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The Bills People Struggle to Pay

I post pretty regularly on out-of-pocket medical expenses, a topic I’ve been conducting research on, and one that will fit centrally into the new book I’m writing. Most often when people think about paying for medical care, they think about medications. But as this figure from the Kaiser Family Foundation shows, don’t forget about the cost of doctor visits, x-rays, blood tests and, of course, trips to the emergency room:

Photo Credit: Kaiser Family Foundation

Photo Credit: Kaiser Family Foundation


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Inflation Crawls While Deductibles Sprint Ahead

With increasing frequency, Americans are purchasing health insurance plans that require high out-of-pocket costs. Chief among those costs are deductibles, the amount of money a person or family must spend out-of-pocket on medical care in a year before their health insurance “kicks in.” As this figure illustrates, from the Kaiser Family Foundation, deductibles have been rising much more quickly than overall inflation, than incomes, and than the cost of their health insurance premiums.

Inflation Crawls While Deductibles Sprint AheadBecause of these high deductibles, January and February have become months where many people, when faced with illness, are also faced with burdensome healthcare bills.


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In Medical Market, Shoppers Lack Savvy

Obamacare Going in a Death SpiralEven before Obamacare became the law of the land, the U.S. health care system was undergoing a dramatic transformation. Millions of people were shifting from generous health insurance plans to consumer-directed ones that pair low monthly premiums with high out-of-pocket costs.

This shift has been encouraged by employers, eager to reduce the cost of employee benefits. It has also been encouraged by market enthusiasts who contend that the U.S. health care system needs to be more like the traditional consumer economy.

In theory, a family with a high deductible plan – on the hook for, say, the first $5,000 of health care expenses each year – will scrutinize the cost and quality of health care alternatives before deciding whether to receive them. In practice, health care consumerism doesn’t always play out at the bedside in ways that promote savvy medical decisions.

That was one of the conclusions my colleagues and I drew after studying more than 2,000 medical appointments – typewritten, verbatim transcripts of doctors and patients interacting in outpatient clinics across the country. The results, which appear in a study released this week by Health Affairs, should raise a cautionary flag about venturing further into the tricky terrain of health care consumerism.Consider one of the breast cancer patients in our study who was still being evaluated to determine the extent of her tumor. Because she had no strong family history of the disease, the doctor cautioned that her insurance company might not agree to pay for the expensive genetic testing. “How much does it cost if I have to pay for it?,” the patient asked. “Oh we don’t want to talk about that,” the doctor replied, thereby putting an end to her attempt to become an informed consumer.

Or consider the patient who mentioned she “cannot take my pills because there is now a co-pay.” When she explained that she had “zero income,” the physician replied, “That’s what happens, yeah,” without addressing her inability to pay for the medications.

Health care consumers – aka “patients” – cannot expect to make savvy financial decisions if their doctors don’t engage with them in productive conversations about the pros and cons of their health care alternatives, including the financial costs. Some physicians say they are reluctant to do so because money talk would contaminate the doctor-patient relationship. Many more physicians, I expect, would like to hold such conversations, but struggle to do so because there’s no easy way to figure out how much patients will be required to pay out-of-pocket for their medical care.

The U.S. health care system is mind-numbingly complex. Some patients have private insurance, others have Medicare or Medicaid. Some with private insurance face high deductibles, others low. Some Medicare patients purchase supplemental insurance, others don’t. To make matters even more complicated, each of these payers has different rules for deciding what services to cover, and how generously to cover them.

In fact, frustration with our system often distracts physicians from dealing with patients’ financial concerns. For example, after one patient in our study complained about the cost of a bone drug, the doctor acknowledged the price was “crazy” and then went on a rant: “What usually happens is the hospital or clinic will charge 300 times what they think they can get and the insurance company pays 1/20th of the original. It’d be like going to your car mechanic and them saying, ‘It’s going to be $17,000 to get this fixed,’ and you say,’ Well, how about $149?’ ” He went on to complain about the high salary of an insurance company CEO, and never returned to the patient’s difficulty paying for her medication.

There are steps we can take to improve this. Medical schools should teach students how to navigate the new world of health care consumerism. We also need to make it easier for patients and physicians to discern the cost of medical care by having more states pass legislation like Massachusetts and North Carolina that requires providers to publish health care prices. These are promising developments.

But we should not delude ourselves into thinking that price information alone will transform patients – frequently overwhelmed by their health care conditions – into super shoppers. Until health care consumerism can function in a manner that begins to achieve its promise, we should be cautious about pushing more people into health insurance plans that force them into a consumer role that they and their physicians are not yet ready to embrace.

