Insight, analysis & opinion from Joe Paduda

Sep
6

McClellan’s legacy

Mark McClellan is leaving his post as head of the Center for Medicare and Medicaid Services. He served long and loyally, sticking to the Administration’s line even when facts indicated otherwise, remaining a calming force when Part D enrollment was going nowhere. McClellan is also known for listening hard to suggestions and criticism from all sides, and working diligently to address problems.
Here’s what’s happened during his tenure.
Part D was passed, implemented, and operational. This was a monumental task, and one McClellan was instrumental in accomplishing. It’s not his fault it is a fatally flawed program; well, maybe it is, in some small part, as he was probably involved in writing/editing/opining on the legislation. Nevertheless, under McClellan the program became reality, with the initial enrollment problems addressed (in large part).

Continue reading McClellan’s legacy


Sep
5

HWR submissions due

Hank Stern and associates at Insure Blog are awaiting your submission for this week’s edition of Health Wonk Review.
I know it’s the first day back from vacation, I also know it’s time to get busy building traffic! Send your entry to Hank at InsureBlog@hotmail.com.


Sep
1

The uninsured – wide variation among states

The bad news is the number of those without health insurance in the US has grown to over 46 million. The good news is that a few states have seen a reduction in the number of uninsured; the really bad news is a few have gotten even worse.
Several states are doing well. One is Iowa, where the uninsured population actually decreased last year, as the percentage of those without health insurance dropped from 10.4% in 2004 to 9.1% in 2005. Part of this success is due to increased enrollment of kids in the state’s Hawk-I program, which more than doubled over five years to 34,600 in 2005. This parallels an increase of 200,000 enrolled in various government-funded programs over the same period.
Maine’s one of the better off states, with a population of uninsured that is significantly lower (10.5%) than the national average of 15.7%. The state’s Dirigo health plan, an effort to increase coverage among Mainers by targeting small employers and kids, has failed to meet enrollment goals but generated significant savings. It is tough to tell if the program has had an impact on the uninsured rate, as it is very new.
One that is not experiencing the same level of success is Arizona, with 20% of the population uninsured after an increase of 225,000 in the number of uninsured in 2005. To address the problem, the state is seeking to implement a revamped Medicaid program under a Federal waiver that focuses on the lower-income workers employed at businesses with fewer than 25 employees. There are over 200,000 businesses in the state that meet the size criterion.
As bad as the situation is in Arizona, it is worse in Texas, where almost a quarter of the population lacks health insurance.
What does this mean for you?
A closer examination of individual states may help us understand drivers of and solutions to the problem of uninsurance.


Aug
30

Aetna’s new workers comp PBM

With the news that Aetna has entered into the work comp pharmacy benefit management business, there are now officially a bazillion WC PBMs doing business. Maybe even two bazillion.
Aetna has been in and out of the WC business in the past, and now appears to be in it, at least as a managed care vendor. Aetna Workers Comp Access is the brand name for the company’s PPO network, one that is gaining some traction in certain jurisdictions. The new PBM venture appears to be an attempt to use Aetna’s group health-oriented PBM to deliver drugs to comp patients. But the WC PBM business is much much different than group health. There are no deductibles or copays in comp, identifying the patient’s PBM is much more of a challenge, and the country is a crazy quilt of different regulations, as each state sets its own rules, reimbursement levels, and operating standards.
The strategy is to cross sell the PBM to Aetna’s (group health) employer clients. One of the touted benefits is the ability to identify potentially harmful drug interactions across both group health and WC medical treatment. Aetna has landed their first customer, CostCo, and are also bidding on carrier business (several of the larger insurers have been or are out to bid for PBM services).
Aetna is not doing this on their own, but has contracted with Rockville, MD based CatalystRx to provide the WC expertise needed to operate in the comp market. This is a somewhat puzzling choice; Catalyst is not a big player in WC and does not have a lot of experience in the space. Their contribution will be key if Aetna’s newest venture is to become a viable option for comp drug buyers.
What does this mean for you?
Another option in the already-crowded WC PBM industry, albeit one with a different twist.


Aug
29

Drug repackagers and physician dispensing

As a public service, I’ve put together a (partial) list of firms that repackage drugs for physician dispensing. This is primarily a workers comp issue, as comp insurers and TPAs are increasingly concerned about the cost of drugs dispensed by physicians. In some circumstances, the billed and payable amount can be several times higher than the cost for the same type of drug dispensed through a pharmacy.

