PNHP

Blog: Do patients held for observation skew performance on quality measures?

Blog: Do patients held for observation skew performance on quality measures?

By Melanie Evans 
Modern Healthcare, Vital Signs, Aug. 27, 2015

Just how much success have hospitals had in their efforts to prevent patients from returning soon after leaving? Perhaps not as much as reported, two physicians argue at the blog for health policy journal Health Affairs. 

Why? Because Medicare patients who end up in hospital beds for observation technically do not count as repeat visitors. 

The number of patients who are held for observation has grown, as has been widely reported, as Medicare began to audit short hospital visits and deny full payment for admissions.

But David Himmelstein and Steffie Woolhandler, doctors and researchers with the City University of New York School of Public Health, argue that the desire to avoid readmissions is another incentive for hospitals to hold patients for observation. Medicare tracks return trips to the hospital and penalizes hospitals with high rates of readmissions. Most (76%) face penalties for 2016, according to a Modern Healthcare analysis. 

“Recent data indicates that such gaming isn’t just a theoretical possibility,” they wrote. That is not just a problem for quality improvement. For patients, observation stays can come at an added cost because of Medicare coverage rules. (A newly enacted bill requires hospitals to let patients know they are being held for observation.)

The doctors cite analysis of data between 2010 and 2013 by the Yale New Haven Health Services Corp.’s Center for Outcomes Research and Evaluation that was conducted for the CMS. 

The data show a “significant but weak” inverse correlation between observation stays for heart attack patients who recently left the hospital and readmission rates for heart attack patients. 

Himmelstein and Woolhandler also note that rising emergency department visits for heart attack patients who recently left the hospital further diminish the readmission performance. “For patients discharged after heart attacks, the urgent return rate has actually risen slightly; the reported 1.8% fall in readmission is more than offset by a 0.7% increase in observation stays and a 1.2% increase in ED visits,” they wrote. 

The analysis also found weaker evidence that observations and emergency department visits replaced readmissions. The correlation was “very weak” but significant for heart failure, pneumonia and chronic obstructive pulmonary disease. 

For some readmissions measures, the analysis found no evidence at all. There was no correlation for patients who had a stroke, hip or knee replacement or for hospitalwide readmissions. 

However, Woolhandler notes readmission penalties applied only to heart attacks, pneumonia and congestive heart failure between 2010 and 2013. 

The doctors wrote that some hospitals have likely worked hard to prevent readmissions.

“These aggregate figures surely hide vast differences among hospitals,” they wrote. “Some hospitals have undoubtedly reduced readmissions by doing the hard work of fully stabilizing fragile patients prior to discharge, improving communications with outpatient providers, assuring diligent follow-up, etc.” 

However, that may not always be the case, they concluded. 

“But others appear to be hitting their readmission targets mostly by gaming the system—re-labeling rather than re-designing care,” they wrote. “Medicare rewards both approaches equally, but for hospitals, re-labeling is probably far cheaper (and more profitable) than re-designing.” 

Medicare’s incentives are poorly designed and allow for cheaters to flourish, they said. 

The report quotes the graffiti artist Banksy, who once said, “Become good at cheating and you never need to become good at anything else.”

http://www.modernhealthcare.com/article/20150827/BLOG/150829910

Lower Hospital Readmissions a Mere Label Change, Analysis Says

By John Lauerman
Bloomberg Business, Aug. 27, 2015

  • Fewer returns driven by billing gimmick more than Obamacare
  • Providers seeking to avoid cuts in Medicare reimbursement

Lower U.S. hospital readmission rates that have been touted as an Obamacare victory are due mostly to a billing gimmick that increases costs to patients, health-care researchers said.

To dodge hefty penalties from Medicare for repeat admissions, hospitals increasingly shunt returning patients to emergency rooms or classify them as “observation stays,” which put patients on the hook for more of the bill, according to an analysis published in Health Affairs Blog.

Medicare, the government program for the elderly, has targeted readmissions as a way of improving hospital care. Under the 2010 Patient Protection and Affordable Care Act, known as Obamacare, thousands of hospitals have had their Medicare reimbursement cut because of high rates of patients returning soon after their discharge.

“In essence, it’s a lot of bookkeeping tricks instead of a real effort to improve care,” said David Himmelstein, who co-wrote the analysis with Steffie Woolhandler. “They’re saving Medicare some money by shifting costs onto patients.” Himmelstein and Woolhandler, professors of public health at City University of New York, have argued that Obamacare doesn’t go far enough in reforming the health-care industry and support a single-payer system.

Fewer Returns

While the rate of Medicare patients returning to hospitals within 30 days of discharge stayed relatively steady at about 19 percent from 2007 through 2011, it dropped to about 17.5 percent in 2013, according to government data. Reduced readmissions means patients get better treatment at lower cost, according to the Department of Health and Human Services. The department didn’t immediately respond to a request for comment.

The decline may also mean that hospitals are simply putting another label on returning patients, Himmelstein said. Observation stays doubled from 2006 through 2013, and about a third of the claimed decrease in admissions from 2010 to 2013 is due to an increase in observation stays, according to the study, which analyzed data released last year by the Medicare Payment Advisory Commission.

Akin Demehin, senior associate director of policy for the American Hospital Association in Washington, said hospitals work hard to avoid readmissions and have had some success. Other analyses haven’t found a link between falling readmissions and increased emergency visits or observation stays, he said.

“Unfortunately, this blog post makes sweeping assertions of cause and effect based largely on high-level information on volumes of admissions, observation stays and emergency department visits,” he said in an e-mail.

