Vol. 80 December 15, 2012 Pet Health Insurance

December 15, 2012

hubThis subject springs to my mind this month
because my friend got a free kitten for Christmas last year.
Her daughter had rescued him from a dumpster.
His name is Charlie.
More on Charlie later.

According to industry statistics $13 Billion (yes, that is a “B”) was spent in 2010 on veterinarian care for pets in 73 million households; a 40% increase over 2006. In 2006 there were about 86 million cats in the U.S. If they could vote, and did so as a bloc, they would bury the 78 million dogs. With the number of pets and costs rising like that, I wondered what the pet health insurance market was like. Does the pet health insurance marketplace have lessons, or even “best practices”, for us in our struggle with health insurance costs and coverage for humans? Is it time for an Affordable Care Act for pets? I decided to take a look.

As I surfed through pet health insurance plans I was struck by the similarities to our (human) health insurance plans of the 70’s and 80’s. The subscriber pays the vet and gets reimbursed 90% of “usual and customary” fees. The companies promise “quick-turn around” of claims, of course. The vet has no forms to fill out or sign. The subscriber does it all. These familiar phrases sound like “the good old days” to physicians who now have two or more full-time office people filling out all sorts of insurance billing forms and/or an IT consultant to do it electronically.

You can go to any licensed vet. There is no concern about “eligible providers” or being “out of network”, but policies do differ from state to state. Reimbursement is not dependent on diagnosis (no need for bulky code books or sophisticated computer programs). None of the policies cover pre-existing conditions or preventative care services (routine visits to the vet). Those are optional coverages available for additional premium.

It all sounds pretty simple and straight forward until you start reading more closely. An asterisk here and a double asterisk there sends you to fine-print footnotes defining “eligibility criteria”, “waiting periods”, “continuing care”, “pre-existing conditions”, and “congenital conditions”. That’s not only identical to our “good old days”, but it also holds true today.

A neighbor just spent $400 on the annual visit and necessary vaccines for his three Labradors. When I asked him if he had health insurance for them, he replied, “No way was I going to spend all that time figuring out what they covered, and when, and for how much. It was too complicated. I struggle enough trying to understand the policies I buy for my employees.”

Pet health insurance was started in Sweden in 1924  and was adopted  in the U.K. around 1947. The first pet insurance policy in the U.S. was written in 1982 for the protection of our TV hero Lassie.  (Do Socialist countries always lead the way in developing health insurance plans?)  NAPHIA, North American Pet Health Insurance Association, was founded in 2007. In Canada there are 10 cat health insurance plans while in the U.S. you have the choice of 36 plans for cats. (Capitalism is so-o-o predictable sometimes)

Back to Charlie….Remember Charlie?….This is a blog about Charlie.
He is an extremely cute, solid black kitten that made my friend’s last year’s Christmas stocking begin to wiggle. When his head popped out with those big, wide open green eyes, the mystery of the stocking was over, and the love affair began. Health insurance for him was available after a mandatory 30-day waiting period (the insurance company wanted to be sure he survived that long I guess).  The waiting period for coverage of “congenital conditions” is 180 days, presumably for the same reason. It would cost from $4.08 per month to $67.14 per month depending on coverage options, BUT excluded preventative care and routine visits to the vet.  After reading Consumer Reports my friend decided not to buy any.

The first visit to the vet cost $103.75. That included $26.00 for a FVRCP shot against Feline Viral Rhinotracheitis, aka “a bad cold”, and $21.75 for a fecal specimen exam. The second visit a month later was $161, and the third month it was $277. That one was higher because of the anesthesia charge for the neutering ($36.00) and a Catalyst Chem 10 test ($62.00). The lab business for pet tests seems as lucrative as for our tests. The neutering operation itself seemed like a bargain at $50.50.  It was only slightly higher than the placement of the ID microchip under his skin. (ER docs and police eat your hearts out!  The technology is here.)

Rather than continue to bore you with the details, suffice it to say, my friend’s “free” kitten cost over $500 for vet visits in the first year alone. I am not even going to try to total up all the other costs because someone else already has.  According to a 2010-2011  survey the average annual maintenance cost of a cat in the U.S. is $1217.

Maybe a “free kitten” should have been included in my list of Christmas presents to give your enemies rather than your friends.  But as the commercial says:

” Vet visits -$500…
Food for a year – $400…
Toys -$21…
Having Charlie’s warm meows greet you when you return home or when you awake in the morning – Priceless!”


Vol. 44 May 1, 2011 Why Can’t Medicare Be Like Visa?

