Place the frustration of cost uncertainty on health insurers

Place the frustration of cost uncertainty on health insurersAs we enter 2012, many patients will be changing to new insurance plans.

And for a few, deductibles will be rising.

One thing that’s emphasized in the Affordable Care Act, however, is that preventive services would remain “free.”

However, consider this story of a man, who thought he wouldn’t have to pay for his screening colonoscopy, instead was charged over $1,000 for the procedure.

From USA Today,

Bill Dunphy thought his colonoscopy would be free.

His insurance company told him it would be covered 100 percent, with no copayment from him and no charge against his deductible. The nation’s 1-year-old health law requires most insurance plans to cover all costs for preventive care including colon cancer screening. So Dunphy had the procedure in April.

Then the bill arrived: $1,100.

The reason? During the procedure, polyps were found and rightfully removed. But in doing so, it changed the colonoscopy from a screening procedure to a diagnostic procedure, thus making it applicable to the patient’s deductible.

Such semantics are important, as insurance companies will seize them at every opportunity to pass on costs to both patients and hospitals.

Physicians, however, are caught in this firestorm as they get blamed for surprise bills. And that erodes the trust between patient and doctor.

Patients need to be told up front that it’s impossible to guarantee that any screening colonoscopy will be “free,” and that the possibility of removing polyps will always be there.

This speaks to the larger problem of price transparency. Patients frequently want to know how much an office visit costs. But under our current health system, the answer is invariably, “it depends.” Yes, it’s a frustrating answer, but true. Cost is dependent on the complexity of the visit, which is impossible to ascertain prior to being done.

Putting patients in touch with their insurance companies at an early stage will place the onus of cost uncertainty on health insurers, rather than physicians, who often get unfairly blamed for surprise bills that’s out of their control.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.

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  • Anonymous

    It is so frustrating to fight with insurance companies, day in and out, with mounting hostility between patient and physician, eroded trust, financial desperation for patients and many medical specialties, and making medically unsuitable decisions based on arbitrary “utilization review” and insurance coverage denials after the fact, all the while insurance companies profit with little damage their bottom lines and no regard for their role in this crumbling system.  And perhaps the most frustrating aspect, is that no one seems to be capable of holding them to liability.

    • http://www.cobrahealth.com Craig J. Casey

      You would be hostile also if you had to subsidize someone else’s bill.  Health insurance companies have to pay more since gov underpays them.

      • Anonymous

        So why do they take out their hostility on patients and doctors?

  • http://pulse.yahoo.com/_2LRZNHDZS6DU45WQ567LPQ7CMI ninguem

    You want a colonoscopy in the UK, look here:
    http://www.nuffieldhealth.com/
    and you can get a price quote that you can rely upon.

    If they can do it in the land of socialized medicine, why can’t we do it here?

    • Anonymous

      Sure you can get an NHS colonoscopy … just have to wait three years to get it done.

      • http://pulse.yahoo.com/_2LRZNHDZS6DU45WQ567LPQ7CMI ninguem

        Understood. These are private hospitals and private physicians who provide private healthcare outside the NHS. To do that, you have to be able to quote a price the patient can rely upon. I guess they can work with NHS patients, with whatever limitations the NHS imposes on them.

        Thing is, the schemes usually contemplated in the USA prohibit private practice like this.

      • Anonymous

        Why are you lying? The average wait times in the UK for all specialties is 18 weeks. maybe you should do some research before you make such outrageous statement. Do a web search for…

        “Latest waiting time stats: one year waits halved in October”

        By the way, in the UK, they don’t have over 50 million uninsured people and they don’t have another 25 million more people that are underinsured. That’s about 1/4th of Americans that “really” have some serious wait times because they have little or no insurance!

    • http://www.cobrahealth.com/ Craig Joseph Casey

      In the US (As in the UK) government underpays doctors for their services.  the prices vary. You can look up what medicare will pay for a procedure. Then Doctors overbill the government with more procedures to compensate, or over charge the uninsured & insurance carriers.  Cross subsidization = healthcare inflation.  http://www.slideshare.net/CraigJCasey/reasons-why-i-hate-obamacare

  • http://twitter.com/2healthguru Gregg Masters

    Thanks Kevin! I agree that the ‘for profit’ business model in health care is well worth careful consideration. As Clay Christensen writes in The Innovator’s Prescription for competition to actualiy add value, it must be of the proper business model (paraphrased). Niche market exploitation and a quick exit to benefit shareholders does not get to the sustainable community benefit we need to fix our dire health care financing and delivery quagmire.

