Elisabeth Rosenthal at NY Times Does it Again–Egregious Doctor Billing Practices

New York Times reporter Elisabeth Rosenthal has written another eye-opening article in this past Sunday’s edition. The article entitled, “After Surgery, Surprise $117,000 Medical Bill from Doctor He Didn’t Know,” documents the duplicitous billing habits of some physicians who act as ‘assistants.’

In surgery or in a procedure, a doctor may use another doctor to ‘help out’ or ‘assist.’  That additional doctor will often bill for the full surgery or procedure as well and to make matters worse—that ‘assisting’ physician could be out-of-network, resulting in charges of tens-of-thousands of dollars.  Often, a doctor may use a physician’s assistant to work alongside him or her during a procedure (holding back retractors, doing some of the suturing, etc), however, often the fees for a physician’s assistant will be included in the overall surgeon’s fee.  Using another doctor to assist rather than a less expensive physician’s assist seems to have become more commonplace.

I will tell you in Compass’ experience, we have even encountered out-of-network physician’s assistants trying to recoup excess fees from our members.  Five years ago, Compass had a member who was being billed an additional $25,000 by an out-of-network physician’s assistant for a breast cancer surgery.  Compass fought those charges, arguing that the physician’s assistant should have been paid as part of the overall surgeon’s  fees.  When Compass contacted the surgeon, his office claimed that they did not even know that the physician’s assistant was charging extra—and they were pretty upset about it and contacted the physician’s assistant directly themselves as well.

The article by Elisabeth Rosenthal goes on to discuss ‘consults’ by doctors, physical therapists and occupational therapists who see patients during their stay.  Many of these consults are very short, add little value and according to the article, sometimes the operating surgeon doesn’t even want them, but they are encouraged by the hospital.  However, these consults—again often by out-of-network doctors—result in additional bills and fees that amount to thousands of dollars.

What does this mean for healthcare consumers and employee benefits professionals?

  • Being a passive patient in a hospital can result in excess visits by doctors and other healthcare providers that could end up being very expensive and wasteful.
  • ‘Speaking up,’ asking questions and questioning the utility of consultations is not unwarranted and ASK if the provider is in-network and if they are not, complain to the head doctor, the hospital and the insurance company.  As the article points out, you can fight and/or prevent these charges.
  • If you are an employee benefits professional, analyze your claims data for the number and cost of ‘assistants’ and consultations during hospitalizations.  You will be able to identify providers who are the ‘worst offenders’ and then steer employees away from these providers to more ‘rational’ ones.

To learn more about the disconnect between cost and quality in healthcare, click on the link below:



Hospital Mergers Blocked by Federal Government

The New York Times has an interesting article in its September 18th, 2014 issue by Robert Pear entitled, “F.T.C. Wary of Mergers by Hospitals.”

In summary, the article describes how the Federal Trade Commission (F.T.C) has blocked the mergers of hospitals in three separate instances—once in Rockford, IL, once in Toledo, OH and once in Albany, GA.—and the merger of a hospital and large physician group in Idaho.  The F.T.C. has claimed these hospitals have broken anti-trust laws.  Here are some other points from the article:

  • Hospital mergers can result in prices rising by as much as 40% to 50% because of increased bargaining power with insurers and limited competition
  • Hospitals claim that their motivation for merging is to better coordinate care in response to mandates by the Affordable Care Act (ACA, Obamacare)
  • The F.T.C. believes that care can be coordinated better without hospitals having to merge and that ‘compliance’ with the Affordable Care Act does not allow hospitals to break anti-trust law.

It is unknown if these four blocked healthcare provider mergers will be enough of a deterrent to stop or slow down other provider mergers.

Consolidation is typically a sign of industry distress.  When the insurance industry was under pressure in the 1980s and 1990s—there was consolidation.  In the pharmaceutical industry with many blockbuster brand name medications coming off patent and becoming generic—there is consolidation.  In the airline industry with rising jet fuel prices and fierce competition to lower fares—there is consolidation.  When times are good and the money is flowing, companies want to make it on their own.  But when times get tight, companies tend to ‘circle the wagons.’

