cost of care

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.

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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.

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While Most Consumers Want to Discuss Costs Before Receiving Treatment, Most Providers Do Not Bring Up Financing Options with Patients

By M2|2018-01-24T21:41:19+00:00January 24th, 2018|Health care spending, Health Care Trends, Insurance, Out-of-pocket spending, Physician-patient communication, Uncategorized|

While Most Consumers Want to Discuss Costs Before Receiving Treatment, Most Providers Do Not Bring Up Financing Options with Patients

Seventy-seven percent of health care consumers say it’s “important” or “very important” to know their costs before treatment; however, most providers are not satisfying these demands, according to a recent article in Healthcare Finance.

Only 18% of health care consumers said that “any of their providers had spoken to them, at any time, about patient financing options in the past two years.” The article summarizes the results of a survey conducted by ORC International and commissioned by patient financing company HealthFirst Financial.

The survey highlights consumers’ interest in financing options for health care services: 53% of the 1,011 U.S. adults surveyed would like to discuss financing options before they receive care, and 57% consider it important or very important that their provider offer ways to extend payments over time with no interest.

However, only 8% received zero- or low-interest financing from a provider. “These findings highlight a huge gap in what patients want and what hospitals, medical groups and other healthcare providers are delivering,” KaLynn Gates, HealthFirst Financial president and corporate counsel, says in the article. “Providers that care for the financial as well as clinical needs of their communities are much more likely to thrive in this era of rising out-of-pockets costs and growing competition for patients among traditional and non-traditional providers.”

Furthermore, “a full 40% of millennials 18 to 36 years old said they’d be very likely or likely to switch providers if a competitor offered low- or zero- interest financing for medical bills.” And among survey participants overall, 29% “said they’d move to different providers that offer attractive payment programs.”

Concerns about covering the cost of care exist in all income brackets; 42% are very concerned or concerned about their ability to pay out-of-pocket medical bills in the next two years, and the number increases to 54% for those with incomes of less than $35,000 a year. Among those with incomes of $100,000 or more annually, the number drops, but still, 24% in this bracket are very concerned or concerned.

Consumers are worried about their ability to pay for unexpected medical expenses; 53% of those surveyed expressed concern about the ability to pay a medical bill of less than $1,000; 35% worry about the ability to pay a bill of less than $500, and 16% are concerned about the ability to pay a bill of less than $250.

The survey was commissioned in order to “learn more about how consumers are coping with their medical expenses,” Gates says in the article. “Without providing and communicating these viable financing options, they are likely to delay care or switch providers to find financial help. In either case, providers will be hurt by those choices, and they need to develop a strategy to meet these consumers’ needs.”

Despite these findings, however, another survey, published recently in Health Affairs, finds that while most U.S. consumers support price shopping for health care services, most do not actually seek out information on pricing.

The findings also come at a time when states are taking various measures to improve price transparency for consumers. For example, Ohio has enacted a law aimed at informing patients what health care procedures will cost prior to receiving care. However, the law is currently in limbo, after criticism from hospital and physician groups, who claim the law would slow down access to care.

This HealthFirst survey reinforces what we’ve said in the past and what other studies have shown; for example, we blogged earlier this year about a study published in Health Affairs showing that physicians are missing opportunities for communication to help reduce patient costs. We’ve also written about employers sending patients to high-quality, bargain-priced providers; sometimes these providers are out of town, or out of state, yet employers are still able to save money with this approach, which points to inefficiencies in the health care system.

Clearly consumers need price options, and talking with physicians beforehand about costs would help inform patient decision-making. However, it’s noteworthy that this new survey emphasizes consumers’ desire for financing options; thus, consumers appear to be seeking to base their costs decisions not on actual total costs of services, but on monthly payment options. They are therefore not necessarily taking a savvy approach to overall costs.

One area of cost concern that the survey did not cover, but which is coming up soon for most patients, is the annual deductible that most health plan enrollees must meet. Each year, consumers must consider the re-setting of the deductible on January 1, and factor that into health care choices. This is a particular concern for patients with chronic illness, and it points all the more to the need for consumers to know their costs upfront, before services are provided.

