December 13, 2019

The Weekly Gist: The Loaded for Bear Edition

by Chas Roades and Lisa Bielamowicz MD

This week we had an unsettling reminder of just how dependent on technology we’ve become—maybe this has happened to you? On a three-hour car trip between two member events in different states, we were following our Google Maps voice instructions further and further into the middle of nowhere, until eventually we fell off the grid completely. Left to their own…er…devices, our nearly useless iPhones proceeded to take us deeper and deeper into the back of beyond, as the sun went down and the roads turned from two lanes to one lane to—literally—dirt. May I just emphasize, it was darkand we were lost. Twenty years ago, we might have pulled out the road atlas and a flashlight and noodled our way through it, but those muscles have long since atrophied, and paper maps long forgotten. Fortunately, just as we began to contemplate What to Do If You Encounter a Bear in the Dark, a tiny “1x” appeared on our phones—a modern-era miracle. Two hours later, and a full two hours late, we made it to our destination.

We could have dealt with that bear, though.


THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

No surprise, lawmakers fail to reach a surprise billing compromise

It came as no surprise (pun intended) this week when Congress again failed to reach a compromise on legislation to address the surprise medical bills patients receive when they unknowingly see an out-of-network provider at an in-network facility. Last Sunday it appeared a bipartisan agreement had been reached to be included in year-end spending bills. This compromise would have patients’ insurance companies reimburse out-of-network providers at the median in-network rate for a region, allowing for exceptions in which providers can take larger bills to arbitration. Though the bill was based on a similar approach taken by a California law, it had been met with strong pushback from both physician staffing companies and the American Hospital Association, which held that the bill would create incentives for insurers to remove hospitals from their networks, and force artificially low reimbursement rates. Meanwhile on Wednesday, House Ways & Means Committee leaders announced the high-level outline of a new, separate proposal, and called for lawmakers to delay legislative action on the issue until 2020.

While the details of this new proposal remain unclear, a legislative summary describes a “reconciliation process”, which would consider payments made to similar providers for similar services in a local area, if providers and insurers cannot agree on payment for emergency or out-of-network care at in-network facilities. The losing side in the reconciliation process would pay a fee; additional fees would be levied on providers and plans who use the process too frequently. Despite this week’s stalemate, it’s likely we’ll see bipartisan movement on surprise billing at some point, as nearly 8 in 10 Americans support such legislation. Removing the ability to bill patients directly could reduce revenue and weaken the leverage providers have in bargaining with insurers over payment rates. Even in the midst of a charged political environment, we’d expect these pocketbook issues to continue to gain traction as lawmakers look to address public concerns over out-of-pocket spending for care.

Civica Rx ramps up delivery of critical drugs

This week Civica Rx, the nonprofit drug company formed by a coalition of health systems, announced it would deliver eight critical injectable pharmaceuticals by the end of the year for its member hospitals. The drugs are being manufactured through a partnership with Hikma Pharmaceuticals, one of three that the company has struck with drug manufacturers, in addition to laying the groundwork to produce its own medications. After launching in the fall of 2018, one of Civica’s medications first reached a patient in October, when the essential antibiotic Vancomycin was delivered at a hospital in Utah. The company’s membership has grown to more than 45 health systems representing more than 1,100 hospitals. Civica brings the potential to run directly at a generic drug market that has been in turmoil, with acquisitions and other efforts to reduce competition allowing drug companies to raise prices, and quality lapses increasingly common. With these deliveries, the company appears to be on track to deliver against that goal. As health systems look to build scale and compete with disruptors, Civica represents a prime example of how health systems at national scale can deliver value to the market—and do so through partnership rather than M&A. 

The Azar-Verma feud comes to a head

Washington loves a good political soap opera, and it’s getting its money’s worth this week with the latest daily episodes of “As the Health Policy World Turns”, starring Secretary of Health and Human Services (HHS) Alex Azar and Center for Medicare and Medicaid Services (CMS) Administrator Seema Verma. Incredibly, by week’s end neither character has been written off the show, although Wednesday brought a Very Special Episode in which both Verma and Azar, who have, according to various press reports, been feuding for months, were called into a White House meeting convened by Vice President Pence aimed at resolving tensions. The rivalry between the two evidently extends back to their days in Indiana, when Pence was then governor, and have continued since Azar replaced former HHS Secretary Tom Price in the Trump cabinet. According to a recent Washington Post article that drew on interviews with more than a dozen current and former administration officials, the back-and-forth between Azar, Verma, and their respective allies has all but frozen meaningful progress on several key health policy initiatives, including the development of a full-scale proposal to replace the Affordable Care Act. Azar has reportedly complained that many of his ideas have been torpedoed by Verma in front of White House officials, while Verma accuses Azar’s team of engineering a series of damaging press leaks about her spending on image consultants and her reimbursement claim for over $47,000 worth of jewelry stolen during an official trip. In short, the feud is ugly and getting uglier—and is undoubtedly an unwelcome distraction in the midst of a re-election campaign in which healthcare features as a pivotal issue. Tune in next week…who knows what might happen next?


