Have we passed peak health care disruption?

By |2019-07-08T21:03:06+00:00July 8th, 2019|Health Care Trends, Health Reform, Innovation, Uncategorized|

Have we passed peak health care disruption?

Disrupting health care has been a hot topic the past few years, but it seems to me we have passed peak health care disruption and firms are now having to roll up their sleeves to do the boring, difficult work of creating incremental change.

The high point of disruption in health care (see chart below) looks to be the announcement January 30, 2018 from Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. of a health care joint venture to “address healthcare for their U.S. employees.

What has happened related to that partnership in the last 18 months is the naming of the entity (Haven), some prominent hires (Dr. Atul Gawande), and some key staff departures (Jack Stoddard).

But there have been some notable smaller steps from two of the three Haven entities that signal feasibility and immediate impact are stronger drivers than disruption. While policy types may be interested in wholesale transformation, the business of digital health is concentrated on more immediate change.

Right after the Haven announcement, Amazon bought PillPack, an online pharmacy and platform that helps manage patient data. Last month, JPMorgan Chase & Co. bought InstaMed, adding health care payment services to the bank’s existing service offerings in wholesale payments. Knowing more about your customer and serving them better, just like in any other business, seems to be where health care companies are focused.

These kinds of digital health deals may be the wave of the future, according to RockHealth’s 2019 Midyear Digital Health Market Update. Their report (see chart below) shows a steady amount of digital health investing year-over-year, but an increasing average deal amount.

Perhaps more importantly, acquisition by non-health care companies is proving to be an increasingly likely exit ramp for digital health investors, as the PillPack and InstaMed deals exemplify. Providers and non-health care companies are stepping up their acquisitions of digital health ventures, as the chart below shows.

The next step in health care might be smaller than the word “disruption” implies. Over the past few years, health care has proven to be more complex than many tech companies and policymakers have thought. RockHealth quotes David Kim, Managing Director of DigiTx Partners, as saying: Big tech companies “are likely to acquire technologies and companies with expertise and domain knowledge that allow them to take that next step to health care without just diving in blindly headfirst.”

If disruption equates to diving in blindly headfirst, I agree. Health care change going forward is going to be data-fixated, consumer-focused, and incremental.

“Medicare-for-All” Understood as Lower Premiums for Me?

By |2019-05-07T20:39:01+00:00May 7th, 2019|Health care spending, Health Care Trends, Health Plans, Health Reform, Insurance, Medicare, Medicare For All, Out-of-pocket spending, Uncategorized|

“Medicare-for-All” Understood as Lower Premiums for Me?

Proposals for Medicare-for-All, or more accurately, universal health coverage, are being introduced by both Congress and state legislatures at a rapid pace (see this useful interactive tool, The Many Varieties of Universal Coverage from The Commonwealth Fund). While policy types argue over how such a plan would be funded and how to set reimbursement rates for providers, and Wall Street frets about what single payer health coverage would do to health insurance companies, state legislators and regular people seem to have a different perspective. In my many conversations with people across the country about the idea of “Medicare-for-All,” I have found it striking how often people say they favor such an approach because they want lower health insurance premiums.

I think we may have a language problem. When health policy people hear “Medicare-for-All”, they think “change the health care delivery and insurance infrastructure from employer contributions to taxpayer contributions,” but maybe when regular people say “Medicare-for-All”, they mean “please find a way to lower my premiums”. The Kaiser Family Foundation Health Tracking Poll conducted in early January hints at the importance of lower premiums as a reason to support “Medicare-for-All” type proposals. As shown in the figure below, nearly 50% of people polled strongly favored proposals that allow people between 50 and 64 years of age to buy in to Medicare, or allow people to buy in to Medicaid, or create a plan like Medicare that is available to anyone. Getting insurance from a single government plan is strongly favored by only 34% of respondents.

These “buy-in” proposals may be gaining in popularity as people lose access to employer-sponsored insurance. Here is the math: “if the coverage rate for employer-sponsored insurance was the same in 2017 as it was in 1999 (67.3%), almost 24 million (or 23.8 million) additional people would be covered through an employer plan in 2017.”

