Oct 212013
 

Healthcare-Reform-Act

One topic I want to capture my thoughts on, before I just get used to things, is the state of U.S. healthcare.  While in many areas of daily life, you can’t really tell much of a difference having crossed the border, with healthcare the differences are legion.  And not for the better, so far as I can tell. The following a random assortment of things, that I’ve either read about (primarily in the NYTimes) or experienced directly that induced the most head-scratching.

I should note first and foremost that the actual practitioners I’ve dealt with have all been capable and professional  (though my family and I are still fortunate enough not to have needed any particular difficult care).  It’s the system, model, companies, and bureaucracy that I find amazing.

1.  Rates for the uninsured.  I remember my friend Herman telling me, after he’d returned to Canada, about a visit to his dentist.  Since he’d been away and hadn’t started working yet, he didn’t have dental coverage (in Canada, healthcare is free, but you still pay for a trip to the dentist if you don’t have a plan). But seeing that Herman didn’t have insurance yet, the dentist helped him out by giving him a favorable rate that was less than what insurance would have been billed. By contrast, here, I’m stunned to see that rates for the uninsured are simply exorbitant; every time I get some kind of statement, it reflects standard pricing that is sky high, followed by a negotiated rate that are my “savings” thanks to my insurance company.  I’ve seen the uninsured rate be up to 5x as high, sometimes $1,000+ for a simple visit of less than an hour.

2.  Better have a crystal ball.  Even if you are fortunate enough to have insurance, there’s a myriad of choices all of which rely on your ability to predict your medical future. Considering that insurance is there in large part to deal with potentially catastrophic expenses that you by definition cannot predict, this seems counter-intuitive. Perhaps everyone who has lived here long enough understands the difference between HMOs and PPOs, which of multiple PPOs are best, standard and high deductible plans, the right allocation to an FSA, how likely you are to need out-of-network care, and so forth, but to me, putting these decisions in the hands of an average consumer is pointless.

3.  Gambling your healthcare on the stock market.  One of the amusing constructs that exists in the U.S. is a Healthcare Spending Account (HSA).  Your employer may deposit some funds into it annually, you can also put some of your own pre-tax dollars into it.  If you optimize things correctly, you’ll figure out exactly your lifetime out-of-pocket healthcare costs, you’ll accumulate exactly enough in the account, then spend it over time as you get old and your bills increase.  Maybe that already sounds crazy to you (if you don’t live here), but there’s more!  You can actually invest your balance in instruments of your own choosing, and yes, equity funds are available!  If a sudden market meltdown causes you a heart attack, good luck paying for it.  I have one of these things, but I can’t for the life of me figure out how this added complexity is supposed to bring about a better outcome for anyone.  There’s a parallel kind of account that is similar (LPFSA), but that one is even more like a lottery, you put money in and whatever you don’t use by the end of the year – you lose! All just to save some tax dollars.

4.  Hope you’re a good negotiator.  Want to know who gets to resolve things if your healthcare provider and insurance provider can’t seem to agree on who exactly should pay how much for what? You, of course. Because if your insurance company decide they’er not paying, then you get the bill. And errors/disputes seem sufficiently common that you should expect to find yourself in this situation – all it takes is one coding error when a procedure is being documented and you may be spending quite some time on the phone. When we did the mandatory checkups as part of applying for a green card, I didn’t know if that was actually covered or not. Apparently, neither did they, because for the same procedure on the same day, mine was covered, Valerie’s wasn’t, and our kids were. I didn’t even bother trying to figure that one out.  Just this past week, even a regular annual checkup got billed incorrectly and is now in the process of maybe being corrected.

5.  One visit, many bills.  Going to the doctor feels like it can create a stream of bills, which trickle in for months after the actual visit. That’s because your doctor bills you, the hospital bills you, the lab that did some analysis bills you, then any specialists or others that got involved in some way bill you. This happened a few times when Leo went in out of concern about his asthma; we get way more bills than visits, some of them bigger, some of them smaller, and frankly we have no idea what some of them are for.  I swear that someone could send us a bill for the oxygen we inhale in the waiting room and if they had the visit dates right we’d probably just pay it.

6.  In-network vs. out-of-network and balance billing.  On the surface of things, in-network vs. out-of-network is simple, even if crazy.  Your insurer has a network of participating doctors, hospitals, etc.  If you use a provider that’s in-network, most of the bill is covered; if you go out of network, you have to pay a much higher percentage *and* because you don’t get the “discounted” rate, you’re paying that higher percentage against a much higher base amount. As a consumer, you better make sure you understand this, or seeing the wrong doctor could be rather expensive. But even if you do understanding this, balance billing as explained in this New York Times blog post, will scare you:

A report issued by New York State in March cited the case of a patient who went to an in-network hospital emergency room after severing his finger in a table saw accident. The finger was reattached by a nonparticipating plastic surgeon, and the bill was $83,000. The insurer estimated the going rate for the procedure was only about $21,000.

That’s right, if you have things together enough to get to a participating hospital in an emergency, that doesn’t guarantee that all doctors working there are participating, and you may be stuck paying the difference.  For a lot of folks, I imagine that a surprise extra $62,000 due to an accident could be enough that they can’t pay their mortgage or stay in their home.

7.  Exorbitant pricing.  I still get sticker shock when I see $1,000+ bills for a quick asthma visit for Leo (fortunately, these are less frequent); even when the insurance company picks up most of it, it’s pretty horrifying. Once we’ve lived here long enough, maybe my reaction won’t be as visceral. Why do things seem so expensive? Well, at least one good explanation came in another recent NYT article, which described how patients were billed up to $546 for a bag of saline solution which actually costs between 50 cents and $1, due to a combination of complex deals between suppliers & hospitals, and obscene 100x-200x markups.  Another recent article called out medical device pricing as particularly rife with anti-competitive practices, including effectively paying fees back to a physician that proscribes use of a particular device.

8.  Live piano.  I appreciate a grand piano played live as much as the next person, perhaps even more. But it was nonetheless a bit stunning to hear one in the lobby of a hospital facility we visited for our green card blood test. I’ve been to hospitals in Canada, Malaysia, and Taiwan, all of which seemed to have things related to healthcare – not amenities that I’d expect to see as I walk through Neimann Marcus (a high-end department store here) or the lobby of the Bellagio.  But I guess when you’re paying up to $8 million to hospital CEOs, then splashing on a huge foyer replete with a grand piano played live isn’t so excessive.  I’m pretty sure it does raise the bills, though!

9.  Acquire and gouge.  Another interesting article from a year ago was this one, about an unfolding situation in Boise, Idaho. The largest hospital in town began buying up individual physician practices.  Prices rose, referrals to doctors that weren’t “in the club” dropped, which made it straightforward to drive further consolidation. This all sounds fairly anti-competitive, but so far as I can tell actual anti-competition laws are only really applied at a federal level, so there’s little to stand in the way of this kind of thing.

It’s ironic that living in a country that generally believes very deeply in capitalism has convinced me that there’s areas, like healthcare, where it just doesn’t work.

 

 Posted by at 8:00 am

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