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The Gold Plated Health Care System: What the New Numbers Tell Us about the State of the Economy

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By Jeff Goldsmith

For the third year in a row, national health spending in 2011 grew less than 4 percent, according to the CMS Office of the Actuary.  However, the report said modest rebounds in pharmaceutical spending and physician visits pointed toward an acceleration of costs in 2012 and beyond.  CMS’s analysts make much of the cyclical character of health spending’s relationship to economic growth and also forecast a doubling of cost growth in 2014 to coincide with the implementation of health reform.

This non-economist respectfully disagrees and believes the pause could be more durable, even after 2014.   Something deeper and more troublesome than the recession is at work here.  As observed last year, the health spending curve actually bent downward a decade ago, four years before the economic crisis. Health cost growth has now spent three years at a pre-Medicare (indeed, a pre-Kennedy Administration) low.

More Than The Recession Is At Work

Hospital inpatient admissions have been flat for nine years, and down for the past two, despite compelling incentives for hospitals to admit more patients. Even hospital outpatient volumes flat-lined in 2010 and 2011, after, seemingly, decades of near double-digit growth.  Physician office visits peaked eight years ago, in 2005, and fell 10 percent from 2009 to 2011 before a modest rebound late in 2011 — all this despite the irresistible power of fee-for-service incentives to induce demand.

The modest rebound in pharmaceutical spending (2.9 percent growth) in 2011 appears to have been a blip.  IMS Health reports that US pharmaceutical sales actually shrank in 2012, for the first time in recorded history, and that generic drugs vaulted to the high 70s as a percent of prescriptions!

There is no question that the recession’s 7-million increase in the uninsured depressed cost growth.  But the main reason health cost growth has been slowing for ten years is the steadily growing number of Americans — insured or otherwise — that cannot afford to use the health system.  The cost of health care may have played an unscripted role in the 2008 economic collapse.  A 2011 analysis published in Health Affairs found that after accounting for increased health premium contributions, out-of-pocket spending growth and general inflation, families had a princely $95 more a month to spend on non-health items in 2009 than a decade earlier.  To maintain their living standards, families doubled their household debt in just five years (2003-2008), a debt load that proved unsustainable.  When consumers began defaulting on their mortgages, credit cards and car loans, the resultant chain reaction brought down our financial markets, and nearly resulted in a depression.

By sucking up consumers’ income since 2008, the rising cost of health benefits has weighed heavily upon the recovery.  According to the 2012 Milliman Cost Index, the cost of health coverage rose by 32.8 percent from 2008 to 2012, while family income did not grow at all in real terms.  The total cost (employer and employee contributions plus OOP spending) of a standard PPO policy for a US family of four was $20,700, almost 42 percent of the US household median income in 2012.

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Brainstorming About the Future of Clinical Documentation

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By John Halamka, MD

In 2013, I’m focused on five major work streams:

· Meaningful Use Stage 2, including Electronic Medication Administration Records
· ICD10, including clinical documentation improvement and computer assisted coding
· Replacement of all Laboratory Information Systems
· Compliance/Regulatory priorities, including security program maturity
·Supporting the IT needs of our evolving Accountable Care Organization including analytics for care management

I’ve written about some of these themes in previous posts and each has their uncharted territory.

One component that crosses several of my goals is how electronic documentation should support structured data capture for ICD10 and ACO quality metrics.

How are most inpatient progress notes documented in hospitals today? The intern writes a note that is often copied by the resident which is often copied by the attending which informs the consultants who may not agree with content. The chart is a largely unreadable and sometimes questionably useful document created via individual contributions and not by the consensus of the care team. The content is sometimes typed, sometimes dictated, sometimes templated, and sometimes cut/pasted. There must be a better way.

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Trust But Verify: Why CMS Got It Right on EHR Oversight

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By Ashish Jha, MD

Yesterday’s New York Times headline read that “Medicare Is Faulted on Shift to Electronic Records.”  The story describes an Office of Inspector General (OIG) report, released November 29, 2012, that faults the Centers for Medicare and Medicaid Services (CMS) for not providing adequate oversight of the Meaningful Use incentive program. Going after “waste, fraud, and abuse” always makes good headlines, but in this case, the story is not so simple.

For those not intimately familiar with the CMS policy, in 2009, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act.  The program, administered through CMS and state Medicaid programs, created financial incentives for doctors (and other eligible professionals) and hospitals to adopt and “meaningfully use” a certified electronic health record (EHR).  To receive financial incentives, which began to be paid in May 2011, doctors and hospitals “attest” that they have met the meaningful use requirements, providing an affirmation for which they are held legally accountable.

