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CLASS-Gate

I’ve written previously about the looming train wreck from Obamacare’s new long-term care entitlement for the elderly, called the CLASS (Community Living Assistance Services and Support) Act. Democratic Senator Kent Conrad (D., N.D.), you may recall, once described the CLASS Act as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” The Obama Administration strongly supported the CLASS Act’s inclusion in the Affordable Care Act, and Conrad ended up voting for it anyway.

However, the case for the CLASS Act has been rapidly unraveling. In February, HHS Secretary Kathleen Sebelius testified before the Senate Finance Committee, admitting for the first time that CLASS is “totally unsustainable.” Under questioning by Sen. John Thune (R., S.D.), she pointedly refused to rule out an individual mandate that would force everyone to join the program. Though Sebelius assured Thune that she had broad authority to fix CLASS’ structural problems, I obtained a Congressional Research Service report that stated the opposite. In the July/August issue ofForeign Affairs, former White House budget director Peter Orszag proposed an individual mandate as one of “the only solutions” to CLASS’ unsustainability.

So, we’re all in agreement that CLASS is a mess that could cost taxpayers hundreds of billions of dollars. So why was it included in our new health law in the first place?

The reason is simple: budget gimmickry. CLASS will rake in $86 billion in premiums from 2012-2021, but pay out substantially more than that over the long-term, rapidly generating deficits and bankruptcy. However, the Congressional Budget Office can only score the law’s impact over the next ten years, a period in which CLASS “reduces” the deficit. The claim that Obamacare was budget-neutral was critical to winning the approval of skittish moderate Democrats.

And now, today, a new Congressional investigation led by John Thune reveals that the Obama Administration knew all along that CLASS was unsustainable. “As a result of this investigation,” the authors write, “it is now clear that some officials inside HHS warned for months before passage that the CLASS program would be a fiscal disaster. Within HHS the program was repeatedly referred to as ‘a recipe for disaster’ with ‘terminal problems.’”

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Health Exchanges — A New Approach

Why don’t we think about the Exchanges as a place for people to choose their health care, not just their health insurance?

As the Exchanges are being designed, we have a great opportunity to rethink how to help people choose a physician for their care, but our current mindset may get in the way of developing innovative approaches.

Under the Affordable Care Act, each state is expected to establish “health benefit exchanges” for individuals and small employers in order to “facilitate the purchase of qualified health plans.”  This is consistent with the concept of health insurance exchanges that has been developed over many decades.  In this model – used by many large employers as well as existing exchanges such as CBIA’s Health Connections and the Massachusetts Health Connector – the individual consumer or employee is given a choice among several health insurers.

The consumers are given information about the quality, patient satisfaction, and provider networks of each insurer to help them choose the one that best meets their needs, and healthy competition among the health insurers is expected to drive improved value for consumers.  The consumer makes this choice upon initial enrollment and annually thereafter.  Once the consumer has chosen an insurer, the second step is to choose a provider from the list of providers with which the insurers has contracts.  It is seen as a two-step process: (1) choose an insurer, and (2) choose a provider.Continue reading…

Maryland Regulators Holding Hospital Costs in Check

President Obama’s health care reform bill is filled with experiments on how to hold down health care costs.  There will be bundled payments for episodes of care and extra payments for raising quality standards. It calls for the reorganization of hospitals and physician practices into “accountable care organizations,”  which will share in savings if their costs fall below previous levels.

What’s not in the legislation is old-fashioned hospital rate regulation, which only one state in the nation uses. The latest results from Maryland suggest rate regulation works.

The state’s Health Services Cost Review Commission (HSCRC) announced earlier this week that average costs per stay at Maryland’s 51 hospitals rose just 2 percent in 2010, significantly less than the 3 percent national average. Since 1977, when rate regulation went into effect, hospitals costs in Maryland have experienced the lowest cumulative growth rate of any state in the nation, going from 26 percent above the national average to almost exactly average, according to data contained in HSCRC’s latest annual report .

Maryland, which had the sixth highest hospitalization costs among 50 states and the District of Columbia in the mid-1970s, today ranks squarely in the middle of the pack. Its $10,983 in average costs per equivalent admission in 2010 was slightly less than the $10,996 national average.

