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State Insurance Exchange Blind Spots: Unknown Risks and Unintended Consequences

Sep 23, 2013• 6

By Seth Kneller

October 1st marks the first ever public exchange open enrollment season. This means some of the speculation around consumer awareness and understanding, enrollment/uptake, premiums, and payer participation (not to mention the technical readiness of the exchanges) will finally subside and give way to a clearer picture of the PPACA’s initial success in mandating individual health coverage.

Despite this approaching level of clarity, however, several very significant “blind-spots” will continue to persist, principally for the health insurance carriers that choose to participate by offering PPACA compliant plans in the exchange.

This is due to the law’s guaranteed issue mandate prohibiting health carriers from denying coverage based on preexisting conditions. As a result, the traditional enrollment process which consists of a comprehensive assessment of each applicant’s health status and risk cast against the backdrop of time-tested underwriting guidelines is completely thrown out.

What takes its place is an extremely limited data set (i.e., the member’s age, tobacco/smoking status, geographic region, and family size) from which carriers can determine pre-approved premiums and variability therein. To use an analogy, health insurance companies no longer have a “bouncer at the door” turning people away, or a sign reading No shirt, No shoes, No service at the entrance.

In other words, everyone, regardless of their risk profile, must now be welcomed in with open arms and with very limited risk-adjusted rates.

This wouldn’t necessarily be a problem if the enrolling population comprised a well understood risk pool representing a true cross-section of the population. The reality, however, is that a predominantly unknown and potentially unhealthy population will flood the individual health insurance marketplace in a two weeks just as most states quickly phase out their high-risk pre-existing condition pools and shift them into the exchanges.

The Summer of Wellness’s Discontent

Sep 23, 2013• 46

By Al Lewis & Vik Khanna

The series of unflattering articles published in Health Affairs early this year – the first unfavorable press wellness had ever received in a top tier policy journal — turned out to be a harbinger of what became the wellness industry’s summer of discontent. Perhaps in error, the Journal of Occupational and Environmental Medicine (JOEM) also drifted into the sea of credibility on wellness early in 2013 by publishing a meta-analysis of the industry’s claims of economic success.

The analysis, by researchers at Tufts, destroys the industry mythology of respectability by noting that out of over 2,000 papers published in the world’s medical literature, only 10 (0.5%) are worth discussing and that discussion leads essentially nowhere. Not surprisingly, like our essays here and in Health Affairs, the Tufts work has been universally ignored by the wellness true believers.

Starting with those articles, and especially over the last four months, those true believers have lost control of the dialog — starting right here with THCB, which gets credit as the first major regular source of objective news not generated by the wellness industry’s propaganda apparatus.

June brought the RAND report, our Wall Street Journal op-ed, and Cracking Health Costs. Unlike Health Affairs, some HR administrators have actually read those publications. These developments left them asking uncomfortable questions of an industry that hitherto had filtered the information that its customers received through the JOEM and the Journal of Health Promotion, the industry’s de facto house organs that between them in thirty years have published fewer articles concluding wellness doesn’t work (just that single meta-analysis mentioned above) than Health Affairs has in 2013 alone.

But it wasn’t until July that the wheels fell off the wellness bus, due to four self-inflicted wounds that did more to diminish the industry’s carefully cultivated albeit totally undeserved patina than anything we could have written. Atoning for its brief foray into accuracy, JOEM published an article showing $20-million in savings for British Petroleum’s (BP) wellness program, 100 times what the vendor, Staywell, claims on its own website to be possible.

Why Can’t We Do Better Than This?

Sep 22, 2013• 15

By Harlan Krumholz, MD

Is there a patient who goes through a hospitalization who does not have stories to tell about the obstacles, errors and indignities that they endured? I just wonder sometimes.

A family relative was hospitalized this week with a stroke at a hospital a few hours from me –and his experience left me demoralized about medicine.

Joe (not his real name) is an 82 year old grandfather, father, husband and one of a kind. He has a scraggly beard and ponytail. He possesses an artistic spirit, but is punctual to a fault – always early, never late. He has an integrity that is rare these days, which led to a loyal following in business and life. And yes, he is devoted to his family.

On Tuesday, he developed some difficulty with his balance. His wife of over 60 years was worried and brought him to the doctor. That is when the issues began.

Issue #1. His doctor fit him into her schedule and recognized the possibility of the early signs of stroke and sent him for an MR imaging study of his brain. And she also gave him an aspirin, which he promptly took. The problem is that the MR study revealed a small bleed in his brain – and the last thing you want to give someone bleeding in his brain is an aspirin because it can cause more bleeding.

Issue #2. At one of the nation’s most reputable New England hospitals he was evaluated in the Emergency Department and admitted to the hospital. He is brought upstairs to the stroke ward fairly late and he is exhausted. Even later he is told that he must have a CT scan of the brain.

