Jul
13

Friday catch-up – Hospitals and a BS alert

Glorious week here in New York’s Finger Lakes – high 70s, lots of sun, nice breeze.  I know, Florida friends, you’ll be gloating in February when it’s 10 below and snowing sideways…

Hospitals

NCCI’s just-released research indicates facility costs are rising, driven at least in part by less competition among hospitals. Key takeaway:

Reductions in hospital operating costs do not translate into price decreases. Research to date shows that hospital mergers increase the average price of hospital services by 6%−18%.

Kudos to NCCI for this research and the piece itself. The article is very well-written, concise, and understandable for us laypersons. NCCI has upped its game considerably of late, producing excellent work and explaining what their findings and implications thereof.

I’m going to focus on this in a post next week – there’s a ton of insights here that demand careful consideration from payers and employers.

For those looking to better understand how hospitals set prices, determine what their actual costs are, and how they use data to reduce costs while improving care, read this piece in HealthAffairs.

And there’s this – a hospital in the Cayman Islands is delivering excellent care at a fraction of the cost of US facilities. The facility is fully accredited, provides a simple, bundled price for each procedure (instead of bills for each doctor, facility fee, procedure, implant…) and will be a very attractive option for many Americans with specific health needs.

Medicaid

My bullshit detector went nuts when a press release hit the inbox this week.

In what has to be one of the crappiest, most distorted, unscientific and biased pieces of “research” ever done, a so-called “non-partisan” entity calling itself one of the nation’s “leading public policy organizations” claims:

in some states, up to 70% of able-bodied adults enrolled in Obamacare expansion earned $0 in income

I’m going to dig into this steaming pile of nonsense next week, but for now, know that this is flat out wrong.  There are so many errors, distortions, flat-out wrong statements, conflations, and unsupported conclusions in this “research” it just boggles the mind.

It’s one thing to have principled disagreements on policy. It’s entirely another thing to lie your ass off.

For those interested in real research by unbiased experts, the Kaiser Family Foundation’s recent report on Medicaid Work Requirements is required reading.

OK, rant over – till next week.

 


Jul
9

High deductible health plans don’t work

High deductible health plans do not work.

These plans, also known as HDHPs are the bluntest of instruments, intended to make patients more cost conscious and better consumers by making them pay the first few thousand dollars of their healthcare bills.

Instead, patients avoid care they should get, go bankrupt trying to pay sky-high deductibles, and even worse, don’t do a damn thing to get high utilizers to modify their lifestyle or care decisions.

Lazy benefits managers and employers looking for a quick fix to rising premiums continue to tout HDHPs despite the warning signs. Now, over a decade after these plans first became widely popular, some employers are finally getting the message.

I’d go so far as to argue that HDHPs help drive health care costs up; sick folks get sicker because they can’t afford preventive and routine care, while the 20% of members who incur 80% of the healthcare costs blow thru their deductible in March and then have no financial inhibitions.

Research shows most of those high utilizers don’t shop for care. I don’t see this as dumb behavior, rather a result of dumb plan design. If you’ve already paid your annual out-of-pocket maximum, you have no incentive to ask what something costs or even if you need that care.

I’ve been railing about this for years…alas, with the same effectiveness as Cassandra

So, if you’re looking to benefit design to control costs, what’s a better alternative?

Simple.  Replace deductibles and copays with co-insurance.  That is, have consumers share in the actual cost.  If treatment costs $100, then the consumer pays $20; if it is $4000, then the consumer pays $800.  This will make the consumer cost conscious without breaking their bank.

I understand that this will require the consumer, provider, and health plan to know what the cost of care is, ideally before treatment.  That is another major benefit of a co-insurance based program; it will speed adoption of transparent pricing and make consumers much more discerning buyers.

Yes, keep an out of pocket limit to protect consumers.  High utilizers will feel the pain of paying co-insurance far longer than they do today.  As a result, they will be better consumers overall.

What does this mean for you?

This isn’t that complicated, nor is it difficult.  Health plans that do this will gain a competitive advantage.

