Got a big belly? You may be at risk for heart disease, diabetes, hypertension, stroke, and cancer.
Friday, July 31, 2015
A State-Based Strategy For Expanding Primary Care Residency
As the health care system looks to improve overall health and reduce unnecessary spending, primary care physicians become increasingly critical. The Affordable Care Act (ACA) recognizes that primary care clinicians have the potential to “bend the cost curve” through care coordination and preventive health care for our increasingly diverse and aging population. However, there aren’t enough primary care physicians to meet this need — especially in rural or poor urban areas. Current estimates predict that by 2035, our country will face a shortage of more than 44,000 primary care physicians.
As in many other states, the people of New Mexico are already experiencing this shortage. In 2014, the state had 96 primary care shortage areas, including areas in 32 of 33 counties in the state. At least 220 new physicians are needed immediately to meet the demand for basic medical care. The state has responded with an innovative and cooperative effort that led to legislation that is already expanding access to care for the state’s neediest residents.
The National Shortage Of Primary Care Residency Slots
While new medical schools are opening and established schools are increasing enrollment across the nation, there’s a residency bottleneck in the physician pipeline in many states, especially in primary care. Most of the funding for the country’s 100,000 residency slots comes from the federal government as part of Medicare spending.
However, the 1997 Balanced Budget Act placed a cap on such graduate medical education spending, effectively freezing it at 1997 levels and often locking in the ratio of primary care to specialty residency positions found at many academic teaching hospitals. Despite the ACA’s recognition of the importance of primary care, that emphasis has not been reflected in growth in primary care residency positions nationwide.
Within the present payment system, specialty care is more lucrative than primary care, and hospitals may depend on residents, rather than attending physicians, to deliver specialty services in order to recapture financial losses in other areas. Most residencies are based at tertiary care medical centers, which are dominated by subspecialty services and offer fewer opportunities for training in primary care.
The specialty-to-primary care ratio often more closely reflects teaching hospital service needs than of overall health workforce needs. This imbalance is exacerbated by the ability of more lucrative specialty departments to fund residency and fellowship positions outside the Medicare cap. To remedy current primary care shortages and avoid future shortfalls, the country needs to add another 1,700 to 3,000 primary care residency slots.
Although federal legislation has been drafted to better align graduate medical education (GME) with state and national workforce needs, the proposed legislation has not made it through Congress. Nor has there been a sufficient, voluntary movement by academic medical centers to align publicly financed GME with the health goals of the nation.
Solutions are within reach: for example, a 2014 Institute of Medicine report outlines a mechanism for reforming GME payment while expanding public accountability for GME funding. However, policymakers and academic health center leaders have yet to act. Meanwhile the nation is experiencing a well-documented, publicized, and significant worsening of its primary care clinician shortages.
Finding A New Mexico Solution
New Mexico can’t afford to wait for Congress to address its primary care shortage. In 2013, a group of physicians, public health advocates, and legislators in the state of New Mexico set out to find a solution.
As part of a consortium of five universities in the Urban Universities for HEALTH program funded by the National Institutes of Health, the University of New Mexico is actively engaged in efforts to recruit more urban and minority students into the health sciences. The program has made important progress: through its changed admissions policies and its rural and minority-oriented BA/MD program, the ethnic composition of the medical school class now reflects the ethnic distribution of New Mexico. However, these steps may not go far enough if graduating physicians cannot obtain the necessary hands-on residency training, especially in primary care within New Mexico’s borders.
The New Mexico group looked at data that showed medical residents from minority and rural backgrounds were more likely to remain in New Mexico and to practice in underserved communities. They also considered a study that demonstrated that 70 percent of family medicine residents in New Mexico who trained for two or three years in rural areas of the state continued to practice in rural New Mexico.
These data are backed up by national statistics from The Robert Graham Center that show that 56 percent of residency graduates practice within 100 miles of where they completed training. Based on this analysis, the New Mexico group determined that increasing family medicine training in shortage areas provides the best chance to close the gap between supply and demand for primary care physicians.
Leveraging State Medicaid Funds And Federally Qualified Health Centers
While the federal government is the sole administrator of Medicare, the state-federal partnership inherent in Medicaid programs provides room for innovation. The New Mexico group, inspired by actions taken in Ohio to reallocate Medicaid GME spending to reflect local health workforce priorities, set out to formulate legislation to address the shortage of primary care residency positions in the state.
The model is made possible through the Community Health Center regulations governing “changes in scope of practice,” which are also allowed by CMS. Traditionally, a change in scope includes new services like oral health or behavioral health. In this case, it adds graduate medical education as an expanded scope of service. The approach is similar to the Health Resources and Services Administration (HRSA)-funded Teaching Community Health Center program. However, federal funding of these Centers in the current political climate can be vulnerable to federal budget cuts.
The budget language, which passed the New Mexico legislature easily in March 2014, redirected state Medicaid funds to help open up new primary residency slots in underserved areas of the state and builds on legislation that established financing for the New Mexico Primary Care Training Consortium in 2013, also through the Medicaid program. The Consortium is comprised of the four family medicine training programs in the state — two programs where the full three years is spent in Albuquerque and Las Cruces, and two “1 + 2” programs where the first year is spent in Albuquerque and the second and third years are spent in either Santa Fe or Silver City.
The New Mexico Human Services Department has agreed to include Federally Qualified Health Center (FQHC)-sponsored primary care residency development in the base Medicaid funding budget and FQHC payment system. Prior to the passage of this legislation, the cost of a specific number of primary care residency slots was a separate line item in the University of New Mexico budget and required further legislative appropriations to increase the number of slots. The new legislation streamlines the process by also allowing the addition of approved primary care training slots at FQHCs through this payment mechanism.
New Mexico is the first state to take this unique approach to funding GME expansion. While there are other states that use Medicaid funds for graduate medical education, only 10 states direct funds specifically toward primary care and none use the same approach as New Mexico. This model represents a critical shift in the paradigm for primary care training. It eliminates the concept of residency caps, other than state budget and program capacity limitations.
For example, if an FQHC wishes to begin or expand a primary care residency and receives approval for this from their Residency Review Committee, that FQHC applies for a change in scope of services to include incremental resident-related costs. If approved, Medicaid issues enhanced payments to the FQHC to cover the incremental costs of the residency program. The estimated cost per resident per year discussed in the initial legislation—approximately $150,000—was based upon the federal grant funding level initially established by HRSA in funding Teaching Community Health Centers in FQHCs. Actual costs may vary.
In addition, while expansion of an existing residency program at an FQHC can be rapid once the expansion is ACGME-approved, it can take several years to create a new program in an FQHC. The state Medicaid program has agreed to pay any FQHC intending to start a new residency or expand an existing one an amount sufficient to cover the reasonable incremental costs associated with the resident month-long rotations on a pro-rated basis, depending upon the number of primary care resident month rotations at the FQHC. This is a natural way to develop resident education capacity.
An Effective, Replicable Solution
Within a year after legislative and administrative approval, the New Mexico Primary Care Training Consortium is already developing 10 primary care residency slots in four locations in some of the more needy parts of New Mexico, including Shiprock and Farmington, both in the heart of Navajo Country, and Las Cruces, on the border between the U.S. and Mexico.
With continuing legislative gridlock in the federal government, innovations in health services and in health workforce development are emerging from states. There, local solutions can grow from local needs and are often more appealing to state legislators who may be wary of federal policy. Although federal action is needed to address the nation’s primary care needs, New Mexico’s approach helps to swiftly increase access to care in the state. The model is replicable in other states because it relies on something all states have: state Medicaid dollars and FQHCs.
Author’s Note
The following people cooperated to draw up and implement the legislation that created new residency slots in the state of New Mexico:
- John Andazola, program director, Southern New Mexico Family Medicine Residency, Las Cruces, NM
- Darrick Nelson, program director, Hidalgo Medical Services Family Medicine Residency, Silver City, NM
- Luis Rigales, program director, Christus St. Vincent’s Hospital- La Familia New Mexico Family Medicine Residency, Santa Fe, NM
- Dan Waldman, program director, University of New Mexico Family Medicine Residency, Albuquerque, NM
- Deborah Weiss, consultant to the New Mexico Primary Care Residency Consortium, Santa Fe, NM
- State Senator Howie Morales, New Mexico State Legislature, District 28, Silver City, NM
- State Senator Sue Wilson Beffort, New Mexico State Legislature, District 19, Albuquerque, NM
- (Former) State Representative Rudolpho “Rudy” Martinez, New Mexico State Legislature, District 39, Las Cruces, NM
- Brent Earnest, New Mexico Cabinet Secretary of the Human Services Department, Santa Fe, NM
Leishmaniasis
Leishmaniasis: A parasitic disease that is spread by the bite of sand flies infected with the protozoa Leishmania. There are several forms of leishmaniasis, the most common being cutaneous and visceral leishmaniasis (known as kala-azar). The cutaneous form of the disease causes skin sores and is usually named for a geographic place (for example, Jericho boil, Baghdad button, Delhi sore). Visceral leishmaniasis affects the internal organs of the body and can be fatal. See also kala-azar.
MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You
The Future of Aging and Technology
First of all, I love Alan Kay’s definition: Technology is anything invented after you were born.
Second, my grandmother, who used a CB radio in the 1970s and bought one of the first Apple computers in the 1980s, inspires a different point of view. When I showed her the internet in 1995, she said, “I was born too soon.” Then she proved herself wrong by living another 11 years, a daily internet user. I learned to never assume that someone’s age determines his or her interest in or affinity for technology.
I also believe we can learn from older adults and their use of technology. Studies show that if a website is optimized for older users, younger users benefit too. When I was building online tools, I would bring my laptop over to my grandmother’s house in Baltimore. She was my best beta tester. If it didn’t make sense to her, I would change the navigation.
What does the future hold?
One possibility is that technology will start to disappear and become like electricity, something we don’t notice on a daily basis. For example, instead of all the gadgets we use today to track and measure our health, sensors might be sewn into our clothes.
Another possibility is that technology becomes ever more present and intrusive, asking more of our attention and requiring even better eyesight and dexterity than the current smartphones require.
I am hoping for the first version of the future. The one that helps us get back to the point of technology – to assist us, not to resist us. To connect us, not to divide us.
I see three ways that technology can have a positive effect on the lives of older adults: through data, connection, and invention.
Data: At HHS, we want to empower citizens with their own health data. Medicare recipients can, for example, download a simple text file that contains all their claims data, which includes, for example, a complete medications list and the date of someone’s last flu shot. Once someone has that data file, they can bring it with you when you travel or give it to a new clinician. It’s called the Blue Button program because it is literally as simple as clicking on a blue button on Medicare.gov to get access to your data.
Connection: There is a cultural shift happening at the intersection of health and technology. The internet connects us not only to information, but also to each other. That’s a wonderful opportunity for all of us to learn from older adults, recreating the multigenerational household and village that we used to have – now the learning happens online on sites like Facebook, but also on specialty sites for caregivers, like Careticker, and on disease-specific sites, like PatientsLikeMe.
Invention: We are a nation of makers. I believe the U.S. can lead the world in inventing ways for older adults to age in place, with dignity. And the government can play a role in fostering this innovation.
For example, people living with Parkinson’s disease and other neurological disorders often develop a hand tremor, which makes it difficult to keep food on a spoon or fork. Liftware, a company in California, has created a set of utensils that counteract a tremor and allows someone to feed themselves. The research that drives this technology was supported by a grant from the National Institutes of Health.
In addition to providing research grants, the federal government can convene and encourage communities of practice, such as the Health Datapalooza and the White House Maker Faire. And we can look for ways to lift barriers to innovation, which is what my team in the HHS IDEA Lab does, finding ways to hack red tape and help create programs like the NIH 3D Print Exchange, a platform for people to share templates, like the patterns you would use to sew a dress, but in this case it might be a template for printing a prosthetic hand or a model for a heart.
Let’s continue the conversation about the future of aging and technology. Please share your ideas for how we might use data, connection, and invention to help all Americans live longer, healthier lives.
This is a cross-post from the White House Conference on Aging blog.
Susannah Fox is the CTO of the Department of Health and Human Services
Thursday, July 30, 2015
At 50, Medicare and Medicaid Face the Challenge of a New Generation of Super-Expensive Drugs
Unfortunately, the challenges are not going to let up. In fact, they’re likely to get worse. Those challenges are discussed at length in several places that celebrate this milestone—most notably here, here, here, in the current issue of the Journal of the American Medical Association (subscription required for access to full articles); and in an Oxford Press book of 16 essays.
This piece focuses on one of the biggest challenges facing both programs: the increasing number of very expensive specialty drugs.
These are medicines made primary through bioengineering. They are often referred to as biologics. THCB readers will no doubt have heard of the hepatitis C drug Sovaldi, the current poster child of expensive drugs at $84,000 for a 12-week course of treatment. More generally, specialty drug prices range from $2,000 to $10,000 a month. One source pegs the average price at around $36,000 a year.
When there were just a few biologics, it was not a big problem. But now there are a couple dozen. Some treat rare diseases that afflict a small number of people, but an increasing number target cancer, multiple sclerosis, rheumatoid arthritis, immune system disorders, and even heart disease.
Specialty drugs accounted for 30% ($112 billion) of the $374 billion spent on prescription drugs in 2014, and they drove the bulk of the 13% increase in drug spending that year over 2013, according to IMS Institute for Healthcare Informatics. That leap in drug spending contrasted with low single digit increases for the previous few years.
Medicare (via Part D, Part B and Medicare Advantage) pays 25% to 30% of the nation’s prescription drug tab each year. And somewhere around 16% of Medicare’s budget is spent on prescription medicines—about $90 billion in 2014. Consistent with IMS’s finding for drug expenditure overall, Medicare Rx drug spending leapt 12.6% from 2013 to 2014, the fastest rise in years and up from a 2.5% increase in 2013 over 2012, according to a CMS report out this week.
Solvaldi alone cost Medicare some $4.5 billion in 2014—becoming the single most expensive drug Medicare enrollees received.
While Medicaid spends less proportionately on Rx drugs, the specialty drugs are having an impact. In 2012, they accounted for 28% of Medicaid drug spending even as they represented just 2% of prescriptions. Preliminary data from ProPublica indicates that Solvaldi and one other hepatitis C drug were on track to cost states an aggregate $2 billion or more this year.
Express Scripts, the huge pharmacy benefit management firm, sliced its 2014 data to calculate drug cost growth nationally. Due almost solely to specialty drugs, the estimated number of Americans with drug costs exceeding $50,000 increased 63% in 2014, from 352,000 to 576,000, the company estimated.
That the trend to more pricey drugs will continue is not in question. More biologics are being approved every year, and according to a 2013 industry report some 900 are in the pipeline, with many nearing submission to FDA for approval. By some estimates, specialty drugs could comprise over 50 percent of all drug spending by 2020. Beyond that is anyone’s guess. At this week’s release of the CMS report on health spending between now and 2024, Sean Keehan, a CMS economist, said drug spending was now the “largest area of uncertainty” in CMS’s projections.
The big question, of course, is: are these pricey medicines worth the cost? Do they yield good value? Are they fairly priced? Or are drug companies profiteering? And, if specialty drugs are going to remain very expensive, how are we possibly going to afford them? A simple back of the envelope calculation suggests that just 10 more Sovaldis over the next 6 to 8 years could run up a tab in excess of $50 billion a year by the eighth year (if each drug is priced around $50,000 and taken by 100,000 people).
Your Psoriasis Questions Answered
Recently, a couple of leading skin experts took questions from WebMD's Psoriasis Community. Here are highlights from the online chat with Colby Evans, MD, and Mary Ruth Buchness, MD.
Implementing Health Reform: GAO And ASPE Reports Reveal IRS-Marketplace Coordination Difficulties, Impact Of Competition On Premiums
The Government Accountability Office (GAO) report, Patient Protection and Affordable Care Act (ACA): IRS Needs to Strengthen Oversight of Tax Provisions for Individuals, released July 29, 2015, is both one of the clearest and most succinct descriptions of how coordination is supposed to work between the Internal Revenue Service (IRS) and the ACA marketplaces in administering the ACA’s premium tax credit (PTC) and individual responsibility penalty, and the best description of how that coordination in fact functioned in the 2014 tax filing season, in 2015. As is often true with research involving the ACA, the report will offer ammunition both to the ACA’s supporters and opponents, although on the whole it shows a program with much room for improvement.
How Advance Premium Tax Credits Were Meant To Work
The ACA makes premium tax credits available generally to individuals with incomes between 100 and 400 percent of the federal poverty level who are not eligible for other forms of affordable coverage and who purchase a qualified health plan through a marketplace. These tax credits can be received in advance based on projected income to help pay health insurance premiums, but individuals who underestimate their income and receive excess advance premium tax credits (APTC) must reconcile the amount that they received with the amount they are actually entitled to when they file their taxes, and must pay back any excess amounts received (subject to limits). The Centers for Medicare and Medicaid Services (CMS) estimated that at the end of 2014, 6.3 million individuals received health insurance through the marketplaces; most received APTC. About $15.5 billion were paid out in tax credits in 2014.
