Monday, June 11, 2018

‘More independent rural hospitals will seek some type of affiliation with a larger hospital.’

More than 40% of the country’s rural hospitals that have been operating in the red as they try to manage care for a declining population that is often older, sicker and poorer than their urban counterparts.

The city of Greenville, Ala., purchased L.V. Stabler Memorial Hospital in November 2017, but it needed help from the community and the University of Alabama Birmingham to keep it open.
Quorum Health sold the 74-bed facility for a discounted price of $2.8 million. The move restored local decision-making, said Greenville Mayor Dexter McClendon, who also chairs the hospital’s board of trustees.

Residents of Greenville, population 8,100, voted to support a half-cent sales tax increase that helped pay for the loan used to buy the hospital and will provide the community hospital $825,000 a year through 2032. Still, L.V. Stabler needs a major restructuring to rectify its $2.5 million operating loss in 2017, stemming from declining admissions and growing expenses.

Partnering with the University of Alabama Birmingham was like landing a five-star recruit, McClendon said.

“Without UAB and the sales tax, we would’ve closed,” he said.

L.V. Stabler could be the poster child for many rural hospitals—44% of rural facilities across the nation are operating in the red as they try to manage care for a shrinking population that is often older, sicker and poorer than their urban counterparts, according to analysis from the Chartis Center for Rural Health.

Independent government-owned hospitals, many of which are in rural areas, had an average annual operating margin of negative 16.6% and a $15.8 million operating loss in 2016 compared with a negative 7.9% operating margin and $8.4 million operating loss for their system-owned peers, according to a white paper from Healthcare Management Partners, Waller Lansden Dortch & Davis, and Taggart, Rimes & Graham that analyzed more than 70,000 Medicare cost reports. Those in the mid-South region—Alabama, Arkansas, Mississippi, Tennessee and Texas—are far worse, reporting a negative 41.9% operating margin and a $26.6 million operating loss.

Independent critical-access hospitals in the mid-South, which have fewer than 25 beds and are at least 35 miles away from another hospital, averaged a negative 20.3% operating margin and a $3 million operating loss.
“Southern states with a higher share of the aging population combined with lower incomes—that’s where you see more chronic cases of obesity and lifestyle challenges,” said Bret Schroeder, partner of PA Consulting Group. “Providers in these rural communities experience the most pain.”
More than 70% of all government-owned hospitals reported an operating loss in 2015 and 2016, researchers found.

Government ownership requires a level of public accountability and scrutiny that often set hospitals’ even further back, the white paper said. Reimbursement levels also favor urban and system-owned hospitals. Bundled purchases, centralized administrative functions and access to better technology help system-owned hospitals drive costs down, one of the most valuable metrics in the industry’s changing payment paradigm.

Left out

The situation is magnified in states that did not expand Medicaid coverage, like Alabama.
Rural hospitals in those states had higher rates of uncompensated care as a percentage of revenue than hospitals in expansion states, according to a 2015 study published in Health Affairs.

“It’s a heck of a challenge keeping a hospital open in a town of 8,100, especially when our governor did not take the Medicaid money,” McClendon said. “For a county like us, it almost shot our legs out from under us and nearly made it impossible.”

Payers compound the problem, said Farrell Turner, president-elect of the Alabama Rural Health Association. They often will perform an internal audit and take back money that was doled out two years ago, he said.

“Payers are just beating us up,” Turner said. “Payers are constantly changing the rules and small rural hospitals, physicians and clinics in those communities don’t have a lot of resources to stay up to date.”

Twelve hospitals in the state have closed since 2011, six were in rural areas, according to the Alabama Hospital Association. The median rural hospital in Alabama operated at a negative 12.2% margin in 2016 and 88% were losing money. Charitable donations dropped by a quarter. Nearly two-thirds reported an increase in uninsured patients while nearly half reported an increase in Medicaid beneficiaries. Nearly three-quarters experienced a increase in emergency department visits. Half reported a drop in inpatient admissions.

“Access to care in the Black Belt of Alabama is already lacking; we can’t afford to lose anything more,” said Danne Howard, the hospital association’s chief policy officer.

Without the right partnerships in place, maintaining a rural hospital is often a losing battle.

UAB started to partner with rural hospitals about eight years ago as a way to protect referral sources, but it has evolved into much more, said Don Lilly, senior vice president of clinical network development and director at UAB Health System.

