Category Archives: Patient Outcomes

Cayman Islands Hospital Delivers Lower Cost Care

This morning’s post by fellow blogger, Joe Paduda, contained a small paragraph that linked to an article in the Harvard Business Review (HBR) about a hospital in the Cayman Islands that is delivering excellent care at a fraction of the cost.

Joe’s blog generally focuses on health care and workers’ comp issues, and has never crossed over into my territory. Not that I mind that.

In fact, this post is a shoutout to Joe for understanding what many in health care and workers’ comp have failed to realize — the US health care system, which includes workers’ comp medical care, has failed and failed miserably to keep costs down and to provide excellent care at lower cost.

That the medical-industrial complex and their political lackeys refuse to see this is a crime against the rights of Americans to get the best care possible at the lowest cost.

As I have pointed out in previous posts, the average medical cost for lost-time claims in workers’ comp has been rising for more than twenty years, even if from year to year there has been a modest decrease, the trend line has always been on the upward slope, as seen in this chart from this year’s NCCI State of the Line Report.

The authors of the HBR article asked this question: What if you could provide excellent care at ultra-low prices at a location close to the US?

Narayana Health (NH) did exactly that in 2014 when they opened a hospital in the Cayman Islands — Health City Cayman Islands (HCCI). It was close to the US, but outside its regulatory ambit.

The founder of Narayana Health, Dr. Devi Shetty, wanted to disrupt the US health care system with this venture, and established a partnership with the largest American not-for-profit hospital network, Ascension.

According to Dr. Shetty, “For the world to change, American has to change…So it is important that American policy makers and American think-tanks can look at a model that costs a fraction of what they pay and see that it has similarly good outcomes.”

Narayana Health imported innovative practices they honed in India to offer first-rate care for 25-40% of US prices. Prices in India, the authors state, were 2-5% of US prices, but are still 60-75% cheaper than US prices, and at those prices can be extremely profitable as patient volume picked up.

In 2017, HCCI had seen about 30,000 outpatients and over 3,500 inpatients. They performed almost 2,000 procedures, including 759 cath-lab procedures.

HCCI’s outcomes were excellent with a mortality rate of zero — true value-based care. [Emphasis mine]

HCCI is accredited by the JCI, Joint Commission International.

Patient testimonials were glowing, especially from a vascular surgeon from Massachusetts vacationing in the Caymans who underwent open-heart surgery at HCCI following a heart attack. “I see plenty of patients post cardiac surgery. My care and recovery (at HCCI) is as good or better than what I have seen. The model here is what the US health-care system is striving to get to.

A ringing endorsement from a practicing US physician about a medical travel facility and the level of care they provide.

HCCI achieved these ultra-low prices by adopting many of the frugal practices from India:

  • Hospital was built at a cost of $700,00 per bed, versus $2 million per bed in the US. Building has large windows to take advantage of natural light, cutting down on air-conditioning costs. Has open-bay intensive care unit to optimize physical space and required fewer nurses on duty.
  • NH leverage relations with its suppliers in India to get similar discounts at HCCI. All FDA approved medicines were purchased at one-tenth the cost for the same medicines in the US. They bought equipment for one-third or half as much it would cost in the US.
  • They outsourced back-office operations to low-cost but high skilled employees in India.
  • High-performing physicians were transferred from India to HCCI. They were full-time employees on fixed salary with no perverse incentives to perform unnecessary tests or procedures. Physicians at HCCI received about 70% of US salary levels.
  • HCCI saved on costs through intelligent make-versus-buy decisions. Ex., making their own medical oxygen rather than importing it from the US. HCCI saved 40% on energy by building its own 1.2 megawatt solar farm.

And here is the key takeaway:

The HCCI model is potentially very disruptive to US health care. Even with zero copays and deductibles and free travel for the patient and a chaperone for 1-2 weeks, insurers would save a lot of money. [Emphasis mine]

US insurers have watched HCCI with interest, but so far has not offered it as an option to their patients. A team of US doctors came away with this warning: “The Cayman Health City might be one of the disruptors that finally pushes the overly expensive US system to innovate.”

The authors conclude by stating that US health care providers can afford to ignore experiments like HCCI at their own peril.

The attitude towards medical travel among Americans can be summed up by the following from Robert Pearl, CEO of Permanante Medical Group and a clinical professor of surgery at Stanford: “Ask most Americans about obtaining their health care outside the United States, and they respond with disdain and negativity. In their mind, the quality and medical expertise available elsewhere is second-rate, Of course, that’s exactly what Yellow Cab thought about Uber. Kodak thought about digital photography, General Motors thought about Toyota, and Borders thought about Amazon.”

