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6 posts from October 2010

October 29, 2010

David Harlow will be a keynote speaker at the 14th Annual Healthcare Internet Conference, November 15-17, in Las Vegas

I will be speaking on the legal issues surrounding health care social media at the upcoming 14th Annual Healthcare Internet Conference

Some health care executives are concerned that involvement with social media on behalf of their organizations can lead only to ruin: HIPAA and malpractice liability, employment issues and other concerns lead many providers to ignore social media entirely.  Well, as I'll be explaining at the conference, the lawyers don't always say no, and there are a number of good reasons to get involved.  Health care providers that do not have a social media presence (yet) should all begin to monitor online channels, including social media channels, to learn what is being said about them -- so that they can begin to respond in real life (IRL).  Before jumping into it all, however, it is important for health care providers to understand what they're getting into, how to do it in a manner that will fit in with their existing organizational culture, and how to protect themsleves from potential liability and exposure.

At this juncture, all health care providers should be interested in learning how to utilize social media tools, since in order to qualify as an ACO, or Accountable Care Organization, a health care organization must demonstrate the ways in which it promotes patient engagement.  The social media toolkit will be a key component of any health care organization's patient engagement strategy.

If you will be at the conference, please let me know.

If you would like to arrange for a similar presentation at your institution or association, or a facilitated retreat for key stakeholders to kick-start a social media initiative, please contact me.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


October 27, 2010

Health and Hospital Law: MCLE Basics Plus on November 9 and 10

On November 9 and 10, Massachusetts Continuing Legal Education presents its annual two-day health and hospital law extravaganza, featuring an all-star faculty.  I am honored to be part of this august group once again.

If you are in the Boston area and are interested in attending this program, I am giving away one free pass to the seventh person who provides the correct answer to the following question, by tweeting it to me -- @healthblawg:  Who is the Administrator of the Centers for Medicare and Medicaid Services and what is the pithy catchphrase he uses to refer to his vision for reforming the U.S. health care system?

David Harlow
The Harlow Group LLC
Health Care Law and Consulting


October 25, 2010

Connected Health Symposium 2010

I attended the Connected Health Symposium last week in Boston. I enjoyed many of the sessions (sometimes wished I could have attended two simultaneously, though the livetweeting helped on that front), and as usual enjoyed the hallway and exhibit floor conversations too.  As is often the case at conferences these days, I had the opportunity to meet several on-line connections in real life for the first time. 

(I will not attempt to give a comprehensive report of the symposium here; please see the livetweeting archive linked to above and other reports to get a sense of the rest of the event.)

This year's exhibit floor included a diverse mix of distance health tools.  Most striking from my perspective was the fact that most of these tools do one of two things: Enable patient-clinician videoconferencing, or upload data from in-home monitoring devices.  The best of the second category also trigger alerts resulting in emails or PHR/EHR alerts to clinicians if vital signs are out of whack, or phone calls to consumers or their caregivers if, for example, meds aren't taken on time (one company had a pill bottle with a transmitter in the cap that signals when it's opened; another had a Pyxis-like auto-dispenser, that looked like you'd need an engineer -- or a teenager -- to program it).  One tool -- Intel's -- seemed to combine most of these functions, and more, into one platform, but it's barely in beta, with only about 1,000 units out in the real world.

The speakers this year seemed to return again and again to several major themes: (1) Is any particular connected health solution scalable? (2) Who will pay for connected health, or mobile health (mHealth)? and (3) Does it work?

These issues are, of course, interconnected.  With the current ACO (Accountable Care Organization) feeding frenzy, and expectations of health reform's full implementation as background, there was a palpable sense, or hope, that all this health-tech-geeky goodness will be snapped up by the ultimate payors for health care. 

Who the ultimate payors are depends on your vision of the future.  Is it health care providers, who will be squeezed by bundled payment demos and mainstream Medicare payment changes coming down the pike under the Affordable Care Act?  Providers have an incentive to save more money than they'll be losing through payment reform under the ACA (and perhaps even the implementation of the SGR [link is to a post on the subject from over a year ago; Congress still hasn't faced the music]-- the latest "doc fix" is slated to expire after the election and fall in the laps of the lame duck Congress).  Is it health care insurers, who are being squeezed by state regulators?  Consider, for example, the recent Massachusetts experience with the Connector -- the model for state insurance exchanges -- and the governor insisting on limited rate increases, with the dispute ending up in court.  Is it premium-paying or self-insured employers?  Is it consumers, or patients?

In addition, the future of ACOs and the rest of health reform implementation is a little unssettled, to say the least.  The law has been thrown to the courts in a series of constitutional challenges, and will be thrown to a new Congress in January.  So even if an investment in some of these systems could eliminate a significant chunk of a physician practice's overhead expense, who's going to invest those up-front dollars right now?

