Use of Paid and Unpaid Personal Help by Medicare Beneficiaries Needing Long-Term Services and Supports

http://www.commonwealthfund.org/publications/issue-briefs/2017/nov/paid-unpaid-help-medicare-ltss?omnicid=EALERT1312698&mid=henrykotula@yahoo.com

Abstract

  • Issue: Older adults who reside in communities, as opposed to nursing homes or other residential institutions, are largely dependent on family and unpaid caregivers for assistance with daily activities, like preparing meals or laundry, and self-care tasks like bathing or dressing. For low-income older adults, assistance with such activities, also known as long-term services and supports (LTSS), can also come from Medicaid. These sources of support will be increasingly inadequate as the population ages.
  • Goals: To examine the extent of paid and unpaid personal care assistance used by community-residing people who require LTSS; and to analyze how this differs by demographics and the economic status of Medicare beneficiaries.
  • Methods: Descriptive analyses of the National Health and Aging Trends Study (NHATS), 2015.
  • Findings and Conclusions: Medicare beneficiaries needing LTSS rely predominantly on unpaid care. Hours of unpaid care are not substantially lower when paid care is also received. Findings suggest that public financing of LTSS would not replace but rather supplement the contribution of family and unpaid caregivers to support individuals living independently in the community.

Introduction

Despite the increasing number of adults with functional disabilities and cognitive impairments, financing for long-term services and supports (LTSS) has made little policy progress in the past few decades.1 One possible reason for the impasse is policymakers’ concern about the cost of undertaking such an initiative. Currently, financing for LTSS is split between the federal and state governments through the Medicaid program, which accounts for two-thirds, and private sources, which pay the other one-third. Of the $211 billion spent on LTSS in 2011, $45.5 billion (22%) was paid out of pocket.2 For low-income Medicare beneficiaries who meet income and asset eligibility, as well as the institutional level of need requirement, Medicaid covers some LTSS, although availability and accessibility vary greatly across states.3 As estimated by the Congressional Budget Office (CBO), family caregivers contribute the most care, at an estimated economic value of $234 billion in 2011.4 Many policymakers fear that providing public financial support for LTSS will replace the care that is currently being provided for free by family caregivers. This issue brief uses data from the National Health and Aging Trends Study (NHATS) from 2015 to examine use of paid and unpaid care among community-residing people who need LTSS.

Availability of Help for Older Medicare Beneficiaries Who Need Long-Term Services and Supports

In this first part of our analysis, we focused on the people with probable dementia (see How This Study Was Conducted) or those who have difficulty with activities of daily living (ADLs) or instrumental activities of daily living (IADLs). ADLs are also known as “self-care activities” and include eating, bathing, dressing, transferring in and out of bed, toileting, and walking across the room. IADLs are higher-level activities that allow an individual to continue living independently, such as medication management, meal preparation, grocery shopping, finances, and laundry.

Two of five older adults in this population report not receiving any help. Older men were more likely to report not receiving any help than were older women (49% vs. 37%) (Exhibit 1). Rates of not receiving help were particularly high among blacks and other minority groups (41% and 52% respectively), as well as those who lived alone (50%). Even among those who lived with their spouse, two-fifths of respondents reported not receiving any help.

Conclusion

Long-term services and supports are not covered under Medicare despite many beneficiaries reporting needing help with self-care activities.8 The resistance to a public financing option for LTSS is based largely on the costs of such a program and the concern that it would substitute for care that is already being provided by family caregivers.9 This issue brief confirms that older adults who need LTSS rely heavily on family caregivers. However, this method of providing care is unsustainable, given the increasing numbers of older adults who will require LTSS as well as the declining availability of family caregivers.10 In addition, study results find that significant numbers of community-residing older adults with a need for LTSS do not receive help.

This analysis shows that the amount of unpaid care provided varies little between those who receive both paid and unpaid support and those who receive unpaid support only, suggesting that paid care does not replace unpaid care, but supplements it. Addressing and supporting the need for LTSS can result in savings to individuals and the government through delayed nursing home and Medicaid entry.11 A public LTSS financing solution, like Medicare Help at Home,12 that supports individuals and family caregivers would improve the supply of long-term services and supports and allow for their quality to be monitored to ensure older adults can live safely in the community.

 

GRAPHIC: The era of big hospitals

https://www.politico.com/agenda/story/2017/11/08/trends-in-us-hospitals-000576

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Once primarily rooted in communities and run as charities, hospitals have morphed into huge businesses… and they are getting bigger. Fueled in part by an increase in revenues under the Affordable Care Act, hospitals have been expanding and merging, in some cases becoming chains of more than 100 hospitals.

