The vaccine was approved by the Food and Drug Administration in 2006 and was met with a lot of fanfare and a recommendation by the Centers for Disease Control to routinely give it to young girls. Thus about 16 million doses of it have been given since its approval.

But in the last year or so, there has been a backlash against the vaccine. This is largely due to the fact that mandatory vaccination is being put on the ballots in several states. These efforts have been supported by its manufacturer, Merck. This corporate push, in combination with a general anti-vaccine movement, have stirred the controversy around the vaccine, which goes by the trade name “Gardasil”.

Thus far, there do not appear to be any major side effects from the vaccine other than some patients had allergic reactions and some fainted after taking the vaccine.  Many parents have been hesitant to give the vaccine to their young daughters who are not yet sexually active.

In general I do not think anything should be mandatory in medicine with a few exceptions. The main exception is the situation where failure to mandate intervention will threaten the greater health of the community. This is a concept called community beneficence. The best analogy is that of a disease such as smallpox in which transmissibility is an issue and vaccination is the only way to protect people. In that situation failure to vaccinate will lead to the spread throughout the entire population. Given that HPV is a sexually transmitted virus, I do not think a mandate is necessary. Those who want the vaccine can take it. It should not be forced on anyone.

One thing that people do not understand is that vaccine creation is an expensive and corporate driven endeavor. It costs tens of millions of dollars and at least a decade of research and experiments as well as a very strong lobby to create a vaccine. In the history of vaccines, vaccines have only been created because their was a large public health demand and threat or because there was a select population or lobby that pushed the vaccine’s creation.

One example of the latter is the Lyme Disease vaccine - a totally useless vaccine for anybody that lives outside of Connecticut or the woodsy Northeast, but one that nevertheless was created and targeted for those wealthy populations that wanted it. Undoubtedly it was a profitable endeavor for its creator. Undoubtedly it did not really do much good for 99.9% of the population.

The HPV vaccine isn’t as ridiculous as the Lyme Disease vaccine. HPV is associated with cervical cancer transformation, and cervical cancer is a big cause of morbidity and mortality among women. However, it’s difficult to say that the mandate is not profit driven by Merck or that the lobby for this product is not lining the pockets of legislators who are mandating its use.

Thus far the mandate has only been passed in Washington, D.C., and Virginia with HPV vaccination being a requirement for school attendance. However it is being considered in almost every other state.

One problem with Medicare Part D is that it is difficult for patients to organize their medications, shop for different medications, and coordinate their overall drug benefits. I happened to find a relatively new company called Destination Rx that is trying to make managing the prescription drug benefit much easier for patients. I do not have a financial interest in the company nor do I use the company. But in the spirit of investigating this topic, I thought it may be worthwhile to point out some of the newer companies out there that may be of benefit to readers. It is interesting also to see how technology can empower the patient.

This is a company that essentially allows the patient to create an account and manage their prescriptions drugs. It is a free site that provides online shopping comparison for prescription drugs. If you are not yet enrolled in Medicare Part D their site allows you to do so. If you already take medication you can find out if there are lower cost drugs such as generic brands as well as mail-order and retail pharmacy prices. They have created what they call a “Medicine Cabinet” to allow you to manage your prescriptions. You can even look up medical conditions and find out what treatments are available so you can initiate a discussion with your physician about treatments.

Although I am sure that many sites and services like this will appear, it seems to me to be a great idea. I’m not sure how much traction it has had or whether enough Medicare-age patients are savvy enough to use the internet or have the resources to access the internet for this kind of service. However, what I like about this type of service is the tremendous cost savings that it might bring Medicare recipients. If retailers and pharmacy resellers are forced to lower prices do to competition and increased efficiency in drug selection, healthcare costs can decline.

When I was a resident we had an attending on rounds who always would ask us if we knew what the costs were of every drug or treatment that we ordered. Most of the time we did not know. We ordered what was commonly ordered. We did not typically try to find out the cheapest alternative. Occasionally we would have a patient who insisted to know the cost of every medication they were receiving and all of the cheaper alternatives.  Wouldn’t it be great if we could provide a menu of treatment options and their costs to every patient and allow them to direct their care?

