Balancing Act

Imagine you are shopping for a new car. You would love to have the new $50k Lexus SUV, but you don't have that kind of money so you are test driving a $20k Honda Civic. It doesn't have those nice leather seats you like or the V-6 engine like the Lexus you wanted, but that wasn't in your price range so you settle for something more practical. You're about to say "I'll take it" When suddenly, BOOM! Everything goes dark.

You were in a very bad accident while on the test drive. Luckily you had not purchased the car, so you still have your money, but you notice a dull pain in your left leg as you gain awareness. Your doctor is the first person you see when you wake up and he says, "Well hello there! You had quite the accident, I'm afraid. It looks like we have bad news - We are going to have to amputate your leg... The good news is that prosthetic legs are on sale! Here's the menu! Just let your nurse here know which one you want and I'll pop it on for you."

All prices include surgical attachment:

• Amputation only (no prosthetic):         $ 1,000
• Wooden peg:                                       $ 2,500
• PVC Plastic Prosthetic:                        $ 10,000
• Microprocessor C-leg:                         $ 20,000
• Brain controlled prosthetic:                  $ 100,000

You think for a bit and see the bottom one and say "Wow - a brain controlled one? Gosh I guess that wouldn't be too bad - does my insurance cover that?"

"Your what?"

"My insurance... health insurance... you know..."

"Oh, yeah that no longer exists. You've also been in a coma for a few years - I forgot to tell you that part. We realized patients weren't involved enough in their own healthcare decisions, so President Robamney abolished it. You just pay out of pocket for this stuff now. If you act now, you can get 0.9% interest for 5 years on any purchase of $20k or more!" You realize that $100k is a really steep price to pay for that kind of luxury and you simple cannot afford it. You have the $20k available from that car you were about to purchase, so you choose the C-leg prosthetic.

"Excellent choice, sir. You won't regret it."

The Danger of Misconceptions

I was really stoked by all the attention that was brought to healthcare as a result of the Obamacare ruling. I really hoped that people would start to see the problems facing healthcare and work together as a society to address them. Instead, I have seen false analogies, irrelevant arguments, and way too much angry rhetoric. The misconceptions going around are preventing us from discussing the more important issues of how to provide better healthcare at a lower cost.

My plea to you is that you will avoid these arguments and focus on the actual issues at hand. These are primarily republican arguments spreading around right now because they are the ones who are obviously upset. Please know that I'm not trying to bash your political views, I'm just begging you to stop using poor arguments because they are not going to improve healthcare in the country that I love.

Here are the biggest misconceptions that I have seen going around:

1. The argument: "Obamacare is the largest tax hike in US history."

The Problem: No it isn't. According to a Forbes article written by Merrill Matthews, whose self professed goal is to "expose liberal nonsense," (This should be a red flag) Obamacare is the largest tax hike in US history by the following logic:

So he starts off sounding all academic by providing the median U.S. family income of $50,000ish (he even cites his source!) but then provides a really high figure of $20,000 for health insurance without providing any source (red flag). Problems here:

• Median U.S. family income includes all the really poor people who do not purchase health insurance and qualify for Medicaid or other financial assistance. What he should be looking for is the "median U.S. family income for those who will be required to purchase health insurance without financial assistance"
• The Kaiser Foundation did a survey that provides the average insurance amount that individuals pay. They cite the average cost of a family plan to be $15k - with only $4k paid by the employee and the rest paid for by the employer. Since I couldn't find median data this should be compared to the mean household income, which is closer to $68k. 
• In addition to the terrible statistics is some terrible logic. If you are really set on viewing this as a tax then I guess that's fine with me, but don't make it sound like people are going to be paying for their own health insurance AND a tax on top of that! Here is what you are really trying to say: "Your taxes are increasing by the amount you pay out-of-pocket for health insurance, but you will no longer be paying out-of-pocket for your health insurance." 

