The Rise Of Consumer Centric Healthcare
Nearly three years ago, we talked about Consumer Centric Healthcare here at AVC. I keep coming back to this central idea:
a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system.
So when I read this morning in the NY Times that medical costs have been leveling off over the past few years, it got my attention.
I particularly like this part of the Times article:
Many experts — and the Medicare and Medicaid center itself — point to the explosion of high-deductible plans, in which consumers have lower premiums but pay more out of pocket, as one main factor. The share of employees enrolled in high-deductible plans surged to 13 percent in 2011 from 3 percent in 2006, according to Mercer Consulting.
I’m a huge fan of high deductible plans and think that they, along with some sort of health savings account that rolls over unused account balances, is a big step in the right direction to put consumers in control of their own medical expenses and decision making.
There are other things that would be part of a comprehensive consumer centric approach, including wellness incentives (ideally driven by self monitoring/reporting technology), accountable care, and efforts around education and transparency so consumers can make their own decisions. Clearly the Internet can make big contributions in all of these efforts.
It is ironic that consumers are starting to take control of their own medical spending at a time when our country and our courts are debating the wisdom of a large expansion of our government’s role in our medical care. It reminds me of the adoption of the open source model in software at the same time as the government’s case against Microsoft. Guess which one had the bigger impact?
None of this should suggest that I am against providing for those who cannot afford their own care. We can and should do that. But there is a difference between the funding mechanism and the decision mechanism in health care. The latter should be in the hands of the consumer as much as possible in order to restrain health care costs and maintain/improve the quality of care in this country.
Great post. I agree.The argument against the high deductible plans is that people are cheap and won’t pay for things they really need.
that’s where wellness incentives kick in. i think we should make them financial. i don’t have any fully formed ideas on this, but it is certainly part of the overall approach
Monitoring the authenticity of wellness practices may be a challenge but also perhaps a business opportunity.
Fred, have you looked at the system Singapore has in place? They create compulsory health savings accounts via payroll taxes that can be built up over time (they belong to the individual), every procedure is priced, and spending by government is some of the lowest in the world, with very promising looking results.
If one is to take a serious look at Singapore’s system then it is important to understand its founding principles:1. There is no “free” and every patient pays something for every visit.2. It relies upon individually owned, transportable, sharable (among families) and private medical savings accounts. Personal responsibility.3. It is means tested with higher earners paying a higher percentage of the cost of the visit. This is very important because it is not higher TAXES, it is a higher percentage of cost. A very important distinction. The government does not control the money.4. The patient, the doctor and the hospital are wed together by rules but not by the government aggregating the money.This is a very different financial arrangement than say SS in the US in which the government spent the funds entrusted to them and left rotting IOUs in their place.The Singapore system requires much respect for the individual and a light hand by the government. It is not a system for punishment, settling scores or control freaks. And it works, for Singapore.
Employers in Singapore are required to deduct 6-8% of yourpay, add a contribution of their own, and deposit the money into agovernment-run HSA account whose disbursements are strictly regulated.With fewexceptions (dialysis is an exception) you can’t use your HSA to pay foroutpatient expenses, and the amount you can use toward any given hospitalexpense is limited to what your costs would be if you had used a “Class2B/C restructured hospital.”The main catastrophic insurance plan is government-run as well,and subsidized by the government to keep premiums low. Public hospitals provide80% of the more costly hospital care with the remaining 20% by private hospitalcare.Yes, Singapore has HSAs and catastrophic insurance, but it’s the extensive roletheir government plays in their system that keeps costs down?
I don’t think you are saying that conflicts with the principles I noted above.Singaporeans are in control of the funding of their own healthcare and when they wander above a set of norms, they have to pay directly.The government’s control of HSA’s is real but the money is really there unlike Medicare which does not have the real money in place. They spent it.In Singapore, the citizens are more responsible for their own wellness and play the victim less than in the US.It is the principles I admire and espouse.
do you like it as a model for the US?
I think we did such a horrific job w/ Obamacare and that it will be repealed, we have to re-start w/ the principles and these are good principles with which to start.
I think Obamacare is horrific also and wish that we would have seriously considered adopting the “Swiss Plan” as our model for a national healthcare plan.But like Winston Churchill said, “You can always count on Americans to do the right thing…..after they have tried everything else.”
we may be there. if the court strikes down obamacare, what’s next?
If the court strikes down Obamacare, and I am assuming they do, I hope they strike down the whole thing but they most likely won’t.So, they strike down the individual mandate and basically that will leave the insurance carriers holding the bag inregards to pre existing conditions, covering kids on family policies until they are 26 and quite a few other issues that hurt their profitability. They are going to expect redress.I do wonder if that was the intent since day one, especially in light of the performance of the Solicitor General on the day that the individual mandate was brought up. THAT would be a BIG election year boon for the democrats and cynical me wonders if that wasn’t the intent all along.I also believe that however the Supreme Court rules their credibility will take a hit and I do not believe that is in the best interests of this country long term.I am not sure that there is a “what’s next” in regards to healthcare but I do know that the “social contract” that existed has been torn and I doubt that we have the leadership any where in this country to overcome this and thus we most likely will continue to drift further and further away from any real solutions to our problems.Realistically the ideal would be for the Supreme Court to allow Obamacare to stand in full and then maybe everyone, or at least the sane ones, would accept the reality that they have to sit down together and deal with our problems….
well then the citizens may have to take things into their own handsthis is something i am thinking a lot about these days
Yes, I agree. Whether we want to acknowledge it or not we are facing the reality of a second “revolution” and a re-establishment of a 21st Century “Declaration Of Independence.”Of course when I say that everyone thinks blood in the streets stuff but the reality is I believe we are on the cusp of a second “age of enlightenment.”
Sounds great. I will check it out.
Food addiction is huge. I think it totally trumps any monetary incentive. Look at the shit people will do to get a drug fix? And look at people standing out in the cold smoking outside a building to get their nicotine fix. The only thing I’ve seen that trumps the food addiction is the opposite sex. When a man or woman is young  they will always put their physical appearance first and as a group tend to be able to easily suppress the food addiction. And when woman or men get divorced and need to mate again they tend to make their appearance (and proper eating habits) a priority. Then as soon as they mate (or when they give up on mating) that goes out the window. Exceptions to this might be in NY high society (or any social group) where there is extreme pressure to fit in and look a certain way. All this of course is purely anecdotal but I’ve seen so many cases of this over time..  – Yes I know they are also more active but that only explains part.
I think you just stumbled upon the answer: constant mandated mating.
“A kiss is not a contract” – Flight of the Conchords:http://www.youtube.com/watc…This one is good also:http://www.youtube.com/watc…
That does not work in my favor. And I’m the one who could end up pregnant in the conversation.
LE, just joshing, but you have not spent much time with Southern women.I went to a rehearsal dinner with some friends Friday night whereat the groom was from N Louisiana and the bride was from S Louisiana.You had Cajuns, Creoles, Quadroons, Monroeans, Baton Rougeuans, NOLAeans and plantation folk.There was not a woman there who was not thin, chic and a 9/10.And, honey, they all smell so good!
but you have not spent much time with Southern womenI’ve actually never been with anything but jewish brunettes. When I introduced the woman that I recently married I lied as a joke and told my dad that she was from a (name of lower class city in our area) and not jewish and was not a college grad or something like that. I was surprised that he was actually pretty accepting and had stepped off his past positions. And all along I imagined that he was going to disown me. For a moment I thought, hmm, can’t believe all the nice southern woman I passed up!Anyway, when he finally met her in person at a family function, I said “surprise” and presented a perfectly credentialed jewish woman that any father would be glad to have. He was quite angry and apparently had surpressed all his feelings because it was a fait accompli. It literally took him several hours to regain composure. Instead of being happy he was in some kind of shock. That said (and you will appreciate this) I remember hearing something that after ww2 the currency of choice to get woman was chocolate and not money.
<sigh of=”” relief=””/>
We need food though.
Is it cheapness or simply economic status?I’m a believer in high deductible plans. I have one but when I need to go the doctor, I simply go. No economic tradeoff. For many, that tradeoff is real. Is it cheapness or simply being put in a position to make choices about things that we don’t have enough data to really be intelligent about the choice?For high deductible plans to be relevant to the broader market and work, health and nutrition education or just great access, needs to be part of it. That’s a hole to be filled.
high deductible ftw! at least so long as we live in this backwards world where you use insurance for everything rather than just emergencies. but, party’s over on backwards insurance/health system once the debt problem kicks into high gear. 15.6 trillion and counting in debt the govt owes. clock’s ticking.
Health and wealth is a positive correlation. Change the wealth distribution model and more people become healthier.
Ah yes, the Soviet Union was FULL of very healthy people. Not a single case of cirrhosis to be found.
Any word on the penicillin rations, comrade?
Are you two related?
There are plenty of us who don’t believe that wealth redistribution is the answer to every problem. I’m still waiting for your side to explain exactly why they have a moral right to confiscate other people’s money.
I don’t take sides Aaron. I debate with an opening gambit and then consider other opinions. If I’m persuaded of another view I adopt it. Morality is a very malleable coda. It’s about values. If the wealthy believe that their financial status has no correlation with the poverty of others living in the same society then either society does not exist, or they at some earlier point ceased to exist as decent citizens and human beings.
You betray your lack of understanding of basic economics with that comment.Fred’s wealth has zero relation to my lack of wealth. Fred’s millions do not at all impair my ability to earn my millions someday.
I think it is immoral to not have a level playing field. I also think races aren’t about the money as much as the politics that ensure you think you must do good by your fellow ( you in the plural sense) by making sure the playing field is even even if individuals in society aren’t always that moral.
I’d love to hear your ideas on changing the “wealth distribution model”. I wasn’t even aware we had a “wealth distribution model”, other than the part where the government takes capital from its most productive and proven citizens in order to pay for others not to work.
300mm people and 1% are the productive?
1% earn 20% of the income, so no.Love to hear your approach….the new model…. though.
I wasn’t even aware we had a “wealth distribution model”Back in the late 70’s there was an academic movement to deprecate the use of the phrase “political economy” as if economics could be separated out into its own pure mathematical science as opposed to a political food fight with winners and losers!But then you were being facetious right ?
Negotiate it with employer.
“wealth distribution model”It’s based on the “russian shirt off your back parable”.A russian says “If I had a million dollars I’d give you half!!!!”. Other russian says “Ok, can I have your shirt?” 1st Russian replies “No ..”(Or something like that..)
Correlation ≠ causation. It makes sense that those who are diligent and have high future time orientation are more likely to accumulate wealth and are more likely to minimize preventable health issues though diet, exercise, routine checkups, etc.
Other correlations:a) Wealth and intelligenceb) Intelligence and healthc) Genes and healthd) Exercise and healthe) Diet and health
There are many correlations between intelligence and many other good things.I shudder to think how that redistribution system might work. 😉
When living in Japan (socialized medicine) and my wife was pregnant with my oldest son, she had terrible headaches. The OBGYN sent her to the hospital for a couple of tests. Each day she would go, pick up a number from the front and wait in line to be called. Each day the same people were there also waiting. Many of them were older patients and would go because it was something to do. They would take games (Mahjong, etc.) and play each other as they waited. The cost to society of this has got to be staggering.Once my son was admitted to the ICU we learned the real cost of socialized medicine, patient care. One night his blood filled diaper (yes too much info…) had not been changed because they did not have enough volunteers that night. Broke our hearts.The point is that when a service is offered and there is little to no cost, it will be utilized whether it is needed or not. With a boy that is handicapped and seeing my medical bills come in weekly, there is nothing I would love more than for someone else to be responsible and pay my bills. However this burden is mine and I can not expect others to take care of it. There needs to be a safety net but there needs to be personal responsibility first until all options are used up.
that last part is key and not easy to do
Personal responsibility is always hard. Much easier to blame and point fingers. There is a great book called “Leadership and Self Deception” shows how organizations tend to blame Customers and other groups in the organization rather than looking at where they fall short. It is a great read and a quick one.Seems today that with healthcare and taxes everyone wants to blame others rather than trying to figure out how to find a solution.
Is your son alright?
He is doing great. He is now 12 and excited to start Junior High next year. Through all his health issues, he now has Cerebral Palsy and that is the lasting issue. We are getting ready to try to do a story of his life on Kickstarter. What he had was actually name after him by a team of doctors at Harvard. He is a great kid and has a great view on life. Thank you for asking!
wow. wow. wow.
