Wednesday
Apr182018

No Signatures Required!

No Signatures Required!
 

By Kim Bellard, April 18, 2018

 

If you live in the U.S., you've probably had the experience of paying for a meal using a credit card.  The server takes your card, disappears to somewhere in the back, does something with it that you can't see, and returns with your card, along with two paper receipts, one of which you need to sign.

As of last week, the major credit card companies are no longer requiring that signature.  As a Mastercard person told CNET, "It is the right time to eliminate an antiquated practice."  

No kidding.  Healthcare should be eliminating its antiquated practices too.

Ending the requirement was 
announced last year, went away last week, but its actual demise will happen more slowly, as individual merchants can still require it.  Of course, the signature is only part of the antiquated process.  They're probably not looking up your card number on a monthly list of stolen cards any longer, nor using a manual imprinter to charge your card, but both using the physical card and taking it from you are steps that there are 21st century alternatives to. 

Still, I'd be willing to bet that the credit card companies and merchants bring their processes fully into the 21st century before healthcare does.


Let's go through some of these:

·         Healthcare still relies heavily on faxes. Supposedly it is because of security, "HIPAA," etc., but this reliance is a lot like requiring signatures for credit cards. 

·         In an era of ubiquitous smartphones, healthcare is still making heavy use of pagers, especially within hospitals

·         I can use an AMT pretty much anywhere in the world, and can not only access my bank account to obtain balance or transfer funds, but even to get cash on the spot.  In healthcare, I can't even go to a new doctor or healthcare facility without having to start from ground zero in terms of information about me (unless they are part of a health system I've already used).  

·         Patient portals have proliferated, with more options to do tasks online, but how many times do you visit a health care professional without having to fill out or sign yet another form? 

·         We can make online reservations for, say, restaurants, airlines, or hotels.  When it comes to making healthcare appointments, though, we're almost always forced to go through a tedious phone tree and end up negotiating with a human scheduler.   In 2018?

·         Manufacturers have overwhelmingly turned to just-in-time processes.  Meanwhile, in healthcare, an appointment time is usually at best an approximation; we expect to be seen late.  If you are in a facility expecting a test or procedure, it's even worse.  These aren't even 1960's levels of precision.

·         Telemedicine is widely available, but usually it won't be with your doctor and the doctor you end up getting won't have your medical history.  Shouldn't virtual visits usually be the first step?  

·         With healthcare there, no institution has access to even most of our medical history, which remains highly scattered, siloed, and sometimes even still paper-based.  How 1980's!  

·         We continue to urge people to get annual preventive exams, even though the value of them for most adults is highly dubious.  We still make people get unpleasant procedures like digital rectal exams, or tests of questionable value like PSAs or even mammograms.  

 

In many ways, we do have "space age" healthcare, but that space age is too often more like 1960's NASA than 21st century SpaceX. 

 

We can do better.  Much of healthcare has one foot firmly planted in the 21st century, and its vision looking forward.  But too much of it still has the other foot dragging in the 20th century. It is past time to not only identify but also to act upon antiquated practices in healthcare.
 

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

 
Friday
Apr132018

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition
 

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

 

More Americans Choose a Health Savings Account with a High Deductible Plan for Their Financial Security

Approximately 22 million Americans have chosen a health savings account (HSA) coupled with a high deductible health plan (HDHP), according to a new survey from America’s Health Insurance Plans (AHIP).

AHIP

Thursday, April 12, 2018

Drug executives to testify before Congress about their role in U.S. opioid crisis

Current and former executives with the pharmaceutical distributors that are accused of flooding communities with powerful prescription painkillers have been summoned to testify before Congress about their role in the U.S. opioid epidemic.

The Washington Post

Thursday, April 12, 2018

Why America's physician shortage could top 120k by 2030

The U.S. could face a shortage of more than 121,000 physicians by 2030, according to updated data from the Association of American Medical Colleges. The estimate is higher than AAMC's 2030 projections published last year.

Becker's Hospital Review

Wednesday, April 11, 2018

JP Morgan: Value-Based Care Will Guide Amazon, Berkshire Work

Amazon, JP Morgan, and Berkshire Hathaway will build their new company upon best practices in value-based care, including improving preventive care and managing member costs through data sharing, said JP Morgan Chase & Co. CEO Jamie Dimon in an investor letter.

