Category Archives: Uncategorized

Why Healthcare Costs Are What They Are

Healthcare is a commodity in this country, and one with the most inelastic demand possible. Therefore, marketplace behavior that would be intolerable in another setting flourishes here.

I would like to here offer a primer on payer/provider behavior. In my day job I do hospital operations. Rather than clutter up the page with footnotes and data, I encourage you to go do your own research. Here I only offer the starting narrative.

Unreasonable Things CMS and Other Payers Do

1. Run the CMS Recovery Audit Program. This program has the power to renege money from hospitals up to three years after claim payment. In turn, claim payment can happen years after date of service. Operationally, this means that CMS can come back years after a patient was seen and unexpectedly take the money back. One can imagine how challenging it is to keep a business solvent while knowing this could happen at any time. At one of the three health systems I have worked for, the RAC reached back eight years!

There is an appeal process, but it is prohibitively slow and relies on third-party contractors. Of course, CMS holds onto the money during the appeal.

Ostensibly, RAC exists because chart review shows that the clinical services rendered may have been more liberal than the data warranted.

Per Seema Verma: “Due to the size of the Medicare program – our systems process over one billion claims a year – we are able to review less than one percent of claims that Medicare receives each year, which means the Medicare program can be susceptible to more improper payments, fraud and abuse than in the private sector.”

In my observation, peak RAC angst happened in 2012.  The hardship was not just the administrative burden, but the backlog for appeals.  CMS wrote a check it couldn’t cash when it handed out audits it was not equipped to address the appeals for.

RAC’s contractors had inconsistencies in what they recovered. The contractors got paid regardless of the appeal outcome, so the incentive was to play fast and loose with hospitals and other providers.  I am pleased to report that these RAC program flaws have been corrected thanks to successful lobbying, but the betrayal still runs deep.

2. Create Ministry Plans that masquerade as insurance. Healthcare ministry plans, which are cost-sharing organizations that are not required to cover medical claims like insurance, are exempt from the requirements of the Affordable Care Act (2010) due to their religious affiliation.

Theses arrangements were born of a need for reasonably-priced help covering medical costs for people too young, healthy, or wealthy for Medicare or Medicaid coverage. Yet, these organizations often fail to fulfill claims, and when that happens there is no legal recourse. Bills may not be paid in a timely manner, or ever.

Because of aggressive marketing, ministry plans are at risk of becoming a public health hazard in the future. I would not recommend them to anyone I know.  Hospitals and other providers will negotiate with insurance carriers, but usually not ministry plans. These patients are considered self-pay, which is a vulnerable place to be if you cannot keep up with the costs.

3. Offer Medicare costs for Durable Medical Equipment that far exceed market value.

The bidding process that Medicare uses for the equipment offered through Part B is constantly being altered. The formulas are not explicit and have suspicious thresholds for supply and demand. This is why you see home medical equipment for sale at Walmart or Amazon for far less money. However, the promise of reimbursement (often after purchase) is what keeps families coming back for more, rather than using the open-market — especially if they are cash-strapped from managing a chronic condition.

Losing access to affordable home equipment means patients can no longer live at home, which can mean even more expenses.

Is it possible the price confusion is the result of the lobbying and government favoritism that could be taking place?

4. Medicare held for ransom by pharmaceutical costs. Medicare is totally beholden to drugs that do not have alternatives. It cannot negotiate prices. As a taxpayer, this affects you very much.

Unreasonable Things Hospitals Do

1. Build off-campus hospital outpatient departments (HOPDs).  These have the convenience of a doctor’s office (read: ample parking) but give you a hospital bill. Industry-wide, volume is shifting to outpatient care. However, these outpatient centers are held to the same credentialing standards as hospitals, and thus are expensive to run.  Even with the added outpatient volume, most every health system still makes its money on inpatients, but that could change someday.

These centers are profitable, convenient, and serve as brand ambassadors for the system. Since the integrity of the labs, radiation safety, physicians, etc, are hospital-grade, HOPDs are actually my recommendation for your care whenever possible. Just know that it is not less care, nor less money.

2. Leverage the chargemaster. While few pay what is on it, the list serves as the starting point for contracting. However, the lack of transparency in bill itemization prevents patients from making informed decisions; any item for sale on Amazon has more detail on value than a procedure being done to your body. Unless all hospitals in a given market begin sharing their negotiated rates, this will not go away. The chargemaster is a vestigial structure in a world where healthcare costs exceed inflation.

