The second advantage to the system of having the patient pay up front and then get reimbursed is that people by nature will think twice about going to the doctor if they know that they have to pay for the visit themselves – even if they know that most of the money will be reimbursed.  It’s sort of an instant-gratification-in-reverse idea, and helps to reduce over-utilization of health care.

For me, the most interesting part of the article had to do with the fact that the office visit in question was priced at $33.80.  Apparently, that was the entire cost of the visit, 70% of which would later be reimbursed by health insurance.  When was the last time you saw a total office visit charge that was less than $35?  My family has an HSA-qualified policy, so we pay for our own medical expenses until if and when we meet our deductible.  With Jay’s knee surgeries over the last couple years, we’ve had lots of office visits, both with the surgeons for consultations and follow ups, and also with the physical therapists.  The billed amounts have ranged from $63 to $150 per visit, with most of the visits in the $110 range.  Our health insurance policy pays for our son’s well child visits (all policies in Colorado have to cover well child visits before the deductible), but I’ve never seen an office visit charge of less than $100 on the EOBs we get after his check ups.

The cost of an office visit in France is significantly less than it would be here.  Figuring out why, and implementing some of the same strategies here, ought to be part of our health care reform efforts.  All of the effort we’re putting into health care reform seems a bit silly if we continue to pay two or three times as much for basic services as people in other developed countries.

I found Jason’s article in the Cavalcade of Risk, which he hosted this week at The Healthcare Economist.

When Jay hurt his knee a couple years ago, an MRI was done prior to surgery.  We have an HSA qualified health insurance policy, and at the time our deductible was $3000.  So we paid for the MRI ourselves, and it amounted to more than a third of the deductible.  And that was after Humana reduced the bill to the network negotiated amount.  MRIs have helped to make medicine a much more exact science, but they are not cheap.

It seems that any system that pays physicians – directly or indirectly – to order additional testing will end up with excessive testing, adding to the overall cost of health care.  Even doctors with the best of intentions are likely to be swayed by the knowledge that they can boost their paychecks by adding a few MRIs here and there.

I believe that the number of tests a doctors orders should not impact his or her income.  And it seems that adding more medical imaging facilities in primary care offices will only increase our already burgeoning health care costs.

I found Stacey’s articles in Grand Rounds, hosted in trick-or-treat style over at Code Blog.

This will no doubt cause some consternation among workers who see reductions in benefits and increased out-of-pocket exposure, but with the state of the economy and the rising cost of health care, it’s the only avenue that really makes sense for employers.  Most companies that offer health insurance benefits do so as a way to attract and retain the best workers they can find, so limiting benefits and increasing the employees’ share of the costs is likely the option of last resort.

But maybe it makes sense, regardless of how well the economy is doing.  There’s no doubt that a co-insurance based system, where employees pay a percentage of the charges, rather than a flat copay, would make people more aware of what health care actually costs.  Nobody should have to devote their life to trying to obtain coverage for a serious medical problem, but on the other end of the spectrum, perhaps nobody should be paying only $15 to see a doctor, and a deductible of a couple hundred dollars a year.  Health insurance plans that cover nearly all costs for their members have the effect of insulating consumers from the true cost of health care.  This is especially so if the premiums for the health insurance policy are mostly paid by the employer.

When it comes to things like housing and vehicles and food, most people expect to pay those expenses – which are often quite significant – without assistance from anyone else.  It seems to me that health care is equally as important as transportation and shelter, but because we’ve grown accustomed to the idea of someone else paying the lion’s share of the bill (ie, health insurance companies and our employers), we don’t expect our own health care expenses to be as much as we spend on other life necessities like housing and groceries.

For self-employed people, and those who have been buying their own health insurance because they don’t have access to a group plan, high deductibles and annual premium increases are already a fact of life.  Most of our clients here in Colorado opt for deductibles in the $1500 – $3000 range, and often choose HSA qualified plans as a way to lower their premiums – with the understanding that they will be taking on an increased portion of the claims if they get sick.  But most working Americans get their health insurance through their employers, and have thus been largely shielded from the actual costs of health care and health insurance.  Perhaps that is changing now.  And perhaps the changes will increase pressure on the health care industry to do something about spiraling costs.

