Private Insurers Already Forming ACOs

Forget about waiting for Medicare ACOs, private insureres are moving forward:

http://www.healthleadersmedia.com/page-1/LED-265538/ACO-Creation-Driven-by-Commercial-Market

Employers Sending Employees to Private Exchanges

Instead of purchasing insurance for their employees, some employers are providing a defined contribution and sending them to private exchanges to buy individual coverage. This seems fine to me if you are healthy, but what if you are not?

http://www.kaiserhealthnews.org/Stories/2011/April/29/private-health-exchanges.aspx

Employers Continue to Pass Costs Along to Employees

Here are the results from another employer survey on health benefits cost increases:

http://www.healthleadersmedia.com/content/HEP-265299/3-in-4-Employers-to-Increase-Health-Plan-Deductibles-or-Copays.html

More Data on "Skin in the Game " Effects on HC Costs

To continue the discussion on how having "skin in the game" could reduce HC costs, I offer this link which examines out-of-pockets costs of HC in various countries. What it shows is that high out-of-pocket costs are NOT correlated w/low HC costs:

http://motherjones.com/kevin-drum/2011/04/skin-game-continued

VT Moves Closer to Single Payer

Legislation for Green Mountain Care passed the state senate and now moves to conference. A single yet to be identified single funding source will be employed:

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110427/BENEFITS03/110429937/1233

Consolidation of the HI Market Implicaions

Here is an interesting interview with the IL DOI Commissioner who will soon be moving to DC to become Director of the Federal Office of Insurance:

http://www.kaiserhealthnews.org/Stories/2011/April/27/Moore-McRaith-Office-of-Insurance-On-Reform.aspx

Why Patients Are Not Consumers

Conservatives consistently say how having "skin in the game" will control the cost of health care. Given what I have seen of how little people understand about their health care insurance, I have always had my doubts about how these same individuals transform into super-educated consumers of health care, particularly when good cost and quality data are still not available. Here is the perspective of an ER doc on the issue that is definitely worth a read:

http://allbleedingstops.blogspot.com/2011/04/why-patients-are-not-consumers.html

ID Governor Prohibits ACA Implementation

Butch is not waiting for the SCOTUS to rule on the ACA's constitutionality:

http://aishealth.com/archive/nref041111-02

Good Review of ACOs

Who will be in charge? It depends:

http://www.healthleadersmedia.com/print/MAG-264787/In-an-ACO-Whos-Accountable

Case Management ROI: 57% Do Not Know

I find this incredible:

http://www.hin.com/chartoftheweek/case_management_program_ROI_printable.html

CO to Pass Legislation to Create HI Exchange

Add Colorado to the list of states moving forward:

http://www.healthpolicysolutions.org/2011/04/19/stephens-predicts-passage-of-health-exchange-bill/

Even Texas is reconsidering its opposition:

http://www.texastribune.org/texas-health-resources/health-reform-and-texas/ogden-revives-key-piece-of-federal-health-reform/

Medicare ACOs: A Risk Not Worth Taking?

Reviews on the proposed regs have not been good:

http://well.blogs.nytimes.com/2011/04/18/new-lessons-to-pave-a-road-to-safety/?ref=health

Oklahoma Returns $35M to Feds

HHS has distributed hundreds of millions of dollars to various states to develop their health insurance exchanges. One of these, Oklahoma, just returned the $35M it received. It also returned $1M it received to review insurance rate increases.

In all seven states have passed legislation to create an exchange. For more details:

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/Apr/April-18-2011/In-the-States-Heat.aspx

Urban Institute Looks at Multi-State Exchanges

This could make sense for the Dakotas and Wyoming and Montana:

http://www.urban.org/uploadedpdf/412325-Multi-state-Health-Insurance-Exchanges.pdf

VA Reduces Its Hospital Infection Rate

Who says the gov't can't do anything right? The VA puts many private health systems to shame w/these results:

http://www.nytimes.com/2011/04/14/health/14infections.html?emc=tnt&tntemail0=y

Will the ACA Cause Smaller Groups to Self-Insure?

