Heartland Health Research Institute

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Uwe Reinhardt Got it Right

By: David P. Lind

You might not easily recognize the name, Uwe Reinhardt. He was not an actor, politician, or an exceptional dancer displaying his moves on “Dancing with the Stars.” Nor was he a novelist who wrote fiction. However, he often did write, but he used his profound economic and healthcare knowledge to educate Americans about a persistent issue that refuses to go away in this country – unmitigated pricing in U.S. healthcare.

“Price gouging” is a term used when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent.

Yet charging:

  • $47,600 for a $400 MRI of the lower back
  • $238 for a $15 vial of eyedrops (ofloxacin)
  • $89,000 for a $1,500 for a steroid (deflazacort) to treat children with Duchenne muscular dystrophy
  • $12,600 for a $150 emergency department visit for a similar condition
  • $382,000 for a $54,000 air ambulance ride (from Ixtapa, Mexico to Chicago)
…is considered to be “healthcare.”

The reason pricing is called “healthcare” and not “price gouging” is quite simple – it may be morally and ethically wrong, but it’s currently not illegal. The problem with healthcare price gouging is that it hurts people, especially when they are in vulnerable situations. In the U.S. system of healthcare, we live in the ‘Wild West’ of anything goes – and does it ever! Compared to other advanced countries, the U.S. has the most expensive health system in the world, with prices at least twice as high for healthcare goods, drugs and services.

In 2003, Princeton economist Uwe Reinhardt, a prolific health policy expert, and his colleagues, penned an illuminating article in the journal, Health Affairs, “It’s the Prices, Stupid.” The article disputed the insurance and medical provider arguments that higher health usage in the U.S. caused costs to be higher than they should be. Instead, the authors clarified that higher spending is due mostly to higher prices for healthcare goods and services in the U.S.

Two years after his death in 2017, Reinhardt’s wife released a book, “Priced Out – The Economic and Ethical Costs of American Health Care,” about her husband’s compilations of today’s U.S. healthcare system – why it costs so much more and delivers so much less when compared to other advanced countries.

Reinhardt himself was planning on releasing this work in a forthcoming book, but he unfortunately died before its eventual release and publication. The crux of the healthcare problem, Reinhardt wrote, “is not one of economics but of social ethics.” He was often quoted saying, “Our health system is in danger of pricing kindness out of our souls.”

Reinhardt unabashedly spoke and wrote that the U.S. health system was carefully structured to enable legislation – triggered by special interest groups – to allow the supply side of the health care sector to extract enormous sums of money from the rest of society.

By having this control, the medical establishment argued that higher prices were necessary to pay for the development of new life-changing drugs, beautiful new medical buildings, and a host of other ‘necessary’ edifices of grandeur baked into the U.S. healthcare sector. Keeping the system opaque allowed those in charge to control the narrative of higher prices.

If public winds swayed to question these outrageous prices, fingers by the medical establishment were usually pointing in the direction of patients being too unhealthy and consequently requiring more services and procedures. Another culprit on why prices are high – unmitigated governmental regulation. Additionally, “because Americans are so litigious,” defensive medicine was a convenient approach to combat “unnecessary” lawsuits, citing that “tort reform will help fix this injustice.” Unchallenged pricing behaviors come in many flavors of reasons.

Reinhardt was right. This problem persists to this day – and unfortunately, will continue for a long time to come.

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Another Study Regarding Hospital Mergers – Not Good for Patients

By: David P. Lind

This past September, I wrote an Op-Ed piece for the Des Moines Register and a blog discussing the important drawbacks of the proposed merger between Sanford Health and UnityPoint Health. In early November, this merger was abruptly called off, with the Sanford Health CEO indicating that the UnityPoint board “failed to embrace the vision of a new health system of national prominence.”

For more than three decades, many hospitals around the country have been on one huge shopping spree, buying-up their competitors – both big and small. The common rationale cited by hospital executives (and their powerful associations) are that hospitals will become better health systems, patients will benefit with better quality-of-care, and that costs will go down. In short, they pitch that this buying behavior is a win-win for everyone.

Bottom line – this behavior usually favors the merging hospitals and NOT the payers and patients. It’s quite simple: Hospitals don’t consolidate to cut their prices, they do it to gain market dominance when negotiating with insurance companies. Numerous national studies validate this fact.

