Month: April 2011

Video Collage: KP Center for Total Health

Apr 8, 2011• 4

By MATTHEW HOLT

This week I spent quite a bit of time at the very new and very fancy Kaiser Permanente Center for Total Health in Washington DC. It’s next door to a very large medical office building (110+ docs) in which KP is showcasing its current integrated care model, and how far its come in its mid-Atlantic region. The Center is a pretty fascinating place–part tech and idea showcase and part meeting room. Certainly no other health care organization that I’m aware of has spent so much on a place designed to stimulate the imagination and enhance conversation–under the nose of the folks on Capitol Hill. I won’t get into here whether this is how money should be spent in health care but on balance I’m a fan. (FD KP is a sponsor of the Health 2.0 Conference I co-run). Instead I want to try to give you a feel for the place, and why it fits their vision and what it’s trying to demonstrate.

I took a tour with some colleague journo/blogger types led by the always expressive Robbie Pearl (CEO of the Permanente Groups in N Cal and now DC too–the airlines thank him!) and with Phil Fasano, CIO of the whole organization. Robbie is not shy in voicing his opinions (as you’ll see) and Phil occasionally trots out the voice of caution to reel in Robbie’s vision a tad. It was great fun.

What was also fun was the cocktail party at the grand opening. There I met three of my favorite DC-based ladies in health: Deven McGraw, Regina Holliday & Cindy Throop. So we’ll start with that fun video, and then there’s a whole lot more from the tour of the center after the jump. All these videos are pretty short.

After that fun and games, lets head to the tour. This is a series of videos of me and a few others testing out the displays, and listening to Pearl & Fasano, as well as asking them a couple of pointed questions.

But I’ll take the tour in order….after a quick thanks to Holly Potter, Danielle Cass, Ravi Poorsina & center boss Julie Norris who with a ton of their colleagues worked their butts off keeping hundreds of visitors informed and entertained.

First up, Robbie Pearl on the current state of the KP.org health record and why we shouldn’t have to put up with less; what he called the 19th century state of medicine. And I can assure that is on display in my wife’s OBGYN office every time I visit.Continue reading…

Time for Toto to Pull the Curtain Away from Patient-Centered Medical Homes

Apr 8, 2011• 23

By AL LEWIS

Patient-Centered Medical Homes in statewide populations have unstoppable momentum and major constituencies in support of them, so valid analysis of their outcomes is probably as futile as it will be unwelcome. However, the math speaks for itself, at least in the mother of all statewide medical homes, North Carolina Medicaid’s Community Care Access Model.

I write this after having analyzed the actual data from this project’s outcomes report, rather than the stated conclusion of the report, a conclusion that continues to be cited in support of the many states considering or implementing medical home models for their Medicaid populations.

The conclusion makes North Carolina looks like a huge win for PCMH: $300-million in reported savings. However, readers should have (but largely didn’t) observe a number of curiosities about the data in support of that conclusion:

(1)    Every element of resource use declined. People have to be getting their care from somewhere, but inpatient, ER, outpatient, physician, drug, and other expenses somehow all declined vs. trend.

(2)    The decline in physician practice expense is especially counterintuitive: Why are the doctors so supportive if they are working harder but making less money?

(3)    Even though somehow savings were shown in physician expense, per capita doctor visits did indeed increase.   More concerning was that specialist visits –which are supposed to decline in a PCMH model – also increased.

(4)    Inpatient expense fell 47%. This was achieved despite the fact that all the AHRQ’s “Ambulatory Care –Sensitive Conditions” total to about 20% of admissions in most populations.

(5)    The evaluators (William M. Mercer) are on record as saying that “choice [emphasis mine] of trend has a large impact on estimates of financial savings.” Perhaps it is possible that Mercer, having given themselves this latitude, “chose” a trend that would make the study look good.

Those observations merely suggest that the study was done wrong. But one other “finding” invalidates the entire study: the 54% reduction in spending on babies under one year of age, accounting for the majority of the entire $300-milllion in spending. (Any nontrivial savings whatsoever in this category should have raised eyebrows since PCMH is mostly about managing chronically ill patients.) The components of spending in that category include physician expense, which should rise since doctors get paid more to be more accessible, and drug expense, which should rise for the same reason. This means that the entire 54% savings across the category must be concentrated in neonatal expense. Since neonatal expense is about half of total spending in the age category, it would have to decline by a mathematically impossible 100%+ in order for the category to average a 54% reduction.Continue reading…

Why We Still Kill Patients

Apr 8, 2011• 36

By MICHAEL MILLENSON

A recent front-page article ^[1] in the New York Times conveyed grim news about patient safety. The first large-scale study ^[2] of hospital safety in a decade concluded that care has not gotten significantly safer since the Institute of Medicine’s 1999 estimate ^[3] of up to 98,000 preventable deaths and 1 million preventable injuries annually.

What for me struck a particularly jarring note was not just the absence of improvement, but the reluctance of the health care leaders interviewed to speak candidly about why progress has been so slow. Instead, they offered nostrums about the need to “do more” or opined that “openness” or better “coordination” would somehow turn the tide.

