Jan 29, 2013

Mental Health Realities

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As mentioned here before, WordPress allows me to track blog visits based upon search strings that were used to refer visitors to the PolicyPub.  I have noted recently a prevalence of searches on Mental Health, likely owing to the national discussion and debate on Gun Control now taking place in lieu of the Sandy Hook Elementary shooting in December.

I recently wrote a post (Obama’s Opportunity Missed) explaining why I feel the President missed a golden opportunity to raise the level of social awareness and consciousness concerning the difficult and growing challenges that mental and behavioral health present to our society.  As a follow up to that, I wanted to share with Pub visitors information that was recently presented by Pamela Hyde, the Administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA), at the Third Annual Public Health Law Research Meeting in New Orleans on January 18th.

According to Ms. Hyde, “people are just beginning to wake up to the knowledge that behavioral health issues are so common . . . “ yet among the eight million people worldwide in the past year who had a mental illness or substance abuse disorder, only 6.9% received treatment.  She added that, “the country has to spend as much time helping children develop their emotional skills as they do their soccer skills.” 

Links to Ms. Hyde’s slide presentation, data cites, and meeting Q&A can be found at the bottom of this post.  Provided below are a few snippets taken directly from her presentation that I found particularly impactful.

Prevalence & Incidence
Approximately one-half of all Americans will meet criteria for mental illness at some point in their lives

Mental and Substance Use Disorders rank among the top 5 diagnoses associated with 30-day readmissions, accounting for about one in five of all Medicaid readmissions (12.4 percent for Mental Disorders and 9.3 percent for Substance Use Disorders)

Comorbidity
7% of the adult population (34 million people), have co-morbid mental and physical conditions within a given year

Co-morbid depression or anxiety increases physical and mental health care expenditures

Impact on Physical Health
24 percent of pediatric primary care office visits and ¼ of all adult stays in community hospitals involve Mental or Substance Use Disorders

Adults who had any mental illness, serious mental illness, or major depressive episodes in the past year had increased rates of hypertension, asthma, diabetes, heart disease, and stroke

Cost of Care
Average monthly expenditure for a person with a chronic disease and depression is $560 dollars more than for a person without depression

General medical costs were 40% higher for people treated with bipolar disorder than those without it

Perception of Value
Mental illnesses account for 15.4% of total burden of disease, yet mental health expenditures in the U.S. account for only 6.2%

The public is less willing to pay to avoid mental illnesses compared to paying for treatment of medical conditions

Top reasons for not receiving treatment include:
     • Inability to afford care (50.1%)
     • Problem can be handled without care (28.8%)
     • Not knowing where to go for care (16.2%)
     • Not having the time (15.1%)

The SAMHSA Web site referenced above includes a large knowledgebase of useful, understandable resources and information on mental/behavioral health and substance abuse.  If you are interested in learning more about the very difficult public policy issues surrounding Mental Health, I invite you to check it out.

Cheers,
  Sparky

Link to Slides: Click …
                                    
Link to Q&A: Click …
                                   

Filed Under: Good to Know, Mental Health Awareness · Tagged: , , , ,
Jan 22, 2013

Acute & Post-Acute/Long Term Care: How to Have That Difficult Conversation

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We’ve all experienced times in our lives when we have to face a difficult conversation and the angst with which we anticipate its completion.  An example might be the nervousness and anxiety of approaching someone to whom we are romantically attracted.  Another example would be the dread and sorrow of approaching someone with news we know will devastate them.  More relevant to my purpose here are the myriad types of challenging but routine conversations that fall well within those two extremes.

In particular, I am referring to the conversations that are now beginning to take on a true sense of importance and urgency between leadership teams at acute care organizations and post-acute/long-term care (PA/LTC) organizations.  Whether driven by regulatory influence (e.g., the Hospital Readmission Reductions Program), new payment models (e.g., bundling pilots), cost containment initiatives or wanting to truly develop a full continuum of care, hospital administrators are getting earnestly engaged in wanting to understand how PA/LTC providers can help them reduce average length of stay and avoidable readmissions.

