The Daily Signal - Health Insurance Can Raise Prices of Care, Two Doctors Say

Episode Date: August 20, 2024

Health care can be more affordable when doctors don't take health insurance, two doctors say. Dr. Josh Umbehr and Dr. Jules Madrigal joined "The Daily Signal Podcast" to discuss health care reform opportunities that give patients control over their experience. Enjoy! Learn more about your ad choices. Visit megaphone.fm/adchoices

It's week three of Canadian tires early Black Friday sales. These prices won't go lower this year. Maybe too long. Freezing. Save up to 50% November 20th to 27th. Conditions apply, details online. This is the Daily Signal podcast for Tuesday, August 20th. I'm Elizabeth Mitchell.

I sat down with two doctors about their free market solutions to the health care system. Stay tuned for my conversation with Dr. Josh Umber and Dr. Jules Madrigal after this. This is Rob Lewy from The Daily Signal. In today's media landscape, it's more important than ever to have a trusted source of news and conservative commentary. That's why we are asking for your support. Your donation helps us continue our mission of delivering accurate, factual reporting on the issues that matter most to you. Whether it's $5 or $500, every contribution makes a difference. Visit dailysignal.com slash donate to help us keep Americans informed and fight for conservative values.

The Daily Signal is your voice for the truth. I'm here with Dr. Josh Umber and Dr. Jules Madrigal, two doctors with Stand Together, who are here in D.C. this week to urge Congress to reform the health care system. Thank you so much for joining us today. Thanks for having us. Yes, indeed. Could you tell me a little bit about the work of Stand Together? Stand Together is an excellent organization that in particular is bringing us here to talk about health care reform opportunities, ways that. that we can improve the access, affordability, and equity for health care in an approach to support the personal option that will give patients a lot more control over their health care experience, their spending.

And just giving patients the freedom to pick what they want, to get doctors they want, and to have a real relationship with the doctor and the patient together. Awesome. And why are you here in Washington, D.C. today? Well, I think there's a lot of legislators and staffers who find that health care is a bit of a black box, and there's so many different approaches to it. And none of them seem to make a huge impact, and it continually leads to more complicated answers of insurance and regulation in red tape. And as practicing physicians, what we want to really deliver is the message that health care can be much more affordable. and it's actually designed by subtraction, the simpler we make it, the better it becomes, and that there's a lot of untapped potential for using the free market to maximize patient affordability

in a lot of really simple but really impactful ways. What are some of those ways? Just letting patients make their own choices. Neither Josh nor I take insurance. We are out of that system altogether. We're out of Medicare and Medicaid. So we really want there to be a way where patients can get access. So both of us are really affordable.

Both of us are very open. And we just want there to be more doctors who are able to do what we're doing. And we're afraid with more legislation and more red tape, it makes it much harder for doctors like us to practice. In the same way, we don't have car insurance for gasoline or homeowners insurance for lawn care or life insurance for groceries. I think using health insurance for everything, family medicine or primary care related is overkill. We need to make health care more affordable

in the first place so that we don't need to insure those things. And when doctors like us pull away from insurance, you start to find new business models, new solutions. Both of us either can charge fee for service, so whatever the patient needs at the time they need it, or a membership model, like a gym or like Netflix, so that you have a broad range of access and affordability. But then you can apply new things like wholesale meds or wholesale labs to get medication prices 95% lower. That impact alone could decrease insurance premiums by up to 30%. So when patients see that there's new ways of getting the care that they're used to, but more cost-effectively, they really respond quite positively.

And those models end with patients paying less than they would if they paid with traditional insurance? Absolutely. Yeah. Absolutely. I often, I say I blame physicians more than I blame health insurance companies, in part because we're at the bedside, where the gatekeepers of care. And insurance is just a payment model.

So they cannot lower the price of premiums until doctors are lowering the cost of what they're providing. So when doctors come and say, okay, I'm going to streamline my office so I have less paperwork, less insurance, less staff, when I can eliminate co-pays or make procedures free or make medications in labs 95% less, now you can make. really big inroads into the affordability of insurance. Then small businesses or individuals can adjust their insurance down without feeling that they have a lot more risk.

So it's teaching them how to spend 50 to save 500. And it lets doctors be more innovative. We can come up with new ways for people to save money. We can come up with cheaper ways for them to take care of themselves. And it gives us a lot more options and a lot more freedom. And we can pass that along to the patient. We can also spend a lot more time with our patients. We're not regulated by having to see a certain number to get a certain amount of money.

