Last week I had the opportunity to use my local retail clinic, Take Care Clinic.  It was 5:30 PM when my daughter announced that her sore throat was “really bad.”  Since the pediatrician’s office was closed for the day, we decided to visit the Walgreen’s Take Care Clinic to have a strep throat culture.

When we arrived at the clinic, there were about six people ahead of us, all in line to get their $24.99 flu shots.  The clinic’s semi-automated queue let’s you know how many patients are ahead of you, because it’s first come, first served as you sign-in at the kiosk.   There is no administrative staff available to answer your questions as you wait in the queue to see the Nurse Practitioner (NP), who is busy seeing the patient’s ahead of you.

When our name was called and it was our turn, we were greeted by an assistant that took us into one of the two private rooms where we filled out the typical paper work (insurance card, driver’s license/id, reason for visit, age, birth date, etc.).  We asked for a strep throat culture and they took a brief history, including blood pressure, weight, height , and finally a throat culture…..  After this data was collected we moved into the next private room where we saw the NP.  The NP reviewed the chart and results of the throat culture.  She examined my daughter’s ears and throat.  She used her laptop computer to walk through a protocol (series of questions about my daughter’s health and symptoms).  We received a receipt for services, a prescription for antibiotic (her culture was positive) and were out of there in 45 minutes.  The clinic transmitted the Rx directly to the Walgreen’s pharmacy so all we had to do wait 10 minutes to have the prescription filled.

How do the prices for services compare?  Having never visited a retail clinic before, I had no idea what to expect.  The clinic list prices for their services, but it’s not always obvious what service the patient will need, in addition to a throat culture.  What I do know from past experience is that if we visit our pediatrician for a “sick visit” the pediatrician’s office charges $70 for the visit (this is the BCBS-IL negotiated rate for the service), and a throat culture is an additional charge of $27 at the pediatrician’s office.  If I went to my pediatrician for my daughter’s strep throat, I would pay $97 for this service (see table below.).

Conclusion

My visit to the Take Care Clinic was surprisingly expensive.  I was charged $108 for a new patient, comprehensive office visit and $17 for a rapid strep culture.  Total charges for this visit were $125.  I don’t think the “comprehensive office visit” was necessary. The clinic submitted the bill directly to my insurance company, and my health plan offered slight discounts (see table below.)  The convenience of visiting the clinic immediately, rather than wait to see the pediatrician the following day, was a great service.   The following day a staff member from the Take Care Clinic did a follow up call to our house to see how my daughter was feeling and asked if we had any questions --that’s good customer service.  After this visit I researched and discovered that I could have just had the rapid strep throat culture done, without the added cost of an office visit at the clinic.  It appears that they over treated my daughter at the clinic.  All we asked for and all she needed was a rapid strep throat culture, but they unnecessarily did a full office visit.  Had I know this when I went in, I would have demanded a “strep throat culture” only.  Next time I will know better and hopefully, you’ll learn from my mistake.

Out-of-pocket expenses

Ed Bennet, a hospital web manager, has developed a public hospital search tool using the Google Custom Search engine.  The search tool allows you to search more than 2800 hospital websites in a single search query.  The hospital websites included in the search results, provide much more information than just prices for services.  This tool this can be useful to find/access hospital price data that is hard to find using the standard Google search engine, and elminiates the need to individually search each hospital.  

For example, using his hospital search engine, if you type in:

MRI price (results returned = 86)

price x-ray  (results returned = 197)

emergency room price (results returned = 91)

Unfortunately, most hospitals publish their “list price” for services, rather than the true out-of-pocket price for their services.  The list price often has nothing to do with the actual price you are expected to pay for services.  If you pay cash and are uninsured, you should expect (and demand) that you receive a discount from the list price so make sure you inquire about a discounted price.  If you are insured, you will pay a lower, contracted rate that your insurer has negotiated with the hospital provider.

Here’s what I learned:  the two most blatant culprits of the overcharges were due to Secret Prices and Coding Errors/use of an Internal Coding System…I’m sure that’s no surprise for OutOfPocket Blog readers.

A little background

It was suggested that I go to the Emergency Room by my doctor who had prescribed a course of oral antibiotics for an infection. I then came down with a stomach virus and was unable to keep down the medication.  My infection progressed, so my doctor instructed me to go to the ER for IV antibiotics.  I went, received excellent care, stabilized within six hours, went home and had a full recovery.

Then I received my first billing statement.  Those antibiotics and basic blood tests cost $7,051.  Then my PPO policy negotiated it down to $3,525, with no explanation.  These prices seemed so arbitrary to me, I just wanted to know they were fair and reasonable, as determined by industry standards. 

By working with a patient advocate at Southwest Bill Review, I learned that up to 90% of all hospital bills are coded incorrectly.  My patient advocate told me that there is supposed to be transparency in the billing system – and that there are definitive coding guidelines that apply to each hospital.  However, this hospital administers their own coding system – making it impossible to determine exactly what is being charged.    I learned that this is very common.

I then developed a 10-step-process to hospital negotiation. My hope is that this information will help people navigate through the current medical billing system.

The 10-step-process can be found at my blog, Hospital Overcharges 101. Also be sure to check out the Youtube video of my experience.

Free Medical Cost Savings Tips For All

I can be followed on Twitter at: MedOvercharg101 and the Facebook Fan Page, Medical Overcharges 101 – when the 140 characters on Twitter just isn’t enough. 

