Tag Archives: Health Care Costs

Single Payer A Bargain

Another shout out to Don McCanne for the following.

On Friday, the Nation published an article by Steffie Woolhandler, David Himmelstein, and Adam Gaffney.

You may recall these folks from my book review, “Health Care Under the Knife,” and it’s conclusion, “Some Final Thoughts on ‘Health Care Under the Knife.'”

Rather than regurgitate it for you, I am letting you read it in its entirety. But before I do, let me bring to your attention, an issue that is flying under the radar and has serious consequences for the country, our rights, and for the future of health care and other social programs.

Those lovable brothers from the Midwest, Charles and David Koch, are funding a group called ALEC, the American Legislative Exchange Council. One of the goals of ALEC is to call an Article V (of the Constitution, for those of you not familiar with the document) that allows for the creation of a convention in the event the government gets too much power.

I recommend you read up on it because it will radically alter our system of government for the benefit of the corporations and wealthy. Say goodbye to Social Security, Medicare, Medicaid, and direct election of Senators, to name a few goals.

That brings me to a quote I must let you read from a man who has no clue what he is talking about, and is emblematic of the dysfunction of his party. That man is former Oklahoma Sen. Tom Coburn, himself a physician who said the following regarding a convention and why he and others feel it is necessary.

“We’re in a battle for the future of our country…We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free.”

In case you missed that, let me repeat it:

“We’re in a battle for the future of our country…We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free.” Violent, ain’t he?

Pray tell, what country in western Europe is Marxist? Last I heard, none. Folks, these guys not only want to take away health care, they are still fighting the Cold War and godless, Marxist Communism.  No, what they are really about is defending a system, both economic and health care-wise, that cannot be sustained.

Here is the article in full:

Last week, Charles Blahous at the Koch-funded Mercatus Center at George Mason University published a study suggesting that Bernie Sanders’s single-payer health-care plan would break the bank. But almost immediately, various observers—including Sanders himself—noted that according to Blahous’s own estimates, single payer would actually save Americans more than $2 trillion over a decade. Blahous doubled down on his argument in The Wall Street Journal, and on Tuesday, The Washington Post’s fact-checker accused Democrats of seizing “on one cherry-picked fact” in Blahous’s report to make it seem like a bargain.
The Post is wrong to call this a “cherry-picked fact”—it’s a central finding of the analysis—but it is probably right that single-payer supporters shouldn’t make too much of Blahous’s findings. After all, his analysis is riddled with errors that actually inflate the cost of single payer for taxpayers.
First, Blahous grossly underestimates the main source of savings from single payer: administrative efficiency. Health economist Austin Frakt aptly demonstrated the “bewildering complexity of health care financing in the United States” in The New York Times last month, citing evidence that billing costs primary-care doctors $100,000 apiece and consumes 25 percent of emergency-room revenues; that billing and administration accounts for one-quarter of US hospital expenditures, twice the level in single-payer nations; and that nearly one-third of all US health spending is eaten up by bureaucracy.
Overall, as two of us documented recently in the Annals of Internal Medicine, a single-payer system could cut administration by $500 billion annually, and redirect that money to care. Blahous, in contrast, credits single payer with a measly fraction of that—or $70 billion—in administrative savings.
Our profit-driven multi-payer system is the source for this outlandish administrative sprawl. Doctors and hospitals have to negotiate contracts and fight over bills with hundreds of insurance plans with differing payment rates, rules, and requirements. Simplifying the payment system would free up far more money than Blahous estimates to expand and improve coverage.
Next, Blahous lowballs the potential for savings on prescription drugs. He assumes that a single-payer system couldn’t use its negotiating clout to push down drug prices, ignoring the fact that European nations and the US Veterans Affairs system achieve roughly 50 percent discounts relative to the US private sector. (Single payer’s only drug savings, he argues, will come from shifting 15 percent of brand-name prescriptions to generics.) Hence Blahous foresees only $61 billion in drug savings in 2022, even though tough price negotiations would likely achieve threefold higher savings.
Third, Blahous underestimates how much the government is already spending on health care. For instance, he omits the $724 billion that federal agencies are expected to pay for employees’ health benefits over the 10 years covered by his analysis, which would simply be redirected to Medicare for All. He also leaves out the massive savings to state and local governments, which would save nearly $3.6 trillion on employee benefits and another $5.3 trillion on Medicaid and other health programs. Hence, much of the “new money” needed to fund Sanders’s reform is already being collected as taxes.
Yes, there will need to be some new taxes—albeit much less than Blahous estimates. But those new taxes would just replace—not add to—current spending on premiums, co-pays, and deductibles. Additionally, at least some of the new taxes would be virtually invisible. For instance, the $10 trillion that employers would otherwise pay for premiums could instead be collected as payroll taxes. Similarly, Medicare for All would relieve households of the $7.7 trillion they’d pay for premiums and $6.3 trillion in out-of-pocket costs under the current system.
It’s easy to get lost in the weeds here. But at the end of the day, even according to Blahous’s errant projections, Medicare for All would save the average American about $6,000 over a decade. Single payer, in other words, shifts how we pay for health care, but it doesn’t actually increase overall costs—even while providing first-dollar comprehensive coverage to everyone in the nation. The Post’s fact-checker is wrong: Single-payer supporters can and should trumpet this important fact.
Of course, the most important benefits of single payer are altogether invisible in economic analyses like the one performed by Blahous. No matter what injury or illness we faced, we would be forever freed from one great worry: the cost of our care. It’s hard to put a price tag on that kind of freedom. Yet, paradoxically, even the slanted analysis of a libertarian economist provides evidence that it would be fiscally responsible.
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Immigrants and Health – Two Studies