 


May
31

Thursday catch-up

Lots going on out there – here’s what you may have missed…

Opioids

The awful people at Purdue Pharma knew damn well their opioids were being misused, repeatedly denied it, and kept pushing their pills on doctors and patients. They lied to investigators, manipulated data, and are directly responsible for today’s opioid disaster. This from Barry Meier’s piece:

credit NYTimes

But the Feds aren’t blameless; in 2007 the US Justice Department allowed Purdue officials and the company to plead guilty to misdemeanor charges.

Think of that – misdemeanor charges for those most responsible for the opioid epidemic. Street corner drug dealers go to jail for years, and these fat cat execs with their lavish lifestyles and fancy lawyers pay a small fine.

I cannot put into words how much I hate these bastards, and how furious we all should be about a Justice Department that let them get away with it..

Breathe…

WCRI is hosting a webinar on the impact of opioids on disability duration on Thursday June 21 at 1pm eastern. Bogdan Savych PhD will address the following questions:

  • Do opioid prescriptions increase duration of temporary disability benefits?
  • Do longer-term opioid prescriptions increase duration of temporary disability benefits?
  • What role do local prescribing patterns play in determining whether injured workers received opioid prescriptions?

The study examines the effect of opioid prescriptions on the duration of temporary disability benefits among workers with work-related low back injuries using data from 28 states, for injuries between 2008 and 2013.

Register here…free for WCRI members, a nominal fee for others.

If you’re wondering why Congress isn’t doing more to attack the opioid crisis – and it isn’t doing much at all – blame the lobbyists, including those working for the AMA, the seventh highest lobbying spender in 2017, with $21.5 million spent.

The AMA is fighting 3-day opioid script limits, mandatory use of Prescription Drug Monitoring Programs, and mandatory opioid education for prescribers.

WTF??!!!

Twisting words to blame the victim

Poor people are less healthy than people who aren’t poor. That’s because their diets aren’t as good, they have poor access to care, their lives are far more stressful, substance abuse is more prevalent, and they are more often victims of crime.

These factors have long been known as “social determinants of health”, the idea that just being poor means moms, kids, dads are going to be less healthy than you and me.

The “work for Medicaid” crowd is attempting to steal the term “social determinants” by using it to claim that forcing people to work for Medicaid is good for them.

That’s just not true. In fact, forcing Medicaid recipients to go thru a maze of paperwork and administrative hurdles to prove they can’t work  – and if that recipient messes up the paperwork, fails to submit it on time, or isn’t able to accurately document their disability,

BOOM! they lose Medicaid coverage.

And they get sicker, and we end up paying for their care in the ER.

And the data shows folks who HAVE Medicaid are better able to find work! From the HealthAffairs piece:

illness and disability are among the primary reasons working-age adults are not employed and this problem is exacerbated when people lack access to the health coverage they need get care for their health problems. Enrollment in health coverage has been shown to be a significant factor in helping individuals find jobs, with over 75 percent of unemployed Medicaid enrollees in Ohio reporting that gaining access to health coverage made their job search easier.

Oh, and at least one state’s policies is blatantly racist.

There’s more, but I have to get to work.

 


Mar
19

Nothing ado about much

That’s the quick take on the White House’ plans to attack the opioid crisis.

Briefly, it amounts to:

  • harsher enforcement of existing drug laws,
  • education using advertising to prevent addiction,
  • helping fund treatment and
  • helping addicts find jobs while in treatment.

The latter two make a lot of sense; the first two are futile, stupidly expensive, and simplistic at best.

The “war on drugs” has resulted in millions incarcerated, trillions in costs, thousands killed, and, surprise, people still do illicit drugs.

These are just statistics, and therefore meaningless. But it isn’t meaningless for me or my family.  A family member in law enforcement died in the line of duty; much of his career was in drug interdiction and his death resulted from that work. The drug war is akin to Afghanistan; we’re never, ever, ever going to “win”, because the war isn’t winnable.

