A Consumer’s Guide to Health Care

Published July 1, 2008

America’s Health Care Crisis Solved
By J. Patrick Rooney and Dan Perrin
John Wiley & Sons, 2008
242 pages, hardcover, $29.95, ISBN 978-0-470-27572-6
Available on Amazon.com: http://www.amazon.com/Americas-Health-Care-Crisis-Solved/dp/0470275723/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1211835834&sr=8-1

While the title America’s Health Care Crisis Solved may suffer from hyperbole, the new book by J. Patrick Rooney and Dan Perrin could indeed go a long way toward solving many individuals’ personal “health care crises.”

It is not primarily a policy book advising lawmakers and intellectuals on how to solve the systemic problems in American health care. Instead, it is mostly a guidebook for consumers to use in navigating a complex system that is generally stacked against them. It makes for an excellent companion to Regina Herzlinger’s Who Killed Health Care?

Herzlinger’s 2007 book identifies the entrenched special interests–hospitals, health plans, employers, regulators, and academics–that have created the monstrosity of a system we have today and lists many of the public policies that keep those interests in power. She provides recommendations that could begin to transform our system into one that is more competitive, innovative, and convenient. Many of her recommendations do not require a change of laws and regulations, but only a new attitude by the employers, hospitals, and health plans that have to date enjoyed near-monopoly positions in this sector.

Solutions Identified

Rooney and Perrin focus on many of the same problems and interests, but they take the next step: Cataloguing the weapons and tools available to consumers to survive in this distorted system.

The authors focus particularly on problems people have paying hospital bills. Rooney and Perrin are scathing in their assessment of current hospital billing practices that charge self-pay patients four to five times what they charge a PPO for the exact same service.

They provide a host of examples culled from the Hospital Victims Web site (http://www.hospitalvictims.org) and provide specific advice on how to deal with a hospital that has overcharged you. The help includes information on the following:

  • how to find out what Medicare would have paid for the same service;
  • how to invoke the federal Fair Debt Collections Practices Act to protect your credit rating;
  • how to request a UB-04 or a UB-92 form to find out precisely what services you are being billed for;
  • how to file a legal complaint when the hospital is overcharging you; and
  • how to find personalized help in getting justice from a hospital.

The book includes samples of the forms involved and letters consumers would need to write under different circumstances.

Much Useful Info Included

The book also includes other helpful information, such as a listing, including phone numbers, of all the high-risk pools in the states, so if you have been denied coverage by an insurance company you may still be able to get health insurance.

The authors suggest using retail clinics instead of emergency rooms as a way of getting minor ailments treated affordably and conveniently, and they highly recommend getting a Health Savings Account over other forms of coverage.

Reform Ideas

The authors also cover some solutions that would require new laws.

One the authors favor is mandatory price disclosure by hospitals and physicians, as California currently requires. The authors recommend a bill currently before Congress (HR 4450, the Hospital Price Disclosure and Litigation Practice Act) that would be a major move in this direction.

They also recommend allowing the interstate purchase of insurance as envisioned in HR 4460, sponsored by Rep John Shadegg (R-AZ).

But the authors’ biggest reform proposal is what they call Fair Care. This would provide a refundable tax credit (or voucher) to every American of $2,000 for each adult or $5,000 for a family with two adults and children. It would pay for this by ending the current exclusion from taxable income of employer-sponsored coverage.

The book does not give many details about the proposal, however, and it doesn’t address questions such as whether individuals should be required to buy insurance or what, if any, restraints would be put on rating and underwriting by insurance carriers.

Quibbles and Bits

No book is perfect, of course, and this one is no exception. I would have been happier if the authors had included more footnotes. The book often refers to statistics or studies without providing information on sources.

I also take issue with a few of the recommendations. For instance, the authors do not like risk adjustments under Medicare, arguing it discourages enrollment in Medicare MSAs. Maybe, but risk-adjusting premiums under Medicare Advantage strikes me as a very good thing that encourages carriers to enroll high-risk individuals. I am quite certain these authors correctly oppose community rating in private insurance markets, and I don’t see how community rating under Medicare is any better.

Oddly, the authors claim risk adjusting is “forbidden within the private sector of the health insurance industry.” If so, this is the first I have heard of it, and again, a supporting footnote would have been handy.

Government Creating Problems

As much as I support MSAs in Medicare, I don’t think they are the sole thing that needs to happen with the program. The authors don’t address the program’s bans on balance billing and private contracting by physicians or the fact that to offer MSAs a carrier has to become a federal contractor with all the administrative burden that entails.

It would be far better if Medicare beneficiaries could be brought into the same “Fair Care” plan the authors recommend for the rest of the population. This would be very similar to the “premium support” proposal of the Breaux-Thomas Commission that President Bill Clinton shamefully rejected.

And while I largely agree with their critique of hospital billing practices and efforts to monopolize the market, I think we must also acknowledge excessive regulations and tort law have made life difficult for hospitals.

The Federal Emergency Medical Treatment and Active Labor Act (EMTALA), a statute governing when and how a patient may be refused treatment or transferred from one hospital to another when in an unstable medical condition, requires hospitals to serve illegal immigrants, gang bangers, and others who will never even try to pay for the services consumed. In addition, Medicaid pays less than it costs to deliver care, and mandates such as the nurse-staffing ratio law in California add costs and reduce flexibility.

But overall, this book is a welcome addition to the literature. Unlike many books written on health care these days, this one provides concrete assistance to real consumers. The authors should be congratulated for taking us to the next level of patient empowerment.

Greg Scandlen ([email protected]) directs Consumers for Health Care Choices at The Heartland Institute.