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

Health Care Thoughts: PPACA Penalty/Tax

by Tom aka Rusty Rustbelt

Health Care Thoughts: PPACA Penalty/Tax

The Congressional Budget Office predicts in 2016 up to 6 million largely middle income workers will pay the PPACA “tax” or “penalty” or whatever we decide to call it, averaging about $1200. This is about 50% higher than previous estimates of impacted taxpayers. A weak economy plays into the increased estimate.

According to the CBO, most of the payers will be in the middle income workers. Does this constitute a middle class tax increase?

In this political season hot rhetoric is flying from both sides. Expect the charges and counter charges to continue.

More info: http://www.nytimes.com/2012/09/20/us/more-expected-to-face-penalty-under-health-law.html

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Health Care Thoughts: Physician Burnout

by Tom aka Rusty Rustbelt

Health Care Thoughts: Physician Burnout

During the years I worked every day with physicians I learned a great deal, including about the time pressure, the relentless work flow and the sleep deprivation during physicians’ “on call” days.
A Mayo Clinic (http://archinte.jamanetwork.com/article.aspx?articleid=1351351) has been published and 50% of physicians are feeling impacts of burnout. Not a surprise to me.

Some of this stress may be alleviated by the trend of physicians becoming hospital employees and hospitalists covering inpatients rather than family practice and internal medicine docs.

Will PPACA crank up the stress? We have high expectations of our physicians and the health system in general, may we have to temper those expectations just a bit?

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Health Care Thoughts: Hospitals Rising

by Tom aka Rusty Rustbelt

Health Care Thoughts: Hospitals Rising
One of the key operational themes of PPACA (Obamacare) is integration. Almost all models of integration have a hospitals or hospital networks as the hub. Some networks are already highly integrated, others are headed in that direction. (There was a big push for integration at the time of the Clinton-care proposals, some of the integration stuck and some of it unwound as a result of operational disasters.)

This gives hospitals and hospital networks an immense amount of new power, whether it is used for good or ill is yet to be seen (I have often encountered a “not-for-profits give better care and are more ethical” theme, but as NFP merge into networks with billions of dollars this does not appear to me to be correct).
In regions with competing networks there are stampedes for “market share,” with a great deal of money often thrown into new facilities and new services. There are also bidding wars for employed physicians and battles for favorable affiliations with practice groups.
This also creates a “talent war” for quick and nimble executives, and I fear the ascendency of “slick-and-useless” MBAs in the hospital industry.
This is a little “inside baseball” but beyond politicals, law and economics there are details with consequences.

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Health Care Thoughts: Evidence-based medicine not easy

by Tom aka Rusty Rustbelt

Health Care Thoughts: Breast Cancer Battle 

Evidence-based medicine may not be as easy as it first sounds.
 
An opinion piece in the British Medical Journal (http://www.bmj.com/content/345/bmj.e5132) attacks the Susan G. Komen Foundation for over-hyping the value of mammography.
 
This is not a new controversy, and experts have lined up on both sides of the argument.
There is general agreement that screening has value, but a great deal of disagreement about who, when, how often, the measurable benefits and the potential negative impacts. The current battle is over the mortality statistics and whether mammograms are being oversold.
 
False positives certainly lead to unneeded biopsies, but unneeded biopsies do provide relief from emotional issues. There is often value in early treatment, but are we over testing?
 
For now, women should consult their own physician and consider family history. When in doubt seek a second opinion from a major medical center with breast cancer specialists.
 
The debate will rage on.

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Health Care Thoughts: Cardiologists Gone Wild

by Tom aka Rusty Rustbelt

Health Care Thoughts: Cardiologists Gone Wild

I have been waiting……. for a major federal investigation into unnecessary cardiology interventions.

According to the NYT a major target are some HCA hospitals in Florida.

The NYT focuses on HCA and for-profit, but I think this is a much broader problem.

Unlike some other specialties (say orthopaedics), there is very wide diagnostic and treatment judgment in cardiology. That however, is not an excuse for excessive treatment.

More details likely to follow.

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Health Care Thoughts: The Deloitte Survey

by Tom aka Rusty Rustbelt

Update 7/26:  The Deloitte link is working:

http://www.deloitte.com/view/en_US/us/Insights/centers/center-for-health-solutions/21c1f310fb8b8310VgnVCM3000001c56f00aRCRD.htm.

Health Care Thoughts: The Deloitte Survey

The annual employers survey by Deloitte (Big Four CPAs) has caused some buzz among us talking heads, although sadly drowned out by the tragedy in Colorado.

(As of this moment the download link is broken, apparently it was a popular download.)

Employers surveyed believe the US health system under performs, has some strengths in ability and access, is wasteful, employee lifestyles are a problem, and the system could be improved by investments in primary care.

Larger firms tend to be somewhat confident of coping with PPACA, smaller firms are not confident at all.

The headline finding is that 10% of employers are likely to dump employees onto state exchanges. My spin on this is the health of the labor market and the relative value of employees will be major decision factors come 2014.

Whatever happens in the November election, PPACA is not a done deal or finished project.

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Health Care Thoughts: Employer Responses

by Tom aka Rusty Rustbelt

Health Care Thoughts: Employer Responses 

The Urban Institute and the Robert Woods Johnson Foundation published a paper (October 2011) about the potential responses of employers and employees. The paper tends to take an optimistic view on the responses of employers, although warning of possible short term thinking by some employers.  
Now the SCOTUS uproar is resolved, it was worth rereading.
 
