Round Up the Usual Suspects

By Kim Bellard, September 11, 2012

Two recent reports have added more empirical support to the widely held belief that our health care system wastes significant amounts of money.  I’m shocked, shocked!  As Captain Renauld said in Casablanca, round up the usual suspects. 

The first report, published in Health Affairs, was from UnitedHealth Group.  The authors examined data from 250,000 physicians around the country, focusing on the privately insured population.  Consistent with the years of data from the Dartmouth Atlas on the Medicare population, it showed widespread variation.  The authors report episode costs for procedures vary 2.5 times, while episode costs for chronic conditions vary 15-fold.  Overall, the report concludes that costs could be 14% lower if delivered by physicians meeting certain quality and cost-efficiency designations. 

An even more assertive claim was made by the prestigious Institute of Medicine (IOM).  Their report, Best Care at Lower Cost, believes that as much as a third of spending is wasted – some $750 billion based on 2009 health spending.  The IOM is no stranger to big claims, including the oft-quoted 98,000 deaths annually due to medical error in their landmark report To Err is Human.  In their new report, they conclude that 75,000 deaths could be avoided if every state delivered care as well as the best performing state.  The IOM was more granular than simply claiming the waste is all unnecessary care: $210 billion in unnecessary services, $190 billion in excessive administrative costs, $130 billion from inefficiently delivered services, $105 billion due to prices that are too high, $75 billion in fraud, and $55 billion in missed prevention opportunities.  That’s a lot of targets of opportunity.

The IOM notes some lessons from other industries, and believe significant improvement is possible, on a variety of fronts: using information technology more effectively, creating systems to manage complexity, more focus on making health care safer, improving transparency of costs, quality and outcomes, promoting teamwork and communication between providers, partnering with patients, and decreasing waste/improving efficiency. They believe that the technology is here to support all these, and the problem is better application of it to health care systems and processes.  No mention was made of “death panels” (!), although I’m waiting for someone to bring up that specter.

There are too many examples that illustrate the flaws in the current system.  For example, Johns Hopkins recently reported that as many as a quarter of adult patients in ICUs may die as a result of missed or incorrect diagnoses, resulting in some 40,500 deaths annually.  The authors note that is more people who die each year from breast cancer.  One would think that ICU patients are getting pretty close attention, more than other patients, which make these results all the more troubling (to be fair, of course, they likely have complicated sets of conditions, making diagnosis harder).

More troubling are recent allegations and lawsuits about unnecessary heart surgeries aimed at increasing hospital revenue/physician income, including HCA and St. Joseph-London in Kentucky.  If these allegations are shown to be valid, these practices may just be the tip of the iceberg.  Throw in recent warnings about the overuse of well-intended but over-used diagnostic tests like screenings for ovarian cancer or prostate cancer, or the cost-benefits from increased exposure to radiation via increased imaging, and it makes one wonder if treatment recommendations should come with a warning label. 

The IOM cited technology as a tool to help support improvement in how the health system performs, and there is data which suggest this hope is not in vain.  The CDC reports that 55% of physicians had an electronic health record in 2011, and half of the remaining physicians expected to be using one in the next year.  Clearly, HITECH has helped spur this adoption, as has the trend of health systems purchasing physician practices.  Solo practitioners significantly lag in adoption (29%), and CDC reports a statistically significant difference in adoption from physicians over 50: 49% versus 64%.  More importantly, about three-quarters of adopters believe that the EHR both enhances patient care and meets Meaningful Use criteria. 

Also encouraging is a report from Medpage Today on physician technology use.  They report 9 out of 10 physicians experienced an increase in the use of the Internet in their practice: 71% spend 3 or more hours a day on a computer, 24% use a mobile device 3+ hours a day, and 18% use a tablet 3+ hours per days, all in support of their practice.  Unlike the CDC results, though, they see very little impact of age on technology adoption, except in use of a smartphone.  The Medpage respondents are a stressed bunch, seeing more patients each day and, as a result, seeing fewer drug reps, spending less time with each patient, and reading fewer medical journals/attending fewer conferences.  The last point is particularly concerning to build the nimble “learning” culture that the IOM advocates, which helps account for the finding that almost all respondents are using their devices to keep up-to-date on clinical news and medical education. 

I’ve often been critical of physicians’ reluctance to adopt technology solutions, but I’m increasingly coming to the point of view that it is technology that is failing them.  We’ve laboriously endeavored to get medical records into an electronic state, when the real challenge is deciding what health data we want tracked, and what views/inputs are needed by different types of users – including patients.   I’ll point to a nice column by Shahid Shah that details some of the kind of patient-centered forward thinking we need, as well as to a recent study by Hripcsak and Albers that reminds us that poorly designed data going in has damaging effects on the usefulness of that data. 

Maybe we need to scrap all those legacy practice management systems and EMRs and study what modern CRM systems in other industries can teach us about tracking and knowing patients, as well as take advantage of lessons learned from just-in-time manufacturing to improve care delivery efficiencies.  Add to those all the real-time data that mobile tracking apps and other monitoring devices can provide on patients’ health and we have a shot at disruptive innovation. 

Job number one in improving our health system has to be measuring who is doing what to which patients, and what impact it is having on those patients’ health.  Without better data on those, we’ll still just be rounding up those usual suspects.  

What’s Happening at MCOL | Complimentary E-Newsletters

Claire Thayer, September 11, 2012

MCOL offers a wide-range of informative e-newsletters that are available for free! Topics address a variety of important industry trends, including: accountable care, consumer driven care, health reform, patient centered medical homes, hospital readmissions, mobile health, predictive modeling, and lots more. Visit the MCOL home page at www.mcol.com and select the Offerings tab, or simply select the desired complimentary e-newsletter below for additional info:

• Accountable Care Bulletin: http://www.accountablecarenews.com/resources.html
• ConferenceLand: http://conferenceland.com/enewsreg.asp
• Consumer Driven Dispatch: http://consumerdrivencare.com/newsltr.htm
• ealth Change Bulletin: http://www.healthchangebulletin.com/
• HealthExecMobile: http://www.healthexecmobile.com/
• HealthExecWire: http://www.healthexecwire.com/
• Medical Home Bulletin: http://medicalhomenews.com/resources.html
• MCOL Free: http://www.mcol.com/freepage.htm
• mHealthShare: http://www.mhealthshare.com/currentissue.htm
• Predictive Modeling Bulletin: http://www.predictivemodelingnews.com/resources.html
• Readmissions News Bulletin: http://readmissionsnews.com/resources.html
• Sprocket Rocket News: http://www.healthsprocket.com/hs/SprocketRockets

How are Providers Managing the Transition with Conflicting Incentives in Payment Structures?

