Bacon's Rebellion

Democracy Thrives in Sunlight

How Virginia Blocks Healthcare Innovation

—

by

James A. Bacon
in , ,

Crushing innovation

by James C. Sherlock

Jason Hwang and Clay Christensen in 2008 published “Disruptive Innovation In Health Care Delivery: A Framework For Business-Model Innovation.”[1] They observed, “Health care remains expensive and inaccessible to many because of the lack of business-model innovation.”

They further wrote: “It is almost requisite that any discussion about the future of health care begin with a reference to the unsustainable growth rate of U.S. medical spending. Charts and graphs expound on health care’s accelerating share of gross domestic product (GDP), depicting a voracious beast that threatens to swallow what little money remains for other vital services.”[2]

The regional monopolies that dominate Virginia healthcare are motivated by their bottom lines, not yours or the government’s. Innovation has been blocked in the Commonwealth for two familiar reasons: the high stone wall of COPN and the economic and political power of the regional monopolies that COPN has built and protects.

“In health care, most technological enablers have failed to bring about lower costs, higher quality, and greater accessibility,” Hwang and Christensen observed. “Legacy institutions of health care delivery are jumbled mixtures of multiple business models struggling to delivery value out of chaos.”[3]

The most profound examples of conflicting business models in healthcare are vertically integrated health systems.

The most complex of these in Virginia, Sentara Healthcare, a self-declared nonprofit, is a conglomerate comprised of 62 tightly controlled businesses including acute care and rehab hospitals, outpatient ambulatory surgical centers, diagnostic imagery centers, physicians practices, home health businesses, a large HMO and overseas reinsurer components among others. These are a mix of for-profit and nonprofit businesses, the most profitable of which are the nonprofits.

The business interests and ethical obligations of the management of hospitals and health insurers, just to pick two, are directly opposed. Hospital-centric health systems like Sentara, or even state-owned VCU Health, achieve nearly all of their corporate profits through their acute care hospitals. The rest of the components of the enterprise are managed to support that outcome. They own physicians practices to control referrals. They own HMOs with narrow networks to ensure a steady flow of the most profitable patients to their own hospitals. They make enormous profits. The compensation of the CEO of Sentara Healthcare was $5.2 million in 2017.[4]  What would motivate him to voluntarily to lower prices?

The problem is not that proven innovation is unavailable in America, it is just not available in Virginia. Consider…

Pennsylvania-based Geisinger’s is a leader in new healthcare models. A new eight-suite community childbirth center in Scranton, Pa., staffed with nurse midwives and OB/GYNs is hugely popular.  Its home care model uses teams of medical professionals to treat vulnerable patients in their home. The results: In 18 months, “for the more than 5,000 patients that have been enrolled in the program we’ve seen a 35% drop in emergency department visits, a 40% decline in hospital admissions, and an average annual reduction in spending per patient of almost $8,000. Most important for patients is their improved quality of life.”[5]

Why does nothing like that exist in Virginia? Because model that results in a significant annual reduction of spending per patient is fiercely opposed by many Virginia hospitals.

The Commonwealth has defended COPN’s denial of equal access to companies from other states in federal court. Here are some questions to ask of your local hospital to understand its approach to accountability.

  • Is every physician paid a salary rather than paid for his/her contribution to revenue?
  • Is there a senior physician assigned direct accountability for your care when you are admitted as an inpatient?
  • If so, is he or she a specialist in your primary medical issue?
  • Does he or she have the authority to assemble a team for fully integrated care in cases of difficult diagnoses or co-morbidities? Is your primary care physician encouraged to participate?

If the answers to those questions are all yes, congratulations, your local hospital may be the Mayo Clinic. Physicians whose practices are owned by hospital systems or who help staff them as independent practices have to trust the management of those systems to shift to a Mayo Clinic model. They by and large do not in Virginia because of the way the regional monopolies treat them.

