For decades, health policymakers considered Kaiser Permanente the lode star of delivery system reform. Yet by the end of 1999, the nation’s oldest and largest group model HMO had experienced almost three years of significant operating losses, the first in the plan’s history. It was struggling to implement a functional electronic health record, and had a reputation for inconsistent customer service. But most seriously, it faced deep divisions between management and the leadership of its powerful Permanente Federation, which represents Kaiser’s more than 17,000 physicians, over both strategic direction and operations of the plan.
Against this backdrop, Kaiser surprised the health plan community by announcing in March 2002 the selection of a non-physician, George Halvorson, as its new CEO. Halvorson had spent most of his career in the Twin Cities, most recently as CEO of HealthPartners, a successful mixed model health plan. Halvorson’s reputation was as a product innovator; he not only developed a prototype of the consumer-directed health plan in the mid-1990’s, but also population health improvement objectives for its membership, both firsts in the industry.
Continue reading “The Kaiser Permanente Model and Health Reform’s Unfinished Business”
Filed Under: THCB, The Business of Health Care
Tagged: George Halvorson, health reform, integrated delivery system, Jeff Goldsmith, Kaiser Permanente
Oct 1, 2014
In the forty years since I started medical school, I have worked in socialized medicine, student health, a cash-only practice and a traditional fee for service small group practice. The bulk of my experience has been in a government-sponsored rural health clinic, working for an underserved, underinsured rural population.
Today, I will pull together the threads from my previous posts in the series “How Should Doctors Get Paid?” I will make a couple of concrete suggestions, borrowing from all the places I have worked and from the latest trends among the doctors who are revolting against the insurance companies by starting Concierge Medicine and Direct Primary Care practices.
Because I am a primary care physician, I will mostly speak of how I think primary care physicians should be paid.
I will expand on these concepts below, but here are the main points:
1) Have the insurance company provide a flat rate in the $500/year range to patients’ freely chosen Primary Care Provider, similar to membership fees in Direct Care Medical Practices.
2) Provide a prepaid card for basic healthcare, free from billing expenses and administration.
3) Unused balances can be rolled over to the following years, letting patients “save” money to cover copays for future elective procedures.
4) Keep prior authorizations for big-ticket items, both testing and procedures, if necessary for the health of the system.
5) Keep specialty care fee-for-service.
6) Have a national debate about where health care ends and life enhancement begins and who should pay for what.
Health insurance needs to be simple to understand and administer. It needs to promote wellness, and it needs to remove barriers from seeking advice or care early in the course of disease. It needs to empower patients to use health care services wisely by aligning patients’ and providers’ incentives.
Health insurance should not be deceptive. It should not promise to pay for screenings (colonoscopies and mammograms) and stop paying if the screening reveals a problem (colon polyps or breast cancer). It should offer patients the right to set their own priorities for their health while demanding concern for our fellow citizens’ right to also receive care.
Continue reading “A Swedish Country Doctor’s Proposal for Health Insurance Reform”
Filed Under: OP-ED
Tagged: Hans Duvefelt, health reform, Physicians, primary care, socialized medicine
May 4, 2014
The 18-34 year old segment of our population is large, growing and important in our society. They are 80 million strong. Their attitudes, beliefs, values and actions are re-shaping the way every organization, business and institution thinks about its future.
According to a Pew Research report released last week, Millennials are independents and skeptics: 50% have no political affiliation, 29% no religious affiliation, and 19% say they do not trust established institutions to do the right things (versus 40% for Baby Boomers).
Millennials worry about money. A study by the Investor Education Foundation of the Financial Industry Regulatory Authority concluded that their concerns about their auto, credit card and school debt trump other issues.
Most think economic stability should come before marriage and family life. Half who went to college have a student loan to repay, and one third moved into the homes of their parents at some point to make ends meet.
And they worry about the future. Paul Taylor’s The Next America: Boomers, Millennials, and the Looming Generational Showdown predicts economic battle between Millennials and Baby Boomers:
“Every family, on some level, is a barter between the generations…If I care for you when you’re young so you’ll care for me when I’m old…But many Millennials won’t be able to afford that…The young today are paying taxes to support a level of benefits for the old that they themselves have no prospect of receiving when they become old.”
Pew survey data supports his contention:
- 51% of Millennials do not think there will be any money for them in the Social Security system by the time they retire.
- 39% believe they’ll get reduced benefits
So what do Millennials want from the health system? Their view is likely to disrupt how industry leaders operate their businesses and how policymakers make laws that govern its commerce.
Continue reading “What Do Millennials Want from the Healthcare System?”
