Another View of American Health Care by Uwe Reinhardt, PhD

We published an article yesterday (February 14, 2015) which included a link to the Affordable Care Act. This was not meant to be an endorsement.  I have focused on the pitfalls, inadequacy of the ACA and, the outright sabotage of our health system, rather than improving and reducing cost.  Despite the stated goals of  HHS, and CMS to slow down health cost escalation and reduce cost, the ACA increases bureaucracy ad overhead.

Uwe Rheinhardt, PhD has been a whistleblower on the  U.S. health scene.  He minces no words. Does anyone listen, or this just wishful thinking ?  Healthcare is not is only area of study.  He has taught courses in economic theory and policy, accounting, and health economics and policy. Reinhardt's scholarly work has focused on economics and policy and includes more far-reaching topics such as cost-benefit analyses of the Lockheed L-1011 TriStar^[5] and the Space Shuttle.^{[citation needed]} He currently is the professor of Economics 100 and Economics 332 at Princeton University.

Research

Reinhardt's most recent^[when?] research has focused on hospital pricing, systems of health care around the world, Medicarereform, and health care spending. His work has appeared in Health Affairs, The New England Journal of Medicine, JAMA, and The British Medical Journal.^[6]

Administration[edit]

In the 2009 Frontline show "Sick in America", Reinhardt criticized the United States for spending 24% of every health care dollar on administration, and pointed out that Canada spends less than half of the U.S. amount and Taiwan spends significantly less than Canada.^[10] Reinhardt faulted the seeming U.S. preference for an unwieldy "mishmash of private insurance plans" for the inefficiency.^[10] He said if the U.S. could spend half as much on administration, it would save more than enough money to cover all the uninsured.

Real Health Care Reform Should be Affordable

The average Floridian pays way too much for health care. Roughly, 18 percent of your income goes towards your health care, on average. Now research from Harvard shows that health care spending will grow faster than the economy for at least the next 20 years.

The Affordable Care Act was supposed to prevent this, but it cannot. Rather than reform health care, the law merely expanded health insurance, a costly system that leaves patients behind and is largely responsible for spiraling costs.

What Geometry Can Teach Us


 Insurance Plan Reimbursement                                      Patient--Provider Payments    

Think back to your eighth-grade geometry class. You probably learned that the shortest path between two points is a straight line. You can apply this same logic to spending, where the cheapest option involves only two parties. In health care, the two parties that matter are you and your health care provider (your doctor, the pharmacy, etc.). You spend the least money when you pay them directly. onsider how health insurance works. Your money exchanges hands multiple times before it reaches the provider. It first goes to a third party (either the insurance company or the government, such as in Medicare and Medicaid). From there, those entities negotiate compensation schedules with providers and facilities. Both of these steps add bureaucratic and administrative costs to health care’s price tag. And although insurers attempt to lock in reasonable prices on your behalf, they often come up short.Why? Because they’re not spending their money: They’re spending yours. They thus have less of a financial incentive to get the best deal. Businesses and bureaucrats are no different from you and me; if you give them someone else’s money, they’re more likely to spend it foolishly.
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Now consider how health insurance works. Your money exchanges hands multiple times before it reaches the provider. It first goes to a third party (either the insurance company or the government, such as in Medicare and Medicaid). From there, those entities negotiate compensation schedules with providers and facilities. Both of these steps add bureaucratic and administrative costs to health care’s price tag. And although insurers attempt to lock in reasonable prices on your behalf, they often come up short.

Why? Because they’re not spending their money: They’re spending yours. They thus have less of a financial incentive to get the best deal. Businesses and bureaucrats are no different from you and me; if you give them someone else’s money, they’re more likely to spend it foolishly.

The same problem affects you once you have health insurance. After you pay your premiums, insurance gives you the illusion that you’re spending someone else’s money. The health insurance trap thus comes full circle, both insurers and consumers make it more expensive.

This raises the question: If not “Obamacare,” what else? Reformers should start by giving consumers the freedom to make their own health care choices. We need to return health insurance to the role of taking care of unpredictable, catastrophic health care expenses, and leave the great majority of everyday health care decisions in the hands of consumers.

We know this works. In the fields of cosmetic surgery,  lasik eye surgery , alternative medicine, and dentistry, the absence, or minimal presence, of government regulation or health insurance has driven prices down, and quality and service up. This has occured due to these procedures being elective, and requirement for out of pocket payment  by the patient.

Doctors can also refuse to take health insurance. More doctors and hospitals are choosing this path. One of my patients did this and saved $17,000 on a single procedure.

