Industry Outlook: Healthcare
Utah’s healthcare community is facing an uncertain future due to the shifting tides of health reform, an ongoing opioid crisis and a new effort to set health policy at the ballot box. Here, healthcare leaders take on these issues and more.
Scott Barlow, Revere Health
Blaine Benard, Holland & Hart, LLC
Brian Carter, Diversified Insurance Group
Dr. Edward B. Clark, University of Utah Health Sciences
Michelle McOmber, Utah Medical Association
Dr. Donna Milavetz, Onsite Care, Inc.
Dr. Joseph Miner, Utah Department of Health
Deb Rosenhan, Spectra Benefits
Jim Sheets, Intermountain Healthcare
Matt Slonaker, Utah Health Policy Project
Brent Williams, Dental Select
A special thank you to Dave Gessel, executive vice president of the Utah Hospital Association, for moderating the discussion.
How has the uncertainty surrounding the Affordable Care Act and healthcare reform impacted your organization?
CLARK: It was 51 years ago this fall that I started medical school, and so I have been watching this evolve over time, come through Medicare and Medicaid, through the HMOs in the 1980s, through the aborted Clinton approach to healthcare. This is the most unsettled time that I’ve seen in healthcare. Virtually every dimension of what we’re dealing with as providers, as insurers, as teachers of the next generation, has a level of uncertainty that has not been that intense over the last 50 years.
Communities throughout the country are all approaching it differently. As I talk with my colleagues across the country, there is what I would call a Hapless Harry approach, which is where the sky is falling. Then there is a more thoughtful approach in pinpointing the dimensions we have some control over, recognizing where we have little or no control, and attempting to navigate through this. Looking at our insurance industry, looking at how to adjust and adapt to some of these changes.
This can be viewed as a threat. It also can be used as an opportunity to really coalesce and develop a system that will work for us and work for our community.
BARLOW: Any long-term plan or investment is really difficult to make right now, just because you don’t know what that future is going to look like.
For us, the biggest challenge we still face is better coordination, better collaboration. But you still have a regulatory environment that precludes a lot of that—antitrust rules, anti-kickback back rules. So as we have seen ways that we believe we can make care better with better coordination and collaboration, we are bumping against regulatory statutes that haven’t changed, simply because they don’t want to change yet because they don’t know what the future holds from that federal side.
SLONAKER: Utah Health Policy Project works on policy, but it also directly serves consumers, patients, in helping them find health insurance options. Well, we got our primary grant cut by over half, and that grant actually helped a number of community-based organizations that help vulnerable populations enroll in healthcare and also locate care. That’s been pretty traumatic for that community. And these are our most vulnerable neighbors that get these services.
We are doing our best to make up for the gap, but we’re talking about a cut from about $750,000, which doesn’t seem like a lot, but we do quite a bit with very little. We had quite a few navigators, about 17 or 18, working out in the community with that money. That funding was cut down to $290,000. We hoped to work with local partners, frankly, to try to build that back up. Because this isn’t just enrolling into the Affordable Care Act, it’s also enrolling into CHIP, Medicaid.
MCOMBER: We do need to focus on costs and we do need to focus on care, but with the uncertainty, we see both sides kind of not knowing where we’re going. Providers are looking at it, saying, “I don’t know how to plan, I don’t know where I’m supposed to put my dollars, I don’t know where I’m supposed to put my focus.”
And on the insurance brokers’ side, you are saying we need to focus on costs and everything, but again, we have this bifurcated system. Well, where do we go? Because we’re looking at this uncertainty, saying, “Well, are we going to repeal the Affordable Care Act? Are we going to completely replace and repeal? Are we going to replace parts of it? Are we going to look more at cost side of things? Are we not going to look at cost side of things?”
Because of the uncertainty, we aren’t focusing on things like cost and quality care. If we could have more certainty in the marketplace, we could focus on some of those things, but we don’t have it, and that’s why we are in this place that we’re in.
MILAVETZ: I take a slightly different approach in that I look at populations. So when I look at the Medicare population, it’s definitely different than the commercial market population. And within the commercial market population there are large groups and there are smaller groups. And then there is the individual market. And each of them are affected differently within that scope of what the ACA currently is now and what the future might look like.
Large groups are relatively insulated against sort of any big fluxes. They’re under ERISA-based plans, they’re doing their own thing. Smaller groups—which, to be fair, in this state, 70 percent of all businesses are groups that are fully insured with less than 200 employees—they are the backbone of this economy in our state. This group is disproportionally affected by the uncertainty in the ACA. So when we’re looking at premiums for 2018, as an example, you are going to see some businesses really shut their doors this year because of premium increases, because of this uncertainty. That is largely problematic for growth.
