Heeeeeeere's Obamacare!

[Francesca R]

If you mean offload some of the responsibilty/freedom to choose when you say "share", that is the same remedy Iyengar makes.

Adding price information to medical options--regardless of what its benefits might be in other ways--moves things in the reverse direction to that. Choice remains autonomous, but becomes more complex.

 

[sunmaster14]

If you mean offload some of the responsibilty/freedom to choose when you say "share", that is the same remedy Iyengar makes.

Adding price information to medical options--regardless of what its benefits might be in other ways--moves things in the reverse direction to that. Choice remains autonomous, but becomes more complex.

I meant share with family and friends and trusted advisers. Not the government. In my experience, even making a decision a joint one with a single other person, is a tremendous relief. We don't need the government to make these choices for us, although I suppose if someone wants to "choose" to give the government that power, that should be their "choice."

 

[Francesca R]

I didn't mean the government either. In the case of medicine it is someone with medical authority IE trusted adviser. But of course many folks would not be able to rustle up a trusted advisor from their own family and friends.

I suspect that alleviating the burden of choice (the remedy Iyengar points to) does not materially happen just from family/friends (or counsellors) who are not perceived to be trusted authority.

Eschewing authority doesn't help with this matter, in other words.

 

[Emily's Cat]

We've gone a ways down the rabbit hole here, sumaster. I'd like to attempt to rephrase my position, and perhaps be more clear about why I take this stance.

In most things I'm all for a free market, consumer-drive approach. I'm not really all for it in the realm of medicine, however. I don't think this is the way to approach cost containment.

My opinion is based on several factors. One of them is that I don't think it's reasonable to expect that the average consumer could have enough knowledge to make and informed consumer choice about their treatment options.

This is based on my experience as an actuary, with a company that has tried to encourage more consumer responsibility in our products. It's based on the usage patterns observed in HSA products - products with high deductibles, where the majority of the decision about what treatments to have lays with the consumer for a large chunk of the cost distribution.

My experience with these products, in this market, has been that it doesn't work the way we (the insurance industry) wants it to work. Sure, it reduces utilization... but it reduces ALL utilization. People don't go get their preventive exams and screenings, and they miss routine visits. They don't go to the doctor early for developing problems. They start to act more like uninsured than insured. Not quite so bad, they use urgent care and primary care much more than just emergency rooms.

But at the end of the day, my research (both mining my company's experience and conducing market research with our customers) has indicated that the following occurs:

• For preventive and routine visits, people "feel" just fine, so they put them off. Since the money comes out of their pocket (not the insurer's) they see it as being not a big deal if they skip it.
• For illnesses and conditions that could have been caught and treated at a less severe stage, they have a longer "wait and see" stage. Since it's going to cost them their own money, they take longer to see if it clears up on its own.
• Once a chronic condition has developed, they don't shop around - they do what their doctor tells them to do. They go where their doctor tells them to go, and take the drugs that their doctor tells them to take. The doctor is the expert and they don't feel that they should second guess them.
• For non-chronic significant events, they don't shop around. They do what their doctor tells them to do. It's too important for them to try to second-guess the expert.

There are some people who shop around for some things. But not consistently, and not often enough to be a major contributor to cost control. Thus at the end of the day I step back and I look at the reasons that people give, and the actions that they take... and I conclude:

The average person shouldn't be expected to have enough knowledge to act as an informed consumer in regards to medical treatment.

 

[Kestrel]

My experience with these products, in this market, has been that it doesn't work the way we (the insurance industry) wants it to work. Sure, it reduces utilization... but it reduces ALL utilization. People don't go get their preventive exams and screenings, and they miss routine visits. They don't go to the doctor early for developing problems. They start to act more like uninsured than insured. Not quite so bad, they use urgent care and primary care much more than just emergency rooms.

Do you think the "free" preventive care items included in ACA policies will have a positive impact on patient behavior?

 

[Trakar]

Do you think the "free" preventive care items included in ACA policies will have a positive impact on patient behavior?

I think they already are, but perhaps not as much as could be hoped for, there are a lot of people who fear potentially bad news. I've had relatives that were actually medical professionals and had excellent coverage and knew better, but who put off annual exams and screenings because they were afraid that the symptoms they noticed were bad news and they didn't want those fears confirmed. several had very bad results and one ended up avoiding diagnosis until she had progressed to stage four bone cancer.

