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One State’s Ground-breaking Plan to Regulate Hospital Costs

Maryland officials have proposed what analysts call the most ambitious initiative in the country to control soaring medical spending - a plan that would bring relief to employers and consumers footing the bill while directly challenging the state’s hospital industry.

Maryland has set hospital rates since the 1970s, keeping spending per admission below national trends.

The plan, which needs HHS’ approval, would use Maryland’s unique rate-setting system to keep hospital spending from growing any faster than the overall economy.

“Maryland has set hospital prices for more than 30 years for insurance companies and Medicare alike,” Joshua M. Sharfstein, state secretary of health and mental hygiene, said in an interview. “There are tools to accomplish this in Maryland that do not exist in other states.”

The existing waiver caps the growth in Maryland hospital costs per inpatient case. The new test would track spending growth for both inpatient and outpatient care, but per Maryland resident rather than per case. The plan also discusses comprehensive measures to coordinate treatment and reward caregivers for efficiency instead of performing procedures.

The earliest the measure could take effect is January, but it is far from being adopted as written. Hospitals reacted coolly, and state legislators complained about how it was developed.

The proposal is a “tectonic change” and “the single most important event that’s affected Maryland hospitals in the last 40 years,” stated Carmela Coyle, chief executive of the Maryland Hospital Association. “The only thing that’s certain at this point in the application is the [spending] cap. We don’t know about the mechanisms that will actually get us there.”

Even the chief executive of Maryland’s biggest private health insurer, also said the plan is short on details and long on risks for hospitals.

“It would be wonderful if [costs] could be slowed down,” said Chet Burrell, chief executive of CareFirst Blue Cross Blue Shield. “But then you have to turn to another question. And that is, what is the method by which they would decrease…that’s where our concerns with the proposal are greatest.”

According to the draft proposal, in four years there would be additional changes that would address all health care costs.  For clinicians and facilities outside hospital systems, the second phase would create cost-control incentives such as shared savings among providers rather than direct rate-setting, Sharfstein said.

The rate commission’s “all payer” approach fixes hospital prices for everybody, including commercial insurers, government programs and people paying cash. The system also builds expenses for impoverished care into statewide rates, ensuring that hospitals with high levels of uncompensated treatment stay in business.

Maryland hospitals do not perform well in terms of expensive readmission rates for recent discharges. This proposal would also expand Maryland initiatives to reduce hospital readmissions, coordinate care among providers and share the cost savings with caregivers. The proposal submitted is part of Maryland’s attempt to renegotiate the waiver and create savings for Medicare.

Maryland has a Medicare hospital expenditure rate that is below the national average. Losing this waiver would mean foregoing roughly $1 billion in annual hospital revenue. But approving the new plan - cutting hospital cost growth to less than that of the long-term expansion of the state economy -would also shock a system accustomed to adding jobs, buildings and revenue.

Over the past decade, Maryland hospitals have added jobs at nearly five times the rate of the state as a whole, according to Labor Department statistics. Hospital revenue per Maryland resident (the proposed new benchmark in the state’s HHS proposal) has grown nearly twice as fast as the economy over the same period, according to the cost commission.

“When you all of the sudden jam on the brake and say you’re only growing at state GDP, it’s like a two-by-four in the face of the health system,” said Uwe Reinhardt, a health economist at Princeton University. “And it causes a lot of stress.”

The fact that Maryland has yet to resolve its Medicare waiver issue adds just another layer of uncertainty and one more unknown to factor in, said University of Maryland Medical System (UMMS) CEO Robert Chrencik.” Whatever the new Medicare waiver looks like, it will likely spur fundamental change over the next several years to how hospitals operate”

With that in mind UMMS is looking to keep operating costs low this year while making investments Chrencik believes will be crucial for future success, including a $150 million investment in IT over the next five years.

Nearby LifeBridge Health is rolling out the rest of its EMR system this year, a project that has already cost tens of millions of dollars, said LifeBridge CFO Chuck Orlando, who is concerned about future project investments if revenue growth is slowed “I don’t know how we’re going to be able to fund all the things we need to pay for under constrained reimbursement,” he said.

(Source)

As a counterforce to industry skeptics, the proposal may have the backing of Obama administration officials who see Maryland’s tradition of rate control as a promising model, said Joseph Antos, a health economist at the American Enterprise Institute who sat on the commission for several years.

Reinhardt, who has written favorably of Maryland’s rate-setting board, suggested that Sharfstein may indeed have something that looks like the answer.“Intellectually, the Maryland health-care leaders are way ahead of the health-care leaders in the rest of the country,” he said. “It’s probably the most ambitious such thing I’ve seen.”

(Source)

Health Record Banks – A More Perfect Health Information Exchange?

Health Record Banks (HRBs) are community organizations that put patients in charge of a complete copy of all their personal, private health information, including both medical records and additional data that electively may be added by the patient. The patient explicitly controls who may access specific parts of the information in his/her individual account.  When patients seek care, they give permission for their healthcare provider to access some or all of their up-to-date health records.

The current approach involves using HIT to replicate existing manual processes for contacting other clinicians or organizations to get patient records, rather than creating a single, unified record for each patient as has been done for years with paper records within single hospitals and clinics. In other words, institution-centric systems are being built, often leaving patient information where created, and then retrieving and integrating the data in real time demando. But can this seemingly “scattered” approach really be successful?

The Journal of the AMA published a Viewpoint advocating health record banks entitled, “Putting Health IT on the Path to Success.” Authored by HRBA President William A.Yasnoff, MD, PhD, and HRBA Advisory Board members Latanya Sweeney, PhD, and Edward H. Shortliffe, MD, PhD, the article highlights the growing and consistent published evidence of the failure of the current approach to health information exchange (HIE) that leaves patients’ electronic medical records where they happen to be created.

(Source)

Brad Tritle, one of the paper’s authors, and a consultant to HIEs stated, “All the state HIEs are looking for ways to sustain themselves, and a growing number are also trying to figure out how to engage consumers. This paper not only shows the lower costs of building Health Record Banks, but suggests that a platform containing patients’ own records under their control could spawn incredible technology-based economic development through the building of health and wellness apps. We think health care cost savings, while important, could be minor compared to the new value created. Others are thinking about this and looking for guidance, and our hope is that this paper will give them the direction needed to move.”

William Yasnoff, MD, PhD, founder and president of the HRBA, and former senior advisor to the HHS on National Health Information Infrastructure, stated, “Hundreds of efforts around the country to share information between unaffiliated providers continue to fail. Their technical architectures and lack of consumer control greatly limit their value, and thus their potential business models. This paper lays out the foundational analysis of cost and value that existing businesses, providers, employers, governments, health information organizations, and others can use to create new, sustainable electronic medical record sharing businesses that will literally transform healthcare worldwide. No other approach can readily assure comprehensive records when and where needed to improve health care quality.”

The HRBA’s white paper explains how consumer control of their own records in a secure and private, bank‐like system is relatively inexpensive to build and operate, and lays a foundation for new value and innovation that could produce new jobs. In the past year, both HHS and the Bipartisan Policy Center have issued papers supporting further exploration and expansion of what is called “consumer-mediated exchange”, which categorizes the HRB approach.

Building on existing in-depth analyses by experts at Partners HealthCare and published by HIMSS, the white paper concludes that a nationwide system of HRBs could be built for less than 3% of the estimated costs of current models. In addition, HRBs enable new apps to be created to serve the needs of patients, providers, public health and researchers.

Finally, the Viewpoint urges physicians to support health record banking, which solves the problems of privacy, stakeholder cooperation, and financial sustainability that have thwarted current HIE efforts. (More information is offered in the HRBA Architecture and Business Model white papers).

An Overview of the HRBA Principles

Consumer Ownership and Control

1. HRBs protect the individual consumer’s right to health information privacy and confidentiality by acting as trusted legal custodians of consumers’ health records.
2.  HRBs are repositories for trustworthy copies of health information selected or submitted by the
consumer from various sources.
3. Health information in an HRB is owned by the consumer and is not an asset of the health record bank.
4. Consumers may authorize someone else to manage their HRB account.
5. HRBs provide consumers and others they authorize with immediate electronic access to their
health information.
6. Consumers control all disclosures of their health information by a HRB unless otherwise
required by law.
7. With consumer consent based on advance disclosure appropriate to the circumstances, HRBs
enable secondary use of health information, such as for public health and research purposes.

