NHS – on life support

By Alex Scott-Samuel
Politics of Health Group POHG Blog, July 17, 2016

I want to give a broad political overview of what’s happening in the NHS in England and of the background to the current situation.

As you’ll know, the English NHS is in a bad way, with practically every part of the country in financial deficit. Many hospitals and many services are being closed down, cut back or rationed. At the same time, many long term contracts for the provision of NHS services are being awarded to private sector companies – though often people are unaware of this because the likes of Virgin, Carillion and SpecSavers are allowed to operate under the NHS logo.

By definition, these arrangements are wasteful, because private companies have a duty to make profits and to give those profits to their shareholders. That means that public money is haemorrhaging out of the NHS – whereas when a public provider of NHS services makes a surplus it is reinvested in the NHS.

There is also a substantial legacy of (mainly Labour initiated) private finance initiative (PFI) funded hospitals, whose exorbitant loan interest payments have to be made before NHS funds can be spent on routine services. And it’s no coincidence that people’s inboxes are filling up with adverts for health insurance, with their invitations to jump the NHS queues. Everything I’ve described forms part of what in my view is an intentional strategy by the Conservative government to create financial, managerial, professional and public chaos throughout the NHS, so that private provision of NHS services, alternative private health services, health insurance, and NHS co-payments and ultimately charges will be seen as inevitable.

This ‘cultural revolution’ takes many different and apparently unrelated forms whose destructive nature is denied by the government – which continues to assert that it has the public interest at heart and that it is factors like the ongoing impact of the credit crash, the increasing costs of drugs and medical equipment, the ageing population and our unhealthy lifestyles which are the true problems facing the NHS. The building blocks for privatisation to which I have referred currently include: the aforementioned awarding of NHS contracts to private bidders – often asset strippers who provide poor quality services, fragment and undermine the cohesive public ethos of the NHS; the creation by the Treasury of NHS deficits and of regulations which forbid them; enforced rationing of services to extend waiting lists and encourage patients to seek private alternatives; manufactured confrontations with doctors and other members of the NHS workforce; the imposition of ‘new models of care’ which undermine NHS hospitals and create community based healthcare structures ripe for privatisation; personal health budgets, designed to link with health insurance. There are many more and I can provide documented evidence for all of them. It is a national scandal.

What is to be done? Until we have a government committed to tackling and reversing this appalling onslaught on our beloved NHS, we must continue to expose what is happening, to challenge it and to campaign loudly and widely in order to increase public awareness and action.

http://www.pohg.org.uk/blog/nhs-on-life-support/

The phased privatization of England’s National Health Service is taking a toll in undermining “the cohesive public ethos of the NHS.” This brief description by Dr. Alex Scott-Samuel will give you a hint of the disaster that is taking place. Their political leaders apparently have learned nothing from the dysfunction that characterizes our system in the U.S., nor are we learning anything from them.

At a time that we need to be converting our fragmented public and private insurance system into a single public program, we are going in the opposite direction. Our public Medicare program is being privatized through similar cognitive processes as are taking place in England.

Just as the Conservative and Labor parties have conspired in these changes, here in the U.S. the Republicans and Democrats, the latter now dominated by the neoliberals, are damaging the traditional Medicare program through neglect while pushing on with fiscal and regulatory policies that have expanded enrollment in the private Medicare Advantage plans. When you read the paragraph above on the “cultural revolution” you cannot help but note the similar ethic of the two nations driving this insane march to rent-seekers nirvana at a cost of compromising patient care.

We can learn something from this, can’t we?

Holy MACRA! Half of docs have never heard of Medicare payment reform

By Dave Barkholz
Modern Healthcare, July 14, 2016

Half of non-pediatric physicians have never heard of the Medicare Access and CHIP Reauthorization Act of 2015—a new CMS payment plan that will put 4% or more of their Medicare reimbursement at risk beginning in 2019, according to a new survey by Deloitte & Touche.

