Tag Archives: Medicare

Midterm Mashup

Well, the 2018 Midterm elections are over, and the analysis is beginning as to what this all means.

For those who wanted to send a message to the Russian puppet in Washington, the election meant that the House of Representatives will be controlled for the next two years starting in January by the Democrats.

For the Republicans, it means a greater control of the Senate, with at least one race, the one in my current state of Florida undecided and headed for a recount, as per state law.

However, there were many defeats for the party of Obama, Bill Clinton, Jimmy Carter, LBJ. JFK, Truman and FDR. Andrew Gillum lost to a nobody for governor of Florida who is connected to the Orangutan by an umbilical cord. Beto O’Rourke made a valiant, if futile effort against the worse person to hold a Senate seat, Lyin’ Ted Cruz. And a few Democratic senators lost seats in Indiana, Missouri and North Dakota.

But as far as health care is concerned, the change in the leadership of the House of Representatives means that the ACA is safe for another two years. and Medicare and Medicaid will not be cut, as the Senate Majority Leader has indicated he wanted to do.

Medicaid, in particular, came out of the Midterms a little better than expected before the election, as the following posts from Healthcare Dive, Joe Paduda, and Health Affairs reported this morning.

First up, Healthcare Dive, who reported that Red states say ‘yes’ to Medicaid . Idaho, Utah, and Nebraska said yes to expansion; Montana said no.

Joe Paduda echoed that in his post, “And the big winner of the 2018 Midterms is…Medicaid“. However, Joe stated that results in Montana were not final; yet, they had decided to expand Medicaid two years ago, but the vote was temporary, and yesterday’s vote was to make it permanent.

And lastly, Health Affairs reported in “What the 2018 Midterm Elections Means for Health Care” that besides blocking repeal of the ACA, Democrats may tackle drug prices, preexisting conditions protections, Opioids, Medicare for All, Surprise bills (unexpected charges from a hospital visit). regulatory oversight, extenders such as MACRA, Medicaid Disproportionate Share Hospital (DSH) payments, and Medicaid expansion, especially since gubernatorial wins in Maine, Kansas, and Wisconsin will make expansion more likely in those states.

Advertisements

Mid-Week Catch-Up

Borrowing a page from another blogger, here are some items that I have seen this week that I did not immediately post to the blog. The first three are courtesy of Medical Travel.com.

From AHA.org, comes an article about the Zika epidemic I wrote about a while ago. About 14% of babies age one or older who were born in U.S. territories to pregnant women infected with Zika virus since 2016 have at least one health problem possibly caused by exposure to the virus, the Centers for Disease Control and Prevention reported today. About 6% had Zika-associated birth defects, 9% nervous system problems and 1% both.

From Health Affairs.org, comes a report about the fundamental flaw of health care and the recurring-payment-for-outcomes solution.

Bloomberg.org reported that US hospitals are shutting at a 30-a-year pace with no end in sight.

Lastly, Health Affairs blog posted an article about an issue I covered some years ago, the Medicare Shared Savings Program (MSSP).

Have a good rest of the week after remembering the fallen of 9/11. FYI, I was in Houston at the time, just having started a new job with Aon there, and heard about the first plane crashing into the north tower while driving to work and listening to the radio. As we were all new, and had little to do, I took a brief siesta and when I went into the hallway, was told to go upstairs to the break room. There was a TV on, and as I entered the room, the south tower went down. This NYC born kid was not sure what was going to happen next, surrounded as I was by all these Texans. I remembered the people and companies I knew there in both towers, especially my cousin who was there for the 1993 attack.

 

Again, With the Models?

Today’s post from Don McCanne revives an old issue readers of this blog are familiar with — the introduction of new models or the revising of old models for value-based care such as Accountable Care Organizations (ACOs) and the Medicare Shared Savings Program.

CMS Administrator Seema Verma attempts to defend these models and gives an overview of a new proposal called “Pathways to Success.” Don’t you just love these cute names they give to future failures? Instead of scraping them altogether and going to single payer, they keep re-inventing a broken wheel.

At any rate, I am posting Verma’s article from Health Affairs blog, along with Kip Sullivan’s response, and lastly, Don McCanne’s brief comments on both. Enjoy!


