How the Health Insurance Industry Will Circumvent the New Reforms

The Health Insurance Industry has proven itself to be the most heartless group of organizations in America. For decades, they’ve been denying coverage to those who need it most, blocking treatments in order to cut costs, taking more, and giving less over time. Does anyone believe they are going to change overnight? Without a public option or a percentage cap on profit margins, the Industry will find creative ways to circumvent the new rules.

Taking a look at the recent Credit Card Reforms enacted by Congress, we already see a template for what will happen with health insurance reform. When Credit Card Reform was passed, Congress gave a compliance date instead of requiring the changes to be implemented immediately. As a result, the credit card companies immediately began raising interest rates, raising fees, and completely cutting off people’s lines of credit, presumably those who would’ve been most protected by the changes. Welcome to reform in the age of corporate nepotism.

The Industry has already promised to raise rates. We know they will do this because they have a mandate from Wall Street to keep those profits up. The pressure to keep profits up is so enormous that HealthSouth executives committed capital crime, cooking their books for several years just to keep their stock prices from dropping.

The biggest change everyone’s been talking about is the new rule that insurance companies will no longer be able to deny coverage to those people who have pre-existing conditions. However, there is nothing in the bill that says they have to include every doctor into their PPO networks of providers and facilities. This is where the nuanced discrimination will happen. They cannot deny coverage for pre-existing conditions, but they can exclude top specialists or facilities that treat those conditions from their networks. Furthermore, there is no price cap so even if they offer coverage, it will be so expensive, they still cannot afford it.

Another new rule the Industry will have to face is the lifting of lifetime and annual caps. They will have a work-around for this. At this very minute there are Industry lawyers writing new rules of coverage in anticipation of reform. There will be new hoops to jump through before you can get that surgery or that expensive drug. We will see more bureaucratic intervention and delay tactics and again with the lower reimbursement rates for out-of-network specialists and facilities being worked into the new rules.

There will be probably be a compliance date written into the bill, just like in the Credit Card Reform bill. I’d bet the house that every single day leading up that date will be spent trying make as much profit as they can, while there are still no rules. People will be dropped. Rates will be raised. Coverage will be lowered.

Of course a Public Option would prevent this from happening, because it would force the Industry to compete. A cap on profit margins would also prevent this because they could only keep a small percentage of what they take in. Some advocate for a 7% cap. Personally, I’d be satisfied with a 10% cap with a limit on executive pay. I’m not talking about a doomsday scenario, here. I’m talking about what is likely to happen if Congress doesn’t get it right. The Republicans ironically pegged it when they said, “The American people want Congress to get it right”.

The Fight Against Physician Owned Hospitals

Physician-Owned Hospitals (POHs) are for-profit hospitals that are both run by and owned by doctors. They are usually based on a specialty service, such as Cardiology or Orthopedic Surgery. The idea behind POHs is that because they specialize in one area, they are better in that area than anyone else. They have some issues that need to be addressed in terms of regulations, but mainstream Hospital Organizations are lobbying for policies that could eliminate POHs altogether.

Traditional Hospitals are regulated both by the federal government and by state governments. Because they are a newer phenomenon, POHs are not yet regulated in the same way that traditional hospitals are in every state. Problems have been cited, such as inadequate emergency care and staffing. In any hospital, especially one where surgeries are performed, medical emergencies will arise and any entity calling itself a “hospital” should be able to handle those emergencies. Certain aspects of hospitals are regulated federally, but not all. Facilities that participate in Medicare, Medicaid, and Veterans Care are heavily regulated, but POHs that are not adequately regulated in their states are falling through the cracks. The problems are difficult to pin down also because they are not required to report things like staph infections and other statistics that could be used to judge their effectiveness or track potential problems.

POHs are generally small and one of the complaints coming from the Hospital Lobby is that POHs are “cherry picking” healthy, insured patients. While this may be a valid concern, their claim that POHs are providing too much competition does not seem to be valid. The latter point may be why the Hospital Lobby is fighting so hard against them.

Senator Baucus and Senator Grassley, reportedly recipients of huge sums from the Hospital Lobby are, coincidently, fighting the hardest against POHs. Obviously, there does need to be adequate regulations on all hospitals, but Baucus and Grassley are taking the fight to another level. They have tried, and presumably still are trying to prevent any more POHs to be developed and they are also currently trying to prevent them from participating from the Medicare program, which, ironically, would subject them to more regulation than they would otherwise have.

