HIPAA costs ?

[donheff]

Originally Posted by mykidslovedogs

Rich in Tampa,

I really am not a calloused insensitive person. I understand that there are so very many people that don't choose to get sick, but why oh why can't they have planned better while they were young and healthy? Even paying regularly for a $2000 deductible/100% high deductible healthplan, kept in place for life, is better than going into financial ruin.

I haven't been following this thread so excuse me if this has already been discussed, but this quote caught my attention floating by on the RSS reader. It seems to me that the US has structured its health care system to prevent people from doing what you suggest. We tie health care to employment so of course people don't buy their own. I will cite my own children as an example. I paid for a relatively low cost policy for my son when he first graduated college but as soon as he became employed and covered by a good policy I dropped the redundant coverage. What efficient ER type would want to dump extra hard earned dollars on a redundant policy when they have a perfectly good one at work.

Why don't we change the COBRA law to make the extension permanent?

EDIT: darn - now I am going to have to floow this extensive thread

[Rich_in_Tampa]

Originally Posted by mykidslovedogs

Sorry, this whole subject just fires me up! I am a 'free market' person, but I guess I just am not going to be able to convince others.

Well, if your goal is essentially to convince others, you are probably right.

OTOH, if you are at least open to learning and broadening your perspective on the issues, you may find that there are some shades of gray worth considering.

In my observations, there is a large and rapidly growing group of free market, conservative thinkers who are softening on the issue of universal coverage and even Medicare style solutions. It is no longer just another liberal v. conservative or free market v. socialism issue. Are there some who have done splendidly? Sure. But there are some who made a fortune during the depression, too.

I clung to the traditional system for quite a while (after all, it served my interests quite well ) but ultimately could not deny its frightening inadequacies as I saw friends, patients, and acquaintences pillaged economically, stuck in jobs they couldn't stand, unable to retire for lack of available or adequate coverage, spending hour after hour arguing with some young script reader at the insurance company straightening out claims errors, etc. etc. I won't even get into the games that hospitals have been forced into in order to survive - think Kafka.

BTW, while I have not found myself agreeing with or persuaded by many of your points, I do respect the way you (and others) have kept the tone civil.

[macnjus]

To expand on my free market comments earlier, I believe that it is a huge flaw in the system to tie "fair pricing" of services to insurance coverage. Why should one be required to be in an insurance plan in order to get fair pricing ? The decision to buy insurance should not be influenced by that decision's consequence on the ultimate price of the service. The consequence of tieing these issues together is that the insurers get to extract an extra "rent" from the consumer because the consumer can't get fair pricing otherwise.

Compare the example of homeowner's insurance. I have paid off my mortgage and am not required to buy homeowner's. Whether or not I have homeowner's insurance should have no influence on what it costs to rebuild my house. The cost of the insurance represents the market-priced assessment of the risk factors, it has nothing to do with the price to rebuild; whether I pay or the insurance company pays, it is the same. My choice on whether to purchase this insurance is based solely on my willingness to bear the risk and has nothing to do with a price differential to repair/rebuild.........Medical insurance and health care pricing should work the same way.

[Martha]

It will be interesting to see what plans are proposed in the legislature.

I have over time come to favor a national plan where everyone is covered, similar to medicare. This would mean that medical professionals are not employed by government but their source of payment would be the government in large part. Copays and deductibles would still exist.

But, I am agreeable to looking at solutions short of that. Minnesota is a pretty good model with its subsidized risk pool that doesn't break the bank and sliding fee plans for the working poor. Maybe we could do something similar on a national level. But, adverse selection is still a problem in Minnesota because people may not get insurance until ill. To avoid this issue, preexisting condition periods exist unless you are HIPAA qualified. A better solution would require everyone to have health insurance and the only practical way I can think of that happening is with a national plan that covers everone.

Another option is to require insurance be guarantee issue with no underwriting. However, that has not worked well in states with guaranty issue plans as the cost has been prohibitively high. You end up with the older less healthy in the plans and others getting their insurance through work. So I favor a solution that covers everyone from the get go to help with adverse selection issues.

I do hope we are ready again for a national discussion on the issues.

