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Opioid Epidemic and Drug Addiction Crisis Require Bold Action, but Also a Huge Amount of Money

By M2|2019-07-12T17:35:29+00:00August 9th, 2017|Health care spending, Uncategorized|

Opioid Epidemic and Drug Addiction Crisis Require Bold Action, but Also a Huge Amount of Money

On March 29, 2017, President Donald J. Trump signed an Executive Order establishing the President’s Commission on Combating Drug Addiction and the Opioid Crisis. The Commission is led by New Jersey Governor Chris Christie (R), and will issue a final report with its findings and recommendations by October 1, 2017.

The commission issued an interim report July 31, 2017, and many news headlines focused on either what the commission called “the first and most urgent recommendation,” which was to urge the President to declare a national emergency (which U.S. Health and Human Services Secretary Dr. Tom Price told reporters on August 8, 2017, the President has no plans to do immediately), or, some of the more alarming facts about drug addiction, for example:

“Only 10 percent of the nearly 21 million citizens with a substance use disorder (SUD) receive any type of specialty treatment.”
“With approximately 142 Americans dying every day, America is enduring a death toll equal to September 11th every three weeks. (Emphasis in original).

In addition to some key findings, the interim report included areas for further consideration (to be included in the final report) and nine key recommendations, summarized as follows:

Declare a national emergency.
Rapidly increase treatment capacity.
Mandate prescriber education initiatives.
Immediately establish and fund a federal incentive to enhance access to Medication Assisted Treatment (MAT).
Improve access to naloxone.
Prioritize funding and manpower to quickly develop fentanyl detection sensors.
Enhance interstate data sharing among state-based prescription drug monitoring programs (PDMPs).
Ensure that information about SUDs be made available to medical professionals.
Enforce the Mental Health Parity and Addiction Equity Act (MHPAEA).

The 10-page report includes a broad range of ideas, as it should, considering the process the commission used:

“In addition to conducting phone calls with Governors and their teams in all 50 states, we also held a listening session with bi-partisan members of Congress, and key cabinet members of your Administration. Individual Commission members have organized “listening sessions” and solicited recommendations from treatment providers, addiction psychiatrists and other physicians, data analysts, professional medical and treatment societies, medical educators, healthcare organizations, pharmacoepidemiologists, and insurance providers. Outreach also has been made to scientists with broad expertise in pain, addiction biology and treatment.”

“The first public meeting of the Commission was held on June 16th at the White House, and was a great success. The Commission members heard comprehensive public testimony by nine leading nonprofits, and have received more than 8,000 comments from the public, including comments from at least 50 organizations.”

It makes sense the commission was able to access so many voices of experience. There are lots of experts out there, and lots of previous recommendations, including one of the most recent, the 413-page Surgeon General’s Report on Alcohol, Drugs, and Health, Facing Addiction In America, published in 2016 under the Obama administration.

Show Me the Money

Ideas aren’t really the problem though. The real sticking point is money. How much money is needed to address what is likely a national emergency?

The Obama administration, the Trump administration, and our current Congress have all proposed some numbers.

The Obama administration’s President’s FY 2017 Budget included more than $1 billion over two years just for “expanding access to treatment for prescription drug abuse and heroin use.”

President Trump’s first budget, for FY 2018, proposed nearly $30 billion for drug control efforts, including for treatment and prevention efforts.

In the middle of negotiating Obamacare repeal and replace this summer, the Senate made changes to the Better Care Reconciliation Act that went from providing $2 billion to $45 billion over 10 years for substance abuse treatment and recovery.

And yet another estimate for caring for those who are already addicted was pegged at $183 billion over 10 years by Dr. Richard G. Frank, a Professor of Health Economics in at Harvard Medical School.

Addressing the opioid epidemic and drug addiction crisis can’t be about the politics of the Obama budget versus the Trump budget, or President Trump’s commission versus former President Obama’s Surgeon General’s Report on Alcohol, Drugs, and Health, Facing Addiction In America.