My own view is slightly different, focusing on:
1) Employers with high value employees will continue to provide benefits.
2) Employers with lower value employees will scrutinize the options.
3) Employer slightly below the 50 cutoff will not be hiring.
4) Employers slightly above the 50 cutoff will look to cut employees.
5) Some employers will try to build networks of independent contractors.
 
Read the UI paper, it is well written for a technical work.

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by Tom aka Rusty Rustbelt 

Health care thoughts: Bundling Medical Payments

The Patient Protection and Affordable Care Act (PPACA) is chocked full of pilot programs, mandates, guarantees, prohibitions, penalties, taxes and experiments. One of those experiments may define the future of Medicare funding for surgeons, and then may define the future of most of the physician revenue cycle. Bundling.
Bundling (also known by other names such as episode payment, global payment, global bundled payment or even packaged pricing) allows the insurer to pay one provider for the entire episode of care, requiring the provider then to contract with and pay all of the other required providers. States and private insurers are also moving toward their own bundling experiments.
There have been some tests of this concept for both cardiac and orthopaedic services, but not at a scale to prove the concept. PPACA provides for Medicare pilot programs. Ultimately bundling will only become standard procedure when bundling can provide good outcomes with cost savings, formidable goals.

A commonly cited example in commentaries is a hip fracture in an elderly (therefore Medicare) patient.
In the current system the patient and Medicare would receive billings from the ambulance, the emergency department, the emergency department physicians, the hospital, the orthopaedic surgeon, a nursing facility (rehab bed) the physical therapist, and a pharmacy (during the rehab stay).
Under a bundled system the bundling would likely begin when the patient arrives at the hospital, and would end when the patient is discharged from the rehab center to home, the end of the episode.
The advantages to the government could be very real – the total cost of the episode is controlled and there is a power incentive for best outcomes without any unnecessary care.
The advantage to the hospital is clear, the hospital is now officially the hub of the wheel and has immense power over patient care (the bundling concept will likely be combined with other new wave concepts such as accountable care organizations (ACOs)). The hospital or integrated delivery service might also attempt to simplify the process by owning and employing all of the providers.
The hub organization of the bundle will need very, very sophisticated IT and cost accounting abilities, be able to negotiate contracts with diverse providers, supervise and coordinate the providers, conduct plan of care activities to maximize outcomes while minimizing spending, and move patients toward high quality outcomes or suffer the penalties.
This system will almost certainly cause tension between hub organizations and other providers, both need each other but both have turf and economic interests to protect. Most of the talk now is about revenue sharing, at some point risk sharing will come onto the table, especially when bundling is a part of an ACO or some other integration scheme.
Bundling will likely come on gradually, and there are at multiple models and multiple possible variations with those models. Bundling will get caught up in other schemes, including ACOs, and there may be new models we do not even recognize at this time. The experiment has begun.

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Health Care Thoughts: Crazy like Foxes

by Tom aka Rusty Rustbelt

Health Care Thoughts: Crazy like Foxes?

Several governors are announcing they will not begin building the state health exchanges required by PPACA (Obamacare). Some of this is pure partisan, and some a stall until November.

Failure to comply will result in the feds installing exchanges in those states.

The states can apparently opt in to the exchange at a later date.

Could this be a means of allowing the feds to do all of the heavy lifting, and then jumping in at a convenient time later? Is there more than partisan thinking here? Interesting?

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Healthcare reform op-ed

The current uptick in ‘medical inflation’ in private sector health industry is worth a separate post. The Standard and Poor Healthcare Economic Indices can be found here.
Lifted from a note from Run 75441 on the link I sent on healthcare reform.

Recently, Matt Stoller claimed Obama had a 61 vote majority in the Senate and enough to secure either Universal or Single Payer Healthcare. We all forget the one Senator from Aetna stand which killed any other options an Medicare for those starting at 55. President Obama did not have a filibuter proof 61 votes in the Senate for any other healthcare options muchless the ACA. The Blue Dogs (Nelson(s), Bacus, Bayh, Cantwell, Feinstein, Lincoln, Pryor, Widen, Conrad, etc) wouldn’t move for any healthcare plan unless they brought home the bacon as Nelson attempted to do for Nebraska. Just plain ordinary obstructionism to block whatever this President would attempt to do. Senator Lieberman killed anything beyond the ACA. 

Former Editor of the New England Journal of Medicine and others should be sorry if the entire ACA is struck down or dismembered as we will go another decade before a President and a Congress take up the issue again and heathcare costs (for which healthacre insurance is a reflection) will again rise faster than inflation. Because of the power of Medicare, it has been able to rein in rising healthcare costs so far at less than 3% than that of the commercial market at about 9% %. Standard and Poors Healthcare Economic Indices .

The last time healthcare reform was attempted was under Clinton and costs have increased multiple times. A failure to allow the ACA to go forward will allow the overall Healthcare Industry to again implement inflationary costs in a market which has no restraints. Certainly, I can not conjur up what SCOTUS will do. The kings in black robes will decide what is best for us as Congress lacks the will power to represent those who placed them there with the exception of ALEC, Koch(s), and Norquist.

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