Seven Things to Know About Medicaid Going Forward

By Clive Riddle, August 20, 2015

1. The most current CMS report indicates total Medicaid and CHIP enrollment of 71,637,638; with 509,082 additional people were enrolled during the past 30 days in the most recent reporting month (May 2015.)
2. Total Medicaid spending will be close to $500 billion going into 2016.
3. Since initial Marketplace open enrollment period began in October 2013, more than 12.8 million additional individuals are enrolled in Medicaid and CHIP as of May 2015, more than a 22 percent increase (Among states participating in Medicaid expansion, enrollment rose by 29.2 percent, while non participating states reported an increase of approximately 9.5 percent.)
4. Regarding where states stand on medicaid expansion decisions, 20 states are not expanding Medicaid; 25 states (count includes the District of Columbia) are expanding Medicaid ; 5 states are expanding Medicaid, but using an alternative to traditional expansion; and 1 state is expanding Medicaid; pending federal waiver approval.
5. According to the Center for Health Care Strategies, nine states have an active Medicaid ACO program (Oregon, Utah, Colorado, Minnesota, Iowa, Illinois, New Jersey, Vermont, and Maine) and ten states are pursuing Medicaid ACOs (Washington, Michigan, Alabama, North Carolina, Virginia, Maryland, New York, Massachusetts, Connecticut, and Rhode Island.)
6. The GAO recently listed four key issues facing the Medicaid program, in their brief MEDICAID: Key Issues Facing the Program, including (A) access to care; (B) transparency and oversight (lack of complete and reliable data on states' spending, and need for improved HHS management of state demonstrations; (C) program integrity (the program's size and diversity make it vulnerable to improper payments). ; and (D) federal financing approach (automatic federal assistance during economic downturns and more equitable federal allocations of Medicaid funds to states.)
7. Medicaid Managed Care now involves 39 states that contract with comprehensive MCOs for Medicaid, with around 74 percent of beneficiaries receiving care through these plans. CMS recently issued the first major proposed rule addressed Medicaid Managed Care since 2002, which addresses issues including Network Adequacy; Medical Loss Ratio; Actuarially Sound Capitation Rates; Quality of Care Standards; Appeals and Grievances ; Beneficiary Enrollment Protections; Utilization Management; Managed Long-Term Services and Supports; State Monitoring Standards; and Information Standards.

How National Thought Leaders View The Post SCOTUS Public HIX World

By Clive Riddle, July 10, 2015

Earlier this month, Health Insurance Marketplace News published a supplemental edition of their newsletter, providing commentary from 27 ThoughtLeaders around the country at the SCOTUS King v Burwell decision. They were asked: “What’s your gut reaction to the ruling? What happens next? What challenges will Exchanges face now?”

Here’s some excerpts from key ThoughtLeaders representing major stakeholders:

First off, not everyone was pleased with the ruling. Here’s comments from Michael F Cannon, Director of Health Policy Studies, Cato Institute, Washington DC, who was considered one of the primary architects behind the lawsuit brought before SCOTUS:  “So rather than respect the democratic process and the separation of powers, Roberts allowed himself to be intimidated into rewriting the law and writing Congress out of the legislative process….What happens now is that ObamaCare opponents will continue to fight to repeal this law, because so long as it remains on the books ObamaCare will continue to threaten access to care for the sick.”

Grace-Marie Turner, President, Galen Institute, Alexandria VA, a prominent opponent and champion of consumer driven care, tells us “ People want better solutions. The only appeal to a Supreme Court decision is to the American people. Health reform -- patient-centered, consumer-focused health reform -- will be a major issue in the 2016 elections as more and more people experience firsthand the problems with ObamaCare. Change is inevitable.”

Alain C. Enthoven PhD, Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford (CA) University, a nationally prominent and oft-quoted  figure on health policy  says the decision was “the triumph of common sense. The case should never have been brought. Obviously the intent of the law was to cover every legal resident of the USA. What’s next is to face the challenge of excess healthcare costs, which are diverting resources from meeting other important needs -- such as education, infrastructure, national security and debt reduction The ACA did very little to change the fundamental cost-increasing incentives in our system of healthcare finance. Two good places to start would be to cap the exclusion of employer contributions from employee taxable incomes at the level of efficient health plans and to convert Medicare to a premium support model, so that practically everyone would have cost-conscious choices of health plan.”

Mila Kofman JD, Executive Director, DC Health Benefit Exchange Authority, Washington DC,  actually runs a state public exchange and was of course, a happy camper: “The Supreme Court decision was important for millions of Americans who now have access to quality, affordable health coverage thanks to tax credits provided through the Affordable Care Act. I am very glad that states that use Healthcare.gov didn’t have to scramble to try to protect millions of people who would have lost access to affordable health coverage. I am relieved that millions of Americans who need premium reductions to stay covered no longer have to worry about becoming uninsured.”

Meanwhile, Simeon Schindelman, CEO, Bloom Health, Minneapolis – one of the most noteable private exchange platforms – is a little pessimistic: “The individual market needed reforming. The ACA is an incredibly expensive and complicated way to accomplish some of that reformation, but it does seem to make health insurance in the individual market accessible to many more people -- and that is a worthy outcome. I’m not judging the method, only that portion of the result. Reduction in uninsured is largely a result of Medicaid expansion and we need to be clear on that. Financial (and potentially operational) sustainability of state Exchanges, while watching insurance premium rates in the individual market over the next couple of years as the environment changes a lot, could be the next two big issues. On the former, there seems to be some pretty rough sledding coming soon and in some instances already here. On the latter, we have an abundance of speculation, but it’s an important topic.” 

From the employer perspective, JD Piro, Senior Vice President and National Practice Leader, Health and Benefits Practice, Legal Group, Aon Hewitt, Lincolnshire IL, tells us “this case was the last major judicial hurdle that the Affordable Care Act had to clear before full implementation. As a result, employers should focus on reporting on compliance with individual and employer mandates for 2016, as well as determining the impact of the excise tax in 2018. Additionally, more employers may consider a strategy of transitioning pre-65 retirees from group-based insurance to the individual public Exchange to take full advantage of the choice, competition, favorable premiums and federal subsidies.”

Larry Boress, CEO and President, Midwest Business Group on Health; Executive Director, National Association of Worksite Health Centers; Chicago, echoes the excise tax concern: “Most employers had already planned to offer health benefits prior to the decision and will stay the course to focus on how to avoid the excise tax.”

And words from the man involved at the very start – with the Commonwealth Health Insurance Connector Authority that helped inspire the ACA - Jon M Kingsdale PhD, Managing Director, Wakely Consulting Group; Visiting Lecturer on Healthcare Policy, Department of Healthcare Policy, Harvard Medical School; Former Executive Director, Commonwealth Health Insurance Connector Authority; Boston: “The 6-3 majority interpreted the ACA in the only way that makes sense, notwithstanding clear (and clearly mistaken) wording to the contrary. This is actually a ‘win’ for all interested parties, except the actual plaintiffs: It preserves coverage for 6.2 million Americans of modest income; it strengthens the law; it averts chaos in the individual insurance market in 32 states; and it allows Republicans to continue rallying their base by attacking ‘Obamacare,’ while escaping the political fallout for succeeding. Both Justice Roberts’ ruling and Justice Scalia’s overwrought dissent point to a common need -- for Congress to move beyond political posturing to constructive revision of the ACA, if only to correct poor drafting. Of course, substantive improvements are also needed, first and foremost to simplify this outrageously complex statute. However, any opportunity to do so awaits the outcome of our next national election.”

Track 3 For Medicare ACOs

by Clive Riddle, June 5, 2015

CMS has just issued a 592 page MSSP ACO final rule resulting from their proposed rule issue in December, which received 275 stakeholder comments.

Here’s what CMS, in their own words, says the new final rule will accomplish:

• Creates a new Track 3, based on some of the successful features of the Pioneer ACO Model, which includes higher rates of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
• Streamlines the data sharing between CMS and ACOs, helping ACOs more easily access data on their patients in a secure way for quality improvement and care coordination that can drive critical improvements in beneficiaries’ care;
• Establishes a waiver of the 3-day stay Skilled Nursing Facility (SNF) rule for beneficiaries that are prospectively assigned to ACOs under Track 3; and
• Refines the policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings, and announces CMS’ intent to propose further improvements to the benchmarking methodology later this year. 

