Health Care and the alternative point of view

[jIM_Ohio]

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. .

Hmm

I agree some people don't recognize what they can afford
but is it up to the government to cure people's stupidity?

If the expectation were set that each family had to pay the first $X of health care, I think people would begin to realize how much things cost.

My #1 issue would be change expectations (for what healthcare is and how much it costs)
My #2 issue would be to deal with anything (procedures, operations, diseases) which have different costs of treatment for the same treatment.

[jIM_Ohio]

Here is some math my family did from 2007-present on our own costs... curious if this is normal for a household?

In 2007 my wife and I both were on my plan at work. It was a PPO plan and was pretty good It had a fertility benefit ($7500 lifetime max) and we used part of that benefit in 2007.

Wife was pregnant in 2007 and during open enrollment we decided to split... I went to an HDHP for myself, wife went to her employer plan. Part of reason was my employer gave me $750 for doing so, and other reason was I did not see my doctor very often (saw him in 2005 then next visit was earlier this winter in 2010).

In 2007 we were probably paying $180/mo for 2 adults on my employer plan... and we probably spent about 5k-10k in doctor bills, most of the bills were from fertility treatments and procedures.

In 2008 we paid a little more initially (wife was paying about $250 every 2 weeks once kids were born, and if I was paying $35/every 15 days, that was high).

In 2009 with kids here, we made decision to go to HDHP. My math to wife was this...
It would cost us about $90 every 15 days (premiums of $2160)
We would put the max in the HSA... employer put in $1500 and we put in about $4400.

Our 2009 medical expenses on HDHP could not exceed $7000 (might be off by a hundred or so, but that was close).
We had most of the $7000 accounted for between employer contribution and our HSA contribution (there was about an $800 gap).

In 2008 we paid about $6000 in premiums to wife's employer, plus office copays.
In 2009 we spent $7000 in doctor's visits
In 2010 we are still on HDHP, the doctor visits this year are MUCH MUCH less than 2009. We might actually have money left in HSA at end of 2010.

My point was if you see bills of $7000 coming your way in a year, you are PROBABLY spending close to that in premiums already if you have a family plan from your employer. If you are not paying that much for a family, you have EXCELLENT employer insurance (meaning your employer is footing more costs than normal employers).

It should be noted my employer is a megacorp (only entities larger than my employer are FIFA and the catholic church), so I don't "hurt" for good benefits is my point.

Here is the funny part- in 2007 I tried to get wife to go on HDHP... she disliked (depised) the idea and the discussions were ummm heated to say the least.

In 2008 when we split, it was an experiment to see how it worked and adding me to wife's plan with kids would have been more expensive anyway.

In 2009 when whole family went on HSA the discussions were tense, but in the end wife made some phone calls to my insurance and we took the plunge.

In 2010 my wife now swears by the HDHP... part of it was the political fallout (she dislikes Obama more than words can state), part was she took some training for work (she administers health care plans as part of her job) and the training was touting HDHP. She said it sounded like my voice when she read the training.

I have no issue with whatever type of insurance suits a given family, my comment is some insurance types are better than others to know your true costs. I know exactly how much each medicine costs, how much each doctor's visit is... and so on...

anyone retiring before medicare kicks in will find this information very helpful for retirement planning.

[zetta]

Right now every location doing an MRI does not tell the consumer how much the MRI costs. My take on level playing field is that an MRI should cost the same (in general) wherever its done, with some minor exceptions. Once that playing field is level, and every MRI provider plays by those rules for 18-36 months, the price control could be lifted, with the idea that price disclosure is more important than price controls.

Price controls always result in shortages of the product or service -- basic economics 101, by fixing the price lower than the true market point, demand goes up and supply goes down. Simply establishing a transparent market where prices are posted and the purchaser has the ability and motivation to shop around should result in MRI's costing about the same wherever you go.

There are big problems with asymetric information in health care (how often does the average person need to shop for cancer or emergency care?), and that is where perhaps regulation could make the market perform better.

