Insurance Company Consolidation: Anthem, Aetna, Cigna, Humana..et al.

[Therapist4Chnge]

FYI…Anthem increases bid offer for Cigna…AND Aetna makes a bid for Humana. UHC is the front-runner and other insurance companies are trying to consolidate to compete, as the gov't most likely won't allow more than 1 more consolidation amongst the major carrier.

WSJ Article

For anyone curious why I'm posting this in the clinical forum it is because these buyouts could have major implications on how we do what we do. The article also touches on one of my biggest concerns…Medicare "Advantage" plans…aka…managed Medicare. These are more restrictive "cost controlled" plans that squeeze private providers. Having fewer companies drives down competition and increases leverage for negotiating with the gov't and against clinicians.

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[erg923]

FYI…Anthem increases bid offer for Cigna…AND Aetna makes a bid for Humana. UHC is the front-runner and other insurance companies are trying to consolidate to compete, as the gov't most likely won't allow more than 1 more consolidation amongst the major carrier.

WSJ Article

For anyone curious why I'm posting this in the clinical forum it is because these buyouts could have major implications on how we do what we do. The article also touches on one of my biggest concerns…Medicare "Advantage" plans…aka…managed Medicare. These are more restrictive "cost controlled" plans that squeeze private providers. Having fewer companies drives down competition and increases leverage for negotiating with the gov't and against clinicians.

I frequently do disability file reviews for Aetna, although I am not directly employed by them. Last tme I talkeD to one of the medical directors, he got into a long discussion about the perils that these mergers pose. It was very interesting.

 

[AcronymAllergy]

So you mean insurance companies will start looking even more like the cable industry? I don't see how this could possibly go awry...

 

[Therapist4Chnge]

I guess we haven't learned from the telephone companies, banking industry…etc. It's bad for everyone but the shareholders.

 

[smalltownpsych]

I am on a variety of insurance panels and it seems that there is a direct correlation between size of company and ability to dictate the course of treatment and compensation so this does not bode well for either us or our patients.

 

[erg923]

Optum seems to "manage" their services more than many others. Not surprising that they are the largest and wealthiest.

 

[smalltownpsych]

Optum seems to "manage" their services more than many others. Not surprising that they are the largest and wealthiest.

Optum is the same or the new name for United Behavioral Health, right? They are the one I was thinking of too. They also run the mental health services portion of insurance for other carriers so some of my patients with Blue Cross are actually covered with them. I was on the phone with some "case manager" for a utilization review the other day because I "triggered an algorithm" and had to justify to this person (purportedly an LPC) why I was still treating this patient. Number one, I don't like to share confidential information in these situations even with a consent because of the financial pressure on the patient. Number two, I can't generate revenue when I am on the phone with them and they know it so it puts financial pressure on me to end treatment prematurely.

 

[Therapist4Chnge]

I don't recall if Optum is officially a subsidy of UHC, a spinoff, a re-branding of an arm of UHC, etc…but they are definitely connected. I'm only paneled on a handful of private insurers (and only on the medical side, not MH), so I haven't dealt with Optum directly, though I've heard some nightmare stories about them on various list servs.

 

[AcronymAllergy]

I don't recall if Optum is officially a subsidy of UHC, a spinoff, a re-branding of an arm of UHC, etc…but they are definitely connected. I'm only paneled on a handful of private insurers (and only on the medical side, not MH), so I haven't dealt with Optum directly, though I've heard some nightmare stories about them on various list servs.

Does being credentialed only on the medical side make it more likely that they actually reimburse your (neuropsych/rehab) services? And does it also perhaps avoid confusion with respect to whether your services should be counted toward any possible MH cap the pt might have?

 

[OneNeuroDoctor]

With the changes to Medical Home Models and the private options Medicaid in some States the reimbursement rate is going to be based on quality of services. Higher quality service equal higher reimbursement rate. I have insurance reimbursement from a number of companies that my employer uses but I get paid either a flat rate or by the service.

It is my understanding that there will be universal coverage so if one insurance company approves you then so will the others. I believe it is tied in with Mental Health parity act.