For healthcare organizations used to operating in silos, discussing subjects like strategic objectives, market positioning and perceived organizational strengths and weaknesses with other healthcare providers – let alone non like-kind providers – can be a most uncomfortable experience.  And that discomfort can cause such discussions to be entirely unproductive.  Time-wasting in today’s healthcare environment will not only put an organization at a competitive disadvantage – it is a short and narrow path to economic collapse.  So the obvious challenge is how to make sure such conversations – or meetings – are both meaningful and productive. 

From what I have observed and experienced over the past couple of years as a party to a number of these leadership conversations, there are some basic, yet very important, guidelines you can follow to help ensure the time you spend is productive and of value.  I have shared these below and hope that you find them useful.

Create a Statement of Purpose
How many times have you been to a meeting where a colleague says to you under her breath, “why are we here?” A Statement of Purpose should provide a clear articulation of why you are meeting and what must absolutely be accomplished for it to be a valuable use of everyone’s time.  For example, a Statement of Purpose might read,
We will meet on <date> for the express purpose of creating a shared understanding of the joint-venture opportunity being considered, the attendant opportunities and risks, and whether both parties have sufficient interest in pursuing the joint-venture further.  Evidence of that interest will be satisfied if the parties enter into a Letter of Intent within 30 days following the meeting.

Drill Down on Your Value Proposition
Before meeting, have a very good understanding of why a potential venture or opportunity would be of value to your organization.  Define that value nominally (i.e., put it into real numbers).  For example, know that if successful, the project will add a net cash benefit of $X annually to your organization.  It is typically difficult to quantify economic success given the level of ambiguity at the early stages of discussion, but most executives I have worked with are usually surprised at the analytical specificity achievable when they are forced to work through assumptions and parameters.  And it is the very development of those assumptions and parameters that should serve as the meeting content (see next guideline).

Avoid Meeting Until There is Something to Discuss
I had a physician colleague tell me once that thousands of great ideas are presented and discussed at lunch tables across the country every day, yet very few ever make it back to the office – let alone to the type of initiative that merits having two organizations meet to discuss.  As Ashleigh Brilliant once wrote, “Good ideas are common – what’s uncommon are people who’ll work hard enough to bring them about.”

Generating interest and enthusiasm for a good idea (e.g., a joint venture) is usually a pretty enjoyable experience, so there is the natural inclination to want to meet and share that idea.  In my personal experience – and a lesson I had to learn the hard way – this is where most often ideas go to die.  They literally get talked into submission from exuberance over the imagined benefits before they can gain any traction and the support necessary to make it past lunch.

This is why taking the time and effort to develop the business case for a proposed venture before bringing the two parties together is so crucially important.  The level of detail should obviously be in sync with the desire to maintain a strong position of negotiation, but both parties must be able to understand the fundamental framework and objective reasoning that merit the time being committed by individuals attending that meeting.

Set Discussion Boundaries
Both parties should know in advance what they are willing and prepared to discuss.  As mentioned above, there ought to be a cognizant recognition that while bargaining in good faith should be a given, information is power in negotiation.  And while meeting to determine whether a potential venture merits further investment may not represent significant exposure, all too often information is exchanged without due consideration.  Of course, having a nondisclosure agreement in place is wise, and the terms and conditions will provide valuable guidance in establishing your conversational boundaries.

Have the Right People There – And Have Them Focused
With the advances made in information technology over the past decade, the ability to communicate with someone has never been easier – yet being heard has never been more challenging.  Competing for attention is one of the greatest singular obstacles to advancing organizational initiatives today.  It often requires a fair amount of dogged commitment, humility and political savvy to coordinate schedules in a way that gets the right people at the meeting in a frame of mind to concentrate on the meeting content.  But it is an effort that cannot be minimized without jeopardizing success.

Consider Using a Facilitator
Having a productive meeting often depends on the ability to stay focused on the deal points and ensuring you have the right levels of individual participation.  Personality types often dictate that level of participation, and without an objective means of balancing certain types, a few people can dominate the discussion – even if they aren’t the ones empowered to make decisions. 

Having a clearly defined agenda and a third-party facilitator that is familiar with your industry and business can add significant value.  That individual should have experience in effectively managing discussions and debate, ensuring that key concepts are introduced at just the right moments and have the ability artfully keep participants focused on the primary elements that comprise the Statement of Purpose.

