Heartland Health Research Institute

HHRI

515-868-0920

“Alexa, diagnose my cough” – Part 2

Last April, I published a blog about potentially using cloud-based voice services, such as Amazon Echo (Alexa) or Google Home, to serve as artificial intelligence (AI) when seeking a healthcare diagnosis based on symptoms we experience. By merely sharing our medical symptoms with a smart-voice service, we could receive a diagnosis that is based on the latest peer-reviewed medical literature available.

As pointed out in the blog, one cautionary note about using such a tool was the ‘legal liability hurdles,’ such as being HIPAA-compliant (a U.S. health privacy law) – making sure that our private-patient information is being securely transmitted.

This particular hurdle appears to have been cleared. On April 4, the publication STAT reported that Amazon unveiled HIPAA-compliant software allowing pre-selected healthcare companies to build Alexa voice-program tools giving patients access to personalized information such as progress updates after surgery, prescription delivery notifications, in addition to learning nearby urgent care facility locations. Health firms can use Amazon’s Alexa Skill Kit to build voice programs that can create products to transmit and receive patient data.

As mentioned in STAT, “The move will embolden hospitals, insurers, and other healthcare firms to expose Alexa to more sensitive details of patients’ lives and medical conditions, and potentially embed the technology deeper into clinical settings.”

Developments like this one may not be highly-visible to the casual observer, however, it might be similar to a simple mist that ultimately results in a torrential downpour, causing a Tsunami of change.  Who knows, perhaps in just a few short years, ‘Alexa’ and other cloud-based services may actually simplify our daily lives that, today, seem complex and frustratingly lost in unchartered waters.

Hold on tight for the next rush of change that will no doubt disrupt how we will eventually live.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

National Trend – Insurance Companies Investing in Affordable Housing Projects

National Trend – Insurance Companies Investing in Affordable Housing ProjectsIn 2016, Dr. Yogi Shah and I co-wrote a blog about moving ‘upstream’ to make investments in population health, more specifically, the social determinants that impact our health. As indicated in our work, when compared to other industrialized countries, the U.S. spends disproportionately large amounts on medical services, while largely ignoring the living environment that greatly affects the health of our population. We spend considerably more for medical care, yet our outcomes compare unfavorably to those countries.

In the U.S., we have done a great job of ‘medicalizing’ our social problems. But instead of focusing on how to pay for medical care, we would be wise to re-direct our limited resources toward improving basic social determinants of health, such as education, housing, nutrition and poverty.

UnitedHealthcare, the nation’s largest health insurer, and a division of UnitedHealth Group, announced this past week that their program of investing in affordable housing projects has now surpassed $400 million. Since 2011, UnitedHealthcare has invested in 80 affordable-housing communities across 18 states with more than 4,500 new homes for individuals and families in need.

It should be noted that the shortage of affordable housing greatly impacts population health. It limits choices about where people live, often pushing lower-income families to substandard housing in unsafe, overcrowded neighborhoods with higher rates of poverty and fewer resources for healthy outdoor and exercise activities. Further, unaffordable housing can prevent people from meeting other basic needs including nutrition and healthcare.

Not to be outdone, other insurers are also making affordable housing investments. The nation’s second largest insurer, Indiana-based Anthem, has committed about $380 million developing affordable housing over the past decade. Kaiser Permanente, a California-based healthcare provider that also sells health insurance, has invested $200 million to address housing stability, homelessness and other community issues. Blue Cross and Blue Shield of Minnesota, HealthPartners and UCare, all in Minnesota, are also supporting smaller projects to do the same. I’m sure there are other insurers making similar investments elsewhere.

As we all know, healthcare payers are having difficulty controlling escalating healthcare costs. One mindset change is to look ‘upstream’ and find local priorities that are linked to poor health outcomes needing attention. According to one study brief, social determinants account for about 80 percent of health outcomes, meaning that the majority of our healthcare costs can be attributed to non-clinical factors.

Research continues to confirm that unmet social needs are associated with higher rates of hospital admissions, readmissions, and emergency room use. One prime example is that supportive housing has been shown to decrease Medicaid costs by up to 67 percent, which includes reduced emergency room visits and inpatient admissions. Such outcomes can positively impact the private-payer ledger by saving monies paid to medical providers who care for the low-income population.