The largest health system in the state partners with medical providers in Anniston, Alexander City, Bessemer, Camden, Demopolis, Florence, Greenville, Mobile and Montgomery.

UAB recently purchased property in Hoover that will be converted into a 39,000-square-foot medical facility to house primary care, OB/GYN, oral surgery and other specialties.

The university system also operates neighborhood clinics in Hoover, Leeds, Inverness and Gardendale, where a free-standing ED and medical office are under construction.

It also has 40 physicians planted in different markets around the state. In addition to a telestroke program it recently rolled out in Demopolis, it has a teleradiology service that 18 hospitals use and a cancer network with 12 centers in Alabama and surrounding states.

“Rural hospitals’ survival and their ultimate effectiveness benefit everybody, including payers,” Lilly said. “Keeping patients in local markets and out of higher-end tertiary facilities saves money and improves quality.”

UAB Hospital’s 1,157 beds have been nearly full for two years, he added.

The health system is working with local jurisdictions to recruit family medicine doctors to boost primary care, pre-natal, and labor and delivery services in Alabama.

The 99-bed Bryan Whitfield Hospital in Demopolis—a town with a population of 8,000 about 60 miles south of Tuscaloosa—staffs about 57 beds and runs at around 60% occupancy. The hospital closed its labor and delivery unit in 2014.

About 45% of rural communities do not have a hospital with dedicated maternity care. Nearly 1 in 10 rural counties lost their hospital-based obstetrics programs from 2004 to 2014, according to research published in Health Affairs in September.

“I understand first and foremost that not every county in every state can have a hospital—the financial challenges we face are astronomical,” said Arthur Evans, CEO of Bryan Whitfield Hospital. “Given that however, each county has to assess what their healthcare needs are, whether they require a hospital, an emergency room, ambulatory or other services.”

One of main issues is that Alabama has the lowest Medicare reimbursement rates in the country, Howard said. Alabama hospitals are reimbursed significantly below the national average, primarily due to a formula implemented in the 1980s known as the Medicare wage index that weights other states like California higher based in part on cost of living, according to the Alabama Hospital Association.

“That’s why rural hospitals can’t make capital equipment purchases, they have to freeze wages, eliminate service lines and stop delivering babies,” Howard said. “They are looking into telemedicine and mergers, but the fact is without adequate reimbursement, rural hospitals aren’t appealing to larger systems.”

That’s partly why UAB is driving change on the legislative front, university executives said.

Bill of health

UAB lobbied for state legislation that would create a resource center for rural hospitals.

To be housed at UAB, the center would help fund rural public hospitals in Alabama improve revenue cycle, purchasing and supply chain functions, strategic planning, insurance and cost reporting, coding, recruitment, and compliance. It would also provide funding for administrative residents to work in rural hospitals. Signed into law in March, the program has not yet been funded.

It’s also proposing legislation that would implement a global budgeting model for rural hospitals. A board would perform a needs assessment for each community, which would shape a statewide budget. Local, regional and state authorities would agree on specific amount of revenue for the upcoming fiscal year, regardless of the volume of services. The bill was shelved in April, but Alabama has been selected as one of five states to participate in a state policy academy on global budgeting for rural hospitals.

“They wouldn’t have to worry about doing what they can to keep the doors open, they would be able to do what’s right,” said Will Ferniany, CEO of UAB Health System.

It creates true statewide health planning in areas that don’t have a collective measurement of what services are needed or redundant, Lilly said.

UAB will try to work out the kinks in a pilot program that will test the global budgeting model in two to three areas of the state.

“It takes away the financial risk,” Lilly said.

UAB will continue to build out its telemedicine network. Bryan Whitfield Hospital launched a telemedicine-equipped stroke center in late April with the help of UAB.

“Telehealth is something that will push us to next level," Evans said. "Transportation is a major issue all the time. We can do these services cheaper here than in an urban facility, which may be overburdened, and patients are happier seeing their local doctors.”

Staying connected

Providers are using telemedicine to not only increase access to specialists, but also train physicians in rural areas.

MD Anderson Cancer Center in Houston teamed up with providers in the Rio Grande Valley in Texas to identify the early stages of cervical cancer. MD Anderson uses Project ECHO’s (Extension for Community Healthcare Outcomes) telehealth technology to mentor non-gynecology doctors and discuss their de-identified cases.

Since the program’s implementation four years ago, the cancer center has helped screen more than 16,000 women and perform 200 procedures to eliminate early-stage cervical cancer.

