Exchange Insights Courtesy of McKinsey

In May 2014, the consulting firm McKinsey and Co. published a series of articles about consumer behavior on the public healthcare exchanges. Their studies reveal several interesting insights, and I've pulled out a few here to share / comment on (you can find the full suite of articles here.):

• Perceived affordability was the reason most often given for not enrolling by both previously insured and previously uninsured respondents. About 90 percent of all those citing perceived affordability challenges were subsidy-eligible, and among these subsidy-eligible respondents, awareness of the subsidies has remained low. (For example, 66 percent of the April respondents and 65 percent of the February respondents who were subsidy-eligible and who reported that they had shopped but did not enroll because of affordability concerns were unaware of their eligibility). Among previously uninsured, subsidy-eligible respondents, those who indicated that they were aware of the subsidies were almost three times as likely to have reported enrolling as those who were unaware.
• There seems to be a recurring theme in many of McKinsey’s observations, which is the fact that consumer education / understanding of how the Exchanges work is very low.  Subsidized plans is a key provision for many of the consumers that the Exchange is meant to target.  It seems to me the success of these Exchanges is largely contingent upon awareness and education of how it actually works!
• Narrowed networks are available to 92 percent of that population; they make up about half (48 percent) of all exchange networks across the U.S. and 60 percent of the networks in the largest city in each state. The increased prevalence of narrowed networks gives consumers a wider range of value propositions and prices among health insurance plans. But, if a consumer purchases a narrowed network product, then at the point of access, the choice of providers is reduced. Compared to plans with narrowed networks, products with broad networks have a median increase in premiums of 13 to 17 percent (when the analysis is controlled for payor, product type, rating area, and metal tier); the maximum increase is 53 percent. Across the country, close to 70 percent of the lowest- price products are built around narrow, ultra-narrow, or tiered networks.
• They’re here!  Narrow, and ultra narrow networks.  I wasn’t even aware that Ultra-Narrows existed (defined as inclusive of less than 30% of a defined geography’s / rating area’s providers).  It will be interesting to see how this plays out over the next year – will consumers be disappointed at the point of access? I'm sure this will largely vary by consumer segment.  Additionally, for those with more complex medical conditions, what will happen if they need to go out of network for care?  Do the design of these narrow networks include provisions for outlier circumstances?  I remember a narrow network-like offering in Boston inclusive of a contract with Mass Gen that allowed patients to utilize the health system’s services for highly complex cases that could not be addressed in-network
• In our April consumer survey, 42 percent of the respondents who indicated they had enrolled in an ACA plan and were aware of the network type reported purchasing a product with a narrowed network. However, 26 percent of those who indicated they had enrolled in an ACA plan were unaware of the network type they had selected.
• Again, the education theme comes up – will be interesting to see how consumers respond to satisfaction with narrow network plans.  And what is the Exchange sign-up process like, and how can it be improved so purchasers are made more aware of what they are actually getting

"My Medicaid Coverage Means I can Use the ER!"

...is what people in Oregon are thinking.  Oh no...a policy nightmare!

A recent study published in the Journal Science followed a group of newly insured, low-income residents in the Portland area, and focused on their utilization of ER services.  The randomly selected group of people had entered a lottery to gain Medicaid coverage in 2008.  What the researchers found goes against the conventional wisdom that gaining healthcare coverage can reduce the use of Emergency Room visits because people now have access to primary care services and other outpatient specialists.  This is a particularly important concept, since the ER is a much higher cost setting than physician offices or outpatient centers. Instead, the study discovered that the newly insured visited the ER 40% more than their uninsured counterparts.  "The pattern was so strong that it held true across most demographic groups, times of day, and types of visits, including for conditions that were treatable in primary care settings," reports the New York Times.

