Seeing Value From the Patient’s Perspective

“Value” is the focus right now in American health care. Payers like Medicare and private insurers are placing great emphasis on it, as are hospitals and doctors’ offices needing to satisfy the demands of those payers to get paid. But the focus on value in the present system is centered on reforming payment and lowering costs almost exclusively, rather than enhancing the patient experience, and involves unproven approaches like “bundled payment” and “pay for performance”, in which doctors and hospitals are financially incented to fixate on efficiency in how they deliver care. In short, right now “value” means figuring out ways insurers can save money and providers cannot lose money.

The emphasis on value in terms of efficiency and payment reform isn’t trickling down in positive ways to individual patients. Insurance premiums continue to rise, taking more dollars out of patients’ paychecks to cover the care they need. Health insurance is covering less in that many of us pay higher deductibles and co-pays in our plans for services such as physical therapy, mental health care, and emergency care. Many people have annual deductibles of thousands of dollars that must be paid before having any specialty care covered.

Americans pay more and yet have serious access problems in primary care, long-term care, and much specialty care. Wait times to see all kinds of doctors are increasing in most areas of the country. To deal with this, in American primary care patients are guided into undifferentiated, highly transactional forms of service delivery that may be cheaper but are less comprehensive in the services offered and impersonal, involving fast-food care provided through web-based apps, big box stores, and urgent care centers. These sources of care often practice their medicine according to “cookbooks” of standardized clinical guidelines using high-turnover providers, giving us fewer moments of the relational excellence so important in high-quality health care.

We also continue to lose choice as we are captured by large health care delivery systems, now turning up in most areas of the country as different providers consolidate and form de facto monopolies that force us to see only their physicians, go to their facilities, and use their labs and imaging services. This makes patients prisoners of a given health care organization. That is not real value for patients, although those very same systems will try and tell you it is, even as the prices they charge continue to rise, and the access problems get worse in those same systems of care. I tried to switch my primary care doctor recently from one large Boston-area health system to another. The new system told me that I would have a difficult time getting “referred out” to any specialists, even ones I was already seeing, in the system of which I was still a part. We keep everything in house, they told me. Good for their business, not so good for me.

A value definition controlled by insurers, providers, and big employers looking to maintain profit margins does something else bad for patients. In measuring value through the heavy use of standardized performance measures to judge their own worth to those paying them, doctors and hospitals work harder on comparing themselves to each other, which leads to gaming incentive systems that possess too many superficial and self-reported quality measures It also means providers spend less time measuring how they are meeting our unique needs, wants, and preferences as individual patients. This makes our health care feel more impersonal. It also encourages health care delivery organizations to view insurance plans, accreditors, and Medicare as their chief customers, rather than us.

Focusing on value for patients requires meaningful change in the health care industry. Large delivery systems that dominate geographic areas must be regulated more effectively to provide patients with greater choice and timely access. Provider competition needs to be encouraged, not squashed. Payers must construct flexible reimbursement approaches that reward, in meaningful ways, patient satisfaction and relational excellence between providers and patients. Right now, that’s not the case. Most importantly, patients must be activated as true consumers and force the system to be accountable to them. This accountability comes in many forms. It can involve pushing providers to be transparent about the prices they charge for different services; and then helping us to comparison shop and make decisions using that information. It can involve things other industries and a few innovators in health care use such as money-back guarantees and the use of Yelp-type ratings systems, which we control.

Of course, these things would only be a start on the road to pursuing “value” as a more patient-driven concept within the industry. But once we realize that such a vague word can mean anything we want it to mean, and that patients rather than the industry should define it, it will get easier to do.

Timothy Hoff, PhD is Professor of Management, Healthcare Systems, and Health Policy at Northeastern University in Boston, A Visiting Associate Fellow and Visiting Scholar at Oxford University, and author of the new book, “Next in Line: Lowered Care Expectations in the Age of Retail- and Value-Based Health”, published by Oxford University Press.

