"Induced demand" is a commonly used health economics term. It can be due to 'supplier' that is provider or the patient.
Supplier induced demand is fairly specific for the healthcare industry. It almost always never occur in the retail industries. Generally, in conventional retail industry, the higher the demand for a particular product, the price will be higher for that particular product. This demand is not determined by the retailer. The retailer cannot says 'I want to increase the demand for this product', just to increase the price of the product that they are selling. It just won't happen.
In the healthcare industry, whenever a patient goes to see a doctor, the patient usually follows the advice of the doctor. If a patient has got a headache, and the doctor asked the patient to do a MRI of the brain, in most cases, the patient will 'agree' and follow. The question is, is a MRI really indicated for a headache? The answer is 'no'. The headache is likely to be tension related and resolve over time. This is especially so if the headache just started or will only occur during stressful period. The unnecessary ordering of an expensive investigation, in this case a MRI, is classic of a doctor 'inducing demand' of MRI to a patient. The patient, of course, have no choice but to pay for it.
Recently I come across a patient that works for a corporate company. She has got a medical card from a local insurance company that allows her to seek dental treatment. The limit of the card is RM1000 per year. The patient has got no problem with her teeth, but she thought that since its covered, my as well just go to the dentist and 'beautify' my teeth (whitening, scaling, etc). The dentist of course is happy because one client allows him or her to earn RM1000 extra just because 'the patient wants to fully utilize the insurance card'. The insurance company of course will not question the patient since it is a 'corporate benefit' for her. In this case, the patient herself induces a demand for healthcare and 'use up' a significant portion of her insurance benefit for her teeth that don't need 'treatment' at all.
Induce demands, whether, it is patient or supplier induced, push up healthcare costs significantly. This unethical use of healthcare resources should be stopped or risk even higher healthcare cost in the future. In the case above, if the insurance company realized that the utilization of healthcare card for dental treatment is high, the company will directly increase premium for those cards making employers to pay more for their employees healthcare benefits. For those employers that can't afford higher premium, more employees will loose out without any insurance coverage, or, the limit of RM1000, will now be RM500 per year. This viscous cycle occur continuously and at the end, the person that loose out will not be the doctor, nor the insurance company, nor the employer, but will be the employee.
Insurance are not meant for us to use 'for the fun of it'.
Monday, March 25, 2013
Saturday, March 23, 2013
Medical Insurance 2
My blog post yesterday came in timely. I read The Star newspaper today and there is an article on the importance of medical insurance. For those that have not seen the article, here is the link
The article highlighted the importance of PHI and how some people view it as an 'investment'. Personally, I feel that an 'investment' means something that have 'returns'. Hence unless paying a premium for my insurance give me returns, I'll consider it as an investment. We all need to realize that not all policy give us investment returns. Some basic and 'old fashion' policy give us just medical coverage. Only until we use it, really, there won't be much 'return of investment'. There are some policy that has an investment account 'linked' with it. This investment linked policy do give some returns. Of course, these investment linked policy have higher premium compared with the old fashion policies. I am no insurance agent, however, after years working with my colleagues from PHI companies, that much I can relate.
One thing I totally agree and must reiterate is our health. Strictly speaking, insurance is useful for us when we are sick or dying. If we can prevent from being sick or dying, then will it not be better? This is what I call 'investing in our health'.
Essentially there are 3 things about investing in our health.
1. Eat healthily.
Do not ever indulge ourselves in food orge! We have all heard it, fried food is bad and fruits and vegetables are good for us. You may ask, how can we just eat fruits and vege? Of course we can't. It is all about balance diet. I'm again, no dietitian but, common sense will tell me, to eat as little as possible fried food, and food with high glycemic index but eat much of fruits and vege. If you don't know what glycemic index is, 'google it'.
2. Exercise
Yes, this 8 letter word is something we all despises. We all hate it. We all always have no time for it. Lets face it, its either we exercise now, or die earlier. Its that simple
3. Supplements
Supplements is a need, a 'must'. Medical evidence on the usefulness of supplements are overwhelming. The food we take in daily, is just not enough of vitamins and antioxidants.
That's it. ABC of investing in our health. Some of us may ask, what do we get if we invest in our health? What is the 'ROI' so to speak? The ROI is long and productive life. Take note that I 'bold' the word 'and' because we all know that if we have long but not productive life is likened to a stroke patient, paralyzed and dependent on a wheelchair. What's the point of living 200 years but on a wheelchair right? Being productive but not long years is too short term. You may be a billionaire now, but you only have next 6 months to live because of hypertension, diabetes, kidney disease, etc.
Begin with an end in mind.
Medical Insurance
Medical Insurance is no stranger to many of us. Most of us have been approached by many, friends or alike, to buy their insurance products.
These Medical Insurance products are offered by a variety of companies, mostly international companies. In Health Economics, these products are termed 'private health insurance' or PHI in short.
