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Magic of the market doesn’t work in healthcare

Millionaire businessman Geoff Coventry writes on why there’s no free-market fix for America’s hyper-complicated healthcare crisis. To read his essay, please hit this link.


Timothy J. Babineau, M.D.: Look at what works well in U.S. healthcare and build on that

 

American healthcare is expensive. Too expensive. On this, there is little debate. In 2001 the median U.S. household spent 6.4 percent of its income on healthcare; by 2016, the same household spent 15.6 percent of its income on healthcare. That bigger share of the pie leaves less for other essential purchases such as food, education and housing.

The same phenomenon exists at the national level, with spending on education, the environment and social programs getting squeezed. Recent estimates from the Centers for Medicare and Medicaid Services (CMS) have the American healthcare tab coming in at $3.6 trillion for 2016 and projected to continue to soar through 2025. Despite broad agreement that rising healthcare costs are unsustainable, the root causes of the rates of increase and the best ways to combat them remain the subject of some debate and confusion.

Numbers matter. The 80/20 rule—known to healthcare actuaries as the Pareto principle, posits that 80 percent of all medical spending is incurred by only 20 percent of the population. Whether a population is defined as a company, a county, or a country, most healthcare spending is for care of a small minority of individuals. Moreover, the bulk of that spending arises from either largely unavoidable or unpredictable single events (such as trauma or sudden-onset acute illnesses); such chronic conditions such as diabetes; complex episodes of care for such illnesss as cancer, and care delivered at the end of life.

A critical (but often overlooked) point is the fact that as much as 40 percent of spending during chronic and complex episodes is avoidable if providers and systems adhere to established standards of care. Reining in runaway healthcare spending must involve better management of high-cost episodes of chronic and complex care.

A key buzzword in today’s debate is “population health”. Confusion occurs when the term is interpreted as a strategy for controlling healthcare costs when it is applied across our entire population as opposed to the sickest 10 percent or 20 Percent. Wellness initiatives, early detection, the avoidance of emergency room visits, and disease prevention have undeniable value, and should all be pursued, but they will not (by themselves) sufficiently reduce healthcare spending by enough to make the system “affordable”.

As the Baby Boomers swell the ranks of Medicare beneficiaries, the inevitability of illness is the only certainty in an otherwise uncertain world. To be successful, programs, payment systemsand policies to curb healthcare spending must focus on improving the efficiency and effectiveness of care delivered to the sickest subset of the population. This is best accomplished within a completely integrated healthcare-delivery system.

American hospitals and healthcare systems are among the best in the world. Rather than asserting that “American healthcare is broken” and in need of rebuilding from scratch, a better strategy may be to look at what works well within our system and ask how we can build on those strengths while facing the escalating costs head on. Hospital systems are in the health care business, and we should not be reluctant to say so. No matter what wellness and prevention programs we collectively offer, inevitably a small subset of the population will still get very sick, and it is a core mission of health systems—working in close partnership with our primary and specialty providers—to take the very best and most efficient care of them when that happens.

Irrespective of what happens with the Affordable Care Act (ACA), as leaders in health care, we must redouble our efforts to eliminate unnecessary variations and wasteful spending in the clinical care we deliver to patients.

Rather than debate the actual percentage that is “wasteful spending” (now commonly referenced at around 30 percent) we would be better served by continuing the hard work of identifying and eliminating areas within our own systems where needless variations in care add cost without improving outcomes. As Lifespan, the system I lead, continues to evolve into a comprehensive, high-value, integrated healthcare system, we are doing just that.

Timothy J. Babineau, M.D., is president and chief executive of Providence-based Lifespan, a large hospital system, and a professor of surgery at the Warren Alpert Medical School of Brown University.

 


Big gender gap persists in hospital C-suites

Modern Healthcare reports that women represent  only 26 percent of hospital CEO positions, although they have about 75 percent of healthcare jobs (largely because most nurses are women). At Fortune 500 companies involved in healthcare, women have only  21 percent of executive jobs and 21 percent of board members.

