Wednesday, January 28, 2015
Today’s Managing Health Care Costs Number is $30 million
There’s a kerfuffle in Massachusetts – where health plans that enroll citizens in the state insurance exchange participate in a risk pool. Health plans that enroll healthier members have to pay a portion of their premium to health plans that enroll sicker members.
These state risk pools are an important part of the Affordable Care Act. Without risk adjustment, health plans that enroll sick members become insolvent. In a world without risk adjustment, the best approach for a health plan is to selectively market to healthy potential members. Risk pools mean that it makes sense for insurance plans to enroll sick people – the people who need insurance most.
The problem – small health plans are writing large checks to the largest insurer in the state, Blue Cross of Massachusetts. They are advocating that the state put a moratorium on payments to the risk pool.
That’s a terrible idea.
Healthy people are inexpensive to care for – so health plans that enroll the healthiest should get lower premium payments. Health plans that enroll those with existing illnesses need higher premium payments. It’s critical to arrange this in advance of each premium cycle.
We know that risk adjustment is an imperfect science at best. Adjustments are highly sensitive to provider billing practices. Medicare Advantage plans have long emphasized coding as a way to earn higher premiums and the GAO reported 2 years ago that diagnosis creep was leading to overpaying these plans.
Even so, answer to the failings of risk adjustment isn’t to eliminate risk adjustment – it’s to improve it.
Tuesday, January 27, 2015
Today’s Managing Health Care Costs Number is 27.9%
I don’t have any friends who smoke cigarettes. None. Zero.
And that’s no big surprise. I live in a high-income zip code, and have two graduate degrees. Many of my friends do, too. Folks like us don’t smoke.
It’s different if you’re poor. Wonkblog published data from Tobacco Free Kids earlier this month. I’ve abstracted it above. 27.9% of those below the poverty level smoke. Just 13% of those who make more than $90,000 a year smoke.
Experts suggest many reasons for the poor to smoke at higher rates than the wealthy. These include:
· Selective marketing to poor people, like those menthol cigarette ads in predominately African-American neighborhoods
· Less access to medical care, and fewer doctors to pester them to quit
· Less insurance coverage to cover smoking cessation aids
But I keep coming back to the social networking model. People like me were far less likely to smoke in the first place. If we did, we quit smoking together. Those who remained smokers migrated to the outskirts of their social networks. The video below is from Nicholas Christakis, who wrote the seminal New England Journal of Medicine article about social networks and smoking in 2008.
We all hoped that high rates of taxes on cigarettes would dissuade poor folks from smoking. But cigarettes aren’t a simple luxury item. Raising the prices is good, and keeps young teenagers from starting to smoke. I support making cigarettes more expensive, but this alone isn’t enough to diminish the disproportionate health burdens that cigarettes impose on the poor. And the poor can least afford these taxes.
Once folks are hooked on nicotine, the only solution is to get them to try to quit. And we have to get them to quit by making smoking as “uncool” in their communities as it is in mine.
Friday, January 23, 2015
Today’s Managing Health Care Costs Number is $7.8 billion
Ezekiel Emanuel has raised another firestorm – this time around the annual physical examination. He says, in the New York Times
From a health perspective, the annual physical exam is basically worthless.
In 2012, the Cochrane Collaboration, an international group of medical researchers who systematically review the world’s biomedical research, analyzed 14 randomized controlled trials with over 182,000 people followed for a median of nine years that sought to evaluate the benefits of routine, general health checkups — that is, visits to the physician for general health and not prompted by any particular symptom or complaint.
The unequivocal conclusion: the appointments are unlikely to be beneficial. Regardless of which screenings and tests were administered, studies of annual health exams dating from 1963 to 1999 show that the annual physicals did not reduce mortality overall or for specific causes of death from cancer or heart disease. And the checkups consume billions, although no one is sure exactly how many billions because of the challenge of measuring the additional screenings and follow-up tests.
The column drew 835 comments – ranging from the self-interested to physical exam acolytes – here is a link to published letters to the editor. Alex Beam in the Boston Globe endorsed the annual physical exam just yesterday, saying it gave him an annual lease on life and that he “retain(s) every word.” He goes on to cite low fat dietary advice that probably isn’t even correct!
I’d like to refer you to a post “Don’t Get an Annual Physical Exam” from early December where I covered similar territory. Annual physical exams cost almost $8 billion a year – but that’s an underestimate because it doesn’t include the myriad of subsequent tests. It also doesn’t count cost savings from health care disasters averted – but there are precious few of these in people without symptoms, complaints, or known underlying illnesses. The most important elements of the annual exam – like keeping up to date on vaccinations and getting advice about smoking cessation, nutrition, seat belt use, sexually transmitted disease or domestic violence prevention could all be more effectively accomplished in some different setting.
