Wednesday, September 24, 2014

The Economics of Serious Illness

By Jay Ellis, MD

Editor's Note: This is the fifth in a series of articles written by San Antonio anesthesiologist Jay Ellis, MD, a member of the Bexar County Medical Society Communications/Publications Committee. The series, published monthly in San Antonio Medicine, examines the physical, emotional, financial and spiritual burden of life-threatening illness. Check out parts I, II, III, and IV.

What does it cost to get sick? It costs a lot. Here is a breakdown of just some of our expenses during the first six months of my illness.

MEDICAL COSTS

There is a commonly accepted belief that medical costs are the primary cause of bankruptcy in the United States. Whether or not that statement is true depends on how you define the cause of bankruptcy. It is true that medical bills and serious illness are a major factor in bankruptcies for many people. Whether or not they are the primary cause in the majority of cases depends on how you define your terms. I don’t want to debate the issue, but let’s say that if your finances are precarious, a major illness will push you over the edge. Why? Let’s review my costs.

From September 2013 through February 2014, my private insurance paid just under $120,000 for my care. TRICARE paid another $8,000. The table published here shows approximate costs for various items. Chemotherapy seems very expensive (and from my personal experience, worth every penny), but the bulk of the cost is for two drugs. Insurance pays around $5,000 for rituximab and $3,000 for pegfilgastrim. The hospital payment for a three-day stay in the ICU and two days on the rehab floor was just under $20,000. One would think that with all that money flowing out I would be off the hook. Not true. Since I was unlucky enough to get ill at the end of one year and the beginning of another, I had to meet two sets of deductible limits. I guess the moral of that story is don’t get sick in December unless you can be out of the hospital by New Year’s Eve. My share after the $120,000 was $14,000. In truth, I paid a fraction of this because I also have TRICARE insurance, which paid once I met my annual $3,000 cap. I also have other advantages such as a flexible spending account. It is also true that my treating physicians extended professional courtesy on several occasions despite my pleas to send a bill. We live in a great medical community.

It is easy to see how serious illness could devastate the financial reserves of some people. Medical bills alone can be overwhelming, especially if you have a high-deductible policy and you happen to have an illness that covers two calendar years. In that situation you could end up paying $10,000 before insurance pays a dime. I remember waiting for my chemotherapy appointment and seeing the faces of people emerging from the financial counselor’s office. Having a life-threatening illness and facing bankruptcy at the same time seems an unbelievably cruel predicament.

MISSING WORK

Working half-time does not result in half the pay. As every business owner knows, you work most of the month to pay expenses and taxes. The last week of the month represents your profit, and if you miss that week, there is no profit. I watched my paychecks gradually dwindle in size until it reached they nadir of $236 for one month. It reminded me of my days pumping gas in high school. This is when disability insurance proves critical. I have friends who don't have disability insurance because it is too expensive. It is expensive, but not having it may prove catastrophic.

When I became ill, I spoke to people in my group who faced disability. David Davis was a great source of advice. He told me that waiting too long to file for disability is a serious mistake. Insurance companies base your replacement income on your current earnings. The definition of the time period used in the earnings calculation is specified in the disability policy. He advised me to file right away when I was first diagnosed, which I did. I claimed disability from the day of my first chemotherapy. It would prove to be a wise decision. With all disability policies there is a waiting period. I had three policies, two with a three-month waiting period and one with a six-month waiting period. My first payments from the three-month policies would coincidentally begin the month I had to stay home.
I heard horror stories of insurance companies denying payment, or reducing payment because of problems proving income. My insurance carriers were helpful and empathetic. They tried to make the application process easy, but they do require a mountain of paperwork. I had to produce five years of income tax returns, with all schedules. I had to produce productivity data for 12 months from my practice. Fortunately my group, Tejas Anesthesia, was invaluable. They produced reports without any effort on my part, and all I had to do was stand at Kinko's for one hour copying tax returns.

It was fortunate that I was still well enough to accomplish these tasks. I asked my wife, Merrill, what she would have done had I not been able to do this, and she gave the right answer. She would speak to our administrator, John Spiekerman. If she had problems with insurance she would talk to my office manager, Marta Reyna. Those were good answers, but I still made sure she understood where I kept all the insurance documents and contact phone numbers. Another advantage I have is a military pension. It really is a form of disability insurance, in that it pays throughout the lifetime of the veteran, whether you are employed or not. We never had a time when there wasn't at least some money coming in. I wouldn't want to live on my military pension, but it helped keep us afloat in those months before the disability insurance payments kicked in.

Personal savings are essential to weather a serious illness. The light bill, the mortgage payment, the car payment, the medical insurance payment, and any other expenses you might have still come when you are ill. Merrill and I put away a considerable amount in savings, one year’s living expenses. We didn't do this because we thought one of us might become ill. We did it because I was afraid that after retirement, the U.S. military might call me back, and we would have to exist on my Air Force salary. Having a cash cushion kept us from having to worry about money while we were also worrying about my illness.

SAVING YOUR PRACTICE

Even with disability insurance, personal savings, and the luxury of a military pension, I still wondered if I would have a practice to which I could return. I realized that though I was sick, other people’s lives would go on. My patients would still need care, my referring doctors would still need help, and the surgeons I worked with in the operating room would still need coverage. It was at this time that I began to fully appreciate what a wise choice I made in joining Tejas Anesthesia. My partners in my pain practice, Jim Growney, Tim Orihel, and Arnold DeLeon, saw all my patients and made sure that they had uninterrupted care. My office staff was instrumental in explaining my predicament to my patients, and my patients’ loyalty was overwhelming. I cannot count how many other members of Tejas Anesthesia offered to back me up if I wanted to take call or provide relief if I got tired while in the OR. Before I became deathly ill, Vanessa Weems, who does our scheduling, would offer me stipend work if extra shifts became available. Without their support I would have had to rebuild my practice from scratch, hustling like a new grad, except now I’m 58 years old and recovering from a serious illness. That is not a pretty picture.

Tejas Anesthesia staff include (seated from left) Jennifer Villanueva, Darla Herlitz, Heidi Barrera, and (standing from left) Jo Ann Morris and Marta Reyna. Courtesy photo
When I was in the military, young doctors would often ask me for advice while looking for a job. I told them the two least important questions to ask are, “How much money will I make, and how much call will I take?” The most important questions to ask are, “Would I let these doctors take care of my family, and if I drop my wallet and turn my back would there be any money left in it?” If you can say yes to both of these questions most other issues will work themselves out. In truth, I didn’t save my practice — my partners and my group did. I will be forever grateful for their support. I challenge everyone to perform this thought experiment: How will my organization react if I become ill and I am gone for several months? I challenge every organization to ask the question: How will we support our members if they become incapacitated?

In retrospect, I realize that we were quite blessed to get through the financial part of this illness so well. As a physician, I have many advantages not available to the average person. While I would like to say that I made a great financial plan that saved us, the truth is many of the decisions I made were never done with the thought there would come a time I couldn’t work. Like many doctors, I considered myself invincible, dare I say, indestructible. I will never hold that belief again.


Tejas Anesthesia physicians include (from left) Drs. Timothy S. Orihel, Jay Ellis, Arnold DeLeon, and James L. Growney. Courtesy photo
Up next: Recovery

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