Health and Medical News and Resources

General interest items edited by Janice Flahiff

Study: 23 pct of US adults with health coverage underinsured

Study: 23 pct of US adults with health coverage underinsured.
From the May 2015 Commonwealth Fund study

Abstract

New estimates from the Commonwealth Fund Biennial Health Insurance Survey, 2014, indicate that 23 percent of 19-to-64-year-old adults who were insured all year—or 31 million people—had such high out-of-pocket costs or deductibles relative to their incomes that they were underinsured. These estimates are statistically unchanged from 2010 and 2012, but nearly double those found in 2003 when the measure was first introduced in the survey. The share of continuously insured adults with high deductibles has tripled, rising from 3 percent in 2003 to 11 percent in 2014. Half (51%) of underinsured adults reported problems with medical bills or debt and more than two of five (44%) reported not getting needed care because of cost. Among adults who were paying off medical bills, half of underinsured adults and 41 percent of privately insured adults with high deductibles had debt loads of $4,000 or more.


BACKGROUND

The Affordable Care Act has transformed the health insurance options available to Americans who lack health benefits through a job. Numerous surveys have indicated that the law’s coverage expansions and protections have reduced the number of uninsured adults by as many as 17 million people.1

But Congress intended the Affordable Care Act to do more than expand access to insurance; it intended for the new coverage to allow people to get needed health care at an affordable cost. Accordingly, for marketplace plans, the law includes requirements like an essential health benefit package, cost-sharing subsidies for lower-income families, and out-of-pocket cost limits.2 For people covered by Medicaid, there is little or no cost-sharing in most states.

But most Americans—more than 150 million people—get their health insurance through employers.3 Prior to the Affordable Care Act, employer coverage was generally far more comprehensive than individual market coverage.4 However, premium cost pressures over the past decade have led companies to share increasing amounts of their health costs with workers, particularly in the form of higher deductibles.5

In this issue brief, we use a measure of “underinsurance” from the Commonwealth Fund’s Biennial Health Insurance Survey to examine trends from 2003 to 2014, focusing on how well health insurance protects people from medical costs. Adults in the survey are defined as underinsured if they had health insurance continuously for the proceeding 12 months but still had out-of-pocket costs or deductibles that were high relative to their incomes (see Box #1). The survey was fielded between July and December 2014. This means that we could not separately assess the effects of the Affordable Care Act on underinsurance because people who were insured all year in the survey had insurance that began before the law’s major coverage expansions and reforms went into effect. People who had new marketplace or Medicaid coverage under the Affordable Care Act would not have had that coverage for a full 12 months, as it would have begun in January 2014 at the earliest. Similarly, people with individual market coverage who were insured all year would have spent all or part of the period in plans that did not yet reflect the consumer protections in the law.6

Advertisements

May 28, 2015 Posted by | health care | , , , , , | Leave a comment

Dump the Business Model | The Health Care Blog

Dump the Business Model | The Health Care Blog.

From the 22 January 2015 post

There are no winners in the fee-for-service game.

It’s time to toss the whole business-as-usual model — for your own good and the good of your customers.

The emerging Default Model of health care — the “consumer-directed” insured fee-for-service model in which health plans compete to lower premiums by bargaining providers into narrow networks — not only does not work for health care’s customers, it cannot work. This is not because we are doing it wrong or being sloppy. By its very nature the Default Model must continually fail to bring our customers what they want and desperately need. Ultimately it cannot bring you, the providers, what you want and need.

Take a dive with me into the real-world game-theory mechanics of the health care economy, and you will see why. It’s time to rebuild the fundamental business models of health care.

The Default Model Health Care Game

It’s a little easier to find our way around an economic model by picturing it as a game and asking: “What defines winning for each player? What does each player need to do to win?”

