(Justin Sullivan/Getty Images)

Gov. Jerry Brown’s revised budget plan is a mixed bag for health advocates and some county officials.

Brown said the state would take the lead on a key provision of the federal health law — expanding Medi-Cal to more than one million Californians. Brown scrapped earlier plans to consider a more complicated, county-based system.

But Brown anticipates recouping more than $300 million from the counties next fiscal year – money that pays for public health programs and care for the uninsured. Brown’s rationale? With the full implementation of federal health reform next year, more people will enroll in Medi-Cal and fewer people will show up to county emergency rooms.

Farrah McDaid Ting with the California State Association of Counties says Brown’s proposal makes no sense. She says plenty of people will still rely on county services in 2014.

They are “people who qualify for Medi-Cal but don’t sign up, people who have a hard time signing up or staying on programs, the undocumented in our communities and those who are in between private health plans,” McDaid Ting said. “We need to retain enough funds to serve those people.”

That could be 3 to 4 million Californians who remain uninsured even after federal health reform is fully implemented, according to projections from UC Berkeley and UCLA. Brown and state health officials say they are developing a “mechanism” that will determine county savings based on real data.

Advocates fanned out across California Tuesday holding five statewide rallies, including one in front of state offices in Oakland, where they called for a rollback of cuts to adult dental care, children’s nutrition programs and other social services.         

“I think the most important number to remember is that one in four children in California are in poverty now,” Jamila Edwards Harris with the Children’s Defense Fund said. “And that number has only risen since budget cuts over the last five years.”

Brown’s budget also continues pending cuts to Medi-Cal providers, a plan that has been tied up in federal court since it passed in 2011.

By Jane Meredith Adams, EdSource Today

Students learn how to care for their teeth and receive preventive care at a dental clinic at James Madison Middle School in Oakland. (Photo/Alameda County Public Health Department)

As California educators grapple with boosting student achievement across economic lines, the teeth of poor children are holding them back.

Hundreds of thousands of children suffering from dental disease, some with teeth rotted to the gum line, are presenting California school districts with a widespread public health problem.

Increasingly, dental health advocates are looking to school districts to help solve the crisis. Innovative oral health care projects have been launched in school districts around the state that provide students with no-cost dental screening or treatment. Insurance companies are billed whenever possible.

Dental disease is at “epidemic” levels among California children, according to the U.S. Surgeon General, and low-income children are disproportionately affected. They are 12 times more likely to miss school because of dental problems than children from higher-income families.

But many districts lack the resources, or balk at being asked to provide dental care on top of a rigorous curriculum.

“It’s a great idea to bring universal prevention programs of all types, including dental, to schools,” said Kimberly Uyeda, director of student medical services for the Los Angeles Unified School District. “Whether there’s enough time in the day is another question.”

Lost revenue

Still, schools have a vested interest in helping solve the problem.

Dental problems keep California students out of school an estimated 874,000 days a year, costing schools about $29.7 million in lost attendance based-funding, according to the 2007 California Health Interview Survey, conducted by researchers at UCLA.

Advocates say the dental health crisis is exacerbated by the failure of Medi-Cal’s dental program, called Denti-Cal, to adequately serve low-income children, lack of funding for a state school-based dental disease prevention program for low-income children, and the lack of money to enforce existing state laws requiring oral screenings and preventive care for school children.

School-based dental clinics can play a large part in the solution, given the holes in the state’s safety net. One model is to house dental care inside a school-based medical clinic. Some 61 school-based health clinics, out of about 200 in California, offer dental screening or treatment.

Outside of a school setting, finding a dentist who accepts Denti-Cal is a significant obstacle for low-income children. California’s reimbursement rates to Denti-Cal dentists are among the lowest in the nation, according to a recent report by The Children’s Partnership.

The numbers of low-income children who need care are expected to increase when the Affordable Care Act — including its Medi-Cal expansion — is fully implemented. Come January 1, nearly half of California’s children will be Denti-Cal patients, according to The Children’s Partnership report.

The implications are clear, advocates say. “You’ve got to bring the services to the children,” said Roseann Mulligan, with the USC School of Dentistry and one of the authors of the study regarding oral health and student achievement.

Reaching students

A number of districts are doing just that. Some of the dental services are financially self-sustaining through billing to insurers, while others rely on grants and partnerships. The goal is for all clinics to become self-sustaining.

