Armen Kazarian is alleged to be responsible for the largest-ever Medicare fraud racket. (Photo Credit: CC BY/Medicare DMEPOS Surety Bond)

Many Americans 65 and older depend upon Medicare for their health insurance coverage. Thus, when a criminal like Armen Kazarian preys upon the weak and vulnerable with a Medicare scam, the scale of outrage is tremendous. According to the New York Post, Armenian gangster vor (equivalent to a Mafia godfather) Armen Kazarian was recently arrested along with dozens of cohorts for a “smorgasbord” of offenses including “the largest-ever Medicare fraud by a single crime syndicate.”

Armen Kazarian’s coast-to-coast operation

More than $160 million in fake Medicare invoices were generated from 118 fake medical clinics in 25 states under Armen Kazarian’s watch, said U.S. Attorney Preet Bharara. The vast majority of the supposed clinics were rented Mail Boxes, Etc. addresses. All told, more than $35 million in taxpayer money went toward the fake bills Kazarian’s men generated out of an office above a Brooklyn, N.Y., auto-body business. Things like this can drive people on fixed income to short term loans.

Extortion, disembowelment and money laundering

Charges have been filed in California, Georgia, New Mexico and Ohio against a total of 73 defendants, writes the Post. Noted among the defendants is Robert Terdjanian, 35, of Brooklyn. He was allegedly the East Coast ringleader of Armen Kazarian’s gang, and charges against him include threatening to disembowel one of his extortion victims. Davit Mirzoyan of Los Angeles is alleged to have been in control of other illegal operations for which the Kazarian group is being charged, including sale of illegal narcotics, untaxed cigarettes and Viagra. Also in the realm of insurance, Aron Chervin is accused of recruiting strippers to file bogus automotive insurance claims. Various suspects are accused of money laundering via the purchase of Las Vegas casino chips.

The tale of the tape

Reportedly the first vor ever charged with racketeering in the United States, Armen Kazarian, 46, was surreptitiously recorded by federal authorities making threats against those Medicare patients who failed to pay his racket’s fake medical bills. Attorneys for the accused have indicated that their Armenian clients plan to plead not guilty on all charges.

Sources

New York Post

Provisions of health care reform designed to curb abuses by health insurance companies kicked in Sept. 23 for new plans. Image: CC clevercupcakes/Flickr

The new health care law passed six months ago. On Sept. 23, several changes in the U.S. health care system start going into effect. Many of the more controversial parts of health care reform don’t start for a few more years. But key reforms such as coverage despite pre-existing conditions begin Thursday. Republicans are increasing their anti-health care reform rhetoric. President Obama has responded with his own vigorous defense of the new health care law. Though a majority of Americans were in favor of the law upon its passage, a majority now disapprove as it kicks in.

Health care reform for majority delayed until 2011

Health care reform actually won’t go into effect for most Americans until next year. The Wall Street Journal reports that the changes kick in immediately for new health plans started on or after Sept. 23. Employed people who get health insurance as a job benefit won’t see any changes until their plans renew during open enrollment — usually Jan. 1. The changes valid Sept. 23 were designed as a bridge until 2014, when subsidies for health plans will be available for people who can’t afford them. At that time, most Americans will be required to have health insurance or else be fined.

Health insurance changes going into effect

Key changes that go into affect for new health plans started after Sept. 23 included the following, courtesy of CNN:

Children under age 19 can no longer be denied coverage for pre-existing conditions. The same goes for adults in 2014.

Insurance companies can no longer drop a customer when they get sick or look for mistakes on their application for the purpose to deny payment when they get sick.

Preventive care such as physicals, mammograms and colonoscopies no longer require a co-payment or deductible.

Insurance companies can no longer impose lifetime dollar limits on essential benefits, such as lifesaving treatments.

Patients no longer need to get prior authorization from their insurance company or a doctor’s referral to see a pediatrician or OB/GYN.

Insurance companies must discontinue prior authorization for ER services. Plus, they can’t charge higher co-payments for out-of-network ER providers.