Lawmakers should encourage this kind of patient-focused innovation. Instead, they gave us “Obamacare,” which wraps health care in red tape and forces everyone to purchase health insurance. Real reform shouldn’t leave us with a higher bill.

Dr. Jeffrey Singer practices general surgery in Phoenix and is an adjunct scholar at the Cato Institute.

Health Affairs:FDA and Primary Care

Health Affairs briefing at the National Press Club in Washington, DC,

The clinical and economic virtues of provider consolidation have long been recognized by policy experts, but in recent years, research has shown that large provider organizations may use market power to obtain relatively high prices from payers without necessarily delivering superior quality. On May 19, Health Affairs will release a package of "Web First" papers examining questions regarding provider consolidation.

Follow live Tweets from the briefing at @HA_Events, and join in the conversation with #HA_ProviderConsolidation.  We invite you to a Health Affairs briefing at the National Press Club in Washington, DC, where the authors will present their findings and engage in a discussion with a panel of expert responders and the audience. The papers and the briefing are supported by a generous grant from The Commonwealth Fund.

WHEN:	Monday, May 19, 2014 9:00 a.m. - 10:30 a.m.
WHERE:	National Press Club 529 14th Street NW Washington, DC 13th Floor (Metro Center)

FDA  Fast-track for new drug development

Physicians and Pharma have long complained about the length of time for new drug approval by the FDA for clinical use.  Pharma is required to perform Clinical Trials, I, II, and III to test for toxicity, effectiveness, and possible side-effects. Various amounts are quoted for the process of approval.  These add significantly to the costs of biochemical and pharmacological production. Health Affairs and the Robert Wood Johnson Foundation describes a new expedited drug development pathway designed to speed up the Food and Drug Administration's (FDA's) premarketing approval process for drugs and devices that treat serious or life-threatening conditions. Created under a 2012 law, the Food and Drug Administration Safety and Innovation Act (FDASIA), a drug may be designated a "breakthrough therapy" if it shows far more promise over comparable treatments already on the market. At that point, the FDA will initiate a special rapid approval process. The pharmaceutical industry has responded positively to this law, and as of last month the FDA has received 178 requests for this designation. The law, whose full impact will not be known for several years, carries significant implications for approaches to clinical development, patient access to new drugs, and the drug regulations process itself.

Social Media Response to Release of Medicare Payments to specific Physicians

Josh Seidman discusses the implications of the social media response to the release of information on Medicare payment to specific physicians. This is the first time physician reimbursement amounts have been released to the public.

Primary care physicians are suffering "agenda overload"

ABOUT HEALTH AFFAIRS:

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at www.healthaffairs.org.

Laudable but excessive prevention and public health initiatives have been added to the work load of primary physicians who are already hard-pressed to comply with a multitude of bureaucratic requirements. These additonal requirements may have a negative effect on primary care duties.

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Openness and Transparency

Medicare recently released figures for physician billing It included all physicians who bill CMS for services.  CMS requires a ‘current procedural code’ (CPT) for each visit, outpatient, inpatient, laboratory, imaging and/or medication and durable medical equpment. There are numerous modifiers, such as those for bilateral proceduress and the like. The data was released without explanation or definition.  The codes are uniform and identical across all specialties.  This is the first time such complete information was released to the general public.

CMS uses the data to track and analyze billing practices. It is used to analyze for fraud and abuse. CMS studies the numbers for outliers...who bill the most….using a specific code. Some CPT codes are used to determine the amount of complexity or time involved in a patient visit.  CMS has specific items which are required to code for the level of complexity of the visit.  The CPT codes are complicated and providers will often consult with or have a ‘reimbursement expert’ to code. Except for general internal medicine most specialists use a relatively narrow range of CPT codes according to the procedures they do. (gastroenterology, ophthalmology,urology, radiology etc.

(NPR) National Public Radio broadcast information given by CMS and also commentary by a  physician who  heads the kidney transplant program at the University of Colorado.  The program is the only facility in Colorado providing these services and referrals come from a wide area, even beyond Colorado.

The data revealed the following. Some physicians  coded every visit at the maximum level of reimbursement (rare), some appeared to up-code or bill more than the standard level for some or all visits. Some even down-coded to avoid being selected for an audit.  They chose to decrease income to avoid such an audit which is time consuming and expensive. The outcome of many of the audits is a demand for repayment of the amount CMS determined was billed in excess of the supporting documentation.  Providers must document in the medical record exactly what systems (kidney, lung, heart, skeletal) were examined, and the amount of time for the visit.  The CPT code must be justified by the medical record.  CMS provides guidelines for each level of care. In surgical cases the code also includes all post-operative care for a defined period of time depending on the complexity of problems.

