Hospitals

Health care costs: What’s the real story?

By M2|2019-11-13T16:19:34+00:00November 13th, 2019|Health care spending, Health Care Trends, Health Plans, Hospitals, Insurance, Providers, Uncategorized|

Health care costs: What’s the real story?

As I travel around the country talking to state legislators and health care leaders, questions about health care costs are usually at the top of their lists. The first request they make is for credible, public sources of information they can use to help inform their policy decision making.

Two slides I frequently use in presentations receive the highest engagement. My informal measurements of engagement are people in the audience taking pictures of the screen when the slide appears, and comments such as, “This is incredibly helpful” or “I haven’t seen it presented like this before.”

The first slide is a graphic (see below) from the Peterson-Kaiser Health System Tracker and shows how cost-sharing requirements, especially in the form of deductibles, have outpaced wage growth.

The second slide I created because the information is harder to find than you’d expect. Notably, the information is out there, but it is buried in data sets, not in a visual that can be quickly understood and easily shared.

Combining information on health expenditure data and historical inflation information the graphic (see below) shows the annual change in spending for the three most talked about categories of health care, hospitals, physician services, and prescription drugs, as well as general inflation for the last 10 years.

If you live and breathe health policy, these visuals may be no surprise to you. State legislators, on the other hand, are asked to be experts in a mindboggling array of issues. They rely on their staff and the internet to understand these issues, but what if the internet doesn’t serve up the info they need?

M2 aims to be a reliable source of information on all things health policy, and we strive to make complicated information from a multitude of sources more concise and comprehensible. Hopefully, the slides we share prove useful to you. Let us know what you think!

Can Price Transparency in Health Care Really Lower Costs?

By M2|2019-08-21T14:53:39+00:00August 20th, 2019|Health care spending, Health Care Trends, Hospitals, Insurance, Out-of-pocket spending, Physician-patient communication, Providers, Reimbursement, Uncategorized|

Can Price Transparency in Health Care Really Lower Costs?

Telling patients what they will pay for their health care services is a key stepping stone to more efficient use of health care dollars. Consumers, employers, payers, and the system as a whole would likely benefit if the true cost to the patient were made available before a patient receives a health care service or product.

Several states already have laws on the books requiring health care providers to make at least some price information available on at least some procedures. Some states also run centralized databases where different payers report what they get paid for different services. Additionally, the federal government requires hospitals to post a list of standard charges on the internet.

The Trump Administration wants providers to further expand the price and quality information to consumers, and issued an Executive Order (EO) on Improving Price and Quality Transparency in American Healthcare to Put Patients First in late June. The order aims to help consumers make “well-informed decisions” and expand transparency efforts that provide information “which patients can research and compare before making informed choices based on price and quality.”

More specifically, the EO directs the U.S. Department of Health and Human Services (HHS) to require hospitals to publish negotiated rates in a searchable, consumer-friendly format for 300 “shoppable” services.

You Can Shop if You Want To

Consumers are being asked to make more of these decisions on their own, as we’ve described in previous posts. My home state of Colorado has a shopping tool like the one the EO has in mind. It took me less than a minute to get the result below from the Colorado Center for Improving Value in Health Care (CIVHC) for an MRI scan of a leg joint within 15 miles of my ZIP code:

Shop for Health Care Services – MRI Scan, Leg joint (CPT 73721)

Seems pretty obvious that while the closest option, seven miles away, is Centura Health St Anthony Hospital, they would charge me $510 for the scan. If I drive another five miles, I would only have to pay $150 at Denver Health Medical Center.

“Shoppable,” but Perhaps Not “Buyable”

According to the Health Care Cost Institute (HCCI), “For a health care service to be ‘shoppable’, it must be a common health care service that can be researched (“shopped”) in advance; multiple providers of that service must be available in a market (i.e., competition); and sufficient data about the prices and quality of services must be available.” HCCI estimates that approximately half of out-of-pocket spending is spent on “shoppable ambulatory doctor services.”

The problem is, you might be able to research and compare certain services with upgraded information, thus improving your shopping experience, but you might really struggle to buy the service that is lower in cost.

Using the example of lower-limb MRIs, a 2018 study titled Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans found that people typically drive by multiple lower-priced providers to get to their final treatment location. Why? Because that is where the patient’s referring provider sends them. The study shows “the influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients’ home ZIP code fixed effects.”

