It’s Health Value March Madness!


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!




The Disappearing Doctor: How Mega-Mergers Are Changing the Business of Medical Care

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Is the doctor in?

In this new medical age of urgent care centers and retail clinics, that’s not a simple question. Nor does it have a simple answer, as primary care doctors become increasingly scarce.

“You call the doctor’s office to book an appointment,” said Matt Feit, a 45-year-old screenwriter in Los Angeles who visited an urgent care center eight times last year. “They’re only open Monday through Friday from these hours to those hours, and, generally, they’re not the hours I’m free or I have to take time off from my job.

“I can go just about anytime to urgent care,” he continued, “and my co-pay is exactly the same as if I went to my primary doctor.”

That’s one reason big players like CVS Health, the drugstore chain, and most recently Walmart, the giant retailer, are eyeing deals with Aetna and Humana, respectively, to use their stores to deliver medical care.

People are flocking to retail clinics and urgent care centers in strip malls or shopping centers, where simple health needs can usually be tended to by health professionals like nurse practitioners or physician assistants much more cheaply than in a doctor’s office. Some 12,000 are already scattered across the country, according to Merchant Medicine, a consulting firm.

On the other side, office visits to primary care doctors declined 18 percent from 2012 to 2016, even as visits to specialists increased, insurance data analyzed by the Health Care Cost Institute shows.

There’s little doubt that the front line of medicine — the traditional family or primary care doctor — has been under siege for years. Long hours and low pay have transformed pediatric or family practices into unattractive options for many aspiring physicians.

And the relationship between patients and doctors has radically changed. Apart from true emergency situations, patients’ expectations now reflect the larger 24/7 insta-culture of wanting everything now. When Dr. Carl Olden began watching patients turn to urgent care centers opening around him in Yakima, Wash., he and his partners decided to fight back.

They set up similar clinics three years ago, including one right across the street from their main office in a shopping center.

The practice not only was able to retain its patients, but then could access electronic health records for those off-site visits, avoiding a bad drug interaction or other problems, said Dr. Olden, who has been a doctor for 34 years.

“And we’ve had some folks come into the clinics who don’t have their own primary care physicians,” he said. “So we’ve been able to move them into our practice.”

By opening clinics to compete with urgent care centers, Dr. Carl Olden’s practice in Yakima, Wash., was able to retain its patients and move some walk-ins into the fold.
Merger Maneuvers

The new deals involving major corporations loom over doctors’ livelihoods, intensifying pressure on small practices and pushing them closer to extinction.

The latest involves Walmart and Humana, a large insurer with a sizable business offering private Medicare plans. While their talks are in the early stages, one potential partnership being discussed would center on using the retailer’s stores and expanding its existing 19 clinics for one-stop medical care. Walmart stores already offer pharmacy services and attract older people.

In addition, the proposed $69 billion merger between CVS Health, which operates 1,100 MinuteClinics, and Aetna, the giant insurer, would expand the customer bases of both. The deal is viewed as a direct response to moves by a rival insurer, UnitedHealth Group, which employs more than 30,000 physicians and operates one of the country’s largest urgent-care groups, MedExpress, as well as a big chain of free-standing surgery centers.

While both CVS and UnitedHealth have large pharmacy benefits businesses that would reap considerable rewards from the stream of prescriptions generated by the doctors at these facilities, the companies are also intent on managing what type of care patients get and where they go for it. And the wealth of data mined from consolidation would provide the companies with a map for steering people one way or another.

On top of these corporate partnerships, Amazon, JP Morgan and Berkshire Hathaway decided to join forces to develop some sort of health care strategy for their employees, expressing frustration with the current state of medical care. Their announcement, and Amazon’s recent forays into these fields, are rattling everyone from major hospital networks to pharmacists.

Doctors, too, are watching the evolution warily.

“With all of these deals, there is so much we don’t know,” said Dr. Michael Munger, president of the American Academy of Family Physicians. “Are Aetna patients going to be mandated to go to a CVS MinuteClinic?”

Dr. Susan Kressly, a pediatrician in Warrington, Pa., has watched patients leave. Parents who once brought their children to her to treat an ear infection or check for strep, services whose profits helped offset some of the treatments she offered, are now visiting the retail clinics or urgent care centers.

What is worse, some patients haven’t been getting the right care. “Some of the patients with coughs were being treated with codeine-based medicines, which is not appropriate at all for this age group,” Dr. Kressly said.

Even doctors unfazed by patients going elsewhere at night or on weekends are nervous about the entry of the corporate behemoths.

“I can’t advertise on NBC,” said Dr. Shawn Purifoy, who practices family medicine in Malvern, Ark. “CVS can.”

Nurse practitioners allow Dr. Purifoy to offer more same-day appointments; he and two other practices in town take turns covering emergency phone calls at night.

And doctors keep facing new waves of competition. In California, Apple recently decided to open up its own clinics to treat employees. Other companies are offering their workers the option of seeking medical care via their cellphones. Investors are also pouring money into businesses aiming to create new ways of providing primary care by relying more heavily on technology.

Dr. Olden’s office door. In the age of urgent care centers and consolidations, the traditional doctor is being pushed closer to extinction.CreditDavid Ryder for The New York Times

Dr. Mark J. Werner, a consultant for the Chartis Group, which advises medical practices, emphasized that convenience of care didn’t equal quality or, for that matter, less expensive care.

“None of the research has shown any of these approaches to delivering care has meaningfully addressed cost,” Dr. Werner said.

Critics of retail clinics argue that patients are given short shrift by health professionals unfamiliar with their history, and may be given unnecessary prescriptions. But researchers say neither has been proved in studies.

