The Value-Based Healthcare Equation

Medical travel, almost by definition, increases the Value Based Care equation, which is defined as quality divided by cost or


Value Based Care (VBC) = Quality/Cost


The reason for this is simple. The purpose of medical travel is to receive care at a high quality low cost facility. Assuming patients only travel to accredited facilities, quality should remain somewhat constant among the various institutions while cost will decrease accordingly, thus raising the Value of that treatment or procedure. The key is to only use those facilities accredited by an organization such as the Joint Commission (accredits U.S. hospitals) or the Joint Commission International (accredits international facilities based on U.S. standards).


It used to be that international medical tourism was the best way to save the most amount of money. However, today that’s not necessarily the case. Many hospitals, clinics, surgery centers, etc are reducing their costs (while maintaining their level of quality) to attract patients from all over.


This trend isn’t going away, because as more patients shop for their health care needs, not only will they receive better rates but they’ll also receive better quality as well.  Health care providers are going to be forced to offer better products and services as well as better prices to attract these customers.


In the end, when a true economic marketplace exists for buyers and sellers – or patients and doctors, the system can become efficient for all.


Why are many doctors dropping out of Medicare?

One reason has to do with some of the additional regulatory restrictions under the Affordable Care Act.

One in particular prohibits doctors from referring Medicare patients to hospitals in which they have an ownership in. This provision wasn’t intended to increase transparency as much as it’s designed to prevent the increased usage of ambulatory surgery centers. You see, the problem isn’t with doctor’s ‘double dipping’ or getting paid for both the treatment fee as well as the facility fee. Looking at the auto industry, when you get an estimate from a mechanic to repair your car, auto insurance companies don’t mind if you go to that mechanic’s shop knowing full well that he owns it. The same is true in the health industry; health insurance companies don’t mind doctors referring patients to their own centers. The reason being is that often times the level of service is much more efficient and can be less costly.


It shouldn’t matter which facility is getting paid, as long as the true price is what has been agreed to and the services have been rendered according to accepted quality standards. So why is the government restricting doctors from referring to their own surgery centers – it’s to protect existing hospitals.


You see, for elective treatments, many hospitals don’t operate as efficiently as surgery centers do which is why most doctors and patients prefer using them. Historically, when customers are flocking to emerging competitors who are offering a better, less costly alternative, and the government intervenes to protect the existing troubled businesses, the consumer almost always loses. And in this case it will be the seniors who may need the care the most, who will ultimately lose.


Instead of determining where patients can and cannot be treated, Medicare reform should be focused on better patient care, better cost alternatives, and better incentives for physicians to accept these patients.

The way Medicare & Medicaid is being run is completely inefficient


These programs are supposed to provide care to those in need, however finding a doctor willing to participate is becoming extremely difficult.  If you’re a doctor and you see a Medicare patient, you will make almost 20% less than if you saw a patient with private payments. And if you were to see a Medicaid patient it gets even worse as your payments would drop to about 45% less. Unfortunately, many physicians can’t afford to treat Medicare & Medicaid patients, and when they drop out of the program, these patients will be even worse off.


Look at Texas where 172 doctors dropped out of Medicare last year bringing it to a total of 450 doctors leaving the system since 2008. In fact, of those physicians who still accept Medicare, 34% have either limited the number of Medicare patients they’re willing to see or simply aren’t accepting any new ones.


Unfortunately, other states are seeing similar trends and this is only going to get worse. According to a survey by the Opinion Research Corporation, 67% of primary care doctors said under current conditions new Medicaid enrollees will have trouble finding a primary care physician. This will become even more unfortunate as 18 million people are added into Medicaid under the Affordable Care Act.


We need a system that will help those in need get the care they require.

Administration Delaying Some Rules For Appealing Health Insurance Denials

The Obama Administration has put some delays on the enforcement of some new rules designed to protect patients who appeal insurers’ decisions to deny or reduce health care benefits until next January.
Some of the rules already on hold:

-A reduction in the amount of time an insurance company is allowed to review a denial of coverage in urgent cases, from no more than 72 hours to 24 hours.

–A requirement that insurers provide information about the denial and how to appeal in appropriate language for non-English speaking beneficiaries.

–A requirement that insurers must provide consumers with specific details, which would include diagnostic codes used by doctors, hospitals and insurers, about what treatment isn’t covered and why.

Read the full article for more information at

March Healthcare Reform Webinar Available for Viewing!

If you missed our webinar Healthcare Reform 2011: The good, the bad and the ugly (Part 2) don’t worry! You can now view the webinar on our Youtube channel “Goldi’s Guide to Healthcare.”

Be sure and stay tuned for information on our April webinar!

Medicare Patients Finding it Difficult to Find a Doctor

If you’re a Medicare patient, it’s getting much harder to find a doctor willing to see you as 1 out of 5 doctors and 1/3 of all primary care physicians are limiting the number of Medicare patients they’re willing to see. Which explains why about 25% of Medicare patients complain that they’re having trouble finding a doctor who will see them. The timing for this couldn’t be worse as this year marks the year when the first of 75 million baby boomers turn 65 and begin joining Medicare. This generation has more health problems than the other generations of the past.

Another problem is that there continues to be less and less qualified Geriatricians and primary care doctors, as a result, there’s a chance that there won’t be enough people properly trained to take care of an entire aging population. One of the main reasons is that doctors in these specialties don’t make nearly the same amount of money as doctors in others. Unfortunately, many people graduating from medical school are choosing to go into other areas in medicine as a result. This is really going to become problematic, as the American Geriatrics Society found, there are now 7,000 board-certified Geriatricians in the U.S. – about 1 for every 2,700 Americans aged 75 and older. However, by 2030, this ratio will drop in half to 1 Geriatrician for every 5,500 seniors. If nothing changes, Medicare will become insolvent by 2030.

The Medicare Donut Hole

*The ACA will close the Donut Hole by 2020

*Those who hit the donut hole in 2010 will receive a $250 rebate check from the government

*Anyone who hits the donut hole this year will receive a 50% discount on brand-name drugs bought in the donut hole