Costs of Care

Costs of Care...and Coercion?

2012-02-27T08:30:00.002-05:00

The following anecdote is written by Dr. John Schumann, Associate Professor of Medicine at the University of Oklahoma. His story was a finalist in the 2011 Costs of Care Contest, and will be featured on American Public Media's Marketplace.

[All names and identifying features of characters in this story have been changed.]

Nora, a third year medical student, came to me in moral distress.

Ms. DiFazio, one of the hospitalized patients on her Internal Medicine rotation, was frightened to undergo an invasive (and expensive) medical procedure: cardiac catheterization.

The first year doctor [‘intern’] with whom Nora was paired, Dr. White, vented to her:

“These patients come to us seeking our help and then refuse what we have to offer them,” Dr. White steamed.

At the bedside, the intern demanded to know why Ms. DiFazio refused the procedure. When no reason beyond “I don’t want to” was offered, Dr. White told Ms. DiFazio that there was no longer cause for her to stay in the hospital.

By declining the procedure, Dr. White informed Ms. DiFazio that she would have to sign out ‘against medical advice’ (AMA). To signify this she would have to acknowledge that leaving AMA could result in serious harm or death. In addition, Ms. DiFazio would bear responsibility for any and all hospital charges incurred and not reimbursed by her insurance due to such a decision.

“The threat of a huge hospital bill got Ms. DiFazio to stay and take the test,” Nora related. “It just seems so wrong to bludgeon a patient this way. Can it possibly be true?”

I’d been out of medical school myself for eight years at that point; until then I’d never heard that patients who sign out against medical advice risk bearing the costs of their hospitalization. What about a patient’s freedom of choice, or as we like to call it in medicine, their autonomy?

I told Nora I didn’t know, but was determined to find out. Ethically, the notion that patients in the hospital must do our bidding or pay the price seemed dubious. Yet in a world of co-pays, deductibles, and ‘preexisting conditions,’ a mere grain of plausibility made this idea seem vaguely credible.

I asked around. To my surprise, many fellow attending physicians told me they had been taught the very same thing. My colleagues had trained at teaching institutions around the country, so I began to see this as a pervasive and widely-held belief.

I straw polled some of our residents, and like Dr. White, found that they almost unanimously believed that AMA discharges incurred financial penalties. Where did they learn this?

From their attendings.

From the nurses.

From the AMA form itself, with language stating that the patient, by signing, acknowledges financial risk.

We needed to find the truth.

Colleagues helped us sift through nearly ten years of AMA discharges from our teaching hospital. And though the results are in press at a medical journal, I can say that out of hundreds of cases of AMA discharges over a decade, in only a handful was the bill was not paid—and that was invariably due to ‘administrative issues,’ not because of the AMA discharge.

I also thought it important to go to the source: I called the insurance companies themselves. I talked with VPs and media relations people from several of the nation’s largest private insurance carriers.

Each of them told me that the idea of a patient leaving AMA and having to foot their bill is bunk: nothing more than a medical urban legend.

They were glad to tell me so, as this was a rare occasion of insurance companies looking magnanimous. One director went so far as to poll his company’s own medical directors—a half dozen of them--and found that several of them had been taught and believed the canard about AMA discharge and financial responsibility. He was happy to set the record straight.

So patients and doctors beware: The next time you or your loved one has decided that it’s time to leave the hospital, don’t let us doctors coerce you into staying by threatening you with the bill.

It simply isn’t true that leaving against medical advice makes it fall entirely upon your pocketbook.

Future Noras should feel empowered to set the record straight with their interns and residents. Most of all, the Ms. DiFazios of the world won’t have to submit to procedures that they don’t wish to undergo.

Cost Awareness in Health Care: An Idea Whose Time Has Come

2012-02-20T00:42:00.006-05:00

Christopher Moriates, MD is a senior resident in Internal Medicine at the University of California San Francisco (UCSF). He is a co-creator of a cost awareness curriculum for residents at UCSF and is currently working with the American College of Physicians (ACP) on a national “High Value, Cost Conscious Care” curriculum. He will be starting a faculty position with the Division of Hospital Medicine at UCSF in July 2012.

“Nothing is as powerful as an idea whose time has come.” – Victor Hugo

It didn’t take that long during intern year to realize that something was wrong. As I signed so many orders that my signature, once proudly readable, began its gradual but clear progression towards more abstraction, I eventually started to wonder just how much all of these tests were actually costing my patients. After all, once you start checking boxes on an order sheet, the “calcium/phos/mag” just seems to roll off of the tongue. However, not just how much was this “costing” patients financially, but also in potential risks, harms and adverse effects.

I particularly remember being bothered when told by an Emergency Room attending physician that I had to get the Head CT on my 28-year-old male patient presenting with a benign-sounding headache and a normal physical examination, “unless you could go in there and tell him that you personally can guarantee him with 100% certainty that he does not have something bad like a brain tumor.” This did not seem like a fair bar to hop, particularly having put the M.D. after my name a mere few months prior. So I scribbled my name on another form and with the whisk of my pen subjected this patient to a normal CT head examination, saddling this young man with a significant amount of radiation and a hospital bill that now included an approximately $2,500 imaging charge. Nobody seemed to flinch, but it got me thinking.

I realized that considering cost was just not something that we were ever taught; “The reasons for this silence are historical, philosophical, structural, and cultural,” wrote Dr. Molly Cooke in the New England Journal of Medicine in 2010. And yet, it turns out that the ACGME officially states (under their Systems-Based Practice core competency) that “Residents are expected to… incorporate considerations of cost awareness and risk-benefit analysis in patient and/or population-based care as appropriate.” This frankly was just not happening, and I know that my training program was not the outlier.

But this has all started to change.

It is hard not to feel, as I read impassioned articles about cost and/or value in health care in the most prominent medical journals (The New England Journal of Medicine, JAMA, The Annals of Internal Medicine, The Archives of Internal Medicine) and the popular press (The New York Times, The LA Times, Bloomberg), that the movement is starting to reach a critical mass. To see a patients’ hospital bill broken down and printed with a heart felt commentary by their daughter in a newspaper would have likely been unimaginable a short time ago. The call-to-arms seemed crystal clear during a recent speech by Don Berwick.

As for me, I am trying to do my part. During the past year, along with Dr. Krishan Soni and Dr. Andrew Lai at UCSF, I created and organized a multi-faceted longitudinal curriculum for residents to teach cost awareness.

In these blogs to follow, I will aim to discuss the implementation of this unique curriculum, along with many of the stories and lessons that we have collected along the way.

Script Writer Shares Story of Viral Hospital/Hotel Bill Video

2012-02-16T17:23:00.004-05:00

By Dr. Vineet Arora (Twitter: @FutureDocs)

What Happens in Vegas Can Be Used to Teach Costs of Care

Funded with a grant from the American Board of Internal Medicine Foundation, Costs of Care has partnered with medical educators at Harvard Medical School and the University of Chicago (that would be us!) to start addressing this problem. We are developing a series of web-based medical education videos that use clinical vignettes to illustrate core principles of cost-consideration, including how to communicate with patients about avoiding unnecessary care and reducing overused or misused tests and procedures. As part of the project launch, we released a new teaser video today called “What if Your Hotel Bill Was Like a Hospital Bill?”. The video is a tongue-in-cheek depiction of the challenges patients face in deciphering medical expenses, and their additional confusion when they learn doctors are not trained to consider costs. - Excerpt from Costs of Care Press Release by Dr. Neel Shah

How does this relate to Vegas?

On a recent trip to Las Vegas with my family for the holidays, I was in the Bellagio lobby admiring the Chihuly glass ceiling. While that was impressive, I was also watching the clerks check in and out the long lines of visitors to the hotel. The staff explained any charges on the bill, confirmed that the bill agrees with the expectations of the patron and then finalized the transaction, printing a copy on the spot for the traveler before they got in the cab to the airport hailed by the bellman. What a far cry from hospitals where most of the hospital staff have no idea how much anything costs! After all, doctors are notoriously bad at considering costs in the doctor-patient relationship, as demonstrated by a great piece by Dr. Peter Ubel on his experience with the cost of his own prescription medications. As Paolo (or Paul Staisiunas who works as our research project manager in his day job) from Hotel Hospital highlights, "our hotel staff specifically focus on the highest quality of care...I doubt that they even know how much anything costs here." The rest of the script was easy to write. Shooting was a lot harder since we had to find a spot in the hospital that looked like a hotel but thanks to some creative camera angles and props from our MergeLab team, we were able to get it done.

Learning about costs of care is critical to taking care of patients. This was especially poignant as I recently completed inpatient service block at a nearby community hospital taking care of many uninsured patients who paid out of pocket for their medications (not to mention their hospital stay). Our residents were concerned about one patient who was uninsured and would have difficulty paying for Plavix, a critically important drug after his heart procedure. Review of his medications also revealed he was recently put on Lexapro, a nongeneric antidepressant (with a sordid history) that was costing him over 100 dollars a month when there is a generic alternative for 4 dollars a month, and help him afford his Plavix. When physicians do discuss costs, they also get it wrong and perpetuate a 'medical urban legend' like patients have to pay when they leave the hospital against medical advice. These are just a few of many examples of why teaching students and residents to bring up costs and arming them with tools to address the issue with their future patients is imperative. Without considering costs of care, we all take a 'gamble' that costs of care are not an issue for patients....Of course, the odds are against that.

Stay tuned for more work from our Teaching Value Project with Costs of Care funded by the ABIM Foundation.

--Vineet Arora, MD, MAPP

Special thanks to our production team and actors: Mark Saathoff , Andy Levy MS4, Kimberly Beiting, Paul Staisiunas, and Jeanne Farnan MD MHPE (and of course Neel Shah!)

Doctors, Not Financial Engineers

2012-02-12T19:59:00.004-05:00

The following anecdote was written by Dr. Andrew Schutzbank, a physician in Boston who was among the winners of the 2011 Costs of Care Essay Contest.

Peggy was in her early 70s and suffered from a terrible lung disease known as pulmonary hypertension. So bad in fact, that she had a pump infusing a medicine under her skin 24 hours a day to keep the blood supply to her lungs open. Once started, this medicine, treprostinil, was known to improve life in those with pulmonary hypertension. Unfortunately, like all continuous infusion medicines of this type, it has the unfortunate side effect of sudden death if stopped for more than 4 hours. Starting it was a difficult choice for Peggy and her expert team of physicians, but her disease had progressed to a point where it was the right decision. As you can imagine, this drug was mighty expensive. We would only find out how expensive later.

On the day that I met Peggy, she was being admitted to the Intensive Care Unit (ICU) not for her pulmonary hypertension, but because she had a bleed in her stomach, which caused her to swallow blood/stomach contents into her already damaged lungs. Once stabilized, our first challenge was to ensure that she continued on the treprostinil. It took a little magic from pharmacy and the drug’s manufacturer, but we were able to get everything together and Peggy was no worse for the wear.

A few days later Peggy was improving, breathing tube out and awake and back to herself. Due to the special nursing needs with treprostinil, Peggy was required to be in the Cardiac Care Unit (CCU), a special type of (ICU), despite her progress. Even though Peggy managed this medicine at home by herself, hospital policy prevented her from transitioning out of the ICU to the general medical floor, at a fraction of the cost. Conceding that point, the decision was made to try and transition Peggy directly to Rehab. But her progress was stalled for one simple reason: treprostinil.

It turns out that if Peggy were to go to a rehab, they have to pay for her medications out of the money they receive to care for her. As it turns out, treprostinil costs $1400 per day. $1400. Now, Peggy does not pay that amount, she has a special arrangement worked out with the company and the state. But in order to make that arrangement work, the company charges full freight for the drug when the patient is institutionalized. Since the drug cost alone would wipe out payment for her stay, no rehab would accept her. So Peggy was stuck in the hospital, and stuck in one of the most specialized and expensive beds in the hospital in the CCU.

Think about that for a moment. A critical care bed was tied up for days for a patient that was well enough to leave the hospital, just not ready to go home. Arbitrage was suggested—would it not make more sense for our hospital to buy the drug for her at rehab, freeing up the CCU bed (which costs far more than daily dose of treprostinil). But we are doctors, not financial engineers. We work in the world of medicines and were unable to orchestrate such an unusual arrangement. So we did the only thing we know how to do. We stopped the expensive medicine.

This was not a financial decision. Peggy had been describing vague body pain, a known side effect of all prostaglandin medicines. Think of treprostinil as a 24-hour infusion of anti-Ibuprofen. Her breathing was actually quite good despite her recent trials in the hospital, so stopping the medicine made medical sense. We monitored her closely during the transition and she quickly improved! She was able to move around more and started on recovery. She was transitioned to a rehab shortly thereafter and continued to improve.

My colleagues’ decision to stop treprostinil was a medical one. But ironically, we would not have considered it if were not for the cost factor of the medicine. Peggy would have gone on for some time on an expensive medicine that was not helping her. At the same time, it was through one party’s insane attempt to “control costs” that simply caused costs to be shifted and multiplied. The entire health care system spent much more on Peggy’s care because no one had the vision or authority to deal with $1400 a day. Pennies compared to the amount wasted, and nothing compared to the risk undertaken by Peggy and her family during this trying time.

Questioning the Price

2012-02-06T08:00:00.002-05:00

The following anecdote was written by Court Nederveld, a patient from Florida who was was among the winners of the 2011 Costs of Care Essay Contest.

Hypertension was the trigger that forced medical cost awareness to the forefront. My doctor decided that with my rise in blood pressure it would be prudent to prescribe a blood pressure medication and order a nuclear stress test. With only a catastrophic insurance policy and a $5000 deductible it was imperative for my financial health to know the cost of both the drugs and the procedure up front.

The prescription was the first thing we faced. The script for Lotrel was written and a trip to the pharmacy revealed an out of pocket cost of $200 for a thirty day supply. This was way beyond my means especially factoring in that this drug would most likely be required indefinitely. Relating this information to the doctor resulted in a prescription for the generic Norvasc and the pharmacy cost was to be $138 for 30 days. Still beyond household finances. I then began to research Lotrel and Norvasc and discovered that they are two old blood pressure medicines, amlodipine besylate and benazepril hydrochloride. I requested that my doctor write the script for these two separate drugs and I now take them daily at a cost of $7 for a thirty day supply of both drugs.

Having successfully challenged the cost of prescriptions my eyes were wide open as I began the quest for a nuclear stress test. My doctor, fully aware that I would be a self-pay referred me to a colleague in our area. A phone call began with introductions, but then I quickly explained I would be a self-pay patient and needed to know the cost of the procedure beforehand. The doctor was unable to immediately provide a cost and after checking with staff requested $2500. I reminded him that I was paying out of pocket. He replied that it could be done for $1900.

I told the doctor that I wanted to be sure I understood. I asked, “if I walked in with a check for that amount I would walk out with the test results?” The physician responded that I would need to come in for a consultation first. Cost $250. I asked again, “if I walked in with $2150 would I walk out with the test results?” Again the reply was that there would have to be a follow up visit to review the results. Cost $250. Hesitation must have been detected in my voice or the doctor detected a possible mark, because the doctor then said that perhaps I didn’t need a nuclear stress test and a regular stress test would suffice. Cost $800.

Consultation and follow up not included. I then asked what would occur if the regular stress test revealed nothing. His response was that we would do the nuclear stress test to be sure. The inverse was also true; if the regular stress test revealed any anomaly then a nuclear stress test would be ordered to provide further information. Total cost out of pocket would be $3450.

Feeling much like a cow on a milking machine I began to test the theory that medical procedures should be available as a commodity. Using the Internet to begin my search, the only specific criteria required was that the location of the facility performing the test be within a short drive from home. It took very little time to find and confirm a company that would provide a nuclear stress test sans consultation, and would willingly and promptly forward the results to my primary care physician. To verify that all was understood I informed them that I would have a check for the exact amount they quoted and no further remuneration would be forthcoming. All was as stated and the procedure was done. Total cost was $938.11.

While these two episodes have been the only challenges faced so far, having related these stories to friends and family, they also have begun to challenge costs and procedures with very similar savings.

It will be several years before Medicare is available to me and until that time I intend to challenge every prescription or procedure as to necessity and cost.

Treating Heart Failure on a $100 Budget

2012-01-30T06:00:00.001-05:00

The following anecdote is written by Molly Kantor, a medical student from Boston who was among the winners of the 2011 Costs of Care Essay Contest.

As a third year medical student, I spent one afternoon each week at a health clinic at a community hospital affiliated with my medical school. This health clinic was focused on primary care for patients with HIV, and many of our patients were poor, homeless, immigrants, or uninsured. Many were also living with their diagnosis in secrecy and had to hide their medications and medical bills from family members.

One of my patients, who I will call Clara, was a 65 year old Haitian immigrant who diabetes, heart failure, and depression, along with HIV. Due to her medical conditions, she was unable to work. She had two grown children, but they did not live nearby and did not know about her medical problems, especially her HIV. Her husband, unfortunately, was very ill and lived in a nursing home. Clara somehow managed on her own, but her lack of insurance, poor medical literacy, and limited English proficiency made it difficult for her to stay healthy, and she was constantly coming to clinic for help.

At one visit, Clara seemed unusually tired and revealed that she had been feeling short of breath at home. In my mind, this raised many questions—Could this be a heart attack? Worsening heart failure? A blood clot in her lungs? Pneumonia? I took a history and did a physical exam, and my top concern was that this was an episode of worsening heart failure, what we call a heart failure exacerbation, and this typically occurs because the body accumulates too much fluid that the heart has trouble pumping it all so it backs up into the lungs.

Usually, this is a patient who you would send to the Emergency Room (ER) and have them admitted to the hospital so that they could get diuretics (water pills) and slowly lose the extra water—all while being carefully monitored in the hospital. However, Clara refused to go to the ER. “Too expensive,” she stated firmly. “I can’t go into the hospital again.”

We realized the burden this would have on her and her family, so we worked around the problem by getting an EKG done right in the office and getting a chest x-ray. When her EKG and chest x-ray supported our diagnosis, we decided to give her the diuretics as an outpatient and to have her come back for a second office visit in a few days. When she returned, she felt that breathing was much easier, and her physical exam supported the improvement.

Instead of this heart failure exacerbation costing thousands of dollars for an ER visit and hospitalization, this cost only a few pills (furosemide 80mg PO costs about $0.29 per pill, and she was prescribed this once daily in addition to her normal medications) plus an extra primary care doctor visit, which runs about $100.

An Expensive Pain in the Neck

2012-01-23T00:36:00.015-05:00

The following anecdote is by Renee Lux, a patient from Connecticut who was among the winners of the 2011 Costs of Care Essay Contest.

One morning this May, I woke up with a stiff neck. I applied hot and cold therapy all day and took an Advil before bed. By the end of that week, I was unable to comfortably move my head and I was feeling numbness down my left arm to my fingertips. I saw my doctor within 24 hours of calling his office. After a brief exam, he was sure of my diagnosis, but he scheduled me for a CT-scan at the hospital the next day, “Just to be certain.”

A day after the CT-scan he diagnosed me with Radiculitus Cervicalgia- inflammation leading to nerve root impingement. I was prescribed a 10-day regimen of prednisone. By the end of my prescription, the pain was gone and my total out of pocket expense was $55 in co-pays. The unintended result of this diagnosis will cost me $2,220 a year in increased health insurance premiums for the foreseeable future.

Stress and anxiety was likely the root cause of my radiculitus. Stress and anxiety brought on by my search for affordable private health insurance. My husband had been out of work for over a year and our COBRA, with the government’s Premium Assistance Rate (ARRA), was about to run out.

I contacted a health insurance broker and explained that I needed an affordable, high-deductible plan for a family of four with no pre-existing conditions. We are all healthy, all average weight and height, non-smokers, none of us are on medication and we have no issues with cholesterol or allergies and no plans for more children.

The broker found us an affordable plan and sent over an application for underwriting which I carefully filled out. Within hours of emailing it back to her I received a frantic phone call. “You said you had no pre-existing conditions!” she bellowed down the line.

She explained that having had a CT-scan and prescription medication within 30-days of my application made me practically uninsurable. She was adamant that the CT-scan alone would trigger an automatic denial. The broker suggested a high-risk plan, which is very expensive. If I couldn’t afford it, I could apply for Connecticut’s High Risk Insurance Pool, but I would have to be un-insured for 6 months in order to qualify.

