Dr. Gray's Straight Talk

Honest and blunt healthcare discussion and advice.

Posts Tagged ‘rising cost of health care’

Does Your Insurance Pay For Oil Changes?

Posted by Dr. Gray on Monday, July 20, 2009

Last time, we talked about the importance of maintenance care and the role it plays in keeping your car from breaking down. We also discussed how this same level of care and respect needs to be extended to our bodies. If you change the oil in your car, or do a tune-up to avoid potential problems… how much more important is it to do the same for your body?

In most states, we are now required to carry automobile insurance. Even with “full coverage,” we understand that this is for unexpected, unearned, and excessive costs. If you’re in an accident, insurance will cover your return to pre-accident status. Car get stolen? Insurance will help you replace it. Tree fall on your car? Auto and homeowners insurance will make good. However,… does your insurance pay for an oil change? Does your insurance cover tire replacement? What if you need a new battery? Need a front end alignment… does insurance cover that?

No? Why not?… Because that’s not what it is for! Insurance, as mentioned above, is for unexpected, unearned, and excessive costs. General maintenance is not unexpected. It is not unearned. And the cost is not excessive. General maintenance is an expected necessity due to the normal affects of normal use. One could argue that many repairs are not covered by insurance because they don’t meet these three requirements. If your alternator quits working, it may be unexpected when it happens but it has been earned by use over the many miles and hours the engine has been running; and the costs are not excessive to have it replaced. If your brake pads wear out, that is expected, earned… and again, the costs are not excessive. Transmission faulty? Both unexpected and can be cost excessive, but you’ve most likely earned (meaning caused) that trouble. Therefore, it’s not covered.

So who pays for these costs that are not covered by your auto insurance? You do, of course, and you pay it willingly because you know it keeps the car doing what you’d like it to do. Insurance will be there if you are in an accident. You will be covered if your car is stolen. Warranties (another form of optional insurance) cover you if something goes wrong within a certain time frame, but again, only if those problems are unexpected, unearned, and have excessive cost… and you pay more for the warranty. In fact, some things may be covered by your insurance, but you still may choose to pay anyway because it doesn’t exceed your deductible. And… if you submit those costs to your insurance plan, you know they’re going to raise your rates.

Health insurance and your responsibility for your own health-related decisions are no different.

If it’s so important to cover these auto expenses out of your own pocket, why is it so difficult to place that level of importance on your health care decisions? Think about it. When you need a general check up, why should you expect your insurance to pay for it? If you do expect them to pay for it, you realize that you are paying more in higher premiums than they will ever cover in general costs, right? If you need treatment for a mild sinus infection, are the costs “unearned or excessive?” If you work in the yard all weekend and throw your back out, do you refuse to visit your chiropractor if the insurance doesn’t cover it?

Furthermore, when you submit general/simple/ordinary expenses for reimbursement, your insurance company uses that information against you to raise your premiums and justify “the rising cost of health care.” While reimbursements go down, premiums go up, and coverage diminishes, you’re getting less and less for your insurance dollar… all because you didn’t want to cover a brief office exam.

What’s you best alternative? Sign up for a low-cost, high deductible catastrophic coverage insurance policy with an attached tax-free health savings account. Your costs stay low, you’re covered if anything serious happens, and you pay for your own general health care with pre-tax money. What’s even better? Your doctor’s office will love you, because they know they’re getting paid now… without all the billing expense… and without the wait. In fact, most health care facilities I know offer a 10-25% discount for paying at the time of service. Need a little more care than you can pay right now? Most offices will let you make payment arrangements, and you pay them out of the health savings account which saves you a bundle on your income tax.

Don’t kid yourself… universal or government-provided health care won’t fix this problem. The real rising cost of health care starts with our individual expectations that someone else is responsible for it.


Posted in General Health, Political | Tagged: , , , , , , , , , | 1 Comment »

When Government Plays Doctor

Posted by Dr. Gray on Wednesday, May 6, 2009

A good friend of mine posted a wonderful piece recently that I felt worth reposting here.

