Health insurance does not safeguard people against medical debt in California, where one in seven non-elderly adults is trying to pay off healthcare bills in excess of $2,000. Of those with debt, 1.4 million, or two-thirds, have health coverage.
"More than 2.2 million Californians, or 13% of nonelderly adults, reported having medical debt," according to the survey, "The State of Health Insurance in California." Among those 2.2 million, 17% had debts from $2,000 to $4,000; 9.4% were paying debts between $4,000 and $8,000, and 8.7% had debt about $8,000.
The nation's largest state health survey was conducted by the UCLA Center for Health Policy Research, which conducted telephone surveys of 50,000 California residents between June 2007 and early March 2008. The survey is part of a biennial project, but its release sends a message to those trying to craft health reform proposals, the authors said.
"That even insured people are forced to take on medical debt to pay for their healthcare is another glaring inadequacy in our current system of health insurance," said E. Richard Brown, the center's director. "Current policies either do not offer enough coverage or offer full-coverage at a cost that is too expensive for many people to bear.
The fact that such a large portion of the survey respondents said they were paying off medical bills even though they had health insurance was a surprise, said Shana Alex Lavarreda, director of the center's health insurance studies and one of the report's six authors. "If insurance plans did what they were supposed to do, they would give that protection," she says.
A major reason for the debt appears to be high deductible plans, the survey found. Among those California adults who said they had employment-based health insurance for the entire year, 7.2% reported having high-deductible coverage without a health savings account, and 3.5% had a high-deductible plan with a health savings account, which is also known as a consumer-directed health plan. For the survey, a high-deductible plan was defined as one requiring the insured to pay the first $1,000 or more for a single person or $2,000 or more for family coverage.
"High deductible plans, both with and without health savings accounts, are much more common among Californians with privately purchased coverage than among those with the employment based coverage," the report noted.
More than 38% of adults with privately purchased insurance had a high deductible, compared to 10.7% of those with job-based insurance.
Lavarreda added that copayments are another reason, although the respondents were not asked why they incurred their medical debt.
Much of the problem would be eliminated if the nation passes a health reform proposal with fixed caps on out-of-pocket spending, Lavarreda says.
The survey found that 32% of those who reported to be in medical debt responded that they had delayed or forgone seeing a medical professional, about double the number who did not have medical debt. Additionally, delays were higher as the amount of debt increased. For example, 43% of those with debts in excess of $8,000 told surveyors that they were delaying care.
The report also broke down county-by-county those regions of California where the highest percentage of residents reported being encumbered by medical debt. Northern California counties near the Sierras had the highest rates of 24.7%; followed by the Central Coast, 18.4%; San Joaquin Valley, 17.5%; other Southern California counties, 12.7%; and the San Francisco Bay area, Los Angeles County, and Sacramento County, 11%.
Other findings from the survey:
In 2007, 10.2% of children under the age of 18 were uninsured for all or part of the year, and 52.2% were covered by their parent's employer. But three in 10 children were covered through Medicaid (MediCal or the state Healthy Families programs).
Nearly 90% of the uninsured are in working families, most of who worked full time in 2007. "Three-fourths of the uninsured have low to moderate incomes, underscoring the need for subsidies to make health insurance affordable for most of those who lack coverage."
The survey was conducted throughout the state during a period of economic expansion, between June, 2007 and early March, 2008, raising questions about whether far more people have been pushed into medical debt during the recession.
The project receives support from the California Endowment and the California Wellness Foundation.
Medicare beneficiaries would see their Part D prescription drug benefits rise by 5% in 2011—and by 20% in 2019—under provisions found in HR 3200, the House's healthcare reform bill, according to the Congressional Budget Office (CBO). However, beneficiary spending on prescription drugs—apart from those premiums—on average would fall.
Under the House reform proposal, beneficiaries' premiums would rise for two reasons: Phasing out the doughnut hole—the gap between the end of the initial coverage range and the catastrophic threshold—and spending more above the catastrophic threshold. This means prescription drug plans would be responsible for covering more.
