Save money on your health care by going to Europe

Orthopedic Surgery is Cheaper in Belgium, a country with “Socialized Medicine” than the USA

Kudos to the Seattle Times for outing the medical device supply mafia in their August 5^th story on a patient who was able to save money for his hip replacement by going to a European country with a national health care system. And low and behold, this story was front page news for today’s New York Times.[1] Here are the facts, the federal government, through the CMS or Centers for Medicare and Medicaid pay for most of the hip replacements in the United States. This is a multi-billion dollar industry which generates huge profits for a few companies in Indiana. How can a device that costs $350 to produce be sold for $3,000 to $4,000 in the U.S. market? The answer is, because we allow it. Medical device manufacturers, including cardiac devices and others are all guilty of price gouging in this country, because as a people we have not demanded that our government funded health care plans pay a reasonable cost (say cost plus a percentage) for products and services purchased for enrollees.

Price Gouging Medicare

Americans should be outraged that someone can go to Belgium, pick up some luxurious chocolate (sorry Hershey’s no comparison), spend more than a week in an inpatient facility and spend only $16,000 versus $60,000 or 63% less than the same procedure and the same hip device would have cost in the United States. Of course in the states this total bill also includes layers of mark-ups and marketing, including hospitals, and clinicians, but in this case, the surgeons are the least guilty. There is a wide variation in the hospital charges for a hip transplant across the United States. Why do we allow this gouging of our federal coffers? The answer is simple, political lobbyists who spend all day every day greasing the skids in the beltway. And this matter was made even worse with the “super pacs” which allow the ubber rich to contribute unlimited amounts to political campaigns. And who might some of these super rich people be, well, as it turns out, all three executives of the artificial hip makers each earn eight million dollars a year. They are paid this handsomely to make money for their shareholders, not to deliver the most affordable health care for device users. Top executives of these for-profit companies are paid based on short term shareholder returns and they have little incentive to lower the price of their devices. In Europe, executives do not receive these ultra compensation packages and thus do not have perverse anti-consumer incentives to over charge their countrymen for products.

Pack Your Bags

In my previous experience researching ways to reduce the cost of cardiac devices I discovered those suppliers have a black box, crash tested cartel around their pricing of devices as well. All of this is geared to keep competitors of lower-priced devices out of the picture and profits high for the few. None of this means you are getting better health care, just more expensive health care, as the entrepreneurial health care purchaser, formerly from Washington State figured out. If the government is unwilling to use its bully pulpit to negotiate with medical device suppliers for lower prices for Medicare and Medicaid, then at least have CMS approve the reimbursement of procedures performed at International Joint Commission approved facilities off shore. Clearly, if it is less expensive for our citizens to go outside the country for health care, Medicare and Congress need to address this inequity.

Health Care Reforms Attempting to Address the Concern

There is a faint glimmer of hope in this tunnel, with the launch of PCORI, or Patient Centered Outcomes Research Institute, under the health care reforms in 2010. PCORI is a federal agency that was created to look at system-wide health care inputs and data to figure out how to cut costs and improve patient outcomes for the country, namely Medicare and other federally funded programs.[2] The Patient Protection and Affordable Care Act initiated a sixty-day payment delay for medical device suppliers, so that Medicare can analyze abusive practices, which is needed. Additionally, the reform mandates added a 2.3% tax on medical devices to fund some of the PPACA mandates, like health care subsidies to buy insurance. Of course the medical device industry is trying to get that repealed.

 The current free-for-all cartel environment of charging as much as you can to the U.S. health care system and only offering discounts to foreign governments who use the same devices has to stop. Since I see no effort on the part of the free market in this country to lower prices for medical devices or more effectively negotiating device payments by CMS (your government and the largest health care purchaser in the nation), I say it’s time to pack your bags.

Take Action

For Americans who want to learn more about accessing health care abroad, go to Chapter 10 of Unraveling U.S. Health Care and learn how to find a safe facility for your surgery abroad, whether it is in Europe, Latin America, or Asia.

http://www.amazon.com/books/dp/1442222972

And this is the health policy maven signing off.

This article was written by Roberta E. Winter, an independent health care consultant and journalist and author of a guidebook on the U.S. health care system. Feel free to share this article virally.

