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Pig in a Poke Health Reform

The Healthcare Blog - Mon, 01/16/2017 - 12:07

From a political perspective, House Speaker Paul Ryan’s trashing of ObamaCare (a.k.a. the Affordable Care Act or ACC) during CNN’s recent town hall meeting probably was quite effective. One would, of course, not expect a staunch political opponent of ObamaCare to render a “fair and balanced” picture of the program, to plagiarize a Fox News mantra. Not surprisingly, the Speaker dwelt solely on some serious shortcomings of ObamaCare that are by now well known among the cognoscenti.

The question now is precisely what would replace ObamaCare, as Republicans fall over one another in their haste to repeal it. Enumerating principles, as has been done in sundry tracts in recent years and is done once again in the House of Representatives’  “A Better Way”, is no longer enough. Yet even at this time of imminent repeal of ObamaCare, the crucial details of any replacement plan remain a mystery. Surely the time has come to let the cat out of the bag.

During the town hall meeting, for example, Speaker Ryan proposed the general outline of a system that would rely on high risk pools for Americans with pre-existing medical conditions, coupled with a market for individually purchased insurance policies whose modus operandi was largely unspecified. What would be the parameters of the high risk pools? Granted, it would have been difficult to be much more specific on this point than the Speaker was in a town hall meeting. But it would certainly have been helpful had there been a website to which he could have directed his audience for the specifics of a replacement plan built on a Republican consensus.  To my knowledge, there is no such website.

Risk pools have long been the workhorse of Republican rhetoric on health reform. One can think of such a pool as just another health insurance company selling insurance in the individual market for such policies to relatively sick applicants for insurance. To assess the merits of the coverage it sells, one surely would want to know: 

  1. What would be the benefit package being offered? Would it have exclusions? Would it have tight upper dollar limits on coverage? What deductibles would patients have to pay, what coinsurance, and what would be their maximum annual risk exposure in dollar term? In this regard, the history of high risk pools in this country is hardly reassuring, as can be inferred from a recent analysis by Jean P. Hall. Would it not be utterly ironic if, after trashing ObamaCare for six years over its high deductibles — a point the Speaker drove home once again during the town hall meeting – the coverage sold by the high risk pools he now proposes had similarly high deductibles or even higher ones? Yet one cannot rule that out, and so it certainly is a point worth watching.
  1. What would be the criteria for eligibility to purchase insurance from the high risk pool? Precisely how would “high risk” be defined operationally?
  1. What premiums, net of any public subsidy toward that premium, would entrants of into the pool have to pay? Would these premiums related to the disposable income of applicants? If so, how?

One would also want to know, of course, precisely how the individual market for Americans not in the high risk pools would be structured. Would premiums for that segment of the population once again be medically underwritten, as they were pre-ACA? Could insurers structure the benefit package of policies as they saw fit, given the market demand for insurance they face?

And what would happen if an insured had chosen a cheap but shallow health insurance policy and then fall seriously ill? Who would pay for critically needed medical services or products—e.g. an expensive specialty drug — not covered by that cheap policy, if the patient’s own resources were inadequate? Would we go back to the pin-the-tail-on-the-donkey financing by which hospitals sought to recover their cost of uncompensated care from paying patients in pre-ACA days? Or would patients just be denied these services and products altogether, at the risk of avoidable death?

To my knowledge, all of these crucial details have yet to be fleshed out if the ACA is to be repealed and instantly replaced with an alternative.  Technically, what Americans have been offered so far in this regard might be called a pig in a poke.

Frankly, I find it remarkable and sad that after six years of trashing ObamaCare Republicans now find themselves without a consensus on a clearly specified replacement to which voters and policy analysts could react. Where have their policy wonks and the politicians they advise been in the meantime? Why had they not long ago agreed on a “replace” and given voters the courtesy of some details, to assess its merits?  It is an odd approach to public policy and one not meriting much respect.

Now it turns out that if premiums in the ACA markets continue to rise at double digit rates, and if more and more relatively healthier individuals are thus dissuaded from purchasing insurance on those markets, then the remaining risk pools in those marketplaces will slouch more and more toward high risk pools. Here, however, we would know the benefit package, we would know eligibility criteria and we would know on what financial terms individuals could in these high risk pools, because all of it has been completely specified in the ACA legislation. One certainly could work with this set up and just rename it.

The question then is what then would happen with Americans who eschewed purchasing insurance or bought it outside the ACA market places? Would they remain uninsured and have access to a market structured as it was pre-ACA, with medical underwriting, frequent denial of coverage, and highly variable benefit packages?

For high income people who can afford any health insurance policy, or for those who are securely covered at their place of work, the forthcoming “repeal and replace” drama in Congress will be just that – a basically incomprehensible spectacle played out on cable TV news that luckily does not touch their own lives. The drama will be incomprehensible, because the task of health reform is technical and the television media are just not intellectually equipped to translate such detail into language the viewing public can understand, even though that could be done with some thought.

For the still uninsured or those now covered on the ACA market places, however, the coming year will be a time of high anxiety, with a quite uncertain impact on their own lives. They will learn precisely what is meant by the word “terrific,” the attribute President-elect Trump had ascribed to the insurance coverage by which he had planned to replace ObamaCare. It remains to be seen how pleased these Americans will be by that “terrific” replacement.

Categories: OIG Advisory Opinions

The Arc of Justice in Healthcare

The Healthcare Blog - Thu, 01/12/2017 - 17:37

We all fear that phone call.  A medical report turns out the wrong way and life may never be the same.  When that call arrives we all have the same needs:  A doctor who cares, a place to go for treatment and the finances to afford what’s needed.  Starting on January 20th, some of my patients will join the 20 million whose lifeline to those fundamental needs becomes jeopardized.  

One of my patients facing this threat lost his job and health insurance during the 2008 recession.   Because he’s a diabetic and has a special needs son, no insurance company would sell his family a policy.   Why would they?   Diabetics and others with serious illnesses pose high risks for future health expenses.  Insurance companies make money by avoiding such risk.   After exhausting all the options, he sweated out 18 months with no coverage.   Finally, the roll-out of the California Exchange, funded by the Affordable Care Act (ACA), allowed him to buy an Anthem Blue Cross policy for his family.  

Do we really want millions of our fellow Americans to relive those nightmares?  We all benefit from the ACA’s fundamental commitment: That everyone deserves access to healthcare regardless of their ability to pay.  The policies guided by this principle moved us toward the achievement of universal coverage without changing the existing care of the majority of working families with employer based plans nor those with self-funded coverage.   

Two key features of the ACA make the difference for patients like mine.  The first, subsidized insurance exchanges, allows them to get coverage at prices negotiated for all.  This provides economies of scale in pricing and spreads the risks over a larger group, reducing the costs for higher risk individuals. The insurance premiums are subsidized by income to keep them affordable. 

The second key feature of the ACA, and the most controversial, is the individual mandate.  This provision requires individuals to purchase insurance or pay a fine.  Opponents consider the mandate an infringement on individuals’ freedom to decline coverage.  Despite the superficial appeal of the argument, no one in the United States actually declines coverage.  When uninsured individuals arrive in an emergency room with a severe illness or injury they receive treatment and the costs get passed on to the insured and to taxpayers.  Such “uninsured” individuals are free riders.  They enjoy catastrophic coverage paid for by others.  

Additionally, many free riders are young and healthy.  Their departure from the system, if allowed by a repeal of the mandate, would leave a sicker, costly population that would likely face unsustainable increases in premium costs.  We don’t allow individuals to opt out of auto insurance because it affects the public welfare.  Similarly, we should not allow free riders to opt out of health insurance and undermine the financial stability of the health system. 

The ACA isn’t perfect but almost everyone gets a fair chance at coverage.  Under the ACA the percentage of non-elderly uninsured fell from 18% to 10.5% as 20 million gained coverage.  Vice-President Elect Pence recently called for “an orderly transition…to a market based healthcare economy.”  The ACA includes market mechanisms, such as the markets for health plans on the exchanges and the markets for providers once insurance is purchased.  A purely free market approach, as the Vice-President seems to support, could never reach the level of coverage achieved by the ACA.  If markets are completely free, they price out individuals who lack sufficient resources.   Healthcare costs are so high that cutting off help from the ACA would deprive millions of needed coverage.   

As President-Elect Trump considers healthcare, he may want to consider the words of Martin Luther King, whose holiday precedes the inauguration by just four days.  “The arc of the moral universe is long, but it bends toward justice.”  Part of that arc includes our social justice system and the safety net that protects patients like mine.  Americans never have made a commitment to public welfare and then reneged on it.  Despite their party’s opposition to the creation of Social Security and Medicare, incoming Republican administrations never threatened to withdraw existing commitments.  Instead, they supported bipartisan efforts to improve the programs.   The Trump administration should do no less.  

