Tuesday, June 2, 2015

Cost of Care

Today two articles covered the issues surrounding the Affordable Care Act.  The rise in insurers costs and in turn your premiums, the other the rise in hosptial costs.  So much for affordable.

This is filed under shocking and well not surprising. The supposed wealth generators of people applying for insurance was not quite what was originally anticipated and of course the costs of actually insuring and paying our for that "privilege."  I have used my Obmacare twice in two years, once at a public health clinic with adequate care and the other an urgent care walk up and that was denied as it was out of my provider network which is the public health clinic.  Care was slightly better and still referred me to a specialist which I suspected but the bill for that 15 minutes, $200.

Here are the current costs that are rising and of course they have no logic nor are tied to any substantitive explanation but I am sure the AMA can explain it as the costs of doing business.


Data Shows Large Rise in List Prices at Hospitals
By MARGOT SANGER-KATZ and KATIE THOMAS
The New York Times
JUNE 1, 2015

The prices that hospitals ask customers to pay for a series of common procedures have increased by more than 10 percent between 2011 and 2013 — more than double the rate of inflation.

But the amounts paid by Medicare, the government health care program for seniors and the disabled, has stayed flat, according to data released Monday by the federal government. The hospitals’ rising list prices mainly affect the uninsured and people who use hospitals outside their insurance network.

The information about charges and payments was part of a large release of data, representing about $62 billion in Medicare payments and more than seven million hospital discharges. The data release also included information about roughly 950,000 doctors and health care practitioners who received $90 billion in Medicare payments. Cancer and eye doctors again topped the list of high earners.

The list of doctors receiving the highest reimbursements in 2013 included two familiar names from a year earlier, both of whom are facing legal action for their billing practices.

The second-highest earner in 2013 was Dr. Asad Qamar, a Florida cardiologist who received $16 million in 2013, according to an analysis by The New York Times. In January The Times reported that he is being sued by the federal government as part of two whistle-blower lawsuits that claim he performed unnecessary surgeries.

Greg Kehoe, a lawyer for Dr. Qamar, said that his client had a large medical practice with other doctors and that he provided excellent care.

The third-highest biller was Dr. Salomon Melgen, a Florida ophthalmologist who has been indicted on Medicare fraud charges and on claims that he traded gifts and trips for political favors from Senator Robert Menendez, a New Jersey Democrat who was himself indicted on corruption charges this year. Dr. Melgen received $14.4 million from Medicare in 2013.

“Dr. Melgen stands by his record of improving the vision and quality of life of patients from around the world,” said Kirk Ogrosky, a lawyer for Dr. Melgen and partner at Arnold & Porter in Washington, who emphasized that the majority of the amount Dr. Melgen received represented the cost of drugs. “Regarding the pending cases, Dr. Melgen is not guilty of the charges that have been leveled against him, and we will speak about the cases through through our filings in court.”

The doctor who received the most from Medicare was Dr. Anne Greist, a co-founder of the Indiana Hemophilia & Thrombosis Center. She received $28 million in payments, but nearly all of that — $27.9 million — was for reimbursements for drugs. Dr. Greist could not be reached for comment; the center’s executive director, Nancy Hoard, said that she was the lead patient coordinator and the center’s most frequent prescriber. In addition, Ms. Hoard said the center was the only hemophilia treatment center in Indiana and treated a number of patients who required very expensive drugs.

Medicare’s now-annual release of the data has been helpful for academics, journalists and private companies trying to understand how the health care system works. It is the third time Medicare has released such information about hospitals, and the second time it has done so for physicians.

The overall trends shown in the data released this week did not differ substantially from that of previous years, but, taken together, they provide a useful glimpse into the health care system through the Medicare program.

Dr. Bob Kocher, a partner at the venture capital firm Venrock and a former Obama administration health care policy official, said the data was already spurring entrepreneurship in health analytics, helping to create consumer tools, rooting out fraud and enabling new research. “It’s going to be used in thousands of ways that you wouldn’t have thought of,” he said.

