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DISCUSSION GUIDEFOR INSTRUCTORSAn Introduction to the US Health Care Industry:Balancing Care, Cost and AccessDavid S. Guzick, MD, PhDSeptember 21, 2020To the instructor:Facilitating Class Discussion About U.S. Health CareThe textbook entitled An Introduction to the US Health Care Industry: Balancing Care, Cost and Access is intended for use by graduate students in public health and health services research, as well as by undergraduates interested in this topic as part of their preparation for a health profession, a career in public health, and/or their general liberal arts education. This book has been written as a story – beginning with economic principles; continuing with the history of the health care industry in the context of these principles; continuing further with an analysis of the current status of health care services and pertinent stakeholders; and concluding with a discussion of how the balance of care, cost and access can be improved, in which reform is compared and contrasted with radical restructuring.Many disciplines come together in the description and analysis of this industry: economics, health services research, political science, history, and others. This discussion guide is provided as a companion to the textbook, recognizing that each professor will bring his or her own perspective and discipline-based expertise. The publication of this book was in production when the COVID-19 pandemic occurred. An online supplement on the impact of COVID-19 on health and the US health care industry is available. This discussion guide incorporates material on many aspects of the pandemic and its impact.Two general categories of suggestions for class discussion (in person or virtual) are offered: For some chapters, there are suggested assignments for small group exercises. These are written as instructions to the class. For such chapters, the class can be divided into small groups of students who would work together (whether in person or online) to create a brief powerpoint or other summary. You could choose, on a rotating basis, which groups could present their work to the others (but request the PPTs of all groups for student assessment) and then lead a discussion, or take some other approach. For other chapters, the students would be expected to read the chapter before class (perhaps supplemented, if you wish, by an a videotaped lecture that you could create). At class (whether in person or online), you might provide a brief overview of the topic, and then lead a discussion with the suggested questions or with others you might add.Chapter 1 Setting the Stage (Part 1)Small Groups: Using Public Databases to Characterize U.S. Health CareThe conundrum facing U.S. health care is that, in comparison with other high-income countries, we spend the most on health care per capita, yet have the poorest access and worst outcomes. Thus, in comparison with these other countries, there is an imbalance in the U.S. with regards to care, cost and access. To set the stage for understanding why the U.S. has reached this unfortunate state of affairs, the goal of the first small group exercise is to define the scope of the problem. Students will document key characteristics of U.S. health care – in terms of health status, cost and access – by examining trends in U.S. data across time (topic 1) and by exploring international comparisons (topic 2).For topic 1, the national characteristics to be documented are life expectancy, infant mortality, health care expenditures (total and/or per-capita), and uninsured rates. Using the links below choose three characteristics and list, graph or describe current national data and trends. Describe two or three salient points about these trends.For “health care expenditures,” click on the National Health Care Expenditures link below. Then click on “historical” > “NHE Tables” > Table 2. For historical uninsured rates, consult Figure 1 of the 2016 JAMA paper by Obama linked below as “Uninsured rates-historical 1965-2015.”National Health Care Expenditures (links to an external site)Uninsured rates-historical 1965-2015??(Links to an external site.)Uninsured rates-recent years?(Links to an external site.)Life expectancy-historical 1900-2016?(Links to an external site.)Life expectancy-recent years?(Links to an external site.) Infant mortality-historical 1900-1997?(Links to an external site.)Infant mortality-recent years??(Links to an external site.)For topic 2, choose three countries for comparison with the U.S. from among the following: Australia, Canada, Denmark, France, Germany, Japan, Sweden, Switzerland, The Netherlands, and the United Kingdom. (These were the “peer” high-income countries analyzed by Papanicolas et al. in their 2018 JAMA paper. See reference below.) Create charts and/or tables of international comparisons of GDP and Gini index. To do this, use the World Bank data linked below: click on “browse by country;” choose a country, and then (1) type in “GDP” in the search box. There will be a drop down menu to choose “GDP per capita (constant LCU).” There will then be a choice on the right where you could choose “GDP per capita (current US$).” (2) Type in “Gini” in the search box, and then click on “Gini index” in the drop-down menu. (The Gini index is a measure of income inequality.) What are the main inferences that can be gleaned from these data?Create charts and/or tables of international comparisons of health metrics. To do this, use OECD data: (1) enter “health spending” in the search box. There will be a dropdown menu “Compare variables.” Choose “per capita” and/or “percent of GDP.” (2) In the search box, type in “life expectancy” as a health outcome (or another health outcome of your choosing). The OECD displays data for a wide variety of countries. You will just pick the three countries you chose to compare. What are the main inferences that can be gleaned from these data?ReferencesPapanicolas, Irene, Liana R. Woskie, and Ashish K. Jha. 2018. "Health Care Spending in the United States and Other High-Income Countries.” JAMA 319 (10): 1024-1039. doi:10.1001/jama.2018.1150.World Bank: International comparisons: GDP per capita, population, Gini Index?(Links to an external site.)OECD: International comparisons: health spending, infant mortality, life expectancy (Links to an external site)Chapter 1Setting the Stage (Part 2)Small groups: The importance of public health practice The analysis of trends in life expectancy in Chapter 1 indicates that mortality in the first part of the twentieth century was due primarily to infectious diseases, inadequate sanitation, and other public health challenges. The Spanish Flu pandemic of 1918-1920 was particularly devastating. Until late 2019, a pandemic of this magnitude had not recurred. Indeed, with the development of vaccines to prevent viral infection and antibiotics to treat bacterial infection, the latter half of the 20th century saw continual improvements in life expectancy, with mortality risk largely related to diseases of later life such as heart disease, cancer and neurologic disease. Chapter 1 recounts the extraordinary biomedical and biotechnical advances that have led to effective clinical treatents for diseases that were, heretofore, incurable. And yet, after this book was completed, and during the time that this discussion guide was written, a global pandemic arose that is analogous to the Spanish flu. The current pandemic is caused by the SARS Co-V-2 virus, which causes “Coronavirus-19 disease” or COVID-19. Despite modern science and technology, the lack of consistent messaging and uniform public health practice in the U.S. at the outset led to an inability to control the pandemic, resulting in illness and mortality rates that have been among the highest in the world. To understand this phenomenon, it is worthwhile to explore the parallels between the 1918 Spanish flu pandemic and the COVID-19 pandemic, and consider the implications of COVID-19 in the context of the current U.S. health care industry. Students should search the literature to address the following questions:The science that allows testing for the presence of the virus in people was not available (or even imagined) in 1918. Such technology is readily available today.What diagnostic methods can be used to test for the SARS Co-V-2 virus?Why is testing so important in controlling the spread of infection, and what is the impact of varying test sensitivities and turn-around times for results?What factors were responsible for the difficulty that initially arose (and persisted for many months) in accessing tests for the coronavirus and the long turn-around times for results? Could anything could have been done to enhance access and reduce turn-around times?Effective treatments for SARS-type viruses were investigated in the mid-2000s, in response to the SARS epidemic at that time. Search the literature for information on potential drugs to treat COVID-19. How could such treatments best be deployed once they are shown to be safe and effective?Prior to the availability of a safe and effective vaccine against a novel virus, what public health initiatives should nations ideally take at the onset of a viral pandemic to minimize the rate of infection and mortality? How has the U.S. measured up against the ideal response?Beyond public health considerations, discuss the COVID-19 pandemic from the standpoint of other considerations – e.g., economics, politics, history, culture, etc.Chapter 2Perfect Competition and its Applicabiity To Health CareBased on your reading of Chapter 2, please think through the following questions and be prepared to express your views about them in class:An idea that is often expressed regarding the exchange of goods and services in a market-based economy is as follows: “If the free market is allowed to function without impediment, the ‘invisible hand’ of competitive forces will result in an optimal allocation of resources.” What is meant by this idea?The original concept of the ‘invisible hand” in market economies was developed by Adam Smith, a Scottish economist, in his 1776 book entitled Wealth of Nations. Imagine the world of 1776 Scotland (and Western Europe). What characteristics of the market for goods and services would have aptly applied to a well-functioning free market economy at that time?What developments (technology or otherwise) have occurred since 1776 that have impacted the free market for goods and services? Discuss an example of a good or services outside of health care that has flourished under a free market, and discuss an example in which untoward results from the free market has required regulation?Thinking about the characteristics of health care goods and services, which of the assumptions of perfect competion listed in Chapter 2 are a good fit for health care, and which do not apply very well?As discussed in Chapter 2, if all the assumptions of perfect competition apply, Vilfredo Pareto showed in 1906 that society will function with an optimal allocation of resources in the sense that nobody can be made better off without making someone else worse