Out-Of-Network Sneaky Pricing

Seventeen years ago Peter Shenkin had a 4,500 pound live oak tree fall on him while his high school class was camping by the American River near Sacramento. Without the air mattress he was sleeping on and being teased about by his classmates, he would probably have been killed. 

Thank God he wasn't. Instead, he was transported to the nearest officially-designated trauma center, Sutter Roseville Hospital. I'll skip the bad parts of his care – the surgeons kept him waiting for hours before operating and let regularly scheduled operations proceed, they failed to preserve a kidney – and skip straight to the billing. 

Pete was fully insured by Blue Shield, the hospital was a participating provider, but amazingly (if you didn't know how these things work) the trauma surgeons, appointed as such by the hospital, were not Blue Shield preferred providers! That is, they were not “in-network.” Doctors sign up to be “in-network” so that they get more patients and accept a lower fee for doing that, and the insurance demands much less out of pocket payments from the patients. The trauma doctors saw no advantage to themselves by signing up, so they didn't. How a hospital could be in-network, and be a state-designated trauma center and yet allow the doctors to be out-of-network – well, let's just say that state law is sometimes deficient in their protection of the public.

So our insurance paid for the hospital, but we were expected to pay the full (very full) fees of the surgeons above what Blue Shield covered. That's what is now called a “surprise out-of-network billing.” Of course we didn't accept it, and Blue Shield eventually paid it. But law and insurance being what it is, can you believe when Peter got his settlement for the law suit we brought for various malfeasances that led to the accident, Blue Shield claimed tens of thousands of dollars of the settlement for their own payment for medical services rendered? It's just hard to believe. Despicable, really.

That was 17 years ago. You would think that even the slow-moving governmental system would have fixed the problem by now. Nope. It's just gotten worse, since insurance companies have adopted “narrow networks” as their preferred method of keeping costs down, which means offering very low payments to providers and seeing who will sign up at those low levels, and since only a few will sign up, the chance of being out-of network has been magnified. So imaginative of the insurance companies.

Here is what Peter wrote to me about a friend last week:

“(My friend) had apparently reached his annual out-of-pocket maximum according to his health insurance, and Sutter continued providing him care for his ulcerative colitis. Sutter, though, did not inform Mike that the infusion treatments being provided to him were 'Out of Network' and he would be assessed a $399 charge each time. In fact, I am fairly certain that Sutter even went as far as to promise that there would be no charges for the infusions.”

Then just a few days later, Lola and I were up at John Muir School with her old friend Yuval, as much as a 6 ½ year old can have an old friend – they met at the “Nanny Park” in Berkeley as 2 or 3 year olds. Yuval came up with an unusual case of liver cancer, and has been well and successfully treated, thank God. He's now fine, although hearing-impaired from the treatment. Indeed, his father, Justin, said that they had just had their valedictory visit to Lucile Packard Hospital; after this, no more annual visits, just cured. It was a visit that lasted two hours, during which he received an ultrasound exam and a blood drawing for alphafetoprotein, nothing terribly special. Great, all negative.

Then came the bill. The bill. The bill was $12,000 for the visit. $12,000. $6,000 an hour? But, being the forgiving institution it is, Packard cut it down to $8,000. I wonder if they said “Just for you!” And – you've been waiting for this – when the bill came, that was when Justin discovered that Packard was now “out-of-network.” So the family is expected to pay the balance of the bill. Surprise!

He will protest, he's a sophisticated guy, and I'll bet he won't pay. But can you believe it? It's bad enough to raise the price to the patient right in the middle of the process, but adding stealth?

So, what is the basic issue here? To my mind, a big part of the problem here is the confluence of health care and business. Clearly, health care has to think about business economics. The past is horrendous. As my old attending pediatrician Henry Shinefield said, medicine was given an unlimited budget and they exceeded it. Medicine needs to be more mindful.

But mindful how? There is not just one way of being “business-like.” There is the stolid, thoughtful, rigorous costing and pricing and economizing and making efficient activities of any business. The Main Street Ethic. Good! That's what we need.

