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Health Care: An Alternate Economic Universe

Aug 29, 2012• 37

By Jeff Goldsmith

In July, 2012, the US economy produced roughly the same volume of goods and services as it did five years earlier with five million fewer workers. Yet, during the first four years of the recession (May 2007 to May 2011), the US health system, despite slowing or declining utilization, added 1.149 million workers. Key sectors, specifically hospitals and physician offices, grew their workforces despite declining admissions and office visit volume. (Employment data in this post comes from the Bureau of Labor Statistics’ (BLS) National 4-digit NAICS Industry-Specific Estimates from May 2007 and May 2011.)

Compared to the rest of the economy, health care seems to exist in an alternate economic universe. This would be good news, rather than a problem, if we were not borrowing roughly half of every dollar of general revenue the federal government is spending on health care and if employers were not robbing their workers of wage increases to fund their health benefits.

Hospitals and physician offices saw declines in their core activity in the past few years. Hospital admissions have been flat the past five years, and have shrunk the past two. Even hospital outpatient volume growth has subsided into the low single digits, only partially offsetting the lost admissions. Yet hospital employment rose by over 220,000 workers, or 4.4 percent from mid-2007 to mid-2011.
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Hospitals…Thinking About Getting Into Health Insurance? 6 Reasons To Lie Down Until the Urge Goes Away.

Aug 28, 2012• 10

By Vince Kuraitis

Gregg Masters reports on a recent Kaiser Health News article: Hospitals Look to Become Insurers, As Well as Providers of Care”.

This is the dumbest idea I’ve heard since “I’m going to invest all my money in Facebook’s IPO and get rich!”

Here are six reasons why:

1) You’re too late. Health insurance was an attractive and profitable business in the 00s, but after passage of the Accountable Care Act it’s been commoditized.

First, the health plan business model of the past decade is dead. That model was — “Avoid and shed risk” — or more simply, avoid insuring people who are already sick (preexisting conditions) and get rid of people who become sick (rescissions). Under the ACA, health insurers must take all comers and they can rescind policies only for fraud or intentional misrepresentation.

Second, the ACA institutes medical loss ratio restrictions on health insurers. Depending the the type of plan, insurers now must spend at least 80-85% of premium dollars on paying medical claims; if they spend less, they must return these “excess profits” as rebates to customers. As a result, health insurance has become a highly regulated quasi public utility.

This is why you see health plan CEOs like Mark Bertolini of Aetna declaring “Health insurers face extinction”. The old health insurance model is on a burning platform, and health plans are reformulating themselves as companies involved in health IT, analytics, data mining, etc.

2) You have bigger fish to fry. Focus on developing accountable care capabilities. The AHA estimated that hospitals will need to spend $11-25 million to develop an ACO. Get going.
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Health Care Innovations Hiding in Plain Sight

Aug 28, 2012• 1

By Maureen Bisognano and Charles Kenney

While the nation has been focused on the recent Supreme Court ruling on the Affordable Care Act, innovations in hospitals and physician practices far from Capitol Hill have been triggering an historic transformation of our health care system. Propelled by a mix of urgency and vision, innovators at hospitals, physician groups and companies are remaking American health care by demonstrating that more effective and affordable care is achievable quite apart from statutory changes in Washington.

These organizations are working to achieve the Triple Aim: improve the health of the population; enhance the patient experience of care (including quality, access, and reliability); and reduce, or at least control, the per capita cost of care. This approach, developed by the Institute for Healthcare Improvement, is a sharp break with the traditional focus on single encounters with patients within the strict walls of health care delivery, typically addressing only the most immediate problems.
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Electronic Health Records In the Classroom?

Aug 26, 2012• 1

By Ishani Ganguli, MD

Outside a patient’s room in the cardiac intensive care unit (CICU), a senior doctor, a nurse, and several residents in various stages of wakefulness cluster for morning rounds. Each resident mans a computer-on-wheels (once called a C.O.W., the acronym was formally abandoned at MGH, legend has it, after a patient thought it was directed at her and took offense).

One of the residents reads off laboratory test results from the patient’s electronic record. Another resident uses her mouse to toggle through the patient’s medications and share them with the group. The nurse reads aloud blood pressures and heart rates from a handwritten hourly log. As scribe for the day, I type these numbers to update a progress note that we’ll later print and place in the patient’s paper chart. Someday, these records will be completely digital, finally matching the wonderland of medical technology that is the CICU.

