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Friday, March 10, 2017

Rationing by "Price"

HHS Secretary Tom Price, that is.

I knew this would be coming.
MH Exclusive: Price backs balance billing for Medicare patients
By Virgil Dickson  | March 9, 2017

HHS Secretary Tom Price is backing legislation that will allow physicians to bill seniors for charges that are more than the rates approved by Medicare. He claims the move would draw more physicians to enroll in the program.

In correspondence between Price and the Senate Finance Committee provided exclusively to Modern Healthcare, Price said he supports enacting such a law, which several physician groups said could backfire...
Rationing by "Price."
...Representatives from the American Medical Group Association and American Academy of Family Physicians said that the approach might lead providers to limit their Medicare patients to those who agree to balance billing,

The change in law could be “a little dangerous,” potentially creating inequitable access for low-income people, according to Shawn Martin, senior vice president for policy at AAFP.
Those lovely Paul Ayn Ryan Health Savings Accounts (HSAs) had better be chock full of money.

From the Wiki:
Contribution limits
Taxpayers can generally make contributions to their HSA for a given tax year until the deadline for filing the individual's income tax returns for that year, which is typically April 15. All contributions to an HSA from both the employer and the employee count toward the annual maximum.

I did a quick random (and "unscientific") px/tx search of the Healthcare Bluebook the other day on some medical encounters, and dropped the results into an Excel sheet.


Now, those are current, payor-independent estimates of inclusive "fair prices" for my ZIP code. Some of the foregoing are empirically associated with age-correlated chronic disease risks, and some might result from your being in a serious, random accident. Get in a bad car wreck, and you may well end up in the hospital with concussion and having to have multiple fractures repaired -- and maybe get a case of iatrogenic sepsis as a bonus.

It is not clear how individual encounter item costs might change under an unrestrained "balance billing" market. One thing is fairly certain; given that Medicare is pretty much the payor benchmark for claims reimbursement, we can expect that commercial insurors will alter their policyholder contract language to follow suit -- e.g. when I had my lovely prostate cancer dx/px/tx experience in 2015, I had to have a diagnostic "endo-rectal coil MRI" at Muir. The "chargemaster" (i.e., accounting fiction "list price") was just shy of $3,000. They accepted the contracted BCBS claim rate of about $890. Prior to that, I got sepsis (ugh) from my prostate biopsy, and spent two nights at Muir Hospital in Walnut Creek. Medicare (Part-A) eventually paid them about $14,700 for my two inpatient days (exclusive of my ER, hospitalist, and urologist's inpatient visit charges). I am not privy to Muir's "chargemaster," so I have no idea what their "list prices" were for that episode. Suffice it to confidently speculate that, under a "balance billing" regime, I'd have been on the hook for a ton of net balance money.

Obviously(?), the fundamental underpinning "Free Markets Uber Alles" GOP assumption here is that provider "competition" will serve to minimize "list" prices -- and by extension "balance billing." Patients will simply "vote with their wallets," gravitating to the lowest cost clinicians. Nonetheless, the bottom line is that patients will pay more out of pocket, given that it's unlikely that Medicare or other payors will increase their reimbursement dx/px/tx rates.

See my prior post "Put patients back in control of their health care." Also my short riff on the just-released draft GOP AHCA.

I'd love to have the views of the eminent medical economist J.D. Kleinke and the always-insightful health care futurist Joe Flower on this stuff.

My initial snarky Twitter reaction to the AHCA:


More later. Gotta go. Today is my Muttville.org volunteer day. Woof.
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UPDATES

First, seen on WaPo


Joe Flower has posted some excellent thoughts at THCB.

An Open Briefing For the President’s Economic Advisors (And Concerned Members of the House & Senate)
Subject: A brief on healthcare economics. (8 minutes)

 o Why healthcare economics are different.
 o Why the ACA is failing.
 o What would work.

Who I am (credentials): Independent healthcare author and analyst since Jimmy Carter’s administration. Speaker, consultant across the industry at all levels, including insurers, hospitals, device manufacturers, employers, Veterans, pharma, World Health Organization, Department of Defense. Look me up: ImagineWhatIf.com. Books on Amazon...
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ALSO OF NOTE

apropos of ACA repeal, see my prior citation of the interesting book "Obamacare is a Great Mess."
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More to come...

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