[jIM_Ohio]

Price controls always result in shortages of the product or service -- basic economics 101, by fixing the price lower than the true market point, demand goes up and supply goes down. Simply establishing a transparent market where prices are posted and the purchaser has the ability and motivation to shop around should result in MRI's costing about the same wherever you go.

There are big problems with asymetric information in health care (how often does the average person need to shop for cancer or emergency care?), and that is where perhaps regulation could make the market perform better.

I think your logic has a hole in it...

by fixing the price lower than the true market point, demand goes up and supply goes down.

is the price we have the true market point?
My goal is to find that market point, not set the price lower than that point...

I think I gave this example earlier with an MRI, but I will deviate and give a different test/example...

If a pregnant woman gets an ultrasound, there are 3 possibilities to look at:

1) the OB has one in their office
2) the pregnant woman can go to a hospital
3) there could be a third party office which has the equipment

It is my opinion that within a 30 mile radius, those tests should have identical costs. If someone is charging more, that is profit or inefficiency for that provider.

It is my opinion that one of the first goals of reform is to drive out the inefficiency (anyone which is charging more than whatever the price point is will have to improve efficiency or go out of business- this efficiency means less office staff, less people in billing, get more people to get the test done or something like that.

How did the current facilities come to their current price? They charge as much as the insurance companies will reimburse, maybe a little more. That whole system is built on the logic that the insurance company knows best. I don't agree they know best... so my solutions will be flavored to allow the test facilities within a region to establish their own pricing, as long as pricing for the same test is the same throughout a given region.

[zetta]

[QUOTE][so my solutions will be flavored to allow the test facilities within a region to establish their own pricing, as long as pricing for the same test is the same throughout a given region.
/QUOTE]

In the same sentence you're proposing that individual providers set their own price and that some unnamed authority (govt?) enforce that all facilities have the same price within a region! Central planning simply does not work -- the invisible hand of a properly functioning market arrives at the desired result of prices being comparable (or differing by adding value, for instance by paying more for the convenience of evening hours.) The tricky part is how do we get the health care market to function properly? Employment-linked insurance and govt payers currently both distort it.

[disneysteve]

My stance is health care needs to be a level playing field. How "level" is defined is open ended, but here are some thoughts... it should NOT be tied to who you work for, it should NOT be tied to what state, city, or location I live in. It should NOT change in price because of location or insurance provider. If I need open heart surgery, the price of that procedure needs to be defined, and all insurance companies should reimburse the same amount (the price should not be negotiable).

My take on level playing field is that an MRI should cost the same (in general) wherever its done, with some minor exceptions.

I disagree that costs shouldn't be influenced by location. The cost of virtually everything already varies by location. Cost of living varies. What an employer has to pay to attract workers to undesirable areas affects pricing. The cost of housing varies and, as a result, what a doctor or hospital or medical facility needs to charge varies. Insurance costs also vary due to demographics. For example, the smoking rate in Indiana is almost 3 times that of Utah. An insurer doing business in both states would need to take that into account when setting rates. There are differences between urban and rural areas. There are differences between richer and poorer areas. So I think where you live should certainly influence how much you pay for health insurance and care.

If a pregnant woman gets an ultrasound, there are 3 possibilities to look at:

1) the OB has one in their office
2) the pregnant woman can go to a hospital
3) there could be a third party office which has the equipment

It is my opinion that within a 30 mile radius, those tests should have identical costs.

In a rural area, 30 miles might work. In an urban/suburban area, you might need to set that radius way smaller. As I said, the median income where I work is about $18,000. In the town where I live, about 8 miles away, the median income is $83,000. It may not make sense for charges to be similar in both places because the costs of doing business vary dramatically.

With your ultrasound example, I think your 3 examples are considerably different and can justify different prices.