Investing ‘upstream’ is a smart alternative to the avoidable problems that become more expensive ‘downstream.’ It is good to see that more insurers are also taking this approach.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Dependence on China – The ‘Weaponization’ of our Medicine

China Rx - Exposing the risks of America's dependence on China for medicince.Almost five years ago, due to an introduction by a mutual acquaintance, Rosemary Gibson walked into my office for a visit. Prior to our meeting, thanks largely to the internet, I crammed to learn as much as I could about her. Rosemary, I quickly learned, had co-authored four highly-trusted books about healthcare, and I was halfway through her first book, “Wall of Silence,” when we first met. Her research prowess and writing style had me immediately hooked. In a blog that followed our meeting, I called her a healthcare ‘Rock Star.’

China Rx

Five years later, in a recent op-ed piece for the Des Moines Register, Rosemary and I co-wrote an article about a subject that was not on our radar five years before – China’s growing influence on becoming the “pharmacy of the world.” Through Rosemary’s tenacious appetite to reveal important subject matter that affects Americans, she spent a few years researching, and subsequently writing the book, “China Rx: Exposing the Risks of America’s Dependence on China for Medicine.”

This book is full of examples about how and why China was able to cajole the manufacturing of key active ingredients for many of our medicines away from the U.S. and other friendly countries. This is a critical problem today because, as former government and industry officials have shared with Rosemary, “…if China shut the door on exporting many of these necessary therapeutic ingredients to the U.S., within months, pharmacy shelves in the U.S. would be empty and hospitals would cease to function.” Even India, a top country that manufactures generic drugs, is dependent on China for the active ingredients and raw materials in many of the medicines it makes, not only for its own people, but also for exports.

To borrow a term from the ‘Apollo 13’ movie, “Houston, we have a problem.” No wait, we have a BIG problem!

The China Problem

According to China Rx, a major event occurred in the year 2000 that triggered the U.S. to rely more on China for the supply of medications. Congress and the White House agreed to grant China access to the U.S. market, and also permitted China to join the World Trade Organization. Shortly after, China developed the penicillin and Vitamin C ‘cartels,’ by basically replacing American manufacturers by dumping low-cost product in our country. As a result, American manufacturers could no longer compete against China’s government-financed manufacturers. China’s monopolizing behavior is also commonly seen in many other manufacturing products found in other industries.

In 2004, Baxter Healthcare switched suppliers for Heparin, an important blood thinner agent. The new supplier, now China-based, began controlling this market. A contaminated ingredient was found in Baxter’s Heparin product – “a deliberate contamination for economic-motivated reasons.” From this, 250 deaths in the U.S. resulted from this contamination.

Having a high concentration of our medicine coming from just one country, no matter the country, can become a major strategic health and security risk to our population. To function, the U.S. (and any other country) relies on having appropriately manufactured medicine of high-quality with safe ingredients, reasonably-priced, and readily available. In fact, by ceding the manufacturing of medicine elsewhere, any country could become victims of a new warfare that has never been waged in the past – the weaponization of medicine.

In addition to the on-going trade ‘war’ with China, tensions in the South China Sea continues as an international hot spot. During any of these disputes, China could strategically reduce (or cut-off) the exportation of medicine that we depend for our livelihood, including our health and safety.

How Dependent Are We on China for Medicine?

China Rx does a splendid job of explaining how reliant Americans (and other countries) are on China as it relates to our key medicines. In fact, due to poor quality, the Food and Drug Administration (FDA) banned 29 different medicine products being imported from China. However, because the U.S. is so dependent on these medicines, the FDA had to exempt 14 of those products from its own ban. Some of these products included antibiotics, ingredients for antibiotics and ingredients for chemotherapies. This happened because the FDA was concerned about drug shortages in the U.S.

Below is an excellent video from C-Span in which Rosemary Gibson discusses many issues and implications about relying on China to be the sole supplier of many of our medications.  Additionally, two former international trade officials corroborate the findings of China Rx, giving this discussion a troubling, yet powerful vibe about our current reliance on China for our medicine.

China Rx
Rosemary Gibson talked about the risks of the U.S. depending on China to supply the essential ingredients for many of our most widely used medicines.

A stunning finding from Rosemary’s book is that even when American companies have their own plants in China, they frequently do not meet the quality and safety standards that we would all come to expect. China products can be initially cheap because they hope to capture the market and drive their American competitors out. This can be done because the Chinese assume no liability for what they make – a ‘buyer beware’ mentality.  The problem is that most Americans have no idea that the medications they use come from a relatively unregulated country. One hidden price of cheap drugs is the lack of consumer protections. However, once American competitors are no longer competing, the prices can be (and are) arbitrarily increased with no particular reason – other than greed – and control.

