Amy Schectman cut her teeth in state government, where her excellence in writing and thinking got her appointed to key task forces on issues like higher education and prison overcrowding. Over the last decade as CEO of 2Life Communities (formerly Jewish Community Housing for the Elderly), Amy has improved the lives of thousands of older adults with first-rate living quarters and activities.
In the last year, she’s led an unbelievably successful effort to keep COVID away from 2Life.
Amy’s mother and the Gray Panthers were early influences, and she looks back fondly on her summer camp experiences, Johns Hopkins and MIT. She’s charging ahead into the future, with plans to address the middle income market and leverage technology along with the human touch.
A seemingly straightforward story caught my eye last week: all Massachusetts providers are being paid the same, generous fee for COVID-19 vaccine administration (Boston Globe). The fee is essentially identical whether the patient has Medicaid, Medicare, commercial insurance –or no insurance. And it doesn’t matter whether the shot is given in a pharmacy, clinic, community hospital, or academic medical center.
It seems logical and makes intuitive sense to the average consumer. But for those in the healthcare field, it’s pretty radical! After all, reimbursement rates for commercially insured patients are usually a multiple of what Medicaid pays and substantially higher than Medicare. And providers and insurers exert extreme efforts negotiating rates (and then trying to keep them secret). Some providers use their market power to drive harder bargains, and insurers do the same.
Bottom line: Reimbursement rates are all over the map, varying wildly depending on who’s the provider and who’s paying. A 2020 Health Care Cost Institute study provides some detail.
This reality has shaped and distorted the US healthcare system:
Providers avoid Medicaid patients to cherry pick those with commercial coverage
The true cost of Medicaid (and to a lesser extent, Medicare) is obscured by cross-patient subsidies
Providers use their market power to extract higher rates, and generate reimbursement ‘synergies’ by acquiring providers with weaker negotiating positions or reclassifying physician offices as hospital ‘facilities’ that generate their own upcharges
Patients get treated in settings that maximize providers’ margins rather than where it’s best for the patients
Health plans merge to bulk up against provider systems
Health disparities are exacerbated as poorer patients are worth less to providers and get lower priority
Tremendous administrative costs are expended to manage the complexity, exploit the rules and search for those who are bending or breaking them
It’s tempting to think we could reform healthcare payment by using this COVID-19 vaccine approach for all reimbursement. But the vaccine is a special case, because there is a specific, national objective to get as many people vaccinated as quickly as possible to end the pandemic and because vaccine administration is pretty simple. Lots of providers are capable of it, and there are unlikely to be differences in outcomes based on provider experience or setting. Across the political spectrum, there is genuine agreement that we want everyone –including poor people and immigrants regardless of status– to get a shot or even two. And we’re happy for providers to prioritize vaccination by allowing them to make good money doing it.
Those conditions don’t hold generally in healthcare. Still, I am in favor of policies that encourage or mandate reducing the gaps in what providers are paid for the same service. There should be a convergence between Medicaid, Medicare and commercial rates, and reimbursement should not vary so dramatically by provider or setting of care.
New approaches, like alternative payment models, often bake in the fee-for-service biases. They shouldn’t.
It’s counterintuitive: a fourth covid-19 wave is evident even as vaccine rollout accelerates. Conventional wisdom blames it on more contagious variants, pandemic fatigue, and states reopening too fast. There’s truth to all of that, but it overlooks the role that vaccination itself plays.
“As spring comes, people in their 20s are relaxing their behavior and going out to restaurants with their friends,” said David Williams, president of Health Business Group, a Boston management consulting firm. “They don’t have to feel as guilty about infecting them if Ma and Grandma have already been vaccinated.”
It’s actually pretty straightforward. We’ve asked younger people to make severe sacrifices over the past year. A central argument has been that they are protecting their older relatives and others in society, who are at mortal risk if infected. Now that the old are largely protected through vaccination, the argument loses its logic.
Vaccine rollout priority has focused on reducing death and hospitalization. That’s why we started with the elderly. If we wanted to reduce the number of infections, we would have started with the young.
Now that the old are vaccinated, we need to make sure young adult vaccination is quickly ramped up. There should be plenty of vaccine available shortly to do so.
“This is the time when we’re going from scarcity to surplus,” said Williams of the Health Business Group. “People who are eligible are now getting appointments, even if they have to work a bit, and a lot more people are now eligible. It still feels tight. But in the next two to three weeks, instead of waking up at 1 in the morning to book an appointment, you should be able to do at 2 in the afternoon.”
Today’s news that the Pfizer vaccine seems to work well in kids and not pose safety concerns is also great news. We should vaccinate the whole population by summer if at all possible.
For months we’ve been focused on the shortage of COVID-19 vaccine doses. That’s still a problem, but for now the bottlenecks are further downstream. Massachusetts is struggling to get the doses distributed and administered. More than half sit unused. Even if we have 10 million (or a billion) doses we’d still be stuck.
“We’re only using half of what we’ve been given,” said David Williams, president of Health Business Group, a Boston management consulting firm. “It’s not an excuse to say because supplies are slow, we can just sit back. We should assume there’ll be more supply, and we owe it to the citizens of Massachusetts to be ready when it comes.”
It’s a momentous week in Georgia, Washington and these United States. In this special episode of the HealthBiz podcast, Bloomberg Intelligence Analyst, Brian Rye and I discuss the health policy implications of the likely 50+1 Democratic Senate majority. Listen in as we discuss drug pricing, Medicare Advantage, and the public option.