The Crested Butte News Serving the Gunnison Valley since 1999
Healthcare and healthcare reform are national news, making headlines everywhere from CNN to The New Yorker. It can be easy to get lost in the political jargon, but the conversation relates to every single American and their health—even in the Gunnison Valley. New federal mandates, rising healthcare costs, problems within the insurance industry and physician shortages are all questions faced here, at home. In a continuing series, the Crested Butte News looks at what’s happening on the local stage to provide affordable, quality healthcare for all of us.
In 2010, Pete Basile experienced what he calls spells of disorientation. After a visit to the doctor, he learned he had a brain tumor. Basile was fortunate—it was benign, and doctors in Denver were able to remove “almost every last bit of it.” He made a full recovery, and an MRI one year later showed no signs of the tumor returning.
Basile was fortunate on another front as well: his roommate, Kirsten Atkins, spearheaded a fundraiser. Even though Basile had insurance, he had a high deductible and out-of-pocket maximum. In total, the Crested Butte community kicked in about $15,000 to defray Basile’s medical costs. The community’s generosity took Basile by surprise.
“I was concerned at one point that there was too much money. I went to Kirsten and was like, ‘We gotta stop, I can’t end up with a whole bunch of extra money,’” Basile says.
But the funds covered his out-of-pocket expenses just about perfectly, including the $1,500 MRI that was not covered by insurance at all. The thing that surprised Basile the most was the generosity of people he barely knew.
Ella Fahrlander, who had fundraising experience with Adaptive Sports Center, helped Atkins coordinate the fundraiser even though Basile didn’t know her well at the time. And a customer from the Rug Gallery donated $1,000.
“You never think you’re that guy or that special to that many people,” Basile said.
Of course, Basile is not alone. Last weekend, soccer teams dueled for the well being of Steve Lawlor, who’s in Illinois getting treatment for large b-cell lymphoma. Businesses all around town sport jars next to their cash registers raising money for Cash Lamar, who’s in Denver fighting an infection in his lungs. On one hand, these examples speak to the giving nature of the Crested Butte community. But on the other, the fact that we have to raise money at all speaks to the growing challenges of paying for health care, even for the insured.
Another bubble ready to burst
“The first bill I saw was just for a three-day stay in the hospital, not including the surgery or the anesthesia or anything like that,” said Basile. “It was like $90,000 for two days in intensive care and one day in a regular hospital room.”
After insurance kicked in, the rates were adjusted and the bill dropped by about half. Insurance covered a good portion of the bill, but even $15,000 in out-of-pocket expenses is a stretch for many in Crested Butte.
Rick Huntington, husband of local physician Dr. Joanne Huntington, has been studying the business of health care for more than 30 years. As the executive director of the Houston Business Group on Health and a principal in the benefits consulting firm Foundation Strategies, Rick Huntington has been surveying healthcare costs since 1995. During that time he’s seen them rise between 7 percent and 12 percent a year.
“This is not so unlike the financial bubble or any other bubble we’ve had,” Huntington said. “We’ve been kicking it down the road and now it’s here.”
Many factors have driven the increase, he continued, not just the insurance companies. Over the last 15 to 20 years, the United States has made great strides in medical and technological capabilities as well as advancements in the manufacturing of drugs. All of that comes at a huge expense. Administrative costs have also been on the rise, and the implementation of things like HIPAA (the Health Insurance Portability and Accountability Act) required massive investments in technology by healthcare providers.
“In the meantime, we’ve lost a lot of insured individuals who have become the uninsured 40 million we all read about in the newspapers, which is an enormous cost driver,” Huntington said. It’s complicated further by the fact that many healthy individuals are going without insurance. “If they don’t have the money they don’t have a problem going without. This is the number one issue we’re facing… because without getting the healthy people insured or in a position to pay their expenses, we’re just in a death spiral with the 10 percent. The first rule of insurance is that 10 percent of people have 90 percent of the cost.”
During the 1990s, employers absorbed the costs. Government programs also absorbed a lot of it, borrowing money or raising taxes to pay for Medicare and Medicaid. But as costs have continued to rise, there’s no place left to shift the burden.
“It comes down to, ‘How do we get control of the cost?’” Huntington said.
Less access to insurance
In many parts of the country, insurance companies deal with the cost of healthcare by engaging in something called cherry picking. Bob Brickman is the former medical director of Sentara Health System in Norfolk, Va. He now serves as chairman of the Gunnison Valley Health board of trustees. But he remembers an insurance provider who placed their enrollment offices on the third floor, with no elevator access. Right off the bat they eliminated anyone incapable of making the climb.
“They could analyze, identify and drop people before they developed things like emphysema,” Brickman said.
