Price-posting: Oh Look! Another Healthcare Cost “Solution” Gimmick.

The Surgery Center of Oklahoma has been in the spotlight recently because of its decision to post all of its prices for its procedures online. This has been heralded as increasing transparency in healthcare costs and implicitly demonizes other hospitals in the area that haven’t followed suit, like traditional academic centers.

Why haven’t hospitals done this a long time ago, so the uninsured can bargain shop for their knee replacement  instead of being stuck with a huge bill they’ll have to go into bankruptcy to afford? It’s an attractive idea, especially when presented as oversimplified as it has been to the public.

In isolation, price-posting is just another market-based artifice, more zeitgeist of our accelerating entrenchment in our broken, healthcare-as-commodity model than any real solution. Nothing illustrates it better than this quote in the NYT opinion piece from the co-founder of the Surgery Center himself, “Patients are holding plane tickets to Oklahoma City and printing out our prices, and leveraging better deals in their local markets.”

HOLD UP DOC. There are a few BIG assumptions here:

1) The medical procedure you need is known to you in advance – that is, it isn’t an emergency.

2) You have the ability to pay SOMETHING ,but either don’t have insurance or lack specific coverage for the procedure, etc.

3) You are physically and mentally able to bargain shop for the healthcare you need. There are many people who need healthcare services who aren’t able to do this – people with dementia requiring long-term care, a person in a coma from a car accident, a person with a debilitating psychiatric problem – it’s not hard to bring examples to mind.

We find that what this really represents is a very specific marketing tactic to a targeted audience – mostly healthy people who need an elective surgery to improve their quality of life. Clearly a very important demographic, but it by no means representative of everyone seeking healthcare.

This approach might works for certain places, like outpatient surgery centers, because they don’t have to deal with people who can’t pay. They can throw their hands up and say, “Don’t blame us! This is a fair deal. Our prices are listed with no small print – pay or don’t receive services.” These are not hospitals – they are centers that offer specific, non-comprehensive services.

Meanwhile, other hospitals in the area, like Oklahoma University Medical Center, take care of people who can’t pay.

The NYT opinion piece basically sums the problem of healthcare costs as a lack of knowledge on the part of the consumer.  That IS a problem, but the real problem is summed up simply in one word: profit.

When there is a market-based healthcare system like there is now, we get comical (but tragic!) comparisons like the NYT piece where finding cheap airline tickets through Kayak is used as analogy to “shopping” for health care.

Anyone without a stake in the current system, any American that needs life-saving services, anyone with the presence of mind to take a step back and examine things in context will see this is just. another. tired. gimmick.

The beginning of a real solution to the healthcare cost problem requires the following steps, in order:

1) Recognize every single person’s fundamental vulnerability to disease and death.

THEN

2) Affirm healthcare as a human right, NOT a commodity that is only available to those that can afford it.

THEN

3) Change the system into an “Ultimate Public Utility” model – because it’s something that we ALL benefit from, and are (mostly) unable to predict when we will require.

THEN

4) Realize that a publicly-funded, Single Payer model – improved Medicare for everyone – is the NECESSARY BUT NOT SUFFICIENT next step.

I’ve noticed some Single Payer advocates start to falter when they present Single Payer as the ipso facto solution for every healthcare-related problem. It will not be like that. Very little will change for the average person if we just decide tomorrow to extend Medicare to cover everyone. A Single Payer system’s REAL power is providing the  ONLY framework that will allow us to collate our bloated, fragmented system into one that can be examined and systematically changed in response to population needs. More fundamentally, it is the only one in which population needs can be accurately assessed in the absence of profiteering. It will be a quicker, more centralized, more responsive system because it is structured to be resistant to conflicts of interest. The goal of a Single Payer system is to provide necessary healthcare to everyone, NOT quibble about piecemeal, temporary gimmicks like price-posting.

Grand Frowns at the VA

I’ve been on my Internal Medicine rotation at the local Veterans Association (VA) hospital. I’ve really enjoyed it – the Veterans are almost all super appreciative, friendly people and make great patients to learn from. They’re used to medical students and mostly don’t mind our repetitive and lengthy interviews and exams. In fact, many seem to enjoy being part of future doctors’ educations and often wish me good luck after I see them. Maybe it’s the culture of service and commitment to their country that the Veterans really seem to take to heart (despite the shady deeds of the US military in the name of “protecting” Americans but in reality pushing imperialism and exploiting other less powerful countries – but that’s way beyond the scope of this post!) One Veteran told me the other day, “The VA is a great place to learn! You’re going to see some really sick patients!” As morbid as that sounds, it’s true. The patients at the VA seem to have a disproportionate amount of medical complications and coexisting conditions that are generally highly predominant in the working class (and, well, all of the developed world)– COPD, heart failure, obesity, diabetes, often all at the same time. I’ve found them to be extremely trusting of and grateful to physicians and even medical students. Like many patients with complicated medical conditions affecting multiple organs, they can be shuffled from specialist to specialist. They sometimes will start explaining a medical problem only to be told by that particular doctor that they are there to manage only a certain organ system. I’ve seen them often leave appearing pretty frustrated and confused.

