Health Care and the alternative point of view

[dfeucht]

HSA's are going down to $2500 and are indexed for inflation. This starts in 2011.

Nothing is explicitly saying HDHPs are illegal now, but I am pretty sure they won't meet the guidelines set for acceptable policies.

This isn't true. FLEX spending accounts are having their limit reduced from $5,000 to $2,500, not HSAs. HSA's current contribution limit including any employer contributions in 2010 is $6,150 and I don't think the 2011 level has been announced. The changes to HSAs are that OTC medications will not be considered a qualified health expense - and in 2013 or 2014 all high-deductible plans that are associated with HSAs (actually plans in general) will be required to offer preventive services with no out of pocket costs. HSAs are currently allowed to do this and I actually haven't seen an HSA that doesn't already cover that - although I admit there are probably a few out there. Lastly, the out of pocket limits set in reform of $5,000 and $10,000 annually are less than the limits currently allowed by high-deductible plans - so that may change a little.

I don't think HDHPs are going away...

[disneysteve]

Some of you may have been wondering why one of the savingadvice doctors hasn't chimed in yet. I've just been really busy with work and getting ready for the Passover holiday. As you can well imagine, I have a lot to say on this topic and barely know where to start. I can't really get into anything now but I promise I'll join the discussion sometime in the next few days.

I'll just start by saying that of the options given I voted that everyone should have access to affordable care.

I've only skimmed through the thread but have seen a variety of things that I agree with and others that I disagree with so I want to pick through those and post my thoughts as time permits.

Great discussion so far. I'm enjoying reading all of your thoughts.

[disneysteve]

Is there any documentation that having universal healthcare stops the "spiraling" costs of health care. My thought on this is Obama and Democrats are "banking" on everyone having insurance as the way to stop the spiraling costs of health care.

I see the spiraling costs and I already have insurance
so I just "don't get it" that everyone having insurance prevents the costs from continuing to increase.

Okay. I'm going to start diving into this thread to lend an "insider's" perspective.

A lot of taxpayer money already gets spent to care for the uninsured in the form of Charity Care and unpaid bills that must be made up by charging everyone else more. Also, there is a huge economic impact to people not getting proper medical care. It causes drops in productivity, worker absenteeism, higher costs of doing business, etc. It goes way beyond just the actual medical issue. So getting everyone access to medical care can have wide-ranging impact on overall costs, both medical costs and non-medical costs. That said, I don't believe the recent bill actually addresses the costs of healthcare, just the availability.

Rising costs are multi-factorial. There are many reasons why costs have skyrocketed. Just giving everyone coverage won't fix the problem. In fact, it could make it worse by putting more people into the system.

Is there a reason tort reform is not on the liberal/ democrat agenda?

Politicians are lawyers. Enough said.

[jIM_Ohio]

Okay. I'm going to start diving into this thread to lend an "insider's" perspective.

A lot of taxpayer money already gets spent to care for the uninsured in the form of Charity Care and unpaid bills that must be made up by charging everyone else more. Also, there is a huge economic impact to people not getting proper medical care. It causes drops in productivity, worker absenteeism, higher costs of doing business, etc. It goes way beyond just the actual medical issue. So getting everyone access to medical care can have wide-ranging impact on overall costs, both medical costs and non-medical costs. That said, I don't believe the recent bill actually addresses the costs of healthcare, just the availability.

Rising costs are multi-factorial. There are many reasons why costs have skyrocketed. Just giving everyone coverage won't fix the problem. In fact, it could make it worse by putting more people into the system.


Politicians are lawyers. Enough said.

I think the #1 concern many people have is throwing money at a problem (highlighted in red) which already has lots of money thrown at the problem already.

I like the point you made about this bill addresses the availability of health care, and not the quality or the cost of that care.

