The amount spent on healthcare continues to rise

I just came across this story about a report done by CMS for health care spending in 2009. The report said that 17.3% of all spending was health care related, which was a 1.1% increase over the previous year. The year to year was the largest increase since they started collecting this data in 1960.

$2.5 trillion was spent on health care in 2009, $1.2 trillion paid by the government in the form of Medicare and Medicaid, while $1.3 trillion was paid by private sources, insurance and individual out of pocket expenses.

It is estimated that by 2019 (not that far away) that $4.5 trillion will be spent on health care, and by the following year that 1 out of every 5 dollars spent in this country will be for health care.

These are staggering numbers indeed. Trying to put them in perspective is difficult. The study shows per capita spending in 2009 was just over $8,000 ($8,046.70). In 2019 this will explode to $13,387.20.

For those with health insurance, most of this (83%) is paid. Even if you have insurance, according to the Milliman Medical Index, 17% of costs are paid out of pocket. By my calculations the per capita out of pocket spending on health care in 2009 will be $2,275.82. This amount could easily reach $3,500 by 2019. Many do not have this amount of money lying around and could use professional help. INSNET provides risk free medical bill review and negotiation services for individuals who have medical bills exceeding $200.00. Visit www.myinsnet.com to learn more.

Want a new IPad, here’s an easy way to afford one

Apple recently showed off its new tablet computer called the IPad. It looks very sleek, and I’m sure it will be a big seller. One reason for the optimism over sales is the affordable price starting at $499.  Paying five hundred dollars for a computer doesn’t seem that outrageous, but this isn’t exactly a computer. In these economic times that kind of money isn’t exactly falling out of peoples pockets.

INSNET has a way to make this easily affordable. Simply submit one of your medical bills for review and negotiation. If your bill is typical, we will save your $623.69. That’s enough for the device and several apps to go along with it.

A typical bill we negotiate a savings for our client is $2,237.08. In 2009 our average discount was 27.88%, creating a savings of $623.69.

Sending your bill to INSNET is easy, simply log on to our secure website at www.myinsnet.com. Bills can also be sent via fax, email or mail. We typically complete a negotiation within 3 days and you’ll realize your savings immediately, even if you have to wait a few months for the IPad to be released.

Health insurance companies can make errors as well

You often hear that 8 in 10 medical bills contain errors. Our research shows that 65% of these are overcharges; meaning 35% are actually undercharges. I just read this story where a Wisconsin Insurance company made overpayments on $4.7 million in bills over a two year period.

It is imperative that when you receive an Explanation of Benefits (EOB) from your insurance company that you compare it to the invoice you receive from your medical provider. We understand that medical bills can be confusing and difficult to understand. That’s why we offer risk free medical bill review and negotiation. INSNET will review your bill for accuracy, and will only charge a portion of the amount we are able to save through our expert negotiation. There is no fee if there is no savings. Each bill submitted to INSNET is returned with a Transaction Summary which shows your bill has been reviewed and shows how your medical provider charged compared to what other providers in your geographic area charge for similar services.

Enrollment in high deductible health plans rises sharply

I recently came across this story which states that according to the Center for Disease Control and Prevention that enrollment in high deductible health plans rose 5.9% over the last two years.

During the first 6 months of 2009, enrollment in high deductible health plans, HDHP’s, for those under age 65  was 22.7%. For comparison, in 2007 17.5% of individuals were enrolled in a HDHP.

For nearly one quarter of those with insurance, the choice to enroll in a HDHP was the lower cost of monthly premiums.  Nearly 50% of those who purchase health insurance themselves (not offered by their employer) also enrolled in a HDHP.

When an individual has a HDHP, they are responsible for higher out of pocket medical expenses. INSNET is available to assist those who are looking to save money on their medical bills.  Any medical bill with a patient balance exceeding $200 is eligible to be sent for risk free medical bill review and negotiation. INSNET charges a percentage of the amount saved, with no fee if there is no savings.

