ECONOMIC RIPPLES: HOSPITAL CLOSURE HURTS A TOWN’S ABILITY TO ATTRACT RETIREES

https://www.healthleadersmedia.com/finance/economic-ripples-hospital-closure-hurts-towns-ability-attract-retirees?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_190410_LDR_BRIEFING%20(1)&spMailingID=15444335&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1620658993&spReportId=MTYyMDY1ODk5MwS2

The epidemic of rural hospital closures is threatening small towns such as Celina, Tenn. The town of 1,500 has been trying to position itself as a retiree destination but that task has grown more difficult since the March 1 closure of 25-bed Cumberland River Hospital.


KEY TAKEAWAYS

Celina became the 11th rural hospital in Tennessee to close in recent years — more than in any state but Texas. Both states have refused to expand Medicaid in a way that covers more of the working poor.

The closest hospital is now 18 miles away. That adds another 30 minutes through mountain roads for those who need an X-ray or bloodwork. For those in the back of an ambulance, that bit of time could mean the difference between life or death.

When a rural community loses its hospital, health care becomes harder to come by in an instant. But a hospital closure also shocks a small town’s economy. It shuts down one of its largest employers. It scares off heavy industry that needs an emergency room nearby. And in one Tennessee town, a lost hospital means lost hope of attracting more retirees.

Seniors, and their retirement accounts, have been viewed as potential saviors for many rural economies trying to make up for lost jobs. But the epidemic of rural hospital closures is threatening those dreams in places like Celina, Tenn. The town of 1,500, whose 25-bed hospital closed March 1, has been trying to position itself as a retiree destination.

“I’d say, look elsewhere,” said Susan Scovel, a Seattle transplant who arrived with her husband in 2015.

Scovel’s despondence is especially noteworthy given she leads the local chamber of commerce effort to attract retirees like herself. She considers the wooded hills and secluded lake to hold scenic beauty comparable to the Washington coast — with dramatically lower costs of living; she and a small committee plan getaway weekends for prospects to visit.

When she first toured the region before moving in 2015, Scovel and her husband, who had Parkinson’s, made sure to scope out the hospital, on a hill overlooking the sleepy town square. And she has rushed to the hospital four times since he died in 2017.

“I have very high blood pressure, and they’re able to do the IVs to get it down,” Scovel said. “This is an anxiety thing since my husband died. So now — I don’t know.”

She can’t in good conscience advise a senior with health problems to come join her in Celina, she said.

When Seconds Count, Delays In Care

Celina’s Cumberland River Hospital had been on life support for years, operated by the city-owned medical center an hour away in Cookeville, which decided in late January to cut its losses after trying to find a buyer. Cookeville Regional Medical Center executives explain that the facility faced the grim reality for many rural providers.

“Unfortunately, many rural hospitals across the country are having a difficult time and facing the same challenges, like declining reimbursements and lower patient volumes, that Cumberland River Hospital has experienced,” CEO Paul Korth said in a written statement.

Celina became the 11th rural hospital in Tennessee to close in recent years — more than in any state but Texas. Both states have refused to expand Medicaid in a way that covers more of the working poor. Even some Republicans now say the decision to not expand Medicaid has added to the struggles of rural health care providers.

The closest hospital is now 18 miles away. That adds another 30 minutes through mountain roads for those who need an X-ray or bloodwork. For those in the back of an ambulance, that bit of time could mean the difference between life or death.

“We have the capability of doing a lot of advanced life support, but we’re not a hospital,” said Natalie Boone, Clay County’s emergency management director.

The area is already limited in its ambulance service, with two of its four trucks out of service.

Once a crew is dispatched, Boone said, it’s committed to that call. Adding an hour to the turnaround time means someone else could likely call with an emergency and be told — essentially — to wait in line.

“What happens when you have that patient that doesn’t have that extra time?” Boone asked. “I can think of at least a minimum of two patients [in the last month] that did not have that time.”

Residents are bracing for cascading effects. Susan Bailey hasn’t retired yet, but she’s close. She has spent nearly 40 years as a registered nurse, including her early career at Cumberland River.

“People say, ‘You probably just need to move or find another place to go,'” she said.

Bailey and others are concerned that losing the hospital will soon mean losing the only three physicians in town. The doctors say they plan to keep their practices going, but for how long? And what about when they retire?

“That’s a big problem,” Bailey said. “The doctors aren’t going to want to come in and open an office and have to drive 20 or 30 minutes to see their patients every single day.”

Closure of the hospital means 147 nurses, aides and clerical staff have to find new jobs. Some employees come to tears at the prospect of having to find work outside the county and are deeply sad that their hometown is losing one of its largest employers — second only to the local school system.

Dr. John McMichen is an emergency physician who would travel to Celina to work weekends at the ER and give the local doctors a break.

“I thought of Celina as maybe the ‘Andy Griffith Show’ of healthcare,” he said.

McMichen, who also worked at the now-shuttered Copper Basin Medical Center, on the other side of the state, said people at Cumberland River knew just about anyone who would walk through the door. That’s why it was attractive to retirees.

“It reminded me of a time long ago that has seemingly passed. I can’t say that it will ever come back,” he said. “I have hopes that there’s still some hope for small hospitals in that type of community. But I think the chances are becoming less of those community hospitals surviving.”