While the study followed the "gold standard" in study design, critics claim that the time horizon is not long enough to establish a definitive pattern of behaviour.  I think what this highlights is Access to healthcare is not just about getting people insured, albeit that is a very important first step.  But this reminds me of Penchansky & Thomas' "5 A's to Access" (Afforadability, Availability, Accessibility, Accommodation, Acceptability).  While insurance helps with the first "A", afforadability, it does not address the others.  This study highlights the importance of Availability, Accessbility, and Accommodation:

1) Availability / Accessbility:  The ER is the first place people think to go to when they have minor injuries, headaches, pains, etc - things that can be easily addressed in different care settings, such as Urgent Care Centers, Ambulatory Care Centers, Physician Offices, Minute Clinics.  The Availability of these ambulatory settings of care are increasing, but still not as prevalent as your local hospital's ER.  This supply-side factor is just as important a consideration as patient demand.

2) Accommodation:  This may be stretching the definition a bit, but it has to do with the patient actually understanding the difference between when and when not to use the ER.  Especially the newly insured, who are probably not familiar with their own health and haven't had preventive services for most of their lives.
Once the system can figure out ways to address the issues of availability, accessibility, and accommodation, perhaps we can finally see a reduction in the use of costly ER services.

Health Sherpa

I have had many friends contact me in the past few weeks about that mess of a website, healthcare.gov - yes, it is frustrating.  Yes, they botched the roll-out and yes I am extremely disappointed.  There is no way I can defend this.

So I have to at least share a story covered in an NPR broadcast a few days ago when I was out in Seattle.  Apparently, 3 guys from Silicon Valley have created a super-easy to use website called Heath Sherpa that will tell you what insurance plans you are eligible for based on your income and location.  It's extremely fast and user-friendly.  One of its creators, Ning Liang, said on NPR that the goal was to have visitors get an "answer" in 5 seconds or less of visiting the homepage.

While the site does not have the ability to verify income or allow visitors to actually purchase plans, it is at least a starting point for those in the individual market to understand what plans may be available for them (and their costs) once the government site is working.  Link here:  http://www.thehealthsherpa.com/

Reducing Health Care Disparities

Update, 9/2/13:
My guide has been referenced in Beckers and Fierce Healthcare. Exciting.  Sophia and the Chua family would be proud.

****
Had a great opportunity to take a short leave from the consulting gig this summer and work at the Health Research and Educational Trust (part of the American Hospital Association). They were kind enough to publish the guide I wrote during my time there - if you're bored enough, here it is:

http://www.hpoe.org/EOC-real-data

Abridged version: While many providers are collecting some form of race, ethnicity and language (REAL) data, many data sets are not comprehensive nor standardized for ease of analysis.  Given changing demographics (minorities will become the majority by 2043), a more empowered patient population (the internet!) and changing reimbursement mechanisms, reducing health disparities through data-driven interventions will only increase in importance.  The guide provides a high-level approach to ensuring good data collection efforts, and ways to use the data meaningfully in reducing disparities. It is intended to point readers to existing resources that will support both the use and collection of REAL data and provide a business case for doing so.

Insurance premiums to fall 50% for New Yorkers due to Health Reform

On the homepage of NY Times today.

Highlights:

• Health insurance exchanges established via ACA (online health insurance shopping), are driving transparency in pricing and competition, leading to more affordable premiums
• The exchange will offer a choice of 17 plans, including one offered by North Shore Long Island Jewish health system, who is just entering the health insurance market 
• UHG and Wellpoint will be on the exchange
• Initial estimate of 615K New Yorkers signing up within first few years

Will this be sustainable?  Will these plans be generous enough?  Didn't we already see this play out in Massachusetts?

The Decline of the Physician Private Practice

CNN released an article today noting that "the number of physicians unloading their practices to hospitals is up 30% to 40% in the last five years." Cost pressures, myriad policy changes and the shifting reimbursement landscape are forcing health care practices to become more efficient in the way they do business - and for a small physician practice, managing business expenses and operations is not an easy task. For many physicians, it's becoming easier to sell their practices (or even outsource their administrative functions to entities like University Hospital's UH Physician Services in Cleveland) so they can focus on patient care. Are the days of the private practice coming to an end?  I'm all for efficiency in operations and the benefits of scale - and maybe this will become more and more appealing to the next generation of physicians. Said one physician in the article, "my hours are better. I'm not spending hours on administrative work or worrying about my business."