“High risk?” I thought meekly. I don’t have diabetes, cancer or HIV. I don’t even have high blood pressure. How can I be high risk when my diagnosis was resolved with $5 worth of prescription drugs?

Now I was frantic! I called my doctor. He was incredulous, insisting that my radiculitus was resolved. He offered to write a letter on my behalf. I contacted a friend of a friend, a medical underwriter in another state. All she would say was that my diagnosis within a month of my application throws up red flags for insurance companies.

I took a deep breath and started over with a new broker- we talked over the phone. When I told him about my recent CT-scan I could hear him sucking in his cheeks. There was a long silence.

Finally, he suggested we apply to three insurance companies at once, in the hope that one would accept me. The underwriting process requires me to state if I have ever been declined health insurance. A denial by one company would trigger automatic denials by other insurance companies.

I filled out three applications and agreed to phone interviews with underwriters for two insurance companies.

Eventually, one company offered to cover my family, but denied coverage to me. One company offered us coverage with an exclusion: “This policy does not cover any loss incurred by Renee Lux resulting from any injury to, disease, or disorder of the cervical spinal column, including the vertebrae, intervertebral discs, surrounding ligaments and muscles, treatment or operation therefor and complications therefrom.”

The third and final insurance company approved my coverage with a premium increase to cover my medical condition, “Cervicalgia/Inflammation of the neck.”

Had I known what the repercussions of that doctor visit were, I would have asked my doctor if the CT-scan was absolutely necessary for my diagnosis. Perhaps even the prescription could have been replaced with a higher dose of over the counter anti-inflammatory. The long-term affect of my “pain in the neck” is an additional $189 a month for the foreseeable future.

Teaching Residents about Costs: The Price is Right

2011-12-29T16:14:00.010-05:00

It all started while out to dinner with a couple of my fellow Brigham/Massachusetts General Hospital OB/Gyn residents. We were discussing our favorite old TV shows and one fellow resident's love of The Price Is Right with Bob Barker. After talking about the game show, a light bulb went off in my head and I thought, "Why can't we play The Price is Right with hospital charges to our patients?"

With further discussion we realized that none of us knew the hospital charge, or the cost to our patients for routine workups we routinely order in our gynecology clinic. We really had no idea.

After asking around, I realized that I was not alone in my lack of knowledge, or the idea to play The Price is Right with hospital charges. A couple of years prior the Massachusetts General Hospital Internal Medicine residents had played a similar game with the goal to create awareness of the costs associated with routine workups.

There is very little data on how much residents (and attending) physicians know about the costs of what they prescribe, of what changes practice patterns. I had an upcoming conference for the gynecology residents and faculty around the Christmas Holiday and figured that this might be a good venue.

In first thinking about what costs to use, I consulted my esteemed colleague, Neel Shah. He directed me to use hospital charges which are standardized across patients and not specific to the insurance company or patient. I wanted to use Brigham and Women's specific charges, with local comparisons. Because I wanted it to be pertinent to every day care, I decided to use case based scenarios with 3 of my clinic patients, a hybrid with Choose Your Own Adventure.

I started with our gynecology clinic practice manager (after she overheard me discussing where to find these numbers). She had some information on the visits to our gynecology clinic and hospital charges for the technical end for procedures. But, I soon realized that no one really knows how the hospital charge value is arrived upon, or if and how it changes year to year. And while she could tell me the charge for a RN intramuscular injection fee, she told me to contact the pharmacy for the drug charge. After asking around, I resorted to calling the individual labs/departments to find the appropriate costs. People were often willing to tell me as few people even ask. I called the pharmacy, hematology lab, microbiology lab, emergency room billing, hospital billing, the nurse practice manager for the family planning clinic who coordinates with the nurse in charge on labor and delivery, and a separate operating room billing manager. Because OR costs are determined in increments of 15 min, they are provider and case specific.

We choose a recent hysteroscopy that I had done with an attending who does many hysteroscopies on an average case, and she gave the line item hospital charge breakdown. The microbiology manger prefaced her costs with, "Do you have a pencil and are you sitting down, because you will be blown away!"

The ambiguity of the hospital charge was most apparent when discussing abortion. This is one of the few procedures that many insurances do not cover, so the hospital charge is paramount to self pay patients. The hospital based family planning clinic uses charges from 2004 that are currently being debated. It is unclear if there are separate anesthesia charges, or if they are included in the hospital charge. And because the quotes are outdated, it was difficult to tell what the hospital charge in 2011 is. There is also significant variance in performing the same procedure- dilation and evacuation (or curettage) in the hospital based clinic, the main operating room, in a procedure room on labor and delivery, or in an affiliated private outpatient facility. All of these charges affect our counseling and referral of self-pay patients, and the affordability of these procedures.

The game went over very well with participation and wild guessing from attendings and residents alike. I am not sure if and how practice patterns will or should change, but perhaps knowledge of the systemic charges will better inform our counseling of patients, and consideration of their resources. And, I did pause before obtaining an unneeded gonorrhea/ Chlamydia culture the day afterwards with my newfound knowledge...

2011 Essay Contest Finalists

2011-12-19T09:18:00.001-05:00

Patients and their caregivers are uniquely positioned to recognize inefficiency in the healthcare system but are seldom empowered with information they need to reduce harmful spending. With the help former Surgeon General C. Everett Koop, former White House Budget Director Peter Orzsag, former Michigan Governor Jennifer Granholm, women’s health advocate Dr. Susan Love, and Harvard University Provost and health economist Alan Garber, Costs of Care launched an innovative essay contest this Fall aimed at elucidating both the challenges and opportunities to save patients’ money with routine, cost-conscious medical decisions.

From Labor Day through November, Costs of Care gathered more than 100 personal stories from patients, nurses, and doctors across the nation. According to Dr. Garber, "These stories vividly illustrate some of the anomalies of our health care system - such as its use of market-like features without the all-important requirement of price transparency. The past two years have taught us how difficult it is to reach a political agreement about solutions to the problems of our health care system. But we should never lose sight of the challenges many Americans face in getting appropriate care and paying for it. The problems are all too real."

You can read more about the contest and the submissions that were selected as finalists in our official press release here: http://www.prweb.com/releases/2011/12/prweb9050881.htm

Crowd-sourcing medical bills will uncover errors and overcharges

2011-11-05T12:14:00.005-04:00

This post is by Katie Vahle, co-founder of CoPatient, LLC

What if everyday purchases were priced and consumed like healthcare services?

These days you’d have to try hard not to know the price of a product or service before you buy it. So imagine booking an airline ticket with zero knowledge of the cost, only to return home to a bunch of outstanding bills for the trip. One statement may cover the seat rental and fuel used. Another bill may itemize each time the flight attendant handed out drinks. A few weeks later a bill for the pilot’s flying time may roll in. Can you imagine the resulting confusion, stress and angst?

I know it sounds absurd but this is the nightmare patients face every time they use the healthcare system. And it isn’t uncommon for these confusing medical bills to spiral out of control. Last year, the Commonwealth Fund (a non-profit healthcare research group) reported that 20% of US adults had medical debt or faced problems paying medical bills and only 58% of Americans felt confident they would be able to afford the care they needed.

So what options do consumers have when faced with the reality of paying for their healthcare?

Option #1: Prepare ahead of time. Ideally everyone would find the right insurance policy and shop for services before care is needed. The good news is price-shopping tools are coming to healthcare. Companies such as Healthcare Blue Book, Out-of-Pocket, and Fair Health allow patients to research prices ahead of time. Taking price transparency a step further, straight into the hands of doctors, Cost of Care will make it possible for physicians to consider the cost of medical care as they treat patients.

Inevitably, there are going to be situations where cost cannot be considered beforehand. What options remain for patients facing the resulting bills, explanation of benefits (EOBs) and insurance policy questions? And it’s not just those without medical insurance that face these problems. In 2009, researchers at Harvard University reported medical debt was involved in roughly 2/3 of bankruptcies, even though the majority of those individuals had health insurance!

Option #2: Deal with the aftermath. Most consumers are left to sort through the resulting pile of medical bills to understand how much is owed and if the statements are correct. Healthcare experts are regularly quoted estimating 30% to 80% all medical bills contain mistakes. But just because mistakes happen, it doesn’t mean they are easy to identify and fix.

This is the reason we launched CoPatient. We set out to create a community-based resource where patients can find answers to questions about their medical bills … where caregivers can understand if these bills contain errors … where everyone learns about options to reduce the burden of their medical debt. Rather than consumers facing their medical debt in isolation, imagine a web-based community that demystifies medical bills while pointing out potential errors or ways to negotiate down the debt.

The next time you receive a medical bill in the mail, consider taking action to make healthcare more affordable for yourself and the broader community.

Step 1: Remain Calm. Take a deep breath and don’t let the deluge of paperwork overwhelm you.

Step 2: Get Organized. Sign up for your insurance company’s website to access documentation about your benefits and keep track of EOBs. Reach out to the hospital and doctors’ offices to request copies of each itemized bill.

Step 3: Join the Community. Work with an advocate to recognize errors on your medical bills and identify ways to negotiate a lower price.

Aggregating the experience of those who are dealing with medical bills and sharing that information widely will make everyone facing medical debt better off. It will be services like CoPatient that will help patients understand and manage their medical debt, putting them on a path to physical and financial recovery!

References:
• Schoen, et al. How Health Insurance Design Affects Access to Care and Costs, by Income, in Eleven Countries. Health Affairs Web First, Nov. 18, 2010.
• Himmelstein, et al. Medical Bankruptcy in the United States, 2007: Results of a National Study. The American Journal of Medicine. Vol 122, No 8. 2009.
• Silver-Greenburg, Jessica. How to Fight a Bogus Bill. Wall Street Journal. February 19, 2011.

Federal Debt, Student Loans, and the Physician Workforce

2011-10-22T13:28:00.014-04:00

Ian Metzler is a medical student at Harvard Medical School, currently studying health systems improvement at Children's Hospital Boston

John G. Meara MD, DMD, MBA is Associate Professor in the Dept of Global Health and Social Medicine, and the Director for the Program in Global Surgery & Social Change at Children's Hospital Boston

As of June last year, Americans now owe more in student debt than they do in credit card debt. Student borrowers are winning the dangerous debt race as both amounts hurtle toward the $1 trillion marker, student debt rose by over 500% since 1999 (1). To put this in perspective, student debt has increased at nearly double the rate of inflation seen in the housing bubble that caused the recent financial crisis. There are foreboding similarities between real estate and education. Until 2008, it was assumed that both commodities would unfailingly rise in value and that the market was far from saturated. However, the number of unemployed college graduates is rising and a recent report found that two out of five student loan borrowers were delinquent on their payments at some point in the first 5 years of their loan (2). Moreover, unlike credit card or mortgage debt, student debt is not diffusible through bankruptcy, it stays with borrowers for life.

Despite this unstable situation, in August 2011 Congress passed the Budget Control Act that will abolish subsidies from a pillar of education finance—the Federal Direct Stafford loan. Although undergraduates with the loan will continue to receive subsidies, graduate students will start accruing interest while still in school. With the skyrocketing costs of higher education and the increasing time it is taking post-grads to pay off their loans, this amount adds up quickly. For example, a medical student who matriculates in 2012 and receives the unsubsidized Stafford loan for all four years of her schooling will graduate with $5000 more in debt than a medical student who graduated this year, all resulting from interest charges that accrued while she was studying full time. It often takes medical students 10 years or more to repay all their debt, and in that time interest will continue to add up so that she actually pays $10,000 just for the interest on that single, federally-provided loan. In total, $18 billion is being passed off onto graduate students over the next ten years (3) The removal of subsidies is a subtle step but it sends a strong message. If the federal government continues to retract its commitment to financially support higher education, it risks three major effects: exaggerating the student debt crisis, inhibiting diversity in higher education and discouraging the pursuit of non-profit or socially responsible careers.

Of the many students now financing their higher education, medical students take on the greatest debt because they borrow the largest amount upfront and often defer their payments during residency. With the average indebtedness now at $157,990, the extra $10,000 from the loss of subsidies may seem insignificant, however, it’s an abrupt addition to an already tenuous debt situation (4). The interest rate on the Stafford loan has more than doubled in three years, rising from 2.8 to 6.8%. Total student debt at graduation has increased by 74% since 1999, about 6-7% per year most recently. With physician salaries increasing at rates between 2.6% for primary care physicians and 4.3% for specialists, the debt-to-salary ratio gap is widening quickly and this strain is unequally imposed on endangered primary care doctors. Currently, medical graduates are required to commit approximately 9–12% of their after-tax income to paying off their educational debt (5). This leaves many physicians paying off their loans into their 40s and 50s, when they should be saving for their children’s tuitions.

Event with its precipitous rise, the threat of debt has not curbed the attraction of medical school; there are now two applicants for every one spot (6). But this should not be hailed as a sign of a healthy system. While the applicant pool may still be competitive, it is becoming more economically and ethnically homogenous (5). Over half of medical students now come from families in the top 20% of incomes while only 3% come from the bottom 20% (7). Despite fervent efforts by medical schools to build diversity in the classroom, cost remains the strongest deterrent to minority students considering a medical degree.8 Studies have shown the benefits of a diverse physician workforce, but the escalating financial commitment is discouraging those students that the profession needs the most (8).

The specter of debt profoundly influences students as they consider their post-graduate career options. Graduating medical students must pick between careers with large salary disparities. Not surprisingly, studies have shown a correlation between the higher paid specialties and the number of residency spots filled (9). As average indebtedness has dramatically risen, the number of applicants to primary care residencies has been shrinking. The annual survey of graduating medical students by the American Association of Medical Colleges (AAMC) found that 42.5% were influenced by their level of debt when choosing a specialty (3). The relatively low pay of primary care careers compared to sub-specialties and the pressure of over $150,000 of debt weighs on the minds of even the most altruistic students. This dilemma is not limited to medicine; these same pressures apply to any graduate student trying to leverage an advanced degree to aid their community. Congress’s removal of subsidies across the board will only further tip the scales away from socially responsible career choices.

Some may argue that the government’s provision of financial aid has caused the inflation of educational debt by making it too easy for students to acquire loans. While there is some evidence that increased federal funding results in educational institutions increasing tuition to match demand (10) this doesn’t mean the solution is for the federal government to join the feeding-frenzy. Even if reducing access to loans would exert pressure to lower tuition, it will disparately discourage minority students and those from families with lower socioeconomic status. Removing interest subsidies while maintaining the availability of loans will do worse by drawing students further into unsustainable debt and doing little to curb education costs. If our country wants to continue producing diverse doctors dedicated to serving their community, it should not discourage higher education by making the debt burden untenable. Instead, it should support the efforts of students with continued financial aid and work with institutions to lower tuitions and increase the value provided to students.

The Budget Control Act may not be the only legislation coming from this Congress that threatens medical education. A joint select “super” committee will be formed to propose plans for a $1.2 trillion deficit reduction. Federal loan programs are not immune to further cuts; more subsidies could be removed, even for undergraduate students, or the total amount of aid available could be reduced. Graduate medical education funding will certainly be considered since previous proposals included cuts in Medicare’s contributions to resident salaries and the academic hospitals that train them. Insecurity about funding and support during residency training will further strain the minds and wallets of young physicians, forcing them farther from lower paid primary care careers. If we want the United States to remain a leader in healthcare innovation and produce a generation of physicians capable of surmounting this century’s challenges, we must give a voice to future students and demand that our government protect those that pursue higher education and socially responsible career choices. Without continued support, the medical profession will end up crippled and distorted by the growing weight of unmanageable debt.

References
1. Indiviglio D. Chart of the day: student loans have grown 511% since 1999. The Atlantic. August 8, 2011. Accessed September 7, 2011.
2. Hacker A, Dreifus C. The debt crisis at American colleges. The Atlantic. August 17, 2011. Accessed September 7, 2011.
3. Nelson L. A graduate student burden. Inside Higher Ed. August 17, 2011. Accessed September 7, 2011.
4. Association of American Medical Colleges. Medical School Graduation Questionnaire: All Schools Summary Report: Final. Available at: http://www.aamc.org/data/gq/allschoolsreports
/gqfinalreport. 2009. Accessed September 7, 2011.
5. Jolly P. Medical school tuition and young physicians' indebtedness. Health Aff (Millwood). Vol 24. 2005:527-535.
6. Association of American Medical Colleges. Applicants and Matriculents Data. Available at: https://www.aamc.org/data/facts/applicantmatriculant. 2010. Accessed September 7, 2011.
7. Greyson SR, Chen C, Mullan F. A History of Medical Student Debt: Observations and Implications for the Future of Medical Education. Acad Med. Vol 86. 2011:840-845.
8. Sullivan LW. Missing Persons: Minorities in the Health Professions, A Report of the Sullivan Commission on Diversity in the Healthcare Workforce. 2004.
9. Ebell MH. Future salary and US residency fill rate revisited. JAMA. Vol 300. 2008:1131-1132.
10. Singell LD, Stone JA. For whom the Pell tolls: the response of university tuition to federal grants-in-aid. Available at: http://darkwing.uoregon.edu/~lsingell/Pell_Bennett.pdf. 2005. Accessed September 7, 2011.

2010 Essay Contest Recap

2011-09-23T09:18:00.000-04:00

In anticipation of our 2011 Costs of Care Essay Contest, we thought we would share some of our favorite entries from 2010. With the help of former United States presidential candidate Gov. Michael Dukakis, ABC News Chief Medical Correspondent Dr. Tim Johnson, former United States Health and Human Services Secretary Michael Leavitt, New Yorker staff writer and surgeon Dr. Atul Gawande, and Harvard Medical School Dean Dr. Jeffrey Flier, we culled two winning submissions from over 100 entries.

Tarcia Edmunds-Jehu, a nurse midwife from Boston, MA, beautifully captured how the current health system leaves some patients struggling desperately to pay bills - and providers feeling terrible that their well-meaning care is to blame.

Brad Wright, a graduate student from Durham, NC, articulately described his experience as a savvy patient who did everything possible to avoid expensive and unnecessary care, but got saddled with a large bill anyway.

All of the finalist submissions have since been published, including the stories of hardworking, responsible Americans falling through the cracks, getting a $11,000 bill for indigestion, a $10,000 bill for pre-approved surgery, a $1000 bill for birth control.

Ultimately, the stories came from nurses, patients, and doctors from more than thirty states - Alaska to Texas, New York to California, North Dakota to Florida. The contest was covered in the national media, including NPR and ABC TV. And a great conversation about routine opportunities to save money in the healthcare system with better decisions was started.

Stayed tuned for information about our 2011 essay contest launching soon!

Price Tags and Haggling in an Exotic Market

2011-09-01T19:18:00.009-04:00

Daniela Carusi, MD, MSc is an obstetrician/ gynecologist practicing in Boston, MA

A friend of mine recently took an exotic trip. While shopping in a market, she picked up an appealing item and asked the seller what it cost. She was given a price that seemed high, and paused to consider whether the impulse seemed justified. The shopkeeper grew confused in the silence. Finally he asked my friend, “Don’t you want to know if I can do better?”

Clearly this person was outside of her bargaining comfort zone. Many – perhaps most - Americans are accustomed to paying the price as written on a tag. If you have to ask, you can’t afford it, or so I was told growing up in suburban shopping malls.

American consumers make the same assumptions as they search for transparency in health care costs. Obviously there are charges for these services – they are clearly written on the bills after the services are delivered. So why is it so hard to find out the cost of a service before it is performed? Here it is essential for the customer to understand that the charge and the price paid may be quite different; in fact, they are expected to be different. The health care consumer is not shopping in a chain store whose clerks forgot to stamp the items with their prices. On the contrary, the confused shopper has stumbled into an exotic market without a clue on how to haggle.

I work for a large health care system in a metropolitan area. I am well aware that the amount we charge for services is far higher than the amount we collect from payers. In fact, government payers will often pay 25 cents on the dollar, while private insurance companies will pay more. Still, we rarely receive more than 50 percent of what we charge. The reasoning behind the sky-high price tag always eluded me, and when I saw its effect on my self-paying patients, it infuriated me.