A Few Recommendations

For the future, China Rx provides three recommendations to the China problem:

  1. The U.S. must change its mindset about our medicines. Medicine should not be viewed as a ‘cheap’ commodity. Currently, it is. We must view medicine like we do our food and energy resources, such as oil – it should become a strategic asset.
  2. We must have a tracking and forecasting system available of noting where drugs are manufactured and how much supply is available at any one time.
  3. The U.S. must maintain manufacturing capabilities at home. Provide incentives to U.S. manufacturers to keep their plants in our country. We are the ONLY industrialized country in the world that does not have an industrial policy.
The medicine we depend on must be affordable, manufactured safely with trusted third-party oversight, and always be in supply for our country. Rosemary Gibson is on to something very important – indeed, crucial.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

A Reason to Donate Anonymously?

A Reason to Donate Anonymously?When donating to your favorite charities (or candidates), do you usually allow your donations to become acknowledged publicly or do you prefer to give anonymously? Perhaps your answer depends on the specific charity or candidate, or maybe it depends on how much you are donating. By the way, there really is no right or wrong answer to this question. However, you may change your views after reading this post.

What would you think if your donation history to various charitable causes may determine whether or not you will be ‘targeted’ by your local nonprofit hospital to become a donor to their organization?

Nonprofit Hospital Fundraising

Research shows that this happens relatively frequently. In fact, you may even be a patient at the time you are ‘solicited.’ Through highly-defined prospect research results on your past-giving behaviors, you may qualify to receive a visit by a hospital administrator or someone representing the philanthropic arm of the hospital. The donations sought are to supplement income streams hospitals have from other sources, such as private and public insurance payers and money raised through more traditional (and transparent) methods, such as charity golf tournaments, galas, etc.

This issue caught my attention recently after reading a Kaiser Health News article. According to the article, ‘many’ nonprofit hospitals across the U.S. conduct “nightly wealth screenings” of their patients. They use software “that culls public data such as public records, contributions to political campaigns and other charities – to gauge which patients are most likely to be the source of large donations.” According to this article, these programs “are becoming commonplace, particularly among the largest nonprofit hospitals.” This practice is also known as ‘Grateful Patient Programs.’

If Solicited as a Patient, It’s Legal

Protected health information (PHI), which is part of the Health Insurance Portability and Accountability Act, is usually a good thing for patients. In fact, PHI was designed to be given only to authorized individuals and organizations. Yet, since 2013, certain healthcare providers are allowed greater flexibility to use PHI for fundraising purposes, such as the nature of the services a patient received or the identity of his or her physician. According to The Giving Institute, healthcare organizations may use the following patient’s PHI without having their authorization for fundraising purposes:

  • Patient demographic data (name, address, phone/email, date of birth, age, gender, etc.)
  • Health insurance status
  • Dates of patient services
  • General type of department in which a patient is serviced
  • Treating physician information
  • Outcome information
Written patient authorization is required prior to fundraising under the following:

  • Diagnosis
  • Nature of services
  • Treatment
The 2013 change in federal health privacy law made it easier for hospitals to target their patients for donations, enabling the hospital records department to share with staff fundraisers some personal details of patients, as outlined above. When admitted to a hospital, patients (or a family member) are required to fill out paperwork permitting the hospital to use PHI for fundraising purposes. The federal law does require hospitals to inform patients they have the right to decline being solicited, but few patients are aware of this due to the bevy of legal paperwork they are given during the time of admittance.

Major Des Moines Medical Centers?

This rather opaque process of soliciting qualified patients for donations prompted me to contact the media relations departments of Des Moines’ two largest hospital systems: Mercy Medical Center (now MercyOne) and UnityPoint Health Des Moines. As of this post’s publication, neither organization has responded to my emails to confirm whether or not they have such a program in place.

Hospitals are granted a tool that allows them to legally solicit donations from patients and family members, especially when they are held ‘captive’ within their facilities due to medical purposes. The Kaiser article does raise a question that many of us may ponder: Will care be affected depending on whether a large donation is possible or not? In other words, could we potentially have a two-tier care system, one for the wealthy and one for everyone else?

This fundraising approach does allow one to reason that perhaps more of our future personal donations should be made anonymously.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

It’s Time for ‘Health Literacy,’ but What is It?

Let’s be honest, healthcare is complex. It affects each of us in many ways, some more than others. Despite our desires, we cannot ignore it and assume it will go away, it just won’t. Ben Franklin once wrote, “Nothing is certain except for death and taxes.” Well, let’s tack an addendum to that quote with the following: “Nothing is certain except for death, taxes and healthcare fatigue.”

Healthcare fatigue?

