Category Archives: Patients

Watch your back! Surprise medical bills may await

Show me where it hurts

Show me where it hurts

 

Dr. Richard Amerling, president of the Association of American Physicians and Surgeons, writing from New York, had this to say in yesterday’s Wall Street Journal:

A patient recently asked, “What would happen if there was no health insurance?” I responded, “The prices for all medical goods and services would immediately plummet.”

I would direct his attention to Sunday’s New York Times (After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn’t Know), which presents a much more realistic view of what goes on in New York City and around the country. To wit:

  • A patient had a neck surgery he may or may not have needed. (There are 2x-5x as many spine surgeries in the US as elsewhere in the rich world. The multiples are particularly high in places where surgeons like to live)
  • The orthopedist charged $133,000 but was reimbursed (and willingly accepted) $6,200. That’s on top of $60,000 or so in other charges from the hospital and anesthesiologist
  • An out-of-network “assistant surgeon,” probably not needed, billed an additional $117,000, which the insurance company ended up paying in full. The orthopedist says he didn’t take a cut of the assistant’s fee. Whether it’s true in this case or not, it happens

So what does this tell us?

  • That the information Dr. Amerling provided to his patient is naive at best
  • That insurance companies need to find better ways to contain costs or that regulators need to change the rules to allow them to do so
  • That patients need to be more skeptical of recommendations for surgery (especially spinal surgery)
  • That a single payer system, for all its faults, looks superior to the current state of affairs

There are benefits managers like MedSolutions that help insurance companies and employers deal with this sort of nonsense. At the very least this news should be good for their business.

photo credit: Darcie via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

Apple Health App: A first taste

Blood alcohol might be of interest to hackers

Blood alcohol might be of interest to hackers

Nothing for now, but it's coming

Nothing for now, but it’s coming

I was brave (or stupid enough) to download iOS8 on my iPhone 5 early yesterday morning at Boston’s Logan Airport. Luckily the update completed before I had to get on the plane. It was neat to see a Health icon pop up on the home screen, and I had a chance to give it a quick look. There wasn’t all that much I could do with it for now, beyond entering some basic data like height and weight, but it’s an intuitive app that fits in with the rest of Apple’s iOS offerings. We’ll have to wait for 3rd party apps to hook into Health through HealthKit, which will take awhile. And the Apple Watch isn’t out yet either.

I think Health is going to lead the market, but not dominate. Here’s my logic:

  • Like other Apple innovations –think iPod and iPad– decent products already existed in those categories and were starting to get some traction. I had mp3 players and a tablet computer years before, but Apple did a better job of packaging everything up and taking usability to the next level. For me, the iTunes store differentiated the iPod and the long battery life made iPad worth ponying up for. In this case Apple is entering a market that others have already been prospecting in. Some of those others –like Fitbit– have taken a lesson from Apple and tried to make elegant products that won’t be so easily pushed out of the way by Apple mania
  • The soon-to-be-introduced Apple Watch should work very smoothly with the iPhone or iPad. I’m planning to get one when it arrives, and I’m holding out hope for a high quality heart rate monitor as part of the package. This is the type of product that should evolve quickly, with new sensors and improved performance, but it will take some getting used to before I start trading in my watch every year or two and charging it up every night
  • Despite the recent dustup over iCloud accounts being hacked, I do trust Apple with my personal data more than I trust competitors like Google.  Apple’s business model allows it to make money by selling products and services to consumers without resorting to data mining. Apple seems to be going out of its way on the Health side to emphasize its trustworthiness. That’s a selling point competitors will have trouble matching –because data mining is the business model. More consumers are going to care about this as things move along
  • One reason use of personal health data technology has been so low is that while younger people are open to it they are generally healthy and don’t need to deal with their records nearly as much. But it’s been seven years since Microsoft’s HealthVault was introduced –and those same tech-embracing folks are getting older. Also, there’s been a remarkable change in the level of use of smartphones in the past few years. They’ve gone from non-existent to ubiquitous, so Apple doesn’t need to convince people to bring another device along. The passive collection of data through sensors also makes a huge difference in ease of use and accuracy of the information. (See Health tracking apps: Not yet ready to make a big impact)
  • Apple’s move is going to bring a lot of app developers into the market and we’ll see some pretty clever uses for Health before long. That will include general purpose apps and those for folks with specialized needs, like those who need to track specific parameters for a chronic illness

Makers of health apps and tools will all need to look to Apple Health to figure out how they fit in. The opportunities for data suppliers and vendors serving doctors and hospitals are there, too, but it will take at least a couple years to sort out the most promising approaches.

