ANTHEM TO ACQUIRE CIGNA, LEAVING ONLY 3 BIG INSURANCE COMPANIES

by CNN Money

In another merger of health insurance giants, Anthem has agreed to acquire Cigna in a $54 billion deal.

Anthem (ANTM), a Blue Cross and Blue Shield insurer, said it would buy all of Cigna's (CI)shares in a cash and stock transaction.

The deal is expected to close in the second half of 2016, if it passes state regulatory approvals and other requirements. The merged insurer would cover 53 million members.

The merger would leave only three major players in the insurance industry.

Earlier this month, Aetna (AET) struck a deal to buy Humana (HUM) for $37 billion, which would cover 33 million members.

The third remaining health insurer is UnitedHealth (UNH), which just completed its own $12.8 billion acquisition of Catamaran, a pharmacy-benefits manager and prescription provider.

There are titanic shifts going on in the entire healthcare space, where pharmacies are undergoing their own wave of consolidation. In May, CVS Health (CVS) agreed to acquire Omnicare (OCR) for $12.7 billion. And back in February, Rite Aid (RAD) agree to acquire EnvisionRx for $2 billion.

Hospital companies have also been expanding.

Experts say one factor driving the mergers is the Affordable Care Act.

Obamacare has meant more business for major insurers because more Americans have health coverage, but the law has also put more pressure on industry profits.

Related video: And then there were three. What will mergers do to healthcare costs?

Some doctors are concerned that the mergers will put too much power in just a handful of insurance companies. The American Medical Association said the mergers will "reduce competition and decrease choice."

There are also worries that costs for customers will go up because of less competition.

But the health insurers are defending their move.

"This will actually improve efficiencies and reduce costs for consumers down the line," said Cigna spokesman Matt Asensio.

This is assuming that the merger gets past federal regulators, which remains to be seen.

"The DOJ and FTC are going to look at this hard," said Tucker Sharp, chief broking officer for Aon Heatlh, a consultancy for health insurers. "They were already concerned that there wasn't enough competition."

Sharp said that because of Obamacare restrictions, insurers lack the power to raise prices when they want.

He said Cigna customers might end up with more choices of doctors in an expanded provider network. However, its increased clout could hurt smaller competitors, who might see their network of doctors shrink.

Cigna is active in the U.S. and 29 other countries, primarily through employer benefits for ex-pats working around the world. Anthem serves customers in 26 states.

Cigna has been a big player among employers and has only dipped its toe into offering coverage through Obamacare exchanges. Anthem is a major presence in Obamacare plans.

Moody's Investors Service placed Cigna's debt ratings on review for downgrade following the merger announcement. Moody's said Anthem would assume $5.1 billion in Cigna's notes, and that its review "will focus on the completion of the transaction and the impact on Anthem's ratings."

Related: Will the mergers make you pay more for health insurance?

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THE FUTURE OF PUBLIC HEALTH

By Thomas R. Frieden, M.D., M.P.H.

The field of public health aims to improve the health of as many people as possible as rapidly as possible. Since 1900, the average life span in the United States has increased by more than 30 years; 25 years of this gain have been attributed to public health advances.1,2 Globally, life expectancy doubled during the 20th century,3 largely as a result of reductions in child mortality attributable to expanded immunization coverage, clean water, sanitation, and other child-survival programs.4

Public health focuses on denominators — what proportion of all people who can benefit from an intervention actually benefit. Maximizing health requires contributions from many sectors of society, including broad social, economic, environmental, transportation, and other policies in which government plays key roles; involvement of civil society; innovation by the public and private sectors; and health care and public health action. Although there has sometimes been distrust and disrespect between the health care and public health fields,5 they are inevitably and increasingly interdependent; maximizing potential health gains is a defining challenge for both fields.

 

Building a Public Health Pyramid

To maximize impact, public health works at five levels (Figure 1Figure 1The Health Impact Pyramid.). At the first level — the base of the pyramid — are socioeconomic factors such as income, education, housing, and race. Although these factors are not diseases, both public health efforts and health care can have some effect on them — for example, through health insurance coverage that reduces poverty or through prevention of teen pregnancy to reduce the perpetuation of poverty. Immediately above the socioeconomic factors are traditional public health interventions that change the context to make default decisions the healthy choices (e.g., by providing clean drinking water). At the next level are long-lasting protective interventions, such as immunizations, that require only intermittent action by the health care system. Next are clinical interventions requiring long-term, daily care, such as blood-pressure control. The last level includes counseling and education, such as exhorting people to eat healthy food and be physically active. Each level is important, but interventions at the pyramid’s base generally improve health for more people, at lower unit cost, than those at the top.6

To increase the impact of clinical care on population health, improvements in the third and fourth levels need to be implemented more effectively. Blood-pressure control, which can save more lives than any other clinical intervention,7 is successful in only about half of Americans; nearly 90% of patients with uncontrolled hypertension have both health insurance and a regular source of care, and more than 80% have multiple contacts with the health system each year.8

To maximize health overall, both communicable and noncommunicable disease threats need to be addressed in the United States and globally. There are important connections between infectious and noninfectious diseases: most cases of cervical cancer and many cases of liver cancer can now be prevented through vaccination; diabetes, obesity, and tobacco and alcohol use increase risks of both cancer and infections. U.S. and global health are also inextricably connected, as outbreaks of Ebola virus disease and the Middle East respiratory syndrome (MERS) and the spread of drug resistance make clear. Nevertheless, it is useful to give separate consideration to ways of addressing infectious and noninfectious conditions.

Infectious Diseases in the United States

Despite progress over the past century, the United States continues to face substantial infectious disease challenges. Human immunodeficiency virus (HIV) infection, hepatitis C virus infection, drug-resistant bacteria, health care–associated infections, and preventable influenza and pneumonia continue to kill more than 100,000 people in the United States each year.9-11 The increase in drug resistance, higher prevalence of risk factors such as diabetes and obesity, aging of the population, and greater complexity of medical interventions make infectious-disease control increasingly important and challenging. Addressing these challenges requires a combination of technological advances, more effective clinical and administrative systems, and political commitment to invest in prevention and control.

From a public health perspective, an effective clinical system has five essential characteristics: consistency, patient-centeredness, team-based care, registry-based information systems, and continuous improvement in treatments and delivery. These core features can help clinical systems address infectious-disease threats through standardization of care, interventions that increase patient adherence, team-based approaches to care (including hospital stewardship programs),12 rigorous monitoring of outcomes, and continuous improvement in detection, treatment, and prevention. Standardization and team-based care can increase vaccination rates and reduce prescription of unnecessary or overly broad-spectrum antibiotics. Registry-based approaches have the potential to increase the proportion of patients with HIV infection who are effectively treated from the current rate of 40% or less in the United States.13 Coordination among health care facilities and public health departments can substantially reduce the spread of drug resistance.14

Technological advances present new opportunities for infectious-disease control. These include large-scale, real-time whole-genome sequencing, which can improve identification of organisms, resistance, and infection clusters and elucidate the effects of the microbiome on health. New technologies complement and enhance but do not replace core epidemiologic functions.