In particular, “physicians who are vertically integrated with hospitals are more likely to refer patients to hospitals for lower-limb MRI scans.” We’ve written previously about how costs vary dramatically by site of care. That also means patient cost-sharing varies. We are asked to pay more out-of-pocket for a service we could get elsewhere. But that would mean 1) shopping and 2) acting against the advice of a provider. Not impossible tasks, but difficult for sure.

Increased transparency means you can shop for services, but that is only half of the problem. Yes, it is important to have price and quality information. If the problem were a technical one, more information would lead to different decision making. But in fact, changing the way a consumer selects a health care service – even a “shoppable” service – is an adaptive problem. That is, it requires a change in the way people think, prioritize, and behave.

Additional information on quality and price is definitely necessary, but if I drive by two Centura Health facilities with lower cost MRIs to get to the HealthOne facility my referring provider recommended, I would also need some encouragement, at least, to go against my physician’s recommendation.

It looks like we health policy types have more work to do.

We Pay for What We Value. Guess What We Value in the U.S. Health Care System?

By M2|2019-02-04T17:27:13+00:00February 1st, 2019|Health care spending, Health Care Trends, Hospitals, Insurance, Providers, Uncategorized, What do we pay for and why|

We Pay for What We Value. Guess What We Value in the U.S. Health Care System?

People often ask what the difference is between the United States and other health care systems. Health Affairs recently published a helpful piece focused on comparing costs entitled “It’s Still The Prices, Stupid: Why The US Spends So Much On Health Care, And A Tribute To Uwe Reinhardt” by Gerard F. Anderson of Johns Hopkins Bloomberg School of Public Health, Peter Hussey, a VP at RAND Corporation in Boston, and Varduhi Petrosyan, a professor and dean in the Turpanjian School of Public Health, American University of Armenia, in Yerevan. The article is an update of a similar one they published back in 2003, along with Uwe E. Reinhardt, who was the James Madison Professor of Political Economy at the Woodrow Wilson School of Public and International Affairs, Princeton University, until his death in November 2017. The authors compare the health care costs, accessibility, spending growth rates, and other fees in OECD countries.

Notably, there is no concise chart in the article, showing the side-by-side of this information – so we made one! We also calculated a multiple, to see how much more (or less, but usually more) the U.S. spends compared to the median of the OECD countries.

In the chart below, we tried to focus on the main categories of health care costs – health insurance administrative costs, hospital care, physician salaries, nurse salaries and pharmaceutical spending. Interestingly, the information needed for a comparison across countries and categories was not always available in the Health Affairs article. This highlights a pretty big problem with health care data – researchers often say that it’s hard to compare inputs across countries because of their different systems and economies, so they just don’t. This means we don’t actually know for sure how these costs compare to each other.

You may notice the huge difference in per capita health insurance administrative costs. The fact that the U.S. spends almost 8 times as much as the median of OECD countries on health insurance administrative costs (and not actual health care) is rarely a focus of health system policy change, though it is well-known:

“The next-highest-spending country after the US (Switzerland) had administrative costs of only $280. In 2017 Steffie Woolhandler and David Himmelstein [Commonwealth Fund] estimated that the US would save about $617 billion (about 20% of its total health spending) if it moved to a single-payer system.”

We have written about standardizing a set of forms before. Maybe this is a good place to start addressing health care costs in the U.S.?

Another area of high cost in the U.S. compared to other countries is hospital and health care providers. According to the Health Affairs article, all of the inputs for hospital care – including “health care workers’ salaries, medical equipment, and pharmaceutical and other supplies – are much more expensive than in other countries.”

Why are health care provider costs higher in the U.S.? In part because the allocation of physicians in the U.S. is different from other OECD countries, and skews to more expensive care: the U.S. has the lowest percentage of general physicians relative to specialists of OECD countries.

Making changes seems as easy as the U.S. looking to a country that seems to have lower health care costs and “copying” what they do. But these researchers did this same analysis in 2003 based on 2000 data and now, nearly 20 years later, they found the relative rankings of the countries to be about the same for most indicators. Health care costs are different across countries because health care systems are different across countries. And of course, systems are different across countries because values are different.

Based on what the U.S. spends in different health care categories compared to other countries, we seem to really value health insurance administrative costs. Now we know.

Consumerism: “Activity in Search of Strategy”

By M2|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.