Association health plans (AHPs), in which small employers band together to get double digit insurance savings, were legalized by a Labor Department rule in 2018 and successfully implemented in 13 states. Attorney General Mark Herring, always stalwart in his opposition to choices in healthcare, joined 10 other states in a suit to reverse the federal rule that was successful at the federal district court level. It is in the appeals process.

A bill in the 2020 General Assembly to emulate Maryland’s highly successful exemption of physician-owned surgical centers from its Certificate of Need law was defeated. It would have saved Virginia patients hundreds of millions of dollars annually, but the hospital lobby predictably was stronger than the public interest.

The General Assembly even defeated a bill to bring better primary care to the poorest areas of Virginia through Health Enterprise Zones, another successful Maryland innovation that has improved access and public health and lowered Medicaid costs. It was reportedly defeated because the Democrats did not want its Republican sponsor to get credit.

I intend to seek in the 2021 General Assembly sponsorship of a bill modifying Virginia law to grant permanent COPN exemptions to Mayo Clinic, the best hospital the world, and Cleveland Clinic, the best heart hospital in the world, should either or both wish to establish Mid-Atlantic regional centers in Virginia.  It will be fun to watch the angst among the people’s representatives.

James C. Sherlock, a Virginia Beach resident, is a retired Navy Captain and a certified enterprise architect. As a private citizen, he has researched and written about the business of healthcare in Virginia. 

[1]

HEALTH AFFAIRS ~ Volume 27, Number 5, pgs 1329 – 1335

[2] ibid.

[3] ibid.

[4] Sentara Healthcare, Form 990, Return of Organization Exempt from Income Tax, 2017

[5] Janet F. Tomcavage, Jaewon Ryu and Sanjay Doddamani, Geisinger’s Home Care Program Is Cutting Costs and Improving Outcomes, Harvard Business Review, November 6, 2019

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28 responses to “How Virginia Blocks Healthcare Innovation”

  1. LarrytheG Avatar
    LarrytheG

    But none of these problems are unique to Virginia. They are, in fact, endemic in healthcare across the country.

    ANY industry, whether it be healthcare, or electricity or higher ed, or autos or milk or gasoline – are affected by demand. If demand is strong, the price will not reduce.

    The problem with health care is that the vast majority of the customers are not paying directly from their own money. Most of them are having their health care paid for by “reimbursements” from their insurance. There is no reason for providers to be “competitive” because the reimbursement is fixed no matter the “price”.

    The Heritage folks say that this problem is driven by unlimited (not capped) employer-sponsored health insurance so that any increases in the provider world just show up as annual premium increases, weeks/months af the healthcare was “purchased”. Additionally, with most employers, there is not a true “market” of choices with a variety of prices for different insurance coverage.. it’s often one or two, take it or leave it.

    And if you have employer-provided, you cannot go look at alternatives under ObamaCare/ACA. You are specifically denied that option if the employer offers insurance.

    Everyone wants to blame something but the way we do health insurance is at least one villain that escapes blame most of the time.

    We just don’t have a real “market” where consumers affect what is offered and for one price.

    Our remedy is to advocate that the govt “do something” to make them compete and that the providers are powerful in stopping that.

    No other developed country has this problem. Every one of them, the govt has taken control of healthcare – and most of those countries have private health care not govt-provided – except for the UK.

    They control health care and as a result they pay 1/2 what we do.

    And so we argue long and hard about how to fix it but the bottom line is we fail miserably at what every other developed country has been successful at.

    Here’s the Heritage foundation link: https://www.heritage.org/health-care-reform/report/employer-based-health-insurance-why-congress-should-cap-tax-benefits

  2. sherlockj Avatar
    sherlockj

    Larry, another of your straw men is burning brightly. My article above is in part about the government of Virginia limiting supply in the face of strong demand. That will keep prices high in any market. The Commonwealth actively blocks more efficient models of healthcare delivery that have been proven to reduce cost. Read it again. What we need in that specific case is not more government, but less.
    In the case of enforcing the antitrust laws, we need the government to do a job we have already assigned it.