New Research on Mergers Refutes Hospital Mergers

A newly-released study, “Changes in Quality of Care after Hospital Mergers and Acquisitions,” published in The New England Journal of Medicine, refutes the too-often-argued pitch that mergers will improve patient outcomes. In fact, this new report suggests four dimensions that run contrary to the hyped-claims offered up by the hospital industry:

  1. “Acquired hospitals experienced a progressive decline in patient experience measures after the ownership change.”
  2. Acquiring hospitals with a lower ‘baseline’ of patient experience performance will subsequently spread this lower performance to the newly-acquired hospitals. Additionally, there was no evidence that higher-performing acquiring hospitals will boost the patient experience ratings for the acquired hospitals.
  3. Insignificant impact on 30-day readmission or mortality rates for the acquired hospitals.
  4. Any improvement that acquired hospitals had in their clinical process measurement performance happened BEFORE the ownership change, suggesting the acquisition was not a causal reason for the improvement.
The study basically suggests that, relative to hospitals that were not acquired, acquired hospitals did not improve quality of care in the following ways:

  • Patient Experience WORSENED.
  • Patient Outcomes showed NO IMPROVEMENT.
  • Clinical Processes for improved performance are INCONCLUSIVE.
The National Institute for Health Care Management (NIHCM) provides a helpful slide show on the implications of hospital mergers that do not support the arguments made by the hospital community. Additionally, a very helpful podcast about hospital mergers, Tradeoffs, discusses the implications that mergers are actually harmful to the public, and any proposed mergers in the future should be highly scrutinized by local authorities and the general public.  Tradeoffs, by the way, is supported by the Robert Wood Johnson Foundation and the California Health Care Foundation.

Regardless of the rationale they used, the board of directors at UnityPoint should be commended on nixing the proposed merger with Sanford Health. Having a ‘new health system of national prominence’ sounds like a verse from the P.T. Barnum hymnal of marketing slogans. Without question, healthcare requires less hyperbole-sounding slogans and more patient (and payer) centric action.

If hospitals really desire to lower their prices, they will find ways to eliminate clinical redundancies and increase productivity.  This does not require the pursuit of mergers, but rather, demonstrate the willingness to embrace Economics 101 of keeping overhead affordable.

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Physician and Caregiver Burnout – Yet Another Epidemic

By: David P. Lind

My particular primary-care doctor has been my medical ‘counselor’ for about 25 years. I visit her at least annually for my routine physicals, but have frequently consulted with her about obtaining referrals to specialists outside her scope of practice. I see her because I have unquestionable trust in her abilities to put my interests above any other outside influences.

On numerous occasions, I have confided in her about my family medical history, specifically having lost two siblings to different cancers. Through her own tears, I have come to accept her as yet ‘another sister’ to me – my fifth! Her compassion for my well-being is both genuine and reassuring. Suffice it to say, I have the utmost admiration for the medical professionals who work diligently on a daily basis to care for patients.

Much of what I have written in the past, whether through blogs or op-ed pieces, is directed to help educate the general public about the problems (and potential solutions) of our healthcare system. Not only is the healthcare service delivery we seek local, it is also very personal, especially as it relates to the relationships we have with the doctors, nurses and other caregivers in our communities.

But what patients may not understand is the ‘backroom’ in which clinicians are required to perform their daily work. It is within this ‘black box’ of their work environment that their human frailty may become tested and subsequently exposed, negatively impacting their own mental well-being, and possibly undermining patient care.

Caregiver Burnout

The opioid epidemic has become a large concern of our local and national conscience. But another troublesome public health crisis persists in our society, and it greatly impacts each of us, whether we know it or not – physician and caregiver burnout.

Physician and caregiver burnout have troubling symptoms, such as depression, exhaustion, dissatisfaction and a sense of failure. Losing the passion or purpose to serve others can be a powerful setback that steals the joy of practicing a noble profession. If left unaddressed, this burnout will erode the caregivers’ mental health and adversely impact patient safety.

The nurse burnout rates are reported to be between 35 and 45 percent. The burnout rates also vary by specialty. For example, specialties with the highest rates of burnout include1:

  • Urology – 54 percent
  • Neurology – 53 percent
  • Physical medicine and rehabilitation – 52 percent
  • Internal medicine – 49 percent
  • Emergency medicine – 48 percent
In fact, doctors who report burnout are twice as likely to commit a medical error. From our 2017 Iowan’s Views on Medical Errors study, Iowans reported the top cause of medical errors was from “Doctors and nurses who are overworked, stressed and tired.”

