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, Crony Capitalism, Economic Issues, Government Regulations, Healthcare financing, Independent Physicians, Medical Costs, Patient Choice, Policy Issues, Price Tansparency, Uncategorized

Institute for Justice: “North Carolina Surgeon Wins First Round in Fight to Eliminate State-enforced Medical Monopoly”

 

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by Justin Wilson

 

“The court correctly rejected the government’s argument that Dr. Singh needed to apply for a CON before bringing this case,” said IJ Attorney Renée Flaherty, who argued the motion. “No one should have to go through an unconstitutional process in order to challenge it. We look forward to showing that North Carolina’s CON law unconstitutionally favors existing businesses at the expense of Dr. Singh and other medical providers.”

In July 2018, IJ and Dr. Singh, a Winston-Salem surgeon, and his business, Forsyth Imaging Center, sued the Department of Health and Human Services, alleging that North Carolina’s CON law is unconstitutional because it bans medical providers from offering services patients need solely to protect existing providers from competition. In order to receive a CON, providers must persuade state officials that new services are “needed” through a cumbersome process that resembles full-blown litigation and allows existing businesses, like established hospitals, to oppose their applications. Even after a CON is granted, existing providers can appeal the decision. Dr. Singh should not have to go through such a burdensome process just to provide affordable services that patients need.

North Carolina Surgeon Wins First Round in Fight to Eliminate State-enforced Medical Monopoly

Posted in Access to healthcare, advance-pricing, CPT billing, Economic Issues, Health Insurance, Healthcare financing, Medical Costs, Medicare, Network Discounts, out-of-pocket costs, Patient Choice, Policy Issues, Uncategorized

Fallacy of the Discount: Why Price Transparency Matters

Why is the price of a CT scan 33 times higher in a hospital emergency room than in an outpatient imaging center just down the street?https://www.npr.org/sections/health-shots/2018/04/09/598794123/bill-of-the-month-a-tale-of-2-ct-scanners-one-richer-one-poorer

Hynden was shocked when he got the second CT scan in January, and the listed price was $8,897 — 33 times what he paid for the first test.

Gulf Coast Medical Center is part of his Cigna insurance plan’s approved network of providers. But even with Cigna’s negotiated discount, Hynden was on the hook for $3,394.49 for the scan. The additional ER costs added $261.76 more to that bill.

The higher price from Gulf Coast and its parent company could be a result of their enormous pricing power in Fort Myers, says Gerard Anderson, a professor of health policy and management at Johns Hopkins University.

Lee Health owns the four major hospitals in the Fort Myers area, as well as a children’s hospital and a rehabilitation hospital, according to its website. It also owns several physician practices in the area. When you drive around Fort Myers, the blue-green Lee Health logo appears on buildings everywhere.

“Anybody who’s in Fort Myers is going to want to get care at these hospitals. So by having a dominant position, they have great bargaining power,” Anderson says. “So they can raise their rates, and they still do OK.”

Anderson says his research shows hospital consolidation has been driving prices higher and higher in recent years. And because more and more people, like Hynden, have high-deductible insurance plans, they’re more likely to be on the hook for huge bills.

So Lee Health and other dominant hospital systems mark up most of their services on their master price lists — the list that prices a CT scan at Lee Health at $8,897. Anderson calls those lists “fairy-tale prices” because almost no one actually pays them.

“Everybody who’s taken a look at it agrees — including the CFO of the organization — that it’s a fairy-tale thing, but it does have relevance,” Anderson says.

The relevance is that insurance companies usually negotiate what they’ll pay at discounted rates from list prices.

So from the master price of $8,897, Cigna negotiated Hynden’s bill down to $5,516.14 — a discount of almost 40 percent. Then Cigna paid $2,864.08, leaving Hynden to pay the rest.”

https://www.npr.org/sections/health-shots/2018/04/09/598794123/bill-of-the-month-a-tale-of-2-ct-scanners-one-richer-one-poorer

Posted in Affordable Care Act (ObamaCare), CPT billing, Crony Capitalism, Economic Issues, Free-Market, Government Regulations, Health Insurance, Insurance subsidies, Medical Costs, Medicare, Policy Issues, Reforming Medicare, Tax Policy, Uncategorized

Watch “Milton Friedman – Monopoly” on YouTube

The Healthcare industry, or medical-industrial complex, wears the armor of Government-sponsored protectionism; chinked together by pieces of the tax code, The McCarren-Ferguson Act, Certificate of Need laws, Medicare billing regulations, HIPAA, HITECH, and the ACA.

