Checkup: Reducing Costs By Paying More

You've all been there. Sitting in a sterile waiting room while you fidget. Finally hearing your name called, allowing you a few precious moments with the man in the white coat. While you are waiting, time seems to drag, but once ushered into the presence of a physician it suddenly seems to kick into overdrive. You can hardly believe that you were in and out so quickly.

It begs the question: can adequate care really be given in the rushed format in which most doctors see their patients?

One answer offered also claims to be a route towards decreasing medical spending. In short, the idea of paying doctors more to take time with their patients (a permutation of the Medical Home concept) to prevent massive costs down the line. It is a grand experiment on the part of a group of state and federal government agencies in conjunction with a number of insurers.

Milt Feudenheim at The New York Times gives us two pages of analysis and commentary on the idea. Here is an illustration of the difference taken from that article:

For want of a careful examination by a primary-care doctor, Mr. Williamson became one of countless Americans each year whose unidentified or under-treated illnesses escalate into medical conditions with catastrophic personal and economic costs. Besides incurring $30,000 in hospital bills paid by his employer’s insurer, Mr. Williamson had to stop working as a customer service representative at Philadelphia Gas Works and go on Social Security disability, at a current cost to taxpayers of $1,900 a month.

With Mr. Williamson’s new doctor, such an outcome would be much less likely.

“I give him my heart and diabetes readings by e-mail and phone, without getting up out of my chair,” Mr. Williamson said. “I can get better directions, at the very moment I need them. It’s life-saving.”

His current internist, Richard Baron, is one of more than 100 physicians in metropolitan Philadelphia taking part in the experiment, which is being conducted jointly by some of the region’s largest insurers. Dr. Baron still gets a fee of only about $64 for each office visit. But his five-doctor group will also receive $200,000 to $300,000 this year beyond their regular fees to keep better track of their 8,400 patients.

“We are trying to do more e-mail care and telephone care, which we haven’t been paid for in the past,” Dr. Baron said.

Insurers are conducting similar pilot projects in at least a half-dozen states, in experiments involving thousands of doctors and nearly 2 million patients. Many more are in the planning stages, at the urging of health policy experts and employers that provide medical benefits.

The big government health care programs, Medicaid and Medicare, are also studying the concept. A Medicaid experiment already under way in North Carolina saved the government program in that state about $162 million in 2006. That was 11 percent less than the state would have spent under the old system of reimbursement, according to an audit by Mercer, a consulting firm.

This looks like an idea that might have legs. It is axiomatic that more careful and comprehensive care should drastically reduce the longterm costs of health care. Whether this approach will yield a solution or not is something only time will tell, but the logic is sound.

Certainly a set of initiatives to watch!

SOURCE: "Trying to Save by Increasing Doctors' Fees" 07/21/08
photo courtesy of Papalar, used under its Creative Commons license

Text For Health, A New Twist on Tech

Technology comes up frequently when you live in the Information Age. On this blog, it rears its head quite frequently as we keep tabs on electronic medical records and online health care tools. Today I will be talking about technology, but not of any kind discussed in my prior postings. You see, today I'm going to take a look at text messaging.

While doing some online research, I ran across an intriguing press release out of the Delaware area. It seems that some doctors are using text messages with excellent results.

People stay healthier when they show up in their doctors’ offices for necessary health check-ups, but it’s sometimes challenging to get them there. Today, one Medicaid program, Delaware Physicians Care, Inc. (DPCI), is using cell phone text messaging to remind members of appointments, let them know if they have missed an appointment and inform them when they should be scheduling tests or additional appointments.

This makes perfect sense to me now that I am aware of someone doing it. A few weeks ago, I was speaking with a friend from DePaul University in Chicago's computer department about online social networking, a pet area of study for both of us. He commented that the younger generation seems to have moved past email and have adopted text messages as their preferred communications mode. If that trend carries over, this could be a program with huge potential.

In the meantime, it has already had verifiable results according to the release:

In the 2006 pilot project with diabetes patients, DPCI found that after six months the percentage of patients receiving a necessary test rose from 52.3 percent to 70.5 percent in members receiving text messages. Furthermore, the results were much higher than the 45.4 percent rate for members of a control group of diabetes patients who did not receive text messages.

A nearly twenty percent increase is nothing to sneeze at. We are a culture that loves immediacy, and using text messages for health maintenance seems apropos. If nothing else, it is an attempt at thinking creatively as we seek solutions to the state of our health care system. Even if it proves not to be viable in the longterm, this still bodes well as a signal that people are actively seeking innovative solutions.

