Archive for July, 2020

From Prisoner to Customer to Sophisticated Consumer

As previously predicted an appeal has been filed to the pricing transparency legislation. So now it’s time for everyone to ask “what is the healthcare industry hiding?” Recently, we’ve become very interested in the company, GoodRx. For those unfamiliar with this organization. It is a consumer deluxe organization. The business is to help consumers find discounted prices on pharmaceuticals. Ironically, my first experience with the organization was when a friend needed to buy cancer drugs for her dog. With the GoodRx card 75% discount. That’s right 7…..5…..Percent!!!

Upon exploring the GoodRx website, over the course of the business they’ve helped consumer save $15 billion on drug purchases. This is over and above insurance savings. That’s a significant number.Which again begs the question, “Aren’t insurance companies suppose to have their policyholders’ best financial interests in mind?”Surprisingly, no. Because insurance companies along with third party administrative companies, are mostly publicly traded, their number one priority is shareholders and number two priority is executive compensation. Policyholders’ financial interest rank third at best. On average this has become about a $24,000 annual financial issue for the family of 4. Since stimulus checks are top-of-mind for many people these days. Think about this. It would take a monthly stimulus check of $2,000 to cover the annual healthcare premium for a family of 4. In many cases it will take $1,000 up to $5,000  to cover the deductible for just 1 hospitalization event.

In looking at the many issues surrounding the healthcare pricing transparency issue and being baffled by the amount of resistance it is encountering, we have come to the conclusion there’s more than meets the eye. One can read all the healthcare industry’s defense of the current system. Most of which applied to any other consumer area sounds ridiculous if not out right stupid. One of the few airline companies that seems like it will survive the Covid virus, Southwest, was built on consumer pricing transparency.Their original business model focused on making air transportation affordable for the non-flying customer.

Here’s some unusual facts about healthcare. Most healthcare providers don’t know what their services or procedures actually cost to perform. Why? Because implementing cost accounting systems in healthcare organizations is very difficult. Second, Peter Drucker, a world-class business consultant, promoted the concept, “price led costing” vs “cost led pricing.” As it turns out healthcare doesn’t use either of these concepts. Healthcare providers use a complex concept of “reimbursement focused pricing.” This methodology ignores both what procedures actually cost and what is a marketplace accepted price. This methodology uses sophisticated technology to arrive at prices that produce optimum reimbursement levels under government contracts and insurance contracts taken in aggregate. To explain it more simply, this is the methodology that recently created the discovery of the $10,000 toilet seat cover by the Air Force. Pulling back the curtain on years and years of this type of pricing strategy is sure to produce many of these similar type of pricing discoveries. For the insurance companies, they’ve built in discounting tools in their own technology packages that discount these prices by as much as 90%.

So GoodRx has pulled back the curtain on a segment of the healthcare industry, pharmaceuticals. But at best this probably represents only about one quarter to one third  of the US healthcare spend. There are several trillion dollars that haven’t gone under any type of third party consumer microscope. And remember the vast majority of hospitals are still tax-exempt, community supporting organizations. Or at least that’s what they were once upon a time. Stay tuned as this is bound to get very interesting.

From Prisoner to Customer to Sophisticated Consumer (We interrupt our previous segment to bring you important news)

Dear Healthcare Consumer-

Pay attention! This is very important. On June 23, 2020, a federal judge ruled against the American Hospital Association in their lawsuit attempting to block an HHS rule for pricing transparency. (In all likelihood the AHA will appeal the ruling).

This is shockingly important for several reasons! First and most obvious is it’s a “baby step” forward for healthcare consumers. During a time when transparency is ubiquitous in all areas of our lives, the bastion of healthcare remains steadfast in its unwillingness to share information of any sort without a battle. What this legislation provides for, as we’ll explain in more detail later, is really a small, small, step toward “real” pricing transparency. But it is a step forward.

Secondly, in the words of some wise person, “don’t listen to what I say but watch what I do.” Pricing transparency rhetoric has been coming out of the American Hospital Association and the American Medical Association for at least 10 years. Believe it or not pricing transparency was included in the Obamacare legislation(The Affordable Care Act) in 2010. There’s been much bravado and chest thumping as to the importance this is to the American consumer. But rather that initiate any initiatives it took an act of Congress (Hospital Price Transparency and Disclosure Act of 2018) to get the ball rolling. Then after passage of the legislation the industry leaders fought in court to prevent the legislation from being implemented.