Rick Huntington also said he receives weekly emails from insurance companies saying they no longer sell coverage in specific regions.
“If they can’t get ahead of curve of the increasing cost of the insurance products, they just pull them,” Huntington said.
Access to insurance is not as much of a problem for Crested Butte, he said. In general, Colorado is one of the healthiest states in the nation. We are consistently the thinnest state with lowest obesity rates, and it shows in our insurance rates. But rising costs are still borne by those with insurance or the ability to pay, and our healthcare providers bear those costs as well.
“Somewhere between 55 percent and 65 percent of medical spend [medical costs spent] in this country is on public programs, Medicare and Medicaid. They’ve cut reimbursements to providers, all providers,” Huntington said.
That’s taken its toll everywhere, including the Gunnison Valley, and not just because approximately 10 percent of the population is on Medicare or Medicaid. Reimbursements from Medicare influence insurance reimbursements across the board. Huntington’s wife, Dr. Huntington, has felt that pinch in her primary care clinic in Crested Butte.
“For me, that’s exactly what is happening. The cost of running a medical practice is skyrocketing at the same time they’re reducing reimbursements,” Dr. Huntington said. “We all hear about Medicare, but that rolls through the whole system. Every insurance payment out there is a percent of Medicare, and it’s met that critical level where there’s no way for me to stay open.”
Dr. Huntington is closing her clinic this spring, and will help her husband in his consulting. The idea of doctors closing their clinics due to financial hardships can be a hard one to grasp, especially for the average patient who sees the cost of medical bills. But financially, the odds are stacked against primary care physicians and it’s creating a shortage of doctors.
Reduced access to care
Dr. Eric Thorson opened the Town Clinic of Crested Butte with his wife, Marsha, in January 2011. He was lucky, he said. Through his own savings, support from his family and support from his wife, he was able to open his own clinic. But the average medical school graduate leaves school with $150,000 to $300,000 of debt—the equivalent of a second mortgage.
“That has a huge impact on what people choose to do,” Dr. Thorson said. “Primary care specialties—family medicine, internal medicine, pediatrics, psychiatry—are on the low end of the payment, and most specialties make two to four times what primary care makes.”
That alone is enough to keep doctors from choosing primary care specialties, but every healthcare expert in the valley cited additional financial challenges for primary care doctors, including the rising cost of malpractice insurance and the cost of implementing and maintaining medical records technology. The latter is not a one-time deal. Rich Huntington said annual upgrades cost thousands of dollars a year. And then there’s the administrative cost that comes in navigating the insurance systems. Doctors don’t necessarily have better access to insurance companies than patients.
Marsha Thorson said it takes an average of five to six months to receive in-network status with insurance companies. With Medicare, it took 11 months to become in-network. The challenges are familiar to patients trying to navigate the same companies: lots of time on the phone; repeated attempts to reach the right person; trying to understand what was incomplete in the original paperwork; and refilling out forms again and again, and sometimes again. It’s time-consuming and generates questions from patients.
“The patients didn’t understand why we were not taking Medicare, and why this is such an onerous process,” Thorson said.
“Or they wonder, ‘What did I do wrong that it takes 11 months? What is Medicare looking at?’” Dr. Thorson added.
Once they are in network, it can take three to six months to receive payments from insurance companies. And while the Thorsons are finding their way through the system, the pressures on primary care doctors are resulting in a projected doctor shortage in the valley. Brickman said GVH projects it will need to hire 2.5 doctors within the next couple of years to maintain adequate access to care in the Gunnison Valley. And while there are hires on the horizon, there are long-term costs involved. On average, a primary care doctor costs a hospital $100,000 more than he or she brings in business.
It’s just one more way that providing quality healthcare in the valley is complicated and expensive, but the takeaway is simple: everything happening on the national level is also taking place right here in the Gunnison Valley. Health care costs are on the rise and threaten to compromise access to care. The Affordable Care Act seeks to address some of these problems, but its fate is in the hands of the Supreme Court and there are still more questions than answers.
In the meantime, healthcare providers in the valley are making on-the-ground changes in the hopes of providing better-quality, affordable healthcare. Some of those changes will likely show up on the election ballot this fall, as GVH looks to improve healthcare for senior citizens.
It’s in anticipation of those decisions, and in acknowledgement of the way our community continues to go to bat for our neighbors’ health, that we’ll spend the next few weeks looking at healthcare in the valley. We’ll find out what national mandates will mean locally, and how players like small-town clinics and rural hospitals can work together to keep health care accessible. We’ll also look at a case study close to home that provides one map for doing that. We hope you’ll join us in taking a closer look at healthcare.
