Health Business Blog

Health plans have realized for quite some time that the widespread practice of scheduled C-sections and induced labor before the end of 39 weeks of pregnancy is an expensive proposition. Even babies born a week or two early have a significantly higher chance of being admitted to neonatal intensive care units, having difficult breathing and experiencing bloodstream infections. Such births are surprisingly common. In 2010 about 17 percent of babies were delivered at 37-39 weeks without a medical reason.

The Leapfrog Group. March of Dimes and American College of Obstetricians and Gynecologists has taken the initiative to try to address this issue by getting the word out and having hospitals set performance. They’ve decided there’s no reason for hospitals to have more than 5 percent of births in the early delivery/no medical reason category, and have asked hospitals to report their results.

The good news is that it seems to be working. The rate dropped from 17 percent to 14 percent from 2010 to 2011, according to newly published figures.  More than 700 hundred hospitals voluntarily reported their rates to Leapfrog. It’s fascinating to scroll through and see the variability. A good number of hospitals are at or below the 5 percent target while some others are way up in the 20 to 30+ percent range. That can’t be random variation.

So why are these medically unnecessary early births occurring? Childbirth Connection has a good summary:

• Women’s lack of knowledge about the risks, benefits, and appropriate use of labor induction
• Lack of shared decision making
• A perception among women, caregivers and hospital administrators that induction is convenient and cost-effective
• Frequent use of screening tests at the end of pregnancy, despite lack of evidence of improved outcomes
• A belief that the best way to manage risks in pregnancy is to deliver the baby

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Hospitals in Northern New Jersey (and no doubt elsewhere) are a lot more likely these days to collect patient payments upfront rather than waiting to bill and collect later. Although it sounds a bit cold-hearted, it’s not a bad idea if done properly. In particular if a hospital can determine upfront what a patient’s co-pay or deductible is, it’s reasonable to try to collect it when the patient is there. That avoids the substantial costs of collection and dramatically boosts the percentage of patients who pay. In theory it may also lower the rates a hospital can accept from insurance companies, which ultimately could translate to lower premiums when there is less cost shifting from those who don’t pay to those who do.

As I write this I’m well aware of the problems such a policy can cause including deterring people from needed care, increasing anxiety at a time of heightened stress, delaying clinical triage, and getting the amounts owed wrong. The biggest issue is the first one –for example even an insured patient may not have the $1000 or $2000 co-payment or deductible on hand. But that also shouldn’t necessarily be the hospital’s problem. Rather that’s an issue for the plan sponsor (often an employer), state or federal policy.

I do worry about big institutions such as hospitals acting inappropriately aggressively toward patients, but this problem already exists with post-treatment payments. If anything, taking care of the bill up front may reduce the interest and fees that can pile up, especially when a collection agency gets involved.

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Newt Gingrich has positioned himself as the “true conservative” in the Republican Presidential primary. And last night he trumpeted his support for the Medicare Part D drug benefit program, which was spearheaded by Republican majorities in Congress  and signed by Republican President George W. Bush. Sorry, but supporting Part D and being a conservative don’t go together.

Gingrich said he supported the measure because it didn’t make sense to pay for kidney dialysis and open heart surgery but refuse to pay for insulin or heart medicine. That’s logical enough.

But Medicare Part D was and still is a fiscally reckless program. Unlike Medicare Part A (hospital insurance) which is 84% funded by a dedicated payroll tax, Medicare Part D has absolutely no dedicated revenue source at all, beyond the very modest premiums paid by beneficiaries! And when the prescription drug benefit was put in place there were no attempt to offset the added costs by cutting elsewhere.

In other words, the government’s Medicare Part D costs of about $50 billion per year go straight to expanding the federal deficit.

Worse yet, Medicare Part D is available to any Medicare eligible person regardless of income. That means many seniors who don’t need another handout from the government are getting one.

You can’t be a conservative and be in favor of Medicare Part D. So, which is it, Newt?

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The Wall Street Journal devotes its Journal Report section today to pro/con debates on six health care issues. Five are reasonable and either timely or timeless: Should everyone be required to have health insurance? Should healthy people take cholesterol drugs to prevent heart disease? Should every patient have a unique ID number for all medical records? Can accountable-care organizations raise quality while reducing costs? Should patents on pharmaceuticals be extended to encourage innovation?