Two days a week, inside the sleek new student health center housed at James Madison Middle School in Oakland, students spend about 50 minutes during physical education class period or the “sixth period” extra time in a baby-blue dental chair. A hygienist screens students for tooth decay, cleans teeth, and applies fluoride varnish and sealants. The clinic, which doesn’t provide fillings or other restorative dentistry, accepts dental insurance and Denti-Cal, and provides free service to the uninsured. Services are funded by the Alameda County Public Health Department and The Atlantic Philanthropies.

Another model is a mobile dental clinic. In the San Diego Unified School District, the La Maestra Mobile Health Clinic, which includes dental services, began operating in fall 2012 to provide fillings and restorative dentistry to students at the Hoover Cluster of schools: 10 elementary schools, two middle schools, and one high school in the City Heights neighborhood, an area of high need.

“What we are trying to do is make it a positive experience,” said Dorothy Zirkle, a consultant for Price Charities, a nonprofit dedicated to improving the quality of life for children in City Heights. “Our kids have a high need for multiple fillings. We need to build trust.”

All services are no-cost, with providers seeking reimbursement from insurers when possible. Among the organizations funding the facilities and services at the mobile dental clinic are La Maestra Community Health Centers, private foundations including the City Heights Partnership for Children, and the Health Resources and Services Administration of the U.S. Department of Health and Human Services.

A third model is a partnership with a nearby dental college to offer expanded services for students. In the El Monte City School District, students receive comprehensive dental care at two dental clinics housed in elementary schools, as well as from a mobile dental unit.

Advocates say these programs and others like them are key to helping solve the dental health crisis facing California students.

Data that show the connection between oral health and student achievement will help persuade districts to support school-based dental care, said Maryjane Puffer, executive director of the Los Angeles Trust for Children’s Health, a nonprofit founded to serve students in LA Unified.

“School districts are eager to find a way to help kids stay in school and achieve,” she said.

Learn more:

California’s Most Common Childhood Health Problem? Dental Disease (KQED Public Radio)

(Centers for Disease Control)

Nearly one in four children ages birth to 17 live in families that are struggling to pay medical bills, according to CDC data from the National Health Interview Survey, from January – June, 2011.

Here are more findings. In the first six months of 2011:

• one in three persons was in a family experiencing financial burden of medical care
• one in 5 persons was in a family having problems paying medical bills
• one in 4 persons was in a family paying medical bills over time
• one in 10 persons was in a family that had medical bills they were unable to pay at all

The CDC has more sobering charts here.

(401(k)2012/Flickr)

Now the actuaries are weighing in.

In a new analysis, the Society of Actuaries says insurance companies will pay an average 32 percent more for medical claims under the health care overhaul.

That means premiums could go up, especially in the individual market.

The Obama Administration isn’t convinced, though, saying the report didn’t consider all the ways in which the administration says the Affordable Care Act will reduce costs.

More from the AP:

Actuaries are financial risk professionals who conduct long-range cost estimates for pension plans, insurance companies and government programs.

The study says claims costs will go up largely because sicker people will join the insurance pool. That’s because the law forbids insurers from turning down those with pre-existing medical problems, effective Jan. 1. Everyone gets sick sooner or later, but sicker people also use more health care services.

“Claims cost is the most important driver of health care premiums,” said Kristi Bohn, an actuary who worked on the study. Spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program, said the report.

The Obama administration challenged the design of the study, saying it focused only on one piece of the puzzle and ignored cost relief strategies in the law, such as tax credits to help people afford premiums and special payments to insurers who attract an outsize share of the sick.

The study also doesn’t take into account the potential price-cutting effect of competition in new state insurance markets that will go live Oct. 1, administration officials said.

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

Sebelius said the picture on premiums won’t start coming into focus until insurers submit their bids. Those results may not be publicly known until late summer. …

A prominent national expert, recently retired Medicare chief actuary Rick Foster, said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.”

“Having said that,” Foster added, “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.” Actuaries use statistics and economic theory to make long-range cost projections for insurance and pension programs sponsored by businesses and government. The society is headquartered near Chicago.