Operation

8. HRBs are governed in an open, accountable, and transparent manner.
9. All access and updates to information in HRBs are recorded as they occur in an appropriately
detailed audit trail database, and each HRB shall maintain those unaltered audit records at least
during the time that a consumer’s health record is kept at the bank and make those audit records immediately
accessible to consumers.
10. HRBs have established processes for correcting errors by updating, amending, and
sequestering data, including mechanisms for notification of parties who have received such data.
11. HRBs promptly disclose breaches of privacy, confidentiality, or security to consumers.

(Source)

The Next BIG Thing: The Internet of Everything & Healthcare

The next “big thing” - really?  Yes, we already have the Internet (that may or may not have been invented by Al Gore). But what is the “Internet of Everything” (IoE) and why is this so new?

According to Cisco, “IoE brings together people, process, data, and things to make networked connections more relevant and valuable…turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.”In fact, IoE is “…the fourth major evolution of the Internet, following the advent of email, the emergence of e-commerce business models during the 90s, and the rise of social networks and cloud computing over recent years.”

BTW – it can also be referred to as “Cyber-Physical Systems” (CPS) or “Human-Cyber-Physical Systems” (HCPS), and the “Internet of Things” (IoT). (Source) I’m sticking with IoE for this piece.

IoE has the power to enhance the effective delivery of care while improving value and patient-centered processes. One example: a smart garment that monitors a heart patient and communicates with the doctors and the patient’s electronic medical records. Theoretically, this type of monitoring could keep someone from needing care in a hospital setting.

With respect to medical records, Neal Patterson, Cerner’s CEO and chairman, recently testified in front of a federal advisory panel and stated that while patients may have web access to their health data, they can’t be expected to manage the flow of that data among various care providers. What is needed is a system for consumers “to automatically feed all of their health information to the organization accountable for their health and care…a model we think is must more realistic in the next five to 10 years.”

Whoa – everything that could have a sensor slapped on it could eventually connected to IoE.  A chair, a toaster, parts of a car, the lights in your house, energy meters, and of course you. Futurists contend that much of the technology to do this is already available. The challenge is to refine that technology and make it ubiquitous. (Source)

IoE has the power to transform a multitude of industries and the global economy. At the recent Davos economic forum, Cisco announced that IoE can add $14.4 trillion to global businesses in the next 10 years.

Some companies that have announced platforms and/or tools for supporting IoE in healthcare:

• Cisco
• AT&T and partners
• Arrayent
• Razorfish Healthware

Other articles on how to capitalize on IoE:

Tech Republic
Washington Post

 

Hottest Health and Fitness Gadgets, Apps, And Startups To Watch

With spring soon approaching and our New Year’s resolutions in the rearview mirror, we find ourselves trying to keep our momentum going.

There’s been a lot of activity in the health industry over the past year, and many mobile applications (“apps”) and organizations have launched with a mission to help the consumer better manage overall health.

New technology developments, including improvements in bio-sensor technology, are leading to an increase in the popularity of health monitoring and tracking devices.

As the overall financial risk shifts to providers through new models, including medical homes and ACOs, care delivery is becoming more patient-centric and outcome-focused.  The intersection of IT infrastructure, new care delivery and payment models, and apps continues to yield interesting tools for consumers, providers, and even payers. Here are some of the most notable ‘winners’ according to TechCrunch.

Wearable Technology

Jawbone UP

Up is one of the members of the exciting new generation of movement and health-tracking devices. The $129 bracelet can be used to track your activity during the day, your sleep at night, as well as log food intake and mood to give you a better overall picture of your health, happiness and calorie input and output. However, the device doesn’t come with much connection to the desktop or an external display.

The device comes with about a week’s worth of battery life in a single charge, is sleek, insulated in rubber and is waterproof.

Fitbit

Fitbit is another popular wearable activity tracker that, compared to Up, is slightly more favorable in the pricing department at $99. The small, lightweight device clips onto your clothing or fits into an elastic armband when sleeping. It tracks the number of steps one takes each day, the amount of sleep one gets each night, is sensitive to movement and offers a look into the number of calories burned each day.

It displays users’ activity in a personal analytics module linked to their Fitbit account, which can be configured using a wireless USB dongle that pairs with the software. Users can use the USB dongle or the new Bluetooth connection to sync the data. Users’ data can be viewed graphically measuring blood pressure, caloric intake, and more.

Nike+ FuelBand

Reviews of the FuelBand are varied that it may not be accurate enough for use in real training or workouts, making it more for casual use. It comes with a great mobile app and tracks whether or not you’re burning calories each day and meeting your basic fitness goals.

Basis

The Basis band is a bit more expensive at $200. The device comes with an LCD display that shows date and time, touch capacitive buttons, a 4-day battery life and Bluetooth support, which will be activated when the company releases its accompanying mobile apps.

The device is loaded with sensors, which beyond using the accelerometer to measure sleep patterns, include an optical scanner to track blood flow (i.e. heart rate), a perspiration monitor, as well as skin and ambient temperature monitors to measure workout intensity and heat dissipation. The company offers a dashboard complete with a host of metrics that includes information such as calories burned, steps taken, resting heart rate, hours slept and allows users to track their progress and create goals.

Basis self-adjusts to your daily activity and sleep patterns automatically. The app works in the background and suggests attainable personalized goals and habits. There are still more pieces to add, like integrations with other devices, an API, mobile apps.

Lark

Lark combines, a nighttime and daytime wristband and iOS app to track basic fitness statistics, food eaten, sleep logged, calories burned, distance traveled, etc.

The app and wristband combo now offer one-tap diet tracking allowing users to tap a button to track diet information, stress and productivity data. The Lark product, which includes the two wristbands and mobile apps, will sell for $150.

Simply Apps

RunKeeper

This Android and iOS app is one of the strongest in the category of those that look to turn your smartphone into a personal trainer. RunKeeper is part motivator, part tracker and (long-term) part health graph. The app allows you to track your walks, runs, exercise bike rides, hikes, etc. by using the GPS in your phone, keeping stats on each activity, comparing those stats, setting short-term and long-term goals, offers customizable training plans, and voice coaching. The startup also aims to be a health and fitness data aggregator and appeal to Quantified Self enthusiasts by connecting to Bluetooth and leveraging its API to integrate with Fitbit, WeightTraining.com, Fitocracy, Lose It!, Gympact and GAIN Fitness, among others.

RunKeeper has over 14 million users and many are looking to tie in data from other health apps to their RunKeeper accounts, especially as the company now allows them to earn credits for their workouts and apply them to corporate wellness programs, fitness games and rewards systems. Usage of these integrations, grew 825 percent year-over-year in 2012, and this is partly due to Mark Zuckerberg’s inclusion of the app in a short list that had caught his attention last year.

Lift

Lift is a great-looking iPhone app operating behind an ambitious goal: Improving human potential. Lift wants to help you reach your goal, whether that’s getting in shape, living healthier, becoming more productive, etc.

The app helps break down personal goals into micro habits in order to make it easier to gain momentum and, presumably, achieve those goals. Users create and join habits, clicking Lift’s big button if they’ve met their goal that day, and all activity is public, where users can cheerlead for their peers and receive encouragement of their own. The app pushes accumulated data into good-looking graphs and charts, showing how consistent the users have been.

Beeminder

Beeminder is attempting to take a negative approach to motivating you to reach your goals. If you don’t stay on track towards your stated goal every day, Beeminder will charge you a predetermined amount, starting at $5, that increases each time you fall off track. Beeminder works for any quantifiable goal, like losing weight, exercising three times a week, or even productivity goals like checking things off your to-do list. It can automatically track your data from other services like Fitbit, Withings, and RunKeeper.

Retrofit

Retrofit is a weight-loss program designed for busy people that uses a little bit of Skype, Fitbit, connected, wireless scales and live mentorship from wellness experts to help you get in shape. Retrofit allows users to set small, achievable weight loss goals, and private Skype video sessions with real, live fitness instructors to combat empty promises and increase healthy outcomes.

