Combining payers' claims data with providers' clinical data is an essential element of revolutionizing the delivery of healthcare. But there will be unintended and unfavorable consequences, says one data expert.
I gaze quickly at the watchcorder on my wrist. It's 4:05, my pulse rate is 74 beats per min and the blood sugar monitor is flashing at 81… I missed lunch, again.
I have a long drive home and it's always good to get ahead of the traffic coming out of Boston. It's Jan. 20, 2020, and tomorrow will be my sixth work anniversary at HealthLeaders. On the spur of the moment, I decide to pop into a nearby smoky bar to celebrate.
My belly has barely touched the lacquered mahogany expanse separating me and the bartenders at Phil's when the watchcorder lights up like a Christmas tree. The no smoking light. The no drinking light. The provider, payer, and employer wireless notification lights.
I'm in my 50s and my doctors have advised me to put my bad health habits behind me, especially smoky bars. My watchcorder's GPS, and its array of sensors embedded within the device and inside my collar have betrayed me.
I can count on a finger-wagging at my next primary care doctor appointment, an email from my insurance carrier announcing a $10 surcharge on my healthcare policy, and a letter from HealthLeaders' EAP urging me to seek smoking cessation and alcohol abuse counseling.
This scenario may be years away, but we're already seeing what can happen to personal health data. "There's a whole spectrum of desirable-to-undesirable consequences out there," David Burton, MD, former chairman and senior VP of the Salt Lake City-based data analytics firm Health Catalyst, told me last week.
"It's broader than healthcare—all the data mining that's going on. But it is amplified by the personal nature of the healthcare data. [Data mining for] marketing is one thing. It's another thing for someone to know where I am and what I'm doing."
Burton has practiced as an emergency room doctor and launched a health plan that now has about 600,000 beneficiaries in Utah and Idaho. He says the biggest pitfall providers and payers face in joint data integration projects is their troubled past. "The industry needs to mature to the point that this isn't a shell game where you get a piece of the other side's shell," Burton told me. "This is all about [reducing] cost."
The adversarial days of the past are haunting healthcare data integration projects, he says, noting that among providers, "only want to share the data that will get them paid." On the payer side, Burton says insurance carriers have hidden claims data behind locked doors. "There has been a historically adversarial relationship."
For beneficiaries, "there is always the risk of privacy," Burton says.
Combining the vast payer and provider data sets of consumers' highly sensitive medical history information creates a treasure trove for data analysts. "In the ideal, you have to have access to the claims data, but the insurer also needs to bear down on your care data to get down to the granular level," Burton says. Lax data governance and stewardship are prime risks for healthcare organizations. "It doesn't take much of a breach to ruin your reputation," he adds.
As the pace of data integration projects in healthcare quickens, there are stumbling blocks for payers and providers to avoid, says Jeff Cohen, co-founder of Denver-based Welltok, which describes itself as a "health optimization pioneer" on its website. The challenges, Cohen told me last week, include data access, data accuracy, "how fresh it is," and compliance with privacy protection laws such as HIPAA.
Challenges are also associated with "the technology [itself] and how you're going to mine that data," Cohen says. "It's the type of technology, the cost of the technology, and securing the data. Oftentimes, [picking the wrong technology] causes these efforts to fail."
Cohen says there are inherent challenges in the data for payer and providers. "The 'structure' of the data in healthcare makes these projects difficult," he told me, adding that there within the tremendous volumes of data, there is spotty consistency, lapses in accuracy, formatting variability, and a clinical coding morass.
Welltok is working with IBM's Watson supercomputer to overcome the structural obstacle to healthcare data integration projects and help consumers optimize their health. They are working together to build a new app that leverages Watson's unique ability to comprehend multiple types of data and provide consumers with personalized recommendations that evolve with changes in their activities, benefits or preferences.
With Watson, users can bring in 'unstructured' data, which means data from PDF and Word documents can be gobbled up, just like data stored in traditional databases. That data gets ingested into a massive data store where it can be analyzed.
IBM calls Watson a cognitive technology. "More than 100 different techniques are used to analyze natural language, identify sources, find and generate hypotheses, find and score evidence, and merge and rank hypotheses," according to Big Blue.
For payers and providers launching data integration projects, consumers are the key to avoiding risk, Cohen told me. "There are unintended consequences. You have to think through letting the consumer control the access and use of some of those data streams," he says. "You want people to feel comfortable and to share in the benefits of this sharing of data… Ultimately, the consumer has to be in control."
Data integration projects offer tremendous opportunities for healthcare organizations. But caution is advisable whenever a revolution is swirling around you. "There are going to be some bumps along the way," Cohen told me. "It's not going to be easy. There will be some failures."
One of the hottest healthcare controversies—the two-midnight rule—boils over in comments submitted to federal officials regarding the 2015 Inpatient Prospective Payment System rules.
For the past year, the federal Centers for Medicare & Medicaid Services have been at odds with healthcare providers over a proposed standard for drawing the line between outpatient and inpatient status.
Under the proposed "two-midnight rule," most hospital stays lasting less than two midnights in duration would be reimbursed at outpatient rates through Medicare B. Longer stays requiring hospital admission would be reimbursed at the more lucrative Medicare A inpatient rate.
Congress has placed the two-midnight rule on hold until early 2015. And CMS has provided no new guidance about the patient status regulation in the proposed version of the 2015 Inpatient Prospective Payment System rules released May 15.
But the issue remains a prime concern for providers.
From the institutional to the individual level, providers have raised howls of protest in comments filed with CMS regarding the proposed 2015 IPPS regulations. The deadline to submit comments to CMS was June 30.
In its comment letter to CMS dated June 20, officials at the Michigan Health and Hospital Association said it has been—and remains—opposed to the two-midnight rule since its inception last summer.
"The MHA continues to believe that in cases where a physician or other qualified and licensed practitioner has determined that a patient met national guideline criteria to be admitted as a hospital inpatient, the care provided should be covered and paid by Medicare Part A," the Michigan officials wrote.