In its simplest form, ‘fatigue’ describes “extreme tiredness resulting from mental or physical exertion or illness.” Fatigue is found in healthcare at many different levels. We are now beginning to learn more about how medical providers – physicians, in particular – are increasingly experiencing job ‘burnout,’ a problem so alarming that a recent Harvard report is calling it a public health crisis. According to this 2018 survey, 78 percent of over 8,000 physicians polled ‘reported feeling burned out at least sometimes.’ Another recent Medscape study revealed that nearly half of 15,069 responding physicians reported they were burned out – female doctors reported at a higher rate than their male counterparts.

This horrific finding is extremely troubling for the physicians (and family members) who fight three main symptoms:

  1. Emotional exhaustion.
  2. Sense of depersonalization and disconnection from work.
  3. Feeling a lack of efficiency at work.
Equally disturbing is how provider-fatigue may adversely impact patients who rely on their doctor’s clear judgement when receiving appropriate care. If one physician is battling a form of ‘burnout,’ the domino-effect on patients from that doctor becomes a multiplier effect.

Patients, for their part, must seek healthcare by using a labyrinth of passages or paths that are not often intuitive, especially when acute or chronic health conditions undermine the decision-making process.  Patients have their own form of ‘healthcare fatigue.’ They must arm themselves with tools and resources needed to make informed decisions regarding preventive, routine, emergency and end-of-life care. For this to be successful, patients must become health literate.

Health literacy is about having the ability to make informed choices in any healthcare situation. Due to the complexity of the U.S. healthcare delivery system, most Americans lack the information-gathering and decision-making skills to effectively cope with today’s complexities. Jo Kline, founder of the Iowa Institute for Health Literacy, succinctly states that “The public has never been offered the health literacy tools they need. Teaching the skills of informed decision-making to those directly affected – such as 133 million Americans of all ages with chronic medical conditions – is a long-overdue first.”

If we believe our interactions with medical practitioners are a ‘monologue,’ meaning that the practitioner talks and we should only listen, we are grossly mistaken. Instead, we should be having a ‘dialogue,’ in which a healthy conversation develops between the practitioner and the patient, allowing for both sides to clearly understand what the other party is saying. Literate patients and family members must not be afraid to ask questions – and then ask more. This is, however, just one part of being health literate.

Kline explains in her recent press release, “The state of Iowa mimics what America at large is facing: aging demographics and shrinking healthcare resources. Ten thousand Baby Boomers turn 65 every day and Iowa will have an additional 158,000 seniors by 2030.” During this same time period, Kline indicates that “one-third of healthcare professionals are retiring, so the workforce will shrink and waiting times will grow – for patients of all ages.” With this inevitable challenge, being health literate is imperative for all of us.

How can employees and their family members become more health literate? A great way to start is by attending Kline’s first-in-the nation seminar on Wednesday, March 6, at the FFA Enrichment Center (DMACC Campus) in Ankeny. From this, you will discover the fundamentals of health literacy, such as reducing the risks of polypharmacy with an annual “Brown Bag Checkup” of all medications, keeping your medical history up-to-date for any new provider or emergency, and understand the vital role that palliative care can play in treating any serious illness.

Being health literate is extremely important to each one of us. We will be better equipped to recognize when, how and where to access, process and understand basic health information and services needed to make informed decisions in a particular healthcare situation.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Wisdom We Can All Live By – From Dr. Martin Luther King Jr.

Every now and then, I will stumble across a poignant quote with sage advice that cuts deeply to my inner being. A powerful quote can become so clear, as if it was only directed to me. Truth be known, the following timeless gem should resonate with each of us, as it provides the essence of why we exist.

You may be 38 years old, as I happen to be. And one day, some great opportunity stands before you and calls you to stand up for some great principle, some great issue, some great cause. And you refuse to do it because you are afraid… You refuse to do it because you want to live longer… You’re afraid that you will lose your job, or you are afraid that you will be criticized or that you will lose your popularity, or you’re afraid that somebody will stab you, or shoot at you or bomb your house; so you refuse to take the stand…Well, you may go on and live until you are 90, but you’re just as dead at 38 as you would be at 90. And the cessation of breathing in your life is but the belated announcement of an earlier death of the spirit.

– Martin Luther King Jr. (From a November 5, 1967 sermon)

Are Generic Drugs ‘Reasonably’ Priced? Perhaps Not

This coming January, I will have spent 35 years in the insurance and healthcare arena. During this tour of duty, I have learned that nothing surprises me anymore, especially as it relates to the trust we blindly give to those who appear to act in the ‘best interest’ of the patient and general public.

Here is yet another example – generic drugs and how they are priced.

