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Will Republicans Be Spoilers Or Problem Solvers on Health Care Reform?

Sep 2, 2009• 13

By BRIAN KLEPPER and DAVID C. KIBBE

In theory Congress’ return from recess next week could offer a new beginning to the health care reform process, giving everyone a chance to take a deep breath and recalibrate the components of change.

Nine months into the wrangling around a new Administration, the talk-show right has seemingly hijacked the discussion on health
care, Democrats’ signature issue, with the standard tools that demagogues have always used: leveraging popular prejudices with oversimplification, hyperbole, and distortion. The die-hard GOP faithful’s leaders – Gingrich, Palin and others (see this off-the-deep-end speech by Rep. Mike Rogers (R-Mich)) – are of course playing spoilers, independent of the cost. They hope to goad centrist voters into abandoning the Democrats so they can retake power. Witness South Carolina Republican Jim DeMint’s comment, “If we’re able to defeat Obama on this, it will be his Waterloo. It will break him.”

The problem with this approach is that we’re still early on in our national discussion about change and about health care. An increasing number of Americans may be frustrated with Democrats, but after 10 years of Republican rule, few Americans see them as a party of fresh ideas or having an interest in helping anyone but the wealthy and powerful. Americans may have short memories, but they likely still recall that Republicans were just thrown out for a multitude of significant sins. So if everyone you know sends around Obama-as-Hitler arguments, heckling and hoping the Dems will quickly self-destruct may seem like a reasonable strategy. It is doubtful, however, that the other 75 percent of us buy that thinking.

Tweaking Medical Education to Leverage EHRs

Sep 2, 2009

Tweaking Medical Education to Leverage EHRs

By GLENN LAFFEL

Author’s Note:The purpose of this 5-part series is to make the case for implementing a widespread, systematic approach to HIT education in medical schools and continuing medical education programs for physicians. Previous posts reviewed challenges posed by the HIT Deluge and the Impact of EHRs on Medical Education.

EHRs have begun an inevitable march into the lives of all physicians. The US government has established an ambitious plan for their deployment, and providers seem both eager to comply and anxious to avoid financial penalties associated with not doing so.

But as described in Part II of this series, EHRs can have deleterious effects on the education of medical students and residents. These include disrupting interactive sessions involving educators and trainees and complicating patient-physician communication.

Jay Morrow and Alison Dobbie of Texas Southwestern Medical Center argue that much of this negative impact derives from a mistaken perception that EHRs are a health care delivery method rather than a medium through which physicians deliver care. It follows from this argument that the quality-improving, cost-reducing benefits of EHRs can only be realized if multiple systems and user-based factors are aligned to optimize utilization of the new medium.

Medical educators can begin the alignment process by developing answers these 3 questions:

When Should EHR Education Begin?
Arguably, the process should begin as early as possible. Since the 1970s, medical curricula have included non-science oriented courses such as “Introduction to the Patient,” “Communication Skills” and the like. These courses present ideal opportunities to introduce the new medium.

Students in such courses should be taught to navigate through and use basic EHR functions such as order entry, lab look-up, messaging and charting. Ideally, this exposure should occur outside the clinical setting so trainees can focus on mastering the EHR interface itself. At this time, it should be possible to identify those in need of extra help with keyboard skills, and to provide assistance as necessary.

Keyboarding skills should not be assumed, even for the current generation of physician-trainees. In a 2007 focus group of first-year students at Texas Southwestern for example, 62% of the participants expressed concerns about such skills, and many claimed to have better texting than typing abilities.

If students master keyboarding and EHR navigation skills before starting their clinical rotations, they can focus the latter time on traditional learning exercises, such as clinical reasoning, diagnosis, acquiring medical procedure skills and interacting with ancillary caregivers and patients.

