Author Archive

The NCPA Fact Checks Obama’s Health Policy Address during SOTU

Paid Family and Sick Leave for Workers

The president emphasized the plight of the 43 million American workers who do not have paid sick leave. Many of them feel they cannot afford to take a sick day to convalesce after an illness or to care for a sick child. He proposes to mandate that employers provide seven days of paid sick leave to workers each year.

The president didn’t mention that an estimated 100 million workers who have paid sick leave likely don’t get seven days annually. He also didn’t mention that his own advisor Jonathan Gruber has research showing workers themselves wind up paying the cost of mandatory benefits through lower wages.

Thus, if employers are forced to provide seven paid days off of work for every worker, employers will adjust worker pay to compensate for the cost. This will inhibit pay raises, and it will impact paid vacation days. It could even harm the employment prospects of workers most likely to stay home and care for a sick child.

The president should have called for expanding Health Savings Accounts (HSAs) to all workers, allowing them to set aside funds for medical needs. The president could have also proposed allowing workers to use HSAs to compensate for income lost to sick days.

Currently, workers who have HSAs can use funds from their accounts to replace income lost due to sick days. However, this is considered a non-medical use and exposes workers to a penalty of 20 percent, plus ordinary income taxes.

Asian Firm to Launch Innovative TeleMedical Service in U.S.

An American entrepreneur has spent two years building a telemedicine business in Singapore and is ready to enter the U.S. market. RingMD is a web-based physician referral, telemedicine website and smartphone application. Prospective patients select doctors by viewing physicians’ profiles, locations, insurance acceptance, ratings or specialties. The software draws information from 543 medical conditions to connect patients with physicians from 17 different specialties. Patients just enter their symptoms (and preferences), and the website app will list qualified physicians who meet their criteria.

Participating physicians charge for consultations by the minute, and their prices vary. Some providers only charge $1 per minute, while others charge $5 per minute. It’s a competitive market with dynamic pricing. Patients select a provider and only pay for the time they need. Currently, most of RingMD’s physicians are based in Asia, but the firm is adding doctors from all over the world.

The 22-year-old CEO of the organization reports he is now considering entry into the U.S. market. But the question remains: Why did a Silicon Valley entrepreneur choose to start his Health Tech venture in Singapore? The Singapore government was impressed enough with the idea that it invested $500,000 through its National Research Foundation to help fund the tech startup. But there must be other reasons.

The Singapore health care system is often touted by conservatives as a model for health reform in this country. Singaporeans have been required to set aside a portion of their income into a Medisave account (6.5 percent – 9 percent) to fund their current and future health care needs since 1984.  Medisave accounts are a type of health savings account (HSA), while MediShield is an insurance scheme that functions similar to a major medical or high-deductible plan.

Medicare Should Revoke Drug Dealers’ License to Steal!

Nearly 39 million Medicare beneficiaries, including seniors and the disabled, have subsidized drug coverage thanks to the Medicare Modernization Act (MMA) of 2003. Medicare drug plans are popular with seniors. Although subsidized by Medicare, Part D plans are offered by private insurers and compete with each other for seniors’ patronage.

When Congress passed the Medicare Part D drug program back in 2003, it inadvertently created a license to steal. Prescription drug abuse costs health plans nearly $75 billion per year — about two-thirds of it from public programs such as Medicare and Medicaid. That makes Uncle Sam the biggest illicit drug dealer in the country! Prescription drug fraud and abuse also drives up seniors’ premiums as well as boosts costs for taxpayers and health plans that administer seniors’ drugs benefits.

Questionable drug use typically involves addictive painkillers that create a heroin-like euphoria. More than 16,000 people die annually from abusing pain relievers — double the number that die abusing cocaine and heroin combined. For every death, there are 10 people admitted to a treatment program for substance abuse and 32 emergency room visits. For each person who overdoses, 130 chronically abuse prescription drugs and 825 casually use them for nonmedical purposes.

