A tip of the topper to two reporters who took a good look at high-deductible health plans—the kind that can leave patients digging into their bank accounts to pay their medical bills while discouraging them from seeking care. Rachel Zimmerman at WBUR in Boston told the tale of a forty-year old man’s encounter with a high-deductible policy, and Mike Dennison, the state house reporter for Lee Newspapers, revealed Montana legislation aimed at making consumers pay more for their care.
Zimmerman found a young man named Matt S. who works in the health care industry and took a family policy with a $2,800 deductible, which applies to almost all treatments and procedures except for primary care and prevention. He was healthy—a marathon runner and a “minimalist” when it comes to taking medicines. He was also trying to be a good consumer—the kind marketplace devotees want to investigate the price of procedures, shop around for the cheapest ones, and make the decisions based on price and evidence.
To do that, Matt relied on a cost calculator supplied by his insurance carrier—unnamed in the WBUR report. Matt apparently has borderline hypertension, and his doctor, a physician in a practice owned by Brigham & Women’s Hospital, thought he needed a stress test to determine the severity of his condition. He turned to the calculator, which told him that a stress test would cost between $28 and $151. Doable, right? “I knew it was low,” Matt said. “You can’t even walk through the doors of the Brigham for $28.”
Turns out he also needed two echocardiograms, one before and one after the test. When it was all over, Matt had a bill for about $4000, including charges for the hospital and the cardiology group, and a diagnosis that meant he had to take medication. “The problem is, you don’t know that there are other components related to a cardiac stress test until you show up and have it done,” he told Zimmerman. “There’s really no easy way for consumers to find out all the pieces that might be included, either from the primary care doctor, the hospital, or the plan.” Bingo! Making consumers vote with their feet in the marketplace is easier said than done, Matt found.
He checked the calculator again for the price of echocardiograms—ultrasound studies of the heart—and found a price range of $147 to $290. He started to squawk, making calls to his human resource director, who called the insurance company representative who sold his employer the health plan. Matt was able to negotiate a lower bill, and eventually got the powers that be to lower his tab to $300. But the final bill was $0. Matt has soured on high-deductible plans. “I’ve had to fight or inquire about every claim. If I had to do it again, I would go back to the high premium plan and get rid of the high deductible.” A spokesman for the unnamed insurer admitted the cost calculator “is not s precise as we’d like.” A new one is coming in the fall—a good item for the tickler file.
Out in Montana, Mike Dennison tells us about the efforts of state Republicans to push plans that encourage Montanans to buy high-deductible insurance. Through a package of tax credits and deductions, state legislators want to entice individuals and businesses to buy these plans. Dennison’s story in the Billings Gazette is a state politics story on a topic not often tackled by statehouse reporters. It gives his readers a window on what state legislators are trying to do. What makes Dennison’s story so interesting is all those quotes he captured from proponents of these plans.
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Just look what happened here...
Matt S., the man in question not only got the health care he needed... But also (in the FREE MARKET) negotiated his out-of-pocket costs down to nothing!...
This is a perfect example of the system working as it should...
This particular individual, after crunching the numbers, has decided that given his medical needs and his apparent distaste for talking to insurance companies on the telephone, he'd rather take the low-deductible plan his employer offers. This is the FREE MARKET at work!
These high-deductible plans are great for families. I have one and it works beautifully in conjunction with a medical savings account. But it will be snowy day in Hell before you see Trudy cover anyone who is happy with his or her high-deductible plan.
Lieberman isn't a journalist - she's an advocate for smothering health care. She makes no bones about identifying mandated coverage as one of the "best" parts of Obamacare. Free market choice and personal responsibility run counter to her agenda.
Contrary to Trudy's claim - this WBUR story is crappy journalism.
We don't know anything about the options Matt had from his employer. No information given about the premiums he paid, or the employer's share. No information at all about his low-deductible options. No way for the reader to apply any of this information in a general way to crunch the numbers. No counterpoint. Nothing from the insurance company. Just a single point of view from what appears to be an unreasonably disgruntled consumer.
All we have is a cherry-picked anecdote about a particular individual who had a single experience with an unnamed insurance company. The big gripe is that the (implicitly) evil insurance company took too long to pay 100% of the bill?
And somehow this makes the case against the company and high-deductible plans?
#1 Posted by padikiller, CJR on Wed 6 Apr 2011 at 08:00 AM
padikiller,
I don't think you get it.
Imagine the scenario described in this story if we were talking about a gas station.
You pull up and say, how much for a fill up?
They say "Between 6 and 30 bucks. Just leave it here."
You agree and when you come back they give you a bill for $800.
When you demand an explanation, they say, "oh, when we fill up the tank, we typically replace your filters and replace any worn parts."
