Posted in Affordable Care Act (ObamaCare), Economic Issues, Employer Mandate, Employer-Sponsored Health Plans, Federal Exchanges, Government Regulations, Health Insurance, Individual Mandate, Individual ObamaCare Market, Insurance subsidies, News From Washington, DC & Related Shenanigans, Policy Issues, Rule of Law, State-Run Insurance Exchanges, Subsidies, Tax Policy, U.S. Constitution, Uncategorized

Will John Roberts Decide a ‘State’ Is Not a ‘State’? – Terry Jeffrey – Page full

Without the exchanges and their subsidies, far fewer people would be subject to both the individual and employer mandates. Had the IRS not unilaterally extended to the federal exchanges the subsidies that the language of the law only extends to state exchanges, those individuals and businesses would be free of the mandate.

In Halbig v. Burwell, a group of employers and individuals sued the federal government, arguing that the IRS regulation contradicted the plain language of the ACA as passed by Congress and signed by President Barack Obama.

Two members of a three judge panel on the Appeals Court did a very simple thing: They read the law and the IRS regulation. They then determined the regulation did something the law did not authorize: It provided subsidies to people buying insurance on the federal exchanges.

via Will John Roberts Decide a ‘State’ Is Not a ‘State’? – Terry Jeffrey – Page full.

Posted in Canadian Health System, Economic Issues, Government Regulations, Government Spending, Insurance subsidies, Liberty, Medical Costs, Patient Choice, Policy Issues, Price Tansparency, Tax Policy, Uncategorized

Health Costs in Canada Increased 2.85 Times Faster Than Inflation in the Last Decade | Health Policy Blog |

Health care in Canada is not “free.” Canadians often misunderstand the true cost of our public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care, and partly because Canadians cannot readily determine the value of their contribution to public health care insurance because there is no “dedicated” health insurance tax.


In 2014, the estimated average payment for public health care insurance ranges from $3,592 to $11,786 for six common Canadian family types, depending on the type of family. For the average Canadian family, between 2004 and 2014, the cost of public health care insurance increased about 1.5 times faster than average income, 1.3 times as fast as the cost of shelter, 1.6 times as fast as clothing, and more than three times as fast as food. The 10 percent of Canadian families with the lowest incomes will pay an average of about $523 for public health care insurance in 2014. The 10 percent of Canadian families who earn an average income of $57,818 will pay an average of $5,522 for public health care insurance and the families among the top 10 percent of income earners in Canada will pay $37,239.

via Health Costs in Canada Increased 2.85 Times Faster Than Inflation in the Last Decade | Health Policy Blog |

Posted in Affordable Care Act (ObamaCare), Economic Issues, Federal Exchanges, Government Regulations, Government Spending, Individual Mandate, Insurance subsidies, Medical Costs, News From Washington, DC & Related Shenanigans, Policy Issues, Price Tansparency, Rule of Law, State-Run Insurance Exchanges, Subsidies, Tax Policy, Uncategorized

Another Cover-Up? IRS, Social Security Administration Not Co-Operating with Investigation of Fraudulent ObamaCare Enrollment | Health Policy Blog |

Click image to read rest of story

“At the beginning of last month, this blog discussed the fact that over two million of a total of eight million ObamaCare applications lacked income, citizenship, or immigration data to verify eligibility for ObamaCare’s tax credits. In the middle of the month, the Administration began contacting “hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.”Now, the Inspector General IG of the U.S. Department of Health & Human Services has confirmed that “The deficiencies in internal controls that we identified may have limited the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment…”That’s putting it mildly. Far worse is that the IG is unable to investigate eligibility based on income or residency because the IRS and Social Security Administration appear not to be co-operating with his investigation pp. iv-v:”

via Another Cover-Up? IRS, Social Security Administration Not Co-Operating with Investigation of Fraudulent ObamaCare Enrollment | Health Policy Blog |

Posted in Economic Issues, Federal Exchanges, Individual Mandate, Individual ObamaCare Market, Insurance subsidies, Medicaid, Medical Costs, Policy Issues, Small group market, State-Run Insurance Exchanges, Subsidies, Tax Policy, Uncategorized

Obamacare’s Exchanges Fall Well Short of Enrollment Target:

Is 9% Good Enough?