off.Are there circumstances in which society will choose to be suboptimal in the allocation of resources defined in this way – meaning that it is acceptable for some people to be made worse so that others can be made better off? What are some examples?Is health care an example of this type of societal choice? What are some ways in which this has already been accomplished in the U.S., and where (in your opinion) might there still be opportunity?To a large extent, the debate about health care (access, amount of benefit coverage, free care vs. cost-share, etc.) is a debate about the degree to which the U.S. population is willing to depart from Pareto optimum conditions for the good of the society as a whole (i.e., transfer wealth to provide equitable health care). What cultural characteristics of the U.S. population might be different from Western European, Scandinavian or Asian cultures in ways that influence U.S. decisions about health care in comparison with these other nations?As discussed in Chapter 2, a market-based economy allocates goods and services according to prices that are determined by the intersection of suppy and demand curves.For individuals with commercial health insurance (or for those with Medicare or Medicaid), how is the price they pay for a doctor visit, lab test or surgical procedure different from the price that they would pay if there were no health insurance, Medicare or Medicaid?For health care providers, hospitals and pharmaceutical companies, how is the price they are paid for their services and products different from the price they would receive if there were no health insurance, Medicare or Medicaid?Some health care services are generally not covered by health insurance. In vitro fertilization was used as an example in Chapter 2, but other examples would be Lasik refractive sugery or aesthetic plastic surgery. Prices for these health care services resemble more closely the prices produced by a competitive market than, say, the price of cancer treatment. Patients with cancer generally pay only a small fraction of total charges, generally consisiting of their co-pays and/or deductibles. Most people would accept this as an acceptable redistribution of societal resources, but where do you draw the line? Should a drug that extends the life of a cancer patient by 1 month but costs $1,000,000 be fully covered by health insurance or Medicare/Medicaid (i.e., taxpayers)? How about a drug that costs $50,000 and extends life by 3 years? What would be your recommended threshold for the cost of a drug treatment per life-year gained that should be covered by Medicare, Medicaid and private health insurance? What about a hip replacement for someone with mild pain and minimal problems with mobilily? How much pain is enough to justify the expense of hip surgery and hospitalization? How can this be measured? What are some other examples of trade-offs?Chapter 3 and 4Imperfections in the Market for Health Care Servicesand the Role of Price SubsidiesBased on your reading of Chapters 3 and 4, please think through the following questions and be prepared to express your views about them in class:Health care departs from many of the assumptions underlying perfect competition in ways that are discussed in Chapter 3. What other goods or services share some of these deviations from the assumptions? How are they alike and how are they different from health care? Give an example in which the presence of many buyers and sellers of a relatively homogeneous good or service in the U.S. economy leads to the operation of a market in which price is determined by the intersection of suppy and demand. Now consider a test such as a screening colonoscopy for cancer or a treatment such as a hernia repair for a mildly symptomatic groin heria. How does health insurance change the market dynamics?What is the general concept of “moral hazard” and how is it applied to health care?Enrollees in traditional Medicare are currently responsible for a co-pay of 20% for most physicians’ services. Under “Medicare for All,” the co-pay is eliminated. Based on data from the literature discussed in Chapter 4, what are the implications of eliminating the co-pay for national health care utilization and expenditures? Can you provide a quantitative estimate of the effect?Figure 4.2 shows a continuum of health care benefits that can be covered by a health plan, whether commercial or national. Where do your views fall on this continuum and why? Give some examples of medical conditions that, in your opinion, should (a) be available to all U.S. residents, and (b) not be covered at all. Are there some treatments for particular medical conditions about which you’re not sure if they should be covered? For these, is there a middle ground of less generous coverage that would be acceptable to you?Chapter 5Imperfections in the Market for Health Care Services and the Role of Induced DemandSmall Groups: Analyzing Geographic VariationTo prepare for this small-group session, please read Chapter 5 of the textbook and familiarize yourself with the Dartmouth Atlas website, which provides information on many aspects of geographic variation in health care, mainly using Medicare databases. Instructions for use of this website are provided below.The 1973 article in Science by Wennberg is in your readings below for historical interest. This was the paper that launched the idea of the Dartmouth Atlas, which focuses on documenting geographic variation and the potential reasons for such variation. The Dartmouth Atlas Project Topic Brief entitled “Supply-Sensitive Care” will provide a summary of their perspective. The article by Atul Gawande in the June 1, 2009 issue of New Yorker magazine is a classic, highly-cited narrative comparing practice in two Texas towns. Gawande concludes that much of their difference in health care utilization and cost is due to provider-induced demand. In contrast to the other articles in the reference list below, which are data-based and statistically analytic, the article by Gawande is journalistic in style; it is beautifully written and powerful in its message. The papers by Finklestein and Reschovsky are two excellent examples of careful work from the economics and health services literature that contest the primacy of provider-induced demand in explaining geographic variation. Those of you who don’t have a background in economics and statistics might not be able to work through all the details, but you are encouraged to read the sections of these papers that summarize their overall conclusions. Please note that the main findings of these papers (and others that try to parse the different reasons for geographic variation in health care) are summarized in Chapter 5.Instructions for Small Group SessionHere are three specific tasks to be addressed in small-groups.A. Using the Dartmouth Atlas, document geographic variation in health care utilization and expenditure (by Hospital Referral Region or “HRR”) by creating maps and stating the range of values for:Reimbursements to providers, hospitals, nursing homes, etc.Total Medicare reimbursements per enrolleePhysician reimbursement per enrolleeMeasures of “Quality/Effective Care”:Percent of diabetic enrollees receiving HbA1C testingPercent of female enrollees age 67-69 having at least one mammogram every 2 yearsRates of selected surgical procedures/dischargesCoronary artery sugery/1,000 enrolleesCoronary angiography/1,000 enrolleesBack surgery/1,000 enrolleesHip fracture/1,000 enrollees B. Using the Dartmouth Atlas, create an Excel file on the rate of hip replacement procedures per 1,000 enrollees by state from 1992 – 2015. Compute the mean and standard deviation across states for the single years 1992 and 2015, and find the ranges in values for these two years.C. From your reading of Chapter 5 and the assigned articles:What are the main potential reasons for variation in health care utilization and expenditure across geographic areas?What is meant by the distinction between “supply-side” and “demand-side” factors?Recognizing that the data are murky, what are your overall conclusions about the relative contribution of the major factors responsible for variation?Use of the Dartmouth AtlasOnce you are on the Dartmouth Atlas site:For task A click on “Data” and then “Interactive Apps.” You will see drop-down menus for #1-3 above. For task B, under “Data,” click on “Atlas Data Website,” and then “Choose Data.” Under “Topic” choose, “Surgical Procedures;” under “Measure” choose “Inpatient hip replacement;” under “Start year” choose 1992; under “End year” choose 2015; under “Output” choose Excel file. ReferencesFinkelstein, Amy, Matthew Gentzkow, and Heidi Williams. 2016. "Sources of Geographic Variation in Health Care: Evidence from Patient Migration.” National Bureau of Economic Research Working Paper. December, 2014. . Gawande, Atul. “The Cost Conundrum: What a Texas town can teach us about health care,” The New Yorker, June 1, 2009. Reschovsky, James D., Jack Hadley, and Patrick S. Romano. 2013. "Geographic Variation in Fee-For-Service Medicare Beneficiaries’ Medical Costs Is Largely Explained by Disease Burden.” Medical Care Research and Review 70 (5): 542-563. doi:10.1177/1077558713487771. Wennberg, John, and Alan Gittelsohn. 1973. "Small Area Variations in Health Care Delivery." Science 182 (4117): 1102-1108. doi:10.1126/science.182.4117.1102.Chapter 6The Relative Importance of Utilization and Pricein U.S. Health Care SpendingChapter 6 begins with the fundamental assertion that spending on health care per person equals health care utilization per person times price. For a particular medical service or test, like a CT scan, total spending on CT scans equals the number of scans done per capita times the average price per scan. For health care spending across all health care goods and services, we need some overall measure of utilization per capita (across all goods and services) and an average price.The statement that expenditures equals utilization times price is straightforward: If you know utilization and price, spending can be calculated. If you know spending and price, utilization can be inferred.Knowing that spending per capita in the U.S. has increased dramatically in recent decades and is also much higher than in other high-income countries, Chapter 6 analyzes the literature that tries to understand the reasons for these trends.Prior to reading the chapter, if you were asked whether growth in health care spending in the U.S. was mainly due to greater use or higher prices, what would you have guessed and why? Having read the chapter, what does the literature show about the relative importance of utilization and price in explaining the growth in health care spending in the U.S. and why is spending higher in the U.S. than in other countries?Given this information, suggest three policy options would you suggest to constrain the growth in spending on health care in the U.S.? (Hint: think about the drivers of utilization and price separately, and policies that could favorably impact each driver.) Some policy options that reduce utilization or price might impact the quality