Posted in Access to healthcare, Consumer-Driven Health Care, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, Medical Practice Models, Policy Issues, Tax Policy, third-party payments, Uncategorized

Who Pays for Your Healthcare Matters

By Robert Nelson

Zero co-pays. No co-insurance. No surprise medical bills! Considering the inflated prices we pay for healthcare, who could pass up that deal, right?

Are the new generation of value-based employer-sponsored Direct Contracting Health Plans, which often include Direct Primary Care, a great deal and more efficient use of our healthcare dollars? Absolutely yes!

real-health-care-expenditures-and-third-party-largerBut we can’t lose sight of the economic reality that individuals always pay the cost of benefits, either directly or indirectly.  And linking benefits to employment has been a colossal policy mistake and the genesis of job-lock and our 3rd-party payer system, which has been the source of runaway costs for 50 years. As the graph illustrates, insurance (3rd party payer) is now a near surrogate for total healthcare costs!

Don’t be fooled. Within the modern paradigm of healthcare financing, employers don’t pay for our healthcare. Our healthcare expense, no matter how it is structured, IS part of our compensation and a huge portion of of it.

images-223535545945618981307.jpgFACT: Every dollar of tax-favored benefits paid by our employer reduces our take-home pay.

The beauty of Direct Primary Care is the portability (no job lock) and affordability which can exist independent of the size or benefit package of the employer. But the foundation which aligns the incentives is based on the identity of the customer. This is why we have to be careful to match the buyer with the recipient of care whenever possible. To insert another 3rd party, even the employer, undermines the sovereignty of the patient and the independence of the physician.

The supply side of healthcare has served the wrong customers for far too long. DPC should not make that same fatal error by exchanging its essence for a pipeline of patients.

This linkage highlights the importance of policy decisions regarding use of HSA funds; the importance of allowing HSA dollars to pay premiums AND DPC fees can’t be overstated.

For DPC, and Direct Contracting at-large, to dig us out from under the boot of the 3rd party apparatus it must remain accessible to the sole proprietor, independent contractor and very small businesses that don’t have “health plans.” And moving to defined contribution plans and away from defined benefit plans will help get us there.

third-party-2Getting first dollar decisions in hands of consumers will also be deflationary and spur competition; and essential to the goal of eventual portability & ownership of benefits. To do otherwise, with too much focus on a new & improved generation of employer-sponsored healthcare plans, will lead us right back to where we started.

Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, CPT billing, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Patient Choice, Policy Issues, Uncategorized

Why Value-based Payment Methods Won’t Fix Healthcare

I’ve read several posts today on so called “Value-based payment” strategies and I couldn’t resist adding my 2-cents.

VBP can’t fix these fundamental problems because it is still based on a price-opaque shell game I like to call Fee-for-Coding, which results in:

1) Price insensitivity on the utilizer’s part.

2) Misaligned incentives on the provider’s part.

3) Lack of important price signals between buyers and sellers due to lack of advance pricing capabilities.

VBP utilizes the same fundamentally flawed economic system as our current billing model.

Moving to value-based care will require…

1) A system where prices are known in advance of care (not trauma or emergency care where extent of injuries or illness are unknown at onset – but even still a lot of those can be estimated ahead of time based on scenarios).

2) …that physicians be paid to be available to solve our problems, where payment is not tied to documenting work in a chart.

3) …that we move to a system that is based on defined contributions as opposed to defined benefits. As John C. Goodman is fond of saying, “money should follow people”, not programs and insurance policies.

Value will be elusive until we let the discipline of the market work in healthcare.

https://www.linkedin.com/pulse/why-value-based-payment-methods-wont-fix-healthcare-robert-nelson-md/

Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Free-Market, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, Medical Practice Models, out-of-pocket costs, Patient Choice, Policy Issues, Price Tansparency, primary care, Quality, Uncategorized

FORBES | Employers Could Slash Their Health Costs Overnight. So, Why Don’t They?

John C. Goodman

“I am often asked if the free market can work in health care. My quick reply is: That is the only thing that works. At least, it is the only thing that works well.

Show me a health care market where there is no Blue Cross, no Medicare and no employer. I’ll bet it’s a market that works a lot like the markets for other goods and services.

In Overcharged: Why Americans Pay Too Much for Health Care (Cato: 2018), law professors Charles Silver and David Hyman make this same point in spades.

After several decades of trying everything from managed care to value-based purchasing, employers need to sit up and take note. The authors say the only thing that really holds down costs is giving money to the employees and letting them buy their own health care. “There is no health care cost crisis in the retail sector,” they write, and there “never has been.”