"The decision on the appropriate setting of care can best be made by the patient's physician based on the patient medical history, co-morbidities, severity of signs and symptoms, current medical need and the risk of an adverse event without regard to any 'guesses' about how long a patient will remain in the hospital. This policy has resulted in much confusion over the past year for hospital staff, patients, and their families, and can have serious financial implications."
An Argument for the Prior Standard
The two-midnight rule is, in part, designed to address a spike in outpatient care over the past decade. But it misses the mark, according to Joseph Dawood, MD, medical director at Tacoma, WA-based Multicare Health System. In his comments to CMS about the proposed 2015 IPPS rules, Dawood calls on the agency to "eliminate" the two-midnight rule.
"It defeats the purpose of why the rule was instituted in the first place," he said in an interview after submitting his comments to CMS last month, asserting that the proposed rule is arbitrary and penalizes efficient care. "Certain things can be treated in the outpatient setting. Other things can't. They're in between."
Dawood says the prior standard for determining inpatient status makes more sense. "It was good to begin with. Medical necessity was equivalent to inpatient status," he said of the prior standard. "If you want to find a way to pay for short-term patient stays … find a way to pay for short-term patient stays, and keep the determination of medical necessity to physicians."
Officials at the Association of American Medical Colleges say the two-midnight rule would disproportionately hit the group's membership. The AAMC filed its 2015 IPPS comments on June 25.
"Our members have had a lot of difficulty with the two-midnight rule," Allison Cohen, senior policy and regulatory analyst at the DC-based group, said in an interview last month before the AAMC filed its comments. "Duration of stay really doesn't say anything about the patient."
She says the two-midnight rule unduly punishes large academic medical centers. "Based on mission, we have to treat all comers," Cohen said, noting large medical centers in urban areas face a high volume of "high-intensity" patients such as the homeless and people from disadvantaged communities who have suffered with multiple chronic conditions for years.
"Two-midnights was designed to provide clarity when it really hasn't. Then you're also underpaying these hospitals that are treating high-intensity patients… This is really something where clinical judgment should determine whether a patient is inpatient or outpatient."
If the two-midnight rule is implemented, the AAMC wants the threshold-setting clock to start as soon as a physician orders inpatient status. AAMC officials wrote to CMS:
"At high-occupancy hospitals, such as those of the AAMC members, it is not unusual for a patient to have to wait several hours or more for a bed to become available, even after a physician has written an inpatient order…"
"For example, a physician may write an inpatient order in the emergency room at 10 p.m. on a Monday night, the patient may be moved to the inpatient setting at 1 a.m. Tuesday morning, and the patient may be discharged at 7 a.m. on Wednesday morning. Under CMS' proposal, this case would not have qualified… even though the patient required inpatient care across two midnights."
Alternate Points on Time
While CMS officials show no sign of bending or breaking the two-midnight standard in their proposed Medicare payment rules for 2015, they have invited suggestions on creating a "short stay payment" (SSP) policy that would presumably supplement or supplant the two-midnight standard.
In their June 26 comment letter to CMS, American Hospital Association officials called on the federal agency to adopt an SSP that would build a more rational and effective approach to short hospital stays:
"The AHA strongly believes that CMS must appropriately and adequately reimburse hospitals for the care they provide. The existing two-midnight policy fails to meet this standard for medically necessary inpatient stays that span less than two midnights," the national hospital association officials wrote. "However, we believe that a short-stay payment policy, which would supplement the existing two-midnight policy, could reimburse hospitals more accurately for the resources they use to treat beneficiaries during these short stays."
The Michigan Health and Hospital Association is also encouraging CMS to adopt a new SSP policy, with deliberate speed. "If the CMS elects to implement a SSP, we urge the CMS to allow hospitals adequate time to comply," the Michigan officials wrote to the federal agency. "As a result, we recommend that CMS implement the SSP policy for FY 2016."
The Michigan group offers these specific recommendations for developing an SSP policy:
Payment rates would be higher than Medicare outpatient rates but lower than inpatient rates.
Payments rates for surgical cases should reflect that most costs are incurred in Day 1 of services.
The SSP would not apply to the list of short-stay procedures that automatically qualify for Medicare A payment.
Fix It
Ronald Hirsch MD, FACP, is calling on CMS to fix the two-midnight rule.
"I find the rule much more sensible than the old method of admission v. observation decision based on risk, which resulted in the appeal mess that now exists," he wrote in his comments to CMS on the proposed 2015 IPPS rules.
In an interview after he filed his comments last month, the VP at Chicago-based Accretive Health said a preferable payment system would "reflect the true costs" for short hospital stays. "Most of the costs incur in the first day of service, so it makes no sense," he said of the two-midnight rule.
Hirsch says it would make more sense to break down the two-midnight rule into eight-hour increments. The first eight hours could be bundled with the emergency department's bill, he said, with reimbursement rates increasing with each eight-hour increment leading up to the two-midnight threshold. "Clearly, patients who stay eight hours and patients who stay 48 hours use different resources," he said.
Under the two-midnight rule, the differential between outpatient and inpatient care reimbursements is too wide and punishes hospitals for providing efficient care, Hirsch believes.
In heart failure cases, for example, the reimbursement for one day of treatment under observation status is about $1,600 compared to $10,800 if a patient can cross the two-midnight mark, he says. "The hospital is going to get a payment that is much lower than if they were inefficient."
Small-town, rural North Dakota's commercial bidding approach to expanding Medicaid could have big, national implications.
In the two dozen states that have resisted the federal drive to expand the program that funds medical care for the poor, fierce opposition from conservative governors and lawmakers has ground the expansion effort to a crawl.
In several states such as Arkansas and New Hampshire, coalitions of expansion advocates and business-oriented Republican legislators have boosted Medicaid's rolls through the "private option" approach. This enables eligible adults to obtain health coverage through subsidized purchases of commercial health insurance policies on the recently launched individual health exchanges.
North Dakota has developed another approach. It is inviting commercial insurance carriers to bid for the opportunity to provide health coverage for the state's 20,500 newly Medicaid-eligible poor adults. State officials solicited bids last August from carriers that "had to have a policy that covered all the essential health benefits," says Julie Schwab, medical director of the state Department of Human Services.