“If this scourge has not found you or your family yet, without bold action by everyone, it soon will,” exhorts the interim report.

We have plenty of ideas. We know what we need to do in order to save lives. But what we need to do won’t come cheap. The sooner we get to that conversation, the sooner we will be able to act boldly.

How Health Care is Delivered is Seeing Innovation, Too

By M2|2017-10-08T11:31:22+00:00August 4th, 2017|Uncategorized|

How Health Care is Delivered is Seeing Innovation, Too

In a previous blog we covered a few examples of how health care innovation is hurtling forward as evidenced by investments and operational commitments by health care companies, despite the current policy uncertainty in Washington, D.C. While the news may be filled with Obamacare headlines, Charles Gaba at acasignups.net reminds us, only about 3% of people in the U.S. are on ACA Exchange policies.

Outside of those Exchange offerings, health plans and provider groups across the U.S. are coming up with new ways to deliver health care to patients, and to manage costs and disease more effectively. At the root of the innovation is data.

This summer, Sutter Health, a health care system in northern California, and Aetna, one of the largest health insurers in the U.S., announced a joint venture to create a new jointly owned health plan. The new health plan will offer products to commercial self-insured customers by the middle of 2018 and fully insured PPO products in 2019. While the offerings may not seem that innovative, the approach is. A co-owned joint venture allows Sutter and Aetna to share data more effectively in the hopes of using analytics and predictive modeling to identify at-risk patients sooner. Deeper data integration could also enable population health approaches that will help patients with chronic conditions better manage their health and health care.

Also innovating outside of the ACA Exchanges are large insurer Cigna and pharmacy provider, CVS Health. A new collaboration called Cigna Health Works is now being offered to Cigna’s self-funded employer-sponsored health plans. The new offering allows these Cigna members to receive certain preventive and acute care services at CVS MinuteClinics, the pharmacy chain’s retail health clinics, at a discounted price. Additionally, customers can receive free wellness coaching and discounted over-the-counter medications.

“Cigna data show that roughly 45 percent of their customers’ Urgent Care facility visits could have been conducted at retail health care clinics, potentially reducing their health care costs by 81 percent per visit.”

Additonally, Cigna is aiming to assist those patients who do not use primary care physicians. Cigna Health Works helps patients access preventive services, for example, diabetes screening, at a low cost and convenient time at CVS MinuteClinics. Michele Paige, Vice President and General Manager of Cigna Onsite Health explains, “This new model is based on how the customer wants to consume health care — it’s about creating value and a new way for health care consumers to get more from their health plan, by ensuring that we are there for them at the places they prefer to go for convenient care.”

Early this year we published a book chapter titled, “Essential Characteristics of Service Business Model Innovation in Healthcare: A Case-Study Approach”. These examples of new health care service business models are precisely the effect we were noting. “Now, and increasingly in the future, a healthcare organization must be concerned about the quality of care a patient receives from other providers in accountable care organizations or other parts of the integrated network. Innovation that leads to improved performance requires focusing on the role of cooperation and trust in changing both processes and resources required to deliver value to customers.”

These new collaborative efforts are focused on delivering value to customers and to patients – even if it means cooperating in different ways. Sharing data, using predictive modeling, harnessing sophisticated analytics are the foundational elements of changing the way health care is delivered in the U.S. Companies are surging ahead with innovations and creative problem-solving that will help patients and payers alike, despite on-going debates about the future of health care in DC.

Health Care Innovation is Hurtling Forward, Despite Policy Uncertainty

By M2|2017-10-08T11:32:37+00:00July 21st, 2017|Health Care Trends, Health Information Technology, Health Reform, Uncategorized|

Health Care Innovation is Hurtling Forward, Despite Policy Uncertainty

Yes, Washington, D.C. has been tied in knots for months over the future of Obamacare. Or more specifically, how and whether the federal government should pay for health insurance for certain consumers. In the meantime, health care innovation is hurtling forward as evidenced by investments and operational commitments by health care companies.