There have been many times in my career where I felt that was the case. However, being in the hospital and seeing a menu of medications and their costs is not like going out to dinner and choosing off of a menu. Even though we describe the patient as the “consumer,” they really are not the consumer. They are the patient. They must consent to treatment and can choose treatment options, but they cannot “direct” their own care. If they could direct their own care then doctors would not be needed. As I’ve mentioned previously doctors are licensed to practice medicine and usually are board certified in their specialty. They have been trained for at least a decade to become licensed. Thus they direct patient care. Patients can choose treatments, but doctors ultimately are responsible for what happens to the patient.

In many ways, a doctor is a parent and a patient is the teenager. The teenager is almost a fully functioning adult, able to make their own decisions, but they are not old enough to be independent from the parent. A good parent makes decisions with consultation from the teenager. And ultimately the parent is responsible if anything bad happens to the teenager. There are many adult concepts a teenager cannot understand without extensive explanation. Even after such explanation they still may not understand. Thus it is not feasible to explain the pros/cons of every treatment or medication, the potential side effects, sequelae, the recent literature on outcomes, and the whole volume of information out there on every treatment and drug. Doing so would be unacceptable, and, even if you did do this, the patient may still not understand everything.

While a menu of treatment options and their costs may sound attractive in theory, it simply is not feasible and would clearly highlight that the patient is a patient and not a consumer.

One example of this is the cyberchondriac who comes in demanding the latest medicine or implant that they have seen on television. You explain to the patient that you feel that the generic medicine is just as good and is cheaper and that you are most comfortable with prescribing it because you are familiar with its side effects. However, they have seen the commercials and they have heard of the snazzy brand name. Additionally, they do not mind paying the exorbitant price of the brand name.

It is not unusual to also have the healthy young asymptomatic patient who would like a routine work up of all of his labs. My feeling is that if you are young and have no symptoms you should have the most inexpensive tests done, if any tests at all. If they are normal then you shouldn’t have anything done for a while. These patients are the kind of patients that want to stay on top of their healthcare and come in for unnecessary tests.

Sometimes there is a patient with knee pain without a history of trauma. The patient wants an MRI when there is ample evidence that the majority of knee pain resolves within six to eight weeks of conservative therapy including icing, NSAIDS, and activity modification. The MRI costs about a thousand dollars, but the patient doesn’t care because his insurance pays for it. Thus he insists to have one and if one is ordered there is a reasonable chance that it might show an equivocal signal in the mensicus. Then an expensive Orthopedic referral is made. If the surgeon is unscrupulous or if the patient insists on having surgery, an arthroscopic procedure is done. And the chain of expensive events goes on and on in this manner, costing the health system a lot of money for an issue that probably would have resolved on its own.

The underlying theme driving the demand of healthcare by the patient is a sense of entitlement. We in the United States don’t understand that if you travel halfway across the globe there are thousands of people dying everyday of disease caused from lack of basic sanitation. But when we have an annoying pimple or wrinkle on our forehead we want to pay several hundred dollars to have it zapped. When we have pain we want and expect our healthcare system to fix us. If we are not fixed then we blame the doctor and the system.

In the end, the most expensive thing is human resources. If we as patients make people work to improve our health it is going to cost money. That cost is worth it when the situation is dire. When it isn’t, the cost is wasteful. As a patient and consumer it is important to understand this concept–making the healthcare system work for you costs everybody a lot of money and makes the system more expensive. We are all intertwined in this manner, whether we want to believe it or not.

In a capitalist healthcare system focused on profits, what is the most effective reimbursement structure to reward providers for care while also managing costs?

We need a regulated system – a private/public partnership [that…involves payment to the government for healthcare and government-monitored, private health insurance companies administering payment to privately employed doctors and privately run hospitals]. Over the last 20 years, we have been depending on the free enterprise system to bring costs down. Over that time, healthcare costs have risen faster than the rate of inflation. That is because we don’t really have a free enterprise system. The free market is skewed by politics. The large healthcare companies have huge amounts of money to pass along to Congress via lobbyists, who influence Congress to pass laws that benefit big business healthcare.

