Is the current Medicare reimbursement method flawed?  It depends on your perspective, but one thing appears more and more apparent – the recent healthcare reform bill does not appear to be a solution to the problem.

BNET Today

Judging by the opposition of surgical societies and some state medical societies to the Senate healthcare-reform bill passed last December, many physicians — particularly highly paid specialists — are relieved now that it appears the legislation is on its deathbed. But they shouldn’t be too gleeful, because in the absence of reform, fewer and fewer patients will be able to afford their services.

Just ask Clyde Yancy, a cardiologist who heads the American Heart Association (AHA). Yancy cited a recent AHA survey of heart patients in explaining why he believes that reform of the system is still necessary. In the survey of 1100 adults who said they had heart disease, a stroke, or high blood pressure, 56 percent of the respondents — most of whom had insurance — said they’d had trouble paying for prescription drugs or medical care in the past few years.

In an op-ed piece about the survey in a trade publication, Yancy referred to the “collective sigh” of relief among physicians about the stalling of reform and suggested that it’s premature. “The need for the discussion has not gone away,” he said. “If anything, that need is highlighted by this survey.”

Of course, Yancy is walking a fine political line. He chose not to highlight the financial pain doctors will feel as insurance coverage shrinks, and instead focused on the problem of patients not receiving proper care because they can’t afford it. But his intended audience of heart doctors can certainly read between the lines, particularly since they’re already battling to preserve their incomes in light ofsome recent Medicare changes.

Last fall, Medicare announced changes in its reimbursement methodology that basically lowered payments to specialists while raising them for primary-care physicians. Cardiologists, among the hardest hit specialists, were slated to lose an average of eight percent in 2010 and more in the ensuing three years. The new fee schedule also slashed payments for nuclear scans by 40 percent and cut the fees for echocardiograms and other tests by about a third. In late December, the American College of Cardiology (ACC) sued HHS Secretary Kathleen Sebelius to reverse the cuts scheduled to take effect Jan. 1. Two weeks later, a federal court in Miami dismissed the suit on jurisdictional grounds, but the ACC pledged to carry on the legal fight.

The cardiologists, of course, claim that the drop in Medicare payments for high-end imaging tests will drive some of them out of business and that they’ll have to cut back on the services for the poor. In actuality, though, heart doctors have steadily ramped up their use of tests and other services to maintain their incomes. A study released last fall by cardiology services provider MedAxiom found that visits to cardiologists had risen 12 percent in 2009 and that return visits had climbed 34 percent since 2000. Meanwhile, the number of echos that cardiologists performed jumped 15 percent in 2009 and 43 percent in the previous five years.

These numbers highlight the main issue: the more Medicare cuts back on reimbursement, the more tests, procedures and follow-up visits physicians do. And the more doctors do, the more Medicare cuts its fees. The only solution is to dump the fee-for-service payment system — a goal that some of the provisions in the healthcare reform legislation would move us toward. Having to live within a budget would upset cardiologists even more than the recent Medicare cuts. But it’s hard to see how their patients will be able to afford their services in the long run under any other reform plan.

Costs continue to rise even with the passage of landmark healthcare reform. Read the following article for an interesting take on outcomes of the new reform.

John Greyman

The passage of the Patient Protection and Affordable Act of 2010 (PPACA), our new health care legislation, in March was hailed by its supporters as an historic event of the magnitude of Social Security and Medicare. But four months later, it remains controversial, with repeated polls showing three large groups of divisive opinion, including those who would work to repeal it and others who believe that it will make no difference. The Democrats have launched a $125 million PR campaign to defend the new law amidst growing signs that many Democrats facing re-election are failing to get political traction on the issue. (1)

We are being advised by many to “wait and see” how this complex new bill plays out over the next five to ten years, but we can already know what its outcomes will be. More than 30 years of health policy science, including documentation of the repeated failures of incremental changes built into the new law, together with well-entrenched trends in our market-based system, allow us to project its outcomes with confidence. For this legislation has been molded and crafted by the political power and money of corporate stakeholders in the medical-industrial complex.

Five previous posts in 2009 described the uneasy “alliance” of the five biggest players — the insurance industry, the drug industry, the hospital industry, business and organized medicine. They will do just fine with the new law at the expense of patients, families and Main Street.

Health care “reform” this time around was intended to address these four basic system problems: (1) containing health care costs, (2) making health care more affordable, (3) increasing access to care, and (4) improving the quality of care. This post introduces a series of five that will examine how well the PPACA will do on each of these four goals, followed by an overall assessment of the law. These posts will draw in part from my new book Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, soon to be released by Common Courage Press in both print and eBook format.