The bottom line is that there is a well documented problem with Physician Owned Hospitals’ emergency services that needs attention in the form of more regulation and oversight. Senators Baucus and Grassley, however, are going too far by reacting to their benefactors and using the issue to attempt to wipe out the competition.

http://acutecareinc.wordpress.com/2009/07/20/update-baucus-grassley-slam-physician-owned-hospitals/
http://www.medicalnewstoday.com/articles/93681.php
http://www.access.gpo.gov/nara/cfr/waisidx_02/42cfr482_02.htmlhttp://www.consumeraffairs.com/news04/2009/07/physician_hospitals.html

Response to Euthanasia Fear-mongering

When I wrote the previous post, it was before anyone was talking about “death panels” or killing the elderly or forced euthanasia. Actually, nobody was talking about euthanasia or end-of-life care at all at the time. All the controversy broke out a week or two later. I knew what I said regarding euthanasia was controversial but I should have known that the topic would be blown way out of proportion. I naively expected a more intelligent level of discussion. Once all the exaggerated claims about forced euthanasia broke out, I considered editing that part of my post, but I decided to instead to add some clarity to why I wrote what I did.

There is absolutely no situation where euthanasia should be forced on anyone, and I made that clear the first time around but I’m saying it again anyhow. Also, I don’t believe that euthanasia should be legalized in the health care bill. I think that Congress’ approach of providing a higher level of support for end-of-life decision-making is the appropriate one.

What I was advocating was just another option for patients and/or their families who are in extreme situations. This is a true story. Two years ago, I had a friend who had brain cancer and died. Ian's battle had begun three years earlier when he’d learned he had a brain tumor. He had multiple surgeries over the course of his treatment and each time the tumor returned until the cancer finally took over and even with top notch care, he could not recover. Toward the end of his life, he was unable to walk, talk, or take care of himself. As the cancer affected more of his brain tissue, his sight, hearing, and memory were affected as well. Some people with brain cancer and even Alzheimer’s Disease aren’t able to chew or swallow and must be fed through a tube. I know this to be true because my Filipino grandmother went through this, which forced my family to make some difficult decisions. There are extreme situations, like advanced brain cancer, where I feel just having the option of euthanasia may be appropriate for certain people or families to make based on their individual situations and their end-of-life instructions or living wills.
To try to say that euthanasia should be mandated or used vicariously is just ludicrous. No one is advocating euthanasia in this health care bill, nor its’ legalization any time soon. I was only making a point about individual choice in extreme situations where a person may not even want the level of care they are being given.

Hidden Costs of Health Care and Incentives

"Financial ruin from medical bills is almost exclusively an American disease." ~Roul Turley


Much of what I discuss in terms of health care costs is largely ignored by politicians in the health care debate because of the lobbying by health insurance, pharmaceutical, and hospital companies. We are hearing a lot about the bill being developed in Congress, which addresses a small portion of excessive health care costs but without addressing a whole host of issues, the bill will do little to actually reduce costs in comparison to what is actually driving them up.

President Obama routinely talks about “the rising cost of health care”, but this phrasing is a misnomer. What he is really talking about is the rising cost of health insurance. I will discuss both the cost of insurance and the invisible costs of health care that drive up both the price of health care and health insurance . It is very difficult to find references in which the authors have differentiated between the two. The difference between the cost of health care and health insurance is very simple, as follows.

Cost of health insurance = Total $ amount of all the insurance premiums collected

Cost of health care = Total $ amount of payments made directly to health care providers, facilities, and pharmacies.

Hidden Costs

· Insurance company profits.