Observation Stays

Medicare classifies patients in observation stays as outpatients, even though they may spend days in a hospital room. Patients are responsible for about 20 percent of their hospital costs, and Medicare won’t cover a subsequent stay in a physical therapy facility, as it does for regular hospital admissions.

About three-fourths of U.S. hospitals will have their Medicare reimbursement rate cut next year because they’ve exceeded limits on readmissions. The rule hurts safety-net hospitals that serve the poor especially hard, said Peter Pronovost, director of the Armstrong Institute for Patient Safety and Quality at Johns Hopkins Medicine in Baltimore.

“We might treat a lung-disease patient who can’t afford to buy an inhaler we prescribed,” he said. “If the patient is readmitted, there might be a penalty to the hospital that doesn’t reflect the quality of care.”

The Obamacare rule should be changed to account for patients’ socioeconomic status, Pronovost said.

The readmission measure is just one of many pay-for-performance ideas that have failed in health care, Himmelstein said.

“Get rid of it,” he said.

http://www.bloomberg.com/news/articles/2015-08-27/lower-hospital-readmissions-a-mere-label-change-analysis-says

Hospitals game Medicare readmission rules, avoiding fines but penalizing patients: Health Affairs Blog study

Research spotlights how Medicare’s recent patient readmission penalties induce hospitals to cheat and corrupt data on quality

FOR IMMEDIATE RELEASE
August 27, 2015

Contact:
Mark Almberg, PNHP communications director, 312-782-6006, mark@pnhp.org

Hospitals’ growing practice of re-labeling Medicare patient readmissions as “observation stays,” or treating returning Medicare patients in the emergency room, has allowed many hospitals to skirt Medicare’s financial penalties for poor-quality performance that were mandated by the Affordable Care Act, researchers say.

However, such practices, while aiding a hospital’s bottom line, constitute a form of gaming that frequently leaves patients worse off financially.

Those are some of the key findings of a study published today by the Health Affairs Blog titled “Quality Improvement: ‘Become Good At Cheating And You Never Need To Become Good At Anything Else’” by Drs. David Himmelstein and Steffie Woolhandler, professors at the City University of New York School of Public Health and lecturers at Harvard Medical School.

The authors write: “In most cases, observation patients receive care in a regular inpatient unit, and get treated just like other inpatients. And in many cases, observation stays stretch out to several days: in 2012, 26 percent lasted two nights and 11 percent at least three. But from Medicare’s point of view, this is outpatient care, which leaves patients responsible for more of the bill, and ineligible for Medicare-paid rehab or skilled nursing care.”

Citing data from the Medicare Payment Advisory Commission’s March 2015 report to Congress, they note that between 2006 and 2013, “observation stays increased by more than half of the total apparent decline in total Medicare admissions during that seven-year period.”

They add that data from the Centers for Medicare and Medicaid Services (CMS) show that “between 2010 and 2013, 36 percent of the claimed decrease in readmissions was actually just a shift to observation stays.”

The authors also note that besides the upsurge in observation stays, an increasing number of recently discharged Medicare patients are being treated in emergency departments (ED) without being admitted.

Citing CMS data, they write: “For patients discharged after heart attacks, the urgent return rate has actually risen slightly; the reported 1.8 percent fall in readmission is more than offset by a 0.7 percent increase in observation stays and a 1.2 percent increase in ED visits.”

The authors note that some hospitals have undoubtedly reduced readmissions by providing better care, while others are clearly engaged in this gaming behavior.

More broadly, however, they assert that Medicare’s readmission penalties are part of a growing number of pay-for-performance measures that show no evidence of having improved outcomes, and which can actually promote cheating, undermine doctors’ and nurses’ intrinsic motivation to do good work, and vitiate quality improvement tracking.

Himmelstein commented: “Medicare and private insurers say they’re paying for quality. But often they’re just rewarding hospitals for stretching the truth and avoiding the most difficult patients. Pay-for-performance schemes are forcing hospitals to spend billions more on new paperwork, and doctors to spend hours each day checking boxes to comply with the new reporting requirements.”

In addition to their academic posts, Himmelstein and Woolhandler practice primary care medicine in New York City. They are also co-founders of Physicians for a National Health Program, an organization of 19,000 doctors who advocate for a single-payer national health insurance program.

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“Quality Improvement: ‘Become Good At Cheating And You Never Need To Become Good At Anything Else,’” by David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H. Health Affairs Blog, August 27, 2015.

The blog article is available at the links above and at the Health Affairs Blog website:

http://healthaffairs.org/blog/2015/08/27/quality-improvement-become-good-at-cheating-and-you-never-need-to-become-good-at-anything-else

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Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 19,000 doctors who support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Readmission penalties dodged by placing patients on observation status

Quality Improvement: ‘Become Good At Cheating And You Never Need To Become Good At Anything Else’

By David Himmelstein and Steffie Woolhandler
Health Affairs Blog, August 27, 2015

The Centers for Medicare and Medicaid Services (CMS) has trumpeted the recent drop in hospital readmissions among Medicare patients as a major advance for patient safety. But lost amidst the celebration is the fact that hospitals are increasingly “observing” patients (or treating returning patients in the emergency department) rather than “readmitting” them. But while re-labeling helps hospitals meet CMS’ quality standards (and avoid costly fines), it probably signals little real quality gain and often leaves patients worse off financially.

Observation Status

In most cases, observation patients receive care in a regular inpatient unit, and get treated just like other inpatients. And in many cases, observation stays stretch out to several days: in 2012, 26 percent lasted two nights and 11 percent at least three. But from Medicare’s point of view, this is outpatient care, which leaves patients responsible for more of the bill, and ineligible for Medicare-paid rehab or skilled nursing care.

