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Three ways to set payment rates

Picture 4 My suggestion last year that Massachusetts move away from the “free market” approach it uses to set hospital reimbursement* rates was not well received by the hospital world. But, this year, as people notice that their rates are being set by insurance companies in an unaccountable and unreviewable fashion (see this letter to the editor), more and more are saying, “Well, maybe. What would it look like?”

There is a range of options. Let me lay out some of them in summary fashion here, recognizing that a presentation in this forum is inherently simplistic. I would love to see a public forum in which these are debated.

One approach is that used by Maryland, with full determination of ratesfor each hospital by a rate-setting commission. Like public utility rate-setting, this involves lots of reviews and administrative procedures.

A variant of this is that we could have a state agency produce default rates (both fee-for-service and capitated) that serve as a state-wide rebuttal presumption. There could be prescribed (i.e., formulistic) add-on’s for geographic cost-of-living differences, teaching obligations, other government requirements, and the like. In this scenario, unless either the insurer or the provider made an evidentiary case for different rates in front of an administrative body, the agency’s presumed rates would apply.

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The Online Future of Patient Communication

Matthewholt An array of online communication tools, including email and beyond, can
enhance the physician-patient relationship and save you both time. But
for a variety of reasons, many physicians haven’t adopted online tools.
Matthew Holt, healthcare futurist, co-founder of the Health 2.0
Conference and founder of THCB
says that the day is coming fast when most physicians will communicate
this way with their patients. Are you already one of them?

Listen to the ReachMD broadcast or podcast — Then it’s your turn.

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PITFALLS OF PPACA #3 – Insurance Exchange Issues


Roger Collier

Although the Patient Protection and Affordable Care Act incorporates numerous health care system fixes, including new regulations to protect consumers, new rules for insurers, expansions of existing programs, new payment incentives and subsidies, and penalties for non-coverage, it mandates almost no structural changes, with one big exception: establishment of insurance exchanges in each state.

Insurance exchanges, designed to facilitate enrollees’ coverage choices within a competitive market, are not new. Exchange mechanisms have been used for several years for employee coverage selection by the federal government and by many states. And, since 2007, Massachusetts has operated what is probably closest in design to the PPACA concept—the Connector.

What’s been the experience so far?

The Federal Employees Health Benefit program provides by far the largest existing exchange, used by eight million government employees and retirees. Although employee surveys show that the FEHBP model works well in facilitating coverage choice, its market competition effect is limited. With no standard benefit package, apples-to-apples comparisons of coverage value are impossible, while with the government picking up some three-quarters of premium costs, employees may be relatively insensitive to price differences. While FEHBP presumably gains the lower premium advantages of large groups, the rate of premium increases has been close to that of the non-exchange private sector, according to a 2006 GAO report. (Premiums for California’s CalPERS, the largest state exchange, rose slightly faster than the private sector’s, according to the same report.)

Efforts have also been made by states and business groups to create exchanges for private sector employee coverage but, almost without exception, these have failed. In most cases, the primary problem was adverse selection: insurers marketing outside the exchange cherry-picked the best risks, leaving older and sicker groups to seek coverage via the exchange, which inevitably found itself in a death spiral as premiums rose and the better risks found coverage elsewhere.

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Would I Quit?

By , MD

I love being a doctor.  I like my patients (most of them), and have had a pretty good career.  One of the things I say to my older patients is that I want to keep them well enough so I can see them at my retirement party.  I just turned 48, so that would be 17 years… give or take.

Given what I have been reading lately, the “takes” may be getting the edge on the “gives.”  Apparently the department of justice and the FTC are getting active in the scrutiny of doctors.  From the Christian Science Monitor (via Dr. Wes):

This case is a watershed for two reasons:

First, until now the Federal Trade Commission, not the Justice Department, has taken the lead in prosecuting physicians. Since 2000, the FTC has brought about three dozen cases against physicians (all but one of which settled without any trial). But the FTC only has civil and administrative jurisdiction; the Antitrust Division has civil and criminal jurisdiction. The Sherman Act makes no distinction between civil and criminal “price fixing,” so in a case like this, it’s entirely a matter of prosecutorial discretion whether to charge the doctors with a civil or criminal offense.

