The Health Care Blog – Page 592 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

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How Using a ‘Scorecard’ Can Smooth Your Hospital’s Transition to a Population Health-based Reimbursement Model

Dec 4, 2012

By Russ Richmond, MD

The US healthcare system’s myriad of problems again seized the headlines recently with the release of an Institute of Medicine report, which found that 30 percent of healthcare spending in 2009 – around $750 billion – was wasted. Citing the “urgent need for a system-wide transformation,” the report blamed the lack of coordination at every point in the system for the massive amount of money wasted in healthcare each year.

One critical area in particular need of transformation is the business and operating model that drives healthcare in the US. There is broad-based agreement across the healthcare industry that the current fee-for-service model does not work, and needs to be changed. The sweeping health reform law enacted in 2010 included a range of more holistic, value-based payment structures that are now being referred to as “population health.”

Population health is an integrated care model that incentivizes the healthcare system to keep patients healthy, thus lowering costs and increasing quality. In this value-based healthcare approach, patient care is better coordinated and shared between different providers. Key population health models include:

· Bundled/Episodic Payments – This is where provider groups are reimbursed based on an expected cost for a clinically defined episode of care.
· Accountable Care Organizations (ACOs) – This new model ties provider reimbursement to quality and reduction in the total cost of care for a population of patients.

Healthcare: The Journal of Delivery Science and Innovation

Dec 3, 2012• 3

By Ashish Jha, MD

Healthcare: The Journal of Delivery Science and Innovation, a new journal promoting cutting edge research on innovation in health care delivery, has launched. The questions is, do we really need yet another journal? The short answer is yes. The longer answer is, absolutely yes. Here’s why.

The Need for New Knowledge on Healthcare Delivery

There is an urgent need to improve our mess of a health care system. Healthcare will consume about $2.8 trillion in 2012 – that’s an astronomical amount of money. To think of it in another way: spending in Intensive Care Units will make up 1% of all economic activity in the U.S. In a broader context, about 1 in 5 dollars in the economy will be spent on healthcare.

How will we actually spend the $2.8 trillion? Over a million doctors and nurses will see patients in hundreds of thousands of clinics, hospitals, nursing homes, and countless other settings. They will see patients who are sick and suffering and will make decisions about how to help them get better. These intensely personal decisions will be made in the context of a broader healthcare delivery system that is mindboggling diverse, complex, and fundamentally broken. We are probably wasting more on healthcare than we are spending on education. Yet, despite all this money and excess (or may be because of it), tens of thousands of Americans are dying each year because of poor quality, unsafe care. We can do so much better.

The Medicalization of Modern Life

Dec 3, 2012• 12

By Allen Frances, MD

This is the saddest moment in my 45 year career of studying, practicing, and teaching psychiatry.

The Board of Trustees of the American Psychiatric Association has given its final approval to a deeply flawed DSM 5 containing many changes that seem clearly unsafe and scientifically unsound. My best advice to clinicians, to the press, and to the general public – be skeptical and don’t follow DSM 5 blindly down a road likely to lead to massive over-diagnosis and harmful over-medication.

Just ignore the ten changes that make no sense.

Brief background. DSM 5 got off to a bad start and was never able to establish sure footing. Its leaders initially articulated a premature and unrealizable goal- to produce a paradigm shift in psychiatry. Excessive ambition combined with disorganized execution led inevitably to many ill conceived and risky proposals.

These were vigorously opposed. More than fifty mental health professional associations petitioned for an outside review of DSM 5 to provide an independent judgment of its supporting evidence and to evaluate the balance between its risks and benefits. Professional journals, the press, and the public also weighed in- expressing widespread astonishment about decisions that sometimes seemed not only to lack scientific support but also to defy common sense.

DSM 5 has neither been able to self correct nor willing to heed the advice of outsiders. It has instead created a mostly closed shop- circling the wagons and deaf to the repeated and widespread warnings that it would lead to massive misdiagnosis. Fortunately, some of its most egregiously risky and unsupportable proposals were eventually dropped under great external pressure (most notably ‘psychosis risk’, mixed anxiety/depression, internet and sex addiction, rape as a mental disorder, ‘hebephilia’, cumbersome personality ratings, and sharply lowered thresholds for many existing disorders). But APA stubbornly refused to sponsor any independent review and has given final approval to the ten reckless and untested ideas that are summarized below.

Can Too Much Preventive Care Be Hazardous to Your Health?

Dec 2, 2012• 22

By AL LEWIS

Politicians and pundits everywhere call for more disease prevention as a way to reduce healthcare costs. Certainly you cannot argue with the logic that “an ounce of prevention is worth a pound of cure.”

Or can you? It turns out that you can not only argue against that so-called logic, but – just as with cancer detection, which may have been done to excess in some protocols — you can mathematically prove that, at least for asthma, it takes a pound of prevention to avoid an ounce of cure.

The database of the Disease Management Purchasing Consortium Inc. (www.dismgmt.com) tracks both asthma drugs and visits to the emergency room (ER) and hospital stays associated with asthma. The average cost of an attack requiring an ER visit or inpatient stay is about $2000. The average cost to fill a prescription to prevent or recover from an asthma attack is about $100. It turns out that asthma attacks serious enough to send someone to the ER or hospital are rare indeed. In the commercially insured population, these attacks happen only about 3-4 times a year for every thousand people. (The rate is much greater for children insured by Medicaid; additional resources spent on prevention could very well be cost-effective for them.)

For a million-member health plan, that might be 3000 or 4000 attacks Yet that same million-member health plan is paying for hundreds of thousands of prescriptions designed to prevent or recover from asthma attacks. Depending on the health plan, the ratio of drugs prescribed to asthma events serious enough to generate an ER or hospital claim ranges from 60-to-1 to 133-to-1. Using those statistics of $2000 per event and $100 per prescription, a health plan would pay, on average, anywhere from $6000 to $13,300 to prescribe enough incremental drugs to enough incremental people to prevent a $2000 attack.

