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From ZPICS to RADVS: The Alphabet Soup of Patient Charts and Payment Tracking

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By Conor Green

We’ve written about the Recovery Audit Contracts (RAC) program previously and thought it would be worthwhile to check back in on recent news in this space.  According to CMS, in FY 2012, RAC auditors collected $2.29B in 2012, nearly three times the amount recouped in 2011.

What’s apparent from this data is that a large step up in audit activity is obviously occurring, which will only accelerate in 2013 as auditors begin looking at evaluation and management (E&M) CPT codes commonly used by family physicians outside of the hospital setting.  In fact, when we match this CMS data against the latest results from the American Hospital Association’s RACTrac survey of 2,260 hospitals, it’s even more obvious that the level of activity around responding to requests for patient charts and managing the audit process is growing at an extremely rapid pace.

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2012 Digital Health Investment Activity: The View From the Valley

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By David Shaywitz, MD

Rock Health recently released a decidedly mixed report on the current state of Digital Health investing, as the data suggest many investors continue to tentatively explore the sector, but most have yet to make a serious commitment.

Overall, VC funding for digital health increased significantly over the past year, from just under $1B in 2011 to about $1.4B in 2012; 20% of this total was associated with just five deals: two raises for transparency companies, Castlight (targeting employees with high deductible plans looking to manage their costs) and GoHealth (targeting consumers contemplating purchase of health insurance); two raises for referral companies, Care.com (helps consumers find the right caregiver – defined broadly, as needs addressed include eldercare, child tutoring, babysitting, and pet care) and BestDoctors (helps employees find the right doctor), and one deal for 23andMe (a pioneering consumer genetics company).

Not surprisingly, the largest thematic area of investment ($237M) was “health consumer engagement,” comprised of companies that – like the first four above – help consumers or employees with healthcare purchases.   “Personal health tools and tracking,” the second leading category, captured $143M in funding last year.  “EMR/EHR” ($108M) and “hospital administration” ($78M) rounded out the list; the last two numbers seem shockingly low given the apparent size of these markets, and suggest both areas may be perceived as  firmly owned by incumbent players, and prohibitively difficult for new participants to enter.

Athenahealth’s just-announced acquisition of Epocrates highlights the competitive pressures even existing EMR companies face as they struggle for traction in an environment that seems to be increasingly dominated by a few large players, most notably Epic. “Our biggest obstacle,” Athenahealth CEO Jonathan Bush told Bloomberg Businessweek, “is that 70% of doctors don’t even know we exist.”  In contrast, I’ve suggested that a category I’d broadly define as EMR adjacencies may be primed for growth, as VC’s Stephen Kraus and Ambar Bhattacharyya have also discussed recently in this intelligent post.  The related area of care transitions is also attracting considerable entrepreneurial interest, including current Rock Health portfolio companies WellFrame and OpenPlacement, and TechStars alum Careport; it remains to be seen whether a robust business model will emerge here.

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Unscience

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By David Katz, MD

According to a widely circulated op-ed in the New York Times by Paul Campos, a law professor at the University of Colorado with whom I don’t believe I have ever managed to agree on anything, our “fear” of fat — namely, epidemic obesity — is, in a word, absurd. Prof. Campos is the author of a book entitled The Obesity Myth, and has established something of a cottage industry for some time contending that the fuss we make about epidemic obesity is all some government-manufactured conspiracy theory, or a confabulation serving the interests of the weight-loss-pharmaceutical complex.

In this instance, the op-ed was reacting to a meta-analysis, published last week in JAMA, and itself the subject of extensive media attention, indicating that mortality rates go up as obesity gets severe, but that mild obesity and overweight are actually associated with lower overall mortality than so-called “healthy” weight. This study — debunked for important deficiencies by many leading scientists around the country, and with important limitations acknowledged by its own authors — was treated by Prof. Campos as if a third tablet on the summit of Mount Sinai.

We’ll get into the details of the meta-anlysis shortly, but first I’d like to say: Treating science like a ping-pong ball is what’s absurd, and what scares the hell out of me. Treating any one study as if its findings annihilate the gradual, hard-earned accumulation of evidence over decades is absurd, and scares the hell out of me. Iconoclasts who get lots of attention just by refuting the conventional wisdom, and who are occasionally and importantly right, but far more often wrong — are often rather absurd, and scare the hell out of me.

And so does the obesity epidemic.

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Alice in Healthcareland

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By Michael Turpin

Alice: Cheshire-Puss, would you tell me, please, which way I ought to go from here?

Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don’t much care where.

Cheshire Cat: Then it doesn’t matter which way you go.

Alice: —So long as I get somewhere.

Cheshire Cat: Oh you’re sure to do that if you only walk long enough.

