The Impact of ACA on Business Costs

Robear wrote:

I don't understand. Why not go with your state insurance exchange? It should be online before then, it's only 6 weeks before the deadline. You won't need to go back to a company to get access to good, decently priced insurance. That's the whole *idea* of the ACA....

And of course, at that time, the pre-existing condition denials go away too.

I was saying that if the republicans had swept and they repealed ACA as they had promised.

Ah. Makes more sense now. I'm hopeful things will turn out well, but we'll see. So far we've seen some adjustments to policy, I'm sure there will be more.

double post

Robear wrote:

I realized I should have posted this timeline. Part of what comes in next year is an increase in Medicaid preventive care, AND an increase in pay for doctors handling that work (thus, hopefully, bringing more doctors into that area of service.) In 2015, physician pay will be based on outcomes rather than individual services provided.

Welcome to my world and coincidentally my job. There is some major stuff coming down the pike but there's a lot of disagreement on whether it will happen on time or be be pushed back.

First, the transition for the ICD-9 coding system to the ICD-10 coding system. The existing system of billing for medical costs is absurdly archaic. The old ICD-9 set has about 13000 codes that are 3-5 characters in length. The new system, ICD-10 will have approximately 68,000 available codes 3-7 characters in length. This is a HUGE transition because the current system doesn't give providers and accurate method of billing. The amount of human resources time it takes to manage is extreme. An example the AMA provided:

Issues today with the ICD-9 diagnosis and procedure code sets are addressed in ICD-10. One concern today with ICD-9 is the lack of specificity of the information conveyed in the codes. For example, if a patient is seen for treatment of a burn on the right arm, the ICD-9 diagnosis code does not distinguish that the burn is on the right arm. If the patient is seen a few weeks later for another burn on the left arm, the same ICD-9 diagnosis code would be reported. Additional documentation would likely be required for a claim for the treatment to explain that the burn treated at this time is a different burn from the one that was treated previously. In the ICD-10 diagnosis code set, characters in the code identify right versus left, initial encounter versus subsequent encounter, and other clinical information.

Second, the Center for Medicaid Services (CMS) is on mission to push reimbursement down by as much as 30%. There was an extensive report that was issued by the GAO earlier this year on the problems due to a lack of pricing transparency. CMS is on the warpath because Medicaid is currently paying around $20 billion per year in clinical areas and the lack of pricing transparency is killing them. There are variances as large as $4000 on identical procedures and if the industry doesn't fix this they will.

Finally, well not finally but most importantly, they are moving the system of health reimbursement from a quantity based system to a quality based systems. The first piece is Value based purchasing which requires providers to submit "quality" data back to CMS. The better the patient care you provide, the more they'll get paid. Other initiatives like Meaningful Use will add to this.

As consumers of health care we should be ecstatic about the changes that are coming. The providers are freaking out because they've NEVER been required to divulge the type of data they're not going to have to report.

I agree, Bear. I've heard a lot of this in bits and pieces with CMS personnel (who, by the way, are by no means lazy, incompetent bureaucrats, but rather really *are* concerned with saving money. Even the mainframe guys are being pressured to explain their budget, which for *any* mainframe shop is totally anathema. CMS's mission is being transformed, and they are embracing that change.

One thing I'd like to see though is legislative changes to allow (and better control) the sharing of medical records via electronic networks. HIPAA is too restrictive to be useful for bulk transfers, in my opinion, and while NHIN is technically functional, legally I'm not sure it's left the barn.

What's interesting is watching the various IT organizations gear up for all the Quality reporting and tracking and the associated big data work. And that's not even fraud, it's much more basic. The ACA may not be perfect, and it may not go far enough, but it's for damn sure a step in the right direction.

Bear wrote:
Robear wrote:

I realized I should have posted this timeline. Part of what comes in next year is an increase in Medicaid preventive care, AND an increase in pay for doctors handling that work (thus, hopefully, bringing more doctors into that area of service.) In 2015, physician pay will be based on outcomes rather than individual services provided.

Welcome to my world and coincidentally my job. There is some major stuff coming down the pike but there's a lot of disagreement on whether it will happen on time or be be pushed back.