A prudent consumer would ask the question “what the hell are they hiding?” and “why are they so concerned about hiding it?” Think about this for a minute. The majority of hospital providers in this country are community resources operating under tax exemption statutes because of the alleged  “community benefit” being provided to the communities being served. So why do these hospitals act like Apple and Microsoft in some kind of corporate battle to the death?

If you read any of the media stories regarding the pricing transparency legislation and pay particular attention as to the “reasons” being provided by hospitals to not cooperate, they boarder on the absurd and at times seem just  plain stupid.

We have declared this initiative as a “baby step” in the world of healthcare transparency because initially there is so little context and education to help the consumer understand the information and more importantly to be able to connect quality to the prices.

A leading healthcare periodical has presented a “Myth of Health Care Consumerism” position. The basis for this argument is the vast preponderance of healthcare is emergent and unplanned and people don’t “shop” for healthcare in the conventional way they shop for other consumer goods such as cars, appliances, homes, college, etc. We believe healthcare shopping is going to follow a similar trajectory as the home personal computer. While at the beginning, many people didn’t understand the need or utility of a home computer, today the story is much different. In addition, as people became educated on using this technology then along came the smartphone so people could take the technology with them wherever they went.

We strongly believe as consumers become more health educated about different healthcare options and services price and quality shopping are sure to follow. Here’s an example available in Plano, TX today.

See, this company is providing preventative scans for heart, heart and lung and whole body. On their website it says, “to detect illnesses such as heart disease and cancer months or even years before symptoms may appear to help put You in control of Your health.” Oops so much for unscheduled healthcare visits. And we are only at the early stages of these type of services.

We will continue to provide updates and sources of information to enable you to be better able to utilize this upcoming source of information.

From Prisoner to Customer to Sophisticated Consumer Part 2

Welcome back. Now that you have your families medical history documented. Let’s proceed to the next step of locating Drs. Let me start with a short antidotal story:

               Healthcare customer: Could you recommend a high quality Doctor?

               Hospital Executive: Do you know what they call the person at the bottom of

               their medical class?

               Healthcare customer: No, what?

               Hospital Executive: Doctor.

In a world of ratings, scores, customer feedback and all sorts of mechanisms for customers to determine quality. Hospitals and healthcare providers continue to operate in the byzantine era of the forties and fifties when all Doctors sat atop the cultural intellectual and quality hierarchy. In this realm all Doctors and Hospitals are considered equal. As most of us know, this reality isn’t true. Now I recognize in this current environment of Covid 19 all medical professionals are considered heroes and rightly so. So for the appropriate context, my comments today are for more normal times whenever that might be.

People within the medical infrastructure will tell you the practice of medicine is a science. Thus giving society the impression the practice of medicine the aura of a “scientific” structure based on facts, proven theories, accountable results and evidence.

So let me tell a story which has surprisingly huge ramifications for today’s Covid environment. Once upon a time at the General Hospital of Vienna a Doctor by the name of Ignaz Semmelweis, was confronted with a medical dilemma. The Hospital had twin maternity wards and the death rate within one ward was almost four times that within the other ward. He studied and studied the potential differences between the two wards searching for the cause of the deaths. The only significant difference he arrived at was medical students tended patients in the ward with the higher death rate and midwifery students attended to patients in the ward with the lower death rate. Another factor he discovered was mothers that had delivered prematurely before arriving at the hospital also had a much lower death rate.

Then one day an unusual event occurred where a Doctor friend of Ignaz died after being “nicked with a knife” during an autopsy of a victim of the fever the women were dying from. With this new information Ignaz concluded the medical personnel that were touching cadavers were transmitting the disease back to the maternity ward. Because patients in the other ward were treated by midwifes that were not exposed to the cadavers, this would account for the difference it mortality rates. Ignaz immediately instituted a requirement for all medical personnel to wash their hands in a disinfectant solution. The result of implementing the procedure was the death rate dropped from 11.4% to 1.2%.

Here’s the shocker! The medical profession dismissed Ignaz’s theory. Over a hundred years later in 2002, a CDC report estimated 2 million patients contracted a bacterial infection while being in  American hospitals, 90 thousand of those patients died. Just a few years ago CMS introduced financial incentives to motivate healthcare personnel to wash their hands.