On the other hand, there is also the Wall Street Ethic. What is the ethic of Wall Street? Lying, cheating, stealing, and charity balls. They have elevated this into “the American way of business,” as though this has always been true, which it hasn't. They have even exported it. Talk about obnoxious. Talk about rationalization. Talk about Trump as the apotheosis, even though he doesn't have their “class.” Or pretensions, better said. Or maybe he does.

The WSE says do whatever you can or whatever you want, greed is good – yup, it's still with us. I won't go on, the reader will have his or her own examples up the wazoo, certainly from the newspapers, possibly directly from one's own life. WSE is exemplified by the generic pricing scandal. If it's not illegal, why not do it, if you will make more money? And maybe it doesn't even have to be legal. Wells Fargo customers are no doubt checking their statements.

The question, then, is which form of business will medicine be adopting? Will trauma surgeons at a trauma hospital be forced to accept preferred provider status, or something similar? Will out-of-network charges be capped and applied to the insurance companies rather than the patients? These are governmental decisions at some level. In California AB-72 is on Governor Jerry Brown's desk. It would limit out-of-network payments to 125% of Medicare, with some other provisions, I guess. It is patient-generated legislation.

It's too bad that this legislation had to be patient-generated. At another level, isn't this something the medical profession itself should be taking on?

Do we want to be stealth pricers? Do we want to countenance prices like $12,000 for two hours of work? Or do we want to voluntarily construct a system that eschews the WSE and adopts the MSE instead, where pricing is both fair and transparent, where efficiency is a goal, where patient service is a goal, where the patient is treated with respect?

If medicine is silent and accepting of how others structure our profession, if medicine does not stand up for righteousness, the business of medicine will contaminate the profession of medicine, and trust and respect will be further eroded. There is no Chinese Wall between business and practicing medicine. The medical profession should be standing up. The medical organizations should be standing up.

They haven't so far. But will they? That's really the basic question.

Budd Shenkin

The Plague of Generic Medicine Pricing, Two

My wife has pernicious anemia. That is a condition where the gut does not absorb vitamin B-12 into the bloodstream, so it needs to be injected into a muscle periodically. This malady was first described in the early 19^th century and was known as Addison's anemia. Mary Todd Lincoln was a famous sufferer of pernicious anemia and eventually died of it. Medical science learned to treat it with liver extract in the 1920's, and the vitamin was specifically identified in 1948. In the 1950's purified vitamin B-12 was available for injection.

For years I have injected 1 cc of vitamin B-12 into my wife's shoulder every 6-12 weeks. Each vial costs about two dollars. What a wonderful gift it has been! What a triumph of medical science! Don't tell me modern medicine isn't great – today, my wife will get a life saving treatment that was unavailable to the wife of the President of the United States about 160 years ago. Today it was time for another injection and we found that it was time to reorder the vials. I called Sharon in the pharmacy and they had it in stock. I will pick it up this afternoon.

But all is not rosy in the world of modern medicine's generic pharmacy section. Sharon called me back. She said that while each vial of this life-saving medicine had formerly cost two dollars, the price had now gone up 600%, to twelve dollars per vial. 600%, ladies and gentlemen, 600%. Sharon asked me if I still wanted it. Well, yeah, it's kind of important to our family, saving lives and all, I'd say. (Gotta admit also, compared to the other generic problems, this is little league. But it's the principle!)

I railed against the American Academy of Pediatrics for not taking a stand on this in a post a few weeks ago: http://buddshenkin.blogspot.com/2016/08/epipen-generics-and-challenge-to-aap.html. Now I say, forget the AAP. Let me say, diplomatically, they are what they are.

Instead, the culprits are (1) the evil pharma industry and the evil Wall Street culture of “if it's not illegal, it's OK,” and (2) the toothless bought-off government. What a world.

If I were a Hillary advisor – what a plague that would be, but if I were – I'd take this up as a cause. She proposed a commission for the Epipen problem and moved on. But I would take it as a case where she could stand up for people against industry and Wall Street. Call for laws for regulation that protected people against the evils of untrammeled capitalism. If I were a Trump advisor – heaven forfend – I would do the same. It's hitting everybody, and the case is so black and white it makes itself. What an opportunity – away from emails, or away from is Obama a citizen.

