Author: WorkCompAcademy

U.S. insurers and providers spent more than $800 billion in 2017 on administration, or nearly $2,500 per person – more than four times the per-capita administrative costs in Canada’s single-payer system, a new study finds.

Over one third of all healthcare costs in the U.S. were due to insurance company overhead and provider time spent on billing, versus about 17% spent on administration in Canada, researchers reported in Annals of Internal Medicine, and summarized in an article by Reuters Health.

Cutting U.S. administrative costs to the $550 per capita (in 2017 U.S. dollars) level in Canada could save more than $600 billion, the researchers say.

“The average American is paying more than $2,000 a year for useless bureaucracy,” said lead author Dr. David Himmelstein, a distinguished professor of public health at the City University of New York at Hunter College in New York City and a lecturer at Harvard Medical School in Boston.

To calculate the difference in administrative costs between the U.S. and Canadian systems, Himmelstein and colleagues examined Medicare filings made by hospitals and nursing homes. For physicians, the researchers used information from surveys and census data on employment and wages to estimate costs. The Canadian data came from the Canadian Institute for Health Information and an insurance trade association.

When the researchers broke down the 2017 per-capita health administration costs in both countries, they found that insurer overhead accounted for $844 in the U.S. versus $146 in Canada; hospital administration was $933 versus $196; nursing home, home care and hospice administration was $255 versus $123; and physicians’ insurance-related costs were $465 versus $87.

They also found there had been a 3.2% increase in U.S. administrative costs since 1999, most of which was ascribed to the expansion of Medicare and Medicaid managed-care plans. Overhead of private Medicare Advantage plans, which now cover about a third of Medicare enrollees, is six-fold higher than traditional Medicare (12.3% versus 2%), they report. That 2% is comparable to the overhead in the Canadian system.

Why are administrative costs so high in the U.S.?

It’s because the insurance companies and health care providers are engaged in a tug of war, each trying in its own way to game the system, Himmelstein said. How a patient’s treatment is coded can make a huge difference in the amount insurance companies pay. For example, Hammerstein said, if a patient comes in because of heart failure and the visit is coded as an acute exacerbation of the condition, the payment is significantly higher than if the visit is simply coded as heart failure.

This upcoding of patient visits has led insurance companies to require more and more paperwork backing up each diagnosis, Himmelstein said. The result is more hours that healthcare providers need to put in to deal with billing.

“Some folks estimate that the U.S. would save $628 billion if administrative costs were as low as they are in Canada,” said Jamie Daw, an assistant professor of health policy and management at Columbia University’s Mailman School of Public Health in New York City.

“That’s a staggering amount,” Daw said in an email. “It’s more than enough to pay for all of Medicaid spending or nearly enough to cover all out-of-pocket and prescription drug spending by Americans.”

Kain Kumar, 56, of Encino, a former doctor was sentenced to 24 months in federal prison for engaging in a multi-faceted Medicare fraud scheme, and also for illegal prescribing thousands of opioid painkillers and muscle relaxants.

Kumar pleaded guilty in April 2019 to one count of health care fraud and one count of distribution of hydrocodone. He practiced internal medicine, maintained medical offices in Palmdale, Rosamond, and Ridgecrest and surrendered his medical license last year.

Kumar was also ordered to pay financial penalties totaling more than $1 million, consisting of $509,365 in restitution, $494,900 in asset forfeiture, and a $72,000 fine.

Kumar defrauded the Medicare health care benefit program by prescribing unnecessary home health services in exchange for the payment of illegal kickbacks to him from a La Verne-based home health agency called Star Home Health Resources, Inc. According to the indictment in this case, Medicare paid $4,398,599 to Star based on the illegal kickback-tainted referrals from Kumar.

In furtherance of this scheme, Kumar caused false and fraudulent claims for reimbursement to be submitted to Medicare for Medicare beneficiaries that he did not personally examine or for patients he only briefly examined. Kumar also prescribed drugs that were not medically necessary and which were paid for by the Medicare Part D program.

Kumar admitted in his plea agreement that he illegally prescribed 23,826 pills of the opioid drug hydrocodone (commonly sold under the brand name Vicodin or Norco) and 38,459 pills of the muscle-relaxer carisoprodol (sold under the brand name Soma). Kumar directed his office staff – who were not medical professionals – to issue prescriptions for these drugs to patients even though Kumar had not examined the patients.

Kumar directed his office staff to sign his name on prescriptions for opioid drugs and also provided his staff with pre-signed prescriptions. In one instance, although Kumar examined a patient only once on the patient’s very first visit, and thereafter he caused prescriptions to be issued to the patient for hydrocodone and carisoprodol on a monthly basis for approximately a year and a half even though Kumar did not actually see the patient for any subsequent physician examination.

Kumar is the fifth and final defendant sentenced in this case. Elaine C. Lat, 50, of Fontana, was Star’s chief operating officer and the case’s lead defendant. She is serving a 30-month prison sentence in this matter after pleading guilty in May 2017 to one count of conspiracy and four counts of paying illegal kickbacks. Three other defendants, including Lat’s parents, each pleaded guilty to criminal charges and were sentenced in this matter.

