Entries in Cost & Utilization (53)


Guest Blog from Sander Domaszewicz on Decline in Utilization Metrics

By Clive Riddle, April 30, 2012

Sander Domaszewicz is a Principal with Mercer well-versed in employer and employee health benefit issues, and is a noted national speaker on topics related to this arena. Recently, MCOL’s ThoughtLeaders publication asked it’s panel about the recently observed trends regarding a dip in various utilization metrics. We didn’t connect with Sander in time to ask him this question for the current issue of ThoughtLeaders, but I asked him if he wouldn’t mind doing a short guest blog with his thoughts on the issue.

Question: A number of recent studies have indicated a modest decline in several key patient utilization metrics since the onset of the great recession. Will a long-term change result, or will utilization increase as the economy improves – and what are the implications?

Sander Domaszewicz, Principal, Mercer:

Many of the plan sponsors we work with are busy moving forward with strategies that will right-size utilization now and in the future, making sure that their workforce gets the care they need at a good value, and no more.  Some of the most powerful efforts in this area started to blossom during the great recession, and our expectation is that long-term change will result. 

Employers' focus has shifted to almost equal attention now being given to both the Demand-side and the Supply-side of the care consumption equation.  On the Demand-side, employers are investing in keeping healthy folks healthy and keeping illnesses well-managed for those that have chronic conditions.  This Demand-side aligns with "wellness" or "health management" initiatives and is trying to reduce the demand for health care services in the first place.  If the Demand-side of the intervention breaks down, employers are also addressing the Supply-side of the care utilization equation.  So if people do need to seek health care services, let's make sure we get them the right care, at the right time, from the right provider, for the right price, with the right outcome.  In other words, how can we get the most total value for the health dollar spent.  Consumer-directed health plans, centers of excellence, narrow networks, patient-centered medical homes, ACOs, medical travel, telemedicine, retail/onsite clinics, and other interventions all have Supply-side impact.

Both the private and the public sector purchasers of health services are working diligently to optimize necessary utilization and prevent unnecessary utilization, so better control over time may be more achievable now than at any time in the past.


DME: A Modest Proposal

By Laurie Gelb, April 18, 2012

What's a "convenience item?"

For most plans, it's anything from the elevation feature of a wheelchair seat to a motorized patient lift to a track to move a shower chair into a traditional stall. In other words, it's features, equipment or supplies that you don't want to reimburse.

The rationale for non-reimbursable DME is most often that in and of itself, the "convenient" add-on or gadget doesn't treat a disorder or isn't essential for ADLs. A power wheelchair's tilt and recline functions, for example, are reimbursed because without them a chair-bound patient is more likely to acquire pressure ulcers, which are costly to treat. But vertical elevation -- that's just patients trying to belly up to bars and kitchen counters, right?

Not only.

Often, the elevation feature is used to prolong the time until a passive lift is necessary for transfers. The same is true of hi/lo beds.

So what?

Watch an assisted standing transfer with a confident patient and assistant. Then watch a lift transfer as the patient dangles from a sling, often scraping body parts against a metal frame and risking already-fragile joints and skin. Which one do you prefer from a cost standpoint?

Taking the whole wheelchair higher may also enable use of a urinal or bedpan (supplies that you don’t pay for, whereas you do pay for catheters + the infections they cause), to make it easier for tall helpers to place a lift sling (or to do pivot transfers with more agile patients), for dressing, feeding and many other purposes. If you think about those specific activities, it’s evident that neither tilt (angled seat) nor recline (angled back) can substitute for elevation in those situations.

Now back to reimbursement. Not only is elevation per se often considered a “convenience, but often it’s not even submitted for reimbursement. Many patients don't even ask for it, even if they are aware it exists, because their DMEs tell them not to bother. Sit-to-stand lifts and chairs are another example of usually-unreimbursable items that yield huge health outcomes for appropriate patients, from avoiding hospital stays for impaction to improved respiratory function.

Much very pricey DME, from mobility to respiratory aids, is never submitted for reimbursement because of time pressure (quicker to buy from the Internet or as self-pay); complexity of the reimbursement process; pressure from a DME to file the easy part; a required preauth wasn't filed in time; DME annual limits and/or specific exclusions.

Is all the DME being bought and sold via the Internet (whether Craigslist or DOTmed) or donated by others good or bad for MCOs? To the extent that it's not reimbursed, you might think that it's just fine. But then turn full circle for the sequelae of obsolete, inappropriate and/or flat-out dangerous equipment and you'll see plenty of potential costs.

Ill-considered Internet purchases and donations aren't the only threat to DME safety; wheelchair-bound/NIV patients who "give up" on or wait forever for unresponsive DME firms who avoid service visits (in part because reimbursement is so uncertain) are practically a cliché.

Visit the homes of the chronically ill, even those comparatively well off and with private coverage, and you'll see fraying slings holding patients whose fall would mean a final hospital stay; rusty equipment with unpredictable steering; BiPAP and even vents being used improperly because no one in the household knows how to titrate them and can't get anyone to help; family members (likely in your network as well) risking severe back injuries because the right equipment for transfers/showering/toileting isn't available.

