Who’s to blame for rising healthcare costs, insurers or providers, such as doctors or hospitals?  Depending who you ask, either side places the blame on the other.  Whether it’s insurers’ trying to meet the bottom line and remain profitable or physicians and hospitals attempting to increase revenue and improve their margins, one thing is for certain: Healthcare costs continue to rise.

Read on to determine where the blame lies.

By AVERY JOHNSON

A battle over who to blame for rising health-care costs is escalating, as groups seek to pin the problem on each other and say none of the health-care legislation under consideration does enough to solve it. U.S. spending on health care reached $2.5 trillion in 2009, according to federal estimates. It is expected to jump to $4.5 trillion in 10 years.

Insurers contend that they must pass on ever-higher bills from hospitals and doctors. Hospitals say they are struggling with more uninsured patients, demands by doctors for top salaries, and underpayments from Medicare and Medicaid.

And doctors say they are strong-armed by insurance monopolies and hampered by medical malpractice costs.

In the rush to point fingers, few solutions are emerging.

“It’s always someone else’s fault,” said Robert Laszewski, president of health-care consulting firm Health Policy & Strategy Associates. “There is not an incentive for these people to cooperate because the game they are all playing is getting a bigger piece of the pie.”

The issue has come into sharp relief as WellPoint Inc. has sought to defend its plan to raise some prices in California by up to 39%.

In a hearing Wednesday on Capitol Hill, WellPoint Chief Executive Angela Braly singled out dominant hospital systems for demanding 40% rate increases and drug companies for roughly 20% profit margins.

A WellPoint spokeswoman said that at least one hospital had asked for a 220% payment increase.

Many Democrats have cited lack of competition among insurers as a driver of higher prices. On Wednesday, the House of Representatives voted to repeal a longstanding insurance-industry exemption from federal antitrust laws. The bill now heads to the Senate, where its future is less certain.

Doctors complain of a lack of competition among insurers, as well.

A report by the American Medical Association this week argues that 500 insurance-company mergers in the past 12 years have led to markets dominated by one or two health plans.

This year, two insurers control 70% of the market in 24 states, up from 18 last year, the report said.

“There is no other company for doctors to go to” when an insurer comes to them with terms that they find unfavorable, said AMA President James Rohack. But insurers say is it doctors and hospitals that have gotten too powerful through consolidation.

A study published Thursday in the journal Health Affairs appears to back up their point, saying that insurers are weakened in their negotiations by their inability to exclude prominent doctors and hospitals from networks.

Authors from the Center for Studying Health System Change, a nonpartisan research group, conducted 300 interviews with California doctors and hospital and insurance executives in late 2008.

The study said two big networks of providers now dominate the northern part of the state: Sutter Health owns two dozen California hospitals and medical centers, and Catholic Healthcare West runs 33 hospitals.

In addition, the study said, doctors who are increasingly banding together for negotiating power are commanding yearly double-digit payment increases.

Hospitals and doctors shot back that the study was largely anecdotal and said integration improved efficiency.

Catholic Healthcare West said it took on $1.5 billion in bad debt from government underpayments last year; its size, it added, makes it possible to achieve some savings.

Sutter Health said increases in its reimbursement rates from private insurers have been in the single digits.

“We are doing our best to keep costs down because these health-care premium increases are not sustainable,” said Bill Gleeson, vice president of communications a Sutter Health.

Read how one state’s governor is not only reviewing insurance rates, but also hospital rates as he and the state look for ways to curtail excessive increases.

If nothing else, Governor Patrick’s proposal for state review of both hospital and insurance rates should start an overdue discussion of how to keep health cost increases from smothering economic growth in the state.

The course advocated by the state’s payment reform commission last year – a move away from fee-for-service payments – may be the long-term solution. But in the meantime, both employers and individuals are facing increases well in excess of the national rate of medical inflation. Forcing both insurers and hospitals to lay out their contract proposals before a rate-oversight body would at least end the shadow play that has kept the public in the dark about wide differences in hospital costs.

