Clinical affiliation deals between retail clinics and hospitals or health systems expand access to services, speed care, help control spending, and drive patient referrals.
For hospitals and health systems, relationships with retail clinics are a relatively easy sell: They help boost patient volume for inpatient and outpatient services while effectively outsourcing basic healthcare services such as vaccinations.
James Parobek, SVP of Operations
Texas Health Physicians Group
James Parobek, SVP of operations for Arlington, TX-based Texas Health Physicians Group, says affiliations between hospitals and retail clinics benefit both sides of the healthcare partnership and their patients.
"The clinical affiliation between Texas Health Resources and CVS MinuteClinic has created another access point to Texas Health for residents of the Dallas-Fort Worth metroplex. This allows patients to receive care at the appropriate place and price for minor illnesses that do not require care in an emergency room or urgent care center. Over time, we believe this will decrease some of the activity in the emergency room to allow truly emergent patients to be seen quicker," Parobek says.
How Physicians Benefit
Plans to establish a clinical affiliation with MinuteClinic did raise concerns among some Texas Health doctors. "[They] were concerned they would lose patients to the MinuteClinics, and/or their patients would not see them for routine minor illnesses, resulting in a potential loss of income," Parobek explains.
But individual physicians benefit from the clinical affiliation between Texas Health and MinuteClinic, he says. "For our Texas Health Physicians Group practices, this allows a patient to be seen quickly for episodic care when they may not be able to access their physician after-hours or on weekends."
Texas Health Physicians Group leadership "needed to fully explain to physicians the objective of increasing access to Texas Health Resources," he says. "We also emphasized to our physicians the benefits of this affiliation: the potential for referrals; the fact they won't lose patients, as the vast majority of MinuteClinic patients do not have a physician; and the potential to supervise the [advanced practice registered nurses] and receive a stipend for doing so."
"The primary care physicians in our group have seen a number of new patient referrals from the MinuteClinics." And more than 30 primary care physicians receive a stipend for supervising APRNs working in the MinuteClinics.
The Benefits of Clinical Affiliation Deals
Retail clinic officials say the partnerships they are establishing with hospitals and health systems are win-win scenarios.
"In many of our markets, we have formal clinical affiliations," says Eileen Myers, VP of affiliations and patient-centered strategies at Nashville, TN-based The Little Clinic. "Each clinical affiliation is unique as it takes into consideration the strengths and resources of The Little Clinic, the health system, and the needs of the community."
The Little Clinic operates about 150 retail clinics in Indiana, Ohio, Arizona, Colorado, Georgia, Tennessee, Kentucky, Indiana, and Virginia.
"Sharing a healthcare market extends access to patients in need of care," she says. "With our without a formal clinical affiliation, The Little Clinic provides the community with convenient, affordable and high-quality health and wellness care for the whole family. For businesses, this means we help control healthcare spend. Together with the health system in the community, we provide improved healthcare access to all levels of care."
The Little Clinic focuses on the core business activity of retail clinics: "a limited scope of service," Myers says.
"When we see patients who need a higher level of care, we first ask if they have a [primary care physician]. If so, we help the patient make an appointment with their physician. If they do not have a PCP, we have a list of nearby physicians and help the patient make an appointment."
The Little Clinic is branching out into providing a wider spectrum of services in some markets, such as chronic care.
"Patients without a primary care provider will come to The Little Clinic with elevated blood pressure or elevated blood sugar. The patient's finances, work schedule, and/or denial of their condition often keeps them from finding a doctor. But the patient agrees to be followed by the provider at The Little Clinic… who follows a protocol approved by the health system and consults with the physician at the health system as needed, Myers says.
Patients are sent to the health system for services outside the scope of the clinics' capabilities, but are otherwise managed and monitored at The Little Clinic.
Greater Access to Care
Nancy Gagliano, MD, chief medical officer at Woonsocket, RI-based CVS Health's MinuteClinic, says retail clinics are playing a key healthcare access role for thousands of patients.
"MinuteClinic provides critical access to patients for acute minor illnesses, vaccinations, and important wellness services such as smoking cessation and weight management," she says.
"We provide much of this care on nights and weekends, when physicians are not available, and we provide the care in coordination with the primary care physicians that are affiliated with us by sending important visit notes" to physicians—directly into their electronic medical records system, if they have an EMR.
MinuteClinic has formed clinical affiliations with 49 hospitals and health systems across the country.
"They include large academic institutions such as the Cleveland Clinic, Emory Healthcare, Dartmouth-Hitchcock, Robert Wood Johnson and UCLA Health as well as smaller, community-based health systems such as Greenville Health System in South Carolina, Virtual Health in southern New Jersey, and The Baton Rouge Clinic," Gagliano says.
"The collaborations include joint patient education initiatives and the integration of electronic medical records systems. In many markets, the collaborating physicians for our MinuteClinic practitioner teams are provided by the health system affiliate."
Retail clinics have emerged as an essential slice of the continuum of care, she says.
"We really see no drawbacks. Hospitals and physicians are increasingly organized in accountable care organizations that benefit when costs are reduced and quality is improved. Health systems see us as an efficient alternative to more expensive emergency rooms and urgent care centers," she says.
"Everyone benefits when we can work together to make healthcare more convenient, accessible, and affordable for patients."
Making Market Relationships Work
Charles Lewis, executive director of emergency services and ambulatory care at St. Anthony's Medical Center in St. Louis, says establishing gainful market relationships in a competitive market takes work.
St. Anthony's not only shares its urban market with independent urgent care centers and retail clinics, but also operates four urgent care centers of its own.
"Whether it's from retail clinics and urgent care centers, or other hospitals and health systems, there will always be competition to draw patients and clinicians. Those pressures will always exist. It's up to us to use that competition to improve the care we provide for our community."
In the urgent care arena, opportunities for mutually beneficial cooperation outweigh the risks of financially damaging competition, healthcare providers say.
Over the past decade, health systems and hospitals have been adapting to a challenging market reality: the rise of "retail medicine."
Traditional healthcare provider organizations have faced vexing market dynamics on two fronts: retail clinics at sites such as pharmacies that offer a relatively limited suite of services, and urgent care centers capable of treating most non-life-threatening conditions.
With few areas of direct competition in core services, hospitals and health systems have largely embraced peaceful co-existence with retail clinics, but urgent care centers have been more daunting.
