Health insurance, the new math. 4 truths the headlines aren’t telling you

It’s been in the news; Health insurance has gone up more this year than in many previous years (http://wapo.st/oSGpTK). What is refreshing about the story from the Washington Post is that they mention that costs are not only rising for employers, but the costs have also been shifted to employees as well, further squeezing the average family.

Deductibles have risen steadily since 2006, as well as your co payment. The 2011 Kaiser/HRET Employer Health Benefits Survey (EHBS http://ehbs.kff.org/pdf/8226.pdf). The survey shows that since 2001, there has been 113% Premium Increase and a 131% Worker Contribution Increase.

While, most of us have not gone to the doctor twice as much in 10 years, the costs which are blamed on drugs, hospitals asking for more money and for technology are clearly out of control.

Here is what they are not telling you.

1. Most of us have been financially shifted out of more comprehensive plans to less comprehensive plans. This was done by pricing us out of our insurance and moving us into smaller or less comprehensive networks. Many of these networks simply pay doctors less and the ones who refuse, stay in the networks we just left. Many HMO plans now are called open access or POS but allow us to choose our doctor without referral in a more restrictive network.

The overall effect gives the illusion that the costs have gone up only 113%. As employers struggle to pay the increases, of which they have little control, they shift their employees to less comprehensive and expensive plans which seem to give better value. This is a shell game that insurers have used to hide the fact that they have likely doubled or even tripled the original plans until they finally discontinue them due to a lack of subscribers in that particular pool. Would anyone leave a plan that kept the promise of affordable rates through managed care with a network of doctors they are happy with? Is the real rate of healthcare inflation in 10 years 350%?

2. Doctors are being paid less by many of the networks, causing some to leave insurance altogether rather than be worked to death with declining reimbursement since 2001. Many primary care physicians have more paperwork, more hassles chasing improperly denied claims (requiring more employees) while being paid less. Their solution or rather the insurance carriers solution is the 10 minute or less office visit, while the doctor writes a script. Gone are the days your doctor will spend ½ hour with you because that would simply put them out of business. Instead, the brief visits lead to referrals to specialists, tests, and overall higher costs for everyone. Data suggests that in areas dominated by primary care and fewer specialists, costs overall are lower (http://bit.ly/b1ffmK). The paradigm clearly needs to change back to worked better at a lower cost and primary care is part of the answer. Of course, who should be doing primary care and preventative services is another question. There are classes of providers who are better suited to musculoskeletal care that are underutilized, such as chiropractors. They clearly have shown via numerous studies they are part of the cost containment solution. Another idea being circulated is the Medical Home, with idea being doctors are given a budget and a central data base that allows for better communication, better care coordination and payment for quality of services vs. quantity. This model aims to employ all classes of health care providers. It remains to be seen if this will really work, since our current health care paradigm is clearly broken and new providers graduate learning the ways of the current expensive and often ineffective system for those with chronic health problems.

The perverse financial incentives for testing rather than evaluating and examining needs to be examined and primary care doctors need to be able to charge for their time and then be reimbursed fairly for it, rather than financially penalized. On the other hand, if the pendulum were to move back toward primary care, and pay specialists less, more specialists, who have high startup costs via school loans will likely go back to where the money is which would be primary care. Many people who come here from Europe and other countries with different paradigms will tell you there care and the caring is better. Also, when your country is rated 47 in the
world by the world health organization (WHO), but has the highest costs, maybe we don’t have the best healthcare system in the world.

3. Insurance companies are beholden to their shareholders, and not to their insured. Every earnings season, they are showing increases in profits. Part of this is from you and I being shifted into plans that cost them less to provide and cost us more because of higher co payments. The MRI that you had 3 years ago which the insurance companies negotiated rate was $689 if you were insured and $1400 if you paid cash (insane, isn’t it for an hour test on a machine that has been paid for in many cases many times over) and now, because of the way your plan is structured, you no longer have this covered under your copay, but it goes under the medical deductible portion of your plan which is likely to be $1500 or more if by some chance you are hospitalized. This costs the insurernothing and chances are, unless something bad happens to you, you will likely never reach that deductible meaning the insurer pays nothing but gets you the discounted rate for the test that you pay for out of your own pocket. Of course, insurance companies are managing risk but wasn’t part of the manage in managed care to manage costs too. Like a mismanaged government, they have created the expensive systems doctors have
been economically pushed into (the dysfunctional paradigm) and now since they are out of answers, they are further trying to fix it by standing behind the medical home model (http://bit.ly/g5fXC0), which can help reduce costs however, within the same broken paradigm that brought us to where we are now. The definition of insanity is to do the same thing over and over and expect a different outcome. Other than some window dressing and a smaller budget for care, I am not sure the medical home will fix the problem, while it creates the illusion that
we are indeed doing something different.

4. Medicaid cost shifting – While this is rarely spoken about, Medicaid has put many inner city hospitals in financial jeopardy. It underpays everyone, under our dysfunctional healthcare paradigm, and then doctors and hospitals shift the costs on to the private healthcare system. This is a major cost driver for everyone, and with the presidents attempt in the new healthcare plan to insure more under this plan, it will insure more people but push the costs up for those in private healthcare plans. Most physicians will not be able to raise their fees, and will simply pass on the cost saving Medicaid HMO plans. The ones who will likely take these plans are the inner city clinics and hospital system clinics who can keep these profits within the hospital systems. This cost shifting is at the root of it all dishonest, however, so is paying for care at a level that most doctors will financially choke on. A Single payer system or Medicare for all can help stop some of the insanity, eliminating the need to cost shift. It also removes the need for a profit and since it would give people a cradle to grave safety net, less people are likely to be bankrupted by unreasonable medical fees. Also, Medicare will if we allow it , be able to negotiate costs for medications which continue to rise, as compared to other countries that have more comprehensive and less expensive healthcare systems, but are much higher on the WHO list. Could it be possible we should be learing from them instead of creating the Medical Home model? Maybe insurers should be insuring beyond the basics of what a Medicare provides, as a supplement. This is a model that does work for many seniors.