Enter Your Email Address to Receive a
Copy of MedicExhange Member Demograhpics

This month’s Narrative Matters in Health Affairs (Why I Don’t Get Mammograms) is among the best I’ve read. Author Veneta Mason is a late 50s nurse practitioner whose sister died from breast cancer. Yet she’s consciously decided not to get mammograms anymore because she doesn’t believe early detection makes successful treatment more likely or extends life. To summarize her arguments:

• Cancer is horrible but metastatic breast cancer is just as treatable and deadly whether or not a patient undergoes routine screening. Even though she accepts her risk may be significantly higher due to her sister’s illness, it doesn’t matter if screening doesn’t make her treatment better or life longer
• It’s important to have a primary care physician who accepts her reasoning about screening
• Breast self-exams aren’t worthwhile, but if she happens to discover something she’s not opposed to following up and having a diagnostic mammogram
• It’s important to get multiple opinions if one is told there’s a cancerous lump. A second opinion is good and a third is better
• It’s a good idea not to rush into treatment
• If there are changes in medicine that make early detection more worthwhile, she’ll change her view
• She expects to die of something –and it could be breast cancer
• She won’t think less of someone who gets screening, especially since most professional and public opinion support screening
• She relies on the Nordic Cochrane Centre for guidance

I’m not a clinician and make no judgment about the specific medical perspective she provides. However, I worry about the strong embrace of excessive screening and diagnostic testing because of the negative consequences it brings, such as unnecessary –and in some cases damaging– treatments and fear.

Share

Read More: http://feedproxy.google.com/~r/HealthBusinessBlog/~3/U8-NoPS3G9s/

What is the one thing B2B marketers should do to get budget buy-in? I posted this question on a few LinkedIn groups and got the following responses.

What is the one thing B2B marketers should do to get budget buy-in? I posted this question to a few LinkedIn groups (including the Health Care B2B Marketing Group—please join!), and got the following responses from a few B2B marketers from “across the pond.”

The key thing would be to show how what you’ve done in the past has driven the business to achieve better results, or if you haven’t got that, commit to achieving those results in coming year. The chances are your marketing dollars will be competing against other departments so you’ve got to prove that the company would be better off spending the dollar on marketing rather than saving it or spending it elsewhere.

Depending on your company’s objectives, that may not be just hard cash in the till (over time) but also brand awareness, customer satisfaction or other non-monetary measure.

But I think in many companies, it would be more likely that you’ll “only” have to fully justify any request for increases in budgets or for any amount over a top line guideline change.

— Stephen Mills, Head of B2B Marketing Campaigns, Communications, Events and Hospitailty at Telefonica O2 UK Limited

In my opinion the question every marketer should be asking themselves is ‘what is in this for the business?’ and the measures need to be in terms of long-term profitable clients that will be loyal customers for many years. This is the report you take to the board when seeking permission to spend £ on marketing.

— Iain Lovatt, Founder & Executive Chairman Blue Sheep Limited

What do you think? Share in the comments or discuss on the LinkedIn Health Care B2B Marketing Group.

Photo credit: dullhunk (cc)

Read More: http://healthb2bmarketing.com/2010/10/to-get-health-b2b-budget-buy-in-commit-to-results/

Last week, the Nobel Prize in Economics was awarded to Peter Diamond, Dale Mortenson, and Christopher Pissarides, whose work addressed questions about how unemployed workers find jobs and what role economic policy plays in unemployment. The Recovery Act, of which HITECH is a part, was designed to boost

Read More: http://healthit.hhs.gov/blog/onc/index.php/2010/10/22/onc%E2%80%99s-connection-to-the-nobel-prize/

Read More: http://feedproxy.google.com/~r/HansOhsEhealthBlog/~3/tOm_lNSefno/

Yesterday I interviewed Groupon about the company’s activities in health care. In short, they have gained the most traction with providers such as dentists and optometrists who can perform a routine service that is often paid for out of pocket. For these providers, Groupon looks like a strong alternative to the typical couponing they might otherwise do. Rather than writing a check to a marketer to distribute coupons the provider actually receives a check from Groupon that represents their revenue share from the Groupon deal of the day. In a typical example, a provider might give a 50 percent discount to Groupon buyers. Half the revenue goes to Groupon itself, which means that the provider receives 25 percent (50 percent of 50 percent) of their typical charge.

