A Tour of 2019 Healthcare Predictions

By Clive Riddle, January 4, 2019 

We recently released our own 2019 healthcare prognostications, and now it’s time to take a tour of a selected healthcare weather forecasts for the year ahead, on a variety of fronts. 

First for a general overview, we stop at the PwC Health Research Institute’s 13th annual report on the year ahead, with six healthcare trends to watch in 2019: 

1. Connected health devices and digital therapies will become integrated into care delivery and the regulatory process for drug and device approvals, with several new products coming to market
2. Healthcare organizations will have to make major capital and training investments in artificial intelligence robotics, automation and data analytics in order to keep pace.
3. The 2017 Tax Cuts and Jobs Act will continue to create tax savings for healthcare organizations while creating new challenges. 
4. The healthcare industry is ready for a disruptor like Southwest, the budget airline provider was to that industry. 
5. The pace of healthcare private equity investment will accelerate 
6. Republican changes to the ACA will shift the law's winners and losers. Providers are on the losing end of most of these changes.

Also, providing an overall view is CareMore’s Sachin H. Jain in Forbes magazine with these: 10 Healthcare Industry Predictions for 2019:

1. Humanism and humanity in healthcare will make a real comeback.
2. The epidemic of loneliness will take center stage.
3. Medicare Advantage will be seen as a template for the healthcare system of the future
4. Quality measurement will focus on what happens in the exam room.
5. The health care industry will make progress on new models for drug pricing.
6. We will finally learn what Amazon, Berkshire Hathaway and JP Morgan are up to.
7. Tech companies will get into the health care delivery business.
8. More buzzwords: I’m not sure what language mashups we can expect next year, but rest assured they’ll generate plenty of conferences and spam emails.
9. Another unlikely, head-scratching mega-merger will occur.
10. We will all keep our new year’s resolutions: Each of us will lose fifteen pounds. We will all read a book a week. We’ll learn Mandarin, remember to call our grandparents, wash the dog more often and write that mystery novel about the doctor who uncovers a crime syndicate operating out of the hospital cafeteria 

One more overview entry on the tour comes from the 2019 HCEG Top 10 by the Healthcare Executive Group 

1. Data & Analytics: Leveraging data (especially clinical) to manage health and drive individual, provider and payer decisions.
2. Total Consumer Health: Improving members’ overall medical, social, financial, and environmental well-being.
3. Population Health Services: Operationalizing community-based health strategy, chronic care management, driving clinical integration, and addressing barriers to health such as social determinants.
4. Value-based Payments: Transitioning to and targeting specific medical conditions to manage cost and improve quality of care.
5. The Digital Healthcare Organization: HSAs, portals, patient literacy, cost transparency, digital payments, CRM, wearables and other patient-generated data, health monitoring, and omni-channel access/distribution.
6. Rising Pharmacy Costs: Implementing strategies to address growth of pharma costs along with benefits to quality of care and to total healthcare costs.
7. External Market Disruption: New players like Amazon, Chase, Apple, Walmart, and Google.
8. Operational Effectiveness: Implementing lean quality programs, process efficiency (with new core business models), robotics automation, revenue cycle management, real-time/near-time point of sales transactions, etc.
9. Opioid Management: Developing strategies for identifying and supporting individuals and populations struggling with substance abuse/addiction or at risk of addiction.
10. Cybersecurity: Protecting the privacy and security of consumer information to maintain consumer trust in sharing data 

Here’s a venture capital perspective on the healthcare industry from Venrock, featured in Fortune magazine: 10 Health Care Predictions for 2019 From a Pair of Venture Gurus 

1. More payer consolidation
2. Physician-led Accountable Care Organizations will grow rapidly
3. Doctors get less dissatisfied
4. Interoperability becomes interoperable: Five years after being declared successful, forces will finally come together to lead breakthroughs on cross health system and platform interoperability. 
5. Consolidation in digital health
6. We think that we are near peak hype cycle for insurance technology. 2019 is likely to be a year of toe stubbing for many. 
7. Dialysis disrupted: Just as Sears has been replaced by home delivery, dialysis centers will be supplanted too. 
8. Telemedicine takes off
9. PBM disruption talk becomes reality
10. Real progress with new DNA sequencing platforms 

Turning toward technology, CIO Magazine offers Healthcare technology markets: 5 predictions for 2019: 

1. Health systems are investing in specific programs such as telehealth and remote monitoring. While these initiatives gather momentum, other digital health programs are struggling to emerge from pilot deployment and also face competing priorities for discretionary budgets.
2. AI will make steady progress but will struggle with adoption gaps
3. Big tech is yet to figure out its play for healthcare markets, with one possible exception (Apple Watch)
4. Digital health startups will face a continuing struggle for growth and stability
5. Blockchain will remain a solution looking for a problem 

On the policy front, Morning Consult offer thse Top 5 Health Policy Predictions for 2019: 

As cost of health care continues rising, states and industry set to act 

1. Affordable Care Act: A ruling from a federal judge finding the Affordable Care Act unconstitutional has cast uncertainty on the future of the nation’s health care system — and reframed national debate on health reform ahead of the 2020 elections.
2. CMS waiver guidance: Armed with a majority, House Democrats are poised to probe how the Trump administration has handled the ACA during the last two years
3. Drug-pricing policy: Addressing the cost of prescription drugs is sure to continue dominating health priorities in 2019, although there is a long road from bipartisan commitment to reducing prices — to bipartisan consensus on how best to do so.
4. Shift toward value-based payment structures: Increasing pressure on hospitals, which contributed to one-third of total health care spending last year, could drive a shift toward value-based payment models next year — a top priority in the Department of Health and Human Services’ Choice and Competition 2018 report.
5. Digital therapeutics and e-health: After years of being just within reach, digital therapeutics and e-health initiatives stand to finally emerge in in the industry and transform care delivery next year. 

Next, we’ll consider employer benefit trends, with the selections of Mercer thought leader predictions posted here and here: 

1. AI everywhere!  Healthcare will be the next industry to be transformed by AI. 
2. Account-based plans create buzz.  
3. Personalization of health care. 
4. Value on investment: The new yardstick for benefits will be how they affect employees’ perception of their employer. 
5. Transparency in Rx pricing.  
6. Getting family-friendly fast. 
7. Extreme claims get real.   A number of factors are driving an increase in both the prevalence and the size of extreme claims
8. More stop loss. With the severity and frequency of catastrophic claims, employers will up their stop loss insurance levels and those that don’t buy it now will reconsider. 
9. More outsourcing.  HR and health and wellbeing functions will increasingly be outsourced t
10. Midsized employers doing something really different.  While jumbo employers are typically the trailblazers, this year midsized employers will take the lead with a couple of truly radical benefit strategies:
11. Moderate cost growth allows longer-term focus. 
12. Big things for behavioral health Change is happening in the behavioral health care delivery system.
13. Specialty drugs will command attention. 
14. Rx management gets yet more complicated. PBMs, carriers, pharma companies, and wholesalers will continue to face intense scrutiny regarding profits, delivery models and alignment (or lack of alignment) with plan sponsor goals.
15. Employers mix it up with clinical services. 
16. The issue of bill coding will surface. As doctors and hospitals become health systems, they are hiring coding experts at an increasingly rapid rate as a means of maximizing reimbursements. 

Finally, let’s end the tour peeking into pharmaceuticals, as CFO magazine features Deloitte’s Greg Reh in Four Trends That Could Shape Life Sciences in 2019 

1. Greater scrutiny over drug pricing. 2018 was one of the biggest years for policy efforts to reduce drug prices and out-of-pocket expenses for patients. 
2. Increased interest in contracts that demonstrate value. The launch of several gene and cell therapies has been a catalyst to advance the discussion of alternative payment models. 
3. The declining return on investment for R&D. A Deloitte analysis on the ROI of R&D among 12 large-cap biopharma companies portrays a steep decline over the nine years that the analysis has been performed.
4. Evolving regulatory frameworks and collaboration between industry and regulators. The U.S. Food and Drug Administration’s (FDA) pre-certification program, which launched in late 2017, is an example of how collaboration between industry and regulators can drive more self-regulation that is rooted in a culture of quality, organizational excellence, and performance monitoring. 

