Tag Archives: Health Policy

CMS makes it official: Two mandatory bundled-pay models canceled

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The CMS has finalized its decision to toss two mandatory bundled-payment models and cut down the number of providers required to participate in a third.

Only 34 geographic areas will be required to participate in the Comprehensive Care for Joint Replacement Model, or CJR, according to a rulemaking released Thursday. Initially, 67 geographic areas were supposed to participate.

Up to 470 hospitals are expected to continue to operate under the model. That includes the CMS’ estimate that 60 to 80 hospitals will voluntarily participate in CJR. Originally, 800 acute-care hospitals would have participated under the program.

With so many hospitals getting a reprieve, the CMS estimates the model will save $106 million less over the next three years versus what it would have saved if CJR had remained mandatory for all 67 geographic areas. The model is now expected to save $189 million over those years instead of $295 million.

The rule comes weeks after the CMS finalized a proposal to allow knee-replacement surgeries to take place in outpatient settings. When the proposal was released in July, some questioned if it was an attempt to undermine the CJR model.

The CMS has also finalized plans to cancel the Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model, which were scheduled to begin on Jan. 1, 2018. Eliminating these models gives the CMS greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum, the agency said.

These cardiac pay models were estimated to save Medicare $170 million collectively over five years.

The agency acknowledged that some hospitals wanted the models to continue on a voluntary basis, as they had already invested resources to launch them, but said those arguments were not detailed enough for the agency to do so.

“We note that commenters did not provide enough detail about the hiring status or educational and licensing requirements of any care coordinator positions they may have created and filled for us to quantify an economic impact for these case coordination investments,” the CMS said.

On average, hospitals have five full-time employees, including clinical staff, tracking and reporting quality measures under value-based models, according to the AHA. They are also spending approximately $709,000 annually on the administrative aspects of quality reporting.

More broadly, the average community hospital spends $7.6 million annually on administrative costs to meet a subset of federal mandates that cut across quality reporting, record-keeping and meaningful use compliance, according to the trade group.

Ultimately, the CMS decided to not alter the design of these models to allow for voluntary participation since that would potentially involve restructuring the model, payment methodologies, financial arrangement provisions and quality measures, and it did not believe that such alterations would offer providers enough time to prepare for the changes before the planned Jan. 1, 2018 start date.

The CMS acknowledged that hospitals and other stakeholders have voiced concerns that the Trump administration may not be as committed to value-based care as the Obama administration, but it insists that’s not true. The CMS said the Trump administration just believes voluntary models are the better way to go.

“We take seriously the commenters’ concerns about the urgency of continuing our movement toward value-based care in order to accommodate an aging population with increasing levels of chronic conditions,” the agency said in the rule. “We continue to believe that value-based payment methodologies will play an essential role in lowering costs and improving quality of care, which will be necessary in order to maintain Medicare’s fiscal solvency.”

 

Paul Ryan says GOP aiming to cut Medicare, Medicaid spending

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In further proof that Republicans are not giving up their push to enact major changes to healthcare policy, House Speaker Paul Ryan has signaled that the party will focus on cutting Medicare and Medicaid spending next year.

“We’re going to get back, next year, at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview with conservative talk show host Ross Kaminsky.

In addition to welfare, it’s the “healthcare entitlements”—Medicare and Medicaid—that are the major targets, Ryan said, reasoning that they are some of the biggest drivers of national debt, alongside military spending.

As evidenced by a 2015 tweet, President Donald Trump pledged as a candidate not to cut Social Security, Medicare or Medicaid, but the GOP’s legislative attempts to repeal the Affordable Care Act would have slashed Medicaid funding drastically.

Both the president and GOP lawmakers have pledged to revisit that legislation in 2018, and Ryan noted he’s making headway with convincing Trump to back Medicare cuts.

“I think the president’s understanding [that] choice and competition works everywhere in healthcare, especially in Medicare,” he said.

But while Ryan contended that entitlement reform was the logical next step after passing a tax bill that reduces revenue, Democrats don’t see it that way. They argue that Republicans only want to cut key government programs to make up for the fact that their tax bill is estimated to increase the deficit by at least $1 trillion over a decade.