Michael Kelly, attorney for plaintiff Loren Kransky, holds up an ASR XL hip implant made by Johnson & Johnson during his opening statement to the jury at the trial of Kransky v. DePuy, at California Superior Court in Los Angeles, on Friday, Jan. 25, 2013. (Credit: Patrick T. Fallon/Bloomberg)

In recent weeks, a jury in Los Angeles Superior Court has been diving deep into the world of artificial hips. They’re hearing the case of a Montana man whose hip implant went bad –- but they’re also laying the legal groundwork for what’s expected to be a massive settlement between the maker of the hip and more than 10,000 Americans.

De Puy, a subsidiary of Johnson and Johnson, stands accused of producing a defective design, failing to warn doctors and patients when word first came trickling back the hip was failing at high rates, and then moving too slowly to recall the product.

The ASR hip went to market in Europe in 2003; in the US, in 2005. Within a year or two of when it was first sold in Europe, concerns about the ASR began filtering back to J&J through surgeons. Patients complained of pain. The device would work its way loose in the hip.

In 2008, a committee was established to determine whether to redesign the ASR. “That was called Project Alpha,” says Bloomberg News reporter David Voreacos, who spoke with me this week on the California Report. “The company scrapped it.” The committee, that is. Not the hip.

That wouldn’t happen until August of 2010, after UK data showed more than 12 percent failed within five years. But by 2010, some 93,000 people worldwide had been implanted with a version of this artificial hip, 37,000 of them in the US.

The world’s largest seller of health-care products has revealed the Justice Department is investigating possible false claims related to the hip devices.

In the meantime, 10,000 lawsuits have been consolidated into pending class action suits in Toledo, San Francisco and Los Angeles.

Loren Kransky’s case is the first to go to trial. He’s a retired prison guard who got an ASR XL hip implant in 2007. In 2012, after his doctor noticed it was shedding metal ions into his blood stream, Kransky had the device removed and replaced.

“The ASR XL was dangerous and it was defective in design and we will prove it,” Kransky’s lawyer, Michael Kelly, said in his opening statement last month.

“It was seen as a revolutionary device,” says Voreacos. “Patients were told it would last 20 years.” Since most models last about 15 years, the device was particularly attractive to young patients hoping to regain mobility lost from conditions like arthritis or lupus.

Then there’s the issue of toxicity. It turns out the ASR also has a tendency to leach cobalt and chromium ions into the bloodstream.

“It’s sort of a long term question, the health effect of those ions.” Voreacos says.

Reporter Barry Meier of the New York Times is more blunt. In a recent article, he wrote, “Tiny particles of metallic debris released as the artificial joints move have caused severe tissue and bone damage in hundreds of patients, leaving some of them disabled.”

Even if a person isn’t left disabled, a hip implant surgery requires removing bone. So if the device  fails to take, or the ion issue prompts a person to want to get rid of the ASR, replacing the hip can be a painful business. The more surgeries, the more bone material is removed from the joint. Most artificial hip recipients speak glowingly of the mobility they’ve regained, but it’s fair to say the fewer the number of surgeries in a lifetime, the better.

Prosecutors in Los Angeles Superior Court point to another data set coming from Australia that suggested the ASR would fail in 44 percent of patients within seven years – eight times the failure rate of most orthopedic implants.

You might be thinking this is just the kind of situation pre-market clinical studies are designed to forestall. You’d be right, but federal rules do not require it for all medical devices. Only now is the Food and Drug Administration proposing that makers of artificial hips with all-metal components prove the devices are safe and effective before they continue selling existing ones or get approval for new all-metal designs.

Currently, companies have to show only that their devices resemble ones already on the market. Over the years, the FDA repeatedly started the process required to classify all-metal hips as  high-risk products rather than moderate-risk ones, but federal officials never crossed the goal line — in part due to heavy lobbying from industry.

The FDA is reportedly moving now to close that loophole in the Medical Device Amendments of 1976.

In the meantime, the use of all-metal implants has plummeted, with the devices now accounting for about five percent of hip implants. But as Voreacos notes, evidence presented in the Kransky trial suggests all all-metal hips are not alike. The ASR failure rate is the highest of any hip implant, in any class.

So that’s one compelling back story to the story of the ASR hip. The other one is the apparent complicity of consulting hip specialists. Surgeons developed the design, including one at UCSF and another in Los Angeles who is the Joint Replacement Section Editor for Orthopedics Today. One presumes medical devices are best developed by the top names in any given field, and naturally, they should receive royalties on those devices. But that creates a structural incentive to downplay reports of problematic outcomes from other surgeons in the field.