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Interview with Brian Yarnell, Bluestream Health

As you may have noticed, we are picking up the focus on new tech companies here on THCB. Much of this is happening as I have a little more time to examine and work with startups as I’m no longer running the Health 2.0 conference day to day. Some of it comes from our new partnership with Jessica DaMassa and her WTF.Health series. But don’t worry, we are continuing to be the place to find great opinion pieces about the health care system as a home (This is an “add” not an “instead”)

Today I have an interview about an interesting new company I’m getting to know called Bluestream Health which is essentially a second generation telehealth video platform. Brian Yarnell is the President and I spoke with him about his company, and what makes their technology different. Brian will be at the ATA conference net week (while I’ll be at Dev4Health!) — Matthew Holt

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There Are Buoys: The Real Path to Lower cost in the Coming Catastrophic Deformation of Healthcare

There are buoys, far out in the ocean, that bob in the waves and signal, through satellites, when the surf will rise at Mavericks on the California coast, or when the tsunami will hit.

Here comes.

Healthcare in the U.S. is a hollow economy, inflated, impossible, all over patches and gimcracks and work-arounds puffed up on clouds of hot air generated by sweaty, dedicated crews of policy panjandrums and podium pundits burning forests of acronyms. True, that’s just looking at the bad side. But this bad side goes all the way around.

Will it pop? Will it undergo catastrophic exothermal deformation? Is it the Hindenburg nearing Lakehurst? This could be.

Look, this is the 21st Century. Whatever its name, catastrophic deformation, restructuring, “disruption,” or “creative destruction,” this is normal for businesses, industries, entire sectors. We have talked and whined and freaked out about massive change in healthcare since we had a peanut farmer in the Oval Office, and it hasn’t happened. Not really. Trust me, I was there, I watched it not happen. Nothing like the video stores, big-box malls, and Fotomats whose husks litter the landscape like the yonquerías of Baja. Nothing like Eastern Airlines, Western Airlines (“The only way to fly”), Northwest Airlines, Pacific Southwest with its dayglo go-go-booted stews, PanAm, and all the others whose logos adorn the Electras, L-1011s, 727s and Constellations parked wingtip to wingtip in the Mojave.

Healthcare has planetary inertia, gas giant inertia. It snacks on cost-cutting schemes like DRGs and Certificate of Need commissions and just gets bigger. It downs slices of GDP — 12 percent, 15, 18, 19 — and just gets bigger. Right through recessions, reforms, budget cuts. It’s Hungry Mungry. Its extraordinary resistance to deep transformation, compared to other industries and sectors, makes us ask why. What is holding it together? And makes us ask: What would do it? What would puncture this hollow, makeshift gas envelope? 

Today U.S. healthcare at $3.7 trillion is the largest business sector in the history of business sectors. If it were a country on its own it would be the fifth largest economy on the planet. The inflation rate of National Medical Expenditures is trending up, not down. Prices make no sense. Actual prices paid for the same procedure or test can be two, three, five, even 10 times greater across town or even across the street. U.S. healthcare wastes more than $1 trillion every year on overtreatment, doing complex, expensive procedures that don’t help, are not medically indicated, are not necessary, but are well paid.

But things have changed.

In 2012 I published Healthcare Beyond Reform: Doing It Right For Half The Cost, about how we could do healthcare for everyone in the country (not just the lucky) for half or less in constant dollars, in per capita expenditures, in percent of GDP, any way you want to measure it. In 2015 I published Getting What We Pay For: A Handbook for Healthcare Revolutionaries, with more detail and specificity about how to do healthcare for everyone in the country (not just the lucky) for half or less.

I haven’t changed my mind. Maybe I’m an extraordinarily far-seeing thinker with a long time span. Maybe I’m a loony optimism junky, a contrary contrarian. I don’t know. Ask my shrink when I get one.

But here’s what I believe: Today healthcare is where the film camera industry was in 1999, six years before Kodak blew up its factories in Rochester. It’s where cars with internal combustion engines and human drivers are today, on the edge of becoming relics and special-application vehicles. In 10 years healthcare will be unrecognizable, from its therapies to its workflows, from its physical plants to its technologies and especially to its economics. Any payer strategy which brings real market forces to bear, in which buyers, payers and consumers force providers to actually compete on appropriateness, on price, and on quality as in any other industry will bring the hammer down, will collapse those lunatic price spreads and wipe out the unnecessary, wasteful practices. The result will be a healthcare economy something like half its present size serving everyone (not just the lucky).

What are the buoys? What signals?