Hospitals started designating more stays as “observation” after Medicare’s auditors began disallowing the entire payment for some brief hospital “admissions.” Even though “observation stays” pay less than inpatient admissions, hospitals took a better safe than sorry approach, classifying many brief stays as “observation.” Between 2006 and 2013, observation stays increased by 96 percent, accounting for more than half of the apparent decline in total Medicare admissions during that seven-year period.

Observation Classification

Medicare’s recent adoption of penalties for readmissions offered hospitals a new incentive to shift some patients returning within 30 days of their discharge to observation status. A patient stay labeled “observation” doesn’t count as a readmission, allowing hospitals that might otherwise be fined for having too many readmissions to skirt the penalty.

About 10 percent of all hospital stays occurring within 30 days of discharge are now classified as “observation;” a quarter of hospitals classified 14.3 percent or more of all repeat stays as “observation.” Moreover, analysis of time trends in observation stays makes it clear that they account for a significant chunk of the reduction in readmissions. Between 2010 and 2013, 36 percent of the claimed decrease in readmissions was actually just a shift to observation stays.

Emergency Department Use

And it’s not just observation stays that have been on the increase. More of the recently discharged patients are being treated in emergency departments (EDs) — without being admitted — as well.

Factoring in the 0.4 percent increase in ED visits within 30 days of discharge, the fall in the percent of discharged patients returning to hospitals for urgent problems is only 0.3 percent over the past three years — less than one-third of the improvement that CMS claims. And even this 0.3 percent overall fall may be partly an artifact of hospitals’ “upcoding” (exaggerating the severity of patients’ illnesses), which boosts diagnosis-related group (DRG) payments, and could also corrupt the formula used to risk-adjust expected readmission rates.

Medicare’s readmission penalties are among the growing number of pay-for-performance (P4P) and value-based purchasing initiatives that offer bonuses to high performers and/or penalize the laggards. We previously pointed out that the evidence for this carrot and stick approach is unconvincing. More recently, a long-term follow-up of the English hospital P4P program found that P4P generated no improvement in patient outcomes, damping the enthusiasm generated by the rosy short-term findings, and reinforcing the need for skepticism.

Adopting unproven everywhere P4P strategies that have been proven nowhere risks quality failure on a monumental scale. It pressures hospitals to cheat, saps doctors’ and nurses’ intrinsic motivation to do good work even when no one is looking, and corrupts the data vital for quality improvement.

As the graffiti artist Banksy once said: “Become good at cheating and you never need to become good at anything else.”

http://healthaffairs.org/blog/2015/08/27/quality-improvement-become-good-at-cheating-and-you-never-need-to-become-good-at-anything-else/

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Comment:

By Don McCanne, MD

In lieu of adopting comprehensive health care financing that actually would improve value – a single payer system – our national leaders have elected to continue with our current dysfunctional system and try to make it work. One measure that has been introduced is the assessment of penalties for patients who are readmitted within 30 days of being discharged from a hospital – on the theory that the patients should be fully stabilized at discharge with followup arranged that would prevent the need for readmission.

Physician and hospital administrators do not want patients readmitted soon after discharge. Their efforts are directed at providing the best care appropriate to improve patient outcomes. But there are some clinical conditions that are inherently unstable, or that can have unavoidable complications, that can result in the need for readmission. Also, in spite of outreach efforts, socioeconomic variables can result in destabilization of the patient’s condition. Some readmissions are absolutely inevitable.

This report is important because it shows that the improvement in lowering readmission rates that occurred after the introduction of penalties is not so much due to improved inpatient and post-discharge management, but rather is due to gaming rules that are characteristic of pay-for-performance (P4P) schemes.

Specifically, there has been a dramatic increase in placing patients on observation status instead of formally admitting them to the hospital. The care may be identical – provided in the inpatient service departments – but by not certifying the patient as being a formal readmission within 30 days of the last admission, the penalty is avoided. Medicare comes out ahead since outpatient services are priced lower than inpatient services, even if they are identical services – thus the trumpeting by CMS of another success in their reform efforts. But the patient loses since the cost sharing requirements for outpatient services are much higher than they are for inpatient. But then who ever said that health care reform was to benefit patients?

A variation of this gaming is to manage the followup hospitalization completely within the emergency department, perhaps even holding the patient overnight. The result is essentially the same as holding them on observation status.

This P4P-type gamesmanship is really a form of cheating. But it works. Instead of shifting to a much more efficient financing infrastructure – a single payer system – we can continue to follow the Banksy dictum – “Become good at cheating and you never need to become good at anything else.”

Maybe we should start to think about becoming good at financing health care instead.

Californians support extending Medi-Cal to undocumented residents

Results from the 2015 Cal Wellness–Field Health Policy Survey – Part 1

By Mark DiCamillo, Director, The Field Poll
The Field Poll, August 26, 2015

Increasing voter support for extending Medi-Cal to undocumented residents

The current survey repeated a question first posed to California voters last year about whether the state’s Medi-Cal program should be expanded to provide preventive health services to undocumented residents, who are not currently eligible for coverage under the ACA. The results show that 58% of the state’s registered voters now favor extending Medi-Cal for undocumented residents, while 39% are opposed. This represents a significant increase in voter support from last year when supporters outnumbered opponents by a narrower 51% to 45% margin.

However, there are big differences in voter opinions about this proposal by party. Democrats favor the idea four to one (78% to 19%), while Republicans are opposed nearly three to one (72% to 25%). No party preference voters largely reflect overall voter sentiment, supporting the proposal 60% to 38%.

