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Why ACOs Won’t Work

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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

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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

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

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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?

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

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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…

Invalidated Results Watch

By MARYA ZILBERBERG, MD

My friend Ivan Oransky runs a highly successful blog called Retraction Watch; if you have not yet discovered it, you should! In it he and his colleague Adam Marcus document (with shocking regularity) retractions of scientific papers. While most of the studies are from the bench setting, some are in the clinical arena. One of the questions they have raised is what should happen with citations of these retracted studies by other researchers? How do we deal with this proliferation of oftentimes fraudulent and occasionally simply mistaken data?

A more subtle but no less difficult conundrum arises when papers cited are recognized to be of poor quality, yet they are used to develop defense for one’s theses. The latest case in point comes from the paper I discussed at length yesterday, describing the success of the Keystone VAP prevention initiative. And even though I am very critical of the data, I do not mean to single out these particular researchers. In fact, because I am intimately familiar with the literature in this area, I can judge what is being cited. I have seen similar transgressions from other authors, and I am sure that they are ubiquitous. But let me be specific.

In the Methods section on page 306, the investigators lay out the rationale for their approach (bundles) by stating that the “ventilator care bundle has been an effective strategy to reduce VAP…” As supporting evidence they cite references #16-19. Well, it just so happens that these are the references that yours truly had included in her systematic review of the VAP bundle studies, and the conclusions of that review are largely summarized here. I hope that you will forgive me for citing myself again:Continue reading…

Medical Loss Ratios – Again!

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By ROGER COLLIER

A new study, reported in the American Journal of Managed Care, seems likely to add more heat to the continuing medical loss ratio controversy.

The Accountable Care Act effectively mandates that health insurers achieve MLRs of 85 percent for large group business and 80 percent for small group and individual business, with insurers not meeting these thresholds required to make rebates to affected policyholders. However, the ACA allows HHS to issue a waiver if the requirement would disrupt a state’s insurance market. So far, an individual coverage waiver has been granted to the State of Maine, with eight other states’ waiver requests being considered. The study reported by AJMC examined individual coverage data from health insurer filings to state regulators, as reported to the National Association of Insurance Commissioners. For each state (except California, where most health insurers report to a state agency other than the Insurance Commissioner), the study computed the number of individuals with coverage (in terms of enrollee-years), the number of insurers offering coverage, and the medical loss ratios (recomputed to reflect differences between ACA’s definition of MLR and that used by the NAIC).

Based on this data, the study went on to estimate the number of enrollees in plans failing the ACA’s 80 percent threshold, and the number of higher-risk individuals who might have difficulty in finding coverage if their insurer exited the market. At first sight, the findings seem dramatic and very different from the expectations of the MLR provision’s Senate authors. The AJMC article estimates that in nine states (Arkansas, Illinois, Louisiana, Nebraska, New Hampshire, Oklahoma, Rhode Island, Wyoming, and West Virginia) at least half of the individual health insurers missed the 80 percent threshold in 2009, while in twelve states (Arkansas, Arizona, Florida, Illinois, Indiana, New Hampshire, Nevada, South Carolina, Tennessee, Texas, Virginia, and West Virginia) more than half of the enrollees were covered by insurers failing the standard, with some two million individuals nationally covered by such insurers. The study then projected that overall more than a hundred thousand enrollees (with more than ten thousand in each of Florida, Illinois, Texas, and Virginia) would find it difficult or impossible to find coverage if their non-MLR-compliant insurers exited the market. If the study’s findings are accurate, somewhere between a dozen and twenty states could reasonably demand waivers of the individual market MLR standard.

