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Inconvenient Facts (For Both Republicans and Democrats)

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By ROBERT LASZEWSKI

I call your attention to Ezra Klein’s column in the Washington Post this morning.

In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.

Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada, or Switzerland.”

The data would seem to indicate that even our single payer government-run American health care programs, Medicare and Medicaid, cost way more than similar health plans in these nations.

The argument is often made that we should adopt a single payer—or perhaps a “public option”—health plan in the United States in order to control costs and cover everyone. But it would appear that even those programs in America are way too expensive when compared to similar programs in other industrialized nations.

As for the Republican market-based approach, Klein also points out that those programs have been ineffective at cost control. House Republican Paul Ryan often cites the Medicare Part D drug benefit as proof his proposals to privatize Medicare would work better than what we have. But as Klein points out, Part D premiums have risen 57% since 2006 and the program is on track to see nearly 10% growth in annual costs over the next decade.Continue reading…

Vouchercare for Cancer

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By MERRILL GOOZNER

The health care cost debate takes place on two stages using two languages, one scientific, the other economic. The net result is a failure to communicate.

The scientific texts emanated over the weekend from the American Society of Clinical Oncology meeting in Chicago. Ongoing clinical trials showed that science has come up with new drugs that can reduce the incidence of breast cancer and prolong life for people with skin cancer. The former is an estrogen inhibitor that would have to be taken by tens of millions of older women to have a major impact on reducing the rate of breast cancer. The latter would only be given to a subset of the 68,000 new cases of melanoma each year, and would extend life from a few months to a few years for some of the 7,700 who die from the disease each year. Again, most of those people are older, although there are a number of younger people, especially young women, who disproportionately get advanced skin cancer.

For both groups, the cost to the health care system when these drugs are approved, as they inevitably will be, will be calculated in the billions. Medicare will pick up the lion’s share of the tab, since most of the patients in both groups will be over 65.

Now let’s step around the corner to stage two, where the debate in this morning’s papers (if you read the Washington Post and New York Times every day, as I do) is over Rep. Paul Ryan’s plan to turn Medicare into a voucher program. Paul Samuelson, the top economics columnist in the Post, essentially endorses the plan saying “under Ryan’s plan, incentive would shift. Medicare would no longer be an open ATM; the vouchers would limit total spending.” What he doesn’t say is that it would only limit total spending by government. It would require seniors to pick up a growing share of the bill, and limit their own purchasing of health care, either by purchasing plans that didn’t cover expensive end-of-life care, or simply denying themselves routine treatments to avoid co-pays and deductibles.Continue reading…

Coordinating Care Coordination

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By MARGALIT GUR-ARIE

Care coordination is one of the four pillars of Meaningful Use, one of the six NCQA Patient Centered Medical Home (PCMH) standards and one of the main goals of Accountable Care Organizations (ACO). Care coordination, particularly for patients with multiple chronic conditions, is expected to reduce unnecessary repetition of laboratory testing or imaging and the number of avoidable admissions. Other than reducing overall costs, care coordination is also supposed to improve quality of care. According to experts like Joe Flower, “Lack of care coordination is at the core of the mess healthcare is in”, and nobody in their right mind would argue that it is best that medical care remains disorganized and uncoordinated, if it is indeed so. It seems that our fee-for-service, fragmented and fractured (lots of f-words here) health care system is not conducive to care coordination. When patients float around in a sea of hospitals, physicians, nursing homes and other facilities, each care provider gets paid, and is responsible for the piecework performed at their independent entity and nobody is minding the handoff of patients to the next provider of care, and nobody is assembling a comprehensive picture of the entire care process, let alone orchestrating, or coordinating, the progression of patients between stages of care and the overall needs of patients in transit. What would it take then, to see that the bits and pieces of health care we now have, become a safe and affordable continuum of care?

