James Stewart is an internist in McAllen, TX, a rapidly growing city just a few miles from Mexico, far south of where the border lies in most of the rest of the U.S.
But when he woke up one morning a few weeks ago, his life and that of many other health providers with whom he works had changed. Suddenly they were in the national spotlight of the health reform debate, and not in a good way. Even President Barack Obama was pointing to McAllen as an example of how not to provide healthcare.
"We were shocked," Stewart said.
Thousands of miles away, writer and Harvard surgeon Atul Gawande had used the Dartmouth Atlas, a compendium of Medicare statistics, to accuse McAllen of providing too much expensive medicine, implying much of it is unnecessary, at the expense of the federal government. He referred to some of the doctors practicing in McAllen as "entrepreneurial," and echoed that for many, medicine had become like another business run by people interested mainly in profits.
And he did it in The New Yorker magazine, in an article entitled "The Cost Conundrum," which the White House has classified has required reading or those in the health reform debate.
"I am not normally a conspiracy theorist," Stewart said in an interview this week.
But in researching and writing his article, Stewart says, Gawande "totally brushed off the poverty we live with here" and the fact that by the time many people get to a health provider, they are diabetic, morbidly obese, have some degree of organ failure, and in some cases have their first medical encounter in an emergency room.
The thought has crossed his mind that Gawande had an agenda from the start, "motivated by reasons I don't pretend to understand."
Stewart characterized the article as being "intellectually dishonest" and says it did not take into consideration the essential fact that makes providing healthcare in McAllen a lot different than it is in Boston.
Gawande, Stewart says, should have run some risk adjustment calculations for that.
"How did we get in there (The New Yorker) this way when we have 30% of our population with no resources, and so many don't even qualify for Medicaid," he said during an interview yesterday.
Stewart and many of his fellow practitioners from McAllen and surrounding towns joined the Texas Medical Association for a visit to Washington, D.C. this week. They're holding meetings with the Border Health Caucus in an effort to persuade policy makers that there is a much more accurate story about what's wrong with healthcare in the U.S., one told with a visit to south Texas.
Gawande neglected to take into account the fact that hospitals in McAllen and many in the larger county of Hidalgo receive a lot of federal disproportionate share money because of the high number of uninsured, many of them undocumented immigrants.
"How many Medicaid patients we have–that's something that can add 35%," Stewart says. "If you start risk adjusting, all of a sudden, we compare very very favorably, about the same as Grand Junction CO or Rochester MN.
"It's amazing, but though the average age of our population is young, somewhere between 26 and 28…it's a cohort that's already obese and diabetic." Stewart estimated that about 30% of the population has very little care and no resources, and 15% have not been diagnosed, although if they saw a physician, they would probably have "the triad: high cholesterol, diabetes, and hypertension."
True, Stewart says, "this is a very very peculiar and unique area that is clearly an outlier, but to say this area should look like a middle American town in Iowa – this area is never going to look like that. And to have someone parading around the White House saying this is required reading. And now, we're getting in all these blogs. Some of them want to blow up McAllen at this point."
McAllen has a lot of new medical buildings, and there are many providers who have come to the area with new technologies in recent years. There is a heart center, new imaging equipment, and a new hospital. "He cited all the high tech equipment that's available, and there has been a huge amount," says Stewart. "But most of those pieces of equipment have been here less than five years."
They could only have a minimal impact on the Dartmouth Atlas' statistics. "If you want to write an article," he says, "at least keep it in the same time period."
But many of these physicians were recruited to an area that still has an acute shortage of physicians, said to be among the lowest in the country per 100,000 people, Stewart and other McAllen physicians said.
However, Stewart says that all the attention has prompted doctors in McAllen to take a closer look at how they provide healthcare. And while Stewart believes that Gawande's piece is wrong in how much it exaggerates healthcare spending in his area, "it has drawn our attention to areas where there are duplications and inefficiencies.
