You are quite correct that the Insurance companies and MCR don’t allow a practitioner to waive co-pays. But if someone is cash only, I don’t think my contract with BCBS comes into play on patients not covered by those companies. I have yet to have someone with insurance try to barter their co-pay. Unfortunately the more common complaint is to try to get out of paying it at all!!! Dr. House was right. All patients lie.
[quote=Denise2257114]Before you consider an answer to that question for any form of commerce, people should know the IRS sees barter income as taxable.
http://www.irs.gov/taxtopics/tc420.html
Of course how much grey market activity gets reported is anyone’s guess. Probably not much. How one figures out fair market value is beyond me.
[/quote]
This is another good reason to abolish the IRS. The tax code full of "grey" rules. Who owes what is basically opinion. The tremendous waste of brain activity on how to legally reduce the amount of taxes owed is beyond belief. Before making a decision on any purchase, I always consider if it is (or could possibly be) business related. If it is not business related in any way, I will often not make the purchase at all.
For instance, a tax advisor once suggested that I put brochures for my business on the tables (and take pictures) whenever I have a party. This way the party can be considered a promotion for the business and therefore the costs of the party would be tax deductable.
As far as bartering is concerned, I would imagine that gets reported about as much as winning bets on ball games.
SS
You look at the financial industry as the least regulated. I disagree. The problem is that money is the most regulated of all things. We have legal tender laws and taxation that forces us as citizens to use un-sound money to prop up the financial institutions of the world. If money were not regulated, sound money would triumph and the regulating effect a sound currency would quickly stop the shenanigans by the financial industry.
You can’t correct the problem with more band-aid regulations on the financial industry until we correct the underlying root cause - manipulation of the value of currency (by either banking cartels or governments). Competition is needed in currency.
Denise, ao, jbtbga,
I apologize for dancing around the real question, but interestingly, I didn’t get a real answer to any of the questions I posed.
We should be able to agree that the current system isn’t sustainable. Regulation, insurance, and lawsuits add cost and reduce the benefit that is being sought by the patient. When these (and other) costs gum up the health care system to the point that it simply doesn’t work, we need to explore other options. That is what I’m attempting to do - explore other options.
We all know people who are chronically unemployed. The economic system needs fewer workers to produce the goods and these folks are falling through the cracks. I’ve got a few friends in their 50s and 60s who aren’t quite ready to retire, but aren’t really attractive to employers anymore. One friend jokes that he is in "pre-retirement training."
As more and more systems fail, more and more people will join the ranks of the chronically unemployed. These folks will likely be without insurance and have limited cash available. How would you advise someone in this predicament to negotiate needed medical services?
Grover
[quote=Grover]Denise, ao, jbtbga,
I apologize for dancing around the real question, but interestingly, I didn’t get a real answer to any of the questions I posed.
We should be able to agree that the current system isn’t sustainable. Regulation, insurance, and lawsuits add cost and reduce the benefit that is being sought by the patient. When these (and other) costs gum up the health care system to the point that it simply doesn’t work, we need to explore other options. That is what I’m attempting to do - explore other options.
We all know people who are chronically unemployed. The economic system needs fewer workers to produce the goods and these folks are falling through the cracks. I’ve got a few friends in their 50s and 60s who aren’t quite ready to retire, but aren’t really attractive to employers anymore. One friend jokes that he is in "pre-retirement training."
As more and more systems fail, more and more people will join the ranks of the chronically unemployed. These folks will likely be without insurance and have limited cash available. How would you advise someone in this predicament to negotiate needed medical services?
Grover
[/quote]
Grover,
For those without healthcare coverage, or with high-deductible plans and an HSA (health savings account), I would recommend trying to negotiate prices. When I was in a private practice, as I have been for much of my career, I did this repeatedly in the past. It would be much more difficult to negotiate costs with an employed physician, particularly one who is hospital-employed, as I am now.