Summary
Environmental trends and drivers are pushing acute and PA/LTC leadership teams to accelerate their interest in partnering on market initiatives that require collaborative efforts.  From the very beginning, the success of such initiatives depends on the ability to engage in meaningful and productive conversation.  By having the discipline and foresight to follow some basic guidelines those leadership teams can help avoid wasting valuable time.

Cheers,
  Sparky

 

Filed Under: Helpful Advice, Integrated Care Delivery · Tagged: , , , ,
Jan 16, 2013

Obama’s Opportunity Missed

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The human mind can be a very scary place.  There is where originates the electrochemical impulses that direct the body in carrying out some very heinous acts – such as the violence witnessed in Newtown, Connecticut just over one month ago today.

The mind can also be a fascinating study of unimaginable intricacy. In some infinitesimally small space wherein exists a hidden mystery explaining the difference between a physiological existence and conscious existence lies all of the energy necessary to create and destroy humanity (sort of like Einstein’s Special Theory applied to neural mass). Can you think of a more interesting basis upon which to initiate a metaphysical discussion over Creationism?

But alas, this isn’t Sparky’s Philosophy Shop.  As alluded to above, the topic of this post is Mental Health and the policy discussion it is receiving in lieu of the fatal connection between mental illness and gun violence.  Earlier today, President Obama announced a Plan to Protect our Children and our Communities by Reducing Gun Violence.  The plan outlines a number of initiatives – including 23 Gun Violence Reduction Executive Actions – that, taken together, is an attempt to put forth a reasonable agenda on gun control policy.

Of course, the cable news networks will be filled over the days ahead with talking heads who would have us believe we are now full bore on the doomsday expressway with the only two exits ahead being socialism or anarchy – and little room in between to continue having intelligent and constructive debate on how to find the most broadly acceptable policy balance between honoring and defending the second amendment while doing whatever is possible and pragmatic to prevent future tragedies like that at Sandy Hook Elementary School.

I hope rigorous and informed debate continues on the role mental illness plays in the tragedies that have brought us to this place.  And I desperately hope that debate will raise awareness of just how acute the challenges are we face as a society  resulting from mental and behavioral health issues.  If you have not already read Liza Long’s blog post, I am Adam Lonza’s Mother, it poignantly depicts the painful and helpless reality that mental illness can cause in a family.

I believe the President’s Plan on gun control offers some reasonable ideas, most of which probably won’t go very far in the House – partly because their source is the White House and partly because of understandable concerns by some House members that significant elements of their constituencies equate any discussion of gun “control” with an armed government takeover.  But the politics of gun control aside, the reality is that very often a mentally ill individual with an agenda can kill with or without a gun.  Getting guns out of the wrong hands does not address this challenge.

Or, to look at it another way – if I had to choose one investment over the other as having a greater long-term probability of reducing gun violence, I would choose investing in mental health over more gun controls.  Yet while mental health is addressed in the President’s plan, it seems like it was almost an afterthought.  The irony is disturbing because not only do policy issues stemming from mental illness and gun violence warrant a great deal more attention – but so do a host of other issues that recognize the growing awareness of the costs that poor mental health have on society – especially healthcare costs.

Although it is still a very long journey, every day science advances a step closer to understanding the raw dynamics of how the mind and body work in synthesis to have a dramatic impact on our health. Community and individual health and wellness initiatives are now focused on taking a holistic approach.  The connection between mental health and chronic disease and disability, particularly in the senior population (see my post on substance abuse among that population) offers promising opportunities to reduce disease incidence and increase the value of treatments.

To achieve the benefits of those opportunities, however, mental and behavioral health services must be socially and culturally viewed on a par with traditional medical/health services.  In defining essential health benefits that insurance companies must provide, the Affordable Care Act helps advance that initiative.  It falls short, however, of achieving true parity status for mental and behavioral health services.

The President attempted to address that discrepancy today through executive order by committing to finalize health parity regulations – and he also outlined the need to bolster mental health counseling and awareness through additional resources that will certainly not be forthcoming from a Congress (which includes the Senate) that cannot even agree to disagree for fear of reprisal (or am I getting that confused with accountability).  But I think the President missed a tremendous opportunity today to raise awareness and urgency on the critical role mental and behavioral health services must play in developing a healthcare delivery system that is truly committed to improving outcomes while reducing costs.