Atlas MD in Wichita, Kansas, for example, provides just about every service you can get at a primary care doctor’s office for $50 to $75 a month for adults (depending on age) and $10 for a child. Doctors are available by phone or email 24/7. Drugs cost less than what Medicaid pays. Medical tests are cheap.  A cholesterol test is $3, a tiny fraction of the charge that the lab they deal with bills to insurers. An MRI scan costs $400 instead of the typical third party charge of $2,000.

What about expensive hospital care? That too can look like retail medicine if you know where to look. The Surgery Center of Oklahoma (SOC), founded by Drs. Keith Smith and Steve Lantier, posts prices for 112 common surgical procedures. They deal mostly in cash and they don’t take Medicare or Medicaid or negotiate prices with insurance companies. One of SOC’s competitors is Integris Baptist Medical Center in Oklahoma City. The contrast couldn’t be starker, as the authors note:

Integris charged $33,505 for a complex bilateral sinus procedure, which helps patients with chronic nasal infections. This bill covered only hospitalization; the fees for the surgeon and the anesthesiologist were extra. At SOC, the all-inclusive price for the same operation is $5,885. Not surprisingly, Integris’s bill was loaded with overcharges, including $360 for a steroid available at wholesale for just 75 cents, and $630 for three doses of a pain killer called fentanyl citrate, which altogether cost the hospital about $1.50.”

New developments in retail medicine are almost always the product of entrepreneurial thinking. Sometimes the entrepreneurs are medical doctors. Sometimes they are business types with a strong interest in eliminating the many inefficiencies in traditional health care.”

Source: Employers Could Slash Their Health Costs Overnight. So, Why Don’t They?

Posted in Access to healthcare, Affordable Care Act (ObamaCare), American Presidents, Defined Contribution Benefit Plans, Economic Issues, Employee Benefits, Employer Mandate, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Health Reimbursement Arrangement (HRA), Healthcare financing, Individual Market, Individual ObamaCare Market, Individual Underwriting Standards, Medical Costs, News From Washington, Patient Choice, Policy Issues, Portable Insurance, Pre-existing Conditions, The Triple Aim, Uncategorized

Donald Trump Takes A Big Step Toward Personal And Portable Health Insurance

READ THIS ARTICLE below if you want to understand the degree to which this ruling is an important step for healthcare reform.

But as John C. Goodman points out, administrative ruling can only go so far without being codified by legislative action.

Some believe the Individual Market is too weak to revive, given the hit it took as as result of the ACA.

I am optimistic that this ruling to utilize HRA is this manner will be a “shot in the arm” and revitalize the market again.

This hopefully highlights the benefits, and spurs popularity, of a defined contribution approach as a means to purchase health insurance.

Anything that makes us less dependent on ESI and gives more portability & options, freeing the labor market from job-lock is a good thing. -Forum for Healthcare Freedom

John C. Goodman

https://www.forbes.com/sites/johngoodman/2019/06/18/donald-trump-takes-a-big-step-toward-personal-and-portable-health-insurance/

Posted in Access to healthcare, Affordable Care Act (ObamaCare), American Presidents, Defined Contribution Benefit Plans, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Health Reimbursement Arrangement (HRA), Healthcare financing, Individual Market, Large group insurance market, Medical Costs, medical inflation, News From Washington, DC & Related Shenanigans, out-of-pocket costs, Policy Issues, Portable Insurance, Price Tansparency, Uncategorized

Trump could revolutionize the private health insurance market

Some believe the Individual Market is too weak to revive, given the hit it took as as result of the ACA.

I am optimistic that this ruling to utilize HRA is this manner will be a “shot in the arm” and revitalize the market again.

This article below highlights the benefits of a defined contribution approach as a means to purchase health insurance. Anything that makes us less dependent on ESI and gives more portability & options, freeing the labor market from job-lock is a good thing. – Forum for Healthcare Freedom

Avek Roy

“Last week, the White House finalized a rule that allows employers to fund health reimbursement arrangements (HRAs) that can be used by workers to buy their own coverage on the individual market. This subtle, technical tweak has the potential to revolutionize the private health insurance market…

The council found an elegant way to give employers the opportunity to voluntarily convert their health benefits from a defined benefit into a defined contribution. For example, an employer could fund an HRA for each worker and their family, which they could then use to shop for a plan that best suits their needs.”

https://www.washingtonpost.com/opinions/trump-could-revolutionize-the-private-health-insurance-market/2019/06/17/bc8ccce4-9124-11e9-aadb-74e6b2b46f6a_story.html

Posted in Access to healthcare, Affordable Care Act (ObamaCare), American Presidents, Consumer-Driven Health Care, Defined Contribution Benefit Plans, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Health Reimbursement Arrangement (HRA), Healthcare financing, Individual Market, Individual ObamaCare Market, Medical Costs, Patient Choice, Policy Issues, Portable Insurance, Tax Policy, Uncategorized, Uninsured

Trump’s new rule will give businesses and workers better health care options – CNN

A HUGE WIN FOR THE LABOR MARKET AND A STEP TOWARDS ENDING JOB-LOCK!