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[1] http://mobile.seattletimes.com/story/today/2021534364/track-.-.-./

[2] http://www.pcori.org/

Hold the Phone an Understandable Book About Resourcing Health Care

For all of the grousing about health care, reforms or not, we still need to figure out how to resource our needs in the bifurcated U.S. delivery system and to that end, I wrote Unraveling U.S. Health Care-A Personal Guide, for the average Joe and Joanne. This easy to read guidebook for the U.S. health care system and some global centers for health care, is available on Amazon and elsewhere now.
http://www.amazon.com/books/dp/1442222972
https://rowman.com/ISBN/9781442222977

I will be presenting material from the book on these dates:
August 5th-6:00PM-Bremerton Public Library
August 22nd-5:00PM-Book Release Event-La Toscanella
September 4th-7:00PM-University Book Store
October 15th-6:00PM-Seattle Public Library Main Branch

And into the deep we swim-working on my strokes.

Author-Roberta E. Winter AKA the healthpolicymaven

Hospital Billing and the Uninsured-Class Action Lawsuit

Hospital Overcharging-Where the Rubber Meets the Courtroom

In a landmark class action lawsuit, Seattle based Swedish Hospital, now part of the Providence Hospital Group is being sued for charging an uninsured Issaquah man who visited the emergency room much more than what it charged privately insured patients or those covered on government health insurance programs. Though this disparity in hospital billing phenomenon is not new, what is raising the level of accountability is the class action lawsuit, because this will allow the courts to examine the billing of all uninsured patients for all seven of Swedish Hospital’s emergency departments. Though class action lawsuits often end in relatively small settlements for the plaintiffs in the suit, they are big money for the attorneys, at least those with the cojones to see them through to the end.

Lifting the Veil on Hospital Billing

 Basically here is how hospital billing works, there are different reimbursement levels for services for different contracts, including the various insurers, as well as Medicare, and Medicaid. The government plans of course, by virtue of their bully pulpit actually pay the least for services and private insurers pay more of the reduced gross hospital charges, per patient. As in the Puget Sound Business Journal Article[1], the uninsured person was charge $10,000 for the same services(found in legal discovery) for which the insurance company contracts paid $3,500.

Why charge the patient without health insurance more than the insured person? The answer is two-fold, first there is no underlying contract to secure payment for the hospital, so the facility takes on the risk(as required by the government under Emergency Medical Treatment Act) of providing potentially costly services. Secondly, often the uninsured person is not able to pay the normal fees for services, so there are charitable discounts or write offs for this patient demographic. Is this method of billing legal, yes, ethical, well that is where it gets to be a sticky wicket. The hospital can charge 100% of gross prices for services to anyone without insurance coverage, but it rarely gets that amount of money from the uninsured patients, so the hospital offers a charitable discount to entice the patient to pay the services, and then the hospital takes a charitable deduction for the unpaid portion of the gross charges. Though this may seem reasonable from an accounting standpoint, the hospital is able to take a deduction for gross charges it never expects to receive, because the gross charges are inherently designed to provide at least enough payment from the other payers, including Medicare, Medicaid, and private insurers to keep the facility solvent. Thus, in the case of an uninsured patient who actually pays his bill, even if it is paid at a higher rate than the hospital normally would receive for those services, the hospital  still deducts any portion of the unpaid gross charges  as  their charitable discount.  This  may even make the reimbursement from the uninsured patient better than from the other contracts, just not as consistent. So, is it fair that we allow hospitals to charge the uninsured patients more than what they get from patients with greater resources?

At various times when I have been uninsured and forced to access services at hospitals, I found quite a variance in the charitable care discount I was offered, and the billing practices of different facilities. One hospital required a 40% payment based on gross charges and the other wanted 60%.  If one hospital requires the patient to pay 60% of gross charges for services, this is greater reimbursement than most insurance contracts, and hence a very good deal for the hospital. This is also enhanced by the fact the hospital can claim the 40% as charitable care, assuring political fodder for future negotiations with state and federal regulators.This is yet another example of a health system failure in the United States, because of our bifurcated financing system, and social inequities. Of course it isn’t right that the uninsured are charged more than those with insurance plans, but it is legal, and hospitals develop their fee schedules based on a complex mix of patient demand, high marginal cost for services, and regulatory requirements. The class action lawsuit will be costly and in the end just add to the hospital fees, but it does shine a light on this inequity. One of the things we all could use is transparency in the prices of health care services in this country. Though we are making progress on patient safety outcomes and reporting, thanks in large part to the IOM’s report more than a decade ago, we still have a huge battle ahead to fully inform and empower health care consumers as they navigate the black box of the American health care system.

