Health Care Reform Articles - March 12, 2022

 Editor's Note -

This link will take you to a set of brilliant 10-30 second videos that point to the advantages of a Medicare-For-All health care system for the US. Click on it, learn and enjoy.

- SPC

https://onepayerstates.org/medicare-for-all-video-clips/

Fee-for-Service vs. Capitation  by Jim Kahn - Health Justice Monitor - March 3, 2022

Summary: Today we take a step back to consider a pivotal issue that arises in discussions of health reform generally and single payer specifically: Which is the better way to pay providers – FFS or capitation? The answer is: Both. That is, done right, both can work very well. And, sometimes, neither …

Comment by: Jim Kahn Fee-for-service (FFS) means that providers bill and are paid for each medical service delivered – physician visit, test or intervention, hospital day.   Capitation means that providers are paid a monthly amount per beneficiary for all services or just some (e.g., primary care).   Let’s start with the claim that capitation is better than fee-for-service, full stop. Less costly and with excellent quality of care. This can be true in narrow circumstances. A very experienced provider organization that likes to be paid via capitation, with similar administrative and profit structures as the fee-for-service alternative, can often save money (offer a cheaper alternative) while maintaining quality of and satisfaction with care. Some early HMO history suggests that. It makes sense since some providers will raise their income in a FFS system by increasing the quantity of services.   However, the “similar administrative and profit structure” caveat often distinctly fails in the US. The most important example is Medicare. Traditional Medicare is FFS, and has very low overhead for the funder, CMS. In contrast, Medicare Advantage, the capitated option, uses insurance company intermediaries, with substantial administrative overhead and profits. Medical care costs are lower in Medicare Advantage, but total costs (including the overhead and profits) are substantially higher than FFS Medicare, by one estimate more than $100 billion higher. Quality of care is comparable. Financial barriers to care are higher in Medicare Advantage for individuals in poor or fair health. Perhaps related, sicker patients often shift to FFS. So, in Medicare, FFS is a better option. (Unfortunately, there is currently a process to shift FFS Medicare to fully or semi-capitated direct contracting, see HJM posts starting here.)   In Medicaid, capitation via private insurers has resulted in significant access to care problems.   Relative ease of oversight is a factor favoring FFS. A single payer FFS system facilitates strong rate regulation and use of comprehensive claims / payment data to identify and reduce fraud and waste.   Another consideration is how to pay for capital investments, such as a new hospital. Under both capitation and FFS it matters how operating margins (profits) are used. In our system, net income often feeds expansion. US single payer plans would eliminate this dynamic, removing the funding and/or approval of capital spending from the payment for care. This facilitates investment decisions based on system need rather than provider financial gain. It improves both FFS and capitation.   Looking to other wealthy countries, both FFS and capitation work well. Nearly two thirds of countries in the OECD use FFS payment, solely or in combination with capitation and salaries. Their costs, quality, satisfaction, and outcomes are all much better than in the US. See, for example, specific performance measures and global outcomes.   Of note, capitation in other countries is a different entity than here. For example, in the Netherlands, which relies on capitation, typically < 5% of premium payments go to overhead and profits (here, p.49), and those minimal profits are not retained by owners, instead they’re passed forward to pay for care in subsequent years. (Their “risk adjustment” system is also better, which we’ll discuss another day.)   In three-quarters of other OECD countries, capital spending is regulated by the government.   A key issue in contemplating FFS for single payer: the history of universal coverage suggests that provider supply constraints distinctly limit the jump in utilization from providing everyone very comprehensive insurance. If supply is limited (which it is), it's impossible to increase services to make more money. So FFS payment does not (can not) result in huge cost increases. See our article. Further, US single payer proposals include system-wide global budgets, as done in other countries, providing a formal mechanism to slow cost growth if necessary.   So, you can see why the main answer is “both” – FFS and capitation both can work well with appropriate structure and regulation.   Finally, the “neither” part. For hospitals, one of the most common and successful payment methods is global budgeting. Each hospital receives a fixed annual allocation based on past services provided, with allowances for growth in utilization and costs. This removes the administrative burden of billing, and allows hospitals to focus on providing services. We’ve written an article on this, available soon.   The other “neither” -- as noted above, salaries are also a fine way to pay providers.   The essential features of successful universal coverage are insuring everyone with the same comprehensive coverage, with minimal financial burden, using simple and fair payment systems, and removing profit as a driving force in the system. With the right structure and regulation, any reasonable payment modality can work.

