Dec
13

Optum employs(?) more doctors than any other organization

The giant subsidiary of United Healthcare employs [>]90,000 MDs and 40,000 more advanced practice clinicians – far more than any other entity.

That’s more than one out of every ten physicians, and a far higher percentage of practicing MDs.

While that’s pretty amazing, its just one of the many investors, healthplans, private equity firms, large healthcare systems, and insurers snapping up all manner of healthcare providers.

In fact, almost three-quarters of all physicians are employees of companies or healthcare systems/hospitals – not members of physician-owned practices.

As with everything in healthcare, location makes a big difference.

One of the biggest drivers has been Optum’s acquisitions, which included Kelsey Seybold, a very large practice in Texas…Optum reportedly paid $2.2 billion for the business.  And, that happened AFTER the time period in the graph.

What does this mean for you?

Your healthcare will be driven by investors’ goals.

note – Optum’s communications folks asked me to publish a correction, because not all of the 90k docs are “employees”…I asked how many of those 90k docs are “employees”; Optum’s reply was “We don’t break out the numbers because we focus on the total number who serve our risk-based patients.”

I’m quite sure Optum knows the number. why they won’t release it is a mystery.

I also asked – twice – whether the “physicians who contract directly with Optum” (which make up some/part of the 90k docs):

  • exclusively contract with Optum,
  • are allowed to contract directly with other payers, and/or
  • is Optum the contracting intermediary?.

I didn’t get an answer.

So, all I can tell you, dear reader, is Optum directly employs ≤ 89,999 physicians, and may or may not allow those “non-employed” physicians to contract with other payers.


Nov
13

The worst job ever.

Has to be nursing in a health system or hospital.

There’s bullying of young nurses by “more senior” nurses…

Management dismissing nurses’ complaints about sexual harassment, groping, violence and abuse.

Awful hours,

Having to ask if you can go to the bathroom

Seemingly endless shifts

Forced overtime

Working next to – and training – a travel nurse with half your experience who makes twice what you do.

And lest we forget, dying in droves during the early days of COVID.

Here in the Upper Valley in New Hampshire, I recall signs and posters and cheering for nurses and other staff in the early days of COVID.

This lasted about 2 months…followed by COVID deniers using, screaming at, hitting, and abusing nurses.

From heroes to scapegoats, the fall was catastrophic and all too real. This wasn’t unique to northern New England.

Several family members lived through this hellscape, and it isn’t getting any better.

The net is this – our healthcare system is collapsing and the very people who are desperately trying to keep it – and us – functioning are being served poorly by management.

What does this mean for you?

Thank every nurse you know, see, meet, or encounter. They really, really need and serve it.

And call out those – including management – that don’t acknowledge, protect and respect nurses.

note – this very likely applies to many if not all those who work in healthcare facilities…I limited it to nurses because I have first-hand knowledge of their plight.

 


Sep
14

Yelling into the void

I attended a New England Journal of Medicine webinar on value-based care yesterday…net is I heard a lot about “patient centric” care, “patient experience” and quality but precious little about functionality and patient-specific or patient-desired “outcomes.”

Except for a few tangential mentions by the Optum Medical Director, what patients actually want was not addressed at all.

This is a big miss.

Like so many other failing industries, healthcare is completely missing the point – which is delivering what the consumer wants. “Patient experience” is mostly was the office clean, the nurse nice, the floor quiet.

We are ignoring this at our peril…we are not asking what patients actually want from healthcare; NOT the processes and functions noted by one of the panelists but how patients define “healthy”, what they want to be able to do, what functionality is important to them, how they want to live their lives.

Healthcare is provider and process centric;  the entire industry has failed to address what consumers and employers want from healthcare.

Here’s hoping that healthcare figures this out faster than Detroit did.

What does this mean for you?

Healthplans and healthcare providers that figure this out will kick butt.

 


Jun
7

Work comp provider networks and access to care

Of late there’s been “confusion” in several quarters about the impact of provider networks/PPOs/specialty networks on access to care and outcomes.

These uninformed or willfully ignorant folks claim all manner of bad stuff is due to workers’ comp provider networks – without an iota of evidence to support those assertions.

Let’s pick on the Golden State…

Let’s be clear…actual research shows:

there is NO significant difference in access to care for patients treated within or outside a Medical Provider Network.

This from CWCI’s report

Similarly, there was no significant difference in distance from the patient to provider between MPN and non-MPN patients.

Quoting CWCI…

The latest proximity to care findings also track with results of CWCI’s April 2021 research which found that 99 percent of claims in which treatment was rendered by an MPN provider, and 98 percent of non-MPN claims met the state’s access standards.

