A friend sent me an article from Crain’s on New York’s DSRIP program. (Here’s a related DSRIP article, this one from Modern Healthcare.) I think his query was largely, though not entirely, from a hospital perspective.

And in return, I sent him this one from Health Leaders on the expansion of new health care businesses

And then, he asked me what my takeaway was. 

My answer, especially when combining the two stories is that the center of gravity in healthcare is shifting from hospitals to health plans. It’s not that they’ve reached national parity in bargaining power, nor more importantly, parity within many, many markets – where the bargaining actually takes place. It hasn’t. But the balance is shifting. 

DSRIP requires cooperation – even to the point of governance and managerial nightmares – but that’s not the primary goal. The primary goal is to change the business fundamentals so that there are sustainable reductions in the need for hospitalizations. Why should hospitals cooperate in their own potential demise? Because there’s a narrow path that enables some to survive in a diminished and less inflationary system. The choice before hospitals in New York is between almost certain failure and the reduced risk of failure. These alternatives involve different timelines, but also different risk levels.

Add to that new data generating tools – the new apps enabled by the iPhone 6 are just an example – and their ability to leverage data where there is none or damn little today and the balance shifts further and faster. The ability to gather, synthesize, and leverage data is much more up the plans’ alleys than hospitals. 

And DSRIP is about Medicaid and sometimes Medicare. Will hospitals change practices just for one set of patients? No, not successfully. Also from Modern Healthcare, Hospitals are more willing to accept new payment models for privately insured patients as well:

Reform Update: Capitated payments more acceptable to providers, survey finds

A survey of 39 health plans released this week adds to mounting evidence that hospitals and medical groups are getting comfortable with incentive-based payment structures that reward quality and lower costs. This new snapshot includes surprising evidence that a significant percentage are willing to expose themselves to financial losses under a new generation of capitation models, which went out of vogue 20 years ago. 

The survey by Catalyst for Payment Reform, an employer-funded health policy group, found that 15% of what the participating health insurers spend on medical bills is paid under capitation. Experts cautioned the figure may be somewhat skewed because the health plans that responded to the survey included a lopsided number of insurers with capitation contracts, but that would not entirely account for the significant percentage. 

The survey reflects payments for 101 million people—about two-thirds of the nation’s privately insured. The rapid adoption of more robust risk-based payment models could foster more rapid changes to how patients receive medical care.

So the shift being pushed by DSRIP is not the only pressure on hospitals.

The best we might hope for from DSRIP is that goals and objectives of hospitals and health plans, and maybe even their financial incentives, will be better aligned. That will make easier the hospital transition to fundamentally different organizational models and payment arrangements and incentives. However, if they don’t adjust to this inevitability, it will be even more painful, most likely fatal, than if they do.

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I had downloaded the data on distribution of surplus military equipment to local law enforcement agencies and started to work with it, but Greorge Gorczynskid did a very nice job in beating me to it. Here is his data visualization of The Militarization of US Police. Take a look at it. Gorczynskid’s work was done using Tableau Software, which is what I would have used. Here’s some background on the program:

This program is operated by Department of Defense’s Defense Logistics Agency’s Law Enforcement Support Office (LESO). The LESO facilitates the 1033 program, which originated from the National Defense Authorization Act of Fiscal Year 1997 (FY 97) (PDF). This law allows transfer of excess Department of Defense property that might otherwise be destroyed to law enforcement agencies across the United States and its territories.

A couple of other points:

Gorczynskid smartly matched the distribution data with crime statistics by state. (Click on his third tab, “Crime Trends.”) So you can see which states are outliers. As I began my work on the same data, I was looking at population and distribution data at the county as well as state level. I may still go back and look at that not only for total population, but to enable analysis taking racial and ethnic minority populations into account.

The biggest item in the news has been the distribution of Mine Resistant Armored Personnel Carriers (MRAPs). They are big. But they, at least can arguably be used for defensive purposes. What I haven’t figured out is the rationale for distributing thousands of bayonets and grenade launchers. Really?

The big, dramatic stuff, armored personnel carriers, automatic weapons, and so on, is what’s gotten attention so far and for good reason. But buried in the data is a lot of head-scratching small stuff too.  It’s not just the weapons and armament:

  • 23 soccer balls
  • 30 softballs
  • 9 bucket mops
  • 1 brass Bible stand, $667.
  • …Underwear. It just goes on and on

Over a half $billion worth each last year and the year before. So far, about $1/4 billion this year.

There have been some reports of equipment being distributed to schools. Here’s an example

A number of local agencies have been suspended from the program, primarily for failure to account for and presumably control what they’ve received. Here’s an example. This may be another one.

In local old news, some years back the Albany County Sheriff’s Department got a boat through the program. They paid so little attention to it that it sank.

