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Health Policy

Health Care: A Mess or New Direction?

A recent New York Times article (3/28/17) noted that Medicaid is becoming the driving force in health care reform.  It has surpassed Medicare in the numbers of Americans covered and provides for the medical needs for one in five Americans, approximately 74 million people of all ages.  This includes 40% of American children.  The proposed Republican health care legislation would reduce Medicaid expansion in light of its growing coverage and end the federal government’s open-ended commitment to pay a significant share of the states’ Medicaid costs.

The Times points out the reluctance of even Republican legislators to place their constituents in jeopardy of losing Medicaid coverage.  These constituents are categorized by the Times as mostly lower-wage workers with incomes up to 138% of the poverty level ($16,400 for a single person).  Legislators are worried about losing treatment for people addicted to opioids, children, people with disabilities, and the elderly in nursing homes.

The picture painted in the Times has led us to reflect on who are the recipients of the benefits of federal health policy.  This, in turn, leads to concerns about economic earning disparities throughout the country.  A Pew Research Center study (5/11/16) reports that from 2000 to 2014, the share of adults living in middle-income households fell in 203 of the 229 metropolitan statistical areas studied, while upper-income rose in 172 and lower-income increased in 160. These areas accounted for 76% of the nation’s population in 2014. With the apparent decline of the middle class comes a decline in employer-based health insurance.  56% of the non-elderly U.S. population obtained insurance via employer-paid plans in 2014, according to the Kaiser Family Foundation.  Kaiser also notes that 77% of Medicaid beneficiaries are in households with an employed worker.  The United Health Group states that of the 324 million people in the U.S, employer-sponsored insurance covers 174 million, Medicaid and related state-based health programs cover 75 million, Medicare covers 56 million, and exchanges cover approximately 10 million. Approximately 28 million people remain uninsured.

The middle-class is shrinking, the Medicaid eligible population in increasing, workers are losing employer coverage or having it reduced, and a sizable portion of the population elects not to join the health care insurance pool.

These conditions demand a change in public policy, not just health care policy.  Recognizing systemic interaction with health care and society makes change all the more difficult.

  1. While household income is rising, it is not keeping pace with the rise in health care costs, including those directly incurred by consumers as out-of-pocket expenses, increased employee contributions, increased employer contributions, and increased government spending on behalf of consumers.
  2. Growing income disparities are a potential issue but difficult to assess. We might be experiencing an increase of both wealthy and poor people at the expense of the middle class, but the two phenomena may not be directly related. The implication for health care is both the unaffordability of health care and the low participation rate of employer-paid insurance for a growing segment of our population.
  3. In addition, there is a growing disparity between the tax-subsidized/employer-insured and the uninsured employed. More employers are limiting or eliminating health care coverage as part of compensation packages.
  4. Our population is aging and consuming more health care. At the same time, fewer numbers of people are working and paying taxes.
  5. Health care technology is proliferating but unlike in other industries, health care technologies tend to increase health care costs. We are not experiencing a Moore’s Law effect in health care.

These are demographics and economic phenomena that should be affecting public policy in relationship to health care.  The ACA/AHCA dilemma seems to be two sides of the same coin, and at best, partial solutions to the problem, and at worst, further corruptions to a complicated, unstable marketplace. The political process is stalemated by partisan anger and ideological rigidity. Health care legislation and public policy are limited focus efforts to deal with only those actions in the reach of legislation while ignoring other major forces in the market, leading to uncertainty about outcomes and higher risk.

Health care is a mess and it appears we are unable to meaningfully address it until it becomes a national crisis with people being hurt along the way.  Smart people are trying to solve parts of the systems and failing.  We have to reflect on Friedrich Hayek’s statement, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Health care is a mess but not hopeless.  However, a new direction is necessary.  We need a new model for health care for the entire country, not because it’s the best way to resolve the issue, but likely the only way.  How do we move from the status quo to something better?  In the simplest terms, it takes vision and leadership. Someone has to envision what a better, more successful, more fulfilling health care future looks like and lead the way.  There are too many legacy-system actors driving health care systems design with special attention to protecting their own interests. Health care providers are working under a hundred year-old business model that suffers from an entrenched bureaucracy, uncertain revenue streams, misguided strategies, bloated infrastructure, and poor business practices.  Commercial insurance has been very selective in who they insure, which has earned them billions of dollars.  Product and service providers in pharmaceutical and device industries have made significant profitable investments in the current health care structure.  All are thoroughly invested in their legacy positions.  Lawmakers are no longer able to come together to represent the common good.  These groups are unable to discuss systemic change, let alone make the necessary changes we need to have a functioning health care system that takes care of everyone.

