Category: Uncategorized

Public option pops up again

published date
September 23rd, 2016 by
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Where do we go from here?

The so-called “public option” is back on the table. According to Politico there’s a “feud” between liberal and moderate Democrats about the wisdom of such an approach. That’s an overstatement, and really it doesn’t even matter if they are fighting about it or not.

Health insurers have a problem, which is that it’s hard for them to prove that they add value. Does all their utilization management, network development, formulary administration and price negotiation improve cost, quality and patient experience enough to justify the extra administrative costs and hassles they impose on the system? It’s an open question, and one that health plans have a hard time answering convincingly.

Since the Affordable Care Act (ACA) passed, health plans haven’t really had to address this fundamental question. With all the new regulations, marketplaces, and mandates, customers and plans have been busy getting themselves into compliance and learning and testing out the new system. No one has really asked the question about whether we need plans or not.

ACA health insurance marketplaces in some parts of the country are seeing less competition than is ideal as some health plans give up. Aetna gave the feds the middle finger by announcing plans to exit exchanges in retaliation for the government’s opposition to the company’s mega merger plans. The exchanges are fixable but opponents in Congress prefer to let them die if possible rather than fix them. However, this passive aggressive approach to the exchanges could ultimately backfire if it means the government sponsors a “public” competitor to give people choice.

For some, opposition to the ACA is ideological. They don’t like federal mandates, or expanding access to birth control, or they just don’t like Obama. But opposition to the public option is more about business considerations than ideology. Apple wouldn’t be worried if the government started making smartphones, but health insurers are worried about whether they can do a better job than Uncle Sam.

And let’s face it, a government option brings us a big step closer to a single payer system under which insurance companies would essentially be out of business.

Health plans don’t have to worry too much today about single payer or even a public option. Even Senate Democrats can’t agree, so it’s unlikely a public option will make it through Congress. But give it another 10 to 15 years and we’ll see.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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

Health Wonk Review: Back to School Daze

published date
September 8th, 2016 by

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Ah Labor Day! A final blush of summer before jumping back to work and into the school year. Here’s a pretty serious set of posts as you settle back in to the fall routine.

The opioid epidemic

Managed Care Matters tells tales from the front lines of the opioid epidemic. Not pretty. Not pretty at all.

Health Affairs Blog shares insights on the development of a “safe space and medical monitoring to prevent overdose deaths” in Boston. This excellent post describes the observation and treatment facility (which is not a supervised injection facility) and lays out five policy lessons learned to date.

Insurance and the Affordable Care Act?

The Obamacare insurance exchanges are in somewhat rough shape, but as Wright on Health explains, there are some pretty straightforward fixes. Politics (as usual) is likely to get in the way.

If you were somehow under the illusion that Health Care Renewal was a fan of managed care mergers (and for-profit, managed care companies in general) this week’s post should erase any doubt. In fact, it’s a trip down memory lane from the early 1990s formation of Aetna and its merger with US Healthcare to today’s politically motivated withdrawal from the exchanges to retaliate for the government’s opposition to a new mega-merger.

Oh boy. Insurance is about spreading risk, but you have to be pretty darn to big to spread around the expense of a $1 million/month chronically ill patient. That’s what Wellmark is having to do, and InsureBlog says good for them, it’s insurance working the way insurance should.

Ready for the fourth Obamacare open enrollment period, coming up in November? Healthinsurance.org has a guide to what’s new.

Technology and population health

Is that the best we can do?  HealthBlawg does not think health systems deserve credit for leveraging Uber to get people to their appointments. Telemedicine is the way to go, instead.

Population Health Blog, on the other hand, applauds the potential of personalized, tech-enabled approach to diet.

Like HealthBlawg, The Hospital Leader wants to focus on social determinants of health to keep people out of the hospital.

Drugs are pricey

Healthcare Economist describes various value frameworks that can help life sciences companies evaluate and justify the value of innovative approaches.

I made a few new enemies at Health Business Blog with my contention that EpiPen prices may still be too low.

And Health System Ed rounds out the wonkery with a post on drug prices, EHRs, and the Affordable Candidate. Big topics all!

