Tag Archives: new england journal of medicine

Health Insurer Trickery Straps ER Patients

Millions of emergency room patients could face financial ruin — even if they deliberately seek care at hospitals covered by their insurers.

That’s the disturbing finding of a new study published in the New England Journal of Medicine. Conducted by two Yale professors, the study shows that one in five ER visits involve doctors who are not in the same insurance network as their hospitals. The patients treated by those out-of-network physicians are forced to pay for a portion of their care out-of-pocket. The average out-of-network ER charge is $600.

A bill that size spells disaster for many patients. About half of Americans wouldn’t be able to cover a surprise $400 bill without selling something or borrowing money.

It’s a travesty that, in the midst of medical emergencies, people who specifically head to hospitals covered by their insurance plans are still getting hit with huge bills. Unfortunately, these out-of-network ER charges are just the latest tactic that health insurers have devised to shift costs onto patients.

See also: Key Misconceptions on Health Insurance  

The contracts that hospitals establish with health insurers typically don’t cover ER doctors. Those physicians have to negotiate with insurers directly. Many insurers decide ER physicians’ fees are too high and cut them out of coverage networks.

Patients hardly ever suspect that the ER doctors at in-network hospitals could be out-of-network. Take Candice Butcher, a Salem, Va., mom who rushed her two-year-old son Logan to the ER after he cut his head on a dining room chair. Candice made sure to take her son to a hospital covered by her insurance. And Logan’s treatment — cleaning and suturing the wound — was relatively straightforward. So she was stunned when she got the news: Her out-of-network ER doctor was charging her $750.

Or consider Craig Hopper, who got hit with a $937 bill by his Austin, Texas, hospital for ER treatment for a sports injury. “It never occurred to me that the first line of defense … could be out of the network,” says his wife, Jennifer. “In-network means we just get the building? I thought the doctor came with the ER.”

The Hoppers are in a particularly unfriendly state. Fully half of the Texas hospitals covered by the state’s main private insurers have zero — yes, zero — in-network ER physicians, according to work from the Center for Public Policy Priorities. Emergency patients all are getting hit with huge, unexpected bills. “There’s little consumers can do to prevent it and protect themselves” says Stacey Pogue, an analyst at the CPPP.

This out-of-network trickery is largely a response to Obamacare’s crippling mandates on insurers. The outgoing president’s signature legislative accomplishment straps coverage providers with invasive, costly regulations, squeezing bottom lines and forcing insurers to cut expenses and boost revenues anyway they can.

The obvious insurer response is to ratchet up premiums. The average premium for plans available on the Obamacare exchanges in 2017 jumped 22% over the 2016 rates.

But insurers also have resorted to subtler tactics.

That includes raising deductibles, the amount that customers have to spend out-of-pocket before benefits kick in. The average health insurance deductible for individual plans shot up 42% in Obamacare’s first year — and that figure continues to climb. Today, the average deductible for the “bronze” plans in the exchanges — the cheapest possible coverage — is a whopping $6,000 for individuals and $12,000 for families.

See also: The Basic Problem for Health Insurance  

Insurers also are restricting their official networks — limiting the doctors and hospitals that their customers can use. This strategy enhances insurer bargaining power in negotiations with healthcare providers, but it hurts patients by denying them access to convenient care. People get stuck traveling long distances to unfamiliar caregivers for vital treatments. McKinsey calculates that about four in 10 exchange plans exclude more than 70% of hospitals in the plan’s coverage area, and a further three in 10 plans exclude at least 30% of hospitals.

Insurers are feeling the squeeze under Obamacare, and they’re resorting to devious tactics to cut costs. Too often, that straps patients with staggering, unforeseeable medical bills. That should all change when Obamacare is repealed and replaced — which is why lawmakers must move with all due haste in the new year.

Are Your Health Cost Savings an Illusion?

The New England Journal of Medicine carried an excellent article by David Casarette, MD, on the topic of healthcare illusions and medical appropriateness. Click here to read the full article.

Casarette observes that humans have a tendency to see success in what they do, even if there is none. Casarette writes, “Psychologists call this phenomenon, which is based on our tendency to infer causality where none exists, the ‘illusion of control.’” This illusion applies in all walks of life, especially in politics and parenting, and it includes medical care.

