Saturday, March 7, 2015

The Anthem Hack

Anthem Inc., the giant health insurer and service company for many Blue Cross and Blue Shield plans, was subject in January to what may be the largest data hack ever.

Anyone with a primary or secondary plan from any of these carriers may have data in jeopardy.

The find out what Anthem Inc., is doing to protect victims log on to

cross posted:

Thursday, March 5, 2015

Disruption is Disruptive!

The hottest word in business today is “disruption” as in “the I-phone disrupted the cell phone business” or “Uber is disrupting the taxi cab business.”

The Affordable Care Act was clearly intended to be disruptive, Obama administration denials to the contrary. The administration has quit with the denials, finally, but has never really informed the general public how massive the disruption has been and will be.

The ACA was designed to disrupt most of clinical medicine, including the physician-patient relationship, but we really do not talk about that so much.

One theory floated by ACA supporters is a massive wave of innovation has been started that will eventually creates higher quality and lower cost in U.S. health care.

Good news – there is a great deal of innovation in the system, sort of a do it to survive operation.

Bad news – not every practice can be the Mayo Clinic, with primary care and rural care seemingly on the short end of the innovation train.

Disruption sometimes fails – think Pontiac Aztek or Windows 8. There are no guarantees, and the stakes here are incredibly high.

Tuesday, December 16, 2014

Comments on "Gruber-gate"

Professor Jonathon Gruber of M.I.T. has been at the center of a firestorm. Gruber is a highly respected health care economist who was instrumental in developing the Massachusetts (aka Romneycare) health care system and the Affordable Care Act (aka Obamacare).

What Gruber has in intellectual skills he lacks in political savvy. Gruber is seen on several videos ruminating about the passage of the Affordable Care Act, about how the inside politics worked, a lack of transparency and how the Act was massaged through the system to take advantage of “stupid” voters. Some comments:

Did ACA pass due to a lack of transparency?

Not in the sense described by Gruber. ACA passed because Democrats had control.

What sense then?

 ACA was so complicated and confusing no amount of transparency would have mattered.

Was ACA pitched to the voters?

Only to elected representatives. Or at least the elected Democrats. Or their staffs anyway.

Did the elected representatives read and understand the legislation?

According to former Speaker Nancy Pelosi, no. This seems credible. Not enough time.

Why is ACA so complicated?

A simple approach would have allowed direct targeted opposition. ACA is a cauldron of incentives, disincentives, and various sorts of social engineering. The bill is a giant lab experiment with many, many pieces and parts, a sort of Rube Goldberg health care machine.

Will the ACA work as intended?

Too early to tell, especially for medical providers and employers. The phase-in was designed to take many years, has been rocky and is now behind schedule.


Do the Republicans have a better plan?

No, the GOP has no policies that could be called a “plan.”


Monday, October 20, 2014

PPACA Problems

In the political season politicians continue to use ACA as a ping pong ball, slapping it back and forth in classic playground "is to, is not" style.

Is PPACA a major success, a work in process or a giant flop?

We vote for work in process with major reservations.

Pro-PPACA forces tend to emphasize new patient coverage, while anti-PPACA forces tend to emphasize screaming headlines focused on problems.

So what are the problems?

Based on intense interactions this year with providers across the nation we have compiled a list and will discuss each in a future post.

What's on the top of the list?

Deferred care due to higher co-pays and deductibles, for both exchange and private market insureds.

What's else is on the problem list?

employer confusion

IRS chaos (forms, instructions, calculations, etc.)

primary care overload

late regulations and implementations

the exchange backend function

the integration stampede

Pioneer ACO disappointment

problems with payment innovations

We will explore these problems and more between now and the end of the year.

Comments always welcome.

Saturday, July 19, 2014

High Tech Crystal Balls – Predictive Analytics

Data! Big Data! Bigger Data!

“Big data” and data analytics are all the rage. Moneyball was a successful book and movie telling a story about the use of data and predictive analytics to improve a baseball team.

