PassionForSubro » Health Insurance is NOT Health Care

“Just as health insurance is not health care, so too health insurance reform is not health care reform.  Yet, because the ACA got so much press, and many previously uninsured individuals did secure insurance (giving us all the warm and fuzzies), the result was a nationwide misconception that affordable insurance equates with affordable health care. For many, ObamaCare is therefore viewed as a success because millions of uninsured Americans are now insured.

Yet, insurance isn’t a magical money-tree. Like a college student wielding his first credit card, a newly insured America forgets that “someone” has to pay, eventually.  What you buy – with your own money, or with insurance – and how much it costs, still matters.  Insurance just passes the buck – to other insureds, and to you, when the time comes to renew. It blows my mind.  People are involved in car accidents, get out of their vehicle, examine the minor damage, and agree NOT TO REPORT IT TO THEIR INSURANCE, because they DON’T WANT THEIR PREMIUM TO INCREASE! People actually choose to pay for car repairs out of pocket, because they fear insurance premium increases and want to save their insurance for “when they really need it.”  Yet, if we treated auto insurance the way we treat health insurance, we’d be outraged that insurance doesn’t pay for the air in my tires, or the dancing hula girl on my dashboard.”

Source: PassionForSubro » Health Insurance is NOT Health Care

A Path Towards a Viable Interstate Health Insurance Market | Robert Nelson, MD | Pulse | LinkedIn

Alternatives to our current over-priced and dysfunctional health insurance market are often biased, and thus limited, by our current operational and regulatory structure. These structures are so entrenched in our healthcare psyche that it makes it difficult sometimes to set these aside in our minds while entertaining how another approach might work.

If we view all alternative plans to replace the Affordable Care Act from the vantage point of “what is”, then there is little room for anything other than attempts at further regulating the problems away. If one presupposes that the current regulatory framework remains unchanged, indeed the same framework has served to suppress the very market we wish create, then of course that market will not be created.

The dilemma facing alternative healthcare plans being considered to replace the ACA is particularly evident when it comes to the issue of selling health insurance across state lines. A brief on this subject published by the American Academy of Actuaries in February of 2017 speaks to the the main challenges facing the advent of a viable interstate market for the sale of health insurance.

Source: A Path Towards a Viable Interstate Health Insurance Market | Robert Nelson, MD | Pulse | LinkedIn

Great Moments in Healthcare Consolidation: The Hospital is Having a Sale! | Robert Nelson, MD | Pulse | LinkedIn

What does the price of gasoline and the price of a chest x-ray have in common? Not much really, except the price of both have gone up in the Atlanta area recently; but the former did so for expected reasons that are predicated on behavioral economics and the relationship of demand to price. The latter went up, well, because it could.

But the sticker shock that I’ve experience lately trying to find a price on a simple chest X-ray is not due to any shortages (either perceived or real) or any sudden increase in demand. Nor was it from a sudden increase in the cost of performing an X-ray or some phenomenal increase in quality that created a better image or less radiation exposure. Nope, none of the usual factors that go into predicting price behavior were at play.

Source: Great Moments in Healthcare Consolidation: The Hospital is Having a Sale! | Robert Nelson, MD | Pulse | LinkedIn

Have PPO Networks Perpetrated The Greatest Heist In American History?

One of the best pieces I’ve read that exposes the real cost drivers in healthcare. Many of us have been shouting from the rooftops that the “villains” we implicate are just symptoms of a more fundamental poison in that is embedded in our third-party billing system and the cartel-like system it has created. Thanks to Dave Chase for putting the pieces together so clearly. Given the realities exposed here, we can no longer implicate something that has been virtually wholly absent from the healthcare economy which could have prevented this generational theft: A free market. 

The Sovereign Patient

Dave Chase

Dave Chase – Forbes contributor

Mike Dendy: I hear the talking heads on business TV (like CNBC) talk about stagnation of incomes for the middle class. Wrong. The additional money is there every year, it’s just going into a pool to pay for healthcare instead of into the pockets of the employees in the form of salary increases.

