Aug 13, 2013

Update: Commission on Long-Term Care

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Back in January I wrote a blog post entitled, Such is Hope, sarcastically ascribing what I felt then was the eventual reality for the Commission on Long-Term Care. Wish I could say I was wrong, but that was fairly put to rest this afternoon in a webinar sponsored by the Friday Morning Collaborative and underwritten by the SCAN Foundation.

Entitled, Long-Term Care Commission: Learn More About It and How You Can Engage, it felt very much like a perfunctory effort to engage public discourse while candidly acknowledging there isn’t much time left available for such input to really matter.    I would say it was like trying to make a silk purse out of sow’s ear, but that would be unfair to the pig. Just as it would be grossly unfair to pin blame for such an outcome on the Commission.

I can only imagine that webinar presenter and Commission Staff Director, Larry Adkins, must have felt like the general manager of a small market baseball team trying to explain to local sportswriters why his team with a $40 million budget can’t be as competitive as the Yankees with a $400 million budget. Because from a policy – and politics – vantage the Commission was set up for failure from the very start.

Created pursuant to the Taxpayer Relief Act of 2012 it was given six months post appointment of its 15 members (which meant the clock started ticking in mid-March) to assess, analyze and report on one of the most vexing social challenges this nation has ever faced. And then Congress did not fund its work efforts until mid-June, leaving three months instead of six. Now, if that doesn’t make it clear where long-term services and support ranks as a public policy concern in Washington, then I don’t know what would.

It was widely held (or at least this was my assertion) that the Commission’s establishment was little more than placation to those stakeholders and constituencies smarting from having given much to see the CLASS Act included in the Affordable Care Act, only to watch it repealed in the Taxpayer Relief Act when shown to be actuarially unviable. And that is truly a shame because failure to address the financial realities of long-term services, support and care is the poison pill that has the potential to dramatically impact the US economy (see graph below depicting potential impact on GDP).

This is a social issue with very stark realities that has been unwittingly discounted as a national policy concern for far, far too long. Though emerging technologies can help improve the lives of those individuals with disabilities and/or chronic disease, the primary cost component of long-term services and support will remain human resources – compensated and uncompensated (both carry economic costs). There is no sliver bullet solution waiting in the wings to change that reality.

After several decades now of floundering around in the dark just how many ways are there to describe an elephant!? We need to take the damn blindfolds off and look at what’s in front of us. Or maybe we leave the blindfolds on and wait for the elephant to make its move. It doesn’t take a great deal of imagination to know how that plays out for those in its way – but apparently more than we currently have at our collective disposal.

Cheers,
  Sparky

Filed Under: Commission on Long-Term Care, Editorials & Opinions · Tagged: , , ,
ACOs, Innovation and Edison
Jul 13, 2013

ACOs, Innovation and Edison

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070209_edison_bulbUnited Healthcare announced this week that it will double to $50 billion annually over the next five years the value of contracts it has with doctors and hospitals based on quality and outcome measures. United is currently paying over $20 billion annually to doctors, hospitals and ancillary care providers under contractual arrangements based on value produced (i.e., quality outcomes over cost).

United’s Chief Medical Officer, Dr. Sam Ho, notes that “any bonuses will have to be earned and no longer a product of turning a page on a calendar – this is not a passing fancy for us. The United Healthcare strategy basically has expanded the accountable care concept to an accountable care platform.” Beyond just the symbolic importance, United has the largest provider network in the U.S. and already has accountable care relationships in place with over than 575 hospitals, 1,100 medical groups and 75,000 physicians.

Now, the glass-half-empty folks in healthcare are going to look at this move by United as somewhere between tyrannical, prehensile or just plain foolish, depending on individual perception, as well as position. They will argue this is just another example of non-provider influences in healthcare stealing more power from the patient. They will remind us again how HMOs failed and that ACOs are but profiteering wolves clothed in retrofitted HMO attire.

Of the two most significant challenges that ACOs face, creating financial incentives that are theoretically aligned with less care instead of more is certainly reminiscent of managed care circa 1990s – and it is a risk that must be aggressively monitored and mitigated. The other primary challenge – the inherent subjectivity of measuring patient outcomes – will have a dramatic impact on many areas of future healthcare delivery, not just provider networks and insurance contracting. It’s a challenge that will have to be effectively addressed if we ever have any hope of increasing access without bankrupting the country.

