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Potpourri VI

By December 5, 2009Commentary

Massachusetts led the way with ambitious health reform and is leading the way in trying to figure out how to cope with the unprojected, but totally predictable cost mess the reform has caused.  One solution has been to revise fee-for-service payments and a large insurer, Blue Cross, has struck deals with several hospital/physician organizations to accept a global annual payment for patients.  The arrangements also include incentives to meet quality of care targets, lest the organization skimp on appropriate care to ensure that it makes money.  This is just like the capitation experiments of the 1980s and early 1990s and we will see if it fares any better.  (Globe Article)

While policymakers debate reform options, the real world health care system continues to find ways to use technology to address quality, access and cost issues.  In another recent example of the private system’s ability to innovate, Maine physicians are working with the Anthem insurer in Maine to allow established patients to have e-visits and other email communication.  This is believed to improve continuity of care and Anthem must think it will lower costs, because the plan is waiving copays for the e-visits.  Although the article does not mention this, Anthem may be paying the doctors less for such visits, which probably is okay with the physicians since they may incur less cost for these interactions.   (E-Visit Article)

Here is an example of how a fragmented payment system causes significant additional administrative costs.  Medicare has a very strong coordination of benefits provision–if anyone else could be in any way be responsible for the costs of the beneficiaries’ medical care, then Medicare is not primarily responsible.  In the case of workers’ compensation, that provision has been interpreted to require set-asides for far-in-the-future potential payments.  The cost of calculating and administering these payments is substantial and excess reserves are almost always set aside.  The health system as a whole would save a lot of money by eliminating coordination of benefits and subrogation provisions such as these.  (WC Article)

Dow Jones VentureSource has released its summary of venture activity in the second quarter.   (Venture Report) The report indicates that about $5.2 billion was invested in that period.  Median deal size continues to shrink to about $5 million from $8 million a year ago.  Health care surpassed IT as the number one area for investing.  This is more due to shrinkage of IT venture funding than growth of health care investing.  But it does demonstrate that even during reform-caused uncertainty, health care has appeal.

A company called Vitality has introduced yet another approach to medication adherence.  It uses a pill container that has a chip which communicates whether or not the patient is taking medicine when he or she is scheduled to do so.  The chip connects to a monitor in the home which then connects to the internet.  The chip can also facilitate refills.  The target market is insurers, on the theory that they save overall costs when people take their drugs regularly, and pharmaceutical companies, on the theory that more pill-taking equals more revenue.  (Company Link)

Johns Hopkins is using the Intel Health Guide in an NIH funded study of  “telehomecare” for congestive heart failure patients.  (Johns Hopkins Article) Yet another example of how emerging wireless and monitoring technologies may transform the care of chronic disease patients, improving continuity of care and lowering costs.  The Health Guide allows patients to track biometric measures, interact with providers and access educational information.  Because it uses wireless technology, there are no capital expenses to wire the patient’s home.

Humana and MinuteClinic have agreed to expand use of the MinuteClinic facilities by Humana members and to create a MinuteClinic at a major Humana office in Louisville.  (Humana/MinuteClinic Release) Private insurers have been very quick to recognize the potential improved access for patients and lower costs through use of retail and worksite clinics and this development reflects those payers’ desire to expand the services available to members at these low-cost facilities.

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