A Slowing Economy--What Impact Will It Have On The Health Care Sector?

Health care is considered a business that tends to be resistant to economic downturns. Brian Klepper returns with a post asking just what the impact of a slowing economy will have on the health care sector. He specifically points to changes in real wages and home prices.Health Care and The Gathering Stormby Brian KlepperHere are two very interesting and frightening charts that my good friend

Another Government Study Questions the Medicare Advantage Business

You can now add the Government Accountability Office (GAO) to MedPAC and the CBO as highly respected government agencies who have issued reports questioning the cost effectiveness of the private Medicare program.This time, the GAO said:Insurers will receive $86 billion this year for the private Medicare plan--Medicare Advantage.Last year the government paid the private plans $8.3 billion more

Motley Fool still likes Healthways

In this shrewd "Just In" analysis that arrived today, the Motley Fool points out that Healthways still has a lot going for it. Their read of the latest earnings warning and stock price dip is that it's not only hurricanes, earthquakes and meteors but some kitchen sinks too - all designed to get some short-term bad news out of the way.

If you check out my post from yesterday, you'll see the Disease Management Blog pointed out that despite Healthways' stock price dip, the company still had an impressive P/E ratio. Fool would agree that the long term fundamentals for the company - and for disease management - are still intact.

Cramer isn't happy with Inverness & Matria

Oh my!

Dorsey and Berwick: Back to the Future with Capitation

The disease management blog would like to alert its readers to a perfect world of healthcare, where doctors jettison individual opinions of scientific merit. Where enlightened physician leaders can, with one meeting or one email or one EHR screen pop-up, change provider behavior. Where clinical outcomes, not return on investment, drive capital allocation. Where doctor’s salaries correlate with work effort and garner unrivaled professional satisfaction. Where is that place you ask? According to the Boston Globe editorialists Drs. Dorsey and Berwick, just pilgrim north, cross into Katmandu and navigate the Big Dig. Then gaze into the past and look for that great shining light on the hill, that paradise of professionalism, that citadel of care, the cornucopia of coordination, that of capstone of capitation, Harvard Community Health Plan ("HCHP").

While they were penning their editorial, Drs. Dorsey and Berwick must have been Googling the Disease Management Care Blog, because our examination of “Gaydolf”-style capitation presaged many of the themes in their Boston Globe editorial. As readers of the blog may recall, I argued that the “care coordination” 30% premium layered on top of a mathematically neutral capitation payment was used by some physicians in some settings in the past to build “systems” of care. Drs. Dorsey and Berwick tell us that HCHP was one of those settings. They also recognize the majority of other clinic settings neglected to put that 30% to work and were “hijacked” by dysfunctional incentives that pursued profits not patients. They suggest capitation got a bad rap because the success of HCHP didn’t get the attention it deserved. They think Gaydolf shouldn't be a dirty word. He got a bum rap. He wuz robbed.

In the opinion of the disease management blog, their treatise is not only confused, it’s naive. It’s confused because the HCHP progeny's considerable achievements under capitation have also been matched by considerable success in a non-capitated environment. It’s naïve because the practice settings described by Dorsey and Berwick have very little in common with the present-day, entrepreneurial, independent-minded, non-salaried physician-owned practices that occupy the majority of health care delivery in huge swaths of the United States. Toss in a cup of non-generalizability along with a generous dash of hubris and their vision sure tastes great but is filling... Not. There is no way Old-World capitation will work in the mainstream of typical office settings because it’s not fundamentally linked to the flowering of “systems” of care so beloved by the editorialists. Oh, and by the way, many independent physicians don’t think capitation is merely a “dirty word,” they loathe it as the Anti-Christ of Healthcare.

The disease management blog’s more seasoned - and humble - examination pointed out that a new and improved version of partial capitation – in addition to traditional fee for service – could be channeled into explicit chronic illness-linked, modern, risk-adjusted variants of population based chronic care that builds on patient registries, non-physician teaming, patient coaching and self care. This has less to do with “capitation” and much more to do with creating targeted cash flows that fund the Medical Home and/or disease management and preferably both.

Old capitation is Gaydolf-oid. Modern versions of population-based partial capitation Obama-oid. Which would you pick?

Drug Patents and "Pay-For-Delay"--Drug Industry Payoffs That Need To End

I call your attention to a recent op-ed by a member of the Federal Trade Commission, Jon Leibowitz, in the Washington Post.Commissioner Leibowitz writes about the growing practice of "colluding with competitors to keep lower-cost generic alternatives to prescription drugs off the market."The Hatch-Waxman Act made it easier for generic drugs to enter the market once a name brand drug's patent has

Healthways News

Hurricanes!

Earthquakes!

Meteors!

All of the above

In the uninformed admittedly amateurish opinion of the disease management blog (who does not own stock in any DM companies), the P/E ratio remains sizable .

Does that make it a better buy?

beautiful prose

"There continues to be no evidence of recurrent metastatic disease on images of the abdomen."

This means that I will continue to go for only one treatment a month, indefinitely.

As for the long run, who knows? As my oncologist said today, 16 years ago women with liver metastases were dead within a few months. Given that this is my third CT in remission (the first was in June and the next in November), he is, in his words, "amazingly optimistic."

We are travelling in uncharted waters, my oncologist and I (the drug combination I am on, herceptin and vinorelbine, is not even a recognized treatment yet in Ontario). Given the alternative, however, I am more than happy to keep paddling.

Health Insurance Industry "Racing to Defuse a Growing Furor Over Retroactive Policy Cancellations"

That was the lead line in a Wall Street Journal story on the recent health insurance policy rescission controversy. The controversy is over a health insurance company's right to cancel a health insurance policy when the insured made a misstatement on the original application.Some insurers have held they can cancel a policy even when the misstatement was not material. For example, forgetting a

Medical Home: Gaydolf's Capitation Ver. 2.0

The disease management blog enjoyed John Stewart's recent contrasting of Barack Obama's success to the ill-fated “1944 Presidential campaign of Gaydolf Titler.” It reminded me of the star-crossed predecessor of the Medical Home called…..

