Survey: Higher price covers less

Louisiana residents pay more and get less when it comes to health care, according to information compiled from national surveys.

Although Louisianans pay more out of pocket on insurance premiums, the quality care they receive is consistently ranked among the very worst in the country.

Experts contend this is caused by a myriad of problems ranging from poverty and lack of education, to an unhealthy populous and the fact that employers pay a relatively small percentage of health care premiums.

The state had the 15th highest average premium for a family of four in 2008, according to the Kaiser Family Foundation. The Commonwealth Fund, a private foundation working toward a high-performance health care system, meanwhile, ranked Louisiana as the third worst state overall in their State Scorecard on Health System Performance. Mississippi and Oklahoma were the only two states with a lower ranking.

Both organizations are non-partisan and aimed at improving health care performance and availability in the United States.

According to Robert Johannessen, the communications director of Louisiana Health Care Review, one of the reasons for the low rankings is the relatively poor health of Louisianans.

The LHCR is a federally funded group that aims to improve the quality of treatment seniors receive under Medicare.

“We’ll probably continue to rank low as long as we have a high poverty level and poor educational outcomes,” Johanessen said. “It’s very difficult to separate the health of our population from the fact that we are poor, compared to other states. Both have been linked to higher rates of obesity and smoking, which lead to heart disease and poor health.”

The Commonwealth Fund includes “healthy lives” as one of the four major metrics in its study. Louisiana ranked 46th.

According to Johanessen, an unhealthy population puts a greater strain on hospitals and can reduce the overall quality of care. However, Louisiana also scores poorly in the study’s other metrics. It ranked 37th in health care access, 45th in prevention and treatment and dead last in avoidable hospital uses and costs.

Jim Donelon, Louisiana’s commissioner of insurance, says that part of the problem is due to the high cost of insurance in relation to Louisiana’s income level.

“Consumers in Louisiana are paying the 15th (highest) rate, while they’re earning the 49th. This leaves a lot of people uninsured” or on Medicaid, he said.

“The other huge problem for Louisiana hospitals and insurers is the uninsured population. They’re showing up in ERs for treatment that is not paid for by anyone, and [hospitals] make that up in higher charges for those who come in with health insurance.”

This problem leads to “price shifting,” whereby other consumers end up paying for this care either in their health insurance premiums or through taxes. The problem is compounded by the fact that Medicaid and Medicare don’t reimburse health care providers for 100 percent of the cost, according to Donelon.

Another reason health care costs are high for consumers in Louisiana is that employers pay an average of 68 percent of health insurance expenses, which ties them for the ninth worst in the country, according to the Kaiser Foundation’s report. Indiana leads the nation in this category, with employees paying for 18 percent of their premiums, and 16 states have rates of 25 percent or less. Thus, more of Louisianans’ health care costs come out of their own pockets.

A lack of health insurance regulation, however, presents a bigger challenge for Donelon’s office.

“You will probably be surprised to learn this, but Louisiana does not regulate health insurance rates,” he said. “Competition, that’s the No. 1 – the only thing – under the law that I have available to me that allows me to address the cost, since we don’t regulate.”

Compounding the issue is the fact that Louisiana has become a less competitive state in health insurance. Donelon noted that the National Association of Insurance Commissioners recently completed a study on competition in state health insurance. Any state wherein the top two companies holds more than 70 percent of all policies was not considered competitive.

“We just went over that threshold,” he said. “We just fell into the non-competitive column.”

Both the state Department of Insurance and the Louisiana Health Care Review (LHCR) are working actively to improve the availability and quality of health care.

Johanessen’s organization focuses on clinical quality indicators and helps hospitals find ways to improve them.

One of the issues it is currently working on is readmission rates.

Although some readmissions are unavoidable, most can be prevented by making sure that patients are properly educated on how to take care of themselves once they leave the hospital and get a follow-up appointment with their general practitioner.

The LHCR recently started a program in Baton Rouge to reduce readmission rates through a program they call patient coaching.

“We’re having great success,” said Johanessen. “The preliminary numbers are from a small group, but after the first few months, 93 patients have been coached and we’ve had three readmissions.”

If the program continues to have this level of success, Johanessen said it could have nationwide implications. If implemented across the U.S., he predicts it would save Medicare alone about $12 billion.

The group has several projects in the state to improve the quality of health care. They are currently working with nursing homes to reduce the number of patients that are under restraints or suffer from pressure sores.

They’re also taking part in a nationwide initiative called the Surgical Care Improvement Program to reduce instances of post-surgical infection, and recently worked with the Department of Health and Hospitals to get federal funding to reduce infection rates in hospitals.

“Sometimes, it’s just that providers are not aware of what the current industry best practices are,” said Johanessen. “Many hospitals, big and small, don’t have the resources for quality improvement to do those things, so they rely on organizations like ours.”

Insurance Commissioner Donelon has also been working on ways to improve the quality of health care coverage in the state. He’s seen a dramatic reduction of consumer complaints.

“We now field more complaints from providers about insurers not complying with the prompt payment laws than we do from consumers complaining about their companies,” he said.

Donelon is also working to close a loophole that allows some doctors to opt out of a health insurance network that covers the rest of the hospital where they practice.

In-network hospitals have a negotiated discount rate of repayment with insurance companies. By keeping some of their most expensive doctors technically out of network, they can bill patients for 100 percent of the cost rather than the lower in-network rate. Donelon has had trouble getting the bill through the Legislature.

The state, through Donelon’s office, has instituted medical necessity review organizations, which mediate disputes between an insurance company and its customer to determine whether or not a procedure should be covered.

The idea was recently expanded to include experimental procedures and medicine, which Donelon said were the largest sources of complaints.

Even though Louisiana slipped from the 46th in 2007 to 49th this year in the Commonwealth Fund’s ranking, Johanessen believes that things are improving

“There’s a big emphasis on the part of the state and the Medicare program to improve quality. We are all pushing toward these projects that better coordinate care,” he said. “Within 12 months, we’re going to be seeing positive improvements. Will our residents be healthier? I don’t know, but they’ll certainly get better care from their providers.”