It is no secret that large insurers negotiate payments with health care facilities and providers. We charge a fee, the insurer hands over the pre-negotiated payment, and we do not ask the patient to make up the difference (such a system, known as balance billing, is not permitted where I practice). The patient pays his or her copayment, and the transaction is closed. The same occurs with government payers, though the negotiation seems a touch more one-sided.

This system breaks down for the uninsured patients – either those who have no coverage at all, or those seeking a particular service that is not covered by the insurance policy. The same exorbitant charge will go out to the individual consumer, who will assume (rightly so) that the entire amount is due. Failure to pay the bill lands many an American into financial straits. On a few occasions my billing service has sought permission to send a collections agency after a non-paying patient. Such a decision feels entirely counter to my doctor-patient relationship, one in which I want to support and advocate for my clients.

Once I understood this system I tried to make it feel fair. When I had an uninsured patient, I asked my billing service to charge a discounted amount, calculated by averaging my collections from all payers for that particular service. This met with great trepidation from the billing office. I was informed that it was impermissible for me to charge different amounts to different patients. No one had any problem with the fact that I was going to collect twice as much from the uninsured customer as the insured one. As the shopkeeper, I was expected to throw out the same initial number when asked to charge for my service, but no one was turning to the uninsured patients and saying, “Don’t you want to know if I can do better?”

This is why cost transparency in health care is so difficult. We can’t predict what the final negotiated payment will be without knowing who is paying and what kind of bargaining position that person is in. And no one had taught the individual consumer the rules of the game. Physicians may be criticized for not knowing the costs of the services we order, but there simply is no straightforward answer.

I look forward to the day when health care charges and collections can be both uniform and reasonable. I am thrilled that consumer advocates are seeking clarity in health care costs, but they must understand what all this encompasses. The cost must reflect not only the price of facilities, supplies, high-tech equipment, and service providers, but also the bargaining position of the person who pays.

Do we as health care consumers require a crash course on bargaining? I’ll give it a go for some sparkling jewelry, a piece of furniture, or even tonight’s dinner. But when facing a major illness I’d prefer a price tag, thank you.

A Student's Summer Reflections on Price Transparency

2011-08-22T19:37:00.007-04:00

Jeffrey Herman is a sophomore at Brandeis University and just completed a summer internship with Costs of Care.

I can’t think of a single industry that is more inherently personal—more emotional than health care.

Everyone has a story of how the health care system has impacted their lives. My family’s experience with the healthcare system had both positive and negative results. Thankfully, my brother survived a brain tumor as a young child and my father’s heart disease was treated early enough to prevent a heart attack. However, the bills for these procedures were astonishing. Perhaps even more shocking was the complete inability of doctors and insurance companies to give an accurate estimate of what the procedures would cost. There was no more clarity with routine follow-up procedures like MRIs and stress tests. On any given day, a doctor may order the same test several times, so how does uncertainty exist about how much it costs? And if doctors don’t know the cost, how are patients supposed to be informed consumers of health care?

Many insured patients don’t worry about how much a procedure costs—frankly, with third-party payers, they often don’t have to. In fact, if you are sick and diagnostic tests are covered, you might push for your doctor to administer all potentially beneficial services. However, at some point the over-utilization of services at unclear prices results in detrimental care that is ultimately more costly than helpful. In some cases, particularly for patients with high deductibles or loop holes in their insurance plans, these costs may even cause significant financial harm.

When policymakers and doctors try to arbitrate solutions to the problem of price transparency, progress often can seem out of reach. Most avenues to change are either politically unpalatable or financially impractical. So instead, I propose addressing the problem from a grassroots level. To fix the American health care system as a whole we must engage consumers and doctors to care about it on a personal level. Informed consumers will push for efficient stewardship of resources and doctors will oblige if there are the right incentives to do so.

Several websites, such as Clear Health Costs and HealthCare Bluebook, provide easily accessible information about the price of various procedures. Clear Health Costs even breaks down prices by specific physicians/hospitals. If it is so easy to find reasonably priced care, patients will be more inclined to be cost-effective consumers. Additionally, such websites could exert competitive pressure on caregivers to both have reasonable prices and to be knowledgeable of what their services cost. Assuming that these websites will expand and spark similar sites, they will become an invaluable resource for health care consumers and caregivers.

The widespread use of social media also has significant potential to provide cost information to consumers. Eventually, Twitter and Facebook users may be able to access price information while connecting with friends, family, and other aquaintances. This convergence of health care information with personal networks promotes knowledgeable consumers. Perhaps more importantly, if these health care cost-consciousness permeates social media, users will feel social pressure to spend resources wisely. Imagine 750 million Facebook users with a price transparency application that appears in a newsfeed right along with friends’ status updates and wall posts.

After reflecting upon the state of the American health care system, it can be difficult not to feel optimistic. Party politics seem to overshadow progressive policies. Any potentially beneficial policy or idea is immediately rejected because it will be politically inflammatory or financially taxing. However everyone—on all ends of the political spectrum—can agree that change is necessary. Perhaps a grassroots approach that engages the public in cost-effective care with greater price transparency will bring about much needed reform. Providers and lawmakers will take notice if the public pressure is great enough. Ultimately, it is up to us.

Dropping the Price of Surgery

2011-08-07T11:50:00.009-04:00

The following anecdote is by Dr. Jeffrey Rice, MD, JD - CEO of www.healthcarebluebook.com

I would like to share a story about my son’s recent surgery that, while only one simple case, reveals the foundational problem with the U.S. health care system.

I write this story as a father of a 12 year old boy who has cerebral palsy. Jack is fortunate to be healthy and active with minor medical needs. As he has grown he experienced some issues with contractures in his right lower leg which recently required a minor 2 hour outpatient surgical procedure. That is where our saga begins.

When Jack’s surgery was scheduled I started the time consuming process of getting price estimates from the surgeon, anesthesiologist and the facility since we have a high deductible insurance plan. The physician fees were straight forward and relatively easy to obtain, not so with the facility. Jack’s surgery was scheduled at the local hospital’s outpatient surgical facility. I called the hospital to request a price for the surgery and they said they couldn’t really tell me. They offered to send the procedure codes to an external reviewer who would provide a general idea of the anticipated charges. Three days later the answer came back at $37,000. I reiterated that I had high deductible insurance and needed to know the actual price they would bill me after an insurance adjustment to the network fee schedule.

The hospital next referred me to my insurance company. The insurance company referred me to their PPO network. The PPO network said that they could not reveal the prices until after the case was performed. I called back to the hospital.

At this point the hospital said that they could not tell me how much the discounted price would be either and they also wouldn’t negotiate a cash price with me. They expected the discounted price to be in the range of $15,000 to $25,000. They also offered to limit my out of pocket portion to $10,000. I am now on day six with over a dozen phone calls; not the price I expected for a 2 hour outpatient procedure.

I asked my son’s surgeon if he ever operated at any independent Ambulatory Surgical Centers (ASC) and if so would that be an appropriate place to perform my son’s surgery. As it turns out there is an ASC in the ground floor of his office building and it would be no problem to do the surgery there. One phone call and 10 minutes later I have the exact price for his surgery- $1,515.

My son had his surgery and is doing well. We got a fair price because we demanded more of the system.

This simple surgery makes me pause to consider so many issues we face in our health care system. Why does it take days and dozens of phone calls to get pricing information from hospitals? Why can’t hospitals provide upfront prices for their services? Why do they expect to bill patients unknown amounts that they determine after patients have already received care? And what about the patients that don’t know the system. Would a patient facing a $40,000 bill delay or defer surgery when they might get the care they need if they were able to use the $1,500 center? Do they know to ask? No. Does anyone really help them? No.

And what about the healthcare providers. Why didn’t my son’s surgeon recommend the ASC in the first instance? Why hadn’t the surgeon done a single procedure in the ASC in over 2 years? At 10 cases per surgical day, at about $20,000 more per case; how much has this practice cost patients, employers and insurance companies? Millions each year for one surgeon and his patients?

It all goes back to our foundational problem with U.S. healthcare. The business model of our health care system is based on third-party payments from insurance and government. This has evolved to the point that many patients and providers don’t stop to consider why they shouldn’t spend $37,000 for something that could easily be delivered for $1,500.

It is not easy being a patient-consumer, but it can be done. Let’s hope the system moves in a direction that allows this to happen.

My Patient Needed to Be Delivered

2011-07-18T09:29:00.006-04:00

The following anecdote is by Alexander Friedman, MD, a fellow in maternal-fetal medicine at the University of Pennsylvania

My patient needed to be delivered. She had just developed eclampsia, a potentially fatal disease that afflicts women in the second half of pregnancy. She had suffered a seizure and dangerously high blood pressure, and was at risk for far worse, including a stroke. No one knows why this condition arises, but delivery sure clears it up in a hurry.

So we gave medication to start labor, and the nurses placed a fetal heart monitor.

Worn like a belt, but higher on the abdomen, the ultrasound monitor would play a crucial role in the hours to come. It prints a read-out strip of the baby's heart rate, and the pattern would guide us in determining whether the delivery would be natural or through cesarean section.

As I suspected, the baby's heart-rate strip showed worrisome changes soon after labor began, and I knew it would get worse as labor progressed. We would fight through the night to have a natural delivery. But ultimately that single heart-rate test, which is surprisingly unreliable, would be a key factor in whether my patient would get a C-section or not.

Nearly all American mothers are monitored during labor, and bad fetal heart strips are an important cause of high cesarean section rates. A recent report detailed the dizzying increases: Almost one in three babies was delivered by cesarean in 2007, the most recent year for which data are available. That rate has grown by more than 50 percent in a decade.

I have performed hundreds of cesarean sections during residency, and many were the result of bad heart-rate strips.

A jagged pattern indicating increases in the heart rate reassures us that the baby's brain is awake and alert, and that labor could continue. But a flat line or decreases in the heart rate after contractions make us think the baby is not getting enough oxygen and pushes us to do a C-section - delivering the baby through incisions in the abdominal wall and the uterus.

For the worst readings, we believed every second counted and rushed the surgery: If the baby wasn't delivered one minute from the first incision into the skin, we had moved too slowly.

The complication we feared most was hypoxia, the baby not getting enough oxygen during labor. Going too long without adequate oxygen could result in a serious permanent injury, such as cerebral palsy, or even death.

No test is perfect. But almost every time we whisked a mother back to the operating room, and I cut through skin, fat, fascia, and finally the muscle of the uterus, expecting a blue, floppy baby, the child I delivered emerged pink, healthy, and a little bit angry.

Were we saving lives and averting disaster? Or were we performing unnecessary surgery?

Fetal heart-rate monitoring is a screening test. Good tests get several things right; they are cheap, detect a possible problem when there is still time to act, and minimize unnecessary follow-up tests.

Fetal heart monitoring is an appallingly poor test. The test misses the majority of babies with cerebral palsy, the condition researchers hoped it would prevent. It causes increased rates of a painful and expensive surgery: cesarean section. Even worse, almost all women undergo continuous heart monitoring during labor, not just those at highest risk.

Why do doctors cling to continuous fetal heart monitoring? An obstetrician will likely point to the fear of being sued, but the complete answer is more complex. Our medical culture prizes technology and tests, even if they don't work and can cause harm. "It's our bias that anything that can be quantified is an improvement," said H. Gilbert Welch, a professor at Dartmouth Medical School whose research focuses on harm caused by screening and over-diagnosis.

"I think we get in trouble when we start promising things to . . . well [patients]," Welch said in an interview. "It is not that hard to make them worse."

Throughout the night, I struggled with my patient's bad fetal heart strip. I wanted her to avoid a cesarean section. To improve the strip, the nurses and I tried giving her oxygen, changing her position in the bed, even rubbing the baby's head through the cervix to wake it up.

Finally, at 3 a.m., I felt compelled to recommend cesarean. The strip continued to look bad, and my patient's labor progressed slowly.

We went to the operating room, and delivered the baby by cesarean. My patient's child greeted the world pink and well-oxygenated.

The test was wrong again.

Cost Awareness Anecdote: Hidden Medication Costs

2011-07-05T07:46:00.004-04:00

The following anecdote is from a Massachusetts patient covered by Medicare

Always covered by an employer health plan, I had never given a thought to prescription costs – my medications had been covered by moderate copays. This changed when I retired and enrolled in Medicare (and a Medicare Part D plan).

Just prior to retirement, my eyes suddenly began tear and swell so much that it impacted my vision. The eye doctor diagnosed an allergic reaction and prescribed prednisone drops to reduce the swelling and antihistamine drops to combat the reaction. The antihistamine drops required pre-approval by my employer’s PBM, which was granted. Per my employer plan I paid a relatively small copay for each prescription.

Three weeks later, on a follow-up visit, the doctor recommended that I continue the antihistamine drops for the duration of the allergy season. But I was running out and had to refill the prescription. Now I was on Medicare so I checked the cost of the drops on the website of my Part D provider. It was $279. Could this be?? Oh indeed it could -- and I had a high deductible and would have to pay all of it!! Of course, if I continued to need the drops, the plan would eventually assume more of the expense – but even then the cost would be high – to the plan, even though not as much would come from my own pocket.

I was somewhat puzzled. I did not have an exotic illness requiring a specialized drug and it seemed that there should be a less expensive alternative. After a conversation with my doctor, it turned out that there were, in fact, two reasonable options: one a prescription which was ½ the price of the current prescription; the other a medication that had previously been script-only, but was now available OTC – the cost for this was $14.79. He suggested that I experiment with the alternatives to see if they were as effective as the current drops. Fortunately, the $14.79 version was just fine. Of course, it might not have been, but it was. But had I not asked, it would not have been offered. And had I not had a plan that exposed the cost of the expensive prescription, I would not have asked.

A few weeks later, I had a similar experience while visiting my 92 year old mother. In response to a complaint about stomach pain, her doctor had prescribed an extremely costly medication. She was required to pay $80 for the first prescription and then $184 when she tried to renew it. She decided that it hadn't really helped much anyway and decided not to renew. But I realized that had the cost not been so high, she would have ordered it.

These two experiences led me to wonder about the impact of "hiding" medication costs from patients (as my employer plan had essentially done), and of doctors not being sensitive to cost issues until prodded by patients. Of course, sometimes the more expensive drug might well be necessary – but surely there must be many instances in which money could be saved by balancing therapeutic need and cost.

Lessons Learned from my Uncle's Sacrifice: A Proposal to Reform Medicare

2011-06-20T14:56:00.010-04:00

The following anecdote is by Dr. John Maa, Assistant Professor of Surgery at the University of California, San Francisco. It is a follow-up to his original story published here three months ago ("Ultimate Sacrifice"). You can also read the story of his mother in this week's New England Journal of Medicine ("The Waits that Matter").

My uncle’s tale illustrates the fundamentally American tragedy of experiencing financial and medical catastrophes simultaneously, and having to choose between rationing one’s own care or depleting precious financial resources for potentially lifesaving treatment that could as well be futile.

From my perspective as a surgeon, an additional tragedy is that my uncle never got the chance to know his cause of death with certainty. There is a small chance (approximately 5 percent) that his jaundice arose from a benign or treatable condition such as lymphoma, an autoimmune process, or another noncancerous condition, and that if he had received full treatment he would be alive and well today. But a diagnostic surgery would likely have added $100,000 to his final medical costs. Thus my uncle weighed the odds and rationed his own care to preserve his daughters’ inheritance for their future benefit.

To answer the question I posed at the end of the previous article, I do not believe that my uncle was treated fairly by the system. Sadly, he was just a few years too young to receive Medicare benefits, despite having paid into the system for decades. I was especially struck by the feedback about my uncle’s story from readers in France, Poland, Canada, Cyprus, and other countries with universal health care who were stunned to read of the dreadful timing in this desperate situation.

The Problem:
Only in the American employment-linked health insurance system does the loss of job also bring with it a loss in access to health care. The special irony is that my uncle had actually just become employed as an independent contractor a few weeks before falling ill. He thus had not felt the need to purchase COBRA as he hoped to soon receive health benefits. His charity care application had been denied as he was employed when he fell ill and had truthfully reported his future inheritance from his mother (even though he would not have access to it for over a year). Given these assets, he likely would not have qualified for Medicaid either.

In 2000, the WHO rated health systems worldwide. The most interesting aspect of this report was the methodology. One fourth of the ranking was dependent on the concept of “financial fairness”, with the ideal that the system be progressive, wherein wealthier people would pay a higher percentage of their income for healthcare than poorer people. Instead, the way Americans pay for healthcare is actually the opposite of the ideal championed by the WHO. The underinsured and poor pay a higher proportion of their household income for health insurance and are particularly vulnerable to bankruptcy from medical illnesses, while wealthier people are more likely to receive tax free complete health coverage as a benefit of employment.

Except for patients who require dialysis or develop certain disabilities, Medicare is generally an all or nothing proposition, with the magic threshold at 65 years of age. According to the Medicare website, “Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years or older and a citizen or permanent resident of the United States.”

Between joining the workforce at age 25 and retiring at age 65, many Americans will make Medicare payments for many years beyond the mandatory 10- year requirement. No credit is given to people like my uncle, who pay into the system for decades but fall ill before the age of 65, whereas pitfalls and loopholes in the current Medicare system cover others who never paid into the system at all.

I observed one such loophole during my time working as a general surgeon at a county medical facility serving the indigent population in California. Not infrequently, I witnessed “medical travelers” with kidney failure who came to the United States from other countries, where dialysis was no longer offered to them cost-free after the age of 65, thereby requiring them to pay out of pocket. These patients would apply for “emergency” Medicare in the U.S. to continue life-saving dialysis that they could not afford in their own countries. In other instances, patients actually possess sizable financial assets but conceal them by giving these away to their children or not reporting these truthfully (unlike my uncle) to qualify for charity care or meet Medicare eligibility requirements.

It is hardly news that the existing Medicare scheme already includes an element of rationing by limiting the number of Medicare inpatient and long-term care days a person can receive. Our nation has yet to meaningfully discuss end of life care and the potential solutions by setting a budget to overall spending, but starting this discussion will inevitably become necessary.

In 2010, Medicare had 47 million beneficiaries or 15.3% of the total population. In 1965, there were 19 million enrollees (9% of the total US population). This increase is partly due to the significantly greater life expectancy (age 70 in 1965 to age 79 in 2011) achieved by the successes of the American health care delivery system. This more than doubling of the number of recipients is a contributory factor to the looming insolvency of Medicare.

Reforming Medicare:
An alternate construct might be for individuals to accumulate a budget of health care benefits for personal use that varies according to the contributions they made into the Medicare system over their lifetime, and is available regardless of the age at which they would like to make withdrawals. Perhaps this individual allocation could be supplemented by a fixed baseline contribution from the government, which we could place in the range of $20,000. In this alternate world, medical prices and costs would be completely transparent, and the patient (or decision-maker if the patient is incapacitated) could choose from a menu of options for how aggressively to spend this allocation, recognizing that if they exceed the budget is exceeded then he or she must pay the balance on their own. Luxuries and optional care will either deplete the budget, or be paid for out of pocket. The concept of personal responsibility and taking care of one’s health will be reinforced in this scheme, though an adjustment must be made for those who fall ill to diseases that are the result of bad luck and circumstances beyond their control. Perhaps an individual can even choose to opt out of the program (as my uncle would have done), to be able to save some fraction of the remaining balance as an inheritance for his or her descendants.

Equally important, this mechanism may drive health care prices down, as purchasers will be motivated to be frugal and educated, rather than ignorant, of the true costs of care, while providers, hospitals and manufacturers will need to lower prices as they compete for business.

I discovered the Costs of Care essay competition while researching the key difference between the “costs of care”, and the “price of care”. The two are quite distinct, and have been fundamentally misunderstood in the health reform debate. In addition to “bending the cost curve”, our nation should seek to “bend the price curve” through a deeper understanding and transparency into how the health care industry sets the prices of medical care in America.

Ultimately, my goal in writing this essay is to assist in reframing the national dialogue about health reform. The debate about rationing of health care should not simply be about the extremes of either denying access to all care, or allowing unlimited access to full treatment. Instead the time has arrived for our nation to intelligently explore the full range of possible solutions in between.