 

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TELEMEDICINE IS VITAL TO REFORMING HEALTH CARE DELIVERY

by Joseph C. Kvedar, MD

Health care remains one of the few services that require people to have a face-to-face interaction to obtain access. But more and more consumers are questioning that reality, and change is on the way. In January 2015, the Centers for Medicare and Medicaid Services (CMS) issued a new provider reimbursement code for non–face-to-face health care services for patients who have chronic medical conditions. A new CMS code may seem like a tiny matter, but this one emblemizes a larger shift toward delivering health services independently of time and place, enabled by technologies such as smartphones, sensors, and wireless health-monitoring devices — what we in the field call telemedicine.

The concept of telemedicine is not new (its roots go back to the late 1950s). In the 21st century, the widely held goal of improving health care outcomes while lowering costs is accelerating the shift from a one-to-one to a one-to-many model of care delivery, which telemedicine makes possible. Understanding telemedicine has now become crucial for decision makers in the health care industry, and I aim to help in that effort. Let me start by exploring some industry fundamentals.

The rising prevalence of chronic illnesses in an aging population puts pressure on the supply side of health care. Clinicians are not being trained fast enough to keep pace with the rate of service demand. In addition, given the rising cost of care, new models for reimbursing hospitals and other providers have begun to emphasize quality and efficiency rather than units of delivered services. And consumers are increasingly shopping on open markets for health insurance policies that require significant deductibles and out-of-pocket expenses. These trends underpin the need for a one-to-many model of care delivery that offers flexibility and transparency.

Telemedicine is well positioned in this environment, particularly given patients’ growing comfort with technology in their consumer endeavors. The core technologies of telemedicine include those that collect data (such as wearable and ingestible sensors, and vital-sign and health-status monitoring) and those that enable communication (videoconferencing, text-messaging, mobile apps, and voice calls). These types of virtualized services will become an integral part of care delivery. Indeed, several commercial payers are now reimbursing providers for video-based visits, not to mention the CMS’s new telemedicine-friendly reimbursement code.

How does telemedicine work in practice? Here are some common examples:

  1. When patients with congestive heart failure use a home-based weight scale and a blood pressure cuff, and then check in routinely by phone with a nurse, their survival rates improve, and costs decline. A nurse can care for hundreds of patients at a time in this way, keeping them healthy and happy in their homes and away from costly emergency rooms and hospital beds.
  1. For patients with mental illness, video follow-up visits with a mental health provider have been shown to improve quality and efficiency of care. The provider can more easily assess environmental influences on the patient’s condition, and patients more accurately reveal their daily state of being because they don’t always have to endure the stress of traveling to an office and the social anxiety of sitting in a waiting room with other patients.
  1. Text-messaging interventions can aid in smoking-cessation efforts. My institution is collaborating on a texting intervention for smokers who try “practice quits” (quitting for a short period, such as an hour or a week). Timed text messages help the smoker cope with cravings, encourage longer practice-quit commitments, and applaud successes. The smoker can also text in the word “crave” and receive text-based coaching on the spot. Relatively automated systems like this one have great potential for improving public health.
  1. Both Walgreens and CVS offer virtual video care as an extension of their retail clinics. Many health plans, led by UnitedHealth Group, are doing the same. These offerings will push hesitant providers to offer these services as well.

Despite those examples, most telemedicine efforts are still in early, small-scale phases of implementation. Countervailing forces, like these, stand in the way:

  • Although most young doctors are digitally savvy, they represent a much smaller group than the physicians who were trained in an era when a face-to-face interaction with a patient was the only option.
  • Fee-for service reimbursement, still the dominant payment model in the U.S., is fundamentally at odds with a one-to-many model of care delivery.
  • Some doctors worry that virtual care will mean greater liability, even though most malpractice insurance carriers are telemedicine-friendly and the case law on virtual care is almost nil.
  • State physician-licensure laws in the U.S. create false geographic barriers that have impeded some forms of telemedicine. For example, some laws require that a physician be licensed in the state where his or her patient is located.
  • Many health insurers fear that telemedicine will lead to overutilization — such as a doctor looking at an image of a patient’s mole, submitting a bill for the virtual service, and then saying he needs to see the patient in person to be sure.
  • Frequent users of health care services are typically disproportionately less tech-savvy and place great value on their social interactions with their clinicians.
  • Privacy concerns about remotely delivering care persist.
 

Even if all of these obstacles are overcome, face-to-face care visits will not become obsolete, given the complexity of some patients’ clinical profiles and illnesses, especially when a doctor needs to arrive at an initial diagnosis. And some highly sensitive communications (such as news of a newly diagnosed cancer) are obviously best conveyed in person. But for health care interactions that are algorithmic in nature (think: blood pressure checks and acne follow-up visits) or that have a low emotional impact, virtual encounters can be ideal for both parties.

Pressure to lower costs also bodes well for innovation in telemedicine’s one-to-many model of care delivery. Early results suggest that new payment models that reward providers for higher quality and efficiency (including virtual care) are working.

I am excited about the possibility of automating certain care-delivery processes and using technology to enable patients to obtain better care. The advertising industry now has a model for collecting and analyzing consumers’ digital fingerprints so that ads can be personalized. In a somewhat similar vein, people can now have their walking steps counted, purchasing behavior tracked, and mood and other health indicators monitored to create a highly personalized messaging program that motivates them to improve their health.

If we do telemedicine right — with the direct and enthusiastic consent of the patient — I believe that most people will make the privacy tradeoffs. Realizing the potential of telemedicine will indeed require those tradeoffs if we want to improve the current system of health care delivery.

 

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HOW PHYSICIANS SHOULD NEGOTIATE WITH PAYERS

By Raju Kurunthottical, DO

In order to sustain viable revenue, it is prudent to analyze and effectively negotiate healthcare payer contracts. Cost analysis should be performed in an organized way to establish dollar value on tangible and intangible items. You need to have a clear understanding of business principles, current market trends, and the cost of delivering quality healthcare.

Healthcare contracts are legal documents and need to be reviewed carefully.  Many physicians sign  payer contracts without negotiating.

Often the payer will say, “This is what we are paying in your market. Take it or leave it.”  We must understand that the terms in the contract are not immutable.  We have to create and demonstrate value in terms of data, quality of care and cost- effective, long-term goals that benefit the team as a whole.

9 points to consider when negotiating with payers

Even if the practice is run efficiently,  with low overhead, if the payer contracts are not properly negotiated or worded, it can  result in a loss in net revenue.  

There is a benefit in numbers, the larger the organization, the greater the leverage.

