Got to Save Money, but at Whose Expense!

17352092_1146335548829436_6764414098610118174_nI was recently at a Department of Surgery meeting and after all the old news and follow-up to other meetings we were told of the severe negative financial situation that our hospital system was in-$2.5 million loss per quarter. He and the administration asked if we could find ways to keep patients out of the emergency room and to look at ways to cut costs. There were suggestions to speak with our primary care referrals to care for the patients in their offices and for us to try to do procedures in the office, etc.

Then I saw these announcements from Blue Cross and Blue Shield to their patients/clients, defining emergency care versus urgent care, etc.

Emergency Room visits

Emergency Room visits.1

Interesting! Imagine getting this directive! Is it all about the patient or efficient utilization of resources…the bottom line..profits?

And maybe this new President knows what he is doing. Think about it, even though his push to Repeal and Replace is not progressing as fast as he thought it should, all of a sudden we are seeing individual states taking responsibilities for Medicaid and other health care needs instead of putting the burden on the U.S. government.

Also, think about the President’s announcement, i.e. his decision to withdraw the United States from the Paris climate accord, the landmark 2016 agreement that held support from a majority of Americans in every state.  There was a tremendous outburst of negative responses. But also what happened? The former Mayor of New York, billionaire, politically active billionaire, Michael Bloomberg, stepped in to partially alleviate the impact of the policy shift. Through his foundation, Bloomberg Philanthropies, he pledged up to $15 million to the United Nations Framework Convention on Climate Change, which will likely lose a comparable amount in funding from the U.S. as a result of the American withdrawal. The UNFCCC works principally to stabilize greenhouse gas concentrations in the atmosphere.

In a press release distributed on Thursday evening, Bloomberg commented, “Americans are not walking away from the Paris Climate Agreement. Just the opposite—we are forging ahead.”

In addition, Governor of California announced, after a closed-door meeting with Chinese President Xi Jinping, during which the two pledged to expand trade between California and China with an emphasis on so-called green technologies that could help address climate change, that he signed collaboration agreements with leaders in two Chinese provinces, Jiangsu and Sichuan. Like the Paris accord, the deals are all nonbinding. They call for investments in low-carbon energy sources, cooperation on climate research and the commercialization of cleaner technologies. The agreements do not establish new emission reduction goals. Fourteen other states have stepped up to agree to the climate change guidelines and their support.

I also was concerned about our pulling out until I thought about it considering all aspects. He actually put the burden on the consumer, the States and private investors to contribute to his major concern…. the $100 billion that President Obama promised the U.S. would contribute. Especially when you consider that the worst offenders were China and India, and what do you think they were contributing????

One of the concerns has been dealing with Medicaid. Now see what is happening within the states. Maybe we shouldn’t lower the number of people on Medicaid, but maybe we should be looking at ways to make the system more efficient.

Both red and blue states have successfully lowered costs by focusing on improving health outcomes and maximizing efficiency as they are all considering the potential of the new health care act.

Norbert Goldfield reported that the Senate would likely soon vote on a new version of the House-passed American Health Care Act, a bill intended to repeal and replace the Affordable Care Act. The current version of the bill aims to reduce Medicaid spending by $800 billion over 10 years. By reducing the federal match for new enrollees and tightening eligibility standards related to the federal poverty level, the plan will make it harder for people to cycle on and off Medicaid in accordance with their employment status, ultimately reducing the number of “expansion enrollees” that qualified for Medicaid under the ACA. The net effect is to make it financially infeasible for states to continue to cover the ACA expansion population, leading to over 20 million Medicaid patients losing their insurance over the next decade.

In 2016, total Medicaid spending was $575.9 billion, which is 3.1 percent of gross domestic product (up from 1 percent of GDP in 1982). Federal funding accounts for 63.1 percent ($363.4 billion) of Medicaid spending (up from 52.9 percent in 1982). Actual state spending per Medicaid enrollee varies dramatically across states, ranging from $3,500–$9,500 per person per year. This immense variation is partially due to readily explainable differences in input costs (i.e., lower labor costs in low-income states) and to significant differences in benefits between states. (Some states, for example, have generous home health programs.) But some of the variation in cost is due to poorly understood factors such as the relative efficiency of the delivery system in each state.

So what if, instead of attempting to control Medicaid costs by reducing the number of individuals enrolled in the program, we looked for innovative ways to reduce the cost of the Medicaid program per customer? If we focus on reducing waste as a way to bring down costs, we could simultaneously improve health outcomes, too. Such an approach is not wishful thinking—it has already been shown to produce real cost savings in some states.

All hospitals operate in slightly different and distinct ways, and only recently has there been enough data available for hospitals and managed care organizations to meaningfully compare their outcomes and use the results to help them create more efficient systems. But some states are starting to do this within their own hospital systems, with promising results. Take Maryland—by focusing relentlessly on improving outcomes—for example, through implementing new practices aimed to limit unnecessary medical complications—Maryland has witnessed extensive decreases in hospital complication rates. In the first two years of its initiative (2009–2011), complications were reduced by 15.26 percent, saving $110 million (0.6 percent of total hospital cost). This success was attributed in part to Maryland’s use of financial rewards and penalties to incentivize hospital performance. The continuation of the program has resulted in further reductions in complications.

Other states have seen similar success. Texas has decreased avoidable emergency room visits by 10 percent and re-admissions by 25 percent for a savings of $100 million (the research on that has yet to be published). Minnesota has decreased re-admissions by 19 percent, meaning a savings of $70 million for Medicaid. New York is beginning to see similar success. (Full disclosure: Some of the U.S. states referenced are using classification tools from my company, 3M Health Information Systems, to develop new Medicaid payment models.)