Alan Ayers, practice management adviser and board member at the Naperville, IL-based Urgent Care Association of America, says health systems and hospitals have delicately nuanced relationships with urgent care centers.
"One challenge in integrating urgent care into a health system is competition within that entity for the patient. For example, emergency departments may want to save physician time and reduce overcrowding by redirecting low-acuity visits to urgent care, but at the same time these visits can represent high margins for the emergency department," Ayers says.
"Additionally, some primary care physicians want to maintain exclusive relationships with their patients, and, as a result, they may extend their hours and raise their level of clinical capabilities."
In any given healthcare market, the key to establishing urgent care centers that optimize value for both providers and patients is matching the site of care appropriately with the patient's level of need for services, he says.
"An outcome of this competition is some duplication or overlap of capabilities across the system. Ideally, a process would be in place to guide patients to the most appropriate option for their specific need."
If You Can't Beat 'Em, Join 'Em
St. Anthony's Medical Center in St. Louis was among the early innovators in urgent care, opening its first urgent care center in 2004 and currently operating four such facilities.
"We believe urgent care centers are an important service for our community, which is why we were one of the first providers in the St. Louis area to open [one]," Charles Lewis, says executive director of emergency services and ambulatory care at St. Anthony's.
"For many patients, including those without a primary care physician, we need to provide access to immediate care without the trip to the emergency department when true emergency services aren't necessary. Whether patients visit our urgent care centers or another provider's, we know it's a service that helps our entire community."
Lewis says St. Anthony's urgent care centers emphasize to patients the importance of following up with care from a primary care physician or a specialist and are able to make referrals and coordinate follow up care.
"The urgent care centers also provide our clinicians with a cost-effective after-hours care option for their patients," he says. "We also believe it's important that urgent care centers exist to relieve emergency departments of some of the burden of seeing too many patients. Every patient who seeks appropriate care at an urgent care center instead of the emergency department allows us to improve the care of our emergency patients. All of these options work to improve access to our health system."
Ron Stiver
Last month, Indianapolis-based Indiana University Health announced plans to open a dozen urgent care centers in partnership with Premier Health, a Baton Rouge, LA-based organization that helps health systems and hospitals develop urgent care facilities.
Ron Stiver, president of Indiana University Health's clinical services, says the health system's urgent care center initiative is part of an ambitious strategy.
"The addition of urgent care centers broadens our efforts to improve access to healthcare and make it more convenient for consumers to access IU Health clinical expertise. It is one component of a larger strategy that also includes our launch of same-day primary care appointments, online self-scheduling, onsite/near-site employer clinics, virtual health offerings and the myIUHealth portal," Stiver says.
He has high praise for Premier Health, which has "demonstrated expertise in partnering with health systems to launch and operate urgent care clinics… We believe their expertise and track record, combined with our clinical expertise and brand strength, will form a powerful combination to the benefit of consumers," Stiver said.
Steve Sellars, CEO of Premier Health, says the partnership with IU Health exemplifies his company's approach to working with hospitals. Sellars is also on the board of the Urgent Care Association of America.
"Premier Health was one of the first companies in the country to partner with hospital systems in the urgent care space. That was 16 years ago," he said. "We are recognized in the industry as a company that understands urgent care and the management processes necessary to be successful in a retail health model. We believe that has great value. We also believe there is great value in having an established hospital partner that has built its brand in the market providing excellent patient care and outcomes. That's critically important because of our unique approach to urgent care partnerships. Each of the urgent care centers Premier Health shares ownership in and/or manages bears our hospital partner's name. In that respect, you could describe us as a silent partner."
Friction Point: Emergency Departments
Independent urgent care centers pose some competitive challenges to health systems and hospitals, but there are several opportunities to establish a mutually beneficial relationships, according to Max Puyanic, co-CEO of Portsmouth, NH-based ConvenientMD Urgent Care.
"We tend to collaborate with the majority of departments and groups within a hospital network," Puyanic says. "The main area of competition is within the hospital's ED, specifically patient visits that are non-life-threatening and can be treated in one of our facilities for a fraction of the cost and significantly more convenient access to care."
He says ConvenientMD, which opened its first clinic in Windham, NH, two years ago and plans to have 10 clinics in the Granite State by the end of this year, works cooperatively with health systems and hospitals on several levels.
"We often act as an extension of their network to provide their patients an option for convenient access to high-quality medical care. Primary care groups within health systems will refer patients to us when they have a higher acuity case that would not be treated in a primary care setting but is not life-threatening," Puyanic said. "Another common scenario is that PCPs refer patients to us if they cannot see one of their patients right away, due to a full schedule for the day, or the office is closed on evenings, weekends and holidays."
A nationwide study has found that healthcare cost-shifting to consumers combined with stagnant household incomes is denying workers an economic benefit from slowing growth in health insurance premiums.
Research released this week is providing a national view of a health insurance trend that has been playing out in local healthcare markets across the country—cost-shifting to consumers.
The rate of premium increases for employer-sponsored health insurance has slowed over the past decade, but deductibles and other forms of cost-sharing are hitting household budgets hard, according to data from nearly 40,000 businesses that was analyzed by the Washington, DC-based Commonwealth Fund.
In a teleconference held Wednesday, Commonwealth Fund President David Blumenthal, MD, said there has been a "recent historic slowdown in healthcare costs" linked in part to cost-cutting requirements of the Patient Protection and Affordable Care Act as well as Medicare initiatives including efforts to reduce unnecessary hospitalizations. "However, workers and their families are not seeing the benefits of these changes."
The research, which features data collected from 31 states and the District of Columbia, covers the period from 2003 to 2013. Key findings include:
The annual cost of employee contributions to premium costs has doubled over the past decade.
The pace of premium growth outpaced household income growth in all 31 states and DC.
Out-of-pocket costs for premiums and deductibles have nearly doubled, rising from 5.3% of median household income in 2003 to 9.6% in 2013.
Annual growth of premium rates has slowed significantly since passage of the PPACA in 2010. From 2003 to 2010, annual premium increases for workers' health plans were pegged at 5.1%. From 2010 to 2013, the rate of premium growth fell to 4.1%.
Despite the slowdown in premium growth, relatively stagnant growth in household income is resulting in healthcare costs eating a larger share of employees' household budget.
