Planning the Patient-Centered Health Plan for America


Current Issue:

9. The Health Plan for the USA: A deductible equal to the basic costs of routine care

The healthcare debate in the United States has totally become a State issue. It has been blown out of proportion as to insurmountable costs. The liberal left think that health care costs are too expensive unless the government takes over the industry. However, past experience of the government controlling costs in any industry is a failure, whether it be the Post Office, the Rail Roads or the Space Industry. The government has not had any space travel or significant exploration of space since the Mir Cooperative Solar Array (MCSA) was delivered to the Russian space station by Shuttle Atlantis (STS-74) in 1995. Except for Voyager 1 which is currently about 11 billion miles from Earth, and Voyager 2 currently 9 billion miles from home, very little NASA activity into space has occurred. This may be one area that government is ceding to the private sphere. The era of private spaceflight is breaking new ground since June 4, 2010, with the first test launch of the Falcon 9 rocket by the company Space Exploration. Much of the current space activity is done privately. Does this give hope for an economical private post office? Or to a fully private railroad travel industry since Amtrak continues to be in the same economic plight as the USPS? Or to a private healthcare industry?

We have worked on a health plan that would solve the current conundrum on health care in the United States. A small group has met in my office every Thursday evening for 4 hours over three years to come up with a tiered plan that would please both the Liberals and the Conservatives. We believed this would accommodate Americans of every stripe. However, we were unable to find any insurance company that was remotely interested.

Without any funding, our incubator project was terminated. Now with the Democratic Presidential candidates making this a national crisis, we have gone back in our files to update portions for further discussion.

To be realistic, the cost of health care falls into two categories—routine predictable outpatient office and ambulatory care which health insurance makes more expensive—and the unexpected emergency/catastrophic care which requires health insurance.

This has been distorted since hospitals, the highest cost centers, have established outpatient departments that are considerably more expensive than office and other freestanding private establishments including urgent care, laboratory, x-ray, CT, and MRI facilities. When hospitals entered the outpatient laboratory business using their hospital service codes, they found they couldn’t compete because their charges were more than twice that of private establishments. So, the hospitals established two tier charging. A blood count done in the hospital outpatient department was usually more than twice as expensive as one done in their own free-standing laboratory.

We will limit our discussion of these issues to private outpatient care not the high cost hospital centers. Office and outpatient ambulatory care covers three-fourths of our medical problems. As we have confirmed in our own experience, these are more cost effective if paid directly rather than through insurance. The costs would be on the same order as your house or automobile maintenance which is never covered by insurance. Insurance for auto and house are only for catastrophic destruction, whether fire, hail, hurricane, tornados, or earthquakes.

We obtained information on the cost of basic routine (expected) ambulatory medical care which patients normally obtain from their personal physician. These costs can be predicted and would include the office evaluations, baseline laboratory tests including screening for diabetes and lipid analysis, preventive medicine, immunizations, minor traumatic injuries and most extremity fractures. This represents general outpatient or private ambulatory health care. These costs are related to age and can be estimated by each decade of life with slight to moderate increases with each decade. These are affordable with costs which could be less than recurrent utility bills or car maintenance costs.

Humans achieve physical maturity by the third decade of life. Hence our age of majority is generally in the range of 18 to 21 which varies by States from HS graduation, to college or establishing a vocation. Veteran and marital status lowers the age of majority. Driver’s licenses are generally available by the age of 16 although there is a movement to delay this.

Our brain is not fully developed by the age of majority. For the business/professional group this may be after graduate education or a career where the brain has been utilized to near its fullest capacity. Thus, full mental maturity isn’t reached until about the age of 25. Cognition, discriminating judgement, and decision making are occurring during those 5 years. The cost of health care during this period of human development can also be reasonably predictable. Therefore, the risk is insufficient to justify health insurance for basic care which would more than double the cost in this age group. Patients can control the cost of basic health care by dealing directly with their doctor, lab or x-ray facility. The savings can be as much as half the cost of insurance for these medical issues.

Health insurance is only necessary (or even appropriate) for the unexpected costs. This would include surgery, trauma, and major medical care requiring hospitalization. This type of major medical which requires hospitalization/surgery/trauma/or any diagnostic or treatment procedure is generally affordable in the private sphere.

By estimating the cost of basic care, a logical basis for the deductible portion of major health care can be established. This should be a level that prevents overutilization and does not limit necessary care. We found the following ranges met these criteria.

In estimating basic healthcare, we found that a deductible of $200 per year would cover basic health care costs until age 25 or 30 before any insurance was needed to cover medical care such as hospitalization, surgery, trauma or pregnancy complications.

