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The Positive Impact of New Wage Protections on Home Health Agency Bottom Lines

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By JEFFREY GROSSMAN

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In January 2016, the Department of Labor (DOL) officially extended federal wage protections to home care workers under the Fair Labor Standards Act, entitling them to the federal minimum wage, time-and-a-half pay for overtime, and pay for time spent traveling between clients. Predictably, lobbyist groups working on behalf of home care agencies have petitioned the Supreme Court to upend the new regulation. Their petition currently sits in limbo while the eight-member Court delays its’ consideration (presumably in fear of an unproductive 4-4 voting split while awaiting the confirmation of a ninth Justice). In the interim, those hoping for a review should consider the positive impacts of the new regulation and the opportunities it presents.

While on the surface this unfunded government mandate hurts home health agencies struggling to offer care within already slim Medicaid reimbursement margins, there is also a business case for increasing wages. First, increased wages will help entice new workers to the field, enabling agencies to care for more patients. Presently the median hourly wage for home care workers is $9.38[1], compared to the median for refuse collectors at $15.52 and parking enforcement workers at $16.99. While caregivers are often driven by a passion for their work, relatively low wages force many to look elsewhere. With higher pay, agencies should see an immediate impact on their ability to recruit new employees and increase revenue through improved bandwidth.

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More Than Adequate

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By KOFI JONES

CMS recently unveiled a massive regulatory overhaul of Medicaid managed care requirements. Despite the fact that it’s being called a “mega-reg,” and taking some heat for its 1400+ page size, there’s certainly some interesting reading contained within, particularly for the telehealth community.

It’s all about network adequacy standards.

Health plans are regulated by states or CMS and measured based on their ability to demonstrate the adequacy of their in-network providers. How many are there? What’s the availability by specialty? Do consumers understand which providers are in-network? What does access look like in terms of wait times and distance? Answering these questions are the key to meeting the standard.

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2014 A Healthcare Odyssey

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By SAURABH JHA, MD 

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It might have been the best of times. It could have been the worst of times. But 2014 turned out to be the most mediocre of times. Here’s a recap.

Why did Sebelius resign?

Never make a promise to your kids that you can’t keep. And never project the number of people who will sign up for the exchanges and change your mind, unless you are the CBO. If you have read about the problem of uninsured in the US you might have considered CBO’s original projection that seven million people will sign up on the exchanges within six months of open enrollment a tad conservative. Weren’t there millions and millions, forty million apparently, gagging for healthcare coverage?

The CBO revised the projection to six million in February with the projection date of March 31st coming tantalizingly close. Towards the end of March you could hear the cheers of “roll baby, enroll” getting louder.

On April Fools’ Day, the ACA remained intact, the country had not descended in to civil war and some eight million had signed up for Obamacare.

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The FY15 Budget: There’s More to it Than the Numbers

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By PAUL KECKLEY

Paul KeckleySaturday, the U.S. Senate passed the House-sponsored Omnibus Appropriation Bill that funds the federal government through September 2015. In all likelihood, all eyes weren’t glued to these proceedings, perhaps otherwise attentive to holiday shopping or the events around nationwide protests about policing in our cities.

Healthcare is a huge part of the federal budget: combining spending for Medicare, Medicaid, Children Health Insurance Program (CHIP), military and veterans’ health, Indian Health Services and federal employee health benefits, it represents 35% of the total $3.9 trillion budget. For the decade prior to the economic downturn, total health spending increased 7.2% annually. During the downturn, it slowed to less than 4% but is expected to increase to 6% annually for the decade ahead. That means healthcare spending will be an even bigger part of federal budgets going forward.

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Medicaid 2.0

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By CECI CONNOLLY

Ceci ConnollyWhile fierce debate continues to envelop much of the Affordable Care Act, financial data for many of the nation’s health systems reveal one clear fact: the optional Medicaid expansion has resulted in hospital haves and have nots.

