By Matthew Wayt

Following the Obama administration’s announcement about the suspension of enrollment in a high-risk health insurance program known as the Pre-Existing Condition Insurance Plan, a flurry of commentary began on what the move means for the Affordable Care Act.

Some observers said that the program’s underwhelming enrollment numbers and high costs foreshadow inevitable problems with the ACA’s health insurance exchanges, while others drew a clear division between a program intended to insure only those with pre-existing health conditions and state marketplaces designed to spread risk by insuring both those who are sick and those in good health.

Two months after the halted enrollment, the debate continues.

Closing the Pools

The high-risk pools were designed to help sick U.S. residents gain coverage ahead of January 2014, when the ACA’s ban on denying individuals coverage because of pre-existing conditions will take effect.

In early February, the administration announced several cost-saving reforms intended to prevent the $5 billion program from running out of money. However, on Feb. 15, HHS officials announced that enrollment in the high-risk pools would end because of rising costs and limited funding.

Continue reading “Is the Suspension of the Pre-Existing Condition Insurance Plan a Preview of Obamacare’s Failure?”

By Vik Khanna

“The Effect of Price Reduction on Salad Bar Purchases at a Corporate Cafeteria.” An excellent peek at the kind of steps that employers ought to take to improve eating habits in their work forces: subsidize the purchase of healthy foods. In this CDC study, reducing the price of salads drove up consumption by 300%.  If this was a stock, we would all rush out to buy it.

Influencing behavior through both choice architecture and pricing differentials challenges many employers, however. There is a fear factor in play (“some of my people will be unhappy”), as well as financial issues, because the corporate managers responsible for food services often have their compensation linked to the division’s profitability.  You make a lot more money selling soda than you do selling romaine.  The same perverse financial conundrum appears when corporate food service companies run cafeterias.  The on-site chef and managers typically operate on a tightly managed budget that leaves them little flexibility to seek out and provide healthier options.

A chef employed by one of the largest corporate food service providers in the country told me last year that he could not substitute higher protein Greek yogurt for the sugar-soaked, low-protein yogurt in his breakfast bar. When I asked why, he told me that Greek yogurt was not on his ordering guide, and he was not allowed to buy it from a local club warehouse and bring it in.  In this same company, beverage coolers were stuffed to overflowing with sugar-sweetened drinks, all of which were front and center (and cheap), while waters and low-fat milk were shunted to the side coolers.  In another scenario, health system leaders I met with last year all raised their hands when I asked if they had wellness programs and kept them up when I asked if they also sold sugar-sweetened beverages in their cafeterias at highly profitable prices.  The irony was completely lost on them.  They had to be walked through the inconsistency of telling their employees to take (worthless) HRAs and biometrics, but then facilitating access to $0.69 22 oz fountain sodas.

Continue reading “The Salad Bar That Turned Around a Fortune 500 Company …”

By Al Waxman

Now that President Obama has been re-elected and the Supreme Court has upheld the Accountable Care Act, healthcare reform is here to stay. So what does reform mean for healthcare investors? I believe it will usher in a new fertile period for innovative,venture‐backed companies that can navigate the brave new world of healthcare delivery and management.

The Accountable Care Act impact on healthcare IT investing is already being felt.Venture investment in 2013 is showing significant growth from last year. In 2012,according to PWC, a global accounting firm,the life sciences sector which includes healthcare IT accounted for 25 percent of all venture capital dollars invested which totaled nearly $1.2 billion in 163 deals,more than double the $480 million in 49 deals in 2011 and almost six‐times the $211 million in 22 deals in 2010.

Now is the time to make order out of chaos and to set the stage for a next‐generation healthcare system that can effectively service our nation. At Psilos Group, we have just released our fifth Healthcare Economics and Innovation Outlook and identified the following four areas as the most promising opportunities for healthcare investors in 2013 and beyond: Private health exchanges, consumer‐focused insurance programs, 21st century healthcare technologies, and innovations that reduce error and waste.