 

“UNFORTUNATELY, RURAL HOSPITALS ACROSS THE COUNTRY ARE HAVING A DIFFICULT TIME AND FACE THE SAME CHALLENGES, LIKE DECLINING REIMBURSEMENTS AND LOWER PATIENT VOLUMES THAT CUMBERLAND RIVER HOSPITAL HAS EXPERIENCED.”

 

 

 

 

It’s Health Value March Madness!

https://gisthealthcare.com/health-value-march-madness/?utm_source=The+Weekly+Gist&utm_campaign=d8316b1302-EMAIL_CAMPAIGN_2019_03_22_01_00&utm_medium=email&utm_term=0_edba0bcee7-d8316b1302-41271793

OUR ANALYSIS

It’s March Madness! As always, we’re so excited for the annual ritual of hastily filling out brackets based on our (limited) knowledge of the teams, buying into office pools and “friendly” family competitions, keeping one eye firmly glued to the steady drip of results from the games, and ultimately losing to That Guy in Human Resources who picked winners based on the ferocity of the schools’ mascots.

If you’ve waited till the last minute to fill out your bracket, or if your top-seeded Championship pick and beloved alma mater happens to go out in the first round to a 16-seed (take it from us, it ain’t pretty), then we have just the thing for you!

Presenting…Healthcare March Madness!

To keep the next two weeks interesting, and to make ourselves feel better for stealing time from work to watch the games, we’ve constructed our own methodology for filling out our bracket, using a metric we call the Health Value Index (HVI). Working with our friends at Ancore Health, a data consulting firm, we assigned each team a score based on the level of “healthcare value” delivered in the county where their school is located, and then compared that metric for each matchup, picking the team with a higher score to advance to the next round.

Here’s how we calculated the HVI: we used county- and state-level data to assess four aspects of healthcare value important to individual consumers: access to care, cost of care, payment environment, and health of the population. (Specific metrics and data sources are listed in the chart below.)  Twelve metrics across those categories were normalized and equally weighted to create county-level composite scores. These normalized scores comprise the county’s HVI, allowing us to compare healthcare consumer value across markets.

In the tables below, you can see how each of the 64 teams in this year’s NCAA tournament stacked up in terms of HVI.

And just in case your favorite team didn’t make it to the Big Dance this year, or you’d like to see how your own county performed on HVI, here’s a map of the US with every county’s score. Click on the map to go to an interactive version, where you can scroll over each county and see its score. (Cool, right? Thanks to the wizards at Ancore Health for making that magic possible!)

When we first looked at this map, it occurred to us that we might just be seeing the impact of higher income levels in the Northeast and on the West Coast. But as it turns out, income level is only moderately correlated with HVI score—wealth only accounts for some of the variability in outcomes. The top four teams according to HVI include University of North Carolina, University of Vermont, University of Wisconsin and University of Washington. Wisconsin and Washington are strong performers across the four HVI dimensions, while UNC and Vermont’s strong scores are driven by high access scores.

At the other end of the spectrum we find Abilene Christian, Wofford, Gardner-Webb and Mississippi State among the bottom four teams. Mississippi State’s score is pulled down by a payment environment that is unfriendly to consumers (low commercial insurance competition and Medicare Advantage participation), but Oktibbeha County’s relatively low cost of care saves them from being even further behind. Gardner-Webb, located in Cleveland County, NC, just west of Charlotte, is weighed down by poor performance on all three health outcomes measures. Abilene Christian’s market, Taylor County in West Texas, is weighed down by a high cost of care and high per-capita rate of emergency department visits. Located in Spartanburg County, SC, Wofford’s performance is brought down by poor health outcomes and a non-competitive insurance market.

Using our HVI methodology, let’s take a look at how we’ve filled out our bracket for this year’s tournament. The scores in parentheses next to the school’s name in each round show the margin of victory that earned the school a win in the previous round. (So, for example, Virginia walloped Gardner-Webb in its opener by having an HVI that was 1.35 higher than its opponent.) While there are some big first- and second-round upsets thanks to the variability in scores, and one very surprising debutant in this year’s Championship Game, we’re picking the top-seeded North Carolina Tar Heels to be national champions this year—thanks to the bracket-leading level of healthcare value delivered in Orange County, NC, where UNC is located.

Surprised? We were. Only two of our top four HVI teams—North Carolina and Vermont—made it to the Final Four in our bracket, as it turned out that the South and Midwest regions were particularly stacked with high-ranking teams. Washington got rolled over in the second round by an unbeatable Tar Heel squad, despite the outstanding level of healthcare value in King County, WA. Wisconsin, another top-four team thanks to being based in downtown Madison, in Dane County, WI, made it all the way to the Final Four only to get edged out by UNC as well. Other top-rated teams that didn’t get nearly as far as their high HVIs would have predicted: Northeastern (Suffolk County, MA); UC Irvine (Orange County, CA) and Iona (Westchester County, NY). None of those schools could match the dominance of North Carolina.