The HHS Office of the Inspector General (OIG) reports that some individuals themselves are abusing the drugs. In other cases, they attempt to obtain drugs they don’t need in order to profit by reselling them. This is especially true of narcotic pain relievers derived from opium poppy plants. Substantial numbers of narcotic pain relievers are diverted to the illicit market where their “street value” far exceeds their pharmacy costs. For instance, the OIG reports the “street” price of Oxycodone is a dozen times the normal retail price at a pharmacy. Its agents report that a bottle of Oxycodone is worth $1,100 to $2,400 per bottle if sold on the streets of Northern California.oxy

Haha Gotcha! Medical Pricing

By almost any measure, the U.S. health care system remains dysfunctional. If you apply some of its common practices to other industries, they sound ridiculous. Consider this hypothetical thought experiment. Suppose you made an appointment at a local dog kennel for them to keep your dog, Bowser, while you were on vacation. You asked if they could bathe and groom Bowser just prior to your return. As is standard practice, you probably had to sign a consent form agreeing to pay for the boarding and any additional fees insured. Maybe the grooming fees weren’t guaranteed ahead of time, but you were assured they were nominal and normal for the services. Among the forms you were asked to sign, there was some fine print that said should your dog become ill, the services of a veterinarian would be arranged at your expense.

During his stay Bowser seemed lethargic and a little anxious — and he wasn’t very interested in his food. Maybe you assumed this is normal for a dog left at a kennel for a week. But Doggie Spa & Canine Resort cannot take any chances. It called in a pet behavioral therapist to assess Bowser’s condition. The doggie shrink brought along a colleague for a second opinion. The pet behavior therapist recommended Bowser be walked twice a day to lift his spirits. However, another veterinarian — an orthopedist — had to assess Bowser’s gait to make sure he was healthy enough to be walked. A pet nutritionist analyzed Bowser’s diet and assessed his food intake. She sent a stool sample to a lab for analysis of food absorption. She ultimately decided that spoon-feeding Bowser might encourage him to eat.

Upon your return you pick up your dog expecting to pay for boarding, bathing and grooming. You know Bowser was well-taken care of, but the fees were much higher than expected. Within days of your return, itemized bills from vendors begin to arrive. The person who bathed your dog sent a separate bill from Doggie Spa’s bathing fee. A different bill from the person who applied the shampoo is in your stack of mail. Yet another bill arrives from the groomer. You discover the groomer also brought along an assistant groomer. She too submits a bill. The pet nutritionist and the lab both sent bills. A bill even arrived from another person who walked your dog twice a day while you were away. Spoon feeding Bowser twice a day for a week incurred 14 separate dietitian charges. Indeed, the pet behavioral therapist swung by Doggie Spa on his way home every night to make sure Bowser was doing OK — and you got charged for each visit. Worse, you discover some of the people who sent you a bill charged far, far more than the pet resort’s regular vendors. The on-call vendors called other vendors to assist. But these out-of-network vendors are not bound by Doggie Spa‘s standard rates, they can charge anything they want. You discover Doggie Spa actually encouraged these upcharges so it too could bill a separate facilities fees for them. Arranging for the dog activity therapist to assess your dog; that generated a separate charge for both the Doggie Spa and the dog walker.

Narrow Networks Found to Save Money

National health expenditures are rising faster than the economy. Most economists believe this is due to perverse incentives that encourage unnecessary medical spending. More than 30 years ago the RAND Health Insurance Experiment showed that patients spend nearly one-third less when exposed to significant cost-sharing. Yet, health plans continually look for new ways to save money in the absence of a health care market where patients act like consumers.