Quite understandably, when surveyed about the causes of burnout, physicians point to a plethora of bureaucratic tasks that include too much government and private insurance interference, too little pay, too many office hours, and too much time spent in front of the computer screen using electronic health records that are more about submitting the correct procedure codes to get paid by private, Medicaid and Medicare payers. Completing administrative and insurance requirements takes precious time away from providing face-to-face care to patients – perhaps twice as much time compared to treating patients.

According to an October 23, 2019 report, “Taking Action Against Burnout: A Systems Approach to Professional Well-Being,” the National Academy of Medicine (NAM) reports that 35 to 54 percent of nurses and physicians have substantial symptoms of burnout, while medical students and residents have symptoms of burnout between 45 percent and 60 percent. A recent Mayo Clinic report confirms similar findings, suggesting that 44 to 54 percent of physicians report having ‘burnout’ symptoms. A newly-released study by Medscape reported that almost half of physicians would take a pay cut to work fewer hours, and more than a quarter of physicians would give up between $20,000 and $50,000 per year in salary.

Potential Solutions to Burnout?

There is no clear consensus on what solutions will quickly ‘fix’ this growing crisis. Physicians want or favor the simplicity of administrative requirements from key payers, more relaxed insurance regulations, more stream-lined technology that allows caregivers to spend less time on computers and more time with patients. But the devil is clearly in the details.

The above-mentioned NAM report was prepared by the Committee on Systems Approaches to Improve Patient Care by Supporting Clinician Well-Being. This committee made six recommendations to serve as guidelines to help healthcare organizations design and implement systems to mitigate the factors that contribute to burnout:

  1. Create positive work environments
  2. Create positive learning environments
  3. Reduce administrative burden
  4. Enable technology solutions
  5. Provide support to clinicians and learners
  6. Invest in research (on clinician professional well-being)
Similar to the opioid epidemic, our state and country will need to become more involved to meaningfully address this particular crisis. Physician and caregiver burnout is a public health crisis that requires urgent action by healthcare organizations, state and federal governing bodies, including regulatory authorities.

Afterall, don’t we want our own doctors to be healthy, too?

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1 2017 Mayo Clinic

Research on ‘Medical Errors’ Published in National Scientific Journal

By: David P. Lind

NOTE:  Our peer-reviewed article concerning the prevalence of medical errors experienced by Iowans was released in the summer of 2018 for a future edition of the international publication, Journal of Patient Safety (JPS).  The article summarizes the experiences and opinions of a statistically representative sample of 1,010 Iowans, and provides new insights on approaches Iowa can take to determine the extent of the problem and develop solutions to obtain safer care for patients. Because there continues to be a backlog of articles not yet printed in the quarterly JPS journal, I decided to share this article now before it’s eventual inclusion in print version.

The article, “Medical Errors in Iowa: Prevalence and Patients’ Perspectives,” was co-authored by myself and two others: David R. Andresen, PhD and Andrew Williams, MA. The article reports that medical errors, also known as preventable adverse events, are seldom voluntarily reported by healthcare providers in Iowa and the U.S.

Quantifying the magnitude of the medical error problem is an essential first-step toward solving these safety issues. The hope is that vulnerabilities in the healthcare delivery process will be exposed so that solutions can be found. However, the U.S. does not have a bona fide national strategy to assess medical errors, and, as a result, hospitals and clinicians around the country do not report medical errors accurately and consistently.

The JPS article suggests there is no single method for healthcare providers to promote full, transparent reporting of medical errors. However, the approaches described can serve as a counter-balance to lax provider reporting that includes the patient experience and perspective:

  • Implement mandatory provider reporting and appropriate compliance enforcement. From this, reported errors can help medical organizations more clearly understand exactly what happened, regardless of the outcome of the error, and identify the combination of factors that caused the error or near-miss to occur.
  • Create a central state repository for patients to report medical errors, making sure the reporting process is uncomplicated.
  • Develop an on-going, independent, random-sampling process to survey patients (and family members) who recently received care to document the prevalence and nature of medical errors. This is the most disruptive approach. From this collection process, state authorities, medical providers and the public will gain critical insight on the prevalence of medical errors to allow for improvements. When errors are not reported and discussed, providers miss crucial feedback and learning opportunities.
The survey process can originate from claims data available through Medicare, Medicaid and private insurance companies. Patient experiences with medical errors can be collected and monitored for each medical provider, who would then receive systematic feedback about these errors to facilitate improvement processes. Through this data collection, results of medical errors would eventually be publicly reported for each institutional provider (e.g. hospital, surgery center, etc.).