This is just my opinion—and I could be wrong—but this provider consolidation is not bad per se.  In many ways, healthcare has been and still is a cottage industry.  Healthcare is very complex and the vertical and horizontal integration of healthcare may lead to more effective delivery of those services.  Think large, integrated grocery store chain vs. mom-and-pop corner grocery store: more choices, superior selection, better hours, clean, convenient.  The key is that consumers still have a choice and they can vote with their feet so that there is not consolidation for the sake of abuse of the customer, but rather to better serve the customer.

The ‘voting-with-your-feet’ part keeps things honest.

Now some people will say, ‘You cannot shop for healthcare.  It’s too complicated.  The stakes are too high.”  I would beg to differ.  We shop for things that are complicated with high stakes in other aspects of our lives.

We shop for homes.  I don’t know anything about home construction.  It’s the largest purchase I will ever make. We shop for accounting services.  I don’t know tax law.  If it is done incorrectly, I could go to jail. We shop for A/C repairs.  I don’t know how an air conditioner works.  In Texas in the summer, a non-functioning air conditioner makes your house almost uninhabitable.

So my humble opinion would be that Consolidation + Choice = Better Healthcare.

As in most things, the key is striking the right balance.

To learn how to give employees Choice in healthcare with Compass, click on the 5-min video below.






Great Stats on Malpractice and Defensive Medicine

There is an informative article in the August 2014 issue of the Cleveland Clinic Journal of Medicine entitled, “ Better care is the best defense : High-value clinical practice vs. defensive medicine.”  This article by Lois Snyder Sulmasy and Seven Weinberger contains some interesting statistic around malpractice lawsuits:

  • 69% of surveyed Neurosurgeons agree with the statement, “I view every patient as a potential lawsuit.”
  • $210B of the $765B of annual healthcare WASTE is thought to be from unnecessary tests and procedures—that’s 8% of total healthcare spending.
  • Of those unnecessary tests and procedures, 76% of doctors says that fear of malpractice lawsuits is the major cause of that wasteful care.
  • 72% of surveyed Neurosurgeons said they ordered imaging tests (e.g. MRIs, CT scans) “solely to minimize the risk of a lawsuit.”

However…

  • Only 5% of malpractice claims go to trial and 90% of those claims are won by the physician.
  • For Internists and Internal Medicine Sub-Specialists (e.g. gastroenterologists, cardiologists), only 2.7% of malpractice claims go to trial.

So, if defensive medicine is a major driver of unnecessary tests and procedures that amount to 8% of healthcare spending in America—and similarly 8% of an employer’s health plan…what should be done about it?

The article provides some useful insights here as well:

  • The actual cause of lawsuits is typically patient dissatisfaction with ‘physician communication and interpersonal skills.’
  • 79% of surveyed physicians strongly or moderately agree with the statement, ‘physicians should adhere to clinical guidelines that discourage the use of interventions that have a small proven advantage over standard interventions but cost much more.’

Some potential takeaways from those insights are: (1) physicians can more effectively practice ‘defensive medicine’ by communicating better with their patients than by ordering more tests—sounds like constructive defensive medicine to me—and (2) increased promotion of clinical guidelines and adherence to those guidelines may be the ‘security blanket’ doctors need to NOT order tests for the sake of protecting themselves.

What does this mean for employee benefits professionals and healthcare consumers?

  • A significant minority (8%) of what is spent by healthcare consumers and by employer-sponsored health plans on healthcare is WASTE generated by defensive medicine practiced by doctors scared of lawsuits.
  • A way to fix that problem is for employers to steer employees to doctors that follow clinical guidelines—these doctors have already figured out how to effectively treat their patients AND not be sued.

Click on the link below to learn how Compass helps people specifically with primary care physicians.