"Capitation."

What?

It's true. Capitation is the Gaydolf Titler of healthcare. As many readers of the disease management blog will recall, capitation is the per "caput" or per head fixed monthly payment for each patient that is assigned to a primary care provider. The capitation payment was designed to pay for all primary care services whether or not the patient was actually seen by the physician.

Capitation fees were generally calculated by setting the payment at roughly 130% of fee-for-service payments over the same period of time. Because coordination of care by primary care providers promised to reduce health care costs, the logic was that the additional 30% premium was worth it. It also compensated physicians for the additional work of coordinating care.

Classic capitation, like the failed Presidential campaign of Gaydolf Titler, turned out to be a disaster. Physicians ended up being decapitated by the trouble of reconciling the capitated amount of dollars against their patients' utilization patterns. They and their patients were victimized by poor risk-adjustment, inability to control utilization and non-existent data support. Gatekeeping became a repugnant hassle and there were egregious withholds and other perverse economic incentives that ultimately seemed to be all about withholding care.

Whatever you may think about the evils of capitation, think about the merits of that additional 30%. That was serious money for a doc if it involved hundreds if not thousands of patients.

During the Days of Widespread Capitation, where did that money go? The disease management blog suspects that some physicians may have used it to implement rudimentary systems of care designed to “manage” and “coordinate” their assigned patient population. In some clinics, the realization that not every problem required a face-to-face physician visit, supercharged by the economics of capitation, led to “systems” of care. Some limited nurse-based telephonic advice systems and case management arose along with attempts to get patients engage in self-care.

However, the reality is that in most primary care clinics, the docs kept the money. Lacking any meaningful increase in quality to show for it, the ugly side of capitation helped fuel the managed care backlash. While capitation still exists, it doesn’t include that premium. Gaydolf Titler conceded the campaign and the primary care physicians walked away.

Enter the Medical Home. Like Mr. Obama, its national campaign rhetoric has been astonishingly successful. It’s running on a health care “plank” of an additional percent per-patient payment over and beyond fee-for-service to reimburse for primary care-based coordination of care. Maybe we’ll get it right the second time around, since there is more accurate risk adjustment, better science on helping patients choose the right care at the right time, registries, upside gain sharing with pay-for-performance and better safeguards against withholding care.

What’s in a name? Everything. “Medical Home” sure sounds better. Hearken back to the days of Gaydolf and call it "son of" or "Capitation Ver. 2.0," however, and it’d probably have as much of a chance of being nominated as you-know-who.

(By the way, it could be argued that in that spell of time between capitation and the medical home, the disease management industry stepped in. They were more than willing to take that 30% and more and make it work.)

what i did on my winter vacation

I can't seem to string two sentences together today (believe me, I've been trying) so instead of a more substantive post, I will provide you with more photos of one of the world's most photogenic children.

These were taken in Sarasota, Florida, on the rare occasions when I remembered to bring my camera.

I need to figure out how to work the zoom on my little camera. Watching my little man paddle away in the kayak with Grandpa, really turned my insides to mush.

While Grandpa and Bubbie went for a little paddle (I went out, too, although I didn't do much paddling, just glided along while my father-in-law did all the work), D. and I played on the beach (just the over the hill from the bay where we went paddling):


D. asked me to lie down, so he could trace my shape in the sand. I was impressed that I had the agility to get up without blurring his work. I was less impressed with my shape in the sand which was distinctly, um, bottom heavy. The hour glass has been replaced with a pear, it seems.

D. especially loved the palm trees, which he insisted on calling "coco-palms" even though we explained that we were too far north for coconuts. He said the ones bearing fruit would be coconut trees and that these were called coco-palm trees.

The child has an uncanny ability to insist on his own version of reality, even when presented with irrefutable evidence to the contrary. If he decides that up is down (or that he was wide awake on the plane and the trip was just really, really short), it is often easier to just let it go then to try and convince him otherwise.

We also went to the circus, saw some alligators (I took pictures but the 'gators look like logs. See above re the zoom) and tasted alligator stew, saw many beautiful birds (although not as many as last year), went to the aquarium and spent lots of time on, in and near the water. Two of my nieces (both really nice people - one is almost 12 and the other will turn 10 this year) were there for part of the time and my father-in-law and his wife are both warm, funny, generous people.

I really lucked out with my spouse's family (so much so that they were a part of my 41 things about T.).

Speaking of my spouse, I think he was a little chagrined with the beautiful weather we had. It was one thing to say, "It's OK, honey, you go to Florida without me. I really need to stay and work," when he thought the weather would be cool and perhaps even rainy. However, it turned out to unseasonably hot and gorgeous every day.

He and my older son S. had a pretty good time, though. They rented a wii, played games with friends on the big screen in T.'s office, went skating on the canal and watched lots of movies. They probably sat around eating junk food in their underwear, too.

As for little D. and I, it was wonderful to be able to spend so much time together. He is growing up so quickly. I don't really have the words to explain how cool it is to watch him grow and learn, hear his observations on the world (absolutely nothing gets by him, even when you think he's not listening). He is one sharp kid.

One night when I was getting him ready for bed, he said, "Mama, I love you as much as all the days." He has said this before.

"I love you as much as all the lives of everyone in the world. That's forever."

And then came the kicker.

"I love you even when I'm mad at you."

Give Cuomo and the Physicians What They Say They Want--Show the Patient Just What the Doc Is Accepting From Everyone Else

New York Attorney General Andrew Cuomo says that health plans are using the "Prevailing Healthcare Charges System" to "defraud" consumers and "manipulate" the system.He points to the example of an insurer refusing to pay a physician's $200 bill--the insurer said that $77 was more appropriate.In an earlier post, I pointed out that an examination of my own family's health insurance "explanation of

How Profitable is Medicare Advantage? The United/Humana Deal in Las Vegas Says a Lot

UnitedHealth and Humana have announced that Humana will acquire UnitedHealth's Las Vegas Medicare Advantage business for $185 million.The transaction was important for United in order to get Justice Department approval of UnitedHealth's acquisition of Sierra Health Systems.That $185 million gets Humana only another 25,000 seniors--at a price of $7,400 a customer.