First, the transition for the ICD-9 coding system to the ICD-10 coding system. The existing system of billing for medical costs is absurdly archaic. The old ICD-9 set has about 13000 codes that are 3-5 characters in length. The new system, ICD-10 will have approximately 68,000 available codes 3-7 characters in length. This is a HUGE transition because the current system doesn't give providers and accurate method of billing. The amount of human resources time it takes to manage is extreme. An example the AMA provided:

Issues today with the ICD-9 diagnosis and procedure code sets are addressed in ICD-10. One concern today with ICD-9 is the lack of specificity of the information conveyed in the codes. For example, if a patient is seen for treatment of a burn on the right arm, the ICD-9 diagnosis code does not distinguish that the burn is on the right arm. If the patient is seen a few weeks later for another burn on the left arm, the same ICD-9 diagnosis code would be reported. Additional documentation would likely be required for a claim for the treatment to explain that the burn treated at this time is a different burn from the one that was treated previously. In the ICD-10 diagnosis code set, characters in the code identify right versus left, initial encounter versus subsequent encounter, and other clinical information.

Second, the Center for Medicaid Services (CMS) is on mission to push reimbursement down by as much as 30%. There was an extensive report that was issued by the GAO earlier this year on the problems due to a lack of pricing transparency. CMS is on the warpath because Medicaid is currently paying around $20 billion per year in clinical areas and the lack of pricing transparency is killing them. There are variances as large as $4000 on identical procedures and if the industry doesn't fix this they will.

Finally, well not finally but most importantly, they are moving the system of health reimbursement from a quantity based system to a quality based systems. The first piece is Value based purchasing which requires providers to submit "quality" data back to CMS. The better the patient care you provide, the more they'll get paid. Other initiatives like Meaningful Use will add to this.

As consumers of health care we should be ecstatic about the changes that are coming. The providers are freaking out because they've NEVER been required to divulge the type of data they're not going to have to report.

God. ICD9 to ICD10 Meaningful Use and the new AMA CPT codes for 1/2013 are all hells I'm in right now.

Robear wrote:

One thing I'd like to see though is legislative changes to allow (and better control) the sharing of medical records via electronic networks. HIPAA is too restrictive to be useful for bulk transfers, in my opinion, and while NHIN is technically functional, legally I'm not sure it's left the barn.

What's interesting is watching the various IT organizations gear up for all the Quality reporting and tracking and the associated big data work. And that's not even fraud, it's much more basic. The ACA may not be perfect, and it may not go far enough, but it's for damn sure a step in the right direction.

One thing I'm seeing at the hospital level is that the IT departments are getting HUGE budgets to build the infrastructure that will be necessary to provide the reports to CMS. The bottom line is, if you don't report you don't get paid. I think the pressure to provide EMR is going to follow once that infrastructure has been laid.

One of the goals is to get healthcare providers in the US to practice science based medicine. The ACA, CMS, EMR etc are the catalysts that will push medicine into the next century.

And for anyone that thinks that the ACA and it's provisions will destroy society, Oregon went live a couple of months ago with the ACA model. I haven't heard that the state is on fire so I'm going to assume it wasn't the end of the world.

Bear wrote:

And for anyone that thinks that the ACA and it's provisions will destroy society, Oregon went live a couple of months ago with the ACA model. I haven't heard that the state is on fire so I'm going to assume it wasn't the end of the world.

but... but... SOCIALISM!!!

I heard an interesting discussion with economist John Cochrane on Econtalk this morning about the paper he wrote last month, 'After the ACA: Freeing the Market for Health Care' (pdf warning). The paper is definitely worth a read as well.

Cool post on Metafilter today on the true costs of health care. Good 10 minute version of the talk by the guy here:

Interesting video on the true costs of healthcare. I would have liked the ACA better if it made law of the concept that if someone is self-pay that they pay the medicare or medicaid rate.

The legal obligation to pay the highest quoted cost for paying with cash is immoral. The ROI on a cash customer is very high even if they only pay the same reimbursement as the insurance companies.

The game is even worse than the good doctor describes in the video. My favorite is when the insurance company calls on the last day of the quarter and guarantees a wire transfer if an additional 20% to 30% are cut off a bundle of bills. Otherwise, they will pay in the next quarter.

If car insurance worked liked health insurance, we would all be driving big SUVs and only paying $20 per tank of gas. Of course, we would complain about our skyrocketing premiums.

Greg wrote:

If car insurance worked liked health insurance, we would all be driving big SUVs and only paying $20 per tank of gas.

Um, what? Your analogy makes no sense whatsoever.

