Out-of-network charges: unusually high and customarily secret

More evidence emerged from a recent Senate investigation that the insurance industry has routinely underpaid for out-of-network care. The investigation by the Senate Committee on Commerce, Science and Transportation* found that health insurance companies in every region of the United States have used faulty databases from Ingenix, Inc. to underpay the insurance claims of millions of Americans. As a result, billions of dollars in bills that should have been paid by insurance companies have been shifted to consumers, the report said.

The revelations build upon those from an investigation by the attorney general of New York, which found that Ingenix, a wholly owned subsidiary of one of the largest insurance companies in the country, UnitedHealth, systematically understated market rates up to 28 percent across New York state. Further, the company’s databases were never accessible to consumers, and none of the insurers disclosed that the data used to calculate the rates was compiled by a major health insurer.

More than 100 million Americans pay extra for health insurance that allows them to go out of their network to receive care from doctors of their choice. Consumers who use such PPOs can expect their insurance company to pick up a percentage of the bill when they use out of network providers. But insurers don’t pay a portion of the whole bill—just a percentage of the portion that they deem to be "usual and customary."

Wall Street-run health care

On Wednesday, I traveled to Washington, D.C., to testify in front of Senate Commerce Committee* on one of the things that outrages me the most about our health care system: insurers who deliberately fool customers into thinking they’re getting good coverage when they’re really getting junk insurance that won’t pay their medical bills when they get sick.

But enough about me. The star of the hearing was the conservatively-dressed, quiet-spoken middle-aged guy who sat next to me at the witness table. Wendell Potter, a courageous former senior executive at Cigna, the big national health insurer, used this hearing to go public with his insider knowledge* about how health insurers "confuse their customers and dump the sick—all so they can satisfy their Wall Street investors."

Why did he take this step? Because, he said, he realized that "the industry’s charm offensive—which is the most visible part of duplicitous and well-financed PR and lobbying campaigns—may well shape reform in a way that benefits Wall Street far more than average Americans."

"The top priority for for-profit companies is to drive up the value of their stock," he explained, and to do that, they must meet Wall Street’s demands to spend as little as possible on what the industry calls the "medical loss ratio," but which you and I call "our health care."

Rating the House health reform proposal

In testimony before the House Education and Labor Committee yesterday, Consumers Union’s senior policy analyst, Bill Vaughan rated the House Tri-Committee Draft Proposal for Health Care Reform on how well it met our criteria for meaningful reform for consumers. As explained in a seven-page editorial in the August Consumer Reports, we’re looking for health reform that:

• covers everyone,
• makes insurance simple,
• provides information on quality of care,
• helps employers to offer protection for workers,
• rewards good care—not just more procedures,
• frees doctors to practice medicine,
• and gives you the freedom to choose your plan.

So how does the house proposal rate? Here’s some of what Vaughn told the house committee, including suggestions for what can be improved.

The Tri-Committee proposal will bring us to the goal of affordable, quality dependable health care for all. But we also know that even more savings are possible and can be directed toward spurring breakthrough research if we all work together.

Covers everyone: The House proposal would create a national health insurance exchange that consumers can use to find guaranteed health insurance, regardless of pre-existing conditions. Private plans would compete with the option of a public plan to keep insurance affordable. Subsidies for those making less that 400 percent of the poverty level would expand access to health care to millions of Americans who can’t afford it today.

Obama’s health forum includes 5 who told us their stories

President Obama will answer the nation’s questions on health care tonight during the much-talked-about “Questions for the President: Prescription for America” forum, which airs at 10 p.m. EDT on ABC. The president will take questions from an audience made up of "Americans selected by ABC News who have divergent opinions in this historic debate" and others submitted via ABCNews.com. Among those participants are five people who contacted Consumers Union to tell us about some of the challenges they've faced getting affordable, high quality health care:

Ken Bragg of Fayetteville, W. Va.: Ken is an insurance agent who knows first-hand how expensive and inadequate health plans can be. Ken says that many of the people who come to purchase health insurance do not qualify because of pre-existing conditions or are only offered expensive policies. He and his wife have experienced ever-increasing premiums with a high deductible for a policy they rarely use. Ken fears that the high cost of health insurance may force him to abandon running his own insurance agency and go back to work for a large company just for the health-care benefits.

David Cress of Gahanna, Ohio: Although he was covered at the time with an individual health-insurance policy, David was left with more than $100,000 in unpaid medical bills after treatment and surgery for a rare disease. When his premiums climbed to $700 per month, he was forced to drop his policy. Now uninsured, David struggles to pay out of pocket for his ongoing care and was forced to file for bankruptcy late last year.

Poll watch: The view from California and the nation

A robust 71% of California voters believe the U.S. health care system needs significant overhaul or restructuring, according to last week’s Field Poll of Californians. This sentiment was undoubtedly was shaped by the last two years of public debate in the Golden State as policymakers and stakeholders wrestled with state-based health care reform. Even more striking is Californians’ support for a public plan to compete with private insurance: 85 percent of Californians favor a public health insurance option.