Until this attitude changes, and Americans drop their jingoistic American Exceptionalism, they will continue to pay higher costs for less excellent care in US hospitals. More facilities like HCCI in places like Mexico, Costa Rica, the Caymans, and elsewhere in the region need to step up like HCCI and Narayana Health have. Then the medical-industrial complex will have to change.

Advertisements

ACO’s Across the Pond: What Some Believe the US and England Can Learn From Each Other

It is amazing how experts in the field of health care are so wedded to ideas that are, with greater scrutiny, the real cause of the dysfunction and failures of providing health care to the citizens of a nation.

Such is the case with an article I found from the Commonwealth Fund, a well-respected organization in health care research, yet doubles down on the root causes of the crisis faced by the health care system in the US.

Late last month, Briggs, Alderwick, Shortell, and Fisher published the article entitled, “What Can the U.S. and England Learn from Each Other’s Health Care Reforms?

The focus of the article was on the idea of Affordable Care Organizations (ACO’s), which in the US were established in 2010 under the ACA. According to the authors, both countries are currently working toward better integrating health services, improving population health, and managing health care costs. They also said that both countries are developing their own versions of ACO’s to achieve these aims.

However, the authors point out, by way of listing previous links to articles they wrote, that results so far have been mixed, patient experience (you mean like having a great time at Disney World, that sort of experience?) and some quality measures have improved.

Yet, financial savings, they report, have been modest and data on outcomes is limited.

On the other hand, across the pond, the English NHS recently created 44 Sustainability and Transformation Partnerships (STPs) [Isn’t that what one puts in a motor car to make it run better?]

These STPs cover the entire country and are “place-based” partnerships of all NHS organizations and local government departments that purchase and provide health and long-term care services for a geographically defined population. They believe that organizations in STPs will work together to improve care and manage local budgets. Some payers are even considering American-style ACO contracting models.

Wait, if we are not having success with ACOs, what makes the Brits think they will do better? Interestingly enough, Himmelstein and Woolhandler, in “Health Care Under the Knife”, chapter 4, page 61, said the following when they were involved with drafting an new proposal for the Physicians for a National Health Program (PNHP):

“Recently, the emergence of huge integrated health systems incorporating multiple hospitals and thousands of physicians (so-called Accountable Care Organizations or ACOs), which dominate the care of entire regions, is causing us to again to talk about NHS models.”

So let me get this straight. We are not having much success with ACOs, yet, the Brits are moving in that direction. And the physician-led advocacy group in this country, the PNHP, that is pushing for single-payer, has been forced to consider models employed by the British NHS.

If that isn’t the definition of insanity, I don’t know what is.

Of course, the move towards ACOs in this country is due to the ACA and to the resurgence of 19th century economic liberalism, also known as neoliberalism, and its impact over the past thirty years on the American health care system. But in the UK, the move away from Labour Party socialism to the Conservative Party’s neoliberalism, is the reason why Britain is exploring the ACO model.

Maybe one day, both Anglo-oriented nations will wake up and stop believing in the fairy tale that the free market works for health care. It does for cars and other consumer goods, but health care is not a consumer good. It is a necessity of life.

“Extreme Makeover” Surgery Leads to Death

A story from the Australian network, ABC, tells of an Australian man who went to Malaysia for cosmetic surgery, and came back with holes in his body and died.

I am posting the link here:

http://www.abc.net.au/news/2017-12-18/medical-tourism-mother-warns-of-risk-coroner-delivers-findings/9260626

We all know there are risks to any surgery, but in the case of medical travel, one or two bad outcomes can be serious to not only the brand of the facilitator, but to the entire industry,.

Rather than conducting conferences around the world where you pat each other on the back, why don’t you call one big meeting to set out some global standards of treatment and declare that you will drive those causing harm, both facilitators and providers, out of the industry.

Stand up and make this industry safe. And stop patting each other on the back with useless certificates and awards that have no meaning to real people.

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.

 

 

Regulation Strangulation

The American Hospital Association (AHA) released a report that stated that there is too much regulation that is impacting patient care.

The report, Regulatory Overload Assessing the Regulatory Burden on Health Systems, Hospitals, and Post-acute Care Providers, concludes with the following assessment:

Health systems, hospitals and PAC providers are besieged by federal regulatory requirements promulgated by CMS, OIG, OCR and ONC, many of which are duplicative and cumbersome and do not improve patient care. In addition to the regulatory burden put forth by those agencies, health systems, hospitals and PAC providers are subject to regulation by additional federal agencies, such as the Department of Labor, the Drug Enforcement Administration, the Food and Drug Administration and by state licensing and regulatory agencies. They also operate under stringent contract requirements imposed by payers, such as Medicare Advantage, Medicaid Managed Care plans and commercial payers, which also require reporting data in different ways through different systems. States and payers contribute to burden through, for example, documentation, quality reporting and billing procedures layered on top of the federal requirements.
Regulatory reform aimed at reducing administrative burden must not approach the regulatory environment in a vacuum — evaluating the impact of a single regulation or requirements of a single program — but instead must look at the larger picture of the regulatory framework and identify where requirements can be streamlined or eliminated to release resources to be allocated to patient care.
In a previous post, Models, Models, Have We Got Models!, I said that from the beginning of my foray into the health administration world, I noticed that there were too many models, programs, and schemes dedicated to lowering costs and improving quality of care, that only raised the cost of health care and did not improve quality of care.
This is what I said then about all the models, programs, and rules promulgated by CMS over decades that have not made things better:
The answer was simple. Too many models, programs, rules, and so on that only gum up the works and make real reform not only impossible, but even more remote a possibility as more of these inane models are added to what is already a broken system.
So it seems that I was right even then, and now the AHA has proved it so. Why not scrap these models, programs, and rules and institute real reform…Medicare for All and be done with it?

Tug-of-War Over Ailing American Knees: What the Medical Tourism Industry Should Know

Total knee replacements in the US is growing, according to an article today in Kaiser Health News.

660,000 are performed each year, and will likely grow to two million annually by 2030, as reported by Christina Jewett. Knee surgeries are one of surgery’s biggest potential growth markets, and one that the medical tourism industry needs to be aware of.

Ms. Jewett described how an orthopedic surgeon from the Bronx, underwent his own knee surgery in a Seattle-area surgery center performed by a friend of his. The surgery began at 8 am, and by lunch, the doctor was resting in his friend’s home with no pain and a new knee.

Medicare is contemplating whether it will help pay for knee surgeries outside of hospitals, either in free-standing centers or outpatient facilities. Several billions of dollars are spent every year by Medicare for knee replacements, so what may be a bold experiment, may soon be more standard.

However, this issue is dividing the medical world, and the issue of money is just as important as the issue of medicine, according to Ms. Jewett.

Some physicians are concerned that moving surgeries out of hospitals will land vulnerable patients in the emergency room, but proponents say it will give patients more choice and better care. In addition, they contend that it will save Medicare hundreds of millions of dollars.

An “overwhelming majority” of commenters, Ms. Jewett states, said they want to allow the surgeries out of hospitals, as specified in recent rule-making documents.

Even if a policy change is made, according to the article, Medicare would still pay for patients to get traditional inpatient surgery. There would be a huge shift in money, the article reports, out of hospitals and into surgery centers.

Medicare could save hundreds of millions of dollars if it no longer paid for multiple-day stays in a hospital, and investors at outpatient centers could profit greatly, as well as some surgeons, especially those who have an ownership stake in the facility.

An open question remains as to whether this shift is beneficial for patients. Patients on Medicare tend to spend nearly three days in a hospital, and forty percent also spend time in a rehabilitation facility for further recovery.

Data from 2014 suggests that Medicare patients are taking advantage of the post-operation support at hospitals and aftercare centers. However, it is unclear what the percentage of eligible patients would choose outpatient care.

Of equal concern to patients are the financial consequences, and here is where the medical tourism needs to pay attention, because even though less care is given, outpatient procedures require higher out-of-pocket costs.

Medicare covers inpatient procedures 100%, with no co-payment, but outpatient procedures require a 20% co-payment, which could easily add up to thousands of dollars for knee surgeries.

One surgery center in California advertises a knee replacement surgery for $17,0300, and those who support the change in policy believe that a strict criteria should be used by doctors to choose which patients are good candidates for outpatient surgery.

All this began in 2012, Ms. Jewett states, when Medicare first considered removing the surgeries from its “inpatient only: list. At that time, many doctors and hospitals protested, calling the proposal “ludicrous” and “dangerous”, and Medicare abandoned the idea.

Another objection cited research that showed that patients who received such surgeries as outpatients were twice as likely to die, and that even one-day stays were twice as likely to need follow-up surgery.

A panel recommended that Medicare remove the procedure from the “inpatient only” list in August, but if they make a change, it will not go into effect for a year or so later.

It is quite obvious to this writer what you in the medical travel industry need to do, but then again, when did you ever listen to what I say?

Self-Insured Employers Fail To Adopt Medical Travel

When I began my writing, one of the ways I saw medical travel could be implemented into workers’ comp was through employers who self-insure.

There are not that many companies who do self-insure for several reasons, one of which is the administrative costs and extra hoops they would have to go through just to get approval from state regulators to be self-insured. This is something most small employers will not do. More on what I think about this later.

Today, Irving Stackpole, President of Stackpole & Associates (a LinkedIn connection of mine), wrote an article in the International Medical Tourism Journal (IMTJ) about why US employers have failed to adopt medical travel benefits.