We found that a deductible of $300 per year would cover basic health care costs in the fourth decade of life—the 30s. In the 40s (fifth decade of life) one is subject to more medical issues. Chest x-rays or electrocardiograms or other laboratory tests may be required. This will generally be covered by a $400 per year deductible before insurance would be cost effective. A deductible of $500 in our 50s (the sixth decade of life) would more likely than not cover basic healthcare. A deductible of $600 per year in our 60s (the seventh decade of life) would more likely than not cover our basic healthcare requirements.

These were estimates which allowed for known variations. However, we were able to determine that when paying cash, the costs would be less than half of what insurance is requested to pay. Therefore, to obtain insurance coverage for the known cost of care, health care costs are doubled or even trebled. Hence, insurance is not cost effective for routine medical care but does form the basis for the deductible portion of major health insurance.

This may not be apparent because hospitals may charge up to 8 or 10 times as much as a doctor or outpatient facility would charge for the same procedure. We have observed hospital charges of $420 for a CXR which we did in our office for $40; or charge $380 for an electrocardiogram which we did for $24 in our office. This is why transparency of charges would immediately cause huge drop in cost of health care.

Covering the cost of major medical problems (heart attacks, strokes, diabetes, hospital care in general) does require insurance. Surgery, trauma, cancer treatment, or any critical care also requires insurance. This is a separate issue which should be the only debate that requires national attention.

There are a number of policies available to cover hospital, surgery, trauma, and even cancer care. Blue Shield had such a plan in the past. These seem to be reasonably priced. For the majority of Americans, this would also be affordable. Hence, there is no need to proceed into expensive national health care or in Medicare-for-all. Senator Bernie Sanders’ plan would also eliminate private health insurance, Obama Care, and ACA.s. That would be such a major change in our country and a number of things could go wrong. It could be catastrophic for our country.

A major item of concern would be covering the poor. Who is poor versus who is needy needs to be redefined? This stratum of society should be defined in terms of a standard deviation. One or two SD at the lower end of the bell curve would be in the range of the bottom 10, 12, or 15 percent which could then be defined as poor. A debate would not be productive in our present polarized government when half of our representatives feels that everybody is poor or needs Medicare. In some states Medicaid coverage represents half of society. Defining who is poor should eliminate the constant encroaching of the “needy” society” which is so elusive that the left and the right can never agree on it legislatively. After defining who is poor, the Medicaid program would be employed to cover them.

This gives full coverage to the poor and the rest of us can purchase affordable major healthcare on the open market. The open competitive market will drive health care costs to the lowest possible range. This would be automatic for the health insurance industry which would then become affordable to all Americans.

The Health Plan for the USA (HPUSA) has to neutralize the insurance/hospital/medical complex.

Feedback . . .

Subscribe to HealthPlanUSA . . .

Subscribe to MedicalTuesday . . .

* * * * *

Previous Issue:

9. The Health Plan for the USA: The person insured has to experience all costs.

Whole Foods has begun to implement this type of
high deductible health Plan: HDHP

BASIC COVERAGE

Key features of Whole Foods’ “consumer driven” health-care plan: CDHP

No premiums: After a few months on the job, individual workers get free coverage. For workers with families, free coverage starts after about five years.

High deductibles: $500 for prescriptions and $1,000 for all other medical costs.

Employee accounts: Whole Foods deposits $300 to $1,800 per year, depending on length of employment, to help meet the deductible.

Results: Overall medical claims fell 13% in the first year. About 90% of employees had money left over to use next year.

Source: WSJ research

The Health Plan for the USA (HPUSA) has to neutralize the insurance/hospital/medical complex by not being party to any of its stakeholders.

Feedback . . .  
Subscribe to HealthPlanUSA . . .
Subscribe to MedicalTuesday . . .

HPUSA uses a deductible equal to the average basic healthcare cost for each decade of life which is the uninsurable portion. All additional coverage has a scalable copay to keep the patient in charge.

* * * * *

Past Issue:

The Gallup Poll underscores what’s wrong in HealthCare

Speaker Nancy Pelosi announced a Democratic health care plan last week. About 70 percent of respondents in a new survey said they did not have confidence in their elected officials to lower health care costs. CreditSarah Silbiger/The New York Times (a)

By Karen Zraick | NY Times | April 2, 2019
Let’s dissect this article in the NYT.
Is it irrelevant, fake news, misinformation, misinterpretation
or disinformation?
_______________________________

  Americans Borrowed $88 Billion to Pay for Health Care Last Year, Survey Finds

a) When did borrowing for a service or product become an issue?
About 70 percent of respondents in a new survey said they did not have confidence in their elected officials to lower health care costs.

b) This is not a government function. Price controls are always counterproductive.
The survey also found that one in four Americans have skipped treatment because of the cost, and that nearly half fear bankruptcy in the event of a health emergency.

c) Americans should avoid most ER visits since three-fourths are not Emergencies.
There was a partisan divide when respondents were asked whether they believed that the American health care system is among the best in the world: Among Republicans, 67 percent of respondents said they believed so; that number was 38 percent among Democrats.