But, once again, what can one say about this depressing era? O tempora, o mores? As I recall, that speech was given not long before the demise of the Roman Republic. Hoping that's not the case, I remain your faithful correspondent,

Budd Shenkin

New Trump Appointment

President Donald J. Trump today named Harland Dorringer, DC, a chiropractor from Harlingen, Texas, as the Surgeon General of the United States.

Dr. Dorringer stated in his acceptance statement that he welcomed the opportunity to serve his country by redressing the ills brought on by the “current craze for allopathic medicine.”
“This country has been anesthetized by the self-interested magical spell cast by rich doctors,” he stated.

“Look at the millions of dollars we are wasting by all these vaccinations,” he added. “Not only are they expensive, they cause untold numbers of diseases and side-effects. It would be much safer and cost-effective to substitute spinal manipulations for these injections, not to mention less painful.”

Dr. Dorringer also said that the trend toward using electronic medical records was a result of doctors' bad handwriting, which could be better corrected by massage. He also questioned medicine’s poor opinion of tobacco use, stating that the nature of sedentary work required that the lungs needed some stimulation, “so it might as well be tobacco smoke.”

Mr. Trump was asked if he supported these opinions, and responded: “We're certainly going to look into it closely, with the best people. I know that I have benefited greatly from chiropractors in my life, and it was a chiropractor in fact who introduced me to my wife in a special office he ran for VIPs, of which I certainly was one.”

Budd Shenkin

Hillary and the Ron Burgundy Strategy

I certainly hope that Hillary is not playing the prevent defense when she is ahead, which has been known to prevent victory.  It’s important for her to appear restrained, adult, capable, knowledgeable, and safe for the electorate.  She’s not really very maternal, and it’s hard for a woman to be paternal, which usually gets a male candidate pretty far.  So I’m not sure what the image should be.  Capable and sure-handed for sure.  Looking for an image here and not coming up with much.  Maybe it’s because I’m so ambivalent about the whole mother thing.  And maybe football also isn’t the right image.  Maybe tennis.

She’s come a long way.  She doesn’t shout much anymore, although I still hear her as strident in a large forum.  She still can’t bat away problems like the emails very well; I don’t get the impression she would be a very good net player.  So I guess she needs others at the net while she strokes the ball back and back and back, sometimes with a decent angle.

Her problem is control, which she feels she needs.  That’s OK for tennis.  Her problem is warmth, which she doesn’t have much of – too much in control, at least in large groups.  Her problem is that the press can’t wait to get at her when she’s at net, so she stays back because she hates them, and truthfully, I wouldn’t like to face them if I didn’t have a good net game, which she doesn’t.  JFK did, for sure, but he banked on charm and did that all of his life.  He could get away with it.  Her, not so much.  

So what should she do now?  Don’t play defense, don’t overplay offense, stay away from crowds and shouting, appear competent and safe.  I would use some underspin, be a little subtle.  Try the back courts sometimes; no need to be center court all the time.

Play to your strength, which for her probably is the long, low shot from her forehand the other corner’s forehand.  Not showy, just consistent, issues rather than personalities; issues are her forte. She should take a new issue every two weeks.  Choose them carefully, but don’t make them look too easy.  Infrastructure has already appeared; that’s good.  Tie education to infrastructure – the future is our people.  Go into the details, personalize it with people.  Fernando F. is good with his hands, OK at math, isn’t that much of a student.  A match for him is skilled work.  What we need is technical academies where he can learn technical arts – building things, using computers to do so, etc.  We can do this!  Mary G. doesn’t have much money in her background, but she is an excellent student with strength in science.  She needs college to have a few different choices – here’s what the country needs to offer her.  Etc.

