Checking out CMS’ Hospital Compare

 By Clive Riddle, July t6, 2009

Last week, CMS issued an announcement touting “important new information was added to the Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Web site that reports how frequently patients return to a hospital after being discharged, a possible indicator of how well the facility did the first time around” They noted around 20% of hospitalized Medicare beneficiaries experience a readmission within 30 days from discharge.

This prompted me to take the opportunity to check out Hospital Compare again, and see what was going on in that cyber neck of the woods. Here’s a few things I learned:

  • The tool is being used. Hospital Compare has been on-line since 2005. Last year the site 18 million+ page views, and is receiving around 1 million page views monthly during 2009.
  • Here’s how CMS describes the what information Hospital Compare provides: “The Hospital Compare Web site will show a hospital’s mortality or readmissions rate is ‘Better than,’ ‘No different from,’ or ‘Worse than’ the U.S. national rate...Hospital Compare also includes 10 measures that capture patient satisfaction with hospital care, 25 process of care measures, and two children’s asthma care measures. The site also features information about the number of selected elective hospital procedures provided to patients and what Medicare pays for those services.”
  • So what are you supposed to do with this information? CMS states that “Public reporting of these and other measures is intended to empower patients and their families with information they need to engage their local hospitals and physicians in active discussions about quality of care..” Charlene Frizzera, CMS Acting Administrator, tells us "Providing readmission rates by hospital will give consumers even better information with which to compare local providers. Readmission rates will help consumers identify those providers in the community who are furnishing high-value healthcare with the best results. CMS believes that all hospitals, regardless of their readmission and mortality rates, should use the data available in these free, detailed reports to find ways to continually improve the care they deliver.”
  • Of course, has lawyers on staff, and the hospital web site counsels us that we really shouldn’t “view any one process or outcome measure on Hospital Compare as a tool to ‘shop’ for a hospital” and that “consumers should gather information from multiple sources when choosing a hospital.”
  • If you really want to swim around in the hospital compare data, they do provide the option to download the entire database (9MB).
  • How old is the data, and how often is it updated? The collection period for the process of care quality measures is generally 12 months. Currently, the Hospital Compare quality measures are refreshed the third month of each quarter. The collection period for the mortality and readmission measures is 36 months. The risk-adjusted 30-day risk-adjusted mortality and readmission measures for heart attack, heart failure and pneumonia are produced from Medicare claims and enrollment data. The mortality and readmission quality measures will be refreshed once annually.
  • Downloading and then sifting through the actual database, I came across a table summarizing the national averages (as opposed to the hospital and state specific averages typically displayed in the online reports, or national data just for a specific item. Below are tables with the national HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey data and the national mortality readmission data.


HCAHPS Measures

HCAHPS Response Categories

Overall Survey %Response Rate

How often were the patients rooms and bathrooms kept clean?

Room was always clean


How often were the patients rooms and bathrooms kept clean?

Room was sometimes or never clean


How often were the patients rooms and bathrooms kept clean?

Room was usually clean


How often did nurses communicate well with patients?

Nurses always communicated well


How often did nurses communicate well with patients?

Nurses sometimes or never communicated well


How often did nurses communicate well with patients?

Nurses usually communicated well


How often did doctors communicate well with patients?

Doctors always communicated well


How often did doctors communicate well with patients?

Doctors sometimes or never communicated well


How often did doctors communicate well with patients?

Doctors usually communicated well


How often did patients receive help quickly from hospital staff?

Patients always received help as soon as they wanted


How often did patients receive help quickly from hospital staff?

Patients sometimes or never received help as soon as they wanted


How often did patients receive help quickly from hospital staff?

Patients usually received help as soon as they wanted


How often was patients pain well controlled?

Pain was always well controlled


How often was patients pain well controlled?

Pain was sometimes or never well controlled


How often was patients pain well controlled?

Pain was usually well controlled


How often did staff explain about medicines before giving them to patients?

Staff always explained


How often did staff explain about medicines before giving them to patients?

Staff sometimes or never explained


How often did staff explain about medicines before giving them to patients?

Staff usually explained


Were patients given information about what to do during their recovery at home?

