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An easy, free way to lower health-care costs for millions of Americans

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In October, the Trump administration proposed a new rule that would expand the ways employers can use health reimbursement arrangements (HRAs) to provide their employees with high-quality, low-cost health coverage. The United States Department of the Treasury estimates that once the new rules go into effect, 800,000 employers will take advantage of HRAs, which could affect coverage for more than 10 million employees.

HRAs are employer-funded accounts used to augment group health plans. Contributions made to HRA accounts are not taxed. Under Obama-era rules, HRAs can be used by employees to pay for qualifying health expenses, as determined by federal regulations and employers, in conjunction with a group health insurance plan.

HRAs can, for example, be used by people to cover out-of-pocket costs for a medical procedure. Funds that remain in an HRA account at the end of each year can be rolled over to the following year, encouraging health care savings.

Although HRAs currently offer some employees and their family members important benefits, they have been limited dramatically by federal agencies — a problem the Trump administration is now working to solve.

The administration could improve its proposed rule by clarifying that patients who pay for direct primary care (DPC) agreements would be eligible for reimbursement through their employer’s HRA. By classifying DPCs as a qualifying health-care expense, employees could use their HRAs to pay DPC costs, making it easier than ever for them to have access to more affordable primary care services.

DPCs are fixed-fee agreements made directly between primary care doctors and patients. Direct primary care agreements offer patients access to a defined set of health care services, including chronic disease treatment, check-ups and various health tests, at a flat, fixed monthly rate. At Epiphany Health, the direct primary care practice I founded in North Port, Fla., we charge only $65 per month for an adult membership and $25 for one child. A four-person family pays just $155 per month to receive primary care services, as well as have access to other typically more expensive care, like MRIs or blood tests, at a steeply discounted rate.

As the Docs 4 Patient Care Foundation, an organization I serve as president, noted in our substantive, eight-page comment invited by the administration, allowing the millions of people expected to access HRAs in the coming years to use these funds to pay for DPC agreements would be one of the most important improvements the Trump administration could make to the proposed rule. This would not only save money for millions of people, it would also reduce health care costs across the board and encourage those with HRAs to access routine care, save money and build up the funds in their HRA accounts.

Read the full article at The Hill.

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U.S. Health Care Spending Highest Among Developed Countries

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AMERICANS ON AVERAGE CONTINUE TO SPEND MUCH MORE FOR HEALTH CARE—WHILE GETTING LESS CARE—THAN PEOPLE IN OTHER DEVELOPED COUNTRIES

The United States, on a per capita basis, spends much more on health care than other developed countries; the chief reason is not greater health care utilization, but higher prices, according to a study from a team led by a Johns Hopkins Bloomberg School of Public Health researcher.

The paper appears in the January issue of Health Affairs.

The researchers determined that the higher overall health care spending in the U.S. was due mainly to higher prices—including higher drug prices, higher salaries for doctors and nurses, higher hospital administration costs and higher prices for many medical services.

The paper finds that the U.S. remains an outlier in terms of per capita health care spending, which was $9,892 in 2016. That amount was about 25 percent higher than second-place Switzerland’s $7,919. It was also 108 percent higher than Canada’s $4,753, and 145 percent higher than the Organization for Economic Cooperation and Development (OECD) median of $4,033. And it was more than double the $4,559 the U.S. spent per capita on health care in 2000—the year whose data the researchers analyzed for a 2003 study.

The researchers, along with the late Princeton health care economist Uwe Reinhardt, who died in 2017, came to the same conclusion in their well-known 2003 study, “It’s the prices, stupid: why the United States is so different from other countries.” The new analysis is in part a tribute to the late Reinhardt.

“In spite of all the efforts in the U.S. to control health spending over the past 25 years, the story remains the same—the U.S. remains the most expensive because of the prices the U.S pays for health services,” says lead author Gerard F. Anderson, PhD, a professor in the Bloomberg School’s Department of Health Policy and Management.

Read the full study at John Hopkins.

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Do Health Care Consumers Suffer from Health Insurance Stockholm Syndrome?

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During a Swedish bank robbery in 1973, police were baffled when the hostages became so irrationally attached to their captors that one of the hostages recounted to a reporter for The New Yorker“How kind I thought he was for saying it was just my leg he would shoot.” This condition of inappropriate attachment to one’s captor subsequently became known as “Stockholm syndrome.”

With all the abuse heaped onto U.S. consumers in the current health care system, reasonable people might wonder: Are American health care consumers also suffering from this bizarre condition?

Most people recognize much of the current health care system is broken, unnecessarily complex, and wildly inefficient. There are long waits to see a doctor, followed by short office visits, and conflicts of interest permeate the market. All these issues take a toll on tens of millions of people every year, both physically and financially. At an average cost of $10,739 per person, the U.S. health care system costs more than twice the average spent by other comparable countries.

With a system this dysfunctional, it’s strange more people aren’t clamoring for an entirely new, better model. Instead, similar to the hostility the Swedish hostages expressed toward the police who were trying to rescue them 45 years ago, many American health care consumers are extremely skeptical of any market-based changes to the current system—even ones that have repeatedly been proven to yield impressive results.