Some of the pricey hi-tech solutions raise my perennial question as well: How many childhood vaccines could we buy with that money?  Roni Zeiger of Google Health tweeted a similar comment attributed to Bill Gates during a presentation on genome sequencing: "I'll get my genome sequenced after we cure the top 20 infectious diseases."

In short, there is recognition that some connected health tools can have a positive impact on health status of individuals and populations, but the key questions center on the cost-effectiveness of those interventions.

One speaker, B.J. Fogg, of the Standford Persuasive Technology Lab, said: "Many crummy trials beat deep thinking," encouraging folks to continue to throw stuff against the wall and see what sticks.  I would take issue with this approach.  For example, the home monitoring devices I described above only upload data to their own proprietary software.  Only one vendor (Intel) seemed to be close to designing an interoperable interface to standard PHRs.  It seems to me that this is a key feature of any such system, and the sooner the vendors adopt this thinking, the sooner they will be able to demonstrate the utility of their products and grow their markets.

On the "Does it work?" front, many speakers addressed the issue of behavior change.  All of the tools discussed at the symposium are, in essence, intended to make change in personal behaviors easier to accomplish.  While much of the behavior change discussion was laced with paternalism, it had, at its core, a remarkable patient-centered orientation.  This orientation was emphasized by a discussion on process and outcome measures of the future, to be used as a means for calculating incentive payments to health care providers.  One speaker insisted that the most useful measures will be patient-centric measures: patient satisfaction, patient compliance, etc.  The difficulty lies in reaching the point where patient and consumer behavior is being changed appropriately. 

This raises the question: How do we reach consumers?  What incentives will people resond to?  What options do we need to present to individuals, and how?

Sheena Iyengar delivered a terrific keynote on choice, making the point that in our society we have too many choices -- about everything: breakfast cereal to jam to mutual funds in our retirement plans to Medicare Part D plans.  Research shows that the optimal number of choices to lay out before human beings is 7+2, and that more choice results in no choice at all being made -- no mutual funds selected for retirement, no Medicare drug supplement plan selected to help with prescription medication costs.

Kevin Volpp, from the UPenn Leonard Davis Institute Center for Health Incentives, spoke about how we do, and can, incentivize healthy behaviors, noting that many accepted approaches are shown through research to be ineffective -- e.g., posting calorie counts on menus, CDHPs, reducing copays.  One interesting positive note: lotteries can improve compliance with healthy behaviors in a cost-effective manner.  Volpp gave a compelling example of a medication compliance study that increased compliance by giving compliant patients the chance to win money in a lottery if they took their meds.

Overall, there was consensus that the reason we don't have all the latest tech available in service of health care is that the economic model for health care in this country is broken, thanks to skewed incentives based on the fee for service model.

To me that seems to be too facile an excuse, explaining only the failure of health care providers to adopt these tools on their own initiative.  Gary Gottlieb, CEO of Partners Healthcare addressed one plenary session and emphasized that the work of the folks in the room was critical to the success of Partners -- precisely because of the cost-saving potential of the solutions at various stages of development.  This is of critical importance to Partners as it seeks to prepare for success as an ACO and, more broadly, for success in a market less willing to see things its way than in the past.

Ultimate payors have always had the incnetive to improve health care processes and outcomes, and they are getting more and more sophisticated about it.  ACO's may be the latest (provider-centric) frame for the discussion, but the (ultimate payor-centric) patient-centered medical home frame has been around for a while, and may even prove to be a key engine for ACO success.

Back to patients. The key to success in transforming health care in this country is patient engagement, so patient-centered care, delivery of information to patients, and the enabling of patient community are the goals that health care providers and their connected health vendors need to focus on.

The concluding presentation from Joe Kvedar demonstrated that patients are more likely than we may expect to prefer interacting with computers vs. people in certain circumstances.  As symposium participants struggled with the challenge of scaling their solutions, this insight provided some comfort.  In an earlier session, Adam Bosworth described his goal for Keas as broader than scaling an individual solution.  He hopes to have his company's service act as a platform for other developers' applications -- creating an ecosystem for health apps benefiting individuals and underwritten by the ultimate payors for health care (in Keas' case, employers).

Scaling, payment, utility -- several of the challenges lined up opposite the connected health community.

All in all, this year's Connected Health Symposium showed that the potential exists for (lower case) meaningful use of a whole heck of a lot of tools and toys.  The challenge is to execute on this potential.   

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

October 13, 2010

Massachusetts State Rep. Ruth Balser speaks with David Harlow about health reform, the Massachusetts experience, and potential implications for the federal effort

The Massachusetts health reform experience is often cited as a model for key aspects of the federal health reform law - the Affordable Care Act.  To gain some insight into the origins of the Massachusetts health reform law, and to explore current experience with implementation, I spoke with Rep. Ruth Balser, a legislative leader and supporter of the health reform laws in Massachusetts.  

