The World Economic Forum published an article (https://www.weforum.org/agenda/2016/04/which-countries-have-the-most-cost-effective-healthcare/) that compares expenditures on health care by nation. It's interesting. The point of the article was to demonstrate how ineffective and expensive American healthcare is. Without a doubt, American health care is ridiculously overpriced. But I would make this observation--life expectancy in most 'advanced nations' is right around 80 years, +/- a year or so, regardless of health care expenditures.

In other words, it doesn't much matter how much a country spends on health care--the average human life expectancy is about 80 years. And I would contend that in instances where the life expectancy is noticeably lower (like Hungary, Portugal, Mexico, the US) the reasons for that lower life expectancy are typically NOT ineffective health care, but poverty and war or, in our case, obesity caused by our sedentary lifestyle (21% of all US health care costs). Higher costs in the US can also be attributed to the ubiquity of elective procedures--aesthetic surgery to satisfy our vanity; after all, bigger eyes, a more shapely nose, bigger boobs and less fat don't come cheap.

And since life expectancy is around 80 years, it's not particularly productive (or economical) to spend endlessly to extend it. Americans tend to waste a lot of health care dollars on the last six months of life--why? Maybe we should learn to let go and give death its place in life.

The truth is that the life expectancy of our species is more a function of death from war, availability of basic immunizations and good hygiene than of access to 'advanced health care.'

Superficial analyses like the one in the linked article are misleading and simplistic. They start with an assumption and trot out the usual simple-minded arguments to justify a major systemic reformation. Tell ya' what: wanna' reform? Eat right, exercise and stop going to the doctor so much.


Just a friendly reminder on lesion destruction/shavings/removal/excision:

Medicare will only cover the removal (17000/17003 and 17110) of seborrheic keratosis if it is inflamed. Medicare will NOT pay for code L82.1 ("Other seborrheic keratosis") and will only pay for L82.0 ("Inflamed seborrheic keratosis"). Furthermore, skin tag removal is only paid for is the skin tag is documented as painful, irritated, bleeding etc.

Here are some guidelines for other common epidermal conditions:
(Taken from LCD Medicare Policy #L33979)


Benign skin lesions are common in the elderly and are frequently removed at the patient's request for cosmetic reasons. Cosmesis is statutorily non-covered and no payment may be made for such removal. Benign skin lesion removals for reasons other than those given above are considered to be cosmetic and will not be covered. These reasons include, but are not limited to, emotional distress, "makeup trapping," and clearly benign lesions lacking any component of functional compromise in any anatomic location.

Medicare will consider the removal of benign skin lesions as medically necessary, and not cosmetic, if one or more of the following conditions (A-E) is present and clearly documented in the medical record.

A. The lesion has one or more of the following characteristics:\

  1. bleeding \

  2. intense itching \

  3. pain

    B. The lesion has physical evidence of inflammation, e.g.; purulence, oozing, edema, erythema, etc.

    C. The lesion obstructs an orifice or significantly and objectively restricts vision.

    D. The clinical diagnosis is uncertain, particularly when malignancy is a realistic consideration based on lesional appearance or change in appearance or non-response to conventional treatment. However, if the diagnosis is uncertain, either biopsy or removal may be more prudent than destruction.

    E. A prior biopsy or other examination suggests or is indicative of malignancy or pre-malignancy.

    F. Coverage of wart removals. Wart removals are covered only if one of the above (A-E) is documented in the medical record under one of the following clinical circumstances.

G. Sebaceous cyst (ICD-10-CM L72.0, L72.2, L72.3 and L72.8) are included in both Lists I and List II. The code is accompanied by an asterisk (*) and an addendum noting parameters of coverage for removal. If the cyst is greater than 2.0 cm in diameter, no secondary diagnosis is required. On the other hand, if the lesion is 2.0 cm or less, List II requirements must be met in order to support coverage and payment.

So that you are aware of our process - we will code appropriately for these procedures and problems and submit the claims as accurately as possible, but we have run into a couple instances when Medicare denied payment. Then, per our protocol, we attempted an appeal by submitting medical records to support the medical necessity of these procedures. However, upon further review of the documentation the lesion/skin tag etc was not documented as being painful or itchy or irritated and we were forced to accept the denial. This has happened twice now and we are hoping to avoid this problem in the future by educating everyone what constitutes as medically necessary with epidermal lesions.

If the patient wants to have a lesion removed because it is unsightly or bothersome (but does not actually cause pain/bleed/itch and you do not feel it is concerning) then we advise you collect an ABN so that the patient will agree to pay for the removal/destruction when Medicare denies based on medical necessity.