In medical care, the phenomenon has been referred to as “therapeutic illusion,“ and it affects both doctors and patients. Undoubtedly, therapeutic illusion is why placebos can be so effective.

In one clinical study, faux surgery worked as well or better than an actual surgery for the treatment of specific conditions. If patients perceive they need surgery, e.g. for knee pain, even though it may not be medically appropriate some will search for a surgeon who can validate the need and perform the surgery.

Casarette writes, “Physicians also overestimate the benefits of everything from interventions for back pain to cancer chemotherapy.”

Casarette’s article is most interesting to us. Why? We’ve often felt that doctors who perform unnecessary surgeries have ethical problems. The reality may be a little more complicated. The surgery decisions may have a subconscious influence.

Toomey had an interesting conversation with the chief medical officer (CMO) of a major health system. The CMO relayed that his wife was having pain in her hand, so they scheduled an appointment with one of their system’s highly recommended specialists. The specialist looked at the wife’s hand and, after a few minutes, stated that she needed surgery. The specialist did not know he was taking to a physician, and the CMO questioned how the specialist could arrive at a diagnosis from just looking at a hand. The response was, “years of experience.” The CMO and his wife got a second opinion and opted for the recommended therapy rather than surgery, and the therapy solved her issue.

The attention today is on value-based contracting and data analysis. A group of 20 national employers have come together to share data, so they can assess the healthcare supply chain. But, as noted in our last blog post, analyzing the data is complex, especially because claims data are just a collection of medical bills. How are employers assessing medical appropriateness? What reports can be generated to assess a need for care?

In 2014, one state’s Medicare costs were $6,631 per capita while another’s were $10,610. A big driver was the variation in the volume of procedures, and cognitive biases among doctors can help drive those volumes.

Healthcare involves people – patients, physicians, and other providers — and the human element makes it even more complex. So how do those involved in healthcare address the variation in medical care that is driving up costs?

We are biased – we believe the employers are the catalyst to drive change for increased consistency by working collaboratively with suppliers (think Six Sigma).

In any case, it’s time for change.

Unnecessary Surgery: When Will It End?

Unnecessary surgery: When is it going to end? Not any time soon, unless a documented and proven approach is used by health benefit plan sponsors.

I began my healthcare career 35 years ago when, as a graduate student at Columbia University School of Public Health, I was awarded a full scholarship as a public health intern at Cornell Medical College in New York City. Dr. Eugene McCarthy at Cornell was the medical director of a Taft-Hartley joint union/management health benefits self-administered fund at the time and my mentor. I worked on the Building Service 32 B-J Health Fund, which was the focus of an eight-year study sponsored by the then-Department of Health, Education and Welfare (now Health and Human Services, or HHS) and which was the first study on second surgical opinions.

The study (1972-1980) followed union members and their families who were told they needed elective surgery and documented that roughly 30% of recommended surgeries turned out to be medically unnecessary. The study found 12 surgeries that generated the most second opinions that didn’t confirm the original diagnosis. This list comprises: back surgery, bone surgery and bunions of the foot, cataract removal, cholecystectomy, coronary bypass, hysterectomy, knee surgery, mastectomy, prostatectomy, hip surgery, repair of deviated septum and tonsillectomy.

What has changed on this list 35 years later? Very little, if anything.

USA Today on March 12, 2013, reported on a study that found that; “tens of thousands of times each year patients undergo surgery they don’t need.” After the release of this study, a former surgeon and professor at the Harvard School of Public Health stated that: “It is a very serious issue, and there really hasn’t been much movement to address it.”

A CNN special on March 10, 2013, reported that the U.S. spent $2.7 trillion on healthcare per year and that 30%, or roughly $800 billion, was wasted on care that did not improve outcomes. Sound familiar? The Cornell study said the same thing 31 years earlier.

Public and private employers, health, disability and workers’ comp insurers and state and federal programs such as Medicare and Medicaid are doing very little, if anything, to effectively address this problem. The solution to preventing unnecessary care and surgery is not in raising co-pays and deductibles and other out of pocket costs unless they are tied to consumer education and well-designed second-opinion programs.

