Relevant and even prescient commentary on news, politics and the economy.

Health Care Thoughts: This is a little strange

by Tom aka Rusty Rustbelt

Health Care Thoughts: This is a little strange

California’s health care exchange is often cited as being as the forefront of complying with the letter and spirit of Obamacare.

So it seems a little strange that California has exempted most exchange information from the public records laws, including information about the contractors doing most of the set-up and operations.

There seems to no indication why this would make sense or be necessary, but questions are being raised.

For more:

Health Care Thoughts: Obamacare Fail

by Tom aka Rusty Rustbelt

Health Care Thoughts: Obamacare Fail

When I mention problems with Obamacare implementation in the blogosphere, I am pummeled. Liberals think I am overly cynical, too focused on the practical, and I fail to understand the power of good intentions.


The S.H.O.P. program for small businesses has been delayed until 2015 for the 33 states with federal involvement in the exchanges. Full exchange states have an option to delay. In effect, there will only be one policy available for employers, rather than the menu promised. If that policy does not fit, then……….?

What does this mean? 2014 is shaping up to be a disaster in the small business health insurance markets, where half of a transition equals chaos. Small businesses may have greater incentives to dump employees into the state exchanges, IF the state exchanges are operating as intended (not a sure thing).

One more time. Complexity is the enemy of a smooth roll out and operational efficiency.

Health Care Thoughts: Obamacare Updates

by Tom aka Rusty Rustbelt
Health Care Thoughts:  Obamacare Updates
The slow march toward full implementation continues.
Exchanges – As of today 17 states will create their own exchange, seven states will partner with the government, and 26 states have defaulted to the federal program (if anyone asked me I would suggest defaulting in order to let the feds do the early heavy lifting).
Perhaps the most important questions now are:
Will any of the exchanges be ready on time?
Will the products be affordable?
How will employers respond?
Employer Response – there is a great deal of discussion but very few decisions have been announced (although some are likely in place but not announced).
Will a generally weak economy and slack labor market play into the decisions? Time will tell.
A strategy of self-insuring may gain favor, and I will do a separate post on that topic.
Providers – the word I hear most often is “chaos.” Providers are trying to prepare for a system as yet poorly defined. Some trends are emerging (integration, the early ACOs) but it is too early to tell how anything will work.
Issues in primary care and rural health care are likely to be especially acute.
Consultants and health care focused lawyers are raking it in – so somebody wins.

Electronic Medical Records and Electronic Health Systems – this has the potential to turn into a nightmare

Health Care Thoughts: Law of Unintended Consequences

by Tom aka Rusty Rustbelt

Health Care Thoughts: Law of Unintended Consequences

Unions have been enthusiastic supporters of Obamacare.

But not all unions and not all unions benefits are the same. Unions with lower income members are suddenly discovering the PPACA deal is not so great for everyone.

Lower income workers with union plans will not be eligible for subsidies, and now the unions want to change the rules. Unions lobbied for this early on but were denied by the Obama administration.
(There is no monopoly on self-interest here, some large businesses (think Wal-Mart) will be maneuvering to dump workers into state Medicaid plans.)

Employers with union plans are paying higher premiums as the working class pays for improvement in coverage mandated by PPACA. This can be critical in bid areas such as construction.  Unintended consequences can be quite cruel.

Health Care Thoughts: While We Were Busy with the Election

by Tom aka Rusty Rustbelt

Health Care Thoughts: While We Were Busy with the Election

As we were busy watching the election the Obama administration agreed in late October to settle a class-action lawsuit with disability advocates on Medicare services for the disabled and those with chronic conditions.

Medicare has historically required for certain coverage there be a likelihood of medical of functional improvement before services would be authorized. This precluded coverage for those with chronic conditions or disabilities and unlikely to see improvement.

This is a significant change which, when put into full operation, will be a improvement in coverage for some patients and a major relief for their families. How long this will need to be put into full effect? I am not certain but will certainly keep an eye on it.

Health Care Thoughts: EMR Cluster Mess

by Tom aka Rusty Rustbelt

Health Care Thoughts: EMR Cluster Mess

The 2009 stimulus bill kicked off the process to install electronic medical records (EMR) tied into electronic health records (EHR) networks. The stimulus bill included financial rewards for installing systems and meeting “meaningful use”standards.

Couple of problems, with unfair heat aimed at the Centers for Medicare and Medicaid Services.
First, it is difficult to really audit the “meaningful use” standards, even if the auditors were available, so we really don’t know if the stimulus money is being used properly. This was a problem baked into the cake.

Second problem , the physician office systems tend to direct docs through a check-a-box, drop-down-box, and standard language environment. The entered information (in many systems) then interacts with a coding program to send billing codes to the appropriate billing system. Now it seems some physicians using EMRs may be coding higher than physicians who are not. (see NYT archives, 9/24 and 9/25/2012)

Is this higher coding fraud, lack of training, incompetence or could it be the docs were under-documenting and under-coding previously. We won’t know for a while, with billions at risk, and the docs at risk for civil and criminal actions.

