High Deductibles & Patient Behaviors----Is There a Clear Benefit to the US Health Care System?

-----By Anna Shepherd, Health & Personal Finance Professional

As health care reform enters into its next year, many employees will notice that a side-effect of reform has made their employer shift a bigger portion of costs to them. Is that a good thing or a bad thing, in general?  See the linked article:  http://www.statesman.com/news/business/higher-health-insurance-deductibles-giving-workers/nhnB4/

It may depend on the employee or consumer himself and the motivations that cause human beings to do some things and avoid doing others. This high deductible scheme works ideally with an educated populace. I am a vociferous proponent of free market reforms in health care; certainly high deductible plans are step in the right direction. However, if there isn’t also an affordable intermediary such as a personal health-advisor, the result will inevitably be higher costs for more acute episodes. 

The old adage holds true that an ounce of prevention is worth a pound of cure.

Working in health care, it is sometimes difficult to remember that many people have little to no working knowledge of the industry or even basic human anatomy and health. I constantly have to remind myself that someone coming into my facility with a family member may know as much about healthcare as I know about carburetors! It will take time, possibly time this current system doesn’t have, for the patient population to become proactive and assume responsibility for knowledge of their health.

Maybe there is a bright side in that the younger, cash-strapped generation that demands information/services be accessible online and at low or no cost, can use sites like WebMD to avoid unnecessary trips to the doctor or ER. Over time, I’m optimistic that enough of a portion of the US population will invest the time to learn about their health needs and act as rational consumers, to provide a net gain to the system. The downside is that there is also a significant portion of the population who lack the ability to meaningfully use health resources by themselves. Further, this cohort is usually sicker and costlier to the system.

This brings me to my overall impression of the transition to high-deductible plans: it will ultimately be very burdensome to the system because there is effectively no market providing affordable and meaningful health consulting services to the populations that will most need them.  It will take too long to implement such services. Meanwhile those higher-risk people forego preventive services to save their money, costing the system more in the long run.

Anna is a health care and finance professional, working on the health care provider side in an administrative capacity. 

Does Recent UK Physicians’ Strike Carry an Important Message for the US?

---Anna Shepherd, Health & Personal Finance Professional - Cambria Health Advisory Professionals

For this blog, I generally try to find news that raises prescient questions about healthcare and economics in our current climate. This article (link below) goes a little outside of that but I find it important nonetheless to keep in back of my mind as a guidepost of sorts. It details a recent strike effort by General Practitioner’s in England’s National Health Services (NHS) over a pension dispute with the government. The government has requested that the doctors contribute more to their pension plans as well as raise the retirement age in order to ease the burden on other health care workers such as nurses or porters (patient transporter). The story reports that this strike was small, affecting about 24% of practices, but was still effective due to the tumult the system saw from canceled surgeries, closed clinics and rescheduled appointments. What I find interesting about this article is the insight into NHS functions, and how we’ve experienced similar issues in the US, and what it meant to the patients. http://www.dailymail.co.uk/news/article-2162242/Doctors-strike-affects-10-patients.html

This illustrates a key inefficiency in the NHS: the doctors are not beholden to the consumers. The chairman of the doctor’s union even used the phrase ‘the fight is with the government’, implying that they are not trying to hurt their patients. But who gets hurt when their scheduled surgery, (an appointment that is often difficult to come by in the first place) has to be rescheduled? The power of the purse is in full display in this instance. In the US, we’ve created a society that engenders pride in the success of doctors. We want our doctors to be highly competent, well compensated, and esteemed for their efforts. Bumping them down a peg to the status of ‘cog in the machine’ will certainly not lead to better outcomes. 

We have had similar issues in the US with government employees. You may recall the air traffic controller strike of the 1980’s or rows in individual states over pay and pensions, such as the recent recall election of Scott Walker in Wisconsin. The very idea of public employee unions has been in dispute even going back to the FDR administration. In a letter to a Federal union he wrote,

• “All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.”

This seems pertinent still today, given that after the recent Supreme Court decision upholding the ACA, several commentators in the healthcare industry have been predicting the eventual unionization of doctors; if Britain serves as an example, it is not one we should be clamoring to follow. Here’s a link to a very good article on the effects doctors may see in the coming months: (http://news.heartland.org/newspaper-article/obamacare-expected-increase-loss-doctor-owned-practices)

Now to bring the focus back to the most important driver of healthcare: the patient. A problem lingers with the whole premise of having a doctor’s union. I can only ask the question---- because after much thought, I realized that my solutions got very murky, political, emotional, and ultimately led to naught (at least for the purposes of this blog):

What do you do when your doctor is in a union and you no longer trust him/her to put your best interests first? It seems far-fetched for the United States, given the culture I described above, but it’s all too real for thousands of patients in Britain right now.