CMS notes that “over 400 ACOs are participating in the Medicare Shared Savings Program, serving over 7 million beneficiaries.” With respect to basing their new Track 3 on selected components of their Pioneer ACO model, they tout that Pioneer ACOs “generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care.  The Pioneer ACO Model is the first that meets the tests to have its elements incorporated into other Medicare programs.” 

California Healthline reports that “the new track for ACOs will allow them to retain up to 75% of what they save but also be responsible for up to 75% of their losses (California Healthline, 12/2/14). ACOs in the new track also will be given a fixed set of beneficiaries for which they must provide care (Modern Healthcare, 6/4)….. CMS said that it expects the rule change will help ensure that 90% of MSSP ACOs stay with the program.”

Looking for the Future in the Past

By Kim Bellard, March 25, 2015

I don't get smartwatches.

Yes, I know; they're all the rage. Apple unveiled its Apple Watch earlier this month, to generally good if not entirely ecstatic reviews. Not to be outdone, Google announced a collaboration with TAG Heuer and Intel for a "Swiss Smartwatch." Samsung and Sony are close behind with their own versions.

Poor Fitbit, which held the early lead in wrist wearables, is now desperately trying to broaden its product line, including the new Surge. They must feel a little like Garmin or Nikon did when mobile phones began to incorporate GPS tracking and digital phones.

I have to wonder why the focus on the wrist. It isn't the ideal place to track, say, your heartbeat, your sleep, or your steps, and as a result fitness trackers have been faulted about their accuracy.  I'm not sure who is clamoring to add more features to a watch.

It's as if Timex and Casio, not to mention TAG Heuer, are conspiring to create a demand so that they don't go the way of Kodak.

It's not that I think they are a bad idea. If you want to wear one, more power to you, and I hope it helps you with your health goals. My problem with them is that I think they are an example of our trying to create the future by looking in the past.

Shouldn't we be developing truly new technologies and uses for them?

I can't help but think about EHRs in this context. Health care providers insisted on being subsidized for what would be normal business process improvement investments for any other industry. What we got for all the federal spending were products that physicians don't really like, that more often hinder than help with patient care, that patients rarely have access to, and that can't easily share data.

We need tools that are more collaborative, more interactive, and more proactive.

Congress is already starting to ask what it has gotten for its $35b HITECH investment, even holding hearings to demand answers. EHRs used to have bipartisan support and now have fairly bipartisan disappointment.

We don't even have an agreed upon way to figure out if providers have the same patient, much less share their data about that patient. The financial services industry solved similar customer-identification problems decades ago. They did it because it made business sense.

In theory, that kind of change will happen once we make that big move to "value-based" care, but as long as our baseline is our current level of spending, I'm skeptical. We need approaches that attempt not just to reduce increases in spending but that aim to take big chunks out of spending. There's no shortage of waste, duplication and unnecessary care that could be eliminated.

Smartwatches, EHRs, or proton beam therapy, to name a few examples, are not likely to help accomplish that.

I want to see those kinds of new technologies in health care, not a smartwatch. Technologies that help change how we think about "health" and how we treat problems with it. I challenge health care technology gurus: show us something not just that we haven't seen before; show us something we hadn't even thought of before

As Alan Kay famously said: "The best way to predict the future is to invent it."

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

PwC’s Health Research Institute Gives Us Five

By Clive Riddle, March 20, 2015

Many institutions are pausing to write and reflect on the ACA at this five-year anniversary mark, underneath the pall of the SCOTUS’ King vs. Burwell shadow. PwC’s Health Research Institute has just weighed in with a nice 22-page report : Healthcare reform: Five trends to watch as the Affordable Care Act turns five.

The report lays five key trends on us that they contend the ACA has fueled after five years:

1. Risk Shift: Raising the stakes for all healthcare players. The ACA added force to new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions.
   
2. Primary care: Back to basics. Experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point.
   
3. New entrants: Innovators in the New Health Economy. New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era. More than 90 new companies have been created since 2010, according to HRI analysis.
   
4. Health insurance: From wholesale to retail. Rapid enrollment in the ACA's public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges.
   
5. States: Reform's pivotal stage. States have emerged as key players in the reconfigured healthcare landscape, as the ACA gave states notable discretion in how the law could be implemented.
   

Ceci Connolly, managing director of PwC's Health Research Institute, tells us "the five trends have led to the creation of more than 90 new companies that have entered the sector since 2010. The ACA has opened gates for savvy investors and start-ups to take a piece of the $2.9 trillion industry."

And if that isn’t enough, they give us these five takeaways on what stakeholder should consider going forward:

1. Revisiting strategies to emphasize saving over spending and quality over quantity, to serve more consumers effectively and demonstrate affordability.
   
2. Watching closely as the reimbursement pendulum swings from fee-for-service to accountable care.
   
3. Innovating to meet the demands of the new healthcare consumer.
   
4. Pursuing opportunities to enhance consumer choice and engagement in selecting health benefits.
   
5. Working with states as they continue to shape the future landscape.
   

2015 – Another Year of Uncertainty?

By Cathy Eddy, Health Plan Alliance, February 25, 2015

This year on March 23, we will mark the 5th anniversary of the passage of the Affordable Care Act. Typically, you would expect that most of the unknowns that go along with a new law would have been worked out by now. Yet as we look ahead, we have several key elements that may change. There are also other drivers that are challenging our health plans.

Here are some of the uncertainties still ahead:

• We now have a Republican Congress with the Senate flipping in the 2014 election. This will allow for legislative changes to ACA to make it to President Obama’s desk, but veto power will block most of these without some Democratic support. Some areas, such as eliminating the device tax and redefining the 30 hour “full time” work week to 40 hours, have bi-partisan support. 
• The Supreme Court has agreed to hear arguments in March about the subsidies on the public exchanges in states where the federal exchange, healthcare.gov, is in place. The wording in ACA indicates that subsidies will only be given if there is a state-run exchange and that would impact about 2/3 of the states using the federal exchange. Their decision is due by June. 
• The health plans on the public exchanges had to set rates for 2015 with little experience about those members in these programs. It will become clearer as this year progresses just what the MLR is for this line of business. By the time open enrollment starts for the public exchanges in 2016, we’ll find out if premiums go significantly higher or stay at current levels. The impact of the 3 Rs on the plans will also become clearer. Standards for being a QHP remain unclear. Introduction of compliance requirements such as consumer satisfaction measurements will be tested in 2015. Technology bugs still abound with data flowing between plans and CMS.
• Individual mandates are in place with increasing penalties for not having insurance coverage, but the implementation of the employer mandate is still uncertain. 
• A new type of insurance company – the state Co-ops – were created by ACA with federal loans. Not all states were able to offer this model. In 2015, some of the established Co-ops are expanding to new states. Others are offering coverage through off-exchange products in the commercial space. Some are struggling to maintain the necessary level of capital.  The future of the Co-op model still has a level of uncertainty. 
• Providers have been embracing the concept of “value based reimbursement,” and the movement away from fee-for-service, but the implementation of this strategy has been much slower than first expected. 
• The trend for the past couple of years has been for providers to become payers and for payers to move more into the provider space. Many members of the Health Plan Alliance have been approached to work with health systems that don’t have their own health plans. Will this trend continue or will providers find that entering the insurance space and taking on more risk is outside of their comfort zone?
• Will 2015 be the year that ICD-10 is finally implemented or will there be another delay? 
• Many states are looking at their Medicaid expenditures and trying to find ways to control increases. Some states have made major changes to their programs and are implementing the changes. Dual eligibles are being moved into managed care programs. Will more states take the federal dollars for Medicaid expansion? 
• Plans that are in the Medicare Advantage line of business continue to be challenged by risk adjustment, STAR ratings and reimbursement levels, as well as multiple audits. As plans expand these programs they continue to deal with uncertainty.

Well, at least 2015 won’t  be boring!

Are the Health Coverage and Tax Credit Details for Filing 1040s Really That Complex?

By Clive Riddle, February 12, 2015

Much attention has been given this tax season to the new intricacies involved with filing health coverage and related tax credit information for individual 1040s. H&R Block and many other tax services have taken the opportunity to nationally advertise their expertise to support tax filers this season.

So the question begs, how complex are they? This month’s issue of Health Insurance Marketplace News tackles that issue in their February Thought Leaders Corner, asking the question: “ Are the tax credit and related health coverage filing details required for individual 1040s really that complex, and do you feel there is adequate IRS guidance?”

