Author: Stephen Moberg

Mandates, subsidies, tax credits, fines, exchanges, marketplace, co-ops, private insurance reform… What do all of these terms mean?

In an effort to better understand the changes the ACA will be bringing, we must separate the legislation into three distinct categories, or “silos”. These silos are not dependent upon one another, but can definitely have an impact on how the others operate.

1. Patient reform (I explained in an earlier blog post that there is none of this.)

2. Insurance reform

3. Payment reform (In earlier blogs I talked about fee-for-service, bundled payments, and ACOs.)

Insurance reform is a very large portion of the ACA. Many have said this legislation is not about healthcare reform, but insurance reform; there is validity in this statement.

As a result of the ACA, more people than ever, in the history of healthcare, will be eligible for free or low-cost health insurance; shopping for the right coverage will be made easy through the Health Insurance Marketplace. Coming this October, individuals and small businesses will be able to shop for health insurance that fits their budget through these Exchanges or Marketplace.

Enroll America, a privately organized not-for-profit organization aimed at maximizing the number of uninsured individuals in healthcare, has conducted research showing that 78% of the currently uninsured, do not understand the new healthcare laws and are completely unaware of their options. Those individuals say that they would like to learn more in a “just-the-facts sort of way.”

About the Marketplace

The state-based Marketplace will provide detailed information, break down costs and allow users to search and compare private health plans. There will be no hidden costs when choosing coverage and it will be easy to compare prices, benefits and quality of care, side-by-side. Moreover, insurance companies will not deny coverage for anyone due to chronic or pre-existing conditions.

Eligibility

The Health Insurance Marketplace is for just about everyone – the uninsured, small businesses needing insurance and the insured wanting to know their options. You must meet three requirements in order to use the Marketplace:

1. You must live in the U.S.

2. You must be a U.S. citizen or national (or lawfully present)

3. You can’t be currently incarcerated

Tax credits

Tax credits are available as soon as enrollment begins. What’s different about the tax credit, through the Marketplace, is that there will be an obvious decrease in monthly costs.

Individuals have the option to choose how much of their tax credit money they want applied towards their monthly premium. However, the amount they are eligible to receive depends on the size of their family and expected yearly income.

Small businesses may qualify for the Small Business Healthcare Tax Credit. This tax credit will help bring down the costs of providing insurance for employees.

Enrollment

In just a few short months individuals and small businesses will be able to enroll in the Health Insurance Marketplace online, or by calling a toll-free number. There will be experts available to answer questions and suggest plans. The coverage provided through the Marketplace will go into effect January 2014.

The U.S. Department of Health and Human Services offers a free service for you to receive email and/or text message updates concerning your state’s Marketplace. Visit www.healthcare.gov/marketplace to sign up.

Americans are faced with the high prices of healthcare on a daily basis, but could it be related to the lifestyles choices they are making?

The health of our culture has been slowly deteriorating over the last several decades. Yesterday, I heard that obesity is now considered the number one risk factor of an American’s health; it used to be smoking.

• 12% of American adults were obese in 1990. More than 1/3 (35.7%) were obese in 2010

• Childhood obesity has increased by 60% since 1990. 3 million preschool-aged children (5 and under) were obese in 2010

• 67% of American adults drink alcohol, as compared to 56% in 1990

• The number of American adults who smoke cigarettes has declined about 5% since 1990. Today, 19% of all adults in the U.S. smoke cigarettes

These statistics stand as a representation for the health of our culture today. Healthcare reform is centered on addressing these numbers and adopting ways to improve them. This is part of the Triple Aim.

The American Medical Academy is currently working on reclassifying obesity as a disease, rather than a condition. A disease is an interruption of the normal structure of any body part, organ or system that is characterized by specific symptoms and signs that may or may not be explainable. A condition is a state of health or being.

In medicine, it is generally believed that obesity is a condition in which people can change, if motivated. Providers are always trying to help their patients recognize areas of their lifestyle that need to change; improving one’s diet and exercising regularly can go a long way. With the dramatic increase in obesity, this kind of effort is crucial.

Ken Sigman, owner of Health and Benefit Systems describes this debate well; “…obesity correlates to higher risks of diabetes, heart disease, stroke and other metabolic syndromes. And those conditions lead to higher medical and pharmacy costs, more absenteeism, and higher workers’ compensation and short-term disability costs.”