Insurance companies can’t refuse a claim in appeal, and have to continue paying for treatment until the  appeal is resolved.

White House fights public misconceptions

Republican misinformation campaigns have fueled public opinion about health care reform. A recent Rasumssen poll counted 61 percent in favor of repealing the health care law. The Los Angeles Times reports that to fend off Republican attacks, the White House has unveiled a new website, whitehouse.gov/healthreform. The site presents stories from around the U.S about how the law has benefited ordinary Americans. In a meeting with state insurance commissioners Wednesday, Obama, speaking about the provisions going into effect Sept. 23, said:

“These things are designed not to have government more involved in health care. They’re designed to make sure that you have basic protections in your interactions with your insurance company, that you’re getting what you paid for, that you have some basic measures of protection.”

Employers are protecting bottom lines in a bad economy by shifting a greater percentage of health care costs to workers. Library of Congress photo.

Health care costs are falling … for employers. A study released Thursday shows that employers are shifting a greater portion of total health care costs to workers. While the premiums employees pay for employer-sponsored health insurance rose significantly, the amount their employers contribute declined slightly. Analysts say the shift in health care costs is a corporate survival strategy as the U.S. economy continues to falter. A persistently high unemployment rate that shows no sign of decreasing leaves workers with little leverage to negotiate a better deal.

Employee premiums outpace wages

Health insurance premiums employees pay for employer-sponsored family coverage rose an average of 13.7 percent this year, according to a survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust. The amount that employers contribute fell by 0.9 percent. In coverage of the survey, the Washington Post reports that employees are paying an average of 30 percent of the premium for family coverage and 19 percent for single coverage. The workers’ share of health care costs is the highest in 12 years of the surveys. Since 2005, the employees’ share of premium payments have gone up 47 percent while overall health insurance costs have risen 27 percent. Over the same period, wages have increased 18 percent and the consumer price index, a measure of inflation, has risen 12 percent.

Job market gives employers the advantage

The recession and a difficult job market are the primary factors responsible for the rising cost of employee-paid premiums according to Deborah Chollet, an economist with a Washington research firm. Chollet told CNNMoney that companies cutting staffs to the bone are looking for other ways to save money in the face of low consumer demand. One of the remaining options available is to pass on more health care costs to workers. She said that in a strong job market, higher turnover helps companies contain health care costs. These days, people who still have jobs are holding on to them tenaciously. They also use their health benefits more.

Employees pay more, get less

Workers are paying a greater share of their health care costs and getting fewer health benefits in return. The Miami Herald’s coverage of the survey reports that 30 percent of employers cut benefits or increased out-of-pocket costs for employees. Employers are also raising annual deductibles and 23 percent raised employee premiums. Employer-sponsored insurance covers approximately 157 million Americans, down from 159 million in 2009. A greater percentage of companies provide health benefits this year–up to 69 percent from 60 percent in 2009. However, the survey report suggests that many companies that did not offer coverage did not survive the downturn, leaving a higher percentage of survivors that provide health benefits.

Health insurance premiums for individuals are rising much faster than those for employer-sponsored plans as insurance companies grab profits before health care reform kicks in. Flickr photo.

Health insurance premiums for people who buy coverage on their own are soaring, according to a study released Monday. While lawmakers debated the health care reform bill, health insurance companies were busy trying to make as much money as they could before the law’s provisions kick in. Individuals facing sharp increases in their insurance premiums are trying to save money by settling for fewer benefits and higher deductibles. Meanwhile, steadily rising insurance premiums, the recession and a drop in the number of employers offering health coverage swelled the ranks of the uninsured by nearly 3 million people in 2009.

Health insurance cost trends

Premium hikes for health insurance for individuals far exceed increases in the premiums for employer-sponsored coverage, according to a new survey on health insurance cost trends from the Kaiser Family Foundation. The Associated Press reports that the non-profit foundation said premium hikes for individual coverage averaged 20 percent. Customers who were able to switch to cheaper plans brought the average increase in what individuals are paying for  health insurance down to 13 percent. This year’s individual health insurance premium spike tops last year’s 5 percent average increase for employer-sponsored family coverage. Health insurance cost trends for employer-sponsored single coverage held steady.

