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CBO report: Hospitals need to raise productivity to stave off big losses

 

brinker

Tourism statue in the Netherlands, of a nameless boy plugging a dike to stop a great flood.

A new analysis from the Congressional Budget Office (CBO) has recognized that changes in laws and regulations, prompted primarily by the ACA–notably reduced Medicare payment updates and expanded insurance coverage–can be expected to significantly impact hospitals’ future finances.

Things look tough!

The researchers noted “substantial uncertainty” around the predictions.

The CBO’s  predictions included:

If hospitals improved their productivity  only in line with the overall economy — by an average of about 0.8 percent a year through 2025, the share of hospitals with operating losses would rise to 41 percent and hospitals’ average profit margin fall to 3.3 percent.

If hospitals boosted their productivity by 0.4 percent a year, the share with operating losses would rise to  51 percent and their average profit margin fall to 1.6 percent.

If hospitals can’t increase their productivity or otherwise reduce cost growth, the share with operating losses would rise to 60 percent.

“Consequently, if those hospitals were not able to increase their productivity by enough to fully offset those reductions in payment updates or did not use those productivity gains to reduce the growth of their costs then Medicare’s payments would not keep pace with their costs of treating those patients, and profit margins for those hospitals would decline,” the  CBO researchers concluded.

To read the CBO report, please hit this link.

To read a HeathcareDIVE review 0f it, please hit this link.


Maybe it’s time to wave goodbye to for-profit insurers

 

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Some commercial insurers are exiting the insurance exchanges created by the Affordable Care Act, complaining they can’t make enough money on them, But they had  better watch out, writes Caroline Poplin, M.D., in MedPage Today. Their exit may make a lot more people wonder why we need  commercial insurers {and their vast cost to the public} at all. She writes at the end of her piece:

“Commercial insurance works by charging individuals enough to cover their risk (with something left over for profit). High-risk people often cannot buy insurance at all. No one sells ordinary flood insurance to homeowners in a flood plain. We have Medicare for elderly and disabled people because they couldn’t get private health insurance. Insurers want to keep their healthy customers, and let someone else — high-risk pools, charity, the government — take care of anyone who gets sick.

“But remember this: health insurance is not healthcare. Insurers are simply middlemen: if they disappeared — or were paid simply to track claims — and replaced by a Medicare-for-all system, everyone could still access healthcare. It is not clear that the value added by the industry is worth the cost, estimated at $350 billion {a year}. Spending that money directly on healthcare could improve our health, and eliminating public subsides to private insurers would reduce the deficit.

“Insurers who are dissatisfied with the ACA: Be careful what you wish for.”

To read her entire essay, please hit this link.


Obama proposes some major ACA repair

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The Obama administration is planning rules changes to  try to fix some of the problems bedeviling the Affordable Care Act, especially  the flight of insurers from the exchanges set up under the ACA.

A central aim is to rebalancing the risk pool to reduce “adverse selection” of the sickest and costliest patients on the exchanges. Among the proposed changes, as summarized by FierceHealthcare:

  • Toughening proof of eligibility for Special Enrollment Period enrollees.

  • Encouraging consumers turning 65 to shift from ACA products to Medicare ones,  thus reducing the risk profile of a demographic with higher-than-average healthcare-use rates.

  • Boosting a recent task force dedicated to ousting healthcare providers who direct patients toward ACA plans instead of Medicare and Medicaid in order to receive greater reimbursements.

  • “Creating space for insurers to creatively design their insurance products, particularly for ‘benchmark’ federally-subsidized health plans.”

  • “Restructuring how medical loss ratios are calculated.”

  • “Ending the current rule that bans insurers from entering exchange marketplaces for up to five years if they exit a marketplace.”

  • “Ascertaining whether user fees should be allocated toward outreach efforts.”

    To read a longer article on this, please hit this link.


Hysteria over Aetna’s partial ACA evacuation needs to be cooled

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Jon Kingsdale argues in Health Affairs that news coverage of Aetna’s plan to exit from 11 of the 15 states where it now offers insurance on Affordable Care Act insurance exchanges, and similar actions by some other big insurers, such as Humana and United Healthcare, has contained much hyperbole and that in fact the exits are no big deal.

He writes:

Critics of the ACA are citing these departures as evidence of the law’s fatally flawed design. Even supporters worry about how to staunch the outflow. And the news reverberated in presidential politics, on both sides. What’s really going on here? Are these big insurers bailing because Obamacare is just too risky? Will more such desertions cripple the marketplaces?”

