Friday, December 17, 2010
Tuesday, December 14, 2010
The following story is from Kelly Cheramy, the wife of a man with a chronic illness from McFarland, WI
Between the cracks is a frightening place to be.
During the course of trying to improve our family’s financial stability, my husband and I were blind-sided by one hidden detail: We’d face $10,000 in costs to continue my husband’s serious medical treatment because we found ourselves unexpectedly without coverage for 30 days.
This was money we simply did not have. We had been prepared to foot the full bill for good health insurance, but that wasn’t even an option, thanks to the circumstances of our career transitions and my husband’s health.
I was leaving my job of 10 years to begin a satisfying new position that came with excellent health care coverage. It was a beneficial move that would offset my husband’s impending loss of insurance as his employer downsized and prepared to go out of business. We knew the end result, but we didn’t know the timing. It just so happened that his coverage ended the same month that I began my new job, leaving a gap of one month before my new coverage would begin.
With this routine employment-benefits formality before us, we knew we’d have to purchase coverage. We had hoped to buy a Cadillac COBRA plan, given the circumstances that require very expensive care. But we learned that an out-of-business employer is not obligated to offer COBRA, and our plan to continue the same level of coverage at our expense was not available.
I then checked with my previous employer, whom I had left just two weeks earlier, to weigh my options. I had none, because, at the time of my resignation, I hadn’t been enrolled in that employer’s plan. At my new job, I had already initiated my flex plan withholding so I was too late to set aside pre-tax dollars to help ease the burden.
Because of my husband’s serious pre-existing condition, we were almost certain we wouldn’t qualify for insurance anywhere, and if we did, the price would likely be out of this world. With billing statements in hand, we began to panic about the outrageous price of care and the irony of trying to improve our lives through better jobs—a situation that led to our falling through a nearly invisible crack in the health care system.
The decisions before us were scary: suspend treatment for one month, potentially jeopardizing my husband’s health and setting us back even further in the long run, or find a way to pay $10,000 for his medications, hormone injections, lab work and doctor visits. We chose the latter.
Luckily, our doctor knew of some possibilities that might help. One was to enroll in a medical study that would cover all expenses as part of the research. Unfortunately, an additional health condition made my husband ineligible to participate. The doctor also told us about our insurance company’s conversion plan, which guarantees coverage (albeit less of it, with no drug benefit). The company charges a higher premium in exchange for the forfeiture of underwriting. Though the coverage was greatly reduced, we decided to purchase this nominal safety net for my husband while I took the chance on my own health by not buying coverage for that one month. (As luck would have it, I then contracted pneumonia. A purposeful delay in diagnosis and treatment happened just as I was beginning my employer-provided coverage.)
Finally, the doctor knew of a pharmaceutical company’s program that provides free medication to those who cannot afford the treatment. We applied, slogged through the red tape, waited with wringing hands, and received word that we were accepted. That was a godsend. Today, my husband’s health is nearly perfect and we are back on track to providing everything our family needs, including health care coverage.
When we slipped through the cracks in the health care system, we were emotionally taxed at a time when we could scarcely handle any more stress in our lives. Of course, we’re grateful for the excellent care and the help we had to patch together a plan of action we could afford, but we were taken by complete surprise when we viewed the costs from deep inside the crack.
Saturday, December 11, 2010
The following story is from Dr. Grayson Wheatley, a cardiovascular surgeon from Phoenix, AZ
It was supposed to be a routine office visit for my patient. Unexpectedly, it turned into a real-world health economics lesson for me, the treating physician. The old adage “listen to your patients; they will always give you the answer” became exceedingly true in this case, even when it dealt with an issue beyond a medical diagnosis, such as lack of transparency regarding insurance coverage for medical procedures.
My patient had recently undergone an interventional procedure to treat severe peripheral vascular disease in order to improve his leg circulation. Usually, patients like him don’t seek treatment for vascular insufficiency until the discomfort associated with activity, or claudication, is severe enough to interfere with their regular rounds of golf. That is the real motivator for these patients. The procedure was a success and a few days following the procedure he was back to his normal activities and was pleased that his leg no longer bothered him as he motored around the golf course.
My patient calmly waited until after I checked his pulses, reviewed his medications and gave him a plan for follow-up before he expressed his real concern, and it certainly wasn’t about whether he could now get an extra 20 yards on his tee shot as a result of the new strength in his leg. Despite my office obtaining all the necessary private insurance pre-authorizations for the interventional procedure, he still had received a bill for approximately $10,000 related to out-of-network charges. I was baffled and my patient was disgruntled about this mix-up. After reviewing with him in the examination room the numerous sheets of paper he had received from his insurance company, it became clear what had happened.
A magical alignment of stars needs to occur for an elective procedure to be pre-approved. Emergency services are covered through a separate and more straightforward mechanism. First, the provider, or surgeon in this case, needs to be within the patient’s insurance network. Appropriate professional credentialing and outcome data are submitted to the insurance company, and if acceptable, the provider can participate in the company’s insurance plan. This tedious process needs to be repeated for every insurance plan in which the physician wants to participate. Second, appropriate medical record documentation needs to be submitted to the insurance company demonstrating medical necessity for the procedure. Third, the intended hospital where the procedure is being performed needs to be in-network, which is completely independent of the provider’s status.
Pre-authorizations in this patient’s case were obtained for both the surgeon’s fee and hospital charges. The particular anesthesiologist utilized for this patient’s procedure – a member of the medical team for which insurance companies don’t require pre-authorization – was out-of-network. It is not customary to obtain pre-authorization for anesthesiologists since almost always the anesthesiologist is in the same network as the physician and hospital. We assume, incorrectly, that if an anesthesiologist is working in an in-network hospital and with an in-network surgeon, that they also have in-network status.