And it doesn’t seem to matter if the hospitals are officially not-for-profit or for-profit… the distinction seems increasingly irrelevant. In fact, it appears that in terms of patient care, nonprofit chains are among the most profitable hospital systems in the country. Instead of paying shareholders, the nonprofits can simply plow their profits back into the hospitals in the form of new equipment, buildings or spend it on personnel… fueling even more expansion.

The case against hospital beds

https://www.politico.com/agenda/story/2017/11/08/the-case-against-hospital-beds-000575

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Two summers ago, I opened The New York Times Magazine and saw a startling centerfold ad that seemed to foretell the future: a sweeping panoramic image of people relaxing and strolling in Central Park, overlaid with large block text that read, “IF OUR BEDS ARE FILLED, IT MEANS WE’VE FAILED.” You could hardly have guessed it was a hospital ad. The logo for the Mount Sinai Health System was stamped in the upper corner, almost like an afterthought.

Around the same time, I was beginning a project funded by the Robert Wood Johnson Foundation to examine whether hospitals and health care facilities are well designed for their modern purposes—to produce more health, rather than just deliver more health care. And it became clear that one of the most important challenges for hospitals to address will be a simple one: the association of hospitals with beds.

When the health care industry talks about hospitals, it tends to use the language of facility planners—one in which “patients” and “beds” are equivalent. This is the legacy of a very different era in medicine. Modern hospitals are historically rooted in the sanatoria and asylums of the mid-19th century, originally conceived to isolate patients with conditions such as tuberculosis and lunacy from the community, not to protect their rights. The move from open wards to closed rooms was perhaps the first major reform in hospital design—motivated by a need for isolation as our understanding of communicable diseases and infection control became more sophisticated.

Today, hospitals are struggling with the next reform—how to move on from an era when bedrest was the default medical therapy. When President Dwight Eisenhower had a heart attack in 1955—before we had beta blockers, angiograms and stents—his White House physician recommended prolonged bedrest. Today, bedrest is still the default treatment for stomach bugs and colds, certain types of musculoskeletal injuries and pregnancy conditions. And indeed, convalescing in bed has value for some conditions. But increasingly, we’re learning that even relatively short bed confinement can be unhelpful for many patients—and prolonged bedrest can be dangerous at worst. Getting up and walking, even after hip surgery, has been shown to improve circulation, prevent blood clots and promote wound healing.

However, this isn’t how hospitals are built. Currently, very few hospital spaces are designed with the assumption that most of our patients need to walk to be healthier. The patient in a gown staggering down a cluttered hospital hallway, IV pole in hand, is as comically out of place in real life as it is on TV. A patient canwalk, but it’s awkward. Patients are frequently required to dodge bustling clinicians, carts and stretchers along the way.

To fix the immediate challenge of letting patients walk in a building built around beds, some hospitals have begun investing in walking tracks or trails, as well as indoor and outdoor nonclinical-appearing “healing gardens.”

But our changing understanding of how people get healthier raises bigger design questions for hospitals—as well as the broader question of when hospitals are even the right place to get healthier. In my own specialty, obstetrics, there’s evidence that the current design of labor and delivery units may be associated with avoidable, and frankly harmful, C-sections. With colleagues at Boston’s Ariadne Labs and the MASS Design Group, we compared childbirth facilities across the country and found that there are no standards for how many labor rooms or operating rooms a hospital needs to have based on the number of babies it delivers. As a result, the capacity of hospitals to care for patients varied widely. Hospitals that had relatively more operating rooms and relatively fewer labor rooms tended to do more surgery.

Part of the reason may be that many of these units are retrofitted from spaces that were not originally intended to support normal labor. Indeed, for pregnant women, walking regularly throughout labor, particularly during the early phases, is thought to promote progress toward delivery.

Some corners of the health care world are already starting to embrace new, less bed-focused models of care. Ambulatory surgical centers have latched on to a strong business model for the growing number of operations for which several days in bed are neither required nor recommended. A venture-capital based birthing center franchise is currently aiming to do the same—birthing families are often admitted and discharged on the same day, and beds are in the corner of the room (for resting and breastfeeding after the baby is born), rather than in the center; the idea is to encourage the mom to use movement as much as possible to support her labor by literally sidelining the bed. Health systems are increasingly investing in other types of spaces where bedrest is not the default, including skilled nursing and rehabilitation facilities, as well as home visiting nurses and health coaches to help high-need patients with acute and chronic conditions stay out of the hospital.

