But Which Half?

By Kim Bellard, January 30, 2013

Advertising lore credits John Wanamaker, the department store magnate and marketing pioneer, with the famous quote: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”  It turns out he could have been talking about spending on health care.

The British Medical Journal, through their Clinical Evidence initiative, recently reported that they’d analyzed 3,000 medical treatments that had been studied in controlled, randomized studies.  It turns out that for half of those treatments, we have no idea how well they work.  Indeed, only about a third of the treatments were found to actually be beneficial or likely to be beneficial.  The rest are likely to be harmful.

Sadly, this does not come as a surprise.

We know we don’t know enough.  The vast number of medical treatments have never even been studied in a true clinical trial.  Worse yet, sometimes even when there is clear empirical evidence about which treatments are most effective, that information does not always sway physician behavior, or does so only very slowly (for example, see this study on the use of heart stents versus medication therapy).

There is no shortage of reports of unnecessary or even harmful care.  It’s even scarier when that care is associated with high costs.  In no particular order, one could cite recent controversies with spinal fusions, hip replacements, or chemotherapy drugs.   There can be lots of money at stake for manufacturers, drug companies, and health care providers.  That kind of money can distort the question of what is truly in the best interests of the patient.

Many employers, payors, and researchers have been pushing for “evidence-based medicine” for many years now.  EBM focuses on making sure that treatments have appropriate research to support their effectiveness, and in getting the word out about such treatments.  One of the many initiatives from ACA was the Patient-Centered Outcomes Research Institute, which is charged with conducting research to provide such evidence and funded by a $1 head tax on people covered by insurers.  And, of course, AHRQ probably is wondering why we need a new organization to focus on EBM, given their many efforts on effectiveness.

In time, this may all become much easier, as more patient data become electronic and more connected, and we can make more use of computing power to track what truly happens to patients under various courses of treatments.  I mentioned a couple examples of this in my last blog, citing Optum/Mayo’s new initiative and meta-research studies in lieu of clinical trials.  Another example comes from Archimedes Inc., a firm founded by David Eddy, who was one of the early pioneers of evidenced-based medicine.  Archimedes claims to use its advanced mathematics and computing prowess “to run clinically realistic virtual trials on any population and create compelling evidence to make decisions in health and economic outcomes research, policy creation, clinical trial design, and performance improvement.”  Apparently HHS thinks they can, as it hired Archimedes last year.

Most physicians I know are very bright, care very much about their patients, and work hard to stay current on the medical literature.  Unfortunately, the latter is virtually impossible to do, given the sheer volume of that literature.  Even when there are clear results about which treatment is truly the most effective, the research doesn’t usually come with a guide as to how physicians can implement the associated changes to their practice routines.  It’s as much of a question of change management as it is the evidence to make the change.

It would seem that the situation is tailor-made for clinical decision support tools, which seek to provide clinicians with information on treatment options, potential outcomes, and possible contra-indications at point-of-care.  Unfortunately, we may not quite be ready for them.

Last summer The Annals of Internal Medicine published a study on clinical decision support systems by Bright, et. al.  They did a meta-analysis of studies on CDSSs, and found ample evidence of their efficacy in improving process measures, but sparse results on their impact on clinical or economic outcomes.  Whether this is due to the limitations of the underlying studies, the CDSSs themselves, or how they were used by clinicians is unclear. 

Similarly, KLAS Research recently released results of their survey of health care providers on their satisfaction with clinical decision support tools.  The results cited a general level of frustration, especially due to lack of integration with EHRs and “alert fatigue” caused by ineffective targeting of alerts. 

Worst yet, according to new research from the University of Missouri, patients don’t seem to trust treatment recommendations from physicians who use CDSSs, believing them to be less capable than physicians who make decisions unaided.  Patients don’t even like it when physicians consult with other physicians before making a recommendation!  They think their doctor should know everything.  I blame television for this – on medical shows like Grey’s Anatomy or House physicians pull up the most obscure diagnoses and treatments strictly from memory, without ever having to consult any reference materials.  Nobody’s memory is that good. 

Clinical decision support systems aren’t going to replace doctors; they are simply tools to aid health care professionals, much as a stethoscope or a thermometer does.  One can imagine a future where CDSSs -- and EHRs -- fit seamlessly into patient visits, providing real-time, interactive information while with the patient.  The line between evaluation, documentation, and clinical decision support should blur, in order to more accurately diagnosis patients and determine the best course of treatment.  

In the meantime, it’s somewhat of a crapshoot.

A recent study by Deloitte indicates that 62% of Americans believe that, in fact, over 50% of U.S. health spending is wasted, which is up from the already high 51% in 2009.  The message about necessary spending may be getting out, but consumers may be getting the wrong idea – only 18% thought the problem was not using evidence-based treatments, versus 69% who blame fraud and abuse in the payment system.  In other words, the problem can be blamed on greedy crooks, not on well-meaning health care providers.  Defensive medicine and unnecessary paperwork were each also cited by about a third of respondents. 

I agree that fraud, defensive medicine, and inefficient administration contribute cause us to spend money we shouldn’t, and each should be addressed, but I suspect more of unnecessary spending comes from well-intentioned treatments that aren’t really best for the patients.  As professionals, health care providers should be more stringent about basing their treatment recommendations on evidence that truly supports them.  More importantly, as the people whose health is going to be impacted by those treatments, it’s incumbent on us to demand that evidence.

Maybe one day we’ll have Star Trek’s tricorder to non-invasively diagnosis or even Star Trek Voyager’s holographic doctor to treat.  Maybe someday nanobots will fix all our ills without our even being aware of their work.  All that is in the future.  For right now I’d settle for simply being able to know the odds that a recommended treatment will actually benefit me.

Should We Spell ACO “CRM”?

By Kim Bellard, January 15, 2013

CMS released a list of 106 more ACOs, bringing the total of approved ACOs to over 250.  On the list there were some familiar names, and many organizations sponsored by familiar types of organizations.  It reminds me of how NFL coaches who get fired almost always get hired by another team – here’s a shout out to you, Norv Turner! – despite their demonstrated lack of success.  As the old saying goes, if you keep doing what you’ve been doing, why would you expect anything to be different? 

Don’t get me wrong; I hope ACOs prove successful.  I hope they help reform our health care system into a more integrated, cost-effective system that is centered around the patient.  Still, I wish we’d see some ACOs sponsored by organizations with more non-traditional orientations – an American Well or an athenahealth, for example.  And definitely wake me up when an ACO asks a company like Salesforce.com to help them.

Most of the approved ACOs are driven by hospitals or physicians, which should come as no surprise.  They’ve always been the center of our health care system, and will remain integral to it.  I was pleased to see, though, that Walgreens is also dipping its toes in these waters, leading three of the recently approved ACOs.  Walgreens’ ACOs may not prove any more successful than other ACOs, and will obviously still rely on hospital and physician partners, but at least they come at the problem with a much more retail orientation. 

ACOs are focusing on clinical integration, care management, financial risk management – really, all the things providers should have been doing all along but which they haven’t done such a great job at.  I’m wondering, though, if they are like the guy who only has a hammer, and thus sees all problems as nails.  Maybe instead of a care management problem, we have a CRM problem. 

CRM, for those not used to non-healthcare jargon, is “customer relationship management.”  It has many definitions and many applications, but at the risk of oversimplifying I’ll boil it down to this: knowing your customer, and using that knowledge to drive all interactions with that customer.  In health care (ACO), of course, the customer would be the patient. 

Here’s a set of things that would be true in a truly CRM-driven organization:

• A singular focus on earning and keeping customer loyalty;

• A customer database that can be accessed as needed throughout the organization;

• Each contact with the customer – at every touchpoint, with every representative of the organization – is informed by the existing information about the customer, and then becomes a source of new information about the customer;

• Contacts with the customer trigger rules-based algorithms that tailor what the organization wants stressed during the encounter, based on perceived (or expressed) needs and anticipated benefit to that customer – reminders, messages, additional services, etc.; 

• Contacts include both ones initiated by the customer and proactive ones initiated by the organization, with outgoing contacts being specifically targeted as to timing, purpose, type of media, and from whom;

• Contacts are, to the extent possible, tailored to customer preferences – e.g., physical visit versus virtual, mail/email/text/phone communication.

Now ask yourself: how many of the 250+ ACOs are likely to have all of these?  Most of these?  Any of these?  I have to admit that I’m not optimistic.  I mean – how many ACOs have an ACO-wide contact system?  How many ACOs even have a patient portal, especially one that incorporates both clinical and administrative information, from all ACO providers?    How many ACOs are even thinking about these kinds of things?

A physician in an ACO with a strong CRM platform would be up-to-date on what is happening with his/her patients, based on their own interactions, interactions the patients have had with other ACO providers, and even results of, say, home monitoring, especially for at-risk or chronically ill patients.  They’d be alerted immediately of an ER visit, potential adverse drug interactions, or test results from throughout the ACO.  Now we’re talking care management.

A recent report from Rand casts concern about how easy achieving any of this is likely to be for ACOs.  The report admits that HIT has fallen short on its promise, in large part because the various systems are neither interconnected nor easy to use, sad though that is to report.  It’s hard to do CRM with those kinds of barriers. 

Still, HIT provides so much promise for improving the health care system, in ways we’re only beginning to figure out.  For example, Optum and Mayo just announced Optum Labs, a collaboration that will pool their data and technology assets, with the goal to drive long term improvements to delivery and quality of care.  They’re not alone in this approach, with The New York Times recently reporting on researchers who plan to use electronic medical records to do medical research faster and more inexpensively.  HIT allows us to use data in ways paper records never could.

We’re in the era of Big Data, and the possibilities are as yet largely untapped.  CRM lives on robust data and targeted use of it.

I was also encouraged by an article by Linda Green and colleagues, which argues that our concerns about a physician shortage can be addressed by using alternative approaches towards delivering care, including “team” approaches, technological solutions and physician extenders.  The past does not have to be the future in terms about how patient care is delivered.  If anyone doubts that, they should read the recent survey by Harris Interactive about the use of retail clinics: some 27% of American adults have used such a clinic in the past year, up from only 7% in 2008.  Give consumers faster, easier options for care, and they will take advantage of them.

Of course, those options are not just bricks and mortar.  It should come as no surprise that the Internet plays an important role.  The Pew Research Center reports that 35% of U.S. adults have gone online to try to self-diagnose, which sometimes results in visits to providers and other times allows them to manage on their own.  Sixteen percent of online health information users have tried to find others on line with similar conditions, and 30% of internet users have consulted online reviews or rankings of health services or treatments.  Information is power, and more of that power is going to consumers.

Or take InTouch Health, which just won FDA approval for its “remote presence robot” that uses telemedicine to take care coordination to new levels.  Telemedicine is no longer exactly new, but FDA approval is a big deal.  Telemedicine promises – or threatens, depending on how one looks at it – to redefine what it means for providers to be available, and which providers.  Distance becomes less of a consideration.

Then there is the “mHealth” revolution.  Deloitte just issued their latest mHealth report, and sees a bright future: they expect some $305b in industry productivity gains over the next 10 years from mHealth solutions.  That’s a heck of a lot more than CMS forecasts ACOs may save, and it suggests that ACOs who aren’t incorporating a broad suite of mHealth and other technological solutions will do so at their own risk. 

At the end of the day, it’s not about these various slick technological solutions.  They just give us more options.  It is about doing the right thing at the right time in the right way for the right person.  If that’s not what CRM is for, I don’t know what is.  If that’s also not what we want from our health care system, again, I don’t know what is.

CRM is not easy to do, and it is rarely an all-or-nothing approach.  Even in the best case a CRM strategy can take years to implement, building incrementally.  It takes a committed, long term strategy to succeed with CRM.  And, as I see it, an ACO without a CRM strategy may not have a viable strategy at all.

And You Thought Health Care Was Bad

By Kim Bellard, January 7, 2013

I’ve been thinking a lot of our educational system lately.  It may be the only part of our economy that makes me feel any better about our health care system.

Now, let me preface my remarks by admitting that whatever experience and expertise I may have with health care, I can’t claim the same for education (except as a student long ago).  Still, education and health care are two areas that most Americans feel very strongly about, recognizing that they are crucial for the well-being of the populace and of the country.  We should all care about what’s happening in both.  Unfortunately, we seem to have blinders on about how well either is performing.

The heath care statistics are perhaps better known.  I’ve covered some of these in previous entries, and won’t repeat all of them here.  In short, we spend way too much – far more than any other country – yet do not score at all well on most international comparisons of mortality or morbidity.  Whatever that extra spending is buying us, it does not appear to be better health.

The picture for education is surprisingly (and depressingly) similar.  We spend far more per pupil than other countries (although, unlike with health care, we’re not the highest as a percent of GDP), as reported by OECD.  Yet we aren’t getting good value for that spending, as our performance is at best middling compared to other countries (see, for example, the USC Rossier School of Education and The George Washington University).  And, according to a report from the Harvard Kennedy School recently, we’re not only scoring poorly but also we’re not gaining any ground on better performing educational systems in other countries.  In a global economy, that’s a race to the bottom, especially since some of our worst scores are in critical areas like math and science.

Most Americans might acknowledge that there are large parts of the public – especially the poor -- for whom both the health care and the education systems are failing, but the statistics for both systems indicate we’re all paying a premium for, at best, average performance.  That’s a sucker bet.