Read more at the American Presidency Project: Franklin D. Roosevelt: Letter on the Resolution of Federation of Federal Employees Against Strikes in Federal Service   http://www.presidency.ucsb.edu/ws/index.php?pid=15445#ixzz1zbinKpWE

Feds Grant Millions to the “Shared Decisions” Endeavor

----Terri Bernacchi, PharmD, MBA, Cambria Health Advisory Professionals

The proud announcement about more federal funds ($36.1 million in funding, part of a $1 billion “Innovation Grant”) being “won” by a handful of large, integrated health systems exudes optimism as it explains the use of these funds is “primarily to hire and train an estimated 48 patient and family activators over three years to help with shared decision-making (SDM) related to hip, knee or spine surgery, and for patients with diabetes or congestive heart failure.” (By my math, that is $750,000 per “activator” or $250,000 per activator per year, to help what can only amount to a handful of patients.)

While I could comment on the wisdom of bleeding these funds on a speculative project at a time when we are in pretty dire economic circumstances, I won’t indulge that instinct. And those who read my blogs or know me personally know that I am passionately enthused with the concept of “shared decision making” in health care. SDM can be the primary means to improve patient satisfaction and optimize results ----which reaps (only as a by-product) REAL cost-savings based on a reduction in resource waste due to non-compliance or over utilization. http://www.ama-assn.org/amednews/2012/07/02/bisd0703.htm  

My larger concerns in this article and with this approach is described at the end of the article: that a physician can prescribe a “video” for the patient to watch which will result in a “shared decision” for the patient to have (or not have, gasp!) a surgery. SDM is more than “tools”----it is a process that requires time and deliberation. The article quotes Dr. Goldbach, the Chief Medical Officer of HealthDialog as saying, “It can be a matter of a physician “prescribing” a video for a patient deciding whether or not to get knee surgery.”

HealthDialog is a “private, wholly owned subsidiary of Bupa, a global health and care company of more than $12 billion in revenues headquartered in London, England. Health Dialog provides population analytics, interactive decision aids, and healthcare decision programs to over 17 million people around the world. Health Dialog provides population analytics, interactive decision aids, and healthcare decision programs to over 17 million people around the world.” Clearly, this private company is heavily linked to our health care reform initiatives in its relationships with CMS.  http://www.healthdialog.com/Utility/Company

 Shared decision making involves give and take between the clinician and the patient (and sometimes the family). It is as intimate as a confessional and is not something that can be slap-dashed together as part of a “program”.  It occurs in local surroundings and not in corporate offices, conducted by call-center personnel.  Shared decision making happens ONE patient, ONE situation at a time.

Terri is the founder of Cambria Health Advisory Professionals. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders, a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.

A Perspective on Waste in Healthcare: A Tale of Two Articles

---------By Anna Shepherd, Health and Personal Finance Professional

Two recent headlines tell a tale of two stories but offer me an opportunity to comment on a couple of interesting challenges we face in our health care system, across the country.

1. The first article lauds a $1.1 million federal grant awarded to a Berkeley clinic as part of the Affordable Care Act (http://www.mercurynews.com/breaking-news/ci_20713200/berkeley-clinic-lands-1-million-grant-educate-abouthttp://www.bellinghamherald.com/2012/05/23/2535431/feds-struggle-with-getting-elderly.html)  The funds were from a pool of $122 million in Health Care Innovation Awards given out recently to 26 recipients. The "Over 60 Health Clinic" of LifeLong Medical Care will hire 60 new employees as part of the grant. The goal? Educate patients and reduce costs associated with urgent care, while improving outcomes through the use of “Peer Educators”.
2. The second article (by Kaiser Health News) details the disappointing results of another federally funded program started in 2007: “Money Follows The Person” which anticipated saving significant Medicaid and assistance dollars, by moving elderly people out of nursing homes and back into community.  See (http://www.bellinghamherald.com/2012/05/23/2535431/feds-struggle-with-getting-elderly.html) 

The Berkeley clinic article seems to be an appropriate start to patient-based cost control. It cites that educating 750,000 patients about compliance and the nature of their disease could save the system $250 million. The cost of the program itself: $122 million. My immediate concerns have to do with the information available in the article and the nature of the problem itself.

This article doesn’t go into depth about what type of backgrounds the peer-educators have, which to me is really what the whole program hinges on. If these people are former clinicians, nurses, or medical psychologists, I could foresee a high success rate (though costly).  

However, if they are case workers, which is likely, I could see an outcome similar to the second article about the Money Follows the Person program; it has been promised $4 billion, received $1 billion, and performed it’s duties for 36% fewer people than promised.  