of care. Discuss your three policy options from the standpoint of a potential trade-off between cost and quality. Do any of your suggested policies reduce spending and improve the quality of care at the same time?Chapter 7Inequality of Health, Wealth and Access to CareIt is recognized that in a market economy there will be some level of inequality in income and wealth. Western societies with market-based economies differ, however, in the expectation about how much re-distribution of income and wealth is appropriate to provide a societal safety net, and the generosity of that safety net. What is an example of a policy decisions in the U.S. that produced aspects of a safety net by redistributing income? Do you agree or disagree that it is appropriate to redistribute income for the purpose of that example? Are there any examples of income redistribution for building a safety net in the U.S. with which you disagree?In Chapter 7, a study is reviewed in which it was reported that surveyed individuals thought the ideal wealth distribution would be one in which people in the upper 20th percentile of wealth held 30 percent of the total wealth in the U.S. In reality, people in the upper 20th percentile hold about 85 percent of wealth. What would your ideal distribution of wealth look like, and why?If you were asked to give a concise but clear explanation of the Gini coefficient in 3-4 sentences, what would you say? How would you explain its importance as a summary measure of inequality?It is sometimes postulated that income inequality is the price we pay for a well-functioning market economy that produces a high level of GDP per capita. Table 7.2 compares income inequality for the U.S. and ten other high-income countries. The U.S. is the most unequal, and Sweeden and Denmark are the most equal. Any yet, Sweeden and Denmark have about the same GDP per capita as the U.S. Is this surprising to you? How can you explain these findings?Figure 7.2 compares the wealth held by the upper 0.1% in the U.S. with that held by the bottom 90% for the century between 1913 and 2012. Describe the changes in these curve across time in relation to historical events. Can these data provide any potential insights into the relationship between cultural and political instability and the distribution of wealth across time?How might income inquality be associated with disparate health outcomes, independent of differences in access to health care?From the information in Chapter 7 about inequality of access to health care, which aspects of unequal access are the most salient in your opinion in terms of impact on health status, and why?How has the COVID-19 pandemic affected income inequality and health disparities?Chapters 8 and 9Historical Underpinnings of U.S. Health CareIndustry and Emergence of Health InsuranceBased on your reading of Chapters 8 and 9, please think through the following questions and be prepared to express your views about them in class:What roles did the emergence of biomedical science and effective clinical treatments play in the development of the U.S. health care industry during the first half of the twentieth century?How did the changes in medical education resulting from the Flexner Report influence the subsequent evolution of U.S. health care?Which key stakeholders in the U.S. health care industry emerged during the first half of the 20th century, and what were their main interests?What are the general principles underlying health insurance? Discuss the behavioral basis for risk avoidance among potential customers, the spreading of risk across a population, and the estimation of risk vs. liability. Imagine that you are running an insurance company. How would you calculate the insurance premium for customers? (Think about the demographic characteristics of your potential members, the effects of including/excluding specified risks, and the effects of deductibles and co-pays.) How did health insurance first emerge in the early part of the 20th century, and how did it evolve through the introduction of Medicare and Medicaid in 1965? What historical factors and policy actions facilitated the growth of health insurance?What are the similarities and differences between modern-day private health insurance and other types of insurance such as car insurance, homeowner’s insurance and life insurance?How has the COVID-19 pandemic affected the percentage of the U.S. population with health insurance? Discuss the potential impact on health status, considering potential barriers to care for both COVID-19 and other medical conditions.Chapters 8 and 9Understanding How Health Insurance Policies WorkSmall groups: Designing a health insurance policyYou are assuming the position of Benefit Design Manager for a new self-insurance plan for “LocalTech”, a growing company of 100 employees. LocalTech had been contracting with “StateBlue” to provide comprehensive health insurance coverage for employees. There are 50 employees with a family plan costing $14,000 per year, and 50 employees with a single coverage plan costing $9,000 per year. The premiums in both plans are divided 50:50 between employer and employee. The current benefit design is as shown below. Next year, however, LocalTech will self-insure against employee health care costs, using a third-party administrator. ?StateBlue reported 15% overhead administrative expenses and 3% profit. Because of increased costs due to actuarially determined estimates of projected medical claims, they were planning to raise premiums by 5% next year. LocalTech had budgeted for this increased premium expense and will now create a benefit design for its new self-insurance plan using this increased budget. Given this information, please answer the following questions:If the projections are correct and the cost of claims increase by 5%, and if administrative costs with the third party administrator are the same as with StateBlue, how much money would LocalTech save by self-insuring?In addition, LocalTech is interested in exploring opportunities to reduce administrative expenses. Describe two initiatives that might be taken to accomplish this.LocalTech is also interested in improving the health of their employees without adding any premium expense. Provide two suggestions for changing the benefit design in a manner that would achieve this goal along with your rationale for change. Make one suggestion for how care processes could reduce utilization without compromising quality. In the first year, prior insurer profits of 3% were retained by LocalTech, administrative costs were reduced by 3% (from 15% to 12%), and paid medical claims were reduced by 3% (from 82% to 79%). How much money did LocalTech save on their employee health insurance expense during the first year?Insurance BasicsWhat does it mean to be self-insured? Being self-insured means that rather than paying an insurance company to process and manage transactions for medical, dental and vision claims, and to pay those claims, the company pays the claims themselves, using a third-party administrator to process the claims on their behalf. Rather than sending money to an insurance company, the money stays in the company’s budget where full control is retained. The insurance coverage itself may not change, but rather the method used to pay for claims changes. There are two main costs that must be considered with a self-funded health plan: overheard and medical claims costs. Overhead costs include administrative fees and any other set of fees charged per employee. Normally, these costs are billed monthly by the health plan and are based on plan enrollment. The medical claims costs are simply payments for health care claims. These costs vary from month to month based on health care utilization by covered employees and dependents. What are the primary reasons for transitioning from commercial health insurance to a self-insured program? The advantages of being self-insured are to save the dollars that would have gone to insurer profit, reduce administrative overhead expenses paid to the insurer and manage employee health care in a manner that would enhance health status while reducing utilization of high-cost diagnostic and treatment services. On average, approximately 17-20 cents of every dollar paid to a health insurance company goes to administration, overhead and profit - although the ACA aimed to limit this to 15 cents on the dollar. A self-insured plan is eligible to create a benefit design consistent with the ACA’s essential health benefits and other requirements. That is now your job as Benefit Design Manager.Self-insurance gives a company the opportunity to control adminisatrative costs. These are usually opaque in the case of commercial insurance, but explicitly contracted for a specified amount with a third-party administrator in the case of self-insurance. Administrtive costs with the third party administrator are often substantially less than such costs under commercial insurance.Self-insurance also gives a company more control in terms of benefit design than private insurance. Instead of having to go along with what an insurance company determines is important for a health plan, the employer can make those decisions: What is covered and what is not covered? Which services have high co-pays and which have low or no co-pays? What should be the deductible and should it vary with employee earnings? Should there be a sub-plan with a narrow network of seleted physicians and hospitals that carries a lower premium than a plan with full choice of any physician or hospital? This flexibility in benefit design is particularly advantageous when looking at what might be unique about a company’s group of employees. Additionally, the employer has easy access to insurance claims, which allows it to tailor the benefit design to the health needs of its employees.Benefit Design ExplainedAlmost all benefit designs leverage cost-sharing, meaning that a portion of the financial responsibility for care is shifted onto consumers. That is, consumers pay a portion of the cost of covered benefits out-of-pocket at the point of service. These out-of-pocket costs are shaped by co-payments, co-insurance, deductibles, and out-of-pocket maximums. The higher the out-of-pocket cost to the consumer, the lower the total premium and vice versa. Therefore, cost-sharing also can be used to control premium inflation. In theory, cost-sharing can influence consumer behavior, assuming consumers possess adequate information to distinguish between high- and low-value care (i.e., services for which there is strong evidence of significant benefit, and services that lack such evidence, or for which there is evidence of no benefit). To help consumers distinguish between high- and low-value care, low cost-sharing is generally tied to low-cost/high-value services (i.e. preventive care services and screenings) and high cost-sharing is tied to high-cost and low- value services (i.e. unnecessary diagnostic testing or imaging). Benefit Design ExamplesPlan 1. Premium Plan – Higher deductible with out-of-network benefitsIncludes access number of wellness opportunities, as well