A vast majority of Iowans have positive experiences with the healthcare system in Iowa. However, nearly one-in-five Iowa adults (18.8 percent) report having experienced a medical error either personally or with someone close to them during the past five years. Of those, 60 percent say they were not told by the responsible healthcare provider that an error had occurred. The survey found that hospitals were the most frequent site of medical errors (59 percent), while 30 percent of errors occurred in a doctor’s office or clinic, four percent in nursing homes and seven percent at some other location.

Among many important findings, the Iowa survey found that nearly 90 percent of Iowans “strongly agree” that healthcare providers should be required to tell patients about any medical errors. Additionally, 93 percent of Iowans “somewhat agree” (30 percent) or “strongly agree” (63 percent) the public should have access to medical-error information for each hospital and doctor.

Iowans feel strongly that medical errors must not be hidden from the public and should be reported, both to the patient and to an appropriate regulatory agency. Quality of healthcare will only improve when leadership, organizational culture and patient engagement are fully aligned. When seeking healthcare, patients deserve truthful, timely and transparent information about medical errors. Additionally, insurance companies can also contribute by embracing the safety of care their members receive from the medical providers included within their networks.

Our JPS article was published ahead-of-print as an open paper that is available to the public.

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Iowa DOT and Volvo Can Teach Medical Establishment a Thing or Two about Safety

By: David P. Lind

Before I comment about the never-ending problem of patient safety in our state and country, I want to provide kudos to the Iowa Department of Transportation (Iowa DOT) and Volvo for doing a great job of keeping vehicle drivers more safe.

Iowa Department of Transportation

When you drive on Iowa highways, particularly on our interstates, you will invariably see snarky, but clever, messages on 79 electronic message signs that may force a chuckle. You can thank the Iowa DOT and the public for these creative messages. The signs are designed to grab the driver’s attention with messages that are part of the ‘Zero Fatalities’ program the DOT launched back in 2014. The DOT promotes this program through blogs and social media. Additionally, the Iowa DOT pulls together safe driving and improved trauma care through a program called TraumaHawk.

Every Monday, the DOT messages change and relate to five driving categories such as buckle up, drive sober, stay alert, pay attention and slow down. But another statistic is commonly updated – sharing the latest number of fatalities on Iowa roads since the beginning of the year. This one always has my attention. Maybe it’s just me, but I am curious to know whether or not we have fewer fatalities.

I’m impressed that not only are the fatalities counted, but they are quickly shared with the public in ‘real time.’  According to the Iowa DOT website, a ‘fatality’ is considered “crash-related” when death occurs within 30 days (720 hours) of a crash. Complex crash investigations can delay the official fatalities report, so the numbers for the current months are preliminary and can change considerably.

Relating road fatalities with preventable medical error fatalities may sound like a stretch – but it’s not. The federal government and all 50 states have made vehicle fatalities and serious injuries a major safety priority. The design and manufacture of the vehicles we purchase are a direct result of these priorities.

Volvo’s Promise

At least one manufacturer, Volvo, has made safety it’s branded message – and market differentiator. This has been a huge success for Volvo when competing against a crowded field of car manufacturers. One of the visions listed by Volvo on its website is truly an eye opener:

No one should be seriously injured or killed in a new Volvo car by 2020.

There it is. Volvo has declared a zero tolerance for manufacturing unsafe vehicles. Quite an impressive Big Hairy Audacious Goal (special thanks to authors James Collins and Jerry Porras for coining the ‘BHAG’ term).

What About the Medical Care We Receive?

Why shouldn’t we have the same amount of commitment from the medical establishment, the federal government and all 50 states on tracking and reporting unsafe medical care? Great question, but we don’t.

Twenty years ago, the Institute of Medicine’s To Err is Human report was published, sending shock waves around the country that at least 44,000 and as many as 98,000 people die in hospitals due to preventable adverse events. The authors of this report called for developing a mandatory, nationwide system for reporting adverse events causing death or serious harm. Yet two decades later, we still have no system in place on a national basis. About two dozen states require providers to report adverse events, but these events are a narrow range of “never events,” which cover only a fraction of all harm events and errors. Iowa is not one of these states.

Tracking and reporting unsafe care boils down to disagreements on how to accurately measure patient harm. Arguments evolve around defining medical errors and avoidable harm, determining whether deaths were caused by errors or other factors, and heaven forbid, the inconvenience of having to collect this data.