Most people with health insurance, including those receiving Medicare, won’t ever a see a bill for the hospital’s list price because the insurer negotiates a lower rate. But these rising charges are a growing concern for some consumers, especially those who are uninsured or seek care in a hospital that is not in their insurer’s network.

The last few years have seen an increase in the number of health insurers offering plans with limited networks of doctors and hospitals, meaning that it may be easier than ever for a patient to choose the wrong hospital and face a big bill.

The list prices are not just growing, but are substantially higher than what Medicare pays. In the case of joint replacement, the most common reason for hospitalization in the data, the average hospital charged around $54,000 in 2013. Medicare, on average, paid around $12,000.

Increasing the list price is a simple way for hospitals to increase revenues, said Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins Bloomberg School of Public Health. “They want to get more money, and the only way they can do this is to raise their prices,” he said. Even if hospitals don’t get the full amount they are charging customers, he said, raising the list price “gets them some cents on the dollar.”

The American Hospital Association asserts that the rising prices reflect the costs of running a hospital. “Over all, health care costs tend to rise higher than inflation rates,” said Caroline Steinberg, a vice president of the association. She added that Medicare, which sets its own prices, pays less than what it costs many hospitals to provide care.

The data about hospitals is limited to the 100 most common causes of hospitalization, and the three-year comparisons apply only to the 95 reasons that were on the list in all three years. The data also applies only to patients enrolled in the traditional Medicare program. Data about people insured through private plans, called Medicare Advantage, is not part of this release.

Medicare’s highest physician payments tended to go to specialists who administer expensive drugs in their offices, like oncologists, hematologists, ophthalmologists and rheumatologists. For the first time, the government separated the costs for those medications, called Part B drugs, from payments for more conventional medical care.

This information is especially valuable given the rising cost of newly approved drugs, especially those to treat cancer, said Cristina Boccuti, a senior associate at the Henry J. Kaiser Family Foundation who studies Medicare. “More visibility on Part B drugs, particularly cancer drugs, is helpful for understanding drug cost issues, which are increasingly important to Medicare.”


And on the other hand the insurers are asking for their hand to be filled. Seeking Rate Increases, Insurers Use Guesswork
By REED ABELSON
The New York Times
JUNE 1, 2015

In a sign of the tumult in the health insurance industry under the Affordable Care Act, companies are seeking wildly differing rate increases in premiums for 2016, with some as high as 85 percent, according to information released on Monday by the federal government for the 37 states using HealthCare.gov as their exchange.

The data from the Centers for Medicare and Medicaid Services included only proposed rate increases of 10 percent or more, and federal officials emphasized that it would be months before final rates were set. Regulators in some states have the authority to overrule rate increases they deem to be too high.

Experts cautioned against relying too heavily on the data as a predictor of prices for next year.
“Trying to gauge the average premium hike from just the biggest increases is like measuring the average height of the public by looking at N.B.A. players,” said Larry Levitt, an executive with the Kaiser Family Foundation.

But many insurers, including those seeking relatively hefty increases below 10 percent, say they are asking for higher premiums because they remain unsure about the future and what their medical costs will be.

Health insurers said many unknowns remained, including how many people would sign up for coverage and how healthy they would be. Credit Brendan Smialowski/Agence France-Presse — Getty Images “The insurers are in the business of taking risk, but the one thing they hate is uncertainty,” Mr. Levitt said.

Many unknowns remain. Among them are the questions of how many more people will sign up for coverage and what the state of their health will be. Healthier customers can generally lower costs for the overall group. Other uncertainties include the effect of the law’s protections against large losses for insurers, and a Supreme Court decision that will determine whether subsidies will be available in the states participating in the federal exchange.

Some of the requests for premium increases show how insurers are struggling to find the right balance between keeping their prices low enough to attract customers but high enough to cover costs — and make a profit.
In Delaware, the state’s insurance regulator said on Monday that two insurers asked for much higher rates in 2016: Highmark Blue Cross Blue Shield sought a 25 percent increase, while Aetna wanted an increase of 16 percent.