But one –Should physicians use email to communicate with patients?– should have been settled more than 10 years ago. It’s almost a joke that it’s still being asked, and at first I thought the question was about whether doctors and patients should still be using email as opposed to whether they should be trying it for the first time. Dr. Joseph Kvedar of the Center for Connected Health trots out all the well-rehearsed arguments that have been used over the past 15 years to encourage patients to use electronic messaging with their patients. And I agree with it all:

• Privacy concerns are overblown and not unique to electronic media
• Not every interaction needs to be in-person
• Doctors won’t be inundated with messages, despite their fears
• Patients feel more connected to their physicians when they can reach them online
• Electronic communications promotes efficiency
• Liability issues are mino

Dr. Sam Bierstock, founder of a health care-IT consulting firm, takes the con side of the argument. He’s probably an intelligent guy and knowledgeable about health IT. I’m guessing he jumped at the chance to write a piece for the Journal (and even have his picture published) –even if it meant taking a silly, losing position. Kind of like the Washington Generals, who used to play against the Harlem Globetrotters.

Bierstock concedes that “email can be useful for certain very basic patient-doctor communications” but then lays out a bunch of arguments that aren’t terribly persuasive:

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I find it really strange that dental care is excluded form health insurance, including commercial and government programs. It’s increasingly untenable in my view. Why?

• Neglect of dental issues due to lack of coverage causes higher medical expenses, for example as dental infections spread to other parts of the body
• Hospital emergency rooms are seeing many dental cases (representing as much as 2.7% of ER volume) and are not well equipped to treat the problems, according to USA Today. In any case the expense is high
• Even well-off people with medical coverage often don’t qualify for dental insurance –e.g., because they aren’t part of a group–  and end up paying high fee for service rates to providers rather than benefitting from a plan’s purchasing power and network
• To the extent that we are moving toward a more integrated approach to care and payment (e.g., medical home, accountable care organization) it makes sense to bring the whole body under one roof

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Among the wide array of hyperbolic complaints about health reform, the phrase “government takeover of the health care system” has always struck me as an odd one. It makes it sound as though the government is taking over the means of production, which is far from the case. In researching this post I realized I’m far from the first to make the observation. Actually it was featured as the Lie of the Year for 2010 by PolitiFact.

The government does play a major role in the health care system. It’s a big customer, financier and regulator. The feds own and operate VA and DoD hospitals, and there are various county, city and state facilities, but this is a small share of the total.

Kaiser Family Foundation has an informative piece today (Betting on Private Insurers) that  looks at health care based on who’s managing the benefits. The conclusion: at least 73 percent of those covered are in private insurance arrangements, whether through employer coverage, individual policies, Medicare Advantage or Medicaid managed care. The rest are mainly in fee for service Medicare and Medicaid. And many fee for service Medicare patients have private Medigap and Part D drug plans. If anything, the Affordable Care Act is likely to boost the percentage managed by private entities. More individuals are slated to purchase commercial insurance on their own or through exchanges, and much of the growth in Medicaid will be in managed care.

Providers of health care are overwhelming private and likely to remain so. The government isn’t nationalizing hospitals nor forcing physicians out of private practice.

Sure, it’s arguable that many hospitals are so dependent on Medicare that the government influences them heavily without owning them. But I haven’t heard anyone say the government has taken over the defense industry even though many weapons makers can only sell to the feds.

I think it would be healthy to have a debate about the extent to which government should get more involved in health care delivery and benefit management. Maybe the VA model should be replicated and a public insurance plan be introduced to compete with the private health insurers. But none of this is part of the Affordable Care Act and therefore it’s laughable to frame “ObamaCare” as any kind of government takeover.

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Julie Ferguson of Workers’ Comp Insider hosts the Look to the Future edition of the Health Wonk Review.

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The pharmaceutical benefit management (PBM) industry has apparently decided it’s time to buff its image. A new That’s What PBMs Do campaign has been launched by the Pharmaceutical Care Management Association (PCMA), which counts the big 3 PBMs and a few smaller ones among its members. Some articles speculate that the campaign is in response to scrutiny over the pending acquisition of Medco by Express Scripts. Although it seems a little bit unlikely that CVS Caremark would go along with that line of thinking, the pro-mail order and implicitly anti-drug store message of the materials does bear the handprints of Express Scripts/Medco.

The print ads and video make the following claims:

• PBMs reduce pharmacy costs for employers, unions, and consumers
• PBMs play a key role in the Medicare Part D success story
• PBM mail-service pharmacy improves safety, savings and convenience

Of the six print ads, four focus on how PBMs restrain costs: two are Medicare Part D related and there are one each for employers and employees. Two others focus on mail order: one emphasizing its safety (reduction in medication errors) and another its convenience. The text is quite spare –probably the less said the better, and the ads are dominated by photos of one or two people each. In keeping with PBMs’ end users, the people in the ads are generally on the older side.