Next, under new provisions of the bill, pharmaceutical manufacturers could offset the rebates they would be required to pay for full benefit dual-eligible individuals by charging higher prices for new drugs—particularly breakthrough drugs.
Because enrollees pay for about 25% of the cost of coverage through their premiums, premiums would also be higher. In return for those higher premiums, enrollees' would receive greater protection against incurring high drug costs, CBO said.
HR 3200 proposes several changes to the Medicare Part D program, CBO said, that would impact federal spending and premium costs:
It would create a new rebate program that under various circumstances would require pharmaceutical manufacturers to pay the federal government the difference between the statutory rebate under Medicaid and the rebates paid to Medicare's prescription drug plans. Specifically, this policy would apply to covered drugs dispensed to full-benefit dual eligible individuals, which are beneficiaries who are enrolled in both Medicare and Medicaid.
It would phase out the doughnut hole by extending the benefit's initial coverage limit and lowering the catastrophic threshold at specified rates. This would result in eliminating the doughnut hole by 2022.
It would apply to covered drugs dispensed to full benefit dual-eligible individuals for beneficiaries who are enrolled in both Medicare and Medicaid. Since the statutory rebate provided under Medicaid is usually larger than those negotiated by the plans providing the Medicare drug benefit, the provision would reduce federal spending, CBO said.
According to CBO's estimate, the provisions could save the federal government as much as $30 billion over the 2010 to 2019 period. CBO did not estimate the impact of each provision separately because their effects are closely connected.
Retail medical clinics are becoming a common site in many cities and towns. The clinics, popular for their lower prices, can provide quality care comparable to that offered in physicians' offices, urgent care centers, or hospital emergency departments, according to two separate studies from RAND appearing in this month's Annals of Internal Medicine.
More than 1,000 retail clinics currently operate in the United States in places such as pharmacies, discount stores, and grocery stores. In addition to lower costs, these clinics require no appointments, are open on weekends and evenings, and report shorter waiting times.
However, since the first retail clinic opened in 2000, several physician organizations, including the American Medical Association and American Academy of Pediatrics, have raised concerns about the quality of care that retail clinics deliver—arguing that visiting a retail clinic could lead to unforeseen complications that result in higher healthcare costs.
To evaluate the validity of those concerns, the researchers analyzed claims data from a large Minnesota health plan that has been providing coverage for its enrollees at retail clinics for more than 5 years. The researchers compared the cost, quality of care, and the delivery of preventive services for 2,100 patients who received care for three conditions commonly treated in retail clinics—otitis media, pharyngitis, and urinary tract infection [UTI]. These episodes were matched with other episodes in which these illnesses were treated first in physician offices, urgent care centers, or emergency departments.
The researcher found that the quality of care in retail clinics was similar to that provided in physician offices and urgent care centers and slightly superior to that of emergency departments.
Nurse practitioners, rather than physicians, generally provide the care in retail clinics. The findings were consistent with previous research that found no difference between the quality of care delivered by nurse practitioners and physicians, according to Ateev Mehrotra, MD, a professor at the University of Pittsburgh School of Medicine and one of the RAND researchers.
"What was surprising a bit to me was the issue on impact on preventive care," Mehrotra says. Earlier concerns had emerged that patients who visit retail clinics would be less likely to receive preventive care than if they had received similar care at a physician's office.
This was not the case. Instead, the researchers found that rates of preventive care received at the initial visit through the subsequent three months were similar for retail clinics and physician offices. For patients who visit a retail clinic, preventive care was typically delivered in a physician's office, which suggests that the clinics were not disrupting opportunities for preventive services.
The costs of care in retail clinics were 30% to 40% lower than in physician offices and urgent care centers, and they were 80% lower than in emergency departments. The differences were related to lower reimbursements for evaluation and management visits and lower rates of laboratory testing in retail clinics.
