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POLICY: Communism breaks out on Wall Street? (No not really)

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I sat through a very interesting talk about American health care yesterday afternoon. I guess I knew all this but it was good to have it laid out in front of me. Here are my notes from the talk about the health insurance market.

The overall number of people with private health insurance has been stagnant (176.9m) since 2000 while the workforce is growing (from 137m in 2000 to 145m in 2006). The number of uninsured is growing as are those in public programs. And as a consequence the “lives” growth in the big for-profit health plans has been below Wall Street expectations. Consumer directed health plans are growing and from around 9–10m lives in 2007 may end up at as many as 25m lives in 2010 (although those projections are much lower than they were a year ago).

Margins are as high as they’ve ever been and are at the top or even higher than the top of the underwriting cycle. Is the underwriting cycle over as they’re saying? Maybe but it’s been around for 50 years, and margins in non-profit Blues (which the speaker said aren’t so concerned about profits as the for-profits, which may be news to some non-profit CEOs I’ve met!) have started to trend down, and overall premium trend is moving down. Furthermore, some competition between plans is causing overall pricing go down (although some of that may be change in product mix, as more HDHPs which have lower premiums are sold).

Then there was a great chart showing that usually medical cost trend goes up with a 3–4 year lag to overall economic growth. We’re at about 3–4 years after the start of the most recent economic expansion now. So should we expect medical trend to go up, while premiums are going (relatively) down, and so in consequence expect the financial health of insurers to be getting worse? (My note: Is that why they’re trying so hard to hang on to those “extra” Medicare Advantage payments?)

Finally, we’re seeing employer’s provision of coverage to their employees go down, unusually, in the middle of a boom (the jobless recovery is not jobless, so much as benefit-less).

What did the speaker think was the likely outcome of all this? Bad news for health plans compounded by national health reform starting in 2009 lead by a Democratic President.

And from which lefty did I crib all this insight? Matt Borsch, health care analyst at that well known group of Bolsheviks called Goldman Sachs.

THCB UPDATE: Reader Mail

In response to yesterday’s post on AthenaHealth’s 2007 insurer ratings, Brian Klepper of the Center for Practical Health Reform writes:

I suspect that AthenaHealth would be unwilling to publicly report physician performance. Who wants to antagonize their clients?

But if AH has access to the information within the individual claims
records, it could add significant additional value by discretely
providing physicians with their relative performance values and
performance benchmarks. Physicians could use this information in health
plan negotiations and to guide performance improvements that will
become increasingly important as P4P takes root. At this point, the
only data most doctors have access to during contracting are the
numbers the health plans give them.

While health plans have actively campaigned for provider performance
transparency, their own performance has remained fundamentally opaque.
If this continues, it will render the changes possible through P4P –
which changes the incentives to reward the right care instead of simply
more care – much more difficult to achieve, because providers inherent
distrust will bubble over, as it did with managed care. After all, if
I’m not willing (or able) to tell a physician or hospital what
utilization or cost changes resulted from the incentive shift, or how
the savings were distributed, the conclusion will be that the health
plan simply pocketed the dollars with no savings to the system.

In this sense, AthenaHealth has taken a major step forward in
precipitating health plan transparency, and they deserve our collective
thanks.

That said, its useful knowing how long it takes for plans to pay
claims, but hardly what’s required to fully understand health plan
performance. A more robust tool is eValue8 (www.evalue8.org), developed
by the National Business Coalition on Health (www.nbch.org). This last
October, the Florida Health Care Coalition performed an evalue8
analysis of major health plans operating in Florida and then released
the results. These tools finally begin to provide a credible method for
purchasers and providers to get a handle on the complex, confusing
workings of health plans.

If AthenaHealth could leverage their resources a little further by
broadening their analysis, they’d add real value to changing the
dysfunction that plagues this part of the system. 

In a retort to the post on the growing support on Wyden’s health care plan, Barry Carrol writes:

I wonder about several things with the Wyden approach.First, how efficient will it be to, in effect, sell health insurance
one policy at a time as opposed to thousands at a time (through a large
employer)? The main problems with employer provided health care, in my
opinion, are lack of choices and lack of access to affordable coverage
if one loses or leaves a job or retires before becoming eligible for
Medicare. An employer mandate, at least for all but the smallest
employers, coupled with lots of choices similar to the Federal
Employees Health Benefits Plan might be a more workable approach.