DePuy denies all the claims pending in Los Angeles — and it also argues Kransky’s claims are particularly suspect. Hip or no hip, he’s struggled with a laundry list of health problems, including diabetes, coronary artery disease, high blood pressure, kidney disease, strokes and cancer. That may affect the strength of this case as a precedent setter.

A couple more cases are headed to trial, including one in Chicago and one in Toledo. Lawyers are both sides are expected to use what happens in these first three trials to set parameters for settlements.

In any case, a new development just out today does not bode well for Johnson & Johnson.

The FDA has notified healthcare professionals of a Class I recall, the most serious type, of another orthopedic device made by Johnson & Johnson: the LPS Diaphyseal Sleeve, used in reconstructive knee surgery. It was recalled because of the potential for fractures, the FDA said.

“The FDA has received a total of 10 reports (6 fractures and 4 reports of loosening that may or may not be attributed to the same device design issue) of incidents in which the device has malfunctioned.”

And further, this:

“A fracture in the sleeve at the joint of it could lead to loss of function or loss of limb, infection, compromised soft tissue or death.”

(Illustration by Kaiser Health News from photo by Walmart via Flickr)

By Julie Appleby, Kaiser Health News

Perched by a computer monitor wedged between shelves of cough drops and the pharmacy in a bustling Walmart in Sterling, Va., Mohamed Khader taps out answers to questions such as how often he eats vegetables, whether anyone in his family has diabetes and his age. He tests his eyesight, weighs himself and checks his blood pressure as a middle-aged couple watches at the blue-and-white SoloHealth station advertising “free health screenings.”

“You may not go to the doctor every year, but you come to Walmart often,” says the fit-looking 43-year-old Khader who lives in nearby Ashburn, Va. “I get bored while my wife is shopping. This is a time killer. I’ll come back in two months or so, and track my results.”

A burgeoning consumer health industry is betting that millions of consumers will do just that.

As Americans gain coverage under the federal health law, putting increased demand on primary care doctors and spurring interest in cheaper, more convenient care, unmanned kiosks like these may be part of what their manufacturer bills as a “self-service healthcare revolution.”

The SoloHealth Station gives consumers free and convenient access to health care by allowing them to screen their vision, blood pressure, weight, and body mass index (BMI) — or any combination of the four — in seven minutes or less for free according to the manufacturer.

Walmart’s interest is especially significant, given the giant retailer’s reach, the growth of its pharmacies and retail medical clinics and a top official’s recent statements  – before being walked back by the company — outlining plans for a push into primary care. SoloHealth’ stations are slated to be in 2,500 Walmarts and Sam’s Clubs starting next month.

Some doctors’ groups and consumer advocates urge caution, raising concerns about how companies might use personal health data, the quality of their medical information and whether advertisers and other sponsors might shape their advice and referrals for commercial reasons.

“There is a trend in general by retailers and health insurers to provide ‘fluff’ to consumers in the guise of real medical information as an advertising delivery device,” says Carmen Balber of the left leaning advocacy group Consumer Watchdog.

Bringing Exam Rooms To Patients

Self-serve computer stations are also eyed as a way to help consumers figure out whether they need medications for conditions such as high cholesterol, under a proposal now before the FDA to make some prescription medications over the counter. “It is clear there are now many interactive mechanisms that can step the consumer through the process of self-diagnosis and medication selection,” said Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research at a public hearing last March. The proposal is still under review.

Rival firms are marketing similar technologies. HealthSpot, based in Ohio, has enclosed cubicles that allow patients to pay $59 to $79 for a video “visit” with a doctor. NowClinic online, a subsidiary of UnitedHealth Group, provides 10-minute video chats with physicians for $45.

Technology “has become a new arm of the health care delivery system,” says Jay Sanders, CEO of The Global Telemedicine Group, a consulting firm. “You need to bring the exam room to where the patient is, not where the doctor is.”

‘Treading A Fine Line’

SoloHealth’s founder and CEO Bart Foster saw larger possibilities for automated screening after he began providing Walmart with self-service vision tests as a way to get shoppers from the product aisles to Walmart’s optical shops.

In 2010, the firm got a $1.2 million grant from the National Institutes of Health to develop new approaches to screening for people in underserved communities. It has also received more than $43 million in investments from computer maker Dell Corp., health insurer WellPoint and Coinstar, maker of the Red Box DVD rental boxes, he says.