“We teach local providers who aren’t specialists to do specialty care, which is critical because Texas has some of the highest rates of cervix cancer in the country,” said Dr. Kathleen Schmeler, an associate professor at MD Anderson.

Specialists from MD Anderson, the University of Texas Medical Branch and the University of Texas Rio Grande Valley coordinate virtual visits with rural providers in the Rio Grande Valley twice a month. The 1-hour sessions include a 15-minute didactic so they can get continuing medical education credits, which are tough to secure in rural areas, Schmeler said.

It also offers some hands-on training courses to teach colposcopies, cervical biopsies and loop electrosurgical excisions with providers in Harlingen, Laredo and Sherman.

“We need to help increase access, which is a problem in these underserved areas,” Schmeler said.

“They need to get screened locally with a nurse they trust rather than traveling to Houston.”

Many won’t travel at all because they are undocumented, she added.

The cancer center also helped the University of Texas start a school-based HPV vaccination pilot program in Rio Grande City to help prevent cervical cancer.

“We need to demonopolize and democratize knowledge and get it out of an academic medical center and get it to communities that need the support and can share specialty knowledge,” Schmeler said.

St. Louis-based Mercy health system implemented a telehospitalist program that’s eased the workload of physicians in rural hospitals, said Diana Smalley, regional president of west communities for Mercy.

Hospitalists in Mercy’s urban markets assist rural medical teams with 24/7 backup and video consultation, allowing physicians to maintain a better work-life balance, Smalley said.

Specialists are notoriously hard to attract and keep in rural communities. But if they are, through debt forgiveness incentive programs for instance, they’re often retained on a temporary basis, which can be costly.

“If we can become less dependent on specialty services in rural markets and focus on primary care and emergent services for diagnosis and initial treatment, we are all better off in the long run,” Smalley said.
Mercy created a community paramedic program in Ada, Okla., where practitioners travel to the homes of about 1,000 emergency department “frequent fliers” and enroll them in a virtual care program. They identify what consumers need in their homes to improve their health and provide them with an iPad and other tools to monitor their blood pressure, glucose levels and other vitals.

In one case, a man kept coming to one of Mercy’s rural EDs because he had trouble breathing. One of the nurses overheard him saying that he was so uncomfortable lying flat to sleep, but didn’t have enough money for an adjustable bed.

Mercy paid for a reclining bed and his number of ED appearances dropped dramatically, Smalley said.

But without the backing of a bigger system, more hospitals, both urban and rural, will inevitably close their doors as demand for inpatient care decreases along with length of stay, Smalley said. It’s a natural byproduct of preventive care, she said.

“I think the overall the state of rural healthcare is somewhat precarious,” Smalley said. “These hospitals are somewhat isolated from a larger healthcare system, so there is not a consistent approach on how to deal with some of the challenges they are facing. More independent rural hospitals will seek some type of affiliation with a larger hospital.”

Team effort

Pharmacists are also helping fill the healthcare services void in rural areas.

Deines Pharmacy in Beatrice, Neb., operates in a town of about 12,000 people 40 miles south of Lincoln, alongside one of the larger critical-access hospitals in the country, Beatrice Community Hospital.

The pharmacy resembles an urgent-care clinic, which Beatrice lacks. Deines Pharmacy has done more strep throat, flu, cholesterol and other point-of-care testing to keep people out of the ED, which aligns with payers’ push to deliver care in lower-cost settings.

People typicaly see their primary-care providers about three times a year while they visit their pharmacy 35 times a year, said Mitch Deines, co-owner of the pharmacy.

“They trust us,” said Deines, who also serves on the Beatrice Community Hospital board. “We are accessible. Then we need to form a closer partnership with the physicians, which improves care.”
Previously, hospitals would get defensive when pharmacies would encroach on their turf and potential reimbursement, Deines said. Now, with the focus on preventive medicine, hospitals champion and promote these types of programs, he said. That shift is taking place across the healthcare industry.

Deines Pharmacy is part of a national clinically integrated network of pharmacists that started in North Carolina. The Community Pharmacy Enhanced Services Network works with insurers to identify ways to better coordinate care for consumers with chronic conditions.

The pharmacy also participates in a pharmacist e-care plan through a pilot project with the Centers for Disease Control and Prevention. Every time pharmacists give a flu shot, they send that data to a statewide network that is integrated with electronic health records, helping to reduce unnecessary care, Deines said.

“We have to close that loop somehow,” he said. “It’s a thought shift for providers. As things get tougher, physicians are looking at us as part of the team.”