CMS is taking the lead, as it should, in an all-out effort to encourage health care coordination through various carrot-stick initiatives, aligned to ultimately base payment for medical care on value to the patient, as measured on a population level, instead of fee-for-service and no accountability for outcomes. These initiatives fall into three general categories:

  1. Health Information Technology to assist with documentation, information exchange and measurements as required in any coordination effort.
  2. Incentives and penalties for providers based on measures thought to be influenced by care coordination (e.g. preventable hospitalizations, readmission rates, etc.)
  3. Financial and structural encouragement for vertical integration of the delivery system (e.g. ACOs, consolidation, employed physicians, etc.)Continue reading…

Some of My Best Friends are in Private Equity

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By PAUL LEVY

Like moths to a flame, private equity investors are quick to pounce on those sectors of the economy that have the potential for higher than average returns. Such investors also have an appetite for the higher risk that accompanies those sectors. In this manner, private equity can serve a useful role in capital formation for the economy. It also helps money managers who want a portion of their portfolio to be in that part of the risk-reward spectrum.

Health care is a fertile field for private equity. You might not think so because of concern about rising costs, but as someone once said, “One person’s costs are another person’s income.” Let’s look at it this way. First, more people will have access to insurance to pay for diagnosis and treatment because they will be newly eligible for private insurance under the national health care reform law. Second, demographic changes in society are producing an ever-increasing demand for health care services. Longer lifespans and the aging population offer a growing number of people with cancer and the other diseases that are more likely to occur with age. The number of Medicare beneficiaries is projected to rise from 46.6 million today to 78 million in 2030. (It was 40 million in the year 2000.)

It is with this background that we should consider the growing interest by private equity in proton beam facilities. You have heard before about my real concern about the cost impact of rapid expansion of the number of such facilities.

I want to expand on that today and give you a sense of how the dollars work in this kind of investment. I have pointed out how the Medicare rate-setting process contributes to its profitability. Let’s look at this in very rough form.Continue reading…

The Summer of Sequels

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By DAVID DRANOVE

I have seen this film before. Folks get all excited about the potential for vertical integration to save our healthcare system, and then the facts emerge.

The results of the first major ACO demonstration project are in and unless there is some hidden meaning behind all the data, it looks like ACOs may not be the magic bullet that the Obama administration had hoped. The demonstration began under President Bush and the specific payment structure and quality incentive differ somewhat from the ACO rules under the Affordable Care Act, but the main features are the same – give an integrated provider organization a share of the savings if it can hold down Medicare spending while also offering some quality bonuses.

Despite the fact that the participants included ten of the nation’s best known physician-led integrated organizations, less than half were able to lower Medicare costs by the final year of the project and only two demonstrated consistent cost savings. And the methods used to achieve savings – nurse call centers and telephone health checkups – are the sorts of thing that don’t exactly require vertical integration.

There are going to be excuses – the ACOs need to be run by hospitals, they need more time to develop their information technologies, the performance incentives need to be strengthened. But that is the kind of ex post rationalizing one hears any time an experiment fails to support a theory. Maybe the theory (that vertical integration is the panacea for our ailing system) is wrong.Continue reading…

Creating Value-Based Incentives For Primary Care

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By BRIAN KLEPPER & DAVID KIBBE, MD

In a remarkable recent interview, Donald Berwick MD, Administrator of the Centers for Medicare and Medicaid Services (CMS), eloquently described his vision of value-based health care.

Paying for value is an incentive…The underlying idea of improvement is that American health care, historically built in fragments, often cannot achieve for patients what it really wants to achieve…Health delivery system reform refers to really reconfiguring care into much more seamless coordinated-care operations so that people, especially those with chronic illnesses, experience continuity of care over time and space.

So when patients come home from the hospital, there is a smooth handoff, and all the necessary information follows them. When they are seeing a specialist, that specialist is coordinating care with their primary care doctor.

This description probably resonates with most health care professionals as a better approach than the current paradigm’s fragmentation and lack of continuity of care. But as with many things in health care, it won’t be easy getting to a value-based health care approach in Medicare and Medicaid. Despite wide acknowledgement that fee-for-service perpetuates our health system’s most undesirable characteristics, the mainstream of American health care seems stuck. One wonders whether CMS can rise above the special interest lobbying, get beyond the interminable pilots and decisively act on payment reform with the conviction required to help save health care from itself.

Still, the idea of value-based reimbursement begs questions. What payment methodology will incentivize the best quality and most efficient care? What path can take us there?Continue reading…

Why Angry Birds Gets More Play Than Health Apps

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By JESSIE GRUMAN


I have been musing about why, despite our fascination with gadgets and timesaving devices, so few of us use the apps and tools that have been developed to help us take care of ourselves.