 

[smalltownpsych]

With the changes to Medical Home Models and the private options Medicaid in some States the reimbursement rate is going to be based on quality of services. Higher quality service equal higher reimbursement rate. I have insurance reimbursement from a number of companies that my employer uses but I get paid either a flat rate or by the service.

It is my understanding that there will be universal coverage so if one insurance company approves you then so will the others. I believe it is tied in with Mental Health parity act.

There are so many things incorrect or inacurrate and confusing about this that I am really beginning to wonder how you could be working in a hospital, but here goes...
The medical home model is not the same as the reimbursements tied to quality measures. Medical Home is a strategy for delivering services in a more integrated manner. It may or may not improve delivery of care, I have seen evidence on both sides of that so we shall see. As far as the quality measures go, most of the quality measures are measured by clicking in boxes on the computer and it is also debatable as to how much bearing this has on real patient outcomes. Universal coverage does not exist at this point in time. You still have to pay for coverage and many don't. I don't think any insurance company can deny you coverage anymore as long as you can pay or qualify for medicaid and that is a central component of ACA not part of mental health parity at all.

 

[OneNeuroDoctor]

I was working in a hospital for my postdoctoral and this is when I was approved through a number of insurance companies but I had no billing responsibilities. The hospital benefited but I was on a set salary. Now I have contracts with the same hospital and they pay us a flat rate per eval. The hospital indicated that the medical home model that started sometime recently was going to increase their rate of reimbursement. The model we are using for hospital Evals is a flat rate and they bill Medicaid, Medicare, or third party insurance. I get a percentage of billable hours for other work but I don't do any of the billing so I do have limited knowledge of billing. I guess it varies based on where you work and the states you work in.

 

[Therapist4Chnge]

Does being credentialed only on the medical side make it more likely that they actually reimburse your (neuropsych/rehab) services? And does it also perhaps avoid confusion with respect to whether your services should be counted toward any possible MH cap the pt might have?

Short answer: Yes.

Long answer: It depends.

Being credentialed on the medical side helps avoid most of the bogus "hoops" that providers still have to jump through when billing through behavioral health. For instance, sometimes when I see someone from out of state their insurance company will incorrectly kick the case from medical over to BH, which triggers a pre-auth process that is even more cumbersome. Typically I'll get faxed/mailed a 2-3 page form to justify services AND then they'd only grant me an intake, as they wanted me to submit the form and my intake for "further consideration for testing." I'd then have my staff call them and explain (again) that it isn't behavior health and then usually they'd apologize for the mistake *roll eyes* and then my staff would have to call back the medical ppl and go through the entire process again. Compare that to just being on the medical side where there is typically a pre-auth (checking the codes, that it is medically necessary, etc). Once I have that documented I can see a person for intake, testing, report writing, and feedback. Not all medical plans require pre-auth for neuropsych, though as an office policy I require documentation of pre-auth bc I find insurance companies to be untrustworthy.

As for being more likely to be paid…my collect rate w. pre-auth is upwards of 90% (or so), so I'd say yes. Even though there is "mental health parity", it is a complete joke. The BH side of things is a nightmare to navigate for neuropsych, at least that is what I've found in my limited experience dealing with them. They confuse it w. psych testing, try and put all sorts of caps on things, and generally the insurance customer service people have no idea what they are doing.

 

[smalltownpsych]

I was working in a hospital for my postdoctoral and this is when I was approved through a number of insurance companies but I had no billing responsibilities. The hospital benefited but I was on a set salary. Now I have contracts with the same hospital and they pay us a flat rate per eval. The hospital indicated that the medical home model that started sometime recently was going to increase their rate of reimbursement. The model we are using for hospital Evals is a flat rate and they bill Medicaid, Medicare, or third party insurance. I get a percentage of billable hours for other work but I don't do any of the billing so I do have limited knowledge of billing. I guess it varies based on where you work and the states you work in.

Yes, there are incentives promised to pay for being a certified Patient Centered Medical Home, our hospital will get a percent or two additional from at least one major insurer. This is separate from the quality measures additional reimbursement which all hospitals would be eligible for even if they are not using the PCMH model. At least that is how it was explained to me by our CEO who knows more about it than do I.

