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Editor's Note: -
This NYT opinion video takes on the problem of inappropriate incentives for hospitals, that has resulted i a shortage of pediatric hospital capacity in the face of the RSV virus epidemic. It appears that in America, whether it's health care or football, what really gets top priority is the continued re-destribution of wealth to the 1%. Let's change that.
- SPC.
https://www.nytimes.com/video/opinion/100000008668952/covid-flu-rsv-children-hospitals.html?smid=nytcore-ios-share&referringSource=articleShare
Why America doesn’t love HMOs as much as I do
Last week, I went to the eye doctor. An unremarkable event, hardly something to write about, except that it inspired me to reflect on how I learned to stop worrying and love my HMO.
Older readers will probably recall the managed-care revolution of the 1990s, which set out to replace the old fee-for-service model with tightly run networks of doctors. While, in theory, such networks could offer better care, the most visible effect was on costs: In the 1990s, our collective medical expenditures, after growing by double digits for three decades, rose just 6.6 percent.
Older readers will probably also recall that doctors and patients both hated this change. Cheapskate health maintenance organizations became Hollywood’s favorite movie villain. State legislators rushed to pass patients’ bills of rights that made it hard to limit access to treatment. And health-care costs resumed their upward climb.
Yet those models never entirely disappeared. For the past five years, I’ve been covered by Kaiser Permanente, an HMO that mostly requires me to see their in-house, salaried doctors — and to get permission from my primary-care physician to access anything but a few routine services. Perhaps more surprisingly, I choose this over less restrictive options.
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It started as an experiment. I spent some of my formative years as a journalist covering Obamacare, which meant listening to wonks rhapsodize about European health-care systems that sounded a lot like HMOs — or even just rave about HMOs. When asked what the American system should look like, one of the models health-care analysts pointed to was Kaiser — which, yes, restricted your choice of doctors but also offered a kind of highly coordinated care that traditional physicians couldn’t match.
I spent a lot of years arguing that the United States would never have anything like that. So when I joined The Post in 2018 and discovered that Kaiser was one of my options for health insurance, I felt honor-bound to try what I had disparaged.
Five years later, I am no longer trying; I am convinced. Yes, I have given up quite a bit of freedom. In exchange, I get … well, consider my eye visit.
I had never seen this doctor before; I took the first available appointment at my local facility. Yet when I started to describe a massive floater I’d developed in my eye a few years ago, she stopped me and said, “I know.” Of course she did. When it happened, in 2020, I’d gone to Kaiser’s Advanced Urgent Care in that same building, fearing it was a retinal detachment. They’d determined it was probably just a floater and scheduled an ophthalmology follow-up the next day. My doctor had all those records in front of her.
Which is why I stay with Kaiser: I never have to find a specialist, hassle with medical records, make sure a prescription is phoned in or explain my patient history. Nor do I have to fuss with billing or worry about the cost; the co-pays are modest, predictable and, like everything else, easily handled through their app.
This is pretty much how people 10 years ago described what the health-care system should look like. Yet I’m still unconvinced that the United States will ever get there as a country — though more individual Americans could, and probably should, take the HMO option.
One reason wonks got excited about models such as Kaiser was the hope they would bring costs down from stratospheric U.S. levels to something more in line with Europe’s. After all, preventive care! Ending unnecessary ER visits! Paying for health, not for expensive procedures!
Unfortunately, it turns out that preventive care doesn’t save money; giving people insurance coverage means they make more ER visits, not fewer. And ongoing experiments with alternative payment models for Medicare have so far failed to generate significant savings. My Kaiser premiums are actually slightly more than my employer’s other options, though I do save quite a bit on co-pays and deductibles.
That’s not the only reason to prefer good coordinated care, of course — better health is valuable! But the lack of visible cost savings has drained some of the energy from the project.
Another reason the United States probably won’t move in a Kaiserly direction is prudential: Not every HMO can be Kaiser, which is arguably the best in the country. Its model has proved difficult to replicate, and even Kaiser might not be as good as Kaiser after systemwide reforms, because it would no longer have to compete against insurers that offer more choice.
Even if those issues could be resolved, people seem no more willing to accept limits on their options than they were 30 years ago. When I recommend Kaiser, people often recoil, even nice progressives who theoretically want the United States to have a more centralized system. Give up their favorite doctor? Sacrifice the right to see any specialist they want? No.
It’s hard to explain just how pleasant a top-notch integrated system can be; it’s the sort of thing you learn only by experience. And people seem unwilling to try it for even one year. I might have learned to love my HMO, but I’m skeptical that America ever will.
Megan McArdle is a Washington Post columnist and the author of "The Up Side of Down: Why Failing Well Is the Key to Success." Twitter
https://www.washingtonpost.com/opinions/2022/12/28/hmo-kaiser-health-care-love/
U.S. Health Officials Seek New Curbs on Private Medicare Advantage Plans
Federal health officials are proposing an extensive set of tougher rules governing private Medicare Advantage health plans, in response to wide-scale complaints that too many patients’ medical claims have been wrongly denied and that marketing of the plans is deceptive.
Medicare Advantage is the private-sector alternative to the federal program covering those 65 and over and the disabled. By next year, more than half of Medicare recipients are expected to be enrolled in private plans. These policies are often less expensive than traditional Medicare and sometimes offer attractive, additional benefits like dental care.
