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Health Policy

Blue Cross Blue Shield Plan May Reduce Health Care Expenses

Finding ways to cut rising healthcare costs has become a national priority, especially as an influx of newly insured members will be integrated into the industry in the coming years. It’s no surprise then that the Blue Cross Blue Shield Association (BCBSA) implemented the Alternative Quality Contract, a program that promotes quality care in order to cut costs in the healthcare industry.

In a recent study published in the journal of  Health Affairs by Chernew, Mechanic, Landon, and Safran, the BCBS of Massachusetts program found that the 4,800 doctors working with the alternative quality contract spent “3.3 percent less in 2010 (the second year of the program), compared to non-participating doctors, amounting to a $107 savings per patient. Some doctors spent almost 10 percent less than their counterparts operating under fee-for-service contracts,” reported The Boston Globe.

Physicians in the program are rewarded for cutting cost and reducing waste while providing quality care. The study showed that “the Blue Cross monitors quality indicators, such as whether doctors control patients’ blood pressure, provide regular check-ups to children, and prescribe appropriate and timely medications for depression. Compared to the control group, doctors with the alternative contract improved care for chronically ill adults and preventive care for both adults and children more quickly, the researchers found.”

The study suggests that global budgets with pay-for-performance can begin to control medical spending while improving quality of care. The Affordable Care Act uses a similar budget payment program for Medicare providers, and Massachusetts lawmakers are pushing the same strategy in legislation they plan to finalize this month.

“If these results and improvements continue, the health care system can be put on a sustainable path,” said Michael Chernew, the senior author of the study. Chernew noted that the findings about the quality of care in the AQC may not be conclusive because “quality measurement is an evolving field.” But BCBS is hopeful. Read More…

So while this type of innovative thinking is exciting news if it continues to produce cost-effective results, to what extent is it realistic? What other efforts are being made by private sectors to thwart rising health care costs?
Join the conversation! #MCNTalk

5 Reasons Why Health Care Costs Continue to Rise

In 2011, the U.S. spent $2.7 trillion in health expenditures and while we can all agree that the rise in costs must be controlled, there is much dispute over the driving factors.  According to a recent CNN article and Kaiser EDU, here are the top 10 reasons health care costs are on the rise:

Source: Martin A.B. et al., “Growth In US Health Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was Unchanged from 2009,” Health Affairs, 2012.

1. Hospital care: The U.S. spends approximately 31% in hospital care annually- that’s approximately $837 billion.

2. Doctor visits/Clinical services: according to the American Medical Association, the cost of physician care, both to insurance and patients has risen 1.3% during the past year

3. Technology and prescription drugs– For several years, spending on prescription drugs and new medical technologies has been cited as a primary contributor to the increase in overall health spending; however, in recent years, the rate of spending on prescription drugs has decelerated.  Nonetheless, some analysts state that the availability of more expensive, state-of-the-art medical technologies and drugs fuels health care spending for development costs and because they generate demand for more intense, costly services even if they are not necessarily cost-effective. New technologies, such as robotic surgery, are growing rapidly. More than 36% of hospitals already perform robotic surgery, according to a report from  Pricewaterhouse Coopers Health Research Institute.

4. Rise in chronic diseases – according to Kaiser EDU’s Issue Module on U.S. Health Care Costs, “Longer life spans and greater prevalence of chronic illnesses has placed tremendous demands on the health care system.  It is estimated that health care costs for chronic disease treatment account for over 75% of national health expenditures. In particular, there has been tremendous focus on the rise in rates of overweight and obesity and their contribution to chronic illnesses and health care spending.  The changing nature of illness has sparked a renewed interest in the possible role for prevention to help control costs.”

5. Administrative costs – The module also shows that at least 7% of health care expenditures are estimated to go toward for the administrative costs of government health care programs and the net cost of private insurance (e.g. administrative costs, reserves, taxes, profits/losses). Some argue that the mixed public-private system creates overhead costs and large profits that are fueling health care spending.

Will the Affordable Care Act change this growing cost in the foreseeable future?

What alternatives must our nation implement in order to stop this trillion-dollar expense?

Insurance Mandates: Part of Our Societal Fabric

by Brian L. Grant, MD

Obama’s Affordable Care Act has been the focus of many heated debates and opinions lately. Business Week’s article “The Case for Way More Mandates” neatly places health care into the realm of the various mandates that we have come to naturally accept as a society; protecting ourselves from ourselves as it were. We have decided we need to force savings on those who work via social security and require in many states, that drivers have insurance to protect potential victims of their driving errors. Health care is not a risk that individuals are (rarely)capable or willing to bear independently, shifting the burden when the uninsured fall ill, to the public or other insurance ratepayers.

So until hospital doors are barred to those without insurance or cash in hand, such will be the case. Adding to the complexity is the reality of shared risk; one can’t have affordable insurance if only the sick buy coverage. The author of the article Peter Coy said it well: “The point of a mandate isn’t only to protect people from the consequences of going unprotected; it’s also to prevent the rest of us from having to pick up the tab.”

