How much of a game-changer is MACRA and the MIPS and APM paths?

By Clive Riddle, July 8, 2016

That is the question asked of panelists in the current edition of MCOL’s ThoughtLeaders. Here, in its entirety, is a response from one of the panel: Mark E. Lutes, Chair, Board of Directors / Member of the Firm, at Epstein Becker Green.  Actually, here’s the question posed in its entirety: “How much of a game-changer is MACRA and the MIPS and APM paths going to be for Medicare, and will Medicaid or Commercial programs adopt similar approaches for applicable segments?”

So here’s what Mark had to say in response:

MACRA represents a laudable attempt to replace the truly failed SGR with an approach that seeks to do the right thing, which is to reward quality and efficiency at the individual practice level. Though it has some challenges and, like most major policy changes, will require plenty of tweaking once implemented in real world situations. MACRA is likely to be a game changer but, as per usual, not in the direct ways that Congress/CMS may have anticipated or hoped.  Thus, MACRA, like HiTech and dozens of other pieces of legislation before it, is most likely to illustrate that the "law of unintended consequences" is the most predictable result of Washington DC legislative and regulatory action.

A few illustrations-the availability of the APM v the MIPS pathway was hoped to induce more rapid adoption of risk assuming payments.  If CMS had seen fit to provide more of a glide path toward APM qualification, the "brass ring" of Medicare payment increases via APM qualification might well have "lit a fire" under segments of the provider community seeking to avoid the uncertainties of MIPS based fee schedule increases.  However, the draft rule puts that brass ring out of reach for most medical groups, ACOs, IPAs, and PHOs.  Thus, one of the key "game changing" opportunities of MACRA is likely to be missed.  As it did with ACOs, where it demanded provider investment to produce savings that benefited the Medicare program and then put limits on the providers' opportunity to garner the reward for their efforts, CMS is in danger of missing the golden opportunity to incent a stampede toward APMs by making the "perfection" in risk assumption the enemy of the "good" in the way of progress towards that end.

In fact, in the proposed rule, CMS averts its eyes from the efforts of many physicians to achieve value through managed care programs. The rule only gives credit for activities physicians are conducting in the fee-for-service realm. One thing to watch is a report CMS is due to issue by July 1 as required by Section 101(e)(6) of MACRA on the feasibility of integrating the APM concept in the Medicare Advantage payment system. And, unfortunately, there's no credit given for non-Medicare APM activity until 2021.   

Likewise, because MIPS allows providers a great deal of choice in metrics upon which to be measured, it will not drive change across other payor streams.  There are too many choices for other payors to expect that their provider networks will be geared up to report any particular subset around which financial incentives might be built.  It may be more realistic to hope that consensus, adoptable in a range of payment programs will come instead out of the joint payor/CMS work in the Health Care Payment Learning & Action Network (LAN).

In several years, looking back on the run-up to the payment impacts, MACRA is likely to be seen to have been a game changer-in two ways that are not within the story line.  First, MACRA is likely to be regarded as an instigating event in physician practice consolidation, through the expansion of hospital employment, insurer physician practice transactions, specialty group growth and physician practice Management Company ventures 2.0.  Even if the individual MIPS measures are viewed by individual and small groups of physicians as doable in the near term, there will be mental energy burned to comprehend them, software upgrades to support their reporting, and there will be a growing fear of the unknown as the resource use measures evolve.  Therefore, probably the most predictable and predominate result of MACRA will not be the instigation of quality improvement and enhanced attention to resource use which the federal government intends, but another "nail in the coffin" of small scale medical practice.

Second, MACRA is likely to be regarded as a watershed moment wherein the fee-for-service Medicare program took on (or even exceeded in granularity) the incentives present in managed care.  Previously, a physician practice opted in to payment for performance.  PQRS and meaningful use had been, to date, largely reporting incentives and ACO downside risk was both voluntary and relatively rarely attempted.  The dawn of MACRA might be seen as CMS crossing the line from being a passive payor to being a demanding customer that changes the specifications of its order and settles it bill according to data it controls well after the date of service.

Note: Mark will be participating in the faculty in a webinar on this topic, along with EBG's Lesley Yeung and EBG Advisors' Bob Atlas in the HealthcareWebSummit event on Thursday August 4th, 2016 at 1 PM Eastern : Preparing for MACRA - The Next Steps: Composite Scoring, Performance Considerations, Implications and More.


When the Disruptor is the Disruptee

By Dennis Bolin, Health Plan Alliance, June 28, 2016

I don’t know about you but I am becoming tired of hearing about “disruption” in the health insurance industry. I hear and read the term everywhere and I wonder if it is overused. I just returned from this year’s AHIP Institute and I heard the term repeatedly in presentations and discussions. Whether the word used is “revolution,” “transformation,” “innovation,” or “reimagining,” the pressure to integrate to “make it happen” is mounting. Clayton Christensen defines “it” as “combining, through a coordinated effort, the business models that must comprise the disruptive value network.”

