The Elusive Digital Doctor: Interview with Dr. Bob Wachter

This post was originally published for the Health Policy$ense blog of the Leonard Davis Institute of Health Economics.

Along with being Interim Chair of the Department of Medicine at the University of California and ranked by Modern Healthcare as the most influential physician-executive in the U.S., Robert Wachter, MD, is the author of 250 articles and 6 books, the latest of which has become a New York Times Best Seller. Entitled The Digital Doctor: Hope, Hype and Harm at the Dawn of Medicine’s Computer Age, the book is being hailed across the country as the most compelling one yet written on its subject.

The Digital Doctor, which was the subject of Dr. Wachter’s recent talk at the University of Pennsylvania’s Leonard Davis Institute of Health Economics (LDI), explores a dramatic, real-world case in which a child received a 38-fold overdose of a common antibiotic. Wachter uses that example to illustrate some of the unforeseen consequences of health IT and how it is influencing all aspects of health care. We spoke with him about the accomplishments and unexpected consequences of health IT, the process of writing the book, and new ideas that might deserve more attention from health care leaders and policymakers.

Imran Cronk: How did your views on the pitfalls and promises of health IT change or evolve during the research, interviewing and writing process for this book?

Robert Wachter: My passion for writing this book was drawn from my own experience, which was terrifically disappointing. That came from a lot of angles: my own experience clinically, my   work in patient safety, and from seeing the way IT seamlessly fixed all the other problems in my life. I thought, “Health care is dysfunctional and clunky. I need to understand what has happened.” In the research, I came to believe that the dysfunction was almost predictable and even a natural outgrowth of the complexity of the problem, as well as the different and only partly integrated activities of diverse stakeholders.

As I got toward the end of the book, though, I had this epiphany. It dawned on me that this is all going to work out. You can feel like that with children if they’re screwing up. “Does today’s problem in first grade mean my kid’s going to be a heroin addict on the street?” [Laughs] Then you see these glimmers of “oh, that’s a success” and “that’s a success.” I can actually see how, as the kid matures, he’s eventually going to become a normal and valuable human being.

We’re definitely not there yet. Part of the goal of writing the book was to be honest and make clear why we’re not there and what the problems are – without sugarcoating them and getting stuck in the hype. It was like “OK, I get it, here’s what everybody needs to do. Here’s what the path looks like.” Then it really became a question of “How long is this going to take? Is that 30 years or is that 10? It’s certainly not two.” It became clear to me that to get to that place requires better choices and deeper understanding by a lot of different parties. I ended up in a much more optimistic place than I was when I started.

IC: What was the actual process of writing the book like?

RW: It was an interesting process. One of my trepidations when I decided to write it was that I’m not an informaticist. I know it to some extent as a clinician and administrator and in the work I do with patient safety, but my fear was that I would get into these very deep weeds and my lack of a deep understanding of the technical aspects of informatics were going to thwart my ability to understand and then tell the story.

It turned out to be a profound advantage, because I think you can get lost in the techno aspects. I came to understand that the fundamental problems here are not technical. Certainly, you need to work out the technical pieces, but these are fundamental business and organizational problems, as well as psychological, clinical, ethical, and financial. These are all areas I’m comfortable with, so in some ways it made me the perfect observer for all this.

I came in agnostic. What I was not agnostic about was my disappointment. It was clear [health IT] was not working out the way everybody had promised. Then the story sort of told itself. I sat down with my head just spinning with all of these insights from all of my interviews and my own thinking about it, and it kind of flowed in a way that was very exciting. It was an incredibly fun and, in some ways, magical experience. It all came together and little light bulbs went off, both in terms of my own understanding and in terms of making the writing work for the reader.

IC: How did you conduct the research and interviews for the book?

RW: I interviewed about 100 people and I was careful to be as broad as I could, to get people from a lot of different perspectives. Themes just emerge — you have a list of questions, but the interview just takes you where it takes you. There’s a richness that comes from not feeling like you have to get the answer tomorrow, but that the answer will emerge organically. You start with a big block of clay and you’re chipping away at it, and eventually you’ll have a statue. That’s the way it felt. The interviews are so much fun, if you like to learn and you’re open to it. At some point you have to stop and say “I have to write” which is hard.

I was on sabbatical. It took about a year — the first four months was in San Francisco while doing my day job, so it was really busy and hard to find the time to get things moving and start the interviews. I was in Boston for six months, which was not only to be on sabbatical and be in an incredibly rich environment with a lot of smart people around, but also to be stationed on the east coast. I came down to Philly and Washington and made some trips to various places — Epic headquarters, IBM headquarters, and spent a couple of days driving across the country with a primary care doctor to Dubuque, Iowa.

Being in Boston in particular, there were so many smart people around. Having a day where I would interview John Halamka first thing, Ashish Jha in the late morning, and Atul Gawande in the afternoon, and MIT artificial intelligence experts, and so on. There are a lot of smart people thinking about this from a lot of different angles around there. That was a tremendous luxury.

IC: How did it feel to complete the book?

RW: I remember the day at the end of October where I kind of set down my pen and my word processor, and turned to my wife who was helping me edit it, and I said, “Honey, I think it’s done.” I’m now thinking about this topic for a year since then, and I have read through it in various ways over the year. I don’t think I’d change a word. It really felt like, at the end, it was the place I’d wanted to be and said what I’d wanted to say. That was a very good feeling. It would have been quite crummy to feel like I rushed it.

IC: Health IT is changing so rapidly. What developments in the months since The Digital Doctor was published give you concern and/or reason for optimism?

RW: One reason for optimism is that the pressure for interoperability has grown substantially. Interoperability is really not a technical problem — it’s a political problem. If you are a vendor or a purchaser of IT, and even from the standpoint of most hospitals and health systems, you’ll say that you want to connect to everybody, it’s God’s work, and it’s the right thing to do.

But that’s not what determines whether you’ll do it. It’s hard work, it’s politically challenging work. The economics of it are not obviously beneficial to either party. So you’re only doing it if you’re made to. It could be that the legal or regulatory environment changes, or the business environment changes so that there’s an economic advantage to doing it, or you’re shamed into doing it — there are all sorts of mechanisms to get organizations and people to do stuff they don’t naturally want to do. Pressures for interoperability were growing when I wrote the book, but things have escalated markedly. That’s very good. I think it’s a crucial next stage to figure out how to get all these machines to talk to each other, and I think that will happen within the next several years, in part because important players like Congress, like journalists, even to some extent health systems, have determined that it’s got to be so and it’s time to make it happen. That’s a positive trend.

One trend that was emerging when I wrote the book was the entry of Silicon Valley into the world of health IT. It was conspicuously absent for a long time, since it made more sense to build the next Snapchat than to build the next health IT app. One of the unanticipated virtues of HITECH — $30 billion to try and make EHRs ubiquitous — was that it legitimized health care as a digital market for Silicon Valley and software companies. So we are beginning to see some cool things coming out of digital innovation shops, and the combination of the pressure on interoperability — which is linked to the pressure to create open platforms and abilities for third party IT tools to link into existing EHRs — those twin pressures create the opportunity for hugely exciting and truly disruptive innovations. Everybody talks about “this thing is Uber for health care” and “this thing is Airbnb for health care” — who knows? But none of that can happen until the innovator community gets excited, students in business schools get excited, computer science majors get excited and see health care as a viable market where you can make a profit and, by the way, do some good. That’s clearly what we want to have happen. That was only partly true when I was writing it, and it’s become more true recently.

I think the privacy and security breaches have become greater, not only in health IT but also in other fields. That’s the scary part of this — in some ways, it’s the dark side of something great. We’re going to have all these systems linked together, and you’ll be able to see patients’ records anywhere, and have big data with patient records, not just in your one building but in very large health care systems. That’s all very exciting, but if you’re a hacker in China or North Korea, it’s also exciting for you. We have not figured that one out, so that’s the scary part of the good part of having data aggregated. Those are the trends I spoke about in the book, but if anything they have grown since then.

