Majority of debtors to US hospitals now people with health insurance

Jessica Glenza

The Guardian

Originally posted 11 Jan 24

People with health insurance may now represent the majority of debtors American hospitals struggle to collect from, according to medical billing analysts.

This marks a sea change from just a few years ago, when people with health insurance represented only about one in 10 bills hospitals considered “bad debt”, analysts said.

“We always used to consider bad debt, especially bad debt write-offs from a hospital perspective, those [patients] that have the ability to pay but don’t,” said Colleen Hall, senior vice-president for Kodiak Solutions, a billing, accounting and consulting firm that works closely with hospitals and performed the analysis.

“Now, it’s not as if these patients across the board are even able to pay, because [out-of-pocket costs are] such an astronomical amount related to what their general income might be.”

Although “bad debt” can be a controversial metric in its own right, those who work in the hospital billing industry say it shows how complex health insurance products with large out-of-pocket costs have proliferated.

“What we noticed was a breaking point right around the 2018-2019 timeframe,” said Matt Szaflarski, director of revenue cycle intelligence at Kodiak Solutions. The trend has since stabilized, but remains at more than half of all “bad debt”.

In 2018, just 11.1% of hospitals’ bad debt came from insured “self-pay” accounts, or from patients whose insurance required out-of-pocket payments, according to Kodiak. By 2022, the proportion who did (or could) not pay their bills soared to 57.6% of all hospitals’ bad debt.

The info is here.

The US Healthcare system needs to be fixed:

Not all health insurance plans are created equal. Many plans have narrow networks and limited coverage, leaving patients responsible for costs associated with out-of-network providers or specialized care. This can be particularly detrimental for people with chronic conditions or those requiring emergency care.

Medical debt can have a devastating impact on individuals and families. It can lead to financial hardship, delayed or foregone care, damage to credit scores, and even bankruptcy. This can have long-term consequences for physical and mental health, employment opportunities, and overall well-being.

Fixing the US healthcare system is a complex challenge, but it is essential to ensure that everyone has access to affordable, quality healthcare without fear of financial ruin. 

Private equity is buying up health care, but the real problem is why doctors are selling

Yashaswini Singh & Christopher Whaley

The Hill

Originally published 21 Dec 23

Here is an excerpt:

But amid warnings that private equity is taking over health care and portrayals of financiers as greedy villains, we’re ignoring the reality that no one is coercing individual physicians to sell. Many doctors are eager to hand off their practices, and for not just for the payday. Running a private practice has become increasingly unsustainable, and alternative employment options, such as working for hospitals, are often unappealing. That leaves private equity as an attractive third path.

There are plenty of short-term steps that regulators should take to keep private equity firms in check. But the bigger problem we must address is why so many doctors feel the need to sell. The real solution to private equity in health care is to boost competition and address the pressures physicians are facing.

Consolidation in health care isn’t new. For decades, physician practices have been swallowed up by hospital systems. According to a study by the Physicians Advocacy Institute, nearly 75 percent of physicians now work for a hospital or corporate owner. While hospitals continue to drive consolidation, private equity is ramping up its spending and market share. One recent report found that private equity now owns more than 30 percent of practices in nearly one-third of metropolitan areas.

Years of study suggest that consolidation drives up health care costs without improving quality of care, and our research shows that private equity is no different. To deliver a high return to investors, private equity firms inflate charges and cut costs. One of our studies found that a few years after private equity invested in a practice, charges per patient were 50% higher than before. Practices also experience high turnover of physicians and increased hiring of non-physician staff.

How we got here has more to do with broader problems in health care than with private equity itself.

The info is here.

Here is my summary, which is really a warning:

The article dives into the concerning trend of private equity firms acquiring healthcare practices. It argues that while this might seem concerning, the bigger issue lies in understanding why doctors are willing to sell their practices in the first place.

The author highlights the immense financial burden doctors shoulder while running their own practices. Between rising costs and stagnant insurance reimbursements, it's becoming increasingly difficult for them to stay afloat. This, the article argues, is what's pushing them towards private equity firms, who offer immediate financial relief but often come with their own set of downsides for patients, like higher costs and reduced quality of care.