It’s not just keeping patients in bed that could use a rethink—it’s keeping them all closed off. In 2017, both community and hospital-acquired infections are still a clinical concern, but the dominant threats to human health—heart disease and cancer, for instance—no longer require isolation. In fact, with the exception of a few acute instances in our lives, most of us benefit from the opposite. Former Surgeon General Vivek Murthy has recently characterized loneliness as the most common “pathology” he encountered in medical practice—insidious but present on an epidemic scale. Future hospitals may find opportunity to intentionally forge connections. A community hospital in Massachusetts recently created an early labor lounge for patients who did not yet need a labor and delivery room, but could not return home. Rather than curtaining her off, the lounge was set up to let mothers socialize with their families and with one another in a relaxing and comfortable setting. Anecdotally, the lounge seemed to be most effective at preventing premature hospital admission when it was full.

They may also get a boost from new payment models, in which health systems have an incentive to take on the challenge of population health management. Rather than getting paid by the procedure, which creates an incentive to put more patients in more beds and offer larger amounts of care, they’re opting for models in which they get paid for producing larger amounts of health—which requires considering where patients really get healthier, whether that’s at the hospital or in homes or in community settings. The future demands this shift, as year after year, the costs of care continue to rapidly outstrip the benefits.

Michael Murphy, a visionary architect who has pushed his field to consider ways that hospitals can better promote human health, claims that design is never neutral. He says design either hurts or it heals. The more we know about healing, the more it appears that health care spaces will need a different approach—one that sometimes looks more like a park than a long fluorescent hallway full of beds.

 

29% of US health system payments tied to alternative models

https://www.beckershospitalreview.com/finance/29-of-us-health-system-payments-tied-to-alternative-models.html

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The percentage of U.S. health system payments linked to alternative payment models grew to 29 percent in 2016, up from 23 percent a year prior, according to a Health Care Payment Learning & Action Network report.

For the analysis, LAN calculated the amount of health plan in- and out-of-network spending that went through APMs. Analysts examined data from 78 health plans, three fee-for-service Medicaid managed care states and fee-for-service Medicare.

Here are three key findings from the report.

1. Forty-three percent of systems’ payments flowed through fee-for-service or legacy payment models in 2016. This is compared to 62 percent in the year prior.

2. Payments through pay-for-performance or care coordination fees reflected 28 percent of payments last year, up from 15 percent in 2015.

3. APM spending totaled about $354.5 billion nationally in 2016.

The doctor of the future

http://www.politico.com/agenda/story/2017/10/25/role-of-physician-in-healthcare-000554

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In new healthcare systems, ‘the doctor’ is increasingly a team. Can actual physicians adapt?

When patients go to see Dr. C.T. Lin for a checkup, they don’t see just Dr. Lin. They see Dr. Lin and Becky.

Becky Peterson, the medical assistant who works with Lin, sits down with patients first and asks them about their symptoms and medical history—questions Lin used to ask. When Lin comes in the room, she stays to take notes and cue up orders for tests and services such as physical therapy. When he leaves, she makes sure the patient understands his instructions.

The division of labor lets Lin stay focused on listening to patients and solving problems. “Now I’m just left with the assessment and the plan—the medical decisions—which is really my job,” Lin says in a quiet moment after seeing a patient at the Denver clinic where he works.

For generations, when Americans sought health care, they went to see their family doctor. But these days, they’ll often sit down with a physician assistant or nurse practitioner instead. Or they’ll spend a large part of their visit talking to a non-doctor, like Peterson, who takes care of an increasing number of tasks doctors used to handle.

Driven by efforts to control costs and improve outcomes, it’s one of the biggest shifts in the American health care workforce. Medicine increasingly looks like team sport, with duties and jobs that used to fall to a family doctor now executed by a team, from nurses who sit down with patients to discuss diet and exercise to clinical pharmacists who monitor a patient’s medication. The doctor, in this model, is a kind of quarterback, overseeing care plans, stepping in mostly for the toughest cases and most difficult decisions.

Under some models, the doctor may recede even further into the background, leaving advanced practice nurses or other highly qualified professionals in charge.

It’s no longer true “that you’re a sole cowboy out there, saving the patient on your own,” says Mark Earnest, head of internal medicine at the University of Colorado medical school.

The shifting role of doctors is expected to accelerate in the coming decades, as the number of older Americans increases dramatically, many of them living longer with chronic diseases that need monitoring but not necessarily the expensive attention of a physician at every visit.

Doctors increasingly oversee the work of a team of medical professionals, including nurses and medical assistants, who handle much of the direct interaction with patients.

This isn’t the job many physicians trained for—or that some want. Even doctors who support team-based care have trouble adjusting to the new workflow. Some don’t like the idea that they aren’t always the ones in charge. Others, sick of the industry pressures, are opting out and setting up independent practices that don’t accept health insurance.