For more information on this hospital conundrum and how to negotiate with a hospital should you need services and lack health insurance(fifty million at last count), go to Chapter Nine of Unraveling U.S. Health Care-A Personal Guide, out this month by Rowman and Littlefield. https://rowman.com/ISBN/9781442222984

http://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972/ref=sr_1_1?s=books&ie=UTF8&qid=1372838849&sr=1-1

For practical advice on resourcing your health care, read more of what the healthpolicymaven has to say. This article was written by Roberta E. Winter, MHA, MPA, someone who has negotiated insurance contracts for private employers, analyzed network reimbursement data for hospitals, and advocated for the empowerment of health care consumers.

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[1] http://www.bizjournals.com/seattle/news/2013/07/03/case-claiming-swedish-overcharges.html?page=2

Private Employer Health Plans and Implementation of the Public Health Services Act and ACA:DOL & Wellness

Private Employer Health Plans- and Implementation of the  Public Health Services Act and the Accountable Care Act Mandates in 2014

Department of Labor requirements mandate that employers who offer ERISA health and welfare plans must report plan data in an annual Form 5500, which includes plan enrollment, funding, and other information. Form 5500 filings are required for pension and health and welfare plans. Generally employers who have 100 or more employees in their health plan must report, but self-funded plans with fewer participants must also report. And some other types of benefit programs, like Section 125, 127, or  129 flexible benefit plans may also require Form 5500 reporting, depending on the benefit program.  This article uses information from Form 5500 filing data to provide a profile of private employer health plan status, with a view toward changes next year.[1]

Department of Labor Health & Welfare Plan Reporting

Department of Labor(DOL)  Form 5500 plan filings are typically reported ninety days after the end of the plan year, so generally between March 30, 2011 and September 30, 2011 for the 2010 plan years. The 2011 fiscal year 5500 reports were not due until as late as the fourth quarter of 2012, and hence not yet available as of this publishing date. The DOL indicates that 41% of private employers with health and welfare plans reported  self insured plans under Form 5500. To be considered a self-insured plan the risk portion which funds the payment of health care services is separated from the administrative expenses of the plan. Another 4,000 employers had partially self funded plans, which are a cross between a fully insured and a self-insured plan. The remaining 25,000 employers reported traditionally insured health plans, like HMO’s.

ERISA or self-funded plans and  Affordable Care Act Mandates

The Affordable Care Act amends portions of the precursor, the Public Health Services Act of 2010 including section  715 (a) (1) of the Employee Retirement Income Security Act (ERISA) to require self-insured or ERISA plans to conform to certain health plan mandates.[2] These stipulations apply for plan years after January 2014:

1.       Waiting Period before an employee is enrolled on a health plan cannot exceed ninety days

2.       Employees who work 1,200 hours per year are considered full-time for purposes of qualifying for health plan participation

3.       Public Health Services Act Section 2708 provides guidance for determining when an employee working variable hours must meet the criteria for inclusion in the health plan, including the 13 month rule when a variable hour worker must be added to the plan[3]

4.       DOL Technical Release 2013-01 extends the compliance phase-in period for the Uniform Health Carrier External Review Process as mandated by Public Health Services Act section 2719 (b) (1) from January 1,2014 to January 1,2016 if the organizations comply with the temporary National Association of Insurance Commissioner Standards.

