by George Chapman, GW Chapman Consulting

Medicare fraud. We are losing more than $60 billion annually to Medicare fraud. While the Affordable Care Act has greatly expanded resources to prevent and detect fraud among providers, it is still difficult to completely stop it. First, Medicare is huge. It is by far the largest healthcare insurer/payer in the country. It receives over  4.5 million claims daily and pays out over $1 billion to providers daily. Second, Medicare is more “open” (trusting) than commercial insurers. Once an applicant provider meets all the basic requirements, Medicare is obligated to begin processing the claims and paying. Medicare does not physically confirm the existence of all new providers be they a home health agency, medical group, pharmacy or durable medical equipment supplier.  In addition to the cost, fraud makes it more difficult for Medicare to make policy or health decisions because a lot of the claims upon which decisions are made are fake/tainted, distorting claims data. How much damage can just one doctor do? In 2012, Dallas physician Jacques Roy, bilked Medicare for $375 million through a phony home care company. It is still the largest home care fraud case in the history of Medicare.  Most get caught because they get greedy. Roy “enlisted” more than 11,000 beneficiaries to receive home care thru his phony company. This number was, by far, the most enrollees by a single physician in the country. Fraud auditors were immediately suspicious as this came up on their radar. Dr. Roy is serving a life term in prison, but most of the $375 million he stole is gone.

Fee for service being phased out. It has long been argued that fee for service or volume payments to physicians and hospitals has produced the wrong incentives and the highest costs in the world. In a FFS environment, there is no incentive to not provide unnecessary care or to focus on long term outcomes or to coordinate care with other providers. Expert believe the sooner FFS is gone, the better for all.  Recently, 52% of the members of the New England Journal of Medicine Catalyst’s Insights Council agreed that FFS reimbursements must go and it stands in the way of providing value based and outcome oriented care. The switch to value based reimbursement will not only change how physicians practice. Consumers will be increasingly expected to hold up their end of the bargain by eating healthy, exercising and following physician orders.  

Primary care physician salaries up.  Although most specialists still earn more, compensation for primary care physicians is improving. According to a reliable and respected national survey of medical practices, primary care compensation has increased 18% over the past five years. Specialist compensation rose 11% over the same period. This is good news because it should encourage more medical students to pick primary care and alleviate the predicted shortage of primary care providers.  The transition from fee for service to value based care shifts more responsibility, and therefore more money, towards primary care.

Family health insurance premium.  According to the Milliman Medical Index, health insurance for an average household of four, with an employer sponsored plan, costs $25,826. This is more than three time the cost of $8,414 in 2001. Employers still pay most of the premium (57%) but cost shifting to the employee is increasing. The average household is paying about $11,000 or about 43% of the total premium. The “good” news is  annual rates of cost increases have dropped from 10% years ago to 5% in recent years.  

Exchange rates up 8%.  According to the Robert Wood Johnson Foundation, the average premium on the exchanges rose 8.3 %, but there was tremendous disparity across the country. Rates went up almost 42% in Oklahoma, but fell 12% in Indiana.  So, the RJW researchers concluded the national average is a fairly meaningless statistic and more attention should be paid to comparing the characteristics of markets with high rates of increases to those with lower rates of increases. Despite the disparities among markets, many predicted the average rate of increase  would be in the double digits. Insurers like United are pulling out of the exchanges as the enrollment of sicker and more expensive consumers creates “unsustainable” losses. Some states (Alaska, Alabama, Wyoming so far) will have only one insurer on their exchanges next year. Insurer losses would be mitigated or offset by the enrollment of younger and healthier consumers. But the current penalty for not buying insurance is still far cheaper than buying premiums; so, younger and healthier people take their chances by foregoing insurance and paying the penalty.

Opioid overdoses.    44 people die every day from an opioid overdose. The epidemic is very costly to first responders, ambulances and hospital drug treatment facilities because many if not most of the patients lack insurance. The annual cost to treat these patients exceeds $2.3 billion, most of which is absorbed by the aforementioned providers.  Rehab cost between $16,000 and $20,000 per patient. If the patient contracts hepatitis C, typical for intravenous drug users, the cost jumps as much as $94,000 primarily for drugs.  Frustrated with little to no change in medical school curriculums, Harvard medical students have organized their own training sessions on treating opioid addiction. The FDA wants to require training for all physicians who prescribe opioids, but physician groups remain opposed.

Big Pharma “charity”.  You have heard on the ubiquitous drug ads that, “if you are having trouble paying for….. (the particular drug), financial assistance is available”. This seemingly charitable/humanitarian act is done  to deflect much deserved criticism for profit mongering and bankrupting the entire healthcare system and to boost sales. To offset the “charity” or discount, drug manufacturers merely increase the prices of their drugs.           

Protect your identity.  Hackers want to steal your personal information and your identity. Your mobile phone, laptop and router are all access points for thieves. The best way to reduce your risk of being hacked is to frequently change your passwords. The main reason why we don’t do this nearly enough is that we all have several (too many) passwords. Experts remind us that the hassle of changing our passwords pales in comparison to the disruption of life and financial loss if we are hacked.    

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