I recently read the article "Some Claim ACO Status Without Truly Changing," about how some provider organizations are asserting they've "always been an ACO."  This did give me a déjà vu moment.

I feel like I'm in a time warp, caught somewhere around 1990. Remember that year?  Margaret Thatcher resigned, Manuel Noreiga turned himself in, Jim Henson died, Driving Miss Daisy won best picture… And that's also about the time that executives of provider service organizations got the idea that they could be managed care organizations and manage the financial risk of health care for a population. Most often those executives told me they had "always been responsible for a fixed budget."

Now the strategic theory behind provider organizations managing health care financing is a sound one on many levels. From the organization’s perspective, controlling all of the funds for a population is one way to protect their strategic market position. From a health care policy perspective, it makes sense to have clinical professionals making the decisions about rationing health care resources.

But, if the ACOs of the future are going to succeed, executives of provider organizations need to realize that it is not business as usual. That is the reason so many managed care initiatives owned and operated by provider organizations failed. They believed there was no difference.

What I heard at the time was the oft-repeated phrase: "If only we had all the money, everything would be fine" (still, of course, a popular phases these days too). But, since the clinical professionals who run most provider organizations are trained to think on a case-by-case basis (instead of a population basis), they are not well-suited for managing population-based health funding. And at that time, executives of many provider organizations quickly learned how tough it is to make a margin managing a pool of funds.   Some of the them learned the hard way (financially speaking).

Now before you send me a message about either the evils of rationing (some entity has to do it) or my negativity about the executive management of provider organizations, I would like to point out that I think that financing of health care services based on some risk formula (capitation, case rates, etc.) is generally a good policy decision. But, to be successful, executive teams of provider organizations need to become "data-driven" in their analysis and decision making.   

I think there is nothing significantly different from ACOs of today and the managed care programs of two decades ago (though many of program architects disagree with that statement). But, without some significant change in management tools and organizational culture, management teams of provider organizations are going to be as successful (as a group) at managing ACOs in the future as they have been at running managed care programs in the past.

The process of participating in the political process has changed dramatically over the course of the past year.  In January 2010, the U.S. Supreme Court decided in Citizens United v. Federal Election Commission that, for the purposes of campaign contributions, organizations are citizens and have the right to "unlimited spending in pursuit of political ends."  This is a change of titanic magnitude in our political system.

I have very mixed thinking about the decision.  I generally support free market and libertarian sorts of ideas—including completely unlimited freedom of speech.  But, the power of unlimited corporate contributions in politics does daunt me.  In the wake of this decision however, there is one absolute – we must have transparency in these contributions. Whether by individuals or corporations, all donations to political campaigns, political action committees, the 527 advocacy groups, and the host of non-profit organizations that have grown up doing the bidding of political movements, must be publicly disclosed immediately.  Without transparency, what we have is a political system driven by propaganda (which is commonly differentiated from ‘advertising’ by its lack of identifiable source).  

This issue has new interest in the wake of some recent events.  We had the humorous ‘mock news’ reporter Jon Stewart on the  “The Daily Show” pointing out that the supposedly terrorism-tainted Saudi prince (whose foundation might contribute to the Islamic center much maligned on Fox News), Walid bin Talal, is not only the biggest non-Murdoch shareholder in Fox News’s parent company (he owns 7 percent of News Corporation), but is also the recipient of Murdoch’s mammoth investments in Saudi Arabia.
 
Then, there was a great analysis, “Covert Operations: The Billionaire Brothers Who are Waging A War Against Obama,” by Jane Mayer appearing in The New Yorker.  Its examination of the political funding apparatus of industrialists Charles and David Koch (Charles G. Koch Charitable Foundation, the Claude R. Lambe Charitable Foundation, the David H. Koch Charitable Foundation, KochPAC, and Koch Industries) is fascinating.  These two men, alone, are responsible for a host of ‘political brands’ that we are exposed to every day –  the Cato Institute, George Mason University, the Mercatus Center, Citizens for a Sound Economy, Citizens for the Environment, Americans for Prosperity, Century Strategies, and “Tea Party Talking Points.” 

I support the right of these individuals to say whatever they want, and to fund the means to move their message forward.  However, it is full disclosure and transparency that are a necessity.  Unfortunately, the very modest Disclose Act, which requires corporations to show how they spend money in elections, was recently defeated by Republican filibuster.  Without that, we are left with citizen action—which frequently comes in the form of consumerism—as our only recourse.  Target is one corporation that recently learned exactly how their political investments can impact their relationship with their customers.  It donated $150,000 to Minnesota Forward, a group channeling funds to Minnesota Republican gubernatorial candidate Tom Emmer—known for his opposition to lesbian, gay, bisexual, and transgender rights.  As a result, the company now faces both a consumer boycott and a movement by institutional stakeholders asking for a "comprehensive review" of Target's political donation process.  Still, I think that to rely solely on investigative journalism and institutional investor actions is silly.  We need transparency and disclosure.   After all, why would political contributors want to hide what they really believe?

They say health care is recession-proof. But, that's not exactly the case. The health and human services sector has proven to be both recession-resistant and a recession laggard. And—if U.S. governors are right—the start of the ‘recession’ in the health and human service sector will begin on July 1, 2011. The fiscal year that begins in July will be “the most difficult to date,” according to a survey of 45 states released at the winter meeting of the National Governors Association.