Investing In Exchanges

The healthcare insurance marketplace—and the way insurance is bought and sold—is facing massive change.Healthcare insurance exchanges, both public and private,promise to create a more organized and competitive market for buying healthcare insurance, which could moderate price increases that are currently spiraling out of control.

From our perspective, exchanges are an intelligent place to invest. Software and services will power the exchanges. Psilos envisions massive opportunities for technologies that enable operators of both public and private exchanges to build high functioning platforms, including the shopping software and back‐end administrative technology and service products needed to serve tens of millions of people efficiently.

Continue reading “The Affordable Care Act: Like It Or Not, It’s Catalyzing a Golden Age In Health Care Investing”

By Naomi Freundlich

Arkansas is now the first state to use Medicaid expansion dollars to buy private coverage for many of its 250,000 newly eligible residents rather than enroll them in the existing Medicaid program. This week the Arkansas House of Representatives approved the plan, followed by the  Senate, to confirm that the state will be implementing this “market-based approach” to expanding Medicaid.

The idea of buying private insurance for Medicaid recipients is emerging as a “conservative compromise” for some of the 24 states (home to more than 25 million uninsured residents) leaning toward rejecting federal funding the Affordable Care Act provides for the expansion. In the original legislation, the ACA required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, $15,870 for an individual or $32,499 for a family of four. The federal government would fully cover the costs of this expansion for two years, with states gradually having to contribute 10% by 2020. Last summer, the Supreme Court struck down the Medicaid expansion requirement, allowing states to refuse federal funding and opt out of the expansion.

But most of these states, including Florida, Texas and Indiana, are leaving a lot of money on the table—from hundreds of millions to $1 billion or more in federal funding.  Under pressure from healthcare providers and other interested parties, some governors view premium assistance programs that move the poor, disabled and frail elderly to the state insurance exchanges to buy private insurance as a way to capture this windfall without appearing to embrace ObamaCare.

In Missouri, for example, Republican state legislator Jay Barnes calls the Obama administration’s plan for Medicaid expansion a “one-size-fits-all, far-left-wing ideological path.”

Continue reading “The Arkansas Experiment: Is the ‘Private Option’ a Realistic Plan For Medicaid?”

By Ishani Ganguli, MD

Walgreens, the country’s largest drugstore chain, announced on April 4th that its 330+ Take Care Clinics will be the first retail store clinics to both diagnose and manage chronic conditions like asthma, diabetes, high blood pressure, and high cholesterol. The Nurse Practitioners (NPs) and Physician Assistants (PAs) who staff these clinics will provide an entry point into treatment for some of these conditions, setting Walgreens apart from competitors like Target and CVS whose staff help manage already-established chronic illnesses or are limited to testing for and treating minor, short-lived ailments like strep throat.

A one-stop shop for toothpaste, prescription drugs, and a diabetes diagnosis? The retail clinic phenomenon has its appeal: it allows patients convenience and better access to care through longer hours and more locations than our health care system now provides. Walgreens leaders bill their latest offering as a complementary service to traditional medical care. They envision close collaboration with physicians and even inclusion in Accountable Care Organizations, according to reporting by Forbes’ Bruce Japsen (though it’s not clear how the retailer would share the financial risk or savings in such a model).

By Joel Teitelbaum & Tom Koutsoumpas

If the country is serious about reforming the healthcare system, then it needs to look beyond just improving access to medical care.  Reforms must acknowledge and address the underlying causes of poor health, many of which cannot be adequately treated by healthcare professionals alone.  Indeed, for some 50 million low-income Americans, the barriers to getting healthy represent unmet legal needs better remedied by a lawyer than a healthcare professional.

Unenforced sanitary codes leave families living in unsafe housing where children are made sick by mold, or made sicker by the fact that utilities in their homes have been wrongly shut off.  Health system complexities and inefficiencies prevent seniors from benefitting from the insurance and long-term care coverage to which they are entitled, and keep wounded veterans from accessing durable medical equipment such as a wheelchair or other crucial supports.  In each of these cases, traditional healthcare services – no matter how expertly administered, and no matter how capable and compassionate the clinician – will not improve individuals’ health.  Rather, legal assistance is crucial to negotiate with landlords and utility companies, appeal denied insurance claims and expedite access to veteran benefits and services.