This app uses data from wearable health-tracking devices (like Fitbit) and wireless activity monitors, and displays information in a customizable method. What sets Retrofit apart is the personalized instruction from its wellness experts, who are registered dietitians, behavior coaches, and exercise physiologists focusing on helping you lose weight. Retrofit comes at a cost, though, with its starter, 10 percent weight loss program beginning at $259/month for a year-long commitment and scaling up from there.

MapMyFitness

MapMyFitness is a well-backed assembly of fitness-oriented websites and apps, which allows users to track and store their running, cycling, walking and hiking activity and access a considerable database of international routes, fitness calculators, events, listings, nutrition tracking and more. Founded in 2005, MapMyFitness is one of the early movers in the space and has grown into one of the more popular fitness apps in the App Store, passing 9 million registered users and 30 million downloads (across all apps) this summer.

Keas

Keas is a venture-backed social wellness platform brought to you by Adam Bosworth, a familiar name in the Health 2.0 space and one of the creators of Google Health. Keas allows companies to pick health goals and compete against each other to lose weight and get in shape, incentivized by a reward system which offers both real and virtual prizes.

The idea is to reduce the cost of health care and increase organizational productivity by giving employees a wellness program that encourages participation and engagement. Employees join teams of up to six people, competing for cash offered by their employers in pursuit of healthier lifestyles. One corporate client (Chilton hospital) reported that participating teams lost 1,230 pounds in a 12-week challenge.

Gympact or Pact, Inc.

Pack, Inc. is a website and iPhone app that aims to complement all those new health data trackers, devices and training apps with an incentive plan adding another layer of user. For Pact, the key to achieving your health and fitness goals revolves around negative motivation. Pact offers peer pressure and cash as its incentive, allowing users to check in and set goals for, say, how many times they’ll hit the gym in a given week and how much they’re willing to pay if they don’t reach that goal.

Cash rewards are earned for achieved goals, and if not, the money goes into a community pot to be distributed to those who do hit their milestones. Pact Co-founder Yifan Zhang describes the focus as creating value for its partners. For RunKeeper for example, Pact was able to increase RunKeeper usage by 64 percent across the board and by over 520 percent for its least active users by employing its monetary reward structure.

Azumio

Thanks the popularity of its biofeedback apps like Instant Heart Rate, Stress Doctor and Stress Check, this startup has seen over 30 million downloads across its iOS and Android apps. In July, it acquired SkyHealth, the makers of Fitness Buddy, one of the top-ranked paid health apps on the App Store. With the acquisition, Azumio now counts 15 health and fitness apps in its portfolio and is on a mission to create a fitness platform that gives users a complete picture of their health, spanning heart rate, stress, sleep behaviors, blood sugar levels and workout routines. With the recent addition of its Fitness Trainer app, Azumio is looking to become a mobile, adaptable personal trainer and health-tracker that allows you to reach your fitness goals without ever going to the gym.

Others to Investigate

Zombies, Run, JEFIT, Pocket Yoga, Lose It!, HealthTap, DietBet, Skimble, and Fitocracy

Some HealthTech Startups To Watch

LumoBack — A smartphone app and device that you wear around your waist designed to help improve your posture. A child of the Quantified Self movement, the device monitors your activity, movement and posture and provides feedback via its apps for iOS.

Venio and Nutritionix — Two related but unaffiliated startups. Venio is an app that can set dietary restrictions and provides a personalized set of meals depending on time of day, etc., culling its meals from food bloggers and trustworthy content sources. Nutritionix is building a public, searchable nutrition database for nutrition data from restaurants and packaged and common foods. The company just beta launched its API, which aims to offer developers the opportunity to integrate nutrition info into their apps.

My Last Cigarette — One helping smokers quit by mapping out changes in their health as they quit.

(Source) 

Other Happenings in Mobile Health

Today’s smartphones are filling the role of everything from an ever-present fitness coach to an FDA-approved heart monitor. Unfortunately as consumers move to mobile platforms, surveys show that more people are not only turning to their mobile devices for health information, they’re quickly embracing the new technology with a great deal of trust. A study earlier this month from Royal Philips Electronics found that nearly a third of Americans said they use interactive health applications or symptom checker websites instead of going to the doctor. This may not necessarily be a good thing.

The adoption of mobile health apps has been uneven, with most consumers gravitating to those for exercise, diet and weight and doctors indicating interest in, but not necessarily widespread adoption of, mobile apps. Given the fact that general fitness and wellness apps can appeal to a broader audience of healthy consumers and don’t require buy-in from doctors, insurance companies or other institutional players, it makes sense that mobile health, has moved faster for fitness applications than clinical ones.

While the Food & Drug Administration (FDA) is still expected to provide further clarity on the types of health apps it will regulate, it’s already approved several (at least 75 according to an analysis by MobiHealthNews). The FDA’s decision earlier this year to approve remote monitoring in a clinical trial was another major milestone and paves the way for increased mobile health adoption in the medical community.

The continued support of the ACA and other health IT-related legislation could give hospitals and doctors new incentives to adopt mobile apps.

Insurance companies are also stepping up their games, with mobile platforms that combine their own apps with third-party, consumer-facing apps. For example, earlier this month, Aetna’s CEO said his company’s health data syncing platform CarePass would go mobile in March, 2013 to connect its own full-service symptom checking app iTriage with fitness apps like Fitbit and MapMyFitness.

As this niche evolves healthcare providers and patients will need a way to distinguish the good from the bad. Companies like Happtique are emerging to provide healthcare providers with private app marketplaces that curate and certify top-quality health and fitness apps. Those kinds of platforms could further drive up the role of mobile apps in the medical arena.

(Source) 

So when all is said and done, perhaps the key to Health and Wellness will be in the form of wearing either Wonder Woman cuff bracelets or a Dick Tracey watch. (Source)

Business Updates on HIX (aka “Marketplaces”) and Other ACA Issues

The Departments of Health and Human Services (HHS) and Labor along with the Internal Revenue Service (IRS) released jointly this week FAQs that address several issues associated with Affordable Care Act (ACA) implementation. Among the topics, the document indicates that employers will not need to notify employees of the availability of health insurance exchanges on March 1, 2013, as previously scheduled. Instead, the guidance indicates “the Department of Labor expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.” More information is available here.

The Office of Management and Budget (OMB) is reviewing regulations from CMS discussing “Minimum Essential Coverage Exemptions (CMS-9958-P)”.

This proposed rule would implement ACA provisions concerning verifications of employer-sponsored coverage eligibility for the purpose of determining an individual’s eligibility for advanced premium tax credits (APTCs). It is expected the final reg will be issued in February.

What About Private HIXs, Insurance Storefronts?

As discussed in a previous article, many payers are developing their own exchanges and marketing these to larger purchasers and employers. Sears Holding Corp. recently announced they’ll shift workers to private exchanges where they can select their own insurance and Sears will help pay for it. This is definitely a good marketing plan as one payer can effectively make a purchasing organization a “happy captive”, and keep the organization from the need to look at the government-run “marketplaces”.

Some large payers have also started opening retail stores in select cities. United HealthCare Group is one of these, opening locations in New York City, Los Angeles, Las Vegas, and other larger cities. Some of these locations specifically target the Medicare Advantage market.

“Customers want to bring the conversation to where they are,” said Christopher Law, a national vice-president at UnitedHealth who oversees the insurer’s retail site. “Why can’t it be more like a bank, where you can go in and have tellers helping you out?” (Source)

How will this new form of insurance selling coordinate with various insurance “marketplaces”? This will indeed be a challenge for business process and IT experts. Stay tuned…

What Does The Public Perceive as Biggest Healthcare Priorities?

A comprehensive new Kaiser Family Foundation/Robert Wood Johnson Foundation/Harvard School of Public Health survey queried the public about their priorities for, and views on, a wide range of health and health policy issues. Respondents listed the creation of HIXs – a key piece of the ACA and one whose implementation has divided states along political lines– the top priority. Specifically, 55% named this as a top priority (including majorities of Democrats and Republicans, 60% and 55% respectively, and 49% of independents). The survey did not specify which government agency should operate the exchanges.

Medicaid Expansion

The survey finds more Americans think their state should undertake the expansion (52%) than oppose it (42%). Unlike exchanges, which enjoy bipartisan support, these views differ sharply by party identification, with most Republicans saying they prefer to keep their Medicaid program as is (66%) and most Democrats (75%) supporting expansion. Independents are evenly divided.