This caused me to start thinking about the ways in which the two sectors are similar.  Here are a few that strike me:

• Who Pays: Both sectors rely heavily on public spending.  Health care is roughly half public spending (even ignoring the “tax expenditure” for employer-based health insurance), while in education the public spending is much higher – over 70% for all levels and closer to 90% for pre-collegiate.  People may not be as vigilant about what they are getting when they think the government is providing the service as with services they buy directly.  However, most other countries have even higher proportions of public spending in both sectors.

• Local:  Most health care and most education is received “close to home.”  It’s certainly possible to get either health care or an education far away from home (as often happens with college), but that tends to be the exception; people tend to stick with what they know rather than seeking the best available.

• Variability: The Dartmouth Atlas has been preaching for decades about the variation in health care throughout the U.S., for reasons not explained by population differences but simply due to local practice patterns.  The variability of performance in the education system between states and between schools within the same state show a similar wide range of variability (indeed, the Harvard report indicated more variability between states within the U.S. as between the U.S. and other countries).  It’s possible to find the best care or the best education in the world within the U.S., but there is a certain geographic randomness to that which is very troubling.

• IT Transformation: Ironically, both health care and education were early adopters for IT – but for primarily for billing and administration, not for care delivery or teaching, respectively.  This is starting to change.  Health care has relied heavily on technology, such as MRIs or laser surgery, and the federal government is spending billions to encourage adoption of EHRs.  In the educational system, many classrooms are making good use of computers, even sometimes replacing textbooks with laptops or tablets.  Still, one would have to say that IT has not yet had the kind of dramatic impact on what the average doctor or teacher do every day as what workers in many other industries have seen, because they have not been forced to fundamentally reengineer their processes.

• Guild Mentality: For many, many decades both teachers and many types of health care practitioners – doctors, pharmacists, dentists, nurses – have generally been viewed with great respect by the public.  Unfortunately, those professions have had a tendency to incorporate the attitude that people outside their profession are not qualified to evaluate their performance.  This no doubt contributed both to the local variability and lack of IT transformation mentioned above.  Teachers have the added protection of unions that serve to further insulate them from outside pressure on performance, while doctors, pharmacists, and dentists have the strong barrier to entry of their advanced education and licensure requirements. 

• Lack of measurement: Historically, neither field paid much attention to measurement and certainly not to quantitative feedback loops for improvement.  Good teaching, like good health care, was seen as hard to define, especially since the full consequences of deficits in either may not fully emerge for years.  As a result, it’s been hard at best, and impossible in many cases, for consumers to view performance results to find the best teachers/schools or doctors/hospitals.  This is starting to change, such as through Meaningful Use requirements in health care and testing standards of No Child Left Behind/Race to the Top in education, but we have a long way to go before the average person can get actionable information on where and from whom to get the best education or health care. 

• Not Rewarding Excellence: For the past thirty or so years, both public and private payors have moved away from paying based on charges and more on using predetermined fee schedules. This had the (hopefully) unintended effect of rewarding health care providers for average, not actual, performance.   Similarly, in education, teachers’ compensation was largely driven by tenure; the longer one had taught, the more they were paid.  In neither sector was excellence rewarded or poor performance punished.  Health care is now creeping towards “value-based purchasing” and education towards various forms of pay for performance, but the new systems are not widespread nor do they generally comprise a significant portion of compensation.

One might expect that the professions involved would be leading the charge to measure and improve performance, and to reward excellence, but by and large that has not generally been the case.  In his recent book Class Warfare: Inside the Fight to Fix America’s Schools, Steven Brill noted a mentality where teachers’ unions treated criticism of any teacher as criticism of every teacher, and it struck me that the same is all-too-true for health care professionals as well.  We have to get away from that.  The fact is that there are better teachers and worse teachers, better schools and worse schools; better doctors and worse doctors, better hospitals and worse hospitals.  It is crazy that we as purchasers of these services are not demanding not only to know which are which, but also demanding the ability to take our children/ourselves – and our money -- to the best practitioners. 

Measuring quality in either health care or education is, indeed, hard to do, but better performance from both systems is absolutely critical.  We’ve not going to emerge from the 21^st century with the kind of country we expect unless we demand better performance.  Anyone want to bet which system reforms the fastest?

Wait – Health IT Increases Costs?

By Kim Bellard, November 29, 2012

Two recent reports challenge the prevailing conventional wisdom that increased spending on, and use of, electronic medical records and other clinical health IT will help control costs.  If these are true – and it’s too early to be sure – it may be because we’ve approached health IT in the wrong way.

Kaiser Permante looked at their experience in their Colorado plan for five years, comparing the utilization of 44,000 users of My Health Manager, Kaiser’s patient portal, to 44,000 non-users.  Pretty much across the board -- from office visits to ER visits and even inpatient stays, among other measures – the online users had higher utilization, and their utilization went up after gaining online access.  Kaiser’s portal allows for email consultation with their physician, but not only did that not deter some of these increases, the online users’ telephone calls per member were still actually higher than non-users.  

There’s more bad news for health IT proponents.  The New York Times recently reported that their analysis of Medicare data indicates hospitals are collecting more than $1billion more in 2010 than five years prior, in part because of how they have changed billing codes in the emergency room.  The Times associated many of these increases with introductions of electronic medical records in specific hospital systems, and asserts that some physicians outside the hospital setting are also using their EHRs to maximize billings.

The belief is that the EHRs can prompt physicians to code their documentation in ways that maximize payment, or to “cut and paste” documentation from other patient visits which might not accurately represent the services the patient received.   Some of these practices would be fraudulent, while others are just part of the ongoing arms race over up-coding.  Either way, the EHRs may be helping.

Raising yet another red flag, the HHS Office of Inspector General just issued a report warning that CMS does not have appropriate safeguards in place to monitor the EHR incentive program, either prior to the incentives being paid or once they’ve been paid.  The outcome could be fraud and/or less meaningful use than anticipated.

Meanwhile, a study on e-visits by Dr. Attev Mehrotra and colleagues had more mixed results.  It looked at visits for sinusitis and UTI for 4 primary care practices.  Their results found the e-visits resulted in significantly fewer tests being ordered for UTIs, but also a higher rate of antibiotics prescribed for both conditions.  The rate of follow-up care – a rough proxy for misdiagnosis -- was similar for e-visits and office visits.  The authors did not look directly at costs but their estimate was that e-visits may have led to lower costs per visit, taking into account the lower reimbursement for the e-visit itself.

For better or worse, EHRs would seem to be here to stay.  A recent survey by The Commonwealth Fund illustrates this.  CWF surveyed primary care physicians in 11 countries, including the United States.  Between 2009 and 2012, use of EHRs went up from 49% to 69% in the U.S.  Of course, seven of the other countries still are ahead of the U.S. in adoption rates, by as much as 30 percentage points.  And only Canada started from a lower point. 

More disappointingly, the U.S. ranks in the middle of the pack for “multifunctional HIT capacity,” with only 27% having EHRs that allow them to generate patient or panel information, or to give them clinical decision support.  We rank in the lowest third for ability to exchange patient information or test results with doctors outside their practice, with only 31% of U.S. primary care physicians having that ability.   We’re certainly not living up to EHR’s potential.

Consumers certainly appear ready for the new world.  OptumHealth recently found that three-fourths of consumers want online access to their records, although only 40% currently report such access, and 60% want to communicate with their physicians online.  Similarly, Manhattan Research found that 73% of American adults use online health information and tools, and 54% of online consumers are using the online resources in their choices of providers, treatments or services.  This is most pronounced for newly diagnosed patients.  This is good news, I think, although I’m still skeptical about how good the information is by which consumers may be making these choices.

Which leads me back to the Kaiser study and the NYT analysis.  The Kaiser results suggest to me that more engaged patients are taking advantage of the online resources, and at this stage of EHR evolution it doesn’t surprise me that those engaged patients are care-seeking.  As for the alleged up-coding the NYT warns of, to the extent the EHRs are prompting physicians to be more thorough, that’s a good thing; to the extent it is facilitating fraud, it must be fought.  The proof of the pudding is in the eating; in this case, how are patients faring with their treatment(s)?  This is where only EHRs offer us hope to give us better information, and why we can’t give up on them just yet. 

Many providers have embraced EHRs and health IT to improve their delivery of care, while others are still gamely trying to figure out how to do so.  Any provider that is not trying to re-engineer their processes may have a tough time in the coming years, so kudos to the ones aggressively taking advantage of technology to help patients.  Why taxpayers need to subsidize this kind of re-engineering, though, I’m less sure. 

It strikes me that the HITECH stimulus has compounded the provider-centric focus of our health care system.  It does, after all, pay providers for provider EHRs, and Meaningful Use for consumers is essentially only an after-thought.  The current incentives could mean that patients end up with access to disparate records at their various providers, and if they are lucky some of those provider systems may share data.  We should be expecting more than that.

We continue to think about patient data incorrectly.  A case in point was reported recently by The Wall Street Journal.  Long story short, Medtronic defibrillator devices now produce significant amounts of data wirelessly once implanted.  Medtronic shares the data with the patients’ cardiologists, and is now trying to further monetize the data through sales to payors or other entities, but does not see the patients as either customers or even entitled to the data.  That data is generated from those patients’ chests, mind you.  Medtonic and some physicians see the data as too complex for patients, but maybe they’re not thinking hard enough about how to make it useful to those patients.

Instead of HITECH, perhaps what we should have done was to stimulate the patient health record industry, transforming it from simple medical records to virtual health assistants.  These online assistants would take information from various providers’ EHRs, from the ever-increasing number and types of monitoring devices available, and from patient inputs, plus offer patients features like dashboards that summarize their health, suggestions for improving/maintaining their health, and assistance with choosing appropriate treatments and/or providers when necessary.  I bet IBM would see a potential role for Watson here.

A patient-centric health system would start an EHR initiative by analyzing what information patients need, and then determine what information was needed from the providers’ records to support that information.  Instead, we have provider-specific EHRs that can’t talk to each other and that patients often can’t understand – when they are fortunate enough to get access to them. 

As long as EHRs and health IT continue the provider-centered, provider-siloed approach of our current health system, I’m not holding my breath for them to really bend either the cost or quality curves.

Some Lessons from Sandy

By Kim Bellard, November 8, 2012

I have no doubt that many very smart people, and especially ones who were more directly impacted by Sandy than I was, will be doing extensive debriefings about Sandy’s impacts, and coming up with lots of far-reaching recommendations for next big disaster.  Still, I wanted to throw in a few thoughts about a couple lessons Sandy has for HIT.

One of the unexpected learnings from hurricane Katrina in 2005 was a boost in the perceived need for electronic health records, as many paper records were lost or destroyed by the storm, and as Louisiana residents widely dispersed across the country.  The paper and place systems for health information were found severely lacking, and Katrina was a clarion call to move health information into the 21^st century.

Seven years later, we have, in fact, seen much progress on that front.  HITECH was passed to stimulate the adoption and “meaningful use” of EHRs.  Over 300,000 physicians and4,000 hospitals received HITECH incentive payments through 3Q 2012 – some $7.7b.  Those numbers are expected to grow rapidly, and the increasingly tough meaningful use standards will drive better use of the data in the EHRs.

That’s all good news, and it would be easy to see how HIT should have helped mitigate some of the woes from Sandy.  Instead, what we’ve seen makes me wonder if we’ve learned anything at all. 

Sandy caused hundreds of hospitalized patients transferred, with some entire hospitals closed due to flooding.  That’s obviously not good for patients, but understandable under the circumstances.  I couldn’t help but wonder what was happening with their records.  Did all their information travel to the new hospitals, or was everyone forced to start from scratch? 

Best case scenario, the patient might have transferred to a sister hospital that used the same systems.  The worst case scenario, of course, was that the records were only on paper which was lost or destroyed.  The most frustrating scenario, though, would be that both the old and new hospital had electronic records, but that the respective hospitals couldn’t communicate.

Unfortunately, this latter scenario is all too likely.  David Whitlinger, the health of SHIN-NY, the statewide HIE for New York, cited disasters such as Sandy as why we need health information exchanges (HIEs).  He’s exactly right, of course – but even he couldn’t say how many of the impacted New York hospitals were participating in SHIN or were able to take advantage of its capabilities.  I suspect that if they had any big success stories from Sandy, they would be touting them.

I’m not picking on SHIN-NY.  HIEs are facing problems in many places.  In Michigan, for example, there are two statewide HIEs, which can’t communicate with each other.  According to the eHealth Initiative, HIEs biggest concerns included developing a sustainable business model, and competition from other HIEs.  Most of them still aren’t doing anything as sophisticated as transmitting entire patient records.  It would be comical if it wasn’t so depressing, and if my federal tax dollars weren’t subsidizing these efforts.

HIEs are supposed to ensure interoperability and transmission of patient and clinical data, but those battles are still being fought.  A recent report from KLAS Research indicates that providers express dissatisfaction with their HIE vendors, including their ability to move data between multiple EMRs.  Respondents mentioned, for example, that Epic scores well for connectivity, but not with non-Epic installations…which sort of makes the capability moot.

Then there is mHealth, a term that was only just beginning to be used when Katrina hit in 2005.  It’s now a big deal: the mHealth market is estimated to double in 2012, to over $1.3b, with literally thousands of mHealth apps on the market, from the trivial to the FDA-approved.  It is no wonder that mHealth has taken off; over half of the U.S. population now has a smartphone, with two-thirds of new purchases being smartphones.  According to the Pew Internet & American Life project latest findings, almost 20% of smartphone users have health apps.

