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. 

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.

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.