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Senate panel clears bill to help chronically ill Medicare patients

The Senate Finance Committee has unanimously approved a bill aimed at improving care for Medicare beneficiaries with chronic conditions.

Med Page Today reports that the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 {whew!} would increase access to telehealth for Medicare beneficiaries with chronic illnesses — including those in Medicare Advantage plans — as well as provide more incentives for enrollees to receive care through accountable care organizations (ACOs). It also would extend the Independence at Home demonstration program to keep people in their homes rather than hospitals, allow reimbursement for more non-health and social services, and extend permanently MA Special Needs plans that target chronically ill beneficiaries.”

“One thing we hear a lot from ACOs is they have trouble keeping beneficiaries in-house rather than going to a provider outside the ACO, and that makes it harder to coordinate their care,” a committee aide told the publication. “This bill says that if you go to a primary care doctor in the ACO, we’ll reduce or eliminate your cost-sharing for that primary care service. That will make beneficiaries stick to the ACO, and bring down their costs.”

Sen. Ron Wyden (D.-Ore.), the committee’s ranking member, told MedPage that the measure is “transformative.”

“This is a formal recognition that this package of services — the focus on care at home, the focus on new technology, the expanded role for primary care and prevention, which inevitably leads to more non-physician providers — is the beginning of our push to update the Medicare guarantee. That’s why it’s transformative.”

To read more, please hit this link.


Feds: UnitedHealth overcharged Medicare by $1 billion

By FRED SCHULTE

For Kaiser Health News

The Justice Department on Tuesday accused giant insurer UnitedHealth Group of overcharging the federal government by more than $1 billion through its Medicare Advantage plans.

In a 79-page lawsuit filed in Los Angeles, the Justice Department alleged that the insurer made patients appear sicker than they were in order to collect higher Medicare payments than it deserved. The government said it had “conservatively estimated” that the company “knowingly and improperly avoided repaying Medicare” for more than a billion dollars over the course of the decade-long scheme.

“To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers,” said acting U.S. Attorney Sandra R. Brown for the Central District of California, in a statement announcing the suit. “The primary goal of publicly funded healthcare programs like Medicare is to provide high-quality medical services to those in need — not to line the pockets of participants willing to abuse the system.”

Tuesday’s filing is the second time that the Justice Department has intervened to support a whistleblower suing UnitedHealth under the federal False Claims Act. Earlier this month, the government joined a similar case brought by California whistleblower James Swoben in 2009. Swoben, a medical data consultant, also alleges that UnitedHealth overbilled Medicare.

The case joined on Tuesday was first filed in 2011 by Benjamin Poehling, a former finance director for the UnitedHealth division that oversees Medicare Advantage Plans. Under the False Claims Act, private parties can sue on behalf of the federal government and receive a share of any money recovered.

UnitedHealth is the nation’s biggest Medicare Advantage operator, covering about 3.6 million patients in 2016, when Medicare paid the company $56 billion, according to the complaint.

Medicare Advantage plans are private insurance plans offered as an alternative to traditional fee-for-service option.

Medicare pays the health plans using a complex formula called a risk score, which is supposed to pay higher rates for sicker patients than for people in good health. But waste and overspending tied to inflated risk scores has repeatedly been cited by government auditors, including the Government Accountability Office. A series of articles published in 2014 by the Center for Public Integrity concluded that improper payments linked to jacked-up risk scores have cost taxpayers tens of billions of dollars.

Tuesday’s court filing argues that UnitedHealth repeatedly ignored findings from its own auditors that risk scores were often inflated — and warnings by officials from the Centers for Medicare & Medicaid Services (CMS) — that it was responsible for ensuring the billings it submitted were accurate.

UnitedHealth denied wrongdoing and said it would contest the case.

“We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with CMS about our approach under its unclear policies,” UnitedHealth spokesman Matt Burns said in a statement.

Burns went on to say that the Justice Department “fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works. We reject these claims and will contest them vigorously.”

A spokesman for CMS, which has recently faced congressional criticism for lax oversight of the program, declined comment.

Central to the government’s case is UnitedHealth’s aggressive effort, starting in 2005, to review millions of patient records to look for missed revenue. These reviews often uncovered payment errors, sometimes too much and sometimes too little. The Justice Department contends that UnitedHealth typically notified Medicare only when it was owed money.

UnitedHealth “turned a blind eye to the negative results of those reviews showing hundreds of thousands of unsupported diagnoses that it had previously submitted to Medicare, according to the suit.

Justice lawyers also argue that UnitedHealth executives knew as far back as 2007 that they could not produce medical records to validate about 1 in 3 medical conditions Medicare paid UnitedHealth’s California plans to cover. In 2009, federal auditors found about half the diagnoses were invalid at one of its plans.

The lawsuit cites more than a dozen examples of undocumented medical conditions, from chronic hepatitis to spinal cord injuries. At one medical group, auditors reviewed records of 126 patients diagnosed with spinal injuries. Only two were verified, according to the complaint.

The Justice Department contends that invalid diagnoses can cause huge losses to Medicare. For instance, UnitedHealth allegedly failed to notify the government of at least 100,000 diagnoses it knew were unsupported based on reviews in 2011 and 2012. Those cases alone generated $190 million in overpayments, according to the suit.

While Medicare Advantage has grown in popularity and now treats nearly 1 in 3 elderly and disabled Medicare patients, its inner workings have remained largely opaque.

CMS officials for years have refused to make public financial audits of Medicare Advantage insurers, even as they have released similar reviews of payments made to doctors, hospitals and other medical suppliers participating in traditional Medicare.

But Medicare Advantage audits obtained by the Center for Public Integrity through a court order in a Freedom of Information Act lawsuit show that payment errors — typically overpayments — are common.

All but two of 37 Medicare Advantage plans examined in a 2007 audit were overpaid — often by thousands of dollars per patient. Overall, just 60 percent of the medical conditions health plans were paid to cover could be verified. The 2007 audits are the only ones that have been made public.