It’s easy to understand why people would focus on lower health care premiums; rising premiums are having a big impact on household incomes. As fewer people are receiving health insurance through their employer, they are also being exposed to higher costs for health care premiums. We pulled recent information on employer and worker contributions for health insurance, the average national premium for a person earning just over 400% of FPL ($49,000) to buy a health plan on the ACA Exchange at various ages, and Medicare premiums. We then created a rough comparison chart of what premiums an individual might have to pay for health insurance based on how they accessed coverage. Below is what we found:

Notably, the average annual premium for employer-sponsored coverage of an individual was about $6,900 last year. But employees usually paid just 18% of that amount. For people who may have been covered by their employer for years, and then have to buy insurance in the ACA Exchange, the loss of that employer-sponsored contribution to their health insurance coverage could be quite a shock.

It’s a catchy phrase and easy to hashtag in social media, but is the appeal of Medicare-for-All driven largely by the hope that a person’s premiums will be lower? Is Medicare-for-All the best or only way to achieve lower premiums? As with all policy issues, we should probably start with the key question, “what problem are we trying to solve” and then go from there, always checking to see that we are, in fact, addressing the problem we are trying to solve with a workable solution.

Same health care, different setting, but much higher costs

By |2019-04-25T20:36:11+00:00April 24th, 2019|Health care spending, Health Reform, Insurance, Medicare, Uncategorized, What do we pay for and why|

Same health care, different setting, but much higher costs

There is so much health care news happening right now, you may not have seen this, but different services cost different amounts, depending on where they were delivered. While this concept isn’t necessarily news to health care policy types, this latest data set and accompanying graphics make the issue clearer than ever and beg for a policy fix.

The Centers for Medicare & Medicaid Services (CMS) finalized the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Rule November 21, 2018, implementing site neutral payments for hospital outpatient clinic visits. The policy essentially reduces payments for services provided in outpatient settings to the same level as the payment made for the same service in a physician’s office.

However, the policy change applies only to Medicare, which covers less than 20% of the U.S. population. The commercially insured, for example, via employer-sponsored insurance and the individual and small group market, account for 56% of the population (see Charles Gaba, The Psychedelic Donut: Types of Coverage in the U.S.).

Wouldn’t a similar policy for people who receive health insurance outside of Medicare be a way to reduce costs?

Outpatient setting is always more expensive…

The Health Care Cost Institute compared a common set of services performed in physician’s offices and outpatient hospital settings and found “for this set of services, the average price was always higher in an outpatient setting than an office setting.”

Services that saw a significant change when provided in an office vs. an outpatient setting varied by service. Some of the bigger changes were for ultrasounds, upper airway endoscopies, and drug administration. For example, “in 2017, 45.9% of level 5 drug administration visits occurred in outpatient settings, compared to 23.4% in 2009.”

Not only did prices increase over time for both settings, the site differential for some of the visits was stunning.

We took the HCCI info and added a calculation of our own for a few of the visit types to show the percentage difference between the price of a visit in the office setting vs. outpatient setting, as shown in the table below.

It is also something that should be made transparent to patients. As mentioned in a recent blog, health care costs are rising and people are struggling to afford those costs. States are passing transparency bills left and right (hospital transparency, drug price transparency), even though it is unclear how “transparency” actually lowers costs. However, implementing site neutral payments for all payers (not just Medicare) is a more obvious, and more immediate, improvement to rising health care costs.

What the Midterms Mean for State Health Policy

By |2018-11-09T20:29:48+00:00November 8th, 2018|Health care spending, Health Plans, Health Reform, Insurance, Medicaid, Out-of-pocket spending, State Health Initiatives, Uncategorized|

What the Midterms Mean for State Health Policy

The midterm elections have happened and all signs point to health care as a top issue in state legislatures in 2019. We have been telling our readers (and clients) this for several months, and Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation, wrote in a guest post for Axios today: “most of the real action affecting people will be in the states.”

Approximately 4 in 10 voters told exit pollsters health care was the top issue for their voting choices. This isn’t surprising as health care costs are going up by about 5% a year, and consumers are being asked to pay a higher share of those costs, which is clearly putting pressure on state policymakers to do something.

States are under particular pressure because they are responsible for overseeing the individual and small group health insurance markets and Medicaid. Why does this matter? Because an increasing proportion of people are working, but don’t have access to employer-sponsored insurance, and can’t afford health insurance being offered in their state.

That is, people have jobs, but the jobs don’t offer health insurance.

In The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015, researchers at the National Bureau of Economic Research (NBER), Lawrence Katz from Harvard University and Alan Krueger of Princeton University, estimate:

…all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.

The researchers found between 2005 and 2015 workers in alternative work arrangements, such as “temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers – rose from 10.1 percent in February 2005 to 15.8 percent in late 2015.”

