So, lately there's been a lot of discussion about what kind of health care system we should have in this country. Currently we don't have so much of a system as a patchwork quilt (with some holes in it). We've got all different types of public and private insurance, and I'll discuss these types more later. I think most of us are in agreement that health care as it is now is becoming unsustainable--prices are going up exponentially, many people aren't covered by insurance, and even those who are covered sometimes have trouble paying bills or even have to declare bankruptcy. We do have lots of modern technology, but we aren't doing some things as well as we should (our life expectancy is nowhere near the top; we have really high rates of expensive chronic diseases like diabetes and cancer; etc.).
There are several economic reasons that purely market-based health care systems don't work well. One reason--externalities. Externalities happen when consequences of an economic transaction are externalized--experienced by a third party who wasn't involved in the original transaction. These can be positive or negative. An example of a positive externality might be something like this: I don't want to get my kids vaccinated for the swine flu, but since all the other kids in the class are vaccinated, my kids aren't exposed and don't get sick. I don't pay for the vaccine or expose my kids to any risk, but I'm getting rewards because the kids are protected since everyone else is vaccinated. An example of a negative externality is when the uninvolved party has to pay the costs accrued by someone else. For example, I go to the hospital but I can't pay. I declare bankruptcy, but the hospital never receives any money, so they raise their rates. Everyone following me has to pay my costs. This is something that happens a lot (over half of bankruptcies in the US are related to medical concerns--and most of these people are middle class homeowners with jobs and health insurance). In other words, those people who don't want to pay for other peoples' health care already are, in the form of higher bills (from providers like doctors and hospitals, or insurance premiums). Not paying for anyone else's care means that as a society we have to be willing to accept that people will be turned away from emergency care, and that people will die from preventable illnesses. I'm not okay with this because I don't want it to happen to me, or to anyone else I know.
Another set of issues with health care and the free market comes from having imperfect information. In an ideal market system, the consumer can compare the price and quality of the service or good being received. For example, I purchase a share in a CSA (community-supported agriculture), giving my money to some farmers, and in return I get produce. Although it's probably more expensive than the grocery store, I think it's higher quality and I like the fact that I can go and see how my food is being produced. Of course, lots of decisions are made based on price alone (that's the reason so many airlines now have extra fees for baggage etc.--people often choose whichever ticket is the cheapest, even if it's only by $5). With health care, we do not have information on either price or on quality. When we go to the doctor, we generally have no idea how much we are going to pay, or how much the insurance company is going to pay. I pay my deductible and almost always end up getting an additional bill later. When I had to have surgery, I called and tried to find out the price of the surgery if I had to pay it myself, and they wouldn't tell me. That's because there is not one price! The price depends on what is negotiated between the insurance company, the group plan, the doctors, the hospital, etc. Often, people paying out of pocket with no insurance end up paying much more than those with insurance, because they don't have the negotiating power that the large groups do. Also, it's very hard to compare quality of doctors and hospitals. The Agency for Healthcare Research and Quality has some indicators, but I haven't been able to really find specific ratings of hospitals and doctors, and it doesn't seem very accessible to the general public. Besides, many of our most important health care decisions are made based on what is most convenient! If I get in a car wreck, please don't take the time to check the AHRQ website--just take me to the nearest hospital!
So, without being able to compare price and quality, it's hard to say that we have a truly informed "choice" on any health care issues. These kind of market failures are classic examples where society/government/some larger body needs to step in and create some rules. I can't see any way around these issues for health care. I have heard suggestions that Health Savings Accounts (HSAs) would enable more standard pricing of medical care. Under this scheme, people put aside money toward health costs and pay out of this account rather than having insurance, or supplementing insurance. This way, the theory goes, people would be more conscious of their own medical costs because they'd be paying themselves, not relying on insurance companies, and they would become healthier. Although I'm all for encouraging people to be healthier, the fact is that even low deductibles for preventive services like Pap tests and colonoscopies are enough to stop many people from getting those services. This means that later on, those who didn't get preventive services are at higher risk of expensive diseases and likely don't have the money to pay--thus we run head-on into the externalities. Also, if paying for ones' own medical care resulted in better health, you'd think that uninsured people would be the healthiest--and this is not the case at all.
