Continuing with our AHIP Video Series, Health 2.0 and THCB sat down with McKesson‘s VP of Decision Management, Matt Zubiller. McKesson Corporation is the world’s largest and oldest healthcare services company, and McKesson Health Solutions (MHS) is its payer-focused business unit. For 35 years, MHS has delivered solutions with the industry’s soundest and most widely used clinical evidence and expert technology to help payers and providers collaborate to achieve better healthcare outcomes at lower costs. Each solution in the MHS portfolio is designed to decrease administrative costs, create efficient provider networks, manage both risk and medical costs, and improve care quality and outcomes. In this video, learn more about why MHS solutions touch more than 160 million covered lives, and are used by 96% of the top 25 health plans, payers of all sizes, 4,000 hospitals, and numerous federal agencies.
Above the Fold
Yes, The Federal Exchanges Can Offer Premium Tax Credits
Whatever else the Affordable Care Act may accomplish, it has provided endless entertainment for law professors.
The latest ACA kerfuffle involves the discovery by critics of the ACA of an ACA drafting error that would seem to deprive millions of uninsured Americans of tax credits to purchase health insurance and invalidate regulations recently proposed by HHS and the Treasury Department. The mistake is found in section 1401 of the ACA, which creates a new section 36B of the IRC. Two subsections of 36B ((b)(2)(A) and (c)(2)(A)(i)) suggest that premium tax credit eligibility under the ACA depends on the applicant being enrolled in a qualified health plan “through an Exchange established by the State under section 1311.” This would in turn suggest that individuals enrolled in a qualified health plan through a federal exchange established under section 1321(c) would not be eligible for premium tax credits, contrary to the recent proposed regulations.
That this is a drafting error is obvious to anyone who understands the ACA. Section 1311 of the ACA requests the states to establish American Health Benefit Exchanges and sets out the duties of the exchanges. Section 1321 of the ACA, however, provides that if a state elects not to establish and exchange or fails to do so, HHS must “establish and operate” an exchange in such a state and “take such actions as are necessary to implement” the other requirements of title I of the ACA, which includes section 1401. There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that ended up with a federal exchange. None of the CBO reports scoring the ACA suggest that premium tax credits would only be available though 1311 state exchanges and not through 1321 federal exchanges. It is, finally, highly unlikely that the House, whose bill included only a federal exchange, would have approved a bill that only provided tax credits through state exchanges but not through the federal exchange.Continue reading…
We’re From The Government. We’re Here To Help …
The clock is ticking for Parkland Memorial Hospital in Dallas.
Earlier this month, Parkland was cited by the Centers for Medicare & Medicaid Services for several “serious threats” to patient safety. As a result, the hospital is now in jeopardy of losing its ability to participate in the Medicare program unless it submits “correction plans” to CMS by August 20, 2011.
According to a CMS spokesperson, two violations relating to infection control and emergency care issues were “so serious that they triggered ‘immediate jeopardy’” for the hospital. In fact, the reasons for the citation were so heinous that CMS won’t even disclose them to the public until Parkland submits plans on how to fix those super secret problems. That’s the subject of another WTF discussion, but we’ll save that one for later.
The event triggering the CMS investigation involved a schizophrenic psychiatric patient with a heart condition who died while in the emergency department. The report states that the technicians who subdued the man did not have “effective training” and that the patient was not closely monitored before his death.
According to the article and an interview Parkland’s Chief Medical Officer, Parkland was cited for several reasons. Based on what I can gather from the article, two of the hospital’s citations were for:
– Moving patients with less serious symptoms to a separate urgent care center for medical screening
– Staff touching a patient and then touching other surfaces that people would come into contact with
Think about how grave these dangers are.
Time to Make Joint Commission Surveys Public
Can anyone doubt that the recent kerfuffle faced by Parkland Memorial Hospital in Dallas would have had a greater chance of being avoided if earlier reviews by the CMS-designee, the Joint Commission, would have been made public? Yet, JC surveys are held in confidence. This is a matter of federal law.
Currently, the results of hospital accreditation surveys cannot be accessed by the public under Section 1865 [42 U.S.C. 1395bb] (b) of the Social Security Act, which reads as follows:
“(b) The Secretary may not disclose any accreditation survey (other than a survey with respect to a home health agency) made and released to the Secretary by[615] the American Osteopathic Association[616] or any other national accreditation body, of an entity accredited by such body, except that the Secretary may disclose such a survey and information related to such a survey to the extent such survey and information relate to an enforcement action taken by the Secretary.”
When I was CEO of a hospital, we voluntarily made our JC surveys public, posting them on our corporate website. We felt that it was important for all staff in the hospital to have the chance to review the findings and act on them, and we also felt that public confidence in our hospital would be enhanced by this kind of transparency. While this practice has spread somewhat, most hospitals still do not make their surveys public.
Another Modest Proposal* – Paying for Physician Training
One of the main considerations in physician pay under CMS’ relative value system is the training required to complete a task. This is generally thought to be well understood but is, in fact, a quagmire of controversy.
Take for example the specialty of family medicine compared with dermatology, anesthesiology, or ophthalmology. Family physicians make between 1/2 and 1/3 of what these other specialties make, so one would think that there is a huge training difference. The truth is that each of the four require 16 years before medical school, 4 years of medical school, and 3 years of residency. The 3 highly paid fields require 1 additional year in a transitional internship. So the family physician education represents 23/24 or 96% of the length of education required for the others. Since when is a 4% investment worth a 200% to 300% return?