An analysis by PwC’s Health Research Institute (HRI) of newly released earnings and patient volume data shows a clear financial split between healthcare providers operating in states that expanded Medicaid and those that have not. The law as written would have provided Medicaid coverage to every American earning less than 138% of the federal poverty level ($16,105 for an individual). But a June 2012 Supreme Court ruling made the expansion optional for states, creating a patchwork of coverage.

Health systems and physician groups delivering care in the 26 states and the District of Columbia that have embraced the federally-funded expansion have reported a significant rise in patient volumes and paying consumers and a measureable reduction in uncompensated care levels.

This year alone LifePoint Hospitals has seen a 30.3% reduction in its uninsured and charity care patients, according to filings with the Securities and Exchange Commission. Tenet Healthcare, which operates in five Medicaid expansion states, saw uninsured and charity care admissions decline by 46% in the expansion states, coupled with a 20.5% increase in Medicaid inpatient admissions in those same states, according to an HRI analysis which will be released next week.

In all, HRI analyzed financial data from the nation’s five largest for-profit health systems—HCA Holdings, LifePoint, Tenet, Community Health Systems and Universal Health Services, representing 538 hospitals in 35 states. Our team also reviewed data from several mid-sized hospitals, government reportsand industry surveys.

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Churn and the ACA

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By HEATHER HOWARD

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Prior to the Affordable Care Act (ACA), with 47 million Americans uninsured, advocates and policy experts focused on expanding health insurance coverage for those who lacked it. Now that the law has broadened access to insurance, states are turning their attention to protecting enrollees from disruptions when they transition from one type of coverage to another, movement known as churn.

Churn is typically caused by a change in eligibility status, which itself stems from fluctuations in income, loss of a job, or changes in family circumstance, such as pregnancy. Short of a system, such as single-payer, where people may stay on the same plan for most of their lives, churn is inevitable. Indeed, in our fragmented health insurance system, millions of people naturally churn over the course of a given year, moving from employer-provided insurance to private insurance, or from private insurance to Medicaid, and so on. At low income levels, employment is particularly unstable, leading to high levels of churn among that population. For example, a newly-eligible Medicaid beneficiary (in an expansion state) who experiences a change in income over the course of a year—such as picking up an extra retail job during the holiday season—may lose his or her Medicaid eligibility as a result. Switching over to the exchange for new coverage could mean a totally different network of doctors, new drug formularies, and higher premiums and cost-sharing, not to mention the complexity and burden of going through a new and different enrollment process.

Is the ACA to blame for churn?  No—in fact, the ACA directly reduces one form of churning, and offers tools to mitigate the impact of other forms. Before the ACA, millions churned off insurance coverage for all the reasons mentioned above. And after losing coverage, many people—especially those with preexisting conditions—found it hard, if not impossible, to get it back. Because the ACA makes the individual health insurance market more accessible and affordable, the law creates a new culture of coverage with a continuum of options, and actually cuts down on churning into uninsured status.

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EMR Data Shows Medicaid Gap Widening Between Expansion and Non-Expansion States

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By IYUE SUNG and JOSH GRAY

In measuring the effects of health insurance coverage expansion as part of our ACAView initiative with Robert Wood Johnson Foundation (RWJF), an important factor to consider is state policy towards Medicaid expansion.

The intention of the Affordable Care Act (ACA) was to expand coverage through two mechanisms: 1) People with moderate incomes could gain coverage through the exchanges, often encouraged by subsidies; and 2) those with lower incomes could gain coverage through an expansion of Medicaid eligibility to include groups that had not traditionally qualified for Medicaid.

For many years, states had widely varying Medicaid eligibility rules, with some states covering only women and their children in need of public aid and low-income people with disabilities. Other states had expanded eligibility to include people at income levels higher than the federal poverty level.

Given the differing Medicaid expansion decisions among states, we examined our data on visits to primary care physicians (PCPs) separately for states with and without Medicaid expansion.

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Figure 1 shows proportions of visits between January 2012 and May 2014 for four groups of adults (18-64): uninsured individuals in Medicaid-expansion states; uninsured individuals in non-Medicaid expansion states; Medicaid beneficiaries in expansion states; and Medicaid beneficiaries in non-expansion states.