Providers create vast oceans of data, much of which escapes analysis in the crush of daily operations and the horrors of the revenue cycle. In the past the system could be navigated with reasonable effort and physician compensation was generous enough, so analytics was not necessary to success.

We are in a new era, where bundling and reference pricing and ACOs will change the nature of health care operations.

Some good news – most of your work does not require massive data sets or highly sophisticated computer models – most of your work requires reasonable amounts of data and a well designed spreadsheet model.

Predictive analytics is a data rich version of a classic question - “what if.”

Sensitivity analysis is analytics focused on the change of a single variable. Scenario analysis is a change involving multiple variables. Assuming the group has a sophisticated budgeting process built on a spreadsheet platform, those same spreadsheet model can be altered for focused predictive predictive work.

Don't have a sophisticated budgeting process? Time is a wasting.

One field of accounting knowledge is critical, the ability to separate variable, fixed and mixed costs. This is critical to building proper incremental assumptions in your models. A 20% change increase in procedures does not create a 20% increase in all costs, and knowing what does change is critical.

Executives and administrators have plenty of work to do, the work load is going to get heavier, and more sophisticated analysis and planning will be required. Adding predictive capabilities provides important tools to improve feedback and to improve decision making.

Tuesday, July 15, 2014

The Era of Mandatory Compliance

The Affordable Care Act moved compliance programs from "recommended" to mandatory.

Many of us thought recommended really meant "mandatory" anyway but now it is law.

Problem is, the Obama administration has not gotten around to writing the implementing regulations. Since LTCFs were supposed to be in compliance by March 23, 2013 this is sort of awkward.

There is guidance available, and there are a multitude of good reasons to have a compliance program, so providers should be moving forward with programs. To do otherwise is akin to driving a car without a seat belt.

Look for a series of commentaries over the next two months on the techniques and advantages of a vigorous compliance program.

Thursday, June 19, 2014

PPACA - bad news, good news

Pulled from some seminar materials I am developing, and based on recent interactions with hundreds of executives, financial officers and providers:

Problems with Obamacare (and related)

#1 by a huge margin in non-scientific poll of hundreds of providers: deferral of care due to larger co-payments (premium share, co-pay, deductible)

       a weak labor market combined with ACA impacts on insurers = massive risk shift to employees

       insurers reacting to ACA, employers reacting to ACA, shifting costs to working middle class

      immense shift in bargaining power in insurer vs. provider balance


mid sized employers confused and beleaguered

chaos in the hospital sector (due to ratchet down of revenues and scramble for business models)

mad scramble to integrate and build new business models, often fueled by massive uncertainty

ACOs not delivering yet at any large scale

failure to properly implement the back end of

           hundreds of thousands of families may have to repay due to flawed
                    subsidy calcs

providers cannot get easily or timely get coverage information, but on the hook

major problems with EMR/EHR implementation, “meaningful use” a mess

DHHS-CMS late with regulations (compliance), or writing incoherent regulations (meaningful use)

family practice not better off and often worse off

nothing significant to boost supply of family docs or nurses

               (will we see a boomer provider retirement surge? Stay tuned)

Medicaid fees with small contribution margins (variable costing) and negative contribution margins (full costing)

C.L.A.S.S. was stillborn and long-term care funding is being ignored at our peril

readmission penalties – first stage of formal rationing?

future of rural health care in doubt (small hospitals are probably toast within 5 years), small improvement in urban health care access (the hospital shake out will impact the outcome)

ACA based innovations

access improved somewhat and screening procedures in place (although someone has to pay)

surge of integration and construction of new business models (for better and worse).

