Patient, Advocate Thyself

While perusing today, I came across the Daily Dose blog from Deborah Kotz who references a column from the New England Journal of Medicine about the link between outcomes and physician sleep deprivation.

In her blog, Deborah poses the following questions: 

“Would you want to know if your surgeon was awake on call the previous night? Would you opt for a different surgeon for your procedure?”

I referenced blind trust in a previous blog, like the blind trust we sometimes place in doctors and mechanics.

But this is not something you want to fool around with.  This is your health.

Patient, advocate thyself.

Times they are a changing.  Patient Advocacy is becoming more than a buzz word.  It is becoming a necessity.  And it makes a great New Year’s Resolution, too!

I would pose not a question, but a statement to anyone who is planning to undergo surgery. 

Ask your doctor if he/she has been on call. Ask if he/she is sleep deprived.  Ask if he/she is feeling under the weather, tired or in any way impaired.

Ok, so I posed a bunch of statements…and those statements are about asking questions of your doctor before you undergo surgery.  In fact, you may want to create a checklist of questions for your healthcare provider every time you see one and not just when you’re about to undergo surgery. 

Create a list of questions for your annual physical. Create a list of questions for your next check up on your chronic condition. Create a list of questions when you sustain an acute injury (like a broken leg) and need to see a doctor.  Research your condition on sites like Revolution Health or WebMD prior to your visit.  Know your symptoms prior to your visit. 

With doctors spending around 15 minutes with each patient (some industry experts are predicting this will decrease in 2011) we need to maximize our valuable time with the doctor.  Coming prepared, asking good questions, and advocating for ourselves will go a long way to assure that we receive the best care possible.

In short, advocate for yourself.  Don’t leave it to the doctor to disclose lack of sleep or ask the right questions about your condition.

Now if you’ll excuse me, I’ve got to take a nap.  All this talk of sleep deprivation is making me tired. And in the interest of full disclosure and patient advocacy, no I don’t have surgery in the morning.

Beware of Swinging Pendulums

How does your employer choose a health insurance carrier?

Rates?  Selection of doctors in the network?  Programs for wellness and disease management?  The carrier’s ability to control costs and offer a stable rate or fee year over year?  The plan’s creative ways to manage costs?

It is likely a combination of many factors including those listed above that dictates how an insurance company is selected.

Health plans compete with one another on similar points. How big is the provider network? How are they able to come up with creative solutions to drive cost savings which results in reasonable year-over-year rates/fees?

One thing is for certain: controlling costs is paramount.  No one wants to see 10%-12% increases every year.  It’s a sad state of affairs when an 8% increase upon renewal brings a sigh of relief for some employers.

Thus the insurance carrier’s ability to cost controls is of utmost importance to secure new members.

Carriers help control costs in a number of ways such as claims analysis to identify cost drivers, disease management and wellness programs, utilization review and increasing the size of their provider network.

Yes, the size of the network helps control costs.  Here’s how: the insurance company negotiates favorable (typically lower) rates with providers to be part of their network. Those negotiated discounts drive savings for the employer when their employees see the in-network “discounted” providers – each visit costs less than if the employee were to visit an out-of-network provider.  The deeper the network, the more likely it is that the members choose in-network providers, thus a deeper discounted rate is achieved which keeps costs down.

The size of the network also reduces “disruption” when an employer changes insurance carriers – the disruption being whether or not employees have to choose a new hospital and/or doctor because the new carrier’s network is different from the previous carrier’s network.  The larger the network, the more choice of providers which increases the likelihood of an employee’s current doctor being part of the new insurance carrier’s network, thus minimizing disruption.

In summary, the size of an insurance carrier’s network has two key marketing points:

-It allows a member to choose from a large group of hospitals and doctors

-It drives cost savings through negotiated discounts which results in lower costs.

From a member/patient perspective: more choice, less cost.

What we’re seeing today is an interesting trend away from some of the key factors on which health plans have competed in the past.  This is not to say that network size is no longer a key point or a determining factor or that discounts aren’t important, but the choice and pricing aspect of this is changing.  From a member/patient perspective, the pendulum appears to be swinging the other way.

Health insurance carriers have created (perhaps resurrected is a better term) something called tiered networks, also referred to as “limited” networks.  It is a way for carriers to control costs by “tiering” providers based upon their costs and, in some cases, quality.

