Michigan Offers Medicaid Incentives to Improve Health

1.
In the article below, Michigan is offering financial incentives to
improve health. Using economic model(s) demonstrate the
impact of such policy on efficiency of the medical care system.
Public Health & Policy
Michigan Ties Behavior Change to Medicaid
Published: Jun 12, 2014
By Phil Galewitz , Kaiser Health News
Delayed by state lawmakers, Michigan did not expand Medicaid
until the day after the federal online insurance exchange closed
March 31 -- a move advocates feared would undermine signups.
Turns out, enrollment is exceeding expectations, which has
pleased officials who seek to make the state among the first in
the nation to add a heavy dose of "personal responsibility" to
the federal-state entitlement program.
This spring, the Wolverine state became the second after Iowa
to offer lower premiums and cost-sharing to recipients who
agree to
do a health risk assessment with their doctor every year
and to commit to improve their health by taking steps such as
quitting smoking or losing weight.
"There is a heavy consumer engagement piece in this, both in
terms of finances and skin in the game, but also in terms of
healthy behaviors and really trying to find ways in which we
can make the population of Michigan healthier," Michigan
Medicaid Director Stephen Fitton said in a briefing in
Washington earlier this month. "We have a high obesity rate in
Michigan. We don't do very well on some broad [health]
measures, and we are really looking for ways to move the
needle there."
The hope is that giving people a financial incentive to change
their behaviors will improve their health and control Medicaid
spending.
Other states, such as Pennsylvania, are also seeking to tie

Medicaid coverage to personal responsibility by seeking federal
approval for a plan that would prod unemployed people to
search for jobs and get annual wellness exams in exchange for
lower premiums.
In an effort to give Medicaid recipients more "skin in the
game," as proponents call it, most newly eligible Michigan
recipients will face
copays -- typically from $1 to $3 for most outpatient health
services
. Those with incomes between 100 percent ($11,670) and 138
percent ($16,105) of the federal poverty level will also pay a
premium of 2% of their income.
While many states impose similar cost-sharing, Michigan will
be the first to ask enrollees to make those payments -- either
copays or premiums or both -- through a health savings account.
Indiana Gov. Mike Pence, a Republican, has also recently
proposed health savings accounts
as part of his Medicaid expansion plan.
Both the state of Michigan and individuals and potentially, their
employers, will be asked to deposit money into those accounts
based on enrollees' copays in the prior six months. If funds are
left at the end of the year, they will be rolled over. If a
beneficiary becomes ineligible for Medicaid, the balance will be
put into a voucher they can use to buy private insurance.
Joan Alker, executive director of the Georgetown University
Center for Children and Families, credits the state for using the
"carrot approach over the stick approach," but said there's little
evidence such incentives improve enrollees' health.
"We know from the employer world, this is very hard to do,"
she said.
She said the complexity will also make it harder for the state to
implement the plan. "The legislation adds a lot of red tape," she
said.
Enrollees with incomes above the poverty level who fill out
health assessment forms and commit to healthful practices can
reduce their premiums by half. Individuals with a $12,000

income, for instance, could cut their annual premium of $240 to
$120.
Enrollees with incomes below the poverty level won't pay a
premium though they are eligible for a $50 gift card if they
complete their assessment form and agree to improve their
health.
They don't have to meet specific health goals to qualify for
lower cost sharing or the $50 gift card beyond filling out the
assessment with their doctor once a year and attesting that they
will do such things as eating better, exercising more, or getting
a flu shot.
The state is still trying to decide what to do if a recipient fails
to contribute to the savings account. Losing Medicaid coverage
is not an option, said Michigan Medicaid spokeswoman Angela
Minicuci. The state is considering collecting unpaid
contributions through a lien on tax refunds.
Michigan did not expand Medicaid until April because the
legislature did not approve the move until last September, and
Republican opponents included a provision delaying the
implementation until at least 90 days after the lawmakers
adjourned their 2013 session.
Michigan is the 25th state
and one of eight led by Republican governors to expand the
program. Gov. Rick Snyder also waited to make sure the state's
online enrollment was working to avoid a repeat of the botched
federal exchange rollout.
Nonetheless, more than 270,000 low-income Michigan residents
have signed up for Medicaid since April 1 -- over half the
estimated 477,000 eligible for the program. The signup pace has
exceeded that of most of the 25 states that expanded Medicaid
in January, which benefited from the publicity surrounding the
open enrollment period for private plans. Unlike buying private
coverage, people can sign up for Medicaid any time.
"I was absolutely worried about the timing," said Conrad
Mallett Jr., chief administrative officer for Detroit Medical
Center, a large safety net hospital. He credits efforts by groups

