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Two months ago, my medical director and medical services director came to me with an interesting case related to medical tourism. In short, one of our covered members went overseas to Europe to have his spine repaired.

He received two spinal implants that cost a total of $42,000 U.S. He was requesting reimbursement as he had paid the providers directly for the surgery.

The question for me was whether we should pay it, as we had not directed him to have the surgery done "out of network." We apparently had authorized it but had not clearly communicated to him about where he should go for the surgery. We would have most likely sent him to Salt Lake City or Denver. He made up his mind and chose Europe, and went there for the surgery. It appears to have been successfully completed.

One of the benefits of having his procedure done in Europe was the fact that the surgical standard is to have two discs replaced, while we, in the United States, only allow one implant per surgery. In other words, he got two discs repaired while undergoing just one surgery.

In any case, the surgery was completed and he requested reimbursement. He pointed out that the total cost for the two implants and surgery was far less than what it would have cost for one implant and surgery if the procedure had been completed in the United States, and thus he saved us money. He did make good points.

Of course, as a good parsimonious health plan, we asked the logical questions related to liability, precedence, etc. We queried our fellow health plans and got only one response, interestingly from Salt Lake City. Apparently there is not yet a lot of experience, at least among some health plans, with international medical tourism.

With the information that we had, we discussed the case again. My decision, ultimately, was to pay the member for the surgery, subject to some exclusions. It was a practical response, coupled with the reality that we had not been clear in our communication initially. I believe the onus for clarity falls on the health plan, not the individual member.

So, what are the cost differences? They are profound. Surgery itself was much less than in the United States. The cost of each implant in Europe was $17,000, whereas it would have been at least $20,000 in the United States. The manufacturer is an international company and sells its products in the United States and abroad. The pricing surely differs by geography, to our detriment here. Plus, it is customary for U.S. hospitals to take their acquisition cost and mark it up by 200 percent or 300 percent, creating a differential here versus abroad. I don't know how hospitals might mark up that same implant overseas.

This incident was an eye opener that confirmed my concerns about the cost of health care in our country. I am thankful for advanced medical technology and I assume, based upon our approval, that this member needed the surgery so that he could function much better.

Nonetheless, the cost can be frightfully high here, compared to other settings. Medical tourism is an international issue, to some degree, but interestingly, it may become more of a domestic issue. U.S. providers may develop more "value" based approaches to care that might create meaningful differentiation in outcomes, quality, and cost.

I hope so!

David Kibbe is CEO of New West Health Services  https://www.newwesthealth.com/

The following paragraph is from the American College of Physicians Ethics Manual, 6th Edition:

“Physicians have a responsibility to practice effective and efficient health care and to use health care resources responsibly. Parsimonious care that utilizes the most efficient means to effectively diagnose a condition and treat a patient respects the need to use resources wisely and to help ensure that resources are equitably available. In making recommendations to patients, designing practice guidelines and formularies, and making decisions on medical benefits review boards, physicians' considered judgments should reflect the best available evidence in the biomedical literature, including data on the cost-effectiveness of different clinical approaches. When patients ask, they should be informed of the rationale that underlies the physician's recommendation.“

With synonyms for parsimonious that include miserly, stingy, and frugal, it is no surprise that this word choice evoked some criticism. The preponderance of the Ethics Manual advocates that the physician’s primary obligations and duties are to the patient, exercising beneficence, confidentiality, and honesty, with the best interest of the patient being paramount. The paragraph above is a small, but important, segment of the Ethics Manual.

While we might reasonably debate word choice, my view is that the College made the right call to highlight our vital need for physicians to recognize their role and responsibilities related to efficient and effective clinical practice. One microcosm in medicine that is an instructive example is antibiotic stewardship. We have seen the adverse clinical and, to a lesser extent, economic consequences of injudicious overuse of antibiotics. It is time for judiciousness with a dose of parsimony.

Ever since I started covering health care 20 years ago, managed care companies — HMOs back then — have had little respect from the public. I am sorry to have to point you to a new report that has managed care companies at the bottom of a list of industries in consumers’ eyes. Just below Internet service providers, TV service providers, and computer makers, and far below fast-food chains, banks, and retailers. The highest rating went to grocery chains.

