Tag: HHS

Will the Rollout Of the Exchanges Be Delayed?

Sep 25, 2012• 1

By Jaan Sidorov, MD

While the Governor’s Mansion in Pennsylvania is currently under the control of the Republicans. I know the state’s Insurance Department is relatively apolitical. That’s why this September statement by Pennsylvania Commissioner Consedine before the U.S. House Ways and Means’ Subcommittee on Health is quite telling.

In it, Mr. Consedine describes how the Keystone state is encountering difficulties implementing an health insurance exchange. As readers will recall, exchanges are a key feature of the Affordable Care Act, because they’ll provide an online market that will enable individuals to obtain coverage.

According to Mr Consedine, CMS is failing to support a good law with the many regulatory details that turn a vague idea into a functioning reality. These failings include:

1. “Interim,” not “final” rules on eligibility, tax credit calculations, cost sharing and the role of brokers

2. Little formal guidance on the determination of the essential health benefit.

3. Delays in issuance of regulations on how states and Uncle Sam will split or mutually indemnify the myriad costs of the exchange and the Federal Data Hub.

Health Insurance Exchanges Work

Sep 20, 2012• 6

By Rich McKeown

The Salt Lake Tribune Editorial Board recently used strong words to criticize the Utah Health Exchange. Its perspective ran afoul of our firm’s recent experience with the Utah exchange, which has been overwhelmingly positive.

Like many small businesses, the triggering event for our involvement in the Utah Health Exchange was the appearance of our insurance broker who laid out a spreadsheet presenting a 22 percent increase in next year’s premium costs. Disappointed, we asked our broker to review other options.

The conventional market yielded quotes ranging from a 22 percent to a 134 percent increase. Ask any small business and you will learn that these increases come right out of employee compensation and, in many cases, new hires. Containing these costs, particularly in small businesses with small risk pools, has eluded the best minds in health care policy for decades.

We asked our broker to explore the Utah Health Exchange with vigor. We considered it last year, but the deadlines proved to be an obstacle for us. Our experience this year was remarkable and is instructive for states that object to state-created health insurance exchanges on the flimsy basis of their association with federal health reform.

The Utah Health Exchange started in August 2009 with the primary target of helping small businesses obtain health insurance for their employees. It was named an exchange before the fury over Obamacare tainted the concept.

The word “exchange” connotes the market freedom that is associated with activities like the New York Stock Exchange. The Utah Health Exchange is organized by state government, but driven by the market. What we found was a transparent system that created options for every individual employed by us and exemplified market principles, states’ rights and federalism.

App-Happy Health Care Full of Optimism, Money

Aug 2, 2012• 2

By Michael Millenson

There is a corner of the health care industry where rancor is rare, the chance to banish illness beckons just a few mouse clicks away and talk revolves around venture deals, not voluminous budget deficits.

Welcome to the realm of Internet-enabled health apps. Politicians and profit-seeking entrepreneurs alike enthuse about the benefits of “liberating data” – the catch-phrase of U.S. Chief Technology Officer Todd Park – to enable it to move from government databases to consumer-friendly uses. The potential for better information to promote better care is clear. The question that remains unanswered, however, is what role these consumer applications can play in prompting fundamental health system change.

Michael W. Painter, a physician, attorney and senior program officer at the Robert Wood Johnson Foundation, is optimistic. “We think that by harnessing this data and getting it into the hands of developers, entrepreneurs, established businesses, consumers and academia, we will unleash tremendous creativity,” Painter said. “The result will be improved and more cost efficient care, more engaged patients and discoveries that can help drive the next generation of care.”

The foundation is backing up that belief with an open checkbook. RWJF recently awarded $100,000 to Symcat, a multi-functional symptom checker for web and mobile platforms. Developed by two Johns Hopkins University medical students, the app determines a possible diagnosis far more precisely than is possible by just typing in symptoms as a list of words to be searched by “Dr. Google.” Symcat also links to quality information on different providers and can even direct users to nearby emergency care and provide an estimate of the cost.

The Case For the Exchanges

Jun 20, 2012• 42

By Maggie Mahar

The Federal government will push forward to establish health insurance exchanges regardless of how the Supreme Court rules on the Affordable Care Act in the weeks to come, argues THCB contributor Maggie Mahar. The only sensible conclusion? The states should accept Washington’s help and open up the market for insurance online.

The Affordable Care Act (ACA) calls on the states to create health insurance exchanges – marketplaces where individuals and small businesses can shop for and compare health insurance plans. Beginning in 2014, insurers peddling policies on an exchange will have to meet the ACA’s standards by covering “essential benefits,” capping out-of-pocket expenses for individuals, and offering more transparent information about costs and benefits.