I think there are two ways to look at these challenges: in the context of the past where abundant evidence of failure exists – or in the future, where evidence of failure has not yet been created. There is a critically important difference between the two. The former is the world of intellects and philosophers, while the latter is the world of innovators and entrepreneurs. Case in point: Thomas Edison.

In failing continually to invent the light bulb Edison once remarked, “I have not failed. I’ve just found 10,000 ways that won’t work.” In similar fashion he once said, “negative results are just what I want. They’re just as valuable to me as positive results. I can never find the thing that does the job best until I find the ones that don’t.”

I am not suggesting that unbridled experimentation is either wise nor prudent when the results impact human lives. But I also choose to resist the defeatist attitude among folks who become overly dependent upon history as a means of defining the future. While those who fail to learn from the past may be damned to repeat it – those who live in the past are damned to avoid innovation for fear of failure.

The underlying premise of the ACO model – financial reward for keeping people healthy, rather than reimbursement of costs for trying to make sick people well – represents a dramatic paradigm shift in thinking for this country that transcends all aspects of healthcare delivery. We should not expect it to be widely embraced in the short run. We should rightly expect a healthy amount of skepticism. And we shouldn’t be shocked if the model fails.

Those allowances, however, should not be permitted to thwart progress toward achieving expanded access to quality care, particularly for the least fortunate among us. If the failures of the past weighed most heavy on the efforts to define the future, we should not have to worry about how to make quality care available because there never would have been the advances achieved worth making available. Edison also once said that, “the doctor of the future will give no medication, but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease. ~ ”

Will he be right?

Cheers,
  Sparky

Filed Under: Accountable Care Organizations, In the News · Tagged: , , , ,
Mandate Delay: Chuckhole or Sinkhole?
Jul 11, 2013

Mandate Delay: Chuckhole or Sinkhole?

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AARepublicans have failed to thwart it. The Supreme Court refused to kill it. A majority of Americans decided not to abandon it through a national referendum election. And it would appear Nancy Pelosi has still not taken the time to find out what’s in it.

Earlier today when asked whether there could be, “any virtue” in last week’s announcement that businesses with 50 or more full-time employees will not have to begin complying with ACA reporting requirements until 2015 (a year delay), she responded, “no – absolutely not.  I don’t think it’s virtuous at all.  In fact, the point is, is that the mandate was not delayed.  Certain reporting by businesses that could be perceived as onerous — that reporting requirement was delayed, partially to review how it would work and how it could be better. It was not a delay of the mandate for the businesses, and there shouldn’t be a delay of the mandate for individuals.”

Mind you now businesses are being exempted from the codified penalty associated with failing to report how many full-time employees they have, the number of hours they work and how much those individuals have to pay for company-sponsored health insurance coverage. While employers are, “encouraged” to provide affordable insurance for their workers in 2014 there will be no penalty if they do not. That’s not a delay? Who is her policy advisor anyway? Dennis Kucinich?

Aside from the side show of political haberdashery that is by no means the singular purview of Ms. Pelosi nor the Democratic party there are some potentially critical ramifications of the Administration’s decision to delay implementation. On the one hand, because a majority of businesses with 50 or more employees already offer healthcare benefits (e.g., 94% of businesses with 50-199 workers offer coverage while only 1% of US workers are employed by companies with 50 or more employees that do not offer health benefits) the delay’s impact on coverage expansion is not going to be significant.

On the other hand, the delay is nothing less than a giftwrapped political grenade in the hands of the GOP and every interest group in opposition to any element of the ACA. Now called into question will be the workability of not only the employer mandate but other elements of the Act, such as the all-important Individual Mandate, Insurance Exchanges, Medicaid expansion and on and on. If critics are right that the ACA is a bureaucratic house of cards built on a shaky table, well then this delay could be viewed as removing the matchbook from under the table’s leg.

There is also the pragmatic side of this discussion that argues it is better to delay and use that time wisely to ensure implementation is as effective and economical as possible. But it would seem to me the implementation of the IM will be more complicated than the EM because of numbers and nature: there are a lot more individuals than businesses, and by their very nature many (most?) of those individuals don’t have the inherent technical wherewithal to collect and provide the information that will be required for the IM. Delaying implementation of the Individual Mandate would, I believe, be a death knell for the ACA, and I think most Democrats (and, of course, Republicans) share that view now.