Meanwhile, on the other side of the bracket, Vermont easily bests Florida State (Leon County, FL) and Marquette University (Milwaukee County, WI), and barely edges out Michigan (Washtenaw County, MI) in the Elite Eight to face powerhouse Minnesota in the Final Four. The Golden Gophers sailed through the East—easily the least competitive quadrant of our healthcare bracket—only to get crushed by the Catamounts. For those of you who also hail from outside the Green Mountain State and might not know this, Vermont’s mascot is a large cougar-like cat. Scary!

In the Championship Game, Vermont falls to UNC. What gives the home county of UNC, Orange County, the edge in terms of healthcare value? While both lead the bracket in access to care, UNC brings higher access to primary care and mental health providers. And Vermont suffers from lower payer competition and Medicare Advantage participation.

Of course, we wouldn’t actually advise picking 13-seed Vermont to play in the Final—in fact, the lowest-seeded teams ever to make it to the Final Four were all 11-seeds: LSU (1986); George Mason (2006); VCU (2011); and Loyola-Chicago (2018). But given how many people are likely to pick Duke to go all the way this year, with their incredible freshmen leading the way, you could do worse than to follow our methodology, and base your picks on healthcare value. Better still might be picking your next home based on that metric!

We’ll return next week with a deeper look at the healthcare value statistics for the teams that make the (real) Sweet Sixteen, and then when Final Four time comes we’ll profile each of the markets involved to give some sense of what really drives healthcare value at a local level. Until then…enjoy the games!

 

 

 

Health Insurance Coverage Eight Years After the ACA

https://www.commonwealthfund.org/publications/issue-briefs/2019/feb/health-insurance-coverage-eight-years-after-aca

Fewer Uninsured Americans and Shorter Coverage Gaps, But More Underinsured

What does health insurance coverage look like for Americans today, more than eight years after the Affordable Care Act’s passage? In this brief, we present findings from the Commonwealth Fund’s latest Biennial Health Insurance Survey to assess the extent and quality of coverage for U.S. working-age adults. Conducted since 2001, the survey uses three measures to gauge the adequacy of people’s coverage:

  • whether or not they have insurance
  • if they have insurance, whether they have experienced a gap in their coverage in the prior year
  • whether high out-of-pocket health care costs and deductibles are causing them to be underinsured, despite having continuous coverage throughout the year.

As the findings highlighted below show, the greatest deterioration in the quality and comprehensiveness of coverage has occurred among people in employer plans. More than half of Americans under age 65 — about 158 million people — get their health insurance through an employer, while about one-quarter either have a plan purchased through the individual insurance market or are enrolled in Medicaid.1Although the ACA has expanded and improved coverage options for people without access to a job-based health plan, the law largely left the employer market alone.2

Survey Highlights

  • Today, 45 percent of U.S. adults ages 19 to 64 are inadequately insured — nearly the same as in 2010 — though important shifts have taken place.
  • Compared to 2010, many fewer adults are uninsured today, and the duration of coverage gaps people experience has shortened significantly.
  • Despite actions by the Trump administration and Congress to weaken the ACA, the adult uninsured rate was 12.4 percent in 2018 in this survey, statistically unchanged from the last time we fielded the survey in 2016.
  • More people who have coverage are underinsured now than in 2010, with the greatest increase occurring among those in employer plans.
  • People who are underinsured or spend any time uninsured report cost-related problems getting care and difficulty paying medical bills at at higher rates than those with continuous, adequate coverage.
  • Federal and state governments could enact policies to extend the ACA’s health coverage gains and improve the cost protection provided by individual-market and employer plans.

The 2018 Commonwealth Fund Biennial Heath Insurance Survey included a nationally representative sample of 4,225 adults ages 19 to 64. SSRS conducted the telephone survey between June 27 and November 11, 2018.3 (See “How We Conducted This Study” for more detail.)

WHO IS UNDERINSURED?

In this analysis, we use a measure of underinsurance that accounts for an insured adult’s reported out-of-pocket costs over the course of a year, not including insurance premiums, as well as his or her plan deductible. (The measure was first used in the Commonwealth Fund’s 2003 Biennial Health Insurance Survey.*) These actual expenditures and the potential risk of expenditures, as represented by the deductible, are then compared with household income. Specifically, we consider people who are insured all year to be underinsured if:

  • their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10 percent or more of household income; or
  • their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 5 percent or more of household income for individuals living under 200 percent of the federal poverty level ($24,120 for an individual or $49,200 for a family of four); or
  • their deductible constitutes 5 percent or more of household income.

The out-of-pocket cost component of the measure is only triggered if a person uses his or her plan to obtain health care. The deductible component provides an indicator of the financial protection the plan offers and the risk of incurring costs before someone gets health care. The definition does not include other dimensions of someone’s health plan that might leave them potentially exposed to costs, such as copayments or uncovered services. It therefore provides a conservative measure of underinsurance in the United States.

Compared to 2010, when the ACA became law, fewer people today are uninsured, but more people are underinsured. Of the 194 million U.S. adults ages 19 to 64 in 2018, an estimated 87 million, or 45 percent, were inadequately insured (see Tables 1 and 2).