Health Insurance Lessons Learned from a Homeowners Insurance Claim

I came home from a ski vacation with my family this past Thursday and opened the door to my house and discovered it was raining in my home.  A hot water pipe had froze and burst while we were away, creating a massive amount of water damage in the house.

Why do I bring this up in a blog about medical bills? We moved into our home about 5 years ago as my family of 4 children had outgrown our old home. As the new house is larger than the previous home, it costs more for homeowners insurance. In order to keep our homeowners insurance  premiums at a reasonable rate, we increased our deductible. Our deductible is a reasonable amount we can afford, and we realize smaller losses to our home may not reach the deductible and thus will be our responsibility. Thankfully we have coverage for this massive loss after we pay our deductible.

Health insurance can be thought of the same way. Increase your deductible to a reasonable amount your can afford, knowing you’ll have to pay amounts below this  (think doctor visits). If you encounter a devastating illness or accident, your insurance will pay after you have paid your deductible. I’m still in a bit of shock over this loss, but will share insights as the process moves forward.

Costly medical billing error

We recently reviewed a large hospital bill for a self funded company. The patient had a brain tumor and the bill was for a surgery to shrink it. The surgery  placed 8 implantable wafers  in the brain. The hospital bill for the implants alone was in excess of $93,000.00. Needless to say, this was a very complex procedure.

The hospital is part of the network the self funded company belongs to and thus the bill was submitted with a ppo contractual adjustment. The bill was submitted to us to determine if after the adjustment, was the hospital billing a fair rate (within Usual and Customary amounts).

Upon our review of this bill, we noticed that the cost for a box of 8 implantable wafers was $45,015.20.   We were able to determine the hospital cost for the box of 8 wafers to be $24,453.The hospital was billing the company over 1.8 times their cost for these wafers.

This bill was several pages long, and we also noticed 8 single line charges each for $6,044.56. Each single line item was for the generic name of the implantable wafer.  Based on the Operative Report and the manufacturer suggestions, 8 wafers were implanted in this surgery. The billing error was that the hospital simply charged for the box, and then mistakenly charged for each individual wafer.

On the implant charges of over $93,000, our client allowed about $37,000. Upon receipt of the check from the company, the hospital contacted the company via telephone and was looking for a fight; accusing our client of all sorts of things.  I can’t say I blame them, if they were expecting $93,000. Our client simply pointed out the double billing error. The hospital rep quickly reviewed the bill and according to our client became very quite and ended the coversation.

Not all billing errors are this large. This really is a simple error, it’s just compounded by the cost of each unit. Studies show that 8 in 10 medical bills contain errors. Our client hired us to help them. INSNET is available to provide risk free medical bill review and negotiation on any medical bill with a patient balance exceeding $200.00. Next time you get a medical bill in the mail, doesn’t it make sense to have it professionally reviewed?

Consumer Driven Health Plans are the real health reform

Cigna release a study showing that while medical costs continue to increase double digits annually, that costs for individuals enrolled in consumer driven health plans saw their costs decrease 26% over a four year period.

Critics of high deductible plans often state the reason cost decrease is due to the high out of pocket costs. They say that people are foregoing treatment because they cannot afford it. This study states that the level of preventative care, chronic diease management and evidence-based treatments were higher than those enrolled in PPO and HMO health plans.

The study further states that 18% of Americans are covered under a high deductible health plan. If this amount rose to 50% (it is increasing each year due to lower monthly premiums), the United States could achieve $350 billion dollars in savings over a 10 year time period.

High deductible health plans and Health Savings Accounts need to be in the forefront of discussions about health reform. More people can afford coverage (decreasing the number of uninsured), no taxes will be raised and medical costs will decrease. Isn’t that what reform should be about?

Lessons about healthcare reform from a computer technician

Our family computer was not working properly. I’m the tech guy in our household, so it was my responsibility to fix the problem. Not knowing the answer I Googled the symptoms and got many possible cures. The problem was, I couldn’t run any programs on the machine. It was time to call in the experts.