As for education, unless you’re older like me, you may not remember Nancy Reagan’s “Just Say No” campaign. Lucky you.  These “education” programs don’t work…according to an NIH study, the campaign: “had no favorable effects on youths’ behavior” and may have actually prompted some to experiment with drugs, an unintended “boomerang” effect.

While the latter pair make eminent sense, there’s nowhere near enough money – and without money they’re just talking points.

We need at least $10 billion more a year for treatment, plus additional funding for Medicaid which pays for a major chunk of treatment.

There’s an argument that former President Obama took too long to recognize the opioid disaster and start working on solutions – and I’d agree.

That said, the current funding level represents a real decrease in funding, at a time when death rates are accelerating.

What does this mean for you?

We’re on our own. 


Mar
2

What the %$#(*& is going on with opioid policy?

I’m somewhat encouraged, but mostly confused.

Briefly, this is the problem with national opioid policy.

There’s a major disconnect in DC on what to do about opioids – criminalize addicts, incarcerate them, kill drug dealersor expand treatment, go after opioid manufacturers and distributors, increase funding for solutions, change Medicaid policy to allow more treatment options.

While these aren’t mutually exclusive, the messaging coming from the White House is wildly inconsistent.

[HHS Secretary] Azar’s emphasis on medication-assisted treatment for opioid abuse also stands in stark contrast to Trump, his boss, who typically focuses heavily on law enforcement whenever he’s addressing the epidemic. That’s the approach Trump took yesterday, telling summit attendees that cracking down on drug dealers is a key to solving the problem — and even suggesting that imposing the death penalty on them would be helpful.

“Some countries have a very, very tough penalty — the ultimate penalty,” the president said. “And, by the way, they have much less of a drug problem than we do. So, we’re going to have to be very strong on penalties.”

While there’s lots of press out about the recent White House confab on opioids, what’s really happened behind the scenes is a lot less exciting. It sure looks like the policy experts are being sidelined from the real work, which is being handled by, you guessed it, political types…

from Politico

[Senior White House Advisor Kelly Anne] Conway’s role [as chair of the WH “opioid cabinet] has also caused confusion on the Hill. For instance, the Senate HELP Committee’s staff has been in touch with both Conway and the White House domestic policy officials, according to chairman Lamar Alexander’s office. But lawmakers who have been leaders on opioid policy and who are accustomed to working with the drug czar office, haven’t seen outreach from Conway or her cabinet.

“I haven’t talked to Kellyanne at all and I’m from the worst state for this,” said Sen. Shelley Moore Capito, a Republican from West Virginia, which has the country’s highest overdose death rate. “I’m uncertain of her role.” The office of Sen. Rob Portman (R-Ohio), another leader on opioid policy, echoed…

Of course, there’s still no Director for the Office of National Drug Control Policy, but at least it isn’t being run by a 24 year old.

I’ve talked to professionals deeply involved in national drug control initiatives and policy; some are convinced Trump et al are serious about the opioid disaster and are focused on it; others say it’s all a sham, the Administration is either unable or uncaring about this, and just bounces from policy statement to policy statement without getting anything done.

My takeaway is this.

Good people in the Administration know the opioid disaster is a disaster, and want to help address it. But they can’t.

The complete and total managerial incompetence, institutional attention deficit disorder syndrome, and lack of understanding of how to govern on the part of the White House’s current occupant and his staff hamstrings any and all efforts to develop and implement solutions.

What does this mean for you?

Big problems require thoughtful and diligent approaches.


Feb
21

Single Payer is Inevitable.

It’s going to happen. The US healthcare system will collapse.

It’s hard to say what’s the worst thing about American healthcare; the outrageous cost, the crappy outcomes, the endless paperwork hassles, the ridiculous rules, the dead and damaged patients, the huge financial burden for taxpayers and families.

American healthcare sucks.

For people, that is. For insurers, pharma, device companies, it’s never been better. 