Despite actions by the Trump administration and Congress to weaken the ACA, our survey found no statistically significant change in the adult uninsured rate by late 2018 compared to 2016 (Table 3). This finding is consistent with recent federal surveys, but other private surveys (including other Commonwealth Fund surveys) have found small increases in uninsured rates since 2016 (see “Changes in U.S. Uninsured Rates Since 2013”).

While there has been no change since 2010, statistically speaking, in the proportion of people who are insured now but have experienced a recent time without coverage, these reported gaps are of much shorter duration on average than they were before the ACA. In 2018, 61 percent of people who reported a coverage gap said it has lasted for six months or less, compared to 31 percent who said they had been uninsured for a year or longer. This is nearly a reverse of what it was like in 2012, two years before the ACA’s major coverage expansions. In that year, 57 percent of adults with a coverage gap reported it was for a year or longer, while one-third said it was a shorter gap.

There also has been some improvement in long-term uninsured rates. Among adults who were uninsured at the time of the survey, 54 percent reported they had been without coverage for more than two years, down from 72 percent before the ACA coverage expansions went into effect. The share of those who had been uninsured for six months or less climbed to 20 percent, nearly double the rate prior to the coverage expansions.

Of people who were insured continuously throughout 2018, an estimated 44 million were underinsured because of high out-of-pocket costs and deductibles (Table 1). This is up from an estimated 29 million in 2010 (data not shown). The most likely to be underinsured are people who buy plans on their own through the individual market including the marketplaces. However, the greatest growth in the number of underinsured adults is occurring among those in employer health plans.

WHY ARE INSURED AMERICANS SPENDING SO MUCH OF THEIR INCOME ON HEALTH CARE COSTS?

Several factors may be contributing to high underinsured rates among adults in individual market plans and rising rates in employer plans:

  1. Although the Affordable Care Act’s reforms to the individual market have provided consumers with greater protection against health care costs, many moderate-income Americans have not seen gains. The ACA’s essential health benefits package, cost-sharing reductions for lower- income families, and out-of-pocket cost limits have helped make health care more affordable for millions of Americans. But while the cost-sharing reductions have been particularly important in lowering deductibles and copayments for people with incomes under 250 percent of the poverty level (about $62,000 for a family of four), about half of people who purchase marketplace plans, and all of those buying plans directly from insurance companies, do not have them.4
  2. The bans against insurers excluding people from coverage because of a preexisting condition and rating based on health status have meant that individuals with greater health needs, and thus higher costs, are now able to get health insurance in the individual market. Not surprisingly, the survey data show that people with individual market coverage are somewhat more likely to have health problems than they were in 2010, which means they also have higher costs.
  3. While plans in the employer market historically have provided greater cost protection than plans in the individual market, businesses have tried to hold down premium growth by asking workers to shoulder an increasing share of health costs, particularly in the form of higher deductibles.5 While the ACA’s employer mandate imposed a minimum coverage requirement on large companies, the requirement amounts to just 60 percent of typical person’s overall costs. This leaves the potential for high plan deductibles and copayments.
  4. Growth in Americans’ incomes has not kept pace with growth in health care costs. Even when health costs rise more slowly, they can take an increasingly larger bite out of incomes.

It is well documented that people who gained coverage under the ACA’s expansions have better access to health care as a result.6 This has led to overall improvement in health care access, as indicated by multiple surveys.7 In 2014, the year the ACA’s major coverage expansions went into effect, the share of adults in our survey who said that cost prevented them from getting health care that they needed, such as prescription medication, dropped significantly (Table 4). But there has been no significant improvement since then.

The lack of continued improvement in overall access to care nationally reflects the fact that coverage gains have plateaued, and underinsured rates have climbed. People who experience any time uninsured are more likely than any other group to delay getting care because of cost (Table 5). And among people with coverage all year, those who were underinsured reported cost-related delays in getting care at nearly double the rate of those who were not underinsured.

There was modest but significant improvement following the ACA’s coverage expansions in the proportion of all U.S. adults who reported having difficulty paying their medical bills or said they were paying off medical debt over time (Table 4). Federal surveys have found similar improvements.8 However, those gains have stalled.

Inadequate insurance coverage leaves people exposed to high health care costs, and these expenses can quickly turn into medical debt. More than half of uninsured adults and insured adults who have had a coverage gap reported that they had had problems paying medical bills or were paying off medical debt over time (Table 6). Among people who had continuous insurance coverage, the rate of medical bill and debt problems is nearly twice as high for the underinsured as it is for people who are not underinsured.

Having continuous coverage makes a significant difference in whether people have a regular source of care, get timely preventive care, or receive recommended cancer screenings. Adults with coverage gaps or those who were uninsured when they responded to the survey were the least likely to have gotten preventive care and cancer screenings in the recommended time frame.

Being underinsured, however, does not seem to reduce the likelihood of having a usual source of care or receiving timely preventive care or cancer screens — provided a person has continuous coverage. This is likely because the ACA requires insurers and employers to cover recommended preventive care and cancer screens without cost-sharing. Even prior to the ACA, a majority of employer plans provided predeductible coverage of preventive services.9

Conclusion and Policy Implications

U.S. working-age adults are significantly more likely to have health insurance since the ACA became law in 2010. But the improvement in uninsured rates has stalled. In addition, more people have health plans that fail to adequately protect them from health care costs, with the fastest deterioration in cost protection occurring in the employer market. The ACA made only minor changes to employer plans, and the erosion in cost protection has taken a bite out of the progress made in Americans’ health coverage since the law’s enactment.

