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“Stay away from Back Surgery”: A Warning from NBA Coach Steve Kerr
Steve Kerr’s comments can be viewed as a warning for self-funded payers and their administrators to educate their members on the shortcomings of some surgeries which are extremely expensive and often unnecessary.  

According to the American Journal of Orthopedics, over a third of Americans reported some musculoskeletal conditions that significantly impaired their normal routines. For many, these issues develop into the perceived need for serious orthopedic procedures and joint replacements, which are among the most profitable surgeries in all of medicine based on the time the surgeries actually take.

It therefore comes as no surprise to discover that, in the last 10 years, the occurrence and associated costs of serious orthopedic procedures have both jumped by 300%. Current projections are that this trend will continue, and (as an example) we may see an additional 400% increase in joint replacements by 2030.

What is the reason for this steady and significant increase in serious orthopedic surgeries and joint replacement procedures?  Regardless of whose opinion you read, you will be told that the reason for more orthopedic procedures is because we are getting older, and we are getting heavier.  This, however, does not fully capture the often-overlooked third factor: consumers are simply being offered greater access to more surgical options.  As an example, adjusted data from the Orthopedic and Arthritis Center for Outcomes Research demonstrates that obesity and the aging population fails to account for the 134% increase in total knee replacements between 1998 and 2007 (overall, a 300% increase).  So how do we account for it?  It is not a stretch to suggest that at least part of the increase in serious orthopedic procedures and joint replacements is attributable to the provider community pushing for these surgical options more often than ever before (as mentioned, these surgeries are huge revenue drivers).

Steve Kerr is a powerful voice that is highlighting the importance of understanding pros/cons of surgery, exploring alternatives, and getting a second medical opinion – preferably from someone without a financial incentive to supporting the surgery in the first place.  


You Are Not Going to Sue Us, Are You?
…is what a nice lady asked me when we were discussing the charges her office submitted for drug addiction treatments. You see, this office billed $3,800.00 per day for inpatient detox, and separately, under a different corporate name (but same billing office), they billed our client for drug screenings at a whopping $4,000.00 per screen – with one screen performed per day.

Our communication with their office (written and sent by one of our attorneys) was stern but professional; we seriously questioned the propriety of those charges and made it clear that our client would not pay for them since they are considered part of the per diem for detox.  

“You are not going to sue us, are you?”  They were worried about a class action.  Think about that.  The provider representative’s guilty conscience was palpable.  We settled the claims at a small percentage above the Medicare equivalent rate, and we closed the account...no lawsuit needed.  Everyone walked away happy.

We are seeing more and more of these types of billing practices sprouting up in sunbelt regions.  

Treating addiction is a serious issue, and I am absolutely not diminishing the need for this type of service. In fact, I am married to a family and marriage therapist, so I understand mental health issues better than most.  That said, it is somewhat ironic that this particular example is of addiction claims, as it would seem that such high billed charges and ridiculous margins are a serious form of corporate addiction within the provider community. Effectively, we have addicts treating addicts.

If you have claims from providers that are “getting high”… let us know. We can help.  


Transparency – It’s Not Just for Ghosts
By: Kelly Dempsey, Esq.

If you’re paying any attention to the news these days, you know that the healthcare industry as a whole has been facing some pretty large issues.  In addition to “repeal and replace,” we’re also faced with the skyrocketing cost of healthcare in the United States.  Both topics are focused on money – either loss of money by insurers who are now threatening to leave the Marketplace or the high costs of new drugs that have hit the market, that have the potential to cripple employer health plans.  While both of these are clearly issues that need attention, let’s look at something other than the turmoil in the Marketplace or shiny new things that are also fueling the fire.  

What about the costs of standard medical procedures?  When your doctor says you need a medical procedure and you actually think to ask “how much will this cost,” do you get a straight answer?  In some cases, you might. Maybe you’ll get a ballpark figure. But most of the time, the response will be wishy-washy because the procedure is unique to you and the providers cannot foresee complications that may change the projected cost.  

