Category: Health Care Issues

Oct
17

Defining health plan value – what’s really important

Posted by Joe Paduda on Monday, October 17th, 2022 | Comments

If your health plan could show it:

  • reduced the days kids stayed home from school due to illness;
  • helped members with mental health conditions maintain a high level of functionality and engagement;
  • reduced workdays lost due to illness;
  • sped recovery from illness and injury; and
  • helped amateur athletes avoid injury and recover quickly;

would that be important?

Heck yes.

So…why don’t healthplans do that?

It’s doable – if they stopped focusing on and worrying so much about star ratings and patient experience and net promoter scores – which research shows consumers don’t really pay attention to or care about –

(conclusion – no.)

and focused on what consumers really care about – staying healthy and able to do the things we want to do:

  • play with our kids and grandkids
  • do chores around the home
  • do our sports
  • shovel our walks, rake leaves, coach youth sports
  • lift stuff and move it around
  • got to the bathroom without help
  • dress and undress without help
  • go for a walk
  • oh, and work.

What’s even more puzzling is why employers don’t demand health plans complete on the basis of delivering fully functional, engaged workers.

What does this mean for you?

The most important component of any organization is its workers.

No employers hold their health plans accountable for ensuring those workers can actually, you know, work.

And that is why our healthcare system is so dysfunctional, ineffective, and expensive.

Oct
11

The problem with primary care?

Posted by Joe Paduda on Tuesday, October 11th, 2022 | Comments

It doesn’t generate profits for the medical-industrial complex.

From a societal perspective primary care is wildly undervalued – and wildly under-appreciated – because primary care doesn’t make money for anyone, especially primary care providers.

Which makes no sense on every front but the profit one. If everyone had good primary care,

  • they’d be healthier,
  • their health risks would be identified early and a plan developed to address them,
  • they’d have a provider who treats them as a whole person, who understands that we are a bunch of tightly-interrelated organ systems that have to be considered as a whole, not as individual organs,
  • they’d understand non-physical issues can be just as impactful as physical ones,
  • there’d be a lot less need for specialists, and
  • healthcare costs would likely be a lot lower.

Healthier people don’t need as many medications, devices, treatments, injections, therapies, surgeries, rehab, inpatient beds or surgical centers as unhealthy people.

And that’s where the money is.

Kaiser Permanente has generally excellent primary care – yet it can’t/hasn’t been able to translate that excellence into a sustainable competitive advantage.

I believe that’s because KP – and pretty much everyone else – is thinking about the “value” of healthcare the wrong way.

Tomorrow – how we define value today – and why that is wrong.

Sep
26

Watch out for gabapentin…

Posted by Joe Paduda on Monday, September 26th, 2022 | Comments

The CDC recently reported gabapentin was involved in one out of every ten fatal overdose deaths in reporting states.

Similar to opioids, gabapentin can cause severe breathing difficulties  – which are exacerbated when the drug is combined with other central nervous system depressants (CNS) (e.g. opioids, antidepressants, antianxiety meds).

Illicit use of gabapentin appears to be on the rise…from JAMA:

Gabapentin can produce feelings of euphoria and intoxication and can potentiate opioids’ effects. Individuals who misused the drug reported multiple reasons in a 2019 study, including a desire to enhance the effects of opioids; to achieve a “high” when preferred substances were unavailable, such as when they were living in a treatment facility or were incarcerated; or to self-treat withdrawal or pain. [emphasis added]

Gabapentin is a non-scheduled drug which became much more widely prescribed as opioid scripts declined.  Back in 2018 one out of five chronic pain patients were prescribed gabapentin (or its cousin, pregabalin). There’s some evidence that misuse of gabapentin – which is almost always prescribed off-label – often occurs after the consumer had a prescription for the drug.

And, Parke-Davis, manufacturer of Neurontin – the brand name version of gabapentin – pleaded guilty to promoting off-label use and paid a $430 million fine.