Sandy showed us that we’re not quite ready for prime time on this front either.  Let’s start with the availability of mobile networks.  The New York Times reported on the spotty service and infuriated customers.  As one impacted resident said, “not having hot water is one thing, but not having a [cell]phone? Forget about it.”   The Times pointed out that one of the recommendations from Katrina was better emergency back-up mechanisms for the wireless carriers, such as longer-lasting emergency batteries, which have not been widely adopted.  The wireless carriers have resisted many of the regulators’ efforts, and were not routinely providing their outage statistics the way, say, the power companies were during Sandy.  The Wall Street Journal had a similar story. 

So much for having any of those fancy mHealth apps; just think about any chronically ill patients who might have been being remotely monitored by their physicians when Sandy hit.  The wireless carriers are not yet seeing their mission as providing life-critical support to their customers, and it is getting harder and harder to understand why.

Sandy emphatically illustrated that wireless service is one that emergency planners will have to take very seriously going forward.  It has obvious implications for contacting friends and family, getting status updates on the disaster and recovery efforts, and helping direct affected people to assistance.  I only hope they take mHealth equally into consideration.  Not just for the things it does every day, but how to further take advantage of its capabilities when providers and their places of care are unavailable or limited.  Just think of how telehealth, remote monitoring, prescription history, and other applications could be useful in the aftermath of a Sandy.

Sandy has also firmly re-enforced Katrina’s lesson about health records.  We heard that lesson, and have spent much time, effort, and money on it since Katrina, but we find ourselves not much better off in making health records more fluid.  The EHR/HIE industries and their various customers need to step up their efforts and fix this problem -- hopefully before the next Sandy. 

I like the point that Brian Dolan of Mobihealthnews made in a recent post: technology is forcing us to rethink the classic concept of “point-of-care,” focusing more on where the patient is, not where the provider is, or even if the patient and provider are physically in the same place.  He was writing more from a mHealth perspective, but the paradigm shift applies broadly, as those evacuated Sandy patients could attest.

In the 21st century, health information can’t be tied down to paper or even to place, but has to be able to follow the patient wherever he/she receives care.

Remember Who the Customer Is

By Kim Bellard, October 17, 2012

An organization called OpenNotes – primarily funded by the Robert Wood Johnson Foundation – recently released a very interesting study that supports the concept that patients do want to participate in their care with their physicians.  This probably doesn’t surprise patients, but may surprise many physicians. 

In brief, the study allowed patients of three geographically disparate primary care practices to access their doctor’s notes (electronically).  The study included over 13,000 patients from 105 physicians.  The vast majority of patients did view at least one note, and survey results indicate that such viewing notes made them feel more in control of their health and improved their medication adherence.  Contrary to physicians’ concerns, such viewing did not lead to longer visits or to more questions outside of visits.  About 60% of patients wanted the ability to add their own comments to the notes, while one-third wanted to approve the notes’ content (something adamantly opposed by the physicians).

It goes back to one of what I think is one of the central problems in health care: those in the business of health care are doing things about patients, but not necessarily for patients.   

Health records are the case in point.  They are maintained about patients, but are written in a jargon that is virtually unintelligible to lay consumers (and, in the case of paper records – often illegible as well!).  The concept that they belong to the patient in any real sense would come as a surprise to the health care professionals who keep them.  Meaningful use requirements are going to quickly force providers towards more patient access to information, such as clinical summaries of visits and summary of health information.  The easiest solution to this is likely to be a patient portal with a view into an EMR, but that in itself doesn’t mean the view is useful.  Please correct me if I’m wrong, but I don’t believe any of the “meaningful use” requirements relate to how meaningful the information is to consumers.  It is telling that the requirements for how many patients actually view or download the information is very weak – only 5%.

Those in the health care business talk in a language of ICD, CPT, HCPCS, DRG, NDC, DSM, to name a few; throw in insurance terminology to complete the task of confusing consumers.  Each of those grows ever-more complex and insular, driven by needs for more detailed analysis, billing, legal protection, and other purposes.  Now we’re increasingly moving towards widespread use of various quality indicators, which are similarly very well-intentioned but may not quite be answering the questions consumers have, or should have. 

As best I can tell, no one in the health business – physicians, hospitals, payors, labs, IT vendors, etc. – really like the complicated languages that have evolved around them, and all would argue that the complexity greatly adds to the expense of running their business, but I don’t see any groundswell to simplify the situation. 

One might have thought that the movement towards consumer transparency might ignite such pressure, but that hasn’t seemed to have happened.  Transparency is one of those things that everyone is in favor of conceptually, but the details of how to do it and whether consumers will use it remain open.  UnitedHealthcare recently found that only 14% of survey respondents use the Internet to comparison shop for health care treatments and services, compared to 75% who use it to comparison shop for other goods and services, a statistic United hopes to improve through its enhanced myHealthcare Cost Estimator.  Aetna, Cigna, Wellpoint and other Blue plans have their own online cost estimator tools.  

In addition to efforts from payors to help consumers with health cost transparency, there are a number of other efforts.  I had been aware of Castlight Health and The Healthcare Blue Book, but was a little surprised to uncover a plethora of other firms, including ClearCost Health, NewChoice Health, and Change Healthcare.  Some of these are aimed at employees of certain self-insured employers, or members of specific health plans, while a few focus on the general public.  It is admittedly an uphill battle to get consumers engaged in thinking about price and quality, and these various organizations all should be lauded for their efforts to give consumers more and better options for doing so.  That being said, it’s somewhat like the talking dog: it is not that it does it well, it’s just that it does so at all.

All the efforts to make costs more transparent have to wrestle with two key problems: what is the “service” being bought, and how can that service be explained in consumer-friendly terms?  E.g., an “office visit” has numerous CPT codes that could apply, each with its own price, and many visits and procedures are accompanied with other services that have their own costs, which the consumer might rightly view as being part of the original service.  How many of us have had, say, a lab test or an X-ray and then been surprised at how many bills we end up receiving for them?  

At the risk of repeating an overused analogy, compare “buying” health care with buying a computer /tablet from the Apple Store or Amazon.  Computers have their own technical language that can be every bit as arcane as health care, but consumers are not forced to use it or fully understand it to complete their shopping experience quite satisfactorily.  When they are shopping, they get lots of options on price and features, with plenty of reviews, customer feedback, and shopping “wizards” to assist them. 

Buying health care, on the other hand, is more akin to getting your own PC back in the 1970s, which required buying a kit and/or components and then trying to assemble the whole thing yourself.  Health care transparency as we know it begins to look more like giving consumers the prices of each component in your PC and quality indicators from the chip manufacturing process.  Those do mean something, but are not really what consumers want.  The problem is that health care professionals are speaking in Greek (or perhaps Latin!) while we want to hear about our health in our own language.

People talk about “disruptive innovation” in health care, by which they often mean use of various forms of technology.  Technology is going to certainly play an even more significant role, but I have to wonder if the disruption will come instead from organizations which can make the health care experience for consumers simpler –much simpler.  I.e., radically rethink what the “products” are, what the processes should be, and how these are communicated to patients. 

Our health care system has many historical practices and preferences that muddle the roles of the various parties involved in it, but it’s helpful to remember that it all boils down to the patient as customer.  It’s their health, after all.

Remind Me Why We Have Insurance

By Kim Bellard, September 24, 2012

A recent article in The Columbus Dispatch reported on the practice of doctors providing discounts to patients if they paid directly instead of using their insurance.  It got me thinking about far health insurance has strayed from its original purpose.

We ask health insurance to do a lot of things: lessen concern about catastrophic expenses, reduce financial barriers to care, smooth out cash flow of health expenses, even help us manage chronic conditions via disease management and wellness programs.  Insurance does these things because, frankly, there haven’t been many good alternatives.  But that doesn’t mean there couldn’t be.

The Affordable Care Act -- ObamaCare -- requires expanded coverage for preventive care with no cost-sharing, on the premise that this will help people get those serves.  It troubles me that some, perhaps most, people won’t get necessary preventive services unless it is “free” to them at point-of-care.  That tells me something is really, really wrong with how we look at health.  But why does health insurance needs to be the mechanism for providing incentives to take care of one’s own health?

The Dispatch gave several examples of physicians and hospitals offering significant discounts – up to 40% - to patients who pay directly, in order to avoid the administrative burdens of dealing with health insurers.  It also quoted Tom Blue of the American Academy of Private Physicians as indicating they believed there were 4400 physicians nationally who replied in part or entirely on direct payments from patients, although that would seem to include uninsured patients. 

A more direct patient-physician financial relationship may be an idea whose time has come…again.  So-called “concierge medicine” started several years ago, and has developed to the point where it has its own trade association, the aforementioned American Academy of Private Physicians.  The concept of concierge medicine is that patients pay a fixed fee, monthly or annually, and in return they get guaranteed 24/7 access to their personal physician.  No insurance, no billing, no out-of-pocket payments.  

Examples of concierge practices include EliteHealth, MDVIP, and SignatureMD,  There’s even a television series featuring a concierge practice, USA Network’s Royal Pains.  Prices for concierge service vary widely, with some practices aimed at wealthy families and costing tens of thousands per year, while others are more affordable at $1,500 - $2,000 annually.  Proponents believe it greatly reduces the number of patients physicians have to see, reduces hassles with third party payors, and ensure a closer, more accessible physician-patient relationship.

Then there’s “direct primary care” model.  Like concierge medicine, patients pay flat fees for access to personal primary care physicians.  The lines between the two approaches are somewhat blurry, at least to me, but direct primary care tends to use monthly fees instead of annual retainers, and appears to be generally less expensive, often under $100 per month.  It also has its own trade association – Direct Primary Care – and has had legislation passed in both Oregon and the state of Washington to specifically allow the approach. 

Examples of direct primary care practices include Qliance and MedLion.   The DPC website lists over 80 practices in 19 states, some of whom are also listed in the American Association of Private Physicians website.   DPC argues that by cutting out insurers and the practices expenses devoted to billing and administrative hassles associated with third party payors, direct primary care can save 40% of the health care dollar.   

Concierge medicine and direct primary care both emphasize primary care and flat payments to cover essentially unlimited access to primary care services (and, in some cases, many routine services).  Both seek to eliminate insurers from the equation.  It’s interesting that while these efforts are happening, Medicare and many insurers are experimenting with patient centered medical homes (PCMH), which also seek to reestablish primary care as the centerpiece of a patient’s health care needs.  In the PCMH model, of course, insurance is still very much part of the picture, providing additional financial support to the involved primary care physicians.  In an ACO world, though, health insurance may be less integral to PCHM practices.

For all these models, I can’t help but be reminded of 1990’s capitated gatekeeper approaches, which also featured fixed per-member payments (from insurers) and primary care physicians coordinating all care.  It will be interesting to see how these new approaches – concierge, direct primary care, or PCMH – deal with patients with complex needs.  Just as there was with capitation, there will be financial temptation to triage them off to specialists who are still on fee-for-service, and there will be similar concerns about such practices skimming off healthier patients, not to mention wealthier patients. 

I don’t know if concierge medicine or direct primary care will ever evolve out of niche offerings, and their development will be interesting to watch.  The model I think is potentially even more disruptive to the current system is the encroachment of corporate approaches to retail medicine – e.g., TakeCare, Minute Clinic, Walmart’s recent entry into immunizations, among others  All of them work with health insurance, because that’s where the money is now, but all are also quite happy to take consumer’s money directly and to do so in a way that is more like we buy other goods and services, with clearly delineated lists of services and prices.  If other parts of the health care system think those kinds of approaches aren’t coming to them, they are deluding themselves.

Two things I feel strongly that our health care financing mechanisms should achieve is that low income people need assistance with paying for health care services, and no one should have to go broke due to medical bills.  Even for those, though, I can think of solutions which do not require health insurance.  As for cash flow management and chronic condition management, health insurance may actually be one of the less efficient solutions to address those. 

I am not saying there shouldn’t be any sort of health insurance, but given the mess we find out health system in – expensive, uneven access and quality, high administrative costs, etc. – maybe it’s time we rethought what it looks like.  It’s too bad that, as we start to decide what constitutes essential benefits under ObamaCare, we’re still playing small ball.

Round Up the Usual Suspects

By Kim Bellard, September 11, 2012

Two recent reports have added more empirical support to the widely held belief that our health care system wastes significant amounts of money.  I’m shocked, shocked!  As Captain Renauld said in Casablanca, round up the usual suspects. 

The first report, published in Health Affairs, was from UnitedHealth Group.  The authors examined data from 250,000 physicians around the country, focusing on the privately insured population.  Consistent with the years of data from the Dartmouth Atlas on the Medicare population, it showed widespread variation.  The authors report episode costs for procedures vary 2.5 times, while episode costs for chronic conditions vary 15-fold.  Overall, the report concludes that costs could be 14% lower if delivered by physicians meeting certain quality and cost-efficiency designations. 

An even more assertive claim was made by the prestigious Institute of Medicine (IOM).  Their report, Best Care at Lower Cost, believes that as much as a third of spending is wasted – some $750 billion based on 2009 health spending.  The IOM is no stranger to big claims, including the oft-quoted 98,000 deaths annually due to medical error in their landmark report To Err is Human.  In their new report, they conclude that 75,000 deaths could be avoided if every state delivered care as well as the best performing state.  The IOM was more granular than simply claiming the waste is all unnecessary care: $210 billion in unnecessary services, $190 billion in excessive administrative costs, $130 billion from inefficiently delivered services, $105 billion due to prices that are too high, $75 billion in fraud, and $55 billion in missed prevention opportunities.  That’s a lot of targets of opportunity.