Also, Patrick’s proposed requirement that insurers at least offer small businesses a plan with a network lacking some higher-cost hospitals would ensure that companies have that more affordable option. In the past, consumers and their employers have been wary of plans that lack access to marquee hospitals, but years of spiraling health costs have probably changed some minds. Let the debate, or “conversation,’’ as Patrick calls it, begin.

Medical Cost Advocate is in the news again! Read about the partnership between HealthPass of New York and Medical Cost Advocate to provide medical advocacy and bill negotiation services to the employees that participate with HealthPass.

Addition of Medical Cost Advocate Helps Employees Negotiate and Minimize Out-of-Pocket Health Care Costs

Online PR News – 09-February-2010 – NEW YORK, February 9, 2009

HealthPass, the New York City-based non-profit health insurance exchange for small employers, today announced a partnership with Medical Cost Advocate Inc. to provide advocacy services to employees who participate in any of its health insurance plans.

Under the arrangement with Medical Cost Advocate (MCA), employees and families enrolled in any of HealthPass’ portfolio of coverage options will have access to the services of MCA’s advocates. Medical Cost Advocate’s professionals personally assist employees with reviewing their medical bills and reducing their out-of- pocket costs by negotiating discounts directly with health care providers.

“We are thrilled to be working with Medical Cost Advocate, especially at a time when employees are being asked to accept more of the responsibility for their health care costs,” said Vince Ashton, executive director of HealthPass. “Employees simply don’t have the time or expertise to understand the complexities of medical bills and explanation of benefits. This unique service gives employees in any of our plans direct access to experts who will review and negotiate all out of pocket expenses, often times reducing costs by as much as 50 percent.”

Medical Cost Advocate professionals will review and negotiate virtually any medical bill, regardless of insurance status or medical procedure. These include in and out-of network bills for full and excess charges, balance bills, deductibles, co-insurance and non-covered services. Employees are only charged for the service when the advocates are successful in saving them money. The Medical Cost Advocate program is the latest enhancement to HealthPass offerings for small employees also including COBRA/State Continuation Administration, the discount Rx cards and Health Advocate, which complements the Medical Cost Advocate offering perfectly.

HealthPass is an innovative partnership that was created in 1999 by the New York Business Group on Health, the City of New York and the health insurance industry. Its original purpose was to offer small businesses quality, affordable health insurance options. This is accomplished through an insurance exchange that allows eligible employees to choose a plan that fits their medical needs and budgets from a wide range of choices of plans and carriers. Today, HealthPass serves more than 3,700 small businesses and non-profit organizations and 33,000 members in New York City, Long Island, Westchester, Rockland, Orange, Dutchess and Putnam counties.

“Medical Cost Advocate is delighted to be partnering with HealthPass and helping their members deal with the ever growing complexity and cost of health care bills,” said Derek Fitteron, Chief Executive Officer of Medical Cost Advocate. “Our service not only benefits employees, but also employers who can offer an expanded benefits package that will enhance their ability to attract and retain talented workers.”

About HealthPass New York
An innovative partnership between the New York Business Group on Health, the City of New York, and the health insurance industry, HealthPass provides small businesses and sole proprietors with an array of Fortune 500-quality healthcare options through an insurance exchange.

HealthPass enables eligible employees of small businesses and sole proprietors to choose a healthcare plan that fits their medical needs and budgets. There are more than 30 different coverage options from five leading carriers – EmblemHealth, GHI, Health Net, HIP (Health Plan of New York) and Oxford – as well as two dental plans, and a bundled product offered through Guardian. With more than 200,000 providers, HealthPass affords greater network access than any single plan. For more information, please visit www.healthpass.com.