Additionally, there is disagreement about the effectiveness of having healthcare staff voluntarily report adverse events or use other means, such as having automated harm surveillance tools embedded in the electronic health record (EHR). According to a 2011 Health Affairs article, voluntary reporting missed 90 percent of adverse events. It’s impossible to fix safety problems if only 10 percent of errors are observed and reported. Further, surveillance tools in EHRs can be manipulated to suit preference of results.

Apparently, ‘inconvenience’ seems to outweigh any perceived benefits of providing safer care. Seeking better measurements, however, should not hold up patient safety improvement efforts. Provider resistance to public reporting of errors is a big roadblock to making preventable medical errors a necessary reality. Unlike the Iowa DOT and Volvo initiatives, we have no ‘Zero Tolerance’ goal in eliminating preventable medical adverse events in Iowa or the U.S.

A New Relevant Role for Insurance Companies

Because the medical establishment and policymakers are unlikely to move forward to proactively improve healthcare outcomes and eliminate preventable medical errors, true payers – taxpayers, employers and their employees – must take charge. They must insist that ‘middlemen’ such as insurance companies implement initiatives, as I have outlined in my Des Moines Business Record article (2018), to proactively learn more from Iowa patients about their experiences with Iowa hospital and clinic encounters.

As an example, Wellmark can play a much greater, more relevant role – similar to the Iowa DOT and Volvo – and become the insurance company committed to the safety of their members – and not just function as a transactional player that processes claims with unknown outcomes. The premiums paid by Iowa employers and their employees should already include this ‘safety’ pledge that is not being acted upon. When you think about it, insurance companies are the stewards of our hard-earned money. We depend on them to use this money wisely.

Similar to our highways in Iowa today, imagine walking into your local hospital and seeing an electronic display showing real-time results of the ‘zero-tolerance’ program that reports preventable adverse events for that hospital. Now that would be a BHAG!

The next steps we take in Iowa will define our ethical commitment to this public health crisis.

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Physician Conflict of Interest – A Violation of Patient Trust

By: David P. Lind

I have received a number of suggestions from individuals and organizations to assess and write about various healthcare issues that may warrant public attention – or dare I say, scrutiny.

One such topic is featured in this blog – physician income derived from third parties that pay doctors to influence the public – and their patients. Let’s call it what it is – physician conflict of interest.

I was recently contacted by an Iowa physician who shared his concern with me about major conflicts of interest regarding some physicians. His concern: Physician income from third parties, such as drug and medical device companies, influences the prescribing behavior to patients who are unaware of such relationships. As mentioned to me:

There are some physicians who feel that the government underpays for the value of their evaluation and management (E&M) codes, so they feel entitled to make money in other ways.

In particular, there is a specialist physician in the Des Moines area who gives lectures to the public and to other physicians touting some of the newer specialty drugs. This physician prescribes many of these newer drugs to patients…those same drugs manufactured by the sponsors of these lectures. To provide some context, the disease-modifying drugs for the affliction treated by this specialist 25 years ago cost $17K annually, and now costs over $90K each year.

According to OpenPaymentsData.CMS.gov, this local physician made between $459,000-$490,000 each of the last two years from mostly drug companies. Some of this pay, it should be noted, came from “clinical research” for drug companies, but the majority of this pay during 2017 and 2018 ($337,182 and $315,801) came from “general” payments that included giving talks as an ‘influencer’ or ‘thought leader’ expert. This doctor had 321 and 294 payment ‘transactions,’ which equates to an average of over $1,000 per transaction.

It is important to note that Iowa doctors in the specialty I am referring to, on average, earn around $266,000 annually, with income generally derived from insurers and direct patient care.  Given that, it would appear that this physician made more money from drug companies than from patient care. However, it is not likely the patients were aware of that fact and assumed they were prescribed drugs that were in their best interests, without outside incentives. This ethical problem occurs regardless of specialty.

In 2018, drug and medical device companies spent $11.3 million to court Iowa physicians in sales of products that use a physician’s intellectual property, speaking arrangements, consulting, travel and lodging. When ranking all states on the amount of payments made in 2018, Iowa ranks 34th.

A recent article from ProPublica addresses physician conflict of interest on a national basis. According to the article, there are approximately 1.1 million physicians in the U.S., and “more than 600,000” physicians receive payments in any given year from the drug and medical device industry. In fact, each year from 2014 to 2018, “drug and medical device companies spent between $2.1 billion and $2.2 billion paying doctors for speaking and consulting, as well as on meals, travel and gifts for them.”