When examining voter opinions by race and ethnicity, registered Latinos report the highest level of support for extending Medi-Cal to undocumented immigrants, with 77% in favor. However, the proposal also now receives majority support from the state’s white non-Hispanic, African American and Asian American voters.

Topline findings

10. I am going to read some proposals that have been made to expand or modify the way the health care law is implemented in California, and please tell me whether you favor or oppose each one. Do you favor strongly, favor somewhat, oppose somewhat or oppose strongly this proposal?

a. Expand the state’s Medi-Cal health care program for low income residents to provide preventive health services to undocumented residents who are not eligible for coverage under the current health care law.

35%  Favor strongly

23%  Favor somewhat

14%  Oppose somewhat

25%  Oppose strongly

 3%  Don’t know/Refused

http://www.field.com/fieldpollonline/subscribers/Rls2510.pdf

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Comment:

By Don McCanne, MD

One of the major deficiencies in the Affordable Care Act is that undocumented residents were deliberately excluded from mandated coverage. It has been estimated that roughly one-third of the 30 million or so who will remain uninsured are these undocumented residents. Was Congress following the wishes of the people when they excluded these individuals from coverage? Not if you judge by the views of Californians: 58% support expanding Medi-Cal to low-income undocumented residents.

In fact, every racial group of California voters polled is in support: Latino, white non-Hispanic, African American and Asian American voters.  The only group opposed is not racial, but rather political: Republicans, with 72% opposed, while 78% of Democrats are in support.

At Physicians for a National Health Program, we support health care reform that advances health care justice through sound health policies, devoid of politics. Although we can expound on the virtues of those policies, it is unfortunate – no, tragic – that our voice is muffled in the tainted arena of politics.

Conservatives frequently chastise progressives for accusing them of supporting mean-spirited policies. Well? Prove us wrong. You can do that by supporting the replacement of our inequitable, fragmented, dysfunctional system of financing health care with a single payer system that ensures equitable access and affordability for everyone, including our undocumented residents.

Claxton and Levitt on the Cadillac plan tax

How Many Employers Could be Affected by the Cadillac Plan Tax?

By Gary Claxton and Larry Levitt
Kaiser Family Foundation, August 25, 2015

As fall approaches, we can expect to hear more about how employers are adapting their health plans for 2016 open enrollments. One topic likely to garner a good deal of attention is how the Affordable Care Act’s high-cost plan tax (HCPT), sometimes called the “Cadillac plan” tax, is affecting employer decisions about their health benefits. The tax takes effect in 2018.

The potential of facing an HCPT assessment as soon as 2018 is encouraging employers to assess their current health benefits and consider cost reductions to avoid triggering the tax. Some employers announced that they made changes in 2014 in anticipation of the HCPT, and more are likely to do so as the implementation date gets closer. By making modifications now, employers can phase-in changes to avoid a bigger disruption later on. Some of the things that employers can do to reduce costs under the tax include:

  • Increasing deductibles and other cost sharing;
  • Eliminating covered services;
  • Capping or eliminating tax-preferred savings accounts like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), or Health Reimbursement Arrangements (HRAs);
  • Eliminating higher-cost health insurance options;
  • Using less expensive (often narrower) provider networks; or
  • Offering benefits through a private exchange (which can use all of these tools to cap the value of plan choices to stay under the thresholds).

For the most part these changes will result in employees paying for a greater share of their health care out-of-pocket.

How Many Employers Could be Affected by the Cadillac Plan Tax?

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Comment:

By Don McCanne, MD

During the markup process for the Affordable Care Act it was common to hear our legislators talk about patients demanding too much health care as an explanation for why our health care spending was so high. They blamed health plans that provided extra-rich benefits – plans they labeled Cadillac plans. The problem is that their premise was wrong.

These supposedly extra-rich benefits were merely standard benefits characteristic of the older employer-sponsored indemnity plans such as Blue Cross and Blue Shield. These were not plans with Cadillac benefits but rather they were plans with standard benefits, but benefits that are now provided at Cadillac prices because of our failure to adopt a health care financing system that would slow the rate of health care inflation.

In recent decades, plan purchasers in the individual market became less able to afford the high premiums commanded by the ever-increasing health care costs. In order to keep their premiums affordable, insurers reduced benefits and increased patient cost sharing, making health care less affordable even for those who were insured. Medical debt became a significant contributor to personal bankruptcy and having insurance often no longer prevented it.

Our legislators, after being spoon-fed by lobbyists and the policy community, decided that these inferior plans on the individual market would become the new standard, and the more traditional plans that provided more effective coverage would suddenly become Cadillac plans.

Thus the advent of the high-cost plan tax (HCPT) – often referred to by the misnomer, Cadillac plan tax – a 40 percent tax on plan costs above a certain threshold. This tax was intended to disincentivize the selection of full coverage plans. By having out-of-pocket money at stake with less comprehensive coverage, patients would be forced to decide which of their medical problems they would want managed and which they would decide to live with (or die from). What a terrible way to reduce spending.

In retrospect, both Republicans and Democrats in Congress have decided that this tax should be repealed, but for different reasons. Republicans are simply opposed to any taxes, and Democrats are concerned about additional tax burdens on lower income individuals with employer-sponsored plans that provide reasonable coverage (assuming the tax is paid by forgone wage increases). Hurdles to the repeal of this tax include reluctance to compensate for the loss of these government revenues by either assessing new taxes (Republicans opposed) or by cutting spending on other programs (Democrats opposed), plus a reluctance for a highly polarized Congress to work together on anything.

