ObamaCare

No Easy Answers

There are no easy answers when it comes to healthcare.

Healthcare is something everyone wants because it’s an essential service for sustaining a healthy life. However, the cost of healthcare is what makes it a difficult service to provide to all Americans. Politicians are continuing to struggle with what to do.

Changes to the ACA are still up in the air …“the president has no interest in bailing out insurance companies.”

Proposals to sure up the insurance options available on the exchanges require subsidies for low-income consumers. The GOP is willing to authorize the subsidies but there is a catch. Republicans want states to have more control over the implementation of the ACA – which essentially means health insurance available to Americans will vary state to state. Consequently, Democrats have expressed their concern for the consumer protections which were a fundamental part of the ACA.

Insurers are threatening to pull out of the exchanges if the funds for subsidies disappear. Lindsay Graham is suggesting block grants to states if all else fails which no one seems to like either because some Americans will get generous benefits and others not enough.

There is one thing they agree on:

Either way you slice it both Republicans and Democrats seems to be pointing to the complexity of the current healthcare system as a problem.

Republicans are making a case for a free market system that makes patients behave as healthcare consumers. The thought behind it is that consumers will only pay for what they need if they know the price. In theory, healthcare becomes a cash business which negates the need for the complexities of the current healthcare billing and collection industry. The problem is healthcare consumers may not have the cash for needed care.

Democrats on the other hand are making a case for a Single Payer system which will place the financial burden on the tax payer. A single payer system would provide a basic level of coverage to all Americans regardless of their ability to pay. The challenge is in defining the basic level of coverage because when someone else is paying most people think more always seems better – even if it isn’t. Bernie Sanders plan will be presented on Wednesday.

Healthcare billing and collection cost providers approximately $52 billion/year. Either strategy will put pressure on the Revenue Cycle industry providing billing and collection services because the healthcare payment processes will likely be simplified.

Bernie’s Plan

Labeled “Medicare for All” but is really “ACA Coverage for All” paid for by the tax payer. Hence a non-starter plan even though it is backed by 15 Democratic representatives.

The cost would likely exceed any cost savings even if the government “negotiates” all the prices with providers and drug companies. But let’s wait for the white paper that explains the savings and funding before we judge.

Moral Obligation?

Is it a moral obligation to provide healthcare to all Americans – or not?

That is the question that as Americans we need to answer. It’s clear now that many voters did not understand that it was the question they needed to answer for themselves before voting to “repeal and replace ObamaCare” when voting for Trump. In fact, Trump himself may not have even understood that given his comment about the Republican healthcare bill being “mean”.

If you haven’t been following the development of the latest Republican healthcare bill, here is a simple explanation of the differences between ObamaCare and TrumpCare. You’ll get a good idea how it affects you as well as why at least some consider the policy to be mean.

The policy problem became crystal clear to me this week when I listened to an interview given by the former CEO of Aetna. He spoke briefly about how ObamaCare is based on incompatible policies. On the one hand, the Democrats wanting to provide everyone with “good insurance” similar to the policies provided to our elected officials. On the other hand, the Republicans wanting everyone to behave as healthcare consumers which is a cornerstone of their free market economic philosophy.

The Republican policies already in ObamaCare are the marketplaces created to sell health insurance, the high deductibles to ensure individuals have more “skin in the game” [that means more money from their own pockets], the marketplaces to sell healthcare services and enable “shopping” etc. Many of these consumer initiatives have failed to engage Americans as healthcare consumers or reduce total healthcare spending. That’s essentially why we are having the healthcare debate all over again.

What’s different about TrumpCare now?

The changes in coverage requirements for employers, the penalties for not having insurance and coverage reductions for pre-existing conditions. Forcing people to pay for something that doesn’t meet their needs is a tax.

From my perspective it is time to start calling it a tax and treat it as such especially if you believe healthcare is a moral obligation. There are more costs that can be rung out of the healthcare industry if we simplify it.

Single Payer

What I have also discovered recently is that many Americans don’t understand what a Single Payer system is or how it could help them. We don’t need to look to Canada or elsewhere for a good example. Our best example is Medicare. A lot of thought and work goes into that program and in many respects it is used by the private sector as a coverage and payment framework. The core of Medicare has 2 parts: Medicare Part A (Hospital Coverage) and Medicare Part B (Medical Coverage). Part A is covered with tax dollars and Part B is paid with premiums.

A national framework similar to Medicare that is paid with a blend of tax dollars for medically necessary services [i.e. no Viagra coverage] and premiums for services that increase quality of life [i.e. Viagra coverage] would work for Americans and the healthcare industry. People are being needlessly scared by the thought of rationing and long lines for healthcare if America moves to a single payer system.

Why now?

A single payer system is the one change that can make the biggest impact for Americans now. It would give all Americans peace of mind that they will be cared for when they are injured or sick.