 

[erg923]

I don't recall if Optum is officially a subsidy of UHC, a spinoff, a re-branding of an arm of UHC, etc…but they are definitely connected. I'm only paneled on a handful of private insurers (and only on the medical side, not MH), so I haven't dealt with Optum directly, though I've heard some nightmare stories about them on various list servs.

Optum is UBH, btw

 

[LAPsyGuy]

Allowing health insurance to be for-profit businesses is at the core of both their drive to consolidate and their extreme cost cutting measures, which result in endlessly creative ways to screw over the insureds. The notion of a growth-oriented insurance market is disgusting and immoral, as is the growth-oriented hospital market. Allowing the Blues to convert in various states was a horrible idea. Mental health care sits at the bottom of this because it is harder to quantify and to manage outcomes and costs, and when attempts are made in these directions, patients get the shaft.

 

[erg923]

Allowing health insurance to be for-profit businesses is at the core of both their drive to consolidate and their extreme cost cutting measures, which result in endlessly creative ways to screw over the insureds. The notion of a growth-oriented insurance market is disgusting and immoral, as is the growth-oriented hospital market. Allowing the Blues to convert in various states was a horrible idea. Mental health care sits at the bottom of this because it is harder to quantify and to manage outcomes and costs, and when attempts are made in these directions, patients get the shaft.

Well, healthcare, in this country, is a business. I dont think this is "immoral," but that doesn't mean I believe it to be most practical model given the service that is needing to be delivered.

Outside the VA, I work for a company that has many larger insurers such as Aetna, ING, Metlife as clients. I suppose, as a disability claims file reviewer, I am part of their "cost saving strategy" (insuring STD is paid to those who are truly disabled). I dont see anything particuarly wrong with this, or my role in it, however.

 

[LAPsyGuy]

There are for-profit and not-for-profit businesses, and health and human services do better as not-for-profit businesses. There's nothing wrong with efficiency, but when there is a growth model that attempts to maximize returns for investors, efficiency turns into corner cutting which turns into harming clients and patients. Yes, this is all a business, but when greed is injected from the top down, things tend to fall apart and those at the bottom get drowned first. And that is immoral in my book.

 

[PsyDr]

The model we are using for hospital Evals is a flat rate and they bill Medicaid, Medicare, or third party insurance. I get a percentage of billable hours for other work but I don't do any of the billing so I do have limited knowledge of billing.

You say you bill Medicaid and Medicare and pull in 200k?

 

[smalltownpsych]

There are for-profit and not-for-profit businesses, and health and human services do better as not-for-profit businesses. There's nothing wrong with efficiency, but when there is a growth model that attempts to maximize returns for investors, efficiency turns into corner cutting which turns into harming clients and patients. Yes, this is all a business, but when greed is injected from the top down, things tend to fall apart and those at the bottom get drowned first. And that is immoral in my book.

I have been in both worlds and the world of business is coldly competitive and relatively free from moral judgments. I don't think that is a bad thing, it's just the way that it is and is the reason we have government regulations about business practices. My best friend is an MBA who works in real estate and makes 300k plus per year. I consider him an expert on business and I had an ethical question about a business decision once so asked him about it and his response was, "if it is legal, then you can do it and if it's on the line, then get an attorney to tell you that you can do it."

On the other hand, as Erg pointed out, the benefit is that the business model can also lead to increased efficiency, productivity, and innovation. I work a lot harder now when my pay is determined by my production than I did when I was on salary, that's just Behaviorism 101. I am also constantly thinking of ways that I can maximize my productivity and efficiency, I was just trying to figure out if it would make sense for me to start providing group therapy because of that. I also happen to like groups and there is a need (perhaps) so if I make more money, it's an all around win.

 

[WisNeuro]

On the other hand, as Erg pointed out, the benefit is that the business model can also lead to increased efficiency, productivity, and innovation. .

Not quite always the case. Plenty of data showing that providers order a significantly greater number of tests/services deemed unnecessary when they are paid "for service." In my own specialty, you will see a stark difference in the amount of time billed for a straightforward dementia eval based on whether or not a person is salaried, or is paid directly based on billable hours. I'll let you guess who does the longer eval. Additionally, these extra services do not lead to better patient outcomes. Philip Longman is a good read on this subject, he's pulled together a fair amount of data.

