583: End Medical Debt, Robert Goff

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It's my pleasure to welcome Robert Gough. He is the author of a few books, including End Medical Debt. This is obviously a huge problem in our society and so we're going to talk about it today, what it means for healthcare, the future of healthcare, and what you might be able to do about it if you have experienced or are experiencing a medical debt crisis. Robert, welcome. How are you?

Quite well, Jason. Thank you so much for having me.

Good to have you on. So how big is this problem so national there?

It's estimated there's a trillion dollars worth of consumer medical debt out there.

Okay, so that's just slightly smaller than the student loan scam, which is about a trillion four now I believe. So that's a big deal when you're looking at a country with a GDP of around 20 trillion, give or take. Medical debt is a huge, huge part of this, right?

It's a huge part of it. But probably most concerning to people is the lack of awareness that Americans, unless they are extremely poor and covered by Medicaid or extremely rich, are really one accident or one illness away from potential financial ruin because of medical debt.

Is that true if they have insurance though?

Yes, absolutely.

No. Tell us about that. Most people have insurance and they're thinking, well, I have insurance, I don't have to worry about this.

And they don't. And they don't read the policy and they don't see the limitations. But there are several things that occur. One of them is that we have moved back into high deductibles. Additionally, many policies have coinsurance and other limitations in terms of how you use the health care system. So you see several things occurring. First, deductibles. If you look at the Obamacare programs that were put up, most people don't realize that those plans all are based upon one, a deductible that deductible for many people is not affordable. And secondly, they are not 100% coverage after that deductible. The most common one, the silver plan, is really built around only 80% of your health care needs being covered, insured, and protected for those. So if you're. And if you look at it, the U.S. treasury has said that 40 cents, 47% of Americans could not come up with $400 in an emergency. Yet the vast majority of people in this country now have deductibles between 1,000 and $2,000. So the deductible alone creates a financial hardship. On top of that, you have these limitations where there is coinsurance of running to 20, 30%, where, like Medicare without the wraparound policy, the patient's liable then for 20 to 30% of the bill.

So explain coinsurance.

So coinsurance says I, the insurance company will cover, let's say, 80% of the cost. You, the patient, are responsible for 20%. That's the way Medicare is built. Medicare is not 100% coverage for people who are over 65.

Right, but isn't the coinsurance only up to a certain deductible limit?

No, because what you have is you have the deductible, which is a front end loaded, and then there is the coinsurance. And then the question is whether or not there's a stop loss. Many of these plans, most of these plans don't have stop losses where the person can literally have significant exposure.

Okay, so tell us about some of the weasel. So that's the coinsurance, there's the deductible. The deductible doesn't, you know, scare me too terribly much. I mean, if your deductible is $5,000 or whatever, so you know, you're out $5,000.

Right.

The coinsurance could be expensive.

The coinsurance. And the other part, which is extremely scary, is the, shall we say, structural deficiencies in coverage. So you've bought a policy that says, we'll cover you if. And the if is only if you use certain contracted providers. So an individual says, I have to go in for surgery. I made sure my hospital was par with my network. I made sure my surgeon was par with the network. Did you ask then about the assistant surgeon? Did you ask about the anesthesiologist? Did you ask about the radiologist or the pathologist?

When my mom had surgery a few years ago, she said when they wheeled her into that operating room, she couldn't believe how many people were in there. There were probably 20 people in that operating room. I mean, it's not your responsibility as the patient to understand all that. Aren't you contracting with the hospital?

Well, no. So one of the odd things that we have in this country is the physicians are separately contracted from the hospitals do not get a global rate. You know, in any other business you would say, I'm contracting with you to do a job and it's full and complete. And if you have to use subcontractors to build that addition on my house, that's fine. But you general contractor, I'm paying you, you take it.

And so the way that works in contracting, because I know all about real estate, is you get what's called a lien release from all those subcontractors to protect you from them coming back and filing a mechanics lien on your property. Now this can get murky, of course. Like everything, everything's so complicated anymore, it's unbelievable. But go ahead.

