Month: July 2014

Family Docs Squeezed by Narrow Networks

The American Academy of Family Physicians in a recent article has complained about the “Arbitrary Elimination’ of Physicians From Insurers’ Networks.” http://www.aafp.org/news/practice-professional-issues/20140729narrownets.html#embeddedforumform

I Commented:
Narrow networks are just the latest insurance subterfuge.  No matter what CMS does the insurance companies will always be ahead of them in the gaming of the system.   When will the AAFP get wise and endorse single payer medicine?

Dr.George Barron Replied:
To see this problem as an insurance subterfuge and in the same breath ask the AAFP to endorse a single payer system betrays a thorough misunderstanding of the current problem as well as the proposed solution. I think every physician who believes in the utopian notion of a single payer system either spend a year working in the VA system or a week as a patient in the VA system

Thank You:
Thanks, Dr. Barron, for responding to my comment on the AAFP denouncing the “Arbitrary Elimination of Physicians from Insurers’ Networks.” I am sorry that you have had such poor experiences as a physician and patient with the Veteran Administration.   Obviously you were not in the Rand Corporation study of the VA medical system which stated that “Based on 294 health indicators in 15 categories of care, they found that overall, VA patients were more likely than patients in the national sample to receive recommended care. In particular, the VA patients received significantly better care for depression, diabetes, hyperlipidemia, and hypertension. The VA also performed consistently better across the spectrum of care, including screening, diagnosis, treatment, and follow-up. The only exception to the pattern of better care in VA facilities was care for acute conditions, for which the two samples were similar.”  http://www.rand.org/pubs/research_briefs/RB9100/index1.html

I think we can both agree that government run programs (like the Air Force, the CIA, the Federal Reserve System, Medicare, etc.) all leave room for improvement. And I assume that your dislike for these agencies will tempt you to forego any Medicare limitations and rely on your own personal finances and private insurance for your future health care.  However, some of us are not satisfied that, with our insurance-based medical system, the U.S. pays almost twice as much as any other industrialized country and yet ranks 11th in health care quality. And the first 10 countries have some form of single payer medicine. And, like the AAFP, we are not satisfied that health insurance companies are eliminating primary care physicians from plan networks across the country.

U.S. Healthcare Overall Rating

We describe single-payer medicine as improved Medicare for all. The ‘improved” part of this is important. No one believes it will not take a lot of work.  In addition to system changes we need to insure that the program is appropriately funded and relative immune from political micro-management. And we should start now.  I assume you would not be interested in joining me and the 19,000 other members of  Physicians for a National Health Program.

AAFP Complains

The American Academy of Family Physicians in a recent article has complained about the “Arbitrary Elimination’ of Physicians From Insurers’ Networks.” http://www.aafp.org/news/practice-professional-issues/20140729narrownets.html#embeddedforumform

Narrow networks are just the latest insurance subterfuge.  No matter what CMS does the insurance companies will always be ahead of them in the gaming of the system.   When will the AAFP see the light and endorse single payer medicine?

See http://wp.me/p4MwV3-11

Insurance Exchanges: The Fast Food of Health Care

The Policies Offered By Insurance Exchanges: The Fast Food of Health Care

The exchanges may not be cheap but at least they have low value.

Now that January 1 has come and gone we are moving in to the era of medical insurance exchanges. These exchanges were created by the Affordable Care Act and took effect on January 1, 2014.  They are designed to be state marketplaces where individuals and small businesses can go to shop for health insurance. Insurance companies are required to offer essential health benefits of various, but comparable, levels of coverage.  These have been labeled the “metal” plans, i.e.,  Bronze, Silver, Gold, and Platinum which are supposed to cover 60%, 70%, 80%, and 90%,  respectively, of the insured’s medical expenses.(1)  For many reasons, those percentages are deceiving. The plans also are supposed to cap out-of-pocket expenses at the same level as that provided by Health Savings Accounts. That cap does not include premiums, most pharmacy benefits and uncovered services such as multiple physical therapy visits and errant visits to out-of-network medical facilities. Eligible applicants will be offered tax credits for premium support or expanded Medicaid coverage.