If you are interested in the full policy guidelines, below is a link you can copy and paste into your browser.



If elected president, Senator Bernie Sanders proposes to implement a single-payer universal health care system for America. What would that look like? How would we pay for it?

Senator Sanders proposes to pay for universal health care by taxing the ‘middle class’ an additional 2.2%. By Senator Sander’s accounting, this tax would be cheaper than insurance premiums that those with insurance are now paying. Of course, it would be more expensive for those who currently do not have or who do not want insurance. The plan would also generate some of its 14 trillion dollar price tag by imposing a 6.2% payroll tax on businesses. This would probably eliminate a bunch of bottom-tier small businesses that are barely profitable, and it may drive more large corporations overseas (America already has the highest corporate tax rates in the world). The proposed plan would collect significantly higher income taxes from the wealthy, starting with those making over $250,000 / year. The rich would also underwrite the care by paying additional estate taxes and having their income from investments taxed the same as earnings from wages and salaries. The uber-rich ($10M +) would pay a whopping 52% tax on their income.


The expanded Medicare program would provide Americans universal access to health care. Upon implementation, all physicians would become government employees since their remuneration would be derived from the new Single Payer. Presumably insurance companies would find another line of business (loan sharking?). A 2012 study conducted by Fortune found that about four hundred and sixty thousand Americans worked for insurance companies—many of these out-of-work bureaucrats could probably go work for the new incomprehensibly large and complex bureaucracy that would administer American health care. One of its primary tasks would be to employ actuarial processes to determine who gets how much and what kind of healthcare. This rationing process would presumable determine care allocation by calculating cost vs. benefit to society instead of our current process which rations care according to ability to pay. Regardless of the mechanism, rationing will always be necessary because demand is infinite and supply is limited. The universal plan would theoretically provide equal access to everyone, regardless of socioeconomic status.

The good

Senator Sanders’ system would eliminate most of the social biases in our current health care system. Physicians would be much more likely to give all patients the same level of care because they wouldn’t be concerned about a patient’s ability to pay. American citizens would not be held hostage to runaway health care costs that just keep increasing.

Preventive care will almost certainly improve because people won’t consider cost as a reason to procrastinate visits to the doctor. Better preventive care would certainly decrease the downstream costs associated with chronically untreated conditions and attendant comorbidities caused by people’s reticence to spend money—maybe a lot of money—on non-urgent health issues.

Universal health care underwritten by tax dollars would enhance quality of life for the chronically poor. Those living below the poverty line (and even those living in the lower-middle echelons of the income spectrum) often times have no option but to simply do without health care in today’s market. Universal coverage would provide them with services that are now only available only to those who have insurance or who can afford them.

Critically, a single medical disaster wouldn’t spell financial ruin and bankruptcy for the average American. Universal coverage would serve as a basic safety net for all. Today, even those with insurance can face astronomical bills if faced with a serious medical problem.

The scary

The government is able to make Medicare work today because it pays physicians substantially lower reimbursement for services rendered (about 30% lower). The new plan as revealed by Senator Sanders does not specifically address physician reimbursement, but most pundits agree that physicians would likely take it on the chin. According to a 2007 Congressional report, the adjusted wages (purchase power parity) of U.S. physicians soars above their international peers. (http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1316&context=key_workplace). Would cutting income by a third affect the number and quality of doctors in America? Would the best and the brightest still be incented to pay the formidable price of becoming a doctor for a less lucrative career as an employee in health care?

Demand would certainly go up if everyone is guaranteed full access to all the care they need, but supply would not; indeed, considering the above, it may even go down. Wait times (which even now can be lengthy for some procedures) would probably become problematic.

Any attempt to nationalize / socialize institutions that have traditionally operated in a free market environment (which is not to suggest that today’s medical market is all that free to start with), must be forged with a studied abandonment of the traditional valuations that govern the marketplace because superiority warps the implied egalitarianism of socialized services. For example, a physician’s care outcomes, that critical differentiator between the physician and his / her peers, could no longer be part of the equation that determines choice of doctor. Indeed, since patients have no immediate financial stake in health care transactions, why would they choose to visit any but the very best doctor in every circumstance? After all, every citizen would pay proportionately the same tax for health care, so each should be eligible for the same access and quality. If Doctor A’s outcomes are empirically superior to Doctor B’s, who would opt for Doctor B? Or would doctors be assigned to districts and citizens only have permission to visit their assigned work cell’s physician?