Access to care doesn't insure that such will be utilized optimally, but it does allow for it.

 

[Emily's Cat]

Do you think the "free" preventive care items included in ACA policies will have a positive impact on patient behavior?

It's a bit of a conundrum, really.

On the one hand, yes, it should encourage people to seek preventive care more regularly by removing all financial barriers. For most people, it's a clear benefit.

On the other hand, so far we've seen very little utilization of preventive care from people who were previously long-term uninsured. It seems that they either don't know how to use their insurance, or that the uninsured contains a high proportion of people in the "skeptical/non-trusting" personality profile. That is to say, there is a smallish category of people who resist being told what to do, even when it's clearly in their best interests and clearly to their benefit. There appears (based on our predicitive modeling and segmentation algorithms) to be a larger proportion of this type of personality in the long-term previously uninsured group than in the group of people who have had insurance more regularly. I have no explanation to causality, only correlation.

On the gripping hand... there are a lot of services that ACA classes as preventive, and that are now covered with no cost sharing... but which are not cost-effective. The cost to perform the tests on a larger segment of people significantly outweighs the cost of treating the disease identified at a later date. Early detection doesn't reduce the cost to treat by enough to offset the cost to screen. That might sound cold-hearted at first glance... but for some of the screenings, the condition is very rare, and is very treatable even if found later. I can't think of them right now, and I'm lazy so I'm not going to dig out my big book of ACA-related stuff and hunt them down.

For consideration, we can talk about colon cancer. Colonoscopies get a lot of press, and are one of the preventive screenings that ACA requires to be free to the insured individual. But they're also relatively pricey - the average cost is around $3000 (significant range from $600 to $4000 or so with variation by geography and negotiated agreement). But colon cancer has a strong genetic component - most people aren't really at risk for it. And most colon cancer shows perceivable symptoms relatively early, at which point it's still quite treatable. Stage I, IIA, and IIIA all have survival rates better than 85%, Stages IIB and IIIB have rates better than 60%.

A reasonable and efficacious approach might recommend colonscopies for people with a family history of colon cancer, but not for anyone else. The colonoscopy would catch cases for people at risk (presumably) at Stage I. The symptoms themselves will catch the vast majority of the remaining people - especially if effort were put in to educating people about the symptoms of early-stage colon cancer. The survival rates would still be better than they are for *most* other cancers (notable exceptions being breast cancer and Hodgkins Lymphoma). But the aggregate cost burden would be lower - which translates to lower premium rates as well as lower cost trend.

So yes, "free" preventive care will have a positive impact on the low utilization associated with high-deductible and HSA plans... but I'm not entirely convinced that "free" results in an aggregate benefit.

 

[Emily's Cat]

I think they already are, but perhaps not as much as could be hoped for, there are a lot of people who fear potentially bad news. I've had relatives that were actually medical professionals and had excellent coverage and knew better, but who put off annual exams and screenings because they were afraid that the symptoms they noticed were bad news and they didn't want those fears confirmed. several had very bad results and one ended up avoiding diagnosis until she had progressed to stage four bone cancer.

Access to care doesn't insure that such will be utilized optimally, but it does allow for it.

This too. Your last statement is very true.

 

[Kestrel]

For consideration, we can talk about colon cancer. Colonoscopies get a lot of press, and are one of the preventive screenings that ACA requires to be free to the insured individual. But they're also relatively pricey - the average cost is around $3000 (significant range from $600 to $4000 or so with variation by geography and negotiated agreement). But colon cancer has a strong genetic component - most people aren't really at risk for it. And most colon cancer shows perceivable symptoms relatively early, at which point it's still quite treatable. Stage I, IIA, and IIIA all have survival rates better than 85%, Stages IIB and IIIB have rates better than 60%.

A reasonable and efficacious approach might recommend colonscopies for people with a family history of colon cancer, but not for anyone else. The colonoscopy would catch cases for people at risk (presumably) at Stage I. The symptoms themselves will catch the vast majority of the remaining people - especially if effort were put in to educating people about the symptoms of early-stage colon cancer. The survival rates would still be better than they are for *most* other cancers (notable exceptions being breast cancer and Hodgkins Lymphoma). But the aggregate cost burden would be lower - which translates to lower premium rates as well as lower cost trend.

