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The Politics of Healthcare

Fixing Healthcare Costs
May 17, 2013 10:25 AM by Kelly Wolfgang
Editor's note: This blog post is written by Alex Tolbert, founder of Bernard Health.

Our healthcare system is broken partly because consumers don't know what anything costs. As patients become more proactive in making informed healthcare decisions, we all agree this should be fixed. But why is it so hard?

Achieving price transparency in healthcare is difficult because healthcare business models rely heavily on a lack of transparency.

Insurers, hospitals and providers want a better healthcare system as much as anyone, but can't afford to inflict damage on their businesses by making prices transparent overnight.

To better understand how transparency affects healthcare, let's take a look at the business models for insurers and hospitals.

Insurer Business Model

If prices were completely transparent, then insurance companies who had negotiated the lowest prices would begin to lose their primary advantage. This is because that pricing information would give medical providers and other insurance companies more power when negotiating and competing with them.

An insurer's business model can be boiled down to this:

  1. Negotiate discounted prices with providers.
  2. Insure people, collect premiums.
  3. Pay claims to providers at discounted prices.
  4. Keep the difference.

Since that is the business, here is how you win financially:

  1. Negotiate the lowest prices with providers.
  2. Offer the lowest premiums so you can attract the most insured people.
  3. Enjoy the virtuous cycle that ensues.

What virtuous cycle?

The more people you insure, the lower the prices you can get from providers. If you can get the lowest prices, you can offer the lowest premiums. Offering the lowest premiums will win you the most insured people, and so you can continue to negotiate the lowest prices from providers. And so on.

Hospital System Business Model

If prices were completely transparent, then it would be difficult for the hospitals to justify the high prices they charge for things available elsewhere for a fraction of the price. In other words, if everyone knew that "Procedure ABC" costs $3,800 at the hospital and $600 for the same quality at a standalone facility next door, the hospital would lose a lot of business.

The typical hospital system business model can be boiled down to this:

  1. Negotiate prices with insurers to be "in-network."
  2. Get paid at those prices on patient claims submitted to insurers.
  3. Pay your doctors, "midlevel" providers, nurses and facility/equipment costs.
  4.  Keep the difference.

Since this is the business, here is how you win financially:

  1. Negotiate the highest prices with insurers.
  2. See as many patients as possible.
  3. Submit as many claims as possible for each patient.

It's a lot easier to do more tests/procedures per patient than to attract more patients. As such, your contracted prices for tests and procedures are really important.

Fortunately, as a hospital system, your size gives you leverage when negotiating with insurers. The insurers need you in their network more than they need a given imaging center. As a result, you're able to negotiate prices that are a lot higher and still be in-network.

Fueling the Movement Toward Transparency

Creating a better healthcare system starts with price transparency. The growth of health savings accounts and transparency start-ups, like Healthcare Blue Book and Change:Healthcare have fueled the movement toward price transparency.

In addition, insurers and hospitals are working hard to provide transparency. To offset the damage transparency will inflict on their business models, they're working to develop other competitive advantages.

As consumers continue to share the burden of ever-increasing healthcare costs, it's only fair that they be armed with the information needed to make informed decisions about their healthcare. This transparency will lead to a better-functioning and lower-cost system with happier providers and patients.

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Patient Confidentiality and Social Media
April 26, 2013 10:56 AM by Kelly Wolfgang

 Editor's note: This article was posted with permission from its author, Christine Gondos, Igloo Software. She can be reached at cgondos@igloosoftware.com.

The fastpaced healthcare industry is continuously evolving -- whether it be newly released studies, new best practices or new techniques, the healthcare community thrives off of innovation.

While annual conferences provide the opportunity for healthcare professionals to connect, the majority of professionals rely on email to exchange new findings. Healthcare professionals have recently placed an importance on social media networks (such as Twitter) as an additional outlet to exchange ideas. While social media provides an opportunity for medical professionals to connect and discuss best practices, this ultimately becomes problematic due to the confidential nature of the discussions.