I guess what I'm saying is that we are already paying for each others' health care, in various ways. This is the basic idea of insurance. We pay in each month and pool our money, and spread our risk. Then when one in the pool gets sick, the money from the pool is used to cover the costs. We're also paying for those who aren't in the insurance system--somebody's got to pay for those unpaid bills, after all. If we did it in a planned way, encouraging healthy behaviors and prevention, it's likely we could help people be healthier AND save money. Other countries have figured out how to do this, so I'm sure we can too.
Wednesday, August 19, 2009
Sunday, August 16, 2009
Jumping into the fray
While I was dealing with the situation with my hips, I also had a rather stressful situation with health insurance and bills. I didn't blog about it too much, for various reasons. But now, with everyone talking about the health care system in this country, I think it's important to let people know what I went through.
At the time I was diagnosed with AVN, I was working on a fellowship at a federal agency. I was not a federal employee, and my fellowship did not come with a health insurance plan. I was able to extend coverage from my previous job through COBRA for a while, I believe it was 18 months. After this expired I purchased my own individual plan, which is the coverage I had when I was diagnosed with avascular necrosis (AVN). After my diagnosis I ended up going to many doctors for various consultations and appointments, and bills started piling up, and the insurance company started paying less and less of them. I also started receiving letters from the insurance company--they wanted me to send them ALL the records from every single doctor I had seen for the past several years. I had already had to go through a similar process when I first purchased insurance from them, but this was way more extensive. It was pretty obvious to me that they were either trying to prove that my AVN was pre-existing, so they wouldn't have to pay for it, or else they were trying to find something that would make me ineligible for coverage altogether. During this time I had one outpatient surgery. I received bills for thousands of dollars. I did not document all of the expenses because with everything else I was dealing with, I just did not have the time or energy, or morale.
Meanwhile, I had been asking around at work and I found a different type of fellowship that came with a group plan for health insurance. I would have to pay my own premium, which would be raised from $167 a month to $333 a month. However, because of the fact that the individual policy was suddenly not covering anything and appeared to be about to take some kind of further action, I felt that the change was well worth it. I switched to the new plan before my hip resurfacing surgery. Although I stayed in the hospital for four days, I only payed $200. Compared to the thousands I had paid for the outpatient surgery, this seemed like a real bargain! A few other bills came up once I got home, for some therapists who had come by the house during my recovery, but overall this extensive surgery ended up being MUCH cheaper than the minor surgery, just because of the insurance plan I was on.
On paper, these two plans appeared to cover similar expenses. The differences really only became evident after I had had the two surgeries, and could compare costs. My situation didn't seem that precarious from the outside, because I was employed and had health coverage the whole time. But, because of the high cost of the bills, I would have been in serious financial trouble had it not been for my parents who were fortunately able to help me out. Thanks to my parents, I was able to go ahead and get the hip replacement surgery. If not for them AND my supportive employer, I would have had to either stay in pain and disability, or have accrued medical bills to a degree which could have sent me into bankruptcy.
This scary situation made me realize how easy it can be to get in a really bad situation because of medical bills. This can happen to anyone, but it's especially risky for people who don't have the coverage of big group plans through large companies. The way insurance companies work, the bigger group you're in, the better, because there are more people paying into the plan, so the risk is spread. On an individual plan, there is no group to spread risk around, so if one person starts accumulating lots of medical bills, they look for ways not to pay. Because our health insurance system was set up through employers, people who are self-employed, in transition between jobs, work for small businesses or are entrepreneurs are especially at risk. Any of us could fall into this category (until we're old enough to qualify for Medicare). The current health care proposals out there are not perfect, but they all aim to improve this situation in some way or another.
