Cost Eats Revenue for Breakfast In the New Value-Based Care (VBC) Payment Landscape

magnifying-glass-1001506_640The payment landscape is shifting dramatically in the US health care industry and this has serious implications for the survival of providers. With the volume-to-value transformation, traditional fee-for-service payments are being replaced with a financial incentive framework that rewards for improved quality and outcomes. Although this impacts only Medicare payments today, it lays the groundwork and provides strong incentives for other payers to move in the same direction, thus potentially disrupting the health care system at all levels.

Ultimately, value-based payments transform traditional business models by putting significant revenue– and risk– at stake. Building the outcomes-based financial models to maximize value-based care (VBC) reimbursement pathways will be fundamental to sustainable growth in the future.
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A New Prescription for Healthcare: Creativity, Innovation and Entrepreneurship

health-2082630_1280We are living through what is arguably the most challenging time for the health care industry. Globally, health care appears to be on a collision course with patient needs and economic reality. No one is happy with the current system, and the combination of rising costs, poor access, inequitable care, and diminishing quality and safety has created anxiety and frustration for all. Decades of interventions have failed to improve the situation; if anything, things have become worse. Current approaches tend to focus on a single issue or problem (the price of drugs, rising numbers without medical insurance, provider incentives to over treat), but an overarching solution has remained elusive.
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Trumping Obamacare . . . How a Market Based Approach to Universal Healthcare can Work

US Medical care illustrated by flag and stethoscope

There is no issue more important to the future of America than it’s long-term fiscal sustainability. And the long-term fiscal sustainability of the United States has been placed in jeopardy primarily by the structure and expense of America’s healthcare system. According to the Congressional Budget Office, nearly the entirety of the growth in federal spending as a share of the economy—excluding interest—can be explained by government health programs: Medicare, Medicaid, the Medicaid-related Children’s Health Insurance Program, and the Affordable Care Act. In addition, one of the principal economic challenges faced by middle- and lower-income Americans is the expense and instability of American health insurance.
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Is today’s hospital a Donald Trump or a Jeb Bush?

Recently I took a cab from the Dallas airport to a downtown hotel. During the ride I inquired of my driver what he thought of Uber. That was a mistake. I got a detailed and thorough analysis of everything he thought was wrong with the Uber concept and why it could not possibly last. His argument included that the drivers were not licensed, they did not have to pass any sort of test about the geography of the city, and that they did not carry adequate insurance. This contrasted with everything I’d heard from many friends that Uber is the best thing that has happened to intra-city travel.
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Affordable Care Act – Good Intentions Hampered

In the late 1800’s France poured money, men and material into building the Panama Canal. They were spectacularly unsuccessful. Years later the concept of a canal intrigued President Theodore Roosevelt. The prevailing sentiment at the time was that the canal should go to Nicaragua presumably because clearly anything connected with the French had to be slipshod.

It was only after some thoughtful discussion and Roosevelt’s leadership that the decision was made for the United States to build the canal through Panama along the same route previously attempted by the French.

In today’s environment anyone or anything associated with the Affordable Care Act is also immediately dismissed as irrelevant and moot by the political right.
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Healthcare Reform Is A Marathon, Not A Sprint

King v. Burwell will be argued before the Supreme Court this week. It won’t be decided, just argued. Then, we’ll parse how well the arguments went, and whether we can predict what will happen from that show. Last time, by the way, we couldn’t. Then, in June, we’ll get a decision.

I know lots of people think the plaintiffs will win. Putting my cards on the table – I’m not one of them. I think the Justices will rule for the government, but I admit that’s a gut feeling.  I may be wrong.

But the world won’t end overnight, and neither will the ACA.
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2013 – The Year Medical Fixes Got Busted

Dr. Aaron Carroll said that lifestyle changes are just as effective for reducing your chances of dying from heart disease, stroke and diabetes as drugs were. Yet we spend billions of dollars on such drugs. In his latest CNN Opinion article he also states that the FDA has also made news this year by banning things we once thought were good for us. He concludes that we don’t spend nearly enough on public health measures that could make much more of a difference. We have no problem subsidizing the cost of drugs, but we’d hardly consider subsidizing exercise or dieting at the same levels.
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The Affordable Care Act – An Employer Conundrum

Why do employers provide health insurance? After all, it is one of the most expensive line items in their budget. Typically most employers cover 70 to 80% of their employees’ health cost. At $15,000 to $20,000 per year of cost per employee this is an important and often difficult decision for employers to make.  Many employers provide this benefit simply because it is the right thing to do.  I suspect most, however, provide it because they would simply not be able to recruit sufficient talent without it.  The American public for the most part has come to expect health coverage as a prerequisite for a decent job. 
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So what will premiums really look like under Obamacare?

by Dr. Aaron Carroll

Unless you’ve been living under a rock recently, you must be aware of the back and forth between supporters and haters of Obamacare with respect to premiums in the exchanges. As I’ve explained before, this is somewhat an issue of focus. It is likely true that there are “bros” who are male, young, healthy, and single who have – in the past – been able to find really cheap insurance plans. In the future, under community ratings and guaranteed issue, they will likely be compelled to buy more robust, yet more expensive plans. So those specific individuals will see “rate shock”.
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