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5 Ways You Can Avoid Being Misdiagnosed

Billionaire Teddy Forstmann has apparently been diagnosed with a serious form of brain cancer.  There’s a tragic twist to the story: according to Fox Business News, Forstmann believes that for more than a year, he had been misdiagnosed with meningitis.

ABC News wonders:

How could such a misfortune befall a billionaire —- a man able to afford the best doctors, best technology and the most sophisticated diagnostic tests?

They’re missing the point.  Misdiagnosis happens with shocking regularity – as much as 44% of the time, depending on the illness.

I’m sure that, as with most things, being a billionaire is better.  But as a neurosurgeon quoted by ABC News points out, even for a billionaire, getting the right care is “still a bit of a crap shoot.”

So how can you improve your odds?  Here are 5 tips that work.

1.  Know your family history – and remind your doctor of it. Don’t assume your doctor remembers that time you told him that two of your aunts died of breast cancer, or that your grandfather and father have a history of malformed blood vessels in their brains.  Research studies have shown that a family history may be a better predictor of disease than even genetic testing.  Find out about your family’s medical history, write it down (the Surgeon General has a good on-line tool to help you do this), and make sure your doctor knows about it – especially if you’re sick and they’re trying to decide what’s wrong.

2.  Ask questions.  The typical doctor sees as a many as 40 patients a day, spending 15 minutes or less with each one.  It’s all too easy to be referred to a specialist and start treatment without having all of your questions answered.  But asking questions won’t just make you feel more comfortable – it can disrupt your doctor’s thought process and make him think about your case in a way that may save your life.  Dr. Jerome Groopman, one of the world’s foremost researchers on how doctors think (he’s written the definitive book on it) agrees:

“Doctors desperately need patients and their families and friends to help them think. Without their help, physicians are denied key clues to what is really wrong. I learned this not as a doctor but when I was sick, when I was the patient.”

You can find some useful tips on how to do this at the U.S. government’s web site, called “Questions are the Answer.”

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Urbanspoon Founder Gets Into Insurance


Ever since I helped create Urbanspoon I’ve had a penchant for building software that’s easy to use, mildly provocative and fun. Those ingredients are a potent combination when mixed in the right proportions.

My most recent project is PickHealthInsurance, which helps consumers pick a health insurance plan. I released the first version yesterday and it quickly shot up to #1 on Hacker News, my favorite startup news site. It turns out that self-employed people everywhere are having trouble picking insurance.

How did a lowly software engineer like me end up sticking my nose into the insurance business?

A few weeks ago I realized my COBRA was about to run out. I’ve purchased individual health insurance before so I wasn’t completely terrified, though my memories were unpleasant. I started poking around online and quickly became frustrated. There are only a few options for buying insurance online and I find them clunky and dated.

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The Primary Care Revolt

Last Thursday Anna Wilde Mathews of the Wall Street Journal ran an article detailing the activities surrounding primary care’s gradual awakening and mobilization. With Tom McGinty, Ms. Mathews authored a damning expose on the RUC last October that precipitated our efforts against CMS’ 20 year reliance on the AMA’s RVS Update Committee (RUC) for valuation of medical services.

There is the lawsuit by six Augusta, GA primary care physicians, spearheaded by Paul Fischer MD. (See his most recent article below). The suit claims that CMS’ and HHS’ longstanding primary relationship with the RUC has rendered that panel a “de facto” federal advisory committee. That would make it subject to the management and reporting rules of the Federal Advisory Committee Act  – transparent proceedings, representative composition, scientifically valid methodologies – that attempt to ensure the public over the special interest. The fact that CMS has never required the RUC to adhere to those rules presumably means that the relationship is out of compliance with the law.

The American Academy of Family Physicians (AAFP), after declining to join the suit, issued a series of demands: more primary care seats, a sunsetting of rotating sub-specialty seats, a dedicated gerontology seat, seats for non-physicians like patients, purchasers and economists. The RUC has until March to respond. If they reject the demands, the question is whether the AAFP Board will vote to walk, as David Kibbe and I urged them to do when we began this campaign last January.

