All posts by Greg Scandlen

Greg Scandlen is the founder of Consumers for Health Care Choices, a non-partisan, non-profit membership organization aimed at empowering consumers in the health care system.
Health Insurance

Who Is Underinsured?

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The next time you hear someone talk about how Medicare is a wonderful program and a model for what all of America should be doing, you may want to refer them to a new study from the Kaiser Family Foundation. It found that the average household on Medicare spends 14.1% of its income on health care. This contrasts sharply with the 4.3% spent by non-Medicare households. Of this amount, 62.9% goes to premiums for Part B, Part D, and Medigap, 18.1% goes to prescription drugs, 15.3% to medical services, and 3.8% to medical supplies.

A second Kaiser study showed the median out-of-pocket (OOP) spending for Medicare beneficiaries has grown from 11.9% of income in 1997 to 16.1% in 2005, in spite of the advent of Medicare Part D. Whereas the first study included only the non-institutionalized population, the second breaks out the population in facilities and finds that almost all of their income is spent on health care. The median income of this population is $11,000 and the median OOP spending is $9,776.

Meanwhile, the issue of out-of-pocket spending is considered important enough that the Senate HELP committee held a hearing on it a couple of weeks ago. The argument is that anyone who spends 10% of his income on health care is "underinsured." If that is the case, then Medicare is the source of massive "underinsurance."

Paradoxically, the population least likely to spend more than 10 percent of their income on health care is the uninsured, according to a JAMA study [gated, but with abstract]. Only 10.5% of the uninsured reach the 10 percent threshold, while 18.2% of the privately insured and 19.4% of the publicly insured do. So, if 10 percent of income is used as the standard, the people least likely to be "underinsured," are the uninsured! Go figure.

Health Care Costs

Kaiser Survey

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The Kaiser Family Foundation has released a new survey. It finds that people are having a hard time paying their medical bills. It doesn't mention that they are also having a hard time paying their bills for food, housing, transportation, education, or any of the other necessities of life. Once you get past the headlines, some interesting things crop up. For instance:

The number of people reporting problems in paying health care bills (22%) has actually dropped from last October (32%).

The care they are skipping is mostly non-essential. 35% are using home remedies or OTC drugs, 34% are skipping dental care or "regular checkups," 27% postponed getting a health care service they needed, and so on. In fact, people are less likely to do things they shouldn't do anyway, like going to a doctor when they have a cold or the stomach flu or having a yearly physical exam. 6% said they postponed an outpatient surgical procedure and 5% postponed an inpatient stay, but the survey doesn't mention if these were elective procedures.

The survey finds that "health care reform" is the public's fourth most important priority, after fixing the economy, reforming entitlements, and fighting terrorism. But people are divided on what they mean by "health care reform" with equal numbers saying either it means lowering costs or it means helping the uninsured.

Substantial majorities think "health care reform" should be accomplished without spending any new money or changing their own arrangements.

Physicians

More on Health IT

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Here is in-depth analysis by the law firm McDermott, Will & Emery (MWE) of the Health Information Technology section of the new stimulus package. The lesson – if you would like to participate in the Brave New World of federally-prescribed Health IT, the first thing to do is hire a lawyer.

The provisions of the bill are nearly incomprehensible. And the time frames are completely unrealistic. Standards are supposed to be set by December 31, 2009 – that's ten months from now, folks. And "each person in the United States" is supposed to be using an Electronic Health Record (EHR) by 2014. There are committees galore and grants to the states and "qualified not-for-profit entities." There is money available to providers to "purchase certified EHR technology," and "incentives" under Medicare and Medicaid to become a "meaningful EHR user." For physicians, the incentive is a bonus of up to $18,000 for 2011 and 2012, and decreasing after that.

Physicians

Taking Another Look at Health Information Technology

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As part of the federal government's economic stimulus package, Congress has authorized spending about $20 billion on health information technology (health IT) and another $1 billion on comparative effectiveness research. These provisions achieved wide bipartisan support in Congress and in the health care industry, based on the hope that the investment will help improve efficiency, cut costs, and result in better care. The reality is likely to be far different.

Proponents of this spending rely heavily on a RAND Corporation analysis from 2005 that predicted $77 billion in annual savings and improved outcomes. RAND estimated "implementation would cost around $8 billion per year, assuming adoption by 90 percent of hospitals and doctors offices over 15 years." It said, "The benefits can include dramatic efficiency savings, greatly increased safety, and health benefits."