The almost three minute long video covers many of the same topics in a little more detail. After a gentle introduction there’s a confusing and meaningless graphic at the 30 second mark showing that “the number of prescription drugs has skyrocketed in recent years.” There’s a bar graph with 1985, 1995, 2001 and 2011 on it. The y-axis is labeled “amount.” I assume this is the total number of SKUs out there including generic medications, but it is curious why it’s thrown in there. Maybe they didn’t want to demonstrate how drug utilization has risen and decided to put out a feel-good innovation message instead.

The video describes how PBMs negotiate discounts with drug manufacturers and retail pharmacies, employees thousands of pharmacists to counsel patients by phone in the privacy of their own homes 24 hours per day, provides home delivery, and uses e-prescribing technology to avoid drug errors. It boasts of PBMs’ role in keeping Medicare Part D costs under control and notes that the states generally don’t use PBMs for Medicaid, even as costs are “spinning out of control.”

On the whole the campaign is accurate. And it probably is a good thing that consumers and policymakers develop an understanding of PBMs. But there are certain omissions and misleading statements. For example:

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As states grapple with growing Medicaid costs in an era of sluggish economic growth and antipathy to taxes, they are very pleased when they find a way to increase benefits to citizens while reducing their own expenditures. I predict many states will follow the example of Washington, which since 2003 has run a program to identify Medicaid enrollees who are eligible for benefits from the Department of Veterans Affairs.

Surprisingly (to me anyway) there are numerous veterans who end up on Medicaid instead of turning to the VA system, which offers richer benefits. For example, some veterans qualify for the VA’s Aid and Attendance Pension, which helps low-income veterans and widows receive long-term care in their home or an institution. Medicaid may attempt to recover costs by going after an enrollee’s estate, while the VA doesn’t. And the VA may also provide a pension for elderly and disabled veterans and their survivors, and a death benefit.

The state of Washington considers its efforts a “win-win” that offers enhanced benefits to veterans while achieving $30 million of cost avoidance for the state (which pays a share of Medicaid benefits but not VA benefits). As the number of people eligible for Medicaid expands under the Affordable Care Act, I’m sure Washington and other states will find ways to achieve even greater savings by diverting potential Medicaid enrollees into VA programs.

I’m completely in favor of this program and believe that veterans should receive all the benefits they have earned. However, as a society we should do more to recognize the full cost of our military policy. Cost accounting for the Iraq and Afghanistan wars should include the long-term VA and other costs of returning veterans, and the state of Washington should also at least acknowledge what the increased impact is on the federal budget. If every state followed Washington’s example, taxpayers would pay more money not less, as any reduction in state spending is more than made up for by increases on the federal side. I’d also like to see unclaimed benefits estimated and publicized.

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Writing in Today’s Hospitalist, Dr. Stella Fitzgibbons offers specific and useful advice to physicians who have to deal with the wishes of a family when a patient can longer speak for him or herself. I’m confident that her approach will yield constructive results in most situations, but I’m uncomfortable with the shortage of empathy and reflectiveness that the article ultimately conveys.

The scenario she introduces is as follows:

[W]hat about a patient who can no longer speak for himself—and family members who either seem unrealistic about the effectiveness of medical treatment or actually refuse to honor his wishes? What about a doctor’s duty to relieve suffering and not provide treatment the patient wouldn’t want ow that does him no good?

To summarize, here are the tactics Fitzgibbons recommends:

• Be sure all the doctors seeing the patient are saying the same thing –so that a doc who doesn’t like to give bad news doesn’t inadvertently give the family the idea that a cure is possible
• Get records from prior physicians –since families may transfer patients from hospital to hospital until they hear what they want
• Present facts and show them CTs. “Make it clear that the patient’s doctors know what is wrong and are not just speculating”
• Bring in a neurologist you trust so “the family can’t claim that he’s unqualified to talk about the prognosis”
• Find a chaplain who will be on your side
• Seek help from legal staff so you can ignore the family’s wishes and use the patient’s advance directive
• Persuade the patient that their “advisor” is less qualified than yours and that their stories of relatives who recovered are irrelevant
• If you think they are acting against the patient’s interests for their own gain, e.g., “they have been paying their own rent with his disability check” –then let the know you’re aware of it
• Stick to your principles since you know you’re doing the right thing for your patient

I don’t know the author and have no reason at all to distrust her motives. But I do get nervous about her level of certainty. In particular:

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