[Martha]

Originally Posted by macnjus

To expand on my free market comments earlier, I believe that it is a huge flaw in the system to tie "fair pricing" of services to insurance coverage. Why should one be required to be in an insurance plan in order to get fair pricing ? The decision to buy insurance should not be influenced by that decision's consequence on the ultimate price of the service. The consequence of tieing these issues together is that the insurers get to extract an extra "rent" from the consumer because the consumer can't get fair pricing otherwise.

Compare the example of homeowner's insurance. I have paid off my mortgage and am not required to buy homeowner's. Whether or not I have homeowner's insurance should have no influence on what it costs to rebuild my house. The cost of the insurance represents the market-priced assessment of the risk factors, it has nothing to do with the price to rebuild; whether I pay or the insurance company pays, it is the same. My choice on whether to purchase this insurance is based solely on my willingness to bear the risk and has nothing to do with a price differential to repair/rebuild.........Medical insurance and health care pricing should work the same way.

The problem is that the individual has no bargaining power. Medicare, Medicaid, and insurance companies all want a discount. If a provider refuses, they miss out on a lot of customers. An individual is in no position to compete with an insurance company.

[macnjus]

Of course the individual has no comparable bargaining power, hence the need for government regulation.

Compare the current situation with individual investors in the stock market. 25 years ago, small investors paid massive transaction costs compared to large institutions. Today, due both to regulatory and competitive factors, an individual's commission costs are not significantly higher than what a large institution would pay. There is no reason that health care costs could not follow this path. In the stock market, if a broker tries to mark up the price of a stock by 300%, he would be fined and perhaps jailed; in the health care market it is simply considered business as usual.

[mykidslovedogs]

Originally Posted by macnjus

I am probably one of the biggest free market proponents you will ever meet, but in spite of my free market underpinnings, I recognize when it is time to cut losses and move on; the current health care system is failing in many serious respects, one of those being the concept that there is much freedom in the market anyway.

An example of a failing: In a free market, when I want to pay more than somebody else for a given product or service, it will be sold to me before that other person gets to buy it. Not so in health care, a recent example, a friend of mine had a daughter who needed sinus surgery, the list price from the hospital was $30K for this relatively simple outpatient procedure. The negotiated price to the insurance company was $7k. Had he shown up with no insurance, his charge would have been $30K. If he had offered to pay $9k ($2k more than the insurance paid) he would have been told that the price was $30K, take it or we see you in court. If he could not afford to pay, they would either take what he could pay, or perhaps force bankruptcy on the individual. This is not how a free market is supposed to work.

To oppose a Federally mandated restructuring of the Health Care market on Free-market grounds is to ignore what is actually occurring in the market today. What we currently have in no way resembles a free market.

I tend to disagree with you on this point. Insurance companies are able to negotiate huge discounts with providers because of the large volumes that they bring to the table for the providers. It is much like Home Depot would be able to negotiate discounted pricing for purchasing large volumes of lightbulbs from a wholesaler. Providers are willing to negotiate discounts in return for the large volumes of customers the insurance companies can bring to them.

I highly doubt that a provider would completely refuse to PRE-NEGOTIATE a discounted rate with someone who doesn't have insurance. (notice I said PRE-NEGOTIATE). That simply makes no sense.

Rich in Tampa, you were or are a doctor... If someone came to you who didn't have insurance but asked you to PRE-NEGOTIATE a discounted rate and even offered more to you than what an insurance company would have paid, would you refuse the cash payment and even go as far as to destroy their credit by forcing them into bankruptcy?

I have a friend who could afford insurance but chose not to buy it. When his wife had her babies, he PRE-NEGOTIATED with his wife's providers even better rates than what insurance would have paid for the labor and delivery, and made out with a great deal. Fortunately, his wife did not have any complications during the births.

Lastly, if you really want to be able to take advance of insurance companies volume discounts, then why not just purchase a discount plan if you don't want to buy insurance? These discount plans are extremely inexpensive and give you the ability to take advantage of pre-negotiated rates for services and prescriptions.

[Rich_in_Tampa]

Originally Posted by mykidslovedogs

Rich in Tampa, you were or are a doctor... If someone came to you who didn't have insurance but asked you to PRE-NEGOTIATE a discounted rate and even offered more to you than what an insurance company would have paid, would you refuse the cash payment and even go as far as to destroy their credit by forcing them into bankruptcy?

I never negotiate my fees (for reasons below), but I might agree to write off nonpayment.

I am not allowed to charge a different fee for non-Medicare patients than I do for Medicare patients, so changing my fee is probably in violation of my MC provider agreement (of course MC pays less than full fee in any event).

