Category Archives: Policy and politics

Castlight Enterprise Healthcare Summit: Magic and the President

Castlight Health is expanding beyond its origins in cost transparency, today announcing the Castlight Enterprise Cloud, which includes four “solution centers” — that encompass analytics, incentives, and personalization. The company made the announcement in a grand way, with an Enterprise Healthcare Summit featuring President Bill Clinton, Earvin “Magic” Johnson, Steve Forbes, Toby Cosgrove (Cleveland Clinic) and Castlight executives Giovanni Colella and Naomi Allen.

I had the opportunity to attend, learn more about the company’s latest, and mix and mingle with a high-powered crowd. Here’s my scrapbook:

Magic Johnson reflected on his basketball and business career, while dropping in a few words about price transparency in healthcare

Magic Johnson reflected on his basketball and business career, while dropping in a few words about price transparency in healthcare

Magic Johnson gave President  Clinton a rousing introduction

Magic Johnson gave President Clinton a rousing introduction

I expected Clinton to give a stump speech, but instead he personalized the speech to focus specifically on price transparency and Castlight's role

I expected Clinton to give a stump speech, but instead he personalized the speech to focus specifically on price transparency and Castlight’s role

CEO Giovanni Colella asked Clinton some follow-up questions, and the prez had plenty to say in reply

CEO Giovanni Colella asked Clinton some follow-up questions, and the prez had plenty to say in reply

Once Giovanni was done with the President he found some time for me

Once Giovanni was done with the President he found some time for me

The Cleveland Clinic's CEO Toby Cosgrove took part in a panel discussion. His fellow panelists were a little surprised when he called for provider monopolies

The Cleveland Clinic’s CEO Toby Cosgrove took part in a panel discussion. His fellow panelists were a little surprised when he called for provider monopolies

Steve Forbes never got to be president but he did get to speak in the same conference as one

Steve Forbes never got to be president but he did get to speak in the same conference as one

Castlight's Naomi Allen laid out the details of the new Castlight offerings

Castlight’s Naomi Allen laid out the details of the new Castlight offerings

American Social Club played some great crowd pleasers

American Social Club played some great crowd pleasers

82 Mercer might never be the same after Castlight's conference wraps

82 Mercer might never be the same after Castlight’s conference wraps

By healthcare business consultant David E. Williams of the Health Business Group

Why the individual mandate is important

Be careful

Be careful

As a reasonably young and healthy person, freelance social worker Tammy Boudreaux wasn’t a big believer in health insurance. But then she hurt her finger. She paid out of pocket for emergency room care, but then when the finger didn’t get better she realized she’d have to pay a heck of a lot more for additional medical treatment and rehab.

Thanks to Obamacare she was able to get reasonably priced health insurance even though she had a pre-existing condition –in her case a finger that was certain to need surgery and therapy. A week after signing up for an Obamacare plan on the exchange she had surgery followed by rehab and other services.

I’m glad Tammy was able to get insurance and that she’s now a proponent of Obamacare. But let’s face it, Blue Cross isn’t going to do so well if everyone is like Tammy, only signing up once they need services. Blue Cross lost money on Tammy right away. If they’re lucky she’ll be profitable a few years down the road if she sticks with Blue Cross and gets and stays healthy.

For insurance to work, there needs to be a broad pool of customers who cost very little to make up for the few who cost a lot. That’s the purpose of the individual mandate, and it’s a good reason for it.

You can’t wait to buy fire insurance until you smell smoke and you can’t get life insurance after you’ve been diagnosed with a terminal illness. As a result people sometimes have losses for which they can’t make a claim. But health insurance is different. As a society we aren’t –and shouldn’t– be willing to tell people “tough luck” if they didn’t buy health insurance. But it’s not fair to health insurers to make them take all sick people who are sure losses without giving them the benefit of more customers who are healthy.

Republicans have been very slow to lay out the “replace” part of “repeal and replace.” One reason is that while it’s easy to get people riled up about the individual mandate, it’s hard to propose a fiscally responsible alternative without shutting people out of the system. The Republican plan of 2014 calls for insurers to accept customers with pre-existing conditions who have maintained “continuous coverage.” In other words, if someone acts like there’s an individual mandate by buying insurance before they need it, they can continue coverage once they get sick. If not they’re shut out. Doesn’t sound like much of an improvement, does it?

 

photo credit: watchingfrogsboil via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

 

Are we picking on VA hospitals too much?

How long do you think we'll have to wait?

How long do you think we’ll have to wait?

Ugly stories about waiting lists and poor care in VA facilities are coming out in the press. The VA’s head, Eric Shinseki has been run out of town. And investigations are underway into what’s going on and how to fix it.

The Wall Street Journal (Veterans Affairs Hospitals Vary Widely in Patient Care) used the VA’s internal data to compare the worst VA hospital (Phoenix) with the best (Boston) and to compare both with other VA hospitals that earn five stars. There are dramatic differences in areas like bloodstream infections and pneumonia rates and significant differences in death rates. The VA can and should use this information to share best practices, make improvements, reward those who do well, and weed out those who are not up to the task.

Waiting lists and uneven quality are a serious problem and they need to be addressed. These problems also play into an anti-Washington narrative about the poor quality and lack of accountability in government provided services compared to the private sector. I wouldn’t want to be treated at the Phoenix VA. Would you?