Of 38 million Eligible for Coverage, only about 3.4 million who lacked prior coverage have actually activated their ObamaCare policy by paying

38 million Eligible for coverage ⇒ 

            ⇒ 8 million “signed up” ⇒

   ⇒ 6.8 million actually paid ⇒

⇒ 3.4 million did not have prior coverage

BL obamacare enrollment attkisson   Many who were considered uninsurable now have affordable policies. But the Affordable Care Act has shifted the cost burden for those who already had insurance. More policies now have bigger deductibles and cost more. “In general, healthy people are paying more and unhealthy people are paying less,” says a source who supports and helped implement Obamacare but is disappointed with the results to date, “with those above-average [income] tending to pay more and those below-average [income] tending to pay less.” “Is the new law effective in reducing the number of uninsured? Yes, but so far not very,” he says. Key questions include:

  • How many actually have enrolled?
  • How many of those were previously uninsured?
  • How has Obamacare affected the overall pool of uninsured?
  • What percentage of eligible people have signed up?
  • What’s the cost?

Enrollment: Less Than Advertised

But the 8 million figure is overstated because it counted people who weren’t actually covered because they hadn’t paid their premiums, which Blue Cross, analysts and the government agree is in the 15 percent to 20 percent range. Estimates of how many marketplace enrollees were previously uninsured range from about one-third to more than half, depending on the survey and the methods used. A recent Kaiser Family Foundation survey found that 43 percent of those who purchased insurance through the marketplace already had insurance; 57 percent are newly insured. “The enrollment figures for marketplace coverage will grow over time, assuming that the exchange insurance plans don’t fail as a result of adverse selection,” said the source who supports and helped implement Obamacare. “But the impact on reducing the uninsured so far is very disappointing.”

Obamacare’s Exchanges Fall Well Short of Enrollment Target.

Posted in Deductibles, Economic Issues, Employer-Sponsored Health Plans, Individual Mandate, Individual ObamaCare Market, Insurance subsidies, Medicaid, Medical Costs, Policy Issues, Small group market, Subsidies, Uncategorized

Individual market enrollment: Updated view | McKinsey on Healthcare

All of the findings in this Intelligence Brief represent a view of the rapidly evolving individual insurance marketplace through February 13th. As such, enrollment trends may differ materially on March 31, 2014, the end of the open enrollment period. Six key observations emerged from our February survey findings:

  • Previously uninsured respondents accounted for 27 percent of February respondents who reported having selected a new 2014 product i.e., insured who switched and previously uninsured who enrolled, up from 11 percent in earlier surveys.
  • In total, 10 percent of all previously uninsured February respondents said that they had enrolled in a product, up from 3 percent in January.
  • More than three-quarters of those who reported having obtained coverage also said they had paid their premium out of all February respondents who said they had selected a new 2014 product, i.e., insured who switched or uninsured who enrolled. The payment rate was higher among the previously insured 86 percent than among the previously uninsured 53 percent.
  • A smaller proportion of the respondents who had not yet enrolled reported that they are likely to enroll, compared to prior surveyed months. However, most 65 percent of those who said that they intend to enroll continue to be the previously uninsured.
  • The most common reason for not enrolling cited by both previously insured and previously uninsured respondents continues to be perceived affordability challenges this was cited by ~50 percent of the respondents who had not yet enrolled.
  • Over 80 percent of the respondents who cited affordability as the reason for not enrolling are eligible for subsidies; 66 percent of these consumers were not aware of their subsidy eligibility status or subsidy amount.

via Individual market enrollment: Updated view | McKinsey on Healthcare.

Posted in Affordable Care Act (ObamaCare), Economic Issues, Employee Benefits, Employer Mandate, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Government Regulations, Health Insurance, Individual Mandate, Individual Market, Individual ObamaCare Market, Insurance subsidies, Medicaid, Patient Choice, Tax Policy, Uncategorized

Nonsensical Policies Lead To Nonsensical Survey Results – by Robert Nelson, MD

New Kaiser Survey of People with Non-Group Insurance Finds Nearly Six in 10 People Enrolled in Marketplace Plans Were Previously Uninsured

images (43)
Random guy pondering stuff…

Above is the title of a recent Kaiser Foundation article regarding a survey of 742 adults age 18 – 64 who purchased their own insurance between April 3 to May 11, 2014.  After reading the survey and pondering it for a while, here are several titles that I feel are more apt for the subject matter:

1)  The news that isn’t news.

2)  Tell me something I didn’t know (or didn’t anticipate).

3)  Nonsense in, nonsense out.

4)  Considering a population of 259 million non-elderly people, you would think we could come up with a better way to cover 8 million out of a group of 15 million people (non-group market) that would be well received by all those it was purported to help.

I am not criticizing Kaiser here.  They just reported what the survey found.