Both the federal government and the states, however, have the ability to extend the law’s coverage gains and improve the cost protection of both individual-market and employer plans. Here is a short list of policy options:

  • Expand Medicaid without restrictions. The 2018 midterm elections moved as many as five states closer to joining the 32 states that, along with the District of Columbia, have expanded eligibility for Medicaid under the ACA.10 As many as 300,000 people may ultimately gain coverage as a result.11 But, encouraged by the Trump administration, several states are imposing work requirements on people eligible for Medicaid — a move that could reverse these coverage gains. So far, the U.S. Department of Health and Human Services (HHS) has approved similar work-requirement waivers in seven states and is considering applications from at least seven more. Arkansas imposed a work requirement last June, and, to date, more than 18,000 adults have lost their insurance coverage as a result.
  • Ban or place limits on short-term health plans and other insurance that doesn’t comply with the ACA. The Trump administration loosened regulations on short-term plans that don’t comply with the ACA, potentially leaving people who enroll in them exposed to high costs and insurance fraud. These plans also will draw healthier people out of the marketplaces, increasing premiums for those who remain and federal costs of premium subsidies. Twenty-three states have banned or placed limits on short-term insurance policies. Some lawmakers have proposed a federal ban.
  • Reinsurance, either state or federal. The ACA’s reinsurance program was effective in lowering marketplace premiums. After it expired in 2017, several states implemented their own reinsurance programs.12  Alaska’s program reduced premiums by 20 percent in 2018. These lower costs particularly help people whose incomes are too high to qualify for ACA premium tax credits. More states are seeking federal approval to run programs in their states. Several congressional bills have proposed a federal reinsurance program.
  • Reinstate outreach and navigator funding for the 2020 open-enrollment period. The administration has nearly eliminated funding for advertising and assistance to help people enroll in marketplace plans.13 Research has found that both activities are effective in increasing enrollment.14 Some lawmakers have proposed reinstatingthis funding.
  • Lift the 400-percent-of-poverty cap on eligibility for marketplace tax credits. This action would help people with income exceeding $100,000 (for a family of four) better afford marketplace plans. The tax credits work by capping the amount people pay toward their premiums at 9.86 percent. Lifting the cap has a built in phase out: as income rises, fewer people qualify, since premiums consume an increasingly smaller share of incomes. RAND researchers estimate that this policy change would increase enrollment by 2 million and lower marketplace premiums by as much as 4 percent as healthier people enroll. It would cost the federal government an estimated $10 billion annually.15 Legislation has been introduced to lift the cap.
  • Make premium contributions for individual market plans fully tax deductible. People who are self-employed are already allowed to do this.16
  • Fix the so-called family coverage glitch. People with employer premium expenses that exceed 9.86 percent of their income are eligible for marketplace subsidies, which trigger a federal tax penalty for their employers. There’s a catch: this provision applies only to single-person policies, leaving many middle-income families caught in the “family coverage glitch.” Congress could lower many families’ premiums by pegging unaffordable coverage in employer plans to family policies instead of single policies.17

REDUCE COVERAGE GAPS

  • Inform the public about their options. People who lose coverage during the year are eligible for special enrollment periods for ACA marketplace coverage. Those eligible for Medicaid can sign up at any time. But research indicates that many people who lose employer coverage do not use these options.18 The federal government, the states, and employers could increase awareness of insurance options outside the open-enrollment periods through advertising and education.
  • Reduce churn in Medicaid. Research shows that over a two-year period, one-quarter of Medicaid beneficiaries leave the program and become uninsured.19 Many do so because of administrative barriers.20 By imposing work requirements, as some states are doing, this involuntary disenrollment is likely to get worse. To help people stay continuously covered, the federal government and the states could consider simplifying and streamlining the enrollment and reenrollment processes.
  • Extend the marketplace open-enrollment period. The current open-enrollment period lasts just 45 days. Six states that run their own marketplaces have longer periods, some by as much as an additional 45 days. Other states, as well as the federal marketplace, could extend their enrollment periods as well.

IMPROVE INDIVIDUAL-MARKET PLANS’ COST PROTECTIONS

  • Fund and extend the cost-sharing reduction subsidies. The Trump administration eliminated payments to insurers for offering plans with lower deductibles and copayments. Insurers, which by law must still offer reduced-cost plans, are making up the lost revenue by raising premiums. But this fix, while benefiting enrollees who are eligible for premium tax credits, has distorted both insurer pricing and consumer choice.21 In addition, it is unknown whether the administration’s support for the fix will continue in the future, creating uncertainty for insurers.22 Congress could reinstate the payments to insurers and consider making the plans available to people with higher earnings.
  • Increase the number of services excluded from the deductible.Most plans sold in the individual market exclude certain services from the deductible, such as primary care visits and certain prescriptions.23As the survey data suggest, these types of exclusions appear to be important in ensuring access to preventive care among people who have coverage but are underinsured. In 2016, HHS provided a standardized plan option for insurers that excluded eight health services — including mental health and substance-use disorder outpatient visits and most prescription drugs — from the deductible at the silver and gold level.24 The Trump administration eliminated the option in 2018. Congress could make these exceptions mandatory for all plans.