It may be a monumental task for many Democrats next summer having one foot on the campaign trail and one finger in the Capital Hill dike that is holding back a full repeal of the Affordable Care Act. If they are not already in place, the Administration had better abandon all hope of allowing partisanship to influence resource decisions. Not getting the right people in the right place to withstand the oncoming attempts to sacrificially slaughter the IM and exchanges before they even get started will be a political nightmare for the Democratic party that may take several decades to overcome.

Cheers,
  Sparky

Filed Under: Editorials & Opinions, Employer Mandate · Tagged: , , ,
Healthcare Strategy Lesson From Gettysburg
Jul 9, 2013

Healthcare Strategy Lesson From Gettysburg

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GThis past weekend my son and I traveled to Gettysburg to partake in the 150th Anniversary celebration. It was our third trip together there, the last being four years ago when he was six. I have been there at least eight times myself dating back to when I was his age.

You have to be of a certain ilk to enjoy returning to a small town in the summer sweatbox of southern Pennsylvania so many times expecting it to offer more than the time before. Yet for me it has – and did so again this time. Now, I am admittedly one those individuals whose interest and fascination in the Civil War has been manifested in owning more books on the subject than I should ever hope to read.

That perceived restriction is in good part due to the other areas of interest that compete for my attention. Chief among those, I am particularly interested in most all aspects of military strategy. The word, strategy, after all is from the Greek word, stratēgia (στρατηγία), meaning the art of the troop leader or general – to command and provide generalship.

To be sure, I have learned a great deal about organizational strategy and strategic planning from contemporary writers such as Porter, Mintzberg, Ansoff and Chandler to name but a few, but in due time I have found most of their thinking reflects new ways of viewing the foundational principals of strategy that can be found in the works of military strategists such as Sun Tzu, Alexander, Napoleon, Bismarck – and Robert E. Lee.

On my visits to Gettysburg what I enjoy most is walking the battlefields and just looking at the surrounding countryside. Beyond its purely aesthetic benefit I try to imagine what faculties, training and experience it would have taken to translate observation into action (i.e., if I were a commander, how would I have deployed my forces). What makes that three-day conflict so intriguing for the military historian are the strategies employed by both sides in seeking tactical advantage through positioning. Who familiar with the Civil War has not heard of Little Round Top?

If you are an organizational strategist, you cannot help but appreciate the dynamic relationship of planning and positioning. Effective planning is measured by the ability to achieve a future position while being developed based upon current position. And this is where very often strategic planning at healthcare organizations falls well short of its promise. In my experience, the inability – or perhaps unwillingness – to develop a comprehensive and realistic understanding of their organizational current state before engaging in planning efforts is the single biggest mistake healthcare organizations make. It is also the singular key to successful planning efforts.

Too often healthcare organizations get caught up in the chaos that defines their environment. They spend significant amounts of time and effort trying to understand what is happening around them, unfortunately at the expense of understanding what is happening within their own organizations. The old saying of, “if you don’t know where you are going, any road will get  you there” has recognized validity. But the blinding attraction of imagining a better future can also serve as a siren to organizational leadership causing them to lose sight of practical realities.

The key lesson that was reinforced for me on this latest trip to Gettysburg was that while the ability to envision how infrastructure and topography could be utilized to establish tactical advantage, in order for underlying strategies to be effective the commanders of both armies had to first understand the capabilities of their forces. They had to understand the relative effectiveness of munitions based on distance, angle and elevation. They had to understand how and when troops could be deployed and redeployed between positions. They had to understand why holding a position is ultimately critical to being able to achieve a position.

From a strategic planning perspective, these are lessons I think have tremendous applicability to healthcare organizations, particularly as they seek to make sense of the ever changing regulatory environment in which they operate. If I were to borrow from the old adage, “measure twice – cut once,” I would offer that in organizational strategic planning it is wise to spend one hour envisioning where you want to be for every two hours assessing and understanding where you are right now.