CMS officials are conducting more of these audits, called Risk Adjustment Data Validation, or RADV. But results are years overdue.

 


Medicare didn’t follow up on many hospital infection cases

Pathogenic_Infection

By CHRISTINA JEWETT

For Kaiser Health News

 

Almost 100 hospitals reported suspicious data on dangerous infections to Medicare officials, but the agency did not follow up or examine any of the cases in depth, according to a report by the Health and Human Services inspector general’s office.

Most hospitals report how many infections strike patients during treatment, meaning the infections are likely contracted inside the facility. Each year, Medicare is supposed to review up to 200 cases in which hospitals report suspicious infection-tracking results.

The IG said Medicare should have done an in-depth review of 96 hospitals that submitted “aberrant data patterns” in 2013 and 2014. Such patterns could include a rapid change in results, improbably low infection rates or assertions that infections nearly always struck before patients arrived at the hospital.

The IG’s study  was designed to address concerns over whether hospitals are “gaming” a system in which it falls to the hospitals to report patient-infection rates and, in turn, the facilities can see a bonus or a penalty worth millions of dollars. The bonuses and penalties are part of Medicare’s Inpatient Quality Reporting program, which is meant to reward hospitals for low infection rates and give consumers access to the information at the agency’s Hospital Compare website.

The report zeroes in on a persistent concern about deadly infections that patients develop as a result of being in the hospital. A recent British Medical Journal report identified medical errors as the third-leading cause of death in  U.S. hospitals. infections particularly threaten senior citizens with weakened immune systems.

Rigorous review of hospital-reported data is important to protect patients, said Lisa McGiffert, director of the Consumers Union’s Safe Patient Project.

“There’s a certain amount of blind faith that the hospitals are going to tell the truth,” McGiffert said. “It’s a bit much to expect that if they have a bad record they’re going to ’fess up to it.”

Yet there are no uniform standards for reviewing the data that hospitals report, said Dr. Peter Pronovost, senior vice president for patient safety and quality at Johns Hopkins Medicine.

“There are greater requirements for what a company says about a washing machine’s performance than there is for a hospital on quality of care, and this needs to change,” Pronovost said. “We require auditing of financial data, but we don’t require auditing of [health care] quality data, and what that implies is that dollars are more important than deaths.”

In 2015, Medicare and the Centers for Disease Control and Prevention issued a joint statement cautioning against efforts to manipulate the infection data. The report said CDC officials heard “anecdotal” reports of hospitals declining to test apparently infected patients — so there would be no infection to report. They also warned against overtesting, which helps hospitals assert that patients came into the hospital with a preexisting infection, thus avoiding a penalty.

In double-checking hospital-reported data from 2013 and 2014, Medicare reviewed the results from 400 randomly selected hospitals, about 10 percent of the nation’s more than 4,000 hospitals. Officials also examined the data from 49 “targeted” hospitals that had previously underreported infections or had a low score on a prior year’s review.

All told, only six hospitals failed the review, which included a look at patients’ medical records and tissue sample analyses. Those hospitals were subject to a 0.6 percent reduction in their Medicare payments. Medicare did not specify which six hospitals failed the data review, but it did identify dozens of hospitals that received a pay reduction based on their reports on the quality of care.

The new IG report recommended that Medicare “make better use of analytics to ensure the integrity of hospital-reported quality data.” A response letter from Centers for Medicare & Medicaid Services Administrator Seema Verma says Medicare concurs with the finding and will “continue to evaluate the use of better analytics … as feasible, based on [Medicare’s] operational capabilities.”

Questions about truth in reporting hospital infections have percolated for years, as reports have trickled out from states that double-check data.

In Colorado, one-third of the central-line infections that state reviewers found in 2012 were not reported to the state by hospitals, as required. Central lines are inserted into a patient’s vein to deliver nutrients, fluids or medicine. Two years later, though, reviewers found that only 2 percent of central-line infections were not reported.

In Connecticut, a 2010 analysis of three months of cases found that hospitals reported about half — 23 out of 48 — of the central-line infections that made patients sick. Reviewers took a second look in 2012 and found improved reporting — about a quarter of the cases were unreported, according to the state public health department.

New York state officials have a rigorous data-checking system that they described in a report on 2015 infection rates. In 2014, they targeted hospitals that were reporting low rates of infections and urged self-audits that found underreporting rates of nearly 11 percent.

Not all states double-check the data, though, which Pronovost said underscores the problem with data tracking the quality of health care. He said common oversight standards, like the accounting standards that apply to publicly traded corporations, would make sense in health care, given that patients make life-or-death decisions based on quality ratings assigned to hospitals.

“You’d think, given the stakes, you’d have more confidence that the data is reliable,” he said.


Looking at the link of payer type and low-value care

Researchers from The Dartmouth Institute for Health Policy and Clinical Practice examined the connection between payer type and low-value care to determine what effect that insurance design (commercial insurance vs. Medicare) may have on medical overuse and waste.

Among their findings:

  • “The tendency to deliver or avoid low-value care appears largely independent of payer type (Medicare or commercial) and patient population attributes. (Researchers note that the finding suggests that either the difference in anticipated reimbursement is unimportant to providers or that they are ‘unwilling or unable to discriminate by payer type at the point of care.’)
  • “Regions with a high specialist to primary care ratio have more overuse.
  • “Some Hospital Referral Regions may deliver more overuse either as a direct result of higher physician group competition or as an indirect result (more competition results in more fragmentation and redundancy).
  • “The use of the seven low-value services remained relatively consistent over time. However, Vitamin D screening increased substantially during the study period (perhaps as a result of increased public awareness and the promotion of Vitamin D deficiency as a medical concern). In contrast, the use of cervical cancer screening in the over 65 population decreased substantially.
  • “The rate of prescription of opioids for migraine patients is similar in both commercially insured and Medicare populations, but is much more commonly provided than the other Choosing Wisely services examined in the study. (The study’s authors note that study data may not reflect the slight decline in prescription opioid use in response to growing concerns over opioid abuse.)
  • “Finally, the study found that the use of low-value services in both payer types was greater among {groups with} higher proportions of black patients. The researchers note that their finding suggests a concerning ‘potential for double jeopardy in health services receipt among black Americans.’”

