Kaiser Permanente's Surprise Billing

Time was (like last year), if I needed to see a doctor through my HMO, Kaiser Permanente, I'd make an appointment, show up, produce a co-payment, and I would see a doctor, and the doctor would provide me with a well deserved scolding (just kidding) and treatment.

As a matter of fact, through Kaiser, a few years ago I had a general practitioner who would take care of minor problems on the spot--EEG, frozen nitrogen to spray off a cancerous growth: no problem.  Done. 

"I'll see you again in a couple of years," said good Dr. Bremmer.

That was then.

This week, without clarification in the election of the premium plan--or sufficiently readable for my tired eyes--also sans warning at the physician's level, or desk notification at the time of visit, and without precedent in earlier years, just look at what Santa has brought me:

There is a second page.

It looks like I'm paying 80 percent of lab fees, a cost set by the insurer and formerly covered by the premium pool.  In Orwellian New Healthcare Speak, this is about the insured health care consumer sharing the cost of treatment (through other than premium payments and co-pay tolls, of course).

This strikes me as similar to airlines charging first-bag fees, unannounced, on top of their ticket price, the ticket no longer fully representing the price of air travel.

Lab work performed on my behalf, this time: routine blood diagnostics (one visit).

I don't have the key to the "procedure codes" (of course not), but will now imagine that each represents a slice of separable diagnostics of the one blood draw.  This makes a single visit to the lab for a blood workup $144.00 plus the co-pay, which, I think was $30 (total: $174 for a short visit with a doctor, a blood draw, and related lab work).

One may well ask what the charges might be for other lab work: how much will Kaiser charge for urinalysis? 

How about something more exotic, like a spinal tap or an MRI?

Would there be a ceiling on those prices? 

Kaiser Foundation Health Plan Chairman and CEO George Halvorson would seem no stranger to, at minimum, questionable practices in the social concern aspect of the medical business.

In Y2000, Mike Hatch of the Office of Minnesota Attorney General stated "Based on the information provided by HealthPartners, there is a question as to whether the compensation paid to certain executives is consistent with state and federal law."

http://kaiserpapers.info/minnesota/executivecompensation.html

(I'm going to provide reference as I go along in this blog, just so you can see how the impression develops).

Just a few years later, 2005, blogger Justen Deal had this hearsay from Mike Hatch to offer: ". . . the Attorney General said there was a complete “lack of accountability and proper stewardship.” He even alluded to Mr. Halvorson being a part of a group of “bad [executives]…who personally profit at the expense of…charitable organization[s] and [their] mission[s].”

http://justendeal.com/blog/2007/12/05/halvorson-lying-to-the-irs/

Justen Deal's source for his statement: STATEMENT OF MINNESOTA ATTORNEY GENERAL MIKE
HATCH BEFORE THE SENATE FINANCE COMMITTEE, APRIL 5, 2005: http://justendeal.com/HatchTestimony.pdf

At the time of Mike Hatch's interest, George Halvorson was President and CEO of "HealthPartners".  This comes directly from then (1999 - 2007) Minnesota Attorney General Mike Hatch through the aforementioned URL:

"After completing the compliance review of Allina in 2001, we commenced a compliance review of HealthPartners, another large nonprofit HMO and hospital system in Minnesota.  HealthPartners was registered with our office as a charitable trust. It has over $1 billion in revenue and operates over nineteen nonprofit and for-profit subsidiaries. The HealthPartners compliance review also took about a year and a half to complete. As with Allina, the compliance review documented a lack of accountability and proper stewardship.

"HealthPartners paid for over 100 flights to over 30 international destinations, including every continent but Antarctica. It paid over $17,000 for its CEO's "trade mission retreats" to Brazil, Chile, and Ireland, though the organization only operates in Minnesota and western Wisconsin. It paid $9,000 for its CEO to travel to Australia to find out: "Are we pricing consumers out of health care?"

"HealthPartners paid over $30,000 per year for its CEO and board members to travel to four-star Florida resorts, where they golfed, dined, and entertained themselves at the nonprofit's expense. HealthPartners paid almost $250,000 for its executives' membership
in and use of country and golf clubs. It paid over $50,000 for its CEO's season tickets to the Minnesota Vikings.

"HealthPartners paid for executives and board members to give each other expensive gifts, including golf clubs, kayaks, crystal, and spa services. It paid for its CEO's living expenses, which it attempted to conceal in expense reports. For instance, a Garrison Keillor satire and book on Harley Davidson motorcycles were billed as "business strategies research."

"Items such as the CEO's lean cuisine dinners were billed as "supplies."  Executives received generous savings and retirement plans, such as "split dollar" life insurance plans, retention bonuses, mutual fund option purchase plans, capital accumulation plans, and supplemental executive retirement plans. HealthPartners took steps to conceal the payments by mislabeling them, and it improperly omitted executives'deferred compensation from the IRS Form 990.