I agree with several of the points Mackey made.  I agree that HSAs should be available to anyone who wants one.  But just having an HSA in place doesn’t mean that a person will have money to fund it; for a lot of people, HSAs won’t make health care any more accessible than it is(n’t) now.

I strongly agree that employer-provided health insurance and individual health insurance should be treated equally as far as taxes are concerned.

I agree that we need tort reform.

I agree that health care costs need to be much more transparent.

Mackey writes that we should modify the tax code so that people can make voluntary, tax-deductible contributions to help provide care for people who are uninsured.  The rainbows and puppies nature of this idea is nice in theory, but I don’t think we want to rely on voluntary donations to pay for the care of 47 million currently uninsured Americans.

His other suggestions – to allow the purchase of health insurance across state lines and to eliminate government mandates from health insurance coverage – are fraught with complications and not nearly as simple as he makes them sound.  The number one priority in health care reform needs to be the American people.  Yes, there is a lot of special interest involvement in health care, but removing consumer protections that have been won by state insurance commissioners isn’t going to ensure that people have access to quality care.  And removing mandates from coverage would result in lower premiums, but it would also mean less coverage, which isn’t necessarily a good trade-off.

As expected, Mackey’s article triggered a firestorm of anger from his base of liberal customers.  Jaan Sidorov of Disease Management Care Blog wrote an article about a group that staged a pretty creative demonstration in a Whole Foods store in Oakland.  Mackey believes that health care (along with food and shelter) is not a basic right.  The protesters – and I think quite a few of Mackey’s customers – feel differently.  Mackey is obviously doing well financially, and probably doesn’t have to worry about how he’s going to pay for his own health care.  I think it’s a lot easier to say that health care isn’t a right when your own health care is well-secured.  Mackey’s belief that health care is best left to the free market makes sense, given his participation – and success – in market economics over the years.  But with any commodity in the marketplace, there will always be people who can’t afford it.  Especially when the commodity is as expensive as health care has become.  The life or death nature of access to health care makes it too important to place it on the same shelf as cars and jeans and high-end organic potato chips.  It people can’t afford (and thus don’t purchase) those things, they will still be ok.  The same can’t really be said for health care.

I found Jaan’s article in the Cavalcade of Risk, hosted this week by David Williams at Health Business Blog.

Years ago, she broke her wrist and ended up paying $14,000 out of pocket to get herself put back together.  It was expensive, but she figures she’s still come out ahead because she hasn’t been paying thousands of dollars each year in health insurance premiums.

As I read through the article, all I could think was “what if…?”  I can empathize with Lyn.  I go to great lengths to keep myself and my family healthy.   I understand Lyn’s frustration with knowing that she’s healthier than the average 52 year old, and would thus be subsidizing their care if she buys into a health insurance policy.  But if she breaks her back on a ski slope, they will be subsidizing her care too.   The $14,000 bill for her wrist surgeries was no doubt a tough pill to swallow – but what if it had been a $140,000 bill?  or a $1,400,000 bill?

At the end of the article, it was mentioned that the process of doing the NPR story made Lyn second-guess her decision to go uninsured, and she’s now shopping around for a high deductible policy… just in case.  She had mentioned earlier in the article that she estimates it would cost $500/month for health insurance.  She doesn’t live in Colorado, but premiums here are in the same basic ballpark as premiums in other states that use medical underwriting on individual health insurance policies.  I checked rates for a healthy, non-smoking, 52 year-old female, and came up with a range of options priced between $200/month and $260/month for a good quality, $5000 deductible, HSA qualified plan (people like Lyn, who rarely need their health insurance and are in good health, are good candidates for high deductible plans).   So hopefully Lyn will get a pleasant surprise when she gets her quotes, and the premiums won’t be as high as she was expecting.