Today, SoloHealth’s kiosks, which are not connected to a live physician, allow consumers not just to test their eyesight and learn if they are obese, but to get information on diet, vitamins and pain management. A “find a doctor” function can direct users to nearby doctors, although the one in Sterling, Va., listed only “optical doctors” – and those appeared mainly to be Walmart-affiliated.

Foster says SoloHealth has received lists of doctors from sponsors, including Walmart, and also allows doctors to buy a listing. SoloHealth does not do any independent review of doctors’ credentials. About 20 to 30 doctors are typically offered.

Among its programs is one that advises those suffering symptoms of heartburn whether it may indeed be heartburn and which over-the-counter product might be useful, says Stephen Kendig, the firm’s chief commercial officer.

“We’re treading a fine line,” Foster says. “We don’t want to practice medicine, just educate people.”

But such programs raise a red flag for some consumer advocates who worry the “advice” might be an advertisement.

The SoloHealth station in Sterling, Va., for example, runs a video for Healthy Choice yogurt while the blood pressure device inflates. Ads for Nature Made fish oil supplements or Healthy Choice frozen meals appear when consumers respond yes to a written question asking if they want more information about a healthy lifestyle. Others appear for allergy drug Zyrtec and heartburn medication Prilosec.

The ads, which can be targeted to particular consumers based on their answers, are SoloHealth’s revenue model. “Reach customers when they are aisles, not miles, away,” the firm’s message to advertisers on its website says.

Users who enter their email addresses – and about 18 percent do – will receive test results, along with information that might include “ask your doctor about this drug” or “pick up some Advil on aisle four,” says Foster. Despite those efforts, every one of the five people who used the kiosk in the space of about an hour, including Khader, said they did not notice the advertising.

Privacy Risk?

Consumers Union Senior Attorney Mark Savage says it’s a good thing to get people more engaged in their health, but he says the new technology carries potential risks.

“You have a situation where a patient is voluntarily disclosing information, which means there is no privacy protection, generally,” Savage says.  ”They may not know if the information is being kept and might be used weeks or years after.”

Solohealth’s Kendig says the firm is not considered a covered entity under HIPAA, the Health Insurance Portability and Accountability Act of 1996, meaning it is not required to meet the law’s privacy standards.

Among other changes, Scripps Health streamlined its ER admission process, slashing wait times and saving $29 million. (Taber Andrew Bain/Flickr)

A hundred managers at Scripps Health jam shoulder-to-shoulder into a break room in San Diego. CEO Chris Van Gorder goes at them like a football coach down by 3 at halftime.

“What are we trying to do in our health care system?”

“Reduce costs!”

“Why?”

“Health care is too expensive.”

“The solution is going to come from Washington D.C., right?”

“Sacramento then, right?”

“Ha.”

“The solution,” says Van Gorder, pumping an index figure toward his team, “is going to come from right here.”

Van Gorder, an ex-cop turned hospital executive, rescued troubled Scripps from near insolvency a dozen years ago as its new CEO. Now, he’s put Scripps in the middle of a cultural transformation aimed at saving hundreds of millions of dollars a year by – get this – coaxing physicians and managers at Scripps to work together, and standardizing care across every hospital in the system.

Just this week, we’ve seen how lack of standardization leads to a nearly-inexplicable price range of $11,000 to $125,000 for a standard hip replacement across the country.

Price variation among hospitals within the same system is even harder to explain. At Scripps, there was a cost difference of $6,000 between two Scripps hospitals performing the same cardiac procedures, using the same protocol, even with the same surgeon.

And that’s standard: Most health care systems still manage each hospital or clinic as its own silo – each with different management, operations and clinical procedures.

Van Gorder, 60, tells his staff that major change is inevitable. Political leaders, employers and patients themselves are fed up with health care costs. Given federal budget deficits and the calls for entitlement reform, Medicare margins will continue to be under pressure. Politicians fearing a backlash from cutting benefits to consumers will take aim at hospitals and other providers. The Advisory Board Company predicts the typical hospital will see its margins collapse by as much as 20 percent over the next 10 years as reimbursements drop.

“Hospitals that can’t find a way to deliver their product less expensively and with better quality are going to go out of business,” Van Gorder says. “It’s as simple as that.”

