Are they taking advantage of us?

Are they taking advantage of us?

Have You Ever Felt You were Taken Advantage of by a Hospital or Insurance Company? – Direct Care Models exist as a Solution to High-Cost Primary Care and can Work for Surgical and Specialty Care too.

Gallup Polls suggest that in Sept of 2020, upwards of 50% of Americans feared bankruptcy due to medical bills (link).  As of April 2021, 21 million Americans have a collective $140 billion in medical debt (link).  In fact, of the 500,000+ Americans that file bankruptcy, due to medical bills every year, approximately 60% of them have health insurance.  Further, medical bills are now the number one cause of bankruptcy in America.

The United States spends more than any country on medical costs, now approximating 18+% of our gross domestic product.  According to the Kaiser Family Foundation (KFF) that translates to $11,000 being spent on health care per person, and yet our health outcomes are worse than many of the top industrialized countries in the world.

There are many reasons for the rise in costs of healthcare in the United States: the corporatization of medicine resulting in a 4000+% increase in the number of administrators since 1980, lack of transparency in pricing, vertical integration of big business insurance companies, and profiteering middlemen such as group purchasing organizations and pharmacy benefits managers to name a few.  

In fact, United Health Group Subsidiary OptumHealth is now the highest volume owner of Physicians, approaching 60,000.  Further, according to pharmacy benefits managers CVS Health, Express Scripts, and OptumRx control approximately 77% of the market share and happen to be owned by Aetna, Cigna, and United Health Group respectively (link).

Currently, there are over 1000 Direct Primary Care (DPC) Practices across 48 states and the District of Columbia.  DPC became a way for Primary Care Physicians to combat the shrinking reimbursement from insurers and the government which lead to the “Physician Hamster Wheel”, this phenomenon where Physicians have to try to see more and more patients in shorter and shorter periods of time to counteract the small amounts of money they are being compensated for their time and expertise.  The physician hamster wheel further harms patients because they are unable to spend larger amounts of quality care time with their healer which leaves them with just a few minutes to attempt to get solutions to their health problems.  This is especially important in elderly populations whom we know have more health problems and more severe diseases.

Inherent in DPCs success is transparent and direct pricing coupled with more direct access to your Physician.  For a small ($50-100) monthly fee patients can get direct access to their physician via phone, text, telehealth, unlimited office visits and can even get access to wholesale labs and medications in their membership cost.  Physicians, in this model, have been able to cut out the middlemen and get back to direct relationships with their patients leading to increased satisfaction in both patients and their healers.

For surgeons and specialists, this is more complex because expensive testing and treatments or surgery are often needed.  That was at least until approximately 15 years ago when the Surgery Center of Oklahoma (link) started posting upfront transparent prices on their website.  Their goal at the time and to this day is to provide the highest quality of care for reasonable and transparent prices (link).  This has created a movement, and the founding of the Free Market Medical Association (FMMA) and other surgical centers like Texas Free Market Surgery and Wellbridge Surgical in Indiana have begun to push this even further.

The thought process is simple enough, removing the inflated prices from hospitals and insurance companies from the equation of You + Your Doctor = Medical Care.  If we can achieve care that is still of equal or higher quality, but less than your premiums, copay, deductible, and or co-insurance costs then that is real value back in a patient’s pocket rather than in the pockets of the CEOs or shareholders of some major health organization. This is especially important given that data shows that roughly 60% of Americans have less than $1,000 in savings.  Further, when you analyze the recent data from the KFF showing that over the past 10 years from 2010-2020 wages have only gone up approximately 8% (when controlled for inflation) but family premiums have risen 55% and deductibles have risen 111% (link).

Clearly, the expenses to do procedures are higher than your average primary care visits.  However, without middlemen and inflated prices which are aided by a lack of transparency, these costs can be minimized, and the difference returned to patients.  What is truly astounding, is that when you combine data on the average family and individual premiums from the KFF with data from on the average deductibles we find that in the conventional system individuals are paying $11,834 and families are paying $29,781 out of pocket before they ever get any care.

They spend $11,834 or $29,781 for no value return.  No car.  No vacation.  No down payment on a house.  Just the access to insurance “coverage” that may or may not actually cover your medical care should you need it.  In fact, then-presidential candidate Hillary Clinton stated the following at the 2007 SEIU debates, “Insurance companies make money by spending a lot of money and employing a lot of people to try to avoid insuring you, and then if you are insured to try to avoid paying for the care you receive.”

For many it may not seem like quite these high sums, however, when you really start to do the math, we find that 70% of our employer-sponsored insurance premiums are being “paid” by our employers.  However, when you truly look at where that money is coming from, it is part of employee compensation.  This means that this money would otherwise be due to you as an employee as a part of your salary but is instead being diverted to big business health insurers who are making billions of dollars in annual profits.         