Most businesses I know aren’t making a profit at 25 percent of their normal prices. However there are some elements of Groupon that can make the deal pay off for a health care provider –or any other business. In particular:

• The provider receives income from every Groupon sold, but not all are redeemed. If only half are redeemed, it’s as though the provider is receiving 50 percent of their normal price rather than 25 percent
• There is an opportunity to upsell. For example if someone comes in for a cleaning there’s a chance to do some x-rays, fill a cavity or whatever. (In concept this is the same as an oil change deal I saw on Groupon this week, which included a cheap oil change and a 23 point inspection. No doubt they will find something wrong with the car.)
• There is the possibility of repeat business. Theoretically a new dental patient could come back every six months for many years. The cost of customer acquisition is amortized over that time
• The cash is received upfront, which is a big deal for small businesses worried about cashflow
• Appointments for Groupon members can be fit in when there is spare capacity, generating revenue that would otherwise be missed

Along with the positives are some potentially significant downsides for the providers themselves and for new and existing patients

• A patient who buys solely based on the deal is not that likely to become a loyal customer. For sure some other dentist will be promoted on Groupon within the next six months, and if not there then on one of the many Groupon copycats
• New patients should be wary about the upsell, especially in health care services. Do they really need those x-rays? Does that filling really need to be replaced? I’d be worried about an unknown dentist trying to generate an ROI on me
• If the deal is successful, existing patients may have a hard time getting convenient appointments in competition with all the Grouponers

There are certain things Groupon can do to mitigate these concerns, such as publishing reviews and checking on credentials. All in all Groupon seems to be on to a good thing.

–

On a more amusing note, when I studied the Groupon site I found someone I know featured as a satisfied Groupon customer. What’s ironic is that this person is now running a Groupon competitor.

Share

Read More: http://feedproxy.google.com/~r/HealthBusinessBlog/~3/9mHeH4vdsQo/

Read More: http://ahier.blogspot.com/2010/10/patient-centered-medical-home-regional.html

Read More: http://community.advanceweb.com/blogs/hi_1/archive/2010/10/21/partial-code-freeze-to-be-implemented-prior-to-icd-10.aspx

Groupon is the leader in the oh-so-hot group buying business. It emails a deal a day to its subscribers in cities across the country. Many of the deals are big discounts on restaurants, bars and recreation aimed at young urban women. Not really my demographic. But then I saw a headline in the Baltimore Sun (HealthKey: Doctors experimenting with social media), which discussed the use of Groupon in health care. So I decided to call the company and learn more.

Here are excerpts from my discussion with Groupon spokesperson Julie Mossler. In tomorrow’s post I’ll give my take on what it all means.

David Williams:            I read that 15 percent of Groupon offers are for health care. What sort of providers do you feature?

Julie Mossler:            The model works best with providers who can resolve a health issue within one visit. It’s optometrists, chiropractors, and dental cleanings, not doctors. We also do some cosmetic medicine like Botox.

Williams:            What does a typical deal look like?

Mossler:            We approach businesses that we would like to see featured and businesses can also contact us. We structure a deal and provide support when a deal goes live.

A deal goes live and it’s up for 24 hours.   We offer customers discounts of 50 percent to 90 percent.

We ask businesses to specify the minimum number of customers they need to make it worthwhile. Sometimes it’s ten new patients; sometimes it’s fifty. That’s the minimum number of customers we need to get or else no one gets the deal.  That’s called the tipping point.

If we don’t reach that minimum number of customers then neither the business nor the customer is charged and we just start over the next day with a new deal.  If we do reach the minimum number then we take about half of the revenue of each Groupon sold and we give the rest to the business.

The customer just prints out the voucher and brings it in to the business whenever they make an appointment.

Williams:            Is the tipping point a real factor or is almost always reached?

Mossler:            The majority definitely reach the tipping point.  Less than 5 percent don’t and it’s usually in our newer cities or niche businesses. Even if you don’t reach the tipping point you’ve still been featured as the sole business on Groupon that day. In some markets we have hundreds of thousands of subscribers.

Williams:            How do subscribers interact with the site?

Mossler:            The customers have all opted in to get a daily e-mail. The people that you’re reaching with this advertising are people who want to spend money. They are a very motivated buying collective. If you get an e-mail in your inbox and you like the deal then you go to the site and you click “buy.”  Your credit card isn’t charged until we reach that minimum number of customers.

Williams:            Are bargain hunting patients who are just coming for one visit attractive for health care providers?

Mossler:            Yes. Our customers are college educated, making close to $100,000 a year on average. They are primarily female. A lot are single but we’re also starting to attract more moms and families.

I want to return to what I said about ‘resolved in one visit.’ With this approach you’re going to reach a much wider range of people who are interested in your deal because everybody needs teeth cleaning but not everyone needs a physician who works in a particular specialty.  But at the same time we structure the deal so that we’re promoting customers to come back in.  The deal may include a cleaning and then credit toward your next visit so that you’re encouraging them to come in twice.

Williams:            So it’s not just a simple 50 percent or 75 percent off of the first cleaning?  There might actually be a second part of it.

Mossler:            The value in Groupon is inherently the fact that we’re delivering the opportunity for repeat traffic. It’s up to us to structure the deal that way and then it’s up to you as the merchant to ensure a great experience and give them a reason to come back.  So yes, this is a very attractive customer base, but that’s half the story.  The other half is when they come in, what are you doing to make them fall in love with your business and want to only use you as their dental provider or their optometrist?

Williams:            Do you see Groupon spreading beyond the dental providers and optometrists to other medical areas?  Do you see primary care physicians participating at some point?

Mossler:            Collective buying can be applied to anything, so we never say never.  Who knows what could come down the pipe? It’s something that we’ve discussed because it’s interesting.