For these “gig workers,” buying health insurance coverage, for example in the Obamacare exchanges, means high premiums (see blog last week) and very high deductibles, as the chart below from Avalere shows.

Deductibles of $4,000, $5,000, $6,000 are rarely seen in large employer insurance offerings. Only 20% of covered workers in large firms in 2018 had an annual deductible of $2,000 or more. Compare that to 42% of workers with a deductible of $2,000 or more in small firms (fewer than 199 workers), as the Kaiser Family Foundation chart below shows.

For the parts of the health care market states oversee, including the individual and small group insurance markets, state employees, and Medicaid, states will have their hands full in 2019 as they try to manage health costs for constituents who are working but can’t afford the health insurance options available to them.

It’s hard to understand why it’s reasonable that a freelancer or person working in a small firm can’t have access to the same affordable, robust health coverage as their counterparts in large firms.

It’s Open Enrollment for Health Insurance. Am I a Small Business?

By |2018-11-02T16:14:41+00:00November 1st, 2018|Health Plans, Health Reform, Insurance, Uncategorized|

It’s Open Enrollment for Health Insurance. Am I a Small Business?

Open enrollment started today for the approximately 15 million people – less than 5% of the U.S. population – who do not purchase their health insurance through an employer, or receive it via a government-run program, such as Medicaid, Medicare, or military health care. Likewise, for people enrolled in Medicare, or many employer plans, it is the season to be making a choice about what health insurance you’d like to have for you and your family next year.

As a small business owner, I am also faced with a decision about whether and how to offer insurance to my employees, and what to offer. Here is where the fun begins and where my work life as a state health policy consultant collides with my experience as an employer trying to do the right thing.

In Virginia, as of 2018, I can now choose between buying coverage in the individual market or the small group market. This is because the Virginia legislature passed SB672 this summer, revising the definition of “small employer.” Here is the super boring, but very important change as described by the Virginia Bureau of Insurance in a bulletin to health insurance carriers:

The new law broadens the definition of “small employer” in §§ 38.2-3406.1 and 38.2-3431 of the Code of Virginia (“Code”) to include a “self-employed individual, and to allow a sole shareholder of a corporation or a sole member of a limited liability company (“LLC”), or an immediate family member of such sole shareholder or sole member, to count as an employee of the corporation or LLC, provided that the individual has performed a service for remuneration under a contract of hire.

Why does this matter? Because the rates offered to me in the small group market are much lower than those offered to me in the individual market for the same coverage, in the same market, with the same selection of providers. The difference is stark as the table below shows.

Table 1. M2 Health Care Consulting Healthcare.Gov Individual v. Small Group Rate Comparison

Notably, the Virginia Bureau of Insurance admits in the summer bulletin, “the inclusion of sole proprietors in the definition of “small employer” does conflict with the definitions of “small employer” as administered by the Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service, § 1321(d) of the Patient Protection and Affordable Care Act (“ACA”)…” [emphasis added]

But in its defense of possibly being in violation of federal law, Virginia argues first, that this provision “does not ‘prevent the application’ of the ACA,” and second, that other states have enacted similar laws.

Health care is confusing, expensive, and has become increasingly frustrating. Virginia decided to make a health care policy change this year that makes at least one small business less frustrated, while at the same time making health insurance options for me and my employees less expensive and we appreciate it. Let’s keep working on the system and see what else we can do!

The Rising Cost of Health Care – a 360 Degree Perspective

By |2018-09-21T20:19:20+00:00September 21st, 2018|Health care spending, Health Reform, Insurance, Out-of-pocket spending, Uncategorized|

The Rising Cost of Health Care – a 360 Degree Perspective

The Colorado Women’s Alliance surveyed 2,000 swing women voters in Colorado earlier this year and asked them to identify their top issues of concern, as well as what they hoped the new Governor (who will be elected in November) and Colorado legislature will focus on in the coming session.

The rising cost of health care was the number one issue.

In response, Joni Inman, the Executive Director of the Alliance, in partnership with the Summit Chamber, organized a series of events, including a panel discussion in Frisco, Colorado last week titled “The Rising Cost of Healthcare – a 360 Degree Perspective.” I was honored to serve as a panelist alongside Colorado House Representatives Millie Hamner (D) and Bob Rankin (R), and professionals from the local hospital, a statewide health insurer and the Summit County Care Clinic.

While I am often asked to share policy ideas, for this panel, we were asked to share thoughts on what the consumer can already do that they might not realize is a good strategy available to them to lower their health care costs.