--By Lynn Jordan

Lynn Jordan is an award winning freelance producer and writer having worked in the television and live event production industries.  This is her first time with the hospital billing system and her hope is that what she has learned will help other people confront their medical bills.

With so much discussion on how we need to reduce health care costs, this article written by Dr. Bernadine Healy in the U.S. News and World Report, sheds some light on this issue as Dr. Healy discuses the secrecy of health care prices. 

When the price of a colonoscopy ranges from $450 to $10,000, there's room for plenty of savings.
By Bernadine Healy, M.D.

As President Obama said again in his recent address to Congress, an imperative for health reform is containing runaway health costs. But the elephant in the room that is a real driver of costs is something few people are talking about: the variable and hush-hush pricing of medical goods and services, set by the government or negotiated by insurers and largely kept secret from the patients ultimately responsible for their bills.

Look at a colonoscopy: When paid by Medicare, the fee is roughly $450. Insurance companies secretly negotiate a maze of different prices, generally two to five times that. But as the trade group America's Health Insurance Plans recently reported, patients who have to pay their own bill because they are uninsured, are seeking care outside of their insurer's network, or their insurer has denied their claim, can face retail charges as shameless as $10,000. And how can it be that Medicare pays $40,000, prix fixe, for the same heart operation, by the same doctor, at the same hospital, that costs patients paying privately $80,000 to $120,000?
Consumers' ignorance of what services truly cost blurs the connection between their rising insurance premiums and prices, setting the stage for those prices to soar ever higher. Little wonder that the country's total health costs—for public programs like Medicare and Medicaid, private insurance, and out-of-pocket payments—are twice those of other developed countries. Making prices transparent so they can be compared and giving patients the means to shop for insurers that will get them the best deals would put downward pressure on prices and bring sustainable cost savings.

Instead, Americans are led to think that what's mainly to blame for out-of-control costs is their own voracious overconsumption. So cutting down on the quantity of medical services used by the sick and reallocating dollars for wellness and prevention sound like definite cost savers. But that ignores a few facts. Compared with people in other developed countries, Americans see doctors less often and take fewer medications. They also spend the same or fewer number of days in hospitals, and they already lead the world in expenditures per capita on prevention and public health. Yes, more high-tech care may be given to the sick in this country, and yes, that contributes to higher costs. But whether it's low- or high-tech care, what is achingly obvious is that total costs are a function of prices. Ours are the highest.

As a classic 2003 report in the journal Health Affairs put it simply: "It's the Prices, Stupid." In their detailed analysis of health spending in 30 developed countries, leading health economists including Gerard Anderson of Johns Hopkins Bloomberg School of Public Health and Uwe Reinhardt of Princeton University determined that the greater cost of care in the United States was due to much higher prices for virtually all of its medical goods and services.

Our senior citizens must have read that study a few years back when they boarded buses to Canada to buy prescription drugs for half the prices they would pay here. Who stopped their burgeoning tea party? The federal government, citing safety concerns, with heavy pressure from the pharmaceutical interests intent on protecting the higher prices Americans are effectively forced to pay.

We are just beginning to see snippets of such comparative price information become more public in other medical areas, prompted no doubt by the growing out-of-pocket payments besetting insured patients. Just last month, a report initiated by Gov. Tim Pawlenty provided price and quality information on 100 medical services from centers throughout Minnesota. Prices were all over the map. The average for colonoscopies ranged from $325 to $1,354. The price of a simple blood count varied from $13 to $85. The wide variation for these and the other prices disclosed suggests lots of room for competition and cost savings. Another area where scrutiny is needed to understand skyrocketing outpatient bills is that of wildly varying and increasingly common "facility fees." A cardiac stress test, for example, can vary by thousands of dollars depending on the size of this tacked-on fee—a charge for the use of a room needed for less than an hour.

To turn these surprising revelations into useful information that can guide and reward patients for getting the best value for their healthcare dollar, prices have to be widely accessible and easily compared before care is rendered. One way to do this might be to expand the concept of the proposed health insurance exchange, which currently would be restricted to the uninsured. Allow for public and private exchanges, and make them open to all individuals who want to purchase insurance anywhere in the country at the best price. And make exchanges vehicles for price transparency, where consumers could get access to comparative and customary pricing information and then hold insurers' feet to the fire by selecting the company with the best available prices at the places they want to go.

The power of making medical prices transparent to the public has not been lost on the political establishment. Indeed, Sens. Charles Grassley and Arlen Specter have pushed legislation to require price disclosures in the private sector, where secrecy clauses between hospitals and manufacturers have been shown to double or triple the cost of medical devices for some patients. Meanwhile, it may surprise the public to know that the government has gone to great lengths to keep the rock-bottom prices it demands quiet, including entering into contracts with industry that make the prices Medicare and Medicaid pay for prescription drugs, say, inviolable trade secrets.

Why? Congress, as laid out in a 2007 letter from the Congressional Budget Office, recognizes that such disclosures would enable private insurers and their customers to be more insistent about getting similar pricing deals, making their own small discounts, and the government's large ones, converge toward an average. While this would lower costs for people with private insurance, it would make government prices—and costs—a bit higher. Disclosure has still not happened.

But if health reform is supposed to reduce costs, disclosing prices and enabling and incentivizing individuals to seek out the best value to serve their needs is a way to do that as a first step—and before making efforts to restrict or redirect care. I'd estimate a good 10 percent of total costs could be taken out of the system quickly, to the benefit of those in both private and public plans.