If you are a low cost, high quality provider the health plan places you in the best tier (lower member out-of-pocket costs/co-pay) thus driving more members to see you.  If you are a high cost provider members will still be able to choose you, but it will cost the member more as you will be placed into a higher tier (higher member out-of-pocket cost/co-pay).

Tiered networks don’t eliminate member choice, but makes it a matter of “you want it, you pay for it”.  This tactic was typically a phenomenon seen only with out-of-network, non-discounted providers in PPO plans.

Therefore the growth of tiered network products appears to have a number of pendulum-swinging effects:

1) Choice is adversely impacted – if an employee enrolled in a tiered network plan wants to go to a higher-tiered hospital or provider, they’ll have to decide if the added cost is worth it.  And the data to help the member decide if its worth it may not be readily available.

(I argue that the term “less” choice applies because of the impact to member choice – if you are on a fixed income and can’t afford to continue seeing their doctor for the past 10 years because they’ve been placed in a higher tier, you have less choice).

2) Out-of-pocket cost is adversely impacted – there is an additional member cost to see a higher tiered provider whereas before it was typically the same cost no matter which in-network provider you saw.

From a member/patient perspective:  Less choice, more cost.

Suffice it to say beware of swinging pendulums.

Let me state that I see the value of tiered networks.  I support the general goal: control costs and increase quality.  Tiered networks have developed out of necessity due to rising healthcare costs. As a country, we have to become smarter consumers of healthcare.  I feel tiered networks will push us to become smarter consumers of healthcare.  And that is a good thing.

My point is this:  lower cost and increased quality does not come without sacrifice.  And the latest casualty appears to be choice and cost for members/patients.

The question becomes – can we have it all?   Can we have choice with cost controls and increased quality?  The answer, at least for now, is likely no.  If you want choice you can have it, but you have to pay more for it.

Now if you’ll excuse me, I need to tell my PCP that it’s time to increase quality, lower costs, and improve outcomes because I don’t want any disruption.

The Benefits Package #2 – Ready to Read!

Here’s a link to a collection of healthcare bloggers’ thoughts on (drum roll please) healthcare!

(Were you expecting something else?)

It is called The Benefits Package and it includes topics like healthcare reform, ehealth, employee benefits, and delivery of healthcare from some of the industry’s thought leaders.  Check it out!

An Ounce of Prevention, a Pound of Cure, Bake at 200 Kelvins for 15 minutes…

If you work in business, the letters R, O, and I mean something when they are squeezed together. 

Specifically, ROI stands for “return on investment” or how much you get in return if you invest X amount up front.   Some call it ROR or Rate of Return.  It is the money gained or lost in comparison to what is initially invested.

It is a very well accepted industry norm to determine if something is a worthwhile investment.  Was this marketing campaign worth the money?  Crunch the numbers and see what you get back in return for your investment in the campaign.

Perhaps you’ve also heard the phrase “an ounce of prevention is worth a pound of cure” which is a quote from Mr. Ben Franklin. As smart a fella as he was, I don’t think he had the foresight to know just how well it applies to our healthcare system today. 

As for my note about kelvins in the title…it is a measurement of heat and has nothing to do with this blog other than the fact that I think it’s cool to name a measurement of something after yourself. In fact, I’d pay 100 “Daves” (my name) to be able to create a form of measurement using my name. We can discuss the value of “Daves” later…

So why are we talking about ROI and Ben Franklin?

The healthcare industry is a business. It employs people, it generates profit, it typically responds to market pressures and economic principles. (I say typically because some would argue that healthcare is not consumed the same way as other goods and services in this market so some of the typical market forces may not apply. Humor me on this one).  As such, a term like ROI would appear to be pertinent to the healthcare field.  

Back to Ben Franklin…

Why did he say this?  If he didn’t have Nostradamus-like insight into our future healthcare system, what do you suppose he meant? 

Maybe he was referring to another term that we use in business – proactive – meaning to act before something is an issue.  The opposite is reactive.   As in reacting to the costs of an overweight diabetic in your company rather than encouraging healthy behavior to prevent the medical conditions.

If it makes sense to be proactive instead of reactive, why are we so fixated with measuring the ROI of prevention and wellness? Why are we focusing on the “pound of cure” instead of the invested “ounce of prevention”?

