How to Lower Health Care Costs: Why Not Provide Greater Access to Mid-Level Providers?

By |2017-10-08T11:38:37+00:00June 28th, 2017|Uncategorized|

How to Lower Health Care Costs: Why Not Provide Greater Access to Mid-Level Providers?

We see news reports every day of rising health care costs; overall, U.S. health spending is much higher for all categories of care, especially for ambulatory care, compared to other developed countries. And a recent survey shows that nearly 30% of adults in the U.S. reported that someone in their household has had problems paying medical bills in the past year.

I am often asked for ideas about how to reduce health care costs, but honestly, most of what I recommend, while based on evidence, is not very popular. In the latest example, a recent study in the American Journal of Managed Care shows that NPs and PAs make different prescribing decisions as compared to primary care providers, and those decisions result in lower costs.

The study evaluated the prescribing and ordering habits of primary care providers compared with those of NPs and PAs, specifically for patients with neck or back pain or acute respiratory infection (ARI). These two medical conditions are frequently associated with orders for ancillary services that are “overused and add cost without value,” such as CT scans/MRIs and narcotic analgesics for management of neck/back pain, and antibiotics to manage ARI.

The study found that overall, NPs and PAs were less likely to order these kinds of ancillary services and prescriptions, than were physicians.

For neck/back pain, primary care providers (PCPs) “were more likely to order CTs/MRIs and narcotic analgesics and NPs/PAs were more likely to order nonnarcotic analgesics and muscle relaxants,” the study finds.

“Similarly, differences were noted in management of ARI: PCPs were more likely to order CTs/MRIs – although the rate of these orders was low – as well as x-rays, broad spectrum antibiotics, and rapid strep tests; NPs/PAs were more likely to order any antibiotic,” the authors say.

“On balance, PCPs tended to be more likely than NPs/PAs to order diagnostic or therapeutic services related to N/B pain and ARI visits and to order more costly services among alternatives (e.g., CTs/MRIs vs x-rays for adults with N/B pain, broad spectrum antibiotics vs first-line general antibiotics for adults with ARIs).”

“The pattern of ancillary services use suggests that NPs/PAs might have been more judicious in use of ‘low-value’ ancillary services than PCPs,” the study finds. “

This is particularly important for treatment of back pain, where there is concern about overuse of CTs/MRIs and narcotic analgesics. For management of ARI, “overuse of antibiotics—particularly broad-spectrum antibiotics—is a long-standing concern.” In addition, overuse of rapid strep tests is another concern in management related to treating ARIs.

The study sheds further light on the issue of “low-value care,” defined as expensive procedures and tests with questionable therapeutic value; as I noted in a recent blog, a study found that one-third of Americans “have difficulty envisioning benefits from avoiding low-value care.”

Turning to hospitals, this sector is increasingly looking to non-MDs, such as NPs/PAs, to help alleviate the physician shortage, as described in a recent Practice Management News article.

The Association of American Medical Colleges (AAMC) has projected the provider shortfall will grow to 104,900 physicians by 2030. Given that NPs and PAs are typically paid less than MDs – e.g., PAs earned about $111,500 on average in 2016 versus $294,000 for average physician compensation in 2017 – hospitals may save on costs by increasing their ratio of PAs/NPs to physicians.

This study suggests that using mid-level (non-MD) providers may be one way to reduce health care expenditures. It’s not a popular solution with certain stakeholders (you can guess which ones), but when it comes to consumers, this study clearly shows a way to lower health care costs.

Patients Like It and Physicians are Interested – Why Isn’t Telehealth Flourishing?

By |2017-10-08T11:39:21+00:00June 21st, 2017|Health Care Trends, telehealth, Uncategorized, What do we pay for and why|

Patients Like It and Physicians are Interested – Why Isn’t Telehealth Flourishing?

Most people don’t really like going to the doctor. But at least some studies are showing people are more comfortable when the “going to” part of seeing a doctor is taken out of the equation.

Telehealth is defined as the use of medical information exchanged from one location to another via electronic communications to improve a patient’s health.