Healthcare Price-Transparency: Healthcare Vocabulary Word of the Day—Iatrogenesis

Iatrogenesis is a harmful effect or result from a medical test, procedure or treatment.  Iatrogenesis is a big problem in American healthcare.  The Institute of Medicine Report ‘To Err is Human’ stated that at least 44,000 people die every year in hospitals from medical errors that could have been prevented.  Click here to access the report:
To Err is Human: Building a Safer Health System

Even if there are no errors in medical care, just care itself can be potentially hazardous.  In the case of CT scans, the x-ray radiation from the scan itself may increase the risk of cancer.  In response to this increased risk, the Food and Drug Administration has issued the ‘Initiative to Reduce Unnecessary Radiation Exposure from Medical Imaging.’  This initiative reports that exposure to x-ray radiation has doubled in America in the last 20 years specifically because of medical imaging.  It goes on to report that 67 million CT scans were performed in the U.S. in 2006 and one study suggests that 29,000 future cancers could be related to CT scans performed in 2007.  Click here to read the full FDA report:
Radiation-Emitting Products

Iatrogenesis has been around since the beginning of medicine itself.  That is why a central line from the Hippocratic Oath in Ancient Greece is “First Do No Harm.”

So what is a healthcare consumer to do to avoid Iatrogenesis?

  • Ask your doctor if the test, procedure or medication is really necessary
  • Get a second opinion from another physician
  • Do your homework—look online yourself.  The Mayo Clinic has excellent information on the internet.  Just type into your search engine (Google, Yahoo, etc) whatever your medical issue is and then ‘, Mayo Clinic’ and you will get loads of information from one of the best medical systems in America on the subject.
  • Don’t Overreact and not seek medical care at all—it is important to still be rational in the face of iatrogenesis

When it comes to medical care—often Less is More.

To learn how Compass helps employees better navigate the healthcare system to avoid iatrogenesis (and financial iatrogenesis), click on the link below.




Hospitals Buy Physician Practices; Prices Rise 240%

There is an interesting article in the August 10th, 2014 issue of Medical Economics magazine entitled, “Lopsided Value: Why cost may ‘level the playing field’ for independent, office-based physicians.”

The article by Tammy Worth describes how when a hospital system buys a physician practice, the hospital can then consider the doctor’s office part of their ‘outpatient’ facility and therefore, charge a facility fee in addition to the doctor’s professional fee.  This holds true for when the hospital bills Medicare or private insurance carriers.

As an example, the article states how an EKG at a doctor’s office cost $188 before it was bought by a hospital.  However, if that same EKG is billed as an ‘outpatient’ hospital service, it costs $452.89—2 times more.  The EKG costs more in the second scenario because of that additional facility fee that is added.

In another example, an office visit for a complex new patient appointment costs $200 at an physician practice NOT owned by a hospital.  However, if the hospital buys the practice and charges the additional facility fee, the price goes up to $340—170% more.

Medicare and private insurance carriers have been slow to adjust their reimbursements, so as of now, they are just paying these higher fees.

What does this mean to employee benefits professionals and healthcare consumers?

  • If you do nothing to your plan, your costs will go up because the provider community is consolidating and using that consolidation to charge more.  Even if your population does not use more medical services, your costs will go up because the cost per service is going up.
  • If you are a healthcare consumer and are going to a doctor’s office that is owned by a hospital, expect an additional facility charge and find out how much it will be in advance.  It could double the price of your medical care and if you like, vote with your feet and go elsewhere.

Click on the link below to watch a 30 min webinar by me on how cost and quality do not necessarily correlate in healthcare.  That lower cost doctor may be the same or higher quality.






NY Times Reports: Insurance Exchange Renewals May Have Problems

The New York Times has a helpful article regarding Obamacare health insurance exchange renewals.  The article is entitled, “Health Law Has Caveat on Renewal of Coverage.”

The Affordable Care Act Federal Exchange will have its first renewal period this year.  The renewals will be passive—meaning that if a member does nothing, in most cases they will stay on their current plan.  If they want to change plans, they can as well.  The Open Enrollment Period start on November 15, 2014 and runs for three months.