Expensive health insurance for individuals

The rising cost of health insurance for individuals made news earlier this year when Anthem Blue Cross tried to raise its rates by as much as 39 percent in California. The New York Times reports that the Kaiser study sheds light on how widespread these premium hikes are. The New York Times reports that when the proposed Anthem hikes were met with outrage from federal and state officials, there was little information about how widespread such increases were in other parts of the country. Drew Altman, the Kaiser foundation’s president and chief executive, told the Times that “The survey shows that the steep increases we have been reading about over the last several months are not just extreme cases.”

Health care reform a long wait

The Kaiser survey highlights the challenges that about 14 million people younger than 65 who purchase their coverage in the individual market will face until changes under the health care reform law kick in 2014. By then, all Americans will be required to have health insurance or risk paying a fine. In the meantime, 52 percent of respondents in the Kaiser survey who buy individual health coverage said they would keep their current plan next year, while 32 percent said they were not sure. Another 14 percent said they would switch companies in hopes to cut costs.

Health insurance plans have high deductibles

To save money, people are switching their individual health insurance plans to higher deductibles. The survey reported that the average deductible for individual plans is about $2,500. One in four people said their plan had an annual deductible of $5,000 or more. The number of those with high deductibles has risen from 39 percent in 2007 to almost 47 percent in 2009.

Millions losing health insurance coverage

For the 2.9 million U.S. adults who joined the ranks of the uninsured in 2009, health care reform does little to help them with their current needs. USA Today reports that in 2009 — the latest statistics available — 46.3 million American adults had no health insurance coverage, according to a new report from the U.S. Centers for Disease Control and Prevention. That’s about one in five working-age adults with no health insurance coverage. The percentage of uninsured adults of working age climbed from 19.7 percent to 21.1 percent in 2009, and 58.5 percent of American adults went without insurance for at least part of the year.

The health care reform bill has inspired an AT&T strategy that involves increasing its profits by billions of dollars via denying employees health insurance. Flickr photo.

Health care reform is inspiring corporations to dream up creative strategies that avoid the obligations required by the health care reform bill. A cold-hearted genius at AT&T may have found the ultimate way to make health care reform backfire on the law’s best intentions of eventual universal coverage. The new health care law requires companies to pay a penalty for denying employees health care. It may turn out that paying the government penalty costs far less than providing coverage.

Corporate health care reform maneuvers

The quest for universal coverage spawned the idea to drop health care benefits. Fortune reports that we know this because of other cynical corporate maneuvers over health care reform. When President Obama signed the health care bill, AT&T and Verizon made headlines announcing hits on their projected earnings of about $1 billion. Why? The health care bill ends tax deduction for the federal retiree drug-benefit subsidy. For corporations, this subsidy was an instant cash loan they didn’t have to pay back. The government gave them money they didn’t earn to pay for retiree drug benefits, which they were allowed to deduct from their taxable earnings.

The announcements by AT&T and Verizon that health care reform would cost them billions of dollars infuriated Congressman Henry Waxman. He accussed them of grandstanding to exaggerate the cost of health care reform on employers. As chairman of the House Energy and Commerce Committee, he ordered them to turn over documents related to how they were dealing with health care costs.

Health care bill: unintended consequences

The unintended consequences of the health care bill are starkly outlined in the documents. Fortune reports that an AT&T PowerPoint slide entitled “Medical Cost Versus No Coverage Penalty” shows that 2009 medical costs were $4.7 billion. The federal penalty for denying coverage is $2,000 per employee. With 283,000 employees, AT&T would be penalized $600 million. By denying its employees health care, AT&T could possibly increase its profits by $4.1 billion.