As the Electronic Health Record (EHR) slowly but inexorably assumes its rightful place in modern health care, obviating the ridiculous cultural norm of physicians with illegible handwriting, reducing medical errors, and making care (usually) more efficient, educators are asking the question: are we teaching this in medical school?

Not consistently, it turns out.

Anywhere from 34 to 57% of doctors’ offices and 19% of hospitals now use an EHR. While they are more often found in academic hospitals and clinics (where training occurs) than in other American health care settings, a recent survey finds that this tool doesn’t always trickle down to medical students. Only 64% of medical schools let their students use the EHR, and only about a third of those let students enter patient orders or write notes within the record, according to the survey of 338 educators nationwide that appeared in last month’s Teaching and Learning in Medicine.
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A Big Fat Stupid Law??

Aug 16, 2012• 4

By Marion Nestle

Remember menu labeling?

The Affordable Care Act instituted national menu labeling—the posting of calories on the menu boards of fast food chains.

The FDA still has not issued final rules, leaving vast amounts of time for lobbying and pushback.

Now John Carter (Rep-TX) has introduced HR 6174, the anything but “Common Sense Nutrition Disclosure Act of 2012.”

This bill was introduced under lobbying pressure from the pizza and supermarket industries.

Its purpose is to exempt supermarkets and convenience stores from having to post calorie information on prepared foods. This would allow pizza chains to list calories per serving, thereby defeating the entire purpose of the menu labeling law.

The pizza industry learned that it could get Congress to do what it wanted. Even a dab of tomato paste on pizza now counts as a vegetable serving in school meals.

If you thing calorie labeling on pizza might be a good idea, now is the time to write your congressional representatives. Here’s how.

Marion Nestle is the author of What To Eat and is the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University. Nestle blogs regularly at Food Politics.

Reviving the Pipeline: A Call to Action For All

Aug 11, 2012• 27

By Andrew Morris-Singer, MD

Annie Lowrey’s July 28 article “Doctor shortage likely to worsen with health law” in the New York Times noted the growing shortage of primary care doctors particularly in economically disadvantaged communities, both in rural and inner-city America. This problem will likely get worse before it gets better as more Americans gain coverage and seek a regular source of care. As the article suggests, training more doctors and incentivizing them to pursue careers in primary care will be a key part of the solution. And it will require a multipronged campaign, using both some of the traditional strategies for workforce renewal and a few unique tactics not typically deployed in efforts to fix health care.

The primary care workforce pipeline had dried up before the Affordable Care Act was passed. Currently, one out of every five Americans lacks access to primary care. As a result, up to 75% of the care delivered in emergency departments these days is primary care . This overcrowds and overburdens EDs, raises costs, and limits EDs’ ability to do what they were designed to do: provide acute, emergency care that makes the difference between life and death. So the primary care shortage threatens our access not only to primary care but also to emergency care.

How did we get here? Many are quick to point to primary care doctors’ low salaries compared to those of their sub-specialist colleagues. Indeed, choosing a career in primary care rather than a sub-specialty means walking away from 3.5 million dollars of additional lifetime earnings.That’s tough to do when you’re looking at $150-200,000 of debt, which is the average debt of an American medical student at graduation.But the crisis in our primary care pipeline goes far beyond the money.

Costs Continue to Rise. What Can Employers Do? The Answer May Be Direct Primary Care.

Aug 10, 2012• 27

By Darrell Moon

The U.S. Supreme Court ruled on Jun 28^th by a 5-4 vote to let the individual mandate portion of the Affordable Care Act (Obamacare) stand. Immediately following, a CEO of one of the nation’s largest insurance companies was asked if people can expect their premiums to go up as this law is implemented. The answer was yes. So what can employers do to protect themselves from the inevitable?

One strategy for driving market incentives back into the healthcare system and driving down costs is called consumer-driven health insurance, and it is growing in popularity. Historically, the consumer or patient has had very little monetary skin in the game when it comes to the cost of healthcare. We go to the doctor and pay our copay, and never have to worry about what it really costs for health care.

Many employers are now trying to incentivize their employees to be as prudent a purchaser of health care as they are of any other product or service. And they’re doing this by offering high-deductible health insurance policies combined with health savings accounts, or HSAs.

