What Happens When a Healthcare Startup Leaves You With the Bill

Kaiser is great. The problem is with Kaiser is that it's not available nationwide. If I remember, it's only available in big metros.

> how much of a pain in the ass it is to get an insurance claim on your house or your car or whatever filled.

I have had nothing but excellent experiences with both my car insurance company and my homeowners insurance company.

The trick to having a good relationship with your insurance company is to have a good insurance company.

> I have Kaiser. It's vastly simplified because the people paying for my care are the same people who are providing my care. They also seem to have a real "get you up and running so you can get back to work" kind of attitude, which meshes well with my own values.

I'm glad that was your experience with Kaiser, because it certainly wasn't mine.

I had herniated disc that ultimately required surgery. It was bad enough that I couldn't sit at all & couldn't stand for more than a few a few minutes.

Laying flat would take away some pain but not all. It would roughly 8 weeks before I would know again what it was like to be pain-free.

During that time obviously I couldn't go into work. Even the basics -- showering & going to the bathroom -- were a challenge. I quickly found vicodin didn't do anything for my pain, but I continued to take it simply because it kept me constipated. (One bad bathroom trip was better than several.)

I saw 4 different doctors in my first weeks. Initially I was giving a variety of pain killers & muscle relaxers. We asked about an MRI each time & was told it was unnecessary.

Eventually we worked our way through the Kaiser system & started to get to specialists who knew more about what they were talking about. Each one regarded my situation as one of the most severe they'd seen & refer to the specialist that was the next level up.

We finally got one to request an MRI. That request was "lost." We called several times, each time being told they'll take care of it & to call back in 24 hours. Finally the next doctor sent in another request, and told us to personally contact her in 24 hours (giving us her cell!) if it wasn't scheduled.

One of the biggest challenges was that each specialist was in a different department. Meaning it would be 1-2 weeks of waiting for the next appointment in that department. Absolutely no consideration is given to the length to how long I'd had my current condition.

Eventually we did to a surgeon -- a really good one. He took pity on both the severity of my situation & the length to move things around & fit me in earlier. The crazy thing being, it could have been even longer if he hadn't.

Without question, the worst 8 weeks of my life.

When an entity like Kaiser can't control costs by deciding what claims they'll approve, it seems they'll instead control costs by deciding what access to care you'll receive.

Honestly, I'm not sure that's much better.

I think that it's generally a good assumption, anywhere in business (and most places in life), that whoever you're talking to is self-interested. Not evil, not even necessarily selfish, but it's a good bet that their world revolves around them.

And once you've got this principle ingrained in your mind, navigating the big scary world of business, or VC, or Google, or health insurance, or any other industry becomes much easier. Because you start to look for what people's incentives are, and don't ask them to do things that are against their own incentives. People are much more inclined to cooperate with you when it doesn't hurt their own interests.

People who actually "disrupt" industries, rather than just talk about it, do so by finding loopholes in other folks' incentive structures. They figure out other ways of doing things that incentivize everybody involved to cooperate with them, and that's how they revolutionize things.

the design is handed down by government mostly, because of the bewildering number of laws, regulations, and such, that have wrecked havoc in health care for years. Then to top off whatever mess the Federal government makes each state just has to be enough different that what you bought in one state might not be exactly the same in other; used to be (and might still be) that you could not shop across state lines because of government.

Then once you pass that insurance hurdle that regulation/regulators/insurance companies put up its off to the races with the doctors and facilities who may both not be covered by policies again because of the weird way regulations and such work. What can and cannot be performed by who and where it can and cannot be performed.

The the kicker, using low payouts of medicare and such because the government knows the insurance companies and hospitals will make it up on people who can pay thereby redirecting the ire

"it's even less efficient that its government-run counterparts" Because the VA System is so lean, mean and well run. All health care should be modeled after the gubberment Rolls eyes

> If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.

This isn't an apples-to-apples comparison for several reasons (some which overstate the amount of money, some which understate).

One, there are a number of things which fall under Medicare's budget which you and I wouldn't think of as the "main" purpose of Medicare in this context (ie, providing medical insurance to the elderly).