With CMS preparing final rules this autumn, just 21% of self-employed or small-group physicians and 9% of physicians employed by hospitals or larger groups were even somewhat familiar with the pending reimbursement changes, the survey showed.

Physicians with a high share of Medicare payments were just as clueless about MACRA as those with lesser exposures, Deloitte found.

MACRA has two payment tracks. Clinicians in advanced alternative payment models can earn bonuses annually of 5%.

The majority of physicians, though, will participate in the Merit-based Incentive Payment System. On that track, physicians can earn plus or minus 4% of reimbursement in 2019, 5% in 2020, 7% in 2021 and 9% in 2022.

Medicare’s own MACRA projections show the vast majority of physicians in groups of less than 10 suffering penalties.

That includes 87% of solo practitioners who can expect their reimbursement to fall and 70% of physicians in groups of two to nine, Medicare data show.

http://www.modernhealthcare.com/article/20160714/BLOG/160719930/blog-holy-macra-half-of-docs-have-never-heard-of-medicare-payment

Deloitte release:

http://www.prnewswire.com/news-releases/deloitte-survey-finds-low-physician-awareness-and-many-needed-changes-by-physicians-for-medicares-macra-program-300297982.html

Quote of the Day: MACRA and the ethics of physician burnout (4/22/16):

https://pnhp.org/news/2016/april/macra-and-the-ethics-of-physician-burnout

(WARNING: Reading the Table of Contents of the following document has been known to cause acute bouts of depression)

Federal Register: Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models:

https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program-merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm

Physicians celebrated the passage of MACRA because it brought the end to the despised SGR method of making adjustments to Medicare payment rates. The legislation was not simply a repeal of SGR, but it was repeal and replace legislation. Most physicians are not “even somewhat familiar with the pending reimbursement changes.”

Physicians complain about Medicare’s low payment rates, but are they in for a surprise. Most solo and small group physicians will have rate cuts of up to 9 percent under MACRA.

Those interested in more information may want to read the Federal Register entry on MACRA’s MIPS and APM (link above), or maybe not, since it could take you the better part of a week. Just reading the very long Table of Contents may be enough.

In a fairly recent Quote of the Day we described how MACRA will likely compound the current epidemic of physician burnout (link above). It’s depressing.

We can do something about it. We can enact and implement a well designed single payer national health program. For those who think that the current system is better, it is probably time to make an appointment with your mental health professional.

Holy MACRA! Half of docs have never heard of Medicare payment reform

By Dave Barkholz
Modern Healthcare, July 14, 2016

Half of non-pediatric physicians have never heard of the Medicare Access and CHIP Reauthorization Act of 2015—a new CMS payment plan that will put 4% or more of their Medicare reimbursement at risk beginning in 2019, according to a new survey by Deloitte & Touche.

With CMS preparing final rules this autumn, just 21% of self-employed or small-group physicians and 9% of physicians employed by hospitals or larger groups were even somewhat familiar with the pending reimbursement changes, the survey showed.

Physicians with a high share of Medicare payments were just as clueless about MACRA as those with lesser exposures, Deloitte found.

MACRA has two payment tracks. Clinicians in advanced alternative payment models can earn bonuses annually of 5%.

The majority of physicians, though, will participate in the Merit-based Incentive Payment System. On that track, physicians can earn plus or minus 4% of reimbursement in 2019, 5% in 2020, 7% in 2021 and 9% in 2022.

Medicare’s own MACRA projections show the vast majority of physicians in groups of less than 10 suffering penalties.

That includes 87% of solo practitioners who can expect their reimbursement to fall and 70% of physicians in groups of two to nine, Medicare data show.

http://www.modernhealthcare.com/article/20160714/BLOG/160719930/blog-holy-macra-half-of-docs-have-never-heard-of-medicare-payment

Deloitte release:

http://www.prnewswire.com/news-releases/deloitte-survey-finds-low-physician-awareness-and-many-needed-changes-by-physicians-for-medicares-macra-program-300297982.html

Quote of the Day: MACRA and the ethics of physician burnout (4/22/16):

https://www.pnhp.org/news/2016/april/macra-and-the-ethics-of-physician-burnout

(WARNING: Reading the Table of Contents of the following document has been known to cause acute bouts of depression)

Federal Register: Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models:

https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program-merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm

***

Comment:

By Don McCanne, M.D.

