Author Archives

Matthew Holt

House Health Care Reform: Ignoring the Elephant?

Jul 15, 2009• 26

By ROGER COLLIER

After some frantic last minute political
gyrations and a lot of pressure from the President, House Democrats
have announced details of their draft health care reform bill.

Much as expected, the 852-page bill
emerging from three House committees would impose a mandate on larger
employers to provide insurance, impose a second mandate on individuals
to obtain coverage, prohibit medical underwriting by insurers, establish
a government-administered public plan to compete with insurers’ offerings
through insurance exchanges, offer subsidies to lower-income individuals,
and expand Medicaid. The target ten-year trillion-dollar (or more) price
tag would be funded through a combination of taxes on high income individuals
and reductions in some Medicare and Medicaid payments.

So, is this the answer to the nation’s
health care crisis of sky-rocketing costs and growing millions of uninsured?

Probably not.

Eliminating Medication Waste in Long-Term Care Can Help the White House Pay for its Health Plan

Jul 14, 2009• 26

By CARLA CORKERN

The news of an $80 billion White House deal with drug companies to lower Medicare drug costs targets $30 billion in savings for consumers covered by Medicare Part D, but the sources of the remaining $50 billion in savings that is supposed to accrue to the government “have not been identified at the moment,” according to an Administration spokesperson.

With the Administration scrambling to find ways to pay for a much-wanted healthcare package estimated to top a trillion dollars in just 10 years, every few billion in potential savings counts. That’s why the government should take a close look at the extraordinary amount of medication waste that is literally flushed down the toilet every year in long-term care (LTC) facilities.

The United States spends an estimated $1.25 billion annually on direct cost of wasted medications in LTC settings – and this is before the Baby Boomer generation has entered the scene. Long-term care facilities, pharmacies, wholesalers and manufacturers are expected to incur an additional quarter billion in costs annually due to the labor, distribution and operations costs for distributing and disposing of unused medications. Throughout this process there are 800,000 medication errors made every year in these facilities.

In February of 2009, The American Society of Consultant Pharmacists (ASCP) surveyed its membership – pharmacists that work in the LTC industry – on the topic of unused medications. The top three concerns of respondents were preventing diversion, developing cost-effective disposal procedures, and reducing the overall amount of pharmaceutical waste.

Where does all this waste and error originate? A majority of the approximately 17,000 LTC facilities in the U.S. receive medications in punch cards, cassettes, and/or unit-dose packaging that are delivered on a daily basis by a local or regional offsite LTC pharmacy. These medications are predominately covered through Medicare Part D.

The most prevalent type of packaging is disposable 30-day punch cards, often referred to as “bingo-cards,” which are sent when the prescription is ordered and every time it is refilled. However, when a prescription is discontinued or the patient is transferred, discharged, or passes away before the supply is exhausted, the unused medications are either destroyed onsite or sent back to the pharmacy.

However, the ability to return and credit unused medications was not addressed when Medicare Part D was created. And, because no electronic claim crediting process is available, pharmacies must bill upfront by dispensing the entire supply of medications, up to 30 days, with any unused medications becoming waste. The pharmacy gets paid either way, because there is no incentive to offer credit for unused medication.

A pharmacy that wants to offer credit for unused medication must use what is known as post-consumption billing – but this requires a hassle that creates cash flow delays and reporting burdens that make it all but impossible to manage.

Baby Boomer demographics indicate long-term care facilities will soon be the new epicenter of spiraling medication costs, and the waste occurring today is astounding. Medication distribution systems in LTC have not fundamentally changed in decades. In addition, the current systems are riddled with errors that cost untold billions, and our environment is tainted with unused medications that are flushed or incinerated ever year. The only group that really benefits from this mess is the pharmaceutical companies.

The U.S. taxpayer can no longer afford the status quo. While policymakers have their sights set on major reform, they should pursue the needless waste that is growing in this segment of healthcare.

To do that, policymakers and regulators should look for ways to increase automation of medication dispensing in long-term care facilities. This process is well established in acute care settings, where waste has been virtually eliminated and patient safety has improved dramatically.

Now is the time to incentivize long-term care facilities and the pharmacies that serve them to replace the status quo with systems that will free up taxpayer dollars for health reform, and deliver safer care to our rapidly growing senior population.

Schwarzenegger replaces most of state nursing board

Jul 14, 2009• 5

By TRACY WEBER AND CHARLES ORNSTEIN

Gov. Arnold Schwarzenegger replaced most members of the California
Board of Registered Nursing on Monday, citing the unacceptable time it takes to discipline nurses accused of egregious
misconduct.

He fired three of six sitting board members – including President
Susanne Phillips – in two-paragraph letters curtly thanking them for
their service. Another member resigned Sunday. Late Monday, the governor's
administration released a list of replacements.

The shake-up came a day after the Los Angeles Times and ProPublica published an investigation finding that it takes the board, which oversees 350,000 licensees, an average
of three years and five months to investigate and close complaints against
nurses.

During that time, nurses accused of wrongdoing are free to
practice – often with spotless records – and move from hospital to
hospital. Potential employers are unaware of the risks, and patients have been
harmed as a result.