[jIM_Ohio]

Not sure on the rules in this forum about posting links, but search Google for "milliman hospital and physician cost shift" and the first link shows a study done shows cost shifting between Medicare, Medicaid, and commercial. It also gets into hospital operating margins for each population type. It was comissioned by plans and hospitals, but is pretty interesting. I am fairly certain that it isn't just the buying power of the government but the legislative power of government.

One other thing on spiraling costs - we have to figure out a way to stop subsidizing research and development for prescription drugs for the rest of the world. Every other country legislates price controls on drugs leaving all research costs on the U.S. We as a nation need to figure out how to stop that from happening.

good article, thanks.

here is a link

http://www.milliman.com/expertise/healthcare/publications/rr/pdfs/hospital-physician-cost-shift-RR12-01-08.pdf

[disneysteve]

I have always felt that the problem with the current healthcare is the insurance companies.

Anytime you add a layer (or multiple layers) of bureaucracy to a system, you also add costs, so yes, insurance companies are part of the problem. But again, there are many factors that raise costs. This is just one of them.

Why does one have to be employed (with an employer who offers decent insurance) to get affordable coverage? I think there is a fundamental flaw there.

I agree. Insure the individual, not the employee. Let people have coverage no matter where they work or for how long. Millions of people are stuck in dead-end jobs because they don't want to lose coverage. Millions of people suffer financial ruin because they change jobs and have to wait 90 days for coverage and something happens during that probation period. That stuff shouldn't happen.

If the penalty (1-2% of income) for not having insurance is not enough to keep the healthy folks in the insurance market, there will be a death spiral of insurance costs as people will only buy in when sick.

Exactly. The whole point of insurance, any type of insurance, is to spread risk. The bigger the pool of insured individuals, the more the risk is spread and that helps keep costs down. If only sick people had insurance or only bad drivers had insurance, costs would be much higher.

PCPs are underpayed and the incetives aren't there I don't believe for those in med school to become PCPs due to cost of schooling/training and lack of payment which will be a huge problem!

As a PCP myself, I completely agree.

One other issue is people have been spoiled with the level of benefits received and don't understand the true costs of medical care. I believe that preventive visits should be covered to catch diseases before they explode

Yes. This is a big problem. The farther removed patients are from the actual costs, the more trouble you create. Everyone with a sore finger wants an MRI. Everyone with a headache wants to see a Neurologist - "It only costs $20." No, it costs hundreds of dollars. Just because you aren't paying it out of pocket doesn't mean the cost is non-existent.

[zetta]

I read an excellent book on the subject of health care costs and summarized it here:
Booknotes: Money-Driven Medicine: Zetta's Striving to Get Rich Slow

The health care bill mainly increases the ability of people to get insurance coverage -- there are only token efforts at reducing cost. I see this as its biggest flaw.

In a couple of places (likely The Economist magazine) I've seen it said that 85% of emergency room visits are by people WITH insurance -- and ER usage is likely to increase with more people being covered. It is not the uninsured visits to the ER that are bankrupting the system. Also the folks who visit their general practicioner for every sniffle are not the largest driver of costs.

My understanding is the biggest costs come from efforts to prolong life at any cost, and doctors ordering too many tests and procedures to avoid malpractice lawsuits.

[jIM_Ohio]

Yes. This is a big problem. The farther removed patients are from the actual costs, the more trouble you create. Everyone with a sore finger wants an MRI. Everyone with a headache wants to see a Neurologist - "It only costs $20." No, it costs hundreds of dollars. Just because you aren't paying it out of pocket doesn't mean the cost is non-existent.

Steve- Could you outline thoughts on how the expectation of shifting costs could be communicated. To me, being in "business" and dealing with "customers", the #1 thing to do when dealing with a new customer is to set expectations.

Success or failure is based on expectations- because I know what I am here for (business wise) and am providing the "same" solution whereever I go... the difference between success and failure will be whether the customer had expectations correct with what I am "allowed" to deliver.