Let’s start with a lawsuit, not because it is a harbinger of the solution but because it well describes the problem.

Last month California Attorney General Xavier Becerra sued Sutter Health, a large hospital chain in Northern California, alleging (in the words of the L.A. Times) that Sutter Health “engaged in ‘anticompetitive contractual practices’ and that it charged prices for hospital healthcare services that far exceed what the company would have been able to charge in a competitive market.”

The suit cites a 2016 study published in the Journal of Health Care Organization, Provision and Financing that showed that actual prices paid at Sutter and Dignity Health, the other largest system in Northern California, were 25 percent higher than elsewhere in the state, raking in $4000 more per admission. A report by UC Berkeley researchers issued just two months ago pegs the difference at 30 percent. According to the Times, “Becerra cited the Berkeley study, which said the average patient hospital procedure in Northern California, $223,278, exceeded that in Southern California, $131,586, by more than $90,000.”

Thirty percent higher. Ninety thousand more.

Those are big numbers. As Kaiser Health News put it in their report on the 2016 study, “Hospital chains that buy up other facilities, clinics and physician offices often tout savings and improved services from coordinating patient care and eliminating inefficiencies. The researchers found no evidence that any potential savings were being passed along to the employers, insurers and patients who pay for the care.”

No evidence.

Both Sutter and Dignity disputed every aspect of the 2016 study, according to KHN. Dignity, for instance, said “a number of factors affect its prices for commercially insured patients. It cited high labor costs, the need to pay for state-mandated seismic upgrades and the expense of treating a rapidly growing Medicaid population in California.”

Southern California, it should be noted, does not have 25 to 30 percent lower labor costs, fewer earthquakes, lower seismic standards, or fewer poor people than Northern California, nor is there any difference in state regulations. There is only one difference according to multiple studies: Market concentration.

It’s right there on the frozen juice can: Concentrate

How’s that work? Consider what you go through to buy a car, a house, a breakfast burrito, or some toenail clippers. You know what you want: A four-bedroom McMansion, maybe, within a 45 minute commute. You know roughly how much you are willing to pay: No, I won’t pay $400 for toenail clippers. Don’t be silly. Or even $15. A couple of bucks, tops. You know or can easily find out what different places will charge for that car, locally or online, however you want it. There are plenty of places willing to supply what you want. Nothing constrains your choice. It’s perfectly legal to pick up that breakfast burrito at any of a dozen different places along your commute route.

That’s how capitalism is supposed to work. The end user makes (or at least influences) the choice, has options to choose between, and has plenty of information to power that choice. Buyers with choice, options, and information: Constrain any one of those and costs can go kablooey. Market concentration allows the seller to constrain all three.

How’s that work in healthcare markets? It’s complicated, but here’s the 101-level 411. Health systems do have a lot of Medicaid patients, Medicare patients, and “dual eligible” (Medicare + Medicaid). These two often account for a majority of charges (though not necessarily a majority of patients, because the Medicare patients are older and the Medicaid patients often sicker than average). Then they also have the private pay patients, with Blue Cross or other insurance. And some that fall outside all of those systems. Most big employers are “self-funded,” that is, rather than pay an insurance premium they pay the actual costs of their employees’ medical care—but they still pay through the insurance company at the rates the insurers are able to negotiate.

Typically, reimbursement for Medicaid patients are thought to come in at something like the system’s costs (though not the cost to produce any particular baby, tumor excision, or valve replacement, since most systems do not know their “total cost of ownership” of any particular product). Private insurance pays considerably more, and Medicare somewhere in between. Medicare and Medicaid reimbursements are more or less dictated by the federal and state governments, respectively.

Choose your strategy

So a healthcare system has a strategic choice to make. Some take the hard way. The combination of Community Medical Centers and Santé Health Foundation is centered in Fresno, California. It has a territory that somewhat overlaps that of Sutter, and it has a higher than usual concentration of Medicaid patients and uninsured, especially the agricultural workers of the Central Valley. CEO Tim Joslin will tell you (as he told me) that a decade or more ago they set a goal. If they were to survive they needed to get all of their actual costs low enough that they could survive at the Medicaid reimbursement level.

This is long and difficult work. He says they have more or less accomplished this, which has allowed them to grow, to add more services, open new departments, new clinical lines, to serve the people of the Central Valley better.

