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Cost of Care: What you Need to Know


One of the most perplexing issues in healthcare today for US consumers is our cost of care, and what we are getting for those dollars. Although we have always believed that we have the best healthcare in the world, a close look at our system, reveals that we are paying more, getting less, and what we pay is not equal on several counts.

The Commonwealth Fund in a study in June 2014, in conjunction with several healthcare research organizations, conducted a study where their findings reinforce the poor performance of the US in health rankings as compared with other countries. This research revealed that in access to care, equity of care, and health care quality we have a long way to go.

Access to care: People in the U.S. have the hardest time affording the health care they need. The U.S. ranks last on every measure of cost-related access. More than one-third (37%) of U.S. adults reported forgoing a recommended test, treatment or follow-up care because of cost.

Equity: The U.S. ranks last. About four of 10 (39%) adults with below-average incomes in the U.S. reported a medical problem but did not visit a doctor in the past year because of costs, compared with less than one of 10 in the U.K., Sweden, Canada, and Norway. There were also large discrepancies between the length of time U.S. adults wait for treatments and procedures as compared with other countries.

Health care quality: The U.S ranks in the middle. On two of four measures of quality—effective care and patient-centered care—the U.S. ranks near the top (3rd and 4th of 11 countries, respectively), but it does not perform as well providing safe or coordinated care.

We spend approximately two-and-a-half more dollars than most developed nations in the world for health care, including: Germany, France, Sweden and the United Kingdom. Additionally, price inequities that the US consumer would never tolerate in other industries, are standard in healthcare. For example there is a huge disparity (can be many thousands of dollars) in the cost of procedures such as colonoscopies, endoscopies, MRIs.

New York Times columnist Elizabeth Rosenthal has written about how one woman’s colonoscopy at a surgical center near her home on Long Island resulted in a bill of $6,385, while in Keene NH the cost of the same colonoscopy was billed at $7,563.56. A patient in Chappaqua, N.Y. received a bill for $9,142.84 for this procedure and in Durham, N.C., the charges for a patient came to $19,438.” MS Rosenthal points out that “In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000.”

In the same article, Ms. Rosenthal also reported that:
• The average cost of a hip replacement in the U.S. is over $40,000. In Spain that same surgery is @$7,000.
• The average price of an MRI in the US is $1,000 and in the Netherlands the price is approximately $300.
• An Angiogram in the US costs approximately $914 while in Canada that procedure costs $35.00.

So why are we paying so much more and coming out with a lower standard of health care? We are talking about two related issues:

1. The extremely high cost and lower quality of care in the United States compared to our international colleagues and what an individual consumer can do about this.

2. The disparity in the cost of the same procedure within the US system, which is even more shocking when compared with the cost of these procedures in countries outside the US.

Obamacare tried to address the issue of our poor performance by finally providing insurance to the millions of uninsured Americans, (approximately 15% of the population) who had no access to healthcare. Unfortunately Obamacare has had enormous problems getting the uninsured signed up for coverage, finding enough medical providers to address the needs of this population and working out the kinks and legal obstacles to providing healthcare for everyone. These issues are far from resolved and the solutions are compounded by the high cost of care that impacts everyone.

Among the elements that are preventing the US healthcare system from reducing disparities in costs of care are:
• Diversity in insurance benefit structures.
• Lack of standards in price information.
• Legal impediments including contractual deals between provider institutions and payers.
• Consumer confusion and inaction

When the doctor tells you that you need an MRI and suggests a clinic where the procedure can be done, are you thinking about what this will cost and where you can find a less expensive option, or are you focused on why you need the MRI and what the results will be, i.e. what is wrong with me? With most of us the cost of the procedure does not hit our radar until the bill comes in.

Is this is going to change as the cost of care continues to rise and much of that cost comes directly out of our pockets? Part of the problem lies in the lack of oversight in the healthcare industry, leaving doctors and hospitals to configure care as they find convenient and basically charge what they deem appropriate or what they are allowed under the arrangements they have negotiated with payers.

In another recent New York Times article, also by Elizabeth Rosenthal, there is the story of a 37-year-old man who required neck surgery for herniated disks. Prior to the surgery he secured all of the necessary consent forms, and clearances from his insurer. Thus, he was prepared when the bills started arriving. He was blindsided, however, by a $117,000 bill from an “assistant surgeon,” who he did not know would be a part of the surgical team.

According to Ms. Rosenthal, “In operating rooms and on hospital wards across the country, an increasingly common practice is to bring in assistants, consultants and other hospital employees In operating rooms and on hospital wards across the country, physicians and other health providers typically help one another in patient care. But in an increasingly common practice that some medical experts call drive-by doctoring, assistants, consultants and other hospital employees are charging patients or their insurer’s hefty fees. They may be called in when the need for them is questionable. And patients usually do not realize they have been involved or are charging until the bill arrives.”