Continued Unrestrained Drivers of Health Care Costs

These are some of the many reasons that we can already conclude that health care costs will continue to run out of control at rates far exceeding the costs of living and median household incomes.

• No price controls. Wall Street has already factored in rapid expansion of markets for drugs, medical devices and other services in a system of expanded access. There is also a long line forming of providers of information technology and administrative services that will exploit the complex implementation of this law.

• No bulk purchasing. The PPACA has prohibited the government from negotiating the prices of prescription drugs and retains a ban on importation of drugs from Canada and other countries.

• Lack of control over perverse incentives that drive increased volume of services. These in turn are driven by retention of fee-for-service (FFS) reimbursement that encourages physicians and other providers to offer more services than are medically appropriate or necessary.

• No effective mechanism to rein in marginal or ineffective technologies. Coverage policies for new drugs and medical devices are still lax and not subject to rigorous evidence-based criteria for either efficacy or cost-effectiveness.

Although the PPACA does call for a Patient-Centered Outcomes Research Institute, its role is already neutered by not having the power to mandate or even endorse coverage or reimbursement rules for any particular treatment. (2)

• The dominant business model of health care prevails, with many facilities and services remaining for-profit and investor-owned and with an ongoing trend for increasing consolidation within industries.

• The PPACA has grandfathered-in specialty hospitals, typically physician-owned facilities that focus on well-reimbursed procedures in such areas as cardiology and orthopedics, whereby physicians can “triple dip,” earning high incomes as providers, owners and investors.

• More preventive services will further fuel health care inflation. While the PPACA does provide new coverage for many preventive services, this will lead to increased costs due to additional diagnostic and treatment services engendered. (3)

• Private insurers can’t contain health care costs, even where they have dominant market power. A 2009 report by the Congressional Research Service, “The Market Structure of the Health Insurance Industry,” concludes that:

The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. (4)

• There are no controls over premium rate increases by insurers. Despite the outcry by government officials, annual premium rates are escalating at rates up to 56 percent (5), and there is no end in sight for continued exorbitant rate increases. Insurers will continue to game the system by extracting maximal profits and offering reduced coverage with actuarial values (the amounts insurers actually pay in coverage) as low as 60 or 70 percent.

• National health care spending will grow unabated despite the passage of
PPACA. The Centers for Medicare and Medicaid Services (CMS) projects that overall national health expenditures (NHE) will increase from its present 17 percent of GDP to 21 percent in 2019, a total of $4.470 billion. (6)

These well-documented trends leave no room to think that health care “reform” will have any chance to contain health care costs. Instead, health care inflation will be exacerbated by all the new incentives and inefficiencies in the new “system.” In our next post we will examine the impact of these trends on affordability of health care.

A recent study reveals that certain surgeries are leading to increased costs without producing better and healthy outcomes.  In fact, the article suggests that certain surgeries may be performed too often and for inappropriate reasons.  Perhaps changing the economics of medicine, to reward better care rather than simply providing more care is the answer.

Associated Press

A study of Medicare patients shows that costlier, more complex spinal fusion surgeries are on the rise — and sometimes done unnecessarily — for a common lower back condition caused by aging and arthritis.

What’s more alarming is that the findings suggest these more challenging operations are riskier, leading to more complications and even deaths.

“This is exactly what the health care debate has been dancing around,” said Dr. Eugene Carragee of Stanford University Medical Center.

“You have one kind of operation that could cost $20,000 and another that could cost $80,000 and there’s not good evidence the expensive one is being used appropriately in the majority of cases,” Carragee said.

Add to that the expense for patients whose problems after surgery send them back to the hospital or to a nursing home and “that’s not a trivial amount of money” for Medicare, said Carragee. He wrote an accompanying editorial in the Journal of the American Medical Association where the federally funded study appears Wednesday.

The cost to Medicare, just for the hospital charges for the three types of back surgery reviewed is about $1.65 billion a year, according to the researchers.

All the patients in the study had stenosis in their lower backs, a painful squeezing in the spine that’s most common in people over 50. The researchers compared the risks for three different types of surgery for the condition: decompression, simple fusion and complex fusion.

“All operations aren’t the same and some seem to be associated with higher complication rates than others,” said lead author Dr. Richard Deyo of Oregon Health and Science University in Portland. “It’s not necessarily true that the more aggressive surgery is better, at least in terms of safety.”

There’s little agreement about the best way to treat chronic lower back pain, and much depends on what’s causing the pain.

Patients should ask their doctors about alternatives to complicated operations, Deyo said. Could steroid injections and physical therapy be tried? Would a simple decompression procedure be as helpful as a spinal fusion and with less risk?