All I have to say is, "Go, Delaware!"

SOURCE: "Text Messaging—a New Way for Delaware Physicians Care to Help Its Members" 07/30/08
photo courtesy of Nesster, used under its Creative Commons license

Maggie Mahar Looks at an Alternate Approach: Value Added Tax

'Tis the season. Election season, that is. With health care hot on the topic list for politicians, 47 million uninsured, and voters in general, it seems only appropos to look at some of the ideas floating up from the Blogosphere.

Maggie Mahar examines a plan proposed by Dr. Ezekiel Emanuel in her most recent post on Taking Note (which is, if you are unaware, a Century Foundation website). In the spirit of George C. Halvorson's exhortation to examine foreign systems in order to inspire the development of a uniquely American one, Dr. Emanuel proposes a Value Added Tax (VAT) to consolidate health care payment. While this may or may not be the correct path to take, the arguments as framed are rather compelling:

Here is how the plan works: Every American would receive a voucher for individual or family coverage. The vouchers would be of equal value and all insurers would be required to offer the same comprehensive benefits package to anyone who applied—young or old, sick or healthy.

Insures would report to 12 Regional Health Boards. Each Board would have a Center for Patient Safety and Dispute Resolution staffed by patients, physicians and lawyers that would receive and adjudicate patient complaints, compensate patients, discipline and disqualify physicians responsible for repeatedly injuring patients, and fund and develop patient safety programs. (Patients not satisfied with the Board’s resolution of their complaint still could sue for malpractice).

The Guaranteed HealthCare Access Plan pledges to cover the 257 million Americans who are not now on Medicare at a cost of nearly $1 trillion. This number includes what we now spend on employer-based insurance, Medicaid and SCHIP –plus what it would cost if the uninsured had employer-based coverage.

People who are now enrolled in Medicaid, SCHIP or Medicare would not be forced to switch to the new Guaranteed HealthCare Access Plan, but if they chose to, they could. For the time being, probably most seniors on Medicare would stay put. But over 15 years, these three plans would be phased out.

It is nice to run across a fresh perspective. Ms. Mahar's post goes in depth examining various permutations of this plan such as

• Why not just raise income taxes instead?
• How is the VAT an incentive to reduce waste?
• How will the Guaranteed Health Access Plan reduce administrative costs?
• How to protect the Health care system from lobbyists.
  
• The creation of an impartial Institute for Technology and Outcomes Assessment to provide impartial testing and review of new drugs and technologies
  

The article is rather long, but chock full of information and links back to relevant source material. Another course on the banquet of "food for thought" that is laid before the American voting public. Please feel encouraged to join the conversation in the comments both here and on Taking Note.

SOURCE: "A Fresh Look at Health Care Reform: Part II" 06/05/08
photo courtesy of Phillip, used under its Creative Commons license

Medicaid Battle: Congress vs. The Veto

A battle over proposed cost saving measure proposed by the Bush administration is brewing in the U.S. House of Representatives. With a veto threat already on the table, things are looking interesting as another face-off between the two branches of government begins.

Jim Abrams gives us the scoop in his article for Time Magazine:

Passage of the legislation in a vote scheduled for later Wednesday would send it to the Senate Finance Committee, where Chairman Max Baucus, D-Mont., is reviewing options for suspending the regulations, his press officer said.

The governors of all 50 states, state Medicaid directors and others oppose the rules, Energy and Commerce Committee Chairman John Dingell, D-Mich., told the House. "They know the devastating effects these rules would have on local communities, upon hospitals, and upon vulnerable beneficiaries." Dingell's committee approved the bill earlier this month on a 46-0 vote. [Emphasis added. -GW]

So far during the current administration Congress has only been able to successfully override one veto from the President: a water projects bill last November. While this does not bode well for Congress in the coming conflict, this issue is far from dead in the water. Legislators, state governors, health care providers and more are coming together in favor of the moratorium because they fear the administrations plans will simply cost shift the burden to the poor and the state governments.

Once again, the Executive branch and Legislative branch of our government are locking horns, this time on one of the top issues of the current electoral season.

The White House, in a statement Tuesday warning of a veto threat, said the bill would "thwart these efforts of the federal government to regain fiscal accountability and integrity in Medicaid." Health and Human Services Secretary Mike Leavitt, in a letter to lawmakers, said it "puts billions of dollars of federal funds at risk, and may turn back progress that has already been made to stop abusive state practices."