This is of particular relevance in Summit County as it is one of the healthiest places in the U.S., but also has some of the highest health insurance premiums in the country. Not surprisingly, Summit County health care consumers, as the audience quickly proved once the panel discussion started, are highly informed and interested in being proactive about their health care and the health care of their families.

My primary message was simple. When it comes to health care, we need to be much more demanding.

Be a demanding constituent

Sharing the stage with elected officials, I acknowledged the state legislature and Governor’s administration has some ability to make changes to how health care, and health insurance is financed and delivered. With that in mind, yes, it is important to advocate for policy changes. Vote. Call your representative. Send letters. Participate in hearings. Get involved in local politics. Make your opinion and preferences known.

This seems simple, but Reps. Hamner and Rankin were clear that they wanted to hear more from constituents, and individuals in particular, not just from lobbyists. Still, this can be hard to do. We all have busy lives and sometimes it is hard even to know what is happening regarding legislation or proposed policy ideas.

Be a demanding consumer

In addition to being a demanding constituent, it is important to be a demanding consumer. What can consumers already do that are good strategies to lower costs? Know more and ask questions.

First, know as much as you can about what your health insurance costs. What is the premium amount? What is the deductible? What types of services are covered at what levels? What are your rights to appeal a denial? Lots of resources exist. A great place to start is this compilation of websites from the Institute for Healthcare Improvement.

Second, as a consumer and as a patient, it is important to ask questions. Especially about how much a health care service will cost you. Of course, if you have been transported by ambulance to the emergency department, you aren’t going to be able to demand pricing information, but in the many instances you can ask, you should.

For example, as of May of 2018, 26 states, including Colorado (see map) have passed laws banning a practice that forbid pharmacies from informing consumers if and when the drug they were seeking to buy would be cheaper if they paid out-of-pocket instead of using their insurance. Yes, you read that right! Before these laws, many pharmacists were contractually forbidden by so-called “gag clauses,” from answering a direct question from a consumer at the pharmacy counter about the purchase price of a drug.

Ask this question: What is the price of this medicine, or this procedure, or this lab test, if I don’t use my insurance?

This strategy works outside of the pharmacy too. A consumer in the audience at the Summit County event gave an example of going to a local hospital with her husband over the fourth of July after he broke his elbow. When they asked the hospital about the price for the scan a provider recommended, they were told they could receive a 50% discount if they paid cash or used their credit card instead of using their insurance.

When I went to my dermatologist recently, I signed a document saying I wouldn’t submit a claim to my insurer if I agreed to use a specific pathology lab that would only charge $65 for lab tests. While my dermatology office wouldn’t tell me exactly how much I was saving (I was saving it since I was out-of-network and have a $7,600 deductible even in-network), they implied the insured rate for these pathology labs was hundreds of dollars more.

Demand more

Yes, call your legislator. Participate. Organize. Vote. But, we should all demand more of our employers, our health plans, and our health care providers, too. Ask for price lists. Ask for discounts. Ask what care options you have. Ask whether cheaper alternatives exist and how you can access them. Tell your employer you want choices.

We are all health care consumers, even if we aren’t all patients. Make your voice heard and your preferences known. Consumers can change the way the system works, but we have to demand that change.

CVS Health Just Upended the U.S. Health Insurance Market

By |2018-08-15T13:38:07+00:00August 14th, 2018|Health care spending, Health Care Trends, Health Plans, Health Reform, Innovation, Insurance, Out-of-pocket spending, Retail Health, telehealth, Uncategorized|

CVS Health Just Upended the U.S. Health Insurance Market

For $59, CVS Health will now offer telehealth video visits through the company’s retail medical clinic, MinuteClinic. The video visits will be available through the CVS Pharmacy App to anyone interested who lives in Arizona, California, Florida, Idaho, Maine, Maryland, Mississippi, New Hampshire, and Virginia – and Washington D.C.

This move will significantly change the health insurance market, and CVS’s merger with giant insurer Aetna isn’t even final, though reportedly, the “Justice Department’s antitrust division hasn’t turned up vertical competition concerns from the merger,” increasing the odds significantly that the deal closes before the end of the year.

What does CVS Health see that is driving this strategy? A shifting private health insurance market that requires people to pay up front for routine care, making consumers more sensitive to costs and less obligated to use a provider that is “in-network.” In the olden days (2006!), as the chart below shows, patients paid the majority of their cost-sharing payments in the form of copayments or coinsurance, that is, payments to providers who had an agreement with a health insurer. In 2016, for the first time, more than half of cost-sharing payments were in the form of a deductible, as the chart below from the Peterson-Kaiser Health System Tracker shows.