The following two articles come from Dr. Don McCanne’s Quote of the Day blog.

International Journal of Health Services
August 8, 2018
Medical Expenditures on and by Immigrant Populations in the United States: A Systematic Review
By Lila Flavin, Leah Zallman, Danny McCormick, and J. Wesley Boyd

Abstract

In health care policy debates, discussion centers around the often-misperceived costs of providing medical care to immigrants. This review seeks to compare health care expenditures of U.S. immigrants to those of U.S.-born individuals and evaluate the role which immigrants play in the rising cost of health care. We systematically examined all post-2000, peer-reviewed studies in PubMed related to health care expenditures by immigrants written in English in the United States. The reviewers extracted data independently using a standardized approach. Immigrants’ overall expenditures were one-half to two-thirds those of U.S.-born individuals, across all assessed age groups, regardless of immigration status. Per capita expenditures from private and public insurance sources were lower for immigrants, particularly expenditures for undocumented immigrants. Immigrant individuals made larger out-of-pocket health care payments compared to U.S.-born individuals. Overall, immigrants almost certainly paid more toward medical expenses than they withdrew, providing a low-risk pool that subsidized the public and private health insurance markets. We conclude that insurance and medical
care should be made more available to immigrants rather than less so.

From the Discussion

Many Americans, including some in the health care sector, mistakenly believe that immigrants are a financial drain on the U.S. health care system, costing society disproportionately more than the U.S.-born population, i.e., themselves. Our review of the literature overwhelmingly showed that immigrants spend less on health care, including publicly funded health care, compared to their U.S.-born counterparts. Moreover, immigrants contributed more towards Medicare than they withdrew; they are net contributors to Medicare’s trust fund.

Our research categorized immigrants into different groups, but in all categories, these studies found that immigrants accrued fewer health care expenditures than U.S.-born individuals. Among the different payment sources – public, private, or out-of-pocket – public and private expenditures were lower for immigrants, with immigrants spending more out-of-pocket. Differences decreased the longer immigrants resided in the United States.