You come back with a list of rates from other stations for fillups (the ones that would give you rates, that is) and the station agrees to knock the bill back down to 6 bucks.
This is a good market? The burden of effort is on the consumer to argue over the bill (with little or no information about what other providers charge) and the penalty to the provider for overcharging is merely to lower their price for anyone who complains enough.
Sounds like a license to mark prices up to me. Every consumer has to pin a provider to the ground to get an honest price?
Rather like anyone caught picking pockets must give the items back if caught.
Weak.
#2 Posted by murph, CJR on Wed 6 Apr 2011 at 02:11 PM
Murph,
Think about cause and effect here. Then ask yourself, "Why did the medical organizations with which our disgruntled friend Matt was doing business attempt to slap on the massive fees for all of the extra procedures, and not inform Matt?"
The answer is, because that is how they are accustomed to doing business. They are accustomed to not having to inform patients about the cost of ANYTHING. Why? Because our convoluted health insurance system, which is actually not insurance, but a maintenance plan (and no, contrary to Trudy's understanding, a fender bender is NOT routine maintenance. Perhaps Trudy doesn't own a car?)
Now, extrapolate with me here. Think of what would happen if, say, 50 percent of their customers suddenly operated as Matt did. They questioned the bill, got cost comparisons, and negotiated. Suddenly, the cost of attempting to "pick the pocket" of consumers would go much higher, as the hospitals and doctors must employ people to do the negotiating, and, in the end, watch as their expected fees dwindle away to nothing. Once they begin losing money, their business practices will change.
That's why the Montana approach might actually work at actually LOWERING health costs. I know, you probably believe the answer is more government involvement and perhaps even single payer. But if you believe that will lower costs, I have a stack of government invoices that say you don't know what you're talking about.
#3 Posted by JB, CJR on Wed 6 Apr 2011 at 03:28 PM
JB,
I don't disagree that informed consumers can have an effect on prices - but I have less belief in how effective a consumer can be at lowering prices on an opaque, essential service like health care. 50% of people will start acting like Mark? I doubt it.
In the situation decribed in the article, what would have happened if the hospital had stuck to their guns? What remedies does Matt have? Refuse payment and go to collections? Sue? Plenty of people won't be able or willing to do that - and only the most egregious overcharges will seem worth the expense and hassle of a lawsuit.
Plus- consumers will always be at a massive disadvantage about choosing health care by cost. If there's one hospital in your town - that's where you go. Doesn't matter if they charge more for your MRI than any other hosptial in the state. With emergency procedures - there is no shopping. That's over and above the difficulty in comparing procedures. Hospital A charges more for an MRI, but their MRI is an "open MRI" - so (they say) it costs more - or it's imaging system is newer so (they say) it costs more. Where will a consumer go to find out if they are getting a good deal or not.
Business are adept at cycling through project model numbers so product ratings don't match product offerings. Is there any reason to expect the health care industry will be any less skilled at changing terminology to make apples to apples comparisons impossible for the end consumer?
I mean, we're talking about a world where consumers are charged the same amount for a 20oz bottle of tapwater as they do a 20oz bottle of soft drink. Shouldn't informed consumers put pressure on bottlers to lower prices? I mean, there are freaking TV shows telling people what a collossal rip off the product is - yet the prices stay the same (in a $4 billion a year market) and no large bottler emerges to undercut the competition.
And it's relatively easy to compare the price of water of similar defined quality - try doing that with a custom surgical procedure that you've never heard of until your doctor told you that you needed it. I wouldn't put too much faith in providers offering up to date price lists so people lucky enough to live near several hospitals can shop around. I suppose you could pass a law requiring them to do that, but we all know that government involvement will raise costs on everyone.
Then there's insurance limiting your choices..."The MRI is cheaper at this hospital, but they're out of my network..."
And people need to stop pretending that the options are free market or single payer. Yes, government programs can raise costs (read: defense procurement) but then there's Canada using government power to drive drug prices down.
(We'll ignore the "free-market" drug companies lobbying to bar re-importation of cheaper drugs from Canada - ye gods).
I'm all for empowering the consumer, but this notion that the average consumer is in any position to force change on their health care provider (or the expectation that its on them to do it without laws giving them leverage) seems at odds with the well established history of corporate behavior.
#4 Posted by murph, CJR on Thu 7 Apr 2011 at 02:48 PM
murph...
This is a non-story..
The guy got the medical treatment he needed and paid nothing out of pocket for it. This is the system working.
The "scandal" here is at most a minor customer service issue that was resolved favorably for the consumer.
Do you really think that putting the government into the equation will improve customer service? Or reduce costs? Or cut out bureaucracy?