The $6,000 Cost Difference

Consider the $6,000 cost difference for the cardiac valve and coronary artery bypass graft procedures. No one paid attention to it, because there was no incentive to do so. When a cross-system team dissected hospital-to-hospital variations in 2010, they found that the Scripps Memorial Hospital in La Jolla required that nitric oxide be administered to the patient, ostensibly to boost oxygen intake in the blood.

Fourteen miles away, at Mercy Hospital in downtown San Diego, such patients received no nitric oxide. A look at the data showed the outcomes were the same. Today, a doctor at any hospital in the Scripps system can still order up nitric oxide, but it’s no longer required. Savings: $400,000 per year.

Some of the other savings that netted $150 million in the first year:

• The ER: Once, the wait could be as long as eight hours. Now, it averages 30 minutes. Scripps requires doctors and nurses to see patients at the same time, early in the process, instead of forcing them through a gauntlet of information-takers, where they’d repeat the same complaints over and over. Fewer handoffs mean better communications, fewer errors and more patients seen for a $29 million revenue boost.
• Radiology: For imaging tests, each hospital stocked its radiologist’s own favorite contrast agents – the iodine, barium, gadolinium and other chemicals used to highlight structures and fluids in a patient’s body. After doctors agreed to use a few brands, volume discounts saved $1.5 million a year.
• Surgery: OneScripps focused on three cardiac surgeons at one hospital and studied their work habits for needless variation. Voluntary best-practice protocols were established which have decreased length of hospital stay by almost a day and saved the system $3.6 million a year.

A Story With Twists And Turns

Van Gorder’s campaign has not been without challenges. Historically, doctors have felt threatened by changes imposed from outside the profession, which they fear will undermine their autonomy and income. “You can’t force feed doctors,” says Brent Eastman, recently retired chief of medicine at Scripps, now president-elect of the American College of Surgeons.

Sensitive to this culture, Van Gorder created what he called a Physician Leadership Cabinet “to share the responsibility of running this company together.” The board includes the medical staff and physician members elected by their peers because “We don’t want ‘yes people’ sitting on the group.” The key to cooperation, says Van Gorder, is transparency – sharing all information.

Early on he was tested. The doctors demanded $4 million to pay for on-call doctors for the emergency rooms. Van Gorder said he couldn’t afford it, and laid out the numbers. The doctors cut the demand in half.

Van Gorder trusts that sharing financial information, especially on costs, along with data on treatment and outcomes, will usually lead doctors to the best-outcome-at-lowest-cost decisions.

So far, that strategy has inspired buy-in. “Probably only once every hundred years will there be a generation that can truly change the way health care is delivered,” says Eastman, the physician. “We are that generation.”

California’s insurance marketplace, Covered California, will open in October, 2013. People will be able to buy insurance, which will take effect January 1, 2014.

Calling today a “game changer for California and a game changer for the nation,” Peter Lee, executive director of Covered California, the state’s marketplace for health insurance, announced benefit plans that will be featured in the exchange.

He also unveiled its updated website (in English and Spanish) where consumers can access what is sure to be a very popular premium calculator. People with incomes up to 400 percent of poverty are eligible for subsidies from the federal government to help purchase insurance. The calculator gives an estimate of what you will pay after the subsidy.

An estimated 2.6 million Californians are expected to qualify for the subsidy. People who receive Medi-Cal or employer-based health insurance are not eligible and will continue to receive health insurance through their current plans.

As called for in the Affordable Care Act, there will be four tiers of coverage: platinum, gold, silver and bronze. The platinum plan will cover 90 percent of health care costs and have the highest premium. The gold plan will cover 80 percent; the silver 70 percent.

The bronze plan will have the lowest premium and cover 60 percent of costs, “meaning a consumer would pay 40 percent out of pocket,” said Ken Wood, senior advisor for Covered California. “That’s really a catastrophic plan that’s designed to protect someone from financial collapse if they had a severe illness. … So we are defining benefits across a wide range of richness and design and thus affordability.”

In other words, pay a higher premium and more of your health care costs will be covered.

California goes beyond federal requirements by detailing what deductibles and co-pays consumers may be charged. Platinum and gold plans will have no deductible, and a doctor’s office visit will be $25 (platinum) or $45 (gold). From there, silver plans will have $2,000 deductibles, a $45 doctor’s office visit co-pay and an additional $500 deductible for medications. (See chart at end of post for more detail on deductibles and co-pays.)

While Wednesday’s announcement detailed many aspects of costs, the premium prices are still estimated and will not be finalized until June.

