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The Arkansas Experiment: Is the ‘Private Option’ a Realistic Plan For Medicaid?

Apr 17, 2013• 1

By Naomi Freundlich

Arkansas is now the first state to use Medicaid expansion dollars to buy private coverage for many of its 250,000 newly eligible residents rather than enroll them in the existing Medicaid program. This week the Arkansas House of Representatives approved the plan, followed by the Senate, to confirm that the state will be implementing this “market-based approach” to expanding Medicaid.

The idea of buying private insurance for Medicaid recipients is emerging as a “conservative compromise” for some of the 24 states (home to more than 25 million uninsured residents) leaning toward rejecting federal funding the Affordable Care Act provides for the expansion. In the original legislation, the ACA required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, $15,870 for an individual or $32,499 for a family of four. The federal government would fully cover the costs of this expansion for two years, with states gradually having to contribute 10% by 2020. Last summer, the Supreme Court struck down the Medicaid expansion requirement, allowing states to refuse federal funding and opt out of the expansion.

But most of these states, including Florida, Texas and Indiana, are leaving a lot of money on the table—from hundreds of millions to $1 billion or more in federal funding. Under pressure from healthcare providers and other interested parties, some governors view premium assistance programs that move the poor, disabled and frail elderly to the state insurance exchanges to buy private insurance as a way to capture this windfall without appearing to embrace ObamaCare.

In Missouri, for example, Republican state legislator Jay Barnes calls the Obama administration’s plan for Medicaid expansion a “one-size-fits-all, far-left-wing ideological path.”

Will Your Health Insurer Pay to Train Your Doctor?

Apr 16, 2013• 8

By John Schumann, MD

Lost in the weeds of President Obama’s budget proposal is a 10-year, $11 billion reduction in Medicare funding for graduate medical education (GME). GME is the “residency” part of medical training, in which medical school graduates (newly minted MDs and DOs) spend 3-7 years learning the ropes of their specialties in teaching hospitals across the country.

Medicare currently spends almost $10 billion annually on GME. One-third of that is for “Direct Medical Education” (DME), which pays teaching hospitals so that they in turn can provide salaries and benefits to residents (current salaries average around $50,000/year, regardless of specialty; there are variances by region). No problem there.

The proposed cuts come from the Medicare portion known as “Indirect Medical Education” (IME) payments. Though IME accounts for two-thirds of the Medicare GME pie, it’s not easy for hospitals to itemize what exactly it is they provide for this significant amount of funding. Instead, hospitals bill Medicare based on a complex algorithm that includes the ‘resident-to-bed’ ratio, among other variables.

A 2009 Rand Corporation study commissioned by Medicare to evaluate aspects of residency training called on the government to tie IME payments directly to improvements in educational and hospital quality, lest the money be perceived to be going down a series of non-specific sinkholes. That idea has caught on, and legislators in both parties now see the healthy IME slice of Medicare education funding as a plum target for cost-cutting, as the direct benefits are difficult to enumerate, let alone quantify.

This has medical educators very worried that we will have to do more with much less (disclosure: I am one).

The Public Votes! Votes for Health Care!

Apr 16, 2013

By Dave Whitlinger

This Saturday we opened voting to the public, giving the people a chance to select the designs they like best for the Patient Portal for New Yorkers. The Patient Portal will be a highly secure website allowing New Yorkers to log in to access their own medical records, with the same ease and efficiency with which they have accessed their financial transactions for years.

Since we expect patients to use the Patient Portal regularly (in order to find out about recent lab results or prescriptions, or just as a reminder to schedule their next physical) we aim to create an interface that is both pleasant to look at and easy to use.

In January of this year, we opened a challenge that invited designers and software developers to submit prototypes for what that interface should look like. And now that the best of those designs are in, we are letting the public—those who will ultimately use the portal—rank the ones they like the most. Voting will be open until April 23rd, and we ask that you take a look and help us determine the interfaces you find the clearest, most straightforward and user-friendly.