Republicans’ tax bill will also have healthcare policy implications. The Senate’s version of the bill repeals the Affordable Care Act’s individual mandate, and House conservatives have said they want that provision to make it into the final draft of the legislation.

With House conservatives’ resistance, ACA stabilization bills’ prospects get dimmer

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Senate GOP leaders won a key swing vote for their tax bill by pledging to pass bipartisan legislation to shore up the Affordable Care Act. But now it looks like those measures’ chances of becoming law are getting dimmer.

Sen. Susan Collins, R-Maine, wants two bills to pass that she hopes will mitigate the effects of a provision in the tax bill that repeals the individual mandate: the Alexander-Murray bill, which would fund cost-sharing reduction payments for two years, and a bill she co-authored with Democrat Bill Nelson, which provides funding for states to establish invisible high-risk pool or reinsurance programs.

Collins voted for the Senate’s version of the tax bill—a critical win for GOP leaders, as they could only lose two votes and it failed to gain her support for previous ACA repeal bills. But she only did so after Senate Majority Leader Mitch McConnell assured her the two ACA stabilization measures would pass.

Yet while some lawmakers previously said those measures could be tacked on to the short-term spending bill Congress aims to pass this week, congressional aides now say it isn’t likely to be included, according to The Wall Street Journal. Further, while House conservatives have indicated strong support for repealing the individual mandate in the final version of the GOP tax bill, they are far from on board with the two ACA stabilization bills.

For example, Ohio Rep. Warren Davidson said he’s a “hard, hard, very hard no,” on the Alexander-Murray bill, per the WSJ article.

House Speaker Paul Ryan could also be a barrier to passing the two bills. His office told a meeting of congressional leadership offices on Monday that he wasn’t part of any deal between Collins and McConnell, The Hill reported. But his office didn’t say outright that it opposed the bills.

For her part, Collins said it will be “very problematic” if the ACA stabilization bills don’t pass, according to the WSJ. She also won’t commit to voting for the final version of the tax bill until she sees what comes out of a conference committee between the House and Senate.

Even if those measures do pass, there have been questions about whether they would do enough to soften the blow of repealing the individual mandate. The Congressional Budget Office has advised that the Alexander-Murray bill would do little to change its prediction that repealing the mandate would increase the uninsured rate and raise premiums.

A new analysis from Avalere found that Collins’ bill could help stabilize the individual market by increasing enrollment and reducing premiums in 2019, but the consulting firm’s experts cautioned that those effects could be overshadowed by repealing the individual mandate.

 

Study: ‘Big five’ insurers depend heavily on Medicare, Medicaid business

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https://www.fiercehealthcare.com/cms-chip/big-five-insurers-medicare-medicaid-growth-profits?mkt_tok=eyJpIjoiT0RnMFkySXdPV0psWldSaCIsInQiOiJQSllQNlpcL2RhTzBDZFwvZXh5M1ZUSDJyUU5JTGw3dnh1QTVac01rZUFcL2pNUUhhMXBaQjBxK29ScHRrOHhsT3d6aE5pcFRJUWd4Sm0rYXA4S0RYVGE2N0czN2hhc2hsXC9EZk9mSGVLR0V1UFlwVDZpQmdkcll0eTBMNDUzTHlIZDIifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Rising Stocks

Even as they’ve retreated from the Affordable Care Act exchanges, the country’s biggest for-profit health insurers have become increasingly dependent on Medicare and Medicaid for both profits and growth.

In fact, Medicare and Medicaid accounted for 59% of the revenues of the “big five” U.S. commercial health insurers—UnitedHealthcare, Anthem, Aetna, Cigna and Humana—in 2016, according to a new Health Affairs study.

From 2010 to 2016, the combined Medicare and Medicaid revenue from those insurers ballooned from $92.5 billion to $213.1 billion. The companies’ Medicare and Medicaid business also grew faster than other segments, doubling from 12.8 million to 25.5 million members during that time.

All these positive trends, the study noted, helped offset the financial losses that drove the firms to reduce their presence in the individual marketplaces. Indeed, the big five insurers’ pretax profits either increased or held steady during the first three years of the ACA’s individual market reforms (2013-2016). Their profit margins did decline during those three years, but stabilized between 2014 and 2016.