As California goes, so goes the nation. According to the latest New York Times/CBS News poll, 85 percent of Americans said the "health care system needs to be fundamentally changed or completely rebuilt," and 72 percent are strongly behind a government-run insurance plan option. The poll found that most Americans would be willing to pay higher taxes so everyone could have health insurance, and most said the government could do a better job of holding down health-care costs than the private sector.

Runaway health costs: What consumers are up against

Here’s a powerful, patient’s-eye view of our healthcare system from the husband of a colleague at Consumers Union. His experience illuminates the painful consequences of a system that tolerates and even rewards piecemeal, uncoordinated, and often unnecessary treatment. See here, here, and here for examples. (I’ve changed the name of his relative out of consideration for surviving family members):

My cousin and I were responsible for managing the affairs of our uncle and aunt because they didn’t have children of their own. I live closer, so a lot of the day-to-day decision-making fell to me. Andrew was about 80 when the couple moved to an assisted living facility nearby. My aunt’s health and memory weren’t what they used to be and she couldn’t keep house any more. After Andrew got there, his condition declined pretty quickly; we were kind of startled. His energy seemed to drop and he needed a walker to get around.

Around Christmas of 2007 he tripped and fell and was taken to a nearby hospital, where he was seen by I don’t know how many doctors. I didn’t even meet most of them. I know he saw them from the bills I got. So many groups and individual doctors seemed to have a little piece of him. I was paying $20 here, $150 there, whatever Medicare didn’t pay. The hospital bill alone was seven pages long.

But I did meet the cardiologist who assured me, almost guaranteed me, that if my uncle got a pacemaker there would be a dramatic change in his mobility and energy. I believe he was the one who put in the pacemaker. My uncle was in the hospital for a couple of weeks, and then at a rehab facility, but afterwards there was literally no change. He could walk just inches at a time with the walker, needed assistance to get in and out of bed, to get to meals.

Should you be required to buy health insurance?

As lawmakers begin to hammer out the details of a health care reform bill, expect to hear a lot about “individual mandates” that require Americans to have health insurance, much like we’re compelled to buy auto liability insurance. We could purchase health insurance through an employer, a private insurer, or a yet-to-be-created public plan.

During last year’s Democratic primary, the issue of mandates was the biggest divide between Hillary Clinton and Barack Obama’s health care proposals, with candidate Obama campaigning against them then. Now President Obama has signaled he’s open to them—with some exemptions for some individuals and small businesses that can’t afford it.

The individual mandates are also the carrot that keeps insurance companies at the bargaining table—it’s their condition for guaranteeing coverage to all Americans regardless of preexisting conditions. And it would provide them millions of more customers. But is an individual mandate necessary for health reform?

An editorial by Linda Blumburg and John Holahan of the Urban Institute, just released in the New England Journal of Medicine argues convincingly that they are. The authors write that the current system encourages insurance companies to spend their money avoiding covering people with higher than average health risks, rather than developing more efficient ways of actually managing health care costs.

Californians march to save children’s health care

The California’s budget situation is reaching critical condition, and the state’s S-CHIP program, known as Healthy Families, is on life support. With Governor Schwarzenegger proposing to pull the plug, protesters—including 150 children currently covered by Healthy Families—have descended on the Capitol today to express their opposition to the cuts.

The demise of the popular program, which covers more than a million moderate-income children, would have dire consequences. A UCLA report released this week says that the expected massive cuts in the state work force could hike California’s unemployment rate to more than 12 percent, creating the worst job market in the state in decades. And many families will lose their employer-based health insurance along with their jobs at a time when they can least afford to buy private insurance.

The termination of the Healthy Families program would also mean the state will lose additional federal matching funds, exacerbating the damage to state services—the state’s Medicaid program, Medi-Cal, ia also under the budget knife. The legislature’s budget conference committee has opted for a $70 million cut to Healthy Families, rather than eliminating it. But such a huge cut would create waiting lists and deny coverage to an estimated 200,000 kids.

Right-sizing medical care

Opponents of health care reform constantly warn that it would lead to "the rationing of care." Take the Wall Street Journal’s editorial against reform that concludes, “The only possible outcome will be the nationalization of U.S. health markets, which will mean that almost all care will be rationed by politics."

But what does that really mean? David Leonhardt of the New York Times has an interesting article exploring the issue quite well. "The choice isn’t between rationing and not rationing," writes Leonhardt. "It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it’s hard to argue that we are now rationing very rationally."

Our current system rations health care resources in several ways, including:

• by providing too little care to the uninsured and the underinsured;
• by favoring costly unproven treatments at the price of better care;
• by underpaying nurses and general practitioners who provide preventative care;
• by slowing wage growth to pay for rising health care costs;
• and by promoting poor access to after hours care, to name just a few.

Capitol Hill hears tales of our broken health-care system

Catherine Howard, a 31-year old breast cancer survivor from San Francisco, is headed to Capitol Hill today to urge lawmakers to pass health-care reform. So is Dave Penkava, a 64-year old from Asheboro, N.C. They’re among 31 people from across the country who have come to Washington, D.C., to add their voices to the intensifying health care debate.

