Round Up the Usual Suspects 

By Kim Bellard, September 11, 2012

Two recent reports have added more empirical support to the widely held belief that our health care system wastes significant amounts of money.  I’m shocked, shocked!  As Captain Renauld said in Casablanca, round up the usual suspects. 

The first report, published in Health Affairs, was from UnitedHealth Group.  The authors examined data from 250,000 physicians around the country, focusing on the privately insured population.  Consistent with the years of data from the Dartmouth Atlas on the Medicare population, it showed widespread variation.  The authors report episode costs for procedures vary 2.5 times, while episode costs for chronic conditions vary 15-fold.  Overall, the report concludes that costs could be 14% lower if delivered by physicians meeting certain quality and cost-efficiency designations. 

An even more assertive claim was made by the prestigious Institute of Medicine (IOM).  Their report, Best Care at Lower Cost, believes that as much as a third of spending is wasted – some $750 billion based on 2009 health spending.  The IOM is no stranger to big claims, including the oft-quoted 98,000 deaths annually due to medical error in their landmark report To Err is Human.  In their new report, they conclude that 75,000 deaths could be avoided if every state delivered care as well as the best performing state.  The IOM was more granular than simply claiming the waste is all unnecessary care: $210 billion in unnecessary services, $190 billion in excessive administrative costs, $130 billion from inefficiently delivered services, $105 billion due to prices that are too high, $75 billion in fraud, and $55 billion in missed prevention opportunities.  That’s a lot of targets of opportunity.

The IOM notes some lessons from other industries, and believe significant improvement is possible, on a variety of fronts: using information technology more effectively, creating systems to manage complexity, more focus on making health care safer, improving transparency of costs, quality and outcomes, promoting teamwork and communication between providers, partnering with patients, and decreasing waste/improving efficiency. They believe that the technology is here to support all these, and the problem is better application of it to health care systems and processes.  No mention was made of “death panels” (!), although I’m waiting for someone to bring up that specter.

There are too many examples that illustrate the flaws in the current system.  For example, Johns Hopkins recently reported that as many as a quarter of adult patients in ICUs may die as a result of missed or incorrect diagnoses, resulting in some 40,500 deaths annually.  The authors note that is more people who die each year from breast cancer.  One would think that ICU patients are getting pretty close attention, more than other patients, which make these results all the more troubling (to be fair, of course, they likely have complicated sets of conditions, making diagnosis harder).

More troubling are recent allegations and lawsuits about unnecessary heart surgeries aimed at increasing hospital revenue/physician income, including HCA and St. Joseph-London in Kentucky.  If these allegations are shown to be valid, these practices may just be the tip of the iceberg.  Throw in recent warnings about the overuse of well-intended but over-used diagnostic tests like screenings for ovarian cancer or prostate cancer, or the cost-benefits from increased exposure to radiation via increased imaging, and it makes one wonder if treatment recommendations should come with a warning label. 

The IOM cited technology as a tool to help support improvement in how the health system performs, and there is data which suggest this hope is not in vain.  The CDC reports that 55% of physicians had an electronic health record in 2011, and half of the remaining physicians expected to be using one in the next year.  Clearly, HITECH has helped spur this adoption, as has the trend of health systems purchasing physician practices.  Solo practitioners significantly lag in adoption (29%), and CDC reports a statistically significant difference in adoption from physicians over 50: 49% versus 64%.  More importantly, about three-quarters of adopters believe that the EHR both enhances patient care and meets Meaningful Use criteria. 

Also encouraging is a report from Medpage Today on physician technology use.  They report 9 out of 10 physicians experienced an increase in the use of the Internet in their practice: 71% spend 3 or more hours a day on a computer, 24% use a mobile device 3+ hours a day, and 18% use a tablet 3+ hours per days, all in support of their practice.  Unlike the CDC results, though, they see very little impact of age on technology adoption, except in use of a smartphone.  The Medpage respondents are a stressed bunch, seeing more patients each day and, as a result, seeing fewer drug reps, spending less time with each patient, and reading fewer medical journals/attending fewer conferences.  The last point is particularly concerning to build the nimble “learning” culture that the IOM advocates, which helps account for the finding that almost all respondents are using their devices to keep up-to-date on clinical news and medical education. 

I’ve often been critical of physicians’ reluctance to adopt technology solutions, but I’m increasingly coming to the point of view that it is technology that is failing them.  We’ve laboriously endeavored to get medical records into an electronic state, when the real challenge is deciding what health data we want tracked, and what views/inputs are needed by different types of users – including patients.   I’ll point to a nice column by Shahid Shah that details some of the kind of patient-centered forward thinking we need, as well as to a recent study by Hripcsak and Albers that reminds us that poorly designed data going in has damaging effects on the usefulness of that data. 