Linking your doc to your wellness in some kind of wellness incentive plan for both sides. Is it the oncoming Affordable Care Act or pure personal finance causing these changes?
I have been a big fan of HSA (Healthcare Savings Accounts) and high deductible health insurance. I would like to see more of these plans sold to individuals directly rather than via one ‘s employer as that would force the insurance carriers to rate the risk on an individual basis rather than as a group.The high deductible creates a window of opportunity for innovation; not just for tech companies but also for providers that gives the insured an opportunity to control and design their own “wellness” program and gives them an opportunity to create a health program that is tailored to their specific needs.But I do believe it is way too early to celebrate the reduction in healthcare costs as a long term trend. The reality is that with the pressure of Obamacare, the recession, and the drought in the drug pipeline coupled with the fact that more and more doctors are going bankrupt, we still have a long way to go to create a healthcare system that improves the quality of life.
In the end, you cannot reduce health care costs by legislating them, any more than they could gas prices in the 70s. The laws of economics cannot be suspended by the laws of the legislature. The only way to reduce the real price of something is to reduce demand for it, or to make the provision of it more efficient/productive, such that underlying costs go down and, through competition, prices.Your point about innovation is right on, but I think most of the costs that can be innovated away are not in the first $1,000 spent per family (as in HDHP), but in the high cost care. We need more room for innovation in the top end. But happy to take it in the first $1,000 too.Is this like the old last-mile problem in broadband? 🙂
Avi, the reality is with HDHP you actually have a (for single coverage) $1,200 to $7,150 window as this is the total amount of for deductible and maximum cash out of pocket (in network) that is a huge window considering that 80% of our lifetime healthcare costs are incurred within the last two years of ones life (most likely paid for by medicare) its actually quite an opportunity for innovation across a broad spectrum of industries.
So true – we still have a system that tends to pay for procedures and specialists. It is going to be very hard if obamacare sticks around to find primary care physican. They aren’t paid enough already, so very few people have them
I couldn’t agree more. Trying to fund the current system with tax dollars is simply a waste of time. The current system is smoke and mirrors.Our family has had a high deductible plan for some time, and it still feels strange. We stick with it because we’ve over-analyzed the costs repeatedly. Every once in a while someone calls from the pharmacy to ask us if we really want our prescriptions filled. They think that since they cost hundreds of dollars, we don’t want them. (Never mind that we’ve been getting some of them for more than a decade.) What they don’t realize is that I can afford the prescriptions because I don’t pay that high a premium. But the point is – it *does* _feel_ wrong sometimes. I understand why most people pay more than they should for coverage. Add in the complication that most people don’t purchase their own insurance, and you’ve got a real situation. Most people, if they have coverage at all, have it provided by a company that purchases it based on the rating of the group while balancing costs against coverage against how employees will react to the “benefits” of it. Finding a way to transition to a plan without the smoke and mirrors, while protecting those that can’t afford the transition, and providing coverage for the less fortunate, is the goal. In my opinion, anyway.
Do you think it is education? A smart, educated bunch like this one will say, “sure,” but if you look at other fields (like smoking), it is often not lack of knowledge but lack of will/desire that prevents “good” behaviour.I have always felt health insurance should cover only high-risk low-tolerance events (not basic care), and getting it through an employer is absurd (better private risk pools). See http://blog.atomicinc.com/2…But, I understand the desire. A health insurer says, “if I must pay $100k to deal with your heart issues, I want to do my best to get you to avoid heart issues, which regular checkups will provide, so I will cover those visits.”
the frustrating thing is that when there are choices that a person can make – lifestyle things such as a gym, a trainer, yoga classes, subscriptions to 23andMe or similar, eating organic/healthily … all of which are a premium… there is no benefit to the individual – premiums don’t go down, there’s little/no coverage to support/reward the responsible behavior but just upside to the insurance company who has to pay less long term.the same issue frustrates me with some of the “soft” maintenance, preventative and remedial techniques like chiropractic or acupuncture or even stress management like a weekend at a cellphone free spa … they’re all seen as “luxuries” and either excluded or come with a high deductible.Then look at the stress the medical “industry” delivers … I have spoken to a couple of practitioners who maintain two sets of price-lists, often differing by hundreds of dollars per line item, based on if a patient is cash or brings with them the overhead of dealing with an insurance company with their policies, paperwork and pricing models.Fitbit, Withings, HealthVault, 23andMe are all steps in the right direction but they remain very much isolated islands of data, and luxury items at that, still requiring a lot of effort and research/knowledge on behalf of the individual to get the most from them … meantime the insurance and drug company lobbyists make sure any real reform or progress from the political side gets derailed.I hope the disruption we’ve seen in other industries and politically with movements like Occupy spill over into holistic healthcare… the time is ripe and for someone who gets it right the potential rewards are huge – both financially but knowing how many people they have helped.
@bsoist: Have you ever looked at the actual cost of those prescriptions? There have been well-documented cases of the cost of a drug through insurance costing *more* than if bought outright, as a profit source for the insurers. I don’t know if the practice is still in play – I spend half my time in Israel, so get insurance there, and just get business traveler’s insurance for when in the US – but when I lived Stateside I *always* checked raw retail pricing before agreeing to buy something.
Yes, the actual cost is what we pay. That’s why the cashier almost always looks at us funny when a small bag rings up at almost $500. My son picks his up on his own at school – $287 every time. Still cheaper than paying for plan that would give them to me for nothing. In the end, it’s about risk management. Prescription costs are high for my family (the other three – I don’t take anything), and *predictable* for the most part. @kidmercury:disqus made the point earlier about buying insurance to cover non-emergencies. We approach it differently. I have insurance to cover the unexpected stuff. re: costing *more*Exactly. Most people who purchase insurance lose out on the deal. That’s where the profit margins are. We all agree to lose out on the deal so that we will be covered if we turn out to be one of the few who needs the coverage, thereby being in the small group who “wins” on the deal. Financially – I can’t really call being sick a “win.”
We are a long ways from “consumer centric healthcare” but we are taking steps in the right direction, with out without intervention from Congress and the Courts. It’s the inexorable march of enabling technologies that is driving the disruption (like an “idea whose time has come” even an army can’t stop its forward progress).
i guess that’s what i was hinting at in my post. you just came out and said it.
I think we would see a lot more change – if rich health coverage were not tax deductable benefits – rather have all people “Pay” for their coverage or procedures.It is easy to not want to change – when it does not cost you any thing…and you receive something for nothing.
William, please define “authenticity”?
I am not sure where the concept of “insurance” that paid for regular expenses came from.I have had HSA’s for years. People say you might neglect your healthcare but I think its the opposite. Go on drugs for high blood pressure or lose weight. Guess which is cheaper?Thats the problem when you don’t pay for something you just say give me more, kind of like eating at a buffet versus a nice restaurant. I think its even more pronounced when the government is paying.And as somebody that is currently wrangling with an insurance company over changing our open enrollment date from July1 to Jan1 to accomodate employees I can say there is nobody that I hate working with more than insurance companies. I’ve been with you a decade and to change my enrollment period you are going to stick it to me.
I am not sure where the concept of “insurance” that paid for regular expenses came from.It seems to have been the result of two different interest groups: patients who didn’t want to pay out of pocket for routine visits, and health care professionals who wanted insurance companies to pick up the tab for their patient visits so they would get more patient visits. But as Heinlein taught us 60 years ago, TANSTAAFL (there ain’t no such thing as a free lunch): the more things insurance plans were compelled to add — fertility treatments, chiropractic, mental health, etc. — the more expensive they became.
I am not sure where the concept of “insurance” that paid for regular expenses came from.I think part of it surely must come from the fact that proper maintenance prevents future expense. Similar is how insurance companies generally pay for birth control. Because it saves them money if the woman doesn’t have a baby (as well as paying for the years of healthcare for the baby.) As the cliche goes, follow the money.People say you might neglect your healthcare but I think its the opposite.You are intelligent and not representative of the majority of the population.
My father is highly intelligent and they had him on so many drugs he fainted at my house, when my wife looked at what he was on she just shook her head.He went from 10 pills a day to 3 and he is better off and I think it is crazy that at 80 he is on a Statin which does reduce his colesterol but is not going to prevent him from having a heart attack.
yep yep yep yep yep.
I think the issue is rather the decline in family medicine and general healthCARE in this country.I go to my regular doctor, and it’s like a conveyor belt in action. The nurses take care of the small things, and if there’s nothing really wrong with me, the doctor doesn’t even see me. He doesn’t talk to me about healthy living or preventive care. The nurses sometimes do.Yes, I need a new doctor. My dentist is better, but then he sticks a few extra fillings into the bill he sends to the insurance company every time I visit. Yes, I need a new dentist, too.Then there are the umpteen million uninsured in this country. Is it no surprise the costs are up, when a lot of these folks don’t have access or can’t afford any preventive care?
I totally agree – we implemented high deductible plans in my last 2 companies and they worked well. Folks still have a “safety net” mentality with insurance, whereby the company paying for their insurance means they have to pay no (or little) for their coverage. This is not putting responsible in the consumers hands. High deductible plans do just this – and we set it up with a very cool twist – the company paid BACK employees a percentage of their out of pocket, based on how much we saved by lowering monthly premiums. So, employees paid much less every month for the coverage, and by getting a (fairly large) percentage of out of pocket back, it helped them make “good” decisions and seeing a doctor/specialist when they needed to vs. not going to the doctor at all. We put an entire wellness program together for a company of 30 people – it was not hard, was big impact, and saved us a ton.
that is awesome!
How should we structure positive incentives, when some of the procedures for wellness are expensive….
behavior is the first place we can attack. smoking, drinking, drugs, obesity, etc.
It starts with the food chain. Processed food, excess sugar and oils cost the US more in healthcare than the other vices put together.
I would add to that people’s obsession with doing anything and everything for their kids while ignoring their own health. Suburban soccer moms running around like chickens with their heads cut off comes to mind. Keep up with the Joneses is alive in more than monetary ways.
Good point. I think the “kids first” philosophy has had a negative effect on our society in a lot of ways, but I hadn’t thought of the impact on our health. I have noticed that all the running around people do ( in general, not just for the kids) leads to an increase in fast food consumption.
McDonalds in the 60’s and early 70’s was a special treat you got twice a month if you behaved. The other times it was a piece of meat, boiled potatoes and steamed string beans.Kids 1st: Also SUV’s or even ordinary cars – global warming, extra energy usage for driving. People needing more money so they commute longer to make more money. Equals more stress requiring medication and worse for the environment. Everything has a cost and a bunch of things have come together over the years.
agreed. the plane’s crashing down. oxygen masks deploy. mother struggling for air as she desperately attempts to get the oxygen masks on her children. epic fail…there’s a good reason why the adult is supposed to put their mask on first.
Part of that has to do with media and spreading the message about being a “hero”. Someone takes a foolish risk saving a complete stranger (hmm, say the hero is a father that has a wife, kids, mother, siblings that are more important than a stranger) and the media presents the story and says he’s a hero. Shucks. So people are not encouraged to think about themselves first. And the logical consequences of their actions. They think “I’m a mother and this is what a mother (or father) does.
IM negatively incentivized to take on certain aspects of preventatI’ve care because of the cost in time and in money behind getting that care. In a free for service system that is a risk
I think a recent zerohedge post summed it up nicely:”Instead of encouraging and enabling Americans to believe that any and every health-related issue they develop (of which the bulk originate from simply eating far too much, such as scarfing down on sugar, sugar and more sugar – which just happens to be the topic of tonight’s 60 minutes), will be dealt with on someone else’s dime, we have another suggestion: offer every American $100 for every pound they lose until they get to just below their ideal weight, and offer them a further $1000 each year to stay below that weight. Total cost: a tiny fraction of whatever Obamacare would cost, and the future benefits to one’s credit card, to social healthcare outflows, and to society in general, would be unmeasurable.”http://www.zerohedge.com/ne…
You’ll love this then: http://www.slideshare.net/s…A company developing home diagnostic kits. Read it from here yesterday, http://steveblank.com/
Ha! I just read it a few hours ago, when Steve Blank posted it. I follow his blog, and am a Columbia grad (Eng, not B school), so I saw it from some alumnus who emailed it to me.