IC: Along those lines, what developments or ideas haven’t we seen yet that you think should be a larger part of the health IT conversation?

RW: The health technology conversation can’t just be about technology. I’ll read where people will talk about, “We have this new sensor or monitors that tracks a patient’s heart rate every minute, and it’ll send it to their primary care doctor who will use it to manage his or her patients more effectively.” It’s like, what planet is that? It’s not one I’m familiar with. These sort of silly conversations about data being good for data’s sake and how wonderful it’s going to be if this happens or that happens, without even the slightest clue about the health care ecosystem. Really, patients and families are going to be able to use that to manage themselves this way? Really, a primary care doctor’s going to be getting data feeds on 2,000 patients and do something useful with that? How’s that going to work?

I think we’re beginning to get more sophisticated and mature conversations about the role of technology as an enabler. The purpose here is not, “Does technology do something spiffy?” but how does it actually work to improve health and health care? That’s inevitably going to take new business models, new staffing models, new specialties and workforce evolution. That’s what we got so wrong in the beginning. We just had this idea that you just produce a piece of technology, stick it out there, and it’s all good. There are a thousand examples of how crazy that is.

I think the alerts were the most interesting and scary example of that — “Wow, how great is it going to be in a computerized environment, when the doctor is about to do something wrong, or there is some information that the doctor should have, we’ll fire an alert!” Well, that sounds great. And then you say, “Oh, the doctors are getting millions of alerts. They’re normal human beings. They will ignore them just to get their work done.” Nobody really talked about that, but of course three minutes into using these tools you say, “Why didn’t we think about that?”

We have a set of complex problems to solve, and the solutions may be new technologies, but until you ask the question of “How is this actually working in real life with real people?” you will never get to the answer. I think that’s where we have to go.

How Telemedicine Will Revolutionize Healthcare

This article was originally written for and published by Healthcare Demystified, the healthcare policy and innovation blog of Healthcare.com, where I am a weekly columnist.

Recall, for a moment, your last trip to the doctor’s office or hospital. How long did it take you to get there? How long did you have to wait before being seen? How long did you delay that visit, which may have been important but not that important, because you had trouble finding two or three hours in your busy schedule? You are not alone – that is the reality most of us experience when interacting with the healthcare system.

Telemedicine, where patients are able to telephone or video conference with their doctor or nurse practitioner, eliminates the logistics of traveling across town, waiting in a room of potentially sick people, and waiting again in a small room, all just to have a conversation that often results in a prescription or specialist referral that extends the chain of logistical headaches. What if that process could be simplified to a matter of a few clicks and no waiting?

Telemedicine takes many different forms. Some doctor’s offices and hospitals have been quick to embrace the technology for common illnesses like the flu and strep throat, psychiatric mental health appointments, and even diagnosing a stroke. The potential advantage is clear: patients can get seen more quickly, and more cheaply, which could save money for insurers and increase the number of patients doctors are able to see.

These benefits have experts predicting a huge market for telemedicine in the future: a Dublin-based research firm calculated the global market at $17.8 billion in 2014 and another predicts that the market will expand to $34 billion by 2020. With such a big opportunity up for grabs, established healthcare organizations and new startups are jockeying for position.

Doctor On Demand is the poster child for the emerging wave of telemedicine startups. The San Francisco-based company has more than $50 million in funding, dozens of physicians including general medicine and psychiatry, and has signed 200 employer clients. Adam Jackson, CEO of Doctor on Demand, says that the technology benefits both patients and doctors.

“Our patients rave about the service because they get to video conference with a board-certified MD from their home or office without having to take off work and sit in a waiting room,” he said in an email. “Doctors also love it.  It’s the first viable ‘work from home’ option for primary care physicians. Our flexible shift model and payment structure allows doctors to work flexible schedules while earning the same or more than they would in an offline setting.”

Jackson continued, “Self-insured employers are also offering it for free to their employees, which helps drive adoption and save money.” Interest from businesses is likely to grow: last month, the National Business Group on Health (NBGH) reported that 74% of employers plan to offer telemedicine coverage to employees in 2016, a sharp increase from 48% in 2015.

The business case for employers, and health insurers, is convincing. Doctor on Demand charges $40 per visit with an adult or pediatric physician, about $100 for an hour with a psychiatrist, and $70 for almost an hour with a lactation consultant. That simple pricing compares favorably with the costs, in time and money, of an in-person visit: Doctor on Demand’s $40 care is a fraction of the average cost of a primary care, urgent care or emergency department visit – $100, $150 and $700 respectively. Doctor on Demand claims that it can replace 46% of primary care visits, 35% of urgent care visits, and 12% of ER visits for an average employer.

Telemedicine appeals to employers and policy makers for another reason besides incremental cost savings and convenience for urban and suburban patients: for rural patients, telemedicine changes everything about healthcare access. Health systems are building new satellite facilities, equipped with video conferencing technology and staffed by nurse practitioners who can provide basic tests, in out-of-the-way rural communities. Now patients do not have to travel for hours to the nearest office or hospital for routine care.

This talk of cost savings and access brings up another question: who should pay for these visits? At the moment, reimbursement for telemedicine visits is uneven across the nation. Some private insurers cover telemedicine, but others do not. Medicare, the giant insurance program for older Americans, covers the visits for patients who live in “Health Professional Shortage Areas” but patients must attend the virtual appointments from medical facilities, not from their homes.

There are risks with telemedicine, though. Before, the only real option for patients was to visit the doctor or hospital “just in case” the symptoms were serious. Soon, patients might turn to on-demand video conferencing first. For patients with a heart attack or a serious infection disguised as something minor, those minutes or hours of lost time can be dangerous. There is also the risk that diagnoses will be inaccurate or incomplete if doctors cannot conduct the routine tests that would be performed during an in-person visit. In a world of telemedicine, there will be a higher burden on the patient to recognize what is and is not serious.

Some startups entering the telemedicine space are focused on particular specialties, unlike the broader Doctor on Demand. 1DocWay, based in New York, partners with psychiatric hospitals, health systems and emergency departments to facilitate mental health consults and therapy. The co-founder of 1DocWay, Samir Malik, wrote in an email: “Our focus on psychiatry had enabled us to move quickly towards integration, as many primary care physicians and medical clinics have identified mental health as their top clinical need.”

While there is certainly a need and a growing demand for telemedicine capabilities, there are issues and challenges to address. Jeremy Kahn, a Professor of Critical Care Medicine at the University of Pittsburgh School of Medicine, wrote in the New England Journal of Medicine earlier this year that past studies of telemedicine have not looked at patient-centered outcomes and that “the legal and regulatory infrastructure for telemedicine has yet to catch up with the technology, which changes on a near-daily basis.”

Kahn recommends more research that tests patient-centered outcomes and determines which contexts are best suited for telemedicine. He also states that we must “integrate telemedicine into the existing care system in ways that do not detract from the interpersonal and interprofessional relationships that we all recognize as essential to effective, patient-centered care.”

Ultimately, Kahn hopes, we will have a healthcare system that is “not just different and more modern but also better.”

Let’s Bring “Quantified Health” to Populations That Need It

This article was originally written for and published by Healthcare Demystified, the healthcare policy and innovation blog of Healthcare.com, where I am a weekly columnist.

Wearable fitness trackers and their complementary smartphone apps are taking the world by storm. There is breathless media coverage and a growing army of gadgets ranging from glorified pedometers to glucose-monitoring contact lenses. While at least one in five Americans now has a wearable device and two thirds intend to use digital tools to track some aspect of their health, and the trend shows no sign of slowing with68.1 million wearable devices estimated to be produced in 2015, the actual health benefits of these tools have not materialized for everyone.

