Posted in Access to healthcare, advance-pricing, Economic Issues, Health Insurance, Healthcare financing, Medicaid, Medical Costs, medical inflation, Medical Practice Models, Medicare, out-of-pocket costs, Patient Choice, Price Tansparency, Quality, Uncategorized

G. Keith Smith, M.D. — Health “Coverage” as a Distraction


I think it is good to be alert to any discussions that are “downstream of a flawed premise.” Let me explain.

When I hear, for instance, that the “flat tax” is preferable to the current income tax, I think to myself that this is a discussion of the knife versus the axe, a conversation far downstream of one addressing government spending or the very legitimacy of denying someone their earnings. After all, victims don’t generally care what the mugger does with their money. They just resent being mugged and no discussion about whether the mugger used a knife or a gun will likely provide any solace.

Similarly, I would argue that arguing for everyone to have health “coverage” is far downstream of the more original problem: the cost of healthcare. To provide “coverage” for everyone in the current climate of gross overcharging primarily serves the interests of those who employ the “what can I get away with” method of medical pricing.

The fierce push back against true price transparency by the cronies in the medical industry makes more sense in this context, as price honesty denies them access to everyone’s blank checkbook as the health cronies are well aware.

Supporters of government-guaranteed “coverage” object with the following arguments.

First, coverage is equated with healthcare. While millions of Canadians streaming across the border to secure their health needs could be used to refute the idea that coverage is synonymous with care, this disconnect has become more apparent in this country. Each passing day reveals Medicaid and Medicare “coverage” to be a “black mark,” an actual obstacle to obtaining care, as these government programs and their associated rationing through price controls and hassles are creating the lines the central planners intended. Physicians are either dropping out of these programs altogether or they are limiting their exposure to patients with this “coverage.”

Another objection points to the relief from financial devastation that having “coverage” represents. Keep in mind that not only are well over half of the bankruptcies in this country medically related, but almost three quarters of those filing for medical bankruptcy have insurance. This points powerfully to cost as the root cause of medical economic ills.

Acknowledging this is a slippery slope for the objector, however, for no economic system better provides for resource allocation than the market and the cronies and their government pals know this as well as anyone.

The market is the only source of price deflation with simultaneous improvement in quality. This powerful competitive mechanism has brought affordability to countless products and services in all industries and has begun to bring rationality to health care pricing as more physicians and facilities honestly post their prices for all to see.

Rather than focus on “coverage,” which allows the cronies to continue their financial feeding frenzy, we should remain unalterably focused on cost. The competition unleashed will result in a medical price deflation the likes of which will cause even the most skeptical objector to re-evaluate the role of “coverage” in the provision of payment for health care.

This is no prediction. This is exactly what is happening here in Oklahoma where so many health professionals have embraced the same market discipline every other industry must endure. The reasonable prices and high quality of care, have had such a wide appeal that Oklahoma City has evolved into a medical tourist destination for many patients far from here, while simultaneously bringing savings in the millions of dollars to those who actually pay for healthcare, locally.

This is my answer to another objection from those who claim the inapplicability of market competition to health care.  Whether the focus on “coverage” is a deliberate distraction by the crony propaganda machine or a well-meaning but misguided attempt to provide better access to care, we must keep our eyes on the “price transparency ball.” The Oklahoma market is already harshly judging those attempting to avoid this gaze and I believe this trend will continue as long as we identify, challenge and reject conclusions downstream of their flawed premises.

Posted in Access to healthcare, Economic Issues, Education, Evidence-based Medicine, Health Insurance, Medicaid, Medical Costs, outcomes, outcomes measurement, Patient Safety, Philosophy, Poverty, Prevention, primary care, Protocols, Uncategorized, Unemployment

Bridging the Gap Between Where the Quality Metric Ends and Real Life Begins—A Trusting Relationship |JAMA NETWORK

Jennifer E. DeVoe, MD, DPhil

JAMA Intern Med. 2020;180(2):177-178. doi:10.1001/jamainternmed.2019.5132

My teaching session with the medical student at the end of the day included a discussion about patient care decisions and recommendations that go beyond ticking quality boxes and following the latest guidelines. Initially, I felt as if I was rationalizing my delivery of suboptimal care and began to doubt myself. 