In response to the USA Today article, a leading medical expert said, “You can shop for a toaster better than prostate surgery, because we don’t give patients enough information.” Another leading surgeon stated; “Far too many patients are having surgeries they don’t need, with associated major and severe complications such as long-term disability and even death.” Furthermore, “I see patients with neck and back problems, and at least 1/3 are scheduled for operations they don’t need, with no clinical findings except pain.”

What is the principal focus of today’s multibillion-dollar managed care industry, especially in workers’ compensation? Provider discounts, that’s what. But how is it a savings if the patient receives a discount on an operation he doesn’t need?

Most often, when I ask that question I am met with blank stares.

The New England Journal of Medicine in 2009 stated that a common knee surgery for osteoarthritis “isn’t effective in treating patients with moderate to severe forms of the disease.” Yet, according to federal researchers, 985,000 Americans have arthroscopic knee surgery each year, and 33% (more than 300,000) are for osteoarthritis “despite overwhelming medical evidence that arthroscopic surgery is not effective therapy for advanced osteoarthritis of the knee.”

According to the chairman of cardiovascular medicine at the world-renowned Cleveland Clinic, the U.S. health system is “doing a lot of heart procedures that people don’t need.” For example, angioplasty stent surgery in heart patients will likely relieve pain but “will not help a person live longer and will not protect against having another heart attack… What’s worse is that many of these surgeries will lead to bad outcomes.” He said, “This procedure should be performed for patients having a heart attack, but 95% of patients who have angioplasty surgery are not the result of a heart attack.”

The estimate on the direct medical costs to American businesses for low back pain is $90 billion a year; this doesn’t include workers’ compensation indemnity and litigation costs, disability costs, sick days and indirect costs such as lost productivity. As reported in my previous article, The Truth about Treating Low Back Pain, the Journal of the American Medical Association (JAMA) estimated that 40% of initial back surgeries, which amounts to more than 80,000 patients per year, have “failed back surgeries.” These unsuccessful back surgeries most often lead to a lifetime of debilitating back pain and billions more in long-term disability and Social Security Disability Insurance (SSDI) costs. These patients — four out of every 10 — all wish they had received a second opinion now. Yet when I recommended a second-opinion program to a union health fund in New Jersey, the manager said: “I am not going to tell my union members they need to get a second opinion.” True story.

Although we were scheduled to have an informal lunch meeting, after I recommended the fund consider a second-opinion program the “lunch” part of the meeting disappeared, even though I had driven two hours to get there. Maybe that is where the expression there is “no such thing as a free lunch” comes from? The health fund manager was downright indignant about my suggestion even though the first-second opinion program was conducted on behalf of a union health fund and was overwhelmingly successful.

He did describe, however, how upset he was about the fund’s rising healthcare costs. I guess he just wanted to be able to complain about it instead of actually doing something about it on behalf of his members. (The president of the union confided in me afterward that he had failed back surgery many years ago and wished he had gone for a second opinion.)

A colleague of my mine who is a senior vice president of product development for a leading third-party administrator (TPA) confided that insurance companies and TPAs will not implement programs that I could design and implement for their clients because they would never admit it was a good idea, given that they didn’t invent it.

I also hear all the time from so-called experts that second surgical opinions don’t work and don’t save money.

But large self-insured employers and health, disability and workers’ comp insurers should follow the lead of the top sports teams who send their top athletes for second opinions all the time to places like the Hospital for Special Surgery (HHS) and New York-Presbyterian Hospital/Columbia Medical Center in Manhattan or UCLA Medical Center in Los Angeles.

When I send client employees or friends and neighbors for second opinions, they often tell me that their appointment was with the same doctor Tiger Woods or Derek Jeter went to. My response is, “exactly.” Very often, conservative treatment is recommended and produces great patient outcomes, especially for back injuries and diagnoses for conditions like carpal tunnel syndrome. (See Carpal Tunnel Syndrome: It’s Time to Explode the Myth.)

Most, if not all, top surgeons I have met welcome second opinions for their patients because, when surgery is recommended, they want their patients to be assured that another expert also believes it is in their best interests.

I interned at the first second-surgical opinion in the country. I wrote my master’s thesis at Columbia on what I learned and how to improve upon the design and administration of the very successful Cornell program. Although the phrase, “I want a second opinion,” is now common terminology in America from auto repair to surgery, it has not reduced the overall amount of unnecessary surgery. If your program is not successful or not saving money it is because there is a serious flaw in the design and administration.

