On Sunday, January 18, 2014, the New York Times ran another stellar front-page piece by Elisabeth
Rosenthal addressing the fact that, as the title states clearly, Patients’
Costs Skyrocket; Specialists’ Incomes Soar. It continues, with detailed
documentation, her explanation of how providers – in this case doctors, and in
particular the most highly paid subspecialists -- game the system of insurance
reimbursement to maximize their income, and how patients pay the price. She
focuses particularly on dermatologists, whose combination of high income and
low workload makes them the exemplar of what medical students call the “ROAD”,
the specialties of radiology, ophthalmology, anesthesiology, and dermatology,
all of which are known for having high income/work-hours ratios.
Rosenthal addresses
in particular a kind of dermatologic surgery called Mohs surgery, which
commands a high price. Mohs surgery is very good for its ability to identify
margins of a skin cancer and leave less of a scar, but it can be, and often is,
overused at high cost. She cites a particular case of a woman who had a small
basal cell cancer (the kind that almost never metastasizes and is often simply
excised) removed from over her cheekbone and had a bill of over $25,000. “Her bills included $1,833 for the Mohs
surgery, $14,407 for the plastic surgeon, $1,000 for the anesthesiologist, and
$8,774 for the hospital charges.” The plastic surgeon, by the way, was
called in – along with the anesthesiologist – to close the small lesion from
the excision that the dermatologist was unwilling to do.
The cases that Rosenthal documents are typical enough that
they cannot be called “abuses” because
they are the norm; it is, of course, the entire system that is the abuse. It
would be absurd if it were not so real, if it didn’t skew the entire health care
system away from primary care and toward specialties where enormous incomes are
made by billing – and collecting – for each single activity. Rosenthal
describes the RUC, the AMA-convened body that makes “recommendations” to
Medicare about the relative value (and thus payment) for procedures, as well as
for other forms of patient care -- such as listening to you, examining you,
thinking about your problem, making a diagnosis, and recommending treatment --
which are well undervalued compared to procedures. I discussed the RUC, and
what I consider its outrageous behavior, in Changes
in the RUC: None.. How come we let a bunch of self-interested doctors decide
what they get paid?, July 21, 2013, and earlier in Outing
the RUC: Medicare reimbursement and Primary Care, February 2, 2011, but
Rosenthal does an excellent job of describing its perverse incentives. Given
that Medicare takes the RUC’s recommendations 95% of the time, and that most
insurers base their payments on Medicare’s, the RUC, which is heavily stacked
against primary care, essentially sets doctors’ reimbursement. And this is not
to the benefit of patients, either financially or medically.
In another article, Rules
for Equal Coverage by Employers Remain Elusive Under Health Law, buried
much farther inside the paper but also very important, Robert Pear describes
the fact that the Obama administration has chosen to not (yet) enforce rules
which allow companies to offer discriminatory levels of coverage to some
employees than to others; generally, “better” coverage to executives than to
line workers. There is already a ban on such discrimination in companies that
are self-insured, but the Affordable Care Act (ACA) extended this to those who
purchase coverage from insurance companies. The possibilities for
discrimination are illustrated by the things that are forbidden; for example,
covering only executives and not others, paying the full cost of executives’
premiums while making lower-paid workers pay for a portion of their benefits,
or offering different terms for coverage of the dependents of executives and
other workers.
Of course, the companies (read: the executives who run the
companies and stand to benefit from discriminatory practices) disagree. Pear
quotes Kathryn Wilber, from the American Benefits Council “which represents many Fortune 500 companies” as saying “Employers should be permitted to provide
lower-cost coverage to employees who may not be able to afford the
comprehensive coverage being provided to other employee groups,” which, of
course, would not be an issue if the company paid for comprehensive coverage
for all employees. The one “benefit” that may be excluded from the
non-discrimination rules are “certain types of executive physicals”, which is
ironic because there is no data that these benefit most people, including
executives, but rather increase both the cost of care and the risk (in
follow-up tests for false positives) to the patient. Certainly there are some
occupations where the risk of something going wrong is high enough that it
exceeds the risk of harm, changing the harm/benefit ratio -- airplane pilots
for example, or possibly those who drive buses full of school children. But
virtually no corporate executives are in this group.
The reason companies want differential benefits is primarily
to save money by not offering good coverage to the majority of their employees,
and also as a “perk” that they can offer to their executives. It is presented
as parallel to other market goods, the difference between “serviceable” and
“excellent”. This is even carried over in the metaphor to describe the
low-copay plans that the ACA was going to tax, “Cadillac” plans, when everyone
knows that a Chevy is just as good at getting you where you want to go, just
not in such luxurious circumstances. But this is a lousy metaphor for health
care, and confuses two benefits. One, which is the intent of the “Cadillac
policy” tax, is whether individuals have to make co-pays or have co-insurance,
or have limits on their benefits, or not. This is financial, and is very
important. The other, however, is whether some people have coverage that gets
them better health care. This is not
OK. Obviously, they come together at some point since health care that is
unaffordable to a person is unavailable to them, even when it is necessary.
Conversely, for those executive physicals, providing a “benefit” that the individual
does not have to pay for encourages them to seek unnecessary, and sometimes
potentially harmful, care.
It may be that there are certain kinds of “health care” that
are in fact reasonable to treat as elective consumer goods which a company
might offer to some employees and not others; cosmetic surgery is the classic
example (or non-medically-necessary contact lenses or radial keratotomy
[Lasik®]; see Rand
Paul on health policy: small brain and no heart, September 1, 2013). There
also may be some employees for whom the harm/benefit ratio makes certain
services of value when it does not for others (the comprehensive exams,
“physicals”, for pilots, or Pap smears for women but not men). But, overall,
coverage that does not include all
necessary care for everyone is
inappropriate. In addition, coverage of unnecessary care is as well. It is not Cadillacs vs. Chevies, or Volkwagens
vs. Mercedes; it is making sure that everyone is covered for their health care
needs. Like every other OECD country does. Like we could do if everyone was in
Medicare.
Then instead of buying their executives “Cadillac health
plans” to demonstrate how important they are, these companies can just buy them
Cadillacs.