You may be thinking, “Ya, ya, ya.  I’ve heard this speech about price transparency before.”  In the past I had the same thought, but then I experienced the radical difference in charges for the same service and my view has been forever shifted.  I received the same procedure two years apart, at two different facilities, in two different states.  It’s been quite a while since these procedures happened, but I still think about it often.  

A few years ago (ok, maybe more than a few, but who’s counting), I had flu-like symptoms and also some sharp-shooting pains on both the left and right side of my abdominal area that I just couldn’t shake with extra rest and sleep.  My mom (a nurse) suggested that my issues may have been related to my gallbladder, so I took some over-the-counter medicine and my symptoms disappeared.  But a week later, I was back to where I started despite still taking the medication.  I reluctantly went to the doctor (in northeast Ohio), who said that there were many possibilities, but that it could be appendicitis.  My doctor told me that the last time she had seen someone with sensitivity to the abdominal region (i.e., sensitive to the touch), she didn’t send them for a CT scan, but the end result was appendicitis and emergency surgery was performed.  I didn’t have the classic symptoms of appendicitis, but a CT scan was ordered just to be sure.  I won’t bore you with the details, but the CT scan showed that it was appendicitis and I had a scheduled surgery to remove my appendix.  Weeks later the bills started rolling in, including a bill for the CT scan…$1,900.  I’d never had a CT scan before, so I had no idea what to expect, but $1,900 clearly wasn’t it (and I think this was after the PPO discount).    

Two years later, I found myself feeling under the weather.  I went to the doctor and an ultrasound was ordered.  Of course my appointment was on a Friday and it was a holiday weekend, so I had to wait to get the ultrasound, but I had a trip to Niagara Falls planned and I wasn’t cancelling it.  Unfortunately before I could have the ultrasound done, I woke up early on a Saturday morning with more sharp-shooting pains, but this time more in my side and back.  Being out of state, I didn’t know where else to go except to the emergency room at the hospital in Niagara Falls, New York.  The doctor who saw me took one look at me and said “kidney stone, but we’ll do a CT scan to confirm.”  A few hours later a kidney stone was my official diagnosis.  I spent six hours in the emergency room before I was discharged.  By this time I was working in the industry and dreaded the bills I knew I would be getting.  To my surprise, the bills weren’t nearly as large as I had anticipated.  Of course there were three: the hospital, the ER doctor, and the interpretation of the radiology report, totaling a little over $3,000.  This wasn’t nearly as high as I anticipated.  The hospital bill was itemized, and as I read through it, I stumbled upon the CT scan charge… “$234.”  I thought to myself, “ummmm, excuse me?  That can’t be the only fee for the CT scan.”  I decided that this couldn’t be accurate and waited for another radiology bill to arrive.  No additional bills ever arrived.  

I’m not a medical professional and I’m sure there were differences in the CT scans (maybe the type of machine, etc.), but how could I be charged $1,900 for a CT scan and two years later be charged $234 for a CT scan?  Considering the second procedure was in New York, and Niagara Falls is twice the population than my tiny suburban city outside of Cleveland, Ohio, I was sure the New York charges would be higher, but they weren’t.  The difference in charges for the same (or very similar procedure) is an issue that has stayed with me.  

In doing more research and looking at the figures, it’s amazing to see the variances in the cost-to-charge ratio (i.e., how much a provider charges compared to how much it actually costs them to do a procedure) from provider to provider.  The ACA’s price transparency provision really never got off the ground and other proposed bills haven’t had much success – it’s also unclear if the current administration is motivated to support price transparency.  As the self-funded industry looks at cost containment measures as a whole, medical tourism is growing in popularity, especially when there are high value providers that are willing to offer services at lower costs and be more transparent with pricing.  Medical tourism and other cost containment methods, as well as consumer education, can help employer health plans contain costs; however, there is a need to look at the bigger picture and strive for more price transparency to help stabilize and support our fragile healthcare industry.