Cheers,
  Sparky

Filed Under: In the News, Mental Health Policy · Tagged: , , , ,
Jan 10, 2013

Such is Hope

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Among the numerous provisions included in the Taxpayer Relief Act of 2012 impacting healthcare organizations was the establishment of a new Commission on Long-Term Care.  Now we can rest easy that the demographic tidal wave threatening to destroy our society has (or at least can now) be averted.  Excuse the sarcasm, but it seems I’ve been here before, haven’t you?

While there are specific expectations and deliverables outlined in creating this new commission (see below), vesting authority in 15 individuals to investigate and discuss the problems and then suggest what are sure to be already well-documented ideas offered as solutions doesn’t quite seem to have the legislative teeth one would expect if this effort were to be any more seriously supported than was CLASS.  Assigning yet another committee to tackle the fiscal realities of our nation’s future long-term care challenges is a bit like – well, like the way our elected leaders addressed the Fiscal Cliff.

As I predicted in my post on December 26th, what played out during the first few days of January in Washington was largely just another political fiasco of kicking the can down the road once again.  And if you have had any experience in long-term care you most likely consider that par for the public policy course, so from that vantage I guess the new Commission should be taken in stride.

Section 642 of the Taxpayer Relief Act permanently eliminated the CLASS Act, which was included as Title VIII of the Affordable Care Act.  CLASS (Community Living Assistance Services and Supports) was developed as a voluntary, government-administered program that would have provided a basic lifetime benefit of at least $50 a day (indexed for inflation) in the event of prolonged physical illness, disability, or severe cognitive impairment (e.g., Alzheimer’s disease).  At its core, CLASS was an attempt to provide individual savings incentives to defray the potential future costs of long-term care where private long-term care insurance has largely failed as an aggregate solution.

As may be recalled, in October of 2011 HHS informed Congress that it was unable to ensure the program’s financial solvency over the 75-year period that was statutorily required.  Shortly thereafter (as in the time it takes between a green light and the New York cabbie behind you to honk his horn crossing 42nd Street during rush hour), Secretary Sebelius and the White House quickly abandoned whatever support there may have been.  And thus, death be to CLASS.

The sad financial irony of this, of course, was that CLASS comprised roughly one-third of the projected $210 billion in savings the ACA was to garner between 2013 and 2019.  Indeed, substantial projected savings were verified by the CBO during the 10-year scoring window, but that did not account for the program’s benefit obligations over a 75-year period (i.e., the program would not limit the benefit duration and all future payouts had to be funded entirely by premiums paid by individual participants).

So in what can only be seen as a standard course of appeasement, Section 643 of the Taxpayer Relief Act created the Commission on Long-Term Care.  The Commission’s objective is to, 

“…develop a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports, including elderly individuals, individuals with substantial cognitive or functional limitations, other individuals who require assistance to perform activities of daily living, and individuals desiring to plan for future long-term care needs”"

See, I told you you’d feel better.

The Commission is to consist of 15 members appointed not later than February 2nd by the President and majority and minority leadership from both Houses of Congress.  Further, it is to be comprised of individuals representing  consumers, older adults, individuals with cognitive or functional limitations, family caregivers, direct caregivers, private long-term insurance providers, employers, state insurance departments and State Medicaid agencies (all represented by 15 individuals mind you – what an eclectic group that will be).

In developing a plan to address future long-term care needs, the Commission is to provide recommendations that address where and how needed services and supports are currently provided for (or not) through existing governmental programs; improvements necessary in such programs to ensure future availability; and a variety of issues related to workforce adequacy, skills and capabilities (the most important element of this effort, in my opinion).

Then, no later than six months following appointment (i.e., early August of this year) the Commission is to provide (assuming it is in majority agreement) a comprehensive and detailed report, including any legislative or administrative action necessary to carry out its recommendations or proposals.  Subsequent to that (within 10 days) the “Commission bill” will be given to the President, the Vice President, the Speaker of the House of Representatives and the majority and minority Leaders of each House of Congress – and then subsequently introduced as proposed legislation into the House and Senate (by request).  The bill will also be made available to the general public at or around the same time.

I don’t know whether this new Commission holds out any greater promise of addressing the monumental challenges we face in trying to accommodate the future long-term care needs of an aging population without bankrupting this country.  My skepticism is not so thinly veiled in what I share above.