· Overly complicated insurance billing and coding

· For-profit hospitals

· Pharmaceutical overuse

· Market-based drug pricing

· Lack of centralized medical records

· Elder/End-of-life care

· Lack of emphasis on prevention and personal responsibility


Ways to Control Costs

· Non Profit Insurance Providers

· Non Profit Hospitals

· Centralized Record Keeping

· Regulations on Drug Prices

· Adjunct therapies

· Emphasis on preventive care

· Assistance for the Elderly

· Legalize Euthanasia

· Personal Responsibility


Reverse Incentive and Competition

http://www.dailyfinance.com/2009/06/02/reform-health-care-now-insurance-reimbursements-make-no-sense/

The link above is an article written by a doctor who admits, among other things, that doctors do have patients return for extra tests and/or treatments so that they can get paid more. This is what I call “Reverse Incentive”. For-profit hospitals and doctors make more money when patients are sick than when they are well, therefore the incentive is not to cut costs or keep people healthy, it is exactly the opposite. The reason, he claims, is due to the ridiculous and confusing insurance billing policies which is discussed in another section.

In the UK, a General Practitioner acts as gatekeeper and manages a certain number of patients. The physicians there get bonuses for keeping their patients well. For this reason, the UK is leading the world in preventive medicine which lowers costs and most importantly, keeps people healthier.

One of the arguments you’ll hear from opponents of health care reform is that competition among insurance companies and health care providers encourages higher quality. What they’re really talking about is incentive . In another example taken from the UK model, health care centers compete for government funds, and therefore have incentive to reduce costs and get better outcomes.

For-profit Hospitals

How much of your hospital bill goes to profits versus the actual cost of providing care? Costs can be brought down by eliminating profit status for hospitals. Then the money we spend can go to the hard-working doctors and other providers that are directly involved in patient care, rather than to investors who do not add to the quality of health care.

A study done in Dartmouth, VA and published in the New England Journal of Medicine concluded that the cost of care was lower among non-profit hospitals compared with for-profit hospitals, while the quality of care remained the same.

Other studies have found that non-profit care centers provide higher quality care in some areas that are less profitable and therefore less emphasized in their for-profit counterparts, including lower mortality rates, higher quality nursing homes, better health education, and more involvement in research.

Pharmaceuticals

Modern pharmaceuticals are both a miracle and a curse. There are many wonderful drugs to treat what would otherwise be debilitating and even life-threatening diseases. These cures, however, come with many side-effects, both literally and figuratively. The first and most obvious is overuse. Many drugs are over-prescribed. This can be because a patient asks for a drug and a doctor obliges, incorrect or insufficient diagnosis, patient addiction, or because it is just plain easier to prescribe a drug than it is to direct patients in lifestyle changes. The second problem is side effects. This is where reverse incentive comes in again. Let’s say a drug has a side effect of stomach upset, which is a common side effect. You take the drug, get stomach upset, then the doctor prescribes another drug for the side-effect, which causes more side-effects, which often becomes an endless cycle of more drugs and more side-effects. Who wins in this situation? The pharmaceutical companies win. While the industry has incentive to make drugs that don’t endanger people’s health in major ways because then they invite lawsuits, they also have incentive to manufacture drugs that induce minor side-effects easily treated by other drugs.

Another problem with the pharmaceutical industry is market-based pricing. This means that prescription drugs are priced according to local markets. You could be paying more for your prescriptions because you live in certain zip code. I found that when I filled my prescription at a Walgreens across town, the price was about $5 more. I was told by the pharmacist that this was “because of the market”. Not only is this practice unfair, it also drives up costs of prescription drugs.

Patient Records

It is difficult to measure just how much health care dollars are wasted due to prescription abuse, drug interaction, redundant tests, record-keeping errors, and lack of access to patient history.

The lack of centralized medical records in many ways contributes to higher costs of health care. It allows drug abusers to acquire prescriptions from various doctors without any oversight. The lack of record keeping system also contributes to increased illness due to drug interactions. In other cases, ordering of redundant tests, record-keeping errors, and lack of access to patient history are contributors to decreased efficiency and higher costs.

Insurance Companies

Insurance companies themselves are a huge contributor to skyrocketing health care and insurance costs.

1. Corporate status: How much of the burden being put on families, individuals, and employers is going to support huge corporate structures and insurance company profits? In many cases, the very people who are profiting are actively working to find ways NOT to pay for vital services. Insurance company profits are well above the Fortune 500 average.

2. Billing practices: Insurance company billing procedures are undermining doctor’s efforts to be more efficient. Doctors are not allowed to bill for two procedures performed in one visit, which would obviously be more efficient. Doctors have to make a choice between not getting paid for additional services or force the patient to have to come back another time for the additional service so that they can get paid. The only reason for the rules is the insurance companies’ hope that doctors will choose efficiency and provide the additional services without payment.