Digital Health Investments

StartUp Health’s 2017 Global Digital Health Funding Mid-Year Report compiles seed, venture, corporate venture, and private equity funding for the period January 1 through June 30, 2017 and shows 2017 investing in digital health “has already surpassed previous years in overall funding.” The second quarter of 2017 was the biggest ever, and that single quarter accounted for more money invested than total annual funding for 2010 and 2011 combined. In the first half of 2017, more than 300 digital health deals were inked, worth more than $6 billion.

CHART: Digital Health Funding 2010-2017 (YTD) from StartUp Health

Many of the digital health funding supports innovative ways of delivering health care.

For example, CareDox is a company focused on helping public school health programs be more efficient. More than 50 million students are served by school health care clinics in the U.S., making it one of the largest medical networks in the country. Innovating this front line of health care for kids could improve both the health care children receive and the coordination of care between schools, medical professionals, and parents.

One of the largest investments has been for GRAIL, a big data/analytics company that has received nearly $1 billion since its inception. GRAIL was started by Jeff Huber, who may not be a household name to health policy wonks, but I can guarantee you use something he’s built. Jeff was a senior engineering leader at Google who spearheaded the harnessing of massive data sets to create Google Ads, Apps, and Maps. After those projects, but just before starting GRAIL, he was working on big data at Google Life Sciences as part of Google X (aka The Moonshot Factory). Jeff’s vision is to combine “science, technology, and clinical studies to reveal cancer at its beginnings. To detect cancer early, when it can be cured.”

Being a glass half-full type of person, I get very excited to read about all the new health care ideas out there being turned into businesses. I’m just covering a few in this blog, but if you want to see a more detailed list, mobihealthnews covered the 81 digital health funding deals for Q2 2017.

Health Insurer Innovation

Several health insurers also announced innovative approaches recently (which we will cover more in upcoming blogs) indicating to me, that while big health policy issues are still up in the air, businesses need to keep providing services and coming up with new products to maintain current customers and win over new ones.

An innovative example of a company combining digital health innovation with health insurance is Bright Health. A Minneapolis-based health insurance company launched in 2016 by former UnitedHealthcare CEO, Bob Sheehy and two partners, Bright Health will be selling plans in the individual market in 2018 in select geographies, including Colorado. The company just landed $160 million in venture capital based on this thinking from one of their investors:

“We’re thrilled to continue our partnership with Bright Health to disrupt a complicated industry where consumers are demanding change and leading health systems are hungry to deliver.”

The innovation Bright Health is offering is the selection of a sole health system as a deep partner in a state, and to use apps and other tech tools to attract consumers. In Colorado, Bright Health has chosen to partner with Centura Health to deliver care to its members. While health policy types might bemoan this type of “ultra-narrow” network, time will tell if consumers prefer to trade less choice for lower premiums.

Watching big picture policy debates, it’s easy to forget that investors and companies across the U.S. are coming up with all kinds of new ways to serve health care customers. The dust will eventually settle (I think!) on whether 2017 is the year to change Obamacare, but in the meantime innovation is hurtling forward which is much better way to see what the future of health care looks like in the U.S.

The Future of Medicaid – Implications for Patients and Action for Advocates

By M2|2017-10-08T11:36:02+00:00July 13th, 2017|Health Reform, Medicaid, Uncategorized|

The Future of Medicaid – Implications for Patients and Action for Advocates

I had the privilege of talking with nearly 100 patient advocates recently about the Medicaid proposals under consideration in the House and Senate bills aiming to “repeal and replace” Obamacare. As part of a webinar series hosted by the Patient Advocacy Leaders Summit (PALS), a national initiative convened by The AIDS Institute, I presented ideas for ways patient advocates could continue to work on behalf of themselves and their members to communicate with elected officials and policymakers about the importance of Medicaid to their access to health care.