d) That’s a liberals believe health care is the best when it is free. In fact, when it is free it becomes the worse.
But Democrats and Republicans had similar responses about putting off medical treatment. Asked if they had deferred treatment because of the cost, 27 percent of Democrats said they had, compared with 21 percent of Republicans and 30 percent of independents.

e) Have you ever heard of anyone dying from deferring a treatment? In socialized countries treatment is frequently delayed for months or even years. Isn’t it better to voluntarily delay one’s own treatment than to have the National Health Service (NHS) or Canadian Medicare forcefully defer your treatment?
[President Trump retreated on health care Tuesday, saying a G.O.P. plan would appear after the 2020 election.] Respondents from across the political spectrum also reported pessimism about their leaders’ abilities to reduce health care costs. About 70 percent of respondents said they had no confidence in their elected officials to bring prices down. And 77 percent said they were concerned that rising health care costs would damage the American economy.

f) This is one area that leftists and conservatives agree on – government can’t do it.
Governments should not try to do it—price controls damage the Economy.
“Our data shows an American public that’s beaten down from this really serious issue,” said Dan Witters, a senior researcher at Gallup.

g) That is Gallup’s interpretation. This underscores that Americans need to study the constitution and economics so they won’t be beaten down by “logic.”
At the same time, 64 percent of respondents said they were mostly satisfied with their experiences in the health care system. When asked if they were satisfied with how well the system was serving Americans generally, only 39 percent said they were.

h) The leftists are convinced that if one has to pay for healthcare, they are not satisfied and any result would not satisfy.
The survey’s authors noted that Americans’ feelings were complicated and at times conflicted. But one thing was clear: High health care costs had created significant anxiety. Even among households earning $180,000 or more a year, a third of respondents said they were concerned about the specter of personal bankruptcy because of a health crisis. (There has been fierce debate among researchers about the extent to which health care costs can be blamed for bankruptcies.

i) Bankruptcies are caused by expensive first dollar coverage of routine out-patient care which is not an insurable expense any more than a car tune-up can be covered by car insurance.
Many American families earning less than that, of course, feel the effects of high health care costs acutely. They are forced to cut back on other expenses to pay for health care, or skip appointments and prescription refills, creating health risks down the road.

j) That’s a leftist interpretation because they think there should be no out-of-pocket costs. But in the NHS and Canadian Medicare with prolonged waiting lists, patients are dying on the wait list. In America everyone can always get emergency care in any hospital emergency department.
Twelve percent of respondents said they had borrowed money for care, including 11 percent of those with health insurance, who may still face high deductibles and other out-of-pocket expenses.

k) It’s the high deductible that saves you enough money to pay for the deductibles and co-pays.
Most survey respondents said they believed that Americans were paying too much for health care relative to what they receive. Asked to choose between a hypothetical freeze in their health care costs or a 10 percent increase in household income, 61 percent of respondents chose the freeze. Those in low-income households were most likely to choose that option

l) This is extremely telling that the poor people don’t believe that you can freeze healthcare expenses to help them escape poverty.
“When we’re talking about health care and the debate right now, it usually bifurcates between the financial impact of health care or the health outcomes themselves,” said Tim Lash, chief strategy officer for West Health, a nonpartisan nonprofit that aims to lower health care prices.

m) Lower health care costs will come when all of us limit our healthcare appetite. Lower insurance costs will only happen when we save by purchasing high deductive plans and pay for our own routine care.
 “But those two things intersect at access,” which can have dire health consequences, he said.

n) Only if you do not save your money by buying HDHPs
The organization believes that Congress should allow Medicare to negotiate directly with drug companies; that there should be more transparency about the prices of medicines and procedures; and that the health care industry should shift toward “value-based care” — in which doctors are paid based on patient outcomes — rather than the current “fee-for-service” model.

o) When government negotiates prices, they always increase.

p) Yes, there should be more transparencies about prices of medicines and procedures. This is automatic in HDHP because the patient pays directly for his care, not a third party. Everything he pays is transparent or he won’t pay.

q) Value-based care happens only when the patient pays directly, never when someone else pays.

r) One can’t have value-based care without “fee-for-service.” That’s the only way a consumer or patient can evaluate the service he purchases. There is no other way that fees will match services—not only in healthcare, but in everything we purchase.

FINAL NOTE: Steve Jobs was asked why he didn’t poll consumers as to what they want. He said there would never have been any iPhones, iPads, or iPods if he had listened to consumers.

We can also safely assume there will never be any healthcare reform based on any results from Gallop polls or surveys of consumers, physicians, nurses, patients, hospital administrators, insurance administrators, medical group administrators, senators, representatives, lawyers, judges. When I was editor of Sacramento Medicine in the 1990s, I had a number of physicians write me with their ideas of a health plan. When I pointed out the fallacy in their plan, they would have a new one to me the next month.  None understood the intricacies outside of their narrow field or specialty.