However, the quality reports I receive each month do not capture the complexity of many patients’ lives.4 These reports fail to reflect the individualized and shared decisions made between a patient and her physician who have known each other for 15 years; the proprietary quality score calculation formulas do not adjust for the healing power of relationships.5 Amid the mounting evidence that primary care saves lives,6 our health care system does not (yet) have a population health analytics tool that captures and tracks the progress that she and I have made together in more than a decade. When will we create better systems with capabilities to measure the emergency department visits that were prevented, the stable housing that was obtained, the increased resiliency she has built into her life, her feelings of empowerment to be a better parent, the reduction in her self-destructive behaviors, and the trusting relationship we have built over time?

https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2757531?guestAccessKey=15c869b5-37d4-42f4-9feb-12bdc314dbe6&utm_source=silverchair&utm_medium=email&utm_campaign=article_alert-jamainternalmedicine&utm_content=etoc&utm_term=020320&appId=scweb

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Health Insurance, Healthcare financing, Individual Market, Insurance subsidies, Medicaid, Medicaid Expansion, Medical Costs, News From Washington, Patient Safety, Policy Issues, Reforming Medicaid, Subsidies, Uncategorized

Options Will Increase, Sky Will Not Fall, If ACA Ends

For example, the AMA complains that hundreds of millions would be at risk of losing “coverage.” In fact, only a net 1.7 million people gained private coverageunder ACA, after subtracting the nearly 6 million who lost it, at a shocking cost of $341 billion or $200,000 per newly insured person. Most of the claimed increased coverage came from expanding Medicaid to childless, able-bodied adults. This reduced access to services by the sickest patients, and at least 21,904 patients died on Medicaid waiting lists according to a 2018 report.

Without ACA and its unaffordable requirements, Americans would have many more options to buy affordable insurance. Instead of paying as much as a mortgage payment for “coverage” they are unlikely to use, they might join a DPC (direct primary care) practice and get preventive care and routine medical treatment for at as little as $50/month. They might buy catastrophes-only major medical insurance that ACA outlaws for persons over 30 years of age. Congress might enact Health Freedom Accounts as proposed by Rep. Chip Roy (R-Tex.) and liberalize Health Reimbursement Accounts.

https://mailchi.mp/aapsonline/aca-standing-639035?e=f50410ece3

Posted in Access to healthcare, Accountable Care Organizations, Affordable Care Act (ObamaCare), American Presidents, Canadian Health System, Direct-Pay Medicine, Economic Issues, Employer-Sponsored Health Plans, Government Regulations, Government Spending, Health Insurance, Healthcare financing, Independent Physicians, Medicaid, Medical Costs, Medical Practice Models, Medicare, News From Washington, out-of-pocket costs, Patient Choice, Policy Issues, Quality, Reforming Medicare, Uncategorized

What You Need To Know About Medicare For All, Part I

A study by Charles Blahousat the Mercatus Center estimates that Medicare for all would cost $32.6 trillion over the next ten years. Other studies have been in the same ballpark and they imply that we would need a 25% payroll tax. And that assumes that doctors and hospitals provide the same amount of care they provide today, even though they would be paid Medicare rates, which are about 40% below what private insurance has been paying. Without those cuts in provider payments, the needed payroll tax would be closer to 30%.

Of course, there would be savings on the other side of the ledger. People would no longer have to pay private insurance premiums and out-of-pocket fees. In fact, for the country as a whole this would largely be a financial wash – a huge substitution of public payment for private payment.

But remember, in today’s world how much you and your employer spend on health care is up to you and your employer. If the cost is too high, you can choose to jettison benefits of marginal value and be more choosey about the doctors and hospitals in your plan’s network. You could also take advantage of medical tourism (traveling to other cities where the costs are lower and the quality is higher) and phone, email and other telemedical innovations described above. The premiums you pay today are voluntary and (absent Obamacare mandates) what you buy with those premiums is a choice you and your employer are free to make.

With Medicare for all, you would have virtually no say in how costs are controlled other than the fact that you would be one of several hundred million potential voters.

Remember also that there is a reason why Obamacare is such a mess. The Democrats in Congress convened special interests around a figurative table – the drug companies, the insurance companies, the doctors, the hospitals, the device manufacturers, big business, big labor, etc. – and gave each a piece of the Obamacare pie in order to buy their political support.

As we show below, every single issue Obamacare had to contend with would be front and center in any plan to replace Obamacare with Medicare for all. So, the Democrats who gave us the last health care reform would be dealing with the same issues and the same special interests the second time around.

It takes a great deal of faith to believe there would be much improvement.

https://www.forbes.com/sites/johngoodman/2018/09/07/what-you-need-to-know-about-medicare-for-all-part-i/

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Community Underwriting, Economic Issues, Employee Benefits, Essential Benefits under the ACA, Government Regulations, Health Insurance, Healthcare financing, Individual Market, Individual ObamaCare Market, Individual Underwriting Standards, Insurance subsidies, Large group insurance market, Medicaid, Medicaid Expansion, Medical Costs, Policy Issues, Uncategorized

Analysis of the ACA: A Public Policy “Devil in the Details”

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Individual Health Shrinkage Drives Up Uninsured Rate: CBO Data

~Enrollment in every other major type of coverage grew or held steady~

The subtitle in the article above is correct: Enrollment in every other major type of coverage grew or held steady.

But this should not surprise anyone.

“Why the other major types of coverage increased, is the more important question. And examining this also reveals that the real, or net, uninsured rate probably went up much less than 5%.