  3. LarrytheG Avatar
    LarrytheG

    Jim – Insurance companies determine reimbursement rates. They pay X dollars for an MRI no matter which provider does it and the people getting them have no idea what the costs are if it is covered by their insurance.

    I just point out that Virginia is not unique on these issues. There is nothing specific to Virginia that makes Virginia healthcare costs higher than other states – because of the way Virginia government is doing anything.

    If you could point out – for instance – that some health care services in Virginia was higher than other states and point to a specific reason due to something Virginia does and not other states – you’d have a strong argument.

    But you’re just pointing to something in Virginia and claiming it’s causing higher costs without really connecting the dots or showing that it’s something unique to Virginia.

    That’s not a strawman guy – that’s dealing with facts instead of distractions.

    Read the Heritage study – it talks about these issues. The insurance companies determine prices – in Virginia and other states and yes they are a powerful lobby also. Hospitals can set prices all day long but if the insurance company only pays a given reimbursement – it’s the insurance companies deciding, not the hospitals.

  4. LarrytheG Avatar
    LarrytheG

    But none of these problems are unique to Virginia. They are, in fact, endemic in healthcare across the country.

    ANY industry, whether it be healthcare, or electricity or higher ed, or autos or milk or gasoline – are affected by demand. If demand is strong, the price will not reduce.

    The problem with health care is that the vast majority of the customers are not paying directly from their own money. Most of them are having their health care paid for by “reimbursements” from their insurance. There is no reason for providers to be “competitive” because the reimbursement is fixed no matter the “price”.

    The Heritage folks say that this problem is driven by unlimited (not capped) employer-sponsored health insurance so that any increases in the provider world just show up as annual premium increases, weeks/months af the healthcare was “purchased”. Additionally, with most employers, there is not a true “market” of choices with a variety of prices for different insurance coverage.. it’s often one or two, take it or leave it.

    And if you have employer-provided, you cannot go look at alternatives under ObamaCare/ACA. You are specifically denied that option if the employer offers insurance.

    Everyone wants to blame something but the way we do health insurance is at least one villain that escapes blame most of the time.

    We just don’t have a real “market” where consumers affect what is offered and for one price.

    Our remedy is to advocate that the govt “do something” to make them compete and that the providers are powerful in stopping that.

    No other developed country has this problem. Every one of them, the govt has taken control of healthcare – and most of those countries have private health care not govt-provided – except for the UK.

    They control health care and as a result they pay 1/2 what we do.

    And so we argue long and hard about how to fix it but the bottom line is we fail miserably at what every other developed country has been successful at.

    Here’s the Heritage foundation link: https://www.heritage.org/health-care-reform/report/employer-based-health-insurance-why-congress-should-cap-tax-benefits

  5. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Jim, thank you for another excellent article.

    What is your take on this quote set out below?

    “Medical Care. Health care provides a quintessential illustration of the potential gap between price increases perceived by households and inflation perceived by economists. The BLS estimate for medical inflation appears far lower than the rate at which households are seeing health-care costs rise. BLS reports that medical care prices have risen 93% from 1999 to 2018;20 but during the same period, the average family health-insurance premium has increased by 239%.21

    Two key factors help to explain this gap: first, when medical care increases in price because it has improved in quality—for instance, thanks to the introduction of a superior but costlier procedure, drug, or device—those price increases are not considered inflationary because the patient is getting greater value for the greater cost. This is an example of quality adjustment.

    Second, many purchases of medical care are intermediated by insurance, which inflation analyses strive explicitly to disregard. But the presence of insurance has critical implications for a household. Its costs are determined by the behavior of all participants in their risk pool rather than their own choices. When people across society consume greater quantities of medical care, the cost of health insurance will rise even if the prices of individual medical services have not, and even for households that consume a lower quantity. Both market and regulatory forces will typically preclude a household from consuming its own preferred bundle of health-care services as opposed to the one reflected by the standard set of insurance offerings.”