To read more, please hit this link.

 


Whither the hospital merger wave?

Herewith a review of the continuing wave of hospital mergers, which, of course, raises serious concerns about competition, or the lack thereof, and  thus huge systems’ pricing power.

Consider that just last week,  Tenet Healthcare announced the sale of three acute- care hospitals to HCA Holdings and Community Health Systems completed the sale of nine hospitals.

And as Healthcare Dive notes: “While some industry experts have posited actionable items to enhance competition, a flurry of regulatory actions and regional influences could increase consolidation even more, leading to even less competition.”

“Rising expenses and declining admissions alongside flattening reimbursements – as well as alternative care settings competing for the one-and-done low acuity patient visits – make for an unfortunate financial reality for some hospitals. Some have found it best to put up a ‘For Sale’ sign.”

“Healthcare and hospital prices will ascend to the level a market can take on. If a provider has a large monopoly in a market/region, prices can actually rise to offset rising expenses and declining patient volume since they have greater power at the negotiating table over insurers.”

Meanwhile, the publication said,  Martin Gaynor, Farzad Mostashari and Paul B. Ginsburg  recently advanced, in a Brookings Institution report, some suggestions on how to encourage competition in the industry, including, in Healthcare Dive’s shorthand:

  • “Increasing scrutiny on mergers.
  • “Stop paying more for the same outpatient services.
  • “Encouraging provider competition.
  • “Improving transparency.
  • “Ending anti-competitive practices, such as anti-tiering and anti-steering.
  • “Allowing lower-risk Medicare ACO contract options for independent provider groups.”

To read the Healthcare Dive report, please hit this link.

To read the Brookings report, please hit this link.

 


Deconstructing the House GOP’s health-insurance bill

 

PHIL GALEWITZ

For Kaiser Health News

The AARP called the health-insurance bill that House Republicans narrowly approved May 4 “deeply flawed” because it would weaken Medicare and lead to higher insurance premiums for older Americans.

The American Medical Association said it would undo health insurance coverage gains and hurt public health efforts to fight disease. The American Hospital Association said the bill would destroy Medicaid, the state-federal health insurance program for the poor that expanded mightily under the Affordable Care Act and buoyed hospitals’ bottom lines.

Normally, that would spell failure.

But in today’s Washington, despite vocal opposition from nearly every major constituency affected by the bill, the vote produced the opposite result. The chorus of nays was not enough to stop the Republican-controlled House from approving the American Health Care Act, which repeals many critical parts of Affordable Care Act — the 2010 law known as Obamacare that has dropped uninsured rates in the United States to historic lows but, despite its lofty name, did little to rein in rising health costs. The AHCA will now move to the Senate, where GOP senators are expected to demand many changes.

Republicans have promised to repeal Obamacare since the day it was passed with only Democrats voting for it and have been campaigning on that promise ever since. While the House voted to repeal the act more than 60 times under the Obama administration,  the May 4 vote was the first one that really counted because the GOP controls Congress and the White House.

Peter Kongstvedt, a Virginia health-industry consultant, said some House Republicans are likely betting the Senate blocks their legislation from going forward. “Nobody wins with this vote — that’s the damnedest part,” he said. “It’s a shallow political statement.”

The vote was about healthcare, but it was a display of political theater, too. Representatives sent a message not to hospitals, doctors and patients but to President Trump and his devoted followers who propelled the GOP to power.

“The president needed a win and so does House Speaker Paul Ryan,” said Jason Fichtner, a healthcare expert at the conservative Mercatus Center at George Mason University, in Fairfax, Va. “With this vote, they can go back to their constituents and say they did something about Obamacare.”

That is, the 217 GOP House members who voted for the bill. Twenty voted no, joining 193 Democrats.

Trump’s team scored him a touchdown, but their run to the goal line wasn’t politically pretty:

  • The bill passed without an updated analysis of costs and benefits from the nonpartisan Congressional Budget Office, whose review in March came before the GOP added sweeteners to win over its conservatives and moderates.
  • Democrats passed Obamacare after a year of debate. The GOP spent only two months hammering out its replacement plan.
  • Business groups — such as the drug and hospital industries — played no part in shaping the AHCA. The Obama administration got both groups on board early on.

The GOP’s focus was not so much on what can lower prices and increase health coverage but how to persuade the right-wing Freedom Caucus to back the legislation.

In the end, passage mattered less about how the bill played in public polls — poorly — or among key interest groups — nearly all opposed. “Coming to agreement and avoiding the embarrassment of not coming to agreement was more important than what was in the final bill,” said Jim Morone, a political scientist at Brown University in Rhode Island. “Republicans have become a deeply ideological party … and they don’t care what interest groups think; they are going to press ahead.”

Part of the unlikely victory is that the bill makes the biggest change to Medicaid since the program was established in 1965 and there hasn’t been as much debate about that as one might expect. The AHCA could lead to huge cuts in federal funding of Medicaid, which now covers more than 75 million Americans.

Alan Levine, a hospital executive who was the top health official under former Republican governors Jeb Bush in Florida and Bobby Jindal in Louisiana, said Republicans who ran on repealing Obamacare felt that they had no choice but to vote for the bill, despite its flaws. “I don’t think Republicans can face voters in 2018 and have a credible argument to keep them in control of Congress, if they did not do their No. 1 campaign priority to repeal Obamacare,” said Levine, CEO of Mountain States Health Alliance, a hospital system based in Johnson City, Tenn.

Besides, he said, even if the GOP bill becomes law, it’s set up so that the changes won’t affect many people before the 2018 midterm elections. “People won’t feel this — good or bad — until well after the election.”