IMO the #1 thing to do is set the proper expectations to the american people (you will pay at least $3500/year being single, $4500 for married couple and $6500 for family of 4 type expectation).

regardless of income or treatment, if you are not ready to spend that money, you do not deserve health care- at all.

[disneysteve]

5% of population is 50% of the health care expenses... if this is "consistent" year over year, my questions would be... is it the same 5% this year as last year

We do NOT need to insure 100% of people if only a small fraction of the people incur a significant fraction of the costs.

Not a clear cut answer here. I've mentioned before that I am part of a provider coalition that is working on a new approach to diabetes care in our town. The first thing that was done was that data was collected from the area ERs to identify the high utilizers, folks who constantly bounce back and forth to the hospital. Then they broke that data down by diagnosis. Asthma and diabetes were the top 2 diagnoses responsible for the high utilizers.

Is the list the same from year to year? There are certainly a lot of names that pop up repeatedly but there is always some flux.

We can't just insure the people who need the most coverage. As I said, that would defeat the point of insurance and pooled risk. Plus, many of these high utilizers got in that position because they didn't have coverage earlier on in their disease states. Cover everyone and you may prevent some people from getting into that group.

[feh]

IMO the #1 thing to do is set the proper expectations to the american people (you will pay at least $3500/year being single, $4500 for married couple and $6500 for family of 4 type expectation).

regardless of income or treatment, if you are not ready to spend that money, you do not deserve health care- at all.

This seems unreasonable to me, for a couple reasons: 1) folks making lower wages can not afford these kind of costs and 2) when push comes to shove, we will provide health care to those that don't have insurance.

The alternative to 2) is that when somebody not earning enough to pay for health insurance gets seriously injured or sick we say "tough luck" and let them die. Is that the kind of society you want to live in?

[disneysteve]

I think the #1 concern many people have is throwing money at a problem (highlighted in red) which already has lots of money thrown at the problem already.

I think there are good and bad ways to "throw money" at a problem. Charity Care just puts a band-aid on the problem. Patients with no insurance who use the ER as their only doctor have the bill picked up by Charity Care but it does nothing to stop them from using the ER. In fact, it encourages them to keep doing it because now, the care is paid for. Makes a lot more sense to give that patient insurance and let them develop a regular relationship with a family doctor and get their care there. Problems will be caught earlier and treated much more economically.

[disneysteve]

IMO the #1 thing to do is set the proper expectations to the american people

Expectations and demands are two big reasons for rising healthcare costs. People want everything, they want it now and they don't want to pay for it. I know this thread has gotten into the rationing topic and that plays into this. We have to stop thinking of limiting care as rationing and start thinking of it in terms of doing what is appropriate, no more and no less. More care is not necessarily better care. In fact, the opposite is often true. Just because something is covered doesn't mean you need it or should have it. People need to understand and accept that fact.

I also think people need to have some skin in the game. Back when people had HMOs with $2 copays, they'd go to the doctor for every stupid thing you can imagine because it was cheaper to see the doctor than to go to the pharmacy and buy something OTC. Now, copays are more in the $20-$30 range and that creates a bit of a deterrent to running to the doctor for every sniffle without being too big a burden that would prevent most people from seeing a doctor when they really need to.

[jIM_Ohio]

This seems unreasonable to me, for a couple reasons: 1) folks making lower wages can not afford these kind of costs and 2) when push comes to shove, we will provide health care to those that don't have insurance.

The alternative to 2) is that when somebody not earning enough to pay for health insurance gets seriously injured or sick we say "tough luck" and let them die. Is that the kind of society you want to live in?

First you set expectations, but you do not end there. You appeared to assume once the expectation was set, that nothing was done for people which did not make enough money. The main issue with defining expectations is to be able to define success. If everyone has different expectations, the plan will fail to some when it succeeded based on how it was designed... so set expectations which are reasonable, then work to make system cater to those expectations.

