Politicians and pundits everywhere call for more disease prevention as a way to reduce healthcare costs. Certainly you cannot argue with the logic that “an ounce of prevention is worth a pound of cure.”
Or can you? It turns out that you can not only argue against that so-called logic, but – just as with cancer detection, which may have been done to excess in some protocols — you can mathematically prove that, at least for asthma, it takes a pound of prevention to avoid an ounce of cure.
The database of the Disease Management Purchasing Consortium Inc. (www.dismgmt.com) tracks both asthma drugs and visits to the emergency room (ER) and hospital stays associated with asthma. The average cost of an attack requiring an ER visit or inpatient stay is about $2000. The average cost to fill a prescription to prevent or recover from an asthma attack is about $100. It turns out that asthma attacks serious enough to send someone to the ER or hospital are rare indeed. In the commercially insured population, these attacks happen only about 3-4 times a year for every thousand people. (The rate is much greater for children insured by Medicaid; additional resources spent on prevention could very well be cost-effective for them.)
For a million-member health plan, that might be 3000 or 4000 attacks Yet that same million-member health plan is paying for hundreds of thousands of prescriptions designed to prevent or recover from asthma attacks. Depending on the health plan, the ratio of drugs prescribed to asthma events serious enough to generate an ER or hospital claim ranges from 60-to-1 to 133-to-1. Using those statistics of $2000 per event and $100 per prescription, a health plan would pay, on average, anywhere from $6000 to $13,300 to prescribe enough incremental drugs to enough incremental people to prevent a $2000 attack.
Averages lump together people at all risk levels. Surely some of those people really are at high enough risk of an attack that they are already inhaling their drugs regularly to prevent one, and have a “rescue inhaler” nearby. By definition their risk of attack is much greater than for low-risk people. Assume, very conservatively, that low-risk patients have a risk of attack which is half that of the average patient. This means that putting most low-risk patients on drugs costs $12,000 to $26,600 for every $2000 attack prevented.
Continue reading “Can Too Much Preventive Care Be Hazardous to Your Health?”
Filed Under: OP-ED, THCB
Tagged: Al Lewis, Asthma, Cancer Screening, Disease Management, Economics, ER visit, Medicaid, prevention
Dec 2, 2012
Yesterday’s New York Times headline read that “Medicare Is Faulted on Shift to Electronic Records.” The story describes an Office of Inspector General (OIG) report, released November 29, 2012, that faults the Centers for Medicare and Medicaid Services (CMS) for not providing adequate oversight of the Meaningful Use incentive program. Going after “waste, fraud, and abuse” always makes good headlines, but in this case, the story is not so simple.
For those not intimately familiar with the CMS policy, in 2009, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act. The program, administered through CMS and state Medicaid programs, created financial incentives for doctors (and other eligible professionals) and hospitals to adopt and “meaningfully use” a certified electronic health record (EHR). To receive financial incentives, which began to be paid in May 2011, doctors and hospitals “attest” that they have met the meaningful use requirements, providing an affirmation for which they are held legally accountable.
The process works as follows: health care providers visit a CMS website, register, and enter data demonstrating that their EHRs are “certified” and that they met each of the individual requirements for meaningful use. Then they attest that that all the data they entered is true. For example, a physician might have to report, to meet just one of the 20 meaningful use measures, how many prescriptions she wrote over the past 90 days, and how many she wrote electronically. My conversations with colleagues suggest that it can take a lot of time for providers to gather all the data they need to “attest” to meeting Meaningful Use. Then, CMS runs logic checks to ensure that the numbers entered make sense and, if there are no errors, they cut the provider a check. Through September, 2012, CMS paid out about $4 billion in incentives to 82,000 professionals and more than 1,400 hospitals.
Continue reading “Trust But Verify: Why CMS Got It Right on EHR Oversight”
Filed Under: THCB
Tagged: CMS, EHR, HITECH, Medicaid, OIG
Nov 30, 2012
In 2009, Rick Scott founded Conservatives for Patients’ Rights, a health care pressure group opposed to President Obama’s health reforms.
