Friday
May092014

Practice Profitability Index: Physicians Bearish on the Year Ahead

By Clive Riddle, May 9, 2014

CareCloud, in partnership with QuantiaMD, has just released their second annual Practice Profitability Index report. The ten-page 2014 report, “intended to serve as an annual barometer for the operational wellbeing of U.S. medical groups in the year ahead,” finds that “U.S. physicians are now more than twice as likely to foresee eroding, not increasing, profits in 2014,” as they illustrate with survey results in this portion of an infographic provided in conjunction with the report.

Of course, as the healthcare landscape evolves and trends for integration continues to gradually gather steam, those remaining in private practice may view themselves in an increasingly embattled or even endangered species. Albert Santalo, CareCloud Chairman and CEO  tells us, “physicians are experiencing increasing strain on their practice operations as a result of healthcare reform and government mandates. This strain, in turn, affects patients – including the millions of new ones entering the system as a result of the Affordable Care Act.  Nearly half of physicians say they cannot take on these patients, foreshadowing an access to care issue. Meanwhile, despite the hype about emerging reimbursement models, physicians are most likely to seek improvements through programs that help them engage with their sickest and most vulnerable patients.”

The Practice Profitability Index involves gathering insights via an interactive online questionnaire and related discussion groups. This year, 5,064 physicians participated during March, 2014. Here’s highlights of findings presented in the report: 

  • Physicians with a negative outlook increased from 36% to 39% during the past year
  • Physician optimists declined from 22% to 19%.
  • The detailed breakdown of responses for profitability trending was 5% very positive; 14% somewhat positive; 30% about the same; 29% somewhat negative; 10% very negative; and 12% not sure.
  • Their top financial concerns are: declining reimbursements (60%); rising costs (50%); requirements from the Affordable Care Act (49%); and the transition to ICD-10 (43%).
  • The percentage of doctors spending more than one day a week on paperwork rose sharply between 2013 and 2014, from 58% to 70%.
  • 23% spend more than 40% of their time on administration, up from 15% last year.
  • 40% of physicians indicated patient engagement programs hold the greatest promise for improving their practice performance in 2014.
  • Other responses for improving performance including new alliances with other providers (21%), ACO participation (11%) and mobile technologies (11%)
  • The survey was taken before the minimum one-year delay to the ICD-10 code transition, originally scheduled for October 2014, but at that time 44% did not know whether they would be ready. Another 25% were certain they would not be prepared and faced high transition and upgrade costs.
  • Of the 48% of respondents that own their practice, 24% of these physicians are considering selling the practice, up from 21% in 2013. 53% are not looking to sell at all, down from 50% in 20
Thursday
May012014

Humana Study Measures Claims Costs and Absence Rate by level of Wellness Program Engagement

By Clive Riddle, May 2, 2014

Humana has released findings from their HumanaVitality Health Claims and Productivity Impact Study of Humana employees. HumanaVitality is a joint venture between Humana Inc. and Discovery Holdings, Ltd. That serves 3.5+ million members and “is a data-driven wellness and rewards program that motivates members to make healthier life choices.”

Humana touts that “the two-year study found improved health, as shown through lower health care costs and fewer unscheduled absences, among employees who actively participated in the HumanaVitality program.”

Here’s their specific findings:

  • Unengaged members in both years averaged $53 more per month spent on health care claims than members who were engaged in HumanaVitality both years.
  • The largest impact on health care costs was on members with lifestyle-related chronic conditions like high blood pressure or diabetes. Engaged members with these conditions had 60 percent lower health claims costs than unengaged members with these conditions.
  • Another way of stating this: Unengaged members with lifestyle-related chronic conditions had 101% higher claims costs than the total population, while engaged members with these chronic conditions had 41% higher claims costs than the total population
  • Unscheduled absences were 56.3 percent higher among unengaged members in both years than engaged members
  • Members who were unengaged the first year but engaged the second year had 29% higher unscheduled absence and an average of $28 per month in claims costs than members who engaged both years

Humana shared this about the study methodology: “This study was performed on a cohort of Humana associates that were on a Humana employee medical health plan for a full 12 months in at least two consecutive plan years over the study period. The study was conducted by Humana actuaries for the following time period: Baseline Year (July 2010 – June 2011), Year 1 of the HumanaVitality program (July 2011 – June 2012) and Year 2 of the HumanaVitality program (July 2012 – June 2013). Only Humana employees were included in the study; individuals with high cost claims (>= $ 150,000 in the Baseline Year, Year 1 or Year 2) were removed from the sample. The final sample size was 13,046 members in the Year 1 analysis and 16,296 members in the Year 2 analysis.”

