The Return of Open Enrollment

It’s hard to believe, but we’re getting close to the end of 2014–the first year that the major provisions of the Affordable Care Act (that is, the Marketplace and the Medicaid Expansion) have been in effect. That means one thing: open enrollment is about to be upon us once again. For those of you who are still uninsured, or who enrolled in a plan through a state-based or federal health insurance exchange (the Marketplace) at the start of the year, it’s time to take action. Open enrollment begins on November 15th. If you’re uninsured and want to enroll in a plan for the first time, this is your chance. If you’re in a Marketplace plan and want to change to a different Marketplace plan, this is the first day you can do that. And, importantly, if you’re in a Marketplace plan and you want to keep that coverage, you’ll need to take action during open enrollment to confirm your coverage.

To ensure that you have coverage beginning on January 1, 2015, you’ll have a month to take action once open enrollment begins. Let me say it again: You must enroll by December 15th to ensure that you have coverage on New Year’s Day. That’s because, no matter whether you enrolled last October or waited until March, all current Marketplace coverage terminates on December 31st. If you take action by December 15th, you’ll be able to maintain continuous coverage. If not, your coverage is likely to lapse. However, for the procrastinators among you, the open enrollment period continues until February 15th. If you do not enroll in a plan by February 15th, you will not be able to obtain coverage through the Marketplace for the rest of the year unless you experience a change in circumstances like getting married, having a child, or losing your job. However, Medicaid is the exception. There is no open enrollment period for Medicaid coverage and you may apply for it at any time. Still, it’s best not to experience a gap in coverage, as you never know when you might need it. After all, that’s the purpose of health insurance. For additional information on obtaining coverage, take a look at this helpful information.

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Why You Should Be More Afraid of the Flu Than Ebola

I’m back in Iowa today, after spending most of last week in New York City. I was visiting my sister, who lives in the 400 block of West 148th Street. You can imagine my surprise when I pulled out my phone while having a slice of pizza after an evening of live music at The Outlaw Roadshow and saw that there was a case of Ebola in the city. Surprise took an ever so slight turn into fear when I learned that the infected individual lived in the 500 block of West 147th Street, and had ridden the same subway line as we had. Then my rational mind chimed back in with all of the facts about how Ebola is and is not transmitted, and how improbable the outcomes I worried about actually were. Still, I washed my hands very thoroughly when I got back to the apartment. Sure, that’s not a bad thing to do for a host of reasons after a night out in the city (especially as we enter flu season), but to be honest, there was still a little tinge of fear motivating my actions.

What I was experiencing was the rapid oscillation between the two types of thinking envisioned by dual process theory: a fast thinking, error-prone type of gut instinct, and a slow thinking, less error-prone type of reasoned thought. The thing is, while I’m not an infectious disease specialist, or even a medical doctor, I do have a biology degree and advanced training in public health, which gives the slow thinking part of me something to process. For others, it is easier for the fast thinking part of the brain to dominate. This is especially true when the thing we’re thinking about evokes fear, as Ebola most certainly does because of how lethal it tends to be. Much has been written about how difficult it is to spread Ebola, how unlikely it is to catch it, and how useless it is to worry about it. But, if you’ll notice, that hasn’t done much to alleviate much of the fear experienced by the public, or the overreactions taken to quell that fear by instituting mandatory quarantines for health workers returning from Western Africa–including the now notorious case of the nurse in New Jersey.

