Price Shopping for Healthcare

The race is on for the best free cost comparison website. There are quite a few challenges for these sites:

1. How does the site generate a source of revenue to keep it operating?
2. How will it compare services that are along the same grain of detail?
3. How will it simplify procedural terms so that they are understandable and not "medical speak"?

There are quite a few challenges to get a fully functional site operating that's of value to the consumer. However, if such a site exists, will people use it? Will it present a value to the consumer who may only care about out-of-pocket costs. Perhaps, quality and cost share estimates can be luring enough for consumers to start major adoption.

Here are a few players in the game:

pricedoc.com

mymedicalcosts.com

healthcarebluebook.com

How Much is Your Doctor Getting From Big Pharma?

Here's a link to a website which lists doctors across the country who receive over $100,000 in payments from pharmaceutical companies. This is one step toward greater transparency and allowing the patient to make better informed decisions about his/her care.

I'm not saying the doctors on this list are incentivized to push certain drugs over another. I am saying that making this information available to the public is very useful for the patient.

http://projects.propublica.org/docdollars/top_earners

Would You Subsidize Your Coworker's Health Insurance?

Let me pose a question to you to help you think about your own personal beliefs regarding healthcare reform:

You see your coworkers smoking cigarettes, deliberately making unhealthy choices for lunch and avoiding the stairs to take the elevator. You on the other hand, make healthy choices and invest heavily in sweat equity at the gym.

• Should you pay the same insurance premiums as your unhealthy coworkers?
  
• What incentives are needed to change your coworkers behavior?
  
• Or vice-versa, should there be monetary consequences for intentionally living an unhealthy lifestyle?

Lessons from the Germans

Here's an interesting article from McKinsey. This is an interview of a senior executive from the German Ministry of Health.

https://www.mckinseyquarterly.com/Health_Care/Hospitals/How_Germany_is_reining_in_health_care_costs_An_interview_with_Franz_Knieps_2534

Call it "socialized health insurance" if you will. Don't get caught up with labeling it as "socialized medicine". U.S. politicians do a great job of scaring the American public of government run healthcare but neither the Obama Adminstration or the German's dictate which doctor you can visit or which hospital to receive services from.

The common denominator in both systems is that YOU as a customer (member) have the right to choose.

Things to think about leading into the next generation of healthcare reform:

• Mandated health insurance coverage e.g. car insurance is required for CA drivers
• Supplemental health insurance to cover "gaps" in coverage. The private market will create new products to meet niche needs.
• Uniform payments for prescription drugs and medical services based on evidence of performance
• Preserve the patients right to choose coverage or providers
• Focus on prevention, wellness programs and disease/care management
• Use claims data to match payments to outcomes

Healthcare: The Next Tech Boom?

As the healthcare landscape is changing and encountering a generation of aging baby boomers, the need for innovation and efficiency is rapidly increasing. Healthcare is facing a challenge to provide expanded services to an aging population with a decline in Medicare reimbursements of up to 35% by the year 2015. As a result, a healthcare technology boom is in the making as providers and payers are turning to technology to better coordinate care and explore new delivery alternatives.

Technology companies like Google, HP and Intel are investing millions of dollars in research and development to invent new smart devices and other technologies. These devices range from advanced sports equipment that will measure muscle contractions to programmable coffee mugs for Alzheimer’s patients. Digital Connect magazine estimates that U.S. revenue from digital home-health devices could quadruple to exceed $2.1 billion by 2010. These smart devices will play an increasing role in orchestrating patient wellness at home and hospitals. New possibilities are created such as monitoring blood pressure and sending the information in real-time to a physician. Another new possibility is to build a network of wireless medical devices to be used at home, clinics and hospitals.

In addition to smart devices, consumers, providers and payers are exploring new self-service options and online health alternatives. Kaiser Permanente has begun rolling out self-service kiosks designed to speed the physician office visit check-in process at 60 medical clinics in Southern California. And, in April of 2008, Kaiser also announced that more than 2 million members are actively using their personal health record which offers appointment scheduling, prescriptions, eligibility, lab results and email communication with physicians. Furthermore, in January of 2009, Cigna and Aetna will pay for online visits in attempts to improve efficiency and prevent costly problems. Medem, a provider of online services for physicians, serves 70,000 physicians and expects the number of e-visits to exponentially grow over the next few years.

Healthcare is heading toward an exciting wellness movement with the help of a momentous technology revolution. Smart devices are creating new possibilities that were non-existent before and consumers are taking action into their own hands by using the internet. Care providers and payers who embrace innovative technologies will find new ways to provide better care and position themselves as leaders in the industry.

Get Your Wart Removed at Wal-Mart

Soon you will be able to walk into your local Wal-Mart and receive simple medical procedures such as wart removal. But it isn't just Wal-Mart who is offering medical services; retail clinics are spreading throughout the country at other retailers such as CVS, Walgreens, Publix and Krogers.

Why are they doing this? And why should you consider going to Wal-Mart the next time you have a bad cold instead of going to an urgent care center? These are a few questions I'll examine in this post. First let's start with understanding the basics about retail healthcare.

What is retail healthcare?