 

[LAPsyGuy]

I have been in both worlds and the world of business is coldly competitive and relatively free from moral judgments. I don't think that is a bad thing, it's just the way that it is and is the reason we have government regulations about business practices. My best friend is an MBA who works in real estate and makes 300k plus per year. I consider him an expert on business and I had an ethical question about a business decision once so asked him about it and his response was, "if it is legal, then you can do it and if it's on the line, then get an attorney to tell you that you can do it."

On the other hand, as Erg pointed out, the benefit is that the business model can also lead to increased efficiency, productivity, and innovation. I work a lot harder now when my pay is determined by my production than I did when I was on salary, that's just Behaviorism 101. I am also constantly thinking of ways that I can maximize my productivity and efficiency, I was just trying to figure out if it would make sense for me to start providing group therapy because of that. I also happen to like groups and there is a need (perhaps) so if I make more money, it's an all around win.

This ignores the incentives and pressures that different types of business models engender. the For-profit model incentivises an organization tend to the demands of people other than those being served, namely investors. Government regulation is almost always ones step behind and reactive to the sleazy business practices inspired and made necessary by this sort of incentive framework. Efficiencies are not in step with quality, but instead they are focused on profit maximization. Not-for-profit businesses, which are still businesses in most ways, have many more preemptive regulations built into the business model, but this does not mean that efficiency is hampered, it just means the organization is more interested in those that they serve. There is no profit to worry about, by definition. Instead revenue is usually funneled back into the organization because there are no investors to pay back.

So yes, business is amoral, and it is incumbent on society to provide structures and policies to funnel those amoral forces to specific ends.

 

[smalltownpsych]

This ignores the incentives and pressures that different types of business models engender. the For-profit model incentivises an organization tend to the demands of people other than those being served, namely investors. Government regulation is almost always ones step behind and reactive to the sleazy business practices inspired and made necessary by this sort of incentive framework. Efficiencies are not in step with quality, but instead they are focused on profit maximization. Not-for-profit businesses, which are still businesses in most ways, have many more preemptive regulations built into the business model, but this does not mean that efficiency is hampered, it just means the organization is more interested in those that they serve. There is no profit to worry about, by definition. Instead revenue is usually funneled back into the organization because there are no investors to pay back.

So yes, business is amoral, and it is incumbent on society to provide structures and policies to funnel those amoral forces to specific ends.

I have worked in both non-profit and for profit companies in this business and I really can't say that I have seen much difference in attitude toward or care of patients. I get what you are saying in theory but I just don't see it play out that way in the real world. I'm not sure why that is. Some of the most destructive dynamics I have run into have been at organizations with zero profit motive at all - publicly run. I have also seen those run well such as the VA where I spent a year. There are a lot of social and organizational variables at play that are confounding so I just don't think for-profit is bad and nonprofit is good is the best paradigm.

 

[WisNeuro]

I have worked in both non-profit and for profit companies in this business and I really can't say that I have seen much difference in attitude toward or care of patients. I get what you are saying in theory but I just don't see it play out that way in the real world.

That may be anecdotally true, but could also be confirmatory bias. The data is there to look at, both within this country and worldwide.

 

[smalltownpsych]

That may be anecdotally true, but could also be confirmatory bias. The data is there to look at, both within this country and worldwide.

Of course I realize that this is my own observation and not a systematic study. I don't have the time or resources to delve into the available data sufficiently so as with many issues and most people, I have to rely on less accurate heuristics. If I was in charge of finding a solution, then I would use a more effective strategy.

 

[WisNeuro]

Fair enough, I was just making the observation that for-profit healthcare models have not, actually resulted in improved patient care, outcomes, and cost effectiveness. In fact, quite a bit of data would suggest the opposite in many cases.

 

[medium rare]

This thread is good example of one of several reasons I don't take insurance.

Fair enough, I was just making the observation that for-profit healthcare models have not, actually resulted in improved patient care, outcomes, and cost effectiveness. In fact, quite a bit of data would suggest the opposite in many cases.

 

[smalltownpsych]

This thread is good example of one of several reasons I don't take insurance.

