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Latest national health reform attempt: From the warm pan into the furnace February 20, 2010

Posted by medvision in Healthcare Reform.
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It looks like the Royals are playing the public option card again. The logic goes, ” Medicare/Medicaid are performing so wonderfully why not jam everyone under the system”? With such a system the government could dramatically reduce the unit cost of procedures payable to physicians and hospitals. Concerning any remaining private plans, define them as Cadillac/high-value plans and tax them.

Let’s look at a sample Medicare reimbursement. In central Florida physician office visits, 15 minute CPT 99213, are reimbursed a whopping $64.27 by Medicare. (I pay more for the plumber to drive to my house to tell me a leaking pipe, is indeed, leaking.) So, a physician maintaining a stand-alone office, paying for nurses and office staff will receive a 25% reduction in the payment of $64.27 in order for the government to fund health coverage for additional 33 million Americans? You see above how the math works.

The result will be tens of thousands of physicians refusing to see government covered patients/or completely leaving the practice of medicine.

Taxing so-called Cadillac plans.: High-cost healthcare plans are driven by high levels of chronic disease. How can a system be financed on the backs of the sickest/weakest of all Americans? See USA Today article:  http://tinyurl.com/mshbst

Yes we need reform — not planned failure repackaged health reform.


Who’s in charge of the institution? The inmates or guards? February 12, 2010

Posted by medvision in Healthcare Costs, Uncategorized.
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Imagine a business related financial process which works like this: “Every two weeks, $1,000,000, + or -, is transferred from the company bank account to a vendor/s. No audits take place, no one knows if the prices paid for services are in line, retroactive financial reports don’t necessarily align with the banking statements and each year prices are increasing from 5 to 13%”. Of course, I’m discussing the employer sponsored healthcare world. The asphalt covering the home office parking lot received more attention than the real components of employer-sponsored health care coverage.

I’m not beating up managed-care-organizations,they are following the same business practices they’ve enjoyed for decades. Pretty profitable too, as current reports indicate the top five companies had 2009 profits of $12.2 billion. Maybe plan sponsors could have negotiated a little better and utilized some of 12.2 billion to provide better care to their members? Here’s the only way to begin changing this result: Too much trend increase and decreasing levels of member health:

If you don’t have independent health plan DATA  you can’t win or even know there the finish line is! In fact, you can’t even play the game because you’re lacking a rule book. Sure you can feel better by using benchmark, rear-view mirror industry data, but your results won’t change. Like most health plan sponsors you remain adrift at sea, subject to the same wind pushing everyone else.I partner with Verisk Health and have better/clearer predictive, actionable data to plan and negotiate with. Some wins include, the identification of an overpayment, to the tune of $250,000, on one claim, seeing  precursors to large cancer claims enabling actions to mitigate the disease and, on a population basis, data with which to manage the entire spectrum of health plan risk.

 Additionally, I’m finding independent data enables our managed-care partners to focus, and deliver enhanced services, which improves member care. It’s one of those, everybody wins, situations. Many software vendors can supply data. Just make sure they are not aligned with the vendors you utilize. A good rule is, if the vendor partner, MCO/PBM, resists in supplying data, complains/pushes back, you probably have a good software partner.

It cannot be accomplished overnight and the process initiation requires a different “state of mind” from the employer plan manager and consultant. It will however return fantastic results. The great thing about healthcare is as quality increases, better care is delivered and costs decline. Of course, the opposite is high healthcare inflation/trend means poor quality and poor care. Quality does cost less.

Prescription drug therapy compliance– Strategies/thoughts for improvement February 9, 2010

Posted by medvision in Rx Costs, Uncategorized.
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I remember reading a statistic from the American Heart Association. “Failure of patients taking their prescribed medication is the number one problem physicians have concerning treatment of chronic disease.” A significant portion of drugs critical in saving lives, and preventing the progression of disease, are described as  asymptomatic. The individual feels no different taking or not taking the medication. A perfect example would involve high blood pressure. Since individuals cannot feel the condition, high blood pressure, diagnosed with blood pressure meters, taking a drug to control BP makes the individual feel no different. The exact opposite would be the patient suffering from heartburn and takeing a prescription Proton Pump Inhibitor (PPI), $5 per pill, Nexium. Symptoms return immediately if the individual fails to take the medication.