such as the Salvation Army to boost enrollment. "In 99% of the
cases, poor people are just poor, not stupid -- they know what
this opportunity means in their lives."
Nearly all of those newly eligible for Medicaid will get their
coverage through a private Medicaid managed care plan. Health
plan officials say the risk assessment will help them identify
members who need help quitting smoking or, say, managing
their diabetes.
"We take this as an opportunity to engage with members," said
Patricia Graham, director of operations for Detroit-based
Meridian Health Plan. Her plan is also paying $25 to doctors as
incentives to get them to help their patients fill out the health
risk assessment and set some healthy behavior goals.
The state's safety-net hospitals that treat many poor and
uninsured patients are among the major beneficiaries of the
strong Medicaid enrollment. "This will have a significant effect
on Henry Ford Health System because every year we see our
uncompensated care rising," said Sharifa Alcendor, the
hospital's director of patient care management.
Alcendor, though, is concerned that hospitals and other
providers will get stuck with extra costs if enrollees don't pay
into the health savings accounts.
Michigan health officials said their enrollment efforts gained
from the publicity surrounding the Obamacare marketplace
enrollment so there was still huge demand when Medicaid
signups began in April. They also were able to switch 60,000
adults into Medicaid automatically on April 1 who had more
limited coverage in a state basic health insurance program.
Unlike a number of states such as California, which have a large
backlog of people waiting to get insurance cards, Michigan
officials say new enrollees have received their Medicaid cards
within weeks -- with coverage retroactive to first day of the
month they signed up.
"We've been pleasantly surprised that we could enroll this
amount of people in this short period of time," said Phillip
Bergquist, director of health center operations with the

Michigan Primary Care Association.
Like most northern states, Michigan officials benefited from a
culture where residents are used to having insurance, said Josh
Fangmeier, policy analyst at the University of Michigan's
Center for Healthcare Research & Transformation. Despite the
state's higher than average unemployment rate, its 13%
uninsured rate in 2012 was below the nation's 15.4 percent
average.
This article, which first appeared on June 11, 2014, was
produced in collaboration with
USA Today
. It was reprinted from
kaiserhealthnews.org
with permission from the Henry J. Kaiser Family Foundation.
Kaiser Health News
, an editorially independent news service, is a program of the
Kaiser Family Foundation, a nonprofit, nonpartisan health
policy research and communication organization not affiliated
with Kaiser Permanente.
2.
In the article below, suggestion has been made to integrate
urgent care centers with primary care physicians for seamless
medical care 24/7. Using economic model(s) discuss the
implications of such model on the medical care sector.
Doc-in-the-Box Meets Docs-Outside-the Box
By
Fred N. Pelzman, MD
During her annual physical exam, one of my patients recently
asked me, "Are urgent care centers any good, Dr. P?"
She recounted an incident a few months earlier where she awoke
with an acute illness and was sick enough that she felt she
needed to receive care -- at least some medical attention -- more
imminently than she could get from waiting to speak to my

office in the morning. She said she thought about calling the
answering service, but thought they would have told her to go to
the emergency department.
She woke with an incredibly high fever, but no other specific
localizing symptoms, and she went into an urgent care center
near her home. She reported it was a wonderful environment,
beautiful furnishings, soft music, comfortable chairs. She was
seen by a practitioner there who told her they thought she had
strep throat. They did a rapid strep test in the office, which was
negative, and told her they were going to give her an antibiotic,
and do another test which was sent to the lab for follow-up the
next day.
She said she was a little confused, but went home, filled the
prescription, started taking it, and called them as directed the
next morning. She said she reached them easily, they were very
polite on the phone, told her that her culture was negative, that
she should stop the antibiotic, and that she probably had a virus.
Now we know it is easy for us to second-guess someone's
clinical care. Someone working in an urgent care center sees
someone only for a brief snapshot, a single moment in time,
having no long-term relationship with the patient. The same is
true of emergency departments. They get to see someone only in
that slender window of opportunity when they are dropped into
their realm, and usually have no choice but to maximize to
optimize care.
A colleague of mine once said that it takes 30 seconds to give
someone a prescription, and 30 minutes not to give someone a
prescription.
We have all seen patients coming out of urgent care centers and
emergency departments with prescriptions for antibiotics that
were probably not necessary, and with opiate pain medicines
which we are then left to sort out whether they are needed. We
have also seen extensive scans and lab tests that we now need to
take care of and follow up on, that likely are not clinically
relevant.
I'm not saying that in the primary care setting our care is always