So yes, "free" preventive care will have a positive impact on the low utilization associated with high-deductible and HSA plans... but I'm not entirely convinced that "free" results in an aggregate benefit.

I had a colonoscopy this year. The procedure was performed in a clinic that specialized in endoscopy and the negotiated price was in the $650 range. (Biopsies and lab work are extra if they find anything). That the range of costs for this procedure is almost an order of magnitude says more about the insanity of medical billing in the US than the true cost of doing the test.

 

[Emily's Cat]

I had a colonoscopy this year. The procedure was performed in a clinic that specialized in endoscopy and the negotiated price was in the $650 range. (Biopsies and lab work are extra if they find anything). That the range of costs for this procedure is almost an order of magnitude says more about the insanity of medical billing in the US than the true cost of doing the test.

You're not going to get any argument from me on that point!

 

[xjx388]

That's one of the problems with Obamacare; it doesn't address the real problems with in the medical system that are driving up the costs. The billing situation is completely crazy and out of whack. There needs to be a focus on price transparency and consistency. All ACA did was further entrench the system as it stands.

 

[Francesca R]

That's one of the problems with Obamacare; it doesn't address the real problems with in the medical system that are driving up the costs.

Well it is/was intended to "bend the cost curve" with various efficiency savings, which is undoubtedly possible.

But at a rudimentary level it shifts the demand curve for health spending right, and doesn't particularly move the supply curve, so that ought to increase unit costs. But this happens anyway without Obamacare.

 

[Emily's Cat]

That's one of the problems with Obamacare; it doesn't address the real problems with in the medical system that are driving up the costs. The billing situation is completely crazy and out of whack. There needs to be a focus on price transparency and consistency. All ACA did was further entrench the system as it stands.

Beyond just the pricing and consistency for services, we desperately need standards of practice in medicine. This is of course, my opinion on the matter. I just don't think it will ever be possible to achieve consistent and transparent pricing without those standards. There's a huge amount of gaming that goes on with coding for services as it is... standards of practice would make a huge difference in the coding game... and I think you really need to get the gaming under control before you can try to introduce consistency and pricing transparency.

Well it is/was intended to "bend the cost curve" with various efficiency savings, which is undoubtedly possible.

But at a rudimentary level it shifts the demand curve for health spending right, and doesn't particularly move the supply curve, so that ought to increase unit costs. But this happens anyway without Obamacare.

I think they *said* is was intended to bend the cost curve... but I personally think that was all smoke and mirrors It's right up there with "you can keep your plan..." Sure, under some limited and specific scenarios you can keep your plan, just not quite in the way it was implied. Same thing with the efficiency bits - sure in some special circumstances they might make a limited difference to some specific things... but there's nothing in ACA that really addresses cost or inflation in any reasonable fashion - at least not for the commercial side of the house.

As for the shift in the demand curve... ACA actually shifted the demand further than it would have shifted on its own. The supply curve hasn't changed much... but at least insurers made a concerted effort to form very narrow networks at materially reduced unit charge rates. This should give us a few years of less appalling prices... but I have doubts as to whether it will make any substantial long term difference to the trend rate. Mostly, I think it's a discontinuity in the curve, rather than a bend. The slope will be about the same as it has always been... we just fell off a small cliff in year one

 

[Francesca R]

I think they *said* is was intended to bend the cost curve... but I personally think that was all smoke and mirrors

I don't think that stops devotees producing plenty of "data" showing it did. I don't care for the argument. Suffice it to say there are myriad perverse incentives (so actually more malign than inefficiencies) in the system that afford opportunity to reduce costs.

As for the shift in the demand curve... ACA actually shifted the demand further than it would have shifted on its own.

Yes obviously. Just saying demand rises above supply everywhere.