And more importantly, why aren’t we thinking more about being proactive and not reactive?  If the investment can save you money in the long-term, it’s a worth-while investment, right?

From a business and financial standpoint, there aren’t free dollars in a company that you can just “invest” – you need to make a case for the dollars to be invested as well as measure the outcome of the investment.  So I suppose that’s why we are so fixated with measuring ROI.

The problem is that wellness ROI isn’t always apparent in year 1. It takes time.  In fact, communicating the need for wellness and the benefits of wellness programs to a company’s employees is many times the best first step. That alone could take a year and gobble up the year 1 budget for wellness.

Unlike a marketing campaign in business where you can measure a sale generated by that marketing campaign, the ounce of prevention invested in a wellness program may not yield any sort of real “return” in a one year period.

But what about another way to determine if a wellness program is worth the investment?  An up-front way to determine if a long-term wellness program will be worth the investment?

Before I dive into this, let me set the stage for a moment through a simple example.

There’s a function of business that is necessary, costs a whole lot of money, and generates nothing in the way of profit (at least not the typical way profit is measured).  Yet companies spend a ton on it each and every year. 

In short, it is a cost center, not a profit center.  It is information technology – aka “IT”.

To put together a solid IT infrastructure that is safe, secure, reliable, scalable and efficient, companies spend…a lot.  They don’t look back and say, “OK we spent $250,000 on new servers earlier this year…how much did this investment make for us at the end of the quarter?  What’s our ROI on this? 

They don’t measure it like this because they know that IT investment is necessary to assure that the company will run efficiently and effectively. It is the backbone of the organization.

This isn’t to say that companies spend blindly on IT.  Instead of using ROI on the back end, they have ways of measuring in advance if an IT investment may be a good investment at a particular point in time: time value of money to appraise long-term projects.

If you attended business school, you may know what this is.  For thsoe who don’t, below are a few components of it:

Time Value of Money

DCF – Discounted Cash Flow

NPV – Net Present Value

(Definitions/links courtesy of

These measures are a way for those holding the budget purse strings to determine which potential investments may yield the most bang for the buck over the long-term. 

As stated in the above links, time value of money is the value of money figuring in a given amount of interest earned over a given amount of time, DCF is a standard method for appraising time value of money and measuring long-term projects, and NPV is a standard method for measuring time value of money to appraise long-term projects.

Do you see some themes here?  Time…long-term projects…value.

Maybe it’s time we took an IT-like look at prevention and wellness measurement.  Maybe it’s time to look at prevention and wellness as the backbone of  an organization’s most valuable assets – its people.

Now if you’ll excuse me, I’ve got to see the vending machine guy.  I put 5 Daves in the vending machine, pressed the button and nothing came out!  (Maybe this is an indication as to the value of Daves??)

(Author’s note: I typically use the term “healthcare” to mean anything related to healthcare including but not limited to providers, payors, employers and employee benefits. Specific to this blog post, however, I’m speaking in terms of employee healthcare and what carriers and employers and wellness companies invest in prevention and wellness programs).

A CON Job Gone Wrong?

Shouldice Hospital in Canada is well-known for its systematic approach to conducting efficient, effective repair for a specific type of hernia.  It is low-cost, takes under an hour, and less than 1% of those who undergo this procedure at Shouldice experience a recurrence.  Shouldice has been the focus of many a case study for young future administrators and doctors.

Yet here in the United States, we continue to view the general hospital approach as the most effective approach to provide healthcare.  And our healthcare costs continue to rise.

Recently I attended a panel discussion at Northeastern University which featured three speakers. The speakers were asked to share their thoughts on the opportunities for entrepreneurs post ACA.  At the end of the panel discussion, I asked a question about the likelihood of a Shouldice-like model of speciality providers becoming more prominent in the United States for more common “routine” procedures.

I was quickly put in my place by one of the speakers who stated that it was not likely at all because we are moving towards a government system with a continuing focus on general hospitals and not towards any sort of specialty hospitals (paraphrasing here).

He is right. We are on this road.

Let me ask you this – if you’re driving on a road which is cluttered with traffic, do you ever look at the roads around you to find a faster, more efficient alternative to your current route?  Maybe not – maybe you follow the map you have especially if you don’t know where you’re going.

