Covering health care requires writing about the cost of care. Determining if costs are rising or falling and by how much is an integral part of the beat. After all, cost control is one of the primary concerns behind health care reform.
Mark Fendrick, M.D.
But A. Mark Fendrick, M.D., the director of the Center for Value-Based Insurance Design at the University of Michigan, suggests it’s time to shift the discussion from how much the United States spends on care to how well we spend money on health care. Focusing closely on costs leads health systems to use a one-size-fits-all approach to cost sharing, and requiring consumers to pay more for needed services may have a perverse effect of becoming a barrier to care, he explains. Conversely, VBID encourages a more clinically nuanced approach to financial incentives that involves setting consumers’ out-of-pocket costs for health care services and medications to motivate patients to do what research proves will help keep them healthy.
Fendrick will explain V-BID and the role it should play in the health care system during an AHCJ webcast, “How value-based insurance design breaks down barriers to care,” on Aug. 14, 1-1:30 pm ET.
V-BID seeks to align patients’ out-of-pocket costs, meaning their copayments, deductibles, and premium payments, with the value of health services, the center says. “This approach to designing benefit plans recognizes that different health services have different levels of value. By reducing barriers to high-value treatments (through lower costs to patients) and discouraging low-value treatments (through higher costs to patients), health systems that incorporate the concepts of V-BID can improve patient outcomes,” it says. Continue reading
The percent of premium dollars allocated to administrative costs and profit dropped in all markets since the introduction of the 80/20 rule. (Click to enlarge image.)
A new report on how health insurers are complying with the medical loss ratio rules shows insurers spent more on care delivery and less on profit and overhead in 2013 than they did in the previous two years.
The report, “Consumers Benefited From 80/20 Rule in 2013,” from the federal Department of Health and Human Services (HHS) shows that the percentage of consumers insured by companies that met or exceeded the requirements under the MLR rules has risen each year since the rules became effective in 2011. Tables accompanying the report offer some great story ideas for journalists who want to dig deeper into why insurers in their states would pay rebates to consumers rather than put those funds into care delivery.
Also called the 80/20 rules, the MLR regulations in the Affordable Care Act require insurers to spend a minimum of 80 percent of premium income on delivering care (and not on profit and overhead) in the small group and individual markets and at least 85 percent of premium income on care delivery in the large group market.
Under the MLR rules, if insurers fail to spend at least at these levels, they have to rebate the difference to consumers. Those rebates are due by Aug. 1.
“In the first three years of the MLR program, individual and employer plan enrollees received or will receive over $1.9 billion in refunds,” the HHS report said. Continue reading
Even for those of us who cover the Affordable Care Act (ACA) more or less full time, July 22 was a pretty zany day. Here’s a recap and some resources to help you going forward.
First an appeals court in Washington, D.C., ruled, 2-1 that people can’t continue to get subsidies in the federal exchanges – just on the state exchanges. Only it didn’t move to enforce that ruling – which would cut off millions receiving subsidies – because the three judges on that panel knew they didn’t necessarily have the last word. There are more legal fights to come in the case, known as Halbig v. Burwell. (It was v. Sebelius but the name was updated.)
Then, less than three hours later, another appeals court – also a panel of three judges – in Richmond, Va., issued the exact opposite ruling. They said, 3-0, that the subsidies in the federal exchange were fine. Well, maybe not fine – they thought the law was ambiguous. But even with the ambiguity, they said that the IRS had the right to interpret the law to allow the subsidies in the federal exchange. That case is known as King v. Burwell. (The IRS set the rules for the subsidies, which take the form of premium tax credits.)
The question in very simple terms is this: Did the ACA allow the subsidies through the federal exchanges? The plaintiffs argue no – and cite a specific section of the law that refers to subsidies for people enrolled “through an Exchange established by the State.” They say it’s clear as day – the subsidies are tied to state exchanges. The administration and its supporters say that’s far too narrow and literal an interpretation. The whole law is designed to expand coverage and the federal exchanges are meant to stand in when the states don’t stand up exchanges.
Now what? Continue reading
Here’s a resource for health care costs – and a creative journalistic model of crowdsourcing, data collection, mapping, reporting and blogging.