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Say It Loud, I’m a Gimp and I’m Proud!

Apologies to James Brown for the title of this post, as his 1968 funk classic “Say It Loud, I’m Black and I’m Proud” (click here to listen) helped galvanize the civil rights movement in America, offering a joyous rallying cry to people who for far too long had suffered at the hands of racism and oppression. The song was not only a shout of protest, but an admonition to embrace the very thing that conferred minority status on an entire people and turn what for some had at one time been a mark of shame into a badge of honor. On top of all that, the song irresistibly generates the urge to get up and shake your groove thing. That is, of course, if you are able to get up at all.

Those of us whose disease has progressed to the point where shaking our groove things is a distant memory and has left us visibly disabled – reliant on canes, walkers, or wheelchairs – also find ourselves members of a minority group, the disabled, the inclusion in which leaves some feeling invisible, helpless, and diminished. Much of the world simply isn’t designed for people who don’t have full use of their limbs, and the fully functional folks who populate it can be insensitive, uncaring, ignorant, and sometimes even intolerant. Though much progress has been made in in the fight for the rights of the disabled, the struggle is closer its beginning than its end.

Throughout much of history, victims of chronic illness, particularly of the kind that deform or disable, have often been looked upon with scorn, as if getting sick was somehow a mark of shame, the afflicted somehow responsible for their own affliction.

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Reverse Innovation & The Cost Crisis in American Healthcare

By KENT BOTTLES

The realization that the American health care system must simultaneously decrease per-capita cost and increase quality has created the opportunity for the United States to learn from low and middle-income countries. “Reverse innovation” describes the process whereby an inexpensive innovation is used first in countries with limited infrastructure and resources and then spreads to industrialized nations like the United States.

The traditional model of innovation has involved the creation of high end products by companies in industrialized nations and the spread of these products to the developing world by adapting them to function in low and middle-income countries. Reverse innovation reverses the direction of spread with the United States borrowing new ideas and products designed for less wealthy countries in order to deliver health care more efficiently. (1)

Resource challenged low and middle-income countries are different from the United States in at least six ways that can serve as catalysts for such reverse innovation: 1) affordability, 2) leapfrog technologies, 3) service ecosystems, 4) robust systems, 5) new applications, and 6) the absence of intermediaries. (2,3)

These nations can’t afford expensive goods so they have to find inexpensive materials or manufacturing options. They also lack 20th century infrastructure and so they have leapfrogged to newer technologies such as mobile phones or solar energy instead of landlines and petroleum based energy sources. Service ecosystems develop in developing countries because entrepreneurs have to rely on others for help by creating new partnerships like video-game cafés where gamers test new products. Emerging markets require products that work in rugged conditions, and customers in poor countries have few product choices, providing market openings for add-ons that update and extend the lives of existing merchandise. (2) Intermediaries such as venture capitalists, universities, and regulators are also often underdeveloped in poorer countries. (3)Continue reading…

ONC Invests in Innovation Challenges

By

Health 2.0 is thrilled to announce that we are launching two challenges as part of the official kick-off of the Investing in Innovation (i2) program. Over the next 2 years the ONC will be issuing nearly $2 million in prize money for numerous challenges all designed to inspire innovation in health information technology. Along with our colleagues at Capital Consulting Corporation, Health 2.0 is the contractor supporting this effort. We started with a joint NCI/ONC effort which is already underway, but now the first two challenges are live. And they are:

  • Reporting Device Adverse Events Challenge ONC is asking multi-disciplinary teams to develop an application that facilitates the reporting of adverse events related to medical devices, whether implanted or used in the hospital, clinic, or home. This challenge has $40,000 in total prizes
  • Ensuring Safe Transitions from Hospital to Home Challenge. ONC is challenging software developers to improve care transitions and build upon these tools by generating an intuitive and easy-to-use application to empower patients and caregivers that fits into existing ways that providers communicate. This challenge also has $40,000 in total prizes.

These are both critical parts of health care where new innovation can make a big difference–and developers can win a substantial prize to get them on their way.

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