The important policy issue is not the tax, it is the decision to control spending by erecting financial barriers to care through the design of the insurance product – consumer-directed health care. This prevents patients from getting care that they should have while exposing them to financial hardship. Instead we should be providing everyone with prepaid health care while controlling spending through more humane, proven policies that are in use in many other nations. Of course, these are the policies that are inherent in a well-designed single payer national health program.

Forget the Cadillac imagery. Let’s talk about providing affordable health care for everyone.

“Direct primary care” and the future of family medicine

New Program in Coachella Valley Seeks Affordability in Personalized Primary Care

By Lauren McSherry
California Healthline, August 24, 2015

Joseph Scherger, a primary care physician at Eisenhower Medical Center in Rancho Mirage, opened an email one morning earlier this month with an update on one of his patients who had recently suffered a heart attack.

The email had been sent directly by the patient, who wanted to put Scherger in touch with the cardiologist who had treated him while he had been traveling out of state.

Scherger, Eisenhower’s vice president of primary care, often uses email to correspond with his patients. In fact, email tends to be a big part of the day-to-day job for some of Eisenhower’s primary care physicians. Through a program called Eisenhower Primary Care 365, patients pay an annual fee to have direct email access to their doctors and other benefits.

Scherger calls the E365 program a new direct primary care model, one of many that have been popping up across the nation in recent years. It is intended to be a more-affordable version of expensive concierge medicine, in which patients pay a fee for 24/7, unlimited access to their primary care doctors.

Jay W. Lee, California Academy of Family Physicians president, said doctors involved in the program see it as a way to equalize and democratize care.

“What I’m most excited about is that we’re starting to innovate,” he said. “It’s clear that this has resonated with a population of clinical physicians. What I’ve seen is that there is growing interest, not only in California but across the country.”

With direct primary care, patients pay a subscription fee — either annually or monthly — that enables them to have immediate access to their doctors, scheduling same-day visits and bypassing the long wait times.

But rather than paying $1,800 to $5,000 a year for that privilege, as they would for concierge medicine, patients pay $395-$595 per year, depending on their age, in the E365 model.

“The real story is that alternatives to concierge medicine are emerging that are going to cause concierge medicine to recede,” Scherger said.

Scherger began developing the program in 2009, when a new outpatient clinic, the Eisenhower George and Julia Argyros Health Center, was about to open. He was faced with a recruitment challenge “because too many of the good primary care doctors were going into high-cost concierge medicine” in the Coachella Valley. So he developed a hybrid model, one that accepts most insurance and Medicare and covers the cost of non-visit communications through a fee.

Since launching, the program has gained steam and now has 14 doctors treating 6,500 patients at four locations in the Coachella Valley.

Personalized Care, Longer Visits

Direct primary care has several characteristics that are attractive to doctors, such as having fewer patients and being able to spend more time with them, Lee said.

“In many ways, the promise of it is that there is an opportunity to control flow and pace,” he said.

A typical primary care doctor may have 90-120 patient visits per week and can only spend 10-15 minutes with each patient. In contrast, an E365 doctor will have around 50 visits per week and can spend 20 minutes with a patient, Scherger said.

The average panel size for a primary care doctor is 2,000 to 3,000 patients. Concierge practices usually limit their physicians to 200 or 300 patients. Direct primary care models fall somewhere in between. In the case of the E365 program, physicians each take care of 850 to 950 patients, Scherger said.

Scherger says direct primary care models began emerging about 10 years ago because primary care physicians were getting burned out under the traditional private practice model. One early model was GreenField Health, launched in 2001. Another model, Qliance, reportedly has 35,000 patients, with about half of whom are enrolled in Medicaid.

According to a 2014 survey by the American Academy of Family Physicians, about 2% of members were currently working in direct primary care settings and 7.2% reported they were currently determining if they would transform their practices to that model.

“The direct primary care model is slowly gaining momentum,” said Robert Wergin, the group’s president. He said the model is increasing in popularity because it moves away from the acute, episodic, fragmented care that is common with volume-based medical services, and it allows doctors more time to focus on quality of care rather than paperwork and billing.

Could Direct Primary Care Exacerbate a Physician Shortage?

One of the looming issues surrounding direct primary care is whether it will exacerbate the shortage of primary care doctors in California, particularly in the Coachella Valley where the shortage is severe.

The Coachella Valley has a cluster of nine cities, including Palm Springs in eastern Riverside County, a region containing both incredible wealth and far-reaching poverty.

“The question I have is around scale,” Lee said. “If everyone is doing this, are we going to meet the needs of the population?”

He is concerned because more patients are now covered by Medi-Cal as a result of the Affordable Care Act, and it’s unclear whether the direct primary care model will serve those patients.

Beth Capell, a policy advocate with Health Access California, said the direct primary care model eases physician workloads but doesn’t solve the issue of access to primary care for all populations in the Coachella Valley. The Coachella Valley and Merced are two of the most underserved regions in California, she said.

Nearly 40% of Coachella adults live in households below the federal poverty line, according to the Health Assessment and Research for Communities’ 2013 Executive Report. The report also estimates that about one-third of adults in the region, roughly 74,600 people, lack health insurance.

“The disparity in health resources only compounds the underlying reality that people who are low income need more access to care,” Capell said.

People who are affluent are generally healthier, while people with lower incomes are disproportionately likely to be in poorer health, often with multiple chronic conditions that are more difficult to manage, Capell said.

The UC-Riverside School of Medicine has launched several programs to expand the physician workforce in the region.