Epilogue: I celebrated the two year anniversary of my uncle’s passing by visiting the long term care facility where he spent his final days. I was impressed by several visible changes for the better (new services, a higher occupancy, social programs, and a refurbished lounge for residents). It gave me hope that progress is possible. My uncle’s younger daughter will begin college in Pennsylvania this fall. His elder daughter graduated with honors from college in May 2011 and will begin work in Manhattan over the summer. At her commencement, a video was played from freshman week four years earlier, and footage of my uncle that our family had never seen before was displayed to all of the graduating seniors. Despite making the ultimate sacrifice, my uncle’s presence was palpable at the celebration, and his intent fulfilled.

Thanks for shopping: Cost-consciousness and clinical decision-making

2011-06-05T13:28:00.005-04:00

Ian Metzler is a medical student at Harvard Medical School, currently studying health systems improvement at Children's Hospital Boston.

With computerized health systems, physicians can place orders as easily as they can shop online at Amazon.com. Just a few clicks and your physician can purchase a panel of blood tests, futuristic imaging and diagnostic procedures that will hopefully guide their path to solving your ailments.

Search. Click. Submit. Repeat.

Except, unlike online shopping, physicians don’t see the price tags and they never get the bill. Doctors are the true consumers of health care dollars, but the rules of economics falter when the consumers aren’t the ones that pay up. This disconnect is a fundamental cause of the uncontrollable inflation of health care costs in the US. Ignorance about cost fuels spiraling inflation in healthcare because without cost-related restraint in utilization there is no incentive for suppliers of healthcare services to get any cheaper.

But the system’s stuck. While physicians ultimately control the tap of healthcare costs, exerting that control can contradict their primary objectives. Physicians feel a responsibility to do the most they can to make the patient in front of them better. If young doctors don’t order a test, a superior may berate them for not considering it in their differential. Malpractice always lingers as a consequence for a diagnosis missed. Some claim that it is irresponsible or unethical for physicians to consider cost in their clinical decision making. Perhaps good doctoring should be blind to finances. And after all, it’s no skin off the doc’s back to just click a little more, some of that money may even end up back in their own pockets.

Despite all these pressures pushing physicians to just do everything imaginable, many realize that physicians also have a responsibility to balance the health of the individual and the health of the community. No matter how much we try to ignore it, health care is a limited resource and giving more to one inevitably means less for another. In Cooke’s 2010 NEJM article on cost-consciousness in medical education she writes, “[We must] stop hiding behind the myth that every physician should and does apply every resource in unlimited degree to every patient for even minimal potential benefit”. The reality is, physicians already dictate how finite resources are allocated in the hospital. Physicians decide who gets how much of their time, who deserves a consult from a specialist and who should be in an ICU bed. Why don’t physicians exhibit the same judgment and restraint for expensive tests and imaging studies? Cost-consciousness at this scale may be beyond human cognitive capacity, especially when competing with disease differentials and medication lists. It’s far easier to count down the hours in the day and notice when all the ICU beds on one wing are full than to be mindful of the obscure strings of digits and commas that represent their health care spending. The finances of health care are far less visible but just as real.

While respect is growing for skyrocketing health care costs, the average doctor is clueless about the price tag of their day-to-day clinical shopping-sprees. In a 2008 review of 14 studies, Allan et al. found that doctors came up with estimates that were within 25% of the true cost of diagnostic tests less than one-third of the time. And, interestingly, they found that the country, level of training, and specialty of those surveyed did not impact accuracy. This tells us a few things: doctors have no idea how much they’re spending for their patients, it’s not just US doctors or super-specialists who are clueless, and most importantly, it doesn’t get better the farther along young docs get in their training. The Chief of Medicine who can diagnose Peutz–Jeghers syndrome from across the room may have no idea how much it costs to do a colonoscopy or a genetic workup for the patient. It’s not just students who are naïve and, sadly, financial insight doesn’t come with time.

For our generation, this deficit threatens to spin out of control. The stakes rise as physicians become capable of doing more and more for each and every bullet point on their differential diagnosis. Immunoassays and genetic tests are available for the obscurest pathologies. Imaging technology can produce increasingly fantastic windows into the human body. But as these options become more numerous and specialized, our grasp on what’s necessary to produce quality care only slips further.

If cost-consciousness among physicians is the goal, how do we achieve it? Competition for doctor’s time and brain-space is fierce. Cooke thinks that health finance should be integrated into medical school curriculum from the start. Educators suggest dual-degrees in business. Researchers have tried post-graduate education campaigns. Hospitals try to intervene with computerized decision-support systems. Insurance companies stall with mandatory pre-authorizations. But few interventions have shown substantial increases in awareness of cost or changes in physician behavior.

Health information technology (IT) may be partly contributing to the ease of over-zealous ordering, but it may also hold the potential to curb it. Two large randomized controlled trials conducted at a large teaching hospital attempted to show that the inclusion of costs in the ordering system itself might increase awareness of physicians and decrease the over-utilization of diagnostic laboratory tests and radiological imaging. Although it was conducted over four months and involved over 24,000 patients, the study showed a statistically insignificant 4.5% decrease in the number of laboratory tests ordered and almost identical rates in the number of imaging studies ordered. The authors concluded that more intrusive measures were needed in order to affect change, like prompts similar to those in decision-support. Price tags alone weren’t enough.

Ultimately, the judicious and cost-effective utilization of limited health care resources remains a physician’s responsibility. They’re trained to make clinical decisions and manage treatment plans but those same decisions dictate the finances of patients and the health sector as a whole. These dual roles are inseparable and increasingly consequential yet the majority of physicians are too unaware or unprepared to meaningfully incorporate financial consequences into clinical decision-making. Any efforts to reform health care policy to reduce costs and spend our health care dollars more efficiently and equitably must start with assisting doctors make better and more informed decisions for their patients. Physicians must wake up to the reality of modern medical practice and start educating themselves about the economics of their patient care methods and they must demand the information when it’s lacking. This will require a culture shift in how medicine is practiced and future generations of doctors are trained. In a world of competing priorities and information overload, physicians will need help. More cost-effectiveness data is needed so that physicians have an evidence base for rational allocation of resources. Health IT, decision-support, payment reform and institutional leadership are all essential strategies to encourage cost-consciousness and appropriate health care spending, but none can be effective in isolation. The tap of health care dollars that threatens to run dry is controlled by thousands of physicians and their daily interactions with unique patients. Only through innovative programs and education campaigns can we reduce the flow of excessive health care spending and help physicians avoid irresponsible clinical shopping sprees and begin to make evidence-based decisions with a broader context in mind.

REFERENCES
1. Cooke M. Cost consciousness in patient care -- what is medical education's responsibility? N Engl J Med 2010;362:1253-1255
2. Abbo ED, Volandes AE. Teaching residents to consider costs in medical decision making. Am J Bioeth 2006;6:33-34
3. Goold SD, and Stern DT. Ethics and professionalism: What does a resident need to learn? American Journal of Bioethics. 2006. 6(4): 9–17.
4. Allan GM, Lexchin J, Wiebe N. Physician awareness of drug cost: a systematic review. PLoS Med. 2007;4(9):e283.
5. Allan GM, Lexchin J (2008) Physician Awareness of Diagnostic and Non-drug Therapeutic Costs: A Systematic Review. Int J Technol Assess Health Care 24: 158–65
6. Bates et al. Does the computerized display of charges affect inpatient ancillary test utilization? Arch Intern Med. 1997;157(21):2501-2508.

MD Clarity - The Physician's Role in Patient Price Transparency

2011-05-16T13:31:00.010-04:00

This post is by Mike Albainy, Founder of www.MDClarity.com

How much will a visit to the doctor’s office cost? It’s a seemingly simple yet perplexing question for both patients and physicians. A fundamental problem continues to be that patients and physicians do not readily have access to the expected costs of care, from lab tests to MRIs to outpatient surgical procedures. Today’s complex medical reimbursement structure makes this information elusive, in turn limiting physicians’ abilities to have a transparent discussion with patients about the impact of clinical choices on their out-of-pocket costs. While the need for transparency is nearly universally accepted, the questions of who should make this information readily accessible and how we get there have yet to be settled.

Why are estimates for care so elusive?

Simply put, medical bills are complicated. There are two key factors which determine an insured patient’s responsibility for a medical bill: what their insurance company has agreed to pay the doctor, and what their specific plan benefits include, from their deductible to coverage for specific types of procedures. Additionally, the provider’s charge structure is relevant for uninsured patients, but has little bearing in the ultimate patient responsibility for most insured patients.

The first question alone, what the insurance company has agreed to pay the doctor, is not easy to answer. Every insurance company negotiates separate contracts with each provider, and these agreements are challenging to interpret and “translate” into software accessible by medical staff or physicians due to the many unique exceptions and rules.

The question of the patient’s plan benefits can be even more challenging to answer: each insurance plan can have different deductibles and policies, and the patient often doesn’t know the status of their benefits. Do you know your deductible balance at this moment?

Coupling these two pieces of information quickly, and the time of service when a physician is with a patient, can be daunting.

There are some alternatives to providing a precise estimate to the patient. One alternative is a simple price list akin to a “rack rate” at hotels, or a generalized estimate regardless of the patient’s insurance company or benefits. Some organizations have chosen to post their charges online, but they are unfortunately not reflective of what the insurance companies actually pay and ultimately become a patient’s responsibility.

This all begs the question: who ultimately should be responsible for providing this information, accurately, to patients?

Who can deliver?

The most convenient answer has usually been that it is the patient’s responsibility to determine what their service will cost. This belief has spawned a number of websites, most of whom use some variation of freely available Medicare data, to deliver a generalized estimate of payments for care. This approach makes two leaps of faith – first, that patients will take the initiative to research healthcare prices, and second, that it is good enough to know a regional or national average instead of a precise, customized answer.

The next group, insurance companies, have made some strides in price transparency. The trend, however, is for insurers’ patient portals to not specify their rates for specific physicians, but rather use regional estimations. Furthermore, this information is non-standard, and usually only available to patients (and the more web-savvy ones at that), not others in the industry.

That leaves us with the providers as the ideal group to enable price transparency. The physician-patient relationship is the base for the entire healthcare system, and layering the cost dialogue into that existing, trusted discussion stands to reason. Physicians and other providers sit in the unique position of being able to translate pricing questions for patients into a language that makes sense in the context of the care delivery model. If correctly enabled, this could change the way physicians and patients approach medical decisions about the benefits of performing services that may have marginally more benefit for disproportionately higher costs.

So, how can they do it?

Some of the rudimentary methods above – using base charges, some variation of Medicare pricing, or payer-driven information – can be serviceable in limited situations, but not ideal in today’s more demanding, high-deductible environment. Practice Management Systems have made limited progress in the price transparency areas, but their offerings tend to work best in the most basic situations when intuitive user interfaces are not required.

Fortunately, as technology improves, recent advancements are opening new doors. For example, MD Clarity’s web-based software can be delivered as a service via the web and mobile devices to make accurate information available within seconds rather than spending unnecessary time tracking it down or, worse yet, settling for data that isn’t entirely accurate. The newest, most sophisticated software combines payer-and-plan-specific information for results that are completed customized to the provider’s practice and the patient they are dealing with. Most of all, this complex software puts the price transparency discussion squarely within the physician-patient relationship where it belongs.

Mike Albainy is a Founder of Minneapolis-based MD Clarity, a firm providing web-based solutions enabling physicians and their staffs to provide accurate patient price estimates. The software allows physicians and office staff to confidently engage in a more informed dialogue about the cost and benefit of medical service options.

Cost Awareness Anecdote: Fraction of the Pie

2011-05-06T17:40:00.007-04:00

The following anecdote is from Eric Lespin, a patient from Alaska.

A torn meniscus. It did not disable but it impaired, and unpredictably. My stomach learned quickly to tighten at the sound of A.’s peculiar whimper in response to a crippling pain that would shoot through her at seemingly innocuous movements of the afflicted leg. We have health insurance of sorts, the type that will help you keep your home if tragedy strikes, but that does not shield you from the brunt of what most of day-to-day health care cost is about. We’re well practiced in deferring and foregoing care. Here however, we reluctantly acknowledged that a hospital would need to be visited and a doctor consulted.

Tests and a physical examination made clear that an operation was unavoidable. The doctor was a thoughtful man who conscientiously went through what the operation would entail. Surgery would take half a day, then back home by afternoon, convalescence over the following few weeks, with complete recovery the usual outcome. While not painless, the procedure seemed reassuringly routine. His tone was caring and his outlook about our case optimistic.

The admirable candor with which medical personnel have learned to speak about difficult topics concerning our bodies and our care did not extend to the costs involved. The question of what the procedure would cost, gently broached, initially baffled the staff, eliciting answer-deflecting counter-questions about the adequacy of our insurance coverage, but resulted in no quotes or estimates. With my insistence on the point, an assistant promised that a figure could be determined, if we needed it, once the surgery was scheduled. “But not before?” I was now the baffled one.

A person who linked dollar amounts to medical procedures was eventually found and I was seated at her desk. She required a billing code however, and without a scheduled surgery there was none to offer. As we danced around that issue, my concern over the cost of repairing A.’s knee was replaced by another curiosity: “Is what I’m asking not routine?” It was not. A billing code was finally lifted from the paperwork of a previous operation, and after some minutes a dollar number was produced. It was a sizeable figure, but less than what I’d been led to believe such things cost, at least in the United States. I suspected something still was not clear. “This is then what I’ll pay, roughly, to have the procedure done?” I asked in a half questioning, half confirming tone. “No, that’s just our part of it, the hospital has their charges, of course.” “But we’re in the hospital and I’m asking you for an estimate of what this operation will cost.” She explained, with some frustration, that the operation itself was only a fraction of the pie; she had no way of knowing what the hospital might charge.

This was not actually true – she was far better situated than I to know what the hospital charges would be. It was if I had asked for the price of a new car on a showroom floor and had been told by the car salesman that only the engine could be quoted – other components’ prices would need to be discovered separately, by me. In the real world, the total price for most services and products are conveyed to the consumer by the seller or provider at the end of a long chain of added values. In this case, the multiple components of the medical care provided a shield to simultaneously obscure the cost and justify its lack of availability. The billing person scribbled down a number for me to call, then asked if there was any other matter where she could be of assistance.

Hoping for a face-to-face conversation, I asked at the hospital information desk for directions to the office matching the telephone number scribbled on the scrap of paper. “That’s not in the hospital”, the information desk attendant declared, “but the call is toll-free”. We went home. For some reason, the inability to locate a price anywhere on the hospital premises for an operation that would take place there shook us as much as would have an encounter with a manifestly incompetent doctor. Though A. and I talked only briefly of the cost, or rather the opaqueness of it, we were both invaded with a foreboding that a thing so untethered to its own cost would be in some unspoken way unreliable, dangerous. That night, A. announced that she wanted to do the procedure overseas . . . anywhere but here.

Cost Awareness Anecdote: Unlucky Student

2011-04-12T15:45:00.006-04:00

The following anecdote is from Kimberly Seelye, a patient and a graduate student at the University of Michigan
 
 Last  July,  I  found  myself  needing  to  visit  a  doctor  for  an  urgent  medical  issue.  My  period  had  started  in  April  and  never  stopped.  It  was  light,  so  it  wasn’t  too  much  of  an  annoyance,  but  after  three  months  I  figured  I  needed  professional  help.
  
 I  had  started  graduate  school  in  Michigan  the  year  before  and  was  back  home  in  California  for  the  summer.  I  wasn’t  sure  if  the  new  insurance  that  I  paid  over  $2,000  per  year  for  through  the  school  would  cover  a  doctor’s  visit  in  a  different  state.  I  called  the  insurance  company  to  check  and  they  said  they  cover  any  doctor  in  the  country.  Happy  to  hear  this,  I  called  and  made  an  appointment  with  the  doctor  I  had  been  seeing  for  years.
 
 Though  my  insurance  had  changed,  my  doctor’s  appointment  was  the  same  as  always,  I  just  had  a  slightly  higher  co‐pay.  I  had  a  routine  check‐up  and  the  doctor  ordered  some  blood  tests  to  help  diagnose  my  problem. Within  a  few  weeks, the  doctors  figured  out  what  was  wrong  and  cured  it.  I  returned  to  school  in  September  happy  and  healthy.  As  far  as  I  knew,  my  business  with  the  doctor  was  finished.
 
 While  in  California  for  the  summer  I  didn’t  have  a  permanent  address.  I  stayed  with  friends  for  a  few  weeks  at  a  time  and  house‐sat  for  other  friends  while  they  were  on  vacation.  This  arrangement  allowed  me  to  live  cheaply  for  the  summer  and  save  money  for school.  However,  when  the  doctor’s  office  asked  for  a  local  address,  I  didn’t  have  one.  I  gave  them  the  address  of  a  good  friend  I  was  staying  with,  figuring  my  friend  would  tell  me  if  mail  arrived  for  me  at  her  house.  Although  I  wasn’t  expecting  to  receive  any  mail,  I  tried  to  have  my  mail  forwarded  to  my  school  address  at  the  end  of  summer,  just  to  be  safe.  The  Postal  Service  said  they  were  unable  to  forward  my  mail  because  my  school  address  was  considered  a  business  address  and  they  don’t  forward  from  residential  addresses  to  business  addresses.  This  frustrated  me,  but  as  I  said,  I  wasn’t  expecting  any  mail  anyway. 
 
 Around  October  I  received  a  call  from  a  representative  of  the  doctor’s  office  saying  I  had  an  unpaid  bill  in  the  amount  of  around  $100.  I  told  her  that  I  had  moved  back  to  Michigan  and  never  received  a  bill.  She  said  she  understood.  She  allowed  me  to  pay  my  bill  over  the  phone  with  a  credit  card  and  updated  my  address  in  her  files.  A  week  later  I  received  a  voicemail  about  an  unpaid  bill  from  the  same  office  and  dismissed  it;  I  had  just  paid  my  bill  a  week  earlier.
 
 In  November  the  friend  I  had  stayed  with  in  California  informed  me  that  she  had  a  stack  of  mail  for  me  that  she  had  forgotten  about  and  would  send  it  right  away.  When  I  got  this  mail,  I  saw  that  there  were  several  copies  of  an  unpaid  bill  from  the  doctor  in  the  amount  of  $1,500,  and  they  were  threatening  to  send  my  account  to  a  collection  agency.  I  was  shocked  and  horrified.  I  didn’t  have  $1,500,  so  I  couldn’t  pay  it.  I  was  also  heading  into  finals  season  at  school,  so  I  didn’t  have  much  time  to  sit  around  and  think  about  what  to  do  with  this  bill.
  
 A  few  months  later  I  got  a  letter  from  a  collection  agency  saying  that  I  now  owed  them  $1,500.  I  realized  I  couldn’t  ignore  the  bill  any  longer  and  called  my  doctor’s  office.  A  representative  at  the  office  told  me  the  bill  was  for  blood  tests  and  mailed  me  an  itemized  bill,  which  had  never  previously  been  sent  to  me  at  any  address.  She  also  said  that  my  insurance  should  have  paid  for  it  and  that  I  should  ask  them  about  it.  I  called  the  insurance  company  and  they  said  that  my  plan  “doesn’t  include  all  diagnostic  tests.”  So  that  was  that.  I  was  stuck  with  this  $1,500  bill  that  I  never  saw  coming  and  couldn’t pay.
  
 As  a  graduate  student,  100%  of  my  income  was  student  loans.  Financial  aid  very  specifically  only  covers  school  expenses  and  minimal  living  expenses,  including  my  health  insurance  premiums.  However,  there  isn’t  an  “unexpected,  huge,  medical  bills”  line  in  my  financial  aid  award.  No  amount  of  frugal  living  would  have  allowed  me  to  pay  this  bill.  How  else  should  I  have  handled  this  situation?  Would  I  have  been  better  off  just  bleeding  indefinitely? 

Cost Awareness Anecdote: The Cost of Apples

2011-03-21T23:24:00.003-04:00

The following anecdote is by Samuel Yang, a patient from Maryland.

Up until last May, my experience of medical costs was limited to the $100 per month premium I contributed towards my employer-sponsored insurance and the nominal co-pays associated with well-child checkups and generic prescriptions. There was never any hesitation in seeing a doctor or filling a prescription. That all changed when went I back to school.