Read more here:

***This op-ed was previously posted in The News & Observer***


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Marketplace Coverage of Our Recent Study

Photo Credit: Marketplace

Photo Credit: Marketplace

One of my favorite radio shows, Marketplace, did a story on our recent study, in which we showed that physicians sometimes miss out on opportunities to help patients lower their out-of-pocket expenses. The piece features a medical student who’s been working with me on this project, Wynn Hunter, who is making his first national public radio appearance!

More and more of us are paying bigger chunks of our health care costs. So what role should our doctor play as we navigate this new economic reality?

According to a new report in Health Affairs, doctors are rolling up their white sleeves and getting into the nitty-gritty more than they used to.

The question, of course, is whether those conversations are effective.

To answer that, a research team at Duke analyzed 3,000 transcripts of patient-doctor visits. The authors found that somewhere between 25 to 40 percent of the time, money comes up during appointments.

To those who believe in more transparency, the thinking is that this will arm patients with the information they need to make an informed choice.

“We have specialized knowledge. And we need to be able to help our patients navigate this,” said Dr. Chris Moriates from the University of California, San Francisco.

But some argue money issues can confuse patients, prompting them to make decisions based on their pocketbook, not their health.

Money can make physician-patient encounters tricky.“The physician should only be looking out for the health interest of the patient and that’s what the sanctity of the exam room is about,” said Harvard economist David Cutler. 

That said, Cutler believes expecting more from clinicians could improve health.


To read/listen to the rest of this story, please visit Marketplace.

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Out of a Horrible Situation, Some Great Writing

Photo Credit: Rolling Stone Magazine

Photo Credit: Rolling Stone Magazine

Every once in a while, I like to highlight outstanding writing in my blog. I guess that makes up for the writing otherwise expose you to – namely, my own.

As I expect most of you know, there’s been a horrible situation in Flint, Michigan recently, with government negligence leading to lead poisoning in the city, despite huge protestations from the public. Well Rolling Stone Magazine recently published an excellent article on the topic, by Stephen Rodrick. Early in the piece, he describes what it was like growing up in Flint, when he used to walk along the shores of the Flint River. I will let him take it from here:

Every day, my anti-nature walks brought new treasures: a dog carcass; the front grille of a K-car; and long, green bubbles of water that appeared to be living, malevolent, aquatic creatures with free will. Whenever I stuck my hand into the water to retrieve an abandoned tire or a shard of chain-link fence, my skin would come out a mottled crimson.

Awful, and brilliant, stuff!


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Missed Opportunities to Help Lower Patient Out-of-Pocket Expenses

Here is a Kaiser Health News/NPR story on our research on healthcare cost conversations in doctor’s offices.

Talking about money is never easy. But when doctors are reluctant to talk about medical costs, patients’ health can be undermined.

A study published Monday in the journal Health Affairs explores the opportunities that are often missed in the exam room.

Patients are increasingly responsible for more of their own health costs. In theory, financial incentives are supposed to make them sharper consumers and empower them to trim unnecessary health spending. But previous work has shown it often leads them to skimp on both valuable preventive care and superfluous testing.

Doctors could play a role in helping patients find appropriate and affordable care by talking with them about out-of-pocket costs.

But, a range of physician behaviors currently stand in the way, according to the study. “We need to prepare physicians to hold more productive conversations about health care expenses with their patients,” said Peter Ubel, a physician and behavioral scientist at Duke University.

The researchers analyzed transcripts of almost 2,000 physician-patient conversations regarding breast cancer, rheumatoid arthritis and depression treatment. They identified instances in which patients suggested the cost of care might be difficult for them to bear and assessed how doctors responded.

Overall, researchers noted two ways in which doctors dismissed patients’ financial concerns. They either didn’t acknowledge them or only addressed them halfway.

For instance, if a patient commented on how expensive a drug was, the doctor might ignore the comment entirely, or might suggest a temporary solution – like a free trial – without exploring long-term strategies to address the issue.

Without a long-term plan, patients may eventually stop taking the medication, or take it irregularly. Either way, a patient would get less benefit from treatment and could getter sicker, perhaps even winding up in the hospital.

The study doesn’t measure how often doctors dismissed patient concerns – because, the researchers wrote, they didn’t know how often those dismissals led to people actually forgoing needed treatments.

Still, Ubel said, it’s clear doctors aren’t talking to patients about these expenses. He pointed to a separate analysis of those same conversations, which found that doctors discussed medical costs with patients about 30 percent of the time. And only in a minority of those discussions did doctors and patients brainstorm about ways to make medication more affordable.

“A majority of [physicians] – they don’t talk about costs,” he said. “When they do talk about it, they don’t talk about it productively.”

Why do physicians hesitate? For one thing, they aren’t used to discussing cost barriers, and many think it’s inappropriate to bring up money at all, Ubel said. When he lectures on the subject, he always encounters people who worry that discussing finances will “contaminate the doctor-patient relationship.”