Generic medications have proven to effectively keep our drug costs low after patent protection expires.  As proof, 90 percent of all prescriptions written in the U.S. are for generic drugs, yet generics comprise only 23 percent of total Rx costs (Source: Association for Accessible Medicines). Yet, new breaking developments suggest that, for at least 300 generic drugs, we are unsuspecting prisoners of a generic drug “cartel” that keeps generic drug costs higher than necessary – thanks largely to a friendly game of price fixing. The adage, “You scratch my back and I’ll scratch yours,” seems to apply quite well in this situation.

A December 10 article in Vox by Dylan Scott, “A groundbreaking antitrust lawsuit is ensnaring the generic drug industry,” explains how at least 16 generic drug companies allegedly rigged the market and fixed prices for roughly 300 generic medications. This article references a recent Washington Post piece that reveals most every state attorney general has now joined in a lawsuit on this ‘itchy’ topic. Have generic manufacturers become the new ‘Pinocchio’ with regulators and the general public?

When our non-healthcare markets are healthy and working appropriately, we can all benefit by paying lower prices for a higher-quality product (or service). However, in healthcare, when left unchecked, simple greed erodes the trust we have placed in a system we believed would ‘fix’ our cost conundrum. With this type of market behavior, American economic theory about consumer choice and market-based pricing mechanisms will find tough sledding in any market, especially with healthcare.

We can do better.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Hospital Patient Safety Culture Does Matter

A few years back, I walked into an Iowa healthcare executive’s office to discuss an idea that I thought carried a great deal of merit regarding patient safety. The executive politely listened to me. The idea was both simple and very intuitive. Because the mission of this particular healthcare organization is to promote quality and safe care, I was assuming it would be open to potentially embracing this approach in Iowa.

This idea was generated from the Hospital Survey on Patient Safety Culture, which is a staff survey designed by the Agency for Healthcare Research and Quality (AHRQ) to help hospitals assess safety culture within their own walls. When you think about it, who better to ask about quality of service within a hospital than the frontline workers themselves – staff, nurses, technicians, etc.? In fact, a 2017 report in BMC Health Services reported that hospitals with “higher staff perceptions of safety culture were associated with better overall safety, as measured by a composite of reported harms and patient satisfaction.” Additionally, when noted physician, Marty Makary and his staff performed a joint study with risk management firm, Pascal Metrics, they found “hospitals that scored well on the staff survey had lower rates of surgical complications and other important patient outcomes.”

The simple idea?  Have ALL Iowa hospitals undertake this survey every other year with the results becoming public. After all, this approach would tie nicely with the mission of the organization I visited that day. Including outpatient surgery centers would be ideal.

The response I received from the medical executive was not what I had expected. To paraphrase his feedback: “These surveys usually occur in larger eastern (U.S.) hospitals, but not in small rural hospitals, like Iowa. The data findings from Iowa hospitals would not be statistically relevant…” I was absolutely floored when I heard this half-baked argument. What this executive failed to understand – or more likely, refused to understand – was that such surveys can be used within hospitals REGARDLESS of employee size. To be effective, the two critical cautions for this survey are:

  1. Mandatory participation of all staff within each department
  2. Assure staff that honest responses are extremely important and any retributions for this honesty will not be tolerated.
Frankly, if a hospital is large enough to care for patients, then it should be large enough to be surveyed on how it reports its organization’s patient safety culture. Clearly, the executive did not want this to become public knowledge, as the results could undermine the trust the public places within each of the state’s 118 community facilities. For those hospitals that do utilize the culture of safety survey, their identity is hidden from the general public. In fact, AHRQ shared with me that “Hospital-identifiable data from the Hospital Survey on Patient Safety Culture Comparative Database are not available for public reporting purposes per the data use agreement AHRQ has with each hospital that voluntarily submits data to the database…reporting at state level can also put hospital confidentiality at risk especially in smaller states.” This means that we don’t even know how many hospitals participate in any given state. How’s that for transparency?

Safety of care, I have learned, can be more about the optics (carefully spoon-fed to the public) than actual substance. For example, developing safety awards for hospitals who report few errors can dangerously promote behaviors to withhold adverse event reporting, a solemn fact that I have learned from trusted, first-hand sources (in Iowa). Although well-intentioned, poorly-constructed safety awards can manipulate the system for a desired outcome – giving the public a false sense of security on receiving safe care. Manipulating sacred patient trust is a gross violation of professional ethical codes.