HealthPayer Intelligence

Monday, April 9, 2018

Medicaid patients have better access to care than uninsured

Medicaid enrollees have better access to medical care than people who are uninsured, according to a new insurance industry study that refutes critics who say patients are better off without the government program for the poor.

Washington Examiner

Monday, April 9, 2018

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

 

 
Thursday
Apr122018

Long Term ACO Impact: Medicare vs. Medicaid vs. Commercial

Long Term ACO Impact: Medicare vs. Medicaid vs. Commercial
 

By Clive Riddle, April 12, 2018

 

Commercial accountable care – value based payment arrangements between purchasers and providers seem to be spreading virally. States Medicaid accountable care initiatives are proliferating.  Will Medicare continue to consumer the greatest share of healthcare stakeholder attributed ACO patients and financial resources?  The April issue of Accountable Care News Thoughtleaders Corner ask a panel this question: “Which type of ACO activity will have more impact on stakeholders in the long term: Medicare, Medicaid  or commercial?”

 

Kirit Pandit, Co-Founder & Chief Technology Officer of VitreosHealth responds that “I think Medicare ACO activity will have the most impact in the long term based on where incentives are maximized. Fully capitated plans such as Medicare Advantage and managed Medicaid plans will have the highest incentive to reduce costs and maintain high quality scores. This is where ACO activity will produce the best outcomes. The per member per month costs are high to make it attractive for providers to participate in these performance-based contracts.  However, compared to Medicare ACOs, Medicaid has higher churn rates. This makes it challenging for the providers to manage these members with a long-term perspective. If the churn rates are high, chronic care management activities will not have enough time to impact patient behavior and outcome. So the Medicare ACO plans that are fully capitated and have minimal member churn will have the highest impact.”

 

 Michael Millenson, President, Health Quality Advisors; adjunct associate professor of medicine at Northwestern University’s Feinberg School of Medicine and author of the book Demanding Medical Excellence has this to say: “Right now, it’s synergistic. Medicare is by far the nation's largest payer, but joining an ACO is voluntary. However, Medicare’s clout and standardization are critical. On the other hand, Medicaid and private payers can both push their programs on providers (a state or large employers can choose only ACOs) and be much more innovative. Statutorily, CMS could switch all Medicare to ACOs without additional congressional authorization. If that ever happens – with implicit Congressional approval and definitely in the long term – this question will have answered itself.”     

 

William DeMarco, Founder and President, Pendulum HealthCare Development Corporation, which has advised a wide range of ACO clients shares that “We think after all the dust settles, Medicare will offer the biggest impact on stakeholders. This considers total dollars and the fact that 10,000 Baby Boomers turn 65 every day and total cost of care will continue to rise ahead of inflation – so it will always be a big number. Medicaid will continue to be in a constant state of change on a state-by-state basis, but will slowly follow the ACO transition that may very well lead to more Special Needs and Dual-Eligible strategies being promoted by states and offered by insurers, as well as provider-led health plans that see the advantage of receiving a large capitated sum from Medicare and Medicaid for eligible patients. I say this based upon the number of Section 1115 waivers being sought to permit states to offer above and beyond Medicaid benefits through ACOs and CCOs. Commercial will always be in transition, as self-funded and fully insured are finding big deductibles do not work and the fiduciary accountability starts to weigh heavily on many of the purchasers of care. What employers are interested in are ACOs that can manage the active workers and retirees at a predictable cost. Health plans and insurers are seeing their profitability is linked with these ACOs that can take partial or full risk for the medical portion of the premium, and this allows the health plan to improve administrative cost savings – plus predict total cost of care.”

 

So, some collective wisdom seems to point towards Medicare continuing to hold the strongest magnetic force attracting ACO activity.

 
Friday
Apr062018

The PBM side of CVS

The PBM side of CVS
 

By Clive Riddle, April 6, 2018

 

Assuming the CVS acquisition of Aetna clears all final hurdles, perhaps the most attention given to the merged company is in respect to the retail synergies. But the CVS Caremark PBM also deserves considerable attention. After all, Cigna’s big merger recently announced with Express Scripts was purely a PBM play.