Despite their popularity, the plans have been the subject of considerable scrutiny and criticism lately. A recent report by the inspector general of the U.S. Department of Health and Human Services found that several plans might be inappropriately denying care to patients. And nearly every large insurance company in the program, including UnitedHealth Group, Elevance Health, Kaiser Permanente and Cigna, has been sued by the Justice Department for fraudulently overcharging the government.
The period leading up to this year’s enrollment deadline, Dec. 7, amplified widespread criticism about the deceptive tactics some brokers and insurers had used to entice people to switch plans. In November, Senate Democrats issued a scathing report detailing some of the worst practices, including ads that appeared to represent federal agencies and ubiquitous television commercials featuring celebrities.
Federal Medicare officials had said they would review television advertising before it aired, and the new rule targets some of the practices identified in the Senate report that caused some consumers to confuse the companies with the government Medicare program. A proposed regulation would ban the plans from using the Medicare logo and require that the company behind the ad be identified.
“It is certainly a shot across the bow for brokers and insurers in response to the rising number of complaints about misleading marketing activities,” said Tricia Neuman, the executive director of the center for Medicare policy at the Kaiser Family Foundation. Ms. Neuman and her team routinely review television ads from the plans.
The proposal would also allow beneficiaries to opt out of marketing calls for plans and would limit how many companies can contact a beneficiary after he or she fills out a form asking for information. The Senate report described patients who had received dozens of aggressive marketing calls they did not request.
David Lipschutz, an associate director at the Center for Medicare Advocacy, said that while the federally proposed rules did not include everything on his wish list, the goals were wide-reaching and significant.
“This is really a meaningful response,” he said. “And where we sit, we don’t get to say that that often.”
Mr. Lipschutz said that the changes would ultimately be judged by how effectively and aggressively Medicare enforced the standards. Much of the deceptive marketing is now conducted by brokers, agents and other third-party marketing firms who are paid commissions when they enroll people, not by the insurers themselves. The proposed rule would hold insurers accountable for the actions of the firms they hire.
“These proposals are an important step toward protecting seniors in Medicare from scammers and unscrupulous insurance companies and brokers,” Senator Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, said in a statement.
The rules would also address the health plans’ use of techniques that require the company to approve certain care before it would be covered. Patients and their doctors complained to Medicare that the private plans were misusing prior authorization processes to deny needed care. The inspector general’s report estimated that tens of thousands of individuals had been denied necessary medical care that should be covered under the program.
The new proposal would require plans to disclose the medical basis for denials and rely more heavily on specialists familiar with a patient’s care to be involved in the decision-making. Medicare has also established tighter time limits for answers on authorizations; patients now often wait up to 14 days. The new rules would also require authorization to cover the full length of a treatment so patients don’t have to continually request identical approvals.
Dr. Meena Seshamani, the director of the Center for Medicare and a deputy administrator at the Centers for Medicare and Medicaid Services, said the changes had been influenced by thousands of public comments solicited by the agency and by lawmakers.
“The proposals in this rule we feel would really meaningfully improve people in Medicare’s timely access to the care they need,” she said.
The insurance industry has said it is generally supportive of regulators’ efforts to protect Medicare enrollees from deceptive marketing, and the Better Medicare Alliance, a group that advocates for Medicare Advantage, said it agreed with officials “that there must be no room in the system for those who would deceive seniors,” according to a statement from the group’s chief executive, Mary Beth Donahue.
Ms. Donahue added that her group was continuing to review the agency’s proposals on how patients have to seek prior authorization for treatment. She said the organization hoped to work with Medicare officials to improve the process.
Hospitals, which have been pushing for changes that would address their concerns that insurers were abusing prior authorization, applauded the proposals. But they emphasized that the Biden administration’s health officials would have to commit to enforcing the stricter oversight.
“The agency really needs to keep their eye on the ball,” said Molly Smith, the group vice president for public policy at the American Hospital Association, a trade organization.
The proposed regulations are not yet final. Health officials are soliciting comments from the public and may make changes.
The gathering storm: The threat to employee healthcare benefits
The once-in-a-century pandemic thrust the healthcare industry into the teeth of the storm. The combination of accelerating affordability challenges, access issues exacerbated by clinical staff shortages and COVID-19, and limited population-wide progress on outcomes is ominous. This gathering storm has the potential to reorder the healthcare industry and put nearly half of the profit pools at risk.
Those who thrive will tap into the $1 trillion of known improvement opportunities by redesigning their organizations for speed-accelerating productivity improvements, reshaping their portfolio, innovating new business models to refashion care, and reallocating constrained resources. The healthcare industry has lagged behind other industries in applying these practices; players who are able to do so in this crisis could set themselves up for success in the coming years.
Inflation is putting substantial pressure on US healthcare costs—they could be $370 billion higher in 2027 relative to pre-COVID-19 projections. 1 And costs associated with endemic COVID-19 could add to this estimate, which only takes account of inflation. Providers are already experiencing the effects of inflation, but its impact on most employers and consumers is likely to be felt more significantly in the 2024 to 2026 insurance-contract renewal cycle. Employers across industries face profitability headwinds due to elevated healthcare costs. In addition, if cost pressures are unmanaged, the most vulnerable employees could end up spending 70 to 75 percent of their discretionary income on medical expenses.
