Posts filed under ‘Preventive Care’

What are Accountable Care Organizations (ACOs)?


Hello again!

Since our last blog post, the leaves have turned green, the summer months have passed, and we have just begun to enjoy the crisp autumn air.

Lately there has been much debate surrounding the launch of Accountable Care Organizations (ACOs) under President Obama’s Patient Protection and Affordable Care Act. ACOs are one of the key provisions in the 2010 health reform law designed to help reduce the cost of medical care. There is so much talk about this concept, but what exactly are ACOs?

An ACO is a network of providers and hospitals that share responsibility for delivering healthcare to a minimum of 5,000 Medicare beneficiaries for at least three years. It is based on the idea that hospitals, doctors, and other health care providers should work together to coordinate care for their patients. By coordinating care, the ACO will reduce costs by avoiding unnecessary tests and procedures. Those organizations that produce better outcomes will be rewarded, and for those that don’t, financial penalties will be incurred. In a recent study of ours, we found that with the development of ACOs, providers will take on responsibility for not only delivering actual medical care, but also providing some level of medical management between appointments.

Sounds like a great idea however, a lot skepticism has surrounded the development and launching of ACOs. First, there are very few providers that truly understand the ACO concept. In a recent survey conducted by Beacon Partners, only 15% of 200 provider organizations are “very familiar” with ACOs. Of those 200 surveyed, 92% are in the development stages for an ACO, and nearly all respondents’ budgets are not yet established.

Second, the Centers for Medicare and Medicaid (CMS) have yet to issue the final rules, which will affect the application process that prospective participants have to go through. Prospective participants will need to review the final rules before entering the application process in order to demonstrate their ability to comply with the eligibility requirements. Then, CMS will need to review all applications and offer contracts before the January 2012 launch deadline.

Lastly, the systems that were considered to be the models for a new health care delivery system, namely the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare, have all declined to apply for the ACO program. Hospital and physician groups complained that the program created more financial risks than rewards and imposed burdensome reporting requirements.

Given the series of events surrounding the development of ACOs, it is no wonder that there is skepticism and doubt. Too much confusion and too many barriers surround the development of ACOs, including high start-up costs and regulatory issues. Add to that the refusal by health system role models to apply to the ACO program and you have a complicated situation.

Referring to our last post, this is one way to reduce the cost of care, a much needed move in our unstable economy. As prices for healthcare keep increasing over the year (health insurance is expected to rise 5.4% in 2012), patients deserve access to affordable healthcare. We urge ACO development leaders to address the barriers that health systems are encountering in order to aid in launching a successful ACO program.

Author:  Nicole Victoria

Editors:  Ken Chiang and Robert Kaminksy

 

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October 26, 2011 at 3:52 PM Leave a comment

Trends in Provider Networks


Sometimes it seems that the more things change, the more they stay the same.  One of the trends in the 1990s was to narrow provider networks.  The objective was to drive up quality and reduce the cost of care.  This was achieved by limiting member choice to the physicians and hospitals most willing to negotiate favorable rates and able to achieve quality outcomes.

Insurers quickly learned that members preferred choice to lower premiums.  Therefore, the PPO with its broader provider networks but high premiums grew in popularity compared to the HMO.  Today, 60% of workers are enrolled in a PPO, 20% in an HMO.  10% of employees are enrolled in a POS plan, 8% in a high-deductible plan and 2% in a fee for service (FFS) plan.  In contrast, ni 1993, 46% of employees were enrolled in a FFS plan, 21% in an HMO, 26% in a PPO and 7% in a POS plan.

However, premiums for commercial plans have increased significantly.  Premiums increased from $2,196/$5,791 (single/family) in 1999 to $4,824/$13,375 (single/family) in 2009 (per KFF http://facts.kff.org/chart.aspx?ch=1023 accessed July 18, 2010).  This represents a 120%/130% increase over a 10-year period.  Premiums are expected to increase another 10% this year. (http://www.mcareol.com/factshts/factnati.htm accessed July 18, 2010).

Now, it seems like the pendulum is swinging back.  The significant increase in premiums and the generally-accepted need to rein in healthcare costs has encouraged insurers to offer plans that limit choice of providers in exchange for reductions in premiums.  Typically, insurers are offering plans that reduce the size of the physician network by half and the hospital network by one third.  In exchange, premiums are lowered by 15%.

These plans are being tested in places like San Diego, New York and Chicago.  While small employers are especially interested, even large employers are offering these plans.   National carriers like Aetna, Cigna, the UnitedHealth Group and WellPoint are desgning and offering  plans with limited networks.

The new health care law offers some protection against plans offering overly restrictive networks, said Nancy-Ann DeParle, head of the office of health reform for the White House. Any plan sold in the exchanges will have to meet standards developed to make sure patients have enough choice of doctors and hospitals, she said.