    For more see: https://media4.manhattan-institute.org/sites/default/files/the-cost-of-thriving-index-OC.pdf

    1. sherlockj Avatar
      sherlockj

      I agree with the quote, Reed. I think what is missing in the quote is the issue of deductibles and co-pays. In my very first essay in this space, I provided documentation of the single most egregious example of unpunished crime I have seen in almost 14 years of studying the rather arcane subject of the business of healthcare in Virginia. That was what I call the rape of Charlottesville. In 2018, The people in that area of the state whose only access to health insurance was the ACA exchange were forced to pay the highest rates in America when Optima was left as the only seller. Family of 4, 40 yr. old parents, $50,000 a year in premiums. But the max out of pocket in deductibles and co-pays on that policy were $11,900 a year if memory serves. Whatever the deductible is has to be paid out of pocket before the policy pays anything. Once the deductible is paid, then that family paid say 20% of the bill until that $11,500 was spent. That is the absolute worst case in the nation and in my mind should be prosecuted, but it illustrates the point. After Americans have budgeted for high premiums, many have to borrow to pay for deductibles and co-pays. Commercial insurance prices are traceable to high healthcare prices – in Virginia without completion in many markets there is no effective upper limit to prices monopoly hospitals can charge – and the markup of those prices by insurers based on their assessment of risk and profit they deem necessary to justify their costs and risks. We also must understand that the government reimburses healthcare below its costs and depends on commercial insurance to keep the system running. It’s a mess. Those that offer single payer as a solution often do the math from the artificially low prices government currently pays. It is a demonstrably false baseline.

  6. sherlockj Avatar
    sherlockj

    Larry, you are in over your head here. vhi.org reports that in 2019 an MRI on a back in a hospital outpatient department cost $1884 and in a physician office cost $599. You are not unique in your ignorance of that fact, but most people don’t opine on it. See https://vhi.org/HealthcarePricing/default.asp
    You are also wrong about Virginia not doing anything different than other states. Only a half dozen or so have a certificate of need law as restrictive as Virginia’s. Read my essay above. It is clear you have not. I point out five examples of successful medical care delivery models that lower costs in other states that are not available in Virginia. I sometimes think you troll this space, read the headline and shoot out your opinion, often utterly disconnected from the text of the essay. That is certainly true in this case.

  7. LarrytheG Avatar
    LarrytheG

    Hey Jim – don’t get upset when I comment. I fully acknowledge that I am ignorant on a bunch of issues, I just add that I’m not alone. We all are , just on different issues.

    On the MRI thing – I do not dispute those numbers – I just point out that it’s insurance that pays for them usually not the individuals and hence most don’t shop around. Kind of odd – per the CON discussion where hospitals were supposedly charging more because other providers could not have that equipment. Here we have a situation where the hospital is LESS. Interesting!

    I DID read your article and noted the Pennsylvania thing but no two states are exactly alike as to what they allow or not – that alone does not tell us that because of such innovations that that state has lower health care costs. So that’s what I look for in articles that talk about innovation. It’s more than just if they “innovate” – it has to actually yield better results not just a belief that the innovation will do it.

    And I admit, that’s hard.

    One thing I’ve noticed with the ACA/Obama Care that most of us are not fully aware of and that is that prices DO vary – even by ZIPCODE!

    In fact, when you go to healthcare.gov , the main things they want to know is your ZIP code, gender and age (and whether you smoke).

    So we do know from that – that health care costs DO vary by location!

    Finally, one reason that costs have gone up is the ACA itself which put regulations on ALL health insurance to include:

    not being able to deny on pre-existing conditions

    not being able to cap annual or lifetime limits.

    MUST cover the essential benefits

    Prior to these regs, the insurance companies differentiated themselves on the caps and what conditions they covered and perhaps not offering all the essential benefits.

    A BIG difference between ObamaCare/ACA is the huge deductibles and co-pays which some folks say makes it too expensive and not worth it – but the thing is – they cap your out-of-pocket for catastrophic illness – which saves folks from bankruptcy.

