Posts - Heartland Health Research Institute

Variation in Health Cost Prices – What a Mess

Posted on: 06.19.13 By: David P. Lind

Over the last few months, some major ‘events’ have developed regarding medical cost transparency issues. Now is the time to channel our collective outrage to change how we pay for health care in the future.

In March, Steven Brill wrote a compelling (and disturbing) article in TIME magazine, “Bitter Pill: Why Medical Bills Are Killing Us.” For the first time ever, TIME dedicated almost the entire publication to just one particular article – due mainly to the complexities baked within the hospital pricing method(s) currently in place in our country. When you have time, this is definitely worth a read. Whatever a hospital will charge for a particular service, the actual payment will vary tremendously by the payer community left with the tab – Medicare, Medicaid, private insurers, or individuals without insurance coverage, etc.

Also in March, the International Federation of Health Plans released the 2012 Comparative Price Report showing just how extraordinary the costs of various health procedures are in this country versus the costs found in many other developed countries. After the Brill article, few of us need to question the validity of this particular report. The price differentials between the U.S. and all other countries are abhorrently grotesque.

On May 8, the federal Centers for Medicare & Medicaid Services (CMS) publicly released hospital inpatient charge information from hospitals in the U.S. The data released was the first time the federal government provided this information publicly. According to the CMS website, “As part of the Obama administration’s work to make our healthcare system more affordable and accountable, data are being released that show significant variation across the country and within communities in what hospitals charge for common inpatient services.” Without question, CMS unleashed a great deal of data showing how diffused and opaque hospital charges are for inpatient services, even within our own cities!

On June 3, the CMS yet again publicly released additional data on hospital outpatient charges, in addition to Medicare spending and utilization. It is quite apparent that federal officials are deliberately making health care costs more transparent for public consumption (and scrutiny). Health Datapalooza is an annual gathering in Washington D.C. that focuses on health data transparency. Now in its fourth year, Health Datapalooza has grown from about 50 attendees to more than 2,000. The idea is to have entrepreneurs take this massive data and create applications to help the public navigate through a seemingly complex world of healthcare costs.

This deluge of data becoming publically available allows a greater dialogue about the transparency of health costs and its impact on those who pay the bills.

A little bit of sunshine can be a great disinfectant – don’t you think?

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New Era in Iowa Healthcare (Needed)

Posted on: 05.15.13 By: David P. Lind

I’ve recently been visiting with healthcare providers around Iowa discussing how employers view health insurance and the value of healthcare delivered to their employees and family members. The discussion has been both open and honest. In fact, Iowa hospitals and physicians appear to be both interested and concerned with what they are learning.

My presentations evolve around four key observations that I have made over the past 29 years, both as a benefits consultant (my past life) and as a researcher. The intent of sharing these observations with the provider community is to convey the ‘pain points’ experienced by Iowa organizations regarding exorbitant health care costs and to begin a new dialogue of collaborating resources to find meaningful solutions in our health care world. After all, we are all in this mammoth problem together, right?

Here are my four observations:

Observation #1 – Health insurance premiums for Iowa employers have increased by 164 percent from 1999 to 2012. A great deal of uncertainty exists about the future of the health care ‘system.’

Year-after-year, employers continue to pay a handsome portion of the insurance premium. We know that take-home pay continues to erode for employees, as cost-sharing continues upward through increased payroll deductions and benefit plan alterations that include both higher deductibles and out-of-pocket maximums. This is clearly unsustainable for ALL of us. For communities to remain healthy and vibrant, employers must find solutions to this escalating problem.

Observation #2 – Iowa employers continue to embrace wellness initiatives, as they desire to have a healthier and more productive workforce.

Gradually we are morphing into a new social conscience of embracing healthier lifestyles – as more Iowa employers continue to assess and implement wellness efforts. We also have the Healthiest State Initiative and Blue Zones Projects™ in the news. The statewide Capital Crossroads Community Wellness Study reported that Iowa employers are open to partnering with community-wide wellness programs. For those employers currently without wellness programs in place, only three percent feel that wellness programs don’t work! This is encouraging.

Observation #3 – Lack of transparency in health care is a major concern and frustration to Iowa employers and their employees. Health insurance has become a major distraction to employers.

There is a growing belief that the ‘market’ approach does not work for ‘buyers’ of health care. In the next few years, will we see a gradual shift by employers to a more defined contribution approach by limiting financial support for employee premiums? Will value-based benefits begin to take hold that will nudge employees to use ‘higher value’ health providers and utilize approved medical procedures requiring less out-of-pocket exposure? Transparency of costs and outcomes are essential for the private market(s) to exist as health providers WILL definitely be held more accountable in the future.

