Category: Health Policy

Hospitals Must Give Up Power to Save Healthcare

Sep 16, 2020

By KEN TERRY

(This is the sixth in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

As hospital systems become larger and employ more physicians, healthcare prices will continue to rise and independent doctors will find it harder to remain independent. Hospitals will never fully embrace value-based care as long as it threatens their primary business model, which is to fill beds and generate outpatient revenues. To create a viable, sustainable healthcare system, the market power of hospitals must be eliminated.

Federal antitrust policy is not adequate to handle this task. Even if the Federal Trade Commission had more latitude to deal with mergers among not-for-profit entities, the industry is already so consolidated that the FTC would have to break up health systems involving thousands of hospitals. Such a gargantuan effort would be practically and legally unfeasible.

All-payer Systems

The government could curtail health systems’ market power without breaking them up. For example, either states or the federal government could adopt “all-payer” models similar to those in Maryland and West Virginia. Under the Maryland model introduced 40 years ago, every insurer, including Medicare, Medicaid, and private health plans, pays uniform hospital rates negotiated between the state and the hospitals.

THCB Gang Episode 24!

Sep 10, 2020

Episode 24 of “The THCB Gang” was live-streamed on Thursday, September 10th! Watch it below!

Joining Matthew Holt (@boltyboy) were some of our regulars: WTF Health Host Jessica DaMassa (@jessdamassa), patient & entrepreneur Robin Farmanfarmaian (@Robinff3), writer Kim Bellard (@kimbbellard), policy & tech expert Vince Kuraitis (@VinceKuraitis), and guest Mike Magee, a medical historian & health economist (@drmikemagee). The conversation was incredibly wide-ranging and one of the best we’ve had in a while–not the least because Mike Magee gave us a great base with how our non -health system somehow did actually act as a cohesive force in society before tech, then COVID19 broke it up!

If you’d rather listen to the episode, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels — Zoya Khan

To Avoid Pay Cuts, Doctors Must Reduce Waste

Sep 9, 2020• 5

By KEN TERRY

(This is the fifth in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Real healthcare reform depends on an effective plan to reduce cost growth. To achieve this goal, it makes a whole lot more sense to cut waste than to limit access to necessary services or slash provider payments to the bone, noted Donald Berwick, MD, a former acting CMS administrator, and Andrew D. Hackbarth, a RAND Corp. researcher, in a 2012 JAMA article. In their telling, a significant reduction in waste would allow us to bend the cost curve without hurting healthcare quality or access.

Berwick shared with me that he doesn’t know how much unnecessary care physicians or hospitals could safely eliminate. “Some of it is marbled into the daily activities of healthcare organizations,” he said. “There would have to be systemic changes to get it done. But it’s a matter of will. With enough will, a lot of it could be eliminated. And when you’re talking about $1 trillion [worth of waste], even if you get 10% of it, that’s a tremendous amount that could be applied to other activities.”

Risk-based contracts, whether shared savings or capitation, can incentivize physicians to reduce waste. From the viewpoint of long-suffering primary care physicians, value-based-care agreements that let them share in the savings they generate are a godsend. Of course, not all primary care doctors are willing to take financial risk or change their practice patterns. But if maintaining their current income depends on it, most physicians will embrace change.

Specialists, too, can benefit by embracing the new paradigm. If they’re mainly being paid fee for service, they’ll have to forgo a lot of lucrative tests and procedures. But they can still keep their incomes up by delivering more-appropriate procedures and tests to a larger patient population.

Why Health Systems Employ Doctors: Money and Control

Aug 31, 2020• 2

By KEN TERRY

(This is the third in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

The American Medical Association (AMA) last year announced that, for the first time, more physicians were employed than were independent. While many of these doctors were employed by private practices, the AMA said, about 35% of them worked directly for a hospital or for a hospital-owned practice.²⁵

This estimate was lower than that of other surveys. According to research conducted by the Physicians Advocacy Institute (PAI) and Avalere Health, a consulting firm, 44% of physicians were employed by hospitals in January 2018, compared to 25% in July 2012. More than half of U.S. physicians now work for or contract with fewer than 700 healthcare systems across the country, according to a new study in Health Affairs.

Many of the physicians employed by hospitals and health systems formerly were in private practice. They sold their practices to hospitals because of increasing overhead, dwindling reimbursement, and the rising administrative burdens of ownership, according to Jackson Healthcare, a physician recruiting firm.

The many negative factors affecting primary care also have impelled a growing number of primary care physicians to seek employment in recent years. In 2018, 47% of general internists, 57% of family physicians and 56% of pediatricians were employed. There is evidence that this trend may be exacerbating the primary care shortage because employed doctors see fewer patients per day, on average, than do those in private practice.

