The Health Care Blog – Page 616 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Breaking the Curve of Health Care Inflation

Aug 9, 2012• 2

By Maggie Mahar

The evidence is building: As we move toward making the Affordable Care Act a reality, Medicare spending is slowing, and even in the private sector, for the first time in more than a decade, insurers are focusing on reining in health care costs.

The passage of reform legislation two years ago prompted a change in how both health care providers and payers think about care. The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much they will pay out to an desperately ill patient over the course of a year –or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to ”manage” the cost of care–but they won’t be able to do it by denying needed care.

As for providers, they, too, will be under pressure. A growing number will no longer be paid “fee for service” that rewards them for “volume”–i.e. “doing more.” Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses. Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater “value” for health care dollars– better outcomes at a lower cost.

This summer the Supreme Court’s decision sealed the deal. The ACA is constitutional. Health care reform is here to stay.

The Most Powerful Health Care Group You’ve Never Heard Of

Aug 8, 2012• 17

By Brian Klepper and Paul Fischer

Excessive health care spending is overwhelming America’s economy, but the subtler truth is that this excess has been largely facilitated by subjugating primary care. A wealth of evidence shows that empowered primary care results in better outcomes at lower cost. Other developed nations have heeded this truth. But US payment policy has undervalued primary care while favoring specialists. The result has been spotty health quality, with costs that are double those in other industrialized countries. How did this happen, and what can we do about it.

American primary care physicians make about half what the average specialist takes home, so only the most idealistic medical students now choose primary care. Over a 30 year career, the average specialist will earn about $3.5 million more. Orthopedic surgeons will make $10 million more. Despite this pay difference, the volume, complexity and risk of primary care work has increased over time. Primary care office visits have, on average, shrunk from 20 minutes to 10 or less, and the next patient could have any disease, presenting in any way.

By contrast, specialists’ work most often has a narrower, repetitive focus, but with richer financial rewards. Ophthalmologists may line up 25 cataract operations at a time, earning 12.5 times a primary care doctor’s hourly rate for what may be less challenging or risky work.

Will Government-Directed Healthcare in Mass. Really Contain Costs?

Aug 7, 2012

By Josh Archambault

Governor Patrick signed a new healthcare law today aimed at cost containment, and the rhetoric soared assuring all that Massachusetts has “cracked the code on healthcare costs.” Unfortunately, with no debate on the underlying bill in the House of Representatives and only little debate in the State Senate, the 349-page statute, which was released just 14 hours before the legislative final vote, is little understood and brimming with unintended consequences.

Real cost-containment is only possible when we encourage patients to reward low-cost, high-quality providers with their business. We’ve said it over and over again throughout this process.

Instead, the law being signed today re-imagines and repackages so many failed top-down approaches from the past. The acronyms may have changed, but this bill looks a lot like past approaches that trusted government, not patients, to drive big, systematic changes in how we purchase healthcare. For some reason our state policymakers expect completely different results this time around.

Rather than provide financial incentives for individual patients to take charge of their own medical care, this legislation rearranges the system based on accountable care organizations (ACOs) and governmentally-imposed changes in payment methods. Real-life evidence that these approaches contain costs is mixed at best; as a result, the law misses the mark by a long shot and will not lead to long-term, sustainable containment of health care costs.

Making Good Health Care Companies Great

Aug 7, 2012

By John Irvine

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Who am I? Why am I here? Does it really matter anyway? Bestselling business author and corporate historian Jim Collins(“From Good to Great”, “Built to Last: Successful Habits of Visionary Companies ”) has made a career by asking executives unused to such introspective philosophical questions to stop and think about the fundamental assumptions at work in their businesses. Collins has found that the most successful companies (think Google, Apple, Microsoft, probably notFacebook) learn to ask the key questions that keep them focused on what they’re supposed to be doing and teach them to avoid making the mistakes that cause lesser, more mortal companies to trip up over their own feet. Not long ago THCB was on hand to catch Collins and bestselling author (“Getting Things Done”) David Allen speak at an exclusive invitation-only healthcare forum hosted by the Denver-based Breakaway group. In this interview, Breakaway group CEO Charles Fred talks with THCB founder Matthew Holt about his organization’s innovative and very successful approach to teaching healthcare professionals to work with new technologies.