1) When my wife was pregnant, her OB did the US in his office and did it himself as part of her exam. So her test was performed by a board-certified OB/GYN with 30 years experience who gave her the results immediately. She didn't have to make another appointment or travel to another location. She didn't need to take any additional time off of work. She didn't have to wait in 2) a hospital waiting area and risk catching something with a bunch of sick people around her while in-patients or ER patients got rushed in ahead of her or 3) didn't have to make an appointment at some off-site location and miss time from work to go to that appointment. At 2) and 3), the test would be performed by an ultrasound tech who completed some certification course at a vo-tech school. Then she'd have to wait a couple of days to get a report after a radiologist reviewed the study and dictated and forwarded the results to her OB. Yes, the end result would be the same in each case but the convenience and hassle-factor would be dramatically different. That comes with a price.

One could argue that we, the taxpayers, shouldn't be paying for convenience. We should pay the basic cost of the test. If you want it a better way, pay for it yourself. And that's a perfectly fair point. I'm just trying to point out that just because different providers charge different prices for the same test doesn't mean the more costly ones are ripping off the system. They may be providing a different level of service.

[disneysteve]

From what I've read, malpractice insurance accounts for something like 2% of all medical costs. Tort reform would make almost no difference in the cost of health care.

There are different issues here. There is the actual price doctors pay for malpractice insurance. Then there are costs incurred by doctors practicing "defensive medicine" trying to cover all bases and protect themselves in the event of a lawsuit.

I personally know doctors who have closed their practices due to the actual cost of malpractice insurance. These were doctors who had offices in 2 neighboring states and the rates in one state were dramatically higher than in the other. They closed the office in the expensive state and moved their entire practice to the cheaper state. Doctors have left the more expensive state in droves.

As for defensive medicine, that is something like a doctor doing a brain MRI on every patient with a headache just to be sure they don't have a brain tumor. It is much harder to quantify those costs. If the doctor knew his risk of getting sued was limited and if sued, the possible judgement that could be brought against him was limited, he might not be so quick to order all of those tests.

[asmom]

My stance is he chooses not to work, so he chooses not to get insurance.

The problem with this stance is that you end up paying for his health care anyway. Either the uninsured person suffers some catastrophic injury OR he gets sick but because he has no insurance he waits until a litle problem becomes a big problem OR he seeks treatment via the emergency room.....all paths leading to an exorbitant bill for which he cannot possibly pay and causing the hospitals, labs and physicians to write off a portion. Where do you think they make up the slack? Uninsured people still get sick and they do not go away. Trust me.

Is there a reason tort reform is not on the liberal/ democrat agenda?- this seems the most obvious way to drive down the costs of doctors, and drive down those costs, then other costs to consumers should drop as well.

Tort reform is way overrated as a way to decrease medical costs. I have seen absolutely no evidence that it will reduce medical costs significantly. It's true that malpractice insurance costs and practicing defensive medicine has led to some increased costs but by and large, physicians treat based on evidence (and what the insurance will pay for). Not only that, when you look at the tens of thousands of people who are injured or killed every year as a result of medical errors and compare that number to the actual number of medical malpractice lawsuits brought forth and/or resulting in a large award annually, the idea of tort reform is almost laughable.

[creditcardfree]

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.

I agree with everything you are saying. And much of this discussion, is maybe trying to figure out to explain to those of us that can afford health insurance what our expectations are.

As a human being, I expect that when I need care I have easy access to it. I also expect that I pay a reasonable amount for that service. I also expect that I won't go bankrupt in the process. I also do not expect more or less than the service I need. I also expect my doctor or provider to treat me respectfully as an individual, and to be able to think outside the box of treating symptoms and focus more on preventive care and education (which isn't really a money maker is it?). That's what I expect.

Right now, those of us with insurance, see only part of the financial picture: copays, the premiums out of our paychecks (how many of you add that up as an annual cost?), the eob (explanation of benefits) that shows what our doctor billed our insurance company (which can seem like fraud) and the amount the doctor was actually paid. Of course, sometimes we have additional charges we are expected to pay.