The current and proposed systems fail on at least one level; the lack of any financial incentive by those with substantial coverage to curb their unhealthy or unsafe behaviors, as well as the lack of incentive to consume health care wisely. Professors Howard Kunreuther and Mark Pauly from the University of Pennsylvania’s Wharton School said: “One flaw in the Affordable Care Act is that by prohibiting insurers from taking health risks into account in setting rates, it gives people no incentive to lower their premiums by losing weight or quitting smoking.”

So until hospital doors are barred to those without insurance or cash in hand, such will be the case. Adding to the complexity is the reality of shared risk; one can’t have affordable insurance if only the sick buy coverage. The author of the article Peter Coy said it well: “The point of a mandate isn’t only to protect people from the consequences of going unprotected; it’s also to prevent the rest of us from having to pick up the tab.” Read more…

Getting Lost in the Labyrinth of Medical Bills

Imagine you went to the local market for food for your family. But this market has no prices on the food and you have no history of knowing or understanding such prices as they have never been posted.

You get to the checkout and are presented with a bill for $1000.00 the basket of goods – a basket that today you might pay $200.00 for in a competitive shopping environment.  The bill has a total amount with no breakdown. So you don’t know if the soup is more than the bread and by how much.

Imagine there are other people in line with you who bought the exact same basket. One is charged $2000.00, one $600.00 and one $1400.00. As others pass through the line with the same basket that day, each is billed differently.

When you learn about this issue, you call the manager and ask why. You are first asked why do you ask, since your food insurance is covering it? But you press on and are told that each food insurance company has cut a different deal with the market. And that the shopper charged $2000.00 has the misfortune of having no food insurance at all, so she will have to pay the entire amount out of her own pocket.

And by the way, you don’t get to choose your food. You went to the market hungry and they decided which food was best for you. But different “doctors” decided differently for the same level and quality of hunger, some influenced by the food literature and others selecting foods that they had been marketed by food sales professionals who visited their offices and sponsored expensive advertisements and “studies.” And the doctors are paid by the amount of food prescribed, so they are incented to overfeed you. The conservative doctor who gives you only the food you truly need, is paid less than his colleagues who overfeed.

In essence, this describes in part the irrational and unsustainable state of health care economics and payments as described in this New York Times article.

What kind of system can or should survive such irrationality. It would seem that true price transparency, where patients can understand and by mindful of price, and have some incentive to do so, or price controls by a central authority (the Government?) are two options that would have a chance of improving this irrational status quo. Whether patients are capable or willing to shop for care wisely and make good choices combining quality and price is a questionable proposition given the complexities of health care. Whether doctors and hospitals are capable or willing to consistently provide rational treatment based upon best practices and cost is certainly not in evidence. And whether payers and society are willing to voluntarily change a system to one with transparency and cost consistently is certainly questionable based upon current practices. Read more…

American Pain: The Largest U.S. Pill Mill’s Rise and Fall

This article in Bloomberg Businessweek puts a human face on the opioid crisis – an interview with one of the owners of the largest Florida “pill mill” provider of prescription versions of Oxycontin. Now in jail, Christopher George provides some insight into how pill mills work and just how DEA regulations work and don’t work.

It’s a horrendous problem for society (according to the Centers for Disease Control and Prevention, 14,800 Americans died from overdosing on opioids in 2008, the most recent year data is available—more than the number of deaths from heroin or cocaine), as we’ve frequently noted at MCNtalk in the past. There were 335 million prescriptions for painkillers written in 2011. Is it any wonder some of them were from criminals? Read more…

The Economic Necessity of Universal Health Care

Two interesting reads: an article in the Boston Globe and an editorial in the Seattle Times.

Our health care system is broken. Excess and escalating costs are unsustainable, uncovered individuals are being paid for by the rest of us, and the beat goes on. The new normal is our abnormal, perverse and out of control system. Care is all too often driven by factors other than best practices and rational use of resources.

Employers have somehow found themselves being responsible for paying for health care. Regardless of the historical antecedents to this reality, it lacks rationality. Employers do not directly pay for food, housing or education for their employees and their families – all equally essential to society. Why is healthcare alone an employer mandate? Why do we ignore what works elsewhere, or at least offers some interesting tradeoffs, when it is not invented here?

 One can reasonably argue about the best solution, but one is hard-pressed to claim that our current system is viable for any constituency on the mid-and longer term.

 Change is inevitable and overdue. One day we will look back on our times and wonder what were they thinking!

Painkillers May Delay a Return to Work

At MCN talk we frequently blog about the opioid problem nationwide. Here’s a good reason why we do so: as per this article in The New York Times, the way that certain types of pain killers such as Oxycontin are prescribed for specific injury types may actually delay a return to work.

