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PHYSICIANS/CONSUMERS List prices for doctors?

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Healthcare Partners, the biggest physician group to emerge from the carnage of Southern California physician group implosion in the late 1990s is now putting a list price out for some procedures. Why?

"It feels like the right thing to do," said Robert Margolis, a founding physician and chief executive of the medical group.

OK This is a little curious, and that explanation won’t win Bob too many prizes in his MBA or logic class but given that he kept his ship afloat while the rest of southern California’s physician groups imploded, it’s not wise to think he’s crazy. So what’s going on? This is perhaps a preemptive strike on the retail store clinics, which are not yet big in California. It’s also perhaps a play for the dollars of the worried-well uninsured. So there may be logic behind it if it’s really an attempt to grab market share.

But there’s probably less to it than that. If you look at the actual prices, the only ones quoted are for wellness visits, immunizations and physicals—the kinds of things that are often not covered by insurance and usually aren’t that big a part of a physician’s revenue. Furthermore the price bands are very, very broad. An office visit for a repeat customer is $55 to $170. Well $55 may undercut a retail clinic but $170 won’t. So how is the consumer supposed to make a buying choice between them? And of course the prices are not anything like as detailed as say what Aetna’s releasing in certain markets. This leads me to believe that they’re way above the rates that HealthCare Partners has contracted with the local health plans.

So at best this is a tentative step in the water. And the best evidence from that comes from Margolis himself. He’s veteran of the global capitation days and he knows that this front end stuff doesn’t matter much in the big picture.

Many healthcare professionals, including HealthCare Partners’ Margolis, believe that consumerism has its limitations and is no cure-all for escalating healthcare costs. That’s because the biggest cost drivers are the chronically ill, who are often unable to comparison shop and quickly reach even the highest commercial deductibles every year, or are so impoverished by medical expenses that they are on government programs. Consumerism "has a nice ring to it," Margolis said. "But it’s very shallow in its effect, in my view."

There is of course a way of creating price competition that helps consumers decide what health care services they should be buying, and will actually create a rational market in health care. But it ain’t at the individual service level, and to get there will of course mean running roughshod over all the ideals that the wackier promoters of consumer transparency espouse. But more of that another time….

CODA: And for your amusement…NPR’s Marketplace called me for a rent-a-quote about this story but I went to walk the dog, and in the meanwhile they secured some other pundit. Someone else gets their name in lights and I’m left picking up dog poop. Fame is fleeting, eh?

HOPSITALS/POLICY: Spending on health care is good for the economy, really!

Hospital boom adds billions to Arizona economy

Arizona’s hospital construction boom will create a windfall for the state’s economy by creating 14,900 jobs each year and add $2.6 billion in wages over that five-year period, according to a study commissioned by the hospital association.

And digging holes is equally good for it–4,000 in Blackburn, Lancashire I believe. Of course given the funder of the study, what was it going to say?

OFF-TOPIC: Wanna be ethnographed?

IFTF is looking for some volunteers to be ethnographed. Not as painful as it sounds—actually rather fun I did it a few years back.. They are currently recruiting for a new research study called "Boomers in the Next 20 Years". If you’re interested read on

Continue reading…

POLICY: Hoggy on Reggie

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For your weekend fun read—soon to be featured in THCB conservative—David Hogberg’s review of Reggie’s new book Who Killed Healthcare in The American Spectator. Hoggy of course thinks she’s too left-wing  in that she’s in favor of an individual mandate. Of course I haven’t ready this book yet although I’m prepared to guess what’s in it. Let’s just hope that Reggie’s next forecast is a little more accurate than this one she made in 1998.

As my book describes, the market forces that revolutionized the once-bloated U.S. economy are now reshaping health care. Activist consumers’ demands for accountability, convenience, and control are making the system more informative and accessible. The focused-factory concepts that revived the nation’s manufacturing sector and fashioned its world-class service sector are now shaping high-quality, cost-controlled health care delivery systems. And the sort of technological innovations that have increased productivity since the Industrial Revolution are improving the quality of health care while controlling costs. Brilliant entrepreneurs are using the managerial lessons learned from successes such as SamWalton to create a better, cheaper,more accessible health care system.

And just to be fair and a good sport this prediction stuff is very hard. So to prove it I’ll  lay some of my ghosts. The 1997 IFTF 10 Year Forecast for which I wrote the relevant part suggested rather more success in cost containment …although I had rather different reasons for thinking that was coming about. Here’s the most wrong part of the whole IFTF 10 Year Forecast:

The biggest change in the health insurance market over the past 10 years has been the fast growth of HMO enrollment. In 1998, more than 76 million Americans were enrolled in HMOs, and a majority were in some kind of a managed care plan. By 2005, HMOs will capture the majority of the commercial market and more than 25 percent of the Medicare market. Sixty percent of Medicaid recipients will be in some form of HMO by the year 2010.3 Among this plethora of new products, it will be increasingly difficult to distinguish one health plan from another. They’ll all offer similar—and often the same— providers and pay those providers through a mixture of discounted FFS and capitation (a flat fee per patient). By 2005, more than 100 million people will be in these “HMO descendants.”

The health insurance market will evolve into a mix of different health plan models, many of which will spend the next several years in a constant flurry of reorganization and mergers. Four dominant “intermediary” models will emerge by 2005: the case manager, the provider partner, the high-end FFS broker, and the safety-net funder. As a result, in 2007 close to 50 percent of the population will be in health plans for which cost containment is a key issue. Despite all the pressures toward increasing costs in the system, these new strategies will be successful enough to keep costs from exploding again as they did from 1960 to 1990.

 

POLICY/POLITICS: Clinton gets a little more specific

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Hillary Clinton made a major speech on health care yesterday. (Here’s the full text). Her quick points. Pay for preventative services (although what she’s talking about you’d recognize as DM), use IT and EMR, use the primary care “medical homes model” (the AAFP’s got to her!). Those are all strategies to save money—suspend your disbelief for a moment. Her other points are about changing malpractice and beating up drug companies on pricing. All very worth and all that but mostly rhetoric I guess.

Then more interesting stuff. Basically she wants a re-run of 1993–4. Big purchasing pools for small business. Guaranteed issue at community rating. Ending risk selection and underwriting. Unfortunately she uses a bad example by conflating cherry picking with insensitive network management/UR which are NOT the same thing:

In fact, according to a recent McKinsey report, insurance companies in America spend tens of billions a year figuring out how not to cover people — doing complicated calculations to figure out how to cherry pick the healthiest persons, and leave everyone else out in the cold. That is how they profit: by avoiding insuring patients who will be "expensive" — and then trying to avoid paying up once the insured patient actually needs treatment.

I see this all the time. My office spends countless hours arguing with insurance companies to get my constituents the health care they have paid for. For example, a father called me from northern New York — his son had a rare illness. Now he and his son were well insured. He’d worked for many years for the same employer who provided a good policy. But when his son needed a special operation — that could only be performed at one place in the country — the insurance company said, sorry, that’s out of network, we’re not going to send you to have that done. So my office intervened. And in the end they got permission for the operation. But I don’t think people should have to go to their United States Senator to get their insurance company to give them what they’ve paid for.

As President, I will end the practice of insurance company cherry-picking once and for all by allowing anyone who wants to join a plan to do so and prohibiting insurance companies from carving out benefits or charging higher rates to people with health problems.

She needs to find a new example to educate people as to what cherry picking is. Perhaps she should take Jon Cohn tour with her…. In any event that coverage denial piece will come back to bite her because her most interesting issue is her desire to establish a NICE type cost effectiveness institute which she calls the Best Practices Institute, and she gives a strong hint that it’ll not just be vetting new drugs for cost-effectiveness but also be using Wennberg/Dartmouth-type analysis as well as standard cost-effectiveness analysis to direct P4P. So of course there will be coverage decisions which may impact that constituent of hers with a rare illness…

It seems to me that she’s trying to get on the wave of employer discontent and then cut a deal with the larger insurers to let them stay in the game, and also let them blame the government (the new Best Practices Institute) for restrictions on coverage decisions. Not a bad political compromise perhaps. Of course the devil is in the details of the pools and the uniformity of benefits that insurers must provide.

And of course the real thing that needs discussion is the one thing she left out. How does this plan get the uninsured insured? It keeps the same employer payment format in place, and seems to have no mandate. Hillary is many things but dumb is not one of them. She must be focus grouping this next element to death, because ignoring it isn’t an option, even for as corporate a Democrat as she’s become.

Still, she’s revealed more than I expected her to, and there’s plenty here for her opponents on the right as well as on the left to latch onto. This is getting fun!

TECH/CONSUMERS: Musings on IFTF, Health2.0 and social networking

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I sat in a meeting today put on by my old colleagues at IFTF. (There are some other bloggers here, so there’ll be more about the meeting elsewhere). The room is filled with an interesting mix of techies, health care people, non-health care people, foundations, drug companies et al.

IFTF is fixated on the concept of biocitizenship. They’re interested in how wider communication tools (of which the Web2.0 tools are one) are allowing social movements to spread, and how this has enabled much more activism. I’m not convinced that this combination is as true or as new as they think, but it’s an interesting lens with which to view these emerging communities. For more on the biocitizen, look here — or contact Jody Ranck. I’m not going to detail IFTF’s research here. They’ve done some cool scenarios (including one with Howard Rheingold’s daughter acting as a “not LonelyGirl” faux youtube video as a very new health care consumer) in progress plus they sell their research for money (and if you’re a corporation it’s probably worth buying).

We also heard from the CDC, Revolution Health and DailyStrength.org. They are combining new tools, new communities and new techniques at a staggering rate. They’re also seeing some real growth. Revolution has been seeing big growth and although they didn’t give the numbers, DailyStrength seems to have 4–5,000 people per discussion group. It seems that better, more personalized search, and mapping your personal situation to that of others is the future to handle all this new information. I think that Natural Language Recognition based processing and search is going to be very important (which is why I’m so high on Enhanced Medical Decisions). However, much more of this will be dependent on what IFTF calls computing “sensemaking” (Computing has gone from processing to communicating, to sensing and on to “sensemaking”). That’s going to match patterns and heuristics to match your data. So that you get exactly what you need from all the stuff out there about you—and then that will get combined with the sensor information from medical devices et al.  And then put that all in context-which may be done by computers or humans with computers.

All interesting stuff, but there’ll need to be much more unpacking of these tools and the business models for them in the next little while….

TECH/HEALTH2.0: The trademark for Health2.0

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I’m at IFTF’s meeting today with a group discussion health new media. The Health2.0 term has been used alot and at Dmitriy’s urging I thought I’d clarify something.

Yes I’ve trademarked Health2.0. No, I will not stop anyone using it. I’ll be giving control over the trademark to the collective advisory board for the Health2.0 Conference. All I want to make sure is that no one uses the trademark offensively (pun intended) as for instance has happened with the term eRx.

More from IFTF later…

TECH/PODCAST: Interview with Bob Fisher, CEO of Foresight

Foresight is a highly focused tech company working (mostly) deep in the transactional guts of payers and plans providing claims editing tools, business intelligence and a variety of other services. Recently they had a very convivial user conference in Carefree, AZ and were nice enough to invite me to give a keynote. I also got into a little contention (but not too much!) with Foresight’s CEO Bob Fisher about what’s wrong with health care in the US. So I thought I’d return the favor and have Bob on the blog to explain what Foresight does, and we got to talk a little about the wider issues in health care too. Anyone who has any interest in how health insurers actually work (which should be all of you!) should listen to this.

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