IMPROVE EMPLOYER PLANS’ COST PROTECTIONS

  • Increase the ACA’s minimum level of coverage. Under the ACA, people in employer plans may become eligible for marketplace tax credits if the actuarial value of their plan is less than 60 percent, meaning that under 60 percent of health care costs, on average, are covered. Congress could increase this to the 70 percent standard of silver-level marketplace plans, or even higher.
  • Require deductible exclusions. Congress could require employers to increase the number of services that are covered before someone meets their deductible. Most employer plans exclude at least some services from their deductibles.25 Congress could specify a minimum set of exclusions for employer plans that might resemble the standardized-choice options that once existed for ACA plans.
  • Refundable tax credits for high out-of-pocket costs. Congress could make refundable tax credits available to help insured Americans pay for qualifying out-of-pocket costs that exceed a certain percentage of their income.26
  • Protect consumers from surprise medical bills. Several states have passed laws that protect patients and their families from unexpected medical bills, generally from out-of-network providers.27A bipartisan group of U.S. senators has proposed federal legislation to protect consumers, including people enrolled in employer and individual-market plans.

Health care costs are primarily what’s driving growth in premiums across all health insurance markets. Employers and insurers have kept premiums down by increasing consumers’ deductibles and other cost-sharing, which in turn is making more people underinsured. This means that policy options like the ones we’ve highlighted above will need to be paired with efforts to slow medical spending. These could include changing how health care is organized and providers are paid to achieve greater value for health care dollars and better health outcomes.28 The government also could tackle rising prescription drug costs29 and use antitrust laws to combat the growing concentration of insurer and provider markets.30

 

 

Financial worries keep hospital CEOs up at night

https://www.healthcaredive.com/news/financial-worries-keep-hospital-ceos-up-at-night/546982/

Image result for ceo concerns

Dive Brief:

  • Financial challenges, including increasing costs, shaky Medicaid reimbursement, reductions in operating costs and bad debt, ranked No. 1 on the list of hospital CEO worries in 2018, according to an American College of Healthcare Executives poll.
  • Government mandates and patient safety and quality tied for second place in ACHE’s survey of top issues facing health systems. Workforce shortages came in third.
  • A little more than 350 execs responded to the survey and ranked 11 concerns their facilities faced last year. Behavioral health and addiction issues, patient satisfaction, care access, physician-hospital relations, tech, population health management and company reorganization filled in the remaining slots.

Dive Insight:

No matter which cog in the healthcare system one blames for the skyrocketing costs of healthcare (big pharma inflating the list prices of drugs; hospitals for upmarking services; insurers for leaving gaps in care resulting in surprise bills) consumers’ pocketbooks aren’t the only ones affected.

A separate American Hospital Association-backed study predicted health systems will lose $218 billion in federal payments by 2028, and private payers (whose dollars would normally help hospitals make up the difference) have been curtailing reimbursements as well.

Bad debt was another fear in the ACHE report. Uncompensated care costs peaked in 2013 at $46.4 billion and, though the figures have decreased slightly since then, hospitals shelled out $38.3 billion in 2016. Wisconsin alone was on the hook for $1.1 billion in uncompensated care in fiscal year 2017.

“The survey results indicate that leaders are working to overcome challenges of balancing limited reimbursements against the rising costs of attracting and retaining talented staff to provide that care, among other things,” ACHE president and CEO Deborah Bowen said in a statement.

Other financial concerns included competition, government funding cuts, the transition to value-based care, revenue cycle management and price transparency.

And 70% of hospital CEOs were worried about shifting CMS regulations in 2018, along with regulatory/legislative uncertainty (61%) and cost of demonstrating compliance (59%) — unsurprising, given the current administration’s track record of unpredictability.

Patient safety and quality of care was also top of mind for health system CEOs, with over half of respondents anxious about the high price of medications, involving physicians in the culture of quality and safety and getting them to reduce unnecessary tests and procedures.

Also of interest was the high rank given to addressing behavioral health and addiction issues, according to Bowen, which ranked fifth in its first year of being included in the survey. The topic has been front and center in the industry of late, in line with the increasing recognition of social determinants of health and the breakdown in silos of care.

Ranking of the issues has remained largely constant since 2016, though in 2017 more hospital CEOs were concerned about personnel shortages than patient safety and quality.

 

“The Inevitable Math behind Entitlement Reform”

https://theincidentaleconomist.com/wordpress/the-inevitable-math-behind-entitlement-reform/

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That’s the title of a new NEJM Perspective by Michael Chernew and me. After crunching the numbers, our argument is that for long term cost control we will probably need to address growth in per capita health care utilization. The easy “solutions” won’t be enough.

Much of the projected increase in inflation-adjusted spending on health care entitlements, particularly for Medicare, stems from assumed increases in utilization (e.g., 2.75 percentage points of the 5.33% annual projected growth for Medicare spending). Strategies for holding utilization growth below projections (and more in line with very recent historical growth) will thus be central to the success of any attempt at cost containment.