The IOM notes some lessons from other industries, and believe significant improvement is possible, on a variety of fronts: using information technology more effectively, creating systems to manage complexity, more focus on making health care safer, improving transparency of costs, quality and outcomes, promoting teamwork and communication between providers, partnering with patients, and decreasing waste/improving efficiency. They believe that the technology is here to support all these, and the problem is better application of it to health care systems and processes.  No mention was made of “death panels” (!), although I’m waiting for someone to bring up that specter.

There are too many examples that illustrate the flaws in the current system.  For example, Johns Hopkins recently reported that as many as a quarter of adult patients in ICUs may die as a result of missed or incorrect diagnoses, resulting in some 40,500 deaths annually.  The authors note that is more people who die each year from breast cancer.  One would think that ICU patients are getting pretty close attention, more than other patients, which make these results all the more troubling (to be fair, of course, they likely have complicated sets of conditions, making diagnosis harder).

More troubling are recent allegations and lawsuits about unnecessary heart surgeries aimed at increasing hospital revenue/physician income, including HCA and St. Joseph-London in Kentucky.  If these allegations are shown to be valid, these practices may just be the tip of the iceberg.  Throw in recent warnings about the overuse of well-intended but over-used diagnostic tests like screenings for ovarian cancer or prostate cancer, or the cost-benefits from increased exposure to radiation via increased imaging, and it makes one wonder if treatment recommendations should come with a warning label. 

The IOM cited technology as a tool to help support improvement in how the health system performs, and there is data which suggest this hope is not in vain.  The CDC reports that 55% of physicians had an electronic health record in 2011, and half of the remaining physicians expected to be using one in the next year.  Clearly, HITECH has helped spur this adoption, as has the trend of health systems purchasing physician practices.  Solo practitioners significantly lag in adoption (29%), and CDC reports a statistically significant difference in adoption from physicians over 50: 49% versus 64%.  More importantly, about three-quarters of adopters believe that the EHR both enhances patient care and meets Meaningful Use criteria. 

Also encouraging is a report from Medpage Today on physician technology use.  They report 9 out of 10 physicians experienced an increase in the use of the Internet in their practice: 71% spend 3 or more hours a day on a computer, 24% use a mobile device 3+ hours a day, and 18% use a tablet 3+ hours per days, all in support of their practice.  Unlike the CDC results, though, they see very little impact of age on technology adoption, except in use of a smartphone.  The Medpage respondents are a stressed bunch, seeing more patients each day and, as a result, seeing fewer drug reps, spending less time with each patient, and reading fewer medical journals/attending fewer conferences.  The last point is particularly concerning to build the nimble “learning” culture that the IOM advocates, which helps account for the finding that almost all respondents are using their devices to keep up-to-date on clinical news and medical education. 

I’ve often been critical of physicians’ reluctance to adopt technology solutions, but I’m increasingly coming to the point of view that it is technology that is failing them.  We’ve laboriously endeavored to get medical records into an electronic state, when the real challenge is deciding what health data we want tracked, and what views/inputs are needed by different types of users – including patients.   I’ll point to a nice column by Shahid Shah that details some of the kind of patient-centered forward thinking we need, as well as to a recent study by Hripcsak and Albers that reminds us that poorly designed data going in has damaging effects on the usefulness of that data. 

Maybe we need to scrap all those legacy practice management systems and EMRs and study what modern CRM systems in other industries can teach us about tracking and knowing patients, as well as take advantage of lessons learned from just-in-time manufacturing to improve care delivery efficiencies.  Add to those all the real-time data that mobile tracking apps and other monitoring devices can provide on patients’ health and we have a shot at disruptive innovation. 

Job number one in improving our health system has to be measuring who is doing what to which patients, and what impact it is having on those patients’ health.  Without better data on those, we’ll still just be rounding up those usual suspects.  

Attention, Walmart Shoppers!

By Kim Bellard, August 20, 2012

I’ve been thinking about something a very smart friend of mine wrote me in response to one of my previous posts: “…I can see where technology and information-driven consumerism might work for some highly motivated and educated people ... but not the masses I see at Walmart.”  I’m sure he meant no disrespect to either Walmart or its shoppers, nor do I, but one can go to pretty much any shopping venue and understand his point. 

The grim statistics are well known -- e.g., we’re too fat, we rely too heavily on medications, incidence of lifestyle conditions like diabetes is soaring, and, of course, we spend way more on health care than any other country.  Despite all that, though, Americans remain pretty cocky about their health, with the vast majority claiming to be in “good” or “very good” health, higher than in other industrialized countries. 

We claim to exercise, with over half claiming to exercise at least 1-3 times per week, but we may be kidding ourselves, as only about 5% report exercising on any given day.  Similarly, Americans are in denial about their burgeoning weight, reporting they have actually lost weight when, in fact, they gained.  The bottom line is that most of us are not really in shape, and it is impacting our health.

One of the most telling responses to this problem appeared recently: Dr. Michael Joyner of the Mayo Clinic suggested that our lack of exercise should be considered a medical condition.  I understand his point, since we’re obviously not doing a great job of staying healthy on our own.  Certainly getting more regular exercise would help many people – and, most likely, they know it – but medicalizing lack of exercise seems to me as more of what got us into this mess.

It’s not that various parties aren’t trying to encourage us to live healthier lifestyles.  In a recent post, Clive Riddle reported on the recent Aon Hewitt 2012 Health Survey of employers, citing in particular the widespread use of financial incentives towards lifestyle changes.  That’s encouraging, and a recent survey by the National Business Group on Health echoed employers’ adoption of wellness efforts, but also reported that over twice as many employers – 43% compared to 19% -- see increase use of consumer-directed health plans (CDHPs) as their most effective strategy for controlling costs.  In other words, employers are happy to try dangling the carrot, but they still plan to use the stick.

Employers aren’t the only ones trying to lead us to improve our health; the government is trying as well.  For example, a recent study found that state laws restricting the sale of snacks and sugary drinks in schools did result in children gaining less weight.  That’s notable for at least two reasons: first, that there are a number of states already legislating such choices, and, second, that such efforts may actually work.  No wonder Mayor Bloomberg wants to ban large sizes of sugary drinks in New York City. 

In a country where, apparently, the government can require you to buy broccoli (as long as they call it a tax, not a penalty!), the prospect of it telling us how to live is a little scary.   Then, again, this is a government that can’t even ensure that its retirement payments, whether Social Security or federal employee pensions – meet their one main test, i.e., that the recipient is actually still alive.  So maybe I shouldn’t start worrying about them monitoring my ice cream consumption just yet.

How did it come to this, that we’ve delegated the responsibility of keeping ourselves healthy to third parties, including physicians, employers, or the government?  Some of the problem may come from the fact that parties in the health care system are, in fact, treating us like consumers.  Not in the respect of competing on price or quality, mind you, but in using advertising to drive consumer decisions based on image.   The saga of the impact of direct-to-consumer advertising for pharmaceuticals is widely known, with such advertising spending exploding to close to $5 billion annually after such ads were allowed in 1997.  Some are calling for an end to DTC pharmaceutical ads, as the CBO studied last year.  The hospitals are also getting into the act, pouring money into advertising, as the New York Times reported last year.  Throw in spending by various diet and alternative medicine alternatives, and it becomes clear that we face a lot of forces telling us that some other person and/or product is the key to our health.  When we don’t directly pay for some large portion of those, as health insurance can allow us to believe, the temptation to not shop prudently is almost irresistible.   We may shop for flat screen TVs at Walmart, but when it comes to health care, we think we deserve to be Neiman Marcus shoppers.

There are certainly many situations were medical advice and treatment is not only appropriate but also necessary, and thank goodness that our clinicians are always finding more ways to combat our various maladies.  We have more and better options all the time, even though often those options are more expensive and sometimes not as clearly beneficial as we should expect.  But the responsibility for our health does not lie in those clinicians’ hands, much less in the hands of our employers or government officials.  I don’t have any reason to expect that Americans will be better at managing their health than they are at managing other aspects of their lives, but we shouldn’t be worse either. 

There is a lot efforts around “patient centered medical homes,” which include many good ideas, especially better coordination among health care providers.  As long as the focus is “medical,” though, the “patient centered” part of it is going to lack important components necessary for improved health.  Health is the result of a complicated interaction of genetics, environment, lifestyle, social influences, and medical interventions, to name a few.  We need to break out of the medical model to truly get at health.

We talk about the health care system, but in truth it is still the medical care system.  If we’re serious about improving health, and impacting the quality and cost of medical care, maybe we need to step back and think about a health care system really should look like. 

I’m sure that some Walmart shoppers are spending beyond their means, buying things they don’t need and can’t afford.  Some are perhaps even in bankruptcy.  But I like to think that most of them live within their means, and have learned how to manage their financial health.  We should be thinking about what in our current system leads us to not expect them to do the same with their actual health.

Too Bad About Your Coverage

By Kim Bellard, July 30 2012

There’s more data that shows health coverage is good for people.  Too bad fewer people than expected will have it. 

The New England Journal of Medicine recently reported on a study by Sommers et. alia which showed that Medicaid expansions can be linked to lower mortality rates in the impacted populations, along with better access to care and improved self-reported health status.  Not surprising, really, especially on top of last year’s study from the Oregon Medicaid program, that also showed that those lucky enough to win their coverage “lottery” did fare better. 

ACA was supposed to greatly increase the population covered by Medicaid, but with the Supreme Court ruling’s loophole on states adapting the expansion, that picture no longer looks quite as rosy.  The Congressional Budget now estimates that 6 million fewer people will get coverage through Medicaid and CHIP, although they obviously do not yet know which states will elect not to expand their programs.  CBO believes that half of those 6 million people will get coverage via the insurance exchanges – although I’m not clear why someone who would have gotten coverage in the Medicaid expansion would have income above the magic 133% of poverty level – leaving a net increase of 3 million more uninsured than under the original ACA estimates. 

CBO also believes those 3 million additional enrollees in the insurance exchanges will cost more than average, and as a result add about 2% to the cost of individual insurance in the exchanges.  That is another hidden “tax” on the private sector.

Whenever I think about the injustice of millions of poor people not having access to coverage while middle class people get subsidies, I remind myself that this is nothing new.  We’ve been doing that with the tax preference for employer health coverage for decades, so this latest indignity merely makes things quantitatively worse, but is not qualitatively new. 

Speaking of employer health benefits, Deloitte’s recent survey of employers forecasts 9% of employers will drop their health coverage, with another 10% uncertain what they will do.  This compares to the GfK study estimate from last winter of 12% drop/32% uncertain, and the now infamous McKinsey estimate from last summer that 30% of employers would drop coverage.  Deloitte’s survey, though, was only of employers with more than 50 employees; if smaller employers were included, the number would no doubt be higher than the 9%.

Reasonable experts can probably agree that the estimate of employers initially dropping coverage is somewhere in that 10-20% range, recognizing that many employers have not yet made up their minds.  The trouble I see is that once this ball starts rolling downhill, it won’t stop; it’s only going to pick up speed.  No one is going to want to be the last one in the benefits pool.

A little history lesson might be helpful.  Health insurance used to be virtually all fully insured and community rated.  That worked for a while, until some employers and insurers figured out that both could benefit by offering lower rates to employers with lower cost populations.  That gradually led to the demise of community rating – HMOs were the last to give up the ghost – in the group market, as fewer and fewer employers were willing to subsidize their higher cost fellow employers.  Use of employer-specific claims experience became the norm, especially for larger employers.  In the early 1970s, spurred by the passage of ERISA, employers also realized even with experience rating, being part of the insurance pool at all still had limitations they wanted to avoid, and they began to adopt various forms of self-funding.  It initially was only for very large employers, but, again, gradually became adopted by employers or more and more sizes – some of whom were/are really too small from an actuarial point of view to justify it.  Again, once some employers escaped being insured, other employers became more uneasy about still being part of the insurance pool.

Self-funding had the specific advantage of escaping state benefit mandates, although recent federal mandates, including ACA’s, are rapidly eroding this advantage of self-insurance.  The ACA requirements have added costs to most employer plans – e.g., coverage dependents, unlimited maximums, no coinsurance on preventive services – and the government’s involvement in their benefit design is probably not sitting well with many employers who thought they had escaped it.

At this point in time, most group business is self-funded.  Kaiser Family Foundations’ 2011 Employer Health Benefits survey found 60% of employees were in self-funded plans, up from 49% in 2000.  Over 80% of employees in firms with 200 or more employees are in self-funded plans.   I.e., to the extent they can, employers have made rational business decisions not to subsidize anyone they don’t have to.

Why anyone would believe employers would not act the same way once some employers start dropping their health plans is beyond me. 

Employers have invested a lot in their current health plans.  They have shown much thought leadership in driving changes to both insurers and providers, but the auto and steel industries, to pick two, have shown us how legacy health costs can hamper domestic and local competitiveness.  Right now, not offering health plans is a huge disadvantage in attracting and retaining employees; Deloitte’s survey shows over 80% of employers cite attracting/retaining employees as a key reason for offering health benefits.  However, it would only take a few bellwether employers to start dropping coverage to start a rush by other employers for a similar exit.

Employer coverage still has the advantage of the tax preference, plus the fact is that the health insurance exchanges are not up and running and the individual market is not yet reformed or robust.  Come 2014 or 2015, though, the exchanges may be a more appealing option, especially for smaller employers, and if anyone believes the tax preference will survive as is in the coming deficit reduction wars, well, good luck with that.