What College Can Teach Healthcare

by Kim Bellard, December 19, 2018 

Mitch Daniels, the former Governor of Indiana and current President of Purdue University, gave an interesting interview to The Wall Street Journal about what Purdue has been up to during his watch. Mr. Daniels — who knows a thing or two about healthcare — drew an explicit parallel to healthcare in the interview: 

“You’re selling something, a college diploma, that’s deemed a necessity. And you have total pricing power.” Better than that, “when you raise your prices, you not only don’t lower customers, you may actually attract new ones.” For lack of objective measures, “people associate the sticker price with quality: ‘If school A costs more than B, I guess it’s a better school.’” A third-party payer, the government, funds it all, so that “the customer — that is, the student and the family — feels insulated against the cost. A perfect formula for complacency.” 

Higher education is one area where prices seem to be rising even faster than in healthcare, and both much faster than wages. Student debt just hit a record $1.465 trillion — yes, trillion — and now trails only mortgage debt in size. 

We spend a lot more — nearly twice as much per student annually — on higher education than almost any other developed country, according to OECD. Yep, sounds like U.S. healthcare all right. 

Mr. Daniels is trying to change that. For one thing, he’s focused on holding the line on costs, such as by bringing Amazon in to help lower textbook prices. Purdue had raised tuition 36 years in a row prior to his arrival, and now has not raised them since 2012. 

But here’s what really caught my eye. Purdue pioneered the use of Income Share Agreements (ISAs), an idea attributed to economist Milton Friedman. Students don’t owe tuition during college, but six months after graduation they begin to pay a percentage of their income for a fixed number of years (e.g., 10 years). Repayment is capped at 2.5 the initial funding. Several other universities are now rolling out their own versions. 

The application of ISAs to healthcare may not be obvious. In an earlier post, for example, I suggested treating our health as a capital asset. We would seek to spend — invest — money on things that increase it, and avoid things that decrease it. It would, admittedly, be hard to quantify any of this, but doing so would force us to measure and to track. 

Perhaps a Healthcare Share Agreement (HCSA) would have a healthcare organization make a quantifiable prediction about your health, and what you pay each year would depend on how they do against that prediction. We’d have to agree on how to measure it, over what period of time, but both the prediction and the measurement are feasible (e.g., QALY). 

The payment could be in lieu of health insurance premiums or health care organization’s charges. The healthier-than-expected you are, the more you pay; the worse-than-expected you are, the less you pay. It’s value-based payment at the next level. It could be done as agreements with individuals and organizations, or, say, between health plans and health organizations at a population level. 

The key thing is for healthcare organizations to do what Purdue is doing: bet on their ability to actually make a positive impact in the lives of the people they serve. 

I don’t know how it would work. I don’t know if it can work. But I’d sure like for someone to give it a try, because the existing business models sure don’t seem to be working.

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

Nine Healthcare Business Trends for 2019

By Clive Riddle, December 14, 2018 

Here’s nine trends to keep a close watch on as we stand on the precipice of 2019:

1. The Year of SDOH

Health Plans, Health Systems and Public Agencies all will invest more heavily in Social Determinants of Health initiatives for their at risk populations. The number, scope, and resources involved in programs will significantly escalate, using a wide range of approaches. Some will be touted as quite successful, some will be deemed as failures, many will need much more time before conclusions can be drawn.

2. Continued Uptick in Uninsured

The Commonwealth Fund cites “The uninsured rates among lower-income adults rose from 20.9 percent in 2016 to 25.7 percent in March 2018.” The news won’t get better in 2019. The ongoing federal chipping away at the ACA in various forms will continue to yield a rising rate in the uninsured.

3. Much Ado About Prescriptions

PBMs, Specialty Drugs, and Pharmaceutical price hikes have been everyone’s punching bag. And the punching will continue with much noise in 2019. But what further policy changes might one expect out of Washington with the current climate? And just released National Health Expenditure data indicates “per capita prescription drug spending slightly decreased (down 0.3%) for the first time since 2012.” While Rx costs are projected to be troublesome in the coming years, the current stall in costs will likely stall momentum for actual change.

4. Amazon and CVS Will Be Busy Bees

CVS and Aetna are now out of the gate, and have already put forth transformational plans.Amazon isn’t just positioning for the pharmacy arena – they’re into healthcare tech and much more, let alone their venture with their employer driven triumvirate with Berkshire and JP Morgan.

5. Increased Focus on Million Dollar+ Claims

Even though general healthcare costs are increasing in the lower single digits, the real high end is not finding a ceiling. Million-dollar+ medical claims increase 87 percent from 2014-2017. Technological and clinical advances will keep pushing this forward, and an increasing amount of attention will be paid on how to deal with the highest end claims. 

6. EHR: Physician Pushback and Response

A Medical Economics magazine article this month starts off with: “It’s no secret that dissatisfaction with EHR systems has been a major concern for physicians. In fact, several recent surveys report as much as a 25 to 30 percent unhappiness level among doctors and practices.”  The pushback will not subside in 2019, and vendors have a major opportunity to promote how they can make physician’s work lives easier, if they truly can come up with some innovative responses. 

7. Employee Cost Sharing: Large Group and Small Group In Different Directions

The Commonwealth Fund reported this month that “premium and deductible costs amounted to nearly 12 percent of median income in 2017. Added together, the total cost of premiums to workers and potential spending on deductibles for both single and family policies climbed to $7,240 a year in 2017.” While e cost sharing in its many forms just continues to exact a growing burden on employees, large groups are shifting strategies away from increased cost sharing, while the small group market may see no respite in 2019. 

8. Cybersecurity Stakes Rise as Healthcare Data Breaches Continue

Its not very risk to predict high risk of more major healthcare data breaches in 2019. Healthcare cybersecurity investments will continue to grow in 2019.

9. Value Based Healthcare is Everywhere

The challenge in 2019: to find a healthcare organization that doesn’t have the words value-based emblazoned throughout its communications.

Too Much Stupid Stuff

by Kim Bellard, November 16, 2018

Melinda Ashton, M.D., has a great article in NEJM: Getting Rid of Stupid Stuff. It describes a program her health system (Hawaii Pacific Health) undertook to do exactly that, with some promising results.

The impetus of their program was to address the issue of burnout, specifically around documentation burdens. Their EHR had been in place for 10 years, and they reasoned that some tasks might no longer be necessary or appropriate. So, starting October 2017, they asked all employees to nominate anything in their EHR that was “poorly designed, unnecessary, or just plain stupid.”

Dr. Ashton and her team reminded employees that: “Stupid is in the eye of the beholder. Everything that we might now call stupid was thought to be a good idea at some point.” Fair enough. They expected nominations to be in three categories:

• unintended documentation that could easily be eliminated;
• documentation that was needed but that could be collected more efficiently;
• documentation that needed better training to accomplish.

They ended up getting nominations in all three categories, and have already implemented a number of changes, as well as eliminating 10 of the most frequent 12 physicians alerts. The program has now been extended beyond just documentation and beyond just the EHR because, as Dr. Ashton writes: “It appears that there is stupid stuff all around us.”

It would be easy but short-sighted to take healthcare’s collective frustration out on EHRs. But let’s not kid ourselves: EHRs are not the stupidest thing we have in healthcare. EHRs may, in fact, be the smartest stupid thing healthcare has done, because at least there are significant upsides to having EHRs, even if we’re not achieving them yet. There are plenty of things we do in healthcare that are just plain stupid.