This article, the final in our five-article series on the gathering storm in US health, shares our perspective on the magnitude of healthcare cost increases confronting both employers and employees. It also outlines a range of actions that employers could take to contain costs and promote long-term affordability, while maintaining access and quality of care.
How payers might respond to rising costs
Healthcare payers are likely to face inflation-induced increases in medical costs and selling expenses as well as general and administrative costs. We estimate that providers could pass on more than 6 percent incremental medical cost increases to payers in the upcoming contractual cycles (Exhibit 1). 2 These cost increases would flow through to employers as underlying provider network contracts are renegotiated. Some of this is already happening, but the full impact may not be felt until 2025, given provider contracting cycles. If these costs are passed on to customers in entirety, employers could see a 9 to 10 percent healthcare cost rise. 3 That would be greater than twice the 4 to 5 percent increase that the average employer experienced in 2022. 4 The healthcare cost increase could be even higher (about 1.4 to 1.8 times) for employers who offer high-deductible health plans (HDHP) as a result of deductible leveraging. 5 These plans represent about one-third of total commercial group enrollment. 6
The ability of payers to pass on rate increases from providers to employers is linked to bid cycles. The first round of impact would likely occur in the 2023 provider contracting cycle for self-insured employers, and the 2024 pricing cycle for fully-insured employers. Employers, in turn, would then face the choice of bearing these increased costs or, as is more likely, buying down coverage or passing more costs onto employees.
The latest Consumer Price Index (CPI) report shows that the medical care index rose 0.7 percent in August after rising 0.4 percent in July, as major medical care component indexes continued to increase across hospital services, prescription drugs, and physician services. 7 Continued inflation in the sector could further increase the healthcare cost pressure.
Employers face reduced profitability
Higher benefits’ expenses could add to employer labor-related costs on top of wage inflation. As a result, Fortune 1000 companies could face profitability headwinds due to elevated healthcare costs (9 to 11 percent of overall industry earnings by 2025). 8 Employers in labor-intensive industries such as retail, manufacturing, and food services could be disproportionally affected and experience 16 to 19 percent EBITDA erosion by 2025 (Exhibit 2).
As reported in the “2022 McKinsey Healthcare Stakeholder survey,” over 70 percent of employers stated that premium increases above 4 percent would be unsustainable. As a result, the respondents said they would consider actions to control costs, including increasing employee contributions (Exhibit 3). However, such moves could exacerbate current talent attraction and retention pressures.
Vulnerable populations are confronted by rising medical expenses
As noted above, employers indicate a willingness to continue shifting healthcare costs to employees. They would do so by increasing the employee share of premium costs, moving to HDHPs, and raising the employee share of out-of-pocket costs as top actions, among others (Exhibit 3).
The impact would fall disproportionately on vulnerable populations, specifically families under 200 percent of the federal poverty line. These families currently spend 62 percent of discretionary income on medical expenses, including premium contributions and out-of-pocket expenses. A 9 to 10 percent healthcare cost increase for employees would raise their healthcare expenses to 68 percent of discretionary income. If employers shift some of their increased cost burden to employees by further raising the employee share of premium contribution, say from 18 percent to 20 percent, this population could see nearly 75 percent of discretionary income consumed by healthcare expenses (Exhibit 4). 9
HDHPs would likely see average premium increases as high as 18 percent at the next contract renewal. As small businesses typically have a higher percentage of employees in HDHPs, they would bear the brunt of these cost increases, and a large proportion would see healthcare costs rise substantially. In fact, the proposed rate increase requested in 2023 for small-group Affordable Care Act (ACA) plans across the country was as high as 46 percent. 10
Apart from these potential healthcare cost increases, our 2022 McKinsey & Company US Consumer Pulse Survey suggests that two-thirds of consumers are already concerned about inflation in general, while three-fourths indicate that they are purchasing less or delaying purchases across categories. In such an environment, employees facing unaffordable premiums and out-of-pocket burdens may decide to self-select out of group coverage in favor of individual policies, Medicaid (if eligible), or no coverage (uninsured).
Now is the time to transform employer benefits
Cost pressure from inflation is uncertain—it may be fleeting or persist over the next five years. Either way, there is over a trillion dollars of value available in the healthcare system. 11 The current economic situation could spur the industry to pursue this opportunity and take effective cost-management action. Employers could partner with payers, pharmacy benefits managers, or providers to push for system-level change to address cost pressures, as well as improve care, enhance employee experience, and increase productivity.
While there is no “silver bullet,” a combination of five measures could help employers defray cost increases in the near term as well as put the system on a more sustainable long-term trajectory.
Reimagine medical networks
Levers to improve network performance have long been available but not widely deployed. As stated in industry research, high-performance, narrow provider networks can reduce costs while maintaining efficiency and quality of care. 12 Other levers, including tiered networks, centers of excellence, referral management, and site-of-care strategies, can generate savings of 5 to 15 percent. These measures can be applied across the care continuum—hospitals, primary care, specialty groups, post-acute providers, and ancillary care—while maintaining access and quality of care.