People aren’t going to keep their current health plan.  Many poor people will still not be protected by Medicaid.  We will still have some 30 million uninsured.  And we’re still not getting good value for our exorbitant health care spending.  Until that problem is solved, everyone’s coverage is in danger.

ACA Is Alive! Now What?

By Kim Bellard, July 2, 2012

It seemed somehow fitting that the first reports about the Supreme Court ruling on the Affordable Care Act got it wrong – both CNN and Fox News initially announced the mandate had been struck down.  Debates and discussions about ACA have never been very accurate, and often not rational.  It would be nice to think that the Supreme Court’s ruling has finally ended the debate, but no such luck.  Gov. Romney and other GOP leaders have already renewed their vows to “repeal and replace” ACA (or, as they call it, “ObamaCare”), so even in the best case scenario we can expect the debate to continue at least through the November elections, which could either throw water on the protest or ignite it further, depending on the results.  

Of course, the Court’s decision also included a couple of poison pills, handing the conservatives another bone to gnaw on by labeling the mandate a tax, and creating the potential for some very strange gaps in coverage by allowing states to reject the Medicaid expansions.  We could end up where poor people still lack coverage while essentially middle class individuals are getting subsidies for their health insurance.  Both aspects of the ruling add fodder for the debate.

Honestly, I’m not sure it much matters.  Certainly there are lots of things about the law I don’t like, especially the shady accounting on which it was passed, but having 50+ million Americans without financial protection against health care expenses is unacceptable, so until someone else comes up with a better plan to address that, ACA it is.   However, I keep remembering that ACA doesn’t really solve the underlying problem of getting value for our health care spending, ACOs and VBP initiatives notwithstanding.

The math doesn’t work for me.  For example, under ACA, subsidies for insurance premiums and cost-sharing are available to people under 400% of the federal poverty level.  I.e., we’re subsidizing health insurance for over two-thirds of the population.  That is not a sustainable number, especially given the fact that close to 50% of the population pays no federal income tax.  We have an unaffordable product being funded by too few people.  Any actuaries in the crowd can tell how that story will end up. 

Then there is the bottleneck caused by our physician shortage.  According to the federal government, almost 60 million Americans already live in Health Professional Shortage Areas, and the American Academy of Medical Colleges forecasts a shortage of 124,000 physicians by 2025.  AAMC also says that the average medical student graduates with over $160,000 in debt, and that number keeps going up with annual tuition increases.  Throw in the existing $12 billion of costs for residency programs, and one has to wonder how we will afford all those new physicians; all those costs are before those new physicians start generating additional health care spending. 

So we’ve got a product that is apparently too expensive for two-thirds of the population, whose costs are largely driven – directly or indirectly -- by a resource that is in short supply and yet is very expensive to train and maintain.   Throwing more money into this system doesn’t seem like a particularly prudent action.  

There are clues to what a different type of health care system might include.   Take, for example, Minute Clinic and its competitors.  These so-called “retail clinics” are booming; NPR says there were more than 1300 at the beginning of the year, and Minute Clinic itself plans to have 1,000 of its own clinics by 2016, double its current number.   These clinics have in common features such as the use of physician alternatives like nurse practitioners, convenient locations, and reliance on technology to improve the patient experience and reporting.  They won’t soon replace, say, surgeons, but there is a host of health problems for which they are well suited.

Technology is another inarguable part of our health care system’s future, and not just the HITECH push to EHRs and HIX.  In a previous post, Clive Riddle talked about the potential role of self-service in health care, referencing Accenture’s recent report on the topic.  Long story short, Accenture reports that, yes, patients overwhelmingly want more self-service in their interactions with the health care system.  They still want an option of dealing with their doctor in person, but they also want a host of other options, such as online appointments and prescription refills, or email communications with their doctors.  All of these technology options already exist, but are not widely available.  Our health care system still features large numbers of decentralized, technologically backward providers.  In 2008 (the most recent data I found), almost one-third of physicians worked in practices with one or two doctors, with another 15% in practices of three to five physicians.  Presumably these small practices are much less likely to be able to provide patients many technology options.  This is one reason physicians are rushing towards being purchased by hospital systems, although many of those systems don’t have a great record on patient-oriented technology. 

PWC sees a similar shift towards a technology/patient-centered future in their recent mHealth report.  Their report is broader than just self-service, and surveyed patients, payors, and physicians, in the U.S. and elsewhere, but focused more on mobile solutions.  They found that patients are fairly positive about the potential for mHealth solutions to help them, while physicians are much less so – 42% worry mHealth will make patients too independent.  The Pew Research Center recently found that 88% of Americans own a cell phone, over half of whom use it to go online, and 17% of who do most of their online browsing on the phone.  The number and breath of mHealth applications is astonishing, and growing rapidly, and it certainly is one of the most exciting parts of health care right now.  The future of health care may not be mHealth, but it will most definitely include it. 

I particularly liked one of the final quotes in PWC’s report.  According to Peter Benjamin of Cell-Life, “the bits of mHealth that work won’t be call ‘mHealth’: they will be called ‘health’, in the way that nobody talks about ‘electric health’ and no country has a ‘stethoscope society’.”  We shouldn’t get caught up in mobile versus other technologies -- as PWC concluded, it’s the solution, not the technology.  Whether eHealth or telehealth or Health 2.0 or any of the other plethora of terms that are out there; what works – to improve patient care and the patient experience – need to get incorporated into our health system.  Except we shouldn’t just layer these new things on top of the current dysfunctional system; we really need to make them part of a reengineering process that rewards solutions that provide better value.  If we were to design a health care system from scratch, with better value as a focus, what would it look like and how much cheaper could it be?

I don’t know the answer to that question, but I think it starts with moving away from a physician and institutional orientation to a true consumer orientation.  We need to provide consumers with appropriate, on-demand support, assistance and advice at the right time, not just when they happen to stumble into a doctor’s office or hospital.  Bricks and mortar aren’t going away, but they are an awfully expensive approach.  Interestingly, some third world approaches to health care – like some of their mHealth solutions -- may have something to teach us, if we can learn to have the best of both worlds.

If the drama about ACA has taught us anything, it’s that expecting a legislative approach to such reengineering is like waiting for Godot.  Change is going to have to be driven by the parties in the system – the payors, the providers, and especially we patients.  Change will be hard, and will create many new “winners” and leave many existing parties in the system out of luck.  Our choice, though, is either to let our current system drive itself, and our economy, to collapse, or to change it in ways that make more sense.   The good news is that there’s no reason our system can’t be both better and less expensive – there’s so much waste, inappropriate care, fraud, and inefficiency that, if we have the brains to identify the sources of these and the courage to eliminate them, we can get a system that provides the value we all say we want.

Exchange Exchanges for What?

By Kim Bellard, May 21, 2012

Last week HHS released new guidance on their approaches for health insurance exchanges, as well as announcing $181 million in exchange establishment grants.  This brings the exchange grants to $1 billion over the last two years.  Among the states, only Alaska did not apply even for a planning grant.  (For detail on state activity, see here). 

HHS has bent over backwards to give states options for their exchanges.  The most recent guidance allows states to run the exchanges or to partner with the federal government in running them.  Of course, if a state does not act, the federal government would run an exchange on behalf of the state’s residents.  States have until November 16, 2012 to inform HHS about what type of exchange they intend.  HHS had also previously given states discretion in defining necessary benefits.  The exchanges are scheduled to go into effect as of January 1, 2014, under the provisions of the Affordable Care Act (ACA).  The interested reader can view a nice overview of the recent guidance here or read the actual guidance.

Many states are not keen on the idea of an exchange under ACA.  New Jersey Governor Christie recently vetoed a bill to set up an exchange in that state.  Other states that have recently expressed wariness about setting up exchanges include Illinois, Louisiana, Michigan. Minnesota, and South Dakota.   Curiously, Illinois and South Dakota were among the states in the most recent set of grants announced by HHS, which illustrates that taking money from the federal government is not the same as agreeing with what it wants you to do it.

Of course, much of the resistance is ideological, with Republican legislators and/or Governors doing what they can to offer resistance to ACA in an election year.   It’s too bad that exchanges are caught up in that fight, because there are good reasons to see them as important components of the health care system with or without ACA.

The two operational exchanges in the country – Utah and Massachusetts – predate ACA, and were set up for distinctly different ideological reasons.  Massachusetts, of course, had its own health reform bill, including a mandate for coverage, while Utah was seeking to facilitate coverage for uninsured but employed individuals.  As might be expected by the political make-up of each state, the Massachusetts exchange has a more regulated approach, and the Utah exchange a more free market approach, which only demonstrates that health reform solutions can cover the political spectrum. 

Even more interesting is that the private sector is interested in the exchange concept as well.  On one level, shopping sites such as ehealthinsurance are a type of exchange.  ehealthinsurance has been providing a consolidated online shopping experience for health insurance for over a decade, and are a leading source of sales for many carriers.  They’re even licensing their underlying technology, such as to power a private exchange for Blue Cross Blue Shield of Minnesota.  That exchange supports a defined contribution plan that employers can use to give their employees more choices.  The Minnesota Blues may have felt pressure from competitor Medica, which announced its own private exchange earlier this year.  The Medica exchange is powered by Bloom Health, which itself was acquired last fall by Wellpoint, HCSC (the holding company for Blues plans in Illinois, Texas, New Mexico, and Oklahoma), and Blue Cross Blue Shield of Michigan.   Obviously those large Blue plans see a big future in exchanges.

Other Blue plans are joining the movement, including Highmark (with Array Health) and Blue Cross Blue Shield of Kansas City.  Of course, it’s not only the Blues that see a new world in private exchanges.  Companies such as Liazon or ConnectedHealth started out aiming to assist consumers in selecting health insurance, but now are reorienting themselves to an exchange approach.  Consulting firms such as Aon Hewitt and Towers see themselves in the exchange business, because even their larger customers – even self-funded ones -- are interested in that approach.  Towers just purchased Extend Health, which claims to be the largest private Medicare insurance exchange.     

Let’s face it: employer-based coverage may have seen its heyday, regardless of what happens to ACA.  A recent survey by GfK Custom Research found only 56% of employers are sure they would keep offering coverage once ACA fully kicks in; 12% said they would drop coverage, and almost a third did not know what they will do.  CBO recently estimated only a small – 3 to 5 million people – loss in employment-based coverage due to ACA.  Time will tell how large the effect is, but it’s a safe bet that the number is going down, not up.  EBRI’s analysis of Census data suggest that the percentage of people with employer coverage has steadily declined over the past decade, dropping from 69% to 59% from 2000 to 2010.  Those numbers reflect both a shift in jobs into industries less likely to provide coverage and employers finding offering coverage increasingly too costly, and neither of those trends is going away, regardless of ACA’s fate.  There is going to be more directly purchased individual coverage. 

Exchanges – private or public, through an employer defined contribution approach or for individual coverage – should help consumers by providing more choices, facilitating meaningful comparison of choices, and simplifying enrollment.  What’s not to like?  

When you come to think about it, the tax preference for employer-based coverage is nice, but it may increasingly rankle more consumers to have their employer dictate not only what options they have but also what specific treatments, diagnoses, or procedures are covered – as the recent contraception mess highlighted.   I have previously written on these negative aspects of the employment-based system.  Shouldn’t we all have broad choices, with easy comparisons? 

The bitter partisan feuds over ACA and the American Recovery and Reinvestment Act (which included HITECH) obfuscate some of the good ideas contained in them.  I have a hard time seeing a future of our health care system (absent single payor) that does not include:

• provider structures similar to ACOs;
• payment approaches based on value-based purchasing;
• increased health IT, such as EHRs and health information exchanges;
• health insurance exchanges.

Those genies may be out of the bottle, as both the public sector and the private sector are pursuing these concepts aggressively, and neither is likely to stop even if ACA is struck down or repealed.  It would be fitting, and perhaps ironic, if the fruits of these approaches end up being ACA’s true legacy.  

The Price Is (Not) Right

By Kim Bellard, April 25, 2012

I noticed several recent articles and studies about some of the problems caused by the crazy ways we price care in our health system.  If they made a reality show about it, it’d be less The Price Is Right than it would be Survivor. 

Let’s start with a study published in the Archives of Internal Medicine, titled “Health Care as a Market Good?  Appendicitis as a Case Study.”  The authors studied costs for treatment of acute appendicitis, looking at data in California hospitals.  One might assume a fairly small range of cost for this, given that the treatment options are not wide.  They found that costs varied from $1,500 to $183,000; the patient who cost $183,000 admittedly had cancer, but received no treatment for cancer for the stay in question.  Dr. Renee Hsia, the lead researcher, told The New York Times, “There’s no rhyme or reason for how patients are charged or how hospitals come up with charges.  There’s no other industry where you get charged 100 times the same amount, or 121 times, for the same product.”

Indeed. 

Of course, when patients have insurance and go in-network, they usually don’t get exposed to most of the impact of this variation, although increased cost-sharing even for in-network services still makes this an issue.  For uninsured patients, or patients who go out-of-network, it can be much worse.  The Minnesota Department of Health recently alleged consumer protection abuses of a company – Accretive Health -- hired by hospitals to ensure patient bill collection.  According to the report, the company used “boiler-room-style sales atmospheres'' at Fairview's seven hospitals using collection quotas, cash inducements and in-house competitions to squeeze cash from patients before they were treated.”   The practices addressed deductible, coinsurance or other patient responsibilities, either from the current services (yet to be rendered) or from prior unpaid bills.  I wonder if they at least were specific about how much the patients would owe.  I also wonder if they add treatment for the high blood pressure or twisted arms caused by the strong-arming to the list of services. 