There are, of course, longer training programs. Internal medicine fellowships are 2 to 3 years on top of a 3-year residency. There was a time when this made sense, since the idea was to educate competent general clinicians and then for them to specialize in a narrower field. Given the limited general physician work of, let’s say, cardiology, one could easily argue that the 3 years of internal medicine training are wasted. Should cardiologists, therefore, be credited with 23 or 26 years of training? It would obviously be more efficient to move these physicians directly from medical school into the cath lab.
There are some physicians who keep going on and on in their training, completing one residency and then another. One fellowship and then another. CMS must come up with a numerical way to appropriately compensate these individuals for their time, yet discount it for any lack of relevance that their training might have for performing a particular procedure. Take, for example, the resident who completes his general surgery training then goes on to do a fellowship in vascular surgery, then goes into practice and limits his practice to the laser closure of veins, a technique he learned in a weekend CME meeting. Should this physician’s income reflect 7 years of training or 3 days?Continue reading…
Health Plan Nutritional Facts
It’s official now. The government has proposed that descriptions of health insurance policies will resemble those nutritional labels on canned and packaged foods—the ones you look at to find out how much sodium there is in Birds Eye peas versus the A&P brand. Instead of getting the scoop on salt or sugar, shoppers will learn what they have to pay out-of-pocket for various medical services. They’ll also get some general information, like what services are not covered, and how much they’ll have to pay for maternity and diabetes care and breast cancer treatment, all organized in a standard format designed for easy comparison shopping. Insurers will have to translate common insurance jargon into plain English.
The health reform law requires these “Coverage Fact Label” disclosures, and tasked the National Association of Insurance Commissioners (NAIC) with creating them. The NAIC released some samples a few weeks ago. Theoretically, consumers armed with this information will choose wisely, and as free-market advocates say, their choices will regulate prices that insurers will charge. If consumers choose the low-cost plans, then prices will come down and policies with the best benefits will flourish.
Who will be the Salesforce.com of Healthcare IT?
Last week was the massive Salesforce.com user conference Dreamforce (massive in that there were more attendees at Dreamforce then this year’s HIMSS!). We’ve been reviewing more than a few articles and writings written by those who attended the event. In the few short years of its existence (~13yrs) Salesforce.com has become one of the leading Customer Relationship Management (CRM) vendors in the market and basically pushed the previous leader Siebel to the brink and into the arms of Oracle. Salesforce is arguably the leader in the Software as a Service (SaaS) market and thus someone to pay close attention to on all things “Cloud Computing.”
So what makes Salesforce.com so compelling and what are some parallels to the healthcare sector?
Similar Market Demographics: From the beginning Salesforce has always been structured as a SaaS and targeted the hard to reach and highly distributed sales forces of companies of all sizes. Actually, they first targeted the small to medium business (SMB) market and once successful there, went after Siebel in big enterprises. In healthcare, the vast majority of care is provided by small, 1-3 physician practices that are highly distributed across the country – perfect target for a hosted SaaS offering.
How We Ration Care
There are not very many good things you can say about a deep recession. But from a researcher’s point of view, there is one silver lining. This recession has given us a natural experiment in health economics — and the results are stunning.
But, first things first. Here is the conventional wisdom in health policy:
- In the United States, we ration health care by price, whereas other developed countries rely on waiting and other non-price rationing mechanisms.
- The U.S. method is especially unfair to low-income families, who lack the ability to pay for the care they need.
- Because of this unfairness, there is vast inequality of access to care in the U.S.
- ObamaCare will be a boon to low-income families — especially the uninsured — because it will lower price barriers to care.
As it turns out, the conventional wisdom is completely wrong. Here is the alternative vision, loyal readers have consistently found at this blog:
- The major barrier to care for low-income families is the same in the U.S. as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
- The U.S. system is actually more egalitarian than the systems of many other developed countries, with the uninsured in the U.S., for example, getting more preventive care than the insured in Canada.
- The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
- ObamaCare, by lowering the money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.
U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years
Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.
For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.
Moody’s points to declines in inpatient admissions, and falling outpatient indicators including ER visits, outpatient visits, and outpatient surgeries, all due to the “sluggish economy,” the agency wrote.
Exacerbating the negative bottom-line impact is the continued growth of uncompensated care: that is, health services provided to patients who leave the hospital without paying their bill.
Shifts in Humanitarian Aid: A Look at Post-Recession Data
A few agencies have recently published their concerns that the “double dip” recession will negatively affect humanitarian aid, even as the worst famine in decades continues to hit East Africa. Have aid levels really been affected by the recession? If so, which countries are likely to feel the most impact? What factors are shaping aid decisions? In this post, we look at the latest data from the OECD’s Development Assistance Committee (DAC), the definitive source for international humanitarian aid data, and discuss the changes in aid that have transpired since the start of the 2007 recession.
Overall trends
If humanitarian aid shifts during this recession, such a shift would be a new phenomenon; when we investigated global aid trends during prior recessions, we found that aid usually didn’t significantly change during or soon after economic downturns, probably because foreign assistance is such as small part of government budgets, and because aid changes are often driven by disasters and conflicts rather than supply-side politics alone.
The first graph above depicts global humanitarian aid from 2006 to 2009 (all graphs are courtesy of GHA; note that the colors in this graph are incorrect for the last column, which should be black on top and green on the bottom). As shown in the graph, humanitarian aid actually increased a bit during 2008, likely reflecting commitments made before the recession. But aid then decreased 11% to $15.1 billion in 2009. The 2010 numbers won’t be released until later this year. The available figures refer to forms of aid that reach “delivery agencies” such as United Nations subsidiaries, non-governmental organizations and the Red Cross. Of note, while the 2008 contribution from governments is smaller than 2007, it still remains higher than earlier years. Of particular interest is that private donations have increased almost 50% since 2006 and have remained steady during the recession.