Health insurance companies slither

After the health care reform bill passed, health insurance companies joined AT&T and Verizon in trying to weasel out of the law. It didn’t take long for Big Insurance to look for loopholes in the health care reform law. Starting Sept. 23, the health care bill will ban health insurance companies from denying coverage to children with pre-existing conditions. The New York Times reported on March 29 that insurance lawyers are claiming the bill’s “fine print” allows them to refuse to cover children with pre-existing conditions such as asthma, diabetes, orthopedic problems, birth defects and other illnesses.The insurance companies said the law only requires coverage for pre-existing conditions if a policy is sold–it doesn’t require the insurance companies to allow access to a policy. Riiiiiight.

Health insurance: profits or policies

Can companies be so cold-hearted to actually deny benefits because of health care reform? Fortune reports that companies say certain aspects of the health care reform bill will increase the cost of providing health insurance. Parents will be able to keep children on their plans until they are 26 years old, a benefit they say will cost millions of dollars a year. They also say they won’t be able to pass the full amount of a tax on “Cadillac insurance plans” on to their employees.

If companies like AT&T and Verizon can rake in billions of dollars in profits by not providing health care coverage, you can bet they will follow the money.

Does this look like the kind of thing a health insurance company should invest in? Image from Flickr.

How’s this for a reversal? Life and health insurance firms have invested $1.88 billion in just the top five fast food chains in America. The American Journal of Public Health published a study on April 15 revealing the investment patterns of large insurers. Fast food isn’t the only potentially damaging investment of life and health insurers; in 2009, the New England Journal of Medicine revealed that more than $4.5 billion of health and life insurance money had been invested in tobacco stocks. That is quite the payday loan for companies that seem to have competing interests.

The health insurance risk of fast food

While fast food in and of itself is not necessarily dangerous to one’s health, the fact health insurers, life insurers and other companies concerned with health are investing in potentially dangerous products is disturbing. The researchers in the American Journal of Public Health does point out that “fast food can be consumed responsibly.” However, most evidence points out that fast food, as currently sold and marketed, is a danger to public health. High-fat foods like the ones sold at fast food restaurants have been shown to be addictive. High fast food consumption has also been shown to be correlated with high obesity. Obesity is now the leading cause of preventable death and disease in the United States.

Health insurance investment in fast food

Most health insurers, as they are currently structured, have profit as their major concern. 11 health insurance companies that own life, disability, or health insurance have about $1.88 billion invested in fast food companies such as McDonald’s, KFC, Taco Bell, and Burger King – easy payday loans in stock value for those companies. These insurers include Massachusetts Mutual, Northwestern Mutual, and Prudential. Insurance companies dispute the total investment numbers. However, insurance companies also admit that their investments may be through subsidiaries or large investment groups.

Health insurance investment in tobacco

At a much larger scale then the reported health insurance investment in fast food is their investment in tobacco companies. A New England Journal of Medicine report found about $4.5 billion of medical, health, life, and disability insurance money invested in tobacco companies. The insurance companies, again, flatly deny this finding. Sun Life, when questioned about their holdings, pointed out that tobacco-related businesses “can be a part of a broader conglomerate involving other aspects such as food production.” Which, given the recent finding about fast food companies, is especially concerning.

Sources:

Scientific American
CNN

The new health care bill gives a shot in the arm to underinsured and uninsured Americans. Image from Flickr.

The new health care reform bill passed the House last night on a 219-212 vote. While the bill is not yet law, the changes of this health care reform are sweeping and will take about 10 years to fully implement. The bill will be paid for with everything from payroll loans to the government borrowing money from the national debt – but the Congressional Budget Office estimates that in the end, the bill will save the U.S. Budget a significant amount of money each year. To read more about the effects of the health care bill in 2010 and 2011, see New health care bill summary Part 1.

Summary of the new health care bill 2012-13

No major changes will occur in health care in the year 2012 under the new health care bill. In 2013, many of the new taxes and fees that will pay for the new health care bill will go into effect. This will provide funding for the 2014 fiscal year updates to the health care system.

