Read: April 2024

Inspiration: Interested to understand more about the cost of the American healthcare system and its inner-workings


Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.

Unedited Notes

Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.

1 in 5 americans have medical debt in collections, the healthcare system suffers from incentives to overtreat, doctors nudge patients with terminology/phrasing of fear to lead to procedures not needed, clinics send reps to churches to test churchgoers but really preying on these people as notify them of generic symptoms requiring follow up visits, predatory vascular screening very common to induce feeling of life threatening issues for profit of medical centers, overscreening when no symptoms, target low income communities, famous U of Iowa studied call 101 hospitals and asked price for same type of heart bypass op—quoted 44k-448k, most hospital execs say “need to cover cost of caring for uninsured” but not supported by data, insurers constantly push for discounts with hospitals then hospitals increase prices, joint replacement surgery via medicare costs 13k but 1 in 6 US hospital charge 90k+ otherwise, the repricing industry in healthcare is to blame—markup/discount game behind the scenes b/w insurers and hospital pricing, who pays: either the insurance co, employer paying for employee care, or out of pocket individual, insurance co gets secret discounts which sell to employers buying thru the insurance co, insurance co then send biz to hospitals—hospital rely on insurance co for biz, insurance co’s oppose hospitals/other practices being transparent in prices, hospitals essentially have discretion to bill as they please (eg insurance pays hospital 300k then hospital bills patient 500k), hospitals not obligated to give itemized bills, deductible=amount you pay first then insurance covers, Carlsbad New Mexico Med Center example where inflate bills then sue patients and garnish wages to foot the costs—town over Roswell charge <10% for same services and never sue but an hour away, Carlsbad was owned by public parent company too—ie for profit, however studies indicate nonprofit hospital sue as well—and in states like Virgian nonprofits sued even more often, one solution: legally ban wage garnishment, hospital execs often not aware of suits from own hospitals to patients, tax exempt status from IRS supposed to be predicated upon community benefit standard (vague, used to be more direct abt free/discount care to those can’t afford), now also mandated all hospitals have financial aid process—but often deny low income patients, commonly said hospitals makes money on privately insured and lose on medicare/medicaid patients—ie cannot get by on what gvt pays for services but not true, hospital examples with 50% patients medicare and healthy 10-15% margins by way of efficient operations and not bloated admin and legal, air ambulance is an industry now eaten up by private equity and charge 10x+ prices of old and bill patients directly (vs hospital used to own the helicopters) and considered out of network (vs hospital owned could be covered), often unneccessary air transfers also—medicaid/care protected by caps on costs, simply untrue cannot profit on gvt payments so need to increase for insured, saw examples where a private co charged 50k to one patient then separately quoted 7k later for same trip, way we measure success in medicine is flawed—procedural success does not account for whether necessary at the outset, and also “complication rates” relatedly mislead as unneccesary procedure on healthy person means likely no complications but misses the point about need, group level feedback also doesn’t help the poor individual doctor behavior—can assign to others and not react since at group/hospital level, mortality not a good measure of treatment for individual doc and to judge what is necessary—need to show docs data on a distribution so they can see vs peers what they do (ie do they overtreat), example: check if those sent to neck surgery previous sent to therpay at least once—if a doc never sends to therapy then shows pattern of overtreating for $, opioid crisis is issue of overtreatment—extreme of trying to do “everything” for a patient w/o regard for appropriateness, lack of opioid prescribing guidelines so post-operations just give 30-60 supply when truly not needed at all for most, also opioid crisis is a uniquely american medicine problem, insurers cover narcotics but not tylenol, back surgery as well should be avoided at all costs—therapy first, overdiagnosis problem exemplified in Korea with thyroid cancer—saw uptick in cases then accelerate screenings which flagged normal course tumors in thyroid area that would cause no symptoms but hyper-aware so treated with surgery, certain small tumors are variants of healthy vs dangerous so not just about spotting, we are in a crisis of appropriateness, a system which exasperates patients and burns out doctors, healthcare is the one setting in the US where you learn the price AFTER getting a service, would be outrageous anywhere else, ER makes you sign form at entry to obligate you to pay 100%—ask for paper copy and can strike the clause, why isn’t healthcare shoppable to the patient with menu of prices to compare—no reason besides system at work, hospital use guise of “chargemaster price” but this is never paid—it is imaginary and real is the discount price with insurers to know what hospital pays, insurance brokers guide employers on health insurance plans and pbm’s to use—but brokers get tons of kickbacks to keep employers on pricey plans framed as “bonuses” to brokers, this why people pay too much, brokers also get commission on every premium dollar brought to insurance company, carriers blackball brokers if help employers find diff carrier—brokers paid more when employer (ie avg person) pays more for care, essentially a salesman for insurance companies vs broker to help keep costs low for employers—tell employers should still with carrier despite rising costs, make up negative stories about others, health insurance benefits are one thing then pharmacy benefits are doubly confusing, analogous to subprime crisis and poor incentive root cause, doctors trained in medicine but not health care—don’t know how brokers work, self funding insurance is often cheapest option for employer but half of biz in US use brokers not incentivized to tell them that, often think that employer is doing a good by “paying for” insurance but consider that these $ come out of compensation pool—so really paying less in wages via waste on healthcare, PBM spread=diff between what PBM pays a pharmacy for medicatiom vs what they invoice an employer or health plan for medication, PBM often pay pharmacy 10 and bill employer 50, can have employee copay cover entire cost (ie 0 from PBM to pharmacy) and PBM still charge employer, PBM set copay as please, PBMs hide spread—send tons of pages of docs on medicine without transparency, brokers select PBMs or one of big 3, pharmacists can’t disclose what get from PBM, 80% of americans get meds via PBM and gouging is hidden, “rebates” are another smoke bomb from PBMs—pharma co offers rebates but emplpyer paying for meds doesn’t know the amt of rebate at all—PBM keeps this rebate, insurance companies own PBMs as well as pharmacies on PBMs so all a circle of bad incentives, United Health may lower premiums but then leverage PBM they own to get profits back, PBM big 3: OptumRx (owned by United), Express Scripts (owned by Cigna), CVS Caremark (owned by Aetna), GPOs (Group Purchasing Organizations) are like PBMs but for medical devices—control which manuf are on catalogs hospital buy equipment/drugs from and it is pay to play, kickbacks and GPOs limit supply options without any transparency on pricing and fees, GPOs do not make anything simply control catalogue and supplier can negotiate exclusivity via fees and kickbacks—limit choices and raise costs to hospitals and patients, legally allowed to have this system of kickbacks,

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