Tuesday, December 16, 2014
Today’s Managing Health Care
Costs Number is 3.7x
Guest post by Marisa Dowling, Harvard Kennedy School and Duke University School of Medicine Class of 2016
$547. That is the cheapest knee MRI I can get with my health plan— information I now know thanks to recent price transparency efforts in Massachusetts. On October 1st, Massachusetts became the first state in the nation to require insurers to provide consumers with detailed healthcare cost information upfront via an online portal: getthedealoncare.org. I decided to explore the tool, using myself as a test case.
The getthedealoncare.org website is little more than a landing page for consumers. From there, citizens select their insurer and go to that company’s site. This simple setup aids consumers in quickly getting to their ultimate destination, but improved context and clearly stating the limitations (see list below) of the insurer’s information would be a valuable customer service.
Once on my insurer’s (Blue Cross Blue Shield) page, things become more complex as I was barraged with text/links. It was not immediately clear where to click. Reading all the information on the page, I realized the service I wanted was called “Find A Doc.” This is not a very intuitive name for a price transparency tool. Tuft’s and Harvard Pilgrim’s tools are better named: “Empower Me” and “Now iKnow” respectively. A common name across insurers would be helpful from a consumer perspective. Clicking on the relevant link, I learned I needed to register (i.e. enter insurance and security information) for an online account prior to accessing any price information. This turned out to be a quick process, but a hurdle nonetheless.
Now 11 minutes since I first started, I was at BCBS’ price search engine. The interface was seamless with the text search suggesting a long but comprehensive list of options as I wrote, not unlike Google searches. Information on my deductible progress was also offered. I clicked and a list of MRI provider options appeared, sorted with the cheapest first: $547 at Massachusetts Bay Regional MRI in Dedham, MA. The most expensive option was $2,038 at Boston Children's Hospital. This is a 3.7x price difference. The next most expensive option was a tie between Partner’s Brigham & Women’s Hospital and Massachusetts General Hospital at $1,360 each. Additionally it should be noted that for each provider’s price option, BCBS hedges its bets by offering a range for the final price. For both the cheapest and most expensive options, the range was roughly $100 plus or minus the highlighted price tag. Overall, I was impressed.
However several caveats remain as a recent Time Magazine article points out:
1. Insurers are defining “price” differently. Listed prices may or may not include all charges (such as facility fees), meaning consumers may still be “surprised” once the bill arrives. Reading the insurer’s fine print remains essential.
2. There is no standardized list of services for which cost information is required by law, meaning some insurers may provide information on a given test while others may not. Price data on inpatient services is particularly scant.
3. Quality information is very limited. In its absence, consumers may assume that more expensive means higher quality even for very standardized services. Consequently, this tool may backfire for certain segments of the population.
Overall, getthedealoncare.org is an important first step in improving the healthcare marketplace. However, it remains to be seen how many consumers will actually use it and if they will use it well. Yet, its relevance is growing daily as more and more consumers enroll in high deductible health plans and cost-sharing increases overall.
1. See Elisabeth Rosenthal’s article in today’s New York Times about cost differentials and needlessly high prices of echocardiograms.
2. Remember that public quality reporting probably increases quality even if it’s not used by patients. I suspect the same will prove to be true of public price transparency.
Monday, December 15, 2014
Today’s Managing Health Care Costs
Number is 19.4%
The Consumer Financial Protection Bureau released a report last week on medical debt in the US – and it’s just shocking.
Almost 1/3 of Americans (31%) who have a credit report have some collection activity shown on that report. Over half of these are medical debt. 19% of all Americans with credit reports have medical debt collection listed on these.
Medical debt is on average lower than consumer debt on which there is collection activity – and those who have such items on their credit reports are often not in any other financial distress. The CFPB suspects that in some instances medical collection agencies are reporting collection activity on bills that consumers are challenging – perhaps as a way to encourage patients to simply pay the bill to avoid an adverse credit report – which can lead to mortgage denials, higher interest rates, and can even lead to not being considered for a job.