Members of the Trump administration and their congressional allies also should consider that most of them and their family members will someday also receive that call.   They should not threaten to deprive fellow Americans of the healthcare security they would want for themselves. 

The arc of justice in healthcare has been long indeed.  We will soon learn whether the Trump administration will choose to defer the progress of the arc of justice under the ACA.  In the long run they cannot stop it. 

<em>Daniel Stone, MD is the director of a multi-specialty group in Los Angeles.</em>

Categories: OIG Advisory Opinions

Why Consumers Are the New Patients

The Healthcare Blog - Thu, 01/12/2017 - 00:38

Meet Edith Stowe.

An 83-year-old resident of the District of Columbia, Ms. Stowe has made a routine out of her two to three monthly trips to MedStar Health, a Maryland-based nonprofit health system.

After all, her life literally depends on it. Ms. Stowe has chronic kidney failure, so her 5-mile trips to the hospital aren’t a luxury. She absolutely needs them.

Stowe doesn’t own a car, and taking the bus to get life-critical care isn’t always reliable–or even desirable for an aged patient with a chronic disease.

That’s how Uber enters the frame.

Beginning earlier this year, MedStar has integrated the ride-hailing giant into its platform, allowing patients to easily schedule rides to and from critical appointments. MedStar’s patient advocates will arrange rides for Medicaid patients who don’t have access to its website or app-capable smartphones.

MedStar’s partnership with Uber made headlines this August when The Atlantic originally told Ms. Stowe’s story.

That article’s takeaway was simple: The ride-hailing revolution pioneered by Uber and Lyft poses to give mobility—and hence access to care—to millions of home-bound Americans suffering from chronic disease.

That’s not an exaggeration.

After all, mobility and healthcare are intimately intertwined. Patients relying on public transit are more likely to be late for, or miss appointments entirely, than those with reliable access to a car, according to public studies. And those missed appointments add up. The Harvard Business Review points to one survey estimating that in 2006 Americans missed 900 million medical appointments at a cost of more than $150 billion. In the last decade, it’s doubtful those costs have gone anywhere but up, making the problem even more acute.

Importantly, many other health-focused startups and technology-minded hospitals have seized on the trend, promising to eat into a clear source of waste in the already-wasteful American health system.

Startups like Circulation have built their new business models around partnering with Uber to make it easier for patients just like Ms. Stowe to get to their doctors.

But I’d argue the healthcare trend posed by Uber and Lyft goes beyond merely logistics. Instead, the real transformation hitting medicine isn’t merely a transportation revolution but a broader revolution in consumer demand.

The on-demand economy, which Uber and Lyft have come to typify during this mobile-driven tech boom, has created a new breed of healthcare consumers who demand care with increasing disregard for place or time.

Put simply, they want their care where and when they want it. They also increasingly expect transparent prices, little to no wait times and mobile digital tools to make appointments, track their health and access care, according to a 2016 Deloitte survey of health care consumers.

Some healthcare players get it. Some still don’t.

One digital health startup that’s gotten the memo, in terms of user experience, is Oscar Health.

Oscar, which markets itself as “a new kind of health insurance company,” aims to transform people’s smartphones into hubs of their personal health. Currently operating in California, Texas and New York, Oscar uses an intuitive, accessible mobile app that allows a patient to enter a health problem—say your kid has a bad cough, or you need a physical—and get a callback from a doctor within 10 minutes, according to the company. One anonymous patient on the company’s website claims he or she received a prescription within 30 minutes of entering their malady using the app.

Another insurance startup, Clover Health, is hoping its data-driven approach it can rebuild healthcare for seniors from the ground up. Clover is trying to use data analysis and preventive care to improve healthcare for seniors and to give customers who use private versions of Medicare a cheaper option.

The company’s software is supposed to recognize when patients need medical treatment and then preventively intervene in their care. In fact, it can often even play “quarterback” for all the medical records and interventions a senior citizen has and help doctors make decisions. For example, it even notices when a patient doesn’t refill a prescription and makes the doctor aware that the patient may not be taking a medicine.

Then there’sOne Medical Group , a concierge medical practice that promises high-quality care at an affordable rate and reimagines the customer experience so that it’s so much more user-friendly.

The companyoversees a network of 250-plus primary care specialists in 40 US cities, enabling patients to book last-minute appointments on their phones, get certain prescriptions via the One Medical app, and access health records online. Itadded 80,000 new patients in 2015 and brought in a number of enterprise clients.

Companies like mine, HealthEdge—a Burlington, Massachusetts-based healthcare payor-focused software company–saw this trend coming a decade ago, and we’ve been prepping our health insurer clients accordingly.

To be sure, healthcare is different animal from a lot of industries. The regulatory barriers to entry slow change, for better and worse, often insulating some healthcare players from the types of competitive pressures most companies face.

But private health players are not insulated from the market’s changing demands in the long-run.

Like every other sector of the economy already transformed by the on-demand revolution—from take-out and groceries to rental cars, used car buying, beauty, shaving, laundry and just retail in general—the market will reward the innovators who respond nimbly to consumer caprice.

The rest it’ll eventually send to join Blockbuster and Borders.

Categories: OIG Advisory Opinions

The Unlovable Political Logic of Health Reform

The Healthcare Blog - Wed, 01/11/2017 - 13:42


Every so often, voters conspire to hand unambiguous control over the federal government to a single political party.  It is rarely the unmixed blessing that party strategists dream it to be.  President  Clinton got a Democratic Congress, and promptly lost it two years later in the wake of the famously unproductive HillaryCare debate.   President George W Bush invaded Iraq.  Lyndon Johnson waged War on Poverty and sent a half-million baby boomers to Vietnam. 

More recently, President Obama had a (brief) filibuster proof Senate majority and an eighty vote House majority entering 2009.  Despite this huge advantage, the passage of ObamaCare turned into a costly, fifteen-month political cliffhanger. A lot of Obama’s problem wasn’t merely an increasingly angry Republican minority but a substantial (and imperiled) moderate wing of his own party

What can the resurgent Republicans learn from these cautionary tales as they enter Donald Trump’s Presidency?   What they will come to realize is that often, “friendly fire” is as perilous a risk as anything the other party throws at you.  The Republicans are actually in a much less strong position than they appear as they enter 2017.     

Today’s Republican Party is actually riven into at least four distinct factions, each of which has its own health policy agenda and hot buttons.  Arrayed from Far Right to Center Right, these factions are:

  1. The Hamburger Hill Republicans.  (See Wikipedia definition.) Exemplars include the House Freedom Caucus, who won office in the Tea Party rebellion, and would be perfectly comfortable repealing ObamaCare without replacing it, and letting states, particularly of the blue variety, sort out the carnage. A lot of them are “safe seat” Red State Republicans who can afford to take some electoral risks in the name of party principle.
  2. The Take Your Castor Oil Republicans.  Exemplars include most prominently Speaker Paul Ryan, and also HHS Sec. Designate Dr. Tom Price, who believe that entitlement reform is actually a bigger deal, fiscally and politically, than repealing ObamaCare, and who favor cutting entitlement spending, “pro-competitive solutions” (whatever that means in a highly concentrated health industry), and also compelling “wealthy” Americans to pay a bigger share of their healthcare bill.
  3. The Pragmatic Republicans.  Exemplars include:  Lamar Alexander, Orrin Hatch and Kevin Brady, all burdened with the realism borne of Chairmanships of major Committees, all of whom would prefer to strap on a parachute before exiting the airplane on Repealing and Replacing ObamaCare and who are also cognizant of the cost of ownership of the healthcare issue.
  4. Ten Republican Governors Who Expanded Medicaid.  Exemplars include:  Governors Snyder, Kasich, Brewer, Sandoval, Martinez, Baker, etc. whose states could be on the hook for billions in additional state costs if ObamaCare’s ten million person Medicaid expansion is scaled back.  Each of these Governors has Two Senators to advocate on their states’ behalf.   Vice President to be Pence also expanded Medicaid while Governor of Indiana. 

Interestingly, the new Republican standard bearer, Donald Trump (who was until 2012 registered for thirteen years in New York’s independent but left-leaning Reform party), ran to the left of his Congressional base on healthcare issues.  While he advocated “repeal and replacement ” of ObamaCare with “something terrific” (aka “TerrifiCare”), he also advocated “covering everybody” and “not cutting Social Security or Medicare”. 

If Trump had sided with either of the two dominant Congressional factions (Hamburger Hill or Castor Oil), he probably would not have gotten enough hard pressed working class votes to put him in office.   While at least three of the Republican factions outlined above are nominally committed to getting rid of ObamaCare, they are variously sensitive to the political cost of dislocating 20 million presently covered Americans, as many as 6 million of whom may have voted for Trump. 