The "Bottom Line" on Disease Management

The disease management blog had the recent pleasure of listening to several managed care medical directors dissect the strengths and weaknesses of the phenom known as "disease management." Leave it to an astute colleague to cut through the clutter with an astute observation:

Say what you will, disease management owes much of its success to being:

• "Simple" (purchasers can easily grasp just what is being offered)

• "Making sense" (nudging health care consumers into good selections has eminent face validity, especially if nurses are involved)

• "Affordable" (comparatively speaking, the PMPM does not sticker shock)

• "Money saving" (the standard of "proof" is different in the health care market, quality has to lead to savings somewhere and see the next point.....)

• "Linked to performance guarantees" (that's real money and still very much the exception compared to the glacial pace of payment reform in the rest of the health care industry).

And who was so smart you ask? An actuary of course! Thank you Ian.

The Argument for Specialty Hospitals

The growth of specialty hospitals has always concerned me. Too often these niche players looked to be siphoning off the most profitable parts of the business leaving the big hospital to charge payers more for their less profitable services--creating higher prices overall.David Whelan recently called my attention to an article he just did at Forbes making a strong argument in favor of

happy and home

And exhausted.

We had such a wonderful time.

And it will only be winter for a few more weeks, right? Right?

The Democratic Race for President and Chronic Illness Care

The disease management care blog was trapped in airports over the weekend thanks to a vexing snow storm that snarled air traffic. The ubiquitous news monitors helped distract me from some of the misery thanks to slightly less miserable rebroadcasts of the recent Obama-Clinton debate.

So that readers of the disease management blog don’t need to subject themselves to the same drudgery, here is an efficiently recreated representative sample of what the candidates are a) saying and b) what we're hearing in this and other settings.

What they said:

Clinton: "This is a significant difference. You know, Senator Obama has said it's a philosophical difference. I think it's a substantive difference. He has a mandate for parents to be sure to ensure their children. I agree with that. I just know that if we don't go and require everyone to have health insurance, the health insurance industry will still game the system. Everyone of us with insurance will pay the hidden tax of approximately $900 a year to make up for the lack of insurance. And you know, in one of our earlier debates, John Edwards made a great point. It would be as though Social Security were voluntary. Medicare, one of the great accomplishments of President Johnson, was voluntary. I do not believe that is going to work. So it's not just a philosophical difference. You look at what will work and what will not work. If you do not have a plan that starts out attempting to achieve universal health care, you will be nibbled to death, and we will be back here with more and more people uninsured and rising costs."

Obama: Number one, understand that when Senator Clinton says a mandate, it's not a mandate on government to provide health insurance, it's a mandate on individuals to purchase it. And Senator Clinton is right; we have to find out what works. Now, Massachusetts has a mandate right now. They have exempted 20 percent of the uninsured because they have concluded that that 20 percent can't afford it. In some cases, there are people who are paying fines and still can't afford it, so now they're worse off than they were. They don't have health insurance and they're paying a fine. In order for you to force people to get health insurance, you've got to have a very harsh penalty, and Senator Clinton has said that we won't go after their wages. Now, this is a substantive difference. But understand that both of us seek to get universal health care. I have a substantive difference with Senator Clinton on how to get there.

What I heard:

Clinton: Obama you ignorant upstart blah blah Blah blah blah blah Blah Blah BLAH blah blah Blah blah mandated coverage blah Blah blah blah blah Blah Blah BLAH blah blah Blah I’ll print money if that’s what it takes to cover the chronic condition management programs blah Blah blah blah blah Blah Blah BLAH blah blah Blah blah blah blah Blah blah blah blah Blah Blah BLAH blah blah Blah blah blah blah Blah blah blah blah.

Obama: Hillary you slanderous has-been blah Blah blah blah blah Blah Blah BLAH blah blah Blah blah blah blah Blah blah I’ll print money if that’s what it takes to cover the chronic condition management programs blah Blah blah blah blah Blah Blah BLAH blah blah Blah blah blah blah Blah blah blah blah Blah Blah BLAH blah blah Blah no mandated coverage blah blah.

The Disease Management Care Blog Book Club

Everyone's reading it!

Hillary Clinton Criticizes Barack Obama's Health Care Plan Saying It Would Not Cover Everyone--Is She Right?

This is a repost of an original that addresses Hillary Clinton's claim, repeated in this week's Texas debate, that only her health plan accomplishes universal coverage because it has a individual mandate and Barak Obama's does not. Senator Clinton goes so far as to say she would garnish wages to enforce her mandate that everyone buy health insurance.Hillary Clinton has gone on the attack in

Follow-up on Gadgets, t+ Medical & Disease Management

The disease management blog has commented on gadgets in three prior posts (found by scrolling down or click here). It's not just a matter of population-based health care i.e. consumer support i.e. self-management enabling i.e. patient empowerment programs providing the monitoring devices. We're seeing monitoring devices providing the disease management. Here's another recent example called "t+" that has come ashore, in Research Triangle Park no less. The U.S. based companies must be asking where could this eventually end up?

For more information, check this out.

The Brits don't seem to mind the term "disease management" either. They're not calling themselves "t+Medical Population Care Enhancement Outcomes Optimization Health Solutions."

Hail Britannia!

A "Health Care Fed" and Obama

An idea that has been floating around for some time is that a "Health Care Fed" needs to be created as a means to control health care costs.I first heard of the concept in a conversation I had with former Surgeon General C. Everett Koop a few years ago. Later, the idea showed up as a centerpiece in the National Coalition's plan to reform the health care system.And in both cases, I have supported

Pay for Performance (P4P) & Disease Management

In keeping with the season, the Disease Management Blog wanted to bracket this week with a famous bit of verse from the 4^th Chapter of Matthew:

The tempter came to him and said, "If you are the Son of God, tell these stones to become bread." Jesus answered, "It is written: 'Man does not live on bread alone, but on every word that comes from the mouth of God.”

At the time, most of the world was preoccupied getting enough to live on, not dying prematurely and securing as much power as possible. In dealing with these Three Great Temptations, this itinerant carpenter succinctly pointed out that mankind deserved better and that our greatest potential in every aspect of our day-to-day existence was built on something far greater.

Our effort to shape the delivery of health care is no different. I think the “bread alone” issue is what annoys many stakeholders about “pay for performance.” Patients wonder why physicians should be paid to “do the right thing,” while physicians distrust the use of pieces of silver to shape their profession. Both parties know "bread alone" falls short. As testimony to this, not too long ago I watched a respected colleague practically tear up a check at a Departmental meeting in disdainful disgust.

That’s why I was very interested in this telling videotape of Bob Margolis MD, the CEO of HealthCare Partners, discussing how P4P works in California. It’s about 40 minutes long and well worth watching. Kick back, get your lunch and enjoy.

It was not what you might expect. I thought Dr. Margolis was going to suggest that paying docs to do the right thing was bread enough. I was pleasantly surprised. Among his many excellent points is that paying docs to do the right this is all well and good, but more importantly:

• This is also a function of not paying for the wrong thing.

• The exercise in creating P4P generates measurement, which – independent of the bread - is a critical ingredient in the improvement of health care delivery.

• P4P draws stakeholders to the table and gets everyone to talk about quality.

• Because physician groups are large and many of the docs are salaried, they haven’t necessarily seen any increase in pay for their performance. Rather, the pay is used to invest in systems of care that promote performance. Important distinction.

The key lesson is that P4P may deliver more dollars to the doctors (since I'm a doc, the the disease management blog supports the idea), but when it's done right, it can be a catalyst that brings out other more important positive forces. I'm not necessarily saying this is a key to heaven, but there is something to be said for appealing to dimensions of health care that have nothing to do with self-interest.

As an aside, I’ll point out that the lessons are important for the disease management industry, which should also strive to live by more than bread alone. I’ll leave the broader dimensions of this to another blog, but at a more discreet level, check out McKesson’s AccessPlus P4P (more like Pay for Participation) for Medicaid in Pennsylvania (special attention to page 8). Just like the potential of a combined Medical Home-Disease Management approach, there may be merit to a combined P4P-Disease Management approach. McKesson deserves a lot of credit.

Or how about a P4P plus Medical Home plus Disease Management approach? Anyone know of any examples?

Health Wonk Review Is UP

This week's review of the best health care blog posts is up over at Merrill Goozner's, "Gooznews.com." The former foreign correspondent, economics writer, investigative reporter for the Chicago Tribune, as well as teacher and researcher, always has interesting things to say on his blog.

Does Preventive Care Save Money? QALYs, New England Journal and what it means for population health

According to a very interesting article in the New England Journal of Medicine, candidates for U.S. President are naively assuming that increased health care quality will translate into bazillions of dollars of savings that will reduce health care costs and lead to lower health insurance premiums, longer healthier lives, increased productivity, economic expansion, diversion of resources to combat global warming, cleaner dirt, less heinousness and being excellent to each other. I share Bill and Ted’s style of optimism, so I was a more than a little disappointed in this whoa, wait-a-minute, not-so-fast reality check.

The Journal’s analysis was based on the obscure notion of QALYs. Like many readers of the disease management blog, I also struggle with the concept. So, I made obeisance at the altar of the great and powerful medical terminology and created my own cairn of explanation. If you can get past it, the disease management blog offers some additional thoughts on what this means for the field of population-based health care.

“Quality Adjusted Life Years” are abbreviated as “QALYs.” If you are in perfect health for one year, congratulations, you are the owner of one QALY. You are well on your way to achieving that Holy Grail of Long Life as defined by health services researchers: 100 QALYs.

Suppose, however, that your health is less than perfect for one year. Under the QALY system, the value of that decreased quality can be mathematically described as a fraction of one QALY. This makes sense: being disabled for a year is less valuable than being in good health for a year. Defining that fraction can be arbitrary but lower the health status, the lower the QALY.

This coin of the realm is usually calculated in terms of trade-offs: if you lived longer (more years) but at decreased health (disability), how many extra years would it take to equal the value of one year of perfect health? For example, if you became blind in exchange for living longer, how much longer life would you demand in exchange? It may be that it would require another ½ year. So, 1.5 years of being blind is just as “valuable” as 1 year of perfect health. The inverse (mathematically expressed as a reciprocal) may put it into better perspective (pun intended): being blind but in otherwise good health for a year is worth 1/1.5 or .66 QALYs. Being blind shaves off 1/3 of the quality of life.

As I understand it, QALYs are determined by conducting surveys and asking people to hypothetically “trade” longevity in exchange for decreased quality. It can appear silly, but the good thing about QALYs is that this system levels the playing field and allows researchers to compare and contrast the benefit of different treatments for different illnesses. For example, which results in more QALYs for men age 70?: prostate surgery for treatment of prostate cancer or performing bypass surgery for angina?

You can also toss in the cost. Returning to the blindness example above, if there were a treatment that could avoid the blindness that cost $100, that would work out to $100/.33 QALYs or $300 per additional QALY. It can be far more complicated than that (you have to carry the math out over a person’s life expectancy and factor in the cost of inflation for example) but hopefully you get the point.

Note that the calculation of QALYs implies that greater quality comes at a price. It is possible to have an intervention that simultaneously reduces cost and improves health. For example, flu shots decrease costs and improve health, so the QALY calculation breaks down. It’s “less” than $0 per QALY

Check out this example from JAMA from back in 2000. Eye screening for persons with diabetes resulted in 3 to 21 days (a fraction of a year) of sight. When calculated on a per QALY basis, the amount of money spent was calculated to range from just of $40,000 per additional QALY to over $200,000.

If may interest you to know that the cost of hemodialysis is about $50,000 per QALY gained. That has become a benchmark. If an intervention costs more than $50,000, that could be considered “expensive.” For an excellent discussion of the conundrum around this, check out this commentary.

According to the party poopers in the New England Journal of Medicine, if one uses dollars per QALY to scrutinize the candidates’ rhetoric, “the vast majority” of medical interventions generally regarded as quality translate into more dollars of cost for every QALY gained. This includes screening for diabetes and high blood pressure

What does this mean?

Unfortunately, it is too easy to just read the headline and conclude “prevention doesn’t work.” Trying to overcome that by putting the authors use of $/QALYs into perspective doesn’t really overcome the damage. That being said, here are some points that I think should be kept in mind:

• $/QALY are not used by patients and their doctors in the real world of clinical practice, so using $/QALY to assess their decision making doesn’t add a lot of insight. In other words, researchers should use whatever metric is being used by patients in their decision making.
  

• Ditto insurers. They live by the medical loss ratio and actuarial trend.

• QALY models are subject to lots of assumptions, especially at the lower ends of the QALY scale. If a person moves from one level of burden from a chronic illness to another level, QALY’s may not adequately portray the trade off. It’s less useful in chronic illness.

• Societal decision-making on the value of medical interventions is based on far more inputs than QALYs For example, breast cancer screening for all women age 40-80 years can cost $58,000/QALY. We still think it’s a bargain. The calculus is far more sublime.

• The $ numerator is often standardized without accounting for the cost efficiencies that are possible through disease management programs that promote self-care or alternative levels of care (for example, nurses).

• The QALY denominator fails to take into account the added quality from having a greater sense of control over disease as well real value that patients place on their relationships/community with the healthcare team.

The Usual and Customary Controversy--Who's Cheating Whom?

New York AG Andrew Cuomo recently announced an investigation into how insurers pay for out-of-network services. He charged that consumers were being "defrauded" by insurers who were "manipulating reimbursement rates."Cuomo used the example of a charge for an office visit of $200 that the insurer cut back to $77--the insurer claimed the lower amount was reasonable and the maximum that should be

The GAO, Physician Group Practice (PGP) Demo Summary and Implications for the Chronic Care Model

The Government Accountability Office issued a report on another “demo” titled the “Physician Group Practice” (PGP). While news that only 2 of the 10 participating organizations were successful is old, the report makes for an interesting read for those of us interested in “disease management.” Much thanks to my colleagues in the Pennsylvania Chapter of the ACP for forwarding this.

First a summary and then the disease management blog will weigh in:

A summary:

The demo tested “Pay for Performance” among 10 large (at least 200 docs) physician groups. The “performance” used by these groups had everything to do with the approaches used in classic disease management. It included patient education, post-discharge programs, medication reviews, case management, interactive voice response and care coordination. Most of the groups also had an electronic health record.

The “pay” was used to either 1) develop or 2) expand preexisting in-house DM programs. The number of programs per physician group ranged 2 to 9. The pay was also a “gamble”: the groups had to front much of the money in hope of qualifying for the payment bonus at a later date

In order to get the pay, the 10 organizations had to perform by 1) reducing overall spending among its assigned Medicare beneficiaries by more than 2% (making this a gainshare) and 2) achieve improvements in 10 NCQA-pedigreed diabetes clinical process measures. The comparator was a group of Medicare beneficiaries that were retrospectively assigned.

Most of the groups achieved most of the diabetes improvements in the first year, but the only ones that got a gainshare were the Marshfield Clinic and the University of Michigan Faculty Group Practice (calculated at $4.6 M and $2.8M, respectively). One other unnamed group achieved 2% savings but didn’t exceed it (sucks to be you). Marshfield and Michigan also seemed to benefit by being measured against comparator beneficiaries that experienced very high Medicare spending.

Marshfield had only two programs: 1. telephony for heart failure and 2. anticoagulation management. The University of Michigan also had only two programs. They were monitoring and self-care education by care managers for 1. frail patients with many co-morbidities and 2. those with a recent inpatient stay.

In contrast, the average number of clinical programs for all of the physician groups was between 4 and 5 (Billings Clinic led the way with 9 of them) with total program costs among the participants that ranged from just over $400,000 to as high as $2.9 million. Interestingly Michigan had the lowest total program costs and Marshfield had the highest costs.

In their report, GAO noted the approach was “reasonable” but disappointing. It urged caution in interpreting the data because they are from the 1^st of a 3 year process. In addition, only one participant had all of its programs up and running for the first 12 months of the demo.

To make matters worse, there were delays in getting claims data from CMS back to the physician groups. It was also hard for the physician groups to interpret the data dumps once they arrived. As a result, the participants were “flying blind” without the kind of feedback necessary to “tweak” their programs. GAO has recommended this be fixed, which may make a difference in the future.

The Disease Management Care Blog weighs in:

Even the GAO noted that large physician groups account for less than 1% of all physician care in the U.S., making the lessons learned here practically inapplicable to the other 99% of health care delivery in the U. S.. Smaller physician groups will never be able to implement any of the approaches used in the PGP demo because they don’t have access to the necessary capital, have yet to implement an EHR and have little experience with P4P programs. Last but not least, if large physician organizations are as efficient as they say they are, the outcomes to date gives them every incentive to avoid such schemes. Based on the results from this demo, they can expect to spend more than they gainshare in the first fiscal year.

And now for something completely different:

1) Given the random distribution of claims expense, the disease management blog wonders if the data spread in the above graph has nothing to do with the interventions hatched by the participants. I can’t see any correlation between the intensity of the interventions, the money invested and the savings that were achieved. Toss a bunch of numbers in the air and some will come back lower or higher. Based on the report, Michigan and Marshfield may have been lucky, not smart.

2) One reason for the lack of performance could be because large physician groups are fundamentally postured to seize every dollar of revenue in a FFS environment. One fat DRG beats 5 well-intentioned case managers.

3) This wasn’t disease management. It appears to me that the best interpretation is that these physician groups used programs that met the definition of the Chronic Care Model. Just like the COACH heart failure study, the programs for each of these groups were under the leadership of and had proximity to physicians, used patient self management support interventions, used computerized clinical data bases/registries/EHR, relied on teaming, used clinical guidelines and had supportive reimbursement. I am very confident that if we had asked, the leaders at each of the participating physician group practices would have denied that their interventions were "disease management," and that what they were offering was distinctly different.

Let’s hope future outcomes in this demo show that CCM is not a bust. Or is inconsistent with other negative disappointing literature on the lack of cost savings in CCM.

Bush Administration Now Willing to Increase SCHIP Spending by $19 Billion Only Weeks After Vetoing a Bipartisan Compromise

At a February 7th Senate Finance Committee hearing, HHS Secretary Leavitt testified about the 2009 Bush budget request.This time, the Bush Administration is asking for $19.3 billion more for SCHIP over the next five years.Just a few weeks ago, President Bush vetoed the $35 billion bipartisan SCHIP extension yet again. Bush and Leavitt maintained all of last year that the program should be

Lifetime Health Care Costs For the Obese and Smokers Lower Because They're Dead Sooner

This was the impressive conclusion of a study published by the Public Library of Science Medicine. The study was sponsored by the Dutch Ministry of Health Welfare and Sport.Obese people had the highest health care costs between the ages of 20 and 56. Obese folks and smokers were found to have a higher rate of heart disease than others.However, the authors found that the obese and those who smoke

Disease Management and Medical Home Collaboration? It's Possible.

My colleagues, Vince Kuraitis and Tom Wilson, make some clever points about the Vendorites and the Wagnerites. Check out their wisdom when you have a chance. I managed to uncover one example of collaboration between the two camps and would appreciate if anyone knows of others.

Call it a fairytale, but I remain hopeful……

It befell in the days of King Marcus of Welby that great happyness and cheer prevailed across the land. Treasurys of physicians were of prodigious cash flows, and moneys were overflowing. The citizenry’s health was devoid of great outcomery. Young men pondered Annette Funicello in their hearts. All was well.

With the passing of the great King Marcus, great darkness descended upon the populations. Usual and customary fees yielded to relative unit basery and proceduraciousness. Many physicians gnashed their teeth and donned ashes and rent their white coats. Treasuries were pillaged by Vendorites, while Wagnerites forged battle axes and war was made betwixt them. There was great jousting and smoting and crossing of swords. Princes of the Kingdom became fixeated on performance enhancing substances among the Saints. The people were addled by dancing with Stars. Young men dwelt upon Pamela Anderson in their hearts. All was of great consternation.

After many years of unhappyness, truce and pleasantness was attained by the Vendorites and the Wagnerites. Great contentment emerged. The people gazed upon PBS. The Princes sought comparative effectiveness. Young men marveled greatly upon Angelina Jolie. All became righteous and peace reigned among the people.

Moses, Linearity & Singularity: Here It Comes!

Given the season, this is a good time to consider this Bible passage from the 34th Chapter of Deuteronomy:


“Then Moses climbed Mount Nebo from the plains of Moab to the top of Pisgah, across from Jericho. There the LORD showed him the whole land……Then the LORD said to him, "This is the land I promised on oath to Abraham, Isaac and Jacob when I said, 'I will give it to your descendants.' I have let you see it with your eyes, but you will not cross over into it."

It’s telling because it portrays a critically important insight about human existence. At that time, most of humankind lived and thought “circular.” It fit nicely with the eternal cycling of the seasons and the motion of the stars. If Simba needed knowledge, it could be found by looking to the past; if an answer couldn’t be found, the right question wasn’t being asked. The upstart Jews adopted a radically novel point of view: they discovered human existence was linear and, what’s more, led to a richer future that mattered a great deal – if not to us, then to our descendants. This is one of the greatest intellectual achievements in history and it is still with us today. Some would argue it must have been a divine gift.


Fast forward to the present day portrayed by a “Blue Man Group” concert. If you have a chance, this PVC-pipe percussionist spectacle is well worth the price of admission. However, I was drawn to its portrayal of a virtual “post-biologic” hyper-tech world that was not only humorous but starkly linear. The Blue Men reminded the audience that we are still very preoccupied with the future.

In fact, our race to reach it may soon result in what futurists have described as “singularity.” Increases in processing speed, access to huge stores of information, rates of new discoveries in energy, transportation, education and yes, health care, will have profound implications for our sense of self, roles, social status, interests and occupations. When the doubling cycle for the rate of change shortens to zero, change will become infinitely rapid and permanent. It is possible that that point could occur sometime in the next ten years.

What does this have to do with disease management? Well, my blog, so I can still post whatever comments I want. But seriously, the disease management sector in health care is not immune and could help lead the way. The field is getting wider, encompassing more conditions, as well as deeper, using new approaches to identifying populations, quantifying their risk, incenting change and deploying interventions. As change accelerates, it will become even more difficult to run clinical trials: results will be antiquated by the time the trials are completed. In fact, print journals themselves will become obsolete (and blogs will become more important). Consider the possibilities that traditional face-to-face provider visits will become virtual and old fashioned telephony much richer. In fact, access to organized information has huge implications for the role of a physician, which is largely dependent on unequal access to medical knowledge. I don’t profess to know just where disease management will fit in the future, but it seems the possibilities are infinite.

Scary stuff. Those Jews must have felt the same way about their Promised Land.

Later this week, I'll touch on another Bible passage.

Mom, Dad, the Kids and Medicare––Would an Obama Presidency Energize Young Adults to Demand Entitlement Reform?

Barack Obama has made this election-year different. Not since the 1960s have young voters been so energized. One college town after another has voted big for him.On entitlement issues like Social Security and Medicare, the political debate has always been dominated by what senior voters want. They have been the big and effective voter block that have managed to insulate these programs from any

to warmer climes

I took this picture of the front of my house yesterday morning. We have had another dump of snow since.

The shot below, of my 55lb dog sitting on my front walk, gives you an idea of the height of the snowbanks.

It's -21 Celsius (-6 Fahrenheit) today with the windchill. In other words, it's bloody cold.

I am off to Florida with my four year old tomorrow. We need to leave for the airport at 4:30am.

We are flying via Cleveland and it will take us forever to get there.

I don't care. It's going up to 24 Celsius (75 Fahrenheit) in Sarasota tomorrow. By this time tomorrow, I will hopefully have dipped my toes in the ocean.

And the only white powdery stuff around will be the sand on the beach.

I'll be back online on February 25th.

I also have a short post up at Mommybloggers.

Haley Barbour or Hillary Clinton?

Here's a test.Who just proposed the following, Hillary Clinton or Haley Barbour:A government authorized health insurance purchasing exchange program for the purpose of marketing health insuranceRun as a not-for-profit clearing house from which consumers could purchase health insuranceTarget the uninsuredAvailable to workers in small businessesDesigned to reduce the overhead costs of small group

bloodbath (not for the squeamish)

I had a CT scan yesterday.

Since my life as a cancer patient began, I have had many, many tests and medical appointments. And I have had my share of bizarre experiences.

But yesterday I experienced something new.

I was very pleased that the nurse managed to get the IV needle into a vein on the first try (I had been really dreading that part, after the trauma of last time), albeit in the side of my wrist, right by the bone.

I barely had time to register my relief, though, before I felt a warm liquid on my hand and looked over to see a jet of blood spurting from my wrist onto my hand and the floor.

"I dropped the locking clip!" exclaimed the nurse. "Could you grab me a new one, please?"

What followed was more spurting and a great deal of confused fumbling. The nurse kept thanking the co-worker who was ineptly trying to help (it was only later, when I was told that he was a doctor that I understood that the man probably didn't have the remotest idea what a locking clip was, where to find one or what to do with it when he did).

Eventually (it felt like a long time but was likely only a minute or two. A lot of blood can spurt out of a vein in a very short period of time), the locking clip (which is really a stopper-thingie) was popped on, the nurse cleaned me up and mopped up the floor, all the while apologizing profusely.

"Sorry for the blood-letting," she said.

The rest of the test proceeded pretty uneventfully.

I'll have the results on the 27th. I have no reason to expect anything but good news (the last two CT scans in June and November showed no sign of cancer at all) but I will hate the waiting, anyway.

The test was very early yesterday morning. My spouse was still home when I returned.

"You're a little pale," he said.

Go figure.

Just what IS a "Demo" you ask? Read on......

Health Dialog landed a demo!

This announcement made the Disease Management Blog ask just what is the species known as a Medicare/Medicaid “demonstration?” With the aid of some buddies, I was able to take a guided bus tour of the topic around the web. I’ve learned to think of them as “field tests” that typically involve a waiver of existing CMS regulations that assess whether a change will lead to better efficiency or quality. Referred to as “demos” for short, they can be approved by Congress (usually as a part of a legislative package) or initiated by CMS under a provision in the law that gives the Secretary of HHS “demonstration authority.” Even if a demo is approved, however, funding is by no means guaranteed. Those bucks may have to come via Congress through a separate bill. Funding may also come out of other existing pots of money, but they often need approval by other entities such as the Office of Management and Budget. (As an aside, the disease management blog wonders if this could account for some of the radio silence on the Medical Home Demo, but I digress)

Then it’s up to CMS to author the specific language that actually kicks off the demo. This language includes the request for proposals (RFP), which are published in the Federal Register. It takes full-time insiders to anticipate coming demos or read the Register. Either that or a prescription for Ritalin. Not all demos are necessarily awarded through a public bidding process. They can be awarded to a specific entity (a favorite approach is earmarks) or written so narrowly that any competition is nil.

Companies pursue RFPs for several reasons, including the chance to prove to CMS that a waiver should be made permanent or their product or service deserves to be permanently covered by Medicare. It can also lead to other demos, especially if the previous track record is good. It can also generate some important PR, such as the attention of the Disease Management Care Blog. Companies also gain considerable experience in delivering their product or service. While the economic payoff in the short term may not be that great, if CMS ultimately decides to include the product or service as a permanent part of the Medicare benefit, the payoff can be huge.

With some trepidation, the Disease Management Blog donned his trusty dive suit and entered the CMS demo web site. It found a ten page list of 52 demos (5 are closed). More details on the Health Dialog announcement can be found here. It looks like this will be a three arm randomized trial where beneficiaries will be assigned to either 1) a health risk assessment (HRA) questionnaire plus generic healthy life style advice, 2) an HRA plus advice tailored to the HRA or 3) an HRA plus intensive counseling. Participants will also be linked to other community based health promotion programs.

It appears Health Dialog was not only awardee. The others are Focused Health Solutions, HealthPartners, Pfizer Health Solutions and StayWell Health Management. It begins in April of 2008, and will end in September of 2011.

Employers Finally Figuring Out They Can Shift Retiree Costs to Medicare

Employers are finally showing signs that they have figured out they can take advantage of the generous Medicare payments to Medicare Advantage plans.With Medicare Advantage plans paid 13% more than for the same beneficiary under traditional Medicare, many seniors have figured out the benefits are better in the private plans. Private Fee-For-Service (PFFS) plans even get more than that.What is

News on Medicare Health Support and Healthways

Check out the press release about a letter to CMS.

The disease management blog is a big fan of Grammy winning Amy Winehouse. While his dream is to someday serve in background vocals, for now he'll have to settle for drawing inspiration from her lyrics. With apologies to Ms. Winehouse and her song "Rehab"........

They’re trying to kill off Health Support
N’ it’s bad luck luck luck
Yes, results r’ bad, n’ industry says egads
That’s a lot of bucks, bucks bucks.

