Here’s my comment on a recent Health Affairs blog post from Heritage’s Nina Owcharenko whining about the ACA as a g’vermint takeover.I wrote “I’m really pissing myself about this one. Only in the bizzarro world of American politics can the nutjobs on the right, and not just any nutjobs but on the right but Nina’s actual colleagues at Heritage design the basics of a health care policy and then declare it something that’s antithetical to their very being. Furthermore, it’s only in bizzarro world of American politics that a massive expansion of PRIVATE health insurance legislated in the ACA is called a government takeover, or in Nina’s words puts the “trend toward government-based coverage on the fast track”. If Nina had bothered to check she’d realize that the vast majority of Medicaid enrollees — 66% according to KFF– are in private plans and the rest are being moved there. Yet this is another expansion of government!” Of course if you look at the Health Affairs version where they moderate comments, you’ll note that some of the words I wrote and the words they publish are slightly different
Above the Fold
Pre-Conferences kick off Health 2.0
We were coding up a storm yesterday (Saturday) at the Health 2.0 Developer Challenge Code-a-thon and that goes on today–you can even stop by the PariSoma Loft to see the live judging at 3pm — with $13,000 in prizes on the line.
But the main act is starting up TODAY with 4 fabulous pre-conferences. Don’t forget these are FREE to anyone registered to attend the main conference and to doctors, patients and employers as appropriate for their sessions. There’s also an Innovation Exchange with the Beacon Communities which has some public availability.
The Pre-Conferences: Patients 2.0 brings together more than 150 patient activists. Doctors 2.0 has several leading physicians on stage and in the audience, and more than 15 demos and active panel discussions. Employers 2.0 has leading employers again on stage and in the audience (Wanna meet Facebook’s head of benefits? -scan the badges!) and more demos than you can shake a stick at–as long as some cool case studies from Pfizer on wellness and Cisco on worksite clinics.Continue reading…
DC to VC: Health 2.0 Companies Pitch!
Health Innovation Week continues in San Francisco, but, this past Thursday, Health 2.0 zipped down to the Microsoft campus in Mountain View for “DC to VC” – a fabulously organized event by Rebecca Lynn & Ching Wu of Morgenthaler Ventures and MC’ed by our very own Matthew Holt. Despite the prominent names of the organizers, the stars of this show were really the eleven HIT startups from across the US selected from a list more than 125 companies who had pitched for a spot on the stage.
Up first were six companies in the Seed stage category. Each was under two years old and has raised less than $500K so far. They were followed by slightly older, slightly more experienced startups in the Series A category. These companies were under three years old and have received less than $1.5 million in funding.Continue reading…
Making Sense of Health Care Prices
Take a look at the chart below. It shows representative prices for a knee replacement for different patients in different settings. The most shocking thing about the chart is that prices for essentially the same procedure are all over the map. Here are some obvious questions:
- Why is the price of a knee replacement for a dog — involving the same technology and the same medical skills that are needed for humans — less than 1/6th the price a typical health insurance company pays for human operations? Why is it less than 1/3 of what hospitals tell Medicare their cost of doing the procedure is?
- How is a Canadian able to come to the United States and get a knee replacement for less than half of what Americans are paying?
- How are Canadians getting knee replacements in the U.S. able to pay only a few thousand dollars more than medical tourists pay in India, Singapore and Thailand — places where the price is supposed to be a fraction of what we typically pay in this country?
- Why do fees U.S. employers and insurance companies are paying vary by a factor of three to one, when foreign, and even some U.S., facilities are offering a same-price-for-all package?
It’s amazing how often people cannot see the forest for the trees. Think how many volumes have been written trying (and failing) to explain why our health care costs are so high. Sometimes the answers to complex questions are more easily found by asking the simplest of questions.
The Math of E/M Coding: When Does 5=1?
My typical Medicare patient expects me to deal with 5 or more problems in a single routine visit. There are usually around 3 old ones (e.g., diabetes, hypertension, hyperlipidemia) and at least 2 new ones (e.g., low back pain, fatigue). For those who come with handwritten lists, there may be as many as 10, including every health question that has come to mind over the past 6 months (Should I take a holiday off of Fosamax? Should I add fish oil? Do I need another colonoscopy? Is the shingles shot any good?).
Physicians who do procedures get paid for each one done to a single patient on a particular day. Medicare’s rule for this – the Multiple Procedure Payment Reduction Rule (MPPR) – says doctors should be paid 100% for the first procedure and 50% for each subsequent procedure up to 5. However, for those of us whose work is primarily cognitive rather than procedural, there is an important exclusion: the multiple-payment rule does not apply to E/M codes. In fact, the definitions of 99213 and 99214 unambiguously state, “Usually the presenting problem(s) are of . . . complexity.” Note the “(s)”! It clearly creates a double standard that favors doing procedures and places thoughtful solving of patients’ problems at a disadvantage.
So in my case, 5 or 10 or more separate patient problems equal one payment. The “(s)” in the AMA’s CPT book is the most outrageous injustice to primary care of this generation. Because of it, the AMA’s CPT committee is accountable for even more damage to primary care than is their RUC! Think how different life in primary care would be if the “(s)” were removed and you were paid 50% for each additional patient problem you addressed in a single office visit!
How Obama Hits Health Providers in Deficit Plan
President Obama’s populist message on taxes was replicated on the health savings side of his deficit-reduction plan, which would cut spending on Medicare and Medicaid by $320 billion over the next decade and $1 trillion in the following decade.
The bulk of the savings would come from companies that provide goods and services to the programs. Payments to drug companies would be slashed by $135 billion by offering seniors in Medicare the same discounts currently mandated for poor people in Medicaid. An additional $42 billion in program savings would be achieved by reducing payments to nursing homes and home health care agencies.