As you probably guessed, the machine had a virus, and due to the damage caused by the virus and also by the machine having a lot of dust, the best fix was to replace the hard drive. I was a little skeptical about this, the computer is almost 3 years old, and I know these are built to have increasing shorter shelf lives, but I listened to the technicians reason for repairing this machine instead of replacing with a brand new one. I decided to replace the hard drive, which cost me around $150.00. The machine now works great, better than before for sure.

What does this have to do with healthcare reform? Instead of a rash, overhaul of a fix (new computer), I opted for a small, less expensive repair. I would advocate three small repairs to the healthcare system. Less expensive high deductible health plans ,which makes consumers more accountable for the true cost of the healthcare, tort reform which will lower the award in malpractice lawsuits which increase insurance premiums which doctors pass the cost of on to patients, and thirdly, allow insurance companies to sell their products across state lines, the more competition involved, the lower the cost of monthly premiums will be. None of these repairs will increase taxes, and will help lower the cost of healthcare. I don’t think the same can be said for the current health bills.

A 35% discount is good isn’t it?

If you got an email, or saw a coupon advertising a product or service at a 35% discount, you would think the product or service must a good value at the reduced price. However, when dealing with healthcare, numbers can be very deceiving.

Studies show that 90% of all medical claims processed are done so ‘in network’, meaning that the provider of service is in the insured’s network. Going to an ‘in network’ provider is generally thought to be a  great way to save money on out of pocket medical expenses.

An insurance company or third party administrator must process hundreds of medical claims each day. Elaborate computer systems assist these organizations with this task. But in doing so, the human element is taken out of the equation. It is estimated that 95% of medical claims are ‘auto-adjudicated’ meaning a human does not review them. These computer systems have eliminated many mistakes, but when a human does not review bills, overpayments can occur.

For example, we recently reviewed a medical claim for a patient who underwent spinal surgery. This bill was from an insurance company and exceeded $240,000. the hospital was in the insured’s network, and a contractual adjustment of $84,549.33 ( a 35% discount) was in place. It is hard to find anyone who would not think that the $84,000 savings does not represent good value. This bill was not auto-adjudicated due to the dollar amount, and it is a good thing.

Part of the bill, over $159,000 of it, was for spinal implants used in the surgery. The insurance company requested and received invoices from the hospital as to how much they paid for the implants. The invoices totaled over $65,000.  If the claim was auto-adjudicated, the hospital would have received $103,350 (35% discount on the $159,000) for these implants, a mark up of 1.6 times invoice price. Additionally, invoice price, does not represent the actual amount the hospital paid for the implants. If there was a standard 20% discount offered, the hospital is receiving nearly 2 times acquisition cost for the implants, after a 35% discount was applied.

If I was paying this claim, I would question whether this is good value or not, how about you?

Searching for the best medical pricing

USA Today ran a story titled In a weak economy, patients search for best medical pricing. The story points out that people today need to make the most of their dollars, and are thus actively looking for the best price for their healthcare. This is a difference to years past, when most of healthcare expenses were paid by insurance companies, and the patient had very little to pay out of pocket. Deductibles are now higher, which means out of pocket expenses are greater.

The story continues to say that many insurance companies are now providing online tools to assist their insureds. However, after reading the comments to the post, and in my own experience, many of these sites are not user friendly, and fail to offer enough information.

Healthcare Blue Book and Out of Pocket.com are two websites which I have come across which provide a wealth of information. But just having information doesn’t always mean you can get the best price. For example, you had a MRI on your knee at a hospital and were billed $1,750. You consult an online resource and see that the recommended price to pay for a MRI of the knee is $850.00. Is this a $900.00 overcharge? There are many factors involved in determining if you are being billed a fair price.

When in doubt, you should consult the services of a patient advocate who is trained in reviewing medical bills and determining a fair price to pay. Visit www.myinsnet.com if you have any questions.