“What kind of scam are you pulling?” is a common refrain espoused by many disbelieving people when first they learn of much more cost-effective and patient-friendly options such as direct primary care (DPC) and health sharing organizations. DPC offers dramatically improved access to care, same-day accessibility, and telemedicine at incredibly affordable rates. How? By allowing doctors to contract directly with patients, thereby avoiding costly and intrusive health insurance middlemen. Think about it: You wouldn’t use your car insurance to pay for a new tire or oil change. Why? Because it’s much cheaper to pay for these services out of pocket than it would be to have large insurers work with your local mechanic. The same logic applies with primary care doctors.

Read the full Op-Ed at Townhall.com.

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Direct Primary Care Funding Trends Upward

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Private-sector funding for primary care clinics is increasing, as companies seek new opportunities for investment in the $3.5 trillion U.S. health care market.

One Medical, a primary care provider that offers concierge-style health care services giving patients off-insurance treatment for a flat membership fee, announced a $350 million investment from private equity firm the CarlyleGroup in August. Having previously garnered funding from firms such asBenchmark Capital, Google Ventures, Maverick, and JP Morgan, One Medical says it plans to double the numbers of clinics and members under its umbrella.

Concierge medicine offers health care to insured individuals who wish to have a better relationship with their primary care provider and are willing to pay a monthly fee. The monthly cost of concierge medicine is usually around $200 per month, on top of insurance payments, but some doctors charge tens of thousands of dollars per year. Concierge services provide medical care to patients 24 hours per day, seven days a week; provide contact information for easier access; make same-day appointments, and stay with a patient as long as it takes to meet his or her medical needs.

Read the full article at the Heartland Institute.

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The healthcare system is a racket — direct primary care could fix it

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Everyone has a healthcare horror story.

A hidden charge on the hospital bill. A last minute test or scan that ends up costing four figures. Hours spent on the phone with insurance companies to follow up on a claim and get a reimbursement. Prescriptions costing hundreds of dollars.

And it’s getting more expensive.

Since 2007, the cost of healthcare has risen 21.6 percent, while all other prices in the economy have risen by just 17.3 percent, according to the Kaiser Family Foundation.

It’s become an unfortunate reality for many, and it’s been rightly pushed into the arena of politics.

But despite the well-intended reforms of the past two decades, including the Affordable Care Act, millions are still feeling the pinch. Why?

Too often, talk of healthcare reform is focused on insurance rather than care. It’s less about how the doctor treats your family and more about who foots the bill. Almost no one can get a straight answer about the price of procedures or medicines.

Medical insurance, once a simple way to cover higher-than-normal expenses, has become a catch-all for almost all health spending. It’s no longer about surprise injuries and illnesses. Insurance is now used to cover every ache, pain, anxiety, pill, and more. It’s like using car insurance to cover every oil change, new windshield wiper, or tire.

And in order to recoup the amount they give out, insurance companies must price their options accordingly, which leads to higher prices for consumers. That’s why healthcare expenses in 2016 amounted to 17.8 percent of GDP, higher than any other industrialized country.

At least one new doctor-patient arrangement is promising a revolution in consumer choice by bypassing insurance altogether. It’s called direct primary care, and it’s catching on across the country.

Rather than relying on insurance for ordinary health expenses, these new doctor clinics rely on monthly fees from patients, usually less than $100.

If anything more is required during doctor visits, the prices for every service and test are transparent and don’t vary depending on your plan. By not accepting insurance of any type, each clinic saves on administrative costs and overhead, prioritizing patients over costly insurers.

The results are just as intended: lower costs, more preventive care, and more face time with medical professionals.
Read the full article at the Washington Examiner.

 

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Priced Out of Health Insurance, Americans Rig Their Own Safety Nets

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When their son Sky was born four years ago, Lindsie and Chris Bergevin were hit with a big surprise: $7,000 in bills for the birth that their health plan didn’t cover. Sky was two when the couple jettisoned their medical insurance, which helped them eventually pay off the debt.

Now that they’re ready to have a second child, they’re not going back to their old coverage, with its premiums of more than $350 a month. Instead, they’ve patched together an alternative through a religious group and a primary-care doctor whom they can visit anytime for a monthly fee.

“I was so jaded with the whole health-care insurance situation,” Lindsie, 35, says. “I just didn’t want to deal with it.”

The Bergevins, who rent a snug little house near downtown Boise, Idaho, are joining a small but growing number of Americans rigging their own medical safety nets. They’re frustrated by the high costs, opaque pricing, and maddening bureaucracy of health insurance.

In their quest for a different way, they’re meeting doctors like Julie Gunther who are also fed up. These physicians have opted to reject insurance, instead charging patients directly in return for more personalized care.

“I like to think we can protect people in vulnerable moments where they’re going to get lost like a widget,” Gunther said, “because they’re not a widget for us.”