• Each clinic is typically staffed with nurse practitioners who provide diagnoses and prescriptions located inside retail stores, including drug and grocery stores, and mass merchandisers.
• Clinics offer a limited menu of simple medical services (skin conditions, vaccines, common illnesses and wellness/prevention) on a walk-in basis.
• Clinics are open during extended hours and weekends. Price for a visit ranges from $50 to $75
  

What is the business model?
In-House Model

• CVS, Target, and Walgreens have their own clinics
• Higher cost strategy but better control

Exclusive Operator Model

• Publix only operates with the Little Clinic
• Easiest to manage

Multiple-Operator Model

• Multiple operators are more complex but provides greater flexibility to match local market needs
• Wal-Mart works with 8 providers

Who are the Providers/Retail Clinics ?
CVS

• 200 clinics
• Purchased 120 Minute Clinics for $170M
• Considering 2,500 clinic target over long run

Walgreens

• 250 clinics
• Acquired Take Care Clinic

Wal-Mart

• 76 clinics across 12 states
• Contracts with: Simply Retail, Redi-Clinic and QuickHealth

Publix

• 8 clinics
• Contracts with the Little Clinic
  

System Advantages

• Low cost option for uninsured patients
• Significant cost savings for patients and health plans
• Better quality of care for simple procedures
• Retail clinics divert low acuity ER business
• Convenience of not scheduling with physician offices

Retail clinics are very high in customer satisfaction. Customers are ‘very satisfied’ or ‘somewhat satisfied’ with the following:

• 90% care received
• 85% staff
• 83% convenience
• 80% cost

There are many benefits to retail healthcare. These clinics are good for America because they will increase price transparency and promote competition among providers. In addition, they will alleviate ERs of long wait times and provide new options for the uninsured. More importantly, retail clinics are important because they provide an opportunity for you, the patient, to receive better care for simple procedures.

McCain Has the Best Healthcare Reform Plan But It Won't Work

Conclusion
McCain is the best candidate with a healthcare reform plan to modernize healthcare. His plan emphasizes the individual, rather than the employer which Clinton and Obama's plan do. McCain's plan will work similarly to car insurance. Instead of seeking health insurance from your employer, you will be able to shop from whomever you like. This is good because it will increase competition from insurers, spark product innovation and enable the member to take personal responsibility for his/her health.

Although I believe these are the right steps to bring healthcare into the next generation, the plan will ultimately fail because individuals cannot take care of themselves. Moving away from employer based insurance would likely result in an upward enrollment trend of high deductible products and HSA's. Individuals would become cost conservative by saving on copays and out of pockets by seeing the doctor less often. This would create an unbalance and lead to adverse health effects, reversing the efforts of preventive care. Late detection would lead to increased catastrophic events and eventually higher costs.

McCain's approach will start out on the right foot but will deteoriate over time. I am a firm believer of consumerism and invidual choice. In fact, McCain's plan is perfect for me, someone who is self-reliant and well informed. However, for the average person with medical conditions and pain, I'm doubtful of their ability to make informed decisions.

So who should be responsible for managing care: doctors or members?


You can find more details about the McCain plan, summarized below.

Goal

• Provide access to affordable health care for all by paying only for quality health care, having insurance choices that are diverse and responsive to individual needs, and encouraging personal responsibility.

Approach

• Remove the favorable tax treatment of employer-sponsored insurance
• Provide a tax credit to all individuals and families
• Increase incentives for insurance coverage; promote insurance competition
• Contain costs through payment changes to providers (e.g. reform the payment systems in Medicare with a preventive focus)

Action Plan

• No mandate for coverage
• Reform the tax code to eliminate the bias toward employer-sponsored health insurance, and provide all individuals with a $2,500 tax credit ($5,000 for families) to increase incentives for insurance coverage
• Families should be able to purchase health insurance nationwide, across state lines, to maximize their choices, and heighten competition for their business that will eliminate excess overhead, administrative, and excessive compensation costs from the system
• Insurance should be innovative, moving from job to home, job to job, and providing multi-year coverage.
• Allow individuals to get insurance through any organization or association that they choose: employers, individual purchases, churches, professional association, and so forth.
• Give American Veterans the freedom to choose to carry their VA dollars to any provider
• Require any state receiving Medicaid to develop a financial "risk adjustment" bonus to high-cost and low-income families to supplement tax credits and Medicaid funds.
• Promote competition among providers by paying them only for quality and promote use of alternative providers
• Change provider payment to encourage coordinated care (e.g., pay a single bill for high quality heart care rather than individual services).

Impacts to the Member

• Increased consumerism, decision making and personal responsibility
• Lower premiums and increased cost savings
• New innovative products: multi-state, multi-year, job to job
• Better access to provider costs and outcomes data
• Decline in employers offering health benefits
• Lower utilization – good (reduce unnecessary visits) and bad (adverse health from late detection)

Impacts to Payers

• Payers with robust self-serve internet capabilities will thrive. Those with poor technology will play a “catch up” game and enter a downward membership spiral.
• IT will focus on building internet sites with new individual insurance capabilities.
• Product Developers/Managers will be pressured to invent new products geared to the individual while finding price balances with employer sponsored plans.
• Increased enrollment in high deductible and HSA products
• Phase out of self-funded products

Impacts to Providers

• Providers who do not communicate outcomes and cannot coordinate care will be adversely affected.
• Increased coordinated care that is outcomes focused (single payment)
• Increased price/cost transparency
• Shift to alternative providers (e.g. chiro)
• Providers will use more technology to communicate patient outcomes
• Providers will battle the new payment approach