“The quality of care that you see at a retail clinic is equal or superior to what we see in a doctor’s office or emergency department,” said Dr. Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School, who has researched the retail clinics. “And while there is a worry that they will prescribe antibiotics to everybody, we see equal rates occurring between the clinics and doctor’s offices.”

Still, while the retail clinics over all charge less, particularly compared with emergency rooms, they may increase overall health care spending. Consumers who not long ago would have taken a cough drop or gargled with saltwater to soothe a sore throat now pop into their nearby retail clinic for a strep test.

Frustration with the nation’s health care system has fueled a lot of the recent partnerships. Giant companies are already signaling a desire to tackle complex care for people with a chronic health condition like diabetes or asthma.

“We’re evolving the retail clinic concept,” said Dr. Troyen A. Brennan, the chief medical officer for CVS. The company hopes its proposed merger with Aetna will allow it to transform its current clinics, where a nurse practitioner might offer a flu shot, into a place where patients can have their conditions monitored. “It requires new and different work by the nurse practitioners,” he said.

Dr. Brennan said CVS was not looking to replace patients’ primary care doctors. “We’re not trying to buy up an entire layer of primary care,” he said.

But people will have the option of using the retail clinic to make sure their hypertension or diabetes is well controlled, with tests and counseling provided as well as medications. The goal is to reduce the cost of care for what would otherwise be very expensive conditions, Dr. Brennan said.

If the company’s merger with Aetna goes through, CVS will initially expand in locations where Aetna has a significant number of customers who could readily go to CVS, Dr. Brennan said.

UnitedHealth has also been aggressively making inroads, adding a large medical practice in December and roughly doubling the number of areas where its OptumCare doctors will be to 75 markets in the United States. It is also experimenting with putting its MedExpress urgent care clinics into Walgreens stores.

Big hospital groups are also eroding primary care practices: They employed 43 percent of the nation’s primary care doctors in 2016, up from 23 percent in 2010. They are also aggressively opening up their own urgent care centers, in part to try to ensure a steady flow of patients to their facilities.

One Medical has centers in eight cities with 400 providers, making it one of the nation’s largest independent groups. 

HCA Healthcare, the for-profit hospital chain, doubled its number of urgent care centers last year to about 100, according to Merchant Medicine. GoHealth Urgent Care has teamed up with major health systems like Northwell Health in New York and Dignity Health in San Francisco, to open up about 80 centers.

“There is huge consolidation in the market right now,” said Dr. Jeffrey Le Benger, the chief executive of Summit Medical Group, a large independent physician group in New Jersey. “Everyone is fighting for the primary care patient.” He, too, has opened up urgent care centers, which he describes as a “loss leader,” unprofitable but critical to managing patients.

Eva Palmer, 22, of Washington, D.C., sought out One Medical, a venture-backed practice that is one of the nation’s largest independent groups, when she couldn’t get in to see a primary care doctor, even when she became ill. After paying the annual fee of about $200, she was able to make an appointment to get treatment for strep throat and pneumonia.

“In 15 minutes, I was able to get the prescriptions I needed — it was awesome,” Ms. Palmer said.

Patients also have the option of getting a virtual consultation at any time.

By using sophisticated computer systems, One Medical, which employs 400 doctors and health staff members in eight major cities, allows its physicians to spend a half-hour with every patient.

Dr. Navya Mysore joined One Medical after working for a large New York health system, where “there was a lot of bureaucracy,” she said. She now has more freedom to practice medicine the way she wants and focus more on preventive health, she said.

By being so readily available, One Medical can reduce visits to an emergency room or an urgent care center, said Dr. Jeff Dobro, the company’s chief medical officer.

As primary care doctors become an “increasingly endangered species, it is very hard to practice like this,” he said.

But more traditional doctors like Dr. Purifoy stress the importance of continuity of care. “It takes a long time to gain the trust of the patient,” he said. He is working with Aledade, another company focused on reinventing primary care, to make his practice more competitive.

One longtime patient, Billy Ray Smith, 70, learned that he needed cardiac bypass surgery even though he had no symptoms. He credits Dr. Purifoy with urging him to get a stress test.

“If he hadn’t insisted,” Mr. Smith said, “it would have been all over for me.” Dr. Purifoy’s nurse routinely checks on him, and if he needs an appointment, he can usually see the doctor that day or the next.

“I trust him 100 percent on what he says and what he does,” Mr. Smith said.

Those relationships take time and follow-up. “It’s not something I can do in a minute,” Dr. Purifoy said. “You’re never going to get that at a MedExpress.”




Wedged Into Narrow-Network Plans

Despite federal rules requiring plans to keep up-to-date directories, consumers may lack access to clear information about which health plans have ‘narrow networks’ of providers or which hospitals and doctors are in or out of an insurer’s network.

As a breast cancer survivor, Donna Catanuchi said she knows she can’t go without health insurance. But her monthly premium of $855 was too high to afford.

“It was my biggest expense and killing me,” said Catanuchi, 58, of Mullica Hill, N.J.

A “navigator” who helps people find coverage through the Affordable Care Act found a solution. But it required Catanuchi, who works part time cleaning offices, to switch to a less comprehensive plan, change doctors, drive farther to her appointments and pay $110 a visit out-of-pocket — or about three times what she was paying for her follow-up cancer care.

She now pays $40 a month for coverage, after she qualified for a substantial government subsidy.

Catanuchi’s switch to a more affordable but restrictive plan reflects a broad trend in insurance plan design over the past few years. The cheaper plans offer far narrower networks of doctors and hospitals and less coverage of out-of-network care. But many consumers are overwhelmed or unaware of the trade-offs they entail, insurance commissioners and policy experts say.