Health Affairs Blog
August 9, 2018
Pathways To Success: A New Start For Medicare’s Accountable Care Organizations
By Seema Verma
For many years we have heard health care policymakers from both political parties opine about the need to move to a health care system that pays for the value of care delivered to patients, rather than the mere volume of services.
From the moment I became Administrator of the Centers for Medicare & Medicaid Services (CMS), I have been committed to using every tool at my disposal to move our health care system towards value-based care.
One set of value-based payment models that CMS has been closely reviewing are initiatives involving Accountable Care Organizations (ACOs).
In this post I will unpack key features of Medicare’s ACO initiatives and provide an overview of CMS’s new proposal for the Medicare Shared Savings Program, called “Pathways to Success.”
Upside-Only Versus Two-Sided ACOs
The majority of Medicare’s ACOs – 460 of the 561 or 82% of Shared Savings Program ACOs in 2018 – are in the upside-only “Track 1” of the Shared Savings Program, meaning that they share in savings but do not share in losses.  Currently, ACOs are allowed to remain in the one-sided track for up to six years.
The results show that ACOs that take on greater levels of risk show better results for cost and quality over time. (See Kip’s comments.)
The current combination of six years of upside-only risk, which involves bonus payments if spending is low but no risk of losses if spending goes up, along with the provision of waivers may be encouraging consolidation.  Such consolidation reduces choices for patients without controlling costs.  This is unacceptable.
The proposed changes included in Pathways to Success would shorten the maximum amount of time permitted in upside-only risk to allow a maximum of two years, or one year for ACOs identified as having previously participated in the Shared Savings Program under upside-only risk.
Streamlining the program, extending the length of agreements, and accelerating the transition to two-sided risk would result in reduced administrative burden and greater savings for patients and taxpayers.
Looking Forward
ACOs can be an important component of the move to a value-based system, but after six years of experience, the program must evolve to deliver value.  The time has come to put real “accountability” in Accountable Care Organizations.
—————————————————————————————————————————————–
The Health Care Blog
August 21, 2018
Seema Verma Hyperventilates About Tiny Differences Between ACOs Exposed to One-and Two-Sided Risk
By Kip Sullivan, JD
There is no meaningful difference between the performance of Medicare ACOs that accept only upside risk (the chance to make money) and ACOs that accept both up- and downside risk (the risk of losing money). But CMS’s administrator, Seema Verma, thinks otherwise. According to her, one-sided ACOs are raising Medicare’s costs while two-sided ACOs are saving “significant” amounts of money. She is so sure of this that she is altering the rules of the Medicare Shared Savings Program (MSSP). Currently only 18 percent of MSSP ACOs accept two-sided risk. That will change next year. According to a proposed rule CMS published on August 9, ACOs will have at most two years to participate in the MSSP exposed to upside risk only, and after that they must accept two-sided risk.
That same day, Verma published an essay on the Health Affairs blog in which she revealed, presumably unwittingly, how little evidence she has to support her decision. The data Verma published in that essay revealed that one-sided ACOs are raising Medicare’s costs by six-one-hundredths of a percent while two-sided ACOs are cutting Medicare’s costs by seven-tenths of a percent. Because these figures do not consider the expenses ACOs incur, and because the algorithms CMS uses to assign patients to ACOs and to calculate ACO expenditure targets and actual performance are so complex, this microscopic difference is meaningless.
As pathetic as these figures are, they fail to take into account ACO start-up and operating costs. CMS doesn’t know or care what those costs are. The only relevant information we have are some undocumented statements by the staff of the Medicare Payment Advisory Commission (MedPAC) to the effect that ACO overhead is about 2 percent of their benchmarks (their predicted spending). I suspect 2 percent is low, but let’s take it at face value and do the math. If, as Verna’s data indicates, two-sided ACOs save Medicare seven-tenths of a percent net (that is, considering both CMS’s shared-savings payments to some ACOs and penalties other ACOs that lose money pay to CMS), but these ACOs spend 2 percent doing whatever it is ACOs do, that means the average two-sided ACO is losing one percent.
The good news is that Verma may have hastened the demise of a program that isn’t working. Whether Congress ultimately pulls the plug on the ACO project will depend on whether ACO advocates will concede at some point that the ACO fad was based on faith, not evidence, and has failed to work. I predict they will refuse to admit failure and will instead peddle another equally ineffective solution, for example, overpaying ACOs (as the Medicare Advantage insurers and their predecessors have been for the last half-century). I base my prediction on the behavior of ACO advocates. The history of the ACO movement indicates ACO proponents don’t make decisions based on evidence.
Facing the Evidence
Evidence that the ACO project is failing is piling up. All three of CMS’s two-sided ACO programs – the PGP demo, the Pioneer demo, and the Next Generation program – saved only a few tenths of a percent, while CMS’s mostly two-sided program, the MSSP, raised costs by a smidgeon. All four programs have raised costs if we take into account the ACOs’ start-up and operating costs and CMS’s cost of administering these complex programs. Evidence indicting the other major “value-based payment” fads – medical homes, bundled payments, and pay-for-performance schemes – is also piling up. The simultaneous failure of all these fads to cut costs spells trouble ahead for the Affordable Care Act (because it relies on “value-based payment reforms” for cost containment), MACRA (because it also relies on “value-based payment” theology), and our entire health care system (because the big insurance companies and the major hospital-clinic chains are spending more money on “value-based payment” fads than those fads are saving, and because these 1,000-pound gorillas are using the establishment’s endorsement of ACOs, medical homes etc. as an excuse to become 2,000-pound gorillas).
The root cause of our nation’s chronic inability to adopt effective cost-containment policies is the chronic inability of the American health policy establishment to make decisions based on evidence, not groupthink. Seema Verma’s decision to bet the farm on two-sided-risk ACOs is the latest example of this problem.
——————————————————————————————————————————————
Comment by Don McCanne
We can thank Seema Verma for showing us that all of the talk about value-based payment – paying for value instead of volume through the establishment of accountable care organizations – was never really about value. Her insistence in shoving providers into downside risk reveals that it was always about reducing federal spending on Medicare. But that hasn’t changed her deceptive rhetoric about value and accountability.
Thank goodness we have astute analysts such as Kip Sullivan. The excerpts from his critique of Verma’s views as expressed in her Health Affairs Blog article should tempt you to read his entire critique at The Health Care Blog (link above).
The nonsense about ACOs has to go so we can get down to fixing the real problems with our health care financing system – the inequities, lack of universality, and lack of affordability for far too many individual patients. So let’s turn up the volume on a well designed, single payer, improved Medicare for all.