A hopeful finish

Workers Comp Insider shares a firefighter’s miracle: a face transplant after sustaining severe burns.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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

Surprise, surprise! Exchange customers are price sensitive

published date
August 18th, 2016 by

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Uh oh. Another big national health plan, Aetna has decided to pull back from the individual health insurance marketplaces (aka exchanges) deciding they can’t make money because customers are focusing on price, not brand name. The headlines give a sense of it:

Cost, Not Choice, Is Top Concern of Health Insurance CustomersNew York Times

Customers’ Laser-Like Focus on Plan Prices Is Causing Concerns in Health Insurance MarketKaiser Health News

The articles quote insurance executive and experts claiming that “price competition has turned out to be much more cutthroat than anyone expected” and that “people signing up for [broad network, big employer style coverage offered by the big name national health plans] are less healthy –and more expensive to treat– than anticipated.”

Hah!

As I have written before (Good riddance: United finally gives up on ACA marketplaces):

Health plans thinking of competing in the marketplaces should say this to themselves a few times before diving in: “Exchange business is price sensitive business. If we can’t compete on price we might as well stay home.”

The exchanges do have problems. For example, insurers are limited to charging older people 3x what they charge younger ones, whereas actuarially it should be more like 5x. The problems are eminently fixable, except that opponents of the law still want it to fail. As for Aetna, specifically, it seems they are retaliating against the feds after the government announced its opposition to Aetna’s merger plans.

Nonetheless, why would we measure the success of the exchanges by whether the big, fat brand name health insurers can make money? Exchanges allow customers to compare plans on an apples-to-apples basis and they are deciding that there’s no big reason to pay higher prices. Some health plans are thriving on the exchanges by negotiating hard with providers (Medicaid oriented plans like Centene and Molina) or by having local market knowledge and density (Blue Cross Blue Shield of Florida  –which has almost as many Obamacare customers in Florida as Aetna has in the whole country).

Here’s the real problem for health plans: they have largely failed to demonstrate that they add significant value. Aetna, United and their ilk don’t accomplish a lot compared with Joe’s health plan. And even when they do add value, they still add large administrative costs and inefficiencies to the system that may outweigh their benefits.

The Affordable Care Act has actually given health plans a new lease on life, by herding in new groups of individual customers and by imposing whole new sets of standards and rules. Health plans fear a so-called “public option” because it could reveal that commercial plans don’t bring much. And as unlikely as it seems now, it’s quite possible that the failure of commercial plans to demonstrate value could lead us eventually to a single-payer system.

Ideally, I’d rather not see single payer. If some of the plans were a little more ingenious and capable they could actually prosper in the exchange business, in ways that would boost their success in the commercial market as well. In particular, there are opportunities to better manage the way specialty care is delivered and paid for, by emulating the approaches used by the most efficient and innovative specialists. This would drive down the overall cost of insurance and improve care for patients.

Plans could also be more creative and resourceful in helping providers take risk or even full capitation.

Meanwhile, Aetna will struggle to grow. After all, the US is moving toward marketplaces and government coverage. Aetna, not Obamacare or the exchanges, may turn out to be the big loser here.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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

 

Medicare and the end of racial segregation in healthcare

published date
August 12th, 2016 by

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The story of how Medicare ended segregation in healthcare settings is a pretty remarkable one. Temple University Professor David Barton Smith’s  The Power to Health: Civil Rights, Medicare, and the Struggle to Transform America’s Health Care System brings the events of 50 years ago to light.

“In four months [government bureaucrats] transformed the nation’s hospitals from our most racially and economically segregated institutions to our most integrated,”he writes. “A profound transformation, now taken for granted, happened almost overnight.”

In the early 1960s healthcare was even more segregated than the economy as a whole. In Southern states there were separate hospitals for whites and blacks; there were separate waiting rooms in physician offices, with black patients seen last.

The 1964 Civil Rights Act prohibited racial discrimination in programs that received federal funds. But when Medicare was enacted in 1965, no one really took the provision seriously. After all, the Brown v. Board of Education decision a decade earlier had not led to rapid progress in school desegregation.

And yet Wilbur Cohen and a small team from the Social Security Administration and Public Health Service put together rules that prevented hospitals that discriminated from receiving Medicare funding. Learning their lesson from the failure of Brown’s “all deliberate speed” language, which had let school segregation fester, the team decided to enforce the rules from day 1.

Since hospitals couldn’t afford to forego Medicare, desegregation was achieved in a matter of months. Imagine that.

Image courtesy of podpad at FreeDigitalPhotos.net

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