Tag: Cost

A Broader Approach To Managing Health Care Risk

Brian Klepper

Posted 2/15/13 on Medscape Connect’s Care & Cost Blog

BK 711Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.

The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.

The Complexity of Health Care Risk

The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.

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How Primary Care Became the Job Nobody Wanted (and How To Fix It))

Brian Klepper

Posted 11/21/12 on Medscape Connect’s Care & Cost Blog

Here a link on SlideServe to my plenary presentation on CMS’ relationship with the AMA’s Relative Value Scale Update Committee (RUC), and how/why it has undermined American primary care. I delivered this overview at the Medical Home Summit in Philadelphia earlier this year.

Meanwhile, the team – led by Paul Fischer MD, a primary care physician in Augusta, GA – that sued CMS and HHS over their failure to require the RUC’s to adhere to the requirements of the Federal Advisory Committee Act is awaiting the appeal court’s ruling that will determine whether the case is at an end or whether it moves forward into discovery.

Given the seriousness and far-reaching impacts of the problem, it is shameful that America’s primary care medical societies have shrunk from supporting this action. In doing so, and in yearning to continue to align and participating with the AMA and the RUC, they have become complicit with them. They have not only compromised the primary care physicians who are their members, but ignored the much larger problems of patients who are too often put at unnecessary risk through care they don’t need, and purchasers – individuals, businesses and governments – who have been exploited for more than 2 decades with costs that are double those in other industrialized nations.

Irresistible Forces

Brian Klepper

Posted 10/28/12 on Medscape Connect’s Care & Cost Blog

At our first meeting years ago, Tom Emerick, Walmart’s then VP of Global Benefits, told me,

“No industry can grow indefinitely at a multiple of general inflation. It will eventually become so expensive that purchasers will simply abandon it.”

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Walmart Moves Health Care Forward Again

Brian Klepper

Posted 10/12/12 on Medscape Connect’s Care & Cost Blog

Walmart. Save Money. Live Better.Walmart’s sheer size makes almost any of their initiatives newsworthy. That said, despite being a lightning rod for criticism on employee benefits and health care, they have introduced initiatives with far-reaching impacts. Their generic drug program began in September 2006 – more than 300 prescription drugs for $4/month or $10 for a 90-day supply – and was widely emulated, disrupting retail drug markets and generating immense social benefit. Imagine the difference it made to a lower middle class diabetic who had been paying more than $120 per month for medications, and suddenly could get them for about $24.

Yesterday Walmart announced that “enrolled associates” – covered workers and their family members – needing heart, spine or transplant surgeries could receive care with no out-of-pocket cost at 6 prominent health systems around the country: Mayo Clinics (Rochester, MN and Jacksonville, FL); Cleveland Clinic (Cleveland, OH); Geisinger Clinic (Danville, PA); Mercy Hospital Springfield (Springfield, MO); Scott & White Memorial Hospital (Temple, TX); and Virginia Mason Medical Center (Seattle, WA).

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Are You Ready for Intense Price Competition?

Note from Brian: The article below describes my recent keynote address to a large meeting of imaging center administrators, and appears in the Sept 2012 Radiology Today. I’m reposting it because it accurately reflects, in depth, the message that I tried to deliver.

Remarkably, the audience was evenly divided in their evaluations. Half thought it was a very important but difficult to hear talk. The other half thought I was a jerk and it was the worst talk they’d ever heard. My take on this is that the responses reflected an industry that has become comfortable with a lack of accountability and market forces, and that is highly threatened by change.

Jim Knaub

Published in Radiology Today, September 2012, 13:8, p18

A keynote speaker told administrators to expect businesses threatened by ever-increasing healthcare costs with new approaches that will change how imaging organizations compete.

When Brian Klepper, PhD, delivered his keynote speech to the audience at the AHRA annual meeting in Kissimmee, Florida, last month, it was not the feel-good speech of the summer. Klepper, whose companies develop and manage worksite primary care clinics for employers and manage specialty care for those employees, told the audience that his company had recently negotiated a deal in Indiana for $450 MRI exams in a market that had technical fees ranging between $1,750 and $3,200. That was the opposite of a warm and fuzzy message to the 900 or so imaging administrators attending the meeting at the Gaylord Palms Resort and Convention Center.

