Category Archives: partnerships

The Disruptors are Coming: The New Health Economy and the Medical-Industrial Complex

A big shout out to Dr. Don MCanne for his Quote of the Day post Friday for today’s topic, and a belated shout out to him for his post last Tuesday about the gains from the ACA being reversed. See my post, ACA Gains Reversing.

This time, Don alerts us to the impact the new health economy disruptors will have and what it might mean for the push towards single payer health care.

Last month, the PwC Health Research Institute (HRI) released a report analyzing the new health economy landscape as more and more companies pursue acquisitions of companies in the insurance, pharmacy benefit management, health care services and retail spaces.
In the last six months, the report states, there has been an explosion of unusual deals between companies such as CVS Health buying Aetna, Cigna buying Express Scripts, UnitedHealth’s Optum buying DaVita Medical Group (Kidney disease and dialysis), Albertsons agreeing to merge with Rite Aid, as well as the much highly publicized partnership between Amazon, JP Morgan, and Berkshire Hathaway.

Naturally, these aren’t the only deals that have occurred. Last year, 67 deals occurred in the US health services market, including payers and providers, the report adds.

The value of these deals increased 146% over those in 2016. The US health care industry, the report states, is undergoing seismic changes generated by a collision of forces: the shift from volume to value, rising consumerism, and the decentralization of care.
The HRI identified four new archetypes of companies engaged in this new health care economy:

• Vertical integrators — CVS & Aetna, Optum & DaVita, Cigna & Express Scripts
• Employer activists — February 2016, 20 US companies form Health Transformation Alliance (HTA) and developed tools to help its members cut employee healthcare costs. In January, Amazon, JP Morgan and Berkshire Hathaway partnered to lower costs and improve employee satisfaction
• Technology invaders — Amazon selling over-the-counter medical products, offering discounted access to Prime service, Apple’s newest operating system allows users to access parts of their EHRs on their phones
• Health retailers — CVS, Walgreens, Walmart, Albertsons and others using their network of store locations, consumer insights, national and global supply chains, and national (and sometimes global) branding to attract consumers looking for affordable, convenient care and goods

The HRI report recommends that all healthcare companies should make the following moves:

• Invest in customer experience
• Plan for a broader workforce
• Focus on price

This is how Don McCanne commented on this report. He wrote that Arnold Relman, like Dwight Eisenhower did about the military-industrial complex, warned us about the medical-industrial complex, but did not realize how intense the disruption would be in health care that the HRI report discusses.

According to Don, we are about to see a takeover by the disruptors who “have a leg up on many established health players in understanding consumers and tailoring experiences for them.”
The disruptors are “positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain.”

If you don’t believe Don, then read what Jamie Dimon, the CEO of JP Morgan said, “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked). This effort is just beginning.”

This is exactly what the Waitzkin et al. book describes when explaining the methods used by the medical-industrial complex to control and direct the American health care system for power and profit of the members of the complex.

Dr. McCanne observes that it is almost as if the physicians, nurses and other health care professionals and the hospitals and clinics in which they provide their services have become a peripheral, albeit necessary, appendage to their wellness-industrial complex that is displacing our traditional health care delivery system and its more recent iteration of the medical-industrial complex.

In other words, the physicians and nurses and other professionals have become proletarianized, and the hospitals and clinics merely the places where the medical-industrial complex derives its power and profit from.

Dr. McCanne posits the following questions as to what the health care system would look like once the transformation is well along:

• Once the silos of the health care system are flattened, how will health care be financed?
• Will there still be networks?
• Cost sharing barriers such as high deductibles?
• Will it be possible to fund this expansive model of the wellness-industrial complex through anything remotely resembling an insurance product, especially when the insurers are being amalgamated into what was formerly the health care delivery system?
• And now that the plutocracy is in control, how could we ever remove the passive investors that extract humongous rents through the wellness-industrial complex?
• And what about the patients? Did we forget about them?

It is obvious from his comments that this new health economy is going to be more problematic for providing universal health care to all Americans and will only make things worse. His Rx is to begin now to move to a single payer, Medicare for All program, and not worry about what has passed.

Smart diagnosis and prescription.

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Illogical!

Picking up where I left off last week with my post, Regulation Strangulation, regarding too much regulation, a series of articles from earlier this week, published in various health care journals and magazines, discussed a new scheme the good folks at CMS have cooked up to make our health care “system” better. (Or worse, depending on whether you have drunk the kool-aid yet)

You may recall my post from late last year, Models, Models, Have We Got Models!, that reported that CMS was launching three new policies to continue the push toward value-based care, rewarding hospitals that work with physicians and other providers to avoid complications, prevent readmissions and speed recovery.

In that article, I mentioned the various models CMS was implementing. My view then, as it remains today, is that these models have not worked, and have only made matters worse, not better.