Clive Riddle, September 7, 2012

In the just released September issue of Accountable Care News,the monthly subscription newsletter covering Accountable Care, a thought leader panel was asked: “Given the conflicting incentives of ACO and other FFS lines of business, how are providers managing the transition? Stratifying patient populations based on payment incentives? Managing all patients the same and absorbing the revenue losses? Structuring compensation differently for care team members and individual physicians?

It’s an interesting question. Here’s what the Accountable Care News thought leaders had to say about this issue:

Joel C. Hoffman, ASA, MAAA, FCA, Senior Vice President, OptumInsight Payer Solutions responds that “Provider-sponsored organizations (PSOs) are not going to change who sees which patients, how they manage/coordinate their care, or what they pay their salaried physicians depending on the type of reimbursement received.   Physicians must move to delivering value regardless of how they are reimbursed.   The historic fee-for-service (FFS) incentives for volume and high-intensity services are already shifting to a blended volume/value system, and this transition will continue to accelerate over time in favor of value.  Many of the leading PSOs are already acutely focused on simultaneously improving patient quality/safety while reducing costs of care, even in their legacy FFS reimbursement relationships. Provider reimbursement will evolve to keep pace with the delivery of clinically integrated, coordinated care – case in point, the growth of value-based reimbursement that is expected to help expedite the transformation of the nation’s healthcare delivery system and make it stick.  But FFS reimbursement by necessity will never totally disappear -- today’s PSOs are showing they can positively transform regardless.”

Douglas A. Hastings, JD , Chair, Board of Directors, Epstein Becker & Green, PC, states in part that  “there is not, nor should there be, any single or simple answer to managing the transition.  The pace of change varies around the country due to historical circumstances, current market activity, and a variety of other variables.  The constants are the need to perform well on evolving consensus quality measures and to contain costs in order to absorb reduced reimbursement in whatever actual form that takes.  In addition, there are affirmative investments necessary to make a successful transition, further underscoring the need for capital and operating cost reductions…..Nevertheless, even the most progressive providers will have a foot in both fee-for-service and value-based payment for a period of time.   Approaches to patient care and financial incentives while different payment methodologies co-exist will vary.   My sense from watching and talking to the most recognized and advanced “Triple Aim”– oriented delivery systems is that they aggressively align treatment protocols and financial incentives within the system toward Triple Aim goals from the outset, even though this approach may cost more in the short run.  They argue that such costs are the price of innovation and doing the right thing and that this approach will pay off in the long run.  I think that they are correct.”

Tom Cassels, Executive Director of Research & Insights, The Advisory Board Company says “disciplined providers aren’t waiting for the conflict created by today’s uncomfortable ‘foot in two boats’ transition to value-based contracting to sort itself out.  Rather they are executing clear strategies to identify areas where investments of time and resources in new care models can yield real near-term returns. For instance, these providers realize that they are already at risk for the total cost of their employee health benefits plans as well as the expense of uncompensated (e.g., uninsured) and under-compensated care (e.g., chronically ill Medicaid patients seeking primary care in the ED).  By following the flow of dollars to areas where reduced spending falls directly to their bottom lines, these organizations are making principled decisions to target segments of the populations they serve where their incentives match the objective of reducing the total cost of care.  This is why some of the most exciting innovation in enhanced primary care, patient navigation, and support for patient self-management is coming out of health systems’ management of their own employees and their dependents.  In the words of one progressive health system CFO, ‘Our own spending shows us where we have the opportunity to create value, and if we can learn to shave on our own face we’ll be more credible to other purchasers as a population health manager in the future.’ ”

Nalini K. Pande, JD, Principal Policy Director, American Institutes for Research  reports that “a recent Commonwealth Fund study has recommended that ACOs align as much of their business as possible with value-based payments.   In fact, providers are currently transitioning to a value-based model that uses incentives to reward value and moving away from the traditional fee-for-service (FFS) model that rewards volume.   How are providers managing this transition?   They have focused on changing their systems and the way they do business.  They are utilizing new care practice models to optimize utilization of services.  This includes predictive modeling to risk stratify a population to identify individual opportunities for intervention.  Providers are also engaging patients in managing their own care and using IT systems to assist with clinical decision support, medical error reduction, and patient safety.  Providers have also adopted new care coordination models with continuous quality improvement and a payment structure that recognizes the added value to patients.  Further, they have set up new infrastructures and systems that allow a shift from quality and efficiency ‘measurement’ to quality and efficiency ‘management’.”

Finally, Peter Boland, PhD, President, Boland Healthcare states in part that “hundreds of organizations are still struggling with variations of the ‘what do we want to be when we grow up’ syndrome. The realists understand that bearing increasing levels of financial risk (and reward) with payers and purchasers is becoming the norm. The straddlers still cling to fee for service and volume-based reimbursement despite the inability of Medicare and employers to support such payment. Many providers have recently taken the plunge into the ‘brave new world’ of Medicare Shared Savings Program with an eye towards a gradual transition to modest risk and gain sharing over a five-year period. ….It is an illusion to think that health delivery organizations can have it both ways.  The industry is at the tipping point where accountability for price and service (the value equation) is ‘the new normal’. Good medicine dictates that patients not be stratified by type of payment.  Good business requires meaningful performance metrics to be agreed upon – and tracked -- as the basis for compensation.”

Accountable Care News includes the Thought Leaders panel answering a timely question of the month in each issue, in addition to several feature stories, industry news briefs, and a profile interview with a prominent person involved with accountable care. You can check it out at www.accoutnablecarenews.com.

What’s Happening at MCOL | Latest Videos on HealthshareTV

By Claire Thayer, September 4, 2012

HealthshareTV has over 300 healthcare related videos readily accessible for your viewing. Select from a wide range of categories, including: Health Reform, Readmissions, Medicaid, ACOs, etc. Here’s just a few of the Latest Videos posted in the past several days:

Predicting Risk of Readmissions for Targeting Patient Intervention

Predicting Risk of Readmissions for Targeting Patient Intervention presented by Maria Basso Lipani, LCSW. Coordinator, PACT (Preventable Admissions Care Team), Mount...

