Idea #10 for February 28th, 2009: The Rate Debate or I Have to Wait How Long For My Bill?

Imagine for a moment going to a restaurant that charges a small cover charge, perhaps $5 or $10, where the menu does not list prices but cryptically says that your dinner will probably not cost less than $50. Now imagine you order, complete your meal and upon inquiring for the bill, the waiter politely informs you that he doesn’t know how much your meal will cost and will get back to you in 1-12 weeks. Sounds ridiculous, doesn’t it? And yet that is exactly the system we have devised for taking care of our health care bills. Nobody can tell you with any certainty how much something will cost before or immediately after it is done. The opaqueness of these transactions dramatically inflates the cost of everything, severely limits patient choice among competing practices and adds tremendous difficulty in really understanding medical costs.

How do we solve it? Well that does get a little complicated — because of insurance policy and health IT — but by no means impossible. Two future posts will discuss tiered billing and retail medicine that would go a long way to solving the problem, but in this post I suggest regulation. No practice should be able to perform a service without providing a written estimate as to exactly what it will cost, or a clear time-based hourly rate. This is the standard we hold all other professional services to, and a very reasonable one at that.

Already I can hear providers saying this is impossible because they don’t know how much they will get from the insurance companies ahead of time; that is true. To solve that will probably take another post, but to put it briefly, the specific rate table on a code-by-code and diagnosis-by-diagnosis basis (CPT and ICD codes for the technical folks) between you, your doctor and your insurance need to be made readily available in a public and electronically-understood format (like Excel, etc). That way, different combinations can be compared and you’d know exactly what to expect. Insurance companies are loath to provide this information; they hold it as a closely vested trade secret. But just as we would ridicule a restaurant or mechanic who tried the same tactic, we need to ridicule these parties as well. The time has come for transparency, and only strong regulation will make it happen.

For a similar take on the issue, see: http://www.pbs.org/nbr/site/onair/transcripts/090801c/

Idea #9 for February 27th, 2009: Dear Mr. Senator, Why Don’t You Try Living on $10,831 in DC and Let’s See What You Call It Then or Fixing the FPL

“There are three kinds of lies: lies, damned lies, and statistics.” The unemployment rate widely cited in media reports is called the U3 rate, and in January 2009 it stood at 7.6%. The U6 unemployment rate, which accounts for part-time employees who wish to work full-time, as well as people willing to work but not actively looking, was at 13.9% for the same date. Cherry-picking just the U3 data paints a rosier picture of our economic status than what’s indicated by the media friendly U6 rate.  Statistical data can be deceiving, and basing policy on misleading statistics is a bad idea. This is precisely what is happening with the federal poverty level (FPL), which determines the cutoff point for a lot of public assistance programs.

First, let’s work with a dictionary definition of poverty, which is “the state or condition of having little or no money, goods, or means of support; condition of being poor; indigence.” Now consider that the 2009 FPL for the contiguous 48 states is $10,830 for a single person. That means making $10,850 a year in Washington DC is officially living above the poverty level. If they had to live on under $11,000 a year, I doubt any of our elected officials in Washington would consider themselves anything other than indigent.

The Community Health Center (CHC) system is scaled and funded largely for projects aimed at people at or below the FPL, or what they call 100% FPL projects. In reality, because the current FPL is unrealistically low, the practical aspects of these practices mean treating people up to 200% of FPL. From a CHC standpoint, the poverty line is effectively twice as high as what the Department of Health and Human Services says it is. These artificially low numbers cause a negative spiral of events; people “above” the FPL can’t get many services so they depend on emergency services, which end up costing us all more than if we had just given them the services in the first place and finally escalating until they are finally down below the 100% rate.

The reality is, it is impossible for anyone making up to 160% of FPL to obtain insurance. There are no jobs that pay $15,600 per year that include full health benefits because of the minimum wage laws; at that rate  jobs are facto part-time. Insurance as a percentage of that wage would be a minimum of 12-15% of pay. Let’s just call a spade a spade and make the FPL twice its current value. We also have to be much more careful about adjustments to minimum wage, ensuring they correspond with adjustments to FPL.