The future of bundled payments

 

Miranda Franco, writing in FierceHealthcare,  discusses the  future of bundled payments. She’s  a senior policy adviser at the law firm of Holland & Knight in the District of Columbia and a member of the firm’s national Healthcare & Life Sciences Team.

Among her observations:

“HHS Secretary Tom Price, M.D., {has} repeatedly expressed concern about CMS’s mandatory bundled-payment programs. Price is an orthopedic surgeon and former Republican congressman who served as the chairman of the House Budget Committee and as a member of the health subcommittee of the House Ways and Means Committee. In that capacity, Price opposed mandatory value-based payment models. {He has often indicated he opposes any cuts in the incomes of U.S. physicians, who are by far the highest paid in the world.}

“{However} bundled payment models are likely here to stay. Given the importance of cost containment in healthcare and the desire to expand APMs and Advanced APMs under MACRA, bundled payment models will likely continue to expand in some form. The continued development of these models is largely due to the promise bundled payments show in reducing costs, while maintaining high-quality care.

“In addition to Medicare, the ACA also pushed insurers, physicians, hospitals and employers to launch their own bundled payment reforms, and they too are expected to continue. We will likely see more of these models developed in the coming months and years, the only question is for what conditions and whether they be mandatory or voluntary.’’

To read her whole essay, please hit this link.

 


CMS seeks to adjust readmission penalties to account for duel-eligibles

revolvingdoor

The Centers for Medicare & Medicaid Services wants to adjust penalties in its Hospital Readmissions Reduction Program according to a hospital’s proportion of dual-eligible (Medicare and Medicaid) patients — a move long supported by hospital-industry stakeholders.

The proposed rule would take effect in fiscal 2019. In it, the CMS laid out several approaches  for determining   hospitals’ proportion of dually eligible patients and other key metrics.The change stems from the 21st Century Cures Act,  enacted last December. The law required Medicare to consider patient background when calculating payment reductions to hospitals under the Hospital Readmission Reduction Program, and to adjust those penalties based on the proportion of patients  dually eligible for Medicare and Medicaid.

The  Medicare Payment Advisory Commission has reported that while these dual eligibles constituted 18 percent of beneficiaries they accounted for nearly a third of total Medicare fee-for-service spending in 2012.

To read more, please hit this link.

 


Looking for middle ground on the ACA debate

By EMILY LAZAR

For Kaiser Health News

Joel Hay, a professor at the University of Southern California, describes his political views as “conservative, free market.” But in a counterintuitive twist, his proposal to fix the Affordable Care Act would expand the largest source of public health coverage in the country: Medicaid.

Hay, who specializes in health policy and economics, envisions an Obamacare replacement plan that would scrap health insurance exchanges such as Covered California, which sell subsidized private market plans.

Instead, he would allow people under the age of 65 to buy into Medicaid, called Medi-Cal in California. Their premiums would be based on family income and a surcharge would be assessed on those who are uninsured at the time they apply. That would be intended as an incentive to keep them from buying insurance only when they’re sick. People could acquire coverage regardless of preexisting conditions.\

Under Obamacare, 31 states and the District of Columbia expanded Medicaid, the federal-state health care program for people with low incomes. In doing so, they added more than 11 million people to the rolls, including about 3.7 million in California.

Hay believes that the Medicaid expansion was the most successful part of the ACA and contends that the health insurance exchanges have struggled to provide affordable plans with adequate networks in many states.

He said expanding Medicaid further could achieve two important goals: slowing the growing costs of health care, which he said is better achieved by Medicaid than private market plans, and giving all Americans access to at least basic health coverage.

Scrapping the exchanges may not be an easy sell in the Golden State, where Covered California has been lauded as a national model.

Laurel Lucia, director of the health care program at the University of California at Berkeley Center for Labor Research and Education, agrees with Hay that the Medicaid expansion has been a success, but she wonders whether middle class consumers will enroll in Medicaid as readily as private market plans.

California Healthline recently interviewed Hay about his proposal, and Lucia for a contrasting point of view. Their comments, below, have been edited for clarity and length.


 

Joel Hay proposes scrapping the Obamacare exchanges and building on the expansion of Medicaid instead. (Courtesy of Joel Hay)

Q: Can you provide an overview of your Obamacare replacement plan?

It would build on the successful part of the Affordable Care Act, namely the Medicaid expansion that is responsible for the majority of the increased coverage.

This is how it would work: Below some family income threshold that would be yet to be determined, the cost of getting Medicaid would be zero. Above that, there would be premiums based on family income up to some maximum threshold, where the cost would be something like 10 percent of family income.

People would always have an option of opting out into a private plan if one is available to them. But this is a backup for anybody that doesn’t have other options.

This plan focuses on the two biggest problems in American health care. No. 1: Not everyone has health insurance. No. 2: We have the highest health care costs in the world.

Medicaid is a no-frills health plan available in all states. It’s not perfect, but it works. There are certainly access problems, but it seems to do a much better job, even in some of these rural areas where we’re seeing problems with the health insurance exchanges.

Q: In some states, such as California, the exchanges seem to be working reasonably well. Why lump all exchanges in one basket?

There’s a philosophical issue here. Is competition across health plans the best way to get affordable, basic care to everyone?

Among the majority of people that are reasonably well-educated, middle class or better, have good jobs and in fact maybe get their insurance through their jobs, the competition between insurance plans works reasonably well. But when you go further down the income scale, that’s where the competition doesn’t seem to work.

The Obamacare experience thus far backs that up. A lot of people just don’t seem to be able to get a good plan either because the premiums are skyrocketing or because the narrowing of the coverage options they have is prohibitive.

Q: Would your plan require everyone to have health insurance?

There is no mandatory requirement for having health insurance, but there are penalties if you go without coverage. If you don’t sign up during open enrollment, the only option you can get outside of that window would be this Medicaid option. The longer you delayed getting into it, the higher your monthly premiums would be.

Q: Would subsidized health plans still be offered through exchanges?