Disease prevention, lifestyle changes and wellness management are all good practices and they lower the costs of more expensive healthcare down the line, but don’t fool yourselves too much with these numbers. The cost of US healthcare is still very expensive by any measure. About 17% as a % of GDP vs. 9% average OECD, and $8000 vs $3000/per capita roughly.Get universal, affordable healthcare for everybody without the administrative overheads and complexities of the current insurance system, and you’ll save a ton of money and can do all kinds of other things with that. The US healthcare system is one of its most vexing problem today.
Agreed.It’s interesting how many comments begin with:1) “I am a fan of high deductible…”2) “I believe in high deductible…”Has anyone looked at studies of high deductible health insurance? Are there any other major economies whose citizens use these plans?It bears repeating that the United States spends about $8000/person/year on health care. Every other major economy spends $3000-4000/person/year. Can high deductible plans cut our costs in half?
How inefficient is it for the insurance company to pay for a doctors visit. Do the math. The insurance company needs to make 30%+ (that’s their published numbers) for overhead and the doctors office has to charge about the same.Visa takes about 3%. It costs about $100/employee a year to have an HSA. That is a big difference, cuts costs in half. Take it from somebody that has bought thousands of years of health insurance.
I’m sorry but somebody who has worked for Mitsubishi in Japan and somebody that does 30% of business in Canada.The U.S. is simply too diverse for universal healthcare. Sorry that is our greatest strength and weakness.
Diverse in what? I’m trying to better understand that argument.
I think that’s best described in examples.My wife works in chronic pain management. She can prescribe the drugs used. Now she is very strict and they check to make sure the patient is not going anywhere else, they swab the inside of the mouth to make sure they are not taking too many, too little (and selling them) and dozens of other scams I can’t even figure out. They don’t even take insurance. They turn away hundreds and hundreds of people that are looking for something else. Even with all of their precautions I’m sure some slip through.On the other end of the spectrum there are huge pill mills that generate money by prescribing as much as they can to as many as they can. Dispensing the pills and taking insurance. It is a huge problem. People goals are to get on disability and medicaid and not work and take pills for the rest of their life. That is their goal. Seriously. It is not an inner city problem as much as it is a rural one. It is an epidemic. That’s what happens when you socialize medicine here.I have some of the smartest PhD’s in the world working for me, but right next to that office are the barios of Phoenix. (We did win the GM robotic contest with a group of students we sponsored from the church)I have a CEO buddy that moved from Norway when he took his technology company public. He put his kids in public high school (the same one I went to, it is a very very good school) he could not understand how great the top was and how bad the bottom was (and the bottom is not that bad).Everything here is more pronounced, less around the mean. Look at CEO pay. I also have a friend that was the number two at a large Philadelphia bank before it eventually got rolled into Bank of America. She commented she knew she would never make more than a million dollars at the Philadelphia Bank because it would be embarrassing, then she made more than she ever could imagine as a SVP of Bank of America.That kind of sums it up. In countries like Canada in Japan people would be embarrassed at either end of the spectrum. Here we tolerate and in some ways celebrate it.
I’m not sure how these cases work against universal healthcare. The top and bottom being so different is not such a great thing. I’m not saying pull the top down. Rather, move the bottom up. We’re not saying that the Canadian system should apply to the US. That’s where most of the debate gets stalled. Rather, take some of its good pieces and apply it. You’re saying you can’t trust people not to abuse universal healthcare? In reality there are checks and balances at the provider level, not at the consumer level. The first step towards change is to admit there’s a problem. You’re not admitting that yet. And the forces working against change are a lot stronger than the ones working for it. The result is middle-ground, compromise-driven Bills that don’t solve anything. So, people could back to the status-quo as it’s more familiar than the unknown that change brings.
This is actually an issue even with insurance for catastrophic only, because any plan will only work if it has a broad enough pool and does not discriminate significantly based on prior conditions. e.g. someone has heart disease, if they cannot get insurance, they are screwed. They join a large enough pool (GE’s health plan), they get roughly the same premiums and deductibles as everyone else.Yet for behaviour, it is a different story. You drive your car recklessly, your premiums go way up. You smoke 2 packs a day and drink yourself into a stupour every night, and your health premiums are still the same.
Same issue as before, Charlie. If everything major is covered, similar to HDHP:a) who pays?b) how do we create incentives to do low-cost prevention?c) how do we encourage innovation?d) what do we do for people who cannot afford the basics?Glad to see someone finally mentioning the tort-driven elephant in the room. The litigators will argue that it keeps medicine honest, but some states do that just fine using limited liability, still enough to keep medicine honest without Jackpot Justice.And… you are a consumer. You are a person and a citizen, which gets you human and civil rights, but in medical care you are consuming something that costs. That makes you a consumer.
With 1.2 billion visits to physician offices, accounting for 25% of healthcare costs, you would hope that there is a lot of low hanging fruit of efficiencies through better patient participation. We need to treat the resources of healthcare like an environmentalist treats the resources of the environment.
But I wouldn’t call purchasing insurance for high-risk low-tolerance cases losing out. If My car costs $20k, and I can buy total loss insurance for $1k per year, and total loss occurs in one of 25 people, then if 25 people buy, one person gets $20k payout, and 24 paid in $1k and got nothing, and the insurer got $4k in gross profit.But as one of the 24, I didn’t lose; I paid $1k to cover the risk of a $20k loss, and happily did so, because that is too much risk for me to bear. Why would you call that losing? Losing, to me, is if I am *forced* to pay the $1k, even if I am willing to bear the $20k risk.
I don’t consider it losing. That word was the only way I could think to describe what I meant. It’s about sharing the cost. I gladly “lose out” on my health insurance premiums for the protection it provides me against the unexpected. My point was that this is just the nature of the game – most people have a net loss, but we put up with that in case we are the one that needs the payout. “Losing, to me, is if I am *forced* to pay the $1k, even if I am willing to bear the $20k risk.”Agreed. This is why their is such debate about the mandate in the current proposal. In my opinion, this is why Obama asked the Supreme Court to strike down the entire bill if they struck down the mandate. Obama’s plan will not work without the mandate. He knows it, and the Court knows it. Which is why I think the Court will strike the mandate and not honor his request.BTW, the main reason I don’t support Obama’s plan is that I don’t think it will work without a mandate. I would prefer a completely public option to a “fix up the current system by forcing everyone to participate” plan.
It is ironic that consumers are starting to take control of their own medical spending at a time when our country and our courts are debating the wisdom of a large expansion of our government’s role in our medical care.Between Medicare, Medicaid, VA, and military health care, the government already accounts for well over 50% of health care spending. Without mandatory insurance requirements you can’t effectively require insurance companies to cover everyone regardless of pre-existing conditions. Requiring people to have insurance is hardly an expansion of government’s role in medical care, but rather is a necessary and proper regulation of interstate commerce to enable access to everyone.
I am, unfortunately in the middle of a bit of a health issue and so I have had an up close look at the system (typing from a hospital bed is certainly up close – I’m ok though).I am young and have always been very healthy as well as self employed. So I basically chose a plan where my premiums would be very low, normal costs I would handle, and if something major happened I’d be fully covered. This seems to clearly be how insurance should work.One thing that has shocked me in this is the allocation of costs is totally screwed up. I had to have a procedure (CT scan) that was going to need insurance approval. I needed it ASAP and wasn’t going to be able to wait for the approval so I asked how much it would cost if it ended up that I had to go out of pocket. I was told that my cash price would be $1200, however the amount they charge insurance for it is $11,000! I don’t see how this is anything short of criminal and clearly shows how screwy the system is right now.
told that my cash price would be $1200, however the amount they charge insurance for it is $11,000! I don’t see how this is anything short of criminal Sorry to hear you are in the hospital. Without knowing more than you are saying as far as the pricing it’s possible that $11,000 is the true cost (let’s assume that it is for now) and they are cutting you a break by charging you $1200. Doesn’t appear to be criminal to me. Keep in mind that the cost of the hospital includes many things. It isn’t the incremental price of providing the CT scan which could obviously be the electricity cost and maybe wear on a part etc.. They have to cover fixed costs as well. This doesn’t mean of course that the pricing is off obviously or that $11,000 is the true cost.
@domainregistry:disqus I agree that the $11K may be the true cost today, bu this is indicative of an inherent problem in our current system. A third party payer system inevitably leads to inflated prices – probably because the costs are obfuscated. My assumption – for which I have no hard evidence – is that in a system where we all paid for our own treatments, the true cost would settle in somewhere between the $1200 and $11000.
Larry, from my very real experience, @stevehallock:disqus ‘s suspicions are actually quite justified. We have seen similar differences in a long string of procedures in which the providers of the service fully admitted that the system is deceiving (read: CORRUPT). 1) MRI of the head: $365 if you pay cash; submit it to insurance and the cost is $2,300. Same radiologist, same office. Insurance brags in their bill that they cover the majority of the cost and we are required to pay $750. Cost to insurance company=02) Needle biopsy: billed $12,000; doctor is shocked and blown away. He says it should $3,500 or so. Our portion to pay after insurance “covers their part” is $4,500. Fishy? yes.3) Major university hospital billing department admits to us that they have special billing arrangements with a certain big insurance company in which billing codes are allowed which do not fit the experience. Wife goes to her doctor at his private office (free standing building of a small group of doctors), we’re billed for a hospital visit because doctor is technically a hospital staff doctor for part of his time. 4) Doctor friend of mine volunteers at the above mentioned university hospital in an effort to help many patients who can not afford his high level of care. He also mentors med students there. He is very frustrated because of billing procedures (including of the indigent) which are deceitful and in his words “corrupt”. He hopes to part of a solution for this, but alignment between the hospital systems and the insurers are very tightly woven. I’ll wind down my rant now, but I’m hopeful that people will not become (or remain) complacent on this topic. Costs must be met in order deliver quality service, but smoke and mirrors in billing and coverage practices is not acceptable.
Glad to hear you are okay. Wishing you a full recovery soon.
they charge insurance $11k because insurance will cut that bill by $10k and pay $1k!
My recent healthcare story:I went in for some tests that my doctor ordered as part of an annual check-up. At the clinic, I asked how much the tests cost. The nurse didn’t know and had no way to find out, but assured me it was covered by my insurance. I took the tests and walked out without paying anything.Two weeks later I get a bill in the mail for $2,200(!).I called the clinic and they told me that my insurance company rejected the claim because I had other insurance. Well, I didn’t have any other insurance that I knew about, so I called the insurance company.After a frustrating hour or so (oops you called the wrong department, let me transfer you…) I finally talk with someone and this is what they tell me:”We weren’t sure if you had other insurance or not, so we put you down as having other insurance with the name ‘unknown’.”I told them this was ridiculous and to delete my “unknown” insurance from my account. They told me the changes would take up to 18 business days(!) to show up in the system.In the end, I paid $27 for the tests.
Yes, the keywords today are health care and politics.Sure, instead of a bill of over 3000 pages, you outlined a good solution right away.But here’s the problem with your solution and the problem DC run health solves. One day the CEO of a company in US health care gets a visit:Lawyer: I was sent by a friend of the Commissioner of Health Care. This friend is my client, who’d give his undying friendship to you if you would grant us a small favor.CEO: The CEO is listening.Lawyer: Be the host and contribution organizer for the campaign visit next week. The average contributions organized are $500,000.CEO: And what favor would your friend grant the CEO?Lawyer: You’re gonna have some union problems; my client could make then disappear. Also, one of your products is about to have some FDA problems, and you are about to have some EPA, SEC, and IRS problems, and my friend can make them go away. One of your drugs is about go to off patent, and you need patent approval for a modified drug, and my friend can make that happen. You have a price increase application that needs approval of the Commissioner, and my friend can make that happen, too.CEO: Are you trying to muscle me?Lawyer: Absolutely not.
This past week, I had the chance to hear David Walker, the former Comptroller of the United States, and a Reagan/Bush/Clinton appointee who is a registered independent. He laid out the case for the fiscal tsunami headed to our shores in a more concise and succinct way than I’ve ever seen before.I thought his comment on health care was profound. “The US health care system is like a house that is structurally unsound, would fall over if a stiff wind came up, is mortgaged to the hilt, and is in the early stages of bankruptcy. And the President and Congress took a look at that and said ‘let’s add on another wing.'”Consumer control of health care is the only way we’re going to arrest the cost curve and bring Medicare back from the brink of bankruptcy.