The audio file of my interview with Rep. Ruth Balser (about 25 minutes long) is available for listening or download

A full transcript is at the end of this post (and in the linked Massachusetts State Rep. Ruth Balser interview transcript).

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

HealthBlawg :: David Harlow’s Health Care Law Blog

Interview of Massachusetts State Representative Ruth Balser

October, 2010

David Harlow:  This is David Harlow on HealthBlawg, and I have with me today Representative Ruth Balser, a state legislator in Massachusetts.  Representative Balser is a clinical psychologist by profession.  She’s a former Alderman in the City of Newton, Massachusetts and a leader in Massachusetts when it comes to health reform.

She’s a state house veteran.  She’s been on Beacon Hill for over ten years and has held leadership positions in the state legislature in various key committees and has been a prime mover behind Massachusetts health reform legislation.

Representative Balser, thank you very much for joining us today on HealthBlawg.

Rep. Balser:  Well thank you.  I’m happy to be here.  Thank for that nice introduction.  I think it’s more fair to say that I was one of a number of people who supported health care reform efforts.  The leaders at the time of course were the Speaker of the House at the time and the Senate President and the Governor, but I was a committee chair on the Joint Committee on Mental Health and Substance Abuse at the time.  I did pay particular attention in fact to protecting mental health and substance abuse within the health care reform efforts.

David Harlow:  Yes.  So that’s often an area that is ignored or left behind or gets short shrift in the discussion.

Rep. Balser:  Right.

David Harlow:  I wanted to start off with a question about how the legislation in Massachusetts came to be.  How it came to focus on access.  There are really three key issues that people keep talking about, the three-legged stool of health reform:  access, cost, and quality.

A decision was made early on in Massachusetts to address access first.  I’m wondering why did we start there?  How are we doing in terms of addressing access and also the other areas of cost and quality?

Rep. Balser:  The fact that we focused on access had to do with reapplying for a Medicaid waiver to the federal government.  We actually had to address access in reapplying for the Medicaid waiver, in my memory, so that became the initial, really financial reason for addressing the access issue.

But once the state embraced that, it really did embrace it.  There was a shared goal on the part of the legislature and the governor to try to get as close to 100% health insurance coverage as possible.

We’ve been really successful.  We have 97% of the people of Massachusetts who have health insurance plans.  I believe we lead the nation.  I believe that’s the best rate across the country.  So from that point of view, our efforts were tremendously successful.

David Harlow:  So that was based on the legislation in 2006 that’s led to that rate of coverage which I very believe that is the highest rate nationally.  And then there was another bill two years later that was intended to address cost and quality issues as well.  How has that bill been implemented?  Or what can you say about that?

Rep. Balser:  Well, first of all, there were some quality issues which we addressed in 2006 as well.  We can get back to that a little later in the conversation if you’d like.  And the more recent legislation on cost which we actually also just did this session.

In 2010, we just did some cost measures but I think it’s agreed that it’s only the beginning.  I think there’s a pretty universal agreement that the rising cost of health care is the biggest challenge that we face.  There’s a lot of discussion about trying to grapple with that going into next session.

There were some market reforms this past session.  For instance, allowing small groups, small businesses to associate in groups which might help bring down the cost.  The governor actually did some capping of rates.  But I think it has been agreed in Massachusetts that we’ve been much more successful on the access side so far than on the cost side.

David Harlow:  Yes.  So in the small group reform legislation, there were some provisions that also address moving in the direction of bundled payment rates.  It’s really sort of, from my perspective, it looks like baby steps in that direction.

Following up on some of the agency and legislative hearings and reports that were issued over the past year, how do you think that will be going?  Do you see that as a direction that we need to move in - the bundled payments?

Rep. Balser:  Well, I guess to be frank, I haven’t weighed in on a particular strategy yet.  I think first of all, your reference to baby steps would be agreed.  I think people at the legislature know that they’ve only just begun to tackle this.  I know if you listen closely to the gubernatorial race that’s going on, there’s debate going on about payment reform which I think will be the hot topic next session.

One of the reasons why our health reform of 2006 was as successful as it was and why passage was so much easier here in Massachusetts than what happened nationally, was because all the stakeholders were brought to the table.  The insurers, the providers, consumers, and legislators all came together and developed a plan which eventually they could all buy into.

I think what’s going to happen - that has not yet happened on the payment issue.  I think that’s what’s going to have to happen next.  There’s going to have to be some real leadership in pulling together the stakeholders.

Right now, you have a blame game going on with the insurers blaming the medical community, and the medical community blaming the insurers.  I think we are going to need to see some kind of process similar to what happened a few years ago when everyone came to the table and reached a plan that they could all buy into.

David Harlow:  Is there a need, do you think, for an external crisis?  You mentioned in ’06, the issue was a deadline for getting a Medicaid waiver from federal government.  Is there some external crisis or are we in the presence of one already given the cost?