People are dying younger every year. Infant mortality rates are worse than any other developed country. Costs are going up. More and more people are uninsured. Rural hospitals are closing. Employer premiums are unaffordable.

All while pharma, device companies, and for-profit healthcare companies are making billions and the tax cuts are increasing families’ costs and generating huge profits for health insurers.

 

Funny thing is, the last best hope for our Frankenstein-like healthcare system was the ACA. Based on a Heritage Foundation/Republican plan, the ACA relies on a hybrid private/public system, using Medicare and Medicaid regulation to drive innovation and improve care.

That’s being gutted by the current controllers of Congress and the White House, who have no plans to fix anything.

This will continue until it no longer can. No one knows when voters will rebel, but they will.

And when they do, we’ll have single payer.


Feb
20

Hey Washington, where’s the health care fix?

It’s a hell of a lot easier to blow something up than to build a replacement.

Especially when you don’t care about a replacement.

Fact is, we – you, me, taxpayers, governments – cannot afford our current health care “system.”  And it is getting more expensive every day.

Congress and the President are continuing their efforts to weaken and hobble the ACA, and they are generally succeeding. Without enforcement of the individual mandate, fewer young folks are getting insurance, increasing premium for us oldsters. The number of Americans without health insurance is up, health care costs are rising, and future Medicare costs are escalating.

The misguided and ill-intentioned “work for Medicaid” effort is going to create a whole new governmental bureaucracy, raise costs, and have zero positive impact. Medicaid changes are going to lead to hospital closures, especially in rural areas and inner cities. 

Health care costs were $3.5 trillion last year – and they’ll top $4 billion in two years. That’s a meaningless figure – until you realize our national and your personal budget is going to get whacked.

But it’s worse than that. The bi-partisan budget deal and tax cuts will exacerbate our already-huge national debt, screwing our kids and grandkids. The biggest driver? Health care.

And Congress’ and the President’s solution is nowhere to be seen.

Where’s the “replacement” the GOP has been talking about? Where’s the “market-based solution” to our health care crisis? Where’s the plan to lower drug costs?

Have you seen anything from Congress or the President that gives you any hope they have any plan?

These politicians aren’t interested in governing, don’t care about your costs or your kids’ debt, and hope you don’t pay attention. They have no political courage, no interest in doing anything that might cost them the next election.

What does this mean for you?

Nothing good.

 

 

 

 


Jan
31

Media coverage of Amazon/Berkshire/JPMorgan misses the point.

The coverage of the JPMorgan/Amazon/Berkshire Hathaway healthcare initiative has been universal, breathless, and mostly superficial.

Scoffers, “experts” are gleefully predicting this attempt to do something really different will fail miserably, victim of ignorance and hubris. While there are no guarantees, these naysayers ignore:

  • the three CEOS and their staff are brilliant, powerful, have almost unlimited resources, and are very, very cognizant of the difficulties they face. These are as far from idealistic newbies as one could get.
  • the “competition” is pretty lousy, hasn’t delivered, and their incentives are NOT aligned with employers’. If the big healthplan companies could have figured this out on their own, you wouldn’t be reading this.  It’s not like A/B/J are taking on Apple, Salesforce, or the old GE.
  • the financial incentives are overwhelming; healthcare costs are over $24,000 per family and heading inexorably higher. Unless these companies reduce and reverse this trend, they’ll have a lot less cash for future investments.

Many are also talking about “initiatives” that are little more than tweaks around the edges; things like:

  • publishing prices and outcomes for specific providers aka “transparency”
    My view – research clearly demonstrates consumers don’t pay attention to this information, so there’s no point
  • using technology to monitor health conditions and prompt treatment/compliance
    My view – lots of other companies are already doing this, and this is by no means transformational
  • use buying power to negotiate prices
    My view – it’s about a lot more than price, it’s about value.

Here’s a few things A/B/J may end up doing.

