Health for life

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  Unpublished "in house" data have convinced many insurers to include the medical home in their covered benefit.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

This way to consolidation....

Disease Management Care Blog readers may recall that Medicares Hospital Readmissions Reduction Program was among the many provisions of the Affordable Care Act. 

According to the finalized regulations, if a hospitals readmission rate within 30 days for heart attack, heart failure or pneumonia exceeds an established norm (using three years of data based on a minimum of 25 patients with a statistical risk adjustment to account for co-morbid conditions), that hospitals Medicare payment rates will be reduced for all discharges in the following year. The reduction, depending on the excess rate, can go from zero (readmissions meet the norm) to a maximum of 1% (the hospital penalty results in payment of only 99% of the applicable fee schedule).

Now, Kaiser Health News has just looked at the numbers and calculates that, thanks to the HRRP,over 2000 hospitals will forgo close to $300 million. According to KHN, 278 hospitals - including some household names - will achieve the dubious distinction of a full 1% reduction.  You can check out how your local hospital will likely fare here.

While readmissions themselves are a significant problem, the approach used by the HRRP has its own set of under-appreciated methodologic challenges (as noted here and here). Now that hospitals are about to get battered by a well-meaning if flawed payment system, your DMCB raises one more red flag:

This will drive hospital consolidation.

That may well be one intent of the law. Cheesecake Factory logic tells us that large hospital systems have the intellectual and capital resources to systematize care, apply best practices, reduce variation and maximize outcomes.  Rather than weep for those hospitals that are losing income, Washingtons policymakers are probably hoping that the losers have one more reason to join forces with the bigger, smarter and more efficient hospitals or systems nearby or in the next state (especially the ones with a smartly run disease management program).

Yet, whether or not hospital consolidation alone would make a palpable difference in cost or quality remains to be seen (as indicated here and here). What could happen instead is the rise of too-big-to-fail, politically connected and market-dominant health care systems.

Well see.

Image from NIHSeniorHealth

Hugging a health insurer

Its an old conservative joke, but what is the one key difference between health insurers and terrorists? 

Answer: liberals only occasionally attack terrorists.

For the latest example of the continuing disdain for health insurers, check out this rather typical July 5 Washington Post article "Is this the end of health insurers?" After extolling one enlightened companys decision to self-insure its workers*, writer Sarah Kliff points out that hospitals can cut out the insurer middle man and offer the same service. The result, says the article, will be the wiser use of the premium dollars, lower costs and fewer coverage denials.

While the physician Disease Management Care Blog agrees that the health insurers have only themselves to blame for their bad reputation, it doesnt think that these companies are going to go away anytime soon.  Its not because, under Obamacare, U.S. citizens are now required to buy their product at any price.  Its not because they control hundreds of billions of dollars.  And its not because theyve had the ear of the political class for years.

The contrarian DMCB thinks theyll continue to stick around because they perform a two useful public services:

1. Keeping Providers From Going Belly Up: There have been too many examples of hospitals and physician organizations being unable to collect todays premium dollars and hold them as a promise to pay for tomorrows sickness.  Whether its not charging enough or being unable to say no, providers are vulnerable to running out of cash and being unable to cover their insureds health care bills.  The DMCB says its better to insulate hospitals and doctors from the perils of the underwriting cycle.  Insurers do that.

2. Keeping Providers From Going to the Dark Side: Assuming a hospital or physician organization can hold the dollars, pay for all that health care and end the year in the black, theres a good chance that theyll do it by ultimately employing the same tactics used by many mainstream insurers: denials of services based on determinations of "medical necessity."

*As an aside, self-insured companies dont always act in the their employees best interest.  Look at this infamous example and note that Cigna only "administered" the insurance plan on behalf of a self insured organization.