HIX: Two Minutes to Pay or Play

TruvenHealthAnalytic via youtube: Chris Justice, senior director analytic consulting and research services at Truven Health Analytics, addresses the question employers are...

Health IT: Using Data for Evidence Based Quality Improvement

HRSAtube via youtube: Electronic Health Records (EHR), data warehouses, and registries are critical components to quality improvement efforts. If used properly...

COO of a Pioneer ACO says: "'Open' is key to Accountable Care."

AllscriptsTV via youtube: How do you create a connected community of physicians on disparate systems, including even those still on paper,...

For all of the Videos on HealthshareTV, including Trending, Most Viewed, Editor’s Pick, as well as to read the HSTV Blog, Newsletter, visit: http://www.healthsharetv.com/

The Los Angeles Times Reports on The Most Litigious Doctor

Clive Riddle, August 24, 2012

The Los Angeles Times recently ran a feature story, State suing doctor over billing tactics regarding “Jeannette Martello's aggressive tactics to collect fees from emergency room patients — including lawsuits and taking out liens on their homes — prompt unprecedented court case by state officials. “

The article notes that “the state's lawsuit against Martello, however, is the first of its kind, according to Marta Green, California Department of Managed Health Care spokeswoman. State officials allege in court papers that Martello collected or attempted to collect more from patients than insurance companies paid, a practice known as balance billing.”

The story about Doctor Martello’s very unique, aggressive tactics to pursue balance bills for contracted patients first broke months ago in MCOL affiliated Payers & Providers.  The Payers & Providers weekly California Edition reported on her activities, and then released a twelve page white paper,  The Many Stories Of One Highly Litigious Physician, with the sub-heading: “Surgeon Treats Patients at Southern California ERs – Then Sues Them” that details account of her 46 small claims and 23 superior court claims filed against her ER patients during the past several years, and the impact upon a number of the patients and their families.

The Times article cites Payers & Providers Publisher Ron Shinkman: “Ron Shinkman, who wrote about Martello and her tactics in the trade publication Payers & Providers, said he had never seen a more litigious doctor in 19 years of healthcare reporting.”

What’s Happening at MCOL | The 1st Annual Readmissions Web Summit

By Claire Thayer, August 21, 2012

This week, we host the 1^st Annual Readmissions Web Summit on Thursday, from 1:00PM – 2:30PM Eastern. Join us for a live 90 minute webinar with national experts as they share their experience, insights and strategic approaches in reducing preventable readmissions:

• 1:00 pm - 1:05 pm  Introductory Comments - Raymond Carter, Senior Editor, Readmissions News; Moderator 
• 1:05 pm - 1:30 pm  Reducing Readmissions By Working Across Settings: Insights from Communities Across the U.S. - Amy E. Boutwell, MD, MPP, President, Collaborative Healthcare Strategies 
• 1:30 pm - 2:00 pm  SETMA's Initiative to Reduce Preventable Readmissions - James (Larry) Holly, MD CEO, Southeast Texas Medical Associates (SETMA); Adjunct Professor, The University of Texas Health Science Center at San Antonio; Clinical Associate Professor, Texas A&M University Health Science Center College of Medicine
• 2:00 pm - 2:30 pm  Involving Family Caregivers in Care Transitions-- Carol Levine, Director, Families and Health Care Project, United Hospital Fund

The event also includes three downloadable pre-recorded sessions, with Regence Executive Medical Director discussing the way forward in managing readmissions from a health plan perspective; Guy D'Andrea, President of Discern Consulting explaining a Financial Incentives Model for Minimizing Readmissions; and Mount Sinai Medical Center's Doctor Jill Kalman and Maria Basso Lipani discuss their experience in prediction and targeted intervention of patients at risk of readmission.

Learn more: http://www.healthwebsummit.com/readmissions2012.htm

Attention, Walmart Shoppers!

By Kim Bellard, August 20, 2012

I’ve been thinking about something a very smart friend of mine wrote me in response to one of my previous posts: “…I can see where technology and information-driven consumerism might work for some highly motivated and educated people ... but not the masses I see at Walmart.”  I’m sure he meant no disrespect to either Walmart or its shoppers, nor do I, but one can go to pretty much any shopping venue and understand his point. 

The grim statistics are well known -- e.g., we’re too fat, we rely too heavily on medications, incidence of lifestyle conditions like diabetes is soaring, and, of course, we spend way more on health care than any other country.  Despite all that, though, Americans remain pretty cocky about their health, with the vast majority claiming to be in “good” or “very good” health, higher than in other industrialized countries. 

We claim to exercise, with over half claiming to exercise at least 1-3 times per week, but we may be kidding ourselves, as only about 5% report exercising on any given day.  Similarly, Americans are in denial about their burgeoning weight, reporting they have actually lost weight when, in fact, they gained.  The bottom line is that most of us are not really in shape, and it is impacting our health.

One of the most telling responses to this problem appeared recently: Dr. Michael Joyner of the Mayo Clinic suggested that our lack of exercise should be considered a medical condition.  I understand his point, since we’re obviously not doing a great job of staying healthy on our own.  Certainly getting more regular exercise would help many people – and, most likely, they know it – but medicalizing lack of exercise seems to me as more of what got us into this mess.

It’s not that various parties aren’t trying to encourage us to live healthier lifestyles.  In a recent post, Clive Riddle reported on the recent Aon Hewitt 2012 Health Survey of employers, citing in particular the widespread use of financial incentives towards lifestyle changes.  That’s encouraging, and a recent survey by the National Business Group on Health echoed employers’ adoption of wellness efforts, but also reported that over twice as many employers – 43% compared to 19% -- see increase use of consumer-directed health plans (CDHPs) as their most effective strategy for controlling costs.  In other words, employers are happy to try dangling the carrot, but they still plan to use the stick.

Employers aren’t the only ones trying to lead us to improve our health; the government is trying as well.  For example, a recent study found that state laws restricting the sale of snacks and sugary drinks in schools did result in children gaining less weight.  That’s notable for at least two reasons: first, that there are a number of states already legislating such choices, and, second, that such efforts may actually work.  No wonder Mayor Bloomberg wants to ban large sizes of sugary drinks in New York City. 