Here's how it really breaks down according to an article in the Washington Post:

2. The Argument: "Congress is exempt from Obamacare" 

The Problem: No they're not. You can thank Sean Hannity (red flag) for this one. From the actual bill:

"MEMBERS OF CONGRESS IN THE EXCHANGE.—

(i) REQUIREMENT.—Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be

health plans that are—
(I) created under this Act (or an amendment made by this Act); or

(II) offered through an Exchange established under this Act (or an amendment made by this Act). "

Congress will remain under their current health insurance plans until 2014 when they will be required to purchase their own health insurance through a health insurance exchange. The republicans are the ones who added this requirement and that's the end of that. This article explains it in more detail if you're interested. 

Someone posted a picture on Facebook (red flag) of a message written on the side of a van (HUGE red flag)

 It looks impressive! I mean they cited their source and everything - so I decided to look up Page 114 Line 22 which reads: "respect to any eligible small employer, the 2-consecutive-taxable..." and that's it. Looks like the guy who took the time to put this on his van didn't take the time to look up his source.  

3. The Argument: "We do not see any benefits of Obamacare for 4 years"

The Problem: This is both false and out-dated. This came up in 2010 when Obamacare first became a law. True, most of the law's major provisions do not happen until 2014 (4 years from 2010) but that doesn't mean there have been absolutely no benefits of the law up to now. According to a Fox News article (specifically chosen to for its known conservative bias), the law has helped 86 million people get preventative care and 2.5 million seniors get prescription drug discounts in 2011.

4. The Argument: "This is not constitutional"

The Problem: Um, yes it is. Obviously the constitutionality of it was in question beforehand, but as I have said before - the law was deemed constitutional by the process outlined in the constitution. Can we move on from this one yet? Nobody is going to receive better or cheaper healthcare as a result of this argument. The issues around the supreme court's decision making process have their place in public policy discussions but most people aren't talking about it in that context. 

5. The Argument: "It's constitutional, but it isn't right!"

The Problem: Well, this one is fine with me. If that's your opinion, then let it be. However, could you please, please, please propose an alternative plan? If it isn't right then what is? PLEASE - tell me how you want to work on fixing healthcare. I want details. I want a drafted alternative bill. Is that too much to ask? Please persuade me. Not with broad, sweeping statements like "allow freedom and liberty to work their course," but with data and logical arguments that outline a process our country can follow to achieve.

Angry rhetoric like this distances us from the real issues at hand. Our healthcare system is bankrupting our country and what are we doing about it? We are allowing a guy who painted the side of his van with a blatant lie to tell us what to think. Please stop. Please?

Obamacare FAQ's

The Supreme Court ruled in favor of upholding the Patient Protection and Affordable Care Act this morning. I have had a lot of friends ask me for my opinion on the issue. I have been thinking about it all day and how I will end up writing a clean, clear entry on this issue on my blog. I think a Q&A is the best way to approach this one so here we go:

1. "I just woke up this morning and everyone was posting about healthcare and the constitution and stuff... what just happened?"
Back in 2010, President Obama enacted a law called the Patient Protection and Affordable Care Act (PPACA). It came to be known as "ObamaCare" by those who opposed it (primarily members of the Republican party). The people who opposed it fought the law with great zeal. The issue ended up being sent to the Supreme Court, who have the ultimate authority to determine the constitutionality of such laws. Five of the Supreme Court Justices favored it and four opposed it. They made one slight change, but the bulk of the law remains untouched and it was determined to be legal.