Along those lines, The Washington Post detailed the “revolution” in a lengthy feature earlier this year, and quoted Deborah Estrin, a professor of computer science and public health at Cornell: “Getting the data is much easier than making it useful. […] It’s unclear how important and meaningful it is for the everyday person.”

Part of those underwhelming results might be due to human nature rather than because of the devices themselves. In early July, Megan Garber wrote in The Atlantic about the Ennui of the Fitbit: research indicates that a third of trackers are abandoned within six months and that more than half of people who purchase trackers will ultimately abandon them. With the case of Fitbit, which commands more than three-quarters of the market for wearable health technology in terms of revenue, just 10 million of the company’s 20 million registered users are still active.

People stick to habits and use devices that add some kind of value to their lives. For a young and relatively healthy person, Fitbits and similar gadgets might be alluring and nice to have, but can quickly lose their luster. For a few people, having an up-to-the-minute accounting of steps taken, calories consumed, weight recorded, and hours slept would inspire positive behavior change. For most others, it might become annoying and perhaps create more stress.

Mobile technology has long become mainstream, and people from all walks of life are on board, but the tech industry appears to be designing wearable health gadgets almost exclusively for the folks described as “young invincibles” or “worried well.” As such, the actual health-improving mechanism is sometimes given less attention than the development of attractive user interfaces and slick marketing campaigns.

How might we move past seeing these devices as mere entertainment value or social capital and increase adoption among people who are elderly, low-resource or have poor health status – and especially for those who check all three boxes? Making cool and informative devices that people enjoy using is undoubtedly a good thing, and such business should continue to thrive as long as the free market rewards these products, but we are not taking advantage of a major opportunity to invest in bringing wearable devices and other personal health technology to the populations that are often not included in the “target market” section of startup pitch decks. These inspired startups and their investors could make a real impact with populations that have the most “health to gain.”

How could these current leaders of innovation in healthcare spread their services to populations that are more in need of support? Rachel Davis, a senior program officer at the Center for Health Care Strategies (CHCS), explored the idea in a Health Affairs post in 2014. She cited research that found high adoption of smartphones among people making less than $30,000 per year, and CHCS focus groups suggested that lower-income populations would be receptive to increased use of digital health technology to track and manage chronic conditions.

Davis identified five principles issues that impact healthcare access for these populations: lack of consistent contact with health providers and technology, fragmented health care across settings, difficulty managing complex medication regimens, managing health needs reactively instead of proactively, and difficulty accessing transportation to and from appointments.

The exploding world of digital health startups is showing an interest in solving these problems of low-income, complex patients. The Robert Wood Johnson Foundation (RWJF) granted $500,000 to accelerator StartupHealth, which has more than 100 startup companies in its portfolio, to “make it easier for digital health entrepreneurs to develop […] products and services to meet the unique needs of [underserved] communities.”

One startup called Health ELT is building its entire value proposition on bringing “engagement, logistics and technology services” to Medicaid populations. The organization’s pilot study last year in Texas, involving 1,000 patients covered under a Medicaid managed care organization, nearly doubled engagement rates, cut emergency department admissions in half, and reduced hospital admissions by more than 35 percent. “Technology is transformative and critical to progress,” said Amanda Havard, Chief Innovations Officer at Health ELT, in an email. “We can’t keep affording that progress only to healthy and resourced populations.”

Havard has some advice for entrepreneurs who are new to healthcare and want to make an impact on elderly or low-resource populations: “Get to know the population. Get to know the system. Learn the obnoxious routes of red tape. Log time with people who know infinitely more about the industry than you do. Too often technologists roll their eyes at that. They think if they build a good enough product, then it will do what it’s meant to. This is a fallacy if you want to innovate in regulated industries. You must be willing to spend the time, energy, money, and intellectual space to learn about the industry you want to change so that the change you make is a relevant one.”

Public-private partnerships could combine private-sector ingenuity with the public-sector reach into disadvantaged communities. For one, the new Center for Medicare and Medicaid Innovation (CMMI), which wields immense influence over the finance and delivery of healthcare services to the elderly, poor and disabled, could serve as a translational intermediary between the innovative companies and the communities where need is high but access to good-quality care is low.

Apple, which is now becoming a power player in the quantified and mobile health space with its new Health app, has demonstrated a commitment to using its resources and broad user base for meaningful ends with ResearchKit, a software platform that allows medical research subjects to submit data that is collected by their iPhones. The program launched several months ago, and since then more than 75,000 subjects have enrolled in mobile health studies related to asthma, Parkinson’s Disease, diabetes, breast cancer, and heart disease. In some cases, a smartphone enables a level of precision and convenience that patient testing within a facility cannot offer. Consider one diagnostic used in the Parkinson’s Study and described by the lead researcher, Dr. Ray Dorsey, of the University of Rochester Medical Center: “One test […] measures the speed at which participants tap their fingers in a particular sequence on the iPhone’s touchscreen. [That’s] more objective than a process still used in clinics, where doctors watch patients tap their fingers and assign them a numerical score.”

The ResearchKit concept is powerful because it enables patients to contribute to medical research in a more convenient way. The barriers to participation in research studies – inability to take time off work or travel long distances – are significantly diminished. For lower-income and sicker people, who experience these barriers most often, such technology could facilitate more representation in important medical research studies.

Healthcare technology, and the mobile and wearable health space in particular, is receiving an enormous amount of attention and funding. The excitement is warranted – our ability to collect and analyze data is advancing alongside our understanding of biomedical diseases, treatments, and the social and economic factors that influence them. While the free market should reward those who invent the next cool thing, we also should not discount the potential of this technology to make a different in places where it is needed most.

More People Think They Are Covered by Health Insurance – But Is It Good Enough?

This article was originally written for and published by by Healthcare Demystified, the healthcare policy and innovation blog of Healthcare.com, where I am a weekly columnist.

Since 2008, the government’s healthcare focus has been to help uninsured people find coverage. However, a new problem has emerged with devastating consequences for everyday Americans. More than 30 million people in this country are underinsured, meaning that their out-of-pocket costs exceed 10 percent of their income. That means that almost one quarter of the non-elderly, insured population is in a situation where their medical bills are a financial burden – the kind of burden that insurance is supposed to take care of in the first place.

Although the level of underinsurance has risen since 2003, the Affordable Care Act (ACA)’s broad efforts to reduce uninsurance might actually make this underinsurance problem worse: the new plans sold on the marketplaces often have lower up-front premiums in exchange for higher deductibles (out-of-pocket costs) when patients seek care. The lower the metal level of the plan (i.e. gold, silver, bronze) the higher the deductible. Patients who select silver and bronze plans in order to have affordable premiums are often unable to afford the higher deductibles that come up down the road. Most of the time, patients do not realize that they are making this trade-off until the medical bills arrive after an expensive hospital stay or specialist visit.

People are more or less likely to be underinsured based on the kind of insurance plan they have. It would be natural to think that most underinsured people have Medicare or Medicaid plans, but a survey from The Commonwealth Fund found that 59 percent of people who are underinsured have employer-sponsored coverage. Put a different way, a full 20 percent of people who have insurance through their jobs are underinsured. This fact goes against the conventional wisdom that people who have insurance through their employer have adequate coverage.

The level of underinsurance among people who have employer-sponsored insurance has doubled since 2003, but those who purchase individual insurance coverage have become even worse off. Individual plans in the past were all purchased directly from an insurance company or broker, but now the plans are often found and purchased through an marketplace under the ACA. This group has seen its rate of underinsurance more than double since 2003, from 17 percent in 2003 up to 37 percent in 2014. While this group is small, the need for more adequate coverage is great.