See the governments detail on the FPL: http://aspe.hhs.gov/POVERTY/09poverty.shtml

Idea #8 For February 26th, 2009: Hello, 911 This Is The Border Patrol or Making Border Patrol Pay Their Share

This post touches on some immigration issues that I don’t think are an appropriate forum for this blog and I am not making any comment on immigration and illegal immigration here. My point put simply is that un-reimbursed costs relating to the complex situation on the border are putting border hospitals out of business. This would be kind of funny if it weren’t true…

The US Border Patrol in many cases lets caught persons go free so as not to be on the hook for their healthcare, this is bad policy all around. If the Border Patrol (a federal agency) brings an injured person under their custody to a hospital, the federal government is on the hook for the cost of care. If, on the other hand, Border Patrol calls 911 or “patient dumps” them instead, the hospital and local government have to incur the costs, as long as the person was is not in custody. Unfortunately for border-state hospitals, the latter scenario is often the case and its costs are crippling. The Border Patrol has budget realities just like everyone else but this seems a clear case that takes advantage of local resources to avoid paying for a problem that is literally their mission statement. While there has been reduced “patient dumping” as of late, it still goes on and with budget tightening on the horizon it isn’t a big leap to say that it will soon be more prevalent again.

Here’s a real-life example that illustrates some more absurdity of the border situation:  many people with HIV illegally come into the US for healthcare because most of the time they have absolutely no alternative. They receive it in many cases at no cost. Because of the strict drug regimens, they need to be consistently on the drugs, otherwise very expensive steps are needed to reinstate the protocol. So when a person in this situation is caught, we spend about $5,000 to deport them and then when they re-enter we need to spend another $12,000 to restore their drug protocol. So by not deporting them we would save $17,000, which is more than a year of their free care if we had just kept them on the drug consistently to begin with. Clearly, this is not a good system.

Examples like these are leaving border hospitals in financial ruin, forcing many of them to close their doors for good. A provision in the Medicare prescription drug bill of 2003 included $1 billion for reimbursing hospitals for unpaid illegal immigrant bills. Not surprisingly, hospitals have not received much of the federal funds they were promised. Without getting into the larger debate on immigration, steps need to be taken to alleviate some of the financial burden hospitals are experiencing under the system. For one, the loophole that allows Border Patrol to call 911 and absolve themselves of any financial responsibility must be closed. If the Border Patrol had to use their agency’s funds to pay for immigrant healthcare, they will have more incentive to do their job well. Federal money should be dispensed more freely and effectively in the event a hospital is left footing the bill. There’s no reason private hospitals should have to pay for the federal government’s inability to secure our border.

See this in the media: http://www.studentnewsdaily.com/news-issue/counting_the_costs/ , http://www.thefreelibrary.com/NEW+BORDER+THREAT+-+%60PATIENT+DUMPING%27.-a083966589 , http://www.tucsonweekly.com/gbase/Currents/Content?oid=oid:69346

Idea #7 for February 25th, 2009: Can I Get Your Digits? or Improving NPI Compliance

As of May 23, 2007, all providers are required to use NPIs (National Provider Identifiers) for HIPAA standard transactions. When it comes to government we know that “required” really means about 70% actually have them. These 10-digit numbers are assigned by CMS and are used for transactions with private payers as well as Medicare. In past years, there was no single standard that payers used for identifying providers. Rather, providers had to use different identifier codes for every payer they dealt with, which could easily climb into the hundreds (not to mention other ID codes they had to keep track of). All this confusion led to denied claims and lost time. The NPI is a great idea that solves numerous problems and can greatly simplify many interactions with providers if only we can get one to all of them.

Obtaining an NPI is supposed to be a straightforward process that can be completed online. Afterward, providers can share their NPI with payers, clearing houses, associated providers, and any other party with whom they do business. The problem is, registering NPIs is not that simple. The NPPES website has the classic made-by-government stamp of an invalid certificate, bad usability, acronym soup, vague instructions, downtime, and unrealistic demands. Further, some providers in atypical care or rural venues aren’t even aware of the details of the process and aren’t clear if they should get them.

NPI compliance is not strictly enforced, but if it was, a lot of costs could be reduced and headaches avoided. Some providers are still using “legacy” identifiers left over from previous years in addition to NPIs. For one thing, state boards should make NPI adoption a requirement for licensing and make sure providers and payers are not using legacy identifiers. Ideally, DEA and state licensing numbers should be phased out in favor of NPIs. To simplify the process even more, payers (who all have their own identifying numbers) should have the same numbers across different states, when possible. Finally, providers need to be better educated on NPIs and how to obtain them. Maybe then the fully tangible benefits of the system can come to fruition the way things were intended when it was first drawn up years ago.