In the individual market, I think people will just elect to take the penalty, if there is a penalty. That creates a whole ‘nother stress in this economy for safety net providers as well as those of us who are willing to continue to see them on a cash-pay basis.
WILLIAMS: A lot of the large companies are moving to ERISA self-funded plans to avoid taxes. The ACA tax is a fixed tax—it’s $14.3 billion, and that’s the amount that has to be paid by all Americans. So what the move to self-funded plans has done is shift that tax down to small business, because large businesses are largely avoiding it.
We did an analysis on our organization. We cover plans all across most of the country. Our small groups pay 272 percent, on average, more ACA tax than large groups. In my organization, we’ve got about a hundred employees. We’re paying about $30,000 a year in ACA tax through our health plan, let alone our other things. It’s considerable. It’s a lot of money on a too-small business. It’s also taxing those individuals as well. It’s taxing some Medicare plans. It’s also taxing even some Medicaid plans, because a lot of the states outsource their Medicaid to insurance companies, that then have to pay the tax, which is funded two-thirds by the federal government. So the federal government is taxing themselves. It just absolutely makes no sense, this tax.
It was planned to be eliminated in many of the ACA reform attempts, and that’s kind of dead. So here we are with it again. We had a reprieve in 2017, and it starts up again in January of ’18. About 3 percent of everyone’s increases that are on insured plans are the ACA tax coming back.
ROSENHAN: I do the compliance for our firm. Our employers just want some regulatory relief. They are not even really picky about how it happens, they just want it. As we’re moving toward the end of the year, we have to do another year of IRS reporting. We’ve had employers that just wanted to put their head in the sand and hope it would all go away, and now we are back again preparing for a third year.
Employers have to look at the whole picture and they have to plan much farther out than they used to, because we don’t know what’s going to happen with repeal and replace. The Cadillac Tax is looming out there in 2020, and we have strategies in place now to help our employers prepare for that and structure their benefits so that they can be in compliance. It is constantly a moving target, which makes it difficult.
SHEETS: For us, the biggest issue is the funding or the lack of funding for the risk corridors. We use SelectHealth for our payer. We’re still owed a significant amount of money from the federal government that was supposed to be there for the risk corridor payments on the exchanges, and right now SelectHealth is the only plan that’s on every exchange in every county in the state. So we have to raise our premiums—and raising the premiums for that product is difficult for those people. So you want to create an affordable opportunity for these people to have insurance, and you’ve got to balance that price with what the market will allow. At the same time, if you’re not getting the subsidy from the federal government, it can be problematic.
We have, potentially, an initiative trying to get on the ballot in Utah about expanding Medicaid in our state. Do you think this is the best way to achieve healthcare reforms, or has political gridlock made this the only viable route for meaningful change?
SLONAKER: Is the ballot box the best way? Typically I say we should go through the legislative process. We worked really hard as a group to work through the legislative process, and thanks to a lot of allies in the room on Medicaid expansion initially, we got real close. There’s an appetite to help provide coverage to this vulnerable population, folks that make too much to be on Medicaid and make too little to be on the Affordable Care Act exchange.
But we just hit that place where it’s at loggerheads. A group started talking about a ballot initiative in 2015, when there wasn’t a solution at the end of the summer like we were promised. We talked about some of the challenges involved, the million-dollar price tag or more. How do you coordinate something like this when the group we were working with was a bunch of 501(c)(3) nonprofits? But around the fall of 2016, a group came together and decided this is a serious thing that we wanted to pursue.
And so the ballot initiative process for Medicaid expansion and Medicaid protections is underway. It’s called Utah Decides Healthcare. We have to have all signatures gathered and certified in April. After that, you really will see a big push to try to educate the public about this.
With Medicaid expansion, I think we do have a consensus in the community of providers that deal with things like opioid and substance abuse, with criminal justice and recidivism, with homelessness. The only way we can solve some of these problems is if we have these folks on a consistent source of health insurance.
There is a pay-for in the expansion ballot initiative. Because the Medicaid expansion portion the state is obligated to pay is relatively much smaller than what the feds pay, what the ballot initiative proposes is an increase in the non-food sales tax. It’s a .15 percent, so very small. It raises about $90 million a year and it pays for the cost of the expansion. That’s leveraging about $800 million federal dollars.
That’s significant economic activity in the state of Utah so we can deliver services to that very vulnerable population. Most of them are working. Studies we’ve looked at over the years show if they’re not working, they are usually caretakers or they have some sort of an undiagnosed disability or something like that. But they are just not making enough to get employer-sponsored heath insurance or to be part of the Affordable Care Act.