What are the consequences of lower quality coverage? Recently a Gallup poll showed that one in three people has “delayed medical treatment for themselves or a family member due to concerns about cost” – a level not seen in 14 years. The Commonwealth Fund has found that, among these 30 million underinsured people, 26 percent skipped a test or treatment and 24 percent did not fill a prescription due to the cost. Making matters worse, people are going into medical debt: half of underinsured beneficiaries report debt of $4,000 or more.

The health and economic costs of underinsurance are even greater among those with chronic conditions. The Commonwealth Fund report found a 30 percent rate of underinsurance among people with chronic conditions – compared with just a 16 percent rate of underinsurance among healthier people. 24 percent of these underinsured, chronically ill patients report avoiding to fill or take a prescription medication – compared to just 7 percent of well-insured adults who also had chronic illnesses. These gaps between underinsured and well-insured people are significant and have persisted, even widened, over the last decade.

It is important to keep in mind that we have been talking about individuals with year-round insurance. The problems related to financial access and the cost of care are magnified for those who are uninsured. And while the number of uninsured is dropping under the Affordable Care Act, the newly insured people are not guaranteed full protection.

Consider the story of Karen, a 55-year-old single woman with two grown children. She lost her job at an advertising firm during the recession and had been uninsured for five years – until the second window of open enrollment in the fall of 2014. She has been earning enough income through freelance work that she does not qualify for Medicaid, but she is close enough to the federal poverty level to receive a subsidy to purchase coverage on her state’s new insurance marketplace. Priding herself on her deal-finding skills, she chooses a plan with a low monthly premium that still seems to provide decent coverage.

Three months after signing up for coverage, Karen visits her primary care physician and learns that she need to switch from the current diabetes medication she is taking to a more powerful, more expensive version to manage her blood glucose level. Undeterred by the extra expense because of her new insurance, she visits the pharmacy to pick up the prescription. She discovers that her plan only covers half of the cost and that, because of her deductible, she will have to pay more than one hundred dollars per month. Now she has a difficult choice between starting the new prescription – and therefore not being able to take as many trips across the country to visit her grown children – or sticking with her current, less effective medication.

While Karen’s story is made up, it is illustrative of the small but significant economic, social and health impact that underinsurance can have on the lives of everyday people.

The issue is starting to attract more attention, especially from Democrats, heading into the 2016 presidential election season. Rep. Jim McDermott (D-Wash) said: “We’ve got some 17 million more people covered … but they can’t access the care they seem to be entitled to. It costs too much to use the care. That’s the deceptive part about it.”

Along the same lines, the New York Times’ Aaron E. Carroll wrote: “In the quest for universal coverage, it’s important that we not lose sight of ‘coverage’ in order to achieve ‘universal.’ The point of improving access is, after all, to make sure that people can get, and afford, care when they need it.”

The consequences of underinsurance have made it more important to ensure that all consumers understand their insurance plans, from knowing the difference between monthly premiums and out-of-pocket deductibles to knowing their options when faced with a large medical bill. State and federal marketplaces, as well as insurance companies, can and should put more effort into helping people select the right plan for their health needs and financial resources. That is a goal that will benefit all stakeholders – providers, payers and patients – in our healthcare system.

How Patients, Families and Clinicians are Changing End-of-Life Conversations

This article was originally written for and published by Healthcare Demystified, the healthcare policy and innovation blog of Healthcare.com, where I am a weekly columnist.

Imagine this scenario: an elderly woman, Mrs. Jones, is rushed from the nursing home to the hospital one evening. Although she has been in and out of the hospital four times in the past year, this situation is more serious. She has chronic congestive heart failure and the physician believes that she will not survive long without a heroic intervention. If the procedure fails, though, Mrs. Jones could end up needing permanent life support in order to stay alive.

Her children are called in from across the region and are gathered at the hospital within two hours. The decision needs to be made quickly, but none of the children in the room – some of whom have not seen each other on a regular basis in 10 years – are quite sure of what their mother would want if she were conscious and not under a medical coma. Some advocate for doing whatever is necessary to extend her life, while others think she would want to “go with dignity” and receive hospice care in her final hours.

These conversations are happening in emergency rooms across the nation. Many times, families will go through this experience several times with an aging loved one. Decisions around care at the end of life have never been simple, but in recent decades they have taken on new importance as we have devised new methods to prolong life. These methods bring high cost and sometimes diminish quality of life in return.

Consider this stunning fact: one in three Americans has been forced to make a decision about whether to keep a loved one alive using extraordinary means. These measures are seldom in accordance with patient values or preferences – most patients want to die in their homes, but most end up dying in the hospital – and the medical world is asking itself tough questions: who decides what happens in these life-and-death matters, and how should the complicated web of decisions be navigated?

Even more important, though, is to have conversations with family members and doctors to get on the same page before a crisis emerges. According to the Conversation Project, a non-profit wants to encourage and facilitate end-of-life dialogue, 90 percent of people acknowledge the importance of having end-of-life conversations but only 27 percent do so.

I spoke with Ellen Goodman, who is the co-founder of the Conversation Project and a former Pulitzer Prize-winning, nationally-syndicated columnist for the Boston Globe.

“Death no longer comes in a way we used to think of as natural,” she says. “Instead, it comes with a cascading number of choices and decisions. We believe that the first step is to have these conversations with the people you love at the kitchen table.”

Goodman and her team put together a “Conversation Starter Kit” that guides patients and their families through these difficult discussions. The guide asks general questions – “What matters to me at the end of life is…” – and becomes more specific about the patient’s preferred place of care (hospital or home), desired length of life-sustaining care, and more. Over 200,000 people across all 50 states and in 176 countries have downloaded the starter kit.

While these conversations are vital to have with loved ones, Goodman sees a disconnect between patients’ convictions and the healthcare delivery system. She hopes that the starter kit could be used during wellness visits. “Doctors, at this point, have no training in these conversations and are universally uncomfortable with them. It’s important that doctors get paid for talking and not just for procedures. If you’re paying doctors to do these 900 different things, procedure after procedure, who talks about when enough is enough? It’s only right to encourage doctors to know how their patients feel: when they want extreme measures and when they want to limit them.”

There are options for families who want to have these proactive discussions and help elderly family members receive care that is consistent with their values. The most common method is through an advance directive, also known as a living will.

The living will is a legal document that spells out how a person wants to be treated if he or she is unable to make decisions for him or herself – for example, while in a coma, on life support, or with brain damage. However, family members and caregivers might make decisions in the hospital without adhering to a living will, if one even exists, due to miscommunication or because the patient’s wishes for the situation at hand were not detailed in the living will.

Ellen Goodman emphasizes the importance of a “health care proxy”, which is someone who is empowered to make appropriate decisions on behalf of a relative or close friend. “There’s no checklist on Earth that can cover every medical possibility for someone who is facing serious illness. There just isn’t. So we have to find somebody who understands what matters to us and understands our values, and the conditions under which we want extreme measures and the conditions under which we don’t,” says Goodman.

Surveys indicate that many people, especially those who are not yet old, have not created living wills. In 2014, a representative survey with nearly 8,000 respondents indicated that just over a quarter (26.3 percent) of Americans have prepared such documents. Despite these low levels of planning among young people, three quarters of older Americans have made advance directives. The number has grown considerablysince 2000, when less than half had done so. However, that still leaves a significant minority who have not formally expressed their wishes.

The movement to make these conversations more normalized and accessible for patients was hampered in 2009 by the “death panels” label that was applied to a proposal to fund end-of-life conversations between Medicare patients and their physicians. However, some new efforts are emerging: the Centers for Medicare and Medicaid Services (CMS) has proposed a plan to fund unlimited end-of-life care conversations for patients and their caregivers – not just physicians, but nurse practitioners and assistants as well. The agency expects to release final rules for the benefit in November.