The public has as little knowledge of the intricacies of health care as they have about the intricacies of iPhones, iPads and iPods.

Physicians may be experts in Medicine, Surgery, Pediatrics, OB, Gyn, etc., but they are ill informed about overall healthcare.

Nurses may be experts in nursing, nurse clinical specialists, nurse practitioners, and nursing administration, but are ill informed about overall healthcare. Great things are done by the professionals in their respective fields with many years of experience combined with an innovative vision. The founders of the Mayo Clinic and the Menninger Clinic are good examples of being innovative in their respective fields after longtime service during which the founders developed an overview and how to improve their specialty but not the entire profession.

So, what is this article?
Is it irrelevant, fake news, misinformation, misinterpretation,
or disinformation?

It’s not irrelevant. It’s relevant to understand prejudicial thinking.
It’s not news. It is fake news to serve partisan interest.
It’s not misinformation but it is information.
It’s not misinterpretation, it is factual.
It’s disinformation or false information deliberately and often covertly spread (as by the planting of rumors) in order to influence public opinion or obscure the truth.

The Health Plan for the USA (HPUSA) has to neutralize the insurance/hospital/medical complex

Feedback . . .
Subscribe to HealthPlanUSA . . .
Subscribe to MedicalTuesday . . .

Past Issue:

The Incubator for the Ideal Affordable Health Plan

HealthPlanUSA is the network concerned with bringing the best available ideas to a unified HealthPlan concept that will help resolve the health care problems in the United States. We think that Dr. Eakman’s goal should be our goal in medicine and health care: Eradicate Politicized Health Care by taking the federal government out of healthcare and privatize it through a system being developed by HPUSA.

Healthcare was affordable when patients paid for their care personably. When I was growing up in Kansas, office calls were one dollar. By the time I finished medical school in 1962, it had gone up to two dollars. A tonsillectomy was $35, and an appendectomy was $75.

Medical School Tuition was likewise affordable. As I recall, my medical school tuition was $175 a Quarter. My student total loan for medical school was $600. It was a struggle to pay this off during my internship. These have risen astronomically because of third party involvement—whether health insurance or student loans. This has compromised the person/patient/student involved to treat these expenses as a personal obligation.

When I entered into private practice in 1970, my Blue Cross/Blue Shield premiums were about $100 a quarter. It was here that I became aware of the extreme inflation in health care costs. Hospital costs in my first hospital were about $500 a day as I recall. I remember trying to discharge a patient when he was well and he insisted on another day to get “more well.”  When reminding him that this extra day exceeded his BlueCross/BlueShield annual premium, he responded “Why should I care since I have the insurance.” I asked him if he had to make a copay 10% or $50 a day, would that change his mind? “Certainly,” he stated, I’d go home right now.”

I also recall an orthopedic patient I was consulting on in about 1990. Just the room and board charge exceeded $2000 a day before any lab work, x-ray charges or surgical fees applied which would make the costs several times greater. The patient was convalescing well, and the orthopedist wrote the discharge order. This was on a December 22 and the patient caused a scene stating that she had out of town guests for Christmas and they could certainly hold the discharge until after Christmas. The extra charge for the four days would be more like six or eight thousand dollars didn’t register on this ladiy as an obligation “since she assumed it would be covered by her insurance. “

We still see advertisements for health insurance with NO DEDUCTIBLES and NO COPAYMENTS. The only way this can be economical feasible, is that the insurance companied have an overseer on each hospital ward or they have their own hospital arm where every order is an Electronic Health Records which can be monitored by anyone in that system.

I’m sure the Gestapo’s of the world wish they had such surveillance. Why do physicians accept such surveillance? This type of medical practice denies Hippocratic medicine where the focus on the patient changes to the focus on society.

If you would like to receive these messages, which are quarterly, and follow the development of a patient-centered affordable health plan, please use the subscription form on the right or at the website.

The Health Plan for the USA (HPUSA) has to neutralize the insurance/hospital/medical complex

Feedback . . . 
Subscribe to HealthPlanUSA . . .
Subscribe to MedicalTuesday . . .

Past Issue:

Understanding the present problem

The Major Current Problems in HealthCare

The $3 trillion health care industry is the only major segment of the economy that is failing, and there is nothing the employer, insurance carrier or government can do about it.

Health care is the only product or service (outside of public education) that has consistently grown worse over the past 40 years, with decreasing customer (patient) satisfaction. Every other product and service in our economy has improved in quality and grown less expensive over time, with increasing customer satisfaction.  (more…)

Past Issue:

How to make Health Care Less Costly

Victor R. Fuchs, PhD of the Stanford Institute for Economic policy Research suggest we should begin by replacing Employment Based Insurance.

