Posted in Access to healthcare, advance-pricing, Affordable Care Act (ObamaCare), CPT billing, Deductibles, Dependency, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Employee Benefits, Health Insurance, Healthcare financing, Individual Market, Medical Costs, medical inflation, Medical Practice Models, Organizational structure, outcomes measurement, Patient Choice, Policy Issues, Price Tansparency, Self-Insured Companies, Self-Insured Plans, The Triple Aim, Uncategorized

U.S. Healthcare: A Case Study of What Happens When “Insurance” Supplants Price-Transparent Markets

By Robert Nelson, MD

Our health insurance-based third-party payer protocols have pernicious and nefarious economic consequences on the cost of medical care; and in many ways has diminished access due to regulatory complexities that accompany these interventions.

The undeniable result continues to be a rampant increase in healthcare prices, which is catalyzed by the economic distortions of the 3rd party payer effect and perpetuated by the price-obscuring distortions of the CPT billing cycle.

We have taken the concept of insurance, designed to pay out rare higher-priced claims on unpredictable events, and turned it into a product whose design promotes an incentive for everyone to use it as often as possible.

Insurance is sustainable only when the financial risks of individually rare events are spread over a large population. When it also becomes a funding source for anticipated and affordable events, combined with a perverse incentive to utilize it to the margin, the result is the creation of a perpetual payout fund.

The costs of sustaining this model are never satisfied, being squeezed by patients who are chasing the benefits and providers who chase the billing codes to achieve maximal reimbursement.

As evidence for the negative consequence of misusing insurance as a pass-through system for virtually every healthcare expense (accelerated by passage of the ACA), we can examine the employer-sponsored group market premiums.

From 2007 – 2017 the average premium for family coverage increased by 55% and employee contribution rate as a share of premium cost increased by 74% over the same 10-year period; while median household income went up by only 3%.

To add financial injury to insult, the percentage of employees with an out-of-pocket maximum of greater than $3,000 doubled, going from 30% to 60% of employees.

“Eighty-one percent of covered workers have a general annual deductible for single coverage that must be met before most services are paid for by the plan. Among covered workers with a general annual deductible, the average deductible amount for single coverage is $1,505.” ~KFF.org

Between 2012 – 2017, the percentage of covered workers with a general annual deductible of $1,000 or more for single coverage has grown substantially, increasing from 34% in 2012 to 51% in 2017. Thirty-seven percent of covered workers in small firms are in a plan with a deductible of at least $2,000, compared to 15% for covered workers in large firms.

In the ACA individual market insurance exchanges, single coverage premiums (unsubsidized) increased by 62% and family coverage premiums increased by 75% just since implementation of ObamaCare!

Our third-party payer system has created a dependency paradox!

The same funding method that contributes to runaway costs also causes us to be more dependent on it for access. This guarantees that Healthcare will cost significantly more than the sum of its individual parts, and will continue to escalate faster than our ability to pay for it.

The costs associated with health plan premiums (aka insurance) have become a surrogate for health-care costs.

Now let that sink in!

In what other market does the cost of an insurance product act as substitute for the aggregate cost of the product or services that it insures?

Now apply a similar scenario to the auto insurance market. It doesn’t take much imagination to extrapolate how that would play out. But if you want some help visualizing the scenario, here’s a brief vignette. https://lnkd.in/eUGeCKv

Self-insured employer health plans are in a unique position to break out of this dependency paradox.

By contracting with a Direct Primary Care practice and re-routing subsequent encounters away from the more expensive insurance-based protocols, Self-insured employers can utilize creative plan designs to cut costs and improve employee satisfaction.

Data from the Qliance experience, and supported by other self-insured employer’s experiences, utilization of efficient primary care via the DPC model reduces unnecessary downstream care by approximately 50%, with the resultant aggregate cost savings of nearly 20%.

The caveat being, as we double the number of primary care visits combined with longer visits to adequately address problems, the need for emergent visits, ER visits and specialty intervention drop significantly.

A similar level of savings for direct-pay lab tests was noted in data published in 2014 by CMT journal comparing lab fees charged to a Direct Pay practice by the lab vs. the CPT billed charges by the lab (assuming patient had no coverage or had not met their deductible). For five common blood tests the savings was 89% by not using insurance, with lab billed charges of approximately $782 compared to a direct pay cost of $80. Plum Health, a direct primary care practice in Detroit, shows similarly impressive lab test savings of 87% on six common blood tests; $811 vs $106.

Many Self-insured companies are beginning to discover the value and savings in this approach, while breaking free of the coverage trap and the myth that health insurance equates to health care; and the realization that so-called “access” to inflated pricing and the phony discounts used to fleece the buyer is no longer a conversation they are willing to have.