Physicians celebrated the passage of MACRA because it brought the end to the despised SGR method of making adjustments to Medicare payment rates. The legislation was not simply a repeal of SGR, but it was repeal and replace legislation. Most physicians are not “even somewhat familiar with the pending reimbursement changes.”

Physicians complain about Medicare’s low payment rates, but are they in for a surprise. Most solo and small group physicians will have rate cuts of up to 9 percent under MACRA.

Those interested in more information may want to read the Federal Register entry on MACRA’s MIPS and APM (link above), or maybe not, since it could take you the better part of a week. Just reading the very long Table of Contents may be enough.

In a fairly recent Quote of the Day we described how MACRA will likely compound the current epidemic of physician burnout (link above). It’s depressing.

We can do something about it. We can enact and implement a well designed single payer national health program. For those who think that the current system is better, it is probably time to make an appointment with your mental health professional.

National Health Expenditure Projections, 2015–25: Economy, Prices, And Aging Expected To Shape Spending And Enrollment

By Sean P. Keehan, John A. Poisal, Gigi A. Cuckler, Andrea M. Sisko, Sheila D. Smith, Andrew J. Madison, Devin A. Stone, Christian J. Wolfe and Joseph M. Lizonitz (all from CMS Office of the Actuary)
Health Affairs, July 13, 2016 (Online before print)

Abstract

Health spending growth in the United States for 2015–25 is projected to average 5.8 percent — 1.3 percentage points faster than growth in the gross domestic product — and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.

National Health Expenditures (NHE) 2016

NHE  $3.3507 trillion
NHE as percent of GDP  18.1%
Government proportion of NHE  46%
NHE per capita  $10,345.5

Conclusion

The health sector is in the midst of a unique period, in which various forces are exerting differential pressures on health spending growth. Economywide and medical-specific price growth have been very low, helping restrain inflation’s impact on health spending, and the Medicare program is experimenting with various alternative payment approaches. Meanwhile, many Americans are gaining access to health coverage for the first time, aging into Medicare, or finding that a greater share of their health expenses needs to be paid out of pocket. And the Medicaid program is evolving: Its population mix is increasingly likely to be covered through private plans.

For the period 2015–25, growth in health spending is projected to average 5.8 percent, influenced in part by an expectation of higher economywide and medical prices. By 2025, as economic, legislative, and demographic influences play out, the health spending share of the economy is projected to reach 20.1 percent, up from 17.5 percent in 2014, and governments are anticipated to sponsor 47 percent of health spending, up from 45 percent in 2014. The percentage of the US population that is uninsured is expected to be 8 percent in 2025, down from about 11 percent in 2014.

http://content.healthaffairs.org/content/early/2016/07/12/hlthaff.2016.0459.abstract

CMS National Health Expenditure Projections 2015-2025:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2015.pdf

***

Comment:

By Don McCanne, M.D.

The Great Recession has contributed to slowing of the growth in health care spending in recent years, but the future changes are predicted to be more closely related to various demographic related coverage changes plus certain payment trends including the increase in cost sharing in private insurance plans. Also the increase in the government contribution to our national health expenditures deserves special mention.

Regarding increases in patient cost sharing, it is no secret that this has been a blunt instrument to control spending, resulting in a decline in use of beneficial health care services. As has been stated repeatedly, we need more patient-friendly methods of slowing the increase in spending such as fairer publicly-administered pricing through a single payer national health program.

The government contribution to our national health expenditures has increased to 46 percent, but that does not include two large components of taxpayer-funded government spending on health care: 1) The government contribution to employee health insurance on the federal, state and local levels, and 2) the massive tax expenditures for employer-sponsored health plans (i.e., the health insurance component of the employee benefit package is not subject to income taxes, reducing revenue for the government which must be made up by other taxpayers).