Others take the opposite path: “If we are to survive, we have to grow so that we have really significant market power throughout our area and can charge higher prices to the private payers: the insurers, employers, unions and pension plans.”

Look at this from the point of view of the insurer, in effect the buyer’s agent. You are selling people access to doctors, clinics, hospitals, and other medical services. In order to compete, you have to put together networks of such providers in every area that you cover. In some counties, you just can’t do that without one or both of the biggest chains of providers. So you say to one of these big chains, “Let’s negotiate so that we can include these particular hospitals and these medical practices in the network that we can offer our customers.” But the big system says, “No, if you want those, you have to contract for our entire system, every service, even in areas where we have more competition. And you have to not include anyone who might undercut us. That’s the deal, take it or leave it.” And the other big chains say the same thing. It’s “all or nothing.”

So you’re stuck. You can offer your customers access to medicine, but not the power of choice and options to exercise that power. Nor can you offer them information. Such contracts often include “gag clauses” specifically designed to prevent the buyers or end users from knowing how much a procedure or test is going to cost, let alone attempting to negotiate a price.

So the seller (the big medical chains) can constrain your ability to choose, the options you have to choose among, and the information you might use to do the choosing. And the market fails. There is no way for the buyers and sellers of healthcare to discover what is the true “market price.”

Wasn’t Obamacare supposed to keep costs down? The core strategy of Obamacare was (and is) to promote competition between insurers: Get more insurers fighting for market share. They win by putting together networks of medical providers and services who are willing to work for less. You can’t do that when the medical providers bulk up and say, “All or nothing.” The core cost-cutting strategy of Obamacare was wrongly conceived.

The battle cry for the healthcare industry all this time has been “value purchasing,” that is, “We need to allow the customer to buy on value.” What a concept, like the title of my book, we could “get what we pay for” in healthcare. But the action has mostly been confined to lip service. The actions of the industry have mostly been to fiddle around with little doodads and folderols like quality payments forced on them by the federal government (which can amount to a few percentage points of total payments) while consolidating massively to keep their prices up, rather than offering real competition between providers on price and quality, offering customers an array of options with an array of prices, the legal and practical ability to choose between them, and the information they need to make the choice. 

The Shape of the Wave

What is the shape of this tsunami? What are the signals we are getting from the buoys?

  

Angry consumers: With deductibles climbing ever higher, even insured consumers are taking more of the burden. Getting billed $937 when you take your tot’s bleeding “this little piggie” toe cut to Emergency, you get angry, aware, and open to new solutions. And this repeats over and over, every day, all across the land, to pretty much every consumer and every voter.

Damaged ACA: The Republicans eight-year drive to “repeal and replace” Obamacare evaporated with a whimper. But they are still managing to bite big chunks out of it by removing the penalty for not having insurance and other administrative changes, all of which tend to drive healthy people out of market and leave it increasingly to the older and sicker. This drives up the insurance costs for those who stay insured. With fewer healthy people signing up, we will see premiums and deductibles continue to go up by double digits every year. Again, voters get angrier and open to anyone who is promising new solutions.

Smart politicians: Beating up on Big Med is becoming politically smart again, as in Becerra’s suit. We will see more legal actions like California’s, and other political attempts to outlaw “all or nothing,” gag rules, and other specific anti-competitive practices that make consolidation so profitable for medical providers.

Angry employers: In 2014, the year Obamacare came into play, some 21% of employers said that rising healthcare costs were a big problem for their business. By last year that had risen to 44%. That’s a big rise in three years. These big buyers are increasingly fed up. They are not idiots, they know that they are being played, and they are increasingly aware that they, too, have market power. Did you wonder what Amazon, Berkshire Hathaway and JP Morgan Chase meant when they announced a few months back that they are forming a new business to build their own healthcare system? This. They will have the market power to go directly to medical services in the markets in which they have a lot of employees and say, “You want these tens of thousands of cases? What will you bid?”