Physicians are the ultimate responsible person who attests to the level of billing and it’ accuracy.

In some cases the data reflects billings for multiple providers who  work for another provider. The data has nothing to do with quality of care. Frequently new procedures develop and it may take months for CMS to announce a code for the new procedure.  The rapid advances in medicine and surgery often result in procedures and/or tests for which there is no code.

Missing from the information is the necessary linkage between a diagnosis and a procedure, without which the claim is denied. If the ICD code and CPT do not fit CMS’s definition the claim will be denied.  CMS has a vast data base on what CPT codes match which ICD code.

The ICD-9 codes have been in existence since       . To further complicate matters a new expanded series of codes, ICD-10 will go into effect in the next 12 months.  The original date for compliance (October 2014) was extended because of providers and hospitals informing CMS and HHS they would not be able to comply with that mandate.  The number of ICD codes expands from 14,000 to over 60,000.  The data in the released information is based upon ICD-9.   The expansion of the ICD codes will require expensive EHR software upgrades and in some cases a new EHR.  Some  providers already replaced their systems several years ago due to early mandates for interoperability and other features.  This amounts to billions of dollars for providers.  The cost may well be more than the ‘fraud and abuse’ claimed by CMS.   CMS  has no provision for the expense of providers to continually be required to upgrade in order to bill.  This is a recurring problem.  CMS quarterly modifies its list of CPT codes and instruction for modifiers as well.  These are hidden costs to medical care, and their is little to no information available to the public regarding these CMS requirements.  The expense from these requirements is never ending and repetitive.

Private Insurers also becoming more open and transparent

Aetna, Humana, UnitedHealthcare to supply healthcare cost data for new transparency tool

Three major insurers are partnering with a not-for-profit group to provide consumers with greater access to healthcare cost information, the group announced Wednesday morning. (MODERN HEALTHCARE)

FULL STORY »

Openness and transparency not only apply to financial information, but more important to the physician-hospital-patient interaction.  Unfortunately patient centered medicine is still far from reality.  The transition from a physician led system has been a subtle erosion of ‘captain of the ship’ to a member of the team mind-set.

FEDERAL HEALTH BENEFIT EXCHANGES: COVERED CALIFORNIA, BREAKING NEWS

Exchange enrollments at 3.3 million, big jump in January

By Paul Demko 

Posted: February 12, 2014 - 5:15 pm ET

Tags: Costs, HealthCare.gov, Insurance

(Story updated at 6:15 p.m. ET)

Nearly 3.3 million individuals signed up for private insurance plans through the state and federal exchanges during the first four months of the open enrollment period, HHS reported Wednesday. The total represents significant growth in January, but is still less than halfway toward the goal of 7 million enrollments by March 31.

State exchanges enrolled 1.4 million individuals through the end of January, while 1.9 million individuals signed up through the federal exchange, according to figures released by the CMS on Wednesday. The federal exchange, in particular, showed momentum in January: Nearly 40% of total enrollments through the federal HealthCare.gov website occurred last month. 

It's very, very encouraging news,” HHS Secreatary Kathleen Sebelius said on a call with reporters Wednesday.  

However the total numbers only show a small part of the enrollment issues.  Demographics vary widely from state to state in terms of age, health, and gender.

“We're seeing a growing population of Americans who are young, healthy and well covered, and these younger Americans are signing up in greater proportions,” Sebelius said.

A significant number of new enrollees are from those who had pre-existing policies cancelled at the end of 2013.

Catastrophic Options

Hardship Exemptions  (Qualifications)

However, in some states exchange customers continue to skew significantly older. In Ohio and Wisconsin, for example, only 21% of enrollees were between the ages of 18 and 34.

A gender discrepancy is also emerging, with women representing 55% of those seeking coverage. In some states, the gender imbalance is even more pronounced. Women account for 60% of signups in Oregon and 62% of exchange customers in Mississippi.

HHS also issued data for the first time on the type of plans being purchased on the exchanges. More than 60% of state and federal exchange customers opted for silver plans, which are designed to cover 70% of medical costs

Last week, the Congressional Budget Office reduced its estimate for how many people will sign up for coverage in 2014 from 7 million to 6 million, due in part to the rocky rollout of the federal exchange and continued problems with some state marketplaces. 