CMS’ chief medical officer, Dr. Patrick Conway, said that end-of-life conversations are “an important part of patient- and family-centered care” and said that the program would not just fund one conversation, but as many as necessary to help patients and their providers work through such a sensitive topic of discussion.

The emphasis on improving the process to be more patient-friendly, provider-friendly and useful is important. Living wills have been around for almost 50 years, but the format and purpose of these documents has evolved as the general public and the healthcare industry become more familiar with them. Recent efforts have sought to help living wills wield more influence over actual care provided in the final stretches of life.

The answer, some say, has arrived in a form called POLST, which stands for Physician Orders for Life-Sustaining Treatment. The form covers the patient’s values, beliefs and care goals along with the physician’s diagnosis, prognosis and treatment options. Filling out the POLST form, which is a collaborative effort between a patient and physician, creates a medical order that becomes part of the patient’s personal health record.

The form is simple to understand and fill out (see California’s POLST form here), but it goes into enough detail to provide an authoritative guide for future care decisions. And critically, the form captures cultural and religious beliefs that are central to the way in which patients make decisions about life-and-death matters. However, POLST has a limitation: it is only for people who have already been diagnosed with a serious condition.

Even with all these new programs and approaches, there are some coordination gaps to resolve. “If you have an advance directive in one state and you get sick in another state, it may not be shared and known,” Ellen Goodman points out. “In fact, if you have an advance directive in one healthcare system and you get sick in another healthcare system, it may not be known. There have to be ways of having those directives available when the time comes.”

We must do more to align patients’ values and wishes with the treatment they end up receiving. That means making it easier for patients and their families have end-of-life conversations and to document the wishes in a medically useful format that follows the patient across care settings – and across time, as patients’ values can change as the end of life approaches. Anything short of that future state will add to the level of physical pain and emotional stress endured by patients and their families during the most vulnerable and sensitive moments of their lives.

“We need to realize that Americans face the healthcare system with two conflicting fears: one is that they won’t get the care they need and the other is that they’ll get care they don’t want,” says Goodman. “Let’s put the patient at the center of this conversation. By listening to that person, we will be able to have their wishes expressed and respected.”

Goodman is right. Through listening, understanding and encouragement, we can make the end-of-life care system work for everyone – patients, families and clinicians.

The Transportation Barrier: When You Don’t Have a Ride to the Doctor’s Office

This article is cross-posted from my article originally published in The Atlantic in August 2015.

Around midnight on a rainy Saturday two summers ago, a 60-year-old man wandered into the waiting area of the North Carolina hospital where I worked as an emergency-room volunteer. He had just been discharged, he told me, adding that his vision was messed up from medication. He had arrived in an ambulance several hours ago, but didn’t have money for a bus ride home. He lived with his disabled mother, who was unable to drive, and had no family close by.

I pointed him towards the admissions-and-discharge station to see if someone there could help him. He went over to explain his situation to the nurse in charge—but the hospital, she told him, could not pay for his bus or cab fare: “The system just cannot handle that expense for everyone,” she said.

The man grew visibly frustrated. After getting the same answer from a few more members of the hospital staff, he seemed to give up. He paced the waiting room, looking out the windows at the rainy night outside. It wasn’t obvious what condition had brought him to the hospital, but now he was off-balance and staggering. I watched him from my station across the waiting room, concerned that the hospital could do nothing to help him get home.

When my shift ended a few minutes later, the man was still standing near the window, seemingly without a plan. I approached him and asked whether the hospital had figured something out for him. He said they had not.

“Where do you live?” I asked.

He described an area that was about eight miles away, on the other side of town from the hospital but not far from my home.

“I might try to walk,” he said.

A vision-impaired, older man trying to walk eight miles, at night, in the rain—no part of it seemed like a good idea. “Do you want me to give you a ride home?” I asked. “My shift just ended.”

Around 20 minutes later, I pulled up in front of his home, and we shook hands and parted ways. It was lucky, I thought as I drove away, that I was in the right place at the right time. But how often do patients stranded at the hospital experience the same good fortune?

Past research on health care access has examined the ways in which distance can present a problem for people in rural areas, but poorer people in suburban and urban settings, even though they may live closer to a doctor or hospital, can still have trouble with transportation. Some households don’t have a vehicle, or share one among multiple family members. As Gillian White noted in The Atlantic in May, low-income neighborhoods are hit particularly hard by shoddy transportation infrastructure—subways may not service areas on the fringes of a city, buses may be unreliable, and both are vulnerable to strikes or service suspensions. And for those who are disabled, obese, or chronically ill, riding the bus or the subway can be a difficult undertaking.

As a result, some people may find themselves without a way home after an emergency trip to the hospital, or miss a doctor’s appointment simply because they don’t have a way to get there. In a 2001 survey of 413 adults living at or below 125 percent of the federal poverty level in Cleveland, Ohio, published in the journal Health & Social Care in the Community, researchers found that almost one-third of respondents reported that it was “hard” or “very hard” to find transportation to their health care providers—a problem that can mean more than a few missed checkups. A survey of 593 cancer patients in Texas, published in the journal Cancer Practice in 1997, found that in some cases, trouble with transportation led patients to forgo their cancer treatments. The problem was especially prevalent among minority survey respondents; 55 percent of African American and 60 percent of Hispanic survey respondents reported that transportation was a major barrier to treatment, compared to 38 percent of white respondents.

More recently, a 2012 survey of 698 low-income patients in a New York City suburb reported that patients who rode the bus to the doctor’s office were twice as likely to miss appointments as patients who drove cars. And in 2013, a review published in the Journal of Community Health found that around 25 percent of lower-income patients have missed or rescheduled their appointments due to lack of transportation. The patients who reported issues with transportation also missed filling prescriptions more than twice as often as patients without that same problem. “These consequences may lead to poorer management of chronic illness and thus poorer health outcomes,” the study authors wrote.

In some situations, patients without transportation access may wait for a medical emergency just to be able to see a doctor, explained Shreya Kangovi, a professor of medicine at the University of Pennsylvania. “Mr. Jones might have a disability that makes it difficult for him to use public transportation, so he has been waiting until he’s really sick, short of breath, and then calling an ambulance because there is no other good way to get care,” she said.

“If a patient can’t get to see their health-care team, then it’s a domino effect,” said Samina Syed, the lead author of the 2013 study and an endocrinologist in Madison, Wisconsin. “Missed appointments mean that they can’t address their questions and concerns, or update physicians on changes in their health history or life circumstances,” a situation that can be particularly worrisome for patients with diabetes and other chronic diseases that require ongoing active care.

Some health-care providers are trying to lessen the problem by employing community health workers (CHWs), people who help patients navigate the health care system. CHWs, who typically don’t have health-care backgrounds, will coordinate transportation for patients to and from appointments, motivate them to take their medications, and help them implement positive lifestyle habits. In 2014, there were an estimated 50,000 CHWs in the U.S.

A 2003 report on health disparities from the Institute of Medicine praised the CHW model, declaring that it “offer[s] promise … to increase racial and ethnic minorities’ access to health care” and improve their quality of care. Some research has supported this idea: One 2007 study found, for example, that CHWs can help patients better manage their hypertension, and a 2014 study found that patients who worked with CHWs scheduled more primary-care follow-up appointments than those who didn’t.

Some hospitals and physicians also use care coordinators: people who, unlike CHWs, are trained in a health-related field, most often social workers or nurses. These coordinators support groups of low-income or chronically ill patients, helping them to understand their care plans and schedule primary-care visits instead of making trips to the E.R.