Other topics discussed in the survey include Medicare spending reduction proposals, and public health spending priorities.

HHS Says Insurance Exchanges are Renamed “Marketplaces”

A rose is a rose, is a rose…and in that same vein…a thorn is a thorn, is a thorn…

The Obama administration is re-branding the key element of its signature healthcare law.

HHS has ceased referring to insurance “exchanges”(aka HIX), even as it continues ongoing efforts to push states into setting up their own. Press materials and a public website now discuss insurance “marketplaces” in each state.

Supporters of the healthcare law say the name change wasn’t meant to soften political opposition to the healthcare law. “Exchange” simply isn’t a very good description, they said.

“It’s not that exchanges are unpopular, but there also isn’t broad awareness about what they are and what they will do for the people who will benefit from them across the country, so it makes sense to use a more descriptive name,” a Democratic source said. “The fact is, both Democratic and Republican Governors across the country are building this infrastructure and open enrollment is only eight months away so it’s time to start raising awareness”.

Exchanges are designed to function as one-stop marketplaces for people who don’t receive insurance through an employer. Customers will be able to compare and buy plans online and some will receive a federal subsidy.

States that don’t set up their own exchanges will defer those choices to the federal government, but critics say HHS has too much power over even state-run exchanges.

“The target here is not to make states change,” said Alan Weil, executive director of the National Academy of State Health Policy. “I do think they have come to the realization that the term ‘exchange’ does not actually communicate much to the average citizen.”

(Source) 

HHS promoting exchanges to consumers via texts, emails

Health insurers planning to participate in health insurance exchanges are getting some assistance from the U.S. Department of Health & Human Services, as it takes steps to promote the online marketplaces.

HHS has begun promoting this key element of the reform law through a re-launch of its website healthcare.gov.

Through the new website, consumers can sign up for text alerts and emails so they can stay updated about exchange benefits, coverage options and other resources. When consumers sign up for these updates, they’ll also receive a checklist of seven steps they can take to prepare for the exchanges, Politico reported.

(Source)

Shopping Online for Health Insurance?

There are few things we don’t purchase online these days. Yet, turning to the internet to buy health insurance seems a strange concept.

A survey of more than 1,800 adults conducted by Enroll America, a nonprofit created to educate the public about health reform, found that 78% of people who will be newly eligible for insurance coverage because of the law (in 2014) don’t know a thing about the new health insurance exchanges.

What’s more, most people indicated they wouldn’t be comfortable going online to search for a health insurance plan – 75% said they prefer to be helped in person.

Not a good situation for a law that relies on internet-based markets to get people signed onto health plans.

One of the first exchanges to go online is eHealthInsurance, a website where people have been able to shop for and purchase health plans since 1998 in much the same way the Affordable Care Act calls for.

According to Brian Mast, Vice President of Communications with eHealth, Inc., there is hope. “From our own experience, we can say that consumers are increasingly comfortable with enrolling in health insurance online.”

The key, Mast says, is to build a website that is simple and transparent. “Compared to getting health insurance through your employer, the process of buying your own health insurance can be daunting. There’s no benefits manager holding your hand,” he says.

The Human Touch

The health reform law requires that consumers have access to customer support. Navigators – organizations selected to help people enroll in health plans through exchanges – will be available. In some states, you may even be able to meet in person with someone to walk you through your options.

(Source)

To read more about Enroll America...

Falling Through the Cracks – Coordinating Care & Preventing Readmissions

A novel part of the ACA law that went into effect October 2012 is the Medicare program’s “Hospital Readmissions Reduction Program”. This program requires CMS to reduce payments to Inpatient Prospective Payment System (IPPS) hospitals with excess readmissions, effective for discharges.

The program measures readmission rates for the conditions of Acute Myocardial Infarction, (AMI) Heart Failure (HF) and Pneumonia (PN). CMS defined readmission as an admission to a subsection(d) hospital within 30 days of a discharge from the same or another subsection(d) hospital. The calculations for readmission ratios include adjustment for clinically relevant factors including patient demographic characteristics, comorbidities, and patient frailty.

As reported by Health Affairs in October 2012, “The average total annual penalty nationally is reported to be in the low six figures, while large hospitals subject to the maximum 1 percent will see close to a seven-figure revenue impact. The sum of the penalties assessed nationally approximates $280 million”.

“MedPAC estimates the Medicare program spends $12B per year on potentially preventable hospital admissions…beneficiaries who are readmitted to the hospital within 30 days of a discharge, half will not have had any contact with a physician between first hospitalization and readmission…(demonstrating) lack of care transition management”. – Rachel Burton, Urban Institute as reported in Healthcare Finance News.

Recently a colleague of ours experienced the hospitalization of a senior family member for severe pneumonia. After three weeks of hospitalization and subsequent discharge, the patient returned home for a day and a half, only to develop a fever and suffer a relapse. This was discovered by the home nurse on her first visit. His doctor was notified by the home nurse and was subsequently readmitted to the same hospital.

Unfortunately this is a perfect example of all the factors that can result in hospital readmissions, despite the use of inpatient health IT applications, comprehensive lab testing, and home nursing visits.

According to the American Hospital Association (AHA),hospitals, physicians, home health agencies, nursing homes, and pharmacists may prevent more readmissions working together than hospitals can by improving discharge process alone. Easier said than done, unless a patient happens to have the good fortune of being in a medical home or accountable care organization (ACO) environment perhaps.

In fact, in a recent media interview, Dr. P.J. Brennan, the chief medical officer for the University of Pennsylvania Health System, said “hospitals are trying to keep their arms around patients after discharge, but a patient’s personal finances, health literacy and access to primary care are beyond the control of any individual institution. No patient should be readmitted within seven days…(this is) something that every hospital ought to be able to take care of”.

Other factors could include:

1)  Patient demographics, including health literacy levels; patient financial status and ability to be transported to and pay for additional care requirements; ability to perform, or have someone else perform, the role of caretaker; adherence to care instruction post-discharge including medication adherence.

2)  Lack of a regular primary care provider.

Pilot programs such as CMS’ Readmissions Reduction Program and the Community-based Care Transitions Program (CCTP) can make important starts in understanding the many pieces and processes necessary to preventing 30 day readmissions. 

In the more perfect world of the future, patients will be in an ACO and/or medical home type of system with a case manager assigned for all serious condition discharges. The patient will also have remote health monitoring sensors and applications, and possibly telehealth visits through a home computer so that the case manager and/or clinicians can keep close tabs on health status during the 30 day period. And payers will reimburse for the use of these applications and/or telehealth visits.

Until this more perfect time, the most important piece of the solution truly rests with the role of the primary caregiver, whether that is the actual patient, or more likely a family member, home nurse, friend or neighbor. It is the caregiver who is responsible for helping the patient manage his/her own post-discharge health and navigate the fractured healthcare system.

Insurance Premiums And What To Expect Under The Affordable Care Act (ACA)

What will health insurance cost in 2014?

First, get ready for some startling rate increases in the individual and small group health insurance marketplace due to mandated changes.

On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms. Those increases can come in the form of direct price increases or bigger deductibles and co-pays.

When you add the impact of the requirement that older consumers can be charged no more than 3x as much as the youngest consumers (the usual standard is now 5x difference), premiums increase dramatically for the youngest.

For example, expect individual health insurance rates to double for people in their 20s and early 30s.

People in their late 50s and 60s might see net decreases because of the compression of insurance rates.

Small group rates won’t increase by quite as much as for those in the individual market; an estimated increase of 10% to 20%.

The new regulations require that insurance companies treat their old and new business lines equally. Most existing business will not come under the “grandfather” rules applying to larger group plans This means most existing individual and small group customers can expect pretty much the same thing - a shock to those who already have insurance and don’t think the new law will impact them.

Consumers will find that they will be faced with very comprehensive health plans but those plans––including the lower cost “Bronze” and “Silver” plans––will have very high deductibles. Middle class families (300% to 400% of Federal Poverty Level (FPL), who aren’t fortunate enough to be in employer-sponsored plans and will be eligible for only partial federal premium subsidies, will still have to pay many thousands of dollars in premiums. They will also be confronted with a choice––pay the big premiums for a plan that will cover only 60% or 70% of their health care costs, with a large deductible, or pay a fine equal to 1% of their income for each adult in the family.

