Reference no: EM13172711

1. In the article below, Michigan is offering financial incentives to improve health. Using economic model(s) demonstrate the impact of such policy on efficiency of the medical care system.

Public Health & Policy

Michigan Ties Behavior Change to Medicaid

By Phil Galewitz , Kaiser Health News

Delayed by state lawmakers, Michigan did not expand Medicaid until the day after the federal online insurance exchange closed March 31 -- a move advocates feared would undermine signups.

Turns out, enrollment is exceeding expectations, which has pleased officials who seek to make the state among the first in the nation to add a heavy dose of "personal responsibility" to the federal-state entitlement program.

This spring, the Wolverine state became the second after Iowa to offer lower premiums and cost-sharing to recipients who agree to do a health risk assessment with their doctor every year and to commit to improve their health by taking steps such as quitting smoking or losing weight.

"There is a heavy consumer engagement piece in this, both in terms of finances and skin in the game, but also in terms of healthy behaviors and really trying to find ways in which we can make the population of Michigan healthier," Michigan Medicaid Director Stephen Fitton said in a briefing in Washington earlier this month. "We have a high obesity rate in Michigan. We don't do very well on some broad [health] measures, and we are really looking for ways to move the needle there."

The hope is that giving people a financial incentive to change their behaviors will improve their health and control Medicaid spending.

Other states, such as Pennsylvania, are also seeking to tie Medicaid coverage to personal responsibility by seeking federal approval for a plan that would prod unemployed people to search for jobs and get annual wellness exams in exchange for lower premiums.

In an effort to give Medicaid recipients more "skin in the game," as proponents call it, most newly eligible Michigan recipients will face copays -- typically from $1 to $3 for most outpatient health services. Those with incomes between 100 percent ($11,670) and 138 percent ($16,105) of the federal poverty level will also pay a premium of 2% of their income.

While many states impose similar cost-sharing, Michigan will be the first to ask enrollees to make those payments -- either copays or premiums or both -- through a health savings account. Indiana Gov. Mike Pence, a Republican, has also recently proposed health savings accounts as part of his Medicaid expansion plan.

Both the state of Michigan and individuals and potentially, their employers, will be asked to deposit money into those accounts based on enrollees' copays in the prior six months. If funds are left at the end of the year, they will be rolled over. If a beneficiary becomes ineligible for Medicaid, the balance will be put into a voucher they can use to buy private insurance.

Joan Alker, executive director of the Georgetown University Center for Children and Families, credits the state for using the "carrot approach over the stick approach," but said there's little evidence such incentives improve enrollees' health.

"We know from the employer world, this is very hard to do," she said.

She said the complexity will also make it harder for the state to implement the plan. "The legislation adds a lot of red tape," she said.
Enrollees with incomes above the poverty level who fill out health assessment forms and commit to healthful practices can reduce their premiums by half. Individuals with a $12,000 income, for instance, could cut their annual premium of $240 to $120.

Enrollees with incomes below the poverty level won't pay a premium though they are eligible for a $50 gift card if they complete their assessment form and agree to improve their health.

They don't have to meet specific health goals to qualify for lower cost sharing or the $50 gift card beyond filling out the assessment with their doctor once a year and attesting that they will do such things as eating better, exercising more, or getting a flu shot.

The state is still trying to decide what to do if a recipient fails to contribute to the savings account. Losing Medicaid coverage is not an option, said Michigan Medicaid spokeswoman Angela Minicuci. The state is considering collecting unpaid contributions through a lien on tax refunds.

Michigan did not expand Medicaid until April because the legislature did not approve the move until last September, and Republican opponents included a provision delaying the implementation until at least 90 days after the lawmakers adjourned their 2013 session. Michigan is the 25th state and one of eight led by Republican governors to expand the program. Gov. Rick Snyder also waited to make sure the state's online enrollment was working to avoid a repeat of the botched federal exchange rollout.