[One approach] is to dissuade patients from seeking care by charging them more at the point of service. About 85% of Medicare beneficiaries have supplemental plans (e.g., Medigap) that reduce their out-of-pocket costs. Policies that limit the generosity of such plans could reduce Medicare spending considerably. However, such strategies would increase beneficiaries’ financial risks, reduce access to care, and probably exacerbate health disparities.

A second strategy is to help beneficiaries improve their health by enhancing long-term care management and preventive services with the goal of avoiding more expensive services. Evidence suggests that although this type of approach is probably beneficial to patients and may be cost-effective, it is generally not cost saving.

The piece continues with some more promising approaches, in our view. Click to read it in full (unfortunately pay-walled though).

 

Congress Urged To Cut Medicare Payments To Many Stand-Alone ERs

Congress Urged To Cut Medicare Payments To Many Stand-Alone ERs

The woman arrived at the emergency department gasping for air, her severe emphysema causing such shortness of breath that the physician who examined her put her on a ventilator immediately to help her breathe.

The patient lived across the street from the emergency department in suburban Denver, said Dr. David Friedenson, who cared for her that day a few years ago. The facility wasn’t physically located at a hospital but was affiliated with North Suburban Medical Center several miles away.

Free-standing emergency departments have been cropping up in recent years and now number more than 500, according to the Medicare Payment Advisory Commission (MedPAC), which reports to Congress. Often touted as more convenient, less crowded alternatives to hospitals, they often attract suburban walk-in patients with good insurance whose medical problems are less acute than those who visit an emergency room located in a hospital.

If a recent MedPAC proposal is adopted, however, some providers predict that these free-standing facilities could become scarcer. Propelling the effort are concerns that MedPAC’s payment for services at these facilities is higher than it should be since the patients who visit them are sometimes not as severely injured or ill as those at on-campus facilities.

The proposal would reduce Medicare payment rates by 30 percent for some services at hospital-affiliated free-standing emergency departments that are located within 6 miles of an on-campus hospital emergency department.

“There has been a growth in free-standing emergency departments in urban areas that does not seem to be addressing any particular access need for emergency care,” said James Mathews, executive director of MedPAC. The convenience of a neighborhood emergency department may even induce demand, he said, calling it an “if you build it, they will come” effect.

Emergency care is more expensive than a visit to a primary care doctor or urgent care center, in part because emergency departments have to be on standby 24/7, with expensive equipment and personnel ready to handle serious car accidents, gunshot wounds and other trauma cases. Even though free-standing emergency departments have lower standby costs than hospital-based facilities, they typically receive the same Medicare rate for emergency services. The Medicare “facility fee” payments, which include some ancillary lab and imaging services but not reimbursement to physicians, are designed to help defray hospitals’ overhead costs.

The proposal would affect only payments for Medicare beneficiaries. But private insurers often consider Medicare payment policies when setting their rules.

According to a MedPAC analysis of five markets — Charlotte, N.C.; Cincinnati; Dallas; Denver; and Jacksonville, Fla. — 75 percent of the free-standing facilities were located within 6 miles of a hospital with an emergency department. The average drive time to the nearest hospital was 10 minutes.

Overall, the number of outpatient emergency department visits by Medicare beneficiaries increased 13.6 percent per capita from 2010 to 2015, compared with a 3.5 percent growth in physician visits, according to MedPAC. (The reported data doesn’t distinguish between conventional and free-standing emergency facility visits.)

“I think [the MedPAC proposal] is a move in the right direction,” said Dr. Renee Hsia, a professor of emergency medicine and health policy at the University of California-San Francisco who has written about free-standing emergency departments. “We have to understand there are limited resources, and the fixed costs for stand-alone EDs are lower.”

Hospital representatives say the proposal could cause some free-standing emergency departments to close their doors.

“We are deeply concerned that MedPAC’s recommendation has the potential to reduce patient access to care, particularly in vulnerable communities, following a year in which hospital EDs responded to record-setting natural disasters and flu infections,” Joanna Hiatt Kim, vice president for payment policy at the American Hospital Association, said in a statement.

Independent free-standing emergency departments that are not affiliated with a hospital would not be affected by the MedPAC proposal. These facilities,which make up about a third of all free-standing emergency facilities, aren’t clinically integrated with a hospital and can’t participate in the Medicare program.

The MedPAC proposal will be included in the group’s report to Congress in June.

Even though stand-alone emergency facilities might not routinely treat patients with serious trauma, they can provide lifesaving care, proponents say.

Friedenson said that for his emphysema patient, avoiding the 15- to 20-minute drive to the main hospital made a critical difference.

“By stopping at our emergency department, I truly think her life was saved,” he said.

 

 

Would Americans Accept Putting Health Care on a Budget?

https://theincidentaleconomist.com/wordpress/upshot-maryland-global-payments/

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If you wanted to get control of your household spending, you’d set a budget and spend no more than it allowed. You might wonder why we don’t just do the same for spending on American health care.

Though government budgets are different from household budgets, the idea of putting a firm limit on health care spending is far from unknown. Many countries, including Canada, Switzerland and Britain, pay hospitals entirely or partly this way.