Rep. Balser:  I’m not aware of something analogous to the Medicaid waiver but yes, I think everyone agrees we’re in the middle of a crisis.  I think the cost of healthcare is unsustainable.  It’s breaking government.  I mean at the municipal level, you hear about it.  At the state level, you hear about it.  Small businesses complain that it’s breaking them.  It has a huge impact on the economy.  So I think there is definitely a sense of crisis.  Although there isn’t a deadline they way there was and I guess that was helpful.  It’s always helpful to have a deadline.

David Harlow:  Sure.  So one deadline that recently came and went was the end of the federal and hospital fiscal year and that seems to have brought the dispute between Boston Medical Center and the state forward, and resulted in some resolution.  I don’t know if that’s going to be a final resolution or how it affects other hospitals and their debates with Medicaid.  But there’s some additional federal Medicaid money now available for Boston Medical Center, Cambridge Health Alliance.

It seems to me that’s not a sustainable way of addressing these issues with stop-gap additional funds.  Do you have any sense about that being a step in the right direction?  Impetus for more structural change?  Or what can we take away for other providers from this experience with Boston Medical Center?

Rep. Balser:  You know, I’m not such an expert on that, but I think what everyone’s talking about is payment reform.  That’s the news: changing from fee-for-service to global payments.  That’s one thing.  Well actually that’s one thing Governor Patrick is talking about.

Then you hear candidate Charlie Baker talking about transparency.  He’s talking about just revealing the different payments that insurers and different provider groups are negotiating.  He’s saying that if you just laid all that out on the table, that would lead to some change.  Part of it is what’s going to make a difference is who’s elected governor which we’re in the middle of the campaign about.

David Harlow:  Now Charlie Baker, a couple of decades ago, was involved in working to dismantle the rate setting structure in Massachusetts.

Rep. Balser:  That’s right.

David Harlow:  Do you see his current stance as being consistent with that?  Is transparency going to be there just for the goal of developing more of a market for health care?

Rep. Balser:  Well, I’m certainly a supporter of the governor, so I don’t know if I’ll give a fair- but I think you’re right.  He was part of breaking that down and that certainly has contributed to the problems that we’re facing.

David Harlow:  So I take it you see this is not necessarily something that could be solved by throwing it to the free market?

Rep. Balser:  Oh, no, absolutely not.  The government is going to have to play an active role in negotiating some changed relationships between the payers and the providers.  That’s going to have to change.

David Harlow:  Do you see that role and that relationship leading to any resolution in the cost inflation side?  We talked a little bit about different types of approaches to payment.  Is that something that you see as being developed by regulation?  Will there be a menu of approaches to payment that could be offered by the state government to the provider?

Rep. Balser:  Perhaps.  You know it’s interesting when, you know, this is clearly a tougher problem to solve than the access problem.  In 2006, there was actually explicit conversation about how we were not going to tackle the cost problem yet.  It’s interesting and at that time, what we were debating, I mean it’s funny because the model we set up obviously had implications for cost.

There were a few different models one could choose from to set up a healthcare -- we might talk about the old Dukakis model.  Maybe we should walk through the steps of the model so that we can, to get to the cost question because what had been tried in years past was this Dukakis model which was an employer mandate, requiring employers to pay.  And that never got implemented.  The business community rejected responsibility.

Then there were many years where there were, at least on the liberal side of the political spectrum, people advocating for a single payer system.  In other words, government taking the responsibility for who would pay because the debate was always who would pay, not how much we would pay.

David Harlow:  Yes.

Rep. Balser:  So first, it was going to be the employers.  Then there were some folks who try to argue that the government should pay.  And there were hopes that at least maybe on the national level, we could expand Medicare.  That issue got revisited with the public option debate.

Even here in Massachusetts, people were saying perhaps we needed to do a single payer first at the state level.  What we did in 2006, was decide to develop a hybrid system that would have three payers.  One would be employers, another would be government, but the third and this was really the Republican contribution which the Democrats embraced, was the individual mandate.

So when we talked about who was going to pay, the model that we developed was that again, a three-legged stool, which is often the image.  It was going to be employers, government, and the individual.  That was the breakthrough was that we broke out of this argument, would it be employers or would it be government or would it be a combination?  But the final breakthrough was actually to add the individual mandate as part of that.  And that’s the Massachusetts model that then got embraced nationally.

I should just mention for those who don’t remember, this was debated when Hilary Clinton and Barack Obama were competing for the Democratic nomination.  It was actually Senator Clinton who was pushing for the Massachusetts model and the individual mandate.  Senator Obama at the time rejected it.  Although later when he became president, he embraced and supported that.  So now we have that at the national level.