But most doctors will have to adapt. Change is coming, regardless of the fate of the Affordable Care Act or other laws designed to reward health systems for outcomes rather than the number of procedures performed, says Randall Wilson, an associate research director for Jobs for the Future, a nonprofit that advocates for increasing job skills. “People see the writing on the wall,” he says.

New models

Americans spend more on health care than people in other wealthy nations. Yet Americans live shorter lives and are more likely to be obese or hospitalized for chronic conditions, such as asthma or diabetes.

Health care experts have long blamed these lousy results on our fragmented health care system. Americans rely on a mix of specialists and settings for care, but those pieces of the health care system don’t necessarily communicate or coordinate with each other.

They also blame the high costs partly on the fee-for-service payment system, which rewards hospitals, clinics and doctors for the volume of procedures they provide. Health insurers will pay for a patient sit down with a doctor. What they sometimes don’t pay for are other services that help patients stay healthy, such as a visit from a community health or a phone call with a nurse. Yet such services can prevent medical emergencies and save her and her insurer a lot of money on expensive treatments.

New payment models encourage health systems to deploy their workers more efficiently — while also avoiding unnecessary services and costly errors. For instance, Medicare already gives some hospitals a single payment to cover everything that happens to a patient from the moment he enters a hospital for knee replacement surgery to three months after he goes home.

Distributing work across team members can help keep costs down, relieve doctors of the busywork that jams up their day, and make everyone more productive.

At least, that’s the idea. There isn’t yet strong research that proves teams provide better or cheaper care, says Erin Fraher, director of the Carolina Health Workforce Research Center, a national research center at the University of North Carolina. Studies do show that nurse practitioners can deliver care as well as physicians, “but talking about substitution of one provider for another is not team-based care,” she says.

Major physician associations support improving teamwork and collaboration among health care professionals. So do medical school leaders. For some years now, accreditors have required colleges and universities that train doctors, nurses, pharmacists, dentists and public health experts to teach students to work in interprofessional teams.

But when it comes to the question of who is in charge, that’s where friction arises. Many doctors aren’t comfortable with the idea that they don’t always need to be in charge. The American College of Physicians will say a physician must always lead care teams, says Ken Shine, professor of medicine at the Dell Medical School at the University of Texas at Austin, but he disagrees.

“My argument is there are situations where another health professional needs to be directing the team,” Shine says. For instance, a nutritionist could create and manage a care plan for a diabetic patient.

Medical associations have also pushed back against proposals to expand the medical decisions non-doctors are able to do make on their own. Health professionals’ so-called “scope of practice” is governed by laws that vary from state to state. “While some scope expansions may be appropriate, others definitely are not,” the American Medical Association says on its website.

In a statement, the association says it “encourages physician-led health care teams that utilize the unique knowledge and valuable contributions of all clinicians to enhance patient outcomes.” It noted that top hospital systems are using physician-led teams to improve patients’ health while reducing costs.

To be sure, doctors aren’t being displaced anytime soon. But shifting tasks to other professionals reduces the need to train so many of them. According to a study by the Rand Corporation, a nonpartisan think tank, a standard primary care team model requires about 7 doctors per 10,000 patients. Increasing the numbers of nurse practitioners and physician assistants can drop that ratio to six doctors per 10,000, and in clinics run by highly trained nurses (known as nurse-managed health centers) the ratio drops to less than one doctor per 10,000.

Culture Change

Hospital systems like UCHealth, the University of Colorado-affiliated system where Lin and Peterson work, are betting that the future of health care involves a mix of professionals sharing responsibility for patients. Doctors will still run the show, but they’ll have to give up some control.

That culture change makes many doctors uneasy at first. Doctors want to protect their one-one-one relationship with patients. They may not understand what their non-physician colleagues have been trained to do, or are legally able to do. And many worry that change will make them even busier, by forcing them to manage the lower-credentialed professionals around them.

Lin is the chief information officer for UCHealth. As an administrator, he’s always pushing for change—his latest project is a system that releases certain test results to patients in real time. But as a practicing doctor, he also understands that change is hard.

He says that having Peterson in the examination room with him took some getting used to. “Like many doctors, I have a fear of letting go of all the things I traditionally do,” he says. That includes documenting a visit. “I’m getting over it, because I don’t want to be the only one here at 8 o’clock at night, typing.”

Matt Moles, a doctor who practices in the same clinic, says he also initially felt uncomfortable. Sharing the examination room went against his medical training, he says: “We’re trained to trust no one.”

