Thanks to the NYTimes, we now have another example of insurance companies dictating how care is to be delivered, through a one-size-fits all payment system: Aetna has decided that sedation is an unnecessary expense in the performance of colonoscopy.
Aetna, one of the nation’s largest private health plan managers, is the latest insurer to clamp down on the use of a powerful anesthetic during an increasingly common form of colon cancer screening.
The company will send a letter to doctors on Friday, saying that it plans to classify the drug as “medically unnecessary” for most such procedures. As of April 1, Aetna plans to stop paying for its use in those cases.
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Kudos to the Happy Hospitalist for pointing out a great piece of research by AHRQ on actual use of the health system.
For those who want an executive summary, my major point is that the median expenditure for medical care in the US in 2002 was ~$700. The vast majority of individuals in the US can afford health care. The shift to the premium-based insurance model that spends a disproportionate share on the very sick is what is making healthcare unaffordable today. Moving away from that model is the only way to ensure good healthcare for all (vs. ridiculously high health expenditures for the few). Its odd to find all the liberals (and less odd to find the health insurance execs) looking to supplement the head of the Pareto curve.
Their findings are as follows:
You couldn’t paint a different picture for primary care providers than what is happening to colleagues on the dental side of the business (see NYTimes article). Trained better on the business front, the dental picture is evolving significantly different than for primary care– fees are rising, work hours are declining, and competition is decreasing as practicing dentist levels are flat despite an increasing population.
Dental fees have risen much faster than inflation. In real dollars, the cost of the average dental procedure rose 25 percent from 1996 to 2004. The average American adult patient now spends roughly $600 annually on dental care, with insurance picking up about half the tab.
Dentists’ incomes have grown faster than that of the typical American and the incomes of medical doctors. Formerly poor relations to physicians, American dentists in general practice made an average salary of $185,000 in 2004, the most recent data available. That figure is similar to what non-specialist doctors make, but dentists work far fewer hours. Dental surgeons and orthodontists average more than $300,000 annually.
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The medical system is becoming increasingly expensive and complex– with exponential growth of additional symptoms, diseases, fellowships, technology, standards of care, research studies, journals, and quality metrics on a yearly basis.
Thinking about all that is complex– and yet we expect our physician colleagues to run ever faster and do ever more with ever shrinking reimbursement for their time. Its no wonder they’re at wits end!
The problem in healthcare is a focus on doing/ knowing/ fixing more rather than doing what is necessary– making ever more investments in the “nice to have” without the financial counterbalance at the point of service.
Charlie Baker of Harvard Pilgrim highlights an excellent article in the Boston Globe titled “The folly of the 1% policy“. The premise of the article is the position that “if there is a 1% chance of , we must prepare for it as if it were a certainty”
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Repeat with me: Health insurance does not equal health care. Health insurance does not equal health care.
Now onto the news that universal healthcare has now been launched in Massachusetts, administered by the Commonwealth Connector. As Michael Cannon at Cato notes, this strangely enough has been timed to honor Canada Day. Michael Moore would be so proud.
So lets take a look at what has actually emerged as the Universal Solution for Boston’s uninsured (thanks to David Hyman of Cato for a great paper discussing this plan). First off (and not surprising), the plan has come in overbudget.
Originally promised by Mitt Romney at around $200/month, initial versions of the plan came in at an average of $300/month, with even high-deductible versions starting at $210. And that is just the average. The plan allows for different rates by age, so coverage for older individuals could start over $500/month for those in their 50′s for a high-deductible plan. This means, a healthy 50 year old who had low risk and no need to go to the doctor would see $6000+ annually evaporate under the state mandate. And those with care (under a high deductible policy) would need to shell out substantial additional dollars before getting anything back from the insurance companies. Does this strike anyone else as insane (outside of the fact that it already works this way today)? But it does make me ask why I should subsidize the nimwit who spent his 20s -40s eating Big Macs when he has a heart attack–when I’m spending quite a bit more time and money to eat well and get back to the gym (to eliminate my 20 lb gain while at McKinsey).
Even for the young (18-26 year olds not expected to use the system), plans were reported as starting at $119/month for limited coverage. Again $1500/yr goes up in smoke for young people who could use it for many other things. I’m older than that, and I still got cheaper coverage in California– and will continue to escalate the deductible as my HSA balances grow.
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