Maybe we need to scrap all those legacy practice management systems and EMRs and study what modern CRM systems in other industries can teach us about tracking and knowing patients, as well as take advantage of lessons learned from just-in-time manufacturing to improve care delivery efficiencies.  Add to those all the real-time data that mobile tracking apps and other monitoring devices can provide on patients’ health and we have a shot at disruptive innovation. 

Job number one in improving our health system has to be measuring who is doing what to which patients, and what impact it is having on those patients’ health.  Without better data on those, we’ll still just be rounding up those usual suspects.  


What’s Happening at MCOL | Complimentary E-Newsletters

Claire Thayer, September 11, 2012

MCOL offers a wide-range of informative e-newsletters that are available for free! Topics address a variety of important industry trends, including: accountable care, consumer driven care, health reform, patient centered medical homes, hospital readmissions, mobile health, predictive modeling, and lots more. Visit the MCOL home page at www.mcol.com and select the Offerings tab, or simply select the desired complimentary e-newsletter below for additional info:


How are Providers Managing the Transition with Conflicting Incentives in Payment Structures?

Clive Riddle, September 7, 2012

In the just released September issue of Accountable Care News,the monthly subscription newsletter covering Accountable Care, a thought leader panel was asked: “Given the conflicting incentives of ACO and other FFS lines of business, how are providers managing the transition? Stratifying patient populations based on payment incentives? Managing all patients the same and absorbing the revenue losses? Structuring compensation differently for care team members and individual physicians?

It’s an interesting question. Here’s what the Accountable Care News thought leaders had to say about this issue:

Joel C. Hoffman, ASA, MAAA, FCA, Senior Vice President, OptumInsight Payer Solutions responds that “Provider-sponsored organizations (PSOs) are not going to change who sees which patients, how they manage/coordinate their care, or what they pay their salaried physicians depending on the type of reimbursement received.   Physicians must move to delivering value regardless of how they are reimbursed.   The historic fee-for-service (FFS) incentives for volume and high-intensity services are already shifting to a blended volume/value system, and this transition will continue to accelerate over time in favor of value.  Many of the leading PSOs are already acutely focused on simultaneously improving patient quality/safety while reducing costs of care, even in their legacy FFS reimbursement relationships. Provider reimbursement will evolve to keep pace with the delivery of clinically integrated, coordinated care – case in point, the growth of value-based reimbursement that is expected to help expedite the transformation of the nation’s healthcare delivery system and make it stick.  But FFS reimbursement by necessity will never totally disappear -- today’s PSOs are showing they can positively transform regardless.”

Douglas A. Hastings, JD , Chair, Board of Directors, Epstein Becker & Green, PC, states in part that  “there is not, nor should there be, any single or simple answer to managing the transition.  The pace of change varies around the country due to historical circumstances, current market activity, and a variety of other variables.  The constants are the need to perform well on evolving consensus quality measures and to contain costs in order to absorb reduced reimbursement in whatever actual form that takes.  In addition, there are affirmative investments necessary to make a successful transition, further underscoring the need for capital and operating cost reductions…..Nevertheless, even the most progressive providers will have a foot in both fee-for-service and value-based payment for a period of time.   Approaches to patient care and financial incentives while different payment methodologies co-exist will vary.   My sense from watching and talking to the most recognized and advanced “Triple Aim”– oriented delivery systems is that they aggressively align treatment protocols and financial incentives within the system toward Triple Aim goals from the outset, even though this approach may cost more in the short run.  They argue that such costs are the price of innovation and doing the right thing and that this approach will pay off in the long run.  I think that they are correct.”

Tom Cassels, Executive Director of Research & Insights, The Advisory Board Company says “disciplined providers aren’t waiting for the conflict created by today’s uncomfortable ‘foot in two boats’ transition to value-based contracting to sort itself out.  Rather they are executing clear strategies to identify areas where investments of time and resources in new care models can yield real near-term returns. For instance, these providers realize that they are already at risk for the total cost of their employee health benefits plans as well as the expense of uncompensated (e.g., uninsured) and under-compensated care (e.g., chronically ill Medicaid patients seeking primary care in the ED).  By following the flow of dollars to areas where reduced spending falls directly to their bottom lines, these organizations are making principled decisions to target segments of the populations they serve where their incentives match the objective of reducing the total cost of care.  This is why some of the most exciting innovation in enhanced primary care, patient navigation, and support for patient self-management is coming out of health systems’ management of their own employees and their dependents.  In the words of one progressive health system CFO, ‘Our own spending shows us where we have the opportunity to create value, and if we can learn to shave on our own face we’ll be more credible to other purchasers as a population health manager in the future.’ ”