But I am more than willing to take the high road and give it my best shot.  I would like to think that readers stopping by the Policy Pub have a lot to offer in the way of input and ideas the Commission should consider.  To that end, I will do what I can in this space to track its formation and progress – and advise when and how those ideas might best be communicated collectively.

Until then, a quote from someone I know would have made a wonderful Pub patron:
”Such is hope, heaven’s own gift to struggling mortals, pervading, like some subtle essence from the skies, all things both good and bad – as universal as death, and more infectious than disease!”
  ~ Charles Dickens

Cheers,
  Sparky

Filed Under: Commission on Long-Term Care, In the News · Tagged: , , ,
Jan 7, 2013

The Politics of Dying in America

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Please take a few minutes to read the post, One Example of End-of-Life Care in America, written by Dr. John Henning Schumann on his blog, GlassHospital.  It relates the real life story of a general internist’s experience treating a frail 94-year-old female patient with advanced Alzheimer’s disease and multiple medical issues.  It shares the difficult, non-medical oriented challenges that cut a wide swath across the care continuum when dealing with end-of-life care: the patient, her family, the hospital administration, the attending physician and other clinicians at the hospital.

Several healthcare policy themes are also inherent in this story: the apparent shortcomings of clinical integration and misalignment of incentives that are too often manifested in simply poor communication between clinicians, the challenges with assignment and fulfillment of responsibilities pertaining to an advance directive, the relative effectiveness of evidence-based medicine and how to meaningfully and consistently define transparency in lieu of individual privacy and respect for the patient.

Well over a decade ago I first heard the phrase, “the challenge with our healthcare system is not that we live too long – it is that we die too long.”  I wish I knew (or could remember) to whom that remark should be attributed, as I think it aptly describes the ground zero crossroads of public policy discourse we face in healthcare.  For all of its publicity and ability to bring out the rancor worst in ideologues, the Affordable Care Act is anything but a comprehensive policy solution.

The modest attempt made in the 2009 pre-ACA bill, HR 3200, which would have compensated physicians for providing voluntary counseling to Medicare patients about such demonic concepts as living wills, advance directives and end-of-life care was chastised as being tantamount to Death Panels by the hopefully soon-to-be-forgotten Sarah Palin.  Incidentally, the use of that characterization was given “Lie of the Year” honors by Politifact, considered one of FactCheck’s, “whoppers” and referred to as the most outrageous term of 2009 by the American Dialect Society.

Nonetheless, the characterization continues to resonate in American culture and it highlights the to-be-expected tremendous difficulty in developing a rational policy approach to what for most of us is a very irrational subject: death and dying.  And as Dr. Schumann’s post demonstrates by example, those involved in making such policy are most often not those traversing the ground zero crossroads on a daily basis and having to face the difficult choices with patients and their families.

On the other hand, that I am writing to share with you a blog post expressing the firsthand frustration of a physician in the trenches I think reflects a paradigm shift in our society and culture where the art of medicine is emerging out from under the shadow that has been generations of members-only collegiality and exclusivity.  I found the candor and directness of Dr. Schumann to be both refreshing and constructive.  That it is made available for public consumption is an example of many such blogs now being written on a daily basis by clinicians across the country.

Like many of the healthcare policy issues facing us, end-of-life care holds little hope of ever having a likeable policy solution.  The issues surrounding it are just too emotionally laden with undesirable choices.  But policies that have the best chance of broad support and sustainability will be those developed under the full light and disclosure of the realities that clinicians like Dr. Schumann are willing to share.

Cheers,
  Sparky

Filed Under: Editorials & Opinions, End-of-Life Care · Tagged: , , ,
Speak Up!! Join the Policy Discussion Group
Jan 2, 2013

Speak Up!! Join the Policy Discussion Group

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1336950133_1 Happy New Year!!

As we turn the page on 2012 – a year that, for good or ill or somewhere in between as is yet to be determined, will likely be looked back upon as the launching of tremendous change in the US Healthcare Delivery System – I wanted to begin 2013 by thanking those who have taken the time to stop by the Policy Pub, particularly if you have taken time to read my contributions.

Since I started this blog in May of last year I have received over 2,040 visits from 25 countries by latest count.  From what I have researched, that is a rather modest beginning but nonetheless sufficiently encouraging from my perspective (because I truly enjoy writing).