Not surprisingly, this problem isn’t limited to Minnesota or to Accretive Health.  For example, the Charlotte Observer and the News and Observer of Raleigh investigated how area hospitals were suing patients to collect debts.  The newspapers found North Carolina hospitals filed such suits over 40,000 times for the five years ending in 2010.  The majority of lawsuits came from two systems, both of which are non-profit.  The investigation notes that some of the hospitals in question made sizeable earnings over the same period, despite their non-profit status, and found numerous instances where the hospitals did a poor job of determining if the patients qualified for programs that would assist with their bills.  It’s tough to get sick, especially when your health care provider slaps a lien on your house for charges that you had no way of predicting in advance.

Then there is what has happened with Fair Health.  This is the database that was set up to settle New York’s 2009 dispute with Ingenix about how that company established “usual and customary” charges, as used by many health insurers around the country to set payment limits on out-of-network services.  It seems that many insurers have decided to adopt a different methodology to calculate out-of-network liabilities, based on a percentage above the Medicare payment levels.  New York regulators believe that many New Yorkers are ending up owing more under the new methodology, even though insurers pay anywhere from 140 to 285 percent of Medicare rates.  It’s not entirely surprising that insurers have adopted the new approach, given that Fair Health wasn’t actually up and running until last year and the Medicare rates are much more predictable than the approach based on “usual and customary.”   I suppose it is possible that Medicare payment levels truly are that low, or that some providers truly deserve payment levels several multiples over what Medicare would pay, but both seem doubtful.  One would think that, say, 200 percent of Medicare payment rates would be sufficient as a payment level, but maybe the patient is getting an appendectomy in California. 

It boils down to some usual culprits:

• Provider charges aren’t subject to competition.  They can calculate them in virtually any way they want, at whatever level they choose, because their payor customers negotiate more realistic levels and their retail customers usually aren’t told charges in advance.  Virtually no one is shopping services based on price.  It’s crazy that the most vulnerable patients are the ones most likely to be subject to these entirely arbitrary and often unrealistic prices.
  
• The data are hard to find and often not very useful.  Many health plans have versions of price or quality data, and there are a variety of state and federal requirements for providers’ posting of some prices.  Be that as it may, consumers usually don’t have a good idea about what set of services they’ll receive, much less how much they will cost.  And it’s not just consumers who are ignorant; physicians are often in the dark about how much things cost as well (see, for example, Sehgal and Gorman).  Many providers probably have some idea of their costs for the services they most frequently provide, but I’m willing to bet that few have any accurate idea about the costs in the rest of the health care supply chain their patients will go through.  Think Apple doesn’t know the prices throughout their supply chain?
  
• Consumers don’t care enough.  The vast majority of consumers – even those in consumer-directed plans – still don’t seek out cost or quality information, even when it is available (see, for example, EBRI’s Consumer Engagement Survey).  Consumers also don’t necessarily make great decisions even when they get data – for example, Hibbard, et al. found that when just shown costs, consumers still thought higher cost would translate into higher quality.  The researchers found that the cost data needed to be paired with easier to understand quality of data for consumers to make better choices.
  

Perhaps they should make a health care version of The Price Is Right after all.  It might be amusing to watch various participants in the health care system try to guess how much things cost.  Then, again, it might just prove boring, because I doubt anyone would “win.”

A Different Way to Fix Medicare

By Kim Bellard, April 5, 2012

Two recent public statements made me both smile and despair about saving Medicare.

The first was President Obama’s recent attack on the budget proposal put forth by Rep. Ryan and passed by the House.  The President has no shortage of issues with that budget, but one of his specific attacks was the way Ryan proposes to reform Medicare, by turning it into a premium support program.  The President and many other leading Democrats charge that the approach would be the end of Medicare as we know it. 

“Ending Medicare as we know it” is a curious bogeyman.  The benefit design is overly complicated and archaically incomplete (forcing most senior to buy Medigap policies), the program is hyper-regulated, it has a terrible track record on combating fraud and abuse, and it is one of the biggest fiscal time bombs for the country.  This is what we are fighting to keep?  The thing Medicare does uniquely well is its near universality, and the existing program structure is not the only way to accomplish that goal.

The critics don’t seem to recognize that the Ryan proposal wouldn’t impact existing beneficiaries, and doesn’t really look all that different from the way they plan to have the under-65 obtain coverage through the health insurance exchanges under the Affordable Care Act (ACA).  By the same token, Republicans shouldn’t be too smug, because it’s hard to rationalize their support for delivering Medicare for all through the private market via public premium support with their bitter antipathy for ACA.  They are two sides of the same coin.  In both cases, the important question is whether the premium support/subsidies would actually be realistic – as opposed to becoming balancing items for future budget cuts. 

Short of a single payor system, it’s hard to see a long or even moderate-term future that doesn’t end up looking like something built on the Ryan-Wyden frame.  Medicare can only limp along so long in its current form.  It’s too bad the partisan politics cannot recognize the areas of commonality and work towards compromise. 

More encouraging was the recent call by nine physician specialty societies to reduce the use of many common tests and procedures.  Each society offered up five such tests or procedures.  “More isn’t necessarily better,” said Dr. Christine Cassel, president of the American Board of Internal Medicine.  “There are a number of things that not only aren’t necessary and potentially costly, but also have a risk of harm for the patient.”  The specialties are launching a “Choosing Wisely” campaign to encourage the various stakeholders to discuss potentially unnecessary care.

Well, kudos to the various specialty societies for finally admitting this, although one has to wonder: why now?  Perhaps they were worried that the IPAB, the review board charted by ACA to recommend ways to slow Medicare spending, would do this for them.  It would have also been nice had the call been accompanied by some teeth.  I.e., are they going to monitor the use of these tests and procedures?  Are there any consequences to physicians who continue to use them unabated?    

Which brings me to fixing Medicare.  We need to recognize that not all care that is delivered is appropriate – and not all physicians are equally good at delivering it.  Yet we continue to pay providers while largely ignoring those facts.   There are “value-based purchasing” approaches in ACA, but are far too modest to have significant impact.  Accountable Care Organizations may well be “the” answer, or at least part of an answer, but they still beg the question of how to identify more effective providers.  This is an area where the federal government can help:

• Quality measures: Give the various medical specialty societies one year to propose how quality should be measured for each specialty, subject approval by CMS.  The societies would most likely object to both the mission and the timeline, but, honestly, they’ve had decades to think about it.  Whatever measures they propose would have to be quantifiable, be based on patient outcomes, and reflect at least in part patients’ views about their care.  They also must not discourage physicians from seeing sicker patients.
• Measuring quality: once the measures are established, there should be a year to collect the applicable data for each physician.  Obviously, obtaining the data through EHRs would most likely be most accurate, but inability to collect data from a physician practice would not be an excuse.
• Tiering physicians: Medicare payment levels would be based on tiers of performance.  I.e., the top thirty percent of physicians would be paid, say, fifty percent above the fee schedule for E&M codes, and perhaps an extra twenty percent on procedure codes.  The next thirty percent of physicians might get an extra twenty percent on E&M.  The next thirty percent would face a reduction of twenty percent on both E&M and procedure codes, and the bottom ten percent (and practices not reporting) would also receive the twenty percent cut, but also would be on “probation.”  Two continuous years of bottom ten percent performance would cause them to be ineligible for Medicare payments.
• Public disclosure: The performance results and tiers of physicians would be readily available and disseminated to Medicare beneficiaries, who hopefully would use them to seek out better performing physicians.  Ideally, Medicare would change its coinsurance so that beneficiaries using higher tier providers pay lower copay amounts (since the payment levels – and thus the corresponding coinsurance amounts – would be higher). 

Of course, the same approach could, and should, be applied to hospitals and other Medicare providers.  There is an implicit assumption that higher quality providers are not also higher cost providers, although that has not been solidly demonstrated.  Cost/benefit could be part of the metrics, but with the specter of rationing and “death panels,” we may not be ready for that. 

Personally, I’d also wipe out the Part A, Part B Part D distinctions and institute a more modern, comprehensive design with unified deductibles and coinsurance, as well as the unlimited maximums ACA imposes on private plans.  The advisability of Medigap policies has to be questioned as well.  Those policies reflect seniors’ desire to limit their exposure, but may end up protecting them a little too much.  Having consumers face some direct financial consequences to health care choices is not a bad thing, as long as those consequences have appropriate limits. 

I have no doubt that such a change would be a tsunami for our health care system, with both intended and unintended consequences.  We probably would not get it entirely right straight out of the gate.  I also have no doubt such proposed changes would meet with fierce opposition from lobbyists and Medicare loyalists.  It’s hard to argue against pay-for-performance in principle, but they could fairly point out that we have neither the desired measures nor effective mechanisms with which to collect them.  Those may be valid points, which simply underscores the point: why not? 

American politicians like to brag that we have the best health care in the world.  It may well indeed be available here, but no one can plausibly claim it is uniformly distributed or easy to find.  Proximity and familiarity cast a rosy glow over local providers.  We can and should do better.  So let’s use the big Medicare stick to finally start measuring and paying for better performance.  

Is There Life After Mandates?

By Kim Bellard, March 29 2012

This week the health policy, legal, and political worlds have been focused on the Supreme Court hearing oral arguments about the constitutionality of the Affordable Care Act (ACA).  If the passage of ACA was a once-in-a-generation piece of legislation, the Supreme Court review has been the inevitable sword of Damocles hanging over it.

After two years, ACA remains unpopular, with roughly equal percentages of the population opposed to it as supporting it (see, for example, Pew or Kaiser Family Foundation surveys), with the mandate requirement of the bill driving much of the unpopularity.  Ironically, the provisions that health insurers must cover all comers, without preexisting condition exclusions, are widely popular, even though the mandate was included explicitly to offset the risk of those provisions. 

I have to confess that the mandate never bothered me too much.  I’ve been following health policy long enough to remember that the idea of a mandate is neither new nor a Democratic proposal; it has as many Republican roots as Democratic.  I also remember that candidate Obama opposed the mandate before he became President.  Still, the slippery slope – aka, the Judge Scalia “buying broccoli” – arguments are not without merit: where does the federal government draw the lines of its authority?  The Solicitor General Verrilli had no good response for that line of questioning, which may have doomed ACA.  In the oral arguments earlier this week, several of the Justices showed skepticism towards the mandate, but were less clear about its potential severability – i.e., can ACA survive without the mandate?

There are two reasons why I’ve never been too troubled by the mandate.  For one, it’s not that strong a mandate in the first place.  The mandate never applies to low income individuals – who are most likely to be without insurance – and the penalty for not having insurance caps out at $2000 per family/2.5% of family income.  Depending on one’s age and income, not having insurance might be a rational trade-off; the mandate won’t sweep all those low risk young people in.  Despite having a mandate there for five years now, The New York Times recently reported that 120,000 residents of Massachusetts – some 2% -- still remain without insurance, of whom only 48,000 paid a penalty, so we shouldn’t expect ACA’s mandate to work miracles either.

More importantly, the mandate is, in my mind, less important than the subsidies.  Despite the horror stories trotted out by the Administration and other supporters of ACA, by far the vast majority of people who lack health insurance lack it because they cannot afford coverage, or choose not to buy it – not because they cannot qualify for it.  As evidence of this, HHS admits that only 50,000 people have enrolled under the high risk pools set up by ACA as an interim measure – far short of the 375,000 initially projected.  Think about that: 50 million uninsured, and the most optimistic estimate projected less than 1% of them would take advantage of guaranteed access to health coverage – and those projections proved wildly high.  HS has tried dropping rates to entice more high risk individuals, but they’re not buying.  The problem isn’t access, it is cost.

There is considerable passion on both sides of ACA – people seem to either love it or hate it (and Kaiser Family Foundation says 40% think it has already been struck down!).  The law was carefully designed so that most of the taxes/penalties would not kick in until after the 2012 elections, yet here we are with ACA as one of the focal points of the election anyway, with the Supreme Court decision expected to be delivered in June, just in time for the final campaigns.   One likes to think that the Supreme Court will base its decision purely on the constitutionality of the law, as opposed to the desirability of what the bill accomplishes or the politics of the situation – but that would be naïve. 

Despite the pundits’ predictions, it’s pointless to predict how the Court will rule.  If the mandate does end up being stripped out, there are several options that could help take its place (assuming anything can get through the hyper-partisan Congress).  For example, simply keep the subsidies and the high risk pools.  We might need the health insurance exchanges to help set the market prices for the subsidies, but maybe not.  We could also allow uninsured persons an annual limited enrollment period, similar to how an employer plan operates, and as a last fallback we could always open up the Federal Employees Health Benefit Plan to uninsured citizens – it is one of the largest health insurance programs in the country and so could accept the risk, and it is already closely overseen by the federal government. 

Of course, with a small shift in the political winds, conservatives may find themselves hoist by their own petard – instead of a mandate to buy private coverage, some future Congress could pass a broad-based tax to fund universal coverage, which would almost certainly be constitutional.  Such a program could come with a public option – or simply with “Medicare for all.”  Some cynics think that has been the goal of ACA all along.

I can’t help but to equate, on some level, the opposition to a mandate to the recent (and ongoing) furor over covering contraceptives.  Opponents of contraceptive coverage do not seem to recognize a difference between being required to pay for something they object to from being required to do that something themselves.  We all pay for things that we may morally object to: my federal taxes pay for members of Congress to go on junkets, my state taxes fund the death penalty, and even my auto insurance premiums subsidize premiums of drivers with DUIs.  I don’t approve of those actions, but I’m not forced to drive drunk or to perform the lethal injection.  It’s the same for subsidizing other people’s contraceptive coverage, or coverage generally.  People who live in a democracy, particularly the uniquely American version of democracy – have to accept that they don’t always get their own way, that compromise is necessary.  Other people have rights too.  Democracies require shared sacrifices.

