PWC Health Research Adds Team Focused on Healthcare Policy and Regulatory Issues

By Claire Thayer, December 3, 2012

PwC’s Health Research Institute has announced the expansion of its health industry research arm to include a dynamic new team focused on healthcare policy and regulatory analysis.                     

Based in Washington, DC, the regulatory team will issue a weekly report and periodic in-depth examinations of major legislative and regulatory developments, providing analysis on the implications for organizations across the health spectrum, including insurers, providers, pharmaceutical and medical device companies, as well as employers and consumers. 

Benjamin Isgur, a director and former legislative director for the Texas House of Representatives will oversee the new team, comprised of:  Matt DoBias, Bobby Clark, and Caitlin Sweany.

For more information, read PwC’s press release at:


Wait – Health IT Increases Costs?

By Kim Bellard, November 29, 2012

Two recent reports challenge the prevailing conventional wisdom that increased spending on, and use of, electronic medical records and other clinical health IT will help control costs.  If these are true – and it’s too early to be sure – it may be because we’ve approached health IT in the wrong way.

Kaiser Permante looked at their experience in their Colorado plan for five years, comparing the utilization of 44,000 users of My Health Manager, Kaiser’s patient portal, to 44,000 non-users.  Pretty much across the board -- from office visits to ER visits and even inpatient stays, among other measures – the online users had higher utilization, and their utilization went up after gaining online access.  Kaiser’s portal allows for email consultation with their physician, but not only did that not deter some of these increases, the online users’ telephone calls per member were still actually higher than non-users.  

There’s more bad news for health IT proponents.  The New York Times recently reported that their analysis of Medicare data indicates hospitals are collecting more than $1billion more in 2010 than five years prior, in part because of how they have changed billing codes in the emergency room.  The Times associated many of these increases with introductions of electronic medical records in specific hospital systems, and asserts that some physicians outside the hospital setting are also using their EHRs to maximize billings.

The belief is that the EHRs can prompt physicians to code their documentation in ways that maximize payment, or to “cut and paste” documentation from other patient visits which might not accurately represent the services the patient received.   Some of these practices would be fraudulent, while others are just part of the ongoing arms race over up-coding.  Either way, the EHRs may be helping.

Raising yet another red flag, the HHS Office of Inspector General just issued a report warning that CMS does not have appropriate safeguards in place to monitor the EHR incentive program, either prior to the incentives being paid or once they’ve been paid.  The outcome could be fraud and/or less meaningful use than anticipated.

Meanwhile, a study on e-visits by Dr. Attev Mehrotra and colleagues had more mixed results.  It looked at visits for sinusitis and UTI for 4 primary care practices.  Their results found the e-visits resulted in significantly fewer tests being ordered for UTIs, but also a higher rate of antibiotics prescribed for both conditions.  The rate of follow-up care – a rough proxy for misdiagnosis -- was similar for e-visits and office visits.  The authors did not look directly at costs but their estimate was that e-visits may have led to lower costs per visit, taking into account the lower reimbursement for the e-visit itself.

For better or worse, EHRs would seem to be here to stay.  A recent survey by The Commonwealth Fund illustrates this.  CWF surveyed primary care physicians in 11 countries, including the United States.  Between 2009 and 2012, use of EHRs went up from 49% to 69% in the U.S.  Of course, seven of the other countries still are ahead of the U.S. in adoption rates, by as much as 30 percentage points.  And only Canada started from a lower point. 

More disappointingly, the U.S. ranks in the middle of the pack for “multifunctional HIT capacity,” with only 27% having EHRs that allow them to generate patient or panel information, or to give them clinical decision support.  We rank in the lowest third for ability to exchange patient information or test results with doctors outside their practice, with only 31% of U.S. primary care physicians having that ability.   We’re certainly not living up to EHR’s potential.

Consumers certainly appear ready for the new world.  OptumHealth recently found that three-fourths of consumers want online access to their records, although only 40% currently report such access, and 60% want to communicate with their physicians online.  Similarly, Manhattan Research found that 73% of American adults use online health information and tools, and 54% of online consumers are using the online resources in their choices of providers, treatments or services.  This is most pronounced for newly diagnosed patients.  This is good news, I think, although I’m still skeptical about how good the information is by which consumers may be making these choices.

Which leads me back to the Kaiser study and the NYT analysis.  The Kaiser results suggest to me that more engaged patients are taking advantage of the online resources, and at this stage of EHR evolution it doesn’t surprise me that those engaged patients are care-seeking.  As for the alleged up-coding the NYT warns of, to the extent the EHRs are prompting physicians to be more thorough, that’s a good thing; to the extent it is facilitating fraud, it must be fought.  The proof of the pudding is in the eating; in this case, how are patients faring with their treatment(s)?  This is where only EHRs offer us hope to give us better information, and why we can’t give up on them just yet. 

Many providers have embraced EHRs and health IT to improve their delivery of care, while others are still gamely trying to figure out how to do so.  Any provider that is not trying to re-engineer their processes may have a tough time in the coming years, so kudos to the ones aggressively taking advantage of technology to help patients.  Why taxpayers need to subsidize this kind of re-engineering, though, I’m less sure. 

It strikes me that the HITECH stimulus has compounded the provider-centric focus of our health care system.  It does, after all, pay providers for provider EHRs, and Meaningful Use for consumers is essentially only an after-thought.  The current incentives could mean that patients end up with access to disparate records at their various providers, and if they are lucky some of those provider systems may share data.  We should be expecting more than that.