Nonetheless, more than 270,000 low-income Michigan residents have signed up for Medicaid since April 1 -- over half the estimated 477,000 eligible for the program. The signup pace has exceeded that of most of the 25 states that expanded Medicaid in January, which benefited from the publicity surrounding the open enrollment period for private plans. Unlike buying private coverage, people can sign up for Medicaid any time.

"I was absolutely worried about the timing," said Conrad Mallett Jr., chief administrative officer for Detroit Medical Center, a large safety net hospital. He credits efforts by groups such as the Salvation Army to boost enrollment. "In 99% of the cases, poor people are just poor, not stupid -- they know what this opportunity means in their lives."

Nearly all of those newly eligible for Medicaid will get their coverage through a private Medicaid managed care plan. Health plan officials say the risk assessment will help them identify members who need help quitting smoking or, say, managing their diabetes.

"We take this as an opportunity to engage with members," said Patricia Graham, director of operations for Detroit-based Meridian Health Plan. Her plan is also paying $25 to doctors as incentives to get them to help their patients fill out the health risk assessment and set some healthy behavior goals.

The state's safety-net hospitals that treat many poor and uninsured patients are among the major beneficiaries of the strong Medicaid enrollment. "This will have a significant effect on Henry Ford Health System because every year we see our uncompensated care rising," said SharifaAlcendor, the hospital's director of patient care management.

Alcendor, though, is concerned that hospitals and other providers will get stuck with extra costs if enrollees don't pay into the health savings accounts.

Michigan health officials said their enrollment efforts gained from the publicity surrounding the Obamacare marketplace enrollment so there was still huge demand when Medicaid signups began in April. They also were able to switch 60,000 adults into Medicaid automatically on April 1 who had more limited coverage in a state basic health insurance program. Unlike a number of states such as California, which have a large backlog of people waiting to get insurance cards, Michigan officials say new enrollees have received their Medicaid cards within weeks -- with coverage retroactive to first day of the month they signed up.

"We've been pleasantly surprised that we could enroll this amount of people in this short period of time," said Phillip Bergquist, director of health center operations with the Michigan Primary Care Association.

Like most northern states, Michigan officials benefited from a culture where residents are used to having insurance, said Josh Fangmeier, policy analyst at the University of Michigan's Center for Healthcare Research & Transformation. Despite the state's higher than average unemployment rate, its 13% uninsured rate in 2012 was below the nation's 15.4 percent average.

This article, which first appeared on June 11, 2014, was produced in collaboration with USA Today. It was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

2. In the article below, suggestion has been made to integrate urgent care centers with primary care physicians for seamless medical care 24/7. Using economic model(s) discuss the implications of such model on the medical care sector.

Doc-in-the-Box Meets Docs-Outside-the Box

By Fred N. Pelzman, MD

During her annual physical exam, one of my patients recently asked me, "Are urgent care centers any good, Dr. P?"

She recounted an incident a few months earlier where she awoke with an acute illness and was sick enough that she felt she needed to receive care -- at least some medical attention -- more imminently than she could get from waiting to speak to my office in the morning. She said she thought about calling the answering service, but thought they would have told her to go to the emergency department.

She woke with an incredibly high fever, but no other specific localizing symptoms, and she went into an urgent care center near her home. She reported it was a wonderful environment, beautiful furnishings, soft music, comfortable chairs. She was seen by a practitioner there who told her they thought she had strep throat. They did a rapid strep test in the office, which was negative, and told her they were going to give her an antibiotic, and do another test which was sent to the lab for follow-up the next day.

She said she was a little confused, but went home, filled the prescription, started taking it, and called them as directed the next morning. She said she reached them easily, they were very polite on the phone, told her that her culture was negative, that she should stop the antibiotic, and that she probably had a virus.

Now we know it is easy for us to second-guess someone's clinical care. Someone working in an urgent care center sees someone only for a brief snapshot, a single moment in time, having no long-term relationship with the patient. The same is true of emergency departments. They get to see someone only in that slender window of opportunity when they are dropped into their realm, and usually have no choice but to maximize to optimize care.