Health plans: For health plans, winning means surviving, succeeding and growing as a business. But there are a couple of rule changes now. Health plans used to be able to stay more profitable by pushing down their medical loss ratio (MLR — the percentage of premiums actually paid out for medical care), by “rescinding” the plans of people who cost too much, and by refusing to cover anyone with pre-existing conditions.

Now they have to take everybody, can’t toss them out, and their MLR has to be at least 80 percent (or 85 percent for large customers). So their administrative expenses, advertising, executive salaries (and the profits and stock price of the for-profits) are all tied to a percentage of the actual costs of health care. Hmmm. If they were confronted with a way to make health care cost half as much, would they be interested? Would they make it a top priority? No. They have no incentive to actually drop the real costs of health care.

….

While I agree with the author of the above article, the selected related articles do include other viewpoints.

January 26, 2015 Posted by | health care | , , , , | Leave a comment

From the 13 January 2015 post at Mike the Mad Biologist

Last week, the NY Times ran story about how the Harvard University healthcare plan is raising various employee costs in an effort to lower costs–this is partly a response to various Obamacare/ACA policies (boldface mine):

The university is adopting standard features of most employer-sponsored health plans: Employees will now pay deductibles and a share of the costs, known as coinsurance, for hospitalization, surgery and certain advanced diagnostic tests. The plan has an annual deductible of $250 per individual and $750 for a family. For a doctor’s office visit, the charge is $20. For most other services, patients will pay 10 percent of the cost until they reach the out-of-pocket limit of $1,500 for an individual and $4,500 for a family.

Previously, Harvard employees paid a portion of insurance premiums and had low out-of-pocket costs when they received care.

……

Why? If you’re sick and able to pay, you will get the treatment in most cases. It’s worth the money–being able to afford medical treatment is one reason people like having money. Most people just aren’t that cheap when it comes to their health. But if you’re unable to pay, you won’t get treatment–even if you need it. The latter will lower healthcare costs–less fortunate people won’t get treatment–but so would shooting sick people in the head. And if you don’t believe me, those radicals at the Boston Federal Reserve seem to think so as well.

January 20, 2015 Posted by | health care | , , , | Leave a comment

[News article]NerdWallet Health Study: Medical Debt Crisis Worsening Despite Policy Advances – Health

NerdWallet Health Study: Medical Debt Crisis Worsening Despite Policy Advances – Health.

From the 8 October 2014 article

Despite recent advances in health care policy, American households continue to struggle with medical debt, and it’s only getting worse. Americans are putting more of their take-home pay toward medical costs than ever before.

  • NerdWallet Health has found that Americans pay three times more in third-party collections of medical debt each year than they pay for bank and credit card debt combined. In 2014, roughly one in five American adults will be contacted by a debt collection agency about medical bills, but they may be overpaying – NerdWallet found rampant hospital billing errors resulting in overcharges of up to 26%.
  • NerdWallet found 63% of American adults indicate they have received medical bills that cost more than they expected. At the same time, 73% of consumers agree they could make better health decisions if they knew the cost of medical care before receiving it.
  • Between 2010 and 2013, American households lost $2,300 in median income, but their health care expenses increased by $1,814.[1] Out-of-pocket spending is expected to accelerate to a 5.5% annual growth rate by 2023 – double the growth of real GDP.

In a follow-up to last year’s study that found medical debt is the largest cause of personal bankruptcy, NerdWallet Health investigated the mounting financial obstacles facing the American patient.

Download a printer-friendly version of the study here.

October 17, 2014 Posted by | health care | , , , , , | Leave a comment

[Repost] Policy: Doctors Urged to Talk About Costs of Treatment & A Related Personal Story

Flashback— About 20 years ago I was in an urgent care center around 11 pm with a severe migraine.  The doctor was getting ready to give me a shot with appropriate medication.  At the time I was unemployed with little money. So I asked him if I could get a prescription for capsules/tablets instead, and how much the shot would be. He looked a bit startled, but looked up the information for me.  I opted for the capsules/ tablets. My mother, bless her, drove me to a nearby hospital so I could get the prescription filled. Was very grateful the medication kicked in within 10 minutes or so. Will never forget the compassionate professionalism of that physician.

