A lot of buzz has been made about the Oregon health exchange’s comparison of prices causing insurers to revise and lower premiums. While an excellent example of the power of the ACA exchanges broadly, the specific story isn’t something we’re likely to see in Minnesota for a few months.
First, what happened in Oregon wasn’t a product of any particular policy mechanism. The two insurers, seeing other premiums being offered, simply asked prior to state government review to re-file their initial offerings. There wasn’t any formal revision period in Oregon, nor is there one here. In Minnesota, we’ve passed the May 24th submission deadline and the review process is already underway, meaning the chance for revisions to 2014 exchange plans has since passed.
Second, Minnesota is different from Oregon in that all Department of Commerce filings regarding insurance are classified as “nonpublic” until plans become effective. In the context of MNsure, those direct price comparisons won’t be available until October 1st this year, the start of the exchange’s open-enrollment period.
The filings are nonpublic in the interest of effective competition. If two insurers are competing and have access to filings, one insurer could simply wait for the other to file and then just barely undercut them. Nonpublic filing status means insurers, knowing a thriving market exists while unsure of what competitors are offering, must make initial proposals reflecting their honest valuation of the worth of a spot on the MNsure exchange, as opposed to waiting and marginally undercutting their competition. Vigorous competition is facilitated from the get-go.
There has been speculation about an exception where Commerce could disclose premium rates provided the specific insurers associated with those premiums aren’t revealed. However, the Department of Commerce nor the Dayton administration have expressed interest in doing so.
The state still has the potential for outcomes like Oregon, we’re just likely to see the process play out over an extended period of time. The MNsure Board of Directors selects exchange plans on an annual basis, meaning plans offered on the exchange in 2015 will be chosen by February 1st, 2014. It’s between October and then, after rates are publicly available, when competition will really kick in. Mix that with the ability for MNsure to place stricter requirements on exchange plans starting 2015, and the state has a real opportunity to make substantive improvements in both the quality and cost of health insurance.
What if you could live to be 100, remain mentally sharp, and avoid chronic disease through out it all?
Well for those living in one of the five “blue zones,” communities with the highest percentage of individuals living long full lives, this is a comparatively common experience.
Individuals from the Grecian island Ikaria, were found to be two and a half times more likely to reach age 90, lived approximately 10 years longer before getting cancer or cardiovascular disease, and have significantly lower rates of dementia than Americans.
So, what is the secret?
These five communities share nine features that Dan Buettner, the Minnesota-native author of ‘Blue Zones,’ argues are responsible for high concentrations of centenarians. Individuals in blue zones have a strong sense of purpose, utilize routines to minimize stress, eat less, have a bean heavy diet, drink moderately with friends, and exercise often through natural means such as yard work. They also tend to belong to a faith-based community, put their families first, and are surrounded by a healthy and supportive social circle.
What stands out amongst these nine features is the importance of community and social structure. That is why Albert Lea underwent the Blue Zone Vitality Project. They worked with Buettner on areas of healthy eating, exercise, sense of community, and purpose. Over the course of three years the average life expectancy increased by 3.1 years, they lost a collective 12,000 pounds, and city employee healthcare costs dropped by an astounding 40%.
Albert Lea is not the only Minnesotan community to undergo a dramatic transformation. Starting in 2012, Buettner worked with Salo, a Minnesota-based company. In just a year, Salo increased worker life expectancy by an average of 2.6 years. The changes were win-win, as lifestyle changes and boosted morale enabled Salo to increase their bottom line revenue by 19%.
The future is a bit grimmer for the rest of the country, however. Childhood obesity may cause today’s youth to be the first generation to have a shorter life expectancy than their parents. Like 80% of factors influencing average lifespan, obesity is based on lifestyle and is consequently largely influenced by one’s environment. According to the Framingham study, an individual’s chances of becoming obese increases by 57% when a friend is obese. However, like obesity, weight loss is influenced by community as well. The different blue zone projects give a model for creating a positive impact that could change this current trend.
If we are serious about securing the future of our youth, enabling our citizens to live longer happier lives, and cutting healthcare costs then it is time that we look to the preventive healthcare model illustrated by blue zone initiatives.
Minnesota is a national leader in the burgeoning field of palliative care, a holistic approach to medicine, and should seize its current momentum to strive toward further improvements.
Palliative care is a multidisciplinary field, incorporating traditional medical practices along with spiritual and social support, aimed at minimizing patient discomfort during treatment for serious or chronic conditions.
Palliative treatment has been shown to improve health outcomes. Palliative patients, when compared to traditional patients, report better pain management, a greater sense of well-being and dignity, and care more in line with personal preferences.