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 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, Consumer-Driven Health Care, CPT billing, Direct-Pay Medicine, Direct-Pay Practice Models, Doctor-Patient Relationship, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Medical Costs, Medical Practice Models, Patient Choice, Patient-centered Care, primary care, Quality, The Triple Aim, Third-Party Free Practices, Uncategorized

DPC and Self-insured Employers: Lifestyle-friendly Care for the 21st Century

http://ushealthmedia.com/dpc-and-self-insured-employers-lifestyle-friendly-care-for-the-21st-century/

In a typical insurance-based practice, meaningful face-to-face time between doctor and patient is somewhere between 5-10 minutes. Interesting, but surprisingly, shorter visits tended to result in more prescriptions being written and less time trying to get to the root of clinical problems.  And prescribing is usually a poor surrogate for good counsel and reassurance.

“What do you get when you mix low overhead with high technology and wrap it around an excellent physician-patient relationship? You get an ideal medical practice – a practice model designed to enhance doctor-patient relationships, increase face-to-face time between doctors and patients, reduce physician workloads, instill patients with a sense of responsibility for their health and cut wasted dollars from the entire system.”

The quote above is NOT from a Direct pay doctor or advocate, even though it precisely describes the attributes of DPC.  The quote is from the American Association of Family Physicians: The Ideal Medical Practice Model: Improving Efficiency, Quality and the Doctor-Patient Relationship.  

Notice how many of the characteristics of the Ideal Medical Practice looks very similar to the characteristics of a typical Direct Primary Care practice.  The ability to provide exemplary service is a natural element that arises from Direct Primary Care and other direct-pay models.

This direct engagement, absent the complexities and barriers created by the third-party network billing apparatus, enables a level of lifestyle-friendly involvement that naturally leads to a more satisfactory patient-doctor relationship and potentially superior clinical outcomes.

It’s hard to argue with cheaper and better.

Source: DPC and Self-insured Employers: Lifestyle-friendly Care for the 21st Century

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, advance-pricing, CPT billing, Economic Issues, Employer-Sponsored Health Plans, Government Regulations, Health Insurance, Healthcare financing, Medical Costs, medical inflation, out-of-pocket costs, Policy Issues, Price Tansparency, third-party payments, Uncategorized

The Triumvirate of Healthcare Spending

by Robert Nelson, MD

 

1. Price distortion
2. Price Insulation
3. Price Confusion

Shared via PowerPoint on Android.

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, Direct-Pay Medicine, Direct-Pay Practice Models, Doctor-Patient Relations, Doctor-Patient Relationship, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Free-Market, Health Insurance, Independent Physicians, Medical Costs, medical inflation, Medical Practice Models, out-of-pocket costs, outcomes, Patient Choice, Patient-centered Care, Policy Issues, Price Tansparency, primary care, Self-Insured Companies, Self-Insured Plans, Telemedicine Trends, The Quadruple Aim, The Triple Aim, third-party payments, Uncategorized

Three Reasons Why Employers Should Care about Direct Primary Care | Samir Qamar | LinkedIn

Featured Image -- 24171.“Insurance is not necessary for all healthcare.”

2.“Not all healthcare is expensive.”

3.”Employers can use Direct Primary Care to lower healthcare costs.”

Healthcare is the only field where insurance is not only used for rare events, but also common and frequent events. However, “insurance is not necessary for all healthcare”.

To reduce frequency of claims, a large segment of medical care has to be affordable to render insurance unnecessary. Thankfully, “not all healthcare is expensive.”This is where Direct Primary Care makes its grand entrance.

Direct Primary Care takes this majority of healthcare, and caps the cost into an affordable, manageable, flat monthly fee, typically less than $90 per month. As a result, insurance use (and cost) is minimized to rare occurrences.“Employers can use Direct Primary Care to lower healthcare costs.”

Source: Three Reasons Why Employers Should Care about Direct Primary Care | Samir Qamar | LinkedIn

Posted in Access to healthcare, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, Crony Capitalism, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Employer-Sponsored Health Plans

The New Shackle of Serfdom: Clinging to Healthcare Insurance | David Stockman’s Contra Corner

David Stockman
David Stockman

Please explain the wisdom of shackling employers to employees’ medical insurance, and employees to these employers. You can’t, because there is no wisdom in this insanity. The system is not the result of planning or coherence–it’s simply the result of a jumbled series of historical accidents.

Yet this is the system we cling to. Why? 1) We have no choice or 2) it’s so insanely profitable for those at the top of the heap. Are these good reasons?

Is shackling our workforce to their current employer simply to avoid the risk of not having insurance and not qualifying for subsidies good for the economy? No.

This system makes no sense whatsoever.

There are only one way out of this insanity: break the shackles from employer to employees’  healthcare insurance and from employees to employer.

There are only two ways to break these shackles:

1. Offer everyone universal healthcare coverage via a government agency

2. Go back to a cash-only system. The “Impossible” Healthcare Solution: Go Back to Cash (July 29, 2009)

Guess how many pills the pirate would sell for $750 each if insurers were eliminated and cash payments by patients were the only form of payment: yup, near-zero. The parasitic pirate would either have to drop the price back to $13.50 (or better yet, $1) or go broke and have to sell the rights, or be accosted by those who’d lost loved ones to his rapacious greed.

The shackles of this new serfdom are invisible, but no less destructive for being invisible.

Source: The New Shackle of Serfdom: Clinging to Healthcare Insurance | David Stockman’s Contra Corner