Instead of offering yet another post that says “Stop worrying about catching Ebola,” I want to write a post that reframes the discussion much like the way Amazon.com sells complementary goods. They use a “Customers who bought this item also bought this other item” approach. So, think of this as the “If you’re scared of catching Ebola, you should also be even more scared of catching the flu.” Now, I could pick a great number of other accidents, illnesses, and conditions that are more likely to be experienced by the average American than Ebola, but given the time of year, I think the flu highly appropriate. Now, many people very quickly say “The flu may be spread more easily than Ebola, but it isn’t as deadly as Ebola if you catch it.” This is a matter of perspective. It is true that the flu is typically less lethal. We speak of the case fatality rate–that is, of the people who have the disease (the cases), how many die? For flu, the estimates of the case fatality rate are somewhere between 0.1% and 2.5%. However, there is also the H5N1 strain of avian influenza, which the World Health Organization estimates has a case fatality rate of roughly 60%. By comparison the average Ebola case fatality rate is about 50% (ranging from 25% to 90% historically). So, yes, the typical flu is far less fatal than Ebola, but there are strains of flu that appear to be just as fatal as Ebola. We should be especially worried about such high fatality, easily transmitted diseases, but I don’t need to pick something so exotic to make my point.

For now, let’s focus on the typical seasonal flu–and let’s assume the 0.1% case fatality rate. We also know that from year to year anywhere between 5 to 20% of the U.S. population contracts the flu. The current U.S. population is 319.2 million people. So, if we multiply that figure by 0.05 or 0.2, we estimate that between 16 and 64 million people in the U.S. will get the flu this year. Those are our cases. Then, remember, we assume that 0.1% of those cases will result in death. So we multiply again, and predict that between 16,000 and 64,000 people in the U.S. will die of the flu this year. By contrast, there have been 4 confirmed cases of Ebola initially diagnosed in the U.S. this year, and only one of those persons has died. So, even if we use this most conservative estimate of flu mortality, the flu is 16,000 times worse than Ebola on a population level. It all comes down to the fact that on the individual level, case fatality rate–the lethality of the virus–is the most important factor in making us fearful (it tells us our rough probability of dying from the disease if we contract it), while on the population level, case fatality rate is only part of the story–ease of transmission can lead to much worse outcomes in the aggregate (because so many more people contract the disease to begin with). So, I’m not saying don’t be worried about Ebola–it is a truly scary disease. I’m just saying don’t be complacent about the flu just because it seems less deadly on a person-by-person basis. It is possible that more Americans will die from the flu this year than there are cases of Ebola worldwide, and we have the ability to prevent that. Remember that there is a vaccine to guard against the flu that can keep you from getting sick, but which may also prevent others from getting sick or dying as your vaccination helps to break the transmission cycle. Perhaps, if we were as scared of the flu as we were of Ebola, we would do something about it. In fact, University of Chicago professor Harold Pollack recently took to Twitter to offer people $10 if they’d simply go get a flu shot. He’s willing to spend up to $1,000 to put his money where his mouth is, and hopefully others will pick up where he leaves off. So, if fear’s not your motivator, maybe a free lunch is. Just remember to wash your hands before you eat.

 

Health Wonk Review Is Up

It is a drizzly gray day here in New York. The perfect weather for a good cup of coffee or cider and the Falling Leaves edition of the Health Wonk Review hosted by Louise at the Colorado Health Insurance Insider. Go grab that warm beverage and give it a read here.

 

8 Things CFOs Must Know About Health Reform

Whether a Chief Financial Officer is running the fiscal operations of a hospital system, an insurance company or a company that simply employs individuals with health coverage, the decision-making process for sustainability is changing at a rapid pace. However, after years of hearing about reformation in the health system, broad, sweeping and revolutionary changes are finally happening. Major shifts are also occurring in the population, as well as technological advances that will disrupt the entire premise of a four-walled institution for care and the very model we use for health delivery.

Health care in the US is a business – a multi-billion dollar business – and understanding the financial implications of health reform will make or break every CFO. Knowing that health access, demand, quality and payment changes are inevitable there is an immediate need for CFOs across the ecosystems to embrace and plan for transformation.