This week, concerns about swine flu have dominated the media and many government officials. While the American people should be made aware of infectious diseases and common sense preventative measures, much of the hysterical reaction from government only serves to remind us how detrimental to your health it can be when government plays doctor.

As a physician, I have yet to see any evidence that justifies the current level of alarm. Influenza typically kills around 36,000 people every year in this country and hospitalizes a couple hundred thousand. So far there are only a handful of confirmed deaths attributable to this strain, and most of those sickened have or will fully recover. Every death is tragic, but I see no reason to deal with this flu outbreak any differently than we typically deal with any other flu season. Instead, government in its infinite wisdom is performing even more invasive screening at airports, closing down schools and sporting events, and causing general panic.

We had a similar outbreak in 1976, with only 1 death from the flu, but mandatory vaccinations killed at least 25 before the program was abandoned.

When government gets involved in healthcare decisions, the cure is so often worse than the illness. And yet, this administration will likely consolidate the government’s power over your health with sweeping new reforms that are already being discussed in the Senate.

Government has not improved healthcare, and has not made it cheaper. Quite the opposite; costs have skyrocketed, and quality has gone down in many ways. Gone are the days of the country doctor making house calls, or of voluntarily giving away medical services at charity hospitals. The bureaucratization of healthcare these past 45 years has made things worse. It saddens me as a doctor that physicians are less and less accountable to patients, but more and more accountable to government red tape, insurance companies and attorneys. It seems so perverse to me that important medical decisions that will directly affect the lives of all or nearly all Americans are being hashed out behind closed doors in Washington rather than between doctors and patients.

There is perhaps nothing more valuable to a human being than his or her health, which is why I’ve always considered the practice of medicine so crucial to our well-being. Any intrusion by government into the privacy and trust between doctor and patient is detrimental to the art of medicine. It distorts the whole dynamic of who the client really is when doctors must answer more to government or insurance companies than to their patients. The best solutions to improving quality and lowering costs of healthcare would be measures that put decisions back into the hands of patients and doctors, where they rightfully belong. I have introduced HR 1495 The Comprehensive Healthcare Reform Act, which promotes health savings accounts and tax deductibility of healthcare costs as an important step in this direction.

The unfortunate reality of this recent health crisis, as with any crisis, is that it presents opportunities that the unscrupulous will take advantage of, while the fearful become more compliant.

Wow! Pretty profound… yet truthful… statements. I wonder if we can really understand and take to heart what he has said. Let’s break it down, huh?

  1. Although tragic, the swine flu situation is being blown out of proportion for ulterior motives
  2. That motive involves more government control over your health care decisions
  3. Increased government involvement has actually caused the rise in health care costs over the past 45 years
  4. Increased government involvement has also led to a decrease in the quality of care provided
  5. You and your interests are becoming less and less important with the expanding role of government

When are we going to wake up? How far must government go before you learn that they do not have your best interest in mind?

A couple years ago, there were outcries because The Patriot Act was seen as an invasion of privacy and freedoms. Yet, when the government proposes to take total control of your health care decision making ability… nothing. What was the most complained about provision of The Patriot Act? Wiretapping of overseas phone calls. Phone calls… oh the outrage! But now… they want control of YOUR PERSONAL ABILITY TO MAKE YOUR OWN HEALTH CARE DECISIONSand nothing???

Partisanship is not only detrimental to individual and collective good, it is also STUPID. Wake up people. Take a whiff of that crap they’re shoveling before you swallow it whole.

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What Is “Phantom” Coverage?

Posted by Dr. Gray on Thursday, March 5, 2009

Although it’s not getting much play in the media right now, it should be. “Phantom” coverage refers to the latest trend in insurance coverage whereby a policy is sold touting that it has great reimbursement rates and is a good deal for the patient and doctor. Unfortunately, that’s not how it plays out.

In these policies, the insurance company raises the deductible and copayment amounts to the patient… followed by a global fee cap on reimbursement to the health care provider. What’s a “global fee cap,” you ask? Under a global fee cap, reimbursement for services are capped at an arbitrary amount regardless of the procedures provided or needed. As you can probably imagine, these cap amounts are obscenely low. Current average? $42.00.