Under such a capped system, called global budgeting, a hospital has an incentive to deliver less care — including reducing hospital admissions — and to increase the efficiency of the care it does deliver.

Capping hospital spending raises concerns about harming quality and access. On these grounds, hospital executives and patient advocates might strongly resist spending constraints in the United States.

And yet some American hospitals and health systems already operate this way, including Kaiser Permanente and the Veterans Health Administration. To address concerns about access and quality, these programs are usually paired with quality monitoring and improvement initiatives.

That brings us to Maryland’s experience with a capped system. The evidence from the state is far from conclusive, but this is a weighty and much-watched experiment for health researchers, so it’s worth diving into the details of the latest studies.

Starting in 2010 with eight rural hospitals, and expanding its plan in 2014 to the state’s other hospitals, Maryland set global budgets for hospital inpatient and outpatient services, as well as emergency department care. Each hospital’s budget is based on its past revenue and encompasses all payers for care, including Medicare, Medicaid and commercial market insurance. Budgets for hospitals are updated every year to ensure that their spending grows more slowly than the state’s economy.

Because physician services are not part of the budgets, there is an incentive to provide more physician office visits, including primary care. According to some reports, Maryland hospitals are responding to this incentive by providing additional support outside their walls to patients who have chronic illnesses or who have recently been discharged from a hospital. Greater use of primary care by such patients, for example, could reduce the need for future hospital admissions.

In 2013, early results found, rural hospital admissions and readmissions were both down from their levels before the system was introduced.

In the first three years of the expanded program, revenue growth for Maryland’s hospitals stayed below the state-set cap of 3.58 percent, saving Medicare $586 million. Spending was lower on hospital outpatient services, including visits to the emergency department that do not lead to hospital admissions. In addition, preventable health conditions and mortality fell.

According to a new report from RTI, a nonprofit research organization, Maryland’s program did not reap savings for the privately insured population (even though inpatient admissions fell for that group). However, the study corroborated the impressive Medicare savings, driven by a drop in hospital admissions. In reaching these findings, the study compared Maryland’s hospitals with analogous ones in other states, which served as stand-ins for what would have happened to Maryland hospitals had global budgeting not been introduced.

But a recent study, published in JAMA Internal Medicine, was decidedly less encouraging.

Led by Eric Roberts, a health economist with the University of Pittsburgh, the study examined how Maryland achieved its Medicare savings, using data from 2009-2015. Like RTI’s report, it also compared Maryland hospitals’ experience with that of comparable hospitals elsewhere.

However, unlike the RTI report, Mr. Roberts’s study did not find consistent evidence that changes in hospital use in Maryland could be attributed to global budgeting. His study also examined primary care use. Here, too, it did not find consistent evidence that Maryland differed from elsewhere. Because of the challenges of matching Maryland hospitals to others outside of the state for comparison, the authors took several statistical approaches in reaching their findings. With some approaches, the changes observed in Maryland were comparable to those in other states, raising uncertainty about their cause.

A separate study by the same authors published in Health Affairs analyzed the earlier global budget program for Maryland’s rural hospitals. They were able to use other Maryland hospitals as controls. Still, after three years, they did not find an impact of the program on hospital use or spending.

Changes brought about by the Affordable Care Act, which also passed in 2010, coincide with Maryland’s hospital payment reforms. The A.C.A. included many provisions aimed at reducing spending, and those changes could have led to hospital use and spending in other states on par with those seen in Maryland.

A limitation of Maryland’s approach is that payments to physicians are not included in its global budgets. “Maryland didn’t put the state’s health system on a budget — it only put hospitals on a budget,” said Ateev Mehrotra, the study’s senior author and an associate professor of health care policy and medicine at Harvard Medical School. “Slowing health care spending and fostering better coordination requires including physicians who make the day-to-day decisions about how care is delivered.”

broader global budget program for Maryland is in the works. The U.S. Centers for Medicare and Medicaid Services is reviewing a state application that commits to global budgets for Medicare physician and hospital spending. An editorial that accompanied the JAMA Internal Medicine study noted that a few years may be insufficient time to detect changes. It suggests that five to 10 years may be more appropriate.

“Maryland hospitals are only beginning to capitalize on the model’s incentives to transform care in their communities,” said Joshua Sharfstein, a co-author of the editorial and a professor at the Johns Hopkins Bloomberg School of Public Health. “This means that as Maryland moves forward with new stages of innovation, there is a great deal more potential upside.” As former secretary of health and mental hygiene in Maryland, he helped institute the Maryland hospital payment approach.

Global budgets are unusual in the United States, but their intuitive appeal is growing. A California bill is calling for a commission that would set a global budget for the state. And soon Maryland won’t be the only state using such a system. Pennsylvania is planning a similar program for its rural hospitals.

Can this system work across America?

How much spending control is ceded to the government is the major battle line in health care politics. An approach like Maryland’s doesn’t just poke a toe over that line, it leaps miles beyond it.

But the United States has been trying to get a handle on health care costs for decades, spending far more than other advanced nations without necessarily getting better outcomes. A successful Maryland experiment could open an avenue to cut costs through the states, perhaps one state at a time, bypassing the steep political hurdle of selling a national plan.