Williams:            Some of what you’re doing is selling entertainment and excitement. What percentage of the buyers ultimately redeem their Groupons and does it differ for health care compared to other categories?

Mossler:            Redemption is hard for us to track because we can’t force merchants to do it. But we do know from surveying 3,000 merchants that 96 percent want to be featured again or would recommend it to a fellow merchant. That is really powerful because if you weren’t getting people coming in through your doors and redeeming Groupons you wouldn’t want to do it again.

We’ve heard from many merchants who say that for appointment based businesses or physician businesses, 80 percent of Groupon purchasers were new customers.

Williams:            Does the business model depend on having a relatively low percentage of people redeem?  In other words, if someone sells Groupons at 50 percent off and receives 50 percent of that from Groupon they are only receiving 25 percent of the usual revenue, which is probably below cost for most businesses.  Do merchants want redemption rates to be low?

Mossler:            Breakage isn’t a selling point for us because the value in Groupon is the long term traffic.  The return on investment comes from getting a new patient who is going to be your patient for the next five years.  People not coming in the door and not redeeming the Groupon doesn’t really achieve that because they never meet your business.

The question really has to be posed to the merchant: Is it more valuable to you to get that $40 in your pocket from the purchase of the Groupon or would you rather get the value of a patient who is going to come back to you every six months over the next five years?

Williams:            In health care compared to other categories, are there any special issues that you have to deal with?  Anything that makes it more complicated than a traditional commercial relationship?

Mossler:            No. It’s just as easy to set up a deal for us in health care as it is in other categories.  Any time you’re dealing with someone’s health you have to make sure that the correct licenses are in place.  With any business in Groupon, whether it’s a restaurant or a pet store or an optometrist, we look for positive online reviews. They have to have a website with pricing and we’ll research things like their BBB rating or state licenses.  We’re doing everything we can.

We vet a hair salon just as thoroughly as we would a dentist because at the end of the day we don’t want to send our customers anywhere that isn’t just an awesome business.

Different things apply to different industries.  With massages for example, who would have known when we first started this business that we would have to check and make sure that they didn’t have any complaints for inappropriately dealing with a guest or for prostitution?

Williams:            Are there any major changes coming up in your model or is it just a matter of growth into new cities and adding new subscribers?

Mossler:            We are rolling out personalized deals.  Customers have the option to opt into personalized deals by providing their zip code, their sex and their previous buying history. Based on that we can connect them with the deal that’s best for them.

So for example if you you’re a mom we would be more likely to send you a family dental cleaning package.  It’s great news for merchants because it helps them reach the audience they want to reach. For someone with an appointment-based business with limited capacity for new patients we can limit the number of people we send your deal to or we can cap the amount of Groupons that are sold.

We can also work with a practice group that has three or four locations.  They can offer a Groupon and list all the locations on one page.

Share

Read More: http://feedproxy.google.com/~r/HealthBusinessBlog/~3/l_BHHNX0ITk/

It’s scary and emotionally painful to be 500 miles away from your dad when he gets admitted to the ICU in the middle of the night. I learned that some of that fright can be alleviated and the pain can be eased a bit by online access to his health data.

With consent, I was able to access to the Boston hospital’s patient portal, one that was developed many years ago, long

Read More: http://healthit.hhs.gov/blog/onc/index.php/2010/10/20/meaningful-use-expert%E2%80%99s-%E2%80%9Cvirtual-bedside%E2%80%9D-experience-with-ehr/

Read More: http://www.thehealthcareblog.com/the_health_care_blog/2010/10/how-health-services-researchers-can-harness-data-discussion-at-health-innovation-week-sf.html

Read More: http://diseasemanagementcareblog.blogspot.com/2010/10/news-about-upcoming-webinar.html

This morning, I was working with an orthopedic surgeon at the big ortho clinic.  He was using his personal digital camera to take a picture of films that were up on a light box.  He said it was the only way he could get images to put in a

Read More: http://doctordalai.blogspot.com/2010/10/paranoid-it-diocy.html

Tags: Healthcare Blogs - PACS Blogs - the - and - authentication - that - for

Related Articles/Posts

• Agfa Fixes Problem! One Down, ...
• The Doctor Dalai Show Revisits...
• Inca Trails and Tribulations...
• Australian Whistleblowers, Tak...
• Doctor Dalai and the Demo...

Read More: http://feedproxy.google.com/~r/ToddLinden/~3/9MGtB2E1BZM/school-bus-tips-over-grmc-kicks-into.html

Read More: http://feedproxy.google.com/~r/EmrAndHipaa/~3/rXAasmOrgSc/

Most healthcare professionals are familiar with Epocrates and I use it myself as a consumer to subscribe to formularies in my area so I can check too. 

The information I use is free and gives me drug information on the formularies that I select via my account online.  Not too long ago I added the WalMart $4.00 generic formulary too.  As a consumer and patient this certainly comes in handy.  There are additional subscriptions for professionals available, and there are a number of free calculators for consumers too. 