While annual U.S. medical spending in 2016 was a staggering $3.3 trillion, immigrants accounted for less than 10% of the overall spending – and recent immigrants were responsible for only 1% of total spending. Given these figures, it is unlikely that restrictions on immigration into the United States would result in a meaningful decrease in health care spending. To the contrary, restricting immigration would financially destabilize some parts of the health care economy, as suggested by Zallman and colleagues, who found that immigrants contributed $14 billion more to the Medicare trust fund than they withdrew.

Fiscal responsibility is an important reason for the United States to provide insurance for newly arrived immigrants, as they could continue to enlarge the low-risk pool of healthy individuals that helps offset the cost of insuring high-risk individuals. Currently, under the ACA, undocumented immigrants cannot enroll in the state health care exchanges. If we are seeking to minimize costs, which would seem a major factor in the reasoning of policymakers who would deny immigrants care, then it makes financial sense to enroll individuals who will (on average) contribute more to the health care system than they withdraw. Healthy, young immigrants are precisely whom we should target for Medicaid enrollment, state exchanges, or private health insurance.

http://journals.sagepub.com/doi/full/10.1177/0020731418791963

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The New England Journal of Medicine
August 1, 2018
A New Threat to Immigrants’ Health — The Public-Charge Rule
By Krista M. Perreira, Ph.D., Hirokazu Yoshikawa, Ph.D., and Jonathan Oberlander, Ph.D.

The United States is making major changes to its immigration policies that are spilling over into health policy. In one such change, the Trump administration is drafting a rule on “public charges” that could have important consequences for access to medical care and the health of millions of immigrants and their families. The concept of a public charge dates back to 19th-century immigration law. Under current guidelines, persons labeled as potential public charges can be denied legal entry to the United States. They can also be prevented from adjusting their status from a nonimmigrant visa category (e.g., a student or work visa) to legal permanent resident status. In addition, if they become public charges within the first 5 years after their admission to the United States, for reasons that existed before they came to the country, in rare cases they can be arrested and deported. Immigrants and their families consequently have strong incentives to avoid being deemed public charges.

In evaluating whether a person is likely to become a public charge, immigration officials take account of factors such as age, health, financial status, education, and skills. The use of cash assistance for income maintenance (e.g., Supplemental Security Income or Temporary Assistance for Needy Families) and government-funded long-term care are considered in making these determinations. Other noncash benefits such as health and nutrition programs are specifically excluded from consideration, and use of cash-assistance benefits by the immigrant’s dependents is not currently factored in.

The Trump administration is proposing sweeping changes to these guidelines. A draft rule from the Department of Homeland Security (DHS) would substantially expand the definition of a public charge to include any immigrant who “uses or receives one or more public benefits.” Not just cash assistance but nearly all public benefits from federal, state, or local governments would be considered in public-charge determinations, including nonemergency Medicaid, the Children’s Health Insurance Program (CHIP), and subsidized health insurance through the marketplaces created by the Affordable Care Act (ACA); Medicare would be excluded. The DHS draft notes that in making these determinations, “having subsidized insurance will generally be considered a heavily weighted negative factor.” The broadened definition of public charge would also encompass food assistance (the Supplemental Nutrition Assistance Program [SNAP] and the Women, Infants, and Children Program [WIC]), programs designed to assist low-income workers (e.g., the Earned Income Tax Credit [EITC]), housing assistance (Section 8 vouchers), and the Low Income Home Energy Assistance Program. Moreover, not only immigrants’ use of public assistance but use of these programs by any dependents, including U.S.-born citizen spouses and children, would also be considered.

The potential impact of these changes is enormous. In 2016, about 43.7 million immigrants lived in the United States. If enacted, the new regulations would affect people seeking to move to the United States to be reunified with family members and to work, as well as lawfully present immigrants who hope to become legal permanent residents (green-card holders). One estimate suggests that nearly one third of U.S.-born persons could have their use of public benefits considered in the public-charge determination of a family member. This includes “10.4 million citizen children with at least one noncitizen parent.” Notably, unauthorized immigrants are not the primary target of the draft rule, since they are already ineligible for most federally funded public assistance. Instead, lawfully present immigrants would bear the brunt, as well as persons living in “mixed-status” families (those in which some members are citizens and others are not) and persons living abroad who wish to immigrate to the United States.