Two commercial carriers placed bids: Blue Cross Blue Shield of North Dakota, the state's largest health insurer, and Sioux Falls, SD-based Sanford Health. While both bids were accepted, only Sanford decided to move forward with North Dakota's Medicaid expansion effort, which launched enrollment on Jan. 1.
As of early June, 9,000 North Dakota residents had enrolled into Medicaid coverage through Sanford, an integrated health system and the largest employer in the Dakotas. Schwab says enrollment peaked in the first quarter of the year, through the end of open enrollment on the public exchanges, and has been slow but steady since.
"We have hospitals very interested in getting people enrolled to reduce uncompensated care," Schwab says.
Ruth Krystopolski, president of Sanford Health Plan, says the not-for-profit viewed bidding for North Dakota's Medicaid expansion policy as an opportunity that fit with a key element of the organization's core business philosophy. "Sanford is a proponent of public-private partnerships."
Determining the number of previously uninsured Americans who have enrolled in health coverage this year through Medicaid expansion and the new exchanges has been bedeviling statisticians across the country. As an integrated health system, Sanford has insight about how many previously uninsured North Dakotans have obtained Medicaid expansion policies.
"These are people who are showing up for services who weren't paying before," Krystopolski says, adding that Sanford estimates 57 percent of the North Dakota residents who have received medical services through the new Medicaid expansion policies were receiving uncompensated care in the past.
Nearly 25 percent of Sanford's Medicaid beneficiaries in North Dakota had never received medical services before at one of the integrated health system's clinics in the state, according to Krystopolski.
In North Dakota, the private bidding option to Medicaid expansion provided a politically palatable path forward. The political process of moving Medicaid expansion forward nationwide will need all the help it can get, says Nicholas Manetto, director at DC-based FaegreBD Consulting.
"You got the initial group onboard – mostly Democratic states," said the former press secretary for U.S. Rep. Chris Smith, (R-NJ). "The purple states, for the most part, are still evaluating. The others will fight."
Manetto says many Republican lawmakers in deeply "red" states are loath to appear supportive of any facet of the federal Patient Protection and Affordable Care Act, particularly Medicaid expansion. "The arguments against it are focused on the reputation of Medicaid today," he says. "It will be a long slog to move Medicaid expansion in the states that remain."
Two dozen holdout states are still balking at expanding a federal program that would extend access to healthcare to more poor adults and ease the cost burden on providers who treat them.
The low-hanging fruit of Medicaid expansion has been harvested.
There are 27 states that have accepted the federal government's offer to help pay for Medicaid expansion. The other 23 states, mostly politically "red" states across the South, Plains, and Rocky Mountains, are locked in partisan struggles over expanding the program.
The expansion of Medicaid to more poor adult Americans is a key component of the federal Patient Protection and Affordable Care Act. Medicaid expansion and the new federally spawned individual health insurance exchanges are designed to provide healthcare access to poor and low-income Americans, respectively.
Under the PPACA, most individual adults with incomes under 100 to 138 percent of the federal poverty level are eligible for health insurance coverage through Medicaid. The federal healthcare law allows most individuals with incomes from 138 to 400 percent of federal poverty level to purchase subsidized insurance policies on the new exchanges.
"It's a crime. These are the most vulnerable people in our society. They have no other access to healthcare," says Lisa Dubay, PhD, a researcher at The Urban Institute and co-author of a recent report on Medicaid expansion. "We have no way to take care of them and that just seems wrong."
Prior to this year's launch of Medicaid expansion in half of the states, about 10.2 million people nationwide were potentially eligible to gain health insurance coverage through expanding the program, Dubay said. More than half of those people—5.8 million—live in states that have not expanded Medicaid.
"The states that have expanded Medicaid—they're getting a lot of people enrolled," she says. "It really speaks to the need for coverage. People are enrolling because they need it."
Resistance to Medicaid expansion in nearly half the country has created a poverty gap in the federal drive to reform the nation's healthcare system, Dubay says. "We're giving something to everybody except the poorest people in these states."
Court Fight Looms in Virginia
One of the most dramatic Medicaid expansion struggles is playing out in Virginia, where about 400,000 adults are potentially eligible to receive health insurance coverage through the program.
Last week, Governor Terry McAuliffe tried to break the Medicaid expansion impasse with Republican lawmakers by attempting to expand the program through procedural means. On Monday night, legislators in the GOP-led General Assembly blocked McAuliffe's executive power gambit, and the governor's authority to expand Medicaid appears destined for litigation.
"The ability of the governor to move forward will now be settled in court. It's not a favorable outcome," said Katharine Webb, Senior VP at the Virginia Hospital and Healthcare Association. "Somebody was going to go to court no matter what."
The political firestorm raging over Medicaid expansion in Richmond is so intense that Webb avoids using the M-word, preferring the phrase, "closing the coverage gap."
"Fundamentally, you have to get the commonwealth of Virginia to accept the federal dollars," she says, adding that Medicaid expansion advocates such as the VHHA are open to a range of mechanisms to expand the program. "We could design any kind of private option they want. But if we can't get the legislature to accept the federal dollars, we can't move forward."
Hospitals in Virginia are experiencing "real pain" financially from cuts to Medicare payments that began in 2010 to help pay for PPACA implementation as well as Medicare payment cuts linked to federal sequestration, Webb says.
The inability to expand Medicaid in the commonwealth has placed an additional financial burden on hospitals. "[The poor] go to an emergency department and get very expensive care," Webb says. "We can't keep them healthy. It's expensive and episodic."
Reports From the States
Officials from several hospital associations in states where Medicaid expansion is being debated share Webb's hopes and fears about "closing the coverage gap."
Florida
"Since our state has chosen not to accept available federal funds, our patients are not receiving health care coverage and hospitals are forced to make up these unmet costs, which leads to a 'hidden tax' that is shifted to those patients that pay out of pocket or those with private health insurance in the form of higher premiums... Florida has already left $5 billion dollars on the table by not accepting the available federal funds. We continue to lose $15 million each day, and nearly 1 million low-income Floridians remain without affordable health insurance." –Florida Hospital Association, via email.
