Healthcare would seem to be a big issue in California, where more than 6 million residents are uninsured, urban emergency rooms teeter on the brink of closure and rising costs are pinching the state budget as well as taxpayers. It is not, however, much of an issue in the gubernatorial campaign. One reason is voters themselves. In a recent poll, just 4% of those likely to cast ballots ranked healthcare as their No. 1 concern in the governor's race. Most voters have insurance and are generally satisfied with the kind of healthcare coverage that they're getting personally.
Schwarzenegger, with a wide lead in the polls, has not seen the need to wrestle with the complexities of the issue, or its many controversies, on the campaign trail. He has made some strides in healthcare. In August, he supported legislation allowing the state to fine hospitals for lapses that cause serious injury or death. His budget this year included about $250 million to prepare for such disasters as a pandemic flu or bioterrorist events. And he reached a deal with Democrats to lower drug prices for more than 5 million Californians and acceded to their demands to allow sanctions against noncompliant drug companies.

The governor believes that the biggest problem facing Californians is affordability and the rising costs of healthcare. That makes sense. According to Peter Lee, chief executive of the Pacific Business Group on Health. "It's really been recently that we've seen the governor embrace the need to try to tackle head-on the full range of cost, quality and access problems in healthcare."

See full Los Angeles Times story, As a campaign issue, healthcare is comatose

Humana Inc., the second-largest provider of Medicare drug benefits, said its profit more than tripled on higher prescription-plan membership.Third-quarter net income increased to $159.2 million, from $46.8 million. The company expanded its share of the government's Medicare health plan for the elderly and disabled by offering the lowest prices for prescription benefits and promoting its managed-care plans. In the quarter, membership in Humana's Medicare managed care plans almost doubled from a year earlier. Humana will add as many as 200,000 members in 2007, a jump of about 20 percent.

See Bloomberg.com story, Humana Profit More Than Triples on Medicare Plans

Brand-name drugs that account for about $30 billion in annual sales are expected to lose patent protection this and next year. Generic prescription drugs are getting a bigger role in many people's health care spending as competition among retailers drives down generic prices and the selection of those drugs becomes more plentiful. Consumers can save 30% to 80% by switching from brand-name drugs to generic versions. The uninsured and those covered by the Medicare prescription drug benefit are expected to benefit most from the wave of new generics.

Wall Street Journal, Badal, (10/22).

As employers increasingly seek to encourage people to look for lower-cost medical services, workers will need to know what their medical services cost. According to a survey by Harris Interactive for employee benefits provider Great-West Healthcare, 68% of respondents did not know the cost of treatment until it was received and 11% said they never learned the cost. Respondents guessed that a routine doctor's office visit costs $95, when it typically costs $200. For emergency department visits, respondents estimated average costs of $680, when the actual costs totaled $400, according to the poll.

See Washing Post story, Before You Get Sick, Shop Around

A USA Today/Gallup poll, published in USA Today reports that 60% of U.S. adults believe Democrats would work to provide health insurance to the uninsured if they take control of Congress after the midterm elections. According to the poll, 52% of respondents believe Democrats would allow the purchase of prescription medications from abroad and 72% would approve of such a move. In addition, 79% of respondents would approve of efforts to expand health insurance to the uninsured.

In related news, CongressDaily (Lee, CongressDaily, 10/25) reported that Democrats' "first priority ... in their effort" to reduce the number of uninsured residents would be to address funding shortfalls in SCHIP, which is slated for reauthorization next year. Democrats "hope to expand eligibility and increase the number of low and moderate-income children enrolled in the program." In addition, Democrats will look to "correct what [they] consider flaws" in the Medicare prescription drug benefit. A Democratic Congress would address health care information technology legislation that would authorize greater federal funding to help physicians and hospitals purchase new technology.

Asked to choose between a $6,700 raise and employer-sponsored health insurance, 75% (of those polled) picked the health plan. Of those, 13% said no raise would be big enough to persuade them to give up their coverage. The average cost of employer-provided coverage was about $6,700 per worker in 2004. It has since gone up to more than $7,100. These results come from the annual Health Confidence Survey, released today by the nonpartisan Employee Benefit Research Institute. The telephone poll of 1,000 adults was the ninth such annual survey, and has a margin of error of plus or minus 3 percentage points.