For profit healthcare and for profit health insurance are two different things. Although some insurance companies have gotten into the healthcare delivery business too, I think that is more of a strategy to keep costs down to keep their main business profitable. I do find it fascinating how these large health insurance organizations have rebranded themselves as healthcare organizations and how effective that has been for them. It's kind of like when the oil companies were advertising that they cared about the environment.

 

[WisNeuro]

For profit healthcare and for profit health insurance are two different things. .

Technically, sure. But, they are interdependent in our current system enough so as to be the same thing.

 

[smalltownpsych]

Technically, sure. But, they are interdependent in our current system enough so as to be the same thing.

Not even close to being the same thing. Provision of healthcare can range from a single private practice to a small rural private hospital to VA healthcare to a large corporate hospital with the latter at times being owned by an insurance company especially in the case of some HMOs. Also when an insurance company denies to pay for treatment and you have complications they are indemnified. We are not. I just found out that the armed forces insuranc, Tricare, was taken over by United Behavioral Health. Score another for the plutocracy.

 

[WisNeuro]

Very close to the same thing, most healthcare in the US operates under the private umbrella, with the largest exception being the VA system.

 

[LAPsyGuy]

Technically, sure. But, they are interdependent in our current system enough so as to be the same thing.

Agreed, they are very intertwined. Most insurance companies may not provide medical services, but they do get involved with making medical decisions both at the large group level and on the individual level through their medical directors setting policy limits and adjudicating requests for specific, non-standard services. For a couple of years, I sat on a committee that did the latter, and it was truly depressing.

Very close to the same thing, most healthcare in the US operates under the private umbrella, with the largest exception being the VA system.

Agreed. The are so intertwined as to be quite difficult to distinguish them at times. Insurance companies drive efficiencies through control exerted by medical directors. They simply won't cover things they don't want to cover (within regulations). If they don't cover it, it will rarely be offered. This means insurance medical directors are making clinical decisions for you and your doctors in many cases. In other cases, physicians are forced to do the funding of services with $ allotted by the insurers. This is crazy. In my opinion, insurance shouldn't exist for healthcare. If everybody was covered then risk pool risk would match population risk, and a funder could just direct pay. I know some businesses are moving towards self-funded plans that are administered by insurers.

 

[Goobernut]

I just found out that the armed forces insuranc, Tricare, was taken over by United Behavioral Health. Score another for the plutocracy.

Tricare has always been third party administered, and is in different regions administered by different companies. It has changed hands multiple times over the 20 years I've been paying attention to it hah. The switch to separate out mental health was a couple of years ago I believe. I was in undergrad and in FL at the time.

Do you have any additional comments on why this is a bad or good thing from a provider perspective? Is United Behavioral health a crappy administrator?

 

[Fan_of_Meehl]

This ignores the incentives and pressures that different types of business models engender. the For-profit model incentivises an organization tend to the demands of people other than those being served, namely investors. Government regulation is almost always ones step behind and reactive to the sleazy business practices inspired and made necessary by this sort of incentive framework. Efficiencies are not in step with quality, but instead they are focused on profit maximization. Not-for-profit businesses, which are still businesses in most ways, have many more preemptive regulations built into the business model, but this does not mean that efficiency is hampered, it just means the organization is more interested in those that they serve. There is no profit to worry about, by definition. Instead revenue is usually funneled back into the organization because there are no investors to pay back.

So yes, business is amoral, and it is incumbent on society to provide structures and policies to funnel those amoral forces to specific ends.

'Government regulation is almost always one step behind and reactive to the sleazy business practices inspired and made necessary by this sort of incentive framework.'

Wow...I have just witnessed several months/years worth of experiential pain working as a psychotherapeutic provider in the Veterans Affairs system distilled down into a single sentence.

 

[smalltownpsych]

Tricare has always been third party administered, and is in different regions administered by different companies. It has changed hands multiple times over the 20 years I've been paying attention to it hah. The switch to separate out mental health was a couple of years ago I believe. I was in undergrad and in FL at the time.

Do you have any additional comments on why this is a bad or good thing from a provider perspective? Is United Behavioral health a crappy administrator?