In a decompression procedure, the simplest method in the Medicare study, a surgeon cuts away part of the bone that’s painfully pressing on nerves. It can cost about $30,000 in hospital and surgeon fees.

For a fusion, a surgeon binds two or more vertebrae together using a bone graft, with or without plates and screws. The researchers defined a complex fusion as one involving three or more vertebrae or more than one side of the spine. Fusions cost $60,000 to $90,000.

The researchers analyzed data on more than 32,000 Medicare patients who had one of the three types of surgeries in 2007.

About 5 in 100 patients who had simple or complex fusions suffered major complications such as stroke compared to 2 in 100 with decompressions. The risk of death within 30 days after surgery was different too: 6 in 1,000 for complex fusions compared with 5 in 1,000 for simple fusions and 3 in 1,000 for decompressions.

The study didn’t address how successful the various types of surgeries were at relieving pain.

More than half the patients who had complex fusions had a simple stenosis, which usually calls for decompression alone. They did not have the curvature of the spine or a slipped vertebra — additional conditions that might suggest a fusion is needed. There’s not much evidence for doing a complex fusion for a person with simple stenosis, Carragee and other experts said.

“It certainly looks like there’s more complex surgery being done than we have very good evidence to support,” Carragee said.

Rates of complex fusions in Medicare patients rose 15-fold from 2002 to 2007, while decompressions and simple fusions declined, the study found. Although the overall procedure rate fell, hospital charges grew 40 percent.

Aggressive marketing of devices used in complex fusions is likely playing a role in the increase, Deyo said. The marketing includes ads in medical journals and lectures by surgeons on the payroll of device manufacturers.

Allegations of kickbacks to spine surgeons for using products and questionable financial arrangements to doctors as consultants have plagued the multibillion-dollar industry. One company, Medtronic Inc., reached a $40 million settlement with the U.S. Justice Department in a whistleblower case that included allegations the company paid doctors to use its spine surgery products. The company denied any wrongdoing.

Dr. Charles Rosen, a spine surgeon at the University of California, Irvine, founded the Association for Medical Ethics to nudge doctors toward scientific evidence over vested interests. Forty-nine spine surgeons have joined, pledging to refuse any type of compensation or earnings from companies for using a product.

Rosen applauded a provision in the new health care law that requires device makers and others to file annual reports to the government on their financial ties to doctors. Patients will be able to look up possible conflicts in a government database.

“Too much fusion surgery is done in this country and often for inappropriate reasons,” Rosen said. While complex fusions are needed for some conditions, he said, patients “should not hesitate to get a second opinion.”

The error rate in medical bills is astoundingly high. Fully 8 out of 10 medical bills contain errors of various kinds. At Medical Cost Advocate we believe there is no better way to reduce your medical costs than to have a professional review your medical bill and then negotiate the final reviewed amount as well. We provide these services to all our negotiation customers. The below story appeared on ABC’s Good Morning America this morning, April 7th. You will find a description of some of the errors we typically encounter when reviewing your medical bills.

Fighting Mistakes in Muddled Medical Bills

Advocates Can Help Find Typical Medical Billing Errors

ABC News

Expensive mistakes on medical bills are hard for most of us to detect, because the bills are written in a mysterious language that we don’t speak.

But eight out of 10 medical bills have mistakes on them, according to Medical Billing Advocates of America.

What if you could hire somebody to translate your bills and then do battle for you?

Turns out, you can. And it might not even cost you anything.

Finding the Mistakes and Fighting Back

Artist Cynthia Kulp thought being diagnosed with breast cancer was the worst thing that could happen to her. But, then, the hospital where she received her breast cancer treatment overcharged her.

“To have to fight a hospital going through cancer treatment, overcharging me, they have to be the lowest of the low,” Kulp said.

Before her lumpectomy, she said, the hospital told her the operation would cost $5,000. Instead, she got a bill for $12,700, right in the middle of her course of chemotherapy.

“You can barely function, you can barely get out of bed,” she said. “How can you fight hospitals?”

So she hired Holly Wallack, a medical billing advocate, to help. Wallack found all kinds of errors on Kulp’s bill, such as:

 Mismatches. These are drugs that appeared on the medical bill, even though they weren’t listed in the medical records.

 Double charges.The hospital charged Kulp for two “first” hours in the recovery room. So Wallack asked, “How many ‘first’ hours do you get? Last I heard, there was only one, then he was very happy to take that charge off.”

 Inflated charges. The hospital billed $192 for a postoperative support bra that Wallack found on the Internet for $19 — a tenth of the cost.

“That was one morning in one operating room in one hospital in one little town in the country,” she said. “If you extrapolate that out to what’s going on every day, it’s mind boggling.”

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