In the era of high healthcare costs, providers are in a unique position to help reduce these costs significantly. We have the responsibility of motivating our patients more.

We must earn the trust of our patients by meeting their health care needs. This trust will overflow into their lifestyle choices.

It is within the context of a provider-patient relationship that we can gain a better understanding of our patient’s lifestyle. Then, we will have the best chance of engaging our patient’s desire to improve their lifestyle. Successful patient engagement will have to be apart of the ACA, if the Triple Aim is to be accomplished.

One of the three main goals of the Triple Aim is to improve the health of populations. From a medical perspective, managing a population’s health is being responsible for a patient, regardless of if they come into the office.

How can healthcare providers improve the health of our culture? This is a question that has been lingering for quite some time now, but soon will have to be seriously pursued.

The Beryl Institute defines patient experience as, “the sum of all interactions, shaped by an organization’s culture, that influence patient perceptions across the continuum of care.”

Patient motivation

The chronic diseases that we are faced with, in America, boil down to lifestyle issues. Hypertension, diabetes and cholesterol, to name a few, are dependent upon diet, exercise and weight. Genetics may play a part in an individual’s struggle, however the major determining factor of chronic disease is one’s lifestyle.

So, how can we motivate a patient to take better care of themselves? As a healthcare provider, I understand what a patient needs to do—change eating habits, manage weight, quit smoking, etc., but how do I go about expressing these changes in a way that facilitates a positive patient experience?

Patient satisfaction

Patient satisfaction has become a large part of hospital’s and provider’s evaluations because it will impact their pay. Unfortunately, many hospitals and providers view this as a popularity contest, thus ignoring whether they are serving their patients well, while meeting medical needs.

At one point in time, all of us have allowed the staleness of an exam room to overtake us. You tell a patient that in order to experience improved health results, they must lose weight or quit smoking. This doesn’t always generate a happy patient; sometimes it results in an angry patient.

Is our job to make patients happier or healthier? Relationships with our patients are everything. Asking a patient to make a significant lifestyle change can be unpleasant for them and quite frankly, is fruitless outside of a relationship. When we lose sight of the fact they need a personal connection, we greatly reduce our chances of the patient being motivated or better engaged in their treatment plan.

Physicians tend to blow off this concept of patient satisfaction, but there is a place where you relate to the patient and convey through a “personal connection” how their lifestyle is negatively impacting their health. The patient’s engagement is most influenced by this “personal connection”.

Jason A. Wolf, Ph.D., President of The Beryl Institute, described a recent healthcare experience when his son was born, “It was the interactions, it was the culture—the people who cared for us each day—that ultimately drove our perceptions and made our experience so great.”

We have to take ownership in our patient’s level of engagement and stop blaming patients when they don’t do what we ask and experience the health repercussions of bad lifestyle choices.

If we are going to help improve the culture of healthcare, we have to be more intentional about how we interact with patients. Successful patient satisfaction really will translate into a patient’s engagement in their treatment plan.

There are three core principles that ACO must strongly pursue in order to survive.

They must be a provider-led organization with a strong base in primary care.

Providers should have a strong leadership position and be collectively accountable to the Triple Aim for their patient population.

Dr. Richard Parker, Chief Medical Officer for the Boston-based ACO explains that a primary care physician leader is needed to communicate with colleagues about care management and utilization of services. Primary care recognizes how to manage a patient’s health on a fixed budget.

Primary care physicians are faced with balancing the budget, as well as delivering quality care every patient visit. This has been part of our responsibility for the past several decades.

When a patient needs to see a specialist, the primary care provider can refer them to the appropriate specialist, who will then communicate back what diagnoses and care plans they determined for the patient. With this kind of communication and coordination, the patient will more than likely receive the most cost effective and quality care needed. This will also, bring more appropriate care, to patients, than they are presently experiencing.

Payments should be linked to quality improvements – called” fee for value”.

The problem is not that people have diseases, like diabetes, it’s the number of poorly controlled diseases that creates staggering costs. If we bring diseases under control, then other procedures and conditions, like amputations, kidney failure, blindness, etc. will decrease dramatically. The key is to treat diseases adequately to drive down costs.

I once heard the former Medical Director of IBM tell of an employee, at IBM, who cost them a million dollars in one year because of uncontrolled diabetes, requiring 17 specialists! The problem is that this situation is not unusual.

