As I wrote in the recent UHCAN Ohio newsletter, Ohio received notice, in December, of a $75 million State Innovation Models (SIM) Test grant

The grant is to test new ways of paying for health care that “improve health system performance, increase quality of care, and decrease costs for [all private and public payers] and for all [Ohioans].” In other words, better health care that makes us healthier, at lower costs. But can they deliver on the promises? Or, will the conflicting interests of insurance companies, hospitals, and other stakeholders overshadow the needs of patients/Ohioans? And, is there anything Ohio consumers can do to increase the likelihood that SIM will improve the lives of all Ohioans – especially those who need improvements the most? Here’s the first in a series on the SIM Grant and how to protect consumers’ interests in Ohio’s changing health care landscape.  

What Will the SIM Test Grant Do?

 Here’s the summary from the CMS website:

Ohio will transform the state’s health care system by rapidly scaling the use of patient-centered medical homes (PCMHs) and episode-based models and by developing cross-cutting infrastructure to support implementation and sustain operations. By the end of the Model Test, Ohio plans to launch 50 episodes of care and implement PCMHs statewide. Reports for the first six episodes of care will be delivered to providers in November 2014. PCMHs will expand geographically, reaching statewide coverage by 2018. In addition, the state is focused on incorporating population health measures into regulatory and payment systems in order to use those measures to align population health priorities across clinical services, public health programs, and community-based initiatives.

Research shows that the PCMH model of enhanced primary care can improve patients’ care and their health, while lowering costs. The research also shows lots of variability in results, largely because the PCMH models tested are all different. And no research I’ve seen shows what elements of PCMH produce better results than others. In other words, the ability of Ohio’s spreading PCMHs to improve health outcomes and lower costs, probably depends on the specific features of each PCMH.

The other thing we know about improving our health is that the best doctors in the world can’t save you if you chain-smoke, don’t eat vegetables, breathe bad air, and have too many stresses in your life. In other words, improving the health of Ohioans involves medical care and our lives – where we live, work, and play.

What Can We Do to Improve the Value of the SIM Grant to Consumers?

Probably several things, if we organize. Consumer advocates can identify specific strategies (such as use of community health workers) that improve outcomes and/or save money and push for those elements to be included in Ohio’s PCMH model. Effective strategies include making sure that the PCMH practice (the office or clinic) include:

• Has people working there who are from the same communities, race, or ethnicity as the patients served there (a national best practice for reducing health disparities);
• Has the ability to connect patients to resources in the community than can help them improve their health; and,
• Has community health workers to help patients understand how to take care of their health and overcome non-health barriers in their lives.

A PCMH without these elements may work reasonably well for a patient population that is well educated, affluent, and in reasonably good health. For the rest of Ohioans, no way. Let me know if you have thoughts on this or want to help UHCAN Ohio and Ohio Consumers for Health Coverage make Ohio health transformation work for Ohioans.  

In future blogs, we’ll look at: How do we make sure consumers have a powerful voice in Ohio’s SIM Grant?  What are other states with SIM Testing Grants doing to make sure that health care system transformation improves lives?

News flash: health care costs too much. But we’re also not getting our money’s worth. Health care reform is about spending more wisely to get better care at lower costs.

On December 16, 2014, Governor John Kasich received a nice holiday gift from the federal Centers for Medicare and Medicaid Services (CMS)  – notice that Ohio received a four-year, $75 million State Innovation Models (SIM) test grant.

According to the award letter, this grant is to test new ways of paying for health care across all payers – Medicaid, Medicare, or private insurance – that will “improve health system performance, increase quality of care, and decrease costs for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries – and for all residents of participating states.”  That’s a big promise – better care at lower costs for all Ohioans. Boy, do we need that!

Health care in Ohio (as in the rest of the US) is in serious trouble. First, we pay way too much. Health care costs depress wages and keep many people from getting needed care. Worse, for all that money, we don’t always get the care we need.  According to a recent scorecard from Health Policy Institute of Ohio, Ohio ranks 47th (close to the bottom) in health care “value,” which considers both quality and spending. We’re near the bottom on infant mortality, adult diabetes, avoidable emergency department visits by Medicare beneficiaries, air quality, and smoking rates, to name a few. For people of color, the numbers are even more dismal. Given Ohio’s health rankings, we need cheaper health care that improves our health. That’s what this SIM grant aims to achieve.

The grant will test new ways of paying for health care – paying for better care at lower costs.  Under today’s system, providers often make money on doing more tests and procedures – whether they hurt or help you. The SIM grant will test two new ways of rewarding providers for better and more cost-effective care. Sounds great – but there’s a lot of money on the line, in this test, for the key players. Will the Kasich administration and their private partners (including insurers and providers) make the right changes needed to improve the health and wellbeing of Ohioans? Will consumers really come out ahead? Only if consumers have a strong, ongoing voice in this test.

Last year, Ohio Consumers for Health Coverage issued a brief on the importance of consumer engagement in the SIM process.  That paper – which could have been subtitled “Nothing for us without us” – set out detailed recommendations on how to make sure Ohio consumers have an ongoing, meaningful voice in designing and testing the proposed changes. The lengthy plan that went to CMS, despite input from OCHC, does not lay out a plan for meaningful consumer involvement.

The question for consumers is this: are we going to leave it up to insurance companies, large employers, providers and the Kasich administration to make health care better and more affordable for Ohio consumers? It’s time for us to get active.