As a matter of fact on the Medical Quack if you are reading here and need a quick look of up a drug, there’s an Epocrates shortcut where you can type in the name of a drug and you will get the full look up and rundown.  This is what it looks like in the center column of the blog, right under the $4.00 and less generic drug links for retailers that offer them.  You can see pictures of the pills as well so for me this is a must have application for my Smart Phone and it is free and available for BlackBerries, IPhones, Windows Mobile and Palm devices.  Last time I was talking to an MD who didn’t use Epocrates I was able to find the formulary and cost information faster than what he had offered to have his staff look it up!  BD

SAN MATEO, Calif., Oct 20, 2010 (BUSINESS WIRE) -- Walgreens  and Epocrates, Inc. today announced Walgreens Prescription Savings Club (PSC) formulary list of more than 8,000 brand and generic medications is now easily accessible to physicians and other prescribing health care providers using Epocrates' mobile and online drug reference products. The collaboration between Walgreens and Epocrates allows health care providers to be better equipped to identify lower cost medication options for their patients when writing or refilling a prescription.

Using Epocrates, health care providers can quickly check and compare the Walgreens PSC formulary to determine if a less expensive drug option is available, which can provide patients with significant monthly savings for frequent and required medications. Prescribing providers will have free electronic access to the Walgreens PSC list, which includes treatments for most chronic conditions and diseases, such as insulin, statins and antivirals. In a recent survey of more than 1,000 physicians, about 80 percent of respondents reported changing a prescribing decision based on information available in Epocrates.

Walgreens and Epocrates Collaborate to Provide Health Care Professionals Access to Prescription Savings Plan Information at the Point of Care - MarketWatch

Read More: http://ducknetweb.blogspot.com/2010/10/walgreens-adds-their-formularies-to.html

Summary: Those who oppose health care reform continue to assert that the legislation is unaffordable. The only way to dispute this claim is first, to spell out the specific provisions in the Affordable Care Act (ACA) that trim spending and raise new revenues—without rationing care. These planks in the legislation provide substantial funding for the subsidies, employer tax credits, and Medicaid expansion needed to cover some 32 million Americans who are now uninsured—while simultaneously putting Medicare on the road to fiscal stability.

Here are the highlights. The Affordable Care Act finances reform by:

• collecting  over $100 billion in new fees from the insurers, drug-makers and device-makers who will see their revenues grow as millions of new customers buy their products

•  raising Medicare taxes for the 2% of the population at the very top of the income ladder

•   cutting $132 billion in over-payments to Medicare Advantage insurers

•   collecting penalties from individuals  who choose not to purchase “essential minimal coverage” for themselves or their families

•   collecting fees from employers with at least 50 full-time employees who do not offer insurance to their workers 

•   taxing “Cadillac” insurance plans (costing more than $10,200 for an individual, or $27,600 for a family)

•   reducing government subsidies to hospitals that treat a large number of uninsured patients. (Because there will be fewer uninsured, hospitals will no longer need such large subsidies.)

And these are just the big-ticket items. For a longer list of the many concrete ways that the ACA provides funding for universal coverage, see the shaded table at the end of part 2 of this post providing detailed estimates from the Joint Committee on Taxation (JCT) and the Congressional Budget Office.  The conservative-leaning Tax Foundation confirms that, together, these provisions will generate more than $900 billion.

That $900 billion includes savings Medicare will realize by trimming annual increases in Medicare payments to hospitals, skilled nursing facilities and home health agencies by 1%. Note: The ACA is not paring payments, it is trimming yearly increases in payments—and the legislation explicitly exempts doctors, calling for reductions “in payment updates for most Medicare goods and services other than physicians’ services . . .” (Fear-mongers who say that reform legislation will slash Medicare payments to doctors have been lying to you. In fact, the ACA raises Medicare and Medicaid fees for many physicians.)

In part 2 of this post, I will explain that the goal of this provision is to spur management to increase productivity, not by down-sizing, but by redesigning systems to provide better support for health care workers. As I explained in “Five Myths and Facts About Medicare” the Medicare Payment Advisory Commission  (MedPAC) has discovered that when hospitals are under financial pressure they can and do become more efficient than hospitals that enjoy fatter profit margins. Don Berwick, co-founder of the Institute for Healthcare Improvement, has spent his career showing hospitals how to improve care, tighten operations, and reduce errors. As the new director of the Centers for Medicare and Medicaid Services (CMS) he is ideally positioned to guide this effort.

Medicare Trustees reckon that, thanks to this provision, Medicare’s Hospital Insurance (HI) Trust Fund will remain solvent until 2029, 12 years longer than was projected last year. “The 75-year HI financial shortfall has been reduced substantially, to 0.66 percent of taxable payroll, down from 3.88 percent in last year’s [Trustees’]report.”

This will give Medicare the breathing room it needs to achieve additional savings, using the new-found authority that the Affordable Care Act gives it to expand on successful pilot projects without needing approval from Congress. (In the past, lobbyists have blocked successful pilots.)

