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A Modest Health Care Economics Experiment to Fight Rising Costs

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Healthcare providers, medical institutions, local pharmacies and pharmaceutical companies generally set the price of their products/services well above the payment they expect to receive from all insurers. These healthcare vendors set their fee schedule at 150%, 200% or 1,000% of the maximum payment they expect to receive from their most generous payor.

Here in Massachusetts, when a healthcare product or service is consumed and the patient has health insurance, the vendor submits a bill to the insurance company who specifies the “allowed fee,” which is considerably less than the “billed fee,” and the vendor “writes off” the balance of the  “billed fee” from their books.

For example, I recently had some blood tests done at Quest Diagnostics. Quest Diagnostics sent a bill to my insurance company for $660. The “allowed payment” was $110, so Quest wrote-off $550 and the “allowed payment” of $110 was divided between me and my insurance company.

Health 2.0 has something important to tell you

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Important news about my day job at Health 2.0 from my partner Indu Subaiya and me! You can also see the press release here and watch a video discussion with HIMSS CEO Steve LieberMatthew Holt

Indu and Matthew are excited to announce that after 10 years of convening the Health 2.0 community through our events and programs around the world, our conference company has found a new home and a partner who will help us exponentially expand our reach and impact. Effective immediately, we are joining forces with HIMSS and will be established as a new Health 2.0 business unit within the enterprise that includes HIMSS North America, HIMSS Analytics, HIMSS Media, HIMSS Europe, HIMSS AsiaPacific and the Personal Connected Health Alliance.

Health 2.0 and HIMSS share a single mission, to improve health outcomes by leveraging the best that technology has to offer. While terms change through the years, that common end goal hasn’t and won’t moving forward.

Our integration with HIMSS is a transformative opportunity to bring the knowledge and expertise from Health 2.0’s global network of entrepreneurs, developers and end-users together with that of clinicians, IT professionals, health care executives, policy leaders and other stakeholders to make a sustainable difference.

We are at a critical inflection point in the evolution of the health technology industry. Exciting advances in data science and AI, precision medicine and genomics, sensors and hardware to name just a few, coupled with the increased rate of adoption of digital health technologies by health care providers, payers, life science companies and communities require a level of collaboration like never before.

And yet, start-ups face barriers to access and distribution while large organizations face challenges in vetting and selecting new technology partners. Working with HIMSS, we will be able to create even more vibrant formats for interaction and more efficient mechanisms for innovation to spread throughout the healthcare system.

Countries around the world want to share models and best practices, to import and export health technology innovation while growing their own markets and their market reach globally. Working with HIMSS, we will be able to combine and expand our global footprint to be better ambassadors as well.

Indu will join HIMSS as executive vice president for the newly established Health 2.0 business unit and continue to co-host Health 2.0’s Annual Fall and Wintertech conferences with Matthew, while he will be our globe-trotting ambassador and continue to host and develop our international business.

Since 1961, HIMSS has focused on its vision of improving health and healthcare with the best use of information technology. Now, more than 55 years later, it continues on this path to improve the quality and affordability of, and access to, healthcare.

Health 2.0 was born from a need for consumers to take charge of their health using new technology frameworks that disintermediated access to health information and services. Over the past 10 years the Health 2.0 community has spawned an ecosystem of companies that helped bridge the gap between the institutional world of care delivery. We were bound to meet in the middle.

As with all great partnership journeys, we know this is not an ending, but a beginning.  When it comes to technology, there will always be a new frontier. It’s going to take all of us to explore that frontier together and to translate new ideas into the industry standard. We need both the foundation and the means to continually experiment to make good on our mission to leverage the best technology has to offer in helping us live healthier lives.

Onwards and together,

Indu & Matthew

Indu Subaiya is Co-Chairman & CEO of Health 2.0, and Matthew Holt is Co-Chairman of Health 2.0

Are Europeans Ready to Become Health Consumers?

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“Health consumers” – the concept is a little foreign to our conception of health services in Europe. As Europeans we tend to think that if it touches our health it should be free. In this context, how can we count on health consumers to fuel the development of the Health 2.0 industry in Europe?