Second, the Massachusetts experience is instructive on several
levels. First, Massachusetts has the highest per capita healthcare
costs in the country (over $9.000), a below average percentage of the
population that is uninsured, and a market that is overwhelming
dominated by non-profit insurers and hospitals.  Supposedly greedy for profit insurers and hospitals are simply not much of a factor in Massachusetts.

Within the last couple of days the Massachusetts health connector
website went live. People can key in their zip code, date of birth,
number of people to be covered, etc. and get rate quotes from four or
five different plans for each of four coverage levels – Bronze (both
with and without RX), Silver and Gold. Type in a Massachusetts zip code
and try it out. The website is: www.mahealthconnector.org.

 

In the comment thread on Andy Grove’s prescription for solving the healthcare crisis, Gregory Pawelski writes:

"It is entirely inappropriate to regard the randomized clinical trial as being the "gold standard" for judging whether a treatment does more good than harm. In life or death situations, one must make judgements based upon preponderance of available evidence as opposed to proof beyond reasonable doubt. It seems obvious that evidence-based medicine proponents may fail to apply this common sense standard on a consistent basis. "

In response to Beth Israel Deconess Medical Center CEO Paul Levy’s critical post on pay-for-performance plans, Mehul Dalal writes:

"We cannot talk about closing the income gap between the cognitive
and procedural specialties without mentioning the role of the Relative
Value Scale Update Committee (RUC). Their proceedings are opaque and
dominated by specialists and my understanding is that CMS adopts their
recommendations rather uncritically.

It seems that these proceedings should be more transparent and
perhaps an independent entity should ensure their recommendations are
aligned with the preferences of the beneficiaries. (this is public
money after all)."

PMH had this to say in the thread on the interview with MDVIP CEO Ed Goldman.

I attended a MDVIP kick-off last night. It was an older doctor (my
wife’s) who falls into the category of "frustrated over having too many
patients, wants a life." A lot of his patients seemed to be older and
probably have the money. Nobody walked out, and it was pretty well
received.

"Our pediatrician had booted the insurance companies before my kids became patients. Luckily, my family has been healthy. There have been a few emergency room visits over the years and one daughter went through a battery of allergy/asthma evaluations. While the cost of annual doctor’s visits has added up over the years, it was the testing, specialist, and emergency room visits that were by far the biggest hits. Insurance was applicable to those services.

The pediatrician seems to have been successful with his approach. His staff is small and he’s accessible, as well as being a good guy."

M.W. writes in to criticize Dr.Anna Pou’s supporters:

Having read many of the sympathetically concerned statements regarding the Dr. Anna Pou/Memorial Hospital Case, the majority positions of support, based either on personal character assessments or assumptions regarding professional competency, are sadly but well intentionally misplaced. The truth of the matter is that injections of combined drugs in conjunction with saline were administered to chronically ill elderly patients with the intent to humanely end life. Also, the supportive statements are unaware of the single 30ml immediate-release morphine sulfate bottle which plays an important but  ancillary role in this case.

TECH/HEALTH PLANS: AthenaHealth causing trouble again

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AthenaHealth caused a ruckus last year when it put out  a ranking of how fast health plans were paying doctors. Now they’re at it again. Cigna ranked No. 1 and United didn’t do so well. Of course if just speed of payment were the problem in American health care, it would have been fixed long ago.

But surely there’s much else in their data that would be interesting to know about. For example, I’m looking forward to AthenaHealth telling us from its data what activities of its physician customers were appropriate given their patients’ conditions. I’m interviewing AthenaHealth CEO Jonathan Bush in a few days, and I’ll ask him about that.

Any other suggested questions?

UPDATE: Here’s the chart of AthenaHealth’s 2007 Payerview rankings. They’ve also put up a rather flashy website explaining it all.

PAYERVIEW NATIONAL PAYER RESULTS:

National Payer 2007 Rank 2006 Rank
CIGNA Healthcare 1 5
Aetna 2 4
Medicare – B 3 2
Humana 4 1
UnitedHealth Group 5 3
Wellpoint 6 7
Coventry Health Care 7 Not ranked
Champus/Tricare 8 6

POLICY/POLITICS: Wyden gets a noted conservative to join him

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Ron Wyden’s interesting universal health care proposal, which is essentially a variant of managed competition with an individual mandate that decouples employment from insurance is getting some support. And notably it has a major Republican, Bob Bennett from Utah, signing on. (Following is an email Wyden’s office sent out)

U.S. Senators Ron Wyden (D-OR) and Bob Bennett (R-UT) are scheduled to join some of the nation’s top CEOs at a news conference this Monday, May 7, to announce new business support for efforts to reform the nation’s ailing health care system. Wyden and Bennett are the chief Senate sponsors of the Healthy Americans Act (HAA), the first bipartisan, comprehensive health care reform bill in more than a decade to guarantee health coverage for all Americans.

