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  #11  
Old 09-13-2018, 12:04 PM
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I have seen this vary widely over my career. The craziest one was another department using a simple interest calculation for a multi-year study. I was a greenhorn way back then and did not speak up.
I hope it wasn't an actuary that put the study together. Yikes.
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  #12  
Old 09-14-2018, 11:47 AM
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I hope it wasn't an actuary that put the study together. Yikes.
It wasn't. The actuarial department was supposed to support the results though. You can guess how that went over.
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Old 09-14-2018, 04:17 PM
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Regarding the first point, I'm not sure how the programs you're looking at are structured. If the payers are making payments to the providers, in the form of a PMPM payment or some other form of cash, then those should absolutely be deducted from any savings paid out. If the providers are making investments without the payer chipping in, then you wouldn't deduct those. I'd consider those as practices investing with the hope of getting shared savings.

Agree with your second point.

The last point is a tough one. You're right, a lot of these programs are trying to encourage physicians to keep pts out of the hospital. But that means less revenue to the hospital. The only way you can make that work is to share revenue with the hospitals through the ACO-type programs. Conceptually, let's say you avoid a $20k admit, thereby saving the payer $20k. And let's say on that $20k bill, the hospital would have made a $5k profit. If the payer then paid $8k to the hospital as shared savings, then the hospital is up $3k, and the payer saves $12k net. Now, in practice, teasing that all out is impossible. No perfect way to do it, the question is whether or not you can come up with a reasonable way.

I hope that makes sense. Need more
Thanks for discussing!

My first point is that you can't really say the program saved $X if it cost the ACO a bunch of money to participate in the program (IT costs, organizational costs, etc). I think it's more accurate to say the program saved $(X - a bunch of money). Even better, subtract off the costs that CMS incurs if you want to know if ACO programs actually save the system much.

My last point was just that in general, primary care and hospital goals and incentives are in conflict. I don't see how you can have good results in which patients are getting good care and spending is going down if you have primary care and hospitals in the same entity. Primary care should be working to make and keep patients healthy, which means less downstream care is needed because you're getting problems solved earlier or preventing problems with high quality and high access primary care. Hospitals do not benefit from this but I believe this is the best way to benefit patients and taxpayers.
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Old 09-14-2018, 05:05 PM
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Thanks for discussing!

My first point is that you can't really say the program saved $X if it cost the ACO a bunch of money to participate in the program (IT costs, organizational costs, etc). I think it's more accurate to say the program saved $(X - a bunch of money). Even better, subtract off the costs that CMS incurs if you want to know if ACO programs actually save the system much.

My last point was just that in general, primary care and hospital goals and incentives are in conflict. I don't see how you can have good results in which patients are getting good care and spending is going down if you have primary care and hospitals in the same entity. Primary care should be working to make and keep patients healthy, which means less downstream care is needed because you're getting problems solved earlier or preventing problems with high quality and high access primary care. Hospitals do not benefit from this but I believe this is the best way to benefit patients and taxpayers.
For the former, you have to define 'savings.' From which perspective? Payers don't care how much physicians or facilities spend, if claims cost goes down then they win. In the larger perspective of whether or not ACO type programs save money, you should consider what the cost that the payers bear... but I don't think that's cut and dry, because if some of these initiatives work, they could pay dividends for years, so you have to potentially amortize them out beyond the duration of the program. I don't think we're disagreeing all that significantly here though.

The issue of competing incentives is a problem. There are some solutions, but again, cutting costs means cutting someone's revenue. Agree it's strange to pair up PCPs and hospitals. I'm living this right now with the Oncology Care Model, which measures total cost of care for cancer pts receiving chemotherapy. So there's an incentive to reduce any/all costs, including those for radiation therapy. Only problem is most of my practices own radiation equipment. It's tricky but we're working around most of the problems in some fashion, I can't get too specific here!
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  #15  
Old 09-14-2018, 05:34 PM
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Originally Posted by kooky cookie View Post
Thanks for discussing!

