Stop waiting for healthcare’s ‘twilight zone’ to end

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Healthcare might be complicated, but the Democrat-Republican divide on the subject is actually easy to explain. Because no one wants to deal with the difficult, complex moves we would need to create a system that is more consumer-oriented, fair, transparent, logical, and value-driven, those of us who pay the bills are consistently left with $1 to pay for $1.25 worth of services.

The Democrats say, “No problem … we’ll just give everyone an extra 25 cents to pay for that healthcare dollar until the cost goes down.”

Meanwhile, Republicans, who don’t like to give away money, say, “We just won’t completely cover 20 percent of people, so the net result will get us down to $1.”

Both sides are missing the tyranny of math. If you increase access to healthcare, you will by definition either increase cost or decrease quality (or both). If you want to increase quality, you will inevitably increase cost or decrease access.

That means the true solution to our national healthcare dilemma is disruption, which to this point none of us has had the incentive or gumption to deliver.

Here’s what needs to be disrupted:

1. The runaway pricing of drugs, especially given the fact that the largest payer in the universe (Centers for Medicare and Medicaid Services, which is the U.S. government, which really means the taxpayer) cannot negotiate pricing

2. The problem of OPM, or “other people’s money:” Healthcare is the only service we use that is largely disconnected from our wallets.

3. The lack of data coordination and/or aligned incentives between payers and providers

4. The way we handle end of life issues. No, we don’t need death panels, but we do need a logical, ethical, just, realistic allocation of finite resources.

5. The ridiculous contingency and malpractice rules that really don’t benefit anyone other than plaintiff lawyers (and maybe the Gulfstream Aerospace Corp., which sells those lawyers their private jets).

6. A payment structure for providers in which we ask primary care doctors to act like NFL quarterbacks, but we pay them like NFL kickers.

7. The lack of an “open-source coding” opportunity for EHRs that would significantly decrease costs for legacy systems and allow companies to compete on differentiation.

Managing the change

I know what you’re thinking: Aren’t we in the age of alternative payment models, like MACRA? Why aren’t all of us scared to death that we won’t be ready for all these alternative payment models? Simply put, many doctors and hospitals believe they can just wait out the current “twilight zone” of healthcare.

We all talk about transitioning from volume to value, but the pace is painfully slow and depending on your age, you can probably outlast the change. Why? Again, both government and providers are satisfied with incremental change — no pressure, no pain — when an “extreme makeover” is what we need.

As the CEO of Thomas Jefferson University and Jefferson Health, a large academic health system, I do not absolve myself from this grand overspending. Because of OPM, hospitals send ridiculously unreadable bills, because we know someone else is paying them. (Your brain would explode if you actually had to interpret them.) We have too many beds in many communities, yet we oversee organizations that are adding beds, and we have no way of ferreting out underperforming hospitals.

But we understand the need for change, so we have decided to make the leap from a hospital company to a consumer health entity. This means that while we have tripled in size since 2014, we have not increased beds. Instead, we’ve invested in telehealth, digital solutions, and strategic partnerships.

It means that in the last year we have merged our health science university with a university known for design, the built environment, and Nexus Learning. It means that we are working with technology partners to learn how to provide efficient, integrated, value-driven services — something academic medical centers are not necessarily known for.

And it means, most importantly, that we are taking a cue from the retail industry. That the future is getting care out to where people are. Malls are not dead, but I would rather do my holiday shopping in my pajamas watching “Game of Thrones” than deal with the cars and people at a mall an hour away.

Similarly, hospitals will still be needed, but our goal is to get care out to people wherever they are — in what we call a “hub and hub” model (as opposed to the traditional academic “hub and spoke” system).

At Jefferson, we are moving in this direction with our community hospital mergers and our investment in telehealth. But we know the change can’t come all at once if we want to keep our doors open. So we are leveraging our strength as a top-tier academic medical center to attract patients in need of our fee-for-service procedures like surgeries. We are deliberately phasing in telehealth as a replacement for ER visits.

And, importantly, we’re establishing appropriate incentives for physicians and other providers. To paraphrase Upton Sinclair, it’s hard to get people someone to do something when their salary depends on them not doing it. So we tied our chairs’ salary incentives to telehealth adoption. And we connected our payer partnerships to the savings elicited by getting care closer to home. It takes a lot of work and communication and some time, but you can start to align your physicians’ incentives with where the organization is going.