perfect, efficient, always evidence-based. We have all given
antibiotics for a cold (admit it, you know you have), and
ordered too many labs and scans because we could.
But these other settings, these alternatives to the primary care
office, serve an incredibly important and useful purpose, and
can become critical cogs in the healthcare team that we're trying
to build in the patient-centered medical home model.
We know that ideal care requires 24/7/365 access but, as we
know, none of us want to be on call 24 hours a day, 7 days a
week, 365 days a year.
I recently had a nearly perfect interaction with an urgent care
center and the staff who provided care. My patient was seen
there urgently late on a Friday night, and they actually followed
up with her 2 days later (then Sunday morning) and provided
ongoing, and appropriate, care for this clinical situation.
Monday morning I arrived in my office and received an email
communication from the provider at the center, detailing what
had happened, explaining their thought process, and
recommending follow-up with me.
For most of us busy primary care providers, after-hours care is
usually telephone care. It's hard for us to come into the office at
12:30 at night when a patient is sick and wants to be seen.
There certainly are exceptions to this, where we may come into
the emergency department to see a sick patient, but for many
things it is nice for patients have an option for walk-in care that
is safe, clinically rational, and available.
Wouldn't it be nice if the urgent care centers and emergency
departments became an integrated part of our team, rather than
us continuing the sometimes somewhat adversarial relationships
that currently exist between these different settings?
Having a safe after-hours location for our patients to receive
care, where their medical records were available to prevent
duplicated care and inappropriate care, as well as open lines of
communication, safe sharing of medical records and results, and
collegial relationships between providers, would create and
extend this wider model of team-based care.

In the emergency department, the paradigm is evaluate and
stabilize, and then a branch decision happens about whether to
admit or send home. At the time of discharge, a safe follow-up
plan needs to be arranged for patients, and this is often a
sticking point for the emergency department.
Recently our practice, in conjunction with our affiliated
emergency department, developed a plan to allow protected
next-day appointments at our practice for patients being sent
home from the emergency department, who need this urgent
interim care as a safe "conclusion" of their discharge plan.
We are "hanging" multiple appointments frozen in our next
day's schedule, on a website which the emergency department
physicians have access to. When they find an appropriate
patient who needs a next-day appointment in primary care, they
enter the patient's demographics, contact information,
medications, and plan, and our scheduler picks that up first
thing the next morning.
We are exploring ideas to enhance provider-to-provider
communication, so that a better and safer handoff can happen,
but for now a review of the discharge summary is all we've got.
We envision e-mail messaging, or even someday direct sign-out
through video chat. Anything to make the transition smoother.
As you can imagine, this has had some growing pains, as any
project like this usually does at the start. Patients who should
have been kept in the hospital were sent here to our practice.
Patients who have another outside primary care doctor who
should be able to see them the next day were sent here. Patients
who didn't need to come here the next day were sent here.
But we are learning, and we feel that this is a useful addition to
extended care for our patients, which will help keep them at the
center of care, and keep things from falling through the cracks.
In the idealized format, in a truly patient-centered medical
home, our patients would access these other sites for care, and
then care would flow back to us as appropriate. We hope that
this emergency department project helps optimize the
emergency department discharge process and provides for high-