2. "Why are my Republican friends freaking out so much?"
President Obama put an interesting rule in to the PPACA that says health insurance companies cannot deny someone coverage just because they have been sick with something before (a "pre-existing condition"). If you develop skin cancer as a teenager, under the old law, it is perfectly legal for an insurance company to deny you coverage because you are too risky of a person to insure. Obama said this isn't cool. The insurance companies, however, need to remain profitable or they won't exist. So Obama also added an individual mandate, which means that every American HAS to have health insurance or they will have to pay a fee.
Republicans are upset because they do not like the government interfering with their lives. They claim that the individual mandate is a violation of their right to choose what is best for themselves. Many use the "slippery slope argument" that the government starts by controlling our healthcare and ends up controlling the books we are allowed to read and the religion we have to follow.
The other reason they are so upset is because this exemplifies attributes of a "wealth redistribution" program. In english, this means that the rich people are going to potentially end up paying more for services so the poor can also have access to them. They claim this is unfair and unconstitutional.

3. "Why are my Democrat friends freaking out so much?"
Because "they told you so all along." People are shouting for joy that this law has passed. Over 30 million individuals are currently uninsured and this makes preventive care a much larger emphasis. This represents significant success to the Obama administration and the democratic goals/agenda, but healthcare will not be "fixed" by this law alone. Sorry to be a buzzkill.

4. Is it constitutional?
Yes. The constitution outlines the process that must occur to determine whether or not that law is constitutional. That process was followed with exactness and the law was determined to be constitutional. Regardless of your personal opinions about the law, it is a matter of fact that the law is now constitutional.

5. So what else does this law do?
A lot of different things. As the title suggests, it is all about patient protection and affordable care. Some of the patient protection items include:

• Preventing the discrimination of health insurance coverage based on medical history
• Prevents insurance companies from dropping your coverage because you are an expensive patient.
• Requiring chain-restaurants to display nutrition facts
• Expands the availability of health insurance
• Providing physician payment penalties/bonuses for meeting certain quality standards

Some of the affordable care items include: 

• Insurance companies cannot increase premiums based on medical history.
• Free preventive services, like mammograms and colonoscopies.
• Limits the amount of profit insurance companies can make to prevent price gouging customers
• Helps Medicare patients (people over 65) pay for their expensive medications

6. "What will happen to the cost of my health insurance?"
This is where it starts to get confusing. Let's just say this: there are some forces that will drive prices up and there are some forces that will drive prices down. It is difficult to know what will really happen and even more difficult to say "by how much?"
Price increase drivers:

• Really sick people who are currently uninsured will join on an insurance program and drive costs up because their care is so expensive.
• Expansion of services insurance is required to cover

Price decrease drivers:

• More healthy people who previously just did not want insurance will join the "risk pool" and not use many healthcare services - providing lower rates
• Increased emphasis on preventive care (regular check-ups) will prevent expensive hospitalizations down the road.  
• Limit of insurance companies profit margins.

7. "Is this all going to happen for sure? If so, when?" 

Mitt Romney has vowed to remove this law from the books if he is chosen as president. So if you don't like all of this stuff I have just mentioned, you probably want to vote for Romney. These rules are being implemented now and will continue through the next few years. A full timeline can be viewed here.

8. "Speaking of Mittens - what's his alternative plan?"

Not a clue. The Romney campaign has not announced one yet. He will likely ride the wave of "Obamacare hatred" for as long as he can. All he needs to do to get in to the white house is convince people that Obama's plan is bad. He has said that he will keep the rule about pre-existing conditions, but not the part where everyone has to have insurance. This is counter-intuitive to me. You cannot have your cake and eat it too, so I am very interested to see more of his plan when(if) it becomes available to learn about.

9. "What do you think?"

I think this is a great opportunity for you to learn about the healthcare laws that impact you as an individual. I think that you should empower yourself with an understanding of the healthcare process and what types of policy are best for you and your fellow citizens. I also think that this act alone will not fix the healthcare crisis and that there will always be a need for improving patient care at a lower cost. 

A Priest, Lawyer, and a Homeless Guy Walk in to a Bar...