    I’m just a skeptic with respect to “ideas” unless there is some on-the-ground actual experience to validate that the “idea” actually does result in lower costs. I realize this is a chicken-egg approach but health care is dang complicated and ideas are cheap compared to results.

    We are the only country in the developed world where we think healthcare can be a real “market” like other goods and services. The places on earth where there really is a market for healthcare is 3rd world where most folks don’t have insurance and have to pay out of pocket or else.

    So no, not trolling you… and sorry if I rub you the wrong way – also.

    1. sherlockj Avatar
      sherlockj

      The examples I offered are all real. Tried and measurably successful elsewhere. As for individuals not shopping around, those with large deductibles would be wise to do so. Note the difference in the cost of an MRI that I illustrated. Same with co-pays.

  8. LarrytheG Avatar
    LarrytheG

    re: https://vhi.org/HealthcarePricing/default.asp

    at the top:

    “Healthcare Pricing Transparency
    Home Health Insurance Healthcare Pricing Transparency

    Today, more people are paying for all or a greater share of their healthcare costs. There are many reasons for this such as greater enrollment in high deductible health plans or not having health insurance at all. How much you pay for a doctor’s visit, medical test or surgery can depend on which doctor, hospital or other healthcare provider you choose.

    Here’s how this report can help you:
    Are you uninsured?
    Do you have a high deductible healthplan or high co-pay?”

    and totally true.

    and perhaps as time goes by and more and more people have to pay out-of-pocket – there will be more shopping around.

    Keep in mind – price alone is not the only factor. Quality and the skill/competence of the providers are also involved.

    Do you know who VHI is ? are the private? How are they funded?
    just curious about that – they do seem to be a very good source of
    legitimate information.

    1. sherlockj Avatar
      sherlockj

      VHI.org is the data contractor to the Virginia Department of Health. The figures they report are reported to them by the providers and insurers themselves.

  9. sherlockj Avatar
    sherlockj

    Larry, another of your straw men is burning brightly. My article above is in part about the government of Virginia limiting supply in the face of strong demand. That will keep prices high in any market. The Commonwealth actively blocks more efficient models of healthcare delivery that have been proven to reduce cost. Read it again. What we need in that specific case is not more government, but less.
    In the case of enforcing the antitrust laws, we need the government to do a job we have already assigned it.

  10. LarrytheG Avatar
    LarrytheG

    Jim – Insurance companies determine reimbursement rates. They pay X dollars for an MRI no matter which provider does it and the people getting them have no idea what the costs are if it is covered by their insurance.

    I just point out that Virginia is not unique on these issues. There is nothing specific to Virginia that makes Virginia healthcare costs higher than other states – because of the way Virginia government is doing anything.

    If you could point out – for instance – that some health care services in Virginia was higher than other states and point to a specific reason due to something Virginia does and not other states – you’d have a strong argument.

    But you’re just pointing to something in Virginia and claiming it’s causing higher costs without really connecting the dots or showing that it’s something unique to Virginia.

    That’s not a strawman guy – that’s dealing with facts instead of distractions.

    Read the Heritage study – it talks about these issues. The insurance companies determine prices – in Virginia and other states and yes they are a powerful lobby also. Hospitals can set prices all day long but if the insurance company only pays a given reimbursement – it’s the insurance companies deciding, not the hospitals.

  11. LarrytheG Avatar
    LarrytheG

    interesting chart:

    https://i.pinimg.com/originals/a1/38/61/a13861df60c4f3f79902460988c17ad5.png

  12. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Jim, thank you for another excellent article.

    What is your take on this quote set out below?

    “Medical Care. Health care provides a quintessential illustration of the potential gap between price increases perceived by households and inflation perceived by economists. The BLS estimate for medical inflation appears far lower than the rate at which households are seeing health-care costs rise. BLS reports that medical care prices have risen 93% from 1999 to 2018;20 but during the same period, the average family health-insurance premium has increased by 239%.21

    Two key factors help to explain this gap: first, when medical care increases in price because it has improved in quality—for instance, thanks to the introduction of a superior but costlier procedure, drug, or device—those price increases are not considered inflationary because the patient is getting greater value for the greater cost. This is an example of quality adjustment.

