Integrated Health Care Delivery Systems: “The Wave of the Future?”

Health care delivery is undergoing a major change in the United States, and it is happening with little fanfare, due to the fervent debate over the viability of the Affordable Care Act (ACA). Hospital systems, such as Mt. Sinai in New York, are cutting out the middle man when it comes to insurance coverage, in order to retain more profits from services provided. Mt. Sinai, located in New York, is an example of a hospital system that is providing its own insurance options to patients who receive treatment within the system.

Both non-profit and for-profit hospitals can benefit from implementing such programs, as there are certain services that are not economically sustainable, but must be accessible to the public. For example, psychiatric care does not generate a lot of revenue, but is a necessary and important service. Ezekiel Emanuel was one of the creators of the ACA, and is chairman of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. He states that “the wave of the future is integrated delivery systems—integrating insurance with the delivery function.”

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D.C. Instructs Insurance Companies to Cover Gender Reassignment Surgery

Mayor Vincent Gray of Washington D.C. announced that D.C. will now require insurance companies to provide full coverage to transgender residents, which includes gender reassignment surgery. The D.C. Department of Insurance, Securities and Banking stated its official position that treatment and gender reassignment surgery for gender dysphoria are covered benefits. The Mayor stated that transgender people should not be required to pay extensive out-of-pocket fees for treatment.

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UPDATE: Man Forced to Undergo 3 Enemas and Colonoscopy by Police

David Eckert, from Hidalgo County, New Mexico, was subjected to numerous, highly invasive procedures, because police suspected him of hiding drugs in his rectum. Mr. Eckert had been convicted of methamphetamine possession in 2008, and the police suspected his continued involvement with drugs. However, the officers who searched both Mr. Eckert’s person and his vehicle, after pulling him over for a traffic violation, found neither drugs, nor weapons. One officer indicated that Mr. Eckert held himself in an “erect” position, and “kept his legs together,” which led the officers to assume that Mr. Eckert held drugs within him.

 After a local hospital refused forcibly to search Mr. Eckert, he was transported to the Gila Regional Medical Center (GRMC), 50 miles away. At GRMC, Mr. Eckert was subjected to two rectal exams, three enemas, forced bowel movements in front of officers and nurses, x-rays, and a colonoscopy performed under anesthesia. However, each search was fruitless. Mr. Eckert received a bill from the hospital for $6,000. Mr. Eckert filed suit against the hospital, and the parties settled for $1.6 million.

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Health Care Providers Demand Payments Prior to Treating Patients

As health care deductibles rise, some health care providers are demanding that patients pay either a portion of their deductible, or, in some cases, their entire deductible prior to being seen or treated. Hospitals claim that, in order to survive financially, they must charge patients prior to treating them. The hospitals assert that it is much more difficult to collect on patient debts after the patients have received treatment.

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Affordable Care Act Under Fire as Enrollment Opens and Budget Crisis Continues

State and federal websites opened enrollment into the Affordable Care Act (ACA) last Tuesday, October 1, 2013. However, enrollment has not begun smoothly. The waiting time to enroll through the websites is long. Though the Obama administration states that people are working “around the clock” in order to obviate the problem, very few people have actually enrolled. Democrats claim that the long waiting time is evidence of the ACA’s popularity, due to the number of people trying to enroll in the exchanges.

The ACA is the focus of the current battle occurring over the budget in the House, which has resulted in a government shutdown. Republicans would like the Act to be either delayed or defunded, and some claim that the technical glitches demonstrate the unworkability of the ACA. House Republicans have demanded that the Obama administration must change the ACA in order to gain their support and reopen the government.

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Obama Does Not End Health Insurance Subsidy for Congress

Recently, during attempts to resolve the budgetary deadlock, the Obama administration offered members of Congress continued federal funding towards insurance premiums under the Affordable Care Act (ACA)—provided that they enroll in a specified ACA plan.  Currently, almost all federal employees are eligible for the Federal Employees Health Benefits Program (FEHBP). On average, FEHBP pays approximately 70 percent of the total cost of the enrollees’ insurance premium.

The Office of Personnel Management (OPM) issued proposed rules; the OPM reasoned that the ACA did not repeal the FEHBP, and stated that government subsidies for insurance premiums should continue for federal employees compelled to leave FEHBP. However, numerous commentators opine that those in Congress should be subject to the same rules as other U.S. citizens.

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SAIC Seeks to Curb Corruption in China’s Pharmaceutical Industry

China’s State Administration for Industry and Commerce (SAIC) is increasing its investigatory efforts into the Chinese pharmaceutical industry and medical services sector. The SAIC is focusing on the price of medicine, and whether companies are in violation of anti-trust legislation. The SAIC will severely punish those engaged in acts of bribery in the bidding process for pharmaceuticals and medical services because bribery inflates prices artificially and hurts consumers.

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PPACA’s Limit on Consumers’ Expenses Delayed Until 2015

The PPACA incorporates mechanisms intended to protect consumers from insurance company abuses. One such mechanism limits patients’ out-of-pocket (OOP) spending for major medical coverage. However, as posted on the Department of Labor’s website, the cap on OOP expenses for consumers will not go into effect until 2015. Some claim that the delay is meant to help businesses and consumers adapt to the PPACA, while others claim that the Administration is catering to employers and businesses at the expense of consumers.

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The “Wild West” of Emergency Care

Several states, such as North Carolina, Texas and Florida, are experiencing a surge in “stand-alone” emergency rooms.  Stand-alone ERs are aptly named, as they are not attached to hospitals, and they tend to offer speedier and more convenient service to their patients. Some argue that freestanding ERs alleviate overcrowded hospital ERs, and that it is impossible to have “too much care for patients.” However, others maintain that such ERs increase costs because they charge insurers up to three times more per patient than urgent care facilities or doctors’ offices.

The copay for insured patients at a freestanding ER is only slightly higher than the copay for a doctor’s visit or a trip to an urgent care facility. Often, patients use ERs for routine care, which would be less costly in another facility, and insurers do not have the power to stop this practice.  For example, pursuant to Texas state law, insurers must pay for coverage whenever a patient seeks treatment for a perceived emergency, regardless of whether the patient has experienced a true emergency. The rise of freestanding ERs is most notable in “affluent suburbs,” even though insurers strive to educate patients about the benefits of seeking less costly treatment.  To read more click here and here.

Surgical Errors Increase Hospital Profits

According to a recent study published in the Journal of the American Medical Association, hospital profits increase by thousands of dollars when surgical errors are made.  The increase in profits stems from the additional care provided as a consequence of surgical complications, many of which could be prevented.  The problem is that, as a result of the fee-for-service health care reimbursement model, hospitals are essentially rewarded when surgical complications occur.  Conversely, efforts to reduce surgical errors lack strong financial incentives.

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