In 2010, Scott ran for governor of Florida on a mission to repeal Obamacare.
In 2012, Scott … will work to implement Obamacare.
For some conservatives, it’s a shocking reversal. Leaders of Americans for Prosperity, the conservative organization backed by the influential Koch brothers, were publicly disappointed in the Florida governor — who not so long ago said the Affordable Care Act was “the biggest job killer in the history of the country.”
Now, it will be Scott’s job to help implement it.
Given his prominence, Scott’s move from Obamacare opponent to grudging supporter may be the biggest symbolic shift on the law since its passage.
The Florida governor was reportedly pressured by state legislators to negotiate with federal officials over the ACA, once November’s election made clear that Obamacare was here to stay.
But Scott won’t be the last GOP official to change his tune. More health care groups in other Republican-led states are putting similar pressure on their leaders to opt into the ACA’s Medicaid expansion, in hopes of securing additional dollars for providers.
Continue reading “What the Rick Scott Decision Says About the Future of Health Care in the U.S.”
Filed Under: THCB
Tagged: 2012 Election, Dan Diamond, Florida, GAO, GOP, Kaiser Family Foundation, Medicaid, Medicaid Expansion, Medicare, Obamacare, Rick Scott, The ACA
Nov 29, 2012
“This could be big,” he said after I told him about the company who wants me to cover their 100+ employees. I pay him to give me the stark reality of things, but his optimism made me uncomfortable. ”You’ve got to go for this. I know you don’t feel ready for it yet, but this could really be huge for your business, and I don’t think you should pass this up.”
I sighed. Yes, this is a victory of sorts (still only theory, not reality), but what if I can’t deliver? What if I fail?
“You know,” a colleague told me during another phone conversation, “you are the buzz of the medical community right now. We talked about you for half an hour at lunch today…and it was all good!” He went on to use phrases like “our only hope,” and “the way out,” to describe the potential for my practice model.
“No,” I thought, “I am not Obi-Wan. I’m not your only hope.” I sighed. I don’t want that kind of pressure on me before I even see my first patient. What if I fail?
Even worse: what if I succeed?
One of the main things that separates good clinicians from the rest is the ability to think through contingencies. When I order a test or prescribe a treatment I have to consider the possible outcomes: if the test shows X, then we do Y; if it shows not-X, then we do Z. Or, here’s the plan if you get better on the medication, and here’s the plan if you don’t. The more contingencies I can anticipate and plan for, the more direct the path to the ultimate destination: resolution (or management) of the problem. I find that my experience in thinking through contingencies serves me well in my current job of building a new and innovative practice.
Continue reading “What If Success Sucks?”
Filed Under: Physicians, THCB
Tagged: Consulting, direct care practice, Medicaid, Medicare, Organic medical home, private practice, Rob Lamberts
Nov 27, 2012
No one would deny that we’ve reached a point in public healthcare finance where tough choices have to be made about what gets covered and what doesn’t. There is, however, one fairly easy choice, and that is to reconfigure the $3 copay for Medicaid members using the emergency room.
I would propose a replacement benefit of $0 for the first visit and $20 for each subsequent one, in a given calendar year. Not every state, but any state that reaches certain thresholds for physician access or urgent care availability may switch to this policy.
Here are the arguments in favor. First, each $3 visit costs the state and federal government about $500. There are few discretionary or semi-discretionary patient decisions that cost so little to trigger so much taxpayer spending. (Hospitalizations have that kind of ratio, but a patient can’t check himself into a hospital the way he can visit an ER.)
Second, one must consider the historical context. The $3 copay (“$3″ is a shorthand for $0 to $10 — I don’t think it is over $10 anywhere) is a vestige of the bad old days when it was very difficult to find physicians who accepted Medicaid patients. That is still the case in some locales; they would not be eligible for this waiver. The world has changed, but the copay hasn’t.