--Bernadine Healy, M.D.

Write a good letter.  Consumers (patients) who write insurers to appeal a claim are more likely to succeed if they include in their letter references to medical research.  Some advocacy groups and associations offer helpful letter templates for common denials.   You can look up these organizations in Google.  Be sure to include every detail in your letter like dates, who you talked to, titles and contact information.

Get a second opinion.  Obtaining an extra, concurring opinion adds credibility to your argument.  Prestige also matters.  Recruiting top doctors in the field can help your appeal.

Stay calm and collected.  When the appeals process reaches a second round, the consumer will often get to talk on the phone or meet in person with a medical director from the insurance company.  These conferences are as little as 10-15 minutes long.  Staying calm and avoiding yelling and screaming will waste your time in this meeting/conference call.

Look for loop-holes.  Many employers have outdated or poorly written summary plan documents, also known as your contract with insurers.  These outdated documents can sometimes help “open doors” in the appeals process.  Copies of the contracts should be available in an employer’s benefits office.  If you have individual health insurance, make sure you keep a copy of this contract when you sign up for the health plan.

Private health insurers reject tens of millions of medical claims every year, leaving patients scrambling for alternatives.   The October issue of SmartMoney includes an interesting article, Paging Doctor No that shadows an insurance-company medical director to see how the toughest decisions get made.

I look forward to reading more of Jeffrey’s posts on the Nuts for Healthcare blog.

Everyone likes to get a good deal.  This is normal consumer behavior.  We don’t always think about bargain hunting for health care services, but health care is becoming more consumer-focused and comparison shopping can be a huge advantage for patients.  CNN Senior Medical Producer, David S. Martin’s recent article shares some tips to help you find the best value for health care services. 

·         Use websites and tools to help you comparison shop for health care services – and make sure you do this before seeing a provider.  The Outofpocket search engine references 100+ price transparency websites and tools, so it’ a great place to start your research.

·         Don’t forget to check out some of the 16+ state hospital association websites that allow you to comparison shop for inpatient procedures.  

·         You also should visit your state website to comparison shop for services.  Some states including New Hampshire, Minnesota, and Pennsylvania have launched websites to help consumers comparison shop.   I highly recommend comparing prices in your state, to other states, in order to determine an average price for a specific service.   

·         Be sure to use some of the vendor tools like Health Care Blue Book and New Choice Health - that identify average costs insurance plans pay for procedures nationwide.

Over the past two years, I have been researching price transparency tools and frequently update my research to include the new tools as they become available.  My list of tools and websites is getting longer and longer.   If you would like a list of websites/tools that provide price transparency, please contact me at info@outofpocket.com and I’d be happy to send you this research.

Every day people make purchasing decisions based on firsthand knowledge of price, quality and service.   We do this all the time. You might not realize this, but consumers apply this behavior every time they purchase groceries, books, automobiles, and electronics and even when they book travel reservations.  Consumers can make informed purchasing decisions because they have access to meaningful tools and data that enable them to comparison shop and find the best value.

In the health care industry, consumers should be able to easily navigate through treatment and provider options, so they can research the appropriate quality and price information for needed services.  If we engage consumers in the health care decision making process, people will act more responsible.  I also believe our health care system should include programs that encourage accountability for providers, patients (consumers) and health plans.

The good news is health insurers are making progress in this direction.  Some of the larger health plans are finally accepting the fact that their members should be treated like customers and they are working to provide their members with meaningful tools because they realize this is “good customer service.”  What’s very interesting is that empowering their members to act more like customers benefits all the stake holders. 

Over the past month, I have reviewed price transparency tools offered my some of the major health insurers including Aetna, Anthem Blue Cross Blue Shield, Cigna, Humana, Regence and United Healthcare.  The tools are designed for members of the health plans and attempt to deliver some price and quality transparency, to help members make informed choices.  It’s definitely a step in the right direction but there is a lot of room for improvement.    We are all pioneers in this area and as the transparency tools evolve, consumers can expect to see some innovative, decision-making tools to help them make informed choices – before visiting a provider. 

Minnesota residents have a new tool to help them comparison shop for health care services. Last week, the state of Minnesota launched the Cost Report tool on the Minnesota HealthScores website.  This new tool allows residents to compare prices for health care services and shows the lowest provider cost for a procedure, the highest provider cost, and the average cost per medical group for 103 common medical procedures from 110 providers across the state. This project was a collaborative effort with state health providers collecting the data from health insurance companies.

The ongoing health care debate has caused some heated emotions, disagreements, great discussions on very important issues, and plenty of misinformation. Unfortunately, the most important issue of all has gotten lost in all the noise. 

We all need to remember that the real crisis is what’s already happening.  Today, the average price for health insurance premiums is $13,000 a year.  If we do nothing about reforming our health care system, this amount will double over the next decade to $25,000 and many more Americans will be forced to join the uninsured.  This is a real crisis.

Many of the discussions about health care reform focus on the 47 million uninsured Americans who do not have health insurance.  But remember, health care reform is just as important to the majority of Americans who already have health insurance.  Doing nothing results in a crisis that we cannot afford. 

