Posted in Access to healthcare, Consumer-Driven Health Care, CPT billing, Direct-Pay Medicine, Direct-Pay Practice Models, Doctor-Patient Relationship, Economic Issues, Employer-Sponsored Health Plans, Government Regulations, Health Reimbursement Arrangement (HRA), Health Savings Accounts (HSA's), Healthcare financing, Individual Market, Large group insurance market, Medicaid, Medical Costs, Medical Practice Models, Medicare, Patient Choice, Patient-centered Care, Policy Issues, Portable Insurance, primary care, Protocols, Reforming Medicaid, Reforming Medicare, Tax Policy, Technology, third-party payments, Uncategorized

Trump’s New Vision for Health Care

Hats off to John C. Goodman again! His work in leading the effort for market-based healthcare reform over the past 4 decades, and highlighting the government’s role in the dysfunctional mess we labor in, is second to none.

This Forbes article lays out a most concise and accurate rendering of what healthcare has become and why…and what to do about it.

If you’re tired of the hearing healthcare pundits wax feverishly about their favorite villains and how more regulations are the answer; or if you’re just a novice starting to explore the Healthcare conundrum, Dr. Goodman’s work is required reading. I recommend starting here and then circling back to some of his earlier work. The book “PRICELESS” is a recommended next step!

https://www.forbes.com/sites/johngoodman/2019/01/14/trumps-new-vision-for-health-care/

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Direct-Pay Medicine, Doctor-Patient Relationship, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Patient Choice, Policy Issues, primary care, Tax Policy, Uncategorized

Congress and the IRS have stranded patients in SwampCare


Why can’t patients use their HSAs – supposedly their own money – to pay DPC fees? Because the IRS says they can’t. Not only that, if they have a DPC membership, they can’t even make a contribution to their HSA.

Congress was considering a simple bill to fix that – H.R. 365. But on the way to the House Ways and Means Committee, provisions were sneaked in, with very limited time to comment, and the bill number was changed to H.R. 6317. Some things from the Affordable Care Act (ACA) were inserted, along with provisions that independent DPC doctors said would favor huge corporate entities – purveyors of big-box medicine – that want to dominate the market. The government would micromanage what a DPC could or could not offer, based on the AMA’s copyrighted procedure codes, and cap the fee that the DPC could charge – not just the amount that could be paid from an HSA. It would allow only Direct Primary Care. It would not allow Direct Patient Care arrangements with specialists; for example, a direct-care agreement with an endocrinologist to manage diabetes would not qualify. Then the bill was incorporated into H.R. 6199, with some of the objectionable features removed, thanks to patients and doctors who spoke out. We’ll see what emerges from the sausage factory.

Read more at


 

https://mobile.wnd.com/2018/07/congress-and-the-irs-have-stranded-patients-in-swampcare/

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Direct-Pay Practice Models, Employee Benefits, Employer Mandate, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Health Insurance, Health Reimbursement Arrangement (HRA), Health Savings Accounts (HSA's), Healthcare financing, Individual Mandate, Policy Issues, Tax Policy, Uncategorized

Healthcare: What to Watch For

“…it is important for employers to be fully aware of what the regulations may impact them to safeguard against inadvertently putting themselves, or their employees, in an untenable situation.

It is important for an employer looking to offer an unconventional or untraditional benefit package to speak with an independent health plan attorney or CPA (not employed by the agency selling the program) regarding potential liability and compliance with federal and state laws regarding employer sponsored health plans.

Can your employee afford to reimburse the IRS for taxes not collected on an inappropriately structured HSA? Can your business afford a fine of $100 per day per employee for every day that the unqualified arrangement was offered? These are just some of the potential liabilities.”

http://ushealthmedia.com/healthcare-what-to-watch-for/

Posted in Access to healthcare, Consumer-Driven Health Care, Deductibles, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Medical Costs, Medical Practice Models, out-of-pocket costs, Patient Choice, Policy Issues, Price Tansparency, Uncategorized

Deductibles and HSA’s: The Devil (and the truth) is in the Details | LinkedIn

AKA…

HSA’s: The Good, the Bad and the Unexpected

free-money1

The quote below is worth pondering.