Perhaps the most important point of all is best said with the old saw, “if you have a hammer, everything begins to look like a nail.” Acquiring heavy military equipment is not a neutral act.

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it will be interesting to see if they can pull this off. This from the New York Times:

“Hospitals and Insurer Join Forces in California”

In a partnership that appears to be the first of its kind, Anthem Blue Cross, a large California health insurance company, is teaming up with seven fiercely competitive hospital groups to create a new health system in the Los Angeles area. The partnership includes such well-known medical centers as UCLA Health and Cedars-Sinai.

Anthem and the hospital groups plan to announce on Wednesday the formation of a joint venture whose aim is to provide the level of coordinated, high-quality and efficient care that is now associated with only a handful of integrated health systems like Kaiser Permanente in California, Intermountain Healthcare in Utah and Geisinger Health System in Pennsylvania. 

But the Anthem venture, for the first time, includes hospitals that are competitors and are not owned by the plan itself. Anthem will continue to offer other health plans, and the hospital groups will continue to have arrangements with other insurers. 

What they’re evidently not doing is fully integrating organizationally. What the micro-economists, Ronald Coase and Oliver Williamson have taught is that that’s not cost-free. There are transaction costs and organizational frictions exceeding what happens within one firm. Those costs may not be easily identifiable, but that doesn’t mean they’re not real. If nothing else, it takes more time to reach agreements, especially unambiguous agreements and there are certainly the costs of having to repeatedly negotiation resolution of new issues.

Getting even more concrete, some modest little issues might include:

  • Is Anthem going to pay on other than a fee-for-service basis, and if so, what? Are they going to use the same method for all the participating hospitals?
  • What information are they going to share. Will hospitals see even summary data from their competitors? 
  • What does Anthem represent as a share of each hospital’s business? Will hospitals change their operational practices for all patients based on what they do for Anthem? How long will Anthem tolerate such free-riding by its competitors?

Well, bless ‘em for trying. Tough road though.

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This is just fun to read and think about. Crowdsource funding, using Twitter for help solving technical problems, open-source volunteer effort to revive a derelict satellite. 

Rebooting ISEE-3: Space for All – NYTimes.com

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Faced with the challenge of a very expensive Medicaid program, New York chose to dramatically reform it. A key element of the reform is moving Medicaid long-term care patients, including nursing home patients, into managed care plans, including managed long-term care plans (MLTC).

A key elements of the new policy is that MLTCs need not have a contractual relationship with every nursing home. While they need not negotiate prices during the transition period, nursing homes and plans may negotiate prices

Now the managed care plans are faced with the challenge of dealing with nursing homes on a much larger scale than in the past. 

A health plan representative asked whether we could create a visual, interactive dashboard that combined Medicaid price data with quality indicators. We did.

The dashboard, includes:

  • CMS Nursing Home Compare Star Ratings, Overall, Staffing and Survey
  • Staffing levels for several types of staff (RN, LPN, Aides, Physical Therapy, etc.)
  • Staff, influenza vaccination percentages
  • Fines imposed, both number and level
  • Medicaid rates for operating costs and capital
  • Location
  • Number of beds
  • Vacancy rates and average number of vacant beds

The dashboard is highly visual and highly interactive. Users may filter (in or out) by quality rating, Medicaid rates, region, county and sub-county geographic areas. Users may also test the effects of discounts and value-based pricing.

 

 SNF MLTC Tool 1 2014 04 15 0926

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A colleague and friend, knowing of my history flying large Air Force transports internationally, and who’s intensely curious about the fate of Malaysia Flight 370, has sent me a string of emails, most with the subject line: “does this make any sense?”

My first response, and one which is still correct was this:

“It is a capital mistake to theorize before one has data.”

Sherlock Holmes
 
… and me

 

I did observe to my friend that the world is a big place, but that I was still confident that eventually 370 would be found. I also observed that aviation technology is dramatically better, and the amount of data generated from routine operations dramatically greater than when I was flying internationally. That was a few decades ago, which depending on your perspective was a long time ago or practically yesterday. But to me, the changes have been both fast and great.

Other than that, I’ve refrained from comment, except at home (my wife is a very patient person). Well, it’s time to come out of my corner and make public some of my own observations. Here’s the first, which is on the news coverage.

The TV news coverage has been a decidedly mixed bag. I’ve been generally impressed with the guests on several shows, who have accident investigation experience. They’ve been informative, while being appropriately cautious and not overrunning the evidence. Anecdotally, the ones I’ve watched have rarely, if ever, made absolute statements. Instead they tend to express themselves in terms of possibilities and probabilities.