So, what to do?

First – learn more.  Start here – myMatrixx’ Shanea McKinney, PharmD penned an excellent overview way back in 2019.

Then…

  • Dig into your data – what’s been happening with gabapentin?
  • When and where possible, require prior authorization for gabapentin and similar drugs.
  • Educate patients and caregivers about potential risks of the drug.
  • Pay special attention to patients prescribed gabapentin off-label and in combination of other CNS depressants.
  • Consider recommending urine drug testing for gabapentin patients and include it in  the drug test panel.

What does this mean for you?

This looks awfully familiar. 

 

Sep
22

The hospital shakeout

Posted by Joe Paduda on Thursday, September 22nd, 2022 | Comments

Is well underway.  Likely impacts include:

  • more hospitals shutting down their inpatient operations
  • a decline (!!) in hospital employment
  • even more aggressive land-grab efforts by rival health systems seeking highly profitable commercially insured patients (that’s you, dear reader)
  • doubling down on “revenue maximization” (that’s you, work comp payor)

(Kudos to the estimable Merrill Goozner for his cogent discussion of the issue)

What’s happening…

  • hospital admissions dropped precipitously last year – despite the major impact of COVID admissions. As I noted a while back, COVID patients aren’t very profitable; they rarely get surgeries or other procedures which generate big dollars for hospitals…
  • meanwhile expenses are climbing – driven mostly by labor costs (up $86 billion this year)
  • more than half of all hospitals are going to lose money…before COVID, the money-losing facilities amounted to only a third of the total.

Why this is happening…

  • states that didn’t expand Medicaid are getting hammered as the other safety net payment programs mostly stopped helping hospitals make up revenue shortfalls.
  • care has largely shifted to outpatient facilities which are way less costly – and generate way less revenue per admit – than inpatient stays
  • it’s really hard to find staff – many are way past burnout, driven by overwork and abusive patients.

What does this mean for you?

Facility costs will go up.

Quality likely won’t.

Aug
12

Health insurance saves lives

Posted by Joe Paduda on Friday, August 12th, 2022 | Comments

A just-released study shows people with health insurance are a little less likely to die than those without insurance. 

That is not surprising; preventive care, access to medications to control diabetes, hypertension, depression, cancer and the like, and early diagnosis of potentially life-threatening diseases are all going to keep people alive longer.

From the study:

The study approach taken by the research team bypassed concerns raised against previous non-experimental research on this topic.

The outreach intervention was a joint project designed primarily by the Treasury Department’s Office of Tax Analysis, funded by the Department of Health and Human Services (HHS), and implemented by the IRS.

What does this mean for you?

Health insurance saves lives.

For workers’ comp, the implications are clear – workers who have health insurance are likely to be healthier than those without – and therefore more likely to recover from occupational injuries or illnesses.

Aug
9

Amazon, Kaiser, and primary care

Posted by Joe Paduda on Tuesday, August 9th, 2022 | Comments

Two seemingly-unrelated new items hit my news feed – Kaiser Permanente lost over a billion dollars last quarter, and Amazon paid $3.9 billion to buy One Medical, a primary care company.

Amazon is betting it can make primary care “work”, yet one of the best healthcare systems hasn’t been able to translate excellent primary care into lower costs.

Reality is, in the US primary care is (mostly) a money-loser.

One Medical, Amazon’s new purchase, has consistently lost money – a lot of money. That’s because reimbursement for primary care remains pretty low – despite Medicare’s move to increase pay.

We spend twice as much on healthcare as other developed countries, yet our outcomes, well…suck. One driver is likely access to primary care:

  • High income countries spend 2 to 3 times more on primary care services than we do; United States as a proportion of their (14% of total health care expenditures vs. the US’ 5% to 8%)
  • In those other countries primary care providers (PCPs) account for a substantially higher proportion of all practicing physicians; almost half of French physicians and a quarter of docs in the UK are PCPs compared to just one out of 8 in the United States.
  • that last data point may be due to pay; family practice docs make less than half what orthopedic docs do.