But there are a few problems:

#1  According to the article, subsidy tax credits “are affected by the premium cost for a benchmark “silver” policy and could change even if a person has the same income and the same health plan next year, experts say.”

#2  Also according to the article, “The federal exchange does not have accurate enrollment and payment records for some consumers because the “back end” of the computer system for HealthCare.gov, which keeps such data, has not been completed. As a result, the government and insurers have records that can differ on who is enrolled, the dates of coverage and demographic factors used to calculate premiums and tax credits.”

#3 As a result of #2 above, if a person has not paid their health insurance premium and the insurance company canceled their policy, that information does not ‘flow over’ to the Federal Exchange and the Federal Government’s records.  The person may then receive a notice from the Federal Government stating that their coverage has automatically renewed for 2015 (because the Government thinks the person is paying), when in fact their coverage has been terminated and will NOT automatically renew.

I thought that article was clear in presenting some administrative gaps that will directly affect healthcare consumers and is good for them to know about.  Now, how big of a problem is this?  I don’t know.  Maybe it won’t be a big deal.  Maybe the premiums won’t change that much.  Maybe insurance company systems not ‘talking’ to Healthcare.gov is not a big deal.  Maybe a person thinking they have coverage when in fact they do not, is not a big deal.  It’s unclear.  People think they have coverage all the time when in fact they do not with employer-sponsored health plans (e.g. haven’t been at the job log enough, spouse did not correctly add them to the policy, etc).

The healthcare consumer will just go to the doctor’s office and present their insurance card.  The doctor’s office will check with the insurance company for eligibility and the insurance company will indicated that the person does not have insurance.  This verification process may happen during the visit or after the person has already left, so they will get balanced billed in the mail 30 days later by the doctor.  The person will think this is an error and not pay the bill because they received a notice from the Federal Government stating they DO have insurance.  The doctor will write off the balance to a collection agency.  The doctor will not get paid and the healthcare consumer may have damage to their credit.

So it could be a mess, but we will have to wait and see.

What does this mean for employee benefits professionals and healthcare consumers?

  • It may be a bumpy road in 2015 for healthcare consumers that have ‘exchange insurance’ and more ‘bugs’ get worked out.
  • Employers that want to put their employees on the Federal Exchange should know that this administrative risk exists for employees.
  • Healthcare consumers should expect some confusion, keep calm, gather the facts and persistently follow up with their doctor, insurance company and the Federal Exchange to ‘get to the bottom’ of any issue they may be having.

It has always been a confusing world for a healthcare consumer.  It appears that it will stay that way for the near future.

Click on the link below to see how Compass helps healthcare consumers navigate the healthcare system.



What Keeps You Up at Night… HR/Consultant/Broker as Population Health Manager?

A goal of this blog is to educate HR, benefit consultants and insurance brokers on healthcare consumerism… from a doctor’s and former hospital finance consultant’s perspective.

My goal is to give you the insider’s perspective on providers, patients, health and disease.

You are a population health manager.

If you work in HR, are a benefits consultant or are an insurance broker, YOU are a population health manager.  You are responsible for the health of a group of individuals and the financial implications of that group’s health.  Now, you don’t do it alone.  You have partners: healthcare providers, insurance carriers, PBMs and other vendors (wellness, Compass, etc.).  However, ultimately you are in charge of making all these partners work together to improve health in a financially responsible manner.

So… if I was in YOUR shoes, what would keep me up at night?

#1 Sudden Medical Catastrophe 

Sudden heart attacks.  Ruptured appendicitis.  Rapid onset leukemia.  Some of these things you can reduce the risk of… others you cannot.  Probably the biggest bucket of sudden medical catastrophe you can reduce the risk of is cardiovascular catastrophe—i.e. heart attack and stroke.  How would I do this?  Every person needs an annual checkup with a PCP who will perform the appropriate screenings/interventions which are (1) BMI measurement (2) blood pressure (3) blood glucose (4) lipids and (5) smoking cessation/nicotine replacement.