So how can healthcare professionals network, engage in conversations about practice and share knowledge while maintaining confidentiality and ethical standards?

Igloo Software's Senior Vice President of Marketing & Operations, Andrew Dixon recently presented at the CIO Healthcare Summit where he discussed "How Healthcare Organizations are Moving from Social Media Marketing to Social Business Strategy." Instead of connecting on public social networks, more and more healthcare organizations are creating a social business strategy so they can collaborate on their own private network.

Secure enterprise social platform organizations like Igloo unite healthcare professionals, practitioners and patients so they can collaborate on ideas and keep information in one area. After a patient leaves the office, you no longer need to feel that sense of ambiguity questioning if you remembered everything he or she said. No longer does a conversation need to live in the room you had it; nor your email inbox, nor your notebook.

Enterprise social software erases ambiguity and allows information to be accessible yet secure. Here are four use cases of how enterprise social software enables healthcare professionals to stay connected outside the office.

  • Kimberly-Clark Clinical Solutions is a health division of a large consumer goods company that has a very large health product portfolio including medical devices & infection prevention. To facilitate research, they launched a social extranet solution to act as a product evaluation center for open innovation & customer engagement.
  • Ontario Health Quality Council, an independent provincial body for patient care, coordinates a myriad of stakeholders in a member portal to report on the health system's effectiveness and opportunities for process improvement.

Patient Communities

Are your patients curious about learning more information about what you said in a recent appointment? While you may question the validity of checking Wikipedia or the intimidating results Google reports back, patients often feel alone when they leave their provider's appointment. Healthcare organizations realize this and have bridged the gap by offering patients a portal where they can connect.

  • Children's National Medical Center provides patients with a secure, private virtual place where they can ask questions, find answers and share experiences around a specific health condition. Their Emergency Medical Services for Children Program (EMSC) National Resource Center also provides a secure portal for grantees to interact and share information with each other in support of EMSC's national child advocacy programs.

Practitioner Communities

Want to bring together key stakeholders within a healthcare association to work together and  improve healthcare delivery? A conference may be a great way to get everyone together, but how will you collaborate after?  

Enterprise social software platforms provide practitioners a specific work area where they can collaborate on documents and share best practices.

  • Drug Information Association uses a social extranet to connect their 18,000 members in the biopharmaceutical industry for online learning, collaboration and managing their communities of practice. Since adopting this new form of technology, their collaboration tools are now streamlined and this area facilitates knowledge exchange and relationship building in a private member portal for their 32 special interest groups.
  • American Academy of Family Physicians (AAFP), representing more than 100,000 family physicians and medical students nationwide, improved their collaboration since launching an online community for peer networking, information sharing and practice transformation. Members have access to online seminars, practice tools and the "Ask An Expert" area. Known as Delta Exchange, the award-winning online network connects physicians, clinical staff, office staff and primary care-focused residency programs committed to the Patient Centered Medical Home.
  • TransforMED, a wholly-owned subsidiary of the American Academy of Family Physicians (AAFP) also capitalized on the benefits of social collaboration. In an effort to improve patient care and assist primary care physicians with medical practice redesign, over 500 practices and more than 5,000 medical professionals across the country connect and collaborate using Igloo Software.

Internal Communities

External facing communities (extranets) have gained tremendous momentum for healthcare organizations. Effective collaboration, improved knowledge sharing, and accessibility anywhere - it is no wonder that more and more healthcare organizations like The College of Family Physicians of Canada, Aetna, and Femnene are adopting social intranets to collaborate inside their organization.  Bye bye filing cabinets and shared folders.

The organizations mentioned above stay organized with hierarchical storage of documents with unlimited folders, inline preview and full version control. Organizations and associations in the healthcare industry now have the power to stay connected to other healthcare professionals, practitioners and patients in a secure environment where confidential information is safe.

