Medicaid

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.

Health Care Expenditures and You. Know Your Numbers.

By M2|2018-02-16T16:58:12+00:00February 15th, 2018|Health care spending, Health Care Trends, Medicaid, Uncategorized|

Health Care Expenditures and You.

Know Your Numbers.

As a Valentine’s Day gift to health policy types, the economists in the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published the National Health Expenditure Projections for 2017–26 and Health Affairs published an insightful analysis, as well. The storyline has been pretty consistent for the past few years and looking forward to 2026, several trends are intact:

The U.S. population is aging, which is pushing health cost trends higher.
Medicare spending is growing faster than private spending as Baby Boomers age out of private insurance plans through their employers and into Medicare.
A “higher share of aged and disabled enrollees” continues to contribute to faster growth in Medicaid spending.

The topline is that health spending growth, provided there are no significant policy changes, is expected to increase around 5 to 6 percent per year from 2017-2026. If this is estimate is correct, by 2026 health care will account for nearly 20 percent of the U.S. economy, compared to 17.9 percent in 2016. Digging deeper into the estimates reveals some items that may not have crossed your radar yet:

The rate of 5.5 percent per year from 2017-2016 is much less than the 7.3 percent average increase per year the U.S. experienced from 1990-2007.
Prices for medical goods and services saw historically low growth rates of just 1.1 percent per year between 2014 and 2016, and will average 2.5 percent per year in 2017–26.
The projected price increases for medical goods and services at 2.5 percent is much lower than the 3.3 percent average annual growth rate in 1990–2007.

These low price increases might seem surprising if you rely on general news reports, but it is really just a matter of thinking about which numbers are being reported, by whom, and about which group of people. For example, earlier this month, Express Scripts, a pharmaceutical benefits manager with more than 34 million members, published their annual Drug Trend Cost Report announcing a Record-Low Increase in Rx Spending in 2017. “Commercial plans saw the lowest increase in drug spending in 24 years – just 1.5%, compared with 3.8% in 2016,” explained the report. In Medicare, “total per-person spending increased 2.3%, with diabetes leading all classes.” In Medicaid, “total per-person spending increased 3.7%, with HIV leading all classes.” For the health insurance exchanges, “total per-person spending decreased 3.3%.” These numbers are just about drug spending.

If you look at yet another set of data, you get yet another picture. The Health Care Cost Institute (HCCI) 2016 Health Care Cost and Utilization Report explained, “Total spending per person is now growing at faster rates than prior years, with 4.6% growth in 2016.” The HCCI report is based on claims in employer-sponsored insurance sponsored by Aetna, Humana, Kaiser Permanente, and United Healthcare for 39 million members. The report produces a “per-person health care spending estimate” that only includes the amount the insurance companies paid and the cost-sharing amount the patients paid for those services. It does not include the premiums that consumers or employers paid, however.

The HCCI report agrees with the Express Scripts report, however, by noting, “In 2016, increased spending on outpatient services was the biggest contributor to the annual growth in total spending. This is a change from prior years. In 2014 and 2015, prescription drug spending was the biggest contributor to total spending growth.”

You can see that different reports, written for different audiences and looking at different cuts of the data, reflect different truths – and all are based in fact.

One Thing is For Sure, Patients Aren’t the Problem

The State Of Health Care Today: How Physicians, Consumers, and Employers View Health Care Costs, Outcomes, and Reform Efforts, a survey of more than 600 physicians, 500 employers, and 5,000 consumers published in January 2018 by Leavitt Partners, explains these dueling data sets fairly well, though my guess is that was not their intention. The report explains, “In general, physicians, employers, and consumers agree that the health care system requires change; however, they disagree on what changes are needed, who is responsible for making changes, and which reform efforts hold the most promise.” This makes sense because most people’s experience and understanding of health care is personal. It’s about my health care provider, my insurance coverage, my health care costs.

As this chart from the Leavitt report shows, when asked who or what is responsible for the problems with the U.S. health care system, patients mostly blame the government, physicians primarily blame insurance companies, and employers blame both government and insurance companies nearly equally. Patients seem to have escaped blame, however, at least for the more than 7,000 people in the Leavitt survey. Keep that in mind the next time you see a news report about health care expenditures and a recommended policy change. Know your numbers. It might change your policy life!

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.