The Amazing Maze of US Health Care

Surprise, surprise!  The health care industry spent lots of money lobbying Congress in 2009 and 2010.

Last December, the New England Journal of Medicine provided some interesting insights into money and the legislative and electoral process.

Devil Tree

Using data collected by the Center for Responsive Politics (CRP) for the first nine months of 2009, the Journal estimates that the health sector would spend about a half billion dollars in lobbying in 2009.  About half of that came from the pharmaceutical industry and other health care product manufacturers.

The health care sector does not include the insurance industry which added an additional $160 million to that half billion.

The Center for Public Integrity (CPI) arrives at a much bigger number, $1.5 billion, but their report does not indicate whether it includes spending on elections.  Those amounts are reported separately by CRP.

And now?

What has happened since the bill passed in March?  Again, according to the Center for Responsive Politics (CRP), spending by the pharmaceutical industry during the first half of 2010 is lower than at any other similar time period since Obama’s election.  Since the bill’s passage in March, spending both by individual companies and by the industry trade group, PHARMA, has slowed to a relative trickle.

CRP reports that just three drug companies along with the their trade association, PHARMA, spent $30 million to lobby Congress during the first six months of 2010, two-thirds of that in the first quarter.

But CRP points out:

Despite the decreases experienced by these large groups, the health care reform bill’s passage did not mean a universal decrease in health-oriented lobbying. A few health-related groups actually invested more on lobbying last quarter than at any other point of the Obama era.

Between April and June, American Medical Association and its subsidiaries invested more than $8.8 million in lobbying. Since January, the trade group has spent about $15.2 million on lobbying — an increase of nearly 80 percent above its spending during the same period last year.

And the American Hospital Association, along with its subsidiaries, spent more than $4.6 million on lobbying. Since January, it has now spent about $8.7 million on lobbying — an increase of nearly 12 percent compared to its spending during the first half of 2009.

Lobbying shifts to states

Meanwhile, the Physicians for a National Health Plan (PHNP) reports that insurance companies are shifting their lobbying efforts to the states and focusing their efforts on the details of health care reform implementation.  One of those focus areas is the National Association of Insurance Commissioners (NAIC) who have considerable influence on details like the definition of medical loss ratio.

The Center for Public Integrity  also reports that five for profit insurers are considering a front organization to pump $20 million into this year’s Congressional races

Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc. are weighing the new drive in part to shape the government regulations that will implement this year’s sweeping new health care legislation.

The devil is not just in the details.  The devil is trying to shape the details.

Photo Credit: Flickr – Chris Lim

Hoops

The recently passed Patient Protection and Affordable Care Act (PPACA) does much to promote long term reform of the way physicians are paid for their services.

But could something be done now to simplify the system for both patients and their doctors?

Many health care policy experts tout the current payment system as a major contributor to distorted incentives within the current health care delivery system

Fee for service reimbursement promotes more procedures, surgeries, images, etc. at the expense of patient listening time.

So the PPACA implemented a number of pilot programs to promote efforts to develop more global approaches to reimbursement.  I have discussed some of these in previous posts.

Payment reform now

But there may be intermediary steps that can be taken now to simplify a system that makes sense to no one; sometimes not even the insurers who administer them.

Example one – payment confusion.

A patient, someone I know well, gets a referral from their doctor for physical therapy.  Since I have had some experience with physical therapy and with health insurance, she asks my opinion.  I advise her to go on line to her insurance carrier’s webs site and check if certain physical therapists are in her network.  She does that and identifies a physical therapists in the network and close to her home.

Again, acting on my advice, she calls in advance to confirm that the practitioner still is contracted with this insurance carrier.  She is reassured and schedules a series of appointments.  Several weeks later she gets an Explanation of Benefits (EOB to the cognoscenti) and the insurer has paid nothing.

Her immediate reaction is to cancel all of her remaining appointments.  I persuade her to contact customer service and she if she can get a better explanation than that offered by her Explanation of Benefits.  She is told that the doctor is an out of network doctor and consequently she is liable both for an out of network deductible and for “balance billing” – charges over and above the amount negotiated and approved by the insurance carrier.

“How can this be?” she says to me.  “I looked the provider up on the carrier’s web site, I called the therapist, I don’t understand.”

