By John Halamka, MD

Over the next few months, Jacob Reider will serve as the interim National Coordinator for Healthcare IT while the search continues for Farzad Mostashari’s permanent replacement.

What advice would I give to the next national coordinator?

David Blumenthal led ONC during a period of remarkable regulatory change and expanding budgets. He was the right person for the “regulatory era.”

Farzad Mostashari led ONC during a period of implementation when resources peaked, grants were spent, and the industry ran marathons every day to keep up with the pace of change. He was the right person for the “implementation era”

The next coordinator will preside over the “consolidate our gains” era. Grants largely run out in January 2014. Budgets are likely to shrink because of sequestration and the impact of fiscal pressures (when the Federal government starts operating again). Many regulatory deadlines converge in the next coordinator’s term.

The right person for this next phase must listen to stakeholder challenges, adjust timelines, polish existing regulations, ensure the combined burden of regulations from many agencies in HHS do not break the camel’s back, and keep Congress informed every step of the way. I did not include parting the Red Sea, so maybe there is a mere human who could do this.

What tools does the coordinator have in an era of shrinking budgets?

At present, Meaningful Use Stage 2, ICD-10, the Affordable Care Act, HIPAA Omnibus Rule, and numerous CMS imperatives have overlapping timelines, making it nearly impossible for provider organizations to maintain operations while complying with all the new requirements.

Can resources be expanded?

Continue reading “A Little Advice For The Next National Coordinator”

By Ashish Jha, MD & Thomas Tsai, MD

Why readmission penalties are controversial

Penalizing hospitals for high readmission rates has been pretty controversial.  Critics of the program have argued that readmissions have little to do with what happens while the patient is in the hospital and are driven primarily by how sick or how poor the patient is.  Advocates of the readmissions program increasingly acknowledge that while readmissions may not reflect the quality of care that occurred within the hospital, someone should be accountable for what happens to patients after discharge, and hospitals are the logical choice.  While the controversy continues, there is little doubt that the metric is here to stay.  This October, the CMS Hospital Readmissions Reduction Program (HRRP) will increase its penalty on excess readmissions from 1% to 2% of total hospital reimbursement.

So far, CMS has focused on readmissions that occur after patients are discharged with one of three medical conditions—acute myocardial infarction, pneumonia, and congestive heart failure.  The data on the impact of the program are mixed:  while readmission rates appear to be dropping, the penalties seem to be targeted towards hospitals that care for some of the sickest patients (academic medical centers), poorest patients (safety-net hospitals) and for heart failure, some of the best hospitals (those with the lowest mortality rates).  No wonder the program has been controversial.

Why surgery may be different

In 2015, CMS extends the program to focus on surgical conditions, which provides an opportunity to think again about what readmissions measure, and what it might take to reduce preventable ones.  And if you think about it, surgery may be different.  Most patients who are admitted for Acute MI, CHF, and pneumonia are chronically ill and bounce in and out of the hospital, with any one hospitalization likely just an exacerbation of underlying chronic illness (especially true for pneumonia and heart failure).  Not so for surgery—at least not for the major surgeries.

Continue reading “Finally Some Good News on Readmission Rates”

By Anonymous HIT Insider

In the wake of the National Coordinator’s announcement that he is departing, there has been a flurry of tweets, blog posts, impromptu online polls, and conjecture about the most likely successor.  To date, none of these conversations has resulted in a thoughtful assessment of the set of characteristics that would represent the ideal candidate, nor has there been any thorough review of the most likely candidates in the context of these attributes.  The need for a rapid transition to a successor is well understood by all – yet there has been no indication that the Obama administration is in a hurry.  Let’s hope that we can evolve them toward a greater sense of urgency. The fragility of ONC – and the importance of its health – can’t be overlooked.

Let’s consider some history:

The first two National Coordinators, David Brailer and Rob Kolodner, were appointed before ARRA.  The agency was small, focused largely on certification (through CCHIT), standards (through HITSP) and policy.  When ARRA arrived, David Blumenthal, a thoughtful, deliberate, policy-savvy internal medicine physician from Boston was brought in to lead the rapid expansion of health IT that was facilitated by the HITECH Act.