Admit it: if you work in healthcare, you see stupid stuff every day. Some are things imposed on you from external sources, and some are things required by your own organization. As Dr. Ashton cautioned, some may have been a good idea at some point. Some may never have been a good idea. Some are things that just keep getting done simply because of habit/ tradition/rules. Some are stupid things that someone, somewhere, still thinks is a good idea but, when push comes to shoving patient care, aren’t. They’re still stupid, and should be stopped.

The program at Hawaii Pacific Health as aimed primarily at reducing daily frustrations for its employees, but we need to go much further. These kinds of programs need to attack daily frustrations for all stakeholders, and especially for patients.

If you are a healthcare leader, start a program like this. If you work in a healthcare organization, advocate for one until your leadership puts one in. If you are a patient or family member of one, don’t wait for a formal program from the healthcare organizations you interact with; speak up about the stupid stuff you see and have to deal with, and make sure your thoughts get to those organizations’ leadership.

It’s stupid to accept stupid stuff, especially with something as valuable as our health at stake.

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

Five Questions for Erin Benson and Rich Morino with LexisNexis Health Care: Post-Webinar Interview

Last week, Erin Benson, Director Marketing Planning and Rich Morino, Director, Strategic Solutions, LexisNexis Health Care, participated in a Healthcare Web Summit webinar discussion on opportunities for health plans to leverage social determinants of health data to attain quality goals while managing cost and enhancing member experience.  If you missed this engaging webinar presentation, watch the On-Demand version here. After the webinar, we interviewed Erin and Rich on five key takeaways from the webinar: 1. What are some of the ways that member health is impacted on a daily basis by social, economic and environmental factors? Erin Benson and Rich Morino: The environment in which a person lives impacts their likelihood to develop health conditions as well as their likelihood to effectively manage those conditions. Care recommendations need to be a good fit for a member’s environment, not just their medical condition. If recommendations won’t work within the person’s physical environment, aren’t affordable or conveniently located, and are provided in a way that is hard for the member to understand, they won’t be effective at improving health. Studies support this fact. For example, 75-90% of primary care visits are the result of stress-related factors (JAOA Evaluating the Impact of Stress on Systemic Disease: The MOST Protocol in Primary Care). Money, work and family responsibilities – all reflective of social determinants of health -- are cited as the top three causes of stress (APA 2015). 2. We've heard reference to aggregating data at the zip code level for use in personalizing care for members. However, this is one of your top five myths about socio determinants of health. Can you tell us more? Erin Benson and Rich Morino: While aggregate data can be useful in certain capacities, it isn’t recommended as a best practice for personalizing care. Within a single zip code, it is not unusual to see variance in income levels, crime rates and other factors impacting an individual’s neighborhood and built environment, so we recommend looking at an individual’s neighborhood from the perspective of their specific address. Focusing on zip code alone also ignores the influences of education, economic stability and social and community context so we recommend incorporating these other social determinants of health into decision-making in order to view the member holistically and create a more comprehensive plan of care outreach.   3. Can you briefly explain why previous generations of SDOH have failed to improve health outcomes? Erin Benson and Rich Morino: There are two primary reasons why previous generations of SDOH have failed to improve health outcomes, data and workflow.   In order to get sufficient value, the data needs to address all 5 categories of SDOH to properly draw useful insights.  The data should also be at the member level, and address who the member’s family and close associations.  Without that information, we cannot tell if someone is socially isolated or living with caregivers, for instance. The second reason why previous generations of SDOH have failed is how they are deployed in the workflow.  An example would be a plan simply adding them to an existing claims-based model to achieve an increase in lift.  The lift is nice, but no changes in process are filtering down to the Care Management team interacting with the members.   In this scenario, a lot of value was ignored. A better method would be if the plan also built models identifying members with barriers to improved health outcomes.  If you now apply this to your chronic or at-risk population you can determine not just who is sick and in need of help, but how to most likely achieve success in an intervention program.  Care Managers would immediately know the challenges to success, and what type of intervention program the member should be in enrolled in from the start. 4. One of the SDOH models to uncover health barriers referenced during your webinar was social isolation. Can you provide more context for us here? Erin Benson and Rich Morino: Studies have shown that social isolation can increase risk of heart disease by 29% and stroke by 32% (New York Times How Social Isolation Is Killing Us). By understanding factors about an individual such as who else is living in the household with them, their predicted marital status, and how close their nearest relatives and associates live to them, healthcare organizations can identify who may be socially isolated. This allows care providers to ask the right questions to determine if that person needs access to social support systems such as support groups or community resources to improve their health outcomes. 5. What are some ways social determinants can help health plans enhance predictions and improve care management? Erin Benson and Rich Morino: The most common way of utilizing SDOH data so far has been to incorporate it into existing claims-based predictive models to improve predictive accuracy or to use it to create new predictive models. The second use is for care management purposes and this is where social determinants of health can be truly transformational. We recommend as a best practice to use social determinants of health insights to also build models that identify health barriers. The combination of models allows healthcare organizations to better stratify the risk of their members and then better tailor care to their medical and social needs.

No Signatures Required!

By Kim Bellard, April 18, 2018 If you live in the U.S., you've probably had the experience of paying for a meal using a credit card.  The server takes your card, disappears to somewhere in the back, does something with it that you can't see, and returns with your card, along with two paper receipts, one of which you need to sign. As of last week, the major credit card companies are no longer requiring that signature.  As a Mastercard person told CNET, "It is the right time to eliminate an antiquated practice."   No kidding.  Healthcare should be eliminating its antiquated practices too. Ending the requirement was announced last year, went away last week, but its actual demise will happen more slowly, as individual merchants can still require it.  Of course, the signature is only part of the antiquated process.  They're probably not looking up your card number on a monthly list of stolen cards any longer, nor using a manual imprinter to charge your card, but both using the physical card and taking it from you are steps that there are 21st century alternatives to.  Still, I'd be willing to bet that the credit card companies and merchants bring their processes fully into the 21st century before healthcare does. Let's go through some of these: ·         Healthcare still relies heavily on faxes. Supposedly it is because of security, "HIPAA," etc., but this reliance is a lot like requiring signatures for credit cards.  ·         In an era of ubiquitous smartphones, healthcare is still making heavy use of pagers, especially within hospitals.  ·         I can use an AMT pretty much anywhere in the world, and can not only access my bank account to obtain balance or transfer funds, but even to get cash on the spot.  In healthcare, I can't even go to a new doctor or healthcare facility without having to start from ground zero in terms of information about me (unless they are part of a health system I've already used).   ·         Patient portals have proliferated, with more options to do tasks online, but how many times do you visit a health care professional without having to fill out or sign yet another form?  ·         We can make online reservations for, say, restaurants, airlines, or hotels.  When it comes to making healthcare appointments, though, we're almost always forced to go through a tedious phone tree and end up negotiating with a human scheduler.   In 2018? ·         Manufacturers have overwhelmingly turned to just-in-time processes.  Meanwhile, in healthcare, an appointment time is usually at best an approximation; we expect to be seen late.  If you are in a facility expecting a test or procedure, it's even worse.  These aren't even 1960's levels of precision. ·         Telemedicine is widely available, but usually it won't be with your doctor and the doctor you end up getting won't have your medical history.  Shouldn't virtual visits usually be the first step?   ·         With healthcare there, no institution has access to even most of our medical history, which remains highly scattered, siloed, and sometimes even still paper-based.  How 1980's!   ·         We continue to urge people to get annual preventive exams, even though the value of them for most adults is highly dubious.  We still make people get unpleasant procedures like digital rectal exams, or tests of questionable value like PSAs or even mammograms.   In many ways, we do have "space age" healthcare, but that space age is too often more like 1960's NASA than 21st century SpaceX.  We can do better.  Much of healthcare has one foot firmly planted in the 21st century, and its vision looking forward.  But too much of it still has the other foot dragging in the 20th century. It is past time to not only identify but also to act upon antiquated practices in healthcare.   This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