CEOs and business leaders scheduled to attend the news conference with Wyden, Bennett and U.S. Reps. Brian Baird (D-WA) and Jo Ann Emerson (R-MO) include Steve Burd, CEO, Safeway Inc.; Art Collins, CEO, Medtronic, Inc.; H. Edward Hanway, CEO, CIGNA; Nancy McFadden, Senior Vice President, PG&E Corporation; Steve Sanger, CEO, General Mills; and Ronald A. Williams, CEO, Aetna Inc. Baird and Emerson announced earlier this week that they will introduce the Healthy Americans Act in the House.

Realistically this isn’t going to pass any time soon, and if it did Bush would veto it. But it does set the groundwork for a universal insurance system compromise sometime in the future and at least Aetna and Cigna think that they’ll be better off taking that compromise than the alternative!

TECH/CONFERENCE: TieCon East, innovation conference in Boston 15-6 June

Peter Mueller from BCBS Mass asked me to let you know about TieCon East. This is a conference on innovation with a health care track (as well as a tech track and an enterprise track too). Peter is chairing the health track and has put together an interesting and varied line up on topics such as consumerism, technology in HC, personalized medicine, and medical devices. It’s in Boston on June 15–6.

HEALTH PLANS/POLICY: Ignagni–arguing out of both sides of her mouth, with UPDATE

My favorite lobbyist has a letter in the NY Times.
In which she argues that beneficiaries save money compared to regular
Medicare, and (this is the fun part) if payments are reduced then this
will have to be reflected in more charges to the poor. I have a long reply to this in waiting, but I’ve been persuaded to give my shorter version a shot at the NY Times letter’s page. If they don’t want to print it, then I’ll be back here with the long and the short version later in the week.

UPDATE: Not that this will surprise anyone remembering Medicare Risk Plans putting their sign-ups on the second story of a walk-up (I know no one eve proved those stories in the 90s…) but the NY Times today has a story about sales abuses in the Private Medicare FFS market which sound very like long distance phone "slamming" of 15 years or so ago. Except of course the victims are a little more vulnerable. Even CMS (which is at least partially run by Republicans who approved of the MMA) seems a little distressed by what’s going on.

TECH: Quadramed surveys consumers on EMRs et al

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Just to show that you don’t have to be Kaiser to survey the public on EMRs, mid-tier vendor Quadramed has done so too. The basic findings are that few consumers were aware that national quality ratings exist. And frankly I think that the few who are aware are wrong! But if they did exist they say they would use them (which is now what actually happens now BTW according to Harris data). Even fewer had heard of P4P, but in general they liked the idea once it was explained to them. And while roughly half had heard of EMRs, they like that concept too. Finally 42% said they’d experienced an insurance related error. I assume the remaining 52% have never filed a claim!

PHARMA/POLICY: DEA insanity continues–Dr. Hurwitz Convicted

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I’m a little late as this happened last week, but it has to be reported even though it makes me very angry. The DEA and its poodles in the DOJ have succeeded in getting Dr. William Hurwitz Convicted on 16 Counts of Drug Trafficking. Hopefully Hurwitz will be out of jail relatively soon—although no guarantees. He’s served 2 and a half years for just being a doctor, and could serve up to 18 more.

Unfortunately the chronic epidemic of untreated pain goes on and on. As I pointed out in Spot-on last year :

45 to 80 percent of nursing home residents have substantial pain.  The consequences of poor pain management include sleep deprivation, poor nutrition, depression, anxiety, agitation, decreased activity, delayed healing and lower overall quality of life. Fewer than half of nursing homes residents with predictably recurrent pain were prescribed scheduled pain medications

So we have a massive health problem, and the DEA acts like a bunch of brownshirts, going after pain doctors. Listen to Tierney’s account of one of the patients from the doctor that the prosecution used.

