Today’s article is a little different. While Lazy Man and Money is almost always focused on personal finance, I have an interest in fixing broken systems. That’s probably the computer science nerd in me. It’s why I often write about MLM scams.

Healthcare seems to be one of the biggest problems that most of American can agree on. They can’t necessarily agree on the solutions, but they agree it is a problem. I think that’s why it has become a big political issue. People feel they are paying too much for it and they are right to feel that way. Long before the Affordable Care Act (ObamaCare), I had friends complaining about skyrocketing health insurance premiums at work. I couldn’t find exact numbers, but it felt like they were nearly doubling every year… and doubling from high starting point.

Here are just a few examples of what I consider a broken system:

• I’ve written about people paying for a $629 bandage at an ER that was unnecessary and fell off on the way home.
• I’ve also written about how a $30 TDAP shot at CVS was billed at $365 by my doctor… and how my insurance paid $169 for it.
• I never finished (or published) the EpiPen article I was working on simply because the news never ended. Fortunately, all that news coverage resulted in much more affordable options. People who were paying as much as $600 may be able to get an Epi auto-injector for as little as $10 at CVS.

There are hundreds of examples of problems, but if I tried to write about them, I’d never finish this article.

My focus will be to reduce the costs of rising insurance premiums, which I feel is the pain-point for most Americans. If we could access to great care at a reasonable price, we’d be happy right?

Some Personal Background

Our healthcare is covered by TriCare, which is the military’s healthcare. It’s generally great healthcare and I honestly couldn’t tell you much about the premiums as they come off my wife’s paycheck. I suspect that the premiums are very reasonable and greatly subsidized by the government. In fact, I just did a quick search and found that The mysterious $30, $169, $365 TDAP shot

Why did my doctor bill $369 for something that CVS does for $30? I don’t believe I was given better care. I don’t even think I saw my doctor that day, but instead an assistant. I suspect that the doctor knows that the insurance is going to lop off 50-60% and consider it a bookkeeping win (“we saved 60%!”). So I think she billed at an artificially higher price with that in mind.

However, that ends with insurance paying more than 400% than it had to. If they simply suggested that I went to CVS in the first place. Instead my insurance said that I wouldn’t be covered at CVS (if I recall) and that I had to go through my primary care physician.

I was happy to use insurance as I paid $0. My doctor’s office was happy as it got $169 for around ten minutes. The insurance company looks to be the loser, but they raise the premiums on employers and other people who buy insurance, so they aren’t left holding the bad.

It seems to me that the loser is the employer or someone paying premiums for health insurance… the two cogs in the system that can’t really do anything about it. People need health insurance for disastrous stuff so they have to pay the expensive premiums. It’s not like employers are suddenly going to stop offering health insurance and I don’t see them fighting back with the insurance companies.

Proposed Fix: For routine requests like this TDAP, doctors’ offices (or insurances) can quickly/easily electronically refer the patient to the low-cost provider or accept the same rate. Insurers will pay that accepted low-cost rate no matter who does it.

I apologize to all doctors in advance for losing out on $139 ($169 – $30) for each TDAP vaccine performed, but $30 isn’t really bad, when it’s done by some assistant in 10 minutes.

Why it works: Insurers are able to lower premiums significantly. Will they actually do that? I think we need a watchdog to make sure that they do, but that’s a different problem. At this stage we want to make it economically possible for insurers to lower prices on premiums.

I’m sure that TDAP vaccines alone aren’t a huge problem, but I think the example could be spread to a lot of routine care.

The United States MUST negotiate drug prices like other countries

Vox explained the real reason of sky-high prescription drug prices through a stick figure story. If stick figures aren’t your thing (and why not!) the Wall Street Journal explained it in more prose.

Here’s my takeaway from the Vox article, essentially the government (via Medicare) enables pharmaceutical companies to charge whatever it wants for every accepted drug. Other countries work together to negotiate lower rates. As the WSJ article stated: “The upshot is Americans fund much of the global drug industry’s earnings, and its efforts to find new medicines.”

Proposed Fix: Government creates a law that allows for negotiation of Medicare. Medicare creates a policy that they’ll pay the average of what the top 15 countries (or something like that) or it go with another drug. Pharmaceutical companies would have to pitch the cost-benefit of the drug vs. other drugs with similar profiles.

We’ll need a fix for private insurers, but fixing Medicare’s cost of drugs would save dozens of billions, maybe even hundreds of billions.