ACOs are paid for service and value. A significant revenue stream will be based on how much money they save Medicare. This new payment mechanism is called “Medicare Shared Savings Plan”. If Medicare pays less than expected for a patient population, they will share some of these significant savings with the ACOs who created the savings.

Additionally, ACOs can earn bonuses if spending on patients slows enough to exceed a target. This “slow-down” effect is a result of patients becoming healthier and receiving better care. Improved quality will inevitably lead to lower costs. This quality is the value Medicare is looking for from “fee for value,” not just service.

Bolster data collection to determine the quality being provided and stimulate better quality.

Through this data, it must be proven that patients are not being restricted from any care. The ACA has built this whole argument that we are going to save the culture of healthcare billions of dollars, not because we are going to restrict care, but because we are going to align finances with quality to motivate us to improve care.

This kind of data is critical for an ACO’s financial success. One patient’s disease level, cost of care, and quality of health care produced will determine how much money a system is paid for that particular patient for that year. A provider is no longer paid for each time a patient walks through their door.

I believe that data collection could easily cost hundred of billions of dollars. Payment for providers depends upon the measurement of disease for each individual, how frequently they came into the office, how many healthcare services were used, how much money was spent and saved, how well the patient is doing etc. This amount of data is staggering and it has to be communicated from an individual provider’s office, through a handful of people and eventually to the ones who are paying the bills.

Besides this data collecting determining my financial outcomes, it also had a personal impact. When my office was still on paper charts, no one could easily look at my patients and determine how well of a job I was doing. Once we moved to Electronic Medical Record System (EMR), anyone who was appropriate could access my patient’s data and see which of my diabetic patients were being poorly controlled. That had more impact on me than I expected.

Being able to take valuable data and compare one doctor’s efforts to another was enough to get me working harder. We are all hard wired to do well and try not to come in at the bottom of a group. So once my results were transparent, I automatically worked harder to do a better job. This kind of accountability works for all of us.

The effectiveness and profitability of ACOs have been making headlines the past several weeks.

The Centers for Medicare & Medicaid Services (CMS) reported Tuesday that 9 of the 32 Pioneer ACOs are leaving their program. The program was an experiment to try and change the way medical providers are paid for managing their patient’s chronic diseases.

CMS required their experimental ACOs to notify them of any participation changes by July 15th. Furthermore, the ACOs are only eligible to apply for the Medicare Shared Savings Program (MSSP) until July 31st.

“Dropping from the Pioneer program does not mean that providers are abandoning their investments or wavering on the concept of ACOs. Instead, many are moving from Pioneer to the less risky options in the Medicare Shared Savings Program,” says Blair Childs, Senior Vice President of Public Affairs, Premier Healthcare Alliance. Of the 9 that were reported for leaving the program, 7 have confirmed they will be applying to the MSSP.

All CMS-sponsored ACOs should be commended for their improvement in patient care and satisfaction. Of the 32 Pioneer ACOs involved, every single one of them reported respectable quality measures and were rewarded with incentive payments.

However, only 13 Pioneer ACOs saved their system enough money that could be shared among the providers. What may be scaring some of the lesser successful ACOs away from continued participation in the program is the financial risk when there’s a more flexible contract available, the MSSP.

Presbyterian Healthcare Services is one of the less successful ACOs that has announced they will no longer continue as a CMS-sponsored ACO, nor do they intend to transition to a MSSP.

This past January, Intel Corporation, the computer chip company, entered into an unusual agreement with Presbyterian Healthcare Services for a narrow-network accountable-care style arrangement for its employees. Under the ACO guidelines, Presbyterian will lose money through penalties, if they exceed their projections. They have accepted the risks of this patient population and are committed to keeping it as healthy as possible.

Hilary Clinton’s effort to control patients through HMOs was completely rejected because patient control was her main mechanism to controls costs. The culture felt there was no benefit to individuals to be controlled by the government, therefore the effort failed.

A narrow-network in this case means that Intel employees can only go to Presbyterian for their healthcare needs. If they venture outside of this network, they will be required to pay higher bills, either a portion or the whole thing, out of pocket.

This is one of the main differences between HMOs of the past and ACOs of the future. Patients are not limited to their specific network of care.