We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services).                                                                                  What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics Zarek C. Brot-Goldberg, Amitabh ChandraBenjamin R. HandelJonathan T. Kolstad

These findings seem to contradict, or at least not support, another large study that clearly show a trend towards substantial savings when patients are spending more of their own money or when trying to make their deductible dollars go further.

If the conclusions are valid and can be broadly applied, it would call into question a presupposition that most healthcare economists have held for quite some time: That being, when patients become medical consumers and are confronted with choices of how to spend their own money, they shop around and find better value and also don’t consume unnecessary medical services.

The summary of this newer study  published by the National Bureau of Economic Research seems to indicate that they don’t shop smarter, they don’t shop at all; but instead all the savings was from simply cutting back on all care.

This is potentially troubling on the surface. It appears to indicate that when presented with high deductibles, that patients just stopped getting as much care! Could this really be true?

Before we delve into the internals of this study, lets look at what other studies have shown. RAND Health researchers compared families before and after moving to a consumer-directed plan with similar families remaining in traditional plans to see how behaviors change in response to switching to a high-deductible plan.

  • In the most comprehensive study to date on this topic, researchers looked at claims and enrollment data for more than 800,000 households insured through 59 large employers across the U.S. in a study funded by the California HealthCare Foundation and the Robert Wood Johnson Foundation. The analysis shows clear cost reductions, but with potential areas of concern for the long-term health of enrollees.”
  • Families with HDHPs had 17 – 21% reduction in health care costs
  • …”those in CDHPs initiated less care, and when they did, they used fewer or less expensive services in a given episode of care. Enrollees used 4.9 percent fewer name-brand drugs, made 6.5 percent fewer visits to specialists, and had 17.7 percent fewer hospital stays…”
  • Vulnerable populations are not adversely affected by use of HDHPs…“key finding is that in almost all cases, CDHP benefit designs affect lower income populations and the chronically ill to the same extent as non-vulnerable populations. These effects include significant reductions in overall spending that increase with the level of the deductible and greater reductions for high deductible plans when paired with health savings accounts (HSAs) in comparison to health reimbursement arrangements (HRAs).

 

Now let’s take a closer look at the newer NEBR study and see what it really tells us. Here is the description of the circumstances of this observational study: 

  • “Kolstad and his co-authors looked at the case of a large, unnamed company that shifted more than 75,000 workers and their dependents from a plan with no deductible to one with a $3,750 deductible. When the change happened, workers received a $3,750 subsidy to a health savings account — money they could spend freely on whatever health costs they incurred. The company also gave workers online tools to look up prices for doctor visits, tests, and other services they might need.”
  • Here are some data from the study: “Average per-patient spending fell from $5,222.60 in 2012 to $4,446.08 in 2013. That’s about a 15 percent decline in a single year — and it held true across all types of health services. Between 2012 and 2014, there was a 25 percent drop in emergency room spending, an 18 percent decline in physician office visits, and a 6 percent decrease in mental health services.” “But when the researchers looked at why spending dropped, they found it had nothing to do with smarter shopping. The average price of a doctor visit wasn’t dropping. Instead, under the high-deductible plan, workers just went to the doctor way less. The paper finds that “spending reductions are entirely due to outright reductions in quantity.”

This is an odd, but interesting study, at the same time. It was designed to judge patient’s responsiveness when given choices of how to spend their healthcare dollars and to see if they would be better shoppers due to having a high deductible. Yet the employer funds the HSA with amount equivalent to the deductible.

Stay with me… So they go from zero price barrier situation where we have no idea how much of that consumption was unnecessary where the employee is completely price insensitive… to a situation where they have a high deductible fully financed by their employer in form of an HSA that the employee owns. That is free money that grows forever tax-free unless they take it out for something other than qualified expense. If they cash it out, they pay penalty and the tax, but it is still their money.

But why would the authors of the study anticipate a drop in the cost of the average doctor’s office visit due to “smarter shopping” when the deductible payments are coming from an account funded by someone else’s money? Who’s the smart one now?

Recall from above that the employer funded the HSA fully and in advance. And for those that made a prioritized decision not to go to the doctor as much as they did in the co-pay only scenario, they got to keep that deductible money because they own the HSA forever, as opposed to an Health Reimbursement Arrangement (HRA) or Flexible Spending (FSA) which are both use-it-or-loose-it propositions and unused funds are retained by the employer.