On the other hand, look at the profit margins of any hospital broken down by insurance status. Virtually any hospital hemorrhages money on uninsured patients, Medicare patients, and Medicaid patients. They make this up by charging patients on private insurance, and in the end eke out low single-digit profit margins if they're lucky (most aren't). If you're on private insurance, you're essentially subsidizing the medical care of the aforementioned groups (whether you pay it in the form of your deductible, or in the form of your premiums[0]).

As the largest payer, Medicare has the leverage in order to decide what it will and will not pay for, and providers have very little choice but to accept that, whether or not it's economically feasible for them. (This is the exact inverse of the situation most of us are in with our ISP/cable providers (we have an essential monopoly on broadband access in most parts of the US). When there is a single purchaser, this is known not as a monopoly but as a monopsony[1])

It's easy to say that "costs are too high" - that's fine, but where are they too high?

The easy response to this is that hospitals and doctors are making too much money. But in reality, most hospitals are struggling just to say solvent, which is why we've seen massive consolidation in hospitals in the last several years as hospitals go out of business. The same is true of doctors, who are selling to these larger hospitals because their private practices are now financially unsustainable[2]. Of course, this really just pushes the problem up the food chain, because those same hospitals are already struggling to keep the lights on.

I don't really have an answer to this, by the way... I just want to relay an appreciation of why the situation hasn't been fixed yet - it's very complex, and nearly every option involved has significant, serious tradeoffs that nobody really wants to address (whether for political reasons, ethical reasons, or otherwise).

[0] Remember that the size of your premiums are (loosely) linked to the expected value of providing medical care for you. Mathematically this is trivial to show - in reality, the market isn't so efficient, but it's simple enough to say that if your insurers' costs go up, in the long run, your premiums will as well.

[1] https://en.wikipedia.org/wiki/Monopsony

[2] This 116-page report gives a very extensive analysis of the economic state of physicians. Don't be fooled by the title - this trend began long before the ACA, even though the scope of this study was the impact of the ACA specifically (which has contributed to the trend which previously existed): http://www.physiciansfoundation.org/uploads/default/Health_R...

Also in the industry, but on the HL7 interface side.

I think you've hit the nail on the head. I've seen studies that suggest, for example, a 75-90% reduction in med error rates in hospitals that have gone to computerized barcode systems. So there's a tremendous amount of good to be done in the field.

But, as you point out, the potential damage that can be done by mistakes makes for a fair bit of anxiety at times. Fortunately, it's been my experience that people in the field tend to take testing very seriously as a result.

Another interesting thing on that aspect - I'm one of the only people in my department that doesn't have a prior clinical background. I almost wonder if the fact that they're less trusting of the technology at times is a good thing to some extent.

Single-payer health care is a system in which the government, rather than private insurers, pays for all health care costs.

http://en.wikipedia.org/wiki/Single-payer_health_care

Remember that that pledge can be fulfilled by increasing employee (i.e. CEO) salaries, nicer buildings for the company, etc. That's what's happened at our local BCBS affiliate.

Doctors would say health care is expensive because of the threat of lawsuits which forces them to carry expensive insurance. It's easier for hospitals to price gouge when they're billing a faceless corporation instead of an individual.

The law’s basic position on corporate social responsibility famously was articulated in Dodge v. Ford Motor Co. In 1916, Henry Ford owned 58% of the stock of Ford Motor Co. The Dodge brothers owned 10%. The remainder was owned by five other individuals. Beginning in 1908, Ford Motor paid a regular annual dividend of $1.2 million. Between 1911 and 1915 Ford Motor also regularly paid huge “special dividends,” totaling over $40 million. In 1916, Henry Ford announced that the company would stop paying special dividends. Instead, the firm’s financial resources would be devoted to expanding its business. Ford also continued the company’s policy of lowering prices, while improving quality. The Dodge brothers sued, asking the court to order Ford Motor to resume paying the special dividends and to enjoin the proposed expansion of the firm’s operations. At trial, Ford testified to his belief that the company made too much money and had an obligation to benefit the public and the firm’s workers and customers.

The plaintiff Dodge brothers contended an improper altruism towards his workers and customers motivated Ford. The court agreed, strongly rebuking Ford:

"A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes."

http://www.professorbainbridge.com/professorbainbridgecom/20...

