Health for life

So, how bad is it?

While HHS Secretary Sebelius Affordable Care Act nostrums help the Obama Administrations muddling of policy and election year politics, CMS Chief Actuary Richard Foster has stepped forward (see page 277) with some blunt language about Medicares solvency.  As the Disease Management Care Blog understands it, official projections on just when the money runs out are based on current law. 

Thats the rub:  

"While the Part B projections.... are reasonable in their portrayal of future costs under current law, they are not reasonable as an indication of actual future costs. Current law would require a physician fee reduction of an estimated 30.9 percent on January 1, 2013—an implausible expectation."

"[W]hile the Affordable Care Act makes important changes..., there is a strong likelihood that certain of these changes will not be viable in the long range. Specifically, the [anticipated] annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The best available evidence indicates that most health care providers cannot improve their productivity to this degree—or even approach such a level—as a result of the labor-intensive nature of these services."

"Without unprecedented changes in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services are very likely to fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for ... many services would be less than half of their level under the prior law. Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems.... Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market.... "

"Finally, the economic outlook remains more uncertain than usual. Due to the sensitivity of HI trust fund operations to wage increases and unemployment, the current slow recovery from the recent recession adds a significant further element of uncertainty to the trust fund projections."

1. Using traditional research to detect a "statistically significant" decrease in insurance claims expense is notoriously difficult.

2. Theres scientific statistical proof and then there is a reasonable business assurance.  The latter may be enough for business-minded health insurers.

3. The conclusion is based on published research.  Unpublished "in house" data have convinced many insurers to include the medical home in their covered benefit.  They know something AHRQ doesnt.

4. While medical homes alone may be insufficient to save money, that doesnt mean that medical homes that are part of a package of interventions (value-based purchasing, P4P, vendor-based population health management or an ACO) are unnecessary.

5. While there is no evidence of savings, there is also no consistent evidence of increased cost. That means the quality associated with the medical home represents high value.

That being said, the U.S. Agency for Healthcare Research and Quality (AHRQ) Evidence Report Technology Assessment on the Patient Centered Medical Home says:

"Based on a combination of good- and fair-quality studies, there is a low strength of evidence that PCMH implementation may lead to lower utilization (inpatient and emergency department) for some subgroups of patients, but this effect was not uniform. Moreover, total costs were not lowered in the reviewed studies.

However, three observational studies specifically designed to test PCMH do report lower inpatient and emergency department utilization among patients in the PCMH program. However, total costs were not statistically different for PCMH and non-PCMH patients in the three studies. None of the clinical trials of functional PCMH interventions had statistically significant differences between intervention and control arms for inpatient or emergency department utilization.

No studies reported statistically significant cost savings among PCMH patients. In fact, when taking into account program costs, two studies, one good-quality trial and one fair-quality observational study, reported greater total costs among intervention patients."

 Image from Wikipedia

Freelance work is light this month, and I’m finding myself with more time to spend in the kitchen. My good pal JBF, however, is busier than ever.

As are most worker bees these days, she is doing the jobs of several, keeping late hours, and coming home exhausted. She manages to cook healthy dinners, but making lunch to take to work is a challenge.

She finds herself eating on the run, spending insane amounts of money for midtown Manhattan lunches, and making less than healthy choices that sabotage the good work she is doing in other areas.

Since my unceremonious kick to the curb (from the job where I was doing the work of several), I’ve been working from home. For the most part, I have time to cook healthy meals for myself every day. (These habits were already in place, so it wasn’t much of a shift.)

JBF’s struggle gave me an idea. What if I made lunch for both of us—kind of like a personal chef-lite?

The Proposal

1. Share food costs, saving us both money (I’d make enough for both of us.)
2. JBF: Kick me a little extra for my effort 
3. Leigh: Make 5 inexpensive, healthy lunches and snacks per week
4. Leigh: Provide variety, but dishes can repeat (We both easily lock into dishes we love.)
5. JBF: Report back with perences every couple of days
6. Leigh: Call/email to arrange drop off/pick up
7. Leigh: Submit an invoice with food and labor at the end of the week
8. Everybody wins: I stay on a schedule and make a little extra scratch, and JBF gets healthy lunches and snacks for less than she was spending on take out.

While JBF is an omnivore, she eats primarily vegetarian when dining sans hubby. She gave me carte blanche to make the meals veggie, even vegan. She also loves to try new things, so I’m at liberty to be creative. And as we know, keeping it interesting is the golden rule of sticking to any kind of healthy eating plan.