But if you’re stuck in traffic or the map is leading you in circles and has no end destination, do the other roads warrant a look?

Let’s play pretend for a moment.

Pretend that higher deductible health plans are the norm.  Pretend that health provider cost and quality data is readily available a the click of a mouse.  Pretend that the average consumer of healthcare is more savvy and researches the heck out of anything he or she is having done (like the research done on Consumer Reports or JD Power when purchasing something like a car).  Pretend that HSAs become widely more popular – and why wouldn’t they?  It’s your money, it’s pre-tax dollars, and it’s portable!

Continuing on this path of make-believe, let’s assume that you are in need of a medical procedure. Perhaps its hernia surgery or perhaps its a Coronary Artery Bypass Graft (CABG).  Both have become fairly “routine” procedures in modern medicine.  So you begin your research to find a place that can provide this for you at a reasonable cost. (Remember, you have a high deductible health plan, co-insurance based and with a high out-of-pocket maximum, thus you have become a savvy consumer).

You find a small, private health provider – a small hospital perhaps.  It’s not a covered provider under your insurance so the procedure won’t be covered.

However, your research shows that it can provide your needed procedure a fraction of the cost.  Your research shows you that they do nothing but this procedure – dozens per day – so it’s like an assembly line – efficient and effective.  Your research also shows you that the results are stellar – low rates of complication and infection, high rates of success…and you’re out the door in no time and back to your life.   Lastly, your research shows that the physicians who perform the procedure are board-certified, top of their class, well-respected and with no history of malpractice.

Oh, I forgot to mention…in this make-believe scenario your out-of-pocket HSA cost for this non-covered provider’s procedure is less than the out-of-pocket expenses at an in-network, well-known general hospital due to your high deductible, co-insurance based health plan.

The decision becomes a no-brainer, right?

Of course, these entities would not replace what we have today. In fact, a push towards primary care and away from specialists is what some feel this market needs in order to better manage the whole patient.   I don’t disagree. But perhaps these Shouldice-like entities will have their place as cost-effective, high quality alternatives for the more commonly performed procedures performed in general hospitals.

So why is it that we don’t have a bunch of Shouldice-like entities in the United States for some of our more routine procedures? Why is it that we have resorted to medical tourism – leaving the confines of our country to travel across the globe to find high quality, low-cost health care?  (Ok, so maybe the medical tourism note is a bit unfair as I know some of the procedures done overseas are not common or routine – work with me on this).

I’m no expert, but I can point to one of the reasons:

Certification of Need programs – aka CON programs.

If you’re not familiar with CON programs, here’s a little bit of information about them.  In short, they exist to regulate cost and duplication of services in the states which have CON programs. Currently, 36 states have these programs in place.

One of the knocks against them is that they limit competition.  Perhaps a Shouldice-like provider wants to set up shop around the corner from the large, well-known (and politically connected) general hospital.  Those in charge of reviewing requirements and approving/denying decide that the general hospital already provides the service proposed and denies the Shouldice-like entity.

I do recognize that a new general hospital with empty beds will need to fill these beds…and that this will be at a cost…the beds may be filled with people who are not necessarily in need of a hospital stay, but because there is room, the bed will become filled.

As such, CON programs do have their place. And I suppose that CON programs aren’t intended to reduce competition.  In theory the programs are based on the premise that healthcare is not like other consumer goods in our country. Healthcare does not always respond the same to market forces as other industries due to the fact that consumers follow doctors orders (albeit blindly sometimes) and do not shop for “deals”. Therefore healthcare requires certain approvals and regulations like CON programs.

But isn’t all this changing?  Don’t we have more consumer-directed health plans with tools (albeit developing tools) that can give you provider data, both cost and quality?  Aren’t we shifting towards a more transparent system whereby hospitals publish rates for basic procedures?  

In fact, there is a company located in San Francisco whose mission is transparency in healthcare based on cost, quality and convenience.  You can learn more about this company on David E. Williams’ Health Business Blog. With all of this in the works, isn’t my make-believe scenario above looking more and more like reality?

And if these CON programs are supposed to control costs, why are we still experiencing double-digit premium increases?  Why are we still spending more for our healthcare than other countries, but without the higher quality results one might expect?