Plus, doctors haven’t been taught to listen for patients’ pocketbook concerns. If a patient comes in with heartburn and indigestion, a good internist will start probing for signs of coronary disease, Ubel said. By contrast, physicians aren’t primed to pick up on cues that patients may face financial strains.

“If we had that on our list to be aware of, we’d pick up the cues. If we don’t, it’ll be right in front of our eyes, and we’ll miss it,” he added.

The idea of patients acting as consumers – weighing cost and shopping for the best health care deal – is still relatively new, the study notes. As it becomes more commonplace, patients may push doctors for more help in making cost-based decisions, Ubel said.

To read the rest of this story, please visit NPR.

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So Few People, so Much Healthcare Spending

Take 100 Americans who have used medical care this year, find the one who has receive the most medical care, and you have probably accounted for a fifth of all healthcare spending in that group. One person, 20% of spending – that is how skewed healthcare consumption is in this country. Here’s a picture, which Martin Gaynor circulated a while back, showing the concentration of healthcare spending:

So Few People So Much HC Spending

This concentration of spending raises serious questions about proposals to curb healthcare expenditures by turning healthcare into more of a consumer market. The idea is that savvy consumers, when faced with part of the cost of their care, will be stingier about using medical resources. With so few people spending so much money, all of whom will have met out-of-pocket maximums, it doesn’t look like healthcare consumerism is going to be the cure-all for our spending ills.

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Where Your Paycheck Is Going

If you are wondering why your hourly wage or your salary aren’t rising as quickly as you like, or why your bank account at the end of the year hasn’t grown as much as you intended, don’t forget to take into account just how much more you are probably paying out-of-pocket for the medical care you receive each year. Here’s a picture from the Kaiser Family Foundation, showing that deductibles are rising much faster than insurance premiums and, sadly, than our wages:

Kaiser Family Foundation

Kaiser Family Foundation

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Preparing Business Students for Jobs in Healthcare

Here is the beginning of my recent interview in Delta Sky Magazine where I discuss preparing business school students for future work in the healthcare industry.

As a physician, how does your medical background shape the way you teach your business students?

I’m an academic physician, so I’ve practiced medicine and have done research on health care for a long time. The very real world I’ve worked in informs my teaching because I want to see what happens in practice. We have a lot of students at Fuqua who are interested in working somewhere in the health care sector: pharmaceutical companies, device manufacturers and hospitals. I try to teach them about health policy that’s relevant to their jobs, because if you don’t know what’s going to happen with Obamacare, you don’t know how that will affect your bottom line. That’s a big focus of mine, trying to take the big-picture ideas in health care and bring them right down to the bedside.

To read the rest of this article, please either visit Delta Sky Magazine or the PDF file Top Profs Talk Business Education

Posted in Health Policy

Reducing Healthcare Waste: Don’t Expect Patients To Take The Lead

Lena Wright’s best friend was hunched over like a character from a French novel, with spinal bones so thin they would fracture with a fit of sneezing. Determined to avoid that fate, Wright (a pseudonym) asked her primary care doctor to test her for osteoporosis with a DEXA scan, also known as Dual Energy X-ray Absorption. The scan would send two X-ray beams through her bones, one high energy and the other low. The difference in how much energy passes through her bones would somehow (the wonders of physics!) allow her doctors to calculate the thickness of her skeleton.

If you need to figure out whether you have osteoporosis, a DEXA scan is a good idea. But if you don’t need such a scan, you end up exposing yourself to harmful radiation and, of course, to an unnecessary healthcare expense. According to the American Academy of Family Physicians, most people do not need the test, because they do not have risk factors for osteoporosis. Lena Wright, for example, harbored no family history of osteoporosis, had exercised regularly her whole life, didn’t smoke or drink and, very importantly, had received the test five years earlier at age 65, which showed her to have normal bone density at the time. In the best judgement of medical experts, a DEXA scan would bring Wright more harm than benefit.

But she was worried. So her doctor, to ease her anxieties, ordered another scan.

What, if anything, can we do to reduce unnecessary and potentially harmful medical testing?

We can start by trying to reduce patient demand for such services. That is an approach taken by the Choosing Wisely campaign, a voluntary effort by medical professionals to reduce wasteful medical care. As part of this effort, professional societies like the American Academy of Family Physicians put together “top 5” lists of wasteful services. Then, in partnership with organizations like Consumer Reports, they’ve tried to educate the general public about why they should be happy to avoid such services.

I am a huge fan of educating the general public and think that Consumer Reports does as fine a job at this as anyone in the business. But I also recognize that their reach – their ability to get the word out to the masses – is limited. (To read the rest of this article, please visit Forbes.)


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