I apologize to Big Pharma executives and their profits… maybe it is time to raise the prices on the other countries. My understanding is that politicians don’t like this fix because Big Pharma funds their campaigns. I suggest only voting for politicians who are willing to stand up against Big Pharma on high drug prices.

I also apologize to the world, as Americans will not be able to subsidize the creation of cool new medicine. We should work on the system first

Why it works: It works for every other country and it simply makes sense. No need to overthink it.

Affordable Care Act (ObamaCare)

I can’t understand why anyone is against the Affordable Care Act (ACA) often referred to as ObamaCare. I had to research it and this LA Times article gives two explanations. One explanation is that most people simply don’t realize that how successful it has been in lower rates of uninsured people. The other explanation is that a political party has been vocally against it suggesting that the costs are too high or that it “doesn’t work.”

This goal of this article is come up with solutions, not get stuck in a partisan fight war of words. Any objective information I’ve found has shown the ACA to be a great success. Even the opposition who can’t seem to put together an alternative seem to agree that it is great for everyone to have access to health insurance and it should cover pre-existing conditions. So we’ve got a great starting point from the ACA.

So why should we get rid of the ACA? It has never been more popular according t this NBC News article. And getting rid of it would raise insurance premiums which exasperates the problem we’re trying reduce.

If cost is a problem that can easily be tweaked. I’ve already outlined a couple of ways to do that and there are more coming. There are probably quite a few other fixes that can be made. For example, why is Justin from Root of Good paying $16 a month for healthcare? He has a 1.5 million-ish net worth. I tip my hat to him (and consider him a virtual friend), but as he wrote, “If this is evil commie government health care I’d like some more, please.”

Proposed Fix: Look into ways to create a more competitive marketplace. For example, don’t let Aetna pull out of the exchanges as a political tool. They wouldn’t need to leave if we were successful in reducing costs as explained elsewhere.

Why it works: Because it was already working in many ways. The ways that it appears to not have been working are addressed elsewhere. There’s no need to throw the baby out with the bath water.

Borrow Cuba and Other Countries

It seems that Cuba has a great healthcare system that works extraordinary well. Here’s a detailed Huffington Post on that, but I prefer this article from The Atlantic.

As the later article notes:

“Cuba has long had a nearly identical life expectancy to the United States, despite widespread poverty… the rate of infant mortality in Cuba has been lower than in the Boston neighborhood of his own prestigious hospital, Harvard’s Brigham and Women’s.

All of this despite Cuba spending just $813 per person annually on health care compared with America’s $9,403.

In Cuba, health care is protected under the constitution as a fundamental human right. As a poor country, Cuba can’t afford to equivocate and waste money upholding that. This pressure seems to have created efficiency. Instead of pouring money into advanced medical technology, the system is forced to keep people healthy.”

There’s a lot more information about how Cuba’s system works, but it makes a lot of sense. We don’t have to take everything that Cuba does, but it shows how throwing more money at the problem isn’t the fix.

Why it works: By economic necessity Cuba has had to adopt a system that works efficiently. We can expand on this more in the comments, but this article is getting long and I have a lot cover still.

Incentivize People to Eat Healthy and be Active

There’s zero immediate monetary incentive for preventing health problems by being healthy. If I log a ton of walking on my Fitbit this month, it’s just a number. If I balloon up to 400 pounds, it’s just another number.

Is it possible for your health insurance to give you money back for meeting certain guidelines like walking steps or maintaining a healthy BMI (not the most ideal metric, but it’s at least a starting point)? We have safe driving incentives for car insurance? Can we apply that to healthcare to give people an economic reason to make healthier decisions?

Additionally, the most unhealthy foods are often easiest to access and the cheapest… just compare the cost 200 calories of a (dressing free) salad at McDonalds and a McDouble. Sugar is very cheap and we know it isn’t healthy. Can we apply things like a soda tax to subsidize the healthier food?

Why it works: It can be hard for people to take interest in their health. Sometimes they don’t have the time for the gym. Sometimes they don’t want to spend $5 on a salad vs. a McDouble (I’m guilty of this). If people are given an immediately visual benefit to be healthy maybe we can reduce the amount of healthcare we need in general.

Required Vaccines for All

Why it works: Because it does.

Crack Down on Supplements

They’ve been exhaustively proven not to help with the exception of a few very specific conditions that your doctor can work with you on.