Slow Walking to Value Based Care: Why Fee for Service Still Rules

Aug 26, 2020• 2

By KEN TERRY

(This is the second in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

In January 2015, then Health and Human Services Secretary Sylvia Burwell announced lofty goals for the government’s value-based payment program. By the end of 2016, she said, 85% of all payments in the traditional Medicare program would be tied to quality or value, and 90% would be value-based by the end of 2018.

The government planned to tie 30% of Medicare payments to alternative payment models by 2017, according to Burwell, and hoped to reach the 50% mark by 2018. In March 2016, HHS said it had reached the 30% goal a year ahead of schedule, mainly because of the Medicare Shared Savings Program (MSSP).

More recent data on the value-based-care movement comes from the Health Care Payment & Learning Action Network (LAN), a public-private partnership launched in 2015 by the Department of Health and Human Services. The LAN reported in October 2018 that public and private payers covering 226 million lives, or 77% of insured Americans, had tied 34% of their payments to value-based care. According to the organization, only 23% of total payments had been value-based in 2016.A deeper analysis of the LAN data, however, shows that the vast majority of value-based payments—both in Medicare and in the larger healthcare system—were still limited to pay for performance, upside-only shared savings, and care management fees paid to patient-centered medical homes.

Physicians Should Lead on Healthcare Reform

Aug 21, 2020

By KEN TERRY

(This is the first in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Even before COVID-19, healthcare reform seemed to be stuck between a rock and a hard place, but there is a rational way forward. This approach, which I call “physician-led healthcare reform,” would engage doctors in building a healthcare system that was safe, effective, patient-centered, timely, efficient, and equitable, to use the Institute of Medicine’s set of foundational goals in its landmark book, Crossing the Quality Chasm: a New Health System for the 21^st Century.Primary care physicians, rather than hospitals, would be in charge of the system, and they’d work closely with specialists and other healthcare professionals to produce the best patient outcomes at the lowest cost.

It would take a decade or more to restructure the healthcare system so that this goal could be achieved. Similarly, the transition to a single-payer insurance system needs to be accomplished gradually—although the pandemic might accelerate that timetable. Most people are not yet ready to abandon employer-sponsored insurance, and there’s still a lot of distrust of the government. Providers are more likely to accept changes in how they’re paid over time than all of a sudden. Additional benefits can also be brought online slowly. Ideally, we could transform healthcare financing over a 10-year period while rebuilding the care delivery system at the same time.

That is why implementing Medicare for America—a reform plan devised by the Center for American Progress and embodied in a current House bill–makes more sense than going directly to Medicare for All: it changes the system incrementally while achieving universal coverage fairly quickly. Medicare for America would do this by enrolling the uninsured, people who purchase individual insurance, and those now in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). People would also be enrolled automatically at birth. Companies could enroll their employees in Medicare for America, and employees could opt out of employer-sponsored plans and enroll in the public plan.

Health Insurers Ride High for Now, But Watch What’s Coming Next

Aug 18, 2020• 1

By KEN TERRY

In the strangest healthcare business story of 2020, the major health insurance companies are thriving despite—or because of—the pandemic. As the second quarter reports of United, Anthem, Cigna and other insurers reveal, their COVID-19-related costs were outweighed by the sharp drop in claims for other healthcare services.

As a result, the second quarter operating gain for Anthem, one of the largest national carriers, jumped 65% from the prior-year period, while the portion of its premiums spent on member benefits dropped to 78%. The earnings of UnitedHealth, similarly, vaulted 98% as the percentage of its premiums spent on health care fell to 70.3%. Such a low “medical loss ratio” has probably not been seen since the 1990s.

At the same time, the big insurers’ membership has been rising, but not among workers covered by employer-sponsored plans. Commercial insurance members served by United, for example, fell by 270,000 to 26.8 million, following a drop of 720,000 in Q1. In contrast, the number of people in United’s Medicaid managed care plans rose by 330,000.

These trends track with the short-time fallout of the pandemic. Families USA reported that 5.4 million workers who lost their jobs from February to May also lost their health insurance. Another study predicted that by the end of 2020, 10.1 million people will lose employer-based insurance tied to someone in their household.

