Hank Stern of InsureBlog hosts the latest edition of the Health Wonk Review. This one’s really good folks. Read it today, because you won’t get another one like this for at least the next 78,000 years.
The President, by his own admission, did “fumble the ball” on the rollout of the major elements of health reform implementation. Not only is healthcare.gov not functioning as it should, but people in the individual market are having their health insurance coverage cancelled–despite repeated assurances that if they liked their current coverage, they could keep it.
While that is absolutely a problem, it needs to be put into perspective. For each person in this country who is in the individual market and therefore at risk of having their insurance plan cancelled on them, there are three people who are–and have been–uninsured. It strikes me as somewhat ironic that while we are rightly upset about the broken promises of the Obama administration, we are not three times as outraged by the reality that has confronted the uninsured for decades.
Moving beyond that, it is important to understand that this outcome has been foreseeable ever since the ACA was passed. The law specifically grandfathered plans that were in existence at the time the law was enacted and that did not make significant changes to benefits. Well, that was in March 2010, and there have been quite a few changes between then and now, including the offering of entirely new plans, many of which do not meet the requirements of the ACA. The insurance companies knew that at the time they offered those plans, but they certainly didn’t point it out. Although they are making it clear now.
PBS Newshour ran a wonderful piece on a women who twice voted for Obama, but had her coverage cancelled. She’s a smart lady–an attorney in the DC area–and she is none too pleased. You can watch the video here. One of the things that struck me is her displeasure that the only difference between her plan and the new requirements is that her old plan didn’t cover maternity care or pediatric care. She is nearly 60 years old, she says, so why should she need insurance that covers either of these things? Well, there’s an easy answer, but it isn’t likely to change her opinion. The answer is that we are moving away from a world based on experience rating of insurance premiums and towards a world based on community rating of premiums. That means that we put everybody into the same risk pool, and a lot of those people probably do have kids or may need maternity care. Consequently, everyone shares in the expense. By similar logic, men should never have to pay for maternity care as part of their insurance premiums, even though they are required–in some capacity–to create a pregnancy.
But even though there are very understandable–if not wholly anticipated–issues with the law, the White House is right to fix them. Specifically, the President has now said that insurance companies that were cancelling plans that didn’t comply with the ACA’s minimum benefit standards may now be permitted to renew those plans–in some cases lasting into 2015. The caveat: Insurers have to explain to enrollees what specific benefits they will lose if they revert back to a formerly cancelled plan. Buying one of these plans is only an option if you had your plan cancelled on you. That’s to be sure that people don’t flock to substandard plans in lieu of moving into an ACA-compliant plan. And there’s one more catch: whether or not a cancelled plan gets reinstated will ultimately be at the discretion of both the insurer and the respective state department of insurance. In other words, the Obama administration is allowing an exception to permit renewal of cancelled plans, not requiring it, which would take Congressional action.
Right now, states like California, Georgia, and Iowa aren’t sure how to proceed, and many of the insurance companies aren’t happy about this new wrinkle at all. Meanwhile, Congress is mulling its own course of action, with even Congressional Democrats uncertain of whether or not the President’s proposal is sufficient.
What does this mean for you? Well, for about 95% of Americans, it doesn’t mean anything. You weren’t having your insurance coverage cancelled, and you can’t buy one of the non-compliant plans even if insurers and state regulatory agencies decide to permit them back on the market. But, for the 5% of Americans who do find themselves affected or potentially affected by this aspect of the ACA, it is important to pay attention. If a non-compliant plan once again becomes available to you in your state, carefully consider if the benefits you’ll lose are worth the savings you’ll gain.
UPDATE: Many of the links to the great posts contained here were originally broken. I have updated them and they should now be working. This technical hiccup is simply in keeping with the theme of this edition of HWR.
For health wonks, the month of October has been the stuff of legend. Love it or hate it, the implementation of key insurance-related provisions of the Affordable Care Act has been riddled with controversy. First, the health insurance exchange website healthcare.gov encountered a glitch–much in the same way that Apollo 13 encountered a glitch on its trip to the moon. Then, news trickled out that only 6 people signed up for coverage on day one. Meanwhile, reports rolled in of people obtaining inexpensive coverage through the mostly-successful state operated exchanges. Only to be followed by the news that some 3.5 million people got notified that their current insurance policies were being cancelled and that they would be required to purchase a new policy on the exchange. Consequently, the President got called out for breaking a promise to the American people, giving this edition of the Health Wonk Review it’s theme.