Americans aren’t educated to understand that Dr. Oz is an entertainer. As that article points out, “The FTC told Elizabeth Cohen, CNN senior medical correspondent, that there are just ‘too many’ weight loss products using deceptive advertising to sue them all. But consumers should be wary of certain phrases that are most certainly false, the FTC said, including any that claim to help you lose weight without diet and exercise.”

Big Supplement has lobbied congress to make it easy for them to put such products out:

And one of the things I’ve found is that when a supplement is tied to Multi-Level Marketing (MLM), it can cost consumers thousands of dollars. Truth in Advertising found “that 97 percent of DSA member companies selling nutritional supplements have distributors marketing their products with illegal health claims”.

Maybe with the right education, consumer protection, and law enforcement, we could divert these billions of wasted out-of-pocket consumer costs to real healthcare. It can be something as simple as a gym membership or eating healthier food in the first place.

Finally, this article points out such misleading information undermines the trust in doctors and healthcare. When people choose quackery over medicine, it can create further health risks, and for our purposes expenses, down the road.

Why it works: Because people making smart, informed decisions about their health is much better than buying likely-illegal hype from a carny.

“Health Care is a Business”

At nearly 2500 words now, I’m going to wrap this up. I had quite a few more notes that didn’t make the cutting room floor and I don’t have the energy to put together a pretty image. (Ironically to the subject at hand, there’s been a bad stomach bug passed around our town and family.) There’s a lot of things that I couldn’t touch here like in the $629 bandage article which covers facility fees of emergency rooms.

I’d like to leave you with something that I’ve read in quite a few places: Healthcare is a Business. I understand that it is, but I don’t think it should be. I think that’s where the system breaks down. It seems that everyone is trying to push to create the greatest profit for themselves, which is generally not a terrible thing. With the system we it seems to push all the expenses to higher insurance premiums with everyone taking a cut along the way.

Eventually it is the employers and consumers who are left footing the bill for all those people.

It’s a lot like Parkinson’s Law that says, “work expands to fill the time available.” In this case, the costs expand to fill the budget available… but the budget is effectively unlimited.

Maybe it’s because I often view things through a personal finance lens of cost-benefit analysis, but I feel like some kind of comptroller is necessary to step in and say, “Whoa! Let’s go with the frugal option with this.”

I’ve been meaning to write an article on health care for a few months. I have parts of it outlined and an idea of what I want to say. I kept pushing it off, because I thought, “Hey this is a money blog… people don’t want to read about health care.” While there’s certainly is a great connection between the two, I didn’t want to focus on the money in the article I had planned

I had an experience last Monday that changed my opinion of writing about health care. It is a stretch to connect it with money, but I was urged by a close friend to write about it anyway. Also, since few people read the week between Christmas and New Years, why not go a little off-script?

As I approach the big 4-0, I’ve got a few minor, minor health issues. I got an occasional pain in one of my knees after long drives. I thought it might be an ACL or MCL, but it is fine as long as I have good movement with it.

More recently the skin on my fingers has started to peel. I think it is nothing more than the weather, but it’s a concern to my pharmacist wife. She’s rarely concerned about such things, so her concern has become mine. Update: On a tip from my uncle (and 800+ awesome reviews), I picked up Gold Bond Ultimate Healing Skin Therapy Lotion, which has been a miracle-worker on my hands.

In any case, it’s time for me to talk to a doctor. Like the vast majority of Americans, I see my doctor like I see my mechanic… when there’s a problem. I haven’t had any problems for a couple of years, so my primary care physician (PCP) was out of date. I picked her before my last move a couple of years ago. It’s time to get a new one.

Fortunately, as part of my wife’s job, she knows how this process works. I figured I’d call the health plan and have them assign me a doctor. There are times when I’d be picky, but in this case I simply want first available. My wife told me that’s not how getting a PCP works. I needed to call a doctors office and make an appointment.

That seemed easy enough, especially because my health plan provided me with a search of doctors in my area. Unfortunately, that was the end of a productive Monday. Five hours later, I still didn’t have a single doctor who was willing to be my PCP.

The search allowed you to enter a location and gave nearest results, “as the crow flies“, not based on driving distance. That works fine as long as there isn’t a major city across a bay… technically very close, but oh so far away. My three year old knows that that people are not crows and people drive cars. To tell him otherwise would get a response of, “That’s silly!”

Fair enough, I’d had to scroll though 10-12 pages to eliminate the places far from me. Once I realized that I needed to do this it was no big deal. It just wasn’t obvious at first and I had thought I’d gone through the close doctors in the first two pages.

