The Reality of Health Care Cost

Brian Klepper

BK 711This beautifully written letter was forwarded after an interview with me on health care cost appeared in a Florida newspaper.

Many of us with coverage often think in abstract terms about working families that do not have access to employer-sponsored coverage, and that must shoulder the overwhelming burden of costs on their own. As Mrs. Doss describes, health care costs dominate her family’s economic life and drive many of their most important decisions.

Continue reading “The Reality of Health Care Cost”

A Broader Approach To Managing Health Care Risk

Brian Klepper

Posted 2/15/13 on Medscape Connect’s Care & Cost Blog

BK 711Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.

The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.

The Complexity of Health Care Risk

The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.

Continue reading “A Broader Approach To Managing Health Care Risk”

Them, Not Us

Brian Klepper

Posted 1/7/13 on Medscape Connect’s Care and Cost Blog

“How many businesses do you know that want to cut their revenue in half? That’s why the healthcare system won’t change the healthcare system.”

Rick Scott, Governor of Florida
Former CEO, Hospital Corporation of America
Quoted by Vinod Khosla at the Rock Health Innovation Summit in August (video here)

BK 711ahip-logoThe Washington Post recently reported that health plan lobbyists, charts at the ready, are working to convince legislators that unreasonable health care costs are everyone else’s fault. Karen Ignagni, the Executive Director of America’s Health Insurance Plans (AHIP) declared: “If you’re going to have a debate and discussion about what’s driving health care costs, you have to get under the hood.”

Her first argument is that many practices of doctors, hospitals, drug, device and health information technology firms make health care cost more than it needs to be. This is well-documented and true. But her second, that health plans are different than the rest of the industry, and that they do not negatively influence care or cost, is pure marketing.

Continue reading “Them, Not Us”

When Employers Collaborate To Manage Health Care Costs

Brian Klepper

Published 12/09/12 in the Eau Claire, WI Leader-Telegram

Note from Brian: This piece appeared last weekend in the Eau Claire, WI newspaper, and was written with the encouragement of employers in that community who, rightly, believe they’ve been raked over the coals on their health care costs.

This argument is mainly directed at other employers, as a way of explaining that there are alternatives. That said, the dynamics described here occur in almost every community in the country.

BK 711Even compared to national health care cost growth that has skyrocketed nearly 4 times as fast as general inflation for more than a decade, Wisconsin stands out and northwest Wisconsin stands out more. Eau Claire’s health care cost burden is a whopping 16 percent higher than the national average. This is pricing many individuals and employers out of the coverage market and sapping the region’s economic vitality and competitiveness.

As Robert Kraig meticulously details in Citizen Action’s Wisconsin Health Insurance Cost Rankings 2012, Eau Claire is Wisconsin’s second-highest cost health care market, with 2011 monthly premiums of $750.46, 9.1% higher than the state average of $687.68. (La Crosse is 1st, only a hair higher at $756.70.)

Continue reading “When Employers Collaborate To Manage Health Care Costs”

Walmart Moves Health Care Forward Again

Brian Klepper

Posted 10/12/12 on Medscape Connect’s Care & Cost Blog

Walmart. Save Money. Live Better.Walmart’s sheer size makes almost any of their initiatives newsworthy. That said, despite being a lightning rod for criticism on employee benefits and health care, they have introduced initiatives with far-reaching impacts. Their generic drug program began in September 2006 – more than 300 prescription drugs for $4/month or $10 for a 90-day supply – and was widely emulated, disrupting retail drug markets and generating immense social benefit. Imagine the difference it made to a lower middle class diabetic who had been paying more than $120 per month for medications, and suddenly could get them for about $24.

Yesterday Walmart announced that “enrolled associates” – covered workers and their family members – needing heart, spine or transplant surgeries could receive care with no out-of-pocket cost at 6 prominent health systems around the country: Mayo Clinics (Rochester, MN and Jacksonville, FL); Cleveland Clinic (Cleveland, OH); Geisinger Clinic (Danville, PA); Mercy Hospital Springfield (Springfield, MO); Scott & White Memorial Hospital (Temple, TX); and Virginia Mason Medical Center (Seattle, WA).

Continue reading “Walmart Moves Health Care Forward Again”

Why Medical Management Will Re-Emerge

Brian Klepper

Posted 7/31/12 on Medscape Connect’s Care and Cost

Several years ago I had dinner with a woman who had served in the late 1990s as the national Chief Medical Officer of a major health plan. At the time, she said, she had developed a strategic initiative that called for abandoning the plan’s utilization review and medical management efforts, which had produced heartburn and a backlash among both physicians and patients. Instead, the idea was to retrospectively analyze utilization to identify unnecessary care.

This was at the height of anti-managed care fervor. A popular movie at the time, As Good As It Gets, cast Helen Hunt as the mother of a sick kid. When someone mentioned an HMO, Ms. Hunt’s character let fly a flurry of expletives. America’s theater audiences exploded in applause.

Continue reading “Why Medical Management Will Re-Emerge”

Whatever It Is, It’s Not Insurance

Tom Emerick

Posted 5/9/12 on Cracking Health Costs

Discussions about covering “pre-existing” health conditions occur frequently among health policy people. One frequent thread is that health insurers should not be allowed to deny coverage to people with pre-existing health condition. After all, aren’t those the people who need health insurance the most?  Sounds reasonable, doesn’t it?  Problem is that proposition is really not reasonable.

Let me explain.  For any kind of insurance to work right, the “contingent event” can not have already happened before you buy it.  In life insurance, the contingent event is the death of the policyholder.  You can’t buy life “insurance” on someone who has already died.  For homeowners insurance, you can’t buy fire insurance after the home has burned.

Continue reading “Whatever It Is, It’s Not Insurance”