Here’s what some Health Insurance Marketplace News panelists had to say:

“If 2014 premiums based on 2012 incomes prove to be different from actual 2014 incomes and the government seeks to claw back what proved to be excessive subsidies and compensate for too-low subsidies, it will prove to be very complex in practice and generate much paperwork and frustration. Also, if people were covered for only part of the year, the filing will be complex. Better if the subsidies were fixed dollar amounts not subject to retroactive adjustment.” Alain C. Enthoven PhD, Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford University, Stanford CA

“My initial response to the tax filing requirements in a Health Affairs blog was to express a concern that the filing requirements for the individual responsibility penalty and for premium tax credit reconciliation were very demanding and would probably require most tax filers who were affected by either issue to use the help of tax preparers. Since then, the IRS and CMS have taken a number of steps to help taxpayers -- allowing taxpayers in states that did not expand Medicaid with incomes not exceeding 138% of the poverty level to claim an exemption on their taxes, offering calculators at Healthcare.gov that will allow tax filers to determine the premiums of the lowest-cost Bronze plan and second-lowest-cost Silver plan that would have been available to them and offering free tax filing software to most tax filers. It is still not going to be easy, but this should be manageable for most tax filers.”  Timothy S. Jost Esq., Robert L. Willett Family Professorship of Law, Washington and Lee University School of Law, Lexington VA

“Tax filing details are often complex. Adding anything associated with the ACA won’t make it any easier. If filers receive ACA-related IRS guidance primarily through written documents versus from a knowledgeable professional or through another more ‘modern’ approach to communication and education, it may be a real challenge for many to fully understand and timely and properly complete the required information. This could be seen as an outstanding opportunity for the various parties close to the ACA that have observed so much about the importance of consumer-level communication and education to work together to assist the IRS in its endeavor. There are some useful resources available, but accessing and understanding those resources may continue to be a challenge that must be continuously addressed to ensure consumers are knowledgeable about, and compliant with, the law.”   Simeon Schindelman, CEO, Bloom Health, Minneapolis, MN

“Yes, most consumers will find it very confusing and yes, there is sufficient IRS guidance. Consumers will fall into two broad categories; either they received a tax credit for 2014 tax year or did not.

(1) Did not receive tax credit:  Form 1040EZ. Easiest to file with some restrictions (e.g., claim no dependents and do not want to claim any advance payments of the premium tax credit); and (2) Received and will claim advance payments of the premium tax credit:   Form 1040A. Has some restrictions (e.g., do not itemize deductions, claim standard deductions and taxable income or $100K or less);  Form 1040. Filed for taxable income of greater than $100K (e.g., can itemize deductions);      Form 8962 for premium tax credit, irs.gov/pub/irs-pdf/f8962.pdf; the 1095-A is required when filling out Form 8962 to claim premium tax credits. If consumers had private health insurance or had self-insured employer coverage or coverage through a government program (e.g., Medicaid or Medicare) they may receive a 1095-B. If consumers had health insurance through a large employer that had an employer-sponsored plan, they may receive a 1095-C. However, 1095-B and 1095-C are optional for 2014 tax year, which means it's unlikely most folks will receive one. Unfortunately, if consumers didn’t have or maintain coverage, they will have to get an exemption or make a payment with their federal income tax return.”  Peter B. Nichol, Director, IT/Head of IT , Access Health CT , Hartford, CT

The Age of Discontinuity

By Cathy Eddy, Health Plan Alliance, December 8, 2014

Newt Gingrich and David Nash

On December 2, I was invited to be on a panel at a Health Care Executive Forum in Washington DC that was sponsored by the Academy of Managed Care Pharmacy. David Nash, MD, MBA, dean of the Jefferson School of Population Health facilitated discussions about:

• Population Health and the Insurance Marketplace (my panel) 
• Narrow Network vs Value Network: Where’s the Greater Value? 
• Specialty Pharmacy & Biosimilars: Improving Population Health?  

One of the most interesting aspects of the day-long discussion was the morning keynote by the Honorable Newt Gingrich, the author of the Contract for America and Speaker of the House when the Republicans took both the House and the Senate in 1994 – a political point in time that parallels the recent 2014 election.

He referred to one of his mentors Peter Drucker and a book he wrote in 1968 called “The Age of Discontinuity.”  I’ve read some of Drucker’s work and always found it to be very insightful, but I hadn’t heard about this book, so I looked it up and found this summary:

Drucker begins by examining four major areas of obvious discontinuity:

1. The explosion of new technology and its resultant new technology 
2. The development of knowledge as a result of mass education and its impact on work, life, leisure and leadership
3. The social and political realities of the new industries
4. The change from an inter-nation economy to a world economy. 

He was writing this in a time before cable TV, the internet, cell phones or the fall of the Berlin Wall. But I do remember 1968 as a year of political unrest in this country.

However, Drucker's framework for discontinuity is very relevant today and especially to the challenges that are facing the health care industry. Here are some of my take-away perspectives from the discussion we had in DC:

• We are trying to leverage and integrate multiple forms of technology as part of our approach to care. The smart phone, which is with people now 24/7, will become the monitoring and informational tool of choice in the future.
• As healthcare pushes the “consumer” to become more self-governing, the value of information as a driver of behavior continues to grow, while at the same time the expectation is for more services, but at a lessor cost.
• ACA – what happens next? The direction and degree to which the new Congress can change the current health care law is uncertain. The impact of a Supreme Court decision on subsidies can impact millions on the exchanges run by healthcare.gov. 
• How will the instability of the rest of the world impact the US economy and spending demands, while an increasingly large portion of the federal budget is going toward healthcare expenditures?

Although it is clear that healthcare has the attention of leaders in business, state government, Congress and the Supreme Court, it is as yet unclear how that attention will change our industry in the future.

The health insurance industry by definition manages risk, but in this “Age of Discontinuity,” it is hard to plan for some of the risks that are coming our way. Hold on - 2015 looks to be an interesting year.

Surveying Physicians on Their Views of the ACA

By Clive Riddle, October 17, 2014

The Medicus Firm, a national healthcare recruiting firm has just released results regarding health reform, from their 11th annual Physician Practice Preference Survey. This year’s survey shows an uptick grades doctors give the Affordable Care Act, but a still overall negative review. 2,272 physicians and advanced practice providers from 19 specialties and all 50 states participated in this year’s survey.

When asked to give the ACA an overall grade, 8.6% awarded an “A”, up from 6.3% last year. Meanwhile, 22.35% graded the ACA an “F” this year, down from 30.2% a year ago.

The survey went on to ask doctors to rate the ACA on specific objectives, such as improving efficiency of healthcare, improving access to healthcare, improving quality of healthcare, and decreasing healthcare costs. Medicus reports that “the best and most improved grades were awarded for ‘improving access to healthcare’, with a resounding 23.4 percent giving the ACA an ‘A’ in this objective, up from 11.8 percent last year. Additionally, 27.11 percent of physicians gave the ACA a ‘B’ for improving healthcare access. Only 13.68 percent of respondents failed the ACA in this category, down from 23.6 percent who gave it an ‘F’ last year for this objective. The objective receiving the lowest grades was ‘improving efficiency of healthcare.’ However, even this category showed some improvement over last year. Only about 7 percent of physicians gave the ACA an ‘A’ for improving efficiency, which is up slightly from 5.6 percent last year. Furthermore, 29.73 percent of physicians gave the ACA an ‘F’ for improving efficiency, which is down from 35.4 percent who gave it a failing grade in this category last year.”

It should come as no surprise that from the onset, physicians would view the ACA negatively. Perhaps it should also not be surprising that some of them would view things more positively once the core of the Act was finally implemented. Jim Stone, President of The Medicus Firm, tells us "Physicians seem to have become slightly more positive about the ACA compared to last year's survey. As of last year's survey, the ACA had not yet been fully implemented, although many aspects of the legislation were already in motion. This year's survey was conducted after the ACA was in full effect for several months, and four years after its passage into law. Unfortunately, the grades on the whole are not very positive, so it's good that there is some improvement in physicians' perceptions of the effectiveness of the ACA."

The Medicus Firm isn’t the only organization surveying physicians on their views of the Affordable Care Act. Physicians Practice Magazine conducts the annual Great American Physician Survey, which this year had 1,311 respondents. Their results, announced in August, included this reform question:
“Which statement best describes your personal feelings about the Affordable Care Act, in terms of its effect on patient access to care: [A] I think it’s been great for Americans (18.9%); [B] I think it’s mostly good, but not all good; and [C] I think it has done a disservice to Americans (39.2%).”