But the proposed changes have met opposition from states, health care providers and advocates for poor who say they will shift costs from the federal government to the states and create new hardships for the needy. "Some of these regulations already have become effective and current state estimates of the impact could be as high as four times the administration's $13 billion estimate," National Governors Association chairman Tim Pawlenty, D-Minn., and other governors wrote lawmakers this month. Timely action to impose the one-year moratorium was "critical to avert significant disruptions in coverage for vulnerable populations," they wrote.

So it looks like the fiscal side of American health care rears its head once again. With 48 million people participating in Medicaid over 2007 the impact of this legislation will be felt far and wide. The Time article paints the cost of Medicaid programs at $352 billion, $200 of which was supplied by the federal government, an amount guaranteed to make the public sit up and take notice.

When was the last time you can recall the governors of all 50 states in the U.S. agreeing on something?

SOURCE: "House Challenging Medicaid Rules" 04/23/08
photo courtesy of euthman, used according to its Creative Commons license

Health Care, Pharmaceuticals and Investments

Do you remember the piece I wrote a few days ago about health care costs doubling by 2017? Well, today I am going to revisit that topic by sharing with you an article by Brian Lawler I found on the investment website The Motley Fool.

Why would I share an article on investing here, you might ask? Because it provides a window into some of the economic forces that are driving the health care industry. Lawler references the Centers for Medicare and Medicaid Services (CMS) forecast which shows aging baby boomers creating one of the largest demographic shifts on record. As these boomers begin reaching the age where they will be relying on Medicare/Medicaid, and the attendant prescription drug plans, the pharmaceutical companies will be raking in larger and larger profits. Or will they?

While this forecast for increased prescription-drug spending might be a positive omen for the pharmaceuticals industry, the reality is that if health-care spending does jump to a fifth of GDP, there will be a lot of pushback from government and private health-care payers. For example, as we're seeing now, the leading presidential candidates are agitating to allow prescription-drug importation from less-costly developed countries, or to give Medicare and Medicaid more direct negotiating power over drug prices.

Nonetheless, there are strong demographic trends favoring the pharma industry. With the large dividends that many large-cap drugmakers like GlaxoSmithKline (NYSE: GSK) pay out and the relatively recession-proof nature of the pharma industry, investors should keep a keen eye on the sector in the coming years.

As the citizens of the U.S. push for reform in our health care system, it would be wise to keep in mind that economics and political lobbies are a very large factor in what decisions and legislation actually pass. A quick scan of the dollar amounts donated by pharmaceutical companies and their lobbyists to the current batch of presidential hopefuls speaks volumes about the industry's influence.

I would love to hear some input from anyone with an investment background on this issue. Please leave us a comment if you have views you would like to share.

SOURCE: "Medicare, Health Care, and Megabucks" 02/28/08
photo courtesy of holding.me, used under this Creative Commons license

Health Care 2017: One Dollar Out of Every Five

Twenty cents out of every dollar. One dollar out of every five. Twenty dollars out of every hundred. No matter which way you view it, health costs will almost double by the year 2017. (See the Health Affairs Report.) While impressively large, those figures assume even more magnitude when you realize that they represent a rise to 20% of our nation's gross domestic product.

Aliza Marcus at Bloomberg reports that the increase in spending on health care will be primarily fueled by an aging population -- primarily Baby Boomers -- as they seek treatment and care for chronic ailments such as diabetes and high blood pressure. When you combine this with the projected increases in pharmaceuticals and medical technology it paints a fairly grim financial portrait.

As the baby boomers, born between 1946 and 1964, begin turning 65 and qualify for Medicare coverage, the program's share of the national health bill will rise to 21 percent in 2017, or $884 billion, from 19 percent in 2006, according to the study.

The Washington Post reports the forecast of total health care spending to be $4.3 trillion by 2017, almost double the amount spent in 2007. They also note that while overall spending will increase, the amount spent on private health care will actually shrink while public spending accelerates.

The Wall Street Journal's Health Blog points out some of the efforts being made to slow Medicare spending on Capitol Hill. According to their health care blogger, Jacob Goldstein, the Democrats have tabled the idea of reducing payments made to privately operated Medicare plans, which have a higher out of pocket cost for the federal government than traditional ones.

Kevin Freking of the Associated Press takes a look on the other side of the aisle where President Bush proposes slowing the cost of Medicare by freezing reimbursement rates for the next three years to health care providers such as hospitals, home health centers, and nursing homes. In addition, Bush proposes requiring wealthier Medicare beneficiaries to pay higher premiums on prescription medications.