Continue reading “Health Reform Should Include Legal Care for Patients”

By MIKE MIESEN

You’d be forgiven if, after reading last month’s Health Affairs, you came to the conclusion that all manner of wellness programs simply will not work; in it, a spate of articles documented myriad failures to make patients healthier, save money, or both.

Which is a shame, because – let’s face it – we need wellness programs to work and, in theory, they should. So I’d rather we figure out how to make wellness work. It seems that a combination of behavioral economics, technology, and networking theory provide a framework for creating, implementing, and sustaining programs to do just that.

Let’s define what we’re talking about. “Wellness program” is an umbrella term for a wide variety of initiatives – from paying for smoking cessation, to smartphone apps to track how much you walk or how well you comply with your plan of care, and everything in between. The term is almost too broad to be useful, but let’s go with it for now.

When we say “Wellness programs don’t work,” the word work does a lot of, well, work. If a wellness program makes people healthier but doesn’t save lives, is it “working”? What if it saves money but doesn’t make people healthier?

Continue reading “Wellness Programs Aren’t Working. Three Ideas That Could Help.”

By Andi L. Shane, MD

Infections from contaminated steroid injections, influenza outbreaks, destruction from Sandy, West Nile Virus, measles and pertussis outbreaks. These are just a few of the public health crises we faced down in 2012, thanks to the tireless efforts of local and state health departments. Each outbreak takes tremendous resources on top of day to day surveillance activities, but public health is now facing its own crisis of funding: The sequestration will cripple local and state public health departments. Analysts calculate an effective funding reduction of 9%, with the Centers for Disease Control and Prevention losing $350 million. While every federal agency will have to tighten its belt, for public health there are no more belt holes.

“Sequestration would impact every CDC program and could increase the risk of disease outbreaks,” Centers for Disease Control and Prevention Director Thomas R. Frieden recently told CQ HealthBeat. “More than two-thirds of our budget goes out to boots-on-the-ground work at the state and local level to find and stop outbreaks and other health threats.”

Continue reading “Shoe-Leather Epidemiology Needs More, Not Less Funding”

By J.D. KLEINKE

WASHINGTON — Oral contraceptives may be small, but they are proving to be tough pills for a vast number of Americans to swallow.

Last week, the Sunlight Foundation reported that the contraception provisions of President Obama’s health reform law garnered 147,000 comments from the public — more than on any other regulatory ruling, on any subject, in the history of the nation. Really.

The unprecedented flood of comments came from a wide range of organizations and individuals who support or oppose mandated contraception coverage as part of Obamacare.

Supporters, in general, want to extend coverage for this cornerstone of women’s health; oral contraceptives are used not just for birth control, but also for the treatment of pelvic pain, irregular periods, fibroid tumors, ovarian cysts, endometriosis, severe acne, mood disorders, and excessive menstrual bleeding that could lead to anemia. Opponents, in general, want to block this extension based on religious, moral or personal objections to women using pooled insurance resources to pay for pills that enable sex-for-fun — and that can be used, as it happens, for early termination of an unwanted pregnancy.

Continue reading “Pandora’s Pillbox”

By Bruce Chernof, MD

It starts with a call that a loved one is in the hospital after being in a serious accident. Sometimes it comes from having chronic health conditions that minimize daily functioning as one grows older. These life-changing events present individuals and their families with a new set of needs and challenges that require a variety of human capital and financial resources to redefine and maintain daily living on their terms.

The likelihood that you or someone you love will need this kind of support is greater than you may think. While nearly all Americans hope to remain in their homes as long as possible—enjoying good health and living independently—the reality is that 70 percent of people over 65 will need some form of support to assist them with daily activities at some point in their lives, for an average of three years.

Over the next two decades, Americans will reach that milestone at a rate of nearly 8,000 a day. The older people become, the more likely they will need long-term care, and with advances in medicine and technology, we are living well into our 80’s and 90’s.

Continue reading “Stepping Up to the Long-Term Care Crisis”