For the rest of sudden medical catastrophe… well, that’s why you have insurance and the on-going care for those catastrophes falls into the buckets below.

#2 Not-So-Wise Choices by my population’s members

Poor lifestyle habits.  Being a passive, ‘I’ve-got-a-blank-check’ healthcare consumer.

A poll of employees found that 1/3 of employees are engaged at work, 1/3 are ‘checked-out’ and 1/3 actively despise their employer (Click Here for Forbes article on it).  That means 2/3 of a company’s employees are not interested in hearing what their employer has to say about their own personal health choices.  So rather than trying to cajole the people in your population, give them choices.

How would I promote wise choices by my population’s members?  Give them a consumer-directed health plan and let their own choices impact their wallet or pocketbooks.  Next, give them tools.  Being an active, competent healthcare consumer is hard.  Give them price and quality information about doctors and hospitals.  Give them online and real-live-people resources.  Now, this is my own personal bias because I think the most respectful way to treat people is as the grown-up, responsible adults that they are and not to feed into a cycle of dependence and victimization.  But that is my own bias and your own organization’s culture will need to drive much of how you treat people.

#3 Not-so-Wise Choices by healthcare providers taking care of my population’s members

Burnout/Mental laziness.  Practicing defensive medicine.  Taking care of one small part of a patient’s health and not treating the whole person.

As this blog has previously reported HALF of all physicians report being Burnt Out.  50%.  That burnout often manifests itself as not applying the mental diligence that he or she should.  The doctor looks at their schedule—Yikes 30 patients!  Just have to churn-and-burn to get through the day.

Ordering too many tests or referring to too many subspecialists just to ‘cover yourself’ legally.  Practicing defensive medicine has not been shown to reduce lawsuits for physicians.  What actually increases the risk of a lawsuit is the patient feeling like the doctor does not care about them or did not give them enough time.  Tests don’t reduce lawsuits.  A positive therapeutic relationship between doctor and patient reduces lawsuits.

How would I avoid healthcare providers that make not-so-wise choices?  Analyze the data—My own data, the insurance carrier’s data, government agency data, private organization data—to determine who are the wise and not-so-wise providers and then guide my population to the wise providers.  What does a wise provider look like?  They follow recommended guidelines.  They have established processes of care within their own practices or health systems.  You don’t need to necessarily look at outcomes.  You can look at the data to measure adherence to evidence-based medicine and processes of care.  Then use plan design, personal healthcare concierge, online resources to guide your population to those providers.

So if I were in your shoes, that’s what would keep me up at night: 1) medical catastrophe, 2) poor health plan member choices and 3) poor provider choices.

Rome was not built in a day and neither was the ideal health plan, but you can start by systematically addressing each of these three areas.

Click on the link below to watch a 30-min webinar by me on healthcare cost and quality—key components of the above issues.




JAMA Reports on Top 4 Drivers of Healthcare Cost Inflation in US

In a landmark article in the November 13, 2013 issue of the Journal of the American Medical Association (JAMA) entitled ‘The Anatomy of Healthcare in the United States’, author Hamilton Moses III and colleagues list the TOP 4 DRIVERS OF RISING HEALTHCARE COST in the US since 2000.

Those Top 4 Drivers are:

1)     Administrative costs (5.6%/year, mainly health insurance costs)

2)     The price of healthcare services (4.2%/year, especially hospital charges)

3)     The price of drugs and medical devices (4%/year)

4)     The price of professional services (3.6%/year, doctor fees and other healthcare professionals)

Interestingly, demand for healthcare services and the aging of the population have NOT significantly contributed to the increase in healthcare costs.

Healthcare costs have a very simple equation.  Healthcare costs = (the number of units of care) X (the price per unit)

So, according to this article, the number of units has not gone up (i.e. demand for healthcare services), but rather THE PRICE PER UNIT has gone up and driven the rise in healthcare costs. While health insurance administrative costs represent the single largest driver, 3 out of the other 4 drivers are a result of healthcare providers themselves (providers are the conduit through which drugs and devices are sold).

