Category Archives: Policy and politics

Seth Moulton and the VA system: I like what I see

Seth Moulton. So far so good

Seth Moulton. So far so good

Congressman Seth Moulton was an inspiring candidate: a Marine and Harvard Business School grad with strong leadership skills who wanted to serve the country in Washington. Despite the cynicism I and many others have for politicians, this guy seemed like the real deal.

So far he appears to be living up to his promise.

I was very impressed by an article in today’s Boston Globe (In effort to fix woes in VA care, Moulton taps own experience) about how Seth is working to reform the VA healthcare system. He went for care at the VA without revealing his Congressional status, and he solicited input from others in the waiting room and from his own military buddies. He noted that many of the staff and clinicians are doing a good job, and tried to identify what was holding them back. He’s attempting to translate his insights into pragmatic reforms that can help address root causes of the problems.

All of this is a welcome break from the usual bloviating we hear on Capitol Hill when it comes to the VA and other topics. I hope Seth is successful with this approach and that it is contagious among his colleagues!

I do want to point out that the VA often gets a bad rap. Yes, there are all sorts of problems, many of which are inexcusable. When we read articles about the VA the implicit assumption is that things are much better in the private sector. But those of us who work in the system know the VA has no monopoly on inexcusable lapses in quality, safety and customer service.


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

Sorry Captain, there’s no transparency in medical pricing

Just what the doctor ordered

Just what the doctor ordered

In the 1990s I used to go to a decent family seafood restaurant in the Coolidge Corner area of Brookline: Captain’s Wharf. The restaurant was pretty successful and underwent a nice renovation. Soon after it closed, which was a surprise, but the building was soon put to a better and higher use:  Coolidge Corner Imaging — an outpatient MRI/CT center.

I thought of Captain’s Wharf recently when I read a Kaiser Health News story about a consumer who did his darndest to find a good deal on a CT scan, finally settling on the $475.53 price at Coolidge Corner Imaging.

But the bill he got later was for $1,273.02 — more than twice as much — from a hospital he had no idea was connected to the imaging center.

“I was shocked,” said White, a doctor of physical therapy who thought he knew his way around the medical system. “If I get tripped up, the average consumer doesn’t have the slightest chance of effectively managing their health expenses.”

The patient wasted tons of time and effort trying to get the problem cleared up. He cared since he had a high deductible plan.

In my view, high deductible plans are a pretty crude instrument to encourage cost consciousness and price transparency. I switched to a high-deductible plan recently because the premium was so much lower –as a business owner I pay the whole premium in any case. It has no real impact on the way our family uses the insurance. The main impact is that I struggle more to understand the medical bills and EOBs that arrive. In particular, once one dependent met his deductible I kept getting confused by new bills that arrived asking for the out-of-pocket payment.

Were these expenses not subject to the deductible? Was the date of service before the deductible was met? It was hard to know and I’m still unclear. What is clear is that my administrative cost is higher from trying to deal with the nonsense.

Meanwhile, on the lower end of the income spectrum are people with high deductible plans who are afraid to use their benefits for fear of the deductible. That’s an indirect subsidy to folks like me, because when people hold back on running up a bill it holds down overall expenses.

High deductible plans are pretty lame. Transparency isn’t here yet and even then it will only be part of the answer. Can’t we do better?

Image courtesy of stockimages at FreeDigitalPhotos.net


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

 

Chronically ill man walking

Can I leave now?

Can I leave now?

(Aging inmate population takes toll on prisons; Harsh sentencing of 1980s, 1990s didn’t foresee health care) announces the Boston Globe headline. I’ve been reading a story like this every year or two for the past 10 years. It’s kind of pathetic: cold blooded killers now incontinent, motor cycle gang members with “special medical boots” for a foot condition, etc.

Some prisons have needed to set up geriatric wards, while others have effectively been turned into convalescent homes.

The aging of the prison population is driving health care costs being borne by American taxpayers. The Bureau of Prisons saw health care expenses for inmates increase 55 percent from 2006 to 2013, when it spent more than $1 billion…

‘‘Our federal prisons are starting to resemble nursing homes surrounded with razor wire,’’ said Julie Stewart, president and founder of Families Against Mandatory Minimums. ‘‘It makes no sense fiscally, or from the perspective of human compassion, to incarcerate men and women who pose no threat to public safety and have long since paid for their crime. We need to repeal the absurd mandatory minimum sentences that keep them there.’’