He is stable. His symptoms are not changed. Nevertheless, someone orders a CT scan. There was no discussion about whether he should have the scan with Joe’s family; they were told he needed to have one. After the scan, his family is told that the scan will not be read until the morning when the radiologist arrives. They push and are told that the technician looks at the scan and would let someone know if it looked abnormal.

They push a little more and ask that they speak to someone who is managing his case. A resident arrives and tells them that there is nothing alarming. The family asks if it will be compared with the scan from earlier in the day (as that was the reason they took the scan 6 hours later) and are told that scan hasn’t been uploaded yet, even though it was with Joe’s records when he was in the Emergency Department.

They ask the resident to retrieve it from the emergency room and make the comparison. Finally they are told that the Radiologist in the ER reviewed it – but when they ask who reviewed it, they are not told a name.

A Physician Faces Disciplinary Action For Seeing Patients on Skype — Early Guidelines For Patient Video Visits

Sep 21, 2013• 15

By Joseph Kvedar, MD

The medical board of the state of Oklahoma recently sanctioned a physician for using Skype to conduct patient visits. A number of other factors add color to the board’s action, including that the physician was prescribing controlled substances as a result of these visits and that one of his patients died. This situation brings up several challenges of telehealth — that is, using technology to care for patients when doctor and patient are not face-to-face.

• Legal/regulatory: On the legal side, physicians are bound by medical regulations set by each state. It appears that the use of Skype is not permitted for patient care in Oklahoma.

• Privacy/security: Skype says its technology is encrypted, which means that you should not be able to eavesdrop on a Skype call. That would seem to protect patient privacy. At Partners HealthCare, we ask patients to sign consent before participating in a ‘virtual video’ visit. Because this is a new way of providing care, we feel it’s best to inform our patients of the very small risk that their video-based call could be intercepted. I don’t know if the Oklahoma physician was using informed consent or not.

But the most interesting aspects of this case involve the question of quality of care. Can a Skype call substitute for an in-person visit? Under what circumstances?

Video virtual visits are a new mode of care delivery. Whenever anything new comes up in medicine, it is subject to rigorous analysis before entering mainstream care. That same rigor applies to video virtual visits. Although some studies suggest virtual visits can be useful, the evidence is not yet overwhelming. I can’t say with 100% certainty how virtual visits will best be used, but based on several pilot programs under way at Partners, I have a hunch or two.

We have believed for some time that this technology should be limited to follow up visits, where the patient and physician already have a well-established relationship. Technologies such as Skype and Facetime allow for a robust conversation, but most doctors’ visits require much more than just conversation. For example, any time a physical exam is required, this technology will not work well. That’s why one of our first pilot studies was to implement video technology for mental health follow up visits (as did the doctor in Oklahoma).

Our early results are promising. It seems that virtual video visits for mental health offer both the provider and the patient important benefits. For many mental health patients, it can be stressful to travel to the doctor’s office. When a patient is being evaluated for a medication adjustment, for example, they are not at their best. The convenience of having a follow-up visit from their own home can be a big lift for these patients. On the other hand, doctors often feel that the home environment is particularly relevant in sorting out mental health problems. A virtual visit allows them to, in effect, conduct a virtual house call.

Rate Shock vs. Benefit Shock

Sep 21, 2013• 26

By ROBERT LASZEWSKI

Will we have rate shock?

It looks to me like consumers will have a choice when they get to look at the health plans available on the new “Obamacare” health insurance exchanges––rate shock or benefit shock. While there has been lots of focus on the issue of rate shock, I will suggest that just as big an issue may well be benefit shock—that consumers will look at what they will be getting for their premium payments and that they will be surprised at what their out-of-pocket costs will be and before they get anything.

The chart above was prepared by Covered California, the state-run California exchange. This chart does not include specific California plan premiums. What it does show is the net of subsidy cost a single person would pay at the various income points for the second lowest cost Silver plan, as well as the deductibles and co-pays they can expect to see from the standard Silver plan.

While the benefit plan structures may vary a bit from state to state, this gives us a pretty good idea of what consumers can expect in all of the states (click on chart to enlarge). A single person making $22,980 per year would face a premium, net of subsidies, of $121 per month. That’s pretty good.

Cleveland Clinic Trial of Breast Cancer Vaccine Moves Forward

Sep 21, 2013• 13

By Kathleen T. Ruddy, MD

A preventive breast cancer vaccine developed by Professor Vincent Tuohy of the Cleveland Clinic will be brought forward to the FDA for permission to begin clinical trials to see if it is safe and effective for use in women.

The vaccine was shown to be completely safe and 100% effective in preventing breast cancer in three animal models, (see study in Nature Medicine), and was also found to slow the growth of tumors that had already formed. The vaccine is especially powerful in inhibiting the growth of triple-negative breast cancer, the most aggressive form of the disease with the lowest survival rate.