There is still no data available on how many individuals have actually made their first premium payment. Even after enrollment and premium payment it remains to be seen how many will find a suitable provider. Magnifying this issue in California is massive errors in the provider directory listing providers who will not accept Covered California.

A massive  deception has been built into Covered California. Policies called Blue Shield PPO (Silver  Plan) are not ordinary Blue Shield PPO plans.  Not only that but there is a difference between group PPO plans and Individual Family Plans (IFP).

I contacted a wel established medical group (Inland Empire)  (120 providers)  to inquire about their providers enrolled in Covered California. I was told tthey accept the group Blue Shield PPO, but NOT the IFP. 

This will come as a great shock to those enrolled in many Covered California plans.

Precautionary note:  Check with your chosen provider to ascertain if they accept your specific plan under Covered California. Covered Callifornia is a general term and means very little. Be certain to find if the specific plan that was signed up for is truly available.

Many patients will present to the doctor's office and find they do not have a provider.

Important News:  Covered California is updating it's Provider  Directory.  Check with your chosen provider to corroborate their participation.  Urgent Care Centers are also specific to a planBe certain your chosen provider is aa member of the medical staff of your chosen hospital.

The Health Benefit Exchanges say that enrollment can be changed until March 31.2014.  

Note: This article will be updated weekly.

The Sad State of HHS and CMS

Many ask, "Has HHS and CMS bitten off more than it could chew?"

The Failed Whale

Perhaps health.gov should have used the 'Fail Whale' icon for it's failed website. Those of you who were on twitter when it first began would see the 'fail whale' when twitter was overloaded. We don't see this very much anymore.....HHS has inherited the 'Moby Dick" of the Affordable Care Act.  Has anyone seen Ishmael ?

Medicaid & Medicare  Pharmacies Braced for Cuts to Their Medi-Cal Payments LawMakers Reach Deal on Doctor Payments Health Reform News  U.S. lawmakers reach accord on paying doctors for Medicare Los Angeles Times - February 7, 2014 Exchange Mum on Premium Payments California Healthline - February 6, 2014 Aetna Expects to Lose Money on Health-Law Marketplaces Wall Street Journal - February 7, 2014 Obamacare Thrives In San Francisco's Chinatown Kaiser Health News and NPR - February 7, 2014 An interesting evaluation of an ethnic community health plan Ex Microsoft Exec Brings Lists and Whiteboard to Overhaul Obama Website How he wound up with this job...His road to this job was a long one. It began in July -- about 12 weeks before the launch of healthcare.gov -- when Microsoft CEO Steve Ballmer announced a massive reorganization  (their loss, our gain).  DelBene’s process is collaborative and open, his colleagues say -- which is important in his new role. “You can see him evolve his positions as he gets more data. It’s not like he’s established his positions and [listening] is just a formality -- just Kabuki ritual theatre,” says U.S. Chief Technology Officer Todd Park. Todd Park, the U.S. chief technology officer, praises DelBene for listening and being open to new ideas (Photo by Karl Eisenhower/KHN). After finishing up his part of the presentation, he felt a “tingle” at the back of his throat, as though he was going to start coughing. He didn’t want to disturb anyone, so he headed for the door to the hallway -- or so he thought. “I started opening the door to the closet!” he recalls, and there was laughter all around.  “Oh! The new guy!” the president said. The Health Benefit Exchange is a product of how government works. DelBene would never have released a product from Microsoft without assurances it did not have many "bugs.  Perhaps part of our government should be 'privatized' and failures should be penalized........just as it is in the real world.  How long will voters and taxpayers tolerate incompetence while paying the bill ?

Looking Back at 2013

This report is somewhat late due to last minute projects at the end of 2013 and the confusion about the individual mandate, the botched launching of health benefit exchanges and some other unexpected tasks

We reviewed the 'best"  Health Train Express posts of 2013 as measured by the number of comments and our analytics.

IRS VIOLATES HIPAA FACES LAWSUIT BY A "J Holiday Message for Health and Wellness WHY AREN'T DOCTORS INVOLVED IN HEALT Does Obama really want the Affordable Care Act Covered California What They Said Before the Train Wreck: The To Sebelius will be a no-show at Obamacare hearing The Beginning or The End to the Affordable Care Act There were many more 'favorites".  The highest number of page views was in the category of the Affordable Care Act. This was to be expected, given the high ranking of the ACA for search engines. Visit the sites on Health Train Express for many more interesting topics. Health Train Express has archived our posts dating back to 2005.  The focus of posts has changed over the  years, and reveals the dynamism of health care and reform.