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Wednesday, October 9, 2013

Wednesday, October 9, 2013

Health Care Troubles and a Simple Solution

UPDATED BELOW
In the spring of 2011, my partner Avery, a semi-pro cook, was working in the kitchen of our house in Santa Barbara when she cut straight through an artichoke and into her hand, severing tendons and sending blood everywhere. I was still working in France, so she called 911 and the fire department came. They took a look and called an ambulance, which drove her from the house on the Eastside to Cottage Hospital, an 11-minute drive of 3.3 miles in length, for which she was later billed $1900.

At the hospital, the first question was, “Do you have insurance? The second question was, “what kind of insurance do you have?” Avery had Anthem PPO and presented the card with the hand that wasn't oozing blood. She was waved through to immediate treatment, and one night, one surgery, and many doctor and hand therapy visits later she was on the mend. The care was good and the out of pocket cost ended up being about $2000, for some reason under the $3000 annual (in-network) cap including $410 as her share of 11 minutes in the ambulance.

That is a very happy ending under American health care. Will this be possible under the new health insurance regime, as UC’s Office of the President replaces Anthem with UC Care?

The switch is causing an uproar at UC Santa Barbara, and major concern at several other UC campuses. The UCSB problem is that it won’t have the Tier 1 benefits that other campuses get, and some subset of employees will pay more out of pocket than their colleagues at other campuses.

At a well-attended town hall on campus last week (partial audio here), there was plenty of concern about interrupted health care, reduced care, costs getting shifted onto employees—and also an undertone of worry that as a perennial “younger campus” UCSB was being relegated to second-tier status. “The breaking up of the UC system continues,” one person suggested to me in an email. There’s also the steady erosion of “total compensation” for UC employees. Salaries have been below the comparison average for years. Recently, pension and benefits are going to the same place. One effect of UCOP’s recent financial strategy has been the end of UC’s comparative advantage for employees.

But first, the answer to the care question is yes it will be the same—if you’re willing to pay more. Under Anthem, when you cut your hand open, and regardless of your doctor’s status in Anthem’s network you paid 20% of ER costs, 20% of emergency transportation, and 40% of surgical and other fees—if performed by a non-network doctor. But once one’s insurance was identified, an in-network surgeon seems to have been procured, and hence the semi-manageable out-of-pocket costs described above.

UC Care will be different: an outline is here. There is more detail here (now Scribd here), where it’s easier to compare its 3 tiers. (October 9th replacement of that link is here.) If you are my blog partner, UCLA professor Michael Meranze, and you cut your hand open in your kitchen in Santa Monica, an ambulance takes you to UCLA Medical Center, you pay $100 for ER costs, 20% of physician costs, and $100 for the outpatient surgery. That is Tier 1 UC Care, and it is available at all UC Medical Centers and other designated hospitals. Cottage in Santa Barbara is not one of these.

So if next year I cut my hand open in my kitchen in Santa Barbara, I will pay 20% of the full cost of all of the above. That is under Tier 2 of UC Care, which is Blue Shield’s Preferred network. UC Vice President for Human Resources Dwaine Duckett assured employees at the UCSB town hall that Cottage and Samsum Clinic would both be available for UC Care Tier 2 patients. And they are still available to HealthNet patients as well under HMO referral conditions.

But why would Cottage look at my UC Care card and treat me as Tier 2? I don’t know for sure, but I assume that they would want to know if my regular doctor is actually part of the Blue Shield network. And the answer to this question would be no. In that case, I will be treated as a non-network person attached to “non-preferred providers,” in other words, as a patient from Tier 3. Then I will be paying 50% of all costs (except ambulance and ER at 20%) up to an annual cap of $5000 (for individuals, or $15,000 for families).

There’s also reason to think my case is typical rather than anomalous. First of all, people want to keep their doctors, and the right to do this has become a national political issue in the Age of Obamacare. The UCSB town hall heard harrowing testimony—one faculty member reported that two of his wife’s three surgeries for brain cancer would happen at Cottage, and then the third, which fell after January 1, was supposed to be with another surgeon at a different hospital 50 miles from where they lived? It’s not clear whether there are continuity provisions.

And second, Tier 2 consists of the Blue Shield Preferred network, which has to have doctors in it for you to see if you want to belong to Tier 2. I assume that being Tier 2 at Cottage would require that your doctor be Blue Shield and have admitting privileges. There are parts of California that have great Blue Shield networks. For example, a search for Blue Shield network providers in any specialty within 15 miles of 94301, Palo Alto’s zip code, yields 983 doctors. The same search for Blue Shield’s Santa Barbara network (any specialty within 15 miles of zip codes 93101 or 93110) yields 20 doctors. And 8 of them are pathologists.

The UCSB UC Care situation seems to be this. UC Care has a lower monthly premium than Anthem did, but higher copays and caps for the non-network people who are the ones mostly likely to seek a PPO in the first place. Then, at UCSB there is no Tier 1, so the low-cost high quality option is not available at all in the area. UCSB does have Tier 2 access to the local hospital, but Tier 2 Santa Barbara—the Blue Shield preferred network-- barely exists. Tier 2 may wind up being Tier 3 for most SB UC Care people for most conditions, unless they can gear up for a 40-100 mile ambulance ride. The cross-campus inequities are obvious: what most campuses can get for $20 copays (or $100 per outpatient surgery) will push UCSB employees up towards their $5000 / $15000 annual caps.