Consumer-centric solutions, like reference-based pricing, can enable patient-level financial transparency and lead to savings of up to 30 percent. 13 Financial transparency should increase as payer price-transparency mandates enhance visibility into cost variation. Consumer-friendly cost comparison tools could empower employees to make tradeoffs based on cost and other metrics, such as quality, access, and experience.
Manage specialty drug expense
Specialty drug spending is expected to continue to grow at an 8 percent CAGR through 2025. 14 15 Although fewer than two percent of insured members use specialty drugs, specialty prescriptions account for close to 50 percent of total pharmacy spending. 16 These individuals have serious health conditions (such as cancer, cystic fibrosis, multiple sclerosis, HIV/AIDS, and rheumatoid arthritis) that require complex therapies and higher-touch care models.
Employers could re-focus their attention on the broader healthcare needs and conditions of these patients, given their complex needs and costly care. Managing these costs requires a comprehensive approach, employing both traditional and innovative levers.
Employing traditional levers to optimize the use of cost-effective drugs in optimal care settings (for example, home or ambulatory infusion sites) will be paramount. These levers include formulary and utilization management, and network and benefit design. To minimize waste and optimize health outcomes in the highest value settings, employers should work with pharmacy benefits managers and payers to redefine formularies across brands, generics, and biosimilars. This can realize savings from cost-management measures and help adopt targeted care-management programs to facilitate a more streamlined patient experience and improve patient outcomes. In addition to these levers, employers can explore value-based care programs with manufacturers or participation in financing solutions (such as risk-pooling and pay-per-performance programs) that may require adopting a longer-term lens to capture savings.
Increase the use of value-based care or risk-sharing models
Value-based care (VBC) models can better align incentives across employers and providers by incorporating quality of care and outcomes in provider reimbursement arrangements. Successful risk-sharing models involve an efficient network and a new approach to benefits management that requires greater use of analytics, patient engagement, and targeted care-management interventions.
VBC models that show promise in the employer context include high-performance provider networks with cost- and quality-based metrics, episode-based payments for standardized patient-care journeys (for example, cancer), and risk-based contracts for end-to-end management of high-cost conditions (Exhibit 5). Employers have an opportunity to scale proven VBC models, especially by applying extensive learning from Medicare.
Adopt high ROI care-management programs
Continued rising costs and the COVID-19 pandemic have generated substantial demand for care-management programs focused on the most prevalent conditions and episodes, such as diabetes, musculoskeletal, maternity, and cardiovascular, as well as behavioral health (Exhibit 6). Employers could work together with their healthcare partners to make greater use of the vast amount of healthcare data at their disposal to understand their employees’ healthcare needs and risks, determine the best way to engage them, and deploy the right combination of high-performance care-management solutions.
Employers who were early adopters of care management are likely to have already implemented such programs. To continue encouraging uptake, offerings should show true return on investment (ROI) impact. Employers could work with solution providers to transition activity-based reimbursement arrangements (typically structured as per-employee per month) to higher quality engagement (for example, fees per engaged employee), and from fee-for-service to percentage of shared savings and ROI guarantees. With these enhancements, ROI of two times or more for care-management programs is feasible.
Consider using value-based insurance plans
Innovation is a prerequisite for transforming the benefits system and creating a stronger incentive for consumers to encourage preventive care and shop for high-efficiency providers. In particular, value-based insurance design (VBID) plans carefully structure benefit coverage and cost-sharing policy based on the degree of consumer discretion and influence, the ability of consumers to absorb cost risk, and the value at stake. This approach attempts to align patient and payer financial incentives around utilization of care (Exhibit 7). Employers can work directly with payers or third-party vendors to tailor such designs based on their employee population and provider networks.
Employers have tried some of the approaches discussed above but only sporadically and not at scale. Achieving impact in benefits reform requires employers to adopt a transformational approach, including pursuing multiple levers in a coordinated way and at scale within a local market. Employers could move to enhance member engagement with intuitive consumer navigation using contemporary technology, real-time localized market and employee data, and advanced analytics. This transformational approach could offer tailored solutions for employee sub-segments based on their underlying conditions, healthcare and socioeconomic needs, and local market context.
The economic imperative for employers to address rising healthcare costs is clear. Also, pressure on health benefits will affect employer value proposition at a time of continuous talent shortage. Employers must act now. While premiums are already set for 2023 in most cases, there is an opportunity to adopt the above actions to spur a step change in long-term affordability. Partnering with healthcare services’ vendors and challenging them to comprehensively redesign employer health benefits will be necessary to ensure that healthcare coverage is affordable—for both employers and employees.
About the author(s)
Aditya Gupta is a partner in McKinsey’s Waltham office, Akshay Kapur is a partner in the Chicago office, Monisha Machado-Pereira is a senior partner in the Bay Area office, and Shubham Singhal is a senior partner in the Detroit office.
Labour ‘would tear up contract with GPs’ and make them salaried NHS staff
Wes Streeting has said a Labour government would “tear up the contract” with GPs, and could make family doctors salaried NHS employees.
The shadow health secretary said the way GP surgeries operate financially is a “murky, opaque business”. The proposed changes would put Streeting on course for a confrontation with the British Medical Association (BMA).
He also proposed a greater role for pharmacies doing procedures such as vaccinations, and suggested people could refer themselves directly to specialists rather than going through a GP.