However, as the authors note, there were significant study limitations as well as possible source data inaccuracies. Enrollment in health plans offered by life insurers was generally omitted, as was all data from California. Additionally, the findings are dependent on state reporting to the NAIC, something that some of the data shown in the article suggests may be unreliable. For example, Maine—the only state so far granted an MLR waiver—is shown as having an average MLR well above the 80 percent threshold, while insurers in Michigan are shown as having an average MLR in excess of 1.0 in both 2002 and 2009—an unlikely consistently money-losing trend in a large state. Continue reading…

Why Primary Care Parity Matters

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By PAUL FISCHER, MD

After an exciting and challenging day of caring for patients and teaching students, a third-year medical student on his family medicine rotation says to me, “I really like what you do, but I just cannot afford to go into family practice.”  I realized that by “afford,” he was referring not only to finances but also to the expectations of his parents, friends, and medical school. After spending 35 wonderful years as a family doctor, I have been “dissed’ by a kid who wants to become a dermatologist.

So I am of two minds.  Part of me is fulfilled by being needed, loved, and respected by my patients.

Over time, they have increasingly looked to me to diagnosis, advise, reassure, and guide them through a complex healthcare environment in which few others offer them help.  Another part of me sees that what I do is increasingly devalued by forces outside the exam room ― those who pay for health care, those who question the “medical necessity” of each test I order or drug I prescribe, and those in medicine who are more likely to know a procedure’s CPT code than a patient’s name.

We are in this position because we have failed to define ourselves, instead allowing others to perpetuate myths about what we do.  The first such myth is that what we do is easy.  Nothing can be further from the truth.  In about 15 minutes, we are asked to treat a long list of chronic problems (e.g., diabetes, obesity, hypertension), resolve a few new problems (eg cough, headache), address preventative health recommendations (eg, smoking, flu shot), integrate the psychosocial issues that  impact the patient’s health, and figure out how to get it all paid for by an insurance company using  codes that don’t really match either my patient’s problems or the care I provide.  Oh, and by the way, can you look at this rash and fill this prescription for my husband? Recent research has shown that an average primary care visit is 50% more complex than a visit to a cardiologist and five times more complex than one to a psychiatrist. So no, it is not easy.

The second myth is that it requires less training than other medical specialties.  This has resulted in some assuming that primary care can be left to “midlevel” clinicians.  While physician assistants and nurse practitioners can work effectively in primary care settings, it is a mistake to believe that they  provide equivalent care to patients with complex problems, and we have suffered by the wide acceptance of this assumption.   OR techs can work effectively in an operating room, but no one suggests that they replace surgeons.

Continue reading…

Another Swing at the Windmill of VAP

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By MARYA ZILBERBERG, MD

Sorry, folks, but I have been so swamped with work that I have been unable to produce anything cogent here. I see today as a gift day, as my plans to travel to SHEA were foiled by mother nature’s sense of humor. So, here I am trying to catch up on some reading and writing before the next big thing. To be sure, I have not been wasting time, but have completed some rather interesting analyses and ruminations, which, if I am lucky, I will be able to share with you in a few weeks.

Anyhow, I am finally taking a very close look at the much touted Keystone VAP prevention study. I have written quite a bit about VAP prevention here, and my diatribes about the value proposition of “evidence” in this area are well known and tiresome to my reader by now. Yet, I must dissect the most recent installment in this fallacy-laden field, where random chance occurrences and willful reclassifications are deemed causal of dramatic performance improvements.

So, the paper. Here is the link to the abstract, and if you subscribe to the journal, you can read the whole study. But fear not, I will describe it to you in detail.

In its design it was quite similar to the central line-associated blood stream infection prevention study published in the New England Journal in 2006, and similarly the sample frame included Keystone ICUs in Michigan. Now, recall that the reason this demonstration project happened in Michigan is because of their astronomical healthcare-associated infection (HAI) rates. Just to digress briefly, I am sure you have all heard of MRSA; but have you heard of VRSA? VRSA stands for vancomycin-resistant Staphylococcus aureus, MRSA’s even more troubling cousin, vancomycin being a drug that MRSA is susceptible to. Now, thankfully, VRSA has not yet emerged as an endemic phenomenon, but of the handful of cases of this virtually untreatable scourge that has been reported, Michigan has had plurality of them. So, you get the picture: Michigan is an outlier (and not in the desirable direction) when it comes to HAIs.Continue reading…

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