No. The subsidies to help people buy into Medicaid should be targeted to making sure everybody has access to essential care. The subsidies would be focused on helping low-income people get into a no-frills Medicaid health plan. The subsidies will phase out at some upper income level.

If you’re earning $96,000 for a family of four, hopefully the private market will generate options for you. But if you have no other option, this would be available to your family at a premium of 10 percent of your family income. That’s going to work out to be something like $10,000. That’s a lot of money, but that’s the problem we have.

Q: What do you mean when you say “that’s the problem we have”?

We’ve reached the point in this country where the average cost of health care per capita is over $10,000, whereas the median family income is only $54,000. A median family of 2.6 people is going to see over half of their income going to health care.

We have to consider other options. Medicaid is cheaper. It gets the lowest price for drugs by law and negotiates vigorously to get extremely low prices for medical services, hospitalizations, doctors. If you can get your health care through Medicaid, the cost per every unit of service is lower.

Q: Can the already-stressed Medi-Cal program {California’s Medicaid program} handle millions more enrollees?

It’s better than what has been demonstrated in the private health insurance exchanges under Obamacare. In Medicaid, people may have to travel long distances for specialty care, although some of those things can be overcome with telemedicine and other mechanisms. But we’ve seen pretty much a collapse of the private markets to handle people in rural, hard-to-reach places. Yet Medicaid has provided care to people in every state, including in every one of these remote access areas. It’s not perfect. Rural health care access is never going to be perfect.

Q: You have mentioned block grant funding of Medicaid as part of your proposal. That is what Congressional Republicans have been pushing to reduce federal spending on the program. How can you do that and significantly expand Medicaid at the same time?

I certainly wouldn’t want to hang the whole program on whether or not it’s block-granted. The argument in favor of block granting is if you give a certain amount of money per-capita to the states, it’s up to them to allocate the resources efficiently and effectively to provide the highest quality of care. If you continue with the current funding approach for Medicaid, the states have 50 percent or less of the responsibility for how the dollars are spent and so they’re not going to work as effectively to control costs and quality.

Some people on the far right want to actually destroy Medicaid. They think by block granting Medicaid, they can eventually make it go away. That’s not my goal here. My goal is to provide sufficient federal funds to make this thing work.

Q: Have you discussed this idea with any lawmakers?

I’m just beginning. What I see so far is that everybody is so polarized, that there really isn’t any movement in the middle. I’ve presented this to left-wing academics, and they say what they want to do is push through single payer, even if it’s only in California. They’re just not interested in compromise. I’m sure the same would be true of Tea Party Republicans.

No Death Spiral In Obamacare Exchanges

From Laurel Lucia, University of California at Berkeley Center for Labor Research and Education, health care program director

I agree with the conclusion that the Medicaid expansion has been working really well, especially in California. It’s true that Medicaid costs are lower than the costs to cover an equivalent population with private insurance and that Medicaid costs have been growing more slowly than costs in private insurance.

Q: What do you think of Professor Hay’s idea?

But I disagree with the premise that the individual market components of the ACA are failing. In California, the individual market reforms and subsidies have been working very well, and nationally I’d say they’re mostly working.

In California, we’ve had very high enrollment and we still have significant competition in the individual market. The vast majority of Californians have a choice of at least three insurers through Covered California.

Nationally, millions of people have been newly insured as a result of the individual market subsidies under the ACA. And affordability has improved significantly for low- and middle-income people who don’t have job-based coverage and need to rely on the individual market.

Both nationally and in California, I would not say that the individual market is in a death spiral.

Q: Aren’t there places where premiums have skyrocketed and choices have decreased?

There are places in the United States where much more plan choice is needed. We need to build on the Affordable Care Act reforms in the individual market to ensure greater choices and greater competition, rather than starting from scratch.

Q: It doesn’t seem like the current Congressional leadership wants to build on the ACA.

If there’s bipartisan will to make the ACA work better in terms of the individual market, it’s very possible to do with some policy changes. And in some places, like California, it is already working well.

Q: So why not end subsidized private plans and allow people to buy into Medicaid instead?

It’s an interesting idea to expand upon Medicaid. There is a question of whether middle-class consumers would enroll at the same rate in a Medicaid-type plan as they do in private insurance.

The provider networks in Medicaid are often quite different than those in plans offered through Covered California. Some consumers may be less likely to enroll in Medi-Cal if they have a strong attachment to their provider and that provider is not in the Medi-Cal network or isn’t accepting new Medi-Cal patients.

Q: Would middle-class consumers be less likely to sign up for Medicaid because of a perception or stigma that it’s just for poor people?

I just don’t know how Californians or Americans at higher income levels would perceive a new program like this that builds upon Medicaid.

If you were going to expand Medicaid to a broader population, you would want to make sure that it is adequately funded. One part of Professor Hay’s proposal would fund Medicaid through block grants, which would actually do just the opposite.

Most research has indicated that block-grant funding for Medicaid would result in substantial cuts to federal Medicaid spending over time without resulting in better cost efficiency. The loss of federal funding would force states to make difficult decisions like cutting eligibility, cutting benefits or implementing enrollment caps.

Block-grant funding would not only threaten Medicaid coverage for existing enrollees, but it would also be especially harmful if you were considering expanding the Medicaid population at the same time.

Q: What can be done to moderate health care cost growth, if not through Medicaid?

Cost containment is an important next step in federal health policy and state policy as well. Costs are growing too rapidly, not just in the individual market but also in job-based coverage, but those are trends that started well before the ACA.

They’re not due to the ACA. In fact, since the ACA, private insurance premiums have grown at a slower rate.

But we do need more focus on slowing the rate of cost growth. I think a lot of the barrier there is political. There have been a lot of solutions proposed to reduce costs, for example allowing Medicare to negotiate with drug companies on drug prices. And often Congress doesn’t want to take on the drug industry or the hospital industry or other aspects of the health care industry to reduce costs.