So when CMS unveiled their latest scheme recently when Administrator Seema Verma spoke at the Health Care Payment Learning and Action Network (LAN) Fall Summit, this is what she said:

The LAN offers a unique and important opportunity for payors, providers, and other stakeholders to work with CMS , in partnership, to develop innovative approaches to improving our health care system. Since 2015, the LAN has focused on working to shift away from a fee-for-service system that rewards volume instead of quality…We all agree that quality measures are a critical component of paying for value. But we also understand that there is a financial cost as well as an opportunity cost to reporting measures…That’s why we’re revising current quality measures across all programs to ensure that measure sets are streamlined, outcomes-based, and meaningful to doctors and patients…And, we’re announcing today our new comprehensive initiative, “Meaningful Measures.”

Let’s dissect her comments so we can understand just how complicated this so-called system has become.

  1. Develop innovative approaches? How’s that working for you?
  2. Improving our health care system? Really? What planet are you living on?
  3. Financial cost? Yeah, for those who can afford it.
  4. Revising current quality measures? Haven’t you done that already after all these years?
  5. “Meaningful Measures”. Now there’s a catchy phrase if I ever heard one. You mean they weren’t meaningful before?

You have to wonder what they are doing in Washington if this is the level of insanity and inanity coming out of the bureaucracy on top of our health care system.

In an article in Health Data Management, Jeff Smith, vice president of public policy for the American Medical Informatics Association stated the following regarding the new CMS initiative.

According to Smith, “the goals are laudable, but the talking points have been with us for several years’ now…measurement depends on agreed-upon definitions of quality, and in an electronic environment, it requires access to and use of computable data. If CMS is going to turn these talking points into reality, it will need to put forth far more resources and commit additional experts to a complete overhaul of electronic quality measures for value-based payments.”

Mr. Smith’s comments are at least an indication that not everyone goes along with CMS every time they unveil some new initiative, model, or program, but again we see the words associated with the consuming of health care being used in discussing the current state of affairs. Terms like “value-based payments”, and “quality measures”, and “financial/opportunity cost”, etc., only obscure the real problem with our health care system. It is a profit-driven system and not a patient-driven system.

Let’s push on.

A report mentioned Monday in Markets Insider showed that 29% of total US health care payments were tied to alternative payment models (APMs) in 2016, compared to 23% in 2015, an increase of six percentage points. These APMs were discussed previously in Models, Models, Have We Got Models!,

The report was issued by the LAN, and is the second year of the LAN APM Measurement Effort (try saying that three times fast). They captured actual health care spending in 2016 from four data sources, the LAN, America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association (BCBSA), and CMS across all segments, and categorized them to four categories of the original LAN APM Framework. (Boy, you must be tired trying to remember all these acronyms and titles!)

Here are their results:

  • 43% of health care dollars in Category 1 (traditional FFS or other legacy payments)
  • 28 % of health care dollars in Category 2 (pay-for-performance or care coordination fees)
  • 29% of health care dollars in a composite of Categories 3 and 4 (shared savings, shared risk, bundled payments, or population-based)

Speaking of shared savings, an article in Modern Healthcare reported that CMS’ Medicare shared savings program paid out more in bonuses to ACO’s than the savings those participants generated.

As per the report, about 56% of the 432 Medicare ACOs generated a total of $652 million in savings in 2016. CMS paid $691 million in bonuses to ACOs, resulting in a loss of $39 million from the program.

Chief Research Officer at Leavitt Partners, David Muhlestein said, “Medicare isn’t saving money.”

This is attributed to the fact that 95% of the Medicare ACOs (410) participated in Track 1 of the Medicare Shared Savings Program. Only 22% participated in tracks 2 and 3.

Two more articles go on to discuss a Medicare bundled-pay initiative and the Medicare Merit-based Payment System (MIPS) .

What does this all mean?

It has been long apparent to this observer that the American health care system is a failure through and through. Sure, there are great strides being made daily in new technology and therapies. A member of my family just benefited from one such innovation in cardiac care. But luckily, they have insurance from Medicare and a secondary payor.

But many do not, and not many can afford the second level of insurance. From my studies and my writing, I have seen a system that is totally out of whack due to the commercialization and commodification of health care services.

And knowing a little of other Western nations’ health care systems, I find it hard to believe that they are like this as well. We must change this and change this now.

If Medicare is losing money now, with the limited pool of beneficiaries, perhaps a larger pool, with little or no over-regulation and so many initiatives, models, and programs, can do a better job. Because what has been tried before isn’t working, and is getting worse.

The logical thing to do is to make a clean break with the past. Medicare for All, or something like it.

 

 

Another Scheme to Delay the Inevitable

After my last post on my personal health issue and the debate over the health care bills that now have been shelved, I thought I’d share with you the following article in its entirety that is just another scheme to delay the inevitable fact that we will need and have a single-payer, Medicare for All health care system.