3. Use the phrase, “Special Procedures” to refer to interventional radiology. All procedures are special! Seriously though, there is a history to the evolution of the terms, but the definitions are not clear, and you often see signage for both in the same hospital, referring to the same place. No strong consensus can be reached, thus perpetuating the frustration.

4. Not easily share medical records. Hard to think of a solution that won’t require intervention at the federal level. The large electronic medical record vendors in the nation oppose required interoperability, under the laughably-thin excuse of “patient privacy.” Non-sequitur: the government already has your social security number.

5. Perform futile resuscitations, and otherwise overtreat at the end of life. Statistically speaking, patients over 80 with a non-shockable heart rhythm who have cardiac arrest without witnesses (and thus for an unknown length of time) have a nearly nonexistent chance of leaving the hospital alive. Yet, CPR is expected. Families may not always think through what comes after. CPR is traumatic and painful for everyone involved, and if successful, could be just the beginning of a life compromised by feeding tubes or ventilators for someone already in poor health. In addition to thinking about when to stop trying to intervene on a body wanting to die, perhaps we also need to ask ourselves when to even start, and just who benefits. Is the family acting self-servingly by not letting go?

6. Surprise bills. Sometimes the hospital accepts the patient’s insurance, but one or several specialists treating them there do not.  According to studies, about 20% of in-network ED visits result in an out-of-network bill.

Hospitals frequently must contract with for-profit speciality groups to staff specialities like neonatology, anesthesia, obstetrics, radiology, and emergency medicine. These are not hospital employees. The groups these doctors do work for may or may not have negotiated reasonable rates with the same insurers as the hospital the patient is in.

Some states have a mediation process for emergencies, but few patients know about it.

The specialist shortages that are the raison d’être for the outside groups could be explained by the barriers to entry for a medical education (mainly cost + the opportunity cost of time), but that is a topic outside of today’s scope.

7. Tax-exempt status for dubious “community benefit.” Charity care is not required in order to be designated a not-for-profit health system; the company can do fluff things like health fairs, which are basically marketing, or surveys. Whether these community services make up for the lost tax revenue is highly debatable. This is how we end up with nonprofit hospitals that are actually highly profitable — in some cases even more profitable than their for-profit counterparts.

Men’s Fashion: All Eyes On…

Timothee Chalamet. He is part of the menswear vanguard challenging the notion that dressing up means black suiting. He uses color, textiles, and embellishments typically reserved for women — but why should they have all the fun?

Timmy has been consistently delivering impeccable looks for a couple of years now. With a big new movie about to come out, keep an eye on his fashion choices over the winter season.

Below are six favorite recent outfits, each of which has a dominant element that can be taken as inspiration.  While some of the tailoring will be difficult for civilians to pull off, let it inspire you to rethink gender restrictions and body proportions.

  1. Electric Blue.  Regardless of skin tone, there is a shade of rich blue that can work.

Haider Ackermann

2. Embroidery.  High contrast works best when used sparingly.

Haider Ackermann

3. Color Blocking.  Keep the neutral more prominent.

Haider Ackermann

4. Florals.  A black base grounds things and keeps it edgy.

Haider Ackermann

5. Evening Wear Beading.  Okay, we realize this may be double-black-diamond, expert level clotheswearing.  Something to aspire to.

Louis Vuitton

6. Gender Non-Conforming. *Warning: below is a trained professional on an enclosed track. Do not attempt at home.*  His success pulling off multiple femme elements is what makes this his best look ever. You have got the satin, the cinched waist, the curls, cropped pants, and a camisole top all in sync.

Consider trying just one of those elements if you are feeling daring.

Haider Ackermann

Euphoria Comedown

There were lots of reasons to love Euphoria and to miss it now that the season has ended, but the biggest reason came at the end.

Let us start from the outside and work inward: the cinematography was liquid gorgeousness. The music was dope. The makeup was EVERYTHING, especially the gold chain eyeliner. (follow @donni.davy on IG for more). It had a hilarious in-joke about The Wire.