The State of the Uninsured and Health Insurance Coverage

by Clive Riddle, February 23, 2018 The National Center for Health Statistics has just released updated health insurance coverage estimates from selected states using 2017 National Health Interview Survey data.  Here are seven things to know about their findings for the first 9 months of 2017: 1.     28.9 million (9.0%) persons of all ages were uninsured, not significantly different from 2016, but 19.7 million fewer persons than in 2010. 2.     12.7% of adults aged 18–64, were uninsured, 19.5% had public coverage, and 69.3% had private health insurance coverage. 3.     4.4%  of adults aged 18–64 (8.6 million) covered by private health insurance plans obtained their coverage through the federal or state-based exchanges. 4.     Adults aged 25–34 were almost twice as likely as adults aged 45–64 to lack health insurance coverage (17.3% compared with 9.2%) 5.     4.9%  of children aged 0–17 years, were uninsured, 41.9% had public coverage, and 54.6% had private health insurance coverage. 6.     The percentage uninsured decreased significantly for all age groups from 2013 through the first 9 months of 2017, ranging from –6.2 percentage points for ages 45–64 to –10.7 percentage points for ages 18–24. 7.     43.2% of persons under age 65 with private health insurance were enrolled in a high-deductible health plan (HDHP) compared to 39.4% in 2016 However, as a warning sign that 2018 may see slippage in these insurance coverage, the Minnesota Department of Health just issued an ominous press release, indicating that “last year Minnesota saw one of its largest, one-time increases in the rate of people without health insurance since 2001. The uninsured rate rose from 4.3 percent in 2015 to 6.3 percent, leaving approximately 349,000 Minnesotans without coverage.”

It's About Time

By Kim Bellard, February 16, 2018 Chances are, the sun isn't directly overhead for you when it is for me.  That's why for most of human existence time was a local matter. Nowadays, we have time zones that span the globe, and we have clocks so accurate that satellites have to take into account relativistic time-dilation effects. Technology made the change possible, and necessary.  Health care should learn from this. It used to be that local time was good enough.  The village clock served your purposes.  It was the railroads that made this impractical.  People wanted to know when trains would arrive, and when they'd leave.  More importantly, if they weren't coordinated, trains traveling in different directions might -- and did -- run into each other. We treat health care much like we used to treat time. That is, it is largely local.  How it is practiced in one community may not be how it is practiced in the next community, or even the next hospital or physician practice within a community. .  The care you get will depend on, of course, what is wrong with you, but also on which physician you see.  Very few dispute that there is significant variation in care, or that it is probably bigger than it should be.  But there's not much evidence that it is getting any less.  We accept these variations because, well, that's how it has always been.  We accept them because we think our personal situation is unique.  We accept them because we trust our local experts.    We accept them for all the same reasons we used to accept that time should be local. Technology has made it both necessary and possible that we move away from this attitude. It is necessary because the scope of the problem is clear.  As Propublica put it in a recent expose of unnecessary procedures: "Wasted spending isn’t hard to find once researchers — and reporters — look for it."  Almost twenty years ago the Institute of Medicine estimated as many as 98,000 hospital deaths annually due to medical errors.   More recently, medical errors have been estimated to be the third leading cause of death in the U.S.  Yes, moving away from "local" health care is necessary. The good news is that it is possible.  We have the technology to consult with physicians who don't happen to be local, such as through telemedicine.  It is possible to get the "best" doctor for our needs, not just the closest. We have artificial intelligence that can analyze all that data plus all those medical studies that no human can possibly keep up with.  It is possible to come up with the "right" recommendations for us.    We have to stop thinking of health care as local.  The information it is based on is not.  The people who are best able to apply that information to our situation may not be. If I get a driver's license, I don't have to get another one when I drive to another state.  If I get on a plane, the pilot doesn't have to have a pilot's license from each state he/she lands in, or flies over.  But if I want to use a doctor who is in a different state (or country), that doctor needs a license from my state.     We've always justified such licensing by states wanting to ensure the safety of their citizens, but drivers and pilots can put those citizens at risk too.  It's not really about risk; it's more about controlling competition.  There is irrefutable evidence that local health care is rarely what is going to be best.  It might not be bad care, but most likely it's only going to be average.  Maybe we're willing to settle for that.  I'm not. Time for a change. This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

AmazonBerkshireJP Healthcare: Think About Kaiser

By Clive Riddle, February 1, 2018 After Amazon, Berkshire Hathaway and JPMorgan Chase issued their press release this week regarding their employer based healthcare partnership, healthcare stock portfolios went into a tailspin and a lot of smart people have had something to say about what this venture might become. But where there is consensus is that what we do know is what we don’t know, as right know the venture is a dot to dot healthcare coloring book where no lines have been connected yet and we haven’t even been issued our crayons. The press release, while void of details, espouses technology solutions. Learned speculation surrounds their replacing PBMs, going whole hog into self-insurance, promoting telemedicine and much more. The New York Times quotes Segal Group’s Ed Kaplan: “Those are three big players, and I think if they get into health care insurance or the health care coverage space they are going to make a big impact.” Paul Demko in Politico writes that Amazon's new health care business could shake up industry after others have failed. But while citing some optimism, he also reports that ““ ‘We’ve seen these deals before,’ said Sam Glick, a partner in the health and life sciences division at Oliver Wyman. He cited Walmart and Intel as two companies that have sought to provide health care for employees while cutting out the insurance middleman. ‘It’s not news that jumbo employers are frustrated with escalating costs and lousy experiences in the health care system.’ “ A great tweet from Yale Health Economist Zach Cooper tells us "I do hope Amazon, JP Morgan, & Berkshire succeed. Health care is wildly inefficient However, it’s a bit like Mayo Clinic, Cleveland Clinic, and Partners Health coming out and saying they don’t like their computers so they’re going to form a new IT company." An Axios post by Sam Baker cautions “A new health care behemoth? Not so fast.” He reminds us “We don't know what they're even trying to do” and that “other big companies have tried something similar.” While like Sam Glick, we can point to less than stellar results from a number of other corporate forays into this arena, if we peek further back into time, we can also point to Kaiser, whom Sam Baker mentions in his post. Let’s take the wayback machine to 80 years ago: In 1933, Sidney Garfield MD establishes prepaid plan to fund care for his Contractors General Hospital and clinic providing care to workers on the Los Angeles Aqueduct. In 1938 Henry J Kaiser recruits Dr. Garfield to establish prepaid clinic and hospital care for his Grand Coulee Dam project in Washington. In 1942, at the request of Henry Kaiser, Dr. Garfield expands program to Kaiser-managed shipyards and Kaiser’s steel mill. In 1945, Permanente Health Plans opens to the public in California, in addition to serving Kaiser employees. Kaiser and their clinically integrated health care is often cited now as an example of a better system than much of the rest of American healthcare. Perhaps Amazon et al should take a long look at the Kaiser experience, and consider directly providing some levels of care enhanced by technology, instead of just relying on technology alone.

Everything in Healthcare Is Design

By Kim Bellard, January 27, 2018

I've been thinking a lot about health and communities lately. But I keep coming back to Dr. Bon Ku is doing at JeffDESIGN.

I am somewhat late to this game.  Dr. Ku co-founded JeffDESIGN three years ago, as a "college within a college".  Since then it has received local, regional, and national attention.  Dr. Ku has done a TEDx talk on their efforts.  So I'm not exactly breaking new ground here.

More importantly, though, they are.

Basically, the goal of JeffDESIGN is to teach medical students "to apply design thinking to solve healthcare challenges." As obvious as that might seem, they believe it is the first such program in a medical school.