Also see: http://www.rehabpub.com/issues/articles/2007-08_09.asp , http://www.cms.hhs.gov/NationalProvIdentStand/01_Overview.asp#TopOfPage
and http://www.highbeam.com/doc/1G1-164103036.html

Idea #6 for February 24th, 2009: Exercise is Good For Our Wallets or Health Care Cost Cutting

High blood pressure (hypertension) is one of those exponential things: once diagnosed, it is a well into which we pour our health care spending. More troubling still is that in a variety of ways, hypertension has treatments that don’t always have a strong correlation between cost and results. In 2002, the last numbers I had handy, roughly 21% of Americans or 45 million people had been diagnosed with problematic BP. We spend at least $7 billion each year (maybe as high as $15 billion) on medications to control blood pressure, with an average around $350 per patient per year. This does not include the $170 billion economic burden we bear each year as a result of the associated MIs (myocardial infarctions, i.e. heart attacks) and strokes that may have been avoided with better control. Blood pressure medication spending has also been among the leaders in annual cost increases for the last decade, so expect the numbers above to climb. Numerous studies also show that the older diuretic based treatments, which are substantially less expensive than newer therapies, are equally (if not more) effective at treating high BP. I will save the when-older-drugs-are-better-and-cheaper-why-aren’t-doctors-using-them post for a later date.

One thing about hypertension, though, is that it can be readily and well controlled with one simple thing: exercise. There are countless studies that show exercise in combination with drug therapy (or on its own) along with a better diet are excellent ways to control high BP and substantially reduce the risks and costs associated with treating all those MIs and strokes. We need to start thinking out of the box. Using the numbers above, it would actually be cheaper as a nation to pay everyone with high blood pressure $1000 to exercise and control it, or $500 to exercise and cover drug expenses each year, than what the current system is costing Americans. Hypertension is just one example; take a look at cholesterol, diabetes and more and we might just find that we can all stop working and get full time jobs exercising.

Here is some further reading on the subject: http://www.mayoclinic.com/health/high-blood-pressure/HI00024 ; http://www.ajmc.com/Article.cfm?ID=3046 ; http://www.medscape.com/viewarticle/550448_2, and http://jama.ama-assn.org/cgi/reprint/291/15/1850.pdf

Idea #5 for February 23rd, 2009: Don’t Mouses Have Tails? or Ushering All Physicians Into The Digital Age

We have now seen that massive federal incentives for EMR adoption in the coming years will compel many more physicians into choosing EMR systems and other supporting technologies. Effective EMR utilization requires skills including computer basics that many physicians lack, but also a more comprehensive understanding of the links between technology and how it can streamline care. Technology enables total patient population thinking and actions that aren’t possible without it and consequently not within the domain experience of many providers. It’s essential that providers have sufficient computer skills for this transition to go smoothly and all available evidence suggests that many do not or they would have adopted EHRs in much larger numbers to begin with.

In equal parts with the need for much better computer skills training for physicians are the substantive issues regarding equipment. Though truly independent studies are limited, what little information is available suggests that successful EHR implementations require very large numbers of workstations and accessory items like barcode scanners, mobility solutions, wireless and the like, which are also missing in the majority of practices. Nothing in the massive federal incentives touches on these issues and we can only hope that the final rule-making will create some proper frameworks to address these issues.

Exacerbating the training issues is the fact that while the majority of states’ boards of licensing require a certain number of hours of CME (continuing medical education) per year, some states still do not (the very poor strategies for CME will be the topic of another post). Physicians desperately need access to CME that includes basic computer training and highly specialized training on the crossover between technology and care. The federal incentives MUST take these problems into account or it will simply repeat the rabbit hole spending of the past thirty years with similar effects (or lack thereof). In the 21st century, physicians need to realize the need for technology and be just as comfortable using a computer as their stethoscope and scalpal.

Idea #4 for February 22nd, 2009: Acronym Soup du Jour or Code Confusion

Most doctors in most settings these days are stuck picking procedure and diagnosis codes from a single sheet printed superbill with no more than 100 options. In all likelihood, it is at least three or more years behind the current code set release. Providers already have their hands full keeping track of code sets including CPT, ICD, NDC, HCPCS, etc. In four years, federal law will take effect requiring transfer from ICD-9 to ICD-10, which will expand the total pool of diagnosis codes from around 17,000 to 155,000. We will save you the nosedive into the other additions to the acronym soup of RXNORM, SNOMED, LOINC, crosswalks, crosstabs, and more.

