Tag Archives: Medical Costs

At the Bottom: A Work Comp Perspective on the Need for Single Payer

It is rare when someone from the work comp blogosphere crosses into health care and advocates that the US learn from other countries that have universal health care, in whatever form it takes in those countries.

Tom Lynch of Lynch Ryan’s Workers’ Comp Insider blog, did just that with a very detailed analysis of the US health care system compared to that of other Organization for Economic and Cooperative Development (OECD) countries.

Here is Tom’s article:

What does a nation owe its citizens with respect to health care?

For nearly all members of the Organization for Economic and Cooperative Development (OECD), the answer is guaranteed, high-quality, universal care at reasonable, affordable cost. For OECD founding member America, the answer seems to have become an opportunity to access care, which may or may not be of high-quality at indeterminate, wildly fluctuating and geographically varying cost.

It is indisputable that the US devotes more of its GDP to health care than other countries. How much more? For that answer we can turn to many sources, roughly all saying the same thing. The OECD produces annual date, as does the World Health Organization, among others. Another reliable and respected source is The Commonwealth Fund, which conducted a study of eleven high income OECD members including the US. The collection of health care cost data lags, so data from this study is mostly from 2014. Here is the cost picture:

As you can see, in 1980, US spending was not much different from the other ten OECD countries in the study. While high, it was at least in the same universe. But now, at 50% more than Switzerland, our closest competitor in the “how much can we spend” sweepstakes”, we might be forgiven for asking, “What in the name of Hippocrates happened?” As if this weren’t enough, the 2014 GDP percentage of spend, 16.6%, has now risen to nearly 18%, according to the CMS.

So, what do we get for all that money? We ought to have the highest life expectancy, the lowest infant mortality rate and the best health care outcomes in the entire OECD. But we don’t.

For many readers, it is probably galling to see both the UK and Australia at the top of the health care system performance measure and at the bottom of the spending measure. In the early 2000s, each of these countries poured a significant amount of money into improving its performance, and the results speak for themselves.

Consider all of this mere background to the purpose of this blog post.

Last week, we wrote about the terrible, 40-year stagnation of real wage growth in the US, pointing out that in that period real wages in 1982-1984 constant dollars have risen only 4.5%. But, as we have seen, health care spending did not follow that trajectory. This has resulted in tremendous hardship for families as they have tried to keep pace with rising health care costs. For, just as US health care spending has risen dramatically since 1980, so has what families have to pay for it.

To put this in perspective, consider this. Since 1999 the US CPI has risen 54%, but, as the chart above shows, the cost of an employer offered family plan has risen 338%. If a family’s health care plan’s cost growth had been inflation-based, the total cost to employer and employee would be $8,898 in 2018, not $19,616. In 2018, the average family in an employer-based plan pays 30% of the plan’s cost ($6,850), plus a $2,000 deductible, plus co-pays that average $20 whenever health care is accessed, plus varying levels of co-pays for drugs.

On top of all that is the enormous difficulty people have in trying to navigate the dizzying health care system (if you can call it that). American health care is a dense forest of bewildering complexity, a many-headed Hydra that would make Hesiod proud, a labyrinthine geography in which even Theseus with his ball of string would find himself lost.

With wages and health care costs growing ever farther apart, America has a crisis of epic proportion. Yet all we can seem to do is shout at each other about it. When do you think that will end? When will we begin to answer the question that this post began with: What does a nation owe its citizens with respect to health care? When will our nation’s leaders realize we can actually learn from countries like Australia, the UK, Switzerland and all the other high performing, low cost members of the OECD? Continuing on the present course is no longer a viable option.

 

Note: You may be questioning The Commonwealth Fund’s research. To put your mind at ease about that, here are the study sources:

Our data come from a variety of sources. One is comparative survey research. Since 1998, The Commonwealth Fund, in collaboration with international partners, has supported surveys of patients and primary care physicians in advanced countries, collecting information for a standardized set of metrics on health system performance. Other comparative data are drawn from the most recent reports of the Organization for Economic Cooperation and Development (OECD), the European Observatory on Health Systems and Policies, and the World Health Organization (WHO).

Link: http://workerscompinsider.com/2018/11/at-the-bottom-looking-up/

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Gauze: A Film by Suzanne Garber

Nearly a year ago, while channel surfing, I came across a short film being shown on my local South Florida Public Broadcasting System (PBS) station.

As I missed most of it, I was able to learn the name of the filmmaker from the credits, and saw that she had interviewed some of the leading names in the medical travel space.

One individual I saw listed in the credits was Keith Pollard, with whom I was connected with on LinkedIn, and had communicated over the years since I began blogging about medical travel. I reached out to Keith to ask him to put me in touch with the filmmaker, Suzanne Garber.

I later learned from Keith that before she gave Keith her permission to forward her email address to me, she wanted to know if I was legitimate. Keith vouched for me without hesitation, and I reached out to Suzanne.

Unfortunately, due to ownership of the rights to the film by PBS, it has taken nearly a year for me to get to see it. What follows is my review of her film, “Gauze Unraveling Global Healthcare”.

The film is a personal account of Suzanne’s exploration into the difference between US healthcare, with its bureaucracy and lack of transparency regarding cost to patients; plus its affordability, accessibility, and quality — the three characteristics of healthcare, according to Suzanne.

Suzanne had gone through some personal medical issues, and the film begins with her discussing statements she received that were very expensive. At one point, she describes how she was forced to sign a form at a hospital in order to get service that said she was responsible for the full amount if her insurance company refused to pay.