One doctor admits that doctors compensate for these practices by “doing more”, meaning ordering more tests and performing additional services that may not even be necessary, just to get more money from insurance companies.

3. Needlessly complicated coding: Instead of adhering to a universal coding system that has been accepted by professional medical societies, the insurance companies deliberately make things confusing and convoluted by each having their own set of codes and rules. If you are a doctor, do you really want to try to remember 50 different sets of rules and codes, along with everything else you have remember regarding your patient’s care? These companies know that by making doctors adhere to arcane and confusing rules, they can reduce what they have to pay because of mistakes made by providers in attempting to adhere to them.

Insurance companies actually do have incentive to lower costs, but the way they do this is through the process of recission, which means to rescind coverage. Instead of denying coverage and cancelling policies, the insurance companies should be looking toward preventive health programs to lower costs because these programs also have the more important benefit of improving people’s health. Some insurance providers have begun to move in this direction, but progress in this area is slow.

Preventive /Complementary Medicine

This is the area where we need to expand our definition of “health care”. The current, mainstream philosophy of health care is to treat the symptoms or treat the disease. This is very limited as it does not address most of the main factors that cause disease, which are diet, exercise habits, lifestyle, and stress. Are not taking care of oneself, eating right, exercising, and managing stress all part of “caring for one’s health”? They are, and if we really want to address costs, as well as the ill health of Americans overall, we need to begin to incorporate these activities into our health care system.

It is well known that regular exercise is the single most beneficial action a person can take to improve his/her health. It is a hedge against a huge majority of diseases and conditions, even some that are genetic. Diet is almost as critical to overall health.

If we are going to continue with the health insurance model of providing health care, then why don’t the insurance providers pay for things like exercise and nutrition classes, or at least offer a significant discount for those who are willing to take these classes? Some providers do, yet this is not universal at all.

There is significant research showing the benefits certain complementary therapies for chronic conditions. Research shows that massage therapy is beneficial for injury and surgical recovery, chronic pain, stress, blood pressure, smoking, repetitive strain, pre-mature infant weight gain, and fibromyalgia, to name a few. I am a massage therapist and have personally seen the benefits of massage for my own clients. I feel that massage is vital to prevention of strain injuries. Many of my clients have gotten more satisfying results from massage therapy than from more traditional forms of medicine, such as physical therapy, chiropractic, and orthopedic; for less money than it costs for less effective treatments. Opponents of health care reform like to criticize Canada’s health care system, but Canada has already figured out that things like massage and acupuncture help people and reduce costs. Massage is covered under the Canadian system.

Elder/End-of-life Care

Did you know that 10-12% of all health costs accrue in the final year of life? What’s even more staggering is that 14% of Medicare payments are made for care occurring in the last 2 months of life.

This is the area that most requires out-of-the-box thinking. One study shows that household assistance can dramatically reduce costs of health care for certain elderly people. This isn’t going to address end-of-life care, but it could reduce costs overall.

End-of-life care is an uncomfortable issue for people because of the religious and moral debates over euthanasia and because of the strong emotions and attitudes surrounding death in our culture.
I have lost loved ones to cancer and while I would have liked to have more time with them, I also believe that the quality of that time is equally or perhaps more important. People shouldn’t have to suffer needlessly. Oregon and Washington have both legalized euthanasia in cases where there is at least two doctors who agree on the prognosis of the patient and I believe that more states will follow. Many people want to die with dignity and on their own terms. Euthanasia allows them to die at the time of their choosing, with loved ones present, and without needless suffering.

In no way am I suggesting that everything shouldn’t be done to save a person who wants to live, but shouldn’t people in that situation be given that choice? It is both humane and practical.

Personal Responsibility

It is in the area of personal responsibility that America needs the biggest change of attitude and education. The majority of Americans do not take responsibility for their own health and health care. Each one of us must take a more proactive approach to our own health. Here are some ways in which everyone can take greater responsibility for their health.

Moderation: We are a nation of indulgence. It’s ok to indulge sometimes, but we should strive for balance and moderation in diet, alcohol, and other forms of consumption.