No, staff did not give patients this information


Were patients given information about what to do during their recovery at home?

Yes, staff did give patients this information


How do patients rate the hospital overall?

Patients who gave a rating of 6 or lower (low)


How do patients rate the hospital overall?

Patients who gave a rating of 7 or 8 (medium)


How do patients rate the hospital overall?

Patients who gave a rating of 9 or 10 (high)


How often was the area around patients rooms kept quiet at night?

Always quiet at night


How often was the area around patients rooms kept quiet at night?

Sometimes or never quiet at night


How often was the area around patients rooms kept quiet at night?

Usually quiet at night


Would patients recommend the hospital to friends and family?

NO, patients would not recommend the hospital (they probably would not or definitely would not recommend it)


Would patients recommend the hospital to friends and family?

YES, patients would definitely recommend the hospital


Would patients recommend the hospital to friends and family?

YES, patients would probably recommend the hospital





Measure Name

National Mortality_Readm Rate

Heart Attack

Hospital 30-Day Death (Mortality) Rates for Heart Attack


Heart Attack

Hospital 30-Day Readmission Rates for Heart Attack


Heart Failure

Hospital 30-Day Death (Mortality) Rates for Heart Failure


Heart Failure

Hospital 30-Day Readmission Rates for Heart Failure



Hospital 30-Day Death (Mortality) Rates for Pneumonia



Hospital 30-Day Readmission Rates for Pneumonia




Medicare Drug Coverage and the Impact on Overall Health Care Spending

By Clive Riddle, July 8, 2009

An important paper reporting on results of an NIH funded study : “The Effect of Medicare Part D on Drug and Medical Spending”was posted online last week with the New England Journal of Medicine: [Volume 361:52-61 July 2, 2009 Number 1] and authored by Yuting Zhang, Ph.D., Julie M. Donohue, Ph.D., Judith R. Lave, Ph.D., Gerald O'Donnell, M.S., and Joseph P. Newhouse, Ph.D..

The pharma industry for decades has been a proponent that appropriate prescription coverage can have a positive impact on overall health care costs. Certainly Medicare policy advocates argued the point in the debate leading up to establishment of Medicare Part D prescription coverage earlier this decade. Now that time has passed, the opportunity has arisen to examine the actual data to address this issue.

The study examined over 35,000 Medicare members from Pennsylvania’s Highmark Blue Cross Blue Shield from 2004 through 2007. The study included a control group with employer based retiree drug coverage that did not change after Part D took effect, and had $10 to $20 copayments with no spending limits or coverage gaps. Three groups were also examined that had no or limited drug coverage before Part D, and then enrolled as in Part D plan as of January 2006. One group had no previous drug coverage, and the other two had previous drug benefits with quarterly spending limit caps.

The study found that the cost of introduction of Part D benefits for those with no or very limited prior coverage was approximately offset by savings in overall health care costs, but overall health care spending did increase for those with more generous prior coverage.

In comparison to the control group, after introduction of Part D, the average total monthly drug spending was $41 higher (74% increase) for enrollees with no previous drug coverage, $27 (27% increase) higher among those with a previous $150 quarterly cap, and $13 higher among those with a previous $350 quarterly cap (11% increase.) Furthermore, overall monthly medical expenditures (excluding drugs) were $33 lower in the group with no previous coverage, $46 lower in the group with a previous $150 quarterly cap, but $30 higher in the group with a previous $350 quarterly cap.

The study concluded that “The offsetting reduction in medical spending in the two groups with the most limited previous benefits was probably due to improved medication adherence among enrollees with chronic conditions.” The study also addressed the overall health care cost increase for the group with more generous prior coverage: “Why did medical spending rise in the group with a previous $350 quarterly cap (the most generous previous coverage among the three intervention groups), as compared with the no-cap group? The additional use of prescription drugs in all three groups probably included both overuse of some drugs and underuse of others, but the proportion of the increase that was overuse may have been highest in the group with the most generous previous coverage. Our finding that the use of oral antidiabetic drugs did not change significantly in this group is consistent with this hypothesis.”