I feel compassion for all patients I see, but I find myself feeling extra protective towards the VA patients. They require much care and coordination and it’s no surprise the VA is an expensive system. It highlights the importance of a large, motivated, talented primary care workforce and having a single competent person overseeing the care and referral to specialists. Yet, our American healthcare system rewards specialists with more money and prestige.

Often, I’ve heard residents and fellows talk about how inefficient the VA is and how much better private hospitals are. I’m not exactly sure what experience they have with those hospitals as the other training hospital for the program is a large public tertiary care center, taking on a ton of disproportionately uninsured patients. If you qualify for the VA and choose to use this service (as I understand it, Veterans can also choose to be privately insured through a job or otherwise), you have to use only VA facilities and doctors unless the technology isn’t available at the VA, in which case they will refer you to a place that has the appropriate services. Some of the patients end up traveling hours to get to the clinic. I can’t help but think this problem would be solved if the veterans’ care extended to any hospital or doctor. If we had single payer, national health insurance.

This past Friday, the day I leave for the Students for a National Health Program summit, we had a Grand Rounds presentation from a senior staff attending about the ACA and Medicaid in Virginia! For the most part, the presentation was mostly numbers about how coverage in Virginia would change if Medicaid expansion was implemented and the state of Medicaid in Virginia. It seemed pretty nonpartisan until he began to use buzz words like “large government program” and it started to become clearer which team he was batting for. When he mentioned Delegate John O’Bannon’s position on the panel involved in deciding whether and under what conditions Medicaid expansion will occur in Virginia, it seemed pretty apparent. He said that Virginia was set to become one of the states that did not accept Medicaid expansion until “the Left” colluded to put the transportation bill in jeopardy. He did not mention how an independent economic study determined that Medicaid expansion would cost less than not expanding it, which I’ve written about in previous posts. He also didn’t mention the terms of the Medicaid expansion. I was feeling pretty irritated. I’m in a pretty vulnerable position though, since I’m interested in going into general Internal Medicine, it’s to my advantage to not do anything that would negatively stand out and might result in a bad evaluation. No one wants to hear a med student get ornery during Grand Rounds when people by and large just want to get on with their day.

But the temptation was too much. After the presentation, I couldn’t pass up the opportunity to ask a single question which I attempted to frame as diplomatically and non-confrontationally as possible. “One of the criticisms I’ve heard about Medicare and Medicaid is that as soon as they are contracted out to private insurance companies, they become more expensive. What’s going to happen with the Virginia Medicaid expansion – will it get contracted to private companies and will it become more costly then too?” He replied that whether it was more expensive was a matter of some debate (it’s not), and that the commission was trying to make certain that every person’s Medicaid was contracted out to private insurance, and that would be a very good thing. He did not elaborate why, and I didn’t think it wise to keep pressing him.

a sampling of privatized Medicare logos

 A few minutes later, as I was reviewing charts for the morning, one of the attendings in the presenter’s own department (and an attending that I had worked with!) came to the exam room I was working in and told me he thought the presenter should have included some information about Medicare Advantage (the version of Medicare that’s contracted to private insurance companies) to the presentation. He said it was proven that Medicare Advantage cost more than traditional Medicare and didn’t have any proven better outcomes, which is true. He then gestured around and said “For all the imperfections of a single payer system, it’s what we need.” Comrades! Sometimes taking a tiny risk and speaking out helps people reach out to you. I just wish he had given the Grand Rounds.

It bears mentioning how harmful it is to present biased and only partially accurate but incomplete information to groups of physicians. A senior attending is a trusted source of material, and doctors are often too busy to do primary research about every issue. Grand Rounds exists to educate with facts, not half-truths. It was an informative and well-researched presentation in many ways that happened to conveniently neglect some key data.

 When reading info about the superiority of single payer over existing systems, I am often struck by how obvious of a solution it becomes from all angles – reduction in bureaucracy, centralization of records, marketing power to bring down pharmaceutical and medical device costs, thus providing incentive for pharmaceutical companies to develop truly innovative drugs instead of  “me-too” substitutions that are guaranteed to make money, just to name a few. And when one simply steps back, how much sense could it ever make to rely on companies whose main goal is to produce profit for shareholders to reduce healthcare costs? It’s a fundamental conflict of interest. Yet, in the face of presentations like today which I’m sure are a common occurrence, physicians are given biased views and told about the bloated, complicated Medicaid system that covers millions of US citizens and costs taxpayers billions of dollars (with a special emphasis on the low provider reimbursement rates) without explaining how much more inefficient and wasteful private insurance is.