Shifting cost onto consumers does make indeed make us more sensitized to costs and engaged for managing chronic conditions. It also creates a health care underclass, as those with chronic conditions pay a high deductible year after year.What are these “unused account balances” you speak of?When the high deductible hits you, it will also be a time when you are unable work and have reduced or lower income.
What the consumer pays is a step in the right direction but the truth is like that tax system, healthcare is convoluted and flawed which helps to drive costs up. There needs to be fresh thinking about how saervices are delivered, safe gaurds against malicious suits etc. Fixing little bits of the system is merely kicking the can down the street. However, the main tenent of your post “putting the consumer first” is definitely the right basis on which to start all conversations.
I absolutely agree that shift of focus should be more on the consumer 4 now. I don’t understand how ‘consumer rights’ have been established in almost EVERY industry from a GFE in financing, to a menu in food establishments to price list in stores. I dare anyone to name me one other industry that you DON’T have the slightest idea what ANYTHING costs UNTIL after you get a home…I dare anyone
Good point. Part of the problem is that everything is fee for service, so everything is billed piecemeal as events happen. Nobody knows the final costs until discharge (although, obviously the typical charges can be estimated in advance).This is one of the problems that makes it interesting to compensate providers for outcomes, rather than piecewise services.
As long as employers choose the plans, the consumer is on the periphery.Insurers compete to satisfy employers, which means minimizing cost, while providing an effective service is secondary.
You are aware that you can opt-out of any employer plan and buy your own on the market, right?
If I could direct the employer’s contribution to the premium to the plan of my choice, selected in the open market, that would be a win. Today, opting out means forfeiting the employer’s contribution, which is substantial.Currently the only practical shopping one can do is choosing which spouse’s employer offers a family better plan (provided both are employed, have different employers, and both employers offer plans).
Is that really practical option ?
I have done that for years – with a high deductible plan.
Hard to do if your Employer is contributing towards part of the cost.Only issues is that if you promote people jumping off ER plans – then you may end up w/ healthy people leaving and the sick or high risk people staying
If I wanted Lasik for my eyes or new boobs for my wife, I’d check out 3-4 places, compare costs, talk to former patients and probably negotiate the final price a bit.When I got ACL surgery, I went to the “best” doctor and got my first inkling of the price ($25,000) about 2 months later when my insurance told me what they paid.Lasik and plastics have seen ENORMOUS advancement in quality, price DROPS, and increased safety….and their doctors are making more and happier than those who feel slaves to medicare/medicaid. Talent, quality, competition and technology flock to free markets. Get gov’t out of healthcare now.
Does your wife have a say in the matter?
To even unwittingly give the impression of being an MCP doesn’t help AVC with its female post count. If that doesn’t register then do engage your entrepreneurial mind with this thought. Half of consumers are not male.
To even unwittingly give the impression that I give a shit about AVC’s “female post count”, or any other quota or count is beyond ludicrous.
It was never in doubt.
re: @andyswan:disqus comments I don’t think what he wrote is MCP at all regardless of his either a) desire to be funny b) cavalier attitude The mere fact that he was talking about “boobs” and his reply to you was “yawn” means doesn’t make it MCP. In reverse, my wife specifically knows that I don’t want her to get any work. To me, that’s not MCP either and I think I have a right to make that “demand”. Re: “post count”. ?
Don’t be so sure that your insurance company paid anywhere near what they claim to have paid, Andy. Sure, they may have paid, $25K, but they may also be telling you the highest “rack rate” and they’ve negotiated special consideration between them and the medical provider. And the doctor may have only received several hundred dollars for the procedure, with any balance going to the facility (which have real costs, of course). There is zero transparency in medical billing and insurance.
I can’t see the point of transparency 😉
Lasik and plastics have seen ENORMOUS advancement in quality, price DROPS, and increased safety….and their doctors are making more and happier than those who feel slaves to medicare/medicaid. True.But those procedures are elective. They aren’t emergency or essential. The price you can get when you are shopping for a car and have time vs. when you’ve just totaled a car and have to buy in a few days are much different (or a refrigerator). Or with high value domain names. Time generally helps the buying process if handled correctly.Anyway, as I’m sure many on this blog could attest to when you need a critical procedure generally there is no time to shop and negotiate. You can’t even get appointments at the top doctors. They are booked months in advance. What are considered the best doctors (pick some metric) aren’t necessarily compelled to take all insurance either or any insurance.
speaking of ACL, D Rose and Shump are headed there now. tough day for those two yesterday.
Terrible. I’m actually amazed that you don’t see much much more of those. 80 games with 40 inch verticals is no laughing matter
the crazy thing is both of their injuries were non contact
Ya…you know probably 80% of the injuries I saw in my career were non-contact.Ankle rolls basically the only exception…almost always stepping/landing on a foot.
I agree. HSA plans are under-utilized. They reward consumers for maintaining good health and provide 100% preventive benefits as well!HSAs and state high risk pools can form the backbone of a simple but efficient health care system. Almost too easy!
And that, Dale, is, I believe, Fred’s point. The further isolated we consumers are from the actual costs, the less we will contain those costs, and the less we will demand innovation for efficiency and better outcomes.
Exactly. In my opinion, the hidden nature of the costs is the point entirely.
Very true but the relationship between the consumer and the healthcare special interests in the US seems like a classic David and Goliath situation.Hard to visualize how consumers can bring those powerful special interests to heel without resorting to some sort of governmental leverage.A recurring theme that always frustrates me when listening to this ongoing public/private control polemic is the way the choice is framed. That poliemic has citizen stampeded into a faults need to side with corporations against big government or with government against corporate special interest.It seems to me a more logical way to frame the whole affair is as a monkey in the middle operation with the citizens playing the role of the monkey in the middle.Both these institutions are capable of exercising oppressive dominance over the affairs of the citizenry. Our job as the the monkey in the middle is to balance off these power systems and not allow either one to divide and conquer with such pointlessly counterproductive polemics.IMHOGovernments need to stay out of the business of providing goods and services while taking full receipt of their responsibility to manage the rules of the economic road in ways that effectively service the global goals and needs of the citizens at large.WHILECorporations need to stop using special interest money to sabotage the governments right to set the rules of the road in line with the democratic goals and wishes of the electorate and get on with honest effects to compete in the production of goods and services within the framework of democratically established rules.ELECTION REFORM – ELECTION REFORM – ELECTION REFORMThe democratic monkeys in the middle needs to reassert control over the election financing process in order to reestablish subservient balanced control over these two corrupt out of control institutions.FILED UNDERIt takes two wings to fly and both wings need to be under the central control of the monkey-bird in the middle.
I think about healthcare a lot.I’ve had probably a dozen private insurance plans in the US. I’ve been on the national insurance plans in Australia and Japan. I’ve been to hospitals in Thailand and Turkey (Thailand terrifying, Turkey surprisingly good). I’ve been self-employed had a lot of fun dealing with that.My thoughts for what it’s worth:1) Disconnect health insurance from employers. Health insurance should be portable like a 401(k). When you leave your job, you lose the company “match” but not your health insurance or doctors.2) Transparency in pricing. Patients should know what procedures cost as well as the alternatives.3) Eliminate or reduce patents for drugs and medical procedures, especially utility patents. Hospitals are sued by drug companies and forced to pay royalties under utility patents for things as simple as a method for testing a patient’s blood. Not a drug, not equipment, but the steps taken to check the blood for X or Y.4) Malpractice reform. The average cost for malpractice insurance for an OBGYN in NYC is over $100,000 a year. It’s as high as 10% of every healthcare dollar spent in some states.5) Change the food system. Soybean oil (not healthy) is cheaper than olive oil (healthy) at the supermarket because we subsidize its production. If you take the food pyramid and flip it upside-down that’s what the US government subsidizes. We subsidize candy bars and soda and complain about obesity (and want to tax soda!).Unfortunately, these changes are difficult because we’ve created a system that gives special interest groups a significant amount of political power, and we keep giving them more. The malpractices lawyers, the agriculture industry, the drug companies will make sure these changes don’t take place.Like many issues these days, campaign finance reform is the first step to making the healthcare system better.
I would add to that the need for more effective electronic healthcare/patient record systems.I notice even Google bailed out on that due to the complexities of special interest food fight crossfire.You would think that with a single payer system like we have here in Canada that would be much easier to accomplish but you would be wrong. Due to political shot term thinking and government budgeting optics that never seen to happen here either.The waste caused by this failing is huge!My wife works in the healthcare system as a quality management co-ordinator and it is truly painful to hear all the wheel spinning. Quality metrics and process improvement are near impossible without proper IT data and workflow in place.They do things like bring in LEAN consultants who go around LEANing on every thing except the dysfunctional 1980s style internal IT department. To my way of thinking getting healthcare IT operations LEAN is pivotal to getting the overall healthcare system LEAN.I thinking IT is the one area that really needs to be outsourced to private interests here in Canada.
It is frustrating – that DRs or hospitals can not even tell you things cost
In 1996 my Mom had a heart attack, she died a week later. Easily 75% of her total lifetime medical expenses were spent in that last 0.003% of her life.But if you start to have a conversation about futile spending at the end of life you are accused of trying to create “death panels”.
One’s sensitivity to that discussion is directly proportional to one’s age.Everyone want to get to heaven but no one wants to die to get there. – Steve JobsIt’s like the stock market, a large % of the time you don’t really know if it is futile till it is all over.
We all knew it was futile after the first day.I believe it was more of a waste now 16 years later (16 years closer to my own death) than I did then.She got an extra week of “life” and it tripled her lifetime health care costs. I for one would gladly give up that week of “life” in order to have the money to pay for my kids college.You really want a healthier society AND to save money? Try this unpopular suggestion…Flip medicare on its head, healthcare is covered by medicare for all citizens UNTIL they reach the age of 67. If you want healthcare AFTER 67, buy private insurance. Far more people would be far healthier, far more people would be covered, we’d cut the cost of medicare by 75%.
Far more people would be far healthier, far more people would be covered, we’d cut the cost of medicare by 75%.And what do you do if they don’t buy coverage? Along the same “never gonna happen” thoughts it would be nice if people could only have as many children as they can afford. When my father came to this country after the war, as a condition of immigration, he had to provide letters from people and show that someone was going to make sure he wasn’t a financial burden on the rest of the country.
You’re hitting the core of the problem. We as a society are not willing to just let old/sick people die in the streets or in their homes. As long as that is the case we ipso facto have a socialized medicine system. We need to simply accept that fact and try to make it more efficient.As long as emergency departments are required by law to treat people without regard to their ability to pay then there is socialized medicine in the US. Really inefficient, too late to help much, vastly overpriced, socialized medicine.If you truly do not want socialized medicine in the US then emergency departments must be permitted to turn away those who cannot pay. Because those of us who do pay end up paying for them.
families need to make these decisions, not bureacracies
Is it that high? 🙂
Your maintenance comment agrees with the point I made earlier. But tax benefits matter: out of pocket health care expenses are only personally deductible if they cross some minimum (10% AGI? Cannot remember, thank God, never got there). But insurance benefits are above-the-line, not even considered income.
Just to plug an old friend’s book on the topic. Dr David Newman writes about how the culture of the medical system in the US impacts quality of care and costs.http://www.amazon.com/Hippo…He also did a great Ted Talkhttp://www.youtube.com/watc…
Good point. But if 80% is the last few years, then the real savings are there, and the HSA+HDHP won’t help.Don’t get me wrong, I think HSA+HDHP are great. But you just showed statistically that it is playing at the edges, not the core.
I dislike the mandate on Constitutional grounds. I believe it is fundamentally illegal to force any two private entities to engage in a transaction. However, I understand why it doesn’t work without everyone, especially the healthy participating. That, however, does not justify forcing people to engage in commercial activities. I don’t like the public option, primarily because the government has not exactly shown itself a great driver of public service, innovation and cost reduction (I actually wrote that with a straight face. Ha!), except in small R&D pockets (like DARPA).Why not a Singapore or Israeli style system? Everyone pays a tax based on income or per person, everyone gets a voucher, they take it to any private health plan they want. It would definitely pass Constitutional muster. If you cannot take the money out, then you have nothing to lose and everything to gain by joining a plan, and so you will, whether health or unhealthy, young or old. It eliminates the Constitutional issue and the lack of participation issue. And would probably pass both parties.
