PwC’s Health Research Institute Gives Us Five

By Clive Riddle, March 20, 2015

Many institutions are pausing to write and reflect on the ACA at this five-year anniversary mark, underneath the pall of the SCOTUS’ King vs. Burwell shadow. PwC’s Health Research Institute has just weighed in with a nice 22-page report : Healthcare reform: Five trends to watch as the Affordable Care Act turns five.

The report lays five key trends on us that they contend the ACA has fueled after five years:

1. Risk Shift: Raising the stakes for all healthcare players. The ACA added force to new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions.
   
2. Primary care: Back to basics. Experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point.
   
3. New entrants: Innovators in the New Health Economy. New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era. More than 90 new companies have been created since 2010, according to HRI analysis.
   
4. Health insurance: From wholesale to retail. Rapid enrollment in the ACA's public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges.
   
5. States: Reform's pivotal stage. States have emerged as key players in the reconfigured healthcare landscape, as the ACA gave states notable discretion in how the law could be implemented.
   

Ceci Connolly, managing director of PwC's Health Research Institute, tells us "the five trends have led to the creation of more than 90 new companies that have entered the sector since 2010. The ACA has opened gates for savvy investors and start-ups to take a piece of the $2.9 trillion industry."

And if that isn’t enough, they give us these five takeaways on what stakeholder should consider going forward:

1. Revisiting strategies to emphasize saving over spending and quality over quantity, to serve more consumers effectively and demonstrate affordability.
   
2. Watching closely as the reimbursement pendulum swings from fee-for-service to accountable care.
   
3. Innovating to meet the demands of the new healthcare consumer.
   
4. Pursuing opportunities to enhance consumer choice and engagement in selecting health benefits.
   
5. Working with states as they continue to shape the future landscape.
   

Prescription Costs Returning to the Wild

By Clive Riddle, March 13, 2015

Numerous studies have been warning that prescription cost increases, domesticated and docile for some time now, have returned to the wild - resurging and rearing their unpleasant head.

During last fall, Evaluate published a new 18-page report , "Budget-busters: The Shift to High-Priced Innovator Drugs in the USA." that addresses the growth of high-end prescription drugs. Evaluate tells us that "the median price of the Top 100 drugs has skyrocketed from $1,260 in 2010 to $9,400 in 2014, representing a seven-fold increase," and that "the average patient population size served by a Top 100 drug in 2014 was 146,000 down from 690,000 in 2010. The number of treatments costing in excess of $100,000 per patient per year rose to seven in 2014 versus four in 2010."

When Segal released their 2015 Segal Health Plan Cost Trend Survey, they stated “Health benefit plan cost trend rates for 2015 are forecast to drop slightly for some coverage, but to increase substantially for prescription drug coverage...…The increase in the cost of prescription drug carve-out coverage for actives and retirees under age 65 is expected to jump to nearly 9 percent. Prescription drug trend for retirees age 65 and older is expected to rise to 7.5 percent, more than twice the rate of retiree medical cost trends. The projected specialty drug/biotech trend rate for 2015 is an exceptionally high 19.4 percent.”

A number of other studies cite similar concerns, and this week Express Scripts weighed in with their annual Drug Trend Report. They state “new hepatitis C therapies with high price tags and the exploitation of loopholes for compounded medications drove a 13.1 percent increase in U.S. drug spending in 2014 – a rate not seen in more than a decade.”

Here’s some key selections from Express Scripts findings:

“Hepatitis C and compounded medications are responsible for more than half of the increase in overall spending. Excluding those two therapy classes, 2014 drug trend (the year-over-year increase in per capita drug spending) was 6.4 percent.”

“Specialty medications – biologic and other high cost treatments for complex conditions, such as multiple sclerosis and cancer – accounted for more than 31 percent of total drug spending in 2014. As Express Scripts forecasted last year, specialty drug trend more than doubled in 2014, to 30.9 percent. Hepatitis C medications accounted for 45 percent of the total increase in specialty spend despite having the second lowest prescription volume among the top 10 specialty conditions. Medicare plans – required to follow Medicare Part D formulary guidelines – were the hardest hit, as their annual specialty drug spend increased 45.9 percent.”

“Spending on traditional classes of medications continues to rise as a result of compounded drugs, which emerged in the top 10 traditional therapy classes for the first time. Despite having the least number of prescriptions among the top 10 classes, compounded medications accounted for 35 percent of the increase in spending, the most of any traditional therapy class of drugs.”

“Drugmaker consolidation and drug shortages also led to increases in traditional drug trend, which rose to 6.4 percent in 2014. Diabetes remains the leading traditional therapy class for a fourth straight year based on total costs; Express Scripts expects double-digit increases in spend in this class over the next three years due to once-weekly oral and injectable drugs in the pipeline.  Cost for medications to treat pain increased 15.7 percent in 2014, due in part to new tamper-resistant formulations for opiates.”

Medical Identity Theft Impact on Health Care

By Claire Thayer, March 12, 2015

According to findings from The Fifth Annual Study on Medical Identity Theft, published by the Medical Identity Fraud Alliance, the number of patients affected by medical identity theft increased nearly 22 percent in the last year, an increase of close to half a million since 2013. Many of us by now have heard about the massive Anthem breach, affecting up to 80 million people and considered to be the largest security breach involving a major health organization. Anthem notes that "the information accessed may have included names, dates of birth, Social Security numbers, health care ID numbers, home addresses, email addresses, employment information, including income data."  However, while, yes, the breach at Anthem was massive, they’re far from alone! 

Since 2009, 109 health-plan related security breaches have been reported to the Department of Health & Human Services Office for Civil Rights.  Breaches affecting 500 or more individuals is public information and accessible directly via the aptly named Breach Portal, where you can search by covered entity, state, type of entity (i.e., health plan, healthcare provider, etc), individuals affected, breach submission date, type of breach (theft, hacking/IT, improper disposal, etc., location of breached information).

MCOL's infoGraphoid this week highlights health plan related security breaches since 2009 and how patients found out that their medical identity was exposed:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Medicare Obesity Counseling – it’s Free!