They can use strategies such as reference pricing, bundled payments and medical tourism to force medical providers to compete on price and quality. If you’re a big employer in Alameda County, California and your employee needs a new knee, the average cost to you works out to about $52,000. Promise the employee a $2,000 bonus, no co-pay, all travel costs paid, and a free week’s vacation while recovering on the beach in Los Cabos, Mexico, and the total cost to you the employer will be something like $15,000. Because the cost for the total knee replacement at H+, the best hospital in Los Cabos, is about $9,500 all in.

In creating real competition, big buyers are good, bundles of big buyers even better. But won’t this only serve those big employers? Won’t the medical systems just carve out special deals for them and go on their merry way raising prices on everyone else? No. Here’s why: There is a problem for hospital systems treating these deals as one-offs and loss leaders, because these are typically their most profitable cases. And if the strategy works for the biggest employers and bundles of buyers, others will flock to the strategy, consultants will set up shop showing them how to do it, new combines will be born, and soon the hospital systems will find that they have to compete on the same basis for a significant chunk of the most profitable cases.

When that happens to you, you can’t treat these as one-off deals, you have to change your whole pricing structure. To change your whole pricing structure you have to seriously engage in the long, detailed, life-changing struggle to drive down your own internal costs. The changes you have to make to really get your costs down are systemic. It is not possible to change your workflows and technologies just to accommodate just some specific customers. You have to make your whole system more efficient.

New market entrants: Pissed-off customers and big buyers are already attracting new providers that do business in different ways. This includes new primary chains such as Xoom, Iora, One Medical, and Chen Medical; super-primary chains such as ReadyMed which offer some services such as emergency services, infusion and overnight stays, that go beyond primary care; free-standing Emergency Services that do the same, and other types of specialty services with standing advertised bundled prices and warranties (“We’ll do it until it’s done right.”).

This is why we are seeing OWAs (other weird arrangements) unlike any we have seen before, such as the merger of CVS and Aetna, of Wal-Mart and Humana, of CIGNA and Express Scripts. These are all attempts to break up the market differently, to penetrate the economic wall.

Your own medical record, real, digital and free: We have been building digital systems in healthcare since the late 1980s, and the entire industry has been mandated to digitize since 2009. In all that rush to digitize the legacy healthcare IT companies have done everything they can to help the healthcare providers make all that information—including your medical records—unreadable by anyone else, all as part of their strategy to build and keep market share. Since 1996 by federal law you must be given access to your medical records on demand. Since 1996 the major industry practice has been to impede that access every way they can by delivering them only on paper (You ever wonder why healthcare is the last bastion of the fax machine? This.), in coded language that is unintelligible not only to you but even to other doctors, and in ways that cannot be searched by other medical practitioners.

That’s toast. The Trump Administration, which so far has not brought a single action to help consumers and has done everything it can to reverse previous administrations’ rules, is to the amazement and wonder of all bringing out the whoop-ass on this one. Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, showed up at HIMMS, the massive 40,000-person healthcare IT conference in Las Vegas last month, to announce that by January 1, 2019, every medical entity has to build the necessary interface so that you can download your medical records, written to industry standards and in language you can understand, any time you want to. She was introduced by Jared Kushner, then backed up by the Health and Human Services Secretary Alex Azar in a speech elsewhere.

Every entity. By next January. All other information-sharing rules under HIPAA are “may share” rules. This is the only “must share.” Unless the “Fox and Friends” morning hour policy gurus find a way to rail against this policy change and blame it on James Comey, this is going to happen.

Here’s the kicker: The federal medical privacy law (HIPAA, the Health Insurance Portability and Accountability Act of 1996) applies to all “covered entities” such as hospitals, doctors, and insurance companies. You are not a “covered entity.” It’s your medical record, your privacy, and you can do what you want with it, including giving your records to some competitor of theirs, a different insurance company or healthcare system across town or across the country. Such full information is so valuable to insurers to help guide your care less expensively (such as guiding you into a diabetes program or a prenatal program) that they may well pay you to give them full access to your records. System X has never shared information with System Y, but they both have to talk to you, and you can say, “Here you go. Take my information, please.” And the information walls in healthcare come tumbling down.

New tech: When you talk about the future of healthcare, people tend to think about new technologies, such as robotics, blockchain, artificial intelligence and machine learning, and the array of gadgets and implants that can connect the patient to the system in real time. Won’t these make the system more efficient and lower costs? Yes, absolutely, when the industry gets really focused on being more efficient because an enlivened market forces them to.

