Salinas is a poor-ish rural California town down Highway 101 from Silicon Valley, and the financial contrast between the two is similar to that between Beverly Hills and Bell, a California city where officials’ salaries sparked national outrage and then arrests. Now it turns out that the CEO of the local Salinas community hospital got a $4m retirement pay-out and a $150,000 a year pension and managed to stay on in his job for another two years at $668,000 a year and when he retired last week he got another payment of nearly $900,000. Can we expect the same in the Salinas case as in Bell? I doubt it because that would expose to the world that there are thousands of community hospitals all over America paying their CEOs the same kind of money–ignoring the $1 million + salaries most AMCs dole out. Can running a 300 bed hospital really be that difficult?
I’ve been impressed by the efforts of CMS and others in the Federal government to develop helpful websites. Medicare has just relaunched its Caregivers website. It’s got a nice variety of stories, links and resources–including links to multiple partners offering support communities and other help. While the Physician Compare site had problems (and is a much more complex effort), I thought that Healthcare.gov was a good start to the complex world of finding health insurance, and the Health Indicators Warehouse is another good start at releasing masses of data in a usable format (FD Health 2.0’s Technology Guide is linked to as part of the site). Everything here can and will be improved, and much of this will be built on by the private sector–and that’s the way it should be. But given the scorn poured upon government, lets recognize the strides made.
In a move I don’t quite understand, Wal-Mart has bought search & content site Kosmix for a reported $300m. Kosmix has been doing various things around presentation of search information from different sites and places on the web (including an interesting mash-up of Twitter called Tweetbeat. But it’s most of interest to us as its flagship RightHealth site has been a leader in Health 2.0. While not exactly Google-type money $300m for a company which had raised a total VC investment of about $55m is not nothing. But it appears that Wal-Mart bought it for the technology potential more than for the current revenue or the RightHealth site. So lets hope that we’ll be seeing more investment and more products from RightHealth in the coming years–rather than it being tossed as part of a larger social media strategy from the Beast of Bentonville.
When ONC lunched the meaningful use program paying doctors up to $44,000 or more to adopt electronic medical records, I wondered–“how would they know?” Then I was told there would be a test. But I misheard, it’s not a test. Instead providers get to attest. For those of you like me with poor English skills, that means you get to self-report, which sounds much easier. Go to this page, follow the instructions and the money will magically arrive. Of course you have to be a qualified entity (doctor, hospital, etc) and you have to be getting funds from Medicare or Medicaid. And of course there’s never been any fraud or false reporting in those programs, so we’re completely assured that our tax-dollars (or the loan from the Chinese) are being well spent. Actually there will be audits and checks, and next year the bar for not only the use of the EMR but also the burden of proof will be raised. But for now, this looks like a way to spend that ARRA money fast and you can’t believe that this opportunity will happen for America’s providers again.
One of my sparring partners, Cato libertarian whizz-kid Michael Cannon, has a new column out about Medicaid and why block grants would stop a big problem. He’s right about the problem. Because states get a matching (and in some cases way more than matching) grant from the Feds, they are incented to make their Medicaid programs more expensive. Cannon echoes Ryan’s solution which is to just give them a fixed amount of money (the block grant). But that would instead incent states to spend as little as possible on Medicaid, making the program even worse for poor people than it already its–as John Goodman and others often point out. Of course none of these right-wingers, nor “sensible”centrist Dems like Tom Daschle are prepared to say the correct thing. Abolish Medicaid and fold it into the universal health insurance program that the ACA (sort of) is. Or better yet put everyone into one central pool and have them all buying into a central exchange–proposed in the House version of the ACA but skewered in the Senate.
Mark Smith, the President of the California Health Care Foundation, jokes that ACOs are like unicorns–mythical beasts that no one has yet seen. Well today Politico reports that–just like the Kennel club certifying a new breed of dog–CMS is about to come out with 1,000 pages of regulations telling us what an ACO is and what it can and can’t do. Should be fun.
Not often a lefty like me promotes AEI, but Jon Entine has written a great piece attacking the behavior of the FDA. For the last 3 years the establishment has been attacking the DTC genomics companies for basically allowing people to access their own information. But it’s worse than FDA and others telling the fibs that Entine’s exposed. At a meeting two years ago in DC I asked the regulator from New York state why they were going after Navigenics & 23andMe. Her answer “doctors have power in my state”.
JD Kleinke has been one of my favorite people in health care for at least a decade (or probably more!) notwithstanding his barrages at all and sundry (sometimes including me) on this very blog. He’s been a little quiet of late, but that silence is over. He’s out with a new novel called Catching Babies. It’s a topic I’m thinking about a lot! As you may know I’m less than 2 months from being a first time dad, and Indu (my Health 2.0 partner) is similarly close to being a first-time mom. Both me and my wife read Catching Babies in pre-publication and it’s a tour de force of health policy and medical soap opera–Health Affairs meets Grey’s Anatomy–wrapped up in the complex world of childbirth. Now the book is out and we’ll be having JD at the Health 2.0 Spring Fling in San Diego in a fireside chat about the book with Amy Romano (@midwifeamy). but I thought I’d take the chance to interview JD about the book and his previous and next steps. Here’s a (heavily edited) version of our IM chat–Matthew Holt
Matthew: You’re well known to THCB readers as a medical economist, policy wonk, and health IT entrepreneur geek from way back. The obvious first question – why a novel of all things? Does your shift to fiction imply that you’ve lost touch with reality?
