Stanley Feld M.D., FACP, MACE
A historic event is in the making in the Denver Colorado area. Unfortunately, not enough people in Denver are aware of the event, even though it involves 800,000 patients insured by United Healthcare insurance. The significance of the historic event is that it demonstrates Patient Power. I attended a gubernatorial candidate forum in Denver for the high tech community on Friday moderated by my son Brad Feld and Jack Tankersley. Neither Republican nor Democratic candidate even mentioned healthcare. Nor did they mention the significance of what was going on in the Denver area to the 200 plus entrepreneurs in the local Technology industry in attendance.
State governments and state laws have everything to do with Repairing the Healthcare System’s problems in my view. The states issue licenses for selling insurance, practicing medicine and operating hospitals. Price Transparency is a major issue on the path to reform. The individual states could demand Price Transparency as a precondition to issuing a license in the state. The major thrust of the panel discussion was improving the economic environment in Colorado to attract the technology industry to Colorado. Reducing the cost and waste in the healthcare care system has everything to do with the growth of any industry in an area of the country. Colorado could be just a couple of steps away.
I predicted the new owners of Hospital Corporation of America (HCA) would raise their charges as a result of their increase in debt and debt service from $11 billion dollars to $25 billion dollars.
United Healthcare refused to pay the 33% increase in charges HCA demanded in the Denver area. The present contract expired August 31, 2006. United Healthcare’s 800,000 insured were instantly out of network if they were treated in an HCA facility. The patient is now responsible for the entire retail charge (non negotiated retail charge) according to United Healthcare,
Patients are starting to understand that even if they are lucky enough to have insurance in this day of 46.7 million uninsured patients, they might be underinsured. The insurance company business is to increase their profit while keeping the premium and benefits low enough for the employer to afford. Hospital Systems like HCA are trying to squeeze the biggest profit out of the system. The goal is not quality healthcare at the most affordable price.
HCA has also raised their charges to United Healthcare in Florida. The Florida contract also expired August 31. Last week HCA announced a fee increase in Las Vegas. HCA is now in a contract dispute with Sierra Health Services in Las Vegas. Sierra has 600,000 members. Its contract expires December 31, 2006. However, they have made no progress. I hope the pattern is clear to all.
HCA and United Healthcare are facilitator stakeholders. Their goal is to make as large a profit as possible. They make huge profits from the healthcare industry.
In fact the CEO of United Healthcare has received $1.8 billion dollars in stock options in the last 8 years. I imagine the board of directors feels they are paying fair market value for good help. The 1.8 billion dollars has to add to United Healthcare's overhead and in turn adds to the premium cost.
My point is neither organization (HCA or United) is trying to reduce the costs of healthcare in order to have an affordable Healthcare System.
HCA figured the patients would continue to come to HCA hospitals until this contract dispute was settled. The patients’ physicians were at the HCA hospitals. The retail price of a hospital bed under the non price transparent DRG system ranges from $5,000 to $24,000 per day. The price does not include physician or laboratory fees. The insurance industry pays a discount fee of 30-50% on average.
The patients in Denver have surprised the executive strategists at HCA. Patients are fleeing to non HCA hospitals to get their surgery and medical care. In turn the HCA hospital physicians are getting fast tracked admitting privileges at the non HCA hospitals in the Denver area.
In an environment where mistrust is created, loyalty does not exist. This is especially when it is realized that the facilitator stakeholders are trying to take advantage of each other as well as take advantage of the primary stakeholders, the patients and the physicians.
“Patient Power” voice is being heard loud and clear by HCA in the Denver area. Hopefully it will be heard throughout the land. This voice should be heard both in Florida and Las Vegas. It will not be long before HCA is in financial trouble. It is also possible that the banks that HCA’s new owners are borrowing the $25 billion dollars from might be hesitant to close on the leveraged buyout.
Who said Repairing the Healthcare System was hopeless? It is not hopeless. It takes organized “Patient Power”. Patients and future patients have to be educated to see how they are being taken advantage of by facilitator stakeholders. Only 20% of the population are patients at any one time. The remaining 80% do not pay attention to the problem (as long as they have insurance) until they slip into the patient category. Every one needs to be informed and demand action. The action is to create of a system that aligns all the stakeholders’ incentives for the democratic good of all patients and futures patients. The goal is to deliver quality medical care at a reasonable price in a healthcare system that is not out to take advantage of the patient by making atrocious profits while not eliminating the waste in the system.
The historic event in Denver is that finally, ordinary people are taking back some of their rightful authority, and not permit themselves to be enslaved by their surrogate systems. Hopefully, this will spread to the rest of the country. The work has only just begun!