Based on the descriptions in the Antitrust Division’s press release, there’s certainly no reason they couldn’t have prosecuted the doctors criminally and insisted upon prison sentences — and there’s little doubt such threats were made or implied to obtain the physicians’ agreement to the proposed “settlement.”

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.” (Emphasis by Dr. Wes)

The FTC has hinted at this when it’s said physicians must accept Medicare-based reimbursement schedules from insurance companies. But the DOJ has gone the final step and said, “Government prices are market prices,” in the form of the Idaho Industrial Commission’s fee schedule. The IIC administers the state’s worker compensation system and is composed of three commissioners appointed by the governor. This isn’t a quasi-private or semi-private entity. It’s a purely government operation.

What’s more, the Antitrust Division has linked a refusal to accept government price controls with a refusal to accept a “private” insurance company’s contract offer. This lives little doubt that antitrust regulators consider insurance party contracts the equivalent of government price controls — and physicians and patients have no choice but to accept them.

I must confess that my ADD makes reading legalese impossible (with out the use of a triple Ritalin latte), but the implication of this seems to be that I will be forced to accept what Medicare pays, and that contracts based on Medicare rates will follow suit.  I have also heard it told that lawmakers are considering making acceptance of Medicare a requirement for licensure.

This makes me ask the question: what would it take to make me quit practice?

Let me emphasize that when it comes to job satisfaction among PCP’s, I am at least in the top 25%, if not 10%.  When people ask me if I would recommend medicine, I enthusiastically say I would.  At least I have in the past.  I love the job – I don’t think there are many better.  But given the very small margins we work by in primary care, I am terrified by these possibilities.  I am a small businessman (no, I am not small; my business is small) who is providing a service and charging for it.  I get dragged around with a hook in my mouth by insurance companies and by government payors, but I do so by choice.  I stay in it, but I always know I can dump them if I choose.

These actions would change everything.  I don’t know why people would do one of the most taxing and responsibility intense jobs with the government forcing me to do it cheaply.  It makes me furious.  It makes me terrified.  It makes me consider studying homeopathy and selling herbs for huge profits.  OK, not the last one, but the non-regulated nature of the CAM providers makes me envy their control.  Yes, I am actually starting to envy CAM providers.

I am sure I am not alone in this.  I go home tired every day – emotionally drawn out by the emotional energy of propping up people’s lives, comforting their pain, and working to help heal them.  It’s a very draining job, but it is also very rewarding.  If primary care doctors are not allowed to be payed in accordance to their true value (the ones who actually save money for the system), the healthcare industry will be in deep trouble.  The patients would be in deep trouble.

Yo, politicians: we are dangling out here.  You are playing political chicken with our futures with the whole SGR issue, but so far you haven’t scared me off.  We are having the weight of reducing cost put on our backs and are then we may forced to eat the gruel HHS serves out.  Don’t do it.  We are not evil.  We are not in a conspiracy to steal money from the government.  It’s not about my Lexus (I drive a used Honda).  It’s not about my golfing holidays (I don’t own clubs).  It’s not about a cushy retirement (I won’t go there, but let’s just say that I have a lot of work to do in that area).  It’s about whether or not I will be around for my retirement party in 17 years.

I may just be selling herbs.

Rob Lamberts, MD, is a primary care physician practicing somewhere in the southeastern United States. He blogs regularly at Musings of a Distractible Mind, where this post first appeared. For some strange reason, he is often stopped by strangers on the street who mistake him for former Atlanta Braves star John Smoltz and ask “Hey, are you John Smoltz?” He is not John Smoltz. He is not a former major league baseball player. He is a primary care physician.