Finally, The Physicians Foundation commissioned Merritt Hawkins, a physician search and consulting firm, to conduct a survey of 20,000 physicians, with the resulting report 2014 Survey of America’s Physicians: Practice Patterns and Perspectives released last month. The survey included a question similar to The Medicus Fund’s grading of the ACA, with Merritt Hawkins finding that “when asked about what grade physicians would give the Affordable Care Act (ACA), 46 percent give a D or F grade. Younger (ages 45 or lower), employed physicians were more inclined to give the ACA favorable marks than older (46 or higher), private practice owners. In fact, 63 percent of younger physicians (ages 45 or lower), would give the ACA a grade of C or above.”

Healthcare Workers Are More Confident About Their Prospects and the Future

by Clive Riddle, August 8, 2014

Randstad Healthcare, the national healthcare staffing firm, issues a quarterly report on healthcare workers’ confidence, conducted by Harris Poll, based on a survey of physicians, nurses, healthcare administrators and other healthcare professionals. Their just released second quarter 2014 report, which tells us that confidence is up for the second quarter in a row, and that healthcare workers had the highest level of confidence compared to all industries they track.

So what does that mean, that healthcare workers are increasing in confidence, are more confident than other workers, and what exactly is it that they are confident about?

The Randstad Healthcare Employee Confidence Index is a composite of various confidence measures via an online survey. The questions asked address their optimism regarding:

• Their current employers’ outlook
• Ability to find a new job
• Likelihood of retaining existing job
• Availability of other jobs
• Strength of the economy

Key survey findings for healthcare workers included:

• 71% have confidence in the future of their current employer, compared to 54% in the previous quarter.
• 61% have confidence in their ability to find a new job (same as previous quarter)
• 81% say it is not likely they will lose their jobs in the next 12 months, compared to 72 percent in Q1 of this year.
• 28% are likely to look for a new job, compared to 33% in Q1, and 46% in Q4 2013.
• 44% believe fewer jobs are available (compared to 48% previous quarter). 61% are confident they could find a job in the next 12 months.
• 31% say the economy is getting stronger (compared to 29% previous quarter). 33% believe the economy is staying the same, and 37% believe it is getting weaker

Given all the political hubbub about the health care reform, it’s interesting to see that the pivotal ACA implementation year of 2014 actually brought a rise in confidence about job prospects, sector economic strength sand overall economic outlook, for those working directly in the industry. Perhaps this means that insiders don’t view the ACA as all doom and gloom.

Everything Everyone Had To Say About Halbig and King

By Clive Riddle, July 25, 2014

Much has been written this week about the two conflicting circuit court decisions regarding Affordable Care Act Exchange subsidies - The Halbig v. Burwell decision that found against subsidies for FFE states was celebrated as a decisive blow against Obamacare by opponents; and hours later the King v. Burwell decision that came to an opposite conclusion and dampened, at least a tiny bit, such celebrations.

So is the net effect of the two decisions cause for Much Ado About Nothing, or Much Ado About Everything? Browsing the blogoshpere and articles from major organizations, here’s a sampling of what everyone had to see about the state of affairs in the aftermath – with some of the rhetoric a bit over-caffeinated and some seemingly more balanced:

• ACA Supporters Predict Ruling Against Subsidies Won't Go Into Effect
• Republicans Will Run On An Obamacare Replacement in 2016 – Will Democrats?
• Obamacare architect caught LYING about subsidy ‘typo’ on MSNBC
• Cheap solutions to Obamacare challenge could work: Experts
• Working around exchange subsidy ruling should be easy: experts
• If Obamacare subsidies go, states may have workarounds
• Rulings on Health Law Are Far From Last Word
• Obamacare Ruling: Congress’s Dysfunction Hands Power to the Courts
• Did Conservatives Just Win a Leninist Victory Over Obamacare?
• Wild day for Obamacare: Appeals court rulings conflict
• 4.683 million unanswered questions in Halbig
• A stinging defeat for the government
• NATIONAL JL: A Court Ruling Just Blew A Huge Hole In Obamacare

Given these were not SCOTUS decisions, the question is – what’s next? Margot Sanger-Katz of the New York Times answers that question in her article After Health Law Rulings, Here Are Possible Next Steps in which she spells out these scenarios and steps:

1. All the judges on the D.C. Circuit could decide the Halbig v. Burwell case.
2. The law’s challengers could ask the Fourth Circuit to reconsider King v. Burwell.
3. Decisions will be issued by other courts.
4. Either side — or both — could appeal the rulings to the Supreme Court. T
5. The Supreme Court could decide the case.
6. Congress could act.
7. States could act.

A Kaiser Health News article, New Health Law Court Decisions Could Have Limited Political Impact counsels that the decisions aren’t going to turn mid-term elections on their head: “Political analysts say this week’s court decisions on the legality of tax subsidies for those obtaining coverage under the Affordable Care Act may not have a broad impact on this fall’s midterm elections. The decisions sent a mixed legal message, complicating the political message as well. One appellate court panel ruled the subsidies cannot be provided in the 36 states relying on the federal insurance exchange; the other ruled in favor of the Obama administration, saying Congress intended that the subsidies be available regardless of whether states operated their own insurance marketplaces. Political candidates as well as voters will have to wait until the outcome of appeals of the cases to know their impact. But that didn’t stop some politicians from trying to immediately exploit the issue.”

If you are looking for a nice in-depth discussion of the situation – consider giving Timothy Jost’s Health Affairs Blog that provides such coverage: Implementing Health Reform: Appellate Decisions Split On Tax Credits In ACA Federal Exchange. He writes in part: “The issue in the cases is this: The ACA authorizes the IRS to provide premium tax credits to individuals with household incomes between 100 and 400 percent of the federal poverty level who are not eligible for other minimum essential coverage (such as affordable and adequate employer coverage, Medicaid, or Medicare). Premium tax credits are, however, only available to individuals who purchase coverage through the exchanges. The ACA requests that the states establish exchanges, and sixteen states and the District of Columbia have done so. The ACA also, however, authorizes the federal government to establish exchanges in states that fail to set up their own exchanges. The federal government has done so in 34 states and is operating the individual exchange for two more. The IRS regulation allows premium tax credits to be awarded to eligible individuals in both states with state-operated exchanges and states with federal exchanges. Two subsections of the ACA, which describe how the amount of tax credits are to be computed and what months can be covered by tax credits, however, provide that tax credits are available for months in which an individual is enrolled in a qualified health plan “through an Exchange established by the State under 1311” of the ACA. The plaintiffs in the King and Halbig cases argue that this provision bars the IRS from issuing premium tax credits to individuals who enroll in qualified health plans through federal, as opposed to state-operated, exchanges.”

What are the stakes? Tim tells us “these cases, as well as two other cases pending in the federal district courts in Oklahoma and Indiana brought by the attorneys general of those states, have clearly been brought for a political purpose — to bring down the ACA.”

But the last word on this for today perhaps should belong to John Stewart, who Adrianna McIntyre notes in her Vox Healthcare Blog: Still confused about the latest Obamacare lawsuits? Let Jon Stewart explain (which includes the video clip) “Stewart commended the judges on getting past stop signs the morning of the decision. ‘Until the law expressly provides a 'go' sign, we can in no way ascertain the intent of the framers of the sign. Surely the people honking behind me appreciate the rigor of my judicial acumen.’

Marketplace: 57% of New Enrollees Were Uninsured Before Signing Up

By Cyndy Nayer, July 1, 2014

Kaiser Family Foundation--KFF-- issued a new summary on the enrollees in the insurance marketplaces, which MCOL has summarized.  In short, most of the enrollees in the #ACA were uninsured before the rollout, and most of the 57% had been without coverage for 2 years.

The chronicles of the value-based movement have shown that when costs for acquisition (copays and co-insurance, often called out-of-pocket costs) are reduced, more people become engaged and adherent in their health care.  This is important in the management of chronic disease.

But if we are determined to build a culture of health in the US, then the engagement and adherence of newly-insured to prevention strategies as well as lifestyle change will be critical. The efforts in incentive-based designs (value-based for beneficiaries and for service providers, such as physicians, health plans, care coordinators, and more) must retool to encourage 24/7 improvement.  Focusing on appropriate choices whenever possible, adding 10-minute exercise breaks, and identifying friends and relatives who encourage and join in the exercise, screenings, and healthy foods are goals that we can all achieve.