For more information, visit http://www.igloosoftware.com/blogs/inside-igloo/continuingtheconversationoutsidethedoctorsoffice4waystostayconnected

 

 

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Implications of the Affordable Care Act
March 13, 2013 12:25 PM by Kelly Wolfgang
Editor's note: This blog is written by Anthony J. Hall, RN, BSN, behavioral health charge nurse at Atlanta Medical Center.

The Affordable Care Act (ACA) means major changes in the way Americans view health issues and treatment options. While there is increased optimism building around the plan's effect on patient care, healthcare providers will bear the burden of the plan's negative impacts, such as a shortage of primary care providers. Though the full impact on the medical profession has been hard to gauge, providers can be primed for some positive adjustments as a result of ACA.

It's easy to see the immediate benefits of the ACA for healthcare recipients - many more families will be able to schedule regular visits to a general practitioner or family clinic, meaning more check-ups and preventative treatments.

For healthcare professionals, this increased patient load means more providers will be needed; some will gain traction in positions of greater authority as those with less experience are hired. The shortage of primary care physicians will mean increased access to nurse practitioners (NPs) and physician assistants (PAs), allowing localized healthcare to more patients, making it unnecessary to travel to distant hospitals.

The increased presence of non-physician providers such as laboratory professionals, respiratory technicians, NPs and PAs in decision-making positions will bring a heightened awareness and a sense of respect that has been long overdue. In my work with patients and the general public, I've encountered many people who are uncertain of the role these professionals play; by virtue of increased demand, more patients will become aware of our importance in healthcare.

While many hospital systems are consolidating, combining forces and units to avoid producing duplicate services, job cuts in the hospital sector will provide an upswing in business for small practices, family clinics and general practitioners. This change is likely to mean an increase in employment for providers in all areas of specialization.

If you are interested in submitting to the Politics of Healthcare blog, please contact Kelly Wolfgang at kwolfgang@advanceweb.com.

 

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Medicaid Expansion
February 15, 2013 1:19 PM by Kelly Wolfgang

Editor's note: This blog is written by Miguel A. Bustillos, department chair and professor at California University of Management & Sciences in Virginia.

Most of us have heard about the Medicaid expansion and how states like Florida, Texas and Virginia are against it. Some do not understand why the Medicaid expansion has become such a big issue or what exactly the Medicaid expansion is.

The Medicaid expansion, expected to be fully implemented by 2014, is a plan under the Patient Protection and Affordable Care Act (PPACA) to expand medical coverage for a number of people who do not qualify under the current plan. The Medicaid expansion mandates that a state must meet PPACA standards to receive full federal funding, which is needed to increase the current plan. The largest problem involving the mandate is how states will cover the "new eligibles," those patients who are receiving Medicaid assistance for the first time. It is estimated that 15.9 million new enrollees will participate in the plan by 2019.

The federal government currently pays, on average, about 57% of the total cost of Medicaid enrollees in each state. Of those that qualify for Medicaid, only 62% have signed up for Medicaid benefits, leaving the remaining 38% without benefits. Generally, those that are not taking the benefit either don't know that they qualify or refused the benefit.

If states were to accept the Medicaid expansion, they would continue to pay for the benefits of the 62% that are currently covered; in addition, they will have to cover the 38% that qualified under the previous requirement, but did not take the benefit. According to the new mandate, states must also provide for the new eligibles.

Under the Medicaid expansion mandate, the federal government will continue to pay the cost for about 57% of the 62% that are currently taking the benefit. With the new law, the 38% that did not receive benefits will now either take the benefit or pay a tax penalty. Some states believe that those who are qualified will take the benefit rather than pay the penalty. Despite the "new enrollee" status of those patients, the government will not support funding for any persons who previously qualified but did not receive benefits.

With regards to the true new eligible, the states believe that the cost of providing Medicaid is just too large for any state to handle.  To lessen the burden, the federal government has penned an agreement to cover 93% of the cost of the true "new enrollees" till the year 2020.

