Category Archives: Healthcare Reform

ZDoggMD Ranting About Insurance Company Games and Lack of Price Transparency

I was glad to see this. The concept covered is one reason I’ve been working on my healthcare reform manifesto for months. Price transparency is a key component of fair and sane healthcare reform. Z  has a huge audience compared to mine.

Insurance Companies are to Blame for Surprise Medical Bills

From Townhall.com:

Private health insurance companies routinely deny legitimate medical claims. Most denied claims for doctors are for in-network (so-called “contracted”) services. In these cases, patients never see a bill, and the doctor must separately try to resolve the dispute with the insurance company. For out-of-network (“non-contracted”) claims, however, the doctor is required by law to send the patient a bill while trying to resolve the billing dispute. Most of these denied claims are for legitimate emergency services. They are simply routine claims, not exorbitant or outlier charges as some folks lobbying for the insurance industry would have you believe. Don’t take my word for it. Consider recent comments from former health insurance executive Wendell Potter, who spent more than 20 years working for the giant health insurance companies Humana and Cigna. He explains the real cause of surprise medical bills. According to Potter, “It’s because of a scheme quietly hatched by insurance companies like the ones I worked at, where they decide which hospitals and doctors to include in their networks. They make these choices based largely on what will maximize profits and minimize care.”

Source: Insurance Companies are to Blame for Surprise Medical Bills

Steve Parker, M.D.

PS: Avoid the medical-industrial complex by getting and staying as healthy as possible. Let me help.

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.

 

QOTD: David Burge and Kathy Shaidle On Manifestos

Modern Unabomber?

David Burge (@iowahawkblog) on Twitter, June 27, 2020:
By and large, anyone who publishes a “manifesto” should be hospitalized for psychiatric evaluation

To which Kathy Shaidle commented:

I’m in general agreement, because with very few exceptions, most “manifestos” are a contradiction in terms.

By definition, they are written to arouse outrage and action amongst the general population, but are more frequently just a record of someone talking to themselves. The Unabomber’s manifesto would never have been published if he hadn’t killed a bunch of people….

When I finish my U.S. healthcare reform white paper, I think I’ll call it a manifesto.

Despite $10,000 per person per year, U.S. still  not getting its money’s worth in healthcare

From UPI Jan. 31, 2020:

Despite spending far more on health care than other wealthy nations, the United States has the lowest life expectancy and the highest suicide rate, new research shows.

For the study, researchers at The Commonwealth Fund compared the United States with 10 other high-income nations in the Organization for Economic Cooperation and Development (OECD)—Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom—and with the average for all 36 OECD nations.

In 2018, the United States spent almost 17 percent of its gross domestic product (GDP) on healthcare. That’s more than any other high-income country and twice the overall OECD average. For example, New Zealand and Australia spent 9 percent of GDP on healthcare.

U.S. healthcare spending now tops $10,000 per person, and much of it is driven by private insurance costs such as premiums, according to The Commonwealth Fund report published online Jan. 30.

Source: U.S. health stats remain low despite trillions in healthcare spending – UPI.com

The numbers above are outdated. U.S. health care spending grew 4.6 percent in 2018, reaching $3.6 trillion or $11,172 per person.  As a share of the nation’s Gross Domestic Product, health spending accounted for 17.7 percent.

Click to learn what that money is spent on.

Steve Parker, M.D.

PS: Why not try to avoid healthcare spending by getting and staying as healthy as possible? Let me help now. And for less than $20.

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.

 

U.S. Medical Care Costs Rose 4.6% in 2019

…compared to 2.3% for all items in the Consumer Price Index.

Prescription drugs and hospital services each rose 3%. Physician services were up 1.4%.

Somethin’s gotta give.

 

PBMs: Are They Why Your Drug Cost So Much?

Don’t blame her

The American Prospect has an eye-opening article from 2017 that sheds light on pharmacy benefits managers (PBMs). Ever heard of them?

