March 1, 2019

The Weekly Gist: The Traditions in Jeopardy Edition

by Chas Roades and Lisa Bielamowicz MD

We live in a dark new age, one in which long-held traditions are being thrown out the window, rivalries of a bygone era are being rekindled, and the comforting solidity of our most cherished institutions is crumbling. We speak, of course, of the abomination of All-Star Week on Jeopardy. Team drafts? Multiple rounds? Games with only one board? The return of Buzzy? Please stop hurting America, Alex Trebek. Give us our old familiar quiz show back. Make Jeopardy Great Again!

THIS WEEK IN HEALTHCARE

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

House Democrats formally propose a single-payer health plan

On Tuesday, Rep. Pramila Jayapal (D-WA), along with 106 co-sponsors, introduced the Medicare for All Act of 2019 in the US House of Representatives. The bill is the most aggressive single-payer proposal yet to be advanced by Congressional Democrats, envisioning a two-year timeline to transition the American healthcare system to universal, government-run coverage and promising to cover all hospitalizations, doctor visits, prescription drugs, dental and vision services, and maternity and newborn care with no out-of-pocket cost to individuals. Jayapal’s bill is even more sweeping than the 2017 single-payer plan proposed by Sen. Bernie Sanders (I-VT), extending coverage to include long-term care for the elderly and disabled, a feature originally included in the Affordable Care Act (ACA) of 2010 but later axed due to its price tag. The new bill would eliminate private, employer-sponsored coverage, but would allow current participants in the Veterans Health Administration and Indian Health Service to keep their current coverage. Notably absent from the legislation is any recommendation for how to pay for the coverage scheme, although Jayapal suggested that new taxes would be proposed later.

The new bill is expected to amplify the growing debate over “Medicare for All” (M4A), an emerging centerpiece of Democratic policy as the 2020 Presidential election takes shape. Fault lines have already emerged within the Democratic party between progressives like Jayapal, Sanders and other early Presidential hopefuls Sen. Cory Booker (D-NJ), Sen. Kamala Harris (D-CA), Sen Elizabeth Warren (D-MA), and more moderate Democratic leaders who worry that demands for M4A will prove too radical for voters to support. House Budget Committee chairman Rep. John Yarmuth (D-KY), for example, was quoted this week telling proponents of M4A to “get over it”. Republicans, meanwhile, are pointing to the new legislation as evidence of a hard-left turn in the Democratic Party, with Vice President Mike Pence calling the bill and the larger M4A movement socialism in the making. Insurance and hospital industry lobbyists were sharply critical of the new bill as well. Notably, however, it does not entirely eliminate the role of insurers, who would be permitted to cover services not included in the government-run plan—allowing private care to be paid for by private insurance outside the single-payer program. While the bill may not even see the light of day on the House floor, and will certainly not pass in the current Congress, it does stake out what will likely be the left-most guardrail in our national debate over M4A.

Grassley renews scrutiny of tax-exempt hospitals 

Senate Finance Committee Chair Chuck Grassley (R-IA) this week increased his scrutiny of nonprofit hospitals’ tax-exempt status. In a letter to the head of the Internal Revenue Service (IRS), Grassley questioned whether nonprofit hospitals are in compliance with charity care and other requirements upon which their tax-exempt status is conditioned. The letter emphasized his ongoing interest in hospitals’ debt collection practices: “As chairman of the Senate Judiciary Committee, I oversaw an investigation into the billing practices of the Mosaic Life Care hospital. That investigation resulted in debt relief of almost $17 million for thousands of low-income patients. This issue is still just as important to me now that I am chairman of the Senate Finance Committee.” Grassley asked the IRS to respond to specific questions about its compliance review practices and results by April 1st.

Grassley’s letter comes as a bipartisan Senate effort looks to gather data and develop policies to address surprise hospital billing. Other lawmakers have introduced legislation to clamp down on hospital mergers in the face of rising prices. Meanwhile, new data released by the Medicare Payment Advisory Commission (MedPAC) show that hospitals’ total margins continue to rise even as their Medicare margins decline, indicating an increase in commercial pricing. Given this confluence of issues—rising hospital prices and profits in the face of unsustainable individual spending on care—it’s not surprising that hospitals, who account for the greatest portion of healthcare costs, are in legislators’ crosshairs. With state and Federal spending on healthcare reaching unsustainable levels, and constituents voicing ever-louder concerns about the impact of health spending on household budgets, we’d expect to see even tougher scrutiny of hospital pricing, billing, and charity care in the months ahead.