States must find a cumulative $18.8 billion to balance their budgets in remaining months of the current fiscal year, and in fiscal 2011, an estimated $53.6 billion in shortfalls awaits, according to the survey. For governors, Medicaid is one of the top budget issues. Medicaid spending for fiscal year 2009 was $335 billion, an increase of 7.8 percent over the previous year. Enrollment increased 5.4 percent in fiscal year 2009 and will grow 6.6 percent in fiscal 2010. Additionally, 3.3 million more people were enrolled in Medicaid in June 2009 compared to the previous year—the largest one-year increase to date.

If you haven't started your management strategy for this time of economic freefall, now is the time. For starters, employ a three-prong recession management strategy consisting of short-term cash management, business development, and preparing for the post-recession marketplace.

For more, check out:

• Prepare for the Emerging Post-Recession Marketplace: Five Management Best Practices for Organizational Sustainability
• Anticipating Emerging Post-Recession Market Models: Consumer & Payer Demands for Behavioral Health & Social Services

The headline in the February 20, 2010, edition of The Los Angeles Times tells a story, "Consumers who buy individual health policies feel trapped. They have few options other than dropping coverage as insurers raise rates and slash benefits. Insurers blame the soaring cost of medical care and the churn of customers in the individual market."

No argument from me; for individual and small group health insurance policies, the rates—and rate increases—are crazy. But, the insurers' complaint about churn is spot on. Until we have universal health care coverage for 95% or more of the population, this ‘shift the risk’ game will continue. There is nothing that consumers or insurers can do about it. Solutions? Only two.


1. The government provides catastrophic health insurance for everyone, and/or


2. Employers are required to provide—and individuals are required to buy—health insurance.


Hopefully, our representatives in Washington will eventually understand these basic health care financing principles.

The health care reform bill tug-of-war currently happening between the House and Senate is too much for many of us to keep up with. I took interest with an article in Slate by Christopher Beam that includes a hit-list of those health care reform issues that still need to be ‘hammered out’ in the final bill. His six issues include:

• The exchanges—while the House bill would create a national exchange, the Senate bill would create a series of state-based exchanges. There’s no happy medium. It is either state or national.
• The mandates—what will be the real penalty for not buying health insurance? The House bill would charge a 2.5% tax on all income above the filing threshold ($9,000/individuals or $19,000 for couples), while the Senate bill would impose a flat penalty, which itself fails to acknowledge the wide variance in American income levels and their ability to pay up. The employer mandate is a big one as well; will employers pay an 8% tax on total wages or levy a $750 fine per employee? Who will be eligible for exemptions?
• Medicaid expansion and subsidies—the House bill would make Medicaid available to individuals earning up to 150% of the poverty level, while Senate bill would expand it 133%. The differences are in the subsidies, in that the House bill provides far more support for families at or below 300%, while the Senate bill seems to focus more on middle income families between 300% and 400%.
• CHIP—key questions posed by Beam: “Does Congress really want to end the Children’s Health Insurance Program and push kids into exchanges and Medicaid, as the House bill would do? Or does it want to extend CHIP until 2015, as the Senate bill would do?
• Narrowing the ‘donut hole’—the gap in Medicare coverage known as the ‘donut hole’ is addressed far more in the House bill, which phases it out altogether by 2019 by ‘filling’ it with money from the pharma industry. The Senate bill would only close the gap halfway (and only temporarily).
• Paying for it—the House would levy a 5.4% surtax on individual income above $500,000 while the Senate would tax plans that cost more than $8,500 for individual and $23,000 for a family; Senate would also tax indoor tanning services (yes, seriously).

As our eyes dart back and forth between this legislative ‘volley,’ I will be interested to see how flexible the House and Senate are on certain issues—and which issues they refuse to compromise on.

Don't miss the great piece "Recent Changes in Medicaid Policy and Their Possible Effects on Mental Health Services” by Jeffrey A. Buck, Ph.D., Center for Mental Health Services, Substance Abuse and Mental Health Services Administration, in the November issue of Psychiatric Services. If you were one of the few remaining people in the field who didn't think that Medicaid funding has come to indelibly change public mental health systems—and will continue to do so—this is a great synthesis of the current and future market effects.

On the system side, Dr. Buck identified the following Medicaid-driven system effects that have already occurred:

• A larger role for state Medicaid authorities in state mental health services and a corresponding decline in the role of mental health authorities;


• Service delivery privatization via Medicaid managed care arrangements which privatize many functions previously provided by public entities


• Increased funding for community-based mental health care


• Increased difficulty in using Medicaid funds for areas not clearly defined within the program;


• Increased accountability of individual service providers via the Medicaid Integrity Program


• Movement away from incentivizing psychiatric institutionalization
  

Dr. Buck also looks ahead to future policy changes. A few are ‘more of the same’—an increase in the role of Medicaid authorities and the growth of community-based services, with continued promotion of deinstitutionalization. In addition, he points to two other developments that are on the horizon. The first is increasing convergence of mental health policy with those that are the norm in primary care. The second is more meaningful consumer participation in treatment plan participation and choice of professionals and provider organizations.

Want a quick summary of the 564 amendments offered to the Senate Finance Committee to 'fix' the Baucus bill?

Timothy Noah and Chris Wilson of Slate.com have done just that. The actual amendments are all described on the Senate Finance Committee's Web site. Unfortunately, they're scattered among six PDF files, and navigating them is a nightmare.

Slate's Chris Wilson assembled all these amendments into a single spreadsheet that can be sorted according to sponsor, party, budgetary offset, and whether the amendment in question addresses insurance coverage, reform of "delivery systems," or financing. (Note: You may need to log into Gmail to view the sortable spreadsheet. A low-fi version is also available.)

Hope you have is much fun with this as I did!