Government Run Healthcare

Amid much discussion about healthcare and potential reform, the conversation often leads to the federal government’s role. It is worth considering the track record of federal health programs prior to deciding to hand over the entire healthcare system.  Our federal government currently commands four major realms of healthcare programs:  Medicare, Medicaid, Veterans Administration and Indian Health.

  • The VA health system is an abject disaster. Nine million veterans, those who served their country often at great cost, have been largely relegated to a scrap heap of substandard healthcare.   Centralized federal planning and bureaucratic fiefdoms have created a very illogical structure, low quality and a patient experience on par with Soviet-era food rationing.
  • Indian Health Services can best be described as sad – just ask any of the 3 million people “served” by it. Indian healthcare meets most third world health standards, and little more.  This is what happens when federal control triangulates with minimalistic funding and a recipient population with no voice.  Any “have nots” who think single-payer is the answer for them should take a look at Indian Health.
  • Medicaid functions well in many regards. Individual states work in compliance with federally directed parameters to provide health coverage to low income people.  The single biggest impact of Obamacare is that about 15 million people were added to Medicaid under its provisions, most of whom previously lacked coverage.  Interestingly, the majority of state governments opt to outsource the administration of Medicaid to large insurance companies like United Health Group.  The insurers (outsourcers), who are attuned to more sophisticated cost control than the government is, often ration healthcare through inconvenience in these outsourced Medicaid programs.  Said another way, they must follow government rules that generally purport to cover everything, but given funding limits, the outsourcers are left to pare back coverage by making it difficult to access.  So tricks like denying people who can’t walk access to a wheelchair via mountains of paperwork required or making a person place three calls and wait six weeks for an MRI, lead to peeling off 20% of the “demand” for healthcare.  It’s not a terrible system, it’s just not the type of coverage and treatment most of us are accustomed to with employer based health insurance.
  • Medicare is the immensely popular healthcare program for seniors. What’s not to love?  It is the Cadillac of health plans – very low out-of-pocket costs for participants, virtually no restrictions on coverage, broad networks of hospitals and physicians and little responsibility directed toward participants.  Medicare does place stringent cost controls on the fringes – homecare, non-physician healthcare, ER as examples – while placing virtually no controls over the huge costs of pharmaceuticals, procedure-based physicians and end of life healthcare expenditures.  Interestingly, the stakeholders with the most money get the least restrictive governance by Medicare – hmmmm.  For those who ask, “why can’t we all just be on Medicare or a Medicare like system?” the answer is that we can’t afford it.  It would significantly increase the cost of our healthcare system.  Medicare’s annual net cost to cover a beneficiary is three times that of private insurance.  Given the age discrepancies in the coverage pools, it is difficult to compare the two.  But, in the past ten years, when cost containment has become particularly important, Medicare has increased annual per beneficiary costs by $4,300 per person while private insurance has increased per person costs by only $2,000.  Additionally, single payer would likely take significant employer contributions and innovations out of the mix.  Further, it is worth noting that technology advances have driven costs out of most industries over the past two decades.  Healthcare, however, still utilizes many therapies, technologies and approaches which are twenty to sixty years old.  Medicare has done a very poor job in its role as an accelerant of innovation and technology in healthcare.

So while there are many aspects of single payer that are attractive, the government’s record of running healthcare programs is just not very good.  Buyer beware.

The Magic in Patient Experience

helping elderlyIn high school I worked in a grocery store.  One day I was bagging groceries, my first week, and the store manager came down out of his office, pulled me aside, put his arm around me and pointed to a lady walking out of the store.  “You see that lady?”  He said, “She’s got your paycheck in her purse.”

As a dumb 16 year-old I wondered why they gave my check to that lady I didn’t even know?  My Manager went on to explain that the lady could just as easily buy her groceries in other stores.   Greeting each customer, being friendly and helpful and thanking customers kept people coming to our store.  If they didn’t come back, he explained, there would be no work for me (us) and no paycheck.  I was fortunate to have that lesson stick with me.