(Oh and yes, in universal systems like I have, that is partly addressed by rationing. It is a stupidity of universal system fans to claim otherwise)

 

[Kestrel]

Beyond just the pricing and consistency for services, we desperately need standards of practice in medicine. This is of course, my opinion on the matter. I just don't think it will ever be possible to achieve consistent and transparent pricing without those standards. There's a huge amount of gaming that goes on with coding for services as it is... standards of practice would make a huge difference in the coding game... and I think you really need to get the gaming under control before you can try to introduce consistency and pricing transparency.

A rational system would have a common electronic billing form and rules for coding. A few years back I watched the staff at the local pharmacy spend more time working on the billing for each flu shot than it took to prepare and administer the shot. Each insurance company had different rules on coding this simple procedure.

While the ACA was being created, I asked my Senator's aide who was working on the bill about this. He said there it did mandate a common electronic billing form. Apparently that provision didn't make it into the final bill.

The ACA expanded incentives for implementing electronic patient records. The next step should be to mandate a common method of interchange. So that any medical provider caring for a patient can access and update the records of that patient. Determining medical history should not be based on handing an injured patient a clipboard with a form.

 

[Trakar]

Beyond just the pricing and consistency for services, we desperately need standards of practice in medicine...

Probably better to say that there were some side issue aspects of ACA that should, and have, impacted both efficiency and price factors in health care, but these weren't the primary goals of ACA. ACA was mainly about expanding health insurance coverage to greater segments of the population, with an ancillary objective of minimizing the increases in costs associated with such expanded coverage.

I don't think it was ever designed or intended to be an answer to all the problems and difficulties associated with modern healthcare in the United States, merely a first step toward getting those that most desperately needed health coverage due to the gaps between existing private insurance coverage and public health services. Those that blame ACA for not completely reforming and perfecting U.S. health care, seem to be either disingenuous, or failing to understand the goals and purpose of ACA, but perhaps I am misunderstanding some of the arguments being made by some posters.

 

[Trakar]

A rational system would have a common electronic billing form and rules for coding. A few years back I watched the staff at the local pharmacy spend more time working on the billing for each flu shot than it took to prepare and administer the shot. Each insurance company had different rules on coding this simple procedure.

While the ACA was being created, I asked my Senator's aide who was working on the bill about this. He said there it did mandate a common electronic billing form. Apparently that provision didn't make it into the final bill.

The ACA expanded incentives for implementing electronic patient records. The next step should be to mandate a common method of interchange. So that any medical provider caring for a patient can access and update the records of that patient. Determining medical history should not be based on handing an injured patient a clipboard with a form.

We are still awaiting the final implementation of ICD-10 (not to mention a standardized EHR system) which was originally scheduled to be phased in half a decade ago. Not that this is an end all to such issues, but with virtually everyone trying to avoid changing and updating their systems and training due to the expense of equipment, implementation and converting all existing records to the new standards, I can understand a bit of the foot-dragging, but it is starting to get ridiculous.

 

[Emily's Cat]

Probably better to say that there were some side issue aspects of ACA that should, and have, impacted both efficiency and price factors in health care, but these weren't the primary goals of ACA. ACA was mainly about expanding health insurance coverage to greater segments of the population, with an ancillary objective of minimizing the increases in costs associated with such expanded coverage.

I don't think it was ever designed or intended to be an answer to all the problems and difficulties associated with modern healthcare in the United States, merely a first step toward getting those that most desperately needed health coverage due to the gaps between existing private insurance coverage and public health services. Those that blame ACA for not completely reforming and perfecting U.S. health care, seem to be either disingenuous, or failing to understand the goals and purpose of ACA, but perhaps I am misunderstanding some of the arguments being made by some posters.

I agree... sort of. The bill itself contains almost nothing aimed at controlling cost, and is almost exclusively aimed at increasing access. But it was sold to the public as something that would affect the outrageous cost of health care. Much of the rhetoric has revolved around how ACA would reduce costs... even if that's not really supportable by the content of the bill itself. But hey - true believers are true believers, regardless of the focus of their faith.

 

[Emily's Cat]

Kestrel and Trakar - if you don't mind sharing, what professions are you in? I recall that Kestrel has an association with the health industry, but I'm not sure what. I really only ask out of curiosity, so if you'd rather not disclose that, it's fine I'm a health actuary.

 

[Kestrel]

I am a retired software engineer. Healthcare is just an area of public policy that I find interesting.