Observation #4 – Health reform is viewed with great skepticism by Iowa employers.

The Accountable Care Act (ACA) will not solve the cost issue for employers and their employees. In fact, the ACA adds greater complexity in the insurance markets, forcing employers to search for opportunities that will relieve tensions and uncertainties. A ‘Provider Renaissance’ is sorely needed to deliver great value for the insurance premium being paid.

So what does all of this mean to the healthcare provider community?

Employers want to TRUST that hospitals and physicians will:

UNDERSTAND the employer perspective, which is the need to be competitive by having a healthy workforce. Health providers must have the employers’ best interest in mind.
CONSISTENTLY provide quality outcomes at reasonable costs – i.e. receive greater value for the dollar paid.
COMMIT to do these critical things on an on-going basis – long term.

As mentioned in a prior blog, our fragmented delivery system is really not a “system,” but rather a concoction of multiple temporary or expedient remedies that attempt to solve our problems as we confront our health care needs. No one is at fault, yet we ALL are.

Now is the time for employers and the healthcare provider community to work together – starting with a meaningful and trusting dialogue that will result in concrete solutions.

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Expansion of Medicaid – What REALLY Matters?

Posted on: 05.08.13 By: David P. Lind

A new randomized and controlled clinical trial provides fascinating information for Iowa (and other states) to review while policymakers consider whether or not to expand Medicaid. I highly encourage you to read this study, as it helps frame the real issues we must focus on as a state and country.

Published in The New England Journal of Medicine, ‘The Oregon Experiment – Effects of Medicaid on Clinical Outcomes,’ study reviews the potential effects of expanding Medicaid to impact healthy outcomes when health coverage becomes available to low-income adults. As you have correctly guessed, the petri dish for this experiment was the state of Oregon.

When expanding Medicaid for the poor, the primary benefits can be lower depression rates, greater health-care utilization and the elimination of catastrophic medical expenses for those who acquire the insurance. According to the study’s primary author, Katherine Baicker, a Harvard health economics professor, “The purpose of insurance is not to just get you access to healthcare, it’s to protect you from financial ruin if you have an expensive condition.” Dr. Baicker was one of many speakers at Harvard’s “Forces of Change” series on healthcare that I attended in Boston a few years back…she is a wickedly smart and a concise researcher.

In Iowa, a great debate has erupted (mostly along partisan lines) about whether to expand Medicaid or pursue a new but untested plan offered by Governor Branstad. Both approaches have supporters and critics for a number of reasons – arguments founded on facts, emotion and, you guessed it, politics.

So what is the truth?

I don’t pretend to have the answer. However, the Oregon Experiment does give additional insight on the implications for any legislative activity enacted in this state. It is common knowledge that having insurance coverage allows us to seek medical care that will make us healthier and more productive…and we won’t go bankrupt. We also know that having insurance provides each of us a peace of mind, it certainly does for me. Finally, having insurance improves access to healthcare providers and services. Enough said, right?

Not so fast – after learning of this new study, we may need to reassess this logic and maybe qualify it a bit more. The study findings consistently support the importance of delivering QUALITY health care to our population. To borrow a quote from Dr. Ashish Jha, another wickedly smart physician and researcher at Harvard, “The explanation is simple. It’s not about access to healthcare; it’s about access to high quality healthcare.” Baicker’s recent study certainly supports Dr. Jha’s conclusions.

We cannot expect to have a healthier population by merely providing insurance to gain access to necessary care. In fact, there is evidence that shows doctors who spend a great deal of their time serving Medicaid recipients deliver lower-quality care. Insurance will unlock the door to gaining access to care, but having this access does not ensure we receive quality care that will improve our health.

The Affordable Care Act (ACA) attempts to improve access to care for those least fortunate in our society – and most everyone agrees that this is important. However, the ACA does little to control spiraling costs and improve the quality of care being delivered. By adding more insureds into an already dysfunctional, high-cost ‘system,’ will only make our health costs considerably greater and even more uncontrollable over time.

It’s like rearranging the chairs on the Titanic.

Improving the health of our population means that we must pursue logical steps to ensure that high-quality care is being delivered at a reasonable cost. Gaining access to care is not enough…we must commit to having high-quality care accompany this access. Dr. Jha articulated this point very well: “Quality is the link between healthcare services and better health outcomes.”

It is time to make sure this healthcare ship is traveling in the right direction. It’s what we all should demand…it’s what we all deserve!