Common medications controlling blood pressure would include generic Ace Inhibitors, available under $.10 per pill. (3) Proton Pump Inhibitor drugs are available over-the-counter or on generic basis. Consumer Reports Health offers research indicating the differences between the individual PPIs are virtually indistinguishable. Typically, employers find prescription PPIs are the first or second most expense therapeutic class of drugs within their formulary.

From a risk/disease prevention standpoint, which classification of drugs have the greatest impact to improve member outcomes and lower cost? The blood pressure medication or heartburn? (I understand a small number of individuals described PPIs for prevention of esophageal cancer) Of course the consensus answer would be medications for blood pressure, as this condition leads to the myriad of cardiovascular diseases, renal failure and early death. I bring up these instances because they describe a framework for discussions around plan decisions made on value/clinical value versus ones made on the single consideration of medication cost. Today most drug decisions are being made by PBM vendors, not plan sponsors.

The problem with employer sponsored healthcare is advertised as involving cost. I will spend time arguing our problems can be largely mitigated by reallocating plan costs already embedded. Why spend thousands of dollars for heartburn medications available over-the-counter and then, charge higher copayments for medications critically necessary to prevent disease or worsening of disease? Member cost/deductibles/copayments are a barrier with respect to prescription drug compliance. Two other barriers exist, lack of education and untreated/undiagnosed depression. We’ll cover these in the future post. http://www.rand.org/health/feature/forty/prescription-drug-cost-sharing.html

High copays are an obstacle to health care–Guess who pays longterm? February 8, 2010

Posted by medvision in Healthcare Costs.
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It’s not just the creation of the fourth tier on PBM formularies. It also applies to cancer screenings, overall prescription drug therapy compliance and physician visits which catch disease in early stages. As an example, a zero copayment mammogram becomes a $350 member payment when the doctor diagnoses anything. Employer plan sponsors must realize their role as leader. Demand common sense be followed.


Dollars burned by MCOs–Mad Money’s Cramer–Funny & Sad February 7, 2010

Posted by medvision in Healthcare Costs.
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The main foundation Cramer misses is profits need to be re-invested in the health of members. If done these public companies would never have worries about  profits again!


Disease Management–GE “Sounded too good to be true–it is” February 6, 2010

Posted by medvision in Chronic Disease.
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BusinessWeek leads with a controversial subject, disease management results, in this week’s edition. It’s a subject on which entire books are written, $100s of millions spent and yet leaves many health plan managers, scratching their heads.

“Should we spend the additional $5 per employee per month for disease management this year or not?”

Here we go, let’s try and apply some logic. First, how much do we think GE spends for healthcare annually, per employee? I’ll take a wild guess, let’s say $8000. In reality, the $8000 average is heavily influenced by the claims of the top 5%, as the bottom 85% probably average incurring less than $700 per year. The annual claims, of the top 5% health plan members equal 60%+ of total annual expenditures. The numbers work like this: top 5% account for 60% of plan assets, bottom 85% less han 25%. 

Wait a minute, $5 per employee per month/$60 per year? In other words, to mitigate disease, plan sponsors invest .75% of the employee’s average annual healthcare cost? That’s right, $60 per $8000. And here’s the great part of the process: Possibly, employees, and/or covered dependents, could get a phone call from an unknown nurse, many states away, questioning the individual’s health status and or disease? Many times this nurse might even know two of the three diseases diagnosed and if a prescription was refilled last month. Of course this call may come during a very convenient time, dinnertime or maybe Saturday morning.

What’s amazing is employer plan sponsors think this could work in the first place? Again, investing $.75 for each hundred dollars of disease cost, or $.75 invested in prevention and disease mitigation (less than 1%). How many nurses get assigned for that $.75 investment? Maybe one per 20,000 members?

Here’s the deal. The health of American workers is important to productivity, very complex and changing rapidly. We are facing  continuous stress over our jobs and families, sometimes declining health, increasing cost for healthcare and 8 minute doctor visits. And, now to help us out, we get a website address and maybe a phone call from a nurse in New Mexico. This can best be described as “the dog won’t hunt”.