Lewis Carroll, The Adventures of Alice in Wonderland

2013 has arrived and employers now find themselves on the other side of a looking glass facing the surreal world of healthcare reform and a confusion of regulations promulgated by The Accountable Care Act (ACA) and its Queen of Hearts, HHS Secretary Sebelius. Many HR professionals delayed strategic planning for reform until there was absolute certainty arising out of the SCOTUS constitutionality ruling and the subsequent 2012 Presidential election. They are now waking up in ACA Wonderland with little time remaining to digest and react to the changes being imposed. A handful of proactive employers have begun, in earnest, to conduct reform risk assessments and financial modeling to understand the impacts and opportunities presented by reform. Others remain confused on which direction to take – uncertain how coverage and affordability guidelines might impact their costs.

If reform is indeed a thousand mile journey, many remain at the bottom of the rabbit hole – wondering whether 2013 will mark the beginning of the end for employer sponsored healthcare or the dawning of an era of meaningful market based reform in the US. HR and benefit professionals face a confusion of questions from their companions — CFO’s, CEOs, shareholders and analysts.

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The Fix that Failed

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By Dr. Wes

The new “fiscal cliff” legislation hailed by some as a “one-year doc fix” of the scheduled 26.5% sustainable growth rate (SGR) cut that was scheduled to take effect on 1 January 2013, has passed the Senate and House as part of the American Taxpayer Relief Act ( HR 8 ) goes to President Obama for his likely signature.

But was this “one-year doc fix” really a fix?

Not at all.

In fact, once again Congress has failed to resolve the ever-present sustainable growth rate cuts that repetitively surface year after year by kicking the proverbial can down the road another year.

The cost of the one year patch will be $25.1 billion dollars over 10 years and will be paid for almost entirely by health care cuts in other areas.

  • Hospitals (increasingly doctor-employers now, remember?) will see audits of their billings increase as efforts to recoup some $10.5 billion of “overcoding” charges are seen as the largest source of revenue for the one-year “fix.”
  • Hospitals will also see an extension of lower Medicaid payments to hospitals that treat a high number of uninsured or low-income beneficiaries, known as “disproportionate share hospitals” to find savings of about $4.2 billion.
  • Another $4.9 billion offset will be applied to the lowered bundled payments given for patients with end-stage renal disease – some of the sickest people receiving services from Medicare.

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Health Reform: The Political Storms Are Far from Over

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By Henry J. Aaron

The history of president Obama’s health reform bears an uncanny and disturbing similarity to the life cycle of a hurricane. With Sandy fresh in our memory, the similarity is not comforting.

Hurricanes have three phases. The front wall of the storm brings high winds, lightening, and rain. Next, at the hurricane’s center, or eye, the wind drops and the air warms. If one is at sea, the water may turn calm and warm, bringing the illusion that the storm has ended. As the storm moves on, wind and rain return, often with increased force. Those fooled by the calm who leave safe havens may be destroyed by what follows.

The life cycle of a hurricane will bear an eerie similarity to that of health reform. Nearly four years elapsed between president Obama’s initial call for national health reform until the bill became law and the Supreme Court ruled on its constitutionality. The political and legal turmoil was intense and continuous. The process was rancorous and the outcome in doubt from start to finish. It took a bitterly fought presidential election to put an end to this phase of the struggle.

Now, we are in a period of relative calm. The 2012 election settled the immediate fate of the Affordable Care Act (ACA). The candidate who swore to repeal it lost. The ACA was the major domestic legislative achievement of the victorious incumbent president who won reelection. Now, eighteen states are in process of designing rules for health insurance exchanges — the administrative entities that will manage implementation of the new law, the most important provisions of which will take effect one year hence. The other states will either leave implementation entirely to the federal government or share administrative responsibilities with federal agencies.

A huge amount of work remains to be done by October 1, 2013 when people can begin enrolling for insurance coverage in the new exchanges.

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What Does the Dartmouth Atlas Have to Say About the Politics of the ACA?

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By Anubhav Kaul, MD, Peter Bhandari, and Thom Walsh, PhD

Healthcare reform was a frontline topic during the recent presidential elections. The political warfare and misleading information around the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, has prevented the public from understanding its intended purpose, and has left many skeptical about its benefits. It is safe to say the general public has little to no idea about the quality of healthcare delivery in their respective regions.

In fact, it is not a far cry to claim that even healthcare professionals might not truly understand the issues facing American healthcare. Thus, most of the public is generally uninformed or misinformed about the population level problems facing the healthcare system. Therefore, it is quite simple for political parties to misguide the public and capitalize on their uninformed perceptions. If the public knew more about the flaws present in the healthcare system, perhaps they would better realize the PPACA is a reasonable start at addressing the failings of our system.

