healthcare Archives - Lazy Man and Money

Back in January, I put together some ideas on how to fix healthcare.

I put together six problems and proposed fixes for all of them. I thought it was interesting that most of the comments were about my mention of the Affordable Care Act. The exception was a regular reader who said it was, “Best. Article. Ever.” (*blushing*). I found it notable that no one seemed to argue for the $629 bandage from an emergency room stay or the high cost of medicine because the United States subsidize the rest of the world.

In the last month, the healthcare talk has ratcheted up. That’s probably a direct cause of the House pushing through a bill before the Congressional Budget Office could do analysis on it. It’s expected to get changed in the Senate and then I think it goes back to the House. It seems like a silly process to me because when it gets back to the House, they’ll probably say, “We’ve got it this far, we have to send it through.” So the Senate could do a bunch of things that the House originally didn’t want and the end result would be they have to accept them anyway.

There are worse political systems out there and this one has worked well for a long time, so maybe I’m just off-base here.

If the House can add amendments to their original bill, I can add amendments to my previous healthcare article. And that’s what I’ll do. Some of these are free-form thoughts, not problem solving like before. Let’s dig and see how we can improve health benefits.

Why We Need to Fix Healthcare

Short answer: Warren Buffett says so.

Longer answer: Since the 1950-1960s, corporate taxes went from 4% of the GDP to 2%. Healthcare went from 5% of the GDP to 17%. So while politicians are beating the drum about taxes, it’s silly. Here’s the key quote to the article:

“Our bloated health care system, Mr. Buffett asserted, is the true barrier to America’s world competitiveness as well as ‘the single biggest variable where we keep getting more and more out of whack with the rest of the world.'”

In short, we can’t “Make America Great Again” without fixing healthcare. And fixing healthcare doesn’t necessarily mean a “repeal and replace.” It means addressing those sky-high medicine prices we have subsidizing other countries. I haven’t heard either political party address that. It means a bunch of other things too, many of which I addressed in the previous article.

The only point I want to make here is that we should work on getting that 17% GDP number down to 5% again.

The Price of Doctors’ Education

I was chatting with a high-ranking pharmacist friend of mine about healthcare and I mentioned the cost of medicine. He was quick to point out that it really is the high cost of staffing that makes healthcare so expensive. I think he said that drug costs are only 20% of the problem. He knows a lot more than I do in this area, but it makes sense.

Medical professionals have to go to school for a long time. Colleges and universities have been raising rates for a long time. It seems to me that the medical professionals get out of school with more debt. I know a couple of doctors who have had $250,000 or more of student debt at one point or another. It’s reasonable that they’d want a return on their investment… and it’s reasonable they’d want to get out of the debt fairly quickly.

So it got me thinking, “Is healthcare a bubble within a bubble?” Could it be that at least part of the reason our healthcare is so expensive is simply because we let the costs of education spiral out of control? I view the costs of college today similarly to when people would get interest-only, 50-year fixed mortgages so that they could a home. The main idea seems to be, “With enough loans you can afford anything, which gives us license to greatly raise the price.”

It didn’t work out well for those mortgages and I think we can see it isn’t working well for recent graduates. If my friend is right (and it seems logical enough), it isn’t working well for our quest to create an affordable healthcare system.

What About Teeth?

Ironically, I’m writing this paragraph about 5 minutes away of getting in the car to go to the dentist.

Fortunately, recently published a great article about teeth and dental insurance. There’s a big divide of the “haves” and “have nots” when it comes to dental care.

Oh and the article points out that the average dentist starts out with $260,000 in student loans. I read after I wrote the above section.

I don’t have any magic fix for dental insurance, but I think it should be included with regular healthcare. When 1/3 of Americans are going without insurance and it can lead to greater health problems this needs to be part of the fix as well.

I’m back from the dentist and I guess the military changed dental insurance providers on May 1st. They didn’t have the courtesy to let me know. So my cleaning that had out-of-pocket costs of $0 is now around $30. It’s not a big deal, but it seems like all our dental costs are going to go up. Maybe a different dentist will be in-network and we can get our costs covered 100%. It still seems weird that for years they’d cover 100% and now it’s closer to 66%.

Let’s talk Cigarettes

Quartz Media put out some interesting statistics about cigarettes. The big takeaway for me was this:

People are smoking less – Yay! Cigarette companies are making more money – Boo! How is that happening? Those addicted to cigarettes are willing to pay for the huge increase in costs. Americans spent more on cigarettes than beer and soda combined. Think about that for a minute.

I know there are substantial taxes on cigarettes, but maybe we need to raise them even more to subsidize healthcare. Why are cigarette companies profiting so much on something that grows the high risk pool?

What If… We Just Ate Better?

I don’t want to be all doom and gloom when it comes to healthcare. There’s still a lot of things we can do.

For example, there was a great article covering Michelle Obama’s attempt to get kids healthier foods in school. This is a common sense start to a long term plan for a healthier America. A healthier America means less money spent on healthcare… and cheaper plans and deductibles.

I can find no reason why anyone wouldn’t support that. The only thing that makes any sense to me is that special interests (food companies) are paying off politicians.

Eating healthy doesn’t have to be a long-term solution either.

NPR has a great story about how it’s cost-effective to GIVE away $1000 worth of food a year to people with Type 2 diabetes. They find that spending that $1000 can save them as much as $24,000 in healthcare costs.

I don’t think the patients are complaining about getting free food either. Is it a “hand-out” that some politicians would fight against? Sure! However, lowering the healthcare costs for some, lowers the insurance premiums for all. I wrote a bit about this in my previous article, but this is one clear-cut example of a working system.

What Do Think?

