Unbiased Analysis of Today's Healthcare Issues

A Neurosurgeon and A Patient

Written By: Jason Shafrin - Mar• 25•15

The moving story of Paul Kalanithi.

That message is simple: When you come to one of the many moments in life when you must give an account of yourself, provide a ledger of what you have been, and done, and meant to the world, do not, I pray, discount that you filled a dying man’s days with a sated joy, a joy unknown to me in all my prior years, a joy that does not hunger for more and more, but rests, satisfied. In this time, right now, that is an enormous thing.

Paul Kalanithi.

Insurance expansions reduce ER Use

Written By: Jason Shafrin - Mar• 24•15

One promise of the Affordable Care Act (ACA) was that by giving more people access to health insurance, patients would be more likely to have a regular source of care and would be less likely to use the emergency room. Rick Kronick–the Director of the Agency for Healthcare Research and Quality (AHRQ) and a member of my dissertation committee–cites new research from the Annals of Emergency Medicine that finds that emergeny room visits have fallen. Kronick writes:

A new study, published today in the Annals of Emergency Medicine, shows that, following the implementation of the Affordable Care Act, the annual rate of emergency department visits by young adults age 19 to 25 decreased by 1.4 percent in 2011.

This represents 191,000 fewer emergency department visits among young people in this age group than would have occurred if the rate of emergency department use had not decreased. The data show decreases in weekday visits, non-urgent conditions, and conditions that could be treated in places other than the emergency departme

Of note, the authors find the ACA had no effect on weekend ER visits, likely because even insured patients have limited access to primary care physicians on the weekend. The authors conclude that “The Patient Protection and Affordable Care Act dependent coverage expansion was associated with a statistically significant yet modest decrease in ED use, concentrated in the types of ED visits that were likely to be responsive to changes to insurance status.”

Tuesday Links

Written By: Jason Shafrin - Mar• 23•15

5 Trends 5 years after by ACA

Written By: Jason Shafrin - Mar• 22•15

From a PwC report on “Five trends to watch as the Affordable Care Act turns five“:

  1. Risk Shift: Raising the stakes for all healthcare players. The ACA added force to new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions.
  1. Primary care: Back to basics. Experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point.
  1. New entrants: Innovators in the New Health Economy. New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era. More than 90 new companies have been created since 2010, according to HRI analysis.
  1. Health insurance: From wholesale to retail. Rapid enrollment in the ACA’s public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges.
  1. States: Reform’s pivotal stage. States have emerged as key players in the reconfigured healthcare landscape, as the ACA gave states notable discretion in how the law could be implemented.


Insurers: Non-profit or For-profit?

Written By: Jason Shafrin - Mar• 19•15

The answer is “no” according to the California Franchise Tax Board.

California tax authorities have stripped Blue Shield of California, the state’s third largest insurer, of its tax-exempt status in California and ordered the firm to file returns dating to 2013, potentially costing the company tens of millions of dollars.

Why did California claim that Blue Shield was a for-profit? The L.A. Times reports:

The move by the California Franchise Tax Board comes as the state’s third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves.

Has a non-profit insurer ever changed into a for-profit? The answer is “yes”.

…in the 1990s, Blue Cross of California, at the time a nonprofit insurer, converted to a for-profit company. Some of the assets held by the nonprofit were used to create large foundations in the state, including the California Endowment and the California HealthCare Foundation.

Will this move affect consumers? Likely not. Blue Shield rates were already in line with competitors and due to the competitive California market, increasing rates faster than their competitors may be difficult.

The Next Generation ACO

Written By: Jason Shafrin - Mar• 18•15

Medicare currently has two Accountable Care Organizations (ACOs)–the more popular Medicare Shared Savings Program (MSSP) and the Pioneer ACO program. However, these ACOs have generated only limited cost savings. Only 11 of 23 Pioneer ACOs and 58 of 220 MSSP participants generated cost savings.

To address some provider concerns and due to the limited cost savings generated, CMS last week announced what they are calling the Next Generation ACO.  CMS only expects 15 to 20 organizations to apply for this program.

