Cartoon – Modern Healthcare
Category Archives: Uncategorized
Cartoon – Challenging Activity
Cartoon – The Perils of Private Medicine
Cartoon – Your Health Plan Covers Everything but
Dynamics of Decline: The Truth About HMOs
http://www.chcf.org/articles/2016/11/dynamics-decline-truth-hmos
California’s commercial health maintenance organization population shrank from 11.9 million to 9.8 million enrollees between 2004 and 2015 (see figure below), a 17.5% decline. But the decline has not been consistent across all HMOs — Kaiser’s commercial enrollment has actually grown during this period.
Two new publications from CHCF take a closer look at how commercial managed care enrollment (including individual enrollment) and the public sector’s embrace of managed care are shifting the way physician organizations are paid — important trends that could affect California’s delivery system.
The first report, As Commercial Capitation Sinks, Can California’s Physician Organizations Stay Afloat?, by Laura Tollen uses quantitative data and findings from stakeholder interviews to shed light on the extent to which commercial capitation is losing ground in California.
A companion set of charts and graphics compiled by Katherine Wilson provides additional detail on health plan enrollment and changes in HMO participation over the past decade.
It is important to look separately at Kaiser and non-Kaiser enrollment. Kaiser is characterized by a mutually exclusive relationship between the health plan (Kaiser Foundation Health Plan) and its two associated Permanente Medical Groups in Northern and Southern California. While Kaiser is by far the largest HMO in California, the health plan offers capitated contracts only to these two medical groups.
Kaiser HMO enrollment increased from 5.6 million to 6.1 million in the last decade, while commercial HMO enrollment for all non-Kaiser plans plummeted, from 6.3 million in 2004 to the current 3.6 million — a loss of more than 40%.
Uncertain Future
The impact of these trends on the state’s non-Permanente physician organizations is uncertain. While declining commercial capitation has not yet had a big effect on their operations, medical group leaders suspect it will soon, according to interviews. The change in commercial payment methods has been slow enough that their organizations have been able to adapt, repurposing some of their HMO-based infrastructure (utilization management tools, for example) for value-oriented payment programs that are FFS-based, such as private accountable care organizations (ACOs).
Among the other findings from the interviews were:
- Declining capitation and rising fee-for-service will not influence individual physicians’ clinical decisions. All interviewees noted that their organizations’ strong culture of providing high-value care would prevent them from fundamentally changing the way they practice, regardless of payment type.
- Despite commercial trends, capitation from Medicare Advantage and Medi-Cal managed care plans is on the rise. However, neither of these types of capitation is seen as a substitute for commercial capitation in terms of supporting infrastructure. While the perception is that Medicare Advantage capitation rates are generous, there is also recognition that these patients are costly. Interviewees said Medi-Cal capitation rates are inadequate.
- Along with the decline in commercial capitation, interviewees expressed alarm at the large increases they observed in patient cost-sharing requirements. All said they fear that patients will not obtain the care recommended by their providers because of high out-of-pocket costs, and some said they already see this happen frequently.
Why This Matters
As more employers shift coverage from HMOs to preferred provider organizations (PPOs) and other non-capitated plans to achieve lower premium rates, they are sacrificing quality and financial protection for employees in exchange for short-term premium savings.
A recent CHCF blog post by Jeff Rideout of the Integrated Healthcare Association highlights the patterns of higher quality / lower cost that distinguish HMO plans in the state (compared to PPOs and other plan types). Large multispecialty physician organizations, which have flourished in California, have a long history and significant expertise in managing risk and coordinating care. These are the very skills that health care purchasers demand from value-based payment programs. Without sufficient infrastructure — which is supported by capitation/prepayment — the foundation of high-value care could crumble.
Given these trends, are employers being penny-wise but pound-foolish in pursuing short-term savings at the expense of longer-term value?
In California, What’s Driving the Variation in Total Cost of Care — Volume or Price?
http://www.chcf.org/articles/2017/02/variation-total-cost-care
As the “repeal and replace” debate continues in Washington over the future of the Affordable Care Act, policymakers considering new legislation should not lose sight of the key concept of the ACA — affordability. High and rising costs are among the most intractable health care issues facing consumers across California and the nation, and any discussion must keep underlying cost drivers at the forefront.
But where should the focus be? At the most elementary level, total health care spending boils down to two main factors: how much care we use (volume, or utilization) and what we pay for that care (price). Teasing out how each factor — utilization or price — contributes to costs is important because cost-control solutions vary depending on the answer.
Across 19 regions in California, the annual risk-adjusted, per capita total cost of care for commercially insured people varies dramatically — from an average high of $5,400 in San Francisco to a low of $3,600 in Kern County, according to 2013 data in the California Regional Health Care Cost & Quality Atlas, a web-based interactive tool produced by the Integrated Healthcare Association (IHA) to monitor cost and quality trends across the state.