Best of all, insurers will not be able to turn down customers suffering from chronic diseases, or charge them higher premiums.

So far so good.

But some states are attempting to derail “Obamacare.” Florida, Louisiana and Alaska have openly declared that they will have nothing to do with setting up exchanges. Last week, Politico.com reported that many others are stalling. The post quoted one consultant predicting that “between five and 10 states” will meet the 2014 deadline. The American Prospect confirmed the news, adding that some states that had begun making plans “have slowed down while awaiting the Supreme Court ruling on the health law.”

How The Affordable Care Act Will Affect Doctors

Jun 15, 2012• 25

By Tevi Troy

Just over two years ago, President Barack Obama signed the Affordable Care Act (ACA), a law purported to increase access to health care and to “bend down” the health care cost curve. A great debate over the implications of that law, especially in the areas of coverage, affordability, and quality of care, has arisen. Furthermore, a series of political and legal challenges have generated uncertainty about the law’s prospects within the health industry and at the state level. Despite this, the Department of Health and Human Services (HHS) has already issued over 12,000 pages of regulations elaborating on the original 2,700-page law, leading to more uncertainty regarding how appointed and career federal officials will determine the exact shape of the law’s final requirements. All of this uncertainty raises real concerns about how the new law will impact the most crucial actors in any health care reform effort: doctors.

Doctors are demonstrably nervous about the new law and how it will affect their incomes, their access to technologies, and their professional autonomy. According to a survey by the Doctors Company, 60 percent of physicians are concerned that the new law will negatively impact patient care. Only 22 percent are optimistic about the law’s impact on patient care. Fifty-one percent feel that the law will negatively impact their relationships with patients. These statistics raise questions about how and whether doctors will participate in the new system.

What The Emergence of an EMR Giant Means For the Future of Healthcare Innovation

Jun 11, 2012• 12

By David Shaywitz, MD

(Note: the following commentary was co-authored with Tory Wolff, a founding partner of Recon Strategy, a healthcare strategy consulting firm in Boston; Tory and I gratefully acknowledge the insightful feedback provided by Jay Chyung of Recon Strategy.)

Medicine has been notoriously slow to embrace the electronic medical record (EMR), but, spurred by tax incentives and the prospect of cost and outcomes accountability, the use of electronic medical records (EMRs) is finally catching on.

There are a large number of EMR vendors, who offer systems that are either the traditional client server model (where the medical center hosts the system) or a product which can be delivered via Software as a Service (SaaS) architecture, similar to what salesforce.com did for customer relationship management (CRM).

Historically, the lack of extensive standards have allowed hospital idiosyncrasies to be hard-coded into systems. Any one company’s EMR system isn’t particularly compatible with the EMR system from another company, resulting in – or, more fairly, perpetuating – the Tower of Babel that effectively exists as medical practices often lack the ability to share basic information easily with one another.

There’s widespread recognition that information exchange must improve – the challenge is how to get there.

One much-discussed approach are health information exchanges (HIE’s), defined by the Department of Health and Human Services as “Efforts to rapidly build capacity for exchanging health information across the health care system both within and across states.”

With some public funding and local contributions, public HIE’s can point to some successes (the Indiana Health Information Exchange, IHIE, is a leading example, as described here). The Direct Project – a national effort to coordinate health information exchange spearheaded by the Office of the National Coordinator for Health IT – also seems to be making progress. But the public HIEs are a long way from providing robust, rich and sustainable data exchange.

Awaiting the Court’s Decision on Healthcare

May 30, 2012• 13

By David Merritt

The Supreme Court has already decided the fate of the health reform law, and in a few short weeks the rest of us will know whether it is upheld, struck down entirely, or badly damaged. Of the possible decisions, four are the most likely and each would have significant ramifications.

1) The Court could uphold the law. Prior to oral arguments, this was the conventional wisdom. Justice Anthony Kennedy’s stinging questions led many to change this view, but he has surprised Court watchers before.

If he springs another surprise and supports the individual mandate, the law’s implementation would continue unabated. States that have waited for the Court’s decision would start moving on exchanges and essential benefits.

HHS would issue more regulations: on subsidies, employer penalties, insurance requirements, and others. However, it is common knowledge that many of the more controversial rules are being slow walked until after November 6th so as to not complicate President Obama’s reelection chances.

Upholding the law would certainly raise the stakes of the November elections. Should Democrats hold the Senate and/or President Obama win reelection, it’s likely the law would be permanently ensconced. On the other hand, should Republicans control the House and Senate and Governor Romney win the presidency, they will try to repeal the law or gut it through budget reconciliation before major provisions take effect in 2014.

