Category Archives: Healthcare Costs

Making a Bigger Leap after Coronavirus the New Age of Primary Care and Telehealth

I have been watching our country and the world as we struggle with this pandemic, a truly eye-opening experience for all of us.  May we rapidly slow the spread and heal the sick.

As we consider the longer-term implications, there are a lot of areas (I’ll steer clear of the Government, its response and the politics that we all saw, as well as its major impact) that need work including:

  1. Our public health infrastructure
  2. Our lack of resources
  3. Our disjointed system
  4. Our use of just in time supplies
  5. Our lack of manufacturing and production capabilities here in the United States for basic supplies and medicines
  6. Our focus on revenue generation by elective procedures
  7. Our overall health literacy and many, many more.

While all these issues has been influencing our response, our doctors, nurses and other healthcare professionals and staff, who are truly on the front lines, have been doing amazing work with what they have and risking their lives for us.

What I’d like to discuss is the issue of Telehealth/Telemedicine and its potential to radically transform our care delivery system.

When hospitals and clinics were told to stop doing any elective or non-emergency work, many procedures and visits were cancelled.  Primary care doctors and other specialists are now rapidly running out of cash to keep their offices open because no one is coming in and they are generating less revenue.

A few weeks ago, an email was sent by my provider group notifying me that a follow-up visit with a specialist scheduled for early May, may be done virtually.  I was happy to hear this as my wife, an RN, had recommended that I contact the clinic and cancel it, because there were other more urgent matters that the doctor might need to see.

If we consider that this visit, a post-surgical follow-up could be done virtually and then also in particular looked at the primary care system, how many of these could be done without the need to be seen face to face?  And think of the potential universe of visits with the addition of remote monitoring devices and tools.

While everyone recognizes the need for Telehealth and is rapidly embracing it, the majority of implementations have been similar to our experience with Electronic Medical Records, which was:

Take the paper chart and digitize it. 

So now we take the office as it is and add Telehealth.

But lets think more broadly, imagine the amount of resources that a redesigned practice around Telehealth could free up, from built offices, to exam rooms, to front desk staff, the MA to walk you back to the room, waiting room space, to supplies (wash your hands between seeing each patient), throw that paper towel away, replace the paper on the exam table, to cleaning the room, heating/cooling the space etc.

The net savings and efficiencies of moving to a modified virtual/face to face delivery system are potentially enormous; let alone the reduction in risk to the physicians, other clinicians and staff and those in the waiting rooms that they may bring in or catch an infection from someone else.

These changes would also prepare us for the next pandemic or disaster when we are once again home bound.

This new Telehealth/face to face approach should be the front end and major component of a healthcare system built for the 21st century.  A new primary care approach and a new specialty care approach.

Doctors and patients will have to learn new ways to do things, but it can work, freeing up money and allowing for the built infrastructure to be designed and capable of handling those requiring more critical services; without using that built infrastructure for non-critical needs. It also ensures that services continue, and providers can practice during crises like this.

This is but one of the many changes we should make that include addressing the other issues listed above so this type of situation never happens again.

Rahm Emanuel said, “Never let a good crisis go to waste”. By moving to a hybrid Telehealth/face to face approach we can improve healthcare from a quality, operations, cost and satisfaction perspective, let’s start with Primary Care.





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What the Walmart Decision to Send all Spine Surgeries to Centers of Excellence Really Says

Walmart announced this past year that they were modifying their Centers of Excellence (COE) program and requiring employees to travel to one of their eight approved COEs for Spine Surgery. That raised a lot of eyebrows and interest among other self-insured employers, benefits consultants and of course the healthcare system itself. Walmart did this after finding that perhaps 40 percent of those referred to a COE after having a recommendation for surgery by their local physicians, were not recommended for surgery by the COE.