The November issue of Health Affairs dedicated the entire publication to the latest findings on patient safety-related matter. One article by Aiken, Et al., “Nurses’ And Patients’ Appraisals Show Patient Safety In Hospitals Remains A Concern,” summarizes the process of surveying hospital nurses from 535 hospitals in four states (California, Florida, New Jersey and Pennsylvania). The survey took place in 2005 and then again in 2016. In addition, patients from those hospitals were surveyed during that same time period. The bottom line is this: “Clinical work environments in most hospitals did not improve between 2005 and 2016.” The concluding summary of this article was to the point: “Our findings confirm that patient safety remains a serious concern. Failure to substantially improve clinical work environments in most hospitals, as recommended by the Institute of Medicine, may be hampering progress toward improving patient safety.”

As stated in our ‘Silently Harmed’ white papers, preventable harm in healthcare is a public health crisis, and much of this problem stems from organizational systems tolerating (or hiding) poor safety cultures. I received a very descriptive comment from Donna Helen Crisp, who spent eight years writing a book about what happens in hospitals when things go wrong. In North Carolina, Ms. Crisp served as a nurse, nursing professor medical ethicist, dying patient, and author (Anatomy of Medical Errors: the Patient in Room 2). As an advocate, Crisp helps raise awareness about preventable medical errors and adverse events so that they can be eliminated – or at least mitigated.

Her extensive background provides a wealth of perspective that lends great credence to this topic. As she indicated, “All the time and energy spent arguing about how many medical errors occur, or how patients abuse the legal system to make money, or why doctors and surgeons deny and delay the truth, or how dying patients should not be counted in medical error statistics – all this time and energy would be better spent by pursuing the following:”

  1. Changing the medical paradigm by putting patients and families first.
  2. Learning to see and accept the problems inherent in hospital care.
  3. Developing core values to address and decrease medical errors.
  4. Improving patient safety through transparent care.
  5. Supporting clinicians who want to be truthful but fear retribution.
  6. Training clinicians how to ethically support patients.
  7. Training clinicians how to identify and ameliorate suffering.
  8. Making safe care a higher priority than training doctors or corporate profit.
Because most medical errors go unreported, it is necessary to establish baselines, however they are determined, to track future progress on eliminating these errors. But we can learn a great deal by heeding Ms. Crisp’s words.

I only hope this same courage allows others who serve in crucial roles throughout our healthcare delivery system (including those we elect) to proactively do the right thing and provide the transparency in care that we so desperately need.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Secret Contracts Between Insurers and Providers – Who Benefits?

Most of us have insurance coverage – whether it be through an employer, purchased individually, or accessed through Medicaid or Medicare. This coverage is commonly administered by a third-party organization, such as an insurance company, or a private administrator contracted by Medicaid and Medicare.

Insurers serve as a proxy for their policyholders by being given cryptic authority to act on their behalf in the purchase of healthcare. As the surrogate for those who pay insurance premiums, insurers negotiate the prices and terms of access with doctors and hospitals who then provide healthcare services to their insureds.

Do policyholders know the specific terms that insurers negotiate on their behalf? Most often, they do not.

Opaque Contract Terms

Agreements between insurers and their contracted in-network providers are kept under lock and key, leaving out those that actually foot the bill – the REAL payers. Similar to most other industries, healthcare is a profit-driven sector. The terms of provider agreements become THE economic advantage that insurers and their contracted providers have within the local marketplace they operate. Opaqueness of these terms cement any competitive advantage for their own interests.

A fundamental question to ask: Should the REAL payers of healthcare, e.g. the policyholders, have access to the specific terms of these agreements? This is a valid question, especially given the latest Federal Trade Commission investigation of hospital contracts.

By far, the U.S. spends more per capita on healthcare – almost 20 percent of its gross domestic product – compared to other developed countries in the world. This mammoth spending is not because Americans consume more healthcare per capita than their foreign counterparts, but rather, the prices Americans pay are often grossly higher than elsewhere. Part of this has to do with opaque prices and terms REAL payers must accept through their hired surrogates, the insurers.

Market Power vs. Patient’s Best Interest

Through a ‘keyhole,’ a September article in the Wall Street Journal (WSJ) attempted to peek inside the terms some insurers have with their contracted healthcare providers. What they found was actually not too surprising. Hospital systems attempt to exercise their market power with insurance companies by demanding contract agreements that prevent having competitively-priced networks within the insurance marketplace. Depending on how limited a network of providers will be, the cost savings can range from three to ten percent – possibly more.

Largely known as anti-steering clauses, these restrictive hospital-insurer agreements secretly limit insurers from steering their policyholders to other providers that improve the quality of care and keep costs lower. Even large purchasers that should have market clout, such as Walmart Inc. and Home Depot Inc., are kept in the dark from such agreements when trying to incentivize their employees to use high-quality/low-cost providers.