What we are not cognizant of is the tremendous amount of profit realized by these companies, healthcare insurance, managed care, and pharmaceutical companies. These companies drive up our healthcare costs. We have the most expensive healthcare in the world, spending 17% of our GDP. France, Italy, Germany, Japan, and Taiwan spend roughly 8-9% of their GDP on healthcare, cover everyone, and have extremely happy patients.

We are told that the only alternative to the system that we have is the Canadian style system. That is a false story put out by the beneficiaries of our current system, primarily the insurance companies.

One obvious consequence of bringing down big pharma and device companies is that they will no longer spend the huge R&D on blockbuster drugs if there is no capital reward via reimbursement. Thus one clear consequence of making healthcare more affordable is a slowing of discovery and advancement. How can we incentivize advancement in medicine while controlling costs?

Big pharma spends 10-15% of its profit on research and development and 30-40% on marketing. Professor Karl Lauterbach of Germany said in a PBS interview on Frontline, titled Sick Around the World, “I don’t know of a single economist who would buy into that argument. I think this is a lobbyist argument. A market works best if there are no inefficiencies, and higher-than-necessary prices are inefficiencies. And the drug companies now spend more for marketing the drugs than for innovating the drugs. This clearly is an artifact which comes across with this system of subsidized and too-high prices.”

Do you think that class-action lawsuits by providers against insurance companies are a good solution to balance the inequity of power insurance companies wield in the current healthcare climate? Or does this merely clog the judicial system and become a distraction from what providers should be doing: helping patients?

Class actions and lawsuits in general are very wasteful of resources because the outcome is extremely uncertain and the suits are very costly in time and money. They would take time away from healthcare and possibly put health care workers in an unfavorable light vis-à-vis the public. As I said, the outcome of lawsuits is uncertain, and I think they should be used as a last resort. The better approach in this case is to influence the public and Congress for the development of a new healthcare system: a public/private partnership which eliminates the excessive profits of health insurance companies, big pharma, and managed care.

In your August newsletter, you describe the many and varied problems the U.S. has had with contaminated or improperly supervised drugs coming from China. Would it not solve a lot of the U.S.’s problems as well as poor patient outcomes if we simply stopped accepting drugs from China and instead paid a bit more for drugs that are properly supervised in countries that care to ensure it? What do you think it would take to reduce consumerism from China, especially given that drugs are not the only problems we have had, but also melanin contaminated products and lead contaminated toys?

I don’t think it likely that world trade is going to be turned back, and it may not even be a good idea. We already pay two to three times more for pharmaceuticals than other developed countries, for example Canada. We have been told that we must pay more in order to safeguard our drug supply and promote the development of new drugs.

U.S. drug companies are making record profits but still want to make more. They are having their drugs made in China to increase profits. Because we pay a premium for pharmaceuticals, I believe that we are a target for counterfeit pharmaceuticals, not more protected. Counterfeiters have no compunction about who they kill and want to make the most money. In my book, The Price of Death, I discuss the point of view of the Chinese on counterfeiting. Because this administration has actually reduced funding for the FDA despite the fact that world trade has increased, we are at great risk. At its current rate, the FDA will be able to inspect the 700 plants now open in China in the next 40-50 years. What we should do is require importers to pay a government fee to have their imports inspected. There is no reason that they should be making record profits and putting the consumer at risk as they are.

There was a problem with Baxter International heparin earlier this year, which, according to the FDA, probably came from China. The FDA says that the manufacturer used oversulfated chondroitin sulfate (OCS) instead of chondroitin sulfate (CS). The relative cost of the bogus chemical was only $9 per unit vs. $900 for the correct ingredient. There had also been a reduction in the availability of other materials to make heparin because it comes from pigs, and there was a pig epidemic in China. While it is difficult to prove, one can speculate why the plants would have substituted the new ingredient when stocks of other ingredients fell short and became more expensive. I say that it is difficult to prove partly because the Chinese government had not admitted that the OCS was the cause of the problem even though the FDA has indicated so on its website. The bogus chemical fooled the standard tests [about the protein content of the product], impeding immediate discovery of the problem.