I blindly signed up for the school-recommended family insurance and naïvely assumed myself, my wife, and my two young children would receive whatever health care we needed at a relatively small co-pay. The upfront premium of $10,000 was high, but I believed that this would cover whatever life threw at us. However, two experiences woke me up from my ignorance: my wife's endoscopy and a visit to the pediatrician.

In July, my wife was sent by her doctor to get an endoscopy to determine the cause of her stomach pain. In the weeks following her procedure, we started receiving statements from our insurance company. The statements declared that we were responsible for the full amount. We received the following explanation from our insurance company, “We don't cover preexisting conditions.” As we argued with the insurance company, the hospital bills started trickling in: $1200 from the outpatient center, $200 from our family physician, $400 for the anesthesiologist and $200 from the lab. We received six bills demanding $2600 for one procedure. As I examined the bills I was shocked by the redundancy—why is the cost for the anesthesiologist not included in the outpatient center bill? Why do I need to pay my family physician twice (the initial visit and the follow-up) for a procedure she ordered us to do? Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system. It seemed as if everyone in that hospital wanted to include something for our visit. After fighting tooth and nail to get our insurance to cover my wife's endoscopy, they finally relented. Still, we were left with $700 to pay. For an unemployed student, $700 is not a small co-pay.

I studied the coverage booklet put out by my insurance, and I still do not understand what is covered and what is not. What I found was something similar to how we were billed for my wife's endoscopy: the procedure itself is covered one way, labs are handled another way, and prescriptions are an entirely different matter. How am I supposed to know what labs or prescriptions are associated with an endoscopy?

Compared to my wife’s endoscopy, my daughter’s first visit to the pediatrician should have been straightforward. A fever that lasted three days followed by a rash was a simple diagnosis for her experienced pediatrician. What is not simple is the billing and insurance struggles we are facing. Our insurance company decided that my daughter's fever was a preexisting condition, and as we fought with them to fulfill their responsibility, the pediatrician's office contacted us that the $115 fee is actually $321. Again, the feeling of being taken advantage of is overwhelming. It could be that our doctor's office is honest in their error, but I have never received services or products charged to me like this. In other words, when I go to the store, I know exactly how much a pound of apples will be long before I get to the cashier—and there are no “preexisting” conditions that add hidden costs at the register.

I've learned a lot about medical cost of care; that is, care costs a lot and it's not straightforward what the cost is. I know that we have paid $11,021 for an endoscopy, a visit to the pediatrician and spotty coverage for the rest of the year. It’s not merely that medical care is expensive, it’s also that I have no estimate of what my costs will be. Getting new brakes on my car is expensive, but the mechanic is very careful to give me an itemized estimate before the repair is made. Recently, my wife, after a particularly exhausting week, started experiencing pain in her chest and a tingling sensation in her arm. Being a nurse, she knew exactly the tests that would be ordered if she went into the hospital.

Despite my attempts, she refused to go to urgent care knowing that the cost of the visit, even if our insurance company cooperated, would be enormous. There's now a hesitation to use our medical resources that was never there before.

Cost-awareness anecdote: Ultimate Sacrifice

2011-03-05T22:01:00.006-05:00

The following anecdote is from Dr. John Maa, Assistant Professor of Surgery at the University of California, San Francisco

An estimated 60% of American bankruptcies result from overwhelming medical costs. My uncle’s tale illuminates the dual tragedy of suffering catastrophic illness and being uninsured.

The 2008 recession claimed my uncle’s job, health benefits, and assets, except for a small inheritance. By 2009 he found work (but not health coverage) as a consultant.

One day he noticed that his eyes were yellow. He emailed a photograph, and I immediately recognized jaundice. I calmed him by suggesting benign causes such as hepatitis, gallstones, or liver cirrhosis. But I secretly dreaded a liver or pancreas cancer, given his recent weight loss and itching.

Laboratory and x‐ray tests, which he charged to his credit card, all suggested cancer. His doctor in New Jersey indicated urgent surgery was necessary. An appointment was unavailable for weeks at the county hospital, and private surgeons wouldn’t see him without a cash deposit. Time was ticking. Cure was already unlikely, and delays were allowing the tumor to grow. He decided to travel to the West Coast to expedite surgery.

My uncle arrived around midnight, glowing yellow; he had worn sunglasses to avoid frightening other airline passengers. He was immediately admitted to undergo a procedure to identify the site of blockage and insert a plastic stent to drain bile externally. While awaiting the outcome, I had a premonition that the worst was yet to come. The doctors brought dreadful news that a massive tumor, too large to remove surgically, lay centrally in the liver. The remote possibility existed of a benign condition masquerading as cancer. The aggressive option was upfront chemotherapy and radiation to shrink the tumor, for possible surgery afterwards. But several surgeons deemed the case hopeless, and estimated my uncle had only 6 months to live. They recommended hospice, and a more comfortable internal metal stent. My family chose not to share these findings with my uncle until he recovered from anesthesia.

The crushing blows continued. Within 36 hours, my uncle lapsed into a coma from kidney failure induced by bile toxins. Knowing the costs, we refused transfer to the ICU. Dialysis was necessary, but the nephrologists regarded the situation futile and refused treatment, comforting us that dying from kidney failure was painless. Miraculously, he rallied. Seeing improvement, the nephrologists started dialysis. We could finally share with my uncle the difficult choices ahead.

He responded “It’s hopeless. Why risk money that could provide my daughters’ education?” He asked to be made “do not resuscitate”, and declined surgery. Two weeks of recuperation made transfer to less expensive skilled nursing care possible, but here I learned it takes money to save money. Ambulance transport was mandatory, costing $1700. As I read the dispatcher my credit card information, I wondered if I could have driven him myself.

In the following days, we tried everything to minimize costs. My uncle had a fever, but refused evaluation in the ER, and was treated with blankets and oral antibiotics. His fever broke, as did the stitches on his stent, which I re‐sutured at the bedside.

In the end, my uncle made the ultimate sacrifice for his daughters by rationing his care. Death came swiftly, only 72 days after he became jaundiced. He never received metal stents, or saw New Jersey again.

His final medical bills totaled over $250,000. Charity care was denied, and MediCal unavailable since he was from out of state. After receiving a 20% discount for paying in a lump sum and in cash, we negotiated a final 40% discount.

The costs of his care can be translated as follows. Each session of dialysis equaled a month of private college tuition. Each day’s blood work would have provided a year of textbooks. The daily hospital room charge would pay for a half‐year in the dormitory. The anesthesia fee would have purchased a full year’s meal plan.

My uncle’s cause of death remains unknown. Weeks into treatment, his tumor markers came back normal. Surgery might have been curative, or confirmed a hopeless situation. The cost to know with certainty would have consumed his inheritance. The World Health Organization recognizes this universal tragedy worldwide: “The poor are treated with less respect and given less choice of providers. In trying to buy health from their own pockets, they pay and become poorer.”

Whenever someone faults the medical system for the epidemic of bankruptcies, I ask instead: My uncle was 59, and for decades had contributed to the system by paying health insurance premiums while employed. Did the system treat him fairly when he needed care?

Cost-awareness anecdote: Getting an estimate

2011-02-13T21:16:00.005-05:00

The following story is from Monte Jaffe, an accountant and patient from Massachusetts.

A couple of years ago my primary care physician suggested that I have a colonoscopy at the age of 47. My father died from Hodgkin’s disease at 34 and my mom survived breast cancer in her 40’s. I suffer from irritable bowel syndrome so she suggested that I have my colon checked out just in case. She recommended a very experienced gastroenterologist at a major Boston hospital.

My insurance would not cover the procedure because I am younger than 50, so I called the hospital to investigate how much it would cost me to have the procedure. Their first answer was that they did not know because no one had ever called in with that question before. This is a hospital which probably does more than one thousand of these every year.

I was transferred to someone else who was more helpful. She said it would depend quite a bit on what they discovered while I was undergoing the colonoscopy, but gave me a range of $2,000 to $4,500. I asked if there would be other charges and she said that the physician screening could cost $770 or more.

I asked if there were other charges. She then mentioned that there would be a fee for an anesthesiologist, but they didn’t know how much that would be. I asked whether I should call that office, but they said that they use several different anesthesiologists and there is no way in advance for them to know which one will be there for the procedure. Finally, they mentioned that there may be several other charges as well. I asked for something in writing about the various charges, but she said they did not have anything like that.

That’s the point where I gave up. We were already potentially over $5,000 and it was going to take some time to figure out an estimate for the anesthesiologist. Also, I had no confidence that we had gotten to the bottom of all of the potential charges. I was not going to get an estimate before agreeing to do this procedure.

I liken this experience to hiring a general contractor for a recent major home improvement. I received three estimates from three different general contractors which included all of the costs including the electrician, masonry, disposal, painting, etc. Sometimes there are unexpected costs with construction, and sometimes there are unexpected costs with colonoscopies. However, the inability of our medical system to even identify all of the costs, or to even appreciate that this is an important element to making the decision, was emblematic to me of a much deeper problem.

I will celebrate my 50^th birthday in less than 2 months and will let the insurance company sort this all out while I focus on the procedure.

Cost-awareness anecdote: Cruel Shoes

2011-02-08T18:55:00.007-05:00

The following story is from Dr. John Henning Schumann, a primary care doctor at the University of Chicago. He blogs @ http://glasshospital.com

A thirtysomething friend of mine, let's call her Sally, started running last year in an effort to get in better shape.

As often happens in these scenarios, Sally developed some foot pain. So she went to a "foot" doctor (I'm not sure whether she meant a podiatrist or an orthopedic surgeon specializing in feet).

Reasonably enough, the doctor ordered an x-ray of her foot. The official reading showed no fracture, but there was a "questionable" finding on the edge of one of the midfoot bones such that the doctor couldn't rule out some more insidious process. A stress fracture, perhaps? Those can be awful, and take a long time to heal.

So, again in reasonable fashion, the doctor ordered a CT scan of Sally's foot. This is the logical next step if a plain old x-ray is abnormal. Heck, a lot of the time, even when an x-ray is normal, we still order the CT scan looking for something that we can't see on the x-ray.

And though I said this was a reasonable choice, if you really think about it, was it so reasonable?

I mean, did Sally really need a $1000 test to see what was causing her foot pain? If you're Sally, you sure might think so. You want to know what the heck's wrong. You want to know why you're having pain when you run. You want to keep running. After all, as a primary care doctor, I LOVE it when a patient tells me that they're serious about exercise. Aside from not smoking, that's the best thing I can hear from a patient.

But Sally hadn't traumatized her foot. She hadn't dropped a bowling ball on it. She probably had an overuse syndrome. A repetitive stress injury. A running "tweak."

The x-ray showed that, for heaven's sake. We knew there was no broken bone. No smoking gun. [I told you, we hate smoking.]

So a week after sitting for the CT, Sally still didn't know the result of her scan. She called the doctor's office to no avail. She was put off by the staff, even told by a nurse she'd have to come in for an appointment to discuss the results with the doctor.

By this point, she's worried. "Is there something terrible that he's waiting to tell me?" she wondered. "Do I have foot cancer?"

Sally adjusts her schedule, dutifully shows up for the appointment, to hear the doctor tell her that her CT is normal. Did she really have to wait a week and have an office visit to find this out? That is one shoddy patient experience in my book.

Nevertheless, she reasonably asks the foot doctor what she should do about her pain.

Physical therapy? Low impact exercise (use an elliptical trainer, perhaps, or bicycling)?

She doesn't get much of a concrete answer.

She decides to buy some new shoes.

She goes to a local shoe store that caters to runners. Let's call it Fast Feet.

There, they measure her feet. No charge. Lo and behold, her feet have grown a whole size.

Sally was running with shoes that were too small! That was the source of her pain. No CT was needed. In fact, probably even an x-ray was unnecessary. And the $300 orthotics that she' been prescribed.

Now, this story shows how when a patient comes to see a doctor, we often go right to diagnostics. We want to get you an answer, after all. We're not shoe salesmen, for heaven's sake. We don't even have those thingie-dingies that measure feet. [Do foot doctors?]

Next time someone comes in complaining of foot pain, I'm going to ask them when they last had their feet measured.

Cost-awareness anecdote: A Medical Student's Dilemma

2011-01-30T16:56:00.003-05:00

The following story is from Libertad Flores, a first year medical student at the Alpert Medical School of Brown University

I remember joking with Dad about how he'd outlive us all. He had gone vegetarian 10 years before I was born, never smoked, took vitamins, and asked for a designated driver after his annual Heineken at the neighbor's Christmas shin-dig. He flossed, wore a seat belt, and looked forward to annual physicals. If I tried leaving our Michigan house in the winter with more than 3 inches of skin exposed, he would follow me to the door yelling “It's no fun being sick!” We were always working class, but both my parents had union jobs with solid benefits and therefore we were covered by two health plans. Despite our attempts at persuasion, he refused to drop his coverage–the Rolls Royce of health plans, as we dubbed it–in favor of my mother's plan. “I don't want to worry about bills” he said, and only dug his heels in after retiring.

Nevertheless, on his 64th birthday my father had an endoscopy, after which the physician looked stricken. Later I saw images of the adenocarcinoma that spread like a hand around the top of his stomach and into his liver. He was supposed to have 3 months without treatment, but things were looking up after a few rounds of chemotherapy. He was tolerating the treatment well, and the spots on his liver shrank. Thank God he stuck to his guns about the insurance, I thought. It was one less thing to worry about.

Just after Christmas, my father caught a minor infection but was hospitalized for a week. Listening outside the curtain in the emergency room as he had a Foley inserted was a low point, but I did not know then about the insults left to come. He pulled through, but decided to stop chemotherapy the following month. Around March, Mom mentioned that collections notices had started coming to the house, and that dad had tried to hide them. I wanted to help, but she had no idea what the bills were for, and couldn't understand how there could be a bill when we had two good health plans. Mostly what I gleaned was that she was scared. She was trying to get him to his appointments on time, make sure he took his medications, feed him and generally cheer him on. I remember ending these calls with a pit in my stomach about where this could lead, but we had to prioritize. One crisis at a time, my mother would say.

The woman unflinchingly emptied buckets, changed diapers and slept in a folding chair next to my father toward the end, but she was not built for the business aspects of illness. So in the week following Dad's death I called the insurances, the hospital, and the collectors to let straighten out the mess. Despite having wading through those bills, I still could not say what his treatments cost. As to what they were worth, there are still no words.

I used to wonder what went wrong, or what I would advise others to do to avoid this kind of stress, short of never getting sick. I have only gratitude for the doctors with regard to his treatment, and for the manufacturers of the treatments that extended his life. But how exactly do you put a price on these that still give allows patients access? Quality costs, and I do not envy the people charged with that task. Should health care providers routinely ask patients about their financial concerns as it relates to care? In our case, when I think of my sick father hiding away bills, I don't think it would have hurt. I am left with hope, but no answers for the millions without coverage. What should they do? When I am a physician, what can I do?

Cost-awareness anecdote: a $1000 coding error

2011-01-23T18:46:00.006-05:00

The following story is from Michaela Dinan, a PhD student in health policy and management at the University of North Carolina

As a graduate student in the health field I often get phone calls from various family members and friends asking what I happen to know about different drugs, procedures, and devices. I was having one such conversation with my younger sister last spring. She had just completed her undergraduate education, started a new job, and was very proudly financially self-sufficient for the first time.

We were talking about birth control. Her yearly exam was coming up and she was considering the therapeutic and cost efficacy of different forms of contraceptive. I had recently attended a class where the intrauterine device had been discussed as a cheap, effective form of contraceptive that is underutilized in the United States. A few strokes of the keyboard and my sister and I were able to find that with no insurance, the hormonal IUD costs $843.60. We quickly calculated that at 20 bucks a month for the pill, after 5 years, the IUD would end up being significantly cheaper - even before taking her insurance in to account.

A few weeks later my sister excitedly told me that she had discussed the IUD with her doctor who had informed her that it would only cost around $200 with her type of insurance. She had already scheduled her appointment to have it placed.

While the procedure itself went off without a hitch, the next phone call I received was of a decidedly different tone. She had just received her bill in the mail – a bill for $1100!

“How is it possible that it cost so much more than they said it would?”

“I don’t know!"

“Did you call the insurance company?”

“Yes. They covered some of it, but the $1100 left is for me to pay.”

My sister was frantic. As a new graduate just entering the workforce, she was living pay check to pay check. There was no way she could come up with an extra $900 at the drop of a hat.
But something didn’t add up. How could this device and the procedure cost so much more than all the information had said it would? “Let me talk to them for you,” I said.

After weeks of unreturned phone calls and department transfers, I was finally able to secure a billing inquiry. The inquiry itself took months. By the end of the process my sister was fending off collection calls from the hospital trying to explain that we were disputing the charge. In the end it all came down to a coding error on the part of the physician. The visit had been erroneously coded as an inpatient procedure. The amount of the correct bill? One hundred and fifty dollars.

While it would be easy to chalk this up as a happy ending, I think the moral here is a bit different. My sister did everything right. She researched the procedure on her own, discussed it with her doctor, and called her insurance company when the bill was different than she expected. I am not sure many of us could claim to be that involved in our own healthcare and yet had circumstances been even slightly different, she would have ended up paying $900 more than she was supposed to.

I, like most Americans, didn’t even know what medical coding was or how it worked until I started working in the field. Yet when I go to the grocery store, or buy plane tickets online, I know exactly how much it is going to cost me before the sale is final. It seems to me that if providers, patients, and payers all had access to the same cost information up front, it would drastically improve communication, reduce the potential to overlook errors, and better allow patients to play a more decisive role in their own health care.

Cost-awareness Anecdote: Not Colon Cancer

2011-01-17T11:52:00.005-05:00

The following story is from Dr. Davis Liu, a primary care doctor from California and author of "Stay Healthy, Live Longer, Spend Wisely: Making Intelligent Choices in America's Healthcare System"

My mother's oncologist ordered the blood test, carcinoembryonic antigen (CEA), to check for the recurrence of colon cancer. The good news was that there was no evidence of recurrence. The bad news was that she didn’t have colon cancer.

She had breast cancer.

Though she was feeling better, the chemotherapy and radiation had taken its toll. For the past couple of months, she had experienced constant nausea and vomiting. During and after treatment, her hands and feet felt like they were on fire. Many times she wanted to give up and quit. Yet she persevered and felt emotionally stronger after the ordeal. She started to feel like herself again. Life began to have some normalcy. Until an insurance bill appeared asking for hundreds of dollars.

Apparently over the past year, her oncologist had routinely ordered the CEA test multiple times as part of her cancer follow-up. When she called to contest the charge, the insurer told her to talk to her doctor. She didn’t know this test was unnecessary until the bill. And until she called me, her son, a primary care doctor.

She asked her oncologist about the repeated blood tests. He simply shrugged. No apologies. No explanation. No acknowledgement of the error. Didn’t he get the lab results of the CEA? Shouldn’t he have been aware that the test was not relevant for her care?

It didn’t matter. In the end, she paid the hundreds of dollars. There was no other choice.
Perhaps the oncologist’s response should not have been surprising. His office was set up so that patients always met with the phlebotomist first for blood work before ever seeing their doctor. As a result, he might never know that a colon cancer test had been repeatedly ordered for a breast cancer patient. His error now would be completely borne financially by the patient. There would be no recourse or appeal.

But perhaps he was an outlier in her treatment of breast cancer.

Although she regularly saw her oncologist, my mother also trusted her surgeon for her cancer care. When she was first diagnosed with breast cancer, a young and enthusiastic solo practitioner successfully performed her lumpectomy. Moreover, her surgeon continued to see her for routine post-operative check-ups and additional follow-ups every few months for the next several years. Her oncologist did exactly the same thing.

Listening to her doctors’ advice, my mother took time out of her day, paid the increasingly expensive co-pays, and went to the oncologist and the surgeon. Her life was busy enough running a home business in addition to her part-time job. She wondered if it was necessary to go to both doctors.

My wife wondered exactly the same thing. As an oncologist, her experience has been that surgeons are happy to hand off patients when the surgery and post-operative care are completed. She could not think of a compelling medical reason why the surgeon would also need to see my mother on a regular basis. In general, oncologists oversee the chemotherapy, radiation treatment, and hormonal therapy for breast cancer, not surgeons.