These standardized deductibles and co-pays are rules which apply to plans sold in the exchange. While health insurers may still offer plans of other designs outside the exchange, consumers who qualify for the subsidy must purchase their plan on the exchange.

“The HR department for the rest of us”
Calling these announcements a “bold, big step forward,” Anthony Wright, executive director of the advocacy group Health Access said, “Consumers will get good and simple information about what the plan covers, and what it doesn’t. It will remove the guesswork so many consumers go through trying to figure out the differences between plans. … For individuals and families who don’t work for large employers with significant purchasing power, Covered California will serve as the HR department for the rest of us.”

Consumers can calculate their subsidies, but they should be sure to read the disclaimers — especially noting that the subsidy is based on the “silver” tier of coverage.

Patrick Johnston, president of the California Association of Health Plans sounded a cautionary note, saying that the standardization of plans may reduce confusion, but might also increase premiums, then pointed to some of the requirements of the Affordable Care Act not addressed in Wednesday’s news.

“New taxes, limits on geography-based pricing and age rating restrictions are all part of the Affordable Care Act that will drive up the cost of coverage for millions of consumers and employers,” Johnston said. “We will see in the coming months whether the standardized benefit designs adversely impact premiums or not.”

The benefit plans also feature out-of-pocket maximums: $6,400 for individuals and $12,800 for a family. In other words, if you get very sick or injured, that is the maximum amount you will have to pay outside of your premium.

“That’s a lot of money, let’s face it,” said Ken Wood. “But when people can have hospital bills at $500,000 or $1,000,000, can find they’re in a bankruptcy situation because of that type of tragedy, having their exposure limited to $12,000 is a bit is a breakthrough.”

(Chart: Covered California)

Editor’s Note: This post has been updated to reflect that the CaliforniaCovered website includes a calculator for insurance costs, not the subsidy from the federal government.

X-ray showing a new artificial hip. No, I don’t know how much the patient paid for it. (okadots/Flickr)

If you want to buy a new car, you can probably figure out a price range within a matter of minutes with a google search. The same is true for many other products. But in health care, forget it.

In a new study published today in JAMA Internal Medicine, researchers called more than 100 hospitals across the country. They included a range of both top-ranked centers and community hospitals and inquired about a common elective surgical procedure — a hip replacement — for a fictitious 62-year-old grandmother.

First off, only 10 percent of the non-top-ranked hospitals and 45 percent of the top-ranked hospitals were even able to provide a price. Researchers were a bit more successful when they called the hospital and physician separately.

And just what was the price range? $11,100 on the low end to $125,000 on the high end.

“Patients seeking elective (hip replacement) may find considerable price savings through comparison shopping,” the authors write. No kidding — except that half of the institutions couldn’t even provide a price.

Americans hear over and over that they must be better consumers of health care, but it’s pretty tough when information can be so hard to get or difficult to interpret. Maybe you can get crash data on that new car you want to buy, but it can be tougher to get information about quality for a health care procedure than it is to get a price.

“Without quality data to accompany price data, physicians, consumers, and other health care decision makers have no idea if a lower price represents shoddy quality or if it constitutes good value,” say medical ethicist Ezekiel Emanuel and Andrew Steinmetz in an accompanying commentary they co-wrote. “And, since patients are reluctant to cut corners when it comes to their health and the health of their family members, they are liable to falsely assume — as they do in other markets — that higher prices correlate with higher quality.”

Emanuel opens his commentary with a brief history of trying to buy a car in the 1950s, how buyers were completely at the mercy of dealers, that little quality data was available. It took an act of Congress in 1958 to force car dealers to display the now-ubiquitous MSRP to the window of every new car for sale.

“The history of the automobile industry shows that information asymmetry is treatable,” Ezekial and Steinmetz conclude. “Health care will need to travel down a similar path. It is time we stop forcing people to buy health care services blindfolded — and then blame them for not seeing.”

We’re still in the infancy of transparency of cost and quality information. Sites like ClearHealthCosts have pricing information on a number of common procedures. CalPERS — the California Public Employees Retirement System — looked at its own claims for knee and hip replacement. It, too, found a range of $15,000 to $110,000. In 2011 CalPERS set a threshhold price of $30,000 for a hip or knee replacement. A CalPERS spokesperson says they made sure its approved facilities met a quality standard.

We have a long way to go. In the meantime, caveat emptor.