These taxes will include new Medicare taxes on individuals who earn more than $200,000 a year. The wage tax, dividends and interest tax, and a small tax on medical devices will also be implemented. In 2013, the new health care bill will also implement a test system in Medicare in which payments are made based on the quality, rather than quantity of health care services. Health insurers will also be barred from charging different premiums to customers based on gender.

Summary of the new health care bill in 2014

In 2014, the majority of Americans will gain benefits from the new health care bill. Exchanges will be created so individuals without employer-provided health care or small business can shop for health care coverage – and insurance companies will be barred from denying coverage on the basis of pre-existing conditions. Medicare will also expand to cover all Americans with income up to 133 percent of the federal poverty level ( about $27,000 per year for a family of 4). Small businesses will also receive a tax credit to help them provide coverage to their employees. The insurance industry will also be required to pay an annual fee to help pay for the exchanges that will cover all citizens that cannot otherwise receive insurance.

In addition to providing subsidies and guaranteed coverage for most citizens, the new health care bill will also require that most people have health insurance. There will be a fine for not carrying insurance of some sort. An independent Medicare board will also be created to help curb Medicare costs if the costs rise more quickly than inflation.

Summary of the new health care bill in 2015, 2016, 2017, 2018

In 2015, the new health care bill will simply continue the new coverage, taxes and fees that are created in previous years. In 2016, the penalty for individuals who do not purchase health insurance will rise to a $695 minimum. In 2017, businesses that have more than 100 employees will be allowed to participate in the state insurance exchanges, if the state government allows it. In 2018, an excise tax will be imposed on so-called “Cadillac plans” that generally provide more than $27,500 worth of coverage for a family.

Sources:

Wall Street Journal
Lexington Clipper-Herald
My Fox Tampa Bay
Onion Kid
The Seattle Times
Wikipedia – Poverty article
Washington Post

The new health care bill injects money and regulation into the health insurance industry. Image from Flickr.

Yesterday evening in congress, the health care reform bill, HR 4872, passed the house of representatives on a 219-212 vote. An incredibly sweeping change, the new health care bill has many pros and cons. With more than 2,000 pages in HR 4872, the basics of the new health care reform bill are extensive. In short, the U.S. government will be attempting to provide health care insurance for most Americans without those individuals needing to take out a payday loan to pay for that coverage. The  effects of the new health care bill will be split over 10 years. The first two years will be covered below – to see the effects the new health care bill will have from 2012 – 2018, see Part 2.

New health care bill not yet law

The new health care bill passed the House on Sunday, but it is not yet law. First, the new health care bill must go back to the Senate for reconciliation. This means that some major provisions of the new health care bill may change – though the pros and cons of the majority of new health care bill are likely to remain the same. Once the bill is reconciled through the Senate, it will go to President Obama’s desk to be signed. At that point, the new health care bill would become law.

The timeline of the new health care bill

Because there are many details involved with the new health care bill, the timeline of implementation for the bill is currently set at 10 years. This is assuming that the new health care bill provisions are not repealed or changed in subsequent legislation. The cost of the health care bill is estimated to cost about $100 billion a year, but that cost is estimated to be more of a cash loan – the cost savings from altering the health care system are estimated by the Congressional Budget Office to be more than twice the yearly cost.

Summary of new health care bill in 2010

In the year 2010, there would be three major changes to health care. First, insurance companies would no longer be allowed to deny coverage to children with pre-existing illnesses. Second, children would be able to stay on their parent’s insurance policies until they turn 26 years old. Third, Medicare recipients who fall into a specific coverage gap will get a $250 rebate.

Other changes include an excise tax on indoor tanning, which will increase the cost of that service. Also, individuals that have not had health insurance for 6 months will receive a subsidy to enroll in high-risk insurance pools run by the states. All new insurance plans sold must exempt preventative care and screenings from deductibles. Finally, small businesses with fewer than 25 employees would receive up to a 35 percent tax credit for providing health insurance to their employees.