May 1, 2011

Last week I made two purchases on the same day with my Visa card, one for $293 and one for $273, but the two transactions could not have been more different.

I spent $293 for three pieces of metal to repair line cutters on the two propeller shafts of my boat. The $273 was for a shot of the shingles vaccine, Zostavax.

At the marina, I told the parts manager what I thought I needed, and after a brief exchange he went back into the large storage area, brought out what I needed, showed me how to install them, and swiped my Visa card. I left with the parts, the receipt, the confidence that the parts would solve my boat problem, and the certain knowledge that the charge would appear on my Visa statement next month.

At the doctor’s office, I filled out the short registration/information form, was greeted by the nurse who ushered me into a small exam room, gave me the injection, and sent me back out to the front desk to sign out. And that is where all semblance to my other purchase ended. The receptionist began a little speech which sounded well-rehearsed but only because she delivers it 20 times on a vaccine day,

 “If you have Medicare Part D we can not bill your insurance. You may pay today with check, Visa, or Master card, and we will give you written instructions on how to be reimbursed by your insurance carrier. Here is the detailed receipt for today’s service that you will need to send in to your insurance carrier. Also, here is the list of the numbers they will require you to provide; our tax ID number, the physician’s  NPI number, the procedure code, and the National Drug Code number of the vaccine. Please note that there are 6 physician NPI numbers on this list, and we have circled the one you should submit as the supervising physician for today’s injection. You will need to go to your insurance carrier’s website to print out a claim form, complete it, and mail it in for your reimbursement of today’s charges. Don’t forget to include todays’ detailed printout even though you have provided much of the same  information on your carrier’s claim form. Keep copies of everything that you submit. Usually the carrier will reimburse you in about 60 days. Any questions?”

I had two…no, three immediate reactions.
1) what the hell?,
2) what is so special about this service that I need to do this instead of them?,
3) what if once a year all doctor’s offices did this for all their services to all their patients?
Boy, wouldn’t that be an eye-opener for patients!  Talk about transparency! A taste of the reality of what doctors’ offices go through every working day to get paid by multiple insurance carriers with different forms, review procedures, and deadlines might jumpstart a consumer campaign for single-payer health insurance!

But, I kept quiet and handed her my Visa card. She swiped it, had me sign the slip, and gave me a copy along with a detailed encounter printout, a page of instructions, a page with the required numbers, and a wish to “Have a nice day”. I went home printed the claim form on my carrier’s website, completed it (9 digits for practice tax ID#, 10 digits for NDC#, 10 digits for physician’s NPI#, two 5-digit procedure code #, and two 5-digit diagnosis code # ). There was no line to record one of the numbers, so I just wrote it on the bottom of the form. I attached the doctor’s office printout (being careful to follow instructions to NOT staple or paperclip any of the pages together), copied all the pages, and mailed it. The carrier’s website told me to expect them to take at least 30 days to process my claim. There was no note about when I could expect payment.

By the way, $46 of the $273.21 charge that day was for the physician. The rest was for the vaccine.

Why can’t that medical service transaction be as simple as the one for my boat parts?

Medical Services are too complex, and there are so many of them?
Have you ever seen a marina chandlery or more commonly an auto parts store? Shelves stacked with myriad parts, big and small, rising right up to the ceiling and a countertop piled high with catalogs and specification books that make the ICD-9 code books look like magazines. All  sharing space with a computer terminal usually on a swivel to make it easier for the customer to help spot the picture of the one part for the boat or car model he wants. No, complexity of inventory can’t be the barrier. Just think Amazon.com.

Fear of fraud?
By the patient? My doctor’s office staff knows me by sight, but I still have to confirm my date of birth and Medicare number every time I go in. On the very first visit I had to show a picture ID. By the doctor? In 30 days I will “audit” the charges on my Visa bill. I could do it the next day on-line if I wanted to. If I don’t agree or think that something is amiss, an email or a phone call to Visa will put it on hold. If I didn’t challenge or question the charge within 30 days, Visa could let Medicare know and Medicare could transfer the same amount as a credit to my Visa account. I’ll get to see the correctness and timeliness of that credit in my next Visa bill. If several patients reported charging problems with the same physician or office, Visa would be all over them.

If  Visa can call me within 24 hours to verify my purchase of diesel oil at a marina two states away from my home state where I had purchased oil just two days previously, I would expect them to be able to set up programs that would flag potential physician fraud. Certainly the current government and insurance carrier computer programs that have missed millions of dollars of fraudulent charges, in Florida alone, are nothing to brag about.