MinuteClinic video visits for $59 (paid for directly by the consumer) capitalize on three ongoing trends: 1) Patients have to pay more, before insurance starts to pay for claims, making consumers more sensitive to cost; 2) Patients want more convenience and CVS can deliver it more cheaply, in no small part because there are no insurance forms or administrative costs; and 3) Payers are reluctant to pay for virtual visits.

First, CVS Health is looking to serve people with routine health needs who are shopping for lower costs.

According to FAIR Health, the median charge for a new patient office visit at a retail clinic in 2016 was $109, compared to $294 in an office setting. The average charges and allowed amounts for the most typical retail clinic visits are shown in the chart below from the FH Healthcare Indicators™ and FH Medical Price Index.™

Simply put, the video visits will be cheaper than retail clinic visits. And, even if a patient is referred from the MinuteClinic video visit to one of the 1,100 MinuteClinic physical locations, that patient is likely to save more than $100 for the visit compared to going to a physician visit.

Second, CVS is looking to leverage the steep rise of people seeking care in retail clinics, by offering a clear value proposition to use a MinuteClinic virtually because it’s cheaper and more convenient. As the chart from FH Healthcare Indicators™ and FH Medical Price Index™ below shows, retail clinic visits increased by 847% from 2011 to 2016 with growth in rural areas increasing by 704% and in urban areas by 865%.

Clearly, CVS Health knows their potential customer well. A survey of 5,000 virtual visit users published by the Advisory Board in April shows more than 33% of people who had a virtual visit lived in a city, compared to 9% who lived in the suburbs or rural areas. Virtual visit users are also high earners – 52% “make more than $71,000 a year,” and are more likely to have private insurance.

Third, CVS Health sees that getting insurance companies to pay for virtual visits is hard. Forbes recently touted telehealth in article titled, Lower Cost Higher Quality Health Care Is Right At Our Fingertips but the author was blunt in his explanation of what is holding telehealth back:

“The biggest obstacles? Government. Insurance companies. Employers. They pay the bills. Not only have they been slow to take advantage of telemedicine, they are refusing to pay for most of it…”

Getting a virtual visit via the free CVS/pharmacy app for just $59 means a person can go around his or her insurance company – and CVS avoids that hassle, too. Here are just a few ways that CVS Health’s approach differs from regular health insurance: You don’t need a referral. You don’t need to wait days for an appointment. You probably don’t have to take time off work because the virtual visits are available 24 hours a day, 7 days a week.

If you are one of the 40% of people who has employer-sponsored insurance but is enrolled in a high deductible health plan (HDHP), you probably love the idea of a cheaper alternative to a retail clinic since you are accustomed to paying out-of-pocket for your basic care now. Even if you have insurance, it doesn’t matter, because the virtual visits can only be paid for with a credit or debit card (CVS Health said they will add insurance coverage and national coverage by the end of the year).

Insurers have been offering limited products, in limited geographies, with limited providers, their “network,” for years. The launch of MinuteClinic video visits will be trumpeted as a huge value for consumers. That is only half the story. How will health care providers convince people who are mostly healthy that they have to wait for appointments between 10am and 3pm at a complex, integrated health system where they have to pay to park? How will insurers convince people to continue to buy the expensive, comprehensive coverage on offer today? This move will start to change the way people think about what insurance is even for. Now THAT is disruptive.

Consumerism: “Activity in Search of Strategy”

By |2018-07-17T19:59:47+00:00July 17th, 2018|Health Care Trends, Health Reform, Hospitals, Providers, Retail Health, Uncategorized|

Consumerism: “Activity in Search of Strategy”

Consumerism is a hot topic in health care. Whether you define it as (a) improved personalization (as Robert Sahadevan, Senior Vice President of Consumer Marketing & Analytics at Humana and formerly the VP of United Airlines’ Mileage Plus frequent-flier program does), or (b) understanding and meeting/exceeding customer expectations, or (c) encouraging patients to act like consumers by actively choosing where to spend their health care dollars, consumerism is a focus in practically every health care business across the country.

The trouble is, while consumerism is a focus, it seems much of this work in health systems and hospitals at least, is “activity in search of strategy,” according to KaufmanHall, a strategic, financial, and operational performance advisory firm.

