hospital costs

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.

Balance Billing: California Latest State to Protect Patients Against Surprise Bills From Out-of-Network Providers

By M2|2017-10-08T11:21:23+00:00September 19th, 2017|Hospitals, Insurance, Uncategorized|

Balance Billing: California Latest State to Protect Patients Against Surprise Bills From Out-of-Network Providers

As of this summer, California is joining other states that have consumer protection laws prohibiting balance billing. Balance billing – also known as surprise medical bills – refers to the practice of billing patients for out-of-network providers even when the care was given in an in-network facility.

“Here’s a common scenario: A patient takes pains to ensure her hospital and surgeon are in-network, only to get billed by the out-of-network anesthesiologist who appears at her bedside to put her under,” according to a recent article by Kaiser Health News published in Healthcare Finance.

“This situation could arise in an emergency when the patient has no ability to select the emergency room, treating physicians, or ambulance providers,” the Kaiser Family Foundation says. “Surprise medical bills might also arise when a patient receives planned care from an in-network provider (often, a hospital or ambulatory care facility), but other treating providers brought in to participate in the patient’s care are not in the same network.”

“These can include anesthesiologists, radiologists, pathologists, surgical assistants, and others. In some cases, entire departments within an in-network facility may be operated by subcontractors who don’t participate in the same network,” the foundation notes.

A total of 21 states now have laws protecting consumers against balance billing. A brief by The Commonwealth Fund classify the laws as partial or comprehensive protections (see map below). Six states are considered to have a comprehensive approach: California, Connecticut, Florida, Illinois, Maryland, and New York. Fifteen states’ approaches are considered “limited”: Colorado, Delaware, Indian, Iowa, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, North Carolina, Pennsylvania, Rhode Island, Texas, Vermont, and West Virginia. The comprehensive approach includes some sort of provider prohibition on the practice.

California’s new law covers residents who have private health insurance plans that are regulated by the state Department of Managed Health Care (DMHC) and the state Department of Insurance, which includes about 70% of the state’s private insurance market, the California Health Care Foundation says.

However, it does not cover the roughly 5.7 million people whose employer-sponsored insurance plans are regulated by the U.S. Department of Labor.

Balance billing is a great example of what is still wrong with health care despite the repeal and replace rhetoric. It affects actual patients and families, not theoretical interests. For patients undergoing major medical procedures, such as surgery, it is often extremely difficult or impossible to gain a complete and accurate picture ahead of time as to what the cost will be to the patient. California’s new law and others like it are a move in the right direction to protect patients.