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Category: Health Policy

Matthew’s health care tidbits: #What is insurance again?

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, I was reminded on Twitter that many Americans really don’t understand health insurance. A spine surgeon no less in this thread (no jokes about arrogance please) was telling me that he was paying ~$8,000 a year ($4,000 in insurance and $4,000 in deductible) before he got to “use” his insurance–which, as his medical costs were low, he never did. Others were complaining that the cost of employee premiums were over $20K. They all said they should keep the money and (presumably) pay cash when they do use the system. It’s true that most people don’t use their insurance. That’s the whole point. When you buy house insurance, you don’t expect your house to burn down. You are paying into a pool for the people whose house does burn down.

In the US we are on average spending $12k per person on health care each year. But spending on most people is way under that and for a few it’s way, way over. If you take the rough rule that 50% of the spending is on 10% of the people then 35 million people account for $2 trillion in spending–that’s ballpark $60,000 each. They are the ones with cancer, heart disease, complex trauma, etc, etc. The rest of us are “paying” our $4,000, $8,000 whatever, into the pool to cover that $60,000.

There are only two ways to lower that cost for the healthy who aren’t “using” their insurance. One is to exclude unhealthy people from that insurance pool, which makes the costs for everyone else much less. We did that for years with medical underwriting and it was nuts because it screws over the unhealthy. Fixing the pre-existing condition exclusions was the only bit of Obamacare everyone agrees on–even Trump. But now we are ten plus years into this new reality, some people have forgotten how bad it was before.

The other way is to reduce the costs in the system and lower that $4 trillion overall. How to do that is a much longer question. But it isn’t much connected to the concept of insurance.

The Social Science of Covid

By MIKE MAGEE

As we enter the third year of the Covid pandemic, with perhaps a partial end in sight, the weight of the debate shows signs of shifting away from genetically engineered therapies, and toward a social science search for historic context.

Renowned historian, Charles E. Rosenberg, envisioned a similar transition for the AIDS epidemic in 1989. He described its likely future course then as a “social phenomenon” with these words, “Epidemics start at a moment in time, proceed on a stage limited in space and duration, follow a plot line of increasing and revelatory tension, move to a crisis of individual and collective character, then drift toward closure.”

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My 22 Oldest Jokes and Why They Still Matter in 2022

By IAN MORRISON

I have been studying American healthcare for more than 40 years and I have assembled a large number of one-liners over the years. As we enter 2022, I thought I’d share my 22 oldest jokes and why they still matter. 

Coming to America 

  1. I grew up in Glasgow, Scotland.  In Glasgow, healthcare is a right, carrying a machine gun is a privilege. America got it the wrong way round

Gun violence continues to ravage the United States. We have more guns than people. Kids get gunned down in school playgrounds and classrooms routinely. It happened once in Dunblane, Scotland in 1996 when a local shopkeeper walked into Dunblane Primary School and opened fire, killing 16 5- and 6-year-olds and their 45-year-old teacher.  It so galvanized public opinion, according to Smithsonian Magazine:  “By the end of 1997, Parliament had banned private ownership of most handguns, including a semi-automatic weapons ban and required mandatory registration for shotgun owners”. 

Last time I looked, gun violence was the second leading cause of death in children in the US.  In America when we have mass shootings all we get are thoughts and prayers. 

And when it comes to healthcare as a right, even if we Build Back Better, it won’t be a right for millions of American residents, especially those who are undocumented. 

  1. I am a Scottish Canadian Californian which gives me a unique perspective on healthcare (and all things to do with healthcare, including death and dying) because the Scots see death as imminent, Canadians see death as inevitable, and Californians see death as optional. 

This is one of my oldest jokes and it remains true.  In Silicon Valley, where I live, my affluent VC friends want to live forever and are working out and taking supplements to achieve that. In contrast, my British friend Dr. Richard Smith (former Editor of the BMJ) is sitting on the Lancet Commission on the Value of Death.  Enough said. 

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Climate Change: The Future of the Quality Movement

By MARIE DUNN

A little more than 20 years ago, the IOM report To Err is Human catalyzed the profession around the realization that our health care system was killing around 98,000 people a year from medical error. I am part of a generation of professionals that learned to adopt systems thinking; to measure, monitor, and improve; and to ultimately improve quality of care. 

Today, we face a different set of challenges. Health care is in the midst of a global pandemic, a reckoning with systemic racism, not to mention the great resignation. But also, we face a climate crisis. Are these things connected? Is there something we all can do? The answer is undoubtedly yes, and I write to advocate for climate change to be included on this list of strategic and moral imperatives for health care leaders everywhere. 

Why is that?

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Can Democracy Survive In The Absence of Health Care Security?

By MIKE MAGEE

In my course this fall at the President’s College at the University of Hartford, we began by exploring the word “right” at the intersection of health care services and the U.S. Constitution.  But where we have ended up is at the crossroads of American history, considering conflicting federal and state law, and exploring Social Epidemiology, a branch of epidemiology that concentrates on the impact of the various social determinants of health on American citizens.