"After HealthPartners began to pay for massages at board meeting, masseuses were implored to "bring more oil" to the next meeting. Ironically, the HMO refused to cover massage therapy for victims of Parkinson's Disease.

Once again, the HealthPartners board of directors not only failed to prevent these abuses, but actively participated in them."

This comes from the Kaiser Permanente web site, March 7, 2002:

"Oakland, CA — George C. Halvorson, president and CEO of HealthPartners in Minneapolis, Minnesota, has been selected chairman and CEO of Kaiser Foundation Health Plan and Hospitals. Halvorson will step into his new role May 1.

"I have always looked to Kaiser Permanente for ideas and inspiration as a key leader in providing not-for-profit, integrated health care," Halvorson said. "The next several years will present some challenges as well as some great opportunities to model quality health care for the world. No one is better positioned than Kaiser Permanente to achieve that goal."

Source: Marshall, Laura H.  "Kaiser Permanente names new health plan and hospitals chairman and CEO."  Press Release.  Kaiser Permanente News Center, March 7, 2002: http://xnet.kp.org/newscenter/pressreleases/nat/nat_020307_halvorson.html

Every day at Oppenheim Arts & Letters, I work a little bit on Islamic thought, Islamic conflict-related events, and the Jihadi whose actions combine straightforward warfare--like this week's fiery sabotage of a coalition transportation depot in Pakistan--with much impersonal mayhem and murder worldwide.

Every now and then, as in my previous post, I enjoy the distraction provided by such as a Robert Mugabe whose sense of privilege has led an entire and once-productive nation into the most thorough and miserable impoverishment and self-destruction imaginable.

Seldom, however -- in fact never across about 400 posts -- have I had the privilege of discovering a board room suit that so well combines visible public service with questionable accounting practices and social ethics.  While at the helm of a mighty healthcare ship, probably on course, but no one really knows, Halvorson would seem intent on  collecting a few more bucks from me ($174 for a 15 minute visit with a doctor and related routine lab work) on top of premium payments while treating himself and his peers like royalty, free to tax his subjects without limit, and able to conceal or mislabel expenses, ploys that plainly belie guilt or worry over the impression executive behavior would make if such expenses were plainly stated and publically acknowledged. 

Mr. Halvorson has a very good defense, of course: he hasn't been indicted by any government, state or Federal, for doing anything wrong.

There's no crime in being a fat cat, and I wouldn't want to make it one, but there would seem something amiss with a health care aristocracy getting its hands ever more deeply into consumer pockets while remaining generally unresponsive to their financial positions and related complaints.

At the personal level--what's another $144 for health care?  It's a discouragement, for sure, when it comes to using the health care system, but it's a small one. 

What happens when a major medical condition comes up, God forbid, I don't know, but the bill received last week has dampened my trust in Kaiser, and trust, perhaps far more than anything else, is what helps one make an appointment to see a doctor in the first place.

Also, this must be mentioned, my girlfriend recently got a similarly unexpected bill from Blue Cross / Blue Shield. 

After struggling to make premiums into the several hundreds of dollars a month, Blue Cross has charged her to recover for itself a high percentage of the cost of a simple prescribed course of physical therapy.

One wonders if there's a relationship between administrative entropy throughout the health care system and the recovery of cost through additional consumer billings: the more we pay, the more the system cares to consume with less and less regard for health care delivery across its insurance-subscribed populations.

From Mike Hatch's description, we well know where some premium payments may be going, but what percentage of them, for how long--and how bad is this racket going to get?

How complicated are insurance premium program descriptions going to become?

How much are consumers going to pay, personally, for how long, and for how much less service?

Here's a little more reading about George Halvorson, a journalist long before he became a health care executive:

CDC.  "Health Care Reform Now! A Prescription for Change."  Book review., 5:4, October 2008: http://www.cdc.gov/pcd/issues/2008/Oct/07_0258.htm?s_cid=pcd54a137_x

Halvorson, George.  "Chairman and CEO George Halvorson Testifies Before U.S. Senate Committee."  Kaiser Permanente News Center, July 17, 2008: http://xnet.kp.org/newscenter/stories/nat/2008-07-17.html

HIStalk.  "Internal E-Mail Criticizing Kaiser's Health Connect Lands Employee in Hot Water; CIO Quits."  November 7, 2006: http://histalk.blog-city.com/internal_email_criticizing_kaisers_healthconnect_lands_emplo.htm

McCue, Michael T.  "More Strong Medicine: A look back at HealthPartners CEO George Halvorson's 1993 book shows healthcare is still suffering."  Managed Healthcare Executive, September 1, 2001: http://managedhealthcareexecutive.modernmedicine.com/mhe/Executive+Profile/More-Strong-Medicine/ArticleDouble/Article/detail/6743

Plas, Joe Vanden.  "Epic responds to critics of electronic record installation."  Wisconsin Technology Network, November 15, 2006: http://wistechnology.com/articles/3491/

The primary ranting site for Kaiser Permanente would seem to be http://www.kaiserthrive.org/.