I agree that the “War on Drugs” has put far too many people in prison for far too long. That sentiment seems to be getting more popular. If revulsion at high medical spending for prisoners helps some people come around to a less draconian view of sentencing, so much the better.

Image courtesy of tiverylucky at FreeDigitalPhotos.net


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

What’s the difference between New York and Boston?

A million here, a billion there

A million here, a billion there

We are modest and moralistic in Boston. The lead story in the May 1 Boston Globe criticized Vertex Pharmaceuticals for approving a plan to pay a dozen executives a total of about $54 million if the company becomes profitable, something that has taken 25 years to achieve. If the company becomes profitable it will be because it successfully launches a new drug that will improve the lives of people with cystic fibrosis. Sounds pretty good to me.

The bonuses represent an insignificant percentage of the $15 billion increase in Vertex’s market value in the past 12 months. Critics can complain all they want, juxtaposing the high prices insurers pay for medication with the bonuses awarded. I just don’t see this as a headline issue.

Meanwhile the New York Times yesterday led off with an article about the top paid hedge fund managers (For Top 25 Hedge Fund Managers, a Difficult 2014 Still Paid Well). The top 3 managers each made about $1 billion. That’s right, each one made 20x what the dozen Vertex managers might be due for collectively. To make it to #25 on the list required earning $175 million, still far, far above the Vertex dozen. Oh, and by the way most of the hedge funds had mediocre performance in 2014, in the low single digits, and their operations didn’t contribute much, if anything to improving society.

Some of the funds employ scientists (physicists and astronomers are two examples provided) to help with their trading, yet they earned returns far lower than the non-geniuses who bought and held the S&P 500. Vertex critics are up in arms about taxpayers indirectly paying executive bonuses, but maybe they should instead scrutinize public entities such as pension funds that are paying large fees to hedge funds.

Image courtesy of samandale at FreeDigitalPhotos.net

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

Of course emergency department visits are increasing

Health reform and ED use. Not everyone missed the mark

Health reform and ED use. Not everyone missed the mark

The lead paragraph in yesterday’s Wall Street Journal article (Emergency-Room Visits Keep Climbing) is typical:

Emergency-room visits continued to climb in the second year of the Affordable Care Act, contradicting the law’s supporters who had predicted a decline in traffic as more people gained access to doctors and other health-care providers.

Some ACA supporters did make that claim. Meanwhile it’s long been evident to many other supporters –including me– that those with insurance tend to use the emergency room and other medical services more than the uninsured.

Interestingly, I’ve never seen an article like this citing opponents of the law who called this issue out ahead of time. That’s because at the time many conservatives were busy blaming the uninsured for clogging up the emergency department! These folks probably bought into the fallacy tying the uninsured to emergency room use more than supporters of health reform did. Remember, before the ACA, the idea of a universal mandate for coverage was espoused by conservatives, not liberals.

The emergency department utilization issue is pretty simple, actually. If you have insurance you’re less worried that going to the emergency room is going to wipe you out financially.

The ACA was passed in 2010. Here’s a few posts I wrote about the emergency department and insurance in the years leading up to it:

2006: Is the MA health care reform law built on shaky assumptions?

The uninsured may seek a greater proportion of their care in the ER (or maybe not) but they tend to avoid the medical system in general. Meanwhile, insured people are at least as likely as the uninsured to use the ER in a given year.

That doesn’t mean the health care reform bill is a bad idea. It just means that absent other reforms –namely increasing throughput in physicians’ offices through the use of smarter scheduling and webVisits– it will lead to higher costs and lower service levels.

2007: Universal insurance wouldn’t help that much anyway:

But just for a minute, assume we did achieve universal insurance coverage. There would still be plenty of problems; costs might be even higher. A common argument is that costs would go down as uninsured patients head to less costly primary care physicians rather than emergency rooms for routine treatment. That would be great if true, but there’s evidence that insured patients use the emergency room more than uninsured patients. That could be because the uninsured tend to avoid treatment unless they’re in dire straits. Once the same patient has insurance he or she may want to test it out.

2008: Welfare queens for modern times: ER freeloaders

The perception that the uninsured are clogging up emergency rooms is a dangerous one, not only because of the bias it represents against the less fortunate, but also because it drives incorrect policy assumptions. One of the arguments for universal health insurance in Massachusetts and California was that it would [at least partly] pay for itself by shifting patients from the ER to primary care.

Actually what happens is the insured use all modes of treatment more. Providing people with health insurance means they’ll consume more of everything, as we’re seeing in Massachusetts.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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