Archive for category Healthcare Policy

Missed Opportunities to Control Future Healthcare Costs in the House Healthcare Reform Bill

Posted by Mark Brenzel in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 23rd, 2009

Missed Opportunities to Control Future Healthcare Costs in the House Healthcare Reform Bill

It is generally agreed that the recently passed House Reform Bill will cause healthcare costs to explode. Providing more people with insurance coverage and making certain services free to the patient (e.g. there will be no cost sharing for preventive services) will cause an explosion in demand. As the Massachusetts experiment has shown, the only restraint on the increase in demand will be the shortage of physicians, especially primary care physicians.

This is not to say that none of the provisions in the Bill address healthcare costs. It is worth reviewing some of these provisions.

Reducing Fraud and Abuse:

The Bill increases funding for fraud and abuse investigations. Congress learned in the 1990s after passage of the Kennedy-Kassenbaum Bill that there is potentially a lot of money to be recovered from misbehaving providers committing Medicare fraud. There have definitely been some egregious cases of fraud where providers have engaged in scams to get Medicare reimbursement for fictitious services. For the most part, however, this fraud is small dollar fraud relative to the size of the Medicare budget. The big recoveries have come from cases where the fraud was dubious at best and at worst were attacks on specific industries or companies. The actions against lab companies, home health agencies, dialysis companies, and Columbia/HCA in the 1990s and early 2000s come to mind. The accusations mostly involved different interpretations of various regulations between Medicare and the providers. In most of the cases, the government decided to go after providers for long established practices that were well known. This is not true fraud and speaks more to the complexity of Medicare’s regulations and the government’s incompetence than anything else. If the government goes after major recoveries based on “new” interpretations of what is acceptable practice, no cost reductions are being accomplished. Medicare will recover the funds, but the providers will have to seek other revenues to replace what is lost and cover the fines. As they have for 50 years, they will look to private insurers (if they are still around). This is cost shifting, not cost reduction.

Establishing Clinical Standards:

Perhaps the more interesting cost-control provision of the Bill establishes a Center for Comparative Research inside the Agency for Healthcare Research and Quality. The purpose of this new Center is “to identify the manner in which diseases, disorders, and other health conditions can most effectively and appropriately be prevented, diagnosed, treated and managed clinically” i.e. this Center will be establishing new clinical standards. For opponents of the Bill, this Center is the dreaded “Death Panel”. They fear that the Center and its related Commission inevitably would establish standards that limit care for cost reasons. However, to avoid this criticism, the following language was added to the Bill:

“Nothing in this section shall be construed to permit the Center or Commission to mandate coverage, reimbursement or other policies for public or private payers.”

“Nothing in this section shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine.”

The Bill’s opponents can decide whether these latter two provisions provide enough security from the federal government meddling in people’s healthcare decisions. From my perspective, it is simply a missed opportunity for the government to initiate some meaningful reform. The lack of consistently applied and dynamic clinical standards is perhaps the greatest weaknesses of the healthcare system today. No other industry operates in such a manner. This lack of standards makes it impossible for insurers to adequately describe what they cover (or do not cover) and for patients to understand what they should expect from their providers. This vacuum leaves the door wide open for attorneys to sue providers and insurers for their decisions when their client did not get the desired outcome. Without standards, there is always an “expert” available to say that the care could have been better. The lack of standards also allows many medical device and pharmaceutical companies to market inferior, more expensive, and sometimes even ineffective therapies in partnership with bought off medical researchers.

While undertaking comprehensive healthcare reform, the government has a real opportunity to bring some discipline to the provision of medical services. The physician’s decision to order tests or treatments is always an exercise in probability. The current system that exposes doctors to severe malpractice risks and financially protects patients from the cost of their care leads physicians to order tests and treatments that have a low probability of providing useful information or getting effective results. Clinical standards that are developed after consideration of clinical probabilities and costs of various treatment alternatives could be very helpful to physicians. While physicians have been generally resistant to these efforts, I believe their concerns can be addressed. If the standards are tied into protection from baseless malpractice suits, physicians will be more open to the idea. The process for setting standards would have to be dynamic so that they change as new technology and information become available. They would also have to clearly indicate where physician judgment is necessary. Most importantly, insurance companies should be allowed to make coverage decisions based on these standards. Their decisions could be reviewed by an outside panel where there is disagreement. Because the standards would be based on an evaluation of probabilities, patients should always be allowed to pay for tests and treatments that are not within the standards. Research companies could also pay for “non-covered” services for their purposes.

It is absurd to think that when the government gets to the point that it is paying 60 to 70% (whether this is appropriate is another discussion) of the nation’s healthcare bill that it should not make decisions about the value of what is being purchased. It is the same discretion that any intelligent person exercises when a significant purchase is being considered. Unfortunately, the House Bill is setting up the scenario where the government will eventually pay a large percentage of the nation’s healthcare bill and have to forego a valuable tool to manage its expenditures. It is a missed opportunity.