The organization can do SWOT analysis, which is assessment of strength, weakness, opportunities and threats to the practice. For example, internal strengths can be analyzed by reviewing: the number of new patients enrolled in the plan, utilization of revenue and expenses with quality measurements, patient satisfaction reports, benchmarking quality and efficiency, providing service that is unique and new in the current market and networking with peers at state and national levels.

In looking at weaknesses, we need to analyze the fee schedule, which is a percentage of the current Medicare fee.

To help reveal the rates and overcome payment inequities, we can create a utilization report to capture and review data. Using a spreadsheet, determine the frequency of a current procedural terminology code and the number of times it was billed to that payer. Multiply that by the current payment amount.  Determine the break even point. This is done by adding overhead and physician compensation by total frequency of all codes for that payer. The results are weighted average cost.  Compare the weighted average cost to weighted average reimbursement.

Threats are when contract start and end dates are not monitored. We need to know how much notice is required to make any changes. It may be advisable to start discussions with the payer representative 150 days before the contract term ends. It helps tremendously when the communication is channeled through one individual from the health plan with whom a business relationship has been built.

PREPARING FOR NEGOTIATIONS

In preparation for negotiations, we need to set a bargaining range that includes optimum and minimal target goals. The optimum goal is where the terms are ideal. The minimum goal is the point which absolutely has to be met. The target is the point where you would like to be at the end of negotiation. 

It would be advisable to meet face-to-face with the payer representative and present clear data and  requests for change, and to listen to what the representative has to say.  The person who has the most experience with complex negotiations should do this.

It would also help to know the issues of concern to the payer. For example, if the payer’s concern is with high use of ancillary services, it would help to point out how effectively you manage the use of these services. You can show cost control and forecast the predictable costs. Share practice data that shows compliance and improved outcomes.

Demonstrate the efficiencies that reduce  costs, and that the goal of this business relationship is to provide cost-effective healthcare. This can be done by showing  the payer how many of their members avoided hospital re-admissions because of the effective, quality healthcare you provided.

There are other items to negotiate in the contract. The prior authorization process can be made easier. The period for submitting a claim may be extended. Improvement and ease of the appeal process is helpful. Timely payment and interest on late payments need to be clarified.

6 tips for improving your negotiating skills

 When presented with a well-documented and organized data analysis, the payer may be able to recognize the value your practice brings to its members. This, in turn, will help increase the revenue generated, anywhere from a 3% to 10% increase in reimbursements.

In conclusion, it is essential that payer contracts are carefully reviewed for their fee schedules and the provisions that can alter the net revenue a practice generates. Research shows that larger corporations have an added advantage in using volume of providers that service their clients.

If there are clauses in the contract that the insurance companies won’t negotiate that affect your  break even point, a letter of intention to discontinue the contract should be sent. Ultimately, the payer may come to realize that a large portion of its members would not have care providers and would thus reconsider their position.

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HERE'S WHY A TRUMP PRESIDENCY IS GOOD FOR PHYSICIANS AND PATIENTS

By Dr. Koka

Improbably, a real estate tycoon turned reality TV star with no political experience has been elected president by a fiercely divided nation.

There are a number of questions about the plans of a Donald Trump administration with regards to healthcare, and patients and physicians are understandably fearful. Seismic shifts like this in the political landscape make it difficult to find certitude in predictions on healthcare policy, but there are a number of clues to suggest that the landscape of healthcare may be an improving one for patients and the physicians charged with taking care of them.

At the top of the agenda for both Trump and Congress is repealing the Affordable Care Act (ACA). Clearly, this is much easier said than done. The healthcare reform law is a complex series of expansive regulations that touches payment reform, healthcare delivery and, oh, by the way, also covers 20 million Americans. The easiest to kill of the three would seem to be the Obamacare marketplace covering all those Americans that is propped up by federal subsidies that take the form of “cost sharing” payments to insurance companies. Eliminating funding for these subsidies would make insurers exit the Obamacare marketplace and make it nonviable.

Millions of patients currently with insurance would suddenly lose their health plans. No one wants this, and Trump and the Republican Party now face intense pressure to come up with a replacement. As a result, I find it very unlikely that physicians or patients will suddenly have to deal with a large number of patients without insurance. There are also encouraging signs that the replacement plans being discussed will more than likely include health savings accounts—a Trump/GOP favorite—that will be allowed to directly pay primary care physicians in a subscription model similar to direct primary care. This capitated model puts physicians, rather than insurance companies, in the driver’s seat and would be music to the ears of primary care physicians in desperate need of a lifeline

 The biggest immediate headache is the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which physicians will have to face in less than two months, but it only slightly overlaps with the ACA. The overlap relates to the Center for Medicare & Medicaid Innovation (CMMI) that was funded by the ACA, and created some of the important value-based payment models physicians were going to have to comply with to avoid reimbursement penalties. The wide latitude given CMMI to propose and deploy Advanced Alternative Payment Models (APMs) under Medicare payment reform has already come under scrutiny by Republican legislators prior to a Trump victory. One would expect that in the Trump era, CMMI is unlikely to survive in its current form. This would provide significant relief to physician practices enrolled in APMs struggling to cope with the time and cost of the seeming barrage of regulatory hoops to jump through.

The good news with regards to physician income is that the Medicare penalties set to begin in 2019 as part of MACRA for those physicians who either don’t report or inadequately report data may be moot. I have trouble believing that a party and a candidate that railed against Obamacare’s big government will continue to penalize physicians for not reporting in to Big Brother. At the very least, I am hopeful there will be other avenues provided to physicians to avoid penalties. The bad news with regards to physician income, especially for those primary care physicians already under a fair amount of duress, is that income is unlikely to go up anytime soon given the difficulties attendant in making the elephant that is the healthcare economy pivot on a dime.

One may hope that physicians may at least see relief in the form of a friendlier tax code given candidate Trump’s many promises regarding lower taxes. Trump’s stated tax plan would reduce the top tax rate from 40% to 33%, and for physicians in private practice, the tax rate for small businesses would be a guiltily low 15%. These numbers, of course, are more representative of a low opening bid to a democratic minority sure to be vehemently opposed to significant tax reduction. As is true of healthcare policy, the overwhelming likelihood is that the short-term fiscal climate will not get better or worse. Given that a Clinton administration promised more regulation and higher taxes, this should still assuage many physicians.

The effect of electing Trump has completely changed the tenor of the conversation in healthcare. Our former healthcare policy masters that long worked successfully to transfer power from independent physicians to large clinically integrated networks that employ physicians are, for the moment, on the outside looking in. The idea that we may be entering an era that empowers physicians rather than devalues them should fill all of us with great optimism.

Read The Original Article

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SURPRISE MEDICAL BILLING IS A SCAM BY INSURANCE COMPANIES

By Don R. Read, M.D

Surprise billing is a big problem — physicians agree with our patients.