The challenge in this process is the lack of transparency surrounding patient choice regarding anesthesiologist assignment, which is often made by the operating room staff moments before the procedure. Despite the anesthesiologist meeting the patient in the holding area before the procedure, no one informed the patient about his upcoming out-of-network charge related to anesthesia services or gave the patient an option to choose another anesthesiologist who was within his insurance’s network.
Fortunately, the out-of-network anesthesiologist worked with my patient to drastically reduce the cost of his services and they agreed upon a much more reasonable charge and associated payment plan. Subsequently, my office has modified the process to ensure that the anesthesiologist assigned to a patient’s procedure is pre-authorized.
This patient’s case was an eye-opening experience for me and helped me better understand the complex maze of healthcare reimbursement. It also enabled me to see things more clearly from my patient’s perspective. I am thankful that this patient took the time to speak-up and share his financial situation with me. How many other patients have I operated on were put in this situation and suffered financially in silence? I have always prided myself on making sure my patients have a thorough understanding of their disease and upcoming procedure. Now, I take the time to make sure they also have a clear understanding of the reimbursement process. As a physician, it is not enough to relieve the physical pain of a medical problem, it is also our responsibility to help patients avoid preventable financial jeopardy.
Sunday, December 5, 2010
On 4/29/10 I received a Mirena IUD. I thought about this a lot; I read forums and articles on the device and its side-effects. I decided that because I already have a beautiful son who is 2 years old with my wonderful boyfriend of 7 years and we do not need any more children at this point in our lives, that it would be a good idea. You see, we both have been unemployed for a little over a year now. And while on Unemployment we made too much to receive Medi-Cal for any members of our family. So, while on Unemployment I was paying about $300/month out-of-pocket in premiums for medical insurance for my son and myself. (My boyfriend thinks his body can heal itself.) Anyway, after paying $75 for the visit and only being in the appointment for about 30 minutes, and another $75 for a mandated follow-up appointment, I received a bill on 8/18/10 for $978. (That is 978 American dollars, just to clarify.)
As I stated, while I got this device I was paying out-of-pocket for my insurance premiums because I could not be approved for Medi-Cal. A couple months after getting the IUD both of our Unemployment checks stopped coming. We had no income. Zero dollars a month coming into our home. So I instantly went down to the DHA and applied for pretty much anything I could. I started receiving Medi-Cal for all 3 of us. (This was all before I got the bill, or knew how much it was going to be.) When I went to Kaiser’s Customer Relations Department they informed me that Medi-Cal would take care of whatever cost the IUD would be, but now that I have gotten this bill and spoken to them again, they are saying that they were mistaken when they told me that because I was not receiving Medi-Cal during the time I got the IUD.
After receiving the bill I decided I would just return it for a full-refund. Apparently there is a no-refund policy for IUD’s, but they did not state this at any point during the appointment or have any postings on the walls. I even asked if I could possibly return the IUD for some sort of hospital-credit or gift card maybe for a surgery later in life, but they would just not work with me.
In all seriousness, I do not know how I am going to pay for this bill. My boyfriend and I are now getting Unemployment checks again, which you would think would be a good thing. But, this means that when we have to report how much money we got in the last quarter, in the next week or so, I am fairly certain that our Medi-Cal will be discontinued, since we will again be making too much. That means that I will be stuck once again, with out-of-pocket monthly medical insurance premiums, on top of this $978 bill.
I appreciate any help in this matter, even if it’s just information about how I can get help paying for this. I am trying to find work substitute teaching, and am really just trying to make it work for my family. We thought we were being responsible adults and citizens by looking at our place in life and deciding that adding another number to our household would not be good idea, but this is the cost (quite literally) of making that decision. You would think the government would want to help keep the Unemployed from pro-creating – I’m just saying.
Thursday, December 2, 2010
The following story is from Tarcia Edmunds-Jehu, a nurse-midwife from Boston, MA
Sitting in an exam room I am watching my patient struggling to ask a difficult question that she clearly does not want to ask. After several attempts at starting and a few half finished sentences she finally manages to mumble a request for help with obtaining food for herself and her two daughters. She is a 41-year-old woman, 32 weeks pregnant with her third child, and working a full time job as a CNA in a local nursing home. Her husband is also working full time as a janitor. At her initial visit she denied any issues obtaining food for herself and her family, and declined any referral to social services.
“Has the work situation changed for you or your husband?” No. “Have you always had difficulty getting food and did not want to ask?” No. “Is there some reason you need more food than you needed before?” No.
“Is there some new expense that is taking money that you used to be spending on food?”
Tears begin to flow and she starts to talk. She tells me that she had been in this country for 5 years and never had public assistance of any kind. She talks about her long hours working 2 and sometimes 3 jobs in order to have enough money to keep her family afloat. She talks about putting herself through school to become a CNA while still working to pay her bills. Until last year she was doing this alone, making not only money to provide for her family, but also the money needed to bring her husband here. She had never asked for help or let her children go without. But now she is unable to pay her bills and buy food. What is the tipping point for her ability to provide for her family?
Three ultrasound bills from this pregnancy.
She is 41 and had opted for an early screening test at 12 weeks that combines ultrasound and blood tests to give an estimated risk for Down Syndrome. She made this decision after a visit with a genetic counselor and had the test despite the fact that the results would have no effect on the outcome of her pregnancy.
At 18 weeks she had a fetal survey ultrasound that patients have routinely to check the anatomy of the baby and rule out anomalies.
At 30 weeks she had an ultrasound to check the growth of her baby because she was over age 40. This is following hospital protocol; despite the fact that there was no clinical indication her baby was anything but well grown.
This patient had private insurance through her job. Very few of my patients have private insurance, and at that time I worried less about a patient with a full time job who had private insurance meeting her needs than I did about a patient on welfare with state insurance. It didn't occur to me to ask a patient if her medical bills were paid in full, or if she was responsible for paying a percentage or had a deductible.