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The Patient Protection and Affordable Care Act

Posted by Editor in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 19th, 2009

pdf        The Patient Protection and Affordable Care Act

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Intended consequence of the recently passed House Bill

Posted by Mark Brenzel in For Consumers, Healthcare Policy, Healthcare Reform on November 16th, 2009

Over the past month, the leadership in the House had to accept one significant change to their concept of healthcare reform; the public option will now have to act more like a private insurer at least in regards to how it will negotiate rates with providers. Instead of accessing the Medicare rates, the revised Bill calls for the government plan to pay the average of prevailing provider rates with private insurers (obviously the formerly confidential agreements between payers and providers will no longer be confidential at least as far as the government is concerned) .

At first glance, this would appear to be a significant and positive change for the future financial stability of hospitals. Under the old bill, the government plan would have had such an enormous advantage over private insurers in terms of what it paid providers in general and hospitals in particular that it was hard to see how the private insurers could survive. Their decline and eventual demise would have eventually reset provider rates across the country to Medicare rates, which do not cover the cost of operating hospitals by today’s standards.  Furthermore, the Health Choices Commissioner (HCC) was given power to restructure the payment methodology for providers that potentially could have caused even more havoc in the industry (the Bill still allows for experimentation with the Medicare payment methodology).

However, after reading the new House Bill that just got passed by the House, it appears there really is not much of a reprieve for providers if this Bill or something like it becomes law. The (HCC) was given even more powers to regulate the private insurance industry than the previous bill. These new powers in essence make all the private insurers de facto government run plans. The single most important new power is to approve annual premium increases. This gives the HCC the same power that the States have over their public utilities. There are several big differences however.  In my state, the Corporation Commission that has control over the public utilities rates is governed by an elected Board. They are not accountable to the State’s governor. The decisions of the Corporation Commission also do not significantly affect the State budget. As expensive as utilities can be, they do not make or break the State budget. By this bill, the HCC will be accountable only to the President and will have a powerful voice in how much the federal government pays for healthcare. The federal budget for this program will be significant and it will be very politically sensitive. 

The future HCC is going to face the inevitable squeeze of being between a rock and a hard place. As premiums continue to increase faster than inflation (as there are no cost reducing measures in this bill), the cost of the government provided affordability credits (subsidies to low income individuals and families to buy insurance) will rise as well. This will increase the pressure of the program on the government budget at a time when deficits are already projected to be high. One way to mitigate this budgetary pressure will be to fix the value of the affordability credits. If this is done however, the share of the premiums that lower income people will have to pay out of their own pocket will become unaffordable. This will be politically unacceptable. The other alternative will be to just tell the insurers that they cannot raise their rates as much as requested. This will be much more politically acceptable and reduce the pressure of the program on the government deficit.

By the time the above occurs, the insurers will also be restricted by the government’s target of maintaining at least an 85% medical loss ratio. As a result, they will not have the resources (or power) to implement tough new utilization standards that could help them reduce costs. They will not have any choice but to deny providers’ rate increase requests, the only cost they will be able to control (the government also dictates the benefit structure of each plan). Providers will not really have any alternative to accepting what the insurers offer because all the insurers will be forced to operate almost exactly alike. Providers could receive a double punch at this time. In recent years, providers have negotiated new rates with insurers to not only cover their increasing costs, but to also make up for the inadequate increases of Medicare and Medicaid. If the federal and state governments are limiting increases to providers through these programs at the same time, providers will feel enormous financial stress.

Eventually insurers and providers may again choose to experiment with capitation contracts (it is likely such a change would require government approval). Powerless insurers will want providers to take more risk for utilization and prices. Providers may prefer to take risk rather than accept pricing limits hoping that they can implement effective utilization and cost controls on their own. It seems that no matter what eventually occurs with healthcare reform, hospitals will have to become very innovative in lowering their costs.

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Hospital Value Index™ Quality Award Recipients Released

Posted by Editor in Data Advantage, Findings, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform, Value-Based Purchasing on November 2nd, 2009

Superior Quality Merit Award recognizes 75 hospitals nationwide

NASHVILLE, Tenn. ‐ Data Advantage, LLC announced today 75 hospitals receiving a Best in Value™: Superior Quality Merit Award from the 2009‐2010 Hospital Value Index™ the first and only national study on U.S. hospitals and the value of care they provide.

The 2009‐2010 Hospital Value Index™is an independent analysis of each hospital’s performance in the categories of: quality, affordability & efficiency and patient satisfaction. Out of the more than 4,500 hospitals that were analyzed, 75 received the Superior Quality Merit Award for achieving high marks in the quality category.