I look forward to going along for the ride.

By healthcare business consultant David E. Williams of the Health Business Group

China syndrome: Rich flee mainland for medical care abroad

Coming for radiation treatment in the US?

Coming for radiation treatment in the US?

I feel bad for the patients profiled in Desperate Chinese Seek Medical Care Abroad in the Wall Street Journal. I’ll note upfront that I’m no expert in the Chinese system. But from what I’ve read here and elsewhere it’s not uncommon for hospitals and physicians to push profitable, expensive services and products that are not in the patients’ best interests.

As a result, those with means are looking abroad for relief. Some are winging it to the US, and the article paints a flattering –albeit anecdotal portrait– of better diagnoses and effective treatments here.

In the comments section, several readers assert that the article provides proof about how great the US healthcare system is. That’s not the conclusion I draw.

The article mentions one patient who paid $70,000 out of pocket to UCSF, and another at MGH who’s out $270,000 so far after using up her savings, selling her apartment and borrowing money.

I’ll assume that the patients are getting first rate care, but I’ll also assume that they are being billed “charges,” the ridiculously high rack rates that are used to set fees for those who lack the protection of a big insurance company. Are patients really being treated better financially than in China? I doubt it.

And it’s not as though US providers always have their patients’ best interests in mind when recommending treatments. It might not be as overt or widespread as in China, but it’s still a problem.

On a separate point, the article mentions Chinese coming to the US to give birth, lumping that phenomenon into the same category as cancer patients. That’s a totally different situation. The typical reason for giving birth in the US is to gain US citizenship for the child.

photo credit: Profound Whatever via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

Paying for IVF

You paid how much for me?

You paid how much for me?

Advances in fertility treatment have greatly expanded the number of people who can become parents. But treatment is expensive and –in most states– is not covered by health insurance. Patients often pay tens of thousands of dollars out of pocket for in-vitro fertilization and surrogate pregnancies, and face tough decisions about whether to continue treatment when initial attempts fail.

Kaiser Health News (Infertility Patients Finding Creative Financing Help) documents the growing number of options available to fertility patients. Clinics and shared-risk programs provide full or partial refunds for customers who don’t end up with a baby, in exchange for paying somewhat more upfront. These programs look like a good way to hedge against the risk of multiple cycles or failure to conceive. Those offering the programs must like them, since they increase the addressable market and probably boost average revenues per patient.

So on balance I think these programs are good. But it’s worth stepping back to consider that a mediocre Reproductive Endocrinologist can easily make a seven figure income, especially in those states that don’t mandate coverage for fertility treatments. In the 15 states that do mandate coverage insurance companies use their negotiating power to pay more reasonable rates than what any individual could hope to negotiate, and there’s no need for the consumer to participate in shared-risk or similar programs. Insurers also get a break on the price of expensive fertility drugs.

The downside of the mandate is that it increases insurance premiums for everyone, although those increases may be partially offset by reduced costs for neo-natal intensive care (when self-pay patients push for more embryos and end up with twins and triplets).

I live in a mandate state and I’m glad that I do.

photo credit: Gonzalo Merat via photopin cc
—-

By healthcare business consultant David E. Williams of the Health Business Group

 

 

Patient portals: Hiding in plain sight

Many physician offices have patient portals, since they’re a requirement for Meaningful Use Stage 2. But a new survey from Software Advice confirms what we knew intuitively – these portals don’t get much use. Patients don’t know they exist and doctors don’t use them a whole lot. That’s kind of odd considering that portals can be useful and efficient. They’re good for checking lab results, asking non-urgent clinical questions, renewing prescriptions, managing appointment schedules, patient education and paying bills.

Why then is uptake so low? I have a few ideas:

  • The systems are clunky -frustrating to navigate, often down for maintenance or for no explained reason, and slow
  • Workflows are awkward. For example a physician may have access but her admin may not
  • There’s often no value proposition for a physician who wants to use a portal
  • Messaging is inflexible with no access to attachments web links or other enhancements
  • Some of the more important communications, like sharing a diagnosis don’t lend themselves to asynchronous communications
  • Privacy and security remain concerns and the required safeguards create barriers

Contrast the weak state of portals, which have been available in one form or another for 20 years, with other changes in communication that have been embraced much faster. Think texting, Skype, and mobile commerce, all of which have rocketed to prominence since patient portals were invented. I do think we’ll get there, but it will take a new generation of doctors, patients, software developers and payment models to make it happen.