Therefore, instead of solely focusing on restricting private equity involvement, the article suggests we address the root cause: the financial woes of independent doctors. This could involve solutions like increased Medicare payments, tax breaks for independent practices, and alleviating the administrative burden doctors face. Only then can we ensure a sustainable healthcare system that prioritizes patient well-being.

Big Pharma gives your doctor gifts. Then your doctor gives you Big Pharma’s drugs

Nicole Van Groningen
The Washington Post
Originally posted June 13, 2017

Here is an excerpt:

The losers in this pharmaceutical industry-physician interaction are, of course, patients. The high costs of branded drugs are revenue to drug companies, but out-of-pocket expenses to health-care consumers. Almost a quarter of Americans who take prescription drugs report that they have difficulty affording their medications, and the high costs of these drugs is a leading reason that patients can’t adhere to them. Most branded drugs offer minimal — if any — benefit over generic formulations. And if doctors prescribe brand-name drugs that are prohibitively more expensive than generic options, patients might forgo the medications altogether — causing greater harm.

On a national scale, the financial burden imposed by branded drugs is enormous. Current estimates place our prescription drug spending at more than $400 billion annually, and branded drugs are almost entirely to blame: Though they constitute only 10 percent of prescriptions, they account for 72 percent of total drug spending. Even modest reductions in our use of branded prescription drugs — on par with the roughly 8 percent relative reduction seen in the JAMA study — could translate to billions of dollars in national health-care savings.

The article is here.

Physicians, Not Conscripts — Conscientious Objection in Health Care

Ronit Y. Stahl and Ezekiel J. Emanuel
N Engl J Med 2017; 376:1380-1385

“Conscience clause” legislation has proliferated in recent years, extending the legal rights of health care professionals to cite their personal religious or moral beliefs as a reason to opt out of performing specific procedures or caring for particular patients. Physicians can refuse to perform abortions or in vitro fertilization. Nurses can refuse to aid in end-of-life care. Pharmacists can refuse to fill prescriptions for contraception. More recently, state legislation has enabled counselors and therapists to refuse to treat lesbian, gay, bisexual, and transgender (LGBT) patients, and in December, a federal judge issued a nationwide injunction against Section 1557 of the Affordable Care Act, which forbids discrimination on the basis of gender identity or termination of a pregnancy.

The article is here, and you need a subscription.

Here is an excerpt:

Objection to providing patients interventions that are at the core of medical practice – interventions that the profession deems to be effective, ethical, and standard treatments – is unjustifiable (AMA Code of Medical Ethics [Opinion 11.2.2]10).

Making the patient paramount means offering and providing accepted medical interventions in accordance with patients’ reasoned decisions. Thus, a health care professional cannot deny patients access to medications for mental health conditions, sexual dysfunction, or contraception on the basis of their conscience, since these drugs are professionally accepted as appropriate medical interventions.

Aetna Shows Why We Need a Single-Payer System

By Robert Reich
Robert Reich Blog
Originally posted August 16, 2016

The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans.

Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest insurer, and Humana, one of the other giants.

All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.

The problem isn’t Obamacare per se. It’s in the structure of private markets for health insurance – which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making the structural problem more obvious.

The entire blog post is here.

Penn study: Pay patients to take their pills

By Tom Avril
Philly.com
Originally posted November 8, 2015

Here are two excerpt:

While the field of medicine has moved increasingly toward paying doctors for performance, there has been little controlled research on whether it works. Studies of patients, meanwhile, have found that incentives can encourage healthy behaviors such as giving up cigarettes.

But in a study of 1,503 patients announced Sunday, the Penn team reported that the most effective approach, at least where statins are concerned, may be to reward both patient and physician.

"In some respects, it takes two to tango," said lead author David A. Asch, a professor at Penn's Perelman School of Medicine.

(cut)

Even if money helps, the notion of paying people to do the right thing may rub some the wrong way.

"We shouldn't have to," said Bobbi Cecco, president of the Hackensack, N.J., chapter of the Mended Hearts patient support group. "But if that's what it comes down to . . ."

Wei, the Michigan physician, said she already is motivated to help her patients stick with their medicine.

"Financial incentives wouldn't change my values or patient care," she said. "I am also an idealist."

The entire article is here.