Category Archives: Health Care Costs

Damned If You Do, Damned If You Don’t

“You can always count on Americans to do the right thing – after they’ve tried everything else.”

Winston Churchill

“Our policy is to create a national health service in order to ensure that everybody in the country irrespective of means, age, sex or occupation shall have equal opportunities to benefit from the best and most up-to-date medical and allied services available.

Winston Churchill

 

Veering away from the usual topics covered in this blog, I thought about some recent articles I saw about the attempt to repeal and replace, or to simply repeal the Affordable Care Act (ACA), which the current political regime wants to do.

The first article, in yesterday’s [failing] New York Times, warned that repealing the ACA would make it harder for people to retire early. Those who retire early, before reaching 65, can get retiree coverage from their former employers, but not many companies offer that coverage.

Those early retirees poor enough could turn to Medicaid, and everyone else would have to go to the individual market. Without the ACA, health care coverage would be more difficult to get, cost consumers more where available, and provide fewer benefits.

According to the article, if the ACA is repealed, retiring early would become less feasible for many Americans. This is called job-lock, or the need to maintain a job to get health insurance.

This is one of the concerns the ACA was supposed to address, in that it would reduce or eliminate job lock. Repealing the law could, according to the article, affect employment and retirement decisions.

The second article, from Joe Paduda, also from yesterday, reported that improving healthcare will hurt the economy, and Joe lays out the arguments for doing something or doing nothing to improve health care and what effect they would have on economic growth.

For example, Joe states that healthcare employs 15.5 million full time workers, or 1 out of every 9 job. In two years, this will surpass retail employment. As Joe rightly points out, those jobs are funded by employers and taxpayers. He suggests that some experts argue that healthcare is “crowding out” economic expansion in other sectors, thereby hurting growth overall.

But Joe also points out that by controlling health care costs, employment will be cut, and stock prices for pharmaceutical companies, margins for medical device firms, and bonuses at health plans will also be affected.

So, if cost control and increasing efficiency works, these lost jobs, reduced profits, and lower margins, Joe says, will hurt the economy. The economy will suffer if the health care sector is more efficient, and since healthcare is also a huge employment generator and an inefficient industry, fixing that inefficiency will reduce employment and growth.

Thus, the title of this article, “Damned if you do, damned if you don’t.”

But wait, there’s more.

Yesterday, a certain quote has been making the rounds through the media. It was uttered by Number 45. “Nobody knew health care could be so complicated.”

Yes, it is complicated and complex, but does it have to be so? If we consider the second Churchill quote above, and realize that the UK, France, Germany, Canada, and many other Western countries have some form of single payer, then one must conclude that it is only the US that has complicated and made too complex, the providing of health care to all of its citizens.

There are many reasons for this, which is beyond the scope of this article or blog, but there is one overriding reason for this complexity…GREED. Not the greed of wanting more of one thing, but the greed of profit, as one executive from an insurance company stated recently.

This brings me to the last of the articles I ran across yesterday. It was posted on LinkedIn by Dave Chase, founder of the Health Rosetta Institute. He cited a segment on the Fox News Channel’s Tucker Carlson program, in which Carlson interviewed a former hospital president who said that pricing was the main problem with the US healthcare system.

Mr. Chase does not solely rely on Carlson’s guest in his article, but cites other experts in the field as evidence that pricing failure is to blame.

If we are to except this as true, then it buttresses my point that the overriding problem is greed, for what else is the failure to control prices but a symptom of greed inherent in the American health care system, and something that does not exist elsewhere in the Western world.

Which brings me to Churchill’s first quote above. Since we Americans have tried the free market system of health care wanting, and have tried a reformed free market system, perhaps it is time to go all the way to a government-sponsored, Medicare for All, single payer system.

The bottom line is: we’re damned if we do, damned if we don’t. The question is, which is the lesser of two evils.

UPDATE: Here is Joe’s take on what will happen to the ACA in the next two years. I agree with his assessment.

Americans Forego Treatment Due to Debt: Where is Medical Travel?

A report from the Kauffman Family Foundation, as mentioned in last week’s The Atlantic, stated that more than a quarter of Americans indicated that someone in their family is struggling to pay medical debt.

Higher rates of individuals are found among low-income and uninsured people, and many are not suffering from chronic illnesses, but rather from sudden or one-time illnesses, according to Gillian B. White.

This isn’t surprising, Ms White writes, given the state of most Americans’ finances. She says that most people are ill-prepared to deal with any financial shock.