In a country where, apparently, the government can require you to buy broccoli (as long as they call it a tax, not a penalty!), the prospect of it telling us how to live is a little scary.   Then, again, this is a government that can’t even ensure that its retirement payments, whether Social Security or federal employee pensions – meet their one main test, i.e., that the recipient is actually still alive.  So maybe I shouldn’t start worrying about them monitoring my ice cream consumption just yet.

How did it come to this, that we’ve delegated the responsibility of keeping ourselves healthy to third parties, including physicians, employers, or the government?  Some of the problem may come from the fact that parties in the health care system are, in fact, treating us like consumers.  Not in the respect of competing on price or quality, mind you, but in using advertising to drive consumer decisions based on image.   The saga of the impact of direct-to-consumer advertising for pharmaceuticals is widely known, with such advertising spending exploding to close to $5 billion annually after such ads were allowed in 1997.  Some are calling for an end to DTC pharmaceutical ads, as the CBO studied last year.  The hospitals are also getting into the act, pouring money into advertising, as the New York Times reported last year.  Throw in spending by various diet and alternative medicine alternatives, and it becomes clear that we face a lot of forces telling us that some other person and/or product is the key to our health.  When we don’t directly pay for some large portion of those, as health insurance can allow us to believe, the temptation to not shop prudently is almost irresistible.   We may shop for flat screen TVs at Walmart, but when it comes to health care, we think we deserve to be Neiman Marcus shoppers.

There are certainly many situations were medical advice and treatment is not only appropriate but also necessary, and thank goodness that our clinicians are always finding more ways to combat our various maladies.  We have more and better options all the time, even though often those options are more expensive and sometimes not as clearly beneficial as we should expect.  But the responsibility for our health does not lie in those clinicians’ hands, much less in the hands of our employers or government officials.  I don’t have any reason to expect that Americans will be better at managing their health than they are at managing other aspects of their lives, but we shouldn’t be worse either. 

There is a lot efforts around “patient centered medical homes,” which include many good ideas, especially better coordination among health care providers.  As long as the focus is “medical,” though, the “patient centered” part of it is going to lack important components necessary for improved health.  Health is the result of a complicated interaction of genetics, environment, lifestyle, social influences, and medical interventions, to name a few.  We need to break out of the medical model to truly get at health.

We talk about the health care system, but in truth it is still the medical care system.  If we’re serious about improving health, and impacting the quality and cost of medical care, maybe we need to step back and think about a health care system really should look like. 

I’m sure that some Walmart shoppers are spending beyond their means, buying things they don’t need and can’t afford.  Some are perhaps even in bankruptcy.  But I like to think that most of them live within their means, and have learned how to manage their financial health.  We should be thinking about what in our current system leads us to not expect them to do the same with their actual health.

Not So Bad to Be Employed in Healthcare in this Economy

By Clive Riddle, August 17, 2012

Randstad Healthcare, one of the nation’s largest healthcare staffing firms, now maintains a “Healthcare Employee Confidence Index, a measure of overall confidence among U.S. healthcare workers” which they state “declined 4.5 points to 53.9 in the second quarter of 2012” according to the Harris Interactive quarterly survey they commissioned.

The company states “the quarterly survey of 232 workers currently employed in the healthcare industry, which included physicians, healthcare administrators, as well as other healthcare professionals, reflects a sizeable increase in those who believe the economy is getting weaker. At the same time, that sentiment did not damper workers' personal confidence, as more stated that they believe more jobs are available and they are likely to look for one in the next 12 months. “

Steve McMahan, an  executive vice president with Randstad tells us "understandably, healthcare workers are concerned about the overall economy, but at the same time, this does not seem to be hampering their personal confidence in their own abilities and attractiveness to other potential employers. In fact, when it comes to their own employability, half of healthcare workers surveyed still remain confident that they could find alternative employment if they chose to.”

Here’s some of their survey findings:

• 43% believe the strength of the economy is weakening, an increase from 27% in first quarter 2012
• 20% of healthcare workers believe the economy is strengthening.
• 24% report that more jobs are available, but 49% of healthcare workers believe there are fewer opportunities available
• 51% indicate that they are confident they could find a job (versus 58%in Q1 2012)
• 58% of healthcare workers feel confident in the future of their company
• 37% of healthcare workers are likely to look for a new job in the next 12 months (rising six percentage points from Q1 2012)

It’s interesting of course, to contrast the US healthcare employment picture from the economy as a whole, since the onset of the Great Recession. Here’s Bureau of Labor Statistics graphics from their Current Employment Statistics Highlights, July 2012 issued on August 3^rd.

Maybe its not so bad to be employed in healthcare.

What’s Happening at MCOL | Webinars this week focus on Healthcare Exchanges and Social Medica Activity

By Claire Thayer, August 14, 2012

On Wednesday, Payers & Providers co-sponsors a webinar event titled “The California Healthcare Exchange: A Progress Report.” We hope you’ll join us as the California Health Benefits Exchange’s David Panush, Health Access’ Anthony Wright and Jon Gabel of NORC discuss the progress California is making in building its healthcare exchange. They will discuss who will participate in the exchange starting in 2014, how consumers will benefit, and examine what other states are doing in their own exchange construction efforts.

On Thursday, Healthcare Web Summit Events presents key research findings from MCOL and PricewaterhouseCoopers’ on Healthcare Social Media Activity in 2012. This webinar event is co-sponsored by HFMA – Northern California Chapter. MCOL is compiling an important white paper in this regard: "Measuring Health Care Business Social Media Activity - 2012" which will be unveiled and discussed at length at the live webinar and delivered to all attendees. This new white paper involves compilation of a number of recent key research findings from leading organizations, plus original research of social media activity for over 50 major national and regional health care organizations including health plans, health systems, hospitals, pharmaceutical organizations, other providers and government health care agencies. The webinar also includes a detailed discussion of PwC's Health Research Institute report "Social media likes healthcare: From marketing to social business." Topics will include new relationships between consumers and the biggest health companies that serve them, how individuals use the social channel, and strategies for companies to incorporate social media into their business operations.