The Kaiser Permanente clinic in Granada Hills, CA was severely damaged in the 1994 Northridge earthquake. (Photo/NOAA)

In early 2011, federal and state officials asked 200 Southern California hospitals to provide information about their ability to survive a catastrophic earthquake along the southern San Andreas Fault.

Among other things, the hospitals were asked how many back-up generators they had on hand, what fuel they use and whether their water tanks could survive a major quake long predicted for one of the nation’s most dangerous faults.

The survey was aimed at speeding post-earthquake recovery efforts, such as rushing backup power generators, fuel and water to damaged hospitals struggling to care for patients. The concept was approved by the Federal Emergency Management Agency (FEMA), which would coordinate the federal response to such a disaster.

But nearly two years later, almost half of the hospitals still have not responded, leaving some disaster officials frustrated over their inability to help the hospitals plan for the worst.

The unsuccessful effort casts a harsh light on the potential pitfalls of forging public-private partnerships among health care facilities to plan for earthquakes, floods and other natural disasters.

One national emergency expert, Dr. Arthur L. Kellermann, said he finds the poor response inexplicable.

“This is FEMA, for God’s sake, and federal agencies that are charged with helping hospitals in emergency events,” said Kellermann, a policy analyst at the RAND Corp.

“These hospitals are getting hundreds of millions –- maybe billions –- of dollars from Medicare and Medicaid every year, and they can’t fill out a questionnaire of interest to the country and Southern California? I find that deeply disturbing,” he said.

Disaster preparedness is taking on new urgency after the ravages of this fall’s Hurricane Sandy. Backup power generators failed at several New York City area hospital and endangered patients’ lives, especially those on ventilators and other machines.

The vulnerability of those hospitals has revived concern about experts’ predictions that more than 60 percent of Los Angeles area hospitals would be damaged beyond repair in a major quake.

That specter led to the 2011 survey, called the Southern California Catastrophic Earthquake Plan Survey, which local emergency agencies sent to hospitals early in early 2011, some with an April 30, 2011, deadline.

The largest group of hospitals declining to participate was Kaiser Permanente of Southern California. A spokeswoman would say only that Kaiser had concerns about “the format and the amount of details being asked for in this optional questionnaire.”

Among hospital groups that did cooperate were Dignity Health (formerly Catholic Healthcare West), three Providence hospitals in the San Fernando Valley and UCLA Medical Center.

Leaders of the California Hospital Association, the state’s hospital industry group, were troubled that they was not involved at the start, and that the survey was issued outside “normal communications channels,” said spokeswoman Jan Emerson-Shea. Her group later worked with surveyors to review and refine the questions, she said.

Some local emergency officials, however, said the association’s uneasiness with the survey had an effect. “They were watching over their members, but it ended up throwing a big wrench into the process,” said Jerry Nevarez, hospital preparedness coordinator at the Inland Counties Emergency Medical Services Agency in San Bernardino.

Now, new talks have begun with the hospital association and state and local officials over fashioning an earthquake survey that would go to hospitals statewide in 2013.

Spurring the survey was a landmark 2008 report called “The Shakeout Scenario,” produced by 300 top-level government, academic and industry experts which scrutinized what damage would be inflicted by a 7.8-magnitude quake near the Salton Sea on the southern San Andreas Fault.

The impact would spread to nine counties, killing 1,800 people, forcing 50,000 injured to emergency rooms and ripping apart freeways and power lines, the report predicted.

“When you have all counties impacted at the same time to the same level, it takes the government to make sure they get what they need to keep going,” said Gerold Fenner, regional emergency coordinator in San Francisco for the U.S. Department of Health and Human Services’ preparedness and response branch. Fenner recently returned from working on the federal response to Sandy.

For instance, FEMA has a cache of emergency back-up generators that could be air-lifted to a beleaguered hospital stranded without power, Fenner said. If his agency has that hospital’s information filed away, FEMA could help federal authorities deliver the generator more quickly, he said.

Federal officials have collected that sort of information in other states, including hurricane-prone states in the South, he said.

At RAND, Kellermann said that state and national policy makers may need to review whether such surveys should be made mandatory.

“The whole point of these surveys is not to make hospitals look bad. It’s to help them systematically figure out how to get better,” he said.

Learn more:

Major Quake Could Sideline 60 percent of SoCal Hospitals (CHCF Center for Health Reporting)