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Tag: Ken Terry

Long-Term Telehealth Expansion Should Be Planned Intelligently

By KEN TERRY

Telehealth has been a lifeline for many doctors and patients during the pandemic, and the decisions of CMS and many private payers to cover telehealth visits—in some cases, at full parity with in-person visits–has helped physician practices stave off bankruptcy. Assuming that these policies remain in effect after the pandemic, I agree with the commentators who assert that telemedicine will become a much larger part of healthcare.

Nevertheless, what that means is still far from clear. To begin with, telehealth visits may be adequate for some purposes but not for others. Historically, the technology has been used mostly for diagnosing and treating minor acute problems. Physicians were generally reluctant to take on more complex cases or treat chronic conditions without seeing patients in person.

Pre-pandemic, most telehealth encounters took place between patients and doctors who had never treated them before, using services such as Teladoc, American Well and Doctor on Demand that usually didn’t communicate with the patients’ personal doctors. Some larger physician groups had begun to use the technology with their own patients; but even in those groups, certain doctors were often assigned to conduct virtual visits with patients who were not necessarily their own.

Clearly, the latter barrier has been broken down, with nearly half of U.S. physicians in an April survey saying they were using telemedicine in patient care. While it’s unclear what kinds of cases these doctors are diagnosing and treating, it’s likely that the scope of practice for telehealth has been expanded to include some chronic disease care.

The main barrier to this expansion is that, in telehealth encounters, physicians don’t necessarily have the data they need to make sound medical decisions. To manage hypertension, for instance, the physician needs to be able to measure a patient’s blood pressure. If the patient has a digital blood pressure cuff at home, that data can be transmitted to a physician’s office; in fact, a smartphone app could show the trend of the patient’s hypertension over time. Right now, however, only a small fraction of patients have this kind of remote monitoring equipment.

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Primary Care Practices Need Help to Survive the COVID-19 Pandemic

Ken Terry
Paul Grundy

By PAUL GRUNDY, MD and KEN TERRY

Date: June 20, 2022.

The Smithsonian National Museum of Natural History has reported its biggest number of visitors in more than 2 ½ years. There’s a string of new Broadway musicals that are well-attended every night. It’s safe to shop in malls, eat out in restaurants and go to movie theaters again.

Of course, this has all been made possible by an effective vaccine against COVID-19 that was widely administered in the fall of 2021. Vaccinated citizens of the world are now confident that it’s safe to go out in public, albeit with appropriate precautions.

However, U.S. residents who have health problems are facing a new challenge. Five years ago, in 2017, the median wait time of new patients for doctor appointments was six days. In 2022, the wait time is six months or more.

The reason for this is no mystery. While life has started to return to what we think of as the new normal, the U.S. healthcare system has taken an enormous financial hit, and primary care practices have been especially affected. Many primary care physicians have closed their practices and have retired or gone on to other careers. Consequently, the shortage of primary care has been exacerbated, and access to doctors has plummeted. Urgent care centers, retail clinics and telehealth have not filled this gap.

Because of the long waiting times for primary care appointments, many more people now seek care in emergency departments (EDs). The waiting rooms of these EDs are overcrowded with people who have all types of complaints, including chronic and routine problems as well as emergencies. And this is not just a common sight in inner-city areas, as it once was; it’s now the same pretty much everywhere.

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How Will COVID-19 Change the Health Care Balance of Power?

By KEN TERRY

In any economic disaster, the largest, best-financed organizations have a natural advantage over smaller, cash-strapped organizations. The bigger entities have a greater ability to withstand economic downturns, while the small ones can quickly go out of business because they lack the financial reserves needed to tide them over.

In the roughly 2 ½ months since the COVID-19 pandemic began sinking its hooks into America, the pertinence of this business axiom has been amply illustrated. Small companies across the country are desperate to reopen so they can survive, while many large corporations are seeing their stock prices soar. Most healthcare systems are not for profit, so they don’t issue stock; yet bigger hospitals are not suffering as much financially as smaller and rural hospitals are. Even though the large hospitals’ losses from elective surgery bans have been higher, they have much deeper reserves and greater access to bank lines of credit.

Physician practices have been hit disproportionately by the pandemic. Most practices have switched to telemedicine visits as patients have shunned in-person encounters and the offices have tried to protect their staffs. But the revenue from virtual encounters has not come close to making up for the loss of revenues from office visits that, in many cases, include lab tests and/or minor procedures.

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The Official Estimates of COVID-19 Deaths Are Way Too Low

By KEN TERRY

While President Trump mulls whether to reopen the country again in May, and as Fox & Friends host Brian Kilmeade suggests that “only” 60,000 people will die from the coronavirus, there are some warning signs that the White House COVID-19 Task Force’s prediction of 100,000-240,000 deaths may be way too low.

That isn’t surprising, considering that Administration officials said this projection depended on us doing everything right. Of course, it appears that large sections of the country have done many things wrong—whether it’s Florida Governor Ron DeSantis’ reluctance to close houses of worship or the refusal of several state governors to issue stay at home orders. That doesn’t include Trump’s own refusal to admit the seriousness of the COVID-19 outbreak until mid-March and the continuing failure of the federal government to ensure an adequate supply of test kits, PPE and ventilators.

So here’s what all of this may be leading up to: a minimum of 600,000 COVID-related deaths in the U.S. over the next two years.

