Will Proposed Changes to the Hospital Readmissions Reduction Program Save Safety-Net Hospitals From Further Penalties? | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Will Proposed Changes to the Hospital Readmissions Reduction Program Save Safety-Net Hospitals From Further Penalties?

July 20, 2017
by Rajiv Leventhal
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Industry leaders review a recent CMS rule and how it might make things fairer for hospitals that serve low-income and clinically complex patient populations

In April, the Centers for Medicare and Medicaid Services (CMS) proposed a rule that included in it an important change in how hospitals would be scored within the Hospital Readmissions Reduction Program (HRRP).

The rule, which would take effect in FY 2019, would require Medicare to consider social risk factors when calculating hospital penalties under the HRRP, as mandated by the 21st Century Cures Act. This modification was something that healthcare stakeholders have long been calling for, as they attest that the HRRP disproportionately penalizes institutions that serve low-income and clinically complex patient populations.

Historically, HRRP, since it began in 2013, has assessed readmissions rates for certain conditions and has penalized those hospitals whose patients had higher readmission rates than would be expected. But, the readmission rates used in the program have not accounted for the demographics of a hospital's patient population. Then came the Cures Act, which mandated that HRRP begin to account for patients' socioeconomic status in its assessment of readmissions performance.

According to an Advisory Board analysis of the April CMS rule, the federal agency “intends to sort hospitals into five peer groups according to their dual-eligible inpatient stay ratio. Within each peer group, hospitals' excess readmission ratio for each of the program's six conditions will be compared to the group's median excess readmission ratio for that condition. The proposed change, which is designed to be budget-neutral for Medicare, would shake up the magnitude of HRRP penalties, especially for some safety-net hospitals.”

Indeed, as further noted in a rule analysis from The BDO Center for Healthcare Excellence & Innovation, a consulting firm dedicated to helping healthcare organizations achieve optimal clinical and financial performance, “Dual-eligible patients are historically more expensive for hospitals, skewing the readmissions figures for safety-net hospitals, leading to unfair penalties against them and inhibiting their ability to provide the best quality of care to populations that need it the most.”

But, according to the center’s officials, the suggestions put forth in the CMS rule would allow safety-net hospitals to control for variables often out of their control as they relate to dual-eligibility. However, they stated in their analysis, when it comes to high readmission rates and the associated penalties, other population factors are often also at play regardless of a hospital’s quality scores including: the proportion of patients who are linguistic minorities; the proportion of patients who have behavioral health diagnoses; and the proportion of patients with minimal social support.

Recently, two senior leaders at the center—Bill Bithoney, M.D., senior fellow at The BDO Center for Healthcare Excellence & Innovation, and Patrick Pilch, national co-leader at the firm—spoke with Healthcare Informatics about their high-level takeaways from the rule, the impact that it might have on the HRRP, and what they would like to see further changed in the final rule, expected to drop this fall. Below are excerpts of that interview.

What were your main takeaways from the rule, as it relates to the Hospital Readmissions Reduction Program?

Bithoney: We saw it as a leap forward and that CMS is taking into account dual-eligible patients, as they typically cost three to four times as much [as non-dual-eligibles], largely because they have great needs but also because of their social, behavioral and demographic issues. So we felt that it was a great leap forward to take into account these sociodemographic factors. However, one could also take into account other things—some people have recommended strongly that we look at census tracts and the poverty within the census tract that the hospital operates. So let’s look at the population in general, and those social demographic issues that are associated with that poverty, such as the presence of isolated linguistic minorities and the increased prevalence of behavioral issues and opioid issues.

Bill Bithoney, M.D. & Patrick Pilch

I would also like to see them take into account the proportion of patients included in the hospital sample that have three or four serious medical diagnoses. It’s well-known that you are much more likely to be readmitted if you have three or four of these [conditions compared to one]. Medicare can take this into account; it’s not that hard. The data capacity of Medicare is incredible and has been burgeoning; they can calculate a risk score for [all of the lives that they cover]. So you can weigh the hospital’s readmission rate by any of these factors. These risk scores are all weighted based on how many diagnoses a patient has, and you get a medical risk score. The only place CMS does social weighting of risk in PACE [Programs of All-Inclusive Care for the Elderly], where they have a RAPS [Risk Adjustment Processing System] score that begins by taking into account the Medicaid population of all patients, not just dual-eligibles. So there’s a mechanism that exists in CMS to do just that—weighing hospitals by if their patients have three or four diagnoses and if they are poor.