Their Health Design Lab is located in a former bank vault.  It looks more like a start-up than a medical school classroom, full of configurable tables, computers, whiteboards, even 3D printers. 

Students get to take on actual problems in the healthcare system, develop solutions, prototype them, and perhaps see them put into use.  Dr. Pugliese told NextCity:  "These kids are all going to graduate as physicians, and they’re going to have a whole new language that nobody who’s ever graduated from a med school has had before."

That's pretty cool.

Dr. Ku is by training an ER physician, and his experiences there shaped his views of the broader forces impacting health.  And, remember, this program -- and, presumably, this point-of-view -- is unique among medical schools.  It shouldn't be.

We simply don't think enough about design in healthcare.  Not the right designs, for the right reasons.  In a a podcast for Knowledge@Wharton, Dr. Ku complained that:

We settle for design mediocrity, like I said. When we design hospitals, we should want to design the best and most beautiful building which happens to be a hospital, but instead, we design mediocre buildings.

He went so far as to say: "most of us don't realize that everything in health care is design."

Think about that:  Everything. In. Health.  Care. Is. Design.

The problem that JeffDESIGN has, through no fault of its own, is that even if all physicians were similarly trained, physicians can't change everything that needs to be redesigned (or, as some would say, actually designed) -- not in healthcare and certainly not in our society. The problems go much deeper.

Too many designers are designing only within their bubble, and no matter how well designed that bubble is, all-too-often they don't think enough about how their bubble overlaps with the others.  Our health is impacted by everything we touch and interact with, and many of those interactions are not designed with our health in mind.  

Design thinking in healthcare isn't about making the process of getting medical care easier, although it should do that too.  Design thinking in healthcare should be about making the process of being healthy easier.  That's a much taller order of magnitude, and that's what Steve Downs meant by wanting to build health into the "operating system" of our daily lives.  

Dr. Ku would agree: you don't have to be trained as a designer to use design thinking.  Dr. Ku boils it down: "I think at the core of human-centered design or design thinking is deep empathy for the end user.”

Certainly anyone working in or around healthcare should have that.

Patients aren't the end users.  People are.  Care is not the end result.  Health is.  Let's design for them and for that.  If you don't have that kind of empathy, maybe you should be doing something else.

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

Ten Large Objects on the Highway to Healthcare in 2018

By Clive Riddle, January 5, 2018

We find ourselves suddenly situated in 2018. How did that happen? Where did 2017 go, and for that matter, 2016 and its younger siblings? A Meat Loaf ballad once lyricized how Objects in the Rear View Mirror Appear Closer Than They Are. With apologies to AC/DC - on the highway to healthcare, here are ten large objects that demand our attention to stay focused on the road ahead and not in that fabled rear view mirror:

Merger Mania

In 2015 three health plan mega mergers were hatched, but only the Centene-HealthNet one made it out of the nest, and no other mega deals immediately followed suit. Will the late 2017 CVS-Aetna and hospital mergers such as CHI-Dignity signal more major activity in 2018, such as the rumored St. Joseph-Ascension merger? The answer should be a big yes for hospitals and other providers. In the health plan arena, look for additional players to pursue out of the box approaches such as CVS-Aetna (see below.)

CVS/Aetna and Multi-Level Integration

CVS will become a distribution center for applicable Aetna products. Aetna will become a distribution system for CVS products. CVS will further build upon its base retail clinics to become a direct care delivery system for Aetna. It’s a different kind of integrated delivery system than traditional hospital-medical group-health plan integrated systems, but integration it is, all the same, at multiple levels.

Amazon and the Decline of Retail Pharmacies

Especially coming off the holiday season, we read reports on the continuing rise of online shopping and decline of brick and mortar retail. Mail order pharmacy has been around for decades but has been focused on maintenance meds. Now that Amazon has mastered rapid on-demand delivery and has filed for pharmacy licenses in various states, and can deliver the other non-prescription products typically purchased at retail pharmacies – the rush is on. Major retail pharmacies will try mightily to enhance their own online offerings or partnerships.

Consumer Embrace of Technology

Private practice physicians aren’t so wild about the demands of EHR, and are skeptical at times about all things new bright and shiny, but numerous surveys indicate consumers are enthusiastic about the range of advances in healthcare technology that touch them. Consumers have plenty to be grumpy about in healthcare – but their embrace of technology will continue to drive demand for telehealth, e-visits, apps, portals, wearables, and new treatment options.

Searching For Value in Value Based Care

In the business of healthcare, we love to give birth to innovative approaches in healthcare delivery and payment arrangements, and after a honeymoon period, we tend to eat our own. Studies are published that indicate the new approach doesn’t deliver on results. A chorus of naysayers rises. And then we rightly or wrongly move on to something else. Health Affairs recently published a study concluding that Medicare ACO program savings were more the result of patient selection than care efficiencies. Other studies have begun to question various value based care arrangements. Given the growing popularity of value based care, and the intrinsic notion that the proposition makes sense, there is much at stake for value based stakeholders to continue to demonstrate the true value in their arrangements.

All Things Healthcare CyberSecurity

Hackers are as plentiful and resilient as crabgrass. Healthcare provides fertile hacking ground. The challenges in cybersecurity will grow larger, not smaller in 2018. More data breaches, and ransomware and other intrusions will occur and disrupt. A greater portion of healthcare resources will have to be deployed from every budget.

Deploying Social Determinants of Health

SDOH has been around for some time, but in 2018 it will be put into practice for population health initiatives by healthcare organizations and health plans on a significantly wider scale, driven by analytics and innovative new approaches.

Ho-Hum Impact of Trump Health Insurance Reforms

Moving insurance plans offerings across state lines and promoting association health plans won’t make much of a dent in the individual health insurance market in 2018. Don’t count on these initiatives to drive much business.

The Certainty of Uncertainty

Uncertainly was the word of the year in 2017 as the ACA teetered on a year-long tightrope. The tax reform individual mandate axe further muddies the water, as well as threatened Medicaid funding and more in 2018, but then there are the November 2018 elections, and who knows what that will bring.

Fulfilling the Promise of Analytics

SDOH is just one of a spectrum of initiatives that analytics is driving that wouldn’t have been feasible in their current form earlier this decade. Analytics is helping to shape solutions for the Opioid crisis, healthcare identify management, and interventions throughout population health, readmissions management, complex case management, to name a few. Serious analytics requires no small sum of resources and scale, but the returns are mounting and will bear even more fruit in 2018.

Recent Uber and Lyft Healthcare Transportation Collaborations

By Clive Riddle, December 1, 2017 

Yesterday (November 30th) Cigna-HealthSpring reported on its collaboration with Lyft for medical transportation of Medicare Advantage members. They stated that "more than 14,500 transports have occurred through this collaboration. Since its introduction in May, 92 percent of Cigna-HealthSpring customers using Lyft have made it their preferred transportation option, according to customer surveys. On average, participants are waiting less than eight minutes for Lyft to take them to or from their appointments." They explain that "the service is for ambulatory customers in non-emergencies only and is only available to Cigna-HealthSpring customers whose benefit plan includes supplemental non-emergent medical transportation coverage through Access2Care at no additional cost. Participants need to contact Access2Care to establish Lyft as their designated transportation provider." 

I decided to check out what other developments have occurred during the past month regarding Uber, Lyft and medical transportation collaborations. 

The AHA during November published a nice 27-page report in their Social Determinants of Health Series on Transportation and the Role of Hospitals. In their chart summarizing transportation strategies, they state that “When transportation is unavailable, health care systems may need to provide transportation directly to patients and staff,” and their recommendations include that hospitals “partner with ride-sharing companies like Uber or Lyft.” 