Eliza gets a nice write up in BusinessWeek

Jul 13, 2009• 2

BY MATTHEW HOLT

Indeed, it’s so nice that methinks Lucas & Alex were quite seductive! Speaking as a friend and one who’s been indoctrinated into the cult of Alexandra Drane, its interesting to see the mainstream press picking up the “phone as a tool” theme. The BusinessWeek article shows that a) these calls work to change behavior if targeted correctly and done well and b) that Eliza is humming along very nicely financially. What it doesn’t hint at, but is well worth considering, is the vast potential for these calls to collect data from patients as well, as to relay information to them. As you may guess you’ll see more from Eliza at Health 2.0 this fall, and you can be sure that we’ll be hounding them on that latter point.

Costs Are Not The Same As Rates

Jul 13, 2009• 13

By PAUL LEVY

Many “old” media outlets do not identify the authors of their editorials. Thus, when an opinion is offered, you have no way of knowing who wrote it or what their qualifications are. Your only recourse when there is something unsupported or absurd used to be to send a letter to the editor, where you have about a 0.5% chance of being chosen for publication. And they would edit what you sent in. Then, blogs were invented.

This thought was prompted last week when I read a New York Times editorial entitled, “Financing Health Care Reform.” Here’s the quote in question:

Meanwhile, it will be important to get some guaranteed fast savings from the health care industries by cutting and reallocating hundreds of billions of dollars from projected spending on Medicare and Medicaid, as the Obama administration has proposed and Congress is considering. Just to be sure, Congress ought to establish a fail-safe mechanism that could impose additional cuts after a few years if savings are less than projected.

Since I don’t know the author(s) or whether he/she/they actually know anything about Medicare and Medicaid, I am uncertain how to respond to this suggestion. Except to say: “Are you out of your mind?” Medicare rates just barely cover costs today, and Medicaid rates have not covered their costs in years.

This is all part of a general confusion about cost savings versus appropriation savings, a point I made back in March:

Op-Ed: Forward thinking health plans? Look for the guys with the white hats

Jul 13, 2009• 10

By RICHARD NOFFSINGER

The public noise about health care reform has painted the parties involved in broad brush strokes that tell consumers which in the fray are the good guys and bad guys. News reports have for so long vilified health insurers that they’re overlooking the forward thinkers who are actively seeking the white hat role and using their heft for real and positive change.

With the near-term incentives to spur adoption of EMRs and subsequent implementation of clinical decision support to make those EMRs “meaningful”, health plans have a perfect opportunity to improve their value. I already see that happening with our health plan customers who have used additional means to improve their populations’ health, such as personal health records, disease management, and other strategic initiatives.Continue reading…

The Case for Comparative Effectiveness Research

Jul 13, 2009• 7

By RAHUL PARIKH, MD

When I was a kid growing up in Los Angeles, there was this local TV show my dad used to enjoy watching called Fight Back with David Horowitz. Basically, Horowitz, a TV reporter and consumer advocate, used to put the claims a manufacturer made about their products to the test—whether it was if Samsonite luggage could withstand abuse from a Gorilla or Bounty really was the “quicker picker upper,” it was on its show and ended up either endorsed or debunked by it. It was Consumer Reports come to life, if you will—pitting products against one another to see which one was worth putting down some hard earned dollars for.

Now, over 30 years later, we in medicine are just getting around to doing the exact same thing that Horowitz was with retail way back in the 1970s—comparing the claims made by drug and device makers about their products.

Nursing Homes Get Old for Many With Disabilities

Jul 13, 2009• 12

By JENNIFER LaFLEUR

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ST. LOUIS — Melody Ping never thought she would be trying to moveout of a nursing home. She lived in a St. Louis apartment for 19 years and worked as an
accountant until two years ago, when she lost her job. Ping, who has
multiple sclerosis, couldn't find new work. When her unemployment ran
out, she ended up on Medicaid in a nursing home.

Ping, 51, is among tens of thousands of people nationwide who want to
live on their own, but instead remain in nursing homes, rehab centers
or state hospitals, often at a higher cost to taxpayers because of a
historic bias toward institutional care.

Ten years ago today, the U.S. Supreme Court said that
bias amounted to discrimination. Now, as disability advocates
celebrate the anniversary of that landmark ruling, they worry the Obama
administration is backing away from a pledge to give more people with
disabilities the option to live at home.

As a senator, Barack Obama co-sponsored the
Community Choice Act, pending legislation that would give
Medicaid recipients equal access to services in the community and not
force them into institutions. But the administration recently said it would
not address the issue as part of its proposed health care
overhaul.

Musings on Payment Reform

Jul 12, 2009• 38

By CHARLIE BAKER

Charlie Baker is the president and CEO of Harvard Pilgrim, a nonprofit health plan that covers more than 1 million New Englanders. Charlie is a regular contributor to THCB, where he has authored posts on national health reform (See: “Is Massachussetts a Model for National Reform?” and related issues facing the healthcare sector. (For example: “Shifting Costs From Public To Private Payers“). His posts also appear at his own blog, Let’s Talk Health Care.

