Milliman: More Room in the Medicaid Inn Needed in 2014

By Clive Riddle, July 29, 2011

Milliman’s Robert Damler and Paul Houchens have just released a white paper:  “Social Security and modified adjusted gross income: Estimated impact to Medicaid enrollment under the PPACA.”

Their abstract states “The Patient Protection and Affordable Care Act (PPACA) provides for an expansion of Medicaid eligibility for individuals who have an annual household income at or below 138% (including the 5% income exclusion) of the federal poverty level (FPL). Recent discussion has turned to individuals who may qualify for Medicaid even though their households have significant Social Security or Supplemental Security Income (SSI). Using the 2009 American Community Survey (ACS) data published by the U.S. Census Bureau, this paper explores the potential number of individuals receiving Social Security or SSI and other family members within the household who may have been excluded from the Medicaid population expansion analyses because of the differences between defining household income under the public surveys and the modified adjusted gross income (MAGI). The MAGI methodology will be used to determine eligibility for Medicaid and exchange subsidies under the PPACA.”

What this all means is Damler and Houchens have identified and quantified an additional source of potential Medicaid enrollment that had not figured into most Medicaid projections currently in use. They do caution that while their results are based on the 2009 American Community Survey, “results using other publicly available survey data or internal government resources may differ significantly.” Hence the different numbers currently in use.

But what if Damler and Houchens are right?  They conclude that “based on calculating household income with and without non-taxable Social Security and Supplemental Security Income included, we estimate from the ACS data that approximately 2.3 million additional individuals nationwide will be eligible for Medicaid beginning in 2014, because of the exclusion or partial exclusion of these income sources.”

However, Damler and Houchens note, these 2.3 million bodies didn’t just appear from nowhere.  They would have largely qualified for subsidies anyway under the state health insurance exchanges. The added cost implications are in who pays for them (state vs. federal-  and their Medicaid eligibility increases state costs according to the authors) as well as benefit design (Medicaid benefits are richer, thus the costs will be higher under the Medicaid program.)

The authors also point out that not all 2.3 million newly Medicaid eligible persons will “take up” Medicaid enrollment. They estimate 897,000 (as of 2009) currently have employer coverage and many will elect to remain under those plans. Another 86,000 have military coverage who may also retain current coverage. Less likely to stay put would be 329,000 paying for their own individual coverage or the 698,000 uninsured (these numbers add up to less than 2.3 million as they reflect the 2009 actual ACS data, before adjustment to 2014 numbers.)

Regardless,  states, HIX and Medicaid stakeholders should pay attention to the implications. The authors do provide state by state estimates in their analysis.

Hot Temperatures, Hot Rhetoric: Turn on the AC

By Cyndy Nayer, July 18, 2011

The news shows this Sunday morning focused on the debt ceiling, a concept causing higher angst and tempers across our very hot country.  Of course, a large part of the discussion is the cost of health care in the country, and the political v clinical costs of cutting benefits and resultant strains on the health care delivery system.  So, on this sunny/rainy day in southwest Florida, typical for this time of year, I began thinking about a concept and a slide that I created about 3 years ago.  As the weather here and across the country is speeding to 100+ degrees, the body screams “cool it off,” much like the body politic is screaming about the debt ceiling.  That conflict of politics, health care, and hot temperatures was actually, was the genesis of the slide, and the concept,  that I created called Turn on the AC. 

A play on words, as noted, is often how I begin to frame the “what ifs” in my thoughts.  What if we could cool off the…..for just a bit and have a conversation to reconsider some alternatives—I remember thinking just that in late 2008, as the economy tanked and my speaking engagements picked up.  At the time, I was using the frame of “7 Wonders of Health Value Innovation,” teaching the attendees at various summits how value-based benefit designs could provide relief to a stressed corporate America.  I also remember one of my colleagues telling me, “Cyndy, a little less gloom and doom.”  But that was not really what I was proposing.  Rather, I was setting up a “what if” scenario of plummeting housing market, lower tax revenues, job cuts, hospital distress due to lower disproportionate share reimbursement (this is the Medicaid reimbursement to hospitals for providing care when there is no insurance coverage), public employees losing jobs due to lower tax revenues from lower property values, and so on.

