I'll be back next week to opine, but, this week, I’ve been busy running the finance panel at this year's HealthLeaders Media Top Leadership Teams Annual conference. In the meantime, readers, you have been especially active with your comments lately, and I thought I would take this opportunity to share with the rest of you what your fellow readers have thought about some of the recent columns I have written. Some of them have been edited for brevity, but otherwise are straight from the horse's mouth, as it were. I'm looking forward to sharing with you some of the thoughts and conclusions our star-studded list of healthcare executives come up with at Top Leadership Teams. Until them, have a great week.
My volume is down this year ... all of it in the commercially-insured sector. My health plan now has 48% of its membership in high deductible plans and very few have HSAs with them. Employers jumped directly to high deductible (and skipped the HSA funding part ....), thereby transferring risk to the employee. Most of these are small businesses, and the alternative was no health insurance at all.
I don't think (in my market) that employers have hidden their intentions at all. I also don't think they're going to go back to first-dollar coverage anytime soon, but I'll admit I've been wrong before. What I see are more Americans, who already have credit cards at the maximum (virtual negative personal savings rate in the U.S. the last 4-5 years), figuring out that they just took a pay cut in the form of an increase in their health plan deductible. How are they going to fund their deductible when their credit cards are at the maximum and the banks are cutting (or at least freezing) their credit limits?
This is just part of the "financial hangover" in the U.S. right now.
Chief Financial Officer
Nice article. I have heard numerous industry comments echoing your column piece. The large national carriers have been spreading the gospel that these plan types are the panacea for employers, employees, etc. This is so far from the truth.
I will also share with you that I've worked for several large plans and their employees are forced to be guinea pigs to these policy types. They become the involuntary statistical benchmarks for their employers.
Name withheld by request
I just glanced at your piece on the slowdown in uptake of consumer-directed plans. Your critique is valid, in that HD plans are often a "benefit" cut. The more salient point might be, so what? If an employer elected to drop some poorly subscribed employee benefit (disability insurance, gym membership, EAP assistance, etc), no one would realistically care. But when the value of the benefit is on the order of $1,000 per month, people do notice.
Ergo, the solution to this problem is to communicate the nature of the change. "Yes we the employer saved an average of $5,000 per year by this change, and we are putting $5,000 in your paycheck instead. This means that your raise this year is not the $7,000 you saw, but $2,000 plus your indirect prior payments. Employees who are interested in decreasing their care costs can do the following: (attach long list of care cost control items here)..."
The global problem is that we characterize the premiums that we pay to health plans as "insurance" when they are absolutely nothing of the sort. We are selling prepaid care, not insurance. Most folks don't have a claim on their homeowner's insurance, auto insurance, life insurance, or various liability insurance policies most years. That is because those products are actually insurance.
But when a deductible is less than $1,000 for a product category that is likely to cost a median family more than $4,000 in any year, this most certainly is not insurance: It is prepaid care. We should separate these ideas. If your auto insurance had a $250 deductible and included all costs (the car, gasoline, maintenance, etc.) your auto insurance would cost about $2,500 per month, and we would all drive Mercedes, Ferraris, and Lexuses. We also would not stop driving when gas hit $6 per gallon. Instead, we would complain about the cost of "insurance."
Insurance costs are NOT the problem. Care costs are the problem, and we act like we are insuring against them when we are doing no such thing. We are not covering an unlikely catastrophic loss. We are subsidizing overutilization and obfuscating the pricing mechanism in the market by doing it.
This is an excellent article, and right on. There will be lots of repercussions, like the Congressional "mood" to prevent the "ex-CEOs" from getting paid off... The contracts that they most certainly have will have substantial cash payouts, that even with bankruptcy, will be paid as a "preferred" tier payment.
That might be another column.
As the Medical Banking Project is on the cusp of a drive to bring banks into healthcare we have to deal with this question. As you say, the issue of weak liquidity in healthcare will start to trickle down and it's important to realize that the current state of banking, even with the bailout plan, is difficult. Not to be alarmist, but as one commentator said, we are in the first inning of a nine-inning game. Perhaps even that analogy loses its relevance because today, even the players are changing (i.e., Lehman, Merrill Lynch). The bailout plan by itself could be a drop in a bucket relative to need, and there is clearly a need to shore up other areas, like instituting a moratorium on rating agencies that create financial pressure by downgrading securities.
The trickle-down effect is easy to see: Hospitals will reign in spending. Banks will make lending more difficult. Large cap projects will be re-evaluated. For hospitals seeking to improve their basket of administrative processing tools, medical banking could offer a pay-as-you-go model that would do well. Making it as easy as possible for hospitals to walk into these new resources will be critical.
This new environment isn't a short-term thing. The market needs time to heal its wounds. Like the folks returning to Galveston, our work is just beginning. In the midst of this, administrative tools that offer high value and that are easy to walk into may be just what the doctor ordered as hospitals shift gears in response to tightening credit markets.
Chair/Medical Banking Institute Executive Director
Medical Banking Project
Mr. Betbeze, about two months ago General Motors sent my 93-year-old mother a notice that her health insurance coverage was ending Dec. 31. They would supplement her pension at $300 a month and wished her good luck with Medicare and whatever Medi-gap she could find. My mother is the surviving spouse of a GM retiree who died about 20 years ago and I joked that GM would be sending an assassin to kill her. The irony is that my mother is now enrolled in hospice, which takes Medicare and is paying the pharmacy bills related to the mortal condition. Turns out she is dying for good health coverage, like so many others.
Mark G. Winiarski, Ph.D.
Program Development Corporate Planning and HIV Services
New York City Health and Hospitals Corp.
I just finished a several-month process of trying to straighten out a billing issue with my own employer. My husband experienced chest pain while clearing our driveway after an ice storm in 2007, and I was floored to receive a bill two months ago for $957 for his ED visit and subsequent stress test and cardiac cath. Long story short ... the ED room charge had not been entered, so we were being billed for a very long office visit.
Even though I have worked at this hospital for almost 30 years, and know lots of the right people, it took a great amount of effort to get this billing issue resolved. We just received a revised EOB last week ... looks like we will be billed a $75 copay instead of the $957. I agree with you that any overbilling is "real money" and it pays to keep good notes of who you talked to when and about what. I will also be keeping all the documentation for some time, to make sure it has been taken care of completely.
Name withheld by request
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at firstname.lastname@example.org.