Despite our concerns, my mother continued to see her surgeon for many more months. She felt guilty when the surgeon’s office kept calling her when she missed follow-up appointments.
She finally stopping going after the surgeon seemed too busy to see her. The few minutes she spent with the surgeon was no longer worth the drive, time off work, or cost of care.
Frankly, I never believed my mother received any medical benefits from these additional visits. She just received an extra bill to pay.

As the only doctor in my family, I viewed my mother’s experience with increasing concern. During her breast cancer treatment, my ill mother had only one focus – getting better.
Like the vast majority of patients, she trusted that her doctors would make the right choices both medically and now increasingly financially. She did not want to be the expert on determining which blood tests were appropriate or the number of post-operative follow-up appointments needed for her cancer treatment. Yet it is apparent that this is the new role patients are asked to play.

It is simply wrong to ask them to do our job. As doctors we are the experts on determining the value of treatments and interventions truly worth our patients’ time and money. Our training and social responsibility must reflect that we are not only healers but also thoughtful stewards of our patients’ financial resources. It’s a new mindset we must accept.

Essay Contest Winners Announced!

2010-12-17T08:43:00.007-05:00

On behalf of the Costs of Care team, Governor Michael Dukakis, Dr. Tim Johnson, Secretary Michael Leavitt, Dr. Atul Gawande, and Dean Jeffrey Flier, we are excited to announce the $1000 prize winners of the 2010 Costs of Care contest.

Tarcia Edmunds-Jehu, a nurse midwife from Boston, MA, beautifully captures how the current health system leaves some patients struggling desperately to pay bills - and providers feeling terrible that their well-meaning care is to blame.

Brad Wright, a graduate student from Durham, NC, articulately describes his experience as a savvy patient who did everything possible to avoid expensive and unnecessary care, but got saddled with a large bill anyway.

All of the finalist submissions have been published, including the stories of hardworking, responsible Americans falling through the cracks, getting a $11,000 bill for indigestion, a $10,000 bill for pre-approved surgery, a $1000 bill for birth control.

And the stories don't stop there. Starting January 1st, we will post a new incredible story here every week. Our hope is to shine a national spotlight on the lack of price transparency in our health care system, and illustrate importance of cost-awareness in medical decision-making.

Happy holidays and see you in the new year!

Cost-awareness anecdote: Between the Cracks (contest finalist)

2010-12-14T02:02:00.002-05:00

The following story is from Kelly Cheramy, the wife of a man with a chronic illness from McFarland, WI

Between the cracks is a frightening place to be.

During the course of trying to improve our family’s financial stability, my husband and I were blind-sided by one hidden detail: We’d face $10,000 in costs to continue my husband’s serious medical treatment because we found ourselves unexpectedly without coverage for 30 days.

This was money we simply did not have. We had been prepared to foot the full bill for good health insurance, but that wasn’t even an option, thanks to the circumstances of our career transitions and my husband’s health.

I was leaving my job of 10 years to begin a satisfying new position that came with excellent health care coverage. It was a beneficial move that would offset my husband’s impending loss of insurance as his employer downsized and prepared to go out of business. We knew the end result, but we didn’t know the timing. It just so happened that his coverage ended the same month that I began my new job, leaving a gap of one month before my new coverage would begin.

With this routine employment-benefits formality before us, we knew we’d have to purchase coverage. We had hoped to buy a Cadillac COBRA plan, given the circumstances that require very expensive care. But we learned that an out-of-business employer is not obligated to offer COBRA, and our plan to continue the same level of coverage at our expense was not available.

I then checked with my previous employer, whom I had left just two weeks earlier, to weigh my options. I had none, because, at the time of my resignation, I hadn’t been enrolled in that employer’s plan. At my new job, I had already initiated my flex plan withholding so I was too late to set aside pre-tax dollars to help ease the burden.

Because of my husband’s serious pre-existing condition, we were almost certain we wouldn’t qualify for insurance anywhere, and if we did, the price would likely be out of this world. With billing statements in hand, we began to panic about the outrageous price of care and the irony of trying to improve our lives through better jobs—a situation that led to our falling through a nearly invisible crack in the health care system.

The decisions before us were scary: suspend treatment for one month, potentially jeopardizing my husband’s health and setting us back even further in the long run, or find a way to pay $10,000 for his medications, hormone injections, lab work and doctor visits. We chose the latter.

Luckily, our doctor knew of some possibilities that might help. One was to enroll in a medical study that would cover all expenses as part of the research. Unfortunately, an additional health condition made my husband ineligible to participate. The doctor also told us about our insurance company’s conversion plan, which guarantees coverage (albeit less of it, with no drug benefit). The company charges a higher premium in exchange for the forfeiture of underwriting. Though the coverage was greatly reduced, we decided to purchase this nominal safety net for my husband while I took the chance on my own health by not buying coverage for that one month. (As luck would have it, I then contracted pneumonia. A purposeful delay in diagnosis and treatment happened just as I was beginning my employer-provided coverage.)

Finally, the doctor knew of a pharmaceutical company’s program that provides free medication to those who cannot afford the treatment. We applied, slogged through the red tape, waited with wringing hands, and received word that we were accepted. That was a godsend. Today, my husband’s health is nearly perfect and we are back on track to providing everything our family needs, including health care coverage.

When we slipped through the cracks in the health care system, we were emotionally taxed at a time when we could scarcely handle any more stress in our lives. Of course, we’re grateful for the excellent care and the help we had to patch together a plan of action we could afford, but we were taken by complete surprise when we viewed the costs from deep inside the crack.

Cost-awareness anecdote: Sticker Shock (contest finalist)

2010-12-11T16:09:00.005-05:00

The following story is from Dr. Grayson Wheatley, a cardiovascular surgeon from Phoenix, AZ

It was supposed to be a routine office visit for my patient. Unexpectedly, it turned into a real-world health economics lesson for me, the treating physician. The old adage “listen to your patients; they will always give you the answer” became exceedingly true in this case, even when it dealt with an issue beyond a medical diagnosis, such as lack of transparency regarding insurance coverage for medical procedures.

My patient had recently undergone an interventional procedure to treat severe peripheral vascular disease in order to improve his leg circulation. Usually, patients like him don’t seek treatment for vascular insufficiency until the discomfort associated with activity, or claudication, is severe enough to interfere with their regular rounds of golf. That is the real motivator for these patients. The procedure was a success and a few days following the procedure he was back to his normal activities and was pleased that his leg no longer bothered him as he motored around the golf course.

My patient calmly waited until after I checked his pulses, reviewed his medications and gave him a plan for follow-up before he expressed his real concern, and it certainly wasn’t about whether he could now get an extra 20 yards on his tee shot as a result of the new strength in his leg. Despite my office obtaining all the necessary private insurance pre-authorizations for the interventional procedure, he still had received a bill for approximately $10,000 related to out-of-network charges. I was baffled and my patient was disgruntled about this mix-up. After reviewing with him in the examination room the numerous sheets of paper he had received from his insurance company, it became clear what had happened.

A magical alignment of stars needs to occur for an elective procedure to be pre-approved. Emergency services are covered through a separate and more straightforward mechanism. First, the provider, or surgeon in this case, needs to be within the patient’s insurance network. Appropriate professional credentialing and outcome data are submitted to the insurance company, and if acceptable, the provider can participate in the company’s insurance plan. This tedious process needs to be repeated for every insurance plan in which the physician wants to participate. Second, appropriate medical record documentation needs to be submitted to the insurance company demonstrating medical necessity for the procedure. Third, the intended hospital where the procedure is being performed needs to be in-network, which is completely independent of the provider’s status.

Pre-authorizations in this patient’s case were obtained for both the surgeon’s fee and hospital charges. The particular anesthesiologist utilized for this patient’s procedure – a member of the medical team for which insurance companies don’t require pre-authorization – was out-of-network. It is not customary to obtain pre-authorization for anesthesiologists since almost always the anesthesiologist is in the same network as the physician and hospital. We assume, incorrectly, that if an anesthesiologist is working in an in-network hospital and with an in-network surgeon, that they also have in-network status.

The challenge in this process is the lack of transparency surrounding patient choice regarding anesthesiologist assignment, which is often made by the operating room staff moments before the procedure. Despite the anesthesiologist meeting the patient in the holding area before the procedure, no one informed the patient about his upcoming out-of-network charge related to anesthesia services or gave the patient an option to choose another anesthesiologist who was within his insurance’s network.

Fortunately, the out-of-network anesthesiologist worked with my patient to drastically reduce the cost of his services and they agreed upon a much more reasonable charge and associated payment plan. Subsequently, my office has modified the process to ensure that the anesthesiologist assigned to a patient’s procedure is pre-authorized.

This patient’s case was an eye-opening experience for me and helped me better understand the complex maze of healthcare reimbursement. It also enabled me to see things more clearly from my patient’s perspective. I am thankful that this patient took the time to speak-up and share his financial situation with me. How many other patients have I operated on were put in this situation and suffered financially in silence? I have always prided myself on making sure my patients have a thorough understanding of their disease and upcoming procedure. Now, I take the time to make sure they also have a clear understanding of the reimbursement process. As a physician, it is not enough to relieve the physical pain of a medical problem, it is also our responsibility to help patients avoid preventable financial jeopardy.

Cost-awareness anecdote: $978 American Dollars (contest finalist)

2010-12-05T21:18:00.005-05:00

The following story is from Jessa Hartford, a social worker and substitute teacher from Sacramento, CA

On 4/29/10 I received a Mirena IUD. I thought about this a lot; I read forums and articles on the device and its side-effects. I decided that because I already have a beautiful son who is 2 years old with my wonderful boyfriend of 7 years and we do not need any more children at this point in our lives, that it would be a good idea. You see, we both have been unemployed for a little over a year now. And while on Unemployment we made too much to receive Medi-Cal for any members of our family. So, while on Unemployment I was paying about $300/month out-of-pocket in premiums for medical insurance for my son and myself. (My boyfriend thinks his body can heal itself.) Anyway, after paying $75 for the visit and only being in the appointment for about 30 minutes, and another $75 for a mandated follow-up appointment, I received a bill on 8/18/10 for $978. (That is 978 American dollars, just to clarify.)

As I stated, while I got this device I was paying out-of-pocket for my insurance premiums because I could not be approved for Medi-Cal. A couple months after getting the IUD both of our Unemployment checks stopped coming. We had no income. Zero dollars a month coming into our home. So I instantly went down to the DHA and applied for pretty much anything I could. I started receiving Medi-Cal for all 3 of us. (This was all before I got the bill, or knew how much it was going to be.) When I went to Kaiser’s Customer Relations Department they informed me that Medi-Cal would take care of whatever cost the IUD would be, but now that I have gotten this bill and spoken to them again, they are saying that they were mistaken when they told me that because I was not receiving Medi-Cal during the time I got the IUD.

After receiving the bill I decided I would just return it for a full-refund. Apparently there is a no-refund policy for IUD’s, but they did not state this at any point during the appointment or have any postings on the walls. I even asked if I could possibly return the IUD for some sort of hospital-credit or gift card maybe for a surgery later in life, but they would just not work with me.

In all seriousness, I do not know how I am going to pay for this bill. My boyfriend and I are now getting Unemployment checks again, which you would think would be a good thing. But, this means that when we have to report how much money we got in the last quarter, in the next week or so, I am fairly certain that our Medi-Cal will be discontinued, since we will again be making too much. That means that I will be stuck once again, with out-of-pocket monthly medical insurance premiums, on top of this $978 bill.

I appreciate any help in this matter, even if it’s just information about how I can get help paying for this. I am trying to find work substitute teaching, and am really just trying to make it work for my family. We thought we were being responsible adults and citizens by looking at our place in life and deciding that adding another number to our household would not be good idea, but this is the cost (quite literally) of making that decision. You would think the government would want to help keep the Unemployed from pro-creating – I’m just saying.

Cost-awareness anecdote: Three Ultrasounds (contest finalist)

2010-12-02T20:22:00.003-05:00

The following story is from Tarcia Edmunds-Jehu, a nurse-midwife from Boston, MA

Sitting in an exam room I am watching my patient struggling to ask a difficult question that she clearly does not want to ask. After several attempts at starting and a few half finished sentences she finally manages to mumble a request for help with obtaining food for herself and her two daughters. She is a 41-year-old woman, 32 weeks pregnant with her third child, and working a full time job as a CNA in a local nursing home. Her husband is also working full time as a janitor. At her initial visit she denied any issues obtaining food for herself and her family, and declined any referral to social services.

“Has the work situation changed for you or your husband?” No. “Have you always had difficulty getting food and did not want to ask?” No. “Is there some reason you need more food than you needed before?” No.

“Is there some new expense that is taking money that you used to be spending on food?”
Tears begin to flow and she starts to talk. She tells me that she had been in this country for 5 years and never had public assistance of any kind. She talks about her long hours working 2 and sometimes 3 jobs in order to have enough money to keep her family afloat. She talks about putting herself through school to become a CNA while still working to pay her bills. Until last year she was doing this alone, making not only money to provide for her family, but also the money needed to bring her husband here. She had never asked for help or let her children go without. But now she is unable to pay her bills and buy food. What is the tipping point for her ability to provide for her family?

Three ultrasound bills from this pregnancy.

She is 41 and had opted for an early screening test at 12 weeks that combines ultrasound and blood tests to give an estimated risk for Down Syndrome. She made this decision after a visit with a genetic counselor and had the test despite the fact that the results would have no effect on the outcome of her pregnancy.

At 18 weeks she had a fetal survey ultrasound that patients have routinely to check the anatomy of the baby and rule out anomalies.

At 30 weeks she had an ultrasound to check the growth of her baby because she was over age 40. This is following hospital protocol; despite the fact that there was no clinical indication her baby was anything but well grown.

This patient had private insurance through her job. Very few of my patients have private insurance, and at that time I worried less about a patient with a full time job who had private insurance meeting her needs than I did about a patient on welfare with state insurance. It didn't occur to me to ask a patient if her medical bills were paid in full, or if she was responsible for paying a percentage or had a deductible.

The patient had insurance that would pay 80% of procedures, including ultrasound. Her insurance had deemed her 18-week fetal survey as necessary and were paying 80%, the other 2 ultrasounds were not considered necessary. She had a bill for close to $1400 that she had been paying off weekly for three months.

It could just have easily ended up that I would never have known about these bills, and in fact that may have been the case in the past with other patients.

We almost never think about what a test costs or whether it is paid for. Trying to find out the cost of a test is sometimes almost impossible. We almost never stop to think if a test is really indicated, or if the results will change the course of their treatment.

As providers we order tests because they are there, or because it’s easy, or because everyone gets them, or because we are scared if we don’t we’ll be sued, or because of arbitrary protocols. Sometimes we order tests because it’s the best thing for a patient.

No one orders tests thinking we might be taking food out of the mouths of our patients and their families, but sometimes that is exactly what we are doing.

Cost-awareness anecdote: Blood Test Surprise (contest finalist)

2010-11-30T19:34:00.007-05:00

The following anecdote is from Brad Wright, a graduate student from Durham, NC

In the spring of 2005, the sinus infection returned. I awoke severely congested with a pounding forehead and pain around my eyes that grew worse when I bent to tie my shoes. The feeling was familiar. Two years earlier, I had similar symptoms, but was uninsured and endured a miserable week with nothing but over-the-counter medication. Now they were back.

Fortunately, when I started graduate school, my father insisted that I have health insurance. As a healthy 24 year old, I didn’t see the need, but he agreed to foot the bill for a high-deductible insurance policy to cover me in the event of catastrophic illness. Except for four physician office visits subject only to a $35 co-payment, my policy offered no benefits until I spent $3,000 out of my own pocket. With my sinuses throbbing, I knew I needed to use one of those visits. Overwhelmed by the list of “in-network” providers on the insurer’s website, I picked an internist based on convenience—his practice was located in a medical complex near my home.

Arriving for my appointment, I checked in and presented my insurance card to the receptionist. “Your visit today will be $35,” said the woman behind the desk. I was relieved to hear that my coverage was working as promised. A nurse ushered me to an exam room, where the physician promptly entered, half-heartedly listened to my complaint, and confidently asserted that I did not have a sinus infection because I had no fever. I wanted to say “Really? Mind handing me a tissue so that I can show you what’s been coming out of my head?” but resisted the urge. Instead, I clarified that fever or no, I didn’t feel well, and believed my sinuses were the culprit. At this, the internist lost patience. He ordered some lab work and a sinus CT scan to rule out infection, and said that I could have everything done downstairs.

Despite my $35 office visit, I knew my insurance wouldn’t cover anything else until I met my deductible, so I needed to find out the cost of the CT scan. Doing so was much more difficult than I expected. Admissions didn’t know the cost, so they called the imaging department. Imaging had no idea, and threw it back to admissions where, after much searching, a big black binder full of prices was located in a cabinet, alongside packets of coffee creamer, some paper clips, and a couple of dried up ink pens. The sinus CT would cost roughly $900, which I could not afford. I headed instead to the lab to get my blood drawn, not knowing that I was about to make a costly mistake.

I worked as a phlebotomist during college, so I knew that lab tests were expensive, but that most insurers negotiated discounted rates that were only a fraction of the sticker price. Besides, the lab work was routine—a comprehensive metabolic panel and complete blood count—so I didn’t think to ask how much it would cost. My mistake was assuming that the lab was in-network, because the in-network internist I had just seen worked in the same building and referred me to the lab.

A month later, the bad news came in the mail. The lab was out-of-network, and I owed $478. While this wasn’t the five-figure medical bill many families face, everything is relative. For me, a graduate student living almost entirely on borrowed money, the bill changed how I bought groceries, socialized with friends, and commuted to school. For six months, I fought to scrape together enough money to make monthly payments. The experience, while costly, taught me a lot about our fragmented health care system, how little patients or providers know about the real cost of health care, and how hard it is for patients to make price-based decisions when the system isn’t designed with that in mind.

I had learned my lesson. Later, when a dermatologist put me on medication requiring monthly blood tests, I took out the yellow pages, looked up laboratories, and dialed the phone. “I’m uninsured,” I said (not far from the truth given my coverage) “and I need to have a lipid panel and a liver function test. How much will this cost?” Some labs knew, and some labs didn’t, and the answers varied widely. Needless to say, I chose the least expensive option. Making the decision was easy, getting the information on which to base the decision was—and is—the real challenge.

Cost-awareness anecdote: From Pain to Poverty (contest finalist)

2010-11-28T17:07:00.009-05:00

The following anecdote is from Dr. Steve Sanders (Twitter: @spsanders), a primary care doctor from Tulsa, OK.

“What am I going to do now Doc?” asked Mike, a down on his luck, 29 year–old recently unemployed truck driver, as he handed me his hospital bill.

Mike was seen at our local emergency department on a Friday evening with complaints of indigestion. Earlier that day he and his wife Susan celebrated their second anniversary by splitting a store bought pepperoni pizza. Mike had just lost his job and his wife, already working two jobs, managed to keep them afloat. When Mike later complained of indigestion, Susan became alarmed. She had just read about the symptoms of heart disease in the local paper. Mike wanted to get some antacids but Susan demanded he go to the hospital. Mike stated he initially protested, but when it came to his health he looked to his wife for advice.

He said he wanted her to drive him to the hospital and told me his wife wouldn’t hear of it. “We’re going to call 911, she told him. “You could die on the way to the hospital.” Now, Mike admitted, that made him scared and he quickly agreed. Fifteen minutes later he was on a gurney rolling through the double doors of the emergency department.

Physical assessment by the emergency resident physician came quickly followed by an EKG, chest x-ray, CT scan of the chest (“they said I might have had a blood clot”), and lab, specifically including cardiac enzymes. Mike said his only complaint was it took over five hours before he heard any news.

“Everything looks good,” said the resident. “Let me run all this past my attending and see if we can get you home.” Mike said by then his pain had been gone for hours and he relaxed by receiving the good news. When the resident returned, however, Mike said he knew something was wrong.

“Sorry Mike, but my attending thinks you need to stay for a chest pain evaluation, “ stated the resident with no hint of emotion. “Your first cardiac enzyme was normal, but he thinks you need another evaluation in six hours followed by a stress test, “ he continued.