Nearly 20% of US hospitals weak or at risk of closing, analysis finds | Healthcare Dive

Key risk factors including low capital expenditures, more capacity in a 10-mile radius and for-profit versus nonprofit status, the Morgan Stanley report said.

Source: Nearly 20% of US hospitals weak or at risk of closing, analysis finds | Healthcare Dive

Rural hospitals in dire need of regulatory relief | Healthcare Dive

“Reducing some of the costly regulatory challenges we face would help staunch the bloodletting,” said Leslie Marsh, CEO of Lexington Regional Health Center.

Source: Rural hospitals in dire need of regulatory relief | Healthcare Dive

Healthcare Lobbying Group Double-Crossing Democratic Voters

For nearly a year now, I have been advocating single payer health care ever since I was diagnosed with end-stage renal disease. BTW, I am doing fine, even if I have been rejected twice for access to transplant centers due to personal reasons I won’t go into here.

Today, I found an article on The Intercept.com that reported that several candidates for Congress and other offices in Hawaii and other states have secretly secured opposition to “Medicare for All” single payer healthcare, even though they have told their voters that they support it.

According to the article, the candidates in Hawaii’s 1st Congressional District, former state Sen. Donna Mercado Kim, Hawaii Lt. Gov. Doug Chin, and Honolulu City Council Member Ernest Martin are taking heat from opponents for talking to an industry-friendly group, the Healthcare Leadership Council (HLC).

The Healthcare Leadership Council seeks to advance the goals of the largest players in the private health care industry. These candidates are talking to the HLC even as public opinion is moving towards positions opposed by giant health care companies.

Kaniela Ing, a state lawmaker running for the seat on a democratic socialist platform stated that, “Democrats running in a primary election will say they support ‘Medicare for All,” but what do they say to lobbyists behind the scenes?”

In fact, the article reports, one leading candidate has campaigned on a pledge to crack down on over-priced pharmaceuticals and promote single payer, but told the consultant sent from the HLC that he would maintain drug industry friendly pricing policies and views Medicare for All with skepticism.

HLC spends over $5 million a year on industry advocacy and brings together chief executives of major health corporations, and represents an array of health industries — from insurers, hospitals, drugmakers, medical device manufacturers, pharmacies, health product distributers, and information technology companies.

HLC’s outreach in Hawaii began in January. The group told candidates, in an email obtained by The Intercept, that it was in the process of forming a coalition to “jointly develop policies, plans, and programs to achieve their vision of a 21st century system that makes affordable, high-quality care accessible to all Americans.”

This language obscures their national campaign to monitor and blunt the energy behind progressive policy reform. In an email to The Intercept, Michael Freeman, executive vice president of HLC said that they survey “congressional candidates every election cycle regarding their views on a wide range of healthcare issues.”