A new direction has to be established.  Steve Hilton in More Human suggests that a system based on the broad principle of ‘single-payer, market provider’ with real consumer sovereignty, could move health care in a more humane direction.  Nassim Talib in Antifragile highlights the danger and costs caused by treatments that result from our deeply rooted desire to intervene.  Elisabeth Rosenthal in An American Sickness provides a list of shopping tools for consumers to provide control of treatment.  However, how do we get there?  The parameters of the discussion have to be changed.  There needs to be a path that better defines policy alternatives that are understandable to all of us.  Markets in both insurance and health care delivery have to be structured so the consumer can understand differences and make educated choices that serve their needs.  Innovation needs to fuel not just quality of care but cost effectiveness and productivity.

Let’s begin by agreeing on principles, such as who gets coverage. Should be everybody, right? Then we figure out how much it is going to cost. The insurance companies can tell you in days how much it would cost to insure the entire U.S. pool. Then figure out a policy for who needs to pay for it, but do not allow anyone to opt out when they’re healthy and opt back in when they are not. If you opt out of social security, you do not get it later. We pay for many things that are “public goods”, like defense, and do not have an option. Then figure out a way to dismantle the artificial bureaucratic barriers in order to inspire the private sector to compete aggressively for a share of the world’s largest health care market. Finally, make it all effective now, not later, and set up points in time where we can make corrections and course adjustments, because we won’t get this right the first time.

As long as this is a Democrat/Republican, Liberal/Conservative issue, we run the risk of destroying a major part of our economy and quality of life, all for the sake of not being able to work together for a common purpose.

 

Jack Militello and John McCall
University of St. Thomas
Center for Innovation in the Business of Health Care

Health Policy

Trump Care 8 minute videos

The Opus College of Business health care programs is tracking the current activities of Congress and President Trump to “Repeal and Replace” the Affordable Care Act.  OCB faculty and community experts provide a short video discussion about pending issues and progress every few weeks.  The most current videos are provided below:

Week 1

Week 2

Week 3 

 

Health Policy

Medicare Payment for Physicians Comes of Age

Copyright Health Administration Press Jan/Feb 2016, Used with Permission

Financing, Health Policy, Leadership, Operations Improvement

Improved Economic and Employee Health is Goal of Blue Zones Strategies

37740635By Stephanie Hegland, MBA

In this age of health care reform, corporations are looking to innovative care delivery models – such as accountable care organizations and patient-centered medical homes — to bend the proverbial cost curve by improving the health and well-being of their employees. Recently, Kare 11 News profiled a different approach to improving employee health by implementing Blue Zones principles.

Salo, Oberon and NumberWorks – three affiliated Minneapolis contract staffing companies – became the first organizations to seek a Blue Zones Certified designation. “Workplaces with greater well-being have fewer health care costs and are among the best places to work,” said Dan Buettner, founder of Blue Zones, when he introduced the six-month initiative last September. The Blue Zones Certified Workplace designation is his effort to systematically create an environment of health by focusing on four optimal behaviors: move naturally, have the right outlook, eat wisely, and connect with family and friends.

Collectively, Blue Zones principles represent what Buettner has discovered during his global research to identify communities where more people reach the age of 100 than anywhere else, communities which he termed Blue Zones. Continue Reading

Health Policy, Leadership

Checking the vitals of health reform

day2_Capitol_2

“But in Washington, political polarization now stands in the way of what must be the next leg of the health care journey: making improved health and reduced health spending part of our nation’s fiscal strategy.

I am not talking about balancing federal budgets by shifting costs to consumers, providers or the private sector.

I am talking about real reform.”

What does “real reform” look like? Dave Durenberger explains in an opinion piece published at Politico.com.

Financing, Health Policy, Leadership, Operations Improvement

Optum’s strategy for ACO development

docsMinnesota is proud to be the home town of UnitedHealth Group (UHG), the largest health insurance and health services company in the United States. UHG provides services to over 97 million Americans.

On January 31, 2013, Chris Pricco, senior vice president of accountable care solutions at Optum, presented the UHG perspective on accountable care organization (ACO) development over the next 5 years. This event was co-sponsored by the Minnesota Chapter of the American College of Healthcare Executives.

If you were to attend one event that would encapsulate the future of the American health care system – this was the event. Here are some key points from Mr. Pricco’s presentation.