Financial education is a foundation of a successful life for all Americans; however, it is one that is sorely missing in the lives of many.

The next level deeper is financial education regarding the costs of medical care which is a problem plaguing the entire system on both the patient and the healer side.  To many, an Insurance Card is seen as an “Easy Button” to walk into a clinic, surgery center, or hospital and have our care paid for.  Unfortunately, that style of ignorance only leaves us all chained to the beast and exposed to non-transparent prices, deception, and greed.  In the current system patients are being given more and more of the burden of the costs of care with rising premiums and deductibles, and as we are sure you have noticed the service isn’t getting any better for these rising costs.  In fact, you are spending less and less time with your healer due to the physician hamster wheel phenomena we discussed earlier.    

In September of 2020, then President Trump signed an executive order requiring hospitals to post transparent prices for the most common 300 procedures, lab tests, outpatient visits, and more that they perform in order to help patients shop around and find the best price for their care (link).  Unfortunately, given the small sum of the civil fines, $300 per day or $110,000 per year, that are levied against hospitals for non-transparency many of them are still playing games.  

In fact, as of July 2021, a full six months after this rule was put into place, only approximately 5.6% of the 500 hospitals evaluated were in compliance with the new rules according to a study by Patient Rights Advocate (link).  As exemplified, when comparing the millions to billions of potential lost revenues that could occur if hospitals were fully compliant $110,000 doesn’t seem enough to make a major change in the system.  

In November 2021 President Biden strengthened this ruling with increased fines up to $2 million dollars and further clarified that hospitals would need to remove special coding that they had used to prevent their price lists from being indexed on google searches with the outcome of this yet to be determined (link).  I consider myself a realistic optimist so I would love to think that hospitals are going to comply, and this will allow patients to truly see upfront costs and be able to pick and choose where to get care.  Unfortunately, the realist in me has a gut feeling that they will still pay the fines and hide their prices because they are making way too much money in the current system.  

Lack of transparency allows for inflated prices and the mark-up discount game to be played by hospitals and insurers, like many retail stores.  Inflate the prices and give some but not all discounts.  Even at the discounted prices often people are still paying more than what true market price would dictate.  Further, I am less than optimistic because Pharmaceuticals, Hospitals, Insurers, and other big business medical lobbies spent an astounding $750 million dollars in 2020 alone to line the pockets of politicians and protect their interests.   

Direct Surgical and Specialty Care can work and can provide patients with the Highest Quality lowest reasonable cost care on the market.  However, physicians and healers must be able to understand the finances of the cost of care and must be able to deliver a transparent up-front price.  Furthermore, patients must embrace a major mindset shift, take back control of their health and finances, and obtain a medical care financial education to best understand how to break free from the insurance system and still protect themselves and their loved ones.  

Surgeons and Specialty Care Physicians are up to this challenge and are motivated, like never before, to create efficient direct relationships with their patients again.  From a financial standpoint this would be a huge step in the right direction of re-embracing our oath “Premium Non-Nocere” (First Do No Harm) which Keith Smith MD, Founder of the FMMA and Surgery Center of Oklahoma has been quoted as including financial harm saying, “How can we take an oath to treat a patient, and allow their lives to be financially ruined?”

The great investor and businessman Warren Buffett has been quoted as saying “Some of the most prominent members of communities are on hospital boards, and they are pretty happy with the way things are going.”  Unfortunately, as I mentioned above, I am not certain that any amount of government regulation or influence will change this problem.  After all the government is one of the biggest reasons, we are here in the first place.  These out-of-control health care costs started with the wage freezes during World War II, continuing with the IRS allowing health benefits to be tax-deductible, strengthened by the HMO Act of 1973 and more recently the Affordable Care Act 2010.  All have pushed us further and further away from the direct relationship-based high-quality care lowest reasonable cost care between you and an independent physician.  As of 2021 70% of physicians are now employees to big business hospitals, insurers, private investing groups, or etc. rather than being independent owners of their practices, to serve you without outside influence.  

These corporations didn’t take an oath to do no harm, only your healers did.  

Oddly enough your healers are the only ones who provide you value in terms of actual medical care, the big businesses involved are only there for profit.  Hence, why these prominent community folks are happy about the way the current system is, massive profits.  

The reason that Direct Surgical Care and Direct Specialty care can work and will be the wave of the future is that it’s a return to simpler days with direct transactions, lower costs and relationship-based medicine to heal your body and mind.  Direct care and Lower costs mean more money in the pockets of Americans across the country, rather than in the pockets of billion-dollar corporations.  It will not be easy, and it will take uncomfortable action from patients and healers alike, but if the patients and the healers stand together, the game is over for big business medicine.

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