Yup. Forty-two dollars. If you are a regular patient coming in for a quick tune-up, brief exam and adjustment only, the maximum reimbursement to the office is $42.00. If you just fell down the stairs and have potentially broken your arm which requires a thorough examination and x-rays… $42.00. How’s that? If you have a serious injury, how would you like your doctor or hospital making sure you only got $42.00 worth of investigation… because, honestly, after that they are losing money.

Well, what about that makes it “Phantom Coverage?” In conjunction with the $42.00 fee cap, they have raised the patient’s copay to $40-50.00. So… the patient still pays the entire amount anyway! If that’s the case, why pay the insurance company in the first place? Think about it… you’re paying the insurance company $300-1000 per month for what? To screw the health care facility? To decrease the quality of care you receive? What’s the point.

My advice? Tax-deductible health-savings account tied to a high-deductible, low cost policy that is only used for emergency purposes. I know of relatively few doctor’s offices that will not work out arrangements to pay for your care over time, or won’t give you a time-of-service discount. Quit bending over for the insurance companies. The economy’s been weak lately, but that’s not been reflected in the bottom line of the insurance companies.

Why do you think there is such a big push for universal health coverage in this country, and the massively powerful insurance lobby hasn’t been fighting it? If the government were providing the insurance, they’d be out of business, right? Wrong… they’ll be the ones contracted to administrate the policies, so the politicians won’t look like the one’s rationing care.

Wake up, America.

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America… the best country money can buy.

Posted by Dr. Gray on Monday, December 29, 2008

I love this country… let’s get that straight. Know what I love about this country? The freedom to affect our own governance. A government “of the people, by the people, and for the people.” Unfortunately, that fact has been lost, abandoned, or bastardized by nearly every member of our current federally-elected representatives.

The people have no bearing on political direction… well, not exactly… we have relinquished our control. We have allowed ourselves to be duped into thinking the government actually cares about the people. Our forefathers knew the corrupting influence of money and power and designed The Constitution for the protection of the people and the states… from the federal government. Now, however, we are promised “hope and change,” and assured that the government will take care of us. We’ve gone from JFK’s “Ask not what your country can do for you, ask instead what you can do for your country,” to “Gimme… buy my vote… whaddya gonna do for me?… I shouldn’t have to pay for that, the government should give it to me.”

Here’s the truth… If you’re on the government tit, someone else is going to decide when and on what you feed. You are no longer free. This past election year, I was disgusted by both sides of the aisle vying to sell their vote for the most government cheese.

Our government is now based solely on the whims of the highest bidder. Control based on paid advertisements drives the networks to tell you the news they want you to hear, in a way that makes you believe what they want you to believe. Lobbyists in Washington finance the election and re-election campaigns of representatives in order to influence the voting habits of those representatives. The American public sits in their recliner bought on credit from Nebraska Furniture Mart and lazily wonders how else they can get something for nothing… and the politicians, like marketers, are jockeying to buy the most votes. If they can’t get it legally, they just cheat. It’s pathetic.

Want some proof that our government doesn’t give a crap about you? Proof that you’ve been bought right along with your representatives in Washington?

What were the big issues in the past election? Health care… insurance coverage for all… drug coverage… energy… big business bailouts… the real estate market… and schools. Okay. There are the issues the politicians and news agencies told you were important this election cycle.

Now, here is the list of the top ten lobbying groups for the past ten years:

  1. Pharmaceuticals/Health Products – $1.5 billion
  2. Insurance – $1.1 billion
  3. Electric Utilities – $1 billion
  4. Computers/Internet – $820 million
  5. Business Associations – $745 million
  6. Education – $727 million(excludes money from teachers’ unions, so this figure should be much higher)
  7. Real Estate – $696 million
  8. Oil and Gas – $687 million
  9. Hospitals/Nursing Homes – $649 million
  10. Miscellaneous Manufacturing and Distributing – $613 million

Wow! Look familiar? Let’s see: health care covered by #1, 2, and 9; energy covered by #3, and 8; big business bailouts bought with #4, 5, 7, and 10; real estate covered by #5, and 7; and schools covered by #6. Looks like that about covers it, huh? Congratulations… you’re a pawn. A bought-and-paid-for commodity who is blind to reality. You were so intensely interested in Obama versus McCain, that you failed to notice that neither will be different from the other.