Stop loss coverage is not cheap. But self insuring still has its advantages such as flexibility in benefit design:

http://aishealth.com/archive/nhpw032811-03

HHS to Provide $1B to Improve Hospital Quality

$1B to save $35B seems like a good deal to me. Reducing hospital errors is a critical component to improving quality and reducing costs:

http://www.latimes.com/news/nationworld/nation/la-na-medical-errors-20110413,0,3360859.story

Arizona's Plan for a $50 "Stick"

As a follow-up to my last post here is a LA Times' editorial regarding the plan in AZ to assess a $50 surcharge to Medicaid recipients who do not take any steps to change their unhealthy behaviors such as smoking or obesity:

http://www.latimes.com/news/opinion/opinionla/la-ed-obesity-20110411,0,3157293.story

Medicaid Incentives: $100M Federal Grant Available

Large employer groups have offered incentives to employees to stop smoking, lose weight etc. The results have been mixed but now the feds wants states to try it for the Medicaid population. According to this article Idaho and Florida have already done this and have not seen much success. Perhaps it will work in other states:

http://www.kaiserhealthnews.org/Stories/2011/April/08/Medicaid-incentives.aspx

8 Key Factors for an ACO

Intermountain Health Care is often cited as a health care system that "gets it." So what do they say you need to create a successful ACO?

1. Create a meaningful, living mission, vision, and values for the organization. Make sure they all live by it.
2. Balance commitment to all dimensions of care, including clinical goals, operational goals, and financial goals.
3. Develop collaborative working partnerships among physicians, nurses, and hospital operations. Use annual goal-setting.
4. Plan for the future and stay the course. Do not give up your plans based on short-term setbacks. Do not give up your plans based on short-term setbacks.
5. Create an infrastructure and tools to support capability and future enhancements—not necessarily capacity.. Focus on getting better, not necessarily bigger.
6. Train all leaders in common principles of management and continuous improvement so that common processes of problem-solving are practiced system-wide.
7. Create a culture that rewards innovation, continual improvement, accountability, commitment, and honesty , while building on the strengths of the local environment.
8. Become a learning organization, and plan clinical improvements based on evidence gathered from your own system as from the literature.

Good Article on UT and MA Health Insurance Exchanges

So the UT HI is all free market while the one in MA is heavily regulated, right? Not so fast according to this study:

http://www.kaiserhealthnews.org/Columns/2011/April/040611corlette.aspx

Are ACOs Affordable?

Along with taking on the risk of a global payment, entering into a ACO arrangement will also require extensive costs in IT infrastructure for providers. From a NEJM article:

Drs. Trent Haywood and Keith Kosel write that HHS is underestimating the anticipated three-year period that it will take providers to recoup the average $1.7 million investment (startup costs and first-year operating expenses as estimated by the Government Accountability Office) in an ACO. For many, even the best-equipped provider groups, it could take seven years or more before they achieve any financial benefit.

http://www.healthleadersmedia.com/page-1/FIN-264180/Are-ACOs-Unaffordable

ACO Issue: Different Incentives for Docs and Hospitals

So if you are a hospital, admissions mean revenue. But if you are part of an ACO, your global payment discourages unnecessary hospital admissions. From a WSJ article on ACOs:

Another concern: "Hospitals and doctors don't work together well," says Mr. Goldsmith. Hospitals' incentive is to maximize revenue through admissions, Mr. Goldsmith says, while doctors aim to keep their patients at home or in outpatient facilities.

This is really going to be interesting.