Two observations are worth noting:

    1. ACA coverage expansion appears to be widening a pre-existing gap between states that have elected to pursue Medicaid expansion and those that have not. Providers in the Medicaid-expansion states were already seeing higher proportions of Medicaid beneficiaries in 2013. For example, in December of 2013, 12.3% of 18-64 year- old visits to PCPs in expansion states were from Medicaid beneficiaries, compared with 5.9% in non-expansions states, a 6.4 percentage point differential. By May 2013, that difference had expanded to a 9.3 percentage point differential, as the percent of Medicaid visits increased in Medicaid expansion states but held constant in non-expansion states.
    2. The proportion of uninsured fell in both categories, from 4.5% to 3.3% in expansion states and 7.0% to 5.8% in non-expansion states (figures for January through May for both years, respectively).

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Figure 2 expands the Medicaid payer mix analysis to other specialties.

In Medicaid expansion states, all four specialty types showed a substantial increase in the proportion of visits by Medicaid beneficiaries. In contrast, in non-Medicaid expansion states, the proportion of visits by Medicaid beneficiaries decreased for all four specialty groups.

As a result of these changes, by early 2014 PCPs, surgeons, and other specialists in expansion states saw two to three times more adult Medicaid patients (in proportional terms) than in non-expansion states (for example, 15.6% versus 6.3% for PCPs; 11.6% versus 3.1% for surgeons).

For OB-GYN, the ratio between the proportion of visits by Medicaid beneficiaries in the expansion and non-expansion states is much smaller, 19.4% versus 13.4%. This may reflect more generous Medicaid eligibility in non-expansion states for pregnant women compared to other adults.

As we monitor these metrics, a few questions will be of particular interest:

  • Where will the increase in Medicaid volumes in expansion states level off?
  • To what extent is the increase in Medicaid visits driven by established patients who were previously uninsured?
  • What are the effects of increased Medicaid volumes on medical practices?

We will attempt to address these (and other) complex issues throughout the year.

For a better understanding of our goals, methodology, data sample size, and full findings since the inception of the ACAView series, please read our first report, “First Observations Around the Affordable Care Act.”

The Conservative’s Faustian Fear

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By Saurabh Jha, MD

Avik Roy has done the unthinkable. In a recent op-ed title he used “conservative’s case” and “universal healthcare” in the same sentence. And bridged these disparate words by the preposition for.

Spoiler alert: Roy has asked Republicans to embrace universal healthcare.

The Twitterverse is abuzz. An angry Gary P. Jackson, a self-affirmed conservative, tweeted:

“there is NEVER a conservative case for Marxism….especially Universal healthcare.”

Stated differently, universal healthcare is the worst form of Marxism except for all other forms of Marxism.

Thus far Roy has not been asked to produce his birth certificate, which is just as well. Roy, a prolific Forbes columnist and a scholar at the Manhattan Institute, was healthcare policy adviser to Mitt Romney. He is not a cheerleader of the Affordable Care Act.

There are things one may disagree with Roy. However, his short treatise, How Medicaid Fails the Poor, was impressive, as it deftly dealt with Medicaid’s structural problems. That a right-of-center policy analyst would write a book with that title is one of the many ironies I am now accustomed to encountering (the other delicious irony was the love of Cadillac health plans by unions).

In The Washington Examiner and National Review Online, Roy urges conservatives to acknowledge and embrace universal healthcare, in no uncertain terms:

“…[conservatives] have to agree that universal coverage is a morally worthy goal.”

The arguments put forward by Roy are pure common sense. No one objects to public education as “socialized education.”  If conservatives are afraid that universal healthcare means big government, government is already heavily involved in healthcare.

And not just Medicare, which a certain tea party placard asked the government to keep its hands off!
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How Can Patients on Medicaid Possibly Be Worse Off than Those Who Don’t Have Insurance?

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By Saurabh Jha, MD

“Extraordinary claims require extraordinary evidence,” said Carl Sagan.

The claim that health insurance improves health outcomes is hardly ground breaking. Studying whether insurance affects health status is like wondering whether three meals a day lead to a higher muscle mass than total starvation.