"Healthcare is consuming a greater share of income," Cathy Schoen, lead study author and executive director of the private foundation's council of economic advisers, said during Wednesday's teleconference.
In 2003, there were only two states in the CF report's data set where annual premiums gobbled up 20% or more of household income. In 2013, data shows premiums consumed 20% or more of household income in 18 states.
There has been a marked increase in cost-shifting to consumers, particularly in deductibles. Schoen said about 80% of workers had deductibles built into their health plans in 2013 compared to about 50% of workers in 2003. "High deductibles are the rule now, not the exception."
Cathy Schoen
More High-deductible Offerings As for healthcare payers, they are trying to ease the cost-shifting burden for individuals and their families, says a spokesman for Pittsburgh-based Highmark Inc. said after the release of the CF report.
"As far as consumers' having more 'skin in the game,' Highmark offers a variety of products with different levels of deductibles. This enables us to provide our members what they need by giving them the power to choose the care, place and price that is right for them," Senior Public Relations Analyst Douglas Braunsdorf says.
"Many of our small group customers continue to want to offer rich benefits to their employees, but they also are offering more high-deductible health plan products as a way to keep premiums lower and shift some of the cost-sharing to their employees."
He says the CF report reflects the findings of research conducted at the Washington, DC-based National Business Group on Health, a nonprofit organization that represents the perspective of large employers on healthcare issues.
"The health insurance industry as a whole is seeing more large groups steering their employees to high-deductible products. In fact, according to a study by the [NBGH], nearly 33% of large employers across the country were expected to offer only high-deductible health plans to their workers for 2015, up from 22% in 2014 and 10% in 2010. And 81% of those large employers were expected to add a high-deductible plan to their menu of choices, up from 53% in 2010," Braunsdorf says.
Employers Also Bear Burden
Brian Marcotte, NBGH's president and CEO, says the PPACA and other reform efforts have lowered overall healthcare spending, "but we have a long way to go."
"While healthcare cost growth has slowed recently, it is still growing faster than the overall economic growth rate. As it does, both employers and employees pay more," Marcotte said Thursday. "While employees have been paying a somewhat greater portion of the costs, employers still pay the bulk and, as costs keep going up, they have been paying more even though the employee share has increased. Employers pay on average 82% of the health insurance premium, which has remained constant since the implementation of ACA."
Employers and their employees have a shared interest in boosting the quality and affordability of healthcare, Marcotte says.
"The cost of healthcare is a challenge that both companies and their employees share and does not benefit either. Employees lose out in foregone pay increases as more of their compensation is in the form of healthcare, and companies have to reduce costs elsewhere or squeeze profits to pay for the increases in their healthcare costs. This is particularly egregious, since we know that a lot of those dollars are for unnecessary, ineffective, or duplicative care, which brings us back to the real problem: the need for radical payment and delivery reform."
Making Consumer Cost-Sharing Work
After Wednesday's teleconference, Schoen said the primary antidotes to burdensome healthcare cost-shifting to patients are informed consumers and better consumer protections.
Highmark's efforts to offer a broad range of health plan choices to consumers is "clearly where the market is moving." Offering a diverse range of health plans as a way to blunt cost-shifting to consumers will only work if individuals and their families have the tools and knowledge to make economically sound decisions, she said.
Schoen noted for example, that HealthCare.gov, has improved its cost estimator for individual coverage. "It's gotten more standardized, so it's easier to compare."
And consumer protections established under the PPACA are taking some of the sting out of cost-sharing, she says. "At least there is a floor under what has been covered," Schoen said. "It is no longer legal for health plans to put a ceiling on the cost of care."
A Pennsylvania company is offering a healthcare coverage option to segments of the population still struggling with access to affordable healthcare: the middle class and undocumented aliens.
The limits of the federally driven effort to boost access to affordable healthcare are coming into focus as the political limits of the Patient Protection and Affordable Care Act's healthcare accessibility potential are being tested on two fronts.
In a dozen Republican-leaning states, political opposition is blocking several million adults from gaining health coverage through Medicaid expansionunder PPACA guidelines.
Betty Heiman, MBA
Co-Founder and CEO
Transparent Health Group LLC
And in Washington, political gridlock has blocked immigration reform legislation, making the ED the site of first resort for more many of the country's estimated 11.5 million undocumented aliens seeking healthcare.
The economic limits of the PPACA's push for affordable healthcare are being tested in the middle class.
"The working middle class is truly being priced out of healthcare," Betty Heiman, MBA, co-founder and CEO of Swarthmore, PA-based Transparent Health Group LLC, told me recently. When accounting for undocumented aliens, who are not eligible for healthcare coverage under the PPACA, she estimates the number of uninsured and underinsured people after full implementation of the law could be as high as 40 million.
Heiman defines the working middle class as households with annual incomes ranging from $60,000 to $125,000. The PPACA-spawned public health insurance exchanges are not an affordable option for millions of Americans in this income bracket, she says, because most comprehensive plans in the "platinum" category have high monthly premium rates and HIX health plans with low premiums have high out-of-pocket costs.
"Affordability is a challenge for the middle class. In many cases, people are looking at a very significant deductible," she says.
I get it.
My family is fortunate enough to be in this income bracket. We are also fortunate enough to have a relatively generous health plan through my wife's employer. However, if I got kicked off my wife's health plan and had to buy health insurance through the federally administered exchange in New Hampshire, the numbers are sobering from my working middle class perspective.
After plugging some basic information into the user friendly cost estimator on HealthCare.gov, I perused the 16 available "silver" category health plans, a middle-of-the-financial-road option for most consumers.
Boston-based Minuteman Health Inc. offered healthcare coverage at the lowest monthly premium, $347, with a $2,000 deductible and maximum annual out-of-pocket expenses pegged at $6,000. Milwaukee, WI-based Assurant Health offered coverage at the highest monthly premium, $705, with a $2,000 and maximum annual out-of-pocket expenses pegged at $6,350.
Assurant also offered the lowest cost health plan comparable to our family's plan, "gold" category coverage at an $849 monthly premium, with no deductible and maximum out-of-pocket expenses pegged at $6,350.
My family budget might survive the financial hit of Minuteman's lowest priced silver plan. The Assurant gold plan is surely out of reach and comparable to personal finance calamities on the scale of replacing the entire roof of my 110-year-old house.