Too expensive?
The 7%  that Visa charges merchants and retailers for conducting transactions seems like a real bargain to me. If Citizens Bank can make enough profit on the $20 pre-payment “float” of Fast Lane, Visa could probably make an acceptable profit on the “float” from a $50 annual fee for health insurance transactions.

Lack of standard pricing?
Visa seems to be able to handle that quite well now among different airlines, hotels, catalog stores, and everyone else with a weekly special, redeemable coupons, and the like. Of course, a national standard, or at least a regional one, for health services pricing might make everyone’s life a little simpler, and easier to monitor.

Inertia, or fear of changing how we do things now?
Many hospitals, physcians and more than half of consumers currently favor a single-payer system, not because they are social liberals, or muddle-headed do-gooders, but because they are exhausted by and fed up with our current complex, inefficient, and bureaucratic payment system that is so easily manipulated by the insurance companies for their own benefit.

WHADDAYA THINK?    Take this poll to let me know.


Vol. 43 April 15, 2011 “I Told You So”

April 15, 2011

“The [U.K.] proposals draw heavily on market-style incentives to drive improvements in outcomes and increase responsiveness to patients and the public. But they also include new arrangements for accountability, fundamental changes to the structure of the NHS, and a shift in the responsibility for paying for health services to groups of capitated physicians. (1)

Sound familiar?  Those words describing the current British health care reform effort could serve as a description of U.S. health care reform and the creation of Accountable Care Organizations (ACO). I know I bill myself as an “evidence-based” blogger, and therefore distant from the personal ranting, either angry or self-serving, by other bloggers, but this article in the New England Journal of Medicine spurs me to electronically shout out in triumph, “I told you so!”  In my blog (2) and in a paper (3) I wrote in 1967 (when?) I opined that  there seemed to be more similarities than differences between the U.K. and U.S. health care systems.  This well-researched article in the NEJM  agrees with me.

BOTH the U.K. and U.S. reform acts:

Seek to reduce costs by making providers accountable for total per capita health care costs ($32B less for U.K.over 5 yrs. and $100B less for U.S over 5 yrs.)

Seek to strengthen primary care

Remove payment incentives to increase volume of patient visits (Pay for “value” in U.S.;  “fixed budget” in U.K.)

Do NOT require providers to “bear risks” for  catastrophic illness like insurance companies do now (but that is an option for ACOs in U.S.)

Primary Care Physicians (PCP)
While the U.S. pays lip service to strengthening the PCP, the U.K. proposal really means it. U.K. will give the general practitioners CONTROL of over 70% of the NHS budget! The GPs will form primary care groups called GP Consortia. These Consortia will buy additional care for their registered patients from hospitals and specialists competing for contracts. 170 Consortia have already been formed and another 100 are being planned. A physician-run ACO in the U.S. would be similar, but the ACO would include both primary care and specialty physicians like present day multi-specialty groups. No one knows how many ACOs will be developed, and many of them will be formed by hospital systems.

Commentators on both sides of the Atlantic have voiced concerns that physicians will not be able to deal with these new managerial responsibilities successfully; physicians in neither country like to develop budgets, live by budgets, or even value management/administrative skills.

Quality Incentives
In the U.K. the National Institute for Health and Clinical Excellence (NICE) will set care quality standards for the Consortia and the contracts they grant  or “commission”. The Center for Effective Research (CER) established by the U.S. Affordable Care Act will have the same role of issuing standards of care. The practice of setting national targets for care  will be dropped in the U.K. to be replaced with “a system of open reporting of data on performance and clinical outcomes.” This newly available data will allow patients (“the market forces”) to choose high quality care among the “any willing providers” in the absence of national targets and differential prices. As in the U.S. there is little evidence that patients actually use such data when it is available to make decisions about where to seek care.

Two Big Differences
The U.S. ACO incentivizes coordination of care between primary care, hospitals, and specialist physicians. The U.K. Consortia will control the money and issue contracts for hospital and specialist services. This could increase competition and hinder collaboration in the U.K.

U.K. patients will still have to register with one GP though they will have more freedom of choice of GP, i.e. patients will no longer be restricted to registering with the closest GP to their home.  ACO patients will be assigned based on “previous patterns of care” though there will be incentives to use “participating providers”.

What are the take home messages?
We are not the only country muddling through a major health care reform while walking the line between regulations and market forces.

Everyone seems to be seeking the goals of higher quality and lower costs through electronic information upgrades.