What makes the course timely and relevant is that we are uncovering a linkage between health and the construction or destruction of a functional democracy at a moment in America’s history when our democracy is under direct attack.

This was familiar territory for Eleanor Roosevelt. She spent the greater part of World War II creating what she labeled in 1948 “Humanity’s Magna Carta” – aka the “Universal Declaration of Human Rights (UDHR.)

Embedded in the declaration was a much broader definition of health. It reads “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” The Marshall Plan, for reconstruction of war torn Germany and Japan, embodied these principles, and successfully established stable democracies by funding national health plans in these nations as their first priority.

Although our nation signed the UDHR, it carried no legal obligations or consequences. In fact, the U.S. medical establishment’s bias was to embrace a far narrower definition of health – one that targeted disease as enemy #1. They believed that in defeating disease, health would be left in its wake.

In contrast, neighboring Canada took the UDHR to heart, and as a starting point asked themselves, “How do we make Canada and all Canadians healthy?” Where our nation embraced profiteering and entrepreneurship, leaving no room for solidarity, Canada embraced the tools of social justice and population health.

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Policies, Techies, VCS: Musings From a Futurist

By IAN MORRISON

I should’ve been in Paris last week on vacation with my wife, instead I listened in to the Policies Techies VCS:  What’s Next For Healthcare conference (I’ll explain why later).  Matthew Holt and Jessica DaMassa did a magnificent job of assembling the Who’s Who of digital health tech to wax lyrical about what the new kids on the block were up to, where it is all headed, and what it will mean for the system. (Full disclosure Matthew and Jess are friends of mine, I hired Matthew from Stanford almost 30 years ago to join the Institute For The Future (IFTF) and have watched proudly as he has become a Health 2.0 impresario.  Jess simply deserves a gold medal for wrangling Holt and all the other tech Bros with wit, charm and intelligence).

This is a tumultuous time for digital health technology because of the pandemic and the related rise of digital solutions not to mention the very frothy investment market and massive deal flow over the last 24 months.   There are a lot of exciting new faces.  But, many of the companies on display have been at this for some.   And for many of the old guard, like Livongo and now Transcarent Founder Glen Tullman, Athena Health and now Zus Founder Jonathan Bush, and Amwell CEO Roy Schoenberg and others this has been a much longer journey.

(Parenthetically, as a young management engineer in Canada, a position, I was not qualified for, I wrote the justification for an all-computerized hospital at the University of British Columbia in 1979!  I still find it just incredibly pathetic that it has taken us 40 years to suddenly “discover” digital health. I wrote The Second Curve which forecast (among other things) the rise of digitally enabled health transformation 25 years ago!  So it is hard for me to get really excited that this is either “new” or “next”.)

So, while a lot of us have been in this movie for a long time, there is something very different about the current crop of offerings.  In particular, technology has advanced considerably and there are clearly new cloud and SaaS tech enabled care solutions.  There is a new cadre of talented and committed investors and entrepreneurs who believe they have the capability and capital to scale meaningful enterprises that will disrupt incumbent healthcare players and better serve consumers and providers.  And the timing seems right as the pandemic forced consumers and the health care system to confront new ways of doing business.

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Selfish Much?

By KIM BELLARD

In a week where we’ve seen the bungled Afghan withdrawal, had Texas show us its contempt for all sorts of rights, watched wildfires ravage the west and Ida wreak havoc on a third of the country, and, of course, witnessed COVID-19 continue its resurgence, I managed to find an article that depressed me further.  Thank you, Aaron Carroll.

Dr. Carroll – pediatrician, long-time contributor to The New York Times, and now Chief Health Officer of I.U. Health — wrote a startling piece in The Atlantic: We’ve Never Protected the Vulnerable.  He looks at the resistance to public health measures like masking and wonders: why is anyone surprised? 

Some of his pithier observations:

  • “Much of the public is refusing. That’s not new, though. In America, it’s always been like this.”
  • “COVID-19 has exposed these gaps in our public solidarity, not caused them.”
  • “America has never cared enough. People just didn’t notice before.”

Wow.  What was that about Texas again? 

Some of Dr. Carroll’s examples include our normally lackadaisical approach to influenza, our failure to recognize the dangers we often pose to immunocompromised people, our paltry family and sick leave policies, and our vast unpaid care economy.  He could have just as well pointed to our (purposefully) broken unemployment system or the stubborn resistance to Medicaid expansion in 12 states (Texas again!), but you probably get the point. 

Everyone likes to complain about our healthcare system – and with good reason – but it is not an abyss we somehow stumbled into.  It’s a hole we’ve dug for ourselves, over time.  We may not like our healthcare system but it is the system we’ve created, or, perhaps, allowed. 

