By KIP SULLIVAN, JD

This is the last installment in a three-part series that asks why we need both an insurance industry and an ACO industry. We are now stuck with the worst of all possible worlds – an inefficient insurance industry layered on top of an inefficient ACO industry.

I noted in Part I of this series that ACOs’ inability to cut costs explains why 90 percent of Medicare ACOs refuse to accept anything resembling insurance risk. In Part II I discussed ACO proponents’ expectation that many ACOs would accept full insurance risk, and I described the Medicare Payment Advisory Commission’s (MedPAC’s) reaction to ACOs’ inability to cut costs and their unwillingness to accept insurance risk. We saw that MedPAC attempted to design a plan called “premium support” that would generate competition between Medicare ACOs, Medicare Advantage plans, and the traditional Medicare fee-for-service program, and, after four years of trying (and even after dropping the FFS program from the project), gave up.

In this last installment I review a nearly identical attempt by Minnesota’s Medicaid program to set Medicaid ACOs and HMOs on a level playing field. I will close with a prediction of where the ACO industry is headed.

Continue reading…

By ROBERT MCNUTT MD & NORTIN HADLER MD

Take the example of a middle-aged woman undergoing chemotherapy for breast cancer. Month after month she receives a bill for $16,000. This purchases a monthly infusion of one chemotherapeutic agent.  Much of the bill is paid by her insurance, but her personal checking account will cough up about $1000 per month until she pays down her deductible.

The invoice, however, is an illusion. The amount is not the actual number of dollars required to pay for services and materials rendered. Most of the money is diverted in accordance with contractual agreements between the hospital and various agents, brokers, and insurers. The total transfer of those dollars is known but not readily accessible to any who was not privy to the negotiations. The $1000 co-pay is a tithe with totally obscure added value to be paid no matter how painfully.

Few of us know the direct cost of any medical intervention. The term “cost” is the money needed to produce a service. For example, the cost of a single chest-x-ray is amazingly cheap, just a few dollars. The materials are inexpensive, the x-ray machine can spit out exam after exam, and one person can service a multitude of patients, making the unit cost a bargain. The cost of many a test is so low that it could be given away without wobbling a hospital’s budget.

Continue reading…

By ROSS KOPPEL PhD, FACMI & STEPHEN SOUMERAI ScD

Your address to HIMSS acknowledges many of the problems with Healthcare IT, highlighting lack of interoperability, lack of data exchange, and lack of cybersecurity, and suggesting some regulations that could be eliminated. This is a welcome realization of some of EHR’s more obvious limitations and problems.  However, most of your recommendations for improvement of health IT are insufficient, unproven, or have been repeatedly shown to fail.

We applaud your acknowledgement of: 1. The frustration (and often rage) of many clinicians when using the current EHRs’ clunky and inefficient user interfaces; 2. Patients’ frustration and alienation when doctors spend much time entering data into the EHRs rather than listening to them; 3. The need for better cybersecurity; 4. Benefits of increased patient access to their data; and 5.Healthcare systems’ refusal to share patient data with others clinicians (data hoarding).

We are also delighted for your strong support for the Sync for Science program.

However, your solutions to these problems are faulty or have already failed—and thus we are obliged to explain why and how they fail:

• Belief in the magic of value-based care as a cure for excessive spending
• Claim that “open APIs” (defined in next sentence) will solve the problems of lack of interoperability. Here, APIs refer to software programs that try to translate different forms and formats of information into a single commonly understood item.
• Belief that a patient’s personal data store or personal EHR, called “MyHealthEData,” will help solve the problems of patient care. 
• Confusing patients with customers. We train doctors to make diagnoses, order and interpret tests, and help patients make profoundly complex decisions. Healthcare decisions are not like buying a toaster. 
• Attributing so many of the problems of EHRs to the regulations created in 2009, the “Meaningful Use” rules.   In fact, meta-analyses of EHRs—both before the Meaningful Use rules, and after–fail to find they reduce costs, mortality, or morbidity.