But fast forward now, I think this is what makes the cost argument so complicated because the cost on individuals has gone up.  The cost on businesses…I mean businesses got off easy in our Massachusetts health plan.  We in the House had wanted a larger employer contribution.  The Senate and the governor, the former governor actually didn’t want employers to have to make a contribution at all.  We settled on a compromise where the employers pay a much smaller contribution than we in the House would have liked.

But I think someone will have to -- maybe you’ll help me figure this out.  But I think that model that we set up, made it all the more complicated to now tackle the problem of cost.

David Harlow:  Because of the shared responsibility for coverage?

Rep. Balser:  Yeah, well and then each sort of resisting taking the full responsibility.  Yeah, you’d think maybe it would make it easier because you had different people contributing or different forces contributing.  But you know, let’s say the government was responsible like with Medicare or whatever, well, then you would just tackle it as a federal budget problem.  The businesses certainly feel they can’t in this economy afford to manage to this rising cost and individuals certainly feel they can’t.

David Harlow:  The Massachusetts experience has been both praised and vilified nationally as the national debate continues.  I guess I’m wondering whether there are particular areas of the Massachusetts experience that you would highlight as being praiseworthy.  We spoke briefly about the fact that we’ve achieved near-universal coverage…

Rep. Balser:  Right.

David Harlow:  …and an uninsurance rate on the order of two or three percent of the population which is a vast improvement.  One of the criticisms of the plan early on was that we had not anticipated how many people would sign up for the various types of programs and that the cost was too great for the state to bear.

Rep. Balser:  But the state has maintained its commitment and has covered the cost.  Well, there were a few problems from my point of view.  We always knew once we embraced this model of the individual mandate, we always knew that would only work so long as there were sufficient resources and commitment to subsidizing those individuals who couldn’t afford the mandate.

So one reason for the individual mandate was because a significant portion of the uninsured were healthy - one group amongst the uninsured for instance were healthy young adults, people who could afford it actually.  Forget the percentage but significant numbers of relatively young adults who are healthy and who had good jobs and were making good money but just didn’t choose to buy health insurance because they [overlap]

David Harlow:  Right, our young invincibles.

Rep. Balser:  Yeah, that’s right.  So that was the model for why it would make sense to have an individual mandate.  Someone’s making a young, single adult who’s making $60-70,000 or something about like that.  They can afford to pay for some health insurance.  Plus, it helps the risk pool if you have more healthy people in it.  And that the idea was that it would also bring down the cost for everyone.

But it was also clear there would be people whose employers did not provide health insurance for them and had made more money than allowed them to be eligible for Medicaid, but who would not be able to pay the full amount of a private health plan.  So the idea was that the state, the public sector would subsidize part of the cost of their health plan.

We always knew the success or failure of the program would sort of rise or fall with whether we could appropriately subsidize those folks because otherwise, the individual mandate becomes really unfair.  You force someone to pay for something they can’t afford.

So what happened was the numbers the first year or so really didn’t work totally and so the state ended up exempting a bunch of people from the mandate which of course defeated the point of universal coverage but we knew it wouldn’t be fair to require them to pay what they couldn’t pay.

But there’s still the devil in the details.  The premium’s cost has gone up and there are a lot of folks, the working poor who are out there working two full-time jobs and raising kids and who can’t afford.  So that’s a problem.

I do remember during the presidential debate when Senator Clinton defended basing the national model on the state.  She pointed out that the federal government would have more resources available and probably could do the right thing as far as subsidizing people who couldn’t fully afford it.  We’ll see how that ends up playing out with what the Congress did. 

You were asking how has it worked out.  So that’s still a problem is that the resources aren’t there to really get the right amount of subsidy for people who are struggling to pay, the individual.

The other problem was that to keep plans affordable, we ended up supporting and by we, I’m being generous because I actually opposed this.  But we ended up allowing high deductibles.  I actually had filed some amendments during the debate to limit the increase in the deductibles and those failed because that seemed like a way to bring down the cost of the plans.  But when you have very high deductibles, people end up not really getting services because they can’t afford  the outpatient care to get up to the level of the deductible.  So that’s been another problem.

David Harlow:  Right.  There’s some research that has shown that people who could use the combination of high-deductible health plans and health savings accounts the most are the people who don’t use them.  They aren’t able to put the money away or are unwilling to pay those first dollar expenses for services that would be helpful, maybe preventive services.  So that does seem to be a problem.

Rep. Balser:  Right.  But I will tell a story if you’re interesting in a role I played that I’m actually particularly proud of which is when the process first began, and we were talking about how to get to universal coverage, of course different people had different ideas.  Just like now we’re going to have different ideas about how to manage the cost.  Then we had different ideas about how to provide access.

Governor Romney at the time, released his bill first.  One of the sentences in his bill was that all new health plans created under his plan would be exempt from all the current state mandates.  And so in other words, he wanted to insure people by creating what I would call cheaper and less adequate health plans because they would be exempt from the mandates.