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Happy 15th Birthday!

Posted on: 04.17.13 By: David P. Lind

Our annual Iowa Employer Benefits Study© is about to take place. I’m really looking forward to this year’s survey for these important reasons:

This will be the 15th Study conducted since we started this particular survey in 1999. Some ‘birthdates’ are celebrated with more meaning than others…and 15 is a significant amount of time to show trending patterns and establish a credible track record!

Three new modules of questions will be added in this year’s Study.

1. The first module will gauge whether employers will keep their health plans (this would apply to those employers with 50+ employees). In addition, we will determine how prepared employers are regarding health reform requirements. This module is extremely relevant because employers will be making decisions for 2014, the first year most health reform provisions will take effect.

2. The second new module will be added that will determine how Iowa employers view their local community health care providers – specifically hospitals and physicians. Modules two and three will begin to address the upstream portion of ‘Our Health Care River.’ Our newly established company, Heartland Health Research Institute, will then begin to tackle the implications of the results from these two modules.

In this module, employers will grade hospitals and physicians on 11 key issues, including: transparency of costs, outcomes, coordination of care, concern for patient satisfaction, ability to engage patients, and so on. In addition, employers will be asked to measure their TRUST of these providers. Measuring trust is extremely important for a number of reasons. David Shore, Founding Director of the Trust Initiative at Harvard School of Public Health, once said that ‘trust is the currency of commerce.’

To learn more about the trust issue in health care, please see my earlier blogs:

The Currency of Commerce (Part 1)
Trust – A Distinguished Healthcare Trait (Part 2)
Trust – Now is a Good Time (Part 3)

3. The third module will address the type of data needed by employers to manage employee health costs. It will help identify who should have the responsibility to supply the primary source of this data to employers and their employees (i.e. health insurers, government or health providers – such as hospitals or physicians.) In addition, we will learn how knowledgeable employers are regarding the Iowa-based web resources currently available on our Iowa hospitals.

Rest assured, we will continue to ask our core questions about the benefit components being offered by Iowa employers. After all, this is the initial reason we began this groundbreaking Study 15 years ago. One thing I have learned over the years of conducting this Study is the importance of constantly monitoring the marketplace — asking fresh questions and addressing new and potential trends.

If your organization is randomly selected to participate in this year’s Study, we highly encourage you to share in our celebration by participating in the survey. Here’s to adding the 15th candle to our cake!

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A New Approach: Heartland Health Research Institute (Part 2 of 2)

Posted on: 04.10.13 By: David P. Lind

Last week’s blog, “A Bystander – No More!” has set the table for this week’s blog.

I have recently founded another organization with the vision to advance the transparency of facts through objective research and innovative solutions in the delivery and payment of health care. Our mission is to provide meaningful health care information to improve decision-making for consumers, employers, health care providers, policymakers and the general public.

The name of our new organization is Heartland Health Research Institute (HHRI).

Dr. Yogesh Shah
Associate Dean of Global Health
Des Moines University

HHRI is a collaboration between Dr. Yogesh Shah and me. Dr. Shah serves as associate dean for Global Health at Des Moines University (DMU) – a position created to establish and increase international rotation opportunities, medical service sites and other global health experiences sought by DMU students. His passion includes improving the health of people around the world.

Dr. Shah is triple-board-certified in family medicine, geriatrics and hospice and palliative care. He is very involved through the World Health Organization (WHO) and was instrumental in making Des Moines a member of the WHO network of age-friendly cities. Dr. Shah led the creation of the Heartland Global Health Consortium, a collaboration of Iowa educational learning opportunities for students. He was awarded a Fulbright scholarship to develop a palliative care program in Rwanda. Dr. Shah was born in Mumbai, India.

Dr. Shah and I met a year ago while jointly working on a research project for Capital Crossroads. Through this interaction, we realized our passions about health care were very similar, and our seemingly disparate backgrounds are actually complimentary to one another. It was through our discussions that HHRI was conceived.

So what will HHRI do?

An ongoing need exists for objective, unbiased information regarding the local health care system, so that decisions affecting our system will be based on verifiable facts. HHRI was founded to conduct research and provide education focusing on a broad spectrum of health care issues. Topics covered are specifically from the patient’s perspective and measure patient confidence and trust in the health care system today and into the future.