"Drinks are on me!" The wealthy lawyer declares. After a few, the priest and the lawyer are debating the constitutionality of the latest healthcare laws. The homeless guy is just there for free beers and starts arguing with both of them. A fight breaks out and all three end up hospitalized. The diagnosis is the exact same for all three - concussion from a bottle to the head. The treatment costs the hospital $900. This includes paying the doctors and staff for their time, supplies, equipment, and building maintenance. Hoping to make some money for a new cancer center, the hospital wants all three to pay $1,000 each for a total profit of $300. So here's what happens:

The Homeless Guy: Obviously, this guy isn't going to pull out a wad of cash and pay his bills. The billing department can't even get a real name out of him. No address, no credit cards, nothing. Fortunately for him, the hospital is legally required to provide a certain amount of "charity care" for patients who lack the ability to pay. So they are now $900 in the hole. The homeless guy walks away and lives happily ever after. Through donations to the hospital and fundraisers, they are able to raise $800 for this patient and bring this down to a $100 loss.

The Priest: This guy makes about $20,000 a year as a small-town preacher. He doesn't have health insurance. If the hospital asks him to pay $1,000 then that is 5% of his total yearly income in one hospital visit! Fortunately for him, the government has set up an insurance program to help him pay these hospital bills. This program is called "Medicaid." So the priest pays $50 to meet his required amount due for access to the services. The hospital sends the remaining $950 bill to the State Medicaid office who then say "we're have done extensive research and the price of your services should be somewhere around $850. We want you to stay profitable, so here's $851." The hospital has now received $901 between the medicaid office and the priest's payment. The priest walks away and vows to never drink again.

The Lawyer: After a few hours in the hospital, he is asked for some basic information about insurance. He is covered through his employer's insurance company and gives them a card with all of the details they need on it. He pays a fee of $50 for the services and the insurance is billed for the remaining $950. They return the bill and say "Nope. Remember? We agreed to send all of our patients to your hospital if you give us a ~ 5% discount. Here's $900." So now they've made $950 off the Lawyer. The Lawyer walks out and says "Man, this hospital bill stuff is confusing... I need a drink."

After trying to understand how this all works, you bang your head against the wall in a moment of frustration. You go to the hospital and receive the exact same $900 of service. Lucky for you, you're a wealthy entrepreneur so you're not worried about the bill because you assume it will be somewhere between $900 and $1,000. You receive your bill in the mail and to your surprise, it is $1,249. Why so high? The hospital is currently at an operating loss of $49 and still needs that $300 for the Cancer center. So you get billed for the extra $349. Clear as mud?

Lessons From Basic Economics...

Let's do some quick economics review. Let's say that you are traveling across the country for a business trip. You go to McDonald's real quick to get breakfast on your way out. You get there and realize the prices have all doubled since the last time you went! You are appalled and drive off to the Chick-Fil-A around the corner and get your breakfast there instead. If this were to happen in real life, McDonalds would likely see a huge decrease in the number of breakfast sandwiches they sell. Seems like common sense, right? You have the ability to choose between various fast food places, so you don't ever really feel threatened by McDonalds jacking up the price. This suggests that the demand curve looks like this:

As McDonalds increases the price of their food by just a few dollars, they will see a pretty significant drop in sales.

After a delayed departure and one layover already underneath your belt, you are stuck in the airport later that night. You realize you are really hungry again so you drag all of your baggage to the food court area. Again, there is a Chick-Fil-A and a McDonalds. You've decided you hate McDonalds now so you go to Chick-Fil-A again (you're now in a different state, nobody knows you already had it for breakfast!) For the same type of meal you had earlier in the day, they want you to pay nearly 3 times as much! There's no difference in sales tax or the availability of meat between the two areas. The price is more expensive at the airport for a great reason... You're stuck there and don't really have many substitutes! Your options are either to buy something expensive or remain really hungry until you arrive at your destination. In other words, the demand curve looks like this:

That is, people aren't going to drastically change their behavior for a change in price of just a few dollars. Can you see that happening? Compare the two graphs and see what happens if you jump in price a few bucks. The quantity consumed barely changes in the airport, but greatly changes in normal real life. If you are a seller, what kind of product do you want to have? You want a product that everyone "has to have" and will pay obscene amounts of money for! (e.g., the iPad) The steeper that curve, the better for the seller. The slope of that curve is dependent upon the consumers ability to substitute. If it was easy to get other sources of food at the airport, it would not be so expensive at the fast-food places.