Overall, the proportion of employees covered by a company plan dropped from 81% in 2001 to 77% in 2005. After annual increases in health insurance costs hit double-digit rates in 2001, employers responded by passing an increasing share of the burden on to workers in the form of higher deductibles and co-payments. Such measures have slowed cost increases for employers, although they are still running at about twice the rate of overall inflation.

The White House is encouraging Americans to consider so-called consumer-directed plans, which feature low-cost insurance for major medical expenses with a tax-sheltered "health savings account" to cover the cost of routine care. A Rand Corp. report found that such plans could help cut spending and slow the rate of cost increases by reducing the use of medical services 4% to 15%. However, individuals may offset some of those savings by spending more out of their health savings accounts. The researchers said more study would be needed to determine whether the savings would be a one-time phenomenon or an enduring trend. About 3 million people are enrolled in consumer-directed plans, but the number is growing rapidly as large employers add this option to their benefits.

See full Los Angeles Times story, Health costs bedeviling Americans, survey shows

The economist Milton Friedman, a Nobel Prize winner, said, "When a man (precedes gender consciousness) spends his own money to buy something for himself, he is very careful how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is very careful how much he spends but somewhat less careful about what he spends it on. When a man spends someone elses money to buy something for himself, he is very careful about what he buys, but doesn't care at all about what he spends. And when a man spends someone elses money on someone else, he doesn't care how much he spends or what he spends it on. And that's the government for you."

With the trend toward higher deductibles in both the employer and individual health insurance markets, we find ourselves spending our own money for health care. Now we should begin to see people spending more carefully and buying more wisely. They should also be more receptive to behavioral changes such as diet, exercis ang good preventive care.

A growing number of Americans (500,000 last year) are traveling to countries like India, Thailand, Costa Rica and Malaysia for medical care. Perhaps they are put at ease by the number of U.S.-trained doctors abroad and an increasing number of hospitals that are certified by U.S. insurance companies - Blue Cross Blue Shield Association includes an India hospital in its network of participating hospitals; California insurer Health Net contracts with clinics in Mexico; and West Virginia's Legislature is considering a bill that would encourage state employees to have non-emergency surgeries performed abroad. Medical tourism in recent years has expanded from primarily plastic surgery to include more medically necessary procedures like heart bypasses and orthopedic surgeries.

A recent episode of the television show Boston Legal featured the story of an HMO patient who was sent to India for a heart bypass. At the center of the plot was the fact that the patient had no choice about where she was treated. This is of course fictional, but I wonder if this might not become something to worry about for people who worry about things that might happen in the future.

As scrutiny over cancelled policies grows, the California Department of Managed Health Care ruled that Kaiser Permanente illegally canceled coverage for a Northern California woman. The cancellation was illegal, the agency ruled, because there was no evidence the woman intended to deceive the health maintenance organization about her medical history when completing her application for coverage. With the order against Kaiser, all three of the state's largest health plans are now embroiled in the controversy. Blue Cross of California, owned by Indianapolis-based WellPoint Inc., recently settled more than 70 lawsuits and claims filed by patients who accused the state's largest health insurer of illegally canceling their coverage after they got sick. Suits have also been filed against Blue Shield of California.

Kaiser faulted the woman for not disclosing an appointment she had for arm and neck pain. The agency ruled the rescission illegal because Kaiser made no showing that the woman willfully misrepresented her health history.

Follow the thread of this issue in Healthcare Shopper, Blue Cross Settles Lawsuits

Blue Cross of California has agreed to settle more than 70 lawsuits and claims filed by patients who accused the state's largest health insurer of illegally canceling their coverage after they got sick. The settlements will allow the former policyholders to pay hefty medical bills that they were stuck with after losing their insurance.

The issue behind this story is the fact that carriers of individual health insurance policies have been rescinding or cancelling policies after they have been issued, based on alleged errors or omissions in the applications for coverage. State regulators say that the carriers must prove that the application errors or omissions were intentional. Blue Cross has canceled some policies based on errors that could not be proven to be intentional on the part of the applicant.