Good primary care saves big bucks by reducing the need for specialty care – an economic impact that isn’t reflected in primary care reimbursement in the US. At least not in most reimbursement schemes; risk-taking, ACOs, risk share, and other variations are among the models that attempt to reward PCPs for effectively managing patient health.

Amazon’s move to buy One Medical comes on the heels of lots of other investments in primary care; what’s notable is how few have resulted in profits.

Can Amazon “fix” primary care?

Well, they’ll  have to be a lot better than Kaiser Permanente.

KP is one of – if not the best – health care systems in the world, with excellent primary care and provider compensation that better reflects the value of primary care.

Yet KP lost over a billion dollars last quarter – and over $2 billion for the first half of 2022. Yes, a big chunk of the Q2 loss was due to investments, and there are extraneous factors – COVID-related mostly; Kaiser also has to pay orthopedic surgeons and other specialists a lot (increasing KP’s overall cost of care) because those docs could make much more outside KP.

Still, when one considers that Kaiser Permanente’s operating margins are generally pretty thin and certainly KP is less profitable than other health plans (UnitedHealth Group’s Q2 profits were up 19%) it shows just how difficult it is to make primary care “pay.”

What does this mean for you?

Pay more for primary care. 

Aug
1

Just the facts, ma’am…

Posted by Joe Paduda on Monday, August 1st, 2022 | Comments

Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)

Extra credit for identifying the man in the picture…

But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…

“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”

Drug prices

Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.

That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.

When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.

So…you getting those rebate checks?

COVID’s origins

Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.

A comprehensive, detailed, and multi-factor analysis by scientists from four continents found

the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.

The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.

Investors and physician practices

Private equity investment in physician practices varies a lot by specialty and region. Quick takes…

  • about 5% of physicians were in private equity-acquired practices
  • The highest percentage was in D.C. (18.2%)
  • More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices

The researchers wrote…

“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]

An interactive map and the research report are here.

Gun violence

Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:

  • gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…
  • the weapons were described as an “apex predator”
  • some ads for these weapons “mimic first-person shooter video games popular with children.”

source here

The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)

(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)

Workers’ comp physician fee schedules

…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…

The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s  name in  earlier version…darn spellcheck!)

Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)

Happy August!

Jul
19

Healthcare costs are…

Posted by Joe Paduda on Tuesday, July 19th, 2022 | Comments

heading up.

First, a bit of background.

Big health insurers that sell insurance via the Exchanges have to file their rates with the Feds now. While they don’t insure a lot of people, their filings are detailed, public, and cover 13 states – Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington DC.

The fine folks at the Kaiser Family Foundation did a lot of analysis, here are the key takeaways.

  • many insurers are projecting a medical cost trend of 4-8%.
  • “A substantial share of the increase in premiums is from rising health prices and utilization of health care”
  • one insurer said “Medical Care Services CPI in March 2020 (pre-pandemic) was 5.5% and as of March 2022 is 2.9%. This data suggests a correction is imminent as labor and supply cost increases directly impact hospitals and physician offices.” [emphasis added]

Oh, and that COVID thing? “many insurers are projecting the pandemic will have a net neutral or only slight impact on health costs and premiums.”

So…what does this all mean?

My view.

  • for this year, increased utilization and prices will drive trend north of 5%
  • we’ll see a bump in Q3/Q4 as increased labor costs work their way thru the system
  • 2023 trend will likely settle around 5% as inflation in other sectors eases off.

The wild card is – brace yourself – politics.

Sen Manchin – the mercurial-I-can’t-make-up-my-mind-and-it-sure-is-fun-being-the-center-of-attention Senator from West Virginia will determine if 13 million Americans can no longer afford health insurance.

If legislation doesn’t pass, health systems will have to care for more people without health insurance; some systems and hospitals will raise prices to cover their losses.