Apples to Grapefruits

Last week, I commented on a New York Times story that appeared Wednesday, June 2, attacking the Dartmouth Research.  The work that Dartmouth has done over the past two decades suggests that hospitals in some parts of the country are over-treating patients. Over-treatment means that patients who didn’t need to be in the hospital in the first place are exposed to the side effects of treatment as well as gruesome hospital- acquired infections, medication mix-ups and a host of other medical errors. Thus unnecessary care puts patients at risk while helping to drive health care bills heavenward— and suggests that we could rein in Medicare spending by squeezing some of that hazardous waste out of the system.  But according to the Times: “Data [from Dartmouth] Used to Justify Health Savings Effort is Sometimes Shaky.”

In Part 1 of this post I discussed what two of the Times’ sources told me about how the Times’ reporters misrepresented what they said. Both Harvard economist David Cutler and Yale’s Dr. Harlan M. Krumholz complained that the story made it seem that they are critics of the research, when in fact they agree with Dartmouth on the basic message of the data, and see the work as, in Krumholz’ words “pivotal to moving us forward  . . . we all agree that there is lots of waste and it is unevenly distributed across the country.” A third source in Washington D.C. who talked to the Times reporters confided that they seemed to have a clear agenda: “to take down Dartmouth.”

Today, I received evidence from yet another unhappy source—the Wisconsin Collaborative for HealthCare Quality, a voluntary consortium of organizations working to improve the quality and cost-effectiveness of healthcare in Wisconsin. Chris Queram, the Collaborative’s president, and Jack Bowhan, who guides the development of value metrics for the group, report that they tried to caution New York Times reporter Gardiner Harris that he was misusing their data,   “comparing apples to grapefruits,” and “jumping to a conclusions that  you just can’t make.”  Harris ignored their warnings.

As proof, they produced a series of e-mails that they sent to Harris, and with their permission, I’m quoting from those messages. But first, an excerpt from the Times’ story talking about the Collaborative’s data.

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Jamie Heywood and Health 2.0 Goes to Washington

Health 2.0 Goes to Washington is right around the corner on June 7th!  Earlier this week I was able steal time away from demo rehearsals and event prep to catch up with Jamie Heywood, Chairman and Co-Founder of PatientsLikeMe about some new extensions to their platform and his message to the Feds. Listen to Jamie discuss the role of the government vis a vis the entrepreneur community in advancing public health as well as some brand new data visualization tools available on PatientsLikeMe that will launch at the conference.

James Heywood, Patients Like Me, Interview

And there’s still time to register for Health 2.0 Goes to Washington here.

Dartmouth Analysis Again In the Cross Hairs

Reed Abelson and Gardiner Harris in the New York Times are questioning some of the key assumptions behind the Dartmouth Atlas of Health, which for twenty years has documented wide variations in Medicare utilization rates across the country and used that to claim huge savings could be obtained by rooting out waste in high-spending regions. In February, Harris reported on a commentary by Sloan-Kettering’s Peter Bach in the New England Journal of Medicine that argued the Dartmouth analysis failed to adjust for illness severity. I reported on the Medicare Payments Advisory Commission’s similar analysis here.

This time, the Times’ two most thoughtful health care reporters bring quality into the discussion. After describing a map in Office of Management and Budget director Peter Oszag’s office that divided the nation into low-spending beige regions and high-spending brown regions, they write:

For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better. . . The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

For documentation, the reporters used quality data generated by the Wisconsin Collaborative on Healthcare Quality, which I wrote about a month ago for The Fiscal Times.

This is an important debate. But as is often the case in journalism, the attempt to reduce complex realities into a single-factor analysis that can be summarized in a headline or a single “why this story is important” paragraph can leave a mistaken impression. Regional variation in Medicare spending is one indicator of gross overutilization. Something is happening when a hospital in McAllen, Texas does twice as many knee implants per Medicare beneficiary as a hospital in Baton Rouge, Louisiana. (An earlier version of this post compared McAllen to Rochester, MN, which actually has a slightly higher rate of knee implants per 1,000 Medicare enrollees.)