Here’s how it’s been shaking out.

JBF’s Take-out Stats
(click on graph to enlarge)




Lunch Buddy Stats for Week One
(click on graph to enlarge)


That’s over 40%!

Week two demonstrated similar savings, though we operated on a four-day week. So far our little arrangement has been a success! I’m sticking to a meal plan, which is hard for me, as well as experimenting with new dishes. JBF is getting healthy, home-cooked meals delivered to her door (We live near one another; it’s no big.), and we’re both in the black.

We’ve even made time to eat together on occasion, and that’s the best part of the deal.

~~~

If this article had you dancing in the aisles, shimmy on over to

• Vegetarian Meal Planning for Meat Eaters
• The Brown Bag Brigade: Your One-Stop Shop for Work Lunch Ideas
• Meal Planning—An Experiment and A Conversion

You sure about that?

According to the White House, the Affordable Care Act (ACA) is obviously responsible for the significant decrease in health care cost inflation over the last three years.
The respected health economist Victor Fuchs, writing in the New England Journal, disagrees.  He points out:

1) there is a strong relationship between growth in the U.S. gross domestic product (GDP) and growth in health care spending: for the last 60 years, when one goes up, the other follows suit.  While the prevalence of illness drives the consumption of health care, it turns out that the prevalence of illness plus a rising income is a stronger driver of health care consumption*.

Its far more likely that the lackluster economy has been responsible for the low rate of inflation.

2) Two to three years is not enough time to guage the impact of any single intervention on health care spending. In his NEJM article, Dr. Fuchs presents a graph showing the relationship between a two year period of spending and what follows over the next twenty years.  It turns out its a very poor predictor.

So, even if the ACA could have an impact, its far too early to tell.

In the meantime, skeptics like Bob Laszewski, are pointing to richer mandated insurance benefits and are confidently predicting that health care costs are destined to increase.  Former CBO Director Douglas Holtz-Eakin worries young healthy adults wont sign up, which could further fuel health insurance premium increases.

Who to believe?  A partisan White House?  Skeptics who want a return to market-based insurance?  The DMCBs solution is to believe Dr. Fuchs and confidently state it doesnt know which way things are going to go.

*The only exception to the association between GDP and health care costs was during the mid-1990s when managed care had its stranglehold on the delivery system

Image from Wikipedia

When pundits claim that health care spending is out of control, what do they mean?

Does it mean that Massachusetts outlawing of hospitals excessive price increases is a good thing? That rolling back the Affordable Care Act will automatically usher in a new round of price gouging? That when the DMCB generates another medical co-pay, the DMCB spouse is right to wave a copy of the bill around and demand that the DMCB do something now to orm the U.S. health care system?

As the Disease Management Care Blog understands it, what the pundits, Massachusetts legislators, patient advocates and the DMCB spouse mean is that more and more of our nations gross domestic product (GDP) is being spent on health care services.

That assumes wed all be better off if the U.S. were spending its national treasure on stuff like manufacturing, technology, education and innovation. So, instead of committing just under 18% of our output on hospital care, physician services, nursing homes, medical devices and drugs, wed all be better off if we spent it on the production of solar panels, Facebook, public school vouchers and iPhone apps.

That way we wouldnt be struggling with the prospect of another 1% gain on GDP (to 19%) and the looming possibility that well soon be spending a whopping fifth of our economy on health care.

But is the spending on health care really that bad?  As noted here, the DMCB pointed out that non-government-insured health care costs have been moderating for years.  Whats more, recent year-to-year increases in health care spending in the U.S. are actually lower than much of the developed world.

And now theres one more reason to doubt the prevailing wisdom about rising health care costs. Charles Roehrig, Ani Turner, Paul Hughes-Cromwick and George Miller of the curiously name Altarum Institute point out that the normally rising and falling GDP associated with routine economic cycles can make steady health care costs look relatively worse or better than they appear.

To dampen the impact of a cyclic economy on the assessment of health care spending, the authors compared health spending to U.S. "potential GDP." Apparently, this obscure economic metric has been used by economists to portray what GDP would be if the economy were operating at full employment of the current population and without any idle production capacity.  This metric has the advantage of "smoothing out" many of the peaks and valleys of the normally measured GDP.

Using potential GDP as the comparative baseline, the authors found that health care spending growth gained less than 1% of the economy starting in July of 2005, well before the onset of the Great Recession of 2008. In other words, during that time, the health care industry grew pretty much at the same rate as the "potential" GDP. 