Cheers,
  Sparky

Filed Under: Editorials & Opinions, Strategic Planning · Tagged: , , , ,
Will the Truth Destroy Us?
Jun 30, 2013

Will the Truth Destroy Us?

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Julian-Assange-Cuero1In the New Testament (John 8:32) it was written that, “you will know the truth, and the truth will set you free.” That certainly hasn’t been the recent experience of Julian Assange and Eric Snowden, but then discretion is not always the better part of valor where personal bravery involves risking the lives of others without their knowledge or consent.Snowden

This post is not directly about healthcare public policy, but I don’t think Pub visitors will have to search too hard to see relevant application. And if you bear with me, I try to bring it back home in the end.

In the history of our world great strategic advantages – as often manifested in terms of wealth, power and influence – have been gained through the ability to possess (and then act upon) knowledge and information that others do not. And unfortunately, a lot of public policy throughout history has been crafted and enacted for similar purposes with varying degrees of actual or perceived intent.

Now consider that historic reality in the context of what we are witnessing today with the accelerating proliferation of intentional (and unintentional) electronic content being made available to millions upon millions of individuals at the click of a mouse. Consider it too in recognition of the rogue efforts of Messrs. Assange and Snowden who have ensconced themselves in cloaks of social consciousness that to many of us look a lot more like what Andy Worhal had in mind when he coined the phrase, “in the future, everyone will be world-famous for 15 minutes.”

Whether this emerging phenomenon is couched in the recreational context of social media, the enterprise context of online marketing and promotion or the aforementioned often invoked public policy context of transparency – the resulting abject conundrum facing modern societies and public policy makers is mind boggling. Whosoever has said they would like to know the mind of God has only to reflect upon this reality a bit to know how impossible that is to even begin imagining.

As I see it, there are three aspects to assessing this phenomenon: access, discernment and reasoning. Of these, I think access is the most difficult to assess in terms of its ability to be socially impactful. On one level, it is the great equalizer – the rallying cry of anyone who believes oppression is caused by those who withhold information for the sake of power and influence. On another level, its true value is primarily dependent upon the other two aspects.

To demonstrate, think of the game of Poker. Playing a hand of five-card stud with all cards up ensures everyone has the same information at the same time – yet anyone who has ever played knows there is much more to winning than just knowing what everyone else can see. I am again reminded of that most famous quote from Sun Tzu: “All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” From a public policy perspective, the point is not to confuse promoting access with promoting equality: one does not infer the other without discernment and reason.

Discernment, in turn, cuts the value of access in half, or worse. It represents the ultimate double-edged sword of information management because it is just as easy to manufacture disinformation as it is to make available factual information. Actually, it is in fact easier to create disinformation because the burden of proof is relieved. Being able to discern one from the other, therefore – and to do so more quickly than the next person – will have tremendous strategic advantages in the future. And those who innovate the means to accelerate the process of reliable discernment stand to be very rich.

In what is a sad irony, a key role of government based on history should be the promulgation of public policy that helps effectuate discernment. But the relationship between information and power referenced above is a vicious and virtual simultaneous equation in this electronic age, and nowhere is that relationship more complex and threatening than where it involves elected officials. Just throw corruption into the mix and not only do you have the fox guarding the hen house but now also the lack of any accountability for who put the fox in charge.

And finally of course, although access and discernment may go a long way to at least conceptually equalize the playing field in providing the information needed to make decisions and judgments, that certainly does not ensure everyone of having the same ability to perform either. And this is where I think the unenlightened disconnect of the Gen X and Gen Y generations becomes truly evident. That is not a criticism, but rather a factual reality just as much as one day equals 24 hours while two days equals 48.

To my understanding, the human mind cannot be trained through study or discourse to accomplish the same functional abilities that can be gained through experience. For a wonderful treatise on this subject-matter I once again refer Pub visitors to Malcolm Glawell’s work, Blink. To state this point more plainly, data becomes information when it is organized; information becomes knowledge when it is analyzed; knowledge becomes wisdom when and only as it is allowed to age and gain from the benefit of life’s experiences.

