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Tuesday, October 6, 2015
Monday, October 5, 2015
People are bad at choosing health plans, part 2
With open enrollment coming up for the Affordable Care Act marketplaces, as well as Medicare and some employer plans, I am reviewing the literature on how well people make plan choices. I concluded my first post, which focused on Medicare, with two stylized facts I claimed generalized beyond Medicare: (1) people are bad at choosing plans; (2) providing easy access to cost comparison information makes them better. This post and a forthcoming one back up that claim.
Through a series of six experiments, Columbia business professor Eric Johnson and colleagues directly tested consumers’ ability to make rational choices among health insurance plans. Without additional assistance from calculators or the setting of “smart” defaults, they found that consumers are just as likely to select the lowest cost plan as they are to select any other. Moreover, people have no idea how bad they are at this task.
Subjects for the six experiments differed; four focused on a population similar to state marketplace shoppers, one focused on workers, another on MBA students. All respondents passed a test of comprehension of health insurance policies, for instance correctly identifying what are a premium, co-pay, and deductible.
People are bad at choosing health plans
People are bad at choosing health plans, part 3
In this, third post on how people are bad choosing health plans, I continue to summarize studies relating to commercial market plans, which I started in my second post. (See post 1 for research pertaining to Medicare plans.)
A study by Saurabh Bhargava, George Loewenstein, and Justin Sydnor examined the choices made by over 50,000 workers at a large U.S. firm among 48 health plans in 2010 and 2011. They found that the majority of them made objectively worse choices than they could have, costing themselves an average of $373 per year, or 42% of the average employee premium contribution. Lower income employees and those with chronic conditions were even more likely to make cost-increasing choices. (And perhaps this lower socioeconomic group are less educated, sophisticated, and unable to diiscern differences in the offerings.
It is true that offerings are nearly identical across the spectrum of plans that are offered. Examiing the Medicare Advantage plans in California between SCAN and Humana the benefits are almost identical, save for the absence of a Part D pharmacy premium (0). They both offer 6 free transportation trips to physician offices.
Apart from cost-sharing and premiums, the 48 plans were identical (e.g., services covered, networks, carrier, manner of presentation in marketing material). Across plans, there were four deductible levels ($1000, $750, $500, $350), three maximum out-of-pocket spending levels ($3000, $2500, $1500), two coinsurance rates (10%/40%, 20%/50% for in/out of network), and two copayment levels ($15/$40, $25/$35 for primary/specialist care). Do the math and that makes 48 possible options (4 × 3 × 2 × 2 = 48).
Because of premium levels, some plans were “dominated” by others, meaning they were objectively worse choices for everyone. For instance, a plan with a $750 deductible cost $500 more in premium than an otherwise identical plan with a $1000 deductible. Trading a guaranteed $500 cost for at most a $250 benefit is an objectively bad deal. (If one’s marginal tax rate is at least 50%, it might not be bad, since premiums are excluded from taxation. The study’s findings hold up even accounting for taxes.) All but one of the 36 lower deductible plans (<$1000 deductible) offered was dominated in this way by a higher deductible plan.
People are bad at Choosing Health Plans
Nancy Pelosi was correct, "You won't know what you get until you sign it "
It used to be that purchasing a home was the most important financial decision in one's life. Today, selecting insurance is right up there.
The Affordable Care Act passage did not make insurance affordable or accessible. It did make it much more complex especially for those who never had insurance coverage. It is a new landscape cratered with deductible, copayments, premiums, and charts defining eligibilty for subsidies
If you are confused....you have come to the right place. Even physicians and hospitals are overwhelmed with new diagnostic codes, CMS rulings and the new affordable care act. Change has occured so quickly that statistical comparisons of health cae costs between 2010 and 2015 will be unreliable because there is cost shifting taking place due to change from volume based reimbursement to quality measures, such as re-admission rates. The new reimbursement actually does depend upon fee for service. The net payment will be reduced if quality goals are not met. ( a form of penalty.) Bonus payments for meeting quality standards will vary from insurer to insurer. Medicare and Medi-Cal will have their own formulas.
It is no wonder that
It used to be that purchasing a home was the most important financial decision in one's life. Today, selecting insurance is right up there.
The Affordable Care Act passage did not make insurance affordable or accessible. It did make it much more complex especially for those who never had insurance coverage. It is a new landscape cratered with deductible, copayments, premiums, and charts defining eligibilty for subsidies
If you are confused....you have come to the right place. Even physicians and hospitals are overwhelmed with new diagnostic codes, CMS rulings and the new affordable care act. Change has occured so quickly that statistical comparisons of health cae costs between 2010 and 2015 will be unreliable because there is cost shifting taking place due to change from volume based reimbursement to quality measures, such as re-admission rates. The new reimbursement actually does depend upon fee for service. The net payment will be reduced if quality goals are not met. ( a form of penalty.) Bonus payments for meeting quality standards will vary from insurer to insurer. Medicare and Medi-Cal will have their own formulas.