Some paras and quads "eat like dogs" (often choking in the process) out of bowls because they don't have access to a helper to feed them, and of course wheelchair trays and special utensils aren't covered. Nonetheless, your budget will take a hit at some point, and nutritional status compromised by illness comes under the heading of medical need in most textbooks.

Undeniably, your DME charges for lease months and sales for what you do cover, are way more than patients can pay on the Internet or elsewhere. And this goes back to inflated manufacturer pricing, often in expectation of contracted discounts but also in some cases, simple greed.

The root cause: contracted prices and often suboptimal product quality/selection deplete your DME budget to the point that you can't see a business case for the simple items that would pay for themselves and support your case for "caring" as well. Moreover, DME caps basically tell patients to go anywhere but the traditional system to access equipment. How predictable are the outcomes of back alley DME acquisition?

To put it another way, how much do you know about Helen Jones' fall because the eight-year-old walker passed on from her great-aunt wasn't gripping the sidewalk any longer? You paid for her hospital stay and rehab for a broken hip, and she may need home health on discharge. She didn't know that her walker needed new feet (nor would she have known where to get them), because she has low vision and no one she knows has any familiarity with checking walker feet.

No one teaches us about DME; the provider/plan Web sites so thick with rich media ignore it, so the major sources of information on DME are patient forums and YouTube videos, neither of which Mrs. Jones, 82, is likely to access.

The reciprocal of DME providers’ natural desire to remain profitable, is patients who don't know the system, who don't know when/how to use network benefits and when/how not to; how to access help with equipment that they need to have, or that doesn't work how they need it to; and a system that seems massively disinterested in the change that everyone "agrees" is needed. We obsess about medication errors that leveraging IT and FMEA can fix, but don't touch a larger, increasingly relevant (checked the age trend of your membership lately?) issue.

Beyond medical costs, MCOs incur the cost of fraud. I’ve seen recent drastically upcoded invoices to MCOs from DMEs that patients and family members, exhausted from the calls needed to obtain a facsimile of necessary equipment, not to mention the burden of care, didn't even perceive, or when they did perceive them, didn't blink. Why should they care if the MCO pays more than its contract stipulates, for something they never received, when they perceive that the MCO is depriving them of needed equipment and help?

From the other side, I've seen invoices with incorrect patient names, provider names, equipment codes and diagnosis mismatches sail through (as with home health, but that's another story). The DME claims processing burden is great on the payor side as well. The complexity of regulations for the sake of cost control are only getting worse.

The US managed care maze has also kept many highly-rated European manufacturers out of the US market entirely, except for authorized facility-only distributors, who don’t want the hassle of selling to home care.

Does US access to European products matter? Well, only if you’d like your members to have access to options like wool and fleece lining for slings to protect delicate skin; smaller patient electric lifts and tracks to use in apartments, as opposed to relatives’ [insured by you?] backs; freestanding track systems to reduce mobile lift risk, better repositioning aids, etc. Oh, but wait --none of these are usually covered items, anyway. Well, therein lies part of the problem.

Now imagine that DME was reimbursed like an office visit or injection. Provider in network? Check. Correct coding? Check. Eligible patient? Check. No duplication within six months (just as we don't reimburse two fills for the same med if dose is available or two right leg amputations)? Check. Not experimental? Check. Medical/ADL use (like, not a scooter flag or strobe light)? Check. Then you process the claim.

  • How much would you lose?
  • How much would you and patients gain?
  • How much admin cost would you save?

Sure, you'd cap coverage at one power chair per interval, and other obvious constraints. But a track to get quads into a shower, yes, you'd pay (paid for any skin infections or UTIs lately?). Or an elevator on a power chair. Or a new sling to replace the one that’s frayed past safety.

And on this planet, reputable Internet suppliers could be in-network, too. Yes, certain manufacturers would be upset by this. But, down the road, how long can you continue the game? We’re not in Kansas any more.

Could you pilot a low-complexity DME program for certain dx? Patients at risk and/or high utilizers? Maybe in conjunction with existing disease management? Of course you could. Medicare, Medicaid or private plan, everyone’s feeling the pain (quite literally).

And why would you make the effort? Because the next patient held hostage to inadequate equipment and support may be someone you know.


The Current Facts on Alzheimer's

By Clive Riddle, March 8, 2012

The Alzheimer's Association this week released their 2012 Alzheimer's Disease Facts and Figures, with the full report available from their web site.

Harry Johns, President and CEO of the Alzheimer's Association, tells us "Alzheimer's is already a crisis and it's growing worse with every year. While lives affected and care costs soar, the cost of doing nothing is far greater than acting now. Alzheimer's is a tremendous cost driver for families and for Medicare and Medicaid. This crisis simply cannot be allowed to reach its maximum scale because it will overwhelm an already overburdened system."