He answers himself: “Not all health insurance companies are the same, nor do they necessarily serve the same customer segments. In fact, most medical insurance companies, unlike Aetna and United, are regional non-profits, such as the state (or smaller) Blue Cross Blue Shield plans, Kaiser Permanente and HIP. These ‘regional’ plans and Medicaid managed care organizations (MCOs) are generally better positioned to compete on the new marketplaces than ‘national’ insurers.”

“By contrast, national firms such as Aetna, United and CIGNA are far better positioned to serve national employers and other large, self-insured groups than to compete for individual households.”

“The vast majority of purchasers on the ACA marketplace are low-to-moderate income households, who are searching for low-priced health plans. As extremely ‘price-sensitive’ buyers, most seem willing to trade access to a broader network in return for lower premiums. Regional health plans and Medicaid MCOs are generally more successful than national ones in negotiating the lowest payment rates with local doctors and hospitals. As a result, the Blue Cross Blue Shield and other regional plans generally—not always—enjoy a cost and premium advantage over national plans and tend to dominate their marketplaces.”

“In fact, United and Aetna, despite their deep penetration of the large-group insurance market, together serve only 15 percent of marketplace enrollees, and their retrenchment will impact only about 10 percent.

“They are leaving many marketplaces, but staying in those where they think they can compete. This is clearly not the same as rejecting ACA marketplaces wholesale because of some fundamental flaw in the law. Presumably, they are being selective about their participation as they see how price-disciplined the marketplaces are and where they enjoy a competitive advantage.”

To read Mr. Kingsdale’s Health Affairs article, please hit this link.

 

 


Reality check for innovative Oscar Insurance Corp.

 

Oscar Insurance Corp., the startup that has  touted itself  as a consumer- and technology-focused new  healthcare approach, has had to turn to the same strategy as many traditional insurers by reducing  Affordable Care Act insurance-marketplace participation for 2017.

It will stop offering plans in the Dallas–Fort Worth, Texas market and in New Jersey  starting Jan. 1. It will continue to sell plans in New York; San Antonio, Texas; Los Angeles and Orange County, Calif.; and it will expand to San Francisco.

The company blamed the ACA’s individual market, saying that  it “isn’t working as intended and there are weaknesses in the way it’s been set up,” CEO Mario Schlosser told Bloomberg.

HealthcareDive reported that the announcement is part of the company’s efforts to “re-strategize after suffering continued marketplace losses, including its recently announced losses from the first half of 2017 which included $52.2 million in New York state, $17.9 million in Texas and $12.9 million in California.”

The news service added: “Oscar has also followed industry trends in narrowing its networks and in seeking a major rate increase in New York of 26.8 percent, which was reduced by regulators to 11.5 percent.”

Mr. Schlosser said Oscar is leaving New Jersey because it didn’t have a narrow network there to contain costs, and Dallas-Fort Worth because its market  there has been too unpredictable.

“One major difference currently between Oscar and its mainstream competitors such as UnitedHealth, Humana, and Aetna, which are also pulling back for 2017, is that it doesn’t have other business beyond its individual policies to fall back on — but it plans to change that by offering small group insurance across most of its 2017 markets,” Healthcare Dive reported.

To read the news service’s full article, please hit this link.

 

 


Hospitals struggle to keep elderly patients moving

 

By ANNA GORMAN

For Kaiser Health News

BIRMINGHAM, Ala. — Thelma Atkins ended up in the University of Alabama at Birmingham (UAB) Hospital-Highlands after a neighbor in her senior living center ran over her feet with a motorized scooter.

Terri Middlebrooks, a nurse at the hospital, tried to figure out how active the 92-year-old Atkins was before the incident. “Are you up and moving at home?” she asked.

“I can manage, but I have to have help sometimes,” Atkins replied.

Atkins said she uses a walker to visit friends and to get to the communal dining room. But she’s also fallen a few times in recent years.

“Don’t quit walking here,” Middlebrooks told her. “It’s the most important thing you can do. … This bed is not your friend.”

Middlebrooks is the coordinator of a unit designed to address the challenges specific to caring for the elderly. She told her new patient that throughout her stay, one of the main goals would be to keep her active.

The medical center’s effort to get older patients up and moving while they are in the hospital is far from typical. Despite a growing body of research that shows staying in bed can be harmful to seniors, many hospitals still don’t put a high priority on making them walk.