"Home health, for example, we might use that too much. And we have some other issues with communication, in that one doctor who takes care of a patient has no idea what another doctor has done for that patient," says Stewart. Two hospitals in the area now have electronic medial record systems and a third is launching a more extensive one that can be accessed in physicians' offices.
"I hope Mr. Obama listens when we speak because we have some important things to say," Stewart says. "If he's actually forming policy based on this article, without knowing what we really need, I have serious concerns about healthcare reform. There are very logical and obvious reasons why this area deviates from the norm, and it doesn't have that much to do with overutilization, despite Dr. Gawande's claim."
The outlines of two glowing blue children—Children's Hospital of Wisconsin's logo—stand atop the hospital's new west tower expansion and illuminate the Milwaukee skyline. The new building's walls are covered in over 800 pieces of the hospital's patients' artwork, but that's not where the young patients' influence ends. Every detail of the new wing was designed with its pediatric patients' health, safety, and happiness in mind.
"Children's Hospital's new west tower utilizes principles of evidence-based health care design, which means creating environments that are therapeutic, supportive of family involvement, efficient for staff performance and restorative for workers under stress," Children's Hospital stated in a press release. "The goal is to achieve the best possible results for patients, families and staff while improving utilization of resources. The physical environment represents a key component in providing family centered care in pediatric settings."
All rooms in the 12-story building are private, which reduces the number of patient transports and some infection control issues.
"This new facility was built out of necessity," says Sara Silver-Traband, media specialist at Children's Hospital and Health System. "The previous facility had 236 licensed beds, and our winter census was in the high 280's. Our new facility will have 294 licensed beds with room for additional expansion in the future."
Construction on the west wing expansion was originally slated to begin in 2010, but in 2005 hospital executives realized the facility's patient days had already exceeded projections for growth to 2010 and admissions had increased 13.3% in the past five years. They then decided to expedite the construction process to meet the growing community need. The new wing opened on March 30, 2009. You can learn more about Children's Hospital of Wisconsin's west wing expansion at www.thisismychildrens.org.
One of my favorite responsibilities here at HealthLeaders Media is editing our series of marketing books. The latest, just moments from heading out to the printer, is on community benefit reporting and IRS form 990, Schedule H. The author, Patsy Matheny, LLC, is a real 990H pro—she works with the national organizations that are leading the charge for standardized processes and reporting, including on the new form.
One of the things that I learned while editing this book and during my frequent conversations with the author is that community benefit reporting is much more complex—and strategic—than it appears at first blush. That's evident in Matheny's explanations of what community benefit is not.
It's not just about the tax form
Matheny sets the bar high for marketers from the very first line of the book. "Hospitals must tell their community benefit story to everyone, everywhere, every day," she writes.
Community benefit reporting is not just about the once-a-year task of reporting the data that the new form requires. She's filled the book with examples of how hospitals across the country are going beyond 990H—with regular press briefings, community benefit reports, internal education, and more.
Of course, there is that form—and it is important. "Congress, the IRS, state attorneys general, and local officials want to know how hospitals are fulfilling community benefit expectations," she writes. "Just as important is the quest to gain public trust, as community residents questions whether the hospital is truly serving the needs of the community.
It's not just about marketing
Finally, Matheny writes, community benefit is not marketing. That was the one that most surprised me—until she explained it. Everything I had heard was that marketing should lead the charge of gathering the data throughout the year and communicating it to internal and external audiences—especially the press.
And, I thought, explaining all the "good deeds"(she doesn't like that phrase, either, by the way) your hospital does for the community surely helps improve your image in the marketplace.
"A primary purpose of community benefit communications is to provide education about community benefit: what it is and why it is important to the community and to the hospital," she writes. "Hopefully, community benefit activities will yield a positive perception and image of your organization. But the reasons for these programs is to meet the needs of the community—not to bring market share into the hospital."
It's not just about 'good deeds'
Matheny is also a firm believer that community benefit reporting is not about promoting your good deeds. It's an organization-wide strategy and a business imperative.