Go to Canada and you might get some drugs slightly cheaper (though not so much now that the Canadian dollar is stronger than ours) but you'll also wait more than 100 days for an MRI. You get what you pay for.
Socialized medicine is great, unless you get sick, that is. Then you face red tape at best, and death panels and rationing at worst. This is why any Canadian who can afford it and who gets seriously sick (like the Premier of Quebec or the head M. P. of the Liberal Party) hightails it to the U.S. for treatment.
Where is Trudy interviewing people who love their high-deductible plans? I could give her a host of people who pay low premiums for health insurance from licensed and regulated companies that guarantees that they will (i) get the treatment they need from anywhere they wish to be treated, and (ii) also guarantees that medical expenses will never bankrupt them.
The simple truth of the matter is that Trudy isn't really a journalist. She's an advocate. She would rather chew nails than actually present any evidence that high-deductible policies work well for anyone. Her idea of great journalism is a single-viewpoint story that affirms her liberal position in support of government-run, universal health care.
She ought to just come clean with her readers.
#5 Posted by padikiller, CJR on Thu 7 Apr 2011 at 05:02 PM
padikiller,
If, as you say "This is the system working," then the system is seriously broken.
Which is precisely why the subject of the story tried to get publicity. As he says
”There’s a fundamental infrastructure problem,” he says. ”Neither the hospital nor the health plan is equipped to provide reliable and tran[s]parent cost information to allow consumers to make an informed decision. Furthermore, most people don’t have the stamina, connections or industry knowledge to pursue this. If I worked at Tony’s Toasters, I don’t think it wouldn’t have happened this way.”
In other words, unless you are like Matt - good luck getting an overcharge on your bill corrected.
#6 Posted by murph, CJR on Thu 7 Apr 2011 at 09:23 PM
murph,
So the big scandal here is that some hypothetical consumer could have ended up facing the same problem Matt did, and that hypothetical consumer might not have been able to resolve the problem as favorably Matt did?
That is the meat and potatoes of this "scandal"? That is the argument that somehow skewers high-deductible insurance plans? You're kidding, right?
Matt got the services he needed. He just had to deal with the run around over the bill. You think tossing the government into the equation will eliminate the run around? Make things run smoothly? Honestly?
Contrast Matt's (non)problem to the interview Trudy recently did with an Urban Institute talking head who suggests that the government regulators mandate "end of life conversations" in lieu of cancer drugs for certain patients, instead of allowing doctors to decide how to treat their own patients.
Which is better? Dealing with bean counters over a bill after treatment is rendered? Or fighting with the death panels to get chemotherapy instead of an "end of life conversation"?
It's a no-brainer, murph.
#7 Posted by padikiller, CJR on Fri 8 Apr 2011 at 09:50 AM
...Or fighting with the death panels to get chemotherapy instead of an "end of life conversation"?
Ah, I see... I thought I was dealing with a rational person. My mistake.
Carry on.
#8 Posted by murph, CJR on Fri 8 Apr 2011 at 04:14 PM
murph..
What makes it irrational to call a government regulator who requires doctors to give 'end of life conversations" in lieu of chemotherapy a death panel?
If this doesn't fit the bill of "death panel".... Then what could?
That is precisely what Dr. Berenson of the Urban Institute suggested:
"RB: There are examples where physicians are succumbing to financial incentives and doing things that are not in the best interests of their patients. A lot of cardiologists own CT angiography and PET scanners that have limited role in diagnosing heart disease, but are very lucrative. Some oncologists promote fourth and fifth rounds of chemotherapy within days of death. Other oncologists have said their colleagues are concerned more about their pocketbooks rather than having admittedly difficult conversations with patients and families about end-of-life care.
TL: Will the so-called accountable care organizations (ACOs) control costs?
RB: This is still a concept in evolution. The basic concept is that physicians, hospitals, and other institutions like nursing homes, which are all doing their thing in separate silos, would be incentivized to come together into an organization that would work together to achieve common quality and spending targets"
So murph... What will define these "common quality and spending targets" and how will these standards be implemented to stop doctors from doling out medicine instead of "end of life conversations"?
Why government regulation, of course!...
"I think some form of regulation over provider prices actually would encourage beneficial competition over quality and efficiency, not prices among providers and health insurers."
http://www.cjr.org/campaign_desk/excluded_voices_health_care_costs.php?page=3
There you have it
#9 Posted by padikiller, CJR on Fri 8 Apr 2011 at 04:59 PM
paddi
"End of life conversations" appears "precisely" nowhere in the article or in the text you quote.
