Tag Archives: Affordable Care Act

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…”

 

 

Advertisements

Leave a comment

Filed under Healthcare Costs

New Blog Post at The Health Care Blog

My piece on the potential CVS purchase of Aetna titled Why the Potential CVS Acquisition of Aetna is Brilliant, The Law of Unintended Consequences was published on The Health Care Blog, you can read it here.

 

accountablehealth_logo_icon-registered-new.jpg

Leave a comment

Filed under Healthcare Costs

Ten Ideas That Could Fix Healthcare

I’ve written a fair amount over the years about what is wrong with the American Health Care System from ethics to pricing, structure, incentives etc.  So, what needs to be done to fix it? In the end, is there a better way? Listed below are some of the ideas that I think would have a profound impact on lowering costs and improving quality.  None are new, but taken together they could be very powerful:

  1. Get rid of Fee For Service (FFS) medicine. Yes, its cliche but it needs to be gotten rid of and the best solutions are to move the risk to the providers, through global capitation or other bundled payments. Providers will need to put in the resources and expertise to manage this and work to drive the 30% of waste out of the system, thereby potentially making more profit than before.  This is one of the reasons why it is so important to continue the various bundled and capitated payment programs now being implemented by CMS and others.  Providers need to learn, and learn fast, no more sticking one’s toe in the water, take the dive. Another example of how bundled prices or capitation can save money.  If a hospital has a fixed bundled price for knee replacement, how hard is it to bill that?  You don’t need a bunch of billing clerks and others to be sure every item is on the bill the hospital submits, and on the payer side, they don’t need a bunch of people reviewing the hospital bill to re-price the $75 aspirin or remove the extra band aids that were not provided. Who cares whether the hospital used an additional band aid at that point if the service was appropriate and high quality.
  1. Revise the 80/85% Medical Loss Ratio (MLR) requirement.Let’s say you manufacture cars and sell each one for $10,000. Per the MLR rule, you would have to spend $8,500 (85% of your sale price) per car on all the parts and labor, excluding marketing and management. Your cost for marketing and management would come out of the remaining 15% and then whatever is left over is your profit. In this example assume marketing and administration are $1,000 (10%) leaving your profit at $500 (5%) per car. You as the manufacturer now negotiate lower prices on your supplies and it now costs you $8,000 to make the same car. According to the MLR rule, you can no longer charge $10,000 for your car, but can only charge $9,411.76 because the costs of parts and labor must make up 85% of your total charge; and unless your marketing and management fees were reduced, you now would only legally make $411.76 per car.

So why would you get more efficient?  In healthcare, the question is, why as a health plan would you want to improve the health of your members and seek to prevent illness, thereby reducing the 85% you paid for their medical care; ultimately reducing the 15% for other expenses and profit?  Current health plans want to get 15% of an ever-growing number, they want 15% of $10,500 the next year and on and on. This was a fundamental flaw in the ACA. I understand it was to ensure that health plans do not make money by denying services, but there is an upper and lower range to most quality measures not a fixed point and the same goes for healthcare services. Health Plans or those accepting the risk should have a range that their MLR must fall in and/or some way to benefit when they can show that their efforts improved the health of their members and thereby reduced costs.

  1. Target Medication Pricing and the Supply Chain.  We pay way too much and there are so many people in the middle of this that there are multiple opportunities. Here are two.  The first is to allow importation or other means to get access to cheaper medications.  Want to see prices drop fast, that’ll, do it.  We’ll reach a happy medium somewhere below what we pay now and what we allow developing countries to pay for the same medicines. At the same time, we need a new system of medication purchasing and distribution, an Amazon type system that gets rid of the many middlemen adding a piece of cost/profit at each touch point. Think also beyond the pharmacy:  Imagine a system where you go online and take the order direct from the manufacturer through Amazon with a drone delivering the medications to your door. In healthcare medications are one of the best “onion” examples, it just keeps adding layers to the service and each layer adds costs.  Just the fact that companies often hire consultants to review their PBMs who are supposedly getting them the best rate is all you need to know.  In fact, one major corporate chief medical officer told me verbatim “I’m sick of getting ripped off by my PBM.”
  1. Watch out for Aggregation to increase prices versus lower costs. Hospitals are rapidly embracing this philosophy, driven by the ACA, as they are buying up practices, opening free-standing ERs and the like.  It’s amazing to watch as these efforts more often than not increase admissions and costs.  I was at an American College of Healthcare Executives meeting where the panel topic was how hospitals would survive the move from inpatient to outpatient services. In a stunning show of honesty, two of the three senior hospital executives said they were not going to move to a more outpatient based approach and were in fact doing everything they could to increase admissions. They both claimed to have been so successful at pushing people into their hospitals that their inpatient census continued to rise and were at record levels.