Another report cited in her article from the J. P. Morgan Chase Institute (hey, didn’t they cause some of the financial shock Americans are experiencing?), looks at how medical costs factor into household financial instability.

They looked at 250, 000 Chase checking accounts where they could categorize about 80 percent of the expenditures, and found that for a median-income household (around $57,000 a year), expenses fluctuated by an average of 29 percent, or $1,300 month to month.

The authors of the study examined extraordinary medical expenses: large (more than $400 and more than 1 percent of annual income) and unusual ( falling more than two standard deviations outside a normal household’s spending for a month).

40 percent of middle-class and older families faced an extraordinary expense of $1,500 or more due to a medical expense, and around 16 percent of middle-income households had one large expense during a one year period. The authors found that these expenses tended to show up when they experienced an uptick in income.

Ms. White concludes her article by debunking the idea that having Americans spend a significant amount of their own money up front will encourage them to shop around for better health care deals. The reality, she states, is that they will forego treatment if they cannot afford it.

So What Does This Mean For You?

Well, for those in the medical travel industry it means that you need to focus on getting those middle-class families to get their treatment abroad where the costs are lower, and to concentrate less on cosmetic, plastic, reconstructive and augmentation surgeries, fancy medical treatments of dubious value, and concentrate on offering the kinds of treatments Americans are foregoing.

Debating whether or not certifications are valid or worth the paper they are printed on, is a nice academic exercise, but real people are skipping vital medical care while you debate and hold conferences around the world.

I’ll say this again: the market will not come to you, you must go to the market.

ACA Repeal Opens Up Medical Travel: A Second Look

Note: Here is Laura’s second article on repeal of the ACA and its’ impact on medical travel. She breaks the article down by areas of the healthcare industry that will be affected by repeal and that might benefit from medical travel.

Repeal of Affordable Care Act Impacts International Medical Travel
by Laura Carabello

wphealthcarenews.com- The repeal of the Affordable Care Act (ACA) has been met with considerable market uncertainty. As the transition gets underway, many Americans will be scrambling to access affordable, quality care.

Fortunately, the international medical travel industry -“Travel for Treatment” – may finally gain the attention it deserves from the American public and U.S. employers. Experts predict that the number of Americans traveling abroad for medical care or episodes of treatment is expected to increase 25 percent annually over the next decade.

Medical travelers are likely to come from every market sector: the growing ranks of uninsured individuals, self-insured employers facing higher healthcare expenditures, disenfranchised Medicaid beneficiaries, as well as Medicare enrollees with high out-of-pocket expenditures and the loss of coverage for preventive care.

Individual Consumers
Once “minimum essential healthcare coverage” is no longer mandated, the burden of payment will transfer onto healthcare providers and systems that will be forced to continue cost shifting onto the backs of paying customers.

Fewer insurance companies will be willing to underwrite coverage in the exchanges. In fact, many will leave the individual marketplaces altogether because of the potential loss of federal subsidies for both beneficiaries and insurance companies themselves.

Burdened by hefty cost-shifting, more Americans will be forced to pay out of their own pockets for surgeries or treatments in the U.S. Those who can afford a plane ticket will find it increasingly attractive to travel outside the country for quality, affordable options, such as joint replacement, cardio-thoracic surgery, oncology, bariatrics, and a host of other medical procedures, including treatment for Hepatitis C.

Low-Income (Medicaid) and Seniors (Medicare)
For Medicaid beneficiaries who remained optimistic that their home state would offer expanded coverage, their prospects look dim. The unraveling of the ACA will leave millions of the poorest and sickest Americans without insurance. Many states may either abandon Medicaid expansion or be forced to significantly redesign their programs to ensure that individuals below 400 percent of the federal poverty level can receive affordable healthcare coverage and services.

While these low-income families may not have cash reserves to fund expensive care in the U.S., they might be able to gather the resources to access needed surgeries overseas – and pay less than half of the US rates. Those who have emigrated from Latin American countries, in particular, will take advantage of opportunities to travel to their homelands to gain access to care that is substantially less expensive, and in a familiar setting.

The 57 million senior citizens and disabled Americans enrolled in Medicare could also benefit from accessing international medical travel. Under a full repeal of the ACA, seniors face higher deductibles and co-payments for their Part A, which covers hospital stays, and higher premiums and deductibles for Part B, which pays for doctor visits and other services. Medicare enrollees may also lose some of their free preventative benefits, such as screenings for breast and colorectal cancer, heart disease and diabetes. The opportunity to access quality care at lower costs – plus prescription drugs that are sold at far lower price points outside the US – present attractive options.