There are some cases where we are ready to get our wallets out. We’re more inclined, for instance, to pay for our wellness than we are to pay for our health. We’re OK to pay for an activity tracker; we think a diabetes management solution should be covered and reimbursed. There are also a few niches where we don’t hesitate to become health consumers: the market of fertility solutions is a good example.

With the wide range of Health 2.0 apps and solutions out there, we’re rediscovering the concept of choice along with a different kind of empowerment… as customers.

What are the other ways Europeans are turning into empowered health consumers?

The Strange Making of the “Marketplace Stabilization Rule”

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On April 13 CMS published the agency’s final “market stabilization” rule.  The proposed rule was summarized by THCB’s editors on February 15, the day it was published, and on March 22 THCB published my essay in which I noted CMS provided no evidence any of the proposed reforms would actually stabilize the state marketplaces.  The final rule, ostensibly a carbon copy of the proposed, finalizes the six proposed changes without, again, providing any evidence these changes will stabilize the markets by increasing enrollment and issuer participation.

Briefly, the final rule will reduce the 2018 enrollment window from three months or to six weeks, or from November 1 to December 15.  The rule narrows the definition of guaranteed availability by allowing issuers to apply re-enrollment payments to outstanding debt.  The rule will require 100 percent verification for enrollees’ attempting to acquire insurance during a Special Enrollment Period (SEP) and places other payment, eligibility and exceptional circumstances restrictions on SEP enrollment.  The rule finalizes an increase in de minimus variation from +/- 2 percent to -4/+2 percent except for bronze plans which increases to -4/+5 percent.  The rule will allow states to determine plan  network adequacy or make a determination using an issuer’s accreditation status.  The rule finalizes a reduction from 30 to 20 percent of plan providers being defined as an Essential Community Provider (ECP).  For plans that cannot meet the 20 percent determination, CMS will allow for a narrative explanation.

Struggling to Get Customers, Revenue and Traction in the Digital Health Market?

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Imagine the peace of mind and confidence you will feel if you had a quick, proven process to take your solution or concept from its current state to one that generates sustainable revenue, hoards of customers and value to the healthcare ecosystem.

Elena Lipson has been working with organizations and entrepreneurs in the digital health community for more than 15 years to help them successfully bring new products and services to market, identify and engage new customers and partners, and grow their market share.

For the first time, she is offering a free webinar training to the Health 2.0 community to share the three steps you need to create a blueprint for your digital health solution that will get you customers, accelerate your path to revenue, and help you go to market quickly even if:

The 401W: A Wellness Program Even Al Lewis Could Love

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I’ve been quite vocal about supporting only wellness done for employees and not to them…but what if there could be a “conventional” wellness program – even including screening, HRAs etc. – that both you and I could love?

People manage what’s measured and what’s paid for. If employers want people to stay healthy in the long run, why not measure and pay for health in the long run?

Why not give people the incentive to stay healthy during their working years, instead of giving them the incentive to pretend to participate in programs of no interest, just to make a few bucks? Or, worse, give employees the incentive to learn how to cheat on biometrics, and how to lie on health risk assessments. Attempts to create a culture of health often create a culture of resentment and deceit.

Short-term incentives haven’t changed weight, as noted behavioral economist Kevin Volpp has shown. Nor have they changed true health outcomes – it is easily provable that wellness has almost literally never avoided a single risk-sensitive medical event. So-called outcomes-based programs, ironically, are more about distorting short-term outcomes than achieving long-term outcomes. They have more in common with training circus animals to do tricks in exchange for treats than they do with helping employees improve long-term health.

MACRA Is Broken. It Needs to Go Away Now.

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At its January 12, 2017 meeting, the Medicare Payment Advisory Commission (MedPAC) made it clear they had reached the conclusion that the Merit-based Incentive Payment System (MIPS) cannot work (see my last post ). MIPS is the larger of the two programs within MACRA; the Alternative Payment Model (APM) program is the other. The commission’s primary rationale for its conclusion about MIPS is that it’s not possible to measure physician “merit” (cost and quality) at the individual physician level.

But rather than recommend that Congress repeal MACRA (the Medicare Access and CHIP Reauthorization Act), MedPAC decided to try to fix it. At the January and March 2 meetings, the commissioners discussed a staff proposal to amend MIPS substantially and to tweak the APM program. Those discussions went nowhere.