as resources and programs for health topics such as diabetes, tobacco, pregnancy, back pain, nutrition, weight management, and health coaching. Medical Benefits Medical Benefits are administered by Florida Blue Network Tier 1 Florida Blue BlueOptions1 Tier 2 Out-of-Network2 Tier 3 Calendar Year Deductible (CYD)The CYD met for Tier 2 will also accumulate to Tier 1, and the CYD met for Tier 3 will also accumulate to Tier 1 and Tier 2. Individual Deductible $500 $1,500 $3,000 Family Deductible $1000 $3,000 $6,000 Out-of-Pocket Maximum (OOP)Includes Medical CYD, Coinsurance, Copays, Per-Admission Deductibles, Per-Visit Deductibles, and Pharmacy CYD & Coinsurance/Copays. The OOP Maximum values cross accumulate between all tiers. Individual Maximum $2,600 $6,850 $10,000 Family Maximum $5,200 $13,700 $20,000 Coinsurance Coinsurance (plan pays after CYD has been satisfied) 90% 80% 60% Coinsurance (member pays after CYD has been satisfied) 10% 20% 40% Lifetime Maximum Lifetime Maximum Unlimited Physician Office Services Primary Office Visit $20 copay 20% after CYD 40% after CYD Specialist Office Visit $35 copay 20% after CYD 40% after CYD Urgent Care Center $50 copay 20% after CYD 40% after CYD Wellness and Preventive Care (Annual Physical and Related Labs) Primary Office Visit $0 copay $0 copay 40% after CYD Specialist Office Visit $0 copay $0 copay 40% after CYD Hospital Services (Pre-certification required for Inpatient Admissions) Per-Admission Deductible $0 $1,500 $1,500 Inpatient Services 10% after CYD 20% after CYD 40% after CYD Outpatient Services 10% after CYD 20% after CYD 40% after CYD Emergency Care Per-Visit Deductible $150 Per-Visit Deductible; Waived if Admitted $250 Per-Visit Deductible; Waived if Admitted Emergency Room Services 10% after CYD 10% after CYD 10% after CYD Network Tier 1 Florida Blue1 BlueOptions Tier 2 Out-of-Network2 Tier 3 Other Services Skilled Nursing Facility 10% after CYD 20% after CYD 40% after CYD 60-Day Limit Per Benefit Period3 Home Health Care 10% 20% after CYD 40% after CYD 30-Visit Limit Per Benefit Period3 Hospice Facility 10% after CYD 20% after CYD 40% after CYD Outpatient Therapies in Physician Office (Occupational, Physical, Speech, & Cardiac) $35 copay 20% after CYD 40% after CYD Outpatient Therapies Facility 10% 20% after CYD 40% after CYD Therapy maximum is inclusive of Chiropractic Services Combined Therapy 75-Visit Limit Per Benefit Period3 Chiropractic Services $35 copay $35 copay 40% after CYD Chiropractic limit is included in overall Therapy maximum Chiropractic 26-Visit Limit Per Benefit Period3 Ambulance 2 20% after Tier 1 CYD Durable Medical Equipment (Authorization required) 20% after CYD 20% after Tier 1 CYD 40% after CYD Outpatient Diagnostic Lab and X-Ray 10% 20% after CYD 40% after CYD Pharmacy Benefits $100 per Member Pharmacy (Rx) CYD must be satisfied for Rx Tiers 2 – 5, with a deductible cap of $400 per Family; Rx CYD does not apply to Rx Tier 1 medications.Member pays the first $100 for medications in Tiers 2-5, then co-insurance benefits apply. Rx deductible does not apply to Medical CYD, but counts towards Medical Maximum OOP.Member pays the brand copay plus the difference in cost between the brand and generic if brand product is chosen when a generic equivalent is available. Prescriptions – up to Retail 34-day supply: Tier 1: Generic 25% coinsurance with $10 minimum to $20 maximum (no Rx CYD applies) Tier 2: Preferred Brands 25% coinsurance with $25 minimum to $50 maximum after Rx CYD Tier 3: Preferred Specialty 25% coinsurance with $50 minimum to $100 maximum after Rx CYD Tier 4: Non-Preferred Brands 40% coinsurance with $70 minimum to $240 maximum after Rx CYD Tier 5: Non-Preferred Specialty 40% coinsurance with $70 minimum to $240 maximum after Rx CYD Prescriptions – 90-day supply retail and mail order4 Tier 1: Generic 25% coinsurance with $25 minimum to $50 maximum (no Rx CYD) Tier 2: Preferred Brands 25% coinsurance with $62.50 minimum to $125 maximum after Rx CYD Tier 3: Preferred Specialty N/A Tier 4: Non-Preferred Brands 40% coinsurance with $175 minimum to $600 maximum after Rx CYD Tier 5: Non-Preferred Specialty N/A Glossary of Insurance-Related TermsAllowed Amount: The maximum amount on which payment is based for a covered health service. May also be called “negotiated rate”. If the provider chargers more than the allowed amount, the insured individual is responsible for paying the difference aka. Balance Billing. Deductible: The amount of money you are required to pay for health care services before the health insurance company/plan begins to pay. For example, if you have a health plan with a $1,000 deductible, you are required to pay all bills up to $1,000. Once you have paid $1,000 out of your pocket, the health plan will begin to pay towards covered services. Balance Billing: When a health care provider bills you for the difference between the provider’s change and the allowed amount. For example, if the provider’s charge is $200 and the allowed amount is $70, the provider will bill for the remaining $130. Benefits: The health care items or services covered by an insurance plan. Sometimes referred to as a ‘benefit package’.Claim: An itemized bill for health care services provided to a member. Coinsurance: The share of a covered service that you must pay, calculated as a percentage of the allowed amount for the service. A plan may be structured where co-insurance is paid after you have meet your deductible amount. For example, if an office visit to a specialist provider is $200, you will pay the full $100 unless you have met your plan deductible. If the deductible has been met and the co-insurance amount is 20%, then you will pay $20 for the specialist visit and the plan will cover the remaining 80% or $80.Copay: A fixed amount that you are required to pay for a covered health service, usually due at the time of service. The amount will vary based on the type of service and plan coverage. Example: $15 co-pay for visit to Primary Care provider or $35 co-pay for visit to a specialist provider (dermatology, urology, OBGYN, etc.).Covered Service: A services that is covered according to the terms of the health benefits plan. Dependent: An eligible person, other than the primary member, who has health care benefits under the member’s policy. Usually, dependents include a spouse or child. Formulary: A list of preferred drugs chosen by a team of providers and pharmacists which includes both generic and name brand medications. Explanation of Benefits (EOB): An EOB is generated after a claim payment has been processed by your health plan. The EOB details the actions taken on a claim such as the amount that will be paid, the benefit available, any discounts that may apply, and reasons for denying payments and the claims appeal process, if applicable. Health Savings Account (HSA): With an HSA, you are able to set aside pre-tax dollars to be used to pay for qualified medial expenses. Only certain plans meet the federally-dictated high deductible amounts needed for you to be able to use your HSA. Network: The health care facilities, providers and suppliers that the health insurance company has contracted with to provide health care services to their members. In-Network: Services provided by a provider or hospital with a contractual agreement with the insurance company and paid at a higher benefit level. Out-of-Network: Services you receive are considered out-of-network when the provider rendering them does not have a contract with your health plan. When you go to an out-of-network provider, benefits may not be covered, or may be covered at a lower level. You may be responsible for a portion or all of the bill for the services rendered by the out-of-network provider or hospital. Out-of-Pocket Maximum (OOPM): The most you are required to pay during a policy period (usually one year) before the health plan pays 100%. This OOPM does not include the monthly premium for the health insurance plan or any health care services that the plan does not cover. Some health plans count all co-pays, co-insurance payments, and deductible toward the OOPM (Ex. Exchange Health Plans), some do not. Preauthorization (PA): A decision by your health plan that a health care service, treatment, prescription drug, or durable medical equipment is medically necessary. PAs may also be called prior authorization, prior approval, or precertification. Your health insurance plan may require PA for particular services before you are able to receive them, except in an emergency. Usually, when a PA is submitted, it is reviewed at the health plan by specialist and may include review by nurses and/or physicians working for the plan.Premium: The amount that must be paid for your health insurance plan. You and/or your employer usually pay it monthly, quarterly or yearly. Pharmacy Benefit Manager (PBM): A separate, or third-party, company that handles your health plan’s pharmacy benefit. A PBM processes and pays for your prescription drug claims based on the terms of your pharmacy benefit. Utilization Management (UM): A way for the health plan to review the type and amount of care that is being provided. Usually involves looking at the setting for your care and its medical necessity. Examples include case management, or proper discharge planning. Chapters 10 and 11Medicare and MedicaidChapters 10 and 11 provide an overview of the most important health care legislation in the history of the United States – Medicare and Medicaid, enacted in 1965 as amendments to the Social Security Act of 1935. The questions below ask you to synthesize some of the material in these chapters, and also to do your own research about issues that were introduced in the textbook but not explored in detail.Taking into account the historical evolution of the U.S. health care industry up until 1965, what segments of the population were left out of coverage, and how did Medicare and Medicaid provide coverage for these segments?Compare and contrast Medicare and Medicaid.Medicaid is often seen as an “entitlement” (i.e., taxpayer supported), while Medicare is often seen as an insurance program in which individuals age 65 and older draw from funds that they had paid over their working years through payroll taxes. How is Medicare also an entitlement? Can you quantitate this in terms of the proportion of total Medicare expenditures that represents entitlement?Even through President Kennedy campaigned vigorously for Medicare, he did not have the votes in Congress needed to pass this legislation. How did a change in political circumstances facilitate the passage of Medicare and Medicaid in 1965? Are there any parallels to the current environment for health care reform?Traditional fee-for-service Medicare, federally administered, is now being replaced more and more by Medicare Advantage plans, which are run by private insurance firms. What are the pros and cons of Medicare Advantage? Do you think that growth in Medicare Advantage is a step in the right direction?Medicaid is run as a joint state-federal program, with states being given broad latitude in eligibility, benefits, and administration. This