We can actually see people for up to an hour or longer sometimes if we need to. Wow, that's really interesting, really different than the health care. A lot of us are used to, probably. And have you gotten any members of Congress to champion your recommendations and try to pass those into law? I think there's a number of great initiatives in place right now, and a number of lawmakers who are really resonating well with this to say either, improve the personal option, strengthen HSAs, decouple those from high deductible health insurance plans, but also just increase awareness. Some of this doesn't require specific legislature,

but it does require awareness. And then other pieces like the HSA do require that where we can help employers, we can help Medicare, we can help Medicaid if they understood how to use the free market really well to improve access and decrease cost. Yes, Lenny more people. people have the HSA, making that more available, gives people a lot more options on how to spend their health care dollars. And if insurance premiums go down, then patients have a lot more disposable income to actually put into HSAs. And I think that's kind of the cart before the horse right now is insurance premiums keep going

up, and it's harder for families to afford that and put money away for future expenses. So we solve both problems at the same time by decreasing insurance premiums and opening up savings opportunities, but then also we increase the buying power of those HSA dollars. When families understand an MRI might be 3,000, they're less inclined to try really hard to save in an HSA because they might feel like it goes away in one swoop. But when they understand through the free market that an MRI can be $300, well, now it seems like, okay, if I save, I can spend on health care but still have money left over. I'm not just going to lose it in one swing.

that makes them a lot more comfortable with the idea of not having health insurance cover everything. It's a nice mix of, like car insurance, cash and health savings for the affordable things, and then insurance for what it's supposed to be for, the major medical events. I see. And what should consumers do now that they have this knowledge that there's a cheaper way to approach health care? I think they should ask. So you have to ask for the discount, right? Like Josh was saying, you can get an MRI for $5,000, you can get the exact same MRI for $300. You just have to ask for it and you have to insist on some transparency and pricing for medicine or medical procedures or even medications. Kind of the emperor's new clothes was people used to understand insurance was the tool to make care affordable.

And now as they have high deductible accounts and high out-of-pocket copays, they realize insurance doesn't. necessarily make it cheaper. In fact, the cash option can be drastically cheaper, so they have to self-advocate, which is, to riff on the idea of consumer-driven healthcare, I think the worst part about that is that we imply the consumer has to do all of that work, right? When I go to Best Buy, they're not making me research all the prices and compare. They're doing all that up front. The consumer gets to have that information handed to them in the right way. And in health care, put that back behind all these layers of bureaucracy. And so we make it really hard to be a consumer.

Often they throw their hands up. And that's one of the benefits of models like what Dr. Jules and I have is we're doing all that work for them. We're saying here's the cost of our meds and labs and procedures. And we know what the MRI should cost, and we can help guide you through that. So smoothing out that path for the consumer to make it as easy as possible.

It ends up being a grassroots movement. They need to know that there are options for affordable care and that they're different than what they're used to, but like any other product, different is often better. And the more they seek it out, the more they'll find that the doctor's doing these types of direct care models. And have you both always not accepted insurance at your offices, or is that something that you switched to later on after learning more about this? I've always done it that way. I just did it the way the doctor who took care me when I was little did it. You got sick.

You'd call him and you'd go see them and you'd pay them. So I do it exactly that same way, and I even make house calls and just take care of the individual. So I've always done it that way. Yeah, same. Going through all of our training, we saw doctors taking insurance and the high burnout rate, and we knew it wasn't working. So we went looking for innovative solutions to help ourselves and our patients. The 70% of doctors meet criteria for burnout, it's hard to get really good care from a doctor that doesn't have the empathy anymore because they're so stressed by the daily system.

And that's not how we dreamed of practicing medicine. It's not the type of doctor patients want to have. So we came right out of training and did this model and have been happy with that decision. And it's fun. I mean, our patients love us and we love back on them. It's a lot more fun to do it this way than have to check certain boxes

and go through certain rigmarole. We actually just get to take care of people, which is exactly why we went into medicine. Yeah. No one outside of Washington, D.C. likes paperwork. Doctors included. We want to be with the patient, not with the paperwork. You said that insurance used to kind of have the goal of making health care cheaper, but now it does the opposite. How and when did that switch occur? I think it was just a real slow process. Going back to the 30s and 40s, insurance companies didn't want to be in health care because that didn't make sense for the model.

