Insight, analysis & opinion from Joe Paduda
HWR welcomes back Health Affairs as the host and editor of this biweek’s edition. Jane Hiebert-White brings her distinctive Washington flair to HWR, one that is quite timely given all the wonking-about among candidates and pundits alike.
If recent (and past) electoral history is any guide, this Presidential election, or at least the health reform part of it, is going to be fought with sound bites. We can already hear the right screeching about the ills of ‘socialized medicine’ while the left howls about the evils of privatized health care. The right trots out Canadians and Brits who allegedly suffered maltreatment (or no treatment) from the numb grey bureaucracy that is their ‘national health system’. The left counters with stories of under-insured Americans bankrupted by health care costs.
Conservatives decry waiting lists, progressives bemoan the US’ health care system’s lowly international ranking.
This is a hugely complicated issue. Pat answers and bumper-sticker slogans are meaningless and should be treated as such. Yet few of us have the time to really dig into the issues, to fully understand the WHO’s national health rating system or the reality of waiting lists in the OECD.
What’s a concerned citizen, one really trying to understand, to make informed decisions, to do?
First, when approached at a cocktail party, kid’s lacrosse game, or backyard barbecue by someone touting the latest statistic or quoting a health care horror story, just ask for the details. What is the source? Where did this happen? What caused it to happen? Who was involved? When did it occur?
I’m betting that in most cases the source will be vague (the internet…), location undefined, causality undetermined, and timing uncertain. So you’re left with an impression, albeit one based on a vague, unsubstantiated source, an impression apparently designed to give you, the listener, a negative perception.
Second, ask what the solution is. How could this be fixed? What could have been done better/faster/cheaper/smarter and what conditions need to exist to make that happen? What do you think would solve this? How would we pay for it?
Third, ask for definitions. What exactly do they mean by ‘socialized medicine’? Are providers government employees? Is this single payer? Are prices fixed? Is it universal coverage?
You don’t have to be an expert/wonk/policy geek, but you do have to be curious and willing to push back on folks spewing mindless sound bites.
People who just want to complain, criticize, and demonize those with differing views are not going to help solve this problem, rather they are miniature ‘Harry and Louise’ bomblets, programmed to go off at random intervals, triggered by a headline or patently false email. They spread fear and uncertainty, worry and hesitation. Their victims retreat into the status quo as the devil they know sounds a lot better than the garbage spouted by these Harrys and Louises.
That’s not to say we can’t have strong disagreements (as loyal readers have undoubtedly noticed, we like spirited fights around here). As long as they are fact-based, supported by solid data and the argument is logical, have at it.
But leave the fear-mongering and logic-twisting to the John Stossels and Ann Coulters.
Now that the Democratic primary season is over (and boy don’t we miss it!), it is time to focus on the presumptive nominees’ rather different approaches to health care reform. (If Hillary ‘unsuspends’ her campaign and Obama drives off a cliff between the time I write and you read this, don’t despair, the Democratic candidates’ plans are more similar than they are different.)
The differences between the McCain and Obama plans are big – really big. Philosophically, McCain’s approach is market-based and tax policy driven, relying on individuals to make the best decisions on health care procedures and treatment. His plan would remove the favorable treatment of employer-funded health insurance, instead providing a refundable tax credit of $2500/individual or $5000 per family to help them buy insurance (note – the average individual policy now costs over $4000 and the average family policy cost exceeds $12,000). Conversely, Obama’s plan is more pragmatic, focused on fixing the problems with the current market-based system with a ban on medical underwriting, a comprehensive ‘minimum’ benefit design, financial help for small employers buying health insurance, and some sort of stop-loss insurance for high dollar claims.
As does McCain, Obama relies on private insurers to provide health insurance, but from there the two candidates’ plans diverge dramatically. One area where the plans appear to be similar is their stance on mandated universal coverage. While neither mandates coverage, Obama comes much closer, requiring universal coverage for children. But the Senator’s plan and public statements are a little disconnected; in Obama’s speeches and ads the Senator does appear to endorse mandated coverage – eventually.
Obama’s plan requires insurers take all comers, regardless of pre-existing medical conditions. Notably, although McCain’s original talking points did not mention guaranteed insurability, his campaign website now at least speaks to the issue – but his plan does nothing to change the status quo.
McCain wants to allow wide variation in benefit plan design and speaks glowingly of HSAs, while Obama is calling for a plan similar to the Federal Employee Health Benefit Plan. Both candidates’ policies appear to dramatically reduce states’ ability to mandate certain types of care (e.g. acupuncture) with the result that regulation of health plan benefits will shift from a state to a Federal responsibility.