Triple-negative breast cancer lacks estrogen, progesterone and Her2 receptors. It occurs in approximately 15% of cases is the kind of breast cancer most common in women who carry a BRCA mutation.

The initial clinical trials, called Phase I studies, will be conducted in two groups of volunteers, women with triple-negative breast cancer who have completed their treatment and are free of disease, and women who will be vaccinated shortly before undergoing bilateral prophylactic mastectomy (typically these are women like Angelina Jolie with BRCA mutations who elect to remove their breasts to lower their risk for cancer.)

The first group of women will be studied to determine the dose and effectiveness of the vaccine; the second will be studied to make sure the vaccine does not trigger an untoward immune response in breast tissue.

The vaccine targets an unique protein normally made only by women who are breastfeeding, alpha lactalbumin (ALA). In the 12 years Tuohy spent developing and researching his vaccine, he discovered that the majority of breast tumors express, or make, ALA. Priming the immune system with a vaccine so that it attacks any cell that makes ALA is the method by which Tuohy’s vaccine works.

Because the vaccine targets ALA, a protein necessary for successful lactation in healthy women, the vaccine would not be appropriate for use in women who are still in their childbearing years.

However, the majority of women diagnosed with breast cancer in the United States and other western countries are post-menopausal: at least 60% of the cases in the United States occur in women over 55; thus, Tuohy’s vaccine holds great potential as a preventive vaccine for the majority of women.

Five Reasons the Federal Insurance Exchange Glitch May Not Be That Big Of A Deal. Knock On Wood.

Sep 20, 2013• 10

By Dan Diamond

The Wall Street Journal broke the news Thursday night that a “pricing glitch” is plaguing the federal health insurance exchange software … with less than two weeks to go before the exchanges are supposed to launch.

Basically, the exchange’s calculator can’t do a pretty important piece of math: How much each consumer will need to pay for his or her specific coverage.

Glitches had been somewhat expected—there had been rumblings of technical problems, despite officials’ public vows of confidence—but it doesn’t make the Journal‘s scoop less of a story. Opponents of Obamacare will use any delay to raise fresh concerns about the law’s implementation, and even the most ardent supporters of the ACA acknowledge that having working software is crucial to a working rollout on Oct. 1.

And what happens to enrollment targets if the glitches aren’t quickly resolved and would-be customers get frustrated and turn away?

There are several potential interpretations and implications here, given that this story is bound up in both politics and policy. From my perch, I’d offer these five quick reactions to the Journal‘s scoop.

1. This news is not a surprise.
When reporting on the ACA’s rollout, especially since the Supreme Court’s ruling last June, officials and analysts kept raising the same question with me: Will the exchanges be ready in time?

Keep in mind, the exchanges are intended to combine an unprecedented mix of eligibility verification systems, subsidy calculations, and thousands of insurance products.
Add an additional factor—the pace of ACA implementation lagged between 2010 and 2012 because of the ongoing uncertainty over whether the law was even constitutional—and the level of complexity involved in getting the exchanges off the ground really is astounding.

There have been hints that these systems might not be ready. Federal officials announced over the summer that they would scale back the exchanges’ verification requirements until 2015. And the contractors charged with designing the systems might as well be working on the Siberian insurance exchange, given how they’ve ignored media requests.

2. The federal exchange isn’t the only one with glitchy software. State exchanges are having problems, too.
Oregon has already announced that it plans to delay the formal roll-out of Cover Oregon to continue beta-testing, and California (a state that has moved exceptionally quickly to implement health reform) was weighing contingency plans for Covered California, too.

As Caroline Pearson of Avalere Health told me a few weeks ago, “if California’s talking about contingency planning, then we need to acknowledge that any number of state-run exchanges may not be fully operational by Oct. 1.”

However, the federal exchange software takes on extra importance given the sheer number of states (36) and potential customers (32 million uninsured) that will be shopping through its exchange.

Get primed. This Daily Briefing primer offers a quick review of exchange operations.
Go deep. This Health Care Advisory Board webconference reviews challenges in patient enrollment; how the exchanges interact with Medicaid and employer-sponsored insurance, and implications for hospitals and health systems.

Continue reading…

A Troubling Strategy at Health IT Week

Sep 19, 2013• 16

By Adrian Gropper, MD

Health IT Week demonstrated a double barrel strategy to segregate patient information from provider information. Providers already have the power to set prices and health IT plays the central role.

By rebranding HIPAA as “Meaningful Consent” and making patients second-class citizens in Meaningful Use Stage 2 interoperability, providers and regulators are working together to keep it that way.

Essential consumer protections such as price transparency or independent decision support are scarce in the US healthcare system. The journalists are shouting from the rooftops.