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Providers Don’t Take Enough Risk to Bend the Cost Curve

By KEN TERRY

Back in 2015, 20 major health systems and payers pledged to convert 75% of their business to value-based arrangements by 2020. Today, more than two-thirds of payments from U.S. commercial health insurers are tied to some kind of value-based model. By 2021, the health plans expect three-quarters of their payments will be value-based.

However, a recent analysis of Change Healthcare data by Modern Healthcare found that the percentage of value-based revenue tied up in upside/downside risk contracts was in the single digits. Among the types of two-sided risk contracts that provider organizations had were capitation or global payment (7.3%), pay for performance (6.5%), prospective bundled payment (5%), population-based payment (5.8%), and retrospective bundled payment (4.1%).

An AMGA survey picked up signs of a recession in risk contracting in 2016. A year earlier, survey respondents—mostly large groups–had predicted their organizations would get 9 percent of revenue from capitated products. In 2016, the actual figure was 5 percent, according to a Health Affairs post by the AMGA’s Chet Speed and the late Donald Fisher.

The authors cited a number of obstacles to the spread of risk contracting, including “limited commercial value-based or risk-based products in their local markets; the inability to access administrative claims data from all payers; the massive administrative burden of submitting data in different formats to different payers; lack of access to investment capital; and inadequate infrastructure.”

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Medicare for All and Industry Consolidation

By KEN TERRY

Far more attention has been devoted to the ways in which industry consolidation has driven up health costs than to proposals on how to remedy the situation. But the introduction of Medicare for All and Medicare for More bills—however dim their short-term prospects are—has changed the terms of the debate. It is time to think about how we can eliminate the market power of health systems without causing harmful dislocations in health care and the economy.

Before we get to that, here are the main facts about consolidation: As a handful of health insurers have become dominant in many markets, health systems have done likewise in order to maintain or improve their negotiating positions. That has proved to be an effective strategy in many cases. Even dominant health plans cannot do without the largest hospital systems in their areas, especially when they employ many of the local physicians.

According to a Kaufman Hall report, 90 hospital and health system deals were publicly announced in 2018. This was a decline from the 115 deals unveiled in 2017, but the average size in the revenue of sellers hit a high of $409 million.

The biggest provider mergers are staggering in scale. In February 2019, for example, Catholic Health Initiatives and Dignity Health formed a new organization called CommonSpirit Health, which has 142 hospitals, 150,000 employees and nearly $30 billion in revenues. The union of Chicago-based Advocate Health Care and Wisconsin’s Aurora Health Care in April 2018 created a giant with 27 hospitals and $11 billion in revenues. A month later, Atrium Health (formerly Carolinas Healthcare System) joined with Wake Forest Baptist Health to form a system with 49 hospitals and combined revenues of $7.5 billion.

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Are Bipartisan Agreements on Health Care Possible?

By KEN TERRY 

Republicans and Democrats are seen as poles apart on health policy, and the recent election campaign magnified those differences. But in one area—private-sector competition among healthcare providers—there seems to be a fair amount of overlap. This is evident from a close reading of recent remarks by Health and Human Services Secretary Alex Azar and a 2017 paper from the Brookings Institution.

Azar spoke on December 3 at the American Enterprise Institute (AEI), the conservative counterpart to the liberal-leaning Brookings think tank. Referring to a new Trump Administration report on how to reduce healthcare spending through “choice and competition,” Azar said that the government can’t just try to make insurance more affordable while neglecting the underlying costs of care. “Healthcare reform should rely, to the extent possible, on competition within the private sector,” he said.

This is pretty close to the view expressed in the Brookings paper, written by Martin Gaynor, Farzad Mostashari, and Paul B. Ginsburg. “Ensuring that markets function efficiently is central to an effective health system that provides high quality, accessible, and affordable care,” the authors stated. They then proposed a “competition policy” that would require a wide range of actions by the federal and state governments.

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The MSSP Is No Silver Bullet for Healthcare Cost Control

But ACOs could pave the way for more significant cost-cutting based on competition.

By KEN TERRY

The Medicare Shared Savings Program (MSSP), it was revealed recently, achieved a net savings of $314 million in 2017. Although laudable, this victory represents a rounding error on what Medicare spent in 2017 and is far less than the growth in Medicare spending for that year. It also follows two years of net losses for the MSSP, so it’s clearly way too soon for anyone to claim that the program is a success.

The same is true of accountable care organizations (ACOs). About a third of the 472 ACOs in the MSSP received a total of $780 million in shared savings from the Centers for Medicare and Medicaid Services (CMS) in 2017 out of the program’s gross savings of nearly $1.1 billion. The other MSSP ACOs received nothing, either because they didn’t save money or because their savings were insufficient to qualify them for bonuses. It is not known how many of the 838 ACOs that contracted with CMS and/or commercial insurers in 2016 cut health spending or by how much. What is known is that organizations that take financial risk have a greater incentive to cut costs than those that don’t. Less than one in five MSSP participants are doing so today, but half of all ACOs have at least one contract that includes downside risk.

As ACOS gain more experience and expand into financial risk, it is possible they will have a bigger impact. In fact, the ACOs that received MSSP bonuses in 2017 tended to be those that had participated in the program longer—an indication that experience does make a difference.

However, ACOs on their own will never be the silver bullet that finally kills out-of-control health spending. To begin with, 58 percent of ACOs are led by or include hospitals, which have no real incentive to cut payers’ costs. Even if some hospitals receive a share of savings from the MSSP and/or private insurers, that’s still a drop in the bucket compared to the amount of revenue they can generate by filling beds instead of emptying them. So it’s not surprising that physician-led ACOs are usually more profitable than those helmed by hospitals.

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