For primary care needs, seek out a family practice or internal medicine physician who is willing to take self-pay patients, and make an appointment with the physician and/or practice manager to discuss costs, payment options, etc. Explain fully and honestly your situation, your intention to pay for services rendered, and discuss possible discounted price options in exchange for cash up front as opposed to having to file insurance paperwork. In a few markets, there are dedicated practices that entirely or partially cash-based, and those would definitely be worth checking out, if available.
For procedures which will require any amount of hospital exposure, the availability to negotiate is much more limited, but not absent. Ambulatory surgical facilities will generally be less expensive than full service hospitals, and usually more open to negotiated services. Dedicated speciallty hospitals (heart hospitals, etc.) will also usually have more flexibility with regard to pricing. Similarly, for imaging needs, free standing imaging centers will usually be cheaper and more open to price negotiation than full service hospitals.
If financial means allow it, I strongly recommend a high-deductible (catastrophic) healthcare plan and self-funded HSA.
Christopher
Christopher,Thanks for responding to my question. You provided sound advice that I can relate to my friends. I have some thoughts below, and I ask some questions, but I really don’t expect an answer.
I was watching a rerun of a '70s TV show on one of the local over-the-air stations on Friday. The advertisements generally fell into 3 categories - for profit higher education, pharmaceuticals to cure a malady, and lawyers who want to sue the doctors/hospitals/drug manufacturers/etc. for prescribing yesteryear’s promising drugs/procedures. It reminded me of why the medical system is as expensive as it is. Doctors have incredible expenses and have to pass those on to the consumer or they go bankrupt. Because expenses are so high, people need to have insurance to help pay the costs. Because their health insurance premiums are so high, they want to get more than their money’s worth and demand more services and perfect accountability. When things go awry, the blood sucking lawyers swoop in to ensure "your right to financial compensation." The threat of lawsuits increases the cost of medical products. Wash -> rinse -> repeat.
This spiral cannot continue forever. As energy becomes constrained, systems will have to become simpler or they will simply vanish - to be replaced by simpler systems. The groups who profit from the economic friction (regulators, lawyers, insurers, etc.) will not want to see their fortunes disappear. They will fight an ultimately losing battle to maintain the need for their services.
I don’t expect the next few decades to resemble the future vision being sold to the populace. If you’re purchasing insurance to protect yourself in a future that likely will not exist, is it worth getting? Wouldn’t it be better to simplify ahead of the herd and invest the insurance premiums in PMs, land, or tools? I frequently wrestle with this question and the potential consequences.
As long as the music is playing, we have to keep dancing.
Grover
[quote=Grover]Christopher,
Thanks for responding to my question. You provided sound advice that I can relate to my friends. I have some thoughts below, and I ask some questions, but I really don’t expect an answer.
I was watching a rerun of a '70s TV show on one of the local over-the-air stations on Friday. The advertisements generally fell into 3 categories - for profit higher education, pharmaceuticals to cure a malady, and lawyers who want to sue the doctors/hospitals/drug manufacturers/etc. for prescribing yesteryear’s promising drugs/procedures. It reminded me of why the medical system is as expensive as it is. Doctors have incredible expenses and have to pass those on to the consumer or they go bankrupt. Because expenses are so high, people need to have insurance to help pay the costs. Because their health insurance premiums are so high, they want to get more than their money’s worth and demand more services and perfect accountability. When things go awry, the blood sucking lawyers swoop in to ensure "your right to financial compensation." The threat of lawsuits increases the cost of medical products. Wash -> rinse -> repeat.
This spiral cannot continue forever. As energy becomes constrained, systems will have to become simpler or they will simply vanish - to be replaced by simpler systems. The groups who profit from the economic friction (regulators, lawyers, insurers, etc.) will not want to see their fortunes disappear. They will fight an ultimately losing battle to maintain the need for their services.
I don’t expect the next few decades to resemble the future vision being sold to the populace. If you’re purchasing insurance to protect yourself in a future that likely will not exist, is it worth getting? Wouldn’t it be better to simplify ahead of the herd and invest the insurance premiums in PMs, land, or tools? I frequently wrestle with this question and the potential consequences.