Health insurance was once largely community-rated, spreading the risk equally across everyone to protect the burden on the sickest, until some insurers (and some groups) figured out that premiums could be cheaper without it.  Use of preexisting conditions and medical underwriting also served to protect the less vulnerable, until ACA outlawed those practices. 

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Healing at Home: Answering the $30,000 Question

By DAWN CARTER

If you’ve been working remotely for the past year, would a $30,000 raise entice you back into the office? In a recent survey of 3,000 workers at dozens of large US companies, the vast majority of respondents said they would forego the hefty raise if they could keep working in their pajamas.

I’ve spent more than 25 years in healthcare strategy and planning, and that was one of the most remarkable surveys I’ve ever seen – though not in terms of HR, because healthcare is one of the few industries where remote work never took hold during the pandemic.

Instead, I think the urgent lesson for healthcare planners is all about how – and where – services will be delivered in the future. Call it “the Covid effect”: In the same way that employees over the past year discovered the advantages of working at home, we’ve seen a huge number of new patients who discovered the advantages of so-called Hospital at Home programs.

Hospital at Home is not exactly a new model, but it’s been relatively unknown among patients until now. That’s because limited, early experiments suffered from low participation rates – just 7 to 15 patients per month. But those numbers got a huge boost over the past year as hospitals scrambled to preserve in-patient capacity for only the most extreme Covid cases. The Association of American Medical Colleges says interest in Hospital at Home “exploded” during the pandemic, and health systems from Boston to Cleveland to Seattle launched or expanded in-home programs that served thousands and thousands of new families.

It may be hard to put this genie back in the bottle. If workers won’t go back into the office for $30,000 what could possibly entice patients back into the traditional hospital setting once they’ve experienced the benefits of healing at home?

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Health Care, Meet Gall’s Law

By KIM BELLARD

I can’t believe I’ve gone this long without knowing about Gall’s Law (thanks to @niquola for tweeting it!).  For those of you similarly unaware, John Gall was a pediatrician who, seemingly in his spare time, wrote Systemantics: How Systems Work and Especially How They Fail in 1975.  His “law,” contained therein, is:

Have you ever heard of anything that applied so perfectly to our healthcare system? 

As anyone who has been reading my prior articles may know, I’m a big believer in simple.  I’ve advocated that healthcare’s billing and paperwork should be much simpler, that “less is more” when it comes to design,  that healthcare should first do simple better but, above all,  that healthcare should stop doing stupid things.  I’ve equated the ever-increasing intricacies of our healthcare system to the epicycles that kept getting added to the Ptolemaic theory in a desperate attempt to justify it. 

Few would disagree that the U.S. healthcare system is complex.  Healthcare systems in general have evolved towards more complex, but the U.S. system takes complexity to extremes, with its thousands of payors, its powerful pharma/medical device industry, and its highly concentrated hospital markets (including ownership of physician practices), among other things. 

Simple isn’t always better, of course.  Life is complicated and so is our health, but, come on: how many people can explain why PBMs exist, what their heath insurance plan actually covers, how their health care bill was arrived at, or why we spend so much time in the healthcare system just waiting?  Literally no one understands our healthcare system.

It shouldn’t be that way.  It doesn’t have to be that way.  But it is.

Some pundits argue we don’t even have “a system” but, rather, thousand or even millions of smaller health-related markets that co-exist but don’t really work together.  For anyone who doubts that, try to explain the presence of workers compensation healthcare or why dental is at best a separate form of coverage (last I looked, the mouth was part of the body).  Try to explain why child care is most definitely not part of healthcare but home care is – depending, of course, on whether it is “custodial” or not.   Silos abound.

It could be argued that healthcare started with a simple system that “worked.”  Some are nostalgic for the days when people saw their family doctor, paid their doctor, and that was it.  It doesn’t get much simpler than that.  Of course, those doctors couldn’t really do all that much for their patients and didn’t really get paid all that much, so to say that it “worked” for either party is debatable. 

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The FDA’s Culture: Should Safety Dominate All Practices?

By STEVEN ZECOLA

An organization’s culture is an internal set of shared values, attitudes and practices. The cohesiveness of the organizational culture will affect whether the entity will meet its vision, purpose, and goals.

One type of organizational culture is hierarchical in nature.   Unlike a risk-taking culture, this structure features policy, process and precision. It is best suited for mature and stable organizations.

The disadvantage of a hierarchal culture is that its stability and control can turn into rigidity. In many cases, the organization develops a negative attitude towards ideas supplied by third parties. It paints itself as having the perfect answer for every issue, no matter how large or small.

My interactions with the FDA suggest that its cultural practices are focused on safety, seemingly to the exclusion of all other issues.  This practice may be appropriate in the regulation of food, but not for drug research where flexibility and creativity are required to cure complex diseases.

Over the past decade, I have witnessed an excessive adherence to its existing practices in the context of BRCA1-related breast cancer, metastatic cancer, precision medicines, “Big Data” and Parkinson’s disease. While the rulings were directed at me, the FDA’s position on these issues has impacted millions of people for the worse.

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