The bad news is, 3 years later, the problem has not gone away.  Now, it’s enveloped in a bigger problem called the debt ceiling.  And this blog is NOT about the debt ceiling.  I have many things to say about debt ceiling, and none of them would I like in print, except to say this game that’s going on in Washington is not helping tax revenues, corporations, working people, unemployed people, health care access, or property valuations.  Back to the subject…

The set-up was, and still is, about the uncomfortable feeling from hot weather.  Debt ceilings contribute to the hot weather feelings, but turning on the AC can help.  We need a cool-down, one in which we remember our basic focus is a healthy, engaged, high performing America.  So, with that in mind, I update “Turn on the AC.”

1.     Accountable Consumers.  At the crux of the problem of escalating health care costs is the entitlement v accountability debate within the consumer population.  Forget, for just a moment, whether insurance is involved.  Each of us has a responsibility to care for our health as the one investment that needs to be fully-funded for our lifetime.  There are some fundamentals here that should be reiterated.

a.     Set goals and write them down.  If you’ve heard me speak, you know I am quite enthusiastic about personal health records.  As a former trainer of fitness trainers/employer health strategist/chair of the Governor’s Council on Health and Fitness, the number one behavior change strategy that I proposed then and continue to enforce is “write it down, measure it daily.”  “You can’t manage what you don’t measure,” applies to corporate strategy, so but it’s a curious item that folks don’t realize the same applies to them:  you have to set goals (small, large), then measure your success in attaining them.  No exceptions.

b.     Get the preventive care that you need.  Love it or hate it, the Accountable Care Act has ingrained this into our lives now.  In the Health Value Accelerator^TM that is being deployed in many communities now, I’m seeing just how much of an “un-engagement” this is.  In many companies, particularly larger companies (over 10,000 employees), there is less than 10% participation in primary care for prevention.  Yet, there is no cheaper investment any consumer/patient/employee/mother/father/child can make:  get your physical, your immunizations, your age-appropriate screenings.

c.      Get your family involved.  If you are the health advocate for your family, share the info you are learning.  Take the kids on a walk after dinner.  In my house, it’s about encouraging my husband to exercise, so I “coax” our fabulous dog, Phoebe, to take him for walks.  Families that eat healthy and exercise tend to forestall health issues.

d.     Spread the word at work.  Share your story of success, of challenges.  Volunteer to coordinate walking groups or healthy vending snacks.  Make your voice heard on health improvement ideas. 

e.     Reward yourself.  If you are doing well on your journey, don’t reward yourself with the hot fudge sundae, but, instead, perhaps a manicure or a movie?  New walking shoes?  Even a lovely glass of wine?  Consumer-driven rewards are completely satisfying, as no one else is dictating either your behaviors or your rewards.  Step up to identifying those rewards that will keep you motivated. 

The key message here is that YOU are responsible for your health—your doctor, your counselor, your fitness trainer, your financial advisor are your consultants, not your health-owners.  You simply must assume this responsibility or be subject to the whims of the market place and latest insurance products.  If you want some semblance of normalcy in your health, own it, track it, demand it, enjoy it. 

2.     Accountable Corporations.  Business is the backbone of America.  Business provides revenue for us to buy houses, support social causes, and even campaign for elected officials.  But business that creates barriers for its employees to get health is not a healthy business.  Wasteful spending in the health system has been calculated at up to $1.2 trillion of the $2.2 trillion spent in the United States, more than half of all health spending.  (PriceWaterhouseCooper)  Whether your position is that the ACA is going to help businesses or hurt businesses with its legislation, realize that every week there are new rulings, and American business cannot afford to waste one minute waiting for “final rulings.” 

Recently we all read that one consulting enterprise predicted what many of us saw as an abnormally high exit from corporate health benefits.  In our survey from the Center for Health Value Innovation (176 companies, 4 million lives), we saw no numbers that came close to this prediction, and, evidently, neither did many of the other large consulting companies.  But what we did hear last week was another challenge for American business:  new rules on the Health Insurance Exchanges said that states did not have to launch them by 2014—the date can be 2015, or perhaps beyond. 