A colleague of mine once said that it takes 30 seconds to give someone a prescription, and 30 minutes not to give someone a prescription.
We have all seen patients coming out of urgent care centers and emergency departments with prescriptions for antibiotics that were probably not necessary, and with opiate pain medicines which we are then left to sort out whether they are needed. We have also seen extensive scans and lab tests that we now need to take care of and follow up on, that likely are not clinically relevant.

I'm not saying that in the primary care setting our care is always perfect, efficient, always evidence-based. We have all given antibiotics for a cold (admit it, you know you have), and ordered too many labs and scans because we could.

But these other settings, these alternatives to the primary care office, serve an incredibly important and useful purpose, and can become critical cogs in the healthcare team that we're trying to build in the patient-centered medical home model.

We know that ideal care requires 24/7/365 access but, as we know, none of us want to be on call 24 hours a day, 7 days a week, 365 days a year.

I recently had a nearly perfect interaction with an urgent care center and the staff who provided care. My patient was seen there urgently late on a Friday night, and they actually followed up with her 2 days later (then Sunday morning) and provided ongoing, and appropriate, care for this clinical situation. Monday morning I arrived in my office and received an email communication from the provider at the center, detailing what had happened, explaining their thought process, and recommending follow-up with me.

For most of us busy primary care providers, after-hours care is usually telephone care. It's hard for us to come into the office at 12:30 at night when a patient is sick and wants to be seen. There certainly are exceptions to this, where we may come into the emergency department to see a sick patient, but for many things it is nice for patients have an option for walk-in care that is safe, clinically rational, and available.

Wouldn't it be nice if the urgent care centers and emergency departments became an integrated part of our team, rather than us continuing the sometimes somewhat adversarial relationships that currently exist between these different settings?

Having a safe after-hours location for our patients to receive care, where their medical records were available to prevent duplicated care and inappropriate care, as well as open lines of communication, safe sharing of medical records and results, and collegial relationships between providers, would create and extend this wider model of team-based care.

In the emergency department, the paradigm is evaluate and stabilize, and then a branch decision happens about whether to admit or send home. At the time of discharge, a safe follow-up plan needs to be arranged for patients, and this is often a sticking point for the emergency department.
Recently our practice, in conjunction with our affiliated emergency department, developed a plan to allow protected next-day appointments at our practice for patients being sent home from the emergency department, who need this urgent interim care as a safe "conclusion" of their discharge plan.

We are "hanging" multiple appointments frozen in our next day's schedule, on a website which the emergency department physicians have access to. When they find an appropriate patient who needs a next-day appointment in primary care, they enter the patient's demographics, contact information, medications, and plan, and our scheduler picks that up first thing the next morning.
We are exploring ideas to enhance provider-to-provider communication, so that a better and safer handoff can happen, but for now a review of the discharge summary is all we've got. We envision e-mail messaging, or even someday direct sign-out through video chat. Anything to make the transition smoother.

As you can imagine, this has had some growing pains, as any project like this usually does at the start. Patients who should have been kept in the hospital were sent here to our practice. Patients who have another outside primary care doctor who should be able to see them the next day were sent here. Patients who didn't need to come here the next day were sent here.

But we are learning, and we feel that this is a useful addition to extended care for our patients, which will help keep them at the center of care, and keep things from falling through the cracks.

In the idealized format, in a truly patient-centered medical home, our patients would access these other sites for care, and then care would flow back to us as appropriate. We hope that this emergency department project helps optimize the emergency department discharge process and provides for high-quality, after-visit care. Next steps will be to work to enlist local urgent care centers, but we need to build relationships with these nonaffiliated sites as we move forward.
But an urgent need is clearly there.

3. In the article below, innovative ideas are put to work in and around Las Vegas for providing medical care. Using economic model(s) discuss the intent of these innovations.

A Vegas Gamble: Doctor Builds a New Kind of Clinic in the Desert

By Kristina Fiore, Staff Writer, MedPage Today, Produced by Peter Troast
For best viewing, click the bottom right corner for full screen.

