Category: Health plans

Medicaid Buy-In: A sensible approach for coverage and cost

published date
January 23rd, 2019 by
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Show me the coverage!

The term ‘Medicare for All’ is being bandied about as the campaign for the Democratic Presidential nomination gets underway. Declared and potential candidates are warming to the idea.

It’s easy to see why:

  • After years of trying to defend complex, compromised Obamacare from GOP rhetorical attacks and legislative and administrative undermining, Democrats are going with a program that is popular and well funded
  • Medicare especially appeals to the middle-aged and older population, who tend to vote. There’s no stigma attached to it
  • It could be funded and implemented as a sweeping program at the federal level, which is ideal for a Presidential candidate to talk about.

However, I’d much rather see attention turn to continued expansion of Medicaid, specifically by offering people the opportunity to “buy in” to Medicaid coverage. This has real advantages:

  • It’s the prices stupid,” we have been told since 2003. Price, not utilization, is the main reason the US spends so much more than other countries. By design, Medicaid puts the squeeze on costs through lower reimbursement rates
  • Medicaid has provisions to squeeze drug prices, too, something Democrats and Republicans favor
  • Medicaid coverage is more holistic than Medicare. It includes programs to address social determinants of health, and is suitable for younger people including parents and children
  • Medicaid is a partnership between the states and federal government, enabling individual states to craft solutions that fit their specific populations

Several states are already looking at Medicaid expansion as a way to address their specific issues. For example, New Mexico (a purple state) is getting serious about further use of Medicaid. The state has some distinctive characteristics:

  • Medicaid is by far the largest player already, covering 40% of the population
  • The uninsurance rate remains stubbornly high at 9%
  • There are many undocumented and mixed status families who are shut out of the current coverage system

New Mexico is studying four approaches. (You can read the assessment here.)

  1. Targeted Medicaid buy-in: Medicaid-style coverage to those ineligible for Medicaid, Medicare, or the Obamacare marketplace. The state would subsidize premium costs
  2. Qualified health plan public option: A variant on the program originally proposed in Obamacare, with coverage on the marketplace in partnership with an insurer
  3. Basic Health Program: An Obamacare option already
  4. Medicaid buy-in for all: An off-marketplace program available to anyone except Medicare eligibles

The analysis leads me to the idea of starting with Option 1 as a trial run for Option 4. The advantage of Option 1 is that it doesn’t require federal approval, would bring uninsured people into the system who are currently discriminated against, and provide a test bed for further expansion. It would not disrupt the current market by drawing away healthy people, because it is only open to those currently outside the system.

Option 4 could come into force after the 2020 election, when the federal environment is more favorable and once New Mexico has learned from its initial experience.

Sometime down the road, an even more radical version would shift everyone into Medicaid. Private health plans would still have a role since everyone could be enrolled in Medicaid managed care. Providers and drugmakers won’t like the compressed reimbursement, but maybe it will encourage them to innovate on efficiency.

All of these proposals can be combined with value based approaches, which enable the efficient, high quality providers to succeed while containing costs and potentially boosting the patient experience and outcomes.

For now, I’d like to see the debate start up as part of the presidential race. Candidates visiting early primary and caucus states should dig in. In Iowa, for example, Medicaid for all is being discussed by local Democrats.

By healthcare business consultant David E. Williams, president of Health Business Group.

Whatever happened to consumer directed health plans?

published date
October 8th, 2018 by
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A sad story for consumers

“Consumer directed health plans” were all the rage in the mid 2000s. The big idea was that if patients had ‘skin in the game’ in the form of greater financial participation in the cost of their care, they would use their well honed shopping skills to find the best deals and thereby drive costs down and value up. Employers embraced the idea, since it could reduce their costs and keep employees happy.

There was a general acknowledgment that patients would need better information and tools to transform into consumers, and there was plenty of optimism that these would be made available.

But now as Kaiser Health News reports (High-Deductible Health Pans Fall From Grace In Employer-Sponsored Coverage) employers are going back to more traditional plans.  There are a few interesting things to note:

  • No one uses the term “consumer directed” anymore. There’s an acknowledgment that this term became a euphemism for cost-shifting
  • Employers tweaking health insurance offerings is not going to solve the healthcare cost problem in this country
  • Employees don’t like the plans and in a tight labor market employers have to abandon them

Kaiser reports that:

Because lots of medical treatment is unplanned, hospitals and doctors proved to be much less “shoppable” than experts predicted. Workers found price-comparison tools hard to use.

Not all “experts” jumped on the consumer directed bandwagon. Back in 2007 I attended the World Health Care Congress where I heard people gushing about the benefits of consumer directed plans. They used employer sponsored 401(k) plans as a model of how employees would take responsibility once offered compelling products, information and customer service from companies like Fidelity and Vanguard.