And those are just the major hits taken by health-care providers in the plan, which is already drawing fierce opposition from lobbyists for industries that get whacked. Rural hospitals, big city teaching hospitals, biotechnology firms, and durable equipment manufacturers also would be in for payment cuts under the Obama blueprint.
Major trade associations representing provider groups immediately blasted the proposal, playing the same jobs card the president is using. The Pharmaceutical Research and Manufacturers Association “opposes implementing Medicaid’s failed price controls in Medicare Part D,” the group said in a prepared statement. “Such policies would fundamentally alter the competitive nature of the program, undermine its success, and potentially cost hundreds of thousands of American jobs.”
Health 2.0 Launch! Finalists Announced
Since we first put it on at Health 2.0 in 2008, Launch! has introduced over 45 new companies and products, including Unity Medical, Remedy Ventures, TheCarrot, and the WSJ’s 2010 top (and not just in health!) start-up company, Castlight Health. Launch! is the first time a company has demoed at a conference, and the product must either be coming out soon or have been in very limited beta to this point. This year, we’re seeing some larger better funded companies on Launch! but everyone’s had to compete to get on and there are some teeny start-ups here that you’ve never heard of that might just blow you away. It’s 10 continuous 4 minute demos, and the winner gets a main stage spot next year, not to mention bragging rights. Who wins? The audience decides. Yes you can still get one of the last few tickets (but we’ll sell out in next day or two).
Below (in alphabetical order) for the first time, we’re thrilled to announce the Launch! finalists for 2011:
- Basis–There’s been lots of excitement in the Health 2.0 offices about getting hold of one of these devices. It looks like a watch but it tracks heart rate more than time. CEO Jef Holove will finally show us what they’re like.
- Clarimed–CEO Nora Iluri will show us her ambitious attempt to measure devices and much more in health care and communicate the results to lots of constituencies including consumers
- CareCoach–Almost everything we hear in a doctor’s office is lost by the time we get to the parking lot. But a visit to the doctor is an expensive and important time that should be captured, reviewed and shared with family. CEO Jeff Kozloff shows how CareCoach does that.Continue reading…
The Super Committee—Will We Get a Deal?
It’s back to work in Washington, DC and all the attention is now on the Super Committee and their goal of cutting spending by at least $1.2 trillion over ten years.
If the committee fails to come up with a plan that passes the Congress, there would be $1.2 trillion in automatic cuts. The health care special interests have reason to hope they will fail—the fallback cuts would only impact Medicare providers in a small way—2% in provider cuts—and not directly impact beneficiaries or Medicaid generally. Any Super Committee deal would likely be more far reaching if for no other reason than to protect the defense budget from the huge cuts the fallback would require.
But the fallback would not solve any of the systemic problems the health care entitlements face and only prolong the inevitable day of fiscal reckoning.
Even a $1.2 trillion reduction—$2.1 trillion with the additional $915 billion reduction in discretionary spending that was part of the deal—is only a down payment on solving America’s fiscal woes—we face a $10 trillion budget shortfall over the next ten years.
Will the Super Committee succeed? That’s the big question in Washington.
Why Patient Lab Data Should Be Liberated
I am admittedly not an expert on health IT, but I am a firm believer in the empowerment of patients to be the driver of her/his health decision making. So this whole discussion about lab data being available directly to the patient is of great interest to me. But it does seem like yet another instance of the two sides coming together not to listen to each other but to be heard by the other side. And as well know, this works so well for any relationship!
Each side’s view is represented roughly thusly:
Patients These are my data and I have the right to access them as soon as they are available.
Doctors We are worried that the sheer volume, complexity and irrelevance of (much) of the data will make it confusing and unnecessarily alarm the patient
Both arguments are valid, of course. But it is important to ask what lurks below the visible portion of each iceberg.
Let’s take the patient view. Why do I want immediate access to my data? Well, obviously, because it is mine, it represents the results of testing on my body, and the record should belong to me. I should be able to access it freely whenever I damned well please. I am also more than a little exasperated with having to wait sometimes days to hear from my doctor’s office about a result that has been available for a while, but was buried under the reams of paperwork on the MD’s desk or his/her assigning a low priority to my data. And I am most exasperated when my lab results get lost or otherwise never make it to me at all. Perhaps if I have direct and unfettered access, this will make thing more efficient for me as an individual.
Why Aren’t Medical Prices Infinity?
This blog continues my exploration of mysteries of health economics. The title of the blog may seem inane, but when a senior colleague asked me this question 25 years ago, it changed my life. And the answer helps us understand a lot about what is wrong with today’s healthcare system.
I was in my second or third year as an Assistant Professor at the University of Chicago when my brilliant senior (but still young) colleague Dennis Carlton asked me to explain how medical providers set their prices. I told him that we needed to throw the traditional textbook economics model of pricing out the window. This wasn’t a market where price sensitive consumers chose among homogeneous sellers, with the result that prices in competitive markets converged towards marginal cost. Instead, consumers had insurance that paid for all or nearly all medical bills. Moreover, patients were loyal to primary care physicians and their referral networks. As a result, patients rarely shopped around for the best price. This was when Dennis asked me why prices weren’t infinity. The question stumped me! I supposed that insurers would only pay usual, customary, and reasonable rates but that didn’t prevent providers from asking for infinity and occasionally getting it. Perhaps providers didn’t want to appear unseemly or were bound by ethical constraints. Or perhaps, as I ultimately responded, medical prices were inflating so rapidly that they would soon reach infinity.Continue reading…