It’s easy to understand why someone with health insurance gets frustrated with an unexpected bill for dozens or even thousands of dollars from a physician, hospital or medical provider.

“Why did I get this bill?” the patient asks. “I have insurance. I’m covered!”

Why indeed?

People receive surprise bills because that’s what their insurance companies want to happen.

It’s part of their business plan: Make their insurance look valuable.

Price the plan as attractively as possible. Enroll policyholders. Collect their premium dollars … then do whatever they can to keep most of those dollars rather than spend them on healthcare.

For patients, insurance is to help them pay for care. But for insurers it’s a business.

They call paying for care a “medical loss.” And they fight to keep that figure in their favor, to pay less for your care.

Insurance companies advertise robust networks full of physicians and facilities “in-network.”

Then they set up small (or narrow) networks of physicians to save themselves money.

Why? Because if the network is small, odds are more policyholders wind up receiving care from an out-of-network physician.

Meanwhile, the insurers pay just a fraction of the charge to those out-of-network physicians. They know the physicians and hospitals will bill the patient for the balance.

But they don’t tell the policyholder that.

The more enlightened of our patients might ask the doctor, “Do you take x Insurance?”

But x insurance might sell hundreds of plans. Just because we are contracted with some of those plans doesn’t mean we are in-network with all of them.

To lower monthly premiums and make the plans more attractive, insurers also raise deductibles patients must pay, or limit what is covered.

One plan famously cut all cancer care from a major Texas hospital from its coverage.

Doctors want to be in-network because that sends more patients our way. But getting in can be tough.

The University of Pennsylvania studied Affordable Care Act insurance networks across the country and found Texas among the worst.

They rated 45 percent of the Texas networks as “x-small” and 27 percent as “small.”

One physician told Texas legislators this summer how his practice negotiated in-network contracts with nearly every plan in his area.

But one stubborn outlier company refuses to deal with the doctors. So all of that plan’s policyholders are forced into an out-of-network situation.

Insurers squeeze networks smaller to retain more profits and pay less for care. Frequently, policyholders find out just how narrow their network is during a medical emergency.

Understandably, no patient landing in the emergency room with a broken leg — or worse — will stop to ask whether the doctor rushing to mend or save her is in her network.

And every physician in that ER is focused on easing the patient’s pain and healing her, not on her insurance coverage.

But those physicians are independent contractors at the hospital. They aren’t necessarily in the same networks as the facility itself.

Many of them tried to negotiate to be in-network, to no avail.

Texas Medical Association doctors studied the problem for more than a year, and we prescribe a sure-fire treatment.

We want the state to make sure health plan networks have enough physicians and hospitals.

We want insurance companies to do a better job of explaining to patients the limitations of the plans they buy — before and after the sale.

We want physicians and insurers to tell patients ahead of time who might be involved in their care.

And we want to strengthen the current mediation process patients can use to resolve disputes over surprise bills.

People would not buy auto insurance knowing they could take their car only to one shop to have the insurance to help pay for repairs.

Health insurers are selling insurance to people who expect their insurance is accepted by many doctors and hospitals and will pay for all types of care.

But when they go to use it, they find that is not the case.

We all need to help people understand health insurance and get insurers to be more forthright in their business practices to help their policyholders — our patients.

 

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OUR CONVOLUTED HEALTH CARE PAYMENT SYSTEM

By Cory Michael, MD

Three men walk into a deli for lunch, take a number, and sit quietly until called. There are no prices on display, nor is the food visible. The first man, Ron, is called to the counter and states that he is hungry when asked what brings him in. He presents his food insurance credentials, and five minutes later, he walks out the door with a 12-inch gourmet sandwich, a side salad, and a smoothie in exchange for a co-pay of $1. The following week, Ron’s insurance company sends him an explanation of benefits in which the deli’s charge for the food was $15, but the large size of the company allowed them to negotiate a price of $9. The remaining $8 was covered as a benefit.

The next customer, Bill, is called and presents with the same complaint. Review of his credentials shows what he is eligible for, a 6-inch generic sandwich and a bottle of water. He gets his food after twenty minutes. His co-pay is $3. The food is unsightly and unsatisfactory in taste. Bill leaves and pays cash for lunch elsewhere. His explanation of benefits later reads that the charged price was $10 negotiated to $7 by the insurance company, but only a $3 benefit is possible for lunch. The deli later sends him a bill for the remaining $1 even though his lunch was inadequate.

The third customer, George, waits thirty minutes until served. His food insurance does not cover primary lunch, and the deli initially refuses to serve him as a result. After some discussion, they agree that he can have a 4-inch mini sandwich and a water cup for a cash price of $15. Hungry, he agrees.

Ridiculous as it sounds, the scenario presented approximates the U.S. health care system, and I have actually been on the customer side of all three types of plans in addition to being uninsured for the first nine years of my adult life. My current insurance is a “mid-level” product similar to Bill’s plan.

Enter my latest health care issue: hypertension. My blood pressure crept up on me about a year ago, but it wasn’t until I sacked my internal medicine physician and opted for a nurse practitioner that I learned sleep apnea may be contributing to my elevated blood pressure, as I had been told that I snore horribly and sometimes stop breathing. I decided to test the possibility by sleeping in my hospital overnight with a pulse oximeter (oxygen monitor) on my finger with a nurse checking in on me periodically. To my surprise, my oxygen levels dropped down to 70 percent (normal is around 95 to 100 percent) during episodes of apnea (cessation of breathing).

I next sought out a continuous positive airway pressure (CPAP) device to remedy the situation and found one I liked for about $900 cash which I was willing to pay out of pocket so that I could start sleeping better as soon as possible. I talked to a respiratory therapist in my hospital who agreed to help me adjust the pressure setting.

Hold it right there. I couldn’t get the device without a prescription from a sleep specialist ($150 co-pay for the initial consultation and charge to insurance of an additional $45), sleep study (cost billed as $3,800 but negotiated by insurance to $900, $350 of which I had to pay out-of-pocket), additional physician consultation for the results ($15 co-pay with $60 kicked in from insurance), and then a rent-to-own plan for the device (another $400 from me/$600 from insurance; original “price” of $1,500 but available online for $850 cash). The sleep study addressed additional concerns such as restless leg syndrome, bruxism (clenching of teeth), and the loudness of my snore, none of which were concerns of mine. I did check the box on the questionnaire that I had problems with nightmares, but the physician said that she only treats sleep apnea.

If you are keeping track, yes, I spent about as much using the “appropriate” channels as if I would have if I had simply paid cash for the device. My insurance (and thus any of you who share my plan) also chipped in considerable extra costs among the red tape, not to mention the additional month I went without the CPAP. Suffice it to say that it became clear to me why people set up sleep centers. Perhaps there is a bit of humorous irony in a radiologist complaining about this, but it should be said that I am paid a flat salary by a hospital and make no extra compensation in the unnecessary exams that I interpret. I am well aware, however, that the hospital “charges” at least double the real cost of most procedural devices that I use. They can do that when there is no transparency, i.e. no price on the wall.