The process works as follows: health care providers visit a CMS website, register, and enter data demonstrating that their EHRs are “certified” and that they met each of the individual requirements for meaningful use. Then they attest that that all the data they entered is true.  For example, a physician might have to report, to meet just one of the 20 meaningful use measures, how many prescriptions she wrote over the past 90 days, and how many she wrote electronically.  My conversations with colleagues suggest that it can take a lot of time for providers to gather all the data they need to “attest” to meeting Meaningful Use.  Then, CMS runs logic checks to ensure that the numbers entered make sense and, if there are no errors, they cut the provider a check. Through September, 2012, CMS paid out about $4 billion in incentives to 82,000 professionals and more than 1,400 hospitals.

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Meaningful Scrutiny for Meaningful Use

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By Nicolas Terry

Today the Office of the Inspector General (OIG) in the Department of Health and Human Services released a report, here, that is decidedly critical of CMS and ONC oversight of the Electronic Health Record (EHR) subsidy program.

Over the last couple of years there have been growing criticisms of the Meaningful Use program and its disbursement of potentially $30 billion in ARRA funds. I have detailed many of these concerns, such as the overall effectiveness of electronic records, my doubts as to the robustness of the first two Stages of Meaningful Use requirements, the safety record of the technologies, their ability to actually save money, their real-world interoperability, and their general usability in the healthcare workflow, here.

Recently, additional questions have been raised that go to the very heart of the subsidy program. First, the Center for Public Integrity, here,  and the New York Times, here, set off a firestorm with allegations of EHR use leading to extensive upcoding. This led to a scolding letter to the healthcare industry from Secretary Sebelius and the Attorney-General, here, and combative words back from some of the addressees, here.

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Outlawing Templated Notes in the Electronic Health Record

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By Jaan Sidorov, MD

It was just a matter of time until this would happen.

Buried in the middle of this New York Times article on The Ups and Downs of Electronic Medical Records is the observation that a Medicare administrative contractor dubbed National Government Services has announced that it, on behalf of CMS, will “deny payment” for medical services that are documented in an electronic health record (EHR) using “cloned documentation.”

The topic was covered more than 2 years ago. “Cloned documentation” is the widespread practice of copying, pasting past documentation in an EHR into the current encounter record to inflate the recorded patient evaluation to primarily justify a higher payment. Thanks to this OIG report, the Feds have figured out that the true value proposition for an EHR is not “meaningful use” but wasteful abuse.

In addition to congratulating the Times for their crack cutting-edge reporting, here is a prediction…

1. The mere threat of payment denials and the possibility of sanctions will prompt health administrators everywhere to announce at medical staff meetings that “cloned” notes are verboten.

2. Until the “templated note” functionality is deleted in future EHR software updates, physicians will respond to this latest edict from their administrators in the traditional manner: they’ll ignore it.

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Will the Rollout Of the Exchanges Be Delayed?

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By Jaan Sidorov, MD

While the Governor’s Mansion in Pennsylvania is currently under the control of the Republicans. I know the state’s Insurance Department is relatively apolitical. That’s why this September statement by Pennsylvania Commissioner Consedine before the U.S. House Ways and Means’ Subcommittee on Health is quite telling.

In it, Mr. Consedine describes how the Keystone state is encountering difficulties implementing an health insurance exchange. As readers will recall, exchanges are a key feature of the Affordable Care Act, because they’ll provide an online market that will enable individuals to obtain coverage.

According to Mr Consedine, CMS is failing to support a good law with the many regulatory details that turn a vague idea into a functioning reality. These failings include:

1. “Interim,” not “final” rules on eligibility, tax credit calculations, cost sharing and the role of brokers

2. Little formal guidance on the determination of the essential health benefit.

3. Delays in issuance of regulations on how states and Uncle Sam will split or mutually indemnify the myriad costs of the exchange and the Federal Data Hub.

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Out of the Box Thinking on Avoiding Hospital Readmissions. Stop Trying

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By Dr. Wes

As a cardiac electrophysiologist, I’m pretty far removed from public policy.  But I have to admit that I was interested in the latest move by CMS to cut their Medicare payment rates to hospitals by invoking pay cuts for hospital readmissions.  The Chicago Tribune‘s article is enlightening and filled with some interesting anecdotes after the first round of pay cuts were implemented:

(1) The vast majority of Illinois hospitals were penalized (112 of 128)

(2)  Heart failure, heart attack, and pneumonia patients were targeted first because they are viewed as “obvious.”