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Insurer Bargaining Power: Markets With High Insurer Concentration and High Provider Concentration Show Decreased Hospital, Physician Fees – Health Affairs Study

By M2|2017-12-14T02:47:07+00:00December 13th, 2017|Health care spending, Hospitals, Insurance, Out-of-pocket spending, Uncategorized|

**Insurer Bargaining Power: Markets With High Insurer Concentration and High Provider Concentration Show Decreased Hospital, Physician Fees – Health Affairs Study**

In a recently published study in Health Affairs, the authors set out to determine whether insurers had the bargaining power to reduce prices for hospital admissions and physician visits (among five types of physicians).

The results confirm what the authors, had anticipated – that insurer bargaining power is strongest in markets with both high provider concentration and high insurer concentration.

The authors found that in markets where both insurers and providers were highly concentrated, insurers were able to reduce hospital admissions prices by 5%, and were able to reduce physician visit prices as well – e.g., cardiologist, radiologist and hematologist/oncologist visit prices were reduced by 4%, 7%, and 19%, respectively.

However, the study did not find evidence of insurer bargaining power on prices of visits to primary care physicians or orthopedists. This lack of effect is “likely because prices for those specialties are not far out of line, so it’s very hard for payers to negotiate from a price that is not far out of competitive range,” according to comments made by study one of the study’s authors, Richard Scheffler, University of California, Berkeley, in a Medscape Medical News article (Scheffler co-authored the study with fellow UC-Berkeley health economist Daniel Arnold).

Conversely, the authors found that insurer bargaining power in markets with low provider concentration was not significant, because providers in those markets are already near the competitive level, thus leaving very little room for downward negotiation of prices.

The study examined the association between provider and insurer market concentration and provider prices, calculated from the Health Care Cost Institute’s medical claims database, from 2010 to 2014. Measures of market concentration were computed using the Herfindahl-Hirschman Index (HHI), a common measure of market competitiveness used in the Horizontal Merger Guidelines of the Department of Justice (DOJ) and Federal Trade Commission (FTC).

The authors note the rapid pace of consolidation of hospitals; from 1998 to 2015, there were over 1,400 hospital mergers in the U.S., 40% of which occurred between 2010 and 2015. Similarly, physician markets are also becoming concentrated “at an accelerated pace, with primary care physicians making the move from smaller to larger group practices faster than specialists.”

“The increased consolidation of provider (hospital and physician) markets and health insurance markets has garnered significant attention and led to calls for policy action to maintain and enhance the competitiveness of health care markets,” they note.

“Our results…suggest that insurers can bargain the prices down in highly concentrated provider markets,” the authors conclude.

However, “what is missing is a market mechanism that will pass these reduced prices on to consumers in the form of lower insurance premiums,” the authors note.

“Given the extreme concentration of the health insurer market, it is hard to imagine that many markets will be contestable and that competition will work to reduce premiums. Significant premium increases and the profits of the health insurance industry in recent years suggest that little if any of the benefits of insurer bargaining power are being passed along to consumers,” Scheffler and Arnold say. Nonetheless, “in the ACA Marketplaces, there is evidence that active-purchaser states are able to keep premiums down and stabilize their markets,” they note.

Overall, aside from insurers in some of the Affordable Care Act exchanges, insurers “are making a huge amount of money,” Scheffler says in the Medscape article. With market concentration, “medicine doesn’t improve, the quality doesn’t get any better, consumers don’t benefit, but the insurance companies’ stock prices go up.”

Thus, “it would seem to be only a matter of time before further intervention in and regulation of the health insurance market by state and federal legislatures, as well as private market innovation will accelerate.”

In the Medscape article, Scheffler proposes three potential avenues for change: First, the Federal Trade Commission should get more involved in investigating the pricing practices of highly concentrated markets. Second, states should more aggressively regulate premiums that insurance companies charge and ensure that savings are passed on to consumers. Third, large companies could bypass insurers and self-insure.

Hoping for increased competition in the insurance market is unlikely to be a fruitful option here, in light of increasing consolidation; as the authors rightly point out, other measures will be needed in order to bring relief to consumers. In particular, states should follow the lead of those that have moved to more aggressively regulate insurance premiums and ensure that savings resulting from increased bargaining power are passed on to consumers. Sky-high premiums continue to burden consumers; it’s time to hold insurers’ feet to the fire and make sure consumers aren’t the only ones still paying inflated prices.

