by ACHE SoCal | Jun 9, 2016 | Blog
No surprise to anyone who reads this blog, I’m sure, but health care costs continue to rise at rates eclipsing the rise in overall spending in the U.S. What may be news to some, though, is that the average annual cost of providing health care to a family of four surpassed $25,000 this year, a milestone to be sure. At 4.7 percent, this year’s increase elevated this cost to $25, 826, as calculated and reported by Milliman, whose Milliman Medical Index (MMI) analysis has become the go-to source on this since its inception 15 years ago.
While many variables contribute to the rise in costs, MMI analysts highlight a disproportionate increase in spending on prescription drugs as a variable of interest/perpetrator in this crime. Spending on medications has quadrupled over the 15-year history of the MMI, and at an average increase of $4,270 per family of four annually, it now represents 17 percent of all health care spending.
While this may set off alarms for most stakeholders involved in the delivery and financing of health care, it resonates weakly to the average consumer, though it shouldn’t. I actually am part of a family of four, and we did not spend anywhere near $25,000 on our health care needs last year or the year before that. The MMI analysts say that’s typical, as a paltry 20 percent of all health care consumers account for 80 percent of all spending. Classic example of the Pareto principle if ever there was one.
As such, this is like driving by one of those big screen, high definition, neon-lighted motion picture billboards dotting the streets in Hollywood. You can’t escape the message even if you want to. In this case, the message staring us in the face is that the most effective strategies for constraining the rise in health care spending will target the 20 percent of health care super-users with high doses of care management.
What about the rise in spending on prescription drugs? I say let’s not get overly excited about that, as this rise is justified by (a) the introduction of new drugs to more cheaply manage costly medical maladies and (b) the greying of America over the 15-year reporting period. And age is a proxy for the incidence of chronic disease in our population, and that correlates well to the rise in prescription drug usage.
So, let’s do a lot more care management, why don’t we?
by ACHE SoCal | May 12, 2016 | Blog
In response to my dismissal of Bernie Sander’s campaign for the presidency, my best friend and mentor advised, “Never underestimate an old man with a sociology degree.” True that. The candidate with the socialist agenda is the fancy of voting women and young democrats around our nation. If Sanders does what everyone expects him to do at the convention in July, the Democratic Party most assuredly will woo his supporters by moving to the left on many platform issues, including the adoption of some version of his Medicare-for-all proposal.
Secretary Clinton got the message, and she isn’t waiting for the convention to move leftward on health care reform. She recently went on record in support of opening Medicare as an option for those Americans who want it but are not currently eligible.
And remember the Public Option? It was stricken from the ACA legislation to garner then-Senator Joe Lieberman’s much-needed vote of approval. Had it been left in the legislation, our government would be competing with commercial health plans in the private insurance market. While Clinton’s support of the Public Option is neither new nor news, her recent promotion of a new version of this defeated plan is. She understands the folly, though, of asking a divided Congress to approve it or a Medicare option. So, a President Clinton (2.0) would use the authorities of her office and the Affordable Care Act to work with interested governors to allow states to create and operate Public Option-style health insurance plans.
And why wouldn’t states jump at the chance? Many would be motivated to use a Public Option-style plan to cure the ills caused by the lukewarm, uneven and often contentious participation of commercial plans in their ACA Exchanges. And at eight percent, health insurance premium rate hikes are returning to their pre-great recession levels. Moreover, consumers are feeling the pinch in their pocketbooks, as out-of-pocket expenses for health care have almost doubled in some parts of our nation since the ACA was enacted.
Lastly, I’m thinking that it’s a sure bet that our left-leaning, program expansion-oriented California Legislature would be one of the first to create a government-run private health insurance plan if a Clinton Administration gives the go-ahead. Covered California is ready-made and poised to run with the task. And while you’re thinking about the possibilities, brush up on your knowledge about Single-Payer health insurance systems…because that’s where all this is headed.
So, what about the Republican Party? What will it and a President Trump do? I don’t learn, I guess, so I dismiss “The Donald” like I did Sanders, to which my mentor responds with a modified Reagan favorite, “There you go again!”
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I am interested in your thoughts on this, as I plan to opine more as the general election nears. Please send them to me, Jim Lott, at Jim@LottAdvantage.com.
by ACHE SoCal | Mar 14, 2016 | Blog
We’ve all seen it. Kids and grown-ups leaving the movie theater concession stand with soft drinks in containers so large that one often takes both hands to carry. When I try to discuss the health problems this causes, my family and friends dismiss my protests with variations of “the-occasional-splurge-is-okay” retort. Well it’s not okay! Each super-sized soda sold in movie theaters contains 96 to 174 grams of sweeteners, which, when consumed, is equivalent to eating 22-44 teaspoons of sugar…in a single serving. How can consuming that much sugar in one drink be okay?