Would physicians still be willing to invest in advanced medical equipment if their reimbursement does not cover capital costs? Will the lack of sophisticated gear decrease quality of care? Or would the government purchase authorized equipment and supplies?

Speaking of equipment and supplies, what of existing privately-owned billions of dollars’ worth of equipment? Does the government levee another tax and purchase it? Or simply nationalize it?

Given the notorious inefficiencies and bureaucratic bungling of today’s Medicare program, is the government positioned to administer a much bigger and more complex program in a cost effective and patient-friendly manner? Would it be operated in a physician-friendly manner? Would a monopolistic single-payer system incent innovation and improvement? Would it encourage excellence? Who would look out for the physicians?

For the entrepreneurial, would employee physicians feel the same level of commitment to an endeavor in which they have no ownership? Would there be a shift in attitudes towards patients when they close the doors to their private practice and go to work for a corporation? What sense of personal responsibility would they feel if that corporation were the biggest in America?

What are your thoughts? How should Americans get their health care? Visit our Facebook page and comment. (https://www.facebook.com/CaduRx/?ref=hl)


Affordable Care Act 2016: Outlook

The current trajectory of the Affordable Care Act is not sustainable. As was mentioned in a previous post, one-half of Obamacare’s exchanges have gone out of business. The average 2015 loss for the remaining was $20,000,000 per co-op, and none of them were in the black. It’s just a bad business model (business: you know, profit, loss, balance sheets—all that stuff). Saying that the exchanges are failing because the Republican Congress demand that the Risk Corridors be revenue neutral (because the need was endless) is like saying ISIS terrorists are bad because they have poor dental hygiene.


Of the approximately $ 1.45 billion dollars spent by the federal government to implement state-based exchanges, the GAO can only trace about 1/3 of that money actually being spent on the exchanges. Nobody seems to know where the rest of the money went. Oh, and all those exchanges have either failed or are failing. Of the $4.23 billion dollars spent by the federal government on the administrative and IT infrastructure underpinning Obamacare, well, it failed as soon as it went live and required massive additional expenditures to bring it online. And the infrastructure is still, by all accounts, sketchy.


Now that the website is up and the program is more or less operational, how viable is it? Well, the data has to be evaluated carefully. CMS disingenuously claims that the risk pool is stabilizing because 38% of the enrollees are under age 35. That’s good, right? Well, that’s not the magic number. Since we’re talking about sustainability, we need to know the number of contributing enrollees, not the number of children and infants that were enrolled with their families. The magic demographic is the generally 18 – 35. How many? CMS didn’t give us that data.

But even more significant perhaps than the young 18 – 35 demographic is the healthy people who have not signed up who reside in the 200% of the federal poverty level. So far this group has failed to engage. And the take-up rate for the subsidized population in the 300% to 400% of the federal poverty rate has been horrible. Come tax time, these folks will be hit with penalties from the 16,000 IRS agents assigned to enforce the insurance mandate: maybe that will induce them to buy insurance they can’t afford.

And what about those who do not qualify for any subsidy? Their situation is perhaps the most interesting (interesting like seeing what happens to the human body when dropped in a vat of concentrated sulfuric acid). About one-half of the individual market doesn’t qualify for a subsidy. That demographic is getting slammed with the stratospheric premiums and deductibles that are underwriting the rest of the program. Un-subsidized insurance payments are rapidly becoming the equivalent of another monthly mortgage payment.

The future

A lot hangs on the presidential race of 2016. The Affordable Care Act is here to stay: it has been encoded into law and cemented into place—even a Republican executive and a Republican Congress will be hard-pressed to dismantle it. So its shortcomings either need to be fixed or their impact needs to be neutralized. The fix that a Republican executive attempts would be vastly different from a fix that a Democrat executive would attempt. A mixed Congress will add yet another level of complexity into any attempted fix. But this much is sure: it’s broken and it needs to be fixed.


Meaningful Use is going into its fifth year. Government bureaucrats are bickering over the final rules for MU3 and lawmakers are arguing about the timetable. Staff scrambles to compile reports and data for last-minute 2015 MU2 attestation and we’re all left bemusedly calculating benefits vs. costs

As a health information technology vendor, CaduRx has benefitted from the ONC’s mandate for physicians to adopt electronic medical records. Have the doctors benefitted from Meaningful Use? Have patients?

There are no easy answers: in some ways yes, in others, no. CaduRx believes that in many ways, EMRs have made doctors’ lives easier: no charts to hunt down, web-based access to records, legible notes, active drug-checking for prescriptions, and the ability to manage patient populations have, overall, have helped physicians care for their patients.