1. You have too many beds.
   While many hospital leaders won’t accept this at face value due to lengthy wait times, surgical demands and desire to shift beds, the truth is there are too many beds in a lot of hospitals. Between transferals to the outpatient setting and telemedicine, the need for expensive inpatient beds is declining. Additionally, hospital leadership are increasingly finding that they face problems with state authorities when they apply to move beds. Most recently at the University of Chicago, where 338 beds were being used for a 304-person utilization pattern, the state rejected a University application to move surgical beds.
2. Food, housing and transportation of patients is your problem.
   As Americans begin to define and attempt to tackle community and population-based care, the access individuals have to quality food, affordable housing and efficient transit matter.  No one living in a food desert will have the same health outcomes as someone living next door to a Whole Foods, just as an individual with a new car will always be more consistent in making appointments and picking up prescriptions than someone who has to access three public transit buses for the same activities. Real patient engagement and activation begins with understanding the environment of each patient.
3. Your patient demographics are shifting, and so too should your leaderships. As the US continues to brown, hospital leadership must be representative of the population to understand and meet need. At a recent Modern Healthcare Top 25 Minority Executives session, an awardee remarked that the United States is now a country of minorities, and “our leadership as minorities is our future for health outcomes.” With this in mind, it is inevitable and paramount to success that the leadership of any organization resembles and represents those it serves, so it makes the financial investments and decisions that influence the community.
4. More bodies in beds will never work again.
   Value-based purchasing means that a warm body in a bed not only drives costs higher for the payer, but that the longer a patient remains in the hospital – or the more often they return – the more penalties that accrue. Therefore, the goal should not be for more bodies, but for cost-effective bodies. Depending on the community serviced, this can mean desire for more Masters Athletes, specialized services or elective services. Additionally, as we shift to a world where technology enables more clinical procedures and recovery to be done in the outpatient setting, or at home, and expensive inpatient procedures decrease in volume and reimbursements, hoping to fill beds is futile.
5. Alignment with physicians is nonnegotiable.
   No leader can effectively attain a goal without buy in from those who carry out the work.  However, it is important to be aware that “physician alignment” is a term that causes almost all physicians to turn and walk the other direction out of fear that this indicates buying their autonomy and dictating their day-to-day, moment-to-moment ability to practice. According to Healthcare Financial News the implications of physician behavior are so important in 2014 that more revenue than ever will be spent recruiting physicians who see the world the same way you do, which is not very different from how corporation CFOs think about their employee hires.
6. As consumers take on more and more pay responsibility, unexpected payment shifts will keep occurring.
   Many experts estimate that defined contribution, health insurance exchanges and the growing individual health insurance market means that patients will become more informed about spending their health care dollars, and therefore, more unwilling to spend. The future of reimbursements and pricing strategies is presently a puzzle wrapped in an enigma because of extreme uncertainty. However, it is general knowledge that Medicare and Medicaid reimbursements are going to continue decreasing, with the American Hospital Association and Moody’s already estimating an, “unequivocally negative” outlook for hospitals on the reimbursement fronts.
7. Technology and data utilization can save you money.
   While the learning curve with new technology can be excruciating and the meaningful utilization of collected information seems daunting, everything from workflow to health activities and employee/patient engagement can be monitored – and altered in real time – using new technology. Moreover, the more information that is known today, the better predictive analytics and behavioral change that can be made tomorrow. However, as the amount of technology available to leadership continues to grow exponentially, the purchasing of new tech will be a balancing act between what is a passing fad versus what is sustainable and transferable.
8. Your EHR is going to cost you. Big time.
   Now this seems obvious to most hospital CFOs, as they have already seen the initial price tags that come with implementing a “holistic” electronic system. However, the most costly elements may not yet be realized. As mergers and acquisitions continue, technology advances and EHR capabilities increase, the need to refresh systems will continue.  At present there is not one system that meets end-to-end patient or provider needs, leaving the ecosystem open for further disruption, which inherently includes more interoperability, more upgrades, more plugins and more costs.

 

Health Insurance Benefits – Can You Have It Your Way?