In the past two weeks, the momentum to “repeal” has been blunted by divisions over the timing and content of the “replace” part of the Republican agenda.    The stickiest wicket by far:   rapidly repealing the roughly trillion in taxes and fees in ObamaCare would require a LOT of replacement revenues from somewhere (provider payments, import duties on Chinese manufactured goods, capping the tax deductibility of corporate health benefits, you name it), or those 20 million newly insured folks really do get thrown to the wolves.

It is easy to understand why postponing a big new revenue raise for a few years might be attractive politically;  but what pays for all those premium subsidies and Medicaid matching payments to states in the interim? There is a very good reason why we haven’t yet seen a credible replacement plan. Big revenue raises are best done “secretly” at 2:30 in the morning in a last-minute Reconciliation bill mark-up, not in the klieg light glare of a gigantic press conference. 

Since you can only lose two Senate Republican votes before use of reconciliation to repeal ObamaCare is not viable, the political path leading to repeal is narrower and rockier than most people think.  One Republican Senator, Rand Paul, has already declared that he will not vote for repealing ObamaCare without a viable replacement, and several others (Cotton, Corker, Portman. et.al.) have echoed his concern.  A rapid Senate vote for repeal and then replacement in two or three years looks like an increasingly questionable strategy.

The larger question, of course, is what the electoral payoff from killing ObamaCare is likely to be.  Certainly, taking health insurance away from twenty million newly insured folks because of a diffuse ideological concern about “government-run healthcare” doesn’t seem to be an obvious political winner.  The redistribution of those trillion dollars in taxes on high income individuals and fees from health insurers, device manufacturers, etc.  to pay for those health benefits may be the real rub for the Hamburger Hill caucus. 

Indeed, the vehemence of the Republican opposition to ObamaCare may have been driven by its seeming irreversibility; once granted, an entitlement is almost impossible to take away.

The classic interest group political logic of granting a government entitlement has historically been was that delivering tangible benefits to a specific group of voters would bind them to the party who gave it to them.   Roosevelt gave the elderly Social Security and Lyndon Johnson gave them Medicare; therefore, elderly voters would always think fondly of Democrats, etc. 

Obama’s reward for passing ObamaCare, on the other hand, was to lose first one, then the other house of Congress in the next two non-Presidential election cycles, and to help birth the Tea Party, a still powerful insurgent faction of the Republican party.   What changed?  Well, after the post-World War II creation of the Veterans Administration, then Medicare for the elderly and disabled and Medicaid for the categorically needy, and the bipartisan S-CHIP for kids, the most “attractive” subgroups of vulnerable Americans already had their health care entitlement. 

Those who remained uninsured were a mélange of marginalized folks- young people transitioning from school to work or stuck in their parents’ basements, part-time workers and the “new” working class in low wage jobs without benefits, single unemployed people, immigrants, documented or otherwise, victims of age discrimination in employment but years shy of Medicare eligibility, people rendered uninsurable by chronic illnesses.  There was no common denominator other than their marginality.      

Other than the hospitals, who are obligated by federal law (EMTALA, 1986) to treat them, there was almost no focused interest group advocacy on behalf of the uninsured; rather, it was almost Great Society “muscle memory”- an inchoate desire to get the rest of the way to universal coverage- rather than some massive political reward that drove Obama to greenlight health reform as his highest domestic policy priority.   

In retrospect, investing his limited stack of political chips not just in avoiding a Depression, but in more vigorous economic growth, as his political team (notably Rahm Emanuel and David Axelrod) advocated, might have been a better bet than doubling down on healthcare.  Hindsight is, of course, always crystal clear and 20/20.

Nevertheless, the hand the Republicans seem to have dealt themselves on ObamaCare seems even less promising:  how do you unmake the law without stranding 20 million people and somehow provide them something “better” than ObamaCare’s mixture of Medicaid and heavily subsidized high deductible private coverage without either raising taxes further, adding to the deficit or cutting caregiver payments to pay for it.    As the new Republican majority will learn in the next year, healthcare is an issue that you can win and still lose.  President Trump’s skill as a dealmaker will likely meet an early and stern test.

Jeff Goldsmith is President, Health Futures and Assoc Professor, Public Health Sciences, University of Virginia.

Categories: OIG Advisory Opinions

A Bird’s Eye View from the Penalty Box

The Healthcare Blog - Tue, 01/10/2017 - 17:57

The Centers for Medicare & Medicaid Services (CMS) EHR Incentive Program—also known as Meaningful Use (MU)—initially provided incentives to accelerate the adoption of electronic health records (EHRs) to meet certified program  requirements.  Many physicians were mandated to change over to electronic records at the cost of tens of thousands of dollars.  Electronic records have never been shown to improve patient care or outcomes with statistical significance, the criteria physicians routinely use when making care decisions.

Physicians who failed to participate in MU would receive penalties in the form of reduced Medicare reimbursements automatically. To avoid a penalty, physicians had to implement certified electronic health records (CEHRT) and demonstrate MU of that technology through an attestation process at the end of each reporting period.  There were 10 data specifications. Approximately 209,000 physicians were facing penalties at the start of 2016, almost one-fourth of the U.S. physician workforce.

By the end of 2015, CMS had stated it would broadly accept applications for hardship exemptions because of the delayed publication of the program regulations.  Applications for physicians were due by July 1, 2016.

A friend of mine opened a private practice in October 2015 and thought she was on the right path toward submitting data and meeting MU requirements.  One of the most challenging things about running a business is hiring excellent ancillary staff for support.  Employees should be smart, capable, and well, able to reliably submit data.  It is worthwhile to note physicians receive no business training in medical school, so the learning curve is steep for all physicians including my friend, who is a family practice doctor.

There are mistakes and triumph along the way and my friends’ misstep was hiring an office manager who ultimately was not a good fit – unbeknownst to the physician, she did not submit ANY data.  The notification arrived in the mail that this practice did not meet all 10 MU program requirements. “We had recently acquired a new EHR (cost 6K) and were uncertain how to verify data had been submitted.  We were working on it.” She contacted CMS and they denied any opportunity for appeal.

Welcome to the penalty box, with no term limit. Every single visit, procedure, counseling session, or medical intervention will have 2% shaved off the top.  The average family physician receives about $100,000 a year in Medicare reimbursements, so a 2% penalty for 2017 will become  3% in 2018, and increase to 4% in 2019—a combined three-year total of $9,000.

This total overlooks the increased costs and overhead of running a business. Staff members get raises; medical supplies cost more, and even medical license fees continue increasing — all while the physicians’ income is decreasing with no end in sight.

This young physician is working in her hometown somewhere in Middle America, a small community, with a population of 13,000.  She is there because her family and friends are nearby.  She loves her patients; 50% of them are insured by Medicare and Medicaid.  She provides high quality care; for which she will be paid less and less each year.

This physician is neither lazy nor stupid.  She is just not a businesswoman, yet.  She opened her practice straight out of residency and was under the impression she did not need to submit data immediately while getting things settled.  Once she began “submitting” data, she trusted the office manager to do it, because she was otherwise engrossed in seeing patients, (a part of our profession likely to disappear in the near future.)   The art of practicing medicine will become an outdated and ridiculous notion at the rate we are going.

My advice for every primary care physician in this country is to opt-out of Medicare and Medicaid so our businesses can survive.  This particular physician cannot do that as the hospital has guaranteed her salary for one year while she gets her practice started.  What a great deal for the hospital! The primary care physician is left to their own devices, to build a practice, and serve as a source of revenue feeding the specialists, who are employed by the hospital in this particular scenario.  The hospital did offer to employ her; however the wage was far below the industry standard.

This family physician might reluctantly have to close her Medicaid and Medicare panels anyway. If her business begins failing due to the penalties being leveraged, she will opt out of both Medicare and Medicaid.  So will us all if this punitive payment structure continues unabated.

This scenario is repeating itself over and over across the country every day.  Private practice physicians are stuck between a rock and hard place.  Indentured servitude is on one side and the freedom to independently practice medicine is on the other.

Financial analyst John Graham at Forbes wrote in April of 2015 that MACRA was a “fiscally irresponsible approach to increasing the amount the federal government spends on Medicare’s physicians’ services.”  What should we do when working with a fiscally irresponsible person?  Do we jump on board and begin a business partnership?  No.  Then why are physicians acquiescing to this abuse?  MACRA penalties will begin in 2019 at 4% and increase to 9% by 2022.  Who can afford to stay in practice at the rate of decline in reimbursement?

In general, physicians tend to be compassionate and empathetic, they are rule followers, and do the ‘right’ thing; traveling on the straight and narrow should not bring us to the point where we cannot make more than we would working  in a fast food restaurant.  The answer is we must opt-out until changes are made.  Private practice physicians need to realize we are on our own.  The AMA, ACP, and CMS are working in direct opposition to independent physicians fighting hard to break the chains that bind us.  It is simply time to let go and walk away.

