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    September 16, 2021

    CMS’ Anti-Gravity Pen

    It stinks when facts get in the way of a good story.  As I prepared to write today’s post, I knew the lead-in that I would use, a perfect set-up for my point today.  Except that the story is not true at all; just an old apocryphal tale that lives in the fertile soil of the internet.

    NASA did not spend millions, much less billions, developing an ink pen that would write in space even as the oh-so-smart Russian cosmonauts laughed at us while using a cheap pencil.

    Real truth: Pencils are problems (flammable…not good in an environment that is at times 100% oxygen; floating broken lead pieces not a good idea).  A private pen company did spend about $1M of its own money to develop an anti-gravity pen that both countries used – at a price of about $2.39 per pen.

    But, dang it, were this story true it would be perfect here. And since I have no better idea, let’s just pretend it is.  My kids will tell you I make up crap all the time, so nothing new here.

    Last week, we noted the 2020 results of the Medicare Shared Savings Program, the largest of the government’s value-based care initiatives.  After years of sputtering outcomes, MSSP saved $4.1B, a net of $1.9 billion to CMS after the bonuses were paid out to the participating ACOs.  A couple billion is nothing to sneeze at, but it has taken a lot of work to make that happen.

    In the meantime, UnitedHealth Group released a study about how much could be saved if we moved simple, common surgical procedures from hospital outpatient departments (HOPD) to ambulatory surgery centers (ASC).

    Disclosure: Yes, UHG has not one, but two dogs in this hunt.  They are not only a payer, but also the owner of a lot of ASCs.  But you can be biased and still be right.

    Common procedures done in the HOPD setting in 2019 cost, on average, $7,716 each.  The same procedures in an ASC averaged $3,157, a savings of over $4,500 for each case.

    There are over 6 million outpatient procedures done in HOPDs each year and only about 10% of them are for complex patients (e.g., morbid obesity, multiple comorbidities, etc.) that should be kept close to a hospital, just in case.

    Do any math you want –how many of those are Medicare patients, how many move to the ASC – and you quickly get a number that blows way past $2 billion.  Just by moving routine same day surgeries from the HOPD to an ASC.

    See? The NASA pen story would have been perfect…millions spent developing a pen vs. just using a school child’s #2 pencil.

    Though the NASA story is not true, unfortunately the ACO/MSSP story is.

    How about we do the easy thing first?

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    September 9, 2021

    Barely Counts

    There is an old golf joke…

    The hacker stood over his ball in the middle of the fairway, eying the green, and asks his caddie if he can get there if he hits a six-iron. ‘Eventually,’ the caddie replies.

    If you don’t get the joke, it means that you’ve had a more productive life and not wasted endless hours chasing the little white ball around.  I’d tell you to ask a golfer to explain, but then you’d be back to the wasted hours problem because they would explain it…and explain it.

    Let’s just say it is a sarcastic mockery of slow incrementalism.

    And since we are fans – lo, advanced practitioners, even – of the fine art of sarcasm, let’s take this opportunity to assume the role of the caddy in this joke and check in on the Medicare Shared Savings Program (MSSP).

    Recently, CMS released the 2020 MSSP results and was breathless in celebrating the progress of the ACO model, the largest of the various Medicare alternative payment models (code phrase for ‘value-based care’).  However, the victory lap was a little muted because 2020 results really belong to the Twitter Man with the Weird Hair, not Uncle Joe.

    First the facts.

    517 ACOs participating in the MSSP collectively saved $4.1 billion in 2020, the highest annual savings to date.  Quality scores were high – 97.8% of a possible 100.  This was up from a savings of $1.9 billion in 2019, so there was significant progress.

    Now, a little context that press releases tend to skip.

    $4.1 billion is about one-half of one percent of the total $776 billion that Medicare spent.  It is the equivalent of the average family finding $3.50 in the couch each week.  Get a cup of coffee on Mondays, but don’t go shopping for a TV.

    But even that number is cheating, sort of like our golfer not counting his penalty shots. See, CMS returned $2.2 billion of that to the ACOs as their incentive bonus, meaning the taxpayers saved $1.9 billion.

    We’ll take every billion through the back door we can since dollars are going out the front dollar by the trillions, but can this six-iron, which we hit only a few yards at a time, ever bend the cost curve?

    Eventually, maybe.

    Or maybe not.  Inflation is faster up than the savings are down.

    Here is a better idea: Keep the program going long enough for the Baby Boomers to all die, which will actually lower our spending, and then let VBC take credit.

    That will be tricky because a bunch of ACOs bailed and did not sign up for 2021, saying the effort is not worth the reward.  Team Biden blames Trump for changes to the ACO program. I guess we’ll see what the 2022 sign-ups look like.

