So it’s nice to see that lawmakers are moving forward on a bill to require pharmaceutical and medical device companies to disclose payments and financial perks given to doctors. Eli Lilly and Co stands out from the rest of the pharmaceutical industry in supporting the bill, although they did convince lawmakers to raise the amount requiring disclosure from $25 to $500. That’s too bad, because $499 is a pretty sweet gift. It will pay for a great dinner or a round of golf and some good scotch afterwards. It will cover most of a plane ticket to a destination within the US. And yet it still would not need to be disclosed.

The legislation doesn’t limit payments to doctors; it simply requires that they be reported. Of course, I doubt the disclosure will be in the form of a big sign in your doctor’s office saying how much money she’s gotten from each of the major drug companies. Most likely, the data will be on file in some government office, available upon rare request. I suppose it could be used by the IRS to make sure that doctors report the value of the gifts and incentives they receive from pharmaceutical companies. But most likely, this bill will just create more bureaucratic paperwork, and have little impact on the actual behavior of pharmaceutical companies and health care providers.

It’s interesting also to note that the bill doesn’t require the reporting to start until the spring of 2011. Does it really take three years to start keeping track of money and gifts that you give out? This isn’t a program that requires lots of new infrastructure or extensive training of personnel. If lawmakers are serious about limiting the bias that is created when drug companies and medical suppliers give high-priced gifts to medical providers, it seems that they could do more to curb the practice rather than just disclose it, and implement whatever program they come up with a whole lot sooner than 2011.

In the UK, there is currently a heated debate about whether patients in the National Health Service should be allowed to privately purchase treatments that are denied by the NHS.  The NHS provides health care for everyone in the UK - there is no uninsured population falling through the cracks.  And everyone has access to the same health care - unlike our system with hundreds of different health insurance plans available and tremendous differences in coverage from one plan to the next.  But the NHS is not a money tree, and faces the same budget issues that any universal health care program does.  In order to reduce costs, they have opted to not cover certain high-priced medications and treatments.  They have chosen to offer health care to the entire population rather than provide high-cost treatment to a select few.  In theory, it’s a good plan.  Do what’s best for the majority.  But what if you’re one of those people with a life-threatening illness and you’re being told that not only will your health insurance not pay for a possible treatment (that happens all the time with private health insurance too), but that you’re not allowed to mortgage your house and use the money to pay for the treatment on your own?  Seems a bit Draconian. 

The NHS stand is that if they allow wealthy people to purchase their own medications outside the NHS, there is no motivation for the pharmaceutical companies and health care industry as a whole to keep costs in check.  They would rather see the costs kept to a reasonable level so that the treatments can be made available to everyone through the public health service.  At the Colorado Health Insurance Insider, we’ve written about the financial devastation faced by families when a high-priced medication is not covered by their health insurance carrier.  But it seems that it would be even worse to not have the option to at least try to purchase the treatment on your own.  These are people’s lives we’re talking about - most of us would be willing to spend everything we have to save our own life or that of a loved one.  After all, money and assets aren’t worth much if you’re dead. 

I can see the virtue in the position that the NHS is taking.  By standing up to the pharmaceutical companies and not allowing patients to pay sky-high prices for treatments that have been denied by the health care system, they are hoping to bring down the cost of the drugs so that they can afford to provide them to all patients.  But the health care industry is a global market.  Pharmaceutical companies are not limited to providing treatments only in the UK.  The huge “free-market” private health care system in the US provides plenty of grease for the wheels of the capitalistic model of health care.  As long as pharmaceutical companies can continue to operate on a strongly for-profit model in the US, restrictions on sales in other countries will have little impact.  I would love to see the NHS succeed in their attempts to push for lower prices on high-end medical treatments, but it seems that they will need some powerful allies in their fight.  And I would hate to be the person with the rare illness who gets told that my health insurance won’t cover my treatment and I also can’t pay for it on my own. 

I must say, it seems sad that we currently don’t provide universal health care for our citizens until they reach age 65. In most developed countries, everyone has access to a system like our Medicare program, and they don’t have to wait until they have gray hair to qualify. Making people wait even longer doesn’t seem like a very noble solution (maybe they hoping that more people will die before reaching the eligible age, and never get Medicare benefits at all?). Cutting benefits doesn’t seem like a good idea either. Medicare is already somewhat lacking in benefits, and seniors without private Medigap policies can get stuck with some serious medical bills in the event of a long hospitalization or serious illness. Increasing premiums could be a viable solution to some extent. Since so many seniors are on a fixed income, any premium increase would have to be small, but a series of small increases several years in a row might help keep Medicare solvent.