I’ll have to take a closer look at those systems, but it sounds like you and I hold very similar views on this issue.
a good discussion of singapore earlier in this thread. i’m intrigued.
“How do you like the robot?” I asked the surgeon. “I hate it,” he said, “I can do the job better and quicker with my hands”. “So why do you use it?” I questioned curiously. “Customers want it. They see it on TV and won’t have any other kind of surgery.” I shadowed a robotic surgery with the incredibly cool Da Vinci robot — a doctor sits at the controls with joystick, and three robotic arms sit in the patient, performing the delicate work shaky human hands cannot.Later, I pulled up the primary research studies, comparing the robot to humans. The studies were mixed, and definitely not enough to support the use of this $2 million piece of equipment. Yet clever placements in the media , including Grey’s Anatomy, pushes consumer demand.The Da Vinci and upcoming competitors are the way of the future, and the robots are improving to a point where I’m guessing they will perform the vast majority of surgeries in a decade or two. But they are not there yet. Consumer should not be in charge of deciding which treatments to buy or not buy. I’ve seen time and time again how mass media vilifies or glorifies drugs or treatments that would otherwise have been left to the scientific method. Consumers should definitely be involved in their own care, but not in a way the commoditizes their care to the level suggested.
What about the robots requiring smaller incisions (and robotic operations requiring less recovery time as a result)? I doubt the use of robots is all due to marketing and product placement.
I agree, Dave, they definitely have some advantages too, including the ones you mentioned. I mention the Da Vinci as an example of patients latching on to the things they like or want to hear (smaller incisions) without regard to the larger picture: Is this treatment more or less effective than traditional surgery when all of its aspects are taken into consideration? Can our healthcare system afford to use it if it doesn’t confer clearly better morbidity and mortality results? Also, if I were a patient, I certainly would weigh small incisions as a more important factor that the lack of the robot’s real tactile feedback and poorer 3D spatial navigation, for example, which make the surgeons job harder. I don’t understand tactile feedback. I do know what small scars are. Point being, medicine should not be commercialized in the same way as buying an android phone. And back to the robots — surgeons today already like them better than the ones that existed a few years ago, studies are showing improved outcomes, and I do strongly believe they will perform most surgeries instead of us fragile humans sometime in the near future.
I agree, Dave, the robots definitely have some advantages too! Precisely the ones you mention. It’s all a question of balancing them against the disadvantages (e.g. less tactile feedback and 3D space visualization for the surgeon). But patients will most always choose something they understand and want (small incision cuts) over vague factors they cannot or don’t want to (tactile feedback, 3D space, cost/benefit analysis, national healthcare costs). Hence my opinion that some things shouldn’t be completely commercialized…
Without commercialization, we probably wouldn’t have advancements such as medical robotics in the first place. Not too many new drugs or devices come out of Cuba, for example. So commercialization plays a key role.
Oh for sure, commercialization is key! But selling the Da Vinci is different than selling Doritos: when you have direct-to-consumer marketing, things get sticky. Biotech companies, for eg, are out to make money, so will advertise their drug on TV. And then if you’re say, the president, I wish you luck in explaining to the public why a biotech cancer drug that costs $500,000 and extends life by 3 months vs. conventional treatment that costs $20,000 and gives 1.5 months just doesn’t make sense. Consumers (myself included) have fickle minds. And healthcare is not twitter. Its delivery should be guided by a mix of free-market and public health forces.
The requirement for prescriptions and physician orders is already a balancing factor here. If a commercial for a new drug gets a patient to see his physician, that’s generally a good thing. The physician can explain why the drug or procedure is appropriate or not. That’s part of his job.
I agree completely. I think electronic medical records are the key factor that will enable this, for 2 reasons. First, it will enable the individual to change doctors and track decision making with relative ease. Second, it will enable data-driven approaches to solving health problems and helping to find cost-saving preventative measures, rather than wasting money on end-of-life measures when its least effective. I can’t believe we haven’t figured this out yet.I wrote about all of this, humorously this morning: http://www.herbietown.com/2…
YUP – electronic medical records – seems very basic given our adoption of the web.
Agree, and it’s why Obamacare is pretty dumb. Aside from that, I can forsee a future where much of medicine becomes commoditized-and instead of going to a doctor we go to a PA or a doc in the box. Cheaper and scalable, along with the fact we now have lots of data and can self diagnose a lot of problems we have. Eventually, doctors may become consultants-with specialists doing the real doctoring. Have seen a number of start ups trying to tackle this so it’s a great area to invest in.
we are seeing a bunch of them too
There are at least three major points to this conversation:1) Fundamental human behavior2) A deeply disfunctional culture within the medical community3) Technologist and clinicians don’t trust one anotherOn #1, most people don’t care until they care. Outside of intellectual debate, we go through our day without considering the long-term implications of our actions. Living in the moment is embedded in our psyche and can be both a pro and con. The same thing that allows us to move on from extreme disappointment and disaster – the human spirit also helps us avoid thinking about the true long-term effects of our lifestyle choices.On #2, the medical society is extremely risk averse, for good reason. Unlike other industries, unnecessary risk = unnecessarily dead patients. Implementing “disruptive” technologies is about as toxic of a phrase you could ever utter to a hospital exec. Organizations recognize their own inefficiencies, but are unwilling to make meaningful changes for fear of disrupting their deeply political operations. On #3, read these two blog articles from the last few months and see what I mean.http://www.blogalegent.com/…http://techcrunch.com/2012/…Our current reimbursement system is like a seesaw built on the backs of patients. When we’re healthy, insurance is on top and the hospital is looking for cash flow. When you’re sick, the roles are reversed. The patients are the only ones paying into the system (through premiums and taxes), yet our best interests are routinely ignored.The good news is that some things are slowly starting to shift.Private payors are starting to implement new reimbursement contracts centered around quality/value/bundled payments. Medicare & Medicaid are playing with different reimbursement models and have created an “innovation center” to pilot new programs. Payors are also supporting tech incubators, a la Rock Health in San Fran and now Boston. UnitedHealth has announced that 50-70% of their PPO contracts will be quality-based by 2015.Geisinger Health is leading the way with flat fee coronary-artery bipass surgery. Awesome. http://www.fastcompany.com/…New technology allows organizations to support the new operational practices required to put patient’s in the center of things and thrive within these new reimbursement models – I’m just hopeful health care organizations will begin to open up their minds to the new models of care delivery these tech advances enable.
on #1 – short term thinking is a cancer on society. just look at how short term thinking affected financial markets. the problem is right there in front of us yet we as a society refuse to deal with it. we need to get the incentives right. a big part of the incentive structure needs to be a focus on the long term.
Related to this post, a TV news producer I follow on Twitter tweeted this earlier today, if anyone wants to weigh in:Working on a story about a company that’s fighting to reduce people’s medical bills… what questions would YOU want to ask the experts?— Shawna Ohm (@ShawnaOhm) April 29, 2012
While reading the New York Times article I noticed one leg of government health care spending not address is the Veterans Administration’s Health Care.After experiencing a mental meltdown last Sunday that led to a frightened a wife, a scared little boy and visit to our home from the police I checked into the 36 bed VA mental ward in Waco, TX for 5 days. I was diagnosed with PTSD the first night. After a few days, my doctor and I agreed it would best to stay in the facility until I could be moved to an inpatient 7 week PTSD program a few miles from house in Temple, TX vs. an outpatient basis. Personally, I know I do better when I focus on a problem without distractions.When it was time to make our pitch to the VA administrators, they pointed out that I did not have a track record of drug or alcohol abuse, had a bachelor’s degree and track record of employment. Besides the administrator said I never was diagnosed with PTSD prior to this current visit. Request denied. Outpatient care only.I know the administrator was trying to manage her budget and help high risk veterans but I know the best care for me was short term intense attention on the problem. On the bigger picture, I was surprised by the churn in the patients. In the five days I was there were 3 turns. That’s 108 patients in a 5 day period! Many patients I spoke with were repeat visitors, 4 or more visits per year was not uncommon. Veterans often escaping a bad living environment or trying to work out their back VA benefits as reason for their stays.
Bill, Are you OK? My prayers are with you and your family.Jim
I am not 100% but I am facing what I have been ignoring for far to long. I am getting used to the medicine sleeping longer than 5 hours a night and begin counseling tomorrow .The point I wanted to make with my post was the VA health care system is large and we to include te veteran in the decision making. More often then not in home or localized care will be effective than driving hours to a VA facility.
get better Bill. it’s great that you are taking care of yourself.
Thank you for your kind words Fred. One of my stressors was unemployment. On Friday, I moved from unemployed to underemployed. I am working with Veteran Central, a DC area startup. It’s a real step in the right direction and I am excited about working with Jonathon Lunardi’s team. On most of your posts I am in learning mode but on the topics I can comment on intelligently, I will
everyone needs work. thankfully you have some now.
are you OK?
A total shame the experience you had at war and what problems it has caused. I wonder how we can design a system so that a Veteran can get what they need but without people abusing the system which is a problem with any mental or soft tissue medical problem.
Prayers to you and your family – especially your son.Thank you for your service to our country and I am truly happy that you are back to work!PEACE
Thank you for your kind words. A bit of added good news. A business I co- founded and had all but given up on, picked up a customer today. We are also expanding outside our niche market, opening ourselves to more traffic to our site.
I much prefer being referred to as a health consumer, rather than a patient. The word “patient” as was pointed out comes from the Latin for suffer…which implies illness. Seeing a health professional for an annual check-up doesn’t make me a patient. It just makes me impatient most of the time!I think referring to a healthy person as a “patient” imposes a very traditional patriarchal relationship between the health consumer and the health provider. It, along with a lot of the procedures employed in medical environments, imposes a kind of authority/control that works subconsciously to subvert health consumers and keeps them from asking critical questions and getting answers. If anything is dehumanizing, it’s the way “patients” are regarded by far too many health professionals!Whether the downturn in medical costs continues or not, I think the trend toward people taking a more active role in everything to do with their health maintenance will only grow. PersonalHealthCloud is working to do its part to put people in control of their health.
This is a great post that inspired me to chime in.Having served 10,000+ cash patients as a medical provider through an e-commerce lab testing portal (Accesa Labs) and an all cash medical clinic, here are some of my observations from the ground:1) The ability to price a health service depends on whether, as Clay Christensen says, the service is a rules-based (e.g. minor urgent care, blood tests, vaccines) or a problem-solving (e.g. sepsis) encounter. Predictable health events can and should be priced in a market while more complex encounters are harder to price. Carving out minor services into a free market will lower costs for those services.2) Health insurance as a proxy for access to medical care only works if providers take insurance as a form of payment. You will likely see more cash-based / concierge models as declining reimbursements increasingly force providers out of the insurance market. Ultimately, there will be a greater distinction between health insurance and access.3) The internet is allowing new market disruptions in healthcare. It reduces hassles and allows new sets of customers to engage when they would have been non-consumers. In our lab testing business, customers who previously would not have undergone lab testing because of the hassle factor or cost are now willing to do so. Arguably, new market disruptions are going to be figured out by profitably serving the uninsured and high-deductible / HSA insurance markets and moving upmarket.4) Consumers should be empowered to make value-based purchasing decisions for minor health services. At the cash clinic, we have observed many patients who have a minor urgent care issue (e.g. simple cold) and decide that $X is too expensive for a doctor visit but then spend more on non-urgent wellness services. They reason that they will go home and see if they get better and, if not, come back to see a medical provider and pay. In third-party payer environments, there is no financial incentive for a patient to not seek care, even for very minor issues.Fred, keep up the good work! Sorry if the post came through twice (new to Disqus).
FredThis is a very important topic and clearly cost is a big part of consumer centric healthcare. The other part is access, consumers need to be better educated with what is going on with them meaning access to health records. Just like if you want to take control of your finances you need financial statements to take charge of your health you need your health records – that movement while growing is still in the dark ages… do you have a point of view on this topic?