Not only do these findings demonstrate the “growing mutual dependence between public programs and private insurers,” the study authors said, but they also suggest a useful policy lever. The authors argued that in order to help stabilize the ACA exchanges, federal and state laws could require any insurer participating in Medicare or state Medicaid programs to also offer individual market plans in those areas.

Nevada has already done something similar: It offered an advantage in Medicaid managed care contract billing for insurers that promised to participate in the state’s ACA exchange. The state credited that policy with its ability to coax Centene to step in and cover counties that otherwise would have lacked an exchange carrier in 2018.

It’s far less certain, though, whether such a concept will ever be embraced at the federal level during the Trump administration, since its focus has been on unwinding the ACA rather than propping it up.

Either way, recent events underscore the study’s findings about how lucrative government business has become for major insurers. One of the main goals of CVS’ proposed acquisition of Aetna is to improve care for Medicare patients, which would help the combined company “be more competitive in this fast-growing segment of the market,” CVS CEO Larry Merlo said on a call this week.

Aetna CEO Mark Bertolini added that the transaction has “incredible potential” for Medicare and Medicaid members, as the goal is to provide the type of high-touch interaction and care coordination they need to navigate the healthcare system.

 

CVS merger with Aetna: Health care cure or curse?

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https://theconversation.com/cvs-merger-with-aetna-health-care-cure-or-curse-88670?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20December%206%202017%20-%2089557547&utm_content=Latest%20from%20The%20Conversation%20for%20December%206%202017%20-%2089557547+CID_461096d86af0ad8c2eedceabf8b8a42f&utm_source=campaign_monitor_us&utm_term=CVS%20merger%20with%20Aetna%20Health%20care%20cure%20or%20curse

The announcement that CVS plans to acquire Aetna for US$69 billion raises hope and concerns.

The transaction would create a new health care giant. Aetna is the third-largest health insurer in the United States, insuring about 46.7 millionpeople.

CVS operates 9,700 pharmacies and 1,000 MinuteClinics. A decade ago, it also purchased Caremark and now operates CVS/Caremark, a pharmacy benefits manager, a type of business that administers drug benefit programs for health plans. CVS/Caremark is one of the three largest pharmacy benefits managers in the United States. Along with ExpressScripts and OptummRXTogether, these three control at least 80 percent of the market.

Should American consumers be happy or concerned about the proposed merger? As a professor of health law and bioethics, I see compelling arguments on both sides.

Good for consumers, or for the companies?

CVS and Aetna assert they are motivated by a desire to improve services for consumers and that the merger will lower health care costs and improve outcomes.

Many industry experts have postulated, however, that financial gain is at the heart of the deal.

CVS has suffered declining profits as consumers turn to online suppliers for drugs. Reports that Amazon is considering entry into the pharmacy business raise the specter of increasingly fierce competition.

The merger would provide CVS with guaranteed business from Aetna patients and allow Aetna to expand into new health care territory.

The heart of the deal

The merger would eliminate the need for a pharmacy benefits manager because CVS would be part of Aetna.

Pharmacy benefits managers, which sprang up in the early 2000s in response to rising costs of care, administer drug benefit programs for health plans. Most large employers contract with pharmacy benefits managers that are different from their health insurers.

Nevertheless, a consolidation along the lines of a CVS/Caremark and Aetna merger would not be unprecedented. The nation’s largest health insurance company, United Healthcare, operates its own pharmacy benefits manager, OptumRx.

Pharmacy benefits managers process and pay prescription drug claims, negotiate with manufacturers for lower drug prices, and can employ other cost-saving mechanisms. They thus act as intermediaries between the insurer and pharmacies.

They also make a lot of money. They have been controversial in recent years for how they do so, allegedly keeping a keener focus on profits than on patients.

The merger has not been finalized and requires approval from government regulators, which isn’t always easy to get. In 2016 the U.S. Department of Justice sued to block two health insurer mergers: one between Aetna and Humana and a second between Anthem and Cigna. The government objected on antitrust grounds, arguing that the mergers would unduly restrict competition. Both efforts were abandoned.