What this means to American businesses is, once again, the heat is on, and the ball is back in your court.  There’s no time to waste in getting your employees healthy, re-engaging them in managing their health.  Value-based designs are one tool, and I don’t have to reinforce that message—it’s also in the ACA:  reduce beneficiary out-of-pocket costs for valuable services.  But take it a bit further:  consider those rewards, or incentives, that are outside of the insurance plan design.  How about a contest for movie tickets?  How about a healthy lunch for the business channel with the most people who get their flu shots or track 150 minutes of exercise in one week?  Think of games and challenges that cause an uptake in healthy behaviors, and applaud your champions.  Create a business expectation that people who work at your company are expected to manage their health and that the company respects all efforts for improved health.  Create a culture of engagement, in which employees bolster employees’ efforts at health promotion. Colleagues at Journal of Occupational and Environment Medicine, Pam Hymel MD and others, have written extensively about the link of health to corporate performance.  Build your culture of engagement so that you create accountability from the C-Suite to the receptionist and beyond.

3.     Accountable Care.  This, too, is part of the national and local change that is occurring with the ACA.  But in 2008, and even now (hard to believe that the measures are the same 3 years later), my focus was on the delivery system to deliver health as we want and measure it:  healing with less infections, less mistakes, less days absent, less avoidable pain and suffering, less use of unneeded diagnostics and treatments; care with more compassion, more time to listen, more care coordination so that people are not “on their own”; more interoperability so that records support efficient care. 

The 2008 AC slide was the genesis of the Outcomes-Based Contracting platform that has become the extension of everything value-based and patient-provider-engaging.  Identifying high performance providers and systems, creating benefits plans that guide consumers to competency and better health care, and linking these delivery system improvements to the shared rewards for all of the stakeholders, is true American engineering.  Removing friction and competition for dollars, installing competition for a “better outcome” is the foundation of accountable care.  Medical Homes, care coordination, benefits advocates who coach beneficiaries on improved behaviors and their link to lower premiums or expanded services—all of these are part of Accountable Care, but only if we hold our principles intact:  efficiency, effective care, and appropriate care delivered in a timely, competent fashion.  Self-insured employers understand the link and are searching for ways to direct contract with organizations so that, togetherm the accountability link is communicated. 

4.     Accountable Communities.  When the AC is going full-blast, when the accountable consumers support the efforts of the accountable corporations, who, in turn, provide healthcare coverage to the employees through identification and purchasing of outcomes-focused suppliers, the community at-large benefits.  Accountability grows in small increments, but its effect is felt throughout the families and corporations that benefit from the improved service lines and improved health status of the citizens.   When 1 or 3 or 7 corporations demand hospital-based performance metrics, everyone who uses that hospital benefits from the improved quality.  When 1 or 3 or 7 corporations demand to pay for disease management that builds engagement (instead of numbers of calls made to beneficiaries who may never engage), the systems for disease management change and the others in the community benefit.  When benefits coaches help employees and their families not only choose the right insurance plan but use it for full maximum value, they teach other families how to maximize their health benefits.  When few people use the emergency room for primary care, and instead use lower-cost onsite or offsite clinics or telehealth Emergency Room visits, more resources are saved for under-insured and uninsured folks—more accountability for choice leads to better use of existing resources.

What the AC focus does is create engagement across single, multiple, and varied participants in the health value supply chain.  AC shares the requirement of engagement and builds the outcome of accessible, affordable, actionable care.  AC rewards all of the engaged participants with lower costs and fuller wallets due to appropriate care at the right resource at the right time.  AC limits inappropriate use, instability in resource budgets, and insufficient funds for treatments that could have been managed more effectively and more efficiently “upstream,” when they didn’t cost so very much in dollars, pain, and stress.

So, on these hot days of summer, consider cooling down and challenging yourself and your constituents to a better outcome.  Turn up the AC, from the Accountable Consumer to the Accountable Corporation, to the Accountable Care and the Accountable Community.  Walk earlier, when it’s not so hard to breathe.  Consume more locally-grown fruits and vegetables to protect your heart on these hot days and protect the revenues in your community.  Create co-worker opportunities to learn and share improved health management techniques. 