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Employers sending patients to top-performing providers with bargain prices for routine surgeries

By M2|2017-11-01T19:11:22+00:00October 31st, 2017|Health care spending, Hospitals, Uncategorized, What do we pay for and why|

Employers sending patients to top-performing providers with bargain prices for routine surgeries

In the face of high hospital bills, lack of local competition, and wild variations in surgical costs among different providers, some employers are responding by steering patients toward high-quality, bargain-priced providers. While this is happening primarily among some large private employers, a “handful” of public employers are also taking these steps, according to a recent article in Kaiser Health News.

Employers are striking deals for bundled payments for routine surgeries, with one fixed price covering tests, physician fees, and hospital charges; in some cases, the best-quality, lowest-cost provider is out of town. In addition, the providers are on the hook financially if any complications arise, the article notes.

Cost is not the only factor; the company also makes its choices based on quality, including data on complications and readmissions. “Not all surgeons are equal,” Carrum CEO Sachin Jain says in the article.

As an example, the article notes that Santa Barbara County is among about 400 employers on the west coast working with Carrum Health, a company that negotiates the bundled prices.

While the Santa Barbara County bundled payment program is voluntary for covered employees, the county has saved “nearly 50 percent on four surgery cases” since starting its program last year, the article says.

The article profiles one patient who received an all-expenses-paid trip to a luxury resort, over a thousand dollars in spending money, and a personal concierge during her stay in San Diego. The county provides further incentives to covered employees to participate in the program by waiving copays and deductibles.

However, “it was money well spent,” the article notes. Sending the patient 250 miles away for knee replacement surgery saved Santa Barbara County $30,000.

“If that doesn’t speak to the inefficiencies in our health care system, I don’t know what does,” Andreas Pyper, assistant director of human resources for Santa Barbara County, says in the piece. “It’s almost like buying a Toyota Corolla for $50,000 and then going to San Diego to buy the same Corolla for $16,000. How long would the more expensive Toyota dealership last?”

Some companies have gone so far as to send patients overseas for cheaper care, but most employers favor a more regional approach, according to the article. Local physicians are still relied upon for follow-up care.

For some hospitals, the advantages of offering deep discounts include that “they get patients they otherwise would never see and are paid in full right after the patient is discharged, avoiding the onerous billing and collections process,” the article says.

Some hospitals also have the financial capacity to offer such sharply reduced prices; “most hospitals significantly mark up their commercial rates for orthopedic procedures and cardiac surgeries to compensate for lower government reimbursements,” Michael Bark, assistant vice president of payer relations at Scripps Health, an integrated health system, says.

This is another great example of how it is possible to drive lower-cost, higher-quality care. We need more leaders, whether payers or employers, to take these kinds of steps to reimburse for increased value in health care services. As I’ve said in previous blogs such as , we get what we pay for; the more we direct our reimbursement dollars toward high-value care, the more we’ll get. The interesting thing in this case is that it’s employers who are demanding high value; with 50% of Americans receiving their insurance through their employers, if employers start demanding this type of approach, we might see change.

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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.

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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.

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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.

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Despite Americans’ Support for Avoiding Low-Value Health Care, One-Third Have Difficulty Understanding Benefits of Conservative Approaches; Few Favor Doctors Who Avoid Unnecessary Care

By M2|2017-10-09T01:52:43+00:00May 10th, 2017|Evidence-Based Medicine, Uncategorized|

Despite Americans’ Support for Avoiding Low-Value Health Care, One-Third Have Difficulty Understanding Benefits of Conservative Approaches; Few Favor Doctors Who Avoid Unnecessary Care

“Low-value care” is defined as expensive procedures and tests with questionable therapeutic value; examples include unnecessary screenings and antibiotics.

As much as 30% of U.S. health care spending may be unnecessary. However, one-third of Americans “have difficulty envisioning benefits from avoiding low-value care,” according to a study published in The Milbank Quarterly. This figure increases to one-half for minorities and those who are less educated.

“The public’s awareness of low-value care is incomplete, with substantial disparities related to race, ethnicity, and socioeconomic status,” the study finds. “Media messaging can help fill these gaps but, in the short run, would be enhanced by fine-tuning how low-value care is characterized. In the longer run, building robust public support for reducing low-value care may require refocusing attention away from specific tests and treatments and toward the relational benefits for patients if clinicians spent less time on testing and more time on personalized care.”

The research, conducted by Mark Schlesinger, Yale School of Public Health, and Rachel Grob, University of Wisconsin-Madison, involved a range of methods, including focus groups, intensive interviews with patients and a national survey.