Avoidable ED visits – what does “avoidable” mean and what can we do about this issue?

By M2|2018-07-10T18:48:57+00:00July 9th, 2018|Evidence-Based Medicine, Hospitals, Uncategorized, What do we pay for and why|

Avoidable ED visits – what does “avoidable” mean and what can we do about this issue?

An employer group in Massachusetts is coming together to reduce avoidable emergency department (ED) visits, in large part because they claim ED visits are a key driver of health care costs in the Commonwealth. According to the coalition, “ED visits can be five times more expensive than primary care or urgent care visits.” Not only are ED visits expensive compared to other health care services, the coalition cites a Massachusetts Health Policy Commission estimate of $300-350 million in annual costs, in total, just for commercially insured people in Massachusetts.

While this seems laudable, it turns out there’s a big difference of opinion about the definition of “avoidable ED visit.” The coalition’s statement claims studies show more than 40% of ED visits are avoidable. Some of the most common conditions for avoidable ED visits, accordingly to this employer group, include acid reflux, allergies, back pain, bronchitis, sinusitis, stomach pain, and urinary tract infections. At first glance, these maladies don’t seem like they need to be treated in an emergent setting.

At issue is the definition of “avoidable.” According to the American College of Emergency Physicians (ACEP) only 3.3% of ED visits are avoidable. In a study based on data from the National Hospital Ambulatory Medical Care Survey (NHAMCS) for years 2005 to 2011, Renee Hsia, MD, MSc, of the Department of Emergency Medicine at the University of California, San Francisco, found many of the visits to EDs that are classified as “avoidable,” such as those listed above, also involve either mental health or dental issues.

Dr. Hsia argues, “This suggests a lack of access to health care rather than intentional inappropriate use is driving many of these ‘avoidable’ visits. These patients come to the ER because they need help and literally have no place else to go.”

So, are more than 40% of ED visits avoidable or is it less than 5%? This is a fairly big difference. In ACEP’s view, the entire concept of “avoidable ED visits” should be questioned. “Despite a relentless campaign by the insurance industry to mislead policymakers and the public into believing that many ER visits are avoidable, the facts say otherwise,” said Becky Parker, MD, FACEP, the president of the American College of Emergency Physicians (ACEP). “Most patients who are in the emergency department belong there and insurers should cover those visits. The myths about ‘unnecessary’ ER visits are just that – myths.”

It seems essential to know more about why people are going to the ED for health issues that don’t fall into the category of: I was taken to the ED in an ambulance because I was unconscious, or my friend drove me after I sliced off my finger…The Massachusetts Health Policy Commission has been gathering all sorts of data the past few years, and below is the chart they have published on avoidable ED use.

As the chart shows, nearly 70% of “avoidable ED visits” happen between 8am and 8pm. This is probably not the typical idea that people have in their minds about when “avoidable ED” visits occur. So based on Massachusetts data showing the majority of avoidable ED visits happening during daytime hours, it seems more likely that the ACEP point of view is correct: Maybe these visits really do indicate access to care problems more than patient choice – which possibly could be changed simply by improved education.

The Health Commission chart is accompanied by some analysis from the 2014 Massachusetts Health Insurance Survey. In the survey, of the respondents who had been to the ED in the past year, “over half said they had done so because they could not get a timely appointment with their usual source of care.” Ideas to address this lack of access include encouraging patients to seek care at retail clinics or urgent care centers, encouraging providers to expand office hours, making hotlines and telehealth more available, and “granting Nurse Practitioners full practice authority.”

Reducing unnecessary health care costs is a common goal across individuals, families, employers, and governments. The Massachusetts Employer-Led Coalition to Reduce Health Care Costs zeroes in on “avoidable ED visits,” listing a focus on four levers for impact:

Employee engagement
Data and measurement
Multi-sector collaboration
Policy advocacy

We often focus on what works, and it seems notable that the Commonwealth has a range of data showing expanding access to a broader range of providers (by changing scope of practice laws and reimbursing more convenient types of care) seems highly likely to reduce “avoidable ED visits.” As more specificity is put forth by the coalition, time will tell whether their policy solutions match the problem.