For the 50 percent of patients who collectively spend only 3.5 percent of all healthcare dollars, it’s a fantastic alternative. Instead of paying the high premiums for a lower-deductible plan to the insurance company for care you don’t use — that’s money that goes out the window unnecessarily — you can store the money away, accumulating it every year until a health event occurs when you really need it.

To be sure, a big drawback to these high-deductible insurance plans is the negative impact they can have on the five percent of patients who spend 50 percent of all healthcare dollars. Many worry that high-deductible plans will increase the total cost of healthcare because those with chronic healthcare problems won’t get the help they need until their condition gets so bad that they are forced to seek help — when obviously the cost will be much greater. They have a very valid point.

Breaking the Curve of Health Care Inflation

Aug 9, 2012• 2

By Maggie Mahar

The evidence is building: As we move toward making the Affordable Care Act a reality, Medicare spending is slowing, and even in the private sector, for the first time in more than a decade, insurers are focusing on reining in health care costs.

The passage of reform legislation two years ago prompted a change in how both health care providers and payers think about care. The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much they will pay out to an desperately ill patient over the course of a year –or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to ”manage” the cost of care–but they won’t be able to do it by denying needed care.

As for providers, they, too, will be under pressure. A growing number will no longer be paid “fee for service” that rewards them for “volume”–i.e. “doing more.” Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses. Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater “value” for health care dollars– better outcomes at a lower cost.

This summer the Supreme Court’s decision sealed the deal. The ACA is constitutional. Health care reform is here to stay.

An Important Day for China in Healthcare. What’s next?

Aug 7, 2012• 4

By Per Stenvall

On June 26, 2012, China’s first wholly foreign-owned private hospital opened its doors to patients in Shanghai. We are hopeful that this is the start of a broader trend of increasing private participation as China upgrades its healthcare services sector.

Anybody who has spent any significant time in a public Chinese hospital knows that there are few greater unmet needs in China than those existing in the healthcare services sector. China’s public hospitals are overcrowded and there are few alternatives, even for those willing to pay a premium for higher-quality care, shorter waiting times, and more personalized service.

Private investors – foreign and Chinese—have been eyeing China’s private healthcare services industry since the Chinese government began experimenting with limited private participation in 1989.

Progress since then has been slow. As of 2012, a dozen years after the start of the healthcare reforms, around 95% of all hospital beds in China are still in public hospitals, and there are only a dozen or so Sino-Foreign hospital joint ventures (mainly providing outpatient services to holders of private insurances and a very small segment of affluent Chinese nationals in first-tier cities like Shanghai, Beijing and Guangzhou).

Will the next ten years see more significant developments? This depends to a large extent on the Chinese government’s willingness to allow foreign participation in the sector.

Numbers Don’t Lie — The EHR Market Must Consolidate

Aug 6, 2012• 4

By Conor Green

According to CMS, through May of this year, 2,400 hospitals and 110,000 eligible professionals have received $5.7 billion in incentive payments for ensuring meaningful use of electronic health records, representing about half of all eligible hospitals and about 20% of all eligible providers.

Despite this widespread adoption EHRs, reliable market share data by vendor is still very hard to come by. So, when CMS recently updated its attestation data for midyear 2012, we took notice. Attestation, remember, is the process by which practitioners legally verify that they have used an EHR in way that merits one of those incentive payments. The data set includes more than 77,000 different attestations from 2011 through May of 2012 (note that it is not immediately clear why the data set has different totals than the CMS press release).

The sheer number of options for hospitals and providers stood out to us immediately. There are 405 separate EHR vendors that hospitals or providers have used to attest to meaningful use, with 336 of these providing ambulatory EHR products. It’s worth pausing here to note that by our count of the data found on the CMS Certified Health IT Product List, there are more than 550 separate ambulatory vendors with complete EHRs approved by CMS, meaning that despite the huge number of options, there were still well over 200 approved ambulatory vendors that have not had a single user qualify for an incentive payment yet!

Despite this enormous number of options, users attesting were fairly concentrated in the top vendors. Of these 336, the top 15 vendors represented 75% of all providers attesting. On the inpatient side, this concentration was even more pronounced, with the top 6 representing 75% of the total hospital attestations.

When we organize and dig into the data, a few other points stand out.