Third, ER utilization rates in the TANF population, which because of its average age is generally pretty healthy, far exceed that of the commercially insured population. This is despite the fact that TANF members in general cost much less than commercially insured people, a gap that widens still further once birth events are removed from the calculation. Clearly there is much excess utilization.
Continue reading “Is It Time To Charge Medicaid Members for ER Usage?”
Filed Under: THCB
Tagged: Al Lewis, copays, ER, Medicaid, North Carolina Medicaid, TANF
Nov 24, 2012
This November, voters weighed in on an array of state ballot initiatives on health issues from medical marijuana to health care reform. Ballot outcomes by state are listed below (more after the jump).
Voters in Alabama, Montana, and Wyoming passed initiatives expressing disapproval of the Affordable Care Act, while a similar initiative in Florida garnered a majority of the vote but failed to pass under the state’s supermajority voting requirement. Missouri voters passed a ballot initiative prohibiting the state executive branch from establishing a health insurance exchange, leaving this task to the federal government or state legislature.
Florida voters defeated a measure that would have prohibited the use of state funds for abortions, while Montana voters passed a parental notification requirement for minors seeking abortions (with a judicial waiver provision).
Perhaps surprisingly, California voters failed to pass a law requiring mandatory labeling of genetically engineered food. Several states legalized medical marijuana, while Arkansas voters struck down a medical marijuana initiative and Montana voters made existing medical marijuana laws more restrictive.
Colorado and Washington legalized all marijuana use, while a similar measure failed in Oregon.
Physician-assisted suicide was barely defeated in Massachusetts (51% to 49%), while North Dakotans banned smoking in indoor workplaces. Michigan voters failed to pass an initiative increasing the regulation of home health workers, while Louisiana voters prohibited the appropriation of state Medicaid trust funds for other purposes.
Continue reading “Roundup of State Ballot Initiatives on Health Issues”
Filed Under: THCB
Tagged: 2012 Election, Abortion, Bill of Health, California, Colorado, Florida, Genetically Modified Food, Home Health Care, Katie Booth, Louisiana, Massachusetts, Medicaid, Medical Marijuana, Michigan, Oregon, Petrie-Flom Center, Physician-Assisted Suicide, Smoking Ban, State Ballot Initiatives, The ACA, The States, Washington, Wyoming
Nov 15, 2012
President Obama has won reelection, and his administration has asked state officials to decide by Friday, November 16, whether their state will create one of Obamacare’s health-insurance “exchanges.” States also have to decide whether to implement the law’s massive expansion of Medicaid. The correct answer to both questions remains a resounding no.
State-created exchanges mean higher taxes, fewer jobs, and less protection of religious freedom. States are better off defaulting to a federal exchange. The Medicaid expansion is likewise too costly and risky a proposition. Republican Governors Association chairman Bob McDonnell (R.,Va.) agrees, and has announced that Virginia will implement neither provision.
There are many arguments against creating exchanges.
First, states are under no obligation to create one.
Second, operating an Obamacare exchange would be illegal in 14 states. Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah, and Virginia have enacted either statutes or constitutional amendments (or both) forbidding state employees to participate in an essential exchange function: implementing Obamacare’s individual and employer mandates.
Third, each exchange would cost its state an estimated $10 million to $100 million per year, necessitating tax increases.
Fourth, the November 16 deadline is no more real than the “deadlines” for implementing REAL ID, which have been pushed back repeatedly since 2008.
Fifth, states can always create an exchange later if they choose.
Sixth, a state-created exchange is not a state-controlled exchange. All exchanges will be controlled by Washington.
Continue reading “Obamacare Is Still Vulnerable”
Filed Under: OP-ED
Tagged: 2012 Election, Cato Institute, federal exchange, Health Insurance Exchanges, Medicaid, Michael Cannon, Obamacare, President Obama, The ACA
Nov 10, 2012
Although members of the Obama team are now celebrating their election victory, the next four years will not be smooth sailing. Ignoring the campaign rhetoric, there is still much more work to be done in order to reshape our health care system; the effect on academic medical centers and teaching hospitals will be significant.