In the third and final section of this post, I will turn to the reforms that are not so easily “scored.” These are the savings that will flow from unprecedented changes in the structure of our health care system--reforms that have not been tried on a large scale. It is impossible to estimate just how much they will save but, as I explain in part 3 , over the long term, what cannot be counted  is likely to count most. These are the crucial reforms that will turn a fragmented cottage industry into a system that can provide coordinated, high quality care at a lower price.

The Affordable Care Act proposes dozens of ways that we can transform how we pay for care, realigning financial incentives to reward value (in the form of better outcomes) rather than volume (more tests and more treatments). Some of these reforms already have succeeded in cities and medical centers across the nation.

This does not mean that change will be embraced everywhere. Much depends on the local medical culture, and how health care providers, insurers, patients and others respond to new incentives. Putting a number to total savings would require reading the minds of millions of Americans, and predicting how they will react over the next ten years.

But we do know that there is much waste in our fragmented health care system. Both research and on-the-ground experience demonstrates that by moving away from fee-for-service payment, rewarding hospitals and doctors for collaborating rather than competing, comparing the effectiveness of treatments, providing patients with the information they need to share in decision-making, and giving seriously ill patients an opportunity to choose palliative or hospice care, we can reduce the over-treatment that puts patients at risk—and offer them more affordable, safer, patient-centered care.

Many within the world of U.S. health care are more than ready for change. As Paul Levy, President and CEO of Boston’s Beth Israel Deaconess Medical Center, recently reported on The Health Care Blog, already, new incentives for physicians, combined with a growing awareness that we are “over-testing” many patients, “has led to a large reduction in the number” of  imaging studies “done in hospitals” around the nation. “The result of these trends,” Levy adds, “will be to reduce the number of radiologists working in hospitals,” which “will also probably result in a reduction of salaries for this physician specialty.” This, he observes, represents “the first bend” in the health care inflation curve.

Reform has begun. Those who would repeal it will have to run to catch up.             
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The mainstream media rarely tries to explain the Congressional Budget Office’s nearly unbelievable claims that the Patient Protect and Affordable Care Act can:

1)  Pay for itself

2)  Provide coverage for 32 million uninsured Americans

3) Trim this nation’s deficit by some $143 billion over the next ten years

And, that’s not all. Medicare’s Trustees say that the reform legislation puts Medicare on the road to financial solvency–while limiting co-pays and beefing up benefits.

You might well ask: How can this be? How can we provide insurance for an additional 32 million people, improve Medicare, and simultaneously save money?

The media has not been a great help in answering these questions. This is, in large part, because the good news lies in the details—dozens and dozens of details. Fleshing out the myriad ways that the ACA generates new revenues while reining in health care spending would take up far too much time on a cable television show—and way too much space in most newspapers.

This is why the media so often settles for those one-liners that conservatives excel at:  “CBO’s Score: Cloudy with a Chance of Bankruptcy,” declares one pundit.  “The health-care bill does nothing to lower costs, and in fact, is going to raise costs dramatically,” says a Libertarian candidate running for the Senate from Indiana. This just isn’t true, but reform’s opponents get away with the sound-bites because reporters like pithy quotes—and an adequate rebuttal would require more than two or three sentences.

At this point, I am very tired of people who talk in bumper-stickers. Concise may be nice, but not when brevity serves only to package lies.

In this three-part post, my goal is to get my arms around all of the facts about new revenues and savings, and lay them down, in one place, so that readers can judge CBO’s claims.

Exactly where is the money coming from? Will you be paying? Who is contributing—and how much? Most importantly, are the contributions justified?  Is it fair to ask high-income households to contribute so much? Just how high are the penalties for those who decide not to buy insurance? What do they get in return? Are seniors giving up benefits to fund care for younger Americans? 

To find the answers to these questions, you have to delve into the details. But first, for the sake of total disclosure, a disclaimer.

Granted, These Are Projections: Savings Could be Less—or Greater

CBO Director Doug Elmensdorf acknowledges that the agency’s estimates of the cost of reform—as well as the savings and new money that the legislation will generate—are just that, estimates. As he told the World Health Organization in April: 

“We have concerns in different directions: Subsidies will be more expensive than we project. Medicare reforms will save more money than we project. Our estimates reflect the middle of the distribution of possible outcomes, based on our professional judgment (including consultation with outside experts).” 

The CBO estimate is, in fact, “middle of the road.” At one end of the spectrum, a Commonwealth Fund report authored by health care economist David Cutler and Commonwealth President Karen Davis is significantly more optimistic than the CBO, forecasting that reform would lead to federal savings of $400 billion over 10 years. “Cutler et. al. believe that the use of Exchanges will reduce average insurer administrative costs by three percent, compared with the CBO’s estimate of just 0.4 percent,” Roger Collier, editor of the Health Reform Update, recently explained. They also are convinced that “system modernization” (i.e., structural reforms that will make care more efficient) “will trim medical costs by one percent a year.”  The CBO does not attempt to include these savings in its estimates.

