Blog

Newtown, CT - February 9, 2018

A WSJ article entitled The Health Care Conspiracy of Silence focuses on one aspect of a broader omertà that plagues the industry. The conspiracy of silence reminds us of the perverse role that tax laws play in distorting markets, and the timing is good because it comes the day Congress has decided to punt on the few items that remained in the ACA that attempted to thwart those that prefer to ignore these distortions, in particular the so-called Cadillac Tax. And beyond tax distortions, the Congress has also weakened the effect of MIPS by delaying the portion of the formula that focuses on costs of care and eliminated the IPAB. It really seems as if no one cares, whether Democrat or Republican, that the average worker in the United States is all the poorer for these disastrous policies. The bipartisan support for avoiding painful choices is almost unanimous.

Omertà, however, is present in many other aspects of health care and must be pointed out. The most egregious certainly is the still prevalent pernicious clauses in payer-provider contracts that purposefully stifle competition and forbid anyone from talking about it. The one that is getting increasing play prevents payers from doing anything that could cause plan members to exercise their discretion in choosing providers. These are aptly called no-steerage clauses and go so far as to stop payers from even displaying comparative information on a provider that may lead a plan member to go to another. Unsurprisingly, the ones that are demanding these clauses are most often the “must-haves” in a network, those that have consolidated market power, raised prices, ignored quality improvement, and offer poor overall value. They see the writing on the wall and fully understand the underlying movement by employers to increasingly select narrower networks and preferred providers. They also read the reports showing that consumers in the individual market will sacrifice choice for lower premiums. So when you’re a giant hog used to a wide trough and become concerned the trough might be tightening, you’re going to squeal, and squeal they do.

Fortunately, this is 2018 and not 1998. The age of transparency has arrived and won’t be rolled back. While many states still have to get their act together to publish meaningful price and quality of care, a lot have and are in the midst of getting it done. Further, employers are taking matters into their own hands and deploying tools that provide direct financial benefits to employees that select higher value providers, even when the network is wide and undifferentiated. After all, even if the TPA is handcuffed in providing comparative information and steering plan members, the employer isn’t. But that may not be enough. Fortunately, a few brave states, led by our northern neighbor – Maine, are considering or have enacted the next generation of transparency laws. These mandate that health plans offer consumers direct financial incentives – think of them as rebates – when they select the lower priced provider for a specific set of services. That, of course, means the plans have to provide transparency tools as well and disclose price differences. Unsurprisingly, the Maine Hospital Association squealed. More concerning, the insurers also opposed the law. In our book, however, Maine gets an A+ because its actions may mark the beginning of the end of one form of omertà in health care, and a forced diet for the fattest of the hogs.

Newtown, CT - January 26, 2018

When he headed up Health and Human Services, Mike Leavitt proposed a framework for a higher performing health care system. It was supported by four pillars – information on quality care that would be actionable by consumers; information on price of health care that would help providers, payers and consumers make better decisions; value-based payment models; and interoperable health information....

Newtown, CT - January 12, 2018

Several years ago we offered some guidance to CMS about key design elements that would increase the success of an APM. It’s time to revisit them – with the announcement of BPCI Advanced, Medicare just sent a strong signal that alternative payment models, and especially those that physicians participating in MACRA can opt for, are here to stay. That’s certainly consistent...

Newtown, CT - December 29, 2017

Every new beginning comes from some other beginning’s end; or so the song says – Just about six and a half years ago I started a weekly missive aimed at synthesizing what I saw happening in the emerging field of alternative payment models and, more broadly, across the health care sector. The more frequently recurring themes centered on three elements: (1) our collective overriding imperative to improve the...

Newtown, CT - December 14, 2017

It’s been five years and it’s difficult to not well up thinking about it – Since then many more children, women, and men have had their lives end abruptly, violently, shockingly, at the hands of yet another “lone wolf.” And every time it’s the same sad song. The tune never changes however horrific the new tragedy. It should be pretty clear by now that the tune won’t change until the bells have tolled in so many...

Newtown, CT - December 8, 2017

Bob Galvin once told me that second marriages were the triumph of hope over experience. Recent evidence on ACOs reminds me of that quote – A study published this month in Health Affairs by Williams, Chernew and Landon indicates that, by and large, the overwhelming majority of savings coming from ACOs participating in the Medicare...

Newtown, CT - November 18, 2017

In Memoriam – “Res tantum valet quantum vendi potest” were just a few of the many words of wisdom that, over the years, Uwe Reinhardt imparted during the yearly Altarum symposium on the sustainability of health spending. My colleagues Charlie Roehrig, Ani Turner and Paul Hughes-Cromwick had the pleasure and benefit of having Uwe as an advisor to their center for many years and, like them, we will all...

Newtown, CT - November 10, 2017

I saw a movie once in which one of the main characters stops another in mid-sentence and says: “My dad taught me long ago that anything before “but” is an excuse, so just get to the point.” That’s an important lesson when listening to those who claim they’re all for transparency, but….—As we released our...

Newtown, CT - November 3, 2017

Time for another reality check and to sift the wheat from the chaff – With the flurry of announcements coming out of CMS combined with external reports on the effectiveness of APMs, the reports from the HCP LAN and the release of the latest Leapfrog Group survey, it’s hard to make sense of it all, and yet let’s try. Earlier this week two reports cast serious doubt on the cost-effectiveness of CMMI’s two marquis...

Newtown, CT - October 27, 2017

Moving medical education from thoroughness to appropriateness is a close to incredible accomplishment. The next phase is to move it to affordabilityNeel Shah and his colleagues at Costs of Care, in collaboration with our good friend...

Newtown, CT - October 20, 2017

And now it’s others’ turn to own up – Yesterday the state of Maryland released the initial version of its new price and quality transparency website, WearTheCost. The information is currently limited to four elective inpatient procedures and the pricing information is for commercially insured residents of Maryland using data from 2014 and 2015. The pricing information is...