Ms. DeParle said the goal of health reform was to make sure people retained a choice of doctors and hospitals, but also to create an environment where insurers would offer coverage that was both high quality and affordable. “What the Congress and the president tried to accomplish through reform is to transform the marketplace by building on the existing system,” she said.

This approach is not a long-term fix to the high cost of care.  First, these plans only can be offered in geographic regions with enough providers available for insurers to choose between high-quality and low-quality, high-cost and low-cost physicians and hospitals.  With today’s physician shortages, there are not enough physicians available outside of urban areas to support plans with narrow networks comprised solely of high-quality/lower-cost providers.

Second, even in urban areas, there are not enough high-quality/low-cost physicians to serve all local employees.  Competition might encourage high-cost physicians to lower their fees to gain access to narrow-network plans.  However, many physicians do not have the resources or training to improve the quality of the care they provide. 

Finally, not all employees and employers will select narrow-network plans.  There always will be a portion of employees and employers willing to pay for broad networks, no matter how high premiums rise.  Perhaps labor unions and government plans and other organizations that tend to prefer or offer rich benefits will fall into this group.

Therefore, plans with narrower networks that emphasize higher-quality care are one solution to eliminating long-term costs in the healthcare system.  Other solutions are required to achieve true efficiencies in our healthcare system; efficiencies that eliminate unnecessary care through better clinical outcomes and administrative procedures.  Other solutions include, but are not limited to, value-based insurance design, patient centered medical homes, electronic health records and increased use of preventive care. 

I look forward to watching this trend.  Especially as a small employer in an urban area, I am excited by any option that enables me to offer cost-effective benefits to my employees.  I appreciate any opportunity to reduce the cost of benefits while they continue to enable me to attract a strong workforce and maintain an effective and productive workforce.

July 18, 2010 at 10:52 PM Leave a comment

An update to yesterday’s post about obesity and covering preventive services


Yesterday we discussed the positive step forward with payers being required to cover preventive services that are supported by “strong” clinical evidence.  However, we can lead a horse to water but not make them drink.  Without self-discipline and a willingness to take responsibility for our own health, such as losing weight, coverage of these services will not help significantly.  In addition, we all would rather pop a pill than change our lifestyle.

Unfortunately, it is likely to become more difficult to pop a pill to lose weight.  An FDA panel came out against a diet drug called Qnexa Thursday July 15.   The vote — 10 to 6 against Food and Drug Administration approval — dealt a blow to Vivus, maker of the medicine, and many overweight people looking for a new tool to help them shed pounds. It’s also an ominous sign for two other weight-management pills that are likely to be evaluated later this year.

What was the problem with Qnexa? Risks ranging from birth defects for babies conceived when women were taking the drug to an increased heart rate common among people taking Qnexa.

Even though people taking the highest doses of Qnexa had lost more than 10 percent of their weight a year after starting the medicine, the risks were too high, the federal panel concluded.

Qnexa is a combination of two old drugs: the epilepsy medicine topiramate and phentermine, the half of the fen-phen cocktail that didn’t cause heart problems.

The FDA is expected to make a decision on Qnexa by the end of October. The agency usually follows the advice of advisory panels, but not always.

For its part, Vivus said it will work with the FDA to address the questions raised during the hearing. In the next few months, the company expects to have additional safety data from longer-term study of the medicine. It’s unclear if that information will be enough to support approval of Qnexa.

July 16, 2010 at 9:51 AM Leave a comment

Covering Preventive Services and Obesity


Starting September 23, 2010, new private health policies will be required to cover preventive services “that have strong scientific evidence of their health benefits” and eliminate cost-sharing requirements for such services.   According to HHS Secretary Kathleen Sebelius:  “From the Recovery Act to the first lady’s ‘Let’s Move Campaign’ to the Affordable Care Act, the administration is laying the foundation to help transform the health care system from a system that focuses on treating the sick to a system that focuses on keeping every American healthy.”  This requirement was promulgated by HHS, Labor and Treasury departments.

Preventive services such as breast and colon cancer screenings, screening for vitamin deficiencies during pregnancy, screenings for diabetes, high cholesterol and high blood pressure, and tobacco-cessation counseling will be covered under these rules, according to HHS, as well as routine vaccines and certain preventive services for women and children.

Let’s now shift our thoughts to a recent report from the Robert Woods Johnson Foundation and the Trust for America’s Health, “F as in Fat.”   The report contains policy recommendations, aimed primarily at coordinating the government’s response to the epidemic of obesity.  Nearly 10% of health costs are linked to obesity. 
 