The information comes from the Temkin Group, which surveyed 10,000 consumers. It uses the term “experience ratings.”

Within this despised business category, managed care, some plans have a better image than others. Will anyone be surprised that Kaiser Permanente leads the list, with Tricare a distant second? In fact, Kaiser is the only one to receive an OK rating. Others are poor or very poor. Highmark is at the bottom, just below Health Net and Medicaid.

I may be the editor of Managed Care, but I am not an apologist for the industry. It has made mistakes and worse. But I do think that managed care companies are getting a bad rap. Reasons that come to mind:

—People who get upset when their plan tells them that an expensive service is not covered are generally blaming the wrong party. In employer-sponsored plans, it is the employer who made the decision. But most people think it is the insurer or third-party administrator—the name on the plastic wallet card. My company is self-insured, but the name on the card is Independence Administrators.

—People have seen some inflammatory movies and reporting and formed opinions without all the facts. Managed care has saved consumers and employers a considerable amount of money over the years, and in many or most cases, health care companies’ policies have resulted in better care than would otherwise be the case.

—Most people have never had a major problem with their health plan. That’s because most people don’t have major health problems where coverage disputes can occur. And most of those with serious problems won’t have a major conflict with their insurer.

In any event, the likely/unlikely advent of the Accountable Care Act's going live with the sale of individual policies through exchanges is sure to spawn PR efforts by the insurers that are in that market or want to be in it. When that happens, it will probably seem as though they are all headquartered in Lake Wobegon, because they are all above average.

So read the Temkin page; it won’t take long. And ask yourself whether it makes sense, for example, that banks — which charge ever higher fees that have no relation to costs and, let us not forget, extended mortgages to millions of people who were not creditworthy—should be more favored by consumers?

People are funny.

(Here's the link to Temkin: is at http://bit.ly/yG5RM1.)

A visit to my dental hygienist this week began with a conversation about diagnostic tests. Before the dental x-rays, I asked Dottie if I needed x-rays, and she replied that it had been 18 months, and, based on my age and past dental history, every year to two years was a reasonable interval. Not wanting to debate this point before confronting the Cavitron, I accepted that rationale.

Before Dottie began her assault on my plaque, she described her own interactions with physicians. She said that she sometimes questions her physicians or those of her children about the need for x-rays, blood tests, and antibiotics. She said that simply asking “Do I — or does my child — need this test or antibiotic?” led to the physician often not ordering the test or prescribing the antibiotic.

A favorite tech term, “convergence,” might be applied to our overuse and misuse of diagnostic testing and antibiotic prescribing with concomitant adverse economic, and sometimes adverse health, consequences. The convergence of forces or factors includes ready availability of tests and antibiotics, the relative noninvasive nature of most tests, patient expectation (Dottie being in the minority in my estimation and in my experience), defensive medicine, expedience (using tests to substitute for more questioning in greater depth, examination, time spent thinking), and reimbursement.

One recent estimate of the cost of unnecessary testing, by a former Congressional Budget Office director, was staggeringly high — $700 billion.
http://personalmoneynetwork.com/moneyblog/2011/08/16/unnecessary-medical...

It’s a tough problem. “Just say no” is the contentious, no-win position that payers were asked to take by purchasers beginning in the 1980s. Part of the health care reform that we need, that can work: reshaping consumer attitudes and understanding toward the Dottie healthy-questioning orientation, reforming reimbursement methods, and reforming tort statutes. This will help to provide a framework for clinicians to best use their training, time, and judgment.

Steven R. Peskin, MD, MBA, FACP
is executive vice president and chief medical officer
of MediMedia, USA, which publishes Managed Care

Back in the 1980s, the theme song for the television comedy show Cheers had a line: “Where everybody knows your name and they’re always glad you came.” Now, clinical executives have that place, and its drawing power is not the broad strokes associated with a mammoth social network site like Facebook, but rather, a more focused perspective.

