duffpkg

There is not one silver bullet or even hundred or thousands of bullets that are going to magically re-engineer 1/5 of the US economy. Measuring costs is really hard, measuring outcomes is even that much harder -- maybe more or less impossible in the aggregate.

The heart of the question comes back to what you actually want to fix. I don't know you. A lot of people would just like to pay less for the thing they currently receive which is a nice sentiment but often hard to resolve. A large set of those people are actually upset because they have been led to believe they are paying a lot more than other people for the same thing, which I do not believe to be actually true.

One solution that does seem palatable to a lot of people, not me, but a lot, is "I would like like to appear to pay less for what I receive while the real costs are hidden and subsidized in a way that is much less visible to me". While popular this view is not popular enough to adopt legislation to that effect.

In practical terms detailed policy legislation that makes losers out of a lot of low value transactional middle men would see some very meaningful across the board cost reductions, probably 7-10% (500 billion or more). Top of that list would be intelligent standardization and regulation of transactional medical billing process. This would/could look a little bit like how we regulate banking between financial institutions. Very sexy I know.

I don't mean this to offer any political commentary one way or another but as someone who has worked at length with Medicare, HHS, CMS, VA, HRSA, and more or less every alphabet soup federal appendage remotely related to healthcare and medicine. No, I do not think any version of "medicare for all" is a remotely plausible solution to any healthcare problem other than getting healthcare lobbyists much larger yachts.

I wrote Hacking Healthcare for O'Reilly, I've managed hospital systems and group practices, I've been a patient with a life threatening illness. This is a really low effort article, it doesn't even really define what it considers "healthcare". In the US healthcare is 1/5 or more of the entire economy, so who profits from 1/5 of all US economic activity is a silly premise.

The US doesn't have one healthcare system, it has 50+ (or 51, ...59, is healthcare in Puerto Rico part of the US healthcare system?, how about American Samoa?). Contrary to many peoples opinions the "healthcare system" is not operated or overseen primarily at a federal level. The federal government is one of the largest buyers of healthcare as an insurance provider, that is true.

Comparisons to other countries that are much much smaller than the US are sort of silly to me. Europe does not have one healthcare system. Subsidized education and price controls in foreign systems also make comparisons excruciating. I think it is usually a canard. OECD data is, in a word, "garbage", as it relates to healthcare. Just one example: In the US, eyewear for seeing purposes is healthcare. In almost no other countries do you need a prescription for eyeglasses. Prescription eyewear in the US is a 20-30 billion dollar market, depending on how you want to count it.

I think the mechanisms for paying for healthcare in the US are really inefficient and involve too many intermediaries. This is a result of a lot of accidents of history. America is a very physically large country with a lot of people all over it, we expect very high standards of care, we consume a tremendous amount of pharmaceuticals, we have wildy abundant and relatively inexpensive food that seems to be correlated to our being much more overweight than a lot of other peoples, we engage in a lot of dangerous activities at a rate that far exceeds what a lot of other peoples do that seems to correlated with our culture, on and on.

Instead of hand wringing about differences between ourselves and other cultures we would be better served looking at boring things like medicares 3 million pages of medical claim guidelines, clearing house operations and conflicts of interest, better incentives for state level responsibility, antitrust litigation, lots of practical things that don't make click bait headlines.

Several people have raised the point that if the discounts are automatic why not just change the pricing? Pharmaceutical pricing and a lot of healthcare pricing in general are strange in the sense that they are organized to capture what certain plans/institutions will pay. If there is a plan out there that says "we will pay $540 for a month of lifesaviex" you are going to see prices at $540 or above to capture that even if in other contexts some patients are getting it at $35 a month. There is a lot to potentially discuss about that but cherry picking one interesting thing... Many very large employer plans are administrated by the insurance companies names you are familiar with, Anthem, United, etc. However the details of the plan, including reimbursements, are actually set by people at the employer, not the plan. There is someone in the giant beauracracy at these companies who compiles/edits/approves a massive spreadsheet and out into the market it goes. Mistakes are common.

