Fee-for-service quick and dirty

In my holiday fervor, I forgot some key points. Doing a quick lit search brought up this lovely paper from 2008 “Health care reimbursement: Clemens to Clinton” by John T. Preskitt, MD. (John you and I should just settle down and raise a family we are perfect for each other). The answer to my stutter about when fee-for-service originated? It evolved along with Medicare, and was recognizable by the late 1950s. Managed care brought it into full flower.

One more point to be made. A crucial drawback of fee-for-service: profiting from mistakes. If you are thoughtlessly administered a drug you are allergic to–and now you’re needing all the care someone in anaphylaxis gets–you and your insurance will be billed for the privilege. Mistakes happen. Medicine is human. But failure should not be rewarded with money.

Pull quote from Preskitt’s article, which I am nicknaming “Ghosts of insurance past”

Managed care was supposed to create a system that would contain costs while simultaneously increasing the quality of care. Our traditional fee-for-service medicine had led to health care inflation because it encouraged caregivers to maximize the number of procedures they perform, ignoring preventive care. Doctors and hospitals were not paid to keep patients well; they were paid to treat them when they were sick.

Why out-of-control costs matter

Complexity. From how you get insurance (THREE MORE DAYS FOR MARKETPLACE PLANS) to who the emergency department treats to the non-communicating EMRs that create a chorus of fax tones ringing out across this great nation of over-paying under-served… well it ends like this: envelopes.

Cramming up your mailbox. Every medical service, every brick and mortar facility, every radiologist in his/her darkened bedroom reading films in memory foam slippers, is going to send to a separate bill. And this is why you still have a checkbook. Because even within the same organization, let’s say a fictional system called ANOVA that I visit for one scan, get 3 bills (physicians group, facility, and radiologist), then I go again in 3 months for the exact same thing. None of my six account numbers will be the same. Cram that in your electronic bill pay.

Here, loves, are my preventative health costs since October. Cancer screenings, with no expensive imaging like CT/MRI. Just doc visits, PAP pathology, and a radiology bill for who knows what that is? $12? I’m leaving out my $400 surprise colposcopy. But, VACCINE PLUG: get your son/daughter an HPV vaccine and the his girl/she may never know the surprise cervical pinch of colposcopy. It is a terrible thing to surprise a woman with. (I was too old, to not a virgin at 26 when vaccines became available).

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Don’t feel bad for me. Maybe set me up one of those gofundmesoIcanaffordfollowupcancersurveillanceandhaveayearlypapsinceI’msexuallyactive. Not a big draw on that?

Alright then. Just pay attention as policy, which people seem to be more averse to than illness itself, is being made. Taxes (for a few) may be losing their place on that short list of inevitability, but mortality my loves, endures.

CVS-AETNA merger (I told you so, mom)

The things going on in corporate health care these days. Woo! It’s like my own personal Boiler Room. Our care system is at the point in its spring cleaning when all drawers have been dumped on the floor to sort out the junk for donation, the cleaning products are strewn about, and there’s a half-built really expensive organization system that refuses to fit together. Here come the tears because HOW IS IT EVER GOING TO GET BETTER!

I get the pleasure of interviewing corporate executives, medical directors, and patients all doing the work of trying to straighten this place up — it gives me a great deal of faith that it will in fact, get better. It is going to be messy.

Today’s Upshot by Austin Frakt gives a superb sum-up of the why and what for of Sunday’s $69 billion merger. Two pull quotes below. Dust off your macroeconomics text books, it’s vertical integration in the land of the free (who pay an average of $10,000 a year on health needs). Consolidate. Cut middle men. And as always, gather ye customer base while ye may.

The CVS-Aetna deal would be just another of the many recent mergers across business lines in health care. Insurers are buying or partnering with health care providers. Health systems are offering insurance. Hospitals are employing physicians. Even Amazon is jumping into the pharmacy business in some states. This may be part of the motivation for CVS to buy Aetna — defensive jockeying to maintain access to a large customer base that might otherwise begin to fill drug prescriptions online.

One source of optimism: Research shows that coordinating pharmacy and health benefits has value because it removes perverse incentives that arise when drug and nondrug benefits are split across organizations. When pharmacy benefits are managed by a company that’s not on the hook for the cost of other care, like hospitalization, it doesn’t have as strong an incentive for increasing access to drugs that reduce other types of health care use. That could end up costing more over all.

As a postscript, I know the first thing that comes to mind when seeing “billion dollar merger” is monopoly. We hate those. With intact heavy regulation, however, monopoly is not at the top of my nightmare list for the health care industry. What is? Corporation as person, with all the legal rights of, and free from the deterring power of class action legal suits. That keeps me up.