As a buyer- consumer- patient when looking at the plans it is important to know what physicians, hospital, laboratories, etc. are covered by any given plan.  A large percentage of the plans being offered are so-called “narrow networks” which have a small list of providers compared with traditional networks. This has a number of bad effects, especially for people who have their own primary physicians and specialists. The out of pocket costs of going out of the network can be huge whether intended or unintended such as in emergencies, confusion over the complexity, or lack of appropriate specialty care within the network. (2)(3)

Deductibles are another important issue in choosing an insurance plan. This is the money the buyer has to spend before the insurance kicks in. Even before Obamacare the insurance companies were pushing policies with higher and higher deductibles.  The exchange policies are building on this process. Some policies can have separate deductibles for provider services, emergency room visits, and prescriptions. This raises the cost to the patient even higher. Often, copayments and coinsurance charges are not included in the deductible.  Furthermore, it has been shown that a high deductible encourages patients to forestall or completely avoid needed medical care. If you know that an emergency room visit can cost you $300-$2000 and you have a $3500 or $5000 deductible you may think twice, thrice(?) about going to the E. R. with that uncomfortable abdominal (or chest) pain that you have had for the last 6 hours.(4)(5)  This not only defeats the purpose of medical insurance but it can have disastrous consequences. This is the high price of under-insurance. Any policy that has a deductible that the patient cannot afford to pay is not a good investment of the premium dollar. It is telling that, in the United States, studies have shown that 62% of personal bankruptcies are related to medical bills. Sixty percent of those had medical insurance at the time those medical bills were first generated.  Obviously there was an issue of under-insurance . (6) The Massachusetts precursor of Obamacare has not improved those figures in that state. It has been rightfully stated that high deductible plans are for only the rich and healthy.

Unfortunately, purchasers, when selecting an insurance policy, look mainly at the premium price.  This is the fast food business of the insurance industry. Best advice?  Caveat Emptor.  Buyer Beware.

High Deductibles

High Deductible, Low Adherence

Suggested Reading:

 1) Obamacarefacts.com

2) Out-of-Network Physicians: How Prevalent are Involuntary Use and Cost Transparency,” HSR, June 2013

3) See my blog “Narrow Networks :Less Choice, More Cost Shifting”.

4) Half of Insured Adults with High-Deductible Health Plans Experience Medical Bill or Debt Problems The Commonwealth Fund, January 27, 2005

5) The Impact of High-Deductible Health Plans on Men and Women: An Analysis of Emergency  Department Care. Kozhimannil, Kat et al, Medical Care (APHA), August 2013

6) Himmelststein DU, Thorne D, Warren E, Woolhandler S. Medical bankruptcy in the United States,2007: results of a national study. Am J Med. 2009;122:741-746.

 

 

Drug Company and Conflict of Interest

Medpage’s Friday Feedback on Pradaxa quotes Dr. Patrick Lyden’s comment about the British Medical Journal’s concern over Pradaxa safety when he says it “has no clinical relevance whatsoever”. This would be more convincing if Dr.Lyden hadn’t been a speaker and consultant for Boehringer Ingelheim, the drug’s manufacturer and if B.I. hadn’t just agreed to pay $650 million to settle a lawsuit involving thousand of cases including over 1000 deaths rather than submit to expert disclosure and trial.

<http://www.nytimes.com/2014/05/29/business/international/german-drug-company-to-pay-650-million-to-settle-blood-thinner-lawsuits.html>

Improve Medicare (and All) Drug Pricing

As we recognize the need for single payer medicine we must keep in mind the alter-description “Improved Medicare For All”. In this context it is important not to lose sight of the goal of improving Medicare.  Even though Medicare is successful and highly regarded by seniors there are things that can and should be done to achieve true universal health care. Prescription drugs can have prohibitive prices for the Medicare as well as the general population. Sanders and Veght make a good case for four important changes:

  • Restore Medicare prescription drug rebates
  • Allow Medicare to negotiate drug prices
  • Secure better discounts to close the doughnut hole faster
  • Promote cost-effective drug prescribing

For an excellent article   Click here to read the report.

Narrow Networks. Value only for insurance Companies

The recent article by Alicia Caramenico in Fierce Health Payer, http://www.fiercehealthpayer.com/story/narrow-networks-striking-right-balance/2014-07-21, expresses a few of the problems with narrow networks. The three main problems went unmentioned however.

  1. The main value of the narrow networks goes to the insurance companies who use them to cherry-pick policy holders and providers on the basis of what’s good for the bottom line of the insurance company.
  2. The panel highlighted in the report consisted of “featured leaders representing a nonprofit health system, health insurers, insurance commissioners and a healthcare economist.” There was no mention of the opinions of physicians and patients.
  3. The whole issue is nothing but an insurance underwriting problem that would not exist if we had single payer medicine.

Please see http://wp.me/p4MwV3-11 for more on Narrow Networks

Drug Companies Rip Off the Public

Drug Companies Rip Off the Public

While the pharmaceutical and medical device companies continue to score high profits many also work hard to hide those profits from U.S. taxation. Pfizer’s recent attempt to buy out London’s Astra-Zeneca is a good example of the strategy called tax inversion. By this method if the new entities that are created have at least 20% ownership by foreign stockholders they are allowed to pay their taxes at much lower rates in their adopted countries.(1) The 11 largest global drug companies already made an astonishing $711 billion in profits over the 10 years ending in 2012(2). And while all of this profiteering is going on the pharmaceutical companies are charging U.S. citizens astronomical amounts for cheaply made drugs. And, guess what, they spend 19 times more on marketing than they do on research and development.(3) This is the free market at work. The invisible hand needs to write some new regulations.