Thus, having more data (i.e., Big Data) can advance the creation of more knowledge and information – but it cannot advance the creation of wisdom, at least not human wisdom (Watson and the like are another story). And this now brings us back full circle to healthcare policy. A lot of people have benefitted and been able to live healthier lives because of the wisdom of healthcare providers, and in particular nurses and physicians. If there were one guiding principal I would like to posit with respect to the development of policies that will impact the storage, dissemination and flow of electronic information in the future, it would be that such policy should not seek to promote the advancement of knowledge and information at the expense of wisdom.

Cheers,
  Sparky

 

 

Filed Under: Editorials & Opinions, Social Media · Tagged: , , , , , , ,
Health Insurance Exchanges: 4th & 10
Jun 25, 2013

Health Insurance Exchanges: 4th & 10

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OFIf you haven’t already heard, the Department of Health and Human Services is in active negotiations with the National Football League to leverage its broad reaching media platform to promote and grow awareness about the impending online health insurance exchanges. The exchanges (or marketplaces, as HHS arbitrarily decided to begin calling them back in January of this year) are really the pinnacle upon which much of the long-term economic success or failure of the Affordable Care Act rests.

The exchanges are to consist of regulated and standardized healthcare plans from which individuals will be able to purchase health insurance that is eligible for federal subsidies. Only 17 states have so far opted to develop their own exchanges (including DC), while an additional 7 are developing partnership exchanges with participation of the federal government. That leaves another 27 states that have chosen to have the federal government develop and administrate exchanges on their behalves. Thus, we could have Terry Bradshaw and Dan Marino now benefitting from both sides of the healthcare paradigm: Nutrisystem on one side and insuring against the consequences of obesity and diabetes on the other.

And in what is no doubt another unintended irony of federal healthcare policy HHS will be choosing to utilize a marketing platform in which the primary communicators are specifically restricted from discussing the health of the individuals playing the game being featured (i.e., due to HIPAA requirements). Just imagine Joe Buck describing the action this fall.

“Ow! That was a tough hit Troy.  I’m not wanting to speculate on whether his knee normally bends all the way forward like that or not, but given where his foot is now resting I’m thinking that hypothetically such a condition could constitute an injury. And hey, while they are carrying away the player whose condition is confidential on a stretcher, this gives us a chance to pause here and remind everyone that you probably shouldn’t wait until your ligaments are shredded before you take advantage of the wonderful discounts now being offered in your state insurance market, er, or I mean exchange . . . did I get that right, Troy?”

Let’s face it: the federal government just doesn’t do marketing very well. As opposed to all of the things it does do very well, right? Wrote it before you thought it. But there have been some notable exceptions too, the source for many of those being the National Ad Council (remember the Crying Indian from the Keep America Beautiful Campaign of 1971?) I still can’t watch that ad without tearing up. Where did that type of talent go and why isn’t such creativity being employed to promote the benefits of the ACA?

Beyond just marketing, the lack of effective communication for the Affordable Care Act has been a complaint of mine dating back four summers ago when the ACA was still a bill being debated in town halls and at dinner tables across the country.  The number one search string for this blog continues to be queries regarding whether or not the ACA will ration knee replacements for seniors. Think there’s a need for more education and awareness?

We have had two presidential administrations now with weak communication skills. In George Bush we had a president whose every public appearance offered new and imaginative ways to use the English language. Now with President Obama we have someone who, to me, frankly just doesn’t seem to like being around people. Now that’s a general disposition I can certainly appreciate – but how one reconciles that disposition with a desire to be effective in public office is a little more difficult to understand.

Invariably, the ultimate effectiveness of a public policy will be more indebted to its implementation than its design. We have seen this administration step on rake after rake in developing marketing and communication strategies that reflect its own arrogance and disconnect with understanding simple yet common realities – like concern over whether or not someone is going to be able to get a knee replacement.

I have read that a primary strategy of leveraging sporting venues such as the NFL to promote the insurance exchanges is to target young, healthy men – who actuarially are less likely to need healthcare. In order for any insurance pool to be financially viable you have to have enough folks paying in that will never get paid out. That makes sense in theory, but think of this: how do the guys you see in all of the beer commercials ran during NFL games compare to the guys sitting around watching the game with you?