Regarding the “freedom of choice” we love so dearly, I had no choice at all in this encounter. The sleep lab, consultant, and CPAP were all chosen by my insurance company, the only company my employer offers.

Another point highlighted here is that the major benefit of health insurance is not what the company pays but what the company negotiates on your behalf. The charged price of the sleep study (the diagnostic test), for example, is more than double the cost of the CPAP (the treatment). In other words, this is one of those common cases in which the treatment costs less than the diagnosis. When people complain that Canada doesn’t have enough MRI machines, for example, they should also consider whether or not they actually need more.

Health care payment is indeed a system so confusing that the typical American — despite a robust thirst to complain about system modifications (I have even entertained rants from free clinic patients) — probably doesn’t understand his or her own health insurance. So true is this that when the Affordable Care Act attempted to eliminate plans similar to George’s above, Americans screamed in outrage. Among my own social circle, I found that some of those most likely to desire George’s plan were actually physicians who would rather gamble with their own health than pre-pay for basic service coverage (which is actually a tax shelter).

Since Americans seem to resist change no matter the cost, status quo seems to represent our foreseeable future. I suppose I should just be happy that the trumped-up concept of death panels hasn’t come to fruition lest my sleep apnea and hypertension make me ineligible for coverage. I should just smile and have a sandwich. Wait, I just realized that the nearby deli isn’t in my network.

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TRUMP’S EXECUTIVE ORDER ON HEALTH CARE — CAN IT UNDERMINE THE ACA IF CONGRESS FAILS TO ACT?

Original story by Timothy Stoltzfus Jost, J.D., and Simon Lazarus, J.D.

Within hours after taking the oath of office, President Donald Trump executed his first official act: an executive order redeeming his campaign pledge to, on “day one,” begin repeal of the Affordable Care Act (ACA).1 The New York Times characterized his action as itself “scaling back Obamacare,” and the Washington Post said the order “could effectively gut [the ACA’s] individual mandate” to obtain health insurance coverage. But consumer advocate Ron Pollack dismissed Trump’s action as “much ado about very little.”

To put these divergent assessments into perspective, it’s important to examine the actual executive order, recognize the departures from the Obama administration that it contemplates, and assess the scope and significance of changes the administration can lawfully make by executive order or other administrative actions.

President Trump cannot repeal the ACA by executive order. The ACA is a statute, enacted by Congress, which under the Constitution only Congress can repeal or modify. Furthermore, the order does not itself change existing regulations. Rather, it provides instructions or guidelines as to how Trump wants responsible agencies to exercise their discretion in interpreting and applying statutory requirements. The order appropriately recognizes that the new priorities it outlines can be followed by administration officials only “to the maximum extent permitted by law.”

The new priorities set out in the order are to “waive, defer, grant exemptions from, or delay the implementation of any provision,” in order to minimize costs and regulatory burdens imposed on states, private entities, and individuals; “provide greater flexibility to States”; and “encourage . . . a free and open market in . . . healthcare services and health insurance.”

Unsurprisingly, the new president’s policies differ from those of his predecessor, who repeatedly stressed that his top priority was to “ensure that all Americans have access to high-quality, affordable health care.”2 The salient question, however, is whether the new administration’s policy preferences square with the goals prioritized in the ACA itself.

Congress explicitly indicated that its priority in adopting the ACA was to “provide affordable health care for all Americans,” primarily by expanding access to health insurance and Medicaid for consumers with low or moderate incomes or preexisting conditions. To be sure, cutting private-sector costs, providing state flexibility, and encouraging free markets may be appropriate factors for officials to consider in implementing virtually any law. But these policy priorities cannot be implemented in such a way as to render inoperable the goals and priorities integral to the ACA’s statutory scheme. Giving primacy reflexively to the executive order’s directions across the board, if it results in disregard for the statute itself, will actually weaken the administration’s legal defense of specific administration initiatives to contract the ACA.

The Trump administration’s hopes to replace the Obama administration’s policies and requirements “immediately” are likely to be frustrated because provisions of the ACA have been implemented primarily through rulemaking under the Administrative Procedure Act (APA) and can therefore only be changed through rulemaking. Detailed regulations govern, for example, the essential health benefits that insurers must cover in the individual and small-group markets, the bans on exclusions for preexisting conditions and on annual and lifetime coverage limits, procedures for claiming premium tax credits and cost-sharing reductions, coverage of adult children on their parents’ policies to age 26, and many other key provisions of the ACA.

The APA requires agencies that wish to adopt regulations binding on the public — or that want to modify, repeal, or replace existing regulations — to publish proposed rules in the Federal Register, allow interested parties time to submit comments, and publish a final rule responding to comments and explaining their reasoning for rejecting (or accepting) them, including their reasoning for changing an existing rule. The Trump executive order explicitly acknowledged that federal agencies must follow the APA. Indeed, the administration has just released a proposed rule aimed at adjusting some regulations to stabilize insurance markets.

Many ACA regulations have been refined through administrative “guidance.” For example, the Obama administration issued guidance in 2015 detailing requirements that states must meet to receive innovation waivers under an ACA provision that authorizes states to propose different approaches to implementing ACA goals. Administration officials could alter earlier waiver guidance without encountering lengthy rulemaking delays. But new waiver guidance would still have to comply with existing procedural requirements governing waivers — and of course with underlying statutory waiver provisions. Both are quite specific.

Some observers have speculated that the Trump administration might simply stop enforcing ACA requirements — for example, cease collecting tax penalties for noncompliance with the individual mandate or stop requiring insurers to cover the ACA’s essential health benefits. For its part, the Obama administration was criticized for delaying enforcement of the ACA’s mandate that requires large employers to cover their employees or pay a tax and for allowing states to permit individuals to keep noncompliant health insurance plans beyond the 2014 effective date of the ACA reforms.

But whatever one thinks about the Obama administration’s actions, it is one thing to delay temporarily a legal requirement or to phase in a new law to facilitate adjustments by affected people or entities; it is quite another to refuse outright to enforce a law already in force, with the aim and effect of undermining that law.3 The Supreme Court has said that courts may step in to correct any such “abdication” of the executive branch’s duty to faithfully execute the law. In fact, the Internal Revenue Service announced on February 15 that it is still enforcing the individual mandate, although it will not be beginning a new program to tighten up enforcement at this time.

Some commenters have suggested that rather than refusing to enforce the individual mandate, the administration might simply try to hollow it out, relying on the authority the ACA gives the Department of Health and Human Services to grant “hardship” exemptions from the mandate. The Obama administration recognized some categories of hardships, and the Trump administration could recognize more. But expanding hardship exemptions broadly enough to render the mandate meaningless would be forcefully challenged in court. Congress could not have meant to authorize exceptions that, in effect, swallow the rule.