After Reform

Sep 1, 2009

Ornish Alienates HuffPo’s Class Warriors

Sep 1, 2009• 3

By MERRILL GOOZNER Goozner

Ariana Huffington recently anointed diet-and-exercise guru Dean Ornish as her chief medical correspondent. With all the guff her site had taken from the science-based medicine crowd for giving free rein to anti-vaccinists, faith healers and the no-evidence-needed alternative medicine freaks, I thought it was a smart move — a tack toward the responsible center, if you will.But in a post this week, Ornish recounted his 14-year-battle to get Medicare to pay for a pilot project to test lifestyle intervention as a cure for heart disease (which wouldn’t save Medicare money, but would save more lives for the same money expended as, say, giving those people cholesterol-lowering medication). What he drew from his saga was that the government can’t be trusted to run health care, and that health care reformers needed to rise above the right-left divide and unite around reimbursing physicians for keeping people well.It was a classic case of crunchy granola versus the class warriors. The comments section was overwhelmed with hostile attacks on Ornish’s above-the-fray moralizing. The commentators defended single-payer, pointed out the indiscriminate nature of many diseases, articulated the special needs of the poor whose stress and multiple jobs make them especially prone to disease, etc. etc. What was striking was how thoughtful and well-reasoned many of the comments were, a far cry from conspiracy-minded rants of that usually dominate the comments space.

Time for a Closer Look (and Lower Costs)

Sep 1, 2009• 3

By ROGER COLLIER

One of the effects of the exaggerations, misinterpretations, distortions, and downright lies about Congressional health care reform proposals—mostly from far-right politicians and their hangers-on—has been to deter more objective analysis.

In fact, two key features of the current Senate and House bills—the insurance exchange structure, and the controversial public plan option—need much closer examination, and possibly considerable revision.

FIRST, the insurance exchange structure. It’s a reasonable concept: if insurers were to compete via an exchange for individual and small group business, they would offer highly competitive rates to attract as much business as possible.

Unfortunately, as a Health Affairs blog piece by the former managers of the PacAdvantage exchange makes clear, it isn’t as simple as that. PacAdvantage, which served some 150,000 California small business employees, ultimately collapsed and closed its doors in 2006, a victim of adverse selection. As the PacAdvantage managers explain, having insurers also marketing directly to small groups allowed them to cherry pick the best risks, leaving the less-good risks in the exchange. As adverse selection continued its work, the exchange went into a death spiral with worsening exchange risk leading to higher rates, leading to the least-bad risks leaving the exchange, leading to even higher exchange rates, and so on.

The obvious way to avoid this problem in national reform is to require that ALL individuals and ALL small group employees be included in each regional exchange. Unfortunately, health reforming politicians have adopted “you’ll be able to retain your existing coverage” as part of their reform pitch. It’s understandable, since forcing groups to switch to an exchange is not going to help the prospects of legislation that’s already in trouble, but it instantly opens the door to cherry-picking by insurers, with the prospect of failure of every exchange.

Is there a solution? Rather than imposing an additional mandate on businesses, current bills could be modified to require that all insurers participate in the exchange, and that their exchange rates be no higher than those offered directly to any insured group, thereby forcing insurers to treat exchange and non-exchange insureds as part of the same pool and avoiding the adverse selection effect.

SECOND, the public plan option. So far, the political controversy has focused on the obvious arguments for and against the public plan: it would force insurers to offer better rates, but it could push millions of Americans out of private coverage into a government program.

A close look at data from Medicare Advantage, in which private plans compete with the traditional government option, indicates that both arguments are questionable.

MA’s private coverage alternative is indeed more costly than traditional Medicare, by some 13 percent—more than $11 billion in 2009. However, most of the difference is due to the additional benefits offered. The private plans’ 2009 base bids to CMS—excluding the cost of additional benefits—averaged 102 percent of FFS rates, with HMO and PPO bids averaging just 99 percent of FFS.

These base bid rates include profit and administrative costs, in contrast to the FFS rates which exclude both administration and financing costs. Even the most conservative estimate of these additional costs would put fully-loaded FFS rates above those of the average private plan.

The comparison of Medicare FFS and MA plans is further skewed by the MA bid process. Not only do the ridiculously high “county benchmarks” used in payment setting favor high bids, but the payment formula (which discounts the difference between the base bid and the benchmark, but not the base bid itself) encourages excessive loading of profit and administration into the base bid. In other words, in a more rationally designed competitive environment, average private plan costs should be significantly below those of traditional Medicare.