Here are the facts:

• Rising health care costs are crushing American companies – particularly small businesses
• In 1960 U.S. firms spent 1.2% of their payroll on health insurance.  In 2006, they spent almost 10%.
• Health care costs put U.S. firms at a disadvantage to foreign companies and health care costs destroy U.S. jobs
• Escalating health care cost have been passed on to the middle class in the form of higher prices for products/services and flat wages.  Money that would have gone to raises has instead been spent on health care premiums that have doubled over the past 9 years.
• Small businesses pay 18% more per worker for health care than large firms for the same benefits.  They pay more because they have a smaller risk pool and have to absorb higher broker fees and administrative costs per worker.
• Businesses that offer employees health insurance:
  • Only 49% of firms with 3-9 employees offered health plans in 2008
  • 78% of firms with 10-24 employees offered health plan in 2008
  • 99% of firms with 200+ employees offered health plans in 2008
• This year health care expenditures are expected to account for about 18% of the GDP. Without reform, that number is projected to rise to 28% in 2030, and to 34% in 2040.

We all need to make sure that health care reform gets started this year.

John Stossel’s article in ABC News suggests why health care costs are out of control.   In his article he asks us to think about what would happen if you had an insurance policy that paid for your groceries.  You wouldn’t care what things cost.  Why buy hamburger?  Just buy expensive steaks.  Why look for sales?  Why shop at the store across the street?  If the insurance company’s paying, who cares? 

People with consumer-driven health plans are motivated to find the best value before spending their own money.   They comparison shop, do their research, and might even negotiate the price of service before visiting a provider.  They care because they are spending their own money.

In an effort to keep health care costs down, Whole Foods management decided to offer its employees high-deductible health insurance.  With this plan, employees have an incentive to find out what provider offers the best value (price & quality).  If they are savvy consumers they can make their health care dollars go a lot further by spending wisely.   Health care costs at Whole Foods went way down because employees started asking “what things cost” before visiting a provider.  The employees like the plan so much they decided to keep it.  The employees now ask “how much will this cost?” because now it matters.  It’s their own money they are spending.   The Whole Foods experiment works because:

Facts:

1. When consumers spend their own money, they spend less because they care about what things cost.
2. When consumers shop around before spending money, costs go down.
3. When consumers make informed choices, health care costs go down.

The health care industry can learn something from the advertising industry.  The key to successful interactive campaigns is to delight and engage consumers so they want to participate.  This same rule applies to reforming the health care system.   We need to engage and delight consumers to get them to participate. 

Regence, a not-for-profit health insurer in the Northwest/Intermountain Region, has been a leader in transforming our health care system.  They have created an engaging, interactive presentation to kick off their launch of WhatsTheRealCost.org.  It’s a delightful presentation on transforming our health care system.  Also, be sure to check out the Regence award winning one-minute video, WhatsTheRealCost.org.

The CEO of Whole Foods Market has some interesting ideas on how to lower the cost of health care for everyone --without adding to the deficit.   John Mackey, the CEO at Whole Foods wrote an Op/Ed piece in the Wall Street Journal last week.  Some of his reform ideas are powerful, practical, obvious and definitely worth mentioning:

1.       Remove the legal obstacles that slow the creation of high-deductible health insurance plans and Health Savings Accounts (HSAs).  These plans have been adopted by more than 12 million consumers and all the recent research indicates these plans are not only successful in holding down costs, but consumer satisfaction is rising for CDHPs .  Read about consumer-driven health plans.

2.       Balance the tax laws so that employer-provided health insurance and individual health insurance have the same tax benefits.  Today employer health insurance benefits are fully tax deductible, but individual health insurance is not.

3.       Repeal all state laws which prevent insurance companies from competing across state lines.

4.       Repeal government mandates that determine what insurance companies must cover.

5.       Pass tort reform to end the damaging lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to consumers through much higher prices for health care.

6.       Make prices transparent and give consumers more freedom to pursue health care value. Provide meaningful tools to help consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down?

7.       Reform Medicare. Medicare is heading towards bankruptcy and we need reforms that create greater patient empowerment, choice and responsibility.

Whatever reforms are passed, it is essential that they be financially responsible, and give consumers the freedom to choose doctors and the health-care services that best suit our own unique set of lifestyle choices. We are all responsible for our own lives and our own health. We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health.

America's Health Insurance Plans (AHIP) just published a report that identifies physician out-of-network charges for 30 states.  The report provides a state-by-state snapshot of excessive charges billed by out-of-network physicians, and compares these charges to what Medicare would have paid for these exact same services.  This report demonstrates huge disparities in the cost of various medical services that were in some cases tenfold higher than Medicare reimbursements for the same service in the same area.

Here are some examples from the report, of the price disparities for common procedures. 

·         A patient in Illinois was charged $12,712 for cataract surgery.  Medicare pays $675 for the exact same procedure. 

·         In California, a patient was charged $20,120 for a knee operation that Medicare only pays $584 for. 

·         A New Jersey patient was charged $72,000 for a spinal fusion procedure that Medicare covers for only $1,629. 

What is obviously missing from this report is the insurer’s average contracted price for in-network providers. Wouldn’t it be remarkable to see how prices compare for a specific service side-by-side including: 

·         List price (the inflated charges)

·         Negotiated price (discounted price contracted with in-network providers)

·         Government CMS Medicare price (lowest contracted price)

Comparing provider health care prices across different health insurance plans for the exact same service is what we are trying to accomplish with the OutofPocket.com directory.  If you want to look up some of these prices, be sure to check out our directory. 