As long as the music is playing, we have to keep dancing.
Grover
[/quote]
Grover,
There is absolutely no way that our current healthcare system can continue for much longer. Even if our monetary system doesn’t go belly up, I’d give our current healthcare system no more than 10-20 years; if/when our monetary sytstem does go belly up, our healthcare system will end even more quickly. Everyone involved in the healthcare system, to include physicians, have a vested interest in maintaining the current system for as long as possible, as the change that is needed will be very disruptive (although ultimately beneficial). Not only is their tremendous friction within the system, as you note, but their is incredible friction opposing any meaningful reform.
Personally, I think that a high-deductible healthcare plan, paired with an HSA, still makes sense. If, at some point in the future, when things truly begin to unravel, that may change. For now, though, for most people, a high-deductible healthcare plan/HSA is a prudent move. For someone who is relatively young and in good health, and without a worrisome family medical history, "going bare" is not a bad idea. Even without a high-deductible healthcare plan, an HSA still might be worth considering. An HSA is like an IRA, taken from pretax income, and used for covered healthcare needs as they arise (to include prescriptions, dental work, optometry, etc.). Any unused amount is rolled over year to year, and any remaining at the age of retirement can also be used for retirement needs.
Christopher
"how much of the health care system is friction?"
Oh - about 60% - 80%
When you consider everything already discussed, malpractice, insurance "profits", haze created by insurance companies to decrease provider payment - decrease competition - increase premiums, let’s not forget rules concerning "not" discounting fees lest Medicare fines providers, etc. etc. etc. I’d say about 60 - 80 cents of every "healthcare" dollar is pure "friction."
Now, I believe that when someone says, "single payer system" they don’t mean a system that looks anything like the blood-sucking system that we have today.
While many of my colleagues probably have not considered this, physicians are one of the most protected entities in any market, resulting in a huge amount of friction compared to what a truly free market would allow. Medical schools are limited and defined by goverment and professional agencies, especially the AMA. Residencies and fellowships are similarly limited, with prescribed numbers of positions in order to limit competition in crowded fields and (sometimes) to promote entry into fields that are less well served. Physicians are examined at various levels in their training by government and professional associations, then licensed by individual states.
Admittedly, many would find this degree of examination, licensing, etc., comforting, and to some degree, it certainly is. But, it still entails a huge amount of friction in limiting competition, driving up salaries, etc.
Most of the medical fields are understaffed already, particularly in less urban markets, and are headed for profound shortfalls given the progressively aging demographics. So, added to the friction already noted, we will be faced with one of the greatest sources of friction in the coming couple of decades, a bottleneck due to provider shortages.
Christopher,
Looking at the numbers the government puts out on Medicare/Medicaid, I would agree with you. Knowing how many unjustified assumptions are included in those numbers, I think you are quite the optimist. What kind of system do you envision as being sustainable? If the social fabric ruptures and chaos ensues, will it still work?
I don’t know much about HSAs, but have to generally concur with this advice. I carry high deductibles on other forms of insurance and it limits my claims to catastrophic events only. Because I have higher initial costs, I question the need to file a claim and look for alternate remedies. That just makes economic sense. Why wouldn’t it work the same with health care?
Grover
[quote=RNcarl]"how much of the health care system is friction?"
Oh - about 60% - 80%
When you consider everything already discussed, malpractice, insurance "profits", haze created by insurance companies to decrease provider payment - decrease competition - increase premiums, let’s not forget rules concerning "not" discounting fees lest Medicare fines providers, etc. etc. etc. I’d say about 60 - 80 cents of every "healthcare" dollar is pure "friction."
Now, I believe that when someone says, "single payer system" they don’t mean a system that looks anything like the blood-sucking system that we have today.
[/quote]
Carl,
Thanks for providing the estimate. Not knowing any better, I have to say it wouldn’t surprise me that it were that high. At 80% friction, we’re essentially paying 5 times as much to get the product we want/need. At 60%, it works out to paying 2 1/2 times as much.