“We have a profound shortage, and our shortage is understated because of the number of concierge practices that exist in the Coachella Valley,” said John Heydt, the medical school’s senior associate dean of clinical affairs.

Market Forces May Be Driving Change

Heydt believes market forces are driving the rise of concierge and hybrid models. He predicts these models will gain even more popularity if insurers continue to expect doctors to see high volumes of patients for lower reimbursement rates.

“There are tremendous physician shortages on the horizon,” he said. “When anything is in short supply, the demand is high. And if you look at the day-to-day life of some physicians, they are run by their practices.”

Christopher Flores, who runs an independent direct primary care practice in Palm Desert, says E365 has filled a niche, and he expects the model to grow in coming years because doctors are feeling burnt out.

“The way the system is going, it’s becoming much more of an impersonal assembly line,” he said.

Whether direct primary care will succeed or evolve into something entirely different is up for debate.

“There is still a little uncertainty as to what the regulatory environment dictates,” Lee said. “I think those nuances have yet to be figured out.”

He stressed, though, that creating new models of care is critical given the pressures that primary care physicians are facing, such as high patient volumes and declining reimbursements. He sees new models that are not tied to in-person visits but that incorporate email, telemedicine, or telephone calls as the way forward.

“It’s pretty clear we don’t have enough supply to meet demand,” he said. “We can grow a workforce — but there’s a long tail on that — or we can practice better.”

http://www.californiahealthline.org/insight/2015/new-program-in-coachella-valley-seeks-affordability-in-personalized-primary-care

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Comment:

By Don McCanne, MD

Today’s article is presented in its entirety since it is important to view the topic from a broad perspective as opposed to simply considering isolated policy topics contained in the article.

Weariness and burnout are common amongst overworked family physicians. It is no wonder that some physicians are exploring other models of medical practice. Concierge practices are based more on a business model – extracting additional fees from patients in order to lighten the workload. Direct primary care practices differ in that they increase access through electronic communication and at fees that are much more modest than with concierge practices – more of a patient service model and less of a business model. But they both have a serious defect – by sharply reducing the patient load, they decrease the productivity of family physicians at a time when we already have a profound shortage of family physicians in underserved regions.

A model which is designed to increase productivity is the primary care medical home. Such a model can certainly include improved electronic access for patients, but that would be only one feature of the wide variety of integrated services characteristic of well designed medical homes. The medical home would be ideal for balancing the overworked physician with the health care needs of the underserved residents in the community. The other health professionals in the primary care team not only could make work schedules more reasonable for everyone, but they could and should be used to adjust capacity so that the community health care needs at large are well served.

As it is, the label, “direct primary care,” is at risk of becoming just another label for concierge practices, just as “medical home” is at risk of becoming a label for managed care IPOs. To counter these trends we must always place first the health care needs of the patient and the community at large. If we do that, family physicians and other health care professionals working together as a team would have a great future ahead.

What do insured patients see as financial burdens of health care?

Financial Burden of Health Care Costs Among Insured: Kaiser Health Tracking Poll: August 2015

By Bianca DiJulio, Jamie Firth, and Mollyann Brodie
Kaiser Family Foundation, August 20, 2013

Among insured:  Thinking about your own health care costs, which of the following do you find to be the greatest financial burden?

17%  The deductible you pay before insurance kicks in
14%  Your health insurance premiums
11%  Your prescription drugs
7%   Your doctor visits
3%   Some other health care cost
44%  Paying for health care and health insurance is not a financial burden

(Note: “All equally” and “Don’t know/Refused” responses not shown)

Kaiser Health Tracking Poll: August 2015

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Comment:

By Don McCanne, MD

It is nice to know that health insurance and paying for health care do not create a financial burden for 44% of those who are insured. The system is working well for the almost half of the insured who have decent incomes who remain in good health. But what about the other half?

Being insured is no assurance that you will not face significant financial burdens. The most common are high deductibles, high insurance premiums, high costs of prescription drugs, and, to some extent, physician fees. But shouldn’t the health care financing system be designed to remove financial burdens whenever people need health care? Our system is not working well for patients who have modest incomes and current significant health care needs.

Under a single payer system, there is no need for deductibles to save money by discouraging the use of beneficial health care services, because spending is controlled though other less intrusive, more patient-friendly economic measures. Physician fees are negotiated and paid by the single payer administrator, and prescription drug spending is controlled through negotiation and bulk purchasing. Insurance premiums are eliminated and replaced with equitable, progressive taxes that place a burden on no one. Instead of deliberately building financial barriers into the system, shouldn’t we eliminate them?

Over 2 million exchange enrollees forgo cost-sharing reductions

More than 2 Million Exchange Enrollees Forgo Cost-Sharing Assistance

By Elizabeth Carpenter
Avalere, August 19, 2015

A new Avalere analysis finds that more than 2 million exchange enrollees eligible for cost-sharing reductions (CSRs) are not receiving the subsidies because they have selected a non-qualifying plan. In addition to the more publicized tax credits that lower consumers’ monthly premiums, exchange enrollees with incomes between 100 and 250 percent ($11,770 – $29,425) of the federal poverty level are eligible for CSRs. Exchange consumers must enroll in a plan on the silver metal level to access CSRs.

Specifically, the analysis finds that of the 8.1 million individuals enrolled in exchanges in 2015 who earn incomes that make them eligible for CSRs to reduce out-of-pocket costs, only 5.9 million are actually receiving them. This leaves 2.2 million consumers who may be paying more out-of-pocket than intended under the Affordable Care Act (ACA) because they have selected a plan that does not qualify.