PHI is good if we can afford it. Most agents will tell us 'buy as much as we can afford', this is true. However, we need to know its limitation. PHI do not cover 'everything'. In most cases there will be a certain payment that patients need to pay. These payments are termed 'copayment' and 'deductibles'. Its beyond the scope of this blog for me to talk about these 2 terms. (of course if anyone out there wants me to explain, then just drop me a note below). Also we need to note that each PHI has its own yearly and policy limit. I shall illustrate an example below.
"John brought an insurance policy from Company ABC. He pays a yearly premium of RM2400 to company ABC and this allows him to have a yearly claimable amount of RM10000 and a policy lifetime of RM100,000. John got admitted to a hospital for surgery. The surgery cost him RM8000. Since his yearly maximum is RM10,000 John thought that he do not need to pay any money to the hospital. He was surprised when the hospital told him to pay RM1600 before he can get discharged."
The above classically described copayment. John was unhappy, for the fact that, despite paying RM2400 yearly, he still need to fork out money for his surgery. Hence, we need to understand our policy before we buy any PHI. The policy may be thick and has many pages, however, it will definitely benefit us if we go through them. If we don't understand, then ask our agents. It is their responsibility and job to explain it all to us. Copayment is classically at 15-20% of total medical bills.
Here is another scenario that I commonly hear.
" James pays a premium of RM2400 for a yearly claimable amount of RM10,000 and policy lifetime limit of RM 50,000. James went for a surgery in hospital ABC that cost him RM8000. However he was asked to pay RM7200 before discharged! James know about copayment, but to his knowledge, copayment is usually up to 20% of medical bills (that is RM1600). James was unhappy and lodge a complaint to the hospital and brought the matter up to Bank Negara Malaysia (BNM). After scrutinizing his policy, it was true that James have to pay RM7200. James was disheartened and felt cheated by his insurance agent".
What happen in James' case is where each surgical procedure has got a maximum claimable amount. This clause is usually stated in the policy. James underwent excision of a swelling on his leg. In his policy, all excision surgical procedure, the insurance company pays only 10% of the procedure cost. In James case, its only RM800 !
Next is another common scenario that I frequently get complaint from.
" Peter, 60 years old has got heart problem. He has irregular heart beat and need to have a pacemaker inserted to save his life. He has got a quite comprehensive medical insurance coverage. He pay a yearly premium of RM4800. This allows him to have a yearly claimable amount of RM20000 and a policy life of RM100,000. The doctor that treated him in the medical centre contacted the insurer telling them that he needs immediate surgery and pacemaker insertion to save his life. It was at night. The customer service agent that ran the call centre told the doctor "do the necessary and file for reimbursement later".
The doctor correctly went on to save Peter's life. The surgery cost RM19000. Part of this cost was for the pacemaker, and this cost RM12000. Peter was fit for discharge 2 days later and it was at this time he had another 'heart attack'. He has to pay for his own pacemaker, the rest (that is Rm7000) will be paid by the insurer. As a retiree, it was pretty obvious he cannot afford to pay for his bills. He lodge a complaint against the insurer for giving the doctor and hospital false information and against the hospital for charging too 'expensively' ."
In Peter's case, his policy clearly states that a pacemaker is not covered. However Peter was not aware of it. The night shift customer service of the insurance company told the doctor to do the needful to treat a patient's life but fail to convey the fact that a pacemaker is listed as part of Peter's policy exclusion criteria. The moral of this story is, again, we need to read our policy well. Usually the 'exclusion criteria' for any policy is stated fairly clearly.
The above three cases are commonly by myself in my work. Of course, those names are just pseudonyms and those figures are 'make belief'. What is important is the moral story behind each of the case.
Healthcare is expensive. The general public do not realize this fact especially when most people seek treatment from public hospital. You can imagine, the little money patients pay (RM5, RM30 or RM500) paid to public hospital for treatment is just the tip of the iceberg. Up till now, the government pays for the public's healthcare. How long can the government sustain it? My next blog, I'll paint this picture a little clearer.
These Medical Insurance products are offered by a variety of companies, mostly international companies. In Health Economics, these products are termed 'private health insurance' or PHI in short.
PHI is good if we can afford it. Most agents will tell us 'buy as much as we can afford', this is true. However, we need to know its limitation. PHI do not cover 'everything'. In most cases there will be a certain payment that patients need to pay. These payments are termed 'copayment' and 'deductibles'. Its beyond the scope of this blog for me to talk about these 2 terms. (of course if anyone out there wants me to explain, then just drop me a note below). Also we need to note that each PHI has its own yearly and policy limit. I shall illustrate an example below.