The range of options is staggering – my iPhone coughed up 52 applications for medication reminders just now – but most of us don’t make use of the (often free) high-tech help available to us.  There are hundreds of websites and portals to help us monitor our diets, physical activity and blood sugar, talk to our doctors by e-mail and understand our test results.  Apps can help us watch for drug interactions, unravel our test results, adjust our hearing aids and track our symptoms.  Devices can monitor whether our mom is moving around her house this morning or continuously monitor our vital signs.

Interesting ideas.  Modest pickup.

In an essay published in the May issue of the American Journal of Preventive Medicine supplement “Cyberinfrastructure for Consumer Health,” I make some observations about why this may be so, based on my experience as a person who daily responds to an exciting variety of chronic and acute conditions that ebb and flow in my body.  My remarks are addressed to those who fund and develop devices and Web-based tools to help those of us with chronic conditions better care for ourselves.Continue reading…

Costs are Up…Because They’re Higher Than They Were

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By EVAN FALCHUK

In perhaps no other country is there a greater abundance of data about health care than there is in the United States.  And in perhaps no other country is there more confusion as to what’s really going on.

Take the recent report by powerhouse actuarial firm Milliman (disclosure:  Best Doctors uses Milliman for actuarial work).  It’s a fascinating report with some of the best information on American health care there is.

The major take-away:  U.S. health care costs continue going up.

But when people start interpreting the data, well, that’s where the trouble starts.

For example, NPR reports on why costs are going up:

For three straight years, outpatient care has led all other categories of care in cost increases. Ninety percent of the increase is in more types of care being delivered in outpatient settings.

Factually, of course, this is correct.  More and more care is being delivered in outpatient settings.Continue reading…

First Meaningful Use Dollars Are Just the Start

By JONATHAN BUSH

The first of our clients just got issued his Meaningful Use check. He is Dr. Allen Ferguson, a family practice doc in Eaton, Ohio. He practices in a health professional shortage area so it was a little bigger than the $18K maximum year one payment. He was thrilled and we are thrilled for him…but not ecstatic, yet.

Unlike other companies, our goal is not and was never to build an application that could only be used to get a bonus like the Meaningful Use bonus. It is to actually GET EVERY BONUS available and every payment dollar deserved by every doc on our network.  Our mantra for each service team is this: Be the best in the world at getting docs paid for doing the right thing.

This presents a two-fold challenge in this mini-era of Meaningful Use bonus infatuation. First, we want it all, and less than all will not do.  We have guaranteed that every Medicare eligible doc on our athenaClinicals EHR service who signs up and does his or her part will in fact get it. Hence, our real measure of success is 100% of docs winning and NOT the idea that winning is possible. Second, we are committed to ensuring that every doc actually achieves the measures even though the government has taken a “don’t ask/tell” stance by requiring only that docs “attest” that they are compliant rather than show it. We can’t play that way. Since we’re on this thing called the cloud, we actually do know exactly how Meaningful Use compliant every one of our docs is and exactly what they have to do to cross the threshold to meet the definition. Continue reading…

The Role of Conflicted Science in the Cell Phone-Cancer Link

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By MERRILL GOOZNER

Dr. Len over at the American Cancer Society is raising legitimate questions about the early release of findings by the World Health Organization’s International Agency for Research on Cancer (IARC) that cell phone use may increase the risk of brain cancer (hat tip to Gary Schwitzer’s HealthNewsReview).  The actual study — drawn from an analysis of “hundreds of scientific articles ” — won’t be published in Lancet Oncology “for a few days,” according to IARC. Says Dr. Len:

Unfortunately, drawing broad and sweeping conclusions based on a press release and a news conference leaves many of us wondering just what the evidence shows that led to the conclusion announced today that “radiofrequency electromagnetic fields” may be possibly cause cancer in people.

The evidence, when it appears, will be murky. A few years ago, I spent several months reviewing some of the evidence in this troubling field, largely from a conflict-of-interest perspective. The global telecommunications industry funds much of the science. Even when government agencies fund research, the results are difficult to interpret. The studies invariably involve looking for a very small number of negative health outcomes (brain cancers) in very large populations. Two researchers, looking at the very same set of epidemiological facts, will often come to different conclusions. And, as often as not, those conclusions correlate with whether the the researchers are independent or whether they are on industry’s payroll.Continue reading…