What does this mean for you?

Do NOT give any credence to statements similar to: “of course, paying providers less than fee schedule affects access to care” UNLESS they are backed up by real research and not built on a pile of unfounded and unsupported assumptions.


Jun
1

that giant sucking sound…v3

is hospitals hoovering dollars out of employers, work comp insurers, and taxpayers’ wallets.

(sorry all…due to a bug in WordPress some of you may be getting this again)

WCRI’s latest research report on hospital costs is a must-read for anyone involved in work comp claims, medical management and actuarial issues. Kudos to Drs Olesya Fomenko and Rebecca Yang for their excellent work. 

The study focuses mostly on how payments for outpatient surgery vary across the different types of fee schedules (no fee schedule vs fixed amount vs cost to charge ratio vs percent of charges…)…and how those payments have changed over time.

But there are several other issues that I’d argue are more impactful.

  • It’s not so much the type of fee schedule as other factors…
    • there’s a LOT of variation between states with the same type of FS
    • failing to expand Medicaid is a big problem for hospitals
  • Basing fee schedules on percent of charges is a really bad idea…
    • states with %-of-charges FS had – by FAR – the highest costs, averaging more than 3 times what Medicare pays. (Medicare reimbursement is slightly above break-even for hospitals)
    • `hospitals easily game the “fee schedule” by jacking up list prices
    • 2 of the three states with the largest increases in hospital payments had FS based on %-of-charges
  •  States with NO fee schedules were not quite as bad – averaging “only” 225% of Medicare
  • Clearly network arrangements have failed miserably. 

What does this mean for you?

Actuaries…check the inflation trend to predict where costs will be in the future

Medical management folks…dig into your data to identify the worst offenders, and direct care AWAY from them.  Hint – HCA facilities are usually among the worse offenders.

Bill reviewers – STOP relying on network discounts and start getting  LOT smarter about dealing with facilities.


May
31

More hospitals are going to close

More than a quarter of rural hospitals in Texas, Kansas, Mississippi, Alabama, Georgia, South Carolina and Tennessee are at immediate risk of closing. 

Notably these are all states that have refused to expand Medicaid and therefore have a lot of people without health insurance.

The problem is exacerbated by the end of the Public Health Emergency which means more people without health insurance will be seeking care at hospitals at imminent risk of closing. 

Check out your state’s situation here

What does this mean for you?

If you live in the rural south, stay healthy, don’t have an accident, and don’t get pregnant.


May
26

US healthcare quality is poor because…

Consumers don’t care.

Yesterday we dove into the disconnect between patient satisfaction (my nurse was sooo nice and my room…wow!) and quality of care (how likely was I to die).

Today, we focus on how this affects our healthcare. Or, as the researchers put it;

In an era of management by satisfaction survey, how does hospital competition shape the kind of medical services offered to patients? 

Leaving out the coefficients, standardized deviations, null estimates and other researchers’ esoterica, we find:

Local competition among hospitals leads to higher patient satisfaction, but lower medical quality. 

Yep, because we consumers value quiet rooms and nice nurses more than surviving an operation, health care facilities seem to focus more on quietness and niceness than on, you know, patients actually surviving.

And that’s because hospitals are competing desperately for private-pay patients, the ones insured by employers that pay three times more than Medicare. As the authors put it;

as a business strategy, investing in hospitality and hotel amenities offers a much higher return than medical quality. 

this research speaks to broad concerns about the unintended consequences of marketization…Hospitals have traditionally been conceived as an essential service to a community, but are becoming more like products in a consumer marketplace.

Those working in hospitals are increasingly expected to focus on the pursuit of customer satisfaction.

The day-to-day institutional question is shifting from “will this improve patient health?” to “will this raise satisfaction scores?” 

What does this mean for you?

Depends… life > comfort?


May
25

Patient satisfaction ≠ Quality of care

Health care quality is a huge issue in the US; despite claims that we have the best healthcare in the world, reality is far different.

Why?  I’d argue its because healthcare consumer behavior drives our for-profit system.

What makes patients happy is completely unrelated to the actual quality of medical care they receive – or how likely they are to die.

Research article is here.

the horizontal axis indicates hospital performance by deciles for each category…note patient satisfaction doesn’t vary by hospital mortality and varies just a little by medical quality, but varies a LOT by nurse communication.

The effect of nurse communication on patient satisfaction is four times larger than the effect of the hospital’s mortality rate. Yup, as long as the nurse smiles, is responsive and nice, we’re satisfied. Never mind if we’re a lot more likely to die.