Fred I wonder if this post means you got my email yesterday? 🙂 As I explained I have created a consumer centric network that allows you to 1)Create your own personal, portable and private medical record. 2)Share the data with who you choose including medical professionals 3)Be part of a community with others who are experiencing the same issues personally or professionally. Don’t want to spam so I won’t give out the site here unless asked but we are going live in a couple of days.Since the site interacts with healthcare professionals we are mobilizing many of the professionals I have worked with to take part. Providers, Consumers, everyone together.
i didn’t get your email but i will go find it now and reply.
@fredwilson:disqus @tao69:disqus Ran out of room down under.Here’s the thing about Obamacare — we’ve lanced the boil and we are still sick. But we have gotten some of the poison out and we have survived some of the nutty stuff, too.We have pissed on each others’ legs so long, now maybe we can get something real done. That’s not rain dripping down your leg. Stop calling names and engage.I hate Obamacare but for reasons that have almost nothing to do with health care. It just doesn’t work. I am, remember, a guy who has provided health care without any government assistance to my employees for over a quarter of a century and lived to tell the tale. I am not in any manner philosophically opposed to the issue of health care.I just hate seeing anything done stupid. I hate stupid. I hate to be trick-fucked and be thought to be stupid to boot. If I can figure it out, anyone can, everyone can.Now that the SCOTUS is prepared to castrate Obamacare (my view of the world), some of the basic principles can be embraced without requiring anyone to change their basic political beliefs.The big mistake Pelosi/Reid/Obama made was to try to give us a comprehensive solution — nobody read it, nobody understood it, nobody was willing to trust anyone else — and then to stick silly stuff into it — real estate transfer tax at the Federal level, lowering college borrowing costs and accruing the savings to healthcare, pretending to lower the cost of Medicare and then passing a series of stop gap measures to undo the allegedly lowered costs and pretending that they could lower costs through finding fraud and waste. All just bullshit things that no reasonable person would believe.How long have we been looking for fraud and waste — find it or STFU already. I have been hearing about funding mechanisms based on finding fraud and waste for a quarter of a century. Stop looking for unicorns.But there are some fundamental principles that could have been agreed to if given in bite sized nuggets:Everybody has to have some skin in the game. Nobody gets free health care. There is no free lunch. Everyone is going to get sick. Someday.The consumer has to pay the first dollar for their health care and health care insurance for costly care has to be the starting point for everything. Just like auto insurance does not pay for tires, oil changes and paint jobs.Health care is not Viagra, contraception, cosmetic surgery, counseling and all other bullshit ideas. It is about health.We have to have tort reform as part of the system and perhaps binding arbitration (like the securities industry) as the only dispute resolution technique. These savings are huge and states like Texas have real world favorable experiences. Trial lawyers are not medical professionals. Get their snouts out of the trough.We have to remove state boundaries as relevant constraints to health care. State boundaries have nothing to do with medicine. Every document that works in Texas has to work in Washington state. Standardize everything.We have to segregate the costly catastrophic care — terminal diseases — from routine health care and we have to provide a deep well of money to deal with these but we have got to get the actuarial impact of these tragedies out of the routine numbers. They blur the numbers too much and obscure the fundamental principles.People have got to be able to fund their own healthcare with HSAs, transportable accounts, sharing arrangements among family members and their own contributions. These funds will ultimately dampen the cost of the last two years of your life — the most expensive two years of your life.Make HSAs inheritable. So, your Mom was very healthy, let her pass along her HSA balance to the kids without having any estate tax. Stop shoplifting the people’s money.Government has a legitimate role in the enabling legislation but cannot be trusted to touch the money. Face it, you cannot trust the government with money or decorum — GSA, Secret Service.Social Security was a great idea until someone in government started embezzling the money and using it for general fund. If that had not been allowed to happen, SS would be unbelievably solvent, rates would be going down and everyone would be happy. But some shithead allowed the Congress to start tapping into those funds and shitting into the lock box and telling us it would be OK.Nobody in business would have ever allowed this to happen. It is Bernie Madoff logic. It IS a freakin’ Ponzi scheme.We can no longer allow the AMA to put its thumb on the medical school accreditation scale and determine how many doctors are produced annually. Medicine cannot be a sure road to riches.The AMA has to terminate doctors who are bad. Get rid of the bad doctors and institutions. Nuke them.We need four levels of medical professionals — nurses who can prescribe everything through the flu, doctors who can provide general medicine and refer to specialists, specialists and researchers.Turn the researchers loose and get their numbers out of routine medical care. Do not commingle research funding with health care. Provide super benefits for charitable funding of health care. Make it more worthy to save a life than to save a freakin’ tree or a Snail Darter.Why does it require a doctor to prescribe drugs for a cold, flu, bronchitis — broken arms, etc. Let senior nurses provide that service thereby providing a lower pricing point for talent and spreading the joy far and wide geographically. If you are sick in Crane, Tx you do not need the freakin’ Mayo Clinic to get a flu remedy.Make more doctors and thereby drive down the cost. Get the AMA’s thumb off the scale. Make more doctors to broaden the base of treatment.Use well organized purchasing coops to buy everything — across different medical platforms (hospitals, clinics, private shops), across state lines and across different types of practices — from drugs to tongue depressors. This is real cost reduction which does not impact the quality of care.Make all medical records digital from birth. Start tom’w and slowly start working your way forward. The old guys will finally die and then the digital records will catch up.Drive medicine with digital presence. If records are digital, then there is nothing wrong with a doctor in Dallas treating a patient in Crane particularly if there is a nurse in Crane using the camera. Use Skype for goodness sake.Means test everything. If you do not need any financial assistance, make the tough decision to say “pay as you go”. It is insurance not an entitlement. Once you are off the program, make the cost to participate way, way less expensive.Tell the insurance companies they can all be national, use standard docs, standard policies for the whole damn country. Tell them the CEO cannot make more than $1MM and that the company cannot have an aggregate profit of more than 5% per year over a ten year period. Apologize to them for screwing them but screw them good and make it stick. Sorry.Notice that almost nothing on this list has anything to do w/ medicine. This is all just structural stuff you could to to lower costs as a prelude to doing the heavy lifting.If the Congress proposed, debated and passed just 5 of these ideas per month in a couple of sessions, we would have real reform.
“i hate stupid”me too JLM
The Swiss Plan is the ideal solution for the United States. It basically ensures that everyone has a state mandated basic health care plan. Health insurers all offer the same basic plan and individuals choose which carrier they want to purchase their basic plan from. It would replace all employer sponsored plans, medicad, and medicare. If you are low income then the government subsidizes your purchase.All insurance carriers have their profits capped on the basic plan but they make their profits by offering additional coverages via add on policies. This allows the individual to tailor their healthcare to their particular needs and what they can afford.It allows a society to use free markets to offer a societal good that is universal healthcare while also recognizing that individuals with the means to purchase more can have more. It takes government totally out of being an insurance carrier.It ties the interests of insurance carriers to those of the health care providers because there is no “medicad” or “medicare” to dump higher risk, the elderly, and the poor into.In comparsion to most European socialized plans its expensive but in comparsion to what we are currently paying it is cheap.
the sooner politicians get no more than the median service of their constituents as part of their “package” and only for the period of their term the better.they are making decisions that have no impact on their lives while enjoying – at tax payers expense – the best the country has to offer.this isn’t a dig at either side of the race. Healthcare is just one of many places they have lost their way
Would you support an investment account like a 529 educational account, but for healthcare?
i think we sort of have them already. but yes, i like this idea.
HSA ( Health savings account) – they are great – you just need a high deductible plan to be able to have a HSA account.They are portable – re: you don’t loose it if you don’t use it. Allows you to put away funds now even for later in life
Amen. For some great thoughts on healthcare policy I recommend you read a guy named Avik Roy. He mostly writes at Forbes. He’s got his head in the right place and he’s really really smart.
Oh … 234 comments about Health! I’ll read it all because this subject has always interested me.I am not American but there is one question that always puzzled me: how can the U.S. spend 16.2% of its GDP on health and not achieve universal coverage for its citizens?I do not know if this is a question debated in the U.S. but comparing with other countries that guarantee (in several ways) universal coverage … something must be very wrong:- Germany: 11,3%- France: 11,7%- UK: 9,3%- Japan: 8,3%Even in Portugal we have universal coverage with a ratio of 11.3% and we are not exactly rich. How can the most powerful and wealthy nation in the world can not guarantee a universal right of its citizens which is:”Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services (…)”There are things beyond my comprehension!
Proponents of universal medical coverage have framed the debate as one of medical care, when in fact, it is one of medical INSURANCE coverage.Medical care is provided at every emergency room in every hospital in the country, so the issue is not about providing care to those in need. The issue is about providing medical insurance, which is not a “right”.There is a difference between the price of health care and the price of health insurance and we can’t begin any real debate until we can separate those two components and address them individually.
If we crowdsource the ideas for improvements, solutions and even plans from the consumers and then through crowd-storming see which one of them are common to the most, in other words if consumers unionize themselves through positive selection around plans that fit most, providers will not have much choice but to execute on their demands.All this can be done on smart-phones.
That’s good. Quality health care should be atop the priorities of many people.
A extraordinary amount of our health care discussion focuses on the cost, with good reason of course as been mentioned in the 230+ comments on this post. As part of this cost discussion is being able to make an informed decision, stepping back and looking at other consumer products, we have more information available in applying for a credit card or buying a vehicle, then we do in making what should be considered the most important of all lief decisions, our well being. As Fred touched on, the shift of medicine needs to become more consumer focused, more so in the data that can made available, shared, collected, and made simple for the consumer to understand. Think of services provided by a credit card provider, if there are charges being made outside of your normal spending pattern, its flagged as fraud, and you the consumer have option of being made aware. This type of events needs to shift to wellness and preventive medicine, where the focus of the message is at the individual. Such things as prescription awareness, flagging possible issues if the patient is prescribed medications that cause adverse side affects if taken together.This type of event management is in the works, problem has been is the siloed approach taken to the data, for privacy reasons, and for the fact its not been a form easily shared which has added to the costs of health care. Sharing an article of interest on an event driven solution being developed http://bit.ly/InUOPVBy shifting this message and decision making process to the individual, and there is more data available for all parties involved thats recommend both preventative and primary medical care. I recommend reading Dr Erci Topol’s book “The Creative Destruction of Medicine”, that goes into many of today’s practices, how this traditional evidence based medicine has lead to the costs along with a system that is meant to suppor the institution, rather the individual.
Interesting article on our unhealthy society:http://www.reuters.com/arti…””We haven’t reversed the epidemic,” Dr. William H. Dietz, director of the division of nutrition, physical activity and obesity at the CDC, said in an interview. “This may be the first generation of children that has a lower life span than their parents.”
What about the preventative side of medicine? Regular check-ups? Not having any kind of quantitative data to back up my thoughts, but I would be more inclined to think that the rise in High-Deductible insurance is because people can’t afford insurance any other way. So, they go the high-deductible route to cover off the life-shattering bills that are associated with something like Cancer or other debilitating illness. The risk of this is that you’re now stuck with a bill for something routine like an annual physical. It is human nature for someone to NOT get the check-up if they have to pay for it. At the very least, they are going to put it off…even if they are flush with money.This is all great in the short term. Reduces our bills in the short term, but the long view we aren’t moving towards a healthier Society. In my view, a healthy Society is far better off in the long run than a wealthy one.
You need consumers to focus on prevention – not treatment. The majority of costs are spent on treatment and only 5% on prevention. It is what we are doing in the corporate realm:http://us.virginhealthmiles…
As human beings, we are endowed with freedom of choice, and we cannot shuffle off our responsibility upon the shoulders of God or nature. We must shoulder it ourselves. It is up to us.
You are totally channeling Stan Feld (http://stan.feld.com). I love it. Now if we can just get him to weigh in with a comment or seven.