Now Here’s Your Chance to Ask the Questions (and Win One of Three Copies of The Price of Death, Too!)

Do you have a question that we didn’t ask? Here’s your chance to pick S.J. Robinson’s brain. Submit your questions for her in the comments section, and she’ll be available for a week to answer them. Also, by submitting your question, you will be automatically entered into a drawing next week in which three winners will receive a free copy of her book. (Sorry, you must be a U.S. or Canada resident to participate in the drawing.) Please see our Book Giveaways information page for complete details and ask away!

As I mentioned in a previous post, bundling is when insurance companies downcode or combine multiple codes into one in order to reimburse the provider less.  In this physician’s case, the insurance company was bundling endoscopies with office visits and was reimbursing for the least costly services only.  Additionally, the insurer downcoded several codes based on software it uses and tried to say that the lowered reimbursement was a “negotiated write-off” as though the physician’s practice had agreed to it. This is exactly the type of thing I was referring to when I said that insurance companies “force” physician’s to accept lower payment. As this insurance company’s logic shows, failure to fight downcoding and bundling is equal to “acceptance” by the physician. Thus, if you do not correct it, it is assumed that you accept it.

Interestingly, the practice in question has a threshold for when to trigger legal action. When denials reach over $50,000 by one insurer, it triggers the next step in legal action.

Details are not given as to who actually pays for all of these legal costs. However, you can be sure that the addition of an attorney to your practice is probably prohibitively expensive. But when the potential windfall is large - this practice says that several hundred thousand dollars are collected each year via denial appeals - it may well be worth the investment.

If any reader out there knows of any stories like this, I would be interested to hear about them. It is not often that you find a provider willing to sue an insurer over downcoding. But I anticipate to see this gain popularity in the future.

In celebration of our readers old, new, and yet-to-be (because this online magazine is nothing without its readers), we’ll be holding a number of e-interviews over the next few weeks with authors who write on topics that you care about: healthcare, the world economy, business, etc. We’ll post the e-interview in the blogs and invite you to submit your own questions to the author. He or she will be answering your questions for a week before we close it with a drawing for free copies of the author’s book that he or she is promoting.

Our first e-interview will be posted this week and will be with S.J. Robinson, author of The Price of Death. We’ll also post the drawing rules and details before then. Meanwhile, subscribe to our blogs via RSS or email or, if you prefer, add our homepage to your bookmarks to stay updated on the e-interview/drawing events in the upcoming weeks.

Also, and probably most importantly, we have a new name and web address: Citizen Economists at www.citizeneconomists.com. We’re still amateur economists (at least most of us are), and the spirit of the magazine hasn’t changed. So why the new name? I think “citizen economists” is a more fair description. It reflects the fact that most of us are non-economists and the fact that we are also citizen journalists. And it definitely reflects the openness of the magazine: we depend not only on articles from our regular contributors for news and commentary but also on comments that our readers leave behind. That’s what separates the independent media from the mainstream media: for us, news is a conversation among and between contributors and readers.

That being said, we have implemented a new comments policy. You can read about it in the About page. The bottom line is that all comments must be approved before being posted, and, if a comment is disrespectful in any way towards a contributor or reader, it will be deleted.

Thanks for reading Citizen Economists, and we’ll see you at our first e-interview this week!

Here is typically what happens. A patient sees a physician who has an agreement in place with an insurance company. The physician sends the bill or claim to the insurance company, and the insurance company remits payment along with an EOB. One hundred percent of the time, the insurance company does not pay the full amount of the bill. The physician typically accepts the payment and does not bother with trying to collect more. When the insurance company denies the claim, the physician may try to collect payment and resubmit the claim. But typically there is a huge loss by the physician who does not have expertise in collecting payment.