Employers
Healthcare will continue to be driven through employers, and cost pressures will push high-deductible plans, risk-based contracting and consumerism. In the United States today, even a negotiated, discounted rate for a total knee replacement at a local hospital may well exceed $45,000, $60,000, or more. The bottom line for self-insured employers – the coverage model that now dominates the marketplace: even after factoring in the cost of travel and accommodations for the patient and the companion, as well as waiving deductibles and co-pays as incentives to program adoption, the savings on surgical procedures such as joint replacement are significant.

Employers will also be more likely to send workers to emerging COEs outside the country in light of the many partnerships that are underway between US providers and foreign hospitals. These collaborative programs are bringing American ingenuity, sophisticated technology and advanced levels of care to institutions throughout the world.

Quality and safety standards at many institutions are now equal to or exceed US benchmarks. Many foreign hospitals are accredited by Joint Commission International, an extension of the US-based Joint Commission. Select hospitals outside the country adhere to US clinical protocols.

In fact, one organization that serves self-insured employers – North American Specialty Hospital in Cancun – even offers U.S. surgeons with US malpractice insurance who perform pre- and post-operative care in the US and then travel to Cancun for surgery. This ensures continuous engagement and continuity of care.

Hospitals
The ACA has contributed to hospitals experiencing higher volumes of insured patients, but those volumes would drop with the law’s repeal. It could also cause fewer people to keep prescription coverage, which would be modestly negative for the pharmaceutical industry.

Experts believe the majority of primary care physicians are open to changes in the law but overwhelmingly oppose full repeal, according to a survey published in The New England Journal of Medicine.

Insurance coverage for the 20 million people who obtained insurance from the exchanges sparked growth in patient numbers for hospitals, which offset lower payments. Without this, hospitals can expect deepening economic problems. This could lead to higher prices, and greater impetus among individuals to seek medical care outside of the U.S.

Key Destinations for International Medical Travel
With the growing ranks of uninsured, medical travel options are likely to emerge as a critical solution to healthcare cost woes. Hospitals and providers in nearby locations such as Latin America – known as the LAC Region – are likely to become destinations of choice: less expensive travel expenses, reduced language barriers, and cultural familiarity. Individuals and employers will require guidance in terms of choosing the right providers and determining costs to overcome the challenges that lie ahead.

To view the original article, click here.

Medical Travel Impact of ACA Repeal: The View from the Medical Travel Industry

Note: Laura Carabello’s Medical Travel Today has been the best partner a writer such as myself could have in getting my idea for medical travel out to the world, and it is only fitting that I return the favor. Here is an article written by Laura on a subject I have covered many times before.

Without the Affordable Care Act Will Medical Tourism Increase?
by Laura Carabello

mdmag.com- The impending repeal of the Affordable Care Act (ACA) has created uncertainty in the US healthcare marketplace. As the existing system is dismantled, and programs shut down or replaced, many Americans will be scrambling to access truly affordable, quality care.

This phenomenon has many implications for US physicians as people in every market sector begins to explore their options – from uninsured individuals to Medicare and Medicaid beneficiaries, as well as employees covered by self-funded companies.

If the ranks of the uninsured grow as a result of the demise of the ACA, medical travel options could represent an ideal solution. According to the research published in the Annals of Internal Medicine in January 24, 2017, even after implementation of the ACA, 15% of people with chronic diseases still lacked health insurance coverage and more than a quarter of them didn’t get a checkup in 2014. About 23% of people with chronic disease went without care because they found that costs were still too high.

This signals a potential boon for the international medical travel industry, further propelling the steady growth it has experienced in recent years. Medical travel was valued at $439 billion, and is projected to grow 25% a year over the next decade. In 2016, an estimated 1.4 million Americans traveled abroad for a medical procedure.

US physicians may also find that even Medicaid beneficiaries and Medicare enrollees will be lured to hospitals and providers outside the US.

For Medicaid patients who remained optimistic that their home state would offer expanded coverage, their hopes are fading. Repeal of the ACA will leave millions of the poorest and sickest Americans without insurance. Many states may either abandon Medicaid expansion or be forced to significantly redesign their programs to ensure that individuals below 400% of the federal poverty level can receive affordable healthcare coverage and services.

