Latest Blog Posts & Articles

Paying for “Patient Satisfaction” Harms Hospitals That Care for Poor People

Paying for Patient SatisfactionAll else equal, it would be wonderful if hospitals had an incentive to provide high quality care. It does not seem fair to pay the same amount of money to a hospital that does a great job of caring for its pneumonia patients and one that does a lousy job. For the most part, however, third party payers like insurance companies and Medicare pay hospitals for the volume of services they provide, or volume of patients they treat, not for the quality of the care they provide.

Inattention to quality is coming to an end. Hospitals are increasingly being paid in part for their performance. For example, in 2013 Medicare began a value-based purchasing program, or VBP. Under the program, Medicare withholds a percentage of payments throughout the year and then redistributes those dollars to hospitals that achieve the highest scores on a range of quality measures. In the first year of the program, this redistribution amounted to about $1 billion.

In theory, pay-for-performance makes a great deal of sense. But in practice, pay-for-performance is only as good as the quality measures used to determine performance. And Medicare’s measures, by placing significant weight on patient satisfaction scores, are hurting hospitals that disproportionately care for low income populations.

Let’s take a closer look at Medicare’s quality measures. Some are what healthcare experts call process measures, which identify whether hospitals do the right things at the right times to the right patients. When patients are admitted with heart attacks, for example, a process measure might assess how many of those patients receive aspirin and beta blockers upon discharge, or how many receive revascularization efforts in the cath lab within 30 minutes of arrival.

(To read the rest of this article, please visit Forbes.)

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Obamacare Isn’t Helping the “Tweeners” Much Yet

The Affordable Care Act has done a lot to increase the proportion of Americans with health insurance. I’ve posted a lot of those figures in the past. But here is some data, published by a former student of mine, showing that the law doesn’t seem to be having a huge impact yet on people ages 26 through 44.

Obamacare Isn't Helping Tweeners Much Yet

The sharp decline in the uninsurance rate people ages 19 through 25 are direct result of the law expanding parental coverage for people in this age group. Insurance companies now have to allow parents to keep their kids on their insurance up to age 26. But what explains the larger decline in uninsurance among people 45 and older, compared to those 26 through 44?

I expect it is health. At least according to my experience, as people get older, they experience more health problems. That makes it that much more important to have health insurance. By contrast, many people in their 20s and 30s are relatively healthy, and are therefore probably more willing to go without health insurance. That is a problem. We need everybody to have insurance, so the people in their 20s and 30s subsidize those in their 40s, 50s and 60s. The individual mandate was supposed to accomplish this.

It hasn’t done so yet.

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Improving Local Government through Behavioral Economics

Peter Ubel SanfordA couple weeks ago, I had the privilege of talking with government officials from across the state of North Carolina – mayors, city Council people, and the like – about the possible role that insights from behavioral science can play in helping them promote the well-being of their communities. Here is a really nice summary of the event:

The timing could not have been better. On September 15, President Obama issued an executive order: use behavioral science insights to better serve the American people.

Two days later, 70 mayors, city managers and others from 30 local governments in North Carolina gathered at a Sanford School workshop to learn about that very thing. What is behavioral science, and how can it be used to spur innovation at the local level?

As Obama’s order spelled out, research findings from fields such as behavioral economics and psychology — which analyze how people actually make decisions and act on them — can inspire better, more successful government policies.

The local officials learned from among the best in the field. Dan Ariely, professor in the Sanford School, and James B. Duke Professor of behavioral economics, has authored three best-selling books on the topic: Predictably Irrational, The Upside of Irrationality, and The Honest Truth About Dishonesty.

Peter Ubel, the Madge and Dennis T. McLawhorn University Professor of Business, Public Policy and Medicine at Duke, uses the tools of decision psychology and behavioral economics to explore health care topics like informed consent, shared decision making and health care cost containment.

To read the rest of this article, please click here.

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Look Dad – I’m an Economist!

Look dad I'm an economistI recently spoke with a reporter about a new effort, by Medicare, to persuade dialysis centers to care for a wider range of primary care health needs for people with kidney failure. I’ll give you a teaser for that article below, but first want to point out what struck me as the most notable part of the article – the reporter referred to me as a health economist! My father has always been disappointed in me, for not practicing medicine full-time, and for pursuing soft social sciences like psychology. Maybe he will be happy to find out that someone thinks of me as an economist.

Now here’s that news report:

The CMS announced on Wednesday the first suite of accountable care organization models specifically geared toward treatment of end-stage renal disease (ESRD). More than 600,000 people in the U.S. live with the condition, which requires patients to undergo costly, but life-sustaining dialysis treatments each week that account for nearly 6% of Medicare spending.

The 13 ESRD seamless care organizations, called ESCOs, began to share this month the financial risks for treating Medicare beneficiaries with kidney failure in 11 U.S. states. The models are meant to encourage dialysis providers to “think beyond their traditional roles” and provide patient-centered care, the CMS announcement said.

DaVita and Fresenius, the nation’s two largest dialysis providers, both won bids to participate. DaVita HealthCare Partners will have three ESCOs located in Phoenix, Miami and Philadelphia. Fresenius Medical Care will have six, located in San Diego, Chicago, Charlotte, N.C., Philadelphia, Columbia (S.C.) and Dallas. Both providers expressed enthusiasm for participation in the program, and agree it is a step in the right direction. Still, both providers also expressed reservations.

“Deciding whether or not to participate has been a huge challenge,” said Robert Sepucha, senior vice president of corporate affairs for Fresenius. Some of the measurements are not barometers of good quality care specifically for dialysis providers, he said, and the economic incentives “are not perfect.” He added, “There are flaws that could prevent it from becoming the large-scale, new payment system a lot of us have hoped for.”