Consumers with incomes greater than 400% FPL ($46,000 single and $92,000 family of four in 2014) will pay the full cost of these health insurance policies. But consumers who earn less than 400% FPL will have their premiums capped at a percentage of their income. So, anyone getting a subsidy will be insulated from the very highest premiums. Who will pick up the rest of the premium? Federal taxpayers.

(Source)

Unhealthy Side Effects to Obamacare

Effective January 1, 2013 the ACA law mandates five new taxes: a 2.3% medical device sales tax (example: heart pacemakers, stents, prosthetic joints and diagnostic scanners). Also in effect for 2013 the tax deductibility of medical bills rises from 7.5% of adjusted gross income to 10%.Pre-tax flexible spending accounts (FSAs are now capped at $2,500). The health care overhaul calls for a $63 per person fee to cover the cost of coverage for individuals with pre-existing medical conditions. Insurance companies forced to foot the bill are expected to pass the cost along to an estimated 190 million Americans in the form of higher insurance premiums.

(Source) 

Also under the ACA law, each state will determine the covered health services as defined in the “essential benefits” rule. Lobbyists for provider groups are pressing state legislatures to make sure their particular service gets on that list.

It means lots of new customers not paying much, if anything, out of pocket for their treatments.

Other coverage mandates that various states have announced they plan to require under Obamacare include weight-loss surgery and infertility treatment. States currently impose 2,262 benefit mandates, up from 2,156 the year before, according to the Council for Affordable Health Insurance. There were just 850 mandates in 1992, when CAHI first started tracking them.

In addition to preventive-care rules, ObamaCare bans lifetime limits on coverage and puts caps on out-of-pocket costs, each of which will drive up premiums. According to Towers Watson, its requirement that insurers cover “children” up to 26 years old has already added as much as 3% to premiums.

Individual plans won’t be allowed to have a deductible higher than $2,000. This rule will mean that 1-in-7 workers will be forced to take a lower deductible plan and could pay higher premium costs as a result.

(Source)

Watch This From FOX NEWS: To provide all Americans with health insurance, premiums will have to rise to pay for it, Aetna CEO Mark Bertolini told CNBC’s “Closing Bell” on Wednesday. “If we’re going to insure all Americans, which is a worthy and appropriate cause, then somebody has to pay for it,” Bertolini said of the expected premium increases under Obamacare. Bertolini said that insurance premiums could double in some places just on the basis of what types of policies people buy today. He also said that when Obamacare is fully implemented, it won’t start the way people had hoped and it won’t be cheaper.

Fiscal Cliff Deal and The Effects on Healthcare

The fiscal cliff deal is mostly about preventing the fiscal cliff and stopping a tsunami of huge spending cuts. At the same time legislators did find ways to make some relatively important health policy changes too. They include everything from raising Medicare doctor’s pay, repealing a part of the ACA law, and cutting over $1B from the law’s funding.

Medicare and Medicaid

Medicare doctors will get paid more. Medicare hospitals will get paid less. 

The fiscal cliff bill, aka the “American Taxpayer Relief Act (ATRA) of 2012”, ratified by Congress, postpones a 26.5% Medicare pay cut for physicians for one year and preserves a hefty Medicaid raise for those in primary care.

The massive Medicare cut, triggered by the program’s sustainable growth rate formula and set for January 1, was a small component. What made the abyss so dangerous was the combination of Bush-era tax cuts set to expire this month and $109 billion worth of automatic, across-the-board cuts — called sequestration — in domestic and military spending that also were to take effect this year.

At stake for physicians in this debate is a 2% cut in Medicare reimbursement written into sequestration. ATRA puts this off until March 1, 2013.

ATRA does not offset the $25 billion cost of this “doc fix” by canceling a Medicaid pay hike for primary care physicians authorized by the ACA. The act raises Medicaid rates to Medicare levels for evaluation and management services and vaccine administration. Family physicians, general internists, pediatricians, and sub-specialists related to these fields are eligible for the increase.

Instead, ATRA pays for the “doc fix” largely by reducing Medicare hospital payments. The American Hospital Association (AHA) and other hospital-related groups denounce this approach as harmful to their institutions and the patients they serve.

Hospital interests were not pleased. “While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities”, stated AHA president Richard Umbenstock. “That’s why we are very disappointed at the approach taken in this measure.”  So doctors end up with stable salaries for the next year, but that does not mean that the Medicare program came out of this deal unscathed.

(Source)

Co-Ops

The Affordable Care Act did not include a public option, but it did include funding for Consumer Oriented and Operated Plans (CO-OPs). These are meant to be non-profit, customer-owned and operated plans that could test out new ways to deliver health care. These health plans would compete against traditional insurance plans on the exchanges, when they launch in 2014, giving consumers an alternative to for-profit insurance plans.

The fiscal cliff deal, eliminates most of the more than $1.4 billion in remaining funding from the federal health law for new nonprofit, customer-owned health plans designed to compete against the major for-profit insurers.

That means the Obama administration won’t be able to approve loans to any additional co-ops. In the past two years, HHS has awarded nearly $2 billion in loans to 24 proposed state co-ops.Those loans won’t be affected by the cut.

Critics have been skeptical the co-ops could compete with more established insurers, such as Aetna and UnitedHealthcare.

“Starting a new health plan is a risky proposition,” said Peter Kongstvedt, a McLean, Va.- based health care consultant. He said consumers already have sufficient choice of plans in most markets and won’t miss having the additional co-ops.

The deal leaves 10 percent of the remaining co-op funds to cover the administrative costs connected with the 24 plans already launched.

(Source)

Health Care Changes In The ‘Fiscal Cliff’ Deal

KHN’s Mary Agnes Carey and Politico Pro’s Jennifer Haberkorn detail the deal struck between President Obama and Congress to avert the so-called “fiscal cliff” and what the compromise means for hospitals and doctors who serve Medicare patients.

(Source)

In addition to the effects on healthcare, the fiscal cliff deal preserves the tax cuts for individuals earning no more than $400,000 and couples earning no more than $450,000. Americans earning above these amounts will see their tax rate rise from the current top rate of 35% to 39.6%. ATRA delays sequestration until March 1, giving lawmakers 2 months to replace it with a more discerning deficit reduction plan. The measure also extends unemployment insurance benefits and various tax credits and reduces tax breaks for high-income households.

For others details of the Fiscal Cliff Deal

Open Enrollment and What’s On Schedule for Health Reform in 2013?

What are most people faced with during the current open enrollment period?

1. Higher Premiums

First, the bad news: You will likely be paying higher premiums next year, with 13% of companies planning to raise their employees’ contributions to health-care costs by five percentage points or more. The silver lining? Premium increases have been held down thanks to the requirement that insurers give rebates to consumers if insurers spent less than 80% of premiums on medical care, says Cheryl Fish-Parcham, deputy director of health policy at Families USA, a health-care consumer group in Washington.

2. Straightforward Summaries

The most visible change in your packet of insurance options for 2013 is a new form called a “Summary of Benefits and Coverage.” The health-care law requires plans to provide these as of last month. Finally, an end of the document seemingly written in “legalese”.

3. FSA Limits

For 2013, the amount you can put into a workplace flexible spending account will be capped at $2,500. Previously, the limits, if any, were set by the employer.

4. Dependent Coverage

Thanks to the ACA provision, which took effect in 2010, many adult children up to age 26 can remain on their parents’ policies.

5. Higher Spending Cap on Annual Limits

This really applies to the total amount an insurance plan has to pay towards high cost chronic or catastrophic conditions. For 2013, the cap rises to $2 million, from $1.25 million this year. The cap goes away entirely in 2014.

(Source)

What’s Next for 2013:

• Medicaid payments to primary care physicians for primary care services will increase to 100% of Medicare rates for two years.
• States that offer Medicaid coverage with no patient cost-sharing for recommended preventive services will receive a one percentage point increase in federal matching payments.
• Medicare will test bundled payments for physician services, acute inpatient hospital services, outpatient hospital services, and postacute care services for a patient’s episode of care.
• The federal government will impose an excise tax of 2.3% on the sale of taxable medical devices.
• Reductions will begin on disproportionate share hospital payments under Medicare and Medicaid.
• Nonprofit, member-run health insurance companies known as Consumer Operated and Oriented Plans (CO-OPs) will launch.

