Health Policy

Below is guest post written by a friend of the Asset Building Program, Mark Rukavina. Mark runs The Access Project and is one of the country's leding experts on medical debt and its debilitating impacts. 

If you think it is implausible that co-payments for doctor or hospital visits could increase your mortgage interest rate, think again.  Medical bills, even those that have been paid in full, can and do ruin credit and increase the cost of loans.   

The reasons for this vary.   Healthcare costs, for some, are simply unaffordable and bills go unpaid.  Others are confused by their bills and allow them to go past the due date or be sent to a collection agency.  Studies have found that American patients often do not understand claims well enough to know why they owe the bill or if it is correct.  An American Medical Association study found that one of every five claims is inaccurately processed by health insurers. 

In 2010, thirty million Americans were contacted by collection agencies for unpaid medical bills.  Research published in the Federal Reserve Bulletin found that more than half of all collection accounts on credit reports are medical in nature. 

Total healthcare spending in America amounted to $2.6 trillion in 2010.  Of this total, $300 billion was paid out of pocket, for example through deductibles and co-payment fees.   Between 2009 and 2010, the growth in out-of-pocket spending accelerated as more people switched to higher deductible plans or increased co-payments in exchange for lower premium costs.  

As out-of-pocket healthcare costs increase, people are left wondering whether they or their insurer is supposed to pay the bill.   Understandably, providers want payment in exchange for their services.  When they do not receive prompt payments, they initiate action similar to other businesses and send the bills to collection.

It is a common misconception that medical debt cannot hurt your credit score.  Collection agencies typically report medical bills to the credit bureaus and view all collection accounts as delinquent.  They do so without regard for why the bills were sent to collection. With medical collections, many people pay off the balance promptly upon hearing from a collection agency.  They are frequently surprised to find that these accounts stay on their credit report and lower their score.

Shannon Brownlee has a new piece up over at TIME Ideas. This time, it's a preview of the whole mess of information patients will soon be able to get about their doctors' financial relationships. It doesn't look pretty.

"As of this year, doctors who accept gifts and payments from drug and device makers will see their names on the web, the result of the 2010 Physician Payment Sunshine Act, one of the most controversial provisions in the health care reform law. Companies will be required to report any gift or payment to a doctor or academic researcher over $10, whether it’s in the form of stock options, speaking fees, box seat tickets, knickknacks for the doctor’s office or travel to a medical conference. Doctors will also be required to disclose payments and gifts."

While those payments don't necessarily meet the classic definition of payola (they are not a literal quid pro quo), the evidence showing its effect on prescribing habits is clear: Docs who take money from Pharma use their funders' products more often. Given the already-rampant misuse and ineffective use of prescription drugs and medical devices, that's ample reason to be concerned. When the data come out, check your doctor: you may be surprised.

Imagine yourself in front of your computer, looking up information about a drug prescribed by your doctor. Your Internet search tells you that there is a cheaper, maybe even a generic version available, but you have just paid top dollar for the brand name drug. You also learn that another treatment may be safer than the prescription you just filled. Now imagine you discover that your doctor gets paid by the manufacturer to promote the drug to other doctors.

Yes, folks, it's back! This week's Health Wonk Review is up, hosted by Julie Ferguson at Worker's Comp Insider.

This edition has stories on the promise of better IT for improving primary care, the Supreme Court and the ACA, scaremongering about neurosurgery for seniors, the Presidential candidates' financial relationships with health care companies, and more.

Check back on February 2nd for the next exciting edition of Health Wonk Review, hosted by Louise Norris at Colorado Long Term Care Insider!

Last month, an essay posted by retired physician Ken Murray called “How Doctors Die” got a huge amount of attention, some negative but mostly positive. Murray tells the story of an orthopedic surgeon who, after being diagnosed with pancreatic cancer, chose not to undergo treatment. The surgeon died some months later at home, never having set foot inside a hospital again.

Shannon Brownlee's back at TIME Ideas with a new op-ed yesterday: this one about the article we mentioned last month, called How Doctors Die. Brownlee adds more context to the first commentary, by retired physician Ken Murray, with gut-wrenching descriptions of precisely why doctors tend to avoid intense, invasive care at the end of life:

"Doctors also know that undergoing heroic measures is a lousy way to die. They’ve seen what it’s like for an elderly patient to end up in the ICU, hooked up to machines, often semiparalyzed, in pain, lying on what philosopher Sidney Hook called “mattress graves” during his own terminal illness. At a recent meeting I attended, one emergency physician tearfully admitted she didn’t think she could stand to hear the sound of ribs breaking as she perform CPR on yet another elderly patient who almost certainly would not survive."

Brownlee also mentions Angelo Volandes, a physician who's working on a series of videos illustrating what it actually means to go through various heroic efforts at extending life. We think such an effort could be incredibly valuable to patients, and will help prevent a lot of unnecessary suffering, and we applaud the project.

Conflict of interest is back in the news this week, with a new story in the Washington Monthly by medical journalist Jeanne Lenzer and Keith Epstein. The story, also reported on by the Wall Street Journal and co-published with BMJ, reports that three decisive votes on a recent FDA safety evaluation panel had financial relationships with Bayer--maker of the drugs in question.

Yaz, Yasmin, Beyaz, and Safyral are Bayer's birth control drugs that contain the hormone drospirenone. Such drugs have come under heavy fire in recent years for being unsafe. Consumers and researchers have argued that the drugs increase the likelihood of fatal blood clots, deep vein thrombosis, and other serious adverse events.