Filed Under: OP-ED, THCB, The Business of Health Care, The Vault
Tagged: health reform, millennials, Paul Keckley, The ACA
Mar 18, 2014
In 1980, while working at the University of Chicago Pritzker School of Medicine, I wrote an article for the Harvard Business Review entitled “The Health Care Market: Can Hospitals Survive?”. This article, and the book which followed, argued that hospitals faced a tripartite existential threat:
1) ambulatory technologies that would enable physicians to compete successfully with hospitals at lower cost in their offices or freestanding settings, 2) post-acute technologies that would enable presently hospitalized patients to be managed at home and 3) rapidly growing managed care plans that would “ration” inpatient care and bargain aggressively to pay less for the care actually provided.
I predicted a significant decline in inpatient care in the future, and urged hospitals to diversify aggressively into ambulatory and post acute services. Many did so. A smaller number, led by organizations like Henry Ford Health System of Detroit and Utah’s Intermountain Health Care, also sponsored health insurance plans and became what are called today “Integrated Delivery Networks” (IDN’s).
In the ensuing thirty years, US hospital inpatient census fell more than 30%, despite ninety million more Americans. However, hospitals’ ambulatory services volume more than tripled, more than offsetting the inpatient losses; the hospital industry’s total revenues grew almost ten fold.
Ironically, this ambulatory care explosion is now the main reason why healthcare in the US costs so much more than in other countries. We use far fewer days of inpatient care than any other country in the world. But as the McKinsey Global Institute showed in 2008 ambulatory spending accounts for two thirds of the difference between what the US spends on healthcare and what other countries spend, far outstripping the contribution of higher drug prices or our multi-payer health financing system.
Continue reading “Can Hospitals Survive? Part II”
Filed Under: Economics, THCB, The Business of Health Care, The Vault
Tagged: ACA, ACOs, health reform, Hospital Revenues, Hospitals, Lean Care, Readmissions, Virginia Mason
Mar 14, 2014
Since mid-December, we’ve brought you the latest data on public opinion of the Affordable Care Act (ACA) from the RAND Health Reform Opinion Study (RHROS), a new way to measure public opinion of health reform. The RHROS allows us to observe true changes in opinion by surveying the same people over time.
The trend of overall stability masking churn in individual opinion that we discussed last week has continued with our latest data. This week, however, we delve deeper to look at differences in opinion between two groups: those who had insurance in 2013 and those who did not.
Understanding how the ACA impacts these groups differently is particularly important. While the ACA is currently changing the landscape of health insurance, its impact should be especially pronounced for Americans who lacked access to insurance through their employer or government programs in 2013.
The following graph illustrates the opinions over time of all individuals who had insurance, regardless of the source.
This includes those who had coverage through their employer, purchased it on the private market, or received it through a variety of government programs, such as Medicare and Medicaid.
This group represents about 85 percent of the overall sample.
This graph shows opinion of the ACA among those who were uninsured in 2013:
At first glance, what’s striking about these two graphs is how similar they are—more on that in a moment—but there are actually some very important differences.
Continue reading “Metrics: Surprisingly, People Who Were Uninsured Last Year Remain Undecided About the ACA”
Filed Under: THCB
Tagged: health reform, Katherine Grace Carman, Open Enrollment, RAND Health Reform Opinion Study (RHROS), The ACA, the uninsured
Mar 1, 2014
Since CMS’s Center for Medicare and Medicaid Innovation launched three years ago, its staff have been frequently hailed for undertaking an ambitious research agenda.
But a New York Times story this week was eye-catching for a different reason: author Gina Kolata mostly assailed Medicare’s researchers for how they’re choosing to do that research.
“Experts say the center is now squandering a crucial opportunity,” Kolata wrote in a front-page article. ”Many researchers and economists are disturbed that [CMMI] is not using randomized clinical trials, the rigorous method that is widely considered the gold standard in medical and social science research.”
But many researchers and economists that I talked to at this week’s Academy Health conference say that’s not the case at all. (And some were disturbed to learn that they were supposed to be disturbed.)
“RCTs are helpful in answering narrowly tailored questions,” Harvard’s Ashish Jha told me. “Something like—does aspirin reduce 30-day mortality rates for heart attack patients.”
“However, for many interventions, RCTs may be either not feasible or practical.”
“While RCTs may be the gold standard for testing some hypotheses, it is not necessarily the most effective or desirable model for testing all hypotheses,” agrees Piper Su, the Advisory Board’s vice president of health policy.
CMMI’s ambitious goals
On its surface, Kolata’s article is built around a reasonable conclusion: RCTs offer plenty of value in health care, and we’d benefit from more of them.
- As Jha alludes to, think of a double-blinded pharmaceutical study where half the participants randomly get a new drug and the other half get a placebo; that’s an RCT.
- The famous RAND study that found having health insurance changes patients’ behavior: An RCT.
- The ongoing Oregon Health Insurance Experiment: Also, an RCT.
And it’s fair to examine how CMMI is pursuing its research, too.