Among the most important domestic policy problems in the United States is the high cost of health care, which is estimated at $10 000 per person per year and is at least 50% more than the cost in any other country.1 The annual US total health care spending of more than $3.3 trillion dwarfs spending on other critical services such as national defense ($867 billion) and education ($1.1 trillion).

The cost of health care devastates some family budgets and lives, limits the ability of state and local governments to provide adequately for education and infrastructure, and contributes substantially to the federal government’s deficit and debt. A reduction in health care expenditures by only 10% would free $330 billion each year to meet other public and private needs.  (more…)

Past Issue:

Understanding the present problem

The Major Current Problems in HealthCare

The $3 trillion health care industry is the only major segment of the economy that is failing, and there is nothing the employer, insurance carrier or government can do about it.

Health care is the only product or service (outside of public education and the USPS) that has consistently grown worse over the past 40 years, with decreasing customer (patient) satisfaction. Every other product and service in our economy has improved in quality and grown less expensive over time, with increasing customer satisfaction.  (more…)

Past Issue:

Understanding the present problem

The Major Current Problems in HealthCare

The $3 trillion health care industry is the only major segment of the economy that is failing, and there is nothing the employer, insurance carrier or government can do about it.

Health care is the only product or service (outside of public education or maybe the USPS) that has consistently grown worse over the past 50 years, with decreasing customer (patient) satisfaction. Other products and services in our economy have improved in quality and grown less expensive over time, with increasing customer satisfaction.  (more…)

Past Issue:

The Benefits of the proposal

The Benefits of HealthPlanUSA.Net

  • Healthcare costs are reduced making it more affordable and available to all Americans, thus eliminating the uninsured concerns.
  • Quality is increased by cutting down delays in patient care, thus decreasing unnecessary patient suffering and premature death.
  • Spectrum of a customer market base is increased to insurance and credit providers by the direct digital interface with the patient and service providers.
  • Efficiency is increased by cutting the time between providing medical services and payment to service providers: hospitals, surgical-centers, physicians, pharmacies, laboratories for x-ray, CTs, MRIs, and other diagnostic and treatment centers are all on the same site and transfer of data and funds occur instantly in real time. Secondary and tertiary billing, denial of service and further billing has been relegated to the dustbin of history. This duplicative and triplicate cost is difficult to ascertain because currently this cost is difficult to document or analyze, is not available, is not transparent, or is hidden. Actuaries that are working for large health insurance companies have informally estimated that this will be a 30-50 percent decrease in business office costs for hospitals, physicians and other providers.
  • Choice is unlimited as patients make their own choice on the basis of cost, quality and efficiency. Unless they improve, inferior or incompetent providers will be eliminated more efficiently by the simple procedure of changing providers. This will be more effective than any HMO, insurance plan, PEER review, government program, Medical Board or other overseeing or policing agency can provide, thus saving multiple bureaucratic costs, which further decreases health care costs. Patients monitoring their own health care costs are the most effective, and sometimes even ruthless, cost deterrent. Inferior providers are simply eliminated due to lack of patients and are forced to look for other employment. Some insurance actuaries have informally admitted this could eliminate up to 90 percent of current quality assurance costs.
  • The cost becomes extensive due to provider panels, provider credentialing, the army of nurses and reviewers looking over every hospital admission – reviewing charts daily, controlling every consultation or diagnostic procedure, controlling outpatient consultations and patient evaluations, reviewing and authorizing or denying every surgical procedure, reviewing every CPT and ICD 9 code, and reviewing patient charts for adequacy. Although accurate data is elusive, some actuaries have informally estimated a profound decrease in administrative and bureaucratic cost approaching 80 percent of current surveillance costs.
  • The nation’s $1 trillion privately funded health care costs (of the $2.4 trillion total) will be significantly reduced. Although accurate data is inconclusive, conservative estimates by actuaries suggest the nation’s health care costs should be reduced by at least thirty to forty percent, making health care affordable to all Americans that fall between the Medicaid and Medicare programs. As Medicare goes bankrupt and eliminates 66 and 67 year olds, progressing higher as it follows social security benefit restrictions, which must increase to age 72 which today is the equivalent of age 65 when Social Security was implemented, HealthPlanUSA will easily be able to absorb these unfortunate Americans who have lost an unrealistic, unfunded coverage base.
  • With patients involved and monitoring their own health care with direct access to all their lab work, x-rays, procedures and medical reports, liability will plummet. Malpractice insurance will drop at least 50 percent within one year of experience and for medical specialists, it will be on the order of their car liability or house, fire, earthquake and flood insurance. This will be a huge savings for physicians and other service providers.