A November1st Catholic Health World article Ministry systems tackle transportation barriers for vulnerable patients, that included these four examples of Uber and Lyft healthcare transportation collaborations: 

• “St. Vincent Charity Medical Center in Cleveland launched a program in the spring to provide free transportation via the ride-sharing company Uber to patients undergoing addiction treatment in the hospital's Rosary Hall Intensive Outpatient Program.....Between June and September, 30 new clients logged 507 Uber rides, and 29 clients achieved 100 percent participation in the group and individual counseling sessions. In the 30 days before launch, Rosary Hall had 76 percent client participation in group sessions and 62 percent client participation in individual counseling sessions. “
• “Trinity Health of New England has pinpointed pickup and drop-off locations exclusively for Uber riders to and from its five hospital campuses in Connecticut and Massachusetts that can be selected on the Uber smartphone app so the driver knows exactly where to deliver or meet a patient. Uber rides also can be scheduled through each hospital's website....Trinity also uses Uber to transport select patients from its Mandell Center for Multiple Sclerosis in Hartford, Conn., for services at nearby Saint Francis Hospital and Medical Center.”
• “St. Louis-based Ascension was the first health care system to form a partnership with Lyft. Since February, Ascension has put agreements in place in 21 of its markets, and Lyft has provided more than 8,000 rides.....Ascension staff members use Lyft's concierge platform to schedule the rides.”
• “Broomfield, Colo.-based SCL Health announced last month that it is collaborating with Lyft to make nonemergency on-demand or scheduled transport available to its vulnerable patients living in the front range of the Rockies near Denver.”  

The Advisory Board Care Transformation Center Blog featured this post on November 28^th:  5 ways MedStar's nurse-inspired partnership with Uber has paid off, starting off by telling us “Since 2016, Uber has announced partnerships with MedStar Health, Hackensack University Medical Center, and Boston Children's Hospital. Lyft has announced partnerships with transportation service organizations National Medtrans Network and Logisticare, as well as BCBSA. Why have these organization, among others, turned away from more traditional van or cab service? We learned a bit more about MedStar's arrangement with Uber to try and figure it out.” They cite these key benefits of the Medstar/Uber partnership: Patient Transportation Service is now faster; Service is more reliable; Service is less expensive; Clinic staff workflow is more manageable; and Analytics on MedStar transportation support offer new opportunities. 

But there are concerns patients are beginning to use Uber and Lyft in emergent situations. The CBS affiliate in Cincinnati reported on November 9th on The "Uberlance" trend: People turn to Uber to offset high hospital transportation costs.  They tell us that “the new trend is forcing Uber drivers to act as first responders. The drivers asked to not have their identities revealed, but they still wanted to tell their stories of what is now being referred to as ‘Uberlance.’ ‘I said to him ‘why didn't you call an ambulance?’ His hand was bleeding. He goes ‘because you're quicker and you're cheaper,’ said ‘Johnny’, an Uber driver. ‘I've had people get in my car, they're dizzy, they don't feel well, their chest hurts,’ said ‘Brian’, an Uber driver. Drivers say passengers opt for Uber over an ambulance for speed and cost.” 

Despite these concerns of patients taking matters in their own hands and using Uber or Lyft to avoid dispatching an ambulance, some EMS, healthcare and health plan organizations are proactively pursuing such arrangements for urgent care visits to avoid use of ambulances in non-emergencies.  The San Diego Union Tribune on November 5^th ran the story San Diego exploring new emergency response model amid ambulance crisis, stating that EMS officials there were seeking “an alternative model where non-emergency patients could take a taxi or Uber to a clinic or urgent care facility and get reimbursed by private insurers, Medicare or Medi-Cal.” The article cites that “Anthem Health Insurance recently announced it will start covering such alternative modes of transportation in 2018.”

CVS, Aetna, Retail Integrated Delivery Systems and the Strange World of Frenemies

by Clive Riddle, October 27, 2017

As widely reported, including in the Wall Street Journal, CVS is making a very serious bid to acquire Aetna for more than $200 a share, equating to $66 billion. The most often cited drivers behind this deal include:

• CVS’s strategic response to Amazon’s potential entry into the pharmacy business
• CVS strategic response seeking growth outside core business, after antitrust regulators rejected Walgreens/Rite Aid merger
• Aetna strategic response seeking growth outside core business after antitrust regulators rejected Aetna/Human and Anthem/Cigna mergers
• Aetna would serve as significant source of members for CVS PBM division, customers for CVS pharmacies and patients for Minute Clinics
• CVS and Aetna’s strategic response to competitors aligning health plans and PBMs such as UnitedHealth acquisition of Catamaran

Much attention has been given to initiatives for integrated delivery systems between hospitals and medical groups that take on purchaser functions. Does this signal a different focus – on retail integrated instead of clinically integrated systems - bringing together pharmacies, retail clinics, health care coverage, wellness services, patient engagement and care coordination?

But Wall Street experts remind us that doesn’t mean this deal is a sure thing.  Things could fall apart simply due to details in the financial terms, or because of new changes in direction by competitors or in the overall market. The Street quotes Jeremy Bryan, a portfolio manager at Gradient Investments, a minor CVS shareholder: "There's just no case study for this. There could be regulatory hurdles. But we have cautious optimism." The Wall Street Journal states “The deal almost surely would attract close scrutiny from U.S. antitrust enforcers who have expressed concern about health-care consolidation.”

Assuming however there is a clear path forward for CVS and Aetna, the question remains for them what lies in wait for them down the road? A few potential concerns include:

• Would the deal jeopardize the recently announced Anthem/CVS relationship whereby CVS will service Anthem’s new PBM?
• Would the deal drive other competing health plans away from the CVS PBM and pharmacies?
• What if CVS is counting on Aetna becoming a more significant force in Medicare Advantage to drive CVS PDP business, and Aetna fails to deliver?
• What if the Trump Administration and Republican Congress succeed in further scaling back Medicaid, causing Aetna’s significant investment in Medicaid business to erode and become a drag on CVS overall performance?
• What if Aetna focuses its pharmacy and retail clinic network offerings on CVS locations, and loses market share to competitor plans with broader offerings?

On the other hand, maybe the deal wouldn’t cause competitors to blow up relationships with CVS or Aetna. The Washington Post quotes Adam Fein, president of Pembroke Consulting: “This is part of the strange world of the health insurance and PBM industry. Many companies are frenemies.”

Employer Surveys Project 2018 Cost Increases in the Five Percent Range

by Clive Riddle, August 11, 2017 The National Business Group on Health has released results from their Large Employers’ 2018 Health Care Strategy and Plan Design Survey, which projects the total employer cost of providing medical and pharmacy benefits to rise 5% for the fifth consecutive year in 2018. The total cost of health care is estimated to be $13,482 per employee in 2017, and is projected to increase to $14,156 in 2018, with employers funding 70% of these costs. What is driving cost increases? The most often listed top driver was specialty pharmacy (26%) and 80% of employers ranked this among the top three cost drivers. Similarly, last week Willis Towers Watson released preliminary findings from their 22nd annual Best Practices in Health Care Employer Survey, which found that "Employers expect health care costs to increase by 5.5%* in 2018, up from a 4.6% increase in 2017." The NBGH 2018 survey also produced this grab-bag of interesting employer survey responses regarding health benefit strategies, regarding telehealth, onsite care, value based care, and CDHP: ·         96% will make telehealth services available in states where it is allowed next year ·         56% plan to offer telehealth for behavioral health services ·         20% of employers are experiencing employee telehealth utilization rates of 8% or higher ·         21%s plan to promote ACOs in 2018, and another 26% are considering offering them        ·         54% will offer onsite or near site health centers in 2018         ·         88% expect to use Centers of Excellence in 2018 for certain procedures         ·         40% of employers have incorporated some type of value-based benefit design ·         18% will use value-based benefit design to steer employees toward telehealth in 2018 (16% in 2017) ·         66% of companies will offer medical decision support and second opinion services in 2018 ·         90% will offer at least one Consumer Directed Health Plan (CDHP) in 2018. ·         40% of employers will offer a CDHP as the only plan option in 2018, compared with 35% this year ·         28% pair a HDHP with a Health Reimbursement Arrangement

Health Care's Kodak Moment

by Kim Bellard, July 26, 2017

For those of us of a certain age, a "Kodak moment" connotes a special event that should be captured by a photo.  For younger generations, the term probably doesn't mean anything, because they don't know what Kodak is.  That's why, for some, "Kodak moment" has come to suggest a turning point when big companies and even entire industries can become obsolete. 