There are 650,000 to 700,000 spine surgeries performed per year, with around 280,000 to 300,000 being done in an outpatient setting and ( spine surgery is the most highly reimbursed subspecialty within orthopedics. (

Amazingly, 90% of Americans live within 10 miles of a Walmart and they employ about 1.5 million people in the United States ( Think about that! I would assume that somewhere close to 90% of the spine surgeons also live within 10 miles of those Walmart’s’, many of whom Walmart has deemed were potentially doing unnecessary surgeries on 40% of the employees they referred to the COEs with spine issues. BTW the hospitals I’m sure were doing well by these referrals too.Becker’s said they did this to save money (, not mentioning that 40% of the cases were reviewed by the COE and determined to not need the surgery that had been recommended by the local doctor, sure that saved money, but what about quality of life for the patients, and quality in general . Should they just go ahead and let those surgeries be done?

Here are some other outcomes as reported by Beckers Spine Review

1. About 2,300 employees — around half of the Walmart employees who underwent spine surgery or evaluation without surgery from 2015 to 2018 — utilized a center of excellence. During that time, 46 percent of patients underwent surgery and 54 percent received other forms of treatment.

2. The employees who underwent care at center of excellence sites reported shorter hospital stays; the COE employees stayed in the hospital for 2.5 days, compared to 2.9 days for the non-COE employees. Then, 0.6 percent of the COE patients were discharged to skilled nursing facilities, far lower than 4.9 percent of the non-COE patients.

3. Over the past three years, the readmission rate per 1,000 patients in the program was three for COE patients, compared to 65 for non-COE patients.

4. On average, patients who received care at a center of excellence returned to work after 10.6 weeks, which was 2.6 weeks sooner than the non-COE patients.

5. Cost for care was 8 percent higher at the center of excellence — $32,177 on average — compared to $29,770 at the non-COE, but the lower readmission rates, earlier discharge and lower skilled nursing facility use was a “payoff” of the COE model.

So now getting back to something I have seen little attention paid to, what does that say about the state of spine surgery around the United States? Its not as if Walmart has a little footprint around the country.

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My Interview on the “Unlocking Accountable Care” Podcast

I recently had the pleasure of joining Emily R. George on her Podcast Unlocking Accountable Care where I shared my thoughts about giving communities a mechanism to create interventions to improve their own health. In the value-based world, health care providers are trying to keep people healthy and are incentivized to do so, but what if we shift some of that responsibility and those incentive dollars to the communities themselves?

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Looking to the Validation Institute and Validated Programs as an Employer

Disclosure – I serve as an Advisor to the Validation Institute.

Costs for their employees’ health care have continued to rise even as employers have implemented numerous programs and benefit changes, from raising employees’ deductibles and co-pays, to implementing wellness programs.  While employers pay most of the premiums, which now exceed $20,000 for family coverage, employees now shoulder $6,000 per year on average, a heavy burden.

Here is a look at premiums growth over the years from the Kaiser Family Foundation Employer Health Benefits Survey..

Image result for employer healthcare costs continue to rise

So, what’s an employer to do?

That’s where the Validation Institute comes in.  The Validation Institute or VI does three things:

  • Validate
  • Educate, and
  • Connect

This post will discuss Validation and its importance.

No doubt employers have been looking at their health benefits and listening to their brokers or consultants explain how this program or that health plan is the best way to go and will result in better employee health and lower costs or a lower growth in costs. But how do they know? While most have heard these statements year after year, their costs have continued to rise.

The good news is there are solutions that deliver better clinical outcomes and/or reduced costs. Finding and validating the claims being made has been the hard part. The marketing of health care services has been fraught with all sorts of performance claims and many of the studies and white papers used to support them are just plain wrong.

The VI, through its Validation process, handles that process for you. It rigorously looks at claims being made by companies throughout heath care. 

For a company to be validated, it must submit its data.  The source, measures, analysis and results are reviewed to determine whether the claim being made stands up to a rigorous evaluation. Only after a thorough review can a company place the Validation Institute seal on its website and use the VI certification in its marketing materials.

There are four different “levels” of Validation. They are, in ascending order of rigor:


Many companies develop calculators to show prospects their expected savings or outcomes.  If the calculator has been validated, that means  it uses reliable and linked data sources, reasonable parameters and estimates, but allows the users to change certain assumptions. It also means that the calculator produces credible estimates of an intervention’s impact and the intervention has been shown in published literature to be correlated with the impact.

The company may  not have produced a study showing these results, but based upon their calculator and other research, the calculator is likely a credible estimate.

