Life Expectancy in the U.S Has Peaked 

By George W. Chapman

Our average life expectancy increased almost nine years from 70 years in 1959 to 78.9 years in 2010. Then it leveled off and started to trend downwards from 2014 through 2018. It’s expected to be 78.9 this year, just as it was nine years ago 2010. Those of us between 25 and 64 incurred the largest increase (6%) in mortality, according to a study in the Journal of the American Medical Association. The leveling off of our life expectancy over the past decade has been due primarily to drug over doses, suicide and obesity. Other high -income, developed countries that spend far less on care than we do on healthcare, have not experienced our leveling off or peaking. Fatal drug overdoses increased 386% between 1999 and 2017. Deaths due to obesity increased 114% and deaths due to hypertension increased 79% over the same years. The majority of us are obese and 80% of adults do not meet basic physical activity guidelines. Researchers conclude life expectancy is not only impacted by medical conditions. Social drivers like income inequality and mental distress are in play as well. (Editor’s note: See related story in this issue).

Fraud recoveries up

Government agencies (Office of Inspector General and Department of Justice) have recovered nearly $6 billion in fraudulent provider claims this year compared to about $3 billion in 2018. Recoveries were across the healthcare gamut including a $43 million settlement regarding genetic testing fraud and a $700 million settlement from a drug company over the fraudulent marketing of the opioid addiction drug Suboxone. Both the OIG and DOJ expect recoveries to decrease as providers realize that the government has gotten serious about investigating healthcare fraud and abuse and has dedicated more resources to such.

Surprise billing

Congress has been addressing this issue recently. Consumers are often unaware that particular providers, usually related to a hospital admission or ER visit, do not participate in their insurance plan, although the hospital does. This results in a “surprise bill” from out of network providers for the balance due after payment from the insurance company. Most insurance companies will pay out-of-network providers a reasonably fair amount. Not surprisingly, the top specialties for out of network claims or “surprise bills” are typically related to a hospital stay or ER visit: emergency medicine, pathology, anesthesiology, radiology, surgery. Surprise billing typically occurs under two scenarios: local private providers simply do not elect to participate in your insurance plan or the providers are employed by an out of area national or regional company that doesn’t participate. Surprise billing occurs more frequently with rural hospitals that often resort, out of necessity, to contracting with out of town physician placement firms.

Cost of care in 2020

A survey of 296 insurers in 79 countries reveals employer-sponsored insurance costs will rise an average of 7% globally. Forty percent of the respondents believe rates will increase by more than 7% for at least three years after 2020. Twenty-seven percent believe mental health conditions will break into the top three conditions driving up costs over the next five years. The top three conditions driving costs historically have been cardiovascular, cancer and musculoskeletel. Sixty-seven percent of the respondents also believe costs are driven by inappropriate or unnecessary care.

Physician shortage addressed

Congress controls the number of residents in hospital residency programs. In turn, Medicare reimburses hospitals for costs associated with their residency programs. Despite the anticipated physician shortage, there has been virtually no increase in the number of approved residency slots since the 90s. There are two bills addressing the MD shortage. The Resident Physician Shortage Reduction Act would add and pay for 15,000 additional residency slots over five years starting in 2021. The Opioid Workforce Act would add another 1,000 residency slots, over five years, specifically for addiction medicine, psychiatry and pain management.

Hospital price transparency rule

(WARNING: Reading the following could cause severe confusion, helplessness and an urge to move to Canada.)

In a well-intentioned effort to help consumers make informed decisions and to create real price competition among hospitals, Medicare has given hospitals until 2021 to post their “standard charges” which include: gross charges, discounted cash prices, payer-specific negotiated rates, de-identified  minimum negotiated charges and de-identified maximum negotiated charges. Hospitals are also required to post their charges and payer specific negotiated rates for 300 “shoppable services.” (Did you get all that?) Besides fueling consumer confusion and suspicion about healthcare costs, this rule will be a nightmare for hospitals to comply. Shopping prices in healthcare sounds good, but it will be a wasted effort if your physician does not have admitting privileges at your selected hospital or your health plan considers your selected hospital out of network. Also, prices do not reflect outcome. Since most hospital admissions are elective, your physician, for a lot of reasons that have nothing to do with price, will have strong preferences for a particular hospital for your particular procedure. I suspect this well-intentioned rule will push us even faster to a single payer system like the one in Canada.

Speaking of Canada

Despite having to wait months to see certain specialists, and the consequential $2 billion lost in annual wages, Canadians are fiercely defensive when it comes to their healthcare. The outcome statistics that ultimately matter the most are: Canadian life expectancy is 82 vs. 79 in the US; their death rate from treatable causes is 59 per 100,000 versus our 88; their infant mortality rate is 4.5 per 1,000 births versus 5.8 for the US. Rural hospitals and physicians fare better in Canada vs. the US because everyone that presents for treatment is a paying customer.

2020 Medicare Premiums

The standard Part B (physician) monthly premium is $144.60, up about $9 from 2019. The annual deductible is $198. Most seniors will have the Part B premium automatically deducted from their social security checks. The Standard Part A (hospital) monthly premium is $0 because this was paid by you through payroll taxes. If you are hospitalized, your deductible is $1,408. There are daily copays after 60 days.

George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at gwc@gwchapmanconsulting.com.

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