In a similar vein, some poorly thought out reimbursement rate setting by CMS/HHS related to drug testing wasted at least 216 million dollars. A virtual cottage industry sprung up around it while it was in effect. It was not an isolated incident.

https://oig.hhs.gov/oas/reports/region9/92103006.pdf

First do no harm

This is reminiscent of an experience we had at ClearHealth with managed hospital aesthetics. Not a scientific study in any sense, but as part of rebranding a hospital group, the color scheme was changed from a neutral green to a much brighter orange. The change coincided with a small but meaningful increase in mortality for procedures done on the associated floor. Enough that we reverted to the older aesthetic. The mortality change reverted as well. Chalked it up to coincidence. This process then repeated at two other separate campuses. I can't rule out this was some sort of reverse "Hawthorne Effect" where our communications about the change were the source of the problem but it bothered me enough to mostly put an end to our appetite for large scale aesthetic redesigns.

Wrote Hacking Healthcare, healthcare executive for 20+ years...

About 10 years into my career we had already been managing some very large hospital groups but ended up with a mangement contract for a diverse group health system that through accidents of history including some dental clinics. ~50 suites across several sites/brands. I had had some exposure to dental clinics and generally had not been impressed but not overly concerned either.

First meeting we had with the senior staff across the clinics set my hair on fire. It was one of the most callous, fraudulent and shocking things I had ever seen in my career. Dentistry does not have a notion or ethical obligation of "first do no harm...". The entire agenda of the strategy setting meeting was how to trick "patients" into unecessary procedures, generally defraud insurance companies (especially breaking things across many visits that could easily be done in one) and every other deceptive way to inflate profit at "patient" expense that could be conceived. There were quotas for procedures, something unimaginable and defacto illegal in a healthcare setting. Needless to say we divested the dental clinics as soon as possible. I came to find in later years that those modes of operation are more or less commonplace in the industry.

I think there are valid questions about the medical efficacy of annual checkups that are heavily weighted by individual patient characteristics such as existing conditions, age, weight, etc.

Seperate from medical efficacy there are a lot of reasons why insurers want you to have an annual visit with a medical provider which has to do with:

1) Assignment of you to a provider. Many, many people are autoassigned a primary care provider by their insurance, they often change this when they actually schedule a visit. Allocation of patients to providers is a very large aspect of manging health plans.

2) Data aggregation and validation of your information. People sign up with unbelievably garbage information and it tends to persist, even on employer provided plans.

3) Baseline medical status such as weight and vitals. Insurers aren't looking at this information directly but it comes through via billing codes for the exact types of exceptional cases insurers want to measure.

These have a huge impact on the actuarial aspects of developing and managing health plans.

PS: Depending on the patient pool, for lots of pools insurers no longer put much economic weight into prevention as it has played out that insurers end up paying for the prevention but patients change insurers so often that they change before the insurer benefits from the effects of the prevention. Incentives are a very messy thing in healthcare between patients, providers and insurers.

I'm sorry to say but there is a lot of nonsense in the other comments here. I wrote Hacking Healthcare for O'Reilly, created the ClearHealth/HealthCloud Open Source EMR system, and most importantly I have, amongst other things, actually managed dozens of rural hospitals and clinics.

First for context, the Center for Healthcare Quality and Payment Reform (CHQPR) is an advocacy organization for the types of institutions this report discusses. I think that is important context.

Second, what is rural? From a healthcare standpoint rural typically refers to area of populations centers of 50,000 people or less. Examples in California that might be familiar to people living in the San Francisco bay area would be Humbolt and Mendocino counties. This report includes some semi-rural areas, places similar to something like Yuba City, CA, a population center of about 160,000.

Thirdly, the main point is that what "rural" hospitals get paid for services from insurance companies and what it actually costs to provide those services, continues to get further and further apart. In my first hand experience, this is true. Number one amongst those is staffing, today staffing costs have risen dramatically faster in rural areas than in urban and semi-urban areas -- though they have risen their as well. The staffing levels and types of personell at what is legally called a hospital are heavily regulated and have continued to to expand. Medicare in particular is pretty "unfair" in its latest fee structures regarding these issues though HHS does provide other types of subsidy to rural areas. The meat of the report is that if that continues unabated, one hundred or more hospitals will likely "close". Closing may mean to completely cease operation or in other cases mean to continue to operate but as something which cannot legally be called a "hospital".

Finally, as a report which is not really in-depth, not really independant of the organizations it is advocating for, provides little in the way of citations and data, I am somewhat dubious of its value being posted to HN at all, other than to act as a punching bag around which everyone can throw the usual jabs at the US healthcare system as a whole.

