Transparent as mud

New regulations for hospital price transparency may not create the price comparisons and consumerism the Trump Administration is seeking to spark.

While the regulations will require hospitals to publish all of their general price information, there is a critical piece of information missing that is key to consumers taking action: the out-of-pocket cost they will actually pay under their insurance plan.

Without that kind of timely information — the regulations still need to be written – it will be next to impossible for consumers to actually price compare and make an informed decision.

As a recent Kaiser Family Foundation/Los Angeles Times survey found: 67 percent of the American people say it is somewhat or very difficult for them to figure out what a treatment or procedure will cost them.

44 percent said they had difficulty determining what they would actually have to pay.

40 percent had problems figuring out what was even covered.

Even with the right information, larger medical expenditures usually occur when people are in a medical crisis and dependent on physicians to direct them to the hospitals, specialists or tests they need. The price transparency of the latest regulation can be helpful, but is not expected to be a panacea.

Health Care WOES and WORRIES

Americans are worried about their health care In poll after poll, and in studies both short and long, health care, its costs and its quality, rank among the foremost concerns. Those worries also play a significant role in the patient experience, influencing decisions about when and where to seek treatment, or perhaps to delay it, because of worries about cost and access and the impact of the bills that follow.

In mid-June, Kaiser Family Foundation polling on health care found: Americans consistently put health care costs at the top of their list when it comes to health care issues they want the government to address and for political candidates to talk about.

Some insureds report difficulty affording routine costs of health insurance.

Half of U.S. adults say they or a family member put off or skipped some sort of health care or dental care or relied on an alternative treatment in the past year because of the cost, and about one in eight say their medical condition got worse as a result.

About one-fourth of U.S. adults (26 percent) say they or a household member have had problems paying medical bills in the past year, and about half of this group say the bills had a major impact on their family.

Individuals with employer-sponsored insurance coverage are not immune to problems with health care costs. KFF polling finds individuals with employer- sponsored insurance, especially those in high deductible plans, have difficulty affording their health care or health insurance.

The Walmart Way

Giant retailers continue to use their clout in the marketplace with health care programs that handpick certain providers for cost and quality.

Walmart, an aggressive player in the space, has begun using multiple data points to compare physicians and direct care to specific providers, according the Wall Street Journal.

Some of the more compelling findings include:

  • Walmart — and other large companies — are examining data from public records and their own health plans, and tapping consultants, to compare individual physician costs.
  • The top physicians Walmart chooses sport the best results at the most competitive costs.

The company excludes or shies away from others with poor performance metrics.

  • More than 5,000 Walmart health plan members have visited hand-selected physicians. The company’s health plan covers travel and medical costs to pair employees with these top physicians for procedures like surgery and cancer care.
  • Lisa Woods, senior director of U.S. healthcare at Walmart, told WSJ that the results from choosing top physicians have made the strategy vital. While health plans have narrowed provider networks for their plans, the selection has largely focused on hospitals and physician groups rather than specific physicians.

It’s working. Harvard Business Review reports Walmart, Lowe’s and McKesson Corp. saved about $19.4 million in 2017 when their employees saw specific spine and joint surgeons picked by the employers.

Robbing both Peter and Paul to pay for health care

For many Americans with employer-sponsored health insurance, affording that coverage seems a bit like getting their pocket picked twice.

From one pocket, their portion of the premium seems to escalate with each annual renewal. Then, from the other pocket, they get less for that higher premium, as out-of-pocket spending minimums and co-pays are also increasing.

It’s a double-whammy affecting large portions of the 150 million people under 65 who receive health benefits from an employer sponsored plan. A new study released by The Commonwealth Fund looking at increases in 2016-17 found: • An estimated 23.6 million people with employer health plans spent large shares of their annual income on premium contributions, out-of-pocket costs, or both in 2016-17.

  • Of these, 13.3 million spent 10 percent or more on premiums alone, 6.2 million spent 10 percent or more (or 5 percent or more if they have lower incomes) on out-of-pocket costs excluding premiums, and 4.1 million reached both of these spending thresholds, meaning they were saddled with high premiums and high out-of-pocket costs relative to their income.
  • The typical household spent about $2,200 annually on their health insurance premiums. Some spent nothing, while others spent $8,000 or more. Median out-of-pocket costs for families were $800 a year but families at the high end of the range spent $5,000 or more.