GPs should no longer be the “sole gatekeeper” to the NHS, Streeting said. He added he wanted to replace GP surgeries with “modern health centres” with nurses and physiotherapists as well as GPs, and where scans could be taken.
In an interview with the Times, the Ilford South MP said: “I’m minded to phase out the whole system of GP partners altogether and look at salaried GPs working in modern practices alongside a range of other professionals.”
Under the current system, family doctors are funded partly by the NHS contract, which is linked to the size of a patient list and their requirements. They also get extra money for reaching targets, offering “enhanced” services and charging for private work, including issuing sicknotes.
The changes could cause a dispute between the Labour party and the British Medical Association, similar to that before the NHS’s foundation in 1948. At the time, the BMA was blocking the health service’s creation over the loss of doctors’ and consultants’ private earnings, which they thought would lead to a drop in income.
The then health secretary, Aneurin Bevan, reached a deal with doctors that meant they could keep earning from private patients as long as they accepted NHS patients. He said later that he had struck a deal by “stuffing their mouths with gold”.
Referring to Bevan’s quote, Streeting said: “There have always been people within the system who oppose fundamental change which, decades later, is widely accepted.”
The GP model already faces difficulties, as patients wait weeks for an appointment amid a shortage of family doctors. Figures last year revealed a shortage of 4,200 full-time general practitioners. A survey in the British Medical Journal showed a third more plan to leave in the next five years.
“I’m always prepared to work with people. We’re going to be actively consulting on this. I recognise it will be a big change. I want to listen to the profession and take people with us, but, more importantly, I want to get this right for patients. The NHS is so broken, we do have to think radically,” Streeting said.
The proposals will be contentious in the Labour party because it will put itself on a potential collision course with the BMA before the party has even won an election, at a time when wider industrial relations are already at the lowest point in decades with the incumbents inside No 10.
Prof Kamila Hawthorne, the chair of the Royal College of GPs, told the Times: “The partnership model of general practice delivers exceptional benefits for the NHS. It allows GP teams to innovate and tailor care and services to their local patient populations. It is extremely good value for money for the NHS because it relies on the goodwill of GP partners going above and beyond.”
Dr Kieran Sharrock, the acting chair of the BMA England GPs’ committee, said he had offered to meet Streeting to explain pressures on doctors, but agreed that the current contract needed to be “revamped”.
Streeting reflected on his own experience of the NHS after being diagnosed with kidney cancer in May 2021. He is cancer-free after an operation, but two follow-up scans were delayed due to backlogs, and he faced a frustrating journey to an appointment he thought was to have a scan, but instead was only a meeting to discuss it.
“It was a waste of my time,” he said. “Having had this experience as a patient, I am absolutely determined to drive improvements because this system isn’t working for patients, it’s not working for staff and it’s got to change.”
1,400 Northern Light workers will shift to Minnesota company
by Kathleen O'Brien - Bangor Daily News - January 5, 2023
The Bangor region’s largest health care system will turn to a national company to manage most behind-the-scenes administrative functions, in one of Northern Light Health’s latest money-saving moves to bounce back from the financial toll of the COVID-19 pandemic.
The move, announced Thursday, is expected to save Northern Light more than $1 billion over the next decade. It also means that more than 10 percent of the system’s workforce will become employees of a Minnesota-based company, Optum, a major player in the health care industry.
The partnership with the company based in Eden Prairie, Minnesota, is the latest in a string of changes Northern Light has made or announced in recent weeks in an attempt to save money.
The Brewer-based health care system, which runs 10 hospitals and is Penobscot County’s largest private employer, estimates it posted an operating loss of $131.7 million on more than $2 billion in revenue during its 2022 fiscal year, which ended on Sept. 30.
READ MORE COVERAGE
In the coming months, Optum, a national firm active throughout the health care industry and a subsidiary of the insurance company UnitedHealth Group, will take over Northern Light’s administrative duties, such as patient registration, scheduling and billing, and ordering supplies like gloves and masks.
“It’s a relationship for all our support services that don’t provide direct hands-on care,” said Tim Dentry, Northern Light’s president and CEO. “Our core business is taking care of patients, and this gives us a greater ability to focus on taking care of patients with fewer costs, greater efficiency, and future investment in innovation.”
Starting in March, the company also will take 1,400 of Northern Light Health’s 12,500 employees, adding to Optum’s workforce of 220,000. Those employees, however, will remain in Northern Light’s facilities and continue serving Northern Light patients, said Paul Bolin, a senior vice president for the system and chief people officer.
None of those 1,400 employees will see a pay cut when they become Optum employees, Northern Light spokesperson Suzanne Spruce said.
“Some outsourcing is offshore to a different country or in a different state, but that’s not what this is,” Dentry said. “There’s no planned or anticipated reduction to the workforces, and all jobs are staying in Maine with their current workforce.”
Patients should notice registration and billing processes becoming more efficient, Dentry said, but their experiences with providers at Northern Light facilities will not change.
Dentry said Northern Light pursued the partnership as it assessed its financial condition.
“Last spring, the COVID-19 relief funds were gone and all the inflationary things hit the whole industry hard,” he said. “We started the budget process and realized we’re going to go through the same process of asking the same people how to do more with less and cut spending while these inflationary pressures were happening.”