With enrollment for ACA health plans beginning Nov. 1, they worry that consumers too often lack access to clear information about which health plans have “narrow networks” of medical providers or which hospitals and doctors are in or out of an insurer’s network, despite federal rules requiring plans to keep up-to-date directories.

“It’s very frustrating for consumers,” said Betsy Imholz, who represents the advocacy group Consumers Union at the National Association of Insurance Commissioners. “Health plan provider directories are often inaccurate, and doctors are dropping in and out all the time.”

These more restrictive plans expose people to larger out-of-pocket costs, less access to out-of-network specialists and hospitals, and “surprise” medical bills from unforeseen out-of-network care.

More than 14 million people buy health insurance on the individual market — largely through the ACA exchanges, and they will be shopping anew this coming month.


For 2018, 73 percent of plans offered through the exchanges were either health maintenance organizations (HMOs) or exclusive provider organizations (EPOs), up from 54 percent in 2015.

Both have more restrictive networks and offer less out-of-network coverage compared with preferred provider organizations (PPOs), which represented 21 percent of health plans offered through the ACA exchanges in 2018, according to Avalere, a health research firm in Washington, D.C.

PPOs typically provide easier access to out-of-network specialists and facilities, and partial — sometimes even generous — payment for such services.

Measured another way, the number of ACA plans offering any out-of-network coverage declined to 29 percent in 2018 from 58 percent in 2015, according to a recent analysis by the Robert Wood Johnson Foundation.

For example, in California, HMO and EPO enrollment through Covered California, the state’s exchange, grew from 46 percent in 2016 to 70 percent in 2018, officials there said. Over the same period, PPO enrollment declined from 54 percent to 30 percent.

In contrast, PPOs have long been and remain the dominant type of health plan offered by employers nationwide. Forty-nine percent of the 152 million people and their dependents who were covered through work in 2018 were enrolled in a PPO-type plan. Only 16 percent were in HMOs, according to the Kaiser Family Foundation’s annual survey of employment-based health insurance.

The good news for people buying health insurance on their own is that the trend toward narrow networks appears to be slowing.

“When premiums shot up over the past few years, insurers shifted to more restrictive plans with smaller provider networks to try and lower costs and premiums,” said Chris Sloan, a director at Avalere. “With premium increases slowing, at least for now, that could stabilize.”

Some research supports this prediction. Daniel Polsky, a health economist at the University of Pennsylvania, found that the number of ACA plans nationwide with narrow physician networks declined from 25 percent in 2016 to 21 percent in 2017.

Polsky is completing an analysis of 2018 plans and expects the percent of narrow network plans to remain “relatively constant” for this year and into 2019.

“Fewer insurers are exiting the marketplace, and there’s less churn in the plans being offered,” said Polsky. “That’s good news for consumers.”

Insurers may still be contracting with fewer hospitals, however, to constrain costs in that expensive arena of care, according to a report by the consulting firm McKinsey & Co. It found that 53 percent of plans had narrow hospital networks in 2017, up from 48 percent in 2014.

“Narrow networks are a trade-off,” said Paul Ginsburg, a health care economist at the Brookings Institution. “They can be successful when done well. At a time when we need to find ways to control rising health care costs, narrow networks are one legitimate strategy.”

Ginsburg also notes that there’s no evidence to date that the quality of care is any less in narrow versus broader networks, or that people are being denied access to needed care.

Mike Kreidler, Washington state’s insurance commissioner, said ACA insurers in that state “are figuring out they can’t get away with provider networks that are inadequate to meet people’s needs.”

“People have voted with their feet, moving to more affordable choices like HMOs but they won’t tolerate draconian restrictions,” Kreidler said.

The state is stepping in, too. In December 2017, Kreidler fined one insurer — Coordinated Care — $1.5 million for failing to maintain an adequate network of doctors. The state suspended $1 million of the fine if the insurer had no further violations. In March 2018, the plan was docked another $100,000 for similar gaps, especially a paucity of specialists in immunology, dermatology and rheumatology. The $900,000 in potential fines continues to hang over the company’s head.

Centene Corp, which owns Coordinated Care, has pledged to improve its network.

Pennsylvania Insurance Commissioner Jessica Altman said she expects residents buying insurance in the individual marketplace for 2019 to have a wider choice of providers in their networks.

“We think and hope insurers are gradually building more stable networks of providers,” said Altman.


Bad publicity and recent state laws are pushing insurers to modify their practices and shore up their networks.

About 20 states now have laws restricting surprise bills or balance billing, or which mandate mediation over disputed medical bills, especially those stemming from emergency care.

Even more have rules on maintaining accurate, up-to-date provider directories.

The problem is the laws vary widely in the degree to which they “truly protect consumers,” said Claire McAndrew, a health policy analyst at Families USA, a consumer advocacy group in Washington, D.C. “It’s a patchwork system with some strong consumer protections and a lot of weaker ones.”

“Some states don’t have the resources to enforce rules in this area,” said Justin Giovannelli, a researcher at the Center on Health Insurance Reforms at Georgetown University. “That takes us backward in assuring consumers get coverage that meets their needs.”



Can A Community Hospital Stick To Its Mission When It Goes For-Profit?

Proponents of hospital mergers say the change can help struggling nonprofit hospitals "thrive," with an infusion of cash to invest in updated technology and top clinical staff. But research shows the price of care, especially for low-income patients, usually rises when a hospital joins a for-profit corporation.