In light of those allegations, the FDA convened a panel to assess the evidence. Five or six members of that panel had financial relationships with Bayer; in what appears to be a violation or misapplication of the FDA's conflict of interest rules, they were still allowed to vote. That undermines the intent of conflict of interest rules, which should aim to protect public confidence in the FDA and avoid even the appearance of impropriety. In the end, all conflicted panelists voted that the drug was safe enough to stay on the market; if the their votes had switched, it would have reversed the 15-11 vote.

The truly absurd part of this story is the member the FDA chose to exclude from voting: consumer advocare Sidney Wolfe.  Wolfe had previously made statements critical of the drugs, and so the FDA deemed that he had an "intellectual conflict of interest." Such a charge is inane; if he was conflicted, surely any clinician who had ever prescribed (or declined to prescribe) one of the drugs would be similarly unable to vote! FDA panelists are responsible for doing exactly what Wolfe does: evaluating the evidence and coming to a conclusion. Making familiarity with the evidence a disqualifying factor is patently ridiculous and contrary to the purpose of the board.

Imagine you are sitting in first class on a plane, waiting for the plane to push off from the gate, when you see two people in uniform, the pilot and co-pilot, dash from the Jetway into the cockpit. A few seconds later, a voice comes over the intercom, saying, “This is Captain Jones, please be sure your seat belts are fastened. We’re ready for takeoff.” What crucial event could not have occurred in this scenario? The pilot and co-pilot did not go through their checklist of safety measures. Fuel tanks full? Check! Flaps up? Check!

If you ran a summer camp that never reported the vast majority of times that you hurt one of your campers, you'd probably be shut down, arrested, or worse. The situation would be similar if a restaurant repeatedly made customers sick, or if a skydiving business habitually gave people the wrong parachutes.

Why, then, do hospitals only report about one in seven of the hundreds of thousands of medical errors, infections, and other adverse events that harm patients every year? And why can they get away with it?

That's a crucial question posed by Shannon Brownlee's most recent piece on TIME Ideas: An American Hospital: The Most Dangerous Place? Brownlee addresses the recent report from the US Department of Health and Human Services, which catalogued problems with the reporting system for medical errors and other patient harm. She argues that the reporting problems are only a piece of a larger quality and safety problem, and that hospitals need to move quickly to adopt checklists and other types of safety mechanisms:

"Some hospitals have made great strides in reducing errors and infections using — you guessed it — checklists. About 10 years ago, Dr. Peter Pronovost, an intensive-care specialist at Johns Hopkins Hospital in Baltimore, and a team of colleagues put together a series of checklists for some of the most common procedures performed in the intensive-care unit. For example, they created a list of steps for how to put in a central line — a tube for delivering medication directly into a vein in the patient’s chest — in a way that reduced the risk of infection. They made a checklist to prevent patients on a ventilator, or breathing machine, from contracting pneumonia. When Pronovost was given a grant to get every ICU in the state of Michigan to use just three of his checklists, the result was 1,500 lives saved and the state of Michigan saved $100 million."

You can read the full story here: http://ideas.time.com/2012/01/09/american-hospitals-the-most-dangerous-place/

Various groups, including the Attorneys General of twenty-six states, the National Federation of Independent Businesses, and several individuals, have sued the federal government over parts of the Affordable Care Act. Specifically, they've alleged that the mandate requiring individuals to purchase health insurance is unconstitutional -- it overreaches the enumerated powers of the federal government. The case was recently accepted by the Supreme Court, with oral argument scheduled for March and a decision likely by the end of June. If the Court accepts the plaintiffs' arguments, they could strike down the individual mandate (which could create huge moral hazard problems and be catastrophic for the insurance industry) or strike down the law in its entirety.

As the excitement builds for the coming arguments, Meghan McCarthy of the National Journal issued a call for opinions and predictions on the final fate of the individual mandate. Here's our take:

The final ruling on the individual mandate is tough to forecast, but we're fairly confident that the Court will not strike it down. The challenge is based on whether Congress's power to regulate interstate commerce extends far enough to allow the federal government to require all citizens to purchase health insurance or pay a penalty.

The ruling will depend in part upon how the Court sees uninsurance: is it an active choice for an individual to go bare, in effect to self-insure, or is it due to inaction? The precise definition of action and inaction is a bit murky, but here’s how the argument goes. If going without health insurance is inaction, the Court has to deal with the messy question of whether Congress can regulate inaction when it affects interstate commerce. (Throughout the case, opponents of the Commerce Clause justification for the individual mandate have asked the government just how far Congress's power stretches. Their favorite example has been the purchase of broccoli: can Congress require everyone in the country to buy broccoli? So far, the government has not said "no" -- after all, choosing to buy, or not buy broccoli affects a whole series of interstate markets for leafy green commodities. We won't weigh in on the validity of that argument, but we agree with the Cato Institute's Ilya Shapiro that the government's inability to establish a limiting principle for the Commerce Clause may prove problematic when this argument reaches the Supreme Court.

We actually don't think the case needs to address the issue of action versus inaction at all. In the case of health care and health insurance, there simply is no inactive choice. Going without health insurance is inherently different from going without broccoli, because everyone has some interaction with the health care system at some point. Even if you choose not to buy health insurance, there is a good chance that you will need health care at some point. You are in a car accident, you get brain cancer, you fall down your stairs and break your leg. Since virtually everyone will, at some point, need  health care (and must therefore have a way to pay for it), choosing to go without private or public insurance is, in fact, choosing to self-insure. Since choosing self-insurance is an action that affects interstate commerce, it's clearly within Congress's power to regulate.

Alternatively, the Court might just accept the notion that the mandate is a tax (since its only enforcement mechanism is a penalty), in which case it is unambiguously within Congressional power. That might be more palatable to Justices uncomfortable with striking down the law, but who also don't believe in the expansive Commerce Clause power that the government's position implies.