So here I am, nearly two years after my major hip replacement surgery, and more than a year after the most recent surgery on my shoulders. My hips and shoulders feel great and normal most of the time. Sometimes the metal hip feels weaker than the other, so if I walk lots or dance I'm more aware of the muscles than in the other side. Sometimes the right (non-metal) hip hurts, as well as the shoulders, especially when the weather changes, but overall I'm functioning normally. And, thanks to a lot of help from my parents, I think I've finally paid all of the bills. I just don't think it's right that I should have had to rely on them; I think people should not have to choose between their physical and financial well-being.
At the time I was diagnosed with AVN, I was working on a fellowship at a federal agency. I was not a federal employee, and my fellowship did not come with a health insurance plan. I was able to extend coverage from my previous job through COBRA for a while, I believe it was 18 months. After this expired I purchased my own individual plan, which is the coverage I had when I was diagnosed with avascular necrosis (AVN). After my diagnosis I ended up going to many doctors for various consultations and appointments, and bills started piling up, and the insurance company started paying less and less of them. I also started receiving letters from the insurance company--they wanted me to send them ALL the records from every single doctor I had seen for the past several years. I had already had to go through a similar process when I first purchased insurance from them, but this was way more extensive. It was pretty obvious to me that they were either trying to prove that my AVN was pre-existing, so they wouldn't have to pay for it, or else they were trying to find something that would make me ineligible for coverage altogether. During this time I had one outpatient surgery. I received bills for thousands of dollars. I did not document all of the expenses because with everything else I was dealing with, I just did not have the time or energy, or morale.
Meanwhile, I had been asking around at work and I found a different type of fellowship that came with a group plan for health insurance. I would have to pay my own premium, which would be raised from $167 a month to $333 a month. However, because of the fact that the individual policy was suddenly not covering anything and appeared to be about to take some kind of further action, I felt that the change was well worth it. I switched to the new plan before my hip resurfacing surgery. Although I stayed in the hospital for four days, I only payed $200. Compared to the thousands I had paid for the outpatient surgery, this seemed like a real bargain! A few other bills came up once I got home, for some therapists who had come by the house during my recovery, but overall this extensive surgery ended up being MUCH cheaper than the minor surgery, just because of the insurance plan I was on.
On paper, these two plans appeared to cover similar expenses. The differences really only became evident after I had had the two surgeries, and could compare costs. My situation didn't seem that precarious from the outside, because I was employed and had health coverage the whole time. But, because of the high cost of the bills, I would have been in serious financial trouble had it not been for my parents who were fortunately able to help me out. Thanks to my parents, I was able to go ahead and get the hip replacement surgery. If not for them AND my supportive employer, I would have had to either stay in pain and disability, or have accrued medical bills to a degree which could have sent me into bankruptcy.
This scary situation made me realize how easy it can be to get in a really bad situation because of medical bills. This can happen to anyone, but it's especially risky for people who don't have the coverage of big group plans through large companies. The way insurance companies work, the bigger group you're in, the better, because there are more people paying into the plan, so the risk is spread. On an individual plan, there is no group to spread risk around, so if one person starts accumulating lots of medical bills, they look for ways not to pay. Because our health insurance system was set up through employers, people who are self-employed, in transition between jobs, work for small businesses or are entrepreneurs are especially at risk. Any of us could fall into this category (until we're old enough to qualify for Medicare). The current health care proposals out there are not perfect, but they all aim to improve this situation in some way or another.
So here I am, nearly two years after my major hip replacement surgery, and more than a year after the most recent surgery on my shoulders. My hips and shoulders feel great and normal most of the time. Sometimes the metal hip feels weaker than the other, so if I walk lots or dance I'm more aware of the muscles than in the other side. Sometimes the right (non-metal) hip hurts, as well as the shoulders, especially when the weather changes, but overall I'm functioning normally. And, thanks to a lot of help from my parents, I think I've finally paid all of the bills. I just don't think it's right that I should have had to rely on them; I think people should not have to choose between their physical and financial well-being.
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