Third, THE BIGGEST PROBLEM, EMRs just do not seem to work as neatly as the vendors promise and the bureaucrats imagine. Like many panacea remedies, the implementation is tougher than the dream.
And we haven’t even gotten to ICD-10 implementation yet.

Or the privacy and security nightmares sure to follow.

Health Care Thoughts: Health Exchange Delay

by  Tom aka Rusty Rustbelt
Health Care Thoughts: Health Exchange Delay
The Obama administration has delayed the decision point on state health exchanges until December 14th.
Much of the discussion on this issue has centered on politics. My focus is on more practical issues.
The Obama administration has a track record of being unable to develop administrative regulations on time and for writing complicated and incoherent regulations. We still do not know for certain what “essential benefits” might be and how the administration will balance intense lobbying on this issue versus affordability.
From a management and financial viewpoint it may make perfect sense to have the feds install their “plug-and-play” model exchange and to let the feds do the heavy lifting, politics aside. Maybe the Democrat governors are wrong on this one?

Health Care Thoughts: Reform Status According to Really Smart People

by Tom aka Rusty Rustbelt

Health Care Thoughts: Reform Status According to Really Smart People

So after two days in rooms full of top notch front line experts, and two nights sleeping on a couch in a hospital waiting room, I offer a list of key take-aways.. This is reporting only, not advocacy. Some of my opinions may vary (not much). I avoid the nitty-grittiest of operational details. So…..

The amount and complexity of work to be done in the next 24 months is crushing and impossible – expect delays or sloppy rollouts.

Scale is everything, small providers will get crushed. Impacts on rural health care uncertain, so…

Consolidation and integration is the critical path. Some bad outcomes likely.

The Obama administration is incapable of producing regulations and guidance papers on time (in Washington a little late is considered on time).

Providers are preparing cuts both permenant and “cliff” cuts.

The amount and complexity of IT work through the system is staggering. Data is the new currency of health care.

Setting up the exchanges is a massive and messy task, even in the enthusiastic states. Letting the feds install “plug-and-play” may become a good option for many states.

Some large public companies are seriously considering dropping health insurance and paying the penalty (stunned me). No decisions yet known.

Winners, sorta in sequence:

Health IT – vendor companies and geeks
Health lawyers – transaction and regulatory
Health executives – the “talent wars” are going full blast
Health CPAs, finance officers and consultants
Physician executives
Nursing executives
Bureaucrats and regulatory


Physicians – mostly (depends on many factors)
Nurses – hands on care givers
Therapist and ancillary providers
Hospital support staff

Getting a child ready for college? Push them towards…..

IT, health emphasis
Health care administration
Medical records administration / health informatics
Medical coding (good jobs with 2 year degree)
Accounting and finance, health emphasis
Actuarial science

Private health insurers may be really big winners (oops). Some private health insurers are building primary care networks and ACOs.

There are some intesresting and even exciting geriatric care innovations morphing out of the Obama administration, academia and providers.

The “old elderly” are using huge amounts of Medicare resources, innovations may cut usage with the same or better care.

Hospital capital spending is going wild as a market share play, just what we don’t need.

So, now to plug through a thousand or so pages on operational and regulatory details. Did I mention the Obama administration writes a lot of long and largely incomprehensible regulations and guidance statements?

Interesting times ahead.

Tom aka Rusty

Health Care Thoughts: Business Model Angst

by Tom aka Rusty Rustbelt

Health Care Thoughts: Business Model Angst

For the past two months I have been absorbed more so than usual in health care strategic and regulatory compliance issues. One of the top trends is the scramble for a workable business model for providers. The announcement this week of the Beaumont system merger with the Henry Ford system in Detroit is a good example.

Integration and consolidation are clearly the early winners, although the Obama administration still has not gotten the DOJ and FTC on the same page with Health and Human Services.
Integration is supposed to pave the way for innovative payment systems, better data accumulation and better clinical quality. The jury is still out.

In a somewhat related note, I have heard a similar comment from all over the country – rolling out electronic medical records tied into networks (EHR) is a slow, expensive, agonizing process.

Health Care Thoughts: Hospital Job Cuts and Job Gains

by Tom aka Rusty Rustbelt

Health Care Thoughts: Hospital Job Cuts and Job Gains

I have been spending a great deal of time lately communicating with health care experts far above my modest standing, mostly on publishing projects and seminar scheduling for next year.

One hot topic among the wired in folks is hospital layoffs, not usually large per hospital but a steady drip drip since 2009.

The buzz I am getting is the next two or three years will see a net job loss of about 400,000 as Medicare and Medicaid cuts, combined with incentives to reduce stays and re-admissions, chip away at hospital budgets. Most of the cuts will be from clinical and maintenance areas.

Notice the “net,” hospitals will be doing some hiring during the job cuts. The hospitals will be hiring IT geeks, finance and accounting geeks, nurse managers, case managers and executives.

Some of this is fallout from the economy, but much of it will be changes necessitated by PPACA, especially for those organizations moving into accountable care organizations.

More accountants, fewer nurses. Beware of unintended consequences.

(Dan here…I have some comments and questions in comments hopefully tonight)