But tucked in the actual study’s conclusions section, between bland boilerplate about “further study” and a “refocusing of resources,” some carefully worded candor cautiously peeked through: “[T]he absence of large-scale improvement is not evidence that current efforts to improve safety are futile,” wrote Christopher Landrigan and colleagues in the Nov. 25 New England Journal of Medicine. “On the contrary, data have shown that focused efforts to reduce discrete harms, such as nosocomial infections and surgical complications, can significantly improve safety.”

In plain language, we know how to prevent many of these patient deaths, but we don’t. That makes, “Why?” a lot tougher question.

A Case for Self Insuring Small Business

Apr 8, 2011• 12

By MICHAEL TURPIN

Image via Wikipedia

During the course of 2009, an alarming trend line was broken. For the first time ever, more employers under 50 employees were not offering medical insurance to employees than those who continued to provide employer sponsored healthcare.

Unfortunately, achieving affordability is often a zero sum game and the current system often fails the weakest and most disenfranchised of its stakeholders. While the burden of spiraling healthcare costs has effected virtually every employer, the weight of cost increases has been borne disproportionately by individuals and smaller employers (1-250 employees). The opaque science of risk pooling, cost shifting and risk selection has as much to do with unacceptable increases as poor consumerism, over treatment and inefficiency. As we march toward insurance exchanges and pooled purchasing for employers in 2014, we will continue to witness a game of pass the parcel leaving smaller employers holding the bag.

Healthcare cost shifting begins at the highest levels with federal and state governments routinely cost shifting to the private sector by serially under-reimbursing specialists and hospitals for the cost of their services. Doctors and hospitals, in turn, shift cost to the private sector charging higher fees for services to make up for underfunded Medicare and Medicaid rates. Health systems have consolidated along with multi-specialty medical groups gaining critical bargaining power that results in higher contracted rate increases negotiated with insurers. Insurers, attempting to keep rising medical trends down, must exact concessions from less well leveraged providers such as community based hospitals and primary care doctors. The result is an Darwinian landscape where only the large survive.

As core medical trends hover between 7%-8%, insurer insured book of business medical trends have climbed into and remain in double digits. Larger employers remain more immune from peanut butter spread book of business trends due to their own unique claim credibility and in many instances, due to the simple act of self insurance. Lack of size and actuarial credibility leaves smaller employers and individuals to be underwritten within pools of risk — pools that continue to pass on the rising costs of care at an alarming rate. To add insult to injury, as states and the Federal government become increasingly larger medical payers (already representing over 50% of all medical spend in the US), cost shifting will only accelerate in the private sector resulting in higher medical trends impacting smaller employer pools.Continue reading…

Why ACOs Won’t Work

Apr 7, 2011• 68

By ROBERT LASZEWSKI

First, I think Accountable Care Organizations (ACOs) are a great idea. Just like I thought HMOs were a good idea in 1988 and I thought IPAs were a good idea in 1994.

The whole notion of making providers accountable for balancing cost, medical necessity, appropriateness of care, and quality just has to be the answer.

But here’s the problem with ACOs: They are a tool in a big tool box of care and cost management tools but, like all of the other tools over the years like HMOs and IPAs, they won’t be used as they were intended because everybody—providers and insurers—can make more money in the existing so far limitless fee-for-service system.

I see the $2.5 trillion American health care system as a giant health care industrial complex. It just grows on itself and sucks in more and more money. Why not? The bigger it gets the more money we give it.

How do you make it efficient? You change the game. You can’t let it any longer make money just getting bigger. The new game has to be one that only pays out a profit for results—better care for a budget the country can live with. There are lots of tools available to do that. ACOs, capitated HMOs, IPAs, disease management, enormous data mines, Electronic Patient Data Systems, and so on.

But, here’s the rub. There isn’t a lot of incentive for payers and providers to do more than talk about these things and actually make these tools work. Right now they can just make lots more money off the fee-for-service system. They demand more money and employers and government and consumers are willing to just dump more money into the system. Sure they complain about it but they just keep doing it.Continue reading…

The Kaisingers link up

Apr 6, 2011• 4

A while ago at an IOM meeting I mis-spoke and called Geisinger, “Kaisinger” and it kinda sounded right. Well now those two Epic users with another similar Epic user (Group Health) have teamed up with Mayo (home grown IT) and InterMountain (3M + homegrown + GE) to share patient data. Now it hasn’t happened yet — this is the announcement of what is to come (although KP is inter-operating with the VA in San Diego). But they’re going to use NHIN standards. My understanding is that they’re going to start with moving data using CCD (a subset of the records) and then move to access full patient data via common medical identifiers. Of course while this is great news, the chances of a typical California Kaiser patient showing up in rural Pennsylvania isn’t that high. But if they can do it across the country, why can’t they and others do it across the street? In other words resolve what Jonathan Bush calls the Paper Aeroplane method of interoperability. After all that type of random showing up–even for Kaiser patients in a Sutter run ER–is a big deal. Let’s hope this announcement is a big spur, and allows others to join.