Maine
"Our preferred answer [to the Medicaid expansion question] is, 'Yes, please,'" said "But, we are open to alternatives. … It's fair to say that while we support expansion we would also be supportive of any reasonable alternative to straight expansion." – Jeffrey Austin, VP of government affairs and communications at the Maine Hospital Association.
Missouri
Hospitals are experiencing the double whammy in Missouri. We're paying for the expansion in other states through cuts that are occurring in the Medicare program, without seeing a corresponding increase in the insured population.
In 2012, the last year we have full data, Missouri hospitals provided $1.1 billion in uncompensated care (charity care and bad debt costs combined). It is reasonable to expect that without new enrollment in a reformed Medicaid system – and only 1 in 8 of the state's uninsured enrolled in the exchange this year – that hospitals' uncompensated care costs will continue to grow." – Missouri Hospital Association spokesperson
North Carolina
"In 2012, our hospitals spent more than $1 billion on charity care to low-income and uninsured patients. Continued cuts to Medicaid reimbursement, especially in light of the state's decision not to expand Medicaid, jeopardize North Carolina hospital services and jobs… North Carolina hospitals understand that Medicaid reform must occur before Medicaid is expanded.
We join providers across the state in supporting the governor's recommendation for a patient-centered, provider-led, risk-bearing model for Medicaid. North Carolina hospitals believe health insurance coverage for everyone in our state will improve access to care, improve overall health and ultimately reduce costs."– Julie Henry, VP of the North Carolina Hospital Association
Utah
"Utah has a fairly robust economy and low unemployment rate compared to other states, which might be mitigating any impact. However, there have been reports by some hospitals of higher uncompensated care levels this year as compared to the past."
The UHA supports Gov. Gary Herbert's alternative to a straightforward expansion of Medicaid – the Healthy Utah Plan would use federal block grants to finance a state-administered Medicaid expansion. We welcome any efforts to provide coverage to those who are in need of assistance, especially those with income at or below 100 percent of federal poverty level." – Utah Hospital Association spokesperson
A social media initiative gives future physician leaders a platform from which to share their ideas on healthcare in an effort to boost debate and engagement within and beyond the medical community.
In a crowded marketplace, it's not necessarily the vendors with the best deals or loudest touts who do the best business. The most successful ones are the ones who know how to engage with customers.
The crowded health insurance marketplace is no different. Wellpoint, with its American Resident Project, is banking on it.
In the first year of the program, the payer has given young medical professionals—future leaders—an online platform to engage with colleagues in healthcare, in provider-to-payer communities, and with consumers in the marketplace.
"The fact of the matter is, we are one voice in the healthcare debate. One of the voices that was not being heard was emerging healthcare leaders… It impacts all of us. The physicians are a key element of the discussion. This is an opportunity to highlight and share ideas," a Wellpoint spokesperson told me.
The roster of bloggers for the American Resident Project started with a dozen fellows, nine of whom have stuck with the monthly blog posting schedule through the program's first year and collected a $2,000 annual stipend. Collectively they have written 50 blog posts and amassed 3,000 registered followers.
Two fellows shared their thoughts on the program with me. Elaine Khoong, MD,received her medical degree from the Washington University School of Medicine this year. Arshya Vahabzadeh, MD, serves as a resident physician in child and adolescent psychiatry at Massachusetts General Hospital in Boston. They have each contributed one blog post each month since February.
Arshya Vahabzadeh, MD
After speaking with them, I sent them each a few questions via email. Their responses have been edited for space and clarity.
HLM: What motivated you to blog about your medical education experiences and healthcare issues?
Khoong: Originally, I had two main motivations. The first was that it provided an avenue through which I could share my perspective with a wider audience. The second was that it provided a valuable learning opportunity for me to improve my ability to succinctly and persuasively communicate my ideas.
In medicine, there is an unspoken understanding that science or evidence is what contributes the most to health. The physician-scientist is revered, and publication in premier medical journals determines prestige, promotions, and respect.
Although I still wholly support evidence-based medicine and plan to pursue a research career, I am increasingly convinced that to improve healthcare (and especially health) the medical community must be less insular.
Elaine Khoong, MD
Vahabzadeh: Throughout my training I have discovered that by fostering an open dialogue, we can identify the challenges and opportunities present in our healthcare systems. I believe that generating this dialogue is of fundamental importance in building more efficient and higher quality healthcare systems.
I consider it my duty as a physician to work toward improving the healthcare system in which I work.
I have personally seen the impact of both blogging and other social media in generating awareness in critical healthcare issues, and helping to instigate change. As a result, I consider highlighting these issues in an open forum as much a part of my mission as my clinical, educational and research projects.
HLM: Why was the Wellpoint blog an attractive forum for you?
Khoong: The American Resident Project is an exciting forum for me because of its focus on medical students and young physicians. We are and will be working in a health environment that is drastically different and arguably more challenging than in the past.
Our society needs innovative ways of delivering and paying for healthcare. These solutions will have to be adopted by the newest generation of physicians, so it's best that we become engaged as soon as we can.
Vahabzadeh: The American Resident Project has been a tremendous resource for my own personal development. The ability to gain mentorship with highly experienced leaders in healthcare and network with like-minded peers has been invaluable.
I also feel that the American Resident Project blog is impactful, not only having its own influential readership, but also having its articles reproduced across several other prominent blogs.
HLM: Do you feel the Wellpoint fellow blogs are a constructive contribution to the process of building greater cooperation between healthcare payers and providers?
Khoong: Serving as a writing fellow has been a great opportunity to hear about payers' approaches to and perspectives on changes in the healthcare landscape. As fellows, we've had the opportunity to speak with and learn from several leaders within the WellPoint organization.
As a future healthcare provider, I feel that I have gained some insight about the payers' perspective.
Vahabzadeh: I am optimistic about the future relationships between patients, providers and payers. All three parties have a set of intrinsic goals, such as the delivery of high quality, cost-effective healthcare. Physicians should continue to play an important role.
HLM: Why is it important for healthcare professionals like yourself to share your views with a wide audience?
Khoong: Healthcare providers have a front row seat to seeing how policy changes have affected the delivery of healthcare. For too long, many of us have sat back while others with much less insight into the healthcare system have dictated how care should be delivered.