Somewhere after the printed superbill is completed, a billing service or the practice’s own billers are then revising those selections before they go out to payers. In our experience, this revision is rarely for the purposes of medical clarity. Rather, it is an arms race to optimize revenue (within the bounds of the rules and law) against the ever-dwindling reimbursements for common codes. Inexplicably to me, there seems to be an inverse relationship between how frequently codes are used and their reimbursement. The absolute worst example of this is with the standard visit codes, I can’t think of a provider that isn’t losing money on their 992XX procedures. There is some evidence that shows payers are gaming reimbursements using clumsy statistical analysis of frequency and across-the-board percentage reductions. This is where the actuarial world of insurance, the bottom line for payer stockholders, and the day-to-day operations of medical sites meet head on. What value is the improvement to a much better conceived code set like ICD-10 if all it does is add complexity to the arms race to optimize payments? That arms race will just cause the bettors to keep asking for more and more complex “documentation” of what happened. Billers, meanwhile, will just keep coming up with more and more creative “documentation” to code the same activities that ICD-9 could cover reasonably well if it was used properly to begin with. The real benefits for ICD-10 are supposed to be an improvement on visibility of disease, improved decision support, and additional fairness in how claims are paid, not just a new weapon.

No doubt medical code sets are essential tools in practices, but without tremendously expanded training and education — much more than can be done in just the next few years — and a comprehensive existing base of already digitized practices sites, I fear these new codes sets will just foster a faster race to the bottom.  Don’t forget that AHIP estimates it could cost $3 to $8 billion to implement the changes, another sacrifice at the altar of health IT (I’m still waiting for our miracle). History and common sense tells us this transition will not go smoothly. The power of SNOMED and ICD-10 can only be fully realized if providers are sufficiently adept at utilizing them, and we know without any doubt that a large percentage of physicians are not adept at using ICD-9. Physicians need clear explanations of the various code sets and unbiased best practices on how to use them, but where is the time and money for that?

See some media sources on this: http://www.bloomberg.com/apps/news?pid=20601103&sid=aBpdGTphsSqg&refer=us and http://www.ama-assn.org/amednews/2009/02/09/edsa0209.htm

Idea #3 for February 21st, 2009: Resolving Perverse Incentives or Insurance Claim Denial Fees

Insurance companies are denying too many claims. What a minute you say, that’s not news, keep reading. Of course, it is in their financial interest to pay as few claims as possible and I have no objection when an insurance company legitimately rejects a claim because the care is not included in the insured’s plan. We can save the debate about what is and is not covered and the broken appeals process for another post because the majority of first submission denials are not for legitimate reasons but illegitimate procedural hurdles to discourage claims entirely.

When I mean illegitimate procedural hurdle I mean the denial of a claim because a street address number doesn’t match, or a middle name is provided when the policy has none, or any of a million other technicalities insurers try and use to weasel out of your first attempt. I struggle to understand why a payer has legitimate need for any more demographics than the group/policy information, name, and DOB. In fact, I’m pretty sure they don’t, except for the auto-denial process. Providers are left spending excessive time and money fighting for payment on claims that never should have been denied in the first place. It’s estimated that providers spend 14% of their revenue on the process of disputing rejected claims. Insurers have no real incentive to pay, so they can just keep rejecting claims and delaying payment for these minor clerical errors – or in some cases no reason at all. New York Medicaid may be the worst, they reject more than 50% of all first time claim submissions. In the case of a $1-$3 lab recovery fee claim, which many clinics serving under-insured/impoverished patient bases can claim, those procedural denials eat up most of their recovery fee revenue. With 20,000 of those claims at a “typical” FQHC a year, that is perhaps $30,000-$45,000 in lost revenue, or worse if the practice lacks the wherewithal to see all of those claims through (which is just what the insurers are counting on).

There is a simple, but no doubt controversial, way to solve this and readjust the currently perverse incentives of insurers. Simply impose a fee on payers for every denied claim. If insurers had to pay a small amount – say $10, $15 or even $25 dollars – every time they denied a claim, I am certain they wouldn’t hesitate in streamlining all those clerical problems. What about for legitimate denials? Paying $25 dollars is still a lot better than paying $100,000 for an experimental procedure you aren’t contractually obligated to cover. It would be an almost painless cost of doing business. Fraud guidelines already provide severe and criminal repercussions for any providers trying to abuse the fee against payers. Any money collected from the fees could go to any of the very large assortment of programs, policies and oversight in the health sector.

