I read an article today in Pharmaceutical Executive (read it here) in regard to healthcare costs by Peter Pitts, a former FDA official (in disclosure I work in association management for two healthcare product marketing associations).
His article noted that if you imagine American healthcare spending as a dollar bill, prescription drugs would account for 10.5 cents compared to 31.3 for hospital care and 21.9 for physician services, yet most complaints you hear about the healthcare system are directed at prescription drugs.
Why? Mostly because insurance companies have raised rates, but reduced coverage of drugs for plan participants. Pitts notes that from 1998 to 2003 insurance companies raised their premiums an average of $104.62 per person and many blamed rising drug costs for doing so, yet the increase of drug costs during the same time was $22.48.
As coverage of prescription drugs has been reduced and the burden placed on individuals to pay, more patients have become less compliant and some have stopped taking chronic medications all together. Visits to ER have increased 17% and hospital stays have increased 10%.
He also notes an Integrated Benefits Institute study shows that when employers push too much cost on employees to save money on healthcare, it actually costs them more through absenteeism and lost productivity.
Pitts solution is to not blame, but instead to emphasize prevention. He also suggests the various parties not fight one another, but instead the common enemy - disease.
I'm personally on board with blaming insurance for most of our healthcare payment problems. My company's insurance costs for me have risen significantly from 2001 through 2008 - I'm guessing off-hand by 40%, and I've footed a lot of that bill. At the end of the calendar year, healthcare cost me personally $7,250 (family of four) in 2006. This amount includes my share of the monthly premium, office co-pays and prescriptions. My prescriptions cost $10, $30 or $50 dollars every time I fill one and most are $50.
Further, at least once a year Capitol Blue Cross rejects a claim and I get a doctor's bill. Here is where the real waste comes in - insurance companies processes require staff to handle situations like this:
Most recently for service in May I got a bill in August for close to $7000.
- I called the doctors billing and was told it was rejected by my insurance.
- I called my insurance, Capitol Blue Cross, and was told they had no record. The doctor, whom we've had and been receiving treatment from for nine years, was in Philadelphia, though, and must first be submitted to Independence Blue Cross who forwards to Capitol Blue Cross. The woman at Capital took my information and said she'd call me back.
- Insurance investigates by calling Highmark Insurance.
- She called me back and said that Highmark and Independence joined and Highmark handles professionals. She called them and they told her that the doctor's office was waiting for me to provide information to them.
- I called the doctors' billing and explained what I was told.
- Doctors' billing called Highmark and was told it was rejected for more information by Highmark, who then never asked anyone for more information.
- The doctors office then called me and said they would walk Highmark through the code, happens all the time.
The amount of time that is wasted on these claims is unfathomable to me. The insurance company rejects, doesn't tell anyone, and then the program participant must call insurance company, then the doctor's office, and then back and forth it goes wasting everyone's time and money.
There are many factors impacting our healthcare and healthcare costs, but an overhaul of the insurance aspect would go a long way to fixing many problems.
6 comments:
I have had similiar Highmark Problems. I work for a company out of NJ, and my BS PPO is Horizon. Both Horizon and Highmark are the same corporate comapanies. Since I live in PA and go to PA doctors, my doctors have to submit forms to PA Highmark, who then inturn submits them into Horizon. As you can imagine, this doesnt go well always. This results in a giant kerfuffle and wastes so much time. Not to mention its fustrating.
The problem seems to me is that there is not enough competition. The market place would then quickly resolve poor performance on its own. I dont know what the answer is or how we can have more choices, but one thing i know for sure is that putting more, or any controls within the government would be a disaster.
I dont know if things will ever get much better( cost wise) since BOTH sides ( Republican and Democrats) cant be trusted anymore, and twist truths and play with numbers, and that the result public is constantly misinformed on what s really happening.
Full family Insurance, Dental, Vision, College loans, Taxes, Car & Mortgage Payments. At this point in my life its become pretty clear how America is absolutely a — Have or Have Not — society.
US Healthcare is... a not so funny joke?
"The U.S. spends more on health care, both as a proportion of gross domestic product (GDP) and on a per-capita basis, than any other nation in the world."
..yet..
Health insurance is expensive, and medical bills are overwhelmingly the most common reason for personal bankruptcy in the United States.
http://en.wikipedia.org/wiki/Health_care_in_the_United_States
Couple of interesting facts from the nation Center for Policy Analysis:
http://www.ncpa.org/~ncpa/w/w3.html
Over the past three decades, the share of private health care spending in total U.S. consumption grew at an annual rate of 1.3 percent.
The share of government health care spending in total U.S. consumption grew at three times that rate. Similar patterns exist for specific types of medical services. It can be shown that in some cases government spending has been growing at five to 10 times the rate of private spending.
Government spending (as a share of total consumption) in the hospital sector has been growing 2-1/2 times faster than private sector spending.
Government spending on doctors has been growing five times faster than private spending.
For pharmaceuticals, government spending has been growing 10 times faster than private spending.
"Health care spending rose modestly until Medicare and Medicaid were established."
1992 national health care spending was equal to $8,821 for every U.S. household. This burden was largely disguised, however:
For an average working-age family, the visible outlays in 1992 were $1,715 for out-of-pocket expenses and $574 for health insurance premiums.
These direct expenses amounted to only about one-fourth of total health care spending per family.
The remainder of the $8,821 burden was hidden in taxes and reduced wages.
"Most people have no idea how much they are contributing to the nation's health care bill."
Kind of interesting, huh?
Having worked as a claims processor many years ago while in school, here is what you are up against.
Primarily, these processors are in either high school or college and our performance is measured by how many claims we could process per hour, not if they are correct or not. There were quality checks, but they were only random samples, not every one.
If you have an issue with a claim, the best way to get the insurance companies attention is to have a letter submitted by a lawyer. The insurance company I worked for fast tracked any claim that came in with a lawyer letter as they wanted to make sure it was processed perfectly. It doesn't have to threaten a lawsuit, just ask them to resolve the issue. There was a special department that handled them and were usually processed and/or resolved in one day.
Doesn't surprise me, and I feel particularly bad for seniors who have multiple medical issues, in and out of hospitals, multiple coverages, etc.
In the end they get hit with bills that should be covered and they can't afford to pay.
The other insurance that is crippling is the insurance the doctors have to purchase to practice/protect themselves in PA.
The business of healthcare insurance is a mess and the individual is the one that gets hurt.
I agree with the earlier comment that I don't want government to take it over, that is no fix, but I would like to see them, someone, evaluate the system and recommend changes because the waste in these healthcare insurance bureaucracies is amazing.
An interesting post, and I agree with all your comments. I think one of the biggest problems today in healthcare are the preposterously high costs that go to administration of health plans, and different insurance companies arguing with each other. See this article on Medscape, about a doctor in North Carolina who has refused to deal with insurance companies, and is working strictly on $45 a visit: check it out:
http://www.medscape.com/viewarticle/561524
I think that in terms of drugs (disclosure, I do competitive intelligence and consulting for the pharma industry), the pharmaceutical industry needs to work with third-party payers of all kinds, in all countries, and prove the 'pharmacoeconomic' rationale behind their drugs (ie, the market for osteoporosis drugs in the US and Europe was about $6-8B last year, but the cost of treating osteoporotic fractures was upwards of $50B). In addition, I think pharma needs to incorporate healthcare economics in early development decisions; and I also think we need to encourage me-too drugs, because they stimulate price competition, and therefore lower prices for everyone, in addition to increasing the 'hit rate' on development programs.
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