Northern Light is announcing its partnership with Optum about a month after it announced a new arrangement with another national health care company. The system said in early December that it would sell most of its laboratory services to Quest Diagnostics, which runs testing sites and medical labs across the country.
Under an all-cash deal that’s expected to close in the first quarter of the year, Quest will manage nine of Northern Light’s hospital laboratories, as well as the laboratory at Northern Light Cancer Care in Brewer. The lab staff will become Quest employees.
“No margin, no mission,” Dentry said in explaining those moves. “We need to make a profit, but that’s not our sole mission, so we need to make sure our partners’ values and mission align with ours.”
The sale of the system’s lab services, he said, means Northern Light doesn’t “have to worry about investing in laboratory equipment because Quest Diagnostics is responsible for that.
“That’s one less thing to do so we can focus more on direct patient care.”
READ MORE COVERAGE
Other recent money-saving moves include the closure of Eastern Maine Medical Center’s primary care practice in Orono, the closure of an inpatient rehabilitation program at EMMC and a restructuring of the system’s walk-in care clinic in Bangor that will task nurse practitioners and physician assistants, rather than doctors, with providing most care.
The health care system has temporarily reduced the walk-in clinic’s hours while it finishes restructuring.
Northern Light will retain 10,850 employees following the Optum and Quest Diagnostics deals, Spruce said.
The latest changes were recommendations from recovery and comprehensive action plans Northern Light asked each of its 10 hospitals to draft, Dentry said.
“They made the hard decisions, and there will be a few more hard decisions coming up,” he said.
https://www.bangordailynews.com/2023/01/05/news/bangor/northern-light-outsourcing/
Nurses Go on Strike at 2 New York City Hospitals
More than 7,000 nurses at Mount Sinai Medical Center and Montefiore Medical Center are seeking better wages and working conditions.
Corey Kilgannon and
More than 7,000 nurses at two hospitals in New York City went on strike early Monday, forcing the health centers into a frantic flurry to move patients, divert ambulances and scale back other services.
The strikes, over working conditions, salaries and staffing policies, presented serious challenges to hospitals already facing the “tripledemic” of R.S.V., flu and Covid-19 cases across the city.
After failing to reach an agreement during a late-night bargaining session on Sunday, the New York State Nurses Association said early Monday that nurses were on strike at two hospitals: the Mount Sinai Medical Center, on the Upper East Side, and Montefiore Medical Center, in the Bronx.
“It is time for the hospitals to treat these nurses fairly, with the dignity and respect they deserve, to ensure nurses can get back to serving their communities by providing superior care to their patients,” Mario Cilento, the president of the New York State A.F.L.-C.I.O. said in a statement on Monday.
The hospitals rushed to bring in temporary staff and continue operations, even pressing doctors into service to fill nursing shortages. In a statement on Monday, Montefiore Medical Center said the union’s leadership had “decided to walk away from the bedsides of their patients,” despite management’s offer of a 19.1 percent compounded wage increase and its commitment to creating more than 170 new nursing positions.
“We remain committed to seamless and compassionate care, recognizing that the union leadership’s decision will spark fear and uncertainty across our community,” the statement said.
Mount Sinai administrators said in an emailed statement that the union leadership had walked out of negotiations at 1 a.m. on Monday morning. “Our first priority is the safety of our patients,” the statement said. “We’re prepared to minimize disruption, and we encourage Mount Sinai nurses to continue providing the world-class care they’re known for.”
Union officials said they were fighting for pay raises to keep up with inflation. They also said hospitals have not hired enough nurses to deal with shortages created by the Covid-19 pandemic and have asked for improved staffing ratios.
“We do not take striking lightly, but that’s what’s going to happen if our bosses give us no other choice,” said Nancy Hagans, president of the Nurses Association, which represents 42,000 nurses in New York State.
The union said that the main sticking point at both hospitals was adequate enforcement mechanisms to ensure safe staffing levels were honored. No bargaining sessions were scheduled for Monday at this point, but the nurses were ready to return to the table, the union said.
On Sunday night, Gov. Kathy Hochul called for binding arbitration “so that all parties can swiftly reach a resolution.” Officials from both hospitals said they would welcome arbitration and hoped the nurses’ union would agree and postpone its strike deadline, but union officials did not accept the offer.
“Gov. Hochul should listen to frontline Covid nurse heroes and respect our federally protected labor and collective bargaining rights,” union officials said in a statement. “Nurses don’t want to strike. Bosses have pushed us to strike by refusing to seriously consider our proposals to address the desperate crisis of unsafe staffing that harms our patients.”
The negotiations are taking place nearly three years into a pandemic that has left some frontline medical workers with deep distrust for management, prompting nurses to walk out in states across the country, as well as overseas. Nurses in Britain went on strike last month for the first time in the 74-year history of the country’s National Health Service.
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Many nurses and doctors who worked through the first wave of the pandemic have not forgotten the conditions when Covid first swept through the city in early 2020, overwhelming hospitals with a surge of patients and killing more than 22,000 residents. Medical staff felt betrayed by administrators, after it became clear many hospitals had done too little in the way of preparation and there wasn’t nearly enough personal protective equipment.