    Second, many purchases of medical care are intermediated by insurance, which inflation analyses strive explicitly to disregard. But the presence of insurance has critical implications for a household. Its costs are determined by the behavior of all participants in their risk pool rather than their own choices. When people across society consume greater quantities of medical care, the cost of health insurance will rise even if the prices of individual medical services have not, and even for households that consume a lower quantity. Both market and regulatory forces will typically preclude a household from consuming its own preferred bundle of health-care services as opposed to the one reflected by the standard set of insurance offerings.”

    For more see: https://media4.manhattan-institute.org/sites/default/files/the-cost-of-thriving-index-OC.pdf

    1. sherlockj Avatar
      sherlockj

      I agree with the quote, Reed. I think what is missing in the quote is the issue of deductibles and co-pays. In my very first essay in this space, I provided documentation of the single most egregious example of unpunished crime I have seen in almost 14 years of studying the rather arcane subject of the business of healthcare in Virginia. That was what I call the rape of Charlottesville. In 2018, The people in that area of the state whose only access to health insurance was the ACA exchange were forced to pay the highest rates in America when Optima was left as the only seller. Family of 4, 40 yr. old parents, $50,000 a year in premiums. But the max out of pocket in deductibles and co-pays on that policy were $11,900 a year if memory serves. Whatever the deductible is has to be paid out of pocket before the policy pays anything. Once the deductible is paid, then that family paid say 20% of the bill until that $11,500 was spent. That is the absolute worst case in the nation and in my mind should be prosecuted, but it illustrates the point. After Americans have budgeted for high premiums, many have to borrow to pay for deductibles and co-pays. Commercial insurance prices are traceable to high healthcare prices – in Virginia without completion in many markets there is no effective upper limit to prices monopoly hospitals can charge – and the markup of those prices by insurers based on their assessment of risk and profit they deem necessary to justify their costs and risks. We also must understand that the government reimburses healthcare below its costs and depends on commercial insurance to keep the system running. It’s a mess. Those that offer single payer as a solution often do the math from the artificially low prices government currently pays. It is a demonstrably false baseline.

      1. sherlockj Avatar
        sherlockj

        Memory didn’t serve. The Charlottesville area Optima premiums were in fact the highest in the country, but were in the $40,000 range. The rest is right.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Let me add one more quote from the above linked in Manhattan institute Article:

      “Thus, while the average family health-insurance premium has risen from $5,791 in 1999 to $18,764 in 2017,53 median spending on actual health care for a family of four (two adults, two children) has risen from $2,122 to $4,380.54 That is, the typical household is paying almost $13,000 more to get health care that costs $2,200 more (Figure 4).”

      Now let me also quote part of James (Jim’s) above comment, namely:

      “I provided documentation of the single most egregious example of unpunished crime I have seen in almost 14 years of studying the rather arcane subject of the business of healthcare in Virginia. That was what I call the rape of Charlottesville. In 2018, The people in that area of the state whose only access to health insurance was the ACA exchange were forced to pay the highest rates in America when Optima was left as the only seller. Family of 4, 40 yr. old parents, $50,000 a year in premiums. But the max out of pocket in deductibles and co-pays on that policy were $11,900 a year if memory serves.”

      Now let us all connect some dots:

      Don’t we know now for sure how the University of Virginia mysteriously collected seemingly out of thin air a few years ago its $2.1 Billion dollar Strategic Investment (Research) Fund?

      Didn’t UVA, using it’s University Hospital in Charlotteville steal those billions from the health insurance paying public using sick patients in their hospital as suckers to gouge. And was not the hospital found only a few months back to be still driving patients bankrupt over sky high unpaid hospital bills?

      And what does this say about Obama Care? Remember Obama’s promises that we could keep our doctors, and that our costs would go down if we used his Obama Care? Why is this entire program not fraudulent from start to finish, top to bottom?

