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We hope you all had a great holiday season and we hope that you have an even better year ahead of you.

Happy New Year!

It's been a terrific year for the team here at DocSpot. We're glad to have some time away from the office, and will be back at it next year.

Merry Christmas!

In case any of you were curious, we did finalize our health insurance selection for the company. The basic tradeoff is saving on monthly premiums (the cost of insurance, paid regardless of whether you use services) or saving on the costs of health care services when actually using them (known as coverage). Like anyone, we could choose lower-cost insurance, but be on the hook for more of the costs if something happens (think bronze level in the government's classification system), or we could pay more on a monthly basis and pay less if something happens (think platinum level).

As a team of relatively healthy individuals who rarely use health care services ourselves, we decided to go with lower monthly premiums. However, there was still the nagging question of what happens if a medical emergency should occur. To help mitigate against those unexpected costs, we calculated the difference between our monthly health premium and the premium of a higher-coverage plan that we were satisfied with. We plan on depositing that difference into a health savings account (HSA) on a monthly basis. Over time, we expect those savings to accumulate so that they would offset a significant part of the deductible used to pay for any major covered procedure. If no such event happens, then the savings should continue to accrue (and can be withdrawn at retirement). On a conceptual level, this helps capture some of the money that would be evaporating every month (used to pay for services that we don't actually use). The numbers work out such that if we consistently had to use health care services, it would make more financial sense to just get a more expensive plan with higher coverage (which would not be compatible with HSAs). For now, though, this combination is the one that seemed to make sense. We'll revisit the issue next year.

The end of this year offers all sorts of excitement in regards to health insurance plans. First, we were notified that our personal health insurance plan was no longer going to be offered next year. We checked out Covered California's website for our individual market options, and we waited to see options on the small business exchange (SHOP). We heard that the federal government was going to delay rolling out SHOP for a year, but it turns out that that only affects the federal website. California's SHOP website was supposed to be up and running by mid-November. The rate information still isn't available at the time of writing. Oh well, we thought -- I guess no SHOP for us this year. But, it turns out, we can still buy SHOP plans, but just not through the website (we need to go through a broker). But, there are non-SHOP plans that are also available for small businesses -- wider selection, but no possibility of tax credits. Oh, by the way, did we realize that only a limited number of plans are accepted by the doctor that we currently see? (Some other plans are negotiating, but we still don't know if those plans will be accepted.) Getting to this point was just the easy part.

We've been looking at premiums, co-payments, co-insurance, deductibles, and out-of-pocket limits -- enough to make our heads dizzy. Then, we should also consider whether we want HSA-compatible plans, and did you know that HSA plans come with a monthly fee for administration? We started looking at different scenarios that would cause differing levels of health care spend. There are so many variables. While I haven't been a fan of the rollout of these changes, one positive aspect is how the exchanges highlight the dimensions in which the health plans can differ. Having all of the information on the same site makes it easier to choose, but the choice can still be overwhelming.

We're almost done choosing, in part because the deadline is upon us. If any of you are in a similar situation, good luck! Hopefully, it won't spoil your holiday season.

The Center for Medicare & Medicaid Services recently reported that hospital readmissions have been dropping in 2012 and 2013. The suggestion, of course, is that the new incentives that they have rolled out are responsible, and that this portends lower growth in health care costs.

That the fall in readmissions rate is related to the new incentive programs seems pretty likely, given that the rate held constant for the five years prior to rollout of the incentive programs. What is less clear is whether there are any side effects that we don't know about. For example, is it possible that hospitals have tightened their guidelines for readmissions where subjective judgement is involved? Alternatively, are other services being used more heavily? (That by itself might not be negative since those other services presumably cost less than hospitalizations, but would still be relevant when figuring the total benefit of the new incentives.) As CMS noted in their blog post, it is still too early for any definitive pronouncements, but this is an encouraging sign that measuring and rewarding performance can be effective, even in the health care industry.