quality, after-visit care. Next steps will be to work to enlist
local urgent care centers, but we need to build relationships
with these nonaffiliated sites as we move forward.
But an urgent need is clearly there.
3.
In the article below, innovative ideas are put to work in and
around Las Vegas for providing medical care. Using economic
model(s) discuss the intent of these innovations.
A Vegas Gamble: Doctor Builds a New Kind of Clinic in the
Desert
By
Kristina Fiore
, Staff Writer, MedPage Today, Produced by Peter Troast
For best viewing, click the bottom right corner for full screen.
LAS VEGAS -- On a Friday night in mid-May, part of Fremont
Street in Las Vegas is shut down and converted into a skate
park, with flanneled teens attempting tricks on ramps and rails.
Alternative rock band
Taking Back Sunday
is set to take a pop-up stage flanked by
Zappos.com
banners. Old industrial buildings converted into funky
restaurants host tech geeks and startup CEOs. Street murals
brighten drab concrete fences.
Here in the desert, there's a tech city vibe reminiscent of Seattle
or Silicon Valley, although it's probably the last place anyone
would expect such a thing. This party city of 2.5 million people
has never had much of a cultural identity before, especially not
in a downtown area that has long been considered a wasteland --
until
Zappos CEO Tony Hsieh
, known for his love of all things quirky, pumped $350 million

into a revitalization project to turn it all around.
And this is where
Zubin Damania, MD
-- perhaps better known as his Internet celebrity alter ego
ZDoggMD
-- wants to turn the tables on healthcare.
Damania is the CEO and founder of
TurnTable Health
, a direct-pay primary care clinic charged with keeping tabs on
the vital signs of this influx of talent. Hsieh recruited Damania
in 2011 to build the clinic from scratch after recognizing that
the ZDoggMD persona was fueled by a desire for change in the
U.S. healthcare system.
Damania, a hospitalist at Stanford University Medical Center at
the time, was hesitant: "When I first came to Vegas I was like,
how am I gonna build a clinic, I am a hospitalist and a very bad
rap artist, I have no skill set in this."
But he quickly found his focus: changing the culture of
medicine. He's putting his money on the idea that homing in on
"the things we went into medicine to do" -- building great
relationships, helping people -- could improve the healthcare
experience for both patients and providers.
There are plenty of challenges. What happens when patients
leave the clinic walls? Who covers their hospital bills? Is this
model scalable to other clinics? And he'll need some 4,000 to
5,000 patients to make the numbers work -- can downtown
attract the businesses and employees?
They're hard questions, but Damania has been given the
opportunity to think big in a place famous for drawing in
dreamers.
Putting the Heart Back in Medicine
Standing outside the TurnTable Health clinic on Bridger Avenue
in the heart of the revitalization district, you still see evidence
of a down-and-out village. There are the drunks, costumed
youth on Fremont Street, and rambunctious revelers loitering
around the old-time casinos.

But you'll also meet the 20-something fit blond runner who
walks into TurnTable to discuss membership.
The clinic has an open layout and lots of windows. On one end
is a kitchen where nutritionists teach healthy eating. There's a
community lobby -- not a waiting room -- equipped with cushy
chairs, ottomans dotted with Hampton links, and a Playstation.
On the other end is a yoga studio that doubles as a classroom
for all of the clinic's programs, including zumba, meditation,
and nutrition classes.
Members pay $80 a month for what Damania calls "all you can
treat" access to a buffet of care, which includes all of these
programs, as well as on-demand access to a doctor or health
coach.
Health coaches are the front line of the clinic. They're not nurse
practitioners or physician assistants. Instead, they've come from
various walks of life -- paramedics, yoga instructors,
accountants -- hoping to find a better way to connect with
people.
These coaches are screened for emotional intelligence and
empathy, because a big part of their job is to bond with
patients: go jogging with them, help them shop for groceries.
They're also available 24/7 to communicate with patients by
email, text, Skype, or phone.
The concept was developed by
Iora Health
, another startup company that TurnTable Health partnered with
to help define its culture. Iora currently has six of its own
practices with 10,000 patients and plans to have 13 by the end
of the year. Damania discovered them because they run the
Culinary Extra Clinic
, an office devoted to managing chronic disease, only two miles
away from TurnTable.
"You can't do this in a model where everything is billable and
codable," Alexander Packard, chief operating officer (COO) of
Iora Health, told
MedPage Today