My first point is that you can't really say the program saved $X if it cost the ACO a bunch of money to participate in the program (IT costs, organizational costs, etc). I think it's more accurate to say the program saved $(X - a bunch of money). Even better, subtract off the costs that CMS incurs if you want to know if ACO programs actually save the system much.

My last point was just that in general, primary care and hospital goals and incentives are in conflict. I don't see how you can have good results in which patients are getting good care and spending is going down if you have primary care and hospitals in the same entity. Primary care should be working to make and keep patients healthy, which means less downstream care is needed because you're getting problems solved earlier or preventing problems with high quality and high access primary care. Hospitals do not benefit from this but I believe this is the best way to benefit patients and taxpayers.
Regarding a conflict between primary care and hospital utilization. I've performed several studies on wellness initiatives and PCP utilization. Every study I've done has shown an increase in the PMPM cost for members who participate in the programs, in year 2 versus year 1. This really shouldn't be surprising as the more frequently you see a PCP, the more likely you are to be diagnosed with something.

The most interesting study I performed was on pregnant women and tracked their prenatal care. Those with a high level of prenatal care had higher average costs, higher average inpatient days, and high rates of c-sections. Investigation suggested a higher number of co-morbid conditions diagnosed in the prenatal care group. Since this was a Medicaid population, it seemed likely that there was a certain amount of pent up need for health services that went previously untreated. In other words, the higher costs in the program group was due to costs outside of maternity.

This is all a long way of saying that the hospital system isn't necessarily in conflict with PCP treatment versus hospital care. The system, as a whole, comes out ahead with more PCP care. At least in the short term. I never performed any sort of long term (say looking at costs 3+ years out) study.
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  #16  
Old 09-21-2018, 11:55 AM
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https://www.forbes.com/sites/bruceja.../#59bd241d78fb

This article shows that there is about a 1% decrease in hospitals margins that they are associating to the increase in VBC contracting. This is consistent with the study from the earlier link showing a 1% decrease in cost. I like when evidence lines up nicely like that
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  #17  
Old 09-22-2018, 07:20 AM
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I work for a company that does ACO stuff. The conversations we have with doctors go something like this.

Us: "We are noticing X, we think this is an opportunity where you could could some of these members into your office..."

Doctors: "There is nothing we can do about that"

The profit motive of everyone involved in healthcare is going to continue to increase costs in the US Healthcare system. There is nothing anyone can do without forced wages, prices, and limitation of services across the industry. The lobby of the industry is too strong for that to ever happen so it won't. I am a data person though so my job finding gross overspending and pointing it out will always be safe. I think though that companies like Optum, Humana, etc. have the best chance, they have huge customer bases and can enforce their will on things as long as they show care is not compromised.
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  #18  
Old 09-22-2018, 07:55 AM
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Originally Posted by WhosOnFirst View Post
Regarding a conflict between primary care and hospital utilization. I've performed several studies on wellness initiatives and PCP utilization. Every study I've done has shown an increase in the PMPM cost for members who participate in the programs, in year 2 versus year 1. This really shouldn't be surprising as the more frequently you see a PCP, the more likely you are to be diagnosed with something.

The most interesting study I performed was on pregnant women and tracked their prenatal care. Those with a high level of prenatal care had higher average costs, higher average inpatient days, and high rates of c-sections. Investigation suggested a higher number of co-morbid conditions diagnosed in the prenatal care group. Since this was a Medicaid population, it seemed likely that there was a certain amount of pent up need for health services that went previously untreated. In other words, the higher costs in the program group was due to costs outside of maternity.