Mission Health, the largest hospital system in western North Carolina, provided $100 million in free charity care last year. This year, it has partnered with 17 civic organizations to deliver care for substance abuse by people who are low-income.

Based in bucolic Asheville, the six-hospital system also screens residents for food insecurity; provides free dental care to children in rural areas via the “ToothBus” mobile clinic; helps the homeless find permanent housing and encourages its 12,000 employees to volunteer at schools, churches and nonprofit groups.

Asheville residents say the hospital is an essential resource.

“Mission Health helped saved my life,” says Susan ReMine, a 68-year-old Asheville resident for 30 years who now lives in nearby Fletcher, N.C. She was in Mission Health’s main hospital in Asheville for three weeks last fall with kidney failure. And, from 2006 to 2008, a Mission Health-supported program called Project Access provided ReMine with free care after she lost her job because of illness.

After 130 years as a nonprofit with deep roots in the community, Mission Health announced in March that it was seeking to be bought by HCA Healthcare, the nation’s largest for-profit hospital chain. HCA owns 178 hospitals in 20 states and the United Kingdom.

The pending sale reflects a controversial national trend in the U.S. as hospitals consolidate at an accelerating pace and the cost of health care continues to rise.

“We understand the business reasons [for the deal], but our overwhelming concern is the price of health care,” says Ron Freeman, chief financial officer at Ingles Markets, a supermarket chain headquartered in Asheville with 200 stores in six states.

“Will HCA after a few years start to press the hospital to make more profit by raising prices? We don’t know,” Freeman says.

And the local newspaper, the Citizen Timeseditorialized in March: “How does it help to join a corporation where nearly $3 billion that could have gone to health care instead was recorded as profit? … We would feel better were Western North Carolina’s leading health-care provider to remain master of its own fate.”

Across the U.S., the acquisition of nonprofit hospitals by corporations is raising concern among some advocates for patients and communities.

“The main motivation of for-profit companies is to grow so they can cut costs, get paid more and maximize profits,” says Suzanne Delbanco, executive director of the Catalyst for Payment Reform, an employer-led health care think tank and advocacy group. “They are not as focused on improving access to care or the community’s overall health.”

Merger mania across the U.S.

From 2013 to 2017, nearly 1 in 5 of the nation’s 5,500-plus hospitals were acquired or merged with another hospital, according to Irving Levin Associates, a health care analytics firm in Norwalk, Conn. Industry analysts say for-profit hospital companies are poised to grow more rapidly as they buy up both for-profits and nonprofits — potentially altering the character and role of public health-oriented nonprofits.

Nonprofit hospitals are exempt from state and local taxes. In return, they must provide community services and care to poor and uninsured patients — a commitment that is honored to varying degrees nationwide.

Of the nation’s 4,840 general hospitals that aren’t run by the federal government, 2,849 are nonprofit, 1,035 are for-profit and 956 are owned by state or local governments, according to the American Hospital Association.

In 2017, 29 for-profit companies bought 18 for-profit hospitals and 11 not-for-profits, according to an analysis for Kaiser Health News by Irving Levin Associates.

Sales can go the other way, too: 53 nonprofit hospital companies bought 18 for-profits as well as 35 nonprofits in 2017.

A recent report by Moody’s Investors Service predicted stable growth for for-profit hospital companies, saying they are well-positioned to demand higher rates from insurers and have less exposure to the lower rates paid by government insurance programs such as Medicare and Medicaid. In contrast, a second Moody’s report downgraded — from stable to negative — its 2018 forecast for the not-for-profit hospital sector.

‘We wanted to thrive, and not just survive’

Ron Paulus, Mission Health’s president and CEO, says he and the hospital’s 19-member board concluded last year that the future of Mission Health was iffy at best without a merger.

HCA declined to make anyone available for an interview but provided this written statement: “We are excited about the prospect of a transaction that would allow us to support the caliber of care they [Mission Health hospitals] have been providing.”

Driving Mission Health’s decision, Paulus says, were strained finances and the board’s strong feeling that the hospital needed to invest in new technology, modern data management tools and top clinical talent.

“We wanted to thrive and not just survive,” he says. “I had a healthy dose of skepticism about HCA at first. But I think we made the right decision.”

During the past four years, Paulus says, the company has had to cut costs — from between $50 million and $80 million a year — to preserve an “acceptable operating margin.” The forecast for 2019 and 2020, he says, saw the gap between revenue and expenses rising to $150 million a year.

Miriam Schwarz, executive director of the Western Carolina Medical Society, says many physicians in the area were surprised by the move and “are trying to grapple with the shift.”

“There’s concern about the community benefits, but also job loss,” Schwarz says. Still, she adds, the doctors in her region “do recognize that the hospital must become more financially secure.”

Weighed against community concerns is the prospect of a large nonprofit foundation created by the deal. Depending on the final price, the foundation could have close to $2 billion in assets.

Creation of such foundations is common when for-profit companies buy nonprofit hospitals or insurance companies. Paulus says the foundation created from Mission Health could generate $50 million or more a year to — among other initiatives — “test new care models such as home-based care … and address the causes of poor health in the community in the first place.”

In addition, HCA will have to pay upward of $10 million in state and local taxes.

Mixed results

Industry analysts say the hospital merger and consolidation trend nationwide is inevitable given the powerful forces afoot in health care.

That includes pressure to lower prices and costs and improve quality, safety and efficiency; to modernize information technology systems and equipment; and to do more to improve overall health.

But academics and consumer advocates say hospital consolidation yields mixed results. While mergers — especially purchases by for-profit companies — provide much-needed capital and financial stability, competition is stifled, and that’s often led to higher prices.

Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, and colleagues examined 366 hospital mergers from 2007 to 2011 and found that prices were, on average, 12 percent higher in areas where one hospital dominated the market versus areas with at least four rivals. Another recent study found that 90 percent of U.S. cities today have a “highly concentrated” hospital market. Asheville is one, and Mission Health is dominant there.

“The evidence is overwhelming at this point,” Gaynor says. “Mergers solve some problems for hospitals, but they don’t make health care less expensive or better. In fact, prices usually go up.”

Mission Health CEO Paulus says he believes HCA is committed to restraining price increases and the growth in costs.

If no obstacles arise, Paulus says, HCA’s purchase of Mission Health would be formalized in August and finalized in November or December, pending state regulatory approval.




Robotic surgery comes with a hefty price tag, but studies show it’s often no more effective

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Over the past decade, hospitals have invested significant dollars in robotic surgical equipment, often to keep pace with their regional competitors.

But the costs associated with robotic systems don’t always pay off, according to two new studies published in JAMA last week that show robot-assisted surgeries cost more but are just as effective as certain laparoscopic surgeries. The results led one surgeon to question how hospitals should track the value of robotics, particularly as the industry transitions to value-based reimbursement models.

In one study, researchers at Stanford University Medical Center, Brigham and Women’s Hospital and the University of California San Diego reviewed 13 years’ worth of data linked to nearly 24,000 patients that had a kidney surgically removed. Although just over 5,000 of those patients underwent robot-assisted nephrectomies, the use of robot increased dramatically from 1.5% in 2003 to 27% in 2015, surpassing the percentage of laparoscopic surgeries.

But researchers found that robotic surgeries were often longer and more expensive than laparoscopic surgeries. Over the 13-year period, robotic surgeries cost approximately $2,700 more per patient without any notable difference in post-operative complications.

“There is a certain incentive to use very expensive equipment,” Benjamin Chung, M.D., associate professor of urology at Stanford and one of the study’s authors said in a release. “But it is also important to be cognizant as to how our health care dollars are being spent. Although robotic surgery has some advantages, are those advantages relevant enough in this type of case to justify an increase in cost?”

A second study by researchers in the United Kingdom, Germany, Italy and New Zealand found surgeons performing resection for rectal cancer were just as likely to convert to open surgery whether they were using a laparoscopic or robot-assisted technique.

In an accompanying editorial, Jason Wright, M.D. chief of gynecologic oncology at Columbia University Medical Center said the new research highlights the need for hospitals to balance the costs associated with new devices and their potential impact. While hospitals currently absorb most of those costs, that dynamic could change with new reimbursement models.

“The implementation of alternative payment models, particularly those with two-sided risk, may heighten the awareness of surgeons of these costs if reimbursement is more directly affected,” he wrote.

Wright also pointed specifically to the promise of the Food and Drug Administration’s new National Evaluation System for Health Technology (NEST), established by the new Medical Device User Fee agreements authorized in August. The system looks to use real-world data buried in EHRs and health registries to conduct post-market surveillance,  which could offer a more comprehensive look at device functionality after its approved by the agency.

Doctors want to give their cancer patients every chance. But are they pushing off hard talks too long?

A new generation of immune-boosting therapies has been hailed as nothing short of revolutionary, shrinking tumors and extending lives. When late-stage cancer patients run out of other options, some doctors are increasingly nudging them to give immunotherapy a try.

But that advice is now coming with unintended consequences. Doctors who counsel immunotherapy, experts say, are postponing conversations about palliative care and end-of-life wishes with their patients — sometimes, until it’s too late.

“In the oncology community, there’s this concept of ‘no one should die without a dose of immunotherapy,’” said Dr. Eric Roeland, an oncologist and palliative care specialist at University of California, San Diego. “And it’s almost in lieu of having discussions about advance-care planning, so they’re kicking the can down the street.”

Outside Of Washington, There Is A New Vital Center In Health Care Reform

Larissa Pisney of Denver joins others during a protest outside the office of U.S. Rep. Mike Coffman, R-Colo., over the health care overhaul bill up for a vote in the U.S. House Thursday, May 4, 2017, in Aurora, Colo. (AP Photo/David Zalubowski)

Republicans in Congress are mired in political quicksand. Following passage of the Affordable Care Act (ACA) in 2010, they locked themselves into a promise to repeal and replace it at the behest of ultra-conservative donors and party activists who control the GOP’s nomination process. Since 2010, however, Americans and rank-and-file Republicans increasingly came to expect help meeting the rising costs of medical care and insurance and to accept the ACA’s tangible programs to address these concrete challenges.

The Democrats created their own political trap. They passed the ACA on the promise of making health care affordable but deductibles and rising premiums continued to present a burden to many Americans.

Both parties are missing, however, the vital center on health reform that has formed since 2010. Americans are frustrated with Democrats for not delivering on their promise of affordability, and they are now alarmed with Republican efforts to repeal—instead of improve—the ACA’s coverage of costs.

Tracking Changes In Public Opinion

Most public opinion polls are unable to track these changes in opinion about health care because they are only snapshots, drawn from a moment in time. To remedy this, we have been gathering panel data, tracking the views of the same group of Americans every two years since the ACA’s passage in 2010. This equips us to study how individuals respond to the ACA as they experience or learn more about the law’s provisions over time. Specifically, we conducted four waves of interviews in the two-month period leading up to national elections from 2010 to 2016 when health reform received heightened attention; this avoided the risk of choosing an arbitrary month when health reform might have arbitrarily lost or gained salience.