 

‘A knockout blow’: Mass General Brigham ads ruffle feathers

By Jessica Bartlett - Boston Globe - March 3, 2022 

The state’s largest health system wants to expand, and it wants your support.

For weeks, Mass General Brigham has splashed its teal ads across newspaper pages, television screens, and the internet to rally support behind its proposed $2.3 billion expansion.

The campaign, which experts estimate cost millions of dollars, has angered competitors and a legislator, who say the health system is using its deep pockets to relay misleading information to regulators and the general public. Mass General Brigham, for its part, says it’s using the ads to dispel misinformation spread by critics and to speak directly to patients.

“It is important people know the facts, and advertising is just one way to make sure those facts are publicly known and set the record straight from unfounded claims,” said Jennifer Street, a spokeswoman for Mass General Brigham.

The hospital’s competitors say Mass General Brigham, already the largest and most expensive hospital in the state, is using its vast resources to grab more power.

“It is often the case that whoever has the most cash can buy market share,” said Dr. Eric Dickson, president and CEO of UMass Memorial Health, which has hospitals in the service area where MGB is seeking to expand. “That’s true in any industry, especially when the competition is kind of fighting for survival. That’s when you can use your cash for a knockout blow. That’s what it feels like here.”

Mass General Brigham has been trying for months to secure state approvals for its expansion, which includes opening or growing ambulatory sites in Westborough, Westwood, and Woburn, and expanding Massachusetts General Hospital and Brigham and Women’s Faulkner Hospital in Jamaica Plain.

The projects, especially the planned outpatient sites, have come under fire from competitors, consumer advocates and the attorney general over concerns that the new clinics would draw patients away from their lower-cost facilities and ultimately siphon much-needed revenue from community hospitals. The state’s health care watchdog agency and Attorney General Maura Healey have questioned the plans, saying they would raise annual health care spending by $46 million to $90.1 million by drawing patients to higher-cost facilities and creating a new referral pathway to the system’s downtown hospitals.

At the same time as the system faces pushback for its expansion plans, legislators on Beacon Hill have been at work trying to pass laws that would tighten oversight of hospital expansions, making it even more difficult for large systems like MGB to grow.

Now, MGB is fighting back. In its ads and in letters to regulators, Mass General Brigham argues that its expansion would help lower costs by moving patients out of its Boston hospitals into less expensive suburban outpatient centers and make space downtown to deal with existing capacity issues. Executives have pointed to an independent cost analysis that MGB commissioned, a requirement as part of the state regulatory process, that also said the expansion likely wouldn’t raise health care spending.

Over the last three months, Mass General Brigham has taken out more than a dozen full- and double-page ads in the Boston Globe, the Boston Business Journal, and the Worcester Telegram and Gazette, accompanied by digital ads in the Globe and BBJ.

Additionally, cable news stations have broadcast ads during morning, evening and weekend programming.

The ads prompt viewers to visit a website that makes its case for expansion, asks users to sign a petition in favor of its projects, sign up to appear in a future commercial, or invite experts from the health system to speak at an event.

Street, the Mass General Brigham spokeswoman, declined to specify how much the system was spending on the campaign, but said the ads around expansion are part of the system’s broader rebranding campaign that it launched in 2020.

“The development of two new health care centers in Westborough and Woburn and the expansion of our health care center in Westwood is an important part of the integrated system,” Street said. “It is important for our patients living in these communities to be

aware of what we are doing to improve their access to care, lower their healthcare costs,

and address the critical need for capacity at our hospitals.”