The patient had insurance that would pay 80% of procedures, including ultrasound. Her insurance had deemed her 18-week fetal survey as necessary and were paying 80%, the other 2 ultrasounds were not considered necessary. She had a bill for close to $1400 that she had been paying off weekly for three months.
It could just have easily ended up that I would never have known about these bills, and in fact that may have been the case in the past with other patients.
We almost never think about what a test costs or whether it is paid for. Trying to find out the cost of a test is sometimes almost impossible. We almost never stop to think if a test is really indicated, or if the results will change the course of their treatment.
As providers we order tests because they are there, or because it’s easy, or because everyone gets them, or because we are scared if we don’t we’ll be sued, or because of arbitrary protocols. Sometimes we order tests because it’s the best thing for a patient.
No one orders tests thinking we might be taking food out of the mouths of our patients and their families, but sometimes that is exactly what we are doing.
Tuesday, November 30, 2010
The following anecdote is from Brad Wright, a graduate student from Durham, NC
In the spring of 2005, the sinus infection returned. I awoke severely congested with a pounding forehead and pain around my eyes that grew worse when I bent to tie my shoes. The feeling was familiar. Two years earlier, I had similar symptoms, but was uninsured and endured a miserable week with nothing but over-the-counter medication. Now they were back.
Fortunately, when I started graduate school, my father insisted that I have health insurance. As a healthy 24 year old, I didn’t see the need, but he agreed to foot the bill for a high-deductible insurance policy to cover me in the event of catastrophic illness. Except for four physician office visits subject only to a $35 co-payment, my policy offered no benefits until I spent $3,000 out of my own pocket. With my sinuses throbbing, I knew I needed to use one of those visits. Overwhelmed by the list of “in-network” providers on the insurer’s website, I picked an internist based on convenience—his practice was located in a medical complex near my home.
Arriving for my appointment, I checked in and presented my insurance card to the receptionist. “Your visit today will be $35,” said the woman behind the desk. I was relieved to hear that my coverage was working as promised. A nurse ushered me to an exam room, where the physician promptly entered, half-heartedly listened to my complaint, and confidently asserted that I did not have a sinus infection because I had no fever. I wanted to say “Really? Mind handing me a tissue so that I can show you what’s been coming out of my head?” but resisted the urge. Instead, I clarified that fever or no, I didn’t feel well, and believed my sinuses were the culprit. At this, the internist lost patience. He ordered some lab work and a sinus CT scan to rule out infection, and said that I could have everything done downstairs.
Despite my $35 office visit, I knew my insurance wouldn’t cover anything else until I met my deductible, so I needed to find out the cost of the CT scan. Doing so was much more difficult than I expected. Admissions didn’t know the cost, so they called the imaging department. Imaging had no idea, and threw it back to admissions where, after much searching, a big black binder full of prices was located in a cabinet, alongside packets of coffee creamer, some paper clips, and a couple of dried up ink pens. The sinus CT would cost roughly $900, which I could not afford. I headed instead to the lab to get my blood drawn, not knowing that I was about to make a costly mistake.
I worked as a phlebotomist during college, so I knew that lab tests were expensive, but that most insurers negotiated discounted rates that were only a fraction of the sticker price. Besides, the lab work was routine—a comprehensive metabolic panel and complete blood count—so I didn’t think to ask how much it would cost. My mistake was assuming that the lab was in-network, because the in-network internist I had just seen worked in the same building and referred me to the lab.
A month later, the bad news came in the mail. The lab was out-of-network, and I owed $478. While this wasn’t the five-figure medical bill many families face, everything is relative. For me, a graduate student living almost entirely on borrowed money, the bill changed how I bought groceries, socialized with friends, and commuted to school. For six months, I fought to scrape together enough money to make monthly payments. The experience, while costly, taught me a lot about our fragmented health care system, how little patients or providers know about the real cost of health care, and how hard it is for patients to make price-based decisions when the system isn’t designed with that in mind.
I had learned my lesson. Later, when a dermatologist put me on medication requiring monthly blood tests, I took out the yellow pages, looked up laboratories, and dialed the phone. “I’m uninsured,” I said (not far from the truth given my coverage) “and I need to have a lipid panel and a liver function test. How much will this cost?” Some labs knew, and some labs didn’t, and the answers varied widely. Needless to say, I chose the least expensive option. Making the decision was easy, getting the information on which to base the decision was—and is—the real challenge.
Sunday, November 28, 2010
The following anecdote is from Dr. Steve Sanders (Twitter: @spsanders), a primary care doctor from Tulsa, OK.
“What am I going to do now Doc?” asked Mike, a down on his luck, 29 year–old recently unemployed truck driver, as he handed me his hospital bill.
Mike was seen at our local emergency department on a Friday evening with complaints of indigestion. Earlier that day he and his wife Susan celebrated their second anniversary by splitting a store bought pepperoni pizza. Mike had just lost his job and his wife, already working two jobs, managed to keep them afloat. When Mike later complained of indigestion, Susan became alarmed. She had just read about the symptoms of heart disease in the local paper. Mike wanted to get some antacids but Susan demanded he go to the hospital. Mike stated he initially protested, but when it came to his health he looked to his wife for advice.
He said he wanted her to drive him to the hospital and told me his wife wouldn’t hear of it. “We’re going to call 911, she told him. “You could die on the way to the hospital.” Now, Mike admitted, that made him scared and he quickly agreed. Fifteen minutes later he was on a gurney rolling through the double doors of the emergency department.
Physical assessment by the emergency resident physician came quickly followed by an EKG, chest x-ray, CT scan of the chest (“they said I might have had a blood clot”), and lab, specifically including cardiac enzymes. Mike said his only complaint was it took over five hours before he heard any news.
“Everything looks good,” said the resident. “Let me run all this past my attending and see if we can get you home.” Mike said by then his pain had been gone for hours and he relaxed by receiving the good news. When the resident returned, however, Mike said he knew something was wrong.
