Schoenberg: Utah's health exchange faces problems

The Salt Lake Tribune editorial of Jan. 6, headlined, "Avenue H: Utah's exchange has work to do," is an understatement of the problem of reforming our for-profit, market-based health care system.

Let me illustrate the problems faced by those designing Avenue H, Utah's online health insurance exchange, by my recent experiences with our current health care system.

It was a horrendous complex of varied charges, reimbursement rates, co-pays and dealing with multiple in-state and out-of-state corporations and billing agencies.

In September I had trouble voiding my bladder. My family doctor prescribed medication to shrink my prostate. The office visit charge was billed at a modest $159 to Medicare. Medicare approved $74 of the charge, paid 80 percent, or $59, and I paid the 20 percent of the approved amount, or $15. This means the doctor collected 47 percent of his charges.

The medication did not work. A month later it became an emergency requiring a bladder catheter because urine flow had stopped completely. The hospital's emergency charge was $1,218. Medicare approved $132 of this charge and the hospital ended up collecting 11 percent of charges. The emergency physician had a separate charge of $284 and ended up collecting 28 percent of charges.

To shorten the story, a urologist recommended a TURP operation (transurethral resection of the prostate) requiring a one-hour operation and an overnight stay at a hospital. The total charges for this stage amounted to $28,929. Medicare approved $4,246, for an average reimbursement rate of 15 percent.

Thanks to the non-profit Medicare's drastic slashing of billed amounts, I paid only $841, or 20 percent of the reduced amount, instead of more than $5,000.

This single episode brings up a number of questions for designers of Avenue H.

1. How will the computer "program" display the actual or probable cost to the consumers of hundreds of different providers and insurance plans covering tens of thousands of different ailments with different deductibles, co-pays and percentages billed to patients?

2. Who will represent the consumer in negotiating reasonable reimbursement rates, which currently are in the range of 30 percent for both Medicare and private insurance carriers?

3. How will Avenue H help reduce the actual complexity and cost of our health care and billing system?

During discussions of the Pre-Session Health Reform Summit conducted by the Utah Health Policy Project on Jan. 17, it was proposed that many more "navigators" — people who could guide insurance shoppers through the fog of Avenue H — are needed. This brings up more questions:

How will these "navigators" be trained, who will pay for their services and whose interests will they represent?

With so many unresolved questions and complexities, my fear is that the Avenue H system based on the proliferation of market-based, for-profit private insurance plans will soon turn into an unpaved rocky mountain road with hundreds of potholes hidden in the fog of uncertainty, ready to swallow up our wallets and credit cards.

My hope and wish is that our health care system evolves to a single-payer, not-for-profit system. It could result in most doctors and other professionals having a negotiated yearly salary that includes good health and retirement benefits.

If such a contract eliminated the need for doctors to bill patients and the present tug-of-war with insurance companies, it could result in significant reduction of health care costs.

Andy Schoenberg retired in 1999 from the faculty of the Rehabilitation Department of the University of Utah. He has a Ph.D. in biophysics and bioengineering.