Health care could soon be at such a point.

Anthony Jenkins, a former CEO of Barclay's, recently warned that banks could face a Kodak moment soon.  He said they're already seeing a "Uber-moment," where smartphones and contractless cards are transforming the industry.  "The Kodak moment is completely different," Mr. Jenkins explained.  "That’s where customers realize there’s a totally better and different way of doing what they want to do, and the incumbent becomes obsolete."

In a separate speech, Mr. Jenkins elaborated that, due to new technologies, "we can imagine total transformation of the banking system."  He predicted banks have 5 to 15 years to face these challenges, or become irrelevant to their customers.

The "good" news, he added, is that: "Banks can avoid that, but they have to act now, and what they really need to do is think about innovation, but also transformation, doing something radically different."

For "bank" or "banking system" feel free to substitute "doctor/hospital" or "health care system"

Incumbents all-too-often grow protective and/or fail to take advantage of new opportunities.  The irony of disruption, Mr. Jenkins noted, is that it is "actually a great growth opportunity," and that "incumbents are best positioned to seize disruptive opportunities."  

Health care has a number of legacy problems that make it ripe for disruption.  Innovators look at these problems and see opportunities.

The opportunities -- or, threats, depending on one's point-of-view -- on health care's horizon are numerous.  They include:

• Digital health makes real-time information and communication feasible, such as with wearables and telehealth.
• Big Data will help us finally understand what is happening with patients and predict with better accuracy how we can manage our health.
• Robots will take over health care tasks/jobs that humans either don't want to do or lack the required precision to do.
• Artificial intelligence (AI) will be able to make sense of all that Big Data and all the various research studies, and can serve to either augment or, at least in some cases, replace physicians.
• 3D printing will allow us to replace an ever-increasing number of body parts, even systems, and do so with unprecedented speed and affordable cost.
• Nanotechnology will allow us to monitor and maintain us down to a cellular level.

Meanwhile, traditional health care companies -- from providers to middlemen to manufacturers to insurers -- are waiting with some trepidation to see what 21st century behemoths like Amazon or Apple are going to do in their space.  

Disruption might come from innovators within the health care industry, but it might also come from unexpected sources -- and in unexpected ways.  Kodak didn't take digital photography seriously enough, and it certainly wasn't expecting smartphones as the new camera.  

Health should have a number of the old-fashioned Kodak moments -- the birth of a child, a miraculous recovery, achievement of a health goal, and so on.  Whether health care organizations or even the entire health care system suffer the other kind of Kodak moment depends on how (and when) they respond to the disruptive opportunities now available to them.  

Healthcare 2017 Viewed Through Brokers’ Lens

by Clive Riddle, July 7, 2017

With the onset of the ACA at the start of this decade, if one asked how brokers would view the world of healthcare seven years later, some would have answered “who cares – they will become irrelevant.” But flash forward to 2017 and here they are, continuing to play the role they have always played, even though the landscape has certainly shifted. Despite disintermediation, public exchanges, technology and a host of other challenges, brokers remain at bat, swinging away.

BenefitsPRO has just released they annual broker survey, with responses from 350 brokers representing the spectrum of industry sectors. One might have thought brokers of all people, would firmly be in the camp of ACA repeal, 50% “would like to see the ACA retained and repaired, while 28 percent prefer a gradual repeal and replace, and 22 percent want it repealed and replaced immediately.”

One insight is that brokers business has evolved so that the public exchange market isn’t a material part of their business. When asked, “how have state exchanges’ struggles impacted your business,” 48% said there was no effect, 35% replied it hurt a little or significantly, and 17% said it helped a little or significantly.” The individual market has gravitated away from brokers, with 34% not involved, 37% reporting minimal demand, and less than ten percent stating “enrolling individuals on the public exchange is worth the effort.” Private exchanges aren’t a dominant force at this point, as “nearly 6 in 10 of those responding say they do not have a private exchange partner for enrollment and benefits administration.”

While technology has facilitated some disintermediation, brokers continue to attempt to enhance their value offering a personal touch that online tools can’t offer. The survey report noted that 53 “percent of respondents say meeting in a group setting at the worksite is the primary enrollment technique, while 36 percent cited one-on-one meetings in the workplace. However, 39 percent say their top method is using an electronic enrollment tool independently.”

But losses of individual and other health insurance market share have been offset by growth in the voluntary benefit sector, with 57% identifying with the statement that “they will use voluntary benefits to offset anticipated commission losses from health insurance this year.”

Looking toward the future, consolidation looms large, just as in all other healthcare sectors, as “27% expect their organization to acquire or merge with another broker/agent organization,” while 14% “ look for another broker/agent to acquire their organization” and “14% also say their company will leave the health insurance brokerage business.”

Brokers focus for the future includes 84% “promoting ancillary insurance coverage,” 58% “promoting health plan consumer engagement and health and wellness programs,” 43% “promoting third-party consumer engagement and health and wellness programs, while 53% will be concerned about the threat of “the new wave of disruptive companies entering the industry.” A particular innovation they are concerned with is payroll companies with direct benefits distribution, with 57% viewing this a concerning.

Top Challenges Facing Healthcare Executives

By Claire Thayer, June 29, 2017

Complying with government requirements and mandates continues to be one of the top challenges healthcare executives face along with health insurance affordability. Healthcare providers rank quality and patient safety outcomes, electronic health records,  privacy and cybersecurity as top priorities for their organizations.

This weeks’ edition of the MCOL Infographic, co-sponsored by LexisNexis, offers highlights of these and other pressing concerns for healthcare executives today:

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.

Health Care Goes to the Mall

by Kim Bellard, June 29, 2017 It's either auspicious or ironic: decades after other retail industries, health care is coming to the mall. These are not, generally, good days for the malls.  We've all seen strip malls that were never finished or that have simply fallen on hard times, but in recent years those stalwarts of American shopping -- enclosed malls -- are sharing that fate.  Credit Suisse says that 20-25% of the 1,100 U.S. malls will close over the next five years. The Wall Street Journal predicts that "the mall of the future will have no stores."   They cite malls filling empty spaces with churches, schools, even offices or apartments.  E.g., Ford is leasing 240,000 square feet at a suburban Detroit mall for new offices. The New York Times had a similar report on the changes to malls.  As one developer told them, "Dining and entertainment is the new anchor — not Sears, not Macy’s."   One thing that many agree upon: malls of the future will include: health care. Another Wall Street Journal article focused specifically on health care moving to malls, and included several examples: ·         Dana-Farber Cancer Institute has leased 140,000 square feet of a 286,000 square foot Boston-area mall, which also has several other health and wellness tenants. ·         The Maury Regional Cancer Center has been in the Columbia Mall (Columbia, TN) since 2012. ·         The Biggs Part Mall in Lumberton NC has Southeastern Regional Medical Center as a key tenant. ·         UCLA Health operates primary care centers in the Village at Westfield Topanga. ·         Vanderbilt Health has been part of the One Hundred Oaks mall in Nashville TN since 2009. Other examples include Cedar Sinai (The Runway at Playa Vista -- LA) and Prime Healthcare (Plymouth Meeting -- Philadelphia), according to Bloomberg.   Johns Hopkins Medical President Gill Wylie told Bisnow that he watches retail vacancies for opportunities: "We do urgent care and primary care.  So I'm sitting there thinking, 'Gee if all these Staples end up closing, there might be space out there.'"  They've already snapped up four former Blockbuster locations for urgent care facilities.   Mr. Wylie said he also pays attention to big department stores and malls, citing their infrastructure, parking, and ADA compliance as givens.   Fady Barmada, of Array Advisors, led the conversion of New York City McDonald's to an urgent care center, and noted that: "Health systems know that, by co-locating themselves with well-used and well-attended retail facilities, they can increase the visibility of their facilities and become platforms for the creation of unique and interesting programs." But moving to retail locations won't, in itself, make health care organizations more patient-centered.  To do that, they'll have to make the patient experience easier (if not always enjoyable), give them clear choices, and truly treat them like valued customers. Moving is easy.  Changing is hard.   This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