“This group of hospitals has a proven ability to deliver high quality care, a key element in providing overall value to their communities,” said Hal Andrews, CEO of Data Advantage. “Our study suggests that hospitals that achieve outstanding scores in the area of quality will be rewarded in the new world of Value‐Based Purchasing, so each of these hospitals is off to a good start.”

The quality category is analyzed using data from the Centers for Medicare and Medicaid Services (CMS) Core Measures, AHRQ Patient Safety Indicators, CMS 30‐day mortality scores and CMS reported hospital readmission rates. In order to receive the award, hospitals were first considered as Best in Value™ or in the top 25 percent of all hospitals in the study. The top 10 percent of this group were then ranked in the quality category in order to receive the Superior Quality Merit Award.

“The Hospital Value Index™ study found that all hospitals recognized as Best in Value™ improved their quality scores by an average of 8.14% since March 2009, while those that were not recognized as Best in Value™ saw a drop in quality by 1.1% during the same term,” said John Morrow, a founder of the Hospital Value Index™ study.

“Quality continues to improve in high value hospitals, and these Merit Award recipients are being recognized for their exceptional quality performance,” Morrow added.

In alphabetical order, the Superior Quality Merit Award recipients from the 2009‐2010 Hospital Value Index™study are:

  • Advocate Good Samaritan Hospital (Downers Grove, IL)
  • Alegent Health Immanuel Medical Center (Omaha, NE)
  • Alegent Health Lakeside Hospital (Omaha, NE)
  • Alegent Health Mercy Hospital (Council Bluffs, IA)
  • Alegent Health Midlands Hospital (Papillion, NE)
  • Arnot Ogden Medical Center (Elmira, NY)
  • Aurora Baycare Medical Center (Green Bay, WI)
  • Ball Memorial Hospital (Muncie, IN)
  • Baylor Medical Center at Irving (Irving, TX)
  • Berger Hospital (Circleville, OH)
  • Berkshire Medical Center (Pittsfield, MA)
  • Bon Secours-Memorial Regional Medical (Mechanicsville, VA)
  • Carolinas Medical Center‐University (Charlotte, NC)
  • Centra Health (Lynchburg, VA)
  • Clara Maass Medical Center (Belleville, NJ)
  • Cleveland Clinic Florida (Fort Lauderdale, FL)
  • Community Medical Center (Toms River, NJ)
  • Cullman Regional Medical Center (Cullman, AL)
  • Delray Medical Center (Delray Beach, FL)
  • Evanston Hospital (Evanston, IL)
  • Flowers Hospital (Dothan, AL)
  • Forsyth Memorial Hospital (Winston
  • Fort Madison Community Hospital (Fort Madison, IA)
  • Fremont Area Medical Center (Fremont, NE)
  • Gaston Memorial Hospital (Gastonia, NC)
  • Good Samaritan Hospital Medical Center (West Islip, NY)
  • Goshen General Hospital (Goshen, IN)
  • Hackensack University Medical Center (Hackensack, NJ)
  • Hackettstown Regional Medical Center (Hackettstown, NJ)
  • Harlingen Medical Center (Harlingen, TX)
  • Heartland Regional Medical Center (Saint Joseph, MO)
  • Holland Community Hospital (Holland, MI)
  • Holy Name Hospital (Teaneck, NJ)
  • Huntington Beach Hospital (Huntington Beach, CA)
  • Integris Mayes County Medical Center (Pryor, OK)
  • Jackson Purchase Medical Center (Mayfield, KY)
  • Kettering Medical Center (Dayton, OH)
  • Kettering Medical Center‐Sycamore (Miamisburg, OH)
  • Kingwood Medical Center (Kingwood, TX)
  • La Palma Intercommunity Hospital (La Palma, CA)
  • Main Line Hospital Bryn Mawr Campus (Bryn Mawr, PA)
  • Mariners Hospital (Tavernier, FL)
  • Meadowview Regional Medical Center (Maysville, KY)
  • Memorial Hospital Pembroke (Hollywood, FL)
  • Memorial Regional Hospital (Hollywood, FL)
  • Mercy Medical Center‐Dubuque (Dubuque, IA)
  • Mercy San Juan Medical Center (Carmichael, CA)
  • Minden Medical Center (Minden, LA)
  • Moberly Regional Medical Center (Moberly, MO)
  • Munson Medical Center (Traverse City, MI)
  • Newport Hospital (Newport, RI)
  • North Ottawa Community Hospital (Grand Haven, MI)
  • Oklahoma Heart Hospital (Oklahoma City, OK)
  • Owatonna Hospital (Owatonna, MN)
  • Parkway Medical Center (Decatur, AL)
  • Peninsula Medical Center (Burlingame, CA)
  • Presbyterian Hospital (Charlotte, NC)
  • Presbyterian Hospital Huntersville (Huntersville, NC)
  • Reid Hospital and Health Care Services (Richmond, IN)
  • Saint Joseph Hospital London (London, KY)
  • Saint Joseph Mercy Saline Hospital (Saline, MI)
  • St. Charles Hospital (Port Jefferson, NY)
  • St. Luke’s Regional Medical Center (Sioux City, IA)
  • St. Mary’s Health Center (Jefferson City, MO)
  • Summa Health System Barberton Hospital (Barberton, OH)
  • Sutter Roseville Medical Center (Roseville, CA)
  • Tawas St. Joseph Hospital (Tawas City, MI)
  • Texas Health Harris Methodist Hospital Cleburne (Cleburne, TX)
  • United Hospital Center (Clarksburg , WV)
  • Vassar Brothers Medical Center (Poughkeepsie, NY)
  • Venice Regional Medical Center (Venice, FL)
  • Walker Baptist Medical Center (Jasper, AL)
  • Walla Walla General Hospital (Walla Walla, WA)
  • West Anaheim Medical Center (Anaheim, CA)
  • Williamsport Hospital and Medical Center (Williamsport, PA)

