Steve Wiggins has seen a thing or two in his more than three decades as a healthcare entrepreneur. His Oxford Health Plans introduced “pods,” a precursor of the Accountable Care Organization and he led HealthMarket, an early player in the consumer directed health plan space. He’s carried the same themes into his current role as founder and Chairman of Remedy Partners, the leader in Medicare’s Bundled Payments for Care Initiative (BPCI).
As you’ll hear in this podcast, Steve’s a big believer in bundles, offering them as a proven solution for a large portion of the healthcare dollar, within almost any healthcare financing framework from traditional commercial coverage to Medicare for All.
Here’s what we discussed:
(0:18) What is a bundled payment? How does it relate to other new approaches like ACOs?
(3:05) Did bundled payments start in Medicare rather than the private sector? If so, why?
(6:52) How well has BPCI worked? What does the future look like?
(11:01) How do episodes and bundles tie in more broadly? I often hear that chronic care or end of life care are the big cost drivers, not episodic care. Can those statements be reconciled?
(15:10) How should we think about bundled payments and related topics playing into the campaign, or should we just give up on that?
(19:14) You’ve founded quite a few healthcare companies over your career. How does this Remedy compare?
(21:41) How do you expect the company to evolve in the next few years?
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.)
Targeted Medicaid buy-in: Medicaid-style coverage to those ineligible for Medicaid, Medicare, or the Obamacare marketplace. The state would subsidize premium costs
Qualified health plan public option: A variant on the program originally proposed in Obamacare, with coverage on the marketplace in partnership with an insurer
Basic Health Program: An Obamacare option already
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.
“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.
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.
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”
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