This week Charlie confirmed a longstanding rumor, announcing that he will be giving up his position at Harvard Pilgrim at the end of July to run as a GOP candidate for governor of Massachusetts. You’ll find more about his campaign on his web site, CharlieForMA.com.

The Commonwealth of Massachusetts – along with a number of other states (including New Hampshire and Maine) and the federal government – is kicking around a number of ideas concerning payment reform. The argument goes something like this – since the current health care system, led by the gigantic Medicare program, pays primarily on a fee for service basis. This “do something” payment model encourages clinicians and hospitals to do “more” for patients than they might do otherwise, if they weren’t encouraged to “do something” to get paid. Add to that the fact that fee for service – again led by Medicare – pays more for new technology than it does for existing technology, and less for primary care, and you have the primary ingredients in the recipe that’s driven our system to be technologically driven, volume driven, fragmented and very expensive.

In Massachusetts, the group that’s working on payment reform seems to think the solution to this problem is to move everyone away from fee for service and into something that’s being called, “global budgets.” Put simply, global budgets are a new and improved form of capitation. Let me be clear on this one – I’m actually a big fan of both. I believed in capitation when I worked in state government, and I worked for a medical practice (Harvard Vanguard Medical Associates) before I came to Harvard Pilgrim that was built on global budgets.

And before I go any further, I would offer up the cover story in this month’s issue of Health Leaders Magazine – titled “Bundling By Decree” as a solid a representation of the pros and cons of this debate as it winds its way through the national discussion around health care and payment reform. This article is primarily about bundling payments around episodes of care, but the issues it raises – in both directions – apply in either context.

With that said, I wonder about whether or not global budgets, at least in the short term, are the answer to our health care cost and quality problems. For some provider organizations, global budgets work – but they work in large part because those particular clinicians believe in them, and want to practice in environments that are based on them (like Harvard Vanguard/Atrius HealthCare). But that represents a fairly small slice of the practicing clinician community – I’m guessing 10-15 percent. Maybe 20. It’s also not clear to me that this issue, above all else, drives our cost/quality problem, since many other countries that spend a lot less than we do on health care and have solid clinical results use fee for service payment systems too.

As far as I can tell, those other countries that spend less than us on health care do two things differently than we do. First, they spend less on each service than we do – sometimes a lot less. They also have robust primary care systems. This, in particular, is just the opposite of our approach. Our payment policies – and as a result, our medical education system – have been disinvesting in primary care for years.

In the short term, I’m not sure global budgets solve this disinvestment problem. First of all, it’s financial and operational whiplash for a system that’s been running on fee for service for years. That, all by itself, will take some getting used to. It’s also not clear that Medicare or Medicaid – which make up 50-60 of the payments to providers to begin with – would also adopt global budgets. If they don’t, having private sector payors using global budgets and the public sector payors using fee for service is just about the worst outcome I can think of for providers and their patients. The mixed messages these two payment models would send about what matters and what’s important would be virtually undecipherable.

This makes me wonder if our short term approach shouldn’t focus instead on changing the message all payors send under the current fee for service system to providers by improving the way we pay for primary care. No one thinks we can possibly deliver integrated, coordinated care if we don’t send some signals to the medical and medical education community that primary care matters. If a young medical student can make $250 an hour in primary care – or $1,000 an hour in dermatology – or $2-3,000 an hour in cardiology or orthopedics – how hard do you think it is to get that person into primary care? The answer is it’s wicked hard – and the declining number of students going into primary care coming out medical school for the past decade is proof positive of that. We used to be 50/50 primary care / specialty care. Now we’re 70/30, and some of the anecdotal information suggests that kids coming out of U.S. medical schools are now running 15/85 primary care/specialty care.

Think about it. No one disputes the fact that primary care has a key role to play in care management and care coordination – especially as the Baby Boomers get older. The state’s Payment Reform Commission says global budgets will take three to five years to implement – and expects that every doctor will be using an EMR as one of its requirments for success. Will this approach really grab today’s medical students and practicing clinicians and say – ”HEY! It’s time to invest in primary care!” In the short term, I think we’re more likely to get more capacity, faster, into primary care by boosting, on a relative basis, the fees paid to primary care providers by the private plans, Medicare and Medicaid.

Over time, maybe everybody gets to global budgets, but in the meantime, I think we need to do more to support primary care.

Behind the Curtain: Wendell Potter on the Industry’s Management of Care and Reform

Jul 10, 2009• 11

By BRIAN KLEPPER

Stop what you're doing and take out a half-hour to watch this week's superb Bill Moyers' 3-part show, especially the extended interview with Wendell Potter, former CIGNA VP Corporate Communications, for a frank, insider's discussion of how major health plans have worked over the last decade.

Also be sure to watch Moyer's very brief final commentary, describing a dinner that was planned by the Washington Post to connect lobbyists with high-ranking officials working on the health care reform process. His conclusion: we won't get anywhere with health care or any other national problem until "the money-lenders are tossed out of the temple and we tear down the sign they've placed on government, the one that reads 'For Sale.'"