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Articles by John Hoff

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Shock Your Doctor: Ditch Insurance And Pay In Cash August 3, 2016

By Michael T. Hamilton. The Federalist — Aug 2, 2016.

So a man walks his wife up to the receptionist’s desk at a surgery center to check her in for a minor invasive procedure. A smiling twenty-something woman in purple scrubs greets them. She chirps a handful of questions to make sure the wife’s file is current. As she scrolls down on her oversized computer monitor to verify the wife’s insurance information, the couple waits for the penny to drop.

And there it is. “But … it says here you’re self-pay,” the receptionist says, her smile gone.
“And we are,” the man says.

“But you need to pay $1,500.”

“And here is our credit card.”

The receptionist reaches for the embossed plastic rectangle the man is sliding across her desk. She holds the card in both hands, contemplating it before running it through her machine. She appears bewildered. Probably she does not realize she just earned her employers easy, and maybe extra, cash.
Receipt in hand, my wife and I walked off to surgery prep, pleased to have paid our provider for health care and not one dime to an insurance company. We belong to a growing minority of American patients who not only lack health insurance—we like lacking it, and we like the health care we buy, too.

The receptionist, however, belongs to the dwindling majority of American health-care professionals, patients, elected officials, and appointed bureaucrats who have been conditioned to conflate health care and health insurance.

Pay Your Way, Change the World
A world, and worldview, of difference separates the two. Many people and governments of the Ideally Insured worldview erroneously consider health insurance the sine qua non of health care—the payment method “without which not” a single red-blooded American can get so much as a blood test, except by incurring obscene expenses for himself, his provider, taxpayers, or all three.

Surely patients who go uninsured, according to this worldview, fall somewhere on the caste system below the Ideally Insured Patient (may he live forever, etc.). Lower rungs of this caste include the uber rich, the indigent, and lawless bandits who don’t know or don’t care President Obama signed the Affordable Care Act into law six years ago.
By contrast, self-pay patients of the Unconcernedly Uninsured worldview know the truth, and the truth is setting them and their health-care providers free. Although self-paying requires a modicum of cash flow and short-term savings, self-pay patients need not be rich. They can be and frequently are poor, or close to it, by federal poverty guidelines. The self-payers we know are aware enough of ACA’s mandates to factor its penalties and exceptions into their cost-benefit analysis.

These self-payers’ analysis weighs the cost of insurance premiums and deductibles—which have increased dramatically in dozens of states since ACA’s implementation—against their unlikely prospect of maxing out their deductible in a given year. Whoever does not max out his deductible may as well be paying cash, because insurers won’t be reimbursing him.

In fact, patients who don’t max out their deductibles would do far better for themselves and their doctors by paying cash straight up. Providers typically charge 20 to 50 percent less when they can get paid immediately and without funneling payment through a third-party health insurer. That’s not charity. That’s savvy.

How to Scoop Up Your Own Gravy
Physicians and surgeons set their prices to cover all costs related to patient care, including the time and labor spent processing insurance claims to make sure insurers pay what patients do not. Sometimes insurers compensate these doctors months after service was rendered. Cutting out the middle-man insurer saves providers so much time and money that more are ditching the insurance model to run cash practices and offer patients direct-pay membership agreements.
Consider the $1,500 the happy couple (my wife and I) paid. This amount was the second of three prices the provider quoted us: $2,250 if billed through insurance, or $1,500 paid the day of service, or $550 paid the day of service plus $1,700 through an indefinite payment plan.

Our bet, in hindsight: The office recovered its costs and maybe a modest profit with the first $550 we paid—the bare minimum payment, presumably for a poor patient unlikely to pay the rest (hence the payment plan with no deadline). The next $950—which we also paid same-day—was gravy for the practice. Had we paid through insurance, the practice would have banked the gravy plus some of an additional $750 after administrative labor costs, possible claim disputes, and haggling. (I love a good fight.)

Looking back, and assuming we’re right about the three quoted charges, our only regret despite getting a $750 discount is failing to claw back even more of that gravy, due to us being fairly green self-payers then. This would have fattened not only our own wallets, but the purse of the health-care sharing ministry (HCSM) that reimbursed us for $1,200 of the $1,500 we paid. Better yet, our HCSM financially incentivizes us to seek documented discounts, so we could have made bank.