Well at least they were honest (in front of a friendly audience). Going back to number one, if they have a fixed price (capitation) for the person or population, they’ll figure out once and for all that the hospital is a cost center and reducing beds, not building more, while allowing services to occur through the lowest cost point in their network is the key to profitability. And yes, maybe constructing less gorgeous and elaborate facilities might lower costs as well. Here’s another classic hospital aggregation approach to increase costs, acquire the oncology doctors and then stop providing infusion services in the clinic. Why?  Because hospitals can charge 2-4 times as much when the infusion is completed in a hospital outpatient or inpatient facility versus the doctor’s office.

  1. Sell healthcare services on eBay or Amazon.I spoke with eBay years ago about this concept, but they were not interested.  Why they wouldn’t want a piece of the $3.2 trillion healthcare market is beyond me, but hey perhaps Amazon? My dream is to go online and schedule my MRI at 3 am for $150 or $200 because the radiologist has an open slot and I am paying out-of-pocket. Sure, I know, what about quality? Well vet the places, provide real outcomes and quality data and publish it.
  1. Narrow the networks based on quality and price.  Most people say they hate narrow networks, and of course when done based solely on price, I hate them too.  But I experienced a narrow network in action long before they came into the lexicon.  As a child, I was a frequent visitor to the ER, I broke a lot of bones and had a few other stitches and scrapes. My father was a Professor of Medicine.  I can’t tell you how many times he narrowed my network and told the physician who was walking in to see me that they would not be treating me. He knew all the doctors, the good and the bad.  I healed up well, thanks to him.  I also experienced issues with poor quality during his later years with Lewy Body Dementia and other ailments. There were more than a few times I wish I could have thrown the doctors out who were suddenly assigned to treat him because he was now covered by a Hospitalist and some specialist he had never seen. They nearly killed him a few times.  As in any field quality varies.
  1. Allow Medicare and Medicaid the flexibility to send patients outside of the United States.  As an add-on to number 2, why not save billions by flying surgical patients or those with Hepatitis C out of the country to get much cheaper services or drugs?  I’m sure after a few flights, the providers and manufacturers will come running back with lower rates. And while we’re at it, how about the prisons, there are a lot of Hepatitis C patients now incarcerated who should be getting treated.

We need to look at issues like Hep C from the patient side. Because of the high costs of the drugs in the United States, there are hundreds of thousands of people who are not getting access to the treatment. Is that good?

  1. Don’t let Congress be bought. Not sure how to do this except through an election, or changing the rules of lobbying while remaining within constitutional bounds, which is well out of my wheelhouse. The healthcare industry uses Congress to protect their interests at the expense of average Americans who are now burdened with excessive costs and poor outcomes compared to other developed countries.
  1. Send Crooks to JailHealthcare has a fair amount of fraud, and you know what, its perpetrated by people, people who hide behind corporations.  Typically, the corporation settles, without admitting guilt of course, pays a fine and moves on.  But what about the people who directed the corporation to do this stuff? If we sent more people to jail, we’d reduce the fraud. Recently, there have been more announcements by the DOJ holding  individuals personally accountable; so it seems this is moving in the right direction.
  1. Invest in our communities and social services. These phrases have become mantras now:
    1. healthcare only accounts for 20% of your health;
    2. your zip code is one of the best indicators of your health status;
    3. how you live determines how you die,

We must invest more in the areas that impact health like community, safety, schools, parks, access to housing and food, but, and it’s an important but, we have to hold the organizations that we fund accountable, too many of them exist to exist and offer limited value. Much of this funding could come from savings in healthcare costs. Together can create healthy communities for all our community members.

These ten ideas are but a start and I am certain that there are many other good and viable ideas for fixing our healthcare system. It’s time we got serious and began implementing more of them.

What are your thoughts and ideas?

AccountableHealth_Logo_ICON-registered-new

4 Comments

Filed under Healthcare Costs

Casino Healthcare – An Interview with Dan Munro

PopHealthWeek-logo-50

I recently interviewed Dan Munro on PopHealth Week and we discussed his book Casino Healthcare. dan-munro-picWe all know about the high costs and poorer outcomes associated with American Healthcare.  In Casino Healthcare Dan explains his view of how our system, one built with Selective Health Coverage is like a casino; or really three casino’s, the insurer casino, provider casino and pharmaceutical casino.

Dan explores each of these areas and explains how they work to maximize revenue through a system of complex transactions and systems.

As an example, on the Provider side Dan explains a little known group called the AMA/Relative Value Scale Update Committee  or “RUC” as its more affectionately known.   Continue reading

Leave a comment

Filed under Healthcare Costs, PopHealth Week