The concept of disruption as a business strategy has been popularized by Christensen’s work. We had a member of his firm present at an Alliance meeting years ago – when the concept was still new – and we have been following the evolution ever since. In his book on the health care industry The Innovator’s Prescription Christensen says health care disruption is likely to come from 3 sources: 

  • Employers 
  • Corporate orchestrators
  • Integrated fixed-fee providers


At the Alliance’s recent Health System/Health Plan Value Visit we discussed with a Boeing executive that company’s initiatives to wrestle with health care costs, standardize quality and improve the customer experience. While we have heard about the strategy from Alliance member Providence Health Plan, I gained insights hearing it from the employer’s perspective. They have rolled out their strategy to a second market and anticipate a third market in 2017. In each case they identified a delivery system and provider network as their partner, driving costs, innovation and market share. More of our system owners are hearing directly from employers.

Corporate orchestrators

New entrepreneurial, venture capital-backed companies – corporate orchestrators – are also reshaping markets. Four are receiving a lot of attention:

  • Oscar. Now in 4 states (New York, New Jersey, Texas and California) and 140,000 members Oscar is changing the market by introducing a technology-driven consumer-friendly product. I met with the CEO of Oscar 4 years ago when all they had was a group of programmers in a nearly empty loft in SOHO. Only 2 of the senior team came from the health insurance industry and they were sure they could do it better. An example:  a PCP receives a real-time text message of a member in an emergency room with a pin number used to call the member. The physician is paid $24 to call the patient within hours.
  • Clover. A Medicare Advantage plan, they anticipate targeting only a small number of states. They are differentiating themselves through the use and availability of data. Using a cloud structure they do not have to worry about systems talking to each other. Instead data is deposited and accessed according to agreements on guidelines of usage.
  • Harken Health. Their model is focused on primary care centers and offer insurance to small groups and individuals on and off the exchange. They currently are in Chicago and Atlanta. United is an investor.
  • Bright Health Inc. They are unique in that as an insurance company they partner with a single provider system in the market to drive market share and partner to offer affordability and a differentiated customer experience. They anticipate entering the Colorado market in 2017.

Integrated Fixed-fee Providers

Christensen says that the challenge for integrated fixed-fee providers, such as Alliance members is that we are both the disruptee and the disruptor. In other words we are turning our own business and care models on their heads. In a truly integrated system the incentives are to keep people well. But flipping the switch on our business is not easy in ways the start-up disruptors can build from scratch. But we have one advantage:  we have all the components while none of the start ups do.

And integrated systems have the components necessary to create an enhanced enterprise-wide customer experience. Chris Fanning with Geisinger Health Plan shared their enterprise approach to customer experience at our Health System/Health Plan Value Visit. He will be going in-depth on their enterprise-wide Member Journey Roadmap at our Customer and Employer Market Strategies Value Visit July 19 – 21, click here for event information.  Geisinger has identified guiding principles around which they are organizing their customer-centered initiatives:

  • Navigate – helping members make their way through the health system and make decisions right for them.
  • Anticipate – help members know what to expect and help them with their needs in advance.
  • Simplify – make the health system, health plan, and physician groups easier to do business with.
  • Earn Trust – help members select the right plan based on their needs and work closely to resolve issues and assist beyond the traditional payer role.
  • Individualize – Customize and personalize information and communication to meet specific interests and needs

As Christensen counsels, being the disruptee as well as the disruptor is a demanding but not an impossible expectation. He points out that integrated fixed-fee providers are uniquely positioned to shift care to the most cost effective site possible, to coordinate care, to manage a population’s health, to give tools to consumers to make decisions and manage their health and to provide a distinctive customer experience. And every time Alliance members gather to discuss our initiatives we get more disruptive.

This post originally apperared on the Health Plan Alliance Blog on June 28th, 2016. You can see the original at and see all the Health Plan Alliance Blog posts at


Millennials Are (Not) So Different

By Kim Bellard, June 24, 2016

If we believe conventional wisdom about them, they like to live with their parents, at least until they can move into their urban-center condo.  They hate to drive.  They're maddening in the workplace, demanding lots of frills and constant praise yet returning little loyalty.  They're hyperconnected through their various digital devices.  And, when they deign to think about health care, which isn't often, they want all digital, all the time. 

There's some truth to the conventional wisdom, but not as much as you'd think.  A new study from Credit Karma flatly asserts that "everything you thought you knew about Millennials may be wrong," finding that they still have aspirations to much of the same "American Dream" as previous generations.   

The hyperconnected part is certainly true.  Millennials are much more likely to have a smartphone,  and -- jawdroppingly -- on an average day they interact with it much more than with anyone else, even their parents or significant other.  

Things get really interesting when it comes to health.  Millennials are often viewed as not very interested in health care, but it is the second most important social issue for them, right after education and ahead of the economy. 

deep dive on millennials and health care by the Transamerica Center for Health Studies had some results that also don't necessarily fit the stereotypes. Taking care of their health was tied with getting/keeping a job as their top priority. 70% have been to a doctor's office within the last year, although for minor issues they're more likely to head to urgent care/a retail clinic. When it comes to getting health information, this supremely digital generation still relies most heavily on health care professionals and friends/family (especially their mothers!).