This same article indicated that many studies have found links between doctors’ prescribing choices and the payments received from third parties. You can draw your own conclusions about whether this is ethically appropriate – especially without full disclosure to patients.

ProPublica reports that despite having the federal Open Payments law that requires companies to publicly disclose the payments being made to physicians and teaching hospitals, such reporting “has not dampened the enthusiasm of the drug and medical device industry for having doctors deliver talks and sponsored speeches or paying them to consult on products.”

This law requires CMS to “collect and display information reported by applicable manufacturers and group purchasing organizations (GPOs) about the payments and other transfers of value these organizations have made to physicians and teaching hospitals.”

To search for payments made by drug and medical device companies to a particular doctor (or teaching hospital of interest), visit OpenPaymentsData.CMS.gov. and input the particular doctor or hospital’s name.

The most important duty of any physician is to act in the best interest of the patient. It begins and ends with ethical conduct that is enshrined in the AMA Code of Medical Ethics. From this flows patient trust which can result in improved medical outcomes. We need transparency safeguards in place to assure that trust is not misplaced.

Being ethical and transparent to patients and the public about any relationship with third parties, such as drug companies, is not optional in medicine – it is essential. Posting these relationships on provider websites would be a good start. No such disclosure was publicly provided by the Des Moines physician in question. Patients should not shy from asking doctors directly about their relationship with various third parties found in the OpenPaymentsData website – monetarily and otherwise. If the doctor appears uneasy about these questions, the patient should think twice about whether that doctor is the right choice.

Whether the Iowa Board of Medicine will take action on physicians who violate ethical behaviors when accepting ‘outside’ income, is unknown. If concerned about a given physician, however, contacting the Board may be worth the effort. Public attention may possibly move the needle to warrant appropriate board ‘action.’

Ultimately, doctors’ primary responsibilities are to patients. Having clear discussions about conflicts of interest can help ensure that patients receive objective and unbiased care. Doctors must earn essential trust, one patient at a time.

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Healthcare Waste – Time to Remove the Blindfold

By: David P. Lind

A recent blog published on my David P. Lind Benchmark website broached the major components of healthcare waste in the U.S. and how it is estimated to impact Iowa employer health insurance premiums that we all pay. A quick summary from that blog provided the following:

According to the 2019 Iowa Employer Benefits Study©, annual premiums paid by Iowa employers and their employees in 2019 are $7,017 for single coverage and $19,335 for family coverage.  Of this amount, an estimated 34 percent may be considered wasted, unnecessary money spent with little to no value. That means in 2019, Iowans are paying an estimated wasted amount of $2,400 for those with single coverage and $6,600 for family coverage – EACH YEAR!

Healthcare waste is endemic of the inefficiencies and the misguided incentives laden within our healthcare ‘system.’ Of course, the ‘waste’ that each of us pay is broadly known as ‘revenue’ and ‘income’ to others. It will be difficult for the healthcare infrastructure to change its way when there is about $1 trillion annually found at the feeding trough of entitlement.

After writing this particular blog, a new survey was released by Kaiser Family Foundation regarding the U.S. Public’s perspective on prescription drug costs. The infographic found within this study is of great interest to me, particularly as it relates to what the public sees as the top contributors to high healthcare costs. It is no surprise that drug companies are considered to be the largest reason why people’s healthcare costs have risen (78 percent), yet, fraud and waste is tied in second place (along with hospitals charging too much) at 71 percent – narrowly nudging out insurance companies profiteering (70 percent).

For our healthcare system to evolve into what the public hopes and demands, engaged discussion must ensue about the waste that is baked into our system. Without this discussion (and outrage), little will change. Removing the public blindfold to begin making these demands is imperative for change to occur.

I was very happy this recent study revealed that the public is now beginning to acknowledge the inherent problems of a poorly-managed healthcare infrastructure that requires a major reboot to keep costs more affordable and tied with better care outcomes.

Although difficult and problematic, reducing and eliminating healthcare waste is the low hanging fruit that we must immediately address.

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‘Surprise’ Medical Billing Must End NOW!

By: David P. Lind

‘Surprise’ Medical Billing Must End NOW!

A big topic in healthcare these days – beyond high costs and expanding insurance coverage through ‘Medicare for All’ – is patients unknowingly incurring ‘surprise’ medical bills at hospitals. This happens more frequently than we may typically believe. It happens anytime and everywhere.