Proof Point: Addressing Social Determinants of Health Reduces ED and Hospital Visits, and Reduces Costs

By M2|2018-05-23T16:53:35+00:00May 23rd, 2018|Evidence-Based Medicine, Health Care Trends, Hospitals, Providers, Social Determinants of Health, Uncategorized, What do we pay for and why|

Proof Point: Addressing Social Determinants of Health Reduces ED and Hospital Visits, and Reduces Costs

Just a couple weeks ago, I about social determinants of health (SDH), so I was intrigued to come across this recent study in Health Affairs showing that improved access to care and a consideration of SDH can lower emergency room use and inpatient hospitalizations, and reduce costs.

A health clinic in Dallas, the Baylor Scott & White Health and Wellness Center (we’ve also highlighted before), partnered with the Dallas Parks and Recreation Department to create a primary care clinic in a rec center in an underserved Dallas community. The public-private partnership offers clinical services such as routine primary care, regardless of the person’s ability to pay. But it also offers access to other health-supporting interventions. For example, the partnership provides access to programs that help community members participate in physical activity and get healthy food.

Community health workers are also a component of the approach. Patients often need help navigating both the health care system and support programs, for example, free exercise classes at the rec center. Community health workers assist patients with that navigation in a culturally relevant way for the Dallas center. Local churches – more than 25 of them – provide an additional level of support by increasing awareness of the health clinic/rec center offerings and availability of community health workers.

The clinic “exemplifies the integration of social determinants of health within a population health strategy,” according to the study by David Wesson, President, Baylor Scott & White Health and Wellness Center, and his colleagues.

While increasing access to both clinical health care services and health-supporting programs, such as those offered by rec centers, is worthy goal on its own, to health policy wonks the added proof point of cost savings due to a population based approach that integrates SDH is just as exciting.

The study examined emergency department (ED) and inpatient care use for 12 months after initiation of the program. People who used the center’s services experienced a reduction in ED use of 21.4% and a reduction in inpatient care use of 36.7%, with an average cost decrease of 34.5% and 54.4%, respectively. All of these are notable proof points: “These data support the use of population health strategies to reduce the use of emergency services,” the authors conclude.

The Baylor Scott White/Dallas Recreation Center partnership is a great example of how improving access to health care and addressing the social determinants of health can have a positive impact on both health outcomes as well as costs, by reducing expensive types of care such as emergency and inpatient services. We are still building the evidence-base, but this study shows taking a holistic approach to patient care, including addressing the social determinants of health such as culture and language, can help achieve what everyone wants: improved health and lower costs.

Obesity: Survey Finds Primary Care Providers’ Knowledge “Inconsistent” with Evidence-Based Recommendations

By M2|2018-04-26T20:09:32+00:00April 26th, 2018|Evidence-Based Medicine, Hospitals, Providers, Uncategorized|

Obesity: Survey Finds Primary Care Providers’ Knowledge “Inconsistent” with Evidence-Based Recommendations

Despite the high prevalence of obesity in the US, a new study finds that providers’ knowledge of evidence-based recommendations for obesity is low.

For example, only 15% were able to identify the “appropriate indication” for prescribing pharmacotherapy for patients: a BMI over 27 with an obesity-associated comorbid condition. Two-thirds said it is appropriate to continue long-term pharmacotherapy under conditions inconsistent with evidence-based guidelines. Providers were “most knowledgeable” regarding the physical activity guidelines, with 49% answering correctly.

In addition, “only 16% of respondents indicated that obesity counseling should be provided approximately twice monthly in an individual or group setting for at least 6 months,” in accordance with U.S. Preventive Services Task Force and CMS guidelines, according to the study by Monique Turner, George Washington University, Milken Institute of Public Health, et al., and published in the journal Obesity. (Shout out to my colleague at GWU, Dr. Monique!)

Overall, providers’ understanding of clinical care for obesity, which includes intensive behavioral therapy, physical activity, and pharmacotherapy, is “inconsistent with evidence-based recommendations” the study found – despite the fact that most health care providers believe they are responsible for ensuring patients are informed about obesity treatments.

Given the current obesity epidemic and the known costs associated with obesity, it seems obvious that primary care physicians should make it a priority to be up-to-date with current treatments and approaches to weight loss and optimal health. This would also help them advocate for better coverage of interventions.

In an accompanying commentary, Robert Kushner, Northwestern University, Feinberg School of Medicine, appears to agree:

“Knowledge of the guidelines is a reasonable objective but is not sufficient to change practice behavior,” Kushner says. Nonadherence to practice guidelines “may be due to other factors independent of knowledge,” including fragmentation of care, disagreement between guidelines, and “external practice barriers.”