The Medical Directors Forum, found at www.medicaldirectorsforum.com, serves as a gathering place for like-minded clinical executives to share ideas, provide guidance and insight, and discuss the many things they do on a day-to-day basis that they wish they could do better. In the past, medical meetings often provided this collegial atmosphere, but now that sharing of ideas and experiences is just a mouse click away.

A main draw will be the discussion boards. Each will be moderated by a thought leader on the topic who can tease out pearls of wisdom from the participants that might otherwise remain hidden or, at the very least, unshared.

Please do sign up for these boards as soon as you join the forum, so as to help them achieve the critical mass needed for good discussion. The forum is just starting up, and the number of participants will slowly grow.

Another area on the site that is expected to get a lot of traffic is the reference library, which will pull guidelines from various government agencies and commercial insurers and provide access in one convenient location.

John Marcille is the editor of Managed Care.

This post is not about coronary artery disease. Nor is it about the
“stiff” ventricles in diastolic heart failure.

Like “Never Rest”, which I posted several weeks ago, this brief discussion was inspired by Saturday morning Torah study. “Harden Heart” refers to the Pharaoh at the time of Moses and the Exodus from Egyptian slavery. What struck me from our discussion on Saturday morning that relates to health plans and health benefits is that those of us who have responsibility/authority over what is reimbursed, or not, how it is reimbursed, and at what level are — metaphorically — in a parallel role to the Higher Power in the Torah passage. Those whom the purchasers and payers are influencing, or who are on the receiving end of attempts at influence by the purchaser or payer are, metaphorically, in the position of Pharaoh (No implication or suggestion intended about virtue or lack thereof on either side of this analogy!). They are employees, plan members, health care professionals and facilities, ancillary providers, and any other entities that are being paid for services.

In the story, it takes many sticks (no carrots) to ultimately influence Pharaoh to free the Jews. The question that we discussed and debated is to what degree God hardened Pharaoh’s heart and to what degree did Pharaoh, using free will, refuse to set the slaves free even in the face of punitive actions — the plagues.

And in health care, we use sticks too, but also carrots, to influence patients. People who are managing care are involved in plan design that employs disincentives like higher premiums for people using tobacco products or greater cost sharing for certain services or products, and incentives like premium reduction, direct payment, or any of a panoply of other methods of encouraging the desired health outcomes. Are these patients acting with free will, or have we hardened their hearts?

And the same question can be asked of managed care’s dealings with providers. With respect to reimbursement of health care professionals, facilities, ancillary providers, devices, and medications, the purchaser and payer decision-makers may inadvertently harden hearts toward behaviors that are not achieving better, more affordable care. But the providers, using their free will, may resist or, it is to be hoped, see the incentives and disincentives as movement toward better, more affordable care.

We must critically and thoughtfully analyze the impact of our decisions that are intended to influence or shape behavior, course-correct for unintended negative consequences, sharpen and refine interventions that are effective, and appreciate that competing influences, rewards, or disincentives will invariably muddy the waters.

Steven R. Peskin, MD, MBA, FACP
executive vice president and chief medical officer
of MediMedia, USA, which publishes Managed Care

From Managed Care

The vast majority of Part D plans follow a tiered cost-sharing structure with incentives for members to use less expensive generic and preferred brand-name drugs. Cost-sharing has increased since 2006, but the Kaiser Family Foundation reports in “Analysis of Medicare Prescription Drug Plans in 2011 and Key Trends Since 2006” that there was barely a change between 2010 and 2011.” The foundation reports that since 2006, median cost sharing for a 30-day supply of nonpreferred brand name drugs in stand-alone prescription drug plans (PDPs) increased by 42 percent, from $55 to $78. Preferred brand costs increased 50 percent, from $28 to $42. But since 2010, cost sharing has been stable.

About half of PDP enrollees and over 75 percent of MA-PD plan enrollees are in plans that charge 33 percent coinsurance for specialty drugs. Compared to 2009, this share is down modestly for PDPs but up substantially for MA-PD plans. In contrast, only 4 of the 35 national or near-national PDPs charged a 33 percent coinsurance rate for specialty tier drugs in 2006.