has led to wide variability in the operation of these plans among states and and in the health care provided. What were the historical reasons for designing Medicaid in the way? Do you think the current level of state authority for these plans should remain as is, or should there be greater federal oversight in terms of more uniform benefit coverage and thresholds for eligibility?What single policy reform would you recommend for Medicare? What single reform would you recommend for Medicaid?Chapter 12The Affordable Care Act: Small Groups: ACA Aftermath and impact on the uninsured and underinsuredThe Patient Protection and Affordable Care Act (“ACA” or “Obamacare”) contained a broad spectrum of health care reforms, but most of the focus has been on its provisions for reducing the percentage of individuals in the U.S. who are uninsured. As reviewed in Chapter 12, the two main programs to accomplish this goal were (a) Medicaid expansion for those near the Federal Poverty Line (FPL) but not eligible for Medicaid under the rules of the state in which they resided, and (b) the creation of a health care marketplace where federally subsidized private insurance could be purchased by individuals with incomes up to 400 percent of the Federal Poverty Line. Among other important provisions of the ACA were a set of essential health benefits that all health insurance policies were required to provide, nonexclusion from coverage due to pre-existing conditions, and expansion of coverage of young adults under their parents’ plan until age 26.The current effects of this legislation do not reflect the ACA as written, as many of its provisions were changed or repealed due to judicial or legislative actions. In this small group session, you will first analyze the difference between the promise of the ACA and its current reality. Second, you will review recent data on the status of the uninsured and underinsured. And finally, you will develop a community-based project that would seek to increase enrollment of individuals who are eligigle for Medicaid expansion or the exchanges, but who are not ic 1 – Hopes and dreams of the ACA vs. subsequent realityPick one important provision from each of the two key programs of the ACA’s (Medicaid expansion and marketplace exchanges) that were changed by judicial or legislative action, and discuss the positive and/or negative consequences of these changes. Topic 2 – The uninsured and underinsuredUninsured: A November 2019 Census publication describes characteristics of the uninsured for the years 2017 and 2918. (Use an updated report if available.) In your opinion, what are the most salient findings from Table 1, which shows how the population breaks down in terms of types of insurance coverage. Pick two figures or tables from this publication that you believe are especially informative. For each one, summarize the findings and explain why you think they are important.Underinsured: The Commonwealth Fund has published an analysis of the underinsured. Define “underinsured” with respect to health insurance. Pick two figures or tables from this publication that you believe are especially informative. For each one, summarize the findings and explain why you think they are ic 3 – Eligibile for Medicaid or exchanges, but not enrolledOf the roughly 30 million Americans who don’t have health insurance, about 35 percent are actually eligible for either Medicaid or an ACA marketplace exchange product with a federal subsidy, but have not enrolled. For the community in which you live, research the population size and the fraction who don’t have health insurance. If national data on “proportion eligible but not enrolled” apply, about 35 percent of the people in your community who don’t have health insurance are eligible for either Medicaid or a subsidized ACA exchange plan. For either the Medicaid or ACA exchange population, design a community-based intervention to increase the enrollment of eligible individuals. In constructing this intervention:Define the individuals who constitute the target population.What type of intervention do you recommend and how will you implement it? ?Include ideas about outreach strategies, implementation steps, post-implementation evaluation methods, and any other aspects you believe are pertinent.Which stakeholders should you engage to ensure that the intervention is a success?What barriers might you face in implementing the intervention?Chapter 13Evidence-Based PracticeSmall Groups: Levels of Evidence in the Medical LiteratureIn the evaluation and treatment of disease, many aspects of etiology, diagnosis and treatment are straightforward and non-controversial. For example, tobacco smoke causes lung cancer; an inflamed appendix can be surgically excised; strep throat can be effectively treated with penicillin. But for a wide variety of medical condisions, there is a great deal of ambiguity regarding the best diagnostic methods and treatments. Common sense would dictate that health care professionals should counsel patients regarding their behavioral management of chronic conditions based on well-understood risk factors, that they should provide services that are known to be effective, and withhold services that are ineffective. The balance of care, cost and access would be improved if we focused on treatments that work and on the mitigation of risk factors that are known to cause or worsen disease. This balance would also be improved if we did not waste resources on things that don’t work. But how do we know? Our confidence about any medical intervention depends on the level of evidence that supports it. This small group session addresses research designs that produce hierarchical levels of evidence. An introduction to this topic is covered in the first section of Chapter 13 (“Evidence-Based Practice”). Additional readings are provided below. For some questions, you may have to search for additional information beyond the links ic 1A. Observational Studies: Two common epidemiologic designs that are used to link an “exposure” (environmental agent, behavior, medication, etc.) to a health outcome are case-control studies and cohort studies. These research designs have been used to estimate the strength of an association between risk factors and disease, e.g., sun exposure and skin cancer, obesity and diabetes, pesticides and Parkinson’s disease, and many others. In topic 1A, your small group is asked to prepare a presentation that includes the following information:In words and pictorially, describe case-control and cohort studies.Summarize their main similarities and differences. Which design might be stronger in pointing to a potential causal relationship between exposure and outcomeFor case-control studies, list some of the difficulties in finding/recruiting control subjects, especially matched controls.For retrospective cohort studies, what kinds of data bases are available that would contain information on both exposures and outcomes? (Look up Nurses Health Study. Find another example.)Relative risk and odds ratios are used to estimate the association between an exposure and an outcome. Define these two measures. Which study design is better suited to estimating relative risk? B. Randomized control trial (RCT): In topic 1B, your small group is asked to prepare a presentation that includes the following information:In words and pictorially, describe the design of a randomized controlled trial.What is the singular strength of RCTs that gives it a stronger level of evidence than case-control and cohort studies?Why might it be difficult to recruit patients to a randomized trial?Define “equipoise” and why it is required for those who recruit research participants to randomized trials?What is meant by “intent to treat” and why is it an important approach to the analysis of RCT data?What role is played by a “Data Safety Monitoring Board?” In this context, what is a “stopping rule” and how is it employed? 2Many studies have attempted to assess whether the consumption of red wine protects against heart disease, and periodically there are news reports on such studies. Resveratrol might be a key ingredient in red wine that promotes heart health. Some studies have found that resveratrol improves the lipid profile, helps prevent damage to blood vessels, reduces inflammation and prevents blood clots. But whether this translates to reduction of heart disease and mortality is unclear, as the literature contains mixed findings.Suppose that NIH is partnering with a major wine producer to address this issue using either case control or cohort studies. It was determined by NIH that a randomized control trip would not be realistic to address this question (Why might this be – what would be the major challenges of such an RCT?) You are an investigator planning to respond to the NIH Request for Application, and want to be ready with both case-control and cohort study designs.The goal is to compare red wine, white wine and beer with regards to protection against heart disease. For each design, prepare three slides as follows:Write a specific aim in words suitable for that design.Show a pictoral representation of the research design.What are the key risk-factor variables and outcome variables? What confounding varibles should be measured?How would you obtain/create a data base that would contain all the needed data?Who would be your research participants? (What are the key inclusion and exclusion criteria for research participants and their desired demographic characteristics?)