Why does this matter? Because after receiving medical care by a supposedly-covered doctor or facility, we or a family member, may receive an unexpected and very expensive charge not covered by our insurance plan. The surprise comes when another non-network provider has contracted with your in-network provider to perform services on you, the patient. Unfortunately, your insurance plan does not accept this ‘third party’ as in-network, meaning that your liability for their services go beyond what your insurer accepts and pays.

One example of this is having an emergency appendectomy at your local hospital, which is listed as an in-network provider under your health insurance plan. Sometime after this event, you learn of the cost for this procedure, typically by receiving an explanation of benefits (EOB) from your insurer, and any invoice sent to you by the health provider showing your liability (e.g. deductible, coinsurance, non-covered charges, etc.).

However, there is a much larger invoice that sneaks through the mail, from an anesthesiologist, who is not employed by the hospital. The anesthesiologist is an ‘out-of-network’ provider with your insurance company, which means that your insurer will only pay up to the predetermined allowable amount, while the non-covered provider can balance bill you the remainder of their list price (full charges). In some cases, the difference in price can be grossly substantial. The point is, during your surgery, you (and any family member) had no input on which provider(s) would be included in your procedure.

Research by Stanford University discovered that 39 percent of 13.6 million trips to a hospital’s emergency department by privately-insured patients resulted in an out-of-network bill. In fact, during the period studied, from 2010 to 2016, the likelihood increased nationwide from about a third of ED visits in 2010 to about 43 percent in 2016. Additionally, for patients admitted to in-network hospitals, this same study found that 37 percent of 5.5 million admissions resulted in at least one out-of-network bill during this same time period.

A Kaiser Family Foundation Health Tracking Poll conducted in early September indicates that nearly eight in 10 Americans support legislation to protect people from surprise medical bills. In fact, BOTH Republicans and Democrats actually agree legislation should be passed to protect patients. But true to form, lobbyists are fighting this movement because they feel their livelihood is at stake. These detractors are not only medical professionals, but also private equity and venture capital firms that employ doctors and contract them out to healthcare facilities.

A true case in point is ambulance services. Studies suggest that between half and two-thirds of ambulance rides are out-of-network (see graphic by USC-Brookings Schaeffer Initiative for Health Policy).

 

Years ago, large hospitals owned helicopters that would be included in the hospital billing – and covered as ‘in-network’ by insurance companies. However, primarily due to high overhead costs, hospitals gradually sold their ambulance services to private companies. Air ambulance bills began to inflate substantially. For example, according to Dr. Marty Makary’s recently published book, “…between 2007 and 2016 alone, the average price of an air ambulance transport charged by one company went from $13,000 to $50,000.” The examples found in Makary’s book about the grotesque pricing is alarming. In Texas, one air ambulance company charged $43,514 to fly a patient to another hospital that was 50 miles away. The patient’s Blue Cross and Blue Shield plan paid $13,827 of this amount, but the patient was billed the balance of $29,687. This sounds like déjà vu all over again – as we learn what has been happening with prescription drug markups.

Air ambulance companies have increased by 1,000 percent from the 1980s to 2017. For-profit air ambulances aggressively seek to win referrals from EMTs, paramedics, first responders, nurses and emergency physicians, often providing financial incentives for such referrals through informal agreements. According to Makary, the kicker is this: “Eighty percent of the more than half a million air ambulance flights a year (1,300 per day) in the U.S. are NOT emergencies but are much more like routine transfers. In other words, most of the time, these helicopters are taking stabilized patients from one facility to another…” These trips could be performed at a much lower cost with a ground ambulance.

Government payers, such as Medicare and Medicaid, make up a large percentage of air ambulance flights. But by law, private air ambulance companies cannot bill Medicare or Medicaid patients for any amount above what the government pays. It is only the privately-insured patients who are affected by this predatory medical billing practice. This price-gouging is done to people when they are at their most vulnerable. Even if asked up front, most air ambulance services will not share their egregious price before hauling you off into the sky.

Restoring trust in healthcare begins with ending surprise medical billing. Billing practices must be honest, transparent and fair. Ending kickbacks and implementing patient protections is a good start for any provider or service to be allowed to assist patients and the public. State lawmakers can help protect consumers by requiring prices to be at least published – if not controlled. Laws should require air ambulances to inform patients and family members how much the flight is going to cost BEFORE being used. Finally, developing a database that identifies the person or organization who made the decision to summon the air ambulance company will expose hidden conflicts of interest.

Enough is enough with the various industry players hiding behind the cloak of secrecy demanding grossly unreasonable prices to vulnerable patients. This is one ‘entitlement’ program that must go away soon.

