[FoRK] Poverty In America: A Special Report

Stephen Williams sdw at lig.net
Tue Sep 27 19:24:55 PDT 2011

It seems that billing and other transaction overhead is far too high.  And a lot of it is misguided.  For instance, the new 
standards for diagnosis / billing codes seem ridiculous and going deep in a completely wrong approach. [1]  Could you imagine 
creating "software diagnosis codes" for every possible software problem, then creating a bureaucracy and layers of service business 
to get the billing correct?  Isn't that what they're doing?

I'm not sure that I agree overall that people are seeing doctors too much.  I rather think that they are seeing them in a way that 
is far too heavyweight too often.  Some of that is tradition, some of that is greed (by them or their overseers for non-independents 
or insurance companies (indirectly) or by those winning malpractice), some ignorance, and a lot because of dragging their feet in 
the use of new technology.  Traditionally, you need to make an appointment, travel, wait, be called in, wait some more, be 
pre-evaluated by a nurse, then seen for a bit, then dismissed, then have to have a payment transaction, then travel back, perhaps 
going for tests or the pharmacy.  All of this that probably approaching 99% of the time could be handled by little more than email 
with photos or a Skype call.  Except that due to foot dragging and malpractice avoidance, won't be accepted much for a while.

To some extent, having more lightweight interaction is probably good.  Each interaction shouldn't be billed at $180 though, nor 
should it take an hour at $20.  The HMO style thing sort of makes sense, although I've never found it attractive enough to try.  
Seems like a fractional HMO approach makes more sense.


> These visits exert a huge burden on the U.S. health care system. A 2009 study in the Annals of Internal Medicine found that 
> treatment for three common illnesses cost an average of $166 at a general practitioner’s office. The very same treatment could run 
> upwards of $570 in an ER.
> Up to 27% of visits to ERs across the country are for non-emergency medical treatment. These unnecessary visits end up costing the 
> country approximately $4.4 billion each year. 

Who's fault is it that these people don't have an alternative to go do?  I doubt that many people like waiting forever in an ER to 
be seen.  The few times I've been to an ER over the last 20 years, there was no effective triage going on.  Wait time was often an 
hour or more, even in affluent areas.

Many of the problems are clear.  What are the solutions?

I would argue that many of the costs are inflated from one or more or all parties gaming them.  Medicaid (the agency) and providers, 
perhaps twisted in some ways by private insurers, have somehow twisted the system over the last 15-25 years into a complete mess, 
full of padding and other fictions.  As I've pointed out, this is clear if you compare the retail costs for procedures with what 
private insurers actually pay on contract.  A difference of 10x is not appropriate in any circumstance.

The widespread use of standards (and often especially stupid ones) is probably holding back a lot of innovation, at least outside of 
HMOs.  Contracting for care in fractional ways (family doctor, etc.) should be possible with insurance companies and 

>   ICD-10 Code Set to Replace ICD-9
> The differences between ICD-9 and ICD-10 are significant and physicians and practice management staff need to start educating 
> themselves now about this major change so that they will be able to meet the October 1, 2013 compliance deadline.
> ICD-10-CM codes are the ones designated for use in documenting diagnoses. They are 3-7 characters in length and total 68,000, 
> while ICD-9-CM diagnosis codes are 3-5 digits in length and number over 14,000. The ICD-10-PCS are the procedure codes and they 
> are alphanumeric, 7 characters in length, and total approximately 87,000, while ICD-9-CM procedure codes are only 3-4 numbers in 
> length and total approximately 4,000 codes.
> Moving to ICD-10 is expected to impact all physicians. Due to the increased number of codes, the change in the number of 
> characters per code, and increased code specificity, this transition will require significant planning, training, software/system 
> upgrades/replacements, as well as other necessary investments.
> Before the ICD-10 codes can be used however, physicians and others in the health care community must start using the new version 
> of HIPAA transaction standards known as5010 
> <http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/hipaahealth-insurance-portability-accountability-act/transaction-code-set-standards/version-5010-electronic.page?>External 
> Linkby January 1, 2012, as the current version, 4010, does not accommodate use of the ICD-10 codes.

Diagnosis?:  Freaking Idiots!


On 9/27/11 9:49 AM, Gregory Alan Bolcer wrote:
> I don't disagree, but I consider financial billing, inadvertant charges, and overpriced goods and services as all secondary 
> effects from the primary one:  people end up seeing doctors when they don't need to. It's just like convenience shopping at 
> grocery stores, they know once you get into the store, purchases are made at 40% more than you otherwise would have 'as long as 
> you are there'.  There's no getting around human nature either from the dr's perspective or the patients.
> Widely reported today: "Our findings show that many primary care physicians believe there is substantial unnecessary care that 
> could be reduced, particularly by increasing time with patients, reforming the malpractice system, and reducing financial 
> incentives to do more."
> And why are those goods and services overpriced?  I quote Forbes:
>> Doctors pocket about $20 for each Medicaid patient they see. By contrast, an hour with a privately insured patient means payment 
>> of up to $260.
>> To compensate for lower government rates, doctors must increase their patient load. Every patient consequently spends less time 
>> with the doctor.
>> In some cases, doctors are responding to low reimbursements by refusing to see patients with public insurance. The American 
>> Academy of Family Physicians found that 13% of doctors did not partake in Medicare in 2009.
>> The numbers are even worse for Medicaid. The Houston Chronicle reported that doctors in Texas are leaving the program because of 
>> declining reimbursements at an “alarming” rate, with more than 300 drop-outs between 2008 and 2010. In Dallas, just 38.6% of 
>> physicians participated in 2009.
>> Given the paltry amount they’re reimbursed for seeing a Medicaid patient — and the cost of overhead — a doctor may actually lose 
>> money on each additional public patient he or she sees.
>> As the number of doctors who will treat them dwindles, beneficiaries of public insurance often must resort to costly alternatives 
>> like emergency rooms (ER) — even if they only need routine care.
>> More than 30% of Medicaid enrollees visited an ER in 2007, compared to the less than 20% of Americans with private insurance.
>> These visits exert a huge burden on the U.S. health care system. A 2009 study in the Annals of Internal Medicine found that 
>> treatment for three common illnesses cost an average of $166 at a general practitioner’s office. The very same treatment could 
>> run upwards of $570 in an ER.
>> Up to 27% of visits to ERs across the country are for non-emergency medical treatment. These unnecessary visits end up costing 
>> the country approximately $4.4 billion each year.
> Greg
> On 9/27/2011 9:35 AM, Reza B'Far (Oracle) wrote:
>> Hmm... I have to agree with Adam. I can dig up stats, but supply-chain
>> issues are the biggest issue. They dwarf all other costs. Supply-chain
>> meaning simple financial billing stuff like unbundling of charges from
>> providers to payers, inadvertent over-charges, and more complex things
>> like overpriced goods and services delivered to patients by service
>> providers.
>> Unfortunately, the issue with studies, etc. is that there is no
>> conclusive source. I think in the health-care ecosystem more than any,
>> there are so many folks who depend on the waste in the supply chain
>> (given the numbers are so large) that it is near-impossible to
>> stream-line processes, cut-out-middlemen, etc.
>> On 9/27/11 9:24 AM, Gregory Alan Bolcer wrote:
>>> Everyone complains about billing, fraud, and bloat.
>>> The biggest cost in healthcare? One of every 10 patients doctors saw
>>> daily had issues that could have been dealt with by phone, by email or
>>> by a nurse.
>>> There's 10% right there.
>>> On 9/18/2011 7:53 PM, Adam L Beberg wrote:
>>>> A huge part, if not majority of costs are due to billing and bloat.
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