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.

Add sentence to end.  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.






Healthcare Consumerism: Survey of Doctors Reveals Opinion about Healthcare Cost Control

A 2013 issue of Internal Medicine News contains an article that summarizes a survey of 2,438 doctors performed by researchers at the Mayo Clinic.

Some key stats from the article include:

  • Only 36% of doctors believed that individual physicians have a major responsibility in reducing health costs
  • 60% of surveyed doctors believe that Trial Lawyers bore the greatest responsibility to lower healthcare costs
  • 76% of doctors claimed to be aware of the cost of the treatments and test they recommend and 84% said that cost is important

In a commentary of these results, Dr. Ezekiel Emanuel from the University of Pennsylvania wrote, “Physicians have moved beyond denying that health care costs are a problem.  Yet, they are not quite willing to accept physicians’ primary responsibility and take action.”  Dr Emanuel adds, “Indeed, this survey suggests that in the face of this new and uncertain moment in the reform of the health care system, physicians are lapsing into the well-known, cautious, instinctual approaches humans adopt whenever confronted by uncertainty: Blame others and persevere with ‘business as ususal.’”

The original study was published in the July 23, 2013 edition of The Journal of the American Medical Association (JAMA).  Click here to read an abstract of the original article: Views of US Physicians About Controlling Health Care Costs

One take away point for employee benefits professionals is that the majority of the physician community is not mentally prepared to help employees lower healthcare costs.  The historical employer stance of having a very large network with no steerage within that network will not result lower healthcare costs.  The majority of in-network physicians will likely have a ‘it’s-not-my-responsibility-to-lower-healthcare-costs’ attitude similar to the physicians who responded to this Mayo Clinic survey.

This conclusion supports the promotion of narrow networks or value-based plan design to steer employees and their family members to that minority of high quality physicians that ARE interested in helping employees lower healthcare costs.

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.




Healthcare Price-Transparency: How to Find the CPT Code for Your Lab Test

Often to find out the specific price for lab test, also known as ‘blood work,’ you need to know the specific CPT code for the test.  CPT stands for Current Procedural Terminology.  It is a 5-digit numerical code and there is literally a CPT code for every single test and procedure in healthcare.

Often times lab tests sound the same or are very similar to each other, so finding out the CPT code for your particular lab test is very important to be able to determine the price in advance and to compare prices.

Some examples of common lab tests include:

  • Lipid Panel (for cholesterol)
  • Chem 7 or Basic Metabolic Panel (BMP, for electrolytes and glucose)
  • Complete Blood Count (CBC, for blood cell counts/anemia)
  • Urinalysis (UA, to screen for glucose in the urine, check for infection, etc)

One easy way to find the CPT code for your particular lab test is to go to the website of a major lab company, such as Quest or LabCorp, and look up the name of the test in the search box.  Often there will then be a link to a more detailed description of the test including the CPT code.  Do not be confused by the company’s unique identifier for the code—that often has letters in it and is more than 5 digits.  What you want is the CPT code with 5 digits, all numbers.

You can then use that CPT code to call around to various labs to compare prices or look up prices on an insurance website.  At Compass, we work directly with a member’s doctor’s office to determine the test and the CPT code on behalf of our members (of course we obtain HIPAA authorization first!), but just understanding the dynamics of labs and lab coding is important for all healthcare consumers.

Click below to access the Compass Overview YouTube Video:






Healthcare Price-Transparency: Is it Covered? Insurance Company Medical Policy

It is very important for healthcare consumers to know that all insurance companies have something that is referred to as a ‘Medical Policy.’  A Medical Policy is the series of guidelines that state when the insurance company will pay for a particular medical service and when it will not.  Just because a doctor orders a test or procedure, it does not mean your insurance company will pay for it.

For example, a series of breathing tests known as Pulmonary Function Tests (or PFTs) are commonly ordered by lung doctors (pulmonologists) for emphysema, asthma and a variety of other breathing problems.  In these tests, the patient breathes in different ways into a tube that is connected to a computer to measure lung function.  The Medical Policy for one large insurance company will only pay for certain parts of the PFTs and as a result, the healthcare consumer (i.e. patient) will be responsible for the rest of the charges.

Medical Policies are not consistent across insurance companies.  In the above PFT example, several other large national insurance companies pay for all parts of the PFTs.

It is also important to know that the vast majority of physicians have no idea what the insurance Medical Policy says and what the insurance company will or will not pay for—and they do not check before ordering a test or procedure.  That is up to the healthcare consumer to sort out.

So what is a healthcare consumer to do?

Before a medical test or procedure is performed by your doctor, find out the CPT code for the service.  All medical services have a 5-digit CPT code that is used for billing purposes.  The doctors him or herself may not know the CPT code, but the nurse or the office manager probably will, so ask to speak to them.  Then, before the test or procedure occurs, call your insurance company and ask if that particular CPT code is covered by your insurance ‘per the Medical Policy.’  The answer may be ‘Yes’, ‘No’ or you may require a ‘predetermination’ where the physician needs to submit documentation to the insurance company explaining the reason for the service before the service occurs.  You can also read the Medical Policy on the insurance company’s website, however it contains a lot of medical terminology/jargon and may be hard to interpret.

To learn how Compass assists employers and their employee navigate the complex world of Medical Policy, click on the 5-min YouTube video below: