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A New Kind of Payment Mechanism Targeting Social Determinants of Health?

It’s been established that an effective way to manage an individual’s health is to address the root cause of health complications, known as social determinants of health (SDOH).  Unfortunately, interventions that address SDOH often exist outside the scope of the traditional healthcare payment system. 

There is a relatively new methodology that can be used to increase spending on SDOH while transparently enforcing accountability and outcomes. Social impact bonds, also known as  “pay-for-success” models, are multi-stakeholder performance-based contracts.

The five key stakeholders and their roles are as follows:

1) Service Provider:  Agrees to conduct a program designated to yield a future outcome that is valuable to the payer.  (Usually a nonprofit organization.)

2) Investor:  Provides up-front working capital for the service provider to channel toward the designated program.  In exchange, the investor will receive a “success payment” if the committed outcome is produced on schedule.

3) Payer:  Commits to pay the service provider a “success payment” when the specified outcome is produced.  (Usually a government agency.)

4) Intermediary Organization:  Facilitates the SIB contract, establishes payment and financing terms, and supervises the service provider’s program.

5) Independent Evaluator:  Determines if the committed outcome was achieved upon conclusion of the contracted period.

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Et Tu, Dr. Noseworthy?

MACRA and the New Quality Payment Program: Most Frequently Asked Questions

November 2 | 2-3 PM EST      / With THCB 

On Oct. 14 the Centers for Medicare and Medicaid Services (CMS) released detailed regulations for implementation of the Medicare Access and CHIP Reauthorization Act (MACRA). With so many changes to the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM) track, we at Health Catalyst have heard many questions and comments. This is understandable, as the substantial 962-page proposal has grown to the 2,398-page final rule. Also, since nearly all providers will be subject to the new Quality Payment Program (QPP), understanding MACRA and what it means for providers is imperative.

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Premium Hikes in the Exchanges: Not Good News, But Not the End of Obamacare Either

OK.  Yes, this is bad.  The Obama administration is being disingenuous if it tries to spin it any other way.   And, as has been clear for several months, this hands Hillary a “nasty” issue (pun intended). 

The “this,” of course, is the administration’s announcement on Oct. 24—after weeks of speculation and anticipation—that premiums in the exchanges will rise by an average 22% for 2017 coverage (if both state- and federally-run exchanges are included in the count.)

Despite the fact that tax subsidies will significantly soften the blow for the vast majority of people buying health insurance in the exchanges, millions of families will still be adversely affected.  

Specifically, about 2 million people who will buy coverage through the exchanges in 2017 will not get subsidies because their incomes are too high.  You could argue: hey, they can afford it.  But it’s still a pretty big hit when your monthly premium goes from $500 a month to $625.   Continue reading…

Precision Primary Prevention

If you’re going to indulge in anticipatory medicine, it is best to anticipate those at highest risk. An elegant study by Wald et al in the NEJM shows how precision primary prevention can be done. The researchers screened toddlers, who presented routinely to their general practitioners for vaccinations, for an uncommon, but not rare, familial predisposition to high cholesterol known as heterozygous familial hypercholesterolemia (FH), in which premature cardiovascular death can be deferred by statins and lifestyle changes. Blood drawn from the toddlers by a heel prick was tested for serum cholesterol and genetic mutations indicative of heterozygous familial hypercholesterolemia (FH). The parents of toddlers who met criteria for FH were also tested for cholesterol and genetic mutations. Obviously identifying affected parents, and increasing their longevity, is also beneficial for their children.Continue reading…

Huge ACA Rate Hikes in 100
Words or Less

ACA permits people to sign up even if they are already sick. Real insurance cannot work that way.

Imagine an Accountable Fire Insurance Act that required insurers to sell you fire insurance after your home had burned. Homeowner insurance rates would skyrocket. Anyone who carefully read the ACA would see that coming.

The big insurers knew this would happen but played along in the beginning to avoid attracting political fire.

When 75% of Americans get a taxpayer subsidy under ACA, it isn’t really insurance but more of an income redistribution mechanism…for better for worse.

There it is, 97 words.

Artificial Patients need Artificial Intelligence; The Sick and Worried Amongst Us Deserve Better

Every conversation with a patient is an exercise in the analysis of “big data.” The patient’s appearance, changes in mood and expression, and eye contact are data points. The illness narrative is rich in semiotics: pacing, timing, nuances of speech, dialect are influenced by context, background, and insight which in turn reflect religion, education, literacy, numeracy, life experiences and peer input. All this is tempered by personal philosophy and personality traits such as recalcitrance, resilience, and tolerance. Taking a history, by itself, generates a wealth of data but that’s just the start.

Add into the mix physical findings of variable reliability, laboratory markers of variable specificity, imaging bits and bytes and you have “big data.” Then you mine this data for the probabilistic variance of the potential causes of a complaint based on which you begin to consider values for numerous options for care. So armed, the physician next needs to factor the benefits and harms of multiple treatments’ derived from populations that never perfectly reflect the situation of the individual in the chair next to us, our patient. This is the information necessary to empower our patient to make rational choices from the menu of options. That is clinical medicine. That is what we do many times a day to the best of our ability and to the limits of our stamina.

Take that Watson. You need a lot more than 90 servers and megawatts of electricity to manage our bedside rounds. You need to contend with the gloriously complicated and idiosyncratic fabric of human existence. Poets might be a match, but Watson is not.

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Michelle Longmire, CEO Medable

I never ceased to be amazed by how smart young clinicians solve problems that they see. Michelle Longmire was in residency at Stanford working with colleagues building point solutions when she realized that what they needed was an easy platform on which to develop medical grade apps. Her company Medable was the result. Then she realized that the other big market was clinical researchers, who now have access to Apple’s ResearchKit, but need an easy way to build a study without using developers. I interviewed her recently and she built a study for me using Medable’s new Axon product.

Atul Gawande, ACOs, and the Myth of the Mayo Clinic’s Low Costs

This is the last of a series of imaginary lectures for President Obama. I am hoping to educate him by criticizing three people who influenced him – Peter Orszag, Atul Gawande, and Elliott Fisher and his colleagues at Dartmouth. In this last installment I focus on Gawande.

Obama was deeply impressed by Gawande’s “The Cost Conundrum,” an article published in the New Yorker in June 2009. By June 2009 Obama had already adopted the managed care diagnosis (overuse) and the latest iteration of the managed care solution (ACOs, “medical homes,” and pay-for-performance, all of which will allegedly be facilitated by electronic medical records). “The Cost Conundrum” did not convert Obama to managed care ideology, but it did strengthen his belief in it.

“The Cost Conundrum” illustrates the good and the bad effects the Dartmouth Atlas has had on American health policy and on intelligent people like Gawande and Obama. The article is about Gawande’s trip to McAllen, Texas to see why per capita Medicare spending in that small town was the highest in the country. [1] Gawande knew it was high because the Dartmouth Atlas said so. Asking why Medicare spending in McAllen was so high was a legitimate question to ask.

But Gawande went way beyond exposing problems with Medicare spending in McAllen. He told his readers that the problems he uncovered in McAllen – overuse of some Medicare services induced by fee-for-service payment – afflicted vast swaths of the medical profession and that “accountable care organizations” were the answer. He specifically singled out the Mayo Clinic in Rochester, Minnesota and an informal cartel in Grand Junction, Colorado as examples of ACOs that had allegedly already proven they could provide high-quality care at very low cost. [2]

But within a few years, research would turn Gawande’s characterization of Mayo and Grand Junction upside down. It would turn out that both the Mayo Clinic and Grand Junction are costly places to be treated when all medical spending, not just Medicare spending, is taken into account. Oops.

But before I elaborate on that mistake, I want to give Gawande credit for the good “Conundrum” did do.

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Will Clinton Take Another Look at Value-based Healthcare?

Paul Keckley“Value” is the most important concept in healthcare today. But it’s problematic.

Futurists say our system is transitioning from volume to value. Device and drug manufacturers tout the value of their products. It even found its way into Wednesday night’s Presidential debate when frontrunner Hillary Clinton answered Chris Wallace’s query Medicare’s long-term viability with the following reply: “We’ve got to get costs down, increase value, emphasize wellness. I have a plan for doing that.”

Value is defined as “a fair exchange in return for a thing” (Dictionary.com). Per Webster’s, it is a “fair return in goods, services, or money for something exchanged; worth in money; usefulness, or importance in comparison with something else.”  In essence, it is the relationship between what something costs and the benefits that accrue to its purchaser. Transactions between buyers and sellers based on the purchaser’s deduction of what something costs and the benefits derived are the basis for value-based economics. They’re aided by rating services like Consumer Reports that provide useful methods for making selections: the current issue covers SUVs, coffee makers, nut butters and gas/electric ranges.  Very straightforward. Side by side.

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