So, politicians, providers, pharma, insurers, lawyers, software folks, doctors, nurses, and everyone else in the healthcare ecosystem: Let’s get away from Congress’s current game, as Democrats and Republicans yell at each other about who has the best solution for an impossible task.

Instead, let’s think about ‘D & R’ not as Democrat and Republican, but Disruption and Re-imagination. Then we can stop blaming each other and enjoy the fruits of a logical, forward thinking, and equitable healthcare system.

Republicans Now Have 3 Options for Dealing With Health Care

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Badly wounded and humiliated by the latest turn of events, President Trump and Senate Majority Leader Mitch McConnell (R-KY) are blaming Democrats and a few disloyal Republicans who helped block action on the Senate GOP’s star-crossed plan to repeal and replace the Affordable Care Act.

In the aftermath of the devastating announcement late Monday by two conservative Republicans, Sens. Mike Lee of Utah and Jerry Moran of Kansas, that they were joining with Sens. Rand Paul of Kentucky and Susan Collins of Maine in opposing the bill, Trump and McConnell apparently are choosing retribution over statesmanship.

Related: The GOP Senate Health Bill Just Died as Two More Senators Say No

Unable to muster at least 50 of the 52 Senate Republicans to support the legislation – the bare majority they would need under budget reconciliation to pass the bill without a single Democratic vote and Vice President Pence casting the tie-breaking vote –the president and majority leader are vowing to press for action in the coming days to outright repeal the ACA while giving Congress two years in which to concoct a replacement plan.

But already there are indications that this Hail Mary pass approach will fail as well, with moderate Republicans pushing back.

Congressional Republicans and the Trump administration have argued for months that Obamacare, with its soaring premiums and diminished insurance choices, is in a death spiral and that Congress must save Americans from the ill effects of the 2010 legislation. But for all the problems of a program that has provided coverage to more than 20 million people, including expansion of Medicaid, the Congressional Budget Office (CBO) and other individual analysts say that the Obamacare markets have remained relatively stable, while polls show that voters much prefer to hang onto Obamacare than take their chances with the Republican approach.

McConnell, whose reputation as a shrewd deal maker has taken a beating in recent days, insisted Monday night and again today in a floor speech that the Republican-controlled Senate and House already approved a “repeal and delay” bill in early 2015 that President Obama vetoed, and that the two chambers could replicate that vote in the coming days.

Related: Why Trump Can’t Sell Health Care Reform – and the Price He’ll Pay for It

“Our Democratic friends have spoken a lot recently about wanting bipartisan solutions,” McConnell said. “This legislation will provide the opportunity for senators of all parties to engage with a fresh start and a new beginning for the American people.”

The president told reporters at the White House today that he wants to “let Obamacare fail” and then have the Democrats and GOP leader to “fix it.” He blamed the Democrats for putting the Republicans in an impossible position to pass comprehensive legislation and insisted that voters would ultimately hold the Democrats responsible. “I’m not going to own it,” he declared.

But in passing the repeal and delay legislation two years ago, the Republicans weren’t shooting with live ammunition: The bill was largely campaign messaging by the GOP, and everyone knew that Obama would prevent it from taking effect. Republicans blithely ignored the warning of the Congressional Budget Office (CBO) that the bill, if enacted, would result in havoc in the individual insurance market, skyrocketing premiums and out of pocket costs, and the loss of coverage for 32 million Americans by 2026.

Related: There’s a Nasty Surprise Hidden in the Fine Print of the GOP Health Care Bill

Trump’s and McConnell’s assertion that Democrats would have little choice but to join forces with the Republicans and negotiate a bipartisan compromise on replacement legislation if Obamacare were given a death sentence effective two years from now is fanciful at best. Senate Minority Leader Chuck Schumer (D-NY) says the Democrats are open for talks now on a wide range of measures to strengthen the existing law and bring down costs, but only if the Republicans abandon their insistence on repealing Obamacare.

“Make no mistake about it, passing repeal without a replacement would be a disaster,” Schumer said in a floor speech today. “Our health care system would implode, millions would lose coverage, coverage for millions more would be diminished, our health care system would be in such a deep hole that repair would be nearly impossible.”

