Tuesday, November 6, 2007

Better Healthcare for the un-insured. Why forgo simple solutions now in favor of comprehensive reform later?

As a physician and as someone who was once un-insured, I see both sides of the healthcare coverage issue. You would think that being a physician I should have always had health insurance, but in fact I did not have insurance coverage for two years; I could not afford the high premiums and pay for my new private practice at the same time. I also had an eye opening experience when I helped an un-insured niece through a life threatening illness for which I am still paying in excess of $330,000 in medical bills. The cute little thing is worth every penny but her medical bills total would have been no more than a measly $100,000 had she been insured.
It is undeniable that having millions of uninsured Americans is morally unacceptable and financially unsustainable for many Americans. It is regrettable, however, that we are constantly trying to address this problem by waiting for drastic solutions to materialize. We neglect the many smaller scale, less costly, options available to us now. Many of these interventions cost very little when compared to the holy grail of healthcare reform, the “universal healthcare”. Most importantly, we probably could implement many of these simple measures right away and with minimal controversy. Below is an outline of some of these quick and small scale fixes that in my humble opinion deserve more attention and consideration.

  • Families spend thousands of dollars on medical bills and health insurance premiums but are often unable to tax deduct these expenses. It would be worth considering removing some of the many restrictions that preclude the tax deduction of health related expenses, knowing that it would deprive the government of highly addictive tax dollars.
  • Hospitals and doctors, like me, have a peculiar billing system. The first ground rule is that they are not allowed to charge insured patients anything beyond what their insurance dictates by contract. This is in contrast to dentists who can bill patients for whatever the insurance doesn’t cover or underpay; something that makes dental insurance obsolete in my opinion, but that’s another story. You would think that all medical bills sent to the insurance companies would therefore be for the exact amount allowed, but they rarely are. These bills often contain charges that are more (much more in case of Hospitals) than the allowable amount for the medical service rendered. A Hospital that is billing $2,750 for a service that only pays $750 (per the insurer) is only going to get paid $750. The difference between the charges on the bill and the actual money paid is called an adjustment. So why bill higher if they’re only getting a pre-set amount, you may ask. There are many reasons for this billing practice, one of them is that the insurers periodically adjust the allowable payment rates based on actual unadjusted bills, and so Hospitals and physicians try to bill the actual desired amount rather than the allowable amount. For the insured person this is a harmless exercise except for the confusion when he or she reads a copy of the bill. Most patients eventually realize that they are not paying anything beyond what their insurance allows, and so there is no harm done.
    In the case of uninsured patients this harmless billing discrepancy turns into sanctioned over-billing across the board. By law, hospitals and physicians must bill every patient equally for the same services. Therefore they must send uninsured patients the same unadjusted high bill they usually send the insurance companies. There is no adjustment to follow however, as there is no contract in place to mandate such adjustment. Ironically, the law designed to ensure equal billing is mandating inequality in billing for the uninsured. Simply put, in our previous example, the uninsured patient gets the $2,750 bill and has to pay the total amount. In comparison, the insured patient would get the $2,750 bill but the payment is only $750, as determined by the insurance company. Ironically most Americans, including politicians, are unaware of the shocking fact that there is no law on the books to protect the uninsured from this systematic over-billing. In the United States of America un-insured patients are charged much more than their insured counterparts and there is no law against it--shouldn’t this be a headline?
    The only time an adjustment is offered is when the uninsured patient requests it, and if the Hospital feels generous enough to grant it. Physician bills are much smaller compared to hospital bills but the same legal principles apply. Each doctor’s office has a policy on how to deal with bill adjustments and ride-off for the un-insured and many make provisions for such patients, but they are not obligated by law to do so. Clinics with sliding scale payments and some government sponsored partnership programs with hospitals have no such issues of over-billing.
    It would be great if presidential candidates or other politicians and activists were to show interest in tackling this simple issue of equal and fair billing for the uninsured. It would be quite reasonable to pass a law that requires hospitals and doctors not to charge the un-insured anything beyond what they expect from their best paying insurance. That would mean that the hospitals and physicians would still get to bill at the most generous rate available, and the un-insured will be spared the unfair over-billing.
  • Last but not least, there is the matter of the sky rocketing health insurance premiums. I find myself dealing with high premiums for my own employees, just like any other business. I can’t help but find it wasteful to pay the hefty premiums when most of my employees never end up needing a physician or hospital care. For my personal insurance I have a $5000 deductible insurance that has a premium of under $300 per month. That’s a total of ~$8600 per year, assuming I use up all the money set aside for the deductible. The ~$5000 I am allowed to deposit in my health saving account is totally tax deductible and I use it for my dental care, medial bills, and medication purchases, etc. Any remaining money in the health saving account carries over to the following year and it even earns interest. After depositing $5000 the first year I can either supplement it with smaller amounts the following years or deposit the maximum ~$5000 allowed each year, creating a cushion for future years. This money never goes to waste and can even be inherited.
    I considered the same insurance option for my employees but I realized that there is a constant problem and that is that most people who can not afford the high health insurance premiums can not afford to set aside $5000 for their health saving account to cover the high deductible. Without having this money set aside in reserve in the health saving account they risk having to pay for unexpected medical expenses of up to the maximum $5000 deductible out of pocket. Most employers want to help but can not afford to step in and contribute the full $5000 per employee towards their individual health saving account as that can add up to a large sum of money. This becomes a major barrier for use of this seemingly reasonable healthcare insurance option. If small businesses or businesses in general, were allowed to have a business health saving account to cover employees in lieu of individual health saving accounts then the amount of money that has to be set aside by the employer can be set to be much less and still have a large sum of money on aggregate to be used toward employee high deductibles, and still enjoy the lower premiums offered by the high deductible insurance. Businesses can accumulate money, tax free, in the business heath saving account overtime to be used for various healthcare expenses. This is yet another option that should be considered by politicians and advocates even by those who believe in working towards universal coverage.

Being a geriatrician, I deal with the US versions of government sponsored healthcare as most of my patients are insured by Medicare, Medicaid, and the VA. These programs provide universal coverage for select groups, the elderly, the poor, and the veterans. I also had first hand experience with national universal healthcare when I practiced Medicine in Eastern Europe at one point in my life.
The grass is greener on the other side, as they say, but for those involved in the healthcare industry it is no secret that countries with national universal healthcare are moving towards fee for service models to supplement their universal systems. Private healthcare in these countries is readily available and is accessed by the wealthy unsatisfied with the long waits and the inevitable rationing of healthcare resources. Rationing healthcare resources often seem very reasonable to planners and proponents of universal healthcare until these individuals are themselves the ones waiting an extra couple of months for chemotherapy or are denied expensive life saving measures. The wealthy have no such worries as they will always have the option of paying for their healthcare or traveling to wherever the needed medical care is available. They are also more likely to use their influence to improve their access to any universal healthcare system, resulting in even longer waits for the rest of the population. I also worry that expenditures on the elderly will likely be considered a second tier priority, as spending healthcare dollars on children and younger adults will most likely be considered more cost effective. Ultimately, Americans who choose universal healthcare should ask themselves if they believe that Medicaid, Medicare and the VA is the way to go for all Americans. Hopefully any major overhaul of healthcare in the USA will be a result of deliberate analysis and debate, and not just because it’s better than nothing. In the meantime, I think it’s reasonable for all sides of this debate to press forward with what little we can do for the uninsured now, even if it is done piecemeal.

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