Past CMS administrators have said they don’t want to take into account poverty because it’s prejudicial and they want to treat everyone the same. But we think that’s a cop out—sure that sounds good, but we know these risk factors impact readmission rates. There are 5,000 hospitals in the U.S., so these mathematics and data rates are available and routinely calculated.

Pilch: if you look at the continuum of care, especially for people who have comorbidities and chronic illnesses—and we do a lot with various Medicaid reform plans around the country—the hospitals are typically the most expensive providers of care for chronic illnesses. So in respect to the PACE program, for instance, we believe that this is something that CMS wants to continue to foster, and to the extent that this program is run effectively, a lot of the care can be provided outside the hospital. So it does beg the opportunity to look at what programs are in the market that hospitals can partner with so that when someone goes emergent, the hospital is there, but for other [problems], there are ways in which you can be more coordinated. Overall, the programs that are risk scored appropriately have been more successful.

Bithoney: Having risk scores for everyone will certainly be a major benefit. If those scores include social issues, which is easy to do, that will make life so much better. When you have risk scores, people who run ACOs [accountable care organizations] and Medicare Advantage [MA] programs, for instance, have the benefit of knowing those scores. When I was a hospital CEO, in our MA program, 3 percent of our patients accounted for 49 percent of the cost of care in that program. [Ratios like these] are found continuously. So if CMS would provide hospitals with risk scores for all their patients, they can target those 5 percent and do outreach into the community, which would make big inroads. We were able to intervene with those 3 percent prospectively, and cut 8 percent of the cost of care. These programs run billions of dollars so an 8 percent cut can be impressive. And the risk scores can be a guideline for prevention of illness in a value-based world.

How will these proposed changes impact future HRRP penalties?

Bithoney: What people believe will happen is that the penalties for hospitals that reside in poorer areas will not be so severe. It also may well be that some of the hospitals that are not being penalized now and are being rewarded find out that they aren’t doing as well as they thought.

How might hospitals which serve a higher proportion of dual-eligibles need to rethink how they are managing the patients who are coming in?

Pilch: I believe that for the safety-net hospitals, this rule doesn’t give them an out, but more of an opportunity. We talk to a number of safety-net hospitals, and we recently had a conversations with a CFO of a large safety-net hospital in the Midwest in which we asked how many dual-eligibles come into your hospital every day. The CFO responded that he wasn’t sure. But now they will really have to know. Then you can make sure what you are representing in terms of the volume coming in is actually the true volume coming in. Because you do not want to inadvertently under report or not report. If you do, it will come back at you in the end.

Do you think using readmission rates as a measure of hospital quality is fair?

Bithoney: I think the way it’s been taken into account has not been fair, but everyone does have a different definition of “fair.” CMS is acknowledging there are risk factors beyond the control of the hospital system such as taking care of linguistic minorities. Some cultures have very different approaches. So this is an admission from CMS that they believe it’s not fair at this point in time and they want to make it fairer.

What would you like to see changed for the final version of this rule as it relates to the HRRP?

Bithoney: In the three-hospital health system that I managed in Massachusetts, we gave those patients extra services and intensive services, and we cut the Medicare readmission rate for the entire population in the MA program from 20 percent to 9.8 percent. What it showed me was that such a large proportion of the hospital readmissions were sick and poor people. When you combine the people who have three or more diagnoses that resulted in having a high risk score with the people who are in the poor census tract, you have great opportunities to use that risk scoring to target the sickest patients prospectively.

 


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CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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HHS Secretary Azar: HHS Is Planning New Mandatory Bundled Payment Models

November 8, 2018
by Heather Landi, Associate Editor
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The Centers for Medicare & Medicaid Services (CMS) is revisiting mandatory bundled payment models, possibly for radiation oncology and cardiac care, according to Health and Human Services Secretary Alex Azar, which signals a strong about-face in the Trump Administration’s policy about bundled payment initiatives.

