How Much is Too Much? Hospital C-Suite Compensation

By Claire Thayer, January 9, 2012

MCOL’s Healthcare Web Summit announces How Much is Too Much? Hospital C-Suite Compensation, scheduled for Friday, January 20 from 10:00AM – 11:00AM Pacific . The mission of a not-for-profit hospital or healthcare system is fairly clear: Heal the region’s patients and provide benefit to the community. Yet hospital boards find themselves under increasing pressure to offer generous compensation packages in order to attract and retain the executives who can keep their organizations out of financial distress and help them prosper in a challenging reimbursement environment. This webinar features persons knowledgeable on healthcare compensation trends.

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Health Care Data Predictions for 2012

By Clive Riddle, January 6, 2012

The Ponemon Institute just released this list of top 2012 predictions in healthcare data, that they edited from various health care data thought leaders:

  1. Healthcare organizations will not be immune to data breach risks caused by the spread of mobile devices in the workforce, according to Dr. Larry Ponemon, chairman and founder, Ponemon Institute. In the recent benchmark study, 81 percent of healthcare providers say they use mobile devices to collect, store, and/or transmit some form of PHI. However 49 percent of those admit they are not taking steps to secure their mobile devices.

  2. Class-action litigation firestorms are imminent, says Kirk Nahra, partner, Wiley Rein LLP. Class-action lawsuits will be on the rise in 2012, as patients are suing healthcare organizations for failing to protect their PHI. 2011 saw several class-action lawsuits for organizations, some of which involved business associates, due to breached patient data. Regardless of the outcomes, these lawsuits are a significant risk and tremendous expense for companies affected by them.

  3. Social media risks in healthcare will grow, according to Chris Apgar, CEO and president, Apgar & Associates, LLC. As more physicians and healthcare organizations move to social media to communicate with patients and promote services, the misuse of social media will increase as will the risk of exposure of PHI. Often healthcare organizations do not develop a social media use plan and employees represent a significant risk, potentially exposing PHI through their own personal social network pages. These risks can lead to patient vulnerabilities, data breaches, civil penalties, loss of business and more.

  4. Cloud computing is not a panacea; technology is outpacing security and creating unprecedented liability risks, suggests James C. Pyles, principal, Powers Pyles Sutter & Verville PC. With fewer resources, cloud computing is an attractive option for healthcare providers, especially as Health Information Exchanges (HIE) increase. However, privacy and legal issues abound, such as compliance with HIPAA privacy and security regulations and allocation of liability when a privacy breach occurs. A covered entity will need to enter into a carefully written business associate agreement with a cloud computing vendor before disclosing protected health information and should ensure that it has adequate cybersecurity insurance to cover the direct and indirect costs of a breach.

  5. Growing reliance on business associates will create new risks, believes Larry Walker, president of The Walker Company. Economic realities will force healthcare providers to continue to outsource many of their functions, such as billing, to third parties or business associates (BA). However, BAs are considered the "weak link in the chain," when it comes to data privacy and security. 69 percent of organizations that participated in the Ponemon study have little or no confidence in their business associates' ability to secure patient data. Third-party mistakes account for 46 percent of data breaches reported in the study.

  6. Organizations risk reputation fallout, according to Rick Kam, president and co-founder of ID Experts and chair of the American National Standard Institute's (ANSI) "PHI Project," a project to research the financial impact of a healthcare data breach. Identity theft and medical identity theft resulting from data breach exposure are causing patients financial and emotional harm, often resulting in patients seeking out different medical providers. According to the Ponemon study, the average lifetime value of one patient is more than $113,000.

  7. Mobile will explode in healthcare, believes Christina Thielst, health administration consultant and blogger. The use of tablets, smartphones and tablet applications in healthcare is growing exponentially. Nearly one-third of healthcare providers use mobile devices to access Electronic Medical Records or Electronic Health Records (EMR/EHR) systems, according to a CompTIA study. Providers will need to balance usability, preferences, security and budgetary concerns, as well as adopt written terms of use with employees and contractors using personal devices at work.

  8. Increased emphasis on willful neglect leads to increased enforcement of HIPAA, according to Adam Greene, partner, Davis, Wright, Tremaine LLP. The focus over the next year will be on the 150 HITECH Act audits and publication of the final rules implementing modifications to the HIPAA regulations. But the biggest changes may be at the OCR investigative level. Expect OCR to more aggressively pursue enforcement against noncompliance due to "willful neglect" starting in 2012, resulting in a sharp uptake in financial settlements and fines in the coming years. 2012 will be the year that OCR expects everyone's training wheels to have come off their privacy and security programs.

  9. Privacy and security training will be an annual requirement, says Peter Cizik, co-founder and CEO, BridgeFront. Healthcare organizations have gotten better at putting procedures in place, but staff are still not following them. Because the majority of breaches are caused by human error, not technology failures, targeted training and awareness programs are one of the most effective ways to prevent data breaches.