Then, during cross-examination by the defense, Dr. Hamill-Ruth was shown records of a patient who had switched to Dr. Hurwitz after being under her care at the University of Virginia Pain Management Center. This patient, Kathleen Lohrey, an occupational therapist living in Charlottesville, Va., complained of migraine headaches so severe that she stayed in bed most days. Mrs. Lohrey had frequently gone to emergency rooms and had once been taken in handcuffs to a mental-health facility because she was suicidal. In 2001, after five years of headaches and an assortment of doctors, tests, therapies and medicines, she went to Dr. Hamill-Ruth’s clinic and said that the only relief she had ever gotten was by taking Percocet and Vicodin, which contain opioids.

Mrs. Lohrey was informed that the clinic’s philosophy “includes avoidance of all opioids in chronic headache management,” according to the clinic’s record. The clinic offered an injection to anesthetize a nerve in her forehead, but noted that “the patient is not eager to pursue this option.” Mrs. Lohrey was referred to a psychologist and given a prescription for BuSpar, a drug to treat anxiety, not pain.“You gave her BuSpar and told her to come back in two and a half months?” Richard Sauber, Dr. Hurwitz’s lawyer, asked Dr. Hamill-Ruth. Dr. Hamill-Ruth replied that unfortunately, the clinic was too short-staffed at that point to see Mrs. Lohrey sooner. Under further questioning Dr. Hamill-Ruth said that she was not aware that BuSpar’s side effects included headaches.

Mrs. Lohrey looked elsewhere for help. Having seen Dr. Hurwitz on television _ — “60 Minutes” and other programs had featured his controversial high-dose opioid treatments — she sent him a letter describing her pain and the accompanying nausea and vertigo.“I have lost hope of retrieving my life as it was,” she wrote, because she could find no doctor to take her seriously. “I currently have a physician who has said that I am psychologically manufacturing my headaches, and that I am addicted to narcotic pain relief. This of course is not the first time that I have been treated as a ‘nut’ or a ‘junkie.’ ”

<SNIP>

“I felt that I had a duty to the patients,” Hurwitz said. “I hated the idea of inflicting the pain of withdrawal on them.” After the closure of his practice in 2002, he said, two of his patients committed suicide because they gave up hope of finding pain relief. The most moving testimony came from Mrs. Lohrey and other patients who described their despondency before finding Dr. Hurwitz. They said they were amazed not just at the pain relief he provided but at the way he listened to them, and gave them his cellphone number with instructions to call whenever they wanted.

“I felt like I was his only patient,” Mrs. Lohrey testified. “I think he truly understood the nature of what I was going through.” When she lost her health insurance, she said, Dr. Hurwitz continued treating her at no charge, and helped her enroll in a program that paid for her opioid prescriptions. After Dr. Hurwitz’s practice was shut down, she could not find anyone to treat her for seven months. Eventually, she found a doctor willing to prescribe small numbers of low-dose Percocet, but she said she was not getting enough medicine to consistently blunt the headaches.

“The last two weeks, I was pretty much in bed and sick with the headaches and the nausea and the whole nine yards,” she said, explaining that she had deliberately undergone the two weeks of pain in order not to use up any of her pills. “I had to save up medication,” she testified, “so I could be here today.”

Tell me which physician was guilty of malpractice, and why on earth one of them deserves to be in jail?

PODCAST/TECH: Interview with Chris Hobson, Orion Health

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Since John Irvine’s taken over as the business lead for THCB, we now have a raft of new sponsors including CDW, Silverlink and now Orion Health. Apparently the marketing folks at Orion thought that it would be a good idea for me to interview their Chief Medical Officer Chris Hobson. What I didn’t realize is that Chris is a wealth of knowledge about health care systems around the world, and in particular how EMR use became prevalent–yup that essentially 100% adopted–in New Zealand We had a very interesting conversation about that, and if you’re as interested in that conundrum as you ought to be (which is very!) you need to read this. And hopefully the marketing people wont be too upset that their CMO barely got close to the topic of what OrionHealth actually does!

Matthew Holt:  This is Matthew Holt at The Health Care Blog and today I’m doing another podcast. And with me I have Chris Hobson. Chris is the Chief Medical Officer at Orion Health. I’m very happy to be talking to anyone at Orion Health because unbeknownst to me last week they have decided to become a sponsor of The Health Care Blog. As part of that arrangement, I’m very delighted to interview Chris because I interview a lot of people who do not sponsor me. [laughter] Anyway, Chris, good morning. Thank you very much for joining me. Thanks to Orion. I don’t know who was it who your organization who decided to do this as I am no longer the business rep of the Health Care Blog but delighted to talk to you.

Chris Hobson:  Good morning. It’s nice to be here.

Matthew:  I sense by your accent you are one of these American immigrants. Well, you’re in Canada, right?