CVS and Aetna argue that their proposed merger is different. It is a vertical rather than a horizontal merger, which means that it would combine companies providing different services for patients (insurance and filling prescriptions) rather than two companies doing the same thing.

However, the Trump administration is currently opposing another vertical merger, that between AT&T and Time Warner. It is unclear whether the administration will likewise oppose the CVS/Aetna merger.

Benefits of a merger

There is some evidence that a merger could help consumers.

A merger could result in more negotiating power. Combining the power of a leading pharmacy and a top insurer may allow CVS/Aetna to negotiate more effectively for price discounts from drug and device manufacturers.

It also could cut out the middleman. PBMs themselves have been blamed for raising health care costs. They often do not pass on negotiated drug discounts to consumers, but rather keep the money themselves. In addition, many believe they “make money through opaque rebates that are tied to drug prices (so their profits rise as those prices do).” With the merger, CVS/Aetna would not need CVS/Caremark to function as an intermediary. Eliminating a profit-seeking middleman from the picture could lower consumer prices.

The merger could provide easy access to health care for minor injuries and illnesses. CVS said it plans to expand its MinuteClinics, walk-in clinics that provide treatment by nurse practitioners for minor conditions. Also, CVS said it would offer more services, such as lab work, nutritional advice, vision and hearing care, and more. Thus, CVS promises that its clinics will become “health hubs.”

Many patients could turn to these clinics instead of seeking more expensive care from physicians or emergency rooms. Furthermore, health hubs could provide “one-stop shopping” convenience for some patients. This could be particularly beneficial to elderly individuals or those with disabilities.

Another benefit could be improved and expanded data analytics, which could result in better care. Combining information from patients’ health insurers with that of their pharmacies, including nonprescription health purchases, may promote better care. CVS pharmacists and health hub providers would be able to monitor and counsel patients regarding chronic disease management, pain management, prenatal care and other matters. Such attention could reduce the risk of complications and hospitalizations and thus also decrease expenditures.

Increase of other risks?

Skeptics argue that the CVS/Aetna merger is unlikely to yield cost savings and improved outcomes. They note that mergers in the health care sector generally lead to higher, not lower, prices and worry about other adverse consequences.

If the market shrinks to fewer pharmacy benefits managers because of consolidation, costs may actually increase. The remaining pharmacy benefits managers may have little incentive to compete with each other by demanding discounts from drug companies. As noted above, they may actually profit from higher pharmaceutical prices and thus welcome increases.

After the merger, Aetna may require those it insures to use only CVS pharmacies. In addition, it may require individuals to turn to CVS MinuteClinics for certain complaints even if patients prefer to visit their own doctors. Such restrictions would mean less choice for consumers, and many may find them to be very distressing.

The merger could also decrease competition and bar other companies from entering the pharmacy market. For example, Aetna may refuse to cover prescription drugs that are not purchased from CVS. In that case, Amazon may find it extremely difficult if not impossible to break into the industry. Less competition, in turn, often means higher prices for consumers.

It is difficult to predict the precise consequences of a CVS/Aetna merger. One way or another, however, its impact will likely be significant.

 

Under ACA, largest health plans net lion’s share of underwriting gains while smaller players struggle

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Financial market data. Image: Pixabay

The gap between the haves and have-nots has grown wider in the health insurance sector—and policy changes may be the culprit.

Most health plans are relatively small, posting an annual revenue of less than $2 billion, and are generally close to just breaking even financially. But the top three largest fully insured health plans by revenue—UnitedHealth Group, Kaiser Foundation Health Plan and Anthem—“exhibit performance that is dramatically differentiated from that of other market participants,” according to a new analysis from Deloitte.

For example, between 2011 and 2016, the top three saw their share of underwriting gains rise considerably even as their share of enrollment and revenue declined. By 2016, those three plans generated 84% of all underwriting gains in the fully insured market, while they accounted for just 55% in 2011. The top 10 plans, meanwhile, accounted for 92% of all underwriting gains in 2016.

