Elizabeth Warren is faking it on healthcare

Delivering a keynote at Families USA's annual Health Action conference, Elizabeth Warren signaled either that she hasn't studied U.S. healthcare very closely or that she cares to attack only politically convenient targets on this front.

Warren lambasted the travesty that American families are one sickness away from financial ruin -- a major early discovery of hers - and that's great.  She excoriated the country's major private insurers as faithless partners in the Affordable Care Act, and that's fair enough (though the U.S. government has in turn been a faithless partner of the insurers). She suggested that those insurers who want the privilege of participating in the profitable Medicare Advantage and managed Medicaid markets should be required to participate in the ACA marketplace, and that's reasonable, at least in outline.

But she also presented the unaffordability of healthcare in the U.S., and the huge out-of-pocket costs that many insured Americans face, as purely a product of insurance industry rapine. Not a word about pricing-gouging by hospitals and doctors; the fine science of upcoding; the loopholes allowing self-dealing; the privileging of expensive procedures; the outsourcing to hedge fund- and private equity-backed price maximizers; the predatory balance billing. Providers got a total pass. I sentence Senator Warren to read Elisabeth Rosenthal's An American Sickness, which meticulously documents all these cost inflators and their evolution

Medical Billing: The Ten Do-well Commandments (after Elisabeth Rosenthal)

Elisabeth Rosenthal, reporter of the monumental Paying Till it Hurts series in the New York Times and author of  An American Sickness: How Healthcare Became Big Business and How You Can Take it Back, has been out front with the "Ten Economic Rules of the Dysfunctional Medical Market" with which the book leads off -- e.g., on Twitter and on Medium.

To those of us who have saturated themselves in Lin-Manuel Miranda's Hamilton (which already feels like a relic of a bygone era), "10 rules"  inescapably conjure up The Ten Duel Commandments. So I have set them to imagined music below. At bottom, the rules as Rosenthal worded them.

A disclaimer: While the rules in isolation may seem excessively cynical, I don't think Rosenthal's point is that all providers follow them all the time, but that the incentives in our dysfunctional system pull them this way.  Another disclaimer: I haven't read the book yet. Too much current bad news to absorb. But I'll get there.

The Ten Billing Commandments

Number one: The treatment. More is always better.
Feed the bottom line, be a real go-getter.

Number two: Keep 'em coming. More is always more.
A lifetime of treatment trumps a simple cure.

Number three: Amenities and marketing are the way it's done.
Look like Cedars-Sinai and the battle is won.

Elisabeth Rosenthal on narrow networks in ACA marketplace: A few "yes buts"

On the front page of today's New York Times Sunday Review, Elisabeth Rosenthal, author of the incomparable Paying Till it Hurts series on the dysfunctions of our price-gouging healthcare system, spotlights the limitations of ACA marketplace plans, starting with narrow networks. It's accurate and fair, acknowledging the good that the law has done. Nonetheless I have some caveats:

1. Rosenthal compares marketplace plans' narrow networks unfavorably with the more robust networks typically offered by employer-sponsored insurance:

Your money or your life

Last September, the Times' Elisabeth Rosenthal spotlighted the manifold ways in which hospitals impose out-of-network billing charges on patients even when the patients have contracted with an in-network physician in an in-network hospital.

Rosenthal documented how hospital ORs and EDs operate as free-billing zones in which an array of doctors, physical therapists and other service providers can insinuate themselves in a procedure without the patient's prior knowledge or consent, whether they're in the patient's insurance network or not -- and then relentlessly pursue either the insurer or the patient or both for their exorbitant billings.

She's made me extremely wary to enter a hospital for any purpose  -- a reluctance that I suppose could in itself be dangerous to my health (or, conversely, salubrious; see point 3 here). But I had evidence today that the virus, so to speak, has spread to physician practices, which hospitals are relentlessly buying up and contracting with. In my primary care physician's office, I was confronted with a form requiring me, theoretically at least, to put all I own in hoc to the parent parent company, a certain Atlantic Health System:

FINANCIAL ARRANGEMENTS
I understand the Hospital charges do not include the fees of my treating physician, or the fees for services provided by Emergency Department physicians, anesthesiologists, cardiologists, neonatologists, obstetricians, pathologist, radiologists, surgeons, the on call physician, other consultants, and other Voluntary Medical Staff  who may treat men. I understand that I am financially responsible for the payment of my physician fees and these fees may not be covered by my insurance plan.