In contrast, the reporters and hosts overdramatize and express themselves in absolutes far too often (once is probably too often.) Here’s Lt. Col. Robert Bateman’s apt criticism of CNN: “CNN Malaysia Flight Coverage – On CNN’s Reckless Malaysia Flight 370 Coverage – Esquire

And here’s Nick Martin at TPM pointing out Don Lemon’s (CNN Anchor) questioning a guest about whether the flight may be missing due to a supernatural event or might have been sucked into a black hole. Really? I couldn’t bear to link to CNN on that one. That’s pathetic.

But it’s not just CNN. An ABC affiliate  used a modified version of the graphic for the fictional TV show, Lost, to push its coverage of Flight 370. That’s crass.

And, of course, we already have a broad array of conspiracy theorists, even including Rupert Murdock (really) asserting on Twitter, with neither hesitation nor uncertainty, the the loss is the result of anti-Chinese jihadists. And that’s nutty.

And then, there are those who are already pushing fixes such as eliminating the ability of the pilot to turn transponders off. (That’s not TV coverage, but an op-ed by Gregg Easterbrook in the New York Times). More thoughtful than some of the other coverage and commentary, but not an impressive idea in my book, And more importantly given how little we know at this point, way too early.

Without getting super specialized, if you want one reliable observer/journalist, who knows something about aviation, then try James Fallows at the Atlantic Magazine

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Here are some terrific examples of measuring and visualizing without interfering with existing patterns or operations and without spending much time – and I suspect – without spending any money.

Though I’m bicycle-biased, I’m not a transportation policy guy or an urban planner. Yet I’ve always admired those who figure out how to measure any system’s functioning indirectly, from something that’s already in that system and without additional system cost. In that respect, these are really good.

In traffic and street planning, a “neckdown,” (new word to me) is a physical constriction of the road space to quiet traffic and/or to increase space for pedestrians, bicycles or other uses (sidewalk cafes?). I presume this can be accomplished by reducing space that’s actually used by motor vehicles or more subtly, just cutting off the space that cars and trucks don’t use anyway. Even if it’s not physically used, restricting it visually will likely also restrict it psychologically.

As it turns out a “sneckdown” is a temporary neckdown, one created by snowfall. Just look at and record the less traveled street space after a snowstorm to see where cars and trucks don’t drive.

Here’s a New York City example from Streetsblog NYC Sneckdowns: Taking the World by Storm.

The snow is almost like nature’s tracing paper,” Streetfilms’ Clarence Eckerson told the BBC. “It’s free. You don’t have to do a crazy expensive traffic calming study. It provides a visual cue into how people behave.

The folks at In This Old City in Philadelphia, did some very nice examples at What Snow Tells Us About Creating Better Public Spaces.

All they did was take photos of where traffic had not passed after a snowstorm. The Philadelphia examples just added a bit of visual highlighting to the pictures.

Clever, clever, clever.

Kudos.

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And here’s a really nice summary by Liz Farmer of why the cost of ignorance is rising in local government finance: Financial Illiteracy: One of Government’s Biggest and Least Discussed Problems.

Yes, it’s more eat your fruits and vegetables stuff but …

  • Don’t be surprised, as some have been even when their actions are legal, when your bond rating is trashed. Rating standards are getting tougher.
  • The regulatory climate is more stringent as a result of Dodd-Frank.

I’ve been reeling for years from a conversation I had with an experienced, and otherwise smart, county legislator who told me:

Oh, I never read the County Budget. I don’t have time for that. That’s what staff are for.

When I pressed him, he said he never even read the Executive Summary, which was only 5-10 pages. And the legislative “staff” he relied on had no financial expertise. Still doesn’t.

The legislator in question has moved on and is now a member of the NYS Assembly, where at least there’s a Ways & Means staff and some legislators who do their homework.

The more time passes since the end of the Recession, the more people have become complacent. That’s a trap and a dangerous one.

Wake up folks.

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From the Center on Budget and Policy Priorities, Budgeting for the Future: Fiscal Planning Tools Can Show the Way (PDF), by Elizabeth C McNichol, Vincent Palacios, and Nicholas Johnson.

Ten tools:

  1. Multi-Year Forecasts of Revenues and Spending
  2. Fiscal Notes with Multi-Year Projections
  3. Current Services Baselines
  4. Independent Consensus Revenue Forecasts
  5. Independent Legislative Fiscal Agencies
  6. Independent Review of Pension Assumptions and Methods
  7. Well Designed Rainy Day Funds
  8. Oversight of Tax Expenditures
  9. Prudent Rules for Pension funding and Debt Levels
  10. Budget Status Reports

This is eat your fruits and vegetables stuff. And it’s not like others haven’t done similar lists. But it’s always worth repeating.

And perhaps especially now.

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