For more information on the Voices of Value™and the Best in Value™hospitals, please visit www.HospitalValueIndex.com.

About Data Advantage, LLC

Data Advantage, LLC is a privately held healthcare information company that specializes in providing hospitals and other healthcare ‐related businesses with independent and objective business intelligence. The company has aggregated and compiled a warehouse of the most insightful information about healthcare utilization and maintains comprehensive benchmarks about the financial, operational and clinical performance of the U.S. hospital industry. For more information, visit www.data‐advantage.com or call 866‐996‐3282.

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Unintended Consequences Part IV

Posted by Editor in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 1st, 2009

Unintended Consequences Part IV

 

The powers of the new Healthcare Commissioner are enormous. So far, significant changes to the Medicare reimbursement system for providers have required Congressional action. If the House Bill is passed, the President will have enormous power to change how providers are reimbursed without asking Congress. The Commissioner can implement patient-centered medical homes and other care organizations, value based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers. This power is subject to enormous abuse, which would seem almost inevitable.

The government is experiencing serious annual deficits, has a large accumulated deficit, and is facing huge deficits in the years to come. If the House Bill passes with its robust public option, the federal government could control the reimbursement rates for up to 80% of all provider claims within 10 years. One projection shows that the total cost for hospital services in 2020 could reach 1.5 trillion dollars. The government could be responsible for paying 1.2 trillion of that amount. How tempting it will be to cut hospital reimbursement and the reimbursement of other providers to decrease the government’s deficit.

However, it is not just a matter of how much of a cut hospitals may have to bear but also by what methodology they will get paid. Some of the code words above such as value-based purchasing and bundling of services should be alarming to providers. It means the government can decide winners and losers. It would appear that the government could do this on a local basis, regional basis, or even national basis.

On the local or regional level, the government could request bids from providers to provide certain services. Obviously, the first objective would be to lower the prices for those services. Hopefully, the government would also consider quality in its selection. But that would beg the question of how to measure quality. Ultimately, you can bet that politics would come into play to determine the winners and losers. Unions would try to use their clout to ensure that unionized facilities get selected. Community groups would lobby for the hospitals located in or close to their communities. Big donors to the political party in power would expect their recommendations to be considered and so on. Will hospital and doctors groups have to take on significant lobbying costs just to stay in business?

The government could also determine winners and losers on a national scale. In the 80s, hospitals and freestanding companies opened up new SNFs, psychiatric facilities, rehab facilities, and LTACs. The terrific expansion of these sub-acute units and facilities was largely a response to Medicare’s implementation of the DRG system of reimbursement for acute care services. The DRG system incented hospital discharge planners to move patients out of acute status as soon as possible and into sub-acute status where more reimbursement could be received. Initially, there was no real clinical purpose served by moving patients to these units. Many companies and hospitals invested significant capital in providing sub-acute services as volumes grew. This investment added value to their services and they are now an accepted part of the care continuum. Many hospitals converted some of their excess acute care capacity caused by the shorter length of stays to other uses. If the government decides to bundle these services into one reimbursement per patient episode, the incentive that generated growth in the sub-acute services will be turned on its head. Hospital and doctor consortiums will be the likely recipients of the bundled payments. They will want to keep as much of the funds as possible and pay outside vendors as little as possible. As a result, the average length of stays in hospitals will begin to increase and the admissions to sub-acute facilities will decrease. New capital may be needed to expand hospitals bed capacity while many sub-acute facilities are underutilized. This will be an enormous waste of resources at a time when hospitals will not have the capital resources available to them.

The House Bill encourages the Health Care Commissioner to experiment with different reimbursement models. There are an infinite number of ways to reimburse providers. Hopefully, the government will realize there are enormous consequences to changing the payment model as witnessed by the growth in sub-acute care services after the major change in the 80s. All businesses need some stability in their pricing model and volume projections to do appropriate long term planning.  