It’s still possible for doctors to have jobs that resemble the Norman Rockwell era of long consultations—if they’re willing to opt out of the mainstream. A small but growing number are setting up or joining practices that, rather than taking health insurance, charge patients a monthly fee—typically around $75— for unlimited visits.

“I personally have the mentality of—leave me alone, I’ll take care of my patients,” says Dr. Cory Carroll, when reached by phone at his family care practice in Fort Collins, Colorado. He’s been a solo practitioner for most of his 25-year career.

Carroll has about 300 patients, a fraction of the patient load of a typical doctor in a big health care system. He sits with patients for over an hour if he has to. He visits them at home. He helps them connect with social services and community organizations. And he can focus on what he loves most: teaching patients to eat a healthier diet.

His practice is proof that it’s still possible for a family doctor to do it all. But he emphasizes that his experience is unusual. “I’m absolutely an outlier,” he says. Less than a quarter of all internal medicine doctors in the U.S. have a solo practice, according to the American Medical Association’s latest survey. And although the model Carroll has embraced is growing, it serves a more affluent slice of the patient population than a major hospital system such as UCHealth.

The team-based future

UCHealth’s leaders are so sure that team-based care is the future that newly built clinics, such as the one in Denver’s Lowry neighborhood at which Lin and Peterson work, are literally built for teamwork. Examination rooms don’t line long hallways; instead, they ring desk space where nurses, physicians and medical assistants sit side-by-side.

But the clinic is still in the early stages of transforming its teams. The best place in Denver to watch a diverse set of health professionals working together is across town, at a facility run by Denver Health, the city’s public safety-net hospital system. The facility includes a primary care clinic, an urgent care center and a pharmacy.

One recent morning, the distant wail of a baby in the waiting room announced the start of another busy day. Doctors, physician assistants, nurse practitioners and medical assistants were already typing away at the computers in their cubicles, trying to get a head start before the first patients were shown in to examination rooms.

“A lot of Denver Health patients are so complex,” explains Dr. Benjamin Feijoo, looking up from his desk. Patients often have multiple health issues, too many to handle in a typical 20-minute visit. “It’s a bit of a crunch,” he says.

So Feijoo turns to his colleagues for help. For instance, if a patient has both a medical and a mental health issue, Feijoo can address the medical problem and then ask a mental health specialist to step into the examination room and tackle the mental health problem.

If a patient needs, say, a crash course on prenatal health, she can meet with a nurse for an hourlong discussion. And if a living situation is compromising a patient’s health—such as unstable housing, or insufficient access to healthy food—the clinic’s social worker will try to find a solution.

The clinic also employs two community health workers, who spread the word about Denver Health in low-income neighborhoods, and a patient navigator, who calls the clinic’s patients when they leave a Denver Health hospital (and, for a subset of patients, other major local hospitals) and helps them schedule a follow-up appointment with their primary care provider.

Denver Health began expanding its care teams in 2012, when it received a $20 million federal grant. The system spent about half the money on hiring staff such as social workers, patient navigators and clinical pharmacists and the rest on software that identifies patients who are spending avoidable time in the hospital, including people who are homeless or have a serious but treatable condition, such as HIV. New, smaller clinics wrap even more services around those patients, allowing them to come in for multi-hour visits.

The new system now saves Denver Health—an integrated system, which includes a health plan—so much money on hospital stays and emergency room visits that it covers the salaries of the additional hires, says Tracy Johnson, the director of health reform initiatives for the system.

Reconfiguring care teams has made financial sense for UCHealth, too. Although the clinic where Lin and Peterson work has roughly twice as many medical assistants today as it had a year ago—plus a social worker and nurse manager—the configuration saves doctors so much time that they’re able to see more patients each day. The extra visits bring in enough money to cover the cost of adding more employees.

“The reason a lot of this happened is physician burnout was significant, especially in primary care,” says Dr. Carmen Lewis, the medical director of the Lowry clinic. The redesigned teams launched earlier this year aim to make doctors’ lives less stressful.

Patients across the UCHealth system don’t seem to mind the change. A few will ask to speak with their doctor in private, but others are more open with the medical assistant than with their doctor. “Sometimes, they don’t feel as judged,” Peterson says.

Lin says that since he’s started working with Peterson, his patients have been better able to keep their blood pressure and diabetes under control. “Patients will forget to tell me that they’re out of prescriptions,” he says—or he’ll be so busy tackling a more immediate problem that he’ll forget to ask.

With a medical assistant methodically asking all the opening questions, crucial details such as prescription renewals no longer slip through the cracks.

Rethinking medical school

Medical school leaders want to make sure the next generation of doctors has the skills and mind-set the jobs of the future will require—such as the ability to lead teams effectively, draw insights from data sets and guide patients through a system full of bewildering treatments, care settings and payment options.