Today, when the smallest detail about a patient/physician encounter can be recorded and put into the health record, cost of care data is strikingly missing. As a result much confusion, misunderstanding and anxiety ensues. Additionally when cost of care becomes apparent, many patients opt out of procedures and treatments that they realize they cannot afford. Ultimately many of these same patients end up in the emergency room with conditions that have compounded over time, and the cost of care increases for everyone.

To say that the entire system needs to be revamped would not be an exaggeration. Transparency in health care costs is the responsibility of provider and payer organizations who need to reveal the cost of care to patients and provide options that are affordable. Nothing will change, until patients take a stand, challenge the system, demand to know what they will pay for health care and advocate for care that is equitable and equal.

Changes to Health Delivery System Key to Reducing Care Costs

With all the talk this week about Obamacare and whether or not the Supreme Court will declare the law constitutional, partially unconstitutional, or take no stand, the law will not have a measurable impact on the cost of health care delivery to patients until significant changes take place in the way the delivery system works.

There are several reasons why the cost of care has risen so radically, and there are measures that can be taken to reduce some of these costs, simply by changing patient and provider behaviors in areas such as medication adherence, fast access to care and preventive care.

Medical Adherence

One-third to one-half of patients in the U.S. do not take their medications as instructed. This leads directly to poorer health, more frequent hospitalizations, a higher risk of death and as much as $290 billion annually in increased medical costs. Non-compliance includes not taking medication on time, not sticking to the proper doses, or simply ignoring the medication by not filling the prescription, or filling it and not taking it. Reasons patients give for their non-compliance include: unpleasant side effects, confusion, forgetfulness, language barriers and feeling “too good” to need medicine. 

It is a known fact that patients with chronic conditions such as diabetes and high blood pressure are among the group less likely to follow their medication regimen. Perhaps if more providers were reimbursed based on outcome rather than on their fees for service, they would invest in the time, resources, counselling services, and necessary technology to educate patients and foster better adherence.

A study by researchers at NYU School of Medicine confirms that positive affirmation, when coupled with patient education, seems to help patients more effectively follow their prescribed medication regimen. How does that reduce costs? We know that with adherence comes better management of health issues. With better management of health issues comes fewer visits to the ER. With fewer visits to the ER comes lower cost of care because the patient who gets better by following the treatment prescribed does not need further intervention.

Access and Information

One of the most significant obstacles to improved patient care, at a reasonable cost, is access. The relative lack of real-time access to care and the absence of comprehensive patient information at the point of care are essential to improving outcome. Better access to care will lower the cost of care because patients do not have to wait to see their doctors and avoid having their health issues precipitate from an issue to a crisis. An example of that is an elderly woman who called her doctor’s office to request an immediate appointment for a rash that was painful and itchy and would not go away with topical medications. The doctor was on vacation and when the patient was finally seen several days later she was diagnosed with Shingles. Instead of a few days on an oral dose of an anti-viral medication, she ended up hospitalized for several days on IV medications, with a very severe case of shingles that had spread to several locations in her body.

The new patient-centered medical home model of care resolves some of these issues, by extending access to patients using the services of nurses, nurse practitioners, physician assistants and other well- trained professionals to deliver many basic health care services. With digital health records as a part of the medical home model, all of the patient’s information is available to all of these providers when the patient needs to be seen. This allows the physicians in the practice to focus on diagnosis and deal with the tough issues, while other competent, well trained healthcare professionals handle routine exams, coordinate follow up appointments, deliver counseling, and make sure that screen tests, vaccinations and other milestones for the patient are achieved.


Preventive Care

Prevention is clearly one of the touchstones of health care. To prevent deadly or disabling disease from occurring, or to stop it at an early stage, seems like an obvious way to cut health care costs and improve population health. Early intervention health and wellness programs are available but patients have to be willing receptors of these efforts, and providers have to spend time and energy to make these programs work. It is not an easy task. Some suggestions for carving out programs where preventive care is the focus include:

1. Doctors or their nurse practitioners or physician assistants have to provide patients with education and tools for proper weight control, fitness programs, stress reduction and relaxation techniques because we know that diet and fitness play a huge role in keeping people healthy

2. Immunizations and vaccinations need to be kept current. With the assistance of digital health records, there are no longer reasons why these should not be up to date.

3. Warnings about exposure to certain disease triggers need to be passed along to patients so they are aware of the risks when they travel or expose themselves to certain environments.

4. Doctors and patients have to engage in discussions about family history so they are aware of the genetic make up the of individual that could cause disease. Based on that information the patient needs to be sure to get certain screenings when appropriate.
Current initiatives in patient-centered care medical homes and accountable care organizations are a giant step toward collaborations between patients and physicians to jointly work toward better adherence, more immediate access and availability of information and better preventive care. These efforts will produce reductions in the cost of care but it will be a slow process.