LAS VEGAS -- On a Friday night in mid-May, part of Fremont Street in Las Vegas is shut down and converted into a skate park, with flanneled teens attempting tricks on ramps and rails. Alternative rock band Taking Back Sunday is set to take a pop-up stage flanked by Zappos.com banners. Old industrial buildings converted into funky restaurants host tech geeks and startup CEOs. Street murals brighten drab concrete fences.

Here in the desert, there's a tech city vibe reminiscent of Seattle or Silicon Valley, although it's probably the last place anyone would expect such a thing. This party city of 2.5 million people has never had much of a cultural identity before, especially not in a downtown area that has long been considered a wasteland -- until Zappos CEO Tony Hsieh, known for his love of all things quirky, pumped $350 million into a revitalization project to turn it all around.

And this is where ZubinDamania, MD -- perhaps better known as his Internet celebrity alter ego ZDoggMD -- wants to turn the tables on healthcare.

Damania is the CEO and founder of TurnTable Health, a direct-pay primary care clinic charged with keeping tabs on the vital signs of this influx of talent. Hsieh recruited Damania in 2011 to build the clinic from scratch after recognizing that the ZDoggMD persona was fueled by a desire for change in the U.S. healthcare system.

Damania, a hospitalist at Stanford University Medical Center at the time, was hesitant: "When I first came to Vegas I was like, how am I gonna build a clinic, I am a hospitalist and a very bad rap artist, I have no skill set in this."
But he quickly found his focus: changing the culture of medicine. He's putting his money on the idea that homing in on "the things we went into medicine to do" -- building great relationships, helping people -- could improve the healthcare experience for both patients and providers.

There are plenty of challenges. What happens when patients leave the clinic walls? Who covers their hospital bills? Is this model scalable to other clinics? And he'll need some 4,000 to 5,000 patients to make the numbers work -- can downtown attract the businesses and employees?

They're hard questions, but Damania has been given the opportunity to think big in a place famous for drawing in dreamers.
Putting the Heart Back in Medicine

Standing outside the TurnTable Health clinic on Bridger Avenue in the heart of the revitalization district, you still see evidence of a down-and-out village. There are the drunks, costumed youth on Fremont Street, and rambunctious revelers loitering around the old-time casinos.

But you'll also meet the 20-something fit blond runner who walks into TurnTable to discuss membership.

The clinic has an open layout and lots of windows. On one end is a kitchen where nutritionists teach healthy eating. There's a community lobby -- not a waiting room -- equipped with cushy chairs, ottomans dotted with Hampton links, and a Playstation. On the other end is a yoga studio that doubles as a classroom for all of the clinic's programs, including zumba, meditation, and nutrition classes.

Members pay $80 a month for what Damania calls "all you can treat" access to a buffet of care, which includes all of these programs, as well as on-demand access to a doctor or health coach.

Health coaches are the front line of the clinic. They're not nurse practitioners or physician assistants. Instead, they've come from various walks of life -- paramedics, yoga instructors, accountants -- hoping to find a better way to connect with people.

These coaches are screened for emotional intelligence and empathy, because a big part of their job is to bond with patients: go jogging with them, help them shop for groceries. They're also available 24/7 to communicate with patients by email, text, Skype, or phone.

The concept was developed by Iora Health, another startup company that TurnTable Health partnered with to help define its culture. Iora currently has six of its own practices with 10,000 patients and plans to have 13 by the end of the year. Damania discovered them because they run the Culinary Extra Clinic, an office devoted to managing chronic disease, only two miles away from TurnTable.

"You can't do this in a model where everything is billable and codable," Alexander Packard, chief operating officer (COO) of Iora Health, told MedPage Today. "You don't get paid for helping patients shop for groceries."

Packard said the company has 40 health coaches across the country. "You can take someone with a huge heart and teach them how to take vital signs and work with a doctor," he said. "You hire for attitude and train for skills."