I also want to take this opportunity to remind pub patrons and visitors that Artower Advisory Services is sponsoring a Healthcare Public Policy Discussion Group.  Participation is free, and registration is as simple as providing your name and e-mail address.  You will not receive any solicitations or promotional e-mails by joining.  You will, however, have the opportunity to participate in a lively discussion of current and emerging topics impacting US healthcare policy with industry colleagues representing a wide variety of backgrounds, interests and concerns.

To join the US Healthcare Policy Discussion Group just click on the hyperlink above – or the Join the Debate image just to the left of this post.  Also check out my earlier post if you’d like more background on the discussion group.

Looking forward to sharing more thoughts and insights – and hopefully challenging your thinking regardless of ideologies and/or beliefs.

Cheers,
  Sparky

Filed Under: Healthcare Policy Discussion Group · Tagged: , ,
Healthcare 2013: Get Ready for a Wild Ride!
Dec 26, 2012

Healthcare 2013: Get Ready for a Wild Ride!

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cedar-point-4With the impending blizzard ready to ruin, or at least significantly delay, one of my favorite holiday traditions – taking down the outside lights and decorations – this seems like a good time to throw another log on the Pub’s corner stove and set upon contemplating what’s just around the bend.  With implementation of the Affordable Care Act now ready to swing into full motion in 2013, might as well use this downtime to start preparing for the wild ride ahead.  So here are a few items on the horizon.

Fiscal Cliff Resolution
As written about here before, how Congress and the Administration resolve – or don’t – the Fiscal Cliff will significantly impact implementation of the Affordable Care Act in 2013.  Neither political party wants to risk being blamed for going over the cliff; yet neither wants to be blamed for, “giving in” on principles.  The resolution? Why, kick the can over Father Time’s head, landing squarely in Baby New Year’s lap once again, of course.  That means having temporary legislation in place to avoid the most feared short-term economic impacts (e.g., avoidance of broad income tax increases, extension of unemployment benefits and forestalling the nearly 30% reduction in Medicare payments to physicians).

Unfortunately, what it is does not mean is any real sense of stability or reliable framework for budgeting and appropriating funds.  Though funding for many of the ACA provisions was appropriated as part of the Act, the interconnected nature of the federal budget means that discretionary funding will still have a great impact on HHS departmental planning and implementation.

Further, it is likely that any meaningful and sustainable fiscal policy compromise will involve some legislative modification to the ACA – i.e., particularly in lieu of the need to control entitlement spending.  So until a long-term bargain can be reached there will continue to be a lot of uncertainty on the actual means, methods and timing regarding key provisions of the ACA.  Notwithstanding such uncertainty, below are a few of the more significant items that are supposed to be implemented in 2013.

Health Insurance Exchanges
Health Insurance Exchanges (HIEs) must be certified and operational by January 1, 2014.  At the latest count,  upwards of 30 states have opted not to establish health insurance exchanges on their own, which by default means the federal government will have to set up HIEs in those states.  While portions of the underlying technological and operational infrastructure can be duplicated from state to state, there is still an enormous implementation effort beyond what was anticipated.  Implementation will likely be delayed even with a fiscal agreement in place.  Likely too, will be modification to the Minimum Essential Benefits definition in lieu of projected exchange plan pricing.

The HIEs will get a lot of media attention in 2013 because of the direct impact they will have on millions of individuals and the lightening rod they are likely to become as a portended bell weather of ACA failure once implementation challenges and frustrations emerge.  At the same time, private insurance exchanges – seizing the opportunity to gain comparative perceptual market advantage – will flourish.

Medicaid Expansion
To be – or not to be – morally supportive of providing access to life saving healthcare to your poorest citizens, that is, as some have framed the debate over Medicaid expansion.  Effective January 1, 2014, Medicaid coverage is to be expanded to include individuals between the ages of 19 up to 65 (parents, and adults without dependent children) with incomes up to 138%  of the Federal Poverty Level (based on modified adjusted gross income).

More than likely, most states will find it politically unpalatable to opt out of the federal expansion once the dollars begin flowing out of Washington.  But as written here before, Medicaid coverage is a particularly sharp problem within a thicket of thorny policy challenges.  It behooves any healthcare provider with exposure to Medicaid (i.e., particularly those PA/LTC providers) to be very aggressive in staying informed regarding state Medicaid program policy developments over the next two years.