The irony is that we already pay in taxes devoted to health care alone more than almost every other nation pays in public and private health care spending combined. Without increasing our current level of spending we could pay for a comprehensive, government-financed, single payer national health program. Yet we continue to support our dysfunctional financing system that wastes so much on administrative excesses while perpetuating injustices by misallocating distribution of our health care resources.

We can and must do better.

National Health Expenditure Projections, 2015–25: Economy, Prices, And Aging Expected To Shape Spending And Enrollment

By Sean P. Keehan, John A. Poisal, Gigi A. Cuckler, Andrea M. Sisko, Sheila D. Smith, Andrew J. Madison, Devin A. Stone, Christian J. Wolfe and Joseph M. Lizonitz (all from CMS Office of the Actuary)
Health Affairs, July 13, 2016 (Online before print)

Abstract

Health spending growth in the United States for 2015–25 is projected to average 5.8 percent — 1.3 percentage points faster than growth in the gross domestic product — and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.

National Health Expenditures (NHE) 2016

NHE  $3.3507 trillion
NHE as percent of GDP  18.1%
Government proportion of NHE  46%
NHE per capita  $10,345.5

Conclusion

The health sector is in the midst of a unique period, in which various forces are exerting differential pressures on health spending growth. Economywide and medical-specific price growth have been very low, helping restrain inflation’s impact on health spending, and the Medicare program is experimenting with various alternative payment approaches. Meanwhile, many Americans are gaining access to health coverage for the first time, aging into Medicare, or finding that a greater share of their health expenses needs to be paid out of pocket. And the Medicaid program is evolving: Its population mix is increasingly likely to be covered through private plans.

For the period 2015–25, growth in health spending is projected to average 5.8 percent, influenced in part by an expectation of higher economywide and medical prices. By 2025, as economic, legislative, and demographic influences play out, the health spending share of the economy is projected to reach 20.1 percent, up from 17.5 percent in 2014, and governments are anticipated to sponsor 47 percent of health spending, up from 45 percent in 2014. The percentage of the US population that is uninsured is expected to be 8 percent in 2025, down from about 11 percent in 2014.

http://content.healthaffairs.org/content/early/2016/07/12/hlthaff.2016.0459.abstract

CMS National Health Expenditure Projections 2015-2025:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2015.pdf

The Great Recession has contributed to slowing of the growth in health care spending in recent years, but the future changes are predicted to be more closely related to various demographic related coverage changes plus certain payment trends including the increase in cost sharing in private insurance plans. Also the increase in the government contribution to our national health expenditures deserves special mention.

Regarding increases in patient cost sharing, it is no secret that this has been a blunt instrument to control spending, resulting in a decline in use of beneficial health care services. As has been stated repeatedly, we need more patient-friendly methods of slowing the increase in spending such as fairer publicly-administered pricing through a single payer national health program.

The government contribution to our national health expenditures has increased to 46 percent, but that does not include two large components of taxpayer-funded government spending on health care: 1) The government contribution to employee health insurance on the federal, state and local levels, and 2) the massive tax expenditures for employer-sponsored health plans (i.e., the health insurance component of the employee benefit package is not subject to income taxes, reducing revenue for the government which must be made up by other taxpayers).

The irony is that we already pay in taxes devoted to health care alone more than almost every other nation pays in public and private health care spending combined. Without increasing our current level of spending we could pay for a comprehensive, government-financed, single payer national health program. Yet we continue to support our dysfunctional financing system that wastes so much on administrative excesses while perpetuating injustices by misallocating distribution of our health care resources.

We can and must do better.

By The Times Editorial Board
Los Angeles Times, July 12, 2016

California lawmakers have been trying for more than a decade to protect hospital patients from being hit with huge bills from doctors who aren’t part of their health insurer’s network. They have another opportunity to do so this year, and they should seize it.