MINER: I understand the frustration within the public, that it hasn’t happened because of the political differences, and so that’s why it is an initiative. The public, I think, really wants some kind of an expansion. It’s just that when it’s done as an initiative, it ties us into the way the initiative is written and doesn’t follow a deliberative, thoughtful process about what it really will cost us.
MILAVETZ: Right now one needs coverage, so insurance, to give care. And that’s a problem, because the cost of that coverage—whether or not it’s Medicaid expansion or commercial or other governmental policies—is expensive. And then the cost of just regular care is on top of that premium. So that’s a problem for basic healthcare services.
Specifically to our state, and then on a more national perspective, what is our obligation as a society to take care of our people? What is that basic level that we have as an obligation? Until we actually answer that question, it is really impossible to define what it is that we’re going to give. But I think that a basic level of services is truly critical. And it’s not terribly expensive. Primary care is not expensive. And I think the citizens of this great state would also agree on that point. So how do we get there with this disconnect of coverage versus care? That’s the heart of the matter.
CLARK: Who’s the most vulnerable and most important part of our population going forward? It’s children. And if we, as a society, have said we are going to have mandatory education, are we also going to then have, as a right, healthcare? We’ve got to wrestle this through. I’m very distressed that CHIP has lapsed. We’ll run out of CHIP money by December, possibly sooner. We will lose coverage for a very important subgroup of children whose families make too much money to qualify for Medicaid and are not able to get commercial insurances. We know that a large portion of the Medicaid expenditure in our state and across the country is for nursing home care. And this is, again, a vulnerable population.
What do you think the role of Utah’s healthcare organizations and providers should be in dealing with the opioid crisis?
MINER: Over the last 15 years, the prescribing of opioids has increased fivefold—500 percent. But in surveys of pain control, there’s been no decrease in pain. So the pills are out there for people to use some and then to share with friends and neighbors, and particularly for kids to use for recreational purposes. Fifty-one percent of individuals addicted to opiates became addicted for medication that wasn’t even their own. Seventy-five percent of people addicted to opioids were on prescription pills, initially. Heroin use has steadily climbed in Utah.
As we get a little more cautious about prescribing opiates, the opiate prescribing is going down, opiate overdose deaths are slightly down. We still have well over 300 a year deaths just from opiates, and over 600 from total drug poisoning, overdose deaths. But as that opiate use goes down, we’re driving people to heroin use.
SHEETS: At Intermountain we’ve made a goal to reduce our prescriptions by 40 percent in 2018, which is about five million pills. That’s a lofty goal. Personally, in my family, we’ve had two surgeries the last two months, and both have come home with their OxyContin or Hydrocodone or whatever, and it’s a full plate of 30, 40 pills. And my family members never go through those. They may take six.
We’re overprescribing. So we’re trying to reduce that supply with our providers, and being very specific on our prescribing practices. We hope it works.
MCOMBER: We definitely are working on reducing both the number of pills and the prescriptions, and also on education. We’ve been working on providers educating patients that it’s OK to have some pain—it’s a complete paradigm shift to say that you can have pain, that we don’t need to reduce all of your pain, and that we can reduce the amount of prescriptions that we’re giving you.
And we are seeing that shift. It’s slower than maybe we wanted it to be originally, but we also didn’t get to the point where we are overnight. We are seeing where they are starting to prescribe a lot less. When they’re done with the pain, shift them off to something else. Get them onto a Tylenol, get them onto an ibuprofen, and then get rid of those extra opioids.
We’ve worked with legislators to pass different pieces of legislation. We have a partial-fill bill that was passed that allows the patient to have a partial fill, so that you leave medication at the pharmacy, and when you’re done, you’re done. It doesn’t stay in the medicine cabinet to be picked up by kids or by people coming into a house.
WILLIAMS: The dental community is also a part of the problem as well. Three years ago they estimated there are a hundred million individual opioid pills out there that were in excess for what was really needed to treat dental pain. I believe that’s fallen a little bit, because of awareness, but it’s still very high.
In the dental community, they are trying to figure out alternative pain treatments. A study just came out looking at a combination of acetaminophen and a certain dose of caffeine with it that that will reduce the swelling enough that they can reduce the pain without opioids. That one is starting to get some traction in the dental community. It will be a while before it actually gets used. But there have got to be alternatives to opioids.
BARLOW: Mental healthcare resources are another area that we’ve got to address. We just have not had adequate mental health services. The Affordable Care Act brought around some degree of expectation of coverage for plans that has now hopefully become a mechanism of professional skill set development. But suicide, depression—those are the resources that even still today are very, very difficult to get your hands on to help people that have those needs. The system just tries to Band-Aid it because of the lack of those resources.
