Tag Archives: Hospital Costs

One Implant, Two Prices. It Depends On Who’s Paying. | Kaiser Health News

Here is another example of our broken health care system and the way in which health care has become a cash cow for hospitals, physicians, medical device manufacturers, which includes implant manufacturers, and pharmaceutical companies.

The following article from Kaiser Health News is eerily familiar to a piece I wrote a while back about a man who needed a hip replacement, and went to Belgium to get it, and discovered that the hip they gave him was made near his home in the US, but was considerably cheaper in Belgium than in the US, even though it was the same hip he would have gotten if he had the surgery locally.

That the same implant should come with two different costs, either because it is implanted in the US, or in a foreign country, or in the case below, because of the type of surgeries performed, is illogical and a symptom of a dysfunctional, profit-driven health care system that is out of control.

Here is the article link:

Breast implants — used for both cancer and cosmetic surgeries — give a glimpse into how hospitals mark up prices of medical devices to increase their bottom lines.

Source: One Implant, Two Prices. It Depends On Who’s Paying. | Kaiser Health News

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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.

Hospital Outpatient Payments Rising — Again

The Workers’ Compensation Research Institute (WCRI) released a study today that indicated that hospital outpatient payments were higher and growing faster in states with percent-of-charge-based fee regulations or no fee schedules.

This study is an annual study that compares hospital payments for a group of common outpatient surgeries in workers’ compensation across 35 states from 2005 to 2016.

According to WCRI’s executive vice president and counsel, Ramona Tanabe, “Rising hospital costs continue to be a focus for public policymakers and system stakeholders in many states.”

The study found that states with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules.

Percent-of-charge-based states were 30 — 196% higher than median of the states with fixed-amount fee schedules in 2016.

States without fee schedules also had higher payments per episode; 38 — 143% higher than the median of fixed-amount states in 2016.

Lastly, WCRI found that hospital payments per episode in most states with percent-of charge-based fee regulations or no fee schedules, grew faster than states with fixed-amount fee schedules.

The study also compared payments for workers’ comp with Medicare rates for the most common group of surgical procedures across states. The following chart highlights the variation in the difference between average workers’ comp payments and Medicare rates. The variation was as low as 38%, or $2,012 below Medicare in Nevada, and as high as 502%, or $21,692 above Medicare in Alabama.

Source: WCRI

So, what does this mean?

It means that hospital outpatient payments for the most common group of surgical procedures in Workers’ Comp are not decreasing, and are likely adding to the slow, but steady rise in the overall total average medical cost for lost-time claims, a development I have followed for some time now with the release of NCCI’s State of the Line Reports.

This is not the first time I have discussed this topic, and probably won’t be the last, as I keep reminding you that surgical costs for most common workers’ comp surgeries are a fraction of the cost here in the US in countries that provide medical travel services.

If this study is right, wouldn’t you rather pay for a surgical procedure in Costa Rica, for example, that costs $12—$13,000, than paying $21,692 in Alabama? Eighteen out of thirty-five states listed on the above chart have higher payments than the median of 100. This represents 51.4% of all the states examined in the study. Just more than half.

And this idea of medical travel is stupid, ridiculous, and a non-starter? Ok, keep shelling out more money for hospital outpatient procedures. After all, it ain’t your money, is it?

To download this study, visit WCRI’s website at https://www.wcrinet.org/reports/hospital-outpatient-payment-index-interstate-variations-and-policy-analysis-7th-edition.

CMS’s Price Transparency Trick

Shoutout to Promed Costa Rica for the following article posted today on Facebook.

http://www.modernhealthcare.com/article/20180425/NEWS/180429939?utm_source=modernhealthcare&utm_medium=email&utm_content=20180425-NEWS-180429939&utm_campaign=am

CMS has been for decades the crux of the problem with the American health care system, Every model, program and scheme they have implemented addresses only the symptoms, but not the cause of the disease the patient is suffering from.

As I wrote yesterday, and the week before in my review of Health Care under the Knife, the real cause of the complexity, confusion, dysfunction and overall failures of the health care system is the system itself — meaning the economic system that has proletarianized physicians, commodified, corporatized, financialized, and monopolized health care in this country.

So now, this talk of price transparency, when the cost of care is already too high compared to other Western nations, is just a placebo being administered to a dying patient — the American health care system.

Remember these words:

“America’s health care system is neither healthy, caring, nor a system.”

Walter Cronkite

GOP Tax Reform: Say Goodbye to the Middle Class

As a student of American Social history, I am acutely aware that for much of the 241 years of the Republic, the majority of the American people were not what we today would call “Middle Class.”

In fact, they were cash poor, dirt farmers, tradesmen, owning very little except what they could carry on a horse, mule, or in a wagon as they migrated west in search of better opportunities.

Until the New Deal, the Middle Class as we know it did not exist in such great numbers. True, there was a middle class in the cities and towns of the East Coast and Midwest, but most of them were descendants of immigrants from the 17th and 18th centuries, and rose steadily into the middle class as the nation’s economy shifted from a mercantile to an industrial economy in the first half of the 19th century.

Consider the following quotes from three US presidents regarding the power of money and corporations. You will notice that none of them are wild-eyed radicals in the least.

“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.”

Thomas Jefferson

“Mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges… which are employed altogether for their benefit.”

Andrew Jackson

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed.”

Abraham Lincoln

So it is no surprise that the Republican Party is ramming down the throats of the American middle class, a tax reform bill that will effectively wipe out the remaining members of the middle class, and redistribute the wealth to those making over $75,000 and those at the very top, the oft-mentioned 1%.