HHS is reexamining the role that mandatory bundled payment models can play in the transition to value-based care, Azar said in a keynote speech at the Patient-Centered Primary Care Collaborative Conference on Thursday. HHS published Azar’s comments.

In the published remarks, Azar said the Trump Administration is revisiting mandatory bundled payments and exploring new voluntary bundled payments as part of the Administration’s goal of paying for outcomes, rather than process.

“We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” Azar said.

In his speech, Azar said, “Imagine a system where physicians and other providers only had to worry about the outcome, rather than worrying about their staffing ratios and the individual reimbursements for every procedure they do and every drug they prescribe. That kind of payment system would radically reorient power in our healthcare system—away from the federal government and back to those closest to the patient.”

He continued, “One way we can do that is through bundling payments, rather than paying for every individual service. This is an area where you have already seen testing from CMMI for several years now—and I want to let you know today that you are going to see a lot more such ideas in the future.”

Azar highlighted the Bundled Payments for Care Improvement (BPCI), which, he said, has shown significant savings in several common inpatient episodes, including joint replacement and pneumonia.

During his speech on Thursday, Azar said, “I want to share with all of you for the first time today: We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology. We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.

“We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models,” he said.

One industry group, the American Society for Radiation Oncology (ASTRO), already has voiced concerns about a mandatory payment model. In a statement issued Thursday afternoon, Laura Thevenot, CEO of ASTRO, made it clear that the organizaiton strongly supports a radiation oncology alternative payment model (RO-APM). "ASTRO has worked for many years to craft a viable payment model that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care. ASTRO believes its proposed RO-APM will allow radiation oncologists to participate fully in the transition to value-based care that both improves cancer outcomes and reduces costs."

Thevenot said ASTRO has aggressively pursued adoption of this proposed model with the Center for Medicare and Medicaid Innovation (CMMI). However, Thevenot said the group has concerns "about the possibility of launching a model that requires mandatory participation from all radiation oncology practices at the outset."

Further, Thevenot said any radiation oncology payment model will represent "a significant departure from the status quo." "Care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices, particularly given the very high fixed costs of running a radiation oncology clinic," Thevenot stated.

Back in January, CMS announced the launch of the voluntary BPCI Advanced model, noting that it “builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value.” The BPCI Advanced model includes more than 1,000 participants that are receiving episode-based payments for over 30 clinical areas, Azar said.

“BPCI Advanced is a voluntary model, where potential participants can select whether they want to join. But we’re not going to stick to voluntary models. Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality,” Azar said.

The Obama Administration introduced mandatory bundled payment for care for heart attacks and for cardiac bypass surgery in July 2016.

In the past, CMS Administrator Seema Verma has said that she does not support making bundled payments mandatory, and former HHS Secretary Tom Price, M.D. had strongly opposed mandatory bundles, going so far as to direct the end of two mandatory bundled payment programs—one existing and one previously announced. In November 2017, CMS finalized a rule, proposed in August 2017, that cancelled mandatory hip fracture and cardiac bundled payment models.

As per that final rule, CMS also scaled back the Comprehensive Care for Joint Replacement Model (CJR), specifically reducing the number of mandatory geographic areas participating in CJR from 67 areas to 34 areas. And, in an effort to address the unique needs of rural providers, the federal agency also made participation voluntary for all low-volume and rural hospitals participating in the model in all 67 geographic areas.

On Thursday, Azar acknowledged that his statements signaled HHS was reversing course on its previous stance, noting that last year the administration reduced the size of the CJR model and pulled back the other episode payment models, including those on cardiac care, before they could launch.