Fred – great post but I’m afraid your wrong on this one. Your VC approach – where most big problems can be solved by applying an economic solution (If your only tool is a hammer…) – will not solve the immense problems with healthcare in the US. In all likelihood they will make them worse.Your defense of high deductible insurance plans on the face appears entirely logical. Routine care is not something that seems like it should be covered by insurance. You don’t buy grocery insurance to pay for your milk & bread. And there are large expenses, that aren’t day to day, but which are entirely predictable. For example, having a baby. Usually you know you’re going have that baby well in advance – so you should save up for it and pay the basic costs. The consumer is welcome to insure negative outcomes, but the basic cost to have that baby are not uncertain so insurance should not apply. Alas this is impractical and will never work… The first and most fundamental error is proposing that sick people be viewed as “healthcare consumers”. This ignores the empirical evidence that markets simply don’t work in healthcare, and everyone outside the US knows this. In some ways healthcare is more like national security in this respect. We don’t think of citizens as “national security consumers”. And for good reason – we would never be able to provide for the common defense by applying market based solutions to the military.The first problem is that our higher levels goals for healthcare are not compatible with free markets. Goals such as – universal access, longer and more enjoyable lives, doctors (hospitals etc) being conflict free when treating patients (yes, that quaint notion of professional duty), patients having informed consent, the development of new treatments and finally affordability.Market based solutions can by definition only have market based goals i.e. price equilibrium. But even if you didn’t have this goal issue – markets simply do not work when applied to healthcare. Why? because the basic elements necessary for a functioning efficient market simply don’t exist when it comes to healthcare: equality of information, substitute choices, bargaining power equality, limited externalities and of course rationality. The only exception may be for the most elective of procedures i.e. Lasik eye surgery (alternative – almost free glasses and no one needs Lasik).These same issues also apply to insurance. Be it high deductible or otherwise. That’s because unlike most other goods and services there are massive externalities associated with healthcare which markets are very bad at handling. Some stranger buying a crappy car has very little impact on you in your nice car, unless of course it happens to break down in the Holland Tunnel just as you are entering. But some stranger failing to treat his communicable disease or not having insurance has a big impact on the rest of society. Further the consequences of bad consumer decisions are massive. If you buy the wrong TV, or choose not to buy a TV, that has very limited impact on others. But if you don’t get screened for skin cancer, and then get melanoma, and spend all your money on treatment, but still aren’t dead, and then since Fred wants the indigent covered, someone else has to pick up the tab. But it would have been cheaper to pick up the tab up front, rather than bankrupt the bad decision-maker first. Standards of care are complex, and cost is only only one factor. This isn’t about what airline you fly, or what brand of phone to buy, or ditching your cable company for Boxee. Should you be screened for prostate cancer starting at 40? 50? Never? Which treatment for your cancer is the right one for you? Occasionally it’s a percentage effectiveness versus cost equation, but it’s usually no where near that simple. You don’t want your doctor to be thinking about money when you’re having that talk. And since incentives matter, no matter how ethical your doctor is in a market based system – you know it will impact her advice. What about a test that has potential harms (like a CT scan)? Do you want your doctor motivated by money on this question? Newsflash: she is already, and it’s not doing anything good for your health.Are you really going to bargain with your doctor on the price of chemotherapy treatment? How exactly would that work? Just picture going between 3 different doctors trying to knock down the price – and in all but the largest markets your alternatives are going to be very limited anyhow.And of course just as your child is screaming in pain and needs their appendix remove – you’ll be entirely rational in your decision making.Fred you clearly believe that for the most part that market is the better way but then oddly you suggest separating the funding mechanism from the decision making mechanism – which is going to be required if everyone is going to have access regardless of ability to pay. Except your arguing against yoursel here. If you want consumer based market solutions the funding and decision making have to be linked. Otherwise the consumer will not care about cost. You can’t have a market based costumer driven model and split off the funding mechanism. But you can’t have universal access or really any form of insurance without separating the two.Every other large, wealthy, free-market, democratic nation provides universal healthcare (and no, emergency care does not equal healthcare). And they do so with better outcomes at a significantly lower cost per capita then the US. Non of these systems are perfect but the citizenry of these democratic countries appear to overwhelmingly support the basic non-market based model for health care delivery. The approaches may vary – single payer in Canada, the NHS in the UK, highly regulated utility like insurance providers in Switzerland – but they all have one thing in common: a high level of public regulation and funding. Remember, these are all free market economies and yet they have all realized that you can’t attain higher level healthcare goals by applying market based economic solutions. This is one problem that can not be solved by the next Twitter for healthcare…
i guess we disagree. that’s cool.
My family switched to a high deductible plan last year and it’s amazing what we learned. For starters, when we go to the doctor for an optional procedure, we ask in advance how much it’s going to cost. Amazingly, the staff very rarely can give us an answer. They usually have no idea.I’ve become convinced that we’d save 20-30% throughout the entire health care system if everyone simply asked what the cost of health care was likely to be before they consumed it.
I read back through most of the comments and found that that none of them suggested making the general population accountable for bad habits (mine is Pepsi) and promoting healthy living.Geoff Colvin had a great article in the April 30, 2012 issue of Fortune on the topic. Here is the link:http://finance.fortune.cnn….
I’m glad to see all the activity around this topic. I’m a second career employee benefits broker (aka insurance agent) and started in this business right when HSA’s came on to the scene in 2004. My first client was a small group of attorneys who understood the high deductible, lower premiums concept right away. I spent the next three years signing up new clients on HSA-compatible plans and became an expert on high deductible health plans (HDHP). Fast forward to 2012 and my family and I are still on an HSA-Compatible HDHP but I’ve moved most of my HSA clients to straight HDHP’s with no HSA component. Here in California the premiums savings on HSA-compatible plans just aren’t there anymore, but the HDHP model is still a good one. It truly puts consumers in control of their health care costs (if they want to be) and has brought more transparency to the market. I know my original attorney clients still shop around for MRI’s and allergy pills and have found that the prices vary widely from providers that are literally across the street from each other. This type of consumerism simply doesn’t happen on a fully insured health plan.As an entrepreneur, I couldn’t be more excited about where health care is headed. The opportunities that open up with Accountable Care Organizations (ACO’s), outcome based medicine and wellness incentives are huge. I see new insurance companies coming into California with a willingness to try fresh approaches. One company in particular is actually integrating wellness incentives right into their health plan by providing a richer insurance benefit to those members that take a few preventative health actions. It’s not a perfect solution, but it’s a step in the right direction.This trajectory from HSA’s and HDHP’s to wellness incentives to value-based or outcome based (ACO’s) medicine is fun to watch. The market is actually working on the problem. I believe the key is to get physicians, consumers (patients, members, people) and employers goals aligned. I do think the ACO model is a step in that direction, but it is missing the employer component which for now is where most consumers purchase their health insurance. The next generation I see on the horizon is personal responsibility and individual measurement (look at the work Quantified Self is doing). Technology removes a huge barrier to the measurement component and the moment you start measuring your behavior changes… I’m a Couch to 5K success story myself and wouldn’t have done it any other way.-Dennis Carlson
The core problem with our healthcare system is third party payments (btw single payer does not solve this). This prevents consumerism from expanding in healthcare beyond cash based procedures. If someone is always paying for the majority of your costs, you will never think “healthcare costs money” (enter in the discussion of healthcare being a right). The power of consumerism in healthcare: Lasik pricesLasik prices have not increased despite soaring demand.http://www.allaboutvision.c…
On an extremely related note, just this week Castlight Health (health IT startup out of SF) raises another $100M (for a total raise of $182M) to bring transparency to health care pricing for consumers, employers, and health plans…This is exactly what’s needed: a third party creating a real marketplace.Link to Forbes article: http://www.forbes.com/sites…
I take full responsibility for paying for all my medical expenses because i don’t have insurance. I did buy some accident insurance but the company made it impossible collect on it, twice. Just to walk in the door of the ER is $1000 as a fee tacked on top to compensate hospitals for all the free care they are forced to give to people using ERs as neighbourhood clinics.Immunizing a teenager is $1000 — all those new immunizations cost a fortune.I don’t want to take out of your pocket for my medical care. I don’t support Obamacare.I do think, however, that there’s a question as to how we can reduce expenses on Medicare and Child Health Care plus and those medical payments the state does take on. And that is to turn around how they perceive of “socialized medicine”. They should pay for , or subsidize, a core set of minimum things like innoculations, or mammograms, or pap smears, or flu shots, and perhaps throw in one antibiotics-type illness per year. These costs are all hundreds of dollars but then people put them off because of lack of funds and then it costs more to treat them down the line. Some city high schools have clinics built right into them, and they do innoculations and provide health care. And that should be the norm. Everything from diet to reproductive health, starting early, with easy to understand modules and incentives with aps and such as you say.
Good points Charlie. It’s about the ratios and utilizations of Primary Care vs. Speciality Care.Primary care is a lot cheaper, and helps in the preventative aspects. In the US, specialty care is overused a bit where about half of all outpatient visits to specialist physicians are for the purpose of routine follow-up whereas they should be going to primary care physicians.
Excellent points.I also don’t like the over emphasis on efficiency and lowering costs. Some things cost money. Reducing everything to the lowest cost tends to all manner of deception and fraud. Perhaps some industries can only be effective if inefficient? I think health care might be one of those. I feel the same way about education.
The defensive medicine and malpractice issue is one of tort reform which unfortunately generates a knee jerk reaction. The knee jerk being the politicization of trial attorneys v hospitals v insurance companies v patients.Texas has had a successful tort reform.It works and it streamlines the system and makes for quick effective resolution with a cap which discourages attorneys to run after ambulances.The issue requires just a bit of thought like the securities industry engaged in. Securities disputes are resolved by binding arbitration as a condition of opening an account.Why not the same for medical treatment? Have you ever read some of those docs you have to sign to get a colonoscopy? Seems like you are getting two different things up your……well, you know what I mean.It is entirely too logical to simply have medical dispute resolution, including malpractice, be subject to binding arbitration.This would eliminate all of the predatory insurance litigation (think of John Edwards as an example of the very worst) and would provide for lightning fast claims resolution.If you coupled this with a fund perhaps funded by a $1 surcharge on each and every customer and doctor visit ($1 each mind you), it would be self funding as well as attributing cost to where cost should be attributed.There is a lot about healthcare that has nothing to do w/ medicine and is just thoughtful administration. We should be at least that smart.
Totally agree but I think you have to figure out end of life issues as well.That’s where a huge amount of money gets wasted.I don’t know what the answer is. For me it was taking my Mom home with hospice instead of going the feeding tube and other extraordinary measures. I watched even though you knew it was over the doctors and hospital staff would rather keep her there at tremendous expense. I don’t necessarily blame them they are always used to trying to prolong life at any expense.Its also a lot easier when you have a wife that is a Nurse Practioner and can take off for several weeks because you don’t need the money, and can counsel without fear.
eliminate defensive medicine by changing from a malpractice system to a no-fault system like worker’s comp. This would eliminate excessive over-prescription of the most expensive tests, scans, and analysis, thereby reducing the unnecessary costs of defensive medicine. 100% CYA is a driving force in medicine. It even effects physicians who don’t have to pay their own malpractice insurance.Unfortunately though the elephant with health care coverage is also what people are able to do given the advances in medicine that will keep someone alive with bad habits.My uncle is 89 and just underwent an expensive bypass surgery. I thought he would be dead years ago he has so much “belly” fat. But with the wonders of modern medicine he was kept alive way past the point at which he would have had to a) change his lifestyle b) died. In the old days men were “little old men” I don’t recall “big old men”. They died.Peoples food (and alcohol) addictions along with advances in medicine that allow them to live with those “conditions” are a huge cost.
“Consumer” isn’t a dehumanizing word. It denotes someone who pays for something. “Patient” is probably more apt though, for two reasons:1) Not all patients pay.2) “Patient” comes from the Latin word for “suffer”, and patients generally suffer.
You cant talk about consumption without using the word consumerI agree about malpractice reform. Absolutely essential
–covered major medical (say anything over $25,000)That’s essentially what Medicaid and Medicare do, and the costs for both are spiraling out of control.
I watched even though you knew it was over the doctors and hospital staff would rather keep her there at tremendous expense. Sorry about your mom, Phil.But at my wife’s hospital it is the opposite. From what I’m told (sometimes on a daily basis) the physicians are driven to “d/c” a patient. Many times the patients family wants them kept alive at any cost. (This actually happened with another uncle of mine recently. My aunt took her time and let him stay in the hospital on a feeding tube and vent until she was ready to “let go”. My wife was amazed and said he should have been long gone and not kept alive he needed to be taken off the ventilator after (can’t remember) X weeks.) The cost must have been tremendous. You could have sent someone to an Ivy League college for a year for the cost of the extra week he was kept alive. Sorry if I sound harsh but this is one of the reasons we are in this mess with healthcare.There are also a fair amount of patients that are drug seeking (in their 20’s 30’s) and want to be prescribed pain drugs. There are patients that want to be declared “disabled” so they can collect disability. These are all costs and something that universal coverage will not end.