A Dozen Takeaways From PwC’s Medical Cost Trend: Behind the Numbers 2018 Report

By Clive Riddle, June 16, 2017 PwC’s Health Research Institute has released Medical Cost Trend: Behind the Numbers 2018, their twelfth annual report projecting the growth of private sector medical costs in the coming year and identifying the leading trend drivers. The findings are largely based upon PwC’s annual Health & Well-being Touchstone Survey results, which draws from responses of 780 employers from 37 industries, and have also just been released. Here’s a dozen takeaways from this year’s 32 page Behind the Numbers report, and 114 page Touchstone Survey report: 1.       PwC’s HRI projects a 6.5 percent growth rate for next year, a half percentage point increase from the estimated 2017 rate.   2.       This growth rates steadily decreased from 11.9% in 2007 to 6.5% in 2014, and has fluctuated slighly above or below that figure since then   3.       PwCs provides this definition of their projected medical cost trend: the “increase in per capita costs of medical services that affect commercial insurers and large, self-insured businesses. Insurance companies use the projection to calculate health plan premiums for the coming year.”   4.       PwC's HRI has identified three major inflators expected to impact medical cost trend in the coming year: (A) Rising general inflation impacts healthcare. As the U.S. economy heats up, a rise in general inflation during 2016 and 2017 will likely put upward pressure on wages, medical prices and overall cost trend in 2018; (B) Movement to high-deductible health plans is losing steam. The wave of growth in high-deductible health plans, employers' go-to strategy in recent years to curb health spending, may be plateauing; and  (C) Fewer branded drugs are coming off patent. Employers may have less opportunity to encourage employees to buy cost-saving generics in 2018.   5.       PwC's HRI has identified two major deflators expected to impact medical cost trend in the coming year: (A) Political and public scrutiny puts pressure on drug companies. Heightened political and public attention could encourage drug companies to moderate price increases; and (B) Employers are targeting the right people with the right treatments to minimize waste. They are doubling down on tactics such as prescription quantity limits and exploring new technologies such as artificial intelligence to match people with the best treatment.   6.       The report also cites these healthcare drivers affecting the 2018 cost trend:  Technology and treatment innovation: Provider and Plan Consolidation; Government regulation; and Evolving Payment models.   7.       The report allocated these proportions of costs by component for 2018: Pharmacy 18%; Inpatient 30%; Outpatient 19%; Physician 29%; Other 4%   8.       The Touchstone Survey cites that “Medical plan costs have continued to increase, but employers expect that the rate of increase will start to slow. Plan design changes contributed towards slightly lower-than-expected increases in 2016;” and that “the average increase in 2016 was 6.8% before plan design changes and 3.6% after plan design changes. In 2017, participants expect to see a 6.0% increase before plan design changes and a 3.2% increase after plan design changes.”   9.       The Touchstone Survey notes that “participants appear to be in a "wait and see" mode – rather than considering broader and more transformational changes, they continue to use traditional cost-shifting approaches to control health spend;” and that “57% of participants expect to continue to increase employee contributions in the next three years, while 38% (29% for Rx) plan to increase employee cost-sharing through plan design changes.”   10.   The Touchstone Survey finds that “participants are increasing contributions in the form of surcharges for spouse, domestic partner and dependent coverage. This may be contributing towards a decrease in enrolled family size and slowing the rise in net employer spend.”   11.   The Touchstone Survey also finds that “participants are utilizing High Deductible Health Plans (HDHPs) more and Preferred Provider Organizations (PPOs) less, although PPOs remain more popular among employees. PPOs are the highest-enrolled plan 44% of the time, compared to 46% in 2016 and 60% in 2009. HDHPs are the highest-enrolled plan 34% of the time, up from 32% in 2016 and 8% in 2009.”   12.   The Touchtone Survey found that employer interest in population health is strong but private exchange interest is waning. They report that “79% offer wellness programs compared to 76% in 2016, and 63% offer DM programs compared to 56% in 2016;” while  “8% of participants are considering moving their active employees to a private exchange; 2% have already done so. Interest seems to have dropped off as the discussions on public exchanges and ACA have increased. However, 36% of participants who offer retiree medical coverage are considering moving pre-65 retirees to a private or public exchange.”

Rise of the Drones

By Kim Bellard, May 24, 2017

For those of us of a certain age, we expected to be living in a Jetsons-type world, complete with flying cars.  That hasn't happened, but it is starting to appear as though the skies may, indeed, soon be full of flying vehicles.  It's just that they may not have people in them. 

Welcome to the brave new world of drones.

Many people may have viewed drones as a toy akin to radio-controlled airplanes. We're beyond that now.  Last summer PwC asked "Are commercial drones ready for take-off?"  They thought so, estimating the total available market for drone-enabled services at $127b

This is not going to all be about getting your books, or your socks, or even your new HD television faster.  It is going to impact many industries -- including health care.

And that impact has already started to happen.

Zipline International, for example, is already delivering medical supplies by drone in Rwanda.  They deliver directly to isolated clinics despite any intervening "challenging terrain and gaps in infrastructure."  They plan to limit themselves to medical supplies, but not only in developing countries; they see rural areas in the U.S. as potential opportunities as well.  Last fall they raised $25 million in Series B funding.  

Drones are also being considered for medical supply delivery in Guyana, Haiti, and the Philippines.   

And drone delivery is already being tested in more urban areas.  The Verge reported that Swiss Post, its national postal service, is working with two hospitals in Lugano to ferry lab samples between them. 

Similarly, Johns Hopkins has been testing drone transport of blood supplies, concluding that it is "an effective, safe, and timely way to get blood products to remote accident or natural catastrophe sites, or other time-sensitive destinations."

Airbus is developing the A-180 drone specifically to deliver medical supplies, especially for emergencies.  Its cargo capsule is "capable of transporting everything from medicine and antivenin to supplemental blood and even organs." A company called Otherlab is going a different direction.  Wired reports that their drone will deliver its package -- then decompose, making it ideal for deliveries to humanitarian crises (or to battle sites, since Darpa helped fund them).  

Lest we focus too narrowly on the concept of drones delivering medical supplies, argodesign has proposed a flying ambulance, which could be operated as a drone or by a pilot.  If you've ever seen ambulances stuck in traffic and felt sorry for the patients relying on them, such ambulances could be the solution -- arriving faster and to locations regular ambulances could not reach.  

But for real impact, let's go back to Amazon.  CNBC's Christina Farr broke the news last week that Amazon was considering getting into the pharmacy business. Put rapid delivery -- especially with drones -- together with lower and more transparent prices, and it is no wonder that the stocks of CVS and Walgreens took a hit when the news broke about Amazon's new interest.

Health care has been all-too-much a story of waiting.  That's quickly changing, with telemedicine, WebMD, retail clinics, and -- soon -- 3D printing and health care robots.  We can add health care drones to the list, allowing 30-minutes-or-less kinds of promises that we haven't even begun to tease out yet.

Bring on the drones!

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