Given the similarities between the U.S. and U.K. systems,  the charge that Dr. Don Berwick, Head of CMS and a pediatrician, “likes the NHS too much” seems a bit ridiculous.

References:

1. NEJM 364:14, April 7,2011, p.1360-66
2. http://www.hubslist.org, Feb. 1, 2011
3.Mathewson, H.O.. “General Thoughts About General Practice: a medical student’s view of the future of general practice in the United Kingdom.”  J Med Educ. 1968, Jan;43(1):36-41.


Vol. 29 September 15, 2010 Big Pharma and $$$

September 15, 2010

“Doc, you say I’m too heavy?

You want me to exercise more and go on a diet?

Hey, I’m an American. Give me a pill!”

This is my short form of the more nuanced statement by Daniel Callahan noting that one secret of pharmaceutical companies’ success is to designate life’s problems as diseases and then aggressively market a treatment (usually a pill) for them. Obesity, ADHD, acne, aging, and “low” testosterone are just some of the examples. (1) One study counted up the number of people designated as “sick”, and therefore could benefit from a particular drug, in all the drug ads and arrived at the fantastic total of 1.5 billion sick people in the U.S, or five times our population. (2) A growing volume of “neuroenhancer” drugs to fight memory loss of dementia (Aricept) or improve your academic performance (Ritalin, Concerta, Adderall, Provigil) is an another example of life’s problems being given disease status. In 2007 more than 1.6 million people in U.S. used prescription stimulants (Ritalin, Adderall, Provigil) for “non-medical” purposes. On some college campuses 25% of students reported using them.  One rationale is that “cognitive enhancement through drugs is just like improving vision by wearing glasses.” (3)

Only the U.S. and New Zealand permit direct-to-consumer advertising by drug companies. In 2009 drug companies spent $4.8 Billion on direct consumer advertising alone. (4) Drug companies spend more on all forms of marketing than they do on research and development of new drugs. (Some say it is 50-50). The FDA has 57 employees to monitor over 75,000 drug advertisements per year, and that does NOT include  the internet with its Facebook banners, widgets, and now Twitter. Online ads are increasingly aimed at teenagers with musical themes and flashy, MTV-like editing; methods that drug companies refer to as “informational tactics”. The FDA did succeed in shutting down “Tupperware parties” for women during which certain IUD’s were promoted as a surer route to “carefree happiness”. Direct-to-consumer advertising works because 1) companies say they are “informing” the patient, 2) no doctor wishes to take time to discuss one of several effective drug options if the patient has already asked for one of them, and 3) “patient-centered care” has become the new Holy Grail of medical care quality.

FDA regulations require that a new drug has to be compared only to a placebo (no drug) in order to be approved. No proof of superiority over existing drugs is required. This has spawned many “me too” drugs which may differ in small biochemical and clinical ways from an existing drug whose patent protection is about to expire. Nexium, the purple pill antacid, is the classic example of this as it differs only slightly in chemical orientation (“racemic” is the chemical term)  from Prilosec that was about to have its patent protection expire. The health care reform law under its section of Comparative Effectiveness Research (CER) will require new drugs to show some advantage over existing ones through direct comparison studies.

In 2004 $73 million was spent by the pharmaceutical industry lobbying at the federal level. Another $49 million was spent on the state level and about $5 million was spent just lobbying a single agency, the FDA. In just the first quarter of 2009 $66 million was spent on lobbying at the federal level. (5) The drug company organization, PhRMA (Pharmaceutical Research an Manufacturers of America), has successfully blocked the importation of drugs from Canada and Medicare’s ability to negotiate drug prices with manufacturers; a sizable cost savings to many state’s Medicaid programs.

If there is any doubt that big money is involved, just take a look at Genzyme. In one week the same newspaper reported that Genzyme was laying off 1,000 workers (10% of its total) to cut costs in order “to stay competitive” AND another drug company, Sanofi-Aventis SA, had offered to buy Genzyme for $18 Billion. Much of Genzymes fortunes have been made on two drugs for two different rare diseases, Fabry and Gaucher diseases. What the prospective buyer sees are three new drugs that Genzyme has “in the pipeline” for other two other uncommon diseases. They may bring in new revenue of $1 Billion per year.(6)  Such drugs for rare diseases are called “orphan drugs” and have their own “special economics.

Next Post: “Fake Pharma and an orphan drug gone wild, Botox.”

