A proposal for lower health care costs

[ITR_champion]

In my most recent thread about health care, some folks suggested that I offer my own solutions to the problem of rising costs. It’s a reasonable thing to ask for. Among politicians and pundits, complaints about the problem are far more common than offers of constructive solutions. I’ve offered some solutions in the past. In this thread, I suggested that many prescription drugs should be made available over-the-counter. This would save time and money for buyers, and save doctors from wasting time writing endless prescription refills. Here I suggested that people of all ages should be allowed to purchase catastrophic coverage for their health insurance, which is cheaper than the “platinum”, “gold”, “silver”, or “bronze” plans available on exchanges. Currently only those below the age of 30 can purchase catastrophic coverage under the ACA.

Now I propose another way to cut health care costs: eliminate the ICD-10.

You may be asking, what is the ICD-10? Well, it’s not the DSM 5–that’s a completely different medical bureaucratic nightmare. The ICD-10 is a system for classifying and reporting medical diagnoses and other information. Doctors, hospitals, and other health care providers are required to use it for reporting to insurance companies, data gathering, and so forth. Every diagnosis has a specific code which must be entered on the relevant forms.

So, for example, if a doctor treats a patient who was bitten by a duck, the code is W61.61XA. (For the initial encounter, that is. For subsequent encounters it’s W61.61XD.) If the patient was struck by a duck, the code is W61.62XA. Other encounters with a duck would fall under W61.69XA. If the patient is pecked by a chicken, we’d want code W61.33XA. If it was a macaw, we’d need W61.11XA.

Nor should we worry that only injuries involving birds are covered. For injuries caused by nonvenomous frogs, there’s a code: W62.0XXA. Code W56.01XA covers dolphin bites, while “crushed by alligator” falls under W58.03XA. (Bitten by alligator, on the other hand, is W58.01XA) T63.633A covers assaults with toxic sea anemones, while T63.632A covers self-inflicted sea anemone injuries.

If you’re injured by an exploding hang-glider, you’ve no need to fret; V96.15XA covers that. (There are separate codes for injuries when hang gliders crash, collide, have forced landings, or catch on fire.) If you have “acquired absence of right hand”, you’d need code Z89.111, while “acquired absence of left hand” is code Z89.112. And if you can’t tell which hand you’ve acquired an absence of, don’t worry: there’s a code for that too (Z89.119)

If you get injured in an opera house, the code for that is Y92.253. In a chicken coop? Try Y92.72. Bathroom of an orphanage? Y92.111. For injuries playing a musical instrument, Y93.J is the code you want. Some codes don’t seem to have much to do with injuries or illness at all. R46.1 is “bizarre personal appearance”. Z62.1 is parental over protection. And Joe Biden’s doctor will presumably make use of Z73.4, “inadequate social skills”.

Overall the system gives the impression that it was designed by a monkey with F14.151, or perhaps F14.150, F14.251, or F14.250. For doctors, however, it’s no laughing matter. The American Medical Association has joined with 82 smaller groups and sent a letter to the government agency that requires them to implement this system, noting that “physicians will have to spend anywhere from $83,000 to $2.7 million to implement ICD-10”. That’s a lot of money, and costs will, of course, be passed along to patients. If the government just cancelled the ICD-10 and stuck with the perfectly adequate ICD-9 now in use, it would help keep health care costs down.

[Wesley_Clark]

Some of us do not trust the AMA, so if the AMA is against something that is not automatically a bad thing. The AMA was against medicare, opposes single payer and has worked to keep the supply of physicians low to increase physician wages (which drives up health care costs). If anything, if the AMA is against something I look at it like the health insurance or pharma industry being against something. It is more than likely good for consumers and patients in that case. Like negotiating prices, a public option or buying drugs overseas.

Having said that, I don’t know enough about ICD-10 to comment. However the AMA being against it doesn’t sway me, if anything it has the opposite effect.

American Medical Association

The AMA has one of the largest political lobbying budgets of any organization in the United States.[6] Its political positions throughout its history have often been controversial. In the 1930s, the AMA attempted to prohibit its members from working for the then-primitive health maintenance organizations that had sprung up during the Great Depression, which violated the Sherman Antitrust Act and resulted in a conviction ultimately affirmed by the US Supreme Court.[7] The AMA’s vehement campaign against Medicare in the 1950s and 1960s included the Operation Coffee Cup supported by Ronald Reagan. Since the enactment of Medicare, the AMA reversed its position and now opposes any “cut to Medicare funding or shift [of] increased costs to beneficiaries at the expense of the quality or accessibility of care”. However, the AMA remains opposed to any single-payer health care plan that might enact a National Health Service in the United States, such as the United States National Health Care Act. In the 1990s, the organization was part of the coalition that defeated the health care reform advanced by Hillary and Bill Clinton.