The first wave was conducted by the Survey Research Institute (SRI) at Cornell University and consisted of a national sample of 1,200 adults. Abt SRBI (now part of Abt Associates) conducted the last three waves, returning to the same individuals. All waves asked identical questions and were administered by telephone, using only landlines in 2010 and adding mobile phones in 2012, 2014, and 2016. Forty-nine percent of the original 2010 survey (587 individuals) responded to all four waves. Survey weights were applied to each survey to match representative demographic targets and allow us to generalize from our panel to the adult population in the United States.

Why Americans Dislike Health Reform

Republicans have been eager to highlight the unpopularity of the Affordable Care Act, also known as “Obamacare.” Exhibit 1 shows that unfavorable assessments of the ACA have steadily increased since its passage. Unfavorability rose from 44 percent in 2010 to 58 percent in 2016.

Exhibit 1: Increasingly Unfavorable Views Of The Affordable Care Act (Percent)

Question: “As you may know, a major health care bill was signed into law in 2010. Given what you know about this law, do you have a generally favorable or generally unfavorable opinion of it, or do you have a neutral opinion, neither favorable nor unfavorable?” Exhibit 1 presents the “unfavorable” responses.

Why are Americans increasingly disenchanted with the ACA? The public’s displeasure emanates to a large extent from frustrations with health care costs. Democrats promised to lower the costs of medical care and insurance with the enactment of the ACA. They did succeed to slow the rate of increase in national health care spending and insulate most subsidized enrollees in its insurance Marketplace from premium increases, as the Congressional Budget Office reports (Note 1). Yet, the costs of medical care remain high, and premiums and deductibles are out of the reach of some Americans.

The source of the public’s rising frustration with health care costs is picked up in Exhibit 2. The first grouping of bars on the left shows increasing frustration with costs for medical treatments that are not covered by insurers. By 2016, 14 percent expressed dissatisfaction with the amount and number of treatments that their insurance covered, a 6-point increase from 2014. One-third of Americans also expressed dissatisfaction in 2016 with the out-of-pocket costs that they were forced to pay because of gaps in their insurance coverage, as shown in the middle cluster. This is an 8-point increase from 2014.

Exhibit 2: Rising Concerns About Affordability (Percent)

Question: Several questions asked respondents to indicate their satisfaction or dissatisfaction with individual features of the health care system—“The number and kind of treatments your health insurance will cover” and “The amount you spend out of pocket on health care costs your insurance doesn’t cover.” A separate item asked respondents to indicate their agreement or disagreement with the statement: “Public officials care about making health care more affordable for people like me.” (Exhibit 2 shows “disagreement” with the statement.)

The public’s disappointment with the persistent burden of health care costs leads it to blame lawmakers for a lack of responsiveness. The bars on the right in Exhibit 2 indicate that a growing majority of Americans disagree with the statement that, “Public officials care about making health care more affordable for people like me.” Fifty-eight percent of Americans disagreed with this statement in 2016, a 10-point increase since 2012.

In addition, the sense that the ACA has not delivered the affordability that Democrats promised may help account for the sharply stronger conclusion in recent years that the ACA’s taxes present a heavier burden. Exhibit 3 shows that the proportion of Americans who believe that their taxes have increased a lot or a little has risen from 43 percent in 2012 to 56 percent in 2016. This growing perception that the ACA has increased taxes rests on inaccurate assumptions. The ACA’s financing primarily relies on two taxes on individuals whose yearly income exceeds $200,000 or for married couples earning more than $250,000—an increase in Medicare’s tax on earnings by 0.9 percent and a new 3.8 percent tax on capital gains from investments. These taxes fall on less than 2 percent of tax filers, according to the non-partisan Tax Policy Center (Note 2).

Exhibit 3: Growing Perception That The Affordable Care Act Increased Taxes (Percent)

Question: “Do you think that the new health care law enacted in 2010 has increased the taxes that you pay, decreased the taxes that you pay, or has it had no impact on the taxes that you pay?”

Americans Oppose Repeal Because They Appreciate The Effects Of Health Reform

Considering the strong public disapproval of repeal, President Donald Trump and congressional Republicans are discovering that it is a mistake to equate the public’s frustrations with the ACA with support for repealing its programs. When respondents reported “unfavorable” views of the law, we followed up with a question asking them whether they would prefer either “repeal[ing] [the ACA] as soon as possible,” or “giving the law more time to have a chance to work, with lawmakers making necessary changes along the way.” In Exhibit 4, we combined those who favored giving it “a chance to work” with those who expressed “favorable” overall views of the law. This shows that since 2010 more Americans favored the law or wanted to give it time to be improved than backed repeal. Although support for repeal inched up since 2010, a greater percentage of Americans consistently favored the ACA and improving it over repeal by a 41-to-37 margin in 2010 and by 49-to-43 in 2016.

Exhibit 4: More Americans Prefer To Keep And Improve The Affordable Care Act Than Repeal It (Percent)

Question: This figure is based on two survey questions. The first is the following: “As you may know, a major health care bill was signed into law in 2010. Given what you know about this law, do you have a generally favorable or generally unfavorable opinion of it, or do you have a neutral opinion, neither favorable nor unfavorable?” Respondents who had an unfavorable view were asked a second question about their view about the law’s future: “The law should be given more time to have a chance to work, with lawmakers making necessary changes along the way, OR the law should be repealed as soon as possible?” The repeal bar reports responses from the second question; the other bar adds together favorable responses in the first question with the “law should be given more time” responses.

