Ten Trends to Ponder for 2014

By Clive Riddle, December 20, 2013

These aren’t necessarily the top ten trends for the coming year, because the ranking of trends depends on the position of the stakeholder – in other words – in the eye of the beholder.  But below are ten trends worth pondering as one positions oneself for the year ahead:

Private sector co-opting of public healthcare policy.  Consider a number of the trends discussed below. What they have in common – an overarching theme – is that the private sector has co-opted public healthcare policy, and may have achieved a greater impact than the public sector in doing so. The ACA begat Medicare ACOs – but the commercial ACO arrangements are generating a groundswell of activity. The ACA’s centerpiece is the public exchange launch of 2014, but the private sector is paying an awful lot of attention to private exchanges. Ten years ago, HSAs and High Deductible Plans were policy driven – now they are market driven. The Stimulus drove Meaningful Use, but now that it’s become meaningful, the private sector is leveraging what to do with this new framework.

Commercial ACO Collaborations become commonplace. Soon health plans and provider networks may stop issuing press releases with each new collaboration because they are so commonplace, they just aren’t news anymore. Unlike their Medicare counterparts that are standardized arrangements, the commercial collaborations are customized, any one might argue about how many of them meet the definition of a true Accountable Care arrangement. Or perhaps they will simply erode the definition to the point where we end up calling them something else.

Private Exchanges Exceed Expectations While Public Exchanges Fall Short.  While public exchanges can drive much bigger numbers due to sheer numbers of the uninsured and underinsured, and the availability of subsidies, 2014 will find the level of impact and implications falling short of expectations as not as many of these population opt-in as expected, at least for now. This will also mean the dire predictions of ongoing glitches and budget shortfalls may not be as bad as predicted, because there will be fewer numbers for now compared to initial rosy projections. Meanwhile, private exchanges may very well exceed initial expectations for enrollment and levels of interest as 2014 takes shape.

Defined Contribution Drives Private Exchanges.  Defined contribution health plan arrangements were the buzzwords at the dawn of this millennium, but got left aside in the rush to account based and high deductible health plans in the consumerism movement. But now the stars are aligning for the return of the prodigal defined contribution son, as the driver of how most private exchanges are designed, and the driver of private sector interest in 2014 and beyond.

Is Everyone in a High Deductible Plan? There a lots a surveys with varying reported levels of HDHP penetration in the commercial sector – but this much can be agreed upon – all the percentages keep trending up… and up. Unfortunately, the account based plans that were supposed to accompany the HDHPs are missing in many employer sponsored plans, or at least the employer contribution is. Never the less, the trend for HDHP growth will continue.

Innovation, Transformation and Integration are the Words of the Year.  Like the old 80’s episodes of Pee-Wee’s Playhouse, with the word of the day that set off buzzers, Innovation, Transformation and Integration are the words for 2014… although they will in many cases, be words but not action at this point in time. But if your organization doesn’t yet have a Chief Innovation, Chief Innovation or Chief Integration Officer, look for them in 2014.

EHR Tipping Point Drives Innovation. Of course lots of physician practices still don’t have EHR. And a number who do aren’t all that interoperable. But still, the point has been reached where there’s gobs of stuff you can do with the level of electronic data and transmission that is now being generated – and this is going to continue to stimulate a plethora of new applications and solutions in a range of environments.

Analytics Extends Its Reach.  Analytics has become huge for so many sectors – healthcare may actually be a laggard. But make no mistake – analytics is where the action is in healthcare for 2014 if there is any hope in taming the beast of operational inefficiencies, resource management, and explosive costs.

The Further Evolution of Population Health.  Ten years ago the definition of Population Health was commonly held to be “the health outcomes of a group of individuals, including the distribution of such outcomes within the group” and was more prevalent in policy and academic circles. 2014 finds the scope and role of population health expanding and evolving, with strong involvement from the private sector.

Consumer Engagement Just Needs More Consumers to Get Engaged. In 2014, we will see the tools are there – apps, websites, outreach programs, incentive programs, plan design, you-name-it. The challenge we find ourselves in for 2014, is a number of surveys continue to demonstrate that large blocks of consumers remain unengaged, uninformed and fairly clueless about the delivery or the business of healthcare.


Pwc Top Healthcare Issues in 2014

By Claire Thayer, December 12, 2013

This week, PwC’s Health Research Institute (HRI) released its annual report on their top health industry issues. Trending as HRI’s top 10 issues for 2014 are:

To explore all of these important issues, start here!  Want to learn more, these and other key trends and issues impacting the business of health care throughout 2014 will be discussed at the 12th Annual Future Care Web Summit, scheduled for January 23, 2014 – the webinar is at 1:00PM.