Just in case you’ve somehow managed to miss the criticisms being hurled at the Obama administration during the most recent botching of ACA implementation, I offer you the words of John Goodman, who writes a post entitled “The Selling of Obamacare” on his NCPA Health Policy Blog:
“As for the president himself, he is a complete enigma to me. I’ve never felt that I understood him. He appears to have looked directly into the TV camera and said something that was blatantly untrue (in the words of Joe Scarborough) “over and over and over and over again.” You have to go all the way back to Richard Nixon to find something comparable.”
That’s one way of looking at things, but it’s certainly not the only way. Over at the Colorado Health Insurance Insider, Louise Norris counters with these words:
“Much has been said recently about how the ACA is causing a tidal wave of policy cancellations, and resulting in people losing coverage that they would prefer to keep. The frustrating part about this – as has generally been the case with every big uproar about the ACA – is that we’re not really getting a complete picture of what’s going on, and it’s hard to see the reality through all the hype and hysteria.”
Similarly, over at the Health Insurance Resource Center Blog, Maggie Mahar writes about the good news, explaining that while the media is spending lots of time focusing on Healthcare.gov‘s technical issues and warning of disaster or train wreck, they’re overlooking successes in 14 states where “the marketplaces were humming.”
Beyond the world of the exchanges, we still need to be concerned about Accountable Care Organizations (ACOs) and the Medicaid expansion–two major efforts designed to shift the system from volume to value and expand coverage, respectively. On the subject of ACOs, David Muhlestein writes a “Contributing Voices” post on the Health Affairs blog. David offers three potential reasons for the slowdown in ACO growth and concludes that the primary explanation is that there is yet no proven model to follow. He says that a crucial metric for future growth will be the renewal rate for existing ACO contracts: “If organizations are able to realize enough savings that they can remain with their ACO contract, then that is a strong indication to potential ACOs that a viable model exists that can be emulated.”
Meanwhile, Joe Paduda gives a quick update on what states are where with the decision to expand Medicaid, and predicts most will eventually expand Medicaid, because the financials are just too compelling. I tend to agree, but I think the timing of that decision will remain a political issue. As soon as the coast is clear for red states to take the money without looking like they are flip-flopping, they’ll opt-in.
And, before we shift gears, Kelley Beloff writes “You’ve Sold It, Now What Happens” over at the InsureBlog. Kelley is a Certified Medical Office Manager, and she explains the interrelationship between co-pays and EMR, and how patients can be their own best advocates.
But not everything in health policy involves health insurance. There are other issues with access to care that need to be seriously considered, and that the ACA does very little to address. At the Health Business Blog, David Williams asks whether or not veterans have timely access to mental health care. According to David, lots of veterans are not getting mental health appointments within 2 weeks according to data from the VA. No one knows how this compares to the access available to the general population, because there is no systematic tracking of appointment wait times. That’s in contrast to socialistic systems like the UK, where a great deal of data is published on wait times.
There’s also confusion in Medicare according to David Wilson of Innovative Health Media. Wilson writes about how Medicare’s Annual Wellness Visit (AWV) is confusing patients all around the country. He discusses what to expect from an AWV, and how you and your physician can use it to maximize your health.
On the supply side, Peggy Salvatore writes about the Challenges of Healthcare Training in an Uncertain World over at the Healthcare Talent Transformation blog. According to her, virtually every executive in a hospital system, a pharmaceutical, biotech or device manufacturer, or a health insurance company is trying to read the tea leaves and come up with a plan for staffing, purchasing, customer demand, vendor pricing, building and maintenance and long-term infrastructure. But all of this planning is occurring within the framework of an uncertain regulatory and reimbursement climate.
Also on the supply side, Roy Poses, who writes at Health Care Renewal, takes a look at the University of Pittsburgh Medical Center’s attempt to, in his words, “Make its employees disappear.” In his post, Roy asserts that “true health care reform would require both more leadership accountability and less power concentrated in large health care organizations.” I think he might be onto something…
Sometimes we also do things like get excited about health information technology and the potential to revolutionize the way we deliver care. In that arena, both David Harlow and Jaan Sidorov delve into health apps. Harlow writes about how mobile health apps will not realize their potential unless they can reliably engage patients. He asserts that developers should enlist patients in the effort and patients should be able to share data about their experiences as freely as they like. Sidorov reviews a recent peer-reviewed JAMA articles on health apps and goes a few steps further with some interesting insights of his own.