    Yet, I believe whether the health plan is for profit or non-profit (i.e., tax exempt), these are routine underwriting decisions often driven by actuarial analysis independent of the tax status of the enterprise.

    None-the-less, I agree with the premise, that ‘health insurers’ (aka ‘transaction processors’ who live of admin fees, and rising premiums), are more of the problem than the solution. Until they have some long term skin in the game (according to JD Kleinke, the average risk retention by a health plan – when they actually hold risk – is ~2 years), they will pay lip service to wellness and prevention.

    • http://www.cobrahealth.com Craig J. Casey

      Disagree, if prevention and wellness really lowered healthcare costs, health insurers would already be doing them, way ahead of inept government. That’s more $ to their bottom line.  And insurance was always used to compensate for catastrophic losses, not cover anything and everything 1st dollar, or the premiums would be outrageous.

      Some people need to retake unified math.  If a health insurer has to pay out more than they take in, they must raise prices. And with government, 30% is lost to fraud and waste. So take your pick.  I’ll take my changes with the accountable and sueable private health insurer, instead of the unaccountable, faceless government bureaucracy.

      • http://twitter.com/2healthguru Gregg Masters

        health plans and their channel partner/leaches are the value extract middle men who add ZERO to the value proposition. more of the same drivel from the mind numbing simpletons who chant end ‘obamacare’, or quote the ‘govenment takeover of medicine’, or paranoid kill grandma scenarios. we could end the GA and MGA distribution chain and not miss a beat in the delivery of quality healthcare. they add nothing, other than a well funded PACs who fear the implementation of PPACA. find a real job!

        • http://www.cobrahealth.com Craig J. Casey

          Whenever someone is full of insults (esp. along with the usual absence of facts), it really says something about their character. 

      • Anonymous

        The reason Insurance companies don’t profit from prevention is that they ultimately get to dump their patients on the socialized side of medicine (Medicare) once they reach the age range when disease processes and costs start kicking in. What do they care about prevention? The “inept” government will get to take care of that. I do agree that cost effectiveness of prevention is overestemated and turning the whole world into a “patient” does not help either. Insurance has suffered from hyperutilization, but accountable? To who?

  • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

    The law needs to be re written so that if you sign up for a screening procedure , it is billed as a screening procedure regardless of the findings. Subsequent colonoscopies to follow up on the polyps will not be for screening purposes. This situation required a strong letter from the gastroenterologist to the insurer, a copy of the pre procedure notes documenting it as a screening procedure and a letter to the state insurance commissioner questioning the bill

    • Anonymous

      Sounds like someone mismatched CPT and ICD codes here. A screening colonscopy should always be billed with a health maintenance code, regardless of what was found during the procedure. Either the doctor’s office used a non-V code to get better payment, or the insurer linked the procedure to a secondary diagnosis such as “colon polyps” to avoid paying. In either case, the patient got  it in the . . .

  • Anonymous

    Get rid of insurance companies completely from America’s health care system and you eliminate the problem. The private insurance companies ruined our health care system over many decades and they continue to do it today. They bring absolutely no value to the table. The sooner America faces reality and stops these sleazy shysters from causing the extreme increases in health care costs, the better. Vermont is on tract to enacting a single-payer health care system. Connecticut has just eliminated the private insurance companies from participating in Medicaid. If doctors would join with health care consumers and make some noise about the fraud and corruption that insurance companies bring, we’d be well on our way to getting single-payer in every state in America. The problem is, the health care industry, the docs, the hospitals, the drug companies, the private insurers and the companies that make durable medical equipment are all in bed together. They collude with each other on a systemwide basis. America’s health care system is the most corrupt and most expensive in the world. Yet, there are over 50 million Americans that are uninsured and another estimated 25 million that are underinsured. Best health care in the world? Yeah, if you can afford it! 