    Not sure how that all squares with the Biden administration’s goal of getting all CMS beneficiaries into a VBC program. But they will get there.


    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    September 2, 2021

    Be There in ‘About in Hour’

    Anyone who has ever loaded the family into the car for a road trip knows that eventually the excitement of the adventure gives way to boredom, and you hear from the backseat, ‘How much longer until we get there?’

    Unless ‘there’ is actually in view, the only correct answer to the question is, ‘In about an hour.’  A four-year old has no idea what 276 miles means and would have a total meltdown if you told the truth about how much longer it will be.  They have a vague sense that an hour is long, but not an eternity.  And when they ask the question again in 20 minutes, which they will, you say ‘about an hour’ again and remind them that it was just a minute since you asked last time.  You then distract them and point out a cow, which resets their mental clock, and you do the whole bit again later.

    So, your docs ask, ‘when will we get to this value-based care thing?’

    ‘In about an hour.  Don’t worry about it.  Eat some Goldfish and keep playing your fee-for-service video game.’

    The VBC parents are taking approach.

    Since ObamaCare set this in motion, they keep telling the specialty physicians in backseat that we are getting close, buying time for the miles to go by until, yes, we really are almost there.

    One session at the conference I attended last week had a couple senior Biden officials from the Centers for Medicare and Medicaid Services (CMS).  They were also alums from the Obama administration, so but for that little four-year lunch stop, they’ve been driving this car for a long time now.  After the coronavirus discussion, the moderator asked what their boss had as his top priority for them – presuming the pesky COVID surge and Afghanistan stop interrupting.

    It is the same goal as his old boss had for them 12 years ago.  Push everyone toward VBC and tell the backseat, with enthusiasm, that we’ll be there in about an hour.  Specifically, the administration’s top priority for CMS is to get every Medicare, Medicaid, and CHIP beneficiary into some form of ‘managed’ care.

    Let’s put that in context.  Of the 331 million Americans, 144 million are covered by one of the CMS programs. Over 60% of those are already in some VBC program – Medicare Advantage, a Medicare ACO, a state-level managed Medicaid program.  That is sneaking up on 30% of the whole country.

    The thing about this approach is that, eventually, your answer is true, a prophecy based on your confidence that one mile after another eventually turns into real progress. At some point, we really are about an hour away.

    There are a lot of implications for practices that are still mostly, if not entirely, fee-for service.  You probably will still be for some long time to come, but that Medicare claim you sent will increasingly not be paid by Medicare, but some risk-bearing entity sitting between you and Medicare.  And that is where things start to change.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    August 27, 2021

    Stalking the Comfortable Shoes

    As I mentioned a couple of weeks ago, I am currently at this big healthcare conference.  Big deal, lots of movers and shakers – people who work for the White House, lots of ‘C’ titles from the biggest companies in our industry. My lame responses when asked what I do is either ‘We are plumbers,’ or ‘I am vying for the title of most boring company here.’

    Revenue cycle management services? For claims?  Really?

    In all seriousness, this has been insightful and very helpful.  Besides the big dogs, there are a lot of entrepreneurs of all shapes and sizes that are in the game, taking a whack at trying to solve some specific problem.  The game is changing – at the policy level, the shifting strategies of the giants, the tons of innovations happening all over the place. Having good conversations that inform, challenge and provoke.

    But the best ones, without question, are the old dudes, the salty dogs that have been doing this stuff for a long time and have to wisdom to sort through the hype and point to what matters.

    Apparently, if you have a new idea, you must wear expensive and hip shoes.  So, I was looking at feet before name tags, stalking the people who pick comfort over fashion.

    One of the best of these conversations was with a guy who runs a pretty decent-sized company that allows physician groups and health systems to take full-risk contracts.  He is deep into the ‘value’ of ‘value-based care’ as you can get – he is on the hook for 100% of the healthcare cost for a couple hundred thousand people.  And he has been doing it for a couple of decades.

    More than once he willingly laid bare ‘one of the dirty little secrets of value-based care,’ calling BS on the hype and instead of talking about what was really helping move the needle, what was still a work in progress.  It was one of those types of discussions.

    When I laid my ‘we’re plumbers’ line on him I sort of expected the ‘you’re a dead man walking’ eye roll I had gotten from some of the VBC evangelists but was pleasantly surprised to the contrary.  ‘Oh, you are in a great spot.  Claims aren’t going anywhere.  It may be folks like me paying your docs instead of United or Anthem, but we’re going to be using fee-for-service specialists forever.’

    Maybe I liked him because he validated my worldview.  Maybe it was because neither one of us was wearing pointy-toed Italian loafers.  But even after swimming in the deep end of the vision of the future pool for a couple of days, I still hold that to be true.  Some changes are needed, sure, but I still believe the predicted death of how most of our clients operate is hooey.