I am frequently asked about why systems in institutional healthcare are so hard to modernize, this has come up a lot related to pricing transparency. While HL7 is in theory a standard, in practice it is a semi-parseable "email" between two parties that know each other.

Widely used systems like EPIC have bugs and quirks that have existed so long that the bugs themselves have become their own standard. Because HL7 relationships typically happen between longterm consistent partners both parties tend to evolve the format to suit localized needs and this business logic and the reasons for it are lost to time. It isn't that rare to find HL7 interfaces that have been in use for 20+ years that have become vital black boxes. HL7 2.x, still widely used, was originated in 1989.

In a lot of case modernization like FHIR is nothing more than taking the old garbage and putting it in a new fancier bag.

As whacky as HL7 may seem it is really nothing compared to its much bigger uglier older brother, X12 837/835, used for communication of billing information from performing entity to insurer.

There are a few relatively commodity items you have mentioned, flu shots for one, mammogram possibly another, but for > 65% of patients those are already covered at extremely low/no cost. Yes, there is room to help the remaining 35%.

As you get into xray, clinical laboratory, other imaging things become very complicated where the order from the provider is commonly bound to a particular facility. Trying to get a provider to write an MRI order to a facility they have not worked with before is often a multi-day process fraught with error due to complexity in the order itself. Most patients cannot get their providers office in active communication long enough to even try it. For procedures there is an exponential explosion in complexity. Electives are really, really complex. A birth or a hip replacement is not the same thing across facilities so how do you compare code level pricing?

With drugs GoodRX has produced excellent results for patients. I think that works so well because overwhelmingly drugs are commodity goods.

I do see an oppourtunity because health systems spend a tremendous amount on patient acquisition currently but I am having a difficult time seeing the dots connect into pricing decisions by patients.

Wrote Hacking Healthcare for O'Reilly, long time health/tech exec, yada, yada... I'm really glad this pricing transparency information has become available but unfortunately so far I don't think it has provided a lot tangible value to consumers/patients. When you take into account the following:

- acute care (where there is not a lot of oppourtunity for discrection based on price) - proximity - insurance networks - complexity of care itself

What I have seen for most patients most of the time it is pretty difficult to put this information into practice. Now this information is having a much bigger effect on the relationships between health plans, providers and health systems which is positive.

I'd be really open to discussing with anyone ideas about how this information can be combined with other resources people may not know exist and how it could be possible to make it more useful for patients. Feel free to reach out to me:

du@50km.com

Typically it is something you do in addition to insurance, though there is not a one size fits all model to it. Different providers and systems offer different levels and types of it. Atlas MD in kansas is an interesting one which is aimed at average income people and offers some pharmacy and labs at heavily discounted prices. From a cost savings standpoint things like x-rays, ultrasounds, ECG/EKG, stitches, cast removal, minor in office procedures, etc, are often done at no additional cost beyond the annual price. An ECG/EKG might be as much as $400 or more against your deductible, which instead could go toward direct primary care where it would be included.

In particular if you have say a chronic condition which remains unresolved after several interactions with the general purpose health system a direct primary care doctor has the time to put towards your case on an individual basis to potentially get to the bottom of it. My experience has been that they also do a much better job at management of chronic conditions but I would really like to see some more studies done in that area.

Wrote Hacking Healthcare for O'Reilly, created ClearHealth/HealthCould open source EMR, built and operated ~90 acute care management services organizations (MSO) (the "things" that operate the non-medical aspects of many acute care systems).

Healthcare is highly dysfuctional but I want to dampen the notion a little bit that it is in some unique and new kind of collapse today. Everything you are stating is nearly verbatim what was being said in the 1980s at the dawn of HMO legislation which was somehow supposed to fix things.

There has been a lot of pushing the food around the plate since then. My view is that there are three legs to the tripod of the healthcare system, providers, patients and insurers. For fourty years those three legs have been fighting each other on many fronts and no leg is willing to give substantial ground. If I had a magic wand I would bring into existence a being of profound integrity and leadership that could negotiate meaningful compromises between those three groups but I think practically speaking, that is a pipe dream. The current status quo will continue, more or less, how it is for several decades yet.