As the percentage of large employers that consider a shift to defined contribution and/or private exchange increases, the number of options – and flexibility in those options – must also increase. Consideration for those options rose last year from 14% to 18% among large employers (500+ employees). Further, those who are considering the move to a private exchange want to because of their desire to offer more and better plan options, as well as realize cost-savings. Shifting to the defined contribution framework allows employers to moderate their subsidies to employees, and employees to make better trade-offs among plan options. Additionally, by increasing choices, defined contribution makes it easier for employers to integrate their health incentive and wellness programs by layering them “on top” of the defined contribution.

With this economic opportunity in the market, it is imperative that health plans and enrollment become more tailored to individual and company needs, in addition to the one-size-fits-all solutions of the past and present.

Private health exchanges, according to bswift, like their new Springboard Marketplace, could be the platform to give consumers that greater choice and increase individual decision-making. Given that most large employers who are considering a defined contribution will remain self-insured, bswift is taking a calculated gamble that employers will continue to invest in cost management solutions such as incentives, wellness programs, consumerism as opposed to simply shifting costs to employees under the “fix it and forget it” cost sharing approach suggested by some competitors.

Customize Your Cart

The Springboard Marketplace that bswift has created has the online functionality healthcare.gov could only have dreamed of, and the choice construction of a grocery store.  In fact, the terminology the company uses alludes to “Stocking the Shelves” with your benefit choices and “Shopping” for your ideal group of benefits. This is all done through the interactive benefits advisor, Emma, who walks employees through an online step-by-step process to fill their cart with health care options.

For those aware of bswift’s background as a tech company it may not be a surprise that the software and services offered are aimed at streamlining a very sophisticated system, and making the user experience easy. And for those that know the company’s Executive Director of Exchange Solutions Brad Wolfsen, the shopping experience and ease of transition into a new set of consumer options will easily resonate. Mr. Wolfsen, before joining the team, built and led Safeway’s wellness and retail strategy programs, and was the President of Safeway Health.

According to Mr. Wolfsen, the real benefit he sees to bswift’s products are that they, “allow employers to focus on equity for employees and shift to a retail view on providing health benefits.”  Or, as the Society for Human Resource Management labels it, From Parenting To Partnering.

New Plans Equal New Decisions

With a growing demand for health benefit options that resemble a choose your own adventure book, but with a set amount of money to spend, the development of software must also be functional for employers and employees. The Springboard Marketplace has been constructed so that functionality can simply be turned on and off, so that choices are simplified. Additionally, since there is not a standard approach to benefit choices and many legacy systems that have to be revamped due to mergers, acquisitions and partnerships, greater automation for employers means less paperwork for HR departments. By making workflow, reporting and administrative work more efficient through automation, cost-savings increase even further.

“The best and brightest clients are currently driving what is in the bswift system now,” says Mr. Wolfsen. “As we move towards expanding the suite of benefit options and meeting compliance standards, we are also investing in the shoppers experience.”

He, along with his colleagues at bswift, believe that their tech company is nimble in ways that others are not, and that with the help of their platform and Emma, more and more employers will begin the migration to defined contribution and private exchanges. If true, that growing shift could redefine how health benefit decision-making is done by employees in the future.

 

Balance of Power

In researching a novel I am writing I have been reading about the history of the treatment of depression.  As often happens, I ran into an historical issue with echoes of the future.

Here’s an interesting paragraph from Howard Kushner’s book American Suicide.

“While asylum superintendents [in the 1840s] were as much captive of bourgeois ideology [the conviction that the insane could be reformed and that the suicidal could be cured] as were other social reformers, they were influenced on a daily basis by more parochial concerns.  Not least of all, these men sought stable employment in the medical profession at a time when, buffed by competing medical sects, medicine promised neither prestige nor a regular income.  A career as an asylum superintendent offered a solution to the contradictions between humanitarian desires to help others and a quest for economic security.  Like most professionals then and now, these asylum physicians saw no conflict between an increase in their professional power and the improvement of the condition of the patients they served.  Indeed, they viewed the former as essential for the latter.”  (Bold letters are my addition.)