Yes, Philip we incur around 80% of our lifetime medical expenses in the last two years of our lives and obviously most of that is borne by medicare. Even if you continue to work past traditional retirement age or are self employed almost all group plans have a clause where once you reach 65 medicare becomes your primary insurance and the group insurance becomes secondary.Having dealt with my father passing away a few years ago I experienced the same realization that you did….My father had made it well known that he did not want his life prolonged in any way shape or form but the reality was, he was not “there” to make the decision on the day it had to be made. That was the most painful decision I have ever had to make and the hardest words to say that have ever come out of my mouth. He got his wish not mine…..
Sorry about your loss, Philip, but I’m not sure the attitude of your physicians and hospital staff was typical. We got something closer to the opposite attitude from the staff at the hospital where my father passed away (MSK in NYC). One physician even mentioned how expensive the drugs my father was getting were. Which was pretty obnoxious considering that my father had been scrupulously paying huge insurance premiums for years (huge because he’d had cancer before) precisely to pay for those drugs.If anything, they were a little too eager to pull the plug.
you are so right
Child Birth and End of life – high costs on both ends.It frustrates me that Insurance companies only cover the first, earn high premium during most of your healthy years and then you get moved to Medicare for the gov to provide coverage.
It is entirely too logical to simply have medical dispute resolution, including malpractice, be subject to binding arbitration.I think it’s a great idea but I’m thinking that medicine is way to complex and the availability of qualified arbiters would be an issue. As is the case with business you can always second guess any decision. Much of what physicians do is judgement.I had this recently when I went to a GI doc to get scheduled for a colonoscopy and endoscopy. My wife thought I needed both but the GI doc said based on what I was saying I only needed the colonoscopy. Judgement call. Now if something happens to me as a result of the lack of that test what’s going to happen? Who is the arbiter going to side with and for what reason?Medicine is analog it’s not digital. It’s like when I decide a strategy for negotiation. Your strategy may be different and you may get to the same place or maybe not. After the fact an arbiter is looking at a clear failure. So it is pretty easy to find some reason why it made sense to run that extra test. Also the record keeping required to document why you did what you did would be enormous.
So you support government negotiated caps on malpractice awards but not government negotiated caps on the retail prices of the underlying procedures?Sorry, this stinks of partisanship.We need to go a different direction. You want effective tort reform then separate out the compensatory from the punitive damages. If a company/hospital/doctor does me wrong I should be compensated for my losses as part of the award. If the company is negligent they should be punished. The only way to punish a corporate entity (besides imprisoning directors) is financial penalty. That penalty needs to be big enough to hurt. But me and my attorneys should have no claim on the punitive damage award.
Doesn’t seem partisan to me.
Erik, my man, you are ascribing to me things I did not say.I am very much in favor of using purchasing cooperatives to harness the collective buying power of the consumer and to use good buying practices to drive down the prices of anything that does not wiggle.I would have a menu of services and fixed prices for each and every one but not by cohersion but by competitive purchasing.This is not price controls, this is just sound purchasing tactics. It takes leadership to get this done.The first step to effective tort reform is to streamline the system as the securities industry has done with binding arbitrary. Don’t get to the damages phase yet, just streamline the system.The second step is to get the offenders out of the industry completely — get rid of bad doctors and institutions. Get rid of bad docs. Get rid of bad hospitals. Again, no damages yet.Third, separate compensatory damages (which can be altered over the course of the victim’s life) and eliminate direct punitive damages. If you cannot wean yourself from punitive damages, then have them paid into a fund to administer the system.There is a great example of how a small effort leveraged by widespread application can drive unbelievably improved outcomes — The Checklist Manifesto by Atul Gwande.This is an example of how the application of a simple principle — checklists like those used by the aviation industry for every air flight — to hospital procedures (read operating room cleanliness and hygiene) can dramatically change outcomes — dramatically lowered patient mortality rates from infection.This is real, not pie in the sky.
My actual loss from a malpractice is a real actual expense I incur. Why should the government limit my ability to recover my actual losses?Other than the GOP wants to smack down trial lawyers? I have no problem with smacking down trial lawyers but my suggestion on how to do it does not limit the rights of the citizen to use the courts to recover their losses. Capping judgements does limit the rights of citizens.
Where there is a consumer there is a seller This is an example (via Endocrine Society Continuing Education Series) Maximizing Reimbursement for the Treatment of DiabetesRecorded on April 18, 2012Join us for an interactive webinar on diabetes coding and billing to discover ways in which you can maximize your reimbursement.
I thought we were talking about punitive damages, which are not real losses and very difficult to calculate.That’s different from limiting the cost of a procedure, which at some level is based on actual costs.
I think you are mixing your metaphors. I think that there is no necessity to limit actual compensatory damages.If you can streamline the system, you can eliminate the cost of discovery, the trial, an appeal and not have the system absorb those costs in addition.One might have $1MM in compensatory damages and $2MM in legal fees.A streamlined industry funded dispute resolution system would pay the $1MM in compensatory damages and eliminate the $2MM in legal fees.The capping of damages is a negotiated feature of the original patient contract no different than airlines limiting your lost luggage damages to $750.Perhaps too hard an example but a frame of reference nonetheless.
There is a difference between judgment, even unfortunate judgment, bad judgment and malpractice.If your doctor says: “Hey, LE, I think it would be advisable to have the endoscopy to look at the upper end and the colonoscopy to look at the lower end given your age and family history.” then who is really making the judgment?If you say — “What do you think, Doctor, up to you?”Unfortunate judgement and even bad judgment is not always malpractice particularly when the patient is involved in the decision making.We do not get the medical care we deserve, we get the medical care we demand.Me? I tell the Doctor to look from both ends.Irony — I go next week for both.
No question.That’s why I”m sticking to my argument that that education and access are key. I always presume that the market is smart and ready to learn and make smart decisions. They just need the tools and proper motivation.
That is one of numbers that reminds me ofCDOs nothing good to come of them in the future.
Yes, Philip we incur around 80% of our lifetime medical expenses in the last two years of our lives Unless you are otherwise healthy and get hit by a truck or something, you will most likely be at your sickest shortly before you die. And when you are very sick, you will consume more health care.But the danger of tossing around statistics like this is that some people draw too-facile conclusions from them. Their logic often goes something like this: “If someone’s going to die in [a week, a month, a year, whatever], why aggressively treat them”.President Obama echoed that sentiment a few years ago when he told an audience member that maybe her elderly mother should just take a “pain pill”. A couple of responses to this:1) Physicians generally don’t know exactly when someone is going to die; a lot of end of life care is the same sort of care that may have successfully prolonged the patient’s life months or years ago.2) Often there is overlap between curative and palliative care. One example: when my father was terminally ill with lymphoma, he had a tumor pressing on his esophagus that made it difficult for him to swallow and eat. No “pain pill” would have fixed that, but a radiation treatment that shrunk the tumor did.That was the most painful decision I have ever had to make and the hardest words to say that have ever come out of my mouth.Sorry about your loss. My father had a living will and health care proxy (he was always extremely organized), so we were able to handle everything in accordance with his wishes.
you did the right thing Carl. i hope my kids do that for me when my time comes.
It’s all fine Charlie. Thanks. I didn’t want to get too involved in this discussion, because some people get defensive quickly regarding Canada vs. US systems.
Context counts, as Fred notes. In hospitals, “patient” seems most common. I’ve seen “client” used to refer to residents of a group home for retarded adults (worked at one when I was in college), even though, of course, none of them was paying out of pocket for living there. In that case, I assume, they thought “client” sounded nicer or more empowering or whatever than “resident”. Checking Dictionary.com just now (definition 2), it appears that “client” has become an established term in that context.
See my response to Carl Mistlebauer.
As to your last paragraph. My wife has a DEA license. She is one of those again lucky that doesn’t have to make money so she literally rejects hundreds of patients.It is much worse than you think.
you know your stuff Dan!
I am sorry for your loss as well. I think staff in big city hospitals must be different as well as she died ten years ago. It was at a very good hospital of the Main Line of Philadelphia.
You can leave them instructions ahead of time via a health care proxy.
Fred, you love your children dearly and they love you. When your time comes, and I do hope if anyone lives forever its you, but when it comes that love that you share with your children will require them to honor you and your wishes…..
Tell them. It won’t make the decision easier, but it will make it more likely that they will respect your wishes (my parents told me what they want already when they hit that stage, and I am glad they did)
Fred, if they just can’t / won’t do it, don’t fret.I’ll sneak in with a copy of Thomas Friedman NYT columns and read you to death.
i will do that. thanks for the suggestion.
Actually Dave the reason I keep bringing up the fact that we incur so much of our lifetime maximum in such a short period and most likely paid for by Medicare is because we spend so much of our debate on the topic of healthcare discussing how expensive health insurance is and how frivolous we are spending our insured benefits.I have 11 years of self funding over 1,000 employees and trust me they were not the vision of health but we also never lost money due to high medical expenses and we never raised our premiums or our contributions in 11 years.Now, our work force was 85% female and I always expected an issue went a birth but we had none. Cancer treatments normally totaled $65,000 and heart attacks ran about $25,000.I do know that insurance companies are going to raise rates for inflation and they expect claims to run no higher than 70% of premiums or you are going to be hit with a huge rate increase.Payments to general practitioners are a non issue and most likely your prescription drug charges are going to surpass what you pay to the drug companies on an annual basis.We want to “blame” our high healthcare costs on a lot of things but we really need to seriously look at how insurance carriers distort the costs of our healthcare.
“Inefficiencies should certainly be monitored and squeezed out, but not at the expense of the core mission. “I couldn’t have said it better myself. I guess that’s why you had to say it. 🙂
Yep. It’s a good conversation to avoid when you live in a nation with universal healthcare. I’m reading though…
I’m not sure I follow. You start by mentioning Medicare, and the end-of-life treatment costs it incurs, and then you transition to your experience insuring your employees, who, presumably, were too young to be covered by Medicare. Then you conclude with a comment about how insurance carriers distort costs without explicating how, specifically, you believe they do that, and what connection (if any) you see between the problems of those insurance carriers and Medicare.
I was not self insuring but got hit with the big issue at a birth and got hit with the 100% rate increase. Really burns you up.
That’s right, but I’m not going to take your bait further 🙂
i think that may well be exactly where we are in healthcare right now
Me too – went through it w/ dad
Socializing losses, privatizing profits.It’s perfectly normal, works that way in every other well connected industry as well.
Insurance companies have “set asides” where if they suspect that something is going to cost a lot they will plug in a number and if no one catches it that number gets calculated as part of your claims, even though it is just a reserve. Thus your rate increase is based on an expectation of claim totals not actual expenditures. Then you have to deal with the reality that with insurance carriers there is nothing called “loyalty.” You can be with a carrier for 10 years and they could have made money off of you every year but one bad year and they will nail you and there is absolutely nothing you can do. Then there is the practice of “buying the business” as I call it. Insurance carriers will give you a lowball quote to get you to switch, the reality is anytime you switch carriers you are going to see a drop in claims the first three months because employees are hesistant to test their new coverage. But they will not let you in on the secret and at renewal you will face a huge rate increase.
BAM! That is the sound of somebody dropping some knowledge on you.They had made more than 5 times the amount of the really bad year in the previous 10. You are 100% right.Your comment exactly reminds me of when somebody was talking about D&O insurance with a crazy made up number and JLM and I came up with the exact same, exact same number at the same time.
Philip,If there is one thing that I would drop everything I am working on now for, the one hidden passion that I have that I would give up everything for, it would be the opportunity to create a start up health insurance company.To be part of that team is something I would give up everything for, work 24/7 at, yes, even tolerate ramen noodles for…The chance to blow single payer, nationalized, and or the big shot insurance companies out of the water is something I would love to be part of.So, if you hear of anyone who is thinking about developing something like that tell them to call me!I actually can come with references from Doctors, insurance executives, and a couple provider networks.
Carl, I think I have the other piece of that which is why telling people just “getting all that is due to me and taking every purple pill” is actually as bad as eating at a buffet.See great video: http://www.youtube.com/watc…But this is not what I’m talking about, it is the spirit you had when people realized you were paying for insurance not just “the insurance company” which are a bunch of assholes.Email me a philipsugar on the google service.