Continue reading Drug repackagers and physician dispensing


Aug
29

Direct contracts – the solution for a select few

It’s happening. Actually, it has been happening for years, albeit not very often. Frustrated with increasing premiums and no real solutions from the health insurance industry, large employers are investing in direct contracts with health care providers to deliver health care services to their employees and their dependents.
The practice got its start before WWI, when lumber mills in Tacoma Washington contracted with the Western Clinic to provide health care services for their employees. Leland Kaiser built health care facilities and hired staff to provide services to workers on the Grand Coulee Dam in the nineteen-thirties, a project that was the beginning of today’s Kaiser Permanente.
While there are no statistics on the number of lives covered under direct-contract arrangements, the total number is probably tiny. Unless there is a “magic” combination of a large employer and a dominant health care provider group with extensive facilities in a relatively small geographical area, direct contracting will just be too complicated and difficult to pull off.
But when those conditions do exist, expect more employers to seriously consider the move. Employers that are likely to consider direct contracts include large municipalities, school boards, manufacturing concerns, transportation hubs and entertainment companies.
What does this mean for you?
A business opportunity for providers, another challenge for health plans, and another way to tackle the problem of access and cost.


Aug
28

Quality means exactly what?

Some “quality” awards are based on rather shaky ground. And the Mercury Awards, which used to be handed out by HCIA (now Solucient) appear to fit that category.
According to the website for the North Ohio Heart Center (a cardiology practice in Elyria Ohio), “EMH Regional Medical Center had the top score for quality of care in Cardiology. According to the award, “It had the lowest complication rate and the most efficient length of stay. Its Patient Services score was boosted by its staff ratio and broad offering of cardiac services.”
That’s great, and if you were looking for a place to get your ticker checked, this impressive award may influence your decision. But the basis for the award should get anyone thinking, and at the very least asking a few pointed questions.
For example, the center had “the lowest complication rate”. That could be because the cardiologists are really great. Or it could be because they perform a lot of procedures on low risk patients , patients that are likely to require relatively short lengths of stay and experience low complication rates.
Evidence indicates that the latter may be reality. In fact, compared to national averages, there are four times as many angioplasties performed by the docs at EMH than in the rest of the country. More procedures = more experienced docs; more experienced docs doing procedures on low risk patients = good outcome scores, lower complication rates, shorter lengths of stay.
This looks more like an award for doing too many procedures including procedures on patients that may not have needed them in the first place, resulting in lots of income for both the docs and the hospital.
And the money ain’t bad either. (reg. req.)


Aug
27

Bloggers are great

Perusing the blogroll on Managed Care Matters over the morning cup, I had that oh-so-rare flash of insight – the blog world is populated by some incredibly intelligent, deeply insightful, prescient folks. Some nutjobs too, but let’s stay positive.
I know, what a “duh” comment. But really – here’s some examples…
Effect Measure follows the bird flu as only public health experts, and I do mean experts, can.
Roy Poses et al at Health Care Renewal dig deep, really deep, into ethical issues, including Pfizer and publicly-funded medical schools. And there’s a lot of muck to be raked by Dr. P.
Kevin Piper posts occasionally, but thoroughly. Really thoroughly. Read his piece on Medicare drug plans, risk corridors, and why smart players are going to make lots and lots and lots of money on Part D.
Medpundit is written by a practicing doc, who (among other talents) has this neat ability to find and report on strange, unsettling, and downright scary happenings in medicine and environs. Here’s one on a report that Chinese prison officials are “harvesting” organs from executed prisoners – if that doesn’t make your skin crawl…
And there’s lots more. So the next time you’re stuck on that interminable conference call, cruise on over to the blogroll and get entertained, educated, and enlightened. You may even find stuff that will be useful in the call…


Aug
25

Freedom and payment for same

Okay, here’s a kind of out-of-left-field diversion from our usual diet of policy, insurance, managed care and industry news. Lets talk about motorcycle helmets.
When jurisdictions have mandatory helmet laws, the number of fatalities goes down. By most measures, that is a good thing. However, it does mean there are fewer organs to be transplanted, which is a bad thing.
One of the “bad” things is the increase in medical costs. When Florida dropped its mandatory helmet law, hospital costs for motorcycle injuries jumped from $21 million in the thirty months prior to the change to $44 million for the same period post-enactment.
Readers with good memories will recall that Florida also has a lot of folks without health insurance; 81% of these folks are of working age.
EMTALA laws require hospitals to treat patients, including injured motorcyclists without insurance, who show up at the emergency room.
So society is paying for motorcyclists who want to exercise their free right (choice of words intentional) to suffer brain injuries by riding without a helmet. But I don’t want to pay for their health care.
Do you?


Aug
24

HWR is up at the Lucidicus Project

This week’s edition of Health Wonk Review is up at the Lucidicus Project, hosted by Jared Rhoads. Jared’s done an admirable job culling from diverse sources; one of the best things about HWR is the wide range of perspectives and opinions.
When a community includes Matthew Holt and Jared Rhoads, that’s a broad spectrum.


Joe Paduda is the principal of Health Strategy Associates

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