Unbiased Analysis of Today's Healthcare Issues

Quotation of the Day

Written By: Jason Shafrin - Dec• 16•15

“One can assemble a history of science from the solemn pronouncements of high authorities about what could not be done.”

Robert Heinlein

Mid-week Links

Written By: Jason Shafrin - Dec• 16•15

Reforming Medicare Provider Payment

Written By: Jason Shafrin - Dec• 14•15

With the ACA and now MARCA, Congress is moving full steam ahead with payment reform. An article by Paul Ginsburg and Gail Wilensky (2015) consider some of the implications of these reform efforts.

This belief – that a set of metrics can be developed or delivery systems specified that could lead to the delivery of care that would both increase quality and improve efficiency – has not been diminished by the fact that the early rounds of various demonstration and pilot projects have encountered multiple challenges and, so far, shown disappointing results.

The article makes another interesting argument on the role of benchmarks. CMS has typically recalibrated benchmarks every three years. On the one hand, this is a sensible approach. Updating the benchmarks regularly prevents the case where CMS sets poor benchmarks—and government price setting has traditionally been poor—and allows certain providers to realize large gains (or alternatively suffer large losses). The problem with this approach is that it undermines the business case for investing in efficiency.

Consider the case where a provider group spends $10,000 per patient, but is able to invest in improved efficiencies to reduce the per patient cost to $9,000. Although this seems like a good investment, it is only a good investment in the short-run. If the benchmark is recalibrated after 3 years, the provider would have lower spending below $9,000 to receive any bonus. Thus, the payback period for any efficiency improvement is likely too short.

Another complexity of implementing alternative payment systems is that there is not any one single system and these alternative payment systems need to talk to one another. Consider the following example:

[A] n orthopedic surgeon could be part of a group participating in a bundled payment for joint replacement. Some of the beneficiaries having a joint replacement with this physician may be attributed to an ACO, where the surgeon may or may not be a member of the ACO. Under current policies, CMS will subtract the savings from the joint replacement that are shared with the surgeon’s group from the savings calculated for the ACO. This avoids double payment for savings under an episode of care. But this appears to undermine a potential strategy for ACOs to achieve savings – to encourage beneficiaries attributed to the ACO to go to surgeons who are more efficient per episode of care.


Every Boston resident owes $3,000 for…

Written By: Jason Shafrin - Dec• 13•15

underfunded liabilities for city worker health care costs.  Brookings reports:

Like most American cities, Boston has promised to pay most of the health care premiums for its employees after they retire — which can be as early as age 45 or 50. Boston also subsidizes the Medicare premiums of its retired employees after age 65.

As a result, Boston reported an unfunded liability for retiree health care in 2013 of over $2 billion (that is a B!). This equated to a liability of over $3,000 per city resident — the fifth highest per capita of large American cities. And these figures did NOT include Boston’s share of another almost $2 billion in unfunded health care liabilities for retired employees from the MBTA.

The ways to decrease the deficit are not pleasant. Raise taxes on all Boston residents. Reduce eligibility for lifetime insurance based on minimum years of service (e.g., increase from 10 years to 20 or 30 years) or age (e.g., remove retirees eligible for Medicare. Decrease insurance generosity among those who do get insurance (e.g., more cost sharing).

Underfunded pension and health care liabilities are a serious problem for many U.S. cities that are likely to only get worse over the coming years.

Friday Links

Written By: Jason Shafrin - Dec• 11•15

A Child’s Guide to War

Written By: Jason Shafrin - Dec• 09•15

Kids interview one another.  Half the children have veteran parents, half do not.  Honest and interesting throughout.


International perceptions of ability to manage complex patients

Written By: Jason Shafrin - Dec• 08•15

In an international study using data from the Commonwealth Fund, Robin Osborn and co-authors survey primary care doctors in the United States and nine other industrialized countries on how well they are able to treat patients with complex needs. They found that the percentage of doctors that feel that their practice is well-prepared to manage patients with complex needs ranged from 66 percent in Sweden to 88 percent in the Netherlands and Germany. Additionally:

While the authors note some bright spots for the United States, such as significant progress in the adoption of electronic medical records, American primary care physicians stand out as being the most critical of their health care system (only 16 percent felt the system works well) and as having high levels of stress (43 percent) and dissatisfaction (34 percent) practicing medicine.


The demise of PPOs in Health Insurance Exchange

Written By: Jason Shafrin - Dec• 08•15

A Robert Wood Johnson commentary by Katherine Hempstead provides insight into the evaluation of PPO offerings in health insurance exchange.

Since last year there has been a significant reduction in the number of PPOs offered in the Affordable Care Act (ACA) marketplaces. A prior analysis showed that of the 131 carriers offering silver PPO products in 2015, only about one-third remained unchanged in 2016, while the rest were either reduced in scope or eliminated…Since changes in the generosity of out-of-network coverage don’t affect a plan’s actuarial value (AV), carriers can adjust these features without affecting the AV status. Plans new to the market in 2016 provide less coverage for out-of-network providers as compared to those that are continued from last year.

Hempstead also notes that the PPO offerings in the Exchanges have relatively heterogeneous characteristics.

Antidepressant coverage in the Health Insurance Exchange plans

Written By: Jason Shafrin - Dec• 06•15

The most common drug class taken among patients aged 18-44 is an antidepressant. Furhter, these relatively young and healthy patients are likely to be the ones who enroll in healht plans within the health insurance exchanges.  The question is, how easily can patients access information about antidepressant coverage?

According to a recent RWJ report, the answers are “not easily.”

Of the five marketplace web sites we study, only the two run through healthcare.gov (Alabama and Florida) have insurer formulary links that are posted directly on the anonymous plan browsing page. While that makes finding the prescription drug lists the easiest theoretically, the links provided are not always correct and sometimes lead to an insurer’s homepage or other location, making the formulary difficult to find.

If patients are able to find information about antidepressant coverage, how good is the coverage?  The answer is, not great.

Most insurers…cover a broad spectrum of antidepressants, but there is variability. While 26 of the 35 insurers studied across the five states exclude five or fewer antidepressants, some exclude 12 to 15.

How do patients choose their physician?

Written By: Jason Shafrin - Dec• 03•15

What matters to patients when choosing a physician?  Expertise?  Bedside manner?  Previous relationship with the physician?

To answer this question, a paper by Groenewoud et al. (2015) conducts a discrete choice experiment (DCE) survey of Dutch patients with knee arthrosis, chronic depression, or Alzheimer’s disease.  They found that patient preferences for their physician depended on the disease.

The most valued attributes were effectiveness and safety (knee arthrosis); continuity of care and relationship with the therapist (chronic depression); and expertise (Alzheimer’s disease). Preferences differed between subgroups, mainly in relation to patients’ choice profiles, severity of disease, and some background characteristics.

Thus, a one-size-fits-all approach to measuring physician quality may not best match patients’ true preferences for provider characteristics.