  10. Rise in fraudsters will increase fraud risk education, according to Jonnie Massey, supervisor, Special Investigations Unit, Oregon Dental Service (ODS) Companies. Pressure, opportunity and rationalization: these three dangerous elements of the triangle can lead to committing a healthcare-related crime. During hard economic times, there are more fraudsters and more opportunities for them to gain or keep a healthcare benefit they are not entitled to. Educating those at risk for fraud and communicating consequences may deter someone from stepping over the line or help those at risk to prevent them from being a victim of healthcare fraud.

  11. Healthcare organizations will turn to cyber liability insurance, according to Christine Marciano, president, Cyber Data Risk Managers LLC. As healthcare organizations continue to implement their EHR systems, they will consider options to protect themselves and their patients. When a healthcare organization or other HIPAA covered entity suffers a data breach the cost can be damaging not only to an entity's bottom line, but also to the reputation of its brand. With the increased vulnerabilities and as part of a data breach response plan, healthcare organizations will increasingly turn to a cyber security/data breach insurance policy

Medicare initiatives towards accountable care: Aetna’s Provider Collaboration Programs

 By Claire Thayer, December 22, 2011

MCOL’s Healthcare Web Summit announces Moving Towards Accountable Care: Aetna’s Medicare Provider Collaboration Program, scheduled for Thursday, February 23rd from 1:00 PM to 2:00PM Eastern.  As groups throughout the health care system work to develop Accountable Care Organizations, Aetna recently announced results of collaborative relationships with several medical groups in working together to accomplish two of the main goals of ACOs through the Aetna Medicare Provider Collaboration program – improving quality of care and lowering health care costs. Join Doctor Krakauer on Thursday February 23rd, 2012 at 1PM Eastern as he reviews detailed aspects and results of Aetna's Medicare Provider Collaboration program.


Good News -- Bad News

By Kim Bellard, December 19, 2011

Reading several recent news stories, I’m reminded of an old joke.  A man gets a call from his doctor, who informs him he’s got the results of some tests.  The doctor tells the man there is some good news and some bad news, and asks the man which he’d like to hear first.  The man is taken aback, but – optimist that he is – asks for the good news first.  The doctor dutifully informs the man he only has 24 hours to live.  The man is stunned.  “That’s the good news?” he asks incredulously.  “What the hell is the bad news?”   Rather sheepishly, the doctor informs him, “I was supposed to call you yesterday.” 

(Slight pause here for polite laughter).   

Let’s see how this good news/bad news works in the real world.  Take, for example, a recently released a report by Float – a mobile learning consulting company – on the increasing use of mobile technology in health care.  According to their research, 80% of U.S. physicians already use smartphones and mobile apps, and over half report either already having an iPad or planning to get one in the next six months.  They cite a number of uses for mobile technology in health care, which they expect to increase rapidly. 

That’s the good news.  I’m a huge supporter of more use of technology in health care, especially mobile.  It’s great that it is becoming more mainstream.  However, it is not an unalloyed boon.  The corresponding bad news was discussed in recent reporting by The New York Times on “distracted doctoring.”  They quote Dr. Peter Papadakos, who has published an article on “electronic distraction” in Anesthesiology News, as saying, “You walk around the hospital, and what you see is not funny…My gut feeling is that lives are in danger.”  Dr. Papadokos sees medical personnel on phones, surfing the Internet, and especially on Facebook.  The Times cites another study that indicates over half of technicians who monitor bypass machines were texting or even talking during surgery, even though most acknowledged it was unsafe behavior.  The Times even found situations where surgeons were reportedly making personal phone calls during surgery, using wireless headsets.  Scary stuff. 

It’s much like texting while driving.  We know it’s not safe, we criticize other drivers we see doing it, but we’re so used to the connectivity that the technology allows that we have a hard time drawing appropriate boundaries for ourselves.  Perhaps health care needs a NTSB to warn us when we really shouldn’t be using mobile devices.   

Another good news/bad news example is a recent study by GfK Custom Research North America about the projected impact of ACA on employer health coverage.  The news reports focused on the “good” news – that the majority (56%) of employers said they are likely to continue offering coverage.  "This survey suggests that firms aren’t considering a wholesale flight from employee health care coverage as health care reform is implemented,” said Tim Nanneman, Vice President and Director of Health Insurance Research for GfK, who also added, “However, many employers are skeptical about the potential effects of health care reform.”   

Indeed, the bad news from the study was that 12% of employers already expected to drop coverage, with another third not sure what they will do.  To make things worse, slightly more than half of employers expected their costs to rise because of ACA, with only 11% under their impression their costs would go up more slowly. 