"John brought an insurance policy from Company ABC. He pays a yearly premium of RM2400 to company ABC and this allows him to have a yearly claimable amount of RM10000 and a policy lifetime of RM100,000. John got admitted to a hospital for surgery. The surgery cost him RM8000. Since his yearly maximum is RM10,000 John thought that he do not need to pay any money to the hospital. He was surprised when the hospital told him to pay RM1600 before he can get discharged."
The above classically described copayment. John was unhappy, for the fact that, despite paying RM2400 yearly, he still need to fork out money for his surgery. Hence, we need to understand our policy before we buy any PHI. The policy may be thick and has many pages, however, it will definitely benefit us if we go through them. If we don't understand, then ask our agents. It is their responsibility and job to explain it all to us. Copayment is classically at 15-20% of total medical bills.
Here is another scenario that I commonly hear.
" James pays a premium of RM2400 for a yearly claimable amount of RM10,000 and policy lifetime limit of RM 50,000. James went for a surgery in hospital ABC that cost him RM8000. However he was asked to pay RM7200 before discharged! James know about copayment, but to his knowledge, copayment is usually up to 20% of medical bills (that is RM1600). James was unhappy and lodge a complaint to the hospital and brought the matter up to Bank Negara Malaysia (BNM). After scrutinizing his policy, it was true that James have to pay RM7200. James was disheartened and felt cheated by his insurance agent".
What happen in James' case is where each surgical procedure has got a maximum claimable amount. This clause is usually stated in the policy. James underwent excision of a swelling on his leg. In his policy, all excision surgical procedure, the insurance company pays only 10% of the procedure cost. In James case, its only RM800 !
Next is another common scenario that I frequently get complaint from.
" Peter, 60 years old has got heart problem. He has irregular heart beat and need to have a pacemaker inserted to save his life. He has got a quite comprehensive medical insurance coverage. He pay a yearly premium of RM4800. This allows him to have a yearly claimable amount of RM20000 and a policy life of RM100,000. The doctor that treated him in the medical centre contacted the insurer telling them that he needs immediate surgery and pacemaker insertion to save his life. It was at night. The customer service agent that ran the call centre told the doctor "do the necessary and file for reimbursement later".
The doctor correctly went on to save Peter's life. The surgery cost RM19000. Part of this cost was for the pacemaker, and this cost RM12000. Peter was fit for discharge 2 days later and it was at this time he had another 'heart attack'. He has to pay for his own pacemaker, the rest (that is Rm7000) will be paid by the insurer. As a retiree, it was pretty obvious he cannot afford to pay for his bills. He lodge a complaint against the insurer for giving the doctor and hospital false information and against the hospital for charging too 'expensively' ."
In Peter's case, his policy clearly states that a pacemaker is not covered. However Peter was not aware of it. The night shift customer service of the insurance company told the doctor to do the needful to treat a patient's life but fail to convey the fact that a pacemaker is listed as part of Peter's policy exclusion criteria. The moral of this story is, again, we need to read our policy well. Usually the 'exclusion criteria' for any policy is stated fairly clearly.
The above three cases are commonly by myself in my work. Of course, those names are just pseudonyms and those figures are 'make belief'. What is important is the moral story behind each of the case.
Healthcare is expensive. The general public do not realize this fact especially when most people seek treatment from public hospital. You can imagine, the little money patients pay (RM5, RM30 or RM500) paid to public hospital for treatment is just the tip of the iceberg. Up till now, the government pays for the public's healthcare. How long can the government sustain it? My next blog, I'll paint this picture a little clearer.
Friday, March 22, 2013
Hospital or Clinic Itemized Bill
There are lots of patients who are seeking healthcare from private institution do not realize their rights as a patient. One of the it is the request for itemized billing.
Imagine this, if we go to a hypermarket to do our groceries shopping. At the check out counter we put 20 items to be checked out. The cashier asked you to pay a sum of RM1000 for the 20 items. What will be our first question to the cashier? Personally it will be these two questions
1. Why so expensive?
2. Can I know which of the 20 items is expensive?
In the above scene, I am basically asking for the itemized bill so that I can check which of the items that I wanted to buy was expensive. It is a pretty normal response.
The question is, 'Why we don't do the same when we seek healthcare from doctors in hospitals or clinics?'
Allow me to put down few facts:
1. The patient can, at any time, asking for their itemized bill when their admitted to the hospital. This is clearly stated in the Regulations and the hospital or clinics cannot run away from it
2. The patient can ask for estimated cost of their treatment before a treatment is started. This is to allow patients to know the price before 'buying the product'.
3. The price of treatment must be the SAME if you are paying cash or under an insurance coverage. I know for a fact that lots of private medical centres out there are asking for higher price if a patient is covered by insurance. Almost all of these patients do not even ask 'why' is it more? There is no reason for more.
Know your rights as a patient!