(3) “A lot of places have put a lot of work and not seen improvement,” said Dr. Kenneth Sands, senior vice president for quality at Beth Israel.

(4) Even the nation’s #1 Best Hospital (according to US News and World Report) lost out.

So what’s a hospital to do?

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The EHR “Final Rule” (Finally)

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By Ashish Jha, MD

Six months to the day after the Centers for Medicare and Medicaid Services (CMS) released the “preliminary rules” for Meaningful Use, the final rules are in.  For clinicians and policymakers who want to see Electronic Health Records (EHRs) play a key role in driving improvements in the healthcare system, there’s a lot to like here.

For the Office of the National Coordinator (ONC), the agency that oversees the federal health information technology incentive program, the Meaningful Use rules are a balancing act. On one hand, ONC wants to get as many clinicians and hospitals on board with simply adopting EHRs (and thus, the need to set a low bar). On the other hand, they want to ensure that once people start using EHRs, they are using them in a “meaningful” way to drive improvements in care (and thus, the need to set a high bar).  I think ONC got that balance just about right.

Let me begin with a little background.  In 2009, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act, setting aside about $30 billion for incentives for ambulatory care providers and acute-care hospitals to adopt and “meaningfully use” EHRs.  Congress specified that the executive branch would define Meaningful Use (MU) and would do so in three stages.  The first stage was finalized in 2010 and its goals were simple – start getting doctors and hospitals on board with the use of EHRs.  By most metrics, stage 1 was quite successful.  The proportion of doctors and hospitals using EHRs jumped in 2011, and all signs suggested continued progress in 2012.  Through July 2012, approximately 117,000 eligible professionals and 3,600 hospitals have received some sort of incentive payment.

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To Gauge Hospital Quality, Patients Deserve More Outcome Measures

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By PETER PRONOVOST, MD

Patients, providers and the public have much to celebrate. Recently, the Centers for Medicare and Medicaid Services’ Hospital Compare website added central line-associated bloodstream infections in intensive care units to its list of publicly reported quality of care measures for individual hospitals.

Why is this so important? There is universal support for the idea that the U.S. health care system should pay for value rather than volume, for the results we achieve rather than efforts we make. Health care needs outcome measures for the thousands of procedures and diagnoses that patients encounter. Yet we have few such measures and instead must gauge quality by looking to other public data, such as process of care measures (whether patients received therapies shown to improve outcomes) and results of patient surveys rating their hospital experiences.

Unfortunately, we lack a national approach to producing the large number of valid, reliable outcome measures that patients deserve. This is no easy task. Developing these measures is challenging and requires investments that haven’t yet been made.

The addition of bloodstream infections data is a huge step forward. These potentially lethal complications, measured using Centers for Disease Control and Prevention’s methods, are among the most accurately measured outcomes. In addition, the science of how to significantly reduce these infections is mature, and hundreds of hospitals of all types and sizes have nearly eliminated them. A program to reduce these infections that started at Johns Hopkins Hospital was spread throughout Michigan, and is now being implemented throughout the U.S., demonstrating substantial reductions.

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CMS Misses the Mark on Home Hemodialysis

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By Joe Turk

We are disappointed that CMS’ recently proposed rules again miss a clear opportunity to address home hemodialysis access for Medicare patients.

Recent clinical research demonstrates the significant benefits of more frequent dialysis. Better clinical outcomes, lower mortality, and higher survival – the list goes on.  Recognizing the strength of this data (and heeding the calls of numerous patient advocates), large national commercial insurers, including UnitedHealthcare and Aetna, recently clarified their policies, granting greater access to home, and more frequent, hemodialysis for commercial patients.

In recent weeks, CMS’ proposed rules for both Physician Fee Schedule and ESRD PPS Rule came out.  In the proposed Physician Fee Schedule, physician payment will increase for in-center dialysis, but will remain essentially unchanged for home dialysis.  Physicians are already paid generally 20% less to care for their home dialysis patients, and under the proposed rule for physician payment this disparity would grow.  In the proposed ESRD PPS Rule, there were no mentions of home hemodialysis.  None.  In the rule, CMS proposes a 2.5% increase to the bundled payment rate, representing hundreds of millions dollars of additional money going to the Medicare dialysis program.  None of this increase is going to address the known payment issues impacting access to more frequent home hemodialysis.

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