Continue reading…

By ANDREW MCFADYEN & ALEXANDRA HALL

As rare disease patient advocates, we work with terminally ill patients on a daily basis. A new version of the ‘Right to Try’ bill, which purports to help terminally ill patients access experimental medication, is set to be voted on in the House on Tuesday. While we understand the appeal of Right to Try, we also know it will do more harm than good. It is our duty to patients in need to urge Congress to reject Right to Try.

Thirty-eight states, representing 83% of the population in the USA, have signed Right to Try bills into law. These bills align with the model legislation crafted by libertarian think tank, The Goldwater Institute. Promoted as providing “immediate access to the medical treatments” for terminally ill patients outside of clinical trials, the cruel reality with Right to Try legislation is that it will not grant patients the immediate access to treatments they desperately need – and it never has. 

Looking past the myths that Right to Try proponents state ad nauseam, and looking past this legislation’s potential to create an unequal access to medication, the simple fact is: although over 270 million Americans are currently living within the boundaries governed with Right to Try laws – providing them with, as Goldwater claims, “immediate access to medical treatments they need” – there continues to be no concrete evidence of a patient ever receiving a life-saving medication under Right to Try legislations that they otherwise wouldn’t have received under the current Expanded Access Program. 

Tomorrow’s vote on a newly crafted Right to Try bill from House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) is more limited than Senator Ron Johnson’s earlier iterations, yet remains little more than a feel-good bill that will do nothing to change the landscape with respect to access to life-saving medications for patients in dire need. In essence, the landscape for access to medications for dying patients does not change tomorrow if a Federal Right to Try law is passed. Very clearly, those patients in dire need of help today will wake up tomorrow needing access to the same life-saving treatments, and feel the same despair when they are not given the access they need through Right to Try. 

Continue reading…

By ADRIAN GROPPER, MD

There is one way the Trump HHS and VA can thread the needle between provider economic self-interest and burdensome regulation and it’s based on Federal health IT policy.

This past week has seen a number of high-profile announcements from the Trump HHS including Secretary Azar and CMS Administrator Verma  about patient empowerment and enhanced transparency as a strategy to breathe life into healthcare reform. Meanwhile, VA Secretary Shulkin is under immense pressure to make their privatized Cerner EHR interoperable.

It’s pretty clear that the Trump HHS wants to do something about the frustrating and ineffective health IT policies that led to the 21st Century Cures Act information blocking provisions and that they’re hoping to leverage the $1 Trillion of federal spending in healthcare as an alternative to heavy-handed regulation.  This is all good but what can they actually do?

Most of Secretary Azar’s talk is about disruption:

“In fact, it will require some degree of federal intervention — perhaps even an uncomfortable degree. That may sound surprising coming from an administration that deeply believes in the power of markets and competition. But the status quo is far from a competitive free market in the economic sense of the term, and healthcare is such a complex system, that facilitating a competitive, value-based marketplace is going to be disruptive to existing actors.”

Continue reading…

By KIP SULLIVAN

In my last post , I made fun of Ezekiel Emanuel and Joseph Liebman for predicting that ACOs would replace insurance companies by 2020. I noted that the 800 to 1,000 ACOs reportedly in existence today are nowhere near ready to accept full insurance risk because they have shown no ability to cut costs. [1]

Although Emanuel and Liebman were foolish to predict most ACOs would quickly evolve into successful insurance companies, they shared with all other ACO advocates the understanding that that’s what ACOs are supposed to do – over time they’re supposed to bear more and more financial risk. It’s just never been clear how much financial risk ACOs were supposed to take on. The Affordable Care Act, for example, which authorized CMS to establish an ACO program within Medicare, did not address that question.

A reasonable interpretation of statements and papers by ACO proponents is that they expected a substantial portion of ACOs to morph into insurance companies. According to an early paper  by several prominent ACO proponents, including Elliott Fisher, ACOs were expected to accept more risk in three stages: In stage 1 they would accept only upside risk (the opportunity to share in savings if they stayed under a target spending level); in stage 2 they would accept both up- and downside risk; and in stage 3 they would accept full insurance risk (they would no longer be paid fee-for-service, but would instead be paid “capitation” payments, aka premium payments), and would, therefore, have to set aside reserves. Presumably stage 3 ACOs would also have to be licensed by the insurance regulators in the states where they operate.Continue reading…