How did Santa Barbara fall through the PPO cracks (along with, at least initially, Berkeley, Merced, and Santa Cruz)? UC Care was based on a UC med center tie in--Mr. Duckett said the medical centers came to UCOP wanting to bid for the UC employee health business—which put the non-medical campus at a disadvantage.

He also said that in the Santa Barbara case there wasn’t a failed negotiation between UC and Cottage, but between Cottage and Blue Shield. Blue Shield made bids, and Cottage “made the decision that we don’t feel as though we should be offering these types of discounts.” Cottage does have a health care monopoly in town, and seems to be holding out for more money—even if it risks losing much of Santa Barbara County’s biggest payroll to providers outside the area.

Mr. Duckett said his office would continue to lean on Cottage and Blue Shield, and that in the meantime UCSB folks should write letters to “anyone who will listen.” This strikes me as shifting responsibility onto people who didn’t create the problem and who have no power to fix it. UCOP is putting together an insurance network, and it needs to function normally across all the cities where its employees live. UCOP obviously needs to finish putting its network together.

In the meantime, there’s a simple way to restore cross-campus equity. UCOP could reimburse all UCSB UC Care patients for the difference between (a) what they are paying for the tier they are forced to use (Tier 2 at best, mostly likely Tier 3), and (b) what they would be paying if they had a local version of Tier 1.

For example, if the hand wound needs $55,000 of reconstructive surgery, the would-be Tier 1 patient would pay $1500 to UC Care, and UC would pay $3500 to UC Care to make up the $5000 of the UC Care charge to the patient, who at UCSB has to be in Tier 3. UC would make a similar payment to match the difference between a $100 outpatient surgery and the 50% of $55,000 which a UC Care Tier 3 patient would be obliged to pay.

This may seem at first like a subsidy to UCSB employees that other campuses don’t get. But in reality medical campus employees are already getting an equivalent to this subsidy from the university. And this arrangement would be temporary, while UCOP restores cross-campus equity.

On the other hand, if UCOP does no more than encourage Cottage and Blue Shield to settle, it puts UCSB at a recruitment and retention disadvantage in relation to other UC campuses, which weakens a UC system that is already struggling to keep up with its peers in other places.

UPDATE: Michael has found a 7 page list of UC Care TIer 2 providers (Blue Shield's Preferred network) in Santa Barbara, which I've posted here.  So please take my gloom about Tier 2 with a grain of salt. The UCOP patch would apply to a solid Tier 2 as well as to Tier 3.

12 comments:

gasstationwithoutpumps said...

Your link to http://uc-care.org/wp-content/uploads/UC_Care_2014_MedicalPlan_092713.pdf gives me a 404 page-not-found error.

They've changed the link to a 10-day-newer one:
http://uc-care.org/wp-content/uploads/UC_Care_2014_MedicalPlan_100713.pdf

gasstationwithoutpumps said...

Your link for "Berkeley, Merced, and Santa Cruz" is a null link.

Ellen McCracken said...

Hi Chris,
Thanks for your post on our health care crisis. I would state things a bit stronger: it appears that UCSB faculty and staff are experiencing a class-actionable discrimination situation in which we as a class are being denied health benefits that ALL other UC faculty and staff have. We cannot be expected to drive 40 miles when sick to see a Tier 1 primary care, and we have a right to the Tier 1 service everyone else has.

Additionally, the change affects faculty's ability to conduct research out-of-area, or face huge financial losses should we get sick when away. If we can't continue our research and attend conferences, our paychecks will be affected--merits and promotions. I am away doing research right now but won't be able to continue the project if I don't have adequate medical coverage.

I heard the first part of the podcast with Duckett before we were cut off, but he seemed only to tout the supposed advantages of the changes. When I looked on the benefits website, I saw that the proposed changes in the Anthem fees were way less than what we'd be expected to pay now--50% and up to $5,000 a person if we happen to be away doing our work.

Duckett insisted that financial savings were not the primary concern ("cost control" in his words), rather good medical benefits ("value and effectiveness for employee retention"). So I suggested in the email below that they consider paying extra to Cottage and Sansum this year to prevent UCSB employees from being discriminated against, similar to what you suggest in the blog.
He didn't even have the courtesy to answer my email. Unacceptable! Our Chancellor must not allow this to happen and take care of all the employees he serves on this campus.

I hope UCSB won't take this lying down.




From: Ellen McCracken
Subject: UCSB health benefit concern
Date: October 3, 2013 11:57:20 AM PDT
To: Dwaine.Duckett@ucop.edu

Hello,
I am listening to the podcast of your talk at UCSB. The loss of a plan for out-of-network service for which we don't have to pay 50% (up to $5,000 deductible as it appears) has a huge impact on faculty who need to do research and attend conferences away from home. Should any medical event happen in the course of this work, we suffer huge financial losses. Would you please address this. I'm at my wits end worrying about how I will continue to do my work with the loss of this benefit.
Also, you say that financial savings are not the primary concern. Couldn't UC then pay Sansum and Cottage higher fees for the next calendar year so that a huge class of UC employees don't suffer? Instead, it looks as if you're trying to smoke them out at our expense.