The ACA also requires individuals who do not have minimum essential health coverage or qualify for an exemption to pay a penalty. These individual responsibility penalties were assessed for the first time during the 2014 tax filing season. Individuals who have coverage through a marketplace are supposed to receive a form 1095-A from the marketplace documenting their coverage and to check a box on their form 1040 to report coverage. Individuals who receive coverage through an employer or a government program should receive a form 1095-B from their insurer or the government, as well as a form 1095-C if they are covered through a large employer, and also check a box on the 1040. Because of the delay of employer and insurer reporting requirements, employers and insurers did not provide 1095-Cs and 1095-Bs for 2014.
Individuals who did not have coverage through the entire year must either file a form 8965 claiming an exemption or pay an individual responsibility penalty. Some exemptions, such as the religious conscience exemption or certain hardship exemptions, must be claimed through the marketplaces. Others, such as the affordability exemption, can be claimed at tax filing.
Logistical Challenges
The marketplaces were supposed to have sent 1095-As to enrollees and to the IRS documenting marketplace coverage and APTC amounts. Enrollees were to have used the information from this form both to verify their coverage for purposes of the individual responsibility requirement and to reconcile their APTC with the actual tax credit they were due using form 8962. Marketplaces are also required to send to the IRS by the 15th of each month an Exchange Periodic Data (EPD) transmission which reports cumulative information for each qualified health plan in the marketplace. The January 15 transmission in any year should contain complete data for the preceding year. The EPD transmission is also supposed to include information on coverage exemptions granted by the marketplace.
Because employers were not required to file 1095-Cs and insurers were not required to file 1095-Bs for 2014, the IRS was limited to using its standard examination processes (presumably audits) for verifying compliance with the individual responsibility requirement for 2014 for individuals who receive employer or government program coverage. It was able to verify claims of marketplace coverage using the 1095-As, to the extent these were accurate. The IRS should have been able to verify individual responsibility payment exemptions granted by the marketplaces using the EPDs due January 15, 2015, but as of May 31, 2015, the IRS had exemption data available from only 13 of the 51 marketplaces, and did not have data from the other 38.
Some marketplaces experienced delays in processing exemptions. The IRS allowed individuals who had not received a decision from a marketplace to file their taxes writing “pending” on their 8965, but it was not clear whether these individuals would need to file an amended return. The IRS also experienced technical problems causing its systems to return an error message when marketplaces submitted exemption data. Without the 1095-Bs and 1095-Cs or accurate EPDs, the IRS is limited in its ability to verify compliance with the individual responsibility requirement. It may pursue collection procedures against individuals who reported but did not pay the tax, or may review and recalculate the tax for returns examined for other reasons.
As of May 28, 2015, 130.6 million tax returns had been filed with the IRS. 101.5 million returns claimed full-year coverage. 11.5 million claimed an exemption from the requirement. 7.3 million taxpayers reported a penalty due. But 11.3 million returns, 9 percent of the total, did not claim an exemption, pay the penalty, or claim full-year coverage. The IRS estimates that 58 percent of these returns were filed by persons claimed as a dependent on another taxpayer’s return and thus not responsible for filing. This still leaves millions who simply failed to comply.
The IRS has determined that it lacks the authority to reject these “silent” tax returns. The IRS intends to work with tax preparers and tax software companies to ensure better compliance and to send “soft notices” to taxpayers to encourage voluntary compliance. Filing software can be modified to not permit filing without reporting coverage information, and preparers could be required to ensure compliance as part of their “due diligence” obligation.
The Challenges Of Verification
The IRS has established an ACA verification system (AVS) that is supposed to compare information regarding premium tax credits reported by taxpayers on their tax returns with that reported by the marketplaces before releasing a tax refund. For example, if the marketplace reports that a taxpayer has received APTC but the taxpayer does not report it on his or her return, the IRS may freeze the taxpayer’s claimed refund. The monthly EPD, described above, is the principal source of information that the IRS is to use for this purpose.
For 2014, however, the federally facilitated marketplace and four of the state-based marketplaces did not send full 2014 data until February of 2015. As of April 15, 2015, two state-based marketplaces had still not sent full 2014 data. The IRS could also use the 1095-As to verify APTC claims, but as of February 9, seven of the state marketplaces had not yet transmitted 1095-As to the IRS. As of June 8, 2015, three states had still not transmitted 1095-As. Hundreds of thousands of the 1095-As also had incorrect data, which the IRS could not correct using the more correct EPDs because they were not timely.
Marketplaces were not able to get complete and timely data to the IRS because they placed a higher priority on enrolling individuals for 2015 and on getting 1095-As out to taxpayers. CMS also said it lacked the resources to get out both January and annual EPD data at the same time. IRS processing of marketplace information was also delayed. As of March 21, 2015, the IRS had only processed complete PTC data for four of the 51 marketplace states (including the District of Columbia). Incomplete data, not including December 2014, were available for 38 states and no usable EPD information for 9 states. PTC information was only available for 3.1 million of the 4.4 million tax households expected to claim APTC. As of March 29, the IRS had complete EPD information for 46 of 51 states. As of July 7, 2015 it had complete data for 50 states and incomplete data for one.
The IRS allowed taxpayers who received incorrect 1095-As to file returns based on the information they received and waived various penalties, but the problems still resulted in some taxpayers’ refunds being delayed and some taxpayers receiving incorrect PTC. The GAO concludes that it is unclear whether this is a first year problem or whether it might be ongoing.
If the information reported by a taxpayer does not match marketplace data, the IRS is limited to requesting additional documentation or opening an examination. It cannot correct the tax return automatically using its “math error” correction authority. The administration has submitted to Congress requests for authority to correct incorrect returns in 2015 and 2016 but has not been granted this authority.
Problematic Delays
CMS has not yet given the IRS complete information on the total amount of APTC paid out in 2014. The IRS does not know, therefore, how much APTC was not reported. CMS paid out $15.5 billion in APTC in 2014, but some of this was for 2015 and some payments in 2015 could be for 2014. The IRS expected 4.4 million taxpayers to claim premium tax credits. As of May 28, 2015, 2.8 million filers had claimed APTC payments totaling $10.1 billion on their tax returns. 2.6 million filers claimed $8.9 billion in premium tax credits actually owed. 1.5 million taxpayers had received excess APTC totaling $1.9 billion while 1.2 million were able to claim an additional $717 million in premium tax credits which they had not received as APTC.
Part of the problem during the 2014 filing season was that the IRS did not get out some forms and guidance in a timely fashion. The IRS did not, for example, release the final publication 974 dealing with premium tax credits until late February 2015, and then revised it in March. These delays caused problems for tax preparers and tax filing software companies. The IRS is tracking its performance for 2014 and planning to improve performance and measurement of performance for the future. The GAO counselled the IRS to improve its coordination and communication with external stakeholders, such as the marketplaces going forward. Specific areas the GAO identified for further work included completing 1095-B and 1095-C forms and instructions, improving the marketplace exemption approval and reporting process, and clarifying how the IRS will notify the marketplaces regarding individuals who received APTC for 2016 but did not file 2014 returns and are thus ineligible for APTC in 2016.
ASPE Report Shows Increased Competition Holds Down Premiums
In another development, the Department of Health and Human Services (HHS) Assistant Secretary for Planning and Evaluation (ASPE) released an issue brief on July 30, 2015, reporting on Competition and Choice in the Health Insurance Marketplaces, 2014-2015: Impact on Premiums.
ASPE reports that 86 percent of qualified health plan (QHP)-eligible individuals had access to at least three insurers in 2015, up from 70 percent in 2014, with 59 percent of counties gaining at least one insurer and only 8 percent losing an insurer. The average number of insurers per county grew from 2.6 to 3.5 nationally. Markets with more enrollees attracted more insurers.
Sixty-four percent of enrollees had a choice of three or more plan types (HMO, PPO, Point of services, or exclusive provider organization), far more choice than is available in most employee plans. The ASPE report identified several factors that correlate with net changes in the number of insurers in a marketplace. Rating areas with more insurers in other markets were more likely to gain insurers, while rating areas that were larger or more concentrated before the ACA were more likely to lose insurers.
The average growth rate of the second-lowest cost silver premium—the benchmark for determining premium tax credits—was 2 percent, weighted for 2014 enrollment numbers (with counties with more enrollees given more emphasis than those with fewer enrollees), with some areas seeing a decrease in premiums. Benchmark premium growth was strongly related to increased competition. The benchmark plan premium growth between 2014 and 2015 was 8.4 percentage points lower in counties that saw a net gain in insurers than in other counties, with each net gain of one insurer associated with a 2.8 percentage point reduction in the rate of growth of the benchmark premium. Benchmark premiums were also 9 percent lower in counties with three or more insurers present than in counties with one or two insurers. In 42 percent of counties with new insurers, the new entrant offered at least one silver plan premium below the prior benchmark plan, thus reducing the benchmark.