About Medical Cost Advocate
Medical Cost Advocate (MCA) is a medical cost reduction firm that lowers consumers’ medical bills before or after treatment through professional negotiation. Serving consumers, employers, benefits consultants and financial institutions, MCA leverages a proprietary approach that regularly saves consumers 20% to 50% on their medical and dental bills. With out-of-pocket health care costs steadily increasing, MCA provides the professional advocacy every consumer needs to realize savings without risk. MCA’s services are easy to access through its website. For more information, please visit www.medicalcostadvocate.com

Healthcare Financial News

Healthcare spending is on track to grow faster than the nations GDP for 2009. Unfortunately, we’ve seen this trend for the past few years and 2010 will promise nothing different. One thing is for certain, to combat the increased expenditure in medical services, employers and health insures alike are passing more costs onto employees and consumers.

Growth in U.S. national health expenditures (NHE) is expected to have increased faster than the growth in the gross domestic product (GDP) in 2009, according to a report issued today by the Centers for Medicare & Medicaid Services (CMS) and published online by Health Affairs. In 2009, NHE is projected to have reached $2.5 trillion and grown 5.7 percent, up from 4.4 percent in 2008 (the latest available historical year), while GDP, with the economy still in recession, is anticipated to have declined 1.1 percent. Health spending estimates for 2009 are projected because data for all of CY09 are not yet available.

The projected acceleration in growth for 2009 was due in part to faster spending growth for the Medicaid program (9.9 percent, up from 4.7 percent in 2008), reflecting increasing growth in enrollment associated with the recession. Also contributing to the acceleration was faster growth in the use of a variety of healthcare services as many people sought treatment for the H1N1 virus and an expected increase in the take-up rate for coverage provided through COBRA in response to the government’s subsidies for COBRA premiums. As a result of NHE growth outpacing GDP growth in 2009, the health share of GDP is expected to have increased from 16.2 percent of GDP in 2008 to 17.3 percent in 2009, which would represent the largest one-year increase in history.

Spending growth in three of the major healthcare sectors is expected to have accelerated in 2009. Hospital spending growth is expected to have increased 5.9 percent in 2009, up from 4.5 percent in 2008, and reached $760.6 billion. Physician and clinical services spending growth is expected to have increased 6.3 percent in 2009, up from 5.0 percent in 2008, and reached $527.6 billion.

Read what others who have serious medical illnesses and conditions are doing to help relieve some of the financial burdens associated with high cost treatment and medical care. Like the services mentioned in the below article, Medical Cost Advocate can assist you with reducing your high dollar medical claims.

By M.P. MCQUEEN

A diagnosis of cancer or other serious disease can be devastating to one’s financial as well as physical health — even for people with insurance. But there are a handful of programs that can help ease the monetary burden.

The programs, run mainly by nonprofit and charitable groups, offer financial aid to patients with specific life-threatening or chronic diseases to help cover the cost of co-payments, deductibles and other medical expenses. Patients usually must meet specific income and treatment guidelines.

Patients typically are referred to the programs by the financial counseling or patient-advocate offices of big hospitals and treatment centers. But you also can seek them out online.

Cutting Cancer-Care Costs

The CancerCare Co-Payment Assistance Foundation (at 1-866-552-6729 or CancerCareCopay.org) helps eligible patients cover the cost of insurance co-payments for treatment of specific cancers. The program, founded in April 2008, now lists seven diagnoses eligible for assistance: breast cancer, colorectal cancer, head and neck cancer, non-small cell lung cancer, pancreatic and renal cancer and glioblastoma.

Some diseases have a $10,000 annual limit on aid, others have a $5,000 limit, says John Rutigliano, chief operating officer of nonprofit CancerCare. Most people who qualify receive between $2,500 and $5,000.

He says these days more employees are bearing a larger share of the cost of care, with higher co-pays and deductibles.

Since the CancerCare program began, about 7,000 people have applied for co-pay assistance, and about 80% of them have received aid. Half of those who received aid were on Medicare and the other half were privately insured.