It is our duty to our patients to bring our wisdom and expertise to the table to ensure that new policies will improve patient care and the healthcare system as a whole. By at least engaging in the discussion, we gain a better understanding of others' points of view.
Vahabzadeh: While there are a plethora of voices in the healthcare debate, the opinions of frontline healthcare professionals are often unheard. Clinically trained professionals, such as physicians, have a richness of experience, and a deep understanding of the realities of healthcare delivery, that are difficult to replicate.
I believe that by harnessing the thoughts and hopes of healthcare professionals today, it will allow us to build a better healthcare system for tomorrow.
Halfway through the PPACA open-enrollment period, health insurance carriers in more than two dozen states had only about six weeks to resurrect non-PPACA-compliant policies. Medica found a way to revive 81 "zombie," or transitional policies.
Under fire for the persistent failures of the HealthCare.gov site and eyeing low enrollment numbers, President Obama last November extended the life of individual health insurance policies that did not comply with the new federal healthcare law. "You can keep your plan if you like it," he said.
For the more than two dozen states the idea of health plan extensions, which federal officials dubbed transitional policies, may have seemed nightmarish.
In North Dakota, Medica officials started talking about them around Thanksgiving. They called them zombie health plans.
The Minneapolis-based commercial insurance carrier had not planned for these policies leading into the 2014 plan year that began Jan. 1. Rather, says Craig Ashby, a senior director at the company, the zombies snuck up on them.
To comply with the Patient Protection and Affordable Care Act, Medica had a mechanism in place to transition 81 non-qualifying health plans in North Dakota to PPACA-compliant policies. Anyone enrolled in a Medica health plan also had the option to obtain a policy from other available carriers.
"We thought it was going to be pretty seamless," Ashby says.
When the White House changed course in November, halfway through the open-enrollment period for the new PPACA-spawned health insurance exchanges, Medica and other carriers in more than two dozen states had about six weeks to resurrect their zombie health plans.
Medica had sent out thousands of cancellation notices on Oct. 1, the starting date of open enrollment in the exchanges. The second largest commercial health insurance carrier in North Dakota, had potentially 40,000 zombie policies in the state, says Rebecca Ternes, North Dakota deputy insurance commissioner.
North Dakota Insurance Department officials were aware of the transitional policies, but had only a small role to play in bringing them back to life. "It didn't change what we had to look at," Ternes said, noting that it was up to the carriers to decide what to do with their non-PPACA-qualifying health plans.
Medica decided to resurrect all 81 of them in North Dakota. "It was the right thing to do," Ashby says.
By the fall of 2013, Medica had already built 156 health plans into the company's new "comprehensive, full admin system" to manage its health insurance business digitally, says Kimberly Branson, the company's VP of business architecture and strategy.
Software Was Key The payer's new software system was a key factor in handling the sudden surge of zombie health plans, she said. "[The vendor] had 81 zombie plans ready for testing in 10 days," Branson said. "The team spent more time testing than they did building. It was amazing that we were able to be that nimble with something related to regulatory compliance."
As of May, Medica had the highest number of revived zombie health policies in the North Dakota, with 3,173 members, according to the state's insurance department. Sioux Falls, SD-based Sanford Health, the other carrier in North Dakota that allowed transitional policies, had 540 members with revived zombie policies.
Blue Cross Blue Shield of North Dakota, the state's largest commercial health insurance carrier, opted not to allow zombie policies.
The impact of zombie health plans on commercial carriers has varied not only by state but also by business strategy. Aetna, one of the largest commercial carriers operating in the new individual exchanges, took advantage of the option for early enrollment in 2014 health plans to avoid the zombie threat.
"We pushed an early renewal strategy," an Aetna spokesman said. "When the President made that announcement, it gave us even more flexibility. But we already had a strategy in place that made it easier for us to avoid the turbulence others encountered in this area."
It would have been possible for Medica to resurrect the zombie health plans in North Dakota with the company's previous administrative technology, but "the customer experience with that would have been very unpleasant," Branson said.
It would have been impossible to issue new insurance cards by Jan. 1 and "it would have created a customer service situation and a provider service situation. It would have created a PR issue for us. Even worse, it would have created cost," she said.
Disaster Averted
Resurrecting all 81 of Medica's zombie health plans helped the company avert a retention disaster, Ashby said. "We are preparing for their 2015 plan year," he said of zombie health plan members. "We retained more than two-thirds of the folks who enrolled in those plans. … We expect people to stick with us."
Unless federal officials change the rules again, all zombie health plans are slated to die off at the end of the 2016 plan year. "They can live until the 2017 renewal," he said. "We're looking at this on a year-by-year basis."
Branson and her Medica colleagues are "proud of our ability to raise the dead," but the experience had been humbling. "It demonstrates that change on this scale is hard," she said of national efforts to reform the healthcare industry. "There are fits and starts in that transformation."
Since successfully grappling with undead plans, Branson has "somewhat reluctantly" accepted the transformative power of technology. "The [healthcare industry organizations] that are going to be successful are going to be the ones that embrace technology," she says.
One of the biggest independent physician groups in Texas has teamed up with one of the oldest advocates for a well-being approach to healthcare.
Independent physicians in North Texas have taken a step toward value-based healthcare delivery that holds the promise of maintaining their independence.
Jim Walton, DO
CEO of Genesis
On Wednesday, Dallas-based Genesis Physicians Group and Franklin, TN-based Healthways announced the creation of GenHealth. The joint venture is designed to meld individual practices with an innovative approach to healthcare focused on maintaining the highest possible level of well-being, according to Genesis CEO Jim Walton, DO.
Physicians Feel Reform's Tight Scrutiny
"As a large physician organization in Dallas," Walton says, "what we needed to do was find a partner who was complementary."
Genesis, which includes 1,400 physicians, found Healthways' commitment to evidence-based medicine attractive. "Physicians are at their root scientists," Walton said. "Healthways has a track record of leaning heavily on population science… as well as focusing on population well-being."
Most physicians in North Texas have two choices, he said: a financial high-wire act in independent practice or assimilation into a large health system.
While vowing that "physicians are determined to stay independent," Walton says many practices face daunting challenges timing the creation of the elements required to shift from fee-for-service to value-based care delivery. "You can't time it to be all in one year or one month."