Humana’s Vipin Gopal on Advancing the Frontiers in Predictive Modeling

By Clive Riddle, December 10, 2013

Vipin Gopal, PhD, Vice President of Clinical Analytics for Humana gave the opening plenary presentation last week during the Seventh National Predictive Modeling Summit in Washington, DC, providing an excellent overview of the current and future state of predictive modeling in healthcare.

Vipin summarizes the state of predictive modeling from his and Humana’s perspective as follows:

  • They have seen rapid evolution as a discipline over the past decade
  • There is newer and better software, data sources, hardware
  • There are a lot more applications
  • They have a deeper understanding of their members
  • There are now more efficient and effective delivery mechanisms for model output
  • Predictive Modelers will make a broader and deeper impact for in the coming years

Vipin offers as advice, these guiding principles for organizations deploying predictive modeling functions:

  1. Establish a set of "quick wins" to drive early results and build momentum
  2. Show results to bolster the business case behind making further investments
  3. Focus on the issues that have the most direct impact on the business
  4. Ensure that effort is placed on key strategic issues and pressing challenges
  5. Address challenges with underlying data
  6. Clean and streamlined data is an enabler for the creation of more effective and comprehensive analytical models

Vipin advocates that leading-edge analytics should encompass these themes:

  • Focus: Are we solving the right problems?
  • Nimble: Rapid analytics to respond to business needs
  • Cutting-edge Methods: State-of-the-art problem solving
  • Tools: Leverage advancements in the analytics marketplace
  • Optimize: Maximize output of analytic resources
  • Integrate: Systems approach to data, analytics and action
  • Real-time: Closing the feedback loop with the most recent data

What are the key components of predictive modeling in healthcare, according to Vipin? Three things that should all work towards improved outcomes, high engagement and reduced costs: (1) Integration of Data,

Action, and Analytics; (2) Infrastructure incorporating Consistent, comprehensive datasets, Cutting edge analytic tools, and Deployment to action; and (3) Talent (predictive modeling staff and outsourced vendors.)

Vipin notes that past modeling work primarily relied on claims data, while current work aggregates multiple data sources to create an integrated view of the member for consistent and rapid analytics.

So where are we headed with data sources? Vipin reviewed these Next-Gen sources:

  • Text Based (EMR; Nurses’ Notes; Call Center Transcripts)
  • Devices (Remote monitoring, Smart Phones)
  • Online Data (Social Media Data, Web Footprint)

And where are we headed overall? Vipin sees a broad range of applications, including Clinical, Marketing, 

Financial, and Fraud Detection. He sees us mining deeper data sources, driven by a need to know our consumers better, while deploying more efficient delivery mechanisms that incorporate real-time alerts and mobile devices.  The “Holy Grail” in all of this? Vipin says it is predicting and influencing consumer behavior; and we need to do this in an environment in which there is a proliferation of models and we hopefully will simultaneously see efforts to have them work in unison!


MCOL Blog | Fraud, Waste & Abuse Continuum in Healthcare

By Claire Thayer, December 6 , 2013

This week, Verisk Health posted a blog that identifies these three specific opportunities to help control costs and eliminate fraud, waste and abuse in healthcare:

  1. Tracking Durable Medical Equipment (DME)
  2. Assessing Lab National Coverage Determinations
  3. Improving Payment Accuracy on Modifiers 59 and 25

There's an interesting supportive infographic on the Verisk Health site that shows fraud, waste and abuse existing on a continuum and the level of intent a provider has to deceive – here’s a screen shot identifying the behaviors within the FWA continuum:

More details on these payment accuracy solutions are here.


A Stitch In Time…Will Cost A Lot of Money

By Kim Bellard, December 5, 2013

It almost seems like piling on to pick on hospital pricing anymore, following such incisive articles already this year such as Steven Brill’s Time article “Bitter Pill” or Elizabeth Rosenthal’s “The $2.7 Trillion Medical Bill” in the New York Times, but there just continue to be more examples of how irrational health care charges are in the U.S. health care system. 

Jillian and Joseph Bernstein just published a study in JAMA Internal Medicine, focusing on the difficulty in getting hospitals’ prices for electrocardiograms (ECGs) – and comparing that with the ease of obtaining those same hospitals’ prices for parking.  This followed a study published earlier this year that looked at the difficulty of getting hospitals to quote prices for hip replacement.  The Bernsteins were testing the hypothesis that perhaps hip replacements included too many variables, thus making quoting prices difficult, and so chose the more standardized ECGs. 

