Health Wonk Review is up at Health System Ed Blog

The Summer Lull edition of the Health Wonk Review is posted at Health System Ed. Here you’ll find a leisurely edition with plenty of explanation and context for a summer read.

Host Peggy Salvatore has featured my post on free markets in healthcare, and for that I thank her.

Advances in care management: podcast interview with AxisPoint CEO Dr. Ron Geraty

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Dr. Ron Geraty, CEO of AxisPoint Health

AxisPoint Health is part of the new breed of care management companies, leveraging new data sources and digital techniques that go beyond the traditional paradigm of nurse call centers focused on a handful of common chronic conditions. Industry veteran, Dr. Ron Geraty (former CEO of Alere) took the reins of the company a couple years back.

In this podcast interview, Ron and I discuss the evolution of care management, the role of digital, and what the future will bring.

  1. (0:11) What’s the current state of care management in the US?
  2. (2:27) How is care management being done differently across populations: commercial, Medicare, Medicaid, dual eligibles?
  3. (5:36) Care management traditionally focuses on 5 common chronic conditions. Has it made a significant difference in those areas?
  4. (8:26) What attracted you to AxisPoint? How is it different from other population health management companies?
  5. (13:08) Who are the customers? Who is drawn to your approach and why?
  6. (15:26) You work with the most vulnerable populations. Do you attempt to influence the social and behavioral determinants of health?
  7. (19:18) What’s at stake for AxisPoint in the debate about healthcare in Washington, DC, especially since you are serving populations that have been a major focus of the ACA?
  8. (22:33) How will digital tools be leveraged for vulnerable populations? Will you still have feet on the street?

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

How to cure patient cancellations. Podcast with QueueDr CEO Patrick Randolph

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I can wait –if necessary.

It takes an average of 24 days for a new patient to get an appointment with a doctor, up 30 percent since 2014. In Boston, it’s 52 days! Physician schedules are full, and yet a significant percentage of appointments are canceled or patients just don’t show up –costing doctors billions in revenue and depriving needy patients of appointments.

These two things are related: with such a long wait the patient may either be cured on her own, go to the ED, die, or just forget about the visit.

Patrick Rudolph saw an opportunity to do something about this problem and started QueueDr to simply and automatically offer patients a chance to fill those open slots. You can listen to him explain in our podcast:

  1. (0:10) What problem are you addressing?
  2. (0:58) Why do you think the problem is getting worse?
  3. (2:25) Bad technology is a problem. What do you mean that your technology doesn’t require anything of the user?
  4. (3:44) What does it look like from the patient standpoint?
  5. (4:54) One of your customers says your product works “too well.” What is he talking about?
  6. (5:58) Do you think this cancellation issue is a standalone solution or should it be a feature in a broader system?
  7. (8:01) You’re not the first one to address scheduling and cancellation as a challenge. How do you compare with other approaches?
  8. (9:46) How would QueueDr work with a policy like charging patients who don’t show up or introducing an open access schedule?
  9. (11:58) Where will the company be five years from now?

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

What free market healthcare really looks like

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Get while the gettin’ is good!

As an economics graduate, MBA, and entrepreneur I’m a fan of the free market system. The invisible hand is a beautiful thing, and it’s certainly been good for me.  A healthcare management consultant and board member, I make my living from the business of health.

Capitalism has a place in healthcare, but in developing policies we should also recognize the limits of free market approaches and be open to the benefits of socialist ideas. For example, before the Affordable Care Act, people with pre-existing conditions or high healthcare costs would experience “job lock.” They couldn’t afford to leave their employers’ group insurance plans even if they wanted to start their own small business. Would-be entrepreneurs used to call me asking for advice –not about business plans, raising money, hiring, or product development– but about how I handled health insurance. Fortunately in Massachusetts this was not a problem, even before the ACA, because we had guaranteed issue (could not be denied coverage for pre-existing conditions) and community rating (premium based on larger group, not individual risk). In most parts of the country, though, it was a problem, and  if the ACA is repealed it may become a problem again.