An Important Day for China in Healthcare. What’s next?

Aug 7, 2012• 4

By Per Stenvall

On June 26, 2012, China’s first wholly foreign-owned private hospital opened its doors to patients in Shanghai. We are hopeful that this is the start of a broader trend of increasing private participation as China upgrades its healthcare services sector.

Anybody who has spent any significant time in a public Chinese hospital knows that there are few greater unmet needs in China than those existing in the healthcare services sector. China’s public hospitals are overcrowded and there are few alternatives, even for those willing to pay a premium for higher-quality care, shorter waiting times, and more personalized service.

Private investors – foreign and Chinese—have been eyeing China’s private healthcare services industry since the Chinese government began experimenting with limited private participation in 1989.

Progress since then has been slow. As of 2012, a dozen years after the start of the healthcare reforms, around 95% of all hospital beds in China are still in public hospitals, and there are only a dozen or so Sino-Foreign hospital joint ventures (mainly providing outpatient services to holders of private insurances and a very small segment of affluent Chinese nationals in first-tier cities like Shanghai, Beijing and Guangzhou).

Will the next ten years see more significant developments? This depends to a large extent on the Chinese government’s willingness to allow foreign participation in the sector.

How Doctors Die

Aug 6, 2012• 448

By KEN MURRAY, MD

Years ago, Charlie, a highly respected orthopedist and a mentor of mine, found a lump in his stomach. He had a surgeon explore the area, and the diagnosis was pancreatic cancer. This surgeon was one of the best in the country. He had even invented a new procedure for this exact cancer that could triple a patient’s five-year-survival odds—from 5 percent to 15 percent—albeit with a poor quality of life. Charlie was uninterested. He went home the next day, closed his practice, and never set foot in a hospital again. He focused on spending time with family and feeling as good as possible. Several months later, he died at home. He got no chemotherapy, radiation, or surgical treatment. Medicare didn’t spend much on him.

It’s not a frequent topic of discussion, but doctors die, too. And they don’t die like the rest of us. What’s unusual about them is not how much treatment they get compared to most Americans, but how little. For all the time they spend fending off the deaths of others, they tend to be fairly serene when faced with death themselves. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care they could want. But they go gently.

Of course, doctors don’t want to die; they want to live. But they know enough about modern medicine to know its limits. And they know enough about death to know what all people fear most: dying in pain, and dying alone. They’ve talked about this with their families. They want to be sure, when the time comes, that no heroic measures will happen—that they will never experience, during their last moments on earth, someone breaking their ribs in an attempt to resuscitate them with CPR (that’s what happens if CPR is done right).
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Lessons from MinuteClinic

Aug 6, 2012• 34

By John Goodman

After entering the clinic a thought occurred to me: why do we need doctors? Then a second thought: why do we need nurses?

Ah, but I’m getting ahead of myself.

About a decade before the Obama administration started touting electronic medical records and evidence-based protocols there was MinuteClinic. The entity came into existence primarily to cater to patients paying out of pocket.

There was no need for a law requiring price transparency. In every market where the dominant buyers are patients spending their own money, prices are always transparent. MinuteClinic posts its prices on a computer screen and on readily available pamphlets. Clearly, the organization is competing on price. Entities that compete for patients based on price usually compete on quality as well. One study found that MinuteClinic nurses following computerized protocols follow best practice medicine more consistently than conventional primary care physicians. They also do a pretty good job of knowing what kind of medical problems they are competent to handle and which problems need referral to a physician.

Wherever you find price competition you usually also find that providers are respectful of your time. As the name “MinuteClinic” implies, this is an organization that knows you value your time as well as your pocketbook. I couldn’t help but wonder if the entire health care system might be this user friendly, if only the third-party payers weren’t around.

For the first 15 minutes of my 20 minute visit, the nurse barely looked at me. She was sitting in front of a computer screen typing in my answers to her questions, as she went through the required decision tree. I didn’t mind. Mine was a minor problem and I did not want to pay for more sophisticated service.