In the second study, the researchers noted that 42 operators ran 982 clinics in 33 states as of August 2008. More than 88% were located in urban areas; and nearly half (44%) of all clinics were located in five states (Florida, California, Texas, Minnesota, and Illinois). Almost all (97%) accepted private insurance and Medicare fee for service (93%).
Among 42 clinic operators across the country, 25 were existing healthcare companies that operated 11% of the clinics, and three were for profit retail chains that operated 73% of the clinics.
Mehrotra adds that even while there had been much criticism of retail clinics by established healthcare providers, the study showed that "a number of these current providers—physician groups and hospital chains—believe in the model and they are willing to enter the model themselves."
Coming soon to Saint Anne's Hospital in Fall River: Oncology care branded with the diagnostic expertise, clinical trial variety, and options for chemotherapy—all from prestigious Dana-Farber Cancer Institute in Boston, which is 51 miles away.
"You've seen the signs that say, 'Starbucks Coffee Served Here?' Well, this is Saint Anne's saying 'Dana-Farber served here,'" says Marc Bard, MD, a healthcare consultant familiar with the arrangement.
"Each party says it's a win-win," Bard says. "Fall River will get more infusion and radiation patients, and Dana-Farber will get to do more initial diagnosis and staging by being out in the community."
Lawrence Shulman, MD, Dana-Farber's chief medical officer and senior vice president for medical affairs, agrees. He says the memo of understanding announced last week is "a win-win for both parties for many reasons, especially this one.
"Cancer medicine is moving along very, very quickly, with new technologies and treatments coming down the pike literally every day. And it's increasingly difficult for hospitals like Saint Anne's to stay current without having a connection to an academic medical center. They were looking to partner."
Dana-Farber will employ all physicians and managers, while Saint Anne's, a 160-bed hospital owned by Caritas Christi Health Care, will hire nurses and other personnel. Patients will come from Fall River and surrounding towns in southeastern Massachusetts.
Details on the number of personnel who will wear white coats carrying Dana-Farber's name is still being worked out, Shulman says. But he insists that the only way the collaboration can succeed is if it truly is Dana-Farber's level of cancer care provided in Fall River. And that includes the institute's survivorship and genetics programs, its social work and nutrition services, and its state-of-the-art electronic medical record system.
With their announcements, the two Massachusetts hospitals are helping to propel a trend seen increasingly around the country in service lines from orthopedic surgery to cardiology. Big names like Johns Hopkins Medical Center in Baltimore, MD Anderson in Houston, Mayo Clinic in Rochester, MN, and Cleveland Clinic are all reaching out to share their excellence and attract patients at the same time.
"All of the Boston teaching hospitals are trying to get out into the communities where there are huge healthcare needs," says Teresa Prego, spokeswoman for the Boston based Caritas Christi.
They will get more of that opportunity at St. Anne's. The Fall River facility cares for more than 6,000 patients annually at its Hudner Oncology Center and at a new oncology center in Dartmouth.
Sister Vimala Vadakumpadan, chair of Saint Anne's Board of Trustees, said the arrangement allows patients to be treated more conveniently, much closer to their homes.
However, those familiar with such joint endeavors say they only work when the institution with the expertise actually provides the care and personnel. It doesn't work when providers are given some training, some signs and T-shirts, and a marketing campaign.
The Fall River collaboration is actually Dana-Farber's fifth effort to provide cancer care outside the walls of its primary building, Shulman says. Dana-Farber now offers its cancer program to patients at Faulkner Hospital in Boston, a clinic in Londonderry, NH, and the Milford Regional Medical Center, which is 45 minutes southwest of Boston. In October, it will offer its fifth clinic—at South Shore Hospital in South Weymouth.
Bard says that such arrangements are part of a trend for four reasons:
Specialty centers like Dana-Farber have access to the latest in cancer science and technology. Unlike 25 years ago when cancer was a death sentence, today it's usually a chronic illness. "It really does matter how you get treated, and that you get the most current and contemporary care," he says.