The foundation rejects less than 7% of applications, mostly because applicants’ income exceeds guidelines. The cutoff for assistance is 400% of the federal poverty level — slightly above $43,000 for an individual and $58,000 for a family of two.

Nancy Francisco of Crystal Falls, Mich., received financial help from CancerCare when she was diagnosed with glioblastoma, a type of malignant brain tumor, early in 2009.

Mrs. Francisco, a 45-year-old registered nurse and electronic medical records technician, became disabled as a result of the illness and treatment. Her husband is her full-time caregiver. She continued her health-insurance coverage under her former employer’s Cobra plan, but out-of-pocket expenses for treatment exceeded $10,000. CancerCare helped her with a $10,000 grant, says the mother of three, which helped cover co-pays for chemotherapy and IV transfusions.

“I couldn’t believe there was help,” says Mrs. Francisco, who learned of the program from her hospital social worker and pharmacist, who also helped her fill out the application.

Other Options

Other groups offering financial assistance for the treatment of cancer and other diseases: HealthWell Foundation HealthWellFoundation.org, which helps with co-pays and premiums for patients with group and individual insurance, Medicare and Medicaid. The Leukemia & Lymphoma Society’s Co-Pay Assistance Program (leukemia-lymphoma.org) helps with private-insurance premiums.

Medical Cost Advocate is in the news! Reporter Miranda Marquit from All Business News recently spoke with CEO Derek Fitteron about negotiating medical costs. Read on to learn about Medical Cost Advocate and what they are doing to help consumers who have large medical expenses. It’s great to know that there is a company working as an advocate on behalf of consumers to reduce healthcare costs.

Miranda Marquit

I recently saw an increase in my health insurance premium, and I will see it again quite soon, thanks to age-based premium increases. As a result, I am seriously thinking of a Health Savings Account and a high deductible plan. The ridiculousness of rising medical costs is really starting to be annoying — and increasingly moving toward unaffordable. Many people already experience the fact that health care in this country is unaffordable for them. So it was interesting to learn a little bit about a company that works to negotiate medical costs.

I recently spoke with Derek Fitteron, the CEO of Medical Cost Advocate, and he gave me some insight into what his company does to help consumers reduce their health care costs.

“Expectations were that health insurance premiums would go up six to eight percent,” Fitteron told me. “Instead, they are going up 10 to 12 percent. That means that employers are passing more costs on to employees, and consumers find that they have to pay more out of pocket. What we do is work to negotiate out of pocket expenses so that consumers pay less.”

The way it works, he explained, is that consumers can submit their out of pocket expenses, spent to meet a deductible or due to out of network treatment, and Medical Cost Advocate will attempt to negotiate a lower payment. Fitteron said that the company only charges if the fee is successfully renegotiated. “We take a percentage of what we accomplish. If the bill isn’t reduced, we get nothing.”

“We also help the uninsured,” Fitteron continued. “About 15 percent of the people we serve are not insured, and we can help them get a better rate, since they don’t have the advantage of a group rate through insurance.”

Fitteron also told me about a program that can help manage a family’s health care costs. “For 200 dollars a month, it is possible for us to track bills, review insurance and negotiate your costs. And this is for the whole family.”

Services offered by Medical Cost Advocate can be paid for using money from Flexible Spending Accounts or Health Savings Accounts. I haven’t used these services, but they seem intriguing. If I decided to go with a Health Savings Account, and have to pay out of pocket for more of my health care, it might be worth it to see if cost negotiation can save me a little more. I’m not sure that I would need the monthly service, but it might be worth it to check into the negotiation service offered.

Healthcare Finance News

Providing coverage to the nations nearly 43 million uninsured, while well intentioned, will only be detrimental to an already fragile system if the ever increasing rise of the cost associated with the delivery of care is not curtailed. Did Congress forget to address this issue when both the House and the Senate approved their versions of the bill? As Diana Manos, describes in her editorial,’It will be an interesting year..’