The report included the following rates of obesity by state:
 

State Obesity Rates for Adults

1. Mississippi 33.8%
2. Alabama 31.6%
3. Tennessee 31.6%
4. West Virginia 31.3%
5. Louisiana 31.2%
6. Oklahoma 30.6%
7. Kentucky 30.5%
8. Arkansas 30.1%
9. South Carolina 29.9%
10. North Carolina 29.4%
10. Michigan 29.4%
12. Missouri 29.3%
13. Ohio 29.0%
13. Texas 29.0%
15. South Dakota 28.5%
16. Kansas 28.2%
17. Pennsylvania 28.1%
17. Georgia 28.1%
17. Indiana 28.1%
20. Delaware 27.9%
21. North Dakota 27.7%
22. Iowa 27.6%
23. Nebraska 27.3%
24. Alaska 26.9%
24. Wisconsin 26.9%
26. Illinois 26.6%
26. Maryland 26.6%
28. Washington 26.3% 
29. Maine 25.8%
29. Arizona 25.8%
31. Nevada 25.6%
32. Virginia 25.5%
32. Minnesota 25.5%
32. New Mexico 25.5%
35. New Hampshire 25.4%
36. New York 25.1%
36. Florida 25.1%
36. Idaho 25.1%
39. Oregon 25.0%
39. Wyoming 25.0%
41. California 24.4%
42. New Jersey 23.9%
43. Montana 23.5%
44. Utah 23.2%
45. Rhode Island 22.9%
46. Vermont 22.8%
47. Hawaii 22.6%
48. Massachusetts 21.7% 
49. D.C. 21.5%
50. Connecticut 21.4%
51. Colorado 19.1%

The report revealed these key findings: 

  • For the sixth year in a row, Mississippi topped the scales. A 33.8 percent rate of adult obesity made the Magnolia state the worst in the nation.
  • Tied for second were Alabama and Tennessee, followed respectively by West Virginia, Louisiana, Oklahoma, Kentucky, Arkansas and South Carolina.
  • North Carolina tied the only Northern state to make the top ten—Michigan—for tenth place in terms of highest levels of adult obesity, with a rate of 29.4 percent.
  • Mississippi was also worst for obesity among children aged 10-17, with a whopping 21.9 percent of children being seriously overweight.
  • Louisiana, Tennessee, Kentucky, West Virginia and Arkansas were all in the top ten for childhood as well as adult obesity—but Oklahoma, Michigan, and the Carolinas were replaced here by Illinois, Texas, Georgia and, oddly, Washington, D.C. 
  • The states who fared best on adult obesity are concentrated in the north and west, with Colorado, Connecticut and Washington D.C. leading the pack, followed by Massachusetts, Hawaii, Vermont, Rhode Island, Utah, Montana and New Jersey. While it may seem unusual that D.C. would be in the top ten best places for adult obesity and ten worst for children, because it is really a city not a state, it’s hard to make truly reliable comparisons.
 
As 10% of healthcare costs are linked to obesity, the following questions arise:
  • Should health plans cover dietary counseling for members who are obese? 
  • Should health plans provide discounted memberships to health clubs?
  • Why aren’t these services or others aimed at addressing obesity included in the list of preventive services covered under the new regulations?
Of course, this is America.  Why should we take responsibility for our own weight and health when we can have others assume responsibility for us?   Why should we take responsibility for our own weight and health through self-discipline, diet and exercise when we can simply pop a pill?
Another story released today is that a weight-loss pill called lorcaserin not only helps people drop pounds but does so with few side effects.

Lorcaserin is a new type of weight-loss drug that works by acting on serotonin, a chemical associated with feelings of well-being and feeling full, and does not appear to increase blood pressure or cause any other heart problems, according to an article published in the July 15 issue of the New England Journal of Medicine.  The study was sponsored by Arena Pharmaceuticals, of San Diego, Calif., which used its own doctors as part of the study group.

The drug is one of three new anti-obesity drugs being considered for approval by the U.S. Food and Drug Administration. On Thursday, an FDA advisory panel is expected to review Qnexa, made by Vivus, from a combination of phentermine and topiramate. It helped patients in clinical trials lose as much as 13 percent to 15 percent of body weight.

FDA briefing documents posted online Tuesday acknowledged Qnexa’s effectiveness in helping patients lose weight, but said the review panel should take into account a number of potential nervous system and psychiatric side effects, the Associated Press reported.

The third new drug is Orexigen Therapeutic’s Contrave, which is a combination of the antidepressant Wellbutrin and the addiction drug naltrexone.

According to the Associated Press, lorcaserin will be reviewed by an FDA panel in September, and Contrave will be reviewed in December.

Personally, popping a pill is not the answer.  Compliance and persistence rates with pharmacotherapy, regardless of the drug category, are remarkably low.  Popping a pill does not address muscle tone, heart strength, stamina and other benefits of a regular exercise program.  Covering dietary education and support groups, encouraging exercise and a good dose of self-responsibility and discipline are more effective solutions.  Perhaps the new payer regulations will be expanded to include these approaches.

July 15, 2010 at 10:34 AM 1 comment

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