Support for keeping and improving the ACA stems from a growing appreciation for its concrete effects. Exhibit 5 shows that rising percentages pinpoint the ACA’s tangible programs as having either “a great deal” or “quite a bit” of an impact on themselves and their family (other options included “some,” “a little,” and “none”). There is greater recognition in 2016 compared to 2010 or 2012 of the impact of allowing parents with insurance to continue to cover their children until they are 26 years old. More than one in five Americans now report that the ACA expanded their access to health insurance. In addition, nearly one in four Americans, 24 percent, voiced appreciation for the impact of the ACA’s assistance to seniors to pay for prescription medications. Moreover, recognition of a personal impact resulting from the ACA’s tax credits and other subsidies to help people purchase health insurance has remained stable since 2014 and is higher than in earlier years.

Exhibit 5: Rising Appreciation Of The Impact Of The Affordable Care Act (Percent)

Question: “I’m going to read to you a list of some of the features of the health care law that was enacted in 2010. For each one, please answer this question: “How much of an impact has this feature had on you and your family: a great deal, quite a bit, some, a little, none?” Respondents are asked about the following features of health reform: coverage of adult children on their parents’ insurance plans until they are 26 years old; access to health insurance or medical care supported or provided by government; help for seniors to pay for prescription drugs; and tax credits and other subsidies to help people pay for health insurance. Exhibit 5 combines “a great deal” and “quite a bit.”

The New Vital Center On Health Reform

Overall evaluations of the ACA follow the partisan pattern that is familiar today: 68 percent of Democrats have favorable views versus 9 percent of Republicans. What stands out, however, is that the ACA’s tangible effects are starting to loosen rigid partisan dividing lines. Exhibit 6 shows the percentage of Americans reporting a personal impact from at least one of the four provisions presented in Exhibit 5. Democratic elected officials enacted the ACA, and, not surprisingly, majorities of rank-and-file Democrats have generally singled out the law’s effects from early on: 51 percent of Democrats reported an impact from at least one of the law’s features in 2010; by 2016, this recognition remained largely stable, inching up to 54 percent. Strikingly, however, the percentage of Republicans perceiving an impact on themselves or their families has increased by 8 percentage points, from 26 percent in 2010 to 34 percent in 2016 despite vociferous GOP attacks on the ACA. Among independents, the proportion soared by 23 points, from 28 percent to 51 percent. These findings indicate that appreciation for the ACA has expanded beyond the ranks of Democratic partisans who were predisposed to favor it; growing numbers of Americans across the political spectrum increasingly value the impacts of health reform in their own lives.

Exhibit 6. Widening Appreciation Of The Affordable Care Act’s Impact (Percent Reporting Impact Of A New Benefit)

Exhibit 6 presents the percentage of respondents who reported that at least one of the four provisions presented in Exhibit 5 had a “great deal” or “quite a bit” of impact on themselves or their family.

The crux of the public discontent with the ACA—and the repeal proposals by Republicans—is the amount paid for insurance coverage. Respondents to the survey appear to share the complaint of ACA critics that insurance costs are too high. After high expectations following the ACA’s enactment, satisfaction with the cost of health coverage has dropped by 10 points—from 73 percent satisfied in 2010 to 63 percent in 2016. This general assessment misses, however, a crucial condition—whether or not individuals are covered by government programs such as Medicare, Medicaid, or a subsidy financed by the ACA. We found a striking pattern among Republicans, Democrats, and independents: By a margin of 20 points or more, individuals with government coverage were consistently more satisfied with the cost of insurance than those who rely on private health plans. For instance, 79 percent of Republicans with government coverage were content with insurance costs as compared to 56 percent without this coverage. Independents outside the sway of either major party expressed the highest satisfaction when experiencing government coverage (100 percent) and exhibit the largest gap between those covered and those without coverage (41 points).

In short, Republican public officials continue to spotlight what they perceive as the disappointment of Americans with ACA coverage, but the reality is that the most dissatisfied are those who lack government insurance. In fact, most Americans (including Republicans) who benefit from government insurance are content with their coverage.

Health Reform’s New Vital Center

Public opinion toward the ACA has been poorly understood because of an apparent contradiction. On the one hand, a growing share of the public harbor unfavorable views of the ACA as a whole, and proponents of repeal have seized on this dissatisfaction to claim a popular mandate. On the other hand, the discontent of Americans stemmed from disappointment with the ACA for not satisfying their expectations of genuine protection from the burden of costs. Far from wanting to be rid of the ACA, Americans are looking to it to deliver more effective protection.

In the immediate aftermath of World War II, the historian Arthur Schlesinger, Jr., wrote of the “vital center” about the direction of America that was supported by both major political parties and most Americans. Despite today’s fractiousness in Washington over health reform, everyday Americans are converging toward a new vital center of support for health care reform.

Awareness of the ACA’s tangible impacts fits into a robust notion of collective responsibility instead of the individualist approach advocated by conservatives. Since the ACA’s passage, nearly nine out of 10 Americans have consistently embraced access to health care as a “basic right.” Not surprisingly, nearly all Democrats embrace the principle of health care as a right. What stands out is that rank-and-file Republicans overwhelming and increasingly hold the same view—rising from 64 percent in 2010 to 72 percent in 2016. Contrary to the position of Washington Republicans, establishing health care as a birthright owed to Americans is now widely shared. Republican proposals, such as those that would allow states to opt out of some of the ACA’s core consumer protections (including those guaranteeing coverage for individuals with preexisting medical conditions), may well tap into this strain of public opinion and provoke broad opposition.

Elected officials in Washington and, particularly, steadfast opponents of health reform are sliding to the margins of public opinion. The daily problems that Americans face in paying for medical care and insurance mean that pragmatism is trumping ideology. In the past, federal lawmakers responded to broad public agreement and worked across the aisle to improve the flaws in the original legislation that produced Social Security in 1935 and Medicare in 1965. The question today is whether Washington can return to that pragmatic tradition and catch up to the emerging vital center in Americans’ attitudes toward health reform.