A more recent boss taught me another important lesson.  Van Miller always made a point of telling us all, “Have Fun!”  Van liked to have a good time, so it would be easy to miss the point of Van’s “Have Fun” instruction.  While I know he did want us to have fun, his real desire was that each of our guests (customers) had the kind of experience which made a positive impact on them and which they remembered long after an encounter or event ended.  Van knew that customers like to be around people who are friendly and who are having fun – smiling, laughing, talking, welcoming, toasting and dancing.  It’s a very important part of creating an impactful experience.

The consumerization of healthcare is bringing patient experience into the forefront.  Patient experience will become the primary driver of winning business over the next few years.  The sad fact is that most healthcare providers – of all stripes – provide a really poor, or at best generic, customer experience.  Most healthcare folks are just not wired that way.  We have not been required to put the patient in the center of our world.  Patient experience includes the quality of care, explaining the therapy or treatment, exhibiting a sense of urgency and physical attributes of our care delivery setting.   But the centerpiece of patient experience is the individuals with whom the patient actually interacts.  Smiling, extending a hand, listening, solving a small problem, offering a caring ear, friendliness and creating a sense of inclusion are the things that will make a great patient experience.  Sure, curing their cancer is more important, but the fact is that doesn’t happen in very many patient encounters.

Each patient, in some way, has your paycheck in their purse or pocket.  They are our valued patients and friends, so treat them to an experience that leaves a lasting impression, including offering a smile and having a little fun!

Medical Equipment Industry Under Siege

chairHeartland 2017 is in the books.  It was another amazing experience in Waterloo.  More than five hundred home medical equipment providers spent several days learning, exploring new ideas, getting better at what they do, considering alternative methods, honing skills, networking, seeking best practices and having some fun.  We had the support of nearly 100 exceptional vendors who had innovative and compelling equipment and services to offer.  We also had the support of 75 great speakers and teachers to push the envelope and inspire us.  A state of the art Retail Training Lab was one extra special feature of this year’s Heartland.

But as the picture above shows, we had a couple empty chairs.  And that hurts.  Don’t get me wrong, attendance was excellent, which was a comfort given the challenging times facing the HME industry.  But some great people were not here.  Let me name two.  Thad Connally and Chuck Vetsch have been at most, if not all the past Heartlands.  Thad is one of our industries most strident advocates.  Chuck has gone above and beyond to meet the complex healthcare needs of people in rural Washington state.  These are two of the best men, and best friends, a person could have the privilege to know.  They are the first to extend a hand of help to anyone who might need it.  They were missed at Heartland 2017.  They stayed home, impacted by draconian cutbacks in reimbursement, to serve patients and operate their businesses.

Bad federal healthcare policy – developed and implemented by both elected officials and unelected bureaucrats – has had a huge negative impact on the home medical equipment industry.   In the past five years, 40% of all home medical equipment providers have disappeared from the cities and towns across America.  That’s 6,500 businesses gone.  In several states more than half of all healthcare equipment suppliers have disappeared as a direct result of horrible federal policy.  This forced consolidation and liquidation of an industry has had a hugely negative effect on tens of thousands of people who provide healthcare to our frail elderly and disabled populations.  Perhaps more importantly, it has had significant negative effects on several million people who rely on medical equipment, supplies and assistive technology to maintain a decent quality of life.  These frail elderly and disabled folks have far less access to healthcare than they had five years ago.  Fewer people are able to benefit from advanced home medical technologies.  Thousands have faced significant inconvenience of trying to coordinate care delivery through multiple suppliers.  Many people are being held in the hospital extra days awaiting medical equipment in their homes.  Quality of life has suffered.  Our elected officials in Washington must act and they must do it soon.  Failure to correct their mistakes will lead to even more severe deterioration of the home healthcare infrastructure in America.

TOP 12, EVENTS IN THE HISTORY OF WHEELCHAIRS AND THE PEOPLE WHO USE THEM – #1 – #12

 

 

Wheelchair Image

I offer my list of events in the timeline of wheelchair development, the acceptance of people in chairs and key milestones which forged people’s perceptions of wheelchairs and the people who use them.  Please join in the conversation – what’s on your list?

Image of Wheelchair Ramp

#1. Americans with Disabilities Act.