There’s $1 Trillion (yes, $3,000 per person per year) of unwarranted and overpriced health services steering the Federal health IT bus with an information asymmetry strategy. Those of us that want to see universal coverage succeed need the information transparency tools to drive for changes.

Here’s how it works: The department of Health and Human Services (HHS) controls the health IT incentives and regulations. HIPAA applies to most licensed health services providers. Laboratories and devices are regulated by Medicare and the FDA.

Unlicensed services offered directly to patients, such as personal health records, web info sites and apps are regulated by the FTC. Separate regulatory domains facilitate the segregation of information and contribute to the lack of transparency by making patient-directed services use delayed and degraded information. This keeps independent advice from FTC-regulated service providers from illuminating the specific abuses.

The segregation of patient information from “provider” information is the current federal regulatory strategy. It’s even more so in the states. By making patients into second-class citizens, the providers can avoid open scrutiny, transparent pricing, and independent decision support.

Federal regulators then create a parallel system where information is delayed, diluted, and depreciated by lack of “authenticity”. This is promoted as “patient engagement”. For regulators, it’s a win-win solution: the providers support the regulation that enables their price fixing and many patient advocates get to swoon over patient engagement efforts.

The proof of this strategy became clear on the first day of Health IT Week – the Consumer Health IT Summit.

Finally Some Good News on Readmission Rates

Sep 19, 2013• 7

By Ashish Jha, MD & Thomas Tsai, MD

Why readmission penalties are controversial

Penalizing hospitals for high readmission rates has been pretty controversial. Critics of the program have argued that readmissions have little to do with what happens while the patient is in the hospital and are driven primarily by how sick or how poor the patient is. Advocates of the readmissions program increasingly acknowledge that while readmissions may not reflect the quality of care that occurred within the hospital, someone should be accountable for what happens to patients after discharge, and hospitals are the logical choice. While the controversy continues, there is little doubt that the metric is here to stay. This October, the CMS Hospital Readmissions Reduction Program (HRRP) will increase its penalty on excess readmissions from 1% to 2% of total hospital reimbursement.

So far, CMS has focused on readmissions that occur after patients are discharged with one of three medical conditions—acute myocardial infarction, pneumonia, and congestive heart failure. The data on the impact of the program are mixed: while readmission rates appear to be dropping, the penalties seem to be targeted towards hospitals that care for some of the sickest patients (academic medical centers), poorest patients (safety-net hospitals) and for heart failure, some of the best hospitals (those with the lowest mortality rates). No wonder the program has been controversial.

Why surgery may be different

In 2015, CMS extends the program to focus on surgical conditions, which provides an opportunity to think again about what readmissions measure, and what it might take to reduce preventable ones. And if you think about it, surgery may be different. Most patients who are admitted for Acute MI, CHF, and pneumonia are chronically ill and bounce in and out of the hospital, with any one hospitalization likely just an exacerbation of underlying chronic illness (especially true for pneumonia and heart failure). Not so for surgery—at least not for the major surgeries.

A Dozen Hospitals Are Laying Off Staff and Blaming Obamacare. Don’t Believe Them.

Sep 18, 2013• 19

By DAN DIAMOND

Hospitals tend to be among the largest employers in their communities — which means that any individual decision to lay off staff can have an outsized local impact. And taken together, a dozen recent announcements seem to paint an especially dire picture for hospitals (and their communities) around the nation.

For example, NorthShore in Illinois says it will lay off 1% of its workforce. The staffing cuts “ensure NorthShore remains well positioned to deal with the unprecedented changes brought on by the Affordable Care Act,” according to a memo from the health system’s chief human resources executive.

And California’s John Muir Health is offering staff voluntary buyouts ahead of ACA implementation. “We’re being paid less, and we either stick our head in the sand or make changes for the future so patients can continue to access us for their care,” according to John Muir spokesperson Ben Drew.

When Obamacare was being debated in Congress, its opponents tried to tar it with a deadly label: “the job-killing health law.” So is the ACA finally living down to its sobriquet?

Not exactly. While the recent news makes for provocative headlines, the devil’s in the details — and the financial reports.

A Closer Look at Industry Pressures

It’s clear that something is shifting in the hospital market. After years of employment growth, hospitals’ hiring patterns have largely leveled off. Collectively, organizations shed 9,000 jobs in May — the worst single month for the hospital sector in a decade.

Some of those decisions reflect industry-wide belt-tightening, as Medicare moves to rein in health spending by moving away from fee-for-service reimbursement and penalizing hospitals that perform poorly on certain quality measures.

And uncertainty around ACA implementation is trickling down to hospital staffing decisions, economists told me. Many organizations still aren’t sure how the pending wave of newly insured patients will affect their profit margins, given that many of these individuals may be sicker and will be covered by Medicaid, which reimburses hospitals at lower rates than Medicare and private payers.