Basic Income

Silicon Valley leaders are recognizing the need to provide people with a “basic income” as more jobs are automated. Basic income means that industry leaders are expecting more Americans to drop in socioeconomic class. The working class [low and middle income Americans] will be impacted the most by the Republican healthcare bill. So over time it could mean that even more Americans may not have healthcare coverage or access to healthcare services.

Hospitals are required to stabilize everyone who enter their doors regardless of their ability to pay and often in good conscious provide more service than that now. If there is not enough people who can pay, the cost goes up for those who can pay or those who can’t pay go without. That’s the reality of a free market system.

Pricing Regulation

California AB 72 has been signed into law. It limits the amount patients can be billed when treated by a non-contracted provider in a contracted facility.

For example: Let’s say you have surgery at your local hospital. Your surgeon and the hospital is in your health plan’s network. The fees are reasonable for the services being provided because they are discounted to the contracted rates. However, after services are provided you discover the anesthesiologist was not in-network. Now, unless the anesthesiologist has made an agreement with you prior to service, your liability will be limited to an estimate of a contracted rate. The bill limits the total amount due from you and your health plan to the greater of the average contracted rate or 125% of the Medicare fee schedule.

For healthcare providers, it impairs their ability to negotiate contract rates that reflect the “fair market value” of their services. It’s effectively like a company adopting a pay scale that has no exceptions for knowledge, skill, experience and performance. Everyone gets the same pay. That’s a step toward developing a single payer system.

Medical Risk

I attended a Designing for Behavior Change event recently. The one statistic presented that really shocked me was that 90% of the people at risk for chronic health conditions like heart disease and diabetes related to obesity don’t know it. One third [33.3%] of the American population is obese which means their BMI > 30. How is that possible after having an increased focus on wellness? It makes you wonder what exactly gets communicated to patients about their health status.

I have spoken with clinicians [doctors and nurses] as well as health plan administrators and most have little faith that they can change the obesity trend. Most feel that their words of warning are falling on deaf ears. It’s sad because when you combine that trend with America’s aging population Medical Risk has the potential to skyrocket.

That’s probably why budget conscious Republicans [also referred to as the far right] want to pull back on Medicaid funding and why we all as Americans need to make the decision about whether healthcare is a moral obligation or not. All of us — even those currently covered by employer based insurance — will be directly impacted by your decision.

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, telehealth appointments with Sports Medicine experts and other tips to help you achieve more success in work and life.

 

TrumpCare?

Success of TrumpCare depends largely on whether or not Americans have sufficient disposable income to purchase enough insurance and needed healthcare.

As many of you know, the healthcare industry is going through more changes. Americans like the parts of ObamaCare that gave them more protections for pre-existing conditions and extended coverage for their adult children. What they didn’t like was the cost of comprehensive coverage. Some Americans paid more for richer benefits that they may or may not have needed, while others benefitted from subsidized insurance that enabled them to get needed healthcare. Unfortunately, repealing ObamaCare also means repealing the subsidies that were largely funded with new tax dollars [3.8% investment tax] levied on wealthy Americans.

Going forward cost and coverage are the two variables that you need to keep in mind when choosing health insurance. More insurance options that trade off coverage for a lower cost are likely under TrumpCare. Less healthcare coverage is not bad but Americans will need to read the fine print closely to understand what they are buying. In choosing a policy, everyone will need to consider their savings, disposable income and health status.

If you’ve never had health issues, it might be hard to imagine scenarios when you would need healthcare insurance. It’s like purchasing a new car. You don’t expect repair bills beyond scheduled maintenance unless you have an accident. Unfortunately, accidents do happen. Imagine catching your pointy toe shoe in your pant leg and doing a high diving off the curb onto the street. Speaking from experience, there is a good chance that you’ll crack and/or break a bone or two. One accident like that can get you well on your way to meeting your Out-of-Pocket Maximum for the year. As you would expect, the repair bills for your car become more frequent and get bigger each year – same with your healthcare costs. Brand [genetics], mileage [lifestyle] and adherence to scheduled maintenance [check ups] affect the total cost of the annual repair bills.

You will also likely be paying more out-of-pocket for healthcare. To help you pay for health insurance, TrumpCare will likely provide tax credits for health insurance purchased rather than subsidies and help you save for qualified medical expenses by increasing the annual saving limit for healthcare savings accounts [HSA] so that you can save more tax free. To help Americans spend wisely, the cost of healthcare services are becoming more transparent and the billing easier for the average consumer to understand.

Some Americans value paying more for the peace of mind of having richer benefits or what some think of as “prepaid healthcare” while others skimp on coverage choosing a high deductible or catastrophic policy and pay more out of pocket. Whatever you choose to buy is fine as long as it gives you enough insurance coverage. Just don’t buy the cheapest insurance policy and expect it to cover everything. If you do, you might want to sharpen your “Go Fund Me” campaign skills.