Whats more, in June of 2009, health care cost growth gained an additional 1% of potential GDP, only to fall back below 1% again in May of 2011.  Most of the increases seemed to be accounted for by Medicare Part D spending; if that particular cost is backed out, excess growth would have been 1% or less throughout the measurement period.

The authors can only hypothesize on why health care costs didnt outstrip the U.S. economy. While it could be partially accounted for by the rising numbers of uninsured (who would have avoided going to hospitals or seeing doctors), the authors point out that other trends could have played a role: changing physician practice standards, increasing numbers of salaried physicians, market pressures pushing down on fee schedules, increases in patients out-of-pocket expenses making them less likely to access the care system, new care models (including disease management?), the increasing use of generics, previously expensive drugs going off patent and the drop-off in the number of "blockbuster" pharmaceuticals.

This means when the economy bounces back and/or Obamacare results in more insured Americans, there is no guarantee that underlying health care inflation will return.

Remember the last Health Wonk Review?  The Disease Management Care Blog recalls being impressed by the description of the "Health Care Cost Institute," a not-for-profit outfit that was established to store de-identified commercial insurance claims data for research purposes. The participating health insurers are Kaiser, Aetna, UnitedHealthcare and Humana. The database covers 33 million individuals less than age 65 years with employer-sponsored insurance. The DMCB suspects its personal Aetna claims information is in there, somewhere.

The DMCB is more impressed, because the HCCI has just released its first report on 2009 and 2010 health care cost trends. Its full of insights. 

To wit:

1) If youve wondered why your 2010 personal health insurance cost so much, its because per capita spending was $4,255. This suggests insurers are not the only problem.

2) Costs in 2010 increased over baseline by 3.3% and was driven by an increase in unit prices (i.e., charges), not by greater utilization or overall mix of services.  This suggests providers are charging more for their services.

3) While costs increased, beneficiaries out-of-pocket costs grew at a faster rate. In 2009, they paid 15.6% of their bill, while in 2010, they paid 16.2% - an increase of 3.8%.  This suggests that insurers are passing a small but painful amount of the additional 2010 provider charges to the consumer.

The DMCB says bravo to the four insurers for making this information available.  This and promised future reports should shed light on health care cost trends.

Image from Wikipedia

One outcome of the Disease Management Care Blogs authorship of this manuscript that questioned the merits of the electronic health record (EHR) was an enduring belief that these systems didnt save money. The DMCB doubted that it would increase provider efficiency, decrease avoidable complications, reduce duplicative testing or increase quality. Its best educated guess was that the impact on overall health care costs was neutral.

According to six members of the United States Senate, the DMCB was wrong. They say the EHR may waste money and increase health care costs.

Thats among the conclusions of Senators Thune (R-S.D), Alexander (R-TN), Roberts (R-KAN), Burr (R-NC), Coburn (R-OK) and Enzi (R-WY) in their just-released report "Reboot: Re-examining the Strategies Needed to Successfully Adopt Health IT."

They point to the phenomenon of "code creep," which can result from using EHRs to document more extensive patient histories and physical examinations that, in turn, are used to justify an "upcoded" and theore richer bill with a higher payment.  In addition, the Senators point to research that suggests code creep can be linked to an increased ordering of clinical testing and services.  Last but not least, they point out that once an incorrect diagnosis enters the EHR, it is practically impossible to delete it, leading subsequent providers to mistakenly believe it is still active.

And to add insult to injury, Reboot describes the response of a "CMS official" who was asked about the above concerns.  The answer was that it would take years for the Agency to better understand the phenomenon.

The DMCBs take?

Closer examination of the Senators report shows that much of the cost concerns are based on lay media reporting instead of any peer reviewed studies.  That being said, there may be merit to the idea that EHRs can game billing systems.  It warrants further research.

Is partisanship playing a role?  The DMCB cant deny its a factor, but the same underlying motivation may be underlying CMSs unwillingness to do anything to diminish the Democrats health orm "branding."

Last but not least, the Agencys guess that it would take "years" to examine the concern is overly optimistic.  There are outside analytic/research outfits that can do a faster, better and cheaper job of coming up with an answer. 

The Senators and the U.S. taxpaying public deserve to know if this is true.

Alt for Norge!