(Source: Kaiser Family Foundation Health Reform Implementation Timeline)

 

HIX Developments - Private Exchanges and Employers

A number of Blue Cross Blue Shield health plans are establishing private insurance exchanges for their small to larger group customers. Typically in a private insurance exchange, employers give employees specific funds to purchase health coverage from a variety of options offered by a given insurer in the exchange.

How does this differ from the government operated exchanges that must be ready by October 2013? In private exchanges the employer groups choose a specific payer(s) and then their employees can choose specific plan packages from the selected payer(s), most often using a defined contribution funding arrangement. In the government sponsored exchanges, the individual will bear all of the responsibility for choosing and enrolling with a payer using all of his/her own funds, unless the individual qualifies for Federal subsidies.

(Source)

Why would employers choose this model?

Large employers may view private exchanges as a viable alternative to the penalty under PPACA for not offering coverage.

Employers can continue to provide pre-tax subsidies to employees to help them buy insurance through a private exchange (however, doing so may preclude the ability of lower-income workers to take full advantage of government-paid premium subsidies for those who enroll through public exchanges).

Exchanges may offer reduced administrative costs by offloading such tasks as enrollment, plan selection, employee education, and employee complaints. (Source)

By utilizing a “direct contribution” type of benefit funding approach, employers can increase the emphasis on a more mass, consumer-driven insurance market and gain more control over their health care contribution costs.

Blue Cross and Blue Shield of Kansas City has operated a private exchange for its small group clients since late 2011 and is now adding an exchange for large group clients. Health Care Service Corp. (HCSC) is preparing to offer a private exchange for their mid-market and national account clients in 2013, and Highmark Inc. will offer a private exchange platform to small businesses and retirees. (Source)

What Do Providers Need to Think About?

As states ready themselves to develop health insurance exchanges, plans moving into these marketplaces will look to offer lower-cost options to consumers, according to Laura Jacobs, Executive Vice President of Camden Group. Insurers that want to keep spending down might gravitate toward more restrictive networks of health professionals who will accept lower negotiated pay rates.

An important activity for physicians in 2013 will be to observe what local health insurers are doing to organize networks for their exchanges, Jacobs said. Doctors must develop strategies on what health plans they want to participate in, whether they could take lower rates and how they’re going to manage collecting deductibles, she said.

(Source)

In addition, physicians are facing a nearly 27% sustained growth rate (SGR) pay cut on Jan. 1, 2013, unless a deal is cut in sequestration negotiations, which could be complicated by the fact that separate sequestration deficit reductions could mean other cuts to the Medicare program. (And of course the sequestration discussions are anything but simple and congenial).

Status of State Health Insurance Exchanges (HIX) Post-Election

The extension of deadlines for setting up Health Insurance Exchanges (“HIXs”) under the Affordable Care Act, has put both the Exchanges and upcoming deadlines in the forefront.

HHS Secretary Kathleen Sebelius has extended the deadline by one month until Dec. 14 for states to submit their blueprints for a state-based health insurance exchange and/or decide if they plan to establish their own exchange.

This continuing saga around the deadline delay doesn’t change the fact that all states are required to have an online insurance marketplace, one way or another. 

The most crucial deadline is Oct 1, 2013, when state exchanges need to be ready to start enrolling individuals. The exchanges become operational Jan. 1, 2014.

The Affordable Care Act (ACA) provides for the 50 States and the District of Columbia to select one of three types of HIX.  They are:  (1) a State-based Exchange, which offers the highest level of State control over the Exchange, (2) a State Partnership Exchange, which allows the State to control some aspects of the Exchange while HHS administers other parts of the Exchange, and (3) a Federally-facilitated Exchange, which is not really a State Exchange at all. 

Note that these choices are not necessarily permanent, as states can elect different models in and for following years.

Many states had been waiting for the outcome of the election to make their final decision, and some are revisiting their decision in light of the President’s reelection, said Patrick Howard, who leads Deloitte Consulting’s state healthcare practice.

Some states had held hard and fast to not making any plans, “but a number were doing, as well they should, contingency planning on both alternatives,” Howard said Nov. 16 in comments to Government Health IT.

“If they haven’t been doing things in the background and are starting from square one, the odds of them actually making an October implementation are relatively slim,” he said.

What may become a more attractive option is the federal partnership model.

“I think more states will embrace that federal partnership model perhaps for a year and then transition to a state-based exchange, giving them a little more time to think through their business processes and technology,” Howard said.

(Source)

Currently, 18 or slightly over one-third of the States plus the District of Columbia have established or elected to establish a State-based Exchange, and six States were planning for a State Partnership Exchange, so that by Thanksgiving, 2012, 47% of the 50 States plus the District of Columbia have chosen one of the two types of Health Insurance Exchanges available for State participation under the ACA.  ( Kaiser State Health Facts on Health Insurance Exchanges at, “State Decisions For Creating Health Insurance Exchanges in 2014, As Of November 19, 2012.” )

(Source) 

For More Individual State Information:

http://healthreform.kff.org/en/the-states.aspx

http://www.cbpp.org/files/CBPP-Analysis-on-the-Status-of-State-Exchange-Implementation.pdf

http://www.jdsupra.com/legalnews/state-of-the-states-health-insurance-ex-32086/

A Thought to Ponder…

If a state chooses to use the Federal exchange, will there be a fee for accessing the Federal database? Maybe - refer to the following:

State of the States: Health Insurance Exchanges—November 2, 2012

by McKenna Long & Aldridge LLP on 11/5/2012, discussing the Idaho HIX Working Group:

“The most recent information KPMG received on the Federal Data Hub is that the Federal government would NOT be charging the states for its use. Please note that this position has not been formally adopted or communicated in writing, but it was conveyed to KPMG at least twice in the past months in direct conversation with CCIIO. KPMG has not obtained any information on the other services, but we expect that the Federal government will want to charge some type of fee to the Issuer as part of the PMPM costs just like a state would need to do if they were running their own Exchange (in order to be self-sufficient). KPMG has no visibility into what the cost will be, but we think that with the volume that the Feds will have coming through the FFE, the PMPM costs can potentially be lower than if a state does is on their own (e.g., chooses a SBE).”

(Source)

For updates on the latest ACA-related rules regarding HIXs, Essential Health Benefit (EHB) packages and more, visit NCSL’s page.

A Patient-Centered Medical Home (PCMH) from the Group Practice Perspective

At the last Healthcare Technology Network meeting, Lauri Rustand, CEO of Fairfax Family Practice Centers (FFPC) presented a group practice’s perspective on current challenges facing physician practices in today’s healthcare industry, including the implementation of information technology and participating in novel initiatives, such as a PCMH.

Rustand quoted the following statistics that provide the background for the key discussion points:

• 50% of health is determined by health behavior, 20% genetics
• 30% of the problem of patient care is patient involvement
• 40% of the problem of patient care is evidence-based medicine-reducing practice variation and improving outcomes
• 30% of the problem of patient care is management planning, care coordination, and treatment compliance.

With this in mind, Rustand explained that in forming a PCMH arrangement, the insurance companies are actually their biggest partners. Rustand states that FFPC approached the health plans they contract with on the concept of forming a PCMH arrangement. From the perspective of managing the reimbursement mix, FFPC’s fee-for-service (FFS) component is the foundation of the organization’s operating budget, and the practice is not in a position to rely on a sizeable share of reimbursement from PCMH-related bonus payments. The practice also has a per-member-per-month (PMPM) reimbursement component. The bonus payments cover the care management and coordination services for approximately 10,000 plan members. The organization views these payments as “icing on the cake” and at the moment, the practice doesn’t include these amounts in the annual operating budget.

The PCMH contract is a one year contract with the health plan, allowing the practice to drop the arrangement should it choose. Metrics collected by the health plan include: readmissions, ER use, generic drug use and these measurements are compared to the practice’s peers and it’s own benchmarks. To collect all of this information, the practice needs to spend considerable resources on analytical IT applications and the hiring of care coordinators.

