Last week, we used some twisted logic to tee up a discussion on the big trends in payer mix, but isn’t ‘twisted logic,’ by definition, an oxymoron?  The idea of twisting logic makes it illogical, right?

You were expecting Socrates here?

This unique thing that we know as ‘payer mix’ is not an issue in most industries.  Sure, most have differences in what customers pay, but that generally comes with some meaningful variation in the product or service.  Try explaining to your non-healthcare friends that you get paid one thing for Patient A and a materially different amount for doing the exact same thing for Patient B and they look at you like a Game Stop day trader trying to understand the margin call clearinghouse issue.

Well, let’s check in on our unique little issue and see what the past decade has brought and what the future might hold.

We’ve had national healthcare coverage for a long time, well before Obamacare.  We just knew it as those with employer-sponsored health insurance subsidizing those with government coverage.  We got paid a lot in our left pocket and a little in our right, but it was OK because it all worked out in the end.

Hobby Lobby got paid a lot for overpriced craft items and took it in the shorts on that one 40% off item, but it was OK until it was not, and they decided to kill the coupon.  Quick update on that crisis…the crafters are up in arms, summarized by this two-word post on the company’s website: Hello Amazon.

OK, here is the big picture math.  Keep this handy as there are some tidbits here you can drop in conversation.  It is like referencing viral memes, but for people who work for a living.

Since 2010, we’ve added about 22 million people to the US population.  In the meantime, Medicare enrollment has grown by 15 million and, you ready for this, Medicaid enrollment by 24 million.  Throw in the 11 million people now who have insurance through the exchanges (high deductible plans for people who need financial assistance…do the math).

So, we have more than double the growth in the lower paying plans than population growth overall.

How much will it hurt?

Since it is public and standardized, let’s use Medicare as a jumping off point.  Let’s say Medicare pays $1.00.  That is metaphorical, even if it seems literal at times.

Well, if Medicare pays a $1.00, Medicaid pays $0.72.  And variations are dramatic, but commercial insurance pays about $1.43.  It used to be north of $2.00.

If you can figure out the 40% savings on a $10 picture frame you can figure out the weighted average of what healthcare providers get paid has gone down.

COVID has cost about 15 million people their employer-provided health insurance.  Guess where many of them are headed?

Well that was not a very happy post, was it?

Those of you with kids away at college know the cell phone has changed communication back to mom and dad.  No more waiting until 9:00pm on Sunday night when the long-distance rates drop to make a quick 4-minute call home to check in. You can send a text anytime you need a little extra cash!

We are fortunate.  The unlimited calling plan means we get to hear from our youngest frequently.  Mostly she calls when she is doing laundry (hey, we’ll take it) or wants to see ‘her’ dog (I accept my third-place status with her).

But last night, there was an emergency.  She and my wife had to Face Time – it was an ALL CAPS immediacy kind of crisis.

‘Mom.  Did you hear?  This is HORRIBLE.’

Now, we’re in the car, I am driving and resisting the urge to look at the phone to make sure Maggie was still alive.  What happened? Did we just need to head straight to Oklahoma to meet her in the ER?

‘Hobby Lobby is dropping their 40% off coupon!’

Oh, it was worse than something that merely sends someone to the hospital.

A long, semi-cathartic counseling session between the two of them ensued.  The dog and I pretended to be distraught because being distraught seemed to be the only acceptable response to this news.

You must know that for my wife and daughter, cruising the aisles of Hobby Lobby is therapy, a life-giving experience comparable to a religious pilgrimage. Hard days are washed away with half an hour of wandering in that Disneyland of Imagination.

Of course, the best part of all is to walk to the register with one item, just one, and then whip out that 40% off Hobby Lobby coupon that is available every day, all the time.

Joy, but with a discount!

That is, until February 28 when the party comes to an end and the saintly folks of Hobby Lobby become a little less saintly.

As I listened in to the wailing and of gnashing of teeth (the dog just went back to sleep), it got me thinking about a topic that I want to dive into a bit next week.

Hobby Lobby was not intentionally trying to hack two of its most devoted customers (the data are still coming in, but early returns suggest that meltdown occurred millions of times across the country).  It is just that customers like my wife and daughter use the discount strategically and, as such, aren’t nearly as profitable as the store would like.

Unfortunately, you have this dynamic coming at you from the opposite direction.  More and more of your customers (excuse me, patients) are going to be walking in with a discount coupon.  It is called a Medicaid card.

We’re overdue to step back and look at some big health insurance trends and will pick that up next week.

That is, if I am not being sent to Hobby Lobby for an endless stream of one-item purchases.