But many EMRs are expensive (in terms of cost to purchase / subscribe, cost to train staff, and cost in frustration when they don’t perform as expected). Indeed, many are difficult and time-consuming to use. There’s a reason for that. To stay in business, EMR vendors have to design their products according to complicated ONC specifications in order to be Meaningful Use certified (a very time-consuming and expensive process). CaduRx has chosen to keep its interfaces clean and clutter-free as possible to allow maximum latitude in implementation, which has kept the learning curve gentle and the flexibility optimal. But not all EMR vendors have taken that road, and the result has tended to be complicated, bloated products that are difficult to learn and use.

Although many of the Meaningful Use requirements make some sense and may be pointing the industry in a good direction, they were mostly created by people who don’t see patients every day. Public health wonks, pundits and bureaucrats have designed and forced the Meaningful Use standards into EMR products. A centrally-defined, universally-imposed, one-size-fits-all product born of committee and compromise will never manage to satisfy anyone. Meaningful Use measures may be beneficial to some, meaningless for others. The implementation of these measures by most EMR vendors has been crude and clunky. CaduRx, of course, is an excellent tool in spite of all the interference. Government enforcement is heavy-handed and arrogant. In the long run, Meaningful Use adds up to yet another constraint that stifles innovation for the sake of checking a box instead of caring for the patient (or recording a metric just to report it to Big Brother in order to avoid being penalized).

Even the ONC’s end-user usability requirements for an EMR’s MU certification fail to take into account physician workflow and time constraints. Meeting the usability requirements was really just an exercise in standardized testing for No Child Left Behind—it wasn’t designed to make the EMR easier to use for the physician. But arcane, difficult-to-use systems are familiar territory for caregivers, aren’t they? After all, their payments are adjudicated by bureaucrats who have no knowledge of or interest in patient care. It’s old hat.

The pundits and politicians wonder why the health care system is broken. Delimiting patient encounters to fit canned guidelines and operating within E&M, procedural and diagnostic coding protocols doesn’t produce quality care and can oftentimes impede proper care. Insisting on lockstep adherence to generalized care protocols robs physicians of their ability to act according to their training and to their knowledge of a patient’s unique circumstances and condition. And penalizing physicians for ‘noncompliance’ stifles innovation and treats physicians like naughty schoolchildren who have disobeyed the teacher rather than caring, responsible professionals who have the patient’s best interests at heart.

Likewise, CaduRx would much rather spend its resources on building a tool that is even friendlier, even more efficient and so easy to use as to be seamless to the caregiver’s workflow. We’ve built a good tool in spite of ‘meaningful’ use requirements. We have the intelligence and technology to build an even better tool, but we are constrained by the same sorts of cumbersome regulations and requirements that prevent physicians from optimizing their services.

Wouldn’t it be cool if we had the latitude to create the ultimate tool for physicians and staff? Wouldn’t it be nice if you could practice medicine in a way that aligns with your patient’s unique, individual needs and your personal ideals instead of the generalized top-down guidelines of cookie-cutter medicine?

Could there be another solution? Maybe create a slower, longer, less aggressive implementation schedule? Maybe implement fewer requirements at a time? Perhaps place more emphasis on specialty-specific measures? Allow more flexibility? Trust in the physician’s ability to care for people without incenting and punishing? The power to change lies in the physicians' hands. Ultimately, it’s your industry and it’s your livelihoods and careers. By extension, it’s the health and well-being of America.

If only there were some sort of entity like an association or union that could represent physicians--real physicians--in the implementation of policies designed to improve American health care. If only.


For those of you using our billing services or our billing software, please note that work RVus and the patient’s allowable will now display as you fill out the electronic superbill. To activate this feature, you will need to find your insurance contracts and enter the negotiated conversion factor for each payer. To do this, go to Reports and select Insurance Companies. Select each insurance company and enter the conversion factor on the appropriate line and save changes. CaduRx will then auto-calculate Work RVUs and the allowable for each patient with that insurance at time of service. If you’re using the eligibility checking tool, you will be able to see which patients are still in their deductible and collect the allowable fee at time of service. More to come.


More dark clouds on the exchange horizon

12 of the 23 non-profit exchanges have gone the way of the buffalo. Thursday (19 Nov 2015) UnitedHealth, America’s largest insurer, stated that if it can’t turn a profit (which it almost certainly cannot), it will quit the health plan marketplace. Now we watch and wait.