For the sake of transparency and honesty, I have never met Irving, but have had discussions with him a few times on LinkedIn in some of the groups we have in common. I have met his co-host of his radio show, Elizabeth Ziemba, when we both attended the 5th Medical Tourism and Wellness Business Summit in Reynosa, Mexico in November 2014.

In his article, Irving mentions that while some small employers such as HSM (who I have written about in earlier posts), Hannaford Supermarkets, the Casino and Hotel of the Blue Lake Rancheria Tribe in Northern California, and IDMI Systems have added medical travel to their health plans, he does not know of any large employers who have.

When I attended the 5th World Medical Tourism & Global Healthcare Congress in 2012, large employers such as Disney Institute, American Express, and Google sent representatives to speak at the Congress. If they attended, then surely their companies must be involved in some degree with medical travel? What did they discuss? Certainly not the weather (Hurricane Sandy was right outside the hotel).

But I digress, yet again.

According to Irving, six percent of firms offering fully-insured plans reported that they intend to self-insure because of the ACA. So, he is correct in that not many companies are self-insured.

However, Irving also states that it is estimated that the average self-funded plan covers between 300-400 employees, and that 59% of them in the US self-fund as part of their health plan.

And he goes on to say that many small companies are looking to self-fund to reduce their share of the cost burden, but that because small employers are not able to assume the same risk levels, stop loss rates are rising. This pressure, he adds will serve as a limitation on the expansion of self-funded health insurance into the smaller market.

Irving concludes that there are four reason why large self-insured companies would add an additional medical travel benefit to their insurance plans:

  • Current implementation of the ACA has distracted or absorbed attention of insurance markets, including self-insured companies. Many companies are wrestling with far issues of how many employees will be included/excluded, potential penalties, and avoiding fines under the ACA;
  • Self-insured plans are exempt from many of the more costly and burdensome requirements of the ACA as long as they don’t make significant changes, therefore they are careful about keeping their plans unchanged;
  • Reinsurance, or stop loss coverage may be limited for plans offering a medical travel benefit, and;
  • There is no history of outcomes , evidence or actuarial models to support the case among employers for a disruptive change such as international medical travel. Reports suggesting cost savings and quality outcomes are not yet supported by evidence.

One other factor Irving suggests as to why many employers have avoided medical travel is because many find it necessary to contract with a third party administrator (TPA) to collect premiums, manage membership enrollment, claims adjudication and payment. These TPA’s are sometimes referred to as providing “Administrative Services Only” contracts or “ASO” contracts, where they provide typical third party administration services, but assume no risk for claims payment.

Because of these contracts, Irving says that while economic logic suggests that self-funded employers should be interested in high quality, lower cost destinations, it is necessary to convince both the benefits manager and the TPA/ASO  of the value of being a destination provider, and the low risk associated with accessing international medical travel.

Okay, now it’s my turn.

“Impossible is just a big word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary. Impossible is nothing.”

Muhammad Ali

While everything Irving wrote about appears to be factually true at the moment, and I cannot dispute what he says, the fact that employers have been unwilling to pursue medical travel is more complicated than the reasons he gives above.

True, the ACA has many things in it that may or may not seriously impact health care and the health insurance industry, but what he does not mention is that many of the things holding employers back pre-date the enactment of the ACA, and are more concerned with keeping health care the purview of those along the supply chain who profit the most from the system we have created, and not concerned with providing people either under health insurance or workers’ comp, with the best medical care possible, at the lowest cost, no matter where it comes from.

TPA’s and ASO’s and ERISA, and many other mechanisms such as stop loss insurance, and risk avoidance, etc., are mere barriers to the implementation of medical travel into both health care and workers’ comp.

Using my oft-time quoted analogy of going to the Moon, imagine if the baby steps we took to get there such as the Mercury, Gemini and early Apollo programs were not baby steps to the Moon, but actually barriers set up so that we are thwarted every step of the way to getting there or to go even further, such as landing humans on Mars. Don’t you think there would be people just like Irving who would say that it cannot happen?

That is why I quoted the late Muhammad Ali. For a poor black kid from Louisville, he sure had a better understanding of what can be than most folks who did not grow up like he did.

But this does not let the medical travel industry off the hook. I said so in my post, “Ensuring Patient Safety: Making Sure Medical Tourism Puts Its Money Where Its Mouth Is“.

But it is not just the industry itself that needs to come clean. Foreign governments and their travel ministries, the medical travel facilities, the providers, and the facilitators must present hard evidence that better quality and lower cost is possible, and so that when some of the dire predictions of the impact of the ACA are fully realized, or the US health care system collapses of its own weight (see my post, “Colorado “Single Payer” in Health Care Industry’s Sights“), medical travel as an alternative will become more acceptable to US employers, large and small, and not just for health care, but for workers’ comp as well.


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Comp Blog is now viewed all over the world in over 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

Share this article, or leave a comment below.