“Sorry Mike, but my attending thinks you need to stay for a chest pain evaluation, “ stated the resident with no hint of emotion. “Your first cardiac enzyme was normal, but he thinks you need another evaluation in six hours followed by a stress test, “ he continued.
Mike said he tried to protest. “But everything was normal? Can’t I just see my primary physician later,” he quizzed the resident. He said the resident looked down at his chart seemingly trying to choose his words and said, “Can’t be too careful with chest pain.” With that, the resident physician disappeared, followed by the nurse who quickly added insult to his non-injury.
“We don’t do stress tests on the weekends,” she explained. “The Hospitalist will need to keep you until Monday at the earliest.” Mike said upon hearing this news he protested, again wanting to just go home.
“Then you’ll have to sign out AMA (against medical advice). We can’t be responsible if you go home and have a heart attack and die,” she quickly added.
Mike said by then he was too tired to protest. The thought of dying at home also had him upset. He stated when he told his story to the Hospitalist, she just shook her head and laughed. “They just don’t want to get sued,” she explained. “We get these normal cases all the time. We try to tell them this can be handled on an outpatient basis, but what can we do?” She laughed again, which Mike took as a good sign he was really okay.
He left the hospital the following Tuesday—the heart scan machine was broken on Monday—with a clean bill of health and a diagnosis of “gastric reflux,” which I explained was the indigestion he first described.
I looked at his hospital bill. Charges for everything from the ambulance ride to the emergency department evaluation and eventual hospitalization with cardiac stress tests came to just under $11,000. This number was circled at the bottom of the bill with several question marks in red ink written to the side by Mike’s wife.
“We don’t have any money,” Mike explained. “Susan’s insurance won’t cover it, since we forgot to put me on her policy when I lost my job,” he continued. “We’re gonna have to file bankruptcy Doc. I don’t know what else we can do.”
What would have been a 15–minute office visit providing reassurance and education to a patient we knew quite well became a 72–hour ordeal by a health system treating a disease and not the patient, trading a patient’s pain for financial poverty. Surely we can do better.
Tuesday, November 23, 2010
The launch of the contest was covered in newspapers, radio, TV and dozens of blogs.
Two months later we received 115 submissions from all over the country - New York to California, Texas to North Dakota, Alaska to Oklahoma. According to essay contest judge Dr. Atul Gawande, a surgeon and staff writer at the New Yorker, "These [stories] are powerful just for the sheer volume of unrecognized misery alone."
Dr. Steven Sanders: a primary care doctor from Tulsa, Oklahoma
CNM Tarcia Edmunds-Jehu: a nurse midwife from Boston, Massachusetts
Dr. Grayson Wheatley: a cardiovascular surgeon from Phoenix, Arizona
Jessa Hartford: an unemployed mother from Sacramento, California
Brad Wright: a graduate student from Durham, North Carolina
Kelly Cheramy: the wife of a man with a chronic illness from McFarland, Wisconsin
Leading up to the $1000 prize winner announcement on December 15, we will publish each of their stories separately for you to read on our blog. Starting after January 1st, we will also publish 52 of the additional outstanding stories we received - there will be a new story here every week until 2012.
In the mean time, on behalf of the Costs of Care team, I would like to thank everyone who sent us their stories, our esteemed judges, and our contest sponsors. Stay tuned!
Friday, October 29, 2010
Misaligned interests – they happen far more often than we think. At the core of the 2008 financial crisis for instance were rating agencies being compensated by the very firms whose securities they assessed that lead to unreliable ratings leading bankers and investors astray. The Enron mess – ring a bell? Did we not learn anything for that? In the healthcare space – we see this happen too. Robert Litan and Hal Singer write a great article in HBR drawing our attention to broken compensation structures that result in higher cost outcomes for healthcare consumers. I don't mean the dysfunctional fee-for-service payment model for doctors.
What am I trying to get at? GPOs. GPOs or group purchasing organizations are organization whose role is to serve their member hospitals money by relieving them of some of the transaction costs associated with procuring medical supplies on their own. Without a doubt, they play a very critical role in cost containment by leveraging buying power in the market. If hospitals were to independently contract for medical supplies they would be stumped with astronomically higher costs for supplies. We're talking in the billions here. In essence, GPO's "seem" indispensible.
The issue however is not that they stand to serve a critical function but how reliable they are. A recent GAO report questions the price saving intent of GPOs. Drawing on the most relevant conclusions from the article reveal that GPO contracts did not ensure that hospitals saved money. In many cases, among hospitals of all sizes, GPO negotiated contracts were often higher for supplies like pacemakers and safety needles. The GAO study is in stark contrast to the GPO funded studies touting substantial cost savings for hospitals – go figure!
This brings us to examine how GPO's make their money. By hospitals themselves. By charging a percentage of the total outlay their member hospitals pay to preferred medical suppliers on the negotiated contracts. The economics of it are simple – higher the expenditures - higher the GPO compensation. Are you thinking about kickbacks? Back in the 1980's GPOs convinced Congress of their indispensible role in reining in healthcare costs and they are thus exempt from the "general statutory ban on kickbacks where the government covers health care costs".
A recent article I read over the summer, does a great job in bringing to light GPOs engaged in a partly dirty business under the guise of helping hospitals. What the author here focuses on is how GPOs stifle innovation and even went as far in stating that GPOs keep life saving devices from entering the market. He relates his particular experience of getting a needless-syringe proven to lessen catheter infections into hospitals. His product was significantly less expensive and more effective. That's why he was thwarted time and again.
With the perverse incentives for GPOs, their "intended" pro-competitive stand is questionable. What is needed here? The HBR article concludes that these perverse incentives need to be reversed by repealing the safe harbor provisions that exempt GPOs. Over and above policy change – how about transparency of GPO contracts to start with?