Although a significant number of patients, especially those with few resources, struggle to find consistent and reliable transportation, there are some options for those who know how to find them. Each state has a “non-emergency medical transport” benefit for people with Medicaid, covering a certain number of rides per month, and some Medicare Advantage plans also cover a limited number of trips each year (eligibility for this benefit varies by state). Some states contract with local companies to provide rides; others enlist volunteers, or hire taxis. Some private insurers have followed suit, taking similar steps to make transportation more accessible for their clients, though this may involve co-pays or put policyholders through a lengthy bureaucratic process to prove their need for the benefit. In many cases, non-emergency rides must also be requested several days in advance.

In some cases, the restrictions surrounding these transportation programs can prevent patients from taking advantage of them. The patient I encountered in the ER at midnight, for example, did not have the luxury of planning his ride home in advance. No one who undergoes emergency hospitalization has the benefit of foresight for planning how they might leave. And patients who are receiving planned care at the doctor’s office or in an outpatient setting might not be aware of the resources available to them through their public or private insurance plan. Low-income patients—the same group most affected by transportation barriers—are also likelier to lack health literacy, making it harder for them to navigate the web of regulations required to get a ride.

“If you have health-literacy issues and if you don’t have good access to care to begin with, you’re not going to be able to fill out the application and get your provider to fill out their side of it,” Kangovi said. “Barriers like that, which seem small and detailed, end up being insurmountable barriers for patients.”

Often, doctors may not even realize that their patients have problems with transportation, Syed said, since patients can be embarrassed or otherwise hesitant to raise the issue. “There are things patients might not tell you, or that you don’t ask them, and so they just hear from the doctor that you shouldn’t miss your appointments, and they say, ‘Okay,’” she said. “But there is more to it that is beyond their control.”

“You can provide the best care in the world,” she added, “but it doesn’t matter if the patient has no way to get to it.”

© 2015 Cronk, as first published in The Atlantic

Bundled Payments Should Focus on the Most Complex Patients First

The healthcare payment landscape, which is more accurately described as a sobering wasteland of ineffective status quo arrangements and failed attempts at reform, has heralded a winner in the form of bundled payments. These are lump sums given to acute and post-acute providers to cover the costs of care across the continuum in one bucket, from which providers will share in savings that are supposed to derive from more effective and lower-cost care.

The Center for Medicare and Medicaid Innovation (CMMI) is working hard to spread the model across the nation, in accord with its stated goal to tie 90 percent of reimbursements to quality or value by 2018. Earlier this month, CMMI announced proposed rules that would require hospitals in 80 geographic areas to participate in 5-year bundled payment demonstrations for knee and hip replacements. These rules concern almost all hospitals – not just the hospitals that are already confident in their abilities to manage cost and quality under value-based arrangements.

Such a program has the potential to catalyze real change. CMMI, and its talented and ambitious people, should be commended for “walking the talk” and pushing the agenda forward on value, quality and incentives. Requiring broad hospital participation in a new model of care financing and delivery is never easy and rarely popular, but it is an effective means to an important end. That CMMI is willing to go out on such a limb for a new idea suggests that bundled payments are showing real promise.

Michael E. Porter, the Harvard Business School professor who developed the Five Forces framework back in the late 70s, has explored the concept of value in healthcare in books and papers over the past decade. Earlier this year, he and co-author Robert S. Kaplan explained in a working paper how bundled payments will transform healthcare financing and delivery. The lengthy, well-written treatise defines bundled payments and outlines a sensible playbook for implementation. One contention warrants further examination, however:

“Eventually, value-based bundles should be fully risk adjusted for the variations in outcomes and costs caused by co-morbidities, such as diabetes and cardiac conditions, and patient risk factors, such as age and obesity. At present, we often lack sufficient data and experience to do so, but limiting bundles to less complex patients and other practical steps can allow widespread introduction of bundles as risk adjustment improves.”

I have doubts that limiting bundles to less complex patients is the right way to improve quality and reduce costs of care in places where those results are most needed. Provider groups that are participating in bundled payment initiatives are focusing on high-volume procedures for which a high degree of coordination with post-acute providers already exists. An analysis from Thomas Tsai and colleagues at the Harvard School of Public Health found the following:

“Postacute care explains the largest variation in overall episode-based spending, signaling an opportunity to align incentives across providers. However, the focus on a few selected clinical conditions and the high degree of integration that already exists between enrolled hospitals and postacute care providers may limit the generalizability of bundled payment across the Medicare system.”

It seems that most of the bundled payment action involves providers who are already delivering highly-standardized, tightly-integrated care across the continuum for patients undergoing high-volume and high-cost procedures. While the CMMI proposed rules will rapidly expand bundled payments beyond these blue chip healthcare systems, the demonstration is still limited to 90-day episodes of care that start with a knee or hip replacement in an acute care setting.

Although it is good that providers are being rewarded for their efforts to create more effective processes and better outcomes for important procedures, one wonders to what degree the benefits of the bundled payment program will reach patients who have different healthcare needs, such as diabetes or heart failure, that cannot be measured in discrete episodes of care and might involve numerous providers beyond the primary, acute, and post-acute care continuum.

These chronically ill patients are major drivers of healthcare costs. Analysis of the 2009 Medical Expenditure Panel Survey indicates that the highest-spending one percent of patients accounts for almost a quarter of healthcare spending and that the five percent of highest-spending patients account for almost half of spending.

With such high concentration of health costs and consequences among few patients, should we not focus our efforts on the most complex and sick patients first if we want to make the greatest impact on overall cost and quality? I believe we should.

Setting the expectation for providers and payers that the highest-cost and most-complex patients are the right pilot population for bundled payments will compel more rapid adoption and use of care coordinators, community health workers, and other emerging approaches to patient support. The focus would be set on preventing health events and readmissions concerning the patient who has four chronic diseases, sees six different providers, takes eight medications and lacks access to convenient transportation.

Under the current bundled payment programs, providers are spending more energy ensuring that the cost of elective orthopedic procedures and post-acute rehabilitation doesn’t deviate too much from a target price. It’s a nice goal, but it does not address the larger challenge in healthcare.

This reasoning applies to healthcare provider incentive programs far beyond bundled payments including pay-for-performance. As Richard Fuller and Norbert Goldfield, researchers in 3M’s Clinical and Economic Research unit write: “Exclusion from incentive programs may remove [complex, high-needs] patient populations from the radar of cost-cutting administrators but will also ensure that attempts to improve their care will not be a top priority.”

Including the toughest patients first in bundled arrangement is not the path that will make most providers shimmer like stars, but sometimes the band aid has to be ripped off all at once to see who steps up to embrace complexity and lead real change.

In the second part of this post, I will present a modest proposal for a different kind of bundled payment – one that prioritizes and meets the needs of complex patients with chronic disease.

King v. Burwell: A Victory for the Affordable Care Act

This blog post was co-authored with Anina Oliver and Alyssa Kennedy for the “Wonk Tank” blog of the Wharton Public Policy Initiative (PPI) at the Wharton School of the University of Pennsylvania.
In late June, the Supreme Court made a 6-3 decision in the King v. Burwell case, which upheld health insurance subsidies provided to low- and middle-income people in the 34 states where the federal government operates the insurance exchanges under the Affordable Care Act (ACA).  As previously mentioned in The Health, Education, and Welfare branch’s review of the case in March, the case centered on whether the federal government had the authority to provide subsidies to help low-income Americans buy health insurance.  The plaintiffs argued that the law as written did not allow for subsidized insurance in the 34 states – representing 8 million enrollees – where the federal government had set up insurance exchanges.  Thus, they contended that the insurance subsidies were only allowed in states that have set up their own insurance exchange by pointing to the clause: “established by the state.”

WHAT WOULD HAPPEN IF THE GOVERNMENT STOPPED OFFERING SUBSIDIES?