However, the disparate results of the survey should tell us something much more important than the percentages of this and that. There are a lot of nitty-gritty statistics that you can read in this survey if you wish, but here is the take home version.

chartshowingthosethatbenefittedfromenrollingI quote from article:  “Among those who say they benefited, the most commonly cited ways are through lower costs and expanded access to care and insurance. Those who feel negatively affected are most likely to cite increased costs, with much smaller shares citing other concerns such as the law’s individual mandate, cuts to benefits or choices, and policy cancellations. There is significant variation in these perceptions by individual characteristics, with those who report getting financial assistance in the marketplaces most likely to feel they benefited, and those who say they’ve had a plan cancelled most likely to say they were affected negatively.”

Did I read that right?  Are we even talking about the same product here?

So are we to believe that the insurance offered to the non-group market seekers is both good and bad for the SAME reasons? If the ACA represents a viable “fix” for the problem, how can cost & access be both a detriment and a benefit. This can only be the case if: 1) Some people are forced to do something that is not in their best interest, and 2) other people are enticed to take the same action because of artificially low prices derived from subsidies paid by other people’s money.

That doesn’t sound like a product that can stand on its own value merit.

Let’s look at this from the beneficiary standpoint. So how can the same product, supposedly filling the same need for uninsured people be judged so radically different by people in different circumstances?   Maybe, just maybe, there is a flaw in the design.  A design that forces people to do something not in their own self interest due to perverse economic incentives, such that the product is only attractive to those who are in the most desperate of circumstances.

So let’s look at it from a policy standpoint.  How can a law that is supposed to fix one basic problem (lack of affordable insurance coverage) have such divergent effects on differing groups of people who apparently are accessing the same product?  Or, how can it have such divergent effects on similar groups of people with different tax filing statuses or employment situations?

There are multiple factors at play here, not the least of which are the litany of reasons why people enter the individual market and the high percentage of those same people who enter & exit the market in the same year. Basically, it is a segment of the population in extreme flux, representing only about 5 – 6% of the non-elderly.

The more important factor, in my opinion, is that the government treats employer-sponsored health benefits vastly different from individually purchased plans.  It does so by giving very generous tax breaks to employers and employee contributions, whereas those in the individual (non-group) market get almost no tax help or offsets when it comes to purchasing health insurance.  And this is true regardless of salary or hourly wage of the employee. This disparity existed prior to the ACA, but was never fixed by ObamaCare.  The government continues it’s biased, non-neutral approach to the individual market.  This inequity, along with ACA mandates, has all but pushed the private non-group market out of existence.  So much for the competitive market place that the ACA was supposed to usher in.  In political speak, maybe we should refer to this a the “war on individuals”.

The intellectual architects of the original-intent version of ObamaCare are more than pleased when anyone signs up for an compliant government exchange plan; and the heavier the subsidy, the better.  After all, for them the end-game is to move the market toward single payer.  They are equally as enthusiastic about disregarding subsidies when they tally the costs to the consumer.  They also don’t seem to mind that many compliant plans may have skimpy networks in the form of reduced choices in PCP/specialists and higher out-of-pockets costs for subscribers. As long as someone is “covered”, regardless of the limitations to access to care or costs, they check the box in the win column for ObamaCare: Mission accomplished.

Die-hard critics of the ACA, who don’t have a clear alternative plan, will point to the part of the survey that indicates folks with cancelled plans feel as if they were negatively impacted by the ACA due to costs, unfair mandates, less choices and canceled plans. – as if the pre-ACA landscape for those in the individual market was a walk in the park!

If we continue to view “reform” as nothing more than tinkering with the current third-party dominated healthcare landscape, then we will be stuck with some version of these two no-win outcomes. cropped-timeforchange-scaledviewed14.jpg

There is another alternative that is much simpler than the Rube Goldberg contraption we call ObamaCare.  It requires no mandate, no IRS verification of income, no verification of how many jobs you have, no checking with the State’s Medicaid eligibility, etc…  This other alternative keeps the government role neutral, provides a legitimate public option for insurance to anyone who wants it, doesn’t raise taxes and doesn’t destroy the private insurance market.  Read more about other alternatives herehere, here and here.

These viable policy alternatives, combined with Direct Primary Care for routine primary medical needs, would bring a sea change to the Healthcare landscape by simultaneously controlling costs and increasing access.   That would make the basis of a future survey I will look forward to reading.

Posted in Consumer-Driven Health Care, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Health Insurance, Insurance subsidies, Medicaid, Medical Costs, Patient Choice, Patient-centered Care, Policy Issues, Price Tansparency, Quality, Uncategorized

The Physician’s Role in Health Plan Networks: Can We Serve Two Masters? by Robert Nelson, MD

i-51b608f51abbcacdb24f53e612e59d77-Administration costsThe term “network” tends to conquer up positive connotations in our minds most of the time.  In fact, most networks tend to be good things.  But sometimes networks operate more like cartels that end up serving the interest of a narrow industry, rather than watching out for the consumers and alleged beneficiaries they purport to serve.