Perhaps the biggest “cost” of the annual physical examination is that this is often the reason why your doctor isn’t available when you have the worst headache of your life, or a rash, or you believe you have a urinary tract infection. These complaints are often triaged to emergency departments or specialists because the primary care physicians’ schedules are blocked doing non-evidence-based annual physical exams.
Many of my friends colleagues and relatives have found one more unanticipated side effect of annual physical exams. Preventive visits are covered with no cost sharing under the Affordable Care Act, but many physicians bill a simultaneous cognitive visit code if any acute complaints come up at the visit. This means an unexpected bill for patients, especially painful as so many now have front end deductibles.
The conclusion that annual physical exams are worthless doesn’t hold for kids (who need vaccinations and pediatricians should assess developmental milestones.) It also doesn’t hold for adults with complaints, symptoms, or known illness – who should see a physician regularly.
Join Ezekiel Emanuel and me. Skip your annual physical exam if you don’t have any complaints or chronic diseases. Choose a primary care physician who offers email access. Get your flu shot each fall, exercise regularly, don’t overeat, don’t smoke, and wear a seatbelt. You can search the ePPS (Electronic Preventive Services Selector, designed by the Agency for Health Research and Quality and aimed at physicians). But don’t waste your time on an annual physical.
Thursday, January 22, 2015
Today’s Managing Health Care Costs Number is 83%
We all know that physicians order too many tests. The critical distinction is that OTHER physicians order too many tests. I don’t! This is similar to what pollsters have recently learned – predictions based on asking respondents who their neighbors would vote for are more accurate than asking for whom they themselves would vote.
Researchers at Brigham and Women’s published an elegant survey study of hospitalists in this week’s Annals of Internal Medicine – asking them what tests and treatment their colleagues would order in two scenarios where we know that there is substantial overuse of services. The researchers added a twist- they had four variations of the scenarios
· No detail about family members
· Family member is identified as either a physician or a lawyer
· Family member requests additional treatment
Hospitalists reported that their colleagues would overutilize in more than half the cases (Preoperative testing) and in more than four out of five cases (fainting). Hospitalists in practice for a shorter time, nonhispanic whites, and Veterans Administration hospitalists (about 7% of respondents) were less likely to order inappropriate tests or treatment. The increase in diagnostics was more prominent when the family member was a physician than an attorney (but these were done for different scenarios, so aren’t directly comparable).
We obviously need a new approach to getting physicians to follow guidelines. Continuing medical education doesn’t change behavior. The only thing that works to prevent premature elective delivery is to simply prohibit services that are non-evidence based. But we simply can't create rules for everything! We could invoke choice architecture- making it easy to invoke standard order sets and more difficult to order tests that appear inappropriate based on diagnosis.
I’d like to think that bringing patients and their families into decision-making would improve the quality of care. Unfortunately, this study shows that physicians often perceive that pressure from family members drives them to provide even more care.
Tuesday, January 20, 2015
Today’s Managing Health Care Costs Number is 45
Influenza is a terrible disease – it gives you a fever of 104, shaking chills, fever, muscle aches that make you feel like you got hit by a car, and a cough with green phlegm that sometimes leads to pneumonia.
It also kills.
The CDC reported that 45 kids died so far this season of influenza – 19 of them in the first week of 2015.
There has been a bunch of reporting about the miserable effectiveness of the influenza vaccine this year. The vaccine is usually about 70% effective in preventing disease; this year, it is only 23% effective.
In a normal flu season, one influenza case is prevented for every 37 people who get a vaccination. In this season, an influenza case is prevented for every 77 people who get the vaccine. These calculations are from Aaron Carroll of the Incidental Economist and the NY Times. He’s got a pretty cool video explaining how these statistics are calculated, too.
Is it worth getting a flu shot if you know that 76/77 times you get a shot it will not prevent disease?
Influenza and pneumonia are responsible for close to 8% of all deaths in the country during influenza season. Each year influenza is responsible for 3000- 49,000 deaths, and 111 million lost work days. Influenza is especially deadly for young infants, for the elderly, and for the debilitated. So we should all get the flu shot so that we don’t infect someone who could die from the disease.
Influenza incidence is probably on the way down this winter as part of the natural seasonal course, although people will get influenza until late Sprng. I worry that the bad press on the flu vaccine will embolden people next fall to look the other way when their doctor or pharmacist suggests vaccination.
There are very few things we do in medicine that save lives, lower costs, and have almost no side effects or complications. Influenza vaccine is one of them, even if this year antigenic drift has left the vaccine less potent than usual
Monday, January 19, 2015
Today’s Managing Health Care Costs Number is 14,000
Health care reform has led to the first sustained decrease in uninsurance in the US for decades, and has led to a decrease in Americans who say that health care is causing them financial insecurity.