In the next few months, UHCAN Ohio will be posting blogs, infographics, and other tools to help consumers understand health care and get involved in reform that works for us. Do you want to host a discussion of health reform? Contact us. 

Many people have theories about what makes health care cost so much in the US. The truth is that many factors contribute to excessive spending, but experts have identified 4 major reasons why: (1) Per-Unit Price of Health Care; (2) Administrative Waste; (3) Quality; and (4) Population Health.

Understanding the real reasons why health care costs so much is vital, for two reasons: (1) without understanding the cause, we won’t be able to fix the problem; and (2) so-called “solutions” that don’t address the real causes tend to harm consumer access to the right care at the right price. Examples of this are cuts in Medicaid eligibility or benefits, higher deductibles and cost sharing, narrower provider networks and drug formularies, and other policies that hurt consumers.

Extensive research into cost drivers have identified the FOUR major reasons why health care costs so much:

1. Per-Unit Price of Health Care: That means the price charged for each unit of care (such as an MRI, a pill, a procedure). NY Times reporter Elizabeth Rosenthal has a long series, “Paying Till It Hurts,” that’s a must-read on unjustifiably high health care costs. Prices that different providers charge for different procedures vary tremendously, both within and among regions, but it’s hard for consumers to comparison-shop, and it’s important to note that numerous studies have found no relationship between higher price and higher quality. Never assume more expensive care means better care.
2. Administrative Waste: Hospitals, doctors’ offices, and insurance companies all have large staffs to process all the paper and electronic forms and documents. Each payer has different forms, benefits, and reporting requirements, multiplying bureaucracy. We spend a lot on marketing competing prescription drugs, hospitals, and health plans. It goes on and on.
3. Quality: The Institute of Medicine estimates that over 30% of health care spending provides either no value or “negative” value – meaning harm to the patient. In 2013, an article in the Journal of Patient Safety estimated that 400,000 Americans die each year from medical errors, costing $1 trillion per year.. Ten times more suffer complications. In 2002, an estimated 1.7 million Americans died of infections acquired in hospitals (mostly preventable). 18% of Medicare patients who are hospitalized get readmitted to the hospital for potentially preventable reasons.
4. Population Health: Chronic health conditions, brought on by poor diet, inadequate exercise, stress, air pollution, and other environmental factors, are the leading cause of death in the US. Heart disease and cancer together account for 47% of deaths. Total costs of treating people with diabetes in 2012 were $245 billion. These diseases are largely preventable with more investment in preventing disease, through population health initiatives that address health behaviors contributing to these diseases: poor nutrition, lack of exercise, tobacco use, and drinking too much alcohol. The CDC list fails to mention other behavioral health conditions, including chronic stress, which is more common in people struggling to survive because of poverty, racial bias, and other pressures. We must improve the quality of life and standard of living for people living in unhealthy communities so that they can live healthier lives.

 Those are the four biggest reasons why we spend so much on health care. If you want to know more, go to the Consumers Union Health Care Value Hub and have a field day.

A recent survey shows that a majority of Americans believe the ACA is here to stay and value what the ACA has accomplished, as we discussed in a recent newsletter. But a strong majority also support proposals to improve the ACA by making health care more affordable. This echoes what we hear from people shopping for coverage on the Marketplace or struggling with increased cost-sharing in private insurance.

A variety of remedies exist to the problem of unaffordable health care. Each require action – by insurance companies, the Ohio Department of Insurance, and/or legislators. Here are several ways to make insurance more affordable for Ohioans.

Value Based Insurance Design: Insurance companies could stop charging high copayments for effective medications and treatments for people with serious illnesses or chronic health conditions. This is known as “Value-Based Insurance Design,” or VBID. Instead of charging the same cost-sharing (deductibles and co-pays) to every patient and every service or medication, VBID reduces financial barriers to obtaining “high value” treatments. “High value” treatments can be defined as those treatments that prevent a patient from needing more expensive care. Think about an asthma inhaler or insulin for diabetes.

VBID should apply to basic diagnostic tests and medication to promote early detection and treatment, as long as they are based on strong clinical evidence of effectiveness. For patients with such chronic conditions as diabetes, hypertension, asthma, cancer, HIV, and multiple sclerosis, reducing barriers to medications that maintain health save money on more expensive care for unmanaged disease.

Surprise medical bills: These most often occur when people obtain care from a hospital and provider in their insurance network, but then get (surprise) bills from other providers who are not in their network, such as radiologists, anesthesiologists, and laboratories they had no idea would be involved in their care. Consumers can’t avoid using out-of-network providers if they either didn’t know they would be involved or had no choice when they went with their in-network hospital and doctor. Legislation, such as a law recently passed in New York, can protect consumers from surprise bills from out-of-network providers.

Insurance rate review: The rates insurers are allowed to charge are regulated by the state department of insurance. Several regulators in other states are more aggressive than the Ohio Department of Insurance in reviewing and approving proposed rate increases. ODI could exert more pressure on hospitals and specialists around the prices they charge for services and quality of care. ODI could consider affordability of higher premiums in relation to the profits and surpluses of the insurance industry. In short, ODI could hold insurance companies more accountable.

These are just three policies organized consumers and their allies could achieve in order to bend the health care cost curve. It won’t happen overnight – few things worth winning are.