I give MedPAC credit for finally stating unequivocally that MIPS cannot work. But MedPAC should never have volunteered to fix MACRA. It can’t be done. By proposing modest amendments to MACRA and thereby implying it’s fixable, they stepped into an intellectual tar pit. I will illuminate this tar pit by describing the commission’s unproductive discussion about the staff’s proposed amendments to MACRA. To give you a sneak preview of what that discussion was like, I give you two excerpts from the transcript of the January meeting:

Measuring MACRA

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With all the machinations over ACA repeal and replace, the new law that makes big changes in the way the federal government pays doctors—the Medicare Access and CHIP Reauthorization Act, or MACRA—hasn’t garnered much attention lately.

But doctors nationwide are sure thinking about it. That includes many of the regular commentators on THCB. I think it’s accurate to say that most of them have been highly critical of MACRA since the law was enacted in April 2015, and even after it was significantly amended late last year to address physician complaints. (See, for example, Kip Sullivan’s most recent post here.)

The law’s main provisions kicked in on Jan. 1, 2017, with 2017 being the first performance-reporting year, affecting payment in 2019.

In a policy brief on MACRA for Health Affairs published late last month, I raised a host of questions about MACRA.

As Kip and many others have noted, some parts of MACRA are weakly designed and both the law and regulations implementing it make some big assumptions. Excerpts from one section of the policy brief are below. The whole brief can be had at the link above. If you are well versed in MACRA, you can skip to the section titled “What’s the Debate?

Is the overall design coherent and workable?

Major special-interest groups, including those representing physicians, industry, and consumers and patients, supported MACRA’s intent and the general framework of the regulations through three comment periods.

However, almost all groups sought changes and raised questions. CMS’s final revisions were most responsive to physician groups, which were insistent on an easier path and more flexibility for doctors in the initial years of the program.

Yes, Mr. President. Health Care is Complicated. And Also Hard.

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By ASEEM SHUKLA, MD

“Nobody knew that health care could be so complicated,” President Donald Trump told us a few weeks ago.  As the failure of the House Republican  bill shows: Healthcare is hard.

The American Healthcare Act failed to clear the House of Representatives despite catering to longstanding conservative demands: rid the ‘individual mandate’ (designed to force able-bodied people to pay insurance so it’s cheaper for sick people), subsidies to individuals, and revamping Medicaid into block grants to states.

Even with the claim it could be deficit-neutral, the act failed to win enough moderate or conservative Republicans.

While Obamacare stays, the progressive wing of the Democrat party still calls for a single-payer Medicare-for-all health care system.

They would offer a dual catharsis: the moral certitude of declaring health care as a right; and the beguiling simplicity that one only need expand an existing entitlement and simply include the 264 million Americans not currently covered.

But leave aside questions of practicality and which option balloons the national debt further (both actually would), no proposed alternative delivers a cure-all.

Protection? Fairness? Hardly.

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The American Health Care Act (aka Trumpcare or Ryancare) failed because it was patched together and would have imperiled insurance benefits for millions of the neediest Americans. Two other health care related bills – the Protecting Access to Care Act and the Fairness in Class Action Litigation Act – have made it out of the U.S. House and are currently pending in the U.S. Senate.  If passed they will produce the same abysmal result.  Like the American Health Care Act, they should be rejected.

Protection and fairness?  How could anyone be against that?  Unfortunately, the titles hide the motive of these bills: maybe cost savings and damn the public good.  These bills appear to have been written by lobbyists to protect corporate bottom lines.  Both bills will add to the substantial roadblocks injured patients already face in attempting to vindicate their rights against powerful entities and corporations in the legal system.

The Protecting Access to Care Act (H.R. 1215) is being touted as a way to control the cost of frivolous medical malpractice lawsuits.  The Act would limit medical malpractice victims’ ability to have their day in court by making certain providers immune from lawsuits and imposing strict caps on damages for victims of medical malpractice regardless of the degree of injury or the extent of negligence involved.  Some variation of this bill has been floating around Republican circles for decades.  There is no question this bill would likely reduce costs for medical providers and insurance companies, but there is every reason to believe it will do so by harming ordinary Americans.

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