What was behind that trend? Post-2014, one of the main reasons was the “number and magnitude of the losses suffered by many other health plans,” particularly in Affordable Care Act commercial individual products, the analysis said. Those losses were so large that they offset almost all the underwriting gains posted by the health plans not in the top three or top 10—thus magnifying the largest plans’ share.

For-profit insurers also grew faster and posted significantly higher margins than their nonprofit peers, the analysis found. While for-profit plans accounted for 66% of all underwriting gains in 2011, that share rose to 76% by 2016. Nonprofit plans, in comparison, saw their underwriting margins slip from 2.3% in 2011 to 0.8% in 2016.

The analysis also looked at health plan performance on the company and state levels. It found a significant increase in the number of plans with annual losses, a steep decline in average margins and widening variation among plans’ performance from 2011-2016. In addition, the number of states with health insurance market turbulence and unfavorable health plan financial performance increased.

Deloitte said its findings showed how large of a role public policy has played in driving change in the insurance markets in recent years. In addition, it highlighted the financial benefits associated with national scale.

Yet the firm also pointed out that it’s worth paying attention to how smaller-scale nonprofit plans are faring, given that they “play critical roles in their local communities and healthcare ecosystems.”

These plans, it noted, may lack the resources to withstand more disruption and “down years.” But with Republicans moving to unwind the ACA, that’s exactly what might lie ahead.

 

 

Congress floats temporary patch for CHIP funding shortfalls

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In its short-term appropriations bill, Congress has included a provision aimed at helping states keep their Children’s Health Insurance Programs afloat while lawmakers try to pass a longer-term measure. But that gesture may not go nearly far enough.

The bill would direct the secretary of Health and Human Services to allocate previously unused CHIP funding first to “emergency shortfall states”—or ones that are in danger of running out of money—before other states. The federal government has already been redistributing funding from past years to states that were facing shortfalls in October and November.

Those shortfalls exist because federal funding for CHIP expired Sept. 30, and Congress’ efforts to pass funding reauthorization measure have been stalled by partisan disputes over how to pay for it. The Senate Finance Committee has advanced its version of a CHIP bill—which doesn’t outline any offsets—while a companion bill, containing cuts to other healthcare programs, cleared the House despite Democrats’ objections.

If Congress fails to pass a long-term CHIP funding measure, at least five states and the District of Columbia predict they will run out of money for the program by the end of 2017 or early in January, according to a survey from the Georgetown University’s Center for Children and Families. Some states have already sent notices to families advising them to start researching private health insurance options.

The center’s executive director, Joan Alker, also isn’t impressed by the CHIP provision in the short-term appropriations bill, calling it a sign Congress is trying to “kick the can down the road.”

“The longer Congress postpones action on long-term CHIP funding, the more states will be forced to waste time and money developing contingency plans,” she wrote in a blog post, adding, “the more states that send out notices, the more likely it will be that some kids will fall through the cracks.”

ACA mandate repeal may be less popular than GOP thinks

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https://www.axios.com/individual-mandate-repeal-may-be-less-popular-than-republicans-think-2514871844.html

Reproduced from Kaiser Family Foundation Health Tracking Poll, Nov. 8-13, 2017; Note: Question wording abbreviated, “Don’t know”/”refused” responses not shown; Chart: Axios Visuals

The tax bill that just passed the Senate eliminates the Affordable Care Act’s individual mandate, and the House is likely to go along when Congress writes the final version. With the tax legislation moving so quickly and the mandate lost in the maze of so many other consequential provisions, we are not likely to have much public debate about this big change in health policy.

Why it matters: If we did, even though the mandate has never been popular, our polling shows that the public does not necessarily want to eliminate it as part of tax reform legislation, once they understand how it works and what the consequences of eliminating it might be.

The back story: Republicans have targeted the ACA mandate because they want the $318 billion in savings the Congressional Budget Office says they would get to help them pay for their tax cuts. (The change would save money because fewer people would get federal subsidies on the ACA marketplaces or apply for Medicaid coverage.)

They have also targeted the mandate because they think it’s so unpopular. Our polls have consistently shown that the mandate is the least popular element of the ACA and in the abstract, more Americans (55%) would eliminate the mandate than keep it (42%).