All in all, it looks like the rate of health care spending will continue to outstrip growth in the gross domestic product. It is hardly surprising that this is recognized as a crisis by most experts and, increasingly, by the public at large.

SOURCE: "Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming To Medicare" 02/26/08
SOURCE: "Health Costs Will Rise to 20% of Economy by 2017, U.S. Says " 02/26/08
SOURCE: "WASHINGTON IN BRIEF: Big Jump Forecast In Health Spending" 02/26/08
SOURCE: "Feds’ Health Spending to Double in a Decade" 02/26/08
SOURCE: "Spending on Health to Rise Dramatically" 02/26/08
photo courtesy of tracy_olson, used under this Creative Commons license

Suffer The Children, Even if They Have Insurance

A staggering new report was released this morning that puts a whole new spin on the subject of children's health care. Nine million children across the country lack health insurance. We have seen those numbers repeatedly in recent news, but are the children with coverage truly taken care of? This report's shocking findings say no, and go on to state that less than half of them are.

The Seattle Times spoke with the study's prime mover:

"I was very surprised - and very distressed - about our results," said Dr. Rita Mangione-Smith, the study's lead author and a researcher at Seattle Children's Hospital Research Institute and associate professor of pediatrics at the University of Washington School of Medicine.

"There are a lot of failures there. And on very basic things that people agree we should be doing."

The nonprofit RAND Corp. contributed to the research, which is published in the New England Journal of Medicine. It was funded by the Centers for Medicare & Medicaid Services, the Robert Wood Johnson Foundation and the California HealthCare Foundation.

The records showed that children got the proper care only 46.5 percent of the time. It relied on records collected between 1998 and 2000 of 1,536 children in urban areas who had actually seen doctors, and for whom researchers were able to obtain one or more medical records.

Experts said it is unlikely that care has improved significantly since then, except for some improvements in immunization rates and asthma care. And almost all the children in this study were insured.

While debate continues over the uninsured youth of America, this study shakes some of the perceived axioms of that discussion. It is tacitly assumed that getting all of our country's children coverage is the answer, but what then? If only half of them get proper care once insured then there seems an even longer path ahead than previously thought.

ABC News zeroed in on the demographic slant:

"We had primarily white children with insurance from middle- to upper-middle income families," said Mangione-Smith. "This is probably a best-case scenario; this is as good as it's going to get."

More than half of children studied failed to receive the care they needed. More than half in a study that had few uninsured, minority, or rural children. So basically of those children who have the best health care protection, the batting average is less than 50%. Dr. Paul Wise, a Stanford University pediatrician and health policy researcher who was not directly involved with the study, finds the results disturbing. "The quality indicators are just so awful that even if they're off by a considerable extent, they still hold up," Wise told the San Jose Mercury News. "The findings suggest that the quality of health care for children is pretty pathetic."

BusinessWeek gives us some more statistics from the report:

Some of the more startling discoveries:

• Sixty-nine percent of 3- to 6-year-olds did not have their height and weight measured at annual checkups, and only 15% of adolescents were weighed and measured, even though one-third of American children are overweight or obese.


• Fifty-four percent of children diagnosed with asthma did not get recommended treatment.


• Sixty-two percent of children were not screened for anemia in the first two years of life, although the test is recommended for all babies.


• Only 38% of children received the proper care for acute diarrhea, one of the main causes of hospitalizations in children under age 5.

As additional information is revealed, the dialogue on children's health care and insurance reform gains more and more urgency.

SOURCE: "Health Care For Kids Falling Short" 10/11/07
SOURCE: "'Stunning' Deficiencies in Kids' Health Care" 10/11/07
SOURCE: "Health Care for US Kids Falls Short" 10/11/07
photo courtesy of ninjapoodles on Flickr under the Creative Commons license

State-Run vs. National

Today on the TPM Cafe blog, health care specialist Maggie Mahar argues against state-by-state health care reform.

The fight for national healthcare reform will be fierce. To stand up to the powerful national interests that oppose reform, reformers will need muscle. This is just one reason why the battle must take place at the national level. Incrementalism -- one state at a time -- is no answer.

Mahar cites other reasons, such as the U.S. having more clout than individual states in dealing with pharmaceutical and insurance companies, wealthier states helping the poorer states, and the low ratings that state-run Medicaid programs receive.

She also brings up the possibility that problems within state-run health care plans will reflect negatively on potential nationwide programs, and give opponents to national health care reform the ammunition to shoot the ideas down.

SOURCE: "Why We Can't Reform Healthcare One State At A Time" 07/13/07
Photo by Chance Agrella, courtesy of Free Range.