It’s important to establish that there is little question that strong pain medications can help some patients return to work and remain productive.  The ability to return to work is a major event in a person’s life—this is not about a perception of “slacking off” (i.e. the injured party is just malingering and really ought not to be a drain on someone else’s dime) but rather it’s a sign of improved health and functionality. Returning to work is an important step for a person in returning to their pre-injury life. Pain medication is meant to aid in reaching that step in the recovery process, not hinder it. So what’s going on?

Workplace insurers spend an estimated $1.4 billion annually on narcotic painkillers, or opioids. But they are also finding that the medications, if used too early in treatment, too frequently or for too long, can drive up associated disability payouts and medical expenses by delaying an employee’s return to work.

Workers who received high doses of opioid painkillers to treat injuries like back strain stayed out of work three times longer than those with similar injuries who took lower doses, a 2008 study of claims by the California Workers Compensation Institute found. When medical care and disability payments are combined, the cost of a workplace injury is nine times higher when a strong narcotic like OxyContin is used than when a narcotic is not used, according to a 2010 analysis by Accident Fund Holdings, an insurer that operates in 18 states. Read more…

Trimming a Fat City

What about my right to Big Gulps? A prohibition New York Mayor Michael Bloomberg wants to implement – if it survives the fury he has whipped up and gets approval (which is expected) from a city health panel – is on the sale of sugary soft drinks above 16 ounces in restaurants, movie theaters and other places where a person is buying an individual serving, not an amount to be shared.

This Op-Ed piece in the New York Times reviews many down sides (it’s not an effective measure but rather a futile gesture; there’s worry over  encroaching upon personal liberties to name a few) but ultimately supports the measure: “Food ceased to be ‘a frontier too far’ when the fraction of American adults who qualify as obese climbed above one in three.” Read more…

The Release of the D.S.M – 5

The coming months will see the release of the D.S.M – 5. This 5th edition of the diagnostic and statistical manual is getting lots of news. Originally a useful tool for mental health professionals, allowing us to agree on who may or may not warrant a particular diagnosis, the manual has been co-opted and hijacked by many others for a variety of less noble purposes. We have attached two of many articles appearing in recent months. More will certainly come.

The hazards and dangers of the D.S.M are many. A main theme includes the medicalization and pathologizing of normal life. Grieve a loved one: Bereavement disorder. A bit strange? Autistic Spectrum Disorder; Crave Food or Alcohol: Addiction disorder; Easily Distracted: Attention Deficit Disorder. The list goes on. To the degree labels help treat problems they can be useful. To the degree that they confer entitlements, exculpation of responsibility, mandated health benefits, employment accommodation, legal responsibility or lack of responsibility – the benefits are far less clear and capacity for mischief and abuse quite evident.

 The following cautionary statement appears in the preface of the D.S.M. – 4: (emphasis added)

 Cautionary Statement
The specified diagnostic criteria for each mental disorder are offered as guidelines for making diagnoses, because it has been demonstrated that the use of such criteria enhances agreement among clinicians and investigators. The proper use of these criteria requires specialized clinical training that provides both a body of knowledge and clinical skills.

These diagnostic criteria and the DSM-IV Classification of mental disorders reflect a consensus of current formulations of evolving knowledge in our field. They do not encompass, however, all the conditions for which people may be treated or that may be appropriate topics for research efforts.

The purpose of DSM-IV is to provide clear descriptions of diagnostic categories in order to enable clinicians and investigators to diagnose, communicate about, study, and treat people with various mental disorders. It is to be understood that inclusion here, for clinical and research purposes, of a diagnostic category such as Pathological Gambling or does not imply that the condition meets legal or other non-medical criteria for what constitutes mental disease, mental disorder, or mental disability. The clinical and scientific considerations involved in categorization of these conditions as mental disorders may not be wholly relevant to legal judgments, for example, that take into account such issues as individual responsibility, determination, and competency.

Hopefully this statement or similar variant will remain in the upcoming edition. We should add: “Insurance coverage, employment and school accommodation, and denial or impact of individual choice or responsibility.

Psychiatry is not the only specialty guilty of misrepresenting science for politics, social justice and economic self-interest. But I fear we may be about to outperform in this capacity to the degree we use diagnoses to define not true disease, but normal human experience and variations. And to the degree others coattail on these diagnoses for goals other than improving emotional and mental states.

Tracing the Path of Jewish Medical Pioneers

There’s an interesting article in The New York Times this week about an exhibit at Yeshiva University Museum in Manhattan, “Trail of the Magic Bullet: The Jewish Encounter With Modern Medicine, 1860-1960.” The exhibition offers a rare look at a topic few patients ever stop to consider: the emergence of European and American Jews as innovators in medicine, despite their status as outsiders frequently scorned by the medical establishment.

While some religions place ultimate responsibility for healing in divine hands, “Jews don’t see a conflict between faith and medicine,” said Alan M. Kraut, a professor of history at American University who helped put together the exhibition and has written extensively about immigration and health. Read more…