ONC expanded under Blumenthal from a team of ~ 30 people to a team of >100 in the two years that he was at the helm, and the agency published the 2011 certification criteria regulations, and collaborated with CMS to publish the regulations that defined stage 1 of the Meaningful Use incentive program.  The policy foundation was that the three-stage program – to be implemented over six years – would evolve the nation’s care delivery system by causing adoption of EHR technology (stage 1) and then exchange of clinical information electronically (stage 2) and finally improved clinical outcomes (stage 3).

Farzad Mostashari, who joined Blumenthal as the Deputy National Coordinator early in Dr Blumenthal’s tenure, was quickly named as Blumenthal’s successor when Blumenthal announced his resignation in the Spring of 2011.  Both Mostashari and Blumenthal pushed hard for Mostashari’s appointment – so that the consistency, focus and forward momentum of the organization could be maintained.

And so it was.  Under ARRA, adoption of EHRs has skyrocketed.  The CMS MU Stage 2 regulations and the ONC 2014 certification regulations were published, and the size of the agency has doubled to over 150 people.  Recognizing the need for experienced partners to assist him in leading a larger agency – and growing national reliance on health IT and an essential component of the care delivery ecosystem – Mostashari hired David Muntz as the “Principal Deputy” (essentially the COO of the agency), Jacob Reider as Chief Medical Officer (leading a team of clinicians focused on quality and safety) and Judy Murphy as the Deputy National Coordinator for Programs and Policy (adding internal coordination support for ONC programs).

Continue reading “Replacing Farzad”

By Adrian Gropper, MD

Three juicy lemons came through my inbox this week. The NY Times published an expose of why hip replacement surgery costs 5-10 times as much in the US as in Belgium even though it’s the same implant. JAMA published research and a superb editorial on the Views of US Physicians About Controlling Health Care Costs and CMS put out a request for public comment on whether physicians’ Medicare pay should be made public. Bear with me while I try to make lemonade, locally, from these three sour economic perspectives.

Here’s a super-concentrated summary of the three articles: The hip surgery is more expensive because, in the US, as many as 10 intermediaries mark-up the price of that same hip prosthesis. Then, Tilburt et al said in JAMA that “physicians report that almost everyone but physicians bears responsibility for controlling health care costs.” The physicians reported that lawyers (60%), insurance companies (59%), drug and device manufacturers (56%), even hospitals (56%) and patients (52%) bear a major responsibility to control health care costs. Finally, CMS is trying to balance the privacy interests of physicians with the market failure that my other two lemons illustrate.

Can we apply local movement principles to health reform? How much of our money can we keep with our neighbors? What policies and technologies would enable the health care locavore? The locavore health system couldn’t possibly be more expensive than what we have now and, as with food and crafts, more of the money we spend would benefit our neighbors and improve our community.

Continue reading “Enabling the Health Care Locavore”

By Bob Wachter, MD

There are tens of thousands of policies in Medicare’s policy manual, which makes for stiff competition for the “Most Maddening” award. But my vote goes to the policy around “observation status,” which is crazy-making for patients, administrators, and physicians.

“Obs status” began life as Medicare’s way of characterizing those patients who needed a little more time after their ED stay to sort out whether they truly needed admission. In many hospitals, “obs units” sprung up to care for such patients – a few beds in a room adjacent to the ED where the patients could get another nebulizer treatment or bag of saline to see if they might be able to go home. Giving the hospital a full DRG payment for an inpatient admission seemed wrong, and yet these patients really weren’t outpatients either. The Center for Medicare & Medicaid Services’ (CMS’s) original definition of obs status spoke to the specific needs of these just-a-few-more-hours patients: a “well-defined set of specific, clinically appropriate services,” usually lasting less than 24 hours. Only in “rare and exceptional cases,” they continued, should it last more than 48 hours.

A recent article in JAMA Internal Medicine, written by a team from the University of Wisconsin, vividly illustrates how far the policy has veered from its sensible origins. Chronicling all admissions over an 18-month period, Ann Sheehy and colleagues found that observation status was anything but rare, well defined, or brief. Fully one in ten hospital stays were characterized as observation. The mean length of these stays was 33 hours; 17 percent of them were for more than 48 hours. And “well defined?” Not with 1,141 distinct observation codes.