But based on the “train wreck” of oral arguments, it seems unlikely that the law will escape the Court unscathed. It is more likely that the law will be damaged. The question is, to what extent?

What Is Causing Drug Shortages?

Mar 19, 2012• 3

By Michael F. Cannon

A number of people have asked me what is causing the current shortages in certain types of drugs. Here’s what I’ve been able to discern so far:

In general, there are two reasons why shortages might appear in a market. The first is high fixed costs. These include regulatory costs, the costs of converting a manufacturing plant to a new use, or the costs of creating a new factory. Industries with high fixed costs will see temporary shortages after either supply shocks (e.g., a factory goes offline) or demand shocks (e.g., an increase in the population needing a drug). The price mechanism eventually resolves such shortages. The duration of the shortage is related to the size of the fixed costs.

Shortages also appear when something interferes with the price mechanism’s ability to resolve a shortage. The classic example is government price controls (i.e., a binding price ceiling). Such shortages persist as long as the price controls (e.g., rent control) remain in place and binding.

From my study of the current spate of drug shortages, the best accounting for these shortages appears in this publication by the U.S. Department of Health and Human Services: “Economic Analysis of the Causes of Drug Shortages,” Issue Brief, October 2011.

I initially suspected these drug shortages were caused by Medicare’s Part B drug-payment system. Others, including Scott Gottleib and the Wall Street Journal, have made that claim. However, this study and a lengthy discussion with the U.S. Department of Health and Human Services’ assistant secretary for planning and evaluation have persuaded me that not only is Medicare’s Part B drug-payment system not the cause, that system doesn’t even impose binding price controls. Rather, it controls the margins that physicians earn for administering a drug. (If Medicare did impose binding price controls, would we see mark-ups of 650 percent or more for the shortage drugs?)

Rather, the shortages appear to be the result of a number of dynamics in the market for rare drugs:

Why States Should Move Forward with Health Insurance Exchanges

Mar 16, 2012• 19

By David Merritt

Imagine that you’re being required to buy a car. You will have to pay for most of it, but you can’t choose exactly what you want. There are so many restrictions on your options that you’re forced to choose from a few used, four-cylinder, two-door sedans with manual transmissions. And there’s one more catch: If you don’t choose one yourself, the dealer will decide for you.

It’s not an enviable position to be in, but most of us would grudgingly decide that if we have to get one of the cars, it’s better to have a small say in what we get than to have someone else decide for us.

This is the same predicament that many state policymakers find themselves in regarding the creation of health insurance exchanges.

Health insurance exchanges are a key part of the health reform law. Supporters argue that exchanges will provide consumers with valuable information on their coverage options, while at the same time providing stricter regulation of health insurers. They are also the only way people can benefit from the lavish subsidies included in the law.

On Monday, the Department of Health and Human Services released a final rule governing the exchanges. The rule sets an ambitious timeline for getting the exchanges up and running in every state by January 1, 2014. Between now and then, states can either build their own exchanges and tailor them as much as federal law will allow or decide not to build exchanges at all.

But there’s a catch: If states don’t build their own exchanges, the federal government will do it for them.

If HHS Delays ICD-10 Long Enough, Could the U.S. Adopt ICD-11 Instead?

Feb 19, 2012• 1

By Tom Sullivan

The case for leapfrogging ICD-10 and holding out for ICD-11 just got a lot more curious. And though it’s not here yet, when ICD-11 is ready, it will be something ICD-10 cannot: A 21st Century classification system.

Now that HHS Secretary Kathleen Sebelius has thrown her department’s hat in the ring, saying late Wednesday that HHS intends to delay ICD-10, the most pertinent question is how long will HHS push back compliance?

“My opinion is that CMS won’t be able to announce three months or six months of delay for ICD-10,” says Mike Arrigo, CEO of consultancy No World Borders (pictured at left). “They will need to announce a delay from October 1, 2013 to at least October 1, 2014 because of CMS fiscal planning calendars.”

Others in the industry are suggesting that even one year is not enough to lighten the burden on physicians, providers and payers enough to make the transition smoother.

“I have a gut feeling they’ll go for two years, who knows?” speculates Steve Sisko, an analyst and technology consultant focused on payers and ICD-10. “Maybe January 2015?”

No more mixed signals

There it is on the Department of Health and Human Services Web site, a crystal-clear headline atop a brief explanatory statement: HHS announces intent to delay ICD-10 compliance date.

“We have heard from many in the provider community who have concerns about the administrative burdens they face in the years ahead,” Sebelius said in the statement. “We are committing to work through the rulemaking process, with the provider community, to reexamine the pace at which HHS and the nation implement these important improvements to our healthcare system.”