For 75% of the country, I think the expectations I set were within reason. The government can offer tax credits which are phased in at lower incomes and phased out at higher incomes for those costs.

My point is in the expectation. NO ONE should expect free care- health care is not a handout. For people without jobs, they can get X amount of lifetime care, then their well is dried up (forever). Kids included. People can decide how big the well is per person for free care over life- probably enough to be born, get decent treatment thru age 14, then well dries up (figure out that average cost, and that is the lifetime max for free care).


My second point is that health care is "fixed" in cost- it does not cost more to give Bill Gates health care than it does for myself to get health care. That cost stays fixed until one of our bodies decides to malfunction, and even then, for me to get a heart transplant does not cost more than Bill gates to get a heart transplant or other procedure to save our lives. So by setting an expected consumer cost people see everyone is spending about the same amount each year. If you are not willing to spend the money, you do not deserve to get health care.

Reality is this- everyone is spending that now if you have an employer plan anyway... $7500 is $625/mo. Think employer paying $400 and you paying $225/mo or maybe $150/mo and $75/mo worth of dr visit (co pays) and drugs. Most people are already spending this money on health care- they just don't realize it. My point is you set the expectation that "health care costs this much"- its upfront and direct. If people want something (health care wise) and have not spent that much money, they need to be expected to pay that much.

Anyone with an HDHP is already living with that mindset.

[disneysteve]

I think a better plan for the government would be to subsidize hdhp insurance plans. This gets people working on their own healthcare and understanding the costs, putting less cost on insurance companies, but yet covering large bills...which is what insurance was originally designed for: to reduce the risk of financial disaster.

Now we have insurance with high premiums that cover our oil changes...oh, I mean routine office visits! Shouldn't we be able to cover the small stuff?

Ah, the health insurance as auto insurance analogy. I've made it myself many times. There are pros and cons to that line of thinking. Some people simply don't drive because they can't afford insurance or maintenance costs. That isn't such a good option when it comes to healthcare, though.

While I can afford to cover my everyday costs and pay a high deductible, lots of folks can't. There needs to be some system in place to cover those folks. And yes, I totally recognize that many people can afford it but choose not to due to screwed up priorities. Don't drive to my office in a brand new car, sit in my waiting room wearing your Ugg boots talking about what you watched on your on-demand digital hi-def cable last night and be texting on your iPhone while I'm trying to examine you and then tell my receptionist that you can't pay your $20 copay. I'm talking about people who realistically can't afford the bills. I work in a very poor area. Many of my patients earn well under the national median. Median income in this town was $18,000 in 2006, which made it the poorest city in America. So for lots of these folks, a HDHP would be worthless. They may as well have no coverage.

[MonkeyMama]

The low wage comments are fair enough, but I think anyone who has had private insurance (who is self-employed, works for a SMALL business, has been laid off, or lost a job due to disability) and who is middle class, can relate to the fact that most people have a huge disconnect between the true cost of healthcare and what they expect to pay.

Literally, having always had private insurance because it was better than my employer offerings (right now - small employer) I will have conversations with upper middle class friends, clients, etc. who *can't afford* a $50 co-pay. It's kind of ridiculous. Likewise, my spouse just had BRAIN SURGERY. The cost of our deductible was $3k. I Don't know how many conversations I had with relatives who didn't understand why we had to pay a dime. (Um, we have a HDHP because any other insurance costs more than our California mortgage payments). Every time we go to the doctor for a regular visit, someone will say, "$10 well spent!" I have to ask what world we they are living on. How about $200. WELL SPENT!

Do you think I am going to complain about paying $3k for a delicate, life saving surgery? Or $200 to take my child in for an illness? Give me a break! The middle class needs to wake up.

The lower class is a whole different story and not exactly what the point of most of this discussin is, in my opinion. Our income is VERY middle middle class. But, obviously our experience is very different from most, not having had great employer insurance. More and more people are understanding with layoffs in the current economy.