I notice that when I read articles about people who are choosing to go uninsured, they tend to have an example of a medical problem that they have been able to cover by paying the doctor or hospital directly – in Lyn’s case it was the broken wrist.   But what I’ve noticed is that the bills mentioned are usually in the $5000 – $20,000 range.  I can’t remember ever reading an article about someone who chose to go uninsured, ended up with a six-figure medical bill, and then paid it off on their own.   I have to imagine most of those cases end in bankruptcy.

In Colorado, discount-style plans are required to state clearly on their marketing materials that “this is not insurance”.  This is common on dental and vision discount plans, and on some of those too-good-to-be-true policies that promise to cover a family of six for $100/month.  But there are other plans that technically qualify as insurance, but still leave members with precarious gaps in coverage.

Policies with low per-incident or annual limits are one example, as are plans that break down claims into specific sections (things like per day hospital expenses, for example) and cap each section with a set dollar amount.  Some policies have extremely high coinsurance stop-loss limits, but are sometimes sold by agents who focus on the 80/20 aspect of the policy, rather than the actual out-of-pocket limit of the coinsurance.  In all of these cases, if the consumer is completely aware of what is being purchased, what the coverage limitations are, and how much exposure they would have in a worst case scenario, I have no problem with the policies being sold as insurance.  If the premiums are low enough and the consumer is educated about the coverage, even a catastrophic-only policy might have some takers (although I find it hard to believe that many people would knowingly purchase a policy that could leave them with hundreds of thousands of dollars in bills – one would assume that if plans like that were clearly marketed, they wouldn’t sell very well).

But the problem is that the consumers are often not well informed about their coverage limits.  This might be because the agent is new to the business or just desperate to make a sale.  Or it might be because the consumer is so anxious to get a low premium that the nitty gritty details of the coverage get ignored.  Whatever the reasons, it’s all too often that people find themselves in a financial mess because the holes in their health insurance policies don’t become evident until they are in the midst of a large claim.

My own opinion on this is that we need to maintain a wide range of options for consumers, but enact more consistent marketing guidelines.  If a consumer has a large bank account for emergencies and is happy with $25,000/year in out of pocket exposure, it’s not my place to tell that person that the policy is unacceptable.  But if a consumer is unaware of the $25,000 out of pocket exposure and purchases the policy because of a slick sales presentation, that is most definitely a problem.

Currently, health insurance marketing is regulated on a state-by-state basis by insurance commissioners.  In Colorado, we have the health plan description form that is standardized and makes comparing plans somewhat simple.  But it tends to get buried in marketing materials, and is often overlooked by consumers.  I would take this a step further and make sure that all plans – regardless of where they are sold – clearly state the important details up front.  Things like deductible, coinsurance limits, annual or per-incident limits (if any), major exclusions (expenses like prescription drugs or physical therapy, for example) etc. should be stated clearly and concisely on all marketing materials.

At the same time, I think that we do need some more regulations to remove the worst of the worst policies from the market.   There is a fine line to walk here though, because a plan that seems horrible to one person might be just what another is looking for.  For my family, $5000 is an acceptable amount of risk, but $20,000 is not.  Perhaps for another family, $20,000 is an acceptable amount of risk, but $50,000 is not.  We need to be careful about balancing consumer protections without limiting plan designs too much.

I found Anthony’s article in the Health Wonk Review, hosted this week at Medicaid Firstaid.

But how do we translate that into practice for an entire country?  It’s hard to force people to eat better or exercise more.  Some lawmakers are trying, but by and large, it’s still up to each of us to decide what we eat, how much we move, whether we smoke, etc.  Colorado is among a growing list of states that has banned smoking in or around most public buildings, but people still have to choose whether or not they will smoke in their own homes.