Program Impact – Metrics

In this case the vendor has a credible measure (either from a published source or modeled closely to a standard measure) of the program impact, but the measure has yet to be applied to data from a population receiving the program. The intervention has been shown in published literature to be correlated with the impact.

So, the program has been shown in other cases to be correlated with creating the outcome, they are measuring and doing something similar, but have not yet measured their own results to the satisfaction of the VI.

Program Impact – Outcomes

The vendor has used credible data about a population receiving the program and reliable measures (either from a published source or modeled closely to standard measures) to estimate impact.  The intervention has been shown in published literature to be strongly correlated with the impact.

The program being reviewed by the VI has been shown to strongly correlate with creating the outcomes, and the company has obtained these outcomes on a population with credible data and reliable measures.

Program Impact – Savings

This is the big one. The program has been shown to the Validation Institute’s satisfaction to produce savings.

As a health care purchaser, you want the best for your employees and your company. Look to the Validation Institute and their certified companies to know that what you are implementing for your employees is based on sound studies, measures and/or outcomes and is more likely to do the same for you.

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Two Sides of the Same Health Care Coin

Recently two articles were sent to me by Cliff Frank, a colleague and friend. If you know anything about Cliff, you’ll know that 1) if he’s sending something, it’s worth reading, and 2) he doesn’t mince words. In this case, with regard to the first article, it was one short line:

“Fascinating article about Crap in our own state (Florida).”

After reading it and sending an email in which I discussed the historical basis of this behavior, his response became three short lines:

  • “Just more recycling of S.O.S.”
  • “How much good care could be provided if we got rid of this garbage.”
  • “Shaking my head.”

The Mother Jones article – “Mom, When They Look at Me, They See Dollar Signs” – was an unbelievable read about the abuses being done by substance abuse treatment centers in Florida and around the country. Well, I really shouldn’t have considered it unbelievable. In the early 90’s I got out of that industry quickly after arriving at one of a two psychiatric/substance abuse hospital system whose owners were doing some things that just weren’t ethical or possibly legal, although not to the extent of this article. The examples cited in this article were way beyond the pale:

  • Putting the people up in hotels after being discharged from the treatment center and providing them with drugs so they can then test positive and be readmitted,
  • Paying the patient for coming to the facility and while they are there, paying huge bonuses to patient recruiters, and
  • Charging exorbitant fees.

This and much more was done in an effort to continue to get more admissions and readmissions and to make money. I would expect that most if not all of these patients had some form of commercial insurance, which paid the $3,000 lab fee or $22,000 per day rates that were discussed in the article.

I wondered how many of the insurers or TPAs picked up on the issue or sought to intervene and get the person help at an alternative, better facility. Uncovering things like this or monitoring multiple admissions would be something one would expect from an administrator providing admission reviews, pre-certifications and claims audits. Unfortunately, none of that was discussed in the article.

Cliff’s second article discussed the recent California Federal Court ruling against United Health Care’s Optum Behavioral Health. In the case, Wit v. United Behavioral Health and Alexander v. United Behavioral Health (UBH), the plaintiffs alleged “that they were improperly denied benefits for treatment of mental health and substance use disorders because UBH’s Guidelines do not comply with the terms of their insurance plans and/or state law.”

The Plaintiffs “asserted “two claims: 1) breach of fiduciary duty and 2) arbitrary and capricious denial of benefits.” Specifically, the plaintiffs claimed that UBH breached these duties by:

  1. Developing guidelines for making coverage determinations that are far more restrictive than those that are generally accepted even though Plaintiffs’ health insurance plans provide for coverage of treatment that is consistent with generally accepted standards of care; and
  2. Prioritizing cost savings over members’ interests.

There were all sorts of interesting findings throughout the ruling including that the court found one witness for the Plaintiff to be “…particularly persuasive” and the other “generally credible.” That said, with regard to the UBH witnesses, “The Court found that with respect to a significant portion of their testimony each of them was evasive – and even deceptive – in their answers when confronted with contrary evidence. Therefore, the Court discounts the testimony of UBH’s expert witnesses …”

The Court also found numerous issues in UBH’s claims review and its denial process. Most important, they documented how UBH focused on the acute portion of the incident and not the broader psychiatric or substance abuse issues and their underlying causes, as an evidence based approach would have been expected to do.