Matt Dallmann, president of Creative Practice Solutions, a practice management firm, said he hadn't heard of the idea of letting health coaches be the gatekeepers of a primary care clinic, but that the strategy could work to help keep overhead costs manageable -- especially at an office that's catering mostly to well patients.

Iora's model also includes a strong mental health component, with social workers hired to do the heavy lifting. But health coaches certainly lend an ear and can refer when necessary.

Patient stories are taken in clinic rooms where all members of the healthcare team, including the health coaches and doctors, sit around a table at eye-level, in front of a computer screen that displays the patient's electronic health record, to make for a transparent process.

"I can't write, 23-year-old drug seeker here for Vicodin," Damania said. "I have to write, we had an honest discussion about narcotic abuse."
Physicians take the tough cases, and the ratio is one doctor for every four health coaches; currently TurnTable has two doctors and eight health coaches in addition to other support staff.

During a tour of the clinic, Damania seems particularly fond of the "huddle room" where all of the members of the healthcare team gather every morning to discuss the patients who are coming in. They all know every patient. Electronic health records are displayed on two large monitors at the front of the room, with one screen dedicated to patients assigned a "worry score" that requires some kind of preventive action.

Damania is also pleased to point out that there are no individual doctors offices, since it's a non-hierarchical environment.

"It's a culture that all works together with the sole focus of taking care of patients," Damania said.
Tony Hsieh's Culture Club

In his book Delivering Happiness, Hsieh tells the story of how the rush to sell his first company, LinkExchange, deflated its sense of community. No one was having any fun, and Hsieh promised himself he'd never let that happen again. So once he took over as the CEO of Zappos, he made sure he got the culture right from the start.

His belief that random, unplanned interactions between people yield the most innovative results led to a $350 million cash infusion into the Las Vegas downtown -- $200 million in real estate, $50 million for small businesses, $50 million in education, and $50 million for tech startups.

"Tony saw the opportunity to have a blank slate to create the intense, population-dense, serendipitous interactions that drive productivity, so he started investing his own money," Damania explains. "He moved Zappos from the suburbs [to downtown], which at the time many was thought was crazy, but which now seems quite visionary."

Damania has had many discussions with Hsieh about changing the culture of medicine: "His philosophy is that your career should involve things that make you happy and effective." People need to have a feeling that they have control and a stake in what they're doing every day, and they also need to perceive that they're making progress, he explained.

Both of those tenets feed into getting the culture right: "If you get the culture right first, the rest falls into place with decent business ideas," Damania said. "If you get the culture wrong, you're constantly fighting against that headwind."

He didn't have any of those elements at his last job as a hospitalist, and he expects many doctors today are familiar with the feeling: ceding control to administrators and insurers, being burned out from seeing too many patients in a fee-for-service system set up to pay for quantity over quality.

Damania believes that changing that can make a difference for both patients and providers -- and that the time is right for doing so. The Affordable Care Act is pushing more preventive care, and a more educated population of healthcare consumers is looking to take a more active role in their care.

Although patients have more information than ever at their fingertips, they still want that one person who can parse all of that knowledge for them, Damania says: "We love the empowered patient. We want them to be an active member of the healthcare team. It makes us happier, and we feel we can contribute in a way that's different from the paternalism of the past."

Iora's Packard says research has shown that the empowered patient has better health outcomes: "People who believe in themselves and have the confidence [to manage their health] can be part of making good choices instead of letting healthcare happen to them. That patient does so much better."

It's buy-in from this type of patient that will make Damania's vision work, Dallmann says. "Will you sign up for a year and take a couple of classes, and then not go anymore?" He also needs buy-in from the employers, which will be driven by demand from employees.

"The first question is will he be able to get the companies on board, and the second is will he be able to keep up the supply based on demand," Dallman said. "A lot of models are similar to what an insurance company does: they're looking for a premium hoping a lot of people don't come in."