While most other candidates are talking about covering the uninsured, McCain is focused on cost. More specifically, the cost of chronic conditions such as diabetes, asthma and CAD which account for 75% of the US’ entire $2 trillion health care bill. McCain is not just pointing out the obvious, he also plans to attack these costs by altering reimbursement – paying providers for maintaining health rather than reimbursing for specific procedures.
Here’s how McCain put it: “We should pay a single bill for high-quality health care, not an endless series of bills for presurgical tests and visits, hospitalization and surgery, and follow-up tests, drugs and office visits,”
McCain is dead on when he talks about the need to pay for health, not reimburse for procedures. His focus on the need to aggressively improve care and outcomes for patients with chronic conditions is creditable.
But he’s dead wrong in his blind faith in the market to solve the problem of insurability, and just plain blind in his belief that the individual insurance market is the answer. Today, in the vast majority of states, there is a free market for insurers writing individual insurance. And no insurers that can medically underwrite don’t, with the result that those who most need insurance can’t get it. You can’t blame the insurers; why would they want to cover an individual with heart disease, cancer, MS, depression, or asthma, or all of the above? They wouldn’t, no matter what kind of ‘risk adjustment’ plan is in place. It would be irresponsible, especially for those insurers that are owned by stockholders (think Aetna, United HealthGroup, CIGNA, Humana, Coventry, Wellpoint…)
Notably, nowhere on McCain’s website or in his policy papers does he say what the plan will cost. But his statements leave little doubt as to what he wants to do, and the Joint Committee on Taxation’s report on the McCain health plan clearly demonstrates the financial impact of his plan. The cost of the tax credits would be $206 billion in FY 2009 and $3.6 trillion over 10 years. That is about double what Obama’s plan is projected to cost.
Equally notable, Douglas Holtz-Eakin, one of McCain’s key advisers agreed that the McCain plan would increase the budget deficit, saying “It will make deficits expand up front, no question…”
The difference between the elephant and the donkey can perhaps be best summarized in two slogans.
For McCain, it might be “More expensive, less coverage.”
For Obama “Coverage just like I have, for only a hundred billion.”
Here, cribbed from Dr. Val and the Voice, are quotes they collected from yet another person, with my comments interspersed:
“Half of the people in the US have some sort of chronic illness. Health insurance is like having car insurance when 50% of people are having accidents. Of course nobody can afford it.”
This is especially true because the wrecks are often caused by poor routine maintenance.
“We need to keep employer-based healthcare because when employers have ‘skin in the game’ they have the incentive to promote healthy behavior at a local level. Monolithic government programs aren’t good at influencing people at the individual level. Employers know each of their employees by name, they are invested in their lives, they provide childcare services and other benefits to them, and each employee’s health affects their bottom line. Employers are a critical force for promoting and facilitating healthy behaviors.”
And employers have the financial motive to keep workers working and their families healthy so workers aren’t worried about and/or taking time off to deal with family health issues.
“Alternative energy sources aren’t that interesting when gas is $1/gallon. But when gas hits $4/gallon suddenly everyone is very interested in alternative energy. The same goes for healthcare. It takes a cost crisis to bring it to everyone’s attention. And now the audience is listening.”
A great analogy – our addiction to oil looks like it has limits, and our addiction to all the expensive health care we can waste may be hitting its own hard stop.
and thanks to Ann in Florida for the heads up.
The Fifth Annual Survey of Prescription Drug Management in Workers Comp has been completed, and copies of the Public version of the report are available at no charge. (email infoAThealthstrategyassocDOTcom)
A few late respondents contributed significantly to the report, and their data also moved the figures around a bit. Here are a few key statistics.
Drug inflation for 2007 was 4.9% (looking at the increase in total dollars for 2007 over 2006).
Generic utilization was in the high seventies, with generic efficiency in the ninety-percent range.
Essentially all larger payers are now using PBMs, although are many are not using them as effectively as they could be. PBMs’ clinical, reporting, outreach, paper bill processing, and related capabilities are not being utilized to their fullest by all but a very few payers.
The use of home delivery has jumped and is close to 5% across all respondents. This is a major improvement over a couple years ago, when it was in the 2% range for most payers.
And finally, the first fill capture rate is in the low twenties – although half of the respondents did not have the figure readily available.
Copies of past surveys are available here.