I will agree with the other comentator that if you are sick a direct access primary care doctor or concierge doctor can really help. In many cases they can end up saving money versus deductibles and by helping you find specialists and facilities in your budget and timeframe. They vary but can be found in most markets for $1500 - $3000 per year. That's not cheap by any means but something that can pay for itself quickly.

I would also say to OP, seriously consider becoming a direct access provider. Feel free to reach out to me and I can put you in touch with some folks who you can talk to. You are not alone in your sentiment and in large part those sentiments are what led to the creation of direct primary care.

du@50km.com

There is the classic triangle of patients, providers and insurance. I think in any path you choose you have to think about which leg of the tripod you want to put forward.

There is this wealth of new pricing data but I haven't yet seen it employed in really practical ways that help patients day to day so I think there are some oppourtunities there. I think GoodRX has done a very good job in improving patients decision making around drugs as an example.

The other point I frequently make is maybe not to overshoot too far. There are a LOT of simple problems that need solving. I think I see a pitch about this or that "reimaging healthcare" every day. In practice there are huge and obvious problems in the basics of provider and patient communication. For people with serious illness making sure the patient knows and can get to the right place at the right time is very underserved.

My personal opinion is that human nature and relatively complex rules about what is and isn't HSA acceptable, tends to make it difficult to reap the tax savings that the system is possible of providing. I have worked with a number of startups trying to determine whether their offering can be paid via HSA and the rules are conflicting and ambiguous that without tens of thousands of dollars in legal fees (which even then only offer some piece of mind) its difficult to determine.

It's just a very complicated thing for people to have to deal with, an example of a potentially covered item: "Over-the-counter medicines and drugs - Effective January 1, 2020, expenses are generally reimbursable unless used for general well-being or for purely cosmetic purposes. Over-the-counter medicine and drug expenses that are incurred after January 1, 2020, are generally reimbursable. This may include, but not limited, to acetaminophen, acne products, allergy products, antacid remedies, antibiotic creams/ointments, anti-fungal foot sprays/creams, aspirin, baby care products, cold remedies, (including shower vapor tabs), cough syrups and drops, medicated eye and ear drops, ibuprofen, laxatives, migraine remedies, motion sickness, medicated nasal sprays, pain relievers, sleep aids, teething gels, and topical creams for itching, stinging, burning, pain relief, sore healing or insect bites. See Kits and Vapor units and refills."

But then within each of those there are things that are and things that aren't, sometimes based on your intent. All that together is a lot of work considering the limits are $3,650/$7,300.

In particular a phrase like "...generally reimbursable unless used for general well-being..." is the sort of tortured thing you only find in a bureaucratic nightmare like healthcare.

I don't think I know enough about it to offer a meaningful opinion. It appears to be an offering that is employee sponsored so without understanding the costs to the employer it is difficult to compare it with anything. A point that I don't think is all that well understood is that some employer funded plans, while administered by someone like UHC, it's actually the employer that has a large say who, what and how much something is covered. Speaking for myself, I would want to consider what my out of pocket cost to see a top specialist of my choosing in my area would be. Also personally I am not a fan of HSA plans.

I am in agreement that it is reasonable for most patients most of the time to be able to receive some sort of useful estimate to make decisions with. The passage of the "No Surprises Act" was a very positive development in my opinion. https://www.cms.gov/nosurprises

There are. In fact this is a quickly growing segment. Often these folks cater to richer patients and are called "Concierge Doctors". Atlas MD in Kansas is a very interesting system aimed at all levels of income and they call it "Direct Primary Care".

I'm not sure the short answer is adequate but a few things:

1) US healthcare is absolutely huge, it's perhaps 20% of the total macro economy. Changing anything in 20% of the entire economy is going to take a long time.

2) There has been really significant changes regarding price transparency and "surprise" billing in the past 5 years, so there is momentum to improve the patient experience but see #1

3) Regarding hospitals, many hospitals might appear to be one thing but are not (some systems are fully vertically integrated). They are much more like medical malls, often as a result of CPOM. What you percieve as one thing actually involved dozens of different business entities and hence very discoordinated billing.