America… the best country money can buy.

Posted in General Health | Tagged: , , , , , , | 1 Comment »

The Rising Cost of Health Care – Part Two

Posted by Dr. Gray on Monday, November 3, 2008

My last column gave a hypothetical and generalized view of the financial workings of a private healthcare office. In this article, I’ll discuss why I disagree with “universal health care” (UHC), and some thoughts about how insurance should be used in this country.

There are a multitude of reasons why I oppose UHC. In no particular order, I’ll try to address many of them below.

1) Government-provided or -sponsored health care further removes the patient from the health care decision process.

The rise of managed care in the 1990’s is a perfect example of this. With the introduction of HMO’s, we immediately saw patient choice limited. Patients are told who to see, what will be allowed, and how much they’re going to pay. As many of you remember, this led to long lines, substandard care, impersonal relations with your doctors, inconvenient office locations, no patient control, and no doctor control. In short, a bureaucrat is placed in the position of making your health care choices for you; and he’s making choices based on the bottom line instead of your health. With all that, costs have continued to rise, and general health statistics have continued to decline.

2) UHC is not free!

This is one that upsets me. I often hear people talk about how “the government should provide free health care.” Let’s get one thing straight… the government has no money! As such, they can not provide you with anything. Every time you ask for anything from the government, what you are really doing is asking your neighbor to pay for it. Through increasing taxation, you are forcing your neighbor to pay for it. There are certain things a society is responsible for as a whole, but why should your neighbor be responsible for your health care? Put it another way… if you choose to take care of yourself, eat right, and exercise, why should you have to pay for your neighbor’s ailments related to smoking and obesity?

3) UHC will diminish patient choice and lead to rationing of care.

Think this won’t happen? Ask them in Canada or Great Britain. In fact, we need only look to… Oregon! In July of this year, a woman on the government-sponsored Oregon Health Plan was denied cancer treatment, and instead offered… death. As reported in the newspaper The Oregonian, “After her oncologist prescribed a cancer drug that would cost $4,000 a month, Wagner was notified that the Oregon Health Plan wouldn’t cover the treatment, but that it would cover palliative, or comfort, care, including, if she chose, doctor-assisted suicide.” This is only one example, but I’ve got volumes of research detailing this reality.

4) UHC will not lead to an increased mentality of prevention.

I keep hearing that increased access to care will cause more people to practice prevention. This is absolute hogwash. Right now… practicing a preventive lifestyle is free. A preventive lifestyle does not merely consist of mammograms and prostate checks. It is primarily making the right choices on a daily basis. Prevention is largely related to your dietary choices and activity level… not how many times you see the doctor. In fact, I would argue that UHC would actually decrease thoughts of prevention. Why worry about prevention when you can just run down and get treated for free, right?

5) UHC will stifle innovation and advancements in health care.

Nearly all advancements in pharmaceuticals and medical technology in the past 50 years have come from the United States. Why? Because there is financial incentive to do so. If the potential for profit is there, companies will invest and research for ways to fill that void. UHC, however, resists new treatment methods, techniques, and medications. A good example is the French physician who patented a new medication for dialysis patients that has become the standard of care in America because of its superiority. Practicing in London, he’s not able to use his own patented medication because the NIH refuses to pay for it; choosing instead the cheaper, yet less effective, old medication.

6) The federal government has no Constitutional authority or obligation to provide health care.

The fedgov’s primary role is supposed to be to protect our rights to life, liberty, and the pursuit of happiness. Notice, that role is to protect, not to provide. As per the tenth ammendment to the Constitution, anything not specifically delegated to the federal government in that document is reserved to the states or to the people. Every dollar that goes from the fedgov to this new entitlement program will take away from the fedgov’s ability to protect those rights. Freedom comes from our rights, not our government. If your freedom, or your healthcare, comes from your government, you are no longer free because they can also take it away.