It is no wonder that
People are bad at choosing health plans, part 1
Open enrollment is approaching for Affordable Care Act marketplace plans (Nov. 1), Medicare Advantage (Oct. 15), Medicare Part D plans (also Oct. 15), and for many employer-sponsored plans (dates vary by employer, but mine is Nov. 10). Apart from cases in which employers only offer one plan, in all these markets consumers have several to dozens of plan options. Are people good at choosing among them?
Nope. That’s a consistent finding across a large and growing body of research.
Tuesday, September 29, 2015
MACRA: New Opportunities For Medicare Providers Through Innovative Payment Systems
MACRA: New Opportunities For Medicare Providers Through Innovative Payment Systems
Patrick H. Conway, Tim Gronniger, Hoangmai Pham, Kate Goodrich, Amy Bassano, JP Sharp,Alison Falb, and Molly MacHarris
oday, almost 60 million Americans are covered by Medicare — and 10,000 become eligible for Medicare every day.
For many years, Medicare was primarily a pure fee-for-service (FFS) payment system that paid health care providers based on the volume of services they delivered, not the value of those services. Over time, this contributed to increased costs with little improvement in the quality of care.
However, that system is changing as we work to improve our nation’s health care delivery system to ensure patients and their families receive the best care possible. And, we want to hear from you. Today, the Centers for Medicare & Medicaid Services (CMS) released a Request for Information (RFI) to seek public comment related to new provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): Merit-based Incentive Payment System (MIPS), Alternative Payment Models (APMs), and a physician-focused payment model (PFPMs).
Driven by the Affordable Care Act, CMS has taken substantial steps toward this better, smarter, and healthier system through quality improvement programs, promotion of electronic health record use, Accountable Care Organizations (ACOs), Patient Centered Medical Homes, bundled payment models, and other Alternative Payment Models (APMs) developed at CMS.
Driving CMS further along the path to value, in January 2015, Secretary Burwell set goals for 30 percent of traditional Medicare payments to be tied to APMs, such as bundled payments, ACOs, or medical homes, by the end of 2016, and 50 percent of such payments to be tied to these models by the end of 2018.
The Department of Health and Human Services (HHS) has already made significant progress in reaching these goals. In 2011, no Medicare payments were made through APMs; by 2014, approximately 20 percent of payments were made through these APM arrangements. And, HHS continues to catalyze stakeholders across the health care spectrum to join in the path to value. In March 2015, HHS launched the Health Care Payment Learning and Action Network to bring together stakeholders in the public and private sector to accelerate adoption of value-based payments and APMs.
The MACRA: A New Opportunity
On April 14, 2015, a large bipartisan majority in Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). President Obama signed the MACRA into law on April 16, 2015. The MACRA permanently repeals the flawed Sustainable Growth Rate formula for determining Medicare payments for clinicians’ services, establishes a new framework for rewarding clinicians for value over volume, and streamlines other existing quality reporting programs into one new system.
The MACRA was passed with bi-partisan support and will help accelerate paying for and rewarding value. Implementation of the MACRA is a major opportunity to put a broad range of health care providers on the path to value through the new Merit-Based Incentive Payment System (MIPS) and incentive payments for participation in certain Alternative Payment Models (APMs).
Path #1: MIPS
The MACRA sunsets the payment adjustments associated with the Physician Quality Reporting System, the Value-based Payment Modifier, and the Medicare Electronic Health Record (EHR) incentive program for Eligible Professionals. The MIPS combines those efforts into a single consolidated program with four weighted performance categories upon which eligible professionals (EPs) will be assessed: Quality; Resource Use; Clinical Practice Improvement Activities; and Meaningful Use of Certified EHR Technology.
MIPS requires the Secretary to develop and provide clinicians with a Composite Performance Score that incorporates MIPS EP performance on each of these categories. Based on this Composite Performance Score, EPs may receive an upward, downward, or no payment adjustment. MIPS offers an opportunity for EPs to achieve significant financial incentives for providing health care that advances the goals of a better, smarter, and healthier system.
Path #2: APMs
The MACRA also provides incentives for participation in certain APMs. “Qualifying APM participants” will not be subject to MIPS adjustments and will receive a lump sum incentive payment equal to 5 percent of the prior year’s estimated aggregate expenditures under the fee schedule. The 5 percent incentive payment is available from 2019 to 2024, but beginning in 2026, the fee schedule growth rate will be higher for qualifying APM participants than for other practitioners.
The MACRA also encourages expansion of the APM options available to physicians, especially specialists, through physician focused payment models (PFPMs). The law requires the establishment of a Technical Advisory Committee that will assess PFPM proposals submitted by stakeholders and make recommendations to the Secretary about which models to consider testing. This is a valuable opportunity for stakeholders to participate in delivery system reform by developing and submitting their ideas for APMs.
Request For Information
We encourage you to read the RFI and submit comments to CMS within the next 30 days. Your input is very important to us.
As we implement this historic legislation and continue to advance along the path to value in health care, we hope stakeholders will take this opportunity to provide input through the RFI. These new programs afford providers the opportunity to be rewarded for providing high quality care at lower costs, and our goal is to help providers be successful while reducing administrative burden. Together, we can create a health care system that delivers better care and healthier people and spends health care dollars more wisely.
