Tuesday, November 11, 2014

Rising Healthcare Costs: Delayed or Defeated?

Ready, set......
According to this just-published New England Journal article, analysts are still waiting for the twin forces of 1) an improving U.S. economy and 2) higher numbers of newly insured Americans to reignite healthcare inflation.  While the latest data from the Bureau of Economic Analysis (BEA) are conflicting, data from the early part of 2014 suggests that health costs are remaining tame.

What gives?
While many Obamacare supporters say this is more evidence of Washington's central-planning genius, author Charles Roehrig notes other factors be at play, namely:

1. The 9 million of 2014's newly insured amounts to 3% of the U.S. population. Their baseline spending was probably half of normal, so the resulting increase would expand the nation's spending by a modest additional 1.5%.  Since this group is younger, it'll likely be less than that.  Their contribution to increasing costs will be harder to detect.

2. What's more, insurance enrollments were finalized relatively late in the year, so these newly insured haven't had much of a chance to give their new benefits an early test-drive.

3. The first quarter of 2014 was an unusually cold winter. The Population Health Blog recalls how freezing temps, wind and snow made for a relaxed day at the clinic. Multiply that across millions of newly as well as long-term insured people, and it adds up.

4. Yes, stupid, it is the economy, which has a strong correlation with healthcare spending. Loss of health insurance thanks to unemployment, declining tax revenues that pressure government insurance programs to limit eligibility as well as benefits, employers' unwillingness to go along with otherwise automatic benefit increases and a general unwillingness of consumers to open their wallets in recessionary times has also added up.

5. Thanks to the expiration of some patents, prescription drug spending moderated.

Bottom line: all of the above are one-time impacts.  The economy's impact and new access to insurance are lasting fundamentals that will not go away. It's too soon to tell what is really going on.
The PHB will stay tuned.

Tuesday, November 4, 2014

Health Care Cost Insights and Capitation for the Patient Centered Medical Home (PCMH)

The Population Health Blog finally caught up with the Oct 22/29 "Price, Cost and Competition" issue of JAMA

One of the more interesting articles was a Viewpoint editorial on the Patient Centered Medical Home (PCMH). After tut-tuting fee-for-service payment as antithetical to meaningful payment reform, the author admits what the PHB has been saying all along: a global payment that covers all the medical, coordinating as well as non-physician services of the PCMH is tantamount to old fashioned "capitation." As we learned in the 1990s, capitation's unintended consequences are a) signing up too many patients, b) limiting access to primary care and c) over-referring to specialists.  To counter that, the editorial's author suggests the PCMH movement seeks "accountability." 

We'll see about that.

In the meantime, some other interesting articles:

Are "for-profit" hospitals evil?  Not necessarily.....

237 hospitals that converted from not-for-profit to for-profit anytime between 2003 and 2010 were compared to 631 hospitals that had not converted.  Converting hospitals improved their financial margins (practically all were in the red and subsequently became break-even) vs. the comparison group, and did so without increased utilization, restricting access to care, higher death rates or declines in quality for their Medicare patients. Their path to profitability may have been lined by renegotiated commercial insurance contracts, cutting costs or moving non-performing assets off the balance sheet.

Can physician groups become monopolistic? In a word, yes.

Commercial insurance preferred provider organization (PPO) charges for ten types of physician office visits in ten different specialties across 50 states were correlated with a measure of local market dominance dubbed the "Hirschman-Herfindahl Index" (more on that here).  As the HHI index increased, payments also increased, suggesting that as much as additional $3 to $12 in fees for the same services were the result of monopolistic contracting.

Monopolies aside, if docs are in charge vs. the hospitals, can they reduce health care costs?  Also yes.

This study compared average "per-patient expenditures" of physician-owned versus hospital-owned integrated medical groups and independent practice associations in California from 2009 to 2012. Among the 158 groups, 118 were owned by docs; their expenditures were over a thousand dollars less compared to hospital owned groups.  Larger physician groups had higher expenditures than the smaller ones.  More on that in a future post.

Does price transparency help patients chose to spend less?

Over 500,000 insurance plan enrollees had special on-line access to prices for medical services prior to using them.  There were over 250,000 households and of these, approximately 7500 accessed the information. Compared to households that didn't check the information, the price-shoppers seemed to choose cheaper labs (a few dollars per test) and imaging options (about a hundred dollars per test).  In looking at the data, the DMCB suspects some may have also deferred testing by choosing to use them less frequently or not at all.

Monday, November 3, 2014

State of the Art Obesity Management - Keep It Away from Primary Care

In the course of the Population Health Blog's last primary care encounter, a measurement of its height and weight determined that it was overweight.  On the way to the examination room, the nurse apologetically provided a patient education leaflet. The physician let the topic go unmentioned.

These health care professionals clearly were not "into" managing weight issues in their patient population.

After reading this paper, who can blame them?  A review of fifteen randomized clinical trials involving over 4500 patients showed that while primary care-based "behavior change for weight loss" results in statistically significant weight loss, the average amount was a clinically insignificant 3 lbs.

While web sites such as this provide useful pointers on engaging patients on the topic of weight loss, the U.S. Preventive Services Task Force (PSPSTF) recommends that persons with obesity be referred to a care setting that specializes in intensive multi-component behavioral interventions.

The primary care PHB agrees: these frontline clinics can screen for obesity using height and weight, but that's where their responsibility arguably ends.  Until there is research that shows otherwise, the primary care setting is no place for management of weight issues.

The PHB's care was state-of-the-art.