A recent New York Times article (The Company Behind Many Surprise Emergency Room Bills) provides another example of the limitations of a free market approach. It’s worthwhile for free market ideologues to understand this before setting policy. To recap:

  • Some hospitals hire outside companies like EmCare to staff their emergency rooms. To maximize profits, those companies sometimes decide not to negotiate contracts with insurance companies. Hence they are “out of network” on purpose
  • When patients come in to the emergency department –suffering a heart attack, stab wound or whatever– they are treated by these out of network doctors, who then bill the insurance company at a rate that may be a multiple of in-network rates. This is true even if the hospital itself, and most of its doctors, are in network
  • The insurance company may pass along some or all of the expense to the patient, especially if the patient has a high deductible plan
  • Patients get angry, and a story appears in the New York Times

The Times story ends there, and it’s bad enough. I guess you could argue that the free market is sort of working here. After all, physicians are setting their own rates, and in theory patients could decide to go elsewhere. The consumer making noises helps to bring the market into equilibrium. And maybe the problem is not enough capitalism. Maybe EDs shouldn’t be required to take patients who can’t pay…

What the Times doesn’t say –probably because they don’t know about it– is that there’s an additional capitalist ecosystem that comes into play here. Let’s say a physician charges the insurance company $100,000 for something that would be reimbursed at $10,000 under a network contract. In case you think I’m exaggerating, this kind of thing actually happens –if not with emergency physicians then with ambulatory surgery centers and behavioral health.

The insurance company or third party administrator may then hire a cost containment vendor to ‘re-price’ or negotiate the claim. The cost containment vendor negotiates with a separate “revenue cycle management” company hired by the physician group.

Let’s say for the sake of argument that they agree to a reduced payment of $15,000 instead of $100,000. The cost containment company might take 20% of the savings (20%*$85,000=$17,000) as a commission and the revenue cycle management company might make $1500 or so for their efforts. So everyone in this scheme is happy:

  • The physician still collects $13,500 compared to $10,000 in a network deal. (And in some circumstances if the insurer isn’t paying attention they’ll get the full $100,000.)
  • The revenue cycle management company takes its cut, even if it’s less than the others
  • The cost containment companies makes more than the physician ($17,000 v $13,500). It doesn’t usually work that way but sometimes it does. [Note that I had these numbers wrong until I was corrected in the comments.]
  • And the health plan pays $15,000 rather than $100,000. If the payer is acting as a TPA or ASO rather than bearing risk, they may even get a fee from their employer customer for the cost containment service

While it’s great that so many new jobs and business opportunities are created, this is not exactly the way to hold down the cost of healthcare and improve affordability.

Contrast this scenario with one where the patient is covered by a government program: Medicare or Medicaid. The government determines the fee for services rendered and pays it to the physician. The patient contributes at most a $50 co-pay. The physician may or may not like what he’s being paid, but there are no shenanigans.

If you adore the free market and abhor government interference, maybe the first scenario is best. Having seen it up close, I have a hard time arguing for it.

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

What does GOP think will come after they sabotage (or repeal) Obamacare?

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Comrade Trump, are you listening?

Just after the election I wrote (Goodbye Obamacare? More like hello single payer!) to lay out my vision of where Republican dysfunction and ideology could ultimately lead. At the time I said:

Trump himself has been at least a liberal and frankly more of a socialist when it comes to health care policy, at least based on his earlier writings. Once he learns that the ideas of the conservatives in Congress won’t produce universal coverage, he may well go back to improving –instead of replacing– Obamacare, moving to a Canadian style single payer system, or opening up Medicare for all, just like Bernie and much more radical than Hillary.

The last six months of Republican flailing on healthcare makes it even more likely that socialism will ultimately come to the US healthcare system. Here’s why:

Americans –and that includes Republicans– now expect insurance to be available without restriction or penalty to those with so-called pre-existing conditions. Everyone wants lower premiums and out-of-pocket costs, and Obamacare opponents are beating up on the ACA for failing to deliver. But nothing the GOP is doing is helping advance these goals. Most of GOP proposals actually undermine these objectives.

Meanwhile, Trump and Congress are creating uncertainty about the exchanges and actively undermining them, e.g., by refusing to enforce the mandate, talking about exchanges failing, and using public money meant for promotion of Obamacare to undermine it.

The Affordable Care Act is a moderate piece of legislations, with free-market concepts like health insurance exchanges that conservatives would like if they looked at them objectively, and which were included in order to generate support from some in the GOP.