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EHR Usability

A few days ago, I wrote about Innovation, a term being overused in the EHR industry to the point where it lost all meaning. Here is another such term: Usability

Just like Innovation, Usability is the weapon du jour against the large and/or established EHR vendors. After all, it is common knowledge that these “legacy” products all look like old Windows applications and lack usability to the point of endangering patients’ lives. On the other hand, the new and innovative EHRs, anticipated to make their debut any day now, will have so much usability that users will intuitively know how to use them before even laying their eyes on the actual product. With this new generation of EHR technology, users will be up and running their medical practice in 5 minutes and everybody in the office will be able to complete their tasks in a fraction of the time it took with the clunky, legacy EMRs built in the 90s. And all this because the new EHRs have Usability, not functionality, a.k.a. bloat, not analytical business intelligence and definitely not massive integration, a.k.a. monolithic. No, this is the minimalist age of EHR haiku. Less is better, as long as it has Usability.

Usability, according to the Usability Professionals Association, is “the extent to which a product can be used by specified users to achieve specified goals with effectiveness, efficiency and satisfaction in a specified context of use [ISO 9241-11]”. Based on this definition, it stands to reason that any EHR prospective buyer should want a product with lots of Usability. Everybody wants to be effective, efficient and satisfied. So how does one go about finding such EHR?

Well, as always, CCHIT picked up the glove, and as always, CCHIT will be criticized for doing so. The 2011 Ambulatory EHR Certification includes Usability Ratings from 1 to 5 stars. The ratings are based on a Usability Testing Guide. Jurors are instructed to assess Usability of the product during and after the certification testing based on three criteria: Effectiveness, Efficiency and the subjective Satisfaction, as required by the ISO standard.  The tools for this assessment consist of 3 types of questionnaires:

  • After Scenario Questionnaire (ASQ) –jurors rate perceived efficiency (time and effort), learnability, and confidence after viewing scenarios

4 questions after each scenario –16 overall

  • Perceived Usability Questionnaire (PERUSE)–jurors rate screen-level design attributes based on reasonably observable characteristics

20 questions divided among each of the scenarios;

  • System Usability Survey (SUS) –jurors rate the assessment of usability, and satisfaction with the application

10 questions after all four scenarios have been demonstrated

The questions range from general subjective assessments in the ASQ, to very specific inquiries in PERUSE, like whether table headers are clearly indicative of the table columns content. Following the certification testing, results from all jurors are combined and weighted with more weight to specific answers and less to subjective overall impressions. The final result is the star rating, ranging from 1 to 5 Usability stars.

As of this writing, 19 Ambulatory EHRs have obtained CCHIT 2011 certification and all of them have been rated for Usability presumably according to the model described above. Of those, 12 achieved 5 stars, 6 have 4 stars and 1 has 3 stars. Amongst the 5 stars winners, one can find such “legacy” products as Epic, Allscripts and NextGen. The 4 and 3 stars awardees are rather obscure. So what can we learn from these results?

The futuristic EHR movement will probably dismiss these rankings as the usual CCHIT bias towards large vendors. Having gone through a full CCHIT certification process a couple of years ago, I can attest that the only large vendor bias I observed was in the functionality criteria, which seemed tailored to large products. Big problem. However, the testing and the jurors seemed very fair and competent. Looking at the CCHIT Usability Testing Guide, I cannot detect any bias towards any type of software. I would encourage folks to read the guide and form their own unbiased opinions. Are we then to assume that the 5 Stars EHRs have high Usability and therefore will provide satisfaction?