If car insurance worked like health insurance, then car insurance would cover preventative maintenance (like, say, replacing older batteries with newer ones that are safer and more efficient), general upkeep (another example, replacing brakes, struts, etc when they begin to wear down sufficiently that they are cause for concern), and emergency repairs (your alternator/transmission/etc busted and needs replacement, or you got in a car accident and your car needs reconstructive surgery).

However, you wouldn't actually have a choice of car insurer, because car insurance would be prohibitively expensive without going through an employer, and your employer would be giving you a choice of maybe 2 or 3 policies, most likely all from one insurer. If you tried to pick up car insurance on your own, and you had any kind of serious accidents on your record, they could deny you coverage under a pre-existing accident clause.

You also wouldn't be able to choose what auto mechanic to go to -- your insurer would give you a list of "in-network" mechanics, and anyone outside of network would only be covered by a certain smaller amount, if at all. And even then, when your mechanic said you needed, say, new tires, your insurer would have a limited list of tires you could pick from, and anything else you would have to just pay out of pocket. Hope you like going with the cheapest auto parts possible, regardless of quality!

Finally, if you travelled too many miles per year, or had any kind of tickets on your record (yes, even parking tickets), say hello to severely increased premiums! And gas wouldn't be covered, that's an over-the-counter treatment, so too bad.

Don't forget that in this imaginary world, if your car broke down and you didn't fix it you would die. Kind of an important difference about health care.

Getting an oil change would need an appointment weeks ahead of time for the privilege to wait 5 hours to see a certified mechanic just so he can sign off on it as being "required maintenance" and then refer you to an oil and lubrication specialist, followed by another couple of weeks wait for the next appointment. The oil change bill will be hundreds of dollars, but don't worry, you won't pay most of that, but you will have to fight for hours with the billing department over the co-pay.

And, suddenly, you find out that the proprietary fuel valve that needs to be replaced is no longer covered, because it's been deemed cosmetic.

So fun fact. I am in a now 3 year old billing dispute with the local hospital system over blood work from a Physical due to a computing error with my GP. I had until I was let go this Spring one of those Cadillac insurance plans you all read about. I liked my doctor fine. But the women handling the books bungled up royally.

In this instance my blood work should have been billed as part of my physical. But the doctor billed it separately, and as such it looked to my insurer that it was a 2 part physical (not covered). To the tune of 210 dollars I was sent the bill in error. I made phone calls, and sent letters, but the bill shows up quarterly still. The last resort is to pay a bill I should not have to, or wait for it to get sent to collections and show up on my credit report to dispute and remove. This story is very common among people in my area with this same hospital and physician network.

Earlier in this year I had to wait for it to show up on my credit report for 4 visits to a Psychiatrist that were covered, but were billed in error to the tune of $200 a visit, rather than my $30 co-pay.

mwdowns wrote:

Cool post on Metafilter today on the true costs of health care. Good 10 minute version of the talk by the guy here:

That video is a great explanation of why market forces simply aren't working right in our current system. When no individual involved knows the actual cost of anything because it's so obfuscated, nobody can make rational choices which would drive costs down and improve outcomes for patients.

I ran across an article today (in the WaPo, I think) that mentions that there has been little information provided to the public on what's implemented, and what's coming. That could endanger the mass participation in the ACA which is necessary for it's fiscal success. It seems that when the Administration started doing public outreach and PR to educate the public last year, Republicans accused them of using government money for political purposes. The article mentioned that Kathleen Sibelius has been subpoenaed to explain spending on benefits explanations before a Congressional panel...

Yes, we've gotten to the point where telling people what benefits they can expect is being attacked by Republicans as using government money for partisan purposes.

Robear wrote:

I ran across an article today (in the WaPo, I think) that mentions that there has been little information provided to the public on what's implemented, and what's coming. That could endanger the mass participation in the ACA which is necessary for it's fiscal success. It seems that when the Administration started doing public outreach and PR to educate the public last year, Republicans accused them of using government money for political purposes. The article mentioned that Kathleen Sibelius has been subpoenaed to explain spending on benefits explanations before a Congressional panel...

Yes, we've gotten to the point where telling people what benefits they can expect is being attacked by Republicans as using government money for partisan purposes.

I think perhaps the biggest failure of Obamacare is the confused (or sometimes completely absent) messaging about it. Having most of the goodies take effect only after the election was also a massive error on the part of the Democrats, and it allowed the GOP to focus messaging almost exclusively on the aspects that were raising costs (since few people had yet received any tangible benefit from Obamacare).