By Claire Thayer, March 5, 2015

The Center for Disease Control and Prevention shows alarming obesity trend rates among the elderly population within the United States.  Thirty-six percent of men aged 65-74 are considered obese, along with slightly over 44% of women in this same age bracket, as highlighted on the CDC’s FastStats for Older Persons’ Health web page:

These findings continue to trend upward from the data previously available from the National Center for Health Statistics that found more than one-third of older adults aged 65 and over were obese in 2007–2010. 

Consider that over the next thirty years, the number of U.S. older adults is expected to more than double, rising from 40.2 million to 88.5 million. Primary care providers are critically important in helping to reverse these trends. The Kaiser Family Foundation reminds us in an article published this week, Few Seniors Benefiting From Medicare Obesity Counseling, that the Affordable Care Act included a new Medicare benefit offering face-to-face weight-loss counseling in primary care doctors’ offices. Doctors are paid to provide the service, which is free to obese patients, with no co-pay.  Surprisingly, as reported in USA Today, a mere 1% of Medicare's 50 million beneficiaries have used the free counseling benefit.

2015 – Another Year of Uncertainty?

By Cathy Eddy, Health Plan Alliance, February 25, 2015

This year on March 23, we will mark the 5th anniversary of the passage of the Affordable Care Act. Typically, you would expect that most of the unknowns that go along with a new law would have been worked out by now. Yet as we look ahead, we have several key elements that may change. There are also other drivers that are challenging our health plans.

Here are some of the uncertainties still ahead:

• We now have a Republican Congress with the Senate flipping in the 2014 election. This will allow for legislative changes to ACA to make it to President Obama’s desk, but veto power will block most of these without some Democratic support. Some areas, such as eliminating the device tax and redefining the 30 hour “full time” work week to 40 hours, have bi-partisan support. 
• The Supreme Court has agreed to hear arguments in March about the subsidies on the public exchanges in states where the federal exchange, healthcare.gov, is in place. The wording in ACA indicates that subsidies will only be given if there is a state-run exchange and that would impact about 2/3 of the states using the federal exchange. Their decision is due by June. 
• The health plans on the public exchanges had to set rates for 2015 with little experience about those members in these programs. It will become clearer as this year progresses just what the MLR is for this line of business. By the time open enrollment starts for the public exchanges in 2016, we’ll find out if premiums go significantly higher or stay at current levels. The impact of the 3 Rs on the plans will also become clearer. Standards for being a QHP remain unclear. Introduction of compliance requirements such as consumer satisfaction measurements will be tested in 2015. Technology bugs still abound with data flowing between plans and CMS.
• Individual mandates are in place with increasing penalties for not having insurance coverage, but the implementation of the employer mandate is still uncertain. 
• A new type of insurance company – the state Co-ops – were created by ACA with federal loans. Not all states were able to offer this model. In 2015, some of the established Co-ops are expanding to new states. Others are offering coverage through off-exchange products in the commercial space. Some are struggling to maintain the necessary level of capital.  The future of the Co-op model still has a level of uncertainty. 
• Providers have been embracing the concept of “value based reimbursement,” and the movement away from fee-for-service, but the implementation of this strategy has been much slower than first expected. 
• The trend for the past couple of years has been for providers to become payers and for payers to move more into the provider space. Many members of the Health Plan Alliance have been approached to work with health systems that don’t have their own health plans. Will this trend continue or will providers find that entering the insurance space and taking on more risk is outside of their comfort zone?
• Will 2015 be the year that ICD-10 is finally implemented or will there be another delay? 
• Many states are looking at their Medicaid expenditures and trying to find ways to control increases. Some states have made major changes to their programs and are implementing the changes. Dual eligibles are being moved into managed care programs. Will more states take the federal dollars for Medicaid expansion? 
• Plans that are in the Medicare Advantage line of business continue to be challenged by risk adjustment, STAR ratings and reimbursement levels, as well as multiple audits. As plans expand these programs they continue to deal with uncertainty.

Well, at least 2015 won’t  be boring!

How the Mighty Haven't Fallen

By Kim Bellard, February 17, 2015

I recently read an article that speculated on how even the mighty Google could fade into irrelevance faster than we might think.  It made me wonder why that kind of change doesn't seem to happen in health care.

The Google article, by Farhad Manjoo in The Wall Street Journal, cited one-time technology leaders like Wang and DEC, and pointed out that other long-time powerhouses such as Hewlett Packard and even Microsoft are furiously trying to reestablish themselves after decades of (relative) decline.  

Then there's health care.

Just out of curiosity, I looked at share of spending by type of service in the National Health Expenditures, from 1960 to 2013.  Here's what I found:

For all our many clinical and technological advances, the same three health sectors that dominated health care spending in 1960 still command virtually the same shares in 2013 -- over 60% of our overall spending.  They've "lost" less than 2% of share to other types of spending during those decades.  

It hasn't all been smooth sailing, of course.  Hospital spending reached almost 40% in the early 1980s, dipped below 30% in the early 21st century, and rebounded this decade.  The physician share has been steadier -- a peak of around 22% in the early 2000's, a low of 18.3% in 1978, but mostly stayed around 20%.  Prescription drugs spending, on the other hand, got to as low as 4.5% in 1981-82, reached a peak of 10.4% in 2006, and now seems to be on a slow decline.  But, all in all, the composition of Big 3 of the medical-industrial complex remains unchanged over a very long time.

It's as if the Big 3 U.S. auto manufacturers still maintained their 1960 dominance today, or the 3 TV broadcast networks still had their pre-cable/Internet share of viewers.  Both trios still have hefty market shares, still play key roles, but are nowhere near their historical dominance. New competitors emerged to give consumers more options, and took away significant shares of those markets.  

Unlike what has happened in health care.  

Hospitals, physicians, pharmaceuticals, and the health care industry generally have certainly evolved significantly in the past 50+ years, but it is more incremental evolution than the kind of "punctured equilibrium" Steve Jay Gould and others posit that result in rapid changes that overthrow species.  

I don't have anything against hospitals, doctors, or prescription drugs, at least not in principle.  It just doesn't feel like progress that we're not coming up with radically new care and delivery options that don't rely on them.  