Author David Dayen starts with comments from pharmacy owner Frankil talking about how he determines how much money he makes on retail sale of a drug:

Like any retail outlet, Frankil purchases inventory from a wholesale distributor and sells it to customers at a small markup. But unlike butchers or hardware store owners, pharmacists have no idea how much money they’ll make on a sale until the moment they sell it. That’s because the customer’s co-pay doesn’t cover the cost of the drug. Instead, a byzantine reimbursement process determines Frankil’s fee.

“I get a prescription, type in the data, click send, and I’m told I’m getting a dollar or two,” Frankil says. The system resembles the pull of a slot machine: Sometimes you win and sometimes you lose. “Pharmacies sell prescriptions at significant losses,” he adds. “So what do I do? Fill the prescription and lose money, or don’t fill it and lose customers? These decisions happen every single day.”

Frankil’s troubles cannot be traced back to insurers or drug companies, the usual suspects that most people deem responsible for raising costs in the health-care system. He blames a collection of powerful corporations known as pharmacy benefit managers, or PBMs. If you have drug coverage as part of your health plan, you are likely to carry a card with the name of a PBM on it. These middlemen manage prescription drug benefits for health plans, contracting with drug manufacturers and pharmacies in a multi-sided market. Over the past 30 years, PBMs have evolved from paper-pushers to significant controllers of the drug pricing system, a black box understood by almost no one. Lack of transparency, unjustifiable fees, and massive market consolidations have made PBMs among the most profitable corporations you’ve never heard about.

***

In the case of PBMs, their desire for larger patient networks created incentives for their own consolidation, promoting their market dominance as a means to attract customers. Today’s “big three” PBMs—Express Scripts, CVS Caremark, and OptumRx, a division of large insurer UnitedHealth Group—control between 75 percent and 80 percent of the market, which translates into 180 million prescription drug customers. All three companies are listed in the top 22 of the Fortune 500, and as of 2013, a JPMorgan analyst estimated total PBM revenues at more than $250 billion.

***

PMBs initially came about as a means of saving costs. Why hasn’t that panned out?

The biggest reason experts cite is an information advantage in the complex pharmaceutical supply chain.

***

This lack of transparency enables PBMs to enjoy multiple hidden revenue streams from every other player. “It’s OK to have intermediaries, we have Visa,” says David Balto, an antitrust litigator and former top official with the Federal Trade Commission. “But these companies make a fabulous amount of money, even though they’re not buying the drug, not producing the drug, not putting themselves at risk.”

The PBM industry is rife with conflicts of interest and kickbacks. For example, PBMs secure rebates from drug companies as a condition of putting their products on the formulary, the list of reimbursable drugs for their network. However, they are under no obligation to disclose those rebates to health plans, or pass them along. Sometimes PBMs call them something other than rebates, using semantics to hold onto the cash. Health plans have no way to obtain drug-by-drug cost information to know if they’re getting the full discount.

***

It’s a long article and I confess I haven’t read the whole thing yet. I’ve read enough to rile up my sense of indignation! Pharmaceutical companies and health insurers don’t seem too upset. Because any costs associated with these third-party shenanigans is simply passed on to the consumer—that’s you—in higher insurance premiums, deductibles, and co-pays.

Steve Parker, M.D.

PS: Reduce your needs for drugs with a healthy diet and lifestyle. I can help.

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.

 

 

 

25% of U.S. Healthcare Dollars are Wasted

…according to an article at JAMA Network.

Let’s face it, there’s always going to be some waste. The authors of the study at hand figure that, whatever the dollar amount of waste is, we can reduce it by 1/4. Which could be $250 billion.

That diastolic number (91) is too high

A prior study indicated that 30% of healthcare spending may be considered waste. Is that still valid?

Researchers reviewed the pertinent literature from January 2012 to May 2019 focused on the 6 previously identified “waste domains”:

  1. failure of care delivery
  2. failure of care coordination
  3. overt-reatment or low-value care
  4. pricing failure
  5. fraud and abuse
  6. administrative complexity

Waste-related costs were converted to 2019 dollars.