Not news

This is the path to lower-cost, higher-quality healthcare.

Why not just force the cost down by law? Single payer, or nationalized, or whatever, just say, “Stop that!” Because it doesn’t work. Lots of reasons and mechanisms, but see the above, look at the history of Hungry Mungry. Coercive laws, cost-cutting schemes, codifying reimbursements under Medicare, over and over again turn out to not be really coercive. Market forces are coercive. If the market finds ways to say, “Give us a better price or we will take our business elsewhere,” there is no argument, no lobbying, no rule-making that can stop it from forcing you to get better, faster, and cheaper at what you are doing.

Here’s something funny. None of this is news to the people who run these big systems. They are no dummies. They can see it coming. The CEOs and strategy teams of medical systems will acknowledge this in private. Their current strategies are delaying actions. They’re trying to build their market power, their capacity, and their financial reserves, against the inevitable. I asked one CEO when he was going to reduce the prices in his imaging center, which were four times the prices of the imaging center right across the highway. He said, “When I don’t get the volume.” When the market brings the hammer down. When the tsunami hits. When the metaphor of your choice collapses the hollow healthcare economy.

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State Employee Health Plans Key for Driving Value-Based Initiatives

2018 has brought renewed attention to high and rising employer health care costs, especially among employees. Teacher strikes across the country, motivated in part by rising health costs that have essentially canceled out small yearly raises, demonstrate the impact of these cost increases, which impact workers in all sectors of the economy. Over the last five years, the employer share of health care costs for family coverage increased by 32%, while employees’ share increased 14%. Average premiums have almost tripled since 2000.

Taking action is imperative. However, no single group can drive change of its own, not even giants like Amazon and JP Morgan. The total number of employees at most organizations represents a very small number of the commercially insured population. A critical mass of employers is needed to drive change, and should include an often overlooked and underused group: state employee health plans.

State employee health plans are frequently the largest commercial plans in the state; in 18 states, they cover more than 10% of the privately-insured population. Their members are often spread across the state, giving the plan a footprint in every major market. State employees have than double the median tenure of private sector employees and are often insured through retirement, making it more financially viable for the state to make long-term investments in employee health. States often have regulatory flexibility to try new initiatives, and their transparency requirements allow state employee health plans to signal to the market their future direction and leverage publicly shared information in negotiating reforms.

As state funded plans, they are also under pressure to run efficiently, with many succeeding. Nevada’s plan runs almost 10% leaner than comparable commercial plans while still reimbursing providers competitively. While running a lean plan limits some plan flexibility and management options, it offers an example for how plans can operate at the lowest possible cost.

States run leaner plans in part through initiatives aiming to bring more value to health care, improving care and controlling costs without cutting benefits or sacrificing quality. Though many plans are new to value-based initiatives, recent research outlines the variety of value-based approaches state employee health plans are already taking to modify benefits and payment methods. Though results are early, the breadth of initiatives shows that regardless of a plan’s priorities, administrators can find and develop initiatives that work for them.

California and Nevada have lowered costs for services like joint replacement surgeries and specialty prescription drugs by using reference pricing initiatives that set maximum prices for procedures and charge enrollees the price difference if they select a more expensive provider. This echoes work throughout the private sector showing that reference pricing—and further negotiation when necessary—can lower prices for “shoppable” services that are available from multiple providers and are easily comparable, especially when implemented by large numbers of plans.

State employee health plans are also pursuing initiatives that encourage enrollees to pursue low-cost, high-value care. Massachusetts’ Group Insurance Commission (GIC) provides incentives for their members to use higher-value providers or narrower networks. Since 2005, the state’s Clinical Performance Improvement program has used quality measures and cost-efficiency scores to sort specialists into tiers, incentivizing enrollees to see the highest-value physicians by offering lower co-pays. The state also offered to pay three months of premiums if an employee switched to a plan with a smaller network. Eleven percent of enrollees did, saving anywhere for $268 to $956 per employee per month.

For these programs to work, employees need access to information about the cost and quality of different providers. Next year, Nevada will implement Healthcare Bluebook, an online transparency tool that will list costs and provider ratings, and the program will issue checks to enrollees who select high quality, low-cost services.