So, what are the implications for employee benefits professionals and their employees?

The ‘lower hanging fruit’ in the high cost of your employee benefits plan or your own out-of-pocket cost is not going to the doctor less, taking less medication, or using fewer medical services, but rather finding those services at a lower price.  There are various strategies to encourage employees to find lower prices including consumer-directed health plans, consumer tools, referenced-based pricing plan designs, and direct contracting with providers for lower prices (a la Wal-Mart and Lowe’s for joint replacements).

This is a first in a series of blog posts on this JAMA article that is really packed full of great statistics and I highly encourage you to check it out.  Here is another link to it as well: http://jama.jamanetwork.com/article.aspx?articleID=1769890

Click on the link below to view a 30 min webinar by me on the disconnect between cost and quality in healthcare—i.e. higher cost does not necessarily mean higher quality care.









Bending the Cost Curve: Dr. Bricker Magazine Interview

I had the honor of being interviewed for an article in Texas CEO Magazine about a month ago.  The article entitled, Bending the Benefits Cost Curve: How Compass Professional Health Services Chief Medical Officer Eric Bricker, MD is Disrupting the Status Quo for Employers Healthcare Costs, was just released earlier this week.

Below are some highlights from the article:

  • The Cadillac Tax in Obamacare will be a 40% excise tax that is expected to affect up to 60% of employers in 2018 when it goes into effect according to a Towers Watson study
  • Hospitals lose money on their Medicare patients-on average 5% per patient and Obamacare calls for hospital reimbursement by Medicare to go down even more.
  • Hospitals ‘cross-subsidize’ their Medicare losses by overcharging those with employer-based, private insurance—shifting costs to employer and employees
  • The ‘hard line in the sand’ of the Cadillac tax combined with (1) higher healthcare costs for employers accelerated by (2) decreasing Medicare payments is causing employers to adopt cost-containment strategies such a consumerism.

The article goes on to discuss how Compass Professional Health Services supports employers and employees with the price and quality transparency needed to make the culture-shift to a consumer directed health plan.

Click on the link below to watch a 5-min video by me that includes a similar summary:





Healthcare Price-Transparency: Top 5 Specialty Pharmacy Drugs

According to a Benefits Pro Magazine article, the top 5 specialty pharmacy drugs are:

  1. Remicade (generic name Infliximab—although no generic version is available), primarily used to treat Crohn’s Disease and Ulcerative Colitis, it can also be used to treat rheumatologic diseases such as Rheumatoid arthritis.  It is only available by infusion administered at a doctor’s office, hospital or other healthcare facility.
  2. Enbrel (generic name Etanercept—although no generic version is available), primarily used to treat Rheumatoid Arthritis and other rheumatologic diseases (such as psoriatic arthritis), but can also be used to treat Crohn’s Disease and Ulcerative Colitis.  It is administered by self-injection at home.
  3. Humira (generic name Adalimumab—although no generic version is available), primarily used to treat Rheumatoid Arthritis and other rheumatologic diseases (such as psoriatic arthritis), but can also be used to treat Crohn’s Disease and Ulcerative Colitis.  It is administered by self-injection at home.
  4. Avastin (generic name Bevacizumab—although no generic version is available), primarily used to treat lung, colon, renal (kidney) and brain cancers.  It is only available by infusion administered at a doctor’s office, hospital or other healthcare facility.
  5. Rituxan (generic name Rituximab—although no generic version is available), primarily used to treat leukemia and lymphoma and some rheumatologic diseases.  It is only available by infusion administered at a doctor’s office, hospital or other healthcare facility.

Read the full Benefits Pro article here: Top selling specialty pharmacy drugs

When employers are reviewing their medical claims, it is important to note that specialty pharmacy costs can be found in both pharmacy and medical claims.  So when measuring total spend on these types of drugs, it is important to look in both places.

Click on the link below to view a webinar by me on strategies employers can use to lower their prescription drug costs.