We’re going to have to address cost control issues before we can tackle health care reform. Any way we look at it, we’ll have to reduce waste and excessive expenses in the health care industry, and pass the savings along to consumers who are struggling under the burden of health care expenses. Overall, I’d say that at the Colorado Health Insurance Insider, we agree with Donna Shalala’s thoughts on health care reform. Limiting benefits and restricting coverage to fewer people (which would be the result of an age increase for Medicare eligibility) is counterproductive to the overall goal, which should be to provide all Americans with access to truly affordable health care.

The Colorado Health Insurance Insider got noticed because of the “Smoking Can Be Hazardous for Your Health” article and all of your great comments!

A majority of doctors and the American public believe that the country is in need of a national health care system.  When we’ve reached the stage where it’s not really that unusual for two people to get married in order to obtain health insurance benefits for one of them, I would say that something’s gotta give. 

We work primarily with people purchasing individual health insurance, and among our clients the percentage of people opting for an HDHP is much higher than 7%. Private health plan enrollment in Colorado includes everyone who has private group coverage through an employer. Employees typically have few options to choose from, and - especially if the employer is paying the premiums - will generally opt for a more benefit-rich policy if it’s available. In the individual health insurance market, the insured is paying the entire premium and price is a deciding factor for most of our clients. Some opt to go with an HDHP/HSA because it has the lowest premiums - not because the coverage is exactly what they had in mind. Others want the tax benefits that an HSA can provide. And some rarely need health care and are just looking for catastrophic coverage, so an HDHP (without the savings account) fits the bill perfectly.

The obvious drawback to an HDHP is the deductible - if you choose not to set up an HSA and don’t have a plan for paying the deductible if the need arises, a major claim could turn into a financial headache. Not the sort that you’d have if you were uninsured, but the relatively large out of pocket amount on an HDHP has to be taken into consideration.

But once you get past the deductible (if possible, save it up over time in an HSA and then forget about it), HDHPs offer a lot of peace of mind. Many of the policies have 100% coverage after the deductible, and the deductibles are per-family, so the maximum out-of-pocket is very easy to determine. And the benefits are often very high quality on an HDHP. In Colorado, the only individual health insurance policy that covers preventive colonoscopies is an HSA from Anthem Blue Cross Blue Shield.

For Jay and myself, keeping our health insurance premiums to a minimum while still protecting our financial situation in the event of a major illness or injury is key. So an HDHP/HSA is perfect for us. Even with our new family member arriving this month, we have no plans to have any other type of health insurance. I just hope that HSAs continue to be user-friendly and low cost in the future, and I’m sure that the number of enrollees is only going to increase as more employers search for lower-cost health insurance options for their employees.

McCain is talking about working with governors on a state level to set up guaranteed issue policies. This doesn’t sound much different from the current high-risk pools that we already have scattered across the country. The states that have high risk pools have worked hard to try to find a solution for people who are declined by the private health insurance market. For our clients in Colorado, Cover Colorado provides a reasonable coverage option, although many people find that the only deductible they can afford is much higher than they would like. But what about people who live in the 40% of states that don’t have a high risk pool? Or the ones who live in states where the high risk pool was financially swamped ages ago and hasn’t accepted new enrollees in years? And what about the fact that the high risk pool are always much more expensive than comparable private health insurance, meaning that the people who need health insurance the most are less able to afford their coverage. This runs counter to the idea that health insurance is a mechanism for spreading risk over an entire population, letting the healthy people who go ten years between claims balance out the costs of the people who have chronic conditions that need continual treatment.

Currently, we have 47 million people in America without any health insurance at all. Many of them are perfectly healthy, and would be a “good risk” for health insurance companies. Of course some of them are not healthy at all, and would fall into the category of people who are unable to qualify for individual health insurance under the current underwriting system. If the 47 million people who are not currently paying health insurance premiums were to start doing so, the risk pool for health insurers would grow considerably. Underwriting on individual health insurance policies could be changed to allow people with pre-existing conditions to gain access to the same health insurance coverage the rest of us have, regardless of where they live. By spreading the cost of treating people with pre-existing conditions over the entire pool of people with individual health insurance (or even across the entire US population, if individual and group health insurance were to be combined into one industry), we would be much closer to actually having a fair health insurance system, where the costs are spread across the entire group, and people pay the same premiums, regardless of their health status. I’m still in favor of charging higher premiums to people who use tobacco or have self-inflicted health conditions, but excluding people completely from the health insurance system only works to drive up health care costs, as these individuals end up needing emergency care when chronic health conditions go unchecked, and the hospitals providing the care don’t get paid because the patients are uninsured.