Here is something else to consider. Were there even any cash-friendly or alternative practice such as DPC available for them to chose? If the network was fairly tight with high level of provider participation, I would not expect posted CPT prices to vary all that much. And they likely ran all encounters through the billing cycle so they were billed out at the regular CPT posted rates.

Access to healthcare is often defined by how much of another person’s money is used to subsidize it; rather than focusing on reducing the real price or ways to be more efficient!

Also, notice that the employees moved from a zero deductible plan to a fairly high deductible plan. We really have no way of knowing how much unnecessary or redundant care they might have consumed under the zero deductible plan, so we can’t speculate except to say it is hard to believe very much thought was given regarding necessity under the old plan when out-of-pocket cost were basically just co-pays.

If I were the employee in that situation, here is my thought process when it comes to spending my HSA money: If I really need medical care or want to get something done or want a certain test, who cares how much it costs, I’m not out anything really. And, If I don’t really need care, I get to keep the “free” money in an account I own forever even if I change employers . 

The design of the health plan causes a situation where there is simultaneously both price insensitivity when spending was needed AND an incentive not to spend as much due to the fact that the employer funded the deductible and because of the savings vehicle chosen, that being an HSA. Is it any wonder the study results show that the employees did not learn to price-shop?

This employer-funded HSA is extremely important when analyzing what happened. Remember, they went from essentially nearly free care to an employer-funded HSA that covers their entire deductible… and an HSA is the EMPLOYEE’S money once it hit the account.

So the design of the plan resulted in the employer essentially paying the employee NOT to consume medical services! And when they did spend their deductible dollars, they had no incentive to care about price because it was “free” money basically like a pre-paid gift card!

The study authors apparently failed to recognize this reality and instead proclaimed that high deductibles don’t lead to better consumers, just less consumption!

Let that sink in. One one hand the employees simply made a choice that favors their own economic self-interest by accumulating someone else’s cash in their HSA if care wasn’t really necessary in their view; and on the other hand they spent freely if the need arose for the same reason.

And how many people honestly would let their own health suffer when they could have used someone else’s money to pay deductible expenses? So what does that tell you about how much potentially unnecessary care was consumed in the zero deductible plan? Furthermore, there is no data indicating anyone suffered because of less consumption under the high deductible plan.

Now if they had offered employee a percent of savings in any given expenditure, paid as cash award, then you bet you would have seen some savvy shoppers.

Let me be clear, HDHPs are not the answer to controlling healthcare cost and will not result in a total alignment of priorities and incentives. Do they help move the needle in the right direction? I think yes. But the answer lies in establishing a real non-insurance market for routine care that is free of the baked-in inflation and price confusion/dishonesty of our billing protocols. Only a market with real prices will allow consumerism to work its magic. We are not there yet.

Based on the design of the health plan in this study, it is impossible to conclude that high deductible plans don’t produce smarter shoppers, because their was an incentive NOT to spend built into this particular plan and there was no reason to care about price because the deductible was funded by employer money. It their attempt to neutralize the potential negative effect of the deductible on medically necessary utilization, the plan design made the outcome a foregone conclusion. But the study does show that the employees outsmarted the authors of the study by simply acting in their own self-interests and exercising good judgement.

This study does teaches us four important things:

  1. People can easily be paid to do nothing to accumulate someone else’s money (legally).
  2. We tend to spend “free” money or other people’s money with less discrimination than when it is our own.
  3. Access to healthcare is often defined by how much of another person’s money is used to subsidize it; rather than focusing on reducing the real price or ways to be more efficient!

  4. Never take a headline at face-value or believe a study without reading it yourself.

Source: Understanding Healthcare Economics: The Devil (and the truth) is in the Details | LinkedIn

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Deductibles, Economic Issues, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Medical Costs, out-of-pocket costs, Patient Choice, Policy Issues, Tax Policy, Uncategorized

A New Approach To High Deductibles

John C. Goodman

Is this a good deal? If you are a high-income individual with a lot more than $10,000 in the bank, this product may not be for you. But if you tend to live paycheck-to-paycheck and have trouble saving for medical expenses, insuring against your deductible may make more sense than trying to fund it with a savings account.