Hey, HHS, you're boasting about the wrong metric

If you read the inimitable Elisabeth Rosenthal's account of unhappy ACA plan holders this weekend, you know that high deductibles and out-of-pocket costs are one serious weakness of the coverage offered to many buyers on ACA exchanges.*

One mitigating factor is that most buyers with incomes under 200% of the Federal Poverty Level get Cost Sharing Reduction (CSR) subsidies that strongly reduce deductibles and maximum out-of-pocket costs, to levels superior to those offered by most employer-sponsored plans.  CSR is only available with silver plans, but as I've labored to deduce, best evidence suggests that over 80%** of buyers with incomes under 200% FPL do buy silver, resisting the temptation of lower-premium bronze plans that would leave them on the hook for huge out-of-pocket (OOP) costs.

Given this partial success, I find it baffling that all of HHS' reports of enrollment data are written as if nothing matters but premium -- the lower the better. The report released today boasts:

Narrow networks: a painful of tourniquet on a bleeding healthcare system

Stories of bad buyer experiences with ACA exchange plans often induce me to push back a bit. I can't do that with Elisabeth Rosenthal's laser strike on patients' troubles with ACA plans' narrow networks and mazes of separate copays and coninsurance for different procedures.  Rosenthal is too nuanced, too thorough with context, and too precise in her accounts of buyers' experiences to quibble with. A sampling:

Alison Chavez, 36, who is self-employed, signed up for a marketplace plan in October 2013 that she hoped would be an improvement on her previous plan. She had recently been given a diagnosis of breast cancer and was just beginning therapy, so she was careful to choose a policy on the Covered California marketplace that included her physicians.

But in March, while in the middle of treatment, she was notified that several of her doctors and the hospital were leaving the plan’s network. She was forced to postpone a surgery as she scrambled to buy a new commercial policy that included her doctors. “I’ve been through hell and back, but I came out alive and kicking (just broke),” she wrote in an email

What the ACA can't cure

I recently referred to Investor's Business Daily reporter Jed Graham's coverage of the ACA as "adversarial." He objected. I responded, "I don't ignore or minimize ACA flaws but would not object to a characterization of my writing on it as "sympathetic."

That set me thinking about everything that troubles me about the ACA -- or, more accurately, things that trouble me about the US healthcare system that the ACA is unlikely to fix -- though it may help catalyze reform on several of these fronts. Here's the list:

1. All private health insurance in the U.S. is inadequate -- thanks to the shameful out-of-network billing, balance billing, and creative billing by hospitals, physicians and other providers documented in sickening detail by Elisabeth Rosenthal in her Paying Till it Hurts series. We are in the grip of a depraved system in which hospitals often operate as free billing zones and payers' attempts to control costs just generate new loopholes.

2. For the unsubsidized and lightly subsidized, private insurance on the ACA exchanges is too expensive. Or rather, medical care obtained under the insurance is too expensive.  One of the law's strengths is the Cost Sharing Reduction (CSR) that reduces deductibles and out-of-pocket costs for buyers with incomes below 200% of the Federal Poverty Level to levels comparable to those offered in top-grade employer-sponsored insurance (much more modest CSR is offered to those between 200% and 250% FPL).  Those cost control come into play if low income buyers choose silver plans (fortunately, most do) and if  they are not hit by the kind of out-of-network and balance billing that Rosenthal documents. Those above 200% FPL, however, have to choose between high monthly premiums and often sky-high deductibles, average over $5,000 for bronze plans (which may be tempting to many at the upper range of subsidy eligibility).

Having some health insurance is better than having none. But American insurance...