Other provider contracts may be constructed to not allow insurers to lower copayments to incentivize patients to use less-expensive or higher-quality providers. Additionally, hospital contracts might stipulate that the insurer will always keep that hospital system within the preferred network – even though their prices may be considerably higher than other competing hospital systems. Do we have such contracts in Iowa? Hard to know.

For their part, insurers will concede to these demands because they desire to attract more policyholders to enroll in their health plans. Having more policyholders can provide added leverage for insurers to negotiate more favorable contracts in the future, while hospital systems continue to grow by purchasing other types of providers. A recent Journal of Health Economics study found that the price of physician services increase an average of 14.1 percent after being purchased by hospital systems. The ‘dueling leverage’ escalation seldom benefit the REAL payers, who will eventually pay the inflated cost through higher premiums. This perverse incentive happens without the REAL payers having this knowledge.

To justify this behavior, hospitals say patients should be able to choose their healthcare provider without having financial pressure from their insurers or employers.

Secret Agreements Now Challenged

Lawsuits are occurring around the country regarding these restrictive contracts. The Justice Department is suing a large North Carolina hospital network, Atrium Health, because it “uses its market power to impede insurers from negotiating lower prices with its competitors…”. Sutter Health, a large hospital system in northern California is being sued by the California attorney general for anticompetitive practices.

On October 10, Iowa Senator Charles Grassley, Senate Judiciary Committee Chairman, sent a letter to the Federal Trade Commission to investigate whether contracts between insurers and hospital systems are limiting competition and pushing up healthcare costs. This letter was prompted by the WSJ article mentioned earlier.

Pending review by the FTC and the various lawsuit outcomes, what recourse do the REAL payers of healthcare around the country have to keep costs more affordable?

Solutions?

According to a November 4 WSJ article, watching the state of North Carolina might be a good start. North Carolina’s employee health plan covers about 727,000 people, which includes teachers, university workers and state police. North Carolina’s state treasurer announced in October that it wants to pay hospitals’ and doctors’ rates that are pegged to Medicare’s reimbursement schedule. The state treasurer said the new rates – beginning in 2020 – would average around 177 percent of Medicare’s fees, which is lower than the current reimbursement average of 213 percent – projecting an annual savings of $300 million. The N.C. hospital community is predictably pushing back to keep this from happening.

According to an article in ProPublica, the state of Montana pursued a similar approach a few years ago, and has found the program is now saving healthcare costs for its employees (and taxpayers).

Employees and their employers must be resolute and insist that all insurance contracts are in the best interest of those who are the REAL payers of healthcare. As suggested in a recent Harvard Business Review article, employers may consider banding together to establish purchasing alliances. This is not a new concept, but the above circumstances may warrant a rebirth of this approach.

REAL payers do have legitimate leverage in the healthcare marketplace – they just need to act. Otherwise, we can only speculate what is hidden behind the keyhole.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Are Hospitals Adequately Accredited to Allow for Safe, Effective Care?

When it comes to hospital oversight, we assume the care we receive will be safe, effective and appropriate. But is this assumption fact or fiction?

Most of us like to be assured that when purchasing a product or service, we will receive the best value possible for the money we spend. To do so, we typically perform background “research” on the desired product(s) to help us become more comfortable before spending our hard-earned money. From this, we hope the purchase will at least meet our desired expectations.

To save us time, or at least help augment our individual sleuthing methods, we often rely on employing outside research organizations that have extensively researched thousands of products on our behalf. Consumer Reports is one excellent example. Another is the Good Housekeeping Seal of Approval.

Good Housekeeping Seal of Approval

The Good Housekeeping “stamp of approval” assures the general public that, once approved, a product will meet consumer expectations, as intended. In fact, the Seal includes a limited two-year warranty to financially protect the consumer should the product be “defective.” To earn the seal of approval, organizations must request a review of their product(s) from the Good Housekeeping Institute, which will then have their own scientists and engineers rigorously evaluate the product in their labs. If approved, a product is allowed to advertise the coveted seal on its package. Good Housekeeping serves as an independent, third-party that protects the public from inferior products, promoting a marketplace place built on trust.

Comparing Hospitals

How do you know a particular hospital delivers appropriate quality care that is safe when you or a loved one need it? Hospitals, through various national organizations and publications, are ranked annually to assist patients and their doctors to make informed decisions on where to seek the most appropriate care. For the period 2018-19, U.S. News & World Report performed their 29th annual Best Hospitals rankings. The rankings are made for 16 different specialties. Three other prominent hospital rankings are:

It is important to note that each ranking applies different methodologies when comparing hospitals. Because of this, a hospital may perform well in one ranking, but look considerably less favorably in another ranking – during that same year. Consequently, such disparate results can be very confusing (and frustrating), both for the general public and for hospitals. Additionally, some ratings organizations won’t disclose their methodology on the grounds that it is proprietary. If the methodology isn’t completely transparent, then one should be skeptical of its rankings.