JD: Lost touch? That would imply that I was ever in touch with reality in the first place! You may recall that my very first book tried to argue that managed care was a necessary evil for the good of us all, including providers. That the harshness of commercial managed care was the change agent we needed to get hospitals and physicians to modernize. I suppose that turned out to be fiction as well!
Matthew: OK so you’ve always been a bit of a dreamer, I might say the same thing about the health care IT ventures you’ve been involved with. But some of them, like Solucient and HealthGrades, are now pretty successful! And Catching Babies is not just a novel – it’s a great story – but it also has more powerful things to say about a dozen health policy problems than as many treatises on the exact same subjects.
JD: Thanks for the kind words about the story, and if that’s true, it’s powerful as a policy document precisely because it is a novel. For better or worse, this is how all of us, as human beings, relate to even the most abstract health care policy, or new technology, or business idea. Every health policy is ultimately a patient, and every patient is ultimately a story. Medicare coverage is extended for a new treatment because a Congressman’s mother once needed it. The crazy quilt of health benefits mandates at the state level exist because someone in each of those states got sick, was stuck with the bills for treatment, and took his case to the state senate either directly, or via the front page of the largest Sunday paper in his state. If you look back at the news building up to the passage of health reform, you’ll see that public opinion probably crested in support, when President Obama took the stage with the sweet lady from Ohio with cancer who couldn’t get health insurance.Continue reading…
This years HIMSS drew the largest crowd in history (31,000). That should be a tip off that something is going on. That something is the national drive for health IT launched by the Obama administration with a whole boatload of ARRA stimulus money being paid out starting this year.
Health Information Exchange (HIE)
While the evolving meaningful use standards for Electronic medical records remained a logical focus for many vendors and the subject of a mindblowing number of panels, there is a sense that the conversation is moving to the world of health information exchanges (HIE). As always, there is spirited disagreement about exactly how the term of the hour should be defined (see the debate over just what exactly the term Health 2.0 means for an example of a good controversy). Is health information exchange a central database, kind of like the old Community Health Information Network. Is it a new peer to peer network, linking hospitals and health systems in a more useful and fundamentally practical way? Or is it about a new economic model, based on the business models that go along with the free flow of clinical data. We heard the term Accountable Care Organization a lot! Or – more likely – a little bit of all of the above? See Mark Frisse’s excellent blog post on THCB for an in depth look.
Sure, nobody has yet come up with the world changing, completely disruptive, industry transforming Facebook for doctors that some pundits had predicted, but there are signs we’re getting closer. Lots of people are trying and social network-ish features are everywhere, with vendors giving their systems the ability to communicate with the outside world. That includes some of the “traditional” EMR vendors like Allscripts that are now linking their users.Continue reading…
A year on from Wellpoint’s ju-jistu move of announcing a 39% rate increase in California, therefore re-invigorating the health care bill and guaranteeing themselves billions in government subsidies, Blue Shield of California, the non-profit rival to Wellpoint’s Anthem Blue Cross, announced a 59% increase! In the annals of THCB, Blue Shield has a mixed record. CEO Bruce Bodaken was a big supporter of the ACA and consistently called for universal coverage, but at the same time the behavior of Blue Shield after the revelations about the insurance recissions was worse than any other insurer. It actually fought much harder for the right to continue them than Wellpoint, Healthnet and the rest. The most recent rate increases also concern the individual market—you know, that segment of the insurance market that Mark Pauly thinks works pretty well.
Blue Shield is saying that the rates really are only a 15% average increase, and that for some individuals they’re getting a delayed increase—in other words they should have been charged more last year—which is where that 59% number comes from. Why are rates going up? Blue Shield put out a handy press release giving its side of the story. Blue Shield is pretty explicit that the extra costs of the abolition of life-time maximums and the addition of kids up to 26 on family policies was only around 4% over 2 years. The big factor was that utilization went up 7%, unit costs (prices) went up 5% and the rest of the increase (3%) is due to lower overall out of pocket costs relative to what the insurer was covering (because of overall cost increases).
Translated into “where the money went,” hospital payments went up 15%, drugs up 12% and doctor payments went up 9%. In addition, although Blue Shield doesn’t state it, the pooled risk profile of everyone in a particular individual market product gets worse as while they all get charged the same at “entry”, and then more healthy people drop out as prices go up than sick ones. This is the insurance death spiral we used to hear so much about.
However, it’s not just Blue Shield and it’s not just the individual market.