So how do patients view telehealth? In a recent study of patient experiences following video visits with their primary care physicians, all 19 patients interviewed reported overall satisfaction with the video visits. Most reported being interested in continuing use of video visits as an alternative to in-person visits.

Convenience and decreased costs were the main benefits cited. Some of the patients reported feeling more comfortable with video visits and preferred to receive serious news via video visits, as they could be “in their own supportive environment.”

But are physicians routinely offering telehealth visits to their patients?

In family practice, the answer is no; only 15% of family physicians had used telehealth services during 2014, according to a recent study published in the Journal of the American Board of Family Medicine.

Physician telehealth users differed from nonusers in many ways. They were more likely to be located in a rural setting (26 percent vs. 15 percent), to use an electronic health record (97 percent vs. 92 percent), and to work in a practice with at least 6 family physicians (40 percent vs. 29 percent). In addition, telehealth users were less likely to work in a privately owned practice and to provide general primary care to their patients.

Physician telehealth users were also less likely to report at least one barrier to providing telehealth services in their office than nonusers. Lack of training and reimbursement were the most common barriers identified by both users and nonusers.

“If telehealth services are to have a major impact in the primary care setting, more physicians will need to become experienced in the use of these services,” the authors conclude, noting that many of the barriers to wider adoption “are amenable to policy modifications.”

“One suggestion for overcoming the training barrier is for family medicine residency programs to ensure that graduating residents are offered opportunities to use telehealth services. To address issues of reimbursement, governmental and private payers could engage in outreach efforts to increase awareness of their current allowed payments for telehealth and either expand the types of telehealth services currently eligible for payment or develop new ways to reimburse telehealth services,” the authors say.

The bottom line is that “uptake in the United States has occurred most rapidly where reimbursement is favorable,” according to the authors of recent study in The Annals of Family Medicine. Notably, Medicare reimburses for telehealth specifically in areas where there are health care professional shortages and for specific approved services, the study says.

As far as patient preferences, the study participants “repeatedly cited reduced costs as an important benefit of video visits,” the authors note.

As part of a pilot program evaluated in this study, patients were not required to pay a co-pay for their video visits. “While this likely contributed to participants’ opinions of the cost benefits, patients also noted that they saved transportation costs and were absent from work for less time,” the authors say.

“Further work is needed to identify the full range of patient cost considerations related to telehealth, they state. “Cost issues have important implications for practices and health systems incorporating telehealth into care models, as they are likely to impact patient satisfaction and uptake of virtual services.

If it is cheaper to the patient, and it provides high-quality care that the patient is satisfied with, why wouldn’t we reimburse for it?

What would it take to shop for health care the way we shop for cell phones?

By |2017-10-08T11:40:29+00:00June 14th, 2017|Health care spending, Out-of-pocket spending, Uncategorized|

What would it take to shop for health care the way we shop for cell phones?

The “vast majority” of Americans – 95% – now own a cell phone of some type, as the Pew Research Center noted earlier this year.

Shopping for a cell phone is a pretty ordinary experience. We compare prices and features, evaluating phones in terms of the newest, biggest, fastest or the least likely to break; we have preferences, and we shop based on those preferences.

However, this is not the way most of us shop for health care. Why is that? Partly because it’s difficult to get one of the most important pieces of information: price.

Notably, if you’re shopping based on quality, you can find at least some information on quality at sites like Health Grades – but price information is harder to come by.

More than half of states have laws requiring at least some health care entities to publish prices for at least some health care procedures.  For example, Florida has a website allowing people to compare hospital rates. Patients in California can use a site that provides information on average prices for common inpatient procedures. In New Jersey, consumers can check quality and prices at hospitals.

What is still missing, though, is a patient’s ability to know his or her cost specifically.

However, some health care organizations are now realizing it can be a competitive advantage to provide more accurate information to patients about their cost-sharing.

For example, Integris Health System in Oklahoma City, OK has created a tool that provides about 240,000 price estimates for outpatient procedures per year, according to a recent PwC report. Price quotes are highly accurate, coming in at +/- 3-5% of the final charge. The tool steers patients to lower-cost providers that are still within Integris’ system, and the net result is that Integris went from $1 million in point-of-service collections in 2008 to $18 million in 2015.