While Republican prospects of making good on a seven-year promise to dismantle the Affordable Care Act appear next to zero at this point, the political situation remains fluid, with the outcome still very much in doubt. Here are three possible scenarios in the coming days and weeks: 

Repeal and delay: Like just about everything else connected with the Senate health care deliberations, the decision to go for repeal without replacing Obamacare was made in haste by McConnell and Trump after Lee and Moran jointly announced their opposition to the Better Healthcare Reconciliation Act.

Related: GOP Health Plan Hits Another Wall and McConnell Once Again Postpones a Vote

McConnell, 75, has few peers as a legislative strategist, and he is inclined to make split second decisions, as he did in declaring that the Senate wouldn’t consider a replacement for the late Supreme Court justice Antonin Scalia until after the 2016 presidential election, in hopes that a Republican president would make the choice.

Rather than allowing for a day or two of contemplation and consultation on how to proceed, McConnell announced that he intended to hold a vote in the coming days to take up the House-passed version of the Republican health care plan. He would seek passage of an amendment that would strip out many of the new GOP policies but eliminate major portions of Obamacare, including Medicaid expansion, insurance subsidies and fines for individuals and employers who failed to adhere to the law’s mandates.

But McConnell is likely to have as much trouble pushing through this backup approach as winning majority support for the health care reform legislation he almost single-handedly drafted.

Collins, a leading moderate in the party, denounced the approach and promised to vote against it this week or next when it is brought up. “I think [passage] would create great anxiety for individuals who rely on the ACA, I believe it would cause insurance markets to go into turmoil, and I don’t think it is the right way to proceed,” Collins told reporters today.

Related: Last Chance for the Senate GOP Health Plan: Let the Arm Twisting Begin

What’s more, moderate Sens. Shelley Moore Capito of West Virginia and Lisa Murkowski of Alaska told reporters that they too would oppose a repeal and delay approach, bringing to three the number of Republicans opposed to McConnell’s tactics and enough to stop them in their tracks. 

A bipartisan deal: Feelings about health care reform are running high on both sides of the aisle, and Republican disdain of Democrats for refusing to assist in rewriting the law is matched by Democrats’ contempt for McConnell in totally shutting them out of the backroom deliberations. For those who still believe that Obama and the Democrats passed the ACA without trying to make the bill a bipartisan effort, read this piece in The Atlantic, which shows how McConnell urged Senate to stonewall any cooperation with the Obama administration.

McConnell said recently that if the Republicans couldn’t agree among themselves on legislation to supplant the ACA, they would have no choice but to seek a limited bipartisan deal with the Democrats to buttress the nation’s insurance marketplaces. Schumer has repeatedly said that he was open to talks with the Republicans over the future of Obamacare, provided they abandoned their demand for outright repeal of the law and massive cuts in Medicaid for 70 million poor and disabled people,

“We’re ready to sit down right now” and negotiate “if Republicans abandon cuts to Medicaid, abandon huge tax breaks for the wealthy and agree to go through the regular order, through the committees, with hearings, onto the floor, with time for amendments,” Schumer said in a floor speech. “That’s how we perfect legislation here. That’s how it’s been done for nearly 200 years…. Almost inevitably when you try to draft something behind closed doors and not vet it with the public, it becomes a failure – in this case, a disaster.”

Related: The Lesson of the GOP Health Care Collapse: Make America Simpler Again

Should the two sides eventually get to the bargaining table, the Democrats are likely to press for a handful of other requirements, including the guarantee of a continuous flow of federal cost-sharing subsidies to enable insurers to lower premium costs for low-income consumers, a resumption of reinsurance or “rate corridor” measures that protect the insurance industry from unexpected massive losses, and some steps to rein in the cost of prescription drugs.

Robert Laszewski, a health care consultant, wrote to his clients today, “The fact is that there is no common ground that could garner more than a handful of Republicans willing to save Obamacare. Such an effort would almost certainly now take 60 votes and would require the cooperation of the Republican leadership in both houses willing to let some of their caucus give the Democrats an enormous victory.”

Status Quo and stumbling along: A third possibility is that dysfunction in Congress and a lack of leadership from President Trump could result in a prolonged state of the current status quo. That would present its own problems because the ACA needs serious repair in order to bring premiums and deductibles down to more manageable levels.

Related: Everything You Need to Know About Your Health Savings Account (HAS)

The cutoff of some subsidy payments to insurers and the Trump administration’s purposefully vague statements about whether it intends to keep paying others has created the sort of uncertainty that either pushes insurers out of markets they would otherwise serve or forces them to raise premiums to compensate for additional risk.