Intel now describes themselves as being a self-insured company because they no longer use a health insurance company as the middle man to pay their healthcare bills; they are paying for the cost of their employee’s healthcare directly out of their pockets.

Like many other companies have experienced, Intel found that no amount of pressure would cause their previous health insurance companies to bring down costs; therefore, they have gone to this radical new move.

An employer-driven ACO gives payers control over their employees, who have a vested interest in controlling the cost of healthcare because it means their company will do better. They aren’t just being told to control cost; they have a real reason to.

Walmart is another company who participates in an employer-driven ACO. What they have found is that costs for procedures fluctuate tremendously from one provider to the next. Walmart has hand-picked facilities all over the country that provide the highest quality of care for the most affordable prices.

We are beginning to experience transparency in the healthcare industry that has never existed in the past; it is bringing competition between services.

Out of this desire to inspire competition, in hopes of bringing down costs, employer-based ACOs, in a sense, are the perfect ACO situation because the employees, employer and healthcare system mutually benefit from producing quality care, while containing costs. Everyone wins in this situation; therefore, everyone is motivated to do their best at keeping costs as low as possible.

Intel has summed up this whole debacle perfectly; “…Intel couldn’t sell its computer chips if their quality and costs varied as much as healthcare quality varied.”

The ACA has created significant payment reform. Instead of paying a fee for each service performed, there will be a fixed payment amount allowed for each disease entity per year, no matter how many times the patient needs to be seen. This is known as “bundled” payment.

Under the “fee for service” system, providers are paid for every “event” of sickness. The more sickness a patient has, the more money health care providers make. Finances are aligned with sickness; therefore, the “fee for service” payment system in a subtle way encourages sickness.

Under fee for service, the government has been giving the healthcare industry a blank check. Whatever tests or treatments that are needed, the government covers. Those days are over! The “blank check” has been ripped up.

The new guidelines establish a cap per disease entity. A simplistic explanation is that each disease entity will be allotted a specified amount of money per year and once the limit is reached, providers will not be reimbursed beyond it. What is happening here is a shift of incentives – from sickness to wellness. Providers will make more by creating health, rather than sickness.

This payment reform is radically different; a restructuring of our entire health care system will result. Since there will now be a “cap” (a limited amount of money available for each patient’s disease level), patients will be routed to primary care and wellness to ensure that the money is spent more wisely. This movement to primary care and wellness, by aligning finances to wellness, will not only create better care; it will re-establish primary care as the backbone of our health care system instead of specialists and hospitals, as it is today.

In yesterday’s blog post I introduced Triple Aim, an approach designed by the Institute of Healthcare Improvement to fix healthcare in America. I want to spend the next couple of days focusing on each of the Triple Aim’s main goals, in order for us to develop a clearer understanding of what they truly encompass. What does our healthcare system look like today? In the past couple years, the United States ranked has ranked 31st among the nations for life expectancy, 36th for infant mortality, 28th for male healthy life expectancy and 29th for female healthy life expectancy.

In 2008, 40% of patients with congestive heart failure were readmitted to the hospital within 90 day. We had access to treatments that reduced and controlled this condition more than 80% of the time! These patients were not getting appropriate follow-up and coordinated care. A Health Affairs article stated that our healthcare system lacks memory and this has led us to significant spending in the midst of poor care.

We pay twice as much per individual, than any other industrialized country, yet our healthcare system received a 66% by the Commonwealth Fund Commission. It’s unfortunate that while we pay this much for healthcare, it is much worse than many other countries in the world by comparison. We are the only industrialized country that does not guarantee universal health insurance. We claim that we cannot afford it, yet we spend an exorbitant amount of money on healthcare that doesn’t achieve the quality that it should.

How will Triple Aim help our healthcare system? The first goal of the Triple Aim is better care for individuals. In other words, the care experience will produce better outcomes. One way is through payment reform. We will discuss more about payment reform on Monday.

Currently, if a patient goes to the emergency room for pneumonia, they will receive the appropriate treatment and medication during that visit. Once the patient leaves, they are on their own.

Improved care must have improved coordination. The new experience of care that the Triple Aim is offering will extend beyond the initial visit for an acute or chronic symptom. Not only will a patient receive the appropriate treatment and medication at the time of their visit, a primary care physician will follow-up with them a few days later.