An Indecent Proposal That Just Might Solve the Primary Care Crisis: Meet the 35 Hour Work Week

Apr 16, 2013• 34

By Leslie Kernisan, MD

A few weeks ago, The Health Care Blog published a truly outstanding commentary by Jeff Goldsmith, on why practice redesign isn’t going to solve the primary care shortage. In the post, Goldsmith explains why a proposed model of high-volume primary care practice — having docs see even more patients per day, and grouping them in pods — is unlikely to be accepted by either tomorrow’s doctors or tomorrow’s boomer patients. He points out that we are replacing a generation of workaholic boomer PCPs with “Gen Y physicians with a revealed preference for 35-hour work weeks.” (Guilty as charged.) Goldsmith ends by predicting a “horrendous shortfall” of front-line clinicians in the next decade.

Now, not everyone believes that a shortfall of PCPs is a serious problem.

However, if you believe, as I do, that the most pressing health services problems to solve pertain to Medicare, then a shortfall of PCPs is a very serious problem indeed.

So serious that maybe it’s time to consider the unthinkable: encouraging clinicians to become Medicare PCPs by aligning the job with a 35 hour work week.

I can already hear all clinicians and readers older than myself harrumphing, but bear with me and let’s see if I can make a persuasive case for this.

Letting the Data Speak: A Fresh Look at Health Care Cost Growth

Apr 16, 2013• 16

By Frank de Libero

In this post I recast the visual display of international health care expenditures. For select OECD countries, this clearly shows the growth of average costs has been moderating while U.S. cost-growth has been accelerating. The graph methodology is discussed along with a caution about marginal thinking. A conjecture is presented as to why the OECD cost-growth is moderating followed by a couple thoughts for action.

What’s Usually Presented
There are many graphs published of international health care expenditures (HCE). Some remind me of multi-colored electric cables strung together, except for one cable that strays from the group. Others are simpler but their message is obscured with chart junk.Continue reading…

Building a Better Health Care System: The Incentive Cure

Apr 15, 2013

By Francois de Brantes

Every day, millions of health care workers wake up and get ready to offer one of the noblest of services – to try and heal and bring comfort to the sick. They do valiant work, day in and day out, even as they confront extrinsic incentives that chip away at their mission and souls.

What are “extrinsic incentives?”

Consider this scenario. You’re driving a year-old car, and the engine light pops on. The car is under full warranty, so you bring it into the dealer. The problem is fixed quickly at no charge. This simple interaction between the buyer and provider of a service illustrates the broader and essential role of extrinsic (external) and intrinsic (internal) incentives.

Intrinsically, most of us want to do the right thing for ourselves, personally and professionally. You want to maintain the car well, so it retains its value and gets you safely from one place to another. The dealer wants to do the best possible job to keep you happy, so you’ll buy from him again. If the car is serviced well and doesn’t need extra repairs, he does well and so do you.

User Fees for Electronic Health Records?

Apr 15, 2013• 8

By Brian Ahier

President Obama has released his 2014 budget proposal, which includes $80.1 billion in spending for theDepartment of Health and Human Services (HHS), an increase of $3.9 billion. The proposed budget for The Office of the National Coordinator for Health IT (ONC) would increase its $61 million budget to $78 million, a 28% increase. The plan also includes a $1 million fee for electronic health record vendors that would almost certainly be passed along to users of the systems.

“In addition to the expanding marketplace and corresponding increase in workload for ONC, much of the work to date has been funded using Recovery Act funds scheduled to expire at the end of FY 2013. Consequently, a new revenue source is necessary to ensure that ONC can continue to fully administer the Certification Program as well as invest resources to improve its efficiency,” the ONC explains in the budget proposal appendix.

In particular, the fee could be used to fund:

Development of implementation guides and other forms of technical assistance for incorporating standards and specifications into products
Development of health IT testing tools that are used by developers, testing laboratories and certification bodies
Development of consensus standards, specifications and policy documents related to health IT certification criteria
Administration of the ONC Health IT Certification Program and maintenance of the Certified Health IT Product List
Post-market surveillance, field testing and monitoring of certified products to ensure they are meeting applicable performance metrics in the clinical environment

Is Patient Engagement the Solution…or a Healthcare Urban Legend?

Apr 14, 2013• 33

By AL LEWIS

The following statistic from the Centers for Disease Control and Prevention (CDC) never fails to shock: the 133-million adults – or “nearly 1 in 2” — with chronic disease account for 75% of spending. Engaging those high utilizers, the story continues, will help bring healthcare spending under control.

This storyline is a classic healthcare urban legend. Essentially nothing in that paragraph makes sense as a matter of policy, or even arithmetic.