The Affordable Care Act can claim some of the credit for this decrease – and much of the increased coverage is through those who are enrolled in Medicaid in states that opted to expand Medicaid.
Even before the ACA, the Children’s Health Insurance Program (CHIP), which provides coverage for children under 200% of the Federal Poverty Limit for very modest premiums, has helped us keep the uninsurance rate for kids much lower than for adults under 65. This is obviously great public policy, because
· Kids who have access to insurance are more likely to go to college, less likely to die prematurely as adults, and their projected future increased taxes alone cover a substantial portion of today’s costs
· Being sure that kids have health care coverage is (pretty) nonpartisan – there aren’t many conservatives or libertarians who opposed coverage for kids. CHIP was part of the Balanced Budget Act of 1997, and passed with bipartisan support. Within 3 years all states had signed on; such unanimity took decades for Medicaid.
· Much of the care that healthy children get is childhood immunizations – which are cost saving, and which help guard our overall public health
· Covering kids is, quite frankly, cheap!
But there’s a ticking time bomb. The Childrens Health Insurance Program (CHIP) is due to be reauthorized by September 30, 2015. If Congress does not reauthorize the program, we’ll see a substantial bump in kids without health insurance. The ACA isn’t faultless, here. The requirement that employer policies for low wage workers are “affordable” is tied to single premiums – so working parents cannot get full federal subsidies for children’s insurance under the ACA.
CHIP requires state contributions, as does Medicaid, and Arizona discontinued its CHIP program in January, 2014. Fivethirtyeight.com showed that this led to 14,000 fewer kids with insurance in Arizona. We should urge our legislators, of all parties and all political beliefs, to reauthorize this valuable program.
Social note –I’m back from vacation – so posts will return more regularly
Wednesday, January 7, 2015
Hospitals are either scheming profit-making machines or impoverished places about to harm their patients
Today’s Managing Health Care Costs Number is $110 Billion
Steven Brill has hit the talk show circuit plugging his new book America’s Bitter Pill, the sequel to his epic 2013 Time Magazine article that decried ridiculous hospital chargemasters which generate bills of $7 for alcohol pads and almost $50,000 for a a cancer evaluation at a name-brand cancer center.
Brill tells Jon Stewart that the Affordable Care Act won’t have any impact on medical costs because of the secret back room deals that allow drug companies to continue jacking their prices up, and lets even nonprofit hospitals maintain their high profit margins.
Austin Frakt, on the other hand, has a surprising piece in the NY Times’ Upshot noting that cuts in hospital prices that were part of the Affordable Care Act will prompt hospitals to cut back on staffing, and “such cuts by hospitals may harm quality of care.”
The Affordable Care Act included a cut of $150 billion in hospital Medicare fees over its first decade. This is actually a decrease in the rate of increase of hospital bills – but the point remains. Hospitals see less Medicare revenue. The hospital industry was the first to come on board the ACA bandwagon, because the offset to these lost rate increases was that the rate of uninsured Americans would plummet – and being paid less by Medicare would largely be offset by having so much less bad debt.
That hospital calculation has worked out very well in 27 states and the District of Columbia which expanded Medicaid. PBS reports that unpaid hospital bills decreased by $4.2 billion in Medicaid expansion states. The calculation hasn’t worked as well in states which have not yet expanded Medicaid. In these states, hospitals have lost their uncompensated care revenue (part of the $150 billion cut) but there’s been no letup in their patients who cannot afford to pay. Unpaid medical debt has only decreased by $1.5 billion in non-expansion states - so many hospitals in those states are in financial jeopardy.
So – Brill’s right that passing the ACA required all sorts of unsavory deals that protect margin of various elements of the health care industry whose support was needed for its passage. Medicare is prohibited from negotiating discounts with pharmaceutical companies, and health plans largely retained their overpayments from Medicare Advantage. But the ACA did include cuts that have helped Medicare have its lowest growth in over a decade – which has saved the taxpayers billions and allowed subsidization of coverage for millions of Americans without jacking up our total costs very much.
Frakt is right that some hospitals will face financial ruin. Those hospitals will largely be in states that didn’t expand Medicaid – a consequence of an unexpected Supreme Court decision which made it far easier for states to decline to expand Medicaid. The solution is to provide expanded coverage to more people at lower prices. Our high overall medical costs are due to high cost per unit rather than overutilization – so the ACA’s price pressure on hospitals is in my estimation a very good thing!
Addendum: Thanks to Nancy Turnbull for pointing out that I misstated Medicare in one instance when I meant Medicaid. The error is corrected 1/26/15
Addendum: Thanks to Nancy Turnbull for pointing out that I misstated Medicare in one instance when I meant Medicaid. The error is corrected 1/26/15