This is one of the most positive and substantive changes in healthcare policy to come out of Washington, D.C. in the past 40 years.  It finally pierces the veil of separation between the Group Market & the Individual Market, helping to dissolve the perverse tax incentive which ties health insurance to employment. ~ Forum for Healthcare Freedom

“Starting on January 1, 2020, employers will be able to offer their workers HRAs to buy individual market coverage for themselves and their families. The administration’s new rule addresses a major inequity by, in effect, providing the same tax advantage that traditional employer-sponsored group plans receive — exclusion of premiums from federal income or payroll taxes — to coverage that workers in the individual market purchase from an HRA.

The rule will significantly expand worker options since 80% of firms that provide insurance currently offer only one type of plan. Now, workers will be able to use tax-advantaged money from their employers to buy coverage of their choosing. This new flexibility will allow people to maintain their coverage when they switch jobs.

In particular, this new rule should help small business workers by making it possible for employers to fund coverage with less hassle and cost than maintaining a traditional group health plan. Between 2010 and 2018, the proportion of workers at firms with three to 49 workers covered by an employer plan fell by more than 25%. This rule should help reverse that decline. The rule also makes it easier for small businesses to compete with larger businesses for talent.

It will take roughly five years for the full impact of the rule to hit — at which point, we expect 11 million workers and family members to use HRA funds to obtain individual coverage. The HRA rule may increase the size of the individual market by upwards of 50%, and should spur a more competitive market that drives insurers to deliver better options to consumers.”

Source: Trump’s new rule will give businesses and workers better health care options – CNN

Posted in big government, Cost of labor, Crony Capitalism, Defined Contribution Benefit Plans, Economic Issues, Education, Employee Benefits, Entitlements, Free Society, Free-Market, Government Regulations, Government Spending, Health Insurance, Healthcare financing, Job loss, Liberty, Organizational structure, Policy Issues, Poverty, Uncategorized, Wealth, Welfare State

An Inquiry into the Nature and Causes of the Wealth of Sweden: A Path from Poverty to Prosperity

“Without economic growth, there is no wealth to share.”

Johan Norberg

Lessons for America?

Welcome to another edition of Friday’s Philosophical Foray beyond Healthcare!

One of the most important history lessons in the power of economic freedom to alleviate poverty and improve the lot of the ordinary citizen did not occur during the industrial revolution in America.  It has its roots in a relatively obscure Swedish leader & political philosopher. He was a Finnish-Swedish clergyman, writer, and political philosopher, whose ideas and advocacy pre-dated that of Adam Smith. 

The freedom of Swedish people to pursue self-determination which empowered individuals to trade, act and associate voluntarily with others was championed by the words & deeds of Anders Chydenius (1729 – 1803).

After his death in 1803, Chydenius’s libertarian ideas where perpetuated by the Aftonbladet news publication in Stockholm, a news outlet started by Lars Johan Hierta, which was instrumental in spreading the message of economic freedom against the guilds and mercantilism which dominated Swedish economic policy under the King.

In 1840, the new Finance Minister Johan August Gripendstedt, the architect of Sweden’s new market economy, continued the market reforms. His policies ignited economic expansion and growth based on free trade, sound monetary policy and modicum of govt regulations. 

Between 1850 – 1950, Sweden’s per capita GDP increased almost seven-fold.  Infant mortality improved by 86% and life expectancy increased by 26 years!  By 1950 Sweden was one of the richest developed countries and had one of the most open and deregulated economies in the world; with tax rates LOWER that the United States and most European Countries.

Until 1960, Sweden had low taxes, minimal gov’t intervention in the economy, free trade and strong private property rights.

To explore this subject in detail, please watch Johan Norberg discuss Sweden’s rise to prominence in his video below.

Posted in Access to healthcare, advance-pricing, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, Deductibles, Defined Contribution Benefit Plans, Direct-Pay Medicine, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Federal Exchanges, Free-Market, Government Spending, Health Insurance, Health Reimbursement Arrangement (HRA), Health Savings Accounts (HSA's), Healthcare financing, Independent Physicians, Individual Mandate, Individual Market, Individual ObamaCare Market, Individual Underwriting Standards, Insurance subsidies, Liberty, Medicaid, medical inflation, Patient Choice, Patient-centered Care, Policy Issues, Pre-existing Conditions, Price Tansparency, Private Exchanges, Quality, Reforming Medicaid, Self-Insured Companies, Self-Insured Plans, State-Run Insurance Exchanges, Subsidies, Tax Policy, Uncategorized, Uninsured

All the Problems plaguing ObamaCare are Solved by These 12 Bold Ideas

The Sessions – Cassidy bill:

Source: Summary | Goodman Institute for Public Policy Research