Note 1

Congressional Budget Office. American Health Care Act: cost estimate. Washington (DC): CBO; 2017 Mar 13.

Note 2

Tax Policy Center. Tax units above and below the $250,000/$200,000 threshold, 2013–2022. Washington (DC): TPC; 2012 Nov 26

Teaching Hospitals Cost More, but Could Save Your Life

Image result for teaching hospitals

Perhaps not evident to many patients, there are two kinds of hospitals — teaching and nonteaching — and a raging debate about which is better. Teaching hospitals, affiliated with medical schools, are the training grounds for the next generation of physicians. They cost more. The debate is over whether their increased cost is accompanied by better patient outcomes.

Teaching hospitals cost taxpayers more in part because Medicare pays them more, to compensate them for their educational mission. They also tend to command higher prices in the commercial market because the medical-school affiliation enhances their brand. Their higher prices could even cost patients more, if they are paying out of pocket.

To save money, insurers have started establishing hospital networks, and policy makers are considering ways to steer patients away from teaching hospitals. Those efforts may well save patients and taxpayers money. But how will that affect the quality of care?

One answer is provided in a new study of over 21 million hospital visits paid for by Medicare in 2012 and 2013. Teaching hospitals save lives. For every 83 elderly patients seen by a major teaching hospital, one more is alive 30 days after discharge than if those patients had been admitted to a nonteaching hospital. This is a large mortality effect.

“It’s about half the size of a breakthrough medical therapy like stenting for heart-attack patients,” said Amitabh Chandra, an economist with the Harvard Kennedy School and a longtime skeptic of the value of teaching hospitals, who wasn’t involved in this study.

“Minor” teaching hospitals — which also have educational missions but are not members of the Council of Teaching Hospitals and Health Systems — also outperformed nonteaching hospitals, but by a smaller margin.

The study, published in the Journal of the American Medical Association, adjusted for other factors that could have skewed the results, like demographics, patients’ diagnoses, hospital size and profit status. Because mortality rates differ geographically, it compared teaching with nonteaching hospitals within the same state. Even after such adjustments, it found mortality rates are lower at teaching hospitals for 11 of 15 common medical conditions and five of six major surgical conditions. The more doctors in training per bed a hospital had, the lower its mortality rate.

Given the importance of this issue, you’d think we would already know the mortality differences between teaching and nonteaching hospitals. But the seminal studies on the subject are based on data at least two decades old. Other, more recent studies focus on only a few types of patients or offer conflicting results.

“We thought the comparative performance of teaching and nonteaching hospitals was worth a fresh look because medicine has changed considerably since those older studies,” said Laura Burke, the lead author on the study and an emergency physician with the Harvard T.H. Chan School of Public Health. “And the more recent studies don’t settle the question.” (I am a co-author on the study, along with Dr. Burke and other Harvard colleagues Dhruv Khullar, E. John Orav and Ashish Jha. Dr. Khullar is also an Upshot contributor.) The study was funded by the American Association of Medical Colleges, which had no editorial control over analysis or publication.

Though the study revealed mortality differences by teaching status, it could not illuminate the cause of those differences. Perhaps teaching hospitals attract higher-quality practitioners, more closely follow best practices, or use medical technology more effectively.

Other studies suggest teaching hospitals do not offer higher quality more broadly. For example, an analysis led by Jose Figueroa, a physician with the Harvard T.H. Chan School of Public Health, found that teaching hospitals were more likely to be penalized by Medicare for low quality compared with nonteaching hospitals. Another study found teaching hospitals were more likely to be penalized for higher hospital readmission rates.

An examination of Massachusetts hospitals found comparable quality performance at teaching and nonteaching hospitals. The state has a goal — codified in a 2012 state law — of bringing health care spending growth in line with overall economic growth. The Massachusetts Health Policy Commission has highlighted the high costs of teaching hospitals as part of this effort.

The new study did not assess the cost of the benefits in mortality that teaching hospitals deliver.

“The typical teaching hospital is at least 30 percent more expensive,” Mr. Chandra said. “Is 1 percent fewer deaths worth that price?” It’s a question few like to ask, but spending more on hospital care means less for other things we value — and that are known to improve health and welfare, too — like education and nutrition programs.

About 26 percent of hospitals are teaching hospitals, accounting for just over half of all admissions. Unsure which hospitals in your area are teaching hospitals? It’s something most of them make a point of mentioning, so you can often find a hospital’s teaching status on its website. If not, an inquiry to the hospital should settle the matter. If you use one, the cost of your care will be higher, but it might save your life.

Playing hardball: doctors start negotiating with doctors

Since the introduction of Obamacare, a growing number of physicians are part of what are called Accountable Care Organizations, where physicians, nurses and other providers are responsible for the health of their patients and the costs of that care.

The shifting landscape is rearranging incentives, and leading doctors into corners of their work they’ve rarely visited.

On a late Friday afternoon last month, the Family Health Associates practice in Charleston, West Virginia is empty.

Empty except for Dr. Julie DeTemple and her staff.

“I should be home and I’m here typing away doing my notes, charting,” DeTemple said.

The primary care doctor has had to adjust from examining patients – why she got into the business – to examining data.

Her quality time with spreadsheets has ramped up this year, now that’s she’s co-founded the Aledade West Virginia ACO, made up of 11 physician practices in the state.

The physicians constantly meet, looking for ways to improve care and cut out wasteful spending.