Whatever happened to personal responsibility in this country? Why has the cost of health care risen in this country? Because the people have increasingly removed themselves from the responsibility of their health care decisions. Employer-provided insurance insulates the patient from the cost of insurance, and removes the patient’s right to use the market to their advantage. How many consider that a $20.00 per hour job with benefits is actually a $30.00 per hour job but one third of it goes to insurance premiums? If you were acting like it was your money… and it is your money… you would seek to find better coverage for less money, and take the balance home for your family. However, most fall into the trap of only making $20 per hour and taking whatever plan the company chooses. Do you think the company is going to choose the plan that’s best for you? Or do you think they are going to choose the plan that costs them the least?

Is insurance necessary? … Yes. But we are going about it the wrong way. It’s time to return the responsibility for health care decisions and finances to the individual. We should reject employer-provided insurance and take the increased pay instead. We should remove stifling laws that prevent competition between insurance companies and across state lines. Unfortunately, the insurance industry has not proven capable of regulating itself. As a cost for the decreased restrictions upon their industry, they should be required to practice full, complete, and open disclosure. Already charged with and funded, the FDA and the Department of Justice can start doing their jobs… and protect the American people, as opposed to selling out to the highest corporation. Why would they do that? Because people will be paying attention again.

Our mentality about insurance must change. Coverage should be low-cost, high deductible, and rarely used. Most regular doctor visits should be paid for out-of-pocket, saving insurance coverage for catastrophic events or illness only. When’s the last time you used your car insurance to pay for an oil change? What’s that… they didn’t pay for it? Then why did you have it done? What’s that… good maintenance? Why should your body be any different?

If your neighbor doesn’t take care of his car, neglects to perform maintenance, and hot rods it around town… should you be forced to fix it for him when it breaks down? No? But, he needs that car to get to work. He needs it to take care of his family. You seeing the parallel here? Responsibility lies with the consequences of one’s actions and choices. This applies across the board. Does this mean I disagree with any form of government health care assistance, such as Medicare, Medicaid, etc.? No. But it should be the exception, not the rule. Some people need help, that’s a fact. And the American people have proven themselves exceedingly generous when left to charitable giving. Having to resort to public support should be discouraged instead of encouraged. It should be used as temporary assistance to help someone out of their current situation, not as a permanent way of life, except in those cases involving permanent disability. Even then, private charities have proven more generous and more efficient than anything the federal government could ever sustain.

In conclusion, take control of your own health care. Value it and value your body. Take responsibility for the consequences of your actions and choices. Once you realize that you are the only one in control, making good choices becomes easy. Vote for more freedom, not more governmental control. Pay for your own insurance, and maintenance care. You’ll value it more, get more out of it, and you’ll live a longer, happier, healthier life.

Posted in General Chiropractic, General Health | Tagged: , , , , | 1 Comment »

The Rising Cost of Health Care – Part One

Posted by Dr. Gray on Tuesday, October 28, 2008

The “rising cost of health care.” How many times have you heard that rhetorical statement made to make a political point? Being that relatively few of you are in the health care field, I thought I might shed a little light on the inner financial workings of a private health care office. Not too detailed, just a simple exploration.

I have a small health care practice in a suburb of Kansas City. While, technically, a “small business,” we are comparably considered one of the busier offices in the area. When I take into account all of my overhead just to open the doors of my office, and factor in the cost per patient associated with that cost, it costs me $27.00 every time a patient walks through the front door. If that patient converses with the front desk, then turns and leaves, I just lost 27 bucks.

Now, for reimbursement… if my normal office charge is $50.00, that’s a profit of $23.00, of which I’ll pay roughly 38% in taxes. So, I’ve just made roughly $14.00 for risking my career, reputation, livelihood, and ability to support my family in that one visit. Now… multiply that by the number of patients seen per day, week, month, etc. and you can begin to see the amount of risk (not to mention time, money, and effort that must be expended in order to achieve the education level of doctorate) that must be taken in order to make a significant living as a doctor.