That’s not charity, either. That’s just how self-pay patients do business.

Michael T. Hamilton is The Heartland Institute’s research fellow for health care policy, author of the weekly Consumer Power Report, and managing editor of Health Care News, an online and print newspaper read by market-minded health care professionals, policy analysts, and 56 percent of lawmakers.

Read the article in The Federalist

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How Uber Will Redefine Healthcare July 11, 2016

By Robert Graboyes.
RealClearHealth – Jul 11, 2016.

My Twitter pal and founding partner of Forthright Health Management, Tom Valenti, wrote in TechCrunch that “there will never be an Uber for healthcare” because “[h]ealthcare is not a transaction business; it is a relationship business.”

I’ll respectfully disagree: Healthcare “Ubers” are already proliferating and will ultimately reshape 21st-century medicine. The more aspects of healthcare we can shift from relationship to transaction, the better life will be for patients and doctors alike. 

Tom says “Uber for X, Y or Z” means “making something easy and convenient.” But Uber is also about safety, reliability, and civility. Uber gives your daughter a photo, name, and license plate for the stranger who picks her up in the wee hours; shares a detailed record of her route; and likewise protects the driver. Variable pricing gets her a ride quickly when lightning is crackling above. The GPS keeps a novice driver from getting lost in unfamiliar quarters. For riders and drivers alike, individual ratings discourage rudeness, recklessness, and the abuses that come with monopoly. 

Uber’s true essence is this: It accumulates a vast amount of information on the micro-details of cities; overlays that information with real-time data on prospective drivers, riders, and road conditions; reduces staggeringly complex decision trees to algorithms; and instantly presents drivers with a manageable number of highly intuitive options. It thus obliterates the learning curves and fixed costs that such information previously demanded. In effect, Uber establishes, digitizes, and stores relationships to make transactions possible.

As Tom notes, a strong relationship with a specific doctor can be quite valuable. But it would actually be a better world if that were less the case—and that is how the healthcare Ubers are already saving and improving lives.

If your healthcare depends on a long-term relationship with a specific physician, then by definition, your care suffers when you move, when you become ill while traveling, or when your doctor is away or asleep. It means the quality of your care depends heavily on the hard-to-judge abilities and scope-of-practice of your specific doctor. It can harm us when we delay care in order to see the specific physician with whom we have this relationship. Relationship dependency effectively limits choices to doctors in your local vicinity, discouraging remote consults with expert practitioners most familiar with whatever ails you.

When illness strikes while I’m in California, I would strongly prefer a world where the random doctor I see there, armed with Uber-like tools, can provide the same care my own doctor provides me in Virginia—or something close to it.

To shift some (not all) of healthcare from relationship to transaction, we’ll have to imitate what Uber did: Accumulate vast databases of population health care information. Develop better and more comprehensive telemetry for real-time tracking. Apply artificial intelligence to discern patterns no intuitive physician can see and to narrow down treatment options. And package this information for instant comprehension by patients and providers (including non-physicians).

We are only at the dawn of this revolution. With a smartphone or tablet, you can access Doctor on Demand(24/7/365 access to board-certified physicians), Recovery Record (eating disorder analysis and management connecting 350,000 patients and 10,000 therapists), AliveCor (30-second EKG to flag atrial fibrillation), and Heal (a very Uber-like app to summon a doctor to wherever you are). From your own living room, Opternativecan inexpensively measure and fit you for eyeglasses via laptop. e-NABLE matches people worldwide who need prosthetic hands with those who wish to build them on 3D printers.

For this revolution to flourish, the Ubers of healthcare must be bottom-up endeavors, forged through competition, with success or failure resting on the value they provide to patients and providers. In contrast, top-down efforts, such as today’s government-mandated electronic health records (EHRs), present an enormous impediment to innovation. Today’s EHRs are designed to serve insurers, third-party payers, and governments—not patients or providers. They are needlessly souring providers on the promise of technology.