Friday, October 15, 2010
I sure wish health insurance worked this way. I have insurance coverage through my employer. Don’t get me wrong, I’m really grateful for it. But my employer gets to figure out what is the most cost effective coverage for them and only then do I get to choose from the couple of selections that they provide. I feel very disconnected from the cost of insurance. Even though I only pay a portion of the total premium, I know vaguely that I might play a role in keeping health care costs in control by diet and exercise and regular checkups, but I don’t have a very visible way of seeing the impact. I sort of know what my health insurance covers. For instance, I know my employer ensures that all major plans cover approximately the same thing. But then my choice is based on which doctors I have access to and the overall portion of the premium I pay. I also know what my co-pays are and what my deductible is. But I don’t know how much of my health insurance premiums go to catastrophic coverage, preventive care services, chronic care management, prescription coverage, etc. I feel very disconnected from the premium cost and even more disconnected from how I impact that premium.
Out of curiosity, I asked the insurance agent from whom I purchased auto insurance whether their health insurance quotes were itemized in the same way as their auto insurance quotes. Let’s just say that the lack of transparency is not just a symptom of employer coverage.
We keep asking for transparency on health care costs thinking that it will help align consumer and practitioner incentives to use health care effectively. Maybe we could start by asking for transparency on the costs we, as consumers, have a real relationship to, the amount we pay for insurance. It’s all well and good to know how much a triple bypass costs at the different hospitals in my town; I just don’t know that knowing the difference would induce better health behavior on my part. What is relevant to me is what my premium actually buys me and where I might play a role in controlling it.
Saturday, September 25, 2010
On September 7, 2010 Costs of Care launched a national essay contest, with $1000 prizes for the best anecdotes from patients and clinicians illustrating the importance of cost-awareness in medical decision-making. We have a great line-up of high-profile judges. Details available at www.costsofcare.org/essay
Gov. Michael Dukakis, former Democratic nominee for President of the United States
Tim Johnson, Chief Medical Correspondent of ABC News
Atul Gawande, surgeon and New Yorker staff writer
Jeffrey Flier, Dean of Harvard Medical School
Gov. Michael Leavitt, former United States Secretary of Health and Human services
Entries must be no longer than 750 words, and should be typed and double-spaced. Students strongly encouraged to submit an anecdote. E-mail submissions to firstname.lastname@example.org are preferred, however entries may also be mailed to
Costs of Care
21 Father Gilday Street, Suite 115
Boston, MA 02118
Deadline: November 1st, 2010
Additional submission information available here
Thursday, September 9, 2010
- Kristine Komives
How do hospitals make money? - By spending less than they earn.
But here is the situation that hospitals and health centers will be facing as health care reform legislation is implemented - there will be growing demand to eliminate wasteful spending, including excess care that would otherwise bring in revenue.
In the last few days, Moody’s downgraded the outlook for non-profit hospitals and health centers due to decreases in volume and lower reimbursement. In 2009, many hospitals saw salary freezes, suspension of construction projects or other capital improvement projects, layoffs and other drastic cost saving measures. But Moody’s predicted that “management teams will find it increasingly difficult to cut additional expenses.”
One of the overarching goals of health care reform is to bend the health care cost curve. One approach to do this is for third party payers to simply pay less for the health care provided. The inevitable cuts in Medicare and Medicaid reimbursement that will take place over the next several years will do just that.
Another approach involves patients using less services. There appears to be evidence that consumers are certainly spending less in light of the recession economy: not filling prescriptions, not following up on appointments or opting for plans with lower premiums and lower out of pocket expenses. In a recent article in Health Affairs, looking at Health spending by source show that “spending by households grew at 4.3 percent in 2008, a deceleration from 5.9 percent growth in 2007.” The article concludes “In response to poor economic conditions in 2008, people may have reduced their spending on health care and forgone some medical treatment. . .” Recent estimates on current spending in health care in 2010 corroborate the ongoing slowdowns in overall health care spending across all payment sources. USA Today just published its review of health spending finding that “Spending on doctor’s hospitals, drugs and other medical care climbed at a 2.7 annual rate person in the first half of 2010, the smallest increase since the Bureau of Economic Analysis began tracking medical care in 1959.”
The key to bending the cost curve correctly however is not for patients to stop getting the services they need to be healthy, as currently appears to be the case. Moreover, many health care costs are far beyond the realm of patient control. One thing seems certain however, bending the cost curve is going to mean decreasing revenue for those who provide care, especially hospitals and health systems.
Many of the strategies hospitals used to control their own costs in 2008 and 2009 were short term. In the long term, hospitals will need to invest money and resources to drive down costs they incur for the revenue they achieve. They will need to bend their own internal cost curves compared to the revenue earned. This will take investment in process reengineering and IT resources. They will need to achieve better alignment between clinical and administrative systems. This alignment must be completed not only to foster transaction level improvement but must be built to generate a better feedback loop of information to lead to large scale transformation. And all this will be taking place in a climate of unpredictable and likely declining revenue streams and difficult capital markets with which to raise funds. Otherwise their future will continue to be misery and not happiness.
Kristine is a recent graduate of the Executive Masters of Health Services Administration at the University of Michigan School of Public Health. She has 12 years of experience working in information technology, most recently in aligning information systems used throughout the supply chain at the University of Michigan Health System. She is very interested in strategic information management and the promise it holds in helping shape long term changes in the way we deliver patient care.
Thursday, August 26, 2010
A recent NYTimes article comes at the heels of Dr. Gawande's compelling essay on end of life care. The matter at hand is that legislators are realizing the economic value of palliative care options for terminally ill patients. Recently, Gov. David A. Paterson signed into law a bill — the New York Palliative Care Information Act — requiring physicians who treat patients with a terminal illness to have frank discussions about prognosis and options for end-of-life care, including aggressive pain management and hospice care as well as the possibilities for further life-sustaining treatment. A similar law in California seeks to overcome physician resistance to talking openly with terminally ill patients about end of life care options. As part of the original federal healthcare overhaul, a similar provision would have reimbursed doctors for the time it takes to have such conversations – which however did not make through it given the traction gained by "death panels". Overall, even commercial insurers have financial incentive to steer patients with a poor prognosis away from costly health care services.