In 1990, Congress passed the comprehensive civil rights law addressing the rights of people with disabilities.  The ADA prohibits discrimination based on disability and requires reasonable accommodation to the disabled.  The original bill was introduced in the Senate by Iowa’s Tom Harkin and was signed into law by President George H.W. Bush.  The ADA has had a profound impact on workplaces, schools and public spaces – but not without controversy.  In the big picture, the ADA has brought millions with disabilities out of the shadows and into the mainstream leading to much higher quality of life for those with disabilities and a richer life experience for all.

Image of boy in wheelchair

#2. Superman in a wheelchair?

In 1995, actor Christopher Reeve, best known for his role as Superman, was paralyzed in a horse-related accident.  Reeve was a quadriplegic.  His fame and his determination to advocate for those who required the use of a wheelchair brought tremendous visibility to the cause.  In particular, Reeve’s efforts revealed the importance of complex rehab technology used in wheelchairs and the way it enabled users to pursue a high quality of life despite being confined to a wheelchair.

Image of couple in wheelchair

#3. Marilyn Hamilton and the Quickie Wheelchair.

In 1979, Marilyn Hamilton and two partners launched the Quickie wheelchair, a revolution in lightweight and fashion-forward chairs. Due to a hang-gliding accident, Hamilton became a T-12 paraplegic, but wasn’t willing to surrender her active lifestyle to partial paralysis. This Quickie chair was designed with an active lifestyle in mind but also, for the first time in a wheelchair, introduced a focus on design and visual appeal, in addition to enhanced freedom and movement. The Quickie represented wheelchairs and wheelchair users going on the offensive against paralysis – living an active, quality life regardless of any limitations. All the elements of the Quickie would be enhanced over time, but it was Hamilton’s vision that ignited a very big change.

Image of Student in wheelchair

#4. Judy Heumann overcomes bias and adversity to teach school.

Our Country’s treatment of people with disabilities has come a long way since Judy Heumann was forced out of school in the 1950’s. Her crime? She was confined to a wheelchair. With the help of persistent and dedicated parents, Judy got an education, graduated from college and qualified to become a teacher. She was very bright, articulate and caring. But the Board of Education refused to grant her a license to teach school because she had the audacity to be confined to a wheelchair. Her struggle ignited a passion to fight for the rights of people with disabilities and her efforts were instrumental in creation of two landmark laws, the Individuals with Disabilities Education Act (1975) and the Americans with Disabilities Act (1990). Today, people would not imagine this blatant discrimination, but in that era it was commonplace, which is why her battle to overcome it is in my top 10.

Person in wheelchair playing tennis

#5. Wheelchair developments make life more accessible

The ability to fully participate in the regular activities of life may be the holy grail for wheelchair users.  Recent engineering and technology advances have opened up the world to people using wheelchairs in a way that was never before possible.  One of the best examples is the standing powerchair, a product greatly enhanced and mainstreamed in recent years by Permobil.   Standing chairs offer clear health benefits such as pressure relief, advantages in bowel control and respiratory function.  But perhaps more importantly, standing and moving are life-changing.  Standing allows reach, function and social interaction which removes many barriers and equalizes in a way not before available to a wide range of wheelchair users.

Image of US Capitol

#6. Reduction in Reimbursement

Around the dawn of this century, Congress and bureaucrats from Medicare began a fifteen year run of reducing Medicare and insurance reimbursement for wheelchairs. This took various forms, including many steps to restrict access to wheelchairs and power mobility equipment and to reduce the amounts paid for wheelchairs. The effects of this multi-pronged effort was a reduction in the curve of innovation, a downgrading of the equipment available to wheelchair users and significant reduction in the number of people able to improve quality of life through wheelchair products. Some of this policy change was driven by a dramatic escalation in direct to consumer advertising which, on the positive side, made millions of people aware of how wheelchair technology could enhance their quality of life, but many payers and regulators took a negative view of the significant increase in the number of people using such medical devices. Bizarrely, Medicare, by policy, covers power wheelchairs used “inside the home” only. Policies created by the bureaucrats at Medicare don’t have to make sense, and often don’t.

Mobile Wheelchair Image

#7. Invacare’s First Power Wheelchair.