The CMS began taking applications for the ESCO initiative in April 2014, but the plan drew early criticism. Kidney providers supported the concept, but questioned the application process and the metrics selected. Some thought the models should expand to target patients in earlier stages of the disease to slow its progression and subsequent costs.

“If you’re not doing good upstream management of the patient, you’re not going to be able to address the health needs and costs that could be avoided,” said Todd Ezrine, general manager for VillageHealth, the DaVita program that will host that organization’s ESCO.

He also said DaVita “scoured the country” to find markets where the shared saving program would be successful. CMS’ benchmarking standards would be difficult to reach in markets where DaVita already achieves good outcomes, as participants may not understand the level of additional improvement needed to avoid penalties, he said.

Over the past year, the two providers have not necessarily seen eye-to-eye on the kidney care metrics used by federal programs.

For example, for the second time in nearly two years, DaVita beat its competitor on a five-star rating system posted publicly on the Dialysis Facility Compare website. Of 586 top performers in the five-star category, DaVita owned 202 facilities, while Fresenius owned only 110, according to data released Thursday. Alternatively, Fresenius had 279 facilities of the 575 that appeared in the one-star category, compared with DaVita, which had only 38.

Though kidney providers originally seemed united in their skittishness about that program, DaVita made a pivot following the first round of results. Fresenius, on the other hand, continues to express hesitation.

Fresenius made changes to the way data are collected, and to its clinical programs, but that will change nothing because of the forced bell curve the CMS uses on the five-star rating system, Sepucha said. “As one clinic moves up, another clinic has to move down,” he said. “You could get rid of all one- and two-star clinics today, and tomorrow there would be a whole new set.”

The CMS star ratings are consumer-facing initiatives that focus on quality of care inside medical facilities. The ESCOs are alternative payment models designed to encourage dialysis providers to take responsibility for the quality and cost of care for a population of patients. It includes the patient’s total care, like managing other comorbidities and multiple medications, and is not just limited to care inside of dialysis facilities

It remains to be seen if concerns about the metrics specific to dialysis care will create disparities in the ESCO programs as well. The other two organizations participating include Dialysis Clinic, which will have programs in Newark, N.J., Spartanburg, S.C., and Nashville; and the Rogosin Institute, with an ESCO in New York.

In the meantime, health economists say providers can expect more bundling. Programs like ESCO are a reflection of a national focus on encouraging health providers from all specialties to put the patient first.

“Shouldn’t the person taking care of a patient already be doing everything they could? Of course,” said health economist, Dr. Peter Ubel, of Duke University’s Fuqua School of Business. But bundled-payment models with shared financial risks do help reduce the tendency of for-profit industries to pay attention only to those products and services for which they get the biggest payments, he said.

(To read the rest of this article, please visit Modern Healthcare.)

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Absolutely Hilarious Nudge!

Here is a hilarious effort by Utah Valley State presumably to either keep people from crashing into each other while they text on the stairway, or more likely to show them how stupid it is to be engaging in that behavior in that location:

Absolutley Hilarious Nudge


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At Risk of Financial Ruin

According to figures from the Kaiser Family Foundation, one of the best sources of reliable health policy information, the majority of Americans will have to exhaust all their “liquid assets” to cover medical expenses, if they reach the maximum out-of-pocket costs allowed by their health insurance.

At Risk of Financial Ruin

The moral of this story is simple: stay healthy!

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Is It Fair to Reward Medicaid Patients for Doing What They’re Supposed to Do?

Most conservatives agree that Medicaid costs are too high. Most liberals agree that Medicaid patients should receive necessary medical care for free. And both conservatives and liberals agree that we should embrace ways to encourage Medicaid patients to obtain important preventive care services, in hopes that such services will lower healthcare costs by promoting public health.

But does anyone agree with the idea of paying Medicaid patients to receive such services?

The state of South Carolina has created an incentive program to encourage Medicaid recipients to receive preventive medical care . Show up for an annual exam, and Medicaid patients not only receive the visits for free, but even get $25 a pop for making it to the appointments. Receive mammograms, and they get another $20 per test. Get a flu shot, and they can say hello to an Alexander Hamilton, whose visage adorns the $10 bill.

Here is a table from Kaiser Health News showing what South Carolina plans to offer Medicaid enrollees, depending on which services they receive. There aren’t any huge rewards here, but when you think about the large number of people who are eligible for Medicaid in South Carolina, the cost of these rewards could be substantial:

Is It Fair to Reward Medicaid Patients for Doing What They're Supposed to Do

When I first learned of this reward program, I was reminded of a conversation I had with my teenage son. He had underperformed in school, obtaining grades incommensurate with his ability. I was expressing my disappointment with his lack of effort, but he had a rejoinder: “Dad, you should be rewarding me, for not doing drugs, or drinking and driving like all my friends.”

(To read the rest of this article, please visit Forbes.)

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The Future of Disease – in One Picture

Here are some projections on what illnesses Medicare enrollees are experiencing now, and what they will be experiencing 20 years from now, courtesy of the Brookings Institute:

Future of Disease

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So Much for the Job Killing Effects of Obamacare

Despite passionate warnings that the Affordable Care Act would demolish the American economy, things haven’t exactly turned out that way. Here is evidence Dan Diamond circulated a while back. Dan is someone I suggest you follow on Twitter if you want more pictures like these:

So Much for Job Killing Obamacare

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Action Movies Create Couch Potatoes

ICYMI: When people watch action movies, they consume more calories.

Action Movies Create Couch Potatoes

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