The pandemic has also exacerbated a nursing shortage in New York. Many nurses left longstanding jobs at hospitals for higher-paying short-term assignments with medical staffing agencies, or they left the profession altogether. Hospitals in turn have grown more reliant on hiring contract nurses at higher-hourly rates from staffing agencies to fill the gap. But emergency departments and other units remain understaffed at many hospitals across the city, which means far more patients and stress for the nurses working there.
Ms. Hagan said hospitals’ failure to hire new nurses has left hundreds of unfilled slots.
“Our No. 1 issue is a crisis of staffing,” she said, adding, “It is an issue that our employers have ignored.”
Montefiore, in the Bronx, has failed to hire nurses to fill 760 empty slots, Ms. Hagan said. Some nurses are tending up to 20 patients at a time in units that are often swamped — especially the emergency room, which is “so overcrowded that patients are admitted in beds in the hallway instead of hospital rooms,” she said.
On Sunday, two other Manhattan hospitals, both run by the Mount Sinai Health System — Mount Sinai Morningside and Mount Sinai West, both on the West Side — reached a tentative settlement with the union, which included a 19.1 percent wage increase over three years.
Hospital officials said they had made the same offer, which provided an additional $51,000 in cash compensation for each nurse and $19,500 in medical payment benefits over three years, to nurses at the Mount Sinai Hospital on Fifth Avenue.
Nurses’ contracts expired on Dec. 31 at a dozen private hospitals in the city, and the union authorized a strike and sent the hospitals a 10-day notice.
In recent days, the union reached tentative contract agreements with most of those hospitals, including NewYork-Presbyterian, Maimonides Medical Center, Richmond University Medical Center, Flushing Hospital Medical Center, BronxCare and the Brooklyn Hospital Center.
Mount Sinai officials said the decision to strike on Monday would be reckless and would jeopardize patients.
In recent days, Montefiore and Mount Sinai scrambled to make arrangements for the looming strike, including discharging all the patients they safely could, bringing in substitute nurses, postponing many elective surgeries and diverting ambulances to other hospitals.
Mount Sinai began moving some vulnerable patients, including fragile newborns in neonatal intensive care units, to other hospitals, and helped cancer patients find alternative treatment locations. Officials said they transferred numerous patients from the three hospitals that were in negotiations to unaffected hospitals in their system and to partner hospitals.
Mayor Eric Adams said in a statement Sunday night that the city was communicating with the hospital systems, but said the hospitals in some areas of the city would likely be strained.
“In the event of a strike, our system will be prepared to meet the challenges,” he said, adding, “If there is a nurses’ strike, hospitals in certain areas may experience impacts to operations, including possible delayed or limited service. We encourage all New Yorkers to call 911 only for emergencies, and be prepared to seek an alternate facility in case their preferred hospital is impacted.”
Mount Sinai officials said in a statement that their bargaining teams at three hospitals have met with the nurses’ union more than 40 times since September, working “to avoid having nurses leave patients’ bedsides in the middle of a tridemic.” They added that a strike would “place even more strain on New York City’s emergency departments and health systems during a time of crisis.”
In a memo, Montefiore officials told nurses who planned on joining the strike that they were required to “finish your shift, providing a clinical handoff on your patients; you may not abandon patients.”
Montefiore officials also said in a staff memo that they would open “command centers” to assist with hospital operations and have police and extra security on site during a strike.
Jenny Gross and Sharon Otterman contributed reporting.
https://www.nytimes.com/2023/01/09/nyregion/nurses-strike-nyc-hospitals.html
A 'medical cost-sharing' plan left this minister to pay most of his $160,000 bill
by Brian Sable-Smith - NPR News - January 9, 2023
Kareen King calls it "the ultimate paradox": The hospital that saved her husband Jeff's heart also broke it.
What Happened Jeff King, of Lawrence, Kan., needed his heart rhythm restored to normal with a procedure called an ablation — sooner rather than later, his doctor said. Jeff asked the hospital for a cost estimate, but said he didn't hear back before his scheduled surgery in January 2021 at Stormont Vail Health in Topeka, Kan.
The real pain came when the bill arrived in the mail a few weeks later. The Kings, who were uninsured at the time, were on the hook for nearly all of the cost.
Jeff King, 63, Lawrence, Kan.
Approximate Medical Debt: $160,000
Medical Issue: Heart ablation
Jeff and Kareen King received the bill for $160,000 a few weeks after Jeff had the procedure to restore his heart rhythm.
Instead of signing up for traditional health insurance, the Kings had joined what's called a "medical cost-sharing plan" with a company called Sedera, which describes its service as a "refreshing non-insurance approach to managing large and unexpected health care costs." With this alternative to health insurance, members agree to share one another's expenses. The plans are often faith-based and have surged in popularity in recent years because they can be cheaper than traditional insurance — the Kings said their plan cost $534 a month, plus an additional $118 a month to join a direct primary care medical practice.
But the sharing plans offer fewer protections than insurance and come with provisos. The Kings said their plan did not fully cover preexisting conditions like Jeff's heart condition for the first two years of coverage — and he needed the surgery after 16 months.
"It's just so tragic the way our system is. It puts so many people into impossible financial straits.
In a statement a Sedera spokesperson said it's important that members understand the cost-sharing model and membership guidelines. "Sedera members read and agree to these prior to joining," the statement read.