Thank you to MCOL for its continued data vigilance so that, together, we can build the healthiest US.  [image courtesy of KFF]

Breakdown of Marketplace enrollees prior to purchasing current plan;

Covered by a different non-group plan	16%
Covered by Medicaid/other public program	9%
Covered by an employer/COBRA	14%
Other/Don't Know/Refused	4%
Uninsured	57%

Source: Kaiser Family Foundation

RWJF Examines Current and Future Coverage Eligibility For the Uninsured – It’s a State by State Issue

By Clive Riddle, May 30, 2014

The Robert Wood Johnson Foundation, in conjunction with the Urban Institute, has just issued a nine-page Issue Brief: Eligibility for Assistance and Projected Changes in Coverage Under the ACA: Variation Across States.

The Urban Institute authors, Matthew Buettgens, Genevieve M. Kenney, and Hannah Recht found that:

• This year, under the ACA, 56% of the uninsured became eligible for financial assistance with health insurance coverage through Medicaid, CHIP or subsidized private coverage through the new marketplaces.
• In states that expanded Medicaid eligibility under the ACA, 68% of the uninsured became eligible for assistance, compared with 44% in states that have not expanded Medicaid.
• If states that have not expanded Medicaid eligibility were to do so, 71% of their uninsured would be eligible for assistance.
• Among states expanding Medicaid, the ACA is projected to reduce the number of uninsured people by 56%, compared with a 34% reduction among states not expanding Medicaid.
• If the states that have not expanded eligibility were to do so, the number of uninsured in those states would decrease by 59% 

The authors note that the “Medicaid expansion states with the lowest share of uninsured eligible for assistance tend to be those in which Medicaid eligibility for adults had already been expanded above minimum required levels before the ACA.”

Given the state decisions are the determining factor, what is the range of eligible uninsureds in the non-Medicaid expansion states, and where is the low end based? Look South. The Authors state that “with the exception of Wisconsin, the share of the uninsured in nonexpanding states eligible for assistance ranges from 40 percent in Texas to 58 percent in Alaska and Maine. The states with the lowest shares eligible for assistance (Texas, Mississippi, Louisiana, and Georgia) have particularly large shares of residents below 100 percent of FPL. [What’s up with Wisconsin? The authors note that Wisconsin changed its Medicaid Waiver in 2014 and “therefore, Wisconsin resembles a Medicaid expansion state.”]

The top five states (all expansion states) by percentage eligible for any assistance, along with the projected percentage decrease in uninsured under the ACA:

1. West Virginia – 83% Eligible / 76% decrease in uninsureds

2. Kentucky – 82% Eligible / 63% decrease in uninsureds

3. Michigan – 81% Eligible /64% decrease in uninsureds

4. Ohio – 81% Eligible / 65% decrease in uninsureds

5. North Dakota – 80% Eligible / 64% decrease in uninsureds

Conversely, here’s the bottom five states (all non expansion states):

50. Texas – 40% Eligible / 31% decrease in uninsureds

49. Mississippi – 42% Eligible / 31% decrease in uninsureds

48. Louisiana -– 42% Eligible / 32% decrease in uninsureds

47. Georgia – 42% Eligible / 30% decrease in uninsureds

46. Alabama -– 43% Eligible / 28% decrease in uninsureds

That's Not the Way I Always Heard It Should Be

by Kim Bellard, March 11, 2014

Now that the initial open enrollment period under ACA is drawing to a close, we’re starting to hear more about how the enrollment is going, and the news is not encouraging.

The Administration has touted that 4 million have gotten coverage through the exchanges – still several million short of their goals – but they claim to not know much about whether ACA’s impact on the uninsured rate.  Fortunately, outside organizations are helping to fill in some of the gaps. 

The McKinsey Center for U.S. Health System Reform released the results of their individual market enrollment survey, with results from February 2014.  Only 27% of those who had obtained new coverage in 2014 reported having been previously uninsured.  Even more discouraging, only 10% percent of all previously uninsured now reported having coverage.  The faint sign of hope in the numbers is that both numbers are up sharply from previous surveys – 11% and 3%, respectively – but I doubt anyone who supported ACA’s passage thought they were signing up for only helping 10% of the uninsured.

Adding insult to injury, only three-quarters of those with new coverage reported actually having paid their premium, confirming reports that health insurers had warned about.  And that percentage was only 53% among the previously uninsured, which does not inspire much confidence that they will remain insured for very long.

Perceived affordability remains the key barrier to buying coverage, even though 80% of those citing it were actually eligible for subsides, a crucial fact that two-thirds were unaware of.

One glimmer of good news is that Gallup reports that the uninsured rate has, in fact, dropped, down to 15.9% (versus 17.1% in 4Q 2013).  To be fair, though, their results showed spikes in late 2013, and the 1Q 2014 results are on par with 1Q 2013 and 1Q 2011.  Coverage through an employer dropped two percentage points from 4Q 2013, while both individual coverage and coverage through Medicaid were up by slightly under 1%.  

The Urban Institute released their own survey results on ACA enrollment, conducted in December 2013.  Among all adults 18-64, 12% reported having looked for information on health plans in the marketplace (Orwellian for “exchanges”), with another 17% planning to do so.  More significantly, among the uninsured still only 19% had looked, another 33% thought they would look – and 23% had not heard about the marketplaces.  The comparable numbers for those below 138% of the federal poverty level were 13%, 25%, and 27%, respectively, highlighting that the most vulnerable groups are not getting the message.

The picture isn’t really rosy anywhere.  The people who were already in the individual market continue to be buffeted by changes in the rules of the road.  For example, there is Administration’s executive decision to allow subsidies for policies purchased outside the marketplaces, in recognition that some consumers may have been too frustrated by the marketplace websites to buy from them. 

Then there is the “bare bones plans” mess.  After the uproar last fall about people having to lose their health plans because they didn’t meet ACA minimum standards, the Administration belated announced a one year delay in the enforcement of those standards, and has just extended that delay for yet another year, potentially meaning they won’t apply until 2016.   

It’s anyone’s guess about what has happened with premiums in the individual market.  A recent analysis by the Robert Wood Johnson Foundation in selected states found (with the exception of Alabama) more competitive markets and premiums, while a report from the Manhattan Institute last fall found an average increase of 41% (much due to benefit changes), and a study by the presumably objective Society of Actuaries last spring also expected significant increases, especially for younger consumers.

Any employer with a health plan or 401k plan – or any state Medicaid director – could have warned us that voluntary enrollment typically leaves lots of eligible people not taking action..  We should have taken the approach many 401k plans have adopted – “automatic enrollment.” Driven by disappointing participation in 401k plans, the federal law was changed to allow employers to automatically enroll employees in their 401k plan, with a default contribution rate.  Employees could still opt-out, or change the default contribution level, but employers have found that participation rates are higher and average contribution rates are higher under this approach.  What’s not to like?

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Practice Priorities for Physicians to Thrive in ACA, Receive Higher Reimbursement

By Cyndy Nayer, February 7, 2014

The promise of value, outcomes, and payment reform are foundational within the ACA (Affordable Care Act) legislation, sometimes called Obamacare.  In order to achieve these reforms, electronic medical records, value-based designs, wellness incentives, expanded coverage through Medicaid, and new entities such as patient-centered medical homes (PCMH) and accountable care organizations (ACO) have been established. The health insurance exchanges (HIX) are now called health insurance marketplaces [and these are often confused with HIE, which are health information exchanges - basically a data repository of claims and predictive analysis]. The new HHS website is improving Healthcare.gov, and it contains with rules and financial information for physicians, employers, and individuals.

These are important changes for physicians and practice management teams to know as they will impact not only how you invoice but how your patients react to prevention, wellness, chronic care management, and more.  It will be imperative for practice managers to understand the limitations from the new insurance plans.  On the other hand, due to the previous updates in the ACA from 2010 till the present, many prevention screenings, refills on chronic care management, and educational opportunities (such as those for obesity and diabetes) are covered at lower costs to the patients or at no-cost.

The shift to accountability in care starts, first, with the provider-patient relationship. TPatients, in some of the new health plans, can receive lower costs for prevention screenings (annual exams for Medicare recipients, as an example).  New individual coverage for patients age 19-26 comes with their parents’ policies.  Others, particularly those who do not receive coverage through their current employer, began purchasing policies through the exchanges and coverage this year..   Successful practices have been asking about insurance changes and ask about the date that the new plan begins coverage.

Additional revisions in the ACA have removed limits on pre-existing conditions, leveled the premiums for women (who were previously classified as higher risk on the basis of their gender), and called for comparative effectiveness research for treatments.