But with all the chaos, ill will, and sabotage of Obamacare by the Administration, liberals and centrists are now talking about more radical ideas. In particular, the concept of a single payer health system is now being discussed openly and seriously, something that would not have happened if Congress had done the sensible thing and made improvements to Obamacare.

What happens next? If, for example, repeal without replace goes through, then I think we’ll see single payer come up as a mainstream topic in the 2020 presidential election (assuming we are still holding elections in this country by then).

I also expect that rather than move to a Medicare for all model we may see more talk about Medicaid for all. It’s cheaper, because it pays providers less, and coverage is far more comprehensive. It  could serve as a baseline for universal coverage.

The healthcare morass is keeping Republicans from tackling other legislative priorities that supposedly would be easier to accomplish, such as tax reform –or more likely, straight tax cuts. If you’re an opponent of the GOP agenda, then the extended fight over healthcare is not such a bad thing.

I do worry, though, that as the administration continues to flail from the Russia investigations and lack of legislative success, they will resort to desperate tactics that could have dire consequences. In particular I’m worried that the GOP won’t take seriously the necessity to raise (or better yet, eliminate) the debt ceiling. They may try to tie a lot of unrelated issues, including Obamacare repeal, to this must-pass bill. Once the US is in default, all bets are off.


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

Sorry Fred. It will take more than teamwork to fix GOP healthcare dysfunction

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GOP 2017. What a team!

Why can’t the Republican Congress manage to repeal and replace Obamacare, considering the whole party has campaigned for seven years on the promise to do just that? According to Fred Barnes of the Wall Street Journal the answer is simple: the Republicans are not playing as a team. In Barnes’ reality, if the GOP would only treat politics as the team sport it is they could create “a more free-market healthcare system in which people can buy the insurance they want, not what government requires.” It sounds so beautiful I’m sure everyone will put aside their differences and make it happen!

Alas, with two more Republican Senators coming out against the bill the same day the Op-Ed was published, it doesn’t seem that Mr. Barnes is making much headway.

But Barnes has misunderstood the real causes of Republican disarray on healthcare. For his benefit, here are some:

  • The Affordable Care Act is actually a well thought out, moderate piece of legislation, not a looney left-wing one. It contains a variety of market oriented and conservative principles that were designed to encourage Republicans to vote for it. Major facets include the individual mandate (personal responsibility, supposed to be a conservative idea remember?) and the insurance exchanges/marketplaces, where private insurers compete for business.
  • Despite what Republicans say now, there were numerous attempts to bring them into the fold in 2009 and 2010 and enact a bipartisan law. But Republicans decided to stand uniformly against the ACA, showing that there’s plenty of “teamwork” and discipline available, but only when it comes to saying no.
  • Once Obamacare was in place, Republicans did all they could to undermine it: filing frivolous lawsuits, wiping out the risk corridors, lying about death panels, blocking navigators from doing their work, and voting to repeal the law over and over again, but only when Obama was there to veto it. They’re still at it, trying to destroy the insurance exchanges even though Republicans are in charge.
  • Despite talking about “repeal and replace” they never came up with a serious “replace” approach. Most of the so-called ideas were tired talking points trotted out as though they would make a big difference: selling insurance across state lines, enacting tort reform, and promoting drug re-importation. (This is really where the term “nothing burger” should be employed.) House Speaker Paul Ryan’s undeserved reputation as a big thinker should be fully crushed by now.
  • Congressional Republicans have fallen in line behind a president who knows nothing about healthcare policy, has no idea what’s in the House or Senate bills (assuming he even knows how the legislative branch works) and promised “something terrific” but never has and never will explain what it is.

Congressional Republicans should hit the reset button. They should apologize for how horribly they’ve behaved on healthcare policy, and work with Democrats on common sense improvements to the Affordable Care Act. Instead it sounds like the new idea is just to repeal and then spend another couple years trying to figure out what replacement would be.

Truth is, Republican legislators gave up on governing to become the party of no. It worked pretty well in the short and medium term, bringing with it Congressional majorities, the presidency, and a stolen Supreme Court seat.

Now would be a nice time for the GOP to grow up. Healthcare is a good place to start, and if they put country ahead of party they’ll find plenty of Democrats to cooperate. Personally I’m not betting that will happen.

Meantime, maybe Mr. Barnes will start arguing for teamwork when it comes to raising the debt limit. Rah! Go team!

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