SLONAKER: We partnered on the 21st Century Cures Act grant here in Utah, which is hopefully going to provide a full-court press on opioid use. The role we’re going to play is to help folks find insurance options with the expertise we built over the last few years.
Changing the way we prescribe is very, very important. But there is also a whole group of people currently, right now, in the community who need services. We work with a number of organizations that address and provide treatment for opioid use, but we just have a very hard time finding an insurance product, finding a way for them to get treatment on a sustained basis so they can actually recover.
MILAVETZ: Part and parcel to all of this is also information sharing. Knowing that the dentist prescribed 30 Lortab, and then the patient comes in to see me the next day and had been in the emergency room last week and doctor shopped three weeks ago—clearly that is a group of people that we need to be monitoring a lot more closely as a medical community. We have some big challenges, in terms of sharing medical information, that we’re starting to see in this group.
DOPL has done a great job in revamping the site where providers can search patients to make sure. I think that needs to become standard of care for anyone who is prescribing an opiate. There is some lag in that, but it’s much more real time than it ever has been.
What are some things you are doing to try to improve cost and quality transparency in healthcare?
BARLOW: We’ve tried to embrace that area from a standpoint of getting consumers more engaged for over 10 years now. We’ve posted our pricing for over 10 years in our delivery system and have made that available on our website. Our medical record is completely portable to the patient. They have complete access to everything—notes, pictures of films, lab results—and that’s been available for over five years now in our delivery system. We’ve been very active with the clinical health exchange, in terms of trying to make our data available to other healthcare systems as well.
Telemonitoring is the new horizon where that is starting to really become valuable; we can start doing things at home, where they don’t even have to come to the office at all. In particular, we can start monitoring chronic illnesses remotely in a convenient way, which will help us ensure we’re doing things that really need to be done, versus they’re coming in for their visit because that’s the schedule, but they may not have a medical event.
Now we need to get to that next level, where that data becomes bidirectional to have health indicators that pop up to say, “It’s really important that we see you, because something is happening with your weight or your blood pressure or your O2 level.” So there is just a fascinating new arena, where it’s going to make a tremendous difference in long-term disease management.
CARTER: Insurance providers, carriers, really control this side of things; that’s where it starts, right, is with the insurance side. And it’s no coincidence that the insurance carrier that has grown the most in the last seven to eight years is also the one that is the most innovative with their transparency tools. We’ve seen employers make decisions based upon that, where they chose an insurance carrier that had the best transparency tools. And they’ve made huge strides against everybody else.
We have folks in our office that do seminars at employer groups on a daily basis, where they are trying to get these tools more used by the employees, and they are making big strides in growing utilization of these tools every year. So we would encourage everybody, especially on the insurance carrier side, to continue to push your efforts on that.
MILAVETZ: We also need to educate our population about what healthcare consumerism is. I’m going to go out on the edge here and say that basic education on how to navigate the healthcare system probably should start in the education system, as part of that financial education that all high schoolers get. We need future consumers to understand where low-cost care is.
So educating the population on what does healthcare cost, how do you access that information, how do you ask those questions. People are at their worst when they’re sick, when they come in, and they are at their most vulnerable. And to talk about price of care at that moment is really challenging, but yet that’s what we’re asking of our patients when we talk about healthcare consumerism.
MCOMBER: The patient is only going to care about what costs they are going to pay. So if the patient has insurance, they are going to just care about what their co-payment is, what their deductible is. So in the scheme of things, that’s the most important transparency you can have. I don’t know if patients know where to go to get that.
Having the information of what the insurance is billed, I don’t know if that is helpful to the patient at all, because that is not necessarily what’s paid. We know that’s not what’s paid. So I think that confuses the issue if they see, here is what the insurance was billed, but here is what they were paid, here is what your cost is. All of that is very confusing.
CARTER: We’ve got this archaic, bifurcated model in the state where we’ve got the Intermountain system and we’ve got the non-Intermountain, and employees and members get caught in-between this all the time. The reason on your explanation of benefits you see the billed amount and the actual allowed amount is because the insurance companies all want to show their cool negotiating power. But if all these providers were to say, “We’re going to publish our pricing and we’re going to stick with it and we’re going to give it to everybody,” the insurance companies now are going to have to compete on innovation and not on who I was able to negotiate the best deal with. And the big players in the room could change that, and they could change it very quickly.
Utah is so far behind in that area. There are only, like, two other states where we see this. In these other states, the insurance companies have had to find other ways to differentiate themselves, and it’s on transparency and innovation and new programs to get your employees involved. And we don’t really have that need here; it’s who negotiated the best deal.