In terms of the current Senate Health and House bills, with proposed payment rates higher than Medicare, the public plan looks even less competitive. While there would undoubtedly be some who would opt for a government program over a private plan, the vast majority are likely to choose the lower cost option, with the public plan more likely to increase health care costs than decrease them.

Are there compromises that might satisfy liberal politicians’ desires for a public plan? One possibility is to build a “trigger” into the bills that would allow creation of public plans only where private plans fail to meet cost control benchmarks.

Another possibility is to build on the existing public plan for the non-elderly: Medicaid. Congressional committees are already proposing Medicaid expansions, while simultaneously proposing subsidies to make exchange participation more affordable for non-Medicaid eligibles, leading to an anomalous situation in which one family may receive free Medicaid coverage, while a second family whose income is only a few dollars greater is forced to pay a significant part of the exchange premium in order to comply with an individual coverage mandate.

A less costly and unfair approach might be to allow individuals to buy-in to Medicaid. Since average per capita Medicaid costs are approximately $2000, compared with estimated subsidy costs of close to $4000 (based on CBO estimates, in 2009 dollars), this would eliminate both the anomaly and the need for subsidies, with a potential dramatic reduction in the ten-year cost of reform of some $770 billion.

Roger Collier was formerly CEO of a national health care consulting firm. His experience includes the design and implementation of innovative health care programs for HMOs, health insurers, and state and federal agencies. He is editor of Health Care Reform Update .

More on health care reform by this author:

The Health Care Cost Shifting Myth

Aug 31, 2009• 58

By AUSTIN FRAKT

There is a pervasive notion that providers of health care can make up for lower payments received from one set of payers (e.g. Medicare, Medicaid, uncompensated care) by increasing prices charged to other payers (e.g. private insurance companies). To the extent it occurs cost shifting offsets attempts to control overall health care costs through reduced fees paid by public insurers. It makes “bending the cost curve” harder.

However, it is a myth that providers can fully shift costs. That they could do so violates, in most cases, principles of economics. Moreover, empirical evidence suggests cost shifting, where it occurs, is done so a minimal level: only a small fraction of decreased payments by public payers shows up as an increase in charges to private payers. Losses associated with one payer are largely not recouped from another.

Some take price discrimination as evidence of cost shifting. However, price differentials are not necessarily the recouping of losses from one payer by overcharging another. As described in the 2001 Health Affairs paper by Richard Frank “Prescription Drug Prices: Why Do Some Pay More Than Others Do?” price discrimination can be due to unequal bargaining power across classes of purchasers. In other words, in maximizing profits, providers charge different prices to different market segments. In such cases, by definition, profits cannot be further increased by cost shifting.

It’s true that cost shifting could theoretically occur under specific conditions. One case is when a provider has monopoly power that it has not fully exploited, for instance charging private insurers less than it could. More fully exploiting its monopoly power with respect to those payers, such a provider can recoup losses. Still, there is a limit to how much of the lost revenue can be recouped. The monopoly profit-maximizing price level imposes a ceiling.

Another instance in which cost shifting could occur is in a more competitive market in which all providers have roughly the same level of undercompensated care. All competitors in such a market might choose to increase charges to private insurers by the same amount, maintaining their relative competitive positions. However, if one competitor elects to reduce costs or reduce its burden of undercompensated care, it might be able to charge private insurers less then others, thereby increasing its market share. So, cost shifting may not be a stable equilibrium.

The literature provides estimates of the extent of cost shifting in cases where it is theoretically possible. The March 2009 MedPAC Report to Congress: Medicare Payment Policy (Chapter 2A) includes a summary of such evidence. It concludes that the dominant dynamic in the market is that hospitals with strong market power have abundant financial resources. In turn they have a high cost structure (perhaps due to provision of relatively higher quality care) that causes lower or negative Medicare margins. In contrast, hospitals that are forced to run efficiently are adequately funded by Medicare payments. That is, Medicare payments are sufficient to cover costs but some hospitals run inefficiently and make it appear otherwise. Therefore, MedPAC has concluded that increased Medicare payments to hospitals would not reduce rates charged to private insurers. The primary effect would be to induce lower cost operations.