Mike said he tried to protest. “But everything was normal? Can’t I just see my primary physician later,” he quizzed the resident. He said the resident looked down at his chart seemingly trying to choose his words and said, “Can’t be too careful with chest pain.” With that, the resident physician disappeared, followed by the nurse who quickly added insult to his non-injury.

“We don’t do stress tests on the weekends,” she explained. “The Hospitalist will need to keep you until Monday at the earliest.” Mike said upon hearing this news he protested, again wanting to just go home.

“Then you’ll have to sign out AMA (against medical advice). We can’t be responsible if you go home and have a heart attack and die,” she quickly added.

Mike said by then he was too tired to protest. The thought of dying at home also had him upset. He stated when he told his story to the Hospitalist, she just shook her head and laughed. “They just don’t want to get sued,” she explained. “We get these normal cases all the time. We try to tell them this can be handled on an outpatient basis, but what can we do?” She laughed again, which Mike took as a good sign he was really okay.

He left the hospital the following Tuesday—the heart scan machine was broken on Monday—with a clean bill of health and a diagnosis of “gastric reflux,” which I explained was the indigestion he first described.

I looked at his hospital bill. Charges for everything from the ambulance ride to the emergency department evaluation and eventual hospitalization with cardiac stress tests came to just under $11,000. This number was circled at the bottom of the bill with several question marks in red ink written to the side by Mike’s wife.

“We don’t have any money,” Mike explained. “Susan’s insurance won’t cover it, since we forgot to put me on her policy when I lost my job,” he continued. “We’re gonna have to file bankruptcy Doc. I don’t know what else we can do.”

What would have been a 15–minute office visit providing reassurance and education to a patient we knew quite well became a 72–hour ordeal by a health system treating a disease and not the patient, trading a patient’s pain for financial poverty. Surely we can do better.

Essay Contest Finalists Announced!

2010-11-23T20:00:00.023-05:00

On Labor Day we asked doctors and patients to send us anecdotes that illustrate the importance of cost-awareness in medicine. What was in it for them? A chance to shine a national spotlight on a big problem: doctors and patients have to make decisions in a vacuum, without any information on how those decisions impact what patients pay for care. Also in it for them was a chance to win one of two $1000 prizes.

The launch of the contest was covered in newspapers, radio, TV and dozens of blogs.

Two months later we received 115 submissions from all over the country - New York to California, Texas to North Dakota, Alaska to Oklahoma. According to essay contest judge Dr. Atul Gawande, a surgeon and staff writer at the New Yorker, "These [stories] are powerful just for the sheer volume of unrecognized misery alone."

There were many outstanding submissions, which we ultimately narrowed down to six finalists - three clinicians and three patients.

Clinicians
Dr. Steven Sanders: a primary care doctor from Tulsa, Oklahoma
CNM Tarcia Edmunds-Jehu: a nurse midwife from Boston, Massachusetts
Dr. Grayson Wheatley: a cardiovascular surgeon from Phoenix, Arizona

Patients
Jessa Hartford: an unemployed mother from Sacramento, California
Brad Wright: a graduate student from Durham, North Carolina
Kelly Cheramy: the wife of a man with a chronic illness from McFarland, Wisconsin
________________________________________________________

Leading up to the $1000 prize winner announcement on December 15, we will publish each of their stories separately for you to read on our blog. Starting after January 1st, we will also publish 52 of the additional outstanding stories we received - there will be a new story here every week until 2012.

In the mean time, on behalf of the Costs of Care team, I would like to thank everyone who sent us their stories, our esteemed judges, and our contest sponsors. Stay tuned!

(Image courtesy of Dr. S. Ifran Ali, a physician from Tampa, FL who submitted a photograph of his daughter with his entry to our contest)

With or without GPOs?

2010-10-29T13:24:00.002-04:00

Misaligned interests – they happen far more often than we think. At the core of the 2008 financial crisis for instance were rating agencies being compensated by the very firms whose securities they assessed that lead to unreliable ratings leading bankers and investors astray. The Enron mess – ring a bell? Did we not learn anything for that? In the healthcare space – we see this happen too. Robert Litan and Hal Singer write a great article in HBR drawing our attention to broken compensation structures that result in higher cost outcomes for healthcare consumers. I don't mean the dysfunctional fee-for-service payment model for doctors.

What am I trying to get at? GPOs. GPOs or group purchasing organizations are organization whose role is to serve their member hospitals money by relieving them of some of the transaction costs associated with procuring medical supplies on their own. Without a doubt, they play a very critical role in cost containment by leveraging buying power in the market. If hospitals were to independently contract for medical supplies they would be stumped with astronomically higher costs for supplies. We're talking in the billions here. In essence, GPO's "seem" indispensible.

The issue however is not that they stand to serve a critical function but how reliable they are. A recent GAO report questions the price saving intent of GPOs. Drawing on the most relevant conclusions from the article reveal that GPO contracts did not ensure that hospitals saved money. In many cases, among hospitals of all sizes, GPO negotiated contracts were often higher for supplies like pacemakers and safety needles. The GAO study is in stark contrast to the GPO funded studies touting substantial cost savings for hospitals – go figure!

This brings us to examine how GPO's make their money. By hospitals themselves. By charging a percentage of the total outlay their member hospitals pay to preferred medical suppliers on the negotiated contracts. The economics of it are simple – higher the expenditures - higher the GPO compensation. Are you thinking about kickbacks? Back in the 1980's GPOs convinced Congress of their indispensible role in reining in healthcare costs and they are thus exempt from the "general statutory ban on kickbacks where the government covers health care costs".

A recent article I read over the summer, does a great job in bringing to light GPOs engaged in a partly dirty business under the guise of helping hospitals. What the author here focuses on is how GPOs stifle innovation and even went as far in stating that GPOs keep life saving devices from entering the market. He relates his particular experience of getting a needless-syringe proven to lessen catheter infections into hospitals. His product was significantly less expensive and more effective. That's why he was thwarted time and again.

With the perverse incentives for GPOs, their "intended" pro-competitive stand is questionable. What is needed here? The HBR article concludes that these perverse incentives need to be reversed by repealing the safe harbor provisions that exempt GPOs. Over and above policy change – how about transparency of GPO contracts to start with?

Itemized receipt for my health insurance premium

2010-10-15T19:11:00.003-04:00

There’s been lots of discussion recently on transparency. Whether that means getting a receipt for the income tax we pay and what it’s used for or providing a price list to consumer/patients for different medical procedures in a geographic region, the buzz of transparency is everywhere. All this talk has gotten me thinking about renewing my auto insurance - Bear with me, I swear health care costs are related. When I asked for a quote, I got to see exactly how much I pay for each point of coverage. Having auto insurance liability coverage is required by law in my state, but for other types of coverage, I chose the level of coverage that best fit my own risk tolerance. After playing around with different levels of coverage I received a calculate premium payment. I knew that 50% of the premium was for liability coverage, 30% for collision, 10% for additional medical coverage and 10% for services that save me time. Then I took that same standard language and shopped it around. There is lots of competition, and I have a vested interest in getting the right coverage for me for the lowest cost. I own a lot of the responsibility for controlling the premium and the costs of my coverage are very transparent. I have a direct incentive to encourage me to drive safely and to take care of my car. While I could not tell you the statistical likelihood of me getting in an accident; I know that if I do my best to avoid accidents and take care of my car then my risk is reduced and so is the increase in my premiums. My behavior doesn’t eliminate the risk entirely, but then that’s why I have insurance, isn’t it?

I sure wish health insurance worked this way. I have insurance coverage through my employer. Don’t get me wrong, I’m really grateful for it. But my employer gets to figure out what is the most cost effective coverage for them and only then do I get to choose from the couple of selections that they provide. I feel very disconnected from the cost of insurance. Even though I only pay a portion of the total premium, I know vaguely that I might play a role in keeping health care costs in control by diet and exercise and regular checkups, but I don’t have a very visible way of seeing the impact. I sort of know what my health insurance covers. For instance, I know my employer ensures that all major plans cover approximately the same thing. But then my choice is based on which doctors I have access to and the overall portion of the premium I pay. I also know what my co-pays are and what my deductible is. But I don’t know how much of my health insurance premiums go to catastrophic coverage, preventive care services, chronic care management, prescription coverage, etc. I feel very disconnected from the premium cost and even more disconnected from how I impact that premium.

Out of curiosity, I asked the insurance agent from whom I purchased auto insurance whether their health insurance quotes were itemized in the same way as their auto insurance quotes. Let’s just say that the lack of transparency is not just a symptom of employer coverage.

We keep asking for transparency on health care costs thinking that it will help align consumer and practitioner incentives to use health care effectively. Maybe we could start by asking for transparency on the costs we, as consumers, have a real relationship to, the amount we pay for insurance. It’s all well and good to know how much a triple bypass costs at the different hospitals in my town; I just don’t know that knowing the difference would induce better health behavior on my part. What is relevant to me is what my premium actually buys me and where I might play a role in controlling it.

Costs of Care Essay Contest!

2010-09-25T06:35:00.000-04:00

On September 7, 2010 Costs of Care launched a national essay contest, with $1000 prizes for the best anecdotes from patients and clinicians illustrating the importance of cost-awareness in medical decision-making. We have a great line-up of high-profile judges. Details available at www.costsofcare.org/essay

Gov. Michael Dukakis, former Democratic nominee for President of the United States
Tim Johnson, Chief Medical Correspondent of ABC News
Atul Gawande, surgeon and New Yorker staff writer
Jeffrey Flier, Dean of Harvard Medical School
Gov. Michael Leavitt, former United States Secretary of Health and Human services

Entries must be no longer than 750 words, and should be typed and double-spaced. Students strongly encouraged to submit an anecdote. E-mail submissions to contest@costsofcare.org are preferred, however entries may also be mailed to

Costs of Care
21 Father Gilday Street, Suite 115
Boston, MA 02118

Deadline: November 1st, 2010

Additional submission information available here

Will it be misery or happiness for hospitals?

2010-09-09T15:55:00.007-04:00

- Kristine Komives

How do hospitals make money? - By spending less than they earn.

But here is the situation that hospitals and health centers will be facing as health care reform legislation is implemented - there will be growing demand to eliminate wasteful spending, including excess care that would otherwise bring in revenue.

In the last few days, Moody’s downgraded the outlook for non-profit hospitals and health centers due to decreases in volume and lower reimbursement. In 2009, many hospitals saw salary freezes, suspension of construction projects or other capital improvement projects, layoffs and other drastic cost saving measures. But Moody’s predicted that “management teams will find it increasingly difficult to cut additional expenses.”

One of the overarching goals of health care reform is to bend the health care cost curve. One approach to do this is for third party payers to simply pay less for the health care provided. The inevitable cuts in Medicare and Medicaid reimbursement that will take place over the next several years will do just that.

Another approach involves patients using less services. There appears to be evidence that consumers are certainly spending less in light of the recession economy: not filling prescriptions, not following up on appointments or opting for plans with lower premiums and lower out of pocket expenses. In a recent article in Health Affairs, looking at Health spending by source show that “spending by households grew at 4.3 percent in 2008, a deceleration from 5.9 percent growth in 2007.” The article concludes “In response to poor economic conditions in 2008, people may have reduced their spending on health care and forgone some medical treatment. . .” Recent estimates on current spending in health care in 2010 corroborate the ongoing slowdowns in overall health care spending across all payment sources. USA Today just published its review of health spending finding that “Spending on doctor’s hospitals, drugs and other medical care climbed at a 2.7 annual rate person in the first half of 2010, the smallest increase since the Bureau of Economic Analysis began tracking medical care in 1959.”

The key to bending the cost curve correctly however is not for patients to stop getting the services they need to be healthy, as currently appears to be the case. Moreover, many health care costs are far beyond the realm of patient control. One thing seems certain however, bending the cost curve is going to mean decreasing revenue for those who provide care, especially hospitals and health systems.

Many of the strategies hospitals used to control their own costs in 2008 and 2009 were short term. In the long term, hospitals will need to invest money and resources to drive down costs they incur for the revenue they achieve. They will need to bend their own internal cost curves compared to the revenue earned. This will take investment in process reengineering and IT resources. They will need to achieve better alignment between clinical and administrative systems. This alignment must be completed not only to foster transaction level improvement but must be built to generate a better feedback loop of information to lead to large scale transformation. And all this will be taking place in a climate of unpredictable and likely declining revenue streams and difficult capital markets with which to raise funds. Otherwise their future will continue to be misery and not happiness.

Kristine Komives

Kristine is a recent graduate of the Executive Masters of Health Services Administration at the University of Michigan School of Public Health. She has 12 years of experience working in information technology, most recently in aligning information systems used throughout the supply chain at the University of Michigan Health System. She is very interested in strategic information management and the promise it holds in helping shape long term changes in the way we deliver patient care.

Caveats to “letting go”

2010-08-26T17:29:00.002-04:00

A recent NYTimes article comes at the heels of Dr. Gawande's compelling essay on end of life care. The matter at hand is that legislators are realizing the economic value of palliative care options for terminally ill patients. Recently, Gov. David A. Paterson signed into law a bill — the New York Palliative Care Information Act — requiring physicians who treat patients with a terminal illness to have frank discussions about prognosis and options for end-of-life care, including aggressive pain management and hospice care as well as the possibilities for further life-sustaining treatment. A similar law in California seeks to overcome physician resistance to talking openly with terminally ill patients about end of life care options. As part of the original federal healthcare overhaul, a similar provision would have reimbursed doctors for the time it takes to have such conversations – which however did not make through it given the traction gained by "death panels". Overall, even commercial insurers have financial incentive to steer patients with a poor prognosis away from costly health care services.

The point is that there is a cost advantage, in addition to the better quality of life argument. Several studies reveal that palliative care and hospice services can reduce costs of can-do-aggressive medicine anywhere from 20 to 35 %. Given that end-of-life costs make up a quarter of the Medicare budget, steering patients away from the ICU makes for good economics right? If that is the case then shouldn't all states follow suit? There are caveats however - that are well brought to our attention in this write up, on the Disease Care Management Blog.

Doctors cannot predict the end of life: "When confronted with a critically ill cancer patient, popular culture would have you think the physicians can predict the likelihood of not making it out of the ICU alive and can therefore treat accordingly. The problem is that the prediction is far from perfect with an ROC, according to this study, of about 0.8 (where 1 is perfect). In other words, there are enough false positives to give physicians pause before recommending pulling the plug." Further, "for non-cancer patients, the prognostic tools are even worse".

Research on hospice is on shaky ground: "given our national manic compulsion for "evidence-based" science to guide treatment decisions, that the research supporting the benefits of hospice is decidedly shaky. Dr. Gawande only quoted some studies that happened to support his point of view"

Having said that, what could change is a physician's perspective on palliative care – not as an option after all else fails.

Behavioral Biases in Medical Testing

2010-08-08T20:54:00.004-04:00

As evidence continues to mount that established models of rational decision-making are dangerously out of date, behavioral science has embraced human irrationality in all of its deceptively predictable forms. At the forefront of the field is Duke University professor Dan Ariely, whose simple experiments into human bias have shed light on everything from the fallacy of supply and demand to the problem of procrastination.

In a recent interview with NPR, he turned his gaze toward the growing debate about rampant health care costs and their potentially behavioral origins. To contextualize the issue, he describes an experiment in which different groups are asked to order pizzas. One group is presented a menu where the default is an all-dressed pizza and toppings have to be taken off if they aren't wanted. Another group is presented with a menu featuring a cheese-only pizza where any preferred toppings have to be added. It turns out that those presented with the all-dressed pizza menu were more inclined to order more toppings, and those with the cheese-only menu were more likely to order fewer toppings.

If this outcome is truly representative of a natural human bias, the implications for ordering medical tests is painfully obvious and potentially quite costly. As Ariely confirms:

If you go to the hospital these days, or to visit your physician, you will see that they have these electronic order forms. And they basically use those to order tests for you. And sometimes these order forms are empty, nothing is selected for them. The default is nothing, and they have to pick what they want to order. And sometimes some tests are preselected for them.

So we created scenarios in which we described to physicians some patients who arrived at the ER, and we asked them to decide what test to give them. And to half of the physicians we gave the fully-loaded options, like the pizza. And for the other half we gave them one that were empty, and they had to check which one they wanted to do.

The basic result was that in the empty set, physicians chose an average of five tests. And in the full set, they chose an average of 13 tests....the difference was about $1,300 per patient. So now if you think about it, these information systems are going to roll out into hospitals in all kinds of ways and I think they have tremendous influence on what the physicians will decide.

The experiment didn't use actual patients but the intuition should be fairly obvious: given a natural human bias to anchor to a default selection when presented with a menu of options, more attention should be paid to what that "default" set of tests will be for a particular set of symptoms, and how that decision will ultimately impact both the quality and the costs of care.

Outsourcing Prevention Part II

2010-07-16T16:51:00.005-04:00

A quick follow up to previous post. A recent NPR Shots Post summarized the new role prevention may play in the restructuring of health care. A particular line concerned me. "Insurers will have to cover preventive services ... that are recommended by the US Preventive Services Task Force." First of all, the words "have to" rarely say to me efficiency or efficacy but rather a search for loopholes to recover lost profits. At the same time, the writer questions whether we will see any real savings from these requirements, citing the cost of many cancer screenings compared to their yield.

However, cancer screenings are a clear outlier on the list of services from the USPSTF. The prime motivation for colonoscopies and other screenings is not to save money but to potentially save the patient and so they are encouraged. The rest of the list deals with issues of diet, blood pressure, weight, smoking, and even vaccines, all of which, when dealt with appropriately, can greatly alleviate financial burden in the future.

Outsourcing Prevention

2010-07-16T16:32:00.004-04:00

Several weeks ago, the members of the Costs of Care team attended the Massachusetts Health Data Conference. The dozen or so speakers differed in the methods they proposed to cure an ailing healthcare system but not so much in what needs to be changed. Common themes appeared again and again: change the fee for service payment system, expand coverage to as many individuals as possible, and find a way to fiscally motivate prevention in place of treatment. While many alternatives to fee for service were proposed, a program that somehow motivates prevention seems to be a piñata no one has the strength to break open.

I am not writing this to present some revolutionary plan, but rather to point out a growing possibility that may act as a stepping stone to pro-prevention systems: paying people to stay healthy. In a modern hospital somehow encouraging patients to take a proactive attitude towards improving their health before they get sick is near impossible in the financial sense, as well as in chronology (they’re already in the hospital!) so perhaps the best method is to remove the responsibility of prevention from the hospital entirely. Instead, it should manifest in other organizations.

Japanese health reform that began several years ago comes to mind in this context. As part of a nearly decade long plan, measuring waistlines of people between 40 and 74 became a mandatory part of annual checkups. In the end, financial penalties will be placed on companies and local governments that fail to meet certain quota. In this method, the burden of motivating lifestyle changes falls not on the hospitals but rather on employers who are also often responsible for medical coverage for their employees in the Japanese system. The architects of the waistline limit hope to show payers that they have the most to gain by motivating improved general health in the people.

This lesson is already something that many American companies have latched on to, without the nudge in the right direction from the government. Many employers offer plans with monetary benefits if employees quit smoking or lose weight. In the context of the employer/provider prevention is simple to motivate financially as they save the most money. However, can this ever emerge in healthcare? Possible plans for patient incentives in the UK show that in a nationalized healthcare system, prevention becomes crucial to long term success. With an effectively limitless need for care and an entirely different paradigm of what a patient is, the UK does not suffer from the fear of ‘loss of profit’ that comes with successful prevention in the US.

One day the US may create a system like Great Britain’s but until then it seems that hospital care may be focused to dealing with the sick, while motivating lifestyle changes and preventive medicine should be left to employers and insurers who have the most to gain from the noticeable savings. An ounce of prevention is worth a pound of cure.

“Don’t get sick in July”

2010-06-28T23:54:00.001-04:00

"Don't get sick in July" - It's an old adage in the medical community, most pronounced in academic medical centers, when the annual turnover of interns and residents occurs each summer. Each June and July, newly minted MDs, only weeks out of medical school, become interns. Popularized as the "July effect" or "July phenomenon," is when care at teaching hospitals is, according to myth, chaotic and disorganized as the cohorts of incoming interns fill the ranks of first-year residents.

