My note below on HSAs, negotiation and CPTs was put, in a somewhat different form, on Sully’s blog. It provoked quite a bit of criticism, some of which was because I was typing on emotion and didn’t make myself clear. A few retorts:

1) There is a massive incentive for insurance companies to streamline the insurance process, which is just as costly and expensive for them as it for providers. There has just not been the will. The insurance companies spend most of their time dealing with politics and trying to screw providers. Customer service is just not in their vocabulary. Breaking down barriers to interstate competition would help.

The government system, by contrast, simply vomits out money without confirmation, which is why it is riddled with fraud. That’s not an improvement over the current byzantine billing system.

2) The risk manager’s rejection of HSAs as a way to “rig the system” misses the point entirely. The point is that when people are paying the first few thousand dollars of their healthcare bill, they will have a reason to forgo unnecessary procedures. The idea is to cut costs. When people have to pay the first few thousand of their healthcare expenses, they will much smarter about spending that money — just the way they are smart in spending money on TVs, cars and groceries.

That’s not just wishful thinking either. Read here for a recent study that showed that consumer-based plans cut costs and control cost increases without sacrificing quality of care. Contrary to common belief, people are more likely to engage in preventative care and less likely to spend their money on woo like aromatherapy (which has an insurance mandate in a few states) when it’s their dollar at stake.

I’m aware that HSAs have problems. But they are also only five years old. If conservatives wanted to cut some left-wing program after five years of complete failure, let alone mixed success, they would be pilloried.

3) I’m well aware that most practices make billing opaque and that any procedure has multiple providers. As an example, the hospital gave us an estimate of $4500 for my daughter’s birth. The actual bill was $22,000 because her birth ended up being complicated (inducement, epidural, C-section) and they could not provide fees for other providers. I asked for and got an itemized bill, which was very long and difficult to follow even with my background.

Of course, attempts to simplify hospital bills have run into a firewall from the insurance companies who see streamlining the process as a way to cut provider fees. The reason hospitals bill the insurance companies for every aspirin is because they have no choice. It’s a war to get the companies to pay what they’re supposed to.

The fundamental problem is that the patient is not the customer in our healthcare system, the insurance company is. None of the current reforms, apart from HSAs, change that. And creating a single payer system will make the government the customer, which is even worse.

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In the end, the more I read about this debate, the more depressed I get. It just seems like everyone’s focus is “I want all the healthcare I need but someone else has to pay for it.” The people who are bitching today about the cost and opacity of healthcare will, tomorrow, be complaining about wait lists and rationing.

These people completely fail to understand what health insurance is about. It is not some magical black box that gives you free goodies. It’s a way of defusing large costs over many years of premiums. It’s a way of sharing risk so that you aren’t bankrupted by a catastrophe. In the end, even a “public plan” — if it’s honest — has to take in as much money as it spends. There is no magic involved.

(I’ll never forget, when I was in grad school, the befuddlement some students had when told that having an option on their insurance to pay for birth control pills would increase their insurance rates precisely the amount that the pills cost. Where did they think the money for a planned, controlled expense would come from? The common refrain was, “Well, I’m saving them money by not having babies!” which was even more ignorant. (1) Insurance companies make money when they get to insure more people, especially children; (2) a baby is not going to cost the insurance company nearly as much as it will cost you. You have more incentive toward birth control than the insurance company does.)

I simply have no common ground with the people who want magical money. I have never bought into the endless sense of entitlement people have when it comes to medicine.

PS – Good counter-programming here. There is one intolerable piece of ignorance, however. Doctors do not order unnecessary tests and procedures for their financial benefit. Those services are usually performed by other providers and financial kickbacks are illegal. The problem is not greed doctors but patients who have no incentive to decline a test of marginal utility. Also, the 100,000 dead from medical error figures is probably ten times too larger.

Other than, it’s really really good.

Sullivan’s blog continues to wallow in ignorance and sob stories — which has become de rigueur for how healthcare is debated these days.

To respond:

The complicated CPT codes were created by the AMA to standardize medical billing. If we did not have them, then insurance companies (and Medicare) would not be able to create fee schedules. To complain about them is asinine. Most practices I worked in could give you an estimate of expected medical costs (at least from their end) because the computers bring up the price immediately when you punch in the code (although not necessarily your insurer’s fees).

No one in their right mind would use a prose procedural description to bill as it would result in six thousand mails between insurer and provider clarifying exactly what was done. The CPT codes allow the insurance company to know precisely what was done and to bill accordingly. It’s never as simple as “we delivered a baby” or “we took out his appendix”. Every procedure has variants that need to be clarified. CPT allows this.

Also, the point in that post — and others — that insurance companies can reduce doctor’s fees by huge fractions while the uninsured can’t? Pure unadulterated bullshit. I’ve personally written off massive amounts of healthcare bills and have negotiated — from both ends — medical prices. One of the beauties of HSA’s is that they have given patients the incentive to negotiate directly with medical providers to reduce fees. It is frequently very easy to get a provider to knock off a significant percentage of a bill if you ask before the service is done. Or even after. They’d rather get paid something than turn you over to collections. The only people I ever turned over to collection were the people who would not respond to the letter and calls asking them to set up a payment plan — any payment plan. Even then, we occasionally took a collection claim back when someone paid us.

(That last point does color my perception of this debate and the letters Sully is printing. I read them and they sound very similar to the deadbeats from whom we would not hear until they complained that we’d turned them over to a collection agency. I don’t know what it is about healthcare; but no one wants to pay for it. No one has any perspective. People who will gladly pay $400 for a Blu-Ray player think $100 is unreasonable to get a check-up. People who will pay $50,000 for a car think $10,000 is too much to save their life. Working in the profession tends to drain your sympathy. I try to guard against it but I’m not sure I’m 100% successful.)

I am also sick to death of hearing people rave about how great their “free” healthcare is. Your healthcare is being paid by other people. Now maybe that’s a swell idea — I don’t oppose helping people in need. But don’t ask me to be surprised that you love it when somebody else pays your bills. And don’t pretend that it’s a sustainable model for running the country (or perhaps you’ve missed the trillions of dollars in Medicare debt?).

There are also two letters from HIV-positive people who are chained to their employers and their insurance. I’m not sure what this has to do with anything. The only alternative is to put HIV-positive people on the public dole — or do it by proxy by forcing insurance companies to cover them and bill everyone else for it. The one thing that would help people — eliminating the employer tax deduction to make insurance more mobile — is opposed by most in Congress and most in the punditsphere.

That’s two letters to Sullivan this week:

Continue reading Yet Another →

I just fired off an e-mail to Andrew Sullivan in response to his column on healthcare. Full text below the break.

I do see an eerie reprise of his attitude toward Bush. Sullivan was almost worshipful of Bush early on but turned on him when Bush turned out to be an incompetent nincompoop who betrayed every aspect of conservatism. I think he’s once again become entranced by a President who’s a decent guy.

Look, I like Obama. It infuriates me when people describe him as evil or a socialist or, God forbid, not born in this country. I’m opposed to most of his policies and all of the domestic ones. But he’s the opponent, not the enemy. With a Republican Congress — correction, a sane Republican Congress, not one comprised of the current looney-tunes — I think he’d be like Clinton II, only with his pants zipped. I could live with that.

I agree with Sully that sometimes Obama seems like the only adult in Washington. But that doesn’t make him right. Sometimes the childish ignorant lunatics (i.e., the current GOP) are right. And this is about policy, not bedfellows.

Continue reading Sully On Healthcare →