The KaufmanHall 2018 Healthcare Consumerism Survey included more than 425 respondents across 200 health systems, stand-alone hospitals, children’s hospitals, and specialty hospitals. “Improving customer experience” was a top strategic priority for 90% of the respondents. Still, the survey found “these efforts need to be more strategic, more effective, and more rapidly implemented if legacy healthcare organizations are to grow and compete in an increasingly consumer-focused world.”

Where is the disconnect? Why is there so much activity that isn’t strategic or likely to be effective? Seemingly, it’s because these health care organizations are focused on the ways they would like to improve customer service, not necessarily on the ways consumers would like to see access and care changed.

Example 1: Consumer Access

The KaufmanHall 2018 survey respondents ranked high on access to bricks and mortar health care facilities. More than half said their organization had an urgent care center, 40% said they offered access to freestanding imaging sites, and outpatient centers were widely available.

More innovative care options, that some studies show are preferred by consumers, were not as common. Video visits were only available at 14% of the respondent facilities, and retail clinics were only available at 27% of health systems or hospitals surveyed.

Example 2: Consumer Convenience

Consumers who are accustomed to clicking a button and receiving a shipment later that day, or horrors, the following day, don’t want to wait a week or a month for an appointment to see a health care provider. Conveniences such as same-day scheduling of appointments, online scheduling, and extended hours are expected by consumers, but few organizations are delivering. The chart below shows only about a third of the KaufmanHall respondents offer same-day appointments or extended hours for primary care. Only 20% have fully implemented online self-scheduling.

Example 3: Consumer Frustration

Notably, interactions with the health care system that patients and consumers find frustrating are not typically much of a focus for health care organizations. One example is reducing office wait times. Just 17% of the KaufmanHall respondents have a full implemented initiative to address wait times. Another example is billing. It isn’t for lack of understanding billing as a customer pain point that organizations aren’t prioritizing it: “Billing is confusing and frustrating and stressful, and it is their last interaction with us,” one executive explained in the survey, yet only 28% of respondents had fully implemented customer-friendly billing statements. Organizations instead seem focused on changes easy for them to make, such as ensuring phone numbers are easy to find and providing customer service training for staff (see chart below).

Example 4: Pricing

“Of all the key areas related to consumerism in healthcare, pricing strategy provides the most room for improvement for the nation’s hospitals and health systems,” according to KaufmanHall. Asking any person who has interacted with the system, and indeed, most policymakers, you will get the same answer. Consumers need more information about the prices of the services or products they have been told to buy by their health care provider – whether a surgical intervention or prescription medication. Only 5% of the KaufmanHall respondents are “aggressively pursuing” consumer initiatives related to pricing strategy and/or price transparency. Only 10% list prices online and less than half can provide a consumer-requested price quote in a defined period of time.

Design Thinking Opportunity in Consumerism

We have written a book chapter titled, Using Small Step Service Design Thinking to Create and Implement Services that Improve Patient Care, for the upcoming book, “Service Design and Service Thinking in Healthcare and Hospital Management” from Springer Publishing (due out this fall). The chapter is about using design thinking in health care services and provides two case studies about organizations that have done it well. As the KaufmanHall 2018 State of Consumerism in Healthcare showed, many organizations are involved in activities that address the consumer experience, but most of these activities are not strategic aligned with what consumers actually want. Better understanding the customer – for example, by using the five-step design process – would likely improve these organizations’ efforts to exceed customer expectations. Until health care organizations can look outside their own experience, improving consumerism is likely to be very slow going.

More on social determinants of health: What are they, why are we talking about them so much, what’s happening now?

By |2018-06-15T19:32:48+00:00June 15th, 2018|Health Care Trends, Health Disparities, Health Information Technology, Health Reform, Innovation, Public Health, Social Determinants of Health, Uncategorized|

More on social determinants of health: What are they, why are we talking about them so much, what’s happening now?

Here at M2, we spend a lot of time thinking about the social determinants of health (SDH), or the nonmedical factors that can affect a person’s overall health and health outcomes. We have blogged recently about this issue, here and here. The issue is gaining momentum and we are seeing more articles and studies addressing how to better incorporate SDH into programs and technologies; for example, former CMS administrator Andy Slavitt recently announced his new venture capital firm will focus on companies in this area. Another recent article highlights the opportunities for technology entrepreneurs as adoption rates for SDH technologies are projected to increase over the next ten years. Today we are taking a close look at a recent position paper from the American College of Physicians (ACP).