He cites the need for effective dissemination and implementation approaches for practice guidelines. He also points out that other educational initiatives are under way “that will impact the practice of obesity in the primary care setting,” for example, through the Obesity Medicine Education Collaborative (OMEC), which is “currently finalizing a set of 32 obesity-specific competencies” as part of undergraduate, postgraduate, and fellowship training. “By taking a continual and comprehensive educational approach, we are on our way to get primary care ready to treat obesity,” he concludes.

Obesity is a growing problem in the U.S. in terms of both health outcomes and costs; in fact, as I’ve about recently, it is also linked to declining mortality improvements in the US compared to other wealthy countries. Unfortunately, despite the availability of a range of non-surgical interventions supported by evidence-based practice guidelines, primary care providers generally are not appropriately trained in this area, nor do they keep pace with new treatment findings on how to address this problem. If we want to tackle the obesity problem and improve health outcomes, life expectancy and costs, we must find ways to address barriers of this kind, and our reimbursement policies will need to incentivize providers to focus on this issue.

It’s a Hospital, It’s a Health Plan, It’s Both!

By M2|2018-04-20T18:55:42+00:00April 20th, 2018|Health care spending, Health Plans, Hospitals, Insurance, Medicaid, Medicare, Uncategorized|

It’s a Hospital, It’s a Health Plan, It’s Both!

Tufts Health Plan (Watertown, MA) and hospital company Hartford HealthCare (Hartford, CT) have announced a joint venture to form an insurance company, which will focus on providing those over 65 who qualify for Medicare the alternative of purchasing a Medicare Advantage plan.

The “twist” with this joint venture is that it will bring together an insurer and a hospital firm in one company and “it’s a first for Connecticut.”

Like many of the new health care collaborations sprouting up, such as Aetna-CVS and Berkshire Hathaway, Amazon and JPMorgan, the name of the game right now is using data better to try to lower costs.

Hartford is looking to Tufts Health Plan to bring “insights around closing gaps in care, identifying members who have needs they may not even be aware of and better coordination of care,” James Cardon, Hartford’s chief integration officer, told the Hartford Courant. Tufts has 1.1 million members across New Hampshire, Massachusetts, and Rhode Island.

Collaborations between health plans and providers are not unknown; however, they are in “relative infancy, and many of the approaches don’t involve as extensive as a commitment that is implied and inherent in a joint venture,” according to Tufts CEO Thomas Croswell.

A key advantage of the joint venture is that it will combine clinical data from Hartford with claims data from Tufts Health Plan, giving the partners the ability to reach out to members. Inherent in these concepts is reaching patients before they have serious health care needs.

Hartford HealthCare CEO Elliot Joseph explained the joint venture was built specifically to address both organizations’ realization that there’s room for improvement in care for patients with chronic conditions, especially in helping seniors manage their care in order to avoid hospitalizations. If reducing costs is the goal, it makes sense that Tufts and Hartford HealthCare are focusing initially on seniors, given their high use of health care services; however, such a strategy is unlikely to work for other populations.

In another example of provider-insurer consolidation, Centene Corp., a Medicaid managed care insurer and the “dominant health plan on the Affordable Care Act exchanges,” plans to buy Florida-based primary-care provider Community Medical Group.

Community Medical will boost Centene’s scale and capabilities around care delivery, and Centene will gain access to the provider’s patient population.

Community Medical Group operates 13 medical centers and two specialty centers serving more than 70,000 Medicaid, Medicare Advantage, and Affordable Care Act exchange patients in Miami-Dade County, FL. As of the end of last year, Centene had 848,000 Florida plan members, and that number is expected to increase as it grows membership in the ACA exchange in Florida.

Centene also announced recently that it has agreed to buy MHM Services, a provider of health care and staffing services to correctional facilities and government agencies, serving 330,000 people.

This strategic approach is all about controlling where plan members receive care, similar to previous deals where an insurer buys a provider group. UnitedHealth Group’s Optum subsidiary bought DaVita’s medical group and acquired Surgical Care Affiliates last year. Humana also bought home healthcare provider Kindred Healthcare last year.

The health care system in the U.S. is changing rapidly. With less direction (or interference, depending on your point of view) from the federal government, health plans and provider groups are leading the way in creating new approaches for care delivery. Whether payers, including employers and consumers are better off, is yet to be seen.