Diana Manos, Senior Editor

It doesn’t take a crystal ball to predict a major portion of what’s in store for the healthcare industry in this New Year. The top issue will remain: What do we do about rising healthcare costs, now at 16 percent of Gross Domestic Product?

The Senate paved the way for more debate on how to bend the cost curve by passing its version of a healthcare reform package on Christmas Eve. As Congressional leaders begin melding it with the House version, passed Nov. 7, sparks will fly over how to make compromises needed to pass the bill that don’t water down the social objectives too much.

In debates last year, the health insurance industry was singled out as the enemy of social good, responsible for the exclusion of coverage for millions of Americans. Capitol Hill shuddered at the personal stories of denial of coverage over pre-existing conditions.

President Barack Obama has called the Senate and House reform packages “the toughest measures ever taken to hold the insurance industry accountable.”

Yet as much as they’ve been called villains, insurance companies are merely businesses, going about what businesses do best. They are not non-profits. Blaming them for the demise of healthcare in America would be like blaming sharks for being the most effective hunters on earth. It’s in their nature.

If Congress is able to come to a resolution on healthcare reform, it will likely include measures to oversee the insurance industry. Yet that’s not a silver bullet for ensuring that health plans won’t find loopholes for their own fiscal survival.

There has been outrage over so-called universal coverage, and mandates that would force Americans to buy healthcare coverage. However, how can insurance companies be asked to cover more sick people without increasing the pool of healthy beneficiaries to support it?

This comes down to the question of whether the American government can single out portions of our market and designate limits for profit. Liberals would argue it has to be done sometimes for the social good.

But where do we draw the line for where social good ends and free enterprise begins? This is a debate that has launched wars and spilled blood.

It will be an interesting year, to say the least.

According to PricewaterhouseCoopers cutting healthcare costs will be a top priority among the industry for 2010.  You don’t need to be a rocket scientist to know that the cost of providing medical care rarely decreases. So lets see what 2010 will bring. The proof will be in the pudding.

Healthcare Finance News

Diana Manos

NEW YORK – Squeezing every penny out of healthcare costs will top the healthcare industry’s focus for 2010, according to PricewaterhouseCoopers.

“Healthcare typically lags trends in the business cycle by a year or more. While flat may be the new growth for other sectors of the U.S. economy, the recession could hit healthcare in 2010,” said David Chin, MD, partner and leader of PricewaterhouseCoopers’ Health Research Institute, in an analysis released Thursday.

“The primary emphasis for all healthcare organizations in the year ahead will be on reducing costs and creating greater value in the health system, a focus that will have a domino effect from one sector to another and redefine roles, responsibilities and relationships,” Chin said.

PricewaterhouseCoopers’ Health Research Institute publishes its list of top healthcare issues annually. According to researchers, the report includes trends affecting insurers, hospitals, physicians and other providers, pharmaceutical and life sciences companies, as well as the growing number of non-traditional market participants converging on the healthcare space.

New Jersey leads the country with the highest charges for health care services. According to the below article, charges by hospitals in New Jersey are four times higher than the actual cost. This a serious matter and New Jersey hospitals are not alone in the practice of pricing procedures based on inflated charges that they assert are a reflection of the market. Read the examples in the article and take warning; if you use a non-participating hospital, or are uninsured or have hospital out-of-pocket expenses – never pay the full charge! Medical Cost Advocate may be able to assist you by negotiating your claim and reducing your bill.

 Star-Ledger – Trenton Bureau

  The pain in Dan Abrams’ leg throbbed so much he could barely stand. 

Still, the 60-year-old Somerville resident, who friends say had just canceled his health insurance because of the tough economy, debated from a hospital emergency room whether he should stay and run up thousands of dollars in debt, or take antibiotics from home and hope they arrested the mysterious infection in his leg.