In another example, St. Clair Hospital in Pittsburgh, PA noted an increase in high-deductible insurance plans among its patients. The hospital was “hearing from consumers about how important it is to them to know how much they will owe in advance of a procedure,” the report notes. After conducing listening sessions with former patients and their families, St. Clair created an online tool that provides estimates for 105 procedures. With the new tool, the hospital receives about 100 estimates each week, as opposed to the six they had been receiving previously.

What’s interesting about this tool is that rather than providing an estimate of the overall cost of a procedure, the St. Clair tool creates customized estimates, for example factoring in a patient’s insurance coverage. Thus, patients receive a true estimate of their particular out of pocket costs.

In yet another example, Geisinger Health System, Danville, PA, offers consumers price quotes, a one-stop web portal for patient information and a single, easy-to-understand hospital bill under its “Proven Experience” program, the report says. Furthermore, if a patient is not satisfied with their care, the system will refund a portion of the cost to the patient.

So what would it take to enable patients to shop for health care the way we shop for other goods and services? Fixing it on the supply side is one approach, as these examples show. Hospitals can use their ability to “be more retail” in order to win customers. The bottom line is: Patients need very specific information about what their particular costs will be.  Fixing it on the demand side comes next. Patients need to demand more cost information is made available by their health plans and providers, and then they have to vote with their feet.

Value-based care: Health executives think it will happen, but are they being rational?

By |2017-10-08T11:49:57+00:00June 6th, 2017|Uncategorized|

Value-based care: Health executives think it will happen, but are they being rational?

The global investment firm Lazard recently published their Global Healthcare Leaders Study: 2017 based on in-depth interviews they conducted with more than 300 C-level executives and investors across health care sectors including pharmaceuticals and biotechnology, medical devices/technology and diagnostics and healthcare services such as large provider systems and hospitals. One of the questions asked of these executives was the following:

“Which of the following do you believe will most transform the healthcare industry over the next 5–10 years?”

Advances in big data, demographic changes, and scientific breakthroughs all ranked below what these executives think will MOST transform health care in the coming decade.

What will be most transformative? The move to value-based care (see chart below from Lazard Executive Summary).

And just in case you were wondering, the C-level executives are pretty certain the move to value-based care will continue under the Trump administration. Recent rumblings from the administration itself seem to confirm this, even if the signals are mixed, and we have no reason to disagree. Yes, HHS has now twice delayed the implementation of Medicare bundled payment models for cardiac rehabilitation and joint replacement (implementation is now slated for January 1, 2018), but the draft HHS FY2018 budget released late in May includes a portfolio of administrative actions that would allow the Food and Drug Administration (FDA) to clarify the treatment of value-based purchasing arrangements related to prescription drugs, especially in public programs such as Medicaid.

 In our work at the state level, we see Medicaid agencies committed to increasing value-based purchasing (VBP) – for example, reaching 80% of payments in New York Medicaid by 2020 and 90% of payments in Washington State Medicaid by 2021.

Additionally, the largest health plans in the U.S. have all come forward in the past year or two with significant VBP goals, some of which are shown in the chart below:

But will “adopting value-based care” actually happen? I mean it in a very literal way. Will payers over a consistent period of time actually be able to reimburse health care providers or the systems they work in, in a way that relies on cooperation and will very likely result in lower payments?

Value-based care or payment is an umbrella term to refer to anything from bonus payments for quality, to bundled payments, to one-sided or two-sided risk sharing agreements between payers and providers. At its most basic, VBP is NOT paying for each intervention delivered (fee-for-service). In theory, the system needs to pursue value-based care in order to reduce costs while still maintaining quality. We need to “bend the cost curve” so health care costs don’t become Godzilla taking over everything else.

The view from inside a sophisticated U.S. health system that actually works with health care professionals to deliver care and negotiate reimbursements from payers is pretty pessimistic. Paul F. Levy, the former CEO of Beth Israel Deaconess Medical Center from 2002-2011, writes in an athenainsight blog that a simple negotiation game shows why “value-based care is doomed.” His short piece is worth reading, but Levy essentially argues that VBP is the latest approach to use financial incentives to change behavior, but these models, at least as they are built now, don’t seem to recognize that health care professionals are rational economic actors – and it will be incredibly difficult to get them to voluntarily give up income over a sustained period of time.