For the really big picture, we turn to Jason Shafrin, the Healthcare Economist, who provides a nice post on physician visits in Germany. In his post, Jason answers questions like: “How does the German government pay physicians to care for patients?” “Will a recent reform reduce access?” “And what does this tell us about the future of the Affordable Care Act in the U.S.?”
Lastly, in worker’s comp, controlling medical costs is critically important, but is a single-minded focus drowning out some of the management basics and letting employers off the hook? In Back to the Future, Tom Lynch of Workers’ Comp Insider reminds employers that they need to be in the driver’s seat to truly manage their workers comp program.
Perhaps one of the most frustrating parts of being President is that your every waking moment is documented. Consequently, when you say something, and it subsequently turns out not to be quite true, you can expect that your opposition will take advantage of the opportunity to make you look like the American people can’t trust you. That’s precisely what has happened in the last week or two as some 3.5 million individuals report receiving cancellation notices from their insurance company, despite President Obama’s assurance early in the health reform debate that if you like your coverage, you can keep it.
There’s no disputing that the President overstated things and that his words are being used against him, but the issue is a bit more complex than that, and that’s what I’m going to address here. In particular, I want to move past the idea of broken Presidential promises and focus instead on the details of why insurance companies have been cancelling policies and what it means for the individuals affected.
The simple explanation is that the plans that were cancelled did not meet federal requirements under the ACA. This could happen for a number of reasons, but the primary one is that the plans did not meet the minimum actuarial value of 60% and/or did not cover all of the essential health benefits outlined in the law. That means, to put it even more simply, that individuals covered by these plans would be underinsured. But to people who were fortunate enough not to have to test the limits of their coverage, the inadequacy of their benefits isn’t apparent. In fact, one might argue that the coverage was perfectly adequate in practice, if not in theory.
So what’s happening now? The ACA is making these less than adequate plans illegal, and requiring individuals to obtain more robust coverage. Of course, the big concern among consumers is that this may be more expensive. Whether or not that’s the case will depend on numerous factors like where the individuals live, how much money they earn, and whether affordable coverage is available to them through an employer. Depending on the answers to those questions, individuals may find that they are eligible for Medicaid at no cost to them, eligible to purchase heavily subsidized private coverage through the health insurance exchange, or able to obtain affordable coverage through their employer. For many individuals, the price they’ll pay for insurance will go down. Of course, for others it will increase. But in all cases, the individuals will have substantially better coverage that will be there for them in the event that they ever need it, and that’s the true purpose of having insurance.
For those who want a more detailed understanding of the issue, I highly recommend two pieces by Jonathan Cohn. The first will provide you an overview. The second will give you some anecdotal insight into the complexities of the issue.
As the health insurance exchanges opened for enrollment just days ago, the federal government, including the President and the Department of Health and Human Services (HHS), had to acknowledge that it was not technologically ready. The IT infrastructures by which individuals tried to sign up for health insurance crashed and were unavailable throughout the first day and the weeks after. Those same sights were supposed to track enrollment, but proved to not be as well tested and far more expensive than originally anticipated. However, despite the shortages and disappointments with government IT readiness for exchange websites, there was a surge in US-based startup companies that demonstrated just how innovative and forward thinking technology can be in the health care arena. Nine new companies, all curated through BluePrint Health were introduced at that same time three weeks ago on “Demo Day,” and were ready to show the new frontier of health care, and how to transform care delivery through technology.
Health IT Incubators Driving Innovation
Blueprint Health is an accelerator program geared towards health care companies that want an intensive three-month mentorship to help find customers and capital, and learn from leading industry experts. The companies that are selected for the program range from individuals with a clever value proposition to well-established organization leaders that have existing customers, investors and are generating significant revenue, but with new ideas. According to Doug Hayes, a Principal at BluePrint Health, “We are seeing an acute need for innovation at the seed stage of the health care ecosystem. With top-down changes in regulations and quickly shifting incentive structures, the most successful companies will be those who can nimbly adapt.”
He asserts that what makes BluePrint successful is that it is, “uniquely positioned to attract, identify, and support the entrepreneurs that fill the gaps of service left in the wake of massive industry changes.” The accelerator program promotes the mindset that new businesses should not have to focus exclusively on fundraising. Hayes says, “Building a company is extremely difficult, and a founders’ time is best spent on customer and product development, not fundraising.” With that mentality, BluePrint does not use many pre-established filters when evaluating the near 1,000 applications it receives each year, but instead concentrates on business models.