. "You don't get paid for helping patients shop for groceries."
Packard said the company has 40 health coaches across the
country. "You can take someone with a huge heart and teach
them how to take vital signs and work with a doctor," he said.
"You hire for attitude and train for skills."
Matt Dallmann, president of
Creative Practice
Solution
s
, a practice management firm, said he hadn't heard of the idea of
letting health coaches be the gatekeepers of a primary care
clinic, but that the strategy could work to help keep overhead
costs manageable -- especially at an office that's catering
mostly to well patients.
Iora's model also includes a strong mental health component,
with social workers hired to do the heavy lifting. But health
coaches certainly lend an ear and can refer when necessary.
Patient stories are taken in clinic rooms where all members of
the healthcare team, including the health coaches and doctors,
sit around a table at eye-level, in front of a computer screen that
displays the patient's electronic health record, to make for a
transparent process.
"I can't write, 23-year-old drug seeker here for Vicodin,"
Damania said. "I have to write, we had an honest discussion

about narcotic abuse."
Physicians take the tough cases, and the ratio is one doctor for
every four health coaches; currently TurnTable has two doctors
and eight health coaches in addition to other support staff.
During a tour of the clinic, Damania seems particularly fond of
the "huddle room" where all of the members of the healthcare
team gather every morning to discuss the patients who are
coming in. They all know every patient. Electronic health
records are displayed on two large monitors at the front of the
room, with one screen dedicated to patients assigned a "worry
score" that requires some kind of preventive action.
Damania is also pleased to point out that there are no individual
doctors offices, since it's a non-hierarchical environment.
"It's a culture that all works together with the sole focus of
taking care of patients," Damania said.
Tony Hsieh's Culture Club
In his book
Delivering Happiness
, Hsieh tells the story of how the rush to sell his first company,
LinkExchange, deflated its sense of community. No one was
having any fun, and Hsieh promised himself he'd never let that
happen again. So once he took over as the CEO of Zappos, he
made sure he got the culture right from the start.
His belief that random, unplanned interactions between people
yield the most innovative results led to a $350 million cash

infusion into the Las Vegas downtown -- $200 million in real
estate, $50 million for small businesses, $50 million in
education, and $50 million for tech startups.
"Tony saw the opportunity to have a blank slate to create the
intense, population-dense, serendipitous interactions that drive
productivity, so he started investing his own money," Damania
explains. "He moved Zappos from the suburbs [to downtown],
which at the time many was thought was crazy, but which now
seems quite visionary."
Damania has had many discussions with Hsieh about changing
the culture of medicine: "His philosophy is that your career
should involve things that make you happy and effective."
People need to have a feeling that they have control and a stake
in what they're doing every day, and they also need to perceive
that they're making progress, he explained.
Both of those tenets feed into getting the culture right: "If you
get the culture right first, the rest falls into place with decent
business ideas," Damania said. "If you get the culture wrong,
you're constantly fighting against that headwind."
He didn't have any of those elements at his last job as a
hospitalist, and he expects many doctors today are familiar with
the feeling: ceding control to administrators and insurers, being
burned out from seeing too many patients in a fee-for-service
system set up to pay for quantity over quality.
Damania believes that changing that can make a difference for

both patients and providers -- and that the time is right for
doing so. The Affordable Care Act is pushing more preventive
care, and a more educated population of healthcare consumers is
looking to take a more active role in their care.
Although patients have more information than ever at their
fingertips, they still want that one person who can parse all of
that knowledge for them, Damania says: "We love the
empowered patient. We want them to be an active member of
the healthcare team. It makes us happier, and we feel we can
contribute in a way that's different from the paternalism of the
past."
Iora's Packard says research has shown that the empowered
patient has better health outcomes: "People who believe in
themselves and have the confidence [to manage their health] can
be part of making good choices instead of letting healthcare
happen to them. That patient does so much better."
It's buy-in from this type of patient that will make Damania's
vision work, Dallmann says. "Will you sign up for a year and
take a couple of classes, and then not go anymore?" He also
needs buy-in from the employers, which will be driven by
demand from employees.
"The first question is will he be able to get the companies on
board, and the second is will he be able to keep up the supply
based on demand," Dallman said. "A lot of models are similar to
what an insurance company does: they're looking for a premium

