Tag: Insurers

What Exactly Are Insurers Canceling? And Why?

Dec 23, 2013• 2

By THCBist

A THCB reader in New York writes in:

There is one aspect of the ACA that isn’t being discussed a lot, but is pertinent to the future landscape of health care in this country — the extent to which the ACA is causing a sort of reset, or wiping of the slate, when it comes to insurance policies and procedures.

Previously, there were multiple insurers and multiple policies, many of which had been around for a long time. If an insurer wanted to suddenly change providers in its network, ratchet down provider reimbursement, alter covered procedures or make other adjustments, this was feasible, but too much of a change would entail an outcry limiting insurers’ freedom of action. The overall system had a certain air of stability or inertia, making any changes stand out, any big changes cause for scrutiny and possibly rebellion.

Now, with the ACA, everything is being tossed up in the air and when things land, much can and will be different. Some changes are mandated by the ACA, such as minimum coverage, and insurers are cancelling inadequate policies, substituting very different ones. But even when a policy doesn’t need to be changed, insurers will justify change by pointing to the ACA.

“Given the requirements of the ACA, we must make certain changes to your policy. In particular…”

We are at the beginning of a totally new insurance landscape, even if most of the insurers remain the same. The public has been primed to expect major change and insurance companies will certainly make use of this expectation.

The result is likely to be more restrictive networks, decreased reimbursements to providers and other measures to limit cost. Everything is now up for grabs.

If you have questions about the Affordable Care Act or your buying insurance on the federal state exchanges, drop us a a note. We’ll publish the good submissions.

Understanding the Hospital Consolidation Numbers: The Centrality of Data Quality

Sep 17, 2013• 9

By Bruce Levinson

Is hospital consolidation creating new efficiencies or does it give health care providers clout over health care insurers? A well-publicized study published in Health Affairs last year by Robert Berenson, Paul Ginsburg, et. al said the latter: hospital consolidation has resulted in “growing provider market clout.”

The Berenson study’s key conclusion is that growing hospital clout has resulted in insurers not aggressively containing their claims payments, a view that will stun every patient who has had a health insurance company deny coverage for a procedure, prescription or preferred health care provider.

Because the Berenson study’s finding are counterintuitive to consumer experience, and because they have been widely discussed in publications ranging from Forbes to National Journal, the Center for Regulatory Effectiveness, a regulatory watchdog with extensive experience in analyzing federal health policies, undertook an analysis to see if the study complied with the Data Quality Act (DQA).

The DQA, administered by the White House Office of Management and Budget (OMB), sets standards for virtually all data disseminated by the agencies. Under the DQA, agencies may not use or rely on data in federal work products (reports, regulations) which don’t comply OMB’s government-wide Data Quality standards. Thus, unless the Health Affairs study complies with federal Data Quality standards, it is useless to Executive Branch policy officials.

The primary data source cited by the Berenson study as the basis for their conclusions regarding trends in relative clout between hospitals and health insurers is a well-respected, longitudinal tracking study which included interviews with heath care leaders from insurance companies, hospitals, and academia. The health care interviews, however, were only conducted in a single year following a change in longitudinal study’s methodology.

Will Your Health Insurer Pay to Train Your Doctor?

Apr 16, 2013• 8

By John Schumann, MD

Lost in the weeds of President Obama’s budget proposal is a 10-year, $11 billion reduction in Medicare funding for graduate medical education (GME). GME is the “residency” part of medical training, in which medical school graduates (newly minted MDs and DOs) spend 3-7 years learning the ropes of their specialties in teaching hospitals across the country.

Medicare currently spends almost $10 billion annually on GME. One-third of that is for “Direct Medical Education” (DME), which pays teaching hospitals so that they in turn can provide salaries and benefits to residents (current salaries average around $50,000/year, regardless of specialty; there are variances by region). No problem there.

The proposed cuts come from the Medicare portion known as “Indirect Medical Education” (IME) payments. Though IME accounts for two-thirds of the Medicare GME pie, it’s not easy for hospitals to itemize what exactly it is they provide for this significant amount of funding. Instead, hospitals bill Medicare based on a complex algorithm that includes the ‘resident-to-bed’ ratio, among other variables.