 

                The Unintended Consequences of Healthcare Reform – #1
                The Unintended Consequences of Healthcare Reform – #2
                The Unintended Consequences of Healthcare Reform – #3 Part 1
                The Unintended Consequences of Healthcare Reform – #3 Part 2
                The Unintended Consequences of Healthcare Reform – #4

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Beltway Math: How To Count Like Nancy Pelosi

Posted by Hal Andrews in Healthcare Policy, Healthcare Reform on October 30th, 2009

Around my house these days, we are working on certain math concepts that have proven irrefutable over the centuries. This week, for example, we have concentrated on multiplication facts, such as 2×3=6. At the parent-teacher conference this week, I was told how important it was to understand these concepts.

Today’s coverage of the House health reform bill makes me think that some members of Congress should take a refresher course in basic math, such as how to add. Today’s Roll Call reports on the real cost of the House bill:

“The House Democrats’ health care plan would cover 36 million more Americans at a cost of $1.055 trillion over the next decade, while slashing the federal deficit overall by $104 billion, according to a preliminary Congressional Budget Office score released late Thursday.

The cost of the bill was a concern to fiscally conservative Blue Dog Democrats, who sent a letter to the CBO asking additional questions about their estimates and what additional measures could be taken to reduce the overall spending on health care.

Speaker Nancy Pelosi (D-Calif.) had touted the bill as costing $894 billion when she released it online earlier in the day, but that number nets out $167 billion in new pay-or-play taxes on individuals and businesses. Pelosi’s office had also said the bill would cut the deficit by $30 billion, but the CBO score came in much better.

The $1.055 trillion cost is offset by $740 billion in new taxes and revenue and a net $426 billion in cuts in spending, largely in Medicare.

The CBO also estimated that the deficit would continue to shrink slightly in the second decade after the bill is adopted, a key issue for many moderate Democrats, although it said that any estimates that far out have considerable uncertainty.

That $1.055 trillion figure only includes the coverage portions of the bill, down from about $1.2 trillion in the original bill.

Other pieces, including the cost of closing the “donut hole” in the bill for seniors under Medicare, come on top of those figures.

The bill also excludes an estimated $245 billion in costs for preventing a 21 percent cut to doctor’s pay under Medicare. Democrats dropped that provision from the bill and plan to move it separately so that they can say the larger bill does not add to the deficit.”

So, $1.055T – $740B – $426B + $245B + ? = $894B. Got it?

Remember, friends, this is courtesy of the same people who are sure that Medicare fraud is $60B per year that Federal agencies cannot seem to stop. What is your prediction when the Federal government adds another $1,000,000,000,000 into the pot?

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The Government We Deserve: Healthcare Edition

Posted by Hal Andrews in Data Advantage, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform on October 17th, 2009

So, the battle is joined – the passage of the Senate Finance Bill has forced every healthcare participant whose oxen might be gored into the open, and the fighting is fierce.

I don’t have a dog in the fight from an economic standpoint, unless Washington, D.C. decides to give everyone a full indemnity policy like the New Hampshire state union employees. As a result, I have had a freedom to think and speak in a way that few of my colleagues can.

It took me a while to realize that I would be so alone in this regard. I have been very fortunate to participate for the past five years in two different groups of nationally recognized healthcare executives with very diverse experiences. Several of them are very publicly prominent in the debate, and others are quietly influential. I have hoped that these groups might coalesce, create a blueprint for reform, and lead the way forward. While I am disappointed that has not happened, I am really surprised at how resolutely the group members have retreated to their economic realities or their philosophical ideals. In short, there has been no sustained dialogue with the goal of determining how hospitals, physicians, insurance companies, device manufacturers, pharmaceutical companies and others can create a reformed system. At the same time, I have observed all of us bemoan that “healthcare reform” is really “insurance coverage reform”, and not so impressive at that.

The result is that We, the People, have turned it over to Washington, D.C. In the coming weeks, 535 people who know a lot about politics, a little about the art of compromise, and almost nothing about how approximately 20% of the economy works will decide our future. The 20% of us employed in healthcare have failed to reform ourselves through real and shared sacrifice. The 80% is angry enough not to care that they don’t know the difference between a scalpel and a saw.

In the words of Dandy Don Meredith, some people in healthcare will need to “turn out the lights, the party’s over”. The tricky part is that we won’t know until the very end who that is.

On Wednesday, The Wall Street Journal ran an opinion piece called “Paying the Health Tax in Massachusetts” by an author named Wendy Williams. In it, Ms. Williams lamented that the Commonwealth of Massachusetts changed the definition of acceptable coverage. Her family’s policy no longer meets the requirement, so she must either (a) buy a more expensive policy, which she does not think she needs, or (b) enroll in the government option.