It has become fashionable of late to accuse the Democrats of backsliding on their ‘commitment’ to health care reform. Pundits have been opining that there isn’t the political will, there isn’t enough cash, the Dems can’t get their act together, it’s too much work, and other variations of “it’s just soooooo hard”.
I don’t buy it.
I’ve been forecasting major reform for over a year, and nothing in the recent past makes me change that prediction. In fact, my take is recent developments make it more likely that we’ll see major reform in the next Congress.
The Columbia Journalism Review disagrees, (I had problems w their site, apologies if the link doesn’t work) quoting a few Democratic legislators’ comments that appear to bode ill for reform. Their premise, that the Dems will have to push it, is obvious. The doubt is appropriate, but the careful selection of quotes appears designed more to support their thesis than to present an objective view. Here are a couple of those ‘other’ quotes’.
One of the pols the CJR took to task for wimpy words was Max Baucus (if you’re going to pick a dissembler in Congress, there are a lot better targets than the Montana Senator). The Senator has said a lot about health care; has Baucus said “if reform isn’t passed I’ll move to Canada”? Of course not – but he did say “The moral and economic case for reform has never been stronger.” Along with Baucus, Nebraska’s Chuck Grassley is co-hosting a confab (of the major public variety); commenting on the meeting, Baucus stated “Our broken health care system is endangering families and sapping this country’s ability to compete economically, and Americans want something done about it. But comprehensive health reform won’t drop out of the clear blue sky – we have to do some legwork first…”
Baucus et al’s opinions are supported by other eminent lawmakers such as Durenberger of Minnesota and Corker of Tennessee.
CJR followed up the original piece with a bit of clarification, concluding with the observation that principles (as stated by a few elected officials as the basis for developing legislation) did not mean anything will happen. Not exactly burying the lead, and not terribly informed or informative either.
It may well take 60 Senators to pass reform. Even if the Dems win big in November, they will still be well short of that magic number and need help from their colleagues across the aisle. A few Republicans will have to support any reform initiative, but that isn’t as far-fetched as it may seem.
For example, Utah’s Bob Bennett (R) is a co-sponsor of Ron Wyden (D OR) Healthy Americans Act – along with six other GOP Senators and an independent (Lamar Alexander (R-TN), Bob Corker (R-TN), Judd Gregg (R-NH), Chuck Grassley (R-IA), Norm Coleman (R-MN), Joe Lieberman (ID-CT), and Mike Crapo (R-ID). (btw, Corker is a relatively recent addition, which would logically indicate growing support)
The math works. Using current projections of electoral changes gives us between 54 – 57 Dems, and a handful of Republicans joining in puts the measure (which measure exactly is another question) over the top.
Sure, it is going to be hard, and tough, and there will be back- and side-steps amid the forward progress. But the odds remain in favor of health reform – and may actually be improving.
In the meantime, look for the reality behind the quotes. And nothing says reality more than a Senator’s name on a big health reform bill.
Providers are now rating payers. And in the ratings game, Aetna looks to be doing better than other big health plans.
There are several ‘payer rating’ sources now available, each with their own approach. One of the more intriguing is published by the Verden Group. The VG tracks the policy changes that payers make on a daily basis, alerting providers “to any administrative and clinical policy, procedure and reimbursement changes occurring in the networks in which you participate, at the time these changes are occurring.” Think of VG’s service as a ‘policy aggregator’ that ‘pushes’ notice of policy changes out to specific providers (providers that sign up for their Alert service).
From a broader perspective, this business model is a classic example of niche identification. Providers are forced to proactively monitor the websites of the networks in which they participate for changes in areas such as prior authorization procedures, mailing addresses, credentialing requirements and processes, claims submission and approval, benefit design, and communications standards and protocols. VG removes the burden from providers – albeit for a fee.
A side benefit of all this monitoring and data collection is VG’s quarterly Managed Care Company Ratings report. The Report analyzes each major health plan’s impact on providers in the areas of cost of compliance, timeliness of notification of policy changes, volume of changes, and ease and clarity of communication. VG then weights these areas and the result is an aggregate rating.
In contrast, athenahealth’s payer rating system, PayerView(sm) is designed to evaluate the “ease of doing business with a payer.” Compared to Verden, PayerView appears to cover a broader spectrum of the provider-payer relationship, and is more financially oriented, although it does consider administrative performance and medical policy complexity (similar to Verden). athenahealth acts as a billing agent for their provider clients, and thus has extensive, hands-on knowledge of the gritty business of submitting bills and getting paid (or not).