The Next Generation ACOs will differ from the current models as they rely on fixed benchmarks (known by providers before the start of the year) rather than rolling benchmarks based on an ACO’s historical expenditures.  More importantly, Next Generation ACOs will be able to select from a variety of payment mechanisms “…to enable a graduation from fee-for-service (FFS) reimbursements to capitation [emphasis added].”  By year 2 of the program (2017), these new ACOs will have the option to accept capitated payment. Other differences include:

  • Greater access to home visits, telehealth services, and skilled nursing facilities;
  • (2) opportunities to receive a reward payment for receiving care from the ACO;
  • (3) a process that allows beneficiaries to confirm their care relationship with ACO providers; and
  • (4) greater collaboration between CMS and ACOs to improve communication with beneficiaries about the characteristics and potential benefits of ACOs in relation to their care.

CMS claims that “Beneficiaries may receive a reward for receiving the majority of their care from ACO providers, but are not penalized in any way for seeing non-ACO providers.” However, not receiving a reward is in essence a penalty. Additionally, if these Next Generation ACOs become popular, setting a capitated rate administratively becomes more difficult as fewer and fewer people will be using traditional fee-for-service Medicare.

Applications for Next Generation ACOs are due January 1, 2016. Interested?

Parents and Vaccinations

Written By: Jason Shafrin - Mar• 17•15

No, this story is not about parents who don’t vaccinate their kids.  It’s about parents who have vaccinated their kids (or plan to), but want to keep their children away from unvaccinated children.  From the LA Times:

A Bay Area mother formed a Facebook page where parents could arrange play dates for their children with other vaccinated youngsters. Another mom advocates socially isolating the unvaccinated by asking parents if their child is inoculated before accepting a birthday invitation, or even using the swings at the playground. And an Eagle Rock mom says she now asks about vaccine records when she buys used baby clothing.

The CDC vaccine schedule recommends getting the measles, mumps and rubella (MMR) shot at age 12-15 months for the first injection and age 4-6 for the second one. Thus, children under one will not be immune from measles and children 1-4 may not be 100% immune.

Will unvaccinated children and their parents by stigmatized for their decision? Perhaps so.

AMCP Abstract Winners

Written By: Jason Shafrin - Mar• 16•15

Next month in San Diego, the Academy of Managed Care Pharmacy is holding its annual conference.  I am a co-author on two abstracts accepted as part of the conference.  The first abstract won a platinum medal as one of the top 7 abstracts in the entire conference, the second abstract won a silver medal as well. The titles are below and so are the full abstracts.  I would like to thank all my co-authors for their hard work on these projects.

  • Platinum Medal: “Physician and Patient Preferences for Nonvalvular Atrial Fibrillation Therapies”
  • Silver Medical: “Regional Variation in Rheumatoid Arthritis Quality Measures”



A Medicaid ACO?

Written By: Jason Shafrin - Mar• 15•15

Medicare’s Shared Savings Program (MSSP) contracts with accountable care organizations (ACOs) to provide care for Medicare beneficiaries.  Reimbursement levels for these ACOs depends on quality and their ability to generate cost savings relative to the non-ACO national trend.  The goal is to align provider and payer incentives in improving quality and reducing cost.

Would such a model work for Medicaid?  That is what the state of Illinois is attempting with their Accountable Care Entity (ACE) program.  

ACEs are an integrated delivery system that includes primary care physicians, specialists, behavioral health, and hospitals. Like ACOs, ACEs reimbursement depends on reducing cost and improving quality.

ModernHealthcare adds more detail:

The ACE initiative started because of a 2011 Illinois law. It mandated that by Jan. 1, 2015, at least half of the state’s 3 million Medicaid beneficiaries had to be enrolled in some type of a managed-care plan. The state has created a variety of ways to accomplish this, such as traditional managed-care organizations led by private health insurers. But Illinois wanted to include hospitals and doctors as part of the solution, Hamos said.

Under the ACE model, the participating provider groups agreed to contract with Illinois for three years to care for defined Medicaid populations in a specific geography.

During the first 18 months of operation, hospitals and physicians will receive two types of payment from the state. Illinois Medicaid will still reimburse all medical claims on the usual fee-for-service basis, but the state will also give ACEs a care-coordination fee of $9 per member, per month.

In the second half of the contract and after it ends, providers will bear full financial risk under an undetermined capitated payment.

Many fear that these ACO-like organizations are just managed care by another name. The key is whether these new organizations can control costs like managed care organizations but are also able to simultaneously improve quality and patient satisfaction as well.

Friday Links

Written By: Jason Shafrin - Mar• 12•15