The Kings have dabbled in all sorts of health coverage in their 42 years of marriage. Jeff's work as an evangelical pastor in his hometown of Osage City, Kan., almost never provided insurance for the couple or their five children, all of whom are now grown. The exception came during Jeff's most recent stint leading a congregation, starting in 2015. Kareen remembered feeling "unworthy" of the $1,800 a month the congregation paid for their insurance.
"We certainly had never come up with those kinds of premiums ourselves," she recalled.
But Jeff decided he had to leave that job in 2018. He said he felt forced out over differences with some of his congregants on eternal damnation ("As a loving parent, I could never punish my child forever") and gay marriage ("Maybe God is a whole lot more inclusive than we are").
After Jeff resigned, the Kings briefly bought insurance through the Affordable Care Act marketplace, but later dropped it because they weren't eligible for subsidies and felt they couldn't afford it.
That's when they joined the Sedera plan. They knew the preexisting condition clause was a gamble, but medication had managed Jeff's heart condition for years, and they didn't expect he'd need medical procedures to address it.
What's Broken: Without employer-sponsored insurance or federal subsidies to help fund their coverage, the Kings felt priced out of traditional insurance. But being uninsured left them exposed to hospital charges that ordinary patients typically never see.
Hospital charges are generally understood by health economists to bear little resemblance to the actual prices that are typically paid. Instead, they are more of an opening salvo in the high-stakes negotiations between hospitals trying to get as much money as they can for providing care and insurance companies trying to pay as little as possible.
But patients lack the bargaining power of large insurers, which may cover hundreds of thousands of patients in any given hospital's catchment area. For patients like Jeff, the main recourse is to go through a hospital's financial assistance program, although even with that help many patients can't afford the bills hospitals send them.
Stormont Vail's assistance program eventually knocked about $107,000 off Jeff's original bill. Sedera provided a negotiator to help him haggle over costs.
Stormont Vail provided $19.5 million in financial assistance in tax year 2020 and wrote off about $13 million in bad debt, according to tax filings. Its net revenue from patient services was $838.7 million.
Bill Lane, a Stormont Vail administrator, said that in addition to providing financial assistance, the hospital works with patients facing high bills and offers payment plans with zero interest. Payments are often in the range of 10% of a person's monthly income," Lane said. For some patients the hospital has a "catastrophic discount" program that caps their balance at 30% of their gross household income. The hospital also works with a local bank to provide loans to patients to pay their bills. And the hospital sometimes sends patient balances to debt collection agencies.
Lane said he generally recommends that patients carry traditional insurance. He also said the hospital offers a "patient estimates module" and suggests patients wait to schedule surgery, if possible, if they want an estimate "to make an informed decision."
What's Left: Despite Sedera's two-year waiting period to cover preexisting conditions, the plan did give Jeff $15,000 to help with his bills. After Jeff paid that to the hospital and then negotiated for several months, his final balance was reduced to $37,859.34 in November 2021.
For his payment plan, Jeff said he was told the hospital would accept no less than $500 per month — the equivalent of an additional mortgage payment for the Kings. Jeff estimates it will take the family more than six years to pay it off.
"I never expected this to not cost me anything," Jeff said, "but I wasn't expecting what it turned out to be either."
The Kings are piecing together the funds to pay what they owe the hospital. A few months after Jeff's ablation, they sold their home in Osage City — where they raised five children and where Jeff grew up — and bought a smaller house in Lawrence. They had hoped to use that money to build their retirement account, since Jeff's decades of pastoral work didn't include a pension or 401(k).
Instead, the home sale is helping pay Jeff's medical debt. Kareen has part-time jobs, and the couple leveraged their life insurance policy, as well.
Jeff began work as a hospice chaplain — for the extra income, but especially to qualify the couple for health insurance. That meant less time for his passion project, running a nonprofit called Transmuto through which he provides spiritual guidance.
In February, Kareen checked again on whether the couple could afford Affordable Care Act insurance so Jeff could get back to Transmuto full time. Her Google searches for the federal government's health insurance marketplace (HealthCare.gov) instead unwittingly landed her on websites that sell consumer information to insurance brokers. Speaking to one of those brokers on the phone, she bought what she said she was told was an Aetna plan. But it turned out to be a membership in a cost-sharing plan with a company called Jericho Share, which has received over 160 complaints on the Better Business Bureau website in the past year.
Jericho Share spokesperson Mark Hubbard said in a statement that the organization is "issuing full refunds when there is consumer confusion" and is continuing to "evaluate and update our marketing efforts to increase transparency and awareness."
Hubbard also said Jericho Share is cooperating with regulators in California and New Hampshire that have questioned whether the organization meets state requirements of a health care sharing ministry. California is also questioning whether Jericho Share has indeed received 501(c)(3) nonprofit status from the IRS.
After canceling that plan and getting their money back, the Kings eventually did sign up for an ACA marketplace plan. Jeff has reduced his hours as a chaplain, freeing up more time for Transmuto. All in all, the couple feels pretty fortunate.
"It's just so tragic the way our system is," Jeff said. "It puts so many people into impossible financial straits.
https://www.mainepublic.org/npr-news/2023-01-09/a-medical-cost-sharing-plan-left-this-minister-to-pay-most-of-his-160-000-bill
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