And don't forget about that debt ceiling.  Be the Accountable Constituent and let your local and national representatives know how you feel.  It will reduce your body temperature and lower your stress levels.  We could all use that right now.

Health Insurance is Good For You (?)

Kim Bellard, July 11, 2011

Finally, a study that indicates health insurance is good for you! 

Granted, the study looked at Medicaid, for a low-income population, in a specific state, but in a time when health insurers are commonly castigated as villains, perhaps they can take some comfort in the findings.  Or perhaps not.

A brief recap of the study.  In 2008 Oregon realized it had funds to expand their Medicaid rolls (having substantially dropped them several years earlier).  They knew demand would exceed the number of slots available, so they set up a lottery that allowed potentially eligible consumers to enter; almost 80,000 did.  Researchers realized they finally had a classic study design – populations randomly selected into those who got health insurance and those who remained uninsured.  This appears to be the first such ever done when it comes to health insurance. 

The results from the first year indicate that those with health insurance did appear to benefit.  I won’t recap all the results, but some examples include that the newly insured saw doctors 35% more often, went to the hospital 30% more often, got mammograms 60% more often, and were 25 percentage points more likely to say their health was good or excellent.

Not surprisingly, they also cost 25% more.

The increased utilization may be partly an artifact of the so-called “woodwork” effect, i.e., people tend to use benefits more when they first get them (or, conversely, are about to lose them).  The researchers are continuing to mine the data, looking in particular at longer term impacts on health results.  Those extra doctor or hospital visits may or may not actually be improving health; several of my previous blogs (e.g., here) have discussed some of the overuse and errors that appear to be prevalent in the health care system. 

Earlier studies have tried to quantify the impact of health insurance, or lack thereof, have on health outcomes, such as those by the IOM or Mathematica.  Numbers like 44,000 deaths annually attributable to lack of health insurance have been claimed.  It’s not even only a matter of the uninsured not receiving services; even when they obtain services they may have worse outcomes.  Another recently released study indicates that payor status impacts mortality and morbidity for patients undergoing cardiac value operations, with privately insured patients faring better than either the uninsured or those with Medicaid.  So, any way you cut it, having insurance seems like a good thing. 

Clive Riddle recently posted a blog that reminded us how disproportionate health expenditures are distributed, with 5% of the population accounting for about half of the spending.  The fifty percent of the population with the lowest spending accounted for only 3% of all spending.  And that, for insurance purposes, is good.  Historically, and still true in other sectors, insurance is supposed to protect against unpredictable and catastrophic losses.  Anyone can get hit by lightening, catch a rare virus, or develop cancer.  Protection for the high expenses caused by relatively rare events that are outside of the individual’s control is what insurance does best. 

Insurance doesn’t work well at all when the insureds either already are incurring expenses or know they soon will be; for example, persons with chronic conditions.  People in this situation are basically depending on the other insured people to subsidize their expenses.  The data that Clive cited in his blog also noted the persistence of high spending for persons with chronic conditions; high spenders are no longer primarily one-time catastrophic cases, but more often now involve ongoing situations.  At some point, low cost people may balk at continuing to subsidize higher cost persons who have ongoing expenses; many would argue that this is exactly what is happening already in the individual market.

Don’t get me wrong; I am all in favor of reducing financial barriers to care for low-income people.  I’m all in favor of ensuring that health expenses don’t bankrupt families.  Medicaid has many, many flaws, but in any health care system we’re likely to get there will need to be some kind of special consideration for populations on whom financial burdens of health care fall hardest.  Where I start to scratch my head is how far those special considerations need to apply.

A common perception seems to be that without essentially full or low cost coverage for services, people will not get them.  The antipathy towards high deductible or consumer-directed health plans reflect this, with critics fearful that consumers will not behave responsibly when they are accountable for the initial deductible of a few thousand dollars.  PPACA similarly added requirements for coverage without cost-sharing of various preventive services, on the premise that consumers are too irresponsible to obtain services if they bear any financial burden when obtaining them.

A little Insurance 101 might be helpful.  If 100 people are covered, and one of them is likely to incur a $100 charge, then charging an annual premium of $1 per person (plus an add-on for administrative overhead) suffices.  However, if every person was going to get, say, an annual preventive visit that cost $70, then each person will have to pay a $70 annual premium (plus the add-on for administrative overhead) to pay for that visit.   There is no insurance, simply dollar trading with a mark-up. 