"It’s important to remember there are real lives and families behind all the statistics and data that point to the need for reform," said Jim Guest, Consumers Union’s President, who will accompany the group on their rounds of lawmakers’ offices.

Indeed, their stories mirror those of millions of Americans. Catherine is more than $30,000 in debt because the health insurance she purchased didn’t cover large portions of her treatments, medicines, and hospitalizations. She has good coverage now, but her medical debt is a huge financial burden and she struggles to make ends meet.

Dave retired a few years back, but when the premium for his retiree health plan jumped from $126 a month to $1,000 a month he had to take a full-time job to get affordable coverage for him and his wife. He’ll have to work until age 69 until his wife qualifies for Medicare.

Can regions that spend a lot on health care help pay for reform?

As our readers already know, some parts of the country spend a lot more on health care than other parts—but don’t get better results. John E. Wennberg, M.D., M.P.H., Elliott Fisher, M.D., M.P.H., and their colleagues at the Dartmouth Atlas of Health Care, who have spent several decades documenting and researching this issue, have estimated that if every place in the U.S. practiced the same kind of medicine as the most frugal places, we could cut costs by as much as 30 percent and still end up just as healthy.

The prospect of such whopping savings, according to The New York Times, has caught the attention of some members of the Senate Finance Committee—the group that’s writing legislation to reform our health-care system. They’ve proposed, according to the Times,

… taking tens of billions of dollars of Medicare money away from doctors and hospitals in high-cost areas and using it to help cover the uninsured or treat patients in lower-cost regions.

As much as we admire the Dartmouth work, we don’t think that an abrupt across-the-board spending cut in profligate regions like New York or Florida is the best approach.

The best explanation for why we think this is so this comes from Robert Berenson, M.D., a health researcher and former Medicare official who commented in the Times about the Dartmouth work.* Speaking by phone from Europe, he told me, "What you end up with is that the prudent doctors are still prudent, but getting less income, and the ones who are generating excess volume are going to generate still more in the face of price restrictions."

Breaking the piggy bank for Rx drugs? Apply for patient assistance

If you’re among the growing number of uninsured or underinsured Americans, you could probably use some help paying for your medications. A patient assistance program* (PAP) might be able to help you pay for your prescriptions. Also called indigent drug programs, charitable drug programs, or medication assistance programs, PAPs are set up by drug companies, and you can find one relevant to you by searching the Web, or via online directories like RxAssist.

I’m a firm believer that if it sounds too good to be true, there must be a catch. So I checked out RxAssist, and to my surprise, not only was it easy to find several programs that could cover my specific medications, there wasn’t loads of confusing paperwork (many forms are one-pagers). You just click on the patient section, type in the name of the drug in the database search box, and you’ll get a list of PAPs that offer the drug at a low cost or for free. The forms will ask for your annual household income, your prescription information, and whether or not you qualify for health insurance, and some forms will need your doctor’s signature. If you’re eligible, the medication will be sent to your doctor’s office, your local pharmacy, or your front door.

Tips for saving on out-of-network costs

I made an appointment with a chiropractor the other day to try and help the back pain I’ve been living with for several months. This chiropractor came highly recommended by a close friend, but when I checked with my health plan, I couldn’t find him listed there. So that left me with a decision to make: Go to this chiropractor for treatment and take on potentially high out-of-network costs, or cross my fingers, choose a chiropractor from my plan, and hope for the best. It’s a tough decision, and one many of us have had to make at one point or another when it comes to in-network versus out-of-network care.

We’re all interested in avoiding unnecessary costs, so if you are considering going out of network, follow these tips to help keep your out-of-pocket costs to a minimum:

How do you know if it’s a swine-flu emergency?

The Centers for Disease Control and Prevention says that emergency room visits are up since the swine-flu (H1N1) outbreak started, but doesn’t know if that’s because more people are sick, or just worried. Getting to the ER promptly can be life saving. But it can also be time wasting.

“If you have symptoms that would not ordinarily take you to the emergency department, but you are considering going because you think you might have swine flu, you probably don’t need to go,” said Bill Briggs, president of the Emergency Nurses Association, in a statement. Indeed, if you don’t have severe or emergency symptoms, the best way to avoid the spread of disease is to stay home.

Here are the flu symptoms, for adults and children, that the CDC says warrants a trip to the emergency room:

Uninsured but need flu treatment?

There is a very good piece by Jeffery Levi in the Huffington Post discussing how our fragmented public health care system may not be able to serve the unemployed if the flu outbreak spreads.  “If large numbers of Americans start getting very sick and start flooding into hospitals and health care facilities, our system will really be in for a test. Our health system could be overrun in a very short period of time,” writes Levi. The risk to individuals without health coverage becomes a risk to everyone if the uninsured can’t get prompt treatment.
 
If you are uninsured and either you or a family member has symptoms of the flu contact your local health department for further information and be assertive about getting treatment if you need it.
 
—Reggie James, Director of Consumer Union’s Southwest Office