State employee health plans have also seen success through collaboration. Tennessee’s state employee health plan and the state’s Medicaid program, which together cover 26% of the state’s population, partner on a bundled payment initiative that has reduced costs for several common procedures and that will expand to as many as 75 procedures by 2020. Similarly, the Washington state employee health plan collaborates with other payers through the Bree Collaborative to identify new care models that could be implemented by multiple payers; the state plan recently implemented a bundled total joint replacement surgery model and negotiated with major practices in the state to use it.

Obviously, adopting value-based payment models is easier in theory than practice. State employee health plans must identify specific priorities and implement targeted strategies that play to their strengths and their markets. Results will differ based on patient population, geography, and other factors. Plans must also balance concerns from elected officials and employee unions and seek state government support for change.

The assets that state employee health plans bring in pursuing value-based initiatives still outweigh these limitations. They are critical players and collaborators in the effort to drive health system transformation. Their ability to develop new initiatives and collaborate with peers creates a better environment for all purchasers to bring costs under control and improve quality and outcomes, giving these initiatives the best chance to succeed.

Mark Japinga is a Senior Research Assistant at the Duke-Margolis Center for Health Policy

Damon Haycock is Executive Officer of the State of Nevada’s Public Employees’ Benefits Program

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Check Out The RWJF Opioid Challenge Semi-Finalists!

The opioid crisis has devastated countless families and individuals across the United States and abroad. What once started as a quiet concern has become a full-blown epidemic, requiring the full support and attention of the healthcare and tech communities to address it.

From the Surgeon General’s August 2016 letter on Opioid Addiction:

“I am asking for your help to solve an urgent health crisis facing America: the opioid epidemic. Everywhere I travel, I see communities devastated by opioid overdoses. I meet families too ashamed to seek treatment for addiction. And I will never forget my own patient whose opioid use disorder began with a course of morphine after a routine procedure.”

Those affected by substance misuse need support catered to their specific needs and resources to empower them on the path to recovery. To answer that call, the Robert Wood Johnson Foundation and Catalyst @ Health 2.0  teamed up for the  RWJF Opioid Challenge, an innovation challenge intended to highlight technology-enabled tools that can help support and connect individuals affected by opioid addiction.

The recovery process can be complicated and stressful; not only for individuals, but also for their family, friends, and the people around them. Issues with communication, education, mindfulness, support, and others are all avenues that can be addressed by innovative and pioneering technologies.

One hundred teams submitted their applications to connect those affected by opioid misuse to the support and resources they need. An evaluation process was conducted with the help of our panel of expert judges and 5 of the most innovative, user-friendly, and scalable solutions were selected to advance as semi-finalists.  Each team’s solution attempts to address the crucial need for personalized and accessible health care. Here is a bit about each of the unique solutions:

  • Hey, Charlie – Hey,Charlie is a mobile behavioral modification platform to help individuals in recovery rebuild their social environments and create more individualized and comprehensive recovery strategies.
  • Resilience IQ (ResQ) – ResQ promotes resilience to relapse by mobilizing an individual’s social support network with precision to intervene using proven techniques when their help is needed the most.
  • Luceo/Canary App – Canary reduces the occurrence of fatal overdoses by providing an alert of a person’s sustained inactivity following a dose of opioids so that they may receive naloxone and medical intervention.
  • Sober Grid – Sober Grid is an iOS/Android app designed to help people recover from drug and alcohol addiction. Using evidence-based modalities, Sober Grid provides a supportive community of over 110,000 members.
  • HashTag – A wearable device to detect opioid overdose and a mobile application that notifies overdose condition, assists in saving the user and helps in creating awareness about ill effects of opioid.

In Phase II, three finalists will be selected to participate in a live pitch competition, and be evaluated in real time by onsite judges at the 12th Annual Health 2.0  Fall Conference. The winners will be awarded prizes and several promotional opportunities to showcase the top-ranking solutions and gain visibility in the health tech space. The third place winner will receive $10,000, followed by the second place winner with $15,000, and first place will win the grand prize of $50,000.  

For further updates on the semi-finalists of the RWJF Opioid Challenge and other programs, subscribe to the Catalyst @ Health 2.0 Newsletter, and follow @catalyst_h20 on Twitter.