The References section at the end of the report is well worth browsing, as links to various prior studies are provided. Beyond the References provided in the report, I found two other studies that proved to be of particular interest while researching this topic:

The AARP Public Policy Institute published “How Prescription Drug Use Affects Health Care Utilization and Spending by Older Americans: A Review of the Literature” by Cindy Parks Thomas, Ph.D., Brandeis University, Schneider Institute for Health Policy, in April 2008. Key conclusions from this 57 page report include: (1) “Prescription drug coverage can produce cost offsets from reductions in non-drug services, such as hospitalizations and emergency visits.”; (2) “Studies that incorporate increased longevity into spending projections suggest that cost offsets may diminish over time.”; and (3) “Strict benefit limits of all kinds decrease prescription drug use and increase use of other medical services, including acute and long-term care services.”

Baoping Shang, and Dana P. Goldman of the RAND Corporation; National Bureau of Economic Research (NBER) published results in 2007 from their study “Prescription Drug Coverage and Elderly Medicare Spending” (with preliminary results published in 2005) that examined Medicare Supplement (Medigap) enrollees with and without prescription coverage. They found that “Medigap prescription drug coverage increases drug spending by $170 or 22%, and reduces Medicare Part A spending by $350 or 13% (in 2000 dollars). Medigap prescription drug coverage reduces Medicare Part B spending, but the estimates are not statistically significant. Overall, a $1 increase in prescription drug spending is associated with a $2.06 reduction in Medicare spending.”


Health Reform: What Should Pass or Run Out of Gas

by William DeMarco, June 25, 2009



I was asked to provide a brief answer to the following question for the current issue of MCOL’s Thought Leaders newsletter: “Which specific component of various current major health care reform proposals do you feel is most likely to be adopted before the end of the year, and which component is least likely to be adopted?"



What follows is a more thorough discussion of how we view the outcome of some key provisions that have surfaced in the national reform initiatives.


We believe the public plan and the exchange will be adopted although not in its current proposed form.


We envision Federal Board very similar to the Federal Employees Health Benefits program that governs structure, benefits levels and perhaps some consumer complaints. However we do see this Board overseeing each of the states to implement the public plan in their own fashion.


This would meet current insurance commissioner laws and interstate commerce laws for licensure and would also follow consumer protection with existing insurance departments. Such things as post claim underwriting/recessions would be outlawed nationally and the fed may require the states cap to place a on margins as there are in some states already.


The exchange is vital to distribution channels for this and other plans and would reduce and perhaps eliminate the need for brokers and brokers fees which would reduce costs by 10% or greater. Again these exchanges would need to follow state licensure laws but would be overseen by the Federal Board to make sure they meet the rules of selection, open enrollment and fair disclosure.


Least likely to pass are the Comparative Economics CER legislation. Not because it is not needed but only because people do not understand yet that quality and process are uneven and in a state of flux. This means Dartmouth Atlas and Health Grades and others will do well to show distinctions in the delivery system and tiering and profiling will continue.


We believe MedPacs recommendation to move to ETGs and bundled reimbursement tied to severity follows our early concepts for integration. Many hospitals and physicians continue to fail because they cannot get the reimbursement and utilization data to track together. Given the opportunity to combine these two will support further Information technology and advance web based connections between provider’s, plans and employers.


This will create a new interest in hospitals and physicians working together to form their own product especially as the public plan forces consolidation of local plans thereby giving a handful of plans incredible bargaining power.


Provider sponsored plans have a distinct advantage in the market as the owners control the means of production. Using this bundled reimbursement we see that providers who do well can harvest their reward for their improved care outcomes and , in doing so, apply these savings to more benefits at less cost competing effectively with insurance companies that are unable to control volume and quality and therefore cannot control price.


What this means is that launching things state by state may take a year but once uninsured and underinsured have an option and small business can hire without worrying about this overhead of insurance we will see a spark in hiring and productivity. Without a public plan this will not happen and extend the recession far beyond next year. This time the recession has, and will continue to affect health care employment and this affects service quality and availability so we are truly in a historic moment in history.