She asked the woman at the desk who gave her the form if she knew what it would cost her, and the woman replied that she did not know, so Suzanne said that she was signing away her right to know how much it could cost her.

Then Suzanne asked some of her friends the following question: where is the best healthcare?

Having been an executive credentialing hospitals for a company she was working for, Suzanne had vast experience visiting hospitals, and had personal experience of being admitted to a hospital in Spain as a child. She decided to go and visit some of the hospitals that cater to medical travel patients.

From 2014- 2015, she visited 24 countries, 174 hospitals, and interviewed over five dozen international healthcare experts. She wanted to know the answer to the following questions: Where to go, and where not to go?

But it was when she had a medical diagnosis of cancer that she traveled thousands of miles, flying from Philadelphia to Chicago, to Tokyo, and then to Bangkok, where she went to Bumrungrad Hospital. By that time, her position had been eliminated, she was unemployed and uninsured, so she took the chance and went.

She traveled to Singapore to get a second opinion with an orthopedist. A doctor there wanted to perform a bone density scan, and even though she brought along all of her MRIs, CAT scans, etc., the doctor had her go downstairs, wait forty-five minutes, and then go back upstairs to see the doctor after the results were entered into the computer.

In all, it cost Suzanne $29 dollars, not the amount she was quoted back in the US. And all this took one day.

As part of her journey, she visited the UK, India, and visited several hospitals in France. And what she found was that there is no one way to improve our healthcare, but it is possible. We need to ask questions, we need to contact our elected representatives, and we need to take responsibility for our healthcare.

A personal note: This film when shown on PBS last year, had a long list of names Suzanne interviewed. In addition to Keith Pollard, one other person, Rajesh Rao of IndUSHealth, was someone I met in 2014 at the ProMed conference in Miami Beach. Some other names in that list were familiar to me, but as of this screening, does not appear. One more comment, I was able to view the film online, but am not able to provide readers with a copy of it in this post.

This is a very important and timely film that should be viewed by both the health care industry and those in the workers’ compensation industry who have panned the idea of medical travel. The mere fact that Suzanne paid only $29 for a bone density scan, when she was told it would be $7,300 in the US, is not only criminal, it is insane to keep insisting that medical travel for workers’ comp is a stupid and ridiculous idea, and a non-starter, as one so-called expert has written.

When are you people in work comp going to wake up? You and your insurance carriers are being ripped off by an expensive medical-industrial complex. But you just go on doing the same things over and over again, and expect different results, or you boast that frequency is going down, yet medical costs are still too high. The choice is yours, but don’t keep making the same mistake.

I want to thank Suzanne for her patience in bearing with my periodic emails regarding my viewing the film, and for being courageous enough to put her personal struggles with health and health care front and center, and comparing it to our so-called health care system. I hope that Gauze Unraveling Global Healthcare will be seen by all those interested in better health care for all Americans, workers or not.

 

Health Care Costs Rising for Workers

Axios is reporting that health care costs for workers is rising while overall costs of employer-based health benefits is growing modestly from year to year.

This is slowly eating up all of the average workers wage increases, and then some, as reported by the Kaiser Family Foundation’s  2018 Employer Health Benefits Survey.

The survey covers the last ten years, from 2008 to 2018. Most of where the employees are paying for health care comes from deductibles, which has seen a +212% increase over that period, and is out of pocket. These costs, the survey said, is rising faster than inflation and wages.

Premiums for families have risen over this period +55%, while workers’ earnings have risen +26%, and inflation has risen +17%.

According to Kaiser, employees are paying an average of about $1,200 per year in premiums. That’s 65% more than what they paid in 2008, for single coverage plans that cover only the worker, no family members.

Besides the increase in deductibles, the number of employees who have a deductible has gone up, and the number of employees with above-average deductibles is up as well.

Three takeaways:

  • More patients are more attuned to the high costs of care.
  • The underlying cost of health care services is growing relatively slowly right now, compared to historical trends.
  • But there’s a sense, at least among some liberal-leaning health care experts, that employers have just about maxed out their ability to shift more costs onto employees — meaning that once price increases start to pick up steam again, businesses and workers will both feel the pain quickly.

What does this mean?

As workers’ wages are stagnant, and health care costs are rising, shifting the cost of health care onto the backs of workers is not only counterproductive to lowering the cost of health care, it puts an undue burden on those who can least afford to shell out more of their hard earned income on health care, especially when they have a serious medical issue to deal with.

Single payer will relieve the worker from having to pay out of pocket when wages are stagnant, and when wages rise again. This will enable them to have more money to spend on things that otherwise would have been prohibitive before.

To do no less is to saddle the working class with perpetual debt and decreased economic power. Not a good way to run an economy.

Ex-UN chief Ban Ki-moon says US healthcare system is ‘morally wrong’ | US news | The Guardian

Here is an article from The Guardian newspaper that spells out what is wrong with the American health care system.

We should pay attention to what Secretary General Ban said.

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Exclusive: Former UN secretary general accuses ‘powerful’ health interests in the US of blocking universal healthcare

Source: Ex-UN chief Ban Ki-moon says US healthcare system is ‘morally wrong’ | US news | The Guardian

U.S. Near Bottom, Hong Kong and Singapore at Top of Health Havens – Bloomberg

Want medical care without quickly draining your fortune? Try Singapore or Hong Kong as your healthy havens.

Source: U.S. Near Bottom, Hong Kong and Singapore at Top of Health Havens – Bloomberg

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.