Adding new insurers had less of an impact on average premiums. Average silver plan premiums growth was 1.5 percentage points lower in counties that had a gain in insurers, but growth in the number of insurers seems to result more in greater variation in premiums for plans offered than in reduction of average premiums.
Of course, because premium tax credits are linked to the second lowest-cost silver plan, enrollees may have to switch plans to take advantage of decreases or smaller increases in the premium of the benchmark plan. If they simply stayed with their 2014 plan for 2015, they may have seen larger premium increases. The ASPE report’s conclusion that increased competition holds down premium growth also raises interesting questions relating to the mergers taking place in the health care industry. These could result in fewer insurers and thus less competition in some markets, but because the national insurers involved do not compete in all marketplaces, it may be difficult to predict at this point to what extent the mergers may result in decreased competition.
The Low Hanging Fruit is Lying on the Ground
With hospitals and doctors under tremendous pressure to improve costs and quality fast, clichéd calls to “aim for the low-hanging fruit” are ringing in every boardroom and bedpan from Sarasota to Seattle.
But medical providers should set their sights a bit lower.
Why? Because “in health care, the low-hanging fruit isn’t just low-hanging fruit; the fruit is lying on the ground, and we have to be careful not to trip over it.”
That’s the axiom that Indiana University management professor Mohan Tatikonda repeats regularly to the physicians in an MBA program for MDs started in 2013 by IU’s Kelley School of Business in Indianapolis. His students, who hail from around the country and have been practicing medicine for an average of 20 years, shortened the phrase to simply “watermelons on the ground.”
It means that first-year MBA concept employed decades ago in most other industries can yield huge results among health care providers.
“On average, the state of operations in health care delivery is primitive. Fundamentally primitive,” Tatikonda said. “Just the basic understanding of patient flows, materials flows, information flows. Having them documented and diagrammed. This kind of thing until very recently was just not very common.”
It’s not that things such as Six Sigma or Lean are unknown to health care leaders. Consultant Chip Caldwell estimates that about 75 percent of hospital systems are using Lean in some way, compared with 53 percent identified by a 2009 survey by the Association Society for Quality. Only about one in 10 hospital systems is using Six Sigma currently, Caldwell estimates, down from a peak of popularity in the 2000s.
Some hospitals, such Virginia Mason and Barnes-Jewish, have employed these techniques to wide acclaim.
What few health care provider organizations have done, Tatikonda said, is make a regular, sustained habit of using process improvement concepts, so that all the people in their organizations became used to thinking that way.
The Affordable Care Act has now given health care providers the financial motivation to do exactly that. And the good news is that even small-scale projects that MBA students do for class can have a big impact in real-world health care environments.
Here’s one example: Tatikonda paired up one of his students, an ophthalmologist, with a Six Sigma expert from an Indiana manufacturing company to redesign the patient flow process at the Midwest Eye Institute in Indianapolis.
They found that that nearly all the eye patients took one of five paths through the office. So they figured out how they could eliminate time in a waiting room by having staff members immediately start patients into one of those five paths.
The result? Average visit time dropped by 20 minutes—or about 16 percent—while patient and employee satisfaction scores shot up.
Dr. Tom Ciulla, the ophthalmologist, who is a retinal surgeon at the Midwest Eye Institute, said Tatikonda and the Six Sigma expert were laughing, because the process of eliminating bottlenecks is the kind of efficiency work manufacturers did in the 1970s.
“That’s how far behind we are in medicine,” Ciulla said.
Here’s another example: Tatikonda worked with medical researchers at the Indiana University Vector Production Facility to develop a costing tool for the set up time, run time and materials needed for research-sized batches of gene and cell therapy agents.
The tool revealed various cost-saving strategies familiar in other industries, such as the fact that doubling a batch size only increased costs by 20 percent, not 100 percent. Their findings were published by the academic journal Human Gene Therapy and the tool is now made available to medical researchers by the National Gene Vector Biorepository.
“Set up and run time, capacity; this is MBA 101,” Tatikonda said. “It’s just so fundamental.”
At the very least, having clinicians learn these basic business concepts has given them a common language with their non-clinical administrators.
That was critical at the Indiana University Health hospital in Goshen, Indiana, which had been losing key physicians due to frustrations with what Dr. Len Henry, the hospital’s director of surgical oncology, called a “frenetic pace of change” and “metric terrorism.”
So Henry developed swim lane charts for all the people a surgeon like himself interacts with on a given day at the hospital. He then interviewed the 22 people he identified, from the receptionist to the CEO, using structured questions about the problems they saw in the hospital.
This work produced three key goals, with several actions points for each. Among them were: 1) Employ physician recommendations in decision making; 2) Consistently describe how success on metrics or finances benefit patients; and 3) Manage change more effectively by allowing time for stabilization between projects.
Henry handed his finding to the hospital’s CEO. The CEO presented it to all of the hospital’s vice presidents and, within days, Henry noticed a difference in how administrators were communicating with physicians and soliciting their input.
“I see people from the C suite and they comment about it. So I now it’s been looked at and taken seriously,” Henry said. “I’ll be curious to see our next physician satisfaction survey.”
Tatikonda predicts it will take another decade or more for health care providers to gather up all the ground-level and low-hanging fruit they can harvest with sustained process improvement efforts.
“Right now,” he said, “many of them are in the walking steps of understanding their processes.”
J.K. Wall is a health care reporter at the Indianapolis Business Journal and writes The Dose blog on the business of health care.
Nudging Toward A Smoother Tax Season
At the core of the Affordable Care Act (ACA) is the notion that health insurance should be accessible and affordable. In pursuit of that goal, the legislation includes premium tax credits to provide financial assistance to individuals whose income falls within a specified range. Because of the attempted precision and fairness of a means-tested affordability program, the tax credit is more complex than merely receiving a refund at the end of the year.
Instead, eligibility is determined prospectively. When individuals apply for advanced premium tax credits (APTC), they provide household details and estimate their income for the coming year. Early the following year, they must reconcile the information they provided earlier with their actual earnings and other details reported on their tax return.
However, predicting annual income is not an easy task, especially for people working variable hours or in seasonal industries. Nor is passing up the full credit at the time of application, especially when the tax credit can significantly reduce monthly premiums, an enticing offer. Another difficulty is remembering to update the exchange if your salary changes, if you receive an unexpected bonus, or if you experience a change in family circumstance such as marriage or divorce.
APTC Reconciliation Adds Complexities At Tax Time
As a result of these complexities, tax-filing season may have some added confusion. According to preliminary data from the Internal Revenue Service (IRS), roughly half of those who enrolled in the ACA’s exchanges and received APTC ended up owing money to the federal government, because their income ended up higher than they had anticipated. For most people, that means a smaller refund ($800 smaller on average), rather an out-of-pocket payment.
It’s not all bad news for enrollees who owe — a smaller refund just means they had additional help affording monthly premiums. And the law contains protections for lower-income enrollees, capping APTC repayment at $600 for people below 200 percent of the federal poverty level (FPL), as you can see in this table from the Kaiser Family Foundation:
Above that, though, the potential repayments grow larger. In fact, according to the IRS data, 25 percent of enrollees who overclaimed ended up owing back more than $1,000 to the federal government.
Thus, repayment can present major challenges, especially for individuals and families with little slack in their budgets. Earned Income Tax Credit (EITC) is an important safety net for low-income families, helping them afford transportation to work, school supplies, and much more. It also provides a boost after the burden of the holiday season. Millions of families depend on the assistance, often filing their taxes early in the year to obtain it right away. Thus, over-claiming APTC could place an unexpected strain on household budgets.
Although enrollees will continue to gain experience with the APTC process, not everyone will be able to accurately predict their income for the upcoming year. Even with email reminders, many will still not update their online profiles when income or family circumstances change (and some information technology (IT) systems are not yet well-equipped to manage such changes). These issues may persist for some time.
One solution is for enrollees to wait until tax filing to receive their credit as a lump sum. For most people, however, that would diminish their ability to afford monthly premiums. Another is to claim a partial amount of what they are eligible for at the time of application. This would build in a financial cushion: they may not get quite as much monthly assistance, but if they experience changes in their personal lives during the year, they wouldn’t end up owing as much back to the IRS. Enrollees across the country have this option available to them, but it’s not clear many chose it — based on preliminary IRS data, repayment is still a problem for many subsidized enrollees. So, is there a role for exchanges in requiring, recommending, or nudging them to claim less than the full credit?
How Exchanges Can Help Minimize Repayments
The District of Columbia’s exchange, known as the DC Health Benefit Exchange Authority, does exactly that. All other exchanges set the default amount of tax credits that applicants receive at 100 percent of what the exchange determines them qualified for, based on previous tax data and the applicant’s prediction for the coming year. In other words, they automatically get what they appear eligible to get. DC opted to take a different approach, lowering the default to 85 percent.