I can already hear all sorts of groups crying foul. In fairness, I think that calling this a “claim denial tax” would be pretty apropos, but providers need that 15% back desperately. Insurers don’t deserve it because all their patients have bad hand writing and that street address looked like 101 instead of 107.

See the AMA on some of these issues at: http://www.ama-assn.org/ama/no-index/news-events/20209.shtml and http://www.ama-assn.org/ama1/pub/upload/mm/368/htc_general_flier.pdf

Idea #2 for February 20th, 2009: There is No Restless Leg Free Lunch or Curbing Drug Samples

Pharmaceutical companies providing drug samples to doctors to distribute for free may seem like a good idea to those receiving the samples, but it has a number of negative consequences. Drug companies argue that free samples provide much-needed support to low-income patients who have no other recourse, and this sounds great and altruistic of them. Then there are the facts: studies clearly show that the majority of the samples end up in the hands of insured patients. Outside of GSK’s recent press (we’ll wait and see on that), when have drug companies ever had purely altruistic motives? Free advertising and establishing brand loyalty are two ways pharmaceutical companies are benefiting from these programs. And recipients of the samples probably won’t save money in the long run, as they are likely to eschew generics in favor of the pricier brand-name drugs they’ve become familiar with.

Clearly Big-Pharma wouldn’t be doing this if it didn’t have a measurable economic benefit. The shareholders wouldn’t stand by while free product flew out the door without ROI. Am I wrong, or does it seem eerily reminiscent of the same tactics used by street dealers selling FDA unapproved “medications”? (Start with a taste and you are sure to come back for more.) It is true that samples are rarely available for the most potent or controversial medications, but that also just further reinforces the idea of medicating “diseases” that for many patients may or may not have a real impact in their lives…restless leg syndrome anyone? I am pretty sure that most patients with hypertension, diabetes, asthma and/or obesity, which now represent more than 60% of all patients, have higher priority items in need of medicating than RLS.

Economics aside, this practice is downright dangerous. Physicians are giving out drug samples on their own, typically bypassing the expertise of pharmacists and the ePrescribing infrastructure we are now spending billions building. As a result, patients could be at risk if a provider fails to recognize possible interactions or allergies. Record keeping for samples is also unacceptably lax, oftentimes the samples are distributed without recording what went to whom or lot numbers, which could have disastrous results in the event of a recall. How many patients have received VIOXX samples without proper information? How many of those samples are still floating around?

Doctors should cease the practice of distributing free drug samples; a number of practices have already taken measures to do just that. If drug companies really want to help the poor and uninsured they can focus on expanding their existing PAP (patient assistance programs) specifically for that purpose, rather than pushing samples on unwitting patients and providers.

See some media on this issue: http://www.usatoday.com/news/health/2008-01-02-drug-samples_N.htm and http://www.nytimes.com/2007/05/01/health/01cons.html

Idea #1 for February 19, 2008: Houston, our PCP has a 19 month waiting list

We can all only hope within our heart of hearts, that as a nation, we will soon take some action to deliver care to the millions of uninsured that currently go-without. But — and it’s a big but — there seems to be an issue that no one wants to think about. Even if we could pay for their care, there aren’t nearly enough physicians to provide it. Here’s some simple math: 45 million more people in the health system, 10 years to “make” new doctors.

Massachusetts’s experiment in universal healthcare is providing us with a number of insights into weaknesses in the state’s healthcare system. The state’s shortage of primary care physicians (PCPs) is epic. The sudden influx of over a half-million newly insured citizens overwhelmed primary care providers in the state, leading many of the patients to depend unnecessarily on emergency rooms for routine care. Of course, this undermines the original intent of the state’s healthcare initiative, which was partly devised as a way to unclog ERs that were inundated with the uninsured.

The shortage of PCPs is due in part to economics. Specialists earn significantly higher salaries and work fewer hours, prompting more and more medical school students to pursue medical positions outside of primary care. A decreasing number of PCPs seems like an almost insurmountable problem if the United States is to implement a national healthcare system to suddenly include the currently 45 million uninsured. Fact is we need to approach this with a 10 or 15 year plan, starting yesterday. Incentives have to be put in place to steer more students towards primary care, options include tax breaks or subsidies if not outright “enlistment” bonuses for PCPs for 10 years of contracted service. Many more physicians will be needed in the U.S. if we are going to provide quality care to the currently uninsured.

See the WSJ’s take on this issue: http://online.wsj.com/article/SB118532549004277031.html