Johns goes on to say "this disease must be addressed on parallel tracks: supporting research to find treatments that cure, delay or prevent the disease, and offering assistance and support to the more than 5 million Americans now living with Alzheimer's and their more than 15 million caregivers. This is what the National Alzheimer's Plan is all about. Caring for people with Alzheimer's and other dementias costs America $200 billion in just one year. By committing just one percent of that cost, $2 billion, to research it could begin to put the nation on a path to effective treatments and, ultimately, a cure. Given the human and economic costs of this epidemic, the potential returns on this one percent solution are extremely high."

Here's a selection from the boatload of information provided in their 72 page report on Alzheimer's and other dementias:

  • $140 billion will be paid by Medicare and Medicaid in 2012 for care and treatment
  • Total costs by payer for 2012 will be $200 billion, broken down as follows: Medicare $104.5B; Medicaid $33.5B; Out-of-pocket payments $33.8B; Other $26.2B
  • Medicare payments for an older person with Alzheimer's and other dementias are nearly three times higher and Medicaid payments 19 times higher than for seniors without Alzheimer's and other dementias.
  • A senior with Alzheimer's and diabetes costs Medicare 81 percent more than a senior with diabetes but no Alzheimer's.
  • An older individual with cancer and Alzheimer's costs Medicare 53 percent more than a beneficiary with cancer and no Alzheimer's.
  • An estimated 800,000 individuals have Alzheimer's and live alone, and up to half of these individuals do not have an identifiable caregiver.
  • The 15.2 million friends and family members of the 5.4 million individuals with Alzheimer's and other dementias provide 17.4 billion hours of unpaid care valued at more than $210 billion.
  • 200,000 of the Alzheimer's population are under age 65 with “younger-onset Alzheimer's”
  • 45% of seniors over age 85 have Alzheimer's
  • 16 percent of women age 71 and older have Alzheimer’s disease or other dementias compared with 11% of men
  • Someone develops the disease every 68 seconds
  • Alzheimer's is the sixth-leading cause of death in the country and the only cause of death among the top 10 in the United States that cannot be prevented, cured or even slowed.
  • Based on final mortality data from 2000-2008, death rates have declined for most major diseases – heart disease (-13 percent), breast cancer (-3 percent), prostate cancer (-8 percent), stroke (-20 percent) and HIV/AIDS (-29) − while deaths from Alzheimer's disease have risen 66 percent during the same period.
  • Alzheimer's accounts for somewhere between 60-80% of all dementia cases

Midwest Business Group on Health’s Quest to Reduce Elective Preterm Deliveries

By Clive Riddle, March 2, 2012

Last week,  Larry S. Boress, President & CEO of the Midwest Business Group on Health was one of three featured speakers in the HealthcareWebSummit event: Managing an Increasing Trend of Elective Preterm Deliveries.

MBGH has taken a keen interest in facilitating a reduction in elective preterm deliveries, and Larry shared why purchasers have gotten involved, and what they are doing about it.

Larry’s opening arguments were:

  • Maternity care is the number one reason for hospitalization among employee populations
  • The highest cost for maternity care is when underdeveloped infants are treated in the neonatal intensive care units of hospitals
  • Preterm infants are less likely to survive to their first birthday than infants delivered at full term
  • Those preterm babies who do survive are more likely to suffer long-term costly disabilities than infants born at term

He shared 2009 Data compiled by Thomson Reuters for the March of Dimes, which compared average expenditures for newborn care yielding $4,551 for uncomplicated cases vs. $49,033  for premature/ low birth weight cases.

So what exactly is an early elective delivery. Larry offered these characteristics:

  • The newborns delivered with a gestational age between the 37th and 39thcompleted week, that were delivered electively
  • Early elective deliveries are performed on women of all backgrounds and incomes.
  • These are distinct from early deliveries performed due to clinically-appropriate reasons to avoid health problems facing the mother or the infant

And what is the scope of early elective deliveries? We learned that the national average is up to a rate of 17% of deliveries, while the Leapfrog group has set a current target at 12%. Minnesota, South Carolina, Indiana and Arizona all have rates above 25%. Virginia, Florida, and New York exceed 20%. While 53% of hospitals are at or below the Leapfrog target of 12%, 33% of hospitals have rates of 20% or higher (6% of hospitals have rates of 45% or higher.)

What are the motivations to have an elective preterm delivery, despite the dangers and costs? Larry cites these delivering physician convenience factors: (A) Guarantee attendance at birth;  (B) Avoid potential scheduling conflicts; (C)  Reduce being woken at night; and (D) the NICU can handle it. Furthermore, Larry offered these motivations for the mothers:

  • Prior bad pregnancy
  • Desire to deliver on special date or holiday
  • Special circumstances
  • Cultural factors
  • Ability to  plan in advance for birth
  •  Convenience
  • Ability to be delivered by her doctor
  • Maternal intolerance to late pregnancy
  • Excess edema, backache, indigestion, insomnia

But there are serious quality implications of non-medically indicated early deliveries beyond cost