Given the enormity of change, physicians and their practice members and staff may be confused about what some key concepts mean generally and how they relate to their medical practices.  Practices need to be familiar with key concepts in order to diagnose and treat people according to the new insurance plan requirements. Key to success are the changes in reimbursement that are included and what measures of quality, value and outcomes are fundamental to the success of practice management. 

A high-level overview of these concepts and their impact is included in a white paper we have developed that can help you and your practice team be better prepared for the new patients and the new reimbursement requirements. Click here to request and download the white paper.

Physicians: Unhappy Campers in Affordable Care Act Land

By Clive Riddle, November 22, 2013

Jackson & Coker, the healthcare staffing company, has just released survey results on current physician views of the ACA, in their 33-page report- Survey: Physicians on the Affordable Care Act. The results shouldn’t be that surprising – physicians aren’t happy campers in this brave new world.

Jackson & Coker highlighted these findings from their survey, which yielded 3,072 self-selected practicing physician respondents from a survey were emailed to subsets of a database totaling 277,778 physicians, which included physicians who have been placed by Jackson and those who have not:

• 80 % believe those patients with current coverage will wind up paying higher healthcare costs
• 765 said overall healthcare costs would go up due to the new health reform law
• 73% said patients would have less choice in picking their doctor
• 66% said they would have to spend more time on administrative duties
• 61% said their opinion of the law has changed for the worse
• 60% said the quality of patient care would be negatively impacted
• 57% said the law would have a negative impact their treatment decisions for patients
• 56% support repealing or defunding the law
• 44% said they would not participate in the Exchange

The general population’s view of the Act often boils down to political perspectives. Physicians would not seem to be immune from red and blue polarization. Indeed, a Mayo Clinic study published in the Journal of General Internal Medicine June 25, 2013 issue: Specialty, Political Affiliation, and Perceived Social Responsibility Are Associated with U.S. Physician Reactions to Health Care Reform Legislation, addressed this issue, and concluded “significant subsets of U.S. physicians express concerns about the direction of U.S. health care under recent health care reform legislation. Those opinions appear intertwined with political affiliation, type of medical specialty, as well as perceived social responsibility.”

The Mayo Clinic authors reported that “(41 %) believed that the ACA will turn U.S. health care in the right direction and make physician reimbursement less fair (44 %). Seventy-two percent of physicians endorsed a general professional obligation to address societal health policy issues, 65 % agreed that every physician is professionally obligated to care for the uninsured or underinsured, and half (55 %) were willing to accept limits on coverage for expensive drugs and procedures for the sake of expanding access to basic health care. In multivariable analyses, liberals and independents were both substantially more likely to endorse the ACA …respectively), as were physicians reporting a salary …or salary plus bonus … compensation type…..Those who agreed that addressing societal health policy issues are within the scope of their professional obligations …, who believe physicians are professionally obligated to care for the uninsured / under-insured …, and who agreed with limiting coverage for expensive drugs and procedures to expand insurance coverage …., were all significantly more likely to endorse the ACA. Surgeons and procedural specialists were less likely to endorse it.”

But beyond the impact of political persuasions and social viewpoints raised in the Mayo Clinic study, it would seem some fundamental business interests are driving the Jackson & Coker results, that boil down to these three things:

1. Concerns about impact on reimbursement levels
2. Issues regarding access to participation in applicable plans
3. Concerns about “hassle factor” of administrative requirements

MedPage Today this week published an article that seems to support these points: Docs Unhappy With ACA Exchange Plans resulting from their press coverage of the AMA’s Interim Meeting Conference. They cite Steven Larson, MD, board chairman of the California Medical Association: “the patients nor the physicians know if they're in network or not," and state “it has been a common complaint thus far, as plans have been slow to report or update provider networks for exchange plans.” With respect to reimbursement, they note “some providers have reported rates as much as 70% below what commercial plans pay, with negotiations starting at Medicaid payment levels.”

The MedPage Today article cites another survey from last month with similar results: “the Medical Group Management Association reported 55.5% held an ‘unfavorable’ or ‘very unfavorable’ view of the impact the ACA's health insurance exchanges on them,” and concludes “with these stories starting to mount, the fear is that patients -- with their insurance card in hand -- either won't be able to find a doctor who is seeing patients with that plan, or will have to travel great distances to find someone who does.”

Certainly, as with the Exchange website enrollment, much needs to still get sorted out with respect to the status of provider networks with participating Exchange plans across the country.

Patient Engagement Health Literacy

By Krista Burris, November 12, 2013

The importance of patient engagement is buttressed as healthcare transitions to outcomes-based models where patients’ involvement in their health is necessary to achieve the objectives of care delivery transformation. Empowering patients with tools and resources that enable individuals to better manage their healthcare needs is a promising approach to encourage patient accountability in improving their own health outcomes. However, the notion of patient engagement relies on the idea that once patients become engaged, they are well-informed enough to know how to interpret and act upon the health information presented to them; in other words to maximize the value of having patients engaged in their health, they actually have to have a good enough understanding of their health conditions, terminology, and treatment in order to make the appropriate decisions around their health needs.

The IOM defines health literacy as “ the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions.” According to a National Assessment of Adult Literacy report, it is found that approximately 36% of US adults have basic or below basic health literacy, resulting in an economic burden of $106 billion to $238 billion annually.[1] The same report found that low-health literacy rates are almost double for underserved populations with approximately 62% of minorities, 53% of the uninsured and 60% of Medicaid beneficiaries having limited health literacy.

Given that individuals with low-health literacy tend to have poorer health outcomes and create costs in the system through the misallocation of resources (for example: more likely to forgo preventative care while more likely to be hospitalized)[2], there are implications with respect to the coverage expansion provisions of the ACA that will bring millions in this demographic into the system. The virtue is that these individuals become somewhat more captive facilitating outreach and education efforts. The challenge is how to implement patient education policies efficiently to reduce the administrative burden of increasing demand with somewhat static supply in an already taxed infrastructure.

This is where I believe the unprecedented government and private market collaborations to foster efficiencies and innovations become hopeful. There is an incredible amount of effort in the digital and technology space to leverage the existing social and cultural norms of the mainstream including those in the low-health literacy demographics. For example, mHealth technologies that leverage the 91% mobile (56% smartphone) penetration rates among US adults[3] making access to patient & health information, biosensors and tracking that use smartphone technology, and communication with providers nearly automated.

I recently started working with a non-profit start-up that does SMS patient education by disease condition, appointment, event, and medication reminders, as well as group messaging, all designed and tailored for low-income individuals. Early results are showing a positive impact on improving attendance of a chronic-disease self-management program through event reminders, and we will have more information on the improvement of knowledge and outcomes, along with the engagement aspect of the technology in early- to-mid 2014.  

Patient engagement, though relatively early in its life-cycle, has shown promising results which lends itself to continued exploration and investments to determine how to best leverage effective approaches moving forward.  

---

[1] Vernon, JA. Trujillo, A. Rosenbaum, S. DeBuono, B. “Low Health Literacy: Implications for National Health Policy” 2007.
http://sphhs.gwu.edu/departments/healthpolicy/CHPR/downloads/LowHealthLiteracyReport10_4_07.pdf. 

[2] National Network of Libraries of Medicine. “Health Litercy”. 2013.
http://nnlm.gov/outreach/consumer/hlthlit.html>.

[3] Smith, A. “Smartphone Ownership 2013” Pew Internet and American Life Project. 2013.
http://pewinternet.org/Reports/2013/Smartphone-Ownership-2013/Findings.aspx. 

It’s a Narrow World After All

By Kim Bellard, November 6, 2013

The promise of the Affordable Care Act is that everyone can obtain affordable coverage (this is not to be confused with the promise that if you like your plan or your doctor, you can keep them, which, as is becoming more widely known, is not and never was quite true).  Buried in that promise is the fact that choices – of health plans and of providers in those health plans – are going to be more restricted than most people expected.

This fact was crystalized in a recent op-ed in The Wall Street Journal by Edie Littlefield Sundby.  Ms. Sundby has been fighting stage 4 gallbladder cancer for seven years, costing her insurer – United HealthCare – over $1 million.  She has nothing but praise for United, except that the insurer is pulling out of the individual market where Ms. Sundby lives, thus forcing her to obtain new coverage through the exchange.  The problem is that none of her choices in the exchange would allow her to keep her existing provider relationships.

Tone-deaf once again, the White House blamed everyone but themselves, or the regulatory structure set up by Obamacare, for the situation. 