A recent study at UCLA set out to prove the July theory. Researchers analyzed 244,000 death certificates from between 1979 and 2006 at a medical center, and noticed a significant 'July spike' in fatal medication related errors. Another study conducted at a trauma center noticed a similar spike in non-fatal preventable medical complications.

July effect or not – the truth is that hospitals are always at the brink of change – implementing changes to policies, rolling out new IT tools and systems, new equipment and so on. And there will always be the newbie's who didn't know better. Earlier this year, an article reported on a series of radiotherapy accidents across hospitals, resulting from radiation overdose from new linear accelerators. In a recent NYTimes interview with Dr. Peter Provonost, the man who spearheaded checklists in surgical ICU's at Hopkins, was quoted as saying that "in every hospital in America, patients die because of dysfunctional teamwork and hierarchy" and it has to do with the culture of hospitals and the way doctors are trained.

While the debate is still far from consensus, whether electronic health records will lower or raise costs, no amount of technological innovation can ever replace culture – the culture of transparency, teamwork, accountability and not shoving mistakes under the carpet. Just as medical students are afraid to talk back to their professors or raise safety issues, nurses are afraid to stand up to surgeons who won't take a mandatory "time out" to do safety checks before they commence surgery – these cultures ultimately cost patients their lives. Moreover, the logic is undeniable that safety and efficiency go together. Safer hospitals will achieve lower costs – by working inside out – first with the right culture and then with the technology.

How are innovative hospital's dealing with the culture issue – by being transparent about errors and near misses. AHRQ Innovations Exchange reports on how the University of Michigan Health System adopted a process of full disclosure of medical errors that involved multiple components including an online incident reporting system, open and honest communication with patients and families, with an apology offered when warranted; and quality improvement initiatives guided by reported errors. The program increased error reporting, significantly reduced malpractice claims and costs per claim, hastened the claims resolution process, and reduced insurance reserve requirements.

An Exciting Summer

2010-06-01T15:12:00.005-04:00

A preview of exciting things to come this summer:

1. Early stage development of the Costs of Care mobile application (if you squint at the iPhone you'll see our icon, courtesy of Zegarra Designs)

2. Preparation for the inaugural Costs of Care essay contest with large cash prizes for the top anecdote demonstrating the importance of cost-awareness in medical decision-making. Judges will include former U.S. Presidential Candidate and Massachusetts Governor Michael Dukakis, current Harvard Medical School Dean Jeffrey Flier, and others to be announced soon.

3. A major expansion of the Costs of Care blog.

Stay tuned for details!

Pictures of the Inaugural Event on FB

2010-06-01T14:32:00.015-04:00

Thanks to everyone who participated in our inaugural event last month, "Doctors, Policy, and Change We Can Implement" hosted on the Harvard University main campus. It was a great success with standing-room-only attendance, lively unscripted debate among our panelists, and outstanding questions from the audience. Thanks in particular to the Malcolm Weiner Center for Social Policy who generously sponsored the networking reception and to the Harvard Business Review for providing free copies of their latest issue on health care costs to everyone who attended.

Check out our Facebook page for pictures and other media. Based on the feedback we received, we will host our Fall event in a larger venue and plan to provide streaming video for those who cannot be on site. Stay tuned!

Debating price transparency

2010-05-19T10:35:00.002-04:00

Ever wonder how prices are set for healthcare services? If you've ever received a medical bill and wondered why it can't be simpler to understand, then you're asking the right question.

While there are many reasons why healthcare costs are spiraling, one of them is that nobody really knows what anything costs. Providers get paid through a multiplicity of insurance-company contracts and billing schedules that change from patient to patient, depending on the type of health plan. Recently a New York Times article covered the issue of 'balance billing'. A situation where doctors and other health care providers receiving discounted payments from the insurance company — an amount less than the fee they want to be paid — bill the patient for the 'balance'.

How are consumers expected to make well informed decisions if they have no idea what to expect with treatment costs? More importantly, what kind of treatment decisions should consumers be making themselves? The overall consensus however is that with consumers being asked to pay larger proportions of their medical costs, they should know what they are paying for.

That is precisely what the Congress is debating over: How much transparency in prices do we want in healthcare? The Health Subcommittee of the House Energy and Commerce Committee held hearings last week on three different bills—all designed to make prices in healthcare markets more transparent. A Wall Street Journal blog does a great job of summarizing the hearings highlighting leading points in the long-running debate over price transparency. Another article by Julian Pecquet of The Hill adds useful details on the democratic vs. the republican bills.

There are strong arguments for and against price transparency. An article in the American clearly summarizes the polarized arguments. On the one hand we have economists who believe that in the healthcare market, price transparency could result in higher, not lower prices, with providers charging as much as their competitors, thus defeating the purpose of transparency. On the other hand, we have proponents of consumerism, who believe that once American's, currently insulated by insurance, are made aware of the healthcare tag price – they will consume less.

In conclusion, while the price transparency legislation is off to a slow start, there are several unanswered questions. How will price transparency affect costs? Does transparency really affect consumer-consciousness in the healthcare market?

Transforming the Delivery System

2010-05-18T20:38:00.004-04:00

On June 4, 2010, Costs of Care will be a featured exhibitor at Transforming the Delivery System, a Massachusetts Health Data Consortium sponsored conference focused on payment reform.

We'll be reviewing our progress to date, future plans, and discussing ways information technologies can be leveraged to help health care providers lower the costs of care.

Register here

Reducing Health Care Costs Using Lifestyle Interventions

2010-05-18T13:47:00.003-04:00

Health care costs in the United States are rising to epidemic levels, and there is no simple solution to this problem. Advancing technology, an aging population, and lack of point-of-care pricing information are partially to blame. Lifestyle habits also have been shown to have an effect on many of the expensive disease conditions in the United States. An article recently published in the May 1 issue of American Family Physician, titled "Diet and exercise in the treatment of hyperlipidemia" by Robert B. Kelly, discusses how lifestyle changes can lower our risk for hyperlipidemia, a disease linked to heart attacks, stroke, and other costly ailments. It is worth our money and time to review some of the points made in the article and how they apply to diseases in general.

Some of the changes discussed in the article include increasing certain foods and supplements in the diet, such as tree nuts, mono- and polyunsaturated fats, and low amounts of alcohol, as well as decreasing overall fat and carbohydrate intake. Regular aerobic exercise of 120 minutes per week also reduces cholesterol levels.

Lifestyle-focused interventions are often associated with a high level of inconvenience; however, this article shows that many of them require minimal effort and may simply require checking a food label or making an additional purchase. Also of note is that the recommendations are quite specific: for example, it is not enough to run for a random amount of time per week; rather, 120 minutes per week provides the most benefit.

How does this information reach the general public? There are many community-based programs across the nation that promote lifestyle changes in a fun and educational manner. Physicians are being increasingly urged to promote lifestyle changes rather than over-relying on expensive prescription drugs. And consumers are making more of an effort to learn about healthier habits on the TV and Internet.

As health care costs are projected to rise over the upcoming years, lifestyle modifications will become an important, cost-effective way of improving overall health without tipping the bill. Dr. Kelly's article is an introduction to how simple changes can lead to large health benefits across all states.

Vikas Kumar recently completed his medical degree at the University of Pittsburgh School of Medicine.

Costs of Care in the National Press

2010-05-14T09:03:00.011-04:00

As the director of Costs of Care and a practicing doctor, I occasionally have the opportunity to offer public commentary on healthcare costs from the doctor's perspective.

I recently spoke with national media about the role (or lack there of) of costs in medical decision making. I'm quoted in last week's New York Times, for a great article entitled "Teaching Physicians the Price of Care".

The same article was syndicated here on National Public Radio, here on Kaiser Health News, as well as several regional newpapers and radio stations around the country. The quote that was used was also picked up for paraphrased versions of the story throughout the blogosphere.

Lastly, an op-ed I wrote aimed at doctors, called "Paying Attention to Patient's Pockets" went online yesterday.

Looking forward to your feedback/comments!

Neel

Cost containment and unfinished business

2010-05-04T17:02:00.001-04:00

While the contentious healthcare reform bill enables access to health insurance for 32 million Americans, what about costs and efficient healthcare delivery?

The often-heard criticism of the 10-year, 1 trillion healthcare reform plan is that it simply does not do enough to rein in the cost of treatments. According to a government report released in February this year, healthcare spending grew to a record of 17.3 % of the GDP in 2009, $ 134 billion more than 2008, marking the largest one-year jump in its share of the economy since the government started keeping such records half a century ago.

The question then is, how does ObamaCare plan to deal with the American view of more care is better care? Given that the new healthcare overhaul requires the government to now pick up more of the healthcare tab, can we cope with that? Moreover, how do we convince patients and providers that new procedures, tests, drugs or devices that might save or improve lives really are not always necessary or worth the exorbitant prices?

A stark example of the inefficiency in the system was brought to bear in a recent study published in JAMA about the rise in unnecessary back surgeries. Despite the growing evidence that it does not really work well for patients and increases the likelihood of life threatening conditions like heart attacks, strokes and pneumonia, complex back surgeries have increased 15-fold between 2002 and 2007. In essence, more complex procedures mean higher payments for surgeons. The misaligned financial incentives, the paucity of patient education about less invasive treatment options and the trying-and-everything mentality in medical practice even if we’re not sure it works are all part of the problem.

And it’s not just more back surgeries. More CT scans pose a problem too. A recent study demonstrated the significant overuse of such scans, projecting that 15,000 people die in a given year due to the radiation received from CT scans. Caesarean births have become more common, with little benefit to babies and significant burden to mothers. Men who would never have died from prostate cancer have been treated for it and left incontinent or impotent. Cardiac stenting and bypasses, with all their side effects, have become popular partly because people think they reduce heart attacks.

Overall, the consensus is that culture change is needed to move away from wasteful spending to more efficient healthcare. They include new making doctors more sensitive to costs of care, establishing new payment methods for doctors, more comparative- effectiveness research and penalizing hospitals for inefficiency. The hope is that the Patient-Oriented Outcomes Research institute established by the healthcare Bill, charged with setting the national agenda for the comparative- effectiveness studies, as well as providing more money and disseminating results, will bring some order into the chaos of practicing medicine.

New Takes on Healthcare Costs from the Ground Up

2010-03-28T09:10:00.005-04:00

Join thought leaders in medicine, economics, law, and policy at our inaugural Costs of Care panel event, April 21, 2010 at 7PM

more info here:
Institute for Healthcare Improvement listing
Harvard University Gazette listing

Costs Of Care Primer

2010-02-18T20:51:00.001-05:00

Check out this SlideShare Presentation:

Costs Of Care Primer

View more presentations from Neel Shah.

Practicing medicine by numbers

2010-02-02T01:39:00.003-05:00

Practicing medicine by numbers

In a system of upside down incentives – a fee-for-service payment model that results in doctors doing too much – more tests, more procedures and more treatments, left almost entirely up to a doctors “informed intuition”.

Intuition indeed is necessary in medicine, explains Jerome Groopman, in How Doctors Think, but can lead doctors astray. Numbers on the other hand can help resolve quality variation by data-driven methods.

After years of knowing the benefits of beta-blocker prescriptions, safety checklists and so called ‘evidence based practices’, what keeps doctors from doing what they know? Can we afford to rely on the variability of their good judgment and intuition? Why are quality managing practices like lean and Six Sigma facing so much resistance in the practice of healthcare?

Quite simply put, because we trust our doctors to do what is best for us. Hospitals and physicians that provide less than top-quality care are rarely punished. There is that, and how we pay for healthcare. Volume care is compensated, irrespective of the added value for patients.

In the midst of the country’s struggle to health reform (or lack thereof), this article offers a refreshing look at what can be done right. Brendt James – the champion of the ‘Intermountain way’ challenges doctors to continuously test and tweak protocols, set clinical goals, track patient outcomes and deliver quality care at low costs – offers reason for optimism.

Too many drugs?

2010-01-25T21:32:00.004-05:00

Ever wondered about the contents in your medicine cabinet? Or the forces that got you on those prescription medications in the first place?

This NPR editorial does a great job bringing to light how Merck’s Fosamax for ostopenia, a condition deemed treatable by this drug, got into the cabinets of million women across America. And how the marketing of the pill changed the definition of bone disease and sought women to seek unnecessary treatment.

This pharmaceuticalisation phenomenon, meaning the pharma companies quest to turn every research endeavor into a blockbuster drug highlights the manipulative role of drug companies in deciding what constitutes the definition of a disease just so they can market a drug to cure it.

Set against the backdrop of the controversial evolution of ostopenia as a disease, we read
about how pharma companies are vying to get the FDA to sign off on a prescription pill for jet lag! Do we really need a pill for jet lag? Or worse yet, should we let the pharmaceutical industry decide which drugs fit what therapies? With spiraling healthcare costs are we going to let pharmaceutical companies hold the reigns?

More importantly, can we draw the line between treatment, research and development for the greater good versus drugs that are downright redundant?

Healthcare Reform & End-of-life Costs

2009-08-08T13:32:00.003-04:00

When President Obama's chief budget deputy Peter Orzag announced the stimulus bill (American Recovery and Reinvestment Act of 2009), he mentioned that the U.S. spends $700 billion each year on medical tests that don't help patients get healthier.

Policy analysts have long known that much of this seemingly wasteful spending occurs during emotionally challenging moments at the end of life. We often are willing to spend the most on those who are the sickest--even when it is unlikely to make them better. Given the highly sensitive situations involved, most politicians have been reluctant to touch this issue with a ten foot poll.

At least until now.

The recent healthcare bill drafted by the House takes on the costs of end-of-life care heads-on by providing doctors with financial incentives to counsel patients on creating "advanced directives" (commonly known as "Do Not Rescusitate/Do Not Intubate" orders). Since many patients can be sustained indefinitely on ICU life-support, the bill is meant to save money by reducing so-called "futile care".

However, the normally sympathetic editorial staff of the Washington Post has taken issue with this aspect of the bill, on the grounds that it is unethical to put financial rewards and end-of-life counseling in such close proximity. What do you think?

Caveat Emptor

2009-07-22T23:07:00.004-04:00

(Pursuing universal access to health care while reigning in the spiraling cost of care and bracing for an army of aging baby boomers is a modern policy nightmare. Compounding the challenge is a public all too used to over-consuming everything from prescription medication to flat screen TVs. In this Washington Post article, MacGillis points out the more problematic elements of any health care reform, and suggests that a substantial behavioral shift may be necessary if America's medical infrastructure is to survive the coming financial apocalypse...)

In Retooled Health-Care System, Who Will Say No?
By Alec MacGillis
Updated: 07/08/2009

The question came from a Colorado neurologist. "Mr. President," he said at a recent forum, "what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who . . . is going to enforce the rules for a system like that?"

President Obama called it the "right question" -- then failed to answer it. This was not surprising: The query is emerging as the ultimate challenge in reining in health-care costs that now consume $2.5 trillion per year, or 16 percent of the economy. How will tough decisions be made about what to spend money on? In a country where "rationing" is a dirty word, who will say no?

Read on...

AMA Speech and Media Response

2009-06-17T11:27:00.009-04:00

In the wake of President Obama’s speech in front of the American Medical Association, various interesting conversations about health care costs have occurred in national media. The New York Times ran an editorial on what could be done so that doctors no longer feel they need to order potentially unnecessary tests to protect themselves against malpractice suits. The Times also ran a story scrutinizing the health care “rationing” rhetoric.

On NPR, health care was the topic of the day following Obama’s address. It’s worth listening to On Point’s show where professors and journalists field questions about the feasibility of reform. Also interesting is Talk of the Nation’s examination of whether doctors are the problem with healthcare. And then a reported piece on a model, low-cost county.

At Costs of Care, we work to contribute to this important effort – addressing one of our nation’s greatest contemporary challenges.

Doctors and the Costs of Care

2009-06-14T12:34:00.003-04:00

A recent New Yorker article described a small border town in Texas with the most expensive healthcare in the United States. The author, Atul Gawande, investigated what led to such high costs in such an unlikely place. The answer was surprisingly simple: doctors in McAllen, Texas, have the most incentives to order unnecessary tests and treatments for their patients.

Unfortunately, researchers at Dartmouth have demonstrated that the problem in McAllen is pervasive throughout the country--a fact that has not escaped the Obama administration. In fact, Atul Gawande's article has become so influential, that the New York Times recently reported that it is now required reading in the White House.

These developments were followed by a New York Times editorial today that specifically advocates for the type of solution that our organization, Costs of Care, is trying to address.

We believe that cost-sensitive doctors are less likely to inflate medical bills with expensive and unnecessary tests. You can join our community of healthcare providers and patients interested in lowering costs at the point of care by becoming a fan on facebook.

Price Transparency in Boston

2009-06-08T10:07:00.001-04:00

A few weeks back, we contributed a blog post to the Institute for Healthcare Improvement Open School.

Check it out and leave a comment :)

http://ihiopenschool.blogspot.com/2009/05/price-transparency-in-boston.html

Putting Prices on Your Doctor's Menu

2009-06-01T10:04:00.002-04:00

Over the last four years, I’ve had the opportunity to work at the best academic medical centers in the country, alongside some of the most competent and caring doctors one can imagine.

These doctors made every effort to address the needs of their patients, diligently and compassionately attending to each physical symptom.

But even the best doctors neglect something critical: the bill.

In a time when tightening belts and pinching pennies has become especially important, we too often pay exorbitant amounts—enough to bankrupt two million American families a year—on medical care we may not even need. As patients, we’ll spend hundreds of dollars on a medication we are prescribed, even when a generic version is available that contains the exact same stuff and is 90% cheaper. We might pay thousands of dollars for an MRI, even when its results are unlikely to be informative.

The reason is painfully simple. Information on the prices patients face is rarely available to doctors when they are deciding which tests and treatments will go on the bill. A 2003 American Medical Association study showed that fewer than one in five doctors understands how much their patients pay for care.

In fact, healthcare is the only sector in our market economy where we routinely contract for services without knowing what the costs are or even exactly what we are buying. For good reasons, we trust doctors to make purchasing decisions for us. But when doctors are looking at menus without prices, it’s easy for them to order filet mignon at every meal—even when their patients are the ones picking up the tab.

True, when we are sick, certain tests and treatments may be appropriate no matter how much they cost. Doctors weigh several factors when ordering tests, including how sick the patient is and how good the test is. However, the Congressional Budget Office has estimated that the United States spends $700 billion (an amount comparable to our total spending on the Iraq War) each year on medical tests and procedures that do not measurably improve health outcomes.

Given this evidence of wasteful spending, and the impact it has on Americans, it would be sensible to also make costs part of that calculus.

This is especially true given the potentially catastrophic impact of the rising costs of health care. Today, spending on health care is approximately 16% of GDP, up from 8% twenty years ago, and 4% twenty years before that. In the near future, Medicare and Medicaid, which account for half of this spending, will become unsustainable. Investment in other things that matter to us—roads, schools, security—will be crowded out.

To add insult to injury, we’re not even getting much bang for our buck. A 2008 Health Affairs report compared health care spending in the United States to other countries in the Organization for Economic Cooperation and Development (OECD). Per capita, the U.S. spends double the amount everyone else does, but we rank in the bottom half of developed countries for most health quality indicators.

Debates about this cost-quality discrepancy are inevitably abstracted to the population as a whole—the millions who cannot afford coverage, the staggering percentages of GDP. The underlying problem is often framed as an irreconcilable tension between the interests of individual patients to have everything possible done and the collective interests of all of us to have a sustainable system.

But there may be a simple solution.

Doctors are trained to focus entirely on the patient in front them. Unlike policymakers, they are not trained to assume responsibility for entire populations. And rightly so. If you were sick, you would want your doctors to make decisions about your care based on their assessment of you, and only you.

It’s no wonder that high-level policy discussions about the macroeconomic implications of health care sometimes fall flat at medical conferences. The debate must be reframed in terms of the potential financial burdens a doctor’s decisions may impose on the patient in front of them. The availability of price information at the point of care would do just that.

Putting prices on doctors’ menus offers an opportunity to move beyond the apparent tension between individual and collective interests. In the end, doctors, policymakers, and patients can all agree that we don’t always need to order the filet mignon.

Neel Shah recently completed the requirements for his medical degree and is the Executive Director at Costs of Care, a nonprofit organization aimed at preventing medical bankruptcy by providing doctors with price information.