From the CPFB:
Medical debts occur and are collected through unique circumstances and practices that amplify concerns raised about collections tradelines generally. In particular, the complexity of medical billing and the third-party reimbursement processes faced by most patients and their families is a potential source of confusion or misunderstanding between patient, medical provider, and insurer. That complexity could lead some consumers to be unaware of when, to whom, or for what amount they owe a medical bill or even whether payment was the responsibility of the consumer rather than an insurance company…
Unlike credit cards, installment loans, utilities, or wireless or cable service that have contractual account disclosures describing terms and conditions of use, 60 most often consumers are not told the costs of medical services in advance. Consumers needing urgent or emergency care rarely know or are provided with the cost of a treatment or procedures beforehand.61 Even in nonemergency situations, the specific treatments, tests, or procedures needed are regularly determined through diagnoses that occur at the time of treatment. When a consumer is
hospitalized, physicians and hospitals often determine what sort of treatments a consumer
needs, and administer them during a hospital stay. Even if the treatment is known in advance, the provider’s price and billed amount for that procedure might depend on which insurer covers that particular patient and the specific insurer’s pre-negotiated pricing for that treatment.
This is likely to get worse as more Americans are on high deductible health plans. Further, recent efforts by insurance plans to clamp down on unscrupulous providers who bill high amounts and remain “out of network” are likely to lead to more unexpected high bills – and thus more bills that are in simultaneously in dispute and in collection.
The US has long had the highest rate of medical bankruptcy in the world. This is a bad sign that even with the Affordable Care Act things could continue to get worse.
Friday, December 12, 2014
Today’s Managing Health Care Costs
Number is 300,000
National Public Radio’s Ina Joffe has an excellent multi-part series this week on the use of antipsychotics in nursing homes. There are 300,000 nursing home residents who are on these medications chronically – even though they have been shown to increase the risk of death. That’s just about one in five nursing home residents.
These medications are associated with increased risk of falling, so many nursing home residents are bound to wheelchairs and beds to avoid hip fractures. They are associated with higher risk of stroke, which leads to further disability in an already-frail population.
The FDA has warned against the use of antipsychotics in the demented since 2005, when a metaanalysis of randomized placebo controlled studies showed the risk of death with these drugs was 1.5 times higher than for those randomized to placebos
The U.S. Food and Drug Administration (FDA) has not approved any drug for treating the neuropsychiatric symptoms of dementia. However, atypical antipsychotics are commonly used for off-label treatment . In April 2005, the FDA issued a black box warning that the use of atypical antipsychotics to treat behavioral disturbances in patients with dementia was associated with greater mortality. Subsequent research reports confirmed the mortality risks associated with the use of both conventional and atypical antipsychotics to treat patients with dementia . Another FDA black box warning for conventional antipsychotics followed in June 2008 . (Source)
This just isn’t necessary. Joffe reports on a Minnesota nursing home chain that uses antipsychotics for only 5-7% of its residents. As the nursing homes weaned patients from these drugs,
"They started interacting," recalls Matthes, "and people who hadn't been speaking were speaking. They came alive and awakened."
Nursing homes have a few “customers.” Their purchasers are family members, Medicare, and Medicaid. Nursing home residents are sometimes customers- although when patients have dementia they cannot effectively advocate for themselves.
You can search the federal database for the rate of use of antipsychotics by nursing home here. Do you have a loved one in a nursing home? If you do, check and see the rate of use of antipsychotics there. Congratulate the nursing home administrator if it’s low. Let her know that we care.
Let’s stop killing grandmas!
Thursday, December 11, 2014
Today’s Managing Health Care Costs
Number is 135
This month’s issue of Health Affairs, which focuses on children’s health, reports that 8.9% of Medicaid deliveries are performed electively prior to 39 weeks. We are killing babies.
We’re not talking about deliveries of babies in distress, or moms with life-threatening infections. We’re talking about perfectly normal pregnancies with labor induced prematurely. This increases the rate of perinatal mortality by 40% (38 weeks) or 130% (37 weeks).
How many babies do we kill this way? There are almost 4 million deliveries in the US annually, and 48% of these are to women covered by Medicaid. This means that at least 68 extra babies die unnecessarily for deliveries at 38 weeks, and another 66 die unnecessarily from deliveries at 37 weeks. It would be worse if I didn’t assume that there were no early elective deliveries prior to 37 weeks, when the risk goes up by 270%.