The answer hinges on whether Hsieh's vision to attract tech startups and keep them thriving comes to fruition.
Getting the Buy-In

Some of the companies recruited to set up shop downtown are buying in to Damania's ideas. GoldSpike, a former casino turned co-working space, has bought TurnTable Health coverage for its employees, as has Project100, a car-sharing service, along with smaller businesses like local restaurants and cafes.

"This is a tight community and we all understand the value of being healthy," Damania says.

Although Zappo's hasn't signed up yet, Damania says parent company Amazon is investigating the possibility.

TurnTable isn't just working with companies; it's also working with insurers. It recently signed up Nevada Health Co-Op, a nonprofit insurance plan created as part of the Affordable Care Act's state-based exchanges, to provide coverage under its Neighborhood VIP plan.
And it's not clear how the uninsured or underinsured patients fit into the picture. "I don't see it as any low-income patient would do it," Dallmann says. "It's great for millennials that want self-actualization and to have yoga at work, but I don't think low-income people will care."

Damania says the clinic treats the low-income walk-in free of charge in the case of emergencies, but the team tries to stay away from per-visit fees in general "since it's counter to our model and distracts resources from our members' care."

He also acknowledges that another fundamental question is, what happens to patients who need care outside of clinic walls? With the Nevada Health Co-Op plan, patients get wrap-around coverage, so they're covered if they need a trip to the emergency room. And most employers also have additional coverage on the plans they offer to employees -- so residents of downtown Las Vegas aren't completely free of the burden of dealing with insurance.

There's also the reality that not every doctor who wants to start a direct-pay clinic gets millions to invest in a new office and a new structure -- not to mention the guarantee of a burgeoning patient community.

But Damania insists his method is translatable to the smaller practice: "We went a bit overboard on our flagship facility, but this can be done economically."

One key is in cutting overhead expenses. There's no billing of insurance, which saves 10% to 30% of those costs, Damania estimates.
Although doctors and health coaches are compensated with competitive salaries and benefits, that cost is covered by the membership fees. At $80 per person and an expected patient population of 4,000 to 5,000 managed by three or four doctors (at a ratio of four health coaches to every one doctor), Damania calculates paying off capital expenses and becoming profitable within 3 to 3.5 years.

It's an ambitious goal. Dallmann breaks it down: 5,000 patients amounts to $4.8 million in revenue. That translates to seeing 96 new patients per week -- or 24 new patients each week for each of the four doctors.

Since the clinic opened five months ago, TurnTable Health has garnered 800 members. Roughly a third of those are from partnerships with downtown businesses, half come from the Nevada Health Co-Op, and the rest are individuals paying out of pocket.
Fuel for the ZDogg Fire

Building out economies of scale can also help with costs, Damania says. The goal is to be able to "run the Iora Health software" like an app so that the model can easily be applied to any clinic.

For now, Damania wants to continue to focus on culture in order to continue to generate the necessary volume of patients.
Next steps would involve hiring TurnTable hospitalists to extend the main clinic's culture into hospitals so that if a TurnTable patient is admitted, he or she will be cared for by a provider who not only shares the electronic health record, but also the clinic's ethos.

"We don't want to become Kaiser, we don't want to own hospitals," Damania says. "We just want to get the culture right and extend it as far as we can."

If churning through patients isn't the main source of income, how will the clinic stay afloat? Damania says patient satisfaction will drive demand. If patients are happy, they'll stay a member, or their health plans or employers will continue to sign up.

And if it doesn't work out, Damania always has ZDoggMD to fall back on. Frustration with a broken system fueled those early videos, and trying to start a clinic -- and possibly a new way of approaching primary care altogether -- may provide plenty of raw material.

But that doesn't seem to be the case just yet, so ZDogg may have to lay low a little longer: "The problem since moving to Vegas," Damania explains, "is that I'm doing something that makes me so innately happy because I'm trying to effect change in the system. So the fire from ZDogg had somewhat been quenched."

It shouldn't be too hard to rekindle, though: "All it takes is one visit to the hospital."