The article came to me courtesy of Don McCanne, former President of Physicians for a National Health Program (PNHP).

Here is the article:

Healthcare Dive
August 2, 2017
Health reform driving payer-provider partnerships
By Les Masterson
Payers and providers have for decades stayed in their silos, leading to a more fractured and adversarial healthcare system. That relationship, however, is starting to soften for many in the industry. Payer-provider partnerships put the two groups on the same team in hopes of reducing costs and improving care and outcomes through sharing data and better communication.
A major driver of these partnerships is the move away from fee-for-service payments and toward valued-based payments and population health management.
The payer-provider partnerships popping up across healthcare vary in type, size, location and model. There are 50/50 joint ventures with co-branding, and less intensive partnerships like accountable care organizations (ACO), patient-centered medical homes (PCMH), pay for performance and bundled payments.
The first step in these partnerships is building trust between payers and providers.
Another key is communication. (Chuck Lehn, president of Banner Health Network) acknowledged that communicating across systems and platforms between two organizations and healthcare providers requires time, attention and resources.
Caring for the whole patient works best when payers and providers share data, so there is improved care management, better interventions and better analytics around population health.
The two sides can go much deeper into care for patients by going beyond claims. In partnerships, payers shouldn’t have to wait for claims to see how their members are doing and doctors shouldn’t have to hope that their patients tell them when they have received care elsewhere.
In addition to regular back and forth, payers and providers need regular meetings, whether monthly or quarterly, that focus on strategic issues about the partnership, said (James Leatherwood, marketing communications manager at Availity).
One barrier that still needs resolution in partnerships is moving providers away from phone communication.
Leatherwood said a more efficient way is a queue system. In this system, a provider could check the status of all claims and get alerts when they need to provide more information. The system would allow providers to look in one queue, update the claims information and then move on with their day. Payers would have their own queue and would get alerts when providers have questions. This would reduce phone calls and create immediacy.
Leatherwood said the healthcare system is stuck in a “chart chase” between providers and payers, and moving to an automated queue system would be a gamechanger.
“I think in the near-term what we’re going to see is larger healthcare providers are going to be more strategic, working directly with payers. The health plans are going to be more interested not just in working with the staff level, but executive levels,” said Leatherwood.
The third part of a successful partnership is aligning incentives that focus on keeping people healthy and creating a positive healthcare experience, said (Thomas Robinson, partner at Oliver Wyman).
Partnerships must provide patients the right incentives, integration, investment, insight and innovation to work with the plan to deliver improvements across cost, quality, outcomes and experience, said Robinson.
“The point of these partnerships is to create something new, rather than just building the same old offerings with a narrow network. Successful partnerships will take the opportunity to innovate around the product and experience now that the incentives, insight, investment and integration are all for it,” said Robinson.
Aetna and Banner Health agreed on the partnership in October 2016 and have been laying out the groundwork before its launch this month in Maricopa and Pinal counties in Arizona. The two companies hope to expand the program statewide ultimately.
To prepare for the partnership, Tom Grote, who became CEO of Banner/Aetna joint venture in May, told Healthcare Dive that Banner Health and Aetna have developed joint operating committees, including marketing/sales and population health, that include members from both organizations.
The partnership looks to improve consumer experience by fully integrating providers, Aetna and administrative services, while eliminating redundancies in care and administrative problems. Aetna and Banner Health expect streamlining care and services will lead to savings for patients and employers.
(Brigitte Nettesheim, president of transformative markets for Aetna) said the partnerships are about “each side playing to its strengths, aligning incentives and driving scale.”
(Tom Leyden, director II of the Value Partnerships Program at BCBSM) said providers want to be active participants in system transformation.
“This requires ongoing support from the payer and demonstrated evidence of practice transformation and clinic results from the provider community,” said Leyden. “Administration of these programs is an integral aspect of measuring performance.”
Leyden said the payer strives to make the programs as manageable as possible because physicians need to perform many administrative tasks on an ongoing basis. BCBSM regularly solicits feedback from providers during quarterly meetings and phone calls, emails, webinars and in-person meetings on what’s working, what’s not and what needs to be changed.
“If we keep the customer — the end user — in mind and build partnerships with that as our North Star, we believe we will have a more successful, efficient and collaborative health system,” said Grote.
McCanne says they are the ones who control the medical industrial complex, and are part of the problem with our health care system. I agree.
And finally, here is a video from MSNBC with Ali Velshi debating a GOP’er on single-payer and Canada. The GOP’er says Canadians flock to the US for medical care, namely surgery, but Velshi disputes that rather forcefully.
Until we get these defenders of the status quo removed from Congress, we will never have the kind of health care all other developed nations have.
Health care is not a business, health care is a human right.