Nalini K. Pande, JD, Principal Policy Director, American Institutes for Research  reports that “a recent Commonwealth Fund study has recommended that ACOs align as much of their business as possible with value-based payments.   In fact, providers are currently transitioning to a value-based model that uses incentives to reward value and moving away from the traditional fee-for-service (FFS) model that rewards volume.   How are providers managing this transition?   They have focused on changing their systems and the way they do business.  They are utilizing new care practice models to optimize utilization of services.  This includes predictive modeling to risk stratify a population to identify individual opportunities for intervention.  Providers are also engaging patients in managing their own care and using IT systems to assist with clinical decision support, medical error reduction, and patient safety.  Providers have also adopted new care coordination models with continuous quality improvement and a payment structure that recognizes the added value to patients.  Further, they have set up new infrastructures and systems that allow a shift from quality and efficiency ‘measurement’ to quality and efficiency ‘management’.”

Finally, Peter Boland, PhD, President, Boland Healthcare states in part that “hundreds of organizations are still struggling with variations of the ‘what do we want to be when we grow up’ syndrome. The realists understand that bearing increasing levels of financial risk (and reward) with payers and purchasers is becoming the norm. The straddlers still cling to fee for service and volume-based reimbursement despite the inability of Medicare and employers to support such payment. Many providers have recently taken the plunge into the ‘brave new world’ of Medicare Shared Savings Program with an eye towards a gradual transition to modest risk and gain sharing over a five-year period. ….It is an illusion to think that health delivery organizations can have it both ways.  The industry is at the tipping point where accountability for price and service (the value equation) is ‘the new normal’. Good medicine dictates that patients not be stratified by type of payment.  Good business requires meaningful performance metrics to be agreed upon – and tracked -- as the basis for compensation.”

Accountable Care News includes the Thought Leaders panel answering a timely question of the month in each issue, in addition to several feature stories, industry news briefs, and a profile interview with a prominent person involved with accountable care. You can check it out at www.accoutnablecarenews.com.


What’s Happening at MCOL | Latest Videos on HealthshareTV

By Claire Thayer, September 4, 2012

HealthshareTV has over 300 healthcare related videos readily accessible for your viewing. Select from a wide range of categories, including: Health Reform, Readmissions, Medicaid, ACOs, etc. Here’s just a few of the Latest Videos posted in the past several days:

Predicting Risk of Readmissions for Targeting Patient Intervention

Predicting Risk of Readmissions for Targeting Patient Intervention presented by Maria Basso Lipani, LCSW. Coordinator, PACT (Preventable Admissions Care Team), Mount...

HIX: Two Minutes to Pay or Play

TruvenHealthAnalytic via youtube: Chris Justice, senior director analytic consulting and research services at Truven Health Analytics, addresses the question employers are...

Health IT: Using Data for Evidence Based Quality Improvement

HRSAtube via youtube: Electronic Health Records (EHR), data warehouses, and registries are critical components to quality improvement efforts. If used properly...

COO of a Pioneer ACO says: "'Open' is key to Accountable Care."

AllscriptsTV via youtube: How do you create a connected community of physicians on disparate systems, including even those still on paper,...

For all of the Videos on HealthshareTV, including Trending, Most Viewed, Editor’s Pick, as well as to read the HSTV Blog, Newsletter, visit: http://www.healthsharetv.com/


The Los Angeles Times Reports on The Most Litigious Doctor

Clive Riddle, August 24, 2012

The Los Angeles Times recently ran a feature story, State suing doctor over billing tactics regarding “Jeannette Martello's aggressive tactics to collect fees from emergency room patients — including lawsuits and taking out liens on their homes — prompt unprecedented court case by state officials. “

The article notes that “the state's lawsuit against Martello, however, is the first of its kind, according to Marta Green, California Department of Managed Health Care spokeswoman. State officials allege in court papers that Martello collected or attempted to collect more from patients than insurance companies paid, a practice known as balance billing.”

The story about Doctor Martello’s very unique, aggressive tactics to pursue balance bills for contracted patients first broke months ago in MCOL affiliated Payers & Providers.  The Payers & Providers weekly California Edition reported on her activities, and then released a twelve page white paper,  The Many Stories Of One Highly Litigious Physician, with the sub-heading: “Surgeon Treats Patients at Southern California ERs – Then Sues Them” that details account of her 46 small claims and 23 superior court claims filed against her ER patients during the past several years, and the impact upon a number of the patients and their families.

The Times article cites Payers & Providers Publisher Ron Shinkman: “Ron Shinkman, who wrote about Martello and her tactics in the trade publication Payers & Providers, said he had never seen a more litigious doctor in 19 years of healthcare reporting.”