A continuation of the status quo could help Republicans sell their narrative of a failed Obamacare if it drives more insurers away, but it’s unclear that it would bring lawmakers closer to a viable alternative to the ACA.


Healthcare CEOs: Senate healthcare bill would have dire consequences

Cleveland Clinic, Kaiser, NewYork-Presbyterian executives are all concerned over the Senate’s bill.

Healthcare CEOs made the rounds of news shows in this week to air their grievances with the Better Care Reconciliation Act, the Senate GOP bill intended to replace Obamacare.

The American Hospital AssociationAmerican Medical Association, AARP, and several other organizations have registered their opposition to the proposed bill.

But, it’s healthcare CEOs who are working to mitigate the anticipated changes who are anticipating how the proposed legislation would affect their organizations.

Among healthcare chief executives weighing in on the topic in recent days are Cleveland Clinic CEO Toby Cosgrove, MD, New York Presbyterian CEO Steven J. Corwin, MD, and Kaiser Permanente CEO Bernard Tyson.

Cleveland Clinic CEO Toby Cosgrove

With the anticipated greater numbers of uninsured patients coming into hospitals, “you’re going to have hospitals that are in very deep financial trouble,” Cosgrove told CNBC’s “Squawk Box” on Wednesday. “And this is particularly true of rural hospitals and safety net hospitals, which are very dependent on Medicare and Medicaid for their returns.”

As he sees it, legislators are not looking at the “root cause of the problem.” It’s not how you divide the money,” he said. “The problem really is the rising cost of healthcare.”

“I think if we came together and dealt with the root cause there’d be plenty of money to go around to look after people,” Cosgrove said. “But if we don’t deal with it now, we’re going to have the same problem going 10 years from now.”

“We’re really headed in the wrong direction,” Cosgrove said. We’re talking about payment reform; we’re not talking healthcare reform.”

Kaiser Permanente CEO Bernard J. Tyson

Bernard J. Tyson, chairman and CEO of Oakland, Calif.-based Kaiser Permanente, wrote in a LinkedIn post that although the ACA – also known as Obamacare – is an imperfect legislation, future healthcare reform must build on its progress, rather than undo it.

“We need to pause and ask policymakers to answer the most fundamental question: What does progress on healthcare look like for the people in America?”

In his view, it should cover more people, not fewer people; be affordable.

Without question, we must make healthcare more affordable; provide the best quality of care and best health outcomes.

Tyson points out that the U.S. has among the poorest health outcomes compared to the other developed nations. The healthcare industry can improve quality if “we commit to moving from a predominantly ‘sick care,’ episodic, fee-for-service model to a predominantly preventive model with incentives for value, integrated care and, most important, keeping people healthy.”

“The draft bill does not expand coverage; it does not do enough to protect people in need of care, nor does it provide enough assistance to those who need help in paying for health care and coverage,” he writes.

NewYork-Presbyterian CEO Steven J. Corwin

Speaking to Bloomberg on Tuesday, Steven J. Corwin, CEO of NewYork-Presbyterian said, “Just remember this: One in three children in this country is insured by Medicaid. One in three.”

Corbin noted that two-thirds of the expense of Medicaid are for people who are in nursing homes.

“So, you can work all your life, be a grandma, or ma, and then go through your assets, and then you have to be on Medicaid to go into a nursing home,” he said. “This is going to be devastating to so many people.”

Asked whether he would prefer having something concrete done in Congress or just see the proposed bill go away, Corbin said: “I’d like to see it go away. And, I’d like to see the Medicaid expansion remain, and I’d like to see the insurance market stabilized.”


Shalala: What I Learned About How Hard It Is to Reform Health Care

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J. Duncan Moore Jr.

Independent journalist J. Duncan Moore, Jr., has been writing about health policy for more than 20 years. Recently he attended a health policy conference at the University of Miami where former Health and Human Services Secretary Donna Shalala reflected on lessons learned from her career in health policy and politics. Here is his report.

President Trump and Republican members of Congress continue to struggle with their many different plans to repeal and replace the Affordable Care Act (ACA). This is a high-risk venture on two levels. If they get their way, it could reduce the number of Americans with health insurance by more than 24 million, do away with essential health benefit rules, allow insurance companies to exclude customers with pre-existing conditions, and more.