When McKinsey estimated 30% of employers would drop their coverage once the exchanges were operational, they were excoriated by the Administration and other ACA supporters.  There were some flaws in the McKinsey methodology that left it somewhat open for the criticism, yet I’m surprised that a study showing barely half of employers expect to continue coverage hardly rates a mention, or is reported as good news.   I find GfK’s results deeply troubling – although not surprising. 

Speaking of costs increasing under ACA, the final piece of good news/bad news was the recent announcement by HHS that more young adults got coverage due to ACA provisions than expected – some 2.5 million in total.  Earlier estimates had shown one million newly covered, so the Administration took some pride in this even higher estimate.   

Everything being equal, of course, getting 2.5 million more people covered is good news.   The reality, though, is that everything else isn’t equal.  The bad news is that there is a cost to this good effect.  I read the HHS press release carefully, as well as the news accounts of it, and I didn’t see mention of the cost of those additional 2.5 covered young adults.  I previously blogged on the cost of ACA’s already implemented provisions, but the thing to remember is that this expansion is a tax on employment-based insurance.   By which, of course, I mean it is compensation taken from workers’ paychecks.  That’s the bad news.  For workers with single coverage, or who have families which do not include young adults, I might be wondering why I am paying for these young adults’ coverage.   

It never made much sense to me for this provision to be Rube Goldberg-ed onto our already jury-rigged employer-based system, making employers cover not only people who are not only not employees but who also are not even dependents of workers.  But it was politically expedient to do so and hid the costs.  The Administration is kind of in a bind: either this population doesn’t cost very much, in which case the 2.5 million perhaps isn’t worth crowing about, or the costs are substantial, in which case it should be more honest about them and who is bearing those costs.  I do think we’re talking billions of dollars annually.   When HHS starts reviewing health insurance price increases, it should remember its own complicity in at least some part of those increases.  It won’t, of course. 

There are lots of calls for transparency in health care, but we need to remember this shouldn’t just be about reporting the numbers.  The truth is rarely one-sided – something hard to remember in this hyper-partisan era – and we all should look at both sides of issues.  While I’ve been writing this blog, Reps. Wyden and Ryan have come out with their Medicare proposal, and Secretary Sebelius announced the flexibility that states will get in developing essential benefits packages…now I need to go take a look at the good and bad of each of those!


Unhappy Campers: Physicians and Health Reform

By Clive Riddle, December 15, 2011

The Deloitte Center for Health Solutions released their latest study this week: Physician perspectives about health care reform and the future of the medical profession.

Paul Keckley, Ph.D., the Center's Executive Director tells us "the data confirms that physicians are resistant to reform and are frustrated with the direction of the profession. Understanding the view of the physician is fundamental to any attempt to change the health care model – this is the person prescribing the medicine, ordering the test and performing the surgery."

While Deloitte concludes physicians are not happy campers in this respect, it should be noted their positions are not that different than many other stakeholder groups.

Their findings are based on a survey commissioned by Deloitte of 501 physicians obtained as a random sample from the AMA database, with responses weighted by years in practice according to gender, region and practice specialty to match AMA demographics.

The 40 page report paints the following picture:

  • Physicians gave the U.S. health system a grade as follows: A - 8%; B 27%; C - 45%; D 15% and F - 5%. Older physicians rates the system higher (40% over age 60 gave an A or B grade compared to 29% for under age 39.) Midwestern physicians also rated the system higher (44% gave an A or B; compared to 29% in the Northeast.)
  • 71% say they are somewhat informed about the Affordable care Act while 23% say they are very informed
  • 44% feel the Act is a good start, 44% feel it is a step in the wrong direction; and 12% don't know
  • "Consumer behavior such as unhealthy lifestyles that can lead to obesity" was the most often cited factor influencing overall health care costs (multiple answers allowed - with 94% citing this factor) followed by "defensive medicine" (91%) and "Insurance company administrative costs" (89%)
  • "Increased government managed care programs for Medicare and Medicaid" was the most often cited expected result of the Act (multiple answers allowed with 85% citing this result) followed by "Increased "wait times for primary care appointments due to lack of providers" (83%) and "fewer uninsured (77%)
  • 73% believe there is a high likelihood ERs could be overwhelmed if PCP visit slots are full due to changes in the health care reform law
  • 13% of physicians felt very engaged in the health reform debate and 44% felt somewhat engaged
  • 78% of physicians say they would be comfortable if the model for liability reform involved a separate medical court system with binding arbitration and victims’ fund
  • 4% believe their income will increase next year as a result of health reform; 48% believe their income will decrease
  • "An administrative role (i.e., Chief Medical Officer, Chief Executive Officer, etc.) in a large health care delivery system" was cited most often as the ideal practice setting (multiple answers allowed with 70% citing this setting) followed by "concierge medicine practice that does not take insurance" (64%) and "large integrated health system that owns its own health insurance plan, hospitals and medical practices" (60&). The settings at the bottom of the list were employer based clinics (19%) and retail clinics (21%).