How do these state Medicaid programs achieve better outcomes? It is a combination of sharing comparative results between hospitals or managed care organizations to highlight differences between institutions, sharing of best practices, and modest financial incentives to improve. Just as important, a pay-for-outcomes approach must focus on a small number of outcomes that have a measureable financial impact and that cover the vast majority of avoidable services or poor outcomes. (If there are hundreds of measures, health care institutions will simply get lost.) This small set of outcomes includes hospital complications that can be minimized, such as limiting the risk of patients’ acquiring pneumonia in the hospital after a stroke, treating a cold at a primary care doctor’s office or an urgent care center instead of an emergency room, and limiting avoidable hospital admissions or re-admissions by treating ongoing conditions, such as out of control diabetes, at the primary care doctor’s office.

It should be noted that these states are led by governors of both parties. These are programs that can have broad bipartisan support, in part because they not only lead to cost savings, they also lead to better medical outcomes

Medicaid expansion with cost-containing oversight is a rational way to provide coverage to America’s poorest citizens. Unfortunately, rationality is not prized in our country any longer.

There are significant savings opportunities across other states to improve outcomes and reduce waste. Rather than uniformly cutting costs and/or health care coverage, the federal government could incentivize progress by instituting programs like the ones these states have already shown can be successful. While the status of the AHCA is unclear, the need to address payment reform—especially for Medicaid—remains. How much money can be saved by improving outcomes? The Institute of Medicine estimates that between 20–30 percent of total health care spending is either wasteful or a consequence of poor outcomes. Is there $800 billion in savings available? A pay for outcomes approach won’t solve every problem—but it would be quite a start.

Finally, we now hear the Democrats suggesting strongly that they should all work together to improve the system of health care realizing the inefficiencies and faults of the Affordable Care Act. Even, Mt. Schumer is stepping up and instead of trying to cause more division is also suggesting that all parties work together. Could this be about this latest shooting in Alexandria, Virginia where 4 people including Senator Scallese were shot while practicing for the yearly charity baseball game.

Senate Minority Leader Chuck Schumer (D-N.Y.) blasted Trump’s incompetence over the GOP health care bill’s implosion, but said that Democrats were willing to work with him to fix Obamacare – as long as repeal was off the table.

“There were two problems,” he explained to Wolf Blitzer on CNN Friday, “two reasons this failed, that President Trump, once is incompetence.”

“I’ve never seen such incompetence,” he added. “They put together a bill that doesn’t have the support of so many of their own party. Nobody, hardly anyone on the outside opposed it, AARP, uh supported it, AARP against it, AMA against, hospitals against it, nurses against it. And second, you can’t, and this is a lesson for them for the future – you cannot govern from the hard right. The only people who really benefited were the very very wealthy.”

“Well it’s a tall tale, another one by President Trump,” Schumer said. “They never reached out to us, they never talked to us, they never said how can we work together to make it better. The failure is of course completely among the Republicans, President Trump and the Congress. They weren’t even trying to get Democrats involved.”

Schumer responded to Trump accusing the Democrats of not wanting to work with Republicans on health care in his address from the White House Friday after the bill failed.

“Well it’s a tall tale, another one by President Trump,” Schumer said. “They never reached out to us, they never talked to us, they never said how can we work together to make it better. The failure is of course completely among the Republicans, President Trump and the Congress. They weren’t even trying to get Democrats involved.”

“And now, it’s about time for the president to lead,” he charged, “not to name call, not to blame, but to lead. To simply say people are going to suffer and someone’s to blame, that makes no sense at all. If you’re a real president, you care about people’s suffering and we’re ready to work with the president.”

“Take repeal off the table,” he reiterated. “Let him and Speaker Ryan, Mitch McConnell say ‘we’re not repealing’ and we’ll work with them on improving Obamacare. But in the meantime for the president to do things to make Obamacare worse and have millions people suffer, to make sure it doesn’t work when CBO says it does work, that’s not being president.

Schumer reiterated their willingness to work with the president, saying, “If they take repeal off the table, absolutely.” I’m not sure that they will ever be able to say that but it seems that there may be a way for all to work together.

“They tried to repeal it, they failed,” he concluded. “If they keep trying to repeal it, we won’t be able to do anything. So of course, we’ll come to them. And it’s about time for the president to act like a president. Not to make people suffer, make things worse by making Obamacare worse, it’s a good bill now, he can try to make it better, that’s fine. But this idea, ‘ha ha ha, people will suffer’ that is not what a president’s supposed to be. We’re not gloating that they failed. We’re sad that they won’t work with us to improve Obamacare.”

I am more and more convinced that our President Trump really does have a plan, but it is difficult to read through the arrogance and Tweeting to see the real long term plan. Hopefully the GOP and the Democrats woke up with this recent shooting of Representative Steve Scalise, who sustained injuries to internal organs, broken bones and severe bleeding after being shot in his left hip early last Wednesday at a baseball field in a suburb of Washington, where they were practicing for an annual charity baseball game between Republicans and Democrats.

My suggestion is to remove the Blackberry that seems attached to President Trump’s fingers, get over the blame game that seems to be stagnating any positive actions on the part of the Senators and Representatives that we voted into office and work for our futures. Wake up Congress! President Trump also needs to forget being a CEO and start acting like the President as Sshumer suggested. It is all about process improvement and that is the subject of our new book soon to be published and the reason that we wrote that book is because it seems that we are losing our direction in life.

Most important, Happy Father’s Day to all the Father out there!! Enjoy family and friends! I hope that you all enjoyed your weekend.




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