[Martin_Hyde]

I would say more OTC drugs would be a good move, and I guess reforming the diagnostic manuals, maybe.

There’s a great book I just got done reading about Obamacare and the two forces in the Obama Administration that were fighting for different visions for the plan. The policy wonks were fighting for the concept of universal coverage, the economists were fighting for reigning in out of control costs. Both are important goals, but my argument is the latter is the most important–because universal but unaffordable coverage does no one much good. Of course the best approach would have been a plan that got both things, because that’s what is really needed, and any plan that got at least one of those two goals improved us from where we were before.

Unfortunately the reason the policy wonks won and Obamacare went the way it did is largely because of back deal agreements/negotiations between the administration and the healthcare industry. Obamacare largely protected incumbent rent-seekers.

I’ve said many times that while the boogeyman in American healthcare are the insurance companies, the true cost drivers are the hospitals and healthcare providers in general–these entities charge vastly more than their costs for many routine procedures and diagnostic tests, in a way that simply could never be sustained in a competitive free market. But the insurance companies are largely the “why” as to how this happens. Because of the insulating role they provide between customers and providers, it makes it far easier for providers to jack up prices to astronomical sums for anyone who is “out of network”, negotiate down from there for the insurance companies (after chopping off the insane rates they charge generally they are left with still vastly inflated charges to their customers) and it all “works” because the insurance companies collect enough in premiums from the huge portion of their customers that go years or more without so much as a visit to a GP that they can afford to pay astronomical sums for those that get treatment.

It works out well for the healthcare providers, because they do not have to rein in costs since the insurance model guarantees they can collect their astronomical sums anytime an insured patient comes in. The uninsured or out of network patients are just gravy, because they get fleeced to bankruptcy with the provider collecting mountains of their cash in the process and then selling the debt to collections agencies after they’ve wrung as much blood from the stone as they can.

Working from the starting point of “what can be achieved in the United States”, I think government programs to help expand and promote integrated managed care organisations (like Kaiser Permanente) is the way to go. These companies combine the full scope of healthcare. There is no insurer collecting rents because Kaiser collects the monthly premiums directly and uses it to fund its ongoing operations. The hospitals and doctors are all employees, paid a salary (not paid for per procedure) so they have no incentive to increase the company’s costs by performing unnecessary diagnostic tests and procedures just to inflate a bill. Since Kaiser has no insurance middleman between it and its customers, it also has to manage things such that the premiums they collect are enough to pay for the real costs of care of their customers who get sick + enough to be profitable. It also has to compete with marketplace premiums and ordinary insurance company premiums, so it has an incentive to not charge penurious premiums (also the fact that some of its customers simply wouldn’t continue being customers past a certain point.) This actually gives such organisations an incentive to try and operate as efficiently as possible without fleecing their customers. The added fact of a network of salaried employee general practice physicians also mean they can better make sure that more of their customers get ordinary doctor care versus emergency care, which controls costs for both sides of the equation as well.

[Wesley_Clark]

Articles, tips, research & EHR benefits | athenahealth blog

Their early research predicted the conversion to ICD-10 could cost the health care industry between $475 million and $1.5 billion over ten years, costs that would come from staff training, loss of productivity, and changing systems. On the plus side, however, the study also predicted great financial gain as a result of the changeover, assuming that, over the same ten years, the industry would gain between $700 million to $7.7 billion in cost savings.1 This is an estimate that can’t be ignored in the complicated world of medical billing and medical billing codes.

I still don’t know a lot about this, but why is this a bad thing if the above is true? $475m to $1.5b to implement, resulting in $700m to $7.7b in savings over the same time period? Out of our 2.9 trillion health care system the cost and savings are a drop in the bucket, but evenso according to that the savings will be higher than the costs.

A different study in that same article predicts even more savings.

In 2011, the U.S. Department of Health and Human Services (HHS) estimated that the overall cost of transitioning from ICD-9 diagnosis and medical procedure codes to ICD-10 codes would be $1.64 billion. This estimate includes $357 million for staff training, $572 million for losses in productivity, and $713 for system changes. The good news is the HHS’ savings prediction is greater too, estimating that health care entities will save more than $87.7 million annually—and as much as $3.95 billion by 2023

[The_Joker_and_the_Thief]

Martin Hyde, what was the name of the book?

Another popular idea (among conservatives, at least) is reducing the cost of medical malpractice insurance. The general argument is that flaws in the legal system lead to increased risk of catastrophically large payouts against doctors, increasing the price of malpractice insurance and causing doctors to perform defensive medicine, both of which increase the price of medical care. The general methods to achieve malpractice reform are limits on non-economic damages (e.g pain and suffering) and reductions in the statue of limitations. The downside is that this idea doesn’t seem to be very effective; malpractice costs are a small portion of healthcare spending, and malpractice reform just doesn’t work very well.