'This is Not Insurance'
Heiman's organization has created Transparent Healthcare, which is taking an unconventional approach to boosting access to affordable healthcare coverage to the middle class and undocumented aliens. "This is not insurance," she says.
Launched in 2009, it could become the AAA of healthcare, a membership-fee-financed organization that features access to a range of services and discounted pricing.
"If you're paying for healthcare on your own, you're paying too much," Heiman says. "You can't contract or negotiate the way the big players do." And adding the billing rates for the uninsured at most hospitals is about five-fold above Medicare billing rates.
Focusing on predominantly urban counties, Transparent Healthcare has established a network of participating providers in three states: New York, New Jersey and Georgia. For $39 a month, every member of a family household gets access to a wide range of medical services at Medicare-comparable rates and 24/7 telemedicine access to a doctor.
"Our members understand the cost of care before they go through the door," Heiman told me. "They're walking in with a sense of dignity. They don't have to announce that they are uninsured, or have no idea of the cost of care."
Telemedicine Component is Key
She says unlimited free access to telemedicine is a prime component of Transparent Healthcare's approach to boosting healthcare accessibility for the previously uninsured, the underinsured, and the undocumented.
"That sets us apart. It avoids deductibles and copays. Telemedicine is part of the subscription rate. There is absolutely no cost out-of-pocket. Physicians can prescribe over the phone for many conditions. This provides a significant opportunity to speak to a doctor."
Transparent Healthcare members pay cash on a pay-as-you-go basis, which is a draw for providers, she says. "Billing can account for as much as 15% or 17% of a doctor's expenses. When they work with us, they're not billing. They're not waiting 30, 60 or 90 days for payment."
Jessica Hicks, President of Nyack, NY-based Grandview Physicians Billing Service, says Transparent Healthcare is a win-win for providers: increasing patient volume and lowering costs.
"Transparent Healthcare increases our reach into the community by bringing a new set of patients into our offices. Working directly with Transparent we save on billing and collection costs, as the patient pays directly at the time of service. Their customer service makes the process so simple. I wish all networks were this easy."
Placing a Premium on Patient Experience
"The time has come in healthcare to increase the level of customer service. We offer concierge services, helping patients find a doctor and prescription drugs at affordable prices," Heiman says. Transparent Healthcare is offers price comparisons for selecting doctors and pharmacies and allows "for the very first time, what the healthcare consumer needs – ease of use and transparency about price."
Heiman says the PPACA alone is destined for failure in its quest for universal healthcare coverage, which has opened a niche for entrepreneurialism and innovation. "Without these access gaps, there would be no room for us. The fact that there is a market of 30 to 40 million people creates a market opportunity.
In November, the Republican Party took control of both houses in Congress. The shift in political power could have a profound impact on payers, according to a diverse panel of healthcare experts.
Healthcare is one of the most regulated industries in the country, with a host of federal and state agencies overseeing all the major stakeholders.
In last fall's mid-term election, Republicans gained control of the Congress, seizing the Senate with a 54-46 edge over the Democrats and their duo of independent party allies. In the House, the GOP extended its voting margin over the Democrats, picking up 14 seats to post a 247-188 advantage.
As Republican leaders prepare to wield power at the Capitol, HealthLeaders Media polled a half-dozen healthcare experts, including representatives from payers, academia, and the business community. The panelists were asked to identify the top Congressional initiatives for healthcare payers to watch in 2015.
Three initiatives rose to the top:
The quest to fix or replace Medicare's unpopular physician reimbursement mechanism, the Sustainable Growth Rate
Patient Protection and Affordable Care Act repeal legislation
Efforts to tinker with elements of the PPACA
The SGR mess
Congress has struggled to reform or repeal Medicare's SGR physician reimbursement formula for more than a decade.
Last February, frustration fueled a bipartisan coalition of lawmakers who cut an SGR repeal deal, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014. "The Sustainable Growth Rate formula—the mechanism that ties physician payment updates to the relationship between overall fee schedule spending and growth in gross domestic product (GDP)—is fundamentally broken," members of the Senate Finance Committee, the House Ways and Means Committee, and the House Energy and Commerce Committee said in a joint statement.
William Kramer, executive director of health policy for the Pacific Business Group on Health, a purchasing group based in San Francisco, says legislation designed to resurrect last winter's SGR repeal deal is of utmost importance to payers and other sectors of the healthcare industry.
William Kramer
Executive Director of Health Policy
Pacific Business Group on Health
Fixing or replacing the SGR when it expires in March would be a key step toward creating a value-based healthcare system, he says. "The stakes are high. If we don't change the way physicians are paid, we will perpetuate a system in which the primary incentive is to increase volume, not quality. Although the bill isn't perfect, this is a crucial opportunity to continue the momentum toward value-based payment. If we get it right, Medicare physician payment reform will be a game changer; it will ripple out into the broader health system and improve quality and affordability for everyone."
Paul Clark, a legal analyst at Wolters Kluwer Law and Business, is pessimistic about progress and says the forces of action and inaction are set for yet another SGR battle in Congress.
"Congress has been unable to enact significant changes in physician reimbursement, so each year they pass a Band-Aid piece of legislation that averts significant cuts for a short period of time," Clark says. "So expect at least another short-term fix early in the 114th Congress that will mollify physicians for a few months, and more rhetoric from members of Congress about a long-term fix."
Another SGR patch would likely prompt Congresspeople to attempt piecemeal reforms to physician reimbursement in 2015, according to Harold Miller, president and CEO of advocacy group Center for Healthcare Quality and Payment Reform.
Harold Miller
President and CEO
Center for Healthcare Quality
and Payment Reform
"If Congress decides to simply enact another temporary patch to the SGR this spring instead of a permanent repeal, separate legislation on physician payment reform will be needed," he says, noting that several factors have created momentum payment reform legislation in 2015, such as the bipartisan push to move away from fee-for-service physician reimbursement. "There will likely be two different kinds of legislation considered: first, legislation authorizing or requiring faster progress on alternative payment models for all types of physicians; and second, legislation requiring implementation of specific payment models for individual specialties."
PPACA repeal improbable
Despite the Republican Party's firm grip on the House and newly won Senate majority, the GOP appears far more likely to revise the PPACA than to repeal President Obama's prime domestic policy initiative.