The MedPAC report cites mixed evidence from the literature on the level of cost shifting, as does the December 2008 CBO report Key Issues in Analyzing Major Health Insurance Proposals. A few studies from the 1980s found evidence of cost shifting at a rate of up to fifty cents on the dollar. However, conditions in the 1990s were less conducive to cost shifting and the rates were found to be on the order of a 0.4 to 1.7 percent increase in private payments in response to a 10 percent reduction in Medicare and Medicaid fees. In a 2005 study of geographic variation in health costs of the Federal Employees Health Benefits Program, the GAO concluded that the considerable variation it found was not due to variations in payments from other payers.

In conclusion, cost shifting is not as large and widespread a phenomenon as some would believe. Under some market conditions it is inconsistent with economic theory. And, while it can occur under other market conditions it is far from a dollar-for-dollar shift in costs. The most recent studies of the phenomenon find little evidence of cost shifting or very low levels of it. Claims that reductions in public payments for health care will necessarily show up as commensurate increases in private payments are unfounded.

Austin Frakt blogs at The Incidental Economist and is a health economist and principal investigator with the Department of Veterans Affairs’ Health Services Research and Development Service and assistant professor with the Boston University School of Public Health, Department of Health Policy and Management. The views expressed in this post are his alone and do not necessarily reflect the positions of Boston University or the Department of Veterans Affairs.

Separating Fact from Fiction and Health from Health Care

Aug 31, 2009• 23

By JAMES S. MARKS, ROBERT WOOD JOHNSON FOUNDATION

In an editorial on Wednesday, The New York Times debunks the often-cited claim that America has the best health care system in the world. For the politicians who routinely use this as a plank in their efforts to stifle reform, the Urban Institute study (disclosure: this study was funded by the Robert Wood Johnson Foundation) is an objective rebuke. The U.S. health care system is not the best – far from it. And Americans, with a life expectancy that still trails many other countries, are not the healthiest people in the world.

Clearly, this country desperately needs health reform. But the study, the editorial, and the entire current discourse around health care neglect an important truth about reform: fixing the health care system alone will not significantly improve Americans’ health.

For example: medical spending consumes 16 percent of the U.S. GDP and is projected to reach a staggering one dollar for every five earned by 2018. And yet, only 10-15 percent of preventable mortality is linked to health care. This and our terribly poor international rankings in length of life are telling signs that our tremendous investment does not do enough to address the factors that make us sick in the first place.

Our current national debate must look beyond health care – the so-called repair shop of our health system – and focus on our health. Fixing health care will require insurance reform, cost containment and sound economic policy. Fixing health will require us to look at our neighborhoods, our schools and our workplaces. From our earliest years of life, these are the places that determine how long and how well we live in America. The recommendations of the Robert Wood Johnson Foundation Commission to Build a Healthier America, which identify pockets of success where programs are making a real difference in people’s health, provide a useful place to start.

In schools, where obesity threatens the current generation of children with sicker and shorter lives than those of their parents, solutions are critically needed. By guaranteeing daily physical activity in schools – which fewer than 3.8 percent of elementary schools provide – and linking federal funds for school meals to their nutritional value, we can reverse the epidemic and help our children grow up healthy.

In our neighborhoods and communities, we must consider the health impact of investments and development to ensure that they help promote physical activity, make healthy foods more readily available and lay a foundation for prosperity. With public-private partnerships, we can bring grocery stores and nutritious food into underserved neighborhoods and help both the stores and the neighborhoods thrive. By incorporating bike lanes, sidewalks and trails into our transportation planning, we can help make the daily lives of Americans more physically active.

All of this amounts to a change in the way we think about health in this country. Health care reform, while critically important, will not avert the crisis of poor health that we’re facing. The Times editorial and Urban Institute study shine an important light on the dubious claim that we have the best health care system in the world, but they don’t go far enough. It’s time that we debunk the larger myth, that Americans are the healthiest people in the world, so all of us – from the halls of Congress to the family dinner table – can start working to improve the health of the country we love.