You know, I would totally throw a fit if my favorite local coffee shop was ever pushed or bought out by a larger chain - but when it comes to health care?  Put me in the cheapest and most efficient setting, no problem.  As long as I can still see my doctor...

Setback for ACA?

The White House announced today that the ACA employer mandate, which requires companies with 50 or more employees to offer health insurance or face penalties, will be delayed one year to 2015. What will happen to these individuals?  Will they purchase coverage through the health insurance exchanges, which are supposed to "go-live" October of this year?  And is this really an indicator for the law's eventual repeal, which many Republicans are hoping for?  You can read more here.

Hospital Price Variation, Front and Center on New York Times

When Steven Brill's Time Magazine cover story, "Bitter Pill" was published back in March, it bought to light both the often inexplicable charges and wide variation in hospital billing.  While this fact is no surprise to those working in the industry nor patients who have been hit with heavy hospital bills (especially the uninsured), what Brill did was pull together several examples and personal stories into one article to garner attention.  He accomplished what he set out to do, receiving responses from the American Hospital Association, several hospitals and health systems, and was even invited to be a guest on Jon Stewart's The Daily Show.

Now, CMS (Centers for Medicare and Medicaid Services) has published further proof of price variation. "Data being released for the first time by the government on Wednesday shows that hospitals charge Medicare wildly differing amounts — sometimes 10 to 20 times what Medicare typically reimburses — for the same procedure, raising questions about how hospitals determine prices and why they differ so widely," reported The New York Times today, on it's homepage.

Yet another argument in support of moving towards bundled payment.  To read more about this exciting new healthcare trend, click here.

Uwe Reinhardt vs. MD

Uwe Reinhardt's latest blog post discusses quality of care under traditional vs. Managed Medicare plans - snooze! (but kinda interesting - conclusion was slightly better under Managed care.  You can read more here.)

But the dialogue between himself and a physician who posted commentary after the article is great fun...sharing with you, here:

• Van Gross, MD
• Miami, FL

People did not enter medicine to become Uwe Reinhardt chess pieces. If someone had asked the late great Stan Musial if he would have liked certain "recommendations" if not constraints placed on him so he could have better outcomes, he would have taken a left handed swat at said individual and tatooed his health care challenged body into the right field bleachers.
I know the analogy is imperfect but so is medical care. As a result, Reinhardt style comparisons of plans falls apart when individual variations for any given disease are acknowledged which prevent draconian pronouncements re: optimal care strategies for many different patients with diverse co-morbidities and cultural exigencies. Next year is 2014, not Huxley's 1984. If the idea is to begin the roll out of an army of "pawn medics" marching to the dictates of King Reinhardt, let the Medicare Advantage drum beat begin.

• Uwe Reinhardt
• Princeton, NJ

To Van Gross, MD:

I find it ironic that you mention Stan Musial, who played his game subject to many, many rules that constrained his game and whose game was judged by umpires he played it. Musial also undoubtedly got many recommendations over the years on how to improve the outcomes from his the way he played the game. In a sense, he played "managed baseball," although within the constraints of the game he still had enough leeway to play the game as best he knew how -- just as physicians under managed care still have enormous leeway on how to practice medicine. So I thank you for the analogy, Dr. Van Gross.

I recall debating the merits and demerits of alternative health systems with a physician some years ago when I asked him: "To make it short, describe to me your vision of the ideal health system." More physicians should be asked that question.

His response at the time was: "Physician and patient should be free to decide on the therapeutic response to a given medical condition, and the insurer should respect that and pay for it without questioning these therapeutic decisions."

The see the footprints that kind of apporach leaves behind, I encourage you and other readers to click on

http://www.dartmouthatlas.org/

and rummage around that website a bit.