GRAPHIC OF THE WEEK

A key insight or teaching point from our work with clients, illustrated in infographic form.

Eyeballing the impact of new coverage proposals

Though Medicare for All (M4A) may dominate your newsfeed these days, there have actually been 14 (by our last count) coverage expansion bills introduced in the 116th Congress, and the number of proposals increases from there once you factor in the various plans released by Democratic presidential candidates. These plans all largely fall into four distinct flavors of coverage expansion: M4A, a new public option, and “buy-in” to either Medicare or Medicaid. As the bubble sizes in the graphic below indicate, there’s a big difference in the how many people each kind of plan would affect. We’ve done our best to discern how much each type of proposal would cost, how many it would cover, how providers would be paid in each, and how popular each is with voters.

Important caveat, and apology: many of the proposals currently under discussion lack key details (especially—surprise—about how much they’d cost), so we’ve made a lot of assumptions here, thus the many, many footnotes. That said, it’s clear that true M4A, which would cover just about the entire US population, would have the most far-reaching and significant impact in terms of cost and delivery. To wit, Sen. Elizabeth Warren’s (D-MA) proposed M4A hospital payment rate of 110% of Medicare won’t come near the average amount private health insurers pay hospitals. Indeed, one estimate from a JAMA article earlier this year suggests that hospitals could lose as much as $151B in annual revenue under M4A, a 16 percent decline. Industry opposition, as well as public concern about the tax increases needed to pay for M4A, make more modest approaches to coverage expansion options more likely. These proposals generally focus on specific segments of the population that remain uninsured, carry a lower price tag, and leave the private insurance framework largely intact. We’ll keep our eyes peeled for more details on these various plans as they become available.


THIS WEEK AT GIST—ON THE ROAD

What we learned this week from our work in the real world.

Bringing along the voice of a new generation

Lisa:
At a recent member board meeting, we had to BYOM (Bring Your Own Millennial). When the discussion turned to what Millennial consumers want from healthcare, I put our team member, the sole Millennial in the room, on the spot to speak for the preferences of an entire generation (apologies, Frederik…you did a great job as a focus group of one!). Nearly every health system we work with is debating how to engage Millennial consumers or understand Millennial employees (perhaps an even more pressing need, given that Millennials now outnumber Baby Boomers in the healthcare workforce). But having a real live Millennial participating in a health system board meeting is a rarity. Most often we rely on secondhand information, either from studies analyzing their behavior, or Boomer board members’ personal experiences as the parents of Millennials. When I suggested that systems are at a disadvantage in not having Millennial board members, the system CEO agreed, and said they had tried—and failed—to recruit younger members. It was largely a question of availability. Family commitments were one challenge, but the greatest obstacle was committing to days away from work. Younger executives and community leaders are in the “high-growth” stage of their careers, and rarely in control of their own schedules, making the commitment to an (unpaid) board seat difficult. Even if systems aren’t ready to reshape the Director role for Millennials, they must find a way to directly engage younger leaders and integrate them into decision-making at all levels of the organization.

Learning from the experience of the banking industry

Chas:
At a recent health system board meeting, I was giving an overview of the Trump administration’s new rule requiring hospitals to reveal their negotiated rates with insurers, and the broader push across healthcare—hospitals, insurers, drug companies, and others—for more transparency. One of the board members, who had spent most of his career in financial services, commented that what I was describing sounded very familiar, because he had confronted the same situation in in his career. Banking is also heavily regulated, and over the years has faced many of the same market forces now converging in healthcare: consolidation of providers, the rise of a decentralized model of service delivery, the impact of information technology, and heavy pressure from regulators to provide more transparency about fees to increasingly empowered consumers. I asked him what lessons he learned from that experience that could translate to healthcare. His response: don’t fight transparency. Rather, put yourself on the side of the consumer, and begin to frame the conversation in a way that positions you as an enabler of more helpful transparency. Provide consumer-friendly information about prices and services, and over-invest in tools that help your customers understand the complexity of the service you’re offering. Become an advocate and advisor to the consumer, instead of trying to conceal “secret” fees and prices. That seems like excellent advice to me, and a great reminder that healthcare leaders have a lot to learn from outside our industry, on this and many other fronts.


THIS WEEK AT GIST—ON THE PODCAST

All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

On last Monday’s episode, Gist spoke to fellow podcaster Dan Weissmann about how hard it is to get an accurate price estimate for hospital care. Weissman hosts the popular show An Arm And A Leg, which focuses on the cost of healthcare, and how consumers struggle to deal with it. In a recent episode of his show, Weissman interviewed Lisa about what it would take for a hospital to get patients real-time price quotes.

Coming up next Monday, Gist talks to Kirsten McGovern, a partner at healthcare consulting firm Sirona Strategies, about CMS’ new accountable care organization demonstration. The Center for Medicare and Medicaid Innovation (CMMI) unveiled the details of its Direct Contracting program last month. Hear McGovern explain how this model, which encourages a variety of providers to take on more risk, differs from previous Medicare Shared Savings Program (MSSP) projects—tune in Monday!

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ON THE GIST TURNTABLE

Give this a spin, you might like it.

There are bands that sound like they should be playing in a bar on a cold, rainy, late-fall night. Hardworking, earnest rock musicians that deliver confessional, anthemic songs for underdogs. In the indie world, The Hold Steady are a classic example, as are Titus Andronicus, Ted Leo and the Pharmacists, and surely many others. Criminally underappreciated among them are Hallelujah the Hills, a Boston-based outfit that’s been around since 2007, who just released their seventh, and best, studio album, I’m You. It’s a sprawling, shaggy collection of songs about being just that kind of band, one whose songs hit you at a gut level because it sounds like they’re singing about you. “Hello, I am the person singing this song,” sings frontman Ryan Walsh on the album’s opener, “And if you think that might be you/Well I guess you might not be wrong.” Walsh and his bandmates, who deliver driving, heartland rock songs that often include soaring trumpets, sing-along choruses, and foot-stomping rhythms, have put together an album that explores the two-way mirror of being a band that people look to as a way to understand their own lives—and vice versa. On the title track, one of many that extends past the six-minute mark, Walsh spells it out: “We know the dangers of one person/Using another person as a muse/But surely there can’t be nothin’ wrong/If it goes both ways…/I’m you/Don’t freak out, I’m you.” In a fairer universe, these guys would be Wilco-level famous, and there’s more than a little Jeff Tweedy in Walsh’s songwriting. Well worth a listen. Best tracks: “My Name Sounds Sinister”; “I’m You”; “Running Hot With Fate”.


WHAT WE’RE READING

Stuff we read this week that made us think.

More Americans die at home than in hospitals

In a new analysis published in the New England Journal of Medicine (NEJM) this week, researchers revealed that the number of Americans dying at home has surpassed the number dying in hospitals for the first time since the early 20th century. As hospitals have been under increasing cost pressure and faced payment incentives to shorten the stays of older patients, and as individual preferences have shifted in recent times, more and more Americans have been dying at home, now accounting for over 30 percent of natural deaths. We still lag England (46 percent) and Canada (60 percent) in terms of proportion of deaths occurring in the home setting, but the shift has been steady over recent years. With the rise of hospice services, dying at home has become a more frequent occurrence, while deaths in hospitals, nursing homes, and other institutional settings have declined. As pointed out in New York Times coverage of the study, however, many families may not be prepared to deal with the death of a loved one at home, and the increase in home-based deaths may be putting a strain on caregiving resources. Families may face unexpected costs and have to endure heavy emotional and physical burdens when an individual dies at home. As the Baby Boom generation approaches the last third of their lives, one clear priority across the coming decade will be to invest in infrastructure and support to allow people to die at home—just a part of the larger “end of life” conversation that is long overdue in this country.

Does medical education need a new Osler?

One obituary for Sir William Osler, who died 100 years ago this month, questioned whether “any single man has ever so deeply influenced any other profession.” A recent piece in NEJM reminds us of what made Osler a giant: he created the modern, scientific, rational method of clinical practice, marrying it with a humanistic approach to patient care. He fostered a common culture among physicians, connecting practice to Hippocrates, and establishing medicine as a noble and respected profession. Osler’s efforts to reform medical education around hospital-centered teaching were memorialized in the landmark 1910 Flexner Report, which seeded a standardized form of medical training across this country.

Today healthcare faces a new set of challenges that raise the question of whether the model of medical education that has served us so well, for so long, is in need of renewal. Should all medical schools look the same, or would a diversity of approaches allow for needed innovation, particularly as a dozen or more new medical schools launch?  Does an inpatient-centric training model provide the diversity of experience to design care models that integrate information resources and care settings far beyond the teaching hospital? Should we consider an undergraduate model of medical education, given the need to increase physician supply and reduce student debt? The piece’s authors suggest if Osler were alive today, he might “replace the ‘profession of medicine’ with ‘the global community of healthcare workers’”. Osler’s teaching has served the profession admirably for a century. Medicine is now ready for a new generation of Oslers ready to transform training toward a clinical workforce capable of using a new set of tools and information to sustainably care for a complex and diverse patient community.


That brings us to the end of another edition of the Weekly Gist. Thanks for making time to read our work, and to share your thoughts and feedback with us. We love to hear from you, and we’re so grateful for your readership. Don’t forget to share this with a friend or colleague and encourage them to subscribe! And be sure to check out our daily podcast as well.

Most important, don’t hesitate to reach out if we can be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com