The nine particular startup companies that were cultivated during the summer of 2013 range from Healthify, which focuses on creating platforms that connect and standardize medical homes to treat social needs to Board Vitals, an organization that improves the testing system of our nation’s providers. Each of these new businesses gives hope to innovators and entrepreneurs.
Artemis is a health care analytics firm specializing in benefit claims. With employers spending billions of dollars on health care, benefits managers need more information than the historical, once a year paper reports of the past. With the Artemis platform, benefit managers have graphical, real-time updates for claims and assessments. The creators claim that that deploying its tactics not only saves money for organizations, but also heads off future costs through prevention and determination of key cost drivers.
Board Vitals brings together publishers, universities, and top physicians into a single digital platform for medical specialty education, with pass rates that are 10% higher than the national average. According to co-founder, Dan Lambert, “Content is continually voted up and down, meaning that the very best material comes to the top and outdated or incorrect content is voted out.” His partner, Andrea Paul added that their aggressive, but attainable, goal is to have materials for 20 of the 35 specialties in 2014.
The founders of CredSimple created a system to make the mandatory credentialing of physicians cheaper and more efficient. According to co-founder Garry Choy, at present, credentialing takes two to three months per physician and hospitals spend millions a year on the routine, but inefficient process. CredSimple uses an impressive 214 data sources to verify credentials, saving all provider parties time and resources, with downstream positive implications for entire hospital systems.
Pharmaceutical companies strive to gain pricing power and market share using genetic information about how patients respond to drugs. Genterpret, started by two system biology PhDs, links genetics to drug responses in one-third of the time (six months) of previous genetic testers. The faster turn-around time and vast outreach program created by the founders suggests that the Genterpret technology can soon be applied to thousands of diseases, improving health outcomes and saving money.
After years of working in Baltimore health clinics, the creators of Healthify joined forces to start a company that addresses social needs such as food insecurities to improve health in communities. Medicaid spending on medical homes averages about $15 billion, much of which is spent on social needs. The data collected by Healthify will become vital as medical homes and accountable care organizations begin to address social needs as integral to overall health and well being.
ReferBright helps health practitioners with digital marketing in a world full of medical advertisements. The goal, according to the founders, is to improve outreach and referral rates for various kinds of professionals. Additionally, the automated system makes updating personal information easy for practitioners and makes vetting of practitioners easy for hospitals, knowing the information on ReferBright has been inspected and verified.
According to co-founder, Jarrod Wolf, SpotMe, “allows employers to reward their employees for attending any fitness facility, running in races, or for using fitness apps and devices. When the barrier to incentives are removed–like eliminating paperwork and providing immediate rewards–and employees are given the flexibility to choose how they engage in fitness, then program participation rates skyrocket.” This focus on wellness and fitness programs is to improve health outcomes and lower health costs through incentives, monetary and physical.
The premise of Staff Insight is to increase workforce productivity, specifically through hospital leadership being able to understand and staff facilities to the optimal levels. The company aims to use real-time dashboard to identify staffing levels in units, test baseline productivity, set new benchmarks for productivity and ultimately save revenue for facilities by optimizing productivity. The founders claim that early adopters have already seen a two to four percent increase in productivity.
WellTrackOne conducts a Medicare-approved personal assessment that hospitals can use to track patient data and identify potential risk factors. To lessen the administrative burden and disruption to the workflow, WellTrackOne claims that it can integrate all electronic health records, from multiple systems to improve data and health outcomes.
The Future Of Health Technology
Despite the federal governments success in getting support from professional athletic organizations and celebrities like Jennifer Hudson, the technological infrastructure just wasn’t ready for consumer usage. In contrast, Doug Hayes says that a key reason BluePrint startups were ready on Demo Day is due to the mentor community and outreach.
He claims that a by-product of their focus on business models and portfolio is that it, “includes many enterprise solutions. The long sales cycle and disparate channels within health care makes enterprise sales an especially tough nut to crack. However, our experience within enterprise and our mentor community, 150 strong, makes us especially well positioned to help founders sell into large payers, provider networks, pharma, and other enterprise customers.
Jaan Sidorov hosts the hilariously titled “The President Says You Should Ignore This Health Wonk Review” at his Disease Management Care Blog. Read it and laugh. Or cry.