Medicare Bundled Payment Program
Payment bundling is perhaps one of the most confusing concepts in a sea of confusion that is healthcare policy because the concept both actively precedes and  transcends the ACA.  Pilot programs and demonstration projects testing whether paying multiple providers a lump sum to coordinate treatment and care of a patient for a defined condition and/or disease have been met with mixed results.  Still, provider enthusiasm to participate in such programs seems to be growing.

The difference in 2013 is that the ACA mandates CMS to begin a Medicare bundled payment pilot program to begin in January and run for five years.  The impetus of this initiative is try and drive broader, sustainable alignment across providers.  This is a voluntary program requiring application and must include a hospital, physician group, skilled nursing facility, and home health agency.  Only one entity (the contracting organization) will be responsible for allocating the payment among all providers.

To be sure, there will continue to be significant discussion, disagreement and controversy on the long-term viability of payment bundling, from both an economic and patient quality/safety perspective.  But from a more pragmatic, short-term financial vantage, providers interested in staying in business would do well to at least begin to understand what payment bundling will mean to them in the near future.

Tax Provisions in 2013
There are also a number of ACA revenue (i.e., tax) provisions that will take effect in 2013.  These include:

  • Itemized individual deductions threshold on medical expenses will go from 7.5% to 10% of AGI
  • New limit on flexible spending account for medial expenses will be set to $2,500 per year
  • Increase in Medicare Part A tax rate on wages goes from 0.9% to 2.35% on earnings over $200,000 for individuals and $250,000 for married couple filing jointly (plus a  3.8% assessment on unearned income of higher-income individuals)
  • Elimination of tax-deduction for employers receiving Medicare Part D retiree subsidy
  • Excise tax of 2.3% on the sale of taxable medical devices

    There are more provisions in 2013 worth knowing and understanding, and Kaiser’s Health Reform Source provides a sharp, interactive means of tracking these here.  Those mentioned above are just a few that should get immediate and highest priority as healthcare providers.

    Cheers,
      Sparky

Filed Under: ACA Implementation, Helpful Advice · Tagged: , , , ,
Medicare Eligibility: The Next Policy Battleground
Dec 18, 2012

Medicare Eligibility: The Next Policy Battleground

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In Washington this week, discussions continue in an effort to reach agreement on a comprehensive deal that will avoid the impending Fiscal Cliff.  Healthcare remains a central part part of the debate.

While much of the attention regarding healthcare policy over the past few years has focused on healthcare providers and the economics of how those providers are paid – or not – for their services, there has been an elephant in the room all the while that most politicians and elected officials wisely seek to steer clear of: that being, policy decisions impacting the financial burden on Medicare beneficiaries.

With Democrats holding fast to collecting on what they feel the presidential election afforded them – a mandate to raise taxes on the wealthy; and with Republicans demanding real and meaningful action to lower entitlement spending, the Medicare program is very squarely in the horse trading crosshairs.   Of course, there is a lot of disagreement and controversy over whether Medicare should be considered an entitlement.

On the one hand, to the extent Medicare expenditures were funded by beneficiaries through taxation it does not fit the traditional definition of an entitlement like Medicaid or unemployment benefits.  On the other hand, given a myriad of contributing factors (e.g., most prevalently being advancements in medical technology and the accompanying impact on longevity), significantly more is spent per beneficiary today than was contributed.

According to an Urban Institute research paper, in 2011 a two-earner couple retiring  with a combined income of apx. $87,500 (defined as the average wage), would have paid about $116,000 into the Medicare program during their lifetimes.  That same couple can expect lifetime Medicare benefits of $357,000 net of premiums.  And given the current trajectory, in 2030 an average-earning couple will pay $175,000 in Medicare taxes but receive a benefit of $527,000. 

image

So call it what you will, in the real world where accumulated deficits are resolved through bankruptcy and/or cessation of operations, the phenomenon described above represents a significant funding gap that results in the assessment of financial burden for Medicare expenditures on a broad base of the population not receiving benefits.  That sure sounds like an entitlement, does it not?

