The Health Shopper

A new study from the Kaiser Family Foundation and the Urban Institute suggests that for every percentage point increase in unemployment, 1.1 million more Americans will lose health coverage. An additional 600,000 children and 400,000 adults, according to the study, will move onto public insurance programs such as Medicaid and S-CHIP, which would cost a total of $3.4 billion in state and federal revenues. The New York Times notes increasing health costs coupled with concerns about the economy is also impacting individuals with health coverage. In a recent poll cited by the Times, 42 percent of adults said that someone in their family had foregone medical treatment due to cost.

A study by Katzenbach Partners finds that customer service in the health care industry lags behind service in most other industries. According to the study, 26 percent of respondents had switched or thought about changing doctors due to an unpleasant experience, and nearly as many have used or thought about using retail clinics to avoid doctors and hospitals. Two in five said that banks provide better service than health providers, while one in five said that airlines provide better service.

According to Katzenbach's researchers, poor customer service impacts care quality and cost by causing consumers to shop around for doctors unnecessarily-leading to different doctors to duplicate tests. Consumers who do not trust doctors may be less likely to seek out treatment when necessary or understand and comply with follow up care instructions.

Fast Company has a long, interesting story about how health consumers can save money through medical tourism. According to the article, as many as 500,000 Americans traveled abroad to save money on medical care last year to hospitals where treatments cost as little as one tenth of the American price. As one person quoted in the story notes, for many consumers, ""Your options are paying $50,000 to $60,000 in the States or coming here and paying $8,000… That's the difference between putting it on your credit card or going into bankruptcy." The story also notes that a recent McKinsey study estimates that up to 20 percent of hospital visits in the U.S. could be safely outsourced-which could help save the health care system $390 billion.

The New York Times has an interesting article on some of the challenges that early retirees face in finding health insurance. The article notes that for most people-especially those with no existing medical concerns-"the best, least-expensive option is to buy an individual policy" rather than opt into COBRA coverage through an employer. The story focuses on a couple in their early 60s who decided to leave their jobs before they were eligible for Medicare who were able to find an individual insurance policy for about $400 a month, which was about half the cost of paying for COBRA coverage. The couple did, however, have to spend some time shopping around due to some minor pre-existing medical conditions.

The article also offers another key point for early retirees: When leaving a job, individuals have 60 days to start COBRA coverage-that is, opt to pay to remain on an employer's plan-or else lose the option. As the Times notes, many early retirees may want to opt into COBRA initially until they have found coverage elsewhere.

Consumers paid less for drug co-pays in 2007 than they did in 2006, according to a new study from Express Scripts. Although the decrease in the average co-pay was small, it stemmed from smart consumer behavior. Since 2002, consumers have switched over to generic medications in large numbers, as generic drugs now account for 64 percent of prescriptions, up from 42 percent in 2002. According to Express Scripts, consumers save an average of $15 per prescription when buying generic.  

President Bush has threatened to Veto a tax bill that could substantially raise administrative costs for HSAs. H.R. 5719, which passed by a vote of 23-17 through a House of Representatives committee, would require that banks and other HSA administrators have tools in place to verify that individual spending from the accounts goes toward qualified expenses. Currently, banks or other administrators do not need to confirm that HSA funds are used on health related expenses.

Proponents of the change say that the bill would help the IRS ensure that individuals who use HSAs for non-health expenses are taxed appropriately. Opponents of the bill argue that the regulations are unnecessary and would force banks to build elaborate verification systems that they would pass on to account holders through substantial fee increases.

California's Department of Managed Health Care has proposed rules that would prevent physicians from billing patients for additional charges beyond the costs of in-network care covered by insurance. Typically, billing disputes arise when patients go to in-network hospitals or emergency rooms for treatment but are inadvertently treated by an out-of-network physician who has not accepted the HMO's negotiated price. Physicians, in a process called balanced billing, can then directly bill the patient for the difference between the two fees.

According to the Los Angeles Times the department has been trying to work out a compromise between physician groups and HMOs on the issue for two years, but ultimately has proposed the rules to protect consumers from increased out-of-pocket spending. Under the proposal, consumers would not have to pay for any difference in billing. Instead, physician groups and insurance companies would have to resolve the disputes on their own.