Azar, who was confirmed as HHS Secretary earlier this year, signaled early on that he diverged from Verma and Price on his views about mandatory bundled payments. During a Senate Finance Committee hearing in January on his nomination for HHS Secretary, he said, on the topic of CMMI [the Center for Medicare and Medicaid Innovation] pilot programs, “I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”

During his speech Thursday, Azar pointed to the Administration’s first mandatory model, which was unveiled two weeks ago, called the International Pricing Index (IPI) Model for payments for Part B drugs. Azar said the model is a “mandatory model that will help address the inequity between what the U.S. and other countries pay for many costly drugs.”

Further, Azar said CMMI also will launch new primary care payment models before the end of the year, with the aim of introducing a spectrum of risk for primary care providers, Azar said.

“Before the end of this year, you will see new payment models coming forth from CMMI that will give primary care physicians more flexibility in how they care for their patients, while offering them significant rewards for successfully keeping them healthy and out of the hospital,” he said.

“Different sizes and types of practices can take on different levels of risk. As many of you know, even smaller practices want to be, and can be, compensated based on their patients’ outcomes,” he said. “We want to incentivize that, with a spectrum of flexibility, too: The more risk you are willing to take on, the less we’re going to micromanage your work.”

Azar also noted HHS’ efforts to examine impediments to care coordination, such as examining the Stark Law, the Anti-Kickback Statute, HIPAA, and 42 CFR Part 2. CMS has already launched and concluded a request for information on the Stark Law, and the Office of the Inspector General has done the same on the Anti-Kickback Statute, he noted.

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Dr. Sanjay Gupta’s Heartening Speech at CHIME18 Should Inspire U.S. Healthcare Leaders

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The story of an Amazonian tribe could serve as a motivational lesson for U.S. healthcare stakeholders

It was inspiring to hear Sanjay Gupta, M.D., the well-known neurosurgeon and medical reporter, give the closing keynote at the College of Healthcare Information Management Executives (CHIME) 2018 Fall CIO Forum in San Diego last week. Dr. Gupta, who serves as associate chief of the neurosurgery service at Grady Memorial Hospital in Atlanta, while also best known as CNN's multiple Emmy Award-winning chief medical correspondent, discussed the fascinating balance that he strikes between medicine and media.

“Oftentimes, I see people at their best, and sometimes at their worst. I get to travel the world, where I learn so much, but also teach others. Sometimes the dance between medicine and media can be awkward and emotionally challenging. But almost always, the stories we do have a significant impact,” Gupta told the Fall CIO Forum attendees.

What was perhaps most captivating about Gupta’s speech was when he spoke about visiting a primitive Amazonian tribe that appears to have the best heart health in the world. The Tsimane people of Bolivia do not speak a language, live a simple existence, and are disease-free, explained Gupta. So he went to visit the tribe with the goal to understand its lifestyle and what led to its members having such healthy hearts.  

Sanjay Gupta, M.D.

“I went spearfishing with one [tribe member], who thought he was 84-years-old, but he really didn’t know for sure. His shirt was off, and he was ripped, balancing himself on the canoe, just looking at the water, spearing fish. His eyesight was perfect. The entire indigenous tribe was just like this,” Gupta recalled.

After examining the Tsimane tribe’s diet, Gupta noted it was a hunter-gatherer society, meaning there was nothing technological. “The most mechanical thing I saw was a pulley for the well,” he said. Seventy percent of what they eat is carbohydrates—unrefined and unprocessed—while 15 percent of their diet is protein, and 15 percent fat, he added. “You need farmed food because oftentimes you don’t have successful hunting days, so the farmed food was the food in the bank. And they would do intermitting fasting, too. These are the people with the healthiest hearts in the world,” Gupta exclaimed.

When it comes to activity, when hunters are hunting, they’re never outrunning their prey, but rather outlasting it, noted Gupta. “We found that they walked about 17,000 steps per day. But they didn’t run; they only walked. They are active, but not intensively active. They also hardly every sit—they are either lying or standing all the time. And they would get nine hours of sleep per night, waking up to the rooster’s crow. There are no devices. Again, these are the people who have the healthiest hearts in world. They don’t have a healthcare system and don’t spend a dollar on healthcare,” Gupta stated.