“Consumers are picking plans on exchanges based on premiums, rather than out-of-pocket costs,” said Dan Mendelson, CEO at Avalere.

The difference between the number of exchange enrollees eligible for CSRs and those enrolled may be a result of consumers’ focus on premiums. For example, some CSR-eligible consumers are likely enrolling in lower-premium bronze plans, rather than the required silver plans. Meanwhile, other consumers may not be aware that CSRs are available and the benefits they offer.

The Congressional Budget Office (CBO) estimates that consumers will continue to forgo CSRs in the future. Indeed, the CBO projects 3 million individuals  who are eligible for CSRs will forgo subsidies by signing up for a bronze plan in the years after 2015.

More than 2 Million Exchange Enrollees Forgo Cost-Sharing Assistance

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Comment:

By Don McCanne, MD

One of the more prominent problems with our dysfunctional system of financing health care is that the first decision faced by health care “consumers” is how much they are willing to pay towards the insurance premium, whether paying in full or sharing the cost with an employer or public program. People who are relatively healthy and do not expect to need much health care and whose incomes are limited will tend to select a plan with a lower premium regardless of the plan benefits.

A prime example is found in this report from Avalere. More than 2 million people who would be eligible for cost-sharing reductions if they selected qualifying silver level plans instead select bronze plans with their lower premiums, disqualifying them for the cost-sharing reductions. If they either have or should develop significant medical conditions, they are much worse off financially by having selected a bronze plan.

Another example of selecting plans based on the premiums has been the increase in the prevalence of high-deductible plans, selected because of their lower premiums. Once again, those who develop significant problems are worse off financially with high-deductible plans.

Shopping for cheaper premiums does not exist in a single payer system since the entire system is financed through equitable taxes rather than being financed on an individual basis, and there is no need to shop for plan benefits since everyone receives the same comprehensive benefits.

Instead of having a system wherein individuals are cornered into selecting a plan that is not in their best interests, everyone could participate in a system that is efficient, equitable, comprehensive and affordable for all – a single payer national health program.

Americans Don’t Like Pharma And Think They’re Getting Ripped Off

Americans pay more for prescription drugs than the rest of the world, and we’ve noticed.

By Jeffrey Young
The Huffington Post, August 20, 2015

WASHINGTON — Americans use prescription drugs and they know these medicines help people, but they still don’t care much for pharmaceutical companies and think the industry is too money-hungry, according to a new survey.

More than seven in 10 Americans think prescription drug prices are unreasonable, the Henry J. Kaiser Family Foundation reported Thursday. And nearly eight in 10 people who actually take those drugs feel the same way.

Almost three-quarters also correctly observed that Americans tend to pay higher prices than people in other countries, where governments typically control prices directly.

And though the survey indicates that most people have health insurance that allows them to afford these medicines — meaning Big Pharma isn’t about to see its sales numbers shrink — it also shows sincere dissatisfaction with drug companies and the amount of money they charge for their products.

Some positive findings for pharmaceutical companies: 62 percent of those surveyed agreed that prescription drugs are good for people.

And that’s about all the good news the Kaiser Family Foundation has for the industry.

Just 42 percent of Americans have a favorable opinion of drug companies. That makes them slightly more popular than oil companies, and less popular than the rest of the health care system — including health insurers — airlines and banks.

And in spite of a long-running public relations campaign focused on drug companies’ contributions to America, survey respondents don’t seem to think Big Pharma is anything special: 57 percent said pharmaceutical companies are doing about as much for society as those in other industries.

Possibly related to all of this is that the public overwhelmingly believes drug companies make too much money, and care more about profits than the patients for whom they make their medicines.

The pharmaceutical industry is only now entering an era where drugs that cost $1,000 a pill are becoming less rare, and the public, doctors, the health care industry and policy makers are taking notice. Rising drug costs are a big reason why national health care spending began slowing down at a faster rate last year after a stretch of historically low growth. Health insurance companies, employers that provide health coverage to workers and state governments are seeking new ways to squeeze down their expenses on medicines.

And the 2016 presidential campaign could elevate drug prices to a big political issue after Obamacare has dominated the health care debate for years. On the presidential campaign trail, former Secretary of State Hillary Clinton has been talking up proposals to reduce pharmaceutical costs, such as relaxing a federal law prohibiting Medicare from setting drug prices like it does for doctor and hospital fees.

According to the Kaiser Family Foundation survey, the public might be open to greater government intervention in the prescription drug market. Asked generally, a slim majority of respondents favored “competition in the marketplace” to “regulation by the federal government.”

But when asked what specific solutions to high drug costs America should employ, and which ones would work, people seem to favor more government intervention. More than 80 percent, for example, support Medicare negotiating drug prices, and large majorities back establishing legal limits on how much pharmaceutical manufacturers can charge and allowing Americans to buy lower-priced medicines from Canada.

http://www.huffingtonpost.com/entry/americans-big-pharma-prescription-survey_55d4dfe3e4b07addcb454477?kvcommref=mostpopular

Expert talks about Obamacare to retiree group

By Ken Borsuk
Greenwich Time (Old Greenwich, Conn.), Aug. 19, 2015

While the battle over the Affordable Care Act might be finished in the courts, it still faces challenges, according to health-policy expert John Hughes.

Hughes, a professor of medicine at Yale University School of Medicine and director of medical care for the West Haven VA Medical Center, was the featured speaker at the Retired Men’s Association of Greenwich on Wednesday. He discussed the history and future of Obamacare, which was enacted in 2010 despite the opposition of congressional Republicans.