Something that is very little known to most lay people but has profound implications on how the industry is structured are laws loosely called "Corporate Practice of Medicine" (CPOM). A little more than half the states have some version of them. Simply put they require that the organization legally practicing medicine must be owned and operated by people holding medical licenses only. This defacto creates a medical entity for that purpose and a sistered non-medical entity for business operations. Not speaking to the broader reasons of why those laws can potentially be good, the practical result of those laws all but requires many "middle men" in the operation of medical organizations.

I hope your daughter is doing well now. I wrote Hacking Healthcare for O'Reilly, yada, yada. If you still have these bills and would consent to sharing them with me they may make a good example to share publicly (redacting any private info) to help explain what happened, what's there and why.

You can email me at du@50km.com .

I wrote Hacking Healthcare for O'Reilly and I've spent the bulk of my career as a CEO and senior executive operating large health systems. It is a meaningful step forward to have most of this data in the public sphere but I think it is still early and that a lot of work has to continue to shape and analyze this information in a way that is more meaningful and practical for patients.

Appreciate the complexity of billing codes, these are not created by hospitals but by by the American Medical Association, Center for Medicaid/Medicare and a soup of other organizations. There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes (reasons justifying the procedure), creating a space well into the quadrillions of possible routine combinations. That's a large restaurant menu.

There are a number of other comments comparing hospital pricing to retail type interactions. It is also important to consider that hospital interactions involve unexpected and unknown things that aren't easily captured in a pricing context before you get there.

From an instution standpoint there are some bad apples but a lot of organizations that are not complying are not complying because they are facing technology and operational issues that are stopping them from complying. From the trenches in my consulting practice one example is an institution whose has a core element of their billing system, that is largely a black box even to them, using technologies that are decades old. Why would someone continue to rely on that? Because it has direct integration with critical partners and counterparties that was set up decades ago and that continues to work.

Replacing it is underway but is costing 8 figures and taking years. The potential fines are small relative to that and there isn't much they can do to comply in the immediate term anyway.

For context understand that Medicare billing routinely involved actual physical dial-up modems somewhere in the chain (even if it was invisible to you) until late 2018.

An ICU unit isn't exactly a single room. There are different configurations but they typically involve some sort of centralized monitoring station and 5-20 ICU "beds". Total cost of that / number of beds. Everything in hospital construction is expensive, ICUs are at the extreme end of that. Huge power requirements, medical gas lines, fixturing and surfaces needs to be able to be disinfected, special air, special water, on and on. It has requirements very similar to an operating theatre.

The reason they cost so much even if no one is in them is because of what a "bed" means. It isn't the literal bed, it is a unit a treatable/treating capacity. Requiements vary somewhat by jurisdiction but it's going to mean 24/7/365 nursing and attending doctor staff. You can't just call them in when a patient shows up, they need to be scheduled and available. Then ICUs will also need a large cadre of oncall specialists, neurologists, cardiac, laboratory testing staff, and on an on to cover a huge range of possible patient needs. Stocked blood units, stocked medicine units. All those things have costs whether a patient in in the bed or not. Hospitals to a large extent spend an incredible amount of money on capacity. No wants wants to end up in a hospital to have them say, "oops, we didn't expect your spleen to rupture today, Dr. Bob won't be in till next tuesday so you are out of luck, sorry"

Author of Hacking Health for O'Reilly, managed operating companies for hundreds of hospital facilities, etc...

One widely under realized aspect to healthcare costs in the US (there are many) is the very high number of ICU beds per capita, ~35 per 100,000 people. While it gets a little complicated to compare apples to apples, a reasonable person could say we have 30% more than germany which is the only european contry that is close and double to triple most other nations we are typically compared against like the UK and Canada.

ICU beds are extremely expensive to both build and operate. Also for the lay person the term "bed" has a specific regulatory meaning and does not refer to just the physical existence of the room and bed but means that it is operational with highly regulated amounts of staffing, services and equipment. Each "bed" has costs in the millions to build and equip and operating costs are typically in the neighbood of $10k to $40k per "bed" per day, occupied or not, a large portion being labor.

Healthcare executive 20 years, wrote Hacking Healthcare for O'Reilly... So long as this is used for routine filling of routine medications with low risks I think this can work. However it is also my opinion that Walgreens is a very, very poorly run organization. If you followed the Theranos story and documents you can see just how poorly.