At the other end of the spectrum, Medicare’s Office of the Actuary (OA) predicts that savings and new revenues will fail to cover the full cost of reform, estimating that over the course of a decade, the ACA will cost the federal government $289 billion. This is in part because the OA scores how many Americans will be signed up for insurance by counting  people who are eligible for both Medicare and Medicaid-- as if they will be covered by both programs--“leading to total insured enrollment appearing to exceed the entire US population,” Collier notes on The Health Care Blog. 

 Moreover, “OA diverges most from the CBO numbers—by some $330 billion—in projected revenue from drug manufacturer fees, hospital insurance taxes, and other provisions, which might be more within CBO’s budgetary forecasting capabilities,” Collier writes.  “Inserting the CBO estimates into the OA forecast would give a net reduction of federal spending of $40 billion—reasonably close to the CBO savings of $89 billion.”

Collier suggests that the Commonwealth Fund may be overly optimistic. But CBO and the Office of the Actuary are not so far apart.  In the end, Chief Actuary Richard S. Foster, like CBO’s Elmensdorf, stresses the uncertainty of any estimate that tries to assess total savings:  “Many of the provisions, particularly the coverage expansions, are unprecedented  . . . Consequently little historical experience is available with which to estimate the potential impacts.”  Moreover, “The behavioral responses to changes introduced by national health reform legislation are impossible to predict with certainty. In particular, the responses of individuals, employers, insurance companies, and Exchange administrators to the new coverage mandates  . . .”   

Laying out the Numbers: Cutting Costs and Raising New Revenues

That said, CBO can project revenues and savings from fees and taxes with a fair amount of certainty. These are not just “hoped-for” savings.   Under the Affordable Care Act:

•   Medicare will be cutting overpayment to Medicare Advantage insurers by some $132 billion over the next four years. In Congress, both conservatives and progressives agree that these “windfall” payments to insurers are unwarranted. (See discussion of Advantage below.) 

•   Drug-makers, device-makers, and insurers already have agreed to kick in $107 billion in new fees. Drug companies begin making their contribution next year.

•    Because more than 30 million formerly uninsured Americans will have coverage, Medicare will be able to trim subsidies to hospitals that care for the uninsured by $36 billion, or 75%. (The subsidies cannot be totally eliminated because some patients will remain uninsured.)

•    Beginning in 2014, individuals who choose not to purchase “minimal essential insurance” will pay penalties that CBO projects will total $17 billion. (Libertarians and others who object to both the individual mandate and the fines should note that households that ignore the mandate are expected to contribute less than one-third of the $60 billion that the insurance industry will be kicking in. In return, those individuals will enjoy the security of knowing that, if, at some point in the future, they or their families become sick and decide to purchase coverage, insurers cannot turn them away, or gouge them by charging them more than healthier customers. This is why those who reject the mandate are asked to help fund reform. They, too, will benefit.)

•    Employers with at least 50 full-time employees who do not offer coverage to their workers will pay roughly $52 billion in fees, beginning in 2014.

•    The government will take in as much as $32 billion in taxes on pricey health plans that fetch $27,600 to cover a family, or $10,200 for an individual, beginning in 2018. Admittedly, this is a soft number—no one knows how many plans will cost that much in 2018. In fact, reformers hope that insurers will do their best to make sure that premiums come in under that line. This, in turn, would reduce national expenditures on health care. In its own way, the “Cadillac tax” creates a global budget for health care spending—without cutting benefits or shifting costs to patients. (Under the legislation, all plans must offer comprehensive benefits and there is a cap on how much families can be asked to pay out-of-pocket.)  

•    Beginning in 2013, reform will raise another  $210.2 billion in new Medicare taxes on wages and self-employment income (0.9 percent) and on investment income (3.8 percent) from taxpayers with an adjusted gross income over $200,000 ($250,000 for couples).

(Source:  Deliotte., “Prescription for Change Filled,”  March 30, 2010. The report relies on estimates from the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO)]

And this is a just a short list. For a complete inventory of the ways the legislation generates savings and new money, see the shaded box at end of part 2 of this post. It includes more esoteric sources of funding including $23 billion that results from cancelling an energy tax credit  for “black liquor” (a by-product of paper production), as well as smaller amounts that will flow from dozens of places ($3 billion here, $500 million there.)

These are revenues that reformers can count on, flowing from specific taxes and fees that are now part the law of the land. Could some of these be repealed? Perhaps, but as Collier notes, this “seems close to absurd, given both political parties’ promises to cut the deficit. Almost certainly, there will be some yielding to lobbyists, but a more likely effect will be modest shortfalls in savings . . .”

Should We Expect High-Income Tax-Payers to Contribute So Much?

The biggest item on the list above is the $210 billion that wealthy taxpayers will be contributing. To some, it may seem terribly unfair to force those in the top two percent to take on such a large share of the cost of reform.

But consider this: in recent decades, the wealthiest 10 percent of households saw their share of the nation’s total income climb from 34.6 percent in 1980 to 48.2 percent in 2008.  More importantly, the richest one percent (earning over $368,000 in 2008), watched their slice of the income pie more than double, rising from 10 percent 1980 to 21 percent in ’08. 

Meanwhile, as the middle line in the chart below illustrates, middle-class incomes remained relatively flat.