ACO trials are in progress, could yield scaled results in the future

surge of innovation in business models

bundling could provide major benefits

surge of innovation in analytics (the government is not much help)

surge of innovation in clinical care

more careful use of ordering (imaging, Rx, therapies) but could have a clinical downside

FINALLY, providers have significant negotiating leverage in dealing with some suppliers

Saturday, March 29, 2014

March 2014 ACA Update Part II

The Centers for Medicare and Medicaid Services and the Department of Treasury issued regulations this week on numerous aspects of the Affordable Care Act. To the surprise of very few, another extension was the major news in these releases.

Here We Go Again.....Politics meets Health Care Policy

The fiasco coincided with the individual policy cancellation tsunami and the results was a gigantic mess which still begs for resolution. The Obama administration eventually provided an option for states to extend ACA non-compliant policies for one year.

This year expires just prior to the mid-term elections, causing a (smaller) torrent of cancellation notices. Prudence being the better part of political non-valor, there is now an option for states to extend the policies for two years until renewals effective October 1, 2016 and after.

Extra Enrollment Month

An extra month was added to the upcoming enrollment season, which coincidentally starts AFTER the midterm election. New deadline is February 15th, 2015.

Out of Pocket Maximums

For 2015, $6,600 for individuals and $13,200 for families. For some a decrease, for many an increase.

Treasury Rules and Regs for Reporting

The IRS is charged with collecting ridiculous amounts of data, is the heavy hand of penalty enforcement and will distribute tax credits.


The small business program MAY be delayed, or maybe not. Management by chaos.

And so......

The slow, painful, dysfunctional implementation of the Affordable Care Act continues.

March Update

ACA (Obamacare) Update March 2014

Sign-ups continue, although the “back room” functions are moving very slowly. Providers are struggling with verification problems and missing insurance cards. The deadline approaches.

Other Changing Policies

A huge number of policies in both the employer-paid sector and the individual policy sector changed as of January 1, creating more messes for patients and providers.

Moving individual policy holders into the exchange system has been a nightmare and will likely continue to be a nightmare for some time. Providers are struggling with a high percentage of patients presenting new insurance cards for both new carriers and the same carriers with different policies. Confusion reigns.

More Cash from Patients

The long term trend of “risk shift” - less coverage from employers and more out of pocket from patients – has been accelerated by Obamacare. This is impacting both patients and providers, and not for the better.

This creates numerous headaches for providers, who have enough headaches already.

Fall will be Interesting

With the ICD-10 adoption deadline October 1 and the EMR/EHR operational deadline January 1, 2015 the fall season will be stressful for providers.

Deadlines ….. don't mean much, it is the extended deadlines that are important.

Compliance programs … both nursing homes and physician groups are supposed to have mandatory compliance plans – except the regulations are not written yet. Stay tuned.

And so.... 2014 may be the single most stressful year in the history of our health care system – until 2015.

Sunday, January 26, 2014

Obamacare Update

Sign-ups continue, although the “back room” functions are moving very slowly. Providers are struggling with verification problems and missing insurance cards.

Other Changing Policies

A huge number of policies in both the employer-paid sector and the individual policy sector changed as of January 1, creating more messes for patients and providers.

Moving individual policy holders into the exchange system has been a nightmare and will likely continue to be a nightmare for some time.

More Cash from Patients

The trend of “risk shift” - less coverage from employers and more out of pocket from patients – has been accelerated by Obamacare. This is impacting both patients and providers, and not for the better.

This creates numerous headaches for providers, who have enough headaches already.

Fall will be Interesting

With the ICD-10 adoption deadline October 1 and the EMR/EHR operational deadline January 1, 2015 the fall season will be stressful for providers.

Deadlines ….. don't mean much, it is the extended deadlines that are important

And so.... 2014 may be the single most stressful year in the history of our health care system – until 2015.

Saturday, January 4, 2014

When Disruptive is too Disruptive

"Disruptive" is one of the hottest words in business these days, as in "disruptive technology."

Clearly ACA was designed to be disruptive, as it should have been, the 2010 status quo was not working.