Americans overpay for healthcare by at least 30% and likely 50% in aggregate. For all intents and purposes, every employer in America gives every covered member on their healthcare plan a blank check every year and says….consume all the healthcare you want, anywhere you want, anytime you want, and never be concerned with or ask the price because it’s all paid for. Deductibles and co-pays are irrelevant, especially to hospitals, because pricing is so high it becomes somewhat immaterial.

Trillions Have Been Redistributed from the American Workforce to the Healthcare Industry Creating An Economic Depression for the Middle Class The Washington Post and Vox have done excellent reporting that shows U.S. spends so much more than other countries for one simple reason — price. The good news is that some […]

Source: Have PPO Networks Perpetrated The Greatest Heist In American History?

The Perverse Economics of Obamacare: Earn Less, Get More | International Liberty

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Dan Mitchell

The left-leaning San Francisco Chronicle has a financial advice column that inadvertently show how Obamacare discourages people from earning income.

To put it in even simpler terms, this couple has figured out that they can get almost $14,000 of other people’s money by reducing how much they earn by just $2,000.

That, in a nutshell, is the perfect illustration of the welfare state. It tells people that they can get more by producing less. And the system is based on the theory that there will always be some suckers who work hard to provide the subsidies.

Obamacare was put together by people who don’t understand economics. This is probably the understatement of the year since I could be referring to many features of the bad law. The higher tax…

Source: The Perverse Economics of Obamacare: Earn Less, Get More | International Liberty

Free The Patient – Forbes

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John C. Goodman

Who is likely to negotiate the lowest fee with a doctor, hospital or some other health care provider? The federal government? A large employer? An insurance company? Or, a patient spending her own money? Strange as it may seem, the answer is often the patient. One of the most persistent myths on […]

Canadians coming to the United States (and paying a cash price upfront) were paying almost half as much as US employers were paying and even less than the typical payment by Medicare. Think about that. These patients not only lacked a big bureaucracy to bargain on their behalf; they were foreigners.

The other factor is third party payment. After the deductibles and copayments are exhausted (which is almost immediately in the case of a knee replacement) the only payer is the third party. The incentive of the hospital is not to lower charges, but to raise them. In fact hospitals typically try to maximize against third-party payment formulas and they have sophisticated computer programs to help them do it.

An individual patient, paying with his own money and willing to travel to another city for care, is a different kind of buyer. If the hospital wants his patronage, it has strong incentives to compete on price.

This very large insurance company, representing tens of thousands of people and their very large employer (the state of California), achieved a remarkable reduction in costs by doing nothing more than sending patients into the hospital marketplace with the knowledge that the money they had to spend totaled no more than $30,000.

http://edge.quantserve.com/quant.js

Source: Free The Patient – Forbes

Irrational Healthcare Payment System Drives Costs And Why Payers Go Along With It | Robert Nelson, MD | LinkedIn


Our third-party payer system, by the nature of how coding & billing is contractually mandated, promotes increased health spending on aggregate – and the economic design of the system includes a perverse incentive to keep the spending going. 

real-health-care-expenditures-and-third-party-largerThis occurs in large part due to price insensitivity on the consumer-patient side due to the low marginal cost of entry compared to the inflated CPT billed charges which serve as a pivot point for network discounts. i.e. ~ once a co-pay is paid, patients don’t have any incentive to know or care what is done or how much it costs. 

 

These perverse motivations are what keeps premiums going up and up… Without utilization (claims), there is no other way to grow the pie because payers are not free to make a higher profit margin beyond the mandated cap, even if they do things to lower aggregate utilization which might lower premiums for everyone.  In other words, payers are not rewarded for efficiency, they reap financial reward to the extent that utilization, thus costs, continue to rise. 

Source: Irrational Healthcare Payment System Drives Costs And Why Payers Go Along With It | Robert Nelson, MD | LinkedIn

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