Heathcare

Limited vs. Premium

Forget “Medicare for All”.

The easiest way to think about fixing the healthcare system is to use the framework for reconstructive vs. cosmetic coverage.

Three words are used to evaluate whether something is covered or not: Bad – Good – Better. Here’s how it works:

1/ Reconstructive Services: [Bad to Good]

Reconstructive services focuses on health improvement from bad to good. [ie: reconstruction following mastectomy vs. breast augmentation.] The idea is that the service restores the body to “expected” function or appearance. The same concept can and is applied in coverage decisions for any body part or core function now in government programs. It’s limited coverage to keep people in good health.

2/ Cosmetic Services: [Good to Better]

Cosmetic services which focus on improving appearance or more broadly, services that improve quality of life aren’t covered. Anything that extends “expected function” isn’t necessary to sustain life. However, those services tend to enhance the quality of life. A good example is fertility services that are now an option for some commercial plans.

Of course, there would still need to be safeguards because some in the industry have a misguided understanding of capitalism.

Limited vs. Premium

It’s an easy concept for Americans to grasp limited vs premium coverage. And according to the Koch Brothers, there is more than enough money in the system now to provide limited coverage for all. While also giving Americans the option to purchase richer premium benefits.

Doubling Down

Why are Americans doubling down on a broken healthcare system?

The current healthcare system is commonly referred to as broken, it’s rife with fraud and abuse, it has little transparency – yet we expect people to act as consumers.

Here’s just a few clips from Axios that has to make you wonder.

1/ Both Democrats and Republicans support Medicare Advantage, so the enrollment wave likely won’t subside in the near term. But there are still deep concerns about insurers gaming the program.

2/ The entire Medicare Advantage industry — estimated to cost the federal government $250 billion in 2019 — remains under the microscope for gaming the payment system. Dialysis chain DaVita agrees to pay $270 million to settle allegations of fudging claims billed to Medicare Advantage plans.

3/ Getting an unexpected bill for thousands of dollars is a gut-level problem. Yet that problem is a product of the health care system’s complexity, and every potential solution runs into roadblocks: from an industry that wants to protect its profits; or skepticism from policy experts; or political opposition.

4/ Balance billing is especially common for emergency-room care, where patients are often in no position to inquire about their insurance networks.

5/ Putting a stop to balance billing requires shifting the cost to someone else, or reducing the size of the bill, or both.

Thoughts?

 

The definition of insanity is doing the same thing over and over again, but expecting different results. ~Albert Instein

 

 

 

Millennials+Healthcare

Millennials may be rejecting the ACO model.

As prices for comprehensive health insurance increase, millennials seem to prefer on demand service purchased at time of service [aka: fee for service].

Primary care physicians work as the coordinator and gatekeeper in the ACO model. They care for, triage and refer patients to specialists as needed.

However, new reports indicate that most millennials don’t have a primary care physician. Instead they seek care on demand from walk-in clinics and urgent care centers as needed. Both are fee for service business models.

Millennials seem to be cost conscious healthcare consumers that will likely engage in care decisions and explore self-care solutions over traditional healthcare.

What we expect from millennials in 2019:

1/ Many millennial purchasing health insurance on the exchanges will purchase the Copper Plans over comprehensive coverage.

2/ They will continue to use the healthcare system as needed and pay on a fee for service basis.

3/ They will leverage technology to the fullest extent possible to manage their health, direct their care and store their health records.

What’s the impact to the exchanges?

The cost of comprehensive coverage is going up. Reportedly, the population covered is again using more healthcare expenses than expected.

The concern about the viability of the ACA comprehensive insurance plans seems to be playing out as many expected.

Post: Cost of Healthcare

Lower healthcare costs or jobs?

There is enough evidence now that the cost of healthcare in the US is driven by the fragmentation and the adverse demographics.

1/ Medical supplies cost healthcare providers 30-40% of their revenue and the cost of supplies are substantially higher than other developed countries. For example:

– Pharmaceuticals in the US cost 3x more than Britain and and 4x more than Canada.

Medical Devices cost 2 – 6x more than other first world countries.

2/ Billing and collections for services provided to patients cost healthcare providers between 6-12% of their revenue due to the number and complexity of contracts with insurers.

3/ The fragmentation in the payer market results in the coverage and  pricing variability in healthcare services that many American find confusing and alarming.

The increase in the cost of healthcare has returned to pre-recession levels of 4% which is largely driven by demographics:

1/ American’s population is aging slower than other developed countries but the 65-and-over population is projected to balloon from 48 million to 88 million by 2050.