Those of us engaged in the long struggle to pass and implement the ACA have (not wrongly) fixated on how vital it is to have health insurance, and we've been cheered by the roughly 25% reduction in the nation's uninsured in the ACA's first year. We've also celebrated the ACA's ending of arbitrary policy rescissions, yearly and lifetime coverage caps, medical underwriting, and plans lacking essential benefits like childbirth and drug treatment.

Some coverage is better than none. But recent good reporting is also highlighting the extent to which much if not most health insurance in America remains inadequate, exposing plan holders to sometimes substantial, sometimes damaging and sometimes ruinous costs. The incidence of such exposure may be rising rather than falling, as employers continue to offload the cost of care onto employees.

Elisabeth Rosenthal exposes hospitals as free-billing zones

I stand back in awe from the healthcare reporting of The New York Times' Elisabeth Rosenthal, who since June 2013 has been exposing in front-page blockbuster after blockbuster the rampant greed and depraved price-gouging endemic to the US healthcare system. Her nine-part "paying till it hurts" series, indexed here, is worthy of a Pulitzer. It should galvanize the country as Silent Spring or The Other America did.

Rosenthal's latest exposes many hospital ORs as free-billing zones in which an array of doctors, physical therapists and other service providers can insinuate themselves in a procedure without the patient's prior knowledge or consent, whether they're in the patient's insurance network or not -- and then relentlessly pursue either the insurer or the patient or both for their exorbitant billings.

The most egregious example Rosenthal spotlights is when neurosurgeons or orthopedists call in out-of-network surgeons to assist -- who bill at out-of-network rates, to the tune of $117,000 in the headline case.  Then there's the smaller-scale gouging:

Unexpected fees are routinely generated outside the operating room as well. On the wards, a dermatologist may be called in to examine a rash and perform an expensive biopsy. The person in scrubs who walks a patient to a bathroom for the first time after hip surgery may turn out to be a physical therapist billing $400.

Rosenthal's fully-documented examples will make you afraid ever to set foot in a hospital -- unless perhaps you're on Medicare with full-bore Medigap insurance. A few policy takeaways from this tale of systemic depravity:

If the hospital's nonprofit, the CEO may not be

Updated, 5/19:

A footnote to Elisabeth Rosenthal's story in today's Times about how huge pay packages for hospital executives contribute to high U.S. healthcare costs: Exhibit A was Ronald Del Mauro, the just-retired president of the nonprofit New Jersey hospital group Barnabas Health, who was paid $21 million in deferred compensation, bonus and incentive pay in his final year.

The footnote concerns an explanation from a Barnabas spokesperson:

Ms. Greene also said Barnabas’s compensation program follows I.R.S. rules and is established by an executive compensation committee with “guidance from a nationally recognized compensation consultant.”

That jogged memory of a related factoid. Mr. Del Mauro was not only paid in accordance with advice from a consultant: he was also paid as a consultant, at least as of the end of 2012.

For pharma and medical device makers, U.S. is The Big Rock Candy Mountain

The New York Times' Elisabeth Rosenthal is out with another front-page chapter in her incomparable epic detailing the dysfunction of the U.S. healthcare system. She's spotlighted (1, 2, 3) price-gouging by various physician specialties, hospitals, and now medical device makers and pharma.

Rosenthal focuses mainly on diabetes treatment. It really has improved radically over the past two decades, with ever-more sophisticated insulin pumps and accouterments, and synthetic human insulin.  But near-monopoly pricing power -- unmitigated, in the U.S. alone, by strong government pushback -- forces many patients to buy more sophisticated treatment than they need, at astronomical markups. As is de rigeur in Rosenthal's pieces, the contrast with other wealthy countries hurts most. The contrast with the U.K. highlights strengths and, to a lesser extent, weaknesses of a system that contrasts starkly with our own:

In Britain, each hospital negotiates for pumps for its patients, getting prices that are typically less than half those in the United States, Dr. Pickup said. The vial of insulin analogue that Ms. Hayley gets for $200 at an American pharmacy is typically bought by British pharmacists for under $30 and dispensed free....