In a critical 2015 Supreme Court case upholding nationwide availability of ACA “premium assistance” tax credits for eligible low-income insurance purchasers, Chief Justice John Roberts held that courts and agencies must interpret and apply individual provisions of a law — indeed, of the ACA in particular — so as to further its overall “legislative plan.” Roberts concluded: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. . . . [W]e must interpret the Act in a way that is consistent with the former, and avoids the latter.”4 A de facto blanket hardship waiver would seem difficult to square with this standard.

Over time, the Trump administration will undoubtedly revoke or amend Obama administration rules or guidance. But major changes in the ACA’s regulatory environment will require the cooperation of several federal agencies and often state regulators as well.

Precipitous changes in the enforcement of the law would severely disrupt insurance markets, with political, no less than policy or humanitarian, consequences. The Congressional Budget Office projects that gutting the law would lead comparatively healthy people to drop coverage, forcing insurers to raise premiums or withdraw from markets altogether. Such actions would, in turn, further shrink the insurance pool, raise premiums, and reduce insurance availability — resulting in an increase of 18 million in the number of uninsured Americans by 2018.5 Mulling such prospects, Republican strategists, both in and outside the administration, are reportedly already having second thoughts about precipitously sabotaging the ACA.

 

Disclosure forms provided by the authors are available at NEJM.org.

This article was published on February 22, 2017, at NEJM.org.

Source Information

From Washington and Lee University School of Law, Lexington, VA (T.S.J.); and the Constitutional Accountability Center, Washington, DC (S.L.).

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ANTHEM CONTRACTOR LEAKS DATA OF 18,000 MEDICARE MEMBERS

Anthem BlueCross BlueShield has been hit with a data breach affecting more than 18,000 Medicare members, it reported on July 24.

The data breach came from Anthem’s Medicare insurance coordination services vendor LaunchPoint Ventures. An employee stole and misused data including Social Security numbers, Health Plan ID numbers, names, and dates of enrollment.

In a 2015 security breach at Anthem, hackers stole as many as 37.5 million records containing personally identifiable information. A settlement was reached that called for Anthem to improve its data security safeguards and required a credit protection program for the children affected by the breach. Senators also demanded Anthem release notifications on data breaches more swiftly after 2015.

In an analysis done by Comparitech.com in July, it was discovered that following a data breach, a stock falls on average 0.43% and recovers in a little over a month, and that share prices grow more slowly for three years after a breach. The study also found that "breach fatigue" may be lessening the impact of a breach on a company's stock performance.

In the February 2015 data breach, Anthem advised affected Medicare members that they could expect to be individually notified by Anthem if their information was accessed.

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HOW GOVERNMENT KILLED THE MEDICAL PROFESSION

By Jeffrey A. Singer

I am a general surgeon with more than three decades in private clinical practice. And I am fed up. Since the late 1970s, I have witnessed remarkable technological revolutions in medicine, from CT scans to robot-assisted surgery. But I have also watched as medicine slowly evolved into the domain of technicians, bookkeepers, and clerks.

Government interventions over the past four decades have yielded a cascade of perverse incentives, bureaucratic diktats, and economic pressures that together are forcing doctors to sacrifice their independent professional medical judgment, and their integrity. The consequence is clear: Many doctors from my generation are exiting the field. Others are seeing their private practices threatened with bankruptcy, or are giving up their autonomy for the life of a shift-working hospital employee. Governments and hospital administrators hold all the power, while doctors—and worse still, patients—hold none.

The Coding Revolution

At first, the decay was subtle. In the 1980s, Medicare imposed price controls upon physicians who treated anyone over 65. Any provider wishing to get compensated was required to use International Statistical Classification of Diseases (ICD) and Current Procedural Terminology (CPT) codes to describe the service when submitting a bill. The designers of these systems believed that standardized classifications would lead to more accurate adjudication of Medicare claims.

What it actually did was force doctors to wedge their patients and their services into predetermined, ill-fitting categories. This approach resembled the command-and-control models used in the Soviet bloc and the People’s Republic of China, models that were already failing spectacularly by the end of the 1980s.

Before long, these codes were attached to a fee schedule based upon the amount of time a medical professional had to devote to each patient, a concept perilously close to another Marxist relic: the labor theory of value. Named the Resource-Based Relative Value System (RBRVS), each procedure code was assigned a specific value, by a panel of experts, based supposedly upon the amount of time and labor it required. It didn’t matter if an operation was being performed by a renowned surgical expert—perhaps the inventor of the procedure—or by a doctor just out of residency doing the operation for the first time. They both got paid the same.

Hospitals’ reimbursements for their Medicare-patient treatments were based on another coding system: the Diagnosis Related Group (DRG). Each diagnostic code is assigned a specific monetary value, and the hospital is paid based on one or a combination of diagnostic codes used to describe the reason for a patient’s hospitalization. If, say, the diagnosis is pneumonia, then the hospital is given a flat amount for that diagnosis, regardless of the amount of equipment, staffing, and days used to treat a particular patient.

As a result, the hospital is incentivized to attach as many adjunct diagnostic codes as possible to try to increase the Medicare payday. It is common for hospital coders to contact the attending physicians and try to coax them into adding a few more diagnoses into the hospital record.
Medicare has used these two price-setting systems (RBRVS for doctors, DRG for hospitals) to maintain its price control system for more than 20 years. Doctors and their advocacy associations cooperated, trading their professional latitude for the lure of maintaining monopoly control of the ICD and CPT codes that determine their payday. The goal of setting their own prices has proved elusive, though—every year the industry’s biggest trade group, the American Medical Association, squabbles with various medical specialty associations and the Centers for Medicare and Medicaid Services (CMS) over fees.

As goes Medicare, so goes the private insurance industry. Insurers, starting in the late 1980s, began the practice of using the Medicare fee schedule to serve as the basis for negotiation of compensation with the doctors and hospitals on their preferred provider lists. An insurance company might offer a hospital 130 percent of Medicare’s reimbursement for a specific procedure code, for instance.
The coding system was supposed to improve the accuracy of adjudicating claims submitted by doctors and hospitals to Medicare, and later to non-Medicare insurance companies. Instead, it gave doctors and hospitals an incentive to find ways of describing procedures and services with the cluster of codes that would yield the biggest payment. Sometimes this required the assistance of consulting firms. A cottage industry of fee-maximizing advisors and seminars bloomed.

I recall more than one occasion when I discovered at such a seminar that I was “undercoding” for procedures I routinely perform; a small tweak meant a bigger check for me. That fact encouraged me to keep one eye on the codes at all times, leaving less attention for my patients. Today, most doctors in private practice employ coding specialists, a relatively new occupation, to oversee their billing departments.
Another goal of the coding system was to provide Medicare, regulatory agencies, research organizations, and insurance companies with a standardized method of collecting epidemiological data—the information medical professionals use to track ailments across different regions and populations. However, the developers of the coding system did not anticipate the unintended consequence of linking the laudable goal of epidemiologic data mining with a system of financial reward.