And believe it or not, your fees allowed by medicare are based in part on what you billed for those services the previous year, so there is a disincentive to lower fees under any circumstances. It is not a free-market scenario.

And some contracts pay at a percent of fees, so keeping them current and market-consistent is important.

So, for me it's pro bono in the form of writing off part of a patient's balance. Of course there is just so much of this you can do in a private practice, but I did it alot. Still made enough to do just fine back then, but if I were in private practice now, I'd probably not do it -- reimbursement is too low in primary care to support an income I feel is fair (probably lower than most would guess). All this is one reason why I went into academic medicine decades ago.

There is a long tradition of charity care in the profession which is fast becoming another victim of the mess we are in.

[mykidslovedogs]

Originally Posted by Martha

It will be interesting to see what plans are proposed in the legislature.

I have over time come to favor a national plan where everyone is covered, similar to medicare. This would mean that medical professionals are not employed by government but their source of payment would be the government in large part. Copays and deductibles would still exist.

But, I am agreeable to looking at solutions short of that. Minnesota is a pretty good model with its subsidized risk pool that doesn't break the bank and sliding fee plans for the working poor. Maybe we could do something similar on a national level. But, adverse selection is still a problem in Minnesota because people may not get insurance until ill. To avoid this issue, preexisting condition periods exist unless you are HIPAA qualified. A better solution would require everyone to have health insurance and the only practical way I can think of that happening is with a national plan that covers everone.

Another option is to require insurance be guarantee issue with no underwriting. However, that has not worked well in states with guaranty issue plans as the cost has been prohibitively high. You end up with the older less healthy in the plans and others getting their insurance through work. So I favor a solution that covers everyone from the get go to help with adverse selection issues.

I do hope we are ready again for a national discussion on the issues.

Martha, thank you for your comments. I am glad you are open to ideas. I am too! The main reason I don't think a nationalized system will work is because it will be too much like medicare and medicaid. Providers will be underpaid and this will stifle technology and innovation in the marketplace. Even though providers would not be employees of the government, the government will not be able to compensate them enough to make their careers worthwhile. The long-term consequence would be that fewer and fewer people will choose healthcare careers because of all of the problems related to dealing with beurocracy. This will ultimately lead to poor quality of care in our system.

Guaranteed issue never works because it stifles competition in the marketplace. Whenever you force insurance companies to cover everyone, they simply drop out of the market, leaving only one or two carriers to compete in the area. This leads to extreme inflation in the pricing of coverage. If we forced insurance to guarantee issue coverage in the entire USA, we would drive many insurance companies out of business, leaving the few that are left to charge exhorbitantly high prices in order to protect themselves from adverse selection.

So what can we do? I guess we could work on improving the existing medicaid system, while still encouraging our young folks to plan better for their futures.

Perhaps the government could create something like a national HMO for those who choose not to purchase their own coverage. The idea would be that the members (people who don't want to buy insurance) would be limited only to physicians practicing in the nationalized HMO facilities, so the services would probably not be as good as services given to people that have their own insurance, but it would be better than having nothing. How would we convince providers to work in the national facilities? Well, my thoughts on this are that the providers that would choose to work in the national facilities would be ones that are just beginning their careers and need practice. They would be the interns and lower quality doctors that aren't really good at marketing their practices. These doctors would the ones that accept lower levels of income in order to come into a career that has an immediate clientelle and average pay. What do you think about this idea?

[mykidslovedogs]

Originally Posted by Rich_in_Tampa

I never negotiate my fees (for reasons below), but I might agree to write off nonpayment.

I am not allowed to charge a different fee for non-Medicare patients than I do for Medicare patients, so changing my fee is probably in violation of my MC provider agreement (of course MC pays less than full fee in any event).

The point you made above is precisely why i think nationalizing care is a bad idea. Even you admit that you moved to academic medicine. It simply wasn't worth it to continue your career with the way things were going. Nationalizing care will eventually lead to poor quality of care, because fewer and fewer people will choose careers as doctors.

[Martha]

I have concerns about the idea of a national HMO for people who don't buy insurance. In part because of Mississippi's bad experiences with charity hospitals and having two dramatically different levels of care.