John El-Maraghy is a Program Associate and Chanly Philogene is an intern at Catalyst @ Health 2.0.

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APIs: A Path to Putting Patients at the Center

I remember when visiting a city required paper maps and often actual guidebooks. Today, I tap on a map app on my phone, enter my destination, and review options for getting from point A to point B. In recent years, these applications have expanded to integrate ride-sharing, bike-sharing, and public transit information. Map apps provide two key real-time data points to help me compare the different options: the time it will take to get to my destination and the cost.

Behind those data points are elegant algorithms that analyze traffic patterns and conditions, as well as the real-time data exchange between multiple apps through modern, REpresentational State Transfer (RESTful) application programming interfaces (APIs). What makes our smartphones so powerful is the multitude of apps and software programs that use open and accessible APIs for delivering new products to consumers and businesses, creating new market entrants and opportunities. There is nothing analogous to this app ecosystem in healthcare.

ONC’s interoperability efforts focus on improving individuals’ ability to control their health information so they can shop for and coordinate their own care. While many patients can access their medical information through multiple provider portals, the current ecosystem is frustrating and cumbersome. The more providers they have, the more portals they need to visit, the more usernames and passwords they need to remember. In the end, these steps make it hard for patients to aggregate their information across care settings and prevent them from being empowered consumers.

Just as consumers can see the time to destination and costs using their map apps, they should be able to see quality indicators and costs of their care. As Health and Human Services (HHS) Secretary Azar recently stated, “putting the healthcare consumer in charge, letting them determine value, is a radical reorientation from the way that American healthcare has worked for the past century.” I certainly recognize that issues around pricing for healthcare services and measuring quality are complex, but I am confident that ONC’s efforts will complement new policies across HHS to encourage transparency, leverage Medicare and Medicaid to drive value-based transformation, and reduce regulatory burden on the health system.

As part of ONC’s role in coordinating health information technology (health IT) nationally, we are working with innovators to develop modern APIs that support the use of mobile apps to help individuals manage their own health or the health and care of a loved one. A robust health app ecosystem can lead to disease-specific apps and allow patients to share their health information with researchers working on clinical trials to test a drug or treatment’s efficacy, or monitoring outcomes like those in the National Institutes of Health’s All of Us Research Program.

ONC took a practical step to accelerate the use of APIs in healthcare with the 2015 Edition of the certification criteria adopted as part of the ONC Health IT Certification Program. Specifically, the 2015 Edition includes updated technical requirements that were not available in the prior edition and—to the benefit of the provider and the patient—to support further innovation in APIs and interoperability-focused standards. The 2015 Edition includes “application access” certification criteria that require health IT developers to demonstrate their products can provide application access to core medical and patient information via an API.

The 21st Century Cures Act (Cures) builds on ONC’s 2015 Edition and calls for the development of APIs that do not require “special effort” for developers to access and exchange health information. ONC will address this requirement through rulemaking expected to be issued later in 2018. Ensuring that APIs in the health ecosystem are standardized, transparent, and pro-competitive are the central principles guiding our work. These goals should allow new business models and tools that will expand the transparency of all aspects of healthcare. New tools should allow patients to comparison shop for their healthcare needs like they do when hailing a ride.

In recent years, the health IT industry has made positive strides. The HL7 Argonaut Project, a private sector initiative, has been developing a core set of Fast Healthcare Interoperability Resources (FHIR) implementation specifications. These specifications will enable expanded information sharing for electronic health records and other health IT solutions based on modern computing standards (i.e., REST, Javascript Object Notation (JSON), and FHIR). Boston Children’s Hospital Computational Health Informatics Program and the Harvard Medical School Department for Biomedical Informatics have been leading the development of SMART Health IT, an open, standards-based technology platform that already is showing success in enabling innovators to create apps that seamlessly and securely run across the healthcare system.

The convergence of these actions, the new authorities granted to ONC by Congress in the Cures Act, and efforts by HHS, the Centers for Medicare & Medicaid Services (CMS), the National Institutes for Health (NIH), and the Veterans Administration (VA) with the MyHealthEData initiative are helping promote more consistent data flows, inject market competition in healthcare, and return individual control of their care to the American public.

Don Rucker, MD is National Coordinator for Health Information Technology

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