Honestly, I have no idea was a reasonable/fair price to charge me for time visiting a doctor. Is the amount billed or is that just fluff to cover for those who don't have insurance and the time it takes to collect the money. The insurance company says it is much less. Who do I believe? It seems it would be helpful to have some education on average costs of services...broken down by zipcode if necessary.

I do realize there are many more financial factors in healthcare and some of my remarks are a bit sarcastic, but they have crossed my mind...so I share.

[disneysteve]

focus more on preventive care and education (which isn't really a money maker is it?).

This is really a key to truly reforming healthcare and stopping the spiraling cost increases. A big problem is that most people go to the doctor when they are sick and feeling badly. Those of us with children take our kids to the doctor on a regular basis for physicals, often because the schools require them, and for routine scheduled vaccinations. Once people are past school age, however, they don't generally go to the doctor unless something is wrong. And even then, they frequently don't comply with treatment advice. I see this every day. A patient will show up because she has a cold. A quick glance at the chart reminds me that this patient has severe high blood pressure and diabetes and has failed to show up for her last 3 appointments. So she'll make time to see me for a cough and stuffy nose but won't bother to come in to treat her life-threatening diseases.

This is what we need to fix. We need to somehow educate the population about the need and benefits of regular medical care. We need to teach people why they need to treat their BP or sugar or cholesterol or other chronic conditions even if they feel okay. We need to ban the sale of all tobacco products rather than just trying to tax them out of business. And we need to have some massive ongoing concerted effort to truly address obesity. I can tell you that most of my day is spent treating obesity and smoking-related illness. Get rid of those two problems and you will solve the healthcare crisis.

[dfeucht]

As for defensive medicine, that is something like a doctor doing a brain MRI on every patient with a headache just to be sure they don't have a brain tumor. It is much harder to quantify those costs. If the doctor knew his risk of getting sued was limited and if sued, the possible judgement that could be brought against him was limited, he might not be so quick to order all of those tests.

On Tort reform, as a left leaning person I actually do think that some sort of limits on liability should be implemented. Not sure what level, but outrageous judgements should not be allowed.

I quote Steve here though, becasue although doctors may do a brain MRI on every patient with a headache to avoid being sued, they also may do excessive MRIs because they bought a brand new shiny machine and they get paid for each and every MRI they perform. This is where I believe payment reform is necessary to pay for outcomes or entire episodes of care rather than for each service. It rewards efficiency and quality as opposed to just doing more. I think many doctors will agree that doing more doesn't always mean better quality in fact it can be worse (Steve??!)

To Jim's point on getting the consumer to understand true costs. I am 100% in favor and I recently moved to a HSA qualified HDHP and think it will be an interesting to see if it changes to how we (OK - my wife) uses medical care. The biggest problem here is that my doctor can not tell me how much the tests he/she wants to run cost. So if I am ill and they want to take an X-ray "as a precaution" and run some tests "as a precaution" and I ask how much that will costs they (in most cases) can't tell me (and I feel like they will look at me sideways as though I am questioning them). So I think it not only do consumers need education on costs but providers do as well on cost and transparency.

[jIM_Ohio]

One could argue that we, the taxpayers, shouldn't be paying for convenience. We should pay the basic cost of the test. If you want it a better way, pay for it yourself. And that's a perfectly fair point. I'm just trying to point out that just because different providers charge different prices for the same test doesn't mean the more costly ones are ripping off the system. They may be providing a different level of service.

Deep down, I think you see the goal I think reform should have on the system based on the statement above. How we "get there" is a cause for the debate above.

I am sure the labor rate of the US tech and the OB GYN is different... that can be built into pricing. Meaning code 001 for US done by tech and code 002 for US done by OB. Two different rates for "standardization". Within the X mile radius those costs need to be fixed (code 001 should be same everywhere and code 002 should be same everywhere).

My general "point" is that if costs were controlled (for a short time) eventually we work out any inefficiencies one office has over another and make sure the powers that be "understand" the cost shifts and true costs of a given procedure.

