In my holiday fervor, I forgot some key points. Doing a quick lit search brought up this lovely paper from 2008 “Health care reimbursement: Clemens to Clinton” by John T. Preskitt, MD. (John you and I should just settle down and raise a family we are perfect for each other). The answer to my stutter about when fee-for-service originated? It evolved along with Medicare, and was recognizable by the late 1950s. Managed care brought it into full flower.
One more point to be made. A crucial drawback of fee-for-service: profiting from mistakes. If you are thoughtlessly administered a drug you are allergic to–and now you’re needing all the care someone in anaphylaxis gets–you and your insurance will be billed for the privilege. Mistakes happen. Medicine is human. But failure should not be rewarded with money.
Pull quote from Preskitt’s article, which I am nicknaming “Ghosts of insurance past”
Managed care was supposed to create a system that would contain costs while simultaneously increasing the quality of care. Our traditional fee-for-service medicine had led to health care inflation because it encouraged caregivers to maximize the number of procedures they perform, ignoring preventive care. Doctors and hospitals were not paid to keep patients well; they were paid to treat them when they were sick.
The things going on in corporate health care these days. Woo! It’s like my own personal Boiler Room. Our care system is at the point in its spring cleaning when all drawers have been dumped on the floor to sort out the junk for donation, the cleaning products are strewn about, and there’s a half-built really expensive organization system that refuses to fit together. Here come the tears because HOW IS IT EVER GOING TO GET BETTER!
I get the pleasure of interviewing corporate executives, medical directors, and patients all doing the work of trying to straighten this place up — it gives me a great deal of faith that it will in fact, get better. It is going to be messy.
Today’s Upshot by Austin Frakt gives a superb sum-up of the why and what for of Sunday’s $69 billion merger. Two pull quotes below. Dust off your macroeconomics text books, it’s vertical integration in the land of the free (who pay an average of $10,000 a year on health needs). Consolidate. Cut middle men. And as always, gather ye customer base while ye may.
The CVS-Aetna deal would be just another of the many recent mergers across business lines in health care. Insurers are buying or partnering with health care providers. Health systems are offering insurance. Hospitals are employing physicians. Even Amazon is jumping into the pharmacy business in some states. This may be part of the motivation for CVS to buy Aetna — defensive jockeying to maintain access to a large customer base that might otherwise begin to fill drug prescriptions online.
One source of optimism: Research shows that coordinating pharmacy and health benefits has value because it removes perverse incentives that arise when drug and nondrug benefits are split across organizations. When pharmacy benefits are managed by a company that’s not on the hook for the cost of other care, like hospitalization, it doesn’t have as strong an incentive for increasing access to drugs that reduce other types of health care use. That could end up costing more over all.
As a postscript, I know the first thing that comes to mind when seeing “billion dollar merger” is monopoly. We hate those. With intact heavy regulation, however, monopoly is not at the top of my nightmare list for the health care industry. What is? Corporation as person, with all the legal rights of, and free from the deterring power of class action legal suits. That keeps me up.
I want to credit the journalists, academics, and my fellow healthcare providers who continue to write in this inhospitable-to-truths environment. I don’t know how you do it.
I’m hotter than a billy goat in a pepper patch. I can’t put it together. I can barely speak.
On this blog I’ve made the turn from facts to feelings in the last 100+ days, likely because facts seem to have suffered a fatal blow in this unrecognizable version of the world.
Here’s my feeling: I just left CancerCon (post in process), a group of many hundred sparkling, talented, mutually supportive young adults with cancer. Every last one of them contributing and (this is my bottom line) not any less human than before they got sick. THROUGH NO FAULT OF THEIR OWN. I’m one of those hundreds.
The Affordable Care Act was my civil rights legislation. Its “replacement” is the repeal of my and my legion of patients hard fought and nightly worried over civil rights. To adequate care. To freedom from unnecessary physical suffering and premature death and disability. Freedom from fear of sinking ourselves and those who love us into destitution to pay for our care. That’s all I have for now.
Am I less than my healthy counterpart? Is my humanity so easily disregarded by my country?
Health care is life. Losing your insurance because you need care is punishment for getting sick.
I know my fellow old timers in the health care business can remember a time when patients would ask, beg, plead to not be given a diagnosis (something necessary for billing in a fee-for-service system) for fear of losing their health insurance. Times when we had to cross our fingers and hope that insurance companies couldn’t find some byzantine path to link a new diagnosis to a pre-exisiting condition and leave the patient with the full tab. In the few short years since the protections of the ACA have been in place the relationship between health care providers and patients (the beneficiaries) and their insurers (the payers) has lost the vicious antagonism recalled by the fraud investigations Xeni Jardin went through.
Insurance companies as good capitalist participants had incentive to deny deny deny. With the regulatory protections of the Affordable Care Act they are doing what all good capitalist entities do–look for other ways to reduce costs. Anyone on the population health tip? Insurance companies are attempting to lower their costs by improving overall health of their subscribers. IMAGINE! You may have noticed a gym membership benefit. Money off your premiums for getting a check up? Maybe a nurse from your insurer has called you to discuss managing a chronic condition. It is very much still in the proof-of-concept stage, but people can we agree that incentives for healthy behavior are better than punishments for being sick? THANKS OBAMACARE.
Post Script: Does anyone remember the late ’90s movie The Rainmaker? You know, novice lawyer Matt Damon going for broke for a man dying from Leukemia, his family in bankruptcy, because his insurance company refused to pay for treatment. The way teenage me loved that movie was kinda prescient, huh. But I digress.