 Fearing he could lose his home and flooring business, Abrams chose to leave Somerset Medical Center after a hospital physician said staying would “run him a lot of money,” said Connie Dodd, a close friend who drove him to the hospital and heard the conversation. “I begged him to stay. But Dan’s a proud man. Talk of all the bills got him scared.” 

When Connie and her partner, Cindy Weiss, brought Abrams dinner the next night, July 29, they found his lifeless body in bed. Weiss performed CPR but it was too late. “It was a nightmare,” Dodd said.

 For people without health insurance, few things are more intimidating than the arrival of a hospital bill. 

Nowhere is the sticker shock worse in the country than in New Jersey, according to health experts and a new report by the New Jersey Health Care Quality Institute, a prominent health care policy group based in Trenton.

 New Jersey’s hospital “charges” the price list used to negotiate the cost of a bill for the uninsured and for insured people who use a hospital outside their network are four times higher than the actual cost of treating a patient. 

For thousands, the charges mean astronomical bills after a hospital stay. Insurers contend they also force higher premiums for anyone with health insurance.

Read more »

The saying “less is more” holds true these days, especially when it comes to health care. Though long, the following article accurately depicts the issues many small employers and individuals face each year when purchasing health insurance. Perhaps you are experiencing the same issues in your annual insurance enrollment.

Philadelphia Inquirer – Online
Stacey Burling

Talk to just a handful of small businesses about buying health insurance over the last few years, and the narrative quickly starts to sound familiar.

It boils down to paying more and more for less and less. Oh, and passing on more of the cost to employees, who aren’t exactly rolling in raises these days.

Increasingly, small businesses have given up, fueling the rise in the ranks of the uninsured and the debate in Washington about how to change health insurance so that more of us can afford it.

Consider Bob & Ron’s World Wide Stereo, which has stores in Montgomeryville and Ardmore. Owner Bob Cole has been providing insurance for 31 years.

At the beginning, he said, “I paid for it 100 percent. I did their families. I did everything. Over the years, I’ve cut back that support because of the extraordinary expense.” Cole still provides family coverage for longtime workers, but new ones pay the full cost of dependent coverage.

Over the last five years, the company’s contribution for health insurance has grown from 0.7 percent of total revenue to 1.1 percent. During those years, while the overall inflation rate never rose above 4 percent, the company’s health insurers – first Aetna Inc. and now HealthAmerica – came asking for rate increases of 23 percent, 27 percent, 9 percent, 20 percent, and, this year, 38 percent.

As a result, Bob & Ron’s, which covers 41 employees, has reduced what its health policy covered almost every year. It switched insurers in 2008.

“Every little change you make to save a little money reduces the quality of the coverage your employees get,” said Patrick Moran, director of operations, finance, and human resources.

Insurers say their prices track increases in medical costs, which are rising because of wider use of expensive technology and drugs.

While 98 percent of companies with more than 200 workers still provide insurance for employees, the percentage at smaller firms has fallen, according to the Kaiser Family Foundation. Most of that drop is in the smallest companies, those with fewer than 10 workers. In 2001, 57 percent of them provided insurance. Only 46 percent do now.

Small businesses say cost is their biggest insurance problem. According to Kaiser, small businesses actually pay slightly less per employee for insurance, but the plans often have higher deductibles. In testimony before a Senate committee, MIT economist Jonathan Gruber said small companies paid as much as 20 percent more for comparable plans because of insurers’ higher marketing and administrative costs, including the cost of figuring out how to avoid insuring companies with sick employees. Small firms often pay broker commissions, which amount to 4 percent to 11 percent of premiums. Local brokers said commissions here, which are paid by insurers, were more like 4 percent to 5 percent. Some insurers plan to switch to flat fees.

 Price volatility in the small-business market is what most concerns Randy Rohrbaugh, a Pennsylvania deputy insurance commissioner. Because many insurers base prices on the age and health of employees, one serious illness or a few birthdays can make a big difference in the bill.