Health Matching Services is a very innovative firm, but it has to struggle with tax laws and regulatory regimes that look like they were designed with no thought at all. And of course, the ridiculously high deductibles offered by primary insurers are the perverse result of Obamacare.

In a rational world, the tax law would provide a level playing field for premium payments and deposits to medical savings accounts. Competition in a secondary insurance market would provide consumers with many choices. For example, some might prefer to self-insure for the first $3,000 and buy the kind of secondary insurance described above for the remaining $7,000 gap.

Who knows? But for the perverse incentives of Obamacare and other insurance regulations, primary insurers might offer these choices. A secondary market for health insurance might not even be necessary.

Source: A New Approach To High Deductibles

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Direct-Pay Medicine, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Government Regulations, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Individual Mandate, Medicaid, Medical Costs, medical inflation, Medicare, Patient Choice, Policy Issues, Portable Insurance, Price Tansparency, Quality, Subsidies, third-party payments, Uncategorized

Free Market Care – John Stossel

John Stossel

Imagine if you had “grocery insurance.” You’d buy expensive foods; supermarkets would never have sales. Everyone would spend more.

Insurance coverage — third-party payment — is revered by the media and socialists (redundant?) but is a terrible way to pay for things.

Today, 7 in 8 health care dollars are paid by Medicare, Medicaid or private insurance companies. Because there’s no real health care market, costs rose 467 percent over the last three decades.

By contrast, prices fell in the few medical areas not covered by insurance, like plastic surgery and LASIK eye care. Patients shop around, forcing health providers to compete.

The National Center for Policy Analysis found that from 1999 to 2011 the price of traditional LASIK eye surgery dropped from over $2,100 to about $1,700.

Source: Free Market Care – John Stossel

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Individual Market, Insurance subsidies, Leadership, Medical Costs, Policy Issues, Portable Insurance, Pre-existing Conditions, Risk Adjustment, Small group market, Uncategorized

Paul Ryan’s Health Bill: Good, Bad and Ugly

John C. Goodman

Remember how the Democrats did it. They created Obamacare behind closed doors. There was no real pubic vetting. No real attempt to make sure the pieces fit together in a sensible way. And no possibility of a single vote from the other party.

The House Republican Leadership seems enamored of that approach. The latest GOP replacement plan was announced last Monday after weeks of secrecy. The two relevant committees began their markup two days later – with no hearings, no vetting, no CBO score and no amendments.

It does not lower costs. It insures many fewer people. It does not stop the race to the bottom in the exchanges that is so harmful to the chronically ill.

Instead, the GOP plan seems designed to make the individual market work better. That means helping Obamacare work better. For all the apparent differences, the Republicans are just as committed to the managed competition model as the Democrats were.

Source: Paul Ryan’s Health Bill: Good, Bad and Ugly

Posted in Access to healthcare, advance-pricing, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, CPT billing, Direct-Pay Medicine, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Health Savings Accounts (HSA's), Healthcare financing, Individual Mandate, Individual Market, Individual ObamaCare Market, Individual Underwriting Standards, Insurance subsidies, Large group insurance market, Medicaid, medical inflation, Medical Practice Models, Patient Choice, Policy Issues, Portable Insurance, Pre-existing Conditions, Private Exchanges, Quality, Subsidies, Tax Policy, Uncategorized

A Path Towards a Viable Interstate Health Insurance Market | Robert Nelson, MD | Pulse | LinkedIn

Alternatives to our current over-priced and dysfunctional health insurance market are often biased, and thus limited, by our current operational and regulatory structure. These structures are so entrenched in our healthcare psyche that it makes it difficult sometimes to set these aside in our minds while entertaining how another approach might work.

If we view all alternative plans to replace the Affordable Care Act from the vantage point of “what is”, then there is little room for anything other than attempts at further regulating the problems away. If one presupposes that the current regulatory framework remains unchanged, indeed the same framework has served to suppress the very market we wish create, then of course that market will not be created.

The dilemma facing alternative healthcare plans being considered to replace the ACA is particularly evident when it comes to the issue of selling health insurance across state lines. A brief on this subject published by the American Academy of Actuaries in February of 2017 speaks to the the main challenges facing the advent of a viable interstate market for the sale of health insurance.

Source: A Path Towards a Viable Interstate Health Insurance Market | Robert Nelson, MD | Pulse | LinkedIn