Less time on low-value care means more time on personal care, right? Not so fast…

Specifically, the respondents anticipated two distinct changes: they “expected that spending less time ordering and reading tests would allow clinicians more time to talk with their patients” and that “taking a more mindful, less routinized approach to testing would encourage discussion of the benefits and limitations of each approach and greater acknowledgment of clinical uncertainty,” the authors note.

“Most Americans who anticipate benefits hope that less testing and treatment will be replaced by more interactive and personalized care. Even without media priming, many Americans would avoid common forms of low-value care like unnecessary antibiotics or excess imaging for lower back pain,” the authors say. However, “few favor clinicians who avoid these practices.”

For example, “many patients now seek specific tests or procedures or insist on quick interventions because they feel the pressure of work and home responsibilities. Clinicians find such requests difficult to refuse, even when they recognize that acquiescing will have little clinical benefit.”

These findings demonstrate that even though we are wasting nearly one-third of our health care dollars, people still are not sure they want to actively not choose “low-value care.”

Interestingly, we have seen this dynamic before (see our recent blog on “Breast Cancer: Less is More, Says Surgical Chief”); it is difficult to convince physicians and patients both that less is more.

What can we do to address this disconnect? Educating the public is a good place to start, as the authors recommend.

“To debunk the opinion that ‘more is better’ when it comes to health care, the study suggests that public education is vital to reducing spending, with an emphasis on the great risks and limited rewards of low-value procedures,” as the Association of Schools & Programs of Public Health (ASPPH) says.

But how we message this matters, the study authors emphasize: In order to maximize public education efforts on low-value care, the messages, and resulting media coverage, “must be adapted to resonate as strongly as possible with the public’s values, perceptions, and preferences about medical care,” they say.

We need to start explaining what low-value care even means. “What is needed is a message campaign that has the capacity to reach, and mobilize, the majority of Americans who currently see no advantage in reducing low-value care, particularly the third of the population that has little current understanding of what that concept even means or why it matters.”

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Breast Cancer: Less is More Says Surgical Chief

By M2|2017-10-09T01:55:31+00:00April 18th, 2017|Uncategorized|

Breast Cancer: Less is More Says Surgical Chief

When it comes to breast cancer surgery, sometimes “less is more,” Memorial Sloan Kettering (MSK) Breast Surgical Service Chief Dr. Monica Morrow says.

As simple as it sounds, it proves be quite difficult for health care providers, as well as patients, to accept that evidence-based medicine recommends less surgery, not more, for women with breast cancer, Dr. Morrow said in a video for Breast Cancer Awareness Month released by MSK via Twitter.
Memorial Sloan Kettering Cancer Center has “the largest experience in the world with [an] approach in over 700 women,” she said. “We have now shown that if a woman is having a lumpectomy and radiation and has cancer in only one or two sentinel nodes, we don’t need to take out the rest of the lymph nodes.”

“We have found that we’ve saved 84% of them from having their lymph nodes removed, which is something that has really eased the burden of their treatment.” This kind of clinical innovation, however, is not readily adopted in practice. Why not?

“The idea that less is more is one that has been very difficult for both physicians and patients to accept, because somehow it seems like if you have something bad like cancer, a bigger operation must be a better operation that cures more cancer,” she said. However, “clinical trials over the years have shown us that that is really not the case.”

This is partly because of “multidisciplinary treatment, meaning we now treat breast cancer not just with surgery the way we did a hundred years ago, but with surgery, and radiation, and drug therapy.”

“So the benefits of the radiation and the drug therapy allow us to do a smaller surgery, like a lumpectomy, and still get the same survival as a mastectomy,” she noted.

This raises an obvious question: if breast cancer treatment relies more on drug therapy than surgery, how should we value the drug used for that treatment? Most of us are not surprised to hear surgery costs $100,000 or $200,000, or more. But what of a cancer treatment in the form of a drug administered by a physician? How much should that treatment cost? How much of that treatment should be covered by insurance?

The move toward a “less is more” approach to breast cancer surgery may also have positive implications for drug costs for breast cancer patients in that the value of those medications will be more apparent.

When real-world evidence tells a story, will we listen? Informing patients, providers, and insurers as to the best use of their health care dollars, for example, ensuring drug therapy is covered as robustly as surgery, would be a good start.

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