The best advice I can share with consumers regarding these “inflated” out of network prices – is to make sure you do your research.  If you are uninsured, or if you are insured looking for an out-of-network provider, make sure you don’t pay the inflated charges.  Instead you should do your research, understand what the “fair” contracted rates are for this service and know what Medicare reimburses for this service in your area.  Then you can confidently ask the provider for a discounted price.  On average, Medicare pays about 80 percent of what private insurers pay for the exact same service.  If you want to look-up what Medicare pays for specific services -- use the AMA CPT online tool.  If you want to find out what the average insurer reimburse for specific services --- use Healthcarebluebook’s tool.

If you are still confused, feel free to contact me and I’d be happy to walk you through these steps to help you become a more informed consumer.

Be sure to read the article that appeared in The New York Times, Survey Finds High Fees Common in Medicare Care that discusses this AHIP report data.

Imagine a reformed health care system where costs are clear, information is simply stated, procedures are openly and honestly evaluated.  Where participants share knowledge and information.  Where technology drives value.  Where all particpatants are informed, engaged and rewarded for smart choices and health behavior.   

This is how we need to reform our health care system.

Wondering how you can reduce your medical bill?  David Whelan’s recent article in Forbes.com, “How to Cut Your Doctor Bill,” describes real-life situations where savvy patients comparison shop to find the best value, and negotiate prices with their health care providers to get a discount.   

Comparison shopping can be tricky and you need to be persistent.  The good news is your effort and research can pay off. 

The Forbes article lists a few websites consumers can use to look up prices of procedure to help you negotiate a fair price. 

Healthcarebluebook.com

Changehealthcare.com

Outofpocket.com

Myhealthscore.com

If you are not successful in negotiating the price of services before visiting a provider, or have trouble negotiating your medical bill, you can hire a bill negotiation company. These companies typically charge a fee based on the percentage of savings achieved.

Myinsnet.com

Medicalcostadvocate.com

Billadvocates.com

As health care reform dominates the news, most consumers will benefit from remembering that there are things they can be doing today – before any meaningful reform occurs – to help drive down their health care expenditures.  Creating affordable health care has as much to do with consumers taking the time to educate themselves on purchases as it does on what Washington decides to do.

That is one of the reasons that HealthHarbor.com was created.   HealthHarbor is an online information source dedicated to helping people become smarter consumers of health care.  By offering dozens of pages of original content on money-saving techniques and using health coverage effectively, as well as providing online tools to help people make their health care dollar go further, HealthHarbor is excited to be one of the pioneers, along with Outofpocket.com, in helping drive education and price transparency to the industry.

While there are dozens of ways that health consumers can save on costs through increased education, HealthHarbor’s content is particularly useful in these three areas:

1.    Ensuring consumers understand how to be assertive and thoughtful clients of their health coverage.  Many people have health coverage, but when it comes time to use it they are in over their heads.  Having an uneducated consumer trying to work through issues with professionals employed by an insurer can create for very unbalanced discussions.  Arming people with the information to be intelligent about their coverage is critical in this environment.

2.    Helping people make good coverage purchase decisions.  Even if someone has insurance, it doesn’t mean they have the right coverage.  Sometimes people have policies that don’t cover their particular medical needs, and other times they are paying a $500 price tag for premiums when their medical needs could be better served by a hybrid plan that may cost half that.  Still other times, people are buying coverage that they don’t really need.  Given the amount of money that is spent on monthly premiums, the point of purchase decision is critical to managing your family health care budget.

3.    Making smarter decisions when seeking care.  Being able to make an educated financial decision week seeking medical care requires information, and that information is becoming more and more available thanks to sites like OutofPocket.com and HealthHarbor.com.  Whether someone is trying to figure out what a routine medical service will cost them, or determining where they can find affordable prescriptions, adding price transparency to the health care industry is critical and is fortunately happening thanks to innovative sites like these.

     Article by Heather Johnson, Healthharbor.com

Outofpocket.com is not a political blog, but it’s practically impossible these days to read any newspaper, listen to the news or turn on the radio without hearing about health care reform.  As informed consumers, it’s important to understand the complicated issues surrounding health care reform since it will affect everyone.  The more you understand the problems in our current system, the main points of disagreement, the proposals being presented, the industries that will lose/gain from an overhaul and what impact this will have on your own situation – the more you can make a difference.

In today’s Wall Street Journal, Janet Adamy, Health Care Reporter, wrote an outstanding article that explains the health care reform challenge by answering ten questions:

1.       What is the problem with health care?  Is it as bad as they say?

2.       Can Democrats and Republican agree on anything?

3.       What are the main points of disagreement?

4.       What would a public plan look like?

5.       Why is the total price of the overhaul so expensive, especially considering that it is designed to bring down costs?

6.       What are the most likely ways to pay for the overhaul?

7.       Which industries are most likely to lose, and which to gain, from any overhaul?

8.       I already have insurance through my employer – what happens to me?

9.       Politicians have tried for decades to push universal health insurance.  Why did they always fail before?  Why would this time be any different?

10.    What happens if the effort once again fails?

Ten Questions on the Health-Care Overhaul

The Effort to Change the System Enjoys More Support Than Past Attempts, but the Complications Are as Acute as Ever

By  JANET ADAMY

 It is crunch time for health care. Lawmakers who are trying to fundamentally remake one-sixth of the U.S. economy say this might be the most complicated legislation they have undertaken.

Here are some basics that everyone can grasp -- and probably ought to, because the health bill, if it passes, will affect almost everyone.