Just sayin’

Cheers,
  Sparky

Filed Under: ACA Implementation, Health Insurance Exchanges · Tagged: , , , ,
Mental Health Policy: It’s Not As Hard As You Don’t Think
Jun 19, 2013

Mental Health Policy: It’s Not As Hard As You Don’t Think

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Mental-health-problems-007In my work with healthcare providers and community-based services organizations over the past two years there is one recurring theme that continues to present itself at multiple levels – i.e., personally, professionally and socially: that is the growing awareness of how critically important it is to  integrate mental and behavioral health services with primary care.

Unfortunately, at a popular level mental health in the US has long been synonymous with a disease state – something that needs to be fixed, or at least treated.  The irony of this of course is that we have spent decades worrying about how to fix our healthcare system while all the while forgetting that what we have really had for years is a sick-care system. We care for people when they are ill – we don’t really have an effective system in place to keep them well.

And yet there really isn’t compelling evidence that indicates social investments in health and wellness provide good return on those investments. Education and awareness haven’t had the intended impact. Why?

Could it be that the same underlying drivers impeding the success of health and wellness activities are also manifested as root causes of a variety of physical illness and disease? In other words, in only regarding mental health as a means to cure a problem rather than the promotion of a desired natural state of being are we neglecting a critical element of healthcare reform? I think so.

Admittedly, the policy considerations surrounding mental and behavioral health services are extremely complex, in large part because they interact with so many other policy areas; e.g., Housing, Employment, Criminal Justice and FDA Oversight – just to name a few. Nowhere is this more evident than with one of the most proliferate and threatening elements of mental and behavioral health in America today: addiction.

Rather than try and put forth a meager attempt here to explain the hows and wherefores of addiction, mental health and public policy, I would rather refer Pub visitors to a wonderful post by the One Crafty Mother, Ellie Schoenberger.  In what she titles the most important post she’s ever written, Ms. Schoenberger does a fantastic job of putting a framework around the impact addiction has on society – and how it must be understood from an individual, social and public policy perspective if we are to develop effective policy to address this growing epidemic.

I think it’s a great place to start a discussion, and I hope you will take the time to read it.

Cheers,
  Sparky

Filed Under: Behavioral Health and Substance Abuse · Tagged: , , , ,
A Moment Please ?
May 21, 2013

A Moment Please ?

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image_thumb2Dear Colleagues:
This is a short reminder to those intellectual policy wonks out there who are interested in debating US Healthcare public policy that my firm, Artower Advisory Services, sponsors and underwrites the cost of a private Listserv discussion group. The group was created out of a remnant of what was once known as HEALTHRE – begun back in the mid-90s.

It is free to join, free to participate – and free to just lurk (read the posts of other contributors). Approval is required to help keep the list free of “junk,” but that is an automated process. Participants receive e-mails only from other registered participants that are discussing US healthcare public policy issues (i.e., no solicitation, no advertising, no spam). To sign up, simply click on the link below. You can unsubscribe just as easily if you determine it’s not for you.

Join the Debate!!
  ~ Sparky

Click here to sign up for the HC Policy Discussion Group

Filed Under: Uncategorized ·
May 21, 2013

A Pub Celebration!

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FireworksI completely missed the One Year Anniversary of Sparky’s Policy Pub, which was last Tuesday (business is good, and nobody’s complaining). In the past year I contributed 70 posts that generated  roughly 3,600 views. Whether that’s above, below or right about average I have no idea. But I have had  a lot of fun writing each and every post, which was my goal to begin.

And it has been fascinating to follow the blog stat’s. My number one post continues to be Death Panels Just Won’t Die, which is hit upon most often by folks searching for information on whether knee replacements will be rationed under the Affordable Care Act. It’s for that very reason that post is also my favorite, as I tried very hard in it to combat the misinformation that exists about the Act and how that misinformation has been used to scare our most vulnerable members of society.

So to anyone and everyone who has taken the time to stop by the Pub and read my posts, I want to sincerely thank you for your time and interest. While I find great enjoyment in just having a reason to write, the recognition that comes from knowing someone else finds what I write worth their time to read is very special and very meaningful to me.

I have learned a lot on how to create content that is valuable, interesting and entertaining. I still have a lot to learn, and I am anxious to see where the year ahead will take me – and the Policy Pub.