Former state Sen. Kim’s dossier profile said she is very pro-market, opposes any attempt at single payer, does not support price controls on pharmaceuticals and agrees that Medicare and Medicaid need to be managed by the private market.

It would seem that besides the opposition from the insurance companies and the pharmaceutical industry, single payer, Medicare for All, is under assault below the radar of most voters, if not most Democratic voters during the primaries.

Despite alleged strong support for bills such as the one Bernie Sanders introduced, lobbyists for the medical-industrial complex are fighting hard to defeat health care reform for all Americans, and no matter what the public attitude is, they will prevent at all costs, the transition to single payer.

HLC also keeps tabs on candidates who could be a threat to their agenda, such as Ing, stating that she vocally supports a single payer, public health care system.

Lobbyists have told executives in the health care industry to be vigilant about the threat of single payer.

“It would be a mistake for us to overlook the growing number of lawmakers who are supportive of measures to expand significantly government’s role in healthcare,” according to a report HLC published at the end of last year. The report went on to say that while these ideas do not have the political support to pass at the moment, the “momentum on the Democratic side of the aisle is undeniable,” They have dispatched teams of lobbyists to keep tabs on rising candidates.

So, even if you vote for a Democrat in November, chances are, that they will double-cross you when it comes to supporting Medicare for All. Which is wrong-headed on their part, especially the hospitals and pharmaceutical companies.

If more people are covered, and the government pays for their health care, hospitals will get more patients covered under the plan and thus more revenue, even if they charge lower prices than for private insurance, and drug companies will sell more drugs to these patients, even if the prices are brought under control.

What difference does it make if a patient gets their health are from a government plan like Medicare or Medicaid, as many already do, or if they get it through private insurance? The hospitals and drug companies still make money, just a smaller amount. The number of newly insured will offset any assumed loss of profit, thereby increasing profit, and just not from a select group of people who can afford health care on their own.

Advocates for single payer need to be vigilant also. Don’t buy a pig in a poke. Confront these and other candidates for office to see if they really believe in single payer, or are pigs with lipstick.

 

 

 

Hospital Outpatient Payments Rising — Again

The Workers’ Compensation Research Institute (WCRI) released a study today that indicated that hospital outpatient payments were higher and growing faster in states with percent-of-charge-based fee regulations or no fee schedules.

This study is an annual study that compares hospital payments for a group of common outpatient surgeries in workers’ compensation across 35 states from 2005 to 2016.

According to WCRI’s executive vice president and counsel, Ramona Tanabe, “Rising hospital costs continue to be a focus for public policymakers and system stakeholders in many states.”

The study found that states with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules.

Percent-of-charge-based states were 30 — 196% higher than median of the states with fixed-amount fee schedules in 2016.

States without fee schedules also had higher payments per episode; 38 — 143% higher than the median of fixed-amount states in 2016.

Lastly, WCRI found that hospital payments per episode in most states with percent-of charge-based fee regulations or no fee schedules, grew faster than states with fixed-amount fee schedules.

The study also compared payments for workers’ comp with Medicare rates for the most common group of surgical procedures across states. The following chart highlights the variation in the difference between average workers’ comp payments and Medicare rates. The variation was as low as 38%, or $2,012 below Medicare in Nevada, and as high as 502%, or $21,692 above Medicare in Alabama.

Source: WCRI

So, what does this mean?

It means that hospital outpatient payments for the most common group of surgical procedures in Workers’ Comp are not decreasing, and are likely adding to the slow, but steady rise in the overall total average medical cost for lost-time claims, a development I have followed for some time now with the release of NCCI’s State of the Line Reports.

This is not the first time I have discussed this topic, and probably won’t be the last, as I keep reminding you that surgical costs for most common workers’ comp surgeries are a fraction of the cost here in the US in countries that provide medical travel services.

If this study is right, wouldn’t you rather pay for a surgical procedure in Costa Rica, for example, that costs $12—$13,000, than paying $21,692 in Alabama? Eighteen out of thirty-five states listed on the above chart have higher payments than the median of 100. This represents 51.4% of all the states examined in the study. Just more than half.

And this idea of medical travel is stupid, ridiculous, and a non-starter? Ok, keep shelling out more money for hospital outpatient procedures. After all, it ain’t your money, is it?

To download this study, visit WCRI’s website at https://www.wcrinet.org/reports/hospital-outpatient-payment-index-interstate-variations-and-policy-analysis-7th-edition.