Summary of the new health care bill in 2011

In 2011, the new health care bill will make changes focused mostly on preparing for later updates. The new health care bill will set up a long-term care insurance program. Individuals who pay premiums into this system for at least five years will become eligible to receive support with daily living assistance.

The senior citizens that fall into the “medicare doughnut hole” – a coverage gap – will get a 50 percent discount on some drugs. In 2011, a new fee on drug makers will also be implemented to help pay for the upcoming changes. The fine on withdrawing funds from a Health Savings Account for non-medical expenses will increase by 5 to 10 percent. Employers will also need to start including the cost of health care on employee’s W-2 forms.

To read more about the continuing effects of the new health care bill, see Health Care Reform basics Part 2.

Sources:

Wall Street Journal
Lexington Clipper-Herald
My Fox Tampa Bay
Onion Kid
The Seattle Times
Wikipedia – Poverty article
Washington Post

Building up cash today can be as easy as looking to your diet habits. The diet industry is a billion-dollar venture. From gyms to diet foods and sportswear to equipment, Americans are buying. There are thousands of products consumers buy to help manage their weight.

The number one culprit is the gym

Depending on your location, gym memberships can cost anywhere from $29.99 to $120.99 a month. With initiation fees, one-time service fees, enrollment charges and price hikes yearly, you end up spending a lot of money. Added to the cost are individual classes that normally don’t come with a basic membership. Then there are the costs of personal trainers and nutritionists. These are rarely included in a gym membership, or if they are it’s only for a short introductory period. Research is showing that average gym-goers spend upwards of $1,200 a year on working out.

Then there is the clothing

Lululemon Athletica boasts high-performance Yoga pants that allow your skin to breathe while working out. They capitalize on the fitness craze by stating that by adding oxygen to your workout, your body is working more efficiently. Whether or not that is true has yet to be proven, but what is proven is that the magic Yoga pants cost $100 a pair. Then there are shoes. Sure if you are doing high-impact workouts you need good shoes but is there really a proven difference in Nike $39.99 running shoes and Merrell’s $104.99 pair? The bottom line is that clothing and good shoes are necessary but they create a huge expense for anyone committed to working out.

Fitness magazines offer advice at a high price

You see them every time you go to a store. Aisles are lined with magazines that claim to have the latest miracle diet. There is a reason why there are so many too—they sell. If you add up a few magazine subscriptions ranging from $10 to $30 a year, you are spending a good amount of money on magazines you’ll eventually just throw out. Finding cash today means cutting back in small ways and then watching your savings add up. Magazines can be a huge drain on your budget.

Health insurance may not pay off

A recent study showed that about 40% of bankruptcy filings by individuals are predominantly a result of medical costs. The reality is that having medical coverage won’t protect you against financial hardship. In 2008, the average US family spent $3,354 in premiums. That figure does not include prescriptions, therapy or any other uncovered medical expense.

The airlines may not be helping your budget

Despite the fact that ticket prices on planes are decreasing, some obese Americans are not benefiting. Earlier this month, United Airlines announced that unless a flight attendant can find an extra empty seat for obese passengers, they will have to pay for two seats. Southwest Airlines has the same policy. This is just another way that health can cost.

Vices add to high costs of health

Building up cash today is virtually impossible with the rising costs of cigarettes. In New York the tax alone on one pack is $2.75. Some industry analysts are predicting that there will be a similar tax on soda. Congress has already proposed a soda tax to be included in the 2012 budget. It’s difficult to find money these days and health can be a huge drain on funds. Take a look at the amount of funds you put into overall health care and see where you can cut back to find added savings.

Apply Here for Cash Today!

(Photo from pyxopotamus, Flickr.com)

Is there a correlation between how much you weigh and how many debts you have? While this is something that most people who have a lot of extra weight may not agree with, there are certain reasons why this may be true. The fact is that a person who is obese is more likely to spend more on healthcare, which almost requires them to get into debts by taking short term cash advances to meet the increased costs. Visits to a doctor or a therapist can also be expensive, and will leave a big hole in your wallet. Therefore, one could say that there may be a direct relation between the two.