Don't you love it??  Got to remember to read the commentary sometimes.....

Population Health in the US Pretty Much Sucks, at Least Relatively Speaking

The Institute of Medicine recently published a 378-page study comparing US health measures against other developed countries.  While similar studies have been done in the past, they have been largely focused on older populations.  The IOM's recent study focused on younger Americans as well - and the findings are just as bleak.

The study found that "Younger Americans die earlier and live in poorer health than their counterparts in other developed countries, with far higher rates of death from guns, car accidents and drug addiction" (this includes adults <50 years of age).  A particularly scary statistic:  the rate of firearm homicides was 20 times higher in the U.S. than other countries.  Oh, and by the way, we still have the highest rates of infant mortality and teen pregnancy.

The reasons for our poor health statistics can be blamed on a host of factors - both driven by our public health and health care system.  It's critically important to understand how both play a role; how it's just as important to reduce fragmentation in healthcare as it is to make sure people have health insurance, as it is to make sure people have access to healthy foods - and not guns.

One other interesting find:  "Americans who have not graduated from high school die from diabetes at three times the rate of those with some college." So our education system completely has a part to play....see how it's all coming together?  And how it's all falling apart?

When addressing our health problems, we need to look at things holistically, expand our thinking about what can be addressed with potential solutions.  For example, should we consider patient education sessions in a bundled payment for cardiac surgery, to promote healthy behaviors?  Public Health education in school?  Gun trade-in programs?  Or we could just move to Japan - and eat sushi with Jiro.

Read more here.

Goodbye, Pete Stark

Congressman Pete Stark is leaving the 113th Congress after 40 years of public service.  He is a bit of a health policy legend, probably most well-known for COBRA (which allows you to stay on your employer's insurance after you've left your job) and EMTALA (can't ditch the uninsured when they show up in the ER).

You can read more here.

ACA Impacts in 2013

Really liked this quick to read CNN article on PPACA impacts in 2013.  While most changes will not take affect until 2014, there are a few things to watch out for next year.  The big ones include:

1) Increase in Medicaid Provider payments - should be good news for docs
2) Health Insurance Exchanges "Go Live" in Oct. 2013
3) Insurers will have to publish easy to understand brochures describing their plans in a standard format; see sample here.

A "Bundled" Surgery: the Perfect Christmas Gift?

Want a free trip to Florida or California from your employer?  No problem!  Just break a leg (literally).

Kroger and Wal-Mart are among employers now sending their staff on all-expenses paid trips to get medical care.  As described in this LA Times article, costs for routine operations can vary widely depending on the care provider.  For example, Kroger found that one hospital in particular can provide hip and knee replacement surgeries at up to 15% lower cost than other providers - while maintaining the same quality in care.  This savings in cost more than covers the cost of trip expenses to receive care at the hospital, which is located in Irvine, CA.  Additionally, there is the element of predictability - employers contract with each selected provider to pay a fixed-rate per surgery, or "episode" of care - the oh-so-trendy "bundled" payment.

Are bundled payments the future of healthcare?  I just can't wait to find out - I know you feel the same way!

PPACA excluding Immigrants - Bad Health Policy?

My beloved healthcare bill isn't perfect, as most of the things I love aren't....sigh.

The White House recently disclosed that young immigrants now allowed to stay in the US will not qualify for health insurance under PPACA (neither Commercial nor Medicaid / CHIP public coverage).  This is a great example of bad policy stripping away the good intentions of another - these immigrants, now allowed to stay in the US with dreams of becoming productive citizens, will not qualify to purchase health insurance on exchanges and have access to affordable healthcare.

In my public health program, we learned all too often that personal health is very much linked to the ability to become a productive member of society...Ricardo Campos' story in the article is a great examples of this.

You can read the article here.

Shocking!: Medicaid expansions help people, says NEJM

Let's be honest...sometimes it's easier just to jump to the Conclusion:

"Conclusions:
State Medicaid expansions to cover low-income adults were significantly associated
with reduced mortality as well as improved coverage, access to care, and self-reported health."