(observation – while athenahealth’s information depth is certainly impressive, it is not very accessible – they do a poor job of explaining acronyms and use jargon extensively with little explanation)
I’ll let interested readers puzzle thru athenahealth’s PayerView on their own. The good news for Aetna is they come out on top – paying claims quicker and more accurately than other health plans. The health plan also reduced its denial rate by 10.6%, and remained the fastest paying health plan. Aetna was closely followed by CIGNA.
Aetna looks pretty good to the folks at Verden too, scoring at the top of the 18 payer list in cost to provider (changes that added admin expense, altered reimbursement, increased admin time and/or complexity) and clarity of communication.
One of their lower-weighted areas is notification period – the time between initial posting of a policy change and that change’s effective date. If there’s one thing that drives providers nuts it is the denial of a claim or procedure because the provider did not follow a process that no one told them about.
HealthNet ranked worst in this area followed closely by GreatWest. But most health plans were only marginally better.
This reflects poorly on health plans; providers will likely (and justifiably) assume this is due to a lack of concern about these issues on the part of management.
What does this mean for you?
Health plans that understand the importance of the provider – and do more than just talk about it – are going to do better than their rivals that don’t value providers.
Thanks to fiercehealthcare for the initial heads-up.
I received a few calls and emails yesterday from workers comp payers asking for clarification about my post on the potential (highly inflationary) changes to the Florida outpatient work comp fee schedule. Evidently there is some confusion out there about the linkage of Medicare to the WC fee schedule, with several entities contending that Florida is actually linking WC reimbursement to Medicare reimbursement.
Kinda sorta but not exactly.
The three member panel (regulatory entity responsible for the FL WC FS) is looking at the difference between Medicare charges and reimbursement, and basing their calculations on that differential.
The proposed change to the FS would link the “usual and customary” payment standard for outpatient hospital claims contained in Fl. St. § 440.13(12) to the ratio between what Florida hospitals charge Medicare and what Medicare actually pays. The net result would be a dramatic increase in the reimbursement for outpatient services billed by hospitals.
Here’s some detail; apologies for the density of the subject, but you wanted details.
The change proposed by the FL Dept of Financial Services (DFS) is to link what Medicare pays hospitals, as defined by the Ambulatory Payment Classifications (APC) payment rate, adjusted to mark up the Medicare APC payment on a hospital’s charge to roughly equate with what DFS thinks are the average charges billed by FL hospitals for that ‘group’ or APCs.
FL is putting APCs into two APC groups – surgical and ‘other hospital outpatient’. DFS’ calculation is that the average mark up – on which payment would be made – is 302% for surgery and 467% of Medicare payment for other hospital outpatient APCs
Thus, per regulation, 60% of the 302% would be paid for surgeries and 75% for other hospital outpatient.
There are a few issues with the methodology, data sources, and assumptions used by DFS, issues that have been raised in past meetings of the panel.
But the real problem is simple – WC costs are going to be substantially higher if this goes through. First, this methodology will increase costs – today – by 181% for surgeries and 330% for other hospital outpatient services.
Second, the annual inflation rate for charges in FL is 14%. So today’s high costs will be tomorrow’s even higher costs and the day after will bring really really high costs…
Third, the location of services will likely change dramatically to the higher cost hospital location. Thus procedures which were being done in offices will now be billed – at the much higher rates – by hospitals.
Fourth surgeries which were done on an outpatient basis will likely shift to inpatient to take advantage of the much higher reimbursement.
What does this mean for you?
The next meeting of the three member panel is June 19. Unless you want to pay a lot more for medical care in Florida, make your voice heard.
I’m mystified, perplexed, confused, confounded, and appalled.
There’s just no other logical reaction to the goings-on in the Sunshine State, where several workers comp payers are actually supporting a major increase in reimbursement for outpatient facilities – an increase that is wildly inflationary and completely unnecessary.
I’ve reported on this impending disaster a couple times over the past month, a disaster that the payers are bringing on them selves. Comp reimbursement in Florida is under the control of the ‘three member panel‘, a triumvirate that is attempting to come up with a clear definition of ‘usual and customary’ – the criteria by which facilities are reimbursed under workers comp.
Here’s a brief video metaphor of the last hearing…
The panel is looking to specifically and clearly define U&C in an effort to eliminate the ongoing legal battles between payers and hospitals over what exactly is ‘usual’ and ‘customary’. The benchmark that the panel seems committed to is the amount hospitals charge Medicare. Not get paid by Medicare, but charge Medicare. According to testimony at one of the panel’s recent hearings, hospitals mark up their Medicare costs by 715% – they charge Medicare seven times more than it costs the hospital to provide the service.