Behavioral economics research demonstrates the power of defaults, a type of behavioral “nudge.” Typically, only the most motivated individuals proactively select something different from the default option. It’s a way to encourage a particular choice without being prescriptive about it.
Exchanges might want to set a lower default for the following reason: if an enrollee’s income grows over the course of the year, and she had claimed less than the full tax credit amount available, she will be at lower risk for repayment to the IRS at the time of tax reconciliation the next year. If the individual’s income does not increase, then she will be eligible for a refund. In DC, a lower default seemed like a good way to encourage caution during enrollment.
Results Of The DC Experiment
However, something quite unexpected happened there.
The vast majority of people who enrolled in subsidized plans in DC bypassed the default and actively chose something different. According to minutes from an April meeting of the Health Benefit Exchange Authority Executive Board, 86.6 percent landed somewhere above the default option, with three-quarters of subsidized enrollees claiming the full amount.
As you can see from the chart above:
- 74.5 percent of enrollees opted for the full credit
- 12.1 percent selected an amount somewhere between 85 percent and 100 percent of the credit
- 6.6 percent took no action and kept their election at 85 percent of the credit
- 6.8 percent chose an amount below 85 percent of the credit
What’s clear from this data is that most people in DC found it important to receive the full amount of tax credits they were eligible for at the time of applying for coverage. Less clear is why. Perhaps some would have found premiums to be unaffordable otherwise or did not realize the tax consequences of an increase in their income. Or maybe the nudge just wasn’t strong enough.
The IRS data does not include a state-by-state breakdown of repayments, so we don’t yet know how many DC enrollees received a smaller federal refund or owed money to the federal government. Maybe all of the people who chose 100 percent were fully confident their income wouldn’t change and the average repayment in DC was very small as a result. DC’s tax dynamic might also be different due to the unique characteristics of the individual market there, with only 11 percent of enrollees eligible for financial assistance (in all other exchanges it is a majority, averaging around 80 percent).
However, if the experience in DC follows the general national pattern of claiming too much up front, a firmer nudge or broadened choice architecture might be necessary. For instance, through a 1332 waiver—a provision in the ACA enabling states to craft alternative coverage frameworks—exchanges may even be able to withhold some portion of a tax credit until tax time, in order to protect enrollees from a painful repayment. But that could make it harder for many to afford their monthly premiums in the meantime.
The bottom line is that exchanges face a difficult trade-off between ensuring up-front affordability for enrollees and offering an appealing enrollment experience, including protection from later financial strain. With policies such as defaults, exchanges can make it just hard enough to claim the full credit so that only those who truly need it to afford monthly premium payments opt for it. More data on tax filings in DC will show us whether the nudge had much of an impact this year.
Leprosy
Leprosy: An infectious disease of the skin, nervous system, and mucous membranes that is caused by the bacteria Mycobacterium leprae. Leprosy is transmitted via person-to-person contact. For thousands of years leprosy was one of the world's most feared communicable diseases because the nerve and skin damage often led to terrible disfigurement and disability. Today leprosy can be cured, particularly if treatment is begun early. Antibiotic therapy is the mainstay of treatment. Surgery can be performed to reconstruct damaged faces and limbs. Also known as Hansen's disease.
MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You
Of PCPs and THC
The drug test came back abnormal. There was THC present. I walked back to Mrs. Johnson and raised my eyebrows.
“What’s wrong?” she asked, not used to whatever kind of look I was giving her.
“Uh, you forgot to mention to me that you smoke weed.”
She blushed and then smirked. “Well, yes, I guess I forgot to put that down on the sheet. I don’t do it real often, but sometimes it takes mind off of things. I just get real anxious about my kids, my husband…and my heart problems. I only smoke one or two a night”
She’s not your usual picture of a pot-head. She’s in her sixties, has coronary heart disease, irritable bowel, hypertension, is on Medicaid, and is the essential caricature of the the poor white folk who live in the deep south. And she smokes weed.
I was doing drug testing on her as part of my office policy. Mrs. Johnson gets 30 Percocet per month, and so clearly poses a high risk of drug trafficking, escalation to PCP, crystal meth, and LSD, and ending up behind bars for the rest of her life. That’s why I had to test her. And now I caught her in a lie, trying to cover-up her use of illegal drugs.
My old practice had a policy of discharging such people immediately from the practice. Some of our physicians had the belief that any departure from the rules should be dealt with swiftly and harshly. It’s part of the reason I couldn’t stay in the practice. They had taken a large step away from the most important part of the doctor-patient relationship: trust. They saw any evidence of dishonesty on the part of the patient as a reason for discharge from the practice, even if a very good explanation existed. I was just “too soft” in their thinking.
Thank goodness.
While I do find value in regular drug testing of patients using controlled drugs, the way in which it is often enforced in many practices is with an air of suspicion. It’s just one more factor in the decay of trust on both sides. Yes, people who abuse the system to get drugs to abuse or sell and doctors who dole out drugs like candy are the ones to blame. Mrs. Johnson is not part of the problem.
Physician mistrust goes far deeper than drug testing. My patients often seem embarrassed when they have symptoms that don’t make sense because, it turns out, they are disbelieved by other doctors. I have had many patients comment that it is “nice to have a doctor who actually listens to me and what I actually say.” This is sad. How can anyone give care to patients if they aren’t listening to the patient and taking what they say seriously? It’s as if the only thing holding the doctor back from making a proper diagnosis is the patient’s ability to give their history.
The problem of mistrust works the other way as well; people don’t trust their doctors. Just today I had a woman complain to me about the doctor she had been seeing “for the past 10 years” who made her “come in and pay $120 just to get a prescription filled!” She went on to complain about how so many doctors are “just in it for the money.”
Her view of the motivation of doctors comes from the central dilemma our payment system puts doctors under: choosing between the business and the patient. The ideal business scenario for doctors is to have very sick patients who require multiple procedures, yet who take as little time as possible. This is what is good for business, as doctors can have a higher code/hour submission rate. This, of course, is the absolute worst thing for patients, who want to be healthy, avoid unnecessary or excessive care, and have doctors who spend time with them. On top of that, this best business scenario will invariably lead to lower value care (lower quality at a higher cost).
Doctors are forced to either give up income to do what is right for patients and for society, or to stuff their consciences securely in the overhead compartment and run the business well. Some doctors seem to comfortably lock their consciences away, but most find a compromise on the spectrum between high income/bad medicine and low income/good medicine. It’s the main thing that drives doctors to burn out. It’s why I left.
So the patient is left wondering if the reason the doctor can “only handle one problem at each visit” is because it makes more money. The patient wonders if the doctor doesn’t talk to them on the phone because they only make money when they come to the office. The abbreviated care most doctors provide further undermines any belief that the doctor has the patient’s best interest in mind. This care is abbreviated even more by the onerous demands of coding, defensive documentation, and data submission for “quality measures.” How can good care occur when what little time the doctor spends with the patient is dominated by the doctor-computer relationship? Those of us who are bothered by such things are the ones who go home feeling terrible about the poor care we are giving.
One of the main reasons I don’t charge a copay for office visits in my current practice is that I wanted nothing to undermine my patients’ trust. The reality is that charging a copay would do little to increase my income, but a patient could question my motivation for requiring an office visit. Some doctors, criticizing my approach, recapitulate the mistrust of patients wondering if some patients would “take advantage of this and want to be seen all the time.” I have over 600 patients now and that has never happened. Why would someone want to go to the doctor all the time? It simply doesn’t happen. I think it’s because people feel fortunate to have me as their doctor and don’t want to abuse the system. They seem more apologetic about coming in and “bothering me” than ready to gorge themselves at the all-you-can-eat Dr. Rob buffet.
I see an enormous difference in the trust between me and my patients since starting the new (sort-of new) practice. I tell them that my business model works best when they are healthy, happy, have their questions answered, and paying their monthly fee. I explain that the re-alignment of my business success to coincide with what they want for themselves (and what works best for the healthcare system), and they like it. They want me to succeed. Some have even offered to pay me extra when they were particularly complicated.
It takes a while for people to actually be in a position of trust with their doctor. They look for some catch or some way in which I am going to short-change them. Yet I have every motivation to keep them happy and healthy. Once they realize this, they seem to relish our relationship, not wanting to jeopardize it by being “too demanding.” I think it’s remarkable to both sides: I am amazed that my patients want me to be wildly successful in my business, and my patients are amazed that I want them to be incredibly healthy, off of medications, and only needing me infrequently.
So when Mrs. Johnson’s drug test came back, I wasn’t inclined to kick her out of my practice or even lecture her about telling the complete truth. After all, isn’t smoking a little weed better than taking daily Valium or Xanax? Isn’t it better than drinking moonshine, or asking me for more Percocet to “calm her nerves?”
Instead, I laughed. The craziness of this “country bumpkin” doing her best Cheech and Chong imitation just seemed funny.
“Just don’t smoke too much, Mrs. Johnson,” I said. “And be careful getting that stuff. I don’t treat people who are in jail!”
She laughed, and gave me a hug before she left. On her blouse I noted a faint but familiar smell from my high school days. Yes, the test was right.
Rob Lamberts, MD, is a primary care physician practicing somewhere in the southeastern United States. He blogs regularly at More Musings (of a Distractible Kind),where this post first appeared.
Fifty Years Later: Why Medicaid Still Matters
This year, as we celebrate the 50th anniversary of the establishment of Medicaid and Medicare, it is worth reflecting on the performance and value of these critical programs. Since their inception much has been written on the evolution and roles of both programs in our health care system.
Medicare has often been the main focus of such health care discussions. However, it is important, especially now in the face of Medicaid expansion, to focus on why Medicaid matters.
Although the answer to this question could fill many pages, it is worthwhile to focus on just seven facts and the implications that these facts have for health care policymakers and leaders as we look forward to the next half-century.
Seven Facts About Medicaid
1. Medicaid is the largest health care program in the United States and has a great impact on a broad range of Americans.
Medicaid and the Children’s Health Insurance Program (CHIP) cover 70 million people, almost half of the births in the U.S. and approximately 40 percent of our nation’s children. If how children and their families fare in our society influence the country’s future, then Medicaid is critically important to the well-being of America.
Not only is Medicaid the country’s largest single source of health care coverage, but it is also a principal provider of many essential services. There is a broad recognition that providing meaningful mental health care not only helps people lead productive lives, but impacts the daily functionality and safety of society. Medicaid is critically important to achieving that goal, as it is the largest provider for mental health care, paying for 26 percent of all behavioral health spending.
Also worth noting is the interface between mental health and incarceration. Nearly 50 percent of incarcerated individuals have mental illness. Our jails have become mental health institutions by default. One study noted that incarceration costs five times that of drug treatment. The cost of incarceration in New York City is more than 10 times the cost of a year of Medicaid coverage for a person with a behavioral health diagnosis.
Despite the excess differential cost of incarceration, being in jail has little to no therapeutic effect on mental illness and likely worsens it. If we want to lower our rate of incarceration and the concomitant costs of jails and prisons while improving outcomes, Medicaid’s coverage of mental health services will need to play an increasingly central role.
2. Medicaid coverage provides access to care that enables the health and well-being of millions of Americans who otherwise would have little or no care at all.
Medicaid coverage offers a myriad of advantages and remarkable achievements since its inception. While rates in the U.S. are still far too high, infant mortality has been significantly reduced from 26 per 1,000 live births in 1960 to 12.6 in 1980 to 7.7 in 1997. Much of this progress is due to Medicaid coverage of pregnant women.
Children in Medicaid and the Children’s Health Insurance Program (CHIP) are more likely to have a usual source of care, to have had a well-child visit, and a visit with a specialist and are less likely to delay care than similarly situated uninsured children. In addition, children on Medicaid and CHIP have higher rates of well-child visits and similar rates of specialists’ visits as similarly situated children with employer-sponsored insurance.
However, Medicaid and CHIP coverage are not without challenges regarding provider availability. Physician participation is lower than for Medicare or private insurance. In many states, most dentists treat few or no Medicaid or CHIP patients. In spite of real progress in providing meaningful health care to tens of millions of lower-income Americans over five decades, our country has failed to eliminate the socio-economic disparities that children who live in poverty routinely experience.
3. Medicaid enables private insurance and Medicare to function more efficiently and affordably.
Medicaid covers people and care that private insurance would not and could not cover economically. An excellent example is coverage under Medicaid for disabled children. The program either completely covers the expensive costs for these children or wraps around private coverage that fails to do so.
In addition, Medicaid covers at least three quarters of all disabled adults on Supplemental Security Income (SSI). Patients with a disability make up 15 percent of Medicaid’s beneficiaries, but account for 40 percent of the cost. Thus, in recent years, the annual cost of care for disabled beneficiaries in the Medicaid program has exceeded 170 billion dollars — costs not transferred to private markets or Medicare.
This value can also be demonstrated in some private insurance premium support models. In these models high cost and medically frail patients can remain on Medicaid as it provides the necessary wrap around coverage for medical services that the private insurance does not provide.
Another important way that Medicaid allows the private market to function more efficiently is through its support of safety-net hospitals and community clinics with Medicaid’s special payments to these facilities, including disproportionate share and cost-based reimbursement, respectively. This enables the safety-net hospitals to provide more than $150 billion in care annually preventing enormous health care costs from being shifted to the for-profit and not-for-profit systems as well as to private insurance.
Moreover, these hospitals often provide some of the most expensive tertiary care for the entire community. In the 10 largest U.S. cities, core safety-net hospitals provide over 60 percent of the burn care and over 30 percent of the trauma care removing high cost care from private sector facilities.
Similarly, community health centers care for 22 million individuals, 76 percent of whom are on Medicaid or uninsured, again preventing cost shifting to the private sector. In addition, by caring for millions of vulnerable Americans, safety-net hospitals and community health centers are critical to expanding the capacity of our health care system.
Finally, Medicaid has also had an enormously positive effect on cost growth in Medicare. Almost 20 percent of Medicare beneficiaries receive assistance from Medicaid for their Medicaid coverage either through premium or cost-sharing assistance or by receiving full coverage.
Medicaid also makes Medicare affordable by covering 61 percent of long-term care coverage and by paying for 40 percent of the total cost of those who are dual eligible.
If the private sector and Medicare are to continue to be viable in the long term, Medicaid will need to remain a critical pillar for the entire health care system.
4. Medicaid is more cost efficient than either private insurance or Medicare despite the highly vulnerable population it covers.
The federal office of the actuary for CMS reported that from 2007 to 2013 the cumulative per capita spending in Medicaid grew by 6 percent. Meanwhile, Medicare grew by 14 percent and private insurance by 29 percent. The office projected that by 2023, private insurance cost growth will exceed 100 percent while Medicaid and Medicare growth will be less than 65 percent.
Moreover, the majority of Medicaid’s cost increases over time has been due to increases in patient numbers, not increases in per capita cost. The lower per capita cost of Medicaid coverage, despite the vulnerability of the populations it serves, may relate in part to the delivery models and innovations that Medicaid has adopted.
Medicaid has aggressively moved to managed care in most states, including risk-based and passive enrollment models. Seventy percent of Medicaid patients, including some dually eligible patients, are in some type of managed care with the majority in risk-based models. The movement of many individuals from nursing home care to home and community-based services, now accounts for more than half of Medicaid spending on long-term care and likely improved their quality of life and lowered the cost of this expensive service.
Certainly, Medicaid cost efficiency helps keep overall health care costs lower. It even offers Medicare and private insurance some relevant approaches to achieve higher value care.
5. Medicaid is exceedingly complex.
Medicare is one unified federal program. In contrast, Medicaid actually comprises 56 programs. There is a separate program for every state, territory, and the District of Columbia.
Moreover, the many wavier variations multiply by many times the functional number of programs. Medicare has essentially two straightforward criteria for entrance — age and the number of quarters of Social Security one has paid. It has two additional criteria for access through disability or renal failure.
Medicaid has approximately 50 to 60 eligibility pathways that are multiplied by state variations on many of them, making eligibility criteria extraordinarily complex. This variability creates issues for enrollment, payment, management, and transparency for patients, providers, states, and the federal government.
Some would say that state flexibility and multiplicity of programs has enabled innovation and experimentation in Medicaid to improve it. While this may be partly true, it is highly unlikely that there would be support for this level of complexity for Medicare as the price of innovation.
There is arguably no greater need for improving Medicaid than to simplify it. Reducing Medicaid’s administrative complexity could remove waste, costs, and a myriad of opportunities for errors. The savings to be achieved by reduction of duplicative costs emanating from 56 administrative and health information technology infrastructures makes considering approaches to reduce the complexities of the program worthwhile.
6. Medicaid is financed largely by the federal government.
Despite the genuine concerns of states about Medicaid’s cost, it is largely federally financed. With the recent Medicaid expansion, federal payments have risen to 62-64 percent of Medicaid financing. This figure would rise substantially higher if the additional special federal payments and the true “budget neutrality” of state Medicaid waivers were included. The array of federal financing tools both minimizes and hides the actual cost of the program to each state.
It is also often forgotten that Medicaid is the largest source of federal funds flowing to states with a significantly positive financial and budgetary impact. Moreover, during economic downturns, the federal government has provided additional assistance to states by increasing the Federal Medical Assistance Percentages (FMAP), enabling most states to live within their budgets while continuing to care for their citizens and maintain payments to health care providers.