A previous analysis suggested that early elective deliveries are responsible for $1 billion in excess health care costs.
There is something we can do about this, too. Hospitals can prohibit booking early elective deliveries. If an OB wants to deliver a baby electively before 39 weeks – she must provide a clinical reason. Intermountain decreased its rate of early elective delivery from 28% to 2% using this method. South Carolina dropped its early elective delivery rate by almost half – when Medicaid and BCBS SC stopped paying for these procedures.
Neonatal mortality is rare in the United States. It’s unconscionable that there are an extra 135 deaths – representing almost 11,000 years of potential life lost. Hospitals should prohibit early elective deliveries, and health plans shouldn’t pay for them.
Tomorrow – Killing Grandmas.
Wednesday, December 10, 2014
Guest Post by Seth Greenwood, a student in Harvard School of Public Health Class of 201
How many of you have a Facebook, Twitter, or Instagram account? My guess is that almost everybody who reads this blog does. Facebook, Twitter, and Instagram are classic examples of social networks. They create a network of links (i.e. Facebook friends) between people (nodes). And while individuals might use them to say happy birthday, see what their favorite celebrity ate for dinner, or check out instagram's cutest cat, others have harnessed social network data to answer medical research questions in a novel way.
The CDC estimates that current annual spending on obesity related illness in the United States is a staggering (and growing) $190 billion. But how can we use social networks to prevent obesity? Harvard professor Nick Christakis (2007) analyzed a social network elicited from the Framingham Heart study and found evidence that obesity can spread through social networks. Using other network metrics, we can discover individuals or groups of people that play a key role in either preventing or encouraging the spread of obesity. By focusing our interventions on these individuals, we can limit the growth of obesity and perhaps spread healthier lifestyles throughout social networks.
Implementing network analysis in the medical world isn’t limited to just social networks. Bruce Landon (Aug. 2014) published a study that reviewed data (2006) from 4.5 million Medicare beneficiaries in 51 hospital referral regions, who were seen by about 69,000 physicians. The author’s goal was to identify clusters of physicians that would make ideal candidates to form an ACO. From claims data, the authors created a network that connected patients to physicians and applied an algorithm that detected groups of physicians who were connected to each other’s patients by more than just chance. These groups, who already act in a relationship based referral manner, would make efficient targets for new ACO’s.
Network science can also save the system money by preventing medical mass hysteria. This past summer, a hot-button question was, “What systems does the United States have in place to prevent and treat an Ebola outbreak?” The answer: Not that many. In this Washington Post article, Lena Sun and Dennis Brady report that the White House sought an emergency funding request of$6 billion, of which $154 million was for hospital preparedness and support. Hospitals that have treated patients with Ebola state that their total direct and indirect costs hover around $600,000 per patient. But network scientists wanted to know if the risk was even close to that amount money. Marcelo Gomes implemented a global-transportation network which predicted that by the third week of September, the United States would have treated 3-4 cases of Ebola. According to the CDC, the US has treated 4 cases of Ebola in 2014.
While there are limitations to the network approach, I hope this post provided you with insight into an uncommon methodology used to ask and answer questions in a novel way.
Tuesday, December 9, 2014
Today’s Managing Health Care Costs
Number is 30%
Kaiser Health News reported on Friday that over half of exchange bronze plans will have specialty drug coinsurance rates of 30% or more. This means that a typical drug for rheumatoid arthritis, with an annual cost of $30,000, would cost $9000 out of pocket – forcing most single enrollees and many families to the limit of their out of pocket maximum expense.
Specialty drugs are a huge cost problem – they represent just 1% of total pharmacy prescriptions, but represent a quarter of all costs.
But this is another example of where “consumerism” simply doesn’t work. We understand that patient (consumer) price sensitivity can help lower the use of preference-sensitive discretionary low value care. So charging a high amount of coinsurance for ambulatory MRIs makes sense – and discourages patients from insisting on an MRI just a few days after they twist their knee or strain their back.
But charging patients huge out of pocket payments for necessary medications which are proven to be valuable to treat their conditions and for which there are no alternatives is just a way to shift costs to the sick –as it is unlikely to change behavior.