The Dartmouth Atlas Project is an online database which collects Medicare spending and utilization data from around the country. Information gathered from the database has shown immense variation in the way medical resources are utilized by even similar regions, communities, and health care organization. Evidence has repeatedly shown that, from a population perspective, areas that spend more on medical care do not consistently benefit from increased quality of care or patient wellbeing. Variation in the type of care delivered can be attributed to diverse incidence and prevalence of disease severity or the type of care a well- informed patient chooses. Variation in health care delivery is thus omnipresent and expected, because every patient is unique and medical innovation presents a growing number of care options to choose from.

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Is Russia ready for Health 2.0?

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By Pascal Lardier

The Wikipedia article about health care in Russia starts like this: “Russia has more physicians, hospitals, and health care workers than almost any other country in the world on a per capita basis. However, since the collapse of the Soviet Union, the health of the Russian population has declined considerably as a result of social, economic, and lifestyle changes.”

The Russian health care system has been going through major changes to improve access and quality of delivery. Currently, health care expenditures account for roughly 4% of the GDP (vs. 15.2% in the US) and this number is projected to grow to 10-14% over the next few years. The reform that started in 2009 will continue through 2015. It is expected that about 40% of resources allocated to health care restructuring will be spend on improving infrastructures, including information technology.

Recently I was invited to be part of the conference “Health Plus Technology: Russia and Global Outlook,” jointly sponsored by the Skolkovo Foundation, Life Sciences Angel Network and viamedix. I was part of the opening panel on ‘Technology Intervention to Healthcare,’ which was trying to answer to the following questions: What is fueling the Health 2.0 movement — in the US and globally? What countries/regions are leading the way? And what are the factors and conditions of the industry’s acceleration? The Russian health care system could use a shot of Health 2.0, and so the underlying question was: Is Russia ready for a paradigm shift from top down to bottom up health care innovation? Is Russia ready for Health 2.0?

At the same time, answering a request to produce a Health 2.0 Russia CIS, I took this speaking engagement as an opportunity to meet a few important stakeholders and potential partners. The question ‘Is Russia for Health 2.0?’ took another meaning for me.

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Can Big Data Save My Dad From Cancer?

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By Colin Hill

My father, Foster Hill, has stage III prostate cancer.

At 69 years old, he is a quiet man who was often told in his younger days that he resembled Muhammad Ali. He immigrated in his twenties to Canada from the small Caribbean nation of Antigua to look for opportunities beyond sugar cane and the tourism trade.

My father became a chemical technician for well-known oil refineries, while staying true to his real passion in life – playing organ music. Every Sunday, as he has since I can first remember, he plays the largest church organ in Sarnia, near Lake Huron, where he lives with my mother.

Like many men of his generation, he has always been wary for the medical system. For decades he avoided the test, known as PSA, that screens for prostate cancer. In September of this year, driven by pain he could no longer ignore, he went to his doctor who discovered a rock-hard prostate gland. The diagnosis, stage III prostate cancer, means that the cancer has already begun to spread, but is still potentially treatable.

Now retired, his long hours practicing the organ are punctuated with doctor visits to receive Lupron hormone therapy. The good news? The therapy is working. For now.

We don’t know what lies ahead. The first round of Lupron therapy is often effective, but a significant number of patients later develop a resistance to the drug.

The battle against my father’s cancer has only just begun.

This is where Big Data in healthcare can become a true lifesaver. Typically, in medicine, we know only what works for the majority of patients, not what will work for an individual. However, with enough data from enough people – we are talking hundreds of thousands, and sometimes, even millions of patients – we can apply analytics to build predictive models to discover which interventions will work. For the last twelve years, it has been my job to make that happen.

As CEO and founder of GNS Healthcare, I oversee a team of mathematicians, biologists, and data scientists as they crunch and decode healthcare data to unlock the mysteries of what treatment will work for specific patients.

My father’s cancer has given these efforts a new urgency and has raised a new question: Can I use Big Data to save my father’s life?

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A Well-Armed and Regulated Citizenry, Led by Heavily-Armed Teachers in Body Armor …

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By PETER UBEL, MD

Gun rights advocates are correct: a well armed principal might have reduced the death toll from the tragic elementary school shootings in Connecticut last week.

Gun carrying citizens might also have been able to take down the shooters in Aurora and Virginia Tech. To most people, after all, guns are about self-defense, not about committing crimes. As the old saying goes: “There has never been a mass shooting at a gun show.”

On the other hand, gun control advocates are correct to point out that mentally disturbed people like Adam Lanza would not be able to commit massacres if they were prevented from getting their hands on high-powered, semiautomatic weapons. They are also correct to point out that Americans have staggeringly easy access to weapons that far exceed what any sportsmanlike hunter would use during deer season.

In other words, figuring out what to do in the wake of the Connecticut massacre means recognizing the truth in both of these views. It means considering the possibility that the answer to reducing gun violence is a matter of both having more guns and less.

To understand what I mean by “both more and less,” I offer two analogies: a straightforward one about airport security, and a more unexpected one about breast cancer screening.

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