The CBO data, based on their own definition of “insurance”, was destined to over-state the number of uninsured based on these data…

“CBO includes only major medical insurance that meets ACA minimum essential coverage standards in that definition. It excludes people who belong to health care cost sharing ministries. It also excludes people who are using products such as short-term health insurance as alternatives to major medical coverage.”

Nor does the number of “uninsured” mean that those folks went without care, especially those who might have cash-friendly Primary Care providers, or a Direct Primary Care physician.

And, as premiums continue to rise in the individual market we will see a shift from Unsubsidized plans to subsidized plan; and just as the data indicates we’ve witnessed a 300,000 shift in that direction.

Let’s examine some recent history as a perspective.

The first two enrollment periods after implementation of ACA in late 2013 and 2014, which also corresponded to economic recovery (no cause and effect) showed that the largest portion of newly insured (following the nadir of the uninsured rate) came from the Employer group market as hiring increased; and the second largest portion came from Medicaid and the smallest percentage from the individual market in form of ACA exchanges.

When you measure the effects directly attributable to ACA, the largest percent gains in insured rate have come from new Medicaid, followed by subsidized ACA plans.  This is a crowd-out phenomenon at work, catalyzed by subsidized coverage (Medicaid expansion) on one end and rising premium prices in the Individual market on the other.

This is horrible public policy as it doesn’t promote insurance to be more affordable or efficient, it simply shifts the burden to the public sector while making premiums more expensive.  And those premium increases are a direct result of regulations placed on the Individual Market: Community Rating, guaranteed issue and compression of the age ratios to 3:1, in an attempt to force it to “behave” more like the group market.

So does it really make sense to purposefully, by design, cause the price of insurance to rise and then turn around and subsidize the same product to make it “affordable”?  I guess we know how they justify the name… Affordable Care Act… but there certainly isn’t any buyer protection from soaring prices!

All of which goes to show, that the net effect of the ACA has been to make the individual market UNAFFORDABLE which effectively shunts the demand into gov’t sponsored and/or subsidized coverage!

This is NOT a sound healthcare policy.  But it is a very effective form of legal plunder accomplished by using the law to benefit a few special interests at the expense of the many.

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, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Medicaid, Medical Costs, medical inflation, Medicare, out-of-pocket costs, Policy Issues, Uncategorized

The Pernicious Impact of Government Intervention in Healthcare, Captured in a Chart

AdministratorGrowthVS.PhysiciansAs Dan Mitchell mentions in his post, much of the dysfunction we witness in healthcare are simply symptoms of the distortions that arise when we rely on a third-party payer system, with heavy government involvement, and all its perverse incentives which distort decision making for all participants. And so often the proposed “fixes” are aimed at mitigating symptoms caused by the third-party effect, rather than peeling back the layers to get to the root cause. Is it any wonder things aren’t improving despite billions and billions of subsidies, massive intervention, regulations and various forms of scrutiny!

International Liberty

America’s healthcare system is a mess, largely because government intervention (Medicare, Medicaid, Obamacare, and the tax code’s healthcare exclusion) have produced a system where consumers almost never directly pay for their medical services.

This “third-party payer” system basically means market forces are absent. Consumers have very little reason to focus on cost, after all, if taxpayers or insurance companies are picking up the tab for nearly 90 percent of expenses.

As a result, we get ever-higher prices.

But we also get a lot of featherbedding and inefficiency because providers want to take advantage of this system.

Athenahealth offered some sobering analysis on the system last year.

The number of physicians in the United States grew 150 percent between 1975 and 2010, roughly in keeping with population growth, while the number of healthcare administrators increased 3,200 percent for the same time period.

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Posted in Access to healthcare, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Medicaid, Medical Costs, Medicare, Policy Issues, Reforming Medicaid, Reforming Medicare, Uncategorized

Deconstructing Insurance Coverage Myths in Healthcare is Fundamental to Controlling Costs.

by Robert Nelson, MD

 

The assumptions on which our modern era healthcare third-party payer systems are based, including Medicaid/Medicare, ignore the economic disincentives that plague its continued use. It creates a wide-spread Public Choice Theory dilemma on the demand side and way too much rent seeking behavior on the supply side. The result being an ever-increasing cost curve.

free-money1Public spending for healthcare flooded the market after 1965 and was FOLLOWED by precipitous increase in consumption, utilization and the unit costs (as supply did not keep up) and then rapid fall off of the percentage of out-of-pocket payments as % of expenditures. Public spending came first, and was a major cause (not a reaction) in accelerating healthcare inflation.

PublicVSOutofPocketThird-party financing drives up utilization and drives up unit costs. Ironically, this creates even more dependency on a system that by its nature pushes costs further out of reach of many Americans.

Third-party financing mechanisms have become both arsonist and fireman, and we are having trouble distinguishing who is who.