The problem arises when patients go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network. A nasty surprise arrives weeks later, when the out-of-network specialists bill them for the portion of their fee that the insurer wouldn’t cover — an amount that can be in the thousands of dollars. According to a survey by the Kaiser Family Foundation, 70% of the patients struggling to pay out-of-network doctors had not known they were going to be treated by someone who didn’t accept their insurance.

Physicians’ trade groups insist that they don’t like surprise medical bills either. The challenge has been figuring out how to create a system that encourages insurers, hospitals and doctors to avoid these situations while still providing a fair payment to the out-of-network physicians who provide treatment.

Congress provided a measure of help in the Affordable Care Act for patients receiving emergency care from out-of-network doctors by requiring insurers to cover the same percentage of the costs as they would have if the doctors had been in network. California law goes further, barring out-of-network doctors who deliver emergency care from billing patients for the amount the insurer doesn’t cover. But that still leaves patients vulnerable for non-emergency care.

Having hospitals and clinics make sure that each patient is treated only by specialists in the patient’s provider network would be one way to end surprise bills, but it would require them to manage doctors more directly than they do today. And there’s no guarantee today that the necessary specialists would be available in a patient’s network.

Assemblyman Rob Bonta (D-Alameda) and a bipartisan group of cosponsors have taken a more pragmatic approach. Their bill, AB 72, would require out-of-network doctors to obtain a patient’s permission at least a day before providing non-emergency treatment at an in-network hospital or clinic. If the patient doesn’t voluntarily agree to be treated by a specific out-of-network doctor and pay the extra charges, he or she couldn’t be billed for more than an in-network provider would have cost — even if out-of-network doctors are brought in. Any participating out-of-network doctor, meanwhile, would have to accept the average amount paid to in-network doctors or go to arbitration with the insurer.

The risk here is that too many of the physicians that don’t want to join insurance networks will simply refuse to see patients who won’t pay their full rate. The bill takes a reasonable approach to the core problem, which is the fact that patients are being hit with huge bills they hadn’t anticipated and had no say in. Lawmakers still have to iron out some details, however, to make sure the system works fairly for everyone. For example, the bill needs to give insurers an incentive to bring into their networks a full complement of specialists at every in-network hospital, rather than counting on out-of-network doctors being willing to treat patients at a discount.

There will always be tension between what insurers want to pay and what providers want to be paid for their services, especially in regions where one or the other faces limited competition. So there will inevitably be fights over how much a provider’s service is worth to an insurer, and vice versa. But there’s no reason patients should be caught by surprise in the middle of that fight.

http://www.latimes.com/opinion/editorials/la-ed-surprise-medical-bills-20160711-snap-story.html

***

Comment:

By Don McCanne, M.D.

There are many injustices inherent in our dysfunctional, fragmented system of financing health care, and surprise medical bills from out-of-network physicians is one of them. Patients who have health insurance should not have to face these bills that otherwise would have been covered by their insurance. So what is the solution?

First we have to understand the problem. Surprise medical bills pop up because the insurer has not contracted with all of the members of the team that provides care for the patient. In-network physicians have their fees set by the contract they have signed with the insurer. Out-of-network physicians have no such contract and thus feel free to set their own fees.

The patient has selected an insurance plan – a contract – which provides coverage for in-network physicians. Some plans may provide partial coverage for out-of-network physicians but usually only at rates that are even lower than in-network physicians would be paid. Because the insurer has no contract with the out-of-network physician, the patient must pay not only the difference between the contracted rate and the lower out-of-network rate but also must pay the entire balance of the full fee charged by the out-of-network physician.

Various legislative solutions have been considered to protect the patient from these charges that most consider to be unfair when the patients have fulfilled their responsibility of obtaining adequate insurance coverage. Some have suggested that the insurers should be required to pay the full fee of the out-of-network physician. But then why would any physician sign a contract with the insurer if by remaining out-of-network they can receive their full list fee instead of the discounted contract fee? That would destroy the concept behind the contracted physician networks and result in intolerable fee inflation.