Many states will decline to take on the Medicaid expansion because it's a voluntary program. The new law can be very taxing to any state's budget and in most cases, there are not enough incentives for states to adapt the program.

The federal government is, however, not worried. When Medicaid was first signed into law in 1965, only six states agreed to participate. But by 1982, every state had joined. As 2014 comes along, and the law comes into full effect, it will be interesting to see what develops and what does not. With the cost of providing healthcare to so many people being so high, and the fact that Medicare benefits will be cut to fund the Medicaid expansion, I foresee much resistance on its implementation.

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Is Gun Violence a Public Health Issue?
January 18, 2013 1:38 PM by Kelly Wolfgang
As reported on Newswise, the following is a statement by Jo Ivey Boufford, MD, president of The New York Academy of Medicine, one of the nation's oldest and most prestigious medical academies, on the seriousness of gun violence as a major public health issue. The statement is in response to deadly incidents of gun violence in Newtown, CT, Webster, NY, and the shooting of 15 individuals, three of whom died, during separate acts of gun violence in Chicago, IL on New Year's Day.

"As a nation, we can only improve the health of the public when we get our priorities straight. Recent acts of gun violence in Chicago, Webster, NY, and Newtown, CT cannot be ignored. Neither can the 31,000 Americans who die each year at the hands of a gun. This number exceeds the number of babies who die each year during their first year of life (25,000) or people who die from AIDS (9,500) or illicit drugs (17,000).

We institute protective measures enforcing speed limits and requiring the use of safety belts; we implement public health measures such as child vaccinations and regulations around the safety of food, drugs, and products. Yet guns escape this type of regulation despite their significant contribution to the mortality rate each year. We must view gun violence as a serious threat to the public's health if we want to reduce the number of deaths associated with guns.

We can start by banning the sale of assault rifles, high-capacity magazines, and other facilitators of mass murder. And we must allow government agencies like the Centers for Disease Control and Prevention to fully exercise their duties in both surveillance of the incidence and impact of gun violence, and in educating the public on steps for preventing death and injury through the use of firearms.

The evidence is clear, and we must now take action to protect our neighbors and ourselves from this devastating public health crisis."

In December, both the American Nurses Association and the American College of Emergency Physicians, two prominent and national healthcare organizations, issued calls for a ban on the sale of assault weapons.

ADVANCE for Nurse Practitioners & Physician Assistants asked its readers, "Do you think it is the responsibility of healthcare provider organizations to urge this type of action?"

Here's what some readers had to say:

  • "We can all do our part. As nurses, as humans." - Teanne
  • "Just stand in a trauma unit for one night and come back and give me your answer." - Melissa
  • "Yes! Absolutely! It's everyone's responsibility to speak up for what they believe!" - Kelli
  • "Absolutely not. I have stood in the trauma unit for 15 years and taking away my legal guns, which I carry concealed because I am licensed to do so, and taking away my rifles, which I enjoy shooting responsibly, will do nothing to stop the common street thug with an illegal weapon, other than allow me no protection for myself and my property when I'm leaving the trauma unit at midnight, sitting at a red light, and getting jacked by said thug." - Dana
  • "Most of our ER staff is armed; we see what's out there. As the Boy Scouts say, be prepared. The bad guys will always find guns; we need to be able to defend ourselves." - Diana
  • "Absolutely. Prior trauma nurse here at Miami Dade County. Some individuals have no business having weapons. Period." - Teresa
  • "This is definitely not the responsibility of healthcare provider organizations. This is a civil liberty. I'm sure many members of the groups do not support a ban. These groups should focus on healthcare issues." - Rita
  • "Supporting mental illness awareness and research would be a wiser choice! Let's be honest, what health professional has not taken some form of weapon to work with them?" - Susan

Do you agree with Boufford's statement and the calls for action by the American Nurses Association and the American College of Emergency Physicians? Weigh in on the comments below.

Editor's note: We welcome your comments and topic suggestions; contact blog author Kelly Wolfgang at kwolfgang@advanceweb.com.

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