7. Medicaid is burdened by geographic and generational disparity.
Health care is more uniform and inclusive for seniors than for other Americans. No matter how wealthy a person is, they are entitled to Medicare. But until the enactment of the Affordable Care Act, an individual under age 65 was largely excluded from health care no matter how poor they were unless they qualified for Medicaid under certain categorical programs such as pregnancy.
No matter where a Medicare beneficiary lives, coverage, benefits, and personal costs under the program are the same. A beneficiary could move from Massachusetts to Texas in retirement and Medicare coverage would remain intact. This is not the case for Medicaid. Due to variations in state policy, moving from Massachusetts to Texas would significantly impact the individual’s coverage, benefits, and personal costs. This geographic and generational disparity disproportionately affects minority communities.
Given that we are a nation that values fairness and a level playing field, this marked difference between Medicare and Medicaid simply fails to pass the fairness test.
The Future of Medicaid
Medicaid and Medicare both were born at the same time, but they have matured into quite different entities. Yet, each is an important pillar of our country’s health care infrastructure.
The critical support that Medicaid provides to the health of the nation and to the viability of Medicare as well as to the private health care sector only underscores the recognition that the program deserves over the next 50 years.
We have come a long way in addressing the health care needs of all Americans. Medicaid is one of the primary reasons why. It merits our support, but also our resolve to continue to improve it.
Texters Walk Cautiously to Avoid Collisions
A new study suggests that people walk more cautiously when they text, and they're no more likely to trip over obstacles than those who don't use their mobile phone while walking.
Drug May Ease Passage When Kidney Stone Strikes
Tamsulosin is especially helpful with larger stones, while smaller ones may pass on their own, study finds
Scientists Suggest New Way to Predict Lung Cancer Risk
They focused on telomere length, discovered association
What's It Really Like to Have ADHD?
Having ADHD can make you feel paranoid. Explore a personal story of one man's experience with adult ADHD.
Taking St. John's Wort for Depression Carries Risks: Study
Herbal remedy isn't regulated, and can have side effects and serious drug interactions
FDA Approves 'Belly Balloon' Device for Weight Loss
Inflated with sterile solution and kept in stomach for no more than 6 months, it makes people feel full
Wednesday, July 29, 2015
We Designed An Industrialized Healthcare System
I have noticed over the past few years that as I travel and speak to patients, physicians, ministry of health officials, CEO/COO/CFO, and various hospital administrators that the above words often come up in the midst of our conversations.
What surprises me the most is the above words originate from manufacturing, not healthcare. As we identify opportunities to improve quality and access while reducing costs in healthcare, many leadership teams have looked to hire the best minds from Toyota, Kimberly Clark, and Boeing.
Do not get me wrong; I believe there is richness in building a diverse cross functional team, borrowing from other businesses, and finding news ways of connecting the dots to drive innovation.
However, I am not convinced we have historically done this well in healthcare. I believe the only thing we have accomplished is the design of an industrialized healthcare system.
We collectively managed to mass produce average care, scale it, and make everyone mediocre.
The industrial revolution is that period of time that brought innovation which allowed us to move from making goods by hand to being able to make goods with machines. As time moved on, technology began to evolve, and we continued to improve our ability to produce more goods. Technology such as the power loom and the cotton gin improved the output of a worker by 40 to 50 times. The steam engine gained in efficiency and was able to go further, do more work, and use less fuel.
Moving from charcoal to the use of coke in iron making allowed us to drive the cost of iron down, produce more, and achieve economies of scale.
Creating goods cheaply, while increasing revenues and allowing more people the ability to purchase more goods enabled the emergence of the middle class. For the first time in history, there was an economic advantage that was widespread across the population. The standards of living increased with the ability to provide adequate housing, acquire proper nutrition, and allow life expectancy to increase.
The middle class meant that there was more people able, willing, and wanting to be employed to provide for themselves as well as their family.
Increase the middle class and you develop a need for more goods.
Then came along a man named Henry Ford. He developed the assembly line and the ability to mass-produce a product. Henry’s assembly line principles were simple:
- Place the tools and the men in the sequence of the operation so that each component part shall travel the least possible distance while in the process of finishing.
- Use work slides or some other form of carrier so that when a workman completes his operation, he drops the part always in the same place—which place must always be the most convenient place to his hand—and if possible have gravity carry the part to the next workman for his own.
- Use sliding assembling lines by which the parts to be assembled are delivered at convenient distances.
As time progressed, technology improved, and capitalism grew. We continued to see more and more ways to mass-produce goods. We realized that if you can develop a process that is well documented that you could begin to automate it. The more automated a job, the less defects, the more cheaply you can produce a good, and the more profits our capitalist can reap.
Remove the people, remove the connections, remove the art, and you increase quality, access, and lower costs.
Looking to the once shining example of industrial might, Detroit, the assembly lines are now empty; and the few remaining are filled with workers: robot workers. Fewer men, more machines.
We scaled mediocrity to the point of making the extraordinary truly extra ordinary.
In a June 15, 2012 article published in HBR called, “Five Keys To Prepare For The Business of Aging” written by Marta Elvira, Carlos Rodriguez Lluesma, and Nuria Mas, they outlined one of the major global problems healthcare had to face- an increase in the aging population.
In the article, they clearly stated that there are two ways in which healthcare will need to tackle the topic. The first is to moderate consumption of healthcare by introducing copayments to certain services. The second recommendation is borrow from manufacturing, and focus on the reduction of “waste” in the production of healthcare, or to focus on the efficiency. (same answer, just different framing)
Is designing a mass production system to manufacture care for people the right answer?
Is healthcare moving towards the same demise as the world of manufacturing? Are we designing a system that takes all of the art, all of the humanity, all of the connections between patients and their care team out?
Did we design a system that was initially all about people, care, healing, and moved it into an automation assembly line? Have we mass-produced care inside of a factory that we call a hospital? If we can adopt processes, repeat them, and apply them to all cars, I mean patients, we can then build more factories, oops, I mean hospitals.
Are we “leaning” the care out of our hospitals and clinics? Have we “6 Sigma-d” ourselves into a false reality that being human and making mistakes will never happen?
We have adopted the 80-20 rule. We believe that for 80% of the patients that the same care is going to work, most of the time. We believe that for the ‘outliers’ or the 20% of patients diagnosed with a chronic disease, comorbidities, or extenuating circumstances that our process do NOT work well; Or ever. We do a subpar job managing those patients, caring for them, or meeting their needs. Our factories, I mean hospitals, can’t handle producing care for those patients. So our costs have skyrocketed.
The adoption of EMR/EHR, clinic decision support, computer assisted detection (CAD), Watson Health, and pathways are all technologies that allow us to automate the care we deliver.
We schedule patients early in the morning so that we can fill our surgical suites. We have developed a 10-minute time slot to get cancer patients in and out of radiation oncology. I have seen Radiology departments that can see as many as 20-25 patients in an hour on a single scanner.
All in the promise of caring for more people, reducing the costs to the healthcare system, and improving outcomes for patients. Yet the price that we pay continues to grow.
As prices continue to rise, so does the mediocrity.
Healthcare isn’t producing Lamborghini’s or even Toyota’s. Our hospitals are producing Geo’s (yes, I specifically picked an old unreliable unprofitable production of cars that is now obsolete).
There is not a lot of difference between Hospital A and Hospital B. They each are a big box, with 4 walls, and technology. Both hospitals produce care that lives and breathes by the same metrics all in hopes of being paid and reimbursed in the same manner.
Both hospitals are filled with people.
When physicians and other members of the care team are subjected to being measured and paid on productivity, process improvement, and other manufacturing measures they are encouraged to become a cog in the factory of healthcare. They are essentially “incentivized,,” or paid, to increase the production of extra ordinary care.
Our greatest resource, people, are being encouraged to forget their art, and their passion to become a cog in the process of producing average care. (read: How Might Crushes Right In Healthcare)
In the beginning physicians used to make house calls. Physicians had a personal relationship with the people living in their communities. People paid with cash, chickens, bread, and other goods.
We moved into hospitals as technology evolved because it was easier to have a centralized location, usually in the center of the community, where physicians could convene, share, connect, and leverage the consolidated resources of technology and expertise. It made sense for patients to go where all the expertise was managed and the care was being produced.
Care used to be extraordinary.
Today care is extra ordinary.
The relationship, the bond, the link, the connection between a patient and their physician(s) and care team(s) would last for 25 years. They would grow old together; they could share in the successes and tragedies of life together.
Here we are in the year 2015. In a world where connection is everything, and anyone has the ability to be extraordinary; healthcare seems to be moving more and more towards a system of sameness. Creating care for the lowest common denominator.
We are scaling the mediocrity.