Pick up the thread of this story at Healthcare Shopper, Hospitals sue Blue Cross of California

The promise of consumer driven health plans is that high-deductible health plans combined with health savings accounts (HSAs) can help make the insured spend more carefully and reduce health care costs, but so far few employers have embraced the plans. According to a recent survey conducted by the Kaiser Family Foundation, only 7% of U.S. employers offer high-deductible health plans with HSAs, and only 4% of employees with health insurance are enrolled in such plans.

A plan by Wal-Mart to offer employees high-deductible health plans with lower premiums, rather than traditional low-deductible plans, will serve as a massive test of the claim that consumer-driven health plans can slow the sharp rise in medical costs by making individuals responsible for spending decisions. Under the plan, which will begin on Jan. 1, 2007, new employees can enroll in a health plan with a $1,000 deductible or a $3,000 deductible. One of the health plans will allow new employees to contribute to a health savings account after one year and Wal-Mart will contribute as much as $2,400 to the HSAs annually.

Because of the large number of relatively low income individuals employed by Wal-Mart, this should prove to be a solid test of the wider appeal of consumer driven health plans beyond the affluent self-insured market it has captured so far.

See full story at Kaiser Family Foundation - Kaiser Daily Health Policy Report, 9/27

A majority of Americans would prefer universal health care to the current U.S. health care system, but only if nothing else changes. In other words, they want all medical treatments covered, unlimited choice of doctors without paying increased taxes or health insurance premiums. Yea. And I want to be 21 again.

Fifty-six percent of adults said they would prefer a universal health care system to the current U.S. health care system, according to the ABC News/Kaiser Family Foundation/USA Today survey. However, the survey found that 76% of adults said they would oppose universal coverage if some medical treatments would no longer be covered. However, the survey found that support drops to 18% if some medical treatments would no longer be covered, 28% if universal coverage limits their choice of doctors and 35% if it meant they would pay higher taxes or health insurance premiums (Appleby [2], USA Today, 10/16).

One of the best ways to reduce your health care costs is by using generic drugs when possible. Order your expensive brand-name drugs from Canada. My family has been using CanadaDrugs.com for years with excellent results. You can also split your drugs. For instance, medications may come in 20 and 40 milligram tablets for the same price. It's wise for patients to buy the 40 milligram tablets for the same price and make them last twice as long by cutting them in half. Check with your physician though, because not all drugs can be split.

When it comes to insurance, look for insurance with a high deductible and lower premiums if you're healthy and don't expect your costs to meet the deductible anyway. Those with expensive health problems should look for lower deductibles but higher premiums, assuming their costs will easily surpass the deductible.

Those without insurance can consider Medicaid and state subsidized health plans. The Healthcare Options Matrix will show you what's available in your state. These plans are often restricted to children and individuals with children.

A class-action lawsuit filed Friday on behalf of all California hospitals accused Blue Cross of California of routinely violating state law by refusing to pay hundreds of hospitals statewide for patient care it authorized. At issue in the suit, filed in Los Angeles County Superior Court, is the cost of care for patients whose coverage Blue Cross later canceled. The unpaid bills could be huge because Blue Cross cancellations often involve costly medical procedures. In many cases, canceled patients are unable to fully reimburse hospitals. The suit seeks payment for all treatment the state's largest health insurer authorized for such patients over the last four years, as well as interest and punitive damages.

Earlier Healthcare Shopper reported that Blue Cross was fined $200,000 for rescinding individual health insurance policies, the cause of these unpaid hospital bills.

A contributing factor to the increasing number of uninsured Americans, is the fact that more of them are working for small ccomapnies than in years past.

Only 60% of businesses with less than 200 employees provided health benefits in 2006, compared with 98% of those with 200 or more employees. Small businesses have been gaining the U.S. employment base for three consecutive years. Large firms are more likely to reduce staff during recessions and slow-growth economies. In addition, large companies are more likely to be manufacturers, which can replace workers with automation through technology, and to outsource work, which also results in downsizing. Meanwhile, smaller businesses are often in service industries such as consulting and health care fields that require workers rather than machinery.

See USA Today story, Small businesses again gain ground in overall U.S. employment

Thousands of Washington residents who qualify for Medicaid - federal healthcare for the poor - even though they are employed by large companies are being offered a way to participate in their employer group health plan. Medicaid officials use benefit applications to identify beneficiaries working at large companies that likely offer health insurance to workers. When employee premiums are less expensive than Medicaid's costs, the state contacts the individual and offers to reimburse him or her share of the employer premium.