Another oft-measured factor, the quietness of the rooms, has a 40% larger effect on patient satisfaction than medical quality.

This is because hospitals provide two separate and distinct kinds of services  – the technical delivery of medical care and “room and board-related” services. Patients are much better at observing and rating the “hospitality” part of their hospital stay than the medical care they get.

To quote the authors;

Hospitality is the fast track to customer satisfaction in medicine. 

What does this mean for you?

Customer satisfaction is the fast track to profits… not to good medical care.


May
23

Work comp drugs – Three things

Workers’ comp news…

After a long and litigious delay, myMatrixx has been awarded the contract to manage pharmacy benefits for the Coal and Energy programs run by the Federal Department of Labor’s Office of Workers’ Compensation Programs (OWCP). Details of the case – which involved a protest by rival PBM Optum – are here.

That’s the good news (the Feds should have had a PBM managing these programs years ago).

Now, the bad news.

The press continues to dive into the audit of the other OWCP program – the one that provides workers’ comp to all Federal employees (FECA). [audit report is free for download here]

The latest is from Leslie Small of AIS Health. [available at no cost via free trial subscription].

From Ms. Small’s piece:

  • “OWCP has been doing a poor job of both controlling the FECA programs spending on prescription drugs and implementing its own policies to ensure that prescriptions are being appropriately dispensed, said the OIG report.”
  • OWCP published a bulletin in 2011 that forbid reimbursement for fast-acting fentanyl prescriptions unless claimants had been diagnosed with a certain type of cancer…during the audit period…98.7% of the fast-acting fentanyl scripts that OWCP [and taxpayers] paid for “went to claimants without evidence of one of hte eligible cancer diagnoses” 
  • Even more troubling – if that’s possible – OWCP did not institute controls to mitigate opioid usage until the end of 2016, years after many commercial insurers, third-rate administrators, and large employees had done so…”

Here’s hoping this much-needed attention results in even-more-needed improvements.(my opinion only)

Drug costs in California are getting well deserved attention again; CWCI’s research identified 9 drugs – 3 each opioids, dermatologicals and antidepressants – that account for a significant percentage of total drug spend. CWCI members can get the full report at no cost; it’s $18 for others.

Briefly, branded anti-depressants, tapentadol/Nucynta, and the three anti-depressants make up a small percentage of scripts but a big percentage of dollars.

Of course, in the vast majority of cases the dermos are just BS drugs that should never be allowed…

What does this mean for you?

Don’t sleep on pharmacy...sure costs are down, but it still has a major influence on recovery, RTW, and claim closure.


Apr
18

Private Equity healthcare investment in 2022

Private Equity healthcare investment declined sharply last year as the average deal’s value and the number of transactions both fell off.

Firms invested over $45 billion in 167 US healthcare deals last year – a pretty massive decrease from 2021’s 216 deals for $107.5 billion.

While 2022 started off quite strong, deal volume halved in the second half of 2022 due to interest rate hikes, tighter credit, economic concerns and Putin’s War.

Those are the headlines from Bain & Company’s Global Healthcare Private Equity and M&A report 2023 (download for free here.)

note – I have worked with Bain entities in the past, respect the firm and the Bain people I’ve worked with. I am not currently working with Bain.

key highlights…

  • Provider sector deals accounted for about half of all transactions and dollars invested…but slowed dramatically to 7 transactions in Q4 2022
  • IPOs pretty much disappeared in 2022 (initial public offerings, when a private company goes public)
  • Value-based care and primary care were a big focus of strategic buyers…
    • Optum bought several provider groups
    • Amazon acquired One Medical
    • Humana and Welsh Carson did a joint venture, investing in a value-based primary care company.

There’s a lot on value-based care…although there’s precious little evidence that it is a panacea, investors are still betting billions …From the report:

For more than a decade, value-based care (VBC) has been positioned as healthcare’s “next big thing.” And while progress has been uneven 

The number of accountable care organizations (ACOs) plateaued at around 1,000 in recent years, while 15 of the 53 entities participating in CMS’s direct contracting program in 2021 experienced net savings losses. 

Value-based care stakeholders are doubling down on their commitment as healthcare spending outpaces GDP growth and CMS leans further into VBC models. 

What does this mean for you?

Expect PE investors to remain quite cautious until interest rates stabilize, the debt ceiling is raised (or much, much better – eliminated) and inflation trends level out.

Warning – if House Republicans don’t raise or eliminate the debt ceiling there will be hell to pay. 

Register for Bain’s webinar on the report here.