Tuesday, August 06, 2013

Nobody pays $384 for a physical therapy visit

The headline from a WaPo op-ed reads:

For a stiff neck, nearly $6,000 in physical therapy seemed too much


The author is a patient who had physical therapy prescribed for a simple musculoskeletal problem.


My insurance company sent me notification it was “seeking additional information about these charges,” which would mean a “delay in payment” for my PT treatments. My insurer had been billed $412 for my first appointment and $384 for the second. I can hardly blame the company for wanting to know the justification of such costs.
Now I understand why the front desk seemed so eager to have me use my maximum of 12 visits before the end of June: I was leaving nearly $5,000 worth of payments on the table. [bold mine-- Tony]
Notice the confusion of bills, payments and cost.
The author assumes that the insurance company gets no discount and will pay the full $384 billed for the physical therapy appointment and the thousands of dollars of visits. It's satisfying I suppose for health care consumers to read these bills and feel that they have found the real reason, the Holy Grail, of the health care cost crisis, -- $6,000 !!!! OMG!!!--so they fire off an op-ed finally enlightening all of us on the true nut of the issue.
Of course, it's way more complicated than $6,000 in bills. Every insurance company and payer, even cash payer, negotiates a discount to the amount billed. In fact, the amount billed, the $6,000 is a compete fiction. Stop talking about it. 
There's a discount. It might be $100 or $300 or $50.
For a nation ostensibly built on the notion of capitalism and finance I continue to be astounded at the lack of sophistication of the arguments regarding health care finance.
If the Washington Post can publish such an inane op-ed then there is no hope. We should be way beyond the griping about the $384 charged for a physical therapy visit. Nobody ever pays $384 for a physical therapy visit. The insurance company gets a discount. Medicare gets a discounts. Medicaid gets a BIG discount (if it's covered at all). Even cash customers negotiate a discount.

Maybe it's a problem that we really don't know how much is reimbursed for that visit. Fine. But nobody PAYS $384 for a physical therapy visit.

Let me say it again, nobody pays $384 for a physical therapy visit.

Nobody pays $384 for a physical therapy visit.

$384 was the CHARGE, not the payment, NOT the cost.

Get it?

Nobody pays $384 for a physical therapy visit.

Please, if you are an editor for the Washington Post, the USAToday, the Wall Street Journal, the New York Times, or a producer for any news network do NOT conflate charges with payments with costs. Don't embarrass yourselves by publishing op-eds and letters like this without explanation. You are morons.

Nobody pays $384 for a physical therapy visit.

Monday, July 08, 2013

The Cost of Prenatal Care

The New York Times has a lengthy article concerning the lack of price transparency in prenatal care and the apparent price gouging that occurs. This follows the theme of other news items covering the crisis is health care economics.


Like many reports on this topic, the NYT fails to differentiate adequately between costs and charges. The comments typically devolve into hand-wringing about the lack of “price” transparency and a flurry of opinions about how the system should be reformed.

Fine. But let’s define terms. “Charge” is the nominal amount on the price list by the hospital or doctor. This figure has almost no meaning since every insurance company and government entity negotiates a lower price for their members and risk pool. This refers to the upfront, non-discounted fee on the list.

“Cost” is the bottom line bare-bones amount of money needed to provide a service or supply, before profit. “Profit” is the net between what a good or service costs and the actual amount collected by the provider. I have no idea what "price" refers to.



The table shows the “amount paid” for prenatal care in the US versus other nations, but this is not completely accurate or at least only partially defined in the article. The table has a line below stating “amounts paid are the actual payments agreed to by insurance companies or other payers of services, and are lower than billed charges.” So far so good, but this still leaves out a clarification of how much disparity exists between payers, for example private insurance versus Medicaid. Who pays what amount?  Medicaid typically pays 50% of what private insurance would pay, so the $9775 figure is meaningless because the range might be $3000 to $15,000. And the actual cost, not addressed in this article or this chart, to the hospital/doctor might be $600 or $16,000. Who knows?

Another example of incomplete reporting is the discussion of obstetricians’ charges and collection. The NYT article says “[obstetricians] often charge a flat fee for their nine months of care, no matter how many visits are needed,... That fee can range from a high of more than $8,000 for a vaginal delivery in Manhattan to under $4,000 in Denver, according to Fair Health, which collects health care data.”