There has been a dramatic drop in being uninsured -- 11% versus 23% as recently as 2013 -- but millennials don't like much about health insurance.  They feel much more informed about their health and how to improve it than they do about how to find health care services or their health insurance options.  

Perhaps that is why two-thirds have never comparison shopped for health insurance.

Lastly, TCHS found that millennials rate affordability as the most important aspect of the health care system, but many don't find it affordable.  About 20% can't afford routine health expenses, even though millennials' median health expenses are under $100 per month.  Nearly half have skipped care to reduce their expenses. Similarly, most millennials view monthly premiums over $200 as unaffordable.

If there is a key difference with millennials' health care, it may be in their emphasis on technology.  A report from found that 76% of millennials valued online reviews in choosing a doctor, and 73% want doctors to use mobile devices during appointments to share information. 60% are interested in telehealth options in lieu of office visits.

It is perhaps no wonder millennials are turning to technology when it comes to their health.  They highly value face time with their doctor, but they may not be getting it.  According to the Salesforce report, 40% of millennials don't think their primary care doctor would recognize them on the street. 

Many of us might suspect the same thing, and that should trouble us all.

When it comes to health care, as with many other aspects of life, it may be less that millennials are different in what they want as it is that they're quicker to adopt newer options for getting it.  The rest of us should learn from that, not shake our heads at it.

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


Two Thirds of Healthcare Stakeholders Have Faith in Consumers Using Online Tools to Engage With Their Doctor

By Clive Riddle, June 16, 2016

MCOL has conducted an e-poll, co-sponsored by Keenan, of healthcare business stakeholders regarding their opinion on consumer tools involved with healthcare costs or quality. Key questions were asked regarding consumer healthcare cost and quality tools; and ranking of applicable items with respect to overall effectiveness.

68.5% of stakeholders believe it is likely or very likely that a typical consumer will use online data/comparisons to discuss options and costs with a provider. Stakeholders not involved with online tools have a greater belief that consumers are very likely to do so (34.8% compared to 18.6% of stakeholders that are involved with online tools). However, stakeholders involved with tools have an overall greater belief that consumers are likely to do so – combining likely plus very likely responses (72.1% for involved stakeholders compared to 65.2% for stakeholder not involved with tools.)

44.4% of stakeholders feel a smartphone is the optimal vehicle to deliver such tools, while 34.7% feel a computer desktop is the optimal vehicle, and 13.9% listed a tablet such as an iPad as the optimal vehicle. Stakeholders not involved with online tools were less likely to list a computer desktop (21.7% compared to 38.1% for stakeholders involved with tools and 57.1% for stakeholders not sure if they are involved). However smartphones were the top choice for both stakeholders involved with online tools, or not involved with online tools.

Given five types of tools to rank for effectiveness, stakeholders preferred health insurance out-of-pocket costs calculators and healthcare service price estimator/comparisons. Given seven issues to rank by level of concern, relating to consumer tools, stakeholders were most concerned by accuracy/credibility of data sources, and consumer ability to understand/use tool correctly.

58.9% of stakeholders indicated they are involved with consumer tools, while 31.5% responded they are not involved, and 9.5% were not sure. The online survey of healthcare business stakeholders was conducted during May 2016 by MCOL.  Survey participants received a detailed report on the survey results.

As Tim Crawford, a Vice President from Keenan puts it, “if we want to bend the healthcare cost trend downward by making patients and their families more effective consumers, we will need to equip them with the information they need to make informed decisions. Consumers of medical services will need to know about the quality of their providers and understand the total costs involved. More than two-thirds of those responding to the survey believe that consumers will use tools that give them this information and will use the knowledge to discuss options and costs with their providers. Ideally, such tools can provide the common ground needed for patients and physicians to have a transparent dialog about medical decisions.”


Insurance spending on behavioral health: Up for Mental Health / Down for Substance Use

By Claire Thayer, June 7, 2016

The June 2016 issue of Health Affairs takes a deep dive into behavioral health from several different vantage points, including public and private health spending, veteran’s mental health service use, quality measurement, mental illness and gun violence, drug monitoring, suicide prevention, along with trends in media coverage.

Here are a few highlights of several of the articles in the June 2016 issue:

On the health spending spectrum, a long-term longitudinal Health Affairs study finds a increase in the total mental health treatment expenditures financed by private insurance, Medicare, and Medicaid increased from 44 percent in 1986 to 68 percent in 2014. While the share of spending for substance use disorder treatment financed by private insurance, Medicare, and Medicaid showed almost no increase, was 45 percent in 1986 and 46 percent in 2014.

Another article in the June 2016 issue examines gun violence, gun-related suicide and violent crime in people with serious mental illnesses, and whether legal restrictions on firearm sales to people with a history of mental health adjudication are effective in preventing gun violence.

State prescription drug monitoring programs were reviewed based on findings from a national survey to assess the effects of these programs on the prescribing of opioid analgesics and other pain medications in ambulatory care settings. In this study overview, researchers found that the implementation of a prescription drug monitoring program was associated with more than a 30 percent reduction in the rate of prescribing of Schedule II opioids.