We look forward to having you join us at these Healthcare Web Summit events.  For more information: http://healthwebsummit.com/upcoming.htm

Aon Hewitt Finds Employee Wellness Incentives Continue to Proliferate, Tie Rewards to Results

By Clive Riddle, August 10, 2012

Aon Hewitt, based on findings from their 2012 Health Care Survey of 1,800 employer organizations that represent over 20 million employees, tells us that “employers are increasingly relying on incentives to drive participation in health programs and encouraging employees and their families to take better care of themselves.”

Here’s data Aon Hewitt shared regarding the state of employers and incentives in 2012:

• 84% offer incentives for participating in a health risk assessment
• 64% offer an incentive for participation in biometric screening
• 51% offer incentives to participants in health improvement and wellness programs
• 59% used monetary incentives to promote participation in wellness and health improvement programs, up from 37% in 2011
• Monetary incentives for participating in disease/condition management programs increased from 17% in 2011 to 54% in 2012
• 46% incorporate some type of VBID (Value Based Insurance Design)
• Less than 10% provide an incentive to address the results of the health risk assessments or take action based on  biometric screening results
• 58% of employers that offer incentives,  provide incentives for completing lifestyle modification programs
• About one-fourth of employers that offer incentives, provide incentives for progress or attainment made towards meeting acceptable ranges for biometric measures

Jim Winkler, Aon Hewitt’s  chief innovation officer for Health & Benefits reaches this conclusion: "Incentives solely tied to participation tend to become entitlement programs, with employees expecting to be rewarded without any sense of accountability for better health. To truly impact employee behavior change, more and more organizations realize they need to closely tie rewards to outcomes and better results rather than just enrollment."

What’s Happening at MCOL | The Accountable Care Directory Version 2.0 released

By Claire Thayer, July 31, 2012

The Accountable Care Directory 2012 Version 2.0 is now available and is a unique resource for Accountable Care stakeholders and others monitoring the industry! Version 2.0 includes an Organizational Directory of over 200 selected ACOs, including the Medicare MSSP, Advanced Payment and Pioneer ACOs as of date of publication, plus a wide range of ACOs serving selected Commercial and other populations. Contact and summary information is provided for each organization, along with a listing of key individuals with leadership or operational involvement. Over 700 of these individuals are listed, with direct phone and email contact information when available.

Choose from book or electronic formats.  An excel database is also available to purchasers of the book or pdf version. More information: https://www.managedcarestore.com/yhlthqst/hqaco.htm

Too Bad About Your Coverage

By Kim Bellard, July 30 2012

There’s more data that shows health coverage is good for people.  Too bad fewer people than expected will have it. 

The New England Journal of Medicine recently reported on a study by Sommers et. alia which showed that Medicaid expansions can be linked to lower mortality rates in the impacted populations, along with better access to care and improved self-reported health status.  Not surprising, really, especially on top of last year’s study from the Oregon Medicaid program, that also showed that those lucky enough to win their coverage “lottery” did fare better. 

ACA was supposed to greatly increase the population covered by Medicaid, but with the Supreme Court ruling’s loophole on states adapting the expansion, that picture no longer looks quite as rosy.  The Congressional Budget now estimates that 6 million fewer people will get coverage through Medicaid and CHIP, although they obviously do not yet know which states will elect not to expand their programs.  CBO believes that half of those 6 million people will get coverage via the insurance exchanges – although I’m not clear why someone who would have gotten coverage in the Medicaid expansion would have income above the magic 133% of poverty level – leaving a net increase of 3 million more uninsured than under the original ACA estimates. 

CBO also believes those 3 million additional enrollees in the insurance exchanges will cost more than average, and as a result add about 2% to the cost of individual insurance in the exchanges.  That is another hidden “tax” on the private sector.

Whenever I think about the injustice of millions of poor people not having access to coverage while middle class people get subsidies, I remind myself that this is nothing new.  We’ve been doing that with the tax preference for employer health coverage for decades, so this latest indignity merely makes things quantitatively worse, but is not qualitatively new. 

Speaking of employer health benefits, Deloitte’s recent survey of employers forecasts 9% of employers will drop their health coverage, with another 10% uncertain what they will do.  This compares to the GfK study estimate from last winter of 12% drop/32% uncertain, and the now infamous McKinsey estimate from last summer that 30% of employers would drop coverage.  Deloitte’s survey, though, was only of employers with more than 50 employees; if smaller employers were included, the number would no doubt be higher than the 9%.

Reasonable experts can probably agree that the estimate of employers initially dropping coverage is somewhere in that 10-20% range, recognizing that many employers have not yet made up their minds.  The trouble I see is that once this ball starts rolling downhill, it won’t stop; it’s only going to pick up speed.  No one is going to want to be the last one in the benefits pool.

A little history lesson might be helpful.  Health insurance used to be virtually all fully insured and community rated.  That worked for a while, until some employers and insurers figured out that both could benefit by offering lower rates to employers with lower cost populations.  That gradually led to the demise of community rating – HMOs were the last to give up the ghost – in the group market, as fewer and fewer employers were willing to subsidize their higher cost fellow employers.  Use of employer-specific claims experience became the norm, especially for larger employers.  In the early 1970s, spurred by the passage of ERISA, employers also realized even with experience rating, being part of the insurance pool at all still had limitations they wanted to avoid, and they began to adopt various forms of self-funding.  It initially was only for very large employers, but, again, gradually became adopted by employers or more and more sizes – some of whom were/are really too small from an actuarial point of view to justify it.  Again, once some employers escaped being insured, other employers became more uneasy about still being part of the insurance pool.

Self-funding had the specific advantage of escaping state benefit mandates, although recent federal mandates, including ACA’s, are rapidly eroding this advantage of self-insurance.  The ACA requirements have added costs to most employer plans – e.g., coverage dependents, unlimited maximums, no coinsurance on preventive services – and the government’s involvement in their benefit design is probably not sitting well with many employers who thought they had escaped it.

At this point in time, most group business is self-funded.  Kaiser Family Foundations’ 2011 Employer Health Benefits survey found 60% of employees were in self-funded plans, up from 49% in 2000.  Over 80% of employees in firms with 200 or more employees are in self-funded plans.   I.e., to the extent they can, employers have made rational business decisions not to subsidize anyone they don’t have to.

Why anyone would believe employers would not act the same way once some employers start dropping their health plans is beyond me. 