Hughes said the recent U.S. Supreme Court decision upholding the Affordable Care Act’s federal subsidies was the second time the country’s highest court has upheld the law.

“It is unlikely there will be any other legal challenges,” Hughes said. “Most people agree there’s no future in that, given the Supreme Court decisions. Any assaults on the Affordable Care Act are going to have to come from Congress and any changes are going to have to come from Congress.”

The Republican-led House of Representatives has unsuccessfully tried more than 40 times to defund Obamacare. Even though Republicans now control the Senate, PresidentBarack Obama would still be able to veto a legislative attempt to end his signature legislation, Hughes said.

“What happens in the next election will very much determine the future of the Affordable Care Act,” Hughes said. “It’s an interesting time to be alive.”

Hughes, during the question-and-answer period after his address, discussed the merits of a single-payer system similar to Canada’s. He said that despite some complaints from Canadians, they approve of the system and are angry over seeing ts misrepresented in the American media as forcing people to wait for medical care.

He said American doctors remain divided over the idea of a single-payer system in America.

“Doctors generally respond well to the idea of a single-payer system until you start talking about how exactly it will work,” Hughes said. “Then all of a sudden it’s not so popular. … Many would not be happy with having a single payer, but some of my colleagues in private practice at this point say the current system is nuts. We’re having to dance with these gorillas, these insurance organizations and these large consolidated hospital organizations. Maybe we should just dance with a single gorilla.”

Hughes said America is spending too much on health care, an issue which led to the topic of needing health care reform in the first place.

“Even though we are a wealthy country and we would expect to spend more on health care, we spend disproportionately more than any other country,” Hughes said. “It’s not just that we’re spending more money. We have been devoting a larger and larger proportion of our economy to health care. … This is a well-recognized phenomenon, and economists, no matter what stripe, agree that we are spending unsustainable amounts of money on health care.”

A full video of Hughes’ remarks will be posted online at www.greenwichrma.com.

http://www.greenwichtime.com/news/article/Expert-talks-about-Obamacare-to-RMA-6453870.php

Fundamental flaw of Republican health reform proposals

Scott Walker, Marco Rubio Propose ‘Plans’ to Replace Obamacare

By Jonathan Chait
New York Magazine, August 18, 2015

Today, Scott Walker and Marco Rubio have published plans — really, not so much plans as skeletal descriptions of planlike concepts — to replace Obamacare. Appealing to the general election requires them to promise something to compensate the victims of repeal. How will they fund that something? This is the basic problem that for decades has prevented Republicans from offering a health-care plan. Rubio and Walker show that they still have no answer.

The main reason people lacked insurance before Obamacare is that they did not have enough money to afford it. Some of those uninsured people had unusually high health costs. Some of them had unusually low incomes. Boiled down, Obamacare transferred resources from people who are rich and healthy to people who are poor and sick, so the poor and sick people can afford insurance.

Walker and Rubio are fairly clear about their plans for regulating the insurance market. They want to go back to the pre-Obamacare, deregulated system. They’d eliminate the requirements that insurance plans cover essential benefits, and let them charge higher prices to sicker customers. That’s good for people who have very limited medical needs (as long as they never obtain a serious medical condition, or have a family with somebody with a serious medical condition). It’s bad for people who have, or ever will have, higher medical needs.

Both Walker and Rubio promise to take care of people with preexisting conditions by creating separate “high-risk pools.” That is a special kind of insurance market for people with expensive medical conditions. As you may have guessed, insurance for people with expensive medical needs is, well, expensive. Making that insurance affordable therefore requires lots of subsidies from the government. Where would Walker and Rubio get the money for that? They don’t say.

Both Walker and Rubio propose to cut funding for Medicaid, but this doesn’t create much room to subsidize coverage, since Medicaid is already much cheaper than Medicare or private insurance. Republicans are willing to cut Medicaid because they’re generally willing to cut programs that focus on the very poor, but there’s not much blood to be drawn from this stone.

It is tempting to treat the lack of specifics in the Republican health-care plans as a problem of details to be filled it. But it is not a side problem. It is the entire problem. They will not finance real insurance for the people who have gotten it under Obamacare, nor will they face up to the actual costs they’re willing to impose on people. The party is doctrinally opposed to every available method to make insurance available to people who can’t afford it. They have spent six years promising to come up with an alternative plan, and they haven’t done it, because they can’t.

http://nymag.com/daily/intelligencer/2015/08/walker-rubio-obamacare-replacement-plans.html#jumpLink

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Comment:

By Don McCanne, MD

Much has been written this week about the proposals of presidential candidates Gov. Scott Walker and Sen. Marco Rubio for replacing the Affordable Care Act (ACA or Obamacare) once it is repealed. Most articles discuss the few specifics of their proposals that they have provided, but Jonathan Chait’s stands out because he describes the underlying fundamental flaw common to all conservative proposals for reform: for everyone to have affordable access to health care, there must be a large transfer from the healthy to the sick and from the wealthy to those with lower incomes, and the conservative proposals fall far short on the size and direction of the transfers that are needed.

Chait exits the topic leaving ACA in place, but there is more to be said. Although ACA actually did expand the necessary transfers, it still falls short of what is needed, plus too many inequities are perpetuated. Patches to ACA would still leave in place the fundamentally flawed infrastructure, and the Republican replacements are even more fundamentally flawed because they would worsen the financial barriers to care, especially by failing to include adequate transfers in their models.

A much more efficient and equitable method of achieving the necessary transfers would be to enact a single payer national health program. If the Republicans really do want a better replacement for Obamacare, maybe they should seriously consider single payer.