The point is that there is a cost advantage, in addition to the better quality of life argument. Several studies reveal that palliative care and hospice services can reduce costs of can-do-aggressive medicine anywhere from 20 to 35 %. Given that end-of-life costs make up a quarter of the Medicare budget, steering patients away from the ICU makes for good economics right? If that is the case then shouldn't all states follow suit? There are caveats however - that are well brought to our attention in this write up, on the Disease Care Management Blog.
Doctors cannot predict the end of life: "When confronted with a critically ill cancer patient, popular culture would have you think the physicians can predict the likelihood of not making it out of the ICU alive and can therefore treat accordingly. The problem is that the prediction is far from perfect with an ROC, according to this study, of about 0.8 (where 1 is perfect). In other words, there are enough false positives to give physicians pause before recommending pulling the plug." Further, "for non-cancer patients, the prognostic tools are even worse".
Research on hospice is on shaky ground: "given our national manic compulsion for "evidence-based" science to guide treatment decisions, that the research supporting the benefits of hospice is decidedly shaky. Dr. Gawande only quoted some studies that happened to support his point of view"
Having said that, what could change is a physician's perspective on palliative care – not as an option after all else fails.
Sunday, August 8, 2010
In a recent interview with NPR, he turned his gaze toward the growing debate about rampant health care costs and their potentially behavioral origins. To contextualize the issue, he describes an experiment in which different groups are asked to order pizzas. One group is presented a menu where the default is an all-dressed pizza and toppings have to be taken off if they aren't wanted. Another group is presented with a menu featuring a cheese-only pizza where any preferred toppings have to be added. It turns out that those presented with the all-dressed pizza menu were more inclined to order more toppings, and those with the cheese-only menu were more likely to order fewer toppings.
If this outcome is truly representative of a natural human bias, the implications for ordering medical tests is painfully obvious and potentially quite costly. As Ariely confirms:
If you go to the hospital these days, or to visit your physician, you will see that they have these electronic order forms. And they basically use those to order tests for you. And sometimes these order forms are empty, nothing is selected for them. The default is nothing, and they have to pick what they want to order. And sometimes some tests are preselected for them.The experiment didn't use actual patients but the intuition should be fairly obvious: given a natural human bias to anchor to a default selection when presented with a menu of options, more attention should be paid to what that "default" set of tests will be for a particular set of symptoms, and how that decision will ultimately impact both the quality and the costs of care.
So we created scenarios in which we described to physicians some patients who arrived at the ER, and we asked them to decide what test to give them. And to half of the physicians we gave the fully-loaded options, like the pizza. And for the other half we gave them one that were empty, and they had to check which one they wanted to do.
The basic result was that in the empty set, physicians chose an average of five tests. And in the full set, they chose an average of 13 tests....the difference was about $1,300 per patient. So now if you think about it, these information systems are going to roll out into hospitals in all kinds of ways and I think they have tremendous influence on what the physicians will decide.
Friday, July 16, 2010
However, cancer screenings are a clear outlier on the list of services from the USPSTF. The prime motivation for colonoscopies and other screenings is not to save money but to potentially save the patient and so they are encouraged. The rest of the list deals with issues of diet, blood pressure, weight, smoking, and even vaccines, all of which, when dealt with appropriately, can greatly alleviate financial burden in the future.
I am not writing this to present some revolutionary plan, but rather to point out a growing possibility that may act as a stepping stone to pro-prevention systems: paying people to stay healthy. In a modern hospital somehow encouraging patients to take a proactive attitude towards improving their health before they get sick is near impossible in the financial sense, as well as in chronology (they’re already in the hospital!) so perhaps the best method is to remove the responsibility of prevention from the hospital entirely. Instead, it should manifest in other organizations.
Japanese health reform that began several years ago comes to mind in this context. As part of a nearly decade long plan, measuring waistlines of people between 40 and 74 became a mandatory part of annual checkups. In the end, financial penalties will be placed on companies and local governments that fail to meet certain quota. In this method, the burden of motivating lifestyle changes falls not on the hospitals but rather on employers who are also often responsible for medical coverage for their employees in the Japanese system. The architects of the waistline limit hope to show payers that they have the most to gain by motivating improved general health in the people.
This lesson is already something that many American companies have latched on to, without the nudge in the right direction from the government. Many employers offer plans with monetary benefits if employees quit smoking or lose weight. In the context of the employer/provider prevention is simple to motivate financially as they save the most money. However, can this ever emerge in healthcare? Possible plans for patient incentives in the UK show that in a nationalized healthcare system, prevention becomes crucial to long term success. With an effectively limitless need for care and an entirely different paradigm of what a patient is, the UK does not suffer from the fear of ‘loss of profit’ that comes with successful prevention in the US.
One day the US may create a system like Great Britain’s but until then it seems that hospital care may be focused to dealing with the sick, while motivating lifestyle changes and preventive medicine should be left to employers and insurers who have the most to gain from the noticeable savings. An ounce of prevention is worth a pound of cure.
Monday, June 28, 2010
"Don't get sick in July" - It's an old adage in the medical community, most pronounced in academic medical centers, when the annual turnover of interns and residents occurs each summer. Each June and July, newly minted MDs, only weeks out of medical school, become interns. Popularized as the "July effect" or "July phenomenon," is when care at teaching hospitals is, according to myth, chaotic and disorganized as the cohorts of incoming interns fill the ranks of first-year residents.