"Investing in community benefit activities serves many purposes in addition to preserving tax exemption," she writes. "Mission-driven hospitals operationalize their values and vision through community benefit activities. Activities can positively impact clinical quality and the hospital's business strategy."
It's not just about charity care
If you've looked at some of the reports in the media about community benefit reporting, you've likely noticed that reporters tend to focus on charity care. It's the marketer's job to make sure they see the whole picture.
"Community benefit includes charity care and other means-tested program shortfalls but also refers to a wide range of activities needed to improve or sustain good health for community residents," Matheny writes.
So what is community benefit? Well, the answer to that could fill a whole book (and, in fact, it has filled a whole book).
But for starters, examples of community benefit include:
improving access to health services
reducing geographic, financial, or cultural barriers to health services
enhancing public health
advancing general knowledge
helping train future healthcare professionals
conducting research
maintaining negative margin inpatient service lines to prevent gaps in service
Note: You can sign up to receive HealthLeaders Media Marketing, a free weekly e-newsletter that will guide you through the complex and constantly-changing field of healthcare marketing.
Alere CEO Ron Geraty, MD, discusses how management of preventable health risks and chronic illness could save billions and should be a part of healthcare reform. [Sponsored by Emdeon]
Lost in the public insurance and health reform debate last week was a Medicare Payment Advisory Committee (MedPAC) report issued to Congress that criticized Medicare Advantage for paying private insurers billions more than what the government pays providers through traditional fee-for-service Medicare—despite the fact that many Medicare Advantage programs offer similar services.
The key takeaway as highlighted in multiple media reports is that the federal government will pay $12 billion more to health insurers in Medicare Advantage than it costs to care for beneficiaries in fee-for-service Medicare. As such, some industry observers are recommending that the feds implement competitive bidding for Medicare Advantage insurers.
But there was another idea buried inside the 300-page report that could help Medicare resolve the overpayment issue, weed out insurers that are not providing innovative care management and delivery systems, and gain Democratic leaders' support for the program. What is this magic potion? MedPAC suggested the federal government pay private insurers in Medicare Advantage through quality measures.
As stated in the report, private insurers involved in Medicare Advantage don't gain financially from creating innovative programs. Sure, their beneficiaries might benefit from better programs, but the federal government isn't paying those insurers any more than competitors that are not providing those services.
Instead, the federal government should pay innovative insurers more for improving quality, while reducing payments to those who are offering more expensive FFS-like programs. This is no different than paying doctors and hospitals for providing quality care.
The National Committee for Quality Assurance found in 2008 that only half of the 10 million Medicare Advantage beneficiaries are enrolled in plans with above-average quality rankings. In other words, paying private insurers 13% more than FFS beneficiaries is not improving quality to about half of Medicare Advantage beneficiaries.
The federal government could improve the Medicare Advantage payment system by reemphasizing the goals of the program: financial neutrality, efficiency, equity, and quality. This could happen through care coordination and cost savings, which were the original goals of Medicare Advantage, according to MedPAC.
"Encouraging plans to be efficient is a key element. Plans that are more efficient than FFS Medicare can provide extra benefits while maintaining financial neutrality with FFS. In a transition to new benchmarks, quality improvements could be promoted by paying more for better quality. After the transition, if plans' quality can be measured relative to FFS, plans providing better quality care than FFS would be paid more than FFS," wrote MedPAC.
That is exactly the type of thinking every private insurer in Medicare Advantage should support. Health insurers, such as Blue Cross Blue Shield of Massachusetts, are already testing quality as a payment measure—and that's the right way to go.
Not only does better quality lead to better patient outcomes and lower long-term health costs, but a greater focus on quality could actually help private insurers rescue Medicare Advantage. The Obama administration has already cut Medicare Advantage payments between 4% and 4.5% for 2010 and future cuts are expected.
The president was clear during his campaign that he does not like the program and called it a Republican giveaway to private insurers. But making quality a key determinant of payment level would show that private insurers that remain in Medicare Advantage after the change to quality-based payments are interested in improving beneficiary care. This revamped, quality-driven Medicare Advantage would no longer be considered—fairly or unfairly—a program that was created as a way to please private insurers.