In California alone, the health agency responsible for implementation has to work with two dozen other local placement agencies and is finding the barriers significant. This is the type of waste endemic in trying to fix problems whose origins are misunderstood or even unattainable.  

I want to explore why these types of programs are ineffective. Is it just government bureaucracy run amok? Is the populace in question more at-risk than average, leading to skewed results? Are the advocates being employed the ones best-suited to help?  

The fact that much of the US population needs advice concerning their health is not in question; but who is providing it certainly is. Suggesting that former healthcare professionals need to be central to patient counseling is not intended to demean the role of social workers; they are a necessary resource to many who have limited options and means. However, I think that the people advising patients on issues of compliance and decision-making need to be steeped in the industry; someone who’s seen and treated it all can be an invaluable advocate.  

However, let it be clear that they must also be entirely uninvolved when it

comes to diagnosing or treating the patient once they turn the page on being a provider and become an advisor. Current payment schemes’ create inherent conflicts of interest for the provider and are certainly a contributor to waste and fraud. In my opinion, patients would also be much likelier to heed the words of an impartial professional, leading to increased success rates.

In regards to efficacy and cost of the counseling, the biggest obstacle remains patient involvement. Those who have self-selected to be involved in the Berkeley clinic have a higher likelihood of success and will make the program worthwhile (again, given appropriate counsel).  

The point of this whole website and subsequent venture (see Cambria Health Advisory Professionals at http://www.sharedhealthdecisions.com/ ) is about empowerment of the individual and illness prevention for patients within the private sector. In speaking with outsiders, I have been criticized for not understanding the plight of a poor or disabled patient and the needs they have when they are sick and on their own.  

I respond by saying that I do understand because I work personally with elderly patients on Medicaid. But empathy is not an effective solution, nor is more money or programs.  

What we believe is effective is to catch the individual well before they have entered the Medicare system. If someone is frequenting a health advisor in their 40’s, they can learn about all of their options before the hard decisions must be made and, more importantly, they can plan. Removing these proactive patients from the pool of those in need not only saves vast sums of money but also allows focus to be directed on the patients with a high likelihood of noncompliance or medical neediness, creating a win-win for all.

Waste Avoidance vs. Rationing: In the Eye of the Beholder

--By Anna Shepherd, Health & Personal Finance Professional

After musing over this must-read article written by Dr. Howard Brody, a few things come to mind. I absolutely agree that the type of waste the author describes is the elephant in the room that needs to be addressed before any realistic measures can be taken to rein in healthcare spending in the United States. 

See: Brody, Howard. “From an Ethics of Rationing to an Ethics of Waste Avoidance” NEJM 2012; 366:1949-1951. May 24, 2012. Taken from the URL: www.nejm.org/doi/full/10.1056/NEJMp1203365#t=article

But I also have a few points of contention that are not directly addressed with the article.

1. It’s obvious that in this environment, trimming the health care industry from 17% of GDP to a more manageable number, say 9%, is going to be unpopular from a policy standpoint due to the sheer size of the health care industry itself (read jobs). However, this would not be disastrous as the more efficient allocation of resources in a free market would be a net benefit in the long term. However, the political will can only exist if the electorate is also willing, a political rant I will forego right now.
2. It does bring me to my next point however; I think the author asks too much of the average physician without bringing in the most important component of the equation: the patient. Patient education is the only way to really solve the waste problem, in my opinion. Unfortunately, the path to an informed and enlightened patient takes time and effort. Physicians are already inundated with large numbers of patients, ever lower reimbursement rates, malpractice threats and the cost of practicing defensive medicine, not to mention the stresses of simply running a practice. I’m not a physician, nor an expert in these matters, but it seems naïve to me to expect physicians to take on this extra task. So, there must be a better way to get the patient to make better decisions and reduce wasted resources.
3. The final issue I have with the physician-driven nature of this article is a moral one. The decision to ‘ration’ cannot come from “without”. Because the rationing we are talking about is often going to involve foregoing costly procedures, we arrive at a very gray area in which the care-taking physician must try to be an objective advisor. They are far too financially involved, as the author mentions, in the outcomes of the patient’s decisions to truly be the trusted source for advice.

Posing questions about the ethics of rationing is a great place to start the conversation. And physicians are a crucial gate-keeping mechanism to avoid waste. But I think the author may be trying to solve a problem by creating a more complex system instead of the solution I see as painfully obvious throughout the health care system. It goes to a fundamental component of economic efficiency: a system is efficient if each actor is allowed to maximize their individual utility.

Simply put: the answers need to come from the patients themselves. We need to create an environment in which patients can seek the answers and information that allow them to make efficient decisions without feeling that care has been rationed away from them. They need to own the decision.