 


In Idaho, a glimmer of hope for rural hospitals

arco

By ANNA GORMAN

For Kaiser Health News

ARCO, Idaho

Just before dusk on an evening in early March, Mimi Rosenkrance set to work on her spacious cattle ranch to vaccinate a calf. But the mother cow quickly decided that just wasn’t going to happen. She charged, all 1,000 pounds of her, knocking Rosenkrance over and repeatedly stomping on her. “That cow was trying to push me to China,” Rosenkrance recalls..

Dizzy and nauseated, with bruises spreading on both her legs and around her eye, Rosenkrance, 58, nearly passed out. Her son called 911 and an ambulance staffed by volunteers drove her to Lost Rivers Medical Center, a tiny, brick hospital nestled on the snowy hills above this remote town in central Idaho.

Lost Rivers has only one full-time doctor and its emergency room has just three beds — not much bigger than a summer camp infirmary. But here’s what happened to Rosenkrance in the first 90 minutes after she showed up: She got a CT scan to check for a brain injury, X-rays to look for broken bones, an IV to replenish her fluids and her ear sewn back together. The next morning, although the hospital has no pharmacist, she got a prescription for painkillers filled through a remote prescription service. It was the kind of full-service medical treatment that might be expected of a hospital in a much larger town.

Not so long ago, providing such high-level care seemed impossible at Lost Rivers. In fact, it looked as if there wouldn’t be a Lost Rivers at all. The 14-bed hospital serves all of Butte County, whose population of 2,501 (down from 2,893 in 2000) is spread over a territory half the size of Connecticut. Arco, the county’s largest town, has seen its population drop 16 percent since 2000, from 1,026 to 857 last year. “Bears outnumber people out here,” is how hospital CEO Brad Huerta puts it.

The medical center nearly shut its doors in 2013 due in large part to the declining population of the area it serves — almost becoming another statistic, another hospital to vanish from rural America. But then the hospital got a dramatic reboot with new management, led by Huerta, who secured financing to help pay for more advanced technology, upgraded facilities and expanded services. He also brought in more rotating specialists, started using telemedicine to connect the hospital to experts elsewhere and is now planning to open a surgery center and a long-term care rehabilitation wing.

If Lost Rivers had closed, the alternative would have been hospitals in Idaho Falls or Pocatello, each more than an hour away across high-altitude prairie. Instead, “I don’t have to go across the desert for hardly anything,” said Rosenkrance, resting at the hospital the morning after the cow attack.

Rural hospitals are facing one of the great slow-moving crises in American healthcare. Across the U.S., they’ve been closing at a rate of about one per month since 2010 — a total of 78, or about 6 percent. About 14 percent of the U.S. population lives in rural counties, a proportion that has dropped as the number of urban dwellers grows. Declining populations mean a smaller base of patients and less revenue. And the hospitals are caught in a squeeze: Because many patients in the countryside are older and sicker, they require more intensive and often expensive care.

Faced with these dramatic economic and demographic pressures, however, some hospitals are surviving — even thriving — by taking advantage of some of the most cutting-edge trends in health care. They are experimenting with telemedicine, using remote monitors to track patients and purchasing high-tech equipment to perform scans and other types of exams. And because many face physician shortages, they are partnering with universities and increasingly relying on nurse practitioners, paramedics and others to deliver care. In parts of rural Oregon and Washington, veterans can get counseling through a tele-mental health program. Physicians in Iowa and North Dakota have access to virtual emergency room support.

At Lost Rivers — a dramatic rural health turnaround story — Huerta’s strategy was to use technology and innovation to offer the kind of high-quality medical care that would keep patients like Rosenkrance coming back. “Necessity is the mother of invention,” Huerta said. “Small hospitals like mine are always going to be under the gun. You have to get really creative.”

In the decades to come, America’s heartland and hinterlands will continue to be home to the people who run the country’s farms, forests and fisheries, and its wilder regions will continue to draw visitors who crave nature and recreation. And those people will need medical care. As a result, rural health researchers say hospitals like Lost Rivers are important test cases. They show that, despite daunting obstacles, rural America need not be left behind when it comes to health care. In fact, because they are being forced to innovate faster than their urban counterparts, they can provide a glimpse into the future of medicine.

“Being in a rural place does not preclude high-quality medicine,” said Tom Ricketts, senior policy fellow at the Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. “They are under a lot of pressure, but there are rural places you can point to as places you would say, ‘This is how things ought to be done.’”

Where Folks Wear ‘Multiple Hats’

It’s a Tuesday afternoon at Tara Parsons’ flower shop. She cleans up as she waits for customers — or for an emergency call. Parsons, a fourth-generation Arco resident, is not just the town florist; she is also the county coroner, a sheriff’s dispatcher and a volunteer emergency medical technician. This afternoon, she is on ambulance duty.

“We all wear multiple hats out here,” she said.
The streets are lined with shuttered and boarded-up storefronts, some with their signs still on display: the Galloping Goose, the Sawtooth Club. Residents talk nostalgically about the town’s heyday, when there were banks, a bowling alley and a movie theater, back when residents drove to Idaho Falls only twice a year, to get school supplies and do Christmas shopping.

The town of Arco was founded in the 1870s as a junction for horse-drawn stagecoaches. Its quirky claim to fame is that in 1955, it became the first town in the world to be powered by nuclear energy, a credit to the Idaho National Laboratory, down the road toward Idaho Falls. Every summer, to celebrate its history, the town puts on a celebration that features a rodeo and a softball tournament.

Now, most of the businesses are gone. The town still has a lumber shop, a hardware store and a few auto garages. There’s also a bar, a gym and a dollar store. And around the corner there’s the local diner — Pickle’s Place — where people come day and night for fried pickles and biscuits and gravy.

Like so many other residents, Butte County clerk Shelly Shaffer has a personal connection to the hospital: Her mom worked there, her sister was born there, and she used to take her children there. Lost Rivers Medical Center — which also has two outpatient clinics — is one of the town’s biggest employers.

“It would be devastating if we didn’t have our hospital,” she said.