Jack Hoadley, PhD, a health policy analyst and political scientist at Georgetown University’s Health Policy Institute and co-author of the report, says, “There’s been an attempt to have a greater cost spread between the generics and branded drugs. That’s what we’re going to see happen in 2012.”

“On the generic side,” he says, “we’re going to see a split from one generic price to two tiers for generic drugs. Medicare is going to do its best to persuade its enrollees to choose generic drugs by adjusting copayments.”

Copays

Coinsurance

Source: Georgetown/NORC analysis of data from CMS for MedPAC and the Kaiser Family Foundation; data for employer plans from Kaiser/HRET Employer Health Benefits Survey, 2010.

It's all about choice these days. Different routes, same destination. In this case, it's reading Managed Care when and where you like, and if you own an iPhone or an iPad, you can do that with our new app available at the Apple Store.

Search for "Managed Care," "P&T," "Biotechnology Healthcare," or "MediMedia," or just click here:
http://itunes.apple.com/us/app/medimedia-managed-markets/id496230488?mt=8

The free app gives access to Managed Care and our sister journals, P&T and Biotechnology Healthcare. You can access all the content through an online connector or, as I do, download the issue to my device and read it from there.

We still have three other ways of reading Managed Care: right here on this page (click on the "latest issue" tab above); on our digital facsimile site, and, of course, the awesome printed magazine itself.

Happy reading.

John Marcille is the editor of Managed Care.

After grand rounds this morning at the University Medical Center at Princeton, the director of the recently created transitional care program, Kathleen H. Seneca, MSN, was speaking with one of our nephrologists about the purpose of the program. It fills the transitional gap for people discharged from the hospital that do not qualify (in terms of reimbursement guidelines) for home care, but would benefit from additional education, care planning, and hands-on instruction.

The director noted that, for example, these patients might learn something as simple as recording daily weight. They might learn what to do in the event of weight gain in a person with congestive heart failure or advanced kidney disease.

Another example is the time-tested “brown bag” visit, whereby the clinician, in this case an advanced practice nurse, reviews medications — when to take them, how to take them — potentially finding duplications, medications that were to be discontinued after discharge, or ones that were to be re-initiated after discharge.

It's about time! To paraphrase the nephrologist, “I can’t tell you how many times a patient is admitted three, four, five or six times a year for the same issue” that was not properly addressed in the transition from hospital to home.

The readers of Managed Care are likely saying, “Tell me something that I don’t already know.” My point: Take action! It really is just that simple.

Steven Peskin, MD, MBA, FACP
Executive Vice President and Chief Medical Officer
of MediMedia, USA, which publishes Managed Care

Leaving the gym on an unseasonably warm night, I struck up a conversation in the parking lot with a vascular surgeon acquaintance. He recounted a technically demanding procedure that he had done the day before with a reported 10 percent risk of stroke and a 3 percent mortality risk.

The two-stage procedure was optimally done in one trip to the OR with two surgeons involved in the several-hour two-stage surgeries. My acquaintance commented that his reimbursement and that of his colleague came to about $70 an hour — and that does not include the 90 days of post-op care associated with the reimbursement for the surgery.

In the reimbursement of medical services, complexity abounds: new technologies or the application of existing technology in new ways; the supplanting of one modality for another; efforts to tie reimbursement to performance, outcomes, and/or quality.

This surgeon mentioned that he could have done the two-staged procedure as two separate surgeries and been reimbursed considerably more. I am heartened to know that he did what he perceived to be best for the patient versus his kids’ college fund. He also commented on witnessing interventional internists and surgeons who elected to separate procedures, for example, diagnostic cardiac catheterization followed by PCI, versus completing both in one trip to the cath lab.

Despite the enthusiasm that many of us share for the medical home and other forms of value-based reimbursement, there is still plenty of work to be done to rationalize the blocking and tackling in the still-dominant fee-for-service payment model.

Steven R. Peskin, MD, MBA, FACP is executive vice president and chief medical officer of MediMedia USA, which publishes Managed Care. He is Associate Clinical Professor of Medicine at the University of Medicine and Dentistry of New Jersey–Robert Wood Johnson Medical School