Is Obesity the Only Problem?

Being obese is perhaps the start of a problem that can bring about other problems, and it is not just about overeating. There are people who eat only one meal a day but are still obese, which is a condition that needs serious medical attention. At the same time, this has a tendency to balloon out of proportion, leaving the person incapable of working to the best of their abilities. They are also faced with ridicule and laughing from passers-by, which can have a lasting effect on the person who is affected.

What About the Loans?

If you are struggling with your weight, you are more likely to need to see a doctor at some time or another. Your finances will be fine if you have health insurance, but if you do not have proper insurance and are facing problems arising from your health, you are likely to run short of money. Treatments for these conditions cannot be stopped, and the lack of money will soon have you taking out a short term cash advance. Medical treatments for certain conditions also tend to last quite a long time and require several visits to a therapist or doctor. Extreme cases will require the help of a surgeon to help you get back to good health.

Fit and Healthy

While there is no reason to state that an obese person is unhealthy, there is every reason to state that he is more likely to contract illnesses that are weight related. High cholesterol and hypertension can lead to heart disease and are quite common among people who are obese. Will it lead them into debt? This is a matter that differs from person to person. As said earlier, some people may have proper insurance, while others will need a loan to cover the costs of required treatments. There could be a risk in even going for a loan in these cases, as people have a tendency to forget about the long term plans that the doctor had advised and give it up the moment they feel a little lighter. The result of this ignorance will spell disaster. The weight will start to roll up all over again and they may need to borrow more short term cash advances.

Apply for Short Term Cash Advances HERE!

For people living from paycheck to paycheck without health insurance, it would take a hefty cash advance or personal loan just to step inside a doctor’s office. And for people who have health insurance or extra cash stashed away for medical expenses, more than half of every dollar spent on medical care is a waste. According to a recent study by PricewaterhouseCoopers’ Health Research Institute (HRI), approximately $1.2 trillion of the $2.2 trillion spent on medical care annually in the United States is the result of wasteful health-care practices.

The HRI report describes three general areas of waste:

• Behavioral where individual behaviors are shown to lead to health problems, and have potential opportunities for earlier, non-medical interventions.
• Clinical where medical care itself is considered inappropriate, entailing overuse, misuse or under-use of particular interventions, missed opportunities for earlier interventions, and overt errors leading to quality problems for the patient, plus cost and rework.
• Operational where administrative or other business processes appear to add costs without creating value.

Before you light up or take another bite . . .

Big may be beautiful, but it's an enormous waste of health-care resources.

The report concludes that the impact of obesity, alcohol abuse, smoking, and non-adherence to medical advice and prescriptions are exponential factors affecting all three categories. Every year, these risky choices and behaviors result in an avoidable $493 billion waste.

Some of the specific contributors to the $1.2 trillion leak are:

1. Over-testing: $210 billion
2. Processing claims: up to $210 billion
3. Ignoring doctor orders: $100 billion
4. Ineffective use of technology: up to $88 billion
5. Hospital re-admissions: $25 billion
6. Medical staffing turnover: $21 billion
7. Medical errors: $17 billion
8. Unnecessary emergency room visits: $14 billion
9. Prescriptions written on paper: $4 billion
10. Hospital-acquired infections: $3 billion
11. Over-prescribing of antibiotics: $1 billion

Too many tests

Defensive medicine – the ordering of tests or procedures based on concern for liability or to pad income — is the single biggest waste of health care dollars. In a recent CNN report, Dr. Arthur Garson, provost of the University of Virginia and former dean of its medical school said, “Sometimes the motivation is to avoid malpractice suits, or to make more money because they are compensated more for doing more. Many are also convinced that doing more tests is the right thing to do. But any money that is spent on a patient that doesn’t improve the outcome is a waste.”