This coding system leads inevitably to distortions in epidemiological data. Because doctors are required to come up with a diagnostic code on each bill submitted in order to get paid, they pick the code that comes closest to describing the patient’s problem while yielding maximum remuneration. The same process plays out when it comes to submitting procedure codes on bills. As a result, the accuracy of the data collected since the advent of compensation coding is suspect.

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WHAT PHYSICIANS NEED TO KNOW ABOUT TELEMEDICAL LIABILITY

By AMA

As with any medical practice, there are liability issues physicians should consider when engaging in the practice of medicine using telemedicine technologies. An expert in legal medicine gives his take on what physicians should know.
Joseph McMenamin, MD, has more than 28 years of experience practicing health-related law. Dr. McMenamin provided physicians at the AMA State Legislative Strategy Conference last month in New Orleans with insight on the potential liability climate resulting from use of telemedicine and outlined key steps physicians can take to minimize potential risk.
    
•Define the minimum requirements to establish the doctor-patient relationship. This is the fundamental question in telemedicine, Dr. McMenamin said. It’s crucial to determining whether the physician has a duty to the patient, which is important in tort claims. For example, states could consider adopting the AMA model state legislation (log in), which outlines steps to establish a proper patient-physician relationship prior to the use of telemedicine.

The AMA’s principles for telemedicine specify that a valid patient-physician relationship must exist before using telemedicine, through:
    
◦A face-to-face examination, if a face-to-face encounter would be required in the provision of the same service in the real world
◦A consultation with another physician who has an ongoing patient-physician relationship with the patient
◦Meeting evidence-based practice guidelines on telemedicine regarding establishing a patient-physician relationship developed by major medical   specialty societies

Exceptions to the foregoing include on-call, cross coverage situations; emergency medical treatment; and other exceptions that become recognized as meeting or improving the standard of care.


•Determine who owns the huge amounts of data available to both patients and physicians. Now that patients have wearable technology such as FitBits, how are they sharing health data with their physicians? And what—if anything—are physicians required to do with that data?

“The more information there is, the harder it is to separate the wheat from the chaff,” Dr. McMenamin said. “What are the risks of us missing something in this vast amount of data?”



•Require medical liability carriers to write telemedicine and data-related risks in policies. Telemedicine opens a giant door to a variety of medical liability risks that could go beyond tort claims, Dr. McMenamin said. For example, non-tort risks include licensure, credentialing, privacy and security, reimbursement, deceptive trade practices, wrongful data collection and more.

As part of its telemedicine principles, the AMA is calling for educational resources to help physicians navigate this emerging field. The principles also advise physicians to make sure their liability insurance covers telemedicine services—especially for patients in other states—before engaging in such activities.
Physicians and other health practitioners delivering telemedicine services must abide by state licensure laws and requirements as well as state medical practice laws, including laws concerning consent involving minors, prescribing, reproductive rights, end-of-life decisions and scope of practice.
The AMA’s principles thus call for physicians practicing telemedicine to maintain licensure in the state where the patient is located. Similarly, model AMA state legislation (log in) ensures that, with exceptions such as curbside consultations, volunteer emergency medical care, physicians and other health practitioners practicing telemedicine are licensed in the state where the patient receives services, or providing these services as otherwise authorized by that state’s medical board.  

Visit the AMA Web page on telemedicine for more information, and read more about telemedicine’s challenges for the medical profession in the AMA Journal of Ethics.

Note: This story is not legal advice. Consult your attorney for any issues related to medical liability.

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NINE STATES INTRODUCE LEGISLATION TO SPEED PHYSICIAN LICENSING

WASHINGTON – With some state legislative sessions only a few weeks old, already legislators in nine states – Iowa, Minnesota, Nebraska, Oklahoma, South Dakota, Texas, Utah, Vermont, and Wyoming have formally introduced the Interstate Medical Licensure Compact, model legislation
that would speed the process of issuing licenses for physicians who wish to practice in multiple states. The Federation of State Medical Boards (FSMB) has launched a new webpage,http://licenseportability.org, to track the progress of the Compact in state legislatures.The Interstate Medical Licensure Compact would modernize and streamline interstate licensing while maintaining oversight, accountability andpatient protections. The new interstate compact system would help physicians improve access to care for patients in multiple jurisdictions and help underserved populations receive the healthcare they need.“The Interstate Medical Licensure Compact, which is now being considered in state legislatures across the country, offers an effective solution to the question of how best to balance patient safety and quality care with the needs of a growing and changing health care market,” said Dr.Humayun J. Chaudhry, president and CEO of FSMB. “We’re pleased to have supported the state medical board community as it developed this groundbreaking model legislation and look forward to working with states that wish to implement this innovative approach to licensure.”

The final model Interstate Medical Licensure Compact legislation was released in September 2014. Since then, more than 25 medical and osteopathic boards have publicly expressed support for theCompact.


“We applaud the progress being made to ensure that Iowans have access to quality healthcare services,”said Mark Bowden, executive director of the Iowa Board of Medicine. “This legislation would expand access to telemedicine, making it easier for physicians to see patients. Everything
about this legislation is a win-win for our state, our physicians, and most importantly, our patients.”

“We are pleased to see Vermont leading the way on ensuring that all its patients have access to quality healthcare,”said Patricia King, MD, PhD,
immediate past president of the Vermont Board of Medical Practice. “Doctors and patients will benefit from a streamlined and less cumbersome licensing process that expands access to care.”

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PROFESSIONAL NETWORKING MAKES PEOPLE FEEL DIRTY

By Carmen Nobel

For many of us, the idea of professional networking conjures unctuous thoughts of pressing the flesh with potential employers, laughing at unfunny jokes, and pretending to enjoy ourselves.
No wonder a recent study found that professional networking makes people feel unclean, so much so that they subconsciously crave cleansing products. The study, titled The Contaminating Effects of Building Instrumental Ties: How Networking Can Make Us Feel Dirty, appeared in the December 2014 issue of Administrative Science Quarterly.

“Even when people know networking is beneficial to their careers, they often don't do it”

"Even when people know networking is beneficial to their careers, they often don't do it," says Francesca Gino, a professor in the Negotiation, Organizations & Markets unit at Harvard Business School, who coauthored the study with Tiziana Casciaro (Rotman School, University of Toronto) and Maryam Kouchaki (Kellogg School of Management at Northwestern University.) "From an academic perspective, we thought we could advance the theory of networks by looking at the psychological consequences of networking."
Previous psychology research has shown that people think about morality in terms of cleanliness. A 2006 study found that people felt physically dirtier after recalling past transgressions than after recalling good deeds. The study's authors called it the "Macbeth effect," referring to the Shakespearean scene in which a guilt-racked Lady Macbeth tries to wash imaginary bloodstains off her hands.