I have never been a fan of "single payer systems." Generally, the economy of numbers becomes overwhelmed by the massive bureaucracy needed to administer it. I like Christopher’s suggestion of high deductibles. Since "high" is a relative term, perhaps the deductible should be based on annual income.
Grover
Administrative costs in a single payor system may be far less than our current bloated private systemAccording to to a study published in the New England Journal of Medicine, the administrative costs in Canada under their single payor system are substantially less than those costs incurred here in the US on a percapita basis - "The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita". - A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system" or "$1,059 per capita, as compared with $307 per capita in Canada"
See the full report at www.pnhp.org/publications/nejmadmin.pdf
Jim
Friction can be "good" and "bad."
Friction in the medical community that keeps qualified people providing quality care - I would define as "good" friction. The friction that Dr. Peters is speaking of has elements of "bad" friction in it when one looks at the protectionism, cronyism, nepotism, and any other "isms" that apply.
In a single payor system, the large "for-profit" entities have the most to loose. So look at who is backing the resistance to a "health system" that levels the opportunity for access.
Our current system also adds friction by stunting small businesses by keeping talent handcuffed to large corporations.
[quote=Grover]What kind of system do you envision as being sustainable? If the social fabric ruptures and chaos ensues, will it still work?[/quote]As jpitre noted, healthcare costs in America are substantially higher than in Canada, and in the rest of the world. 40 years ago, American healthcare costs were more or less on par with other developed countries, but beginning in the 1980s and continuing to the present, sharply diverged.
http://economix.blogs.nytimes.com/2009/07/08/us-health-spending-breaks-from-the-pack/
So, the single-payer, government-sponsored healthcare systems in place in much of the rest of the world have been better able to contain costs than America’s 50:50 mix of government-sponsored and private payer mess. But, is a pure single payer, government-sponsored healthcare system sustainable? Even though that model has been successful in avoiding the three-fold cost increase seen in the U.S., it has still seen a doubling of healthcare costs in the past 40 years. In Canada and Britian, for example, there are regular articles regarding the sustainability of those models, too. Their problems are not as acute as ours, but they still exist.
Much of the rise in healthcare costs can be attributed to the fact that modern medicine is a relatively new entity, only a little over a century old, and that the marked technological innovations seen in the past 40 years are associated with increased costs. We are also victims of our own success, cost-wise, as people are living longer to acquire new illnesss that require additional costly treatment.
I believe that a free market solution would better contain costs than a government-sponsored, single-payer system, but either system would be better than the one we have. In any case, I think the likelihood that America will realize either a fully free market solution or a fully "socialized" system of healthcare deliver is nil, at least until complete collapse of the current system.
If the "social fabric ruptures and chaos ensues", it is anyone’s guess what will be the effect on our healthcare system. I suspect that for routine, non-hospital, care, free market conditions will likely be much more important. For hospital-based care, well, given the complexities involved already, it is hard for me to imagine what would happen.
It probably would work the same. HSAs are just a means of paying for routine healthcare needs out of pretax income, which is desirable. For catastrophic healthcare needs (serious injury, heart attack, cancer, etc.), I think a high-deductible insurance plan makes sense, if one is available at a reasonably affordable price. A major illness or injury that lands one in the hospital can quickly result in a bill of hundreds of thousands of dollars. Even if such an event were statistically unlikely, the financial risks are considerable, and mitigating that risk with an insurance policy seems prudent to me.
Carl, good comment about "good" and "bad" friction! Perhaps the testing and licensing of physicians (and nurses) is a "good" friction, and worth maintaining. I’m not absolutely certain that is true, but it makes sense, and makes me feel better!
Christopher
Here’s an article about a primary care physician opening a cash-based (and barter!) practice in my hometown of Lawrence, Kansas:
http://wellcommons.com/groups/nosurance/2011/nov/13/new-lawrence-doctor-bringing-innovative-/
This is a slowly growing phenomenon, and I think we will see much more of it in the years to come. Unfortunately, its largely limited to primary care physicians; for surgeons and other hospital-based proceduralists, its much more difficult (yes, I’ve looked into it).