1. What is the problem with health care, anyway? Is it as bad as they say?

The problem, as advocates for change see it, boils down to two big areas: high costs and lack of coverage. For some households and employers, the cost of care already is out of reach, and many more will struggle to afford it if costs keep escalating. Medicare is eating up a bigger share of government spending, and a growing number of bankruptcies and home foreclosures are linked to medical expenses.

Even though the U.S. spends $2 trillion a year for health care, some 46 million people don't have health coverage. To be sure, that oft-cited number from the Census Bureau is somewhat misleading because it includes illegal immigrants, healthy young adults who don't think they need insurance and poor people who are eligible for Medicaid.

Still, as the recession wears on, the number of uninsured appears to be rising. One study, by the left-leaning Center for American Progress Action Fund, found that as many as 14,000 people are losing their health insurance every day because of job cuts. Families who have insurance pay an additional $1,000 a year in premiums to effectively subsidize all the people who receive care but don't pay for it, according to a separate study by the liberal group Families USA and actuarial consultancy Milliman Inc.

2. Can Democrats and Republicans agree on anything?

Actually, yes. There is broad support for changing the way hospitals and doctors are paid so that they are compensated for the quality of care they provide, not the quantity of procedures they do. Democrats and Republicans also back the idea of creating online marketplaces where consumers and small businesses can comparison-shop for plans.

Both parties want to bar insurance companies from denying coverage to people who are already sick. The insurers are willing to make that concession, as long as lawmakers also require most people to carry insurance, since that would force young, healthy people into the insurance system.

It amounts to a twin mandate -- one on insurers to sell policies, and another on Americans to buy them. Although there are pockets of Republican opposition to the latter idea, both have enough bipartisan support to pass. These steps alone would represent big changes to the status quo.

3. Where are the main points of disagreement?

The sharpest divide between the two parties: Whether to create a government-run insurance plan (otherwise known as a "public plan") that would go up against private plans in online marketplaces. President Barack Obama says a public plan will keep private insurers honest. Republicans say it would give the government too much control over health care.

The other main battle, which doesn't break down as easily along party lines, is how to pay for a plan expected to cost at least $1 trillion over a decade. Many lawmakers think it makes sense to impose a tax on employer-provided health-care benefits, a perk that currently is tax-free.

Then they looked at the poll numbers. Many voters hate the idea of paying taxes on something that right now costs nothing. So Democrats have instead proposed raising taxes on the rich.

Congress also remains divided over whether to make employers (except really small ones) provide insurance. House Democrats propose that if companies don't offer insurance, they should contribute as much as 8% of their payroll spending toward helping workers buy insurance on their own. Republicans argue that companies will make up for it by cutting jobs and lowering wages.

4. What would a public plan look like?

The country already has a huge public plan -- Medicare, which covers the elderly and some other groups. It generally pays doctors and hospitals less than private insurers. Liberal Democrats would like to replicate it in the new marketplaces. They want the government directly to set premiums and services under the plan, perhaps with basic and premium options.

That isn't going to fly in this Congress, despite Democratic control of both chambers. Republicans are more opposed to having a government plan than Democrats are bent on having it. Conservatives figure the government would quickly drive private insurers out of business by undercutting them on price.

Two other scenarios have emerged as compromises. One is to hold off on creating the plan and instead impose heavy regulations on insurance companies aimed at making coverage accessible and affordable. If that doesn't work, then the government insurance plan would kick in after several years. The other idea is to create a batch of regional nonprofit insurance cooperatives to compete with private insurers. But many liberals consider that a far stretch from the original idea, since the government wouldn't run those plans.

One point that gets overlooked in the debate is that most people probably wouldn't even be eligible for the public plan. Only individuals without affordable employer-provided insurance and businesses that aren't big enough to buy reasonably priced plans on their own would qualify.

5. Why is the total price of the overhaul so expensive, especially considering that it is designed to bring down costs?

The cost mostly comes from giving people subsidies to buy insurance, and from expanding Medicaid, the federal-state insurance program for the poor, to cover more low-income Americans.

The theory is that once more Americans carry insurance, the entire health system will spend less money caring for them. Those people will have more access to care that prevents them from getting sick in the first place, and they would rely less on costly forms of treatment such as visiting the emergency room. But it could be years before that really reduces health costs, if it ever does.

President Obama often talks about more fundamental fixes for high costs, like paying for quality and blocking doctors from boosting their income with unnecessary tests. But Congress has limited power to change that.

6. What are the most likely ways to pay for the overhaul?

The White House has proposed about $950 billion in savings over 10 years to pay for the plan that include things like lower reimbursements to hospitals that treat Medicare patients.

The wealthy are a natural target. One proposal is limiting itemized tax deductions for families who earn more than $250,000 annually, a campaign idea of the president. House Democrats want to impose a surtax on wealthy individuals. Less likely are new taxes on soda and sugary drinks, which many lawmakers see as politically unpopular.

7. Which industries are most likely to lose, and which to gain, from any overhaul?

Perhaps no industry stands to gain more from the changes than health insurers, who would get tens of millions of new customers because Americans would be required by law to carry health insurance. Pharmaceutical companies would sell more prescription drugs because more people would have coverage for drugs and access to doctors who prescribe them. Hospitals and doctors wouldn't have to provide as much free care as they do now.

But each of those groups also could take hits, particularly the health insurers if some kind of public option drives down their profit margins. The big losers would be retailers, restaurants and other businesses with low-income workers who provide little or no health insurance, since they would be forced to start paying for it.