The Alabama Hospital Association is also working with Blue Cross and Blue Shield of Alabama to reimburse rural hospitals for imaging and diagnostic services at the same rate as outpatient facilities. While it’s a discounted rate, that could increase access and provide some business for rural providers, Howard said.

Engagement

As for L.V. Stabler Hospital in Greenville, Ala., more changes are coming.

Administrators will probably change the name of the hospital to mark a fresh start, McClendon said.
McClendon hosts a radio show after each city council meeting to keep Greenville residents informed. He also speaks at chamber of commerce events.

Public officials and healthcare executives have a responsibility to keep a running dialogue with the community, McClendon said.

“We do not need to try to be everything to everyone,” he said. “We need to figure out what you need to do that fits our community.”

Editors: Matthew Weinstock, Paul Barr and Aurora Aguilar | Copy editors: David May and Julie A. Johnson | Joanne Kim contributed to this project

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Wednesday, May 16, 2018

Medical Mystery: Something Happened to U.S. Health Spending After 1980

The spending began soaring beyond that of other advanced nations, but without the same benefits in life expectancy.

The United States devotes a lot more of its economic resources to health care than any other nation, and yet its health care outcomes aren’t better for it

That hasn’t always been the case. America was in the realm of other countries in per-capita health spending through about 1980. Then it diverged.

It’s the same story with health spending as a fraction of gross domestic product. Likewise, life expectancy. In 1980, the U.S. was right in the middle of the pack of peer nations in life expectancy at birth. But by the mid-2000s, we were at the bottom of the pack.


Health spending and life expectancy are not necessarily closely related, so it’s helpful to consider them separately. 
“Medical care is one of the less important determinants of life expectancy,” said Joseph Newhouse, a health economist at Harvard. “Socioeconomic status and other social factors exert larger influences on longevity.”

For spending, many experts point to differences in public policy on health care financing. “Other countries have been able to put limits on health care prices and spending” with government policies, said Paul Starr, professor of sociology and public affairs at Princeton. The United States has relied more on market forces, which have been less effective. 

“Confronted with fiscal pressures, as the share of G.D.P. absorbed by health care spending began to get serious, other nations had mechanisms to hold down spending,” said Henry Aaron, a health economist with the Brookings Institution. “We didn’t.”

One result: Prices for health care goods and services are much higher in the United States. Gerard Anderson, a professor at Johns Hopkins and a lead author of a Health Affairs study on the subject, emphasized this point. “The differential between what the U.S. and other industrialized countries pay for prescriptions and for hospital and physician services continues to widen over time,” he said. Other studies also support this idea. However, by some measures, growth in the amount of health care consumed has also been a factor. 

The degree of competition, or lack thereof, in the American health system plays a role. A recent study by economists at the University of Miami found that periods of rapid growth in U.S. health care spending coincide with rapid growth in markups of health care prices. This is what one would expect in markets with low levels of competition.

Although American health care markets are highly consolidated, which contributes to higher prices, there are also enough players to impose administrative drag. Rising administrative costs — like billing and price negotiations across many insurers — may also explain part of the problem. 

The additional costs associated with many insurers, each requiring different billing documentation, adds inefficiency, according to the Harvard health economist David Cutler. According to a recent study, the United States has higher health care administrative costs than other wealthy countries.
“We have big pharma vs. big insurance vs. big hospital networks, and the patient and employers and also the government end up paying the bills,” said Janet Currie, a Princeton health economist. 

Though we have some large public health care programs, they are not able to keep a lid on prices. Medicare, for example, is forbidden to negotiate as a whole for drug prices, as Ms. Currie pointed out.

But none of this explains the timing of the spending divergence. Why did it start around 1980?
Mr. Starr suggests that the high inflation of the late 1970s contributed to growth in health care
spending, which other countries had more systems in place to control. Likewise, Mr. Cutler points to related economic events before 1980 as contributing factors. The oil price shocks of the 1970s hurt economic growth, straining countries’ ability to afford health care. “Thus, all across the world, one sees constraints on payment, technology, etc., in the 1970s and 1980s,” he said. The United States is not different in kind, only degree; our constraints were weaker. 

Later on, once those spending constraints eased, “suppliers of medical inputs marketed very costly technological innovations with gusto,” Mr. Aaron said. They “found ready customers in hospitals, medical practices and other entities eager to keep up with rivals in the medical arms race.”