Theda Skocpol, PhD, a Harvard University professor and director of the Scholars Strategy Network policy group, says PPACA foes face a harsh political reality. "Too many people have gained health insurance through this law," she says of Americans who have garnered health coverage through the new public exchanges or expansion of Medicaid. "Whatever changes are made, repeal remains nothing more than rhetoric."
Republicans are far short of the 67 votes that would be required to override a certain presidential veto of any PPACA repeal legislation, Skocpol says. "You can forget that."
Chipping away at the PPACA
Changes to the healthcare law are another matter. Republican lawmakers are likely to find enough Democrats to tinker with unpopular elements of the PPACA such as the tax on medical devices that helps fund the law, Skocpol says. "Some of these things will get through to Obama. You can chip away at this or that tax, then you're talking real money."
Michael Warfel, vice president of government affairs at Pittsburgh-based Highmark Inc., says the PPACA's health insurance tax is ripe for revision or repeal.
"The HIT is a tax on all fully insured health insurance policies offered by a carrier. The tax began as an $8 billion assessment on the industry in 2014. It is scheduled to grow exponentially, reaching $18 billion by 2024 and more in later years," he says. "Opposition to the tax is broad since those whose coverage it impacts—small businesses, seniors, and individuals without access to subsidized coverage—are the same groups already having a difficult time affording care. The push for repeal on Capitol Hill is being spearheaded by the small business community."
Washington wheels set to turn slowly
Cindy Morrison, executive vice president of marketing and public policy at Sioux Falls, SD-based Sanford Health, says the pace of 2015 healthcare-related legislation will be set by immutable forces in Congress: the calendar, politics, and taxpayer dollars. The deployment of these forces indicates the pace will be sluggish, she says: "There's going to be a wait-and-see approach."
The impending SGR showdown looms large on the legislative calendar. "It will have to be addressed," she says. "That's the first thing out of the chute in March."
On the political front, Congresspeople are likely to move cautiously on healthcare legislation until this summer's U.S. Supreme Court decision on whether to allow subsidies on federally operated insurance exchanges, Morrison says. "If you're a smart politician, you're not going to make a move until the Supreme Court decision in June,"
The financing of healthcare, particularly for programs linked to the PPACA, also points to a slow pace for healthcare-related legislation in 2015, according to Morrison. Attempts to repeal any of the taxes that finance the PPACA could meet the same end as last winter's SGR repeal deal, she says. "It's fine if you're going to repeal a tax, but you better have a pay-for."
In the next phase of the healthcare reform law's implementation, providers will be the primary focus of the reform revolution.
Ariel Linden, DPH
Healthcare payers have been bearing many of the heaviest burdens in the first phase of implementation of the Patient Protection and Affordable Care Act. Now, the heavy lifting is shifting to providers.
For payers, the PPACA has upended business models through regulatory edict, created an individual insurance market from a scratch exchange recipe, developed new payment models such as accountable care contracts, and introduced a bevy of new competitors including insurance cooperatives and technologically savvy startups.
For providers, the PPACA journey has just begun, with thousands of health systems, hospitals, and physicians struggling to keep pace with the first wave of reform. Providers have clamored for repeal, revision or delay of several key federal reform initiatives such as the two-midnight rule for determining patient admission status at hospitals, Meaningful Userequirements for information technology and price transparency for healthcare services.
In their regulatory struggle with providers, federal officials have not only the law, but also the logic of accounting on their side.
Providers are the big spenders in the healthcare industry, according to data collected for the National Health Expenditure Accounts, the country's official healthcare spending statistics tallied at the Centers for Medicare & Medicaid Services.
In 2013, NHEA data pegged healthcare spending at $2.9 trillion. Spending for hospital, physician and clinical services accounted for more than half of the total, at $1.5 trillion. When accounting for other provider services such as dentistry, home health, and long-term care facilities, the provider share of the healthcare spending pie rises to $2.1 trillion in 2013.
Big Spenders
Providers had a hand in an additional $314 billion in 2013 healthcare spending through prescription drugs and costs for prescribed durable medical devices such as eyeglasses and hearing aids.
Ariel Linden, DPH, lead author of a study published in October that cast doubt on the effectiveness of hospital readmission reduction efforts, says providers face a daunting healthcare reform odyssey. "In some areas, they're pretty far along, but in others, they're not even on first base," he told me recently, citing Meaningful Use as the poster boy for provider reform quagmires.
"Even though it's written into law, there are many organizations that are falling behind. Are they sharing the data with their partners? Most of them are not."
The reformist push for value over volume is just beginning to overturn the fee-for-service business model that providers have embraced for generations, Linden says.
"What do they need to make the right clinical decisions that generate the most value? They're in the process of just thinking about it. This industry is only in its diaper. Providers are not getting the data they need… We don't have clear evidence, as a system, where we know clearly what works and doesn't work. Providers need a clear pathway to what they need to do."
Peter Angood, MD, president and CEO of the Tampa, FL-based American Association for Physician Leadership, says the absence of rigorously established standards for clinical care is a massive hurdle for providers to clear in the value-based healthcare revolution.
Recently, he told me that providers desperately need "appropriately focused and realistically representative metrics and measures for clinical care that are accurately coordinated with public reporting."
The establishment of evidence-based clinical standards is vitally important to the effort of transforming patients into powerful economic agents, Angood says.
David Burton, MD
"These metrics and measures need to accurately provide information on outcomes of patient care that reflect provider performance with reality-based methodology. The public reporting should more accurately reflect the difference in outcomes between providers as health systems and providers as individuals. Health systems' performances can strongly influence reporting—positively and negatively—of individual providers. Patients are still unable to make these differentiations when making consumer decisions."
Price transparency poses a similar challenge for providers in their role as one of the midwives in the birth of healthcare consumerism, Angood says. "Cost and pricing transparency remains one of the biggest obstacles for better understanding the value equation. Value equals quality divided by cost. We do not yet know how to optimally define quality as a numerator; and the denominator of cost is not easily understood because of the lack of transparency."
2 Accelerators
David Burton, MD, developed managed care health plans at Salt Lake City-based Intermountain Healthcare and has served in several top leadership roles at Health Catalyst, a data analytics firm in the Utah capital. He says there are two kinds of "accelerators" providers need to push as they weather the next wave of healthcare reform: mastery of data integration and clinical content.