We believe that the draft public-charge regulation represents a substantial threat to lawfully present immigrants’ access to public programs and health care services. What modifications may be made is uncertain — after the rule is formally proposed, there will be a public comment period, and revisions could be made before it is finalized. But if this rule takes effect, it will most likely harm the health of millions of people and undo decades of work by providers nationwide to increase access to medical care for immigrants and their families.

https://www.nejm.org/doi/full/10.1056/NEJMp1808020?query=featured_secondary

Cayman Islands Hospital Delivers Lower Cost Care

This morning’s post by fellow blogger, Joe Paduda, contained a small paragraph that linked to an article in the Harvard Business Review (HBR) about a hospital in the Cayman Islands that is delivering excellent care at a fraction of the cost.

Joe’s blog generally focuses on health care and workers’ comp issues, and has never crossed over into my territory. Not that I mind that.

In fact, this post is a shoutout to Joe for understanding what many in health care and workers’ comp have failed to realize — the US health care system, which includes workers’ comp medical care, has failed and failed miserably to keep costs down and to provide excellent care at lower cost.

That the medical-industrial complex and their political lackeys refuse to see this is a crime against the rights of Americans to get the best care possible at the lowest cost.

As I have pointed out in previous posts, the average medical cost for lost-time claims in workers’ comp has been rising for more than twenty years, even if from year to year there has been a modest decrease, the trend line has always been on the upward slope, as seen in this chart from this year’s NCCI State of the Line Report.

The authors of the HBR article asked this question: What if you could provide excellent care at ultra-low prices at a location close to the US?

Narayana Health (NH) did exactly that in 2014 when they opened a hospital in the Cayman Islands — Health City Cayman Islands (HCCI). It was close to the US, but outside its regulatory ambit.

The founder of Narayana Health, Dr. Devi Shetty, wanted to disrupt the US health care system with this venture, and established a partnership with the largest American not-for-profit hospital network, Ascension.

According to Dr. Shetty, “For the world to change, American has to change…So it is important that American policy makers and American think-tanks can look at a model that costs a fraction of what they pay and see that it has similarly good outcomes.”

Narayana Health imported innovative practices they honed in India to offer first-rate care for 25-40% of US prices. Prices in India, the authors state, were 2-5% of US prices, but are still 60-75% cheaper than US prices, and at those prices can be extremely profitable as patient volume picked up.

In 2017, HCCI had seen about 30,000 outpatients and over 3,500 inpatients. They performed almost 2,000 procedures, including 759 cath-lab procedures.

HCCI’s outcomes were excellent with a mortality rate of zero — true value-based care. [Emphasis mine]

HCCI is accredited by the JCI, Joint Commission International.

Patient testimonials were glowing, especially from a vascular surgeon from Massachusetts vacationing in the Caymans who underwent open-heart surgery at HCCI following a heart attack. “I see plenty of patients post cardiac surgery. My care and recovery (at HCCI) is as good or better than what I have seen. The model here is what the US health-care system is striving to get to.

A ringing endorsement from a practicing US physician about a medical travel facility and the level of care they provide.

