Too Needed to Fail
Healthcare economics is something I think about constantly. Healthcare controls: why are they not the same as financial controls. During my days at one of the Big-4 accounting firms, I learned the importance of financial and IT controls. I was lucky enough to witness the Big Bank Bailout early on in my career. The two overarching issues that stick out to me are: ethics and demand.
Paraphrasing from a common resource: "Too big to fail" describes a business sector deemed to be so deeply ingrained in an economy that its failure would be disastrous to the economy.
In the U.S., we spend about two times more on healthcare as any other industrialized nation. U.S. health care spending grew 4.6 percent in 2018, reaching $3.6 trillion or $11,172 per person. Healthcare spending accounted for 17.7% of our nation's GDP.
We often analyze why healthcare is so costly but the time for that is over. For far too long we have been on the precipice of care. COVID-19 is the highlighter we have been waiting for to strike through the issues we know about but never see improving. Also, it is the accelerator. We are seeing COVID-19 causing issues to develop more quickly. For example, the challenges we are facing with sending medical supplies across the country. Healthcare has always been a huge economy but we have been fat and happy for a while. In the industry, we know that an amount of fraud is acceptable because the profits are so high and the economy is so great. Fraud may be okay for insurance companies, but it is not okay for the consumer. Is it finally the time to start working together to follow what works for the financial industry? More about what is required and necessary to deliver care than what has always been done.
A large argument made in favor of healthcare’s inordinate and inconsistent pricing is: Healthcare is a business. If that’s the case, why doesn’t healthcare allow financing?
You’d be hard-pressed to find a double check or duplicate transaction passed through by the FDIC, but when it comes to healthcare billing – redundancies happen constantly. Imagine how quickly you’d be accosted and shut down if you suddenly decided to write checks in one manner with a particular bank, then went to a different bank and adopted an entirely new method. This is exactly what happens with doctors and insurance.
I love process improvement and best practices. I can’t understand why providers are given free reign to bill insurance companies differently, seemingly based on the direction of the wind. Beyond that, I can’t understand why insurance companies fail to disclose when a provider is put into prepayment. Implementing this as a policy would be in the best interest of the patient – someone whose welfare is so often lost in the healthcare “business”.
What does “prepay” mean? Simple. Let’s say a provider has an audit, and their results are so bad that they can no longer have their bills paid until more audits are performed to confirm the legitimacy and accuracy of their claims. If a big payer like Blue Cross Blue Shield discovers something problematic like this through their audit initiative, it would be prudent of them to add the provider to a list that could be seen by United, Cigna, CMS, and the like – so they could make an informed decision on this provider’s status within their networks.
If they so choose, the other payers could then send the provider through their own audit processes to mitigate the risk of inconsistent and often inaccurate billing practices. Why are we allowing providers to disseminate similar information differently depending on the vendor?
Most law enforcement officers, particularly those working with the OIG, subpoena such information in collaboration with commercial payers – but it takes a lot of paperwork and bureaucracy to get there. Information sharing is the impetus of justice in healthcare fraud investigations – but why isn’t this kind of transparency the standard for providers before it becomes a problem?
They say knowledge is power – but it seems as though the current healthcare model isn’t conducive to sharing knowledge.
My question to my network is: What are the potential benefits and pitfalls of implementing, or even piloting such a system of more information sharing? Not just transparency but more so best practices. It would certainly meet backlash by providers – but wouldn’t payers and CMS appreciate having to hop through a few less hoops to analyze provider behavior?