Students traditionally spend the first two years of medical school learning science in classrooms and two years getting hands-on experience at clinical sites. That’s no longer enough, says Susan Skochelak, group vice president for medical education at the American Medical Association.

She says students need to understand “health system science”—everything from how health insurance works to how factors such as income and education affect health. “We had medical students who were graduating, not knowing the difference between Medicare and Medicaid,” she says.

So in 2013 the AMA began issuing grants to medical schools that wanted to do things differently. One program allowed Indiana University to put anonymous patient data into an electronic health record students can use to search for clues to a patient’s health—such as whether he is showing signs of opioid addiction. Another grant allowed Pennsylvania State University to create a new curriculum that requires medical students to work as patient navigators.

“Brand new medical students—they totally get the need for this,” says Robert Pendleton, a professor of internal medicine at the University of Utah and the university hospital system’s chief medical quality officer. At this year’s kickoff for an elective curriculum on data and performance measurement, he says, students packed the auditorium.

And all medical schools are trying to emphasize teamwork. At the University of Colorado medical school, the idea that doctors should treat non-doctors as partners—not subordinates—is impressed on students from Day One, says Harin Parikh, a second-year student.

The medical school shares a campus with education programs for six other health professions. Students hang out on the same quad, grab lunch in the same places, and even take some classes together. In a required first-year class, students from a mix of health fields are split into teams and are asked to plan a response to given scenarios. One day, a nursing student might lead the team; the next, a pharmacy student.

Parikh says the team-based approach makes sense to him. “From a provider perspective, it’s about checks and balances,” he says. When multiple people, with different kinds of expertise, come together around a patient, one may notice something the others don’t.

Reorienting medical schools, like reorienting hospital systems, will take time. Scheduling barriers can make it hard to get students from different health fields in one room, for instance. Some faculty members aren’t prepared to teach a new kind of curriculum. And when students leave school for their clinical training, they work in real-life settings that are all over the spectrum when it comes to teamwork.

“We’re working on an ideal,” says John Luk, assistant dean for interprofessional integration at the Dell Medical School at the University of Texas at Austin. “But the reality is, many of us have not been practicing at the ideal.”

Top 5 Concerns of Healthcare CFOs

http://www.healthleadersmedia.com/finance/top-5-concerns-healthcare-cfos#

Planning for a HealthLeaders Media gathering of hospital and health system chief financial officers reveals the weightiest issues on their minds.

Preoccupying the minds of healthcare financial executives are prevailing problems engulfing the industry’s business climate: uncertainty about healthcare reform, declining public and private reimbursement, accelerating operating expenses, and access to capital.

This August, 50 healthcare finance leaders will collaborate on fortifying their organizations’ fiscal health at the 2017 HealthLeaders CFO Exchange in La Jolla, CA.

In pre-event planning calls, CFO Exchange attendees, representing integrated health systems, academic medical centers, community hospitals, and safety net providers, have mentioned some of the struggles they’d like to know how others are tackling.

During the two-day event, a series of moderated, peer-to-peer roundtables will explore how organizations are addressing the top five issues.
1. Dismantling of the Affordable Care Act

CFOs foresee the negative financial impact a repeal will generate and are interested in knowing how others are preparing for anticipated changes in Medicaid for expansion and non-expansion states.

2. Enhancing and Supporting Population Health

CFOs are concerned about building the right infrastructure to support population health, including integrating physicians, retooling their workforce, realigning the financial tracking of population health efforts, incorporating behavioral health in primary care, and determining how much payer risk to assume.

Executives expressed their concerns about knowing how and when to invest resources in a relatively uncharted path.

In addition, they are interested in how to bring disparate goals together to align with population health efforts.

3. Curtailing Clinician Costs

Optimizing access and productivity to ensure profitability among acquired physician practices, reducing clinical practice variation and cost-per-case, and lowering costs associated with filling in with agency labor due to the nursing shortage are challenges for senior executives.

Organizations will be requesting and sharing strategies for seizing the reigns on clinician expenses.

4. Increasing Revenue

Overcoming reimbursement struggles, uncovering innovative ways to cut costs, and ascertaining solutions to avoiding readmission penalties are common goals for CFOs.

5. Determining Gaps and Opportunities

Another goal shared by CFOs is the desire to share the most useful data analytics and business intelligence platforms for improving quality-of-care and outcomes.

In addition to their larger concerns, participants at the invitation-only event will talk about consumerism, direct contracting for healthcare with employers, charting a financial strategy on value-based care, and ideas about what competition will look like in the future.