Well that’s what I thought. Until I read the study on Oregon’s Medicaid program by Baicker and colleagues in the NEJM earlier this year and, more recently, Avik Roy’s short treatise “How Medicaid Fails the Poor”.

Baicker et al found that Medicaid enrollees fared no better in terms of health outcomes than those without insurance. That is, no insurance no difference.

The study is an exemplar of policy research laced with regression equations, control of known confounders and clear separation of variables. There is only so much rigor social science can achieve compared to the physical sciences. Yet this is about as good a study as is possible.

The one thing the study did not lack was sample size. It’s useful to bear in mind sample size. Large effects do not need a large sample size to show statistical significance. Conversely, if study with a large sample size does not show even a modest effect, it means that the effect probably does not exist.

There are several interpretations of the Medicaid study, interpretations inevitably shaped by one’s political inclination. The ever consistent Paul Krugman, consistent in his Samsonian defense of government programs against philistines and pagans, extolled critics of Medicaid as “nuts” and asked, presumably rhetorically, “Medicaid is cheaper than private insurance. So where is the downside?”

Unlike Krugman I am not a Nobel laureate and am about as likely to win a Nobel Prize as I am of playing the next James Bond, so it’s possible that I am missing something blatantly obvious.  Could the downside of a government program paying physicians, on average 52 cents, and as low as 29 cents, for every dollar paid by private insurance in a multiple payer system be access?

Indeed, it’s darn impossible for patients on Medicaid to see a new physician.  As Avik Roy explains “…massive fallacy at the heart of Medicaid….It’s the idea that health insurance equals healthcare”.

But wait. It gets better.

I am accustomed to US healthcare throwing more plot twisters than Hercule Poirot’s sleuth work. But one I least expected was that patients on Medicaid do worse than patients with no insurance (risk-adjusted, almost). I am not going to be that remorseless logician, which John Maynard Keynes warned us about, who starting with one mistake can end up in Bedlam, and argue that if you are for Medicaid that is morally equivalent to sanctioning mass murder. Rather, I ask how it is possible that possessing Medicaid makes you worse off than no insurance whatsoever.

To some extent this may artifactually appear so because poverty correlates with ill health, and studies that show Medicaid patients faring worse than uninsured, cannot totally control for social determinants of health.

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What the Death of American Medical News Says About the Future of American Medicine

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By Michael L. Millenson

If you wanted to know what doctors thought about money and medical practice, including plumber envy, you’d read American Medical News(AMN). That’s the biweekly newspaper the American Medical Association just announced it’s shutting down.

Unlike JAMA, in which doctors appear as white-coated scientists, AMN focused on practical and political issues, not least of which was the bottom line. For outsiders, that’s provided a fascinating window into the House of Medicine.

Take, for instance, the sensitive topic of plumber envy. A 1955 AMA report I discovered during research on a book I wrote some years ago lamented physicians’ “consistent preoccupation with their economic insecurity,” including envious comparisons to “what plumbers make for house calls.”

Flash forward to 1967. Thanks to most patients now enjoying private or public health insurance, doctors’ incomes have improved substantially. The pages of AMN include advertisements for Cadillacs and convention hotels (Miami Beach is “Vacationland USA”). However, one man’s income is another man’s expenses, and complaints about rising medical costs have surged. When AFL-CIO president George Meany joins the chorus of carping, an AMN headline asks, “How about plumbing?”

If today’s doctors have finally piped down about plumbers ­– an electronic search of AMN archives back to 2004 produced no plumbing references – it may be because the average plumber earned about $51,830 in 2011, according to the Bureau of Labor Statistics, while the average general internist earned $183,170. Meanwhile, the AMN ads for cars ­were long ago replaced by ads for drugs, where influencing a doctor’s choice can drive millions or billions in revenue.

Unsurprisingly, the issue of rising medical costs and its causes has been a persistent theme in AMN since its launch in 1958. (For my book research, I pored through its indexes and old issues.) While AMN ran articles with titles like, “Medicine Called ‘Best Bargain Ever,’” the AMA leadership knew health cost unhappiness was not a psychosomatic disorder.

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