So what works while being cost effective? A wise person once said, ” Healthcare is a local thing”. It really is. My clients, following many pioneering, caring employers are bringing health services on the job site. On-site nurses and wellness clinics all the way to full service on-site physician offices. It’s merely risk-management in a caring manner. Oh yeah, the ROIs being derived are terrific.

What causes healthcare inflation? Let’s ask the expert February 4, 2010

Posted by medvision in Healthcare Costs.
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 TESTIMONY, Statement of Peter R. Orszag, Director, Growth in Health Care Costs, before the Committee on the Budget United States Senate, January 31, 2008 ‘Factors Underlying Historical Growth in Health Care Spending

The large increase in health care spending over the past several decades was caused by many factors, and accounting precisely for all of them is difficult. Nonetheless, the general consensus among health economists is that growth in real spending on health care was principally the result of the emergence of new medical technologies and services and their adoption and widespread diffusion by the U.S. health care system.

Wow–The director of the Congressional Budget Office say’s we have a national “Technology” problem driving this terrible healthcare inflation! I wonder if one of his stated factors being difficult to account for is “Chronic Disease”? After all, it would be pretty difficult for an employer plan sponsor, or consultant to impact diffusing levels of medical technology and services throughout the provider community?

Maybe I’m a simple thinker but isn’t costly technology utilized by people who have diseases? I can’t remember my 20-year-old son needing sophisticated medical technology. He does go to the dermatologist every other year, though. See, this is why our national healthcare debate is so confusing. We have CBO Director Orszag testifying before Congress on the subject of health care reform. If not sleeping, the average congressional member is hearing the cause of trend/ inflation is all about medical technology complexity, while he/she can barely turn on a laptop computer. All this expertise then gets condensed into a 2100 page bill affecting 25% of our national economy for the next 15 years.

I do believe much of the  information published by the CDC. The CDC states 75% plus of our national $2.5 trillion healthcare expenditures are the result of treating chronic disease. Now, if medical plan managers can obtain actionable clinical data pertaining to the precursors of chronic disease, doesn’t it make sense that strategies exist to mitigate chronic disease? Per population, 15% of members account for 85% plus of all plan assets/healthcare claims. 15/100. What if incentives and medical management nurses are able to influence 4 of the 15 into not falling off the cliff into a chronic disease state? To quote one of the top-gun consultant’s healthcare report, “Employers performing at trend levels beneath the national average are doing creative things”. In fact, as of 2010, some employers are experiencing a zero increase between plan years 2008 and 2009.

With all due respect to Mr. Orzag I’m going to concentrate on strategies helping prevent/mitigate chronic disease and let IT professionals handle the technology.

Discounts–We Don’t Know What We Don’t Know February 4, 2010

Posted by medvision in Healthcare Costs, Uncategorized.
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Here’s a real brain teaser in the consulting and employer health plan sponsor community. Which MCO/administrator provides the best discounts from providers? Everyone sells the value of their company based predominantly on their great discounts. In each market area literally hundreds of providers are included in network. The following are a few of the traps set:

Ask any carrier or network provider what their discounts are based upon? Answer, typically some percentage above Medicare reimbursement. 98% of the decision-makers and consultants have no source of independent plan data and must rely solely on rearview mirror data, benchmarking and data provided by the entity being asked the questions. Hint, this is a bad start. So– then we ask the vendor to reprice proprietary list of procedures by CPT codes. “‘Drown me des ez deep es you please, Brer Fox,” sez Brer Rabbit, sezee, ‘but do don’t fling me in dat brier-patch, ‘ sezee.

Now, let’s pretend we are the national carrier and let’s respond to the first CDT code/procedure reprice, MRI of the brain without dye. Within our network we have 4 major hospital systems all with extensive outpatient radiological centers. Additionally, within the network we have freestanding facilities non-affiliated with hospitals. We know physicians clustered around hospitals utilize outpatient hospital radiological services and a small percentage of services are provided by freestanding facilities. Which facility price will we list as the price for MRI brain without dye? Freestanding radiological facility $250 or hospital outpatient radiological facility $700? 80% of members utilize hospital outpatient.

