Consumer Directed Healthcare

WASHINGTON (CNN) — While a government-run public health care option irks conservatives, and even some fiscally minded Democrats, the idea of health care cooperatives has emerged as an option in the reform debate.

Small health care cooperatives have worked in a couple of markets. But whether the idea can be applied on a national scale is debatable.

Sen. Kent Conrad, chairman of the Senate Budget Committee, is pushing the co-op idea as an alternative to a government-sponsored insurance program that would compete with private insurers. He doesn’t think a government option will pass in the Senate.

Conrad, a North Dakota Democrat, told CNN’s “American Morning” on Tuesday that his model could attract 12 million members and “be the third-largest insurer in the country and be a very effective competitor [with private insurance companies].”

“If you believe competition helps drive down costs, then they would certainly contribute to holding down costs,” Conrad said.

But Tim Jost, a professor at Washington and Lee University, said that Conrad is not offering concrete statistics on how the plan will help reform health care.

“I have not seen anything, other than Sen. Conrad’s statements to the press, explaining how this is going to work,” he said. “He put out a couple of one-pagers early on, but he is talking about this actuarial data. Let’s make it public, let’s find out who the actuaries are.”

Co-ops are nonprofit organizations that aim to provide better coverage at a lower cost for their members. They put profits back into the system, so any money that is earned is used on patients and other costs. In addition, patients elect a governing board.

Cooperatives are already established in cities such as Minneapolis, Minnesota, and Seattle, Washington.

In order for a co-op to have reduced costs, analysts say, it needs to have tens of thousands of members. That could be a hard slog for the nonprofits because start-up costs would probably be in the millions. That may be where the federal government steps in — by adding seed money for the program.

That government infusion of money probably would put Democrats at odds with Republicans, who are worried about the rising federal deficit and an expanded role of government in health care. 

And the costs of a cooperative might not allow enough people to sign up, meaning that some of the nearly 46 million uninsured Americans wouldn’t be able to buy into the program. Other health reform alternatives, such as the public option, cost less for participants.

“Let’s see how they [Conrad and others] explain that they are going to get to 10 to 12 million members. … I can’t see how that’s going to happen,” Jost said.

Probably the biggest barrier, Jost said, is entering a new market and trying to establish a network.

“You have to go out there, you have to contract with hospitals, doctors, other providers of care. Well, the private insurers have their networks in place, and they often have what they call ‘most favored nations’ clauses, which provide that a provider cannot [offer] a lower rate than it does to the dominant insurer.”

The idea of co-ops appears to have received some support from the Obama administration.

A top White House aide told Bloomberg Television’s “Conversations with Judy Woodruff” that President Obama may accept nonprofit health insurance cooperatives in place of a new government-run plan.

“We would be interested in that” if certain conditions are met, said Nancy-Ann DeParle, director of the White House Office of Health Reform.

And the idea has gotten support from a key Republican senator.

Sen. Richard Shelby, R-Alabama, said on “Fox News Sunday” that co-ops are “a step in the right direction.”

“I don’t know if it will do everything people want, but we ought to look at it. I think it’s a far cry from the original proposals.”

But not everyone is so sure that co-ops will work to reduce health care costs across the board.

CNN Medical Correspondent Elizabeth Cohen, who spoke with top officials at both co-ops, said this type of model would not solve the problem of uninsured Americans.

“Will co-ops solve that? No. That is according to two folks who run co-ops [one in Seattle and one in Minneapolis]. … They said ‘we are not charities. You have to spend money and pay premiums to join our co-ops. And we don’t take everyone. We sometimes say no to people with pre-existing conditions,’ ” she said.

Co-ops also may not have the industry clout of the big insurance companies. 

“They [co-ops] would have some cost advantages over private plans — they wouldn’t have to make a profit — but they are going to be running on a very small scale, at least initially, and therefore they are going to have very high administrative costs proportionate to claims,” Jost said.

“But again, the big problem is how are they going to get providers to give them a better deal than the providers give the private insurers. They may not even be able to legally do that under their contracts with the commercial insurers,” he added.

CNN’s Dana Bash, Lesa Jansen and Chris Welch contributed to this report.

Popularity: 2% [?]

The popular media is currently hotly debating the pros and cons of universal healthcare as President Obama ramps up his efforts to get his plan through Congress. Most Americans, however, know less about the issue than they should, even though more than 48 million of them have no health insurance and will thus be most directly affected by the implementation of a national system.

The major argument for a universal system can be found in the spiraling cost of health care in the United States, where insurance premiums continue to rise as do the costs of prescription medication and medical procedures — to the tune of about $2.5 trillion annually. In the current recession, providing health care benefits to employees is a burden many small businesses cannot bear. By the same token, workers who have lost their jobs are hardly in a position to pick up expensive private policies on their own.