Let’s face it: the “new normal” for health plans may be narrower networks.  An analysis of the exchange filings by McKinsey & Co. found that 47% of the plans offered were HMO or other closed network plans, compared to less than 14% of enrollment in such plans for employer plans (according to the most recent Kaiser Family Foundation/HRET survey).  Moreover, the providers in the exchange networks may not include some of the most respected ones. 

For example, Watchdog.org compared the US News & World Report’s list of top ranked hospitals, and found many were opting out or were just participating with a small number of the plans in the exchanges.  CNN, PWC, The Wall Street Journal,  The New York Times, the Los Angeles Times, to name a few, have all come to the same conclusion. 

To add insult to injury, the provider finder search tools on most of the state run exchanges appear to leave something to be desired, making it hard for consumers like Ms. Sundby to figure out how to decide which plan might be best -- or the least worse -- for their situation.  I doubt many expect that healthcare.gov is likely to be any better.

At least there’s more choice of health plans, right?  Not so fast.  It’s true that if you live in an urban area, you’ll probably have multiple plans from multiple carriers to choose from, but if you live in a rural area, maybe not so much.  An analysis by The New York Times found that in 58% of the 2,500 counties served by the federal exchange only one or two carriers were available, with only one carrier as an option in about 20% of those counties.  Granted, these rural counties may not have had many choices before ACA, but this barren marketplace is not quite what President Obama presumably envisioned.   

Not everyone thinks the reduced choice is a bad thing, especially in regards to choice of providers.  Avik Roy proposes that the narrower networks will force providers to compete on price, and concludes that “[T]his is, in general, a good thing.”  Let’s hope so.

Booz & Company researchers Sanjay Saxena and Nate Holobinko, reach similar conclusions.  Their conjoint analysis of interviews with 20,000 consumers led them to conclude that health care consumers are, in fact, highly price sensitive.  Contrary to conventional wisdom, consumers valued lower price over broad networks, and inclusion of high quality health systems was more important than having their own PCP in-network.  Consumers also don’t necessarily view the most well-known hospitals – e.g., academic medical centers or other flagship institutions – as “must have” providers; other respected local health systems could also suffice (although consumers like the aforementioned Ms. Sundby might disagree). 

Of course, responding to a survey is not quite the same as acting in real life, conjoint analyses notwithstanding.

The trend towards narrower networks is part of, although not synonymous with, a move towards paying providers more for how well they provide care rather than simply how much care they provide.  This is variously called pay-for-performance, value-based purchasing, or outcomes-based payment.  McKinsey & Co. believes such approaches can save over $1 trillion over the next decade, although they acknowledge the magnitude of the transition required to achieve those savings. 

Some might object that many of these payment approaches leave the consumer out of the equation, as they can result in ever-more arcane cost/quality/outcome contractual arrangements between insurers and providers, making price transparency more difficult.  One alternative approach is “reference pricing,” under which the payor sets fixed payment levels for drugs, procedures, or bundles of services, and encourages consumers to shop.  If they find providers who can deliver at the set price, fine, but if they choose a more expensive provider, they pay the difference between the reference price and that provider’s price.  That tends to get their attention.

CalPERS has been testing the approach for several years, and reports some striking results.  The number of enrollees using lower-priced hospitals for orthopedic procedures increased 21% in the first year, and those using high priced facilities fell by 34%.  Better yet, many hospitals saw the writing on the wall, and dropped their prices to get closer to the reference pricing.  CalPERS claims $6 million in savings for the first 2 years. 

Of course, the approach relies on having a choice of providers, adequate price transparency for the impacted services, and engaged consumers.  Failure in any of those components is likely to lead to failure to change behavior – and some deeply disgruntled consumers.   Let’s not forget that, according to Gallup, 20% of the uninsured still don’t know about the mandate, 27% don’t know about the exchanges, and 25% still don’t intend to buy coverage, so expecting them to know the prices for, say, hip surgery is perhaps optimistic.

Reference pricing will require a lot of work to make it successful on a broad scale and is itself likely only an interim step, but between it and narrow networks as a strategy, I’ll take reference pricing.

While I understand the rationale for the narrow networks, I think they will prove to be a dead end, for two reasons.  The first is that, as we should have learned from the 1990’s, ultimately consumers will balk at the restrictions.  The second is that market consolidation, which I’ve written about previously, will make such narrowing difficult in many markets. 

In the more perfect health care system to which we should be aspiring, we should be encouraging consumers to find the best providers, as long as that “best” is based on value.  It’s hard to argue that this choice should be geographically limited, and I think it will become increasingly hard to argue that having a contract with a specific carrier should be a limiting factor in choice of the best provider either -- as long as the provider actually offers the best value. 

Still, whether it is narrow networks, value-based pricing, PCMH, ACOs, or any of the myriad of other experiments being tried, whenever people start talking about the potential savings offered by various approaches, the elephant in the room (or maybe the ox in the room, as I discussed in Gore Someone Else’s Ox, Please) is from which providers the money is going to come.  Public officials in general, and Congress in particular, appear helpless against the forces of lobbyists and/or the fear of lost jobs in their district.  We need only look at the history of Medicare’s “sustainable growth rate” mechanism, or, in another context, weapons systems that even the Pentagon doesn’t want but which represent defense contractor jobs, to illustrate this type of lack of will.  Screams of pain from health care providers will be hard for them to ignore, especially when they start trotting out potentially impacted employees and, more powerfully, patients.

We need to be tougher but also smarter and more targeted.  When it’s the demonstrably poorer performing providers which start losing significant revenue, or even start going out of business, that’s the kind of narrowing of networks I can buy into.

To Delay or Not to Delay

By Kim Bellard, October 15, 2013

It’s fair to say that the implementation of the Affordable Care Act – ACA or, as it is most commonly come to be called, Obamacare -- has not gone exactly smoothly. 

The Administration had weathered several earlier storms as it moved forwards with various aspects of implementation – e.g., coverage for contraception, the delay in options through the exchanges for employees of small businesses, and the delay in the employer mandate, to name a few -- and I’ve touched upon some of these previously (see, for example, Sebelius Says or Tell Me the Good News Again from earlier this year).  The recent snafus with healthcare.gov, the consumer portal for the 36 state exchanges run by the federal government, may prove to be the proverbial straw that breaks the camel’s back.

The portal went live October 1, as planned, but that was pretty much all that went according to plan (see Clive Riddle’s earlier post).  Consumers complained – and continue to complain -- about long waits, pages not loading, inability to create accounts, and even numerous typos or grammatical errors.  User-interface experts were baffled at the portal’s requirement that users create accounts before being able to research their health insurance options, especially since the account creation process proved to be one of the most problematic. 

Some reports indicate that the federal government spent over $600m on the site – over 6 times the budgeted amount – and other reports fault HHS for their late start, reliance on multiple vendors, and lack of effective oversight over the huge IT project.  One IT company which did not work on the portal but which does claim to focus on building software for government blames the healthcare.gov mess on the federal procurement process, which they say rewards companies who are good at the procurement process rather than at the desired task itself.  They may have something there.

Coming as it did just as the federal government shut down due to Congress and the President not able to agree on spending limits, to many the portal fiasco symbolized the federal government’s inability to do anything right.  It shouldn’t surprise anyone that recent polls suggest only 5% of the American public approve of the job the government is doing.   All this distrust has given new ammunition to critics of Obamacare.  House Republicans were already waging a battle to “defund” Obamacare, and the problem with healthgov.gov was like throwing them red meat. 

The defund battle seems to have quieted -- for the moment -- but this notion of delaying the individual mandate has gained some currency.  CNN anchor Wolf Blitzer, who is generally seen as keeping a neutral perspective, surprised many observers by saying the problems with healthcare.gov supported the Republicans’ desire to delay the law for another year.  After all, CBO estimated that such a delay would save the federal government some $36b between 2014 and 2018, due to fewer people covered through Medicaid/CHIP and to lower expenditures on subsidies. 

I even saw Jon Stewart skewer Secretary Sebelius on The Daily Show about the topic.   Despite declaring herself a “recovering Insurance Commissioner,” Sebelius seemed totally unable to articulate why delaying the individual mandate wasn’t the same as delaying the employer mandate. 

Normally I think Mr. Stewart is smart, as well as extremely funny, but this is a case where he misses the point (as Stephen Stromberg has ably pointed out in The Washington Post).  I’m already dubious that the penalties for not buying coverage are strong enough to overcome fiscal and other inertia from most of the uninsured – especially the highly desired young and healthy ones – but delaying the mandate begs the question.  The mandate itself is not the point: assuring access to coverage is. 