See what happens? We’ve given the contestants the ability to price by the lowest price in the network even though the majority of members utilize higher cost facilities. If the decision-makers cannot access independent data the exercise of repricing claims it is fruitless. It’s tantamount to give a child an open book test, allowing him or her to score the test, throw the paper away and then tell the teacher what their grade is.

Now, back to that trend question. During our great national healthcare debate a lot of emphasis was placed on a reduction in Medicare provider reimbursements. Healthcare cost is comprised of two areas: (1) unit cost or cost per procedure and (2) cost from utilization, the number of procedures. Maybe most people don’t know that the unit cost/procedure cost Medicare reimbursements have remained relatively flat over the past 10 or so years. That’s why we hear such bitter complaining from physicians, much of which is justified. Here’s the $64 question: if the unit cost/cost per procedure has remained flat and managed care companies network discounts are based upon some percentage of Medicare procedure reimbursements, then Why has trend/healthcare inflation increased year after year in a range of 7% to 13%? Could the answer be solely based upon increasing utilization? If so, someone is doing a terrible job with respect to wellness, prescription drug therapy compliance, disease management and quality coordinated critical care.

Hmm: maybe the CDC knows of what it speaks when it outlines 75% plus of our national healthcare expenditures are utilized to treat chronic disease. Then, this subject is about treating chronic disease? http://tinyurl.com/ycvpw4x

Danger-Wil Robinson February 3, 2010

Posted by medvision in Healthcare Costs.
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Forbes discusses Healthcare’s new hidden danger:http://tinyurl.com/ybsn9y8

Rules authored by The 3 Stooges. The answer suggested, state portability and high deductible plan designs, won’t cut it either. The simple fact is as follows: 1% of the sickest members spend 25% through 30% of total plan assets. The next 4% spend an additional 25% through 30%. 85% of members spend under $500 per year. A very small percentage of individuals push the vast majority of plan costs. It doesn’t matter members pay cash for simple physician visits and vaccines. These small expenses make up a very small percentage of overall costs. From a financial basis there is no justification for the wide variance in premiums between low deductible and high deductible plans.

Over time, insurance companies, even across state lines,  will back away from competition to obtain money-losing clients. Only our government is attracted by money-losing. One patient fighting breast cancer spending $200,000 per year is equivalent of 400 members spending, in the 85% category, a mere  $500 dollars/year. On a total population basis, high deductible plans are the equivalent of improvised disease bombs. They dis-incent low-cost preventative services which in turn incentivize the creation of high cost staggering disease. Not to start war, they are very appropriate when coupled with HSAs for professionals seeking a vehicle for long-term planning.

Somehow our system must actually provide integrated care to members starting with: Wellness, Rx Therapy Compliance, Disease Management and Coordinated Critical Care (emphasizing correct diagnosis and evidence based medicine).

Medicare Part D–Rx Coverage for seniors February 2, 2010

Posted by medvision in Rx Costs, Uncategorized.
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Concerning the national healthcare debate, I heard one of the Republican Senators mention Medicare Part D coverage passed unfunded. He was implying Rx benefits are a luxury item. The government pays virtually 100% for expenses incurred in-hospital. Prior to Medicare Part D, seniors  had to fund prescription medications out-of-pocket. It follows individuals failed to take necessary medications due to the inability to pay.

Prescription drug adherence  prevents and mitigates disease, hospitalization, disability and death. Non-compliance means advanced disease, additional hospitalizations, more disability and death.  I am a strong proponent of health plans providing easy, inexpensive access to clinically important drugs. For example, a member with cardiovascular issues may need to take an anticoagulant to prevent a stroke. Which scenario cost less? (1) The health plan provides an anticoagulant to a member who is compliant and prevents a stroke, or (2)  The health plan decides to save the drug cost, $100 per month, the member cannot afford purchase the drug, has a stroke and is hospitalized for 14 days in intensive care?

This scenario is played out throughout the country when health plans place high copayments/deductibles on clinically critical prescription medications.

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