We have much work ahead of us and much misinformation to put to rest, but every day the road becomes a little clearer and the facts speak more loudly for themselves.

Role of Profit in Virginia’s Medicaid Expansion Drama

Since I last wrote about Virginia’s foot-dragging on expanding Medicaid back at the beginning of January, a number of interesting developments have taken place. Fortunately, after what can only be described as a beating with evidence, public outrage, politicking, manipulation, and extreme waste of resources, it looks like Virginia is starting to consider accepting the expansion of Medicaid and joining the ranks of such progressive states as oh, Florida.

There is a back story to why this is happening now, and why Virginia’s uber-conservatives are allowing it at all. It involves the opportunity to profit. To understand why, let’s go through a quick summary of the events of the past couple months.

When the House of Delegates and Senate worked on their budget bills, the House agreed to accept Medicaid funding only if Virginia could have authority to “reform” Medicaid, and only after a likely special session meeting. The Senate bill was slightly less strict, saying Medicaid expansion would happen without approval from the General Assembly, but that “reforms” were still necessary.

Earlier this week, McDonnell really gave us a good scare by implying that no matter what kind of reforms Washington allows Virginia to make, it was unlikely Medicaid would be expanded. He wrote a letter to the chairmen of the House and Senate budget committee on Wednesdays, including the following, “Please understand that I cannot and will not support consideration of an expansion of Medicaid in Virginia until major reforms are authorized and completed, and until we receive guarantees that the federal government’s promises to the states can be kept without increasing the immoral national debt.”  It’s worth noting that McDonnell vehemently opposed cuts to the national “defense” budget, yet the US spends, as this article very nicely elaborates, “nearly as much on military as the rest of the world combined.”

Virginia’s Democrats in the House, seeming to recognize how ridiculous this was all starting to get, started to talk about blocking the Transportation Bill if the Medicaid expansion didn’t happen*. So, yesterday, the Senate and House voted to, uh, if not exactly accept federal money and expand Medicaid, then to pave the way towards accepting it in July with the stipulation that there be major reforms to the way Medicaid is handled in Virginia. Completely and utterly confusing, I know. This article in the Richmond Times-Dispatch reported, “The budget actions give a green light to negotiations already under way between state and federal officials on flexibility in how Medicaid is administered in Virginia — from the benefits that would be provided to newly eligible participants and their share of the costs, to the eventual use of managed care for all Medicaid services to control costs.”

Aha! Virginia wants to have more flexibility to use managed care for Medicaid. Read this as : Virginia wants to contract out the administration of Medicaid to private companies, like in Florida. They want reassurance that the federal government will allow this. With Florida setting precedent earlier in the week to move forward with increased privatization of Medicaid, Virginia was able to breathe a little sigh of relief. We might get the government out of our Medicaid after all! Florida state representative Mark Pafford remarked, “Whenever you inject the profit motive into medical decision-making, there’s a tension between patients’ interests and stockholders’ interests…We haven’t seen any hard evidence that privatizing Medicaid will actually help people.” Well said. So why is the federal government allowing this?? Well, it’s giving lip service to critics like Pafford, saying that Florida has 3 years to prove that privatization provides effective coverage and keeps costs down. On Wednesday, when Florida Gov. Rick Scott announced Florida would be expanding Medicaid, he stated, “Quality healthcare services must be accessible and affordable for all, not just those in certain zip codes or tax brackets.” It’s interesting how quickly Republican governors take up the language of real health reform advocates when the opportunity presents itself to make a profit off Medicaid.

It is well-documented how privately administered Medicare Advantage programs increase costs to taxpayers and lower quality of health services delivered. These programs have wasted $283 billion dollars in taxpayer money from 1985-2012. It’s a complicated story, but just one of the ways this happened is because the programs select for the healthiest seniors, leaving the sickest, poorest, and most expensive seniors to the standard Medicare program. Private corporations that administer these programs go home with a profit; American taxpayers literally get sold out.

The always-eloquent health justice activist, pediatrician, and role-model Dr. Margaret Flowers put it best in 2011 when she wrote about privatization of publicly-funded healthcare. “Medicare and Medicaid must be left out of the discussion entirely until leadership has the courage to address the real reasons why our health care costs are rising, the toxic environment created by investor owned insurances and the profit-driven health care industry.”

*Transportation funding plans in Virginia are particularly near and dear to my heart as there was serious discussion about re-adding a toll to I-95 South effectively throwing poor, rural southern Virginia – where I am originally from – under the bus. Making the poorer areas of the state subsidize the wealthier parts is NEVER a good idea. Ultimately this didn’t make it into the transportation bill, fortunately, but it bears mention that it was McDonnell’s idea, and given his high-falutin’ talk about “morality,” it’s interesting how selectively morality can be applied.