Interoperability – all that’s old is new again

By M2|2018-03-08T16:02:41+00:00March 7th, 2018|EHRs, Health Care Trends, Health Information Technology, Hospitals, Uncategorized, What do we pay for and why|

Interoperability – all that’s old is new again

For some of us in health care policy, 2018 so far is the year of testing just how good our filing systems are. All that is old is new again and ideas to “fix the U.S. health care system” from years ago are popping back up. This week “interoperability” is the hot topic, in part because Seema Verma, Administrator of the Centers for Medicare & Medicaid Services (CMS), made a big announcement at the Healthcare Information and Management Systems Society (HIMSS) annual conference, saying interoperability would again be a focus of the federal government. She made three big announcements really, but today we are focused on Verma’s announcement that CMS will be overhauling the “Electronic Health Record (EHR) Incentive Programs to refocus the programs on interoperability and to reduce the time and cost required of providers to comply with the programs’ requirements.” Not surprisingly, when she mentioned the burdens on health providers of meeting meaningful use requirements and that CMS would be changing those requirements, the full ballroom broke into applause.

Patients Should Control Their Data. Yes, but…

The CMS administrator also announced a new initiative, “MyHealthEData – to empower patients by giving them control of their healthcare data, and allowing it to follow them through their healthcare journey.” It may seem obvious that patients should have electronic access to, and full control of, their health records, but the government does seem to need to intervene in order to get this information released from government agencies and payers, as well as from private health insurers and providers. Susan Morse (@SusanJMorse), who covered the HIMSS Conference for Healthcare IT News, explains that part of the issue is hospitals involved in data blocking. Verma told conference goers CMS would be strengthening requirements for providers to stop the practice: “It’s not acceptable to limit patient records or prevent them from seeing their complete history outside of (that) health system,” she said.

Data blocking may not be the primary barrier to patient control of their health care data, however. The March 2018 American Hospital Association Trendwatch: Sharing Health Information for Treatment shows hospitals and health systems have rapidly improved electronic sharing of clinical/summary care records over the past several years as the AHA Trendwatch chart below shows.

Can (Will?) Health Providers Use Patient Data?

Interoperability at its core means information can move back and forth between the various entities that have it. That could be from provider to provider, from plan to provider, provider to patient, etc. The fact sheet explaining the Trump Administration MyHealthEData Initiative Putting Patients at the Center of the U.S. Healthcare System mentions one of the goals of the effort is:

“Reducing Duplicative Testing – Provider systems typically do not share patients’ data, which can lead to duplicative tests when a patient goes to see a different provider. This increases costs and can lead to patient inconvenience or even harm. CMS is studying the extent and impact of duplicate testing, and will identify ways to reduce the incidence of unnecessary duplicate testing.”

In a study published in 2010, (all that’s old is new again…) in the Journal of the American Medical Informatics Association titled, “A Preliminary Look at Duplicate Testing Associated With Lack of Electronic Health Record Interoperability For Transferred Patients,” found approximately 20% of patients had non-clinically indicated duplicate testing resulting in added costs to the system. The study authors continued, “The most common setting for duplicate testing identified in the current study happened on admission from an outpatient clinic site. Patients from outpatient clinic transfer to hospital admission via several paths, including entrance via hospital admitting services or directly to the inpatient ward, either escorted or unescorted by hospital clinical staff.”

However, while hospitals and health systems have improved their sharing of clinical summaries with outside entities, the same AHA Trendwatch shows much slower progress in integrating information from outside sources. As the chart (from AHA Trendwatch) below shows, 65% of hospitals and health systems are either not able or not routinely able to integrate external information electronically.

Giving patients access to all of their health care data electronically is no doubt important. However, it is not sufficient to improve care or reduce costs, even for something as simple as avoiding non-clinically indicated duplicate testing. Achieving interoperability will also require payment incentives to change. As this blog has pointed out in other instances, money matters and you avoid what you have to pay for. Electronic health data vendors can still charge providers for building interfaces that help disparate systems “talk” and can charge providers to move data. Keith Aldinger, MD, an internist who practices in Houston, Texas wrote for Medical Economics in late 2017, physicians have “been assessed financial penalties for not attesting to meaningful use and yet the IT industry gets a pass.” His idea for improving interoperability is to put health IT vendors on the hook: “They should not be allowed to charge one cent for transferring information and any attempt to do so should elicit a financial penalty.”