This change to quality payments was buried in a lengthy document, but is an idea that both the federal government and private health insurers should explore further. It just might be the idea that rescues Medicare Advantage.
Note: You can sign up to receiveHealth Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
The average premium for a family plan purchased through an employer last year was $12,680—nearly the annual earnings of a full time minimum wage job, according to a new report, Hidden Costs of Health Care: Why Americans are Paying More but Getting Less, released Tuesday by the Department of Health and Human Services.
For an individual with employer based coverage, this meant that they paid an average of $1,522 on healthcare—not including premiums—in 2006, compared with $1,260 in 2001. When combining these higher premiums with out of pocket costs, the price increased by 30%--from an average of $2,827 in 2001 to $3,744 in 2006.
"Every year, co pays, deductibles and other expenses are taking a bigger bite out of the family budget and the American people are demanding reform,” HHS Secretary Kathleen Sebelius said in a statement.
For preferred provider organization (PPO) plans purchased through an employer, the average family deductible increased 30% in two years--from $1,034 to $1,344. This effect is more pronounced among small firms, the report said, where PPO deductibles increased from $1,439 to $2,367, an increase of 64%.
For families purchasing insurance through the individual market, deductibles were more than two times greater than families in employer sponsored PPO plans. The average deductible for a family plan in the individual market was $2,753 in 2007—an increase of nearly one-third from 2004, when it was $2,081.
For families purchasing healthcare directly from insurance companies in the individual market, deductible costs showed sharp increases. The percentage of families with a deductible of more than $2,000 increased from 41% to 59% in the past four years. About one in five families with employer based insurance also had a deductible more than $2,000 in 2008.
The prevalence of employer sponsored high deductible plans also increased from 2005 to 2008, with the percentage of firms offering such plans rising from 4% to 13%. For Americans receiving coverage through an employer, the average deductible under this type of plan was $3,511 in 2008, while the average deductible in the individual insurance market in 2007 was $5,329.
Higher copayments were evident as well, according to the report. In 2004, only one in five people with health insurance through an employer had a copayment of more than $25, but by 2008 the number jumped to one in three. In comparison, 84 percent of families purchasing coverage from the individual market paid copayments of more than $25.
In a White House press briefing Tuesday, President Barack Obama said he continues to support a public plan option—along with controlling healthcare costs—as part of a broader healthcare reform package.
In the process, though, he is being challenged by the health insurance industry, which is trying to scuttle the public plan idea.
"Our top priority has to be to control costs—and that means not just tinkering around the edges," he said. "It means that we look at the kinds of incentives that exist . . . figuring out how can we make sure that everybody is benefitting from lower costs and better quality by improving practice."
But in addition to the cost issues, "I think it's also wise policy and the right thing to do to start providing coverage to people who don't have health insurance or are underinsured," he said. "That has to be part of reform."
Obama challenged arguments recently expressed in a letter sent by the America's Health Insurance Plans and Blue Cross Blue Shield Association to the Senate Health, Education, Labor and Pensions Committee that said a government-run health plan would "exacerbate the cost-shifting that already occurs from public programs to private payers as a result of the inadequate reimbursement rates that Medicare and Medicaid pay to hospitals and physicians."
Obama questioned why they thought a public plan would it drive private insurance out of business: "If private insurers says that the marketplace provides the best quality healthcare if they tell us that they're offering a good deal, then why is it that the government—which they say can't run anything—suddenly is going to drive them out of business. That's not logical."
Obama declined to say whether he would not support a reform package without a public plan option. "We are still early in this process so we have not drawn lines in the sand other than [to say] that reform has to control costs—and it has to provide relief to people who don't have health insurance or are underinsured," he said. "Right now, I will say that our position is that a public plan makes sense."