For skeptics who say people are irresponsible and won’t obtain appropriate services if there is cost-sharing for them, then I would argue (and have, here) that we have a far bigger problem.  Rather than waiving any financial involvement from patients, we’d be better off figuring out how to motivate patients to take better care of themselves and how to motivate physicians to ensure their patients are doing so. 

I.e., it’s not the coverage; it’s the behavior.  Coverage is necessary but not sufficient.  Sadly, we’ve built our delivery system and much of our health behavior around what insurance pays for rather than around makes the most sense from a health outcomes standpoint.  Or perhaps we’ve built our coverage around what is easy to pay for rather than what we should pay for.   Either way, it’s a problem.

Keeping It Clean

By Laurie Gelb, July 7, 2011

Recently I became aware that my husband’s national pharmacy record contains not only his own data, but that of another patient.

The root cause: the other patient, in another state, with a different payor, was never asked to confirm his address when he picked up his meds. He has the same DOB, first and last name as my husband, though their middle initials, and, of course addresses, are different. Naturally, a "boomer" generation yields birth date clusters. Had anyone ever asked him one simple question at each pickup, “What is your address?” and compared it with the primary address on screen, I wouldn't be writing this.

Between the pharmacy that repeatedly pulled up the wrong record, me, the health plan, the Web team and the pharmacy’s HQ, there have been about 20 phone calls + a series of logins to investigate and re-separate the records of these two patients. I have participated in about half of those. I was told that “one other case” has occurred in memory, meaning probably thousands as yet undetected or unresolved.

A month since I first notified the pharmacy of the issue, the incorrect data are still mingled, though not for lack of trying. As a last resort, my husband’s record has been deleted and re-created, so far with two sets of login credentials for the new record, neither of which works.

Now the question for your EHR vendor: what automated internal validity checks are run on the data populating the record associated with a single MR number, other than obvious single-field validations like date formats? We've already seen the error rate in e-Rx. An EHR selling point is medication alerts. We would expect a pharmacy record to do as well, no? However,  for months now, no edits or alerts have popped up, though the combination of my husband and his counterpart results in a patient who has been on two macrolides, a steroid, warfarin, rx NSAID, ED drug, opiate and four antihypertensives, among other things.

So to your knowledge, do clinicians entering EHR data routinely verify anything other than name? Or do they simply presume the applicability of a paper chart that someone else pulled, or the EHR that they just opened? We certainly can’t tell ourselves that they would always spot internal inconsistencies.

No doubt accidental merges have already occurred in EHRs. And clearly the structure underlying most EHRs (if not all) would have a difficult time backing out a large quantity of data and re-associating it with a second identifier, until we really standardize import/export formats. 
And is it the clinician's job to reassign data into the appropriate records?

Certainly there are HIPAA implications as accounting of disclosures becomes more robust. With an increasingly cloud-based environment but no über-record, contradictory information will find its way into multiple databases, with little impetus or procedure for reconciliation.  I don't see the words “cleaning” or “data validation” anywhere in the PCAST HIT report, or in too many near-term HIT agendas. 

My pharmacy woes don't bode well for the far more complex EHR. As it happens, I've seen errors in every personally-verifiable EHR I've ever skimmed, including at sites used as Federal models. And if I weren’t ordering refills via mail order, I would never have seen the merge, with unforeseeable consequences.

For example, my husband wears a MedicAlert bracelet, linked to an accurate drug list. In an ER, which list would a physician believe: the one from a pharmacy, that a fully functional EHR will link in, or the “self-reported” one? But the former would be dangerously misleading, and, in fact, would also call the list of conditions on my husband’s wrist and his PHR into question. Then what?

Probability of 100% human verification in the next decade? Zero, unless you design systems that require it. Of course, there are many solutions for positive ID, from biometrics to unique credentials. All require time and money. Whose?

In the zero payment for errors mindset, as EHRs become the go-to reference, who does the cleanup and how? And why -- what are the incentives for doing so? The answers to these questions may influence your cost trend over the next few years than we yet know.