Dr. James S. Marks, M.D., M.P.H., senior vice president at the Robert Wood Johnson Foundation and director of the Foundation’s Health Group. Dr. Marks oversees all of the Foundation’s work in childhood obesity, public health and vulnerable populations. Prior to RWJF, Dr. Marks was an assistant surgeon general and director of CDC’s National Center for Chronic Disease Prevention and Health Promotion.

Advice For State REC Planners

Aug 31, 2009• 6

By DAVID C. KIBBE & BRIAN KLEPPER

On August 20th, HHS Secretary Kathleen Sebelius and ONC head David Blumenthal announced $598 million in grants to set up about 70 “regional extension centers” (RECs) that will help physicians select and implement EHR technologies. Another $564 million will be dedicated to developing a nationwide system of health information networks.

The RECs are based on the example of agricultural extension offices, established over 100 years ago by Congress, which offered rural outreach and educational services across the country. These extension services made America’s agricultural revolution possible, dramatically increasing farm productivity. By analogy, the Administration hopes that on-the-ground health IT trainers and implementation experts can facilitate small medical practices’ adoption of EHR technologies, especially in rural and under-served areas, enhancing care quality and efficiency around the US.

The comparison between RECs and agricultural extension offices is probably a good one, and we applaud this effort. But there are some striking differences between agriculture and health IT. For one thing, many best farming practices were well known by the early days of agricultural extension services. The road map under ARRA/HITECH for successful small medical practice health IT acquisition and use is still under development, and remains full of tough questions and unknowns.

In fact, under Dr. Blumenthal’s leadership, the government is now crafting specifications for Meaningful Use, HHS Certification, security, and interoperability. It’s not yet clear what “meaningful use of certified EHR technology” means. So we could be in a cart-before-the-horse situation. It might be a little premature to set up technical assistance programs if we can’t provide specific guidance on how to assist. Even fully CCHIT-certified comprehensive EHRs can’t meet the Meaningful Use criteria today, so the REC’s geek squads will have their work cut out for them.

However, a body of knowledge and experience already exists about successful health IT system implementation in small primary care and specialty practices. For several years, one of us (DCK) worked under the auspices of the American Academy of Family Physicians (AAFP), helping family physicians’ practices prepare, select, implement, and maintain information technology offered by EMR and EHR vendors. The AAFP’s current Center for HIT staff has expanded this effort, assembling an impressive body of resources and tools. It was augmented as well by the work of the Quality Improvement Organizations (QIOs) that participated in the Doctors Office Quality-Information Technology (DOQ-IT) programs between 2006-2008.

Some of this knowledge is anecdotal, and should certainly be revised in light of the definitions and specifications that the ONC will issue later this year and likely finalize by spring of 2010, according to Dr. Blumenthal. But the AAFP’s and QIO’s hard-won lessons may be useful to those who are planning the new effort.

Here’s some broad guidance for state planners who are applying for these grants and who hope to set up their RECs by early 2010.

Keep your advisory services simple and targeted on solving actual problems. Hire people with hands-on medical practice experience, who will carefully listen to what physicians and practice managers want the EHR technology to do for them and their patients. Physicians in small practices generally will use EHRs in caring for patients and for managing office accounts. Overwhelming change won’t be welcomed. Instead, focus on incremental implementations that try to solve information management problems without interrupting work flows.Start with one system or workflow area, gaining success and then moving on to another. For example, some practices may be ready to implement ePrescribing, but are not ready to replace paper records with an electronic documentation system. Many practices have found that Web portals facilitating patient communications are a good EHR starting point, because they let doctors and patients exchange information online and asynchronously, easing telephone line congestion.

One size does not fit all. General IT skills are useful. New rules will soon specify how physicians and hospitals can qualify for the HITECH incentive payments and which products will be certified. Even so, there may be many different routes to successful EHR use. A flexible perspective is paramount. Favor advisers with generalized health IT system knowledge, rather than expertise with a particular vendor’s product.Some medical practices will choose a single-vendor EHR with all the added features, but others will mix and match modular applications that together create can minimum system capability needed for HITECH meaningful user status and incentive payments.
Similarly, some practices will prefer to locate data servers inside their practices or at the community hospital. Others will opt for Clinical Groupware, web-based and remote services EHR technologies that offer less hassle and expense for maintenance and security. Recognizing and differentiating between EHR technology offerings is going to be a major challenge for REC personnel in the near future.

