The KHIT Blog: Rationing by "Price"

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...

__

ALSO OF NOTE

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

"AHCApocalypse Now!"
____________

More to come...

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Brave New Health

Commonwell Health Alliance

Another important read (pdf)

I love this kind of stuff. It sustains and humbles me. "As politicians, advertisers, salesmen, and propagandists for various political, economic, moral, religious, psychic, environmental, dietary, and artistic doctrinaire positions know only too well, fallible human minds are easily tricked, by clever verbiage... Common language—or at least, the English language—has an almost universal tendency to disguise epistemological statements by putting them into a grammatical form which suggests to the unwary an ontological statement. A major source of error in current probability theory arises from an unthinking failure to perceive this."

Quotes

"An economist is a person who sees something that works in practice and tries to figure out whether it will work in theory."

- J.D. Kleinke, medical economist
___

"The only person who enjoys change is a baby with a wet diaper."

"Every misspent dollar in our health care system is part of somebody's paycheck.

- Brent James, M.D., M.Stat

“We could do healthcare, at markedly higher quality, for everyone in this country, without rationing or denying anybody the care that they need, without having the government dictate how doctors practice or whether hospitals could expand, at half the cost we do it now.”

- Health Care Futurist Joe Flower

Most of the sciences, unlike parts of medical science, are not concerned with the impossible. There is not complementary and alternative physics, or chemistry, or biochemistry, or engineering. These disciplines compare their ideas against reality, and, if the ideas are found wanting, abandoned."

- Mark A. Crislip, MD

"Q: How much alcohol is too much?
A: More than your doctor drinks."

- a physician I once heard speak during a CME presentation

“Just because science doesn’t know everything, doesn’t mean you get to fill in the gaps with whatever fairy tale most appeals to you.”

- Dara O’Briain

'[I]t is one small step from using the computer for "helping" doctors to monitoring them, judging them, dictating to them what to do, and withdrawing payment for computer non-compliance. The use of computer data is a multi-edged sword. It can be used for the "good," facilitating diagnosis and treatment and making it more accurate and up-to-date, and for “evil,” invading privacy, inviting security breechs, and making decisions based on the opinions of remote authorities rather than those present at the patient-doctor encounter.'

- Richard Reece, MD

“[T]here ARE statistics which are non-political. Just because The Washington Post/Fox News reports the temperature is 75 degrees doesn’t mean it’s really snowing and sunscreen is a liberal/conservative plot. Even if you earn a living being ideological.”

- Michael L. Millenson

"It is a generally a fairly convincing argument that people shouldn’t have to be subsidized to undertake a change which is in their best interest.

The reconciliation seems to be that EHR is not supposed to make a doctor’s practice more efficient and higher quality. It is supposed to make the system of care more efficient and higher quality, which is not the same thing. Those of you who took calc recall that maximizing the total of variables is not achieved by maximizing any one variable and this is a perfect example of that.

Those of you have served in combat certainly noticed that too — if everyone works as a team the unit takes fewer casualties. If you try to save your own hide, you might, but at the expense of more casualties overall."

- Al Lewis

"There are two ideas to keep in mind about Bayesian reasoning and how we tend to mess it up. The first is that base rates matter, even in the presence of evidence about the case at hand. This is often not intuitively obvious. The second is that intuitive impressions of the diagnosticity of evidence are often exaggerated."

- Daniel Kahneman, "Thinking, Fast and Slow"

"Physicians apply advanced scientific knowledge, but they must do so without the favorable conditions that experimental scientists create for themselves. Multitasking is forced on physicians, often in chaotic environments and under severe time and resource constraints."

- Lawrence and Lincoln Weed, "Medicine in Denial"

"It’s time to stop the whining about Obama care and acknowledge we already have universal health care. We just pay for it in the stupidest way possible that ensures problems are that much more disastrous and complicated when they’re finally treated."

- Mark Hoofnagle, MD, PhD

"Every act of conscious learning requires the willingness to suffer an injury to one's self-esteem. That is why young children, before they are aware of their own self-importance, learn so easily."

- Thomas Szasz, MD
___

"Of course, one reason that process metrics* are so popular is that processes are much easier to define and measure than outcomes."

- The Skeptical Scalpel
___

"There is an “illusion of validity” for any random data point, a seductive sense that is colored by what we hope will be true. Mountains of pharmaceutical claims are often made from mere molehills of data."

- Danielle Ofri, MD
___

"Joy empowers people. It is a source of energy that enables people to hope and plan and change their lives for the better. Spend some time around someone who is relentlessly negative and how do you feel–drained, right? More and more research shows that joy is not something that just happens to you, like a bolt of lightening out of the blue. Joy is, instead, a habit to cultivate. Negative thinking and despair are the crabgrass of our souls–weeds that take root and spread, sometimes to all areas of life. Joy, in contrast, is a soul’s rose–hardy when cared for, able to put down roots over time and withstand disease and extremes. Like a rose, however, your joy can become blighted from neglect or harsh conditions. We all need to tend to our joy–to prune away the badness, and to know that, even though it may look like a prickly bare root, if you invest time in a joyous outlook, gorgeous things will bloom, even in the harshest conditions."

- Dr. Jan Gurley
___

"'Solutions' exist only in mathematics."

- Karen Martin
___

"The issue of how to regulate clinical software is, in the long run, indistinguishable from the issue of how to regulate medicine. The only difference is that medicine is practiced in the open, without secrecy, subject to peer review, and under a merit-based state license."

- Adrian Gropper, MD
___

"Economist, rope, tree: some assembly required."

- Source unknown

DISCLAIMER:

I write this blog wholly on my own time and my own dime. The views proffered are expressly my own as a concerned and active citizen/taxpayer (in addition to being the result of my substantive experience in the various IT fields), and in no way reflect any policy views of my former employer, notwithstanding that some of the thinking has indeed obviously been spurred by the implications of the work with which I have been doing for them.

FAIR USE POLICY
I cite a ton of news and web sources spanning the breadth of relevant technical and policy domains, sometimes at substantial length. I believe I remain well within the bounds of "Fair Use," as [1] I am not doing any of this for profit, [2] I always provide attribution and links -- which, [3] far from negatively impacting any copyright holders' commercial interests, might actually increase traffic to and interest in their offerings.

Nonetheless, should I post anything of yours regarding which you have any objection, just let me know and I will remove it forthwith.

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Friday, March 10, 2017

Rationing by "Price"

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