People need to know what Obamacare means for them and how it will impact them individually. The insurance exchanges will need to play a huge part in guiding the currently uninsured people to where they need to be, but 1) they don't exist yet and 2) currently uninsured people still need to be made aware that they need to seek out these exchanges. Public awareness of the practical ramifications of the ACA is shockingly low in my experience.

Per those seething anti-capitalists at Forbes, it looks like Papa John was right about the ACA damaging his business, just not in the manner he expected:

http://www.forbes.com/sites/rickunga...

See? Let the market decide!

Tanglebones wrote:

Per those seething anti-capitalists at Forbes, it looks like Papa John was right about the ACA damaging his business, just not in the manner he expected:

http://www.forbes.com/sites/rickunga...

As much as I enjoy seeing someone get bit in the backside for doing such a thing, I have to wonder what the actual significance and impact really is, here. That site/index is just a rating of public perception, which certainly has an impact on business, but has this actually hit PJ's bottom line?

Bloo Driver wrote:
Tanglebones wrote:

Per those seething anti-capitalists at Forbes, it looks like Papa John was right about the ACA damaging his business, just not in the manner he expected:

http://www.forbes.com/sites/rickunga...

As much as I enjoy seeing someone get bit in the backside for doing such a thing, I have to wonder what the actual significance and impact really is, here. That site/index is just a rating of public perception, which certainly has an impact on business, but has this actually hit PJ's bottom line?

Hard to say until they publish their quarterlies, but it looks like it has dropped the bottom line for the Red Lobster parent company.

It is just because that pesky 47% would rather blame Papa Johns than take responsibility for themselves.

I really want to know what Peyton Manning has to say about all this. He seems like such a stand up guy who would not go along with this.

Bloo Driver wrote:
Tanglebones wrote:

Per those seething anti-capitalists at Forbes, it looks like Papa John was right about the ACA damaging his business, just not in the manner he expected:

http://www.forbes.com/sites/rickunga...

As much as I enjoy seeing someone get bit in the backside for doing such a thing, I have to wonder what the actual significance and impact really is, here. That site/index is just a rating of public perception, which certainly has an impact on business, but has this actually hit PJ's bottom line?

Well, we're eating Larosa's now rather than PJ's. As a general rule, if a company is going to be a prat about their political beliefs or have really socially unacceptable views and act on them (Chick'Fil'A), my wife and I will find a replacement. Nothing will replace that chicken, but pizza? It's a wheel of cheese (and wings, usually) that we buy when we're too lazy to cook. There was nothing special about PJ's pizza, so dropping him for a more local chain was fine by us.

Are we proof of an overarching trend? Hardly, but we're certainly customers who were regulars who are now never-agains. And now we're eating pizza that is MUCH better, surprise!

Demosthenes wrote:

. And now we're eating pizza that is MUCH better, surprise! :D

We only ate PJ when there was no local place. Havent had it years. Welcome to better pizza.

Getting worse pizza than Papa John's, now [em]that[/em] takes effort.

Problem being, Cincinnati isn't really known for its pizza scene. At least not on the east side of town before you're officially out of the city limits. Papa Johns and Dominos and the more local Larosa's are really the only places that deliver. I mean, if you gotta go pick it up, you might as well go to Skyline or something instead.

fangblackbone wrote:

I really want to know what Peyton Manning has to say about all this. He seems like such a stand up guy who would not go along with this.

As the new owner of 21 Papa John franchises in the Denver-area, I imagine he's a bit conflicted. Then again, he's probably just counting all the cash thanks to Colorado's new weed law.

Demosthenes wrote:

Problem being, Cincinnati isn't really known for its pizza scene. At least not on the east side of town before you're officially out of the city limits. Papa Johns and Dominos and the more local Larosa's are really the only places that deliver. I mean, if you gotta go pick it up, you might as well go to Skyline or something instead. :D

Dewey's Pizza. It's totally worth the drive.

OG_slinger wrote:
fangblackbone wrote:

I really want to know what Peyton Manning has to say about all this. He seems like such a stand up guy who would not go along with this.

As the new owner of 21 Papa John franchises in the Denver-area, I imagine he's a bit conflicted. Then again, he's probably just counting all the cash thanks to Colorado's new weed law.

Is he going to start selling pizza with some new, delicious, previously unavailable toppings?