Useless reportage. They are referring to a charged fee and not the actual collected amount as negotiated by insurance companies and Medicaid (Medicare provides relatively little prenatal care since older and disabled women are less likely to get pregnant). How much is actually collected? Answer: it depends and varies A LOT. In my experience, our practice in Michigan charged $3600 global fee but then it would be discounted 40-75% with Medicaid paying less than $1000. Nobody ever paid $3600 because even the 1 or 2 cash paying patients every year got a steep discount negotiated upfront.

A “charge” is completely without pertinence. Administrators and bean counters know the bare-bones “cost” of particular services and supplies down to the penny but they are loathe to make that information known.  

The other poorly kept secret is that privately insured patients subsidize Medicaid patients who are receiving steeply discounted prenatal care. As an aside, I always wonder why any young couple bother to get married and pay for benefits. Being frank, from a finance standpoint they’d be better off having their kids out of wedlock while the woman can qualify for Medicaid. The father could make a 5 or 6-figure income, let the state pay for the prenatal care, and pocket more money. Why the hell not? Actually I’m sure some do make that conscious decision...but that's a digression.

The most important figure is not the “price” or the “charge” but the actual “cost”. The supplies, IV bags, gloves, gown, the epidural, 8 hours in a labor room, nurses’ salaries, etc, all have known costs. From there we can determine how much profit can be reasonably tacked on: 2%, 5%, 50%? Let’s get the numbers.  Then they can be extrapolated over a population, knowing that c-section rates are 25% and NICU admissions occur at a certain rate, etc.

To put a table that says “amount paid” is useless and to talk about “charges” is less than useless.

How much this cost disclosure would help individual consumers of health care is debateable. Given all the asymmetric information  I doubt it would help much at all. The value to knowing the cost is for payers-- Medicaid, Medicare and insurers-- to negotiate pricing from a more meaningful vantage point. Like most medical services, prenatal care is not a product that can reasonably be purchased by an individual looking at a line item price list. The costs should be borne by the entire society as a risk pool. I don’t care how much cost disclosure is available, no individual would be able to anticipate all the possible outcomes in labor and pay out of pocket for a complicated hospital course and, say, 12 weeks of neonatal intensive care.


This topic of charges and cost and profit is pertinent to the entire health care debate, but the thought of healthcare as a free market that would benefit from individuals knowing “prices” is wishful thinking. There is no free market in health care. If the ER doctor says your chest pain warrants a cardiac catheterization you don’t shop around for the best price. It might seem like we are empowered if we use our HSA debit card to pay a hospital or doctor’s bill, but it’s all a ruse; the real costs, the big ticket items, cannot be negotiated by a single person with an HSA account.

The kicker is that there is an organization that really does know the costs and uses that information in the real world: Medicare. They have the largest database of costs and negotiates fees based on this vast knowledge, called the resource-based relative value scale, or RBRVS. This is why Medicare is so damn efficient compared to private payers and state-run Medicaid, but that's another topic for another day.

Thursday, June 27, 2013

Book Review: Body by Science, by Doug McGuff, MD, and John Little

Five Stars out of Five. Highest recommendation.


STOP. Read this book before you do one more exercise routine.


McGuff is an Emergency physician with an avocation for fitness and John Little is a professional fitness trainer. Body by Science is subtitled “A research-based program for strength training, body-building and complete fitness in 12 minutes a week.” The authors cite empirical studies relating workout regimens and formulate a specific routine to most efficiently build muscle while burning fat.


Many of the principles outlined here are in contradistinction to modern convention about exercise. For example, the authors show that prolonged aerobic activity--such as long distance running-- does little to contribute to overall fitness and almost all runners have chronic injuries that limit their long term well-being. Most individuals can achieve their fitness goals more safely in very little time per week; likewise, most faddish regimens-- Tai Bo, Crossfit, P90X-- do little more than waste your time and can lead to serious injury.


While I am usually skeptical of anybody who purports to know a quick and easy way to achieve a difficult goal, I have to say that this book has extremely useful information about metabolism, biochemistry and muscle kinetics. The authors explain the evolutionary rationale for the exercise routine they advocate and also discuss diet, limiting grains and emphasizing whole foods.