Based on their personal schmoozing experiences, Casciaro, Gino, and Kouchaki hypothesized that professional networking increases feelings of inauthenticity and immorality—and therefore feelings of dirtiness—much more so than networking to make friends. (Gino, for instance, recalled colleagues using copious amounts of complimentary hand sanitizer after work-related dinners.)
The team also posited that networking felt ickier when a meeting was planned ahead of time, rather than a spontaneous occurrence. "Oftentimes there is a deliberate attempt to create a link with another person, which is a very proactive behavior," Gino says. "But other times you and another person just happen to be at the same event, and you end up talking to each other and networking. We thought the difference was important because one has more intent than the other—and that intent might contribute to feelings of being selfish."

PUTTING THE HYPOTHESES TO THE TEST

The researchers conducted a series of experimental and field studies to test the extent to which networking makes people feel dirty.

In the first experiment, 306 participants were asked to recall an event from the past and write about it for five minutes. They were divided into four conditions. In the first condition, participants recalled a time where they intentionally set out to nurture a relationship for professional gain. In the second, they recalled a time when a spontaneous meeting had benefited them professionally. The third and fourth conditions were similar to the first two, but participants were focused on personal gain instead.

Afterward, all the participants were asked to complete a series of word fragments, including SH_ _ER, W_ _ H, and S_ _P. The researchers found that those who had recalled intentional networking were nearly twice as likely to come up with "cleansing" words—"shower," "wash," and "soap"—than those who had recalled spontaneous meetings. (Participants in the spontaneous condition were more likely to create non-cleansing words like "shaker," "with," and "ship.") Moreover, participants in the intentional professional networking scenario tended toward cleansing words more than those in the intentional personal networking scenario.
In the second experiment, held in a university research laboratory, 85 students read one of two short stories. Both were written in the second person. In one, the protagonist ("you") went to a holiday party with hopes of having fun and making friends; in the other, the protagonist attended a company party solely to make business connections. Afterward, the researchers asked participants to read through a list of consumer products and rate each one on a desirability scale of one to seven. The list included several specific cleansing items (such as Dove shower soap, Crest toothpaste, Windex) as well as neutral items (like Post-it Notes, Nantucket Nectars juice, Sony CD cases).

On average, participants who read the professional networking story gave much higher ratings to the cleansing products than those who imagined the friendly party. The neutral products received similar ratings across the board.

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NATIONAL HEALTH COSTS COULD DECREASE IF MANAGERS REDUCE WORK STRESS

by Michael Blanding

Joel Goh and colleagues estimate that workplace stress is responsible for up to 8 percent of national spending on health care and contributes to 120,000 deaths a year. Is better management the fix?

Our work can literally make us sick. Long hours, impossible demands from bosses, and uncertain job security can take their toll on our mental and physical well-being, leading to stress-induced aches and pains and anxiety. In extreme cases, the consequences can be worse—heart disease, high blood pressure, alcoholism, mental illness.
Even so, the connections between job pressures and health—and what management can do to address the problem—have been little studied.

“We have not placed a lot of emphasis on the role of workplace stress in the high cost of health care”

"We have this body of research that shows workplace stress is very bad for health, and we have this other information that says our health costs are way above that of other countries," says Joel Goh, Harvard Business School assistant professor of business administration in the Technology and Operations Management unit. "But traditionally in the US we have not placed a lot of emphasis on the role of workplace stress in the high cost of health care."
In recent years, General Motors spent more on health care than it did on steel, and across the country, companies are struggling to find affordable plans for their workers, in some cases dropping health coverage or raising premiums on employees in order to combat escalating costs. On the other hand, companies are implementing health programs in an effort to keep workers healthy—and productive.

But those programs can only work if companies aren't at the same time undermining them with stress-inducing management practices.
"Health care programs are no good if your guy is so stressed that he can't take advantage of them," says Goh.

Making the stress-health connection

Unlike in Europe, little or no data exists in the US that correlates exposure to workplace stress with health outcomes or health care costs. Goh tackles that gap in a new working paper, The Relationship Between Workplace Stressors and Mortality and Health Costs in the United States, written with Stanford business professors Jeffrey Pfeffer and Stefanos A. Zenios.
Goh specializes in developing complex mathematical models that can aid decision making, especially in the presence of uncertainty. "The idea that we can structure the world mathematically and use that to make decisions is very interesting to me," he says. "The world is not deterministic—there is a randomness built into it. And yet, by using robust optimization techniques we can tackle a wide range of problems."
After working for a few years analyzing business operations, he settled on the field of health care as an area where he could really make a difference. "There is no lack of problems in health care, and I think that someone with a structured analytical background can make a unique contribution," he says. Goh has used mathematics to examine such issues as adverse drug interactions and cost-effectiveness of cancer screening. "Structuring the world mathematically can lead to insights and ideas that might not be obvious," he says.

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WHAT YOU NEED TO KNOW ABOUT MEDICARE PAYMENT CUTS

by AMA

While a bipartisan bill to eliminate the sustainable growth rate (SGR) is waiting for the U.S. Senate to take action when it returns from a two-week recess, the current SGR patch ended at midnight. As a result, all physician services provided from today will be subject to a 21 percent cut.

Here’s what physicians need to know about the Medicare payment cuts:

  • The Centers for Medicare & Medicaid Services (CMS) is instructing its carriers to “hold” claims for 10 business days until legislation can be passed and signed into law that reverses the cut.
  • The 10-day hold means that claims will be held through April 14. This is not a departure from standard practice.
  • By regulation, CMS may not pay electronic claims prior to 14 days (29 days for paper claims).
  • It is possible that the situation will be resolved before any claims are actually processed at the reduced rate.

The AMA anticipates that when Congress passes a bill, the restored payment rates will be applied retroactively. 

By law, Medicare is required to pay physicians the lesser of the submitted charge or the Medicare approved amount. For that reason, the AMA is advising against submitting claims with reduced amounts reflecting the 21 percent cut.

The U.S. House of Representatives last week overwhelmingly approved a bill, H.R. 2, to eliminate the SGR, but the Senate was unable to agree on rules for a floor debate prior to adjourning for its April recess. Senate leaders said they will vote on the legislation when Congress reconvenes the week of April 13. The bill would set into motion Medicare physician payment reforms that will support physician practices that serve our nation’s seniors and military families enrolled in TRICARE. President Barack Obama said he would sign the legislation into law, intensifying pressure on the Senate to move the bill forward. Read about the provisions of the bill at AMA Wire®.

The AMA will continue to advocate for Senate passage of H.R. 2 until final action is taken. Physicians should contact their senators and urge them to support H.R. 2 in any of the following ways:

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