What’s even more interesting about this tribe is that each of its members lives with some degree of a parasitic infection, which they usually get it early in life, have a few days of illness, and then just live with these parasites in their bodies for their entire lives. “The belief is that so much of the disease we talk about—that leads to this $3.3 trillion price tag [the total cost of U.S. healthcare spending in 2016]—is actually ignited or worsened by our immune systems. So the parasitic infections could be part of the reason they are protected from all types of diseases,” Gupta offered.

Essentially, it’s living this basic, undeveloped life that “inadvertently provides them extraordinary protection against heart disease,” noted a report in HealthDay last year. “Thanks to their unique lifestyle, most Tsimane [members] have arteries unclogged by the cholesterol plaques that drastically increase the risk of heart attack and stroke in modern Americans,” Gregory Thomas, M.D., medical director of the Memorial Care Heart & Vascular Institute at Long Beach Memorial, in California, said in that report.

Tsimane tribe (source: University of New Mexico)

You might be asking what the story of the Tsimane tribe has to do with U.S. healthcare since its lifestyle would obviously never be replicated in a developed country. And while that is true, it’s tough to ignore the $1 billion per day that our healthcare system spends on heart disease—compared to the Tsimane tribe that doesn’t spend a single dime, yet has the healthiest hearts in the world.

In this sense, perhaps we can use the Tsimane story to push ourselves to develop a greater understanding of why we spend so much money on healthcare and don’t have the results to show for it. Gupta asked this $3.3 trillion-dollar question in his speech—why does healthcare in the U.S. cost so much and what do we get in return?

“If you look at the statistics, it’s not impressive. More people die from preventable disease in the U.S. than in 12 other nations. People live longer in 30 other countries compared to the U.S.—including places like Chile and Costa Rica. We still have tens of millions of people who don’t have access, and we still spend all this money on healthcare. Why?” he asked.

Gupta explained that the nation’s high healthcare costs come down to the following: high administrative costs, technology, new drugs and development, and the cost of chronic disease—the last which is incredibly self-inflicted. About 70 to 80 percent of chronic disease is self-preventable, he said.

Indeed, as most of us know, about 5 percent of the U.S. population accounts for 50 percent of the healthcare costs. These are folks who are defined by illness, not by health, Gupta stated. This is why the modern-day healthcare system has proactively taken to targeting that 5 percent to improve their chances of preventing disease and staying healthy. “Data shows that home visits, nutritional counseling, one-on-one coaching, and diligent follow-up care can go a long way in preventing someone from getting sick in the first place, and from turning a disease into something more chronic. Some of these interventions can actually reverse disease. The die is not cast,” Gupta said.

For me, Gupta’s keynote highlighted the need for efforts around value-based care, care management, and population health to be intensified. A big part of that, as noted in the speech, is addressing patients’ social and environmental factors. It’s not at all surprising to see studies such as this one from earlier this year, conducted by researchers at the University of South Florida (USF) College of Public Health, Tampa, and WellCare Health Plans, and published in Population Health Management, which found that healthcare spending is substantially reduced when people are successfully connected to social services that address social barriers, or social determinants of health, such as secure housing, medical transportation, healthy food programs, and utility and financial assistance.

And with that, there is also an enormous opportunity for data and IT to play a role. Information sharing, so that providers have access to the right information at the point of care—no matter where the patient is—will be critical to reducing unnecessary costs. As will the robust use of data analytics, so that patient care organizations can be proactive in predicting which patients are at highest risk, when they might need services, and how to intervene at the appropriate time.

But to this point, Gupta, who noted that our society can get too caught up in high-tech, also suggested that “medicine seems to play by slightly different rules when it comes to innovation as opposed to other sectors. Sometimes, innovation moves painstakingly slow in respect to medicine.” At the end of the day, he said, it will be “the innovations that make us, [as a society], healthier, happier, and connect us in frictionless ways, that will be the biggest winners.”

So, will the U.S. population suddenly turn off their iPhone alarms, wake up to the rooster’s crow, and become a hunter-gatherer society? No, I would say that’s quite unlikely to happen. But hearing stories such as the one of the Tsimane tribe might just serve as good enough motivation to bring down the astronomical and unsustainable costs of U.S. healthcare.

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