PALS introduced the webinar as follows:

“As Congress and the Administration continue to move toward efforts to repeal and replace The Affordable Care Act, Medicaid has emerged as one of THE major points of contention, with its future being widely debated. Revamping Medicaid would affect access to health care and services for millions, who represent some of the most vulnerable populations.

Both the House bill, The American Health Care Act (passed May 4), and the Senate Republican’s proposal, The Better Care Reconciliation Act of 2017 (released June 22), aim to reduce federal health care spending and cap Medicaid while shifting greater responsibility to the states. Both plans will cause millions of Americans to go without coverage and struggle with health care bills.

Our speakers will share their perspectives and insights regarding the future of Medicaid, implications for patients and what you as an advocate can do to make a difference as Medicaid, and our entire health care system, is being transformed.”

Alongside co-presenters, Candace DeMatteis, the Policy Director of Partnership to Fight Chronic Disease (PFCD) and Matt Salo, the Executive Director of the National Association of Medicaid Directors (NAMD), we underscored three central themes:

Real people, with serious health care needs, will lose access to care;
People who rely on Medicaid are people you know or encounter in your daily life; and
Familiarity with Medicaid, through real-life stories, helps everyone understand how the program provides health care to those who need it most.

Real people will lose access to health care

Of the people who will be directly affected by the proposed reforms, many have serious health care needs. As we have explained in previous blogs, health care costs in the U.S. are highly concentrated. In 2012, the top 1% of spenders accounted for 22.7% of all U.S. health care expenditures, the top 5% of spenders accounted for 50% of expenditures, and the bottom 50% of spenders accounted for less than 3% of expenditures.

Medicaid has similarly concentrated health care costs. For example, as DeMatteis explained, people eligible for both Medicare and Medicaid (the “duals”), are 13% of Medicaid enrollees, but account for about 35% of program costs.

People who rely on Medicaid are people you know

Most people either know someone on Medicaid or have a frequent encounter with someone who relies on the program. Families USA created infographics providing examples of the types of people we all interact with who might benefit from the Medicaid expansion. Below is a portion of their infographic for Florida which clearly shows retail sales clerks, fast food workers, hotel desk clerks, library assistants and taxi drivers as just a few of the types of working adults whose income is low enough for them to qualify for Medicaid.

Familiarity with Medicaid and real-life stories are key

Salo, even with all of his deep expertise in the details of Medicaid, reminded patient advocates, and all of us what matters when talking about Medicaid. “You need to put a face on it,” he explained. In order to be effective advocates for patients as enormous Medicaid changes are being considered, it is essential to make this about real people, with real health care stories (sometimes horror stories!).

DeMatteis reminded the group of the “power of the anecdote,” to counter myths and false narratives, especially around who benefits from Obamacare.

My tips for advocates were similarly focused. To change people’s minds and to write better policy, we need to always keep in mind that this is about real people, first and foremost, with real health care needs. We built this system because a patient needed actual health care services. Let’s make sure that in our efforts to get rid of what isn’t working in Obamacare, we don’t throw the patient out with the repeal bathwater.

In Health Reform, Whose Costs Are We Talking About Anyway?

By M2|2017-10-08T11:38:04+00:00July 7th, 2017|Health care spending, Health Reform, Uncategorized|

In Health Reform, Whose Costs Are We Talking About Anyway?

Just in time for July 4^th weekend, the numbers were out. The Congressional Budget Office (CBO) estimates that if the Better Care Reconciliation Act were to become law, approximately 22 million people will lose health insurance coverage by 2026, (15 million will lose Medicaid and 7 million will lose nongroup coverage). Federal Medicaid spending would go down by $772 billion and spending to provide tax credits to help certain people buy health insurance (along with some other coverage provisions) would decrease by $408 billion (see chart below from the CBO).

Numerous articles have been written providing additional detail and commentary on what the bill’s changes would do to the costs of premiums in the Exchanges, and individual and small group market, as well as the effects on people with Medicaid, so that is not the focus of this piece.