We continue to think about patient data incorrectly.  A case in point was reported recently by The Wall Street Journal.  Long story short, Medtronic defibrillator devices now produce significant amounts of data wirelessly once implanted.  Medtronic shares the data with the patients’ cardiologists, and is now trying to further monetize the data through sales to payors or other entities, but does not see the patients as either customers or even entitled to the data.  That data is generated from those patients’ chests, mind you.  Medtonic and some physicians see the data as too complex for patients, but maybe they’re not thinking hard enough about how to make it useful to those patients.

Instead of HITECH, perhaps what we should have done was to stimulate the patient health record industry, transforming it from simple medical records to virtual health assistants.  These online assistants would take information from various providers’ EHRs, from the ever-increasing number and types of monitoring devices available, and from patient inputs, plus offer patients features like dashboards that summarize their health, suggestions for improving/maintaining their health, and assistance with choosing appropriate treatments and/or providers when necessary.  I bet IBM would see a potential role for Watson here.

A patient-centric health system would start an EHR initiative by analyzing what information patients need, and then determine what information was needed from the providers’ records to support that information.  Instead, we have provider-specific EHRs that can’t talk to each other and that patients often can’t understand – when they are fortunate enough to get access to them. 

As long as EHRs and health IT continue the provider-centered, provider-siloed approach of our current health system, I’m not holding my breath for them to really bend either the cost or quality curves.


MCOL Blog | Complimentary On-Demand Webinar: Executing on the Individual Mandate – Challenges and Opportunities

By Claire Thayer, November 26, 2012

Complimentary One hour On-Demand webinar: Executing on the Individual Mandate: Challenges and Opportunities. This webinar video provides a discussion of the current state of the retail health insurance market, steps to transition from a B2B to a Business-to-Consumer environment and what some of the important IT implications are for health care payers. Oracle health insurance offers both a health insurance platform (exchange portals and business rules) as well as a healthcare payer business intelligence platform (claims, financials, member services, business rules and products) and provides an overview of these platforms as well as a case study analysis. Listen to this complimentary On-Demand webinar at your convenience


Predictive Analytics: A Product Evaluation Invitation for Hospital-Based Providers

By Claire Thayer, November 19, 2012

MCOL invites Case Managers, Discharge Managers and Nurse Managers from hospitals and health systems to join us for a complimentary webinar on December 4th and participate in market: Predictive Analytics at the Bedside | A market study for hospital based providers. MEDai / Elsevier speakers will present a product evaluation for inpatient specific clinically meaningful risk predictions.

Identify risk levels and risk trending for five critical outcomes:

• Risk of excessive Length of Stay
• Risk of Transfer to ICU during hospitalization
• Risk of 30 Day Readmission following discharge
• Risk of Sepsis during hospitalization
• Risk of Mortality during hospitalization

Register at:


Mercer Weighs in on Employer Health Benefit Cost Projections

By Clive Riddle, November 16, 2012

Here’s what Mercer has to say about the rise in  health benefit costs:  “growth in the average total health benefit cost per employee slowed from 6.1% last year to just 4.1% in 2012. Cost averaged $10,558 per employee in 2012. Large employers – those with 500 or more employees – experienced both a higher increase (5.4%) and higher average cost…. Employers expect another relatively low increase of 5.0% for 2013. However, this increase reflects changes they plan to make to reduce cost; if they made no changes, cost would rise by an average of 7.4%.”

This is based on results from Mercer’s annual National Survey of Employer-Sponsored Health Plans, which includes public and private organizations with 10 or more employees; with 2,809 employers responding in 2012. The full survey results will be released in April 2013.

 How does this compare to what other major human resources/benefits consulting firms are estimating? Here's what we reported in our Tidbits column in the October 6th edition of MCOL weekend:

Aon Hewitt reports that "the average health care premium rate increase for large employers in 2012 was 4.9 percent, down from 8.5 percent in 2011 and 6.2 percent in 2010. In 2013, however, average health care premium increases are projected to jump up to 6.3 percent."  Towers Watson's survey "projects a 5.3% net increase in total health benefit plan costs after any plan changes are taken into account, increasing the average cost per active employee from $10,925 in 2012 to $11,507 in 2013. Of the 2013 total, employees will pay an average of $2,596, or 22.6%, up from $2,436 in 2012." The Segal Company  projects 8.8% increases in 2013 for open access PPOs (10.0% in 2012; 8.2% increases in 2013 for HMOs (9.6% for 2012) and 9.1% increases in 2013 for HDHPs (10.4% in 2012.)

Mercer makes particular note of the impact of CDHPs in the employer benefit arena. They state that “with a growing number of employers now positioning a high-deductible, account-based consumer-directed health plan as their primary plan – or even their only plan – employee enrollment jumped from 13% to 16% of all covered employees in 2012. Many employers see these plans as central to their response to health care reform provisions that will raise enrollment. Over the past two years, offerings of CDHPs have risen from 17% to 22% of all employers, and from 23% to 36% of employers with 500 or more employees. Well over half (59%) of very large organizations (20,000 or more employees), which typically offer employees a choice of medical plans, now offer a CDHP. With the cost of coverage in a CDHP with a health savings account is about 20% lower, on average, than the cost of PPO coverage – $7,833 per employee compared to $10,007 -- employers are increasing willing to make the CDHP their primary or even their only plan. Among large employers that offer an HSA-based CDHP, average enrollment rose from 25% to 32% in 2012. And, when asked if they expect to offer a CDHP five years from now, 18% of large employers say they expect to offer it as the only plan, up from 11% in 2011.”