you're not ensuring a rare future risk. You're talking about covering daily blood pressure treatments. It's something that will happen to most patients. And so it was kind of, I think, the wrong model right out of the gates, but they would pay for some, and then the doctors kind of would increase their fees, and then insurance would increase the paperwork, and then increase their fees,

and just this slow decline of the value of the model, to the point that because we shop for it through, employers, employers just kept pushing that buck and say, well, you want good insurance, but you also don't want to pay for it. You want us to pay for it. So that cost was hidden by another layer. And then we kept playing all these games where, you know, different deductibles and different co-payments and different out-of-pockets, but individuals versus families. And we've just made all these iterations to the model that people don't like. And that's why insurance is confusing. And so I think that game is going to run its course. It's no longer affordable and no

longer helpful. And you both run in-house pharmacies and your offices. Could you tell me a little bit about the problems that you see with Big Pharma and what you're doing to alleviate those issues? I actually can't. So in Texas, I can't do the, which I wish I could. Yeah, Texas is a weird state in that way less free than other states. But the idea is I blame big retail pharmacy more. than Big Pharma directly because Big Pharma is selling the meds at a wholesale level to retail pharmacies, and the majority of that market comes from the big box retailers. And I think that's what's so amazing is doctors should bear some of that responsibility because for decades, it's been a legal option for doctors to dispense medicines out of their office in 44, 45 states.

they just often didn't know that it was an option or they didn't want to take up that extra work or they didn't realize that they could get meds 95% cheaper. And one example between Walgreens and our practice, the cost of a seizure medicine is $108 a month or $1.32. It's almost too good to be true, right? But it's the same meds from the same manufacturers, the same doses, everything. And when we're paying, in 34% of our insurance premium is just going to pay for these medication prices and there's a great opportunity to fix that.

And when patients can get their meds right away and pay for them the next month and they're 95% cheaper, what you see is much greater patient compliance and adherence, but then you get better outcomes, which mean downstream savings in time. So there's almost real no argument against it. It's better for everyone

and definitely better for the patient health. And on my side, which you do too, is we can do labs like that also. So we can do labs like at our local, nonprofit hospital, a CBC, a complete blood cell count, costs $150. We can do it for $5. So there's a lot of unseen markup that we can just eliminate completely and save the patient. Plus, I can order whatever lab I want.

If you want a certain lab, we can do it. And it's not expensive. And when it is expensive, then, you know, whoever pays the Piper gets to pick the tune. And so you've got the patient who has a certain set of wants and needs. and then at those high prices, they have to figure out if the insurance is willing to let them have that. And so you never really get personal care because you're always running through this bureaucracy. The idea of a personal option means with affordable care, you get to make those decisions. And for $120 fee or $24, $5 fee, you can run 24 tests for the same price

and get to choose all of that in coordination with your doctor and probably don't even need the 20. Right. So now the patient is back in charge because the whole process became affordable, less administrative burden, less chefs in the kitchen. And it gets right back to the patient and the physician are in charge of their care and figuring out what works best for them, not what works best for the payer. Considering it's a form of health care that so many people need, why is giving birth so expensive? And is there a free market solution to that? One of the most common hospitalizations technically in surgeries, which is good. in the sense that we want people to be able to grow their families.

And I think there's that same layer of bureaucracy that's short-term, so you can't stretch that fee out over a longer time period necessarily. And a lot of that ends up being paid for by insurance or Medicaid, and again, layers of bureaucracy that spread that out. So a new pregnancy blood panel that would cost several hundred dollars in an insurance model costs us 20 or 30. Meds like Zofran for nausea can be $50 at the pharmacy in a dollar a month with us. It doesn't have to be expensive.

It's just that's the way we've always done it. And that's kind of the momentum of the status quo. When you back up and say the actual cash price of delivery is a couple thousand dollars, right? So you roll that up into the nine months of care and it could be in a very affordable range if you remove all the paperwork. My partner, one of his children was born in the hospital, sent a $19,000 bill, and then the cash price ended up being $2,500, something in that range. An 80 plus percent discount just by paying cash, right? So these prices are somewhat made up because you're going to set a really high price, and then insurance is going to negotiate that down. And so it's a whack-a-mole system versus true retail pricing based in reality.