From the abstract:

Findings

The review yielded 71 estimates from 54 unique peer-reviewed publications, government-based reports, and reports from the gray literature. Computations yielded the following estimated ranges of total annual cost of waste: failure of care delivery, $102.4 billion to $165.7 billion; failure of care coordination, $27.2 billion to $78.2 billion; overtreatment or low-value care, $75.7 billion to $101.2 billion; pricing failure, $230.7 billion to $240.5 billion; fraud and abuse, $58.5 billion to $83.9 billion; and administrative complexity, $265.6 billion. The estimated annual savings from measures to eliminate waste were as follows: failure of care delivery, $44.4 billion to $93.3 billion; failure of care coordination, $29.6 billion to $38.2 billion; overtreatment or low-value care, $12.8 billion to $28.6 billion; pricing failure, $81.4 billion to $91.2 billion; and fraud and abuse, $22.8 billion to $30.8 billion. No studies were identified that focused on interventions targeting administrative complexity. The estimated total annual costs of waste were $760 billion to $935 billion and savings from interventions that address waste were $191 billion to $282 billion.

Conclusions and Relevance 

In this review based on 6 previously identified domains of health care waste, the estimated cost of waste in the US health care system ranged from $760 billion to $935 billion, accounting for approximately 25% of total health care spending, and the projected potential savings from interventions that reduce waste, excluding savings from administrative complexity, ranged from $191 billion to $282 billion, representing a potential 25% reduction in the total cost of waste. Implementation of effective measures to eliminate waste represents an opportunity reduce the continued increases in US health care expenditures.

Source: Waste in the US Health Care System: Estimated Costs and Potential for Savings | Health Care Policy | JAMA | JAMA Network

Here’a radical idea. Why not stay out of the healthcare system as much as possible by getting and staying as healthy as possible? I have few ideas how…

Steve Parker, M.D.

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.

 

Why Is Healthcare So Expensive in the U.S.?

U.S. healthcare needs to be resuscitated

The U.S. has a presidential and other federal elections later this year. So we’ll be hearing more talk about healthcare reform. Mostly talk, not much action. Healthcare is an issue because it soaks up 18% of GDP (Gross Domestic Product). Many of us think that’s way too much and we can’t afford it anymore. Most other fully developed Western nations spend 9–11% of GDP on healthcare. Are we in the U.S. getting our money’s worth? Probably not, if you look at things like longevity, infant mortality rates, and overall disease burden.

When I aim to cure a disease, it helps immensely if I know the cause of the disease. That determines the treatment plan. If we want to fix over-spending on healthcare, we need to know the causes. With the right treatment plan, we might get healthcare costs down to 5% of GDP.

Here are the causes of overly-expensive healthcare:

  • Lack of price transparency
  • Third-party payer between patient and provider (they must be paid). Third party may not care about cost; just pass it on via premiums, or insulate themselves via high deductibles.
  • Defensive Medicine: excessive testing and consultations, malpractice insurance premiums, time away from patient care
  • Excessive regulation
  • Government essentially mandates Emergency Department care regardless of ability to pay
  • Excessive administrative costs (bureaucracy) of a byzantine system: providers’ office, healthcare insurance, hospital administration, regulators
  • Lobbying protects insurers, doctors, hospitals, Big Pharma at the expense of consumers
  • Low or no deductibles (no skin in the game)
  • Little incentive for patient to get or stay healthy
  • Government and insurers pay lousy docs the same fee as good doctors, so no incentive for great care or innovation. If you want to improve healthcare, you must financially reward competent and successful competitors. 
  • Providers are incentivized to provide services: provide more services, earn more pay
  • Greed
  • Insurance mandates
  • Inadequate competition among providers
  • Un-enforced anti-trust and consumer protection laws 
  • Excessive drug costs
  • Over-utilization of specialist care instead of primary care
  • Laws prevent importation of drugs by patients or providers from cheaper markets
  • Insurance companies prohibited from selling across state lines?
  • Pharmacy Benefits Management Co’s?
  • Insurance pays for too much, instead of only catastrophic care?
  • Waste and fraud?
  • Monopolies or near-monopolies (e.g., dominant hospital systems, insurance companies)?
  • Government fee-setting (Medicare and Medicaid)

If I’ve missed anything, please leave it in a comment below or email me at steveparkermd[at]gmail[dot]com.