Part of the palliative process is discussing clear treatment goals with patients, thus reducing overutilization of unnecessary costly procedures with harsh side effects. An American Medical Association study found palliative patients on average saved between $1696 and $4908 compared to traditional patients. In context, studying one large not-for-profit hospital, the Journal of Palliative Medicine found daily mean costs of patients decreased 33% after receiving palliative intervention.
Minnesota, a regional innovator in the field, was one of only six states given an “A” by the Center to Advance Palliative Care and National Palliative Care Research Center 2011 Report Card; 89% of Minnesota hospitals with 50+ beds had palliative programs, and there were 347 Medicare deaths per certified palliative care physician, the lowest rate in the Midwest. The state’s health care system deserves praise for expediently investing in such effective care, only recognized as an accredited specialty in 2007.
Nevertheless, more can be done. The report also identified that only 37% of hospitals with fewer than 50 beds had palliative units. In 2008, the non-profit group Stratis Health assisted 10 rural communities in developing palliative programs. However, 35 different communities applied to receive aid, meaning 25 were rejected because they weren’t entirely prepared to optimally utilize resources from the initiative.
The state should work to support these remaining communities, whether it be through educating providers on best practices in palliative medicine, assisting communities in appropriating existing resources toward palliative programs, using data to understand specific community needs, or offering direct financial support in order to make foundational investments. Minnesota has made huge strides in palliative care, but we’re far from finished.
The Minnesota Supreme Court’s ruling in a recent malpractice case is a classic cough syrup remedy: it might taste a little bitter, but we’re better for it.
In late May, a 3-2 decision clarified its position on the “loss of chance” doctrine. The doctrine rules that doctors may now be charged for probabilistic harms rather than exclusively causal outcomes. For example, absent a “loss of chance” doctrine, doctors could not be penalized if a failure to expediently diagnose cancer lowered a patient’s chance of survival from 40% to 25%, given it was probable the patient would have died from the cancer regardless of the diagnosis timing.
In the dissent, Justice Dietzen warned that adopting a “loss of chance” doctrine would increase “defensive medicine,” or the over-treatment of patients to avoid a lawsuit. Research suggests Dietzen’s concern has merit. An established relationship exists where increases in liability raise doctors’ apprehension about lawsuits, leading to defensive practices with few discernible changes in quality.
However, it's important to put defensive medicine's cost in context. Tort reform groups trumpet these practices cost $46 billion annually. But with roughly $2.5 trillion in annual U.S. health expenditures, defensive medicine represents just 2% of cost, according to a Kaiser study. Furthermore, defensive practices' costs pale in comparison to the impact of fee-for-service payment schemes.
Defensive medicine is a minor expense in the grand scheme of things and something we must ultimately come to bear. When a patient goes in for a checkup, we expect a doctor will notice if the patient has an odd bump, a strange cough, or whatever it may be, and take thorough precautions to ensure it's nothing more serious. It would be unconscionable to think a doctor was not held responsible for negligence or inattentiveness toward patients when lives are at stake.
Some trade-offs in policy are inevitable, but the “loss of chance” doctrine has minimal impact on affordability in order to fulfill the basic assurance of quality treatment in health care.
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While the new Minnesota health insurance exchange, called MNsure, starts enrolling in just five months, many short and long-term structural decisions have yet to be made.
For instance, the MNsure Board of Directors will not have the authority to create more rigorous standards for insurer participation beyond minimum ACA requirements until 2015. Looking forward, early users and the board should bear in mind that an unregulated insurer free-for-all without significant quality-vetting on the exchange will negatively impact consumers.
A study by Health Services Research, a medical industry journal, found that when looking at seniors choosing Medicare Part D plans, seniors offered few options were more likely to identify cost-effective plans than those offered many options. As options increased, the selection process became too difficult and confusing for participants to meaningfully evaluate plans. This matches polling data showing seniors would prefer Medicare sort through Part D options and only present the best plans.
The conundrum of excess choice is magnified by the “inertia” problem: people buying health insurance rarely reevaluate their decisions, even as better options become available later. It is critical, therefore, that MNsure facilitates cost-effective decisions the first time consumers come to the exchange by thoroughly screening the plans buyers choose from.
Minnesota should embrace an “active-purchasing model” and negotiate with insurers on behalf of its citizens, selecting no more than 14 high-value plans total for the exchange.
Limiting the number of options could also substantially dampen rising premium costs. In Minnesota there are approximately 490,000 uninsured individuals, most qualifying for federal subsidies on the exchange, who have to buy insurance starting in 2014 due to the ACA individual mandate. This huge swath of new demand will leave insurers eager to offer a plan on the exchange. As insurers compete for a limited number of spots, they will lower premiums while still offering at least the Essential Health Benefits required by the ACA, if not more generous coverage.
California serves as a perfect anecdote for the cost-cutting capability of active purchasing. The state is currently offering only 13 plans on its exchange and premiums are coming in far below initial projections; insurers that won spots on the exchange offered plans with just 2% to 3% profit margins.