Experts say the ads likely range between $1 million to $7 million, and are helping build a

foundation of support the system will need if it enters a regulatory fight.

“They want to expand their brand awareness and reach more patients and expand their patient base,” said Carolyn Morgan, president of health care marketing and advertising firm PRECISIONeffect. “I get why other hospitals in those areas are concerned. They should be.”

Expert estimates of the spending on the campaign are in line with the health system’s previous marketing budgets. According to a search of records with media research company Neilson Ad Intel, Mass General Brigham spent approximately $3 million in media buys last year. But these figures are likely low, because the service doesn’t count the full extent of digital ad campaigns, misses many local TV news station buys, and doesn’t include any paid search campaigns or the cost of hiring ad agencies to produce marketing content.

Niyum Gandhi, chief financial officer and treasurer of Mass General Brigham, said the system hadn’t increased it’s media budget year-over-year but has just consolidated marketing budgets from across its network into one place.

Mass General Brigham’s competitors say the ads are deceptive.

“They are not being honest with the people of Massachusetts,” said Dickson of UMass Memorial. “It is very clear from to anyone who looks at this, who hasn’t been hired by MGB, that this will drive up costs.”

Several experts echoed the critiques. David Rosenbloom, a public health professor at the Boston University School of Public Health, said it was “nonsense” that Mass General Brigham’s expansion wouldn’t increase spending. He said even if the system diverts its own patients from downtown to less expensive suburban sites, the hospital was expanding its downtown presence and would backfill those beds.

“Miracles happen. There will be a first time when spending doesn’t go up from an expansion like this. This isn’t going to be one of them,” Rosenbloom said.

Leemore Dafny, a health care economist and a professor at Harvard Business School, said Mass General Brigham’s goal is to grow revenue and attract more patients. That will likely raise spending.

“I understand why they would do that — waging a public relations war trying to create uncertainty,” Dafny said. “But, frankly, on the face of it, it also makes sense that their investment is one designed to increase patient volume. And no one questions if they are more expensive.”

Alan Sager, a professor of health policy and management at Boston University School of Public Health, directly refuted many of MGB’s statements, in particular claims that the system was expanding primarily to care for its current patients.

Maddie Clair, spokeswoman for the Coalition to Protect Community Care, formed by competitors and some community groups to protest MGB’s expansion, criticized the use of advertising for expansion while the system as a whole is being audited for its spending. The state’s healthcare watchdog agency last month placed MGB on a “performance improvement plan,” that will require the system to rein in spending after years of what they say has been excessive growth.

State Sen. Cindy Friedman also questioned the spending priorities of an ad campaign around expansion. She herself had heard of several doctors leaving MGB because of burnout and said the system should be spending to support its workforce. She added that

MGB was turning what should be a fact-based regulatory decision into a popularity contest.

“What the state’s job is is to ensure that health care remain accessible and available to

people and also we’ve got to deal with the cost of it,” Friedman said. “That’s what the regulatory process and the regulatory decision needs to be based on. Not whether we like something or not. That’s why I find it unsettling.”

Street, the system’s spokesperson, said the hospital’s advertising campaign had little to do with how it invested in its workforce, noting that the system’s largest investment was its people.

“Advertising allows us to tell the story of their incredible work, as well as why we need to create more space for them to care for patients,” Street said. “Our commitment to telling that story has no effect on how we compensate employees.” 

https://www.bostonglobe.com/2022/03/03/business/knockout-blow-mass-general-brigham-ads-ruffle-feathers/

MaineHealth to enter into partnership with Texas health company

The partnership will help with payment reform for nearly 40,000 Medicare Advantage patients. 

by Joe Lawlor - Portland Press Herald - March 11, 2022

The partnership will help with payment reform for nearly 40,000 Medicare Advantage patients.

MaineHealth, the largest health care network in the state, is entering a partnership with agilon health for the network’s Medicare Advantage patients.