Thanks,


Ellen McCracken, Professor
Department of Spanish and Portuguese
University of California
Santa Barbara, Ca 93106-415

Michael Meranze said...

Chris,

I am really struck by Dwayne Duckett's comment that this change was instigated by the Medical Centers. If that is the case it is an instance where UCOP has chosen to sacrifice the interests of the majority of employees in order to help support the Medical Centers.

This case is clearest concerning a campus like UCSB. At least in the short run you are losing an effective medical plan and being offered what is, in practical terms, a clearly inferior plan (Anthem vs UCcare). But it may be the case as well for many employees at the Medical Center Campuses. After all, there is no assurance that the Medical Center groups will be able to accommodate all the new people who had Anthem but were not already using the Medical Centers. A lot of medical center medical groups are already full.

I recognize that from UCOP's vantage point there may be some logic to keeping some of the costs of medical insurance within house. But not when it means sacrificing access and cost for large numbers of employees for that purpose.

At the very least there needs to be some sort of stopgap solution for those at campuses at yours.

But we also need a much more open discussion of the larger relation between the medical centers and the campuses, the impact of the ACA on the medical centers, etc. It is not likely the Medical Centers will take their added revenue and distribute it for the common good after all.

Chris Newfield said...

links fixed -- UCOP is changing the healthcare website daily. I scribd a document I referred to that was taken down last night.

Michael could you post the link to the Tier 2 providers I Scribd?

thanks for the comments. CHE is doing a story on this, probably running tomorrow, that is likely to require further comment from us and involvement from the campus.

Michael Meranze said...

Chris,

I can't recreate the link because it shows up as a simple redirect page if you try to reproduce it.

But what I did to try to find things out was to go through the uccare website, click on providers, and then make the program the blue shield rather than the uccare select (or whatever it is called). I made the radius 10 miles (5 miles is the default) but people at UCSB would be able to do this more intelligently than I did. If you check facilities rather than doctors then you will get some different numbers.

Once you are in doctors you can look for more precise numbers with specialties etc. Given that I don't know the previous situation on your campus I don't know how much worse this is.

gasstationwithoutpumps said...

At UCSC, almost everyone who was in an HMO (the cancelled HealthNet policy) now has to move to a PPO (UC Care), since those were the only plans for the most popular medical provider (Palo Alto Medical Foundation). I understand that UCSC has the most faculty and staff having to change plans of any of the campuses.

I've yet to see a side-by-side comparison of what we had (HealthNet HMO) versus what we're now forced to take (UC Care).

I understand that it was only by forceful negotiations by the UCSC administrators that UCOP finally negotiated with PAMF to be included in UC Care.

Anonymous said...

Chris & Michael--

The link to the UC side by side comparison of the three tiers is interesting. Contrary to what was mentioned at the meeting and reported in the SB Independent, the out of pocket costs for Tier II are $3000 for an individual or $9000 for a family, which is TWICE what it costs for tier 1 out of pocket.

In my pay band, I will save exactly $10/mo or $120 per year on my monthly premiums, but I can expect to pay $4500 more per year in out of pocket costs, since my family of five is very likely to max out our costs, and since we will only have the option of paying 20%, not a fixed copay for treatment. So this is a $4500 per year pay cut for those of us without access to Tier I .

No one in my family is going to drive 45 minutes each way to Ventura to see a doctor when the excellent doctor I've worked with for 16 years in 4 miles away (maybe UCOP wants to send me a gas card?).

UC needs to find a way to cover our added costs, OR add sufficient Tier 1 providers in Santa Barbara to address the needs of faculty and staff. It is completely fair for UC to pay more to workers in compensation for the particular disadvantage of Santa Barbara faculty and staff, until they figure out how to make the options fair and open to all. Mr. Duckett rejected that idea out of hand, but the inequity of that position should be apparent to all.

Ann Marie Plane (History, UCSB)

Chris Newfield said...

GSWP: UCSC has no HMO now? If you could point us to links about the Santa Cruz campus i'd be grateful.
Ann- very nice summary of the high cost in the relatively good case in which one is in Tier 2. could you check the blue shield site to see if your current doctor is indeed in it? My methodology (either looking for doctor by specialty or listing no specialty) generated a much smaller network than Michael's methodology of searching by medical group. I think we both used the UC Care link to https://www.blueshieldca.com/fap/app/search.html?WT.mc_id=otc-cal-uccareppo-1860

Chris Newfield said...

The Chronicle story is now posted at http://chronicle.com/article/Changes-in-U-of-Californias/142223/?cid=at&utm_source=at&utm_medium=en I comment on it at http://utotherescue.blogspot.co.uk/2013/10/the-plot-thickens-on-uc-care-in-santa.html

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