You would be hard pressed to find a more entrenched, impenetrable cartel.

Posted in Economic Issues, Education, Free Society, Free-Market, Leadership, Liberty, outcomes, outcomes measurement, Philosophy, Policy Issues, Uncategorized

Watch “The Day 2 Problem for Egalitarianism | Prof. James Otteson” on YouTube

Professor Otteson discusses the fatal flaws of redistributive planned economies, not the least of which is a decline in cooperative innovation.

Posted in Cost of labor, Economic Issues, Education, Free Society, Free-Market, government incompetence, Job loss, Keynesian Economics, Leadership, Liberty, Minimum wage, Philosophy, Policy Issues, Poverty, Rule of Law, Uncategorized, Wealth

Bernie Sanders Gets a Lesson in What a $15 Minimum Wage Would Mean – Reason.com

“…it’s telling to see how Sanders’ campaign responded to the allegation that the Vermont socialist is not putting his money where his mouth is.

In a statement, Shakir stressed that Sanders’ campaign “offers wages and benefits competitive with other campaigns, as is shown by the latest fundraising reports.”

Exactly! If Sanders’ campaign can find a sufficient number of employees willing to work for $10 an hour or $12 an hour, that’s fine. No one is being coerced to work for him, and he’s paying what the market for field workers allows.

Sanders the politician likes to criticize other employers for doing exactly what he’s doing.

“Americans should not be subsidizing the richest family in America and Walmart workers should not be living in poverty,” Sanders tweeted last month, castigating the big box retailer for not paying all workers $15 per hour. “Walmart’s greed has got to end,” he added.

But Sanders the employer surely knows that paying field workers $12 an hour instead of $15 per hour will allow his campaign to hire more field workers. He’s not employing those people because it makes him feel good to do it, and he’s not paying less than $15 per hour because he’s a skinflint multi-millionaire who is too greedy to care about workers. He’s employing them to help him succeed in a highly competitive arena where small margins can make a big difference.

When the problems with a government mandated minimum wage are so obvious that even a socialist’s campaign can’t help but acknowledge them, it should probably make you wonder if Sanders the politician is being willfully ignorant about one of his centerpiece proposals.

https://reason.com/2019/07/19/bernie-sanders-gets-a-lesson-in-what-a-15-minimum-wage-would-mean/

Posted in Bailouts, big government, Dependency, Economic Issues, Free Society, government incompetence, Influence peddling, Keynesian Economics, Leadership, Liberty, Organizational structure, outcomes, outcomes measurement, Philosophy, Policy Issues, Tax Policy, Uncategorized

Musings and Mentions

As we continue to examine the outcomes of socioeconomic initiatives throughout our history, it becomes apparent that society’s benefits are not necessarily derived from good policies as much as from the absence of bad ones.

– Robert Nelson

Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, CPT billing, Deductibles, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, medical inflation, Network Discounts, Patient Choice, Patient-centered Care, Quality, Uncategorized

Healthcare costs…time to rethink the calculus!

For anyone still laboring under the myth that insurance carriers are motivated to hold down costs in healthcare OR that health insurance is expensive BECAUSE health-care is expensive OR that insurance helps PROTECT us from high billed charges, consider the following facts and figures presented in this common Gynecologic surgery example.

Let’s compare a not-for-profit hospital-owned facility that has in-network insurance agreements with that of a physician-owned private facility that does NOT have any insurance contracts for payment such as Surgery Center of Oklahoma.

A broker consulted me on cost-containment strategies on behalf of a client/patient who needed a hysterectomy (CPT codes provided).  She has a high deductible indemnity plan and a faith-based health share plan. The surgeon’s (Gyn physician) fee was $7,000.  The hospital facility charge for O/R suite was estimated at $30,000 and they required $15,000 payment upfront.

Based on analysis of claims payment, it would be reasonable to assume the reimbursement would be around 60% of billed charges (+/- 10%).  So the final payout could easily be between $18K – 26K. That total does NOT include anesthesia and may not include surgeon’s fee. What a fantastic discount! In some markets, we see hysterectomy reimbursement as high as $54K.

The all-inclusive fee at SCO is $8,000 and includes an over-night stay if needed.  That price includes everything needed to perform the surgery, including professional fees.

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All of the effort, time and resources at SCO go to medical care; not buying practices or employing physicians or 7 figure CEO salaries! And no fake discounts designed to foster dependence on the same products that keeps prices higher than they need to be.

That is how you reduce the cost of healthcare!