#10 Posted by TheZeke, CJR on Fri 8 Apr 2011 at 05:12 PM
Another cost to Matt's care is a loss of privacy. His health problem here is easily discussed and publicizing it is for a good cause. Plus he won. But someone with a stigmatized illness might be less inclined to, say for example, discuss a very personal health problem with their company's HR dept, much less be willing to share it with the media. That person would have less bargaining strength to dicker down the insurer. So in this case, a sophisticated health care consumer with a moderate health problem not only had to reason at an above average level, he had to perform his own calculations against the official online calculator, he conducted research, he persevered against obstacles, he engaged his employer about his health problems, and he entered into multii-party negotiations. If his health problem had been a brain injury, for example, someone else might have advocated for him but he would not have been able to do it on his own. And most people are not able to do what Matt did. In theory he demonstrated that consumers with "skin in the game" will take insurers and providers to task, which will create pressures that will drive health costs down to affordable levels. Maybe this example will spark a movement among savvy health care consumers to analyze closely, follow through with disputes, and publicize their efforts. Maybe it will turn into something. But most likely people are going to use services or not use services, pay or not pay.
I appreciate hearing about this story. When we were pitched into a deeper level of high deductible plans, we sat through an hr presentation with a lot of numbers and a lot of jargon about deductibles, co-insurance, maximums etc. I tried to follow along to figure out exactly how much cash flow I needed to utilize the plans. I had already experienced a situation where I was tested and treated for an illness with a co-payment of $30 in December, went through the exact same exam and tests for a follow up in January (after the new plan kicked in) but the charges spiked to over $130. So with the new plan, I wanted to be more clear about my obligations. I asked the hr rep to translate the numbers but she was not able to do so, it wasn't in the script. But that sparked a conversation at the table where many people spoke up about their experiences. Every single person had their own interpretation. For example, if one family member met their deductible, did that cover the rest of the family? Or did every family member have to meet their own individual deductibles? No one knew for sure. So it's helpful to hear that it is in fact difficult to impossible to estimate costs. If you think about it, not even the US Govt can negotiate with American medicine for the purpose of controlling health care costs. So it's really not a reasonable expectation for an average sick person to do it better alone.
#11 Posted by MB, CJR on Fri 8 Apr 2011 at 07:11 PM
Let's get this straight...
The big scandal here is that one single guy... Matt... had one single problem with his health insurance coverage... Not with getting services... But only with dealing with the bill... And Matt resolved this (non)problem at zero cost with a few phone calls... But nonetheless, some other person "might" have problems that "could" incur costs?...
This is what you guys have, here?... THIS is some sort of indictment against high deductible insurance plans?
Of course, we only get Matt's side of the story - because this is what goes for good reporting in Lieberman's Liberal La La Land... It would be nice to hear what the insurance company had to say about the problem (you know, the other side of the story, God forbid) Or maybe a few dollar figures with regard to premium options (you know, necessary background, God forbid)... Or maybe how much Matt's employer subsidizes his health care costs or what options Matt had when he made his decisions.. But hey... Why let the mere factual details get in the way of another liberal fairy tale, right?
#12 Posted by padikiller, CJR on Fri 8 Apr 2011 at 11:19 PM
I just today got a call from my Cardiologist saying that I need to pay three thousand dollars before they can perform a procedure on me; that's my deductible but I told them I dont have that or the 35% they up-front so they canceled the procedure and went on their merry way. Now I have to sit here with my Hypertrophic Cardiomyopathy and try to figure out what to do. I cant get a loan and family doesn't have money either. I can make monthly payments but wont have a dime until the fifteenth of next month. Reason Im in a high deductible is because when enrollment time came around I thought I would automatically stay in the plan I already had; when I went to look for my new Insurance cards I was told I had no insurance. I had to beg to get enrolled into a plan and that's the only plan they would enroll me in since it was after the enrollment date. What now, Im all out of vacation and sick leave this year due to my illness and on top of that I have to take my father who is battling the same thing and hospice has been called in on him as well as my mother battling cancer. Oh there's more, I filed for FMLA on me and both parents, my cardiologist filled out the paper work and charged me twenty five bucks to do so only to say he cant submit until after the procedure so he knows what to put down as far as time I may need off work so that defeats the purpose of FMLA because I will not meet the dead line that the Hartford Group gave me. This leads into my other issue, since I have no time I have to take off without pay and in doing so my job is not protected and all they have to to say is we don't need hi anymore. Still waiting on my parents Drs. to fill out the FMLA info but that's like getting the Devil to admit he was wrong. If anyone has any suggestions please fill free to notify me im not looking for hand outs just a a way I can get my procedure done. jazzman2952@gmail.com thanks.
#13 Posted by keith l williams, CJR on Thu 21 Apr 2011 at 04:05 PM