A recent study at UCLA set out to prove the July theory. Researchers analyzed 244,000 death certificates from between 1979 and 2006 at a medical center, and noticed a significant 'July spike' in fatal medication related errors. Another study conducted at a trauma center noticed a similar spike in non-fatal preventable medical complications.
July effect or not – the truth is that hospitals are always at the brink of change – implementing changes to policies, rolling out new IT tools and systems, new equipment and so on. And there will always be the newbie's who didn't know better. Earlier this year, an article reported on a series of radiotherapy accidents across hospitals, resulting from radiation overdose from new linear accelerators. In a recent NYTimes interview with Dr. Peter Provonost, the man who spearheaded checklists in surgical ICU's at Hopkins, was quoted as saying that "in every hospital in America, patients die because of dysfunctional teamwork and hierarchy" and it has to do with the culture of hospitals and the way doctors are trained.
While the debate is still far from consensus, whether electronic health records will lower or raise costs, no amount of technological innovation can ever replace culture – the culture of transparency, teamwork, accountability and not shoving mistakes under the carpet. Just as medical students are afraid to talk back to their professors or raise safety issues, nurses are afraid to stand up to surgeons who won't take a mandatory "time out" to do safety checks before they commence surgery – these cultures ultimately cost patients their lives. Moreover, the logic is undeniable that safety and efficiency go together. Safer hospitals will achieve lower costs – by working inside out – first with the right culture and then with the technology.
How are innovative hospital's dealing with the culture issue – by being transparent about errors and near misses. AHRQ Innovations Exchange reports on how the University of Michigan Health System adopted a process of full disclosure of medical errors that involved multiple components including an online incident reporting system, open and honest communication with patients and families, with an apology offered when warranted; and quality improvement initiatives guided by reported errors. The program increased error reporting, significantly reduced malpractice claims and costs per claim, hastened the claims resolution process, and reduced insurance reserve requirements.
Tuesday, June 1, 2010
A preview of exciting things to come this summer:
1. Early stage development of the Costs of Care mobile application (if you squint at the iPhone you'll see our icon, courtesy of Zegarra Designs)
2. Preparation for the inaugural Costs of Care essay contest with large cash prizes for the top anecdote demonstrating the importance of cost-awareness in medical decision-making. Judges will include former U.S. Presidential Candidate and Massachusetts Governor Michael Dukakis, current Harvard Medical School Dean Jeffrey Flier, and others to be announced soon.
3. A major expansion of the Costs of Care blog.
Stay tuned for details!
Thanks to everyone who participated in our inaugural event last month, "Doctors, Policy, and Change We Can Implement" hosted on the Harvard University main campus. It was a great success with standing-room-only attendance, lively unscripted debate among our panelists, and outstanding questions from the audience. Thanks in particular to the Malcolm Weiner Center for Social Policy who generously sponsored the networking reception and to the Harvard Business Review for providing free copies of their latest issue on health care costs to everyone who attended.
Check out our Facebook page for pictures and other media. Based on the feedback we received, we will host our Fall event in a larger venue and plan to provide streaming video for those who cannot be on site. Stay tuned!
Wednesday, May 19, 2010
Ever wonder how prices are set for healthcare services? If you've ever received a medical bill and wondered why it can't be simpler to understand, then you're asking the right question.
While there are many reasons why healthcare costs are spiraling, one of them is that nobody really knows what anything costs. Providers get paid through a multiplicity of insurance-company contracts and billing schedules that change from patient to patient, depending on the type of health plan. Recently a New York Times article covered the issue of 'balance billing'. A situation where doctors and other health care providers receiving discounted payments from the insurance company — an amount less than the fee they want to be paid — bill the patient for the 'balance'.
How are consumers expected to make well informed decisions if they have no idea what to expect with treatment costs? More importantly, what kind of treatment decisions should consumers be making themselves? The overall consensus however is that with consumers being asked to pay larger proportions of their medical costs, they should know what they are paying for.
That is precisely what the Congress is debating over: How much transparency in prices do we want in healthcare? The Health Subcommittee of the House Energy and Commerce Committee held hearings last week on three different bills—all designed to make prices in healthcare markets more transparent. A Wall Street Journal blog does a great job of summarizing the hearings highlighting leading points in the long-running debate over price transparency. Another article by Julian Pecquet of The Hill adds useful details on the democratic vs. the republican bills.
There are strong arguments for and against price transparency. An article in the American clearly summarizes the polarized arguments. On the one hand we have economists who believe that in the healthcare market, price transparency could result in higher, not lower prices, with providers charging as much as their competitors, thus defeating the purpose of transparency. On the other hand, we have proponents of consumerism, who believe that once American's, currently insulated by insurance, are made aware of the healthcare tag price – they will consume less.
In conclusion, while the price transparency legislation is off to a slow start, there are several unanswered questions. How will price transparency affect costs? Does transparency really affect consumer-consciousness in the healthcare market?
Tuesday, May 18, 2010
On June 4, 2010, Costs of Care will be a featured exhibitor at Transforming the Delivery System, a Massachusetts Health Data Consortium sponsored conference focused on payment reform.
We'll be reviewing our progress to date, future plans, and discussing ways information technologies can be leveraged to help health care providers lower the costs of care.
Some of the changes discussed in the article include increasing certain foods and supplements in the diet, such as tree nuts, mono- and polyunsaturated fats, and low amounts of alcohol, as well as decreasing overall fat and carbohydrate intake. Regular aerobic exercise of 120 minutes per week also reduces cholesterol levels.
Lifestyle-focused interventions are often associated with a high level of inconvenience; however, this article shows that many of them require minimal effort and may simply require checking a food label or making an additional purchase. Also of note is that the recommendations are quite specific: for example, it is not enough to run for a random amount of time per week; rather, 120 minutes per week provides the most benefit.