(1)  http://themorningconsult.com/2014/07/health-firms-seek-shelter-abroad-margins/

(2)   http://www.huffingtonpost.com/ethan-rome/big-pharma-pockets-711-bi_b_3034525.html?view=print&comm_ref=false

(3)  http://www.bmj.com/content/345/bmj.e4348

After Obamacare

After Obamacare

As the smoke begins to rise from the newly built structures of the Affordable Care Act (ACA) it is becoming more obvious that there is a real fire that will destroy this latest attempt at managed care.  Expensive, complicated, bug-infested computer programs, loss of insurance policies by individual purchasers, and expanding underinsurance created by the act and copied in new employer sponsored plans are the kindling that will stoke the fire.  Long before the Republicans declared war on Obamacare, long before there was Obamacare, there was a community of health care reform advocates who knew, and spoke to the fact, that incremental patches could only make matters worse. As polls have appeared stating how many people are opposed to the ACA it is assumed that all of the opponents come from the anti-government wing of politics. This ignores those people who have advocated for a single payer medical financing system and know that it will have to be built from the ashes of this corporate charade.  If anyone wants to go back and read the writing on the wall they should visit Dr. John Geyman’s book, “Hijacked,” published in 2010. 1

One of the many unfortunate effects of the ACA is that it can be used by the anti-government contingent to pad their argument that government can’t do anything right. This argument, of course, ignores the popularity and benefits of Medicare as well as many other government services.  The main problem with this characterization of the ACA is that the act is not an example of true governance in action. The ACA was essentially written by representatives of the four big stakeholders who had the most to gain from keeping the existing system intact, i.e., Insurance, Pharmaceutical, Hospitals, and Organized Medicine.  Dr. Geyman referenced the fact that in 2009 industry hired about 4,525 lobbyists to influence the writing of the health care bill.2   Large campaign contributions to congressmen assured their support of industry goals.

The problem, then, is not government. It is corrupt government. There are many individuals and organizations who are working to get the huge influence of money out of Washington, D.C. This is going to take a large, unrelenting, grass roots effort. In the meantime our medical care system is spiraling out of control, now topping $3 trillion a year. This will jump even higher as we pay for the expensive, crippled, federal and state vetting apparatus for the ACA.  These new expenses will be never ending as people move in and out of geographical and economical territories. We are already spending twice as much per person for medical care as any other developed nation and we’re getting poorer results and covering a lower percentage of our population.3

The escalating costs of medical care are not sustainable. Now that we are not fighting wars the biggest threats to our economy are medical expenses. True cost control cannot be done piece-meal and cost-shifting to personal expenditure is not cost containment. The four stakeholder industries need to be brought under ethical and financial control, starting with the medical insurance industry that siphons off large amounts of money for expenses and profits.

Where there’s smoke, there’s fire. As the Affordable Care Act goes down in flames we need to rebuild with a system that is equitable, comprehensive and economical.  An improved Medicare for all, single payer system fills these criteria and can be the Phoenix that rises from the ashes.4

Suggested Reading: 

1) Geyman, JP. Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform. Monroe, ME. Common Courage Press, 2010.

2) Eaton, J, Pell, MB. Lobbyists swarm capitol to influence health reform. Washington, D.C. The Center for Public Integrity, Feb 23, 2010

3) OECD Health Data, 2013

4) Funding H.R. 676:  The Expanded and Improved Medicare for All Act – How we can afford a national single-payer health plan in 2014

 

We Are All Underinsured

 

The Many Faces of UnderInsurance

  

As the Affordable Care Act (ACA) kicks in we are moving into an era where a larger and larger percentage of our population will be unable to afford medical care and we will see an increase in an already high number of medically preventable illnesses and deaths and medically related personal bankruptcies. This will result from lack of control over medical inflation and a tidal shift of medical insurance policies into a lethal pattern of underinsurance. The ACA is predicted to decrease the number of uninsured Americans to about 30 million. (1)  Lack of medical insurance leads to at least 55,000 unnecessary deaths a year in the United States. But inadequate medical insurance also takes its toll and it is likely that this problem will worsen dramatically over the next few years in response to the ACA.