The Squeeze on State Budgets Means Health Care Reform (As Is) Is Infeasible

By Anna Shepherd, Health & Personal Finance Professional

The impetus for this post was the news of a small community in Washington losing state funding for health clinics due to budget problems. I think it typifies conditions throughout the country. States are already facing crippling budget crises that force them to seek federal monies to help pay for programs like Medicaid. When we consider the fact that health care spending is going to keep increasing (now at 17% of GDP—see WSJ article below) we can safely assume that states are not going to suddenly be able to pay more into Medicaid and related programs. So, the burden will fall to the Feds. However, at a time where we will inevitably (amidst much pandering to the contrary) have to raise the debt ceiling again, it only stands to reason that the money is simply not going to be there for a costly overhaul—on the state or Federal side.

Further recognition that the ACA legislation is not entirely feasible came today, as the Obama administration repealed an aspect of the bill due to start this year that includes end-of-life discussions in a regular physician appointment. When push came to shove, it wasn’t sensible and was repealed. Somehow, I think we’re going to be seeing a lot of that in the next few years. Unfortunately, it comes at a time when governmental action is a precious commodity. A gridlocked Congress already has too much on its plate just considering the budget; unraveling the labyrinth health care law seems like a Herculean effort. Nonetheless, I think we’re beginning to see a reality that was somehow not present last March.

So what’s the solution? Though it is my personal opinion that health care was passed without due diligence and if it had been proposed in segments over a longer term the sensible parts would have passed and the nonsense would have been left behind, we cannot turn back time. However, there are still actions to be taken. The first of them is a serious look at the Rivlin/Ryan proposal: people born after 1956 get a needs-based (adjusted for health risk and age as well) voucher to spend on private health insurance instead of Medicare eligibility (For more on this: http://www.ncpa.org/pub/ba736 ).

This is a start! Furthermore, as in the Forbes article linked below, companies need to take a long, hard, look at what their employees’ health means to the overall health of the company. Creating a scheme similar to 401k contributions, increasing participation in wellness-reward programs, allowing higher contributions to HSAs while funding high-deductible plans, personalized insurance products—all of these are feasible ways to make health care a more manageable part of corporate life. I firmly believe it will fall heavily on the private sector and the actions of individuals to make a difference in the state of health care in this country.

Source articles

• Washington community sees funding for health clinics cut due to budget crisis:    http://www.whidbeyexaminer.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=5055
• Stimulus to states set to end with new Congress:  http://www.google.com/hostednews/ap/article/ALeqM5iSQbSnGouFW-eyk3ElbhWLELr-cA?docId=b9252430d82441d980d86e945f7af254
• Health spending at 17% of GDP http://online.wsj.com/article/SB10001424052748703675904576064173290792358.html
• Solutions for employers http://www.forbes.com/2010/11/29/health-care-reform-employee-retention-leadership-managing-costs.html?boxes=businesschannelsections

The Health Insurance Benefit as Umbilical Cord

--By Anna Shepherd, Health & Personal Finance Professional
We are all aware now that Obamacare has had some positive benefits for the less-than-27 years of age crowd: young adults can stay on their parent's health plan up to age 26. (Read more: http://www.sacbee.com/2010/05/09/2736160/personal-finance-health-care-rules.html#ixzz13b68jp7V )

As someone who is no longer on their parent’s plan, I have mixed feelings about this part of the legislation. It would be much easier to get back on Dad’s health plan, and I would certainly have a greater sense of security as I strike out on my own. But at the same time, as I’m trying to find a dentist for cheap in my new locale, I’m learning a lot and being selective because my bank account is at the forefront of my mind.

Part of the problem with American healthcare is that the true costs are not reflected in the prices (premiums) people pay due to the tax benefits of employer plans as well as the individual idea that “I’m not paying for it, the insurance company is.” I think these types of inclusions in the health care law further exacerbate that type of thinking. It allows young people to sort of write-off an expense onto their parents and not to have to think about the true costs until they smack them in the face later on. Now, people can certainly debate the pros and cons of young people not having to worry about their health care. As the linked article states, they are freer to find work, particularly non-profit social work, because health care coverage doesn’t have to be a prerequisite for a job. However, this also allows them to not have to think critically about planning their health and finances on their own.

Furthermore, we must ask, who is paying for this? The answer is often going to be: companies already cash-strapped and trying to cut costs in their health-plans. This is certainly not the best news for them, especially in this economic climate. These adult-children are not working for the company and increasing output and thus revenue, but they are reaping a reward for the work of others.

In the end, this is another example of inefficient cost-redistribution endemic in our health care system. Unfortunately, I view it as forestalling the inevitable—these kids have to own up sometime, whether it happens at 23, 29 or 35 god-forbid, the bottom line is always there and someone’s going to have to pay for it.