While these low-income families may not have cash reserves to fund expensive care in the US, they might have the resources – or may be able to gather support from family and friends – to access affordable surgeries overseas.

As for Medicare enrollees, including 57 million senior citizens and disabled Americans, higher premiums, deductibles and cost-sharing could spark a shift toward medical travel, especially given the country’s aging population and the likelihood that many seniors will require surgery.

Seniors could face higher deductibles and co-payments for their Part A, which covers hospital stays, and higher premiums and deductibles for Part B, which pays for doctor visits and other services. Under a full repeal, Medicare enrollees may also lose some of their free preventative benefits, such as screenings for breast and colorectal cancer, heart disease and diabetes.

Self-insured employers are actively seeking to lower health-care costs and increase their financial margins, and they may opt to steer workers to more cost-effective Centers of Excellence outside their home state or region.  As a result, and despite long-term relationships with their hometown physicians, patients will be incentivized to leave the country and access care at foreign hospitals that demonstrate quality care at lower cost.  By waiving deductibles or copays – and even paying cash rewards for choosing the medical travel option – employers will prompt patients to make the decision to travel.

Further raising patients’ comfort levels regarding medical travel is the increased quality of care now offered at international hospitals. This improvement is due to the success of knowledge transfer programs and training offered by US institutions and providers to hospitals worldwide. These collaborative efforts are bringing American ingenuity, sophisticated technology, administrative simplification and advanced techniques to hospitals in Mexico and throughout the Caribbean, as well as to locations as far away as Malta and the United Arab Emirates.

If the ACA is fully repealed, distinct changes in medical travel patterns are expected.

While Americans traditionally traveled out of the country to access elective procedures — dental care, esthetic surgeries or wellness care not typically included in their health benefits packages – they are now more likely to seek reliable medical treatment for complex conditions in destinations that are cross-border but only requiring three to four hours of travel time.

Hospitals and providers in the Latin America-Caribbean Region are likely to become destinations of choice for employers, as well as individuals. The lure of less expensive and shorter travel, reduced language barriers, and more cultural familiarity are appealing to all.  The challenge will be to access benchmarks for selecting providers, ascertaining costs, determining legal recourse regarding less-than-optimal outcomes and other issues. Without the guidance of a health plan or administrator, this process may be challenging to many.

With the steady rise of medical travel, a growing number of US physicians will encounter patients seeking consultation prior to getting treatment abroad. This means providing medical records or consulting directly with the international team.

Physicians will also encounter more patients who require follow-up care after undergoing a procedure in another country. In this case, it will be important to access treatment information and discharge papers from the overseas hospital, as well as records for blood work, X-rays or other screenings for use as a roadmap for the patient’s post-care. Physicians may also be reticent to perform additional services that may be required following care performed outside the US and not in their control.

Beyond the medical details, physicians need to understand every aspect of medical travel to deal with the increased competition and cost pressures. They may want to look into making improvements and upgrading services to justify the expense of treatments here in the United States. The strongest transformation will occur in what is today the most lucrative part of the industry: high-cost surgeries and procedures. Keep in mind that US treatment costs often justify travel elsewhere, despite additional travel and accommodation costs.

Going forward, physicians can play a role in guiding patients to seek the best possible care – wherever it is available — while helping them understand the benefits and potential risks of medical travel.

To view the original article, click here.

Trump Esta Loco: What it May Mean for Cross-Border Healthcare

In picking a fight with Mexico over the building of a wall on the US/Mexico border, the current illegitimate occupant of the Oval Office is not only threatening the relationship with our nearest neighbor to the South, but with our number two trading partner, as the following stats point out for 2016:

2016 : U.S. trade in goods with Mexico
Total 2016 Exports: 211,848.7
Imports: 270,647.2
Net: -58,798.6

Source: https://www.census.gov/foreign-trade/balance/c2010.html

By threatening to slap a 20% import tax on goods from Mexico, including his ties, this so-called businessman, will hurt the very farmers who voted for him, as well as the workers who buy their household goods from Walmart and other low-cost outlets, as many parts or food items are made or grown in Mexico. When I spoke at a medical tourism conference in Reynosa in 2014, we drove along the border area where the maquiladoras are located and saw that one of them makes frozen food that is sold across the border. Want to pay 20% more for that frozen TV dinner?

Then there is all that cerveza and tequila and mescal, not to mention avocados and guacamole that will cost more. Stay very thirsty my friends, because it will cost you more to drink with the most interesting man in the world, and all thanks to the least interesting man in the world.