But in a hospital situation, no, there is no obligation for the physician to participate in the same insurance plans as the hospital. And what at times makes things worse and actually does make it worse, is hospitals give exclusive contracts to anesthesiology groups, radiology groups, pathology groups, but they don't have to participate with your insurance, so you have no choice but to use them. And generally you don't know this going in. And then all of a sudden you find out when the bills come in, your insurance says, well, gee, you're out of network coverage is limited, or there is no out of network coverage. And then you end up with a battle. Whose responsibility was it? Where is the obligation of the patient? Where is the obligation of the hospital? Where's the obligation of the physicians involved? We've seen situations such as a hospital that has a small group of four surgeons. The surgeons intentionally participate in different insurances. When they get a phone call from the hospital's ER that says we need a surgeon to show up, they send the one who is not par with that patient's insurance because it allows the physician to bill whatever they want. Now because in New York State and many other states, if you go through the emergency room, the insurance must cover you for the full thing.

Yeah, that's the emergency room right now, outside of that.

Right. So when you look at it, when is the person most vulnerable in the emergency? The regulations in New York and other states say, well, gee, you can't hold the patient liable. So the providers in this case cut a little deal among themselves for enrichment. You had a case in Long island where a neurosurgeon was par with Aetna, but he always brought in a friend of his who was an out of network provider. The bills for the assistant surgeon were five times more than the participating surgeon. And the word was behind the scenes they were kind of sharing the dollars. Those kind of exploitations put the patient at risk and put the healthcare system at risk. It's an exploitation that's inappropriate. You have another point that. There's another point I just want to make in terms of when it comes to exposure because people, when you said it, you have $5,000 deductible. So what? Well, in New Hampshire there was a report that came out of Dartmouth that said the freestanding laboratory CBC, basic blood test ran $15. The hospitalized lab work ran $150. Now if your physician is in independent private practice, they have a tendency to use private clinical labs. $15 if they are employed by the hospital, shall we say there's a tendency to use the hospital lab.

$150 conveniently.

Now you just you with your $5,000 deductible, which yes, you can afford, you're writing the check for the $150 now, increase of health care costs, absolutely no change in clinical outcome.

So what do we do?

There are a variety of things for on an individual level, the first thing you have to do is understand what your health plan actually covers. What is your deductible?

How many pages do we have to read and try and understand to figure that out?

Well, so in theory, and most policies do have a summary page upfront that is pretty clean and clear that says this is what your deductible is, this is what your coinsurance is, this is what the network limitations are. Take a look at it and then start off with understanding that deductible. And if you need to pre fund it, put the money aside, make sure you know it. If you can't afford, write the check for $2,000, $5,000, great. But if you can't just write a check of that side, well, not bad idea to put some money aside.

Do you recommend medical savings accounts?

I like medical savings accounts because it allows you to pre fund that deductible, that exposure. Plus they're transferable, they grow tax free. And people that I know who've had them for years have now changed jobs. It converts into the ability to take it out in retirement. So I do happen to like them, but they're not available to everyone and you then still have to fund them.

Okay, so save money for your deductible.

Secondly, if you are going to have care, make sure to the best of your ability that you stay within the network. Yes, it does mean asking questions, especially if you're entering into a facility of any kind. We've seen gastroenterologists who say, oh, we'll do your colonoscopy, we'll use my ambulatory center. That ambulatory center may or not be powered with your insurance. You need to check those out. Should you have to? No, in my mind. Must you to protect yourself? Yes. If you're going to have any kind of concern about the cost, be upfront with your physician. Physicians know and will work with patients in terms of trying to keep the cost down. So as I said, the physician who may be an employee of a hospital that says, gee, use the CAT scanner at the hospital when you say, well, gee, doctor, you know, I'm concerned about the cost, knows full well where they can get a CAT scan on a private provider that's less costly. You work with them in that regard.

I mean, this is just absurd that people should have to do this when they're sick.

I agree.

You know, I mean, life is hard enough. It's just unbelievable. You know, if you had your way, what would be the overall solution to just end all these problems forever? Would you say government, health care, single payer, or would you say some other system, let insurance companies sell across state lines to make the market more competitive? I mean, look, you know, and you, I'll just give you a little more meat to answer the question, okay? And then we've got to wrap it up. But part of the problem here definitely is that the patient is detached from the payment. I mean, when I go to the doctor because I have insurance, if the doctor says, well, this, that I'm like, yeah, just run every test, I don't care, I'm not paying for it. You know, but if I go to get my dog care at the vet, I'm paying for it, so I'm paying attention. I'm a better consumer. Now granted, you might make a bad decision trying to cut corners and save money. That's a scary part of it. But consumers need to be engaged in the process. But not in the way that you're talking about. The way you're talking about is like they're just literally defending themselves from their insurance company.