Yes, the CDC got their arithmetic wrong. 133-million Americans comprise about 60% of adults, not “nearly 1 in 2.” Second, their definition of “chronic disease” specifically includes stroke, which is a medical event, not a chronic disease, and cancer, many of which would not fit that definition either. (Sloppy editing and arithmetic is a CDC trademark. They also observe that ”almost 1 in 5 youth…has a BMI in or above the 95^th percentile” on their growth chart, which of course is mathematically impossible as written.)

Third, speaking of definitions, how are they defining “chronic disease” so broadly that 60% of us have at least one? Are they counting tooth decay? Dandruff? Ring around the collar?

Corrected or Not, The Statistic Itself Makes No Sense

The statistic is intended to demonstrate that a concentration of costs among people with out-of-control chronic disease but actually shows the opposite. It shows a diffusion of costs, not a concentration. 60% of adults accounting for 75% of spending – or even the incorrect 50% of adults accounting for 75% of spending — is about as far from a 20-80 rule as one can get. Basically costs are not concentrated in ongoing day-to-day chronic disease.

Second, that 75% covers all expenses of that 60%, not just being out of control and needing to go to the hospital, which seems to be the underlying assumption behind the flurry of activity designed to engage these people and control their conditions. Quite the contrary: in many conditions (rare diseases, high blood pressure and asthma come to mind) preventive drugs already overwhelm medical events as a expense category. In a typical commercial or even TANF Medicaid population, only about 10% of hospitalizations are for the five “common chronics” of asthma, diabetes (and its complications), CAD, COPD and heart failure. (In Medicare this percentage and absolute number are much higher – that is indeed a population where control of chronic disease matters.)

Designing the Doctor of the Future

Apr 14, 2013• 20

By Jacob Scott, MD, Ali Ansary, & Sandeep Kishore

At the turn of the 20th century, we built a healthcare system on responding to acute, curative, episodic issues. This system saw the eradication of many diseases and the advent of vaccinations and new treatments. The model was truly developed to be a “sickcare system,” which was what we needed at the time, and saw huge successes.

Fast forward 100 years and Americans are sicker than ever — but with different illnesses. What’s more, there is finally a national consensus that our healthcare system is broken. With increasingly tragic consequences, the reactionary medical paradigm has not provided the preventive care or chronic illness management that our culture needs. Healthcare spending currently consumes 17 percent of our GDP and without a radical shift in thinking, this number may grow even higher.

Sadly, patients are not the only ones suffering. The status quo is breeding a morale crisis among our nation’s doctors. If you asked one of the many thousands of medical students who are just beginning their fall semester why they chose medicine, many of them would give you confused, anxious responses about the field they are entering. This does not bode well for the health of future generations.

Last Spring, we met at TEDMED, an annual “grand gathering” in Washington, DC where forward thinkers from all sectors explore the promise of technology and the potential of human achievement as it pertains to health and medicine. Here, we presented our respective positions. One of us, Ali, argued that new technologies will actively change our health behavior. Another, Sunny, argued that we needed systems thinking in public health, focusing on the causes of the causes. Yet another, Jacob, argued for stopping the “imaginectomies” and fostering creativity in medical training by rethinking selection criteria and curricula for entrance to medical school.

The Economics of Google Glass in Healthcare

Apr 14, 2013• 4

By Kyle Samani

A lot of people think Google Glass can be used as a development platform to create amazing healthcare apps. So do I.

Many of these ideas are relatively obvious, and many of them could be relatively simple to develop. But we won’t see most of them commercialize in the first year Glass is on the market. Maybe even 2 years. Why?

The most obvious analogy to Glass is the iPhone. It’s a revolutionary new technology platform with an incredible new user interface. Glass practically begs the iPhone analogy. Technologically, the analogy has the potential to hold true. But economically, it does not. Because of the economics of Glass, many of these great ideas won’t see the light of day anytime soon.

First, there’s the cost. Glass will run a cool $1500 when it lands in the US this holiday season. The most obvious analogy to Glass is the iPhone. It’s a revolutionary new technology platform with an incredible new user interface. Glass practically begs the iPhone analogy. Technologically, the analogy has the potential to hold true. But economically, it does not. Because of the economics of Glass, many of these great ideas won’t see the light of day anytime soon. There’s no opportunity for a subsidy because Glass doesn’t have native cellular capabilities.