Chris:  Yes, actually I’m native from New Zealand. Orion Health, actually, we started in New Zealand. As we’ve grown from New Zealand across UK, Canada, Australia, and other parts in the US, I’ve sort of tagged along with the company.

Matthew:  That’s great. Well, it’s always good for people to come from the rest of the English speaking world to tell the North Americans how to do it. I’ve been doing it for years, not that anyone is listening.

Chris:  [laughter]

Matthew:  Let’s talk a bit about that. There are a couple of things that Orion does. For those people who don’t know about Orion, and you’ll explain it better than I do, loosely you’re in the business of improving data communications and data integrations and that ends up being a lot around messaging and interoperability issue–currently a big picture problem in the US. But also elsewhere. Let me ask you to start with a couple of things. First off let’s talk a bit about what you perceive to be the big problem in the US in that sector. Because you guys are also in a lot of other countries, you mentioned New Zealand, UK, Canada and also some other European countries, give me a sense of. Is this the same problem everywhere in health systems or is the US unique?

Chris:  Sure. Well, we have our own perspective on what’s wrong with the health care system, but I guess, there would be fairly few people who would disagree a major problem with health care is the fragmented nature of it. There are a lot of different people, all well intentioned, doing a lot of good things across that the patients may interact with. The problems that we see arise as the result of all this—Going on from fragmented system to provider-to-provider-to-provider. In particular the information does not move along with the patient and it is very easy for the provider to focus on a narrow area and miss the big picture for what is going on with the patient.In the US, health care is more fragmented probably than anywhere else. In the sense that there are six thousand hospitals and just a huge range of both providers and payers. And if you look outside of the US, health care is not as fragmented; however, it is still quite fragmented and the same problems do arise.So if look for instance, the classic kind of story comes where down to and I’m taking this case from Don Berwick, and so I hope that’s OK but–

Matthew:  [laughter] We steal from Don Berwick all the time.

Chris:  [laughter] You steal from Don Berwick all the time. That’s great. He’s a Harvard professor of pediatrics, and his wife developed an obscure neurological complaint. It took some nearly six to twelve months before she got better more or less as a result, or not as a result, of the health care system. Along the way, she saw a huge range of different professionals who were all trying, well intentionedly trying, to help. The problem from his perspective was that each time they went to see a new professional he had to remember the case history. Each time they would see another professional, they would ask, "Tell me about what’s been going on." sort of thing. Of course, he had told the story so many times and been questioned about it so often that by the time he got to about 10 days or 10 weeks of this it was very hard to be strictly correct or accurate even with the best intentions.Another case in a sense that may be described as another sort of sense from when I was working at South Auckland in New Zealand, we went out and visited a home visiting nurse. And the first thing she said as she went in to visit a patient, she said, "Everything you tell me will be kept completely confidential, and I won’t share it with anyone." She then proceeded to take the whole history about what had been going on, and the patient had diabetes and had been to see a primary care practitioner who had said, "You have diabetes." But of course, the patient didn’t like that message particularly. So, he did nothing and a few months later he still wasn’t feeling very well, and went to see another practitioner who said ‘You’ve got diabetes’, and he didn’t like that story either. But eventually he managed to end up in the emergency room in the hospital and they looked up the history and said ‘You’ve got diabetes’. And they operated on the patient and then sent him out into the community. So when the community visiting nurse went to see the patient to look at the ulcer on the leg and dressings she knew nothing of all of this. Even though she worked for the same hospital and the same surgeons had done the surgery they hadn’t communicated onto the next provider what needed to be done.Now let’s rewrite that script and go back and say. The patient goes to see the first GP and he says you’ve got diabetes and the patient doesn’t like hearing that news so he goes to see the second practitioner. When he goes to the second practitioner, this time the stories different because he says ‘hey you’ve got diabetes, and by the way that first doctor that you didn’t like for telling you that you’ve got diabetes. He was right. You’ve got diabetes and now two of us have told you and you need to take this seriously.’ Let’s imagine the patient still did nothing and ended up in the hospital. The hospital specialist will say ‘You’ve got diabetes, and by the way, all these other people who’ve been telling you the same thing, it’s about time you started to take note of it.’So that’s a short vignette on what we see as the biggest problem in health care from our perspective. I mean health care is full of problems, but the information continuity and sharing of information, and sharing it in a way that improves the quality of care and re-enforces messages to the patient and it’s consistent. We see the lack of that as a huge barrier to improving the quality of care.

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