Flashback II – About 25 years ago I had rather painful wrists (not carpal tunnel) and went to a doctor.  (From a temp job, basically keyboarding for hours at end.) Again, I was uninsured with little money.. Went to the doctor with a book from the library with exercises to relieve pain in the wrists.  Asked the doctor what he thought about them.  Told him I was uninsured and didn’t have much money. The doctor didn’t say much. Just directed me down the hall to a physical (occupational?) therapist.  The therapist gave me several pages of exercises and went over them with me.  I asked her what the additional charge for her services was. She said nothing.  Again, the doctor showed compassionate professionalism. Such a “business” where the staff communicated well and worked with each other for the customer’s benefit!  Oh, and the exercises worked, and I keyboarded with better ergonomics as outlined in the handouts given.

From the 18 October 2013 article at Concierge Medicine Today

by David Pittman, Washington Correspondent, MedPage Today

Oct 16, 2013 – Physicians need to broach discussions about out-of-pocket costs with patients the same way they discuss a treatment’s side effects, public policy professors wrote.

“Admittedly, out-of-pocket costs are difficult to predict, but so are many medical outcomes that are nevertheless included in clinical discussions,” Peter Ubel, MD, of Duke University’s School of Public Policy, and colleagues wrote.

They noted in a New England Journal of Medicine perspective published Wednesday that patients can experience considerable financial strain from out-of-pocket costs, with little or no discussion beforehand about potentially avoidable health-related bills.

“Because treatments can be ‘financially toxic,’ imposing out-of-pocket costs that may impair patients’ well-being, we contend that physicians need to disclose the financial consequences of treatment alternatives just as they inform patients about treatments’ side effects,” the authors wrote.

They gave the example of a colon cancer patient who receives bevacizumab (Avastin), which can help prolong life by 5 months over chemotherapy alone.

Many providers don’t mention that the drug can cost $44,000 for 10 months of therapy, Ubel and others wrote. A Medicare patient responsible for 20% of the cost can expect $8,800 in out-of-pocket costs on top of other treatment costs, doctor’s fees, and diagnostic tests. The out-of-pocket costs can be even higher for patients with high-deductible insurance plans.

“Most physicians insist on discussing the 2% risk of adverse cardiovascular effects associated with bevacizumab, but few would mention the drug’s potential financial toxicity,” the authors noted.

More than one in five patients covered only by Medicare (20.9%) reported some kind of financial burden, according to the National Center for Health Statistics data the authors cited. Even 30.4% of privately insured patients under age 65 reported some financial burden from medical care.

The authors suggested that taking the time to discuss what can be an uncomfortable topic may:

  • Enable patients to choose lower-cost treatments when available
  • Help patients who are willing to trade medical benefit for financial distress
  • Enable patients to seek financial assistance earlier and avoid duress

In addition, evidence suggests that considering costs as part of clinical decision-making might reduce long-term costs to society, the authors noted. For example, some physicians feel it’s their responsibility to provide the best care regardless of costs, and patients worry that inquiring about prices will pit them against doctor’s orders and open them to subpar treatment.

Physicians lack training in this area, and may feel uncomfortable or may not know what a patient’s costs will be since it depends on what health insurance plan they have. “It is often difficult to determine a patient’s out-of-pocket costs for any given intervention,” Ubel and colleagues wrote.

But insurance companies are developing ways to better estimate patients’ costs, the perspective stated. Furthermore, policymakers need to push for greater price transparency, especially when it comes to prices borne by patients.

“We can no longer afford to divorce costs from our discussion of patients’ treatment alternatives,” they wrote.

October 19, 2013 Posted by | health care | , , , , | Leave a comment

   

%d bloggers like this: