Inconvenient Facts for Both Republicans and Democrats—Neither Side’s Health Care Proposals Are Supported By Past Performance

In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.

Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada, or Switzerland.”

The data would seem to indicate that even our single payer government-run American health care programs, Medicare and Medicaid, cost way more than similar health plans in these nations.

The argument is often made that we should adopt a single payer—or perhaps a “public option”—health plan in the United States in order to control costs and cover everyone. But it would appear that even those programs in America are way too expensive when compared to similar programs in other industrialized nations.

As for the Republican market-based approach, Klein also points out that those programs have been ineffective at cost control. House Republican Paul Ryan often cites the Medicare Part D drug benefit as proof his proposals to privatize Medicare would work better than what we have. But as Klein points out, Part D premiums have risen 57% since 2006 and the program is on track to see nearly 10% growth in annual costs over the next decade.

And, the existing private Medicare Advantage program “ended up costing about 120% of what Medicare costs.” That’s a new data point for me. However, I do know that Medicare Advantage insurers in recent years have been paid at least 13% more than traditional Medicare.

My takeaway from all of this is that neither side has the answer to bringing America’s health care costs under control.

Liberals think that a single payer, or at least a “public option,” is the best hope and point to Europe and Canada as proof of that. But, as a percentage of GDP, the cost of our already government run health care plans rivals many of those nations' entire government spending on health care.

Republicans argue we need to move entirely toward market-based solutions. But with two big market-based Medicare programs already operating, neither Part D nor Medicare Advantage has come close to demonstrating affordable cost growth.

But both Republicans and Democrats do have something in common—each is offering supposedly painless solutions. For the liberals, just put the government in charge and we will magically have affordable health care for everyone. For the conservatives, just put the market in charge and we will have a solution.

Painless solutions might be politically attractive, but the data indicates they will not get the job done.

Will the Affordable Care Act (ACA) Cause Employers to Drop Insurance? Why The McKinsey Report Is Credible

...and the battle continues!

By now readers may have heard about the McKinsey Quarterly Report "How US health care reform will affect employee benefits" that purports to show, as a result of the Affordable Care Act (ACA),that  a significant number of employers are going to abandon offering health insurance for their employees.

Knowing that readers may not have time to sign-up for an email address and password McKinsey "account" or read the 11 page report, the Disease Management Care Blog has summarized the highlights and the controversy below.  The bottom line, however, is that a respected consulting firm has punched a small hole in the side of the U.S.S. Administration Assumptions.

The DMCB presented at and listened in on a number of Washington DC health policy conferences during the Fall of 2010.  It specifically recalls a common refrain among the human resource experts and benefits consultant speakers: they wanted to continue offering employer-based insurance, they said, but they needed more time understanding what the ACA did and did not do. 

As a result, the DMCB suspects most employers in the earliest days of the ACA were inclined toward the status quo.  The DMCB also suspects that the nation's larger employers were not inclined to say anything publicly that might annoy the Administration and prompt Mr. Obama to introduce some of them to the political underside of Mr. Bus.

Now that employers have had a chance to mull over all of the ACA's provisions, a substantial minority have apparently decided that the upsides of dropping employer-based insurance outweigh the downsides.  Not only could "Medicare as we know it" change, but, based on these data, "if you like your insurance..." you won't be able to keep it. 

Now onto the report itself

Noting that the Affordable Care Act in 2014.....

1) guarantees individual coverage for all, arguably absolving employers of their duty to provide insurance,

2) requires employers to provide a comprehensive - and relatively more expensive - insurance benefit package,

3) provides income-indexed premium support as well as premium caps that will make it easier for workers to get coverage in the individual market and

4) fines employers only $2000 per employee that isn't insured,

....authors Shubham Singhal, Jeris Stueland and Drew Ungerman surveyed "more than 1300 employers across industries, geographies and sizes" using "proprietary" research and found:

• the $2000 penalty will cost less than offering health insurance

• "45% to 50%" of employers are seriously looking at insurance "alternatives" such as dropping out, going with a defined contribution model or limiting access to a minority of employees

• "30%" of employers will drop coverage.  This will enable them to offer higher wages

• employees will no longer prize their employer sponsored insurance, making it less of a retention tool.  85% of employees will not quit if their employer stops offering insurance.

The White House respectfully disagrees and has provided summaries with links to supportive no-impact-on-employer-insurance policy analyses. They are an employer survey by Mercer (released in November of 2010 - potentially when employers hadn't had a chance to fully digest the ACA) and two "economic simulation" models by the Urban Institute and Rand.

The Latest Health Wonk Review Is Up!

Wow.  If you want to be dunked up to your eyeballs in a pool of insightful, contrarian and unique bloggery dealing with every dimension of health policy, then click your way over to the latest edition of the Health Wonk Review, courtesy of the granddaddy of them all, The Health Care Blog.  This is one not to be missed!

The DMCB Is Now Optimized For Mobile Device Viewing

YOU: A harried health professional, perma-tethered to the 'net and inundated by an unceasing stream of emails, memos, reports and articles. Unwilling, unable and undisciplined to listen to your boss, coworkers, and spouse, you can't stop using precious minutes to check out the Disease Management Care Blog post.  You wish there was another way to access its unique content.

DMCB: A blog that understands the Internet-addled dilemma of its many-thousand of repeat readers, it's content is now optimized for on-screen mobile-device viewing.  Now you can read it while waiting for your mocha cappuccino, that boarding announcement and for the end of that interminable staff meeting. 

What CMS Administrator Dr. Berwick Didn't Say...

In a wide-ranging and brief Kaiser Health News interview, CMS Administrator Don Berwick is asked about Medicaid, ACOs, the Ryan Plan and cutting costs.  Regular readers of the Disease Management Care Blog can probably predict what Dr. Berwick had to say. 

The DMCB is more interested in what he didn't say.

Medicaid: While the "flexibility" and federal "help" are the rhetoric of the Obama Administration, there was nothing in Dr. Berwick's murmurings to suggest that there will be any substantially new approaches to a deeply troubled program that is not only blowing a huge hole in State budgets, but is a disservice to patients and doctors alike.  The reason it's called "CMS," is because Medicaid (the other "M" in CMMS) remains an orphaned afterthought.

Accountable Care Organizations:  Putting a brave face on things, Dr. Berwick ignored the huge push-back by providers on the ACO regulations, spinning the comments that have been received by CMS to date as "exciting," and "of help."  To the DMCB, it suggests that the Administration doesn't really intend back off from the onerous conditions of the current proposed rule and save this sinking ship.

Medicare's Unsustainable Costs: While Dr. Berwick unsurprisingly has little appetite for any changes in funding or benefit levels, his statement that "I go to work every morning with 100 million people in mind" and "I've got the back of the Medicare beneficiary" belies the real unsaid message underlying any notions of private-public, federal-state "partnerships": an astonishing faith in central command and control by Washington DC.

Recess appointment: The lack of any discussion on reversing the hostile Senate Republicans suggests he's given up on being confirmed by the Senate.

Quality Equals Cost Reductions? Not Sure? Welcome to the Club

It's so simple, right?

Does health care quality lead to reductions in health care costs?  If your answer is "don't know," the Disease Management Care Blog welcomes you to the club.  This brave article in Managed Care Magazine (where the DMCB serves on the Editorial Advisory Board) smartly tackles the issue and summarizes just how little we really know.

Among the DMCB insights:

The definition of "quality" among regulators and policymakers is surprisingly imprecise.  As a result, the notion can be used to advance any ideology.

There is no underestimating the huge "better quality reduces costs" gamble in the Obama Administration's Affordable Care Act.  How astonishing.

If high costs don't correlate with high quality, then why would any quality correlate with any costs?

Specific interventions that simultaneously improve quality and reduce costs do exist.  Examples include 1) fewer medical errors, 2) reduced hospital readmissions, 3) less 'unnecessary' (repeat) testing, 4) reduced (over) treatments and 5) administrative efficiencies.  The DMCB would add generics, flu shots and tobacco cessation. 

Any of the big savings from the specific interventions are translated into profits by providers or insurers.  The consumer never sees lower prices or insurance premiums.

The adage, quoted by CMS Administrators and high profile medical journal editors, that "30% of the system is waste" is based on an expert estimate that appeared in an obscure 2003 report.  There are no formal studies that have actually established this as fact.

Inconvenient Facts for Both Republicans and Democrats—Neither Side’s Health Care Proposals Are Supported By Past Performance

I call your attention to Ezra Klein’s column in the Washington Post this morning.In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on

What the iCloud Means to Population Health and Disease Management

Behold the cloud!

Intrigued by the spouse's enthusiastic embrace of her iPad, the Disease Management Care Blog has started paying better attention to the Apple company.  So when "iCloud" hit today's news cycle, the amateur informatician DMCB decided to take a closer look.

"Cloud" computing can be defined as the use of computer resources that are on a computer network (such as the World Wide Web) instead of those that are on the hard drive of that computer you are currently using.  So, instead of using "Word," or storing images or tunes on your "C" drive, the "cloud" enables you to use any network-enabled device to access a word processing program or store images on servers located anywhere on the globe.  So, for example, when the DMCB wants to edit a PowerPoint presentation while on the road next week in San Antonio using a friend's laptop, that will not only be possible, but it will also be able to sync it's calendar, upload a new blog post and make some tasty blueberry waffles.

Among health care services, readers may think this is simply an expansion of the on-line medical records phenomenon courtesy of companies such as Microsoft' "HealthVault."  The DMCB agrees but wonders if this cloud thingy takes things one step further:

Much more information is much more available real time.   Colleague Vince Kuraitis likes to refer to a rapidly evolving information technology "ecosystem."  The term may finally start to fit.  This goes beyond the notion of active patient engagement in reviewing, uploading and shepherding their personal health information (PHI).  To the DMCB, the "cloud" concept seems much bigger, with PHI consisting of interlocking evolving "clusters" of data from the patient, traditional providers, health insurers and     - good news - care management companies. 

The converse will also be true: information "monopolies" will wane.  Thanks to the favorable economics of and savings from storing petabytes of clinical data on the cloud (such as medical imaging), traditional health care providers will find it harder to deny access to their patients' data by patients and families as well as cooperating and competing health care providers. Persons with a need to know will find it easier to find that CAT scan from two years ago.  Whether traditional providers will gum things up with high data "viscosity" and overlawyered notions of patient privacy remains to be seen.

It won't be easy: Data integrity and privacy will face new challenges (for example) requiring significant system redundancy, distribution, back ups and yet-to-be-developed engineering and security systems.  The caution here is that we still have a way to go; between here and there will lie data breaches, network outages and critics - like the DMCB - who will wonder when patients will finally get to benefit from all of this.

A central role for care management programs?  In addition to the immediate need for a tailored Google-like search engine (that includes passwords) that can "pull" needed information on a particular patient from the "cloud," the DMCB wonders if care and disease management organizations are best positioned to help some patients access, use and organize multiple clouds of data.  These companies are heavily invested in IT, span the continuum of care across multiple providers and are closely aligned with patients anyway.  More on this in a future post.

The bottom line for disease management: this is good news for care management service organizations, who will be better able to both access and contribute to their patients' information.

Image from Wikipedia

The Cavalcade of Risk Has Been Up!

It's a late notification, but the DMCB was included in this very special 5th Anniversary Edition of the Cavalcade or Risk.  Russel Hutchinson does an excellent job of assembling the best of the "risk" related blog writings of the past few weeks.  Check it out.

ICD-10: Rough Seas Ahead

Have you heard of "ICD-10?"  In addition to the many requirements of the Affordable Care Act, this may turn out to be another big headache for insurers and providers.  According to CMS' web site, under the authority granted to it under the 2003 Health Insurance Portability and Accountability Act (HIPAA), if you want to do business with Medicare or any other health insurer...

"ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service, and inpatient claims with dates of discharge on and after October 1, 2013. Otherwise, your claims and other transactions may be rejected, and you will need to resubmit them with the ICD-10 codes. This could result in delays and may impact your reimbursements, so it is important to start now to prepare for the changeover to ICD-10 codes."

Which is why the DMCB paid attention to this "Report from the Field" Health Affairs article "Coding Complexity: US Health Care Gets Ready For The Coming Of ICD-10." 

The Disease Management Care Blog was reminded that "International Classification of Disease" or "ICD" is an alphanumeric billing system used to specify and describe diseases and treatments.  Originally developed in 1763, it was adopted by the World Health Organization in 1948 for use in public health reporting.  It was later used by physicians, hospitals and health insurers to specify diagnosis coding and payment levels.  For example, persons with "diabetes" may think they saw a doctor for that particular disease, but as far as their insurer goes, they were really seen for "250." 

As medical care has grown more complex, ICD has undergone periodic updates of its nomenclature, making each successive version more detailed. The ninth version (or "ICD-9") is currently in use in the United States, while most of the countries in Europe use "ICD-10."   In ICD-9, there are about 14,000 diagnosis billing codes; in ICD-10 there are 69,000.  ICD-9 has 3800 treatment procedure codes, while ICD-10 has 72,000.  As a result, if you are a health insurer, care management provider, public health advocate, government organization or a fan of Disease Management Care Blog interested in data and billing accuracy, you'd probably prefer ICD-10.

It turns out that if you're a doctor or hospital, you might hate it.

That's probably how providers are going to react on Oct 1, 2013 when the Feds start requiring ICD-10 instead of ICD-9.  That's because they'll have had to retrain the folks working in their billing offices and buy totally revamped software for a brand new coding system.  For a three physician practice, that could cost as much as $83,000. For a hospital, it'll cost millions.

As this unfolds there will be two things for DMCB readers to to watch out for:

1) Some providers are not going to be able to meet the deadline.  That means CMS and other commercial health insurers will have to decide whether to accept any ICD-9 bills and use their own information technology systems "remap" the codes into "ICD-10-speak."  If they don't, they may have to refuse payment, which could drive some physicians out of business.  There is even talk of providers and insurers setting up credit lines in case there are any disruptions in cash flow.

2) The switch from ICD-9 to 10 could lead to another round in the coding arms race.  Despite the coming advent of bundled payments, there will be plenty of fee-for service in the system. Insurers will be sorely tempted to use the greater claims detail to "downcode" anything that doesn't meet their guidelines, while providers might use ICD-10 to "upcode" and unbundle their services in attempts to shake more money from the insurers.

pirate day

The Real Reason Why Docs Like Care Management and the Medical Home

Handle it for me, will you?

Writing in the latest issue of the New England Journal, HHS Deputy Assistant Secretary for Health Dr. Anand Parekh argues that the physician road to winning patients' trust is lined with the adoption of behavioral medicine in day-to-day health care.  If done right, patients will feel "empowered, informed, motivated and involved."  He says there is good evidence that when physicians personally prescribe behavior change in the context of a trusting doctor-patient relationship, clinically and statistically significant shifts in patient behavior follows.  Interdisciplinary and team approaches can help physicians fulfill this.  What's more, the trend toward global and outcomes-based payments will accelerate it.  Then the skies will part, and the heavenly host will descend, singing to the glory of a new age of wonderful outcomes and widespread healing.

The Disease Management Care Blog appreciates the vision, but, unfortunately, it has little correlation with the reality of clinical practice, physician professional development or the true appeal of the current reforms that are underway in primary care.  The real purpose of the population-based care management and the Patient Centered Medical Home (PCMH) is to create systems of care which unburdens doctors from having to perform the work of patient counseling.

What accounts for this DMCB apostasy?   It has observed that most physicians go to medical school and endure years of post-graduate training because they want to be doctors and do stuff like diagnose, treat and cure. Most just don't have the interest, expertise or patience to handle the increasingly sophisticated and complicated science of behavior change.  That doesn't mean that they don't appreciate it.  Rather, they know there is ample evidence that non-physicians are just as able - with the right kind of physician back-up - to handle the "heavy lifting" of one-on-one patient counseling and behavior change.  And under global payment systems so admired by Dr. Parekh, physicians will use part of that revenue stream to finally do what Medicare has been unable to do: pay nurses and other non-physician professionals to do the right thing for beneficiaries.

Physicians should be responsible for making it happen, but that doesn't necessarily mean that they personally should do it.  That means handing it off and getting out of the way.

Doctors "Versus" Predictive Modeling To Identify Patents At Risk: It's Really Docs AND Predictive Modeling.

Who can find patients for a DM program

One of the major advances in disease and population-based programs for chronic illness has been the discovery that not all persons with a chronic condition will benefit from care management.  Instead of blanketing everyone with education programs, the "secret sauce" is targeting just those patients who have the twin attributes of:

1) being at high future risk of a bad outcome (such as an avoidable hospitalizations or multiple emergency room visits) and

2) having modifiable risk, which is ultimately a function of having the "right" disease severity, receptivity to engagement in self care and social supports which, in turn, respond to outreach.

In their American Journal of Managed Care article, "Identification of Patients Likely to Benefit from Care Management Programs," Tobias Freund et al use the terms "cost intensive" and "care sensitive" to describe the twin attributes above. They set out to examine how they compared in two candidate populations for disease management programs: 1) one that was chosen by a "predictive modeling" program that uses mathematical algorithms to weigh demographic and insurance claims inputs to compute future risk and 2) one that was made up of patients chosen by their physicians.

If this sounds like a TV Jeopardy contest between IBM's "Watson" versus human brainiacs, it shouldn't.  In this study, there was no "gold standard" that could be used to gauge whether computers or docs were better at picking the patients at risk.  Instead, the authors merely compared the two populations.

This study was conducted in Germany, using one of the public and private funded "sickness funds'" claims and demographic data that provided insurance to a population of 6026 patients that were being cared for in 10 southwestern primary care practices.  The predictive model was "Case Smart Suite Germany," which selected the top 90th percentile of patients at risk using data from 2007 and 2008,  while the primary care physicians were simply asked to screen "all" of the sickness fund patients from 2009 and "select up to 30" patients that may benefit from a program aimed at helping them stay out of the hospital.

What the DMCB found interesting about this study was that the predictive model identified 301 patients, while the docs identified 203.  Only 32 patients were selected by both.  The PCP patients were generally younger (mean age of 66 years vs. 75 years), had lower rates of prior hospitalizations in 2007 and 2008 (.53 vs. 2.74), had a lower degree of co-morbid illness (a Charlson Index of 2.1 vs. 4.3) and generally lower rates of chronic conditions like diabetes, COPD and depression (mean number of conditions was 3.0 vs. 4.5).  Last but not least, the physicians were better at picking the "care sensitive" patients that had been previously entered into a previously existing disease management.

The main lesson here?  It's not predictive modeling "versus" physician identification, or trying to decide whether to target a care program based on what your IT Department is saying "or" what the docs are saying, it's both.  The physicians, thanks to their "proximity" to their patients are using yet-to-be-identified heuristics to spot patients that predictive modeling may miss.  

While this study is limited by being outside the U.S. (making it less generalizable) and restricted to a relatively small population, the DMCB thinks the implications are intriguing enough to possibly warrant a repeat study here in the States.  In addition, the disease and population care management community can use this approach and eventually compare how each selected population responds on a prospective and outcomes basis.