Listen and talk to your provider: Follow your doctor or health care practitioner’s instructions correctly to avoid further problems. Tell your health care practitioner or complementary practitioner all medications and supplements you are taking, all the symptoms you are having, and your complete medical and family history. This may aid them in their diagnosis and help them to know if any particular treatment is contraindicated for your condition or history. Ask questions.

Know what you are taking: Don’t expect all of your problems to be solved with a pill, prescription or otherwise. Doctors and pharmacists make mistakes. If you have any questions about your treatment, treatment options, or medications, ASK! If you are experiencing side effects, tell your doctor and your pharmacists. Many health problems happen as side effects of the latest over-the-counter diet pill or energy formula. Do research on the prescriptions and supplements you are taking and do not overuse supplements.

Be aware of personal safety: Always wear your seatbelt and use sunscreen when outdoors. Wear appropriate safety gear for the activity you are participating in and know your limits. Avoid situations that put you at risk of being in an accident or becoming a victim. Practice safe sex. Teach your children and teens about safety.

Don’t put off going to the doctor or having tests: Putting off having something checked can cause the issue to become worse and ultimately cost more to treat and carry more risk. Early detection almost always improves the likelihood of easy and successful treatment.

Be active: Find a physical activity you like to do and make it a point to do it. Studies show that people who enjoy what they do for exercise are far more likely to participate in it and enjoy better results. Always stretch before and after exercise to reduce the chance of strain injury.

Reduce stress: Stress is a major factor in illness and in your ability to recover from illness. Understand what triggers stress for you and take steps to minimize the triggers. If you cannot minimize the triggers, or if that is not enough, partake in a hobby. For me, painting and writing are hobbies which are like meditation and very relaxing. Take breaks throughout the day and throughout the year, even if it’s just a day-long getaway. Yoga, stretching, deep breathing and massage are all great ways to relieve mental and physical tension. Take time daily to unwind. Get enough sleep. The lack of adequate sleep leads to all sorts of mental and physical problems.

Reduce Occupational Hazards: Follow all safety rules and regulations appropriate to your job. Be sure your daily activities are done with proper posture and positioning. If your job involves heavy lifting, utilize proper lifting techniques and equipment. Do not go beyond your limits. If you work at a desk, be sure your work area is as ergonomic as possible and make yourself sit with correct posture. Don’t be afraid to ask your employer to allow you to make adjustments to minimize strain. Chances are your employer would rather make adjustments than pay a worker’s compensation claim.

Relationships, mental, and emotional well-being are directly related to physical health. Don’t ignore these issues just because they don’t seem to be important.


“Health is not simply the absence of disease: it is something positive, a joyful attitude toward life, and a cheerful acceptance of the responsibilities that life puts upon the individual.” - Henry Sigerist


References

http://dll.umaine.edu/ble/U.S.%20HCweb.pdf

http://www.huffingtonpost.com/ken-dychtwald/the-biggest-problem-with_b_216446.html

http://www.usatoday.com/money/industries/health/2006-10-18-end-of-life-costs_x.htm

http://www.dailyfinance.com/2009/07/03/reform-health-care-now-end-of-life-costs-are-too-high/

http://www.internethealthlibrary.com/Therapies/MassageTherapy-Research.htm

http://www6.miami.edu/touch-research/Massage.htm

http://www6.miami.edu/touch-research/Acupuncture.htm

http://cat.inist.fr/?aModele=afficheN&cpsidt=20972670

http://www.dcp2.org/file/93/DCPP-CAM.pdf

http://news.bio-medicine.org/medicine-news-2/For-profit-hospital-ownership-means-higher-costs--Dartmouth-VA-study-finds-10531-1/

http://www.dailyfinance.com/2009/06/02/reform-health-care-now-insurance-reimbursements-make-no-sense/

http://www.nonprofithealthcare.org/reports/5_value.pdf

http://www.aflcio.org/issues/healthcare/facts_insurancecompanyprofits.cfm

http://www.edrugsearch.com/edsblog/study-prescription-drugs-cost-more-in-poor-neighborhoods/

http://radiology.rsnajnls.org/cgi/content/full/221/3/576

http://news.bio-medicine.org/medicine-news-3/A-little-household-help-may-reduce-health-care-costs-among-elderly-6292-1/