Today, we are confronted daily with the mortality counts of a highly contagious disease. Health care workers are suited up with face shields, masks, specialty uniforms etc to protect themselves from contracting the disease. Just a few years ago, however, when the potential victim of bacterial disease was the patient, the industry did not share the same level of precaution nor the current level of reporting. Everyday the number of Covid deaths are reported by the 6 o’clock news sources. Imagine just a few years ago when 100,000 deaths caused by the hospital industry were ignored by the news media and just like during Ignaz’s life the medical industry. The reason I know is my father died as the result of a hospital acquired infection.

By now you’re wondering what does any of this have to do with finding a primary care physician?  What  this means for you and your physician is the representation created by Hollywood, the media and the industry isn’t completely current reality. Many physicians no longer are in control of how they practice medicine, because they’re employed by hospital providers or insurers causing their financial incentives to be impacted not only by the insurance companies but also their employers. So knowing who’s paying your doctor is important.

In the 1980’s with the advent of Medicare DRG payments, many health insurers adopted tactics to minimize their costs by changing how their customers accessed their doctors. Primary care doctors were somewhat vilified because they became known as “gatekeepers.” While before an insured patient could freely choose to see whatever doctor they wished to see whenever they wished to see them. This now meant in order to see a specialist, a gatekeeper first has to provide an “authorization.” For gatekeeper doctors that over-authorized, they soon found themselves eliminated from the insurers’ doctor networks. As we now in any complex systems, actions will cause reactions. In the case of healthcare, this caused the rise of “concierge doctors” and “concierge medical practices.” These are most often independently physician owned and operated. In most cases, they are not included in insurance networks and don’t accept insurance payments. In some cases, they include doctors that specialize in geriatrics, chronic diseases or specialty care ie orthopedics etc. The underlying driver for these “new” practices is in response to the “discounted” payments being offered by insurers.

So what was once perceived as a “one size fits all healthcare delivery system” healthcare reform has had the unintended consequence of pulling back the curtain, on what has always existed,  a multi-level, variable quality healthcare system. That’s right The Mayo Clinic, The Cleveland Clinic, the MD Anderson Cancer Center are just of few healthcare providers that promote their excellence of above all others. No different than Porsche, Tesla, Audi or Mercedes-benz touting their autos as the best luxury autos in the very large United States auto market. Or Louis Vuitton, Chanel, Tiffany & Co., Gucci, or Burberry touting their brands as the best in the world in their relative markets. So while the politicians have been working on making healthcare a right for all, accessible for all and affordable for all. The Healthcare industry is working on going from a “equatable and one size fits all approach” to a luxury branding strategy and searching for the customers they really want. And for those of you that doubt me Google “Cadillac” insurance plans or Concierge medicine.

What’s the next step in becoming a more powerful and sophisticated healthcare consumer? Get the right Primary Care Physician for you and each member of your family.

If you’re healthy right now that’s great. In doing “Your Family’s Health History,” you discovered some “symptoms” lurking in your family’s medical history like; cancer, cardiovascular disease, high blood pressure, obesity-related illnesses, Alzheimer’s/dementia, Parkinson, alcohol-related etc than it’s time to take action. If you don’t have a primary care physician, it’s time to get one. A good place to begin is with your insurer. Call and ask for a recommendation. Be prepared to explain exactly what you are looking for.

Like all parts of our lives, social media has also found healthcare. One survey showed over 75% of patients use online reviews as the first step in choosing a doctor. Another survey showed about half of “providers” were looking at physician review websites to understand their patients’ satisfaction levels. Another survey showed half of respondents would pick an out of network doctor vs. an in network doctor with less favorable reviews. In a very dramatic shift 80%  of consumers trust online reviews as much as personal recommendations. These factors are all indicators of a very different environment for choosing a doctor.

Here’s a list of additional sources providing information about selecting doctors.












               -CMS Physician Compare website (




All of the above websites provide additional guidance on how to search for and select an appropriate doctor.               

A critical point we want you to know about is there are at least two healthcare systems operating in this country (and probably more that we haven’t been exposed to). One is the general system comprised of all the Doctors, Hospitals, Nurses etc that are available to the general public that will be included in the aforementioned websites. In addition, there is an undisclosed healthcare system comprised of the  Hospitals, Doctors etc the Doctors and medical community use. This is the “unofficial” highest quality medical System used by Doctors,  Doctors’ family members, professional athletes and other influential people. Referrals to these networks occurs through relationships. If you want to access these networks, you must be willing to ask your Doctor where he/she would go for the treatment you’re seeking. In addition you may need to research and see where influential people are seeking care.