HCCI achieved these ultra-low prices by adopting many of the frugal practices from India:

  • Hospital was built at a cost of $700,00 per bed, versus $2 million per bed in the US. Building has large windows to take advantage of natural light, cutting down on air-conditioning costs. Has open-bay intensive care unit to optimize physical space and required fewer nurses on duty.
  • NH leverage relations with its suppliers in India to get similar discounts at HCCI. All FDA approved medicines were purchased at one-tenth the cost for the same medicines in the US. They bought equipment for one-third or half as much it would cost in the US.
  • They outsourced back-office operations to low-cost but high skilled employees in India.
  • High-performing physicians were transferred from India to HCCI. They were full-time employees on fixed salary with no perverse incentives to perform unnecessary tests or procedures. Physicians at HCCI received about 70% of US salary levels.
  • HCCI saved on costs through intelligent make-versus-buy decisions. Ex., making their own medical oxygen rather than importing it from the US. HCCI saved 40% on energy by building its own 1.2 megawatt solar farm.

And here is the key takeaway:

The HCCI model is potentially very disruptive to US health care. Even with zero copays and deductibles and free travel for the patient and a chaperone for 1-2 weeks, insurers would save a lot of money. [Emphasis mine]

US insurers have watched HCCI with interest, but so far has not offered it as an option to their patients. A team of US doctors came away with this warning: “The Cayman Health City might be one of the disruptors that finally pushes the overly expensive US system to innovate.”

The authors conclude by stating that US health care providers can afford to ignore experiments like HCCI at their own peril.

The attitude towards medical travel among Americans can be summed up by the following from Robert Pearl, CEO of Permanante Medical Group and a clinical professor of surgery at Stanford: “Ask most Americans about obtaining their health care outside the United States, and they respond with disdain and negativity. In their mind, the quality and medical expertise available elsewhere is second-rate, Of course, that’s exactly what Yellow Cab thought about Uber. Kodak thought about digital photography, General Motors thought about Toyota, and Borders thought about Amazon.”

Until this attitude changes, and Americans drop their jingoistic American Exceptionalism, they will continue to pay higher costs for less excellent care in US hospitals. More facilities like HCCI in places like Mexico, Costa Rica, the Caymans, and elsewhere in the region need to step up like HCCI and Narayana Health have. Then the medical-industrial complex will have to change.

Justice Dept. Says Crucial Provisions of Obamacare Are Unconstitutional – The New York Times

The following article should alarm every decent American, especially those who wants to see every American have health care that does not eat into their life savings or cause them to go into debt.

Your humble author is one of them and may also be affected if this draconian decision is upheld by the courts and the Supreme Court. Thanks Bernie Bots and Steiners…thanks for giving us Justice Gorsuch by not voting or not voting for the Democratic candidate two years ago.

For what this will mean to Americans, here is Dr. Don McCanne’s take on it:

“Amongst the more important provisions of the Affordable Care Act were the requirements for guaranteed issue and community rating. For individuals with preexisting conditions, insurers could not deny them coverage nor could they charge them higher premiums than are charged for others in the same age group. This corrected two of the most serious defects in the individual insurance market that existed before enactment of ACA and made insurance available to many who otherwise could not purchase the plans.

Now Attorney General Jeff Sessions says that he will no longer defend these provisions. If the courts uphold his position, individuals with significant health care needs may find insurance with adequate benefits to be either unaffordable or not even available to them. Then concepts such as “universal” or “affordable” become moot.

How does this compare to our traditional Medicare program? The courts have already ruled that Part A of Medicare – the hospital benefit -is mandatory and must be accepted if the individual also accepts Social Security benefits. However, this does not apply to Part B – the physician benefits – nor to Part D – the drug benefits. Thus the courts have ruled that the government can require certain mandates in health care, but it also demonstrates that our current Medicare program needs to be improved, for this and for a great many other reasons. So a single payer, improved Medicare for all should be able to pass constitutional muster.

Once we have an improved Medicare that covers everyone, instead of thinking of it as some sort of unwanted government mandate, most of us would think of it as an automatic program ensuring health care financing for all of us – one that we have earned though our individual contributions based on ability to pay – guaranteed, affordable health care forever.”

Typical Family of Four Now Paying Over $28,000 for Health Care

A report issued Monday by Milliman indicated that the cost of health care for a typical American family covered by the average employer-sponsored preferred provider organization (PPO) plan in 2018 is $28,166, as per the Milliman Medical Index (MMI).