One such cost-saving method is the increasing use of so-called narrow networks, where health plans restrict the choice of providers in return for lower premiums. Narrow networks are sort of like when you were in high school and your mother took you to Walmart to buy a pair of jeans. She may have refused to shop for jeans at the mall where she knew they would be more expensive. Obama Administration advisor, Jonathan Gruber, wrote about the use of narrow networks in Massachusetts health plans. He found that patients used fewer resources when required to see general practitioners rather than specialty care. According to Gruber:

For Sale Cheap: Your Private Medical Information

Have you ever gone to a party and had the urge to peek inside your host’s medicine cabinet? (Neither have I!) Imagine what could be of interest in there. For those nosy souls who are tempted, you don’t even have to attend a party! It’s all for sale online. Bloomberg published an article about how Big Data is snooping in your medicine cabinet and selling the information to marketers. Here’s the gory details:

Dan Abate doesn’t have diabetes nor is he aware of any obvious link to the disease. Try telling that to data miners.

The 42-year-old information technology worker’s name recently showed up in a database of millions of people with “diabetes interest” sold by Acxiom Corp. (ACXM), one of the world’s biggest data brokers. One buyer, data reseller Exact Data, posted Abate’s name and address online, along with 100 others, under the header Sample Diabetes Mailing List. It’s just one of hundreds of medical databases up for sale to marketers.

Pesky Patients Asking Awkward Questions: Doc, Do I Really Need That?

A recent New York Times article lamented that employers are increasingly offering employee health plans that cover few medical expenses until a fairly high deductible has been met. About one-third of large employers offer only a high-deductible plan. Many other employers encourage enrollment in high-deductible plans by offering low employee contributions. As a result, more employees are covered by high-deductible plans and workers increasingly have to reach for their wallet before insurance kicks in.

As news stories often do, the article used a tear-jerker of an anecdote to drive home its point. The subject of the story was Anita Maina. Although her monthly premiums were only $34 per month, her deductible was $6,000 and her health savings account not well-funded. Here’s the story:

Anita Maina was working on an arts and crafts project she found on Pinterest — creating a table out of wood and cork — when she ripped off a fingernail while removing staples from a piece of wood.

But she ultimately skipped the [office] visit since she had not met the $6,000 deductible on her health plan, and she knew she probably did not have much left in her health savings account…

The New York Times article even included a photo of Ms. Maina with her injured finger!

es

Another Bogus Attack on Wisconsin Medicaid

The Wisconsin Legislative Fiscal Bureau analysis estimates the state is losing about $100 million a year by not expanding its Medicaid eligibility as much as allowed under the Patient Protection and Affordable Care Act (ACA). This mudslinging by Wisconsin Governor Scott Walker’s gubernatorial challenger is disingenuous and ignores the fact that Wisconsin made a better choice by allowing many of its low-income uninsured to access private coverage with federal subsidies.

Over the past several years state legislators have grappled with the pros and cons of Medicaid expansion under the ACA. The carrot dangled in front of state legislators is financial; states that agree to expand Medicaid eligibility to 138 percent of the federal poverty level (FPL) can expect the federal government to reimburse states for most of the cost for newly eligible enrollees. Critics of Medicaid expansion counter that the savings are front-loaded in the early years, whereas state costs begin to rise in later years when it’s too late for states to back out. Whereas the federal government will pay 100 percent of the costs through 2016, the feds begin ratcheting the matching rate down to 90% by 2019.

Cost-Conscious Patients: Why Is That a Bad Thing?

An article in Modern Healthcare discusses the uneasy feeling doctors experience when patients ask awkward questions about the medical care recommended for them. Among the uncomfortable questions doctors are expected to answer: “How much is that going to cost?” “Do I really need that MRI?” “Why do I have to get that?” “Can it wait?”

Imagine how any other profession would respond when the purveyors of goods and services are expected to suffer the indignity of customers quizzing them about the merits, demerits and costs of their products. Oh, I forgot, every other profession does suffer the indignity of having to convince buyers that their services are valuable.

Hits and Misses

Women jogging

Jogging may be good for your heart: But endurance runners are more likely to die from heat stroke than a heart attack.

Big shrink is listening: A smart phone app that monitors your voice for signs of manic/depression.

There’s little reliable evidence that fish oil helps prevent heart disease.

Ridiculous study or common sense? Eating fruit and vegetables is associated with greater flourishing in daily life.

Your dog wears a watch: Why your dog seems to know what time it is.