Burton says providers and their vendor partners must develop data integration technology that is capable of combining information from several disparate electronic sources such as claims records, clinical records and financial records. Combining this data provides the level of granularity in patient records that is required to achieve success in major provider reform initiatives such as care coordination, cost control and quality improvement, he told me recently.
"If you have to recreate the wheel at every provider, this process isn't going to go anywhere. EHRs have sought to make clinical data 'machine readable.' The next [information technology] accelerator has to do with data integration and the creation of data warehouses. Can you get the data flowing? Can you integrate the data?"
"Clinical content accelerators" are needed to help providers establish best clinical practices and conduct a population-management-based approach to the delivery of healthcare services, Burton says. "It begins with a new mapping schema. You get a much more accurate picture of acute care than just looking at inpatient care." Effective data analytics in the clinical realm must draw data from settings beyond inpatient facilities including outpatient settings such as retail clinics, he adds.
The most potent clinical content accelerators are based on precise patient registries and are capable of tracking outcomes such as cost of care and mortality rates, Burton says. "It's not a bottomless pit, but it is a fairly ambitious undertaking."
The effort requires using data to define best practices in about a dozen primary clinical areas for hundreds of "care processes." As an example of bringing this data analytics muscle to bear on clinical content, he cites cardiology as a primary clinical area and coronary artery bypass graft surgery as a care process worthy of close scrutiny. "With the use of good analytic techniques, you can concentrate on the big processes, so it doesn't seem that you're pushing against the ocean."
Chef Rebecca Katz's life changed when her father began a battle with laryngeal cancer in 1999. That event spurred her belief that food is a key element in cancer care and her quest to change the American diet. Having cooked for various cancer patients and published a book on the topic, she promotes "sustainable nourishment as a way to improve American health."
In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. They are making a difference in healthcare. This is the story of Rebecca Katz.
This profile was published in the December, 2014 issue of HealthLeaders magazine.
"The food that we eat is critical. It has to be not just nutrition. It has to be translated to the plate."
Master chef Rebecca Katz's quest to change the American diet started with a life-altering event: Soon after the Californian finished culinary school in 1999, her father began a battle with laryngeal cancer.
"I went back east to cook for him, and I didn't know how to cook for someone with cancer," she says. "There was nothing to guide me. I realized how helpless I felt. My father became my guinea pig."
The process of culinary experimentation during her dad's treatment and recovery led to the publication of Katz's first book, One Bite at a Time, in 2004—and convinced her that food is a key element in cancer care.
The secret sauce of cooking for cancer patients is "understanding their transient taste changes as they go through treatment," Katz says. "The nerve endings are affected by chemotherapy and radiation. Look at your palate like a switchboard, and you're always having brownouts."
Over the past decade, a host of scientific studies have verified the nutritional benefits of several whole foods, herbs, and spices, such as anti-inflammatory effects. Katz found, for example, that carrot and ginger soup is a great dish for many cancer patients undergoing head and neck radiation therapy. "Their taste buds are on fire. Almost anything they eat is just too acute."
She says preparing palatable meals for cancer patients is crucial to their treatment and recovery, particularly when temperamental taste buds turn favorite foods foul. "If something doesn't taste good, or the expectation isn't met, you'll push food away."
In 2000, Katz cooked for her first group of cancer patients for a week. "It was the most rewarding experience I have had in a kitchen—to see how the act of food could bring joy into people's eyes." Now, she teaches cooking techniques to oncologists. "It's quite an enlightening experience for doctors," she says. "They can look at their patients with a different eye to see why their patients don't eat."
Now that she's seen how food can positively influence cancer care, Katz is promoting "sustainable nourishment" as a way to fundamentally improve American health. "It's looking at food and cooking food in a way that's delicious and nutritious—food you like and cooking you like. It's not just a diet, it's a way you live your life."
She says sustainable nourishment needs to rise to the forefront of efforts aimed at containing a growing tsunami of chronic illnesses in the United States, including heart disease, cancer, and diabetes. Many people suffering with chronic illnesses are hopelessly noncompliant with doctors' dietary recommendations because they aren't aware of the savory alternatives to their forbidden favorite foods.
When she teaches cooking to people with chronic illnesses or their caregivers, Katz says she never speaks about food in terms of the "can have" and "can't have" lists that doctors give their patients. "This is what I say: 'Here are the restrictions, here is what's going on, here's what we can do so you don't feel deprived.' You have to navigate different foods in different ways."
Katz says there's no excuse for the vast majority of Americans not to eat healthy, delicious food that fends off disease and helps heal the sick. "You'll have people who say they can't afford to eat healthy. Dollar for dollar, I can take you through the grocery store and prove that's not true."
A major component of sustainable nourishment involves encouraging Americans to return to eating whole foods, fruits and vegetables, rather than industrially processed food with high sugar and fat content, she says. "We used to be a community of producers—growing our own food. Now we're a community of consumers. … We have to go back in time to when food was considered important. The food that we eat is critical. It has to be not just nutrition. It has to be translated to the plate."
A New York-based startup health plan is on a quest to achieve one of the most elusive goals in healthcare insurance: processing information among payers, providers, and patients in real time.
A small company based in New York is tackling one of the biggest dimensions of health insurance: time.
"The traditional communication channels between providers and payers have been antiquated," Mario Schlosser, co-founder and co-CEO of New York-based Oscar Health Insurance, told me last week.
Mario Schlosser,
Co-Founder and Co-CEO,
Oscar Health Insurance
Oscar, launched in fall 2013 and marketed to individuals and their families through a website designed for ease of use, is striving to make a technological leap to real-time sharing of healthcare data. While the claims adjudication process remains a daunting time barrier, Oscar is automating as many other processes as possible to establish real-time communications between payers, providers, and patients.
Schlosser says the key to taming time is marrying long-term payer data such as medication history with provider-generated clinical data. "Lack of information flow in the healthcare system impedes service and slows the process down. It could be so much easier. It generally amazes me, the 10- to 20-year-old technology you find in healthcare."
Oscar's website helps health plan members gain easy access to physicians through an up-to-date and searchable provider registry. "We want to know which doctors have open panels," Schlosser says.
On the health plan's back end, technology makes it easier for Oscar to process claims and perform other administrative functions through automated workflows.
Frank Ingari
CEO of NaviNet
For the provider network, technology is helping to fuel a heightened level of cooperation, he says. "We constantly think about how we can get closer to providers."