ClearHealthCosts.com was started by former New York Times reporter and editor Jeanne Pinder. She received start-up funding from foundations (Tow-Knight Center for Entrepreneurial Journalism at CUNY and others listed on the website) and ClearHealthCosts now has a team of reporters and data wranglers chipping away at some of the difficult questions that patients need answered: How much is this treatment going to cost me? Can I find a better price?
It’s about shedding light on a health care cost and payment system that, to use Pinder’s word, is “opaque.” Some of what they are doing is specific to a half-dozen cities; other projects are building out nationally.
The data collected by ClearHealthCosts focuses on elective or at least nonemergency procedures such as imaging, dental work, vasectomy, walk-in clinics, screening (mammograms and colonoscopy) and blood tests. Much of the data is crowdsourced, and focused on New York area, including northern New Jersey and other suburbs; the San Francisco and Los Angeles areas; and Houston, Dallas-Fort Worth, Austin and San Antonio in Texas.
A recent grant from the John S. and James L. Knight Foundation via its Prototype Fund will let ClearHealthCosts collaborate with KQED in San Francisco and KPCC/Southern California Public Radio in Los Angeles to crowdsource Califoria prices. Earlier, Pinder’s team did a crowdsourcing partnership with the Brian Lehrer Show at WNYC public radio in which hundreds of women shared mammogram payment information, and their thoughts. It led to a series of blog posts including here and here. Continue reading
A couple of stories have begun to trickle out from states about the impact of Medicaid expansion on hospitals.
This one from the Arizona Daily Star by Stephanie Innes, for instance, reports that uncompensated care dropped by a third in the first four months of 2014 from the prior year – a pretty significant number. The hospitals in that period wrote off $170 million in 2014, versus $246 million from Jan through April in 2013.
She uses data from the state’s hospital industry to report on uncompensated care (both bad debt and uncompensated care) and the hospitals’ bottom line.
“The Arizona hospital report shows the average operating margin of Arizona hospitals has gone up from 4 percent in 2013 to the current rate of 5.2 percent — a signal to some health experts that the Affordable Care Act will be a net positive for hospitals’ bottom lines,” she wrote. Continue reading
Carla K. Johnson
When Illinois awarded a $33 million contract to a high-priced PR firm to promote insurance coverage under the Affordable Care Act, Carla Johnson began filing open records requests under the state’s Freedom of Information law.
Eventually Johnson, a medical writer for The Associated Press, filed 10 FOIA requests while reporting on how public money was spent to promote the health law.
She says the “88-page contract, obtained through a records request, contained clues about other existing documents, such as monthly detailed explanations of invoices and a ‘work plan’ required by the contract.” She continued filing requests until she had enough documentation to detect some trends.
Read more about how Johnson reported the story, what she learned and tips for other reporters.
We posted some data tools from the Robert Wood Johnson Foundation for the health reform beat and AHCJ’s New York chapter recently got to hear about them in more detail with some help from RWJF. If you’ve done stories using this data, we’d love to see them and learn about how you used the data. Send them to firstname.lastname@example.org.
Charles Ornstein Storyfied the meeting and we have this guide for you from RWJF. Continue reading
Kentucky, a southern state implementing the ACA, has gotten a fair amount of media attention and we’ve highlighted some of the coverage.
But, in impoverished rural areas that stood to gain the most from the greater access to care that the ACA promised, many residents remained fiercely opposed to the law and the president who pushed it.
Against this backdrop, a team from USA Today and The (Louisville, Ky.) Courier-Journal decided to launch an in-depth examination of how the law is beginning to play out in Appalachian Kentucky.
In an article for AHCJ, Courier-Journal medical writer Laura Ungar writes about how the team tackled the issue, combining local and national perspective and expertise. Read more.
Given the recent discussion on the AHCJ discussion list and elsewhere about the right balance between covering the politics of the Affordable Care Act versus the policy of the ACA, I thought it would be a great time to showcase a reporter who does both.
David Ramsey of the Arkansas Times has been all over the story of Arkansas’ “private option” Medicaid expansion. That’s definitely been a political story – Arkansas legislators have slugged it out for two sessions and it’s going to happen again next year, with the fate of Medicaid expansion always on the line. But Ramsey (@arkdavey) recently did a long and readable piece on the faces of Arkansas health care expansion. He matched the politics, the policy and the people. And he did more than present their faces. He captured their voices. Continue reading