The results will probably not surprise anyone.  They contacted twenty Philadelphia area hospitals to ask for the two kinds of prices.  Nineteen of the hospitals were easily able to provide the cost for parking, but only three could come up with a price for the ECG (and don’t you want to know what hospital couldn’t even quote its own prices for parking?).  It’s also interesting to note that the three ECG prices they got ranged from $137 to $1200, almost a tenfold difference.

The authors conclude that “hospitals seem able to provide prices when they want to; yet for even basic medical services, prices remain opaque.”

Meanwhile, Ms. Rosenthal of The Times was at it again, this time in “As Hospital Prices Soar, a Stitch Tops $500.  The article points out not only simple stitches that cost $500 in ERs but also IV bags that cost under $1 but for which hospitals charge $137, or $20 neck braces for which that hospitals want $154.  And these are not the most egregious examples cited. 

Few people pay full charges, of course – except for the people without insurance, who are probably least able to pay them – but the hospitals build their charge structures due to what one physician told The Times was the Saudi sheikh problem: “you don’t really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who’s going to pay full charges.”  That’s what passes for pricing strategy in U.S. hospitals?

The Times attributes the seemingly unfettered hospital pricing to increasing market dominance, using Sutter Health in California as a prime example.  Indeed, a recent study in JAMA found that price increases – not increased demand or aging of the population – accounted for 91% of the increases in overall health care costs since 2000, with market consolidation blamed as one of the key drivers of these price increases. 

We’ve been waiting for patients to care about prices for some time, especially with the advent of high deductible plans, and there is some evidence perhaps that is starting.  A survey by TransUnion Healthcare found that 55% of insured consumers have started to pay more attention to their medical bills in the past year, and that 67% claim they want to know not just how much services cost them directly but also how much their insurance is paying on their behalf. 

The TransUnion survey also found that, when it comes to choosing providers, consumers rated “makes it easy to see the cost of services” right below “world class specialists and technology,” and – amazingly -- above high quality scores or proximity to home.  Even more interesting was that the survey found some correlation between consumers’ perception of quality of care with their satisfaction with the billing experience, a fact to which one hopes providers are paying close attention. 

Ironically, health plans now are expressing some concern over exactly what type of transparency they support.  AHIP, their trade association, indicated that calls for an all-payer claims database, which would facilitate comparisons between providers and across payors, could backfire, raising the spectre of lower paid providers demanding higher reimbursements once they started seeing what other providers were being paid.  Having once led transparency efforts for a large health plan, I can affirm that this concern is very much on the minds of provider contracting staff.

At the same time, many physician specialty organizations, including the AMA, continue to balk at many forms of transparency.  Lately they have questioned the wisdom of a proposal to make public the Medicare payments to physicians, something the Wall Street Journal, among other organizations, has long been pushing for.  They worry that the data could be confusing or misleading to consumers, although it’s hard to see what could be more confusing or misleading to what we’re doing now.

Still, not everyone is a fan of transparency, at least not as it has been attempted so far.  The ever-quotable, always insightful Uwe Reinhardt, writing recently in JAMA, throws cold water on many previous efforts.  In his words, “[T]he idea that American patients should 'shop around for cost-effective health care' so far has been about as sensible as blindfolding shoppers entering a department store in the hope that inside they can and will shop smartly for the merchandise they seek,  In practice, this idea has been as silly as it has been cruel." 

Reinhardt does think that health IT can change the game by more easily making pricing available to consumers, citing such innovators as Healthcare Blue Book and Castlight Health.  He likes the reference pricing approach (which I discussed recently), which involves setting a uniform payment limit and making providers compete for anything they want to try to charge above those limits. 

Of course, simply disclosing costs is only a necessary, but not sufficient, change to bring about true competitive pressures for pricing.  We’re moving to ICD-10 codes, and a cottage industry has emerged to find the funniest examples.  For example, there are separate codes for being struck by a turtle, orca, or duck, not to mention for walking into a lamppost.  You know that in back offices of provider organizations and health plans, diligent bean counters are coming up with prices for each of these. 

If we merely made visible the existing pricing structures, which are built for billing and diagnostic accuracy rather than for consumer understanding, it’d be liking going to Dr. Reinhardt’s metaphorical department store and finding that each item showed the cost of every party involved in the manufacture, marketing, and distribution of the item, plus costs for a variety of additional variables based on the consumer’s needs.  No exactly an Amazon one-click kind of experience.

Despite the big challenges ahead for it, I do believe that, whether it is AHIP, AMA, AHA, or any other providers making a living in the current arcane system, there is a danger that if they don’t get on the transparency bus, they may get run over by it.  The Saudi sheikh strategy can’t last.