On the savannah, prehistoric man evolved to exert himself in short bursts of highly intense activity: avoiding predatory lions or chasing game.  Successful individuals were also able to endure famine and dehydration and certain body habitus were selected. Today, endomorphs who store body fat are often looked upon as less fit than, say, Arnold Schwarzenegger or Sylvester Stallone, who are ectomorphic with more lean mass. Counterintuitively, however, individuals who have adequate fat stores are able to survive seasonal food shortages better than ectomorphs.


In fact, Stallone and Schwarzenegger are genetic mutants who likely would not do well on the prehistoric savannah. Large muscle mass inefficiently burns calories even at rest and these individuals, while looking fit in modern civilization must consume an inordinate amount of resources to maintain their basal metabolic rate.


The purpose of any exercise routine is not to look like Stallone. First of all, it would be impossible for most of us. McGuff and Little explain the genetics of muscle development and review the specific mutations discovered over the last decade, including myosin light chain kinase and myostatin genes among others.


The kernel of the book is the Big Five workout, encompassing slow movements using the largest muscle groups in the body. The authors liken exercise to a medical prescription, looking for the dose that will give the greatest benefit with minimal side effects. The BIg Five includes latissimus pull-downs, chest press, seated row, seated military press and leg press. The safest, most efficient method is to use Nautilus or other progressive cam machines.


Loss of muscle mass-- sarcopenia--  has deleterious implications as we age, limiting our activity and increasing our risk of injury. Building muscle is all-important to overall fitness, and the authors cite studies that show this regimen not only build muscle but also increase aerobic capacity and flexibility. Complex routines, such as Crossfit, on the other hand, are more likely to lead to injury and other practices like stretching actually can lead to muscle weakness.


The key to the Body by Science workout is to continue each exercise in a slow sustained movement until muscle failure. Done properly, you should feel quite uncomfortable at the end of each exercise. Think Neanderthal running from a Lion. The upside is that nothing builds mass and aerobic capacity as quickly as high intensity exercise ending in muscle failure.


The authors recommend 5-7 days rest between workouts. Youtube videos are available to view by googling “Doug McGuff doing the Big Five” or “Body by Science.” The videos make the routine look deceivingly easy, but with heavy weights and slow sustained muscle contraction your heart rate and respiratory rate elevates.


The review of diet is also important. I have always worked out and would consider myself fit-- able to run 5K’s and lift weights--  but chronically overweight. McGuff and Little are quick to implicate the workout industry in giving false expectations that exercise alone can lead to weight loss. Nope. The fact is that I eat too damn much and no amount of exercise will make up for that.

Personally, I found this book an invaluable and readable review of metabolism, genetics and muscle function. It has changed the way I exercise, reducing my risk of injury and increasing the efficiency of each workout. I still do other things, namely an hour-long highly intense full body aerobic regimen with a trainer, but the Body by Science workout has become a weekly added ritual.  I have noticed a significant increase in lean muscle mass, as measured by my trainer, and a generally improved sense of well-being.

Book Review: Lolita, by Vladimir Nabokov

Four stars out of Five.

Set in post-War United States, this story recounts the obsession of a European immigrant with adolescent girls, and Lolita in particular. Nabokov writes in the first person as the protagonist Humbert Humbert is awaiting trial for pederasty and murder. The account is a memoir of Humbert as he pursues the affection of Lolita the daughter of his landlady, taking the girl on a cross-country trip, engaging in illicit behavior and eventually the murder of her paramour.


I read this book because it’s on nearly every list of the best books of the 20th century and I had no idea what to expect.  In order to make a fair judgement since the topic is beyond controversial I purposely read no formal reviews of the book prior to starting. The book is almost beyond description.


On the one hand, the primary theme-- pedophilia-- is a contemptibly bad notion to incorporate as the primary topic of an entire novel, but Nabokov seems to have purposely chosen such a theme for the challenge of constructing a readable full-length novel on a tough subject. He succeeds in spades.


Nabokov exhibits his mastery of language, playing with words and phrases to entertain the reader, which is quite impressive given that Lolita is his first novel written in English, a language he learned as an adult.  Nabokov expounds on the difference between European continental lifestyle versus the United States middle-class style. Darkly comical, Humbert relates his opinion of the fatuity and lack of couth in America, all while engaging in the most vile acts imaginable.