But as I pointed out at the time in “What if the consumer can’t hack it?” employees had actually done poorly with 401(k)’s, investing too little, choosing low return investments, concentrating their holdings in their own company’s stock, etc. As I wrote:

In my view, 401(k)s are a lot simpler for employees to understand than health care. In a 401(k) you can make one or two decisions and then be on auto-pilot. For example, just contributing the maximum amount and picking a target-date retirement fund is about all that’s really needed. Results can be easily and objectively measured over time and compared with benchmarks. We’ll never be able to do that in health care.

I don’t totally discount the 401(K) analogy but we should at least acknowledge that the 401(k) experience has been far from perfect and that health care is going to be a harder nut to crack.

Looks like I was right.

By healthcare business consultant David E. Williams, president of Health Business Group.

 

Nurse triage lines 3.0. Podcast with AxisPoint Health

published date
July 20th, 2018 by
Anne VanBronkhorst, SVP of AxisPoint Health

Nurse triage lines have gone through three phases of evolution. In phase 1 they were implemented to ‘check the box’  for member education, phase 2 brought “demand management” to keep patients out of the emergency room, and now in phase 3 health plans are creating a gateway to innovative programs and services.

In this podcast interview, AxisPoint Health SVP, Anne VanBronkhorst and I discuss:

  • (0:14) Why payers offer nurse triage lines in the first place
  • (1:37) What kinds of issues they handle and how popular they are
  • (2:50) How payers measure success
  • (3:56) How to stand out in a crowded field
  • (4:58) Examples of innovative services for which nurse lines are a gateway
  • (6:00) The role of telehealth as a replacement or complement
  • (6:53) What results AxisPoint Health is seeing with its customer base
  • (8:10) The definition of emergency department “redirection rate”

By healthcare business consultant David E. Williams, president of Health Business Group.

Preparing for value based payments. Podcast interview with MediQuire CEO Emily Chen

published date
June 18th, 2018 by
MediQuire CEO Emily Chen

Despite all the noise and dysfunction on healthcare in Washington, DC, the move toward value based payments is continuing apace. But providers and payers continue to straddle the fee-for-service and value-based worlds, slowing and complicating the transition.

MediQuire helps providers and payers measure, improve and get financial reward for improvements in performance and patient outcomes. In this podcast interview, CEO Emily Chen and I discuss:

  • The current state of affairs in value-based payment
  • How the value-based movement has changed (or not) since the new administration arrived in office
  • The key capabilities needed for success
  • How MediQuire helps
  • What the future holds

By healthcare business consultant David E. Williams, president of Health Business Group.

Massachusetts healthcare turmoil: I’m quoted in the Boston Globe, Herald and CEO Magazine

published date
June 13th, 2018 by

I’m always happy to speak with the press to provide my take on healthcare business and policy. In the last few days I’ve been quoted in a few outlets:

Today’s Boston Globe: In a sudden departure, Harvard Pilgrim CEO resigns amid questions about his behavior

Harvard Pilgrim and Partners each said Tuesday that Schultz’s resignation does not affect their discussions about a possible merger.

But David E. Williams, a Boston health care consultant, predicted the leadership change at Harvard Pilgrim would slow any other major moves by the insurer.

“I think it reduces the chance that a deal will happen, especially in the near term,” Williams said. “The Harvard Pilgrim board can’t deal with two major things at once. Partners will want to wait and see if something else shakes out at Harvard Pilgrim.”

Today’s Boston Herald: Harvard Pilgrim CEO resigns over ‘behavior’

Neither Schultz nor a company spokeswoman would comment on the nature of his behavior, or whether he is receiving any severance payments.

“I think the board is likely to be sensitive to that topic here,” said David Williams, president of Health Business Group. “Any expense is going to be borne in some ways by the customer.”

Yesterday’s Boston Globe: Beth Israel and Lahey say they want to learn from missteps in earlier merger

Beth Israel Deaconess and Lahey do seem to have much in common. Both have flagship medical centers and a network of community hospitals. Both are considered high-quality, and they have lower costs compared with the region’s largest hospital network, Partners HealthCare. On their own, both have struggled to compete with Partners, which includes the renowned Massachusetts General and Brigham and Women’s hospitals.

“There’s a decent amount of compatibility and similarity,” said David E. Williams, president of Health Business Group, a Boston consulting firm. “BI and Lahey spent a lot of time getting to know one another and making sure that this is a good fit.”

The current edition of Chief Executive: Athenahealth CEO Jonathan Bush resigns: Avoiding a similar fate

In both cases, Sonnenfeld says the boards didn’t have the fortitude to stand up to the attacks. David E. Williams, president, Health Business Group in Boston, similarly seen this scenario play out before where a founding CEO is ousted by investors.

“It actually usually happens at an earlier stage than what you’re seeing here. What’s so noticeable here is that [the CEO] has been involved with the company for a long time and is a large publicly-traded company,” Williams says.


By healthcare business consultant David E. Williams, president of Health Business Group.