HHRI will function strictly in an objective and unbiased manner and not as an advocate or opponent for any position. Frankly, we are not about advancing any particular political agenda, but rather, advancing factually-based evidence that will attempt to make sense out of this very complicated health care world in which we live. Topics addressed by HHRI may include:

Transparency in costs and outcomes
Quality of health care
Patient engagement and activation
Palliative care
End-of-life care
Employment-based health benefits
The value of health coverage
Population-based health
Attitudes toward health care reform
Identifying and understanding the unintentional consequences of public policies
Other tangential issues

HHRI is a knowledge-based organization serving Iowa and other Midwestern states, and will focus on:

Data to reveal major health challenges and opportunities.
Credible, reliable and objective research for decision-makers, policymakers, employers, media and the general public.
Exploring and presenting key health care issues with thought leaders from all sectors.

We want to provide understandable information that can be used to solve the problems our health care system suffers from today. Our work must provide clear results that will be applied to everyday decision-making by employers, employees, policymakers, media and the general public. Having a healthy, robust workforce and population is critical to the economy of Iowa and other Midwestern states.

In the future, I will continue to monitor the downstream of Our Health Care River using the annual Iowa Employer Benefits Study. With the advent of HHRI, we will now be able to move upstream and pursue critical issues inherent within our health care world.

HHRI is new and fresh and created to make a real difference. You will be learning much more about our work in the months ahead! Should you have further questions about HHRI, I encourage you to contact Dr. Shah or me.

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A Bystander – No More! (Part 1 of 2)

Posted on: 04.03.13 By: David P. Lind

Similar to a bystander observing something that makes them feel uneasy, such as a mugging or a car wreck, a familiar ‘spectator-feeling’ applies when watching the evolution of our health care issues – at least for me.

It began in 1984, when I worked as an account consultant at Blue Cross and Blue Shield of Iowa (Wellmark), and I consulted with Iowa employers on the health benefits they provided to their employees. For those of us old enough to remember, health insurance premium increases were exorbitant in the eighties. In fact, they were even greater than what we have observed in the twenty-first century. Premium inflation in the eighties could certainly be considered a major car wreck or a mugging over which insureds had no control – and I was both a spectator and a participant tangentially tied to the carnage.

In the early-to mid-nineties, hospital expenses and revenue increased very slowly while insurance premium inflation tapered off. However, later that decade, premiums began to move upward again. As in the eighties, my observations allowed me to conclude that rising health care costs and insurance premiums were just too pervasive to successfully solve. We were all innocent bystanders standing with mouths agape, right?

Then came 1999…

In that year, we began our first annual “Iowa Employer Benefits Study,” which is now in its 15th year. Over the years, we have been monitoring the benefits offered by Iowa employers – with health insurance being the most salient of all benefits due to sheer runaway costs and social issues. I was now becoming very intrigued (if not obsessed) with the societal issues of health care and how it impacted health insurance premiums within Iowa and beyond. In short, understanding how health care could be delivered more safely and efficiently would, ultimately, favorably impact the direction of health insurance premiums paid by employers and their employees.

Unfortunately, it was just too easy and convenient for me to remain an ‘innocent’ bystander observing the smoldering wreck that is our health care system AND reporting the results in our annual Study. Again, I unconsciously watched the buildup of these wrecks, somehow rationalizing that others who were more knowledgable and capable could ‘fix’ the underlying reasons for the undeniable malfunctions.

The health care problem is just too vast to tackle – right?

Repetition drives habits, and habits can be extremely powerful over a period of years. My ‘habit’ was to witness this wreck of a health care system, shake my head in disgust and do little or nothing to try to assist others with possible solutions to fix the underlying cause of the problem.

As time went on, a nagging question became more of a roar: “With the inability of our health care ‘system’ to deliver safe and efficient care to our population, should I continue as a bystander and perpetuate this troubling activity or try to do something to help remedy the situation?” I needed to decide how I would focus my efforts in the future.

Finally, in October 2011, I made my choice. I would no longer continue in the role as an employee benefits consultant. Instead, I would follow my passion to help others seek new and clear initiatives to pursue the core problems within our truly dysfunctional health care system.

As mentioned in a recent blog, we developed an infographic describing ‘Our Health Care River.’ The downstream portion of this infographic illustrates the rising health insurance premiums paid by Iowa employers and their employees, which is derived from our annual Study. That work will certainly continue. However, I will now focus more of my attention upstream. The landscape upstream shows two primary root causes for our health care cost problems:

You may have noticed the “Heartland Health Research Institute” (HHRI) logo within the infographics. HHRI is our new company that will begin to address some of these root causes upstream.

More about HHRI’s mission and vision in next week’s blog. My goal is to put our wreck of a health care system in the rearview mirror and concentrate my efforts on being a part of the solution…because we have to start somewhere.

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