To underscore just how arbitrary the rules regarding observation are, an investigation by the Inspector General of the U.S. Department of Health and Human Services released today found that “obs patients” and “inpatients” were clinically indistinguishable. Their major difference: which hospital they happened to be admitted to.

Continue reading “Medicare’s Observation Status-and Why Attempts to Make Things Better May Make Them Worse”

By Robert Laszewski

After months of speculation on just where the Obama administration is toward the development of the new health insurance exchanges, the Government Accountability Office (GAO) has issued a 48-page report complete with timelines and a detailed report on just where the Obama administration is––or at least was last month.

The key summary:

“Much  progress  has  been  made,  but  much  remains  to  be  accomplished  within  a   relatively  short  amount  of  time.  CMS’s  timelines  provide  a  roadmap  to   completion;  however,  factors  such  as  the  still-­evolving  scope  of  CMS’s  required   activities  in  each  state  and  the  many  activities  yet  to  be  performed—some  close   to  the  start  of  enrollment—suggest  a  potential  for  challenges  going  forward.  And   while  the  missed  interim  deadlines  may  not  affect  implementation,  additional   missed  deadlines  closer  to  the  start  of  enrollment  could  do  so.  CMS  recently   completed  risk  assessments  and  plans  for  mitigating  risks  associated  with  the   data  hub,  and  is  also  working  on  strategies  to  address  state  preparedness   contingencies.  Whether  these  efforts  will  assure  the  timely  and  smooth   implementation  of  the  exchanges  by  October  2013  cannot  yet  be  determined. ”

Regarding the Data Hub:

“FFEs  [the federal exchanges] along  with  the  data  services  hub  services  are  central  to  the  goal   under  PPACA  of  having  health  insurance  exchanges  operating  in  each   state  by  2014,  and  of  providing  a  single  point  of  access  to  the  health   insurance  market  for  individuals.  Their  development  has  been  a  complex   undertaking,  involving  the  coordinated  actions  of  multiple  federal,  state,   and  private  stakeholders,  and  the  creation  of  an  information  system  to   support  connectivity  and  near  real-­time  data  sharing  between  health   insurance  exchanges  and  multiple  federal  and  state  agencies.  Much   progress  has  been  made  in  establishing  the  regulatory  framework  and   guidance  required  for  this  undertaking,  and  CMS  is  currently  taking  steps   to  implement  key  activities  of  the  FFEs,  and  developing,  testing,  and   implementing  the  data  hub.  Nevertheless,  much  remains  to  be   accomplished  within  a  relatively  short  amount  of  time.  CMS’s  timelines   and  targeted  completion  dates  provide  a  roadmap  to  completion  of  the   required  activities  by  the  start  of  enrollment  on  October  1,  2013.

Continue reading “Will the Federal Health Insurance Exchanges Be Ready On Time?”

By Berenson, Pronovost & Krumholz

Initiatives to promote performance measurement need to be accompanied by support to improve care. Quality measure data should not only be technically correct, but should be organized such that their dissemination is a resource to aid in quality improvement activities. As such, quality measurement should be viewed as just one component of a learning health care system that also includes advancing the science of quality improvement, building providers’ capacity to improve care, transparently reporting performance, and creating formal accountability systems.

There are several strategies to make quality measure data more actionable for quality improvement purposes. For example, for publicly reported outcome measures, CMS provides hospitals with lists of the patients who are included in the calculation. Since the outcomes may occur outside the hospital for mortality and for readmissions that are at other hospitals, this information is often beyond what the hospitals already have available to them. These data give providers the ability to investigate care provided to individual patients, which in turn can support a variety of quality improvement efforts.

Continue reading “5. Use measurement to promote the concept of the rapid-learning health care system.”

By Berenson, Pronovost & Krumholz

While working to develop a broad set of outcome measures that can be the basis for attaining the goals of public accountability and information for consumer choice, Medicare should ensure that the use of performance measures supports quality improvement efforts to address important deficiencies in how care is provided, not only to Medicare beneficiaries but to all Americans.