What does this tell us about healthcare in America? Well, after all of that Chick-Fil-A you are now in the market for some bypass surgery. What other options do you have? None. Your choice is to either go to the doctor and have the surgery, or you can die. Very few people will choose the latter, so what kind of prices do you think you will be paying? "Normal prices" or "Airport prices"? The demand curve for healthcare is essentially this:

What makes this even more difficult is the lack of information about pricing. With fast food, the prices are displayed on the menu right in front for the world to see. If you don't like the price, you can go to another fast food place. It doesn't work that way with bypass surgery. Even if your town has two hospitals, the prices you will actually pay are very difficult to even come close to estimating. What does that do? It removes the highly-praised "market virtue" of competitive pricing. Hospital A is not going to price slash in an attempt to get more marketshare from Hospital B. What does that mean for prices? Well, the hospital essentially has no reason - from the market alone - to reduce the cost of care. I love markets just as much as the next guy, but the normal assumptions made about the behavior of markets simply do not apply here.

What It Is All About

I recently moved to Colorado for an administrative internship with Poudre Valley Health System's medical group (now called Colorado Health Medical Group). I was really looking forward to exploring the rockies and seeing the beauty of this state, but uncontrollable forest fires have plagued this area so far this summer. Currently, the High Park fire has consumed 68,000 acres (275 square km) and destroyed 191 homes. 

A glimpse of the blood red sun 

Hundreds have been evacuated and are staying at a Red Cross shelter near the the local fairgrounds. Dr. Lee Goacher approached me with an idea that came from Rulon Stacey, the system CEO, to provide volunteer physicians and nurses for fire evacuees and volunteers. I jumped at the opportunity. Within 48 hours, we set up a fully-stocked, volunteer-driven mobile health clinic at the evacuation center. Dr. Goacher acting as lead physician coordinator and myself as lead operations manager.

Me with the RV Clinic donated by the Health District.

This is one of the most remarkable projects that I have ever been able to be a part of, and it is a perfect fit to open up this blog. Why? Because this is healthcare at its finest: well-trained physicians, nurses, and EMT's all working together to provide care to the needy. Everyone is volunteering in four-hour shifts. My inbox is full of emails from medical and administrative personnel seeking volunteer opportunities. We are not fussing over insurance, out-of-network providers, payment, competition, or billing issues. Normally, I just go there to help get the medical staff oriented on the supply cupboards and charting, but I stayed a few extra hours today as I interacted with the patients. I loved every minute of it. This is what healthcare is really all about.

Chem 481: Advanced Puzzle-making

This chart should look somewhat familiar to anyone who has taken a biochemistry course. When I first saw a chart similar to this in class, I nearly cried. The complexity of this puzzle was overwhelming. Not only did we have to learn how to piece the chart together again from scratch, we had to know how each step of it all worked. I'm not going to lie, I probably deserved an F but somehow got a B+? I ended up departing from my original plan of a clinical path (not because of biochem) and decided on pursuing an administrative career in healthcare. I now deal with trying to learn this...

I know this is a chart that was intentionally developed to look confusing as some anti-Obama propaganda, but my point stands... Our healthcare system is so complex that we need specialists to understand its different systems. The same way we have "dermatologists" to understand the skin, we have "credentialists" to understand the process of registering a physician with the appropriate insurance agencies. We have "cardiologists" to understand the human heart and "billing specialists" to understand the medical bills that we send to patients. 

My goal is to understand this second chart, its different interactions, the catalysts that drive it, and how to manipulate it to improve outcomes. I hope to be able to explain what I learn at the "introduction to biology" level. That's the purpose of this blog: to explain this mess in plain English.