However, that’s only if we’re talking on a cash basis and 100% collections. The fact is that nearly 83% of my patients have some form of insurance coverage for my services. For most doctors, that percentage is higher. The two most common scenarios encountered in our office involve “in-network coverage” and what is known as a “global fee cap.”

Although a living can be made operating “out of network,” it is more difficult, marketing intensive, and involves more direct cost to the patient. Also, the mentality of patients is that if they are paying for insurance, they’re damned sure going to go in-network to take advantage of it. That can be argued as a positive for the doctor in that they have easier access to the patient. Therefore, we remain “in-network” providers for the majority of insurance plans offered in our area (therefore, cash basis does not apply).

In order to be “in-network” we are forced to sign a contract agreeing to a discounting of fees, “peer review,” and relatively little legal recourse regarding foul play by the insurance company due to forced arbitration agreements. This discounting of fees averages to approximately a 32% fee cut, and can be arbitrarily changed by the insurance company at will (again, little recourse due to forced arbitration and unlimited legal and financial resources of the insurance companies). “Peer review” refers to an employee doctor that is hired by the insurance company to deem care as medically unnecessary, thus not reimbursable and not collectible. This accounts for another approximate 10% cut to the collectible portion of services rendered. Another 10% cut can be attributed to unpaid deductibles, copays, or cash portions.

Therefore, the majority of collectible services in the average health care office is only 48% of the actual fee for service rendered (after speaking with several other doctors, this percentage is sometimes much lower). In our original estimate of a $50.00 office charge with $27.00 in overhead, I would lose $3.00 every time I treated a patient. So, in order to make that same paltry $14.00 profit margin, my fee for a simple office call must be $103.29. You following me here? {14 = 0.62(y*.48 – 27)}

“Global Fee Caps,” on the other hand, are a whole new animal. In the past couple years, United Health Care, Coventry, and others have seen fit to institute (remember the arbitrary nature discussed above with which they can change reimbursements) this monstrosity on the health care world. A “global fee cap” is the determination that every visit, regardless of what services are rendered is capped at an arbitrary, pre-set amount. The rate is currently set at $42.00. So, no matter what situation the patient presents with, and no matter what services are necessary, the reimbursement is capped at no more than $42.00. Need a quick consultation? $42.00. Need a complete examination, with x-rays, and therapy for the reduction of pain? … 42 bucks. That’s it.

“But you would lose money on every patient, why remain in-network?” you say. Here’s the rub. These patients have been hit with a $35.00-40.00 copay per visit, therefore, there is an immediate profit of $8.00 – 13.00. So… the patient pays, let’s say, a $35.00 copay at the time of service… we provide the least amount of care possible, yet still responsible, because any service beyond $42.00 is non-reimbursible (and not billable to the patient)… and the insurance company decides to react in one of two ways: they pay the $7.00 balance, or they initiate the “peer review” process to determine if they can get out of paying it by declaring it medically unnecessary. Want another rub? If they declare it “medically unnecessary,” they not only don’t pay the balance, but they demand you reimburse the copay to the patient… even if the patient disagrees with the determination.

The decision to remain in these networks is multi-faceted, even though the compensation is small. First, is the sincere desire to help as many patients as possible. Second, is in the opportunity to stimulate referrals of other patients who not only need care, but may have a different insurance plan. Third, is the fact that the patient may have never chosen to come to my office in the first place if I wasn’t “on their plan.”

What’s worse? Some of these plans have now increased the copay amount above the level of the “global fee cap.” In essence, the patient has been sold phantom coverage in which the insurance company is not really providing anything, but is collecting premiums.

Why are health care costs “rising” in this country?

Pure and simple… the insurance industry, and the public’s mentality about what and how insurance should be used.

More about this topic in part two… when we’ll begin to discuss how “universal health care” will fit into this mess. In the meantime, please feel free to comment.

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