The last third of the 20th century or so was a fertile time for expensive health care innovation. Sherry Glied, an economist and a dean at New York University, offered a few examples: “Coronary artery bypass grafting took off in the mid-to late 1970s. Later, we saw innovations like drug treatments for H.I.V. and premature babies.” 

These are all highly valuable, but they came at very high prices. This willingness to pay more has in turn made the United States an attractive market for innovation in health care.

 
Yet being an engine for innovation doesn’t necessarily translate into better outcomes. Almost no matter how it’s measured, longevity in the United States has not kept pace with that of other nations. Again, the inflection point is around 1980. Why?

A study examining the period 1975 to 2005 by Ms. Glied and Peter Muennig, from Columbia, suggests that international differences in rates of smoking, obesity, traffic accidents and homicides cannot explain why Americans tend to die younger. 

Some have speculated that slower American life expectancy improvements are a result of a more diverse population. But Ms. Glied and Mr. Muennig found that life expectancy growth has been higher in minority groups in the United States. Another study, published in JAMA, found that even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries.

The lack of universal health coverage and less safety net support for low-income populations could have something to do with it, Ms. Glied speculated. “The most efficient way to improve population health is to focus on those at the bottom,” she said. “But we don’t do as much for them as other countries.” 

The effectiveness of focusing on low-income populations is evident from large expansions of public health insurance for pregnant women and children in the 1980s. There were large reductions in child mortality associated with these expansions. “Those reductions were much larger for poor children than for richer children,” Ms. Currie said.

A report by RAND shows that in 1980 the United States spent 11 percent of its G.D.P. on social programs, excluding health care, while members of the European Union spent an average of about 15 percent. In 2011 the gap had widened to 16 percent versus 22 percent.

Although this is a modest divergence over time, Mr. Anderson says it could be significant nonetheless. “Social underfunding probably has more long-term implications than underinvestment in medical care,” he said. For example, “if the underspending is on early childhood education — one of the key socioeconomic determinants of health — then there are long-term implications.”

Slow income growth could also play a role because poorer health is associated with lower incomes. “It’s notable that, apart from the richest of Americans, income growth stagnated starting in the late 1970s,” Mr. Cutler said.

Even if we can’t fully explain why the United States diverged in terms of health care spending and outcomes after 1980, one thing is clear: History demonstrates that it is possible for the U.S. health system to perform on par with other wealthy countries. That doesn’t mean it’s a simple matter to return to international parity. A lot has changed in 40 years. What began as small gaps in performance are now yawning chasms. And, to the extent greater American health spending has spurred development of valuable health care technologies, we may not want to trade away all of our additional spending.

Nevertheless, Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, is hopeful: “For starters, we could have a lot more competition in health care. And government programs should often pay less than they do.” He added that if savings could be reaped from these approaches, and others — and reinvested in improving the welfare of lower-income Americans — we might close both the spending and longevity gaps.

Austin Frakt is director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health. He blogs at The Incidental Economist, and you can follow him on Twitter.@afrakt

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Thursday, May 10, 2018

Gnawing Away at Healthcare

Paul Krugman - May 7, 2018 - At the beginning of 2017, Republicans promised to release the kraken on Obamacare — to destroy the program with one devastating blow. But a funny thing happened: Voters realized that repealing the Affordable Care Act would mean taking health insurance away from tens of millions of Americans. They didn’t like that prospect — and enough Republicans balked at the backlash that Obamacare repeal fizzled.

But Republicans still hate the idea of helping Americans get health care. So instead of releasing the kraken, they’ve brought on the termites. Rather than trying to eliminate Obamacare in one fell swoop, they’re trying to undermine it with multiple acts of sabotage — while hoping voters won’t realize who’s responsible for rising premiums and falling coverage.

Which is why it’s important to place the blame where it belongs.

The first thing you need to understand is that Obamacare has been a highly successful program. 

When the legislation was passed, Republicans insisted it would fail to cut the number of uninsured and would blow a huge hole in the federal budget. In fact, it led to major gains in coverage, reducing the uninsured rate to its lowest level in history, at relatively low cost.

It’s true that the coverage expansion was somewhat less than originally predicted, although the shortfall was much less than you may have heard. It’s also true that after initially offering surprisingly cheap policies on the Obamacare exchanges, insurers found that the people signing up were sicker, on average, than they expected, leading to higher premiums. But as of last year, the markets appeared to have stabilized, with insurers generally profitable.