It makes a lot more sense to try to find a way to include people with pre-existing conditions in the overall health insurance pool that includes all the healthy people as well, rather than expecting states to find a way to cover a group of people who are all sick, with no healthy members to offset the costs.

Health insurance was designed to spread risk over a large pool of people.  It’s difficult for health insurance companies to accurately spread risk when they are unaware of all the facts.  As science and technology increase our understanding of health, it makes sense to use as much information as possible when determining future projected health expenses.  But individual people should not have to suffer financially because of information obtained through genetic testing.  It’s bad enough to find out that you’re carrying a gene for breast cancer - it would be worse still to find out that you’re now ineligible for individual health insurance or at risk of losing your job if your employer finds out. 

I like the portion of HR 493 that deals with hiring and firing of employees based on genetic testing.  And I like the wording that prohibits health insurance carriers from requiring genetic testing in order for a person to obtain coverage.  And I very much like the provision for individual health insurance policies, which are already difficult enough to obtain.  But for the overall health care industry, it would seem that utilizing genetic testing information could help insurers and providers more accurately predict future costs.  Rather than imposing rate increases on specific groups based on the medical information of each group (some of which may only have a handful of employees), it would make more sense to use the data as a broad tool for looking at overall trends in health care expenses, and setting rates for all groups accordingly - without discriminating against any specific group.  The individual health insurance market could use a similar model in theory, but with our current system of looking at each applicant separately and declining coverage to those with unsatisfactory medical histories, using genetic information would seem to only increase the number of people who are unable to obtain health insurance in the individual market.  We need to avoid anything that makes health insurance harder to get, so overall I give this bill a thumbs up.  There are some redundant and overly-wordy parts to it (when was the last time you saw legislation that was crystal clear and simple though?), but it will provide peace of mind to people who are thinking about getting genetic testing but had been afraid of the ramifications the results might have on their employment, or their health insurance eligibility and premiums. 

Jay and I have individual health insurance, and in Colorado there is no such thing as home-birth coverage on individual policies. In fact, there are only a handful of health insurance carriers in Colorado that offer maternity coverage on individual policies at all, and for most people, the coverage provided isn’t worth the extra premium dollars. So we’ve paid the $3000 fee ourselves, as do many of our midwives’ clients.

We were talking about billing and health insurance coverage with our midwives this week, and they described the process they have to go through to get reimbursed for their clients who have health insurance policies that provide out-of-network coverage for registered home birth midwives. They each have billing services that serve as an intermediary between the midwives and the health insurance carriers, but they also each spend an inordinate amount of time tracking down money from clients’ insurance companies. They have to jump through far more hoops than an obstetrician, even though they ultimately save the health insurance carriers a huge chunk of money compared with bills generated from hospital births. In some cases, the health insurance companies send the payment to the insured, instead of to the midwives, which further complicates the situation, since the midwives then have to contact their client and ask for the money - something that is highly unlikely to happen when a doctor is doing the billing.

In Colorado, home birth midwifery is a regulated industry - these are not just women who hang out a shingle and start delivering babies on a whim. They are highly skilled professionals with very good statistical outcomes for low-risk pregnancies. Given that their fee is about a third of the cost of an uncomplicated hospital birth, and that the likelihood of more expensive procedures like c-sections is far lower with planned home births, wouldn’t it make more sense for health insurance companies that cover maternity care to encourage home births and pay the midwives promptly and respectfully? These are all employer group policies, which cover maternity care just like any other medical expense on the policy. Typically the insured pays the deductible and then a coinsurance percentage, but the majority of the expenses for a pregnancy are covered by the health insurance companies. So a provider with equally good overall outcomes, fewer interventions (all of which cost the insurance company money), and a far lower fee should be generating lots of goodwill in the health insurance industry. And yet our midwives still have to struggle more than most obstetricians to get even a portion of their small fee reimbursed.