To summarize, having your and your family’s medical history in hand, you are prepared for the next step in becoming sophisticated healthcare consumer. Understand the industry is not yet prepared to cater to your needs or advanced knowledge. The healthcare industry will still attempt to treat you as a compliant, tolerant, obedient, submissive individual. Ultimately the care you need and receive will be directly influenced by your selection of a primary care physician to assist you in navigating the healthcare delivery system. This person needs your complete trust and confidence to act as your advocate. The level of your current involvement with the healthcare system is the primary determinant in selecting this person. Good luck in this next phase. The following phase will go more in-depth in selecting specialist doctors.

Six Takeaways Of The KAISER HEALTH NEWS-AP Investigation Into The Erosion Of Public Health

Local and state public health departments across the country work to ensure that people in their communities have healthy water to drink, their restaurants don’t serve contaminated food and outbreaks of infectious diseases don’t spread. Those departments now find themselves at the forefront of fighting the coronavirus pandemic.

But years of budget and staffing cuts have left them unprepared to face the worst health crisis in a century.

KHN and The Associated Press sought to understand the scale of the cuts and how the decades-long starvation of public health departments by federal, state and local governments has affected the system meant to protect the nation’s health.

Here are six key takeaways from the KHN-AP investigation:

  • Since 2010, spending for state public health departments has dropped by 16% per capita, and for local health departments by 18%. Local public health spending varies widely by county or town, even within the same state.
  • At least 38,000 state and local public health jobs have disappeared since the 2008 recession, leaving a skeletal workforce in what was once viewed as one of the world’s top public health systems.
  • Nearly two-thirds of Americans live in counties that spend more than twice as much on policing as they spend on non-hospital health care, which includes public health.
  • More than three-quarters of Americans live in states that spend less than $100 per person annually on public health. Spending ranges from $32 in Louisiana to $263 in Delaware.
  • Some public health workers earn so little that they qualify for government assistance. During the pandemic, many have found themselves disrespected, ignored or even vilified. At least 34 state and local public health leaders have announced their resignations, retired or been fired in 17 states since April.
  • States, cities and counties whose tax revenues have declined during the current recession have begun laying off and furloughing public health staffers. At least 14 states have cut health department budgets or positions, or were actively considering such cuts in June, even as coronavirus cases surged in several states.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Essential Worker Shoulders $1,840 Pandemic Debt Due To COVID Cost Loophole By: Kaiser Health News

Carmen Quintero works an early shift at a distribution warehouse that ships N95 masks and other products to a nation under siege from the coronavirus. On March 23, she developed a severe cough, and her voice, usually quick and enthusiastic, was barely a whisper.

A human resources staff member told Quintero she needed to go home.

“They told me I couldn’t come back until I was tested,” said Quintero, who was also told she would need to document that she didn’t have the virus.

Her primary care doctor directed her to the nearest emergency room for testing because the practice had no coronavirus tests.

The Corona Regional Medical Center is just around the corner from her house in Corona, California, and there a nurse tested her breathing and gave her a chest X-ray. But the hospital didn’t have any tests either, and the nurse told her to go to Riverside County’s public health department. There, a public health worker gave her an 800 number to call to schedule a test. The earliest the county could test her was April 7, more than two weeks later.

At the hospital, Quintero got a doctor’s note saying she should stay home from work for a week, and she was told to behave as if she had COVID-19, isolating herself from vulnerable household members. That was difficult — Quintero lives with her grandmother and her girlfriend’s parents — but she managed. No one else in her home got sick, and by the time April 7 came, she felt better and decided not to get the coronavirus test.

Then the bill came.

The Patient: Carmen Quintero, 35, of Corona, California, who works at a distribution warehouse. She has an Anthem Blue Cross health insurance plan through her job with a $3,500 annual deductible.

Total Bill: Corona Regional Medical Center billed Quintero $1,010, and Corona Regional Emergency Medical Associates billed an additional $830 for physician services. She also paid $50 at Walgreens to fill a prescription for an inhaler.

Service Provider: Corona Regional Medical Center, a for-profit hospital owned by Universal Health Services, a company based in King of Prussia, Pennsylvania, that is one of the largest health care management companies in the nation. The hospital contracts with Corona Regional Emergency Medical Associates, part of Emergent Medical Associates.

Medical Service: Quintero was evaluated in the emergency room for symptoms consistent with COVID-19: a wracking cough and difficulty breathing. She had a chest X-ray and a breathing treatment and was prescribed an inhaler. What Gives: On that day in late March when her body shook from coughing, Quintero’s immediate worry was infecting her family, especially her girlfriend’s parents, both over 65, and her 84-year-old grandmother.