[Nametag]

Yeah, “tort reform” accomplishes nothing. Malpractice awards are a tiny fraction of spending, and when they’re capped, insurers still have no incentive to reduce premiums (which still go up when there’s a claim). It’s apparently not a very competitive business.

[Wesley_Clark]

@Nametag

Yeah, “tort reform” accomplishes nothing. Malpractice awards are a tiny fraction of spending, and when they’re capped, insurers still have no incentive to reduce premiums (which still go up when there’s a claim). It’s apparently not a very competitive business.

It doesn’t seem to do much to reduce defensive medicine either.

I’ve heard that in other OECD nations, if you have an illness they treat it like you are the average patient. In the US they treat every patient like they are in the 1% who will have the most complications and want tons of treatment and diagnostics that most people won’t need. I don’t know how true it is, but I don’t know if malpractice reform stops that from happening.

[Dewey_Finn]

@Wesley_Clark

I still don’t know a lot about this, but why is this a bad thing if the above is true? $475m to $1.5b to implement, resulting in $700m to $7.7b in savings over the same time period? Out of our 2.9 trillion health care system the cost and savings are a drop in the bucket, but evenso according to that the savings will be higher than the costs.

Another thing to be aware of is that many hospital systems and other health care organizations have already spent a lot of money on the implementation, especially as the current deployment date of October 1, 2015 is after previous deployment dates were pushed back. So how much would be saved if CMS cancelled deployment?

Also, note that other countries have already switched to ICD10. (The standard is over twenty years old.) So if the US chose to stick with ICD9, it will complicate any international work.

[Twoflower]

All I can tell from the OP is that it must be bad, since it has codes for humorous-sounding conditions. Is there a code for møøse bites? For recto-cranial inversion?

[Ravenman]

Wait - how does not implementing something in the future result in savings today?

The question that has been asked of the OP in several threads is how to make health care cheaper and more available. The other suggestions should be taken seriously, but this health code thing is not a proposal to make health care cheaper. To wit: if I announce that next year I’m going to buy a Tesla S, even though I can’t afford it; suggesting that I don’t buy the Tesla doesn’t actually improve my current condition. It just means i would not make it worse.

but one other question: does the OP support a mandate that all people buy at least catastrophic coverage?

[Smapti]

Is the idea here to have a code ready for any conceivable cause of injury in case it ever comes up, or are these things that have actually happened?

Because I’d kind of like to know the stories of the people who were crushed by an alligator, injured while operating an exploding hang-glider, gradually lost an unknown hand, struck by a duck, or injured in a spaceship collision.

[GrumpyBunny]

You know that the industry has been preparing for ICD-10 for years, and go-live will be this October, right?

I know what a pain in the ass I-10 is; I’ve been working on it for the past few years.

But, I imagine that most of the money has been spent, and imagine it’s an even bigger waste of money to stop the project just before completion, which is projected to help save money.

[GrumpyBunny]

@Smapti

Because I’d kind of like to know the stories of the people who were … injured in a spaceship collision.

Well, there’s already at least one code for spaceship injury in ICD-9. I’ve used it for system testing. Dork humor.

[Dewey_Finn]

Remember that ICD-9, the system we’re currently using, was designed in the late 1970s and only now is being replaced in the US. So we might still be using ICD-10 forty years from now. Obviously, today, a spaceship collision is unlikely. But who knows whether it will be more likely twenty or thirty years from now? The idea is to have codes to allow for even unlikely events.

[Martin_Hyde]

@The_Joker_and_the_Thief

Martin Hyde, what was the name of the book?

Link, “America’s Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System”, it’s available in Kindle format. It’s by the same guy who read a really good long-form article for Time awhile back on all the issues with our healthcare system, my appreciation of that article is why I read this when I heard about it.

Another popular idea (among conservatives, at least) is reducing the cost of medical malpractice insurance. The general argument is that flaws in the legal system lead to increased risk of catastrophically large payouts against doctors, increasing the price of malpractice insurance and causing doctors to perform defensive medicine, both of which increase the price of medical care. The general methods to achieve malpractice reform are limits on non-economic damages (e.g pain and suffering) and reductions in the statue of limitations. The downside is that this idea doesn’t seem to be very effective; malpractice costs are a small portion of healthcare spending, and malpractice reform just doesn’t work very well.