Unlike most markets, health care isn't really driven by consumer demand.  A couple years ago, JAMA published a survey of physicians, in which  they blamed rising costs on pretty much everyone else but themselves, more than half even blaming patients.  A new study has cast doubt on the view that patient demand is driving unnecessary spending.   The saddest thing for me from the study was that only 8.7% of patient encounters included a patient demand.  We're a long, long way from informed patients taking responsibility for their own care, or their own health.

Having control over what constitutes the "practice of medicine" is certainly an effective way of forestalling new kinds of competitors.  That control has been placed in the hands of the providers practicing care, ostensibly to safeguard patients' interests,. but it's getting harder and harder to believe those interests are primary.  It seems more like protecting turf.  

A couple months ago I wrote a post that raised the question of whether, in a world where microbiome treatments, gene therapy, even nanobots may emerge as prevailing types of treatment, we'll even need physicians, at least in the same way we do now.  I received a number of comments that were aghast at the notion that we might not always need physicians to deliver our care.  I believe it is this kind of thinking that has allowed the Big 3 of health care to retain their dominance.  

If we can't even imagine a health care system that doesn't solely rely on the traditional sources of care, we'll certainly never achieve one.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Are the Health Coverage and Tax Credit Details for Filing 1040s Really That Complex?

By Clive Riddle, February 12, 2015

Much attention has been given this tax season to the new intricacies involved with filing health coverage and related tax credit information for individual 1040s. H&R Block and many other tax services have taken the opportunity to nationally advertise their expertise to support tax filers this season.

So the question begs, how complex are they? This month’s issue of Health Insurance Marketplace News tackles that issue in their February Thought Leaders Corner, asking the question: “ Are the tax credit and related health coverage filing details required for individual 1040s really that complex, and do you feel there is adequate IRS guidance?”

Here’s what some Health Insurance Marketplace News panelists had to say:

“If 2014 premiums based on 2012 incomes prove to be different from actual 2014 incomes and the government seeks to claw back what proved to be excessive subsidies and compensate for too-low subsidies, it will prove to be very complex in practice and generate much paperwork and frustration. Also, if people were covered for only part of the year, the filing will be complex. Better if the subsidies were fixed dollar amounts not subject to retroactive adjustment.” Alain C. Enthoven PhD, Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford University, Stanford CA

“My initial response to the tax filing requirements in a Health Affairs blog was to express a concern that the filing requirements for the individual responsibility penalty and for premium tax credit reconciliation were very demanding and would probably require most tax filers who were affected by either issue to use the help of tax preparers. Since then, the IRS and CMS have taken a number of steps to help taxpayers -- allowing taxpayers in states that did not expand Medicaid with incomes not exceeding 138% of the poverty level to claim an exemption on their taxes, offering calculators at Healthcare.gov that will allow tax filers to determine the premiums of the lowest-cost Bronze plan and second-lowest-cost Silver plan that would have been available to them and offering free tax filing software to most tax filers. It is still not going to be easy, but this should be manageable for most tax filers.”  Timothy S. Jost Esq., Robert L. Willett Family Professorship of Law, Washington and Lee University School of Law, Lexington VA

“Tax filing details are often complex. Adding anything associated with the ACA won’t make it any easier. If filers receive ACA-related IRS guidance primarily through written documents versus from a knowledgeable professional or through another more ‘modern’ approach to communication and education, it may be a real challenge for many to fully understand and timely and properly complete the required information. This could be seen as an outstanding opportunity for the various parties close to the ACA that have observed so much about the importance of consumer-level communication and education to work together to assist the IRS in its endeavor. There are some useful resources available, but accessing and understanding those resources may continue to be a challenge that must be continuously addressed to ensure consumers are knowledgeable about, and compliant with, the law.”   Simeon Schindelman, CEO, Bloom Health, Minneapolis, MN

“Yes, most consumers will find it very confusing and yes, there is sufficient IRS guidance. Consumers will fall into two broad categories; either they received a tax credit for 2014 tax year or did not.

(1) Did not receive tax credit:  Form 1040EZ. Easiest to file with some restrictions (e.g., claim no dependents and do not want to claim any advance payments of the premium tax credit); and (2) Received and will claim advance payments of the premium tax credit:   Form 1040A. Has some restrictions (e.g., do not itemize deductions, claim standard deductions and taxable income or $100K or less);  Form 1040. Filed for taxable income of greater than $100K (e.g., can itemize deductions);      Form 8962 for premium tax credit, irs.gov/pub/irs-pdf/f8962.pdf; the 1095-A is required when filling out Form 8962 to claim premium tax credits. If consumers had private health insurance or had self-insured employer coverage or coverage through a government program (e.g., Medicaid or Medicare) they may receive a 1095-B. If consumers had health insurance through a large employer that had an employer-sponsored plan, they may receive a 1095-C. However, 1095-B and 1095-C are optional for 2014 tax year, which means it's unlikely most folks will receive one. Unfortunately, if consumers didn’t have or maintain coverage, they will have to get an exemption or make a payment with their federal income tax return.”  Peter B. Nichol, Director, IT/Head of IT , Access Health CT , Hartford, CT

Predictable savings when health plan members are engaged in preventative care

By Claire Thayer, February 12, 2015

There are many approaches to patient care intervention, in terms of managing chronic disease. Several years ago an important study, that is still widely referenced, finds that some of the most successful patient care intervention approaches include those that are customized for each individual patient, allow for intensive time commitment in terms of time multi-disciplinary teams spent face-to-face with patient, and use of technology that is highly interactive with patients.  These approaches to engaging patients in preventative care, along with the payoff in financial savings and health outcomes is the focus of MCOL's infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here

Analysis of Managed Care Organization CEO Turnover Rates

By Clive Riddle, February 6, 2015

MCOL has just conducted an analysis of managed care organization CEO turnover during the past ten years, and found the turnover rates to be surprisingly high, given the importance of management stability and continuity for most organizations. One-fourth of managed care organization CEOs turned over during the past year,  one-third turned over during the past two years, one-half turned over during the past three years, two-thirds during the past five years and only one in seven remain from ten years ago.