Averages lump together people at all risk levels. Surely some of those people really are at high enough risk of an attack that they are already inhaling their drugs regularly to prevent one, and have a “rescue inhaler” nearby. By definition their risk of attack is much greater than for low-risk people. Assume, very conservatively, that low-risk patients have a risk of attack which is half that of the average patient. This means that putting most low-risk patients on drugs costs $12,000 to $26,600 for every $2000 attack prevented.

Inside Baseball: Getting the Federal Exchange Right

Dec 2, 2012• 8

By ROBERT LASZEWSKI

The Obama administration just released another set of regulations, the “Draft Notice of Benefit and Payment Parameters for 2014.”

Among many other things in the 373 pages, they have announced their proposed assessments to cover the cost of running the federal exchange.

In order for the feds to administer the new insurance exchanges, they have proposed a fee of 3.5% of premium on each insurance policy sold in the exchanges (page 224).

This from the Kaiser Foundation 2011 “Primer” on Medicare:
“The costs of administering the Medicare program have remained low over the years––less than 2% of program expenditures.”

Many times over the years I have heard from advocates of a single-payer Canadian-style health plan that Medicare proves the federal government can do it cheaper than the private sector and should therefore take it all over.

So much for the notion that the feds are the model of insurance efficiency.

Under the new health care law’s Minimum Loss Ratio (MLR) provisions, insurance companies are limited to no more than 20% of premiums for expenses in the small group and individual markets.

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

Nov 30, 2012• 7

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.

Why Health Care Is Reshaping Itself

Nov 30, 2012• 39

By Joe Flower

Costs and revenue: This is the oxygen of any business, any organization. What are your revenue streams? How much does it cost you to produce them? Life is not just about breathing, but, if you don’t get that in-out equation right, there is nothing else life can be about.

Right now this enormous sector is turning itself inside out. It has turned the “transmogrification” setting to “warp.” Why? It’s all about the in-out. It’s all about increasingly desperate attempts to get that right — and the clear fact that we cannot know if we are getting it right.

Let’s do some school on the two sides of this equation. Let’s just go over the new weirdness, and the implications for you and your organization. Revenue first.

Hunting for True Revenue

In traditional health care (the way we did business until about five minutes ago) the revenue side was complicated in detail, but simple in concept: You do various procedures and tests and services, and you bill for them. You bill each item according to a code. You bill different payers; each has its own schedule of payments that you negotiate (or just get handed) every year. There are complications, such as people on Medicare with supplemental insurance, dual eligibles on Medicare and Medicaid, and self-pay patients who may or may not pay.

That’s the basic job: aggregating enough services that reimburse more than their real cost so that you can cover the costs of services that don’t reimburse well. This is cost-shifted, fee-for-service management. Cut back on those low-reimbursement services; pump up the high-reimbursement ones. Corral the docs you need to provide the services, provide the infrastructure and allocate costs across the system.

The incentives all point in the same direction. The revenue streams are all additive. The more you do of the moneymaking items on the list, the more money you make.

Meaningful Scrutiny for Meaningful Use

Nov 30, 2012• 13

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.

THCB Calendar Dec. 18 — Donald Berwick: Is a Bright Future for Health Care Possible?

Nov 30, 2012• 2

Donald Berwick, M.D., Former President and CEO, Institute for Healthcare Improvement; Former Administrator, Centers for Medicare and Medicaid Services. The second annual Lundberg Institute Lecture welcomes Dr. Berwick, who studies the management of health care systems with emphasis on using scientific methods and evidence-based medicine and comparative effectiveness research to improve the tradeoff among quality, safety and costs.

Event Description: In the ongoing difficult transition to the Obama health plan, Dr. Berwick’s analysis of these issues has been resisted, and even distorted, by some political opponents in the current public debate. Dr. Berwick concludes that “Any health-care funding plan that is just, equitable, civilized and humane must, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition redistributional.” Also, hear Dr. Berwick’s ideas on how true delivery system reform – changing care to better meet the needs of patients, families and communities – provides a sensible and effective alternative to the much-feared threat of rationing of care. Click here for more information and to purchase tickets.

MLF: Humanities
Location: SF Club Office
Time: 5:30 p.m. networking reception, 6 p.m. program
Cost: $20 standard, $8 members, $7 students (with valid ID)
Program Organizer: George Hammond
Also know: In association with The Lundberg Institute

What the Rick Scott Decision Says About the Future of Health Care in the U.S.

Nov 29, 2012• 12

By Dan Diamond

In 2009, Rick Scott founded Conservatives for Patients’ Rights, a health care pressure group opposed to President Obama’s health reforms.

In 2010, Scott ran for governor of Florida on a mission to repeal Obamacare.

In 2012, Scott … will work to implement Obamacare.

For some conservatives, it’s a shocking reversal. Leaders of Americans for Prosperity, the conservative organization backed by the influential Koch brothers, were publicly disappointed in the Florida governor — who not so long ago said the Affordable Care Act was “the biggest job killer in the history of the country.”

Now, it will be Scott’s job to help implement it.

Changing Tune

Given his prominence, Scott’s move from Obamacare opponent to grudging supporter may be the biggest symbolic shift on the law since its passage.

The Florida governor was reportedly pressured by state legislators to negotiate with federal officials over the ACA, once November’s election made clear that Obamacare was here to stay.

But Scott won’t be the last GOP official to change his tune. More health care groups in other Republican-led states are putting similar pressure on their leaders to opt into the ACA’s Medicaid expansion, in hopes of securing additional dollars for providers.