hoping a lot of people don't come in."
The answer hinges on whether Hsieh's vision to attract tech
startups and keep them thriving comes to fruition.
Getting the Buy-In
Some of the companies recruited to set up shop downtown are
buying in to Damania's ideas.
GoldSpike
, a former casino turned co-working space, has bought
TurnTable Health coverage for its employees, as has
Project100
, a car-sharing service, along with smaller businesses like local
restaurants and cafes.
"This is a tight community and we all understand the value of
being healthy," Damania says.
Although Zappo's hasn't signed up yet, Damania says parent
company Amazon is investigating the possibility.
TurnTable isn't just working with companies; it's also working
with insurers. It recently signed up
Nevada Health Co-Op
, a nonprofit insurance plan created as part of the Affordable
Care Act's state-based exchanges, to provide coverage under its
Neighborhood VIP plan
.
And it's not clear how the uninsured or underinsured patients fit
into the picture. "I don't see it as any low-income patient would

do it," Dallmann says. "It's great for millennials that want self-
actualization and to have yoga at work, but I don't think low-
income people will care."
Damania says the clinic treats the low-income walk-in free of
charge in the case of emergencies, but the team tries to stay
away from per-visit fees in general "since it's counter to our
model and distracts resources from our members' care."
He also acknowledges that another fundamental question is,
what happens to patients who need care outside of clinic walls?
With the Nevada Health Co-Op plan, patients get wrap-around
coverage, so they're covered if they need a trip to the
emergency room. And most employers also have additional
coverage on the plans they offer to employees -- so residents of
downtown Las Vegas aren't completely free of the burden of
dealing with insurance.
There's also the reality that not every doctor who wants to start
a direct-pay clinic gets millions to invest in a new office and a
new structure -- not to mention the guarantee of a burgeoning
patient community.
But Damania insists his method is translatable to the smaller
practice: "We went a bit overboard on our flagship facility, but
this can be done economically."
One key is in cutting overhead expenses. There's no billing of
insurance, which saves 10% to 30% of those costs, Damania
estimates.

Although doctors and health coaches are compensated with
competitive salaries and benefits, that cost is covered by the
membership fees. At $80 per person and an expected patient
population of 4,000 to 5,000 managed by three or four doctors
(at a ratio of four health coaches to every one doctor), Damania
calculates paying off capital expenses and becoming profitable
within 3 to 3.5 years.
It's an ambitious goal. Dallmann breaks it down: 5,000 patients
amounts to $4.8 million in revenue. That translates to seeing 96
new patients per week -- or 24 new patients each week for each
of the four doctors.
Since the clinic opened five months ago, TurnTable Health has
garnered 800 members. Roughly a third of those are from
partnerships with downtown businesses, half come from the
Nevada Health Co-Op, and the rest are individuals paying out of
pocket.
Fuel for the ZDogg Fire
Building out economies of scale can also help with costs,
Damania says. The goal is to be able to "run the Iora Health
software" like an app so that the model can easily be applied to
any clinic.
For now, Damania wants to continue to focus on culture in order
to continue to generate the necessary volume of patients.
Next steps would involve hiring TurnTable hospitalists to
extend the main clinic's culture into hospitals so that if a

TurnTable patient is admitted, he or she will be cared for by a
provider who not only shares the electronic health record, but
also the clinic's ethos.
"We don't want to become Kaiser, we don't want to own
hospitals," Damania says. "We just want to get the culture right
and extend it as far as we can."
If churning through patients isn't the main source of income,
how will the clinic stay afloat? Damania says patient
satisfaction will drive demand. If patients are happy, they'll stay
a member, or their health plans or employers will continue to
sign up.
And if it doesn't work out, Damania always has ZDoggMD to
fall back on. Frustration with a broken system
fueled those early videos
, and trying to start a clinic -- and possibly a new way of
approaching primary care altogether -- may provide plenty of
raw material.
But that doesn't seem to be the case just yet, so ZDogg may
have to lay low a little longer: "The problem since moving to
Vegas," Damania explains, "is that I'm doing something that
makes me so innately happy because I'm trying to effect change
in the system. So the fire from ZDogg had somewhat been
quenched."
It shouldn't be too hard to rekindle, though: "All it takes is one

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