(Extra credit): How much of a difference in outcomes between groups would be needed to be clinically significant, and how many subjects would be needed in each design to demonstrate that such a difference is statistically significance with 80 percent power?Chapter 14Cost-Benefit, Cost-Effectiveness and Cost-Utility AnalysisSmall Groups: Analysis of journal articles and national strategies Topic 1: You will find two articles on cost-effectiveness analysis?here?and?here.?One of these papers analyzes data on the treatment of Hepatitis C virus with sofosbuvir and ledipasvir (Harvoni), and the other focuses on the use of CT scanning as a screen for lung cancer in high-risk individuals.State the main goal of each study in one sentence. Explain the rationale for this goal and summarize the overall conclusions of each study in light of the stated goals. Both studies compute ICERs (incremental cost-effectiveness ratios) and compare the results to different thresholds of the value of a quality-adjusted life year (QALY). Both use the “willingness-to-pay” method to estimate the value of a QALY. How is the value of a QALY estimated using the willingness-to-pay method, and what are two weaknesses of this method? State and explain the basis for your opinion on the following question (or describe a divergence of opinion among group members): Should a QALY dollar value be used as a threshold for making decisions about whether a treatment should or should not be covered by government programs or private insurance?Topic 2: National strategiesIn the U.K., the National Institute for Health and Care Excellence (NICE, ) uses cost-effectiveness analysis (CEA) to provide formal guidance about the coverage of medical treatments for patients in the National Health Service as well as advice to patients with particular conditions. From the home page of the NICE website, click on “conditions and diseases,” and then pick a condition in which formal guidance was given for a particular drug or other treatment. Summarize the NICE analysis (one slide) and list its main strengths as well as any perceived weaknesses. (one slide) In the U.S. an organization called “ICER” (Institute for Clinical and Economic Review) has developed (). How is ICER similar to NICE and how is it different? (one slide)In the U.S, it has been difficult to pass any type of legislation that would govern the use of comparative-effectiveness and (especially) cost-effectiveness research. Attached is a paper by Gerber and Patashnik on the politics of comparative-effectiveness research (CER), written in 2010. (An update of this work was published by these authors?here.)Also pertinent is an article by Tom Allen, who represented Maine in the House of Representatives from 1997-2009: Summarize, in one sentence each, three political barriers that have prevented CER and CEA from being codified and supported through legislation.In the absence of political barriers, if you could wave your magic wand and write ideal legislation that would support the use of CER and CEA by Medicare and Medicaid in its coverage decisions, what would be three key provisions of your bill?Chapter 15Health Care Law Small Groups: Case StudiesIn this exercise, you will analyze specific legal cases to evaluate the impact of major healthcare laws. You are being asked to construct and present convincing and logical arguments in response to real-world law suits involving major healthcare laws. Topic 1: Facts in the following Qui Tam (“whistleblower”) case, as summarized in a September, 2019 news report from the Associated Press, should be reviewed against the policy and legal considerations that led to the kickback, qui tam and false claims laws reviewed in Chapter 14. Your assignment is to make a case either in favor of or against the merits of what the plaintiff alleges in the lawsuit regarding violations of these laws.Judge “partially” unseals whistleblower lawsuit seeking ‘billions’ from Covenant in alleged healthcare schemeBy?Amber Stegall?|?September 24, 2019 at 5:00 PM CDT - Updated September 25 at 6:40 AMLUBBOCK, Texas (KCBD) - A whistleblower suit in federal court filed by Dr. Howard Beck against St. Joseph Health System, Covenant Health System and its subsidiaries, alleges Medicare fraud and seeks to recover damages for the government that could amount to billions of dollars.The suit alleges that since at least 2010, Covenant entities engaged in a scheme involving false records, fraudulent claims and unlawful kickbacks to Covenant physicians for making referrals for services exclusively to Covenant groups.The suit was filed September 30, 2016, but remained under seal in federal court until it was unsealed Tuesday so that it “could proceed.” Plaintiffs are seeking triple damages for the fraud they say incurred. The defendants in the suit are St. Joseph Health System, Covenant Health System, Covenant Medical Center and Covenant Medical Group.According to the details of the suit, Dr. Howard Beck, listed as “relator,” is bringing the suit on behalf of the United States Government. Beck was the Chief of Staff of St. Mary’s Hospital at the time of the 1998 merger of the system with St. Joseph and was, at the time the suit was filed, employed by Covenant Medical Center and is paid by St. Joseph’s.Federal whistleblower laws protect whistleblowers in government jobs and some public companies and private contractors for the government.More reported detail in the alleged scheme itself can be found in the following link . Senior Judge Sam Cummings has unsealed a 2016 whistleblower lawsuit against three Covenant entities and its parent system, claiming a "closed loop" kickback scheme coerced physicians to refer admissions and medical services exclusively to Covenant services, in violation of federal and Texas law.Court records indicate Dr. Howard Beck was a high-level employee at Covenant when the Department of Justice filed the lawsuit in September 2016, and had been there since Covenant Health's induction in 1998. The lawsuit indicates Beck brought his personal knowledge to the U.S. Attorney in Central California -- where St. Joseph's Health, Covenant's parent when the suit was filed, was headquartered -- for the office to pursue.Beck told the government that Covenant Medical Group used excessive compensation to convince doctors to refer exclusively to Covenant services in order to generate a significant revenue stream for Covenant Health -- that, in turn, transfers millions of dollars to the Covenant Medical Group to maintain the inflated salaries. A statement from Dr. Beck's attorney states the suit seeks to recover "billions of dollars of improper Medicare and Medicaid claims paid by the government".Citing tax year 2013, the lawsuit?claims 15 out of Covenant Medical Group's 23 physicians were paid in excess of $100,000 more than the 90th percentile of an American Medical Group Association survey. The lawsuit cites one interventional cardiologist was paid $2,028,112 in 2013, while the 90th percentile of AMGA interventional cardiologists were paid $757,294. The lawsuit calls this "commercially unreasonable."The lawsuit claims those "exorbitant salaries" induce cardiologists to refer diagnostics, pacemaker placement, angioplasty, stents, and intense surgeries exclusively to Covenant doctors; those costly procedures are then reimbursed by insurers -- including Medicare and Medicaid -- at desirable rates, forming a key source of revenue for Covenant Health and its parent company when the suit was filed,?St. Joseph Health. The parent company is now Providence St. Joseph Health.The salaries, the lawsuit claims, forced the Covenant Medical Group to operate at a loss for years, but realize substantial gains from hospital admissions and those ancillary service referrals. This table was in the lawsuit's body.Tax YearRevenue Less Expenses2009?$-22,318,2392010?$-20,621,6532011?$-25,204,3562012?$-23,996,8812013?$-23,241,248Furthermore, the lawsuit claims that Covenant Health -- a separate entity than the Medical Group -- reported a net income of $62,070,236 in 2013, as well as $35,748,437 in 2012.The lawsuit?claims Covenant Health, Covenant Medical Center, and St. Joseph's Health compensate for the massive losses at CMG, allowing CMG to continue paying out the hefty salaries while referring patients into the "closed loop" system.The lawsuit claims?all?the referrals made from Covenant Medical Group physicians to the Covenant Medical Center are illegal kickbacks, because Covenant Health keeps the Medical Group afloat to continue referrals; non-compliance with the federal anti-kickback statutes violates participation in federal health insurance programs (Medicare, Medicaid), and constitutes fraud.?The lawsuit claims Covenant continued to bill the government for self-interested referrals from its extensive network of 250 physicians.At attorney for Dr. Beck, Gaines West, said in a statement the suit was on file for several years but was only unsealed today so that it could proceed. West promised "vigorous prosecution of these claims for the benefit of the federal government and all taxpayers".The U.S. government, as the plaintiff, asks the federal court to order St. Joseph's Health (California), Covenant Health, Covenant Medical Group, and Covenant Medical Center, to pay three times the amount of damages the federal government and Texas have sustained, plus civil penalties; as well as place a permanent injunction on the defendants from such unfair competitive acts.The U.S. Attorney for Lubbock's region declined to intervene in the lawsuit, but will allow Dr. Howard Beck to continue with the U.S. government as a plaintiff. Covenant Health System issued the following statement on September 24, 2019: Covenant Health System was contacted by the U.S. Department of Justice ("DOJ") in 2017 seeking information concerning whether it paid employed physicians compensation about fair market value. Covenant cooperated fully with the DOJ and provided information concerning the basis for the compensation paid to its physicians. Importantly, after reviewing all the information provided by Covenant, DOJ declined to intervene in this lawsuit. The allegations in Dr. Beck's civil False Claims Act lawsuit apparently prompted the government's inquiry. Covenant Health System has not yet been served or had adequate time to review each of the allegations. Therefore, we cannot comment other than to say that Covenant follows rigorous standards for Medicare and Medicaid reimbursement claims, based on all relevant regulation and supported by our core values. Because the lawsuit is pending, we are not in a position to comment any ic 2: The following HIPAA /Privacy case should be reviewed against the policy considerations and legal requirements that led to the creation of the HIPAA laws. Your assignment is to make arguments either in favor of or against the merits of what the plaintiff alleged in the lawsuit (or for or against the final outcome of the case) regarding violations of these laws, and assess the appropriateness of the amount of the settlement in relation to the harm done.UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION Case No. 15-MD-02617-LHK (N.D. Cal. Aug. 17, 2018)Read original complaint here- . The following facts and history are pertinent to this case: Case Background: In February 2015, Anthem reported that it had incurred a massive data breach that compromised the Personally Identifiable Information (PII) and Personal Health Information (PHI), including social security numbers and health data, of 78.8 million insureds, thus constituting one of the largest data breaches ever. On June 8, 2015 the Judicial Panel on Multidistrict Litigation transferred seventeen class action lawsuits to the Honorable Lucy H. Koh in the U.S. District Court for the Northern District of California for coordinated pretrial proceedings. The complaints alleged that Anthem failed to take adequate and reasonable measures to ensure that its data systems were protected, failed to take available steps to prevent and stop the breach from ever happening, and failed to disclose to its customers the material facts that it did not have adequate computer systems and security practices to safeguard their personal data.?It was argued that victims of the Anthem data breach – including children – face a lifetime risk of interference with their business and financial affairs.A team of attorneys aggressively pursued compensation from Anthem, its affiliates, numerous Blue Cross Blue Shield entities and the Blue Cross Blue Shield Association.? Judge Koh permitted the case to go forward under a “bellwether” approach, whereby motions only went forward on 10 of the hundreds of causes of actions alleged in the consolidated complaints.?Through arguments made in