 
One might argue that the rich became richer because they were working hard to innovate, creating businesses that benefit all of us. In many cases this is true. But these households weren’t just earning more; they were paying out a smaller share of their income in the form of taxes. Over the past 30 years, the average marginal income tax rates for those perched on the highest step of the income ladder plunged—from an average of 48.2% during the eight years of the Reagan administration in the early 1980s, to 39% during President Bush Sr.'s administration in the early 1990s.

Today, the top marginal rate stands at 35%--the lowest in 80 years. Even if the Bush tax cuts for wealthier Americans were eliminated, the top marginal rate would revert to just 39.5%. High income households would be laying out roughly what they did in the early 1990s when Bush Sr.  was president--and nearly 9% less than they shelled out during the Reagan years.

Granted, if progressives win the current tax debate, the taxes that high-income households pay on  long-term capital gains could climb to 20% , up from 15% today—but still well below 28%, the rate they paid on those gains in the late 1980s and early 1990s when income at the top was significantly lower.

To put tax rates for high-income households in a larger historical context, keep in mind that during the Eisenhower and Kennedy administrations of the 1950s and early 1960s, the top marginal rate was 91%. This is one reason why the gaps between the rich and the middle class were so much lower in those decades.

Today, taxes on dividends and capital gains also stand at historic low, and this represents another break for wealthy famlies because their investment income often exceeds their earned income. As a result, as the Tax Foundation table below reveals, when you combine earned income and investment income, the effective federal tax rate for this group (the percent of total adjusted gross income that the top 1% actually paid) fell from nearly 35% in 1980 to 23% in 1998. (See the fourth column in the table, headlined "Top 1%")

(Click Table to enlarge)

Source: IRS                         
Notes from the Tax Foundation:
(1) All tax returns that have a positive AGI are included, even those that do not have a positive income tax liability.
 2) The only tax analyzed here is the federal individual income tax, which is responsible for about 25 percent of the nation's taxes paid (at all levels of government). Federal income taxes are much more progressive than payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes (depending upon the economic assumption made about property taxes and corporate income taxes).  Thus, if one looked at all taxes, one would find greater inequality

The bottom line: Over the past 30 years, the top 2% have been taking in a far larger share of the nation’s income while paying out a much smaller percentage of their income in taxes. The chart and table above make a compelling argument that high-income Americans are in a position to extend a hand to those who cannot afford health care insurance. 

Those earning six figures can do this without changing their lifestyles: According to Deloitte, a single person earning $250,000 annually would owe an extra $450 in taxes, while an individual reporting $500,000 would pepy extra taxes of just $2,700. A couple with $250,000 in joint income would pay no additional tax.

            Trimming Over-Payments to Medicare Advantage Insurers

Cuts in what many call unwarranted subsidies for private sector Medicare Advantage insurers represent the second-largest source of funding in the Affordable Care Act. Those  critics who like to sum up reform in a sentence or two describe the change in headlines like these: “The Healthcare Hatchet is Coming to Medicare Advantage” (Washington Examiner)  or “Millions  to Lose Advantage Coverage; Benefits Cut in Half" (AHIP press release).

No surprise, the story is far more complicated than that. 

As I have explained in the past, when Congress passed the Medicare Modernization Act in 2003, it agreed to pay private sector Medicare Advantage insurers an average of 13% more than it would cost Medicare to cover the same patients.

In a recent phone interview the Urban Institute’s Robert Berenson (a former Medicare official and astute, long-time observer of Washington politics)  explained such Congressional largesse: “Newt Gingrich wanted to privatize Medicare, by turning it over to the insurers.” If legislators could make the program sufficiently lucrative, insurers would advertise broadly, promising seniors “extras” such as free eye-glass frames, lower co-pays, or gym memberships.

And that is just what insurers did. Today, roughly one quarter of Medicare beneficiaries are enrolled in Advantage plans. But more than 75 percent of seniors have stuck with the original Medicare program, and they, along with tax-payers, are footing the bill for the overpayments to insurers. This hardly seems fair.

Moreover, as Martha Gold, a Senior Fellow at Mathematic Policy Research, noted in Health Affairs, while "individual enrollees may gain” [from Medicare Advantage], beneficiaries as a whole may be harmed if higher payments add to the fiscal stress on Medicare  making the program less viable in the long run."

If Medicare continues to spend at the current rate, in seven years its hospital fund will begin to run out of money. At that point, it would have to make deeper cuts in the payments to Advantage insurers. In response, probably most insurers would flee the business just as they did in the late 1990s when insurrers decided that an earlier attempt to outsource Medicare to the private sector just wasn’t adding enough to their bottom lines. Seniors bumped from Advantage plans could return to traditional Medicare, but they would find that they, along with all other Medicare beneficiaries, would have to pay substantially higher co-pays and deductibles as Medicare struggled to stay afloat.

Medicare Advantage seniors need to understand that they are still part of Medicare. Their fate depends on Medicare’s solvency. It’s not worth risking that safety net for a “Silver Sneakers” gym membership that, in fact, many seniors rarely use. Even lower co-pays and annual eye exams do not justify the 13% premium that Medicare is doling out to insurers.