At UAB Hospital-Highlands’ s 26-bed geriatric unit, known as the Acute Care for Elders unit, or ACE, patients are encouraged to start moving as soon as they arrive. The unit is one of a few hundred around the U.S. that is attempting to provide better and more tailored care to geriatric patients.

The hospital opened the unit in 2008 with the recognition that the elderly population was growing and that many older patients didn’t fare well in the hospital. ACE units are based on the idea that if the unique needs of seniors are met, they will have better outcomes and their care will be less costly.

Research has shown that the units shorten patients’ stays in the hospital, reduce their likelihood of returning too soon after discharge and make it less likely they will be sent to a nursing home.

Thelma Atkins, 92, talks to Terri Middlebrooks, a nurse who manages the geriatric unit at UAB Hospital-Highlands. Atkins’ daughter and son-in-law listen in. Middlebrooks says that “patients walk in the door of a hospital and think it’s OK to stay in a bed. It’s not.”

In addition to employing specially trained staff who work together as a team, the Alabama unit has special handrails attached to the walls, low-glare lighting and non-skid floors. Every room has a walker and plenty of space to move around. Volunteers walk with patients, and therapists work with them on maintaining their strength.

Staff members try to disabuse patients of the idea that they are there to rest. “People walk in the door of a hospital and think it’s OK to stay in a bed. It’s not,” said Middlebrooks.

Andres Viles, a nurse coordinator, said nurses at other hospitals are often so busy administering medications and tending to wounds that they don’t make time to walk with their charges. The emphasis on patient mobility is “a culture change” for most hospitals, he said.

At UAB Hospital-Highlands, that shift took a lot of education. Staff members in the new unit attended workshops that included role playing and sensitivity training. The hospital also trained “geriatric scholars,” who became advocates for addressing the particular physical and cognitive needs of seniors.

The Affordable Care Act explains some of the reluctance by staff at many hospitals to get patients moving, experts say. Under the law, hospitals are penalized for preventable problems, including falls. Researchers believe that hospital staffers, to ensure their patients don’t fall, often leave them in their beds.

“We are doing an awful lot to prevent falls, but there is a cost,” said Heidi Wald, an associate professor at the University of Colorado School of Medicine. “The cost is decreased mobility.”

Researchers said there are other explanations for the failure of hospitals to get elderly patients moving. They may not have enough staff, for example, or they may fear lawsuits.

Families won’t sue if their mom gets weaker in the hospital, but they may if she falls, said Cynthia Brown, director of the Division of Gerontology, Geriatrics and Palliative Care at the UAB School of Medicine.
Brown added that hospital staffers around the country generally do not consider walking with patients to be as important as their other duties. “It is just one more thing on a list of a whole lot of things,” she said. “Often times, walking falls to the bottom.”“Why would the hospital want to put themselves at risk for litigation or the CMS [Centers for Medicare and Medicaid Services] coming back and biting them?” she said.

It’s also harder for patients to walk around if they are attached to IV lines or oxygen tanks, or if they take drugs that make them sleepy. Such medication or equipment is not always necessary.

The very layout of hospitals and the way they operate makes it too easy for patients to remain stationary. They can control their televisions by raising a finger, and they typically get their food in bed.

On average, hospitalized older patients spend just 43 minutes a day standing or walking, according to a study by Brown published in the Journal of the American Geriatrics Society. They are in bed more than 80 percent of their hospital stay, she found.

The impact of remaining so sedentary in the hospital can be devastating for older patients: It is puts them at greater risk for blood clots, pressure ulcers and confusion.

Immobility can also reduce patients’ ability to take care of themselves when they go home — a difficulty that persists a month after their discharge, according to Brown. And it puts them at higher risk of readmission to the hospital, according to research.

Immobility hurts older patients more than younger ones, in part because the elderly are generally weaker, have less bone density and are at higher risk of falling. Ironically, keeping a patient in bed, which is often intended to prevent falls in the hospital, can increase their risk of falling after they are discharged, experts said.

“They don’t bounce back,” Landefeld said. “The pneumonia is better, but Aunt Mary is not walking and talking the same as before.”

Landefeld said hospitals frequently take the “smart bomb” approach to illness. “We blow away the disease, but we leave a lot of collateral damage,” he said.

Making sure hospitalized patients spend sufficient time out of their beds can save money, keep them mobile after they return home and improve their overall health. Researchers in Texas found that increasing the number of steps elderly patients took on their first and last days in the hospital reduced their risk of dying over the following two years. A study of pneumonia patients of all ages showed that walking early in their hospital stay shortened its duration, saving an average of $1,000 per patient.