The New England Journal of Medicine recently published a study comparing 3 states that adopted Medicaid expansions to "control states" that did not.  And, apparently after adjusting for all the things you're supposed to adjust for, the expand-States had reduced mortality (esp. among adults ages 35-64), improved access to care, and better self-reported health...

Link:  http://www.nejm.org/doi/pdf/10.1056/NEJMsa1202099

Lessons from the Cheesecake Factory

If you haven't seen it yet, Dr. Atul Gawande has another great New Yorker article on healthcare.  This time, he does on deep-dive on the super-efficient restaurant chain, Cheesecake Factory, and basically talks about how healthcare is....well, nothing like that.  Click here for the full article (warning; it's long!)

Outside of getting an insider's guide to the wonderful world of Cheesecake Factory operations, I like the story he tells about his mom getting a total knee replacement...you get a sense of the high variation in healthcare, among and even within hospitals....and how some forward-thinking doctors were able reduce variation and give his mother some high-quality healthcare!

Healthcare JV's, M&A

Terms like "Joint Venture" and "Mergers and Acquisitions" don't typically come to mind when you think healthcare....well....times are changing:

1) Group Health Cooperative recently formed a Joint Venture with a Catholic Health System in Spokane, WA to provide more efficient healthcare services:  http://www.kaiserhealthnews.org/Stories/2012/August/01/group-health-providence-partnership-spokane.aspx

2) Private Equity Firm Ceberus Capital Management now owns Steward Healthcare in Boston, turning it into a for-profit system that is now positioned to compete with big players such as Mass Gen, Brigham....http://www.commonwealthmagazine.org/News-and-Features/Features/2012/Summer/001-Cerberuss-health-care-play.aspx

Is this good for healthcare?  I suppose time will tell.

A "Healthcare Handbook" for Clinicians

New York Times' WellBlog today features 2 Medical students who wrote a book about understanding the US Healthcare system...I am very excited to read this.  It helps to define all the fancy new slang, including "Accountable Care Organizations" and "Bundled Payments."  May be a good refresher for all those working in healthcare...plus it's only 175 pages long!
http://well.blogs.nytimes.com/2012/07/12/two-medical-students-navigate-the-health-care-maze/?ref=health

I've Reached a New Height; PDJ and I Aligned

My old Health law professor wrote a spectacular summary of the SCOTUS decision and opinion for Medicare Newsgroup that is eerily similar to my previous post...

Okay, okay...he may have been a little more eloquent in his blog post, and it's much more educational than my piece....but that's why he's Peter D. Jacobson, and I'm not.

Health Reform Lives!

Yes, I baked these cookies yesterday.

3 quick comments regarding yesterday's events:

1) While good for the Obama campaign, the mandate will inevitably be spun as a new tax on Americans by  Romney & Co. (to the effect of $500bn (link) in new taxes according to his televised reaction yesterday)...I wonder where this figure comes from?

2) The NYTimes published an article today about mounting pressures to meet PPACA deadlines (link)  Some States, such as WI, are even holding out until November...this just does not seem very smart to me...arrogance > reason:

"Mr. Walker quickly raised the risk by announcing that, in spite of the ruling, he would continue to delay any imposition of the law while waiting to see whether Republicans took control of the White House or Congress in November. Republicans on Capitol Hill, and the party’s presumptive presidential nominee, Mitt Romney, have vowed to repeal the entire law if they gain power."

2) What about Medicaid expansions being left up to the States?  There wasn't too much talk about this yesterday, but I think it's an important point...will Health Reform help the poor attain health insurance?  From ABC: 

"Renee M. Landers of Suffolk University Law school says the impact of today’s ruling, “could reduce the number of people who will be eligible for Medicaid because it is easier for the states to opt out.”"

I suppose we'll find out in time.  Regardless, Team Obama has made history...and  some pretty Healthy Health Policy!