Skate to where the puck will be. The old paradigm of health data management tried to collect a patient’s complete data in a single database application, owned, maintained and controlled by a particular organization. However, throughout other disciplines, information management has become Web-centric and based on meta-data searches augmented by real-time communications and shared group activities. Think Wikipedia, Google docs, Microsoft Sharepoint, the Apple iPhone, and, yes, even Facebook, as representative of where health IT is migrating over the next few years.Eric Schmidt, CEO of Google, and a member of the President’s Council on Science and Technology, PCAST, recently urged President Obama and David Blumenthal to consider Web-based technologies as the basis of the national health information network. He warned that “the current national health IT system planned by the administration will result in hospitals and doctors using an outdated system of databases in what is becoming an increasingly Web-focused world. The approach will stifle innovation.” Mr. Schmidt’s advice, and similar advice from Craig Mundie of Microsoft, is coming from within the Administration, not from outside it. In other words, it’s much more likely to be heeded than if were it coming from the opposition.
We hope that ONC’s specifications, issued as guidance to the RECs by mid-2010, reflect market-driven innovations that can reduce the cost and complexity of EHR technology acquisition and use. Otherwise we’re in for a national exercise in chaos.

Don’t waste time re-inventing the wheel. Every REC should network with every other REC, regardless of location or stage of development, to share lessons and experience, and to avoid wasted effort. In the past, for example, regional helper organizations – some QIOs and medical societies – independently formed exclusive contracts with one or two EHRs vendors, hoping these arrangements would simplify choices and implementation. These proprietary relationships were invariably unsuccessful for the helper organization and for the practices.Physicians and their organizations want to make health IT selections based on their own situations and needs. But almost always, they will seek the same kinds of IT support during implementation: e.g. networking, set up, Internet connectivity, security, and basic computer skills training for staff and physicians alike.
RECs should collaborate on tools and instruction kits where ever possible: each REC doesn’t need to develop its own HIPAA privacy and security guide book, for instance. Remember that peripheral devices, such as printers, fax machines, and modems, are part of every office’s set up, and that these items can be troublesome to set up and use.

Come to the task understanding that successful HIT implementation requires fundamental process re-design. We’ve learned this the hard way. Unless health IT helps re-design practice work and information flow processes so they can be more efficient and quality-promoting, then the IT is simply an expensive appliance. Process re-design also can determine whether the EHR technology deployment produces a return on investment (ROI). For example, re-designing the documentation process to reduce or eliminate dictation transcription services, relying instead on EHR data entry by office staff and the physicians themselves, can save money and lead to an ROI within 12-24 months. We have seen this occur frequently. On the other hand, practices that continue dictation at the old levels are simply adding new data capture expense, making it harder to justify the investment.

States are hurrying to get access to this stimulus money. Many organizations aspiring to be RECs are focused on the rapid grant/award cycles. But its critical for planners to focus on what it will take to get the job done, and setting the groundwork for effective regional centers that can offer thousands of practices the help they need.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on healthcare professional and consumer technologies. Brian Klepper PhD is a health care market analyst.

Impact of EHRs on Medical Education

Aug 31, 2009• 3

By GLENN LAFFEL

Author’s Note: This the second of a 5-part series whose purpose it is to make the case for implementing a widespread, systematic approach to HIT education in medical schools and continuing medical education programs for physicians. A previous post reviewed challenges posed by the HIT Deluge.

Countries around the world are racing to digitize patient medical records. In the US for example, the American Recovery and Reinvestment Act allocated $21 billion to an incentive program designed to encourage the “meaningful use” of such systems.

The Federal government’s largesse is based on the premise that EHRs will improve the quality of care and reduce its costs, but the move will impact the health care system in many other ways as well. One area sure to be impacted is the education and training process for new physicians.

What kind of impact can we expect? In some ways, EHRs appear to enhance medical education, but there are as many or more instances in which the impact appears to be negative. Thankfully, careful planning can mitigate most of the collateral damage, a topic to be covered in this series’ next installment. For now, we’ll settle for a review of the good, the bad and the ugly.