Final Regulations for Qualifying Health Plan Wellness Programs

The Public Health Services Act section 2705 mandated Wellness coverage for medical insurance plans effective January 1, 2014. On November 26, 2012, Department of Labor regulations for the Accountable Care Act wellness benefit mandates for health insurance plans were issued, including  amending HIPAA from 2006. Wellness plans may include any of the following components:

1.       Cost of membership in a fitness center

2.       Diagnostic testing which reward participation and do not punish participants for their outcomes

3.       Monthly no-cost health education programs

4.       Health risk assessment

5.       Smoking aversion programs

6.       Rewards for health contingent wellness plans, such as logging miles per week, weight loss, etc.

For more information on the regulations for the wellness plan mandates please feel free to read all 123 pages of the federal regulations.[4]  This article has provided employers with some crib notes on the pending 2014 health care reform mandates, but for more information, read Unraveling U.S. Health Care-A Personal Guide, available July 14^th on Amazon or pre-order now from Rowman and Littlefield.

http://www.amazon.com/books/dp/1442222972

https://rowman.com/ISBN/9781442222984

 And this is the healthpolicymaven signing off. Feel free to share this article with others.

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[1] http://www.dol.gov/ebsa/pdf/ACA-ARC2013.pdf

[2] http://www.dol.gov/ebsa/pdf/90dayreg.pdf

[3] http://www.dol.gov/ebsa/pdf/90dayreg.pdf

[4] http://www.ofr.gov/OFRUpload/OFRData/2013-12916_PI.pdf

Your Health Care System At Work-A Primary Care Conundrum

Your Health Care System At Work

Today, at 9:00AM I received a call from the school nurse indicating my sixteen year old son was in her office with a very low heart rate (in the 40’s). This in and of itself was not that distressing to me since my resting heart rate was 52 in my twenties,  and it is a family trait. However, between the time I received her call and attempted to contact my son’s primary care provider, I received another call indicating that his heart rate was so erratic they had called 911. The triage system then required that he be evaluated by the fire department paramedic and transported to the local emergency department. Once there, he was admitted and then evaluated with X-rays and other diagnostic equipment. In the meantime, I had called my primary care provider at Washington’s Community Health Plan three times, was on hold for 15 minutes, and been patched through a “call center,” all the while never having spoken with a clinician. So, the delivery of “primary care” to my son was handled by non-primary clinicians, because the primary care provider was not available.

This scenario illustrates one of the problems in our health care system, which is we have a shortage of primary care clinicians.  It is important to note this reflects a dearth of doctors who are willing to work within the basic pediatric reimbursement level, so the patients are forced to pursue other health care options, AKA the emergency department of your local hospital. This method of treatment is of course expensive and abhorred by health care policy analysts, but when you do a root-cause analysis, this pattern is informed by the lack of treatment options for basic health care in the USA.

This scenario happened in Washington State, which is fairly well off financially, and it concerned a child of a parent well versed with the health care system, so you can imagine how this plays out for ESL parents or others with less familiarity. In Washington, Virginia Mason Medical Center has excellent primary care and a  high level of patient safety, based on their Leapfrog Patient Safety evaluations, their Malcolm Baldridge Quality Award, and personal experience. However, the Virginia Mason system is not available to everyone, especially outside the Seattle area. So, where do the children of parents who are not covered under the luxurious private health care system or the realm of Medicare obtain their basic health care? More than likely they have deferred health care, which is to say very little. I can remember going through at least one Minnesota winter with untreated bronchitis, in a district with no school nurse, and with parents who were barely getting by.

  All of this relates to the lack of basic health care for children, a pattern that hasn’t changed in decades. Though the Children’s Health Insurance Plan (CHIP) which provides federal funding for children who are in the lower economic rung of our society ( which turns out to be quite a few at 7.6 million in 2010 alone) has indeed expanded health insurance coverage for acute care for children, has it increased access to primary care?

The problem with primary health care in the United States is it is so reimbursement driven that the patients experience many obstacles to obtaining timely care. In the case of my son, even with the ED intervention, the soonest the “health plan” could see him was several days away. And the Children’s Health Plan is one of the country’s most well-funded programs. Imagine how it is for adults.

Also, nationally children’s hospitals are the most well funded facilities in the country, monuments to our willingness to throw money at the most dramatic health care interventions, but lack of national motivation to provide accessible basic health care for the country. Do we need to have traumatic injuries or cancer to gain access to the best health care in American, it would seem so.

Anyway, the next time you don't approve your school bond issue, think about the lives that are at stake and this is the healthpolicymaven signing off.

This article was written by Roberta Winter, MHA, MPA, health care journalist and advocate.