Continue reading “What the New York Times Got Wrong about Medicare’s Innovation Center”
Filed Under: THCB
Tagged: ACOs, Center for Medicare and Medicaid Innovation, CMS, Dan Diamond, health care delivery, health reform, NYT, randomized clinical trials
Feb 5, 2014
While your humble columnist eschewed forecasting for 2013, he has decided to reverse course and inaugurate the 2014 blogging season with a contrarian duodecimal exercise in futurism. Will this antidecimal augury align with the mysterious cosmic order and governing perfection? Let the readers be the judge in January 2015……
1. Obamacare will neither succeed or fail. This hugely complex law will have too many outcomes, statistics and analyses that will be subject to too much spin by both supporters and detractors. Like puppies clamoring for the mother’s attention, the loudest wins, but only in 15 minute media increments.
2. Inflation returns, with a vengeance: While we won’t know it until well into 2015 or 2016, 2014 will be the year that the sleeping giant of healthcare costs awakens. Millions of new insureds in an improving economy will finally get their pent-up pricey preference-sensitive health care needs fulfilled.
3. Duh, it’s the delays stupid: While low income Americans will appreciate having access to subsidized health insurance and Medicaid, the middle class’ unsubsidized sticker shock will threaten the fall 2014 elections. Caught between conflicting advice of insurance actuaries and political hacks, the White House’s regulatory choices will be obvious.
4. Commercial scientific misconduct: Unable to resist the allure of bonus payments (like this) or the branding that is dependent on the public release of quality outcomes, at least one large health entity will be caught committing “reporting fraud.”
5. Snowden blow-back: as the promise of big-data grows, fearful health care consumers will be even less inclined toward allowing access to their health information. Too bad they won’t be given a say.
6. Innovator’s Dilemma for health tech: solutions that are simple, transparent and modular will continue to make ‘from the bottom’ inroads into a tech industry that - like early data storage - is too complex, opaque and entangled.
7. Speaking of health tech, patient-monitoring solutions that offer more insight and less data will grab market share. Instead of a series of blood glucose results dumped into an electronic inbox, think algorithms that suggest insulin dose adjustments.
Continue reading “Twelve Things We’re Pretty Sure We’ll See Happen In Health Care In 2014″
Filed Under: OP-ED, THCB
Tagged: 2014, health reform, Implementation, Innovation, Jaan Sidorov, The ACA
Jan 3, 2014
As the health insurance exchanges find their footing and potentially millions of Americans gain access to insurance, this may be a good time to step back and take a longer term view of the ACA. When you get down to it, expanding health insurance coverage was the easiest and least controversial part of health reform. There is no shortage of ways to expand health coverage and almost any credible health reform proposal would have done the job, provided enough money was thrown at the problem.
In designing the ACA, perhaps as a result of political pressure, President Obama opted for a combination of heavily subsidized individual insurance exchanges and generous expansions of Medicaid. Freed from political constraints, he might have instead pushed for the single payer system that many of his most ardent supporters desired. Republicans inclined to expand coverage (at least one of us is proof that unlike the unicorn these do exist) might have pushed for a pure voucher program that harnessed market forces.
All of these options would expand coverage to the degree that policymakers were willing to fund them. So while we congratulate the President for his political success (we doubt the other options could have made it through Congress), it is a simplistic mistake to evaluate the implementation of the ACA by counting the numbers of uninsured or waiting for the monthly updates on the enrollment figures from the exchanges website. Any regulator with a big enough purse can, in the fullness of time, expand access. Frankly, that’s the “easy” part of healthcare reform.
But what about the other elements of the so-called “triple aim” of health reform: cost and quality? You see, while we agree that liberal, moderate, and conservative health reforms can all improve coverage, they each will have very different effects on the other important outcomes. Consider for example the oft-discussed “Medicare for all”; i.e. a single payer system. This would increase access without the messiness of the exchanges. It would also allow the government to flex its monopsonistic muscles and quickly reduce costs – though likely at the expense of quality. In contrast, relying on markets may not reduce costs in the short run, and may not necessarily reward real quality (though it has a better short than single payer in this regard).
Evaluating health reform in the context of the “Triple Aim” is important, but even that approach is not nearly enough. There is a broad consensus among that technological change is the most important long run driver of cost and quality. It follows that the most important element of health reform is its impact on technological change.
To understand how technological change affects all of us, consider the profound impact of the top ten medical advances in the last ten years, as listed by CNN:
1. Sequencing the human genome
2. Stem cell research
3. HIV cocktails
4. Targeted cancer therapies.
5. Laparoscopic surgery
Continue reading “What We Don’t Know Can Hurt Us”
Filed Under: OP-ED, THCB
Tagged: Costs, Craig Garthwaite, David Dranove, Economics, health reform, The ACA, Triple Aim
Dec 18, 2013