See you in the Pub!!
  ~ Sparky

Filed Under: In the News, Public Policy · Tagged: , , ,
May 19, 2013

At What Price Transparency

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On May 8th the New York Times headlined the article, Hospital Billing Varies Widely, Government Data Shows.  For Democrats, further evidence that hospitals continue to use their market prowess to gouge the poor and uninsured. For Republicans, further evidence that the Affordable Care Act is failing miserably in controlling costs and empowering consumers. For news reporters, fodder for controversial content. For anyone who has worked in healthcare for any meaningful time – a BIG YAWN (see also, Pick a Price, Any Price, addressing this phenomenon from a Consumer-Driven Healthcare perspective).

It’s not just a non-story but a very old and very tired non-story as well. The cause and effect relationship between the cost of resources that go into delivering care at hospitals and the established charges for that care (i.e, the hospital charge master) bears a weakly causal relationship at best. That reality is a result of the Medicare reimbursement methodology (and, in turn, other governmental programs – e.g., Medicaid – as well as commercial insurers largely adopting very similar approaches).

Healthcare reimbursement in the US is a long and complicated story and one that, from a financial perspective, has seen many winners and many losers – neither of which group represents the individuals that are supposed to benefit from healthcare: the patients. If I can try to sum up the experience of the past half century it would be that effort upon effort has been made to develop systems that fairly reimburse healthcare providers for their costs plus a profit (or income, as it were for the individual).

There are two major problems with cost-based reimbursement: the first is the ability to prospectively allocate overhead costs in a logically consistent manner for a production model that is extremely complicated and constantly changing; the second (and a by-product of the first) is the faulty logic that holds historical production/cost relationships are reasonable predictors of future costs, which belies the effects of innovation, efficiency and productivity improvements.

So why am I jumping on the bandwagon to beat a dead horse. Because I believe the media attention focused on the wide variability in hospital pricing is symptomatic of a much bigger challenge we have in healthcare delivery – and in turn, healthcare public policy: that is, transparency. And in an age of electronic information enlightenment, the public policy issues surrounding transparency both transcend and go well beyond healthcare.

Take for example the two current scandals adding more paralysis to an already ineffective government in DC (as if that were possible).  In the first, the IRS appears to have selectively targeted 501(c)(4) applications based, at least in part, upon political motivations.  In the second, the Justice Department secretly obtained phone records of AP reporters last year stemming from concerns over national security leaks. Information is power – and power easily abused, particularly when the stakes are high as in politics.

The term, transparency, calls up thoughts of truth, honesty, candid, forthright – all terms that are generally consistent with values espoused by the better parts of our nature. So it is a difficult reconciliation that the promotion (or abuse) of transparency can lead to information ending up in the hands of those for whom it was never intended. In other words, as the recording, storage and sharing of electronic information proliferates transparency and privacy are going to increasingly become public policy enemies.

And other than issues of national security nowhere is this confrontation already more acute than in healthcare. Concern over patient privacy has long been one of the primary obstacles to IT adoption in healthcare, and right that it should be. What is more private than our individual health records? But the knife cuts both ways as we know. Under our legal system, quite often the right of privacy is abused as a faux obstacle impeding transparency. This is often manifested in healthcare as over charging third-party payers for services and care not actually provided.

A common theme of the Affordable Care Act is the promotion of transparency with particular emphasis in two areas: patient outcomes and cost data. While the latter faces allocation methodologies and consistency challenges, the former faces the additional challenge of subjectivity in establishing measurements. These are challenges that absolutely must be overcome.

Transparency in healthcare is a necessary prerequisite to patient empowerment, which has the potential to drive organic performance improvement that doesn’t come at the cost of additional regulatory oversight. Transparency is also a prerequisite to determining value (i.e., outcomes divided by costs), which is the basis upon which many employers, commercial insurers and governmental programs are developing new healthcare payment models (i.e., payment for value – not volume).

Throughout history strategies of both business and war have often depended upon the advantage gained from having access to information where others do not. Whenever there are two competitors – or world enemies – transparency holds the potential to give an advantage to one over the other. And so as long as the US healthcare delivery system remains positioned someplace between a market-based system and universal system the push for transparency is likely to continue facilitating unintended and undesired consequences.

Cheers,
  Sparky

 

Filed Under: Editorials & Opinions, Transparency · Tagged: , , , ,
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