Suneel Dhand recently wrote, “it’s not just the ace of spades that the doctor and patient are holding — but the entire deck.”  He is right.  It is time for us to become dealers.  And I want to play dealers’ choice.

Categories: OIG Advisory Opinions

Should Cleveland Clinic’s Anti-Vax Physician Lose His Medical License?

The Healthcare Blog - Tue, 01/10/2017 - 09:27

Years ago, when I was less inflexible, I took up Pilates. My instructor, Jim, a charming chap with an infectious laughter, was a 911 truther. I’d egg him on to hear about his conspiracy theories. Jim believed that 911 was concocted by Bush and Haliburton so that the U.S. could invade Iraq to capture their oil. He thought that United Flight 93 never took off. Whatever happened after 911 became the motivation for 911. He was the sort of person who would have concluded that Mahatma Gandhi plotted the Second World War to free India from British rule.

I began to suspect that Jim was, to put it charitably, nice but dim. But he wasn’t that dim. He corrected me when I once, innocently, underpaid him. He was also smart at advertising and when he met my wife, he told her that she should join me for Pilates because it would strengthen our marital bond. My wife politely declined the bond strengthening. He was also very cued up with the nutritional sciences and warned me, without leaving a trace of irony, “don’t believe everything you read about diets.”

911 truthers remind me of antivaxxers. They share a deep paranoia which is impervious to logic and science and which becomes stronger when confronted with logic and science. What doesn’t change their minds, and little does, makes their beliefs stronger.

Recently, Dr. Daniel Neides from Cleveland Clinic, opined about the risks of immunization. Writing in the local newspaper, which I wouldn’t have known about if it weren’t for Twitter’s excitable crowd, he cautioned his readers about the industry and toxins. He said “we live in a toxic soup.” He alluded that vaccinations cause autism. For good scientific measure, he threw in the microbiome – an entity which will lead to much confusion before clarification.

The history of the anti-vaccination movement is the history of paranoia in the developed world. People in developing worlds don’t fear vaccinations – they have genuine fears to contend with. Vaccine phobia, though a marker of scientific illiteracy, can be traced to heavy paranoia of industry, and a belief in environmental utopianism. Only once in history has there been purer environmentalists – the Digambar sect of Jainism who believed that wearing clothes harmed the environment (don’t go looking for them – they no longer exist).

With a bit of historical reflection, you can see how “vaccines cause autism” got out of hand. I highly recommend Paul Offit’s “Autism’s False Prophets.” Andrew Wakefield’s now discredited research linking MMR with autism made social justice warriors positively tumescent. It’s easy to see why – greedy industrialists and greedy doctors polluting little, unsuspecting babies, that’s candy for righteous rage. It’s no surprise that Wakefield’s research was funded by trial lawyers –  a profession which makes a lot of money exploiting paranoia about greedy capitalists. Wakefield’s discredited findings moved the FDA and the Congress. Both right and left wing publications warned people of the dangers of immunization. It is possible that Cherie Blair, Tony Blair’s chakra-believing wife, and a gifted lawyer, also fell for the paranoia.

The tide has turned. It is vaccine skepticism which evokes considerable rage. Fighting antivaxxers is now the lowest common denominator of intellectual probity. No doubt, the fight is important, and, it seems, to be seen fighting is also important. To me, the antivaxxers, one of the most demonized constituencies, evoke pity rather than anger. I feel that if I shouted “boo” they’d collapse into a pile of liquid. But shaming them, by calling them selfish for free-riding herd immunity and putting immunosuppressed people at-risk, or stupid, or scientific illiterates, will unlikely persuade them to get vaccinated. Nor will they be persuaded by reams of data or a powerpoint showing that the confidence intervals for the likelihood that vaccinations cause autism, like the point estimate, is zero.

But doctors should know better. Should the anti-vax physician have his medical license revoked? Should his employer fire him? The near-unanimous view of physicians on Twitter was affirmative for the latter, and a desirability for the former. But once you think beyond stage 1, you’ll realize the matter isn’t so simple.

Let’s explore the case for revoking his medical license. The logic is taut. His piece advising against immunization is jeopardizing patients’ lives. But is that true? I mean is it true that there were people undecided about vaccinations, or felt that they should be vaccinated who, after reading his piece, and persuaded by his credibility as a doctor in the prestigious Cleveland Clinic, have decided against being vaccinated? Plausibly yes, but arguably no. Antivaxxers reject vaccination despite the evidence, and despite persuasion from mighty Ivy league doctors to get vaccinated. Their sensitivity to doctor’s advice to get vaccinated, whether positive or negative, is likely zero. They’d stay unvaccinated despite his piece, not because of it.

Thus, it’s likely that he was preaching to the choir and unlikely that the net mass of unvaccinated people changed by his forgettable piece. And, if you’re going to make an empirical case that he led to net harm, you’d also have to blame the social media which, in a Streisand effect, helped his piece reach people who wouldn’t have read it.

How about this rationale: physicians skeptical in the public domain about mass immunization, an indisputable standard of care (SOC), are unfit to practice? The rationale appeals because doctors with such scientific illiteracy so as to peddle fears about vaccination may be clinically incompetent. But let’s parse the issue because there are two problems. The first is that the anti-vax sentiment of doctors might not affect their clinical work. If they were radiologists, for example, adept at detecting acute pathology, it would scant matter what they thought about immunizations. You might find them annoying, but if they quietly cranked through the list, never missing important findings, would it matter to a medical tribunal if they believed in Santa Claus, or that the moon landing was a hoax, or that immunizations cause autism?

The second problem is that anti-vax doctors might not practice what they blog – that is they may still offer their patients vaccinations. Furthermore, they may resort to that capacious formulation called shared decision making, to show that the patient’s decision not to be vaccinated was the patient’s decision, not theirs. How will you prove that this was not so, particularly if the patient was an antivaxxer?

I’m unable to find any legal precedence of a physician found guilty of malpractice, or who has lost his or her medical license, for merely questioning an indisputable SOC in the public domain – if you know of such a case please let me know. It will be a tough case to try because it would, in effect, censor skepticism, and in a country with a strong tradition of free speech, evidenced by the protracted Scopes Monkey Trial, censoring skepticism, even if the skepticism is idiotic, would likely reach the supreme court. Antivaxxers would be emboldened and the anti-vax doctor would become a martyr. Vaccinations would become even more politicized than they are today.

There is clearly legitimate and illegitimate skepticism – skepticism of statins for primary prevention, now endorsed by the USPSTF and, therefore, standard of care, is legitimate, and skepticism of vaccinations is illegitimate. This begs the question: how do we define legitimate skepticism? To that, I can offer no better answer than Potter Stewart’s. When asked to define pornography, he said: “I know it when I see it.” You could argue that vaccinations are different from statins because not being vaccinated has negative externalities as it endangers others, and that vaccinations have the same effect across the whole group, neither of which is true for statins. However, these are post hoc rationalizations why skepticism of vaccinations should be censored. There’s no formalized framework for what’s legitimate skepticism of standard of care, in general, which impugns skepticism of vaccinations but doesn’t impugn skepticism of statins.

Censoring skepticism of vaccinations is a slippery slope which could be applied to any standard of care. Don’t think of the present, think what might happen fifty years from now. Science progresses when someone questions the status quo. Do we really wish to endanger this avenue for the sake of one physician?

Silencing skeptics in the U.S. is never a good idea as climate scientist, Michael Mann has found. He sued writer, Mark Steyn, for calling his research fraudulent. Whatever the outcome of the trial, Steyn has far from been silenced – he has upped the ante in his derision of Mann, and has even written a book solely devoted to ridiculing Mann. The suit has become an avoidable own goal for Mann. Climate science is already excessively politicized, to the detriment of the science, and Mann’s lawsuit doesn’t help – even if Mann wins, climate science loses.

The Cleveland Clinic, a private entity, where the First Amendment doesn’t apply, can dismiss the physician. But they may not wish to. Dr. Neides heads their Wellness Unit. Cleveland Clinic is the premier center, it seems, not only for mitral valve repair but Reiki and other para-medical phenomena. It’s likely that his views, specifically his morbid fear of industry and toxins, comports nicely with the mumbo-jumbo ethos of Wellness programs, an initiative which is the mother of quackery and which, it must be reminded, is enshrined in Obamacare, and whose provenance is, amongst other things, a study by preeminent economists. To put it bluntly, he’s quite possibly a cash cow for the clinic.  The brouhaha over his anti-vax piece is likely to draw even bigger crowds enamored by chakras and complementary and alternative medicine, meaning it won’t have harmed the Clinic’s bottom line. Physicians on Twitter just gave the Clinic’s Wellness Institute free publicity – congratulations.

