High deductible health insurance has resulted in what I call “the Functionally Un-Insured.” Deductibles and co-pays (that part of a patient’s medical bill that he or she will have to write a check for) have been rising since 2007. Many patients, though technically insured, can no longer afford these high deductibles and copays, and thus either delay care or avoid it altogether. ( http://time.com/money/3611885/healthcare-costs-insurance-delaying-care )
Since the Affordable Care Act (ACA, Obamacare) was passed in 2010, with its guarantee to the insurance industry of a medical loss ratio (MLR) not to exceed 85% (MLR is that percentage of collected premiums that has to be paid out to hospitals and doctors), the out-of-pocket deductibles and co-pays patients must pay have accelerated sharply. This means that even though patients may technically have insurance, many of them can no longer afford those out-of-pocket expenses incurred by medical care.
This is especially important for low-income patients and families who do not qualify for Medicaid—the working poor. In the 60% of states who have not accepted the Medicaid expansion proposed by the ACA (oftentimes because the governments of those states do not consider the Federal Government a reliable partner in healthcare decisions), patients and their families, to qualify for Medicaid, have to be really, really poor.
But not only the working poor are affected. Everyone in the middle class covered by employer-based health plans is affected too, as well as people on the exchanges.
Rather than tackle the true drivers of healthcare costs (namely, egregious hospital charges, which include facility fees) designers of the ACA (among them Jonathan Gruber and Ezekiel Emanuel, the discredited subjects of many recent articles) chose to solve “the healthcare cost problem” with experimental, largely ineffectual solutions, like Accountable Care Organizations, largely hospital centered and dominated. They ignored the fact that there are roughly thirty outpatient visits to one hospitalization in this country. ( www.cdc.gov/nchs/fastats/hospital.htm )
It must have seemed like such a good idea at the time for the bureaucrats who had never actually taken care of a sick human being, but who thought they knew exactly how it should be done: Penalize doctors for being independent, and drive them into large, hospital-centered and controlled systems run by businessmen and hedge funds. Track these organizations with “quality” metrics on computers (even though those quality metrics are fabricated and unsupported by any data whatsoever), and then begin to squeeze government programs like Medicare and Medicaid.
But policy wonks are beginning to realize they may have made a big mistake. It turns out that medical care delivered in a hospital based system costs three times what it does with independent doctors. And again, most health care is outpatient care anyway.
So with the President’s most recent budget, there are proposals to reduce payment for hospital-based outpatient care to that of independent doctor’s offices. What’s not to like about that? It will save Medicare a huge amount of money. Insurance companies should love it–they pay less for care. Patients should love it—their deductibles and other out of pocket expenses should decrease. State governments should love it, because it will give them more for the state-funded portion of their healthcare buck. The only folks who might not like these policy changes are the vastly profitable for-profit and not-for-profit hospital chains and their hedge-fund-like managers.
The key point we consumers of healthcare, who used to be called patients, need to know is that all healthcare is really local, like politics. All you need for the vast majority of health care delivery in this country is a patient, a doctor, a nurse, and some office equipment. And since all health care is local, what works in the urban centers of the US will not work in the 30% of the country that is rural or small-town based. (www.cdc.gov/nchs/fastats/hospital.htm)
The cost curve of healthcare has not been bent downward by experimental programs like Pay For Performance or Accountable Care Organizations. It has been bent downward by shifting the weight of high deductibles and copays to the backs of the working poor, the middle class, and the elderly of this country. And that is nothing to be proud of.