This so bothered former New York Mayor Michael Bloomberg that he shepherded in a citywide ban on the sale of sugary beverages over 16 ounces in size. Even at that size, these sodas may have as much as 12 teaspoons of sugar in them. No matter, though. The New York City Court of Appeals struck down that ban in June of 2014, saying that the City had overreached its regulatory authority in issuing it.
The next match in the battle against sugar abuse may be staged in California where two legislators reacted to a new UCLA study released this month with proposals for a 2-cents-per-ounce health impact fee on sugar sweetened sodas and other drinks. To be sure, the chief finding of that study is frightening. Nearly half (46%) of all adults in California –about 13 million people– are estimated to have undiagnosed diabetes or pre-diabetes, a precursor to Type 2 diabetes, which is often life-threatening and in most cases completely preventable. But is a sugar content tax the best abatement strategy to deploy?
The cost implications to society are indeed significant. The lifetime medical cost for treating a person with diabetes is about $125,000 more than for someone who does not have diabetes. Additionally, the average per capita cost of hospital stays for diabetic patients is nearly $2,200 more than stays for non-diabetic patients. Factor in a rate of increase for the incidence of this disease in the population at 100 percent per decade and ouch; you have the makings of a nightmare for health insurance underwriters and consumers, though the latter, including those of us who restrict our sugar consumption, won’t see it coming until smacked in the face with higher premiums.
The enormity of this crisis notwithstanding, let’s not rush to impose a sugar content tax on the foods we purchase. After all, sugar in and of itself is neither unhealthy nor dangerous to consume. And such a tax would be regressive and therefore unfair. Rather, let’s arm consumers with knowledge about overconsumption by placing clear and compelling labels on food products with added sugar. I’m thinking about that super-sized soda at the concession stand. Forget small labels with grams. In place of alluring pictures of super heroes surrounding the surface of the container, how might a consumer respond to a large label that says “You are about to drink 44 teaspoons of sugar?” In fact, the 56-ounce Big Gulp container is big enough to put 44 pictures of teaspoons with sugar on it as well. If I needed this type of coaching, a label like this would most certainly deter me. It probably would cause most adults to at least consider buying a smaller-size fountain drink containing less sugar. Not so much with kids perhaps. We may need to be more controlling for children; maybe install age-related restrictions on the purchase of food products based on sugar content?
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by ACHE SoCal | Feb 11, 2016 | Blog
I am beginning to feel like I should turn in my psychology credentials because I struggle to understand how Senator Sanders whopped Secretary Clinton in every demographic except seniors in the New Hampshire primary. At a 5:1 clip, young women rushed to cast their vote for Sanders. That’s just amazing! More interesting, though, is how Sanders, a self-proclaimed neo-socialist, is resonating with a broad cross-section of Americans. How is this possible? Given my background and training, I should understand this, but I don’t.
Socialist Sanders wants to replace the Affordable Care Act with a single payer, Medicare-for-all health care system. What does the fact that he has an ever-growing constituency rallying to his call mean? I’m not sure, but a new Kaiser Health Tracking Poll may provide us with some insight into the Sanders phenomena. The poll results tell us that though the ACA ranks eight on the list of priorities for voters, 44 percent hold an unfavorable view of it. Again, that’s just amazing! Defying the predictions of most health policy pundits, the needle on consumer acceptance of the ACA has not moved over time. Here we are, six years after its passage and four years after its implementation, and nearly half of the voting population still do not like it.
Chief among the complaints about the ACA is that it is too complex, and it allows profiteering in the financing and delivery of health care to continue if not flourish. The claim here is that health care operating on free-market principles, while good for the payers and providers, is not good for consumers. And the cost of health care is still rising at twice-to-thrice the overall rate of inflation, threatening to consume 20 percent of our nation’s gross domestic product by the end of this decade.
Other industrialized nations that provide universal coverage have, arguably, done better for consumers than the ACA. What they did, though, provides us with a tough prescription to cure what’s ailing our health care financing and delivery system. Specifically, any health care system seeking to cover everyone and keep costs down must include these three features, as follows:
- Everyone must be required to have insurance coverage. The ACA has a soft mandate for this…We need to beef up the penalties and subsidies for low-income residents, and we need to eliminate the coverage exclusions, including the undocumented.