Yes, but: When people know how the mandate actually works, and are told what experts believe is likely to happen if it’s eliminated, most Americans oppose repealing it in the tax plan.

  • When people learn that they will not be affected by the mandate if they already get insurance from their employer or from Medicare or Medicaid, 62% oppose eliminating it.
  • When people are told that eliminating the mandate would increase premiums for people who buy their own coverage, as the CBO says it will, they also flip, with 60% opposing eliminating the mandate.
  • And when they’re told that 13 million fewer people will have health coverage – another CBO projection – 59% oppose eliminating the mandate.

The bottom line: Many people change their minds when they learn more about facts and consequences, which happens as the lights shine brighter on them in legislative debates. This happened to the “skinny repeal” proposal, and it would happen to single payer.

But as the tax legislation rushes through Congress and heads to the final negotiations, there is almost no chance for the public to grasp the tradeoffs that would come from eliminating the mandate and who is affected and who is not. If they did, the polling suggests, eliminating the mandate might prove far less popular than Republicans seem to think it is.

​Let’s see what the ACA’s subsidies can do

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It sure looks like Congress is about to repeal the Affordable Care Act’s individual mandate, which will put a lot of pressure on the law’s premium subsidies. What was once a “three-legged stool” — consumer protections, the mandate and premium subsidies — is down to two legs, and subsidies are the only remaining tool to try to attract the people who weren’t already inclined to seek health insurance.

What’s happening: When President Trump cut off federal payments for the ACA’s cost-sharing subsidies, insurers responded by increasing their premiums in a way that also bumped up the law’s premium subsidies — a bit of gamesmanship that few experts had fully anticipated, and which leveraged the structure of the premium subsidies to make up for the effects of political chaos.

The big question: Would something like that work again? Can subsidies make up the difference if the mandate goes away?

The answer: Probably not, policy analysts told my colleague Caitlin Owens and me.

  • “Mandate repeal could quite likely be the last straw for some insurers, and we are likely to see more bare counties for 2019, possibly bare states, as well as higher premiums as remaining insurers take advantage of their market power to raise premiums,” says Washington & Lee University professor Tim Jost, a vocal ACA supporter.

The bottom line: As premiums go up, subsidies go up. So subsidies would help shield the lowest-income consumers from the cost increases caused by the loss of the individual mandate.

Yes, but: The people who don’t receive subsidies will just have to bear the brunt of those costs. And it won’t be easy to concentrate premium hikes onto a specific set of plans, with the goal of increasing subsidies as much as possible, the way insurers did when Trump cut off cost-sharing payments.

  • “I don’t think there’s the same opportunity to play arithmetic games. Insurers will have to raise premiums across the board,” Kaiser Family Foundation’s Larry Levitt says.

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How One U.S. Clinic Disrupted Primary Care, Made Patients Healthier And Still Failed

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https://www.forbes.com/sites/robertpearl/2017/10/24/primary-care/#49ba8eee2c0f

Turntable Health launched in Las Vegas in 2013 and looked to turn the traditional primary care model on its head.

Zubin Damania has a face for television, a mind for medicine and the sort of fearless personality required to be one of the internet’s most famous MDs.

Damania’s celebrity began in earnest not long after someone posted a clip from his 1999 UCSF Medical School commencement address. In his opening, Damania jokes that he’s on a “time delay,” given his reputation as a “loose cannon.” The rest of the clip, which has been viewed over 130,000 times on YouTube, takes you briefly inside the mind of a versatile entertainer and healthcare visionary.

From UCSF, Damania completed his internal medicine residency at Stanford University. He spent the next 10 years as a practicing hospitalist by day and a healthcare satirist by night – writing, performing and filming musical parodies about the frustrations of being a doctor. He’s best known today by his online persona, ZDoggMD, and for his nightly Facebook show, covering the latest medical news with his trademark wit.

The rise and fall of Turntable Health

In 2013, Zappos.com CEO Tony Hsieh asked Damania to launch a next-generation medical clinic in Las Vegas as part of a $350 million downtown revitalization project. Founded as a primary care practice, Turntable Health looked to turn healthcare delivery on its head.

