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Perspectives on a selected key topic
June/July 2018 |
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the most significant challenges now facing healthcare
stakeholders, such as the Opioid Epidemic, Medicaid
funding/coverage; Cybersecurity, Specialty Drug Pricing, ACA
unraveling; etc., which specific major challenge do you think
will experience the most positive progress in the next two
years, which will have the least progress, and why? ”
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Alan London, MD
Director, BDC Advisors
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Over the next couple of years the focus on value and
population health will continue. The positive
accomplishments of the ACA have changed the playing field
from FFS to value which will not be reversed. The enormous
investments made in ACO care management systems need to be
put to use, meaning providers systems will be looking to
enter into risk sharing agreements with insurers, and with
all government payers. A patient centered focus will
continue to evolve from "sickness care" for chronic
conditions to "healthcare and well being" as per the
rebranded Department of Health and Social Welfare's names.
The growing shortage of primary care physicians will be
largely filled by the increased use of advanced practice
clinicians—highly trained nurses and physician assistants
working in teams with physicians or practicing solo in rural
areas. The remaining gap will be filled by the growing use
of telehealth and artificial intelligence to fill specialty
gaps and improve diagnostic accuracy. While the value trends
seem likely to continue there are impediments and challenges
to be met:
1. COSTS ARE MOVING BACK TO CENTER STAGE.
Health Care costs which have been perking up at a 5% clip
over the past few years are projected to rise to 6% annually
over the next decade and could go higher. Hospitals costs
and drug price are seen as the major culprits. But the
growing expansion of telehealth, artificial Intelligence and
health IT in general are also causing inflation pressures
and could set off a new technology arms race—coupled with
the continued growth of risk based contracts which will
require Infrastructure investments for providers preparing
to effectively manage risk. We look for a continuing push
for greater pricing transparency, bundled payments with
reference pricing and carve outs for high volume, high
priced procedures.
2. CREATION OF HIGH PERFORMING
EMPLOYED MEDICAL GROUPS WILL BECOME A TOP C-SUITE PRIORITY.
Over 42% of all physicians are now employed directly by
hospitals and most of the remainder are participants in
hospital ACOs. Current projections indicate a shortage of
thousands of primary care MDs and other specialists in the
next decade. The cost of replacing a primary care physician
estimated to be $500K to $1 million due to lost revenue,
lower MD productivity and recruitment costs. Creating and
sharing control with high performing employed medical groups
to attract the best talent, and retain “tenured” clinicians
will be a challenge for most executives and trustees.
3. ACCESS TO ACA COVERAGE WILL BE FURTHER CHALLENGED.
There were 4 million more people added to the rolls of the
uninsured in 2017. The lifting of restrictions on
Association Health Plans seem likely to further destabilize
the individual ACA market driving up premiums and making
insurance less affordable - more bad debt for hospitals. It
seems unlikely that Congress will allow the administration
to remove the protections on pre-existing conditions but
that is what is on the table.
4. The AMAZON,
BERKSHIRE HATHAWAY, JP MORGAN JV: HAS RAISED EXPECTATIONS,
PERHAPS UNREALISTICALLY. Carve outs and reference
pricing for costly cardiology and orthopedic procedures in
direct contracts with employers has become widespread but
has not reduced health care inflation for employers. Total
cost of care contracts between employers such as Intel and
Boeing have had mixed results. Author and thought leader
Atul Gwande, MD, will be challenged to live up to
expectations that he will figure out how to get healthier
more productive employees and yet save their employers
money.
I’ll leave cyber security and the Opiod Crisis
for others to solve.
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Peter
Kongstvedt, MD, FACP
P.R. Kongstvedt Company, LLC |
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Of the most significant challenges now facing healthcare
stakeholders, such as the Opioid Epidemic, Medicaid
funding/coverage; Cybersecurity, Specialty Drug Pricing, ACA
unraveling; etc., which specific major challenge do you
think will experience the most positive progress in the next
two years, which will have the least progress, and why?
The opioid epidemic is likely to experience the most
positive progress. I have seen progress already, both in the
general sector and in Virginia at least, our Dept. of
Medical Services – Medicaid – initiated a new set of
programs that have already shown truly remarkable results.