When it comes to real brand name recognition in healthcare, it turn out that centers such as MD Anderson, Memorial Sloan Kettering, Dana-Farber, and the Mayo Clinic really do have a brand definition. "People now think of their illness as something they can have for quite a long time, and they know the quality of care they get can mean the difference between—not life and death—but quality of life, or just life."
People don't want to have to drive an hour for care they can get locally.
Telemedicine technology easily allows a physician to talk to patients and other physicians while they're seeing them from remote monitors.
Other centers across the country are venturing into similar brand-sharing arrangements. For example, several months ago MD Anderson Cancer Center in Houston announced a partnership with Banner Health for a new cancer hospital in Phoenix.
St. Jude Children's Research Hospital in Memphis is partnering with Rady Children's Hospital in San Diego to help Mexican children with cancer.
The Mayo Clinic has established its own facilities in Scottsdale, AZ, and Jacksonville, FL, but also provides blood and bone marrow transplants for children with cancer at Phoenix Children's Hospital. Mayo Clinic's Adult Congenital Heart Disease Program in Arizona also collaborate with Phoenix Children's in the treatment of children with heart problems who require life-long cardiac care.
Nathan Kaufman, managing director of San Diego-based Kaufman Strategic Advisors, a healthcare analyst, says that such efforts seem to work much better in cancer care than in other kinds of medicine. In fact, he says, generally speaking, it only works in cancer care.
"Chemotherapy can be administered anywhere. It's somewhat unique in that, it can also be delivered remotely," he says. "You can get your CT and MRI scans anywhere, and if they're sent to Dana-Farber, where a group of experts design the latest greatest protocol. That saves a lot of wear and tear on the patient."
Another plus is through the payment structure. "Local oncologists support this because they can get research money and the supervisory fees associated with the treatment. It's not viewed as competition, but as collaboration."
The temporary failure of a vital piece of medical equipment used in cardiac surgeries continues to have repercussions for St. Francis Hospital and Medical Center in Hartford. The Connecticut Department of Public Health is conducting an investigation of the hospital following an initial survey completed in August.
Massachusetts Governor Deval Patrick has announced that 31,000 legal immigrants whose state-subsidized health insurance was set to expire have received a last-minute reprieve—although their coverage will not resume until October. Using $40 million in emergency money designated by the Legislature, Patrick's health and insurance czars reached an agreement with CeltiCare Health Plan of Massachusetts, a subsidiary of Missouri-based Centene Corp., to provide basic medical care for the immigrants through its healthcare network.
Pressured by the prospects of mounting losses, leaders of the Miami-based Jackson Health System expressed concern that the public hospital employees had racked up almost 1.2 million hours of overtime over a 12-month period. Jackson leaders expect the system to lose $56 million this year and $168 million next year, and they're looking to shave costs wherever possible. Trummell Valdera, Jackson's chief human resources officer, focused on the 359,193 hours of "contractual overtime" during a one-year period: 40% of the total overtime the system paid between May 1, 2008 through April 30, 2009.
A report from the UCLA Center for Health Policy Research, "The State of Health Insurance in California," finds that more than 2.2 million California adults—almost one in seven working-age Californians—say they have medical debt. And two-thirds of those said they incurred the debt despite having health insurance.
Preventive services for the chronically ill may reduce healthcare costs, but they are unlikely to generate the kind of savings that President Obama and other Democrats have said could help pay for an overhaul of the nation's health system, according to a study. Using data from long-standing clinical trials, researchers projected the cost of caring for people with Type 2 diabetes as they progress from diagnosis to various complications and death.
Some Indiana Medicaid patients can now earn money to spend on healthcare simply by visiting the doctor or seeking routine preventive care. Managed Health Services has announced a new debit card program that rewards patients for making regular trips to the doctor, taking their babies in for checkups, and getting screened for several conditions. Participants can earn between $10 and $20 on their cards for each visit or screening. They can then use the funds to buy health-related items like cough syrup or thermometers.