The search didn’t have a checkbox for those “accepting new patients”, so I had to dig through looking for that line on each doctor. This was the most minor of annoyances, like looking for a city that was actually drivable. However, about 90% of the time “accepting new patients” was a boldface lie once I called the doctor. So 85% of the doctors are eliminated by not labeling themselves as accepting new patients and another 85% appear to be mislabeled.

About 15% of the doctor’s offices that I called last week had people answer the phone. The other 85% went to phone trees. The phone trees were mostly set up for existing patients. It makes sense that they’d be prioritized, but why not throw a bone to a person who is trying to give you business? This is the exact opposite of the telecom industry that ignores existing customers and focuses on only getting new customers. Typically I’d applaud going in the opposite direction of the telecom industry, but there has to be a middle ground where you service the existing customers while attracting new customers.

If I navigated the phone tree well, I was rewarded with a recording to leave a message of all sorts of information. I don’t mind leaving my name and number, but asking for my date of birth was very odd. The recordings also asked for my old PCP, which was not information that I had handy. Plus, let’s get to that after we actually talk in person, so I can at least ask why it’s relevant. I’m imagining that some doctors don’t want take patients who have seen other doctors… like I’m somehow a tainted human being because I had Dr. Blackburn as a previous PCP.

I did the best I could to comply with message. Since they asked for 10 pieces of information to leave after the beep, I’m sure I missed a few of them.

In any case, ZERO doctor’s offices called me back that day. I could see if I was calling at 3PM and they were close to closing, but I was calling at 11AM. One of them was the same medical group as my sons’ pediatrician, which has me concerned about choosing them.

Finally, at 4PM I found one independent doctor who had someone answer the phone. After 3 minutes and about 7 questions (such as name, address, etc.), I not only had a PCP, but an appointment for this week. The receptionist even apologized for the lengthy question process! It was the exact opposite experience of what I went through all day.

Yes, this rant was partially about getting it off my chest. More importantly though, I wanted to point out supremely flawed and inefficient the system is. The day before I made the calls, I said to my wife, “It’s Sunday, why can’t I just log into my health plan’s account, do a search, pick a new PCP, and click submit?”

I can have about a million products shipped to my door in two days… for free (thanks Amazon Prime). I have access to trillions of pieces of information, sorted brilliantly to serve me in 3 seconds (thanks Google). I can talk directly to celebrities and get a response in under a second… even if they don’t want to talk me (thanks Twitter). In 30 seconds, I can buy a limited edition Crayola Christmas ornament from 1984 to replace the one my dog ate. I can text an emoji and have a pizza delivered to my house in minutes (thanks Domino’s).

But health care can’t figure out a way to use the internet to not only save me some time, but dozens of doctor’s offices. I had to disrupt multiple receptionists of offices that weren’t accepting new patients. Theoretically, a dozen offices listened to a very long message from me about my request to become a patient. (Theoretically, because none of them called me back, so I have no way of knowing.) My health care company should easily be able to pass information like date of birth and previous PCP to the new PCP I choose. They wouldn’t have to worry about spelling errors of that previous PCP’s name in translating from my phone message, because they’d be reading it right on their computer screen.

None of this is new or revolutionary. It was commonplace a decade ago.

Maybe I’m stuck with a health plan whose technology is in the dark ages, but that would be even more telling how bad the system is. If every health plan is reinventing the wheel in creating it’s own technology infrastructure for communicating with doctors’ offices, we have a terrible, inefficient mess.

It may sound like this is a little tiny thing, but multiply it out to hundreds of million of people across the United States and it is huge.

Once again, I wasn’t going to write about this, but when I told a friend about it, she urged me to. She said, “People should read how messed up health care is.” I responded, “Aren’t I just telling them what they already know? This isn’t exactly ‘breaking news’.” In the end, I think I went with her advice if for nothing else other than to write about it and get it out of my system.

The only thing that made me more frustrated with the experience was when I realized that I was a (relatively) healthy person who had the guidance of my wife who tangentially does stuff like this for a living. I can’t begin to imagine the frustration level of anyone who is sick or doesn’t have the guidance.

P.S.

Some might ask why I don’t go to an urgent care clinic for these minor issues. My health plan doesn’t cover them… only the much more expensive emergency room and doctor’s visits. I don’t know why this is, but that’s their decision. My goal in getting a PCP was to avoid spending a whole day in the emergency room. If I only knew, I would spend the day on the phone anyway, I could have done both.