In all of my meetings, lectures, and discussions with patients, physicians, nurses, leadership, the C-Suite, and care teams I have never once heard anyone ask the question, “How can we become more average? How do we accelerate mediocrity?”
That is exactly what we are being asked to do on a daily basis. We concede our decision to make art and instead agree to mass-produce average care.
We do not place physicians, care teams, or the information in a proper sequence of operation when we produce care. All of our information, technology, and “healthcare networks” are fragmented. Our people are scattered.
We do not place replacement hips, regions of interest on an axial image, planning target volumes, intake forms, or labs in the same place. They are all varied because we are not producing work for an inanimate object. We produce care for living organisms. We care for humans. Humans are our patients.
We do not place our care areas in convenient locations and seldom are they in the sequence in which a patient experiences or needs the services. Primary care is not located next to radiology and pathology. Pathology is not next to radiology. Women’s Services is not adjacent to outpatient surgery. Surgery is not located within Oncology. We make our patients, those that we produce care for, maneuver the complexity and fragmentation of our production lines, our factories, our hospital networks.
We forgot Ford’s manufacturing principles.
At one point in time the workers in Detroit took great pride in meeting and/or exceeding all of their production targets, quality metrics, and process improvement goals….before they were replaced with fewer people and eventually machines.
If you do not take the time to connect with the care team or patients, a robot can replace you.
A robot will replace you.
I believe there is a Shangri-La, that combines both technology and people that allows us to make new art. Better art, Innovative art in healthcare. An art that combines the best of patients and their care teams, leverages technology, and actually delivers on a new set of metrics that matter, that differentiate. Whether it’s the new Minute Clinic by CVS, Medisafe, Ginger.IO, Medical Tourism, Telehealth, or Care Trucks, art can still be created. We haven’t lost the ability to create. Yet.
I choose to design a healthcare that defines and answers patient problems.
I choose to create art.
I choose to scale the art in caring for people.
I choose to connect.
Together we can, and will, bring back the extraordinary in healthcare.
One patient, one physician, and one care team at a time.
So to make this a reality that I believe in, here’s my offer: the first 3 healthcare leaders (patients, physicians, management, executives, care teams, professional organizations, or hospital networks) that comment (or email me) on this post with a defined healthcare challenge they are focusing on, I will donate my time to collaborate and work with your team to design an extraordinary outcome.
If you are looking for a community who is looking to change health care in the same way as this article, check out the HCLDR Twitter Chat and blog to be part of something great!
Antiretroviral therapy (ART)
Antiretroviral therapy (ART): Treatment that suppresses or stops a retrovirus. One of the retrovirus is the human immunodeficiency virus (HIV) that causes AIDS.
Retroviruses are so named because they carry their genetic information in the form of RNA rather than DNA so that the information must be transcribed in "reverse" direction -- from RNA into DNA.
MedTerms (TM) is the Medical Dictionary of MedicineNet.com.
We Bring Doctors' Knowledge To You
Jealousy Can Drive Some to Problem Drinking, Study Suggests
Researchers say findings could help identify people at risk for alcholism
A Perfect Combination: The Cleveland Neighborhood Model For Urban Health Care Education
I grew up in inner-city Cleveland, Ohio, and graduated high school at the top of my class with high aspirations. I was going to change the world and make my family proud. I was going to be a doctor. There was always enthusiasm whenever I shared that I was a pre-med major.
The thrill was soon gone after I rode the wave of pre-med classes that got increasingly difficult with each passing semester. I completed my science degree with average grades and somewhere along the way, lost my desire to pursue medicine.
Thankfully, all of my science education and interest in health was not lost, as I embarked on a successful career in public health, which led to my current role as a program officer at the Cleveland Foundation.
How many people have unrealized dreams of improving the health and well-being of people in their community but lack the resources that are necessary to successfully realize them? Ironically, these are the same dreams that could transform the health of people who live in their communities and do not have access to primary health care. It could be the perfect combination for impact—people who are from the community helping those in the community.
Several years ago, a local study conducted by the Cuyahoga County (Ohio) Board of Health revealed a 24.5 year difference in life expectancy in residents who lived a mere 8.5 miles apart: the eastern Cleveland suburb of Lyndhurst versus the inner-city Cleveland neighborhood of Hough.
The ugly truth glared loud and clear: place matters in how we live, age, and ultimately die. Despite living in a city that is rich with top-notch hospital systems and in the climate of Medicaid expansion and the Affordable Care Act, there are people in our community who suffer and die from treatable, chronic diseases because of social determinants of health, including lack of access to health care.
As a funder that works to keep its ears close to the ground, the Cleveland Foundation has heard about the growing shortage of primary health care providers nationally and locally. Moreover, at the foundation, we’ve witnessed the impact of the shortage as we learn more about our community’s disproportionately high rates of infant mortality, childhood lead poisoning, obesity, cancer, and other medical and societal conditions that negatively impact the quality of life of our community members.
It was time to take action! The Cleveland Foundation saw this alarming crisis in this community as one that epitomizes our mission to “enhance the lives of all residents of Greater Cleveland, now and for generations to come.”
So when the leadership of Cleveland State University (CSU) and Northeast Ohio Medical University (NEOMED) formed a strategic partnership to design and implement a model to develop the urban primary care workforce while addressing health disparities in this urban community, we at the foundation believed that it was a perfect partnership that will have a positive impact in our community.
The NEOMED-CSU Partnership for Urban Health is a six-year program with two admission pathways available to CSU students. The first is an early-entry option (baccalaureate/MD) in which students are admitted to the joint program in their junior year at CSU and are promoted to NEOMED upon satisfactory completion of promotion requirements. The second is a post-baccalaureate/MD option for students who have college degrees in other areas.
In 2010 the foundation awarded the partnership a $250,000 planning grant. As a result of these efforts, the NEOMED-CSU partnership proposed the Cleveland Neighborhood Model for the recruitment and training of medical students who reflect the socioeconomic background and cultural make-up of their communities as elements in its formula to improve access to high-quality health care and improve neighborhood-level outcomes. (Nineteen percent of students in the current cohort are from underrepresented minority groups, and that figure actually shows a 14 percent increase since the program’s inception. The partnership recognizes that there have been challenges in the pipeline and recruitment of targeted students and will employ more aggressive recruiting measures beginning in the fall 2015 school year.)
The planning grant was followed in 2011 by a $1.5 million, three-year grant for implementation. The partnership welcomed its first cohort of thirty-five baccalaureate, post-baccalaureate, and medical students in 2012. Currently, there are 105 students engaged in the six-year program, and the partnership projects that a cumulative total of 175 CSU students and 175 NEOMED students will have participated in the program over the next five years.
This program is unique in many ways, as it invests dollars, along with a tremendous amount of academic support and community clinical experience, in students with academic potential, high levels of emotional intelligence, and a desire to practice in the urban community. It also strategically exposes middle school and high school students to health care careers as a pipeline for recruitment into the program.
The partnership’s return on investment is physicians who have been trained to recognize the social determinants of health and are committed to serve our community’s underserved and most vulnerable residents. The partnership works feverishly to overcome the challenges of securing clinical “clerkship” slots in the competitive climate of medical education in Cleveland.
The foundation’s decision-making process entailed recognition of the risks involved in investing in students with no guarantee that they will return and practice in Cleveland after completing their education. However, we also see the clear community need and the commitment to the students and community from the partnership’s leadership team, including CSU President Ronald Berkman, NEOMED President Jay Gershen, NEOMED-CSU Director Sonja Harris-Haywood, and the partnership’s community advisory board.
This is the kind of hard work that hometown hero and Cleveland Cavaliers basketball star Lebron James meant when he said, “In Northeast Ohio, nothing is given. Everything is earned. You work for what you have.” We believe that the risks and work are worth the reward of improved health outcomes, diversification of our local medical workforce, and the potential for the Cleveland Neighborhood Model to become a national model for urban primary care education.
I sat with pride as Ronn Richard, president and CEO of the Cleveland Foundation, announced at a June public event the $5.5 million, three-year grant that will continue this life-changing, transformational work. I thought about the line from the Langston Hughes poem that speculates about what happens to a dream deferred.
The image in my mind of a dream deferred became a dream fulfilled as we listened to NEOMED-CSU student Carl Allamby speak of graduating high school below the 50th percentile and his excitement about having an opportunity (twenty years after high school) to make his childhood dream of becoming a doctor come true. He will have the chance to make a lifesaving impact on the economic and health disparities that exist in the city where he grew up. Carl will enter his first year of NEOMED this fall with a 4.0 grade point average from the CSU pre-med component of the program.
At the grant announcement event, former US Rep. Louis Stokes (D-OH) called it a “great day in Cleveland.” In my view, the stars have aligned to create the NEOMED-CSU Partnership for Urban Health, which will change lives and improve the health of this community.
Subscribe to:
Comments (Atom)