Nobody would claim that Obamacare is perfect; many Americans remain uninsured, and too many of those with coverage face troublingly high out-of-pocket expenses. Still, health reform delivered most of what its advocates promised and caused none of the disasters its opponents predicted.

Yet Republicans still want to destroy it. One reason is that much of the coverage expansion was paid for with taxes on high incomes, so repeal would be a way to cut taxes on the wealthy. More broadly, conservatives hate Obamacare precisely because it works. It shows that government actually can help tens of millions of Americans lead better, more secure lives, and in so doing it threatens their low-tax, small-government ideology.

But outright repeal failed, so now it’s time for sabotage, which is taking place on two main fronts.

One of these fronts involves the expansion of Medicaid, which probably accounted for more than half the gains in coverage under Obamacare. Now a number of Republican-controlled states are trying to make Medicaid harder to get, notably by imposing work requirements on recipients.

What is the point of these work requirements? The ostensible justification — cracking down on able-bodied Medicaid recipients who should be working but aren’t — is nonsense: There are very few people meeting that description. The real goal is simply to make getting health care harder, by imposing onerous reporting and paperwork requirements and punishing people who lose their jobs for reasons beyond their control.

The other front involves trying to reduce the number of people signing up for private coverage. Last year the Trump administration drastically reduced outreach — the effort to let Americans know when and how to get health insurance.

The administration is also promoting various dodges that would in effect let insurance companies go back to discriminating against people in poor health. And when Congress passed a huge tax cut for corporations and the wealthy, it also eliminated the individual mandate, the requirement that people sign up for insurance even if they’re currently healthy.

Preliminary evidence suggests that these efforts at sabotage have already partially reversed the coverage gains achieved under Obama, especially among lower-income Americans. (Curiously, all the coverage losses seem to have happened among self-identified Republicans.) But the worst is yet to come.

You see, G.O.P. sabotage disproportionately discourages young and healthy people from signing up, which, as one commentator put it, “drives up the cost for other folks within that market.” Who said that? Tom Price, President Trump’s first secretary of health and human services.

Sure enough, insurers are already proposing major premium hikes — and they are specifically attributing those hikes to G.O.P. actions that are driving healthy Americans out of the market, leaving a sicker, more expensive pool behind.

So here’s what’s going to happen: Soon, many Americans will suffer sticker shock from their insurance policies; federal subsidies will protect most of them, but by no means everyone. They’ll also hear news about declining insurance coverage. And Republicans will say, “See, Obamacare is failing.”

But the problem isn’t with Obamacare, it’s with the politicians who unleashed this termite infestation — who are doing all they can to take away your health coverage. And they need to be held accountable.

Wednesday, May 2, 2018

Tom Price, Somewhat Belatedly, Starts Telling the Truth About Obamacare


It took longer than expected, but disgraced former Health and Human Services Secretary Tom Price appears to have been welcomed back into polite society. Untethered from the political concerns that dictated what he could say either as a congressman or Cabinet member, Price is now able to tell certain truths about health care policy—though, in telling them now, he only confirms his own dishonesty about them when it mattered. 

Speaking at the World Health Care Congress on Tuesday morning, Price laid out the consequences of congressional Republicans’ decision to eliminate the individual mandate penalty in last year’s tax reform bill. 

“There are many, and I’m one of them, who believes that [removing the mandate] actually will harm the pool in the exchange market, because you’ll likely have individuals who are younger and healthier not participating in that market,” he said, “and consequently, that drives up the cost for other folks within that market.” 

You’ve got to love the “actually” here. Actually, the mandate—an imperfect instrument—was put into the Affordable Care Act for a policy purpose. Democrats didn’t, actually, put the mandate into the bill because they found it politically wise to irritate constituents for the sport of it, actually. No, really. They actually did it to achieve balanced risk pools. And now that it’s gone, it will actually upset the balance of risk pools and increase premiums. This is an actual thing. 

Price’s point about the mandate is actually the opposite of what he said in his capacity as the administration’s point person on health care reform during negotiations over the bill last year. 

“The individual mandate is actually one of those things that is driving up the cost for the American people in terms of coverage,” Price said in a July 2017 interview on ABC’s This Week shortly after the dramatic failure of health care reform on the Senate floor. 

With legislative repeal-and-replace seemingly dead, Price was considering what administrative relief he could bring to health care markets, and an expansion of individual mandate waivers was high on the list. He didn’t get very far. In September, he resigned under scrutiny for chartering fancy planes for lengthy flights between D.C. and Philadelphia. Good to see that he’s landed on his feet. 