Broken down into component parts, this represents the following costs:

2018 MMI Components of Spending
31% ($8,631) – Inpatient
19% ($5,395) – Outpatient
29% ($8,275) – Professional services
17% ($4,888) – Pharmacy
4% ($995) – Other (Home health, ambulance, DME, prosthetics)

The key takeaway from the report is that employers are paying more; but employees are paying a lot more.

The health care expenditures are funded by employer contributions to health plans and by employees through their payroll deductions and out-of-pocket expenses incurred when care is received, according to the report.

The report continues that they are seeing over the long-term, and that employees are paying a higher percentage of the total, with employee expenses increasing 5.9%, and employer expenses increasing 3.5% in 2018.

The total cost of health care is shared by both the employer and employee for a family of four, the MMI stated, which breaks down to three categories:

1. Employer subsidy. Employers that sponsor health plans subsidize the cost of healthcare for their employees by allocating compensation dollars to pay a large share of the cost.
2. Employee contribution. Employees who choose to participate in the employer’s health benefit plan typically also pay a substantial portion of costs, usually through payroll deduction.
3. Employee out-of-pocket cost at time of service. When employees receive care, they also often pay for a portion of these services via health plan deductibles and/or point-of-service copays.

The relative proportions of medical costs for 2018 are:

56% ($15,788) – Employer contribution
27% ($7,674) – Employee contribution
17% ($4,704) – Employee out-of-pocket

Looking at this another way, employees are paying a total of 44% as either a contribution or out-of-pocket, which adds up to $12,378, compared to the employers’ 56% and $15,788, respectively.

As health care gets more expensive, it will naturally lead to higher costs for employers, but also higher costs for employees. And as has been happening more commonly, employers are shifting more of the costs onto the employees. With stagnant wages, as reported daily in the news, this is going to be a problem for those families caught in the squeeze between rising costs for medical care and stagnant wages.

This would be resolved by creating a single payer health care system that will save both employers and employees money,

 

State of the Line Report — 2018 Edition

It’s May, and you know what that means. It means NCCI has held its Annual Issues Symposium, and the State of the Line Report, presented by Chief Actuary Kathy Antonello.

But this year I am going to do something a little different. I am going to compare the data presented this year with some of the data from last year and the year prior, so that the reader can see how much change there has been year over year from the 2017 and 2018 reports. Last year’s data and the year before was presented in my post, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 2.”

First up, this year’s WC Average Medical Lost-Time Claim Severity in Chart 1.

Chart 1.

As you can see, there has been another slight increase in the lost-time claim severity from the 2016 to 2017 preliminary data. In 2016, the average medical lost-time claim severity was $28,800 and the preliminary 2017 severity was $29,900, an increase of nearly $1,000.

The key takeaway here is that NCCI estimates that the AY 2017 average medical lost-time claim severity is 4% higher than the corresponding AY 2016 value.

Looking back at the data from last year’s report, we can compare the preliminary 2016 data with the actual 2016 data reported above. Chart 2 exhibits last year’s data.

Chart 2.

Source: NCCI’s Financial Call Data; p Preliminary based on data valued as of 12/31/2016.

In chart 2, the preliminary medical lost-time claim severity was $29,100 and represented a 5.0% change from 2015. In 2015, it was $27,700 and saw a -1.4% change from the prior year.

This is borne out in the next chart, Chart 3, where the 2015 average medical lost-time claim severity was estimated at $28,500, or a 1.0% change from 2014.

Chart 3.

 

Next, we look at the cumulative change in medical lost-time claim severity (1997-2017p), as highlighted in chart 4.

Chart 4.

In this chart, the cumulative change in medical lost-time claim severity is contrasted with the cumulative change in the Personal Health Care Chain-Weighted Price Index (1997-2017p). The PHC is a proxy for medical care price inflation that responds to changes in the blend of different medical services over time.