The Disease Management Care Blog is decamping to Norway for a meet-the-family and see-the-sights vacation.  The good news is that Europe is 8 hours ahead, which means the DMCB will know about the Supremes Thursday decision 8 hours before anyone else.  The bad news is that in the coming days, its posts will become infrequent at best.

In the meantime, check out this just-published JAMA article on the PCMH. 669 primary care centers participated in a Harris survey commissioned by the Commonwealth Fund.  While the "Safety Net Medical Home Scale" was not based on the NCQA, it inquired about the familiar care domains.  The 0 to 100 scale was correlated with financial data from the Uniform Data System reports that reflected the clinics operating costs.

Unsurprisingly, the authors found that as the medical home score increased, so did the operating costs. Moving from 60 points to 70 points increased the cost per patient per month by $2.26.  While the authors calculated that translated into more than half a million dollars of additional expense for the average clinic, the DMCB notes that kind of expense for an average physician panel of 1500 patients means more than $40,000 per year.

Readers familiar with the cost of disease and population health management will find that $2.26 PMPM statistic very significant because thats in the range of what is charged by many vendors.  Whats more, the vendors charges include a profit margin which was not necessarily included in the clinics study data.

Conclusions?

The PCMH is not necessarily "cheaper" than outsourced care management.

While the PCMH may (statistically significant proof remains elusive) "save money," it appears they have the same challenge faced by the disease management industry in the early days: savings net of fees doesnt necessarily equal profit or a financial gain for the health insurer or consumer.

The levers that control health care costs

Ask an average voter how health insurers reduce costs and, thanks to years of hostile anti-insurer rhetoric, he or she will tell you that they "deny."  Think of it as "deny^2" for both the person (who is no longer insured) as well as the procedure (which is "not covered"). 

Sophisticated Disease Management Care Blog readers know better. "Deny" stories are mostly anecdotal and that kind of misbehavior is largely prohibited. 

If insurers want to save money, there are far smarter ways to do it.  The same is true for government sponsored insurance.

After reading this Health Affairs article, the DMCB discovered that Canada, France Germany and England are using those smarter ways.

And so is the United States government.

Hows that you ask?

While health care costs in other developed countries are lower than the United States, the contrarian DMCB has pointed out that todays costs are not all that important. A far more ominous trend is the rate of growth, a.k.a. "trend."  Year-after-year increases in health costs that outstrip GDP are far more threatening to governments fiscal health, especially when budgets are being strained by other priorities, like combating terrorism, keeping tax-dodging French movie stars from moving to Belgium and helping Mr. Bieber retrieve his pet monkey from Germany.

So what are Canada, France, Germany and England doing to control health care costs?  According to the DMCBs read of Mark Stabile and colleagues article, they are using three strategies:

1. Budget shifting: This involves individual beneficiary cost-sharing, as well as cost-shifting to private insurers and/or local governments. Ottawa, Paris, Berlin and London are also eliminating coverage of "low-value" services, devices or drugs. Yet, since backing away from universal coverage is out of the question, the central governments are also providing funding that protects low income individuals from otherwise unaffordable out-of-pocket costs.  While theyre at it, coverage for "high value" services such as hospice, immunizations, dementia care (Germany) and hypertension care (France) is being expanded.

2. Budget setting: While England and France use national caps (that are flexible and subject to adjustments), all four countries have a growing reliance on regional or local price fixing as well as capitated payment arrangements. Pay-for-performance is being substituted for otherwise routine budget increases and consumers are being given their their own fixed personal spending accounts.  This helps limit the likelihood of future budget increases. 

3. Direct controls of health care supply: examples of this include cutting the number of hospital beds, eliminating coverage of certain drugs, increasing the number of primary care providers, using health technology assessment and relying on practice guidelines.

If this sounds familiar, it should.  As the DMCB noted here, the Feds are reducing Medicares risk exposure by asking individual beneficiaries, providers and State governments to take on a greater share of health care costs.  Theyre also imposing budget controls by capitating providers with bundled payment and risk contracting arrangements. Last, but not least, theyre controlling the supply of health care services by, for example, increasing payments to incent the adoption of electronic records and increase the pool of primary care providers.

It turns out rising health care costs are a global problem with the same set of policy options.