William J De Marco MA CMC

De Marco and Associates




Telling the Whole Truth

by Laurie Gelb, June 17, 2009


Watching the back-and-forth regarding “health care reform” calls to mind many untold truths – that it may not be too late to tell.


AARP’s monthly magazine has an “8 Myths About Health Care Reform” feature in the current issue that should not go unchallenged by any patient, let alone health professional. This “myth list” in fact recapitulates several red herrings propagated these days by many legislators, media outlets and influencers.


So, whatever your personal or professional position, here are a few talking points that you might consider attempting to insert into the debate before the dotted line is signed.


AARP’s “myth”

The reality

Those with insurance won’t benefit

AARP argues that new legislation will provide a safety net for those destined to lose their coverage in the future. “Just because you have health insurance today doesn’t mean you’ll have it tomorrow,” the author warns. Well, yes, that’s true, because many employers, associations and trade groups, many of whom cover people on the margins, are going to use a public plan option as an excuse to drop or limit access to their own plans. Thus, this is a self-canceling argument that skirts the stated objective of universal coverage (not to mention the somewhat paltry incremental 16M Americans gaining coverage estimated by the CBO this week).

Boomers will bankrupt Medicare

AARP points to costly technology (“think MRIs and CT scans”) and over-treatment as primary cost drivers of the current trend. Unaddressed is the difference between a scan that enables an early diagnosis and an improved prognosis, vs. a study that is not indicated, or effective vs. ineffective treatment. That private payors have been more active than Uncle Sam in identifying and addressing inappropriate care is never stated. However, it would also be helpful for payors to acknowledge that they have often ignored myriad opportunities to improve the aggregate efficacy of self care, and commit to greater action in the future (such as the decision support programs discussed in other posts).

Reform will cost us more

AARP makes the analogy between health reform and the upfront cost of an Energy Star appliance, reassuring its readers that by 2020, reform “could save us approximately $3 trillion.” Unstated is just how this might occur, though indeed you could wake up tomorrow as a British monarch.


But we need to discuss the concept of annual budgets, something that most Americans understand, and the fact that Energy Star savings are quantifiable in a way that vague promises/threats about HIT, CER and (more) de facto rationing are not. Then we can begin talking about low-hanging fruit – treatments of unquestioned efficacy for the vast majority of a given patient population, to which access and adherence are suboptimal. At the same time,, fully involving privacy advocates and community clinicians, we can talk about standardizing the EHR and getting it to the point of care in a way that actually saves everyone time – and saves lives.

My access to quality care will decline

“Just because you have access to lots of doctors who prescribe lots of treatments doesn’t mean you’re getting good care,” counsels AARP. This sly truism in no way addresses the issue at hand, which is the extent to which public sector plans already inhibit access to care, if only because physicians withdraw from their networks every month. The time that docs and their staffs spend trying to eke (substandard) reimbursement from public plans is somehow omitted from this answer (and the entire AARP policy agenda).


And, this week, MedPAC raised the spectre of denying coverage for “new drugs” unless they are “proven” superior to “old drugs” (not clear if safety or tolerability or convenience of dosing will count—it rarely does in the health care hells the politicians are claiming not to emulate), not to mention linking “value” of therapy to reimbursement – and AARP can continue pretending that the reform movement is “hands off” clinical and personal choice? Take a trip across the border or the ocean and see. [I’ve been in UK hospitals.] Again, AARP is only disingenuous to avoid discussion of what a clinical decision is, vs. what a political funding mechanism is.

I won’t be able to visit my favorite doc

Once again, the fact that many clinicians and facilities deny, limit or delay encounters with Medicare and Medicaid patients is nowhere stated. Instead, there’s the classic red herring reassuring readers that “clinical effectiveness research” is a good thing. Indeed, but how does that relate to physician access? It’s as if AARP shuffled the cards with the questions and threw them on top of a few “politically correct” answers.

ERs provide the uninsured with good care

AARP correctly points out an ER can’t be a medical home, and that the insured pay for part of the ER visits that result from uninsurance. But this is a straw man myth—no one is seriously suggesting that ERs substitute for insurance.


