Saturday, February 29, 2020

Will Americans' fear of high medical bills hinder Coronavirus containment?

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On Wednesday, I noted that the high out-out of pocket costs that most insured Americans under age 65 are exposed to might deter people who contract the Coronavirus (or suspect they may have contracted it) from seeking treatment.
In employer-sponsored insurance, the average single-person deductible in 2019 was $1,655, according to the Kaiser Family Foundation. 28% of covered workers had a single -person deductible over $2,000.  The median annual maximum out-of-pocket (MOOP) limit (after which the plan pays 100% of covered expenses) was $4,000 (the maximum allowable is $8,100). About two thirds of employer plans require coinsurance for inpatient hospital stays, averaging 20%.
Today, Sarah Kliff reports that an American father and daughter who were subject to mandatory quarantine when they returned from Wuhan province in China were also subject to two mandatory stays in an isolation unit at a nearby children's hospital after the child was heard coughing. After release, "they found a pile of medical bills waiting: $3,918 in charges from hospital doctors, radiologists and an ambulance company."  The father's employer provided health coverage in China, where he had been working, but does not provide it in the U.S.

The people who accepted the U.S. government's offer to evacuate from Wuhan were necessarily placed in mandatory quarantine on military bases, for which they were not charged. For the hospital stay (also mandated in this case), it's unclear whether the U.S. government will foot the bill: the law is silent on this front, and the CDC apparently hasn't decided yet, though the hospital says that it will not charge the family.

Mandatory quarantine for people returning from Coronavirus hot spots is one special situation.  I wonder more broadly about the protocols that will develop for people who have any cause to suspect they may have contracted the disease, once they get themselves tested. If your symptoms are mild, will you be allowed or encouraged to go home and self-quarantine?  If so, will protocols be developed and widely disseminated for those caring for Coronavirus patients at home?

If a positive test mandates a hospital stay, tens of millions of Americans will probably be very conscious that such a stay will likely cost them thousands of dollars. Kliff cites an estimate of the average cost of a day's stay in a U.S. hospital at $4,293 as of 2013. With 20% coinsurance, a patient's share would be about $859 per day until the out-of-pocket maximum was reached. Costs have risen since then, and balance billing, which creates exposure beyond the MOOP, has become more prevalent. Fear of financial exposure -- 65% of Americans worry about surprise medical bills, according to a just-published Kaiser tracking poll  --  may help the disease to spread.

[Update: the WSJ's Stephanie Armour reports: "An intensive care unit stay with mechanical ventilation costs more than $11,000 a day, according to a 2005 study in the Journal of Critical Care Medicine."  And Bill Gardner, Nicholas Bagley and David States estimate the likely cost of a typical Covid-19 hospitalization at $62,000 -- before as-yet-undeveloped antiviral meds are figured in. Because the disease's severity and lethality rises with age, most of those hospitalizations may be covered by Medicare, but by no means all.

Most people in traditional Medicare have Medigap coverage. Most Medigap policies cover virtually all out-of-pocket costs; the most limited type, Plan K, has and OOP cap of $5,880.  About 8 million Medicare enrollees are in traditional Medicare with no supplemental coverage. If hospitalized, they would be subject to a $1,408 Part A deductible, after which Medicare would pay 100% of costs through 60 days - a hospitalization length unlikely for this disease.  Hospitalization costs by all payers could reach the hundreds of billions. ]

Most people diagnosed with flu are sent home. In my last post, hospitalist Bradley Flansbaum anticipated that Coronavirus patients will be treated similarly. There is, however, a vaccine for the flu, and antiviral medication, and none of either as yet for Coronavirus -- which also appears to spread more quickly than the flu. Whether people who contract the disease are sent home with self-care and self-quarantine instructions remains to be seen.

1 comment:

  1. It is worse than that for America....see the attached from The Naked Capitalism blog (Yves Smith)...

    The lack of even adequate testing in the US and no prospect of getting it any time soon, the Trump Administration decision to opt for spin over transparency, the prohibitively high cost (for most) of getting tested, and financial insecurity and lack of sick days making it also too costly for many to stay home if they start exhibiting coronavirus symptoms, makes the US subject to more extensive propagation than might otherwise happen.

    The absence of enough data for making sound risk assessments means once awareness of the disease becomes more widespread (US readers say they see a lot of complacency except in locations close to outbreaks) means those who are in an economic position to do so will take protective measures, while those who need a paycheck and can’t work remotely will keep showing up…unless and until a slowdown in their business forces hours and headcount cuts. So we see Amazon bans all “nonessential” travel and Nike temporarily shutters its headquarters campus for a “deep cleaning” while Amazon warehouse laborers are expected to keep up their punishing routines no matter how terrible they feel. Amazon seems far more concerned about coronavirus leading to Prime Day inventory shortages than to its warehouses becoming coronavirus clusters.