Businesses that are too small to afford health insurance but not tiny enough to fall below the proposed $250,000 annual payroll cutoff that exempts them from providing coverage also could get squeezed by the legislation.

8. I already have insurance through my job - what happens to me?

Not too much at first. A handful of tax-free perks for the insured could get axed. For instance, lawmakers want to end the practice of allowing people to put money into so-called flexible spending accounts, which allow them to pay for everything from cosmetic dental work to surgery with tax-free dollars.

Longer term, a lot could change. For instance, your employer could drop coverage, preferring to pay the penalty for doing so and deflecting employees to Uncle Sam's plan. Cost-cutting efforts in other parts of the system could eventually affect employer-provided plans as well.

9. Politicians have tried for decades to push universal health insurance. Why did they always fail before? Why would this time be any different?

These efforts stretch back to the 1930s, when President Franklin Roosevelt proposed creating a compulsory health-insurance system for all Americans, run by the states. Doctors, worried it would hurt their pay, helped kill the measure, buoyed by opposition from business and labor groups. Other major health overhaul attempts, most notably President Bill Clinton's 1993-94 effort, died because powerful interest groups feared their members would either earn less or have to pay more under the new system.

What is different now is that major health and other interest groups are on board with the idea. Many insurers, hospitals, doctors and drug companies agree that the system is so flawed it isn't sustainable, and they see a bill as a chance to push through improvements like adopting electronic health records, broadening the use of data to show which treatments work best and reducing the threat of malpractice lawsuits. Employers see it as a chance to curb the sharply rising price of covering their workers. Almost no one is arguing that the system is fine the way it is. Mr. Obama's high popularity, coupled with wide Democratic margins in Congress, also grease the wheels for passing a bill.

10. What happens if the effort once again fails?

Lawmakers would likely scale back their plans and try to at least pass a measure that partially expands insurance coverage or helps stall the increase in health costs. But so many parts of the legislation are intertwined that they will be less effective, and perhaps impossible to achieve, if done piecemeal. Lawmakers might be reluctant to take up the controversial legislation ahead of congressional elections next year. So it would probably be several years before lawmakers tried again.

As an accomplished triathlete, I have been honored to be involved in helping coach women train and prepare for their first triathlon. The women I train are in their 20s through 60s, and after an 8-week training program, everyone successfully completed the TrekWomen’s triathlon this past Sunday in Wisconsin. It’s a truly rewarding experience for me to see all these women reach their goal of finishing their first triathlon. Everyone established their individual fitness goals, whether it was is to exercise on a daily basis, to increase their level of fitness, to eat healthier in order to perform better, to feel better, get fit and to lose weight. After finishing their first triathlon, many of the participants now have “triathlon fever” and plan to do another triathlon next year to improve their time.

What's remarkable is that these women are actively participating in wellness, improving their health and the quality of their lives. As these women continue to maintain healthy lives, down the road, I am certain that health care expenses will be lower for these women due to their focus on wellness and improving their health.

Congrats to all the women athletes and I look forward to training with next year’s team!

New hope for damaged knees.  After more than twenty years of competitive running, the cartilage on my knee was destroyed and I could no longer run.  My determination to run again and to continue being active for many more years to come led me to Dr. Brian Cole, head of the Cartilage Restoration Center at Rush University Medical Center.  Dr. Cole has been performing the osteochondral allograft transplant procedure on athletes for 12 years and his outcomes are very successful.   This type of procedure offers an alternative to total joint replacement and enables patients to maintain an active life 12 months after the surgery.

In November 2008, a donor match was identified and I had elective knee surgery to repair my damaged cartilage.  Prior to the surgery, this procedure was preapproved by my health insurance plan and I was fortunate enough to have very good insurance to help cover most of the costs of this expensive procedure.  I have a high deductible health plan, along with a health savings account so I am required to pay $5,000 out-of-pocket before my insurance kicks in.  I knew this much going into surgery, but had no idea what my specific out-of-pocket costs were going to be after the surgery. 

During my preparation for surgery and my long rehab following surgery, I maintained a list of all my out of pocket expenses related to this procedure.   Below is a breakdown of these expenses including the provider’s list price, insurance plan’s contracted price, and my out-of-pocket expense.

(1)    Total LIST price                                           $ 71,138.21

(2)    Total INSURANCE CONTRACTED price      $ 20,187.03

(3)    My total OUT-OF-POCKET expenses          $  7,093.87

Price variations for health care services, even within the same market and provider network, may be thousands of dollars. So knowing what the fair price is can help consumers better manage the cost of their health care.

Healthcarebluebook.com is easy to use. Type in the kind of healthcare service needed plus a zip code and the Healthcare Blue Book pulls up the fair price based on fees paid by Preferred Provider Organizations (PPO) to doctors for services in that market. Consumers can then use the suggested Healthcare Blue Book price to discuss prices for services and treatments with their doctors and other health care providers.

Health care costs are expected to continue climbing throughout 2009. The National Survey of Employer-Sponsored Health Plans conducted by Mercer, reported that in 2008, PPO deductibles doubled at many companies from $500 to $1,000.

Americans do price/value comparisons for their homes, cars, vacations and the majority of goods and services they buy. “Why not health care?”  asks Dr. Jeff Rice, Healthcarebluebook.com founder.  The former CEO of CareSteps, Rice has a long history in the health care industry of developing innovative products for consumers.