The real question is, how do you get all these chronically ill people in need of monitoring access to primary care, when PCPs are already in short supply and becoming more scarce as you read this? How do you support better health decision-making across the board? How do you help a clinician at 2 am make a quick, accurate connection between the patient presenting to him and the same person who presented 500 miles away a month ago?

We can’t afford to tackle this now

AARP notes that people are delaying care and not filling rx, suggesting that reform is urgent. Indeed, no one questions that costs are soaring, nor that the current unfree unmarket is more like a bazaar. However, creating a sense of urgency doesn’t serve reformers’ objectives when basic questions like financing of the plan, contribution to the growing deficit and how clinicians and patients will be served are overlooked in the name of that urgency.

We’ll end up with socialized medicine

Quoting a RWJ researcher, AARP concludes its feature with the assurance that “we will come up with a uniquely American solution…a mixed public and private solution.”


Well, most “single payor” countries count as a “mixed” solution, too, if you consider that many citizens in such countries, where possible, purchase additional private coverage because the public plans are so inadequate. As reassurance, this isn’t exactly warm and fuzzy, especially given the shortcomings of both our private and public plans. Mix them together, and you get the equivalent of goulash over jello.


Moreover, AARP’s soothing words to the contrary, the signals out of Washington speak to a new willingness to consider a wide array of new controls over individual actions, from “Any Unwilling Provider” mandates to limits on therapy. “Socialized” is a buzzword, but health freedom is not.


If the managed care sector doesn’t speak out – honestly and completely – about what’s good and bad about the current system, and promote proposals that address the real issue – the right person receiving the right treatment at the right time for the right duration – we may all be a good deal worse off – and poorer – a year from now.





The Genormous Generic Market

By Clive Riddle, June 11, 2009


“Ginormous” is out. “Genormous” is in, at least if Pfizer is editing the Unabridged Dictionary of Pop Buzz Words, as they continue to go on record that they are pursuing generic growth. This week the Associated Press reported that Pfizer “expects to expand its offerings for generic pharmaceuticals by adding products to the business quoting Dave Simmons, Pfizer President of Established Products. A couple of weeks ago Pfizer licensing agreements with two Indian based companies was reported as a major signal of their strategy to seek growth through generics and emerging markets.


Continued growth in generics would seem a smart recession and health reform based strategy. But generic growth has been sustained through this and the prior decade through good times as well. Let’s have a look at a few of the factors driving these Genormous numbers: 

  • The Average price of generic vs. brand prescriptions: Brand: $119.51 ; Generic: $34.34 [Prescription Drug Trends, September 2008, Kaiser Family Foundation] 
  • Average Rx Copay by Tier: Generic Tier $10; Preferred Tier: $26; Non Preferred Tier: $46; Fourth Tier: $75 [Kaiser Family Foundation Employer Health Benefits 2008 Annual Survey] 
  • Generic Fill Rates: 65% of all prescriptions and 21% of drug sales [Prescription Drug Trends, September 2008, Kaiser Family Foundation] 
  • Generic Fill Rate by $ Differential between Generic/ Preferred Brand Copay: $ 0- 5: 47.6%; $ 6-10: 49.2%; $11-15: 51.6%; $16-20: 52.6%; $21+ : 55.0% [The American Journal of Managed Care, June 2007, “Copayment Differentials and Generic Utilization” ] 
  • Employer Strategies to Reduce Pharmacy Costs: #1 Mentioned response (75%) was "Promote greater use of generic drugs" (2nd highest response - 48%- was "Improve management of specialty drugs" [Mercer Survey] 
  • The 2009 Survey of Health Care Consumers found that 3 in 10 consumers switched medications in the past year, with 38% of them switching to save money [Deloitte Center for Health Solutions] 
  • IMS Health reports that "annual U.S. prescription sales growth of 1.3 percent in 2008, to $291 billion. Dispensed prescription volume in the U.S. grew at a 0.9 percent pace. Factors influencing the market’s slower growth in 2008 included higher demand for less-expensive generic drugs, lower new product sales, and reduced consumer demand due to the economic turndown." [IMS Annual U.S. Pharmaceutical Sales Report]