More EMRs for all

Apr 5, 2011

Today’s been a big day in Health IT. First Kaiser Permanente has opened a very flashy Center for Total Health in DC. I took a tour today and lots of it is focused on the use of and extension of their Epic-based medical record (including adding lots of applications to that platform). But it’s open in DC in order to show the DC crowd what can be done. Meanwhile if you don’t have $6 billion lying around to put in a medical record, perhaps spending nothing may be a better option. And today free EMR “vendor” Practice Fusion got $23m in venture funding which will help them give away a whole more EMRs which will soon have a whole lot more applications attached to that EMR.

Medicare, Medicaid Get Squeezed in Ryan Plan

Apr 5, 2011• 38

By MERRILL GOOZNER

Everyone agrees that controlling health care costs is the key to bringing long-term federal budget deficits under control. Government spending on Medicare for seniors and Medicaid for the poor has grown nearly twice as fast as the rest of the economy for decades and is by far the largest component of future projected deficits.

But government funded health care programs aren’t unique in that regard. Employer-based coverage for the working population, which is provided through private insurance companies, has grown just as fast. The problem in a nutshell is the cost of health care, not its funding source.

That’s why it’s important to consider how the two separate sides of our health care system – public plans and private plans – will interact should the Medicare privatization plan that Rep. Paul Ryan, R-Wis., touted on Fox News Sunday become law. The House Budget Committee chairman’s alternative budget would turn Medicare over to private insurers for anyone who retired after 2021. Future retirees would receive a capped payment to buy insurance (he called it “premium support,” not a voucher). Medicaid would be turned into a capped block grant – which translates as a fixed sum awarded to states.

Capping expenditures is central to cost-control in the Ryan plan, which is essentially the same plan that he co-authored with former Congressional Budget Office director Alice Rivlin during the fiscal commission deliberations. The plan limits the annual growth in the amount earmarked for either premium support or block grants to one percentage point more than gross domestic product (call it GDP+1).

That’s about half of the actual health care cost outlays in most years. According to Congressional Budget Office projections released in January, federal spending on Medicare and Medicaid is expected to nearly double to $1.6 trillion by 2021, about a 7 percent annual increase. If the primary goal is holding down taxes and spending, capping that rise at GDP+1 provides the upside. With a wave of the legislative wand, government spending on health care for the old and poor would be reduced to more manageable proportions – between 3.5 and 4.5 percent a year depending on how fast the economy grows. Taxpayers could rejoice.Continue reading…

ACO Rules: Where’s the Beef?

Apr 5, 2011

By PAUL LEVY

I’m sorry, but I just don’t get it. Last week, CMS announced proposed regulations about setting up Accountable Care Organizations. Here’s the statutory background and the theory of the case, as set forth in the March 31 Medicare Fact Sheet:

Section 3022 of the Affordable Care Act, added a new section 1899 to the Social Security Act (the Act) that requires the Secretary to establish the Shared Savings Program by January 1, 2012. This program is intended to encourage providers of services and suppliers (e.g., physicians, hospitals and others involved in patient care) to create a new type of health care entity, which the statute calls an “Accountable Care Organization (ACO)” that agrees to be held accountable for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending. Studies have shown that better care often costs less, because coordinated care helps to ensure that the patient receives the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors.

Here’s the introductory paragraph from the CMS summary:

ACOs create incentives for health care providers to work together to treat an individual patient across care settings – including doctor’s offices, hospitals, and long-term care facilities. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary.

How will this work? And, will it work?

Let’s dig in.Continue reading…

Medical Loss Ratio: Putting Percentages and Politics Aside

Apr 5, 2011• 2

By CONNIE HARVEY

The Medical Loss Ratio (MLR) policy written into the Patient Protection and Affordable Care Act (PPACA) requires health insurance companies to deliver more direct value to consumers by mandating that they spend a higher percentage of premium dollars collected on medical care, as opposed to administrative costs.

The new law requires that at least 85 percent of all premium dollars collected by insurance companies for large employer plans be spent on healthcare services and quality improvement. For plans sold to individuals and small employers, at least 80 percent of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because of administrative costs or high profits, they must provide rebates to consumers starting in 2012.

While much debate exists on if this is requirement is “fair,” those on both side of the argument can agree that any reduction in administrative costs is a step in the right direction, especially if it frees up dollars to be spent in areas that will directly impact members. Moving beyond politics and percentages, payers can save up to 30-50 percent in operating costs when working with a partner to streamline back office processes. Examples include:

Claims processing, billing and provider maintenance: By outsourcing standard transactional services, payers can increase data quality and accelerate turnaround time on claims processing and lower costs.
Enrollment processing: Payers can turn to partners to handle standard enrollment functions including setting up new member accounts, staffing call centers for member questions and issuing satisfaction surveys.
Auditing solutions: Recovering funds from incorrectly paid claims is a service payers can outsource that can recoup funds by having an outsourcing partner track and even litigate wrongful payment claims on an insurance company’s behalf.
Customer care: Using a partner to help communicate plan information and answer questions from members allows payers to focus on quality of care and new product introduction, while reducing costs and complying with regulatory demands.Continue reading…