A worksite clinic provider goes virtual

Crossover Health, a provider of onsite and near-site employer-based clinics, announced this week that it will acquire virtual primary care start-up Sherpaa in an attempt to create an integrated employer health offering. Operating 20 clinics in six states, Crossover provides worksite healthcare to large companies, including Visa, Comcast-NBC Universal, Facebook and Microsoft, and gained national attention when it partnered with Apple to operate that company’s onsite employee clinics. To date, Crossover’s service portfolio has been based around physical care sites, but the acquisition of Sherpaa is a signal that the company believes that much of worksite healthcare could be delivered virtually, and that large employer partners will demand a fully-integrated telemedicine offering. Case in point: Comcast, which has been aggregating its own platform of health and wellness solutions, recently partnered with telemedicine provider Doctor on Demand.

Companies with fewer than 1,000 employees in a single location are often reticent to invest in onsite or near-site clinics, as we’ve learned in our work with them. Adding virtual care capabilities allows providers to tap into new categories of employers, and also reduces the cost of staffing clinic sites. Sherpaa’s model is particularly intriguing for the employer market. Since its inception the company has focused on providing a virtual care solution that moves beyond single-serve visits by supporting asynchronous communication and ongoing interactions with the same provider. Sherpaa also maintains a network of “preferred” specialists and can directly schedule appointments with those doctors. The combination of Crossover and Sherpaa could create a compelling employee health offering that provides more comprehensive care, ongoing management of chronic conditions and a concierge-like connection to high-value specialists.Success will depend on their ability to integrate services into a single, seamless consumer-focused health and wellness platform.


GRAPHIC OF THE WEEK

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

The rapid but uneven growth of Medicare Advantage

As we’ve discussed in the past, we agree with projections for fast growth in Medicare Advantage (MA) enrollment in coming years. With commercial volumes declining as a percentage of total insured lives, national insurers like Humana, Aetna, and UnitedHealthcare undoubtedly view MA as central to their future growth. And a growing number of provider organizations, some of whom cut their teeth on population health strategies as Medicare accountable care organizations (ACOs), are now making the full transition to risk by launching their own health plan offerings. Medicare is on a slow and steady path toward privatization, with one in three Medicare enrollees covered by private Medicare plans, a number expected to grow to 50 percent within the next five years and 70 percent after 2030, by which time the entire Baby Boom generation will be eligible for Medicare coverage. Despite early Obama administration rhetoric about eliminating government subsidies for MA insurers, the growth of the program has continued unabated.

If Medicare Advantage is the future, then to paraphrase the author William Gibson, the future is already here, it’s just not evenly distributed yet. As the graphic below illustrates, MA penetration varies widely across states, with some markets dominated by private coverage for seniors, and others barely registering any activity from MA plans. There are several explanations for this variability. Areas with low population density (such as the Plains states and the upper Midwest) are less fertile ground for MA, given that success in MA depends on the ability to manage enrollees within a tight network of providers. Sparsely-populated areas or those where healthcare facilities and physician services are farther-flung make for challenging network construction, and competition between providers is less likely. Insurance market structure plays a role, too; in general, states in which the local Blues plan dominates the commercial group market also have lower MA penetration, likely because the national MA carriers have smaller commercial populations to “age into” their MA products, making it unattractive to maintain an MA plan in those regions—and Blues plans themselves have been slow to enter the MA market. States with more competitive insurance markets, larger population centers, and importantly, greater numbers of retirees (Florida, California, the Southwestern states) have seen greater penetration of MA coverage.