Were I the Healthcare Czar I’d throw wellness programs into the Potomac, but I’m not the Czar, and there are no Czars in the U.S. who can tell a hospital not to offer aromatherapy. Will the Clinic lose credibility for employing a physician with anti-vax views? I doubt it. The rich oil sheikhs from the Gulf countries couldn’t care less about a doctor in charge of aromatherapy with crank theories about immunizations. Just because something bothers the medical commenteriat, doesn’t mean it bothers patients.

To save science, you need skepticism. To save skepticism, you must tolerate stupidity. But there are other lessons. Vaccination phobia is the perfect storm of paranoia. We’re conquering hype. We’re not doing too well with paranoia. Evidence and science won’t reduce paranoia. It is the culture which begets paranoia which should be addressed. Perhaps we should think twice before we demonize, whether it be doctors, industry, regulators, lawyers, insurers, government, or markets, as we can so easily excessively and irreparably demonize.

The lesson I’ve drawn from conspiracy and non-conspiracy theorists is that crank can coexist with competence and competence can coexist with stupidity. May be if we treated the antivaxxers with a smidge of respect they might, just might, get over their vaccination phobia.

About the Author

Saurabh Jha is a radiologist and a contributing editor to THCB who can be reached on Twitter @RogueRad. He is up to date with all his immunizations, including Japanese B Encephalitis.

 

 

 

 

 

 

 

 

Categories: OIG Advisory Opinions

JP Morgan Week: Lessons For Investors From the Theranos Story

The Healthcare Blog - Mon, 01/09/2017 - 23:16

Theranos raised $900 million from investors and achieved a market capitalization of nearly $9 billion. Today, its investors may have lost most of their money and the company is pursuing a new strategy. It’s a familiar story to lenders and investors and likely to be hallway chatter today as the 35th Annual J. P. Morgan Healthcare Conference convenes in San Francisco.

Theranos targeted the lucrative blood testing market offering a new technology that allowed labs to do 30 blood tests almost instantly with a single drop of blood. The company began its operations in 2003 with a $5.8 million investment from Draper, Fisher, Jurvetson and other venture funds. By 2010, it had raised $83.4 million more in three follow-on rounds and then scored a reported $633 million investment in 2014 increasing its market value to $9 billion. In those 11 years, the company operated in relative secrecy: its 60-plus patent filings gave clues about its activities while its CEO, Stanford drop-out Elizabeth Holmes, shunned the spotlight.

The company used its capital to hire 800 and open labs in Arizona and California. By 2015, it had developed collaborative deals with Capital Blue Cross (PA), Walgreens, Cleveland Clinic and others, built a blue-chip board including former Senators Bill Frist and Sam Nunn and incoming Secretary of Defense James “Mad Dog” Mattis and received approvals from the FDA for its HSV-1 test and CLIA for labs to use its devices. Forbes named Holmes among its richest in 2014, with an estimated net worth of $4.5 billion and media attention followed. In a Stanford Business School profile (February 2, 2015), she told the interviewer that she had no Plan B for her company, characterizing contingency planning as an “act of failure.” But things changed.

By the spring of 2016, the company faced questions about its Edison technology, cease and desist orders and an array of lawsuits. Media coverage followed. A critical piece in the Wall Street Journal (October 16, 2015) by John Carreyrou observed “Hot Startup Theranos Has Struggled with Its Blood-Test Technology.” Then followed a stream of articles by a trio of WSJ business journalists (Carreyrou, Christopher Weaver, and Michael Siconolfi) exposing the company to more scrutiny: “Agony, Alarm and Anger for People Hurt by Theranos Botched Blood Tests” (WSJ October 20, 2016), “Theranos Whistleblower Shook the Company and His Family” (WSJ November 18, 2016), “Big Names take Hit on Theranos” (WSJ November 28, 2016),  “Theranos Ties Pose Possible Obstacles for Mattis Confirmation” (WSJ December 2, 2016),“Theranos Foresaw Huge Growth in Revenues and Profits” (WSJ December 5, 2016) and “Theranos Slashes Staff, Voids more Test Results” (WSJ January 6, 2017). And coverage in the New York Times, Forbes, and other business media followed suit. Theranos is now pursuing Plan B, a new mini-lab concept, having laid off all but 200 of its workforce.

Stories like Theranos are familiar to every investor and lender gathered in San Francisco this week. All of them have had disappointing results because an organization where they’ve parked capital as debt or equity has failed to meet expectations due to poor execution, or changing market conditions derailed their plan. And some have faced the enormity of challenges like those facing Theranos today in the companies/organizations they’ve funded.

As JPM attendees listen to CEOs and CFOs tell their stories this week, they’ll filter their business propositions through imperatives for investing or lending, regardless of the sexiness of their pitches:

1. GROWTH IS ESSENTIAL.

2. FOCUSED EXECUTION IS KEY.

3. AN EFFECTIVE CEO IS VITAL.

4. BOARDS MUST BE INDEPENDENT AND OBJECTIVE.

5. THE ORGANIZATION’S VALUE PROPOSITION MUST BE CLEAR.

They understand the importance of an organization’s reputation and solicit insight from former colleagues about the organization’s culture and the capability of its management.

Looming prominently at JPM this week is speculation about the Trump administration’s replacement for the Affordable Care Act. No one knows for sure what’s ahead but two core beliefs seem fundamental to its forthcoming policies and directives: 1-private sector solutions are better than “big government” and 2-getting consumers to have more skin in the game will force more accountability into the system. That bodes well for healthcare lending and investing, driving more deals and increased demand for their capital.

So as attendees flood the lobby of the St. Francis Hotel this week, it’s certain they’ll compare notes about what’s next in healthcare and make bets on the next winners and losers. They’ll ruminate about the plights of companies like Theranos, the big consolidation plays on the landscape and game-changing innovations in how care is delivered and financed.

The JP Morgan conference is Woodstock for lenders and investors who want to make money with their money. At the end of the day, healthcare is a big business. Organizations, whether not for profit or investor owned, need funds to innovate and grow. That’s the reality of our industry and why everyone can learn from Theranos.

Categories: OIG Advisory Opinions

A Brief History of Why the Republicans Have No Replacement For Obamacare

The Healthcare Blog - Sun, 01/08/2017 - 12:59

There is no conservative replacement health reform plan for Obamacare — because Obamacare is a conservative health reform plan.

After six years of promising to repeal ‘n’ replace the President’s signature domestic achievement, Republican lawmakers have no coherent alternative to the Affordable Care Act for one good reason: because the Affordable Care Act was once the market-based alternative to a real, not imagined, “government takeover” of health care.

What has always made the ACA a political pariah to Republicans, typified by the bizarre claim by House Speaker Paul Ryan (R-WI) on Wednesday that “Obamacare” has “ruined” and “dismantled” our health care system, is the plan’s namesake — far more than its necessarily complex architecture or any of its actual details, unless you count the details they made up.

And so, if only for kicks, how about some actual historic facts and context about a health reform plan that was actually decades in the making, only three years into full implementation, and on the eve of blind destruction by demagogues who have no idea what they’re taking about.

The chart below illustrates where the ACA sits, ideologically, relative to all other health reform plan models.

This chart places the ACA along a continuum of all serious reform options developed, debated, and discarded or ignored since the 1980s. They are all here: from the single-payer, centrally controlled models popular with those who detest corporations and the corrupting influence of money in medicine — two actual, not imagined “government takeovers of health care” — to a fully free-market, laissez faire model favored by those who detest regulation and the heavy hand of government in medicine.

On the far left, the federal (or provincial) government is the main insurer, owns most hospitals, and employs most doctors. This pure form of single-payer seems to be supported or reviled in equal measure, especially by the nation’s physicians. As a model for nationwide reform, it is as much a religion as a public policy framework — people believe it will be either health care’s Messiah or its anti-Christ — and no one will convince them otherwise. This model is the foundation for many of the systems in Europe, and the systems in Canada, Australia, New Zealand, and Singapore. Unbeknownst to many under their actual care today, there are two working systems based on this model in the US today: Kaiser, and the Veterans Health Administration.

The second model, Medicare-for-All, differs from the pure form of single-payer by retaining the current independence of most hospitals and doctors. This model jettisons private insurance companies and covers all Americans directly, while an all-encompassing Medicare program pays for covered care delivered by today’s crazy quilt of providers: large and small physician groups, for-profit, religious-affiliated, independent and academic hospitals, the works. This is what Medicare beneficiaries have today — except for the 31 percent who opt for privatized “Medicare Advantage” plans offered by commercial insurers. Medicare-for-all is supported by those who believe it would bring the relative efficiencies, fairness, and low administrative costs of Medicare to all of us — and reviled by those who think Medicare works like hell. Because there are oceans of data to support both views, this too is ultimately a matter of secular faith: government, good; government, evil.