  • http://www.facebook.com/JEHealthCareSolutions Andy Edley

    While it is true that the Health Care Delivery system is broken, The answer is not more government, the answer is with ourselves.  Why do we buy car insurance other than most states require it?  We buy it to pay for the big things,ie wreck or hail damage.  We don’t buy it to pay for things like minor repairs, tune-ups, tires, etc.  Yet we continue to pay for high cost healthcare insurance so we can get a $25 to $35 co-pay, and then abuse the system by running to the doctor every time we get a cold, or some drug company runs adds on TV about some new wonder drug.  Then we run to our doctor and get him to gives us a prescription for it.  What I am trying to say is it is time we take responsibility for our healthcare and stop expecting a third party to pay for it.  If you expect a third party to pay for your medical care then they are going to control it!!!   

    • Anonymous

      So, what I hear you saying is we shouldn’t be running to see the doctor for every little thing. Are you suggesting rationed health care? 

  • Anonymous

    Did we need protection from Wall Street? Anyone who thinks we didn’t is seriously deluded. Do we need protection from the predators in our corrupt health care industry? If you think we don’t, you are a complete fool. Like Wall Street was before the financial system collapse of 2008, a financial system without any serious regulation, our health care system is currently running the exact same way. Guess what? Capitalists don’t regulate themselves very well. They never have and they never will. They have one single motive…GREED! The “only” protections that average middle-class Americans have from corrupt capitalists is government. That’s it! We have no other way to control the kind of corruption that Wall Street practiced before the 2008 financial collapse and the same is true with our corrupt health care system. The consumer has absolutely no other advocate except government. To say “The answer is not more government” is a statement we hear regularly from those who are in denial about how Wall Street behaved before 2008 and about how our corrupt health care industry operates today. The consumer desperately needs someone to keep an eye on the corrupt behavior of Wall Street the exact same way that the consumer desperately needs someone to keep an eye on a corrupt health care system. 

  • Peter Zafirides

    Kevin,

    For a true free-market analysis of what amounts the develoment of a four-party system as it relates to health care economics, I highly recommend Charles Kronke’s article “The modern Health Care Maze” from the Independent Institute. It is one of the most enlightening, historically accurate representation of medical economics I have read to this point.

    It is a free read online, the link to the PDF is:
    http://www.independent.org/pdf/tir/tir_14_01_3_kroncke.pdf

    It is a very thoughtful, realistic assessment of what our system has become. It is written in the spirit of an Austrian Economic model, but one does not need to know Austrian economics to  Government and regulators are horridly inefficient. Furthermore, conflicts of interests abound in those who become regulators and the interests they protect/empower by means of over-regulation or lack thereof. Regulators with conflicts of interests are placed in those positions to create regulations that discourage competition (as those with the means can meet the regulations, while smaller companies cannot absorb the “cost of doing business”.

    I completely disagree with those who believe in the “inherent evil” of capitalism. It is too simplistic and reductionistic of an assesment. To claim that capitalism is “evil” is to really not understand free market economics at all. What people are upset about is CORPORATISM (or croney capitalism). A true free market encourages excellence. This is not what we have today – most certainly not in health care.

    I know in a true free market system, to get business (if I were starting a practice) I would find out what all my colleagues were charging…and then undercut them by 20%. It isn’t because I am evil, it is just that I know I can provide a better service for less money. Now that may mean that someone can’t charge $50,000 for a surgery, but the MARKET would tell you that…not Medicare, or Humana, or Aetna….

    I would rather take my chances (and I do) in the free market anyday, than deal with what we deal with in our reimbursement. It is easy to blame “the system”, but exactly what are you (not you personally, Kevin) doing as a physician to change it??

    I thought so….

    -Peter Zafirides
    “Tu Ne Cede Malis”

  • Anonymous

    I disagree, instead of placing all of the blame on the insurance carrier, shouldn’t the provider own some responsibility as well? Once the polyps were discovered but prior to the decision being made to remove them, shouldn’t the provider have the conversation with the patient? Or prior to the procedure being performed, discussing the possibility with the patient of what could be found along with a a how to proceed conversation which includes possible cost scenarios? After all, if it’s not an immediate life threatening situation that needs to be handled right then and there, it will allow the patient to make the decision. Also, it would give the patient the right to explore more cost conscientous options, e.g. other network provider who may charge less for the procedure.  In this situation and with the limited scenario detail that’s been provided, I don’t think that it’s fair to place all of the responsibility on the insurance carrier. It’s a team effort, in order to ensure that patient quality is not compromised while trying to keep costs low, insurance carriers and health care providers must work together.

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