Yeah, it’s fun to blame the various lawyers that make their money litigating on behalf of individuals who suffers torts from the powerful in society (doctors, companies etc) but the out of whack medical malpractice suits are way overblown. I wouldn’t mind medical malpractice payouts being capped at cost of injuries (which means cost for any life long care that may be needed because of them) + some substantial pain and suffering maximum, the exact threshold of which I’m not sure. I mean even if a doctor kills someone due to malpractice, reasonably that shouldn’t be a $10m payout. But $1-2m isn’t unreasonable as a pain and suffering component of such a suit.

[iamthewalrus_3]

It’s fun to quote codes for silly-sounding injuries, but I don’t see how that’s much of an argument for not having a system that allows them. And the statistical knowledge that could be derived from detailed information about all injuries and illnesses could be incredibly valuable.

A significant amount of current and future economic and scientific progress will be based on careful collection and analysis of data.

But is the ICD-10 worth it? I have no idea. Do you?

Do you have a substantive argument here? Are you opposed to the concept of a standardized coding system entirely, or do you just think the existing one is better? Or good enough? What are the shortcomings of the existing system? Will it always be proper to keep the current system, or is there a point at which we’d need to upgrade? On what basis would you make that decision? (Hint: It probably shouldn’t have much to do with how many duck-based injuries the new system can encode)

@ITR_champion

“physicians will have to spend anywhere from $83,000 to $2.7 million to implement ICD-10”.

Ok, so that’s the cost (though I’m not convinced that an estimation of costs that varies by well over an order of magnitude is worth much at all). What are the benefits?

[Really_Not_All_That_Bright]

@The_Joker_and_the_Thief

Another popular idea (among conservatives, at least) is reducing the cost of medical malpractice insurance. The general argument is that flaws in the legal system lead to increased risk of catastrophically large payouts against doctors, increasing the price of malpractice insurance and causing doctors to perform defensive medicine, both of which increase the price of medical care. The general methods to achieve malpractice reform are limits on non-economic damages (e.g pain and suffering) and reductions in the statue of limitations. The downside is that this idea doesn’t seem to be very effective; malpractice costs are a small portion of healthcare spending, and malpractice reform just doesn’t work very well.

That’s not quite true: there is one type of malpractice reform that works very well. Namely, pulling licenses from physicians. Something like 60% of malpractice claims are made against a very small group of physicians (5-10%, depending on the jurisdiction and practice area.)

The AMA is strongly in favor of tort reform, because it will (at least in theory) reduce the cost of doing business for its members. Oddly, it is not in favor of more stringent licensing requirements. Wonder why that is?

[DrCube]

@Dewey_Finn

Remember that ICD-9, the system we’re currently using, was designed in the late 1970s and only now is being replaced in the US. So we might still be using ICD-10 forty years from now. Obviously, today, a spaceship collision is unlikely. But who knows whether it will be more likely twenty or thirty years from now? The idea is to have codes to allow for even unlikely events.

Why? Why do we need a code for unlikely events?

Especially since we’ve had an infinitely flexible code for a thousand years, called “English”. The code in that system for spaceship injury would be “spaceship injury”. It also covers simple ailments like “the flu” and “a broken arm” or health problems we haven’t even thought of yet like “tentacle-ization” and “gustatory plague”. And it costs $0 to implement and no one needs special training.

[Really_Not_All_That_Bright]

“Crushed to death by falling spaceship, resulting in double knee arthroplasty and multiple trepanning” doesn’t fit on the billing forms.

[Eonwe]

ICD-10 is also designed to be much more useful for research and treatment. The more refined and specific data doctors are collecting, a) the more complete medical history a patient has, and b) the more researchers will be able to analyze national data about disease/illness diagnosis and treatment.

@DrCube

Why? Why do we need a code for unlikely events?

Especially since we’ve had an infinitely flexible code for a thousand years, called “English”. The code in that system for spaceship injury would be “spaceship injury”. It also covers simple ailments like “the flu” and “a broken arm” or health problems we haven’t even thought of yet like “tentacle-ization” and “gustatory plague”. And it costs $0 to implement and no one needs special training.

Sure, but what if we want to know whether or not people in Appalachia have been diagnosed with more cases of Spaceship Injury since the coal industry started fracking on a large scale.

How do I look up that information? What if one doctor calls it “spaceship injury” another “rocket injury” another “space shp.” another “injury: space shuttle-induced,” and another “injury.”?

Having standardized diagnosis codes is a good idea. Updating those codes after 40 years is a good idea.

ITR Champion, what are your projected savings per person insured per year, if ICD-10 gets scuttled, and we continue with the current coding system? Does the current system cost us money and/or inhibit good care? If so, how should we address those issues? If not, why did ICD-10 get implemented in the first place? Are there some procedures that doctors currently have challenges getting reimbursed properly for due to coding not being descriptive enough?