Advocates for universal health care argue that such a system is inherently more efficient as it would encourage more preventive care, streamline record keeping for individual patients, and cut out on the repetitive mountains of paperwork that underpin even the most simple insurance claim. Proponents, however, are quick to counter with the real fact that there is no such thing as “free” health care. The services the government proposes providing will be paid for by taxes and no doubt by budget cuts in other areas, perhaps some as crucial as defense and education, thus shifting an unfair burden of cost onto healthy Americans who will be paying for their unhealthy counterparts while losing services in other sectors.

Given the government’s often muddled record of inefficiency, proponents also argue that the transition period from a private to a public system will be one filled with chaos and will, in the end, create an even larger bureaucracy than that already in place. Some estimates place the cost of implementing and supporting a universal health care system at as much as $1.5 trillion over the next decade, a figure far larger than the $634 billion set aside by the Obama administration to jump-start the system.

At the most basic levels, then, the “pro” argument is that the only way to reign in health care costs is to implement universal health care that encourages preventative medicine and levels the playing field of expense while improving record keeping and information sharing. The “con” argument is that such a system will raise taxes, force crucial budget cuts, limit consumer choice, and potentially encourage medical abuses as patients are more likely to access services they do not need because they are “free” for the taking. As is often the case, both sides have valid points, and in either scenario, the American consumer will continue to pay — either through higher taxes or through insurance premiums he may or may not be able to afford.

Given the enormous influence of the insurance and pharmaceutical companies and the significant profit loss a universal health care system would pose for them, the Obama administration faces a long, hard fight in Congress to get its package enacted into legislation and, provided they are successful, an even longer transitional period that will, most likely be fraught with mistakes and red tape. No matter how you shake out the scenarios, it seems that at least in the short term, it will be the American people who bear the greatest burden in either scenario.

Popularity: 13% [?]

Background: 

• I worked in the healthcare industry for 10 years, in administration and finance, as a Registered Nurse and as hospital business office, IT systems and clinical consultant.  I  worked in California, Texas, and Louisiana.  While working in Hospital Administration and finance I managed patient financial services which dealt with access to services, pre-certification of services for insurance purposes, and the collection of payment for service provided. I also developed an interface between a clinical practice analysis tool and patient financial information which allowed one major hospital to identify best practices based on outcomes and cost associated with specific services provided and the level of co-morbidities associated with the service.  As a nurse I worked in Burns Intensive Care, Med-Surg and long term care and rehabilitation. 

Facts:

• Hospitals must hire and train large patient financial services staff in order to properly pre-certify patients and collect for services rendered.
• Every insurance company has its own guidelines on what is covered and when pre-certification is necessary, without pre-certification insurance companies will not pay for services.  In some cases the insurance company provides pre-certification staff to the hospital / care provider during the normal work week.  Emergency care is provided w/o pre-certification.
• Insurance companies employ large staffs to sell insurance policies,  provide subscriber services, and review claims.
• Insurance companies are slow to pay the average days in accounts receivable for insurance claims was 90 nationwide between 1992 and 2001.
• Care providers partially base their charges for services on expected reimbursement for services, one hospital I worked at as a consultant went from being 22 million in the black to 20 million in the red in the span of a year after managed care carriers became prevalent in Louisiana.  The reason, days in accounts receivable averaged 270, and reimbursement rates averaged 32% of cost.
• Most healthcare providers will set up payments plans directly with the patient if no insurance is provided.  When doing this the cost of services can be lowered by as much as 50% below the same service when insurance is provided.
• Medicare and Medicaid have enormous amounts of fraud waste and abuse as a result of government regulation and lack of oversight.

What is wrong with the governments new plan?

• It penalizes people for not buying insurance?
• It raises our taxes to support the insurance companies, not to ensure we receive quality healthcare – the two are not the same thing.   Most Americans can get quality healthcare when they need it. 

The Solution:

1. Provide tax credits to people who have preventive care on a regular basis and don’t abuse drugs (alcohol, cigarettes, prescription drugs included) or food, allow medical savings plans that don’t force you to lose money if not spent in any given year.  This could be used to fund item 2.
2. Establish a medical sinking fund for all Americans which pays for catastrophic care only.routine care is and should remain a personal
   responsibility.
3. Establish national standards for the cost of services based on outcomes and best practices.  The system to do this has been used for at least the last ten years.
4. Allow patients to die with dignity.you should not be forced to vegetate because someone feels guilty or has a God complex.
    

Larry

Popularity: 2% [?]