# # #

Comments

[James S. Oppenheim]

I'm sure I signed up for the privilege of paying premiums plus co-pays plus assorted expenses that were once contained in the HMO's simple premium-payment plan.

My childhood HMO was Group Health Association. Here is the 1994 book concerning its sale to Humana, Inc.: http://www.archive.org/stream/healthreformindi1994unit (flip book) or http://www.archive.org/stream/healthreformindi1994unit/healthreformindi1994unit_djvu.txt (text).

It's hard to believe this country has not been able to "get it together" to produce an affordable, responsive, and universalized health care system. Insteads, it beats up its middle class, pitting fat cats against ordinary workers with middling incomes, and those against others with fewer means.

[tammy swofford]

I somewhat disagree with the analogy by Gerard. A burnt out light bulb is minimal cost and labor (my own). Yet my out of pocket expenditure for flu vaccines using our local practitioner was $172.00. Health insurance benefits include convenience and options not afforded the poor who use county facilities. That being said, a family member of mine was denied reimbursement for a new foot rest for a wheelchair, because it "would not improve function". (United Healthcare) My own family uses Blue Cross Blue Shield of Texas and have found it to be a reliable source of coverage.

Jim, so much in medicine now is based on an overlay of charges and services. This is especially true in the E.D. While the emergency department may issue a blanket charge for the treatment room, the visit to triage for assessment will include a charge for a spot check with pulse oximetry. The x-ray ordered by the E.D. physician will be a unit cost and an additional fee will be generated by the radiologist who also views the film.

Your lab services are not too bad. The pathologist fee is on its way! smile

Tammy

[J. S. Oppenheim]

To separate catastrophic health costs from routine annual costs, the industry would need to define each and produce estimated metrics in each category. If that were done and consumers to were assume some averaged annual risk, I would think them within their rights to expect a corresponding reduction in the annual premium rate.

What some part of the system is doing today is hitting up the subscriber for an annual premium far in excess of expected annual needs, which creates the contribution pool, but then asking for additional funds when needs become apparent.

For those struggling to meet health insurance premiums, there may be little, if any, working margin for covering the descrepency.

Even where funds are sufficient to cover a course of treatment, a number of questions will still stand: how much money over the premium rate needs to be amassed annually to cover what insurance will not?

Is there a useful median expectation for total annual personal health care costs in the absence of a catastrophic or major medical need?

Who will meet that standard?

Who won't?

--Jim

[Gerard Denys]

One problem with our health insurance system is that most agents and customers purchase insurance in the wrong way. The actual definition of insurance is to protect you financially against unforeseen losses. The key here is unforeseen. When you expect your health insurance to pay for every little expense it starts to get very expensive. Just imagine if your homeowners insurance paid to replace burnt out light bulbs or your car insurance paid for oil changes. That would not be insurance. People need to start understanding that if they pay for the smaller things themselves that the premiums will be 1/2 or less. I run a Blue Cross Blue Shield agency in Florida and have noticed that a family can save thousands of dollars a year by only insuring themselves for the things they can't afford to pay themselves. Just like auto and home owners insurance works.

[James S. Oppenheim]

Health care is a little like education: the better off in either that you are, the better off I am too.

The character of our culture contributes to how well public service industries fare as regards both the development of personnel and sustained revenue generation.

In American--and to this point laissez faire economics-- medicine has been treated in the executive ranks as just another business: "care" is "product" and the nature of access and the quality of care received responds to financial wherewithal.

With the aid of a small inheritance, I'm self-employed and have insurance premiums covered out of investment revenue, which, of course, is nice, but growth in the premium rate or any compilation of "cost-sharing" add-ons (we are all already "cost-sharing" through premiums) intrudes on the overall allocation of income, potentially threatening basic expenses in other categories (rent, energy, food, transportation, etc.).

Industry executives charged with formulating system-wide architecture to balance the demands of all who have their hands in the works may do so in ways that treat their considerable inventories as productive assets--i.e., means to producing profit without concern for economic effects associated with increased share at the expense of other public and private cost categories.

We're in need of a public health program less reliant on rapacious souls for its design.

--Jim

[abc]

Do you get your insurance coverage through your employer? It sounds like your employer might have switched you to a so-called consumer-directed health plan, which has high deductibles, cost-sharing, etc.

Employers do this because, of course, giving you less insurance is cheaper than giving you more insurance.

[Mona Lori]

I would like to invite you to visit www.outofpocket.com, a community search tool that enables consumers to share and compare prices paid for actual health care services. The site invites consumers to post/share true prices for routine health care services, to expose the true cost of health care services. Both insured and uninsured consumers use outofpocket.com to look-up prices, compare what other consumers paid for similar services to determine a fair price for services. I welcome all comments.

Regards,
Mona Lori
Founder
www.OutofPocket.com