- Health plans must not be allowed to make a profit on basic coverage. They may profit off of supplemental coverage plans, but basic coverage for routine and necessary care must be provided at cost.
- A single payer or all-payer system must be installed; i.e., payment rate regulation for both commercial and government-sponsored health care provided by doctors, hospitals and others must replace the pluralistic payment models currently used.
Again, these features are proven to be effective for nations desiring to provide universal coverage for its residents without breaking the bank in the process. And Senator Sanders dares to embrace this with his Medicare-for-all proposal. Will he succeed? Four months ago I would have said “no way.” However, four months ago, I also would have said that Donald Trump’s campaign would be dead by now.
by ACHE SoCal | Jan 12, 2016 | Blog
Move over Pasteur, Curie, Salk. Make way for Jennifer Doudna, a molecular biologist at UC Berkeley, and Emmanuelle Charpentier from the Max Planck Institute, whose genius has produced a tool that will bring about an end to many diseases like sickle-cell anemia, lupus and many forms of cancer.
Gene editing has been around for some time –since the 1970’s– but these scientists have created a set of molecular scissors that doctors can use to excise any undesirable parts of DNA in fetuses known to trigger certain diseases and medical conditions in their hosts. Called CRISPR (or CRISPR-CAS9), these scissors will enable scientists to manipulate the human genome –with ease and precision– to produce more desirable outcomes in human beings, similar to what chefs do with the ingredients they choose to produce award-winning meal recipes.
As the chef simile suggests, a Pandora’s Box comes with this development. Why stop at removing those parts of DNA known to cause disease? Should this new technology be used to make changes in human sperm and eggs to create humans with preferred characteristics, like specific eye color, body build, gender…and much, much more? Not so far-fetched as you might think, and I believe demand would be great. Today, many animal clinics in Europe use cloning technology to produce designer pets on order, and these clinics are thriving enterprises. So, we should expect the demand for designer babies and the evolution of an industry to satisfy that demand to be just as robust…perhaps more robust?
The ethical implications raised by CRISPR are enormous, and the science community knows this. While most of us have been mesmerized by the news chronicling the rise of The Donald in the Republican primary election for president, scientists from around the globe have been and are meeting to address these implications. They know that they must try to regulate the use of this ground-breaking technology. They understand the implications that abusive use will have on humankind. I want to believe that our scientists will self-regulate, but the task before them, I fear, is as daunting as trying to put toothpaste back in the tube. We’ll see.
by ACHE SoCal | Dec 17, 2015 | Blog
Here are my top 5 New Year’s resolutions for health care providers:
Focus more of your marketing budget on improving your organization’s brand. What you stand for and how consumers think about you will impact your marketability more than knowledge of your presence or what you do in a market ever will. Spend more on developing and promoting the image you want of your organization, not what your organization offers, where it is located, or what awards and recognition it has received.
Manage your revenue cycle; don’t let it manage you. Commercial and government payers are doing more selective contracting and intensifying their payment claw-back practices. Stay ahead of these efforts, or, at the very least, keep up with them. And watch the aging of your receivables like you would a newborn just brought home from the hospital.
Go lean. Get rid of all bottlenecks and non-productive business practices. Make process improvement a priority. A good goal to start with for all through-put and back-office functions is to halve all processing cycle times or justify why they can’t be cut in half. And plan to revisit that justification every six months until the goal is met. Get help with this if necessary, but do it… like yesterday.
Make anyone in your organization who tells you that something can’t be changed because it’s required by The Joint Commission or state licensing prove it. Your subordinate managers know that they know more than you about their functional areas of responsibilities, so many do and will resist your change inquiries and initiatives by telling you that the way something is done is required by some regulation or regulatory agency. Often times that just simply is not true.
Assess and reduce the level of distrust in your organization. A strong, direct correlation between the level of distrust and dysfunction exists in every organization, so treat distrust like you would an aggressive form of cancer. It may cost you some time and money to assess, but like the 5-year colonoscopy for people over the age of 50, it is the best way to find and deal with problems at an early stage of development.
BONUS: Using return on assets as its leading measure of success, researchers analyzed 45 years of data concerning more than 25,000 firms. A key finding was that exceptional business performance depends on adherence to the following three decision rules. Rule 1: Better before cheaper. Rule 2: Revenue before cost. Rule 3: There are no other rules. (Michael E. Raynor and Mumtaz Ahmed)
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Happy Holidays!
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