The border town of McAllen, Texas wasn't on the tip of anybody's tongue before this month. But a few weeks ago, an article in The New Yorker offered it up as exhibit A of all that is wrong with the country's healthcare system, the ground zero of medicine run amok.
In recent weeks, the president himself reportedly carried the magazine into conference rooms announcing that the article, which was called "The Cost Conundrum", was mandatory reading for anyone who was serious about joining the health reform conversation.
But yesterday, the doctors of McAllen began to fight back. In a news conference in Washington, D.C. directed at President Barack Obama and Congress, they said The New Yorker and the article's author, Atul Gawande, MD, got it all wrong.
Gawande, who visited McAllen some months ago, attributed his statistics on McAllen to the Dartmouth Atlas of Healthcare's compendium of Medicare spending costs throughout the country. It showed, he wrote, that McAllen has the second highest per capita spending of Medicare dollars in the nation, next to Miami where the costs of practicing are much greater. In McAllen, the $15,000 annual spending on medical expenses is twice that of the national average, Gawande said.
A surgeon at Harvard Medical School's Brigham and Women's Hospital in Boston, Gawande blamed McAllen's expensive tab on an assortment of McAllen's physician entrepreneurs who have set up large medical practices that perform a lot of imaging and other tests, and formed hospital companies that keep patients longer than average. In effect, Gawande accused McAllen's medical system of over-utilizing and overcharging the federal government.
But yesterday, at the start of a Border Health Caucus in Washington, officials from the Texas Medical Association and the Hidalgo-Starr County Medical Society, explained that is hardly the case.
And they asked that the president come to McAllen to see for himself.
McAllen is different than any other place in the U.S. It provides healthcare to an extremely needy and poor population, they said, and is just more expensive because the healthcare needs are so great.
In effect, they said, Gawande used statistics that were not risk-adjusted for the severity of health problems in McAllen.
For starters, said society president James Stewart, MD, a McAllen internist, Hidalgo County has the lowest average income of any county in the nation, which means it is the poorest. Because of that, as well as its proximity to the border, it is beset with more than its share of health challenges. It has high numbers of uninsured, high numbers of undocumented immigrants, and a high percentages of people who, when they are diagnosed with an illness, their providers learn they have never seen a physician.
Four out of five patients are eligible for Medicare or Medicaid. It has a higher share of diabetes, obesity, heart disease, kidney disease, and kidney failure.
"There's a feeling here that coming to a hospital means the end of your life, which is a cultural thing," said Carlos Cardenas, MD, a McAllen gastroenterologist and chairman of the board of Doctors Hospital at Renaissance. That keeps many people from seeking healthcare earlier, before the disease process has marched too far along to be easily managed, he added.
"Many of our patients believe that if they were to go on insulin, it's something they don't want to do because they feel that people who go on insulin lose their eyesight, or lose their limbs," he said.
Bottom line, healthcare is expensive in McAllen not because doctors or hospitals are charging more, but because they are providing more of the most expensive kind of care, for patients whose health issues went ignored for decades, until they became acute.
All of that racks up the spending bill for healthcare.
"We have the sickest population in the United States," said E. Linda Villareal, MD., an internist in nearby Edinburgh. She said that for most physicians, the bulk of their practices consists of patients on Medicaid or Medicare.
And there's a shortage of physicians too, she added, saying the McAllen area has the lowest rate of physicians, 116 per 100,000 population, in the entire country and 43% fewer physicians than the U.S. average.
And that means the physicians that are there "see more and more patients in less and less time."
The physicians showed photographs of how many of their patients live, in meager buildings in the colonias where drinking water supplies can easily become contaminated with sewage, and where housing often lacks basic plumbing or air conditioning. Instead of bathrooms, residents use latrines.
Because of that, Stewart acknowledged, hospitals may keep patients in the hospital for a few days longer than they need to be there, because they know if they discharge them to a home that is not clean, their wounds will soon become infected and they may come right back into the hospital with hard-to-treat infections.