Steve Parker, M.D.

PS: Below are some interesting links I found while researching this post.

From Investopedia in 2019:

“Even with all this money being spent on healthcare, the World Health Organization ranked the U.S. 37th in healthcare systems, and The Commonwealth Fund placed the U.S. last among the top 11 industrialized countries in overall healthcare.”

 From CNBC.com March 2018:

“The real difference between the American health care system and systems abroad is pricing.”

From JAMA Network March 2018:

“The United States spent approximately twice as much as other high-income countries on medical care, yet utilization rates in the United States were largely similar to those in other nations. Prices of labor and goods, including pharmaceuticals, and administrative costs appeared to be the major drivers of the difference in overall cost between the United States and other high-income countries.”

Yale Insights 2016 report focusing on hospitals:

“This study tells us that insurance premiums are so high because healthcare provider prices are incredibly high. The way to rein in the cost of healthcare services is by targeting the massive variation in providers’ prices. We can do that by making prices more transparent, making these markets more dynamic, and really blunting the monopoly power that a lot of large healthcare providers have, which has allowed them to raise prices.” Interviewee says the hospital industry is 8% of GDP.

PPS: Why not do everything you can to get and stay healthy, hopefully keeping you out of the Medical-Industrial Complex? If you need weight loss and exercise, I can help…

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.

 

Bureaucracy Accounts for 1/3 of Healthcare Costs in U.S.

 

One of thousands of billing clerks

Sure, you’re gonna have some bureaucracy, but one-third of total cost? Ridiculous!

From Reuters:

U.S. insurers and providers spent more than $800 billion in 2017 on administration, or nearly $2,500 per person – more than four times the per-capita administrative costs in Canada’s single-payer system, a new study finds.

Over one third of all healthcare costs in the U.S. were due to insurance company overhead and provider time spent on billing, versus about 17% spent on administration in Canada, researchers reported in Annals of Internal Medicine.

Cutting U.S. administrative costs to the $550 per capita (in 2017 U.S. dollars) level in Canada could save more than $600 billion, the researchers say.

Source: More than a third of U.S. healthcare costs go to bureaucracy – Reuters

The U.S. can slash healthcare costs 75% with two fundamental changes 

 

View from first part of the Romero Canyn trail near Tucson, AZ

From Sean Masaki Flynn at Market Watch:

As the Democratic presidential candidates argue about “Medicare for All” versus a “public option,” two simple policy changes could slash U.S. health-care costs by 75% while increasing access and improving the quality of care.

These policies have been proven to work by ingenious companies like Whole Foods and innovative governments like the state of Indiana and Singapore. If they were rolled out nationally, the United States would save $2.4 trillion per year across individuals, businesses, and the government.The first policy—price tags—is a necessary prerequisite for competition and efficiency. Under our current system, it’s nearly impossible for people with health insurance to find out in advance what anything covered by their insurance will end up costing. Patients have no way to comparison shop for procedures covered by insurance, and providers are under little pressure to lower costs.

The second money-saving policy links health insurance (with an annual  deductible) to a health saving account (HSA).

Look, people. We gotta do something. There’s no way that healthcare in the U.S. should devour almost 20% of Gross Domestic Product. We can get it down to 5%. I know how.

Source: The U.S. can slash health-care costs 75% with 2 fundamental changes — and without ‘Medicare for All’ – MarketWatch

Steve Parker, M.D.

PS: Reduce your need for healthcare via diet and exercise!

Steve Parker MD, Advanced Mediterranean Diet

Click the pic to purchase at Amazon.com. E-book versions also available at Smashwords. com.