“Somebody like me is going to come in to your market, and your volumes are going to plummet because there is no way you can compete against a $450 imaging price when you’re currently used to getting $2,800 or whatever you’re getting,” Klepper told the audience. “That is the problem.”

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The Decline and Potential Renaissance of Employer-Sponsored Health Benefits: EBRI and MetLife Reports Tell the Story

Two reports this week suggest countervailing trends for employer-sponsored health benefits: the erosion of the health benefit among companies, and opportunities for those progressive employers who choose to stay in the health benefit game.

In 2010, nearly 50% of workers under 65 years of age worked for firms that did not offer health benefits. The uber-trend, first, is that the percentage of workers covered by employer-sponsored health insurance has declined since 2002. Workers offered the option of buying into a health benefit, as well as the percent covered by a health plan, have both fallen, according to the Employee Benefits Research Institute (EBRI), an organization that has long-tracked this trend. EBRI’s report on Employment-Based Health Benefits: Trends in Access and Coverage, 1997-2010, provides the details behind this declining picture.

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Anatomy of a Walletectomy

Merrill Goozner

Posted 4/25/12 on Gooz News

It all began when Dr. Renee Hsia of the University of California at San Francisco received a simple request from a good friend who had checked into a local hospital for an emergency appendectomy. The fairly routine procedure took place 19,368 times during 2009 in California.

After he returned home, he received a bill from the hospital for $19,000, his co-payment for the parts of the $54,000 operation that his insurance company didn’t cover. “He wanted to know if this was the usual and customary charge for a one-day stay in the hospital,” she recalled.

And thus began her research into pricing variability in the state, which was published this week in the Archives of Internal Medicine. The prices ranged from $1,529 to $182,955 with the median hospital charge of $33,611, the study showed.

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Critics Pounce on Cancer Care Costs Study

Merrill Goozner

Posted 4/12/12 on Gooz News

From Reuters: With the United States spending more on healthcare than any other country — $2.5 trillion, or just over $8,000 per capita, in 2009 — the question has long been, is it worth it? At least for spending on cancer, a controversial new study answers with an emphatic “yes.”

Cancer patients in the United States who were diagnosed from 1995 to 1999 lived an average 11.1 years after that, compared with 9.3 years for those in 10 countries in Europe, researchers led by health economist Tomas Philipson of the University of Chicago reported in an analysis published Monday in the journal Health Affairs.

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“Doctors call for end to five cancer tests, treatments”

Tom Emerick

Posted 4/6/12 on Cracking Health Costs

So reads the headline in a Reuters story on April 4, 2011.

Let’s linger on the notion that they are exposing procedures that are “harmful” yet “routinely prescribed.” Giving harmful care to cancer patients is not rare, but “routine”. The words immoral, unethical, unscrupulous, and venal come to mind.A private task force was led by Dr. Lowell Schnipper, a cancer physician at Beth Israel Deaconess Medical Center. The task force was organized by the American Society of Clinical Oncology.  The goal was to “…to identify procedures that do not help patients live longer or better or that may even be harmful, yet are routinely prescribed.” [Italics mine.]

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Patient Engagement and Medical Homes – Core Drivers of a High-Performing Health System

Jane Sarasohn-Kahn

Posted 3/30/12 on Health Populi

It was Dr. Charles Safran who said, “Patients are the most under-utilized resource in the U.S. health system,” which he testified to Congress in 2004. Seven years later, patients are still under-utilized, not just in the U.S. but around the world.

Yet, “when patients have an active role in their own health care, the quality of their care, and of their care experience improves,” assert researchers from The Commonwealth Fund in their analysis of 2011 global health consumer survey data published in the April/June 2010 issue of the Journal of Ambulatory Care Management. This analysis is summarized inInternational Perspectives on Patient Engagement: Results from the 2011 Commonwealth Fund Survey, published on The Commonwealth Fund’s website on March 29, 2012.