  1. Own their own healthcare delivery assets.
    My view – Insourcing primary care, tying it all together with technology, and owning a centralized best-of-breed tertiary care delivery center would allow for vastly better care, lower patient hassle, and cost control.
  2. Buy healthcare on the basis of employee productivity
    My view – Healthcare is perhaps the only purchase organizations make where there is no consideration of value – of what they get for their dollars. To the Bezos’, Dimons, and Buffets of the world, this is nonsensical at best. They will push for value-based care, defined as employee productivity.
  3. Build their own generic drug manufacturer
    My view – No-brainer.
  4. Allow employees to go to any primary care provider they want, but require them to go to Centers of Excellence for treatment of conditions that are high cost with high outcome variability.
    My view – No brainer.

I’d also expect many more large employers will join the coalition, for the simple reason that they have no other choice.

What does this mean for you?

Do not discount this.

 


Jan
19

What’s going on with health coverage for poor kids?

The current clustermess in DC around keeping the government funded is just bizarre.

What’s most bizarre is politicians are holding poor kids hostage, which is the only way to describe what is happening.

Republicans are refusing to consider legislation – requested by the President – to address DACA as part of the budget resolution. This is a core requirement for many Democrats, as is long-term funding for CHIP.

Background – CHIP has long been a bi-partisan program, championed by Sen Orrin Hatch R UT among other staunch conservatives. It provides insurance for poor kids and pregnant women, and has been funded for decades with nary a blip. Till now.  CHIP has been unfunded since October; most states are about to run out of residual funds, which would throw about 8 million poor kids and pregnant women off the program – and leave them with no insurance. 

This makes no sense.  If the Childrens’ Health Insurance Program is re-authorized for a decade, it SAVES $6 billion.  There is NO fiscal reason to NOT re-authorize CHIP, just a political one. The GOP is using the re-authorization in an attempt to force Democrats to support a budget proposal that is anathema to many Democrats – and more than a few Republicans as well.

It appears likely that we’ll be forced into a government shutdown over this, which will end up costing taxpayers a LOT more money than if the party in power had just passed a budget months ago as it was supposed to.  In case you aren’t as nerdy as your author, there have been four separate continuing resolutions to keep the government funding since Trump was inaugurated – and there are NO plans by the Senate Appropriations Committee to discuss a budget for this year – or next for that matter.

Moreover, the Committee, which is dominated by Republicans hasn’t even bothered to hold a vote on a budget over the last year.

If this stuff makes you nuts, well, it should.

What does this mean for you?

Be very thankful you aren’t a poor kid.  And really mad about what this idiots are doing to poor kids. 


Jan
8

Monday catch-up

Lots has been happening, here are a few items that caught my attention.

WCRI’s been diving deep into hospital reimbursement. This is an issue I’ve been tracking closely – and I’d suggest you should too. I see hospital/facility costs and utilization as a major cost driver; hear from Carol Telles in a webinar Thursday January 18 at 1 eastern.

As we’ve noted here previously, work comp payers would do well to pay close attention to facility reimbursement and utilization; expect work comp, auto, and other P&C lines to become even more attractive to hospitals seeking revenues and margins.

Healthcare spending inflation actually slowed significantly last yearAn analysis by Kaiser Health News indicates trend in 2016 was 4.3 percent, higher than the overall 2.8 percent inflation rate, but a 1.5 point drop from 2015’s rate.  Notably, drug cost inflation was just above 1 percent (although that’s a lot higher than the double-digit drop we’ve seen in workers’ comp).

Key point – this slowdown in the rate of growth occurred after ACA implementation.  Not surprising that costs went up; we insured millions more people, most of which had pent-up demand for services they couldn’t get or couldn’t afford.

While costs continue to grow, life expectancy declines. We have the most expensive healthcare in the world – by far – yet our life expectancy has dropped two years in a row. As a result, we rank 26th out of 37 developed countries for life expectancy.

Here’s why – we’re paying hundreds of billions for low-value care…

An excellent piece on how to make analytics actually work from Harvard Business Review.  Key points:

  • attach an ROI to the analytics unit itself
  • hire experts from OUTSIDE your industry…

Enjoy your week.