Numbers Don’t Lie — The EHR Market Must Consolidate

Aug 6, 2012• 4

By Conor Green

According to CMS, through May of this year, 2,400 hospitals and 110,000 eligible professionals have received $5.7 billion in incentive payments for ensuring meaningful use of electronic health records, representing about half of all eligible hospitals and about 20% of all eligible providers.

Despite this widespread adoption EHRs, reliable market share data by vendor is still very hard to come by. So, when CMS recently updated its attestation data for midyear 2012, we took notice. Attestation, remember, is the process by which practitioners legally verify that they have used an EHR in way that merits one of those incentive payments. The data set includes more than 77,000 different attestations from 2011 through May of 2012 (note that it is not immediately clear why the data set has different totals than the CMS press release).

The sheer number of options for hospitals and providers stood out to us immediately. There are 405 separate EHR vendors that hospitals or providers have used to attest to meaningful use, with 336 of these providing ambulatory EHR products. It’s worth pausing here to note that by our count of the data found on the CMS Certified Health IT Product List, there are more than 550 separate ambulatory vendors with complete EHRs approved by CMS, meaning that despite the huge number of options, there were still well over 200 approved ambulatory vendors that have not had a single user qualify for an incentive payment yet!

Despite this enormous number of options, users attesting were fairly concentrated in the top vendors. Of these 336, the top 15 vendors represented 75% of all providers attesting. On the inpatient side, this concentration was even more pronounced, with the top 6 representing 75% of the total hospital attestations.

When we organize and dig into the data, a few other points stand out.

Is the Fact that I Am a Woman Considered a Pre-Existing Condition?

Aug 5, 2012• 121

By Maggie Mahar

The male body has long been considered the “standard” for health care coverage. Having a woman’s body is seen as an expensive anomaly, and women pay dearly for being different.

When they buy their own health insurance in the individual market, women must lay out an extra $1 billion a year, simply because they are women. Some argue that this is fair: after all, a woman could become pregnant, and labor and delivery are costly.

But the truth is that, even when maternity benefits are excluded, one-third of all health plans charge women at least 30 percent more, according to a report released just last month by the National Women’s Law Center.

In 36 states, “92 percent of best-selling plans charge 40-year-old women more than 40-year-old men,” the Center reports, and “only 3 percent of these plans cover maternity services … One plan in South Dakota charges a woman $1252.80 more a year than a 40-year-old man for the same coverage.”

Today, less than half of American women can obtain affordable insurance through a job, which explains why millions buy their own insurance in the individual market. In that market, just 14 states ban gender rating: California, Colorado, Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Mexico, New Jersey, New York, North Dakota, Oregon, Vermont, and Washington.

Pricing based on gender also plagues the small group market, where insurers frequently jack up premiums if a small or mid-size business employs too many women. This means that many of these employers just can not afford to offer insurance. Only 17 states address the problem.

You Have to Break Some Eggs If You Want to Make an Omelet

Aug 5, 2012

By David Dranove

In my last blog I explained how at one time our nation’s healthcare budget was relatively small and our economy was robust, so that economic growth could accommodate rising health spending and still allow us to spend more on other goods and services. Today our healthcare budget is huge and growing, while our economy stagnates. Economic growth is barely enough to pay for rising healthcare spending, with little left over to buy more of anything else. In the next few blogs I will explore our options for cutting health spending. To the extent that economic theory and empirical evidence allows, I will also discuss the likely consequences. It should come as no surprise to say that all of these options entail some risks. But if we are to avoid putting all our eggs in the healthcare basket, then we must decide which risks are worth taking.

A simple fact of accounting guides my analysis: If we want to spend less money on medical services, then we either (a) pay lower prices for the services we buy, (b) substitute away from high price services in favor of lower priced alternatives, or (c) purchase fewer services. There are no other options. Moreover, we can do these things either by government fiat or through markets and incentives. In this blog I explore options (a) and (b), mainly focusing on Medicare.

The Affordable Care Act calls for substantial reductions in Medicare fees, providing the largest anticipated cost savings in the ACA. (Private insurers relied on market forces to reduce provider fees in the 1990s, only to see providers gain the upper hand and sharply increase fees in the 2000s.) It is clear that the federal government has the power to reduce Medicare fees, but should it? What are the consequences?