To the right of Medicare-for-all is “managed competition,” the basis for the reform plan proposed in 1993 by President Bill and First Lady Hillary Clinton and derided as “Hillarycare.” This model is built on the traditional system of multiple private insurers and providers, but highly organizes and regulates both. It achieves universal access by mandating employers and individuals to participate and by requiring everyone — with or without current coverage — to give up what they have and commit to one of several competing vertical insurer/provider entities. The managed competition model is based on managed care theories developed in the 1970s; when proposed by the Clintons in 1990s, it was popular with much of the Washington technocracy — and vilified by conservatives. Modified versions of this model exist in Germany and Israel, and in a handful of US markets (e.g., Hawaii, San Francisco and Portland, Oregon, sort of) with vertically integrated providers that compete with Kaiser.

Back in the mid-1990s, most Republicans and many health industry experts attacked “HillaryCare” as cumbersome, over-engineered, and hyper-bureaucratic; it was destroyed in the court of public opinion by an insurer-funded TV ad campaign that people remember better than any details of the plan itself. Conservatives hated the plan so much, in fact, that the folks over at the Heritage Foundation came up with their own market-based alternative. The plan achieved universal access by requiring people to purchase their own insurance, but enabled them to do so through a competitive marketplace, with subsidies for the poor. Hmm. Sounds familiar, no?

The Heritage plan sounds familiar because it was the conservative alternative to government-driven plans like single-payer and Hillarycare, and because it became the basis for Mitt Romney’s health reform plan implemented in Massachusetts — which is turn was the basis for – for what? It was the basis for the plan one click from the far right of our spectrum of health reform models: President Obama’s plan, known as the “Patient Protection and Affordable Care Act,” or the ACA, until it was branded — derisively by Republicans — as “Obamacare.” (I tried to point all this out in the New York Times in 2012, while working at a conservative think tank, for which I was ridiculed by my own colleagues, excoriated on Capitol Hill, and received death threats, a few years before getting death threats for publishing actual facts was in vogue.)

Notwithstanding all the political noise that long ago drowned out all discussion of actual facts about the actual law: Obamacare is a radical endorsement and extension of the status quo. This is why everything that was ever wrong with the health insurance system — ever increasing premiums, deductibles, and co-payments, the perennial narrowing networks of providers, and all of its byzantine administrative processes — has now been laid at the feet of the plan. This is why the House Speaker has no qualms about uttering utter nonsense about Obamacare “ruining” and “dismantling” the health care system.

To minimize actual (not perceived or politicized) disruption to most people’s coverage – a major and valid criticism of the Clinton plan — the architects of the ACA retained most of the features of the traditional employer, insurance and provider systems. The ACA merely expanded the system toward universal access by mandating that most of the uninsured participate in it, unless their incomes were low enough to qualify them for an expanded version of Medicaid.

Because Obamacare requires insurers to cover all comers — and does away with caps on those with catastrophically expensive medical situations — it is funded by mandated participation by all of us too young for Medicare and too well off for traditional Medicaid, either directly or through employers. Expanding the exact same plan to include Health Savings Accounts and allowing consumers to buy coverage across the stateliness — two line-item policy ideas Republicans tout as the major levers in their magical mystery replacement plan — could be appended onto the ACA with a dozen pages of legislation.

By contrast, the only “replacement” model of any substance that breaks to the right of Obamacare – the one free market economists have been championing for decades — would be truly disruptive and a complete political non-starter.

This model, on the far right of the chart above, would be a truly free market health care system. It would allow people with commercial insurance or no insurance to purchase their own coverage in an open market; and it would not require anyone to purchase insurance, nor any insurer to cover anyone they did not want to. Under this model, kicked around in the back pages of the health policy literature since the 1990s, all purchasing decisions about coverage and plan design are left to individuals and insurers.

Economists believe this Lord of the Flies model would radically reshape health insurance and downstream medical markets, by driving efficiency in pricing and reducing excess medical resource spending. They believe that market distortions created by the tax deductibility of health insurance purchasing are enormous — and that the extra political mile it would take to eliminate this tax deduction would be well worth the effort in terms of health care marketplace correction and system self-reform.

As a corollary to this belief, this “direct retail” model extracts employers from the system altogether, converting the health insurance market into something more akin to auto and homeowners insurance markets and maximizing the power of consumer market forces to control health care spending in general. Under this model, everyone is free to purchase whatever mix of insurance and services they want and can find, from whatever organization will sell to them, at whatever price the market yields. Modified versions of this model exist in China and India on top of threadbare single-payer systems incapable of serving the needs of their large and growing populations and emerging middle classes.

Proponents of the only model to the right of Obamacare believe that its inherent pricing efficiency would drive the marketplace to very high-deductible insurance plans, while converting a great deal of medical care to a cash-and-carry system. They believe this model would drive healthy Americans toward Health Savings Accounts and greatly benefit from consumers purchasing whatever plan they wanted across state lines.

In terms of moving us toward universal access, they would augment this model by allowing lower-income people, the uninsured and others priced out of these liberated insurance markets with either a “premium support” or “voucher” program — two ideas that sound similar but play out differently as health care costs increase. The subsidy mechanism — and its associated semantic and political branding wars over “premium support” vs. “voucher” — is also the economic fulcrum in Congressman Paul Ryan’s proposal in 2013 for reforming Medicare.

That Obamacare is a right-of-center plan, especially when viewed relative to all viable alternatives, explains why it has always had so little political support from anyone. Liberals hate Obamacare because it is not single-payer, and feeds tens of millions of newly insured people to what they revile as a money-gobbling, profit-obsessed health insurance dragon. Conservatives hate Obamacare because it is the heavy hand of government choking whatever air is left out of the current, dysfunctional health insurance market — and because they cannot see beyond their political rage at President Obama to recognize their own ideas at the core of his health reform plan. Obamacare has always been a shabby political step-child.

So where is that Republican replacement plan? Don’t hold your breath. Health Savings Accounts and buying insurance across state lines may sound nifty to people who have no idea what that means or might look like, but they are at best minor endorsements and extensions of the status quo, chocolate and rainbow sprinkles on the same old sour ice cream.

The only meaningful right-wing replacement plan is the only one to the right of Obamacare in our chart: a health insurance market free-for-all. No tax deductibility, no employer involvement, no fuss, no muss. And what would be the actual effect of implementing that? Everyone who has insurance through their employer today – which is to say almost everybody not in Medicare or Medicaid — suddenly pays a whole lot more in taxes. Not exactly what any of the Republicans clamoring to repeal ‘n’ replace want to sell back home.

This is the real reason why, when asked for the details for their replacement plan, the Republicans in Congress have always had, and still have, exactly and only one real answer: “Our replacement plan is Obamacare sucks.”

Stay tuned for more of nothing.

Categories: OIG Advisory Opinions

Improving MACRA’s Chances of Success

The Healthcare Blog - Fri, 01/06/2017 - 14:06

Many providers view the Medicare Access and CHIP Reauthorization Act of 2016 (MACRA) with skepticism. MACRA represents the largest implementation of physician pay-for-performance ever attempted in the United States. Starting in 2019, MACRA will integrate and potentially simplify performance measurement by combining a number of measures and programs. It will also increase the magnitude of financial rewards and penalties, which could help motivate practice change for the better.

One of the more controversial aspects of MACRA is its Merit-Based Incentive Payment System (MIPS) for physicians and practices not participating in alternative payment models. One physician captured the prevalent skepticism when he wrote in the public comments on MACRA: “This rule will wreak havoc with my practice while offering absolutely no evidence that it will do anything to improve patient care.” Partly due to the many public comments, the Center for Medicare and Medicaid Services (CMS) has made substantial changes to the final rule. However, there is room for further changes during the rollout – and potentially strong interest in doing so from Tom Price, the physician nominated to lead the Department of Health and Human Services.

With the discontent voiced to date about MACRA and MIPS, it will be important to avoid any “unforced errors” in MACRA’s rollout, which could needlessly add to the displeasure. Other rollouts of performance payment systems have accrued lessons the hard way, but published research on performance measurement provides a good deal of insight on how to avoid several pitfalls:

Ensure that payment mechanisms have a clear clinical rationale. Each performance payment under MIPS is linked to an underlying performance measure. If practicing clinicians do not understand why these performance measures were created or how they are likely to benefit patients, clinicians will resist the measure, and practice will not improve. Nobody likes being penalized for something they do not understand, do not agree reflects good patient care, or perceive as being completely beyond their control. Even being rewarded with a performance payment can be unnerving, without knowing why the reward was given and what can be done to earn it again. When RAND researchers asked physicians about how payment models affect their practices, one said, “I got a bonus check. And the other specialists didn’t…. It was like the tooth fairy. I woke up and a check was under my pillow.” 