Adjusted to reflect differences in population health status, the atlas shows a clear geographic cost pattern. All Northern California regions have higher costs than the statewide average of $4,300, all Southern California regions have lower costs than the state average, and Central California regions have mixed costs.
Three Key Measures
What is driving these differences? Is it variation in per capita utilization, or is it price? While the atlas does not have unit price information, it does include three important hospital utilization measures: emergency department (ED) visits, all-cause readmissions, and inpatient bed days. This allows for basic comparisons of total cost per enrollee vs. three critical measures of utilization. If hospital utilization were driving the overall cost of care, there would be a positive correlation between the cost and utilization measures. However, an analysis of atlas information actually shows the opposite. When considering all commercial health maintenance organization (HMO) and preferred provider organization (PPO) products and regions, cost and volume tend to move moderately in opposite directions.
The quadrant chart below illustrates the relationship between total cost of care and hospital utilization, based on a composite score representing the three utilization metrics. Each orange circle represents a region’s PPO products, and each blue triangle represents a region’s HMO products. With the exception of one outlier region, the data show a moderate negative correlation between hospital utilization and cost. In other words, lower hospital utilization is associated with higher total costs of care.
In the atlas data, total cost of care includes both what the enrollee pays — for example, deductibles and coinsurance — as well as the insurance payments that go to providers. That means cost variation can’t be explained by differences in benefit design among commercial products. Because higher total costs are not driven by greater hospital utilization, and not accounted for by benefit design differences, price seems to be playing a strong role.
There is also an alternative but less likely explanation. Because the atlas only looks at hospital utilization, it’s possible that the total cost of care could be driven by nonhospital utilization as much as the price of care. But because hospital utilization accounts for almost one-third of overall spending on average, it is unlikely that utilization of other services, such as physician and other ambulatory care, has as great an impact on cost variation.
Much of the focus to date on making health care more affordable has involved transferring more financial responsibility to individual patients, the idea being that if consumers have “skin in the game” they will be more discriminating in their care purchases. But if the cost problem is primarily driven by price, which is related to market forces prevalent in a geographic region, is shopping really the solution?
The next version of the atlas, scheduled for release in 2017, will include additional utilization measures and cost information. These will offer a clearer picture of the roles of utilization and price in determining health care costs for commercially insured Californians. Until then the atlas findings stress the need for a better understanding of how pricing differences contribute to total cost variation and encourage us to search for more effective strategies to influence prices as well as utilization.
UCSF, Dignity to expand Bay Area accountable care network
Canopy Health, the Bay Area accountable care organization co-founded by UCSF in 2015, is adding three Dignity Health hospitals to its growing list of in-network providers.
Hospital Rankings by Specialty
http://health.usnews.com/best-hospitals/rankings
The top three hospitals in each of 16 specialties are listed below. For a list of the best hospitals overall, see the ones that made our 2017-18 Honor Roll.
2017-18 Best Hospitals Honor Roll and Overview
http://health.usnews.com/health-care/best-hospitals/articles/best-hospitals-honor-roll-and-overview
U.S. News ranks the top 20 hospitals in the nation, plus the best hospitals in each state and metro area.
Somewhere in America, at a pace of about once per second, a patient checks into a hospital. With more than 33 million hospitalizations a year and so many patients on whom to sharpen their skills, hospitals could be expected to meet the most demanding standards for quality and safety.
Yet too many hospitals fail even those whose medical needs are relatively straightforward – such as hip replacement, uncomplicated heart bypass surgery or removal of a cancerous section of colon. The hospital that makes treating patients like these its bread and butter is the very definition of a community hospital, and it should perform at a high standard.
Even fewer hospitals excel at caring for patients with especially challenging or complex diagnoses, for whom the stakes may be a matter of life or death. For those patients, venturing beyond a trusted community hospital to seek care at a truly exceptional medical center, even one farther from home, may be the wisest option.
To help readers narrow their search for hospitals that best match their needs, U.S. News ranks hospital performance in 16 areas of complex specialty care and also rates hospitals in nine bellwether procedures and conditions such as heart bypass, hip and knee replacement, heart failure and lung cancer surgery.
The Best Hospitals Honor Roll takes both the specialty rankings and the procedure and condition ratings into account. Hospitals received points if they were nationally ranked in one of the 16 specialties – the more specialties and the higher their rank, the more points they got – and also if they were rated “high performing”in the nine procedures and conditions. The top 20 point-getters made up the Honor Roll, which has a maximum total of 480 points.
Cartoon – New 4 Day Work Schedule
HENRY KOTULA 