Because of this lack of acknowledgement about what it really takes to change behavior, Levy argues, “value-based pricing, however well-intentioned, is likely to be an energy-sapping distraction…”

We health policy people are all buzzing about VBP right now, much in the same way that capitation or HMOs held our attention in years past. I don’t disagree that adopting VPB would have a transformative impact on the health care system. But it also seems obvious that getting people to do more work and get paid less – whether they are physicians or any other type of worker – is incredibly difficult. Thinking rationally about being rational economic actors will be an essential element in actually achieving the transformative health care system we have in mind.

Are we giving the wrong advice on fitness and obesity?

By |2017-10-08T11:51:04+00:00June 2nd, 2017|Uncategorized, What do we pay for and why|

Are we giving the wrong advice on fitness and obesity?

What if there was a health care intervention that could save the U.S. health care system more than $300 billion? It would at least be worth hearing about, right?

Researchers estimate that obesity raises annual medical costs by more than $3,500 per obese individual. Thus, public health professionals and policy makers have sought to lower obesity rates.

The real issue is that obesity is a significant risk factor for expensive and life-threatening diseases, such as diabetes and cardiovascular disease. Heart disease is the #1 cause of death in the U.S. for both men and women, and more than half of the deaths due to heart disease are men, according to statistics issued by the CDC. Heart disease deaths vary by geography though. As this map shows, from 2008-2010, death rates due to heart disease were highest in the South and lowest in the West.

Source: CDC

There are many common risk factors for heart disease. For example, high blood pressure, high cholesterol, and smoking are key risk factors for heart disease. About half of Americans (47%) have at least one of these three risk factors, the CDC says. Several other medical conditions and lifestyle choices can also put people at a higher risk for heart disease, including:

• Diabetes
• Overweight and obesity
• Poor diet
• Physical inactivity
• Excessive alcohol use

This means that most public health education is generalized to say things like “You should improve your lifestyle,” in order to decrease your risk for the #1 killer – heart disease.

However, new research says the advice should be much more specific.

“I think one of the reasons for failure of public health initiatives in modifying lifestyle behavior is giving a blanket message of improving lifestyle, which includes healthy eating, exercising, not smoking, and a bunch of other factors,” Ambarish Pandey, University of Texas Southwestern Medical Center, Dallas told Medscape.

In a study published in JACC: Heart Failure in April 2017, Pandey and colleagues evaluated nearly 20,000 people for more than six years; as expected, they found that people who were overweight or obese were more likely to have the traditional cardiovascular disease risk factors noted above. These individuals were also likely to have lower cardiorespiratory fitness (CRF).

The researchers also found that CRF accounted for 47% of the risk of heart-failure hospitalization associated with increased BMI. “These findings highlight the importance of CRF in mediating BMI-associated heart failure risk,” they conclude.

“I think our study shows that we could target low fitness and exercise more aggressively and more tactically than BMI or body weight and encourage people to exercise more,” Pandey said. “Obviously a higher BMI is bad and lower BMI is better, at least at the normal range, but I think focusing more on fitness and exercise and focusing more on the level of physical activity may be the greater goal in the near future to better improve the risk of cardiovascular diseases.”

Of course, there are many problems with reducing cardiovascular risk by advising people to exercise more, and maybe even helping them do so, not the least of which is that it is not a medical intervention. In other words, no physician or other health care provider gets paid to recommend it.

Who should pay to help people exercise more? Should employers pay for your gym membership or P90X® workout videos? When a person moves from a low level of fitness to a moderate level of fitness – which is the most beneficial in terms of reducing cardiovascular risk – who should get credit in a world moving to value-based payment?

Changing what we pay for in health care will in turn change what interventions are delivered.

That is much more easily said than done, however, if interventions that work are not delivered by the medical professionals who get paid by health insurers or other third-party payers, such as federal and state governments.

Another solution would be to pay physicians to conduct these interventions. Why shouldn’t a medical professional get paid to do what works?

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