 Definitions of Underinsurance

 By the common definition, individuals are considered underinsured if their out-of-pocket expenses are more than 10 percent of their income  (5 percent if they were low-income) or deductibles are more than 5 percent. By current definitions 44 percent (81 million) of adults ages 19–64 were either uninsured or underinsured in 2010. 29 million of these adults were underinsured.

In reality, the formal definition of underinsurance needs to be revised.  As we will see, all of the factors listed below expose the fact that most of us are being denied access to appropriate, comprehensive medical care unless we pay for it out of our own pockets.  Another way of framing this is to state that to whatever extent our medical insurance is not paying our medical bills we are underinsured.  Also, underinsurance  is definitely responsible when any insured person  avoids needed medical care for financial reasons. This can take the form of not seeing a physician, or delaying to see one, not filling a prescription or partly filling one, and not following through on recommendations for testing, therapy or return appointments.  The fact that if you are in the top 5% of wealth or income you can afford to supplement your insurance when any medical bills arrive, only illuminates how you can deal with being underinsured. WE ARE ALL UNDERINSURED (2)

 What are the many faces of underinsurance?

Low actuarial value

 Even the policies sold on the new insurance exchanges will create financial problems because of their low actuarial values. The prescribed Silver plans will claim a 70% value but for reasons to be discussed they won’t even provide that. And if they did, the 30% left for the patient who has little or no liquid assets means assuming unrealistic debt or foregoing needed medical care. (3)

Lack of Transparency

As an example,  frequently a patient will be held in the emergency area or even in a regular hospital room for 24-72 hrs. of what is billed as observation status. This is not a hospital admission so Part A of Medicare does not kick in but Part B or D does.  This shifts the coverage to higher deductibles and other out-of-pocket expenses. (4)-

Deductibles Six years ago, 12 percent of workers faced a deductible of at least $1,000 for single coverage. Now more than a third do, according to the Kaiser Family Foundation’s 2012 survey of employer-sponsored plans.  Increasingly a high-deductible plan is the only insurance offered on the job, even at big companies. These are often coupled with a Health Saving Account with employer and/or employee contributions. (5) The new exchange policies can have deductibles as high as $6,350 for singles and $12,700 for families.

Copay

Copays are fixed dollar amounts that the insured patient has to pay toward most services. They vary by service (office call, x-rays, pharmaceuticals, etc.), and policy terms which vary year to year. These can be very high including 100% of the cost of many generic drugs.

Co-insurance

Co-Insurance is a percentage of any category of charges that is assigned to the enrollee in an insurance plan. These can easily add up to thousands of dollars during any one illness.

Defined Contribution

More employers and pension plans are moving into defined contribution plans in which the employer contributes a defined amount each month and the later benefit is determined by the amount left in the fund.

Benefit Confusion causing Out-of-Pocket Expenses

Frequently in our present system patients experience sticker shock when, after an illness, they discover that their insurance (Medicare or otherwise) doesn’t cover as much as they expected.(6)

Narrow Networks

The morphing of insurance coverage into narrow networks of providers is another gambit for shifting costs to the patient, i.e., creating more underinsurance. (7)

Tiered Pharmacy Plans & the Do-nut Hole

Prescription cost is one of the first areas the underinsured skimp to save money.  The donut-hole in Medicare prescription coverage defies justification.

Long Term Care, Dental, Optical, Mental Health, Rehabilitation

Entire categories of health care are not covered by Medicare and other insurance plans. These all contribute to the medical bankruptcy rate which is going to continue to grow.

It is obvious that the insurance system doesn’t work.  WE ARE ALL UNDERINSURED.  Every one of the above items (and the cost of administrating them) could be eliminated with single-payer medical financing, i.e. improved Medicare for all.

 Suggested Reading:       CTRL-click to follow link

 1) When Insurance Isn’t Enough: Underinsurance in America
            
Healthwell Foundation

 2) The ‘Underinsurance’ Problem Explained
     By Jenny Gold, Kaiser Health News, Sep 28, 2009

 3) Actuarial value may not predict your financial exposure
    Choosing the “Best” Plan in a Health Insurance Exchange: Actuarial Value Tells Only Part of the Story.  Ryan Lore, Jon R. Gabel, Roland McDevitt, and Michael Slover
The Commonwealth Fund, August 2012

4) Observation Units Can Improve Care But May Be Costly For Patients
  
Health Aff September 2011   vol. 30  no. 9  1762-1771
Michelle Andrews Feb 12, 2013

5) The Prevalence and Cost of Deductibles in Employer Sponsored Insurance:
           
 A View from the 2012 Employer Health Benefit Survey
  
Kaiser Family Foundation,  November 2012

6) Milliman Medical Index (MMI) 2013

 7) See my blog NARROW NETWORKS Less Choice, More Cost Sharing