This is all a long way of saying that the hospital system isn't necessarily in conflict with PCP treatment versus hospital care. The system, as a whole, comes out ahead with more PCP care. At least in the short term. I never performed any sort of long term (say looking at costs 3+ years out) study.
In short if you go to the Dr. they are going to treat you. No one knows the difference between being alive and being sick anymore. Kind of like when I used to play basketball and took a spill or rolled an ankle. Those few moments where you self diagnose by walking around and building up your range of motion to see what's up. You have to figure out where you stand. Most of the time you're fine and can start playing again knowing you're going to be sore, but at times you need to chill out for a few days, and then there is the rare occasion where you really screwed something up and maybe need an x-ray.

Most of our health is like this. Any 50 year old with high blood pressure could be given a diagnosis to justify a heart catheter. A heart cath is low risk, easy, & makes a person feel better after it's done. I think most Dr's have no probability background and view it as no risk when it is actually low risk. Some folks die, get infections, have complications etc. These risks aren't factored enough when you also consider this procedure really doesn't need to be done near as often as it is being performed.

Same with back pain. Every single human on Earth will suffer from back pain and has disc problems. Any Dr. seeing a patient for back pain can easily justify imaging, and imaging will find a problem. It's easy to justify invasive and intrusive solutions to the problems from there. I think this is better these days as I don't hear about people getting the rods and cages in their back near as much as I used to, but geez they used to do that stuff to people all the time. Most of these people then became huge burdens to the healthcare industry because they were permanently disabled.

It's these types of things where we have to do better. We can't let the industry invent treatment and then administer it unchecked. There needs to be better proof that treatments actually improve well being. A disc replacement surgery definitely replaces a disc, but rarely does it improve someones overall well being as they have one area of their back that is overly stable and causes stress on the rest of the back and eventually destroys other discs and spirals the person's health downward.

We also can't let the industry continue to come up with conditions. I won't get into specifics because they are extremely emotionally charged, but there are areas where the industry has created problems. Telling parents to avoid exposure to everything for their babies for 2 years has of course avoided some severe allergic reactions in infants, but it's caused a bigger public health issue in that we have a generation of kids who have extremely high rates of allergies because they weren't exposed to things when they were infants. Severe allergic reactions while unpleasant are relatively easily fixed and are much easier to treat when they arise then to treat the allergies of an entire generation for their entire life (not to mention causing peanuts to be removed from everything for the rest of us).

The Opiate Crisis is a health crisis created within the confines of the medical community that is now costing the federal government billion's of $'s and decimating state Medicaid budgets that are supposed to help our poorest citizens. This is a dark example of healthcare gone wrong. This one is not only a tremendous healthcare cost burden it is a drag on our economy due to the decimation of the workforce it has caused. The limitations of productivity created by this epidemic are going to effect the US economy for decades and ironically lower the tax base which will be needed to pay for it's fix.

I have only worked in the field for 5 years now, but I am not encouraged that anything is going to change. Profit motive is too high and treatment is to reactive. The citizenry is too uninformed for a Dr to be the adviser they should be and instead Dr's have become lords in their kingdoms where people just do whatever they tell them to do. I don't think that is the way it should work, but it has become the way it does work. This is a rambling collection of my thoughts at 6:30 AM on A Saturday so take it for what it is worth.

Last edited by dgtatum; 09-22-2018 at 07:58 AM..
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  #19  
Old 10-05-2018, 02:38 PM
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Interesting post, dgtatum. I'm curious why health care is so different from everything else. After all, doesn't EVERYONE have a profit motive? Why don't we see these sorts of spending increases in other products and services?
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Old 10-05-2018, 03:41 PM
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For most goods and services, one doesn't live with them or else die without them.

You will see this with some people's pets, spending thousands to keep them alive for a few more months (or maybe years).

You won't see this with, say, cars. Insurers decide that the salvage value is less than the repairs, give you the money and done.
People don't have a "salvage value" when they need repairing.
Unless you think having one could solve the "health care crisis." A health insurer simply saying, "We ain't paying for that, as your worth is $50,000 and your surgery will cost $250,000. Here's $50,000. We are settled." Interesting idea you have there (no, it was not MY idea! I simply read your mind!).
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