Oscar has established an active and information-rich "feedback loop" with providers through a partnership with Boston-based NaviNet Inc. "We share eligibility in real-time, including deductible status and co-pay costs. That enables the doctor, very quickly, to get the pulse on the member's coverage status," Schlosser explains. "Providers spend a lot of time and effort to collect bills. Collection costs have increased. A doctor needs eligibility information in real-time. Then the doctor can simplify his workflows around care."
Sharing information with providers broadly and quickly creates a "virtuous cycle," Schlosser told me. "Doctors spend more time with patients. If we make life easier for the doctor… the doctor can spend more time with the patient than with us. If Oscar patients are happier with the care facilitated by us, then we can keep the cycle going."
Frank Ingari, NaviNet's CEO, says the Boston technology company has forged a powerful bond with Oscar by focusing its healthcare IT collaboration on providers. "The network is the organizing model," he says.
Earlier this month, Oscar chose NaviNet Open to serve as a payer-provider communications platform with real-time capabilities. Ingari says a prime objective of the platform, which includes a set of network services as well as reimbursement-related and clinical applications, is to establish a "robust way" for providers and payers to exchange information. "Healthcare has been very, very much lagging in providing secure communication."
Oscar is using NaviNet's platform to create a pair of communication channels with providers. An "interactive channel" includes the triggering of information exchanges whenever an Oscar health plan member experiences a healthcare event such as an emergency room visit. "The event will trigger medical document exchange in real-time," he says, noting that access to payer information and clinical histories gives physicians "guidance in the moment."
Ingari calls the platform's other communication channel a "clinical campaign" that features scheduled and targeted releases of information to providers. This set of information does not have to be triggered in real-time, but timeliness is essential to help physicians hit quality benchmarks and "push out the patients who are highly in need of an exam."
"In both cases, the product works bi-dimensionally. Payers and providers can be pushing and pulling information."
Oscar has an accurate directory of "everyone who is an active sender or receiver of information;" clinical documents are exchanged automatically, often with network alerts about clinical or financial developments in a patient's records; and the sharing of information in real-time includes "management of the preferences of a care team," Ingari says.
Everything that happens in the network happens in real-time, with one exception.
"To enable real-time payment, you have to have real-time adjudication. Today, it's a rare capability in healthcare, but it can be done. … Oscar is moving in that direction."
Mindset is also a problem, Ingari says, noting that a historical barrier must be cleared before processing a patient's healthcare transactions becomes as instantaneous as buying groceries with a debit card.
"We got exactly what we designed," he says of the historically adversarial relationship between payers and providers, "payers who have been ignorant about quality of care, and providers who haven't cared about cost. You need communication of information across that payer-provider barrier. We need evidence-based guidance. We know that can deliver tremendous value, but we have a mountain to climb."
"We're coming to a time when it's all about execution," he says. "You're being rewarded now for cooperating with providers, not exploiting your providers. That's a big change."
Otis Brawley, MD, chief medical officer of the American Cancer Society, has no fear of acting as a lightning rod in the ongoing storm of healthcare reform. As a leader in the field of health disparities research and co-author of a scathing book on the topic, Brawley sees the growing costs of US healthcare as a recipe for economic calamity that needs to be changed.
In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. They are making a difference in healthcare. This is the story of Otis Brawley, MD .
This profile was published in the December, 2014 issue of HealthLeaders magazine.
"We have this mind-set that the more medicine we consume, the better off we are. There is harm in that."
Regardless of personal cost, some Americans find it impossible to remain silent when they believe the country is careening toward disaster.
Otis Brawley, MD, chief medical officer of the American Cancer Society and author of a scathing book on what ails U.S. medicine, has no fear of acting as a lightning rod in the ongoing storm of healthcare reform. The 55-year-old has the ability to speak damning truths to powerful healthcare stakeholders, for which he credits his parents, a parochial school education, and the violence-plagued streets of his childhood in Detroit.
"I was one of the few black males in my neighborhood to make it to the age of 35," Brawley says. "I think I just have a strong moral compass. … I see the path this country is going down, and it's bad. We're going to bring the economy of the country down with healthcare, of all things."
One of the central premises of the oncologist's 2012 book, How We Do Harm: A Doctor Breaks Ranks About Being Sick in America, is that the growing cost of U.S. healthcare is a recipe for an economic calamity. If the 20-year trend of increased spending continues, medical services will swallow 35% of the U.S. economy, Brawley says. "That is not sustainable. We cannot exist in the United States if we're spending one-third of our dollars on healthcare."
Brawley is a leader in the field of health disparities research. His views on uneven access to healthcare services in America are both idealistic and pragmatic. "There is basic healthcare that every human being has a fundamental right to," he says, insisting that a combination of technology and cost-effective delivery of primary care and preventive medical services is possible even for people living in poor, remote areas of the country.
"Not only do we have disparities in healthcare, we have disparities in preventive care," he adds, noting the level of health education in the general public is woefully short of where it needs to be for people to appreciate the value of their health. "There are a whole lot of people who don't understand health."
Prevention is sharply undervalued, Brawley says. "Nixon declared war on cancer in 1971. Our investments in cancer research have been better applied in Europe. We're irrational. We have this mind-set that the more medicine we consume, the better off we are. There is harm in that. Overconsumption can be incredibly harmful. Our healthcare system is designed to treat people. There's very little in our system that's designed to prevent disease."
He notes that European physicians' emphasis on prevention is paying huge dividends in lower obesity rates, better exercise habits, and other lifestyle-linked health factors. "We give them a diagnosis, then we treat them for that illness," he says of the American doctor-patient relationship. "In Europe, doctors get paid to consciously help people from getting sick. … We don't pay and reimburse for prevention. We pay for treatment. Preventive services need to be appreciated more."
Brawley has several stern prescriptions to improve the status of American health. First is to promote cost-effective screening techniques, particularly among underserved populations. "At $30, stool blood testing is just as effective as colonoscopy, which costs $3,000 per procedure. Let's get some poor folks some stool test kits," he says. But at the same time, disease screening must be deployed judiciously to avoid false positives and unnecessary treatments, including potentially dangerous surgical procedures: "People just don't understand how screening might not be good for them."
In addition, "high caloric intake, lack of exercise, and obesity" are fundamental challenges to American health. Brawley says obesity has been identified as a cause of a dozen cancers and is a particularly vexing problem: "It complicates treatment of all other illnesses."