The publication notes: This inequality at the C-suite level has gotten the attention of those healthcare organizations that are striving to improve the diversity of their leadership teams. Their efforts are helping women advance further along in their careers. But societal stereotypes and cultural norms continue to remain stubborn barriers standing in the way of faster progress, experts say. ”

To read the piece, please hit this link.


Berwick: Push for the Triple Aim will continue under Trump

 

Ilene MacDonald, of FierceHealthcare, writes about the views of former CMS Administrator Don Berwick, M.D., on health policy under the Trump administration.

She writes:

“Trump’s pre-election healthcare platform called for complete price transparency, and elements of the Affordable Care Act also call for transparency to help make the healthcare system easier to understand, creating a more competitive market. That meant CMS had more authority and responsibility to make data more available to the public. That was a difficult journey, Berwick says, because historically CMS kept the data guarded and tightly controlled for research. Over time data has become more available but he’s unsure what the future holds with the new administration.”

Tom Price, M.D. [Trump’s pick for the new head of the Department of Health and Human Services] is a fan of doctors and doctor practices. And doctors are uncomfortable with transparency so I’m not sure which way he will call this,’ Berwick says.”

“Although Berwick isn’t sure what will happen to the star ratings system under the new administration, he says he is certain quality improvement in healthcare and the goal of the Triple Aim to improve individual care, boost the health of patient populations and reduce overall costs, will continue.”

To read all of Ms. MacDonald’s piece, please hit this link.


7 things to know about Kaine’s healthcare views

 

Here’s one of Becker’s Hospital Review’s “Things to Know” features — this one has seven things to know about Democratic vice-presidential nominee Tim Kaine’s stand on healthcare issues.

1. Sen. Kaine supports the Affordable Care Act.

2. However, Sen. Kaine says more fixes to the ACA are needed.

3. Addressing the opioid crisis is a top priority for Senator Kaine. .

4. He is also positioning himself as a champion of preventive care.

5.  Senator Kaine supports a woman’s right to choose.

6. He has a substantial background in health IT.

7.  Senator Kaine supports allowing Medicare to negotiate drug prices with pharmaceutical companies.

For details, please hit this link.


Zakaria: Success in healthcare will depend on managing data

 

Celebrity journalist Fareed Zakaria, speaking at the Health Forum and American Hospital Association Leadership Summit, discussed the  datafication and Uberfication of healthcare.

Mr. Zakaria believes that cloud-based storage of data and mobile technology are converging to  transform how human knowledge is transferred. This is affecting every sector of the U.S. economy, healthcare included.

“I feel as though this is the most likely revolution that is going to transform the medical profession and health care in general. You will know more about things and you will know them more quickly than has been the case ever before,” he said.

He said those who prevail in the future healthcare arena will be those who figure out how to use the massive data now becoming available to put themselves  ahead from competitors.

“Doctors, hospitals, administrators are gaining access to unprecedented amounts of data, and unprecedented amounts of information about the people who desire health care, which really means all of us. And what you do with that data will probably be the key differentiator going forward.”

Please hit this link to read an article on Mr. Zakaria’s talk.

 


Hospitals fighting revival of ‘the public option’

 

Hillary Clinton, under pressure from the left wing of the Democratic Party, is now pushing for “public option” coverage in the state and federal health insurance exchanges.

This would be a compromise between Sen. Bernie Sanders, who backs a “Medicare-for-all” approach, and the current  very complex system of private insurance partially paid for by employers, private insurance bought in insurance exchanges, and expanded Medicaid under the Affordable Care Act.

Polls have suggested that a majority of the public favors extending Medicare t0 all or at least a public option, in which people could chose government-financed insurance instead of coverage from a private insurer.

It appears that hospital executives oppose a public option because they fear that it would  cut the payments that hospitals receive to provide care. So the American Hospital Association and the Federation of American Hospitals  has sent this message  to the Democratic Platform Drafting Committee.