[mykidslovedogs]

Originally Posted by Martha

I have concerns about the idea of a national HMO for people who don't buy insurance. In part because of Mississippi's bad experiences with charity hospitals and having two dramatically different levels of care.

I don't see how you can get around a little bit of unfairness in a free market. Of course a national HMO would have a lower level of care, but if we force everyone onto a system like that, then we will ALL have a lower quality of care. Which is worse? I would venture to say that it is better to have the few have a poorer level of care with the option to upgrade when they can, vs. having the whole country have to suffer with a lower level of care just so everyone can be equal.

If we go the other extreme, we are going to hurt the quality of care in our country for ALL people.

[Rich_in_Tampa]

Originally Posted by mykidslovedogs

The point you made above is precisely why i think nationalizing care is a bad idea. Even you admit that you moved to academic medicine. It simply wasn't worth it to continue your career with the way things were going. Nationalizing care will eventually lead to poor quality of care, because fewer and fewer people will choose careers as doctors.

You are drawing inappropriate inferences from my reply.

I see tons of patients in my academic role. The difference is that billing is centralized and handled by others. All I do is submit a billing card for each patient. It's a pleasure.

Just like they do in Canada.

[mykidslovedogs]

Originally Posted by Rich_in_Tampa

You are drawing inappropriate inferences from my reply.

I see tons of patients in my academic role. The difference is that billing is centralized and handled by others. All I do is submit a billing card for each patient. It's a pleasure.

Just like they do in Canada.

Please elaborate on how academic medicine differs from "regular" medicine. I am unaware on how the system works and what makes it better than insurance. I would love to understand the Canadian system better...Please elaborate....I really do want to understand.

[Rich_in_Tampa]

Originally Posted by mykidslovedogs

Please elaborate on how academic medicine differs from "regular" medicine. I am unaware on how the system works and what makes it better than insurance. I would love to understand the Canadian system better...Please elaborate....I really do want to understand.

Mydogs,

Academic medicine is simply a career option for some doctors. We teach, research, see patients, and so on in a university hospital setting. We are the ones who teach the doctors of tomorrow (students, residents, etc). Billing-wise it is essentially a very large group practice so it is probably similar to working for any large group. The individual doctor relegates the billing to a team of administrators.

Between actual billing, coding, compliance with complex regulations and so forth, this is an extremely large and expensive enterprise, but I just don't have to spend much time worrying about it as long as I proceed ethically and cooperatively.

The Canadian system I leave for others to explain in detail but from a billing standpoint, any doctor in the system simply fills out a uniform bill for services, submits it to the appropriate provincial authority, and gets reimbured a predetermined about. The system is not without its advantages and disadvantages, but billing is clearly nothing like the nightmare it is here.

[shiny]

The Scandanavian countries seems to have this down pretty well, maybe we should study what works for them.

Also, the point that donheff made seems to apply to most of us who have worked in the private sector - why would we have been paying all along for redundant healthcoverage when we have good coverage through our employers? Once we quit and can no longer stay in that group (past COBRA) then we are at the mercy of the insurance company.

Also, as part of the "freemarket" economy, I want to be able to move to any state that I wish and not have to worry about losing my healthcare coverage. I guess as mkld said some people wouldn't move if it would harm them financially, but it sounds like being held hostage to me.

Also, when people are hurt or sick they (we) are vulnerable and need care. It is not the most opportune time to negotiate healthcare costs.

It could just be my inner liberal-socialist-leftwing radical talking here, but basic healthcare seems more of a basic human need that all societies should strive to provide than a cold-hearted business negotiation.

[mykidslovedogs]

I would be curious to see how they (the scandanavians) do it, and also to find out what kind of income taxes are paid by the people to support the nationalized care.

I don't think it makes any sense to tie health insurance to employment. In the old days, when people worked for the same companies for 20 plus years, it made sense, but it just doesn't make any sense anymore. The short amounts of time that people work for one company or another create costly administration for employers (particularly in Cobra administration) and all kinds of problems with portability of coverage.

I don't think people should double cover. Since many employers don't even pay for dependent coverage anymore, why not just waive the employer benefit and purchase an inexpensive HSA plan for the whole family? It might even be less expensive to do that than to pay the dependent premiums on the employer sponsored plan. Maximum out of pocket expenses are oftentimes lower on an HSA anyways, because there isn't any coinsurance or infinite copays to worry about. Coverage is simply 100% after deductible for all medical expenses