How does this information reach the general public? There are many community-based programs across the nation that promote lifestyle changes in a fun and educational manner. Physicians are being increasingly urged to promote lifestyle changes rather than over-relying on expensive prescription drugs. And consumers are making more of an effort to learn about healthier habits on the TV and Internet.
As health care costs are projected to rise over the upcoming years, lifestyle modifications will become an important, cost-effective way of improving overall health without tipping the bill. Dr. Kelly's article is an introduction to how simple changes can lead to large health benefits across all states.
Vikas Kumar recently completed his medical degree at the University of Pittsburgh School of Medicine.
Friday, May 14, 2010
As the director of Costs of Care and a practicing doctor, I occasionally have the opportunity to offer public commentary on healthcare costs from the doctor's perspective.
I recently spoke with national media about the role (or lack there of) of costs in medical decision making. I'm quoted in last week's New York Times, for a great article entitled "Teaching Physicians the Price of Care".
The same article was syndicated here on National Public Radio, here on Kaiser Health News, as well as several regional newpapers and radio stations around the country. The quote that was used was also picked up for paraphrased versions of the story throughout the blogosphere.
Lastly, an op-ed I wrote aimed at doctors, called "Paying Attention to Patient's Pockets" went online yesterday.
Looking forward to your feedback/comments!
Tuesday, May 4, 2010
While the contentious healthcare reform bill enables access to health insurance for 32 million Americans, what about costs and efficient healthcare delivery?
The often-heard criticism of the 10-year, 1 trillion healthcare reform plan is that it simply does not do enough to rein in the cost of treatments. According to a government report released in February this year, healthcare spending grew to a record of 17.3 % of the GDP in 2009, $ 134 billion more than 2008, marking the largest one-year jump in its share of the economy since the government started keeping such records half a century ago.
The question then is, how does ObamaCare plan to deal with the American view of more care is better care? Given that the new healthcare overhaul requires the government to now pick up more of the healthcare tab, can we cope with that? Moreover, how do we convince patients and providers that new procedures, tests, drugs or devices that might save or improve lives really are not always necessary or worth the exorbitant prices?
A stark example of the inefficiency in the system was brought to bear in a recent study published in JAMA about the rise in unnecessary back surgeries. Despite the growing evidence that it does not really work well for patients and increases the likelihood of life threatening conditions like heart attacks, strokes and pneumonia, complex back surgeries have increased 15-fold between 2002 and 2007. In essence, more complex procedures mean higher payments for surgeons. The misaligned financial incentives, the paucity of patient education about less invasive treatment options and the trying-and-everything mentality in medical practice even if we’re not sure it works are all part of the problem.
And it’s not just more back surgeries. More CT scans pose a problem too. A recent study demonstrated the significant overuse of such scans, projecting that 15,000 people die in a given year due to the radiation received from CT scans. Caesarean births have become more common, with little benefit to babies and significant burden to mothers. Men who would never have died from prostate cancer have been treated for it and left incontinent or impotent. Cardiac stenting and bypasses, with all their side effects, have become popular partly because people think they reduce heart attacks.
Overall, the consensus is that culture change is needed to move away from wasteful spending to more efficient healthcare. They include new making doctors more sensitive to costs of care, establishing new payment methods for doctors, more comparative- effectiveness research and penalizing hospitals for inefficiency. The hope is that the Patient-Oriented Outcomes Research institute established by the healthcare Bill, charged with setting the national agenda for the comparative- effectiveness studies, as well as providing more money and disseminating results, will bring some order into the chaos of practicing medicine.
Sunday, March 28, 2010
more info here:
Institute for Healthcare Improvement listing
Harvard University Gazette listing
Thursday, February 18, 2010
Tuesday, February 2, 2010
Practicing medicine by numbers
In a system of upside down incentives – a fee-for-service payment model that results in doctors doing too much – more tests, more procedures and more treatments, left almost entirely up to a doctors “informed intuition”.
Intuition indeed is necessary in medicine, explains Jerome Groopman, in How Doctors Think, but can lead doctors astray. Numbers on the other hand can help resolve quality variation by data-driven methods.
After years of knowing the benefits of beta-blocker prescriptions, safety checklists and so called ‘evidence based practices’, what keeps doctors from doing what they know? Can we afford to rely on the variability of their good judgment and intuition? Why are quality managing practices like lean and Six Sigma facing so much resistance in the practice of healthcare?
Quite simply put, because we trust our doctors to do what is best for us. Hospitals and physicians that provide less than top-quality care are rarely punished. There is that, and how we pay for healthcare. Volume care is compensated, irrespective of the added value for patients.
In the midst of the country’s struggle to health reform (or lack thereof), this article offers a refreshing look at what can be done right. Brendt James – the champion of the ‘Intermountain way’ challenges doctors to continuously test and tweak protocols, set clinical goals, track patient outcomes and deliver quality care at low costs – offers reason for optimism.
Monday, January 25, 2010
Ever wondered about the contents in your medicine cabinet? Or the forces that got you on those prescription medications in the first place?
This NPR editorial does a great job bringing to light how Merck’s Fosamax for ostopenia, a condition deemed treatable by this drug, got into the cabinets of million women across America. And how the marketing of the pill changed the definition of bone disease and sought women to seek unnecessary treatment.
This pharmaceuticalisation phenomenon, meaning the pharma companies quest to turn every research endeavor into a blockbuster drug highlights the manipulative role of drug companies in deciding what constitutes the definition of a disease just so they can market a drug to cure it.
Set against the backdrop of the controversial evolution of ostopenia as a disease, we read
about how pharma companies are vying to get the FDA to sign off on a prescription pill for jet lag! Do we really need a pill for jet lag? Or worse yet, should we let the pharmaceutical industry decide which drugs fit what therapies? With spiraling healthcare costs are we going to let pharmaceutical companies hold the reigns?
More importantly, can we draw the line between treatment, research and development for the greater good versus drugs that are downright redundant?