Invacare, led by maverick Mal Mixon, launched its first power wheelchair (the Rolls Arrow) into the marketplace in 1983. The chair was user-centric and was equipped with electronics, which were advanced for the time. That chair was the first of many advancements in power chairs brought to the market. More and better chairs would come, but this one spurred the market, drove innovation and led to a much greater focus on the needs of the wheelchair user.

Vote Buttons Image

#8. The 2016 U.S. Senate election in Illinois.

This contested election was between two candidates who are physically disabled, both of whom regularly use a wheelchair. Tammy Duckworth lost both her legs and partial use of her right arm in the line of duty after a helicopter she was piloting was shot down in Iraq in 2004. Mark Kirk, the incumbent Senator, suffered a massive stroke in 2012 leaving his left side partially paralyzed. Both candidates, understandably, downplayed the presence of their disabilities. Nonetheless, it is impossible to deny the historic nature of this race. Duckworth won the election and now represents Illinois in the US Senate.

image of couple in mall shopping

#9. The use of wheelchairs becomes “acceptable” in Popular Culture.

Pop culture is often a signal of changing societal norms and conventional wisdom. In the decade beginning in 2006, there was an emergence of people with disabilities, specifically those using a wheelchair, in our pop culture. A few of the key inflection points were:

* The hit TV show, Glee, which prominently featured a character in a chair.

* American Girl actively marketing a wheelchair accessory in its doll line as well as the first of its doll girls who had a disability.

* Barbie launching a wheelchair accessory.

* The ABC show Speechless, in which one of the characters uses a power chair and assistive speech technol

Presidential - Wheelchair Image

#10. Woodrow Wilson is first US President to rely on a wheelchair.

Wilson was a visionary president who ended the First World War and set in place strategic and diplomatic measures, which ultimately led to sustained peace and prosperity across the globe. Deteriorating health in the latter part of his presidency resulted in Wilson’s reliance on a wheelchair. Both the norms of the era and the limitations on media allowed his wheelchair usage to be largely concealed from the public. A protégé of Wilson’s would later become President and he also required a wheelchair for mobility. Franklin Roosevelt, like Wilson, concealed his wheelchair usage. The longer-term impact of Roosevelt was an acknowledgement and acceptance of people in wheelchairs – but it started with Wilson.

Image of woman in wheelchair with daughter

#11. Jeff Minnebraker builds the first ultra-lightweight wheelchair.

In 1975 Minnebraker built a chair to specifically fit his body, disability and lifestyle. In the 1970’s and early 1980’s, University of California-Berkeley was the hub of an independent living movement. People with mobility disabilities leveraged that hub to integrate into a community. Minnebraker’s Berkeley Power Chair emerged from that community. It never became a commercially available product, but it was an important breakthrough establishing means to meet the needs of the wheelchair bound person demanding an increasing level of independence.

Couple in wheelchair hugging

12. Color in wheelchairs

Color has nothing to do with function, so why would it be a top 12 development in wheelchairs?  For people who rely on a wheelchair to get around, the chair is their car, their desk and their house in many ways.  It’s the place they spend most of their time.  And it’s a first impression.  Just as Steve Jobs brought color to the computer, which then led to advances in style, color in wheelchairs has done the same.  This is especially important for children confined to a wheelchair.  We all have an innate need to belong, and in this context color can help.

 

Forced Consolidation Damaging Healthcare

Image of Elderly person's hands on cane

Flawed federal government policies are forcing a dramatic consolidation of healthcare providers across the nation.  This consolidation is greatly reducing competition among providers, reducing patient choice and severely limiting patient access to needed healthcare.  The most significant consolidation is occurring in homecare and home medical equipment, where government policies have been particularly aggressive in forcing consolidation.

SEE BELOW FOR COUNT OF LOST MEDICAL EQUIPMENT STORES BY STATE

In the past three and a half years, the number of home medical equipment suppliers and the number of locations has declined by 38%.  This is a staggering downsizing of suppliers in any environment.  This consolidation is even more egregious when considered in the context of a growing population of seniors brought on by the aging of the baby boom generation. The frail elderly and the disabled are the populations which rely upon home medical equipment suppliers to maintain quality of life.  Consolidation is occurring across the healthcare continuum.  Over the past five years, hospital system consolidation has occurred at higher rate than in any other five year period in history.  Over the three year period from 2012 to 2015, 12% of all physicians in the US went from an independent practice to being employed by a health system.  That’s 46,000 docs consolidating into health systems in just three years.