This conviction was a violation of the terms of his probation with the California Medical Board arising out of a 2014 finding of gross negligence in the care of a 16 year old patient. He surrendered his medical license in September 2019 following a Medical Board disciplinary action seeking to revoke his probation.

Last year, California enacted AB-5, legislation that could force app-based companies to make anyone who finds work on their platforms employees. The law has already created confusion and unintended consequences for dozens of industries.

California’s broad-based, blunt-instrument law, has resulted in independent musicians being warned they’ll no longer be able to record in many studios and truck drivers learning that their pay could fall significantly. A few weeks ago, Vox announced it would lay off 200 freelance journalists in an effort to comply with the law.

Despite the issues California’s legislation has already created, the New York Daily News reports that many New York legislators seem interested in passing a similar law.

New York is already a national leader in providing non-traditional workers access to traditional benefits. Almost 25 years ago, New York created a first-of-its-kind fund, the Black Car Fund, to provide protections to drivers. For decades the fund was limited in the kinds of services it could provide. However, thanks to a groundbreaking piece of legislation signed by Gov. Cuomo in December, it can now offer a broad range of protections and benefits, including health care.

Today, rideshare and for-hire vehicle riders in New York pay a small fee on all their trips that is allocated to the Black Car Fund. In exchange, the fund provides benefits including workers compensation, vision care, telemedicine, mental health care, wellness services and more.

Experts have talked about a portable benefits fund for gig economy workers for years. In many ways, the Black Car Fund was, and remains, the closest thing in the country to a true portable benefits fund. And it works, covering more than 130,000 drivers across more than 400 bases.

The ever increasing public outcry over the high price of medicines did little to stop drugmakers from raising prices again for 2020.

Drugmakers including Bristol-Myers Squibb, Gilead Sciences, and Biogen hiked U.S. list prices on more than 50 drugs on Wednesday, bringing total New Year’s Day drug price increases to more than 330 drugs, according to data analyzed by healthcare research firm 3 Axis Advisors.

Companies may be delaying some of those increases to later this month to escape early January scrutiny.

The drug price increases include some blockbuster drugs: the price of Humira, which treats arthritis and other conditions, rose 7.4 percent, and the price of Revlimid, which treats multiple myeloma, rose 6 percent, according to the data.

Drugmakers have traditionally raised prices at the start of a new year, and the data shows that the price increases are continuing, even as outcry over high drug prices rises in Washington. Nearly all of the price increases are below 10%, with the median price increase around 5%, according to 3 Axis.

Under pressure from politicians and patients, many makers of branded drugs have pledged to keep their U.S. list price increases below 10% a year.

“Double-digit increases largely appear to be a thing of the past,” Bloomberg Intelligence analyst Brian Rye said. Many drugmakers have vowed not to increase drug prices by more than 10%. People with insurance generally pay much less than the list price of a drug.

Soaring healthcare costs for U.S. consumers, and prescription drug prices in particular, are expected to again be a central issue in the 2020 presidential campaign for both parties.

The United States, which leaves drug pricing to market competition, has higher prices than in other developed countries where governments directly or indirectly control the costs, making it the world’s most lucrative market for manufacturers.

The mandatory reserve estimate for a lifetime medical award requires an estimate of the remaining life expectancy of the worker. There are many actuarial tables and other information that can be used to justify an estimate.

But, as modern medicine continues to improve and advance at an increasingly rapid rate, people all over the world are enjoying longer lifespans, on average, than ever before. Consequently, age-related dementia and Alzheimer’s disease are becoming common diagnoses in older adults. For example, in the United States alone Alzheimer’s is estimated to affect 5.7 million people.

Now, it appears help may soon be on the way in the form of a potential new vaccine that has shown success in mice testing.

Researchers from the University of California, Irvine believe that this immunotherapy combination vaccine should be ready for human trials within the next few years. The initial version of the vaccine was created by Flinders University professor Nikolai Petrovsky in South Australia, and it works by removing “brain plaque” and tau protein aggregates, both of which have been extensively linked to the development of Alzheimer’s disease.

The study is published in the scientific journal Alzheimer’s Research & Therapy.

Success in 2019 with mice models has opened the door towards more extensive research and development in 2020, researchers say.

If the vaccine can in fact remove accumulated beta-amyloid plaques and tau protein aggregates from human subjects brains, just as it was able to in mice that had already shown signs pathologies, that should, in theory, stop the development of Alzheimer’s disease.

“Taken together, these findings warrant further development of this dual vaccination strategy – for ultimate testing in human Alzheimer’s disease,” the study reads.

According to professor Petrovsky, researchers are hopeful they can proceed with human clinical trials in about two years.

This isn’t the first time a possible preventative drug for Alzheimer’s has shown promise, but every one of these drugs has ultimately faltered when it came time for human trials. With this in mind, the research team say they are determined and motivated to establish a successful vaccine that can, at the very least, delay and slow down the progression of Alzheimer’s.