You can find the original item from Software Advice here.

Narrow networks: Get used to it

Narrow but workable

Narrow but workable

Many health plans unveiled “narrow network” plans recently as part of the Affordable Care Act. These plans cover a limited number of doctors, hospitals and other providers and often pay nothing for out-of-network coverage. Predictably, some members are upset as documented today by Kaiser Health News (Limitations of New Health Plans Rankle Some Enrollees.)  Some consumers are upset that they can’t see specific doctors who they may have seen in the past and that the list of available providers isn’t terribly long.

Insurance commissioners and lawmakers are hearing complaints and some are considering taking action. And while it definitely makes sense for regulators to take an interest in network adequacy and to prevent abuses, in my view narrow networks have become a crucial part of healthcare affordability and need to be maintained.

Here’s why they’ve become prevalent: The Affordable Care Act prevents health plans from using many of their traditional tools for limiting costs. They can’t reject sick or high-risk patients, can’t charge them more, can’t cap annual or lifetime benefits, and have to provide a set of proscribed services. At the same time, the plans are subjected to apples-to-apples comparisons on health insurance exchanges by price-sensitive buyers. The result is that plans take the main remaining step they can to be control costs: limiting their networks to providers willing to accept lower reimbursement rates.

Most shoppers care mainly about price so this is a very sensible approach for the health plans. And for many customers it’s a way to afford insurance that provides a wide array of benefits. In some markets (including Massachusetts) narrow network products that exclude the highest priced, largest healthcare systems provide very substantial discounts while still delivering high quality providers.

Narrow networks are becoming increasingly important. In 2010, before the Affordable Care Act, I wrote Narrow networks. Nice idea but no panacea. I listed six reasons why such networks were having a limited impact. Some of these factors are still present, but others are less prominent. For example, the development of integrated delivery networks mean that health plans can contract with these larger entities and get essentially all the providers they need, the emergence of risk-sharing through ACOs and similar arrangements aligns incentives, and in general there is more price sensitivity. At least a few provider organizations are now positioning themselves as value players, ready to address an emerging market segment.

 

photo credit: coolmonfrere via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

Medicaid: Program for the poor should not impoverish doctors and hospitals

medium_4155232663

Medicaid beneficiaries deserve the same access to healthcare services and products as people with commercial insurance or Medicare. But since Medicaid pays doctors and hospitals 27 to 65 percent less than commercial health plans (according to a new GAO report), it makes it awfully difficult for providers to be payer agnostic. Sure enough, we see even supposedly mission-driven non-profit healthcare systems looking to maximize their share of the commercial population by catering to that group.

That’s a real public policy problem as the proportion of patients with Medicaid increases, and it presents providers with an unreasonable dilemma.  In many states, doctors or hospitals that take care of a high proportion of Medicaid patients will find themselves in financial distress. That’s not fair to them or the Medicaid recipients. Frankly it’s also unfair to the commercial customers who may be overpaying to compensate for Medicaid underpayments.

Compare Medicaid with the Supplemental Nutrition Assistance Program (SNAP), aka Food Stamps. SNAP recipients don’t bankrupt supermarkets. That’s because the government pays the same price for groceries as any other customer. The SNAP program doesn’t demand that the grocery store sell products below cost, nor should it. SNAP recipients have to be savvy about how they use their benefit, seeking out high value products and retailers to stretch their dollar.

Realistically we won’t see the disparity between Medicaid and commercial payment rates erased any time soon. It would be just too expensive. But there are steps that can and should be taken:

  • Narrow the gap over time from the current 27 to 65 percent to something more like 10 to 15 percent
  • Introduce more progressive payment mechanisms –like Medicaid Accountable Care Organizations– that provide health systems with incentives to contain costs and improve quality. Healthcare systems that figure out how to help Medicaid members become healthier for a lower cost will prosper –analogous to what Walmart does with SNAP payments
  • Provide incentives for Medicaid beneficiaries to seek lower cost, higher quality care. Let’s not be paternalistic and assume that people on Medicaid aren’t capable of identifying high quality, low cost services.. I’ll venture to say that many lower income Americans are savvier shoppers than average consumers, if only due to necessity

The GAO report should be a wakeup call. It’s time to do something about these disparities beyond simply shrugging our shoulders.

photo credit: nffcnnr via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group