Imagine this, if we go to a hypermarket to do our groceries shopping. At the check out counter we put 20 items to be checked out. The cashier asked you to pay a sum of RM1000 for the 20 items. What will be our first question to the cashier? Personally it will be these two questions
1. Why so expensive?
2. Can I know which of the 20 items is expensive?
In the above scene, I am basically asking for the itemized bill so that I can check which of the items that I wanted to buy was expensive. It is a pretty normal response.
The question is, 'Why we don't do the same when we seek healthcare from doctors in hospitals or clinics?'
Allow me to put down few facts:
1. The patient can, at any time, asking for their itemized bill when their admitted to the hospital. This is clearly stated in the Regulations and the hospital or clinics cannot run away from it
2. The patient can ask for estimated cost of their treatment before a treatment is started. This is to allow patients to know the price before 'buying the product'.
3. The price of treatment must be the SAME if you are paying cash or under an insurance coverage. I know for a fact that lots of private medical centres out there are asking for higher price if a patient is covered by insurance. Almost all of these patients do not even ask 'why' is it more? There is no reason for more.
Know your rights as a patient!
Medical Act and Private Healthcare Facilities Act
I will start this page by illustrating a story. Imagine the following. "John deliberately murdered another person. He was caught and then brought to justice. John is only 19 years of age, come from a broken family and have been living on the streets since he was 6yrs old. In his defense, he told the judge that he didnt know that killing another person is a crime. Nobody told him that its a crime to murder. Would you think the judge will say 'you are now a freeman, since you don't know that killing another person is wrong'? Of course not!
You must be wondering why I illustrate the story above and what it has got to do with healthcare? The answer is this, many doctors are not aware the laws that are present governing them. Either these doctors are truly not aware or they are just bluntly ignorant. If a doctor do not know the laws governing their practice, then they will be like 'John' in the story above, a scenario that is not uncommon.
In Malaysia, practicing doctors are regulated by the Malaysian Medical Council (MMC). The power of the MMC come from the Medical Act 1971. The Medical Act regulates doctors' practices in the country, hence all doctors need to be familiar with the act.
The Medical Act has recently be amended, hence it is now quoted as Medical Act 1971 (Amended 2012). I will not describe the new things in the latest amended Medical Act, but this post is rather to let doctors know the existant of laws. At any moment in time, if a doctor breeches any part of the act, they can be strike out from the registry and will not be able to practice medicine.
Next if private healthcare facilities. Doctors practicing in the private sector will also need to realize that the Private Healthcare Facilities and Services Act (PHFA)1998 regulates all private healthcare providers in Malaysia. The regulation for the PHFA was enforced much later with regulations in 2006. The Private Healthcare Facilities and Services Regulations (PHFR) 2006 has 2 portion, one for private medical and dental clinics and another all other private healthcare facilities (eg medical centres, dialysis centres, ambulatory care centres, etc)
These 2 are the commonly used and essentially covers most doctors and hospitals in private medical practice.
Finally, doctors please 'know' the law before it is too late.
Those that wish to download a copy of the PHFA 1998, you can do so with this link
The Medical Act 1971 can be downloaded at the following link
Those that wish to download a copy of the PHFA 1998, you can do so with this link
The Medical Act 1971 can be downloaded at the following link
Thursday, March 21, 2013
A different passion - A humble beginning
Things has changed a lot for the past 2 years. For those of us that has follow my previous blog on 'Passion for Children', I have now move on. I have move on to a greater perspective and responsibility. My love for kids did not fade. Even though I do not have the chance to continue on my studies of paediatrics, I still treat them the same.
Working in a local public hospital in the Klang Valley for 2 years gave me a different idea about being a clinician. Clinicians seems hopeless in many ways. There are time when we do not know what is going on with our patients, there are times when we treat patient well, there are times when patient dies on us and there are also times when I meet ungrateful parents. It has reached a critical moment where I felt, there is no point treating kids whose parents are ungrateful. It will be better off the parents treat their own kids, or better still, get someone else to see them.
This is in great contrast when I served in a large hospital in East Malaysia for 6 years. Though work was from 7am to 7pm, it was very enjoyable. Patients become well, parents never stop saying 'thank you', boss is great, colleagues are helpful, and nurses are independent. When I first move back to the peninsular, I had culture shock. It appears that, Malaysians in Peninsular so much different than those in East Malaysia.
Anyway, putting those sad story behind. I have now move on to another level. I never looked back. I am at the position where I see the whole forest and not the trees. I see things in greater perspective and understand the whole system better.
2 years on, I now got my MBA, majoring in healthcare management. It was awesome 2 years. It allowed me to realise that doctors do 'not' no best after all. Those things and knowledge a clinician may know is just small part of a tree. A clinician hardly see thing in bigger picture.
I decided to write a new blog. This time much on current healthcare issues rather than clinical medicine. I hope my followers won't be bored. Who knows, many of us may like it as well.
Cheers
Subscribe to:
Posts (Atom)