Instead, we’d like to point out a little mentioned aspect of one change envisioned, which is the push from Medicaid to private insurance and what that would do to health care costs.

On Fox News Sunday, June 25, 2017, Dr. Tom Price, Secretary of the U.S. Department of Health and Human Services (HHS) explained to Brit Hume:

“So, what the Senate bill does is say, every single individual between zero between — up to 350 percent of the poverty level ought to be able to have some type of tax credit that will allow them to purchase the kind of coverage that they want. And it’s a tax credit, or refundable tax credit, or advanceable, so that nobody will fall through the cracks, nobody will have the rug pulled out from under them. We want a seamless transition for those that are moving from either Medicaid to the individual market or Medicaid to the employer-sponsored market, so that individuals are able to maintain the kind of coverage that they want for themselves.”

It makes sense that the Republicans are proposing such a solution. As Avik Roy wrote recently in an op-ed for The Washington Post, “For decades, free-market health-reform advocates have argued that the single best idea for improving U.S. health care is to maximize the number of Americans who can afford to buy health insurance for themselves, instead of having to depend on the government or their employer.”

He continues, “The Senate bill repeals Obamacare’s Medicaid expansion — an expansion that has trapped more than 12 million people in a program that researchers have shown has health outcomes no better than being uninsured. In its stead, the Senate bill offers low-income Americans robust tax credits to buy affordable private health insurance, just as those formerly enrolled in Obamacare’s exchanges will be able to.”

It is probably no coincidence that Dr. Tom Price, now Secretary of HHS, is helping design a system that encourages patients to move away from government insurance – especially since government programs pay physicians and other providers so much less than commercial payers.

Two recent studies from the Congressional Budget Office (CBO) highlighted the cost differential between Medicare and commercial payers for both physician services and hospitals. For physician services, CBO concluded what many of us in health policy know, but may be surprising to some:

“Commercial prices are (sometimes substantially) higher than Medicare fee-for-service (FFS)
Medicare Advantage prices are very close to Medicare fee-for-service (FFS)
Commercial prices vary substantially across areas and within areas; Medicare Advantage prices co-vary with Medicare fee-for-service (FFS)”

Here is another chart from the CBO for those of you who are so inclined:

For inpatient hospitals, the CBO conclusion was similar:

“The average commercial payment rate for a hospital admission in 2013 was about $21,400.
The average Medicare FFS rate for the same set of stays (in the same hospitals) was about $11,400.
On average, commercial rates were 89 percent higher than Medicare FFS rates.”

The reason this matters is because Medicaid rates are even lower than Medicare rates, often purposely so. Kaiser Family Foundation, based on data compiled by the Urban Institute, publishes The Medicaid-to-Medicare Fee Index which “measures each state’s physician fees relative to Medicare fees.” In 2014, the national average for all fee-for-service physician services was 0.66; for primary care physician services it was 0.59. In other words, on average, a physician gets paid by Medicaid 66% of what he or she gets paid by Medicare for the same service.

For some services, the Medicare and commercial rates are similar, for example, preventive and primary care visits (99213, 99214, and 99203 in the chart above). For other services, commercial rates paid to physicians are more like 200% of the Medicare rate, for example, breast biopsies (19081 in chart above).

Simply put, a service that earns a physician a reimbursement of $100 in Medicare, earns her or him only $59 in Medicaid. If that service is similarly reimbursed in a commercial plan, the physician earns about 70% more if the patient has commercial insurance instead of Medicaid.

For services that aren’t primary care, the differential is bigger. The physician who is reimbursed $66 in Medicaid, receives $100 in Medicare, but $200 in a commercial plan – so treating a patient with commercial insurance instead of Medicaid earns the physician three times as much in reimbursement.

Ensuring that “individuals are able to maintain the kind of coverage that they want for themselves” and making sure people aren’t dependent on government may be reasonable policy goals.

But let’s be more honest about whether this plan will actually mean we spend less on health care in the U.S.

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

By M2|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 M2|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 M2|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 M2|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 M2|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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