Employers have invested a lot in their current health plans.  They have shown much thought leadership in driving changes to both insurers and providers, but the auto and steel industries, to pick two, have shown us how legacy health costs can hamper domestic and local competitiveness.  Right now, not offering health plans is a huge disadvantage in attracting and retaining employees; Deloitte’s survey shows over 80% of employers cite attracting/retaining employees as a key reason for offering health benefits.  However, it would only take a few bellwether employers to start dropping coverage to start a rush by other employers for a similar exit.

Employer coverage still has the advantage of the tax preference, plus the fact is that the health insurance exchanges are not up and running and the individual market is not yet reformed or robust.  Come 2014 or 2015, though, the exchanges may be a more appealing option, especially for smaller employers, and if anyone believes the tax preference will survive as is in the coming deficit reduction wars, well, good luck with that.

People aren’t going to keep their current health plan.  Many poor people will still not be protected by Medicaid.  We will still have some 30 million uninsured.  And we’re still not getting good value for our exorbitant health care spending.  Until that problem is solved, everyone’s coverage is in danger.

ACOs by the numbers

By Clive Riddle, July 27, 2012

CMS now touts that with the 88 ACOs brought on line effective July 1, 2012. “the total number of organizations participating in Medicare shared savings initiatives to 153, including the 32 ACOs participating in the testing of the Pioneer ACO Model by the Center for Medicare and Medicaid Innovation (Innovation Center) that were announced last December, and six Physician Group Practice Transition Demonstration organizations that started in January 2011.  In all, as of July 1, more than 2.4 million beneficiaries are receiving care from providers participating in Medicare shared savings initiatives.”

On the commercial side, Cigna has been a national leader in the ACO arms race, with Aetna also making waves, and a wide range of plans have well-developed regional initiatives. Cigna states they are now engaged in 38 patient-centered initiatives in 19 states, including six multi-payer pilots and 32 Cigna-only collaborative accountable care initiatives, covering more than 300,000 Cigna customers, with more than 4,500 participating primary care physicians. Aetna Inc. is developing commercial ACO and Aetna currently has 10 commercial ACO agreements in place and hopes to 20 by the end of the year.

Perhaps the most prevalent commercial strides with attributed membership to date involve the self-funded employee populations of the hospitals and physician organizations that have developed ACOs, using their own employees as the initial pilots for their respective programs.

Using MCOL research in compiling Version 2 of the Accountable Care Directory 2012, the following are ten identified ACOs with large attributed membership (combining Medicare and Commercial when applicable) at this juncture:

1. Advocate Health Partners, serving Illinois with 350,000 attributed members
2. Partners for Kids, serving 37-county coverage area, stretching from urban Columbus to rural Appalachia with 290,000 attributed members
3. Healthcare Partners Medical Group, serving Los Angeles and Orange Counties, CA with 89,000 attributed members
4. Accountable Care Coalition of Texas, Inc. , serving Houston/Beaumont area, Texas with 70,000 attributed members
5. Heritage Provider Network, serving Southern, Central, and Costal California with 70,000 attributed members
6. Aurora Accountable Care Network, serving Eastern Wisconsin and Northern Illinois with 58,000 attributed members
7. Sharp Healthcare ACO, serving San Diego County, California with 56,700 attributed members
8. Atlantic Accountable Care Organization, serving Bergen, Morris, Somerset, Sussex, and Union counties, New Jersey with 50,000 attributed members
9. Hill Physicians Medical Group, serving Sacramento, El Dorado, Placer counties, California' with 46,000 attributed members
10. Partners Healthcare, serving Eastern Massachusetts with 45,000 attributed members

What’s Happening at MCOL | New Video – What is MCOL?

By Claire Thayer, July 23, 2012

What is MCOL?

Listen to a new three minute video describing what mcol does for those in the business of healthcare. MCOL means memberships, newsletters, webinars, directories, e-learning, healthcare social media, web sites and promotional solutions.

Learn more via mcol's healthsharetv site at: http://www.healthsharetv.com/content/what-mcol-0

The Role of Pharmaceuticals in Value-Based Healthcare

by Clive Riddle, July 19, 2012

Who is the “Working Group on Optimizing Medication Therapy in Value-Based Healthcare” you ask? They consist of National Pharmaceutical Council (NPC), the American Medical Group Association (AMGA) and the Premier health care alliance, along with seven provider organizations, formed to develop a “framework for considering the role of pharmaceuticals in achieving value-based success.”

It could seem somewhat self-serving, given the National Pharmaceutical Council was a driving force in the initiative and issued the press release about their newly published framework. However the group does say some interesting things. Their entire thoughts on the matter are published in a web article,  Role of Pharmaceuticals in Value-Based Healthcare: A Framework for Success, in the American Journal of Managed Care.

NPC Chief Science Officer Robert Dubois, MD, PhD tell us “Providers are shifting to value-based care models to provide better care for individuals, improve population health and slow cost growth. Many of these models, such as the Centers for Medicare & Medicaid Services' Medicare Shared Savings Program, include quality benchmarks and incentives for reducing costs. As providers evaluate optimal care for their patient populations in these new models, prescription medications should be thoughtfully integrated into the process.”

Here’s the components of the framework they have constructed:

1.  Success in a value-based environment will depend on understanding the unique contribution of medications and utilizing them optimally across conditions and populations.
2. Medications cannot be viewed as a siloed expense item in a value-based environment. They need to be integrated so that the cost offsets and quality benefits resulting from optimized pharmaceutical use can be recognized and calculated.
3. Services meant to optimize patient outcomes cannot be undertaken as a one-size-fits-all approach; the role, impact and characteristics of these services will vary by a patient's condition.
4. Overall risk factors can be used to identify patients who are candidates for medication therapy management strategies to watch for drug-drug, drug-disease, or polypharmacy concerns.
5. In each circumstance where there are condition-specific incentives to achieve cost savings, there should also be a quality metric to detect under-use of pharmaceuticals.

The group views ACOs as a centerpiece of value based programs. Doctor Dubois leaves us with this thought: "It is crucial for ACOs to view prescription drugs as a tool, not simply an expense.”