United Healthcare is number 14 on the fortune 500. This gives them too much power and influence IMO. There have been reports that they are imvolved in making sure that ACA benefited insurance companies more than consumers. Gere's one about the connections between government and the industry. http://dailycaller.com/2015/07/12/obamacare-chief-nominee-pounded-on-conflicts-of-interest/
http://dailycaller.com/2015/07/12/obamacare-chief-nominee-pounded-on-conflicts-of-interest/
And another about consolidation of the big players
http://www.latimes.com/business/la-fi-health-net-centene-deal-20150702-story.html
Also, UBH in particular have a strategy to have providers on the phone to justify treatment. They know we don't make money while on hold. I also don't see why I have to talk to somebody with questionable credentials about my patients.

 

[smalltownpsych]

The insurance companies want people to see the doctors and them as on the same team. They are not in the business of providing healthcare, they are in the business of limiting it. It is true that the more powerful they become then the more they can dictate what we do. I won't argue that. Every day they are working to have more and more power over the industry. That's just what large corporations do. Even the largest private hospital company, Universal Health Services, is only number 324 on the list of top companies. All of the companies listed in the title above are much higher up on the list and thus more influential with United being by far the largest.
Here is another interesting article about it
http://www.fiercehealthpayer.com/st...ce-ceo-pay-exceeds-10-million-2014/2015-04-10

 

[Justanothergrad]

Managed care was a reaction to the unregulated approach to health/MH that went on for a while. Unfortunately, it is doing more to impede treatment than ensure it at this point. As smalltown said, they don't make money by giving it away. It's a lot like a casino.

 

[smalltownpsych]

Managed care was a reaction to the unregulated approach to health/MH that went on for a while. Unfortunately, it is doing more to impede treatment than ensure it at this point. As smalltown said, they don't make money by giving it away. It's a lot like a casino.

Many years ago I used to work with one of the first managed care companies, FHP, that was started by a physician to compete with and provide better services than the other systems. Eventually the bigger insurance companies followed suit and created their own managed care and then bought the smaller companies out. Now almost the entire marketplace is managed care and I don't think that is a good thing even though initially managed care was a benefit.

 

[LAPsyGuy]

Managed care was a reaction to the unregulated approach to health/MH that went on for a while. Unfortunately, it is doing more to impede treatment than ensure it at this point. As smalltown said, they don't make money by giving it away. It's a lot like a casino.

What do you mean by unregulated? Regulation usually means government control, but health care had regulation at the time managed health care was implemented. Managed HC was a market response to the fee for service model in which doctors were felt to have too much control and the incentives droves doctors to do more DOVs, tests and procedures. One could argue that Medicare was managed care because of pre-set reimbursement rates and mechanisms like DRGs, but this is not what is usually meant by managed health care. Managed health care referred to the KP model of closed, exclusive provider panels and pre-paid care with decreasing levels of control and coverage as you move into PPO and FFS levels.

 

[Justanothergrad]

What do you mean by unregulated? Regulation usually means government control, but health care had regulation at the time managed health care was implemented. Managed HC was a market response to the fee for service model in which doctors were felt to have too much control and the incentives droves doctors to do more DOVs, tests and procedures. One could argue that Medicare was managed care because of pre-set reimbursement rates and mechanisms like DRGs, but this is not what is usually meant by managed health care. Managed health care referred to the KP model of closed, exclusive provider panels and pre-paid care with decreasing levels of control and coverage as you move into PPO and FFS levels.

I didn't mean the term regulated in relation to government control, only a broad sense of oversight and management. It was not regulated in the same way that it is now. No matter if that regulation comes from government or private industry, the processes inherent to billing and service use were far more open then. Accordingly to the corrupted use of the fee for service model took off. The flip side, now many people can't get the services that they need because of hoops, awaiting authorizations, etc and many providers spent a large amount of their time doing work that does not translate into service. Both translate into large bankrolls collected by insurance. Before it was the provider able to bill excessively, now the table has flipped. My hope is that the pendulum swings back to the middle. Neither extreme is extremely helpful for clients.

 

[smalltownpsych]

I guess we haven't learned from the telephone companies, banking industry…etc. It's bad for everyone but the shareholders.

Maybe I should buy some stock in these companies. If you can't beat 'em, join 'em.

 

[LAPsyGuy]

Maybe I should buy some stock in these companies. If you can't beat 'em, join 'em.