Follow this column to learn the latest in HealthCare innovations.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

Understanding the future problem

The Major Future Problems in HealthCare

The clarion call in the healthcare debate is to repeal Obamacare—repeal and revise. When one looks at the investment of time, energy, and lawyering spent over several years on the current rendition, which has caused a marked increase in cost, anxiety in our patients, causing a loss of a doctor they trusted, then being shoved into an HMO which still identifies that as welfare, which combination then causes even more doctors to shun them, because the pay is not better but the regulations are not easily manageable, which in turn increases the overhead costs of doctors, which makes more consultant care off limits, which increases the cost of the family physician to find a consultant in difficult cases, which then makes more family physicians eliminate their Obamacare/HMO/welfare patients, which causes loss of access to healthcare to many sick and needy patients, who are then shunted into community clinics now staffed by nurse practitioners and physician assistants, with no physician oversite any more, lowering the quality of healthcare in America, with lower levels of “healthcare providers” using the laboratory and x-rays to make the diagnosis, since they don’t understand the concept of making a differential diagnosis, which places the hundreds of possible diagnosis in perspective, which doesn’t allow these lower level of healthcare providers to make an intelligent stab at the array of diagnosis to be considered, and then choosing any diagnosis they may be familiar with, possibly shoving the patient to an operation that may make the situation worse, when a simple correct diagnosis could cure this unfortunate patient in less than five days!?!

This circuitous route could cost $35 K (10 or more office visits at $150 or $1,500  + 5 or more laboratory visits at $350 per panel or $1750,  +  a dozen or more x-rays at $350 each + hospital ER visits, avg cost $6500 + CT scans at $900 each + surgery consults at $850 each ) when a more astute physician captain of the health care ship may have made the diagnosis in one visit (est $150) and one prescription ($50).

This is not a hallucination. We have personally seen a surgical miscalculation, with a surgical complication requiring a 180-day hospitalization with $900K hospital bill.

Healthcare administrators talk about a 10 to 20 percent savings or increase in premiums per year.  They are unable to comprehend these 1000 percent variations in costs; the very thing that HMOs were designed to prevent. But it seems they have not been successful in controlling costs.

Government health care will never be able to control costs. Never has. Never will.
We hope the American people will realize this before it’s too late.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

A graded copayment for every level of service Level A: Hospital

The research from HPUSA has elucidated some important clinical statistics to control health care costs. This data is hard to obtain and cannot be automated. It is labor intensive. At this point it is clinical: one on one. When we see large expenditures in health care, we try to determine if the patient is a candidate to be included in our series. We then indulge in a frank discussion of his or her responses to the questions concerning percentage copayment and its effect on the patient’s utilization of health care benefits.

Health care can be stratified into a number of logical tiers. The most expensive and highly sophisticated care is in the traditional acute care hospital. We won’t get involved in any medical-political redefinitions of this level of care such as the somewhat controversial specialty hospital. We were even opposed to the spinning off of Psychiatric Wards to Psychiatric Hospitals several decades ago inasmuch as this lowered the level of care in these facilities for psychiatric patients.

The traditional hospital is like the mainframe computer industry of the third quarter of the twentieth century. Most of the mainframe companies didn’t adapt and are no longer in existence. IBM was the only one that was able to adapt and survive until the most highly sophisticated demands, such as accessing millions of ATMs simultaneously around the world on an integrated network that includes all financial institutions. IBM would not have survived if they had continued to compete in the laptop industry. When they sold their ThinkPad to Lenovo and refocused, they became the world leader in sophistication and problem solving again. We would expect them to develop Watson and compete with live human beings on Jeopardy.

Starting with the highest and most expensive strata of health care, the acute hospital, or the IBM of health care, what is the appropriate copayment for hospital work? The health care insurance companies have various forms of copayment, such as an 80/20 plan in which the patient pays 20 percent of the hospital charges and the insurance companies pay 80 percent. There are also 90/10 plans and those with fixed deductibles that bear no relationship to hospital charges.

There are two problems with these plans. First, few people can pay twenty percent of a $150,000 hospital bill. Even if it’s linked to a line of credit, the credit requirements are extraordinary.

Second, there is little transparency in hospital billing. Insurance companies have various arrangements with hospitals that the patient cannot see. In fact, hospitals have forced patients to go into hock for the 20 percent copayment (which is $30,000 in our example) and meanwhile the remaining $120,000 is discounted to the hospital, sometimes for even less than the patient is asked to pay on their 80 percent share. It may not be unusual for the hospital to take the patient to the cleaners for the $30,000 (20 percent) and accept the usual discounted hospital portion, which will be far less than the rest of the bill. We understand this has come under litigation and the results are not recalled.

With small or no deductible policies, it is not unusual for patients to show us statements indicating that their insurance company was billed $75,000 and the hospital accepted $7500 as payment in full. For co- payments to work effectively there has to be complete transparency. In other words, a patient knows up front what the hospital charges are and will be. This then allows for a percentage copayment to work effectively in controlling health care costs.

For instance, if a patient checks in for gallbladder surgery, he or she is told the usual charge for this procedure is, say, $20,000. And if your copayment is 10 percent, the patient is asked if he wants to write a check or utilize a credit card for the $2,000 copayment.