The sad thing about the debate on the mandate, like ACA in general, is that it simply doesn’t address the real problem: exploding health costs and how to reshape our health system to better deliver value.  Mandates and insurance reform should be corollaries to the outcome of that debate, not the core of the debate.

It’s the Data, Stupid

By Kim Bellard, February 21, 2012

Two announcements by payors last week caught my eye – both relating to payors and to health care data. 

Last week UnitedHealth announced that its Optum division would offer cloud services for health data, allowing health care providers and even other payors to move and access data via the cloud.  They are even extending the Apple analogy further by opening up their platform to outside developers, so that those developers can develop “apps” for the Optum platform.  They cite the example of an app that would make it easier for providers to structure payments in “bundles of care,” as are expected for ACOs. 

At the same time, three Blues plans – Horizon (NJ), Highmark (PA), and Independence (PA) – announced they had partnered with HIT company Lumeris to buy NaviNet.  NaviNet is a platform many health plans have used to facilitate real-time electronic connectivity with physicians and other health providers; NaviNet claims over 70% of US physicians use its platform.  The partnership with Lumeris is intended to improve NaviNet’s ability to communicate clinical information – in addition to eligibility, claim, and benefit information – and to facilitate ACO offerings.  Undoubtedly other Blue plans, not to mention other NaviNet customers such as Aetna, will be watching the acquisition closely.

The focus on data is by no means new to payors.  In the mid 1990’s UnitedHealth started building its data and analytics capabilities, eventually becoming Ingenix and now part of OptumInsight.  Aetna and Wellpoint also made acquisitions to beef up their data capabilities – Aetna acquiring ActiveHealth in 2005 and Wellpoint following suit in 2008 by acquiring Resolution Health.   Not to be outdone, Humana acquired Anvita Health, another health analytics company, this past December.

Equally interesting is that the payors aren’t just interested in analyzing the data; they want to help move it as well.   In 2010 UnitedHealth acquired Axolotl, one of the leading vendors that service the health information exchange (HIE) market, a market is that growing rapidly due to the influx of HITECH federal funds for HIEs and Regional Extension Centers (RECs).  Not to be outdone, a few months later Aetna acquired Medicity, another leader vendor for HIEs.  Although Axolotl and Medicity are the two largest HIE vendors, they are still estimated to account for less than 20% of the HIE market.  That would seem to leave the window open for other payors to acquire some of the remaining HIE vendors, but at least one leading firm – Chilmark Research – thinks participation in regional HIEs efforts may make more sense, given typical payor market shares and potential antipathy from providers and other payors.  

So what are the payors up to with these moves?  Some experts think they are diversifying to help offset PPACA’s limits on medical loss ratios (MLRs).  There probably is some truth to this, but we need to keep in mind that there is not as much actual insurance as most people think.  Well over half of health insurance today is self-insured, meaning the MLR rules do not apply to it and that the payors are doing the administration without the risk.  The main insured markets are individual coverage, small group (under 50 or 100 employees), and Medicare Advantage.   Historically not every payor has been in all of these markets – e.g., for decades Cigna focused primarily in large, self-funded employers – but with PPACA, the emergence of health insurance exchanges (the other HIEs), and the expected growth of Medicare Advantage, actual insurance is likely to become more important, and understanding their risk better becomes even more important to payors.  Plus, those self-funded clients are constantly demanding better and more targeted interventions to help control their costs, so the data analytics capabilities are increasingly important as part of a payor’s capabilities.  

Another hypothesis is that payors are scrambling to assert their role in an ACO world – whatever that may look like.  If providers end up as the ACOs, and they are essentially bearing the risk, the theory is that payors may find themselves antiquated.  That doesn’t seem likely to me, especially since so much of what payors do isn’t related to risk-bearing.  The exchanges and CMS are likely to still expect a (regulated) insurer to be responsible for the members, and multi-state or even multi-city employers would still need some entity to stitch the ACOs together (we saw this with HMOs in the 1980’s and 1990’s).   But by providing insight or connectivity to an ACO, payors may be able to provide value to them and to be an integral part of their solution.

Then there are the efforts by payors to buy their way into the provider world – e.g., Humana with Concentra, OptumHealth with Monarch  Healthcare, Highmark (again) with WPAHS – that will further blur the lines between payor and provider, as if the lines hadn’t already been blurred by organizations like Kaiser Permanente, Geisinger, or Intermountain Health.  Payors will have access to troves of new information through such direct involvement in the provision of patient care, but managing clinical efforts is not the same as managing network and insurance efforts (as some provider organizations have discovered in reverse!).

Data has always been one of the Achilles heels of health care.  All too often, patients’ data has been trapped in the silo in which it was delivered, with little or no ability to be shared, much less learned from or to have treatment guided by data from similar patients.  Administrative data – e.g., claims and eligibility – was able to break out of the silos to some degree, primarily because it was directly related to payment, but even with those types of data neither payors nor providers can claim to be entirely satisfied with the current state of affairs.  Health care data remains complex, minutely precise yet in many ways surprisingly useless, and generally just extremely messy -- mocking the ease and usability with which most other financial data manage to flow. 

Still, it doesn’t take much of a crystal ball to forecast that this sad state of affairs cannot last.  Data will flow.  It will be aggregated, analyzed, and applied, and it will be available -- used to guide both provider and patient treatment decisions at point of care/point of decisions.  It will acquire velocity, nearing the real-time status we’re used to seeing in most other industries.  More power will accrue to entities that can help data move and be useful, and more success will come to entities that use the data to be accountable for their efforts – whether providers, payor, or combinations thereof.  

I think it unlikely that payors will end up controlling health care data – not with the likes of Microsoft, IBM, GE Health, athenahealth, and many, many others also in the mix – but if they don’t have their oar in the data waters (and rowing hard), they’re going to get left behind. 

For centuries, medicine was the art of laying on the hands.  Some say 20^th century medicine was the era of antibiotics/prescription drugs, plus advanced imaging.  Many pundits predict that medicine in the 2st century will be all about genetic therapy.  Perhaps so, but I think it will be about the data.  Let’s hope we use it well.

Just Say No

By Kim Bellard, February 9, 2012

The recent flap over the recent Obama administration decision to not exempt religious organizations over rules requiring first dollar coverage of birth control leave me either bothered or bemused -- perhaps both. 

The controversy has very little to do with health policy and very much to do with the 2012 elections.  Moreover, it was entirely predictable, and it is amazing that the Administration walked right into what is becoming a big pie in its face.  However, the outrage that Catholic and some other religious leaders are expressing over being required to cover birth control in their health plans ignores one important fact.

It’s not their money.

Employers of all stripes see their health plans as a big expense and as something they have both a right and an obligation to try to manage prudently.  Acting as a prudent financial steward of the money, though, is not the same thing as imposing a particular religious belief.  In this case, the objection is, of course, that birth control is against their religious beliefs, and so should not be something they should pay for.  They’re not saying covering birth control is too expensive for their health plans or that it has adverse health consequences for people who use it.  They don’t even seem to care that the health consequences of not using it can be worse for some people.  They just don’t like it on moral grounds, and don’t want anyone using it.

The trouble is, the health plans are paid for by the employees’ money, not the employers’.  Employee benefits are part of employee compensation.  Employees have a decades-long implicit agreement with employers to receive a portion of their wages in benefits, mainly because they can receive that compensation on a tax-free basis.  But it is no more the employers’ money than, say, the money employees put into their 401k plans.

I wonder how people would be reacting if the religious organizations were saying that their employees couldn’t spend any portion of their own salaries on birth control.  I.e., they couldn’t take their wages and go off to buy birth control.  Not just that they shouldn’t, but that they couldn’t, presumably under threat of losing their job.  Would conservative politicians be rushing to support that kind of dictate?  I don’t think so, or at least I hope not.  People are pretty protective of their ability to spend their own money on the things they want.  So why should employee wages that have been retained by the employer on a pre-tax basis to finance a health plan for those employees not be able to buy medical services and supplies that employees want or need, as long as that spending was legal and medically appropriate – which birth control is.

Let’s try an equivalent thought experiment.  Let’s say the religion in question was Christian Science, and they decided that their “health plan” shouldn’t cover most hospital stays, physician visits, or prescription drugs.  Or a plan offered by an employer whose owner is a Jehovah’s Witness, and accordingly rules out covering blood transfusions in the health plan.  To make the experiment more equivalent, let’s be clear that their restrictions are not on plans offered by either church itself, but by organizations associated with those faiths and which employed many people who were of neither religion.  We probably would look askance at those faith-based exceptions, but would they actually be different in kind?

We could go a step further.  Maybe an employer isn’t satisfied just not covering abortion but also doesn’t want to include any health system or provider who provides birth control, and excludes them from their health plan network.  Maybe another employer doesn’t want any health care provider with any religious affiliation whatsoever, and excludes any such providers.  Or, to take an even more extreme example, maybe an employer doesn’t like the word “north” – for whatever reason -- and refuses to cover services by any provider with “north” in its name.   Where do we draw the line at where an employer’s idiosyncratic beliefs should be allowed to dictate its health plan rules?

One can oppose the birth control rule on other reasons more related to health policy.  You could argue, as I have and as John Cochrane did recently in the Wall Street Journal, that preventive services in general aren’t really insurance, and that covering them – particularly with no cost-sharing – is just dollar trading at best.  You could also argue – again, as I have previously done -- that the tax preference for employer-based coverage distorts the consumer market in health insurance, and inevitably invites the kind of employer tinkering with benefits that has led us to the current birth control mess.  You might also argue that birth control as preventive services stretches that term beyond its intended meaning – i.e., does it prevent disease or maintain health?  All of those are fair game for serious health policy discussions, but those are not what is driving this particular debate.

There are lots of reasons both to dislike the rule and lots of reasons to protest the protests about the rule, but it seems inevitable to me that politics will win the day and the Obama Administration will be forced to backtrack in some way.  And our crazy health system will be incrementally crazier as a result.

The Confusion in Coverage

By Kim Bellard, January 11, 2012

The more I think about our health care system, the crazier it seems. 

Let’s do a thought experiment.  You’re in an accident, and have an orthopedic surgeon fix some broken bones.  You are fortunate enough to be employed and to have health insurance from your employer, so certainly your health insurance will pay the bills, right? 

Not so fast.  Maybe the accident was work-related, in which case your workers compensation would apply.  Maybe the accident was in your car, in which case your or another driver’s auto insurance might pay.  Or maybe you fell at your neighbor’s house, in which case their homeowner’s policy might come into play.  Which type of coverage pays, how much they pay to the providers, how much you’ll have to pay, even which orthopedic surgeon you can see -- all depend on the circumstances.  One has to wonder if your eventual outcome is subject to the same lottery.

Perhaps that’s too problematic an example.  Let’s take what should be an easier example.  You get all of the recommended preventive exams.  It should be clear that those are covered by your health insurance, especially now that PPACA has specified that health plans have to cover preventive services at 100%.  Except that it doesn’t, not quite.  E.g., your preventative dental exams or vision exams aren’t covered by your health insurance.  If you are lucky, you might have dental and vision insurance that covers those exams.  Otherwise, you’re out of pocket for following the guidelines.

Adding insult to injury, if you need, say, oral surgery, you’ll probably have to figure out whether your dental or your medical insurance covers it.  Again, how much it pays, how much you pay, and which physicians you can go to depend on the answer. 

What a mess.  Then throw in the inter-insurer squabbling and coordination between the different types of insurance in situations that are overlapping or borderline.  All that adds to the costs for both payers and providers, and the frustration from consumers, providers, and payors. 

The costs of these other types of health-related insurance are not trivial.  According to the Bureau of Labor Statistics, costs for workers compensation is about 20% of health insurance costs, and about half of those workers compensation costs are for the medical component (as opposed to the disability).  The most recent National Health Expenditures (NHE) report showed “other third party payers” – which include workers compensation and a variety of other payers -- accounting for about $450 billion in 2011, almost 17% of total spending.  It’s significant.

It’s not that these other services are unimportant.  There’s a growing body of evidence linking oral health to other health conditions, highlighting the need for regular dental exams.  Vision exams are critical for spotting glaucoma or cataracts.  So why do we treat eyes and teeth differently than, say, feet or ears?  Why is periodontal disease somehow less important – often covered at only 50% in dental coverage – than diabetes, which is often correlated by gum problems?

A lot of this is due to historical accidents, if you will.  Employer-based health coverage got a big boost from the tax preference that avoided wage controls.  Medicare Parts A and B are structured to reflect then-typical Blue Cross Blue Shield plans in the 1960’s.  Medicare has struggled to evolve its design, growing ever-more complicated and adding Part D, but ending up with most recipients still adding a supplement to make coverage more comprehensive (unless the recipient chooses a more modern plan design via Medicare Advantage).  Both Medicare and employer coverage initially focused on a very medically-oriented, institutionally-based approach; both have broadened over the decades, but neither has truly revamped its approach, although the introduction of HMOs has helped force both types of coverage to include more preventive coverage. 

Medicaid does a better job than most other payers in covering a broad range of services, but actual benefits vary widely state to state and often coverage is more broad than deep (e.g., limits on hospital days or physician visits), and it requires an army of bureaucrats to determine who is eligible on any particular day.  Then we’ve got CHIP, VA, CHAMPUS, Indian Health Services and so on – each program no doubt well-intentioned but adding to the complexity of the system.  Our health system is a veritable zoo of different versions of health insurance.