Well, they should not have to defend themselves in the system. Unfortunately. I hate to say it, they do. In a perfect world, that wouldn't be necessary. In the short term, the best we can do is demand transparency so that when it comes to asking the question, it should be, what's the price? What's it going to cost me? Most insurance companies now have online calculators where you can go in and say, my physician has recommended a colonoscopy. What's it going to cost me? Given all the limitations?

And I gotta say, Robert, love him or hate him, but Trump's bill or executive order or whatever he did a couple of months ago.

Transparency. Yes.

Yeah, that is absolutely gotta happen. It's just sick that hasn't happened already. So notice Trump on that one.

Yeah, on that one, Absolutely, positively. By the way, he also did a very nice job regarding end stage renal disease and changes in terms of that program for which he's not getting the credit he deserves.

The media that hates him will never give him any credit.

You know, we, because health end stage renal disease is a good example of what's gone wrong. Dialysis. In this country, 88% of the people are being treated in ambulatory settings. Very costly. Yet in most countries or advanced countries, you're talking about 80% of them being either transplanted or in home dialysis. Much less costly, better quality. But in terms of your question, in the short term, transparency is a must. Asking questions is a must as well. In a long term, we have to break the oligarchy and the monopoly of the health care systems and these institutions that are buying up every component of the healthcare delivery system. And what happens in an institutional setting. Medicare is a fixed revenue stream. They really don't have the ability to increase their revenue with that Medicaid. They lose money on.

Well, they do all kinds of Medicare for fraud.

Well, that's fraud. But even legally, even legally, you can't survive on Medicaid rates. It's, you know, states have tried to balance their budget on the back of Medicaid providers. So the institution says, look it, if I'm the big dog in town, I'm the oligarchy, I'm the monopoly. I'm going to get it by demanding higher reimbursement rates from the commercial payers. And if I employ the physicians, I'm going to demand more higher rates for them too. That translates into higher rates. What I would like in a more perfect world, if you will, is for the health care reimbursement structure to reward a providing system that is not dominated by the most costly element of the system. If money comes into the health care system and the big dog is the institution, then everything is going to fund the institution and the institutional interests. Preventative care is not going to be pursued. Routine care is not high on their agenda. Public health issues are not on an institution's agenda. The institution's agenda is to capture as much of revenue as possible. As a result, the things that could reduce costs, improve access, primary care, preventative care, routine care, care of chronic ill is really underfunded and it's not going to be funded as long as the bulk of the dollars can be consumed by the institution.

So what do we do? What's the solution then? So not let them buy up the supply chain.

So yep, in the short term it's to take them, take and put them on. In my mind, a fixed budget that would limit, basically stop their ability from continuing to capture, monopolize and to put the control of the system into organizations, whether you call them, you know, networks of some kind that have a focus of avoiding costly care. Let me give you the example. If we were in manufacturing, we would look at what goes wrong in the process that makes the piece more costly to make. We should be doing the same thing in healthcare. We should look at care and say what's the most costly component? Hospitalization. Where could we have intervened prior to hospitalization to avoid it to begin with and put the efforts there? If that means doing something about prenatal care in poor communities, let's do that. So we don't spend hundreds of thousands, millions of dollars in high risk neonates. Now it doesn't make sense not to address the causes.

Yeah, so addressing causes rather than band aids, everyone would agree with that. But the problem is you can always kick that can down the road road and there's, you know, that's, that's what happens in so many parts of society. Unfortunately then in the short, then in.

The short term we have to basically do something about the oligarchies and the continued consolidation of power and control that is going into the most expensive component of healthcare delivery.

Robert, give out your website and tell people where they can learn more. Your book is available with great reviews by the way, in all the usual places.

So I appreciate that very much. The book really was written, as was the earlier one, to Support our charity, RIP Medical Debt. Www.ripmedicaldebt.org. what we do and what we look to do is hospitals take their uncollected debt. They sell it for pennies on the dollar to collection companies who try to collect the whole dollar. We buy that debt as they would buy it, but we abolish it. And because of our tax status, we abolish it without it becoming a taxable. Transaction to the patient. We have abolished in excess of $2 billion worth of consumer medical debt.

That's fantastic. Good stuff. Good stuff. All right, Robert, thank you so much for joining us.

Jason, thank you so much for having me.

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