Readers Write...

Philip Betbeze, Senior Editor, Finance, January 14, 2008

It's tough to keep a positive attitude these days. As I stare out the window today, the weather's dank and gray and spring seems far away. Football's regular season is over, which means fantasy football is over. And I don't know about you, but I spend an inordinate amount of time looking at my (meager) stock holdings and the performance of my 401(k). Yuck. It's a horror film. As I mentioned in my column last week, the federal government increasingly seems unable to help our foundering economy as it spends stupidly (ethanol, anyone?) and continues to borrow against our future. But as the stock market continues to depress and as our Federal Reserve and government seemingly run out of bullets to stimulate an economy that may have finally lost its way, it's encouraging to hear from readers about their opinions on the situation:

    Another good article that appropriately draws attention to the monstrous gorilla sitting in the room that no one--neither our elected nor our wanna-get-elected officials--seems to want to talk about.

    As Medicare and Medicaid dollars continue to shrink when factored into the increasing cost of providing healthcare and unreimbursed healthcare costs, hospitals and healthcare providers must do a much better job at securing what they are owed from commercial insurance carriers and/or payers. As the prospects continue to grow dim for healthcare providers securing any meaningful payment increases from our debt-ridden government through Medicare and Medicaid and securing little or any reimbursement from an increasingly uninsured (and under-insured) population, healthcare providers are faced with few options.

    On the whole, the HMO/payer industry is light-years ahead of healthcare providers in the battle of managed care contracting and managing (limiting) reimbursement. To a certain extent, providers' dependence on government reimbursement (and periodical Medicare/Medicaid increases) has contributed to this problem. Our company has identified and recovered as much as $18 million from payers for one hospital--and this from patient accounts the hospital felt were paid correctly.

    If health systems, hospitals and providers were to secure most or all of the payments they're due from commercial payers, many negative aspects of the "healthcare crisis" could be eliminated--or at least diminished.

    Keep up the good reporting.
    Gary Stankowski

    My understanding is that Medicare is by far the larger liability involved. Social Security can actually be fixed relatively easily by a combination of benefit reductions (e.g., changing the eligibility age/benefit amount equation) and revenue enhancements (e.g., raising the income gap on Social Security taxes).

    Medicare is the far more vexing problem, exacerbated by the passage of Medicare Part D. The only realistic way to address this is a combination of revenue enhancements (increase the Medicare payroll tax, for example) and cost reductions. Cost reductions can be accomplished by reducing demand. The silver lining of Part D is that to the extent it increases beneficiary access to prescription drugs, its cost may be offset by reduced physician and hospital expenditures. In a best case scenario, Part D could actually lower overall program costs if it has a large enough effect on emergency room costs due to hypertensives' non-compliance with prescription drug therapy, for example. Encouragement of healthy lifestyle--better diet and exercise and reduction of vices, particularly smoking--is also a way to improve senior health and minimize costly conditions such as stroke, heart disease and cancer.

    Some of these things are already happening. The baby boom generation seems to be aging more gracefully than its predecessors, paying more attention to health. But one way or another, the problem will be resolved. Unsustainable trends are not sustained. Solutions will be found. Hard choices may be necessary, but it is possible that Americans will ameliorate the crisis of Medicare by changing their behavior.

    What is remarkable is that some continue to advocate a single payer healthcare system when the hybrid public-private system we have now is already fiscally unsustainable!

    Terry Nugent

Some readers wanted to comment on my previous column about HSAs. Coming as it did in the midst of the holidays, I wasn't sure anyone would read it, but I resisted the siren call of the "year in review" column, and the topic seemed timely. As I mentioned in the article, the devil is in the details on whether these tools will serve their intended purpose, injecting the consumer into the healthcare cost equation in the hopes that their influence will foster competition that will bring lower prices and better quality. Here are some opinions:

    Dear Mr. Betbeze,
    Thank you for your article today in HealthLeaders on patient funding challenges with their HSAs. I agree with much of your assessment, but also believe the solution to these concerns is fairly simple and straightforward. First, as you point out, employers must delay gratification when implementing HDHPs. Specifically, they need to maintain their current contribution level and dedicate excess funds after the reduced HDHP's premium directly into the employees' HSAs. The employer's benefit will come from lower premium increases and from fundamentally restructuring patient incentives to take responsibility for their health, both of which require some patience. If employers opt for immediate gratification and take all the gains from reduced HDHP premiums for themselves, the consumer-driven conversion will not work.

    Second, to drive HSA funding, employers should simply establish the policy that they will not make their contribution (i.e. pay the HDHP premiums and fund their contribution to the employee's HSA) until the employee has funded his or her share of the HSA. Once employees understand that their HSA contribution is only going to themselves for expenses they will eventually need, they rarely have a problem with funding. It is when they don't understand what's happening and their employer attempts to "steal" a short-term gain from them that this new approach has problems.

    Thank you for writing on this important topic.
    Kelly McCrann

    Dear Philip:
    What's unfortunate is that HSAs seem to be a tax break for the well off so they can save. HSAs also became cheaper insurance for companies to give their workers who already had better insurance.

    HSAs are not being used to increase the number of insured as promised. Over the last seven years we have seen record profits for the health insurance industry. Our rates go up 85 percent and the only thing the brain trust of Washington can come up with is a tax-free savings plan for the well and wealthy. The biggest problem is very few reporters are telling the truth about HSAs, which are a very expensive program to deal with as a physician. Most of the marginal wage earners who have no choice are going to be stuck with bills or hold back on sick visits. Truth be told, there will be billions for the banks to invest (like the president wanted for Social Security). The people who really needed the help will not get it from a plan that really was a tax proposal and not insurance.

    Harvey Brownstein

Not all proposals (or laws) are ready for prime time and need tweaking along the way. Though our elected officials don't always fill us with the highest of hopes in their abilities to navigate the problems our nation faces, such tweaks will prove essential. And as we slog our way toward fixing our most pressing future liability, I'm thankful that our readers care enough to write. I'm also privileged to write about what I believe is our country's most pressing dilemma outside of terrorism: the cost of healthcare.

Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at
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