What then does this mean for cross-border medical care?

If Herr Trump gets his way, not only will Mexican goods get more expensive, but if we get into a trade war, look for costs of medical care south of the border to go up as well, or even slow to a crawl or not at all. There is a hospital being built in Tijuana with the assistance of Scripps Health, and as I’ve written about in the past, the Insurance Company of the West already writes workers’ comp policies to include cross-border healthcare for their insured’s whose employees live in Mexico, but work in California.

Since the passage of NAFTA, trade between the US and Mexico has increased, and the towns along the border have benefitted from it. Back then, the talk of building a NAFTA superhighway was met with strong and fierce resistance (I was living in Texas at the time), but I realized that we already had one. It’s called Interstate 35, and runs from the Canadian border to the Mexican border, as does Interstate 5 on the West Coast.

In two earlier posts, I discussed a case in Arizona where the injured worker received two benefits, one from Mexico and one from Arizona (https://richardkrasner.wordpress.com/2014/01/20/nafta-work-comp-and-cross-border-medical-care-a-legal-view/) and (https://richardkrasner.wordpress.com/2015/02/04/nafta-work-comp-and-cross-border-medical-care-a-legal-view-update/).

So before you book that trip to Cancun for your tummy tuck or face lift, check to see if there is a 20% tax imposed on your flight, hotel, food, etc., from either the US or Mexican governments. If so, thank the orange-haired son of an orangutan.

donaldtrump-orangutan

All Quiet on the Medical Tourism Front

It’s been a while since I posted anything on medical travel, so you will forgive me for taking liberties with the title of Erich Maria Remarque’s novel about the First World War.

I guess the lull can be attributed to the shock of realizing that the current occupant of the White House is totally unfit and may be reckless, so the world is holding its collective breath to see what happens.

Or, it could be that you are waiting for the other shoe to drop, and by that, I mean, what will happen to the Affordable Care Act now that he has signed an executive order to dismantle it.

This much we do know. What we don’t know is will the Republicans in Congress repeal it completely, or will they replace parts of it. And what does you-know-who want? Canadian-style health care, as some have suggested he favors? And we also know that his nominee for Health and Human Services is against the ACA, and the Speaker of the House wants to kill Medicare and Medicaid.

Your guess is as good as mine. But whatever happens, it is certain that the industry needs to be prepared, because once people lose their coverage, they will need alternatives to high cost medical care here.

A total repeal would be catastrophic for health care in this country. Replacing it with something worse will also be bad for the health care industry, but may offer a way for medical travel to finally get a hearing with the American people, at least those who can afford to go abroad after losing their ACA coverage.

Those covered under Medicaid when their states expanded coverage will be the ones to lose the most, since they are the poorest and sickest. Those who purchased coverage through the exchanges and paid lower premiums than those who paid higher premiums, may be right for medical travel, if the industry goes after them.

Predictions are that should the ACA be repealed, premiums for everyone will go up. So, it is imperative that the industry be ready, willing, and able to handle the influx of new patients, and not just for boutique procedures and expensive treatments.

I said this once before, and I will say it again, the market will not come to you; you must go to the market. You must show Americans that there is an alternative to high cost care in the US, and for obvious reasons, only those locations within a three-hour flight will be possible.

BTW, if any of you need someone to work on a project for medical travel between the US and your country, let me know. You know me by now, so don’t be a stranger.

Interesting Article on PPO’s

Forbes.com has published an extensive article claiming that PPO’s have perpetrated a great heist [author’s words] on the American middle class.

According to the article,  trillions has been redistributed from the American workforce to the healthcare industry, creating an economic depression for the middle class.

The article consists of an interview conducted by author Dave Chase and Mike Dendy, Vice Chairman and CEO of Advanced Medical Pricing Solutions, Inc., a healthcare cost management company.

Here is the link to the full article:

http://www.forbes.com/sites/davechase/2016/09/05/have-ppo-networks-perpetrated-the-greatest-heist-in-american-history/#25489cd66d00

Is it any wonder why work comp is also so screwed up? Too many cooks (or is that crooks?) taking their “cut” out of the middle class.

But we keep insisting that we have the best health care system in the world, that our workers get the best care when they are injured and don’t need to have any alternatives explored to improve the care and treatment they get, and that the free market is the best way to provide health care. It’s free alright. Free for the greedy to become more greedy. But not for you and me.