Lastly, he calls for increasing daily servings of fruits and vegetables, walking at least four hours per week, and quitting smoking.
"A truly informed consumer would be very, very helpful," Brawley says. "The problem is the people who think they are informed about healthcare who are not."
Two decades after a consumer backlash drove many health maintenance organizations out of business, narrow provider networks are back in a big way.
Market conditions in the healthcare industry are driving the growth of narrow networks, according to a pair of leaders from large employer organizations.
William Kramer
"This time, narrow networks are here to stay," William Kramer, executive director of health policy for the San Francisco-based Pacific Business Group on Health, said this week. "With the early HMOs, some managed care plans were put together clumsily and generated a backlash from some providers and many consumers."
Steve Wojcik, vice president of public policy at the Washington, DC-based National Business Group on Health, says several key healthcare industry stakeholders are embracing narrow networks.
"Employers and health plans in particular have increasingly realized there is a wide variation in healthcare price and quality," and narrow networks have emerged as a market-based approach to maximizing value in care delivery, he said this week.
"We are able to select winners and losers. It's easier for us to do it [than the government programs]. We're looking for the best we can get in terms of price and quality."
Providers and patients also are embracing narrow networks, he says. "The last time with managed care, narrow networks were formed without the support of physicians and consumers," and the recent widespread growth of narrow networks has many healthcare providers clamoring to be included for competitive reasons.
"Price-sensitive consumers are choosing narrow networks on the new exchanges. It's not like someone is forcing them into it… As long as the public sees value in the narrow networks, there won't be a repeat of the managed care backlash."
'Selected for Quality and Efficiency'
Health plans are committed to developing narrow networks, and regulators appear to accept their inevitability in the evolving healthcare industry.
Amy Oldenburg, head of performance networks for Hartford, CT-based Aetna Inc., says narrow networks are generating multiple benefits for health plans, consumers, and the entire healthcare industry. "Narrow networks have become a valuable way to offer consumers a moreaffordable healthcare product, better control medical service costs, and improve negotiating leverage as providers consolidate into sprawling health systems."
Oldenburg says a key difference between the early HMO provider networks and the current crop of narrow networks is an emphasis on value rather than cost, which is why many insurance carriers and employers prefer the term "high-performance network."
"Aetna's performance networks include a special group of providers who have been evaluated and selected for quality and efficiency," she says.
Tyler Brannen, a health policy analyst at the New Hampshire Insurance Department, says the steady increase in healthcare costs over the past 20 years has primed the market for narrow network proliferation.
"In general, narrow networks are an effective tool in negotiating prices with providers," Brannen said this week. Health insurance premiums reached a tipping point for employers and consumers in the years leading up to the passage of the Patient Protection and Affordable Care Act in 2010. "The costs were never as high as they are today," he says.
New Regulations Under Consideration
Regulators are definitely open to the concept of narrow networks, but new network adequacy rules under consideration in states across the county are a major concern for employers, Kramer says. "The biggest threat to narrow networks is an overly protective regulatory environment."
Patients should not be required to "drive too far for needed care," but onerous limits on narrow networks would impede the push for value in the healthcare industry, he says. "The appropriate amount of regulation is helpful, but over regulation could stifle development of these health insurance products, which are delivering value for consumers."
Last month, an independent consumer panel linked to the Washington, DC-based National Association of Insurance Commissioners released a report that includes the results of a national survey about narrow networks and proposed changes in the organization's guidelines for network adequacy rules.
"Although some reasonable trade-offs are necessary to ensure health coverage is affordable, the increasing use of 'narrow networks' and tiered networks has focused additional attention on the regulation of health plan provider networks and the potential financial implications for consumers who receive out-of-network services," the NAIC Consumer Representative says.
Insurance officials from 38 states completed the NAIC survey, which found the main tool regulators use to monitor network adequacy is complaint data.
The survey also showed most states are lagging in their efforts to police narrow networks: "Enforcement actions are rarely taken based on violations related to network adequacy. Only four states reported they usually take enforcement actions against more than one health plan a year due to network adequacy violations."
The NAIC report makes 17 recommended changes to the organization's network adequacy guidelines, including:
Expand the scope of existing network adequacy regulations to include all types of network plans, including health maintenance organizations, preferred provider organizations, exclusive provider organizations and point of service plans.
Establish quantitative standards for meaningful access to care, such as minimum provider-to-enrollee ratios, reasonable wait times for appointments based on urgency of the condition, and distance standards that require access to network providers within a reasonable distance from an enrollee's home.
Require health plan provider directories to be updated regularly and available for both enrolled members and individuals shopping for coverage.
In New Hampshire, insurance officials are conducting an extensive review of the state's network adequacy rules that began last February.
During a meeting of the NHID Network Adequacy Working Group this week, Brannen presented the framework for a new set of rules. The Granite State is seeking to move away from rules that set explicit time and distance access standards for patients to travel to specific classes of providers.
Under the proposed model, the network adequacy rules would specify access to types of services rather than the type of provider who offers those services, he said.
"We're not going to include 10,000 procedure codes within the rules," Brannen says. "The goal is to establish networks that have standards but allow carriers the flexibility to create the most value in their networks." After the working group session, NHID plans to have new network adequacy rules set by early 2016.
In March, federal officials set "reasonable access" as their prime consideration for network adequacy in the PPACA-spawned insurance exchanges. But the Centers for Medicare & Medicaid Services advised health plans that time and distance or other standards are likely in future rulemaking.
Reform Advocate Wary
Harold Miller, president and CEO of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, says narrow networks could undermine efforts to boost coordination of care.
"The dictionary defines a network as a 'group or system of interconnected people or things.' But a health plan's network is typically nothing more than a list of providers," Miller said this week.
"There may be no connections whatsoever among the providers on the list, and a short list of providers chosen based on price may be even less likely to have connections than a longer list… At a time when there is a strong national focus on improving coordination of care, forcing patients to use providers who don't have any connections to each other might result in lower prices for individual services but higher overall spending, since the providers in this kind of 'network' will be more likely to order duplicate tests, perform unnecessary services, and fail to prevent problems that require expensive treatment."
Narrow networks have the potential to rattle care coordination, he says. "If the narrow network is the only choice the patients have, it's even more problematic because, almost by definition, it means that many patients will have to change doctors, which will disrupt continuity of care."