A 2009 Rand Corporation study commissioned by Medicare to evaluate aspects of residency training called on the government to tie IME payments directly to improvements in educational and hospital quality, lest the money be perceived to be going down a series of non-specific sinkholes. That idea has caught on, and legislators in both parties now see the healthy IME slice of Medicare education funding as a plum target for cost-cutting, as the direct benefits are difficult to enumerate, let alone quantify.

This has medical educators very worried that we will have to do more with much less (disclosure: I am one).

Why Disease Management Won’t Be Going Away Any Time Soon

Apr 2, 2013• 4

By Jaan Sidorov, MD

We’re all aware of the past criticisms of “disease management.” According to the critics, these for-profit vendors were in collusion with commercial insurers, relying robo-calls to blanket unsuspecting patients with dubious advice. Their claims of “outcomes” were based on flawed research that was never intended to be science; it was really intended to market their wares.

But suppose this correspondent alerted you to:

1. A company that had developed a patient registry to identify at-risk patients who had not received an evidence-based care recommendation? Software created mailings to those patients that not only informed them of the recommendation but offered them a toll-free number to call if there were questions. Patients who remained non-compliant were then called by coordinators, who made three attempts to contact the patient and assist in any scheduling needs. If necessary, a nurse was available to telephonically engage patients and develop alternative care options.

If you think that sounds like typical vendor-driven telephonic disease management, you’d be right. You’d also be describing an approach to care that was studied by Group Health Cooperative using their electronic record, medical assistants and nurses. When it was applied to colon cancer screening, a randomized study revealed each additional level of support progressively resulted in statistically significant screening rates.

The Radical Rethinking of Primary Care Starts Now

Mar 7, 2013• 10

By Dan Diamond

In November 2008, the New England Journal of Medicine convened a small roundtable to discuss “Redesigning Primary Care.”

U.S. primary care is in crisis, the roundtable’s description reads. As a result … [the] ranks are thinning, with practicing physicians burning out and trainees shunning primary care fields.

Nearly five years out — and dozens of reforms and pilots later — the primary care system’s condition may still be acute. But policymakers, health care leaders and other innovators are more determined than ever: After decades where primary care’s problems were largely ignored, they’re not letting this crisis go to waste.

Ongoing Shortage Forcing Decisions

The NEJM roundtable summarized the primary care problem thusly: Too few primary care doctors are trying to care for too many patients, who have a rising number of chronic conditions, and receive relatively little compensation for their efforts.

About Time? Smokers Face Tough New Rules Under Obamacare

Jan 25, 2013• 105

By Dan Diamond

The Affordable Care Act contains a number of provisions intended to incent “personal responsibility,” or the notion that health care isn’t just a right — it’s an obligation. None of these measures is more prominent than the law’s individual mandate, designed to ensure that every American obtains health coverage or pays a fine for choosing to go uninsured.

But one provision that’s gotten much less attention — until recently — relates to smoking; specifically, the ACA allows payers to treat tobacco users very differently by opening the door to much higher premiums for this population.

That measure has some health policy analysts cheering, suggesting that higher premiums are necessary to raise revenue for the law and (hopefully) deter smokers’ bad habits. But other observers have warned that the ACA takes a heavy-handed stick to smokers who may be unhappily addicted to tobacco, rather than enticing them with a carrot to quit.

Under proposed rules, HHS would allow insurers to charge a smoker seeking health coverage in the individual market as much as 50% more in premiums than a non-smoker.

That difference in premiums may rapidly add up for smokers, given the expectation that Obamacare’s new medical-loss ratios already will lead to major cost hikes in the individual market. “For many people, in the years after the law, premiums aren’t just going to [go] up a little,” Peter Suderman predicts at Reason. “They’re going to rise a lot.”

Meanwhile, Ann Marie Marciarille, a law professor at the University of Missouri-Kansas City, adds that insurers have “considerable flexibility” in how to set up a potential surcharge for tobacco use. For example, insurers could apply a high surcharge for tobacco use in older smokers — perhaps several hundred dollars per month — further hitting a population that tends to be poorer.

Is this cost-shifting fair? The average American tends to think so.

The Hoax of Entitlement Reform

Jan 8, 2013• 41

By Robert Reich

It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”

But the accepted wisdom is wrong.

Start with the statistics Republicans trot out at the slightest provocation — federal budget data showing a huge spike in direct payments to individuals since the start of 2009, shooting up by almost $600 billion, a 32 percent increase.