What does this mean for you?

Higher healthcare costs for the privately insured, workers’ comp insurers, employers, and taxpayers.

Jul
18

(Perhaps) unintended consequences of abortion bans

Posted by Joe Paduda on Monday, July 18th, 2022 | Comments

With all the attention paid to abortion these days, I thought it worthwhile to dig into the financial and health impact of abortion and childbirth.

First, the cost.

Women who give birth incur about $19,000 in additional healthcare costs compared to women who don’t.

And that’s for women covered by large employers’ health plans.

Second, medical debt.

Lower-income adults in the South and/or in states that have not expanded Medicaid are much more likely to have medical debt than the rest of us.

Third, coverage.

About 13 million of us will see their health insurance premiums jump in January unless Congress acts. The issue is subsidies for lower-income folks who get their insurance via the Exchanges will expire at the end of this year unless they are extended. So far, the chances for an extension don’t look promising.

Fourth, societal costs.

  • Almost half of the women receiving abortions have incomes below the poverty line.
  • Lives will be hugely impacted, as “the expansion of abortion access … reduced teen motherhood by 34% and teen marriage by 20%”
  • Women who are denied abortions are three times more likely to be unemployed than women who were able to receive one, according to a 2018 study.
  • Women who were not allowed to access abortion services had nearly a four times greater chance of living below the federal poverty line.
  • And…”research shows that in 2010 the public paid just under $13,000 on “prenatal care, labor and delivery, postpartum care and 12 months of infant care.” per birth.”

Connecting the dots.

States that have or are likely to ban abortion are:

  • unlikely to have expanded Medicaid,
  • have much more restrictions on Medicaid coverage so far fewer people qualify for Medicaid, and
  • therefore many more poor women who are forced to have children will have higher medical debt,
  • will not escape living in poverty, and their child will grow up poor.

What does this mean for you?

If one is going to force people to do things, one should understand and be responsible for the consequences.

Jul
11

Healthcare Sharing Ministries and the brutal reality of medical debt

Posted by Joe Paduda on Monday, July 11th, 2022 | Comments

Last week I posted on Health Care Sharing Ministries, noting I’d been reaching out to the PR firm that works with theAlliance of Health Care Sharing Ministries, the PR people put out a release touting their new accreditation standards.

As I noted last week the accreditation process/requirements don’t appear to require minimum cash reserves, specific expense ratios or meet other financial adequacy minimums and the accreditation board doesn’t include individuals with actuarial or financial credentials.

In English, this is a very big deal. Unlike real health insurers, HCSMs aren’t required to have enough cash to pay your medical bills. Also unlike health insurers, members don’t have any recourse if their “ministry” decides your care isn’t worthy of their support.

This comes on the heels of a recent study that found almost a third of all Americans have medical debt; in their efforts to pay off debt respondents made a number of sacrifices and suffered substantial financial consequences: (actual study and responses from KFF)

  • cutting back on household spending
  • more than four in ten say they or a household member have used up all or most of their savings
  • respondents reported skipping payment on other bills,
  • and delaying college or buying a home, or changing their housing situation, while
  • half of adults with health care debt say they have made what they feel to be a difficult sacrifice in order to pay down their debt
  • One in seven adults with health care debt say they have been denied care by a provider due to unpaid bills

Here’s the truly awful thing…the least fortunate among us are in the worst shape.

I get that some people have had good experiences with HCSMs. I also know others have not, and are now among those with crippling, life-changing medical debt.

What does this mean for you?

HCSMs are no silver bullet…rather they are a “send the check in and hope you are covered if you get hurt or sick” non-solution.

It’s a measure of just how dysfunctional our healthcare system is that HCSMs even exist.

Ed note – I’ve been holding off on this post for days, hoping to hear something from AHCSM. I’ve repeatedly asked the PR firm for more details; evidently the right folks haven’t been able to respond.

I first reached out to the PR contact on June 21, 2022…three weeks ago.