Losing the protections of the ACA=losing lives.
No big story here. I got myself some Obamacare.
Except this is a life changing event for little-old lupus having me who in my early 20s could not imagine a day when I was not somebody’s full time employee and/or spouse. I feel like some dependent wife in the fifties who needed her husband’s signature to get money out of the bank–and now I’ve got my own account! I get to make my own choices and I get to pay for them. Jerks.
Since the age of 18, I’ve lived my life according to where I can find health insurance next. A pre-existing condition meant that if I did try to buy coverage prior to the ACA I would be shown the door. Just like trying to buy life insurance: nothing, at no price, was on offer. I’ve kept jobs I hated and made major relationship choices with fear of dying from lack of health care in the back of my mind.
Sounds dramatic! But it’s also true. I function pretty healthily as a productive part of a family and economy as long as I have access to specialists and medications. This primary level care keeps my organs functioning with regular blood tests, cheap prescription drugs, expert medical advice, and the will of fate. Without it I would pretty likely begin to lose major organ function and become disabled, a net negative as I relied on social security disability, then after that absurd waiting period (during which let’s say I develop end stage renal disease requiring dialysis), draw heavy on Medicare and Medicaid for tertiary level care. I have a dependent too, so add in my scant but still worth mention social safety net benefits. Let’s be honest, with ESRD and a not-hot candidacy for transplant I’ll probably be dead in 5 to 10 years, leaving social security to pay them death benefits to my child.
Grim! And I’m keeping it purely economic. There are people who would miss me and I don’t want to be disabled and for sure am afraid of dying young.
So back to my Obamacare. I bought coverage this week. I will get to see the people I need for this next insurance cycle! The site only crashed 4 times! $450 a month covers me and the wee one. I’m getting a chance to try my hand at freelancing. I. Am. So. Thrilled. (I’m still in working in the hospital, just not in a position that offers benefits) The threats of repeal feel like real violence against anyone with a pre-existing condition. They also motivated me to take the leap while the net was still intact.
I try to keep it clean most of the time but given his flippant threat to my life I’d like to say fuck you to Tom Price. ✌️
Source: Insurers Can Reduce Drug Prices, If Policymakers Let Them
Wading into the waters of prescription drug pricing. Interesting article, but I’ve got some counterpoints. Health consumers are not the same as, say, durable goods consumers. You want a kitchen remodel, but you won’t unexpectedly wake up in a home store having purchased a Viking range. God forbid you pass out at the home store and wake up having blown a kitchen’s worth of cash on a high dollar antibiotic to treat your MDRO infection. Apply capitalist principles sparingly.
As a patient who had the unfortunate occasion to met her max-out-of-pocket ($6000) after a cancer diagnosis, I want to keep policies that limit an individual’s financial liability should something devastating happen to their health. Even with that protection I was a hair’s breadth from becoming a medical bankruptcy statistic.
We also need the policy that mandates insurers cover drugs that fall into six therapeutic classes: “anti-retrovirals; immunosuppressants when used for organ rejection; anti-depressants; anti-psychotics; anti-convulsant agents; and anti-neoplastics.” BTW, this began as Bush II era Medicare Part D policy.
As far as physicians making a percentage of the cost of drugs administered in their offices, I agree with the author; Conflict of interest much?
I disagree with the author’s concluding statement that insurers must have the ability to restrict access to drugs in order to negotiate lower prices. Patients dying for lack of lifesaving drugs is a thing we should happily put in the past. Regulating the pricing and equitable access mechanisms of the pharma industry (similar to insurance companies and health care providers) would be a more righteous path.
I know, easy for me to say.
Also, the check the author’s note: Dr. Howard has received grant support from Pfizer, Inc. Gotta love those disclosures.
The president got published in JAMA! This is a lovely, academic, chock-full-of line graphs sum up of the past 6 years of changes. Uninsured rates are way down, access and quality measures improving. The economy has responded positively. The health care world is topsy-turvy, and it is undeniably rough in the ranks of hospital management. But in spite of the challenges to the health care industry, the protections that the Affordable Care Act legislation provided make me as a believer in health care as a human right happy. And very frustrated with my home state and others that have declined to expand Medicaid.
It’s strange and sad that I celebrated the upholding of the ACA in the office of a Free Clinic where I volunteered, thinking it might be the end of clinics covering adults below the federal poverty level with a patchwork of volunteer services, state funds, and grants. I’m sorry that virtually nothing has changed for the patients we saw at that clinic. Hospitals in non-expansion states are still going uncompensated for millions of dollars of care. The federal government DSH (disproportionate share hospital) dollars that used to support public hospitals with large numbers of uninsured have declined as that money was plowed into ACA program support. One last insult: if you are paying federal taxes in a non-expansion state, your money is fed into Medicaid for adults in other states, while your health infrastructure is starving. But that is not the main focus of the article. This is a celebration. A statistically-backed victory lap. But don’t take my word, listen to Barack Obama, JD:
The United States’ high uninsured rate had negative consequences for uninsured Americans, who experienced greater financial insecurity, barriers to care, and odds of poor health and preventable death; for the health care system, which was burdened with billions of dollars in uncompensated care; and for the US economy, which suffered, for example, because workers were concerned about joining the ranks of the uninsured if they sought additional education or started a business.
Source: United States Health Care Reform: Progress to Date and Next Steps | JAMA | JAMA Network