CMS Releases Draft ACO Regs

The regs are only 429 pages long. Here are my initial observations:

• The ACO is one of several programs in PPACA that advance clinically integration and physician-hospital alignment. The common thread running through episode-based payments, value-based purchasing, the medical home, avoidable readmissions, and ACOs is clinical integration in an organized delivery system that is capable of taking risk for results—cost savings, outcomes, and service delivery.
• The ACO is not for everyone. Guardedly, CMS suggested it envisioned only five million Medicare enrollees would participate in the ACOs—that’s 11 percent of total enrollment. (On page 352, however, the guidance suggested a lower range of 1.5-4.0 million). Some provider communities will no doubt pass, preferring to create clinically integrated delivery systems through other means. And for those pursuing the one-sided lower risk pathway, in year three, financial risk for savings and quality is required, so the reality of risk in the ACO model, and in many of the PPACA-related delivery system alignment efforts, is explicit. In most communities, the question for leaders are these: (1) should we create a clinically integrated delivery model wherein physicians, hospitals, long term care, and allied health professionals become formally structured to assume risk for costs and outcomes? (2) in assuming risk, are we prepared to make investments for infrastructure and changes to how we operate to achieve optimal results? and (3) do we have the core competencies necessary to manage population-based outcomes and costs, and the risk associated, or should we outsource these capabilities to a strategic partner?
• If an ACO is the pathway chosen work must begin now. “Clinical integration” requires deployment of health information technologies, clinical operating models, data capture and performance reporting and alignment of financial incentives for physicians, hospitals and allied professionals who share risk for results. It requires strong local leadership and substantial investment in hard and soft costs. It may require expertise in risk management accessible through a partnership with a health plan, or third party. It starts January 1, 2012, so decisions must be made now to participate or pass.

More to come.

RAND Study: HDHPs Save Money But.....

In what has to be the most extensive study done on HDHPs, RAND looked at over 800,000 people enrolled in this type of coverage spread among 53 employer groups. The findings are as follows:

• Health costs increased for enrollees in both high-deductible and traditional plans but grew more slowly in the high-deductible group.
• HDHP enrollees spent less on both inpatient and outpatient medical services, as well as prescription drugs. Spending for emergency care did not differ from traditional plans.
• Individual deductibles must be rather high ?more than $1,000 per person? to achieve meaningful cost savings.
  

http://www.healthleadersmedia.com/content/HEP-264431/HDHPs-Associated-With-14-Decline-in-Health-Spending.html

Cigna Intoduces the Value Based Concept to Dental Benefits

I like these dental benefit tweaks offered by Cigna:

http://newsroom.cigna.com/NewsReleases/CIGNA-Offering-New-Dental-Product-Features-that-Reward-Preventive-Care-and-Provide-Cost-Savings.htm?view_id=3897

DOJ Increasingly Looking at Monopoly Power of Health Systems and Insurers

Consolidation of health care providers leads to higher health care costs or so the theory goes. Here is the latest of the fed's effort to prevent it:

http://www.kaiserhealthnews.org/Stories/2011/April/05/Hospitals-And-Insurers-Face-Growing-Antitrust-Scrutiny.aspx

Gesinger ACO Experience Could Be Hard to Replicate

Geisinger Health System as often been cited as a model for the country to follow because of its high quality and cost effective care delivery. It participated in Medicare's bundled payment demonstration and certainly is interested in Medicare's ACO demonstration project. What is next for this high performing health care system?

http://aishealth.com/archive/nabn0411-06

Ario Says Movement To Exchanges Would Be a Good Thing

One of the concerns about the ACA is that it would decimate empoyer sponsored health insurance. HHS Director Joel Ario says this would be OK by him:

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/Apr/April-4-2011/Potential-Growth-of-Exchanges-a-Positive-Effect.aspx

HHS Makes $200M Available to States for Premium Review

HHS as part of the ACA will provide additional resources to states that wish to more closely examine rate increases from insurers that exceed 10%:

http://newsmanager.commpartners.com/ahstsd/issues/2011-03-31/5.html

Update on MLR Regulations

Under the ACA, states can petition for an exemption from the MLR requirements of 80% for the individual market. Maine received the exemption and eight other states have also requested one including Florida. Here are more details:

http://newsmanager.commpartners.com/ahstsd/issues/2011-03-31/3.html