What about Dodge v. Ford Motor Company?

I agree that Valleywag shouldn't be banned on the basis that they often contribute unique articles not discussed by other tech outlets. (e.g. http://valleywag.gawker.com/the-laundry-quarters-startup-is-...)

Although to be fair, there are a few "rich people in tech suck because they're rich" articles which are more hostile.

That's a bit cynical, no? Everything else is payola?

Who knows why certain publications are banned. Maybe it's not their content but that they spammed the site and with sockpuppets?

That said, I'd like to fewer filters on which publications are banned. I submitted something from CNET that went to auto-dead. Seems like something I'm sure Dan and team are on top of. Why not send them note?

Most of ValleyWag articles are extremely biased and twisted.

There are actually too many things to list, their Uber coverage, their coverage of start-up 'parties' and how people are throwing money there (while Gawker holds the same parties) etc.

Then you have this:

https://www.youtube.com/watch?v=_jtmFlUg56w

You smug bastard. Joking, but i'm in the US and have had so many issues in my life with huge medical bills and debt collectors, denial of care, insurance refusing to pay because a doctor messed up the paperwork, insurance not covering certain medications, or saying the dosage needed to be changed, that i'm almost not. :-p

It gets even worse than that. Some people are stuck with an HSA.

A HSA is not insurance (it covers nothing), but it looks like insurance (so hospitals still charge you the 'ten times more' price).

A $100 doctor visit, becomes $900 "charged" to your HSA (because you 'have insurance' so they can eat the artificially-inflated cost). But since HSA never covers anything, the insurance always just passes that $900 bill on to you. They stamp "THIS IS NOT A BILL" on the top, but that's a lie, it always requires you to pay money.

You call up the hospital and explain "I don't have insurance, I need the sane price." They say "we can't give you that price, you have insurance." No one in healthcare understands that HSA's aren't insurance, and cover nothing, so no one will let you pay a manageable sum of money.

I've always viewed it as an arms race to see who can get away with what between providers, insurers, and patients (and before ACA, employers to a degree).

The true cost of service at this point includes having staff and systems (with their own support staff) to negotiate and calculate the cost on both the insurer and the provider side.

So, in a way, if you have one particularly tough to deal with insurer, that cost gets distributed among all patients, and their insurers as well. In addition, the basic cost of any visit now includes some of that administrative overhead.

In the oil change analogy, if you had to walk into the shop, and there was a base price of $50 to cover the administrative costs, you had to wait until you saw a mechanic to decide if you really needed an oil change, and they charged $50, and then you paid the $20 dollars for the oil change, you can bet by now someone would have started marketing a per-visit copay style insurance for cars too.

None of this is to say I disagree with you, just that it's even worse than I think we all think it is.

Comparing cars to human beings is disingenuous. A car is a machine with a finite number of parts and well-documented methods of action.

A human body is an enormously complicated set of systems that can mysteriously fail at anytime for no reason at all, and then fix itself without intervention at times. There is a reason doctors are "in practice."

Perhaps, but I've never seen one. Though I suppose getting an extended warranty from the manufacturer is in the same vein. And dealers work more naturally with the manufacturer so there's usually less headache.

>I've talked to a couple health-care startups on the East Coast that have started by tackling one small aspect of healthcare and built off of that. Prescription drug tracking. OR procedures and checklists. There are tons of companies in the medical startup space that are doing good work, there are tons of areas that traditional big tech companies have failed to innovate in that are ripe for being upset.

While this is true, one of the problems currently being faced by the industry right now is that all of these niche vendors have their own ideas about how data should be handled, and it's resulted in a fair amount of balkanization of the healthcare IT industry.

It's getting better, and HITECH and the ACA are finally pushing toward real standardization and data interchange, but from where I'm sitting (working in healthcare integration), it's probably going to take us another decade to sort out the mess things are in today.

The issue with that, is there's no good way for the doctor to get paid for doing it. Prior to 2009 there was no billing code for phone calls or email and currently the rules around what is a "billable" consultation are complex and the coverage by insurers is far from uniform.

More info here: http://patients.about.com/od/followthemoney/f/Why-Doctors-Wo...