    More thoughts from the confab next time.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    August 19, 2021

    Lot of Burger Joints

    I hope my primary care physician is not reading this, but I must confess that I enjoy cheeseburgers far more than I should.  Years ago, my friend said his life goal was to find the world’s best burrito.  Maybe mine is to find the perfect cheeseburger.  So, every time I see a new burger place going up, I make a note to add it to the list – in the name of science, of course.

    But the armchair economist and strategy nerd who lives inside my head also wonders about the burger business.  I mean, just how many burger places does a neighborhood need?  Can they all work? How do you create differentiation? What happens to margins?  And what do the small players do when In-and-Out comes into the market – as they are their very long drive-through lines have recently done in Denver?

    Do we really need more burger restaurants? Even I think maybe not.

    Then there is the little American Indian place not far from my house – think Chipotle but with fry bread and braised bison – that is awesome but doesn’t need to have cops directing traffic to the waiting lots BEFORE getting into the long drive-through line.  And they are the only American Indian game around.

    The glut of burger joints feels a whole lot like the massive land rush of players into the low acuity end of healthcare.  Retail players like Walmart and CVS providing walk-in care, worksite clinics, telemedicine providers at every turn…just to name a few.

    If you are a tech company that wants into healthcare, you build an app because that is what you know.  If you are an investor salivating over healthcare’s one-fifth of the economy, you are probably listening to pitches from entrepreneurs and inventors that have something delivered via a screen that is going to revolutionize this or that part of healthcare.

    But most of these ideas are trying to crowd into the low acuity segment of healthcare, aren’t they?  As with burgers vs. Osage hominy, there is just a lot bigger market for one than the other.

    We can guess on what might happen in the low acuity world based on what always happens with this story: there will be a lot of disruption; many of the great ideas will fail miserably; dozens of ‘me, too’ copycats will emerge and then die; tons of investment capital will be destroyed, but because a few will go to the moon money will continue to pour in; great small players will get crushed by the big guys just because size often wins when customers come to know and trust the brand.

    Our concern here is physician practices, some of which rely on, at least in part, lower acuity care.  If this is part of your practice – and it doesn’t take much to make it matter – you better get after new strategies in a hurry because the onslaught is coming, and it will bring a race to the bottom in terms of pricing.

    Have a burger as you contemplate.  It will help your thinking.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    August 12, 2021

    Breathless Bios

    Anyone trying to help their young teenager manage the frequently brutal world of social media knows that they are often up against a carefully curated, perfectly staged, subtly backlit, and maybe even touched up image staring out from your child’s phone, putting a finger in their chest, telling them they are not good enough.   Your kid has been in front of the mirror for half an hour, obsessing on a microscopic pre-zit that a dermatologist couldn’t find with the Hubble telescope and wondering why their left ear might be a skosh bigger than the right, when the ding comes.  ‘That girl’ has posted another photo that makes her look like the next supermodel, even though everyone has seen the real her in gym class.


    Adults are no different.  Really. Let’s be honest.

    I am getting ready to head to some big ‘remaking the world of healthcare’ conference (maybe…we’ll see what delta, the variant – not the airline, has to say).  A real bunch of big shots on the platform.

    Things being modern and everything, there is an online app where you can stalk other attendees and request meetings in advance.  I am a married guy, but the best I can guess is some swap left/swap right hook-up thing for oh-so-important business networkers.  This is one of the reasons to head back to a conference, so I spent some time reading profiles, wondering who I should try to meet.

    No one, I think.  I have zits, they are quarterbacks and prom queens.  I’ll just stand in the corner and eat hors d’oeuvres.

    Everyone not already running a massive organization has a bio that would make you weep.  Without fail, they have a vision, a mission, a calling, a divine appointment to do for healthcare what Steve and Bill and Elon and Zuck did for their whatevers.

    I am just a plumber; we’re a piddly little RCM company that turns claims into cash for our clients. Fee-for-service style, even.

    Pushing through the bruised self-esteem, I read a lot of the profiles, and something jumped out at me.  Everyone and I mean everyone, was going to change the world and fix healthcare (and take all our trash to Pluto along the way) in one of about three ways.  They were a value-based care, full risk player, mostly for seniors.  Or they were doing something around direct primary care.  Or they were going to do everything via your phone.

    So, the cool kids will all be at one of those three parties.  And that is where most people – the innovators, the disruptors – especially the outsiders, are focused.  Good for them.

    In the meantime, a lot of physicians are out there doing what they have always done – taking care of the patient right in front of them, one at a time, face to face, hands-on.

    We still need that.

    And they still need plumbers, so we’ll be there to help.

    But can I get some more of those little ‘shrimp on toast’ things?

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.