      And why should we not expect that this same sort of government induced fraud and deception now infects higher education in America as well, so for example to help pay the $10+ million cost to renovate the UVa President Ryan’s home?

      Why is it that this country’s middle class are forever living from paycheck to paycheck?

      Today, many can’t afford to buy a home or raise a family, as higher education costs and debt, health care costs and debt, energy costs, and transportation and housing costs and debt go sky high year after year in America.

      So that the more money the middle class makes, the more their own government (and institutions allied with their government) steal from the middle class who are forced to pay all the bills incurred through Government inspired waste, fraud, regulation, bureaucracy, in alliance with their crony capitalist friends.

  13. sherlockj Avatar
    sherlockj

    Larry, you are in over your head here. vhi.org reports that in 2019 an MRI on a back in a hospital outpatient department cost $1884 and in a physician office cost $599. You are not unique in your ignorance of that fact, but most people don’t opine on it. See https://vhi.org/HealthcarePricing/default.asp
    You are also wrong about Virginia not doing anything different than other states. Only a half dozen or so have a certificate of need law as restrictive as Virginia’s. Read my essay above. It is clear you have not. I point out five examples of successful medical care delivery models that lower costs in other states that are not available in Virginia. I sometimes think you troll this space, read the headline and shoot out your opinion, often utterly disconnected from the text of the essay. That is certainly true in this case.

  14. LarrytheG Avatar
    LarrytheG

    Hey Jim – don’t get upset when I comment. I fully acknowledge that I am ignorant on a bunch of issues, I just add that I’m not alone. We all are , just on different issues.

    On the MRI thing – I do not dispute those numbers – I just point out that it’s insurance that pays for them usually not the individuals and hence most don’t shop around. Kind of odd – per the CON discussion where hospitals were supposedly charging more because other providers could not have that equipment. Here we have a situation where the hospital is LESS. Interesting!

    I DID read your article and noted the Pennsylvania thing but no two states are exactly alike as to what they allow or not – that alone does not tell us that because of such innovations that that state has lower health care costs. So that’s what I look for in articles that talk about innovation. It’s more than just if they “innovate” – it has to actually yield better results not just a belief that the innovation will do it.

    And I admit, that’s hard.

    One thing I’ve noticed with the ACA/Obama Care that most of us are not fully aware of and that is that prices DO vary – even by ZIPCODE!

    In fact, when you go to healthcare.gov , the main things they want to know is your ZIP code, gender and age (and whether you smoke).

    So we do know from that – that health care costs DO vary by location!

    Finally, one reason that costs have gone up is the ACA itself which put regulations on ALL health insurance to include:

    not being able to deny on pre-existing conditions

    not being able to cap annual or lifetime limits.

    MUST cover the essential benefits

    Prior to these regs, the insurance companies differentiated themselves on the caps and what conditions they covered and perhaps not offering all the essential benefits.

    A BIG difference between ObamaCare/ACA is the huge deductibles and co-pays which some folks say makes it too expensive and not worth it – but the thing is – they cap your out-of-pocket for catastrophic illness – which saves folks from bankruptcy.

    I’m just a skeptic with respect to “ideas” unless there is some on-the-ground actual experience to validate that the “idea” actually does result in lower costs. I realize this is a chicken-egg approach but health care is dang complicated and ideas are cheap compared to results.

    We are the only country in the developed world where we think healthcare can be a real “market” like other goods and services. The places on earth where there really is a market for healthcare is 3rd world where most folks don’t have insurance and have to pay out of pocket or else.

    So no, not trolling you… and sorry if I rub you the wrong way – also.

    1. sherlockj Avatar
      sherlockj

      The examples I offered are all real. Tried and measurably successful elsewhere. As for individuals not shopping around, those with large deductibles would be wise to do so. Note the difference in the cost of an MRI that I illustrated. Same with co-pays.