I don’t have a clear answer to this question. Obviously these EHRs have all their buttons and labels and text conforming to the Usability industry standards, and obviously a handful of jurors watching a vendor representative go through a bunch of preset tasks on a Webex screen felt comfortable that they understand and could use the system themselves without too much trouble. Many physicians feel the same way during vendor sales demos. However, efficiency and effectiveness can only be measured by repetitive use of the software in real life settings, for long periods of time and by a variety of users. Measuring satisfaction, the third pillar of Usability, is a different story altogether. There isn’t much satisfaction about anything in the physician community nowadays and when one is overwhelmed with patients, contemplating pay cuts every 30 days or so and bracing for unwelcome intrusion of regulators into one’s business, it’s hard to find joy in a piece of software, no matter how  well aligned the checkboxes are.

The bottom line for doctors looking for EHRs remains unchanged: caveat emptor. The footnote is that the bigger EHRs are as usable as the Usability standards dictate, just like they are as meaningful as the Meaningful Use standards dictate and when all is said and done it is still up to the individual physician user to pick the best EHR for his/her own Satisfaction.

Margalit Gur-Arie is COO at GenesysMD (Purkinje), an HIT company focusing on web based EHR/PMS and billing services for physicians. Prior to GenesysMD, Margalit was Director of Product Management at Essence/Purkinje and HIT Consultant for SSM Healthcare, a large non-profit hospital organization.

What Most Patients Don’t Know About the Residents Who Care For Them

Summary: Most hospital patients have no idea that the resident treating them could be coming to the end of a 30-hour shift. If he is exhausted, the resident’s judgment may be impaired. Yesterday, the union that represents some 13,000  residents and interns nationwide (CIRSEIU),  the American Medical Student Association (AMSA)  Public Citizen, the consumer advocacy organization based in Washington DC, as well as sleep scientists at the Harvard Medical School’s Division of Sleep, announced the results of survey published in BMC Medicine, revealing how little the public knows about residents’ hours.

Sleep deprivation is likely to lead to errors; residents themselves acknowledge that lack of sleep has caused them to make mistakes that harm, and sometimes even kill patients.  Exhaustion also affects how they feel about their patients. In 2008, the Institute of Medicine (IOM) recommended capping shifts at 16 hours, saying that longer shifts are unsafe for patients and residents themselves. The Accreditation Council on Graduate Medical Education (ACGME), the group that oversees the training of physicians in the U.S currently allows resident physicians to work for 30 consecutive hours up to twice per week.  The ACGME has been reviewing the IOM recommendations and is expected to announce its decision later this month.

The problem: residents represent cheap labor. Some say that the ACGME faces an inherent conflict of interest because its board is dominated by the trade associations for hospitals, doctors and medical schools that benefit from the residents’ long hours. Is this true?

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The NY Times, dogs, sores & Dartmouth critics

Today’s NY Times has a confused, woffly attack on Dartmouth from Reed Abelson & Gardiner Harris. This is a dreadful article. Period.

That the NY Times printed it is remarkable given the turnaround in thinking by David Leonhart in the Economix blog on the NY Times over the years to being a thoughtful Dartmouth proponent. It’s end even more remarkable that they didn’t even quote Buzz Cooper, probably the leading thoughtful Dartmouth critic. Longtime THCB readers will expecting me to start writing about dogs licking their sores….

Dartmouth has pretty much immediately refuted their article (and I suspect it didn’t take too much research). But what they really missed was the big announcement yesterday that HHS is now releasing a whole lot of datasets that researchers can use to put these and other data together and are encouraging the private payers to add to the mix (FD The Health 2.0 Developer Challenge is helping convene tech developers to work on this). Is it really true that Sacramento is cheap according to Dartmouth but expensive to private payers. And why?

There’s lots more work to be done here, but this article doesn’t help.

If you want a deep deep dive into this problem, here’s the article Daniel Gilden wrote on my blog last year. With lots of intelligent back and forth in the comments (including one from a Nobel Prize winner!).

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