Inside a waiting room that resembled a sleek Silicon Valley startup, Turntable members passed the time by spinning records, playing Xbox and practicing yoga. As part of their membership, patients had access to an entire “wellness ecosystem,” complete with same-day visits, 24/7 doctor access (by email, phone or video), along with a dedicated health coach. Doctors at the clinic spent 45 minutes or more with their patients, quite unlike the 13 to 16-minute visits that have become standard in U.S. doctors’ offices.

Damania credits the vision for his clinic to a partnership he forged with Rushika Fernandopulle, CEO of another innovative primary-care organization called Iora Health. With Fernandopulle’s guidance, Damania focused on population health and disease prevention to improve patient wellness and, over time, lower costs. And rather than charging for each visit, test or procedure, Turntable patients who were not covered by traditional insurance paid a flat fee of $80 a month.

Unlike any other primary care clinic in Las Vegas, Turntable Health was a success, medically. By emphasizing prevention and doctor-patient relationships, Damania’s practice achieved superior quality outcomes, while providing rapid access to care and high patient satisfaction. But from an economic perspective, the clinic was a bust. Insurers shied away from member fees, insisting on more traditional reimbursements, which directly contradicted Damania’s long-term health strategy. Turntable Health was forced to close its doors in January 2017, just three years after opening.

In a public statement, Damania explained: “We flatly refused to compromise when pressured by payers to offer fee-for-service options, or to begin charging a co-pay. We firmly believe that healthcare is a relationship, not a transaction.”

Unfortunately for Damania, most health insurers are too impatient. Investing in primary care and chronic-disease management is proven to reduce and even avoid medical problems. But it can take five to 10 years for the improvements in the health of patients to offset the added upfront costs of providing the necessary care. Health plans worry patients will switch insurers before they can recoup such a long-term investment.

Primary care doctors can and do play a critical role in preventing disease, spurring lifestyle changes and warding off complications from chronic illness, when they have the time to do so. Today’s fee-for-service payment system doesn’t adequately reward these efforts.

Today’s insurers are systematically reducing primary care reimbursements, forcing doctors to see 20 to 30 patients a day while spending the bulk of their time in front of a computer, entering patient data for billing purposes. This backward approach to care delivery is wreaking havoc on the nation’s health and economy. As the incidence of chronic disease grows, the cost of American healthcare continues to rise more rapidly than the nation’s ability to pay.

The closure of Turntable Health was a major loss for Las Vegas, where residents joke that the best place to go for healthcare is the airport. Compared to people with access to integrated and coordinated medical care programs, Las Vegans are less likely to be insured, get the recommended cancer screenings and receive other necessary preventive care interventions.

Pushing primary care: Iora Health and One Medical

Damania’s partner in primary care, Iora Health, is experiencing relative success nationally, with 30+ clinics in 11 metropolitan areas. Using the same model of patient engagement and prevention that Turntable adopted, Iora has shown 35% to 40% drops in hospitalizations compared to their community peers, with 12% to 15% lower total healthcare costs. They’ve also established contracts with insurance companies who are willing to invest in primary care, thus solving one of ZDogg’s biggest challenges.

And they’re not alone. One of Iora’s leading competitors, One Medical, operates out of San Francisco under the leadership of Dr. Tom Lee. Labeled by some as a “concierge” medical practice, the company’s network includes 250+ doctors in 40 cities coast to coast. One Medical offers patients the ability to schedule same-day appointments, access their health records online, and fill prescriptions using the One Medical app – all for a relatively affordable yearly fee of about $149. With a promise that “your care is our highest priority,” the company makes the primary care experience more convenient and user friendly, a mission that’s been paying off since 2007. One Medical’s subscriber base continues to grow by tens of thousands of patients each year, particularly within the tech industry.

Although these extremely well-run primary care systems have improved outpatient quality and patient satisfaction, their impact on overall healthcare costs remains minimal. If Americans want to make healthcare affordable again, the scope and pace of change will need to accelerate at every point of care. This will require innovative approaches that rein in the rapidly escalating costs of specialty and hospital care, where most added national healthcare expenditures (NHE) exist.