Nabokov uses this novel as a vehicle to mock psychiatry and psychoanalysis. Humbert misleads psychiatrists and, just for fun, consciously confirms their biases toward unproven hypotheses about psychopathology. Another theme is the ease with which Humbert, a good-looking man of means, can easily skirt laws and conventions of behavior by virtue of his appearance.


Much of the book traces the travels of Humbert and Lolita across the United States by car, making this a road story of sorts. He describes the people and places from Connecticut through the Midwest and mountains and out to California.


Lolita, the novel, defies description. Nabokov seems to be attempting to make Humbert a sympathetic character but in the end Humbert becomes self-loathing, recognizing his flaws and the damage he has done to Lolita.


For the writing style and language this is among the best books written.   Recommended.

Wednesday, June 12, 2013

Book Review: Destiny of the Republic, by Candice Millard

Three Stars out of Five. Recommended.

James A. Garfield was an unlikely selection for president in 1880, having won the Republican nomination only after he was drafted at the convention due to an electoral impasse.  Within months of the general election he was shot in a Washington, DC train station and subsequently died.


Millard presents a favorable view of Garfield, the man, Union Civil War General, husband and father, and President. Her glowing depiction recounts his unification of party factions and calm demeanor under duress. Unfortunately, the reluctant Garfield only served as president a few months before being killed by Charles Guitaeu, a mentally disturbed office seeker.


One subplot in the story is the poor surgical care that Garfield received following the shooting. Conjecture is that his wounds were not life-threatening and that he died of fulminant sepsis due to the unsanitary practices of Dr. W. Willard Bliss, his attending physician.  Bliss, the same physician who attended Abraham Lincoln following his shooting 16 years prior, did not ascribe to the latest medical advances about hand washing and sterilization of instruments that was advocated at that time by British physician Sir Joseph Lister.


Millard also describes the frantic efforts made by Alexander Graham Bell, the young teacher and inventor, who tried to devise a method for finding the errant bullet sitting in Garfield’s abdomen. Before xrays (invented 20 years hence by Marie Curie) doctors had no way to image the patient looking for foreign bodies such as shrapnel and ammunition rounds. Bell contrived a prototype metal detector using electric current and capacitors for doctors to identify metal fragments in soft tissue.


Dr. Bliss, while inclined to help Garfield, was reluctant to allow a non-physician like Bell to attend to his patient. The device was implemented incorrectly and therefore failed to detect the bullet. Bliss, the other physicians, Garfield’s family, the nation, and Bell all watched as the President deteriorated and finally died of overwhelming infection two months after the shooting.


Millard’s book is easily read and provides a concise account of the the seminal events of the period. My only misgiving is trivial, i.e., that her characters are simplistic, either paragons of virtue or despicable villains. Oddly, the killer Guiteau is perhaps the most complex persona presented, shown to be conflicted, ambitious and mentally disturbed. Alternatively, Garfield and Bell apparently have no faults and Bliss is seen only with contempt.


Regardless, this is an educational book regarding events in US history about which I was unfamiliar. Her style is similar to Erik Larsen or David McCullough. Recommended.


Friday, May 31, 2013

Book Review: Midnight's Children, by Salman Rushdie

Four stars out of Five.

One Amazon reviewer likens Midnight’s Children to a detailed tapestry with layers of characters and events and symbols. Rushdie’s creation is indeed so complicated yet delicious in it’s imagery and emotion and history.


The book is a novelized history of the nascent Indian republic after it won independence from the United Kingdom in 1947. The new nation is personified in the protagonist Saleem Sinai who was born at the stroke of midnight on August 15th, the moment of the official transfer of power. Rushdie, who was actually born earlier in the year 1947,  writes mostly in first person with the Saleem’s family and life taking on many features of his own.


As in his other fictional works, Rushdie inserts magical realism, combining supernatural powers and phenomena with real events to give a more colorful and effective treatment of history. This is similar to Kurt Vonnegut’s use of time travel and interplanetary travel in his autobiographical novel  Slaughter-House Five. Both authors promote their political opinions regarding real-world events that they had been part of or had observed.


