California agency tries to slow growth in healthcare spending
June 09, 2024
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June 09, 2024
With healthcare spending growing faster than inflation for many years, various institutions have tried to curb its growth. KFF Health News reported on California establishing an Office of Health Care Affordability in 2022 to accomplish this goal. Earlier this year, the agency approved of a target growth rate of 3.5% in 2025, dropping to 3% by 2029. This plan allows more growth in spending than the original target of 3%, but is substantially less than the 5.3% growth requested by the California Hospital Association. Understandably, both the California Hospital Association and the California Medical Association have objected to lower number, citing a variety of factors including the growing need for mental health treatment, labor shortage, patient access, and quality of care.
Apparently, starting 2030, the agency has authority to fine health provider groups who exceed the growth targets. If this measure is the only tool in the agency's arsenal, it seems unclear how effective the agency will be. For example, if a healthcare provider dominates in an area and threatens to reduce services, will the agency still follow through on its threat of a meaningful fine? Alternatively, if a provider group can cite a host of plausible reasons (e.g. higher minimum wage, shortage of healthcare workers), what will the agency do? While the motivation behind establishing such an agency seems positive (checking rampant growth in healthcare pricing), the implementation details are surely challenging.
June 02, 2024
There is no single metric for concepts that are as complex and nuanced as quality of care. Nevertheless, people frequently do not want to wade through reams of data in order to assess whether a hospital or clinic provides quality care. As a result, some organizations like to provide a "grade" -- a quick indicator that considers a variety of factors and is supposed to be a reasonable proxy for the general level of care. However, KFF Health News published an article showing why that practices does not always work out.
Six years ago, two health systems wanted to merge, raising anti-trust concerns. Organizations who want to merge frequently argue that the merger will allow them to provide better service at a more affordable cost, while critics of such mergers frequently argue the opposite. To assuage concerns, the merged entity agreed to a variety of quality metrics, to be monitored and graded by government agencies. The article points out, however, that the merged entity "has failed to meet the baseline values on 75% or more of all quality measures in recent years — and some are not even close — according to reports the company has submitted to the health department." Perhaps even more concerning is that the one of the government agencies responsible for overseeing the merged entity has always given it an "A" grade whenever it has issued such grades ("the scoring system was suspended due to the covid-19 pandemic and no grade issued"). Apparently, the issue is that the government agency gives the entity 15 points (out of a possible 100) for merely reporting the measures, contradicting the scoring rubric described in the agency's own documents.
Busy patients could easily be mistakenly reassured by the "A" grade from the government agency. At the very least, it is helpful for the underlying data and the scoring rubric (when available) to be released, even when a general "grade" is released.
May 26, 2024
KFF Health News reported on an experimental Medi-Cal program that pays former meth users for clean drug tests. The article links to a study showing that "Non pharmacological interventions are effective in treating" such patients.
Interestingly, participants in this program can earn as much as $599 in a year (given as a gift card), which seems like a rather small amount in comparison to the extent of a participant's lifestyle change. However, someone in the industry explains that "The reward system in the brain is more activated with amphetamine users, so getting $10 or $20 at a time is more enticing than sitting in group therapy." Presumably, this treatment -- like many other treatments -- is only effective for those who already want to change.
May 19, 2024
Echoing concerns expressed by the nursing home industry, KFF Health News published a piece on how a change in Montana's staffing requirements caused some low-intensity addiction treatment facilities to close. For context, the article reports that "The new rules the state added at the same time brought the residential facilities up to American Society of Addiction Medicine standards." Yet, four out of fourteen facilities in the state have closed since 2022, when the changes took effect. Apparently, the state was hoping that moving to the higher Medicaid reimbursement rates would be adequate funding.
It seems like a difficult policy decision. As the article points out, various competing groups -- likely many for good causes -- are vying for additional funding. The legislators try to make the budget stretch. At the same time, people expect a certain level of quality from various service providers, and expect the state to enforce at least some of those standards, particularly among healthcare providers. Yet, people were probably hoping that the various facilities would improve without becoming unsustainable. In retrospect, it is probably not surprising that when higher quality is mandated, the funding must come from somewhere, whether that be owners' profits or from those who pay, or some combination.
May 12, 2024
For a long time, hospitals and clinics have frequently stated that they are unable to provide exact pricing for many surgeries until after the procedures are completed, citing a number of variables that might affect the final numbers. Now, however, some hospitals are requiring patients to pay before the procedure.
If hospitals are viewed as for-profit entities, this trend makes sense: hospitals can spend much less effort chasing down payments if they collect payments before the procedure -- perhaps when the patients are most motivated to pay. The article points out the "corporatization" trend in healthcare, where "more medical practices were owned by corporations than hospital systems."
Requiring prepayment of non-emergency services might still make sense for non-profit entities, if those entities have an appropriate charity policy to benefit the community sufficiently to justify the benefits of their non-profit status -- after all, those who can afford the procedure probably should not be allowed to impose onerous administrative work in collecting on bills. Fortunately, requiring patients to prepay for emergency services is not allowed.
Either way, it appears that these institutions no longer have qualms about disclosing pricing ahead of time. It is ironic, however, that the article points out that a hospital system that overcharged a patient was slow to refund the difference, requiring months of wrangling by the patient. Some sort of penalty on the hospital for creating the extra work in this case seems appropriate.