Walton describes as Healthways an ideal partner for an independent physicians group because the organization has a "high amount of collaborative IQ" and will help doctors avoid the fate of a "subordinate" relationship with a large health system. "We are an equal partner in the enterprise," he said.
Measuring Well-being
Well-being is at the core of the joint-venture deal, says Bob Porter, president of health systems and physician groups for Healthways, which was formed more than 30 years ago to help diabetes patients manage their chronic disease.
"We have a unique understanding of well-being. Our company is rooted in this concept," he said, adding that Genesis doctors are natural partners for Healthways. "They want to be pioneers in a new model for how they provide care to their patients… It's transformational."
Walton says a major selling point that drew Genesis to Healthways was the well-being index that the Tennessee organization developed with the Gallup polling service. The Gallup-Healthways Well-Being 5 survey is "validated to identify a well-being score," he said. "We think that's the next generation of data patients are going to want to know."
Porter gave a brief description of each well-being survey metric:
Purpose: "Having a sense of a larger meaning to life. … That underlying sense of purposefulness."
Social: "A sense of connection to people. … Healthy relationships."
Financial: "It's amazing the amount of financial stress in the country today… and that has a physical impact on people's lives."
Community: "You need to create a healthier environment… Community has an impact on what you can do to attain well-being."
Physical: "Nutrition and preventative care can help us live a physically healthier life."
"These aren't like slices in a person," Porter explains. "These are like threads in a fabric."
He says physicians are crucial players in helping people attain well-being and that Healthways wants to help Genesis doctors engage with their patients proactively and at the individual level. "That obviously is going to require a team effort – engaging the patients, some of whom might not come into the office… Physicians are a critical lever in helping us achieve this goal."
Porter says a goal of the joint venture is to help Genesis physicians establish more than clinical treatment plans for each patient. "Just creating a clinical treatment plan is less effective," he says. "You have to surround the physical elements with the other elements that improve wellness overall."
Maintaining Well-being
Porter and Walton say their joint venture is as much about keeping people healthy as it is about helping them when they are sick. "Our smartphone apps and other technological solutions are designed to equip people with what they need to maintain their well-being," Porter says.
Combining Genesis' experience with pay-for-performance contracting and Healthways' focus on well-being has tremendous potential, Porter says. "We expect this to grow to a very large program, in North Texas and ultimately other places in the country."
In a lively series of presentations at the America's Health Insurance Plans annual conference, attendees were urged to brace for disruptive technologies, do more with data, and embrace radical change.
We have probably all been to professional conferences where glassy-eyed attendees shuffle from session to session. This year's America's Health Insurance Plans was not like that. Not at all.
There is nothing quite like an existential threat to clear the mind.
For decades, employer-sponsored insurance policies have dominated the market, prompting a wholesale approach to the business. Now, health insurance exchanges and widespread cost-sharing with health plan members is spurring a shift to retail business models.
At the America's Health Insurance Plans Institute 2014— the group's annual conference—in Seattle, there was an unquenchable thirst for big ideas to help insurers tackle the titanic challenge ahead. Here is a sample:
1. Expect disruptive technologies to spark exponential growth.
Keynote speaker Peter Diamandis MD, co-founder, CEO, and chairman of the XPRIZE Foundation, had the audience's full attention from his very first words: "We're living in the most extraordinary time ever. You're in for a wild ride ahead."
Diamandis said exponential growth of disruptive technology and new business models will be in the driver's seat during the healthcare industry's "wild ride" over the next decade.
"The rate at which disruption is occurring is accelerating," the pancreatic surgeon said, adding that faster and cheaper computing power is providing the foundation for emerging technology. "A couple of guys and gals working in a garage can impact a billion people in less than 10 years."
Diamandis discussed an array of technological developments that are poised to upend healthcare providers and payers. The self-described "space geek" held one of the disruptive technologies in his hand on the stage: a prototype "medical tricorder" that is one of the XPRIZE Foundation's projects. It was inspired by the Star Trek franchise.
The first XPRIZE project offered $10 million to anyone who could design and test a vehicle that could propel tourists into space. Two dozen teams from more than seven countries competed. "They spent $100 million to win a $10 million prize," Diamandis said.
The $10 million Qualcomm Tricorder Prize has drawn 330 teams from around the world, and the winner is expected to be named within 16 months. The device is expected to be suitable for home use and include blood chemistry analysis capabilities.
To cope with exponential change, Diamandis' advice to health plans is to launch bold initiatives to adapt to the changing business environment. "Either you disrupt yourself, or someone else will," he said, adding that insurers should consider co-opting innovative new entrants in the market. "It's going to be very hard for you to disrupt your core products… As you implode, you're going to ride [the new entrants] as they explode."
2. Private exchanges are skyrocketing.
The pace of growth in the private health insurance exchange market is eye-popping.
"This market is happening faster than we anticipated," Rich Birhanzel, managing director of Accenture's health administration business service, told me at the conference. "Health plans are talking with their employer customers about it. The private exchange is a top-of-the-mind issue."
Accenture had originally forecast that 1 million lives would be insured through private exchanges this year, but has now revised that figure to 3 million. It expects 40 million Americans to get their health insurance through a private HIX by 2018. "We're at the front end for what we think will be fast adoption," Birhanzel told me.
With about 170 million Americans currently getting policies through their employers, there is a ceiling to private exchange growth, he said. "It's not going to be for everybody," Birhanzel told me. "Employers have a high degree of variability in their benefit offerings."
But health plans and their employer partners that ignore private exchange opportunities do so at high risk, he said. "This is a question employers are going to have to answer, even if the answer is 'no,'" he said.
3. Payers and providers are slowly but surely adopting a wide range of value-based reimbursement models.
David Nace MD, VP and medical director of McKesson Health Solutions, presented research on the shift to value-based healthcare delivery. "We can now say with certainty that healthcare delivery is moving in one direction: towards value-based care," he said.
"The affordability crisis is causing unprecedented changes in the healthcare landscape, the most significant of which is the transition from the current volume-based model to myriad models based on measures of value."