Ha. Perhaps, but my guess is we're heading towards single payer, which doesn't bode well for those companies unless they become administrators.

 

[smalltownpsych]

Ha. Perhaps, but my guess is we're heading towards single payer, which doesn't bode well for those companies unless they become administrators.

I don't see that happening. Those companies are awfully powerful to just go away. Has anything like that ever happened in our country? I can't think of it. We have broken up big companies before, but to dissolve an industry, I don't think it has happened.

 

[WisNeuro]

Well, once it reached a breaking point, I can see it happening. Costs are unpredictable and outpacing inflation year after year, sometimes by double digits. When you charge up to 50 grand for a simple appendectomy, something is wrong. We shouldn't be able to fly to Europe to pay out of pocket for an operation out of pocket and pay far less, airfare and lodging included (and with better clinical outcomes), than getting an operation done in country. At some point, things will have to change.

Edit: I was curious about the actual numbers. An archives of internal med did a recent study, appendectomy ranges from 1500 to 180,000. Averages 33,000. That is ridiculous for such a simple procedure.

 

[AcronymAllergy]

Well, once it reached a breaking point, I can see it happening. Costs are unpredictable and outpacing inflation year after year, sometimes by double digits. When you charge up to 50 grand for a simple appendectomy, something is wrong. We shouldn't be able to fly to Europe to pay out of pocket for an operation out of pocket and pay far less, airfare and lodging included (and with better clinical outcomes), than getting an operation done in country. At some point, things will have to change.

Edit: I was curious about the actual numbers. An archives of internal med did a recent study, appendectomy ranges from 1500 to 180,000. Averages 33,000. That is ridiculous for such a simple procedure.

Relatedly, did the article mention if those numbers reflected what was initially billed/charged, or what was actually paid?

 

[WisNeuro]

It would appear that it was the billed cost, although not 100% clear.

 

[smalltownpsych]

Well, once it reached a breaking point, I can see it happening. Costs are unpredictable and outpacing inflation year after year, sometimes by double digits. When you charge up to 50 grand for a simple appendectomy, something is wrong. We shouldn't be able to fly to Europe to pay out of pocket for an operation out of pocket and pay far less, airfare and lodging included (and with better clinical outcomes), than getting an operation done in country. At some point, things will have to change.

Edit: I was curious about the actual numbers. An archives of internal med did a recent study, appendectomy ranges from 1500 to 180,000. Averages 33,000. That is ridiculous for such a simple procedure.

Wow, that range is really wide. I wonder if the higher ones are because the appendix burst or some other type of complication. On the other hand 1500 bucks sounds pretty low. The whole healthcare industry uses some pretty bizarre numbers. I just received an annual financial review and apparently my RVUs and gross billing are quite a bit lower than the average psychologist in a hospital setting based on MGMA statistics. Apparently, the mean billing for a psychologist working in a hospital setting is $280k. The top 90% are supposedly billing over 400k. If I could bill that much, I would be a wealthy man.

 

[WisNeuro]

"The researchers examined 2009 data that hospitals were required to submit to the state on 19,368 patients with appendicitis. To get the fairest comparisons, the researchers included only uncomplicated cases with hospital stays of less than four days. Patients were 18 to 59 years old."

 

[LAPsyGuy]

I was in the hospital industry for several years, and the $ amounts in the charge master (list of how much each item and procedure costs) are simply made up. I know it sounds like an extreme claim, but it's true. They're made up because the hospital knows nobody will end up paying it. Either insurance and insureds pay contracted amounts which are only a fraction of the charge master amounts, or the uninsured are cut "deals" which hospitals can list in their charitable or another account write offs. And, of course, all of them would adhere to the Medicare DRG requirements. That's why there is so much variation in the article.

 

[LAPsyGuy]

I don't see that happening. Those companies are awfully powerful to just go away. Has anything like that ever happened in our country? I can't think of it. We have broken up big companies before, but to dissolve an industry, I don't think it has happened.

The companies' businesses wouldn't necessarily go away, the would just change, and this happens all the time through regulation and market changes. Insurance companies went from insuring older adults to administrating and providing gap insurance. Medicare part D created pharm management businesses out of thin air. Government turned off analog TV just a couple of years ago.