“Our members have serious concerns that creating a public option with Medicare-like payments would subvert those goals by depressing insurer payments to healthcare providers and disrupting the fragile finance system that sustains hospitals today.”

The letter asserted that two-thirds of the two groups’ member hospitals received Medicare reimbursements that are below cost of providing care, while the average operating margin on Medicare reimbursements for hospitals was negative 5.8 percent in 2014.

“Adding millions more enrollees whose healthcare would be reimbursed at Medicare rates would likely threaten access to needed healthcare services, particularly for those in vulnerable communities,” the letter said.

To read more, please hit this link.


Healthcare’s lexicon lunacies

 

John Dentler, writing in Hospitals & Health Networks, weighs in on sloppy healthcare language:

“When there are a lack of rules guiding definitions, spelling and acronyms or initialisms of words used in an organization, the result is an inconsistent lexicon that can negatively affect planning, operations, communication and credibility.

“At the low end of concern is when inconsistencies make a project more challenging or frustrate new staff trying to learn their jobs. Of much more concern is when inconsistencies and varying vocabularies change the meaning of policy, cause erroneous calculations in financial projections or cause patient information to become lost or confused.”

He lists as particularly problematic:

  • “Cases and procedures”.
  • “Integrated and integrative care”.
  • “Quality improvement, quality assurance and performance improvement”.
  • “Cost and price.”
  • “3M”

To read Mr. Dentler’s article, please hit this link.


Trying to avoid overuse, underuse of medical care

 

In this Modern Healthcare interview, Vikas Saini, M.D., president of the Lown Institute,  the healthcare think tank and reform organization, discusses the need to involve patients in decision-making and how to avoid overuse and underuse of medical care patient by patient and achieve “right care”.

He notes:

“The real strength of the “Choosing Wisely” initiative has been clearly establishing the principle that there’s a lot we do for which there’s no evidence and there’s no benefit, and so if you do it, you’re only asking for harms. You’re only asking for either complications or side effects, or waste of money. The broad question is how do we deliver the right care? We came up with close to two dozen or more drivers (of inappropriate care). And these drivers act in complicated ways.”
Then he explains how.On the Affordable Care Act he says:{A} big part of what’s happening with the ACA is that the affordability of insurance on the exchanges depends on a mechanism of high copays and deductibles, which means that patients are being put in the position of having to figure out whether the extra cost to them for any given visit or test or procedure is worth it. I don’t think our patients and communities really have enough knowledge and understanding to make that decision. I think it’s unfair to do it that way. There is a theory that if people have skin in the game, they will make better choices. In healthcare that may be true, but it’s true at the margin if you have the leisure of thinking about it.”
“….Too much of what we do and the kind of interactions we have and the kind of decisions patients have to make, they’re not equipped to do. So what we’re really doing is shifting the cost. Certainly aligning payment incentives is a help. But we can’t succumb to magical thinking that by aligning payment structures things will get better.”

Feds giving health centers over $260 million for facilities improvements

 

Federally Qualified Health Centers, a sector in which  Cambridge Management Group has worked intensely, provide an essential service to millions of patients, especially to the still-uninsured.  The information below from HealthcareDIVE was good news for many of them.

  • “HHS announced Wednesday a total of more than $260 million in funding granted to 290 health centers across 45 states, the District of Columbia, and Puerto Rico for building construction, expansion or renovation.
  • “The funding is intended to help health centers increase their patient capacity and bolster their provision of comprehensive primary and preventive healthcare to medically underserved communities.
  • “HHS notes that since 2009, nearly 1,400 health centers operating 9,800 service delivery sites have absorbed an additional 6 million patients to serve almost 23 million every year.

“With some rural health centers closing and the uprise in the insured, some hospitals have noted that it may be hard to deal with an uptick in admissions and HHS is noting that physical space to handle the increase is important.

“Helping health centers improve and expand their clinical space will make it possible for them to serve more than 800,000 new patients nationwide, HHS says, noting the investment builds on a previous $150 million awarded to 160 health centers for building and renovation in September 2015. ”


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