From the chart, the cumulative change in medical lost-time claim severity has strongly outpaced the change in the PHC index in that same period, indicating that while the PHC index is nearly flat, the medical lost-time claim severity is rising and will continue to do so.

According to NCCI, the medical lost-time claim costs have risen faster, +175% , than the PHC index of +61%, over the period from 1997-2017, with most of the gap occurring in the years before the recession.

However, looking at the data from last year’s report, as shown in chart 5, the cumulative change in medical lost-time claim severity was much higher, as estimated by NCCI, which was +227%.

Chart 5.

Sources: NCCI’s Financial Call Data; Centers for Medicare & Medicaid Services ; p Preliminary based on data valued as of 12/31/2016.

The next chart, chart 6, compares the relative growth rates between medical severity and price inflation.

Chart 6.

On the left-hand side, the medical lost-time claim severity grew approximately 4.5% per year faster than the medical care prices for the same period.

On the right-hand side however, the change in the medical lost-time claim severity and the medical care price tracked one another in the same ten-year period. Yet, there is a slight rise in the medical lost-time claim severity after 2015 continuing into 2017.

The key takeaways as NCCI reported were that much of the gap between the cumulative changes in medical lost-time claim severity and the PHC index since 1997 arose from the years prior to 2007. And that both the severity and care prices have grown at approximately the same rate, as indicated above.

Lastly, the next chart, chart 7, indicates the average annual change from 2012 to 2016 for all NCCI states. Note: all states in grey are either monopolistic states or are intrastate-rated states that do not report data to NCCI.

Chart 7.

The state with the highest average annual change was Nevada, and the states with the lowest average annual change, were Maine, Massachusetts, North Carolina, Oregon, and Rhode Island.

The key takeaways here are that the average annual change in medical lost-time claim severity was +2.3% from the four years between 2012 and 2016. The increase in Nevada, NCCI stated, was due to a very large claim that occurred in 2016. The decrease in North Carolina was due to a combination of large claim activity in 2012 and a change in the medical fee schedule in 2013 and 2015.

But it is apparent that most states experienced a change at, or below 10% from 2012 to 2016. And if we are to believe that claim frequency is decreasing, then we must ask ourselves, why is the medical lost-time claim severity rising, as seen in chart 1, one hundred dollars short of $30,000.

One answer we have already examined is the cumulative change in medical lost-time claim severity from 1997 to 2017, although preliminary as of this week’s report.

However, what is not shown is what lies behind those numbers, i.e., what is happening in each claim to cause the severity to rise, or not rise. There is no indication, as there never is, as to what amount of the rise is due to the cost of surgery or to other claim factors such as hospital bills, ancillary services such as medical equipment, anesthesia services, any testing performed, etc. In short, we don’t know if what is causing health care costs generally to rise also is affecting the medical lost-time claim severity.

As I have stated before in this blog, workers’ compensation must look to other alternatives to help bring down the medical lost-time claim severity. This cannot be achieved by looking between all three coasts. It must include looking at less expensive, but equally advanced medical care elsewhere. Otherwise, the gap will only get wider over time.

 

 

 

 

Vermont becomes first state to permit drug imports from Canada – POLITICO

In a rebuff to the current neo-liberal regime and its recent plan to tackle drug prices, the State of Vermont became the first in the nation to allow cross-border purchasing of drugs from Canada. Makes sense because the border is not that far away.

Years ago, my late mother worked for a company here in Florida that facilitated drugs to come to patients from Canada, the UK and Israel.

But thanks to successful lobbying by a former Democratic Congressman from Louisiana who after leaving Congress became a lobbyist for the pharmaceutical industry, the government forbade the importation of Canadian drugs.

The measure is one of the most aggressive attempts by a state to tackle rising drug prices that critics say are crippling state finances.

Source: Vermont becomes first state to permit drug imports from Canada – POLITICO