Drilling deeper into the home medical equipment consolidation provides a clear correlation between federal policy on the inaccurately named competitive bidding and consolidation.  In the 10 most populous states, where competitive bidding is focused, there was a 47% reduction in the number of HME suppliers over three and a half years.  In the fifteen lowest population states, where competitive bidding was largely absent, there was an 18% reduction in suppliers over the same period.  That tells us that a combination of federal policy changes and economic realities caused a significant consolidation, 18%, in home medical equipment suppliers.  But further, competitive bidding alone, the most deeply flawed of policies, caused a consolidation of nearly 30% of supplier in impacted areas.  And to be clear, that’s a consolidation over a very short window of 42 months.

Consider this, New Jersey, California, New York, Illinois and Connecticut each lost over half of their HME locations in just 42 months.  In the 15 least populated states, more than 200 HME business locations have shuttered in this same short period.  That means over 200 rural communities lost their access to a medical equipment supplier.

Competition is good for the consumer, it gives them choice and it forces competitors to provide exactly the things consumers want in order to win their trust and their business.  Consolidation eliminates competition and eliminates patient choice.  It has robbed patients of local access as many communities that once had access to providers no longer have that local access.  We must all advocate for reversal of federal and state policies which force consolidation and harm providers and patients.

Store locations LOST in just 42 months

Large States

California                  734
New York                  656
Texas                          493
Florida                       387
New Jersey               288
Illinois                       392

South

Tennessee                169
Alabama                    58
Mississippi                54
Arkansas                    55
Georgia                      291
South Carolina         84
North Carolina         29
Virginia                       115

Industrial Midwest

Michigan                    236
Ohio                            262
Wisconsin                  76
Indiana                       95
Minnesota                76
Iowa                            45

Great Plains

Nebraska                   28
Kansas                        59
South Dakota           9
North Dakota           3

Pacific Northwest

Washington              69
Oregon                       56
Idaho                          24
Montana                   15

 

 

The Power of NEW

Image of Little Girl with Chalkboard Sign

NEW.  “NEW” is an important element in building a vibrant and lasting HME or O&P business.  Without NEW your business is slowly dying.  If you are interested in building value over the medium or longer term, you must seek to inject an element of NEW in your revenue streams.

Netflix offers us an example of NEW that we can all get our heads around.  Netflix spends an enormous amount of money on developing original programming (NEW).  Most of their content is movies and shows developed by others.  They also have a tremendous library of their own original content, developed in the past.  If they were to stop spending on NEW content today, their expenses in 2017 would go down dramatically and their earnings would rise a commensurate amount.  Their 2018 year would be similar.  Netflix financial results would be much better over the next two years if they stopped spending on NEW.  But by 2019 they would start to experience decline.  The loss of a NEW pipeline in 2017 and 2018 would impact revenue in 2019.  By 2020 Netflix, without the NEW content developed in 2017 and 2018, would experience an accelerating decline.  I doubt they would survive to the end of 2021. They are better off tomorrow without NEW, but over the medium term, they die without NEW.  You’re not all that much different.

NEW usually does not help profitability in the year it happens.  Often not even the next year.  But NEW is the fuel of future revenue.  Fuel of a vibrant enterprise.  Fuel of profits to come.  NEW comes in several forms for HME and O&P.  A new referral source.  A contract with an additional payer.  A facility not previously served.  Selling on-line.  Product and service lines not previously offered.  There are so many possibilities in NEW, from Philip’s non-invasive ventilation to Afflovest to Rifton’s Tram to Incrediwear’s compression sleeves.  The possibilities of NEW in our business are nearly endless.