SDH are defined as “the conditions in which people are born, grow, work, live, age, and the wider set of forces and systems shaping the conditions of daily life”. In other words, “where a person is born and the social conditions they are born into can affect their risk factors for premature death and their life expectancy,” the ACP notes in its recent paper.

SDH are “responsible for most health inequalities,” the ACP says; the paper examines the complex issues involved and provides recommendations on “better integration of social determinants into the health care system while highlighting the need to address systemic issues hindering health equity.”

The paper was drafted by the ACP’s Health and Public Policy Committee, and the ACP notes that it is charged with addressing “issues that affect the health care of the U.S. public and the practice of internal medicine and its subspecialties.”

“Understanding and addressing social factors that affect health outcomes is a pressing issue for physicians and medical professionals,” the ACP says. The group is issuing a set of recommendations “to empower stakeholders to advocate for policies aimed at eliminating disparities and establishing health equity among all persons.”

The paper features nine policy recommendations. Most notably, these include: integrating SDH into medical education at all levels; adequately funding federal, state, tribal, and local agencies in their efforts to address social determinants of health; developing best practices for utilizing electronic health record (EHR) systems as a tool to improve health without adding to the administrative burden on physicians; and adjusting quality payment models and performance measurement assessments to reflect the “increased risk associated with caring for disadvantaged patient populations.”

Expanding on one of the recommendations above – the importance of EHRs and collecting data – the paper notes that in 2014, a National Academies of Science committee identified 12 social determinants to be included in EHRs as part of meaningful use stage 3, and issued recommendations on standardizing collection of measures of these social determinants. Several behavioral and social domains are currently collected: tobacco use; alcohol use; race/ethnicity; and residential address, which is geocoded.

The report says that in terms of racism and health equity, the ACP’s policy on racial and ethnic health disparities “acknowledges that addressing social determinants of health is a key component to increasing health equity among racial and ethnic populations.”

Social determinants “can exacerbate health care disparities among racial or ethnic groups,” the paper says. “Socioeconomic status, race, and ethnicity are connected in a complex, multidimensional way and may affect a person’s health independently or in combination.” As an example, the ACP notes that Latina women experience a greater incidence of cervical cancer and higher mortality rates than non–Latina women. Access to care for Latina women is also affected, as they are more likely to lack health insurance than white non-Latina women.

SDH has been a bit of a buzzword for a while in public health circles, but it may finally be time for SDH to influence policy, as seen by ACP’s efforts. “Why now?” many are wondering. As proof points pile up, and more people gain an understanding of what SDH are, the concept is gaining momentum and being included in more discussions.

For example, it’s interesting that one of the largest physician groups has developed policy positions on SDH. This may be an indication that physicians in general are realizing the significant role that SDH play in individuals’ health. Incorporating an understanding of SDH into not only the practice of medicine, but also into the tools and incentives that drive patient care, would be welcome steps in helping to reduce the negative health outcomes related to SDH.

Who Should Be Allowed to Help Patients Pay Health Costs?

By |2018-06-06T17:07:51+00:00June 6th, 2018|Health care spending, Health Care Trends, Health Reform, Insurance, Medicaid, Medicare, Out-of-pocket spending, Reimbursement, State Health Initiatives, Uncategorized|

Who Should Be Allowed to Help Patients Pay Health Costs?

If you can’t pay your health insurance premium, should you be allowed to have someone else pay it for you? What about your deductible? Your co-insurance or a copayment? These might seem like trick questions, but no. There really are circumstances when a person can’t receive help for health care costs. In the past few years, this has become a hot topic in health policy circles as health care costs continue to rise. At issue is a fundamental question we have considered before: whose health care costs should be managed, those of the healthy or the sick? Is it better to have sick people pay more so that healthy people who buy insurance can keep their premiums low? Or is it better to spread catastrophic health costs across larger pools of people so everyone pays a little in order to avoid ever paying a lot?

Third-party payments: Friend or foe?

When the Affordable Care Act was being debated nearly a decade ago, the American Enterprise Institute correctly pointed out, the entire U.S. health care system “relies on a third-party payment system.” That is, either individuals or employers make payments to insurers who in turn make payments to health care providers, or taxpayer money is used to pay health care providers who care for people covered by Medicaid, Medicare, TriCare or other public programs.