Nace characterized the shift as groundbreaking. "The speed was faster than I anticipated," he said, adding that McKesson's data found a broad expectation that multiple value-based reimbursement models will be present in the market over the next three to five years, with pay-for-performance currently leading the pack.
Nace offered a conservative prescription for healthcare industry stakeholders mulling the switch to value-based reimbursement. "If you're a payer or provider," he said, "don't try to do all these models. You'll crash and burn… Pick the area you think is doable. Once you're successful with that, move on to another model."
4. Harness the rising tide of data.
The unprecedented abundance of data available to health plans poses both challenges and opportunities. "Data is driving how we should manage our plan members and how members want to be managed," Inovalon CEO Keith Dunleavy MD told a packed general session.
He said one of the biggest pain points for payers as they struggle to utilize the flood of available member information is "data latency." A credit card purchase at Starbucks involves connecting several sets of data from multiple sources, but "the transaction takes seconds," Dunleavy said. Insurers face hurdles attaining the same level of data connectivity because "you have all sorts of information that comes out at different rates," he said.
After a health plan member has a "clinical event," the time it can take for an insurer to have all the data needed to process a claim "can sadly be measured in months," the Inovalon CEO noted.
5. Avoid incremental approaches; embrace radical change.
The architect of an innovative primary care model urged AHIP conference attendees to embrace radical change. "It's as if it's 1902 and we want to cross the ocean quickly," said Rushika Fernandopulle MD, co-founder and CEO of Iora Health. "What we need is an airplane; and the way you build an airplane is not by putting wings on boats."
Iora Health's dozen primary care practices serve patients from a wide range of income strata, from low-wage workers in Las Vegas to high-salaried professionals at Dartmouth College in New Hampshire. The practices focus on patient engagement, with four "health coaches" working with each primary care physician, and a value-based payment model that includes bundled payments.
"We've been accused of moving too quickly and upsetting the status quo," Fernandopulle said. "The bottom line is our practices perform better than most."
"Our outcomes are phenomenal," Fernandopulle said, citing a reduction in emergency department visits by 50 percent and cut in overall healthcare spending by about 13.5 percent.
Consumers cast a long shadow over this year's America's Health Insurance Plans Institute annual conference, with speaker after speaker advising insurers how to come to grips with the retail revolution in the healthcare industry.
When it comes to selling health insurance, employers are no longer the only game in town as individuals increasingly become their own purchasing agents on health insurance exchanges.
The shift from wholesale to retail was a dominant theme at this year's America's Health Insurance Plans Institute conference in Seattle June 11–13, with at least one speaker expressing a dire warning for payers.
"It's not coming; it's here. And if you haven't already started reacting, it's probably too late," Ingrid Lindberg, chief customer experience officer at Eagan, MN-based Prime Therapeutics, said after presenting her session on "Building Relationships and Driving Loyalty. "The world is cracking open and most people don't have a clue… People are scared."
The health insurance industry is in danger of suffering the same fate that befell pension funds, said Lindberg, drawing a parallel to how after passage Employee Retirement Income Security Act of 1974, the financial industry moved slowly, but surely, from a wholesale model featuring employer-sponsored pensions to a retail model dominated by 401(k) retirement plans.
The pension firms that failed to adapt paid dearly. "None of those companies survived," she said. "Just look at how much faster [healthcare] is moving. It took 20 to 25 years to unfold in the finance industry. It's going to take about 10 years in healthcare."
Lindberg said health insurance companies must have a strategy to fend off or co-opt new entrants to the market such as Wal-Mart, because experienced retailers have the potential to deliver a superior customer experience. "People have no tolerance for things that don't work for them."
Another speaker at the AHIP conference is a leader of one of the customer-oriented new entrants seeking to disrupt the health insurance industry.
Kevin Nazemi, co-founder of New York-based Oscar Insurance, said his company is taking a retail approach to selling policies on The Empire State's new public exchange. "This is an effort to take parallels from the consumer service world," the former Microsoft marketing director told conference attendees. "We try to explain to you in simple language what you are signing up for."
Oscar's website seeks to break several standard health insurance industry molds. One marketing slogan Nazemi highlighted during his presentation drew howls of laughter from the audience: "Health insurance that won't make your head explode. And if it does, you're covered."
The site features a "care router" search engine that helps members find doctors for specific conditions such as asthma, including breaking down the out-of-pocket expenses for seeking care in different settings.
It also tells members "what's likely to happen" at each setting in terms of tests and treatments. "This is a sense of empowering the consumer," Nazemi said.
Engagement as 'Game Changer'
Engaging consumers is essential for insurance companies operating on the new public and private health insurance exchanges, several AHIP conference speakers said.
"This is a game changer for all of us," said Scott Leitz, CEO of MNSure, the public exchange in Minnesota. "This is a retail business."
Andrew Grossman, a consultant who has worked with Connecticut's public exchange, Access Health CT, told conference attendees that exchanges require a commitment to conduct in-person outreach.
"It's the hardest audience in the world to deal with," he said of individuals purchasing health insurance policies on the public exchanges, many for the first time in their lives. "The only way to do it is to offer direct, face-to-face support."
Grossman said direct support for Connecticut's HIX consumers came in many forms, including town hall meetings as well as grassroots efforts at fairs, festivals and concerts. Promotional materials are ineffective if they are overloaded with legal jargon, he noted. "There has to be a little give in the direction of marketing."
Consumer education is a key factor for public and private exchanges, according to Grossman's co-presenter, Rick Johnson, a director at JD Power & Associates.
"The days of being able to just market to employers are changing," he said.
Harnessing Data Analytics
Insurers need to use data to get to know their individual customers and understand their behavior, said two other conference speakers.
"Humans, particularly patients, are weird, socially driven animals, and it's hard to predict what they do," said Dan Wagner, CEO of Civis Analytics. "Using individual information allows you to develop predictive capabilities," said Wagner, who is credited with helping President Obama to utilize data analytics as a revolutionary political campaign tool.
Wagner's co-speaker, Inovalon CEO Keith Dunleavy MD, said many of the vendors present at the AHIP conference are offering ways to utilize data analytics for consumer engagement. "The driving force behind all of them," he said, "is individual data."