Medicaid officials estimate health plans could enroll 5,000 residents and reduce state costs by $3 million annually within two years. So far, about 520 families totaling 1,300 individuals have switched from Medicaid to employer-sponsored plans. The state spends an average of $173 per month for each Medicaid beneficiary, but it pays about $76 per month in premiums for those who enroll in employer-sponsored coverage. The state also spends an additional $16 per month for any services not covered by some employer plans, such as vision and dental.

See Seattle Times Story - State saves by picking up health-care tab

Under a new law (AB 2911), pharmaceutical companies must begin offering discounts to uninsured state residents whose annual incomes do not exceed 300% of the federal poverty level and people with catastrophic medical costs within three years or face restrictions on selling their products to Medi-Cal, California's Medicaid program. The program will provide average discounts of 40% on brand-name drugs and 60% on generic medications.

Medicare prescription drug plan beneficiaries who reach the so-called "doughnut hole" coverage gap also will be eligible for the program. Medicare beneficiaries are responsible for 100% of annual prescription drug costs between $2,250 and $5,100. Medicare covers 95% of annual prescription drug costs that exceed $5,100.

See Los Angeles Times story

Medical identity fraud, where individuals use the names and medical records of others to obtain healthcare is becoming frequent. Experts "believe that the rising cost of health care is driving more identity theft and that many people are unaware they have become victims unless they receive a hospital bill or query from their insurer," according to the Times. In addition to bills from hospitals and health insurers "fraudulently run up" by others, victims of medical identity fraud "face a greater risk of injury or even death if doctors make treatment decisions" based on errors in their medical records that can result, the Times reports.

Medical privacy rules established under the 1996 Health Insurance Portability and Accountability Act "can make it difficult for patients to see their own medical records" when identity theft is suspected, the Times reports. In addition, "once a person tells a keeper of records that someone else's data might be intermingled, the file becomes even harder to obtain" because "it includes another person's medical history, which many hospitals argue can't be turned over without consent."

Read Los Angeles Time Article, ID Theft Infects Medical Records

Craig Barrett, chairman of Intel, said that U.S. companies should force the health care industry to adopt a more cost-effective system in order to sustain current employment levels. "Every job that can be moved out of the United States will be moved out ... because of health care costs," Barrett said.

Barrett said that companies should do business only with health care providers that meet certain standards, such as fully electronic health records and the use of "best practice" standards of care. Barrett said health care networks should be "competitive centers for excellence" that solicit business by offering the highest quality care at the lowest price.

Barrett noted that health care costs averaged more than $6,000 per person for employers in 2004, adding that increasing health care costs are making it more difficult for U.S. companies to compete abroad.

Read full story in Omaha World Herald

Ms. Austin-Fink, a 59-year-old writer who lives in Las Vegas had breast cancer. She received six doses of the chemotherapy drug Abraxane at $4.200 per dose. The cost of the drug did not concern her because she has excellent insurance coverage. “My insurance company just paid it, because my doctors said they needed it, and the insurance company doesn’t argue with stuff like that,” Ms. Austin-Fink said.

Abraxane’s effectivness and side-effect profile is similar to that of Paclitaxel, which was approved for treatment of breast cancer in 1992 and is still widely used. Bristol-Myers Squibb’s patent on Taxol expired in 2000. Now the drug is available as a generic at a cost of about $150 a dose. But, because of the odd economics of the cancer drug market, Abraxane’s price does not seem to be hurting its popularity

While insurers have tried to save money in other drug categories by encouraging patients to use cheaper generic drugs, they face public pressure not to restrict access to new cancer treatments. In addition, doctors treating cancer patients are imune to treatment costs. “When I’m with a patient, my job is to be a patient advocate, not to try to save society money on chemotherapy,” said Dr. Barbara McAneny, of Albuquerque.

The rise in cancer-drug prices is a microcosm of broader trends pushing up health care costs nationally. Despite decades of efforts by governments and insurers to restrain costs, patients continue to want the newest — and most expensive — drugs and medical devices. And doctors and the health care industry have little reason to keep costs in check, because insurers rarely deny coverage for new treatments on the basis of price.

See full new York Times story - Hope, at $4,200 a Dose