That doesn’t mean that all turnover is attributed to firings or resignations.  More than half of the organizations analyzed are part of chain or system in which upward mobility within the organization is often the cause.

The analysis is based upon data from MCOL’s HealthQuest Publishers National Managed Care Leadership Directory, which lists health plans, provider networks, administrative organizations, PBMs, and specialty benefit organizations involved with managed care. The 2015 Directory was recently released. HealthQuest Publishershas released the annual directory since 1994. MCOL acquired HealthQuest Publishers in 2000.

Managed Care Organization CEO Turnover Percentage Compared to 2015 Incumbent

While 926 organizations are listed in the 2015 directory, only organizations also listed in applicable prior years were included in the analysis. Organizations are added or dropped in the directory over time based upon mergers & acquisitions, closures, consolidations and expansions.

The turnover rate percentage for each year, compared to the 2015 incumbent, for the MCOs that were also listed in each applicable year are indicated below. The number of applicable MCOs that are still listed in 2015 of course drops over time due to the factors listed above.

Year	CEO Turnover	Applicable MCOs
2014	25%	741
2013	36%	709
2012	52%	704
2011	61%	658
2010	68%	633
2005	86%	416

While the cause of turnover was not measured in the analysis, and upward mobility or other transfers within the same organization is undoubtedly a significant factor, disruption at the CEO level presents significant challenges for managed care organizations during this disruptive era of healthcare reform, regardless of the reasons for the change.

The Value of Maternity Management in Mitigating Legal Risk

By Claire Thayer, February 4, 2015

Almost 85% of women in the U.S. receive maternity services when giving birth. According to a report presented by Childbirth Connection, "Maternity Care and Liability: Pressing Problems, Substantive Solutions," childbirth is the nation's leading reason for hospitalization and most expensive hospital condition. It is also estimated that 19 of 3,000 hospital births result in an adverse outcome. The importance of maternity management in mitigating legal risk is the focus of MCOL's infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Ranking the Seahawk’s Seattle vs. the Patriot’s Boston in the Health Care Bowl

By Clive Riddle, January 30, 2015

Given that the contest between the Seattle Seahawks  vs. the New England Patriots in Super Bowl XLIX is a product of listing and ranking NFL teams (by wins and losses), perhaps some irrelevant insights into the outcome of that contest can be gleaned by comparing how the two cities rank in various healthcare lists.

Of course the immediate challenge is to assign a city to the Patriots. Foxboro- the site of their stadium? The entire New England region and all metro areas within? We’ll deflate their claim to a multi-state region, and go with just Boston.

Looking to healthsprocket, the site for healthcare lists, we find these eight lists posted during the past year, which include mention of Seattle or Boston.  The result is basically a tie, based on mentions – unless you deflate the Patriot’s claim to Springfield and Worcester, in which case Seattle might prevail in a sqeaker.

There is a list claiming overall healthcare rankings – that puts Boston at #2 with Seattle whiffing:

Ranking Of The Best Healthcare Cities In The U.S. (Source: iVantage Health Analytics)

1. Washington, DC
2. Boston
3. Minneapolis
4. Portland, OR
5. Chicago
6. Charlotte
7. Philadelphia
8. Atlanta
9. New York
10. St. Louis

On the other hand, Boston makes the Most Expense Healthcare Cities list (#9), unlike Seattle:

10 Most Expensive Cities for Healthcare (Source: Castlight Health)

1. Sacramento, CA
2. San Francisco, CA
3. Dallas, TX
4. St. Louis, MO
5. Kansas City, MO
6. Charlotte, NC
7. Denver, CO
8. Miami, FL
9. Boston, MA
10. Portland, OR

Seattle makes this list of lowest cost bronze plans (at #18) in 2014 public exchanges, unlike Boston

2014 Lowest Cost Bronze Plan After Subsidies by Largest City in Each State For A Single 25 Year Old (Source: Kaiser Family Foundation)

1. Los Angeles, CA - $140
2. Denver, CO - $142
3. Hartford, CT - $117
4. Washington, DC - $124
5. Indianapolis, IN - $157
6. Baltimore, MD - $115
7. Portland, ME - $146
8. Billings, MT - $152
9. Omaha, NE - $135
10. Albuquerque, NM - $122
11. New York City, NY - $111
12. Cleveland, OH - $136
13. Portland, OR - $130
14. Providence, RI - $127
15. Sioux Falls, SD - $173
16. 16.Richmond, VA - $127
17. 17.Burlington, VT - $116
18. 18.Seattle, WA - $138

Seattle is also the place to be if you don’t like waiting for your doctor – ranked at #1, with Boston not mentioned

Top 10 Cities With The Shortest Average Wait Times To See The Doctor (Source: Vitals)

1. Seattle, WA- 16 minutes, 15 seconds
2. Milwaukee, WI- 16 minutes, 17 seconds
3. Denver, CO- 16 minutes, 25 seconds
4. Minneapolis, MN- 16 minutes, 42 seconds
5. Portland, OR- 17 minutes, 05 seconds
6. Omaha, NE- 17 minutes, 23 seconds
7. Charlotte, NC- 17 minutes, 26 seconds
8. Austin, TX- 17 minutes, 32 seconds
9. San Diego, CA- 17 minutes, 43 seconds
10. Raleigh, NC- 17 minutes, 48 seconds

Boston Children’s comes in #1 in this list of best Children’s hospitals, while Seattle is ignored:

Deborah Kotz: The Honor Roll of Best Children's Hospitals 2014-15 (Source: The Boston Globe)

1. Boston Children’s Hospital/ Children’s Hospital of Philadelphia (tied)
2. Cincinnati Children’s Hospital Medical Center
3. Texas Children’s Hospital, Houston
4. Children’s Hospital Los Angeles
5. Children’s Hospital Colorado, Aurora
6. Nationwide Children’s Hospital, Columbus, Ohio
7. Ann and Robert H. Lurie Children’s Hospital of Chicago
8. Children’s Hospital of Pittsburgh of UPMC
9. Johns Hopkins Children’s Center, Baltimore