If the proposed regulation is adopted, workers comp’s ‘usual and customary’ would be based on that 715% mark up. Running the numbers, this would result in workers comp payers paying Florida hospitals (and perhaps ASCs) 472% of what Medicare pays for outpatient services – one of the highest rates in the nation.
And this will increase Florida WC costs by about 20%. (the calculations and basis thereof are too lengthy to go into here, email me at infoAThealthstrategyassocDOTcom if you want the gory details)
Yet payers are supporting this change. Why? Do they want to increase policyholders’ costs? Jack up their loss ratios? Are they feeling particularly charitable (always easy when spending policyholders’ money)?
Or is it because they are sitting in the back of the train, relaxing while it hurtles down the tracks, blindly confident in their ability to determine its destination?
In private conversations, they say because it will make it easier to deal with the issue, establish a firm basis for reimbursement, eliminate the hassle, end the litigation.
If that’s the case, why not just set the amount at “whatever the billed amount is, you have to pay it”? That would be even simpler, eliminate the complex calculation needed under the proposed system – and have the same result.
Payers are being incredibly short sighted. Lazy even. And here’s where that train is heading.
What does this mean for you?
(Many) employers in Florida are being ill-served by their insurers and TPAs. Send this post to your broker and ask them to find out what your work comp carrier’s position on this is and why, and what they are doing to protect your interests.
Or you can just hang out in the club car, trusting that someone will get control of this impending disaster before too late.
Most back pain cases resolve themselves within a month. At least, that’s what many believe.
And, like much of what we accept without investigation, it is wrong.
Turns out most back pain patients stop going to their doctor within a month – but their symptoms persist. Fully three-quarters of them still have symptoms a year after the initial onset of pain. This isn’t ‘new news’, in fact it was reported in the British Medical Journal a decade ago.
This wasn’t one of those “publish and forget” articles. The British have been focused on the diagnosis and treatment of back pain for years, and in subsequent years several studies analyzed different types of treatment, complicating factors, and the prevalence of back pain.
A 2003 study reported that although the condition may have been resolved within a few weeks, it looks like once you’ve had low back pain, there is a pretty good chance the symptoms will reappear. Seventy-three percent of patients will experience a recurrence, a figure essentially identical to that noted above.
One of the more interesting analyses indicated that rapid diagnosis and referral to a physiotherapist (PT) produced good results, as “More than 70% of patients required only a single [PT] clinic visit and <5% were referred on to specialist orthopaedic or back pain rehabilitation services."
Another examined the tendency of some patients to ‘catastrophize’ their condition – exaggerate it and make it seem worse than it appeared from objective findings. Unsurprisingly, the results showed that a high level of pain catastrophizing or kinesiophobia (fear of movement) increased the individual’s risk of future chronic low back pain – and disability. This held true regardless of whether the study subjects had low back pain at baseline and still existed after correction for severity of back pain at baseline. The patients with those characteristics, who did not have pain at the time of the study were significantly more likely to experience pain.
So…what does work?
There is little evidence that invasive surgery produces better results (for most patients) than other forms of treatment.
From the BMJ:
“A number of interventions, including facet joint, epidural, trigger point, and sclerosant injections, have not clearly been shown to be effective. No sound evidence is available for the efficacy of spinal stenosis surgery. Surgical discectomy may be considered for selected patients with sciatica due to lumbar disc prolapse that do not respond to initial conservative management. The role of fusion surgery for chronic low back pain is under debate. Recent randomised clinical trials comparing fusion surgery with conservative treatment showed conflicting results. Recommendations that fusion surgery should be applied in carefully selected patients are difficult to follow because no clear and validated criteria exist to identify these patients in advance.”
But there is evidence that more conservative treatments do produce results – the BMJ (again) :
“That exercise and intensive multidisciplinary pain treatment programmes are effective for chronic low back pain is supported by strong evidence. Some evidence supports the effectiveness of (cognitive) behaviour therapy, analgesics, antidepressants, nonsteroidal anti-inflammatory drugs, and back schools and spinal manipulation.”
Extensive citations are available here.
What does this mean for you?
I reported yesterday on the explosive growth of spinal surgery using implanted devices. Undoubtedly this type of care is highly beneficial – for some patients. What we don’t really know is which patients should be getting implants and who would be better off with conservative treatment.
Clearly, there is strong evidence that more patients would benefit from conservative treatment, leading one to suspect that the growth of invasive surgery is not driven by best practice.