All revenue sources follow a curve based on the laws of economics.  At their outset, NEW revenues usually have a lower profit contribution than our old favorites.  Entry costs, lower volumes, resistance and failure rates ensure this.  But over time profit contribution grows.  At the same time, OLD revenues, which tend to be your highest profit contributors, usually settle into a pattern of slow and steady decline, victims of the steady march of commoditization, aging technology and loss of energy.   Don’t abandon OLD.  OLD is your friend and will be almost all of your profit this year.   But you need to invest in NEW this year so that in 2019 and 2020 your business remains vibrant.  I challenge you to make NEW revenues 5% or more of your 2017 revenues.  If you do this every year, you’ll have the right mix of high-profit OLD and high-future-profit NEW to sustain your success.

 

Washington DC HME and O&P

What HME and O&P can expect in Washington in 2017?

We are two weeks away from a Trump administration along with strong Republican majorities in both Houses of Congress. What can we expect in the post-acute healthcare world, including in HME and O&P? Here are my New Year’s prognostications:

  • Obamacare will be largely repealed. I don’t see how the Republicans can do much short of repeal. They’ve preached repeal for the 7 years since Obama signed it into law. Their base has been conditioned to expect it. Many members of Congress are reluctant to repeal given the complexities and potential consequences of repeal. I expect them to repeal and replace with a very limited set of provisions such as allowing young people to stay on parents’ health plans and some protection for pre-existing conditions. Many of their “new” health policies will be punted down the road a few years.
  • Fewer people will have health insurance. The big threat to providers involving Obamacare repeal is the impact on the number of insured Americans. Consider two facts which loom large. First, today 17 million more people have health insurance than had it prior to Obamacare. Second, people with health insurance utilize twice as much healthcare as those without health insurance and their providers get paid for that care. The increase in people insured has had a positive impact on DMEPOS suppliers and the impending reduction in the number of insureds will have a negative impact on DMEPOS suppliers. The significance of that impact will depend upon the severity of the reduction in those with insurance.
  • Medicaid reductions pose a significant threat to DMEPOS suppliers and users. The majority of the people who gained health insurance as a result of Obamacare came from additions to the Medicaid ranks. Further, nearly 60% of the disabled population gets health insurance from a public plan, such as Medicaid. Compare that to 25% of the non-disabled population age 65 and under. People with disabilities, and those serving their healthcare needs, depend upon a strong Medicaid system. There will be reductions in the number of people covered under Medicaid, but the extent of those reductions will determine the net effect of repeal on DMEPOS suppliers and beneficiaries. This is the key issue in “repeal”.
  • Price to HHS is a positive. Georgia Congressman Tom Price as a cabinet member running HHS (which includes CMS) is a welcome development. In Price we have a person who understands healthcare delivery from a provider perspective (former orthopedic surgeon), understands DMEPOS and the people who use it. Too often the Obama Administration viewed profit motive in healthcare to be an evil in need of elimination. That thinking leaves behind a legacy of 40% reduction in the number of HME suppliers, lower profit in DMEPOS and a dramatic reduction in access to necessary medical equipment and assistive technology for the frail elderly and disabled populations. Price will be a huge improvement.
  • We have a real shot at reform of the falsely named “Competitive Bidding.”  We know the program isn’t working and a lot of folks in the Beltway now understand this also.  A 40% reduction in HME suppliers over the past 5 years has limited access to needed medical equipment and assistive technology, and obviously crushed businesses.  I expect to see modest reform.  But don’t get crazy – we won’t see large increase in reimbursement, but rather reform around the edges and correction of the most egregious elements.
  • New products will be an important part of the equation for DMEPOS suppliers and beneficiaries. The importance of new products in the DMEPOS business model will increase in coming years. Look for a change in philosophy at FDA and CMS away from being a safe keeper to much more of a facilitator of new products and technology. Smart suppliers of DMEPOS will capitalize on the flow of new products.
  • Growing consumerism and out-of-pocket obligations. Republican plans will likely lead to even more health plans where consumers pay large amounts out of their own pocket. This will occur in private plans and to a lesser extent in Medicaid. Higher co-pays and deductibles are problematic for healthcare providers. DMEPOS suppliers will need to get better at billing and collecting from consumers. Further, suppliers need to be more patient-centric and get better at presenting health solutions directly to patients and their families.