If you use the Patriot’s inflated claim to the larger region, Springfield and and Worcester come in at #1, and #14 respectively  for best heart surgery hospitals, while Seattle has a hospital ranking #13, in the list:

Top 15 hospitals in U.S. for heart surgery (Source: Castlight Health)

1. Baystate Medical Center, Springfield, Mass.
2. Borgess Medical Center, Kalamazoo, Mich.
3. Cleveland Clinic, Cleveland
4. The Heart Hospital Baylor Plano, Plano, Texas
5. Kaiser Permanente Sunnyside Medical Center, Clackamas, Ore.
6. Kaleida Health (Gates Vascular Institute at Buffalo General Medical Center), Buffalo, N.Y.
7. Mother Frances Hospital-Tyler, Tyler, Texas
8. St. Joseph Mercy Hospital, Ypsilanti, Mich.
9. St. Joseph's Hospital Health Center, Syracuse, N.Y.
10. St. Vincent Heart Center of Indiana, Indianapolis
11. Sequoia Hospital, Redwood City, Calif.
12. Spectrum Health - Grand Rapids (Meijer Heart Center), Grand Rapids, Mich.
13. Swedish Medical Center-Cherry Hill Campus, Seattle
14. UMass Memorial Medical Center, Worcester, Mass.
15. Valley Hospital, Ridgewood, N.J.

Using an access benchmark, Boston ranks #5 while Seattle doesn’t make this list:

Top 10 Cities With The Highest Per-Capita Ratio Of Both Hospitals And Primary Care Physicians Per Resident (source: Vitals)

1. Cleveland
2. Minneapolis
3. Milwaukee
4. Kansas City
5. Boston
6. Omaha
7. Denver (tie)
8. Miami (tie)
9. Atlanta
10. Nashville

And finally, perhaps in a bit of a stretch, Seattle placing an Executive in the this Most Influential list, while Boston is ignored:

Modern Healthcare: 10 Most Influential Physician Executives And Leaders (source: Modern Healthcare)

1. Richard Gilfillan- President and CEO, CHE Trinity Health, Livonia, Michigan
2. John Noseworthy- President and CEO, Mayo Clinic, Rochester, Minnesota
3. Gary Kaplan- Chairman and CEO, Virginia Mason Health System, Seattle, Washington
4. Margaret Hamburg- Commissioner, Food and Drug Administration, Washington
5. Ardis Dee Hoven- President, American Medical Association, Chicago, Illinois
6. Patrick Conway- Deputy Administrator for Innovation and Quality, CMO, CMS, Baltimore, Maryland
7. John Kitzhaber- Governor of Oregon
8. Glen Steele Jr.- President and CEO, Geisinger Health System, Danville, Pennsylvania
9. Jonathan Perlin- President, Clinical Services CMO, HCA, Nashville Chairman-elect, American Hospital Association, Nashville, Tennessee
10. Toby Cosgrove- CEO, Cleveland Clinic, Cleveland, Ohio

Population Health Management - Integration of Medical and Pharmacy Benefits

By Claire Thayer, January 22, 2015

A new Blue Cross Blue Shield Association (BCBSA) and Prime Therapeutics LLC (Prime) study examined yearly medical costs of 1.8 million members of Blue Cross® and Blue Shield® (BCBS) independent companies, whose pharmacy benefit services were divided between “carve-in” and “carve-out” benefit options.  This study finds that members integrating the pharmacy benefits experienced:

• 9% fewer hospitalizations
• 4% fewer emergency room visits
• 11% lower medical costs

HealthPartners, in their Pharmacy Integration Study, estimated that integrating medical and pharmacy benefits can save a group with 9,000 continuously enrolled members more than $1 million per year.  These and other data points are featured in MCOL’s infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Making the Old New Again

By Kim Bellard, January 22, 2015

I always love it when someone looks at something familiar in a completely new way.  I only wish health care had more examples of that.

The example of this kind of totally fresh thinking that caught my eye concerns traffic lights.  If researchers from Carnegie Mellon University, led by Professor Ozan Tonguz, have their way, those familiar yellow boxes with the lights could become unnecessary.

The CMU researchers have developed "virtual traffic lights" (not to be confused with the separate CMU "smart traffic signals" project).  Instead of using physical traffic lights, lights would show up on the driver's dashboard as needed.  As Professor Tonguz told CNN: "With this technology, traffic lights will be created on demand when [two cars] are trying to cross this intersection, and they will be turned down as soon as we don't need it,"

The researchers claim the virtual, on-demand signal could reduce commuting times by 40%, as well as reduce carbon emissions and accidents.  And, of course, we wouldn't need all those physical lights; think of the savings on new lights, poles, and wires, plus on ongoing maintenance.

All that would be required is that every car -- and that means, every car -- is equipped with the required vehicle-to-vehicle communications technology.  No small task!  Some think this could happen in a year or two, others a decade or two.  Either way, it's mind-blowing to think that such a familiar part of our driving experience could be so utterly transformed by what seems, in retrospect, such an obvious solution.

Let's contrast this kind of thinking with health care.  Yes, I know -- health care has plenty of new technology and many kinds of improved treatments, but I'm not sure we're getting a lot of reinventing.  Where are our virtual traffic lights?

One small -- well, maybe not so small at that -- health care example is a new patient tracking system called PatientStormTracker, developed by Lyntek Medical.  As the name suggests, PatientStormTracker borrows from weather tracking to present patient monitoring data as systemic color monitoring.  Instead of trying to follow the usual rows and rows of data, clinicians can actually see a patient's status -- color-coded -- and watch it progress in real time, including which body systems are currently being impacted and how much.  

Lyntek's founder and CEO, Dr. Laurence Lynn, told The Columbus Dispatch that traditional patient monitoring is like a fire alarm -- either on or off.  As he said: "We have this simple fire alarm idea that existed from the 1980s, and it didn’t evolve, it didn’t improve."  Dr. Lynn wants to monitor patterns and detect trends earlier, when interventions are more likely to be effective.  PatientStormTracker is in clinical trials.  