“If something was to happen to them, I don’t know if I would have been able to live with it,” said Quintero.

Quintero wanted to isolate in a hotel, but she could hardly afford to for the week that she stayed home. She had only three paid sick days and was forced to take vacation time until her symptoms subsided and she was allowed back at work. At the time, few places provided publicly funded hotel rooms for sick people to isolate, and Quintero was not offered any help.

For her medical care, Quintero knew she had a high-deductible plan yet felt she had no choice but to follow her doctor’s advice and go to the nearest emergency room to get tested. She assumed she would get the test and not have to pay. Congress had passed the CARES Act just the week before, with its headlines saying coronavirus testing would be free.

That legislation turned out to be riddled with loopholes, especially for people like Quintero who needed and wanted a coronavirus test but couldn’t get one early in the pandemic.

“I just didn’t think it was fair because I went in there to get tested,” she said.

Some insurance companies are voluntarily reducing copayments for COVID-related emergency room visits. Quintero said her insurer, Anthem Blue Cross, would not reduce her bill. Anthem would not discuss the case until Quintero signed its own privacy waiver; it would not accept a signed standard waiver KHN uses. The hospital would not discuss the bill with a reporter unless Quintero could also be on the phone, something that has yet to be arranged around Quintero’s workday, which begins at 4 a.m. and ends at 3:30 p.m.

Three states have gone further than Congress to waive cost sharing for testing and diagnosis of pneumonia and influenza, given these illnesses are often mistaken for COVID-19. California is not one of them, and because Quintero’s employer is self-insured — the company pays for health services directly from its own funds — it is exempt from state directives anyway. The U.S. Department of Labor regulates all self-funded insurance plans. In 2019, nearly 2 in 3 covered workers were in these types of plans.

Resolution: As lockdown restrictions ease and coronavirus cases rise around the country, public health officials say quickly isolating sick people before the virus spreads through families is essential.

But isolation efforts have gotten little attention in the U.S. Nearly all local health departments, including that of Riverside County, where Quintero lives, now have these programs, according to the National Association of County and City Health Officials. Many were designed to shelter people experiencing homelessness but can be used to isolate others.

Raymond Niaura, interim chairman of the Department of Epidemiology at New York University, said these programs are used inconsistently and have been poorly promoted to the public.

“No one has done this before and a lot of what’s happening is that people are making it up as they go along,” said Niaura. “We’ve just never been in a circumstance like this.”

Quintero still worries about bringing the virus home to her family and fears being in the same room with her grandmother. Quintero works at a warehouse that distributes 3M products including personal protective equipment and other companies’ products. Quintero returns from work every day now, puts her clothes in a separate hamper and diligently washes her hands before she interacts with anyone.

The bills have been another constant worry. Quintero called the hospital and her insurance company and complained that she should not have to pay since she was seeking a test on her doctor’s orders. Neither budged, and the bills labeled “payment reminders” soon became “final notices.” She reluctantly agreed to pay $100 a month toward her balance — $50 to the hospital and $50 to the doctors.

“None of them wanted to work with me,” Quintero said. “I just have to give the first payment on each bill so they wouldn’t send me to collections.”

The Takeaway: If you suspect you have COVID-19 and need to isolate to protect vulnerable members of your household, call your local public health department. Most counties have isolation and quarantine programs, but these resources are not well known. You may be placed in a hotel, recreational vehicle or other type of housing while you wait out the infection period. You do not need to have a positive COVID test to qualify for these programs and can use these programs while you await your test result. But this is an area in which public health officials repeatedly offer clear guidance — 14 days of isolation — which most people find impossible to follow.

At this point in the pandemic, tests are more widely available and federal law is very clearly on your side: You should not be charged any cost sharing for a coronavirus test.

Be wary, though, if your doctor directs you to the emergency room for a COVID test, because any additional care you get there could come at a high price. Ask if there are any other testing sites available.

If you do find yourself with a big bill related to suspected COVID-19, push beyond a telephone call with your insurance company and file a formal appeal. If you feel comfortable, ask your employer’s human resources staff to argue on your behalf. Then, call the help line for your state insurance commissioner and file a separate appeal. Press insurers — and big companies that offer self-insured plans — to follow the spirit of the law, even if the letter of the law seems to let them off the hook.

Bill of the Month is a crowdsourced investigation by Kaiser Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it! COPY HTML

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