Almost certainly, some aspects of healthcare will be impervious to Uber-like innovation. In these areas, the intuitive physician will remain indispensable. I recently sat down with a roomful of health innovation notables—physicians, entrepreneurs, financiers, and scholars. Someone asked how much of modern medicine we can, in time, reduce to algorithms. Guesses hovered about 80 percent, with one participant suggesting 97.5 percent. Some futurists envision a near future when computers like IBM’s Watson can out-diagnose any physician, as doctors’ capacity to absorb and analyze data is severely limited by time and cranial capacity.

As we convert more and more of medicine to transactions—and we will—patients will find it easier to tend to their health, and doctors will find themselves freer to focus on those areas where relationships are truly irreplaceable.

Read the article in RealClearHealth

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Is the Obama administration illegally diverting billions to insurance companies? May 27, 2016

According to a legal opinion letter by former White House Counsel C. Boyden Gray, the answer is YES.

In this recording of a May 26, 2016 media conference call, experts describe the Obama administration’s decision to pay health insurers generous reinsurance subsidies while stiffing taxpayers, despite a statutory requirement that fixed sums must go to the U.S. Treasury.

Mr. Gray’s letter reinforces the conclusion of experts at the nonpartisan Congressional Research Service, who also found that the administration’s actions “would appear to be in conflict with the plain text” of the ACA regarding the Transitional Reinsurance Program.

Speakers on the call:

For more on this issue, read our column at Forbes.  The media call was sponsored by the Galen Institute, which also commissioned the legal opinion letter from Mr. Gray.  (The recording starts about two minutes into the call with Doug Badger speaking.)

For more information or to contact the experts, please contact Grace-Marie Turner, Galen Institute, Office (703) 299-8900 or

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Political Choices Made To Goose Obamacare Are Now Wrecking It May 20, 2016

By Scott Gottlieb.
Forbes – 5/20/2016.

Health plans are seeking double digit rate increases for their 2017 Obamacare plans—17.3% in New York, 25% in Michigan, 20% in Oregon, as examples.  From special enrollment periods to countless exemptions, the Obama administration traded short term political gain for the long-term stability of the program and its risk pools. The big premium spikes for 2017 are an economic reckoning of this shortsightedness. The policy mistakes have compounded Obamacare’s woes. Fixing them will require more than regulatory tweaking.

Read the article in Forbes

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Obamacare: The Gazillion-Dollar Startup Machine April 6, 2016

By Jeff Bercovici.

San Francisco Bureau Chief, Inc.

Seth Sternberg was visiting his 65-year-old mother in Connecticut when he got the idea for his home-health-aide business, Honor. She’d picked him up at the airport, and he noticed that she was driving really slowly. He asked why. “And she was like, ‘Well, driving’s just harder than it used to be,’ ” he recalls. This got Sternberg’s mind working. What if his mother were 75 or 85, and tasks like driving or bathing were not just harder but impossible? Would she need to move into assisted living? “If I ever said to my mother, ‘You need to leave your house,’ she might kill me,” he says.

Sternberg, 37, had sold his previous company, the messaging service Meebo, to Google for a reported $100 million in 2012. He and Meebo co-founder Sandy Jen were looking for a new startup idea, together with two of their Stanford friends, Plaxo co-founder Cameron Ring and Monica Lo. They wanted their follow-up act to be something important, so they started researching the state of in-home senior care through interviews with geriatricians, private-duty caregivers, and senior-center administrators. They learned that it was ripe for improvement. It was hard to get a health aide for less than four hours, because agencies usually paid them minimum wage and they spurned jobs that would earn them just $20 or $30. Finding qualified aides involved hours of sifting through resumes and interviews–and was still a crapshoot. Records languished in spiral notebooks. Sternberg’s team realized an Uber-like logistics algorithm could match patients to local caregivers, making shorter visits cost effective. Digital records could reduce mistakes and ensure continuity of care. User ratings could make for easier vetting. On the strength of the idea and the co-founders’ track records, they raised $20 million from Andreessen Horowitz and others to launch Honor. They built two mobile apps–one for consumers, the other for caregivers–and a software back-end to connect them, then recruited care pros and seniors for a pilot program in Walnut Creek, California. Honor is now up and running in the Bay Area and parts of Los Angeles.

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