Maybe the CON job isn’t working. Maybe we need a new map.

Now if you’ll excuse me, I have to hop on a plane to China. I’m having my tonsils removed over there.

Meet Mr. Stick!

Have you ever heard the term “moral hazard”?   It refers to your behavior as it relates to risk. Your exposure to risk, whether high or low, will dictate your behavior to a certain degree. 

For example, you might drive a rental car like you were Al Unser Jr. or Tony Stewart, but would you drive your own car that way?  If something breaks on the rental, perhaps you had the foresight to purchase the insurance in advance. Or perhaps you just hoped you wouldn’t get caught.  In either case, the risk is low.  Not getting caught costs nothing, the insurance is maybe an extra couple of bucks. (I’m reminded of the scene from “Ferris Bueller’s Day Off” when the two parking attendants take Cameron’s car for a joyride around Chicago).

But what about your car?  Would you drive it the same way knowing that if it breaks, it’s your dime? Some would. Some most certainly would not.

Health care has its own form of moral hazard. Any guess as to what it is?

Here’s a hint – there’s a pretty good chance that the last time you had a doctor’s visit you had work done…blood work, x-rays, whatever.  These tests cost money.  And they are not cheap.  But do you care?  Do you tell your doctor to only conduct tests that are absolutely positively necessary and ask that a panel of board certified doctors review the care plan prior to issuing tests or ask that the suggested therapy follow the most up to date evidence based guidelines for your particular health condition? 

I’d be impressed if you did – and definitely surprised. 

If you’re like the rest of us, you might only pay a co-pay – maybe $20…maybe $25. But not a huge financial burden.  Low risk…and therefore you may not care what is done to you…or how much it costs. 

A couple of blogger’s notes: 

1) This example and others below focus mainly on commercial health insurance provided through the employer.

2) There is a degree of trust, albeit blind trust in some cases, that patients put in their physicians.  I’m not saying this is wrong.  Most individuals do not know enough about healthcare, billing, coding, etc. to make informed decisions about health, so we trust our physician to always act with our best interests in mind.  

From a strictly business standpoint, however, there is a flaw with this – most physicians are paid on a fee-for-service basis meaning they get paid for each and every test they provide, whether it’s needed or not needed. I’m not implying that all physicians order unnecessary tests. But how would you feel if your mechanic (another person in whom you might place blind trust) was paid on a fee-for-service basis and told you that your car needed $2000 worth of work when you took your car in for a routine oil change? 

This is another topic for another blog. Back to moral hazard and Mr. Stick…

The moral hazard in health care is that many individuals do not concern themselves with the cost of medical procedures and prescriptions because the risk is low – a small co-pay – despite the fact that the actual costs of the services may be quite high.  (I say many because this example isn’t as applicable to those in high deductible health plans, for example).

There are two reasons for this typically:

First, insured individuals have their health insurance premium removed from their paycheck before it hits their bank account (read: before they can spend it).  Because of this, the perception is not to count this expense the way one would count money coming directly from your actual pocket – an interesting behavioral phenomenon, by the way.

Second, they pay a small cost relative to the actual cost – usually in the form of a co-pay – for their health care services.  As such, the “risk” to you for getting $1000 worth of medical work done is….$20.

If you only have to pay a $20 co-pay, who cares if your doctor orders $1000 worth of tests and procedures, right? 


Without getting into the push and pull between providers and payors (providers get paid for what they order, so they order more…payors don’t want to pay more, so they try to control what is covered and what isn’t) and government’s role in all this, there is a fundamental piece that continues to fly quite far under the radar: 

What responsibility do you have for your own health care?

I would wager that many of us come from the school of “I pay a lot for health insurance, therefore, I’m going to use it when I need it!”  This includes getting it from the “best” hospitals even if it’s for the most routine procedures. (Best is purposely in quotes because without actually cost/quality data, or transparency, how do you measure the “best”? Another issue for another blog perhaps). 

Let me ask you this – would Dr. House want to operate on your appendix?  Unless your faulty appendix is causing you to play Beethoven in your sleep and bleed from your hair follicles, my guess is no. And he’d probably have some snide, sarcastic comment for you if you asked him to do such a thing. (Watching from my couch at home, I’d be laughing at his witty remark).