I would also play in regional tournaments; every day doesn’t need to be the Open.  I’d take what I call the RON BuRGUNDY STRATEGY.  Every community in the country has its local news anchors, and local weather-people, and local sports people – the local club champions whom everyone knows.  Get out and meet them!  Drop in like Stephen Colbert did in Minnesota, or schedule a session with two or three of them together from the different local stations – but without long preparation, more like popping up.  Dropping in with the locals will humanize her, and won’t tempt her to look like a blowhard.  She could push the issue of the two weeks at these shows, and be prepared to volley well when emails and Libya come up.  These volleys will be easier to handle than at the Open.  They won’t have many follow ups, or if they do she can compliment the questioners and tell them that’s what we need, involvement with the issues at every level – thank you!  The local format would bring out her warmth, I think.  Just calling the local people by their first names without being patronizing would work.  The national shows would pick these up and voilá – free media! 

The Ron’s of the world will bring up the emails.  How should she volley that back?  Hey, Ron, I made a mistake!  I wouldn’t do it that way again – by the way, Ron, have you ever made a mistake?  If you did, I hope you apologized and learned from it, because we all make mistakes, and that’s all we can do, is to make sure we don’t make the same ones again.  So, it’s true, I made a mistake. 

 

But one thing I have learned in my public life is this: consult widely.  I have this policy I’ve been talking about recently, and there will be others.  One of the reasons I’m coming here to Charlotte, and I’ll be going other places, too, is so I can get input on these issues.  If we don’t talk about it, we won’t come up with the best approach.  One thing about the news industry in this country is, it’s independent.  So I’m hoping to get the fullest reach of opinions I can so we can make good public policy.  Ron, I hope that if there’s more discussion about this, you’ll get in touch with me and let me know what everyone’s thinking.  Now, do you want my personal or my campaign email address?  (Joke Ron!)   Or do you want me to come back and we’ll talk again?  Maybe if I’m elected, we’ll have a whole bunch of local newscasters come to an event in DC – waddya think?

Ron might also ask: What do you think about all that negative opinion about you out there?  Doesn’t that make you feel bad, or nervous?  Volley back: Ron, I think everyone likes to be liked, and I’m sorry about those numbers, it kind of hurts my feelings, you know?  But here’s what I’ve learned about that.  In every public job I’ve had – senator and Secretary of State – as I’ve worked at it, the public has always come around to appreciating that I’ve done a good job.  I might not always have pizzazz, but one thing I do have is persistence.  I’ll work at something until we have it right!  I really will.  And in a way, those negative ratings motivate me, kind of like some athletes feed off of being underrated.  I think it gives me extra incentive to work hard and do a good job – and that’s exactly what I intend to do, if I’m lucky enough to get this job I’m applying for.

Those are good answers, I’d think, and tearing up Trump to Ron Burgundy and friends won’t work.  But getting the surrogates out there tearing up Trump – that will work just fine.  Then she can just refer to the others’ anti-Trump speeches and say, I agree with him or her – did you see that speech she made on Thursday?  I thought it was pretty good.

Even a baseline player has to come to net sometime, and the debates will force her to do that, to think on her feet.  But she is steeped in knowledge of the issues, and she’s very smart and a good debater, so I think she’ll do well, especially if she can flash some humor.  If Donald goes after her as “crooked Hillary” or something else very demeaning, I’d just call him on it.  I’d say, look Mr. Trump, when you make that kind of schoolyard personal attack, it just demeans us both.  So I’m not going to respond in turn.  I’ve stood up to bullies in my life since I was 4 years old, and I’m not going to stop now.  So just stop it and grow up and talk about things you believe or you know.  How about that?

Anyway, that’s what I’d do.  That and go back to central Pennsylvania as she did in 2008 and do shots with the guys.  That's always fun in the middle of a tournament.  The great Bill Tilden said, don’t change a winning game.  He also said, it’s fine to go after an opponent’s weakness, but if you really want to destroy him, go after his strength.  When that collapses, he’s totally done.  If she succeeds in getting the moderate Republicans over to her side, maybe she can make the Democrats into that party people have been aching for, one that occupies the great center while the opposition splinters and fights among themselves.  It could happen.  I wonder what she’ll do.

And on the other hand, this might all just be a load of crap.  Maybe she's just as happy hanging out with rich friends, and there's not much else she can do but wait for time to run out and become President with all the honor and glory and power, because that's all there is there.  Who knows?

Budd Shenkin