The boldest thinkers at the federal level these days seem to be Senator Wyden and Representative Ryan, with their recent proposal to reform Medicare and small business coverage.  It certainly is a dramatic change from today’s programs, but I’d really like to see us take a step back and think more deeply about what “health” is, how “insurance” can support that health, and how we ensure that all Americans – regardless of age, income level, or health status have access to both health services and the redesigned health coverage. 

E.g., we certainly want employers to have safe workplace conditions, but is it necessary to have a separate medical component to incent that, or does the disability portion, along with some liability consequences, accomplish that?  I’m not talking about the so-called “24 hour” coverage that combines health coverage and workers compensation.  This has been attempted several times, none of which have, to my knowledge, been particularly successful – in no small part because each component still had to follow the specific laws and regulations that apply to the component.  That makes true integration difficult.  I’m talking about truly engineering what health insurance is, what it should cover, and how it should pay.  Rethinking what health insurance should include would be a hard task, fraught with the prospect of undue influence from various lobbying organizations, but it’s one I wish we had leaders bold enough to attempt.

I suspect few, if any, Americans fully understand the details of the various health programs they may be covered by, much less be able to have great confidence that they can truly compare choices in them.  I’m all for competition and variation, but not in the “fine print” – the definitions, exclusions, and covered benefits.  It would greatly enhance competition to truly have a uniform structure, and it would help us accomplish modern health goals if that structure was more broadly designed.  Doing so should force us to realize that some things should be paid for via insurance and others should not. 

Sadly, even the Obama Administration seems to be backing off of the PPACA requirement for common essential benefits, in their recent decision about plans offered through the forthcoming exchanges.  They are bending to calls for state flexibility by allowing state decisions on the essential benefits, within specified parameters, but the rules don’t bode well for someone who, say, lives in one state but works in another, or someone who moves between states.  They could see very different benefits based on through which exchange they get their coverage.

Some might read the above and misread me to be advocating an all-encompassing single payor system.  Nothing could be further from the truth.  I’m hard pressed to think of any monolithic program, government or otherwise, that offers the kind of innovation and choice Americans value.  I am advocating drastically new product designs that break the existing artificial barriers to protecting and enhancing good health.  If this requires changing the applicable laws and regulations – and it would – then so be it.

Winston Churchill once famous said: “Americans can always be counted on to do the right thing…after they have exhausted all the other possibilities.”  I just wish we didn’t have to go through so many other possibilities before we decide to fundamentally rearchitect not just who finances coverage but also what “coverage” should look like.

Good News -- Bad News

By Kim Bellard, December 19, 2011

Reading several recent news stories, I’m reminded of an old joke.  A man gets a call from his doctor, who informs him he’s got the results of some tests.  The doctor tells the man there is some good news and some bad news, and asks the man which he’d like to hear first.  The man is taken aback, but – optimist that he is – asks for the good news first.  The doctor dutifully informs the man he only has 24 hours to live.  The man is stunned.  “That’s the good news?” he asks incredulously.  “What the hell is the bad news?”   Rather sheepishly, the doctor informs him, “I was supposed to call you yesterday.” 

(Slight pause here for polite laughter).   

Let’s see how this good news/bad news works in the real world.  Take, for example, a recently released a report by Float – a mobile learning consulting company – on the increasing use of mobile technology in health care.  According to their research, 80% of U.S. physicians already use smartphones and mobile apps, and over half report either already having an iPad or planning to get one in the next six months.  They cite a number of uses for mobile technology in health care, which they expect to increase rapidly. 

That’s the good news.  I’m a huge supporter of more use of technology in health care, especially mobile.  It’s great that it is becoming more mainstream.  However, it is not an unalloyed boon.  The corresponding bad news was discussed in recent reporting by The New York Times on “distracted doctoring.”  They quote Dr. Peter Papadakos, who has published an article on “electronic distraction” in Anesthesiology News, as saying, “You walk around the hospital, and what you see is not funny…My gut feeling is that lives are in danger.”  Dr. Papadokos sees medical personnel on phones, surfing the Internet, and especially on Facebook.  The Times cites another study that indicates over half of technicians who monitor bypass machines were texting or even talking during surgery, even though most acknowledged it was unsafe behavior.  The Times even found situations where surgeons were reportedly making personal phone calls during surgery, using wireless headsets.  Scary stuff. 

It’s much like texting while driving.  We know it’s not safe, we criticize other drivers we see doing it, but we’re so used to the connectivity that the technology allows that we have a hard time drawing appropriate boundaries for ourselves.  Perhaps health care needs a NTSB to warn us when we really shouldn’t be using mobile devices.   

Another good news/bad news example is a recent study by GfK Custom Research North America about the projected impact of ACA on employer health coverage.  The news reports focused on the “good” news – that the majority (56%) of employers said they are likely to continue offering coverage.  "This survey suggests that firms aren’t considering a wholesale flight from employee health care coverage as health care reform is implemented,” said Tim Nanneman, Vice President and Director of Health Insurance Research for GfK, who also added, “However, many employers are skeptical about the potential effects of health care reform.”   

Indeed, the bad news from the study was that 12% of employers already expected to drop coverage, with another third not sure what they will do.  To make things worse, slightly more than half of employers expected their costs to rise because of ACA, with only 11% under their impression their costs would go up more slowly. 

When McKinsey estimated 30% of employers would drop their coverage once the exchanges were operational, they were excoriated by the Administration and other ACA supporters.  There were some flaws in the McKinsey methodology that left it somewhat open for the criticism, yet I’m surprised that a study showing barely half of employers expect to continue coverage hardly rates a mention, or is reported as good news.   I find GfK’s results deeply troubling – although not surprising. 

Speaking of costs increasing under ACA, the final piece of good news/bad news was the recent announcement by HHS that more young adults got coverage due to ACA provisions than expected – some 2.5 million in total.  Earlier estimates had shown one million newly covered, so the Administration took some pride in this even higher estimate.   

Everything being equal, of course, getting 2.5 million more people covered is good news.   The reality, though, is that everything else isn’t equal.  The bad news is that there is a cost to this good effect.  I read the HHS press release carefully, as well as the news accounts of it, and I didn’t see mention of the cost of those additional 2.5 covered young adults.  I previously blogged on the cost of ACA’s already implemented provisions, but the thing to remember is that this expansion is a tax on employment-based insurance.   By which, of course, I mean it is compensation taken from workers’ paychecks.  That’s the bad news.  For workers with single coverage, or who have families which do not include young adults, I might be wondering why I am paying for these young adults’ coverage.   

It never made much sense to me for this provision to be Rube Goldberg-ed onto our already jury-rigged employer-based system, making employers cover not only people who are not only not employees but who also are not even dependents of workers.  But it was politically expedient to do so and hid the costs.  The Administration is kind of in a bind: either this population doesn’t cost very much, in which case the 2.5 million perhaps isn’t worth crowing about, or the costs are substantial, in which case it should be more honest about them and who is bearing those costs.  I do think we’re talking billions of dollars annually.   When HHS starts reviewing health insurance price increases, it should remember its own complicity in at least some part of those increases.  It won’t, of course. 

There are lots of calls for transparency in health care, but we need to remember this shouldn’t just be about reporting the numbers.  The truth is rarely one-sided – something hard to remember in this hyper-partisan era – and we all should look at both sides of issues.  While I’ve been writing this blog, Reps. Wyden and Ryan have come out with their Medicare proposal, and Secretary Sebelius announced the flexibility that states will get in developing essential benefits packages…now I need to go take a look at the good and bad of each of those!

A Health Care “Moon Shot”

By Kim Bellard, November 15, 2011

There was a great op-ed in the New York Times a few days ago, in which Frank Moss – a former Director at M.I.T.’s Media Lab – called for a radically different approach to health care, a technology-driven approach he calls “consumer health.”  It would use technology to monitor and advise consumers about their health, with technology-based consultation with physicians or other health care professionals as appropriate.  Moss argues that not only might this approach improve health and reduce costs, but also would create significant export opportunities.  I like many of the ideas, but what I especially love is the call to be truly bold, like President Kennedy’s call to put a man on the moon in the 1960’s.  You don’t see much boldness in health care reform these days.  

There are things about Moss’s future that trouble me – it can seem a little Big Brother-ish – but the technology is, in many ways, the easy part of reforming the health care system; it is the rest of the infrastructure that stands in our way.

To that end, and on the advice of Daniel Burnham (“Make no little plans; they have no magic to stir men’s blood…”), here are sacred cows I’ll take on:

• More consumer responsibility: for all the complaints about how expensive health care is, most consumers have been spoiled.   I.e., only 31% of covered workers have a deductible of $1,000 or more, their average copayment for a primary care physician is still only $22, and their portion of premium contributions was only 18% for single coverage/28% for family coverage (Kaiser Family Foundation).   Certainly some individuals and families are devastated by health care costs – and this is unacceptable – but the frustrating part is that the system, by and large, doesn’t reward consumers for managing their health effectively. 
  
  We don’t want to punish people who have high health costs simply because of what is, essentially, an accident – whether that be genetic, physical calamity, or unexpected exposure to infections, to name a few.  Regardless of what their health status is or how it got that way, we do want to reward people who actively take efforts to maintain and improve their health.  Various wellness programs – typically employer-based – attempt to do this, but their ability to monitor, intervene, and reward has historically been fairly limited.  With the new technological tools that are or soon will be available, we will be in a much better position to actually observe desired behaviors – and we should use those to strongly reward individuals who actively exhibit those behaviors.  If auto insurance companies can base rates on monitored safe driving patterns (see, for example, this), why wouldn’t we want the same kind of rewards in health insurance?  Lower premiums, real-time lower cost-sharing, and/or actual monetary rewards are all be options that should be used.  Consumers who do not take appropriate actions, or who do not choose to be monitored, need to be willing to bear the financial consequences of those decisions.
  
  
• End employer-based coverage: Employer-based coverage has been the dominant form of health coverage in the U.S. since the 1940’s.  Employers have pushed insurance companies into many of the innovations of the past thirty years, such as care management, more aggressive provider contracting, an emphasis on quality and outcomes, and more focus on wellness.  In many ways, it has been the employers – particularly large, self-funded employers -- who have been the leaders in innovation.  That being said, employers can also be blamed for ending community-based premiums, for “job lock,” and for creating such a myriad of distinct benefit plans that few consumers or providers can understand them, much less compare.   
  
  There are a few reasons why ending employer-based coverage will or should happen.  One is the money.  The tax preference for employer contributions to health coverage remains one of the largest federal tax preferences.  With our soaring budget deficits, it is only a matter of time before this preference is eliminated or sharply reduced – the so-called “Cadillac-plan” tax in ACA is just the start.  The second is the existence of a viable alternative.  Currently, there are many barriers to widespread adoption of individual health insurance, but once ACA’s exchanges and prohibition of medical underwriting go into effect in 2014 (unless the law is repealed or does not survive its various legal challenges), obtaining individual coverage will become much more attractive.  Indeed, McKinsey estimated 30% of employers would drop their coverage once the exchanges become operational (although this estimate was not without skeptics).   Personally, I wonder why the number is as low as 30%.  Third and finally, in the kind of monitored world that Moss calls for – which is already starting to happen – there will be increasing privacy concerns about what information one’s employer has access to.  We’ve already seen employers making employees pay more in premiums based on participation in various screenings or wellness programs, and even prohibitions against certain types of non-job behaviors (e.g., smoking).  With the kind of monitoring Moss discusses, the type and amount of potential data becomes much more personal.  At some point, consumers are going to rebel about their employer’s oversight of their lives.
  
  
• Reform medical education & licensure:  With the much lamented trend towards specialty and sub-specialty, by the time a physician gets into practice much of his initial training may be out-of-date, not to mention his/her having spent a small fortune.   Victor Fucks has eloquently argued for more distinct yet faster approaches to training, and that is the kind of fresh approach we should be considering.  I would go even further.  As a layman, the distinction between allopathic and osteopathic medicine has always been murky to me.  Throw in chiropractic, podiatric, acupuncture, nurse practitioners, and the array of health care practitioners begins to look like something from the 19^th century medicine.  One is surprised that phrenology is no longer on the list of extant medical professions.  We need a Flexner Report for the 21^st century, not focused just on allopathic training but on medical education period.  Blow it up and start fresh, with a comprehensive, empirically based approach, based on validated medical practices rather than on historical professional silos, and with different end points based on type of practitioner.
  
  As for licensure, I’ve previous blogged about the seeming ineffectiveness of state medical boards and on issues relating to licensure’s impact on telehealth.  Public Citizen’s analysis indicates fewer than half of physicians who suffered clinical practice actions also had state licensing actions.   It leads one to wonder: whose interest is the current system serving?  If we can monitor individuals in real time and advise them on better health behavior, certainly we should be able to do the same for physicians, and to use data to make better decisions about which health care professionals are practicing appropriately.  Licensure shouldn’t be based on reputation, state of residency, old boy networks, fear of impact on malpractice suits, or other constraints that aren’t keenly focused on better patient care.  It should be based on ongoing, proven performance.  We can do better. 
  
  

I could go on with this list of reforms – and I may in future blogs – but I’ll stop for now.  Each of the above changes would be a monumental task in itself, with many interest groups heavily entrenched in the status quo.  Still, to use another oft-quoted line – if not us, who?  If not now, when?