, by ensuring continuation of their income.
But realize that for the time being the individual hospitals will loose money, if they don’t have these leaches that will bring in the money. For example a “coding specialist” will make sure that you code Sepsis secondary to UTI as opposed to Urosepsis. Both mean the same in medicine however for the first one, you get 2 days (I think) of hospital stay reimbursed, while for the latter you will get exactly ZERO. There is no logic in that.
Also arranging for wage caps is important. There is no reason for a CEO to earn 3 million $ a year and pay himself another 15 million bonus in a “non-for profit” hospital. And I am talking about an actual example. His contribution to growth of the hospital and patient care is limited. For example, by introducing electronic medical records, typists could be eliminated. Now individual physician and allied health care workers do the work of those scribes. However the former are not getting extra pay while they save million for the non-profit health system, that mostly flows into the pocket of the board of directors.
This has nothing to do with Adam Smith’s efficiency of capitalism but rather resembles the post-USSR crony capitalism.
This is an old Thread, but very interesting.
Most hospitals and systems have found ways around EMTALA at least sufficient to ensure they are not swamped.
However, one problem is that PCP, whose practice model is based on 6-10 patient encounters/hour at a Level 3 RBRVS or higher can’t really take on many Medicaid patients and often don’t par with it.
So expanding Medicaid doesn’t really do that much to get people “Medical Homes.”
The ACA ‘Exchange” Plans (generally “Bronze Plans”) are high deductible plans generally built around narrow-network Medicaid Managed Care Plans with a high deductible and co-pays slapped on. And, of course, there is no provision for HSAs. It’s stupid plan-design . . . but most people opposed repealing this Shanda because they are sure the Trump Administration would come up wit something worse (if that is possible).
The ACA (and Medicaid) is not really built around Primary Care of getting people a “Medical Home.”
One solution (which seeems to be happening by default) is expanding the use of NPs and PAs (not interchangeable, of course) to delivery Primary Care.
“Clearly” is in the eye of the beholder.
ERs also have issues (with PPACA) of generating out of network charges when the Hospital is in-network but the Emergency Medical Group staffing the ED does not par with the Plan.
NYS now has a legislative fix in place.
Hence the rise of modalities like “Urge-centers.” Care in an ED still costs the Hospital more money to provide.
“Med-seeking”/Frequent Flyers” have been a big issue for at least 20 years and the Opioid Epidemic has not helped.
What you really need are price-points for care, as you have for other things.
The VA is a great system but it (like other government programs does not scale well. The problems in Arizona are driven by te census increasing faster than the budget.
Providers are consolidating. Payers are consolidating. Patients need to consolidate, also, under MEWAs as the Trump Administration has proposed.
“Reimbursement rates that providers can charge are negotiated by insurance companies and put in written contracts. The rates are based on massive amounts of analysis involving everything from trends in medical technology development, to demographics, to network issues, to inflationary forces, to (especially) prior years utilization and cost trends. There is nothing arbitrary about it.”
Actually, in the Discounted fee-for-service model used in most places, the rates are a function of the Medicare rate in that catchment area.
“A lot of time also. Medicare is straightforward and billing problems rare. All of our big problems have occurred with private insurers.”
Twenty years ago or so, HCFA (now CMS) proposed docs being able to opt out of Medicare. It was unthinkable! The average practice thought the reimbursement was low but it paid net 45 days on a clean claim, it was your cash flow.
All of that has been MUCH less true since the Great Recession.
This is an old thread. I’m surprised to see it resuscitated – and so actively by you. I work in the healthcare insurance industry and have provided analysis to the contracting team to help them set rates. I know what I’m talking about.
When I worked for the not-for-profit Blues, we did, indeed, often just set rates at a % of Medicare. However, now that I’m in the nationwide for profit insurance arena, we have most of our business at contracted reimbursement rates determined by analysis as I described. We would not be able to establish profitable or successful networks if we went at a % of Medicare.
Currently aspects of ACA operations are in my purview. I have about $1.5 billion in revenues and expenditures go across my desk; meaning I’m not the janitor.
Your background with regards to all of this is?
You guys must be desperate to be filling a 3 year old thread with pro-Obamacare comments.