  15. LarrytheG Avatar
    LarrytheG

    re: https://vhi.org/HealthcarePricing/default.asp

    at the top:

    “Healthcare Pricing Transparency
    Home Health Insurance Healthcare Pricing Transparency

    Today, more people are paying for all or a greater share of their healthcare costs. There are many reasons for this such as greater enrollment in high deductible health plans or not having health insurance at all. How much you pay for a doctor’s visit, medical test or surgery can depend on which doctor, hospital or other healthcare provider you choose.

    Here’s how this report can help you:
    Are you uninsured?
    Do you have a high deductible healthplan or high co-pay?”

    and totally true.

    and perhaps as time goes by and more and more people have to pay out-of-pocket – there will be more shopping around.

    Keep in mind – price alone is not the only factor. Quality and the skill/competence of the providers are also involved.

    Do you know who VHI is ? are the private? How are they funded?
    just curious about that – they do seem to be a very good source of
    legitimate information.

    1. sherlockj Avatar
      sherlockj

      VHI.org is the data contractor to the Virginia Department of Health. The figures they report are reported to them by the providers and insurers themselves.

  16. LarrytheG Avatar
    LarrytheG

    interesting chart:

    https://i.pinimg.com/originals/a1/38/61/a13861df60c4f3f79902460988c17ad5.png

  17. LarrytheG Avatar
    LarrytheG

    re: the ACA rates – those increased rates were the direct result of the Trump folks trying to destroy the ACA by undermining key parts of it like re-insurance. There’s another court case right now to kill it outright.

    The point here is that the ACA is govt – provisioned insurance. Without it, there would be no commercial insurance at all for these folks – that’s why we had millions who were uninsured. The ACA would never had been needed in the first place if the “market” had met that need.

    The ACA works like insurance should work in that it does not pay for everything. The insured has a share of it – perhaps too much now but the intent was to protect the insured from catastrophic financial damage, not pay for everything. They did require essential services like screening which is one of the fundamental purposes of regular primary care – it spots disease and treats it before it threatens the health and finances of the insured.

    Jim, I’m NOT trolling you but I AM challenging some of what you are writing here.

    I say again – “good ideas” are not results. I posted the MRI chart to show you that I am data-driven on these issues. I do not “blame” any of these states for making MRI prices high – but it also shows there is a price difference between hospital and doctor office. Do we know why?

    And I had a question for you since you are retired military. Do you have TRICARE and are eligible for VA care? Got opinions/views on that especially in terms of them controlling costs?

  18. LarrytheG Avatar
    LarrytheG

    here’s another interesting chart:

    https://www.weisspaarz.com/wp-content/uploads/Health-Insurance-by-the-Numbers-Graphics3-1024×704.jpg

  19. LarrytheG Avatar
    LarrytheG

    re: the ACA rates – those increased rates were the direct result of the Trump folks trying to destroy the ACA by undermining key parts of it like re-insurance. There’s another court case right now to kill it outright.

    The point here is that the ACA is govt – provisioned insurance. Without it, there would be no commercial insurance at all for these folks – that’s why we had millions who were uninsured. The ACA would never had been needed in the first place if the “market” had met that need.

    The ACA works like insurance should work in that it does not pay for everything. The insured has a share of it – perhaps too much now but the intent was to protect the insured from catastrophic financial damage, not pay for everything. They did require essential services like screening which is one of the fundamental purposes of regular primary care – it spots disease and treats it before it threatens the health and finances of the insured.

    Jim, I’m NOT trolling you but I AM challenging some of what you are writing here.

    I say again – “good ideas” are not results. I posted the MRI chart to show you that I am data-driven on these issues. I do not “blame” any of these states for making MRI prices high – but it also shows there is a price difference between hospital and doctor office. Do we know why?

    And I had a question for you since you are retired military. Do you have TRICARE and are eligible for VA care? Got opinions/views on that especially in terms of them controlling costs?

  20. LarrytheG Avatar
    LarrytheG

    here’s another interesting chart:

    https://www.weisspaarz.com/wp-content/uploads/Health-Insurance-by-the-Numbers-Graphics3-1024×704.jpg

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