I was particularly concerned about the mental health and substance abuse mandates but there was a whole list -- I think there’s more than 20 mandates that over time have passed.  You know, that the legislature at one point or another felt it was important that all health plans be required to cover these different aspects of healthcare.  So there was this little sentence in his bill that would have set all these new plans could be created that would really result in people being under-insured.

So I was watching for this and the Senate then came out with their plan and it had the same language in it.  And then the House and it goes to the House and the House came out with a plan that initially had that same sentence in it which I was watching for.  I was chairing the mental health and substance abuse committee at the time and I was watching for this issue because I wanted to make sure that the insurance would be comprehensive and include good mental health and substance abuse coverage.

So when I saw that same language was being mirrored, I filed an amendment in the House to remove it and to say that any new plan created under health reform would have to live up to the same mandates that all our previous plans had.  And that was quickly supported in the House.  The chairperson of the health care finance committee who was mainly overseeing this supported me in that.  Speaker DiMasi also very quickly supported it.  So the House went on record saying that if were going have universal health care, we wanted to make sure that health care would be comprehensive.

So in terms of your original point about the three-legged access, cost and quality, we were trying to deal with both access and quality.  And the House led the way on that saying if we’re going to cover everyone, it’s got to be comprehensive, quality insurance.  And the Senate then embraced it and Governor Romney did sign it that way.

David Harlow:  And now we’re facing a similar issue in the national front as some large employers and others are trying to find exceptions to allow for these mini-plans to be seen as adequate under the national rules.  So the conversation continues.

Rep. Balser:  Right.  You know it’s tough.  It’s always tempting I guess for people to cut cost by reducing quality.  What we were trying to say around that issue was we got to try to cut the cost through perhaps market reforms or changes in the way you know, payment reform but not in terms of reducing quality.

David Harlow:  As you said, that remains front and center and that’s the next set of issues to be addressed here.

Rep. Balser:  Right.

David Harlow:  Well thank you very much.  I’ve been speaking with Representative Ruth Balser, state legislator in Massachusetts on the question of health reform and the Massachusetts experience and what we can hope to see in the future in Massachusetts and on the national stage.  Thank you again Representative Balser.

Rep. Balser:  Thank you.  Bye now.

October 06, 2010

ACO Workshop: The Feds commit to making Accountable Care Organizations work with safe harbors, waivers

Don Berwick kicked off the day-long Accountable Care Organization (ACO) Workshop and Listening Session, co-hosted by the FTC, CMS and the OIG, with a short, stirring speech that touched on his Triple Aim for health care: better care for individuals, better health for populations and reduced per-capita costs.  He committed the government to interpreting applicable statutes "wisely, so as not to impede the development of ACOs."  That sums up the reason this workshop was so eagerly anticipated.  Health care providers are extremely eager to become ACOs - though the term has yet to be fully defined - yet are extremely concerned about the potential to have specific ACO arrangements identified as illegal by the FTC, the OIG or CMS because the arrangements violate antitrust law, Stark, anti-kickback or anti-fraud and abuse laws, or may be subject to civil monetary penalties.  The health reform legislation authorized these agencies to develop waiver programs and safe harbors in order to implement the ACO concept, and proposed rules doing so will have to be issued this fall in order to have these systems up and running next year, as called for by the law.  Berwick's commitment to make this as pain-free as possible was echoed by FTC Chairman Jon Leibowitz and HHS Inspector General Dan Levinson.  Check out the live-tweeting transcript of the day's events. (Audio of the day's proceedings should be posted in the near future.)

So, this leaves just a few questions:

  • What is an ACO and why are they given special status under the law?
  • Why are waivers or safe harbors needed if ACOs are authorized by the Federal health reform law?
  • What waivers or safe harbors are likely to be proposed in the next month or so?
  • Will these waivers and safe harbors protect ACO activity where the payor is a commercial payor, rather than a federal health care program payor?

What is an ACO and why are they given special status under the law?

The health reform law, now known by its acronym PPACA or ACA (Patient Protection and Affordable Care Act, or simply Affordable Care Act), authorizes (among many other demo and pilot programs) the establishment of a shared savings program known as the ACO program, in Section 3022 (codified as Title XVIII, Section 1899). See CMS Shared Savings (ACO) FAQ for details.  At its core, the law requires that an ACO must:

1) Have a formal legal structure to receive and distribute shared savings
2) Have a sufficient number of primary care professionals for the number of assigned beneficiaries (to be 5,000 at a minimum)
3) Agree to participate in the program for not less than a 3-year period
4) Have sufficient information regarding participating ACO health care professionals as the Secretary determines necessary to support beneficiary assignment and for the determination of payments for shared savings.
5) Have a leadership and management structure that includes clinical and administrative systems
6) Have defined processes to (a) promote evidenced-based medicine, (b) report the necessary data to evaluate quality and cost measures (this could incorporate requirements of other programs, such as the Physician Quality Reporting Initiative (PQRI), Electronic Prescribing (eRx), and Electronic Health Records (EHR), and (c) coordinate care
7) Demonstrate it meets patient-centeredness criteria, as determined by the Secretary. 