Rustand commented on a trend we have observed as well – the full circle industry-wide evolution to full risk-based capitation for primary care providers. But what is the difference between the full-risk capitation of the 1990’s (failed practice) and what is evolving today? Rustand explained that the rate of change in quality measurement and payment models is really what is influencing healthcare now. In addition, advancements in health IT applications and transparency initiatives focused on the patient are changing the way consumers see and understand the dynamics of the healthcare system.

But what about the health IT tools to support PCMH initiatives? This is a real challenge according to Rustand. There are many products and vendors that are very expensive. Add to this the many government regulations and consumer expectations, and practices such as FFPC, face complicated decision points as to what applications to consider. Rustand’s perspective is there are not enough products with actionable information, and the product designs do not adequately address physician workflows.

Lastly, Rustand explained the complications of working with multiple health plans on PCMH initiatives and related business practices. Since each payer has their own Internet portal with no common interfaces, submitting measures and other patient data can be quite time consuming and requires considerable staff time and resources.

Want to learn more about PCMH measures, health plans, and providers?

The Commonwealth Fund’s Recommended Core Measures for PCMH
Independent Health’s PCMH Project
HealthTeamWorks
Fairfax Family Practice Centers

Implementing the ACA: Status of Health Benefit Packages in the States

Benefit Plans: Where Do The States Stand In Their Decisions

The ACA requires that health insurance plans sold to individuals and small businesses provide a minimum package of services in 10 categories called “essential health benefits.” HHS has decided to allow each state to choose from a set of plans to serve as the benchmark plan for their state. States are required to establish benchmark plans based on one of four options outlined in a bulletin on essential health benefits.

States will need to select a benchmark plan by the fourth quarter of 2012, but many began analyzing options earlier this year.

This chart highlights activity around selecting benchmark plans that states have shared publicly or on State Refor(u)m.  (Source)

The states making the most progress are:

Massachusetts - 54%
Nebraska - 39%
Vermont - 30%
Maryland - 24%
Connecticut - 22%

The states making the least progress are:

Alaska, Alabama, Arkansas, Florida, and Idaho - 2%
South Dakota - 1%
Wyoming - 0%

Want to see where your state measures up?

Key Healthcare Election Points

No matter what your political persuasion, it’s clear that both sides do agree on one thing: Healthcare is one of America’s great strengths, yet one of its biggest challenges.

In light of the upcoming election, we provide this overview of key healthcare points in each candidate’s platform. 

Obama’s Health Care Record

Medicare, Medicaid and the ACA health law will continue to be hot topics this presidential campaign season. Kaiser Health News (KHN) has assembled a comprehensive resource page to help track President Barack Obama’s health policy record from his 2008 campaign positions to the enactment of the health law and his proposals to control federal health care spending.

Obama on Medicare and Medicaid:

• Obama repeatedly mentions provisions in the 2010 health law that aim to expand coverage and bring down costs in so-called entitlement programs. The law’s approach includes the expansion of Medicaid; the creation of the Independent Payment Advisory Board (IPAB), accountable care organizations (ACOs), and other payment pilots and demonstration projects to reward providers for delivering quality—rather than quantity—of care; and various cuts to Medicare providers and insurers. The administration has made clear that it is willing to go beyond the changes included in the law, particularly in the Medicare program, to ensure its solvency.
• The administration proposed additional cuts in its fiscal year 2013 budget proposal, including reducing Medicare spending by $302 billion over 10 years and Medicaid spending by $56 billion over the same period.
• The administration has opposed Republican proposals to turn Medicaid into a block grant for states.
• Obama has strongly opposed Republican proposals to change Medicare for future beneficiaries (people currently 55 or younger) into a defined-contribution program, in which they would receive a set amount of money each year to buy health coverage, rather than the program’s current defined-benefit design.

Obama on health reform philosophy:

• Among the key provisions of 2010 health law is a requirement that nearly all Americans obtain health coverage, a marked expansion of the Medicaid program, the creation of health insurance exchanges and a collection of consumer protections including bans on pre-existing condition exclusions.
• His reform proposal included a requirement that all children have health insurance, and that most large employers either offer employee health benefits or contribute to a new public program. He also advocated expansions for Medicaid and CHIP. He initially opposed the individual mandate.
• During the 2008 campaign, Obama advanced a proposal for a refundable tax credit to help small businesses buy health insurance for their employees. The 2010 health law creates a tax credit for small businesses (fewer than 25 employees) that provide health coverage to their workers.
• He has consistently supported proposals to increase transparency related to health care costs and quality, such as the health law’s medical-loss ratio requirement and requirements to collect and report on health care quality measures such as preventable medical errors, hospital-acquired infections, and others.
• During his 2008 campaign and later as part of the health law, Obama advocated for comparative effectiveness research to help physicians and patients make health care decisions.

Obama on the health care marketplaces:

• Obama has opposed medical liability tort reforms that impose federal caps on jury awards in malpractice cases. However, his administration has launched a Patient Safety and Medical Liability Reform Demonstration program to help states test new ways to improve patient safety, reduce the incidence of frivolous lawsuits, and bring down the cost of liability insurance premiums.
• He has supported the re-importation of prescription drugs from other developed countries. 

(Source)

Mitt Romney On Health Care

The state health reforms overseen by Mitt Romney while he was governor of Massachusetts have received significant attention throughout this campaign. His health policy record goes beyond this state law to include a range of hot-button issues—from the future of the federal health law to plans to revamp Medicare and Medicaid costs as well as a range of market-based initiatives .

On Massachusetts Health Reforms, Romney:

• Was a key player in the effort to reform Massachusetts’ health care system. Before his election as governor, he campaigned on a health overhaul plan.
• After his term as governor ended, he cited the 2006 state health reform law as a point of pride, but has since distanced himself from it because it is often considered a prototype for the ACA law, an assertion he rejects. The Massachusetts law includes the creation of an online insurance exchange known as the Health Connector, as well as fines against businesses with more than 10 employees that don’t offer health insurance plans and an individual mandate regarding purchasing health insurance.
• Defends Massachusetts’ individual mandate because it was a state-level decision rather than a federal decision.
• Advanced a managed care plan for seniors who are eligible for both Medicare and Medicaid.
• Was silent on a 2005 proposal to extend health care benefits provided by the state government to same-sex couples.

On Medicare & Aging, Romney:

• Favors Medicare reforms that would give future beneficiaries a “defined contribution” or “premium support” and allow them to choose between private and traditional plans.
• Maintains that seniors already enrolled in Medicare, or those nearing retirement, would not be affected by his plan, which also would retain a fee-for-service option.
• All plans would have to offer coverage at least comparable to what Medicare provides today, though premiums for “traditional” coverage would rise if private companies can provide the same services for less. Critics say that capping the government’s contribution would likely mean that beneficiaries’ costs would increase.
• Backed the December 2011 Medicare proposal by Rep. Paul Ryan, R-Wis., and Sen. Ron Wyden, D-Ore.
• Supports the notion that wealthier seniors should pay more toward their health coverage and lower income seniors should receive a higher subsidy.
• Wants to publish a yearly federal balance sheet to help people understand the impact of entitlement spending on the budget and economy.

On The Health Care Marketplace, Romney:

• Wants to strengthen high-deductible health savings accounts by allowing consumers to use them to pay insurance premiums.
• Supports caps on non-economic damage awards in medical malpractice lawsuits and funds for states to develop other ways to deal with the liability issue, such as health care courts.
• Urges restricting federal regulation of health care insurance, although he supports limited rules to bar insurers from denying coverage to those with preexisting conditions when they have had coverage for a specified period of time.
• Supports “co-insurance” plans, in which consumers pay a fixed percentage of the cost of their care.
• Says insurers should be allowed to sell their products across state lines.
• Endorses ending “tax discrimination against the individual purchase of insurance” and has suggested allowing tax deductions for people who obtain health insurance on their own; also favors allowing individuals and small businesses to join together to buy insurance.
• Wants to issue “Consumer Reports”-type ratings of insurance plans.