The most important trends in health care delivery today:

  • Providers are under market share, profitability and consolidations pressures
  • Cost shifting is rising to unsustainable levels
  • CMS is radically revising its payment methodologies
  • Commercial providers are implementing aggressive pay for performance systems
  • Providers are beginning to take and manage risk

As providers move into the ACO and quality payment environment, several key strategies must be effectively executed:

  • Redesign the organization’s care delivery model to be attractive to the market
  • Develop methods to manage risk
  • Optimize contracts with payers and providers in the system
  • Effectively integrate all providers into the system
  • Measure and improved consumer engagement
  • Increase effective branding and marketing at the retail level

The need to move from a fee-for-service environment to a value-based payment system is challenging for most delivery systems. However, Optum’s experience is that this shift is happening to all systems today.  Continue Reading

Health Policy

Healthy Minnesota Showcases Community-Driven Initiatives

By Stephanie Hegland

 

What started as a health care policy class last spring for Health Care UST MBA students Laura Templin-Howk and Tina Morey, culminated September 28, 2012, in the Healthy Minnesota: Communities in Action Poster Session and Forum, featuring closing remarks by U.S. Surgeon General Dr. Regina Benjamin. Inspired while being in Washington D.C. during the arguments before the Supreme Court on the legality of the Affordable Care Act (ACA), and encouraged by the legislation’s financial support for proactive, preventive measures (Title IV, Subsection D, “Creating Healthier Communities”), Templin-Howk and Morey sought to showcase Minnesota’s trailblazing community-driven initiatives. And showcase they did, by pulling together 40 examples of why Minnesota continues to lead the nation in healthcare innovation.

Community-led projects throughout the state highlighted the work already being done to improve the health of our communities. Each poster presenter spoke to their projects’ individual mission, success and lessons learned. A PDF of the program which contains descriptions and contact information for each project can be found on the event page: http://www.stthomas.edu/business/degrees/ustmba/healthcaremba/events/2012-09-28_Healthy_MN.html. These projects frequently showcased partnerships between communities, healthcare providers and systems, ancillary providers, community agencies and school districts. Let’s face it; it’s not a secret that greater physical activity, eating more fruits and vegetables, regular health screenings, and increased collaboration between providers leads to improved health outcomes for the state’s population. But how to accomplish these improvements? Therein lies the challenge. And further, how will policies, systems and environmental changes be modified to sustain these improvements?

In addition to the posters, a panel of presenters, moderated by Minnesota Commissioner of Health Dr. Edward Ehlinger, discussed what was learned while implementing the community-led initiatives of Allina’s Healthy Communities Partnership, Blue Cross Blue Shield’s do.town, Hennepin County’s Hennepin Health and New Ulm’s Hearts Beat Back. Dr. Ehlinger kicked off the discussion by calling for a need to balance healthcare investment between treatment and prevention, and to create healthier communities that make it easy for individuals to (make the healthy choice the easy choice. According to Dr. Ehlinger, 40% of behavior that impacts health occurs where we live, work, play, learn and pray. It is these types of initiatives, occurring in the community, which set the stage to change the policies that will lead to improved health outcomes for all citizens.

Some key discussion points addressed by the panel:

  • Push for continued public investment, as provided through the Minnesota Department of Health Statewide Health Improvement Program (SHIP) grants. Government funding allowed projects to experiment with new ideas, share resources/materials developed with interested parties, expand initiatives to worksites and drive community engagement.
  • Encourage collaboration among health care providers that were once perceived as competitors. When providers join together, patients experience comprehensive health care, less duplication of efforts, and improved outcomes at less cost.
  • Move prevention upstream (from a financial perspective). Frequently, the current health care model funds crisis – people enter the health care system through an acute care setting, often when they are ill. Rather, the health care model needs to evolve to greater investment in prevention and community engagement prior to illness. Additionally, the model needs to reward providers for keeping patients healthy, rather than treating the sick.
  • Engage community members – allow them to drive change, rather than be passive recipients. Success was nearly guaranteed when project teams asked community members what changes they wanted to see, what changes they needed in their neighborhoods, and how to achieve sustainable improvements (both financial and tactical).
  • Change social norms around what constitutes healthy behavior – encouraging communities to be accountable for themselves and each other.
  • Recognize roadblocks – time, a health care system that’s based on payment for sick people, prioritizing multiple expensive interventions, and “changing behavior in mid-air while needing to still fly the plane.”

Senator Dave Durenberger concluded the discussion by saying “these projects bring out the ‘we’ instead of me”, and introduced Dr. Regina Benjamin. She complimented the panel and poster presenters for representing many of the strategies outlined by the National Prevention Council. And she congratulated Templin-Howk and Morey for demonstrating the leadership needed to engage all communities toward improved health.