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Month: January 2009

Good grief! Will this derail the latest reform push?

• 4

By Matthew Holt

Daschle failed to pay $128,000 in taxes

Didn’t he complete that ridiculously long form about his past that the Obamanations wanted? Daschle may not have had a drunken picture of himself on Facebook but answering away not paying over $100K in tax is going to be tough. Did he think it wouldn’t come up? Now I know it was  only a free car & driver, but apparently Daschle took three years to notice that he wasn’t paying for it, and that it counted as income.

On the other hand, if Daschle doesn’t get past this, maybe we’ll get someone to run health care reform who has some slightly better ideas than Daschle’s somewhat sophomorific effort—even if not his political connections.

Consumer-Driven Health Care: Promise and Performance

• 15

By ROBERT LASZEWSKI

I am always struck by the difference between the salesmanship of health plans offering consumer-driven health products and the reality of the data.

James Robinson and Paul Ginsburg have an article in the January 27th edition of Health Affairs with an objective review of the consumer-driven movement of recent years.

Here is the central point of the article:

The performance of consumer-driven health care has fallen short of both the aspirations of its proponents and the fears of its critics. Growth of the favored organizational forms, including HDHPs and individually purchased insurance, has been anemic. The forms of insurance and sponsorship originally embodied in the consumer-driven vision have mutated into forms far from those originally envisaged. This process is not unique to consumerism, but one well known to managed care, where the original group-/staff-model HMO was diluted into the loosely structured independent practice association (IPA)-model plan and the sponsorship framework of managed competition into the “total replacement” purchasing format of self-insured employers.

They also point out that:

  • Enrollment in HDHP/HSA plans grew from 400,000 in September 2004 to 6.1 million in January 2008–“a large absolute increase but still small in relation to overall enrollment in private insurance.” By comparison, HMOs continue to hold 20 percent of the employer market and POS plans 12 percent.
  • “The consumer-driven health care movement has been obliged to dilute its principles in light of the overuse of inappropriate services and underuse of appropriate services in the real world. HDHPs now incorporate elements of disease management for enrollees with chronic conditions; case management for enrollees with complex or comorbid conditions; and utilization management for patients using particularly costly drugs, devices, or procedures. Most of these medical management programs are obtained from the same diversified insurers that offer HMO and PPO products. Indeed, the potential for integration with claims databases is leading insurers to acquire many formerly independent medical management vendors.”
  • “The blind spot in the consumer-driven analysis of market performance concerns the importance of coordination in insurance, delivery, and sponsorship. The obdurate insistence on á la carte choice and retail purchasing pushed the theorists of consumerism into positing organizational and market dynamics that have not been observed in the real world.”

Consumer-driven principles have clearly impacted the design of mainstream health insurance plans for the better.

But consumer-driven principles have not changed the fundamental dynamics of our health insurance system nor have they turned out to be a silver-bullet solution.

In my mind, the fundamental fault with the logic that they would be was the belief that consumers could do what insurance companies, employer benefit managers, and even providers could not.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at Health Policy and Marketplace Blog, where this post first appeared.

Report Shines Light on Long-Term Care Spending in Medicare

• 17

By Anne Tumlinson

Several contributors to THCB have commented that long-term care tends to get short shrift in healthcare discussions. New research might help to make a case for why we can no longer afford to demote this critical issue as we contemplate overarching healthcare financing strategies.

In the report, researchers looked at beneficiaries ages 65 and older who receive help with three or more activities of daily living (ADLs) — longhand for people who need long-term care — and found that, even though these individuals represent only 7% of the Medicare population, they account for nearly 25% of spending in Medicare Part A and B.

This is interesting because Medicare doesn't actually pay for extended nursing home stays, which is where long-term care is usually delivered, but it does pay for limited post-acute care. The implication here is that Medicare services that transition patients from acute to long-term settings might actually be filling a gap for long-term needs. And, given the size of the gap, it is equating to staggering levels of spending.

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Commentology

Intermountain CIO Marc Probst had this response to John Halamka's post "Five reasons for Hope"

"As a CIO in an integrated delivery system I have had my eyes opened to see the wisdom and benefit of following proven informatics principles.  Although we may not be perfect, our organization has achieved some amazing results by using data and knowledge.  HIT will not save healthcare, but as an integral component with operations and organizational leadership, HIT can help in this transformation. 

Please let's not waste this
opportunity.  $20 billion properly spent will provide great
improvements.  $20 billion spent as it appears it may be spent will
just raise costs and make getting to where we need to be harder."

Tcoyote wrote in on the same post:

"Agree on the quality of the people.  Can you please tell us where the 200 thousand new jobs estimate you gave NPR for $20 billion in healthcare IT spending came from?"

Virginia Mason CEO Gary Kaplan, the author of "An Urgent Shared Commitment to Change," had this reply to commenters who asked a number of tough questions.

"It's very important for me to chime in about a few comments here on the role of a not-for-profit board. Let me be the first to say our board and executive team are very focused on fulfilling our mission and vision on behalf of our patients and our community. This is our primary fiduciary responsibility.

Also, profitability is not the goal, but a net margin is an essential ingredient. Our patients and community count on us to provide high-quality care; stay up-to-date with treatment and technology; employ smart, skilled medical professionals; and keep our doors open. We simply cannot do any of these things without diligence and prudence — and a net margin allows us to invest in our mission to improve the health and well being of the people we serve and our vision to be the quality leader in health care."