Anticipate operational errors. The MACRA rollout will invariably encounter problems. We just don’t know which issues will surface, or how severe they will be. Even an impeccably designed program, with just the right combination of measures and incentives, can fall prey to programming errors that result in the misallocation of millions of dollars. For example, computer code that animates a payment mechanism could misplace a decimal point, potentially causing clinicians to be vastly underpaid or overpaid for a particular measure. Such glitches have been seen before in state-based payment programs and, famously, in the rollout of the Affordable Care Act’s healthcare.gov website in 2013. Proactive steps could include:

— Setting up a system to audit a subset of cases to ensure that the correct payment was made

— Establishing a system for real-time feedback and prompt adjudication of errors. Corrected errors could help establish trust, particularly among smaller practices that might otherwise feel swept up by the system.

— Running the payment system in test mode for a year before any payments or penalties begin. This would allow errors to surface (and be fixed) before payments or penalties are actually made. The Centers for Medicare and Medicaid Services (CMS) has already done something similar in its recently announced the “Pick Your Pace” option, which allows providers to choose to submit data during 2017 without a payment adjustment in the first year. The intent is to allow the provider to ensure that the system is working before performance payments begin.

Find a “third way” for risk adjustment. It is time to retire the longstanding controversy about whether to risk adjust at all by finding creative solutions to the problem. This controversy is animated by two opposing truths: 1) Without risk adjustment, we risk penalizing providers for taking care of the most challenging patients, including those who are poorest and sickest; 2) With risk adjustment, we risk excusing some providers for delivering poor care, when they may be able to do better. There are ways around this impasse, however. For example, RAND studies have shown that an approach based on stratification by key parameters (such as race, or area-level poverty) can help avoid unintended consequences while preserving accountability. 

Reduce the burden of performance measures. Providers and health systems are burdened by a need to report hundreds of quality measures to dozens of different entities, sometimes in slightly different formats. The need to report so many measures, often in slightly different formats to different entities, may actually distract clinicians from quality improvements. As a result, many providers feel that performance measurement is a burdensome and low-value exercise. Because MACRA will consolidate measures over time and reduce the reporting requirement, this could help address the sense of overly burdensome reporting. Old measures should be considered for retirement at least as often as new ones are added, or performance measures could be rotated each year, to keep providers and health systems from focusing on aspects of quality that are measured, to the exclusion of those that are not. Setting up an advisory panel of practicing clinicians could also help keep MACRA administrators in touch with the opinions of end users.

It may take some time to know how well MACRA’s initiatives are leveraging performance measurement to improve outcomes and control costs. Given another five years to perfect the measures, a still better approach could be fielded—but awaiting perfection is not a viable option. The U.S. health system urgently needs to improve outcomes and control short- and long-term costs. The key to success for MACRA may be in the details.

Adam J. Rose is a natural scientist, Peter S. Hussey is a senior policy researcher, Monique A. Martineau is a communications analyst and Mark W. Friedberg is a senior natural scientist at the nonprofit, nonpartisan RAND Corporation.

 

Categories: OIG Advisory Opinions

America’s Health and The 2016 Election: An Unexpected Connection

The Healthcare Blog - Wed, 01/04/2017 - 18:14

Donald Trump’s stunning upset victory has occasioned a lot of searching among political analysts for an underlying explanation for the unexpected turn in voter sentiment. Many point to Trump’s galvanizing support among white working class and middle income Americans in economically depressed regions of the US- particularly Appalachia and the upper middle west “Rust Belt” – as the main factor that put him in office.

While the Democrats concentrated on the so-called “coalition of the ascendant”- voter groups like Hispanics and Millennials that are growing, Trump rode to victory on a “coalition of the forgotten”- working class Americans in economically depressed regions of the U.S. who had been left behind by the economic expansion of the past seven years.

When the Economist searched for a more powerful predictor of the Trump victory than white non-college status, they found a surprise winner: a composite measure of poor health (comprised of diabetes prevalence, heavy alcohol consumption, lack of physical activity, obesity and life expectancy). Believe it or not. this measure of health status predicted a remarkable 43% of the improvement of Trump’s vote percentage compared with the 2012 Republican candidate Mitt Romney, compared to 41% for white/non-college.

A month after the election, the Centers for Disease Control released its 2015 morbidity and mortality trends in the US.  The CDC Report showed that  Americans’ life expectancy actually declined for the first time in 22 years. Except for cancer where we saw continued progress, death rates rose for eight out of the ten leading causes of death, most sharply for Alzheimer’s Disease.  The decline in life expectancy was confined entirely to the under 65 population!

Though the obesity epidemic almost certainly bears some responsibility, other social factors may be at work.   Last fall (2015), Nobel Laureate Angus Deaton and his wife, Anne Case, found that the death rates for white Americans aged 45-54- Donald Trump’s electoral base-  had risen 11% from the 1998 through 2014, with the rise sharply concentrated among those with a high school degree or less.  This rise contrasted with steady improvement in death rates for blacks and Hispanic Americans.

According to Deaton and Case, the main drivers of the sharp fall in life expectancy among middle aged whites were:  overdoses of drugs and alcohol, which almost quadrupled, suicides, which increased by 60%, and deaths from chronic liver disease and cirrhosis, which rose by a third. If the improvements in health status experienced in the previous fifteen years had continued from 1998-2014, there would have been nearly one half million fewer deaths in this group!  The toll from this unwelcome trend was comparable to that of the US HIV epidemic.

In plainer words, white Americans in mid-life are basically killing themselves, either directly or with destructive personal habits, and in sufficient numbers to affect overall life expectancy in the country.     It is not challenging to link the despair of older voters to de-industrialization and the economic hammering many Americans took in the 2008 recession, and thus  to Trump’s surprise victory. 

About half of American households aged over 55 have no retirement savings.   http://www.gao.gov/assets/680/670153.pdf   As a direct result of the crash, millions of older Americans lost the home equity they were counting on as a retirement cushion in the wave of foreclosures and job losses.  A remarkable 86 million American households have, effectively, no spendable assets, and their asset position has actually declined in the past seven years.   

How strategically crucial to these voters was Trump’s unconventional (for a Republican, at least) promise not to cut Social Security or Medicare, since tens of millions of hard pressed baby boomers will be completely dependent on these programs in their seventies and eighties.  Trump would have lost the election if he had followed traditional Republican policy dogma and pledged to “reform” these two safety net programs.   

How the Trump Administration’s emerging health agenda will play with his core constituency of “forgotten” white middle aged voters  remains to be seen.  Trump spent little time or energy of his “high concept” campaign on health policy issues, beyond his promise to repeal ObamaCare and replace it with something “terrific”(which wags have inevitably dubbed “TerrifiCare”).

However, Congressional Republicans have long believed that the key reason for high health costs is the absence of incentives for patients to be effective “consumers” of health care. The traditional Republican formula for curing healthcare’s ills has been to compel people, including the poor and elderly, to spend more of their own money on health services.

This long standing Republican health policy principle effectively blames our nation’s health problems on moral failure by patients, and, by direct linkage, on Trump’s core constituency. I suspect there are more than a few Republicans who believe that if everyone had health savings accounts, people would take better care of themselves and there would be less obesity, alcoholism and depression, fewer suicides and overdoses, etc. 

In my view, this utilitarian view of what creates health is insulting to patients, and gives short shrift to the effects of long neglected social determinants- lack of jobs, food insecurity and poor nutrition, homelessness, unsafe neighborhoods, etc. – on health status. 

It will be an early clue about whether fiscal concerns driven by Republican economic dogma or actual health concerns drive Trump’s health agenda if mental health and substance abuse treatment coverage somehow magically disappear from the redefined benefit package of the ACA replacement, or if forcing millions of hurting Trump voters to pay more for their health coverage is the ultimate outcome. In light of the circumstances, there is nothing “non-core” about mental health and substance abuse treatment.

In my view, it is going to take more than the “right incentives” and a surge of healthcare consumerism to alleviate the despair which drove Trump’s surprise election victory.  It is easy to understand why despairing white non-college Americans found Trump’s slogan “Make America Great Again” compelling.  If the forgotten Americans who elected Trump President are forgotten yet again in his sweeping remake of US health policy, not only will we have collectively failed as a society but Trump’s remarkable remaking of the American political landscape will prove short lived.    

Categories: OIG Advisory Opinions

Star Wars Is Really About Protecting Patient Data (Yes It Is)

The Healthcare Blog - Wed, 01/04/2017 - 13:48

Star Wars may be a light-hearted adventure film series at its core, but that hasn’t stopped professionals and academics from extracting some real-world lessons from the series. A couple of prominent examples include a thesis on the economic impact of building the Death Star and NPR’s political science analysis of the inner workings of the galactic senate.

With the latest Star Wars film, Rogue One, it’s the healthcare IT industry’s turn to take a crack at the known universe’s most popular space saga.  Be forewarned: the following analysis includes spoilers from the new film.