And Census data showing 49 percent of Americans living in homes where at least one person is collecting a federal benefit – food stamps, unemployment insurance, worker’s compensation, or subsidized housing — up from 44 percent in 2008.

But these expenditures aren’t driving the federal budget deficit in future years. They’re temporary. The reason for the spike is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression. They and their families have needed whatever helping hands they could get.

If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically, including 22 percent of our children.

What about Social Security and Medicare (along with Medicare’s poor step-child, Medicaid)?
Continue reading…

Doctors, Patients, or Insurers? Who Will Shape Health Care?

Jul 29, 2012• 1

By Davis Liu, MD

At a conference for America’s Health Insurance Plans, Gladwell argued that patients or consumers have been unable to be more empowered because doctors, as the intermediary, held the power of knowledge much the same way chauffeurs did for the early days of the automobile and Xerox technicians did in the early days of photocopying. A person was needed to guide and assist the individual to get the job done. At some point, however, the technology became simpler. People began to drive their own cars and make their own photocopies. The mystique of the chauffeur and technician was lifted. Now everyone could drive. Everyone could make photocopies.

Is it possible that for health care and the health care system, which for many people is a system they interact with rarely and in an area (health / illness) where the uncertainty and stakes many be too “high”, that individuals willingly defer the responsibility to someone else? Gladwell hints that might be a possibility:

“A key step in any kind of technological transition is the acceptance of a temporary deficit in performance at the beginning in exchange for something else,” said Gladwell. That something else can eventually include increased convenience and lower cost. He offered a number of examples, including the shift to digital cameras where early pictures were not as good as film and the advent of the digital compression of music, which he contends has made the quality of music worse….

Health Care and Constitutional Chaos

May 28, 2012• 2

By Eric Segall & Aaron E. Carroll

The Supreme Court’s decision on the constitutionality of the Affordable Care Act (ACA) will likely be handed down on the last day of this year’s term. If the Court finds that the ACA—either in whole or in part—violates the Constitution, the health care industry will be shaken to its core. And, no matter what legal justification the Court uses to invalidate the ACA, the structure of constitutional law will be severely undercut. The resulting medical and legal chaos will be expensive, divisive, and completely unnecessary. Nothing in the text, history or structure of the Constitution warrants the Court overturning Congress’s effort to address our national health care problems.

For the health care industry, a decision striking down the entire ACA would be an absolute disaster. Physicians, hospitals, and private companies have been shifting how they practice medicine in anticipation of the ACA’s implementation. They’ve been creating accountable care organizations,^[1] envisioning a significant reduction in uncompensated care, and enjoying increased Medicare and Medicaid reimbursement in primary care settings.^[2] That will all vanish if the ACA is struck down. Moreover, seniors will pay more for prescription drugs and young adults will be taken off their parents’ insurance. The private insurance industry, which has seen its market shrink significantly over the last decade,^[3] will see a real chance to reverse that trend disappear. According to one estimate, if the ACA is overturned, insurers may lose over $1 trillion in revenues between 2013 and 2020.^[4]

Making Sense of Health Care Prices

Sep 23, 2011• 43

By JOHN GOODMAN

Take a look at the chart below. It shows representative prices for a knee replacement for different patients in different settings. The most shocking thing about the chart is that prices for essentially the same procedure are all over the map. Here are some obvious questions:

Why is the price of a knee replacement for a dog — involving the same technology and the same medical skills that are needed for humans — less than 1/6th the price a typical health insurance company pays for human operations? Why is it less than 1/3 of what hospitals tell Medicare their cost of doing the procedure is?
How is a Canadian able to come to the United States and get a knee replacement for less than half of what Americans are paying?
How are Canadians getting knee replacements in the U.S. able to pay only a few thousand dollars more than medical tourists pay in India, Singapore and Thailand — places where the price is supposed to be a fraction of what we typically pay in this country?
Why do fees U.S. employers and insurance companies are paying vary by a factor of three to one, when foreign, and even some U.S., facilities are offering a same-price-for-all package?

It’s amazing how often people cannot see the forest for the trees. Think how many volumes have been written trying (and failing) to explain why our health care costs are so high. Sometimes the answers to complex questions are more easily found by asking the simplest of questions.