A step which accompanies this is also price disclosure to consumer. Once this is known, its very possible that consumers get smarter with more information. Right now the health care industry (doctors and insurance companies and hospitals) have little communication with the consumer in regards to cost. If this is corrected with some level of TEMPORARY price controls and price disclosures, I think reform can happen by the providers without much intervention from the government in terms of trillion dollar legislation.

[jIM_Ohio]

The problem with this stance is that you end up paying for his health care anyway. Either the uninsured person suffers some catastrophic injury OR he gets sick but because he has no insurance he waits until a litle problem becomes a big problem OR he seeks treatment via the emergency room.....all paths leading to an exorbitant bill for which he cannot possibly pay and causing the hospitals, labs and physicians to write off a portion. Where do you think they make up the slack? Uninsured people still get sick and they do not go away. Trust me.

In one of the articles above, it was established that I pay about $2000 per year to cover medicare/medicaid, in addition to the payroll taxes for FICA (meaning my insurance premiums and co-pays are $2000 higher because of the uninsured).

If my choices are
a) the current system where I pay $2000 extra
b) a new system where everyone has insurance and I pay $2000-$3000 more in annual taxes for the insurance I do not need

I choose a) hands down and its not even close.

Because the current system can be corrected with the $2000- thru tax credits or other if the government chose to recognize me for paying for someone else's care.

In the new system will I be able to see my doctor the same amount? Will me pediatician be able to see me same day whenever I call and my kids are sick? Insure more people, number of doctors being constant burdens the system (see Massachusetts).

[jIM_Ohio]

To Jim's point on getting the consumer to understand true costs. I am 100% in favor and I recently moved to a HSA qualified HDHP and think it will be an interesting to see if it changes to how we (OK - my wife) uses medical care. The biggest problem here is that my doctor can not tell me how much the tests he/she wants to run cost. So if I am ill and they want to take an X-ray "as a precaution" and run some tests "as a precaution" and I ask how much that will costs they (in most cases) can't tell me (and I feel like they will look at me sideways as though I am questioning them). So I think it not only do consumers need education on costs but providers do as well on cost and transparency.

You do the tests when your gut instinct tells you the tests are needed.

In some cases you wait 2-3 days to see the doctor if you are sick
but if you are really sick, you go in immediately. YOU KNOW- you trust your instincts.

I can think of times where I waited 2-3 days to see doctor, and he thought I may have had the flu or even a minor case of H1N1 based on what I described to him. But I went in because my sore throat had not gone away in 10 days or something like that.

There was another case where my son could not keep food down. Pediatician referred us to Children's emergency room, and we went immediately without regard for cost.

YOU KNOW when you need to go in immediately, and you know when the test is needed (for routine things).

We have not had an adult in hospital yet under the HDHP, so not sure what that does to above logic (yet).

[dfeucht]

You do the tests when your gut instinct tells you the tests are needed.

In some cases you wait 2-3 days to see the doctor if you are sick
but if you are really sick, you go in immediately. YOU KNOW- you trust your instincts.

I can think of times where I waited 2-3 days to see doctor, and he thought I may have had the flu or even a minor case of H1N1 based on what I described to him. But I went in because my sore throat had not gone away in 10 days or something like that.

There was another case where my son could not keep food down. Pediatician referred us to Children's emergency room, and we went immediately without regard for cost.

YOU KNOW when you need to go in immediately, and you know when the test is needed (for routine things).

We have not had an adult in hospital yet under the HDHP, so not sure what that does to above logic (yet).

You are probably right - I have not had this issue yet. Still docs/hospitals in general can not quote costs so the consumer is at a disadvantage in price shopping.

BTW - GREAT discussion. This has been very nice to be able to discuss a topic that seems to have led to a political meltdown in terms of civility and not feel attacked or threatened. Rather we explore different view points and share opinions in a collaborative manner. Thank you...