The court also found that United had a structural conflict of interest in applying its own restrictive coverage rules because it felt pressure to keep benefit expenses down so it could offer competitive rates to employers.

The Full Court Findings are here.

Mental health and substance abuse care are important components of our healthcare system, with diseases and conditions that impact millions of Americans to varying degrees. These diseases and conditions also are associated with tremendous stigma which causes individuals to not seek care, to wait to access care, and to sometimes even deny a condition. At the same time, the impact of untreated or poorly managed mental illness has a profound effect not just on the person but also on employers. Numerous studies document the powerful impact of mental health on presenteeism, absenteeism and increased medical costs. To get a sense of the magnitude of the problem, check out the costs of substance abuse for your company at the National Safety Council’s Substance Use Cost Calculator for Employers.

The linkages between these two stories extend beyond the fact that they both have to do with mental health; they are examples of why our healthcare system struggles so. On the one hand, the rehab centers sensed an opportunity, based upon expanded Mental Health and Substance Abuse coverage from the Mental Health Parity and Addiction Equity Act and the Affordable Care Act. Which was further amplified by the opioid epidemic, also created by our health care system, to take advantage of a vulnerable population and to maximize the revenues that could be extracted from it.

On the other side a large payer, per the court’s findings, took advantage of a population by denying services and again maximizing their revenue.

I couldn’t help but wonder about the health plans’ and TPAs’ roles in all this. Shouldn’t they be on the lookout for just these abusive cases and doing everything possible to get rid of the vendor behaviors? Shouldn’t they find high quality mental health providers and help their members? Do they not also have some culpability there? While at the same time shouldn’t they be providing needed, evidence based and legally required care? And if the two met wouldn’t we have a better system that rooted out the bad apples and ensured people got the care they needed?

What might you as an employer do about this?  Consider asking your health plan or TPA the following questions or the following recommendations. Be sure to maintain appropriate confidentiality, which may require a third party to conduct the review.

  1. How do they (the health plan or TPA) view themselves or their subcontracted vendor in managing mental health and substance abuse benefits for your employees? Get a feel for who they have working on these issues, their expertise, compassion, empathy; but you’ll need to do more than ask or review their language, you’ll need to dig deeper. As you can see, UBH claimed they had a good process and that it was evidence based etc.
  2. How do they handle denials? What is the process, who reviews the information, what information is submitted?
  3. How many denials have they made? For what services? What percentage of their reviews are denied, by service category?
  4. How many readmissions have there been? How many of your employees were admitted 2, 3, 4, 5 or more times for the same issue? To the same facility or to a facility owned by the same owners?
  5. Do they monitor facilities? How?
  6. How do they contract their network? Have they sub-capitated or carved out their mental and substance abuse care to a 3rd party? Might their payment mechanisms have an adverse impact on getting appropriate and quality care?
  7. What are the requirements for mental health and substance abuse facilities to be in the network?
  8. How do they ensure quality? What reports do they generate? Who looks at them? What are their responses to these reports? Have they ever dropped a facility from their network and if so, why? How many complaints have they had, what were the general nature of the complaints? How were they resolved? (I recall, when I was operating a health plan, our subcontracted mental health company was sending us monthly reports showing no member complaints. They were sending us these “perfect reports” even as our Director of Quality was forwarding patient complaint reports directly to them. We quickly called the mental health company in, after bringing this false reports issue up multiple times, and told them we’d found a new vendor.)
  9. How do they identify fraud, and how much fraud have they uncovered? What do they consider fraud?
  10. Hire a third party to survey your employees, and seek to find out if any are experiencing issues like these.
  11. Perhaps send out a notice to employees and ask them to call the Employee Assistance Program (EAP) if they are experiencing anything like the issues discussed in these two stories, and ask your EAP to be on the lookout for this.
  12. And if you’re really concerned, bring in a third party with expertise in this area to review just what you are getting for your employees.

For more information you can also look to The Kennedy Forum which is “working toward lasting change in the way mental health and addictions are treated in our healthcare system…”



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