Friday
Apr182014

Net Gain of 9.3 Million American Adults with Health Insurance Coverage

By Claire Thayer, April 18, 2014

While the big news this week focused on the success of President Obama and the ACA enrolling 8 million Americans for health insurance through the federal marketplace, a new study from RAND estimates that there was actually a net gain of 9.3 million in the number of American adults with health insurance coverage from September 2013 to mid-March 2014.

The RAND survey, “drawn from a small but nationally representative sample, indicates that this significant uptick in insurance coverage has come not only from enrollment in the new marketplaces established under the Affordable Care Act (ACA), but also from new enrollment in employer coverage and Medicaid.”

A summary of the new RAND report is available for free here, with highlights below:

  • Of the 40.7 million who were uninsured in 2013, 14.5 million gained coverage, but 5.2 million of the insured lost coverage, for a net gain in coverage of approximately 9.3 million. This represents a drop in the share of the population that is uninsured from 20.5 percent to 15.8 percent.
  • The 9.3 million person increase in insurance is driven not only by enrollment in marketplace plans, but also by gains in employer-sponsored insurance (ESI) and Medicaid.
  • Enrollment in ESI increased by 8.2 million.
  • Medicaid enrollment increased by 5.9 million. New enrollees are primarily drawn from those who were uninsured in 2013, or those who had “other” forms of insurance, including Medicare, retiree health insurance, and other government plans.
  • According to our estimates, 3.9 million were covered through the state and federal marketplaces as of mid-March 2014. This figure does not fully capture the enrollment surge that occurred in late March.
  • Among the 7.8 million people who were enrolled in off-marketplace individual market plans in early 2014, 7.3 million were previously insured; 5.4 million were previously insured through an individual market plan.

The complete RAND study is available for download at no charge here.

Looking for an easy way to keep up on what’s happening in the health insurance marketplace? Health Policy Publishing now has several free resources on this topic, including Health Insurance Marketplace News,  a twelve page monthly newsletter; a free bimonthly e-newsletter, Health Insurance Marketplace News Bulletin; a related Linkedin Group; Conferences; HIX Directory; and HIX Learning Kit. Learn more: http://www.healthinsurancemarketplacenews.com/resources.html

Thursday
Apr172014

The Colossal Ship - The SS Rx Costs – makes a Course Correction

by Clive Riddle, April 17, 2014

Course corrections on mammoth shipping lines don’t happen in an instant – you watch them develop over a period of time. The same can be said for pharmaceutical costs as well as the entire healthcare sector, and the IMS Institute for Healthcare Informatics tells us we’re witnessing a slow correction right now.

Costs that have been stabilized this decade are gradually starting to tick upwards. The IMS Institute has just released a study: Medicine Use and Shifting Costs of Healthcare: A Review of the Use of Medicines in the United States in 2013 which found that “total dollars spent on medications in the U.S. reached $329.2 billion last year, up 3.2 percent on a nominal basis and a rebound from the 1.0 percent decline in 2012…  Total spending on U.S. medicines increased 1.0 percent on a real per capita basis in 2013, while the use of healthcare services overall rose for the first time in three years.”

This doesn’t mean that costs are about to go crazy in an upward spiral just yet – remember that this is a big ship. Instead, Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, tell us  “following several years of decline, 2013 was striking for the increased use by patients of all parts of the U.S. healthcare system – even in advance of full implementation of the Affordable Care Act.  Growth in medicine spending remains at historically low levels despite a significant uptick last year, and continues to contribute to the bending of the healthcare cost curve.”

So what is driving this gradual correction? The IMS Institute identifies these factors:

  1. The reduced impact of patent expiries (“Patent expiries in 2013 contributed $19 billion to lower medicine spending, compared with $29 billion the previous year.”)
  2. Price increases for branded products added $4 billion more in spending growth last year compared to 2012
  3. Higher spending on innovative new medicines (“while 36 New Molecular Entities launched in 2013, the largest number in a decade”)
  4. Greater use by patients of the healthcare system  (“Overall utilization of healthcare services grew slightly as consumers returned to the healthcare system – primarily through more office visits to specialist physicians as well as outpatient treatments – following several years of self-rationing. “)

The IMS Institute shared these other key findings from their report:

  • The number of patient office visits to primary care physicians fell by 0.7 percent in 2013.
  • Visits to specialists increased by 4.9 percent overall and by 9.5 percent for seniors.
  • Patients filled an average of more than 12 retail prescriptions last year, up nearly 2 percent year over year.
  • Those aged 65 and over filled an average of 28 prescriptions annually, down slightly from 2012.
  • Overall spending on medicines remained concentrated in traditional small-molecule pills dispensed through retail pharmacies.
  • But higher spending growth was seen in biologics and specialty drugs – particularly in retail and mail-order settings.
  • A total of 27 new oncology drugs have launched in the past three years.
  •  Additionally, clusters of innovation are transforming patient care in hepatitis C, multiple sclerosis and diabetes, as well as stroke and acute coronary syndrome.
  • Seventeen orphan drugs – developed for patient populations of fewer than 200,000 individuals – launched in 2013, the most in any year since the passage of the Orphan Drug Act in 1983.
  • Patients with insurance are incurring higher out-of-pocket costs for healthcare services despite lower co-pays for many prescriptions and additional discounts for preventive medicines.
  • Prescription drug costs paid by most patients are declining, with average out-of-pocket costs falling below $5 for 57 percent of all retail prescriptions filled.
  • At the same time, 30 percent of total patient out-of-pocket costs relate to just 2.3 percent of prescriptions, often high-cost specialty medicines.
  • Twenty-three percent of prescriptions now carry no out-of-pocket costs, a dramatic rise in 2013 driven by common preventive medicines that include oral contraceptives.

Want to get more detail? The report can be downloaded as an app via iTunes.

Wednesday
Apr092014

Hacking a Better Health System

By Kim Bellard, April 9, 2014

Who knew hacking might help us reinvent our health care system?

I must be old-fashioned, or at least not a true techie, because I still thought of hacking as a bad thing.I was thus surprised to read in The Wall Street Journal that “hackathons” are a trend for the good in health care. 

For others who are also behind this particular curve, hackathons are intense, all-night (or more) sessions when a small groups of programmers band together to attack tough specific problems with concentrated coding efforts.

The Journal article highlighted MIT’s Hacking Medicine’s Grand Hackfest, which is part of MIT’s Hacking Medicine initiative.  MIT has been at this since 2011, seeking synergies between MIT’s technical expertise and the vaunted Boston-area medical community.  They believe hackers can help health care with: Scaling Medicine, Accelerating Data, Identifying and Tackling Big Opportunities, Hacking Ethos for Lean Medical Innovation, and Infecting Non-Life-Scientists with the Mission. 

Pretty lofty list of goals.

Health 2.0 has their own version, which they call Code-a-thons.  They offer some $6.5m in prizes in their developer challenge, and have several events and challenges scheduled in the next few months.

Goodness knows that health IT has never been known for being either nimble or on the cutting edge, so some fresh blood with new perspectives certainly seems like a good idea, right?  As one clinician whose mobile app benefited from solutions suggested at the MIT hackathon said, "Sometimes when you are too close to something, you stop seeing solutions, you only see problems.  I needed to step outside my own silo.''

Not to be outdone by Boston, New York-Presbyterian Hospital recently held what they claim was the first Hackathon for New York Hospitals, which the specific aim of helping them improve myNYP, their patient portal. Out on the other coast, UCLA-Berkeley has had three iterations of their own version, Hacking Health

Just to rub us oldsters’ noses in it, there’s an organization called YTH (youth + tech + health) that believes the “#selfie generation” can do better. They just hosted their own Health Hackathon in conjunction with their YTH Live 2014 conference.     

The trend is not limited to the United States.  The British National Health Service has NHS Hack Days, in Canada there is Hacking Health, and in Europe there’s CPH Health Connect HackDay in Copenhagen and Hacking Health Stockholm.

Looking back at last fall’s healthcare.gov debacle, or more recent reports of similar issues with various state exchanges, one has to wonder if they just should have held a hackathon.

PwC’s 6th Annual Digital IQ Survey found that healthcare CEOs were far ahead of other industries in championing information technology as an integral part of their strategy.  I rather doubt that many health systems or payors are using hackathons for their big mainframe-based systems – like eligibility, billing, claims payment, or (most) EHRs – but mobile efforts are natural targets for this kind of approach. 

There’s no shortage of targets.  Payors are finding ways to use mobile technology to cut administrative costs, engage members, and manage patients’ care. Still, in a recent Robert Half Technology survey of CIOs, health care led the pack in lacking a mobile strategy.

No wonder they might be looking for hackers.  

It’s great to bring in new ways of attacking the many problems of health care, but I do worry what happens when they hit the may brick walls health care has.  I’ve been seen several instances where non-health care companies – especially financial services firms -- dipped in to health care, thinking they could bring their expertise to bear, only to be shocked at how messy much of the data is. 

What I like best about the hacking in health movement is twofold – bringing in new kinds of expertise and an attitude that problems can be solved.  Those have been sorely missing in health care.  Or, as Mark Twain once put it, “all you need in this life is ignorance and confidence, then success is sure.” 

Hack away!

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

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