What I have documented since I designed or administered the first corporate second-opinion benefit programs back in the early 1980s are several key components of a successful program. First, it must be mandatory for the plan member to receive a second opinion for selected elective surgeries. Remember, elective surgery, by definition, means scheduled in advance, not for life-threatening conditions. Second, the second-opinion physician must not be associated with the physician recommending surgery. The physician must truly be an independent board-certified expert. Third, the second-opinion physician cannot perform the surgery; this provision removes any conflict of interest.

In addition, although a plan member should be required to receive a second opinion to receive full benefits under the health plan, the decision on whether to have surgery is entirely up to the patient. The whole idea is to educate the patient on the pros and cons of proposed surgery and the potential benefits for non-surgical treatment or different type of surgery (lumpectomy vs total mastectomy, for example). (I also developed a process of administrative deferrals for instances when it would be impractical to obtain a second opinion or when the conditions were so overwhelming that the need for a second opinion could be waived.)

It is only by helping to make patients truly informed consumers of healthcare and educating them on the benefits of alternative surgical treatments that a program can be successful. Voluntary programs simply don’t work. Rarely do patients seek second opinions on their own, and most often do not know where to obtain and arrange for a top-notch second opinion. In addition, they often feel uncomfortable and do not want to tell their physician they are seeking a second opinion. That is why I found that a program only really works when patients can state that their “health plan requires that I get a second opinion.” The mandatory approach reduces unnecessary surgery dramatically and saves the plan sponsor money with at least 10:1 return on investment.

The most amazing reduction of unnecessary surgery and resulting savings to the plan sponsor comes simply by implementing and communicating the benefits and requirements of the program design that I outlined above. The reason is known as the “Sentinel Effect.” What the original Cornell study and others have documented is at least a 10% reduction in the amount of recommended elective surgery simply from announcing the program is now in effect. No need for an actual second opinion; merely require one!

Now that is cost-effective!

Screening: More Does NOT Equal Better

In an important op-ed piece in the New York Times, “An Epidemic of Thyroid Cancer?”, Dr. H. Gilbert Welch from Dartmouth University wrote that he and his team of researchers found that the rate of thyroid cancer in South Korea has increased 15-fold!

15X! How can this be?!

Were South Koreans exposed to massive amounts of radiation? Did South Koreans start using some dangerous skin product?

No. And no.

South Korean doctors and the South Korean government encouraged increased cancer screening. More screening must be better, right?

No. Not at all…

This is an important concept for employee benefits professionals to understand: More screening is not necessarily better.

What happened in South Korea is that the thyroid cancer had been there all along, just undetected. The most common type of thyroid cancer — papillary thyroid cancer — is usually very slow-growing, and people with this cancer never know it is there. It does not affect their health, and it does not kill them. According to the article, it is estimated that 1/3 of ALL ADULTS have thyroid cancer.

Thyroid cancer screening is performed by an ultrasound of the neck. It is an un-invasive, painless, fairly simple test. So what happened in South Korea was not an epidemic of thyroid cancer but, as the article puts it, “an epidemic of diagnosis.”

There is potential harm in treating a cancer that will likely not cause you any problems. Two out of every 1,000 thyroid surgeries result in death. Removal of the thyroid means a person will have to take thyroid replacement medication for the rest of her life. This medication can be hard to adjust, leading to problems with metabolism, such as weight gain or low energy.

In the U.S., there are many screenings that the U.S. Preventive Services Task Force has deemed “unproven” for application across entire populations of asymptomatic individuals. For example:

  • Screening the skin for skin cancer
  • Screening the carotid arteries (neck blood vessels) for narrowing

It is important to address the converse. Increased screening that has been shown to reduce morbidity and mortality is a good thing. Screening for high blood pressure is a good thing. Screening for diabetes is a good thing. Screening for certain types of cancers is a good thing.

What does this mean for the employee benefits professionals and the healthcare consumer?

  • Beware of “blanket” statements that more screening is better or of companies that are offering screenings that are not vetted.
  • Know that screening can actually cause harm because of side effects or complications of treatment for a “disease” that is really not a problem.
  • As you set up prevention programs for your employees, ensure that those programs are based on scientific evidence.