The hospital hosts a twice-weekly session called “Move and Groove,” designed to get older patients dancing. At a recent session, a music therapist played the piano as the patients held tambourines or bells and moved their feet to the beat. All of the patients used walkers. A few had oxygen tanks and most wore bracelets indicating they were at risk of falling.

Occupational therapist Linda Pilkerton said she doesn’t give patients a choice of whether to participate.

“We don’t ask them if they want to do an X-ray or if they want a CT scan,” she said. “This is ordered by the doctor. If they don’t get up and move, they start the death spiral.”

After Atkins was admitted to the unit following the scooter mishap, Middlebrooks told her it would only take two days of lying in bed to lose muscle mass. “And if you lose muscle mass, you get weaker and you’re more apt to fall,” the nurse explained, adding that Atkins had done enough of that.
But she said she’s determined to keep walking — at home and in the hospital.Atkins, who has a pacemaker and has had hip and hernia surgeries, said she has lived alone a long time and doesn’t want to end up in a nursing home. As she pushed her walker down the hospital corridor, she acknowledged that she’s gotten weaker as she’s gotten older and that her arthritis makes it more difficult to shower and dress by herself.

“I don’t want to lose more independence,” she said. “I’ve already lost a lot of it.”

But even if patients spend a lot of time out of bed while they are in the hospital, it does not guarantee they will recover.

Willie Mae Rich, 86, came to the Alabama hospital this spring because her doctor was concerned about her heart. Rich knew her bones wouldn’t withstand a fall, so she worried about walking around too much.

“I’ll break up like peppermint candy,” she said.

But the hospital staff didn’t give her a choice. They urged her to eat meals while sitting in a chair, get herself dressed and get up as often as possible.

“The more time you spend out of this bed, the healthier you’ll be,” Viles told her.

Despite staying active in the hospital, Rich, a great-grandmother, became more sedentary over the next several weeks. Her daughter, Debra Rich-Horn, said her mother continued to walk when she first came home, but soon she could barely get out of bed.

In May, she passed away.

“Her heart was already at a bad stage,” Rich-Horn said. “By the time [the hospital] got her, it was too late.”

 


Some things to know about Aetna’s ACA threats

 

Herewith Becker’s  Hospital  Review looks at “things to know” about Aetna’s plan to withdraw from most Affordable Care Act  state insurance marketplaces:

1. The insurer warned the U. S. Department of Justice on July 5 that it would immediately act to reduce its 2017 ACA exchange footprint if the DOJ sued to stop  its acquisition of Humana.

2. Aetna CEO Mark Bertolini said if its transaction with Humana is blocked, it is “very likely”  that Aetna would exit the ACA exchanges entirely. However, if the deal closes, Mr. Bertolini said, Aetna would look into how it can support “more public exchange coverage over the next few years.”

3. On July 21, the DOJ sued to block the $37 billion Aetna-Humana deal over antitrust concerns. The DOJ is also fighting a merger between Anthem and Cigna.

4. On Aug. 15, in Becker’s words: “Aetna said it will pull out of 11 of its 15 state ACA exchanges next year, citing $430 million in losses on its individual plans since January 2014.”

5. Kevin Counihan, director of the ACA marketplaces, told Politico  that Aetna’s departure placed a greater urgency on HHS’s insurer recruitment. He asserted that losing big insurers like Aetna does not mean the exchanges are broken, but rather it is “the nature of the industry.”

6. Aetna had revenue of $15.95 billion in the second quarter of 2016, up 5 percent from the year-earlier period. The insurer recorded net income of $790.8 million, up from the year-earlier  $731.8 million.

To read the Becker’s article, please hit this link.


Big insurers’ exits revive talk of Medicare for all

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As big insurers bail out of the insurance exchanges created by the Affordable Care Act, the idea of simplifying, and saving money on, the currently chaotic U.S. healthcare “system” by extending Medicare to all, or at least offering a “public option” on the exchanges, is gaining ground.

Polls suggest that a majority of the population would like Medicare for all but  the  insurance companies have a powerful lobbying and campaign-contribution operation in Washington to try to thwart that.

President Obama, pushing back against criticism of the Affordable Care Act in the wake of the insurance company exits from ACA’s insurance exchanges, has revived the idea of introducing a public, Medicare-like plan to compete with private insurers. He also has suggested that increased government subsidies could help draw more people into the ACA’s markets.