Moving forward on SCHIP

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By Jocelyn Guyer

The Senate passed its version of legislation to renew the State Children’s Health Insurance Program (SCHIP) Thursday, bringing the bill very close to its long overdue White House signing ceremony. The new bill is expected to cover an additional 4.1 million uninsured children by 2013.

Most importantly, the new bill – like the old ones vetoed by President Bush – gives states new funding to sustain and strengthen their SCHIP programs. This will occur just in time, as families hit by the economic downturn look for affordable coverage options. It also gives states new tools to reach already-eligible, uninsured children and provides them with performance-based incentives to enroll them.

I’m thrilled about this bill. Not because I think it will solve everything, but because it will offer concrete help to many kids who need it now and can’t wait until we figure out comprehensive health reform.

It is fair to say, however, that not everyone shares my joy.

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And in today’s scuttlebutt–Sutter pay grades

• 4

By Matthew Holt

A little birdie contacted me leading me to wonder, what did the former CEO of Sutter Health Van Johnson do to get paid $5.6 million for working for a “part year” in 2006? (See page 100 of this PDF). It may go somewhat to explaining why a) Sutter is the most expensive hospital system in Northern California, and b) why the unions hate it so much! On the other hand we’re entitled to wonder when the web site says things like this :

Unlike investor-owned health care systems, Sutter Health is a not-for-profit organization. As such, any money left over after employees and bills have been paid is reinvested in health care.

On the other hand in 2005 Johnson didn’t make the top 5 list dominated by CEOs of individual Sutter hospitals all earning what typical hospital CEOs make—500K and up!) (page 59 here). Neither did current CEO Patrick Fry make the top 5 in 2007 (page 99 here). Perhaps the key is that they only pay the big boss after he quits?

Anyway, anyone who can elucidate please comment away.

Five Reasons For Hope

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By JOHN HALAMKA, MD

Over the past decade as a CIO, I’ve had successes and failures. I’ve learned about leadership in a crisis , how to resolve disputes, and how to serve my customers/employees/superiors . As I watch the first few days of the Obama administration, I have a great deal of respect for the initial activity, as seen through the lens of my own leadership experience. Here are five reasons I have great optimism for the new administration:

1. Smart People – Obama is surrounding himself with smart people, regardless of party affiliation or ideology. In my experience, A-level leaders surround themselves with A-level staff, since they are not intimidated by people who are smarter or more experienced. However, B-level leaders surround themselves with C-level staff who do not question the ideas and actions of their leader, resulting in sycophants rather than a strong leadership team. Of course, as we learned from Jimmy Carter’s presidency (he’s been a great post-president), the smartest people are not always the most successful people, but I have great faith in the new team!

2. Listening – As I’ve described in my blog about leading change , the most important part of Kotter’s principles is to build a guiding coalition. By engaging the stakeholders and listening to their priorities for change, Obama has created powerful grass roots momentum.

3. Doing the right thing – A wise person once said “When one bases his life on principle, 99 percent of his decisions are already made.” Should we drill for oil in the Arctic? Should government decide what therapeutic options doctors and their female patients can talk about? Should government decide science policy based on religious beliefs? The answers to these questions should be clear if we objectively ask ourselves what seems like the right thing to do based on the best objective evidence. The Obama administration is doing that.

4. Let the ideas flow – The web “democratizes data”. Ideas need to flow freely and as country we need to come to consensus about our priorities based on open and transparent communications. The Obama team, with the able assistance of Blue State Digital and other technology partners, has created Change.gov and Whitehouse.gov to reduce information silos.

5. Embrace technology – Obama is the first president to have a computer on his desk. Obama will keep his Blackberry. The communication systems in the Whitehouse will be upgraded to Web 2.0 technologies. Working with better technology will result in better,faster decisions and more enlightened management.

Will the Obama administration be perfect? No. Will the change management ahead be easy? No. Will we get to the right decisions faster and regain the respect of the world. Absolutely.

Have hope.

John Halamka is the CIO at Beth Israel Deconess Medical Center and the author of the popular Life as a Healthcare CIO blog, where he writes about technology, the business of healthcare and the issues he faces as the leader of the IT department of a major hospital system. He is a frequent contributor to THCB.

Calendar: The Smartest (Healthcare) Guys in the Room

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Filed under possible sleepers we're-keeping-an-eye on:

Alex Gibney, the Academy-award winning film maker behind the widely acclaimed "Enron: The Smartest Guys in the Room" will show segments of his newest film, a feature length take on Maggie Mahar's "Money-Driven Medicine" at the Families USA Conference in Washington D.C. this week. Directed by Andrew Fredericks. Screening open to the public. Wed. 8PM. Renaissance Mayflower Hotel. 1127 Connecticut Avenue. NW. IMDB entry here.

At Families USA, progressive optimism reigns

• 4

By Sarah Arnquist

As an annual meeting of progressives should start, the Families USA conference of health advocates began in Washington D.C. this morning with applause and cheers of the announcement of President Obama's imminent signing of the Lilly Ledbetter Fair Pay Act and the anticipated adoption of a bill expanding the State Children's Health Insurance Program (SCHIP).

I missed the day's first talk by Sen. Charles Grassley (R-Iowa), who has been making headlines lately for his adopted role of Medicare kickback watchdog. (He's the only Republican I see on the agenda.)

House Majority Leader Steny Hoyer (D-MD) spoke next and promised successful passage of broad health reforms after the economic stimulus legislation is finalized. Vague on details, but full of enthusiasm gleaned from the opportunity seen in the current economic crisis, Hoyer said, "This is our moment."

"If we fail, if we have to revisit this issue in 10 or 15 years," he said, "I don't want even want to think about how bleak the picture will be then."

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