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CalPERS Innovative Program for Hip and Knee Surgeries

Nick Vailas

Posted 1/24/12 on Healthcare Transparency Now

CalPERS – the California Public Employees’ Retirement System – covers 1.3 million retirees, managing both their retirement and health benefits.  It recently introduced a program for knee and hip surgeries that effectively tells beneficiaries that it will pay up to a specified amount for hospital reimbursement. If the beneficiary elects a hospital for which its reimbursement is higher, the beneficiary is 100% liable for additional charges.

CalPERS has brought two essential ingredients into play – both transparency in price and “skin in the game.”

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The High Price of New Cancer Drugs

Merrill Goozner

Posted 1/24/12 on Gooz News

Julie Gralow, an oncologist at the Fred Hutchinson Cancer Center in Seattle, recently prescribed an exciting new therapy for a 60-year-old woman with metastatic breast cancer. Three-and-a-half years into her battle against the disease, the patient had already exhausted three different anti-estrogen therapies, each of which only put a temporary check on the spreading tumors.

The newly prescribed drug, Novartis’ Afinitor, is one of the recently approved targeted therapies that have generated a lot of excitement among cancer patients and oncologists in recent years. Drugs that target just the cancer cells promise the same or better results as toxic chemotherapy, but with far fewer side effects.

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How Much Does It Cost To Have A Baby

Kenneth Lin

Posted 1/24/12 on Common Sense Family Doctor

When my wife delivered our second child in 2008, the hospital sent our health insurance company a bill for $8569. The insurance company then wrote off $4117 of that bill, paid $4352, asked us for a copayment of $100. When we found out last year that we were expecting again, we noted that my wife’s new insurance plan requires us to pay 20% coinsurance for all non-preventive care. That would have amounted to several hundred dollars of our 2008 bill, and knowing the rapid rate of health care inflation, we thought it would be good to find out how much it would cost this time around. So we went back to the same hospital, where we expect our third child to be born in a few weeks, and asked if they could give us an estimate of the charges. It seemed like a reasonable enough request, especially since the pre-admission consent form we signed specifically said that patients had a right to know what the hospital charged for its services.

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US Health Care Hits $3 Trillion

Dan Munro

Posted 1/19/12 on Forbes

Dan MunroGreat post by Rick Ungar over on The Policy Page. Still, I’m left wondering. It’s an election year and given the stakes, I think we’ll look back on 2012 as the year of the great Healthcare Reform debate – Part 2. What we have today is really just the beginning of a long and winding investment in Healthcare Reform – Part 1. I think the question remains – have we tamed the cost beast with real legislation – or is it just legislation around the edges? Here’s why I’m wondering.

National Healthcare Expenditure – or NHE. Total agreement with Rick that costs are “out-of-control” because our NHE is really $3 trillion – this year. Actually, NHE for 2012 is probably closer to $2.7 trillion but there’s this nagging bookkeeping accrual of about $300 billion where we (narrowly) avoided those darn pesky SGR cuts to Medicare. It’s come to be known affectionately as “doc fix” – and we’ve kicked that can down the road for 9 consecutive years. Maybe we’ll just write it off – and maybe we should – but it’s actually on the books so we can’t just ignore it – can we? That puts the real NHE at about $3 trillion for 2012 (+ about 4% for each year forward – as far as the eye can see). As one economist said – we don’t have a debt problem in this country – we have a healthcare problem.

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It’s 2012. Let’s Recap

Tom Emerick

Posted 1/02/11 on Cracking Health Costs

Let’s hit a few highlights of 2011.  In Cracking Health Costs we described certain…um…scary trends in health care in the US:

  • US spending on health care is lapping our peer countries while our life expectancy is declining comparatively.  This is a major drain on our economy and is costing us jobs.
  • We have a huge amount of unnecessary surgery and testing.  It’s getting worse, not better.  (Read The Treatment Trap by Rosemary Gibson and Janardan Prasad Singh for real life examples.)
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