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, advice from professionals and other tips to help you achieve more success in work and life.

Lean In for Healthcare

We need to “Lean In together” to solve the biggest challenge facing healthcare now.

One of my sisters asked me when Lean In was first published if I had read the book. Even though it was getting great reviews, I had no desire to read about another women’s struggles in business and life — no matter who wrote it. However, I checked the book out of the library last week when none of the other books on my list were immediately available.

Lean In made me laugh out loud and cry because it validated so much of what I had felt and experienced over the course of my professional career and life. Some of Sheryl’s personal stories are funny but the book is also filled with some good information and stats for those struggling with the idea or the reality of balancing their careers with family life. It is a book that both men and women should read to inform their perspective and behavior towards one another.

Ironically, I was at home reading Lean In while millions of others all over the world were marching for equal rights. I didn’t join the Women’s March in San Francisco mainly because large crowds make me anxious. To some degree, I regret it now. Opportunities to make our voices heard matter even if they are deflected by those who need to hear them. They will eventually have to listen.

It will come as no surprise to those who know me well that I was also a little mentally preoccupied. I was thinking about the expected changes in healthcare, my HBA mentoring group and recent conversation with others in the industry.

Healthcare:

When I was working for one of the California based payers years ago, I said to the then VP of Strategy that everyone involved in healthcare needed a voice at the table to solve the problems. It wasn’t anything that I had read or heard, but rather what I really felt after working on both sides of the industry for about five years. When the ACA was drafted, everyone involved in healthcare had a voice at the table.

Like any other strategy, the plan for the ACA was hatched with the best information available at the time. Parts of it worked as expected and as with any other strategy, other parts need to be adjusted now that we have more information. It should come as no surprise to any of us especially those involved in healthcare. Repeal and replace sounds more dramatic but “the replacement” is likely to have many of the same elements as the ACA.

The biggest issue that remains is the rising cost of healthcare. There may be some fat left to be squeezed from insurers and prescription drugs. However, healthcare providers seem to be tapped out. For me it’s evident by the level of tension between physicians and administrations.

I don’t believe that we can financially engineer our way out of the rising cost of healthcare because the medical risk for the country is too high. Like the banking industry leading up to the financial crisis, the medical risk is spread across the industry with some verticals better capitalized than others to absorb it. As the screws get tightened, parts of the system will be squeezed to the breaking point. Unfortunately, it’s likely to be the parts serving the most vulnerable Americans.

Mentoring Group:

I participated in the inaugural HBA mentoring group around the time of the financial crisis. It was a great opportunity to meet other women in the industry and gain the perspective of those working in different fields. What’s more interesting to me now having read Lean In are the limiting beliefs that are holding some of the women back.

We did an exercise to help one another prepare for their next job. As part of the exercise, we reviewed the description for a desired job and resume for each person in the group. One of the women in the group is a highly trained scientist working in quality assurance for a biotech company. When she reviewed my resume and the job that I had selected, she told me that she didn’t see the exact qualifications for the job on my resume. She was looking for an exact match. When I selected the job, I was looking at it with a skills and competency lens. I didn’t need to have the exact experience to know that I could do the job as described. I chalked up her feedback as that of a scientist. However, now I understand that her perspective is how most women think which can be limiting to not only her but others including me. Reportedly, men don’t look for an exact match when they select and apply for jobs. My guess is that they may not hire that way either.

Communication was another problem raised by the group. The quality scientist was upset that her manager was always late to meetings. The group concocted this very elaborate plan for her to address the issue. I suggested to her that she just tell her manager “your tardiness isn’t working for me”. No one in the group believed that it could be that simple and dismissed my suggestion. However, Sheryl relays a story about Mark Zuckerberg joining a group at the office to learn Mandarin. When one of the women in the group was talking in Mandarin about one of their managers, Mark kept asking her to simplify so that he could understand what she was saying. Finally, she blurted out “my manager sucks.” Now that is something simple enough that everyone can understand and work to fix.

Mentors and mentoring groups are good because they open us up to different perspectives and challenge the beliefs that are holding us back. We need to get out of our comfort zones and if we are going to rise to the challenges ahead.

Recent Conversations:

Last week, I was able to meet with other executives working in different verticals of the industry. We discovered some shared experiences and mutual interests but what I appreciated most was being able to say “what do you think?” No one person has all the answers and it serves us all to do a reality check on your own perspective and role. Some of us are carpenters fixing problems within the existing system as we go and others are disrupters looking to turn healthcare upside down. We need both to solve the biggest challenges facing healthcare.

With that said, I initiated a new circle for healthcare professionals on the Lean In web-site so that we can meet, share, learn and challenge one another. I don’t have specific goals for the circle other than to give everyone a seat at the “table” who wants one.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, advice from professionals and other tips to help you achieve more success in work and life.