As Minnesota finalizes the MNsure Exchange, the state must embrace the unique leverage it currently has and create an exchange that works for the benefit of its citizens. A competitive selection process for plans on the MNsure Exchange will lower premiums and encourage cost-effective decision making among consumers, ultimately leading to a healthier Minnesota.
With much fanfare from public health advocates, the Minnesota legislature recently passed a supplemental budget featuring a tax increase on tobacco purchases amounting to an additional $1.60 per pack of cigarettes. The tax increase is estimated to generate approximately $430 million during its first two years and represents a much-needed revenue boost in light of an expected $30 million shortfall in the construction of the new Vikings stadium as well as larger structural deficits.
Unfortunately, the funds are necessarily short-term. Cigarette tax revenues will decrease over time as consumers respond to the increase in taxes and purchase fewer cigarettes. However, the tax's real benefit comes from a long-term decrease in smoking, which should yield a healthier Minnesota.
Tobacco consumption in Minnesota is a serious concern, with an estimated 16% of adults and nearly 26% of youth identifying as current smokers. Beyond the simple intuition that Minnesota does not want its residents and children smoking, these high levels have direct tangible costs to the state. Researchers from Pennsylvania State University estimated that, in terms of decreases in productivity, premature deaths, and direct medical expenditures, smoking costs Minnesota over $5 billion annually.
Fortunately, the new cigarette tax will do just that. After the 2000 publication of the Surgeon General’s Report on Reducing Tobacco Usage, it is a foregone conclusion that cigarette prices and consumption are negatively related; most economic literature shows a 10% increase in cigarette prices is associated with approximately a 4% decrease in cigarette consumption. Given that the average retail price for a pack of cigarettes in Minnesota in 2012 was $6.07, one could expect the new tax to yield a 10.5% decrease in cigarette consumption among the overall population. Furthermore, the Surgeon General’s report adds that the price effect may be two to three times larger among children than compared to the general population, suggesting greater gains for the most concerning population subset.
Cigarette usage places a huge burden on Minnesota, both in quantifiable expenses as well as less tangible moralistic concerns of future generations dying prematurely. The soon to be instituted cigarette tax will combat both of those issues by using price to disincentive cigarette consumption, in turn lowering the direct societal costs of tobacco while improving the health of current and future residents within the state.
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Spring cleaning gets a little more complicated each year, as more Minnesotan’s become environmentally conscious. No more can we just chuck those old cans of paint, oil, and other materials considered hazardous in the garbage. The same goes for our unused medications. Biologists have found flushing pills and other meds down the toilette can impact aquatic life.
Most local governments have responded with drop-off hazardous waste sites; so when you get those fliers from your town or county about where and how to dispose hazardous waste, read the handout before tossing it into the recycle bin.
Or even better, share it with neighbors, friends, or colleagues, like Ramsey County resident John Van Hecke did. A Ramsey County mailer he received about a free medicine drop-off inspired this blog. Last year’s mailer inspired the following video:
Here's a Google search with links to several Minnesota County drop-off sites.
Minnesota is busily preparing for the implementation of the Affordable Care Act. With rising health care costs, frustration with our health care delivery system and a rapidly aging population, it behooves us to ask: do we want a health care system that recognizes the importance of living at home and the people who make that possible, Minnesota’s home health aides?
In Minnesota, these workers are among the lowest paid in the health care industry. Not only are home health aides typically considered “elder sitters”—a vivid example of the undignified treatment seniors can experience—but it also devalues the important work done by home health aides that allows people to stay at home longer.
As of May 2011, the Occupational Employment Statistics from the Bureau of Labor Statistics reports that the 33,790 home health aides in the state of Minnesota earn an average hourly wage of $11.16. Compare that to the average rate Minnesota families pay to home health care agencies for home health aides: $25 per hour.
Home health aides will become more and more important as baby boomers continue to age and want to stay in their homes. The Minnesota Department of Health projects that by 2030, 1.2 million Minnesotans will be over 65 years of age or older, compared to approximately 600,000 at the beginning of the century. As expensive as it is, the in-home health care they provide keeps Medicare costs down. Other direct support for seniors and people with disabilities keep Medicaid cost down for the state and federal government.
Do we value the people who make living at home possible for the elderly and chronically ill? Do we value the elderly and chronically ill? During this session, the Minnesota Legislature has debated allowing personal care attendants and in home childcare workers to vote to unionize. Perhaps it’s time to encourage home health aides to organize as well.
By the end of this week Minnesota’s health insurance exchange legislation should be law.
Under the federal Affordable Care Act ("Obamacare"), states must create health insurance exchanges, which are online "marketplaces" that centralize multiple health insurance plans. Minnesota's exchange will serve an estimated 1.2 million people, including 300,000 new customers and millions, if not billions, in new sales.