Most legislative solutions then turn to the physicians to demand that they accept the fee determined by the insurer even though no contract exists with these out-of-network physicians. In this instance, why would the insurer make an effort to be sure that they have a full complement of physicians available so that patients would not be inadvertently provided care by an out-of-network physician. Under such a requirement, if the insurer establishes only a narrow network of physicians then they could limit payments to the level of their contracted rates for all other out-of-network physicians without contracts. This gives private insurers the right to set rates outside of their plans, even if unreasonably low – hardly a free market solution.

So who is to blame? The patient for not selecting a plan that contracts with all physicians that might be needed in the future, even if that is impossible to know? The physician who the insurer has not included in their deliberately restricted networks? The insurer who has created restricted networks to control fees at the cost of limiting coverage for often unavoidable services provided by out-of-network physicians?

By now it should be obvious that the real problem is with the defective design of our dysfunctional health care financing infrastructure. Solutions should be directed at correcting the defects in the infrastructure.

In a single payer system that prohibits private insurance coverage for benefits provided by the public system, essentially all physicians are covered – the equivalent of all physicians being “in-network.” Fees are fair since they are publicly administered, paying enough to support the system and provide fair margins, yet not paying so much that it would be an excessive burden on the taxpayers who finance the system. An ideal single payer system provides first dollar coverage for all essential benefits, thus the patient is not exposed to surprise bills, whether in- or out-of-network, nor to deductibles and coinsurance which can be unaffordable under our current financing system.

Private insurers are providing us services that we do not want: costly, excessive administrative services that serve the insurers rather than the patients, excessive patient cost-sharing that can make health care access unaffordable, and narrow provider networks that take health care choices away from patients. Instead of narrowly confining their considerations to surprise bills, our legislators should get to the root of the problem and eliminate the private insurer intermediaries who are screwing up the system.

It is long past time to enact a just system that works: a single payer national program, aka an improved Medicare for all.

By The Times Editorial Board
Los Angeles Times, July 12, 2016

California lawmakers have been trying for more than a decade to protect hospital patients from being hit with huge bills from doctors who aren’t part of their health insurer’s network. They have another opportunity to do so this year, and they should seize it.

The problem arises when patients go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network. A nasty surprise arrives weeks later, when the out-of-network specialists bill them for the portion of their fee that the insurer wouldn’t cover — an amount that can be in the thousands of dollars. According to a survey by the Kaiser Family Foundation, 70% of the patients struggling to pay out-of-network doctors had not known they were going to be treated by someone who didn’t accept their insurance.

Physicians’ trade groups insist that they don’t like surprise medical bills either. The challenge has been figuring out how to create a system that encourages insurers, hospitals and doctors to avoid these situations while still providing a fair payment to the out-of-network physicians who provide treatment.

Congress provided a measure of help in the Affordable Care Act for patients receiving emergency care from out-of-network doctors by requiring insurers to cover the same percentage of the costs as they would have if the doctors had been in network. California law goes further, barring out-of-network doctors who deliver emergency care from billing patients for the amount the insurer doesn’t cover. But that still leaves patients vulnerable for non-emergency care.

Having hospitals and clinics make sure that each patient is treated only by specialists in the patient’s provider network would be one way to end surprise bills, but it would require them to manage doctors more directly than they do today. And there’s no guarantee today that the necessary specialists would be available in a patient’s network.

Assemblyman Rob Bonta (D-Alameda) and a bipartisan group of cosponsors have taken a more pragmatic approach. Their bill, AB 72, would require out-of-network doctors to obtain a patient’s permission at least a day before providing non-emergency treatment at an in-network hospital or clinic. If the patient doesn’t voluntarily agree to be treated by a specific out-of-network doctor and pay the extra charges, he or she couldn’t be billed for more than an in-network provider would have cost — even if out-of-network doctors are brought in. Any participating out-of-network doctor, meanwhile, would have to accept the average amount paid to in-network doctors or go to arbitration with the insurer.