All that’s old is new again. We still have to figure out how to get health care data moving in ways that improve health care for patients. Interoperability, you’re hot again. Let’s hope you do better this time around.

Both Patients and Hospitals Tend to Avoid Care that Costs More – One Health Plan in MA is Trying to Address This

By M2|2018-03-01T20:30:49+00:00March 1st, 2018|Evidence-Based Medicine, Health care spending, Health Plans, Hospitals, Insurance, Out-of-pocket spending, Uncategorized, What do we pay for and why|

Both Patients and Hospitals Tend to Avoid Care that Costs More – One Health Plan in MA is Trying to Address This

Despite evidence that cervical cancer is most effectively treated with brachytherapy (a form of radiation), Medicare reimbursement for a less effective treatment, external beam radiation, is higher, according to an article in Healthcare Finance News. Additionally, the delivery costs of brachytherapy in hospitals is greater than for external beam radiation.

The lower cost of delivery combined with higher Medicare reimbursement means external beam radiation is four times more profitable than brachytherapy for a hospital – despite being the less effective treatment.

The study by Kristine Bauer-Nilsen, University of Virginia School of Medicine, et al., published in Radiation Oncology, evaluated the delivery costs, using time-driven activity-based costing, and reimbursement for definitive radiation therapy for locally advanced cervical cancer.

Brachytherapy for locally advanced cervical cancer “ends up costing hospitals money because it takes 80-plus percent more physician personnel time to administer brachytherapy than it does to deliver the increasingly popular external beam radiation,” the article says. Even though it costs more for hospitals to provide brachytherapy than it does to provide external-beam radiation, the reimbursement doesn’t reflect the difference. Which in turn means, “the comparatively poor reimbursement rates may mean some hospitals simply don’t offer brachytherapy or commit physician time to it” as Jeff Lagasse, the author of the Healthcare Finance News piece succinctly concludes.

Businesses naturally do the things that pay them more. This study highlights how reimbursement has to change before health providers will change. “Value based care,” envisioned by policymakers mean the system as a whole only pays for health interventions that are valuable. But what is of value to the system is different than what is of value to a health care business, for example, a hospital or physician group.

Similarly, what a patient values, might be different from every other entity in the health care system. Just as financial incentives may drive hospitals’ choice of therapies, they also affect patients’ decision making when it comes to managing chronic conditions. Now, a health plan in Massachusetts is aiming to remove the financial incentives that lead patients to avoid needed care. In order to incentivize patients to “manage their conditions optimally and proactively,” Neighborhood Health Plan (NHP) is waiving out-of-pocket costs for chronic conditions.

The new comprehensive benefit design, called Care Complement, eliminates copays for 11 common prescription medications that treat conditions like high cholesterol, diabetes, high blood pressure, heart disease, and depression. The program also waives cost sharing associated with cardiac rehabilitation therapy and screenings to prevent diabetes complications, according to a recent AHIP (America’s Health Insurance Plans) blog.

“With certain chronic conditions, such as diabetes, there are often many recommended services to fully control the condition and reduce the risk of complications,” Dr. Anton Dodek, chief medical officer at NHP, says in the blog. “For diabetes, these recommendations include an annual routine eye exam, diabetic education, and nutritional counseling. Each of these office visits typically require a co-payment from the member, and can create a barrier to receiving care.”

The program also offers “affordable alternatives to opioids for chronic pain.” For example, it waives cost-sharing for medication-assisted therapies (MAT), as well as expenses for recovery coaches. And it gives physicians the resources needed to “help determine if their patients would benefit from alternative pain management treatments, such as physical therapy/occupational therapy sessions, chiropractic visits, and acupuncture visits.”

“By eliminating cost sharing, we hope that members will be encouraged to work with their doctors to manage their conditions optimally and proactively, which will result in healthier outcomes in the long run,” Dr. Dodek says.

Neighborhood Health Plan’s approach is exactly the kind of approach that we need more of; by adjusting financial incentives for patients to choose the most “valued” care for their chronic conditions, this plan is moving beyond looking at short-term costs, and instead is looking at the big picture. By helping patients with what they value – lower costs and higher quality – the health plan is likely to improve health outcomes in the long term.

Value based payment is harder than it looks. These examples shed light on what doesn’t work, and what does. Policymakers need to both copy success, and halt failure if they want to bend the cost curve.

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