A key component the plot is that the Empire suffers a series of data breaches that have a catastrophic impact on the organization. The connection to the healthcare industry should already be clear. Even with improving safeguards, over 11 million individuals were affected by healthcare data breaches perpetrated by cyber-attacks in 2016. We can learn from the Empire’s mistakes by looking at the film’s three most prominently featured security measures, and how a real-world organization can do better than Darth Vader when it comes to protecting sensitive information.

Incident response. Early in the film, it is revealed that a traitor has released protected data. Intentional wrongdoing from within a healthcare organization is rare, but we do know that most real-world data breaches also come from an internal source—employee error. The Empire’s approach to this initial breach is actually worth mirroring. They interview the employee and his immediate staff about the nature of the breach and then take steps to audit all of his communications. Here on earth, healthcare organizations should have a written, formalized incident response policies that would likely include some similar steps. Risk level: Low.

 Identity and access management. The Empire’s most sensitive data is managed from a single terminal that even a top hacker has trouble cracking. Top marks for Darth Vader so far. One area that could use some attention, however, is that Rebel spies are able to use biometric login credentials from a former (deceased) employee to authenticate access. Both EHR user IDs and workstation accounts should be reviewed on a regular basis, and permissions need to up updated as soon as employees leave or change roles. It’s not at all unusual for smaller healthcare organizations to discover that a former administrator’s account holds some essential permissions. In the Empire’s defense, the employee in question had been terminated very, very recently, but there are no excuses in a galaxy that moves at the speed of light. In our solar system, these access updates should be made within one business day. Risk level: Medium.

Physical security. The Empire may have had a literal army protecting their servers, but they still made some basic physical security errors that healthcare organizations would be wise not to repeat. Rebel troops manage to venture deep into a protected facility by simply dressing like they belong there. In an actual healthcare organization, it is important to make strict use of visitor sign in protocols and locked doors. In larger organizations, photo ID badges may be needed. Requiring a known vendor to sign in at every visit may feel like an unnecessary formality, but it is essential to log who had access to areas where PHI may be in plain view. Risk level: High.

Is your organizational security tighter than the Death Star? If you haven’t done a security risk analysis recently, now may be the time to find out. For Meaningful Use, eligible professionals must conduct or review a security risk analysis for each EHR reporting period. May the force be with you.

Matt Seager is a Health Information Technology specialist for the Michigan Public Health Institute

Categories: OIG Advisory Opinions

It Begins

The Healthcare Blog - Tue, 01/03/2017 - 16:27


For the second time in a decade, a president and Congress will undertake a large-scale effort to re-engineer the health care system.   

Politics and debate over policy are not the primary cause of this continued upheaval.  It is our patchwork, Rube Goldberg-like system, developed ad hoc over 50 years.      

As THCB readers know, we have an insurance and care delivery system that works less well—in terms of public health, coverage, patient outcomes, and cost—than health care in most of the rest of the developed world. 

And, things are getting worse.  To wit: rising death rates among middle-aged, low- and middle-income white Americans; the unchecked rise in obesity and preventable chronic diseases and opioid addiction; and woefully slow progress to reduce medical errors and improve patient safety.    

On cost, we are on a path to $5.6 trillion, $16,000 per person, and 20% of GDP by 2025—up from $3.3 trillion, $10,300 per person, and 18% of GDP in 2016.  That’s about a 5% rise per year in terms of per capita expenditure, twice the rate of inflation. 

Our system works well in only two ways: it creates jobs (many of which are high paying) and it generates generous profits for large corporations—from pharma and device manufacturers to hospital systems to increasingly consolidated insurance companies.  To be sure, some of that profit derives from welcome innovations, new products and treatments.  But a sizable portion is due to excessive prices ungrounded in any value proposition.   

It may be that that’s what we really want from our system—profit maximization—and that progress in public health, disease prevention and serious cost control is secondary.  Many left wing economists and health policy wonks have argued as much for years.     

The public does not understand our health system dysfunction from a policy or technical perspective, but they very much “get it” at an experiential and intuitive level.  They know how expensive it has all gotten, how vulnerable they are.  Bernie Sanders’ unexpected rise last year can be attributed, in part, to his clarion call for a “Medicare For All” plan.

Indeed, surveys over the past 10 to 15 years consistently show that about one third of the population supports replacing what we have now with a single-payer system. 

Of course, we’re not headed in that direction now—or probably ever.   

Where we are headed now is towards another big debate about the balance between government and private-sector control of the “means of production” in health care, the reach and design of the “safety net,” and the meaning of insurance.   

It’s the 50-year old struggle that has produced the Rube Goldberg system we have.  You know the history so I won’t belabor it.   

But it’s important to understand where we are as we enter this next phase.  We are at 50/50—more or less an equal divide between public (tax financed, government run) and privately run.

In terms of raw, topline numbers:  Medicare and Medicaid cover some 110 million people.  Federal, state and local government (as an employer, but still tax financed) cover another 8 million people or so, including the military and VA.  Private employer-based insurance covers about 152 million people.  The exchanges cover 11 to 12 million, and some 10 million people have individual coverage outside of the exchanges.  About 30 million Americans remain uninsured.   

On spending, of the estimated $3.3 trillion in 2016, Medicare, Medicaid and other federal programs account for $1.4 trillion; private health insurance accounts for $1.1 trillion; consumers and families spend $350 billion out of pocket; about $165 billion is invested (public and private sector); and the remaining $300 billion encompasses public health and other government and private sector programs, such as community health centers and quality improvement.   (Mind you, consumers and families actually pay for all of this via premiums, taxes and out of pocket.)   

The wrinkle this time is a president who is unprecedented in character and unpredictable in action.  He has pledged to maintain Medicare, but Republicans in Congress have other ideas.   He and congressional Republicans want to block grant Medicaid and, of course, dismantle Obamacare.  The VA is up for grabs.   

Their purpose is clear. 

  • Swing the pendulum to privatization, less government control and less government regulation. 
  • Shift control from the federal government to the states
  • Let marketplace competition operate more freely to improve care and restrain costs. 
  • Reform entitlement programs to limit federal liability and spending    
  • And, most importantly (and way less well understood): shift risk and direct costs to consumers and families (more “skin in the game”).

There is nothing inherently evil about these concepts. State and local control has merit; that’s the design of Medicaid and why Obamacare established state-based insurance marketplaces.  Insurance is regulated at the state level, albeit with ERISA providing freedom for (mostly large) self-funded employers.   

Privatization is not anathema.  The government relies on contractors to operate a sizable portion of its health care responsibilities.  And of course the vast majority of providers, paid by government, operate as private entities.

Over-regulation can indeed be burdensome, stultifying and unproductive. Competition is good: Medicare Advantage was conceived, in part, to create competition in Medicare, and many beneficiaries prefer it.  Medicaid managed care is now widespread, and fosters competition for cost-savings and care improvement. 

The Obamacare exchanges created competition between insurers and choice for consumers.  The design was sound, and based on concepts Republicans championed in the 1990s and early 2000s.    

Likewise, some skin-in-the-game for consumers (deductibles, co-payments, and self pay for discretionary care etc.) are an important check on overuse and an inducement to responsibility and self-care. 

In theory, Trump and the Republicans understand the other side of the ledger: (a) the benefit of judicious regulations, standards, and rules, including some that apply to the nation as a whole; (b) the limits of competition in healthcare, where power is concentrated in the hands of companies and providers, and not consumers; and (c) that too much “skin in the game” means loss of coverage and access to care, financial hardship or even bankruptcy for millions of families each year.   

Trump the business guy, the real estate mogul has lived in the world of building codes and construction regulations his whole adult life.  So we might expect that he understands the need for balance.  Importantly, he has also said repeatedly:  “everyone must be covered.” 

My worry is that in the current anti-government, hyper-partisan and anti-intellectual environment, the hard-right and quasi-libertarian Republicans (like Paul Ryan) will prevail. 

In that case, there’s a good chance the pendulum will swing towards: (a) excessive deregulation, (b) topsy-turvy and anti-competitive consolidation among providers and insurers; (c) an unprecedented and dangerous scale-back in the entitlement status of Medicare and Medicaid and (d) let-the-chips-fall-where-they-may for consumers and families.   

Democrats and moderate Republicans must be a strong bulwark against this outcome.    

My other worry is that the era of propaganda, misinformation, truth-averse tweets, and fake news we have entered—like some totalitarian country—will militate against any informed and deliberative debate.  Ominously, Republicans employed these tactics against Obamacare from the beginning—many knowing full well that they were misleading the public with slogans and untruths.   

This propaganda issue is the subject of Part 2 of this blog, coming soon.

Steven Findlay is an independent healthcare journalist, policy analyst, researcher and consumer advocate.   

Categories: OIG Advisory Opinions