To the people saying pharmacists should not be involved at all, that is insane. Prescription errors are a very large source of preventable error that causes significant harm. Lots of error cannot be solved by computer because it lacks the information, like identity, drug and dosing errors. There are a lot of inputs that only a human can evaluate at dispensing time. This robotic filling, as I read it, does not necessarily prevent that.

For reference, there are roughly ~110 million possible drug formulations (drug x dose x route etc) that are currently legally dispensable and distinct, in the US. Any drug can interact with any other, different dose x route x drug combinations may interact differently. A large set of the population is on dozens of drugs simultaneously. Taking into account the patients age/weight/race/level of sickness is important and makes the overall matrix very very large for raw computation.

You might then say: well humans aren't good at a matrix that large either, that is in some ways true but humans are pretty good at detecting exceptional circumstances even though though they are not rotely walking that large key space. It is also true that there is a heavy weighting towards about 1,000 much more common drugs. It is not a new idea to add computers to interactions/dispensing/etc. It has been tried for 20 years, the outcome results of many efforts have been poor.

A gold standard in pharmacy interactions is to maximize the amount of time between pharmacist and patient. Pharmacists aren't pill monkeys rotely stuffing things in bottles. They have important diagnostic, education and safety functions. Especially when they can see and interact with the patient. If there was any true broad economic incentive to be preventative pharmacists would take your vitals and temperature as well but currently our system does not make that economic.

I have been a strong supporter of free software (GPL) and open source since Linux was created and remain so. The company I started and system we created, ClearHealth, was the only open source EMR to receive the necessary federal certifications and other partner certifications (SureScripts, Payers, DEA, etc) to be used in real large scale institutions. Unfortunately the fact that is was open source, the cons dramatically outweighed the pros in terms of contracts (it is difficult/complicated to get sole source contracts typical for software when you are open source) and investment (health tech investors at the time all wanted lock in).

We were fortunate to have a strong business model around our healthcare management operations that had nothing to do with the EMR but if I had to do it again speaking from a business standpoint only, I don't think I would do it as open source that way. As recently as 5 years ago open source was viewed with extreme suspicioun if not outright disdain in the largest health institutions, I think that is changing but still has 10-15 years to go.

There is not a universal practice. Predominantly just excel, a lot of emails, conference calls and meetings. Different institutions have distinct personalities and that reflects in how things are done between them. Some people still have actual mainframes involved.

When it comes to large parties, multi-practice groups, health systems, etc, an overall fee schedule or charge master for an existing institution is typically not renegotitated line by line every year but as incremental changes from the previous. Many/most of the parties involved have been working together for decades, some even longer.

Many plans administered by familiar names like Anthem are actually funded and controlled by the large employers the plan services. In those cases the employer plays a role in defining what will and will not be covered and what will be paid and the insurer is a middleman (acting as a third party administrator).

People are rarely satisfied with this answer but its demonstrably true and was proven time and time again at the facilities ClearHealth managed.

1) Feverent, almost religious, adherence to hand washing. 2) No neck ties or dangly sleves whatsoever in buildings that house patients. 3) Change from stainless steel hardware for doors and travel touch surfaces back to "brass/copper".

Those are simple, virtually free, things that have a very meaningful impact on outcomes. Some of the most viscous fights I've had with hospital boards were over what amounted to the "uglier look" of copper/brass.

It is an extremely unpopular topic in healthcare but the area that takes a lot of effort to solve but also has a tremendously out-weighted benefit is reducing preventable medical errors. My opinion after being in healthcare ~20 years is that preventable medical error is absolutely in the top 3 causes of death in the US. The easiest subset of it to resolve is prescription related errors, we have all the tools to resolve those but not the will.

Healthcare is such a base layer of the economy, I find comparisons to be extraordinaly difficult between countries. On the most basic level our pathway to becoming a healthcare provider of all sorts is dramatically more expensive and limited than other countries, what healthcare providers are paid is dramatically more than other countries, we invest many times per capita what other countries put into basic medical research, the way are population is taxed is very different than other countries, our patient population is very different from other countries, our expectations are very different from other countries, our scale is dramatically different than other countries, and so on. The US is a singular animal politically in that it is a compact of individual states that especially in regards to healthcare, the federal goverments powers (though it may not seem so at times) are actually quite limited. It's all but impossible to come up with reasonable numerators and denominators for comparison.