Let’s look at that second-to-last sentence.  Professional physicians see no conflict between increases in power and the improvement of patient condition.  Conflict may not be quite the right word.  Maybe correlation is a better one.  Professional physicians see correlation between increases in power and improved patient condition.  Up to a point the statement is historically accurate.  There was no conflict in the eighteenth and early nineteenth centuries because as trained doctors from legitimate medical schools began to have more influence than the untrained barber-surgeons and apothecaries, patient health did get better.  Education and science eventually led to treatments that truly helped people.  This resulted in a medical profession which, unlike that of 1840, had great prestige and good income.

Since those early days of medical professionalization, however, power has shifted.  The turn away from paternalism toward autonomy has shifted the balance.  Regulation, legislation, and an omnipresent media have shifted it further.  Power, which used to be in the hands of doctors, for better or worse, is now in the hands of regulators, administrators, and the patients themselves.  The question is, does the decrease in physician power correlate with a change in the health of patients?

The answer, of course, depends on who you ask.

You could ask Timothy Quill and Howard Brody, who would tell you they doubt extremes of patient power increase the well-being of patients.  In 1996 they wrote the following in the Annals of Internal Medicine: (Ann Intern Med. 1996;125(9):763-769)

“At one extreme end of this [patient autonomy] spectrum is the “independent choice” model of decision making, in which physicians objectively present patients with options and odds but withhold their own experience and recommendations to avoid overly influencing patients. This model confuses the concepts of independence and autonomy and assumes that the physician’s exercise of power and influence inevitably diminishes the patient’s ability to choose freely.”

You could ask the Physician Regulatory Issues Team at CMS, which claims that the power of regulation, in the form of government money, improves the condition of patients:

“Physicians have a special role in our health care system, as they not only care for the health of individual patients, but also help to shape the broad health care delivery system. As the federal Medicare agency, CMS respects the bond of trust between physicians and their patients, and appreciates the need to support physicians in the leadership they provide in service delivery. The Medicare program and physicians share a common mission, the provision of high quality medical care for patients.” (http://www.cms.gov/Outreach-and-Education/Outreach/PRIT/index.html?redirect=/prit/)
You could ask Drs Bell, Wilkes, and Kravitz, who may say that the power of advertising is not improving anyone’s condition.  They found that “A sizable fraction of patients believed they would react negatively if their physician refused to provide a prescription for a drug advertised in the general media.”  The Journal of Family Practice [1999, 48(6):446-452]
You could ask Louis Goodman and Tim Norbeck of Forbes, who would probably say that regulations are not increasing patient health.   “…Physicians are already spending 22 percent of their time interacting with insurers on formularies, claims, billing, credentialing, pre-authorizations, and quality measure data.  The workload can only increase with the new [ICD-10] codes.” http://www.forbes.com/sites/physiciansfoundation/2013/11/05/healthcare-is-turing-into-an-industry-focused-on-compliance-regulation-rather-than-patient-care/

You could ask the people of Florida, where doctors abuse their power of the prescription pad.  They would say that absolutely, regulation has improved the condition of patients.  An article in the New York Times reported that “New laws are also cutting off distribution [of prescription painkillers]. As of July, Florida doctors are barred, with a few exceptions, from dispensing narcotics and addictive medicines in their offices or clinics. As a result, doctors’ purchases of Oxycodone, which reached 32.2 million doses in the first six months of 2010, fell by 97 percent in the same period this year.” http://www.nytimes.com/2011/09/01/us/01drugs.html

Balance of power is important in health care, just as it is in government and marriages.  No one will argue that giving physicians full power to do anything they want is a great idea.  But we need to be careful about how much power we take away.