RAND researchers found that eliminating tax credits in the 34 states would severely disrupt the overall individual health insurance market. Specifically, eliminating tax credits in all of those states would cause:

  • “Premiums in the individual market to rise 43%”

  • “Enrollment in the individual market to fall by 68%; 70% among adults ages 18–34”

  • “More than 11 million Americans to become uninsured”

[RAND’s findings]

They also found that by eliminating subsidies in federally facilitated insurance exchanges (FFM):

  • “Premiums in the individual market in FFM states would rise 47%”

  • “Enrollment in the individual market in FFM states would fall by 70%”

  • “About 8 million Americans would become uninsured”

[RAND’s findings]

Ultimately these subsidies, in the form of tax credits, allow many Americans to be able to afford health insurance so that the overall individual insurance market is secured from falling into a “death spiral.” Therefore, if these subsidies were eliminated not only would millions of people not be able to afford health insurance, but also the insurance market would have begun to fall into severe financial jeopardy. President Obama and Congress would then have had to scramble to find a quick solution to prevent such a catastrophe.

REVIEW OF THE COURT’S DECISION

In the Opinion of the Court, Chief Justice Roberts first discusses three core reforms of the ACA (insurance regulation in the form of guaranteed issue and community rating requirements, an individual mandate, and tax credits to individuals) and the critical importance that all three are being upheld to maintain the integrity of the Act. King et al. argue that the Act states that an individual may be eligible for a tax credit if he is enrolled in an insurance plan through “an Exchange established by the State”, meaning that subsidies should not be available to individuals who gain insurance through federally run exchanges. The Government rebuts that this phrase should be read to include federal exchanges.

Roberts continues that when judging an agency’s interpretation of a law, the Justices applied the two-step framework utilized in Chevron U.S.A., Inc. v. NRDC. First, they examine whether the statute is ambiguous; then, they determine if the agency’s interpretation of the statute is reasonable. But, Roberts quotes from FDA v. Brown & Williamson Tobacco Corp, “In extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.”And Roberts states that King v. Burwell is such a case. Tax credits are a core reform of the ACA, involve billions of dollars, and affect the price of health insurance for millions of people. He states that had Congress intended to delegate the role of determining whether or not users of federal exchanges can qualify for tax credit to an agency, they would have expressly named one. Thus, it follows that the Supreme Court must determine the true intent of the law.

Section 36B of the Internal Revenue Code concerns refundable credit for coverage under a qualified health plan. It allows an individual to receive tax credits to buy an insurance plan exclusively if the individuals enrolls in a plan through “an Exchange established by the State under [42 U.S.C. Section 18031].” Thus, he outlines that three things must be true: first, that the individual must enroll in an insurance plan through an exchange; second, that the exchange must be established by the State; and third, that exchange must be established under [42 U.S.C. Section 18031]. The controversy is surrounding the second requirement, which Roberts posits is not clear when read in the context of the overall Act. Roberts points out two examples in which the Act, if it indeed meant to refer only to an exchange established by the state as a state exchange and not including federal exchanges, would not make sense. Section 18032 defines those who are eligible for health plans through the exchange as “qualified individuals” who “reside in the State that established the Exchange.” If the wording were taken at face value, there would be no qualified individuals on the Federal Exchanges, though, Roberts states, “the Act clearly contemplates that there will be qualified individuals on every Exchange.” Additionally, the Act states that the health plans the exchanges offer should consider “the interests of qualified individuals … in the State or States in which such Exchange operates,” which would be similarly exclusionary of individuals using the federal exchange; Thus, Roberts concludes, “[t]hese provisions suggest that the Act may not always use the phrase ‘established by that State’ in its most natural sense. Thus, the meaning of that phrase may not be as clear as it appears when read out of context.”

Roberts also states that in Section 18041, which that allows the Secretary of Health and Human Services to create “such [an] Exchange” in a state if the state does not create one. This, he says, indicates that state and federal exchangers should be the same. But if only state exchanges benefitted from tax credits, they would be fundamentally different Roberts concludes the Opinion of the Court by asserting that Section 36B is not only ambiguous, and that when considered correctly in the context of the laws, intends that tax credits be able on federal exchanges as well.

Justice Scalia wrote the dissent; in a summary both of this case and the strong tone he uses throughout the dissent, he writes, “the Court’s interpretation clashes with a statutory definition, renders words inoperative in at least seven separate provisions of the Act, overlooks the contrast between provisions that say ‘Exchange’ and those that say ‘Exchange established by the State,’ gives the same phrase one meaning for purposes of tax credits but an entirely different meaning for other purposes, and (let us not forget) contradicts the ordinary meaning of the words Congress used.” Specifically, he disagrees with a number of key points of Roberts’ opinion.

Scalia asserts that federal exchanges established in states that do not form their own can operate without tax credits; unlike Roberts, who states that all three of the main reforms of the ACA must all be upheld in order to increase the number of insured individuals, Scalia posits that guaranteed issue and community rating requirements, and the individual mandate are sufficient. Continuing his spirited criticism of the Opinion of the Court, he states that the phrase “Exchange established by the State” appears seven times of the Act that mentions tax credits, and that it is unlikely that Congress would have mistakenly left out any reference to federal exchange each of the those many times. He states that the Court should have only interpreted the law as written by Congress as opposed to “interpreting” it, and memorably asserts that the Court has effectively rewritten the law to “uphold and assist its favorite” to the extent that it should instead be called “SCOTUScare”. 

THE FUTURE OF HEALTHCARE REFORM 

The King decision affirmed that the ACA is and will continue to be key legislation responsible for advancing and improving the U.S. healthcare system. It even solidified the notion that, as President Obama said, “The Affordable Care Act is here to stay.” Yet, as the U.S. continues forward with the ACA, it is important to realize that the Act is not infallible and there are still important areas of the law and its implementation that need to be changed and revised.

Observers noted that several of the 14 states that established their own exchanges might decide to switch over to the federal exchange. These pioneer states that embraced the law, and its core concept of the transparent insurance exchange, will soon face difficulties in maintaining their exchange websites due to technological complexity and dried up federal and state funding. Now that the potential risk of losing tax credit subsidies for purchasing coverage through the Healthcare.gov exchange has been averted, it might not be as difficult for states like Vermont and Hawaii to make the change from a state-based exchange to a federal one – in essence, outsourcing. Margot Sanger-Katz wrote in the New York Times last month that, “If the court had ruled for the health law’s challengers, we would have seen more states adopting the state-based model to preserve subsidies for their residents. Now that the government has won, movement is likely to be in the other direction.” However, it remains an open question whether switching from a specialized state exchange to a more generic federal one will be so simple.

The ruling has also brought to the fore another decision facing some states: whether or not to expand Medicaid eligibility using federal funding. 19 states, most of which are under Republican leadership, have not moved forwardwith expansion. However, the tide is starting to turn as the ACA gains strength in measurements of both judicial and public opinion. Last month President Obama traveled to Tennessee, a state where, like in many others, hospitals and insurers want Medicaid expansion while the conservative-leaning state legislature and governor are against expansion. The reasons for opposition are a combination of blanket political resistance to the ACA, concerns over long-term budget sustainability, and concerns of diminished state-based autonomy regarding how to provide healthcare for low-income populations.

Even patients who have private insurance will begin to feel the pinch: most insurance companies are requesting double-digit increases in 2016 for individual plans, including those purchased through exchanges, due to higher-than-estimated claims from enrollees under the Affordable Care Act. While supporters of the law applaud the fact that people are making use of their new access to long-needed care, insurance companies will have to make upward premium adjustments that affect all beneficiaries. These premium increases will not help the President’s case as he strives to secure the healthcare cost-reduction legacy of the Affordable Care Act.

These issues with the ACA are important to address as the U.S. continues implementing provisions of the Act and working on reforming our healthcare system for the future. And despite the ACA’s success and future changes, it will continue to face legal challenges and calls for repeal by many of its challengers; it will also continue to be a much discussed and debated piece of legislation in the upcoming 2016 presidential race.