Regardless of what it’s called, the problem with raising the age of Medicare eligibility as a policy solution aimed at closing the funding gap is that it only avoids expenditures for those seniors otherwise able to afford healthcare.  This presents both fairness and pragmatic challenges.  For those individuals in the 65 – 67 age cohort unable to pay the cost of their healthcare, some form of cost subsidy will still be required: whether that is through Medicaid, insurance premium subsidization under the Affordable Care Act or cost shifting in lieu of uncompensated care.

Those challenges are causing some members in Congress to consider Medicare means testing as a potential alternative to raising the eligibility age.  This is an idea that President Obama has also publicly supported in the past.  The approach would lower Medicare benefits as a function of income.  From a purely economic vantage this is a more efficient approach because there is a much higher correlation between the targeted  population of the policy and the desired financial impact on the Medicare program.

Means testing will not be not an easy sell politically, however, when considering the enormous amount of political clout held by that portion of the electorate to be affected.  The media monster that is AARP will almost certainly be effective in portraying any attempt to implement means testing as robbing from the vulnerable elderly.  No easy answers here, folks.

Way back in the day, I used to do a lot of work as a financial advisor and was involved in several debt restructurings.  What I learned through that experience was the best possible outcome meant having all parties involved equally dissatisfied with the result.  I wonder if that’s a scenario that anyone in Washington could possibly accept where a deal on the Fiscal Cliff is involved.

Cheers,
  Sparky

Filed Under: Editorials & Opinions, Medicare · Tagged: , , ,
A Moment in Time
Dec 14, 2012

A Moment in Time

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APTOPIX Obama Connecticut School ShootingThere are moments in time that you remember as long as you live.  Despite centuries of history working against us, those moments are able to completely redefine how we view and feel about particular days and months and seasons.  That, unfortunately, is the case today.  The horrific tragedy in Newtown, Connecticut this morning shall live with most of us now forever.

As distant witnesses we are unable to fathom the full measure of sorrow and anger – that gut-wrenching sense of bewilderment and disbelief that must be weighing so heavy on many broken hearts right now.  To commit murder is a unique act of moral deprecation that unto itself carries a sufficiently conscionable disconnect.  But to dig down even deeper into the black abyss of a human soul that has lost its way – and find the will to kill young, innocent children with so much of their lives still ahead of them – no words can possibly do justice.

We will all move forward – because we have to.  Even those whose hearts have been shattered today will also have to move forward.  But we will never move past this moment in time.

Filed Under: Editorials & Opinions ·
Dec 13, 2012

While Rome Burns

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Quick Take
As reported in The Hill yesterday, Federal Reserve Chairman, Ben Bernanke, shared a dire warning on the prospects for the US economy if our elected officials fail to resolve the critical impasse on how to avoid the Fiscal Cliff.  He also pointed out that the economy is already being negatively impacted because the uncertainty and prospect of going over the cliff is creating havoc in financial markets and impacting investment decisions.

With so much at stake it is beyond disheartening to watch the political posturing of the two extremes of political discourse.  On the Socialist left you have, thou shall not cut entitlements to anyone – while on the Tea Party right you have, thou shalt not raise one penny of taxation. 

Where do you go from there? That’s like being told to increase production while laying off workers.  Yeah, I know that can and has actually be done, which is another topic for another day – but you get the point.

Our country is being held captive by minority extremists at both ends of the ideological political spectrum – neither minority willing to compromise because being correct in their beliefs is more important to them than being part of a plausible – if not entirely agreeable – solution to the challenges that come with governing. 

I often wonder whether folks who relish in being identified as “part” of a political ideology discover through maturation which ideology aligns with their beliefs – or whether they form their beliefs to align with the ideology to which they seek to be identified as being part.  When someone claims they are a bleeding heart liberal, I’d like to see how much they donate to charity each year.  And when they claim to be a staunch conservative, I’d like to watch them discipline their kids.  Talk is cheap and even more so when emboldened by social media.

My point is that I have had it up to my eyeballs with having minority interests capturing and distorting majority attention – and being an obstacle that is much larger than defined by their electoral power.  Every person I have talked to over the past few weeks – Democrats and Republicans alike – is of a similar mind: both revenue increases (taxes) AND expense reductions (entitlements) are necessary.  I believe the majority of Americans know and understand that.  Do you?

Cheers,
  Sparky

Filed Under: Editorials & Opinions · Tagged: , ,
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