What caught my eye was the following:

“Mr. Romney and Sen. Ted Kennedy publicly promised that the middle class – that is, people like us – would not be taxed and that our health-care costs would actually decrease if the plan became law.

My husband and I weren’t convinced. It all seemed inane, but we are neither politically or socially conservative and figured the plan wouldn’t affect us much. Besides, who could be against a plan that covers more people for less money?”

Here in the South, we might respond to that statement by saying, “I’m not sure I would have told that”, but I am afraid the subject is too serious to be that dismissive.

Ms. Williams, in four sentences, has summarized the debate.

First, in order to get elected, politicians have to tell people (us) what we want to hear. Politicians rarely make the call for sacrifice, and today’s America is not interested in that much anyway. Elections for 473 of the 535 positions will be held in 2010. For each of those 473, the calculus over the next 60 days is about how a vote on healthcare reform will play at home between now and November 4, 2010 (Note: “what will get me reelected” is sometimes phrased as “what my constituents want” but rarely as “what does my country need” or “what does courage require”).

Second, We, the People, know better. What is wrong with us? We aren’t that stupid, and we don’t even like Congress. On the other hand, we do seem to like something for nothing. The members of the Greatest Generation have given way to individuals who are more interested in their personal good than the common good. Most of us just listen for what we want to believe and ignore the rest; some of us listen to talk radio and shout at the rest. The Greatest Generation gave way to the Baby Boomers, who seem to be the majority of those in power. The generation of Timothy Leary and “Turn on, tune in, drop out” seems to have taken the “drop out” part to heart, except that Leary’s hope for self-reliance has morphed into singular self-interest.

*********

It is time for We, the People, to wake up:

  • As we proved spectacularly in Tennessee, you cannot cover more people for less money. No one in Washington, D.C. should know that better than Nancy-Ann Deparle.
  • The results of the Massachusetts experiment are that costs have increased, while quality and access have decreased. These results should be terrifying since Massachusetts had one of the lowest uninsured rates in the nation at the start of the Massachusetts Connector program. Up next, “global payments”, aka capitation – good luck with that at Partners.
  • In The Washington Post, Alec MacGillis reports that maybe the Mayo Clinic is not a model for reform since they restrict access to Medicare and Medicaid patients. As we continue to report, the Mayo Clinic does not deliver high healthcare value.
  • The Senate Finance Bill pretends that physicians will take a 25% cut in pay in 2011 to achieve the $900B cost; it appears that AMA has convinced Senator Reid otherwise.

Sir Winston Churchill famously stated that:
“Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” He also said, “The best argument against democracy is a five-minute conversation with the average voter.” Let’s hope that we do not allow Washington, D.C. to test the former, and let’s see if America can prove Sir Winston wrong on the latter.

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The Unintended Consequences of Healthcare Reform

Posted by Mark Brenzel in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on October 16th, 2009

The Unintended Consequences of Healthcare Reform

(that are never properly considered)

Two healthcare reform proposals have dominated the debate to date; the public option and how to finance the additional cost for universal coverage. However, there are some other significant changes in the House Bill that the general public would find hard to understand that would nevertheless dramatically change the healthcare system if passed.

The new Health Commissioner that will oversee the Health Choices Administration will have enormous powers over the new healthcare exchange and private QHBPs (qualified health benefit plans). The healthcare exchange will act much as the Massachusetts Connector and provide a marketplace for individuals and small employers to purchase insurance. In essence, it will allow individuals and small employers to increase their purchasing power by forcing insurers to put them into large risk pools.

Some of the requirements in the House Bill for QHBPs are as follows:

  • May not consider pre-existing conditions
  • Guaranteed issue and renewability
  • Premium rate variability:
    • Age – limited to 2-1 ratio from most expensive age group to least expensive
    • By area
    • By family make-up; ratio to individual premium must be consistent
  • Parity in mental health and substance abuse benefits to medical benefits
  • Must meet minimal medical loss ratio established by Commissioner; if does not meet it must make a refund to subscribers
  • No annual or lifetime limitations
  • No deductibles or co-pays for preventive services
  • Limit to annual out-of-pocket expenses; $5,000  per individual, $10,000 per family
  • Basic plan benefits must cover 70% of the expected cost of healthcare for the population; enhanced plan must cover 85% and premium plan must cover 95%

Some of the powers of the Health Commissioner are as follows:

  • Commissioner has right to determine adequacy of network and force an insurer to pay in-network rates where their contracted network is deemed inadequate
  • Commissioner can adjust premiums revenues among plans to adjust for adverse selection
  • Under the public option, the provider payment mechanisms and policies may be changed from the Medicare methodology to include patient-centered medical home and other care organizations, value based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers.