While the big picture debate of how to finance and provide health care services and for whom continues, this blog is focused on a more specific type of third-party payments (TPP). Right now, states and the feds are being asked to weigh in on which third parties should be allowed to pay insurance premiums or healthplan-required cost sharing, for example, a deductible or a health care service or product copayment. The debate at this moment is focused on people with chronic, severe, or expensive health care needs – people who need kidney dialysis, for example. The feds have been trying to work out guardrails since 2013 related to whether a third-party organization can pay for a person’s premiums in the state insurance exchanges. (For a deeper dive, go here). California has also joined the fray and is considering a bill, SB 1156, “Health care service plans: 3rd-party payments,” setting forth who will be allowed to make TPP for health insurance premiums.

Representing the “foe” side is America’s Health Insurance Plans (AHIP). A recent brief titled “How Third-Party Premium Payments Can Harm Consumers and Destabilize Markets” argues that TPPs from “entities steering Medicare and Medicaid eligible beneficiaries into qualified health plans (QHPs) sold through the Affordable Care Act (ACA) marketplaces…can increase the number of older and less healthy individuals in the individual market risk pool, resulting in higher premiums for all consumers and further destabilizing the market.” In support of SB 1156, the California Labor Federation presents a similar point-of-view, arguing that allowing TPPs of premiums for individuals with chronic or severe illnesses “also shifts costs onto commercial plans, driving up health care spending and increasing premiums for Californians already struggling with rising costs.” Who should pay when a person is sick? Is it always the better choice to shift costs to taxpayers by requiring a person who needs dialysis to enroll in Medicaid or Medicare, as AHIP suggests? How should we balance the interests of individuals and employers who want low health care premiums with the needs of patients with high health care costs?

Representing the “friend” side is The Commonwealth Fund in “Assessing the Promise and Risks of Income-Based Third-Party Payment Programs.” Their brief acknowledges the policy debate outlined above regarding TPP programs serving patients with specific health diagnoses, but focuses on TPP programs that address health care costs for a different population, noting, “History suggests that TPP programs can address low-income consumers’ affordability concerns on a large scale.”

Many of the guardrails set forth by The Commonwealth Fund parallel the California bill, including basing eligibility for TPP on income and paying “consumers’ premium shares from the point of enrollment through the end of the coverage year, thus preventing short-term enrollment that ends once a course of treatment is complete.” These guardrails seem to address several of the foe’s concerns. First, basing TPP on income means both the healthy and the sick can gain access to health insurance, which makes it much less likely that premiums rise due to a sicker risk pool. Second, AHIP argues consumers can be harmed “particularly if the third party stops making premium and cost-sharing payments once initial treatment is received, which could result in serious or life-threatening interruptions in access to care.” Requiring entities that provide TPPs to pay for more than just initial treatment addresses the foe’s concern.

I’m an aunt. Can I pay for my nephew’s prescription drug cost sharing?

One of the remaining concerns at the heart of TPP for health insurance premiums or health plan required cost-sharing (such as co-payments) relates to whether the organization making the TPP is motivated by financial gain or is steering patients to specific health care products, services, or providers. Federal law prohibits most TPPs in federal health programs, for example, Medicaid and Medicare, considering the TPPs to be in violation of one or another fraud and abuse law, such as the Anti-Kickback Statute and the Physician Self-Referral Law (Stark law).

While it makes sense that a health care provider should not be allowed to accept bribes, it is much less clear who should be allowed to help patients pay health costs. The way the U.S. health care system works today, if a person is not eligible for government-sponsored health care (for example, through Veterans Affairs, Medicare, or Medicaid) and they cannot pay for individual health care costs, whether premiums or cost-sharing such as copayments or deductibles, the person can usually be denied care. To be clear, AHIP is arguing that private entities, or groups of people, cannot come together and help such an individual make the health plan-required payments. The California bill says, “Any member of the individual’s family” can make a TPP, but then goes on to define “family” only to “include the individual’s spouse, domestic partner, child, parent, grandparent and siblings.”

This begs the question of what should be allowed when it comes to TPPs. What entities should be allowed to pay for patient’s health care costs?

  • Medical crowdfunding, such GoFundMe campaigns?
  • Health care sharing ministries?
  • Contributions gathered voluntarily by employees to help a co-worker with cost-sharing requirements? Or by a congregation to help a fellow churchgoer?
  • Employer emergency funds?
  • Family members helping family members, (let’s say Aunts, for example…)

It is quite clear that the alternative to the TPP being made is no payment being made, which certainly would cause an interruption in access to care for the patient who needs it. Like most health policy issues, TPPs can be either friend or foe and a one size fits all policy won’t work. Creating guardrails focused on allowing entities, including those in the list above, help patients pay their medical bills should be paramount.