By operating this way, patients will avoid repeat emergency room visits and hospital admissions because they have a primary care physician managing their health and treating them if their conditions worsen. This new experience of care happens over time involving different locations, hence better coordinated care leads to better care.

Did you know that if other prices had increased as quickly as healthcare costs, since 1945, a dozen eggs would cost $55 and a gallon of milk would cost $48?! It is no question that the cost of healthcare is crushing.

The Institute for Healthcare Improvement proposed a challenging systematic approach for changing healthcare, in 2008, entitled “The Triple Aim”. This new, bold, and encompassing goal was embraced by the Affordable Care Act to be its ultimate outcome.

An article published by Health Affairs, as well as Don Berwick, Administrator of the Centers for Medicare and Medicaid Services, describes the Triple Aim’s three overarching goals:

• Better care for individuals – a 2011 report, “Crossing the Quality Chasm”, by the Institute of Medicine describes six dimensions of healthcare performance: safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity

• Better health for populations – focus will be on factors that cause our ill health, such as poor nutrition, physical inactivity, and substance abuse

• Reduce per-capita cost

All three goals have to be accomplished simultaneously in order to fix our healthcare crisis.

Berwick is devoting most of his time to the Triple Aim. He believes this is the key to transforming America’s healthcare system.

I agree with Berwick that all three have to be fixed simultaneously, if we are to reverse this crisis. 45% of adults who have a chronic disease are not getting adequate care and 50% of all adults are not getting recommended care. The staggering costs we pay in America are not hitting the mark and this should no longer be acceptable.

If you are a primary care provider, or aspire to be, there is no better time to be in primary care than now. Primary care is the only discipline in medicine with the training to look at the whole person, not just discrete parts of the person. Also, it looks at all areas of a person’s health – preventive, genetic conditions, lifestyle issues, early detection, acute illnesses, chronic disease management and end of life issues.

As it once was, primary care must become the backbone of medicine again. Patients must have and deserve to have a continuous relationship with a known provider, who will use specialists, hospitals and emergency rooms when it’s appropriate. This is the best way to maintain health, create health, and decrease costs.

Since the ACA is to accomplish all three goals concurrently, I would say that this is why the ACA is a mandate for primary care.

It’s more than demoralizing; it’s distressing that healthcare has been accused of a crime. Much to my dismay, the NY Times has a credible argument. Where do reasonable healthcare costs end and outrageous ones begin?

Time magazine and many other publications have been reporting the shocking numbers individuals are paying for their healthcare. The Affordable Care Act addresses those ever-increasing figures through the Triple Aim:

1. Improve the culture of healthcare

2. Improve the quality of healthcare

3. Decrease the costs of healthcare

I am not arguing whether or not the ACA can accomplish these goals; however, I agree that the cost of healthcare is unsettling when compared to other industrialized nations across the world.

Presently, we are paying close to 18% of our GDP for healthcare and it’s broken. Additionally, it is paralyzing businesses and threatening personal household incomes significantly.

When you look at countries like Denmark, whose population is very satisfied with their available healthcare and only paying 5% of their GDP toward it, you realize something definitely needs to change.

How did we get into this trouble?

I think “fee for service” has been a major offender. The government gives a blank check to the healthcare system to perform an unlimited amount of medical activities. In other words, the healthcare community can look to find sickness and get paid, as much or as little, as they want for trying to fix it based off of how many medical activities they perform.

This reminds me of an article that was published by the NY Times in 2009. Dr. Paul Grundy, the former Medical Director of International Business Machines, Corp. (IBM) shared that IBM paid $1.4 billion in 2008 for garbage. He was referring to the fact that we pay for sickness, rather than health.

After many years of operating this way, our culture has been trained to accept this standard. It is extremely important to understand that the ACA is striving to bring cost control to healthcare, while simultaneously improving the quality of healthcare.

The ACA did not break healthcare as this NY Times article argues. The question we need to be asking is if the ACA can help fix our already broken healthcare system or create more problems?

Through payment reform, we will be noticing a change from the “fee for service” payment system to a “bundled” payment system.

Rather, the government will establish an amount they will pay for specific medical activities. Healthcare professionals will make every effort to provide their very best care below these set amounts.

This holds healthcare professionals accountable for the care that they are providing patients and mutually invests all parties in the healthcare delivery process because everyone’s goal is health, not sickness, which our culture has come to accept.