Thursday, April 26, 2018

(Montana) Hospitals prep for Medicaid funding cuts

Hospitals across Montana are preparing for a decrease in Medicaid funding through layoffs and program “realignments” as the fallout from last year’s state budget shortfall continues to land on Montana’s health care providers.

The cuts are coming to Montana’s Medicaid reimbursement rate, which provides hospitals with funding to serve patients on the federal health care program. It’s part of an attempt by the Montana Department of Health and Human Services to address the $49 million in cuts assigned to the department last fall in a special state legislative session following a statewide budget shortfall of $227 million.

Medicaid — the program which combines federal and state funds to provide coverage to people who can’t afford health insurance or nursing home care — was expanded in Montana under the Affordable Care Act in 2016.

Kalispell Regional Healthcare is expected to lose $6.6 million in Medicaid funding this year, and has begun to address the funding gap through staff layoffs in recent weeks. Kalispell Regional Communications Director Mellody Sharpton did not specify the number of layoffs but said that it was “considerably less than 1 percent” of those employed by the health system and that none were involved in direct patient care. Kalispell Regional employs over 4,000 people in Northwest Montana.

That $6.6 million loss will also land, in part, on North Valley Hospital in Whitefish, which has been under the Kalispell Regional umbrella since an affiliation in 2016. North Valley Community Relations Manager Allison Linville said she had no additional information on layoffs or potential staff changes at the hospital.

Statewide, hospitals in Montana have also been strained by the reimbursement cuts. The Bozeman Daily Chronicle reported last week that Bozeman Health expects a $2.6 million cut in reimbursements and will absorb the loss without cutting services or staff. Instead, they will attempt to recoup the difference by saving money on supplies such as medications or equipment.

Community Medical Center in Missoula announced Friday that it was eliminating 16 staff positions in response to the cuts, which they said would decrease its funding by more than $6 million in 2018.
More changes could be forthcoming if Montana’s Medicaid expansion is not renewed in next year’s meeting of the state Legislature. The 2-year-old program, which expanded Medicaid under the Affordable Care Act, now enrolls over 94,000 Montanans — nearly one in 10 residents.

The program has cost $802 million during its first two years. The state of Montana has paid for 5 percent of that number, while the federal government contributed the other 95 percent.

A recent report by the Montana Healthcare Foundation predicted that the program could pay for itself by generating $350 million to $400 million of new spending in Montana’s economy between 2018 and 2020. According to the report, the Medicaid expansion injects money into Montana’s economy by supporting new health care spending, shifting the cost of Medicaid care from providers to the federal government and promoting economic activity, such as 5,000 jobs and $270 million in personal income by 2020.

As of now, the expansion is set to expire next year.

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Tuesday, April 17, 2018

Why Is U.S. Health Care So Expensive? Some of the Reasons You’ve Heard Turn Out to Be Myths

""There were two areas where the United States really was quite different: We pay substantially higher prices for medical services, including hospitalization, doctors’ visits and prescription drugs. And our complex payment system causes us to spend far more on administrative costs. The United States also has a higher rate of poverty and more obesity than any of the other countries, possible contributors to lower life expectancy that may not be explained by differences in health care delivery systems."

In a new, detailed international comparison, the United States looks a lot more like its peers than researchers expected.

Maybe the United States health care system isn’t that bizarre after all.

Compared with peer nations, the United States sends people to the hospital less often, it has a smaller share of specialist physicians, and it gives people about the same number of hospitalizations and doctors’ visits, according to a new study. The quality of health care looks pretty good, it finds, while its spending on social services outside of health care, like housing and education, looked fairly typical. 

If you’ve been listening to many of the common narratives that seek to explain the high costs of America’s health system and the nation’s relatively low life expectancy, those results might surprise you. Analysts are fond of describing the system as wasteful, with too many patients getting too many services, driven by too many specialist doctors and too few social supports.

But a large and comprehensive review in The Journal of the American Medical Association punctures a lot of those pat explanations. The paper, conducted by a research team led by Ashish Jha, compiled detailed data from the health care systems of the United States and 10 other rich developed nations, and tried to test those hypotheses. The group included nations with single-payer health care systems, like Britain and Canada, and countries with competitive private insurance markets, like Switzerland and the Netherlands. 