At the national level, the spending midpoint, or median, on premium contributions and out-of-pocket costs combined was $3,700. Households at the high end of the range spent $12,080 or more.

The degree of increases in premiums and out-of-pocket expenses are also greatly affected by variances in state regulation. In Wisconsin, for example, median spending on premiums and out-of-pocket expenses was $4,400 annually, though nearly 2 percent of households paid more than $11,500, while in neighboring Minnesota and Michigan, those costs were $5,200 and $12,900, and $3,500 and $11,000, respectively.

Hey! That’s my job!

As the radical rhetoric around reforming health care grows louder, there remains a very practical impediment to major restructuring of the industry: Jobs.

Sure, there are billions of dollars that can be saved from both employer-led and government-backed reforms of the health care. But few voices, save a couple of pundits and failed presidential candidates, have given voice to the jobs issue.

Understandable, given that by some estimates, as many as 2 million people could lose their jobs if a proposed “Medicare for all” reform is imposed.

A recent analysis by Kaiser Health Network suggests we should learn to accept the job losses that will come from reform, whatever form it takes.

“It’s true: Any significant reform would require major realignment of the health care sector, which is now the biggest employer in at least a dozen states. Most hospitals and specialists would probably lose money. Some, like the middlemen who negotiate drug prices, could be eliminated. That would mean job losses in the millions.

“Though it will be economically painful, the point is to streamline for patients a Kafka-esque health care system that makes money for industry through irrational practices.

After all, shouldn’t the primary goal of a health care system be delivering efficient care at a reasonable price, not rewarding shareholders or buttressing the economy?” the analysis states.

The more fundamental the reform, the more dramatic the economic effect. Yet, it’s hard to imagine too many folks shedding a tear over the end of $35 million pay packages for insurance company CEOs.

The changing face of health care

A lot is changing in health care, and many will argue that much more needs to change. One change you may have already noticed is the doctor – millennial doctors are in the workforce, and the stereotype of the physician is changing.

A recent post by Publicis Health shows this latest groups of physicians are:

  • Increasingly diverse — 44 percent of U.S. medical school graduates in 2018 were of a racial minority background.
  • Millennial women — 61 percent of physicians under the age of 35 are females.
  • Digital-focused — They’re adept at practicing medicine with digital tools, like electronic health records and telemedicine.

Shifting practices are also altering interactions between these new doctors and their patients. As patients increasingly behave like consumers, they have to keep pace with their demands for shared decision-making and higher personalization.

Millennial doctors spend over 8 hours a day on screens: 5 hours using electronic health records, and 3 hours more consulting external search websites.

37 percent of them also rely on social networks and message boards for work, compared to 25 percent of their peers aged 55 and above.

The new healthcare providers are seeing the lines between their work settings and everyday lives being increasingly blurred. When they don their “white coat” persona, millennial doctors are aware that they’re always under the microscope.

  • 77 percent of patients rely on online reviews before choosing a physician.
  • 80 percent of consumers trust online reviews alongside personal recommendations.
  • 60 percent of consumers read four or more reviews before deciding on a doctor.

Not much relief in sight

Medical problems contributed to 66.5 percent of all bankruptcies, a figure that is mostly unchanged since before the passage of the Affordable Care Act, according to a recent study published in the American Journal of Public Health.

The findings indicate that 530,000 families suffer bankruptcies each year that are linked to illness or medical bills. The findings are similar to Consumer Bankruptcy Project findings in 2001 and 2007.

The current study found no evidence the ACA reduced bankruptcies driven by medical problems: 65.5 percent of debtors cited a medical contributor to their bankruptcy in the period prior to the ACA’s implementation as compared to 67.5 percent in the three years after the law came into effect.

The researchers reported bankruptcy is most common among middle-class Americans, who have faced increasing co-payments and deductibles in recent years.

Relative to other bankruptcy filers, people who identified a medical contributor were in worse health and were two to three times more likely to skip needed medical care and medications.

“For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse,” Dr. David Himmelstein, the lead author of the study, a Distinguished Professor at the City University of New York’s (CUNY) Hunter College and Lecturer at Harvard Medical School, said.