We got press releases
And lots of letters sayin’ please
Weems’ stomping all over Health Support
Want benes t’say no no no.

Feds coulda done a better job
We feels we been robbbbedddd.
Slow data sharing n’ flawed method’s was done
Hoping Congress passes legislationnnn

We don’t know a lot of stats
But we know Congress has its own math

They’re trying to kill off Med’Care Health Support
Say hell no no no
More to tell, but term’s confidential
Ouch! A lot of dough, dough dough

Commentary on Heart Failure & the Medical Home, plus News about Healthways and the Merits of Carve-In-Out-Outs

"Ruh roh," thought the Disease Management Blog, "another negative disease management program report." Grimly steeling himself, he traced down the reference. Its Jaarsma et al: Effect of moderate or intensive disease management program on outcome [sic] in patients with heart failure. Arch Intern Med 2008;168(3):316-324. The entire article is available for viewing (thanks, Archives!)

Over a thousand persons discharged from a hospital with chronic heart failure (HF) were randomly assigned to one of three groups: usual care, basic support (additional outpatient visits with a specialist nurse) or intensive support (visits plus weekly telephone calls, home visits, support from other non-physicians). About 50% were NYHA II and the other 50% were III or IV. During the 18 months of prospective follow-up, there was no statistically significant difference in death rates or hospitalizations across the three groups.

What should readers be aware of?

In the 3rd paragraph of their own published "Comment" about their data, the authors point out that there are two explanations for their negative study: either the intervention didn't work, or the comparison control group did much better than expected. The authors explicitly noted that the surprisingly good control group data "in particular may have an important role." Note that the all of the study subjects received intense coordination from cardiologists in Heart Failure Clinics. Adding a "disease management" program to that mix did little.

The Disease Management Blog also notes this study was conducted in The Netherlands. Issues of culture, access to care and the scope of the insurance benefit make generalizing these results to the U.S. doubtful. Just because it doesn't work across the pond doesn't mean it won't work here.

But, there are two other thoughts I'd like to offer, one methodological and the other about the true nature of the study.

There seemed to be lots of patients with NYHA Class IV disease in this study. Class IV is a sick group and many physicians will tell you that individuals with this burden of disease are extremely fragile and very prone not only to exacerbations of their heart failure but are highly vulnerable thanks to other co-morbidities. They are destined to be high cost no matter what is done. Accordingly, I doubt if usual disease management interventions directed at this segment of a heart failure population are able to garner much of a "return on investment" in mortality rates, hospitalizations, quality of life or claims expense. The same may be true at the other end of the spectrum of disease, where it is not unusual for patients with very mild heart failure to do well for years at a time. The types of interventions described in this article will only "bend the trend" in the mid-spectrum of disease. That's the point of my crudely constructed image.

While I wish I could take credit for this insight about the spectrum of disease, it belongs to Ed Wagner, thanks to his 2004 Annals article.

From a methodological standpoint, the authors were destined to have trouble demonstrating any impact from basic or intensive support because the patient population wasn't ideal: it included patients who were destined to do very well and patients who were destined to do very poorly in all three treatment arms.

Last but not least, who says this was "disease management?" While it meets the commonly held view of a "typical" disease management program, this was really a physician-owned program in a network of hospital-based specialist clinics using an approach much more akin to the Medical Home. Too bad the authors didn't substitute those two words in the title in lieu of "disease management." Now THAT would have been interesting and probably generated a lot more media attention.

And speaking of disease management, some additional bad news for Healthways. The disease management blog recalls the happier times described in this article in Managed Care Magazine. Nothing like an activist State Attorney General to rain on the parade of a state-of-the-art program, even if Minnesota Blue Cross Blue Shield had compelling data showing a beneficial impact on claims expense that was in excess of the high fees. No matter: the AG was on a search and destroy mission thanks to BCBS' other questionable uses of their enrollees' hard earned premium dollars.

Note that this health plan is considering bringing its disease management programs "in-house," not abandon them. They seem to still believe in the concept, and so do the health care analysts quoted in the bad news article linked above. As for going in-house, the disease management blog wishes them good luck. I believe that while there are some good reasons to do that, cost isn't one of them. The ultimate cost of well run "carve in" programs are not that different from the "carve outs." Instead, you get (or rather, the enrollees get) what you pay for.

Instead, I believe the real opportunities for savings in population care will turn out to be blended approaches that use the best of both "carve in and out." The well run disease management organizations are so good at what they do and are unmatched in their delivery of high value, industrial strength, telephonic-based patient engagement. For many patients with some conditions at some stages of disease, that may a perfect intervention.

On the other hand, health insurers may be better able to marshal the kind of local resources necessary for high touch care coordination and case management. For other patients (especially those outside of the Netherlands and without NYHA Class IV heart failure), that may be the perfect intervention. Even better, Health Plans could stand aside and carve this function out ("carve out and out") to the real "on-the-ground"experts in a network of Medical Homes.

The disease management blog suspects the "vendors" understand the potential of "carve out and outs" and are keenly interested in figuring out how meaningfully integrate their telephonic-based programs with the physician community's Medical Home approach. For more on pros and cons of that interesting vision, check out 1) what Vince Kuraitis has to say about the complimentary potential of Medical Homes and disease management and 2) what the DMAA has to say about it.

No One Ever Did Understand "Customary and Reasonable"

New York Attorney General Andrew Cuomo is suing Ingenix over its operation of the longtime "customary and reasonable" database.In the days before provider networks, insurers relied on this survey of insurance company claim data to determine an appropriate payment level. It was a survey of what all participating insurers paid by service in a particular market thereby ensuring that any one payer

reading deprived

I am still doing the Artist's Way.

Last week, I was supposed to do something called "reading deprivation."

I felt that it was asking way too much of myself to forego reading during a chemo week.

This week, I am taking a crack at it. I am allowed to answer emails, read to my son and read the comments on my blog (and, of course, to re-read my own writing).

I've been on starvation diets that are easier than this.

And cheated less.