One such example where networks behave more like cartels are Health Plan Networks. This is not a conspiracy or anything illegal.  They are simply designed to behave like cartels.  Make no mistake,  health plan networks exist to control their own costs and insure profitability, not to provide “selection” and “quality” to the subscribers. I am not criticizing profit; that it is not the problem here.  Profit is essential to the viability of any business and is a proper reward for risk taking.

The subscriber members in a health plan network, for the most part, don’t decide what provider to see based on quality parameters, price, personality or treatment philosophy of the doctor.  First and foremost the decision hinges on IF the provider is in the network. Thus, doctors have essentially become subcontractors for the Health Plan network; in reality they work for the network, not the patient.

The provider has been relegated to be a list of “approved” shops similar to how you chose a repairs shop for your automobile. Doctors don’t bill the patient directly (except the horrid practice of balance billing brought to you by territorial and punitive practice of penalizing providers and patients for not staying in the network) nor do they have authority to negotiate directly with the patient on price, scope services or delivery portals.  This is very similar to the auto repair shop that accepts insurance payments directly. They simply submit the “work” they did on behalf of the subscriber to the Plan, who turns around and pays a contracted rate that is usually far less than the posted charge.

This revenue cycle, as it is called in the industry, adds considerable and unnecessary expense to routine health care, and takes away from patient care time.  And, it certainly doesn’t sound like the basis of a strong Doctor-Patient relationship to me.   It more closely resembles the relationship you might have a production home builder where the doctor plays the role of the subcontracted worker; the worker being essential to fulfill the contract, but easily replaceable.  See  the graphic titled “Exhibit 8” above.

For the patient-subscriber, they are obligated to pay the same co-pay regardless of the simplicity or complexity of the visit. While their experience and satisfaction may vary from provider to provider, the fees do not, regardless of real or perceived quality on the part of the patient and regardless of outcome. This is in addition to the fact that people’s premiums keep going up and up with no measurable improvement in health, access, service level or quality; and there is no incentive built into the rate structure even if one is frugal with utilization (in most instances).  I submit to you as an example of this, the narrower networks of many of the ACA public exchange plans that contain fewer choices, but higher out-of-pocket cost in many situations.  This is rationing by design, because it offers lots of “coverage”, but puts limits on who can provide the care due to very limited network participation. This is just one more example of the reality that the price we pay for healthcare in our current system is paid for in wait times and inconvenience, not just in dollars.

Another example of the perverse incentives and bureaucratic nonsense of policy makers that is inherent in our third-party network payment system is the “after-hours incentive” paid to providers for seeing Medicaid recipients after normal business hours, weekends and holidays.  But, here is the odd thing:  the patient is unaware that any of this is going on.  Because they are not in the loop, the incentive becomes nothing more than a moral hazard and a way to game the system, especially if the rendering facility or office has extended hours to begin with.  Thus, the Medicaid patient does not benefit one way or the other; nor are they penalized for going to the urgent care at 8 pm instead of waiting until morning to see their PCP.  So, the same case of strep throat costs Medicaid one rate during the day, but after 5:30 or weekends it costs more.  There is actually a billing code that the provider submits for this circumstance and Medicaid still pays facilities the premium even if they are normally open after normal hours, weekends and holidays anyway.  How crazy is that?

For private insured folks, there is really no incentive not to go to the doctor, other than the small co-pay.  Not that we should erect tough barriers to see the doctor, but let’s be real here.  Do we really want to be filing claims for work excuses for minor issues such as allergies, boo-boos and backaches from too much golf?   On average, out of every dollar spent on healthcare only about 11 cents comes directly from the patient; the remainder comes from a third-party.  In economic terms, this creates artificially high demand because they buyer is “insulated” from price signals, thus insensitive to price issues especially after deductibles are met or for items “covered” at 100%.  This disconnect causes the cost of the main financing vehicle (the health plan) to escalate because it is largely uncoupled from the modulating effect that demand has on prices as compared to the same services being purchased directly.

On the provider side, the incentive is to over-document, over-test and over-treat because doing so generates a higher level billing code.  Doctors also get pressure from third party payers to practice what is kindly called “evidence-based medicine”.  These often out-of-date, one size fits all disease management guidelines often fall short of what is best for the patient and subjects them to unnecessary (or unwanted) medications and ill-advised testing.

