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Rate Shock vs. Benefit Shock

• 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

• 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.

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

• 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.

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A Troubling Strategy at Health IT Week

• 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.

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Finally Some Good News on Readmission Rates

• 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.

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

• 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.

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Inside the NHS Health IT Program

• 5

By Harriet Messenger

I had an opportunity to speak with NHS National Director for Patients and Information Tim Kelsey, who will be speaking at the at the Health 2.0 7th Annual Fall Conference on Monday, September 30th.


HM: Can you tell us a little bit about your vision for open data, transparency and participation. How do you believe this will actually transform the NHS?

TK: I believe that if we can create an environment in the health service in which data and information can freely flow, it will improve the quality of patient care because it will give doctors, clinicians and patients the tools they need to measure the quality of care in their environment. It also gives patients the opportunity to make more decisions themselves, of benefit to people with long-term conditions who may want to take more control of their own care, but also of benefit to people who want to look after their health and well being, and avoid interaction with the health services altogether.

HM: You often make reference to the ‘internet banking revolution’; how can this be applied to healthcare and how will actually benefit patients?

TK: In pretty much every area of our lives, digital technology has transformed the way we do things. A combination of transparency of data and our ability to participate with it to do things, has resulted in a revolution in the quality of customer experience, and so too has the cost of providing this service been reduced. It is not a perfect example – banking is not the same as healthcare – but at least it gives us an insight into what is possible. The story of online financial services in the UK started back in 1997 when online banking was launched. Those old enough to remember it will know just how skeptical the public were of doing their banking online. The issues of trust back then I think are to some degree comparable to healthcare today. Anyway, today in 2013, more than 22 million adults in this country only do online banking. It has been a phenomenal social shift. If you ask me what are the most important social transformations of our time, it was through a combination of been given access to our own data transparency and the ability to transact with it (pay our bills, and so on), participation, that that revolution was effected.

HM: To what extent do you see the patient influencing these kind of changes in the NHS? How do we encourage patients to embrace this?

TK: We in the NHS in England have a massive financial problem – and we are not alone, it is a problem that afflicts most healthcare systems. In the UK it has been estimated that over the next five to ten years we’re going to have a deficit of around 30 billion pounds in the cost of providing health care. We need to do something different to find new ways of creating better value for patients in healthcare. A model that stands out and suggests a new way forward is to get the patient – the customer – to do a lot more for themselves. We need to unleash the power of patients, get them managing their own health and healthcare, making the health service more effective by telling it how they want services to be delivered, and how they can be delivered more efficiently.

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Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google

• 2

By Elaine K. Swift and David McCormick

All of the state health insurance marketplaces (also known as exchanges) are online, but millions of expected users may have a hard time finding them.  Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites—through common keyword searches on Google, by far the nation’s dominant search engine. Poor search engine results can create serious barriers to shopping and enrollment, the major measures of success for marketplaces and, by extension, the success of the Affordable Care Act (ACA).

We used standard methods to assess Google results for the 17 marketplaces operated by 16 states and Washington, DC that offer individuals, families, and small businesses a place to shop for health care coverage.  Over three days in mid-September, we looked at results for keywords that data from Google show people are commonly using to search for health insurance. We examined both unpaid (or “organic”) and paid (or “sponsored”) results. Although research shows that unpaid results get more attention, paid results can also lead to page views.

Our preliminary findings show that marketplaces for four states—Idaho, Maryland, New Mexico, and New York—and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views.  In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one.

With enrollment in the marketplaces opening October 1 for coverage beginning January 1, this would be a good time to focus on search engine optimization (SEO), the process of increasing the rankings of unpaid or “organic” search results. Once implemented, SEO results can be seen quickly, especially for a topic as popular and important as new health insurance options. However, it requires analysis, planning, and time to implement.

Methods for Conducting Search Engine Result Testing

To test search engine results for state-operated health insurance marketplaces, we used the five keywords most effective in producing page views of a prominent healthcare-related website produced by a federal client: Affordable Care Act, affordable health care, health care, health insurance, and Medicaid.

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Understanding the Hospital Consolidation Numbers: The Centrality of Data Quality

• 9

By Bruce Levinson

Is hospital consolidation creating new efficiencies or does it give health care providers clout over health care insurers?  A well-publicized study published in Health Affairs last year by Robert Berenson, Paul Ginsburg, et. al said the latter:  hospital consolidation has resulted in “growing provider market clout.”

The Berenson study’s key conclusion is that growing hospital clout has resulted in insurers not aggressively containing their claims payments, a view that will stun every patient who has had a health insurance company deny coverage for a procedure, prescription or preferred health care provider.

Because the Berenson study’s finding are counterintuitive to consumer experience, and because they have been widely discussed in publications ranging from Forbes to National Journal, the Center for Regulatory Effectiveness, a regulatory watchdog with extensive experience in analyzing federal health policies, undertook an analysis to see if the study complied with the Data Quality Act (DQA).

The DQA, administered by the White House Office of Management and Budget (OMB), sets standards for virtually all data disseminated by the agencies.  Under the DQA, agencies may not use or rely on data in federal work products (reports, regulations) which don’t comply OMB’s government-wide Data Quality standards. Thus, unless the Health Affairs study complies with federal Data Quality standards, it is useless to Executive Branch policy officials.

The primary data source cited by the Berenson study as the basis for their conclusions regarding trends in relative clout between hospitals and health insurers is a well-respected, longitudinal tracking study which included interviews with heath care leaders from insurance companies, hospitals, and academia.   The health care interviews, however, were only conducted in a single year following a change in longitudinal study’s methodology.

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Give Us Our Damn Lab Results!!

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By ALICE LEITER & DEVEN McGRAW

Two years ago, the Department of Health and Human Services released proposed regulations that would allow patients to obtain their clinical lab test results directly from the lab, rather than having to wait to receive the results from their health care provider.  CDT and other consumer groups enthusiastically supported this proposed rule at the time of its release.

Yet an Administration largely characterized by increasing patient access to health information seems inexplicably unable to close the deal on this important access initiative.  As a result, patients still must wait for their providers to contact them with test results.

Under the current regulations, known as the Clinical Laboratory Improvement Amendments (CLIA), laboratories are restricted from disclosing test results to patients directly.  Instead, labs can only send the test results to health care providers, people authorized to receive test results under state law or other labs. Only a handful of states permit labs to send patients test results directly, and some of these states require the provider’s permission before patients can have the results.  The HIPAA Privacy Rule reflects this restriction, exempting CLIA-regulated labs (which are the great majority of clinical labs) from patients’ existing right to access their health information.

This existing regime has put patients at risk. A 2009 study published in the Archive of Internal Medicine indicated that providers failed to notify patients (or document notification) of abnormal test results more than 7 percent of the time. The National Coordinator for Health IT recently put the figure at 20 percent.  This failure rate is dangerous, as it could lead to more medical errors and missed opportunities for valuable early treatment.

The 2011 proposed regulations would modify CLIA to permit labs to send results directly to patients, and they would also modify the HIPAA Privacy Rule to give patients the right to access or receive their lab results.  Contrary state laws would be preempted.  Patients would have the ability to request their lab results in a particular form or format, as with their other health information; for example, patients could request a paper copy of their test results, or to have the results sent electronically to the their personal health records

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