My fellow blogger, and unsuccessful Democratic candidate for County Legislator in upstate New York, Joe Paduda, wrote a very potent analysis of the GOP tax scam legislation. Yes, I did call it a scam, but that is not my word. Others have used it in the past few days in an effort to derail and stop it from passing.

Besides destroying the middle class, it will as Joe points out, bankrupt the health care system. Then we will have to go all the way to a single-payer system just to get the whole thing working again.

Here is Joe’s piece in its entirety:

The tax bill’s impact on healthcare or; If you like your cancer care, you can’t keep it.

        

The GOP “tax reform” bill will directly and significantly affect healthcare. Here’s how.

It removes the individual mandate, but still requires insurers to cover anyone who applies for insurance. So, millions will drop coverage knowing they can sign up if they get sick.

How does that make any sense?

Here’s the high-level impact of the “tax bill that is really a healthcare bill”:

The net – healthcare providers are going to get hammered, and they’re going to look to insured patients to cover their costs.

The real net – The folks most hurt by this are those in deep-red areas where there is little choice in healthcare plans, lots of struggling rural hospitals, and no other safety net.  Alaskans, Nebraskans, Iowans, Wyoming residents are among those who are going to lose access to healthcare – and lose health care providers.

Here are the details.

According to the Commonwealth Fund, “repeal would save the federal government $338 billion between 2018 and 2027, resulting from lower federal costs for premium tax credits and Medicaid. By 2027, 13 million fewer people will have health insurance, either because they decide against buying coverage or can no longer afford it.”

Most of those who drop coverage will be healthier than average, forcing insurers in the individual market to raise prices to cover care for a sicker population. This is how “death spirals” start, an event we’ve seen dozens of times in state markets, and one that is inevitable without a mandate and subsidies.

For example, older Americans would see higher increases than younger folks. Here’s how much your premiums would increase if you are in the individual marketplace.

So, what’s the impact on you?

Those 13 million who drop insurance, which include older, poorer, sicker people, will need coverage – and they’ll get it from at most expensive and least effective place – your local ER. Which you will pay for in part due to cost-shifting.

ACA provided a huge increase in funding for emergency care services – folks who didn’t have coverage before were able to get insurance from Medicaid or private insurers, insurance that paid for their emergency care.

From The Hill:

[after ACA passage] there were 41 percent fewer uninsured drug overdoses, 25 percent fewer uninsured heart attacks, and over 32 percent fewer uninsured appendectomies in 2015 compared to 2013. The total percent reduction in inpatient uninsured hospitalizations across all conditions was 28 percent lower in 2015 than in 2013. Between 2013 and 2015, Arizona saw a 25 percent reduction in state uninsured hospitalizations, Nevada a 75 percent reduction, Tennessee a 17 percent drop, and West Virginia an 86 percent decline.

If the GOP “tax bill” passes, hospital and health system charges to insureds (yes, you work comp payer) are going to increase – and/or those hospitals and health systems will go bankrupt.

What does this mean?

It means we of the middle class had a very good run, but the ruling class has spoken, and they want us to disappear, or at least shrink to the point that we become unimportant to their pursuit of greater wealth. Why else would the donor class of the Republican Party, the Koch Brothers, the Mercer family, Sheldon Adelson, and the rest of their donors threaten members of Congress with no more funds for their re-election if they fail to pass this bill?

There is a word for that, it’s called Extortion. And we are the sacrificial lambs.

Top 10 Orthopedic Hospitals by Procedure

Last year, Christmas Eve, to be exact, I wrote a short post about the top ten hospitals for total knee replacement under $50,000.

This year, I’d like to expand on that and discuss the top ten orthopedic hospitals outside of the US for such procedures as Arthroscopy (knee or shoulder), Disc Replacement, and Rotator Cuff Repair.

The website I linked to in my post last year, Archimedicx.com, is the same website I used now to illustrate the difference between costs in the US and elsewhere in the world.

This website is by no means the definitive source of such information. There are other websites that provide similar prices and are only ballpark figures, not actual quotes, or firm prices. Archimedicx’s website will give you a quote once you have chosen from among a list of hospitals you searched for, depending on what procedure you want to have.

I have limited the discussion here to only the three I mentioned above, as arthroscopic procedures for both knees and shoulders, resulted in the same hospitals being displayed.

The price range column indicates those hospitals who charge the amount stated or less, as the website allows an individual to choose the price range they want.

In the table below, the quality score is the ranking algorithm that generates a unique quality score for each procedure in each analyzed hospital (on a scale of 1 to 5). For the sake of clarification, a certain hospital can have different quality scores, depending on the procedure or treatment in question.

 

Table – Top Ten Orthopedic Hospitals by Procedure

top-ten-ortho-hosp

For each procedure examined, there were at least a few hundred other hospitals that one could look at, but I only wanted the top ten, as you see, ranked by quality scores. There are no doubt other hospitals on the website that may score better on other websites, or can provide these procedures for far less than they do.

The idea here is to point out that the US is more expensive than others, and as the following chart shows, we are dead last in terms of care.

nhs-best-system

But it is sad that Americans do not realize this and do what the other countries in that chart have done, provide health care to all.

It is also sad that our system for treating on the job injuries also does not allow people to seek medical care outside of their states or the country. Only two states do that, Washington, and Oregon, but as I’ve said before, there have been exceptions.

Now with a new administration seeking to destroy the social safety net and the ACA, we may see more case shifting and more crowded ER’s and not enough medical personnel to treat them.

And for what?  The commodification of health care for those who can afford it, and for the profit of those who pay for it.

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.