Sound off in the comments below. The great thing is that you don’t have to be political about it. No one is keeping tabs on you. (Also, I don’t think any lobbyists are likely to pay you to write an opinion here.)

Short of clearly negative terms such as homelessness and domestic violence, I can’t think of a more depressing topic than healthcare. The topic is so immense that I’m not even going to attempt to cover it in any kind of detail. I’m only going to address healthcare billing.

You’d think billing for something would be easy. We’ve been billing for things for hundreds of years without issue. It can’t be difficult, right?

Let me tell you how I spent Tuesday morning this week.

In March, the wife and I went on a vacation in Silicon Valley to visit with some old friends. As luck would have it, I got pink eye. I’m going to blame the Extended Stay America in San Mateo, which was one of the worst motels/hotels I’ve ever been at… and I like Motel 6.

What idiot gets pink eye when they are away from their kids for a few days? This idiot, I guess.

My wife, being a pharmacist, knew that we just needed a cheap, generic antibiotic. However, to get that antibiotic, you need prescription. That’s when everything went to hell in a hand basket.

My understanding is that some 99.9999% of the insured US population can go to some kind of non-urgent clinic for something simple like this and have it covered. I even hear that it is relatively quick. Our military insurance is great, but the compromise is that you have to go through emergency rooms for something that should be quick. It means that I often wait six hours for a visit that can be as quick as 5 minutes. (I think emergency room triages could learn from grocery store check-out lines of 12 items or less. Oops, broke my promise to stick to billing.)

In any case, such visits are always covered 100% from by my understanding. This is the way the health care plan wants it to work.

Since we lived in the area for years, we knew just the hospital to go to. It was the one my first son was born at a few years back. As far as vacation illnesses go, this is going to be easy, right?

The visit itself was uneventful. I didn’t even have to wait the usual 6 hours. In fact, I was almost unhappy to have to leave the waiting room that had a new episode of Undateable on.

A couple of months later, the bill came in the mail. We owed $400. Hmm, that doesn’t seem right. I gave them my insurance card. Turns out they ignored what I gave them and used what they had in their computer system. That was no longer an active insurance due to our move. So it churned out a bill of $400 to be sent to my house.

Fortunately my wife works in this area every day and as the sponsor of the plan called up to fix things. I’m never sure who you are supposed to call in this scenario, the hospital or your insurance. In any case, she got the problem solved…

… until Monday when I get a new bill from the hospital for $330, the balance of the portion that my insurance didn’t cover.

This is called “balance billing” and in some states and for some forms of health insurance (such as Medicare) it is illegal.

I had never heard of balance billing before. In my quick research it seems very controversial. For example, I think my bill would have been a lot cheaper if I hadn’t gone to the emergency room. It can’t be $400 for 5 minutes of someone to look at my eye and tell me what I already know, right? However, my insurance requires that I go to the emergency room. On the other hand, is it fair to the emergency room to take only $60 for what they deem is a $400 service? In this case, I think $12 a minute is still very good money, but I bet there are other cases where the insurance doesn’t cover the hospital’s expenses well.

If you really want to have your mind blown, you should read this Forbes article on balance billing. The patient planned a $2000 procedure with an out of network provider which is listed as being covered 50% by her insurance. She saved up $1000 for the procedure. However, she got a bill for $1600.

What happened?

The insurance decided that the procedure should only cost $800 (their negotiated in-network rate) and decided to reimburse her 50% of that (or $400). That left a balance of more than $1600. It’s a double whammy as she was penalized with a higher rate for going out of network and also only reimbursed 50%.

The Forbes article cites research that says only 16% of people were able to accurately estimate their bill in one study.

I can’t imagine that anywhere else in life. The closest I can think of is my mechanic, but even then I get a fairly estimate before work is done. I can understand not having billing details when you are bleeding from multiple knife wounds (or some other urgent situation). However, that wasn’t my case with pink eye and certainly not the case with the person in the Forbes article that saved up for her procedure.

Getting back to my case… I was in California and the Forbes article specifically points out that emergency rooms there can’t balance bill. So I’m not sure how their computers even allows for the scenario. As an extra layer or protection, my insurance seems to say that I can’t be balance billed. So it seems that the hospital is break the state laws and their agreement to take my insurance.

How can we fix this

From a technology standpoint, it should have taken all of 15 seconds for me to swipe my insurance card and have their computers tell me what it is going to cost for a pink eye emergency room visit. Maybe it’s 30 seconds. I’m even happy to run it myself during the hours that I’m usually waiting in the emergency room. The could even take this to the next level and make a mobile application where it saves my insurance in the app. Then I’d only need to enter my condition and GPS could tell me nearest providers and final costs (with my insurance) in the area.

This technology is thousands of times easier than programming to Siri to understand what I’m saying and respond relevantly back to it.

Is this anything new?

Not for me. Twice before, I’ve gotten in conversations that went back-and-forth between the two a few dozen times over a span of several months.

One was for an ambulance ride when I almost died choking on pizza crust. The ambulance company couldn’t figure out how to take my insurance. They couldn’t work it out with my insurance company who had conversations with them. While they went back and forth to resolve the technical issue, my bill went into collections where it started to damage my credit. I was financially held hostage by two organizations who weren’t even disagreeing with each other.

Another time, there was a disagreement between the hospital and the insurance for how the procedure should be coded. Under one coding it would be covered. Under another one it would not be. It was another case where it wasn’t an urgent condition… yet they couldn’t have told me beforehand whether my insurance would cover it.

So now, whenever I have something come up, it’s a game of medical bill roulette. I’ve been fortunate enough to win the disagreements, but I think the process to resolve the financial aspect is far worse than the medical condition itself.

Healthcare… (sigh…)

Let’s Fix Healthcare! (Again)