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“Alexa, diagnose my cough” – Part 2

By: David P. Lind

Last April, I published a blog about potentially using cloud-based voice services, such as Amazon Echo (Alexa) or Google Home, to serve as artificial intelligence (AI) when seeking a healthcare diagnosis based on symptoms we experience. By merely sharing our medical symptoms with a smart-voice service, we could receive a diagnosis that is based on the latest peer-reviewed medical literature available.

As pointed out in the blog, one cautionary note about using such a tool was the ‘legal liability hurdles,’ such as being HIPAA-compliant (a U.S. health privacy law) – making sure that our private-patient information is being securely transmitted.

This particular hurdle appears to have been cleared. On April 4, the publication STAT reported that Amazon unveiled HIPAA-compliant software allowing pre-selected healthcare companies to build Alexa voice-program tools giving patients access to personalized information such as progress updates after surgery, prescription delivery notifications, in addition to learning nearby urgent care facility locations. Health firms can use Amazon’s Alexa Skill Kit to build voice programs that can create products to transmit and receive patient data.

As mentioned in STAT, “The move will embolden hospitals, insurers, and other healthcare firms to expose Alexa to more sensitive details of patients’ lives and medical conditions, and potentially embed the technology deeper into clinical settings.”

Developments like this one may not be highly-visible to the casual observer, however, it might be similar to a simple mist that ultimately results in a torrential downpour, causing a Tsunami of change.  Who knows, perhaps in just a few short years, ‘Alexa’ and other cloud-based services may actually simplify our daily lives that, today, seem complex and frustratingly lost in unchartered waters.

Hold on tight for the next rush of change that will no doubt disrupt how we will eventually live.

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National Trend – Insurance Companies Investing in Affordable Housing Projects

By: David P. Lind

National Trend – Insurance Companies Investing in Affordable Housing ProjectsIn 2016, Dr. Yogi Shah and I co-wrote a blog about moving ‘upstream’ to make investments in population health, more specifically, the social determinants that impact our health. As indicated in our work, when compared to other industrialized countries, the U.S. spends disproportionately large amounts on medical services, while largely ignoring the living environment that greatly affects the health of our population. We spend considerably more for medical care, yet our outcomes compare unfavorably to those countries.

In the U.S., we have done a great job of ‘medicalizing’ our social problems. But instead of focusing on how to pay for medical care, we would be wise to re-direct our limited resources toward improving basic social determinants of health, such as education, housing, nutrition and poverty.

UnitedHealthcare, the nation’s largest health insurer, and a division of UnitedHealth Group, announced this past week that their program of investing in affordable housing projects has now surpassed $400 million. Since 2011, UnitedHealthcare has invested in 80 affordable-housing communities across 18 states with more than 4,500 new homes for individuals and families in need.

It should be noted that the shortage of affordable housing greatly impacts population health. It limits choices about where people live, often pushing lower-income families to substandard housing in unsafe, overcrowded neighborhoods with higher rates of poverty and fewer resources for healthy outdoor and exercise activities. Further, unaffordable housing can prevent people from meeting other basic needs including nutrition and healthcare.

Not to be outdone, other insurers are also making affordable housing investments. The nation’s second largest insurer, Indiana-based Anthem, has committed about $380 million developing affordable housing over the past decade. Kaiser Permanente, a California-based healthcare provider that also sells health insurance, has invested $200 million to address housing stability, homelessness and other community issues. Blue Cross and Blue Shield of Minnesota, HealthPartners and UCare, all in Minnesota, are also supporting smaller projects to do the same. I’m sure there are other insurers making similar investments elsewhere.

As we all know, healthcare payers are having difficulty controlling escalating healthcare costs. One mindset change is to look ‘upstream’ and find local priorities that are linked to poor health outcomes needing attention. According to one study brief, social determinants account for about 80 percent of health outcomes, meaning that the majority of our healthcare costs can be attributed to non-clinical factors.

Research continues to confirm that unmet social needs are associated with higher rates of hospital admissions, readmissions, and emergency room use. One prime example is that supportive housing has been shown to decrease Medicaid costs by up to 67 percent, which includes reduced emergency room visits and inpatient admissions. Such outcomes can positively impact the private-payer ledger by saving monies paid to medical providers who care for the low-income population.

Investing ‘upstream’ is a smart alternative to the avoidable problems that become more expensive ‘downstream.’ It is good to see that more insurers are also taking this approach.

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