 

                The Unintended Consequences of Healthcare Reform – #1
                The Unintended Consequences of Healthcare Reform – #2
                The Unintended Consequences of Healthcare Reform – #3 Part 1
                The Unintended Consequences of Healthcare Reform – #3 Part 2
                The Unintended Consequences of Healthcare Reform – #4

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100 Top Best in Value(TM) Hospitals

Posted by Editor in Data Advantage, Findings, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform, Index News, Value-Based Purchasing on October 12th, 2009

Hospital Value Index: Top 100 Best in Value ™ Hospitals Released

pdf 100 Top Best in Value(TM) Hospitals

Hospitals in New York, Michigan, Pennsylvania, Alabama and North Carolina cited the most

(NASHVILLE, Tenn.) ‐ Data Advantage, LLC announced today the Top 100 Hospital: Best in Value Hospitals™ list from the 2009‐2010 Hospital Value Index™, the first and only national study on U.S. hospitals and the value of care they provide.

The hospitals in the Top 100 list represent nearly every state in the U.S. The states with the most hospitals achieving Top 100 Best in Value™ recognition were: New York, Michigan, Pennsylvania, Alabama and North Carolina.

“These are the hospitals that set the bar for the nation when it comes to value. If every hospital performed at the level of the Top 100, we found that more than $60 billion per year could be saved,” said Hal Andrews, CEO of Data Advantage.

“The Hospital Value Index™ winners are a geographically diverse group of hospitals that have a proven ability to deliver high value care to their communities and represent a model of care that other U.S. hospitals should look to,” added Andrews. “As legislators consider health reform, we believe that it will be increasingly important to recognize and reward those hospitals that deliver outstanding value.”

These results are part of the findings from the 2009‐2010 Hospital Value Index™ study, an analysis of the value of care provided at more than 4,500 U.S. hospitals. As part of the release, Data Advantage is inviting hospitals and healthcare leaders to participate in the Voices of Value™ Summit, which will take place in Chicago December 7‐9. Industry leaders will convene at the Westin Chicago River North and discuss topics such as value, affordability, efficiency and patient satisfaction.

In alphabetical order, the Top 100 list of hospitals from the 2009‐2010 Hospital Value Index™ study is:

• Alegent Health Immanuel Medical Center (Omaha, NE)
• Alegent Health Mercy Hospital (Council Bluffs, IA)
• Alegent Health Midlands Hospital (Papillion, NE)
• Alleghany Regional Hospital (Low Moor, VA)
• Arnot Ogden Medical Center (Elmira, NY)
• Berkshire Medical Center (Pittsfield, MA)
• Bertrand Chaffee Hospital (Springville, NY)
• Billings Clinic (Billings, MT)
• Bon Secours ‐Memorial Regional Medical (Mechanicsville, VA)
• Butler Memorial Hospital (Butler, PA)
• Carolinas Med Center‐Mercy (Charlotte, NC)
• Carolinas Med Center‐University (Charlotte, NC)
• Carolinas Medical Center‐Northeast (Concord, NC)
• Centra Health (Lynchburg, VA)
• Chelsea Community Hospital (Chelsea, MI)
• Citizens Medical Center (Victoria, TX)
• Clinch Valley Medical Center (Richlands, VA)
• Cobleskill Regional Hospital (Cobleskill, NY)
• Community Medical Center (Toms River, NJ)
• Connally Memorial Medical Center (Floresville, TX)
• Cullman Regional Medical Center (Cullman, AL)
• Dixie Regional Medical Center (Saint George, UT)
• Dubois Regional Medical Center (Du Bois, PA)
• Flowers Hospital (Dothan, AL)
• Forsyth Memorial Hospital (Winston Salem, NC)
• Fort Madison Community Hospital (Fort Madison, IA)
• Gaston Memorial Hospital (Gastonia, NC)
• Graham Regional Medical Center (Graham, TX)
• Greenbrier Valley Medical Center (Ronceverte, WV)
• Hamilton General Hospital (Hamilton, TX)
• Heart Hospital of Lafayette (Lafayette, LA)
• Heartland Regional Medical Center (Saint Joseph, MO)
• Henry Ford Macomb Hospital (Clinton Township, MI)
• Heritage Valley Sewickley (Sewickley, PA)
• Holland Community Hospital (Holland, MI)
• Integris Mayes County Medical Center (Pryor, OK)
• Jackson Purchase Medical Center (Mayfield, KY)
• Jefferson Regional Medical Center (Crystal City, MO)
• Kettering Medical Center (Dayton, OH)
• Kettering Medical Center –Sycamore (Miamisburg, OH)
• Lakeside Memorial Hospital (Brockport, NY)
• Lakeview Med Center (Rice Lake, WI)
• McCullough‐Hyde Memorial Hospital (Oxford, OH)
• Meadowview Regional Medical Center (Maysville, KY)
• Medical Center Enterprise (Enterprise, AL)
• Memorial Regional Hospital (Hollywood, FL)
• Mercy Health Partners Hackley Campus (Muskegon, MI)
• Mercy Health Partners‐ Mercy Campus (Muskegon, MI)
• Mercy Medical Center (Des Moines, IA)
• Mercy Medical Center‐Dubuque (Dubuque, IA)
• Methodist Medical Center of Illinois (Peoria, IL)
• Methodist Medical Center of Oak Ridge (Oak Ridge, TN)
• Minden Medical Center (Minden, LA)
• Monroe County Hospital (Monroeville, AL)
• Montgomery Regional Hospital (Blacksburg, VA)
• Mount St. Mary’s Hospital and Health Center (Lewiston, NY)
• Nebraska Heart Hospital (Lincoln, NE)
• Northwest Medical Center (Winfield, AL)
• Oklahoma Heart Hospital (Oklahoma City, OK)
• Owatonna Hospital (Owatonna, MN)
• Paradise Valley Hospital (National City, CA)
• Parkway Medical Center (Decatur, AL)
• Presbyterian Hospital Huntersville (Huntersville, NC)
• Redmond Regional Medical Center (Rome, GA)
• Reid Hospital & Health Care Services (Richmond, IN)
• Rochester General Hospital (Rochester, NY)
• Saint Joseph Hospital (London, KY)
• Saint Joseph Mercy Saline Hospital (Saline, MI)
• Saint Vincent Health Center (Erie, PA)
• Saint Vincent Hospital (Worcester, MA)
• Sarah Bush Lincoln Health Center (Mattoon, IL)
• Spectrum Health United Memorial ‐United Campus (Greenville, MI)
• St. Alexius Medical Center (Bismarck, ND)
• St. Anthony Hospital (Oklahoma City, OK)
• St. Anthony Regional Hospital (Carroll, IA)
• St. Charles Hospital (Port Jefferson, NY)
• St. Francis Health Center (Topeka, KS)
• St. Joseph Health Center (Warren, OH)
• St Josephs Hospital (Chippewa Falls, WI)
• St. Josephs Mercy Health Center (Hot Springs, AR)
• St. Luke’s Regional Medical Center (Sioux City, IA)
• St. Mary’s Health Center (Jefferson City, MO)
• St. Mary’s Hospital at Amsterdam (Amsterdam, NY)
• St. Vincent Healthcare (Billings, MT)
• Tawas St. Joseph Hospital (Tawas City, MI)
• Thomasville Medical Center (Thomasville, NC)
• Trinity Hospitals (Minot, ND)
• United Hospital Center (Clarksburg, WV)
• Unity Hospital of Rochester (Rochester, NY)
• UPMC McKeesport (McKeesport, PA)
• UPMC Northwest (Seneca, PA)
• UPMC Passavant (Pittsburgh, PA)
• Venice Regional Medical Center (Venice, FL)
• Walker Baptist Medical Center (Jasper, AL)
• Wesley Medical Center (Hattiesburg, MS)
• West Anaheim Medical Center (Anaheim, CA)
• Western Baptist Hospital (Paducah, KY)
• Wheeling Hospital (Wheeling, WV)
• White River Medical Center (Batesville, AR)
• Williamsport Hospital Medical Center (Williamsport, PA)

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Mr. Orszag, Please Hold the Mayo

Posted by Hal Andrews in For Consumers, Healthcare Policy, Healthcare Reform on September 30th, 2009

While we have spent the last two weeks using our GPS to report the 747 hospitals that the Hospital Value Index™ identified as Best in Value, we noticed over the weekend that Mr. Orszag is still lost with his Atlas.

In the September 27 edition of The New York Times, Sheryl Gay Stolberg reports on the White House’s intensive lobbying efforts to find a Republican Senator to support its vision for health reform. One example cited is a dinner of “lamb loin and Scottish salmon” between Mr. Orszag and Senator Susan Collins, during which Mr. Orszag reportedly e-mailed questions to Dr. Dennis Cortese at the Mayo Clinic.

As articulated here before, the Mayo Clinic has much to recommend it, but low cost, high value healthcare is not among them. Having walked the corridors of hospitals in more than 30 states, I am certain that the medical foundation model is not something that can be replicated successfully throughout America. If, however, Mr.Orszag is bound and determined to use the medical foundation model as the blueprint for national reform, we would again suggest using the GPS to find his way. Using the GPS will point him to the Billings Clinic, which the Hospital Value Index™ reveals produces the highest value of any of the medical foundation or clinic model in the U.S.

Better yet, we would suggest that Mr. Orszag join us at the Voices of Value™ Summit to learn what the 747 Best in Value hospitals have in common that allows them to produce high value care in urban and rural America, in teaching and non-teaching settings, whether for-profit or not-for-profit.

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