Yes, we can tax cigarettes, soda, and trans fats, but that tends to put an additional financial burden on people who can least afford it.  We can tell people they shouldn’t be smoking or eating potato chips – but most people already know that.  Putting the knowledge into practice is where the going gets tough.  And just as we’ve seen the lobbying power of the health care industry at work this summer, the junk food and tobacco industries have some pretty strong lobbies too.

I agree wholeheartedly that we need to focus on prevention of illness and personal responsibility in health care.  But these do not take the place of a good health insurance policy.  My father was stricken with Wegener’s Granulomatosis at age 54, and the rare autoimmune disease caused permanent kidney failure – despite a lifetime of excellent health habits.  His medical bills over the last several years have been huge; if my parents had been uninsured, they would have been bankrupted.

So while we need to do a much better job of stressing personal responsibility in health care, we also need to make sure that everyone has access to quality health care when it’s truly needed, and a good catastrophic health insurance policy that will kick in when the unexpected happens.  The health care problems that we’re facing aren’t going to be solved by government alone, but they also aren’t going to be solved without any government action at all.

One of the analogies presented says that forcing everyone to carry health insurance would be like a person living in a building with pyromaniacs as neighbors having to pay for fire insurance along with everyone else – with no option to move.  I can see this argument being valid in the case of someone who works for an employer who only offers one health insurance policy to all of the employees.  Premiums in group health insurance plans typically vary by age but not much else.  So a non-smoking employee who exercises six days a week and eats vegetables at every meal will have the same premium as a same-age coworker who smokes and is obese.  The employer will pay part of the premiums, but it’s very common these days for the employees to have part of the premium deducted from their paychecks.  If the employer doesn’t offer any other options (like a higer deductible or an HSA qualified plan), the healthy employee could well become frustrated at paying for benefits she isn’t likely to use.  But it’s quite common for employers to offer a couple different choices, with a lower-cost, higher deductible option for people who don’t think they’ll need much in the way of health care.

I don’t buy the argument that people should be able to opt out completely from health insurance.  Because no matter how healthy we keep ourselves, the unexpected can still happen.  If you’ve chosen to “self-insure” and then you get struck by lightening while walking your dog in the park, who is going to pay your medical bill?  If you’re unconscious at the scene, the paramedics will load you up in the ambulance and take you to the hospital.  Upon arrival there, doctors and nurses will pour their hearts into trying to restart yours.  What if you wake up a few days later in ICU, alive, but very much in debt?  Will you declare bankruptcy, leaving the hospital to write off the bill?  That leads to higher premiums for the people who do carry health insurance, as hospitals charge more to cover their overhead – which includes bad debt.

The fact is, no matter how careful we are, no matter how healthy we keep ourselves, no matter how many veggies we eat and miles we walk, we never really know what is around the bend when it comes to our health.  Accidents can happen to even the healthiest people.  Freak illnesses can strike otherwise healthy people.  And when these situations arise for people who are uninsured, the cost is eventually borne by those who have health insurance.  Yes, the people who take excellent care of themselves are less likely to need medical care.  But less likely doesn’t translate to never.

From a personal perspective, we work hard to keep our family healthy.   Because we know that we’re very unlikely to need our health insurance for illness, we have a high deductible HSA qualified policy.  We’re willing to gamble a bit when it comes to our health care.  If something happens to one of us, we’re on the hook for the first $5000.  And because we know that our chances of needing health care are low, that’s a gamble we’re willing to take.  But our chances of needing healthcare are not zero, no matter how hard we try.  Which is why I consider opting out of health insurance all together to be a bit on the irresponsible side (unless you’re wealthy to the point that a policy that covers $5 million in claims isn’t any better than your own bank account).

Chris’ article was in the Health Wonk Review this week, hosted by Healthcare Technology News.

The individual market is different.  Medical underwriting is part of the application process, and applicants can be declined, offered coverage at a higher price, or offered coverage with pre-existing condition exclusions.  The trade off is that the policies are less expensive than they would be in the group market.