On the other hand, the Journal article points out that the VA measures and in some cases reports more on the performance of its hospitals than do private sector providers. In truth, there is not enough information to say whether the VA system is worse or better than the private system as a whole or even to compare the VA with individual private sector hospitals.

Some well regarded public sector providers in other parts of the world do a good job reporting on waiting times for appointments and procedures. See for example, the Waiting Times home page on England’s National Health Service website, which provides detailed, frequently updated statistics on waiting times.

Compare that with what we have in the US: a survey of physician practices taken a year ago in five specialties, conducted by a physician recruiting company looking for publicity. Even that survey shows we have serious problems. For example, in Boston it takes 10 weeks to get an appointment with a dermatologist or family doctor, we’re told. In a government run system like the VA or NHS, the public or elected officials can demand improvement. By contrast, who is going to force Boston doctors to see patients sooner?

photo credit: Rennett Stowe via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

Charlie Baker and Mark Fisher on healthcare

Republican candidates for Governor of Massachusetts discussed healthcare and other topics in their debate yesterday. If you’d like to hear more about what they think about healthcare, listen to the interviews I did with them on the topic earlier this year.

Charlie Baker speaks with the Health Business Blog.

Mark Fisher speaks with the Health Business Blog.

Medicaid expansion rejection starts to bite

What happened to my hospital?

What happened to my hospital?

In its ruling upholding the Affordable Care Act, the Supreme Court did allow states to opt out of the expansion of the Medicaid program, which serves the poor. My feeling at the time –and still today– is that you’d have to be pretty ideologically rigid and stubborn or just plain uninformed to turn down the expansion. The feds pay 100 percent of the expansion’s cost in the first three years and at least 90 percent thereafter.

Try hard and you can find reasons to oppose the expansion — maybe the feds will go back on their word, maybe Medicaid will make people lazy– but these are hypothetical and farfetched. Meanwhile, the costs of not expanding Medicaid are very real, in the form of billions of dollars in foregone funding for the provision of healthcare to the poor and the undermining of communities that lose their hospitals.

Twenty-four states, including almost the whole South, took the stubborn path and have so far refused to expand Medicaid. They’re starting to experience the consequences.

A George Washington University study reveals that more than 1 million patients who use community health centers will lose out on coverage because their states refused to expand. One-third are in five Southern states: Alabama, Florida, Georgia, Louisiana and Mississippi.  That’s putting a strain on community health centers, many of which will lack the funding to provide needed care.

Meanwhile a Wall Street Journal article (Rural Hospitals Feel Pinch) highlights the strains confronting rural hospitals as the world changes around them. The article features a hospital in a rural North Carolina community that’s closing. In the 21st century, losing a hospital is a major blow for a town or rural region. It’s often the biggest employer, a major driver of other local businesses, and a key to quality of life. Once it’s gone it’s not coming back any time soon.

Failure to accept the Medicaid expansion isn’t the only reason rural hospitals are struggling, but it’s a big part of the equation. Southern politicians are trying to make policy changes to shore up rural hospitals, but their efforts are a drop in the bucket compared to the funds that flow from the feds.

Rural America is the most Republican part of the United States. At least on Medicaid expansion, many rural citizens are poorly represented by the people they vote for. There’s an election coming up in November and folks would be wise to re-examine their assumptions before casting their ballots.

photo credit: Range of Light via photopin cc

By healthcare consultant David E. Williams of the Health Business Group

One more way ObamaCare may lead to single payer

Will employees be dumped into exchanges?

Will employees be dumped into exchanges?

One reason opponents of ObamaCare are so vehement is that they fear the Affordable Care Act may lead the United States to a single payer system. They’re not entirely wrong. (For more reasons they’re vehement check out my earlier post on the topic.)

In Employers Eye Moving Sickest Workers To Insurance Exchanges, Kaiser Health News’ Jay Hancock describes how employers could potentially “dump” high-cost employees into the public exchanges. Here’s how it might work:

Self-insured employers pay their own claims rather than paying premiums to health plans to manage the risk. They use  health plans as third party administrators rather than insurers. If costs are kept under control they do well, but if costs rise the employer bears the brunt. Most insured employers have thousands of employees and the majority that are reasonably healthy counterbalance the few with very high expenses. But since some chronic illnesses (hemophilia is one example from the article) can cost hundreds of thousands of dollars per patient per year, it could still be advantageous to avoid having those few patients on the rolls.

Under the Affordable Care Act it may be possible for employers to encourage such patients to migrate to a public exchange. For example, an employer could raise cost sharing on expensive drugs, making them unaffordable. At the same time it could pay for an individual employee’s platinum level policy on the exchange for a few thousand dollars. The company would pay less and the employee would pay less. The high costs for the employee would be spread more broadly over the exchange population or picked up by the federal government.

I don’t think it’s such a bad thing, because I don’t think we should make it difficult for individuals with high health costs to get jobs or to afford coverage.

The article points out that it’s surprising the ACA allows this type of behavior, considering that employers are not allowed to push older employees into Medicare and that employers have had to repay claims for employees who were pushed into high risk pools.

Maybe the ACA should be amended to discourage pushing high cost employees into the exchanges, but I don’t see it happening. Opponents of the law are still not willing to make improvements to it, since that would mean accepting the ACA’s permanence. And many supporters of the law may be happy or at least –like me– ambivalent about the existing provision.
photo credit: id-iom via photopin cc

By healthcare consultant David E. Williams of the Health Business Group