Of course someone with serious chronic pain unresponsive to
other modalities probably won’t see opioid prescribing
changes as progress, and for them it is not.
As for
Medicaid funding, I can once again use Virginia as an
example of a state in which the House of Delegates staunchly
resisted expansion despite our having a Democratic Governor,
but then Democrats won that office with a new candidate and
came within one seat of becoming the majority in the House
of Delegates, and that helped push expansion into the Win
category. Don’t know if that will be replicated elsewhere,
but I am cautiously optimistic.
As for the rest of those
topics…well, politics is now like a Grade C
straight-to-video vampire/slasher flick named “Cruel
Carnival” and I have little hope for that improving over the
next two years. Maybe in three it will improve.
But to
close on a positive note, inflation in the healthcare sector
continues to rise faster than the overall economy. And that
means that most of us will still have jobs. So you’ve got
that going for you. Probably. But I could be wrong.
Peter Kongstvedt is the Vice Chair of Virginia’s Board
of Medical Assistance Services
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Mark Lutes
Chair of the firm’s Board of Directors, Epstein, Becker &
Green |
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Four trends are converging to allow material positive
progress over the next two years in moderating the trend of
expenditures by self-funded employer health plans. Those
same trends are creating the conditions for improving the
quality and efficacy of the care paid for by such plans.
First, there is an increasing recognition among
self-funded employers that the cost shift that occurred
through high deductible health plans has reached its limits.
Those limits do not simply arise from the increased
competition for talent that employers face. High deductible
plan designs have the potential to incent beneficiaries to
avoid necessary care—both diagnostic and preventive .
Employers are increasingly willing to consider plan designs
that mitigate out of pocket exposure for beneficiaries
willing to use providers who have partnered with self-funded
plans around cost and quality.
Second, various
conceptual frameworks now exist for tracking the cost and
quality of episodes of care. Those frameworks are going to
facilitate new purchasing strategies by self-funded plans.
They have created the framework for plans to seek a “new
deal” wherein providers take responsibility forth cost and
quality of episodes of care. As more episodes are
contracted, plans will be able to “move the needle” on plan
spend and improve outcomes to keep employees present and
productive.
Third, vendors of episodes and care
paths — had the opportunity to “cut their teeth” in CMMI’s
bundled payment programs as conveyors and are now available
to do the contracting and administering that self-funded
plans need to accomplish their goals. Concurrently, forward
thinking administrators have recognized the need for plan
administration that accommodates episode contracting by
self-funded plans. Convenors can incorporate telehealth and
digital components particular in chronic condition episode
solutions.
Finally, providers have increasing
motivation to conceptualize the sale of their services to
self-funded plans around episodes. Some of that emanates
from Medicare’s bundled payment initiatives. Adding to that
is impetus toward recasting physician outputs to support
“advanced alternative payment methodology” classification
for MACRA payment purposes. Moreover, as fraud and abuse law
interpretation evolves to be more favorable toward “gain
sharing”, those provider groupings will have a wider market
than they currently do for their efforts around improving
the cost and quality of the episodes of care they deliver.
They will increasingly perceive the benefit of evolving
their “product” from the sale of procedures, testing and
facility stays to one where they sell episodes, to
self-funded plans and other payors, where they are
materially rewarded for performance against cost and quality
metrics.
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Lindsay R. Resnick
Executive Vice President
Wunderman Health |
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On the positive side, Social Determinants of Health (SDoH),
circumstances that people are born into and live in that
impact them as patients, will receive the attention and
focus from industry stakeholders to make a real difference.
Social forces such as poverty, violence, trauma, racism,
guns, nutrition, and education are key drivers of overall
population health. Research shows that medical care is
responsible for 10% of preventable mortality with genetics
contributing to another 30%. The remainder is attributed to
diet, exercise, social and environmental factors.
With the ‘politics over policy’ bluster coming out of the DC
healthcare scene, social determinants of health have never
been more important. As public programs serving under-served
populations such as CHIP and Medicaid are threatened, and
social health care programs such as Meals on Wheels and
women’s health have become budget negotiating chits,
stakeholders aren’t sitting on the sidelines. Payers and
providers alike are rallying around their communities,
particularly their most vulnerable populations, to help with
a wide range of SDoH service initiatives and education
efforts aimed at improving health status and quality of
life.