If you look closely at this you will find that essentially the insurance company short changes the doctor and does not pay the full bill. In any other consumer-vendor interaction, it would be a violation of payment contract. This would be equivalent to going out to dinner and then paying half the bill instead of the whole thing. I’ve never thought of doing that, and I doubt many readers have. In those situations, it would clearly be unacceptable. We know it, and the restaurant would know it.

What makes it any different if a doctor is not paid the amount of his bill? One could argue that doctors provide a community service, and that, if a patient is getting a free ride by the doctor, that is not such a bad thing. However, the reality is that it is the insurance company getting a free ride, not the patient.

What is going to change the system? Class action lawsuits. In my next post I will highlight some examples of how this could all work.

One could argue that taking such action would essentially bankrupt insurance companies and break the healthcare system. If I had to choose between squeezing doctors or insurance companies, you know who I would choose.

After a doctor sees a patient, he submits a claim form to the insurance company that lists all the procedures he did on the patient. The procedural coding method is quite complex and involves a series of modifiers when the procedure strays from the norm. For example, when you see your doctor for a general office visit, it is categorized as a simple, moderate, or complex office visit. The payment is different for each code, with complex reimbursing the most. Documentation for a complex visit is more extensive than a simple visit.

So how exactly does bundling work? Let’s say you go to your doctor for evaluation of hypertension. He notices that your pressure is abnormally low and that you are dehydrated. Thus, he decides to give you an IV infusion of fluid to rehydrate you. When it comes to billing, he has done three things with three different codes: evaluated you for hypertension, given you an IV, and done an infusion of fluid. The insurance company may try and bundle the two codes for IV placement and infusion together into one with the reasoning that an IV placement is included in the infusion code.

This type of bundling is widespread in every specialty of medicine and amounts to the simplification of multiple medical procedures into fewer. Thus, bundling is a technique used by insurance companies to mess with the coding system to lower reimbursement for physicians. As you can imagine, most physicians are not going to spend hours each day going over these codes and modifiers to see what they have bundled together. Some physicians actually test the system by continuously re-submitting claims with different codes until they get paid. In my opinion, manipulation of codes by physicians could be fraudulent - there is wide interpretation of how to code various procedures among the medical community. Many physicians feel that if insurance companies are manipulating codes, then doctors should fight back.

It is all a game of cat and mouse: the insurance companies bundle, and the doctors unbundle.

There are many physicians who do not have board certification in their specialty. This does not mean that they cannot practice medicine or their specialization. It may mean that they will have a difficult time gaining privileges at hospitals. It may also mean that the discerning patient may choose to go to someone who is more qualified. But, typically, it only matters if there is a complication or the patient is not satisfied with his or her outcome. If there is a lawsuit, it is likely that someone who practices a certain specialty without having the appropriate certification would be more exposed than someone who does have all the certifications.

One example of this is the notorious plastic surgeon on Dr. 90210, Dr. Robert Rey. I cannot confirm this, but I have read several articles that indicate he is not board certified, and he has been quoted as saying that he simply was too busy to get board certified. It does not surprise me that patients continue to flock to Dr. Rey for this services. Given his notoriety and fame from television, patients seeking a doctor to the stars will happily pay for his services.

From an economic point-of-view, this illustrates something very powerful in medicine - that reputation and business-savvy can trump qualifications. You do not have to be the best doctor or care provider in order to have a busy practice. It is well known in the medical community that, if you really want to find out whether a doctor or surgeon is good, you need to ask the key personnel who work with many doctors. For example, surgical scrub technicians know which surgeons have the best hands and the best intra-operative judgment. The average person watching Dr. 90210 does not know whether Dr. Rey is good or bad at what he does. He gains his reputation from the patients shown on television, his good looks, and the fact that he has his own TV show.

It makes me wonder why we have board certifications, after all, if the general public does not care much about it. Physicians in medicine seem to be chasing their tails getting more and more qualified, but perhaps this is all a futile endeavor.