Major Reforms Proposed for Medicaid Program: How Are Patients Impacted?

This blog post was co-authored with Taja Towne for the “Wonk Tank” blog of the Wharton Public Policy Initiative (PPI) at the Wharton School of the University of Pennsylvania.

Last month, the Centers for Medicare and Medicaid Services (CMS) issued long-awaited proposed rules for Medicaid managed care organizations – private insurance companies that receive a set amount to money from state agencies to care for entire Medicaid populations. The proposed rules, which govern a program that has expanded significantly over the past decade to include about 46 million beneficiaries and 73 percent of the total Medicaid population, have not been updated since 2003. The 39 states that contract with managed care plans for their Medicaid populations are expected to resist the new rules, which some observers say will reduce autonomy on the part of states to determine how to run their Medicaid programs.

The more than 600-page document, currently open for public comment on the federal register, proposes the following rules, among others:

  • Sets a required medical loss ratio (MLR) for plans at 85 percent. MLR is the percentage of a health plan’s revenue that is spent on actual medical care instead of administrative expenses and profits;

  • Requires plans to be transparent about which health providers and services are covered, ensuring that consumers understand their “network adequacy” and have options within a certain distance from their zip code before enrolling;

  • Requires states to provide more accurate figures regarding payments to health plans to ensure that plans are not being overpaid or underpaid in capitated (per-patient budget instead of traditional fee-for-service) arrangements;

  • Allows Medicaid beneficiaries in managed long-term care to switch to fee-for-service plans without extra expense if their long-term care provider is out-of-network.

The motivation for these changes, according to CMS administrator Andy Slavitt, is to bring Medicaid managed care plans in line with reforms that have been implemented, and proven tenable, across other parts of the health insurance industry. CMS found that while medical loss ratios of Medicaid managed care plans are on average higher than the 85 percent minimum, one in four were below 83 percent and one in 10 were below 79 percent.

Medicaid managed care, which primarily includes seniors and persons with disabilities who tend to require more long-term treatment and care, is a costly system. Enrollment in managed care has increased dramatically over the last few years and the non-partisan Congressional Budget Office (CBO) estimates that Medicaid’s yearly spending which is currently at $60 billion,will exceed $100 billion a year by 2023.

While seniors and those with disabilities are the populations that will be most impacted by these proposed rules, other patients with Medicaid will benefit as well. Currently, Medicaid programs have time/distance rules where primary care providers must be available to those enrolled within a certain time or distance. The proposed Medicaid rules would seek to expand this requirement to OB/GYN, behavioral health and dental care. This would mean that Medicaid members would have greater access to services that might have been out of reach before.

These proposed rules seek to provide more uniformity in regulations across states and increase accountability. Nationwide it was found that nearly 40% of Medicaid/Medicare certified nursing homes only receive a 1 or 2 star rating out of 5 on the CMS scale. Advocates of these changes believe that best practices should not vary from state to state. CMS’ Slavitt said in a statement, “this proposal will better align regulations and best practices to other health insurance programs, including the private market and Medicare Advantage plans, to strengthen federal and state efforts at providing quality, coordinated care to millions of Americans with Medicaid or CHIP insurance coverage.”

Not surprisingly, the proposed regulations are being met with strong resistance from Medicaid managed care organizations. Jeff Myers, President and CEO of the Medicaid Health Plans of America (MHPA), says that the rules diminish state decision-making and autonomy. “States, because of the nature of providing care for their individual citizens, may choose to have some things included in the MLR and some things not included. The way in which you manage case management or other ancillary services varies state to state.”

Those different methods, as Myers and his counterpart at America’s Health Insurance Plans (AHIP) have stated, include administrative expenses that provide personal care management services to keep patients healthy and avoid expensive hospital visits. If plans are compelled to keep non-medical expenses under 15 percent of revenue, it could compromise these services in addition to the targeted overhead expenses and profit.

“An arbitrary cap on health plans’ administrative costs could undermine many of the critical services – beyond medical care – that make a difference in improving health outcomes for beneficiaries, such as transportation to and from appointments, social services, and more,” said Dan Durham, the interim CEO of AHIP.

Recent analysis from commentators has indicated that the new rules should not be a significant challenge for insurers. Joseph Marinucci, a credit analyst at Standard & Poor’s, told Modern Healthcare that “it’s not much of a stretch” because most plans already reach an 85% MLR. From Josh Raskin, a senior analyst at Barclays Capital: “With respect to these regulations, we believe that the passage and lack of any material negative surprises should serve as a clearing event for the space.”

With these proposed rules, CMS is attempting to bring the Medicaid managed care industry into line with existing rules across the industry. While the impacted stakeholders are pushing back, observers do not think the rules will dramatically alter the Medicaid managed care landscape from a business standpoint.

It will be critical, however, to watch how the proposed rules evolve into a final rule based on comments submitted in the next two months. Josh Gorman, founder of a health consulting firm, told Bloomberg that “this is literally the biggest healthcare regulation in a dozen years.”

And while the battle over details is fought mostly between federal regulators and the industry, the growing number of Medicaid beneficiaries who rely on managed care coverage ought to be represented in the process as well.

Improving Diabetes Care in the United States (My Senior Thesis)

In 2009 it was reported that the United States led all OECD countries with its high rates of lower-limb amputations and acute hospitalizations related to diabetes. 2011 data show that we exceed the OECD average, age-standardized diabetes prevalence by nearly 40 percent and have the sixth highest prevalence in the 31-member group. The CDC reports that one in every three U.S. adults might have Type 1 or Type 2 diabetes by 2050. Although there are signs of encouraging progress, more should be done to improve financial and material access to care — and the process, quality and outcomes of that care — for patients who have diabetes or are at risk of developing the condition in the future.

Last summer, supported by a generous grant from Penn’s Center for Undergraduate Research and Fellowships (CURF), I toured Australia for three weeks to learn about its approach to diabetes care. Through in-depth conversations — with general practitioners, endocrinologists, nurses, diabetes educators, public health officials, hospital administrators, and policy researchers — I learned about programs and structures that might be adapted and implemented into the United States’ healthcare system, despite the surface concerns of demographic and cultural differences.

Here is a rundown of the major programs that support Australians with diabetes: the National Diabetes Services Scheme (NDSS) provides informational support and subsidized equipment for self-managed glucose testing and insulin therapy; the Pharmaceutical Benefits Scheme (PBS) provides subsidized diabetes medications with low co-payments; the Medicare Benefits Schedule (MBS), which covers Australians of all ages, provides five visits each year to allied healthcare professionals such as dieticians and diabetes educators; the Practice Incentives Program (PIP) provides general practitioners with bonuses for completing annual cycles of diabetes care for their patients.

I believe that this suite of services, to which all Australians with diabetes have access, can be provided at a subsidized or free price to all Americans with diabetes. Access to high-quality information and support groups, self-management equipment, medications, the advice of diabetes educators and podiatrists, and physician incentives to complete evidence-based care processes: these aligned systems, working for all patients with diabetes, might have a significant impact on patient health and reduce the nation’s healthcare cost burden.

This program would at least be an improvement on our current state: low-income and under-insured patients unable to afford medications and self-management equipment; complex rules that discourage access to useful allied health support services; and patients who are unable to manage their conditions until devastating complications land them in the hospital.

Over the next seven months I will research and write a senior thesis that examines the costs, obstacles and implementation strategies for this potential program. Although I am primarily looking at the potential program’s economic and health impact, I will incorporate knowledge about the role of behavior and environment on chronic disease, as well as the different experiences of patients with diabetes across cultural groups.

Even if the proposed program turns out to be too expensive and the potential health impact unclear, I think that this inquiry will be a useful learning experience and look forward to starting the journey. Feel free to reach out with comments and suggestions!