Because getting down to $2,000 cash-based price, that's the same. as a midwife with some different kind of checks and balances and different medical care there. So I think a lot of it's just this up pricing that we see for across the board. Everything, like he said, a medicine at the hospital that cost us 20 cents, you get charged $200 for. Yeah, I can choose to treat my blood pressure or not. Once you're pregnant, you can't choose to not deliver. It's going to happen. Yeah, it's going to happen. And I think that's maybe where the system uses that to their advantage of, well, then you can't shop that around too much, so we're not forced to be competitive. But I think our medical ethics, our Hippocratic Oath, says, do no harm.

And if we really take that seriously, that should mean do no financial harm. So that really should be physicians working at the top of these organizations to say, we have got to make health care affordable and we can't just keep playing these games. You said asking to pay and cash can get your bill down. What are some other tips for patients? to lower the prices of their health care? Well, with the free market, you can shop around. You know, you can call different places. We see it all the time with pharmacies.

We see that, for example, Cialis, which is an erectile dysfunction medicine, is $1,200 at one pharmacy and is $6 at a different one, which that's ludicrous. That shouldn't happen. If you don't know any better, you can really get gouged. There are anti-gouging laws, but they're not implemented. So sometimes the patients do have to call around. You have to ask.

Do you have a good RX price here? Oftentimes, my patients that have insurance will get a cheaper price by paying cash even for medicines. So it's not fair. And if you don't know any better, you would think your insurance is helping you. But sometimes it's actually hurting you. I think it's a bit of a culture switch and how we shop for things. Most people are more than happy to look for discounts and coupons and savings everywhere else. But when it comes to health care, it's already so hard to interact with the system that they don't think to ask for a coupon for medicine or for procedures.

And so they're out of practice with that. But also, again, back to the earlier statement, you can call up a surgery center, and they may or may not even tell you what the cash price is because they're trying to work more through an insurance model where they want to keep those cash prices secret. So you're really looking for the clinics that are cash-friendly the most. and hopefully working with your doctor, a good direct care doctor, has the time and access and experience to say, we've already researched a lot of these prices. But if you have to do that on your own, just realize that first price is usually not the lowest price, and there's, with research, ways to find solutions.

And we do. My staff spends a lot of time calling around for patients sometimes on weird procedures or unusual procedures, and we just call around and try to find the best deal. And sometimes we ask them, can you do better than that? So you do have to do a little haggling, which I don't think anyone loves to do. It's easier to do it for someone else than yourself. But I think that is part of our responsibility for really trying to help people. And for years now, some politicians have called for universal health care in America. What kind of effect would this have on the existing issues with health care?

I think it implies universal health care is the solution to the current problem. and reality that wouldn't change the real problem we're facing is universal health care implies the government paying for everything, but it doesn't do anything to address the cost of everything, right? So if the state of Kansas and Medicaid is paying $400 a month for seizure medicines that we can get for $12 a month, I like to say that government's not bad, they're just bad at it. There's not a system of checks and balances like a corporation would have to say, we've got to lower these fees, we've got to be creative, innovative, lean. And so you just see that. that bureaucracy grow. And even if the government's paying, but they're overpaying for it, we haven't

solved anything. We've just traded the whip from one master's hand to another. So it's a lazy answer, but an easy answer to a tough problem is, well, we'll just make someone else pay for everything, and then it should be good. Well, and that doesn't match the experience of lots of universal health care systems with long wait times or doctor strikes or things like that, or just shortages of care. So the real question would be, how do you make health care affordable? And then if the government pays through that to Medicare, Medicaid, charity, things like that, that's one option to help in a way similar to food stamps, but it's not the actual solution to the complexity of health care billing. I agree, and it decreases choice. And one of the things that's really great about our models

and the way we practice medicine is it gives people choice. You even have a lot of. You even have a the choice of the kind of personality you want. Do you want a really aggressive doctor? Do you want a really gentle doctor? So that goes away with universal health care, and it lends itself to you being assigned to a group of physicians instead of having one primary care doctor that cares about you. I think technology, like our phones, is a good example where the iPhone one, when it came out, was the best phone ever made. And now it wouldn't compare to even an off-brand generic phone. Technology got so good that we have supercomputers in our pockets and on our wrists because of good business and meeting the customer where they're at and adding value. And healthcare has to do that same thing.

Universal care would be able to lower the amount they spend on procedures by having fewer procedures rather than being able to innovate and find a way to lower the cost of the procedure and offer more of it. Right. And so we would have to get past that. And governance just doesn't have a way to implement those types of sorts of. solutions, but the free market does. Awesome. Thank you so much for joining us. I've learned a ton from this conversation. Good. Thank you for having us. It was a pleasure.

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