The political conscience is still being driven by the fear of the fiscal cliff, which dominates most Washington conversations. Both political parties agree that health care is a significant contributor to our present and future deficit and that we have to figure out how to deliver more care at a lower cost. But, they argue about what to call it, who gets credit, and whether the solution is bigger government involvement or a dominant private market?The potential cuts to NIH funding and graduate medical education support do not go away with another four Obama years. We anticipate that the president will reform the tax code and transform how we deliver health care. The latter will be his lasting legacy.
However, in all this chaos, there are opportunities. While we no longer hope for a bipartisan middle ground on health care — and rancor will certainly escalate if President Obama is reelected — to many people, the Affordable Care Act is starting to look like a tangible business opportunity. Every insurer is looking at the 30 million uninsured people who will receive coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people. These new markets could be worth $50 billion to $60 billion in premiums in 2014, and as much as $230 billion annually within seven years. The structure and implementation of these programs present specific challenges for AMCs.
Continue reading “The Future of Health Care in Obama’s Second Term”
Filed Under: THCB
Tagged: 2012 Election, Health Insurance Exchanges, Joanne Conroy, Medicaid, Physician Shortages, President Obama, The ACA
Nov 7, 2012
In last Sunday’s New York Times, Paul Krugman extolled the virtues of Medicaid. Here are some excerpts from this astonishing column:
“Medicaid has been more successful at controlling costs than any other major part of the nation’s health care system.”
“How does Medicaid achieve these lower costs? Partly by having much lower administrative costs than private insurers.”
“Medicaid is much more effective at bargaining with the medical-industrial complex.”
“Consider, for example, drug prices. Last year a government study compared the prices that Medicaid paid for brand-name drugs with those paid by Medicare Part D — also a government program, but one run through private insurance companies, and explicitly forbidden from using its power in the market to bargain for lower prices. The conclusion: Medicaid pays almost a third less on average?”
In the days since this column was published, I have spoken with many experts on Medicaid who are uniformly appalled by it. While I may not reach the same audience as the New York Times (at least not yet!), I feel compelled to set the record straight on Medicaid’s “successes.”
Continue reading “Setting the Record Straight on Medicaid’s “Success””
Filed Under: THCB
Tagged: David Dranove, Health care spending, Medicaid, Paul Krugman, Quality
Nov 5, 2012
Ezra Klein is right. In a recent Washington Post column, the left-leaning policy wonk laid plain that the future of ObamaCare is at stake in next week’s elections. If President Obama wins and Democrats hold the Senate, the Affordable Care Act will survive. If Mitt Romney wins and Republicans take the Senate, the law is dead. It is the starkest of differences.
How likely is each scenario? At this moment Democrats have the advantage. According to Real Clear Politics, the president is running slightly ahead in six out of ten battleground states. He could actually lose seven of these, but still be reelected if he hangs onto Ohio, Wisconsin, and Iowa.
While key Senate races have tightened, such as Tommy Thompson in Wisconsin, Democrats have a slight advantage there too. If the elections were held today, Republicans would fall two seats short.
What would this future look like? Implementing ObamaCare would be accelerated. HHS and states will have less than fourteen months to finalize major provisions of the law before they take effect on January 1, 2014.
Thousands of pages of regulation will be released shortly after the election, on everything from IRS rules for employers to essential health benefits to covering pre-existing conditions. It remains to be seen how prescriptive these regulations would be.
State officials will have to submit a blueprint for their insurance exchanges by November 16th. They will need to decide if they will create and exchange and how it will be designed.
They will also have to decide whether to expand their Medicaid programs, and they’ll need to determine essential health benefits and benchmark plans for the insurance options to be sold through their exchanges.
Continue reading “Healthcare Law on the Ballot”
Filed Under: OP-ED, THCB
Tagged: 2012 Election, David Merritt, employer-sponsored insurance, Essential health benefits, IRS, Medicaid, Obamacare, Real Clear Politics, The ACA
Nov 2, 2012