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Healthcare Part II: Addressing Healthcare

By: Dale J. Buchberger

Last month I finished by saying I would address efficiency in healthcare. There are several areas that can be more efficient. The most glaring place and the area that can be remedied the quickest is in the area of billing. It has been estimated that approximately 30% of healthcare costs are in paperwork. Currently there are three sets of codes used in healthcare billing: CPT or common procedural codes (owned by the AMA), HCPCS or Healthcare Common Procedure Coding System numbers, are the codes used by Medicare and monitored the CMS or Centers for Medicare and Medicaid Services and lastly the ICD codes. ICD means International Statistical Classifications of Diseases. ICD codes are alphanumeric designations given to every diagnosis, description of symptoms and cause of death attributed to human beings. These classifications are developed, monitored and copyrighted by the World Health Organization (WHO). In the United States the NCHS or National Center for Health Statistics, part of the CMS oversees all changes and modifications to the ICD codes, in cooperation with WHO.

As you can see there are several issues of complexity and antitrust violation just in the mere issue of coding and billing. First of all there is no reason to have more than one procedural coding system. This only complicates billing procedures, confuses the public and raises the overhead of healthcare facilities. In order to add or change a CPT code the providers or product developer would have to go through and presumably pay the AMA. Therefore the AMA has control of the entire healthcare system via their ownership of the CPT coding system. Trying to create more efficient coding in all of the ancillary healthcare professions has to go through the AMA. This is an area where the government should be involved. Adopting an all-encompassing procedural coding system that allows for addition and change with an efficient pathway and minimal cost. A private membership organization should not be in control of the healthcare procedural system.

The ICD system is more accurate than the CPT system but could use updates and could use a streamlined approach to access and making additions. The current ICD systems of diagnostic codes are merely regional generalizations. There are certain body systems that have a very comprehensive and specific list of diagnostic codes while other regions lack specificity. This creates a problem for providers when communicating with other providers and third party payers. Having the ability to make additions to the coding in a timely manner would improve efficiency in communication, treatment and billing.

Now lets look at some real numbers and see how the growing trend of inefficiency over the last 10 years is costing consumers more and making the “insurance industry” billions of dollars! The following numbers are my personal medical costs from 2004 until 2010. I consider myself a relatively healthy person as well as my family. The costs displayed are for two adults and one child over a six-year period. In the year 2004 my total out of pocket medical expenses (premiums, co-payments, deductibles, prescriptions, etc.) were $6471. In the year 2010 they were $14, 267. So as a patient my medical expenses have more than doubled in 6 years. At the same time as a healthcare provider reimbursements for my services have been cut by 60%. Now you don’t have to be a Harvard mathematician to figure out that someone is making boatload of cash on this and it’s not you or I.

There are several “insurance carriers” doing business in New York State that increase the paperwork for the provider and the patient to such a level that the gross inefficiency costs the provider more than what the reimbursement is. The paperwork is merely an avenue for the “insurance carrier” to have “reason” to deny services. But wait isn’t this where I started last month? Didn’t you buy into a plan that covered you in case you needed to use healthcare services? But as I said last month your plan guarantees nothing. Then what was that 200% increase in premiums and out of pocket expense for? Most likely it was to pay for the CEO’s multi-million dollar bonus.

To summarize to this point we have a coding system that is not up to date and lacks specificity. We have a repetitive paper trail specifically designed to discourage and prevent use of the product you purchased. The “insurance industry” continues to use deny and delay tactics regarding claims reimbursement. Lastly we have a system that allows premium increases at unchecked rates for fear of retribution that the carriers will pull out of the state and not insure any new cases. Next month, I will discuss my phase one plan to fix the healthcare system. I’ll give you a clue; it’s not rocket science.