“Large rate increase requests like these are occurring in several states across the country,” said Karen Weldin Stewart, the Delaware insurance commissioner, who said she planned to try to reduce those rate requests.

In Georgia, Alliant Health Plans is seeking increases as high as 85 percent for some plans, with an average increase of 38 percent, according to the filing listed on the federal website, ratereview.healthcare.gov. The insurer declined to comment on the filing.

But there are wide variations in some states. In Maryland, for example, while CareFirst BlueCross BlueShield is seeking a 30-percent increase for some of its plans, others including Cigna, Kaiser Permanente and UnitedHealthcare are proposing to lower premiums for some plans.

Federal officials point out that consumers will have a choice of plans, just as they did last year. Many people kept their costs low by switching plans; 29 percent of those who re-enrolled picked a different policy from the previous year.

Some insurers like Anthem, one of the largest for-profit companies, say they do not expect significant increases in most markets. Most of the for-profit insurance companies have reported strong financial results, benefiting in part from the subsidies that have generated millions more paying customers.

But others say they need to adjust rates because they miscalculated their medical costs and the strength of the competition.

“Some may have been overly optimistic and some may have been pessimistic,” said Sabrina Corlette, a health insurance researcher at Georgetown University. “It’s so difficult because there are so many different factors at play.”

The HealthCare.gov website at an enrollment event in Texas earlier this year. Credit LM Otero/Associated Press In Tennessee, BlueCross BlueShield said it lost $141 million on individual policies sold on the exchange because it was paying $1.14 in medical care for every dollar in premiums. The company has requested an average rate increase of 36 percent.

Many people signing up were much sicker than the insurer expected, said Roy Vaughn, a spokesman for the Tennessee plan. “We’re trying to get it as right as we can,” he said.

In some cases, the miscalculations are causing insurers to rethink their strategy. Faced with significant losses from selling policies on the exchange, Assurant Health, a for-profit insurer that had been an aggressive participant last year, said it was looking for someone to take over its business or it would leave the market in 2016.

In Connecticut, HealthyCT, one of the consumer-oriented co-op plans created under the federal law, is requesting an average rate increase of 14 percent, after decreasing premiums for 2015.

Whether state regulators will agree to the increase request remains an open question, said Ken Lalime, the co-op’s chief executive. “I don’t know if that’s the final number we’ll end up with.”

Like many insurers, HealthyCT said it was less protected from losses as provisions of the law that were meant to encourage companies to enter the market were phased out. Insurers are also uncertain whether they are enrolling people who are sicker than customers of their competitors and whether they will be reimbursed for their higher risk.

“It’s the year of actuarial uncertainty, and actuaries are conservative,” said Dr. Martin Hickey, chairman of the National Alliance of State Health CO-OPs and the chief executive of the New Mexico exchange. “The safest thing to do is to raise rates.”

And while the companies say they have not generally seen a rapid rise in medical costs that would cause them to raise rates sharply for 2016, Mr. Lalime and other executives are quick to point to the high cost of new drugs like those used to treat hepatitis C.

Ms. Corlette and others say they believe insurers will continue to try to offer low prices, especially for midlevel plans. While insurers may not be overly optimistic that there will be a large number of additional customers signing up next year, the fact that people have switched plans may mean they can still capture market share. “It may change the incentives,” Ms. Corlette said.

As insurers gain more experience in the market, the expectation is that they will be confronted with fewer surprises. And while the Supreme Court decision is not expected to affect next year’s pricing, insurers are uncertain about that as well.

Many plans have decided to take a sit-back-and-wait posture about the case, said Richard M. Judy, a principal in PwC’s health consulting business.

“Health plans have put so much time and effort getting ready for these exchanges,” he said. “It would be a crushing blow to see that all unraveled.”


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