Tag: Al Lewis

Is North Carolina Medicaid the Healthcare Industry’s Solyndra?

North Carolina Medicaid recently reported, for the third time, using a third consulting firm, the achievement of massive savings through its patient-centered medical home (PCMH) program, now called Community Care of North Carolina (CCNC). Among other things, CCNC pays the physicians more money in order to encourage and compensate behaviors and processes, including enhanced access to care and case management, to hopefully reduce the need for emergency and inpatient services. (A brief summary of this and past consulting reports appear in the current issue of Modern Health Care.

However, the third time is not a charm. Notwithstanding these consultants’ reports — which paradoxically support my contrary conclusions by choosing to ignore the overwhelming data contradicting their own claims – the program is a total failure as far as reductions in cost and inpatient utilization are concerned.

Fact #1: According to the Medicaid and CHIP Payment and Access Commission (MACPAC) report to Congress, North Carolina is by a significant margin the highest-cost state per capita in its region for adult and for child Medicaid spending. These are the two categories in which the PCMH has been in place the longest. In the “aged” category, in which PCMH had barely been started when the MACPAC data was compiled (and would not affect medical costs noticeably because the state is a “secondary payer” following Medicare, and most Medicaid “aged” spending is custodial anyway), North Carolina is the lowest cost state in the region.
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Does ICD-10 Delay Create an Easy Opportunity for Coding Improvement?

Implementation of ICD-10s has been delayed “indefinitely.”   Rather than opine on whether that’s a good thing or a bad thing, I will note that it creates an opportunity for a simple but powerful improvement in the value of the coding.

Caveat:  I am not a coding expert (I don’t even play one on TV) so there might be something wrong with this idea.  The specific reason for the post is to find out whether there is some reason this can’t be done, given the value of doing it.  (I am so unfamiliar with coding that it is possible this is already being done and I’m the last guy to find out about it, in which case perhaps John and Matthew would be kind enough to remove it.)

Quite simply, how about adding an optional  “R” for “rule-out” after the codes?  For instance, today if a patient gets tested for diabetes and it turns out that he HAS diabetes, he gets coded “250” in the ICD-9s.   Whereas if it turns out the patient does NOT have diabetes, he still gets coded “250.”   My proposal would code that (in ICD-9s) 250R.

By contrast, giving two opposite diagnoses the same code creates a cascading set of problems, in outcomes measurement, risk scoring, registries, disease management, reimbursement, and predictive modeling, problems that will be exacerbated as risk shifts down to the provider level and payors move to outcomes-based reimbursement.

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Newt Gingrich Reveals His Inner Democrat

Perhaps Newt Gingrich’s book Saving Lives & Saving Money has been quietly redacted of a few lines since its original 2003 printing, because otherwise a simple read of the copies now in circulation would find a blueprint for Obamacare just like the first printing did.  I dusted off my old, autographed, copy and re-read it, and am providing some highlights for THCB readers.

Much of the book does propose market-based solutions, such as the use of disease management programs to “dramatically improve outcomes.”  However, the book also calls for bigger government, in the form of (1) drug coverage for seniors (since passed) and (2) a “tripling” of the National Science Foundation budget.

In addition to those two specific calls for increased government spending, the first printing contains language that might comfort Don Berwick more than Fox News, and not just because Dr. Berwick gets favorably mentioned twice.

Some samples:

P. 31:  “The number of uninsured in America is a threat to our civilization.”

P.  54  “Don Berwick[has] pioneered the translation of the  teachings of quality experts such as Edwards Deming and Joseph Juran to the healthcare profession.”

P 59   “It is justified to mandate the use of electronic systems to drag the medical system into the 21st century.”

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Reports of the Death of Disease Management Are Greatly Exaggerated

Al LewisThere have been unsavory rumors flying around the internet that disease management as practiced today may not be all that effective. I’m not going to reveal who started these rumors but her name rhymes with Archelle Georgiou. This person says disease management is “dead.” Since there are still many disease management departments operating around the country apparently oblivious to their demise (and disease management departments are people too, you know), I suspect this commentator was using the word “dead” figuratively, as in: “The second he forgot the third cabinet department, Rick Perry was dead.” (Another example of presumably figurative speech in the death category would be: “After he denounced gays while wearing the Brokeback Mountain jacket, you could stick a fork in him.”)

And if the rhymes-with-Archelle commentator intends “dead” as a synonym for “not in very good shape,” she certainly has a point. Not only does she have a point, but I would add more items to her list of reasons for the field’s current troubles:

(1) The interval between diagnosis (the point where readiness to change is usually greatest) and successful patient contact can exceed three months;

(2) Predictive modeling “risk scores” that tell you only how sick someone was, dressed up as a “risk score,” not how sick they will be, even though they aren’t already high utilizers;

(3) Some interventions are so expensive that they exceed the cost of the disease;

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Real Reform For Medicare Advantage

Medicare Advantage (MA) is stuck in a cycle in which the government wants to micromanage MA plans and cut their reimbursement to satisfy deficit hawks, while the health plan industry lobbies for exactly the opposite. The result is a negative-sum game, a stalemate that benefits nobody.