On Health Reform Philosophy, Romney:

• Says he would allow states to opt out of the federal health law and encourage Congress to repeal it.
• Believes that “each state should be able to fashion their own program for the specific needs of their distinct citizens,” and that states are the “laboratories of democracy.”
• Maintains that “market dynamics” such as increased competition, provider performance ratings, cost comparisons for procedures, co-insurance and lowering the number of uninsured will improve the health care delivery system.
• Endorses efforts to find an alternative to the fee-for-service payment model.

On Medicaid, Romney:

• Opposes the health law’s expansion of Medicaid coverage to as many as 17 million people.
• Supports Medicaid block grants to allow states to use capped federal contributions to run the program with more flexibility.
• Would limit federal standards and requirements on private insurance and Medicaid coverage.
• Favors reducing the amount of money the federal government spends on Medicaid.

(Source)

View here to read AARP’s October Bulletin interview of President Obama and Mitt Romney

Does Public Reporting Really Lead to Better Care and Consumer Choice?

What is it?

Public reporting is an approach to address quality and cost in the health care system by providing consumers, payers, and health care providers, such as doctors and hospitals, with information regarding the performance of these providers and insurance plans. It can include such tools as “report cards” on hospital performance, including the information found on Medicare’s Hospital Compare website. Public reports can make available the comparison of costs, quality (such as rates of hospital acquired infections), and how satisfied patients are with service.

Public reports more and more are being developed and used by a range of players, including federal, state, and local governments; hospitals and other health care institutions; professional associations; health insurance plans; employers; and consumers. The enactment of the Affordable Care Act of 2010 created a new context for these initiatives by creating a national policy for quality improvement, including through public reporting.

Federal activities: Two federal agencies within the HHS share primary responsibility for these activities: AHRQ and CMS. AHRQ supports research and works with public and private stakeholders to develop quality measures, report aggregate national- and state-level data, and conduct research on the science of public reporting. It does not, however, report measures at the provider level.

CMS collects data on performance measures from providers participating in the Medicare, Medicaid, and Children’s Health Insurance Program. CMS posts comparative provider specific information about hospitals, doctors, nursing homes, home health agencies, and kidney dialysis facilities at www.healthcare.gov. The most information reported at the national level is for general hospitals (www.hospitalcompare. hhs.gov). Since 2005 this site has reported on quality measures focusing on heart attack/failure pneumonia, and surgical care for all acute care hospitals. This website also includes measures developed from patient surveys in such areas as communication with doctors and nurses, responsiveness of hospital staff, pain management, cleanliness and quietness, and instructions about medications and discharge.

New requirements under health reform: With the inception of The Affordable Care Act (ACA), HHS Secretary Sebelius was directed to establish a national tactic for quality improvement that includes public reporting of performance information through health care quality websites. CMS and AHRQ are required under the law to organize multistakeholder groups and develop performance measures tailored to the needs of “hospitals and other institutional health care providers, physicians and other clinicians, patients, consumers, researchers, policy makers, states, and other stakeholders.” The Secretary must issue quality improvement reporting requirements for employer group health plans, including self-insured and individual plans, as well as for qualifying plans in health insurance exchanges. Health plans will need to report on their quality improvement activities regarding coverage benefits and provider reimbursement structures that: improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, and implement wellness and health promotion activities.

(Source)

The Issues

Although the concept of public reporting has wide support, its implementation has not always been met with approval—and there is at best mixed evidence about the degree to which it has sparked changes within health care or been used widely by consumers.

The optimists: Advocates of public reporting believe that it helps consumers make informed decisions when choosing among providers and health plans, and guides purchasers when selecting insurance plans. Reporting can also assist primary care providers choose specialists for patient referrals. Providers and health plans, in turn, are motivated to improve their performance to protect their reputations and the demand for their services. Lastly, publicly reported information may also be useful to policy makers when assessing system performance and value.

Causes for concern: Skeptics of public reporting have a number of concerns, including the accuracy and dependability of the information within the reports. The costs related with collection, analysis, and distribution of data can be high, especially for providers who do not fully use EHRs. There is also potential for unintended consequences that could result from providers “fixing” report card scores, for example, by refusing to treat patients with serious conditions that might negatively impact their ratings. There is a risk of misinterpretation by consumers who may not understand the terms used or whether high or low rates reflect good performance.

Both supporters and critics acknowledge the need to address many issues with public reporting. These include choice of performance measures, data collection and system capabilities, formatting and content of reports, education and outreach to promote use of the information, and evaluation and continuous refinement to make sure the original reporting objectives are being achieved.  Providers are especially concerned that public reports fairly and accurately reflect their performance, and not things that are beyond their control, such as the risk profile of a patient population. Payers are challenged to stay abreast of the latest quality measures being used by all industry stakeholder groups, including individual states, NCQA, NQF, Medicare, Medicaid, and CHIP. Both payers and providers must evaluate and implement clinical and quality analytic IT applications and management processes that enable them to collect quality data, analyze it, and make effective decisions.

Consumers and information: One of the main concerns associated with public reporting is increasing its use by consumers and improving reports’ usefulness in helping them make informed decisions among health care providers. In general, consumers’ use of public reporting is low.

A 2008 poll from the Henry J. Kaiser Family Foundation found that 30 percent of Americans said they saw information comparing the quality of different insurance plans, hospitals, or doctors, but only 14 percent reported having used such information.

The unsurprising conclusion was that consumers were more likely to be confused than informed. Much remains to be done to make public reports accessible, understandable, and relevant.

What’s Ahead?

Policy makers have an opportunity to change the landscape of public reporting by taking advantage of advances in measurement, data collection, and health IT to deliver a more consumer-centered, and meaningful report card. Overcoming the constraint of limited public funding, and achieving the acceptance of providers, is critical to realizing future success.

(Source)

Other Related Articles:

Health Affairs Feb 2012

Patient-Centered Outcomes Research Institute (PCORI) 

National Quality Forum: Final Report on Input on Measures Under Consideration by HHS

ACOs – “Just Say No”?

The Centers for Medicaid and Medicaid Services’ (CMS’) deadline for comments on the Accountable Care Organization (ACO) rules closed on June 6, and since then, there have been many dynamic discussions on the topic. From the many opinions, publications, and presentations we have read and heard, the majority opinion seems to be that ACOs are definitely not for everyone; in fact, they may be only for a very small percentage of providers.

Our summary of notable comments:

1. According to Pillsbury health law practice attorneys David Main and Linda Kotis, 17 major health systems have significant concerns with the draft rules. In fact two health systems that were “inspirations” for the ACO model, Geisinger and Intermountain Health Care have said they do not plan on developing ACOs. What are main concerns of these health systems? First, they believe beneficiaries should be assigned to ACOs prospectively so that providers can know up front the patient population they will be caring for. Second, they are concerned the start-up costs are too expensive, and the shared savings rates should be adjusted so as to account for the exact number of enrollees.

   Third, the total number of proposed quality measures (currently 65) is too many. A broad industry consensus with respect to the number of quality measures (as voiced by provider, hospital, payer and think tank groups) is that 65 measures are just too many, and starting with 32 would be a better option.

 

2. A recent MedeAnalytics analysis focuses on “…leading healthcare constituencies’ recommendations on the key drivers of the ACO business model”. Key comments included: 

 

• a. AHA, AMA, and MGMA: Eliminate the CMS withhold rate (25%) applied to any earned performance payment for years 1 and 2.
• b. With respect to the shared savings rate for ACOs tracks 1 and 2 (proposed at a maximum of 50% and 60% respectively), the overwhelming industry consensus was that this should be raised to 60 - 80% (track 1) and 70 – 90% (track 2). I tend to agree – ACOs are taking on a significant risk given the estimated start-up costs. Their compensation in shared savings needs to better reflect this.  As for what the “tracks” are (from CMS’ website): “CMS is proposing to implement both a one-sided risk model (sharing of savings only for the first two years and sharing of savings and losses in the third year) and a two-sided risk model (sharing of savings and losses for all three years), allowing the ACO to opt for one or the other models”.
• c. Comments regarding the minimum savings rate (MSR). Per CMS: The MSR “…is a percentage of the benchmark that ACO expenditure savings must exceed in order for an ACO to qualify for shared savings in any given year”. There is consensus here that a standard, flat MSR of 1-2% should be established for all ACOs, rather than the sliding scale as proposed by the current CMS rules.

 

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