Population Health Advisors

Click to access Translating_Data_Analytics_into_Population_Health_Insights_BSW.pdf

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Healthcare’s Dangerous Fee-For-Service Addiction

https://www.forbes.com/sites/robertpearl/2017/09/25/fee-for-service-addiction/#49a2e221c8ad

For its many users, healthcare’s fee-for-service reimbursement methodology is like an addiction, similar to gambling, cigarette smoking and pain pill abuse. Doctors and hospitals in the clutches of this flawed payment model have grown dependent on providing more and more healthcare services, regardless of whether the additional care adds value.

I don’t use this metaphor lightly, nor wish to trivialize our nation’s growing problem with addiction. Rather, as a physician and former healthcare CEO, I am increasingly concerned with the impact this payment structure is having on American health. And I worry about whether providers are willing to “kick the habit” before it’s too late.

Addictive Qualities

The Affordable Care Act, signed into law March 2010, included several provisions encouraging doctors to focus on increasing value (instead of simply maximizing the volume) of healthcare services. And yet, seven years later, between 86% and 95% of U.S. healthcare providers are still paid for each individual test, procedure and treatment they provide, an arrangement that continues to drive up healthcare costs with little to show for it. According to the latest Commonwealth Fund report, the United States spends more on healthcare than any other industrialized country but ranks at or near the bottom in almost every measure of comparative quality.

As with any addiction, America’s dependence on fee-for-service has dire financial and health consequences. This year, the estimated cost of care for an insured family of four will reach nearly $27,000, paid for through a combination of employer health insurance ($15,259), payroll deductions ($7,151) and out-of-pocket expenses at the point of care ($4,534). Year over year, patients are on the hook for a higher percentage of their total healthcare costs, which rose 4.3% compared to just a 1.9% increase in the U.S. GDP last year. This is a major warning sign. If medical costs continue to surge 2% to 3% higher than our nation’s ability to pay, the healthcare system will soon reach a breaking point. Businesses, the government and insurers will have no choice but to ration care or slowly eliminate coverage for the nation’s poor, middle-class and elderly populations.

As with all addictions, the fee-for-service model has mind-altering effects, distorting the perceptions of its users in ways that make them unaware of their growing dependence. When providers are paid for doing more, that’s what they do: They increase utilization of services and ratchet up the cost of care without even realizing they’re part of the problem. According to one study, just 36% of practicing physicians were willing to accept “major” responsibility for reducing healthcare costs. Of course, the first step, as with other habits, is to recognize the problem. Only then can we explore treatment options.

Outcomes-Based Pharmaceutical Contracts: An Answer to High U.S. Drug Spending?

http://www.commonwealthfund.org/publications/issue-briefs/2017/sep/outcomes-based-contracts-high-drug-spending

Abstract

  • Issue: Brand-name prescription drug prices are increasing in the United States, putting pressure on payers and patients. Some manufacturers have responded by offering outcomes-based contracts, in which rebate levels are tied to a specified outcome in the target population.
  • Goal: To assess the expected benefits and limitations of outcomes-based pharmaceutical contracts in the U.S., including their potential impact on prescription drug spending.
  • Methods: Semistructured interviews with payers, manufacturers, and policy experts.
  • Key Findings: Pharmaceutical manufacturers and some private payers are increasingly interested in outcomes-based contracts for high-cost brand-name drugs. But the power of these contracts to curb spending is questionable, largely because their applicability is restricted to a small subset of drugs and meaningful metrics to evaluate their impact are limited. There is no evidence that these contracts have resulted in less spending or better quality.
  • Conclusions: Outcomes-based contracts are intended to shift pharmaceutical spending toward more effective drugs, but their impact is unclear. Voluntary testing and rigorous evaluation of such contracts in the Medicare and Medicaid programs could increase understanding of this new model.

Background

In an era of rising health care spending and constrained budgets, U.S. policymakers and payers have tried to shift providers’ financial incentives from those that pay for greater volume of care to those that pay for high-value care. This move from volume to value is in its early stages, with most payment still based on old fee-for-service models.1

However, fueling the move to value-based purchasing are provisions in legislation such as the Affordable Care Act of 2010 and the Medicare Access and CHIP Reauthorization Act of 2015. These provisions encourage providers to participate in risk-bearing arrangements and institute programs that base Medicare reimbursement on patient clinical outcomes measures, such as hospital readmission rates. Private payers have initiated similar performance-based incentive programs and risk-sharing arrangements for hospitals and physicians.