I wrote to the primary care physician opening a cash-based practice in my hometown, referenced in the message prior. He wrote back, and mentioned a cash-based surgery center in Oklahoma City (where I happened to have done my thoracic training, coincidentally), and provided the following link:
http://www.surgerycenterok.com/index.php
Resources like this might be available in other areas, particularly for same-day or overnight procedures, and would be worth looking into, if available.
Also, joe2baba sent me a PM and reminded me about options for care outside of the U.S. Particularly for elective surgical procedures, this is a very good option to consider, with much lower prices and comparable care (as with everything, though, thoroughly check out references and statistics).
Christopher
[quote=ccpetersmd]Here’s an article about a primary care physician opening a cash-based (and barter!) practice in my hometown of Lawrence, Kansas:
http://wellcommons.com/groups/nosurance/2011/nov/13/new-lawrence-doctor-bringing-innovative-/
This is a slowly growing phenomenon, and I think we will see much more of it in the years to come. Unfortunately, its largely limited to primary care physicians; for surgeons and other hospital-based proceduralists, its much more difficult (yes, I’ve looked into it).
[/quote]
Christopher,
Thanks for providing the link. I’d certainly check into this option if someone like Dr. Neu were available in my neck of the woods.
Other than limiting the multitude of insurance forms to be filled by patients/doctors/others, I can’t see much benefit to a single payer system. It may lower costs at first blush, but once the competition has been eradicated, inflation will be baked in the cake. Also, a single payer system will have to be run by the government. If you think this is a positive development, go visit a government run DMV to see how long the simplest of tasks take to be performed. There is no bottom line profit/loss calculation with government agencies. Well meaning individuals get swallowed by the bureaucracy and end up doing just enough to not get fired. It is the curse of a government job. (Does anyone really think this is a good idea?)
I’m eligible for retirement in the next few years. My employer will allow me to continue my health care coverage; however, I must pay the entire premium. The premium is slightly lower because of a group rate, but still much more than I need. The high-deductible catastrophic policy that you mentioned is sounding like a really promising option. If you have some favorites, I’d appreciate hearing about them (either here or in a PM.)
Thanks,
Grover
Grover,
No, I’m not really a proponent of a government-run, single payer system. I think such systems will ultimately fail, and some are showing signs of strain already. But, it is also clear that a government-run, single payer system would be better than our current system, at least from a cost perspective. In the end, though, such a switch would just be a "kicking the can down the road" maneuver.
We’ve had a high deductible plan for our family for several years. I’m 51, in good health, and nobody in my family has any health issues, so this is a good choice for us. When I was in private practice, I purchased my own high deductible plan. When I became a hospital employee earlier this year, my hospital had a high deductible plan as an option, so I chose that. I’d recommend checking with your current employer as to whether this is an option now, or might be in the near future (you should encourage them to look into it, if not already available), and if you could maintain such a plan after your retirement.
Unfortunately, when considering insurance options, we once again are faced with the problems of government influence in the marketplace. Insurance plan options, which also included high deductible plans, differ from state to state. Each state has certain mandates which dictate which options are available. As a result of this state influence, there are usually only one or two major insurance players in each state, plus a handful of minor ones. Not all will offer a high deductible plan. In Iowa, for example, only two insurers offer a high deductible plan. Until this patchwork system of mandates is eliminated (and legislation to do so is regularly proposed, but has yet to be enacted), we will not have competition in the healthcare insurance industry like we see in other insurance sectors. So, I cannot recommend any particular plan; you’ll just have to see what is available in your state.
As an aside, I think a health insurance advertisement featuring the Allstate "Mayhem" character would be hilarious! Instead of "I’m your blind spot", we might see "I’m your colon polyp". Or, Flo from Progressive would be another good character, as she’s already dressed like a medical person, in her whites and pharmacy-like setting.
Chris