What’s Happening at MCOL | Webinars this week discuss Supreme Court Decision and Employer Health Cost Trends

By Claire Thayer, july 16, 2012

Please join us on Wednesday this week as PricewaterhouseCoopers' Michael Thompson and Jack Rodgers expand upon significant research findings from two major PwC studies: the 2013 PwC Health Research Institute Behind the Numbers Report and PwC’s 2012 Touchstone Health and Well-being Employer Survey. The speakers will discuss findings in detail and offer resulting insights on emerging megatrends for employer health strategy over the next 3-5 years.

On Thursday, join us to understand the detailed components of the Supreme Court Decision, including the Mandate and Medicaid provisions. Consider the impact and implications of the Decision upon applicable provisions of the Affordable Care Act, with particular emphasis on state opt-out or inclusion in Medicaid expansion. This will a great opportunity to get your questions answered!

Learn more about both of these events at healthwebsummit.com/

The Emerging Pharmaceutical Pendulum

By Clive Riddle, July 12, 2012

Conventional wisdom tells us that pharmaceutical growth is not the beast it once was. Growth has decelerated and been tamed to the point of 3-4 percent this year, due to a variety of factors including the lingering economic downturn, patent expirations with the corresponding conversion to generics, and a dip in patient demand due to increased cost sharing requirements and coverage concerns.

The IMS Institute for Healthcare Informatics now tells us the pendulum is poised to swing back the other way, and they are forecasting 5-7 percent growth in 2016. However, this resurgence is significantly projected to be driven by emerging versus developed markets.

Their just released report: The Global Use of Medicines: Outlook through 2016, “found that annual global spending on medicines will rise from $956 billion in 2011 to nearly $1.2 trillion in 2016, representing a compound annual growth rate of 3-6 percent. Growth in annual global spending is forecast to more than double by 2016 to as much as $70 billion, up from a $30 billion pace this year, driven by volume increases in the pharmerging markets and an uptick in spending in developed nations.”

Murray Aitken, the Executive Director of the IMS Institute for Healthcare Informatics tells us, “as health systems around the world grapple with macroeconomic pressures and the demand for expanded access and improved outcomes, medicines will play an even more vital role in patient care over the next five years. The trillion-dollar spending on medicines we forecast for 2016 represents a rebound in growth that will accentuate the challenges of access and affordability facing those who consume and pay for healthcare around the world.”

Their report also projects that around the globe:

• Spending on medicines in developed nations will increase by a total of $60-70 billion from 2011 to 2016, following an increase of $104 billion between 2006 and 2011.
• Spending in the U.S. will grow by $35-45 billion over the next five years, representing an average annual growth rate of 1-4 percent
• In Europe, growth will be in the -1 to 2 percent range due to significant austerity programs and healthcare cost-containment initiatives.
• The Japanese market for medicines is forecast to grow 1-4 percent annually through 2016, slightly lower than the rate during the prior five years and reflecting biennial price cuts scheduled for 2012, 2014 and 2016.
• Overall, patent expiries in developed markets will yield a five-year “patent dividend” of $106 billion, reflecting reduced brand spending of $127 billion offset by $21 billion in higher generics spending
• Annual spending on medicines in the pharmerging markets will increase from $194 billion last year to $345-375 billion by 2016, or $91 in drug spending per capita. Generics and other products, including over-the-counter medicines, diagnostics and non-therapeutics, will account for approximately 83 percent of the increase.
• Pharma manufacturers will see minimal growth in their branded products through 2016. The market for branded medicines will experience flat to 3 percent annual growth through 2016 to $615-645 billion, up from $596 billion in 2011.
• In the major developed markets, branded medicine growth will be severely constrained at only $10 billion over the five-year period due to patent expiries, increased cost-containment actions by payers and modest spending on newly launched products.
• The pharmerging markets are expected to contribute $25-30 billion in branded product growth over the same period. Off-invoice discounts and rebates will offset about $5 billion of global branded medicine growth.
• Global generic spending is expected to increase from $242 billion in 2011 to $400-430 billion by 2016, fueled by volume growth in pharmerging markets and the ongoing transition to generics in developed nations.
• Global launches for New Molecular Entities (NMEs) will rebound during the next five years, as 32-37 NMEs are expected to be launched per year through 2016. Between 2011-16, 160-185 NMEs are expected to launch, compared with 142 between 2007-11.
• Biologics are expected to account for about 17 percent of total global spending on medicines by 2016, as important clinical advances continue to emerge from research.

What’s Happening at MCOL | HealthshareTV: the home for health care videos

By Claire Thayer, July 9, 2012

This week, we are excited to announce the launch of HealthShareTV, a new community where health care business professionals and others can watch, rate, comment on, and post videos regarding any business or clinical aspect of the health care industry. 

• HealthshareTV: http://www.healthsharetv.com/
• HealthshareTV newsletter: http://www.healthsharetv.com/content/healthsharetv-newsletter
• Video Finder: http://www.healthsharetv.com/videocat
• Latest Videos: http://www.healthsharetv.com/latest
• Most Viewed: http://www.healthsharetv.com/mostviewed
• Trending Videos: http://www.healthsharetv.com/trending
• All Videos: http://www.healthsharetv.com/allvideos
• Editor’s Pick: http://www.healthsharetv.com/%20editors-picks-video-collection
• Featured Videos: http://www.healthsharetv.com/featured-videos

Over 300 health care related business videos are now posted! Check out the HealthshareTV newsletter or visit HealthshareTV.com. 

What’s Happening at MCOL | mhealthshare – home for mobile health app information!

By Claire Thayer, July 3, 2012

This week, we are excited to announce the launch of our new mobile health app web site: mhealthshare.  Healthcare business professionals and others now have a centralized resource to keep current on mobile health applications developments with health plans, hospitals, medical groups, government, solutions providers and other healthcare business stakeholders. Applicable links:

• mhealthshare: http://mhealthshare.com/
• mhealthshare fact sheets: http://mhealthshare.com/mfactsheet.htm
• mhealth lists: http://healthsprocket.com/hs/listcategorysearch/13
• mhealth videos: http://www.healthsharetv.com/

mhealthshare publishes a periodic free e-newsletter. Each edition provides highlights on the latest mhealth related news as well as features a selected mhealth video, blog, list and more. Take a look at the current edition at: http://mhealthshare.com/currentissue.htm.

ACA Is Alive! Now What?