CMS’ current focus on reducing preventable rehospitalizations within 30 days of discharge represents a timely, strategic use of performance measurement to address an evident problem where there are demonstrated approaches to achieve successful improvement [6]. Physicians and hospital clinical staff, if not necessarily hospital financial officers, generally have responded quite positively to the challenge of reducing preventable readmissions.

CMS has complemented the statutory mandate to provide financial incentives to hospitals to reduce readmission rates by developing new service codes in the Medicare physician fee schedule that provide payment to community physicians to support their enhanced role in assuring better patient transitions out of the hospital in order to reduce the likelihood of readmission [7]. CMS recently announced that after hovering between 18.5 percent and 19.5 percent for the past five years, the 30-day all-cause readmission rate for Medicare beneficiaries dropped to 17.8 percent in the final quarter of 2012 [8], simplying some early success with efforts to use performance measures as part of a broad quality improvement approach to improve a discrete and important quality and cost problem.

However, this Timely Analysis of Immediate Health Policy Issues 3“CMS’ current value-based purchasing efforts, requiring reporting on a raft of measures of varying usefulness and validity, should be replaced with the kind of strategic approach used in the national effort to reduce bloodstream infections.”approach is not without controversy.

Improvements have been modest, and some suggest that readmission rates are often outside the hospital’s control, so CMS’ new policy unfairly penalizes hospitals that treat patients who are the sickest [9]. And while readmission in surgical patients is largely related to preventable complications, readmissions in medical patients can be related to socioeconomic status. Also, some have questioned the accuracy of CMS’ seemingly straightforward readmission rate measure, finding that some hospitals reduce both admissions and readmissions—a desirable result—yet do not impact the readmission rate calculation [10]. And one of this paper’s authors (R. Berenson) has suggested a very different payment model that would reward hospital improvement rather than absolute performance, thereby addressing the reality that hospitals’ abilities to influence readmission rates do vary by factors outstside of their control [11].

Continue reading “2. Use quality measures strategically, adopting other quality improvement approaches where measures fall short.”

By David Dranove

The recent Medicare report on variation in hospital “prices” is not exactly news. In fact, I wonder why anyone (including the NY Times and NPR) covered it, let alone make it a lead story.

As you probably know, Medicare reported that hospital charges for specific treatments, such as joint replacement surgery, greatly vary from one hospital to another. (This includes charges for all services during the hospitalization, including room charges, drugs, tests, therapy visits, etc.) Everyone in the healthcare business knows that charges do not equal the actual prices paid to hospitals, no more than automobile sticker prices equal the prices that car buyers actually pay. Except that for the past thirty years, the gap for hospitals greatly exceeds (in percentage terms) the gap for cars. This is not just a nonstory, it is an old nonstory.

So reporters tried to give it a new spin. One angle concerns the uninsured, who may have to pay full charges. I will write about this in a future blog. Another angle is that by publishing these charges, Medicare will encourage patients to shop around. That is the subject of this blog.

I suppose it is okay to tell patients that the amount they might have to pay out of their own pockets may vary from one hospital to the next. But the published charge data is useless for computing out of pocket payments; in fact, it may be worse than useless. As even the NY Times noted, insured patients make copayments based on prices that their insurers negotiate with hospitals. These prices are essentially uncorrelated with charges. So a patient who visits a hospital with low charges may well make higher out-of-pocket payments than a patient who visits a high charge hospital. It is a crap shoot.

Continue reading “The Rest of the Story About Hospital Pricing”

By John Wasik

The dreaded sequester cuts mandated by the Budget Control Act of 2011 went into effect this month, putting into place a 2 percent cut in Medicare spending.

While Congress can still enact a “fix” that will delay or amend these cuts, that seems unlikely as of this writing. Yet how the cuts will impact Medicare and its nearly 50 million beneficiaries is a still a moving target.

In a joint study issued September 2012 by the American Hospital Association, the American Medical Association and the American Nurses Association, it was estimated that some 766,000 jobs would be lost by 2021 if the sequester cuts went into effect.

According to the study, “Researchers forecast that more than 496,000 jobs will be lost during the first year of sequestration, and these cuts will impact health-care sectors in every state. In California alone, the health sector could lose more than 78,000 jobs by 2021.”

Continue reading “So Who Gets Hurt By the Sequester?”