Beyond those serious human impacts on Americans’ health and household finances, the political effects could be significant for the Republicans who control the legislative and executive branches. Polling shows dismal support for the GOP’s health care goals, and Republicans have been greeted by angry crowds at many town halls during the current congressional recess. This is all turning out to be much harder than they apparently believed during Barack Obama’s eight-year administration, when they tried more than 60 times to repeal the ACA but always knew their actions would be vetoed.

The political strife surrounding the proposed ACA repeal is not surprising to those who chased health care reform plans that went down to dust. Donna Shalala, who was secretary of Health and Human Services during the Clinton administration’s ill-fated health care initiative in 1993, recently recounted how difficult it can be to push a major domestic legislative overhaul. The graveyard of doomed health care initiatives is crowded, she pointed out, with tombstones memorializing efforts by Franklin D. Roosevelt, Harry Truman, John F. Kennedy and Sen. Edward Kennedy, Jimmy Carter, and Bill Clinton. Even Richard Nixon made a proposal that withered in Congress. “Sen. Kennedy said, toward the end of his life, ‘I wish I had signed on to the Nixon bill,’ ” Shalala recalled. Now it’s Trump’s turn to tempt fate.

“Taking giant steps in health policy takes a certain number of characteristics,” Shalala told an audience of 800 health care executives and policy experts in March at the University of Miami, where she formerly served as president. “Over the years we have learned what the elements have to be to do that. We have learned through the failures.”

Here are the lessons Shalala learned about major health policy legislation:

  • The president must have passion for pushing the bill through to completion. Presidents need to be prepared to use up a lot of political capital along the way. President Obama overruled the naysayers in his own White House because of the searing memory of his mother arguing with her health insurance company as she lay dying of cancer.
  • Move fast. Time is not on your side. “Presidents lose power every day. The height of their power is the beginning of the administration. In the Clinton Administration, we delayed. Clinton was distracted by other things.”
  • You must have a plan. President Obama had the advantage of being cornered during the 2008 primary season by Hillary Clinton, who released her own health reform plan. He was forced to think about his plan during the campaign.
    • Presidents must stay out of the weeds. Just keep trumpeting the big themes. “Carter loved the details. Clinton loved to get into the weeds.” It didn’t help them any.
    • You won’t get anywhere without congressional buy-in. “Just sending them up a bill was unsuccessful for any president.”
    • You must win the support of the stakeholders. “Every unsuccessful effort has been stopped by stakeholders: the American Medical Association, the hospitals, or the pharmaceutical industry.” In political science, she said, “we talk about negative coalitions. Every stakeholder decides there is something they don’t like. You have to put a positive coalition together. Lyndon Johnson tricked the AMA into supporting Medicare. Everybody knows the Obama story: with pharma, the nurses, the insurance companies, he learned from the previous experiences and lined up the stakeholders.”
    • Don’t mix the coverage issue with the cost issue. The successful reformers have not made holding the line on medical costs a major goal. “The politics of coverage is very different from bending the cost curve. The stakeholders line up in different ways. I have always thought the politics of coverage is much easier than the politics of cost control. If what they are talking about is pulling money out of the system, that is very different from putting a trillion dollars into the system and expanding the coverage.”
    • Finally: “You have to explain and explain and explain. You cannot let those in opposition capture the moment and capture the opposition. In the Clinton administration, the “Harry and Louise” ads killed us, even though they were only shown in Washington, DC. . . . Hillary made the mistake of talking about them; then they were all over network TV. We lost control of the story.”

      Shalala made these remarks in the context of a public one-on-one dialogue with Kathleen Sebelius, who was Obama’s HHS secretary during and after passage of the only successful major health reform since the 1960s. Toward the end, she said to Sebelius: “No one ever gets their legislation perfect. What would you have done differently?” Sebelius ticked off a list of regrets: They should have reduced administrative paperwork, Congress should have funded the insurance risk corridors, HHS needed more outreach and education money, Medicaid should have been expanded to every state.

      For Democrats, the political costs of passing this comprehensive legislation have been steep. Largely because of united Republican opposition to their reform law, they first lost control of the House of Representatives, then the Senate. They lost control of many houses in state legislatures, 10 governor’s offices, and finally, the White House.

      Speaking of regrets, I asked them in the question period, “Was what you gained worth the enormously consequential price you paid?”

      Shalala cut me off: “We got 20 million people covered with health insurance,” she said. A huge wave of applause rewarded her statement.

      For Shalala, that’s the bottom line. Everything else is secondary.