The partnership will work on payment reforms, moving from a fee-for-service primary care model to a “value-based care model,” the health network announced. The agreement does not include any upfront costs for MaineHealth, the parent organizations of Maine Medical Center in Portland, seven other Maine hospitals and a network of primary care and specialized health services.

Value-based care prioritizes keeping patients healthy through prevention and caring for chronic illness rather than merely treating them when they fall ill. The insurer benefits because it is cheaper to keep patients healthy than to wait until they have serious illnesses that are expensive to treat.

MaineHealth and agilon health, based in Austin, Texas, will share in the cost savings of the payment reforms, said John Porter, MaineHealth spokesman.

Medicare Advantage is supplemental insurance for Medicare patients – typically those age 65 and older – to fill in the gaps for health care services that Medicare doesn’t pay for. Nearly 40,000 Maine residents have a Medicare Advantage plan through MaineHealth.

Under the new value-based care model, payments are made “based on the health outcomes” of patients and the “quality of services delivered,” compared to the current model, which pays based on the quantity of services provided.

“Through the partnership with agilon health, we will be accelerating the transition to a payment model defined by value and investing more deeply in our primary care delivery system. The depth of patient need, especially among our growing senior population, necessitates us to think very differently about what the primary care delivery system in our community needs to look like today and in the future,” said Dr. Andy Mueller, CEO of MaineHealth.

Agilon will help MaineHealth by “identifying patient conditions and mapping out care plans” for Medicare Advantage patients to help them get preventive care and to help manage chronic conditions.

The agreement is expected to be finalized in the coming months.

https://www.pressherald.com/2022/03/11/mainehealth-to-enter-into-partnership-with-texas-health-company/ 

Editor's Note -

For more on Agilon Health, see their snazzy website - it looks to be a company funded  by a New York based hedge fund: 

https://www.agilonhealth.com/our-story/ 

Caveat Emptor - unless you're you are an investor.  I have a feeling the investors will do very well. (Tax dollars (Medicare) are as green as private dollars (private equity)

As for the doctors and patients - not so much.

- SPC

Ambulance rides are getting a lot more expensive

by Tina Reed - Axios - March 1, 2022

The cost of an ambulance ride has soared over the past five years, according to a report from FAIR Health, shared first with Axios.

Why it matters: Patients typically have little ability to choose their ambulance provider, and often find themselves on the hook for hundreds, if not thousands of dollars.

The details: Most ambulance trips billed insurers for "advanced life support," according to FAIR Health's analysis.

• Private insurers' average payment for those rides jumped by 56% between 2017 and 2020 — from $486 to $758.
• Ambulance operators' sticker prices, before accounting for discounts negotiated with insurers, have risen 22% over the same period, and are now over $1,200.

Medicare, however, kept its payments in check: Its average reimbursement for advanced life support ambulance rides increased by just 5%, from $441 to $463.

Between the lines: Ambulances aren't covered by the new law that bans most surprise medical bills, meaning patients are still on the hook in payment disputes between insurers and ambulance operators.

State of play: Ground ambulances are operated by local fire departments, private companies, hospitals and other providers and paid for in a variety of ways, which makes this a tricky issue to address, according to the Commonwealth Fund.

• Some states — such as Colorado, Delaware, Florida, Illinois, Maine, Maryland, New York, Ohio, Vermont and West Virginia — have protections against surprise ground ambulance billing, a columnist in the Deseret News pointed out earlier this year.
• But in California, Florida, Colorado, Texas, Illinois, Washington state and Wisconsin, more than two-thirds of emergency ambulance rides included an out-of-network charge for ambulance-related services that posed a surprise bill risk in 2018, according to a Peterson-KFF Health System Tracker brief.
• The Biden administration has said it's working on the problem.

The bottom line: Costs for ground ambulance care are on the rise and, with few balance billing protections, that means patients could still be hit with some big surprises if they wind up needing a ride in an ambulance.

https://www.axios.com/ambulance-rides-are-getting-a-lot-more-expensive-cee897fe-63b7-4412-aa67-718109773e79.html