The fate of Obama’s signature health care law depends on how long the other two big players, Anthem, Inc. and Aetna, are willing to wait before they see a profit. Now that United is gone, the two insurers likely control the fate of the entire health care law. While true that United had a relatively small share of the market, Aetna has already stated that its losing money and Anthem is barely breaking even. United’s shares have dropped about 6%, while Aetna and Anthem fell even more. Investors are concerned as analysts predict that both companies are likely to lose money on the exchanges in 2016. If the situation does not improve in 2016, it is likely that both big payers will pull chocks and head for the hills, in spite of C-suite rhetoric to the contrary.

HHS (Ben Wakana) counters this grim news by pointing out that more people are signing up for health insurance. He didn’t mention the fact that insurers are having difficulties because the administration is paying out claims at less than 13% of what the insurers were told to expect. Evidently, the risk pool is more toxic than President Obama imagined.

But, if things don’t work out for the insurers, they can always be bailed out, right? Way too big to fail.


Utah's Arches Health Plan bites the red dust

Arches website reads, “Unfortunately, today we were asked by the State Department of Insurance to wind down our business due to a shortfall in the federal governments “Risk Corridor” program, and other factors beyond our control.

So what’s a “Risk Corridor” and how did it kill Arches?

When the Affordable Care Act (“Obamacare”) was passed, a number of new restrictions were imposed on insurance companies. As of 2014, insurers had to accept every applicant, regardless of health status or preexisting conditions, and could not charge more for people based on medical history. It was foreseen that many people who had never had insurance before would suddenly sign up, making it extremely difficult to predict how much it would cost to provide medical care. If insurers’ premiums were set too low, they would not have enough money to cover medical expenses and would either be forced out of business or would need to substantially increase premiums the following year to reflect the higher costs. If the premiums were too high, of course, they would lose their competitive advantage.

The new restrictions introduced dozens of unknowable variables into actuaries’ calculations. It was impossible to predict what would happen. So in an effort to protect insurers from high losses in the first few years of the program and to encourage insurers to participate in the exchanges, Obamacare authorized three premium stabilization programs: risk adjustment, reinsurance and risk corridors (three experimental programs of undetermined efficacy designed to mitigate unpredictable repercussions of an unknown and untested solution). The three programs are Risk Adjustment, Reinsurance and Risk Corridors.

Risk adjustment was designed to be a method of paying insurers based on their enrollees predicted medical costs based on risk factors known to be associated with medical claims. The idea is to not penalize insurers that enroll a high number of high-risk people by receiving payment transfers from insurers with relatively low-risk people.

Reinsurance helps to compensate insurers when enrollees experience unexpectedly high medical costs due to a catastrophic illness or accident.

Risk Corridor, the topic that will lead this rambling narrative back to our local insurer, Arches, is a plan whereby the government reduces insurers’ risk by helping offset high losses and sharing in high profits. They are based on how allowable costs compare with a target cost. If an insurer’s ratio of allowable costs relative to the target amount is high (read: their premiums didn’t cover their claims) they will receive a partial reimbursement for those losses. Those whose allowable costs relative to the target amount is low (read: they made too much money) will be charged an amount to offset their profits. The idea was that by eliminating pricing uncertainty with the new program and an unknown, untested population, insurers would be encouraged to participate in the new market.

The issue with risk corridors, though, is that they represented an unlimited taxpayer liability. What if all the payers’ costs were higher than expected? Who is on the hook? We, the People.

Well, in December 2015 the CROmnibus passed (to keep the lame-duck Congress afloat in 2015), and a provision was inserted into that bill that removed the taxpayer liability from the Risk Corridor provision of Premium Stabilization program, which had come to be seen as a bailout for the insurance companies. Many more insurance companies have lost more money than they have made on the exchanges. The new provisions require any adjustments between exchanges to be budget neutral.

The fact that half of the exchanges have gone out of business since Obamacare was enacted provides us with a fascinating window into economics, politics and social perceptions. The success of Obamacare rested on the premise that high-risk, expensive enrollees can be absorbed into the system by removing the disincentives (expense) of caring for them and by tinkering with insurers’ margins and distributions of profit.

Essentially, then, without the Risk Corridor bailout escape hatch, Arches (and other exchanges, as well) simply cannot exist. That is, not without heavy taxpayer subsidization. Arches was founded and run by good people with good ideas, and it provided coverage and care for lots of people. But, like many other aspects of healthcare in the United States, it just couldn’t pay its own way.