Dr. Jha, the director of the Harvard Global Health Institute, said he came to the project with a sense of the conventional wisdom about how the United States differed from its peers. But, after assembling the data from the countries’ health ministries, he changed his mind about a number of key assumptions. 


“We know we spend a lot more than everyone else, and we have looked for easy explanations — things like greed in the system, fee-for-service medicine, overutilization,” he said. But the research, he said, didn’t match his expectations. “I’ve been looking at other countries and seeing there’s a lot of fee-for-service in other countries, and other countries are struggling with overutilization.”

When it came to many of the measures of health system function, the United States was in the middle of the pack, not an outlier, as Dr. Jha had expected. Many analysts have called for the country to shift its physician training away from specialty care and toward more primary care medicine, for example. But the study found that 43 percent of U.S. doctors practice primary care medicine, about typical for the group. 

It’s often argued that patients in the United States use too much medical care. But the country was below average on measures of how often patients went to the doctor or hospital. The nation did rank near the top in its use of certain medical services, including expensive imaging tests and specific surgical procedures, like knee replacements and C-sections.

The data are consistent with other evidence that health care systems are beginning to converge, as information and technologies spread around the world among doctors and administrators.
Bruce Landon, a professor of policy and medicine at Harvard Medical School, said that the complaints about rising health care costs are a worldwide issue. Even though other countries spend less than the United States, few believe they have found a way to tame spending forever. 

“I don’t think there’s any of these countries where if you went and talked to them individually, they wouldn’t say they’re having a health care cost crisis,” he said. “They’re all struggling with paying for new technology and the cost of the system.”

The data did not suggest that any country had a plug-and-play policy template for devising a lower-cost, high-performing system. The systems tended to perform better than the United States on some measures and worse on others, with lots of idiosyncrasies.

Some experts who reviewed the results wondered about the accuracy of all the paper’s data points, which were numerous and drawn from an array of international sources. Dr. Jha acknowledged that the numbers may not be perfect but described the effort as careful and more comprehensive than previous comparisons.

There were two areas where the United States really was quite different: We pay substantially higher prices for medical services, including hospitalization, doctors’ visits and prescription drugs. And our complex payment system causes us to spend far more on administrative costs. The United States also has a higher rate of poverty and more obesity than any of the other countries, possible contributors to lower life expectancy that may not be explained by differences in health care delivery systems.

Just because other countries use the hospital more doesn’t mean that every hospitalization in the United States is appropriate. Jonathan Skinner, a professor at Dartmouth, who has studied patterns in health care use in the United States, noted that there probably is money to be saved by eliminating some of the extra scans and operations that are much more common in the United States than elsewhere. 

“It’s not that we’re buying more pizzas, we’re just paying more for each pie,” Dr. Jha said. “But that doesn’t mean that you can’t still buy fewer pizzas.”

Wednesday, April 4, 2018

Premiums shoot up, but many are paying less for ‘Obamacare’

WASHINGTON (AP) — Consumers getting financial assistance under former President Barack Obama’s health care law will pay lower premiums this year, even though the “list price” for their health insurance shot up.

That odd result is reflected in a report issued Tuesday by the Trump administration.

After federal aid, the average monthly premium paid by subsidized customers on HealthCare.gov is dropping to $89 from last year’s $106. That’s a 16 percent savings even though the “list price” premium went up about 30 percent, now averaging $639 for those subsidized customers.

The bottom line is counterintuitive, but it shows how “Obamacare” subsidies cushion consumers from rising premiums.

Seema Verma, head of the Centers for Medicare and Medicaid Services, says more affordable health care options are needed for people who aren’t eligible for the Affordable Care Act’s income-based financial assistance.

But independent analysts say a big part of this year’s premium increases is due to actions by the Trump administration, including the cancellation of major payments to insurers.

Insurers jacked up premiums to make up for the loss of federal dollars to cover discounted copays and deductibles that the companies were required to provide to low-income customers. Congressional authorization of the payments was under a legal cloud, and President Donald Trump pulled the plug. Bipartisan efforts to restore the money recently fell apart over disputes about abortion coverage.

“These numbers show for the first time how the Trump administration’s termination of payments to insurers in a sense backfired,” said Larry Levitt of the nonpartisan Kaiser Family Foundation. “The result, which is a little bizarre, is that consumers eligible for government premium subsidies are actually paying less out of their own pockets for insurance on average than last year.”

About 11.8 million people signed up for coverage this year through HealthCare.gov and state insurance markets, a slight dip from last year.

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