CD Health Plans Save Time and Dollars

? The Pursuit of Happiness

? MinuteClinics Increase Convenience at Lower Cost

? CD Health Plans Save Time and Dollars

? Young People Cautioned Against Uninsurance

? Consejo Releases Study on HCA Practices

? Class Action Suits in 21 States

? Medical Bankruptcies May be Overstated

Once again I have to apologize for missing a week of the newsletter. I am moving to Hagerstown, Maryland -- closer to Pennsylvania and ever further from the Beltway (thereby retaining my political purity, of course). We have some rental property there and came across an incredible in-town property that needs a lot of work -- HVAC, new wiring, new roof, bathrooms and kitchen -- but has everything you would want in a gracious Victorian home -- the original gas light fixtures, fabulous ten foot windows, leather wainscoting, mahogany doors, three original fireplaces, even a full coal bin. The place was originally owned by a physician and has a collection of old medical books in the basement -- an 1880 edition of Gray's Anatomy, for instance.

So we sold our modern country place in Frederick and moved to Hagerstown. On Friday we closed on both deals, and I was struck by how happy everybody was. The Hagerstown sellers made a decent profit, we made a very good profit, and our buyers were thrilled with their new house with the 20-mile westerly mountain views and the deer and wild turkeys. The buyers and the sellers in each case thanked each other because we each improved our lives (as did the real estate agents and brokers, the title attorneys, the mortgage lenders, the home inspectors, etc. etc. etc.).

That is the miracle of capitalism and private property - a miracle ignored by those who despise capitalism. They really believe that any time one person makes a profit, someone else loses. They think that "fairness" demands that no one ever make a profit, or at least that profits should never be "obscene" ("obscenity" to be defined by a government agency). To them it doesn't matter that everyone in our transaction participated willingly, even eagerly, and that everyone improved their lives for a major net gain of happiness. This conflict of views applies to health care every bit as much as it applies to real estate. For instance, it is the ability to make a profit that inspires pharmaceutical companies to develop new drugs that will save our lives and increase our happiness.

Another example of the profit motive improving health care happiness is the advent of "MinuteClinics" built into Target stores in the Minneapolis area and soon in Baltimore. These clinics are staffed by nurse practitioners and offer a very limited range of services for a fixed fee. An article in the "Baltimore Sun" describes a father and son going in to get strep throat exams. The whole thing took 15 minutes, including time shopping while waiting for his turn for an examination. The father especially valued the time saved by not having to run around to separate physicians for himself and his son, and possibly another trip to a drug store. Complicated or serious problems are referred to physicians, and people with a regular physician or a serious complaint might want to skip the nurse practitioner step. But as a related editorial in the "Sun" points out, many of the users of MinuteClinics have been uninsured people who might otherwise be spending many hours waiting in a hospital emergency room at a cost 400% higher. Greater convenience at lower cost has to be a formula for success.

SOURCE: The original article may be found at: http://www.baltimoresun.com/business/bal-te.bz.clinic08aug08,1,769295.story 

The supporting editorial is at: http://www.baltimoresun.com/news/opinion/bal-ed.clinics16aug16,1,381900.story

CD Health Plans Save Time and Dollars

Policymakers tend to underestimate the importance of convenience when thinking about health care reform, but it is one of the biggest drivers behind consumer choice health plans. The "LA Times" included a major article by Shari Roan that describes the Padula family who are covered by a Definity plan offered by Joe Padula's employer, Textron. The article says, "Joe and Danielle Padula say they were eager for a health plan that put them in charge of their health. While members of an HMO a few years ago, the couple chafed at having to see a primary care doctor to get a referral to see a specialist." Expecting a new baby, they researched their options and chose their own providers. Danielle is quoted as saying, "I don't have time to be running around to these appointments [involved in getting referrals]. To me, time is money." The article says a survey by Hewitt Associates indicates that, "60% of large employers are likely to soon offer the new [HSA] accounts."

SOURCE: http://www.latimes.com/features/health/la-he-insurance16aug16,1,1898522.story

Young People Cautioned Against Uninsurance

A companion article in the "LA Times" cautions young people about going without health insurance coverage. It describes several people -- a substitute teacher, a web page designer, and a self-employed artist -- who have opted to be uninsured and encountered health problems. Interestingly, they all seem to be paying off the bills they incurred and are currently covered by individual policies. The article encourages people who can't afford other programs to consider "catastrophic" coverage or short-term insurance, and to comparison shop on eHealthinsurance.com or Insure.com. It also mentions Georgetown University's Health Policy Institute as a place to go for information on available coverage in all 50 states (http://www.healthinsuranceinfo.net).

SOURCE: http://www.latimes.com/features/health/la-he-insurerisk16aug16,1,329159.story?coll=la-home-health

Consejo Releases Study on HCA Practices

When the uninsured get sick, hospitals often charge them prices that are three to five times higher than what someone in a PPO is charged, according to a new study by KB Forbes and the Consejo de Latinos Unidos. The study, released in June, zeroes in on the HCA hospitals. It says, "A review of empirical evidence? shows that HCA appears to engage in deceptive corporate behavior regarding the uninsured and testimonials that strongly suggest that HCA's new discount plan appears to be a scam." The report is pretty devastating in its particulars.

SOURCE: http://www.consejohelp.org/PDF/enganar.pdf

Class Action Suits in 21 States

But it isn't just the giant for-profit chains that are coming under the gun. A consortium of law firms has filed 40 class action suits against non-profit hospitals in 21 states for failing to "honor their obligation to provide charity care to those who need it." Along with price gouging, the firms accuse these hospitals of pursuing "aggressive and humiliating collection techniques." There is a web site with a wealth of information about these lawsuits.

SOURCE: http://www.nfplitigation.com/NotForProfit/disclaimer.aspx

Medical Bankruptcies May be Overstated

A caution on these suits is in order. Both the Consejo and the law firm web sites assert that high medical bills are the cause of many bankruptcies. Consejo, for instance, states, "Research done at Harvard University shows that half of all bankruptcies are caused by medical debt." It's not surprising the assertions are made, because that is how the popular press has characterized the situation. The "Milwaukee Journal Sentinel," for instance, reported in 2003, "A 2001 Harvard study analyzing bankruptcy found that nearly half of all bankruptcies were the result of medical debt or a medical condition?." But that isn't at all what the original study reports. "Medical Problems and Bankuptcy Filings," by Elizabeth Warren, Teresa Sullivan, and Melissa Jacoby, April, 2000, actually looked at bankruptcy filings that were related to a personal injury or illness (i.e., filers might have not owed any medical bills, but were too sick to work and pay all their other bills), plus people with substantial medical bills who listed some other reason for filing (i.e., they accumulated at least $1,000 in medical bills over a two-year period, but that might not have been a substantial part of their debt). It is impossible to tell how many of these bankruptcies were actually caused by medical debt.

SOURCE: The Journal-Sentinel article is at:

http://www.jsonline.com/bym/news/nov03/181760.asp 

The original manuscript may be found at:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=224581

Please send all comments/questions directly to me at gmscan@aol.com.

"Consumer Choice Matters" is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.