The ACO provision in the ACA has garnered a disproportionate amount of attention, likely because of the opportunity for shared savings and the opportunity for hospitals to more closely ally their affiliated physicians.  However, the point was made time and again at the workshop that the goal of the program is to improve patient care and the patient experience -- without that guidepost at the core, the exercise won't work.

Aside from large IDS's seeking to use the ACO program as a means to protect and potentially grow market share and margin (after all, "no margin, no mission"), why would hospitals want to get involved?  Hospital reimbursement is on the line here: about 70% of costs -- and potential savings -- are on the hospital side of the equation, and much of the control over those costs lies with physicians.  If they are not already employed physicians, the sharing of savings means the hospital will be sharing with the physicians, and not vice versa.  Despite this apparent disincentive, past experience has shown that strong physician-led initiatives can bring hospitals into the fold.  Two examples: the Medicare Physician Group Practice Demonstration Project (an ACO precursor) and the Grand Junction, Colorado experience: a physician-led arrangement initially targeted by the FTC as a price-fixing scheme, eventually resolved through a settlement agreement, and now seen as a national model of collaboration, aligned incentives, cost-effectiveness, and quality improvement.

Why are waivers or safe harbors needed if ACOs are authorized by the Federal health reform law?

The general idea is to get providers across the continuum of care to band together, work on reducing costs and improving quality, continue to be paid on a fee-for-service basis by CMS, and then retrospectively look at system-wide savings (e.g., avoided readmissions) and share those savings around.  Sharing those savings around outside of an integrated delivery system raises a host of potential antitrust, fraud and abuse (anti-kickback), Stark and CMP issues, and the statute authorizes the development of waiver programs and safe harbors in order to make it all work.  It's really a square peg-round hole problem, because the policy basis for making illegal this sort of sharing is grounded on fee-for-service, retrospective reimbursement systems.  Prospective payment, particularly bundled payments for episodes of care, eliminates the potential for the harm these rules protect against (over-provision of care due to financial incentives), yet they are still on the books.  For example, we want physicians to share in the hospital savings experienced as a result of an avoided readmission which would not be eligible for separate reimbursement; this opportunity will incentivize them to work harder to prevent the readmission.  Under current rules, however, a payment by the hospital, directly or indirectly, to the physician, tied to that savings, is impermissible.

What waivers or safe harbors are likely to be proposed in the next month or so?

Federal officials at listening sessions are notoriously tight-lipped, so not much was said about what to expect, other than proposed regulations are expected to come out this fall.  However, all were keen to emphasize that they want to eliminate the regulatory impediments to ACOs, and welcome further comments from the public.

As a whole, the regulated community is eager to have greater certainty, in the form of new regulated guidance; however, some would prefer to simply be guided by what's out there already: advisory opinions, guidelines, regulations, etc., that lay out safe harbors.  For example, the joint DOJ-FTC healthcare antitrust guidelines provide that clinical integration -- even in the absence of full merger or acquisition, or direct employment of physicians by a hospital -- will keep providers out of antitrust hot water even iof they are collaborating in ways otherwise prohibited.  At the other end of the spectrum, some folks would prefer to have the federales get broad authority to issue blanket waivers without establishing super-specific criteria.

Establishing criteria for waivers or safe harbors will be somewhat difficult, because the definition of an ACO is a little slippery. The financial arrangement at its core can be simply a shared savings arrangement, but it might also veer into other territory: underwriting patient expenses such as transportation costs or home monitoring device costs, or the payment of a physician group's up-front capital expenses by a hospital in order to kick-start the process (all potentially illegal inducements under current law).

Many of the comments were directed at ensuring that a particular type of arrangement or organization does not escape the feds' notice, so that they can all be written into waiver or safe harbor language.   

Will these waivers and safe harbors protect ACO activity where the payor is a commercial payor, rather than a federal health care program payor?

The rules at issue are all Federal health program rules -- except for the FTC antitrust rules, which apply across the board. 

A number of forum participants suggested that a rule of reason analysis under the antitrust laws (rather than "per se" analysis) would be needed in order to address market power issues in each unique ACO situation.  It seems to me that such an approach would be throwing away the current opportunity to craft a set of guidelines focused not only on ACOs but on other provider arrangements likely to come down the pike under other ACA demo and pilot authority.  This opportunity should be seized by the other agencies as well -- not just the FTC. 