several rounds of motions by the defense to dismiss, plaintiffs were successful in convincing Judge Koh to sustain claims and damages that are on the cutting edge for privacy/data breach jurisprudence: the ability to pursue “benefit of the bargain” damages.? Ultimately, plaintiffs argued in the class motion that these damages could be based on the difference between the objectively determined market value of the health insurance as promised/represented (with data security) and as actually delivered (with inadequate data security) for contract and consumer protection act claims; andthe ability to pursue damages for loss of value of PII.? At the class certification stage, Plaintiffs argued that the value of PII could be measured by the “market” price of that data and/or the cost to class members to protect that PII from being fraudulently used.Final decision: Ultimately, plaintiff’s counsel mediated an historic settlement. On August 16, 2018, the Honorable Lucy H. Koh in the U.S. District Court for the Northern District of California?granted final approval to a $115 million settlement – the largest data breach settlement in U.S. historyChapter 16The Safety and Quality of Patient CareSmall Groups: How to measure and improve the quality and safety of patient careAlmost twenty years ago, two books on health care safety and quality were published by the Institute of Medicine (now National Academy of Medicine or “NAM”) Committee on Quality of Health Care in America. Taken together, this was a watershed moment for U.S. health care – a wake-up call that serious problems in safety and quality had become woven into the fabric of medical practice. Published in 2000, “To Err is Human” focused on medical errors—documenting their occurrence, explaining why they occur, and making recommendations for reducing them. In 2001, “Crossing the Quality Chasm” considered health care quality more broadly. The introductory/overview chapters of these books can be accessed through the links provided below. If you want to delve more deeply into these volumes, the full-text versions are available on line for ic 1What is a medical error? How are medical errors similar and/or different from errors in a manufacturing process or in the food supply chain? Of the many actions that can be taken to reduce medical errors, describe one action that you believe is particularly important.On the first page of Chapter 2 of “To err is human,” it is estimated that from 44,000 to 98,000 people die in hospitals each year as a result of medical errors. How was this estimate constructed, and do you believe it is accurate after reading the article by Haywood and Hofer (below)? In your view, to what degree would a reduced estimate of error-related mortality mitigate the importance of the message in “To Err is Human?”Review the six components of quality listed in Chapter 2 of NAM’s “Crossing the quality chasm.” Atul Gawande identifies a number of quality problems in his “Overkill” article (below). To which of NAM’s six quality components do these problems most relate, and why?Review the AHRQ quality scorecard (link below), showing national changes in quality metrics between 2014 and 2017. Pick three metrics in which the changes in quality measurements that have occurred are, in your opinion, particularly important. Topic 2You are a hospital administrator assigned to the quality and safety team. In the last report from a national review organization, the hospital’s performance was significantly worse than peer hospitals in central line blood stream infections (CLBSI). You are asked to make recommendations on a strategy for reducing CLBSIs in the hospital. From on-line sources, research protocols related both to technical steps that can be taken, as well as how to establish the necessary buy-in from the team of doctors, nurses and other personnel involved. From this research, in three slides outline your recommendations based on a synthesis of the best ideas that you were able to ascertain.ReadingsHayward Rodney A. and Timothy P. Hofer. 2001. “Estimating Hospital Deaths Due to Medical Errors: Preventability Is in the Eye of the Reviewer.” Journal of the American Medical Association 286(4):415-420. doi:10:10.1001/jama.286.4.485Atul Gawande. “Overkill.” New Yorker, May 11, 2015AHRQ Quality Scorecard 17Medical Overuse As discussed in Chapter 5, Hippocrates wrote in the ancient text Of the Epidemics a phrase that was later incorporated into versions of the “Hippocratic Oath” taken by graduating medical students: that physicians must “have two special objects in view with regard to disease, namely, to do good or to do no harm.” This admonition directs physicians to strike a balance between beneficence and non-maleficence. Having taken this oath, it has been discussed at various juntures that physicians ideally act as the patient’s agent in making medical recommendations, but that they do so while being mindful of their own income. Medical recommendations by physicians profoundly influence utilization. Chapter 17 reviews the reasons that more medical care is sometimes provided than is needed. With this framework for thinking about medical overuse and underuse, the following questions for class discussion ask you to synthesize the material in Chapter 17 (and earlier analyses of physician-induced demand), and also to do your own research about recent developments.Individuals in a variety of jobs have an ethical (and sometimes codified) duty to act in the consumer’s best interest. What are the similarities and differences between physicians and individuals who work in fields such as investment advice, auto service, wedding planning, or other service endeavors?Several examples of medical overuse are summarized in Chapter 17 based on articles in the journal JAMA Internal Medicine. From more recent updates of these articles, or other sources in the literature, give two additional examples of medical overuse.What is the evidence that direct-to-consumer advertising for prescription drugs contributes to medical overuse? Do you believe that there should be restrictions on such advertising?“Value-based insurance design” has been developed in an effort to incentivize the use of “high-value” tests and treatments that have proven efficacy and favorable clinical impact, and dis-incentivize “low-value” services for which efficacy and clinical effectiveness are absent or questionable. What role might a “high deductible health plan” play in achieving these goals. What other methods can be used to design an insurance policy to further these goals. How successful have these approaches been to date? Chapter 18Rising Prices:Insurers, Physicians, Hospitals and Administrative CostsSmall Groups: Analysis from data bases and the literatureTopic 1: Using data from the Bureau of Labor Statistics, the overall question for this topic is: What is the trend in price for the overall consumer price index, and how does this trend compare with the medical care price index (a component of the CPI) and subcategories of the medical price index?Step 1: Become familiar with the U.S. Bureau of Labor Statistics website; specifically with the “data finder” for “all urban consumers.” :[cu]&s=popularity:DStep 2: Create a graph for the trends since 1986 in: “All items in U.S. City Average, not seasonally adjusted.” This is essentially the “CPI.” Then create graphs for the following categories of “U.S. City Average, not seasonally adjusted” (go back to 1986 or as early as the time series allows):Physicians’ servicesInpatient servicesOutpatient servicesMedical Care Health Insurance (for this one, you may have to type “Health insurance, U.S. City Average,” in the search box).Step 3: Questions:Describe the trends in overall CPI vs. the medical care price index. What are the main reasons for the observed trends?Within the medical care price index, describe the relative price trends for physicians’ services, inpatient hospital care, outpatient hospital care and health insurance.How does BLS calculate the “price” of health insurance? Does it make sense to include insurer profits as well as administrative costs? Why has the price of health insurance been increasing? (see references below)Bureau of Labor Statistics. “Consumer Price Index.” (See “retained earnings methodology”) Reade Pickert. “Why the Cost of U.S. Health Insurance is Rising.” Fortune, September 12, 2019. Gee, Emily and Topher Spiro. “Excess Administrative Costs Burden the U.S. Health Care System.” Center for American Progress, April 8, 2019. 2: This topic addresses the administrative costs associated with generating a bill for medical services and its payment.Summarize the steps involved generating a paid bill for medical services, beginning with the medical record and ending with receipt of funds by the provider from the insurer. (See Tseng et al., below)Which steps are particularly noteworthy in your opinion (from the standpoint of their “reason for being,” personnel intensiveness, cost, or other consideration).What could be done to improve improve the process and reduce administrative billing costs?Tseng, Phillip, Robert S. Kaplan, Barak D. Richman, Mahek A. Shah, and Kevin A. Schulman. 2018. "Administrative Costs Associated with Physician Billing and Insurance-Related Activities at an Academic Health Care System.” JAMA?319 (7): 691. (Supplementary Online Content, eFigure) doi:10.1001/jama.2017.19148.Lee, Vivian S. and Bonnie B. Blanchfield. 2018. "Disentangling Health Care Billing.”?JAMA?319 (7): 661.(A) From the first two papers below summarize the differences between the price paid to hospitals by commercial health plans and by Medicare. Why are the former prices higher than the latter. (B) In the case of “other” insurers (e.g., auto insurers, workman’s compensation), the prices paid for hospital services are even higher, as shown in the paper by Bai and Anderson. Discuss potential causes for the higher prices paid by commercial and other insurers than by Medicare. (C) Can or should anything be done about this?Maeda, Jared Lane K., and Lyle Nelson. 2018. "How Do the Hospital Prices Paid by Medicare Advantage Plans and Commercial Plans Compare with Medicare Fee-For-Service Prices?"?INQUIRY: The Journal of Health Care Organization, Provision, and Financing?55: 004695801877965. doi:10.1177/0046958018779654.White, Chapin, and Christopher Whaley. 2019. “Prices Paid to Hospitals by Private health Plans Are High Relative to Medicare and Vary Widely.” RAND Research Report. Accessed June 9, 2019. Bai, Ge, and Gerard F. Anderson. 2018. "Market Power: Price Variation Among Commercial Insurers for Hospital Services.”