We got on the phone together and I was able to learn from the customer service agent that this therapist was, in fact, signed up as an HMO provider, a PPO provider, but not as an “Open Access” provider.  Many carriers have developed “open access” networks that are less restrictive than the traditional HMO networks.

The patient contacted the therapist who was more than willing to clear this administrative oversight.

But why should she?

This was a small physical therapy office with only two full time professionals.  They need to hire a support staff that will keep track of all of these different provider reimbursement agreements for each of the countless insurance carriers that she may or may not encounter.

Each reimbursement arrangement will have its own peculiarities, its own administrative procedures and its own customer service contacts.

For whom does this make sense?  Certainly not the patient and certainly not the provider.  Yet, isn’t that who this system is supposed to serve?

Example two – payment confusion

A patient goes for his annual heart check up with the same practice he has always used.  Only this time, the bill is not paid in full as it has been in the past.

The initial inquiry to customer service yields a response similar to patient one – this is an “out of network” provider and the patient must pay the out of network deductible.  Further probing by me elicits some additional information.  This practice is a “participating” provider, but not a “preferred” provider”.  This is more than a bit confusing, because this member has always had PPO coverage.  PPO means Preferred Provider Organization.  What is going on?

What changed is the patient.  He got older, he retired and he enrolled in Medicare.  He still retained the same insurance.  He is one of the lucky few who have employer sponsored health insurance as a retiree.

But some clause somewhere in those provider reimbursement agreements means that the same insurance paid when he was under 65, but not over 65.

A better approach

It is time we developed a single reimbursement methodology for all providers.

That does mean that all providers get paid the same.

It does mean that each provider is paid the same amount regardless of who he or she treats.  Within that system, there can be different degrees of patient responsibility for different groups.

The system may decide that a provider in a rural area may get paid more or less than a similar doctor in an urban area.  It would endeavor to pay those providers with better performance more than those who could not meet the outcome targets.  There could be many other differentiators but one theme will prevail – doctors will know and understand the system they are getting reimbursed by.  And it will not inconvenience patients.

Doctors can opt out of the system, but they cannot pick and chose insurance carriers.  If they are outside of the system their patients will be 100% responsible for all expenses they incur.  The insurance carriers will have no responsibility.

That is the kind of payment reform that would make a real difference.

Photo Credit: Flickr, The Smithsonian Institute

Last week’s post highlighted encouraging initiatives in several states to implement a single payer system within a single state.

This was always a daunting challenge even before health reform.  The Patient Protection and Affordable Care Act has raised the bar even higher.

Hawaii

ERISA and its preemption

Before PPACA a legal hurdle called the ERISA preemption severely hamstrung state health reform efforts.  For those of us in the employee benefits profession, ERISA, including its preemption clause, is our bible or at least our Deuteronomy.

ERISA was passed by Congress in 1974 to regulate employee benefit plans.  The preemption clause precludes states from regulating employee benefit plans.  There were two exceptions to that preemption and both are instructive. Read the rest of this entry »

The single payer movement was not invited into the national health reform debate.

But they are not going away.

July 30, 2010 was the 45^th anniversary of Medicare.  Activists across the country took the opportunity to remind us that Medicare works for older Americans and it can work for the rest of us.

Medicare at 45

The Obama administration took the opportunity to tout improvements in Medicare as a result of the Patient Protection and Affordable Care Act (PPACA):

• More benefits, especially preventative benefits
• More tools to fight fraud and abuse
• Lower drug cots for seniors
• Improved quality of care through pilot programs that encourage more integrated and coordinated care delivery Read the rest of this entry »

A new study by the Commonwealth Fund comes to an old conclusion.

The United States is still last in health system performance.

The 2010 version of Mirror Mirror updates comparative health system performance data from seven industrialized countries.  The sad conclusion is that the United States is last or next to the last in five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives.  And they are last overall.

This conclusion is no different than that reached in previous versions of the report issued in 2004,2006, and 2007.  This year’s update adds physician and patient survey data on care experiences and dimensions of care and also adds the Netherlands into the comparison.

The Netherlands – first;  The US – last

The Netherlands may not have made it to number 1 in soccer, but they leaped to the head of pack in health system performance.

Those who consistently tout the US health care system as the best in the world clearly are not paying attention to this and similar studies.  In fact, they are not listening to their neighbors, or at least to other Americans. Read the rest of this entry »