Final thoughts

Will providers actually come together to form ACOs?  The jury is still out.  There is certainly a lot of noise being made, but the long-term key from both a policy and business perspective is that the efforts of the provider organizations must be to make themselves more patient-centered.  Berwick's emphasis on this point was striking, and he illustrated it with an anecdote from his days of practicing as a pediatrician at Harvard Community Health Plan, where systems were in place to support a patient-clinician partnership at a very high level, suggesting that HCHP was an ACO long ago.  In current-day Massachusetts, Blue Cross Blue Shield of MA has rolled out its Alternative Quality Contract to  a quarter of its provider network; half of the docs involved are in small practices.  While it has taken some years for the AQC program -- another proto-ACO program -- to get off the ground, it is significant because it has allowed for the agglomeration of small practices into a larger whole for purposes of the contract, thus perhaps lighting the way for ACO participation by organizations other than IDS's.

So is this deja vu all over again? Have we stepped back in time a couple of decades to re-experience managed care failures of an earlier era?  Certainly, some rpoviders see the ACO structure as a way to increase market share, margin and bargaining power -- and it's a no-downside financial deal.  As noted above, it cannot be only that.  There are significant costs and potentially difficult negotiations ahead as providers across the continuum work with the regulators to hash out the final status of the ACO landscape, and then deal with integrating themselves into one or more ACOs with a laser focus on patient-centered care.  That focus should yield benefits up and down the line: for patients, providers and ultimate payors in both the public and private sectors.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

October 03, 2010

mHealth, markets and cold, hard cash

Last month, PricewaterhouseCoopers issued a report, Healthcare Unwired, examining the market for mobile health monitoring devices, reminder services, etc. among both health care providers and the general public.  One of the big take-away points seems to be that 40% of the general public would be willing to pay for mobile health, or mHealth, devices or services ranging from reminders to data uploads; and the reaction by insiders is either joy (40% is good) or dismay (40% is not enough).  PwC estimated the mHealth market to be worth somewhere between $7.7 billion and $43 billion per year, based on consumers' expressed willingness to pay. Deloitte recently issued a report on mPHRs, as well -- and there is tremendous interest in this space, as discussed in John Moore's recent post over at Chilmark Research.  I agree with John's wariness with respect to the mHealth hype; there is certainly something happening out there, but significant questions remain: What exactly is going on?  Is there reason to be interested in this stuff or is it just something shiny and new?  Can mHealth improve health care status and/or health care quality and/or reduce health care costs?

As a society, across generational divides, we are continuing to move in the direction of greater comfort with electronic communication and mobile devices, and we have the desire and readiness to use these tools in managing our health care -- there are numerous studies and reports out there supporting these conclusions beyond the latest from PwC and Deloitte.  The infrastructure is moving in the right direction, though there are still significant bumps in the road, e.g., lack of a universally-accepted data set for PHR data (the CCD/CCR divide, epitomized by the Microsoft HealthVault/Google Health adoption of these different health data standards).  In a growing effort to overcome some of the interoperability issues in this space, HealthVault recently announced that it will be joining forces with the Continua Health Alliance, thus making a large number of mHealth devices capable of uploading data directly into individuals' HealthVault PHRs.  This is -- potentially -- a huge development; we have yet to see how it will play out.  As HealthVault continues to grow its "white-label" PHR market among health care providers (growth goosed in part by the meaningful use regulations), its ubiquity, paired with the utility of the Continua standards, and the growing adoption of these tools both by health care providers and the general public, will turn mHealth from a geek-fest into a tool, or set of tools, used by all.

Clearly, this is the wave of the future, and the interest in mHealth is not just as a plaything for the early adopter.  Eventually, we will stop calling it mHealth -- it will simply be part of "health." (See Susannah Fox's post on a similar sea change in thinking about the term "e-patient" -- if we are all educated, empowered and engaged in our own health care, then we are all patients, and perhaps need the appellation "e-patient" no longer.) 

As mHealth edges into the mainstream, it must continue to demonstrate its utility.  As it does so, its potential for success should not be measured by the dollars individuals are willing to shell out, but by the savings to the health care system that it enables.  There should be no market for mobile health devices and apps that cannot be counted on to increase health care quality and/or reduce health care cost.  If they don't do one or both of thoise two things, then they could still be sold -- but as toys, not as meaningful health care tools.

The value of SMS messaging (text messages) is highlighted by Jane Sarasohn-Kahn in her review of the PwC report, and has been studied by Kaiser Permanente in as mundane an application as appointment reminders, where the potential for significant savings was identified. 

Savings should be created by those efficiencies, and the price for the tools should be paid by the beneficiaries of those savings -- the health care payors: public and private sector insurers (i.e., Medicare, Medicaid and commerical insurers), self-insured employers and self-paying individuals, and health care provider organizations paid on some basis other than fee-for-service (and we hope this last group will be growing, thanks to the growing emphasis on sharing fiscal responsibility for health care quality with provider organizations).  

David Harlow
The Harlow Group LLC
Health Care Law and Consulting