In this vein, some pharmaceutical manufacturers and private payers are seeking to apply an outcomes-based pricing model to the prescription drug market. Prices for brand-name drugs have risen far above increases in the consumer price index.2 According to a Kaiser Health Tracking Poll, 77 percent of Americans consider prescription drug costs to be unreasonable.3 Prescription drug spending is mostly driven by high-price, brand-name drugs, which account for about 12 percent of prescriptions but 72 percent of total drug spending.4

One response to these high prices has been increased interest in outcomes-based contracts, which tie rebates and discounts for expensive pharmaceutical products to the outcomes observed in the patients who receive them. Outcomes-based contracts are touted as possible ways for purchasers — such as insurers and health care systems — to improve value. That is because under such contracts, purchasers pay more for a drug when it works and less when it does not. However, whether such arrangements can achieve this goal remains controversial.

To gain insight into the benefits and limitations of outcomes-based pharmaceutical contracts, we interviewed pharmaceutical economics experts and individuals involved in developing these contracts, including those affiliated with pharmaceutical benefits managers and health plans. In this issue brief, we review the main themes that emerged from these data and evaluate whether these arrangements can help improve the value of pharmaceutical spending.

Relevance is King, and “The Top of the Funnel” is Most Relevant to The Most People

http://thinkrevivehealth.com/2017/09/relevance-is-king-and-the-top-of-the-funnel-is-most-relevant-to-the-most-people/

 

CVS’ recent announcement that the company is expanding its reach in chronic care management is the latest sign that the market has never been more competitive or complicated. (Are you asking yourself, “which market?”) CVS isn’t just protecting its PBM business and driving sales for its retail business. The company has plans to provide one-on-one support and coaching — in a store, via phone, or video — to people who have diabetes, asthma, hypertension, hypercholesterolemia, or high cholesterol, and depression.

This, of course, follows in the footsteps of other companies encroaching on traditional provider-territory, like Optum. OptumCare, the care delivery arm of the company, has 22,000 physicians in 30 markets and 200 surgery centers in 33 states. The combination of the two presents a formidable continuum that could provide consumers with most of the outpatient services they’ll ever need. In other words, the health system brand defined by superior service lines will continue to be less and less relevant as the “top of the funnel” becomes more competitive and more important.

Despite the fierce competition, many health systems continue to focus a large majority of marketing dollars on down-funnel service line care, such as chronic disease treatments and surgeries. There’s logic to that strategy: market and differentiate the services that are most profitable and keep you in business. The problem is that logic doesn’t work in a digital age when consumers have more choices and less patience. Their healthcare mindshare is occupied by a host of companies — like CVS Health and OptumCare — that are more relevant to their daily life than heart surgery or cancer care.

HEALTH SYSTEMS MUST ESTABLISH (AND MAINTAIN) CONTROL OVER THE TOP OF THE FUNNEL

Therein lies the problem for health systems. When Joe Public interacts with your brand, relevance is king. And as we all know, specialty care isn’t relevant to the vast majority of people most of the time. When the competitive field wasn’t as crowded and consumers weren’t showered with more than 5,000 ads every day, it was easier to make an impression that might not be relevant in the moment but could be recalled later when it mattered. That day has passed. The emphasis must shift from awareness and impressions to real engagement.

Health systems — just like any other brands — must be relevant and provide value as often as possible to stay engaged with consumers. Think about your continuum of services as a funnel (Figure 1). Primary care, urgent care, ER, and health & wellness programs sit at the top as these are the services most often used, and represent the most common entry point into your system.

They are also more subject to cost and convenience scrutiny. To maximize the path to specialty and surgical care in the middle of the funnel, health systems can’t just rely on people who go through the side of the funnel – those who did their research to determine which hospital had the best cardiovascular outcomes in the region. For most health systems, the vast majority of their down-funnel, inpatient service line volume — more than 75% — comes from prior top of the funnel activity, not from out of the blue. Health systems need to get as many people in the top of the funnel to build brand, build engagement, and feed all service lines.

Why? Because this is the best way to engage consumers and build brand loyalty. Brand loyalty develops as consumers repeatedly engage with a service over time, and they become repeat customers if they are satisfied. A good experience at the top of the funnel can lead to more profitable business in the middle of the funnel. In fact, our research and work with hundreds of health systems across the country reveals that most people who receive specialty care at a health system had at least one prior experience. And where does most engagement with the healthcare system occur? At the top of the funnel.

Back to CVS. Health systems run the risk of being expensive specialty factories if they cede control of the top of the funnel to competitors — especially competitors who are not other hospitals. The strongest relevance is at the top of the funnel, which is where prescriptions and chronic care management live along with a host of other more frequently used services. CVS Health, Optum, Walgreens, Amazon, and even Google present formidable, well-resourced companies vying for the top of the funnel in some capacity.

What’s your strategy?