 

With that in mind, its interesting to poke through the just released 14-page CVS Health Drug Trend Report 2017. Similar to Express Scripts previously released 2017 report, the CVS Health report was certainly positive, and they touted that drug prices for clients  rose “at a minimal 0.2 percent, despite manufacturer price inflation near 10 percent.”

 

But it must be noted that the touted 0.2 percent increase was just for prices. There was 1.7% cost growth due to utilization, yielding a total pmpy drug trend in 2017 of 1.9%, still quite a positive trend.

 

Here is additional data CVS shared about their client experience in 2017:

·         While CVS drug price growth was 0.2%, the manufacturer AWP inflation rates were 9.2& for traditional brands, 8.3% for specialty brands, and 0.4% for generics.

·         The CVS generic dispensing rate was 86.1%.

·         CVS traditional and specialty brands accounted for 14% of prescriptions dispensed, but 69% of pharmaceutical spend.

·         The CVS specialty trend consisted of 3.7% price growth plus 9.2% utilization cost growth for a total 12.9% 2017 specialty trend.

·         CVS gross client costs pmpm were 108.42 pmpm in 2017 compared to $104.10 in 2016.

·         For CVS Clients with managed formularies, costs were $88.94 pmpm compared to $87.43 pmpm in 2016.

·         The managed formulary differential in overall drug trend for 2017 resulted in a 1.7% trend with managed formulary clients compared to 4.2% trend for other clients.

·         42 percent of CVS Health commercial PBM clients spent less on their pharmacy benefit plan in 2017 than they had in 2016.

·         For clients aligned with the company's managed formularies, drug price declined by 0.1 percent, in 2017, as compared to the overall 0.2 percent drug price growth.

·         Member out of pocket costs pmpm declined from $11.99 in 2016 to $11.89 in 2017.

·         In 2017 24% of members had zero out of pocket costs (no claims), 49.4% of members had out of pocket costs under $100, 14.6% had out of pocket costs between $100-$299, 5% had out of pocket costs between $300 - $499, 4.3% between $500-$599 and 2.7% above $1,000.

 
Friday
Mar302018

Wal-Mart and Humana: How Healthcare on Wall Street Imitates Hollywood

Wal-Mart and Humana: How Healthcare on Wall Street Imitates Hollywood
 

 

By Clive Riddle, March 30, 2018

Hollywood notoriously chases a hot movie trend with much more of the same – imitation being the most sincere form of flattery.  Wall Street when it comes to healthcare continues to flatter Hollywood by imitating this strategy as best they can.

 

In the 1980s, public hospital companies rushed to acquire health plans. They subsequently rushed to spin-off or otherwise unload them. That’s how Humana become just a health plan company. In the 1990’s, the PPM industry was born as integrated delivery systems where split up, giving birth to PhyCor an others who subsequently flamed out.

 

More recently, on the heels of ACA implementation, the mantra was to increase clout to succeed in the Marketplaces and expanding Medicaid and Medicare Advantage programs. Aetna announced the Humana acquisition and Centene announced the HealthNet acquisition within a day of each other in early July 2015. Three weeks later Anthem announced the Cigna acquisition.

 

Then in February 2017, Aetna-Humana and Anthem-Cigna separately announced on the same day the death of their proposed mergers, thanks to DOJ opposition, and in Anthem-Cigna’s case, merger indigestion. Additionally, the new Trump administration and Republication Congress’ zeal for Repeal made the merger’s marketplace strategy seem moot.

 

But a year later a new blockbuster movie formula has developed. There is Amazon style retail market disruption looming over the pharmacy sector in particular but the rest of healthcare as well, and the specter of the mysterious Amazon-BershireHathaway-JPMorgan healthcare venture. There is the outcry over pharmaceutical costs, and the questioning of the PBM sector’s role.  From this backdrop the CVS-Aetna merger emerges in early December.  Then early this month Cigna announces their Express Scripts acquisition.

 

And now the Wall Street Journal and many others report Walmart is in early stage acquisition talks with Humana. WSJ notes the annual revenue of WalMart is $500 billion and Humana’s is $54B, compared to $185B fir CVS, $61B for Aetna, $42B for Cigna and $100B for Express Scripts.

 

Will the Walmart-Human movie deal get inked? Will any of these new projects make it through production and get released? And what sequels and similar projects are under development?