The risk here is that too many of the physicians that don’t want to join insurance networks will simply refuse to see patients who won’t pay their full rate. The bill takes a reasonable approach to the core problem, which is the fact that patients are being hit with huge bills they hadn’t anticipated and had no say in. Lawmakers still have to iron out some details, however, to make sure the system works fairly for everyone. For example, the bill needs to give insurers an incentive to bring into their networks a full complement of specialists at every in-network hospital, rather than counting on out-of-network doctors being willing to treat patients at a discount.

There will always be tension between what insurers want to pay and what providers want to be paid for their services, especially in regions where one or the other faces limited competition. So there will inevitably be fights over how much a provider’s service is worth to an insurer, and vice versa. But there’s no reason patients should be caught by surprise in the middle of that fight.

http://www.latimes.com/opinion/editorials/la-ed-surprise-medical-bills-20160711-snap-story.html

There are many injustices inherent in our dysfunctional, fragmented system of financing health care, and surprise medical bills from out-of-network physicians is one of them. Patients who have health insurance should not have to face these bills that otherwise would have been covered by their insurance. So what is the solution?

First we have to understand the problem. Surprise medical bills pop up because the insurer has not contracted with all of the members of the team that provides care for the patient. In-network physicians have their fees set by the contract they have signed with the insurer. Out-of-network physicians have no such contract and thus feel free to set their own fees.

The patient has selected an insurance plan – a contract – which provides coverage for in-network physicians. Some plans may provide partial coverage for out-of-network physicians but usually only at rates that are even lower than in-network physicians would be paid. Because the insurer has no contract with the out-of-network physician, the patient must pay not only the difference between the contracted rate and the lower out-of-network rate but also must pay the entire balance of the full fee charged by the out-of-network physician.

Various legislative solutions have been considered to protect the patient from these charges that most consider to be unfair when the patients have fulfilled their responsibility of obtaining adequate insurance coverage. Some have suggested that the insurers should be required to pay the full fee of the out-of-network physician. But then why would any physician sign a contract with the insurer if by remaining out-of-network they can receive their full list fee instead of the discounted contract fee? That would destroy the concept behind the contracted physician networks and result in intolerable fee inflation.

Most legislative solutions then turn to the physicians to demand that they accept the fee determined by the insurer even though no contract exists with these out-of-network physicians. In this instance, why would the insurer make an effort to be sure that they have a full complement of physicians available so that patients would not be inadvertently provided care by an out-of-network physician. Under such a requirement, if the insurer establishes only a narrow network of physicians then they could limit payments to the level of their contracted rates for all other out-of-network physicians without contracts. This gives private insurers the right to set rates outside of their plans, even if unreasonably low – hardly a free market solution.

So who is to blame? The patient for not selecting a plan that contracts with all physicians that might be needed in the future, even if that is impossible to know? The physician who the insurer has not included in their deliberately restricted networks? The insurer who has created restricted networks to control fees at the cost of limiting coverage for often unavoidable services provided by out-of-network physicians?

By now it should be obvious that the real problem is with the defective design of our dysfunctional health care financing infrastructure. Solutions should be directed at correcting the defects in the infrastructure.

In a single payer system that prohibits private insurance coverage for benefits provided by the public system, essentially all physicians are covered – the equivalent of all physicians being “in-network.” Fees are fair since they are publicly administered, paying enough to support the system and provide fair margins, yet not paying so much that it would be an excessive burden on the taxpayers who finance the system. An ideal single payer system provides first dollar coverage for all essential benefits, thus the patient is not exposed to surprise bills, whether in- or out-of-network, nor to deductibles and coinsurance which can be unaffordable under our current financing system.

Private insurers are providing us services that we do not want: costly, excessive administrative services that serve the insurers rather than the patients, excessive patient cost-sharing that can make health care access unaffordable, and narrow provider networks that take health care choices away from patients. Instead of narrowly confining their considerations to surprise bills, our legislators should get to the root of the problem and eliminate the private insurer intermediaries who are screwing up the system.

It is long past time to enact a just system that works: a single payer national program, aka an improved Medicare for all.