“Patients should not assume that a high price means good quality,” says Rice.  “It is up to patients to ask about the cost of services and to learn about the quality of their providers.  Doctors and hospitals that charge a fair price, often provide the best value.  Healthcarebluebook.com can help consumers figure out what they should pay.”

Consumers need better education about the health care services they purchase and 2009 is a good year for them to start. Using www.Healthcarebluebook.com can help people learn how to obtain fair prices for their health care.

For additional information, contact  Dr. Jeff Rice, jrice@healthcarebluebook.com

Ten Ways Consumer Driven Health Care is a Proven Success

By Greg Scandlen

A revolution is underway in American health care, but you won’t read about it newspapers or see it on TV.

The revolution involves a growing number of Americans who are reclaiming their right to buy health care goods and services that they decide are beneficial. They are shrugging off the heavy hand of regulation by Washington politicians, insurance companies, pharmaceutical firms, hospitals, medical organizations, federal agencies, and giant employers, all of whom are fighting over who gets what of the trillions of dollars Americans spend each year on health care.

This is a Consumer Driven Health Care Revolution.

The revolution got underway six years ago, when consumers were able to redirect some of the health care money they earned into new deposits such as health savings accounts, health reimbursement arrangements, flexible spending accounts, and insurance policies with low premiums and high deductibles.

Empowered by control over their own money, consumers increasingly demanded the information needed to make good decisions about their health care. Once they possessed both the money and information, consumers forced changes in the delivery of services to make health care more efficient, more accountable, more convenient, and certainly more affordable.

Instead of paying an insurance company for maximum coverage they were unlikely to use, increasing numbers of consumers decided to buy less-expensive insurance for expensive services and products while banking the monetary difference to pay for services only when they needed them. Employers liked the revolution, too, because it left them more money with which to raise wages or fund a savings account.

Recent studies find that consumer driven health care plans are being used by 20 percent of the privately insured population.1 This is an astonishing rate of growth for an approach that began just six years ago.

But these insurance plans are only the beginning. The important thing is what happens after consumers have more control. Already, consumer driven plans are having a profound effect on the health care system.

The growing use of generic drugs, retail clinics, medical tourism, concierge medicine, physician owned specialty hospitals, and the reduction in the use of hospital emergency rooms may all be attributed to the growth of consumer driven health care.

Even the current recession is highlighting a new era of consumerism in health care. Health care spending usually grows in times of recession because workers who fear losing their jobs—and their insurance coverage—try to maximize their use of services before they get laid off. But during this recession, consumers are deciding how best to spend their own money, and are choosing to preserve their funds instead of spending them on unnecessary health care services. As a result, spending on prescription drugs dropped by 2 percent in the year ended Sept. 30, 2008, physician office visits are down 1.5 percent, and hospital admissions are down by 2 percent.

The Consumer Driven Health Care Revolution has only just begun, and here’s why it will grow:

1. Consumer Driven Care dramatically reduces premiums
2. Consumer Driven Care reduces the rate of increase from year to year
3. Consumers can use the savings to fund their accounts
4. The money consumers put in the account is triply tax advantaged, saving even more
5. Consumer Driven Care is good for the sick as well as the healthy
6. Consumer Driven Care is good for the poor as well as the wealthy
7. Consumers may choose their own provider and their preferred service
8. People with Consumer Driven Plans change their behavior to get more value out of the system and become better informed about their treatments and costs
9. Consumer Driven Care is taking over the insurance market
10. People with Consumer Driven Care are increasingly satisfied with their coverage

Click here to read the complete article

Greg Scandlen is the director of Consumers for Health Care Choices, a project of The Heartland Institute. He may be contacted at gscandlen@heartland.org.

In order for consumers to make informed choices, we need tools that provide accurate price and quality information.  Unfortunately, our current health care system lacks transparency and waiting around for health insurers or health care providers to solve this problem could take a long time.  In the meantime, we are starting to see some new tools that consumers can use to look-up price estimates for health care services and get an idea of a fair price for service.  The tools are not perfect, but it’s better than not knowing at all how much things cost.  In fact, whether you are insured or uninsured, it would be helpful to know up front what your out-of-pocket expenses will be --- before you visit the doctor!

So the next time you need to have an MRI, x-ray, mammogram, CT scan, colonoscopy, dental exam, eye exam, lab test or office visit, ---be sure to take a few minutes to visit some of these free websites so you have a better idea of fair prices for specific services.  You might even be able to use this information to negotiate a discount with your health care provider.

Tools to look-up prices for health care services

Healthcare Blue Book

Leslie’s List

MainStreetMedica

NewChoice Health

OutofPocket

Spectrum Health

USA HealthCare Costs

Vimo

An article in CNNMoney, Biggest Medical Mystery: The Bill, discusses obstacles and price transparency.

 My current auto insurance policy offers me discounts on my premium for: 

-       Save driver (accident free)    

-       Multi-car policy                     

-       Good grades for teenage drivers in the household

-       Anti-theft device installed in vehicle(s)

-       Air bags installed in vehicle(s)

What if health insurance policies started offering premium discounts for behaviors like:

-       Taking a health risk assessment

-       Exercising on a daily basis

-       Eating healthy

-       Reducing weight

-       Stop smoking

-       Lowering blood pressure

-       Lowering cholesterol

-       Monitoring and follow-up on chronic diseases 

As more consumers take personal responsibility for their own health, these kinds of tactics will become more common.