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Category: The Business of Health Care

New Study Proves Reducing Healthcare Costs While Improving Care Is Achievable

The results are in: population-based care management doesn’t just improve patient satisfaction – it also can significantly reduce medical costs.

It is widely known that chronic disease accounts for 75% of the total cost of healthcare in the United States. In the late 1990s, the care management industry grew out of the need to combat this problem, by increasing medication compliance, reducing gaps in care, and helping individuals become more empowered to actively manage their own health.

Care management programs have long been shown to increase medication compliance and use of other preventative services, and individuals who participate in care management programs find them extremely valuable. Yet the care management industry has always faced challenges in verifiably demonstrating the effectiveness of its programs in  reducing medical costs. Several methodologies have been created to attempt to reverse-engineer a calculation of savings delivered by care management programs, but the gold standard of healthcare effectiveness measures, a randomized controlled trial, has rarely been done and none in a large population.

I’m pleased to say that this is no longer the case. A study from Health Dialog appearing in the New England Journal of Medicine today, uses a randomized controlled trial to definitively show the savings delivered by an enhanced care management program. The trial looked at 174,120 individuals over twelve months, measuring those individuals’ health outcomes and the total savings as a result of an enhanced care management program. The program included chronic condition management and patient decision support programs, and these services were delivered telephonically as well as online.Continue reading…

Profit-seeking Health Insurers Seek Profits

Healthcare reform becomes official this week, as many of the provisions of the legislation kick in. One provision requires insurers to accept children with preexisting conditions while capping what they can charge, undoing a standard industry practice. Several insurers have indicated that they will stop selling child-only policies. Industry officials are having a field day criticizing insurance industry greed.

Maybe these officials haven’t noticed, but insurers are greedy and there is nothing anyone in the Obama administration can do about it. Maybe it needs repeating. Insurers are greedy, have always been greedy, and always will be greedy. So are all investor-owned companies. People don’t invest in health insurance companies (or any other investor-owned companies) for charity. They invest in them to make money. (Investors tend to be greedy too, and that includes the pension funds that most working Americans rely upon for their comfortable retirements.)Continue reading…

Can CMS Be a Venture Capitalist?

Lisa Suennen, a venture capitalist, writes this post about the provision in the national health care reform act that created the Center for Medicare and Medicaid Innovation (CMI). This agency has $10 billion to “research, develop, test and expand innovative payment and service delivery models that will improve the quality and reduce the costs of care” for patients covered by CMS-related programs. Lisa notes, “What is great about CMI is that they have the authority to run their programs much more like a business would without many historical governmental constraints. ”

I don’t want to be a stick in the mud, particularly as my able friend Don Berwick takes charge of CMS, but I want to point out that previous efforts by the government to be innovative in other fields have failed because:

(1) Venture funding embodies risk-taking. Government usually does not do this because there is a political imperative never to be blamed for misspending taxpayer money. The bureaucracy, therefore, systematically eliminates ideas that are untested.Continue reading…

Will the NFIB please go away…..

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Let’s be honest–I absolutely abhor the so-called National Federation of Independent Business (NFIB). It’s not a representative business group. In 2004 95% of their members said they voted for Bush, compared to 53% of all small business owners. (Remember that election was 50–50) Nonetheless, the first line of the recent NY Times article on NFIB joining the Republican Attorneys-General lawsuit on the individual mandate is that they’re trying to depoliticize the “largely Republican assault” on the new health care law. Ha, bloody ha.

But I’m not grumpy that the NFIB is joining this pointless lawsuit. I’m grumpy that they’re so blatantly going against the interest of small businesses. And yes I run one! So to remind you how stupid the NFIB is (in global not political terms) I’ve reprinted an article I wrote on Spot-on back in 2006–-and sadly nothing has changed. (The great thing about being a relatively veteran blogger is that I can really recycle material!)

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Small Business Shock-troops That Can’t Do Basic Math

Long ago, back in 1994 when Democrats walked freely in Washington, an outfit called the National Federation of Independent Business (NFIB) took a large role in overturning the Clinton health care plan and, consequently, a supporting role in the Republican Congressional victory later that year. And in health care policy, as they say in the movies: They’re baaaaaack.

Now, The NFIB is a narrow-(minded) interest group like any other; typical of any Washington trade association. But in health care it’s policy involves cutting off its nose to spite its own face and doing so with a rather dull knife.

Continue reading…

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