No matter how our exchange is developed, the insurance industry wins.
Throughout the process, legislators have been under tremendous pressure to put the wishes of the insurance industry before those it serves: Minnesota's small businesses, their employees, and the individuals who need affordable, quality health care.
Although hard-fought, our exchange has moved in the direction of serving Minnesotans. The bill no longer allows those who will profit from our exchange to oversee it, and it now requires those making a profit from the exchange to cover the costs of doing business rather having taxpayers foot the bill.
Vital to our exchange is an "active purchaser" model. A clearing house model would have created an exchange that was little more than a free advertising site for the insurance industry.
As insurers compete for access to new customers, active purchasers can ensure our exchange has the best plans at the lowest price. We can also ensure ongoing quality improvement and cost-saving innovations. When a product ends up on a store shelf, it has been actively selected; not all products end up in all stores.
However, highly-paid lobbyists have convinced legislators to delay active purchaser. For a year or more, plans will be allowed into the exchange that meet minimal, static criteria. This threatens competition, which in turn means we may not get the best plans at the best price. It may also allow our exchange to be flooded. Market flooding is a gimmick to create so many choices that it becomes so time-consuming that choice becomes random; this lessens the need to compete on quality, price or other values.
The rational for an active purchaser hiatus seems fictitious: "It will cost insurers millions to create plans for the exchange." In reality, plans already exist and are already on private exchanges such as ehealthinsurance.com. These same plans can easily be placed onto our exchange.
To be fair, some legislators fought to have our exchange focus on the people it serves and stood up to a tidal wave of lobbyists. However, we now have to build our exchange without a vital component for a year. There are those who want anything related to "Obamacare," like our exchange, to fail and an exchange board and staff who will be attempting to make it work.
Audrey Britton is public affairs director for Small Business Minnesota, a statewide nonprofit, nonpartisan membership organization of small business owners. Learn more at smallbusinessmn.org.
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Some of the hardest-to-serve Minnesotans are the 1,300 who live in state-run residential facilities. These programs provide treatment and housing for people with chemical dependencies, mental illnesses, and developmental disabilities. Last week the Office of the Legislative Auditor issued a scathing review of how the Department of Human Services (DHS) manages their residential facilities. The report noted several major shortcomings that should be of concern to all of us, since our tax dollars fund these programs and our most vulnerable citizens reside in them.
The report devotes an entire chapter to the Minnesota Security Hospital in St. Peter, which serves up to 408 “mentally ill individuals who have committed crimes as a result of their illness or who have the potential to commit crimes while ill.” The report lists several concerns about the hospital’s leadership, security, treatment, and critical lack of staffing. One of the most interesting assertions is that the Security Hospital has a lot of patients who don’t need to be there.
For the majority of patients, the hospital’s goal is to improve the patient’s health enough for them to transfer to a less-restrictive setting. Unfortunately, the report found that the treatment provided is modest: patients average just 16 hours of scheduled activities each week, and only small portion of that is focused mental-health treatment. The hospital’s psychiatric team is critically understaffed and the majority of patients see a psychiatrist less than once a month. (There aren’t any standards of treatment regarding this frequency.)
For those who do manage to improve their health despite the dearth of treatment, discharge is a challenge. Administrators said that there are “likely dozens” of patients who are well enough to move out of the hospital, but that there isn’t anywhere else for them to go. “Once patients are at the Security Hospital, it has proven very difficult to find less restrictive treatment settings that will accept these patients after their acute psychiatric symptoms have abated. Patients who have been treated at the Security Hospital frequently have histories of criminal—even violent—behavior while under the influence of their mental illness.” In addition, county and state agencies often have a hard time figuring out how to pay for ongoing care. County human-services directors are well aware of the problem. 70 percent of them responding to a survey said “there are insufficient community-based resources for individuals awaiting discharge from the Security Hospital.”
Taxpayers foot much of the roughly $500 per day per Security Hospital patient cost (that’s a total of over $200,000 each day if the hospital is full). The knowledge that we’re spending this for people who could be successful--and potentially happier and healthier--in less-expensive community settings is concerning. Moving people out of the hospital would also make it easier to admit new patients needing critical care, some of whom are currently turned away. We’re keeping our healthier patients locked up while not providing treatment for those who are truly ill and dangerous.
The report didn’t delve too deeply into proposed solutions to this discharge issue. Some of the problem can likely be blamed on DHS’s shortcomings in this area. However, I also wonder if we’re all a little bit to blame for the lack of community-based treatment options for people with severe mental illness. I’ve seen that when service providers try to open new programs (such as group homes or small treatment centers) the community often opposes it. This “not in my backyard” mentality, when extended to everyone, leaves our vulnerable citizens with nowhere to go. This is yet another example of our penny-wise, pound-foolish approach to social services.
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