That was the direction they were headed. When Huerta, the CEO, arrived four years ago, he found the nearly 60-year-old hospital in disarray — dilapidated facilities, fearful employees, reluctant patients and a financial mess left behind by the former CEO. The hospital’s bank account held just $7,000 and morale was at an all-time low. “We were the poster child for everything that was wrong with rural health care,” he said. “It had been a slow, steady decline from neglect.”

Shannon Gamett, 28, a nurse at Lost Rivers, said paydays were nerve-wracking: “We would run as fast as we could to the bank to cash [a paycheck], or it might not clear.”

After borrowing money to pay his employees, Huerta campaigned to pass a $5.5 million bond for Lost Rivers. He asked locals if it was worth $5 a month — one six-pack of beer or two movie rentals — to keep the hospital running. They answered “yes” at the polls, and the hospital emerged from bankruptcy. Next, Huerta set his sights on overhauling the badly outmoded facilities. One of his top priorities was the laboratory, which he said looked like a high school science classroom from the 1950s.

He instituted a new philosophy: If it doesn’t happen at a “real” hospital, it doesn’t happen at Lost Rivers. That meant ending some local practices, nixing little things like letting staff members wear scrubs of any color they fancied, and big things, like allowing people to bring their horses in for X-rays. “I said, ‘I have no problem doing this, but you tell me what insurance the horse has,’” he recalled. “The practice stopped immediately.”

To bring in more revenue, he applied for grants and got the hospital a trauma center designation (the first level IV trauma center in Idaho) so it could get paid more for the care it was already providing. He saved money by inviting the town’s residents to help renovate clinic exam rooms and by moving the medical records to a cloud-based system that didn’t require more information technology employees.

Prognosis Unclear

Despite Huerta’s efforts, however, the long-term success of Lost Rivers is not guaranteed. “If you don’t have enough people to support a clinic or a hospital, it has no economic reason to be there,” said Ricketts, the Sheps Center fellow. “It just disappears.”

Arco and Butte County officials hope the local economy will get a boost from a planned expansion of Idaho National Laboratory, which conducts nuclear energy testing and research. Residents also are mounting a campaign to get the Craters of the Moon, a national monument in Butte County, designated as a national park.

“It would literally put us on the map,” county clerk Shaffer said.

But even if that happens, Huerta knows he can’t expect a big influx of new residents. Rural parts of the United States saw an absolute decline in population following the 2008 financial crisis, a trend that has since stabilized. But there is little or no growth. So Huerta has to concentrate on keeping the patients he has — and giving them a reason to keep coming. And it’s working: The hospital is now making a small profit and has some reserves on hand for future projects.

“If you are not offering the services, people are going to go somewhere else,” Huerta said. “And as medicine advances and reimbursement is still pegged to volume, you have to find ways to keep that existing population here.”

One big challenge for Lost Rivers and many other rural hospitals is that their patients tend to be older — and thus sicker and costlier to treat. People 65 and older account for about 18 percent of the rural population, compared with 12 percent in urban areas, according to the National Rural Health Association. An older patient base can strain hospitals because Medicare, the public insurance program for the elderly, doesn’t pay hospitals as well as private insurance does. Elderly patients also may need more intense care than small hospitals can provide.
Some seniors move to Arco precisely because there is a hospital in town. But for others, what Lost Rivers offers simply isn’t enough.Rural hospitals have a higher percentage of patients on Medicaid, the public insurance for poor people, which pays notoriously low rates to providers.

Residents Ray Westfall, 82, and his wife, Winona, recently put their house on the market after deciding it was time to move to Utah, closer to family and more specialized health care. Westfall has neuropathy in his legs, which causes numbness most of the time. He gets around with a walker. Winona has dementia.

“We can get some care here at the local hospital, but mostly we have to travel to Idaho Falls,” he said.

Westfall is a regular at Parsons’s flower shop. On a recent Tuesday, he bought a bouquet for his wife — carnations, her favorite.

Parsons said many of the emergency calls she responds to are for older folks who’ve suffered strokes, fallen at home or are struggling to breathe. One 99-year-old woman she took to the hospital on this morning had fallen in her living room.

Parsons said she has known many of her patients for years, through her parents or grandparents. As they grow old and get sick, she picks them up in the ambulance and drives them to Lost Rivers.

“And before long, I’m doing their funeral flowers,” she said.

Telemedicine: A New Frontier 

At first the Bengal Pharmacy, on the bottom floor of Lost Rivers Medical Center, looks like any other pharmacy, with racks of over-the-counter cold medications, bandages, reading glasses and medical supplies. Shelves of prescription medications sit behind the counter. But it has no pharmacist on site; instead, technicians and students from Idaho State University in Pocatello shuffle about, filling prescriptions.

Their supervisor is a pharmacist at the university, about 80 miles away, who checks their work remotely. Patients who want to talk to him go to a small private room with a phone and video link. The pharmacy is named for the university’s mascot.

For rural hospitals, telehealth can make otherwise faraway services accessible to people where they live, said Keith Mueller, director of the Center for Rural Health Policy Analysis at the University of Iowa. That can be critical, especially during the winter when snowstorms sometimes cut off access to rural towns.

“We can, in effect, bring the provider to the community without physically doing so,” Mueller said. “Even in urban areas, people want more and more convenience in how we receive our services. Here we are talking more about necessity.”

At Lost Rivers, patients can have telemedicine appointments with a psychiatrist. And doctors can get virtual guidance from specialists in trauma, emergency care and burns. But new technologies sometimes take getting used to. “When you lose that hometown community pharmacist, that human touch, when you turn it over to computers, that’s a concept that people have difficulty with,” said Martha Danz, who sits on the hospital’s board.

Leon Coon, 83, said the concept is a bit foreign to him. “I just don’t do that stuff,” said Coon, who works loading hay. “I’m a little old-fashioned.” Sipping coffee at the truck stop early on a Wednesday morning, Coon said he doesn’t even text, so he’s a bit wary of technology that puts him in touch with a pharmacist all the way in Pocatello. But then again, he said he doesn’t rely on the medical system much at all.