Those annoying claim forms

Inefficient claims processing is the second-biggest area of wasteful expenditure. Doctors spend enormous amounts of time and money trying to get paid by insurers. They also spend a lot of time and money getting advance approval from insurers for higher-priced or non-routine procedures. Those necessary efforts significantly increase the cost of medical care

Using the emergency room as a clinic

Because emergency rooms are legally obligated to treat all patients, more insured and uninsured patients are getting their primary care in emergency rooms. An emergency room visit for a routine condition can cost 10 times what the same medical care would cost at an urgent care clinic. Not only are unnecessary emergency room visits a waste of medical resources, many uninsured patients cannot or do not pay their emergency room bills, and medical providers ultimately find ways to pass on the costs to insured patients and uninsured patients who do pay out-of-pocket.

Going back to the hospital

Frequently – to the tune of $25 billion a year — patients don’t follow care instructions after being discharged from the hospital and wind up being readmitted for complications that could have been avoided. Preventable re-admissions are also common among elderly patients who are discharged prematurely because of insurance shortages or hospital bed unavailability.

Spreading it around

Infection control is ever-evasive in a building full of sick people. Patients sometimes come in with infections which then spread in the hospital. The problem is one of enormous proportions, and the ironic fact is that the hospital is a very dangerous place to be when you’re vulnerable to infection. Something as simple as hand-washing often can reduce the problem, but the risk of infection is enormous and so is the $3 billion annual bill for hospital-acquired infections.

Don't believe everything you read.

There’s a lot of “news” floating around out there about House Resolution 3200. Unfortunately some of the discourse has devolved into scare tactics, misinterpretation and, in some cases, flat-out lies. Much like opponents of the people’s right to get a loan until payday call payday lenders “predatory,” opponents of the current administration are trying to twist language in the bill into meaning something it doesn’t.

It would be impossible, in one work day, for me to tackle all of the misinformation out there. Instead, I’ve picked three general misconceptions about HR 3200 to focus on.

1. The government is encouraging people to die

I chose to tackle this ridiculous claim first because it is the most offensive and the most inaccurate. In fact, the opposite is true. The bill makes sure that patients considered terminal receive proper consultation on things like creating, updating and finishing their will.

It also says that people should know their options. They will be informed about long-term care options such as hospice, nursing homes, etc. Page 429 also says that an order can be issued on the patients behalf that does the following:

“Effectively communicates the individual’s preferences regarding life sustaining treatment, including an indication of the treatment and care desired by the individual.”

I have actually encountered people who think (or say for political reasons) that this bill will allow the government “to issue an order to end a life.” The purpose of this part of the bill is to ensure that doctors don’t pull the plug unless that is specifically requested by the patient. To quote a memo by Ben Lenet, Deputy District Administrator for United States Congressman Jesse L. Jackson, Jr.:

This ensures that patients and families are given ALL the information about ALL of their options and makes sure that in all circumstances, the patient’s wishes are observed.  (This prevents Bill Frist from making medical determinations off of VHS tapes from his Senate office).

2. Government can access personal information

Rumor has it that HR 3200 gives the government access to health records, bank account information and other personal records. It is true, if HR 3200 passes, the government will have access to these things. To put it another way, these things will stay exactly the same.

The government already is allowed access to your health records and bank account information. They were granted it by a little document called the PATRIOT Act. So stop panicking. Or start panicking, but know that the government has had access to all of this information and more since 2001.

3. The government will decide what services you can get

This is sort of, a little bit true. Just as current, private insurance providers specify what treatments  your insurance plan covers, the government-run public insurance plan will have specifications on what it will cover. However, the government will not decide what makes the cut.

To quote, again, from Lenet’s memo:

This plan will establish a panel of DOCTORS who will evaluate the best practices for care.  This will eliminate physicians ordering unnecessary tests and procedures solely for the purpose of a larger reimbursement.

Also, just like private insurers, the government will have a tiered program that will allow people to choose levels of coverage or to add additional services and treatments to their health insurance plans.

You can read the complete text of HR 3200 online, thanks to The Library of Congress. Know that there are poeple out there truncating and quoting portions of the bill making the meaning sound totally different than the truth. So before you believe everything you’re told about HR 3200, check it out for yourself.