Problem is, I don't think those who wrote Obama/Reid/Pelosi/Care really understood what furies they were turning loose. Clearly they overestimated their ability to manage the rapid change, and clearly they underestimated the disruptive effects.

While much of the focus is on and Medicaid expansion, the real serious action is in the provider, employer and private insurance sectors. None have a real clue what the system will look like three years from now, but all are furiously trying to adapt as best they can.
It is going to be a wild ride. More to follow.

Tuesday, September 24, 2013

ACA (Obamacare) Updates

Latest news on Obamacare:

Narrow Networks - Some customers of the new insurance exchanges may be surprised at the "narrow network" included in their insurance coverage.

Narrow networks have a limited list of approved provider and will likely make out-of-network treatment difficult if not impossible.

This is just now hitting the news, a few days before the exchanges begin operations.

Private Exchanges - The concept of health insurance exchanges is being adopted by employers looking for cheaper coverage and fewer hassles, putting employees into private exchanges managed by various consultants and facilitators.

It is too early to judge the scope of this innovation, but it could become a very large factor in employer provided health insurance.

Tuesday, September 17, 2013

Latest Obamacare Confusion

Obamacare is complicated. ACA is a very complex plan with numerous phase-ins cluttered with multiple implementation delays.

The latest confusion involves employer notification requirements.

The employer insurance mandate has been DELAYED UNTIL 2014

The employer notice of the existence of health insurance exchanges is still in place October 1, 2013.

It gets worse.

Small employers (below the 50 FTE threshold) not required to provide insurance ARE REQUIRED to send the notices to employees on or before October 1st, and are required to give notices to new employees with 14 days of the start date. Large employers are also required, as they should know.

Any employer covered by the Fair Labor Standards Act (overtime and minimum) wage is subject to the requirement, effectively just about every employer in the country.

The requirement will be enforced by the U.S. Department of Labor, and although opinions vary it is best to assume a daily penalty for failure to comply.

Thursday, August 29, 2013

Individual Mandate Regulations

The Department of Treasury has issued the final implementing regulations for the "Shared Responsibility  Payments,"  more commonly known as the "individual mandate."

A quick scan reveals no surprises, a more detailed reading to follow.

The mandate is controversial and the large role of the IRS in enforcing the mandate is also controversial.

Scaring Grandma

October 1st is a major implementation date for the Affordable Care Act (ACA), often referred to as Obamacare.

On October 1st the state health insurance exchanges will open and a new era in health insurance begins. 

There are no significant Medicare changes on October 1st.

There is a great deal of confusion, as evidenced by media reports, among Medicare beneficiaries. Some of the confusion is natural, considering the complexity of Obamacare, and some is intentional (my own political party spreading and encouraging the misinformation). And the con artists and scammers are using this to con the elderly.

The ACA does not make immediate or dramatic changes to Medicare. The ACA will make changes to Medicare, many of them in the relationship between providers and the government, many largely irrelevant to patients. The U.S. health care system will evolve into something different, impacting all of us in some way or another.

There are plenty of real problems with the design and roll out of Obamacare, there is no need to scare senior citizens.

Friday, August 9, 2013

The Provider Blues

The Other Side of the Equation

Obamacare is in the news every day, with much discussion of jobs and exchanges and insurance and many other topics. My beat is the other side, the provider side, and a great deal of confusion and chaos lives there.

What are providers supposed to be doing?

improve quality
cut costs
install complex EMR systems able to link into EHR networks
work through a massive transition to ICD-10 coding
move into a complex “big data” environment
move to innovative delivery and revenue models
(ACOs, bundling)
overall, develop and implement new and unknown clinical and business models

So what's the problem?

No one, in or out of government, can tell us what the destination is. This is a ginormous lab experiment with patients as the white mice.

ACA - Trouble in Paradise

ACA - reality sets in

A letter from union leaders to Sen. Reid and Rep. Pelosi (July 2013)

Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.

Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President

D. Taylor