2/ According to the CDC, the prevalence of obesity was 39.8% and affected about 93.3 million of US adults in 2015~2016. Obesity is now the #1 cause of cancer in women.

The flip side of is American jobs.

Learn More >

Post: Values

Salesforce is one company that truly walks their talk.

Here’s what I inferred about their values and culture from just one day at Dreamforce:

1/ Environment: Be Mindful. All the nomenclature and products used referenced the environment reminding us all to tread lightly and reduce our impact.

2/ Transparency: Build trust. Customers asked for greater pricing transparency so what are they getting….published rates! Transparency is used to build trust within the organization and with customers.

3/ Inclusion: Be Open. The diversity of the people attending, speaking and customer involvement spoke to their commitment to inclusion and the value of sharing of ideas and lessons learned.

4/ Community: Empower. Community leaders are recognized and empowered to help everyone thrive. After all, big initiatives take a village to do well.

BTW – they are doing some pretty amazing things with their technology too that will help us all blaze new trails. We’ll share more about that in future posts.

Post: Rules

Not all rules are made to be broken.

The healthcare industry has always struggled with patient compliance. Many patients stop taking a prescription or adhering to a care plan as soon as they starting feeling better.

It’s a huge problem for physicians trying to adopt value based care models because non-compliant behavior often results in the need for more healthcare. Under value based care that additional care is provided at the physician’s expense. No wonder physicians are not keen on the new risk models.

Ideally every American should understand how they respond to rules.  However, it’s likely another thing that physicians need to address with patients to increase compliance.

There are 4 responses to rules:

1. Upholders: Uphold all rules both outer and inner.

2. Questioners: Questions all rules and uphold only the rules that make sense to them.

3. Rebels: As the name implies, they resist all rules.

4. Obligators: They are motivated by outer rules but not inner rules.

EMR companies should consider updating Patient Registration screens to capture patient’s rule behavior and to identify the Questioners and Rebels who are less likely to comply with meds and care plans. Rule behavior should also be factored into reporting and payment to avoid penalizing physicians.

 

Post: Fixing Problems

Go slow to go fast.

Most people call us when they have a problem and they are having trouble fixing it. Reflecting back on completed projects, the underlying issues are one or more of the following:

1/ Flawed assumptions: Assumptions are made about what’s causing a problem without checking all the facts.

2/ Timeline: Deadlines to get the project done and the need to get it done overshadows whether it’s the best solution or not.

3/ Perception: People outside the department or discipline don’t understand or don’t care enough to prioritize your needs.

Taking a step back to reassess things is hard but it’s worth taking the time to get it right.

What we know to be true:

1/ People might not understand your needs but that doesn’t mean they don’t care.

2/ Often systems and processes just need to be fine tuned. Fine tuning requires less work than starting a new for your limited resources such as engineers.

3/ Deadlines are sometimes arbitrary. Know whether the deadline is someone’s ideal deadline or a real one and why.

Best Advice: Take the time you need to understand the problem. Developing and implementing the solution will go much smoother and faster.

Post: Self-Care

What do you do afterwork to decompress and recharge your batteries?

It was a ice-breaker question that members of a business group needed to answer as part of their introduction. Almost everyone in the group started with something along the lines of “well I know that I should be exercising” but what I really do is …. guess what they said.

As some of you know, I’ve been trying to get more people working out and living a healthier lifestyle [aka: Hello Workout]. My introduction was last so there was no bias in the responses for what I do or anything that I said.

After hearing everyone’s “confessions”, I almost felt bad introducing myself and sharing a bit about my lifestyle. If you’re wondering, I am a strong believer in regular maintenance whether it’s my car or my body. Both work better when they are cared for properly.

Inspiring, nudging and telling people to workout might not be the right approach. It makes people feel ashamed and it makes people initiating the conversation feel bad. It’s awkward all the way around.

Many in the business group talked about caring for others. There is no shame in caring for others. So maybe the better question is “How do you care for yourself?“.

Words are powerful. Simple changes can make a big impact.

Shame steers people into a life of silence, inactivity, lying and hiding.

~ Harriet Lerner

 

Post: Balance Billing

More regulations or should we fix the payment system?

Years ago, I attended a ABA conference and asked “why don’t we just fix the payment system” rather than add more regulation. I am reminded of that event this morning in reading the KHN proposed options for addressing balance billing.

The proposed solutions are a bunch of new federal and state laws addressing charges and billing practices. Regulation is an important part of protecting individual Americans against corporate wrong doing. However when regulation is used as a bandaid, regulations become part of the problem.