Let’s say we delay the mandate, but keep the requirements that insurance companies must accept all comers, regardless of health condition.  We can ask people in New York or New Jersey what to expect, as those states required guaranteed issue with no mandate in the individual markets many years ago, only to see a virtual collapse in their individual markets, with limited options and the most expensive coverage in the nation.  Replicating that nationally would be a disaster.

Or we could delay both the mandate and the guaranteed issue provisions, continuing the nation disgrace of millions of Americans not able to qualify for or afford coverage.  After all, the supposed interim step offered by Obamacare – high risk pools – have long ago run out of money.  All those millions of Americans who want coverage, and who are among those overloading healthcare.gov, would have to wait at least another year for an opportunity to get coverage, continuing to hope that they won’t be hit with significant medical expenses and fearing that such a delay would prove to be indefinite.

The many critics of Obamacare must forget that addressing the very real need of those uninsured Americans is the main purpose behind ACA. 

In case anyone is worried I’m too sympathetic to the Administration, let me repeat that I think ACA is a badly designed, poorly written, and fiscally scary pierce of partisan legislation.  The problems with it are more than just the “glitches” the Administration would have us believe, although they may not (yet) quite qualify as the “train wreck” that critics are so fond of characterizing it as. 

ACA doesn’t address costs or structural reform in any meaningful way, it has (inadvertently, due to the Supreme Court ruling on state flexibility) perpetuated or even accentuated the uneven access to coverage for our poorest citizens (e.g., see a recent New York Times analysis), and it will be the death of employer-based coverage.  That latter may not be a bad thing, long term, but whose bright idea was it to apply the health insurance tax to only to insured plans, thus further spurring the shift to self-insurance or to dropping coverage?  That “recovering” Insurance Commission doesn’t seem to have learned much from her stint.

Much as I hate to admit it, I think the critics who fear that once consumers start getting subsidies there will be no going back have a valid point.  I’m just not convinced that is an excuse to wreck the law.  Instead of debating whether we should delay or defund, shouldn’t we be trying to fix and improve ACA?  Those millions of Americans without coverage deserve at least that.

Frankly, I don’t understand why more of the people who are desperately waiting to obtain affordable coverage aren’t beseeching their Congressmen not to screw up what they were hoping was going to be their big chance.  Maybe they can’t get through to them because they’re still stuck at healthcare.gov, or maybe no one is answering the phones or emails in Congress because the staff has all been furloughed.  Surely it’s not that Congress doesn’t care about them…is it?

“Health Care Productivity” is an Oxymoron

By Kim Bellard, September 26, 2013

It has long baffled me when politicians and others trumpet job growth in the health care sector, while at the same time bemoaning rising health costs, as if there was no connection. Some Rust Belt cities like Pittsburgh and Cleveland have bet a large portion of their economic future on their growing health care industries, and some economists attribute much of the nation’s recent economic revival on the growth in the health care sector. But job growth in itself is not always a good sign. An insightful piece by Robert Kocher suggests that the situation is even worse than I already suspected.

Kocher concluded that productivity is actually dropping in health care, with hiring outstripping output. He figures that the health care workforce has increased 75% since 1990, with almost all of the growth coming from non-doctor workers. There are 16 non-doctor workers for every doctor, and only 6 of those have a clinical role. As Kocher says, “[T]he problem with all of the non-doctor labor is that most of it is not primarily associated with delivering better patient outcomes or lowering costs.” So what the heck are they doing?

Health care professionals would be quick to note that there are ever-more administrative demands, driven by the multiplicity of payors, health care plan designs, and the number of hoops through which they are expected to jump in order to justify payment. Fair enough; it is hard to think of many other industries in which there is so little standardization. Payors want more standardization from providers in how the deliver care, providers want more uniformity from payors in coverage and requirements, and patients are stuck in the middle with neither side listening to them very well.

The latter, at least, may be starting to change. Hospitals are now facing big Medicare penalties for poor scores on HCAHPS, and physicians have to be looking forward to that future. There are some signs that hospitals are paying more attention, such as reported for California hospitals. One of the initiatives mentioned was simply to ensure patient rooms are cleaner. It’s sad that in 2013 it takes the threat of penalties to make this a focus.

Providers may be going overboard on trying to improve patient satisfaction by focusing on amenities. The New York Times’ recent article “Is this a Hospital or a Hotel?” discussed this issue, and included a series of photos that dare the reader to determine which is which. I know I had a hard time distinguishing them. Is this really where our health care spending should be going, and is this improving productivity – or patient care?

Perhaps this kind of focus on amenities partially explains both our high costs and the productivity issues. Ironically, it’s not at all clear that patient satisfaction is directly tied to quality. A recent study found statistically significant correlations between the two, but with only a weak association. Another study from Johns Hopkins similarly found that patient satisfaction does not necessarily reflect the quality of surgical care patients receive.

Moral of the story: patient satisfaction is important, but we shouldn’t let it be a substitute for better empirical measures of quality and outcomes.

A crucial component of improved standardization – and, with it, increased productivity -- is with the data. HITECH is most commonly known for being the stimulus for EHR adoption, but it also spurred the development of health information exchanges (HIEs), which are critical for the sharing of all that desired electronic information. Progress certainly has been made, with HIEs now funded in every state, but a recent report by HIMSS Analytics reminds us that the war is not yet won. Although 73% of surveyed hospital IT executives indicated they participated in an HIE, only 20% indicated that it had improved patient safety, and only 12% believed it saved time for clinicians. The biggest challenge, voiced by 49%, was that other organizations were not sharing data robustly; 64% admit to still relying on faxing to get around this problem.

It is typical health care: spend lots of money – billions in this case – but do not use it to drive ruthlessly towards improving care or cutting costs. To make things worse, providers aren’t able to eliminate the old, paper-based processes, which means work flows can’t become more uniform, and all those new costs become additive.

I have a hard time believing Walmart, Apple, or GE have this much trouble transmitting and using data across their supply chains.

Indeed, David Cutler – former health aide to President Obama – argues that health care will be much more like Walmart once the effects of the information technology “revolution” is more fully realized. He likens health care to the retail industry of the early 1980’s, full of solo practitioners and lacking useful information technology. As companies like Walmart and Amazon have demonstrated, he sees the future as being made up of larger, more integrated institutions, and able to drastically cut administrative expenses through more effective information technology.

Cutler also believes the patient has to become more central -- connected to the most appropriate health resources and providers via technology and finally becoming a more equal contributor in his or her own care.

The lack of a patient-centered system is one of the key barriers Michael Porter names in a recent blog (and article). As he and co-author Thomas Lee say, “[P]roviders are organized and reimbursed around what they do, rather than what patients need.” This is not exactly news to anyone, but it is nonetheless a profound insight. The seemingly haphazard, provider-centric structure of our health care system goes a long way towards explaining both our high costs and the difficulty in improving productivity.

Porter’s solution is that health care must focus on value; again, hardly a unique proposal, but one that is hard to argue with. Porter outlines the barriers he believes is preventing our system from improving value. In addition to the previously mentioned provider-centric structure, he also cites the following barriers:

• Free-agent physicians operate independently, rather than as part of an integrated team.
• Patient volume is fragmented, making every patient a special case.
• Massive cross-subsidies in reimbursement for individual services have distorted care and stalled care integration.
• No participant in the system has good information about patient outcomes and the cost of care.
• Information technology has often made care integration and value improvement harder, rather than enabling it.

Today’s health care “system” simply has too many entities pursing too many distinct goals, and limited ability to measure what is happening. None of these entities is particularly happy with the current situation, and most would agree that there’s too much waste in the system. Porter believes we can get to a value-based system, but it will take some radical changes in delivery systems, payment, and measurement. His article even includes a nifty infographic to illustrate. I hope I live long enough to see that future realized.

Cutler compared health care to 1980’s retail, and I would extend this to say that the productivity gap in health care is akin to what happened when personal computers became more widespread in offices in the 1980’s and 1990’s. Economists kept wondering where the productivity gains were. It wasn’t enough to simply add computers to existing business practices; business had to truly re-engineer their processes to take advantage of the new capabilities in order for productivity to soar, as it started to do in the late 1990s. Health care is not there yet.

Maybe the problem with productivity in health care – or even measuring its productivity – is that we’re too vague about exactly what we want to have happen. Process measures and patient satisfaction measures are all well and good, but what matters is what actually happens with the patient. When we can track that more effectively, maybe we can finally start identifying and attacking productivity more effectively.