One proponent of radical changes in health care has long been Dr. Eric Topol, who happens to have a new book out (The Patient Will See You Now: The Future of Medicine Is In Your Hands).  I have not yet read his book, but I did read his related op-ed in The Wall Street Journal.  His version of virtual traffic lights, if you will, is the smartphone.

Dr. Topol outlines not just increasingly common functions like virtual visits or monitoring using a smartphone, but also apps that assist with testing and even diagnosis.  I especially like his prediction that wearable sensors will make it possible that "...except for ICUs, operating rooms and emergency rooms, hospitals of the future are likely to be roomless data surveillance centers for remote patient monitoring."  That would certainly upend how we view hospitals...finally.

Perhaps those remote patient monitors will use something like PatientStormTracker.

The smartphone technology options are cool, but what Dr. Topol sees as an even more important trend in putting all the newly-captured data in the cloud, mining it, and using it to target interventions.

Changes are going to come at us from seemingly left field.  We can never be quite sure where they will lead. It just takes some innovator to see the familiar in a different way -- and then manage to convince us, and the medical-industrial complex, to change.  

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

What exactly is Qliance?

By Clive Riddle, January 16, 2015

Qliance, recently discussed in Time Magazine as they are quick to tell you, just issued a news release  that their New Primary Care Model Delivers 20 Percent Lower Overall Healthcare Costs, Increases Patient Satisfaction and Delivers Better Care.

Qliance conducted a study "of insurance claims data from 2013 and 2014 for approximately 4,000 Qliance patients covered by employer benefit plans, and compared the cost of their care to that of non-Qliance patients who worked for the same employers. The results revealed a savings of $679,000 per 1,000 Qliance patients on total claims –19.6 percent less than the total claims for non-Qliance patients during the same period."

Here’s data from a table they provided:

	Incidents Per 1,000 Qliance patients	Incidents Per 1,000 Non-Qliance patients
ER Visits	81	94
Inpatient (days)	100	250
Specialist Visits	7,497	8,674
Advanced Radiology	310	434
Primary Care Visits	3,109	1,965

Impressive enough data, albeit its hard to know how much is apples to apples in the comparison. But the bigger question from examining this, is what is Qliance, what the heck is a Direct Primary Care model, and how is it different from other, more familiar models?

The first question is how exactly does one pronounce Qliance? The website FAQs didn’t have an answer for that question – like “clients” one would assume.

The next question would be, is Qliance a form of health coverage? The answer would be yes and no. Yes – you can contract to receive their medical services for a fee, but no – they are not an insurance plan.  One might think so when first arriving at their website – the navigation menu  refers to Members, Clients, Locations, etc, so one might assume Qliance is an integrated health plan.

But it is not.  As their FAQs will inform you, they are NOT insurance.  Instead they charge a monthly fee to provide primary care, with no fee for service charges.  Here’s what they say:  “We work directly for our patients to provide direct primary care. Your monthly care fee pays for our primary and preventive care services. Qliance does not bill any insurance carrier for our services, and Qliance monthly care fees are not reimbursable by any health insurance company, and may not be applied to any insurance plan deductible. Your insurance plan may be billed by others for services such as emergency, hospital, specialty care, laboratory tests, diagnostic imaging, prescription drugs or other goods and services that are ordered by your Qliance health care provider but are not performed or provided in our offices.”

So with or without health insurance, you can pay Qliance a monthly fee, and receive all the coordinated direct primary care services you want. But you or your health insurance, and not Qliance, will pay for any healthcare services Qliance does not provide. And depending on the type of managed care plan you have. your health insurance won’t pay for outside services ordered or prescribed by your Qliance doctor.

Sounds like a major stumbling block. Except that Qliance also works with self-insured employers to integrate with their health benefits.  Again, quoting from Qliance FAQs:  “We can work with any type of insurance plan. Most employers that incorporate Qliance into their benefits plans save 10% or more, with some employers saving over 40%”

Reading up on all the bells and whistles of Qliance – they seem to be a hybrid of a patient-centered medical home, concierge care, retail/urgent care clinic, with some purchaser-like capabilities. So the question is, in an age where integrated care holds much potential promise – why not keep moving bit by bit down the spectrum towards the purchaser end of the bar?

Perhaps first Qliance will just need to keep moving – to some additional locations. Right now you’ll just find them in the Seattle – Tacoma metro area of Washington.

Your Healthcare Lexicon for 2015 from A to Z

by Clive Riddle, January 9, 2015

Accountable Care Arrangements in Medicare, Commercial and Medicaid flavors

Big Data in healthcare parsed with Analytics

Collaboration between providers and purchasers

Deductibles loom large with continually increased consumer cost sharing

Engagement by purchasers with consumers and with providers

Federally Facilitated Marketplaces may or may not be able to provide future subsidies (see “K” & “S”)

Generic Drug prices are on the rise

Health Insurance Exchanges (Marketplaces) both public and private

Innovation Officers abound in health systems trying to transform how they do business

June is when we should find out what SCOTUS has to say about the next item (see “K”)

King vs. Burwell looms large on the Supreme Court docket

Long Term Care continues to be largely ignored while boomers age away

mHealth technology advances on all fronts

Narrow Networks are being deployed in Exchanges and elsewhere

Obamacare somehow remains the politically charged umbrella term for all things Affordable Care Act

Population Health Management has been embraced in the mainstream of plans and health systems

Quality Measures are being transformed with advances in analytics and reporting capabilities

Republican control of Congress ensures continued chipping away at the Affordable Care Act

Subsidies for public exchange enrollment are threatened (see “F”, “K” and “R”)

Tax Filings now require healthcare coverage information,

Uninsured are the topic of conversations of health plan marketing departments and political pundits

Value Based Purchasing is being sought by almost every purchaser

Wellness Programs for employers are being significantly scrutinized for effectiveness

X-Prizes in healthcare are on the rise with Innovation initiatives (see “I”)

Young Invincibles reluctant to signup for healthcare coverage (see “U”)

Zebras – may be easier to find in healthcare with advances in Big Data and analytics (see “B”)

The Convenience Truth

By Kim Bellard, December 17, 2014

The U.S. Mint reports that it now costs 1.7 cents to make a penny; nickels are slightly better, costing "only" 8 cents to make the 5 cent coin.  This is economics the way health care practices it.