“Anytime you go to the doctor, it’s just like a mechanic,” he said. “They’re going to find something wrong. I feel good most of the time, so I just don’t go.”

Shane Rosenkrance, whose wife got trampled by the cow, said he remembers when there were five community drugstores in the valley. Now, he is grateful to have the one pharmacy — even if the pharmacist isn’t actually behind the counter. “To have health care, you have to have a pharmacy,” he said. “And through technology, they are able to do it.”

Telemedicine is hardly a panacea. The projects often depend on grants or government awards, because rural hospitals’ operating margins are slim. And some of the telemedicine and remote monitoring technologies require high-speed internet, which isn’t always reliable or cost-effective in rural areas.

“You can’t do home monitoring everywhere,” said Sally Buck, CEO of the National Rural Health Resource Center. “You can’t do telehealth everywhere.”
“Ego is a dangerous thing,” he said. “If there is anyone who can do a better job, I’m going to get [my patients] there.”Telemedicine also may raise more questions than it answers for some patients, and even create a need for in-person follow-ups. Orie Browne, the medical director for Lost Rivers, said he tries to keep patients from having to travel. But if someone needs more advanced medical care — or a specialist that Lost Rivers doesn’t have — he will refer them to another hospital. The hospital has a helicopter pad, and patients with emergencies that can’t be handled at Lost Rivers can either be flown out by helicopter or transferred by ambulance.

Nevertheless, Huerta said, he hopes to expand telemedicine, including such services as oncology. Huerta recognizes that Lost Rivers doesn’t have the staff or the expertise to do it all. He believes the hospital should try to do more when it can, and refer out the rest.

“We aren’t trying to do brain surgery,” he said. “We’re not doing Level I trauma. But colonoscopies? Tele-oncology? People in rural areas get cancer too, and it’s demanding driving hours back from a chemotherapy session.”

Rounding Up Doctors

Browne started work at Lost Rivers one recent day in March, then drove 45 minutes to one of its outpatient clinics in Mackay, 26 miles away. One of his first patients was Elizabeth Galasso, 59, who was worried because her heart rate was racing.

“I was scared,” Galasso said, speaking with a hoarse voice as she sat hunched on the exam table. “I felt my heart pounding clear down into my stomach.”

An EKG showed her heart was beating normally. Browne told her it was likely a panic attack, but suggested a stress test just to make sure. He told her that her age, her smoking history and anxiety all put her at risk for heart disease.

“But I think things are going to be just fine,” he said. Galasso reached over and hugged him.

Browne, who took over as Lost Rivers’s medical director in 2015, said he was drawn to the outdoor activities in the area — and the variety of rural health care. He used to have a private practice in Idaho Falls and rotated into Lost Rivers for a week at a time. Now, he spends his days bouncing between the emergency room, the hospital inpatient beds and the primary care clinic. “That’s good for a person who gets bored easily,” he said.

Many doctors, however, don’t feel the same pull. Rural hospitals and clinics have long struggled to recruit doctors. In rural areas, there are roughly 13 physicians — of any kind — per 100,000 people, compared with 31 in urban areas, according to the National Rural Health Association.

Doctors and other medical providers can be enticed by programs that repay their school loans if they work in a rural area. Some medical schools have programs designed specifically for students who plan to practice in rural or underserved communities. Another way to make treatment more accessible in rural areas is to expand the responsibilities of nurse practitioners, physician assistants and even paramedics.

Lost Rivers relies on nurse practitioners and physician assistants to provide care for patients in the clinics and the hospital. In addition to Browne, the medical center has four part-time primary care physicians, some who live hours away and come in once a week. Various specialists, including a cardiologist and an orthopedist, also rotate into the medical center’s outpatient clinics about once a month. And an MRI machine gets driven to the hospital once a week.

Tim Tomlinson, a podiatrist who lives in Twin Falls and drives 100 miles to Arco once a week, spent a recent morning seeing a lineup of patients. One was a man who had to have a toe amputated after a horse stepped on his foot, another a diabetic who needed a skin graft checked on his foot.

Tomlinson said he’s gotten paid late before, and he has seen the hospital nearly shut down more than once. But he keeps coming because he has developed a practice — and he thinks its important patients have access to specialty care. Lost Rivers isn’t unique in its difficulties, he noted. “All those small towns are struggling as young people move out, leaving mostly old people,” he said. “That puts a drain on the hospitals.”

Patients are living longer with chronic diseases now, so the demand for elderly care is only going to increase. If not the rural clinics and hospitals, Tomlinson said, “who’s going to deliver it?”

Even with the decline in the nation’s rural population, many people are rooted in rural America because of family or because they like the outdoors and a slower pace of life. One of them is Gene Davies, who has lived in Arco more than 60 years, runs a mechanic shop straight out of a different era. Handwritten signs sit on a wooden chair next to the door: “Gone to Dr.” “Be back tomorrow.” “Hope to be back Monday.”

Davies said he appreciates the remoteness of the region. “I ain’t got no plans to go anywhere else,” he said. “I’ve seen enough of the other world. I don’t want it.”

Rosenkrance, the cattle farmer, said she’s not going anywhere, either. She’s been coming to the hospital since she was a child, when she ran through the halls while her father worked in the pharmacy. Now her husband teases her about having a standing reservation in the emergency room.

Just before discharging Rosenkrance, nurse Celeste Parson told her she needed to rest physically and mentally. The accident had left her with a concussion, a lacerated ear and a black eye. Then Parson issued her the most important instruction: Don’t do anything that could cause another blow to the head.

“We would really like you to rest up for at least a week,” Parson said. “But the doctor knows for you, two or three days is more realistic.”

As she grabbed an ice pack and her purse, Rosenkrance reflected on the importance of Lost Rivers for residents across the whole valley.

“This hospital is a big deal,” she said. “It’s saved a lot of lives.”

 


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