At this point in time, the patient can make a further assessment of the pros and cons for the surgery. A discussion with the spouse may remind him that his internist thought since he has had no gallbladder attacks, and his one stone was found on a routine exam for another problem, that he should forgo surgery for the present. In fact, they had agreed to wait, but the patient wanted to see a surgeon “for a second opinion.” Even though his internist advised against surgery, the surgeon was very convincing that he should have the operation. The internist had stated that if he hadn’t had the backache and the x-ray for that, they would not have known that he had a gallstone and the question would not have been raised. Now as they were staring health care costs in the face, they recalled this conversation. They had a number of other pressing financial struggles and so at the registration desk, he decided to put the credit card back in his billfold and sit tight for the present, realizing that an emergency could develop. However, his internist had advised him that given the nature of his stone, an emergency was not likely to occur.

Without going into the pros and cons of delaying any medical care, this simple maneuver has placed health care in the Medical MarketPlace and in competition with other finances. The Medical MarketPlace would have prevented the current catastrophic Medicare and Medicaid over utilization and our current health care crises. This further prevents utilization of our children’s finances, which obviously is very unethical. If this weren’t across generation lines, it would easily have been seen as Grand Theft because of the magnitude of the crime.
In our efforts to determine the best copayment that would control health care costs but not prevent necessary health care, we would sit down with the patient in a neutral time and make a determination: If you had a five percent copayment, would you have proceeded with the operation? If 7.5 percent? If 10 percent? If 15 percent? If 20 percent? If 25 percent? If 30 percent? Etc, et al.

Our results indicated that in the majority of cases, a 5 percent copayment did not control costs and allowed over utilization. A 15 percent or greater copayment controlled costs very well, but we felt it prevented some necessary hospitalizations or operations. For the vast majority of patients, a 10 percent copayment controlled over utilization of hospital care rather well but did not prevent necessary health care that would reduce the quality of care.

Hence, in our research so far, a ten percent copayment on hospitalizations was the ideal amount to prevent over utilization and not cause under utilization.

If the health care insurance is further tied to a line of credit at a favorable interest rate appropriate for sick people, that could be administrated by one of the credit card companies, everyone would have access to the highest level of health care.

To read about Level B etc, stay tuned. To purchase a copy of the Business Plan, go to www.healthplanusa.net/bookstore/.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

Planning the Patient-Centered Health Plan for America

Level B: Emergency Rooms, Urgent Care and Surgi-centers

(Continued from April 2011 section 9)

A graded co-payment for every level of service

See April Issue for Level A—Hospitals

Level B: Hospital Emergency Rooms, Urgent Care Centers, and Surgi-centers.

The research from HPUSA has elucidated some important clinical statistics to control health care costs. This data is hard to obtain and cannot be automated. It is labor intensive. At this point it is clinical: one on one. When we see large expenditures in health care, we try to determine if the patient is a candidate to be included in our series. We then indulge in a frank discussion of his or her responses to the questions concerning percentage co-payment and its effect on the patient’s utilization of health care benefits.

Health care can be stratified into a number of logical tiers. The most expensive and highly sophisticated care is in the traditional acute care hospital. We came up with a 10 percent co-payment of the hospital costs as being the best number that did not preclude needed care and was able to allow for needed hospital care. With a 10 percent co-payment, the patient policed his hospital cost better than any oversight institution saving up to 40 percent of usual costs.

The traditional hospital is like the mainframe computer industry of the third quarter of the twentieth century. It became a costly and unmanageable structure. It was salvaged by the competition of the PC industry which made the mainframe industry adapt before essentially all but IBM succumbed. Similarly, the hospital has become the vertical structure for much of health care. However, its costs are not sustainable. Just as most of the mainframe companies didn’t adapt and are no longer in existence, so the vertical integrated hospital will face similar challenges.

The free standing urgent care centers and the surgi-centers are similar to the PC industry causing a restructuring of health care. For purposes of making health care affordable, which in turn will make health insurance affordable, out research indicates that a 20 percent co-payment for these centers was the best number that did not preclude needed care and was not too large so as to prevent needed care.

Hospitals reacted immediately and forcefully by purchasing these centers or building competing surge-centers. In fact the surgeons that owned a surgi-center near our office were told by the hospital that they would like to purchase their surgi-center or they would build a competing surgi-center across the street from them. The surgeons obviously cashed in their investment and re-established a new surgi-center not nearby any hospitals and are operating successfully.

This continues the migration from the vertically integrated healthcare structure to the horizontal competitive healthcare structure. This will occur over time and there is nothing that hospitals can do to stop this restructuring.
. . .  the triple play of the internet, entrepreneurship, and individual capitalism is an unstoppable force around the world, and that Individual Capitalism is the force that will shape the 21st Century.—Entrepreneur Country Manifesto.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

Understanding the present problem

The Major Current Problems in HealthCare

The $3 trillion health care industry is the only major segment of the economy that is failing, and there is nothing the employer, insurance carrier or government can do about it.