According to Christopher Ingraham of the Washington Post, we could save $100 million annually by eliminating both coins.  Or we could change the metal composition to make them cheaper, but that would create havoc with vending machines.  So we just blithely chug along, mostly because we've always had them and the businesses that revolve around them don't want to change.

See how this is like health care?

What made me think about this was a recommendation from Britain's National Institute of Health and Care Excellence (NICE).   They now say that midwife-led birthing units are safest, and advised more women to consider them for low risk pregnancies.  They believe this could account for as many as 45% of live births.  Moreover, they think home births are just as safe as births in a hospital.  The Netherlands is considered the leader in home births, at a little under 25%.  The U.S. has 1.36% home births.

The literature -- often drawn on Netherland's data -- generally supports the NICE recommendation, but not everyone is convinced. It would be very easy to weigh all the factors, and conclude that even a relatively small increase in risk is not something you'd want to take for your own baby, and opt for the "traditional" OB/hospital delivery.

This is where the penny analogy starts to really apply.  These decisions on risk reduction are not without financial consequence.  A vaginal delivery with no complications averages about $10,000, whereas a birthing center costs under $2,500, according to Childbirth Connection.  I assume home delivery is less expensive.

In a piece for The New York Times, professor/physician Aaron Carroll notes that the ACA-created Patient Centered Outcomes Research Center is explicitly prohibited from considering cost effectiveness.  Its website says: "We don’t consider cost effectiveness to be an outcome of direct importance to patients."

Huh?

In theory, value-based purchasing will help us address these decisions.  In practice, though, most of the value-based purchasing arrangements I am aware of -- and that certainly is not an exhaustive list -- reward providers whose outcomes are simply what we'd hope for, may penalize them slightly for disappointing results, and are indifferent about if the care could have safely been done elsewhere for less.

I'm beginning to think that trying to reshape our health care system through value-based purchasing, cost-effectiveness, or even greater transparency may not work.  The "killer app" may not prove to be any of those high-minded strategies but rather a much more basic one: convenience.

Indeed, one of the earliest urgent care chains attributes its inspiration to the example of McDonald's.  We are, after all, the nation that invented fast-food, decided even that wasn't fast enough and so invented drive-throughs, which we use for over half of our fast food.  We liked the convenience of them so much that we've extended the approach to banks, car washes, pharmacies, even weddings and  funeral homes.  The concept of drive-throughs itself is rapidly being supplemented and even superseded by mobile apps, allowing consumers not to even have to get in their car.

Health care cannot ignore these consumer demands for more convenience.

Walgreens' chief medical officer recently noted that: "The idea of convenience ... is really becoming a dominant theme in health care."  It's no coincidence that Walgreens has been investing in in-store clinics, has a 24/7 Pharmacy Chat option, and just rolled out a direct-to-consumer physician virtual visit app, similar to American Well's Amwell service.  Not to be topped, Kaiser is now offering EMT home visits, in addition to its array of in-office and virtual visit options.

Our traditional approaches to care delivery have revolved around convenience for the providers, not the consumers.  Many consumers, especially younger ones, find ridiculous the notion that they have to call for an appointment that may end up weeks away, go to an office or facility that may not be close, only to wait there with sick people, and perhaps be sent to some other office or facility for more services.  They'd rather get their care via their mobile devices and/or in their home, and the technology is increasingly allowing that for many health concerns.  

We've come to recognize that health care is one of the few industries where technology typically not only doesn't lower costs but usually adds to them.  Maybe, though, expecting providers whose revenue is at stake to focus on cost-effectiveness is asking too much of them.  Focusing on convenience shouldn't be.

Focusing on convenience is simply a way to make sure we're focusing on the consumer (AKA "patient").  Isn't that supposed to be the point?

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Pitfalls with Health Care Provider Data

By Claire Thayer, December 11, 2014

A U.S. Senate Committee investigation report finds that Medicare paid 478,500 claims attributed to deceased physicians, totaling up to $92 million, from 2000 to 2007. The U.S. Postal Service reports that at least 25-30% of the demographic and contact information for health care providers changes every year. The cost of bad or outdated provider data is estimated at $26 billion annually. These and other data points are featured in MCOL’s infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

The Age of Discontinuity

By Cathy Eddy, Health Plan Alliance, December 8, 2014

Newt Gingrich and David Nash

On December 2, I was invited to be on a panel at a Health Care Executive Forum in Washington DC that was sponsored by the Academy of Managed Care Pharmacy. David Nash, MD, MBA, dean of the Jefferson School of Population Health facilitated discussions about:

• Population Health and the Insurance Marketplace (my panel) 
• Narrow Network vs Value Network: Where’s the Greater Value? 
• Specialty Pharmacy & Biosimilars: Improving Population Health?  

One of the most interesting aspects of the day-long discussion was the morning keynote by the Honorable Newt Gingrich, the author of the Contract for America and Speaker of the House when the Republicans took both the House and the Senate in 1994 – a political point in time that parallels the recent 2014 election.

He referred to one of his mentors Peter Drucker and a book he wrote in 1968 called “The Age of Discontinuity.”  I’ve read some of Drucker’s work and always found it to be very insightful, but I hadn’t heard about this book, so I looked it up and found this summary:

Drucker begins by examining four major areas of obvious discontinuity:

1. The explosion of new technology and its resultant new technology 
2. The development of knowledge as a result of mass education and its impact on work, life, leisure and leadership
3. The social and political realities of the new industries
4. The change from an inter-nation economy to a world economy. 

He was writing this in a time before cable TV, the internet, cell phones or the fall of the Berlin Wall. But I do remember 1968 as a year of political unrest in this country.