It turns out that this stalemate would be remarkably easy to overcome, in a way that makes money for the government, gives seniors a visibly better deal, reinvigorates the Medicare ACO, and entices many more members into MA. Since MA plans are held to quality standards far beyond what Medicare fee-for-service requires (remember, straight Medicare is a payment system, not an insurance plan), I am going to assert that the increasingly popular MA plan option – especially plans with high Star ratings – provides better care coordination for seniors than fee-for-service (FFS). The government recognizes this implicitly by initiating Medicare ACOs. ACOs are supposed to close that care coordination gap in FFS but it does not look like that is going to happen on a broad scale in the near future.

If one accepts the premise that more care coordination is a worthy goal, here’s a better way of addressing that care coordination gap by getting more seniors into MA, rather than by setting up a parallel universe of ACOs…and do it in a way that clearly saves money for the government and seniors.

Start with the recognition that most 64-year-olds are already in an HMO or PPO. Today’s sign-up procedure for Medicare acts as though neither innovation exists. A senior becomes eligible for Medicare and then (in competitive markets) gets deluged with offers to join one or another MA plan, which requires switching out of FFS — a model that, while called “traditional,” is totally unfamiliar to patients coming out of commercial HMOs. These enticements to seniors are quite costly for the health plans, involving brokers, salespeople, advertising etc.

How about a system in which MA becomes an opt-out instead of an opt-in for 65-year-olds, meaning people would automatically start receiving their Medicare benefit through a health plan instead of FFS? As you read what follows, assume that MA would still be totally voluntary and that people who want the old-fashioned FFS can simply opt into it.Continue reading…

My Own Story of ALS


I would like to introduce our newest regular contributor, Al Lewis. Some of you might recall him from his guest-postings, sometimes offensive, usually controversial but always based on both fifth-grade arithmetic and principles of economics, two subjects that he respectively took in fifth grade and taught for two years at Harvard.

Al is asking for a tiny bit of help from us, which is to go to his ALS site and “like” it and maybe add a facebook comment.   He is trying to get CMG Marketing (the official licensing contractor for Major League Baseball) to sell Lou Gehrig jerseys to raise money and awareness for ALS.  Increasing the popularity of that site increases the likelihood of his getting CMG’s attention with his fundraising idea. –  Matthew Holt

It occurred to me that I have yet to post my own story in detail, and some of you asked me to do that after seeing my wedding photo.

Janet and I had dated for a while, and though we had broken up, we had become more like “besties” when she started to feel that something was amiss.  I (and other close friends) took her to several doctors to try to discern what was wrong.   I know many of you experienced the same thing with your loved ones, where you had to visit multiple doctors before getting a diagnosis.   Then came the day — and no doubt you had a similar day too — when you finally get the definitive diagnosis.  The Mass General neurologist, Dr. Cros, had very thoughtfully scheduled this visit as the last one of the day, so that the four of us there could be in his office into the evening, asking questions, holding back tears, cross-examining him to make sure we hadn’t overlooked any possibility for treatment, even something in early-stage clinical trials, with mice even.

After that, we went about our lives.  Of course I continued to be supportive as best friends would be.  But I couldn’t stand to watch her deteriorate in front of me like this.     At one point her condition had declined so much that at her health club (Mt. Auburn) where she had been a member of for 20 years, someone asked what was wrong.  About a day after I told the person at the front desk, the manager wrote back and said he was going to comp her membership for the rest of her life.Continue reading...

Time for Toto to Pull the Curtain Away from Patient-Centered Medical Homes

Patient-Centered Medical Homes in statewide populations have unstoppable momentum and major constituencies in support of them, so valid analysis of their outcomes is probably as futile as it will be unwelcome.  However, the math speaks for itself, at least in the mother of all statewide medical homes, North Carolina Medicaid’s Community Care Access Model.

I write this after having analyzed the actual data from this project’s outcomes report, rather than the stated conclusion of the report, a conclusion that continues to be cited in support of the many states considering or implementing medical home models for their Medicaid populations.

The conclusion makes North Carolina looks like a huge win for PCMH:   $300-million in reported savings.  However, readers should have (but largely didn’t) observe a number of curiosities about the data in support of that conclusion:

(1)    Every element of resource use declined.  People have to be getting their care from somewhere, but inpatient, ER, outpatient, physician, drug, and other expenses somehow all declined vs. trend.

(2)    The decline in physician practice expense is especially counterintuitive:  Why are the doctors so supportive if they are working harder but making less money?

(3)    Even though somehow savings were shown in physician expense, per capita doctor visits did indeed increase.   More concerning was that specialist visits –which are supposed to decline in a PCMH model – also increased.

(4)    Inpatient expense fell 47%.  This was achieved despite the fact that all the AHRQ’s “Ambulatory Care –Sensitive Conditions”  total to about 20% of admissions in most populations.

(5)    The evaluators (William M. Mercer) are on record as saying that “choice [emphasis mine] of trend has a large impact on estimates of financial savings.”  Perhaps it is possible that Mercer, having given themselves this latitude, “chose” a trend that would make the study look good.

Those observations merely suggest that the study was done wrong.    But one other “finding” invalidates the entire study:  the 54% reduction in spending on babies under one year of age, accounting for the majority of the entire $300-milllion in spending.   (Any nontrivial savings whatsoever in this category should have raised eyebrows since PCMH is mostly about managing chronically ill patients.)   The components of spending in that category include physician expense, which should rise since doctors get paid more to be more accessible, and drug expense, which should rise for the same reason.  This means that the entire 54% savings across the category must be concentrated in neonatal expense.   Since neonatal expense is about half of total spending in the age category, it would have to decline by a mathematically impossible 100%+ in order for the category to average a 54% reduction.Continue reading…