But, the show most excelled at delving into the psyches of the characters (and by extension all of us) by having their motives called out. Regardless of what Rue claims, she IS a reliable narrator; childhood rejections and recognitions set in motion the belief structures for each of the characters. These beliefs then all collided with one another as adulthood approached. Many beliefs centered around how the character wanted to be seen by others, and how they subsequently, rapidly, taught themselves to cater to people’s neuroses to get what they themselves needed to maintain stasis.

How one saw oneself was secondary, but it was a strong undercurrent, which bodes well for the characters’ future, offscreen self-actualization journeys.

In the finale, Jules proved herself to be one of the more self-aware teenagers ever by summing up her modus operandi, which doubles as a gift to the viewer for providing the most compelling case for transgender acceptance in the modern canon.

To Jules, to conquer men is to conquer femininity, and after conquering femininity she wants to, “fucking obliterate it. And then move on to the next level.”

Here’s to you, Euphoria: you may be in recess, but your thought-provocation lives on.

Semantically Drifting in the Internet Topography (and Other Weekend Vibes)

Here is some of what we read and thought about this past week:

  1. There is an insidious, maladaptive focus on zealous employees  during recruitment. (The Atlantic)
  2. Meet the rural warriors stocking your Amazon cart. (The Verge)
  3. Why we assign geographical characteristics to vague concepts, especially in the digital “space.” (NY Times)

Weekly Reading June 24th

Things we have been pondering lately…

People living in urban communities with public amenities have better social ties plus more confidence in local government. AEI.

What do you value in yourself, and will that serve you long term? The Atlantic.

Rest in Power, Pinky. Tampa Bay Times.

Remote work is a boon for those living with disabilities. Angel List.

Subtle dismissiveness. You hate to see it. NYTimes.

…Which one spoke to you most?

Weekly Reading

Articles that Lady in Red found fascinating this week:

  1. When it’s okay to adopt the dialect of your audience: “It Wasn’t ‘Verbal Blackface.’ AOC Was Code-Switching.”
  2. David Frum elegantly documents Canada’s sweetheart stepping in it: “Justin Trudeau Falls From Grace”
  3. “Nobody wanted to hear me read ‘Ozymandias.’” Why are we all loving the Varsity Blues scandal?: “They Had It Coming”
  4. The best travel writing you may ever read: “Where Heaven and Earth Come Closer”
  5. “‘I am synthetic life form ‘Yoko K.,’ assembled in the US with components made in Japan…designed to assume the role of an ‘electronic musician.’ I am one of many secret agents sent to this time to plant magical thinking in people through the use of ‘pre-22nd century nostalgia Mars pop music.’” How to make hospital beeps more pleasant and more meaningful: “Anatomy of a beep: A medical device giant and an avant-garde musician set out to redesign a heart monitor’s chirps”

The Light Ahead

Assuming you believe income inequality to be a problem (economically, socially), then we must next turn our thoughts to alternative methods for economic mobility besides a four year degree, benefits of which do not always justify the costs. One such company creating an alternative is Pursuit in Queen’s, NY. Pursuit is a trade school for software development. It is also partly funded by bonds, where graduates pay back a share of income. “I believe tech can be a road to the middle class for large numbers of Americans,” said (Jukay) Hsu, a co-founder and the chief executive of Pursuit, a nonprofit social venture. “But there’s real skepticism about that among people who see the winners in technology as a small network of the privileged.” Pursuit’s success can likely be attributed to its adherence to high-demand, high-paying job skills, however, the model is worth replicating.  Construction, medicine, nursing, graphic design or art…what fields can you imagine creating a bond system?

ModCon Reviews: The Front Runner (film)

The Front Runner, starring Hugh Jackman as former Sen. Gary Hart (D-CO), is designed to make us question the media’s role in creating scandal, and in how much private character affects public service.

After the Miami Herald shames Sen. Hart into giving up his presidential race after catching him nearly red-handed having an extramarital affair, Hart eulogizes the death of privacy. Unfortunately, he is not the right person at the right time to persuade us of this casualty.

Today, the Miami Herald seems to have no regrets with its role in the 1987 scandal or its aftermath.

This affair was supposedly the watershed moment in which judgement of character got put into the hands of voters, rather than letting the political party act as sole judge. LIR strongly supports the democratic discussion of character that has increased since #metoo. Indeed, the film’s strongest asset is actually just in giving us a place to reflect and project on how times have changed, and whether that has been for the better or not.  Decision: better.