Unfortunately, RAND assumed an error-free system that is quickly and enthusiastically adopted by virtually the entire health care system. That might happen, but it is an absolute best-case scenario. Even then, instead of "dramatic savings," the $77 billion hoped-for savings amounts to a mere 4.5 percent of total costs, placed at $1.7 trillion by RAND. Continue reading Taking Another Look at Health Information Technology →

Health Insurance

Obama’s Speech

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During President Obama’s “not-quite-a-state-of-the-union” speech last night, he called for a new era of honesty and accountability in government — “Finally, because we’re also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget.” [link]

Unfortunately, he broke that promise even before he left the podium. In discussing the need for health care reform, he said, “This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.”

But none of that is true. Let’s look at the claims one at a time. Continue reading Obama’s Speech →

Health Insurance

Another Bad Study

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A brand new report by Linda Blumberg and Lisa Clemens-Cope of the Urban Institute and funded by the Robert Wood Johnson Foundation repeats the tired old mantras we've been hearing for 15 years.

They argue that HSAs are okay for the healthy and wealthy, that the sick and the poor can't afford to pay the higher deductibles, that people can't effectively shop for health care services, that HSAs are ripe for tax cheating, and that they aren't very popular in any case. They support these views by relying on old information and discredited sources and by ignoring any research that runs counter to their predetermined views.

First, for the easy stuff. This report relies a great deal on a GAO report that came out last year. That is how it concludes that market penetration is only 2% and that HSA account holders are much wealthier than others. The GAO report was using very old data. Its enrollment numbers were from 2006, and its wealth estimates were even older – 2005 – when HSAs were still brand new. Further, it measured "wealth" by comparing HSA account holders to all tax filers, including the uninsured, people on Medicaid, people in the military, etc. Honest researchers would not have relied exclusively on this information, especially when much more robust and contemporary data is readily available. Continue reading Another Bad Study →

Physicians

Bossed to Death

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This is Jane Orient, MD, of Tucson, Arizona and head of Association of American Physicians and Surgeons, responding to the Cato report described here:

So just who should be my boss? What credentials? What oversight of the boss? Who gets sued if there's a problem?

The "project manager" in cases like Mr. Kling's used to be called "doctor." Seeing to all those details used to be my job when I was the attending internist rounding on my private patients in the hospital, calling the consultants but doing all the medical work outside of the specialty procedures, always looking for trouble. Continue reading Bossed to Death →

Health Insurance

Health Affairs Slams CDHC

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Jamie Robinson and Paul Ginsburg have paired up in Health Affairs to take another shot at consumer driven health care. This is one of the most peculiar articles I’ve read on the subject. You can tell which author wrote which part of the piece. Ginsburg (Center for Health System Change) has long been a skeptic who is willing to look at the evidence. Jamie Robinson (UC Berkeley), on the other hand, has been consistently foaming-at-the-mouth hostile. About a year and a half ago he gave a speech to the Consumer Driven Summit where he declared the death of consumer driven health care (CDHC) in favor of what he termed “managed consumerism.” He had a list of about ten particulars, but as we wrote at the time, he was wrong on every single one. He just hadn’t bothered to look at the evidence. Continue reading Health Affairs Slams CDHC →

Health Alerts

Insurance Without the Insurance Company

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The following is from an anonymous reader.

We used to have major medical insurance, which cost us about $3,300 a year with a annual deductible of $5,000. Six years ago when I had emergency surgery, the ER of the hospital that is covered by our insurance was closed so my doctor sent us to a different hospital. That hospital didn't like what our insurance paid for "fair and reasonable" so we were left with the remainder of the bill on top of our $5,000 deductible. Ouch! That almost did us in AND the hospital wasn't all warm and cozy about working out payments.

It was then that we started looking elsewhere because we felt the insurance was messed up and we couldn't even make decent medical decisions. Not to mention that when we came up for renewal I was now high risk with a higher premium because of my ectopic pregnancy.

We decided to join Samaritan Ministries (http://www.samaritanministries.org/ ). It is an organization where Christians share each other's medical bills and the bills are paid in cash. It isn't insurance. Continue reading Insurance Without the Insurance Company →

Health Alerts

CIGNA Announces New Study Results

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CIGNA reports that its consumer driven plans "reduced medical cost trend by 13 percent relative to HMO and PPO plans, even as individuals enrolled in CDHPs use more preventive services and comply with their medical treatments."  The study covered medical claims for 440,000, including 22,000 individuals who have either hypertension or diabetes.

  • Cost trend was reduced by 20% for people with diabetes and 18% for people with hypertension, compared to people with the same conditions in non-CDHP plans.
  • Overall medical trend was down by 3.3%, compared to an increase of 10.6% for HMO and PPO enrollees.
  • Pharmacy costs for new enrollees were 10% lower;
  • Yet preventive care visits were 8% higher for CDHP enrollees and 15% higher for renewing CDHP enrollees.