Star Ratings
Establishing a direct connection with consumers is one of the keys to attaining high star rankings in Medicare quality programs, according to the speakers who led the AHIP conference session on "Mastering Medicare Star Ratings and Quality Initiatives."
The personal touch matters when working with consumers, said Ghita Worcester, senior VP for public affairs and marketing at Minnesota-based UCare. "If it's a human being and not a robo-call, we generate high satisfaction from our members," she said of customer outreach efforts.
Stephen Perkins MD, medical affairs VP at Pittsburgh-based UPMC Health Plan, said his company uses mobile clinics for diabetes patients and mammography screening to help providers reach consumers who face obstacles to staying compliant with their medical care.
"We will set this up close to a physician's office," he said. "It has significantly improved [compliance] rates, particularly in rural areas."
"The secret sauce is patient engagement," said Eliza Ng MD, medical affairs VP at New York-based EmblemHealth, who participated in a session on population health.
Turner West, director of Education and Community Programs at Lexington, KY-based Hospice of the Bluegrass, discusses how palliative care can drive value at hospitals in areas such as readmissions, mortality, and patient satisfaction.
Americans live in one of the most medically advanced societies in human history. But sometimes, there is no cure for what ails us.
For those times, there is palliative care, which aims to improve quality of life and contain healthcare provider costs for the most costly patients: Those suffering from serious chronic illnesses.
Palliative care, however, is undervalued. But as the drive toward value-based healthcare delivery continues, anything that is undervalued presents an opportunity.
Turner West, director of Education and Community Programs at Lexington, KY-based Hospice of the Bluegrass spoke with me last week as I was preparing for my upcoming webcast, Hospital-Hospice Collaboration to Improve Palliative Care Outcomes. It seemed only fitting to pepper him with questions.
CC: There are several serious chronic medical conditions that have no clear-cut cure. Does US medicine and the broader society need to redefine the common definition of cure?
West: Improvements in public health and advances in medicine have changed the way we die at the population level over the past century and consequently most of us will die from a chronic condition. Some medical conditions can be cured. Some can be treated by medication or interventions such that there is little effect on your day-to-day routine. And other conditions will be debilitating and adversely affect an individual's quality of life.
The patients who benefit most from palliative care are patients living with one or more serious illnesses. Often our palliative care patients have multiple maladies. For example, a patient may have COPD, diabetes, high blood pressure, and other conditions.
They seem to be in a cycle of health crisis, emergency department visit, hospitalization, discharge, and then another health crisis that returns them to the ED.
For this group of patients, honest conversations about prognosis and goals of medical care and effective pain and symptom management are paramount… There is some tension between palliative care and the traditional medical model in the United States, and continuing education about the value of palliative care to seriously ill patients and the health care delivery system is important.
CC: How can palliative care programs drive value at hospitals in areas such as readmissions, mortality, and patient satisfaction?
West: Palliative care is high-quality care for patients and high-value care for hospitals. As a result of effective pain and symptom management and aligning medical treatments with a patient's preferences and values, the hospital experience is transformed both for the patient and the hospital.
For the patient, results of palliative care include improved quality of life, increased satisfaction with the hospital experience, and a discharge plan that reflects a patient's goals of care.
For the hospital, palliative care teams produce better clinical outcomes and more efficient utilization of hospital resources by eliminating intensive treatments that are inconsistent with a patient's goals of care.
CC: The vast majority of palliative care payments to one of your hospital partners, Baptist Health Lexington, come from Medicare. Can palliative care programs help hospitals benefit from value-based Medicare programs such as the Medicare Shared Savings Program?
West: There is literature that demonstrates palliative care is financially beneficial to hospitals, in particular by reducing length of stay and cost per day for complex, seriously ill patients.
More broadly, palliative care tends to be high-value care for the healthcare delivery system as a whole as there is evidence that palliative care reduces unnecessary trips to emergency departments and hospitalizations.
Because palliative care teams deliver high quality care to patients often at a reduced cost, palliative care will be increasingly more important for health systems as payers look to reinforce and reward high-value care.
CC: The interdisciplinary nature of palliative care seems relatively intense, including medical, legal, ethical, spiritual and cultural factors. What are the benefits of gearing a hospital palliative care program with an interdisciplinary team?
West: There are many sources of pain for individuals living with serious illnesses. Palliative care teams are interdisciplinary in order to respond to the total pain experienced by the patient and family.
Palliative care team members bring specialization in pain and symptom management and communication. Both the interdisciplinary composition of the palliative care team and the expertise of the team members are critically important for enhancing the quality of life of patients and families.
CC: Can palliative care programs fill gaps in care that impact quality of life such as unmet pain or symptom needs?
West: Unequivocally, palliative care teams enhance the quality of life of seriously ill patients and their families, and this has been established and corroborated by a large body of medical research.
Palliative care teams have expertise in complex pain and symptom management and in facilitating conversations about prognosis, values, preferences, and goals for medical treatment. Effective pain and symptom management and aligning medical treatment with a patient's goals of care leads to an enhanced quality of life for both patient and caregiver.
CC: Are there psychological and cultural hurdles to be cleared in the field of palliative care inside and outside the medical community?
West: Certainly in the hospice world, many patients receive services very late in their terminal illness, and in many cases this can be ascribed to the patient's or family's unwillingness to come to terms with the fact that death is occurring. Elisabeth Kubler-Ross wrote extensively about our "death-denying" culture.
Advances in medicine and technology also contribute to this sense that there is always something else that can be done to either cure disease or enable an individual to live longer with minimal interference to daily activities.
Certainly there are many examples of this affecting health care, including lack of advance care planning, physicians and other providers avoiding difficult conversations about poor prognosis, underutilization of hospice and palliative services, and aggressive medical care late in life. The key to addressing barriers to palliative care is increased medical and community education.
A HealthLeaders Media webcast,Hospital-Hospice Collaboration to Improve Palliative Care Outcomes, will be broadcast on Thursday, June 12, 2014, from 1:00 to 2:30 p.m. ET. Speakers from Hospice of the Bluegrass and Baptist Health will share tested strategies for building effective hospice-hospital partnerships to improve clinical and financial outcomes.