Under a more pessimistic lens, we’re on track
to see a significant uptick in the number of uninsured
Americans. The orchestrated ‘sabotage’ of the ACA is
restricting access to coverage and driving up premiums under
a mantra of ‘Let Obamacare implode’. With this backdoor
approach to repealing the Affordable Care Act, there haven’t
been any coordinated, sound policy solutions to ‘replace’
core components impacting health care consumers. Two
approaches put forth as fixes, Short-Term Medical Plans and
Association Health Plans, promise to provide relief, however
they offer limited insurance protection and are best known
by a history of fraud, scams & insolvencies.
The
implications of an increase in the number of uninsured for
healthcare stakeholders goes wide and deep: sustainability
of consumer insurance markets, product-line exits, Medicaid
contraction, and reduced marketplace competition. Hospitals
and physicians are already seeing a rise in uncompensated
care and bad debt. Payers are reengineering risk management
models and product-line pricing. Service providers such as
care management, health technology and revenue cycle
management companies are questioning business models. Of
course, most important are consumers. In today’s
out-of-pocket health care ecosystem, one-in-three Americans
claim healthcare is the biggest financial burden they face.
With insurance markets threatened and continually disrupted,
health care consumers are confused, frustrated and worried
about the future of their healthcare.
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Patrick Horine
CEO, DNV GL Healthcare |
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WHERE I BELIEVE THE MOST PROGRESS WILL BE MADE: THE
OPIOID EPIDEMIC
Given the opioid epidemic’s
related deaths, and its impact on people of all
socioeconomic statuses, I would expect this to get a great
deal of attention, and progress will occur.
There is
no stereotype of individuals this impacts. It impacts both
the young and old, the homeless and the wealthy. And the
damage continues to grow dramatically. In 2001 the number
opioid-related deaths increased was less than 10,000 per
year. In 2016, it was 42,245. That spike represents
virtually all of the growth in the mortality rate of
Caucasian Americans during that time period. And 40 percent
of those overdoses were from prescription medication. In
2016, 19 percent of the U.S. population of patients had some
form of prescriptions for opioids. That is an astounding
number and hard to ignore.
Congress is getting a lot
of pressure from a variety of constituencies, and it has
been forced to provide more funding to fight this crisis.
The Opioid Workforce Act is a bipartisan bill now in
Congress but this is just one small step of the many steps
that need to be taken just slow this epidemic down to some
extent.
In the healthcare sector specifically,
providers are challenged by the droves of patients being
treated either with opioids or are struggling with a
dependence issue. This drives costs up, while constraining
resources. We are also forced to incorporate new policies,
procedures and self-driven changes in patient care delivery
that eventually impacts the care all patients receive.
However, the number of opioid prescriptions being written
have dropped dramatically – more than 20 percent between
2013 and last year. And states such as Florida begin
instituting new laws next month that limit opioid
prescriptions to just three days. That is going to prompt a
lot of providers to rethink their pain management strategy.
I believe this is just the start of many changes ahead
regarding how the U.S. deals with this crisis and the way it
prescribes medicine.
WHERE
THE LEAST PROGRESS IS BEING MADE: ELIMINATING THE ACA
Although each passing day it seems as if the current
Administration is changing or moving away from enforcing
another aspect of the Affordable Care Act (ACA), the way
that law is working is not changing in a huge way. What was
at the top of the agenda on the campaign trail has moved
down the list of priorities. It is difficult decoupling the
ACA from Medicaid funding, yet another big issue that is not
progressing quickly. This is still a struggle and no
impactful solution seems to be on the near horizon.
There have been stalled bills in Congress for various
reasons but given that there is a lot of good in the ACA
that members of both political parties agree on – including
not barring coverage for pre-existing conditions -- it will
come down to what is for the greater good. I would foresee
continued modifications to the ACA, but I don’t believe a
complete repeal is something that will happen anytime soon.
But eventually I think healthcare funding –
including to support Medicare and Medicaid as well as money
to keep the ACA operating – will have to be based on “new
slate” thinking in my opinion. What direction that takes
remains to be seen.
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