In an effort to thwart growing skepticism of a public health insurance option, proponents of the idea are becoming more strident in urging the White House to keep its eye on the prize: Do not compromise in overhauling the U.S. healthcare system so all Americans can have affordable health coverage.
"Without a public option, the parties that comprise America's non-system of healthcare–private insurers, doctors, hospitals, drug companies, and medical suppliers–have little or no incentive to supply high quality care at lower cost," said Robert Reich, former labor secretary and public policy professor at the University of California Berkeley.
"And that's precisely why the public option has become such a lightning rod. The American Medical Association is dead set against it, big Pharma has rejected it out of hand, and the biggest insurance companies won't even consider it. No other issue in the current healthcare debate is so fiercely opposed by the medical establishment and their lobbies [are] now swarming over Capitol Hill," he said.
"Of course they don't want it. The public option could squeeze their profits and force them to undertake major reforms. That's the whole point," he added.
Reich was joined in a news conference yesterday by Jacob Hacker, co-director of the UC Berkeley School of Law's Center on Health, Economic and Family Security, one of the leading advocates of the public plan option.
"We can't afford not to act right now," Hacker said. "We can't afford to cut the heart out of this reform legislation."
To reinforce their points, they cited a new report from Health Care for America Now, which documented that in the last nine years, the cost of health insurance has risen 120% while wages grew by only 29%. Health expenses have been the underlying reason for thousands of bankruptcies, which have prompted thousands of employers to discontinue coverage for their workers and caused many people to delay getting needed care. Lack of health insurance, the report said, causes 22,000 U.S. deaths each year.
Reich and Hacker spoke as the lawmakers and health policy experts are more seriously entertaining a proposal that would substitute smaller health insurance purchasing cooperatives for the public option, an idea proffered by North Dakota Democrat Sen. Kent Conrad.
Reich said "the strength of opposition (to the public plan) along with the president's own commitment to making the emerging bill bipartisan, seems to be leading to some very oddball compromises on the Hill, particularly in the Senate," Reich said.
He urged the president to forget about convincing Republicans to support a bipartisan effort. The public plan option "can pass with a majority vote," Reich said.
In recent days, California Sen. Dianne Feinstein voiced her doubts about a public plan, saying yesterday President Barack Obama may not have the votes for such an ambitious overhaul of the system.
"There's a lot of concern in the Democratic Caucus," Feinstein said on CNN. "If you change the Medicaid rate (to pay for the public plan) it has an impact on California of between $1 billion and $5 billion a year. Now how could I support that? Because it would take down the state."
Just covering the 6.6 million Californians who lack health coverage and are below the poverty line "becomes a huge, huge problem" Feinstein said.
But Reich and Hacker, who yesterday took their views before the House Education and Labor Committee, said Congress and the White House should do what recent polls say America wants, which is to give private health insurance companies some much needed competition.
Reich said the idea getting the most traction this week (smaller private cooperatives that would buy health insurance for its members) sounds like a good idea, but "doesn't have the scale, the authority, or the scope necessary to negotiate better rates for its enrollees."
Smaller cooperatives also would not be able to generate the badly needed outcome data that consumers need to learn what providers and healthcare strategies get the best results.
Hacker and Reich also said that other suggestions, such as states operating their own decentralized cooperatives or public plans, falls apart for the same reason.
Health insurers have said they would accept all members regardless of pre-existing conditions and not charge women more for individual insurance in hopes of derailing public insurance, but Reich said a public plan is a better option.
"Without a public option from the start, private insurers won't have an incentive for a system-wide model to reach these targets," he said.
"It is critically important for the president to make crystal clear to Democrats and Republicans alike that he will not sign a bill that does not have a real public option in it," he added.
The "public option" has emerged as the crux of the unfolding debate over healthcare reform, and is perhaps the greatest challenge for the Senate negotiators attempting to reach a compromise that could actually become law. The notion of disrupting the private insurance market by injecting federal competition has stoked passions on both sides and created the kind of wedge that President Obama and Democratic leaders had sought to avoid in the debate, says this article from the Washington Post.