MACRA: New Opportunities For Medicare Providers Through Innovative Payment Systems
Beyond the Buzz: The Myths and Realities of Consumer and Patient Engagement | EMR and HIPAA
Today’s healthcare reform world is filled with buzzwords. “Population Health Management.” “Value-Based Care.” “Patient Engagement.” I am in no way suggesting that these topics do not play critical roles if we are to realize the enormous potential of healthcare reform. However, if you ask ten people to define any one of these buzzwords, you’ll receive twelve different definitions. And in a world of threatening reimbursement penalties and expanding healthcare legislation, the sooner that we come to some consensus on the basic meaning of these terms, the sooner we can understand the associated myths and realities.
Relative to the patient population (that is, the general population), the population of providers (doctors, nurses, and other clinicians) represents a fairly homogeneous and small group to target with initial reform efforts. In addition, we are all painfully aware of the unacceptable number of preventable deaths and complications which occur at the hands of providers each and every day. Thus reform legislation has first focused on reducing variability, elevating quality, and controlling the cost of care delivery through programs focused on providers (hospitals and healthcare systems, as well as the physicians, nurses, other clinicians who work in such institutions).
Again, this makes sense as a starting point. That said, to believe that we will achieve our ultimate goals of evolving into a system dominated by preventative care and outpatient and home health maintenance (leaving hospitals to serve only those whose chronic conditions can no longer be controlled in the outpatient setting) solely by changing how providers deliver care is a myth of epic proportions. Far-and-away our greatest opportunity to shift our population’s health from reactive, acute, and expensive to proactive, preventative, and cost-efficient is by directly engaging and educating and empowering the general population of patients and future patients themselves.
This perspective is based on two major realities. First, studies (as well as our own experience) confirms that even individuals with chronic conditions spend on average only a handful of hours annually in front of a professional care provider. (How many hours did you or your spouse spend under the direct care of a provider in the previous twelve months? For the overwhelming majority of you, the answer is less than a couple.) Second, patients who demonstrate interest in and ownership of their health have better clinical outcomes and reduced costs of care. In a nutshell, people spend virtually all of their lives away from doctors, nurses, and hospitals, and as with virtually any complex processes, those who are more involved and knowledgeable have better outcomes.
Now we come up against another reality: limited resources. Hospitals and healthcare systems have limited staff and finances, and Patient Engagement often draws the short straw when competing with electronic health records, computerized order sets, and other provider-specific support solutions. But, as I’ve suggested, de-prioritizing Patient Engagement as “less important” or “less impactful” is a myth which greatly limits our potential to increase the value (elevate quality/reduce costs) of healthcare delivery. Thus, the most important first step for healthcare stakeholders to accept is the reality that assigning resources to Patient Engagement must be as great a priority (if not greater) as allocating staff and money to products and solutions which target only traditional providers.
Once healthcare leaders accept the critical importance of Patient Engagement, they again have to consider their limited resources. It is another common and perilous myth when trying to allocate resources and develop and implement Patient Engagement strategies to consider all patients within a healthcare system’s catchment area as a homogeneous population. The reality here is that not all individuals have the same potential for or barriers to becoming engaged patients. And understanding with which patient subpopulations you can get “the most bang for your buck” is a necessity which is often overlooked.
Beyond the Buzz: The Myths and Realities of Consumer and Patient Engagement | EMR and HIPAA
Age-Related Macular Degeneration
Normal healthy retinal fundus image
Age-related macular degeneration (ARMD) is the most common cause of severe vision loss in elderly persons in developed countries and accounts for one-third of cases of untreatable vision loss. ARMD is a painless, irreversible, degenerative eye condition associated with the damage and ultimate death of photoreceptors. There are two types of ARMD, dry and wet; dry ARMD is far more common, but wet ARMD is usually a more advanced disease state and is associated with rapid distortion and sudden loss of central vision. Various agents are used for treatment, and lifestyle changes and dietary constituents are important for preventing ARMD and halting its progression. As new therapies become available, early identification of patients with risk factors for ARMD will be increasingly important.
Introduction
Age-related macular degeneration (ARMD) is the leading cause of irreversible visual impairment in the elderly.[1] ARMD is a degenerative disease of the central part of the retina— known as the macula—that results in a loss of central vision, which is essential for most daily activities.[2] It is characterized by a loss of visual acuity caused by degeneration of the choriocapillaris, retinal pigment epithelium (RPE), and photoreceptors, usually beginning with drusen and pigmentary changes in Bruch's membrane.[1,3]
The condition, which affects 30 million to 50 million people worldwide, is the leading cause of irreversible blindness in developed countries in people aged 50 years and older.[1,2] More than 1.75 million persons in the United States were reported to have ARMD in the year 2000, and it is thought that the incidence will increase to almost 3 million by 2020.[2]
The prevalence of ARMD increases exponentially every decade after age 50.[4] In many Western countries, the prevalence of ARMD in individuals older than 55 years is 1.6% and increases to about 13% in persons older than 84 years.[2] The loss of central visual acuity leads to a reduction in activities of daily living, as well as to mobility problems and an increased risk of falls, fractures, and depression in the elderly.[5]
Age-Related Macular Degeneration
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