Even more egregious is the report of some restrictions placed on use of Sovaldi, the hepatitis C medication which costs $100,000 a year. The Illinois Medicaid department reportedly put 2 dozen restrictions on the use of this medication – decreasing its spending by 80%. In October, 43 of 50 patients who sought prior authorization were denied – mostly for not being sick enough. The agency only gives 2 weeks medication at a time, pays for only one treatment per lifetime, and denies the medication if patients fail to renew their prescriptions. This is certainly not the way we want to treat an infectious disease that killed more Americans in 2013 than HIV.
We need a better approach to specialty drugs than to shift costs to those unfortunate enough to have hepatitis C, multiple sclerosis, rheumatoid arthritis, or the other diseases for which specialty drugs can halt disease progression and even bring cures. We're using levers that lower utilization -when our problem is unit cost.
Potential approaches include:
· Pool the costs of specialty medications across the entire community, and have a governmental or quasigovernmental agency negotiate the best rates. Insurers could be charged a premium to cover the costs of this. This was proposed by Katherine Swartz and others in the mid 2000s. This would be especially appropriate for expensive drugs to treat an infectious disease like HIV or Hepatitis C.
· Empower the FDA to consider medication cost when it determines drug approval. That would allow the FDA to pressure pharmaceutical companies to lower their prices – and it’s working well in the UK.
· Drug price regulation – we’re just about the only developed country that doesn’t have it.
· Reexamine patent law – and consider shorter periods of exclusivity
· Make it much easier to get approval for bioequivalent medications – leading to a competitive market for specialty drugs years before that will otherwise happen
Here’s a post on this from May – and the problem has only gotten worse.
Monday, December 8, 2014
Today's Managing Heath Care Costs
Number is $130 Billion
Guest Post by Isha Ann Emhoff, MD FACS
Isha Ann Emhoff is a general and oncologic surgeon in Boston and a student at Harvard School of Public Health
That is the amount of money wasted in the operational inefficiencies of delivered healthcare services. As a surgeon, I have been trained to be maximally efficient. “One intention, one motion” is the mantra in the operating room. There should be no wasteful movement and no wasteful dissection. There are three reasons for this: safety, quality and money. Every extra movement or amount of dissection raises the risk of injury to structures, potentially impacts quality, and takes time which costs money - the average operating room time cost is anywhere from $29 - $80 per minute excluding physician fees.
Diagnostic efficiency, along with technical efficiency, is valuable in surgery. The parsimonious principle of simplicity in problem solving, known as “Occam’s razor”, is taught to every physician-in-training. This is the heuristic tool used to guide decision-making under conditions of uncertainty such as occurs when making a diagnosis. This heuristic was also vitally important in developing theories to explain our universe. It guided Einstein in formulating the special theory of relativity as well as Planck and Heisenberg in the development of quantum mechanics. Delivering healthcare should not be more complex or less parsimonious than the universe, should it?
When it comes to the business of healthcare delivery, reports indicate $130 billion dollars wasted due to operational inefficiencies. Businesses continuously create new ways to raise productivity (more output per dollar input) to be sustainable, and to allow growth. Healthcare, apart from all other industries, has lacked in organizational innovation as a contributor to productivity growth. Instead, it has relied upon new technologies (new goods) and ever-increasing volume. It is time to address organizational innovation and efficiency.
In his paper “Where are the Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care” David Cutler makes an argument that provision of inappropriate care (care that offers no benefit, or may even result in harm) represents one barrier to organizational innovation. It is possible that improvements that reduce the time and resources used for the delivery of inappropriate care could save $300 billion annually.
A second barrier to organizational innovation is lack of information on quality. To that end, the Kaiser Family Foundation, in partnership with the Peterson Center on Healthcare, announced a tracker to monitor the performance of the U.S. health system. The Peterson-Kaiser Health System Tracker went live on December 4, 2014. Data on cost and quality measures as well as information on trends drivers and issues are available on the site. Sites such as these combined with the effects of data from electronic health records provide an opportunity to see if transparency and availability of data will result in better efficiencies in the healthcare delivery system on whole.
Meaningful data could result in annual savings of $100 billion. The total $400 billion in annual savings from these organizational efficiencies could drastically change the productivity ratio.
"It is vain to do with more what can be done with fewer." – William of Occam.