Jay and I have an HSA-qualified policy for our family.  It has a $5000 deductible (one deductible for all three of us together).  Other than a small amount of preventive care, nothing is covered before the deductible is met, so our coverage only comes into play if we have a relatively large claim.  But it only costs $288/month for our family.  It also allows us to put pre-tax money into an HSA and save up for the possibility of having to meet our deductible one day (or for retirement, if we don’t end up needing the money for medical expenses).

Jay and I are both full-time employees of our corporation, and could thus qualify as a group of two with any small group carrier in the state.  For comparison’s sake, I got a quote for us for an Anthem Blue Cross Blue Shield HSA-qualified policy.  Jay and I would each have our own policy as a group of two, with our son added to one of the policies.  I found an HSA qualified small group policy that would cost $578/month for our group.  But the deductibles would end up being a total of $15,000 for our family on that policy.  The policy would be twice as expensive as what we have now, and the out of pocket exposure would be three times as much as what we have now.  And that’s a quote from a very competitive carrier.

Incidentally, if all three of us had medical conditions that allowed us to qualify for Cover Colorado, we could pay a total of $550/month for three separate HSA qualified policies, each with a $2000 deductible.  This is another example of guaranteed issue coverage, and the increased price when compared with our current policy reflects the added cost that comes when health insurance picks up the tab for pre-existing conditions.

That’s what happens when policies have to be guaranteed issue (and include state mandated coverage like maternity on all policies).  Of course, the current small group market doesn’t include any sort of mandate requiring groups to purchase health insurance.  Proponents of a shift away from medical underwriting on individual health insurance policies also tend to back a measure that would require everyone to carry health insurance.  That would help spread the cost of care across a larger population, and would likely help to contain the price increase that we would see if medical underwriting were to cease.  But my guess is that we would still see a rather dramatic increase in premiums.  This highlights the importance of getting to the root of the issue of health care costs, and how to contain them at source.  Health insurance pays the costs, and unless we can lower those costs, it’s unlikely that we’ll be able to lower the cost of health insurance.

I found Hank’s post in the Cavalcade of Risk, hosted down under this week by Andrew at Oz Risk.

But does preventive medicine really help?  It definitely gives people peace of mind and is a feel-good benefit on health insurance policies.  And anything that enhances peace of mind is providing some degree of benefit.  But what about long term outcomes and effective use of health care dollars?  Stacey Butterfield, at ACP Internist has written an article addressing this question, and it’s well worth a read.  She focuses on a study that indicates that pap smears might be overused in younger women, and that the rush to colposcopies following an abnormal pap might be unwarranted.

I believe preventive health care is important, but I think that we might be coming at it from the wrong angle.  Legislation dealing with preventive care tends to focus on increased access to screening tests.  We like to believe that if we all get poked and prodded on a regular basis, with numerical values assigned to everything from our bone density to our blood glucose levels, that we can ward off illness.  Of course all of those tests are expensive, regardless of whether they’re paid for by the government or by private health insurance companies.  And containing health care costs is supposedly one of the main priorities of health care reform.

Remember when Obama said that we should all be more diligent about keeping our tires properly inflated?  People laughed, because as a society, we tend to want solutions that are complex and technical.  We want big and grandiose, when small and simple might actually do the trick.  Preventive medicine in the form of screening tests isn’t actually preventive if you think about it.  Catching an illness in an early stage isn’t really the same thing as preventing the illness in the first place.  Yes, early detection is preferable to not seeking care until one has stage IV cancer, but wouldn’t it make more sense to actively promote real prevention?  What if we encouraged (ie, paid) doctors to do more active prevention with their patients?  Yearly consultations about lifestyle issues like diet, exercise, alcohol and tobacco use, junk food consumption, seat belt use, safe sex, etc. could go a long way towards real prevention.  Some doctors are already working on this, but much more could be done.  And if the government really wanted to focus on preventive medicine, this might be a more effective way to go about it than costly screening that may or may not actually improve patient outcomes.

I found Stacy’s article in Grand Rounds, hosted this week by Dr. Rich at the Covert Rationing Blog.