Health care is the only product or service (outside of public education) that has consistently grown worse over the past 40 years, with decreasing customer (patient) satisfaction. Every other product and service in our economy has improved in quality and grown less expensive over time, with increasing customer satisfaction.

Health care is the only sector of the economy where prices have been steadily increasing since the end of WWII. Every other sector of the economy is reaping the benefits of Moore’s Law, which states that the cost of digital technology decreases by 50 percent every 18 months. In health care, it is the reverse – less efficient and more costly. For instance, although the Length of Stay (LOS) for delivery of a child has decreased from four or five days to one or two days, the hospital cost has more than doubled. The LOS for gallbladder surgery has decreased from five days to one day, but the hospital cost has doubled. The surgeons’ fees have remained level or even decreased during this time.

Healthcare is totally out of control. Obamacare has made it more out of control. This journal, HPUSA, is our attempt to bring healthcare back into focus. Initial estimates from actuaries are that it will reduce healthcare costs by at least 40% to 50%. We have highlighted examples of this over the years. Welcome to our journey.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

Understanding the present problem

The Major Current Problems in HealthCare

The clarion call in the healthcare debate is to repeal Obamacare – repeal and revise. When one looks at the investment of time, energy, and lawyering spent over several years on the current rendition, which has caused a marked increase in cost, anxiety in our patients, causing a loss of a doctor they trusted, then being shoved into an HMO which still identifies that as welfare, which combination then causes even more doctors to shun them, because the pay is not better but the regulations are not easily manageable, which in turn increases the overhead costs of doctors, which makes more consultant care off limits, which increases the cost of the family physician to find a consultant in difficult cases, which then makes more family physicians eliminate their Obamacare/HMO/welfare patients, which causes loss of access to healthcare to many sick and needy patients, who are then shunted into community clinics now staffed by nurse practitioners and physician assistants, with no physician oversite any more, lowering the quality of healthcare in America, with lower levels of “healthcare providers” using the laboratory and x-rays to make the diagnosis, since they don’t understand the concept of making a differential diagnosis, which places the hundreds of possible diagnosis in perspective, which doesn’t allow these lower level of healthcare providers to make an intelligent stab at the array of diagnosis to be considered, and then choosing any diagnosis they may be familiar with, possibly shoving the patient to an operation that may make the situation worse, when a simple correct diagnosis could cure this unfortunate patient in less than five days!?!

This circuitous route could cost $35 K (10 or more office visits at $150 or $1,500 + 5 or more laboratory visits at $350 per panel or $1750, + a dozen or more x-rays at $350 each + hospital ER visits, avg cost $6500 + CT scans at $900 each + surgery consults at $850 each ) when a more astute physician captain of the health care ship may have made the diagnosis in one visit (est $150) and one prescription ($50).

This is not a hallucination. We have personally seen a surgical miscalculation, with a surgical complication require a 180 day hospitalization with $900K hospital bill.

Healthcare administrators talk about a 10 to 20 percent savings or increase in premiums per year. They are unable to comprehend these 1000 percent variations in costs; the very thing that HMOs were designed to prevent. But it seems they have not been successful in controlling costs.

Government health care will never be able to control costs. Never has. Never will.
We hope the American people will realize this before it’s too late.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

Past Issue:

The HealthPlanUSA Solution

HPUSA is the only true Market-based Health Plan that uses the Internet and Digital Information Technology to bring the Insurance Carrier, Service Providers (Hospitals, Surgi-centers, Physicians, Pharmacies, Diagnostic and Treatment Centers), Patients and Credit Providers together at the same interface, allowing data, information and fund transfers to occur in real time.

The patient takes an interest in making an informed decision at every step of the health care process when he or she has a financial obligation in all decision-making processes-which doctor to see, which hospital to use, which pharmacy to utilize, which laboratory to use for testing, which x-ray facility to go to for diagnostic testing, which therapist to use for physical, occupational or speech therapy. The financial stake is proportional to the cost incurred without limit. Thus, in turn, each service provider will provide the best service for the fee involved in order to assure a continuing customer (patient) base.

This plan cannot be a government plan. It has to be privately financed and funded. It cannot be publicly funded because the stakeholder leaders could never sell it to their stakeholders. Each has a vested interest and is too anxious to see the public good as winning out against their own good. That’s why reform doesn’t take place in the Public Square.

This plan will require a free enterprise benefactor that will help devise, produce, and market the plan so that each stakeholder can make his own decision. Only then will each stakeholder see it for his own benefit, but also for the public at large.

Feedback . . .
Subscribe MedicalTuesday . . .
Subscribe HealthPlanUSA . . .

For other issues, please visit our archives

top