Bloomberg has noted also: “Another option is to simply give insurance companies more government money, but that would require action from a Republican Congress that would rather repeal Obamacare than fix it.”

‘There’s going to be absolutely zero interest among Republicans in bailing out Obamacare by giving it more money,”  Avik Roy, a healthcare expert who’s advised Republican presidential candidates Mitt Romney, Rick Perry and Marco Rubio on health policy, told Bloomberg.

With  such unknowns as who will control the White House and one or both houses of Congress after the November election, one would have to be very brave to make predictions.

To read the Bloomberg article on this developing story, please hit this link.


Study asserts insurance marketplaces are healthy

By PHIL GALEWITZ

For Kaiser Health News

Despite dire warnings from Republicans and some large insurers about the stability of the Affordable Care Act exchanges, an Obama administration report released Aug. 11 indicated that the individual health insurance market has steadily added healthier and lower-risk consumers.

Medical costs per enrollee in the exchanges in 2015 were unchanged compared with 2014, according to the Centers for Medicare & Medicaid Services. In contrast, per-member health costs rose between 3 percent and 6 percent in the broader U.S. insurance market, which includes 154 million people who get coverage through their employer and the 55 million people on Medicare, the report said.

Aviva Aron-Dine, senior counselor to U.S. Health and Human Services Secretary Sylvia Burwell, said the data was encouraging when many insurers have announced double-digit rate increases for 2017 and others have pulled back in some states to curtail financial losses.

“What we take from this is that the marketplace is on sound footing,” she said in a phone briefing with reporters. She also said the sharp 2017 rate increases could be intended to help insurers compensate for underpricing their premiums in 2014 and 2015 and not the first in a series of large annual rate hikes. Next year’s phase-out of the Affordable Care Act’s reinsurance programs — which helped insurers cover losses on higher-cost enrollees the past two years — is another reason why some insurers want higher rates for 2017.

Nearly 13 million Americans bought coverage for 2016 on the Obamacare marketplaces. More than 80 percent received federal subsidies that help them afford policies and insulate them from effects of premium increases.

Several insurers, including UnitedHealth Group and Humana, have said they will not sell 2017 individual plans on many state exchanges because they absorbed heavier-than-expected losses in part due to higher medical claims.

Aron-Dine said the administration always expected that rising enrollments would attract younger and healthier enrollees to balance the risk of insuring the older and sicker people who signed up initially. In 10 states with the highest enrollment growth from 2014 to 2015, the government reported, per-member per-month claims costs fell by an average of 5 percent.

Its study was based on claims data collected by CMS to administer the health law’s reinsurance and risk adjustment programs. Insurers submitted their 2015 data earlier this year.

What explains insurers’ losses from Obamacare if health costs have held steady?

Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, said some insurers priced their coverage too low in 2014 and 2015 — in part to grab market share — and are now trying to make up for it. She said insurers have based most of their 2017 rate increases on their 2015 results.

“This should reassure people that despite the narrative that these markets are going down the toilet, in fact the report shows the opposite … that these markets are generally performing pretty well,” Corlette said.

Cynthia Cox, associate director for the Kaiser Family Foundation Program for the Study of Health Reform and Private Insurance, said the CMS report is good news for consumers. “This suggests the premium increases that we are seeing going into 2017 is likely to be a one-time adjustment … for pricing too low in the first few years,” she said. (Kaiser Health News is an editorially independent program of the foundation.)


Crucial role of employers in making ACA work better

 

In an article in the Harvard Business Review, Robert S. Mecklenburg, M.D., medical director of the Center for Health Care Solutions at Virginia Mason Medical Center, and Lindsay A. Martin, executive director of innovation and an adviser at the Institute for Healthcare Improvement, write that large employers are key to making the Affordable Care Act work up to its potential.

They write:  {L}arge employers can play a powerful role in building on what the ACA and other initiatives have achieved to date and accelerate the positive transformation of the U.S. healthcare system.”

“Through the ACA, many new customers have been able to enter the healthcare  market, but the market remains inefficient. The ACA includes mechanisms for cost reduction that employers can build upon by contributing their purchasing power to create a complementary quality-based market to address the trillion dollars in waste that continues to burden patients, providers, and employers alike.

“Businesses as well as public sector entities can play a lead role in mitigating political hyper-partisanship and special interests by working directly with local healthcare providers to define, secure, and execute to transparent standards. Pragmatism can prevail.”

To read the article, please hit this link.


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