Healthcare Sings The Non-Profit Blues

Aug 17, 2020• 1

By MICHAEL TURPIN

Powers once assumed are never relinquished, just as bureaucracies, once created, never die.
Charley Reese

As we ponder the 100 day count down to the Presidential Elections, the rhetoric and ranting swirling around the best solution for our nation’s healthcare crisis, is hitting decibel levels not heard since the passage of the Affordable Care Act. As with any major entitlement legislation, there are commendable elements, inefficiencies, and a host of unintended consequences. The current administration’s obsession with repeal while the ranks of uninsured people grow, begs the question, “what is the blue-print for expanding coverage and reducing waste, fraud and abuse while increasing transparency, quality and overall public health. Answer: There is no plan and if there was, it would fall well short of achieving many of these objectives given the deeply entrenched stakeholder who actually do not benefit if the cost of healthcare declines. It a classic NIMBY response: “I’m all for reform as long as I maintain my role and revenue in whatever solution is proposed.”.

The Affordable Care Act is a solid foundation to build a 2.0 version of a solution to solve for the uninsured and to act as a catalyst for market reforms that will either reshape the misaligned incentives and embedded inequities in our current system or it will lead to voters demanding the expansion the role of Medicare and Medicaid. 70M adults and children are covered under Medicaid – including those who benefited by the passage of the ACA. Approximately 55M are covered under Medicare resulting in 125M covered under some form of state or federal aid. 155M receive coverage through employers.

Its estimated by the Economic Policy Institute that 29.8M individuals who received coverage as a result of ACA expansion would lose coverage if no legislation replaced it. Add in the severe economic dislocation arising from Covid-19 that could result in an additional 14M unemployed and you could see a worst case of uninsured swell from a current 27M to as high as 70M according to Policy Advice, a non-profit industry watch dog.

So how can you change the current market to drive reforms without a legislated intervention? It starts by enforcing laws already in place and challenging regulators to do their jobs – ensuring that we minimize waste, fraud and abuse. As of 2020, the average annual cost of family health coverage has eclipsed the cost of a mid-sized economy car. We must tackle the affordability problem by reducing the number of intermediaries who extract profits from the delivery system but do not play properly in the sand box of regulation that is often poorly monitored. We must demand transparency and deconstruct expensive bureaucracies only inflate the cost of care without improving it. It’s impossible to moderate the cost of healthcare without reducing the size of the pie and those feeding on it.

Health Insurance Needs to Grow Up

Aug 3, 2020• 1

By KIM BELLARD

I’ve been covered by private insurance my entire life. Even more telling, I worked in the health insurance industry for — gasp! — some thirty years. It’s not just paid for my healthcare, it’s financed my life.

Today, though, for the first time in my life, I’m covered by public insurance — and I couldn’t be more relieved.

Now, I’m not going to go all Wendell Potter. I know many people have their health insurance horror stories, but, sadly, people have them about pretty much every part of the healthcare industry. I believe most people working in health insurance, like most people working in healthcare generally, sympathize with the people they serve and are just trying to do a good job.

The problem is that the health insurance model has outgrown the times. I’ll try to explain some ways how.

Premiums

Once upon a time, most people had employer coverage, and those employers paid all or most of its cost. Those days are gone. Employer coverage is still the predominant form of private health insurance, and employers still pay the majority of its cost, but percentage of people with employer coverage continues to drop and the amount they pay for it continues to increase.

Healthcare Should Get Into Some #GoodTrouble

Jul 21, 2020• 1

By KIM BELLARD

As hopefully most of you know, Rep. John Lewis, civil right icon and longtime member of Congress, died this past Friday. Rep. Lewis was often described the “conscience of Congress” – perhaps a low bar in today’s Congress but important nonetheless — for his unwavering commitment to social justice. I have always been struck in particular by one of his quotes:

Rep. Lewis must have been heartened by the fact that, in 2020, plenty of people are, indeed, making noise and getting into good trouble, necessary trouble over issues that he cared deeply about, like Black Lives Matter and voting rights. There are others who are better able to write about those people and that trouble. So I’d like to talk about his call to action with respect to healthcare.

If you are working today in healthcare — especially in the United States — or, for that matter, someone getting healthcare or having a loved one get it, then you should be making some noise and getting into good trouble, because our healthcare system most definitely makes it necessary.

It should come as no surprise that we’re not very happy with our healthcare system, rating it lower than do citizens in most other developed countries. And for good reason: it’s the world’s most expensive while delivering sub-par health results and leaving tens of millions without financial protection. Even our physicians don’t like it. Even our latest, best effort for improving the sorry state of our healthcare system — the Affordable Care Act – is under risk of repeal due to a lawsuit brought by 18 states and backed by the Trump Administration.

Every day, too many of us suffer in the healthcare system, ranging from waits to indignities to critical mistakes, and some face financial ruin due to the care — whether good or bad. Most of us suffer in silence, or only complain to our friends and family. We don’t see a lot of mass protests about the pitiful state of our healthcare system, and I have to wonder why.

We have to stop being so passive.