Indeed, even Advantage customers acknowledge that the “extras” that Advantage plans offer just aren’t worth that much to them. A 2009 study published in the International Journal of Health Care Finance and Economics reveals that when Advantage beneficiaries were asked how much they would pay, out of their own pocket, for the benefits provided by their insurer, they estimated the value of those benefits at 14 cents for every extra dollar that Medicare was ponying up. As economist Austin Frakt, a co-author of the report, explains: This relatively poor return of value on taxpayer dollars is why I support reductions in Advantage payments. The administration and congressional Democrats have chosen the right path for Advantage payment policy.” 

In part 2 of this post, I will talk about the ultimate effect of Advantage cuts on seniors. Despite shrill predictions (more sound-bites) 99% of those on Advantage will still have access to an Advantage Plan. And thanks to the new authority that the Affordable Care Act grants to the Secretary of the Department of Health and Human Services (HHS), HHS Secretary Kathleen Sebellius has succeeded in protecting Medicare beneficiaries from excessive increases in cost-sharing and premiums in 2011. Next year, the premium on the average Advantage plan will fall by 1 percent. Under the ACA, seniors on traditional Medicare also will enjoy lower co-pays and better benefits.

Part 2 will conclude by explaining how Medicare aims to improve productivity and reduce waste, by trimming annual increases in payments to hospitals, nursing homes and home health agencies while improving care for patients. Ask hospital CEOs, and some will tell you that productivity cannot be improved—hospital systems are as good as they possibly could be. Then ask a hospital nurse about waste, errors, and whether better system support would give her more time with patients. Or talk to a hospital executive like Paul Levy.

In Part 3, I’ll discuss the savings that can flow from deep structural changes in how we pay for care, and how it is delivered. These are the savings that cannot easily be counted, but, in the long run, may well count most.

Read More: http://www.healthbeatblog.com/2010/10/how-reform-legislation-funds-itself-strengthens-medicare-and-cuts-the-deficit-part-1-.html

Over the last number of years we have seen Ron Williams in the news quite frequently and almost any CEO job, especially in healthcare today is a pressure cooker.  The new CEO promoted from within takes over effective November 29th.  Nothing like taking a break in the middle of healthcare reform, as we all see it’s not getting any easier.  BD 

Aetna Inc. Chairman and Chief Executive Ronald A. Williams is retiring from the managed-care giant effective April 2011 and stepping aside from the CEO role late next month, when company President Mark T. Bertolini will assume the chief executive spot and be elected to the board

The transition comes as a major overhaul of U.S. health coverage phases into effect following a contentious national political debate in which Mr. Williams took a leading role as an even-toned industry advocate.

Mr. Williams, 60 years old, who joined the company in 2001 and became CEO in 2006, will remain as executive chairman until April, when Mr. Bertolini, 54, will become chairman as well as serving as president and CEO. Mr. Williams will act as a consultant to Aetna, the third-largest U.S. managed-care company, on matters related to public policy and federal regulatory strategy until February 2012.

Mr. Bertolini becomes CEO as of Nov. 29.

Aetna CEO to Retire Next Month - WSJ.com

Read More: http://ducknetweb.blogspot.com/2010/10/aetna-ceo-ron-williams-to-retire.html

Read More: http://feedproxy.google.com/~r/Futuredocs/~3/RIKBO8942yE/

The latest edition of the Cavalcade of Risk is hosted by Workers’ Comp Insider. Check out all the risky posts.

Share

Read More: http://feedproxy.google.com/~r/HealthBusinessBlog/~3/5C_P3nu1nTA/

The nice folks from IBM’s developerWorks group asked me to write an intermediate-level set of instructions (with a little code) for how technical teams and identify can find databases and spreadsheets that might contain personally identifiable information (PII) and protected health information (PHI).

The article is now available on IBM’s developerWorks, here’s the abstract:

Identity theft and medical fraud are growing problems. They are so big the U.S. government is spending billions of dollars securing its own computer systems and has written thousands of pages of new regulations that you must follow to help protect your customer and employee data. To comply with new regulations and properly secure data, you will need to find personally identifiable information (PII) and protected health information (PHI) in your databases and documents. Both PHI and PII are conceptually easy to understand but very difficult to track in the thousands of relational data stores, files, and spreadsheets that make up a typical organization’s IT environment. This article describes some methods to automatically identify and inventory PII, PHI, and other sensitive data with databases and spreadsheets using Java™ technology and the Apache Ant build tool.

Don’t forget that there are open source and commercial scanning tools start with similar functionality but add more features. When you look for third-party tools, consider automated discovery (the tools automatically find databases and record sources with PII/PHI), configurable templates (you add your own rules), broad coverage (all files, databases, and network transfers are covered), content scanning, and auditing.

Please check out my developerWorks article and comment either directly on the IBM site or drop me some notes here about what you think about it.

Read More: http://feedproxy.google.com/~r/HealthcareGuy/~3/C5EJ6iWdgas/