By Kim Bellard, July 2, 2012

It seemed somehow fitting that the first reports about the Supreme Court ruling on the Affordable Care Act got it wrong – both CNN and Fox News initially announced the mandate had been struck down.  Debates and discussions about ACA have never been very accurate, and often not rational.  It would be nice to think that the Supreme Court’s ruling has finally ended the debate, but no such luck.  Gov. Romney and other GOP leaders have already renewed their vows to “repeal and replace” ACA (or, as they call it, “ObamaCare”), so even in the best case scenario we can expect the debate to continue at least through the November elections, which could either throw water on the protest or ignite it further, depending on the results.  

Of course, the Court’s decision also included a couple of poison pills, handing the conservatives another bone to gnaw on by labeling the mandate a tax, and creating the potential for some very strange gaps in coverage by allowing states to reject the Medicaid expansions.  We could end up where poor people still lack coverage while essentially middle class individuals are getting subsidies for their health insurance.  Both aspects of the ruling add fodder for the debate.

Honestly, I’m not sure it much matters.  Certainly there are lots of things about the law I don’t like, especially the shady accounting on which it was passed, but having 50+ million Americans without financial protection against health care expenses is unacceptable, so until someone else comes up with a better plan to address that, ACA it is.   However, I keep remembering that ACA doesn’t really solve the underlying problem of getting value for our health care spending, ACOs and VBP initiatives notwithstanding.

The math doesn’t work for me.  For example, under ACA, subsidies for insurance premiums and cost-sharing are available to people under 400% of the federal poverty level.  I.e., we’re subsidizing health insurance for over two-thirds of the population.  That is not a sustainable number, especially given the fact that close to 50% of the population pays no federal income tax.  We have an unaffordable product being funded by too few people.  Any actuaries in the crowd can tell how that story will end up. 

Then there is the bottleneck caused by our physician shortage.  According to the federal government, almost 60 million Americans already live in Health Professional Shortage Areas, and the American Academy of Medical Colleges forecasts a shortage of 124,000 physicians by 2025.  AAMC also says that the average medical student graduates with over $160,000 in debt, and that number keeps going up with annual tuition increases.  Throw in the existing $12 billion of costs for residency programs, and one has to wonder how we will afford all those new physicians; all those costs are before those new physicians start generating additional health care spending. 

So we’ve got a product that is apparently too expensive for two-thirds of the population, whose costs are largely driven – directly or indirectly -- by a resource that is in short supply and yet is very expensive to train and maintain.   Throwing more money into this system doesn’t seem like a particularly prudent action.  

There are clues to what a different type of health care system might include.   Take, for example, Minute Clinic and its competitors.  These so-called “retail clinics” are booming; NPR says there were more than 1300 at the beginning of the year, and Minute Clinic itself plans to have 1,000 of its own clinics by 2016, double its current number.   These clinics have in common features such as the use of physician alternatives like nurse practitioners, convenient locations, and reliance on technology to improve the patient experience and reporting.  They won’t soon replace, say, surgeons, but there is a host of health problems for which they are well suited.

Technology is another inarguable part of our health care system’s future, and not just the HITECH push to EHRs and HIX.  In a previous post, Clive Riddle talked about the potential role of self-service in health care, referencing Accenture’s recent report on the topic.  Long story short, Accenture reports that, yes, patients overwhelmingly want more self-service in their interactions with the health care system.  They still want an option of dealing with their doctor in person, but they also want a host of other options, such as online appointments and prescription refills, or email communications with their doctors.  All of these technology options already exist, but are not widely available.  Our health care system still features large numbers of decentralized, technologically backward providers.  In 2008 (the most recent data I found), almost one-third of physicians worked in practices with one or two doctors, with another 15% in practices of three to five physicians.  Presumably these small practices are much less likely to be able to provide patients many technology options.  This is one reason physicians are rushing towards being purchased by hospital systems, although many of those systems don’t have a great record on patient-oriented technology. 

PWC sees a similar shift towards a technology/patient-centered future in their recent mHealth report.  Their report is broader than just self-service, and surveyed patients, payors, and physicians, in the U.S. and elsewhere, but focused more on mobile solutions.  They found that patients are fairly positive about the potential for mHealth solutions to help them, while physicians are much less so – 42% worry mHealth will make patients too independent.  The Pew Research Center recently found that 88% of Americans own a cell phone, over half of whom use it to go online, and 17% of who do most of their online browsing on the phone.  The number and breath of mHealth applications is astonishing, and growing rapidly, and it certainly is one of the most exciting parts of health care right now.  The future of health care may not be mHealth, but it will most definitely include it. 

I particularly liked one of the final quotes in PWC’s report.  According to Peter Benjamin of Cell-Life, “the bits of mHealth that work won’t be call ‘mHealth’: they will be called ‘health’, in the way that nobody talks about ‘electric health’ and no country has a ‘stethoscope society’.”  We shouldn’t get caught up in mobile versus other technologies -- as PWC concluded, it’s the solution, not the technology.  Whether eHealth or telehealth or Health 2.0 or any of the other plethora of terms that are out there; what works – to improve patient care and the patient experience – need to get incorporated into our health system.  Except we shouldn’t just layer these new things on top of the current dysfunctional system; we really need to make them part of a reengineering process that rewards solutions that provide better value.  If we were to design a health care system from scratch, with better value as a focus, what would it look like and how much cheaper could it be?

I don’t know the answer to that question, but I think it starts with moving away from a physician and institutional orientation to a true consumer orientation.  We need to provide consumers with appropriate, on-demand support, assistance and advice at the right time, not just when they happen to stumble into a doctor’s office or hospital.  Bricks and mortar aren’t going away, but they are an awfully expensive approach.  Interestingly, some third world approaches to health care – like some of their mHealth solutions -- may have something to teach us, if we can learn to have the best of both worlds.

If the drama about ACA has taught us anything, it’s that expecting a legislative approach to such reengineering is like waiting for Godot.  Change is going to have to be driven by the parties in the system – the payors, the providers, and especially we patients.  Change will be hard, and will create many new “winners” and leave many existing parties in the system out of luck.  Our choice, though, is either to let our current system drive itself, and our economy, to collapse, or to change it in ways that make more sense.   The good news is that there’s no reason our system can’t be both better and less expensive – there’s so much waste, inappropriate care, fraud, and inefficiency that, if we have the brains to identify the sources of these and the courage to eliminate them, we can get a system that provides the value we all say we want.