However, Drucker's framework for discontinuity is very relevant today and especially to the challenges that are facing the health care industry. Here are some of my take-away perspectives from the discussion we had in DC:

• We are trying to leverage and integrate multiple forms of technology as part of our approach to care. The smart phone, which is with people now 24/7, will become the monitoring and informational tool of choice in the future.
• As healthcare pushes the “consumer” to become more self-governing, the value of information as a driver of behavior continues to grow, while at the same time the expectation is for more services, but at a lessor cost.
• ACA – what happens next? The direction and degree to which the new Congress can change the current health care law is uncertain. The impact of a Supreme Court decision on subsidies can impact millions on the exchanges run by healthcare.gov. 
• How will the instability of the rest of the world impact the US economy and spending demands, while an increasingly large portion of the federal budget is going toward healthcare expenditures?

Although it is clear that healthcare has the attention of leaders in business, state government, Congress and the Supreme Court, it is as yet unclear how that attention will change our industry in the future.

The health insurance industry by definition manages risk, but in this “Age of Discontinuity,” it is hard to plan for some of the risks that are coming our way. Hold on - 2015 looks to be an interesting year.

What’s In a Name?

By Clive Riddle, December 3, 2014

Wellpoint is now Anthem. The re-titling of the national health benefits company was publicly announced months ago, the new corporate website has been designated as www.antheminc.com, and the change from the New York Stock Exchange ticker from WLP to ANTM became effective today.  

WellPoint Health Networks and Anthem merged in 2004, with WellPoint assuming the corporate name of the merged company. Why the name change back to Anthem ten years later? It’s mostly about branding. Joseph Swedish, Anthem’s President and CEO tells us “the change to Anthem will help us better communicate our values and simplify the way we connect with our associates, consumers, investors, and the communities we call home.” Simply put, the company has lots of products around the nation branded as Anthem. They have none branded as WellPoint.

So why did they take the WellPoint name in the first place? Branding may have been less the issue at the time than negotiations between two large BBCBS for-profit corporations. The corporate headquarters went to Anthem’s Indianapolis, but with the WellPoint name. WellPoint’s Leonard Schaeffer got the title Chairman of the Board; Anthem’s Larry Glasscock took the title President and CEO. A telling sign of the shifts in competing corporate cultures and recognition of the branding issue would have been in 2009 when the flagship from the WellPoint camp, Blue Cross of California, assumed the trade name Anthem Blue Cross.

The era of corporate names that are independent of the subsidiary divisions and products seems to have faded as branding is deemed more essential.

As we dig around through the graveyard of bygone healthcare names, the branding issue is forever complicated by mergers, acquisitions, spinoffs and scandals. 

Humana once was a hospital company that developed a health plan division, back when corporate integration of healthcare was in vogue in the 1980’s, before falling out of favor in the 1990’s and re-discovered this decade. Humana’s hospital division was spun off as Galen Healthcare, which was acquired by Columbia, which merged with HCA to become Columbia/HCA, and finally just HCA (Hospital Corporation of America), partially to simplify branding, and perhaps more to re-brand away from the Columbia identity after a Medicare fraud scandal in 1997.

Tenet was once National Medical Enterprises, becoming Tenet in 1995 partly to re-brand after large acquisitions, but motivated to distance from the NME name after scandals with NME’s Psychiatric hospitals division.

In New York, Group Health Inc. and Health Insurance Plan of New York merged in 2006, under the corporate name EmblemHealth. Eventually, the corporate name became branded as a product name. Such strategies - to deploy the corporate name in branding - have become much more prevalent during this decade.

But then there is Regence, the Pacific Northwest BCBS company who in 2011 announced their new corporate name would be Cambia Health Solutions, while the health plan products are still branded Regence.  So what’s in a name – and in 2024 will Cambia pull a WellPoint and re-title themselves as Regence?

Future of Provider-Sponsored Health Plans and Managing Risk

By Cathy Eddy, Health Plan Alliance, December 1, 2014

Deloitte Consulting conducts an enterprise wide risk assessment with Presbyterian Health Services annually and the information is leveraged by the health plan.

Health systems are looking at their range of options for the future – most with an eye for making the transition from fee-for-service to value-based reimbursement. These options include shared savings programs, bundled payments, accountable care organizations, some form of capitation or global payment and for some, starting or growing a health plan. These options involve varying levels of risk.

As the lines blur between payers and providers, it is important for health systems to carefully evaluate their strategies and their partners to be successful in the future. It will also mean doing business differently and navigating through the major challenges that have been driven by marketplace dynamics and health care reform.

Many organizations have identified provider-sponsored plans as a “hot topic” and are trying to identify the keys to success with this model. As systems move to value-based reimbursement, a health plan can act as both a catalyst and an accelerator for change.

For almost 20 years, the Health Plan Alliance has been working with integrated delivery systems that have health plans. These are the systems that stayed with the vertical strategy when many of their colleagues sold off or closed down their insurance arms. The health systems that stayed committed to owning a health plan are now at a strategic advantage in many ways:

• They have a vehicle to understand and manages risk
• Health plans have the infrastructure to manage populations 
• A closer link to the marketplace 
• Better understanding of managing care 
• Ability to gather and analyze quality data for the populations served 
  
• A driver for more clinical integration 
  

What are some of the key considerations for systems to consider when owning a health plan or partnering with one?

• What are the populations you want to serve – commercials, exchanges, Medicaid Advantage, Medicaid or duals? These all have different risk challenges 
  
• Do you have the financial resources to fund a start-up and maintain the risk-based capital requirements? 
  
• Do you have or can you acquire the expertise to run a successful plan? 
  
• Does it make sense to partner with another health plan or payer?
  
• Are you willing to make the delivery system changes need to manage risk? 
  
• Are your physicians organized to take on risk and support quality measures of a health plan? 
  
• Are you organized to manage the care of a population along the healthcare continuum?
  
• Are you thinking about direct contracting with large employers in your marketplace?

The members of the Health Plan Alliance have a wealth of knowledge about how integrated delivery systems are managing risk. Last month, our Fall Retreat addressed the various levels of risk that a health plan manages – governance, product lines, physician alignment, clinical integration, financial and business continuity.

If you weren’t able to attend this meeting, you can find the presentations on our website and you can request a video recording of the meeting.  Managing multiple levels of risk will continue to be a challenge for health systems in the future, especially those that have made the strategic investment to own a health plan.