References:
1.Taming the Beloved Beast, How Medical Technology Costs are Destroying Our Health Care System, Daniel Callahan,, 2009
2. Critical Condition: How Health Care in America Became Big Business – and Bad Medicine, Bartlett and Steele, 2004
3. Brain Gain: The Underworld of Neuroenhancers, Margaret Talbot, New Yorker Magazine, April 27, 2009
4. Outgunned FDA, Rueters, September 2010
5. Center for Responsive Politics, http://www.opensecrets.org
6. Boston Globe Sept. 11 and 13, 2010


Volume 3 August 1, 2009 Health Care Lobbyists, Things That Can Threaten Life or Limb

August 1, 2009

Amount spent nationally in 2008 for all healthcare lobbying: $484 million    Amount per day: $1.3 million                                                                          Amount per each congressman and senator per day: $2,600

Number of health care lobbyists in 2008 and increase since 1998:  3,627 / x2

Number of health care organization in the top ten spenders for Massachusetts lobbyists: 5  Which?: MHA, BC/BS, SEIU 1199, Mass Assoc. of Health Plans, Partners Health Care

Per cent of total health care lobbying money attributed to pharmaceutical interests:  > 50

Amount spent by pharmaceutical companies for lobbying in just the first quarter of 2009: $66 million

Per cent increase that is over last year’s amount: +25

Rank of pharmaceutical industry spending on lobbyists of 121 industries monitored since 1998: 1

Number of years new drug patents are “exclusive” which prohibits generic manufacture: 12

Amount contributed this year by Amgen to the Edward M. Kennedy Institute for the United States

Senate at the University of Massachusetts: $1 million

Rank of health professionals lobbying and spending level compared to pharmaceutical: 12 and 1/2

Top five health professional organizations making political contributions in 2008 and amount spent:

Am Med Assoc./ $20.1 million; Am Coll. of Radiology/ $3.4 million; Am. Acad. of Family Practice/

$3.1 million; Am. Assoc. of Orthopedic Surg./ $1.7 million; Am Coll. of ER Physicians/ $1.6 million

Amount of money paid for “No.9” electronic cigarettes in the past two years: $100 million

No. 9 is an E-cigarette that dispenses propylene glycol and liquid nicotine and the plastic tip

glows when you inhale. It dispenses 1/5 as much nicotine and costs about one-half as much as a

real cigarette. One scientist has stated, “There is simply no evidence at this time that electronic

cigarette use poses any significant risk to non-smokers (emphasis added).”

Per cent of Massachusetts registered drivers over 75 and per cent of all auto accidents involving a

driver over 75 respectively: 7 / 3.6

Per cent change since 2004 of Massachusetts accidents involving over 75 year old drivers: -18

This is heartening to those of us who have noticed the recent spurt of stories about the

over 75 year old drivers who have confused the accelerator pedal with the brake pedal.

Ratio of fatalities in accidents at intersections for over 75 and those aged 26 to 64 yrs.:  2:1

Factor by which a driver using a cell phone is more apt to cause an accident: 4x

Chance of reducing that increased risk of an accident by use of a hands-free cell phone: 0

Per cent alcohol level in drivers having the same risk of an accident as a cell phone user: .08

Per cent of 50 states that define drunk driving as a blood alcohol level of .08 or more: 100

Conclusion: If you meet an over 75 year old on a cell phone at an intersection, get out and walk.

Number of Massachusetts soldiers killed in action between 2002 and 2007:  78

Number of Massachusetts  residents dying of a drug overdose in the same period:  3,265

Increased chance of having a blood clot develop in your leg during a long sedentary trip: x3

Per cent increase in risk for each two hour interval of travel: 18 (26% for air travel)

Absolute risk of developing a blood clot during an airplane trip: 1 in 4,600 flights


Quotable Quote

“Confidence is what you have before you understand the problem. Woody Allen

Seton Hall University Law School; http://www.healthreformwatch.com/2009/06/27/

Center for Responsive Politics, http://www.opensecrets.org

Boston Globe July 18, 2009,   Mass Secretary of State’s office statistics

Boston Globe, Biotech Firms Push Hard to Protect Profits, July 21, 2009, p.A1

Boston Globe, July 21, 2009, p. G22, Alex Beam

Boston Globe, July 19, 2009, p. B1, David Abel; Mass RMV; US Government Accounting

Office;Insurance Institute for Highway Safety

Boston Globe, July 19, 2009, p. A9, Matt Richtel

Massachusetts Oxycontin and Heroin Commission

Annals of Internal Medicine, Vol. 151: Issue 3, 2009, D. Chandra, et al.


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