Hospital Accreditation

The public generally assumes that, beyond rankings, the quality and safety of each hospital is appropriately inspected, monitored and highly regulated by a government agency and/or independent organization that is sanctioned by the government to perform this oversight. For the most part, this is true. The Centers of Medicare and Medicaid Services (CMS) grant accreditation authority to CMS-approved accrediting organizations to identify deficiencies in healthcare delivery and help providers correct those deficiencies. For each hospital, accreditation serves as a fundamental process to assure a high baseline level of healthcare quality is provided to patients. For hospitals that serve Medicare patients and are eligible to receive Medicare payments, each hospital must take a great deal of preparation time (and pay accrediting organizations) to obtain this accreditation every three years (or pass state inspections).

On the surface, this all sounds reassuring to the public. However, it appears, thanks largely to a 2017 Wall Street Journal (WSJ) article, in addition to a recent study by Lam, Figueroa, et al., in BMJ, that accreditation may not be as rigid and transparent as we would assume (or hope). Like the Good Housekeeping Seal of Approval, accreditation should signify a stamp of approval that a hospital provides safe, effective care. Recent evidence suggests that accreditation is not accomplishing that goal.

The Joint Commission

The Joint Commission, a nonprofit organization that provides hospital accreditation, is responsible for about 88 percent of U.S. hospitals becoming accredited. Many Iowa hospitals and providers utilize the services of The Joint Commission. The other 12 percent of hospitals obtain accreditation by other CMS-approved accrediting organizations or are state reviewed only (with no independent accreditation). The Gold Seal is awarded by The Joint Commission to hospitals that receive accreditation.

The 2017 WSJ article found, through analysis of hundreds of inspection reports from 2014 through 2016, that The Joint Commission “typically takes no action to revoke or modify accreditation when state inspectors find serious safety violations.” In fact, in 2014, “not only did 350 hospitals have accreditation while in violation of Medicare safety requirements, but 60 percent of them also had such violations in the preceding three years.” Hospitals are allowed to keep their full accreditation despite being ousted from the Medicaid program for safety violations.

Pay-to-Play?

In addition to indirect costs of time spent preparing for the accreditation process, hospitals pay the Joint Commission an annual fee (based on hospital size) from $1,500 to $37,000. Additionally, hospitals must pay The Joint Commission to inspect them (every three years) for an average fee of $18,000. Finally, Joint Commission Resources, a subsidiary, can be hired by hospitals to help them attain and keep the accreditation. This relationship between hospitals and The Joint Commission provides the appearance of a ‘pay-to-play’ arrangement – a game that is not in the best interest of patients. The WSJ article quotes a former hospital-accreditation director at The Joint Commission citing this payment process as a “conflict of interest.” The evidence has become so compelling that last month the Trump Administration has announced increased oversight of the accreditation process.

Until recently, there has been little research that investigates whether accreditation affects patient outcomes. Much of the research performed reveals that accreditors focus largely on structural factors and processes, rather than achieving good patient outcomes.  The recent study by Lam, Figueroa, et al. revealed that “…we did not find an association between accreditation status and patient outcomes…the data did not consistently support our hypothesis that hospitals accredited by The Joint Commission would have better outcomes.” Through many findings, this study concludes that “we found that hospitals accredited by private organizations did not have better patient outcomes than hospitals reviewed by a state survey agency…The Joint Commission, which is the most common form of hospital accreditation, was not associated with better patient outcomes than the other lesser known, independent accrediting agencies.”

Why Should This Matter?

The Iowa Patient Safety Study© reveals that one-in-five patients in Iowa experienced a medical error within the past five years – with about 60 percent occurring in Iowa hospitals.

Every patient wants to know if a particular hospital is safe, effective and appropriate before receiving care. This also applies to clinics and other venues of care. After all, this is part of the transparency movement that calls for patients to become more informed while being an active participant in the care process. To do so, the healthcare system must provide credible (and honest) outcomes documentation that will instill confidence and trust. Unfortunately, there are large variations in complications and mortality rates across hospitals – putting the patient at great risk.

Let’s focus on what is most important, such as patient outcomes, and come clean with how this accreditation process is determined and ultimately revealed to the general public. Only then will we have the Good Housekeeping Seal of Approval on the most important ‘product’ we purchase.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.