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Epiphany is providing health care for patients who can’t afford Obamacare

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“Epiphany is a strange name for a medical company, but my partner, Dr. Bill Crouch, and I had an epiphany,” said Dr. Lee Gross, co-founder of Epiphany Health, 2975 Bobcat Village Center Road, North Port (EpiphanyHealth.org).

In 2010, they began riding the wave of a concept in health care that was just starting to swell. As a result, their small practice sees patients from all over the state — Lakeland, Orlando, Miami-Dade, Coco Beach. They drive across the state, Dr. Gross said, because they can afford what we’re doing here.

So what is it that makes Epiphany so different?

The two physicians had been in practice since 2002.

“We were in the rat race of independent practice primary care, where you’re trying to funnel the patients through as fast as possible, keeping office visits to seven minutes, fighting with insurance companies to get procedures and medications approved. It ended up feeling like we were treating the chart and the computer and the insurance company but not providing good medical care. We decided there had to be a better way to do this.”

Read the full article at the Charlotte Florida Weekly.

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The doctor is out? Why physicians are leaving their practices to pursue other careers

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This “bottleneck effect” doesn’t usually sour grads on staying the course, Fowler finds, but he does see plenty of doctors in the later stages of their careers hang up their stethoscopes earlier than expected. Some cite electronic health records (EHRs) as part of the reason — especially old school doctors who don’t pride themselves on their computer skills. New research by Stanford Medicine, conducted by The Harris Poll, found that 59 percent think EHRs “need a complete overhaul;” while 40 percent see “more challenges with EHRs than benefits.”

And then there are those doctors who left medicine because the cons of the job started to far outweigh the pros.

“I began to feel like an easily replaceable cog in the health care machine. With the [enforcement] of EHRs, I had to spend more time as a scribe. One night a child I was treating had a seizure and I couldn’t get the medicine to enable them to breathe because their chart wasn’t in the system yet. This kid was fixing to die and I, the doctor, couldn’t get the medicine. It was demoralizing.”

Baxter left pediatric emergency medicine to head a company that develops physiological products for personal pain management.

Read the full article at NBC.

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My wife’s story: Anatomy of an insane health care billing system

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By Carl C. Schuessler

Recently, my wife went to the doctor with stomach issues.  The doctor recommended a simple diagnostic test called a HIDA scan.  We have an HSA high-deductible health insurance plan with a $6,450 deductible, meaning we would be paying for the procedure out-of-pocket until our deductible was met.

Before my wife left the doctor’s office, she asked the receptionist what she thought was a simple question: “How much is this going to cost?”

The receptionist had no idea — and she had no way to check.  She looked at my wife like it was an unreasonable question.  A manager contacted a third-party billing agency to get her a quote, which ended up being nothing close to what we actually paid in the end.

Economic models assume participants have perfect information.  In reality, they often have no information whatsoever.

Read the full article at Benefits Pro.

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This surgeon wants to offer cheap MRIs. A state law is getting in his way.

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Dr. Gajendra Singh walked out of his local hospital’s outpatient department last year, having been told an ultrasound for some vague abdominal pain he was feeling would cost $1,200 or so, and decided enough was enough. If he was balking at the price of a routine medical scan, what must people who weren’t well-paid medical professionals be thinking?

The India-born surgeon decided he would open his own imaging center in Winston-Salem, North Carolina, and charge a lot less. Singh launched his business in August and decided to post his prices, as low as $500 for an MRI, on a banner outside the office building and on his website.

There was just one barrier to fully realizing his vision: a North Carolina law that he and his lawyers argue essentially gives hospitals a monopoly over MRI scans and other services.

Singh ran into the state’s “certificate of need” law, which prohibited him from buying a permanent MRI machine, which meant his office couldn’t always offer patients one of the most important imaging services in medicine. He has resorted to renting a mobile MRI machine a couple of days a week. But it will cost him a lot more over time than a permanent machine would, and five days a week, his office can’t perform MRIs.

Now Singh has had enough. He filed a lawsuit Monday in North Carolina Superior Court to overturn the state law, news that he and his attorneys from the Institute for Justice shared exclusively with Vox.

Singh specializes in complex liver transplants and surgeries to treat gastrointestinal cancers. He appreciates the importance of a good MRI. “Those patients need imaging. As a surgeon, we need to see what we’re going to do. We often need a lot of imaging,” he told me in a phone interview.

As Vox’s Sarah Kliff reported as part of her project to collect emergency room bills, Americans can sometimes be charged as much as $24,000 if they get an MRI at a hospital’s ER. Singh is offering a substantial discount on a medical service plagued by high costs.

But because his office can only offer MRIs twice a week, they must regularly turn away patients who need them — some of whom shouldn’t wait to get important medical scans.

“We lose all those patients,” said Singh, who also owns his own surgery practice.

Certificate-of-need laws were in vogue 40 years ago. But lawmakers quickly discovered that, in practice, they often served to protect hospitals from the competition. Forty-nine states had such a statute at one time, but in the decades since, 14 states have repealed theirs.

Read the full article at Vox.

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