All the issues described above add a tremendous cost burden to healthcare with little or no benefit to outcomes or quality of life for patients. Axiom: The excessively high posted CPT charges (the charge master’s price) justify the premiums and the high premiums support the posted charge, thus the built-in profit for the health plan. The incentive for the provider is to see as many patients for billable encounters as possible and generate code-worthy “work”, thus more reimbursements. These perverse economic incentives are not lost on patients.  Healthcare is the only industry I can think of where we require the recipient of services to agree to pay before they know how much it will actually cost!

cartoon6264The economic distortions and nonsense described in the previous paragraphs would not occur if physician’s did not have contracts with third-party networks, which dictate the accepted portals of care, the coding requirements for billing and how much the doctor gets paid.

As physicians, how should we respond to the situation we find ourselves in when most doctors are so dependent on this business model for revenue? Indeed, the way we get paid and by whom affects the solidarity and therapeutic relationship that doctors have with their patients. Our individual and collective response(s) will have serious consequences as it relates to the sanctity of the doctor-patient relationship and for long-term autonomy of the medical profession.

With all we know about the perverse economic characteristics and consequences of the health plan-controlled billing cycle, including 40 years of an needlessly inflated healthcare costs which has led many patients into bankruptcy , do we really want to continue to perpetuate this legalized scam by acting as billing agents for health plan networks?

A gradual movement towards total non-participation in those networks that have for too long controlled the purse-strings on healthcare , purposefully shielding it from the discipline of the market, is the only force strong enough to bend the cost curve down in favor of our patients and restore professional autonomy to the practice of medicine.

I see the movement referred to as Direct Pay practice models as the single most viable free-market alternative to our current third-party controlled system  – which includes ObamaCare.  In reality, the PPACA just doubles down on a dysfunctional system that is highly inflationary, and one that is uncoupled from normal economic forces and one where the patient is not the central focus.  The main focus of the so-called Affordable Care Act was on coverage and perceived cost, without taking into consideration patient choice, wait times, delivery modality or the real aggregate price tag.  If we’ve learned anything from ObamaCare, it is that coverage does NOT equate to care.

So why did I pick on Health Plan networks? There are a lot of good doctors and health providers in these networks and patient depend on them, right?  I am focusing the light here because they are the back-bone of the entire third-party payment system and because their existence hinges on the contractual participation by doctors. So what about patient participation? Aren’t they important to hold a network together?  Not really.  IF doctors don’t participate, then the subscriber simply becomes a free-agent policy holder without the network constraints.  Without doctors, there are no networks.

DPC-Efficient-Direct-Primary-Care-Medical-HomesIf I could wave my Healthcare Reform magic wand (and scare away all the anti-trust lawyers) so that all network contracts with doctors were dissolved instantly, we would transform/restore outpatient medical care overnight. With doctors not submitting claims for patients and not accepting contractual assignment, we would automatically have a couple hundred million free-agent patients and several hundred thousand independent physicians seeking mutually beneficial professional relationships.  Price transparency would appear everywhere and doctors would again place service, trust and quality at the forefront.

middleman_cartoon_t600x427Direct Primary Care, and Direct Pay Medicine in general, is the singular most important force we have to actually bend the cost curve down in real dollars and at the same time preserving the doctor-patient relationship. There is more at stake here than having a manageable panel size and getting home on time.

Non-Participation in networks by providers en masse is one of the few cards we have left to play if we hope to save the private independent practice of medicine.  God help patients and doctors if we lose that.  To borrow a phrase from the Gospel according to Matthew (Matt 6:24) – We cannot serve two masters.




Posted in Affordable Care Act (ObamaCare), Economic Issues, Individual Mandate, Individual Market, Individual ObamaCare Market, Insurance subsidies, Patient Choice, Policy Issues, Uncategorized

Make Sense? Competition, Not Higher Premiums, May Turn Out to Be the Biggest Threat to Obamacare Buyers | The Health Care Blog

But for 2015, what could cause the biggest problem for Obamacare consumers, Houchens pointed out to me last week, is if an insurer reduces its premiums. Or if a new compeitor enters the market in 2015 with lower premiums than insurers were offering in 2014.

If that idea makes your head spin, welcome to Obamacare, where up is down and down is up—at least compared to how health insurance used to work. It’s what I’ve taken to calling the weightlessness of Obamacare.

Here’s how low-cost competition actually could be worse for Obamacare consumers:

via Make Sense? Competition, Not Higher Premiums, May Turn Out to Be the Biggest Threat to Obamacare Buyers | The Health Care Blog.