In the case of healthcare, additional cost. High cost is one of the big issues that the industry needs to address in order to make healthcare more affordable.

The problems that need to be addressed are:

1/ Fragmentation: Makes it difficult for patients to navigate and costly to administer.

2/ Network: Not all providers participate in commercial networks which means some patients are exposed to balance billing.

3/ Transparency: Insurers and healthcare providers don’t want their contracted rates shared to enable the consumer.

4/ Current Billing Regs: Healthcare services and products are marked up because everyone needs to be charged the same and there is variability in the contracted rates.

The problems require a more fundamental change.

Universal healthcare

Is it the end of employer-sponsored healthcare or the beginning of employer-driven healthcare?

When I posed this question to my Linked In network, many people viewed the post, some followed up for links to sources but no one commented even though healthcare is top of mind right now for many Americans.

Healthcare is an emotional topic. It’s something that everyone wants and needs but most Americans are struggling to pay for it. The healthcare jobs boom is still going strong which means the total cost of healthcare is continuing to increase. While there doesn’t seem to be a rolling average cost of healthcare per GDP publicly available to see the impact, the math is pretty simple  – more jobs means there is more healthcare being delivered which means more cost.

The total cost of healthcare will not decrease until we curb demand. 

Consumer Driven Healthcare initiatives failed.

Consumer driven healthcare initiatives such as high deductible health plans curbed demand in the short run but resulted in more costly healthcare outcomes. Americans simply couldn’t afford to pay their premiums and the patient portion of healthcare services under those plans. Consequently, they didn’t seek treatment until their health issue became a big problem. In simple terms, big problems cost more to treat. Other consumer initiatives such as pricing transparency never really saw the light of day.

Employer-Driven Healthcare

Employer-Driven healthcare is a new theory and consistent with the Republican trickle down economic policies. The assumption is that if the Republicans can tweak policies enough to get the economy to full employment, every American or at least nearly all Americans will get a job with healthcare benefits. In theory, all employers will offer benefits that are rich enough to ensure timely access to healthcare services.

Some employers are taking initiative to implement on-site and near site clinics, lower deductibles and implement wellness initiatives even though there is a perception that wellness doesn’t work.

There are ways to make wellness programs work better but the key words for an employer-driven healthcare system to work is ALL and SOME. If only some employers offer rich benefits, many Americans will continue to be underinsured or uninsured.

Medicare for All

The idea of “Medicare for All” was endorsed this weekend by former President Barak Obama. The initiative is gaining traction due to the economics and financial condition of Americans.

1/ Healthcare is becoming a bigger portion of the take home pay of low and middle income Americans which means they have less money to spend on housing, food, clothing and other life essentials that affect their health and wellbeing.

2/ The middle class is eroding to the point that it needs to be supported with social wealth-fare spending. Reportedly, $1 in every $7 is now spent to subsidize the middle class.

3/ Republicans are working to privatize Medicare. More health plans are getting into the Medicare and Medicaid business. According to the press release for Oscar Health, it is a more “lucrative” segment. Oscar [co-founded by Jared Kushner’s brother, Joshua] historically sold individual and family plans on the exchanges. Many of the people purchasing policies on the exchanges were sicker and needed more healthcare than expected.

4/ New Medicare Advantage plans are now addressing social determinants and covering many basic living costs. Bankruptcy filings are increasing in the senior population.

5/ Koch brother sponsored study reports “Medicare for All” saves $2 Trillion.

What does this mean for healthcare?

If we just look at the economic condition of many Americans and how the financial strain is impacting their health, it’s clear that we need a new universal healthcare system.

If we consider the changes underway to Medicare and the momentum of the “Medicare for All” movement, it looks like Medicare will be the underpinning of the new universal system. It’s a good thing for you because all or nearly all healthcare providers participate in Medicare, it has well established coverage standards for medical care along with a fee schedule and excludes bad actors from participation.

If we factor in everyone’s deep seated emotions about healthcare, we need a system that offers choice.

What we end up with is a two tiered system offering basic coverage for all Americans and enhanced benefits for those who choose and can afford to purchase additional coverage.

Simplicity wins:

There are plenty of models in other first world countries that can serve as a framework. The key is choosing a framework that simplifies the healthcare system for all to navigate and understand. Not only will it make it easier for all Americans to access care when they need it rather than when they can afford it. It will also reduce the cost. The administrative burden of the current system alone is estimated at 30% of the total healthcare burden in America.