?Health Affairs?37 (10): 1615-1622. doi:10.1377/hlthaff.2018.0567.Chapter 19Rising Prices: Pharmaceuticals and Medical DevicesBased on your reading of Chapter 18, please think through the following questions and be prepared to express your views about them in class:For health care in general, most of the growth in spending is due to increased prices rather than higher utilization; how does this play out for pharmaceuticals? Why is there a difference in this phenomenon for branded drugs as compared with generics?When the list price of a branded drug increases, who benefits and who is harmed?What are the implications of consolidation of insurers, pharmacies and pharmacy benefit managers?Do you believe that direct-to-consumer advertising for prescription drugs, on balance, is a value for consumers or harms consumers? Would you recommend any changes to the regulation of such advertising?On balance, do you believe that the benefits of innovation in drug development is sufficient to justify the ban on price negotiation by Medicare with pharmaceutical companies. What data are availabe to support your argument?What might be the differences between medical devices and prescription drugs that could justify the difference in regulatory practices by the FDA regarding approvals of devices and drugs?Some of the safety and efficacy practices that the FDA requires for drugs are not applied to medical devices. Are present practices appropriately balanced in your opinion, or do you have specific recommendations about how practices for medical devices should look more like those for drugs, or vice versa?Chapter 20Inequality of Access: Impact of Medicaid Expansion on Health Status and AccessBased on your review of the references provided, please analyze the strength of the evidence regarding the issues listed below, along with their policy implications, and be prepared to discuss your assessment in class:Prior to the ACA’s Medicaid expansion, circumstances evolved in Oregon that provided information on the potential for Medicaid to improve health. Why might the situation in Oregon summarized in the report below by Baiker et al. be viewed as a “natural experiment?” What are the strengths and weaknesses of the study design and implementation?What are the main study findings? What do they suggest about the short-term and long-term effects of improved access to health care on the health status of populations? What other factors affecting health status are pertinent?What were the findings from the “Oregon experiment” regarding medication use? How might this impact health status across time?Katherine Baicker, Sarah L. Taubman, Heidi L. Allen, Mira Bernstein, Jonathan H. Gruber, Joseph P. Newhouse, Eric C. Schneider, Bill J. Wright, Alan M. Zaslavsky, and Amy N. Finkelstein, “The Oregon Experiment—Effects of Medicaid on Clinical Outcomes,”?New England Journal of Medicine?368, no. 18 (2013): 1713-22, doi:10.1056/nejmsa1212321.Katherine Baicker, Heidi L. Allen, Bill J. Wright, and Amy N. Finkelstein, “The Effect of Medicaid on Medication Use among Poor Adults: Evidence from Oregon,”?Health Affairs?36, no. 12 (2017): 2110-14, doi:10.1377/hlthaff.2017.0925.Also before the ACA, health reform was implemented in Massachusetts in manner that was a model for the ACA. The association between Massachusetts reform and subsequent trends in mortality was analyzed in the report by Sommers et al., below:What study design was used and what are its strengths and weaknesses?What were the main findings?How is the overall conclusion about the impact of increased access on population health similar or different from the Oregon experiment? What might explain the differences?Benjamin D. Sommers, Sharon K. Long, and Katherine Baicker. 2014. “Changes in Mortality after Massachusetts Health Care Reform,”?Annals of Internal Medicine?160(9): 585, doi:10.7326/m13-2275.The paper by Sommers et al. below provides 3-year follow-up data on the association between implementation of certain provisions of the ACA and improved access and various measure of health care use and health status.What study design was used and what are its strengths and weaknesses?What were the main findings?How is the overall conclusion about the impact of increased access on population health similar or different from the Oregon experiment and Massachucetts reform studies? What might explain the differences?Benjamin D. Sommers, Bethany maylone, Robert J. Blendon, E. John Orav, and Arnold M. Epstein, “Three-Year Impacts of the Affordable Care Act: Improved Medical Care and Health Among Low-Income Adults, “Health Affairs 36, no. 6 (2017):119-28, doi:10.1377/hlthaff.2017.0293.Based on your overall review of this literature, and any new information that has been reported more recently, what is your overall assessment of the relationship between improved access to care and improved health, and the relative importance of health care access and other factors affecting health status?Chapter 21Macro ConsiderationsSmall groups: Behavioral determinants of diseaseChapter 21 reviews several macro considerations that can facilitate or constrain improvements in health status that might be brought about by health care reform. The three considerations discussed are: Biomedical and population science research, overall national GDP and federal budgets, and the behavioral and environmental determinants of disease. This small group session will focus on the last of these ic 1 Group members should be subdivided into smaller groups or individuals. Each subgroup or individual will do a literature search and report on one of the following four social and behavioral determinants: Obesity and inactivity/sedentary lifestyleIncome and educationCigarette smokingAlcohol or Opioid abuseFor each determinant, choose the best 2-3 papers from your literature search and prepare a two-slide summary of the association between the determinant and a health outcome (e.g., obesity and diabetes). As a group, these summaries can then be combined into an overall presenation. Topic 2 Read the 2013 JAMA paper by the U.S. Burden of Disease Collaborators, along with the accompanying editorial by Harvey Fineberg. Focus on the ways in which the various measures disease burden were measured (“Box: Glossary of Terms” on page 592), the different diseases and injuries studied and the years of life lost due to premature mortality (Table 1), the impact of risk factors on disability-adjusted life years (Figure 3), and international comparisons (Table 3). After digesting this information, and recognizing the potential limitations of the methodology as conveyed by Dr. Fineberg, the task for the group is to create a concise summary of the key take-away points regarding disease burden and their social and behavioral determinants. U.S. Burden of Disease Collaborators. 2013. “The State of U.S. Health, 1990-2010: Burden of Diseases, Injuries, and Risk Factors,”?Journal of the American Medical Association?310 (6):591-608.Harvey V. Fineberg. 2913. “The State of Health in the United States,” Journal of the American Medical Association?310 (6):585-586.Chapter 22International ComparisonsSmall Groups: Comparative Health Care SystemsChapter 22 considers the question of how to improve the balance of care, cost and access in U.S. health care. International comparisons can be informative about potential approaches. In this small group session, you will compare the health system of two countries with that of the United States. Please divide your group into two sub-groups, each of which will choose a country of your choosing (subject to sufficient data availability) for comparison with the U.S. “Topic 1” and “Topic 2” will be comparative analyses pertaining to the first and second country, respectively.Each comparative analysis should include the following elements;Characteristics of comparator country vs. U.S.Land area and populationDemographicsCultureGDP/capitaHealth care expenditures/capitaLife expectancyOrganization and financing of comparator country vs. U.S.Is there a national health system, a health insurance system, or a blend of both?If health insurance is a component of the systemIs there voluntary enrollment or auto-enrollment?Is there an individual mandate to purchase insurance?What subsidies are provided by government, and to whom are the subsidies provided?How do prices compare for drugs, hospital and physician services?Do primary care providers serve as gatekeepers? How is specialty care accessed? Describe.Are supplemental insurance policies used for prescription drugs, dental and eye care, or other services? Describe.If there is a national health system, does a private system exist in parallel? Describe.Please comment on any other interesting features.What feature(s) of your comparator country do you believe would be helpful if introduced into the U.S.?SourcesDepending on the countries chosen, you will assemble informative data from available sources. Shown below are some sources of information that will serve as a start: Chapter 22Where Do We Go From Here?Small Groups: The future of U.S. health care: Reform or Radical Restructuring?In this small group session, you will consider the benefits and risks of a complete restructuring of U.S. health care, using the “Medicare for All Act of 2019” as the example (Topic 1), and also consider examples of incremental reforms that could bring care, cost and access into better balance (Topic 2). Topic 1The Medicare for All Act of 2019 proposed a single-payer, universal access system of health care in the U.S. Pick four of its key provisions with a brief statement of the pros and cons of each provision.An analysis (October, 2019) of incremental health care reforms was contained in an October, 2019 report from The Commonwealth Fund and Urban Institute shown below. The focus in this report was the effect of the different reforms on access and cost. (The “care” part of the balance was not specifically considered.) All reforms involve trade-offs between access, generosity of benefits and cost. Reform 8 is an approximation of the Medicare for All Act of 2019 (“M4A”). What are the financial implications of M4A? How has it been proposed that the extra costs would be financed? (Note: Financing proposals are not in the report – you will have to research this.)Overall, do you think this is realistic?Of the other reforms analyzed (1 through 7), do any of them have more appeal in terms of the trade-offs? Why?Topic 2Regardless of the financing mechanism (incremental change to ACA, “public options,” Medicare for All, etc.), a number of reforms of the U.S. health care industry have the potential to improve the balance of care, cost and access. Describe reforms that could be implemented to improve this balance in three of the following health policy challenges. Describe your proposed reform, discuss its benefits, and assess potential opposition. (Note: you will have to do some research to complete this part of the assignment) Improving the creation and dissemination of information (research results) on the comparative effectiveness of disease treatments and their cost-effectiveness.Reducing billing and insurer-related administrative costs of insurers and providers.Establishing rules governing health insurance companies such as pre-existing conditions, benefit coverage, medical loss ratios, deductibles, etc.Creating public health programs directed at the behavioral determinants of disease.Reforming policies regarding prescription drugs.Rationalizing the pricing of hospital pricing.Enhancing enrollment in Health Care Marketplace exchanges.Another reform of your choice. ................
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