Midnight’s Children is also a saga of war and the transformation of a nation, similar to Margaret Mitchell’s Gone With the Wind. Additionally, both works have a main character who personifies the culture-- Scarlett O’Hara, the Old South; Saleem Sinai, colonial India-- experiencing evolution as a necessary adaptation to change that they encounter in the world.


At times I found Midnight’s Children frustrating in the sheer number of symbols and thematic motifs that must be interpreted. Knowing Indian history beforehand would be helpful as well. I read as a companion text the Reader’s Guide from Continuum Contemporaries written by Norbert Schurer. He adds much value to Midnight’s Children by providing some historical context as well as pointing out much of the symbolism. Also, Sparknotes has some helpful analysis.


Salman Rushdie is a serious writer and Midnight’s Children is an award winning novel that is not for the faint of heart. Not only is it lengthy, but it contains advanced vocabulary, lots of characters, heavy themes and weird literary devices like run-on sentences and giving characters magical powers. Unlike Mitchell’s Gone With the Wind, readers of Midnight’s Children not only have to wade through history and war and a long family saga, but also supernatural symbolism, religion, social ills and enough leitmotifs to drop a pony.  

Annoyed, I had given up reading Midnight’s Children at page 100 a few years ago but finally completed the task this month. A few months ago I read Rushdie’s non-fiction memoir Joseph Anton (reviewed here), and was thus motivated to finish Midnight’s Children now in advance of the recently released movie.  Nobody will absorb all of Midnight’s Children at the first reading, but it is an impressive piece of writing.

Saturday, May 04, 2013

Book Review: The Signal and the Noise, by Nate Silver

Five stars out of five.

I remember watching the TV series Quantum Leap years ago, starring Scott Bakula and Dean Stockwell who traveled through time and lived at the whim of ever-changing Bayesian probabilities. Whatever predicament they encountered has associated chance of solution or death as spit out by Stockwell’s computer named Ziggy. As the conditions changed, say, a bad guy presents himself, Stockwell would translate the changing probabilities: “Ziggy says you have a 85% chance of dying.” With a bad guy vanquished, it would change, “Ziggy now says you have only a 15% chance of dying.”

Nate Silver’s The Signal and the Noise explains the phenomenon of prior probability that subsequently changes with conditions that was first presented as Bayes Theorem three hundred years ago. Silver is a professional poker player who made his “f**k you” money by selling software to analyze baseball statistics. Recently he became a phenomenon of sorts by successfully predicting all 50 state elections in 2012 and currently writes the always informational “five-thirty-eight” blog for the New York Times.

The Signal and the Noise is a more comprehensive discussion of Bayesian probabilities and how they affect almost everything humans do. An engineer friends says that every high school kid should read Silver’s book just to get an idea of how probability works and to hone critical thinking skills. I cannot disagree.

Okay, Silver is concerned with more than the theory of Thomas Bayes, he begins by discussing the huge explosion of data available to humans beginning with the Gutenberg printing press and evolving to the electronic databases today. He also points out that humans are unduly flawed because we too often seek confirmation of our own ideas instead of critically parsing all this information. Political pundits are notorious for
stoking the confirmation biases of their customers, which has been shown by the likes of Dick Morris and Karl Rove claiming to “have the math” only to be embarrassingly wrong on the outcome of recent elections. But they aren’t embarrassed-- they aren’t paid to be correct, only to confirm bias.

Silver also uses the baseball player Dustin Pedroia as an example of the failure of Big Data. On paper, or more accurately, using computer stats, a guy like Pedroia should never have made it into Major League baseball: he’s too small, too slow, not a very powerful hitter and can’t throw very well. Instead of failing, Pedroia is an all-star and a winner. What gives? There are intangibles, data is never able to be completely known. All the stats in the world cannot always be interpreted perfectly.

Separating what’s important (the signal) from confusing interference (the noise) is the key to forecasting any natural event or human phenomenon. We are good at forecasting some things like weather and hurricanes, but poor at predicting other things like earthquakes and terror attacks. Silver is an excellent explainer of how we know things and the limitations of that knowledge. He uses a wide-ranging array of interesting stories: from bird flu and climate to Donald Rumsfeld and poker. Refreshingly, I find no ideological or political preferences in his discussion.

This book is highly recommended.

Friday, April 05, 2013