Back to the point – when we choose to go to the perceived “best” hospitals for routine services…when we choose to go to the ER instead of calling our PCP (health check – do you have a PCP??) or instead of calling the 24-hr nurse lines that many insurance carriers provide today…when we choose to eat lousy, not exercise, smoke, and drink…we’re contributing to the double-digit premium increases. 

Your employer (assuming you have a job that provides health insurance) can only do so much to control healthcare costs.  They can carefully tweak plan designs (raise co-pays, raise deductibles, remove coverage of high cost services…considering they are self funded and aren’t prohibited by federal or state mandates) and offer wellness programs that ask you to complete a health risk assessment and maybe do a biometric screening (blood pressure, blood test, etc).  They may incent you to do this by funding your employer sponsored health reimbursement account (HRA) or by rewarding you with cash or a gift card for completing such activities. 

But they’re not the ones making the decisions about your health.  You are.

Before you stop reading because you’re thinking “Man, this guy is so preachy” let me tell you that I’m a former collegiate sprinter who, after a series of nasty injuries in my late 20s/early 30s and a few life events (two children born 15 months apart), has done next to nothing in the way of regular physical activity for over 2 years.  I’m just so busy. I get to work very early, work all day, then come home to spend time with my wife and play with the little ones before it’s time for their bedtime routine. After that it’s tidy the house and then unwind for an hour or so before I crash for the night.

I also love pizza and ice cream and have been known to tip back a few brewskies after eating a nice steak.

I am as guilty as the next person.

So why am I writing this?  First, I work in the health care/risk/insurance field and I find this stuff incredibly interesting – I suppose it’s a bit of a passion of mine (as cheesy as it sounds). I got into this field to make a difference and the more I read, the more I work, the more I dig into things…the more I see personal accountability entering into the equation. 

Do you agree? Perhaps not. Consider this however…employers have pulled a lot of levers to control healthcare costs with limited results. They’ve used the carrot.  Guess what’s next. 

Meet Mr. Stick!

The stick may come in the form of a premium “surcharge” if you’re a smoker.  The stick may come as even higher co-pays which reduces overall premium (think $300+ for an ER visit). The stick may come in the form of expanded cost sharing, whether as a higher deductible or less employer sponsorship of the insurance plan, meaning you’re picking up the slack. 

Still feel the same way about how you consume healthcare?  If yes, then maybe you’ll get along fine with Mr. Stick. 

I reckon that Mr. Stick has a big brother who has not yet been revealed, however.  And something tells me you might not get along with him as well.

Perhaps this sounds a little dire or dark. But let’s face facts.  Health care costs are out of control and there’s no indication that they’re going to go down or be controlled anytime soon. In addition to healthcare costs accounting for about 17% of the GDP (and rising), we’re also losing ground globally due to our employers footing an increasing healthcare cost burden and inability to compete because of this burden.  This is not something we can afford in a global economy.

I read a fantastic book recently by Gary Fradin called “Understanding Health Insurance”. In the book Fradin puts forth a hypothetical situation whereby the U.S. is so strangled by health costs (in addition to a depression caused by war, for example) that we need to reach out to our neighbors in other countries to borrow from their banks. As a provision of the loan, the foreign entity dictates that we do something drastic to control healthcare costs.  (I’m definitely taking some liberties with Fradin’s example, but I think the general point is coming across).

What would our U.S. Leaders need to do in order to secure the loan?  (Think Mr. Stick’s big brother…)

So what can we do? 

Prevention.  Upwards of 70% of health care costs are a result of lifestyle choices and are avoidable. This is where personal accountability comes in.

I’m no wellness expert, but I’m thinking about doing something simple. 

It is recommended that a person does 30 minutes of activity a day (walking, running, biking, yoga, etc).  Personally, I haven’t done 30 minutes of regular daily exercise in a long while.  Maybe I should start there?  I already take the stairs whenever I can – no elevators or escalators.  I’m thinking about parking farther away in the parking lot to increase my walk into the office. 

It’s little things that can get us on the path of wellness and personal accountability…because you need to start little to achieve big.  And because I don’t want to meet Mr. Stick…or his big brother!

Now if you’ll excuse me, I have to begin training for next year’s Boston Marathon.  Or maybe I’ll just take the stairs instead of the elevator.