There are several strategic implications of this geographic variability for insurers and providers looking to enter or grow their MA presence. We’d expect the national carriers to be more willing to engage in provider partnership strategies to “break into” under-penetrated markets, allowing them to establish a beachhead for MA products while stealing share from incumbent Blues plans. Providers looking to launch their own MA products will find it more difficult to convince seniors to join in states where private Medicare coverage is not the norm, putting a premium on physician-led strategies, which allow them to leverage relationships with their patients. And we’d expect to see payer-provider organizations who’ve already built experience in MA look to “white label” their plan capabilities in joint ventures with those in under-penetrated states, as a path to growth beyond their own, more competitive markets. All the while, payers and providers should keep a watchful eye on Congress and Medicare administrators, who have both tacitly and explicitly supported the continued growth of MA to date—but could change direction given political or cost pressures.


THIS WEEK AT GIST—ON THE ROAD

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

The role of the provider-sponsored health plan in Member Health 

Lisa:
I’ve recently had the chance to help the executive teams of two large health systems from opposite sides of the country think through their strategies to move toward a “Member Health” model, in which their health systems would reorient around the goal of building long-term, loyalty-based relationships with consumers, helping them manage health over time. Both of these systems are actively investing in care assets that most clearly drive consumer loyalty and shape the consumer’s experience (digital health, primary care, convenient access points), and are using those assets to build deeper relationships with patients. Both also own their own health plans and have the ability to directly integrate care delivery and financing for a large subset of their patients.

In building Member Health, owning a health plan is a clear advantage for a health system—but both systems posed questions about the relationship between the health plan, health system and the consumer. Should consumers think of themselves as “members” of the health plan or the health system, or both? Or should they be “members” of a single entity, a new platform that encompasses both, but feels like something unique? Should “member” benefits be available to every health system consumer, regardless of their insurance carrier, or should there be there a subset of benefits that are accessible only to their own health plan members?

While commercial insurers may refer to their enrollees as “members”, we’d venture that few consumers feel that they’re getting real value from being members of a health plan (witness the dismal net promotor scores of health insurers compared to other industries). We’re biased toward a consumer relationship with a single Member Health platform, centered on the provider. The best case study in today’s market to see what this relationship would look like, and how consumers would interact with the health plan and health system in an integrated solution, is Kaiser Permanente. Kaiser’s members know that they’re members of the health plan, but their connection is with the care and access delivered by providers—and more specifically, the network of physicians, clinics, and virtual care. Thinking about the Kaiser example, it seems to us the value of having a fully-integrated health plan in the Member Health model comes from making the traditional health plan function invisible to the patient. A Kaiser member is rarely inundated by explanations of benefits (EOBs) or worried about their copays or co-insurance. The differentiating value of having a provider-owned plan may be the ability, from the perspective of the member, to make their health plan disappear.

Asking physicians to loosen their grip on a cherished possession

Chas:
This week, I took part in a strategy retreat for the flagship hospital of a high-performing regional health system client and was delighted to discover that one of their key strategic priorities for the coming year is implementing open-access scheduling for all of the physician practices they work with—including the independent practices that are part of their clinically-integrated network. I wasn’t surprised; this system has historically been at the leading edge of innovation, pursuing direct-to-employer arrangements, piloting new clinic models, investing in telemedicine, and so forth, often years ahead of their competitors. They’ve made a name for themselves as progressive partner for independent doctors who don’t necessarily want to be employed by a health system or large group practice. Naturally, as consumerism has begun to take hold in their market, they’ve experimented with pricing strategies and consumer engagement approaches that have been well-received by their patients.

But asking independent physicians to open up their schedules to allow centralized, “Open Table”-like access to appointment booking has remained on the to-do list—until now. It’s a big ask: for many physicians in independent practice, their work schedule is a fiercely-defended zone of autonomy. As one doctor once told me, channeling Charlton Heston, “They can pry my schedule from my cold, dead hands.” But this system realizes that making scheduling seamless and simple for patients is an essential component of a 21st-century service offering, and critical to building loyalty. Over the course of this year, they intend to build the online and phone-based infrastructure needed to promise same-day appointment access to doctors that work in their health system. Not just the doctors they employ, but aligned independents will also be asked to give up control of their calendars. The fact that they’re feeling confident about achieving this goal is testament to the hard work they’ve put in over the years to build strong relationships and shared decision-making with their doctors, who are engaged and helping to lead the initiative. Easy and available scheduling is a cost of doing business in the new healthcare environmentand a litmus test for a truly “consumer-oriented” healthcare delivery organization. And it’s another example of an innovation that would be impossible outside the context of strong alignment between the health system and doctors.


GIST IN THE NEWS

We said it, they quoted it.

TRUST Talk: Disruptive Innovators in Healthcare
Women’s Health Leadership Trust; February 22, 2019

“2018 could be described as “the year of disruption,” or the “year of mergers” — which brought together a series of strange partners the likes of which we haven’t seen before in health care. What will the implications be and what can we expect to see in 2019? Join us as we talk to Dr. Lisa Bielamowicz, co-founder and President of Gist Healthcare, a strategic advisory company that provides objective insights and guidance to health care organizations and leaders in a rapidly evolving industry.”

[Listen to the full podcast episode (34 min)]


ON THE GIST TURNTABLE

Give this a spin, you might like it.

There’s been a mini-resurgence of 70s-style soul music in recent years—witness the late-career success of soul-funk showman Charles Bradley, or the Daptone revivalists Sharon Jones & the Dap-Kings. Bradley and Jones are both sadly gone, but a new generation of musicians working under their influence has emerged, the most promising of whom might just be the Indiana University-born Durand Jones & the Indications. Out today with their second full-length release, the five-man outfit burst onto the scene in 2015 with their 7-inch single “Smile”, followed by a first album that showcased the range of their crate-digging, Stax-inflected sound. But their latest, American Love Call, takes them to a new level entirely, making a strong argument for the continued relevance of the 70s soul sound. A fuller, richer palate, drawing on horns, strings, backup vocals, and the combination of Jones’s gritty voice and drummer Aaron Frazer’s falsetto, vaults this album into the vanguard of the retro-soul movement.

The opener, “Morning in America,” is an urban landscape painting that vibrates with Marvin Gaye and Gil-Scott Heron influences (“It’s morning in America/But I can’t see the dawn”), taking us on a tour of America waking up from East Coast to West, from Baltimore teachers to Richmond nurses to Maricopa jail inmates. Across a dozen tight tracks, Jones hits all the touchstones of classic soul songwriting, from unrequited love on “Circles” (“When I see you walking down the street/I hope and pray that our eyes will meet”) to doo-wop lament on “Court of Love” (“Heartbreak in the first degree/Old story”). These songs are at once old and new, putting a fresh coat of paint on a classic lowrider set—a slower sound that takes its sweet-soul time to comment on today’s world. What a pleasant surprise for 2019—dig in and feel the groove.


WHAT WE’RE READING

Stuff we read this week that made us think.

Instead of Medicare for All, how about Medicaid for Some?

Even as a national debate shapes up between supporters of Medicare for All (M4A) and those who favor more modest Medicare buy-in approaches, a different “M” is at the center of a growing number of state-level policy proposals: Medicaid buy-in. New reporting from Kaiser Health News this week sheds light on efforts in several states to craft Medicaid-based “public option” plans that could be offered to low-income consumers who aren’t eligible for traditional or expanded Medicaid. Currently under consideration by lawmakers in Minnesota, Oregon, Colorado and Washington state, the idea of Medicaid buy-in has gotten greatest traction in New Mexico, where legislation to implement it has been proposed in both houses of the legislature, and whose newly-elected Governor Michelle Lujan Grisham has expressed her support for the concept. The New Mexico plan would operate alongside the existing Medicaid program, which already covers 40 percent of the state’s residents, and would offer a low-cost coverage option with financial assistance to purchase the plan if needed. The plan would be targeted at those who earn more than the threshold level for ACA premium subsidies, immigrants who live in the state illegally, and those not otherwise eligible for Medicaid or Medicare coverage. Providers who care for covered patients would be reimbursed at Medicaid rates for their services.

New Mexico would not need to seek Federal approval for the plan, since it would not be sold on the ACA marketplace. However, some Democrats in Congress have proposed enabling states to launch their own “public option” plans more broadly in legislation introduced in 2017 by Sen. Brian Schatz (D-HI) and other co-sponsors (including several current Presidential candidates). “Medicaid for Some” approaches could represent a compromise solution for expanding coverage without fully transitioning to a more aggressive single-payer plan. This could make Medicaid buy-in a more realistic option, and one not contingent on Democrats winning control of both houses of Congress and the White House. And since Medicaid has long been considered the most “efficient” payer, in terms of managing cost of care for enrollees, such an approach could prove more fiscally palatable as well. With legislative gridlock in Washington, it’s worth watching states like New Mexico and others as they press forward with their own solutions to the vexing challenges of healthcare cost and access.

Two surgeries at once? No problem—most of the time

For decades it’s been typical at nearly every hospital for the lead surgeon to step out of the operating room during the low-risk parts of a case. It goes something like this: a surgical fellow may open, the attending surgeon steps in to perform the critical elements of the procedure, then a junior resident or physician assistant (PA) closes while the “top doc” moves on to the hard part of the next case. This double-booking of cases has the clear advantage of increasing surgeon and operating room productivity and is largely considered standard operating practice, but until recently little research has examined whether multitasking is harmful for patients. A new and comprehensive analysis published this week in JAMA shows that overlapping surgery is largely safe—but some higher-risk patients may suffer.

Researchers evaluated the complications and in-hospital mortality for over 66,000 patients undergoing heart, brain, spine, hip and knee procedures at eight medical centers. They found that outcomes were equivalent for the vast majority of patients, but that patients undergoing coronary bypass surgery and those rated as high-risk pre-operatively due to age or comorbidity had higher rates of mortality (5.8 versus 4.7 percent) and greater post-operative complications. While overlapping surgeries may make the surgeon more productive, they were associated with significantly more time in the operating room for the patient, which may contribute to the greater rate of adverse outcomes for risky patients.

The main takeaways of this study are obvious: hospitals should re-examine double-booking surgeries for at-risk patients and some complex procedures. But the safety of most double-booked procedures is good news not only for providers, but consumers as well, given the increase in wait times that would result from eliminating double-booking entirely. However, the fact that the double-booking has largely been opaque to consumers, and that few know to ask whether their surgeon will be dividing her time, is troubling. Some patients only find out when hit with a “surprise bill” from an assisting surgeon or PA whom they had no idea was part of the case. It’s incumbent on providers to be transparent with patients about who will be present and performing during surgical cases, and who will bill for those services.

Screening for depression in the dentist’s chair 

Who isn’t depressed to go to the dentist? Kidding aside, we were intrigued by a recent Kaiser Health News profile of a novel concept: combining dental practice and mental health services, with a focus on expanding behavioral health access for underserved communities. Huang Le, a dentist at Asian Health Services, a federally-qualified health center (FQHC) in Oakland, CA, has had several patients over her years of practice express suicidal thoughts during dental visits. Le began integrating anxiety and depression screening into her history and exam process. Motivated by the difficulty of getting patients to treatment, last year she brought a mental health counselor into her dental practice. Patients can now be seen immediately for consultation if risks are identified and can return to the practice later for ongoing counseling.

The combination of dental and mental health is one that is exceedingly rare in private practice but growing in the community health setting. For patients, particularly the elderly, spending a lot of time in the dental chair and visiting the practice several times a year leads to an ongoing relationship and an openness about personal issues. For those who fear the stigma of mental health treatment, receiving care in the dental clinic creates a safe space for treatment. This combination of services is an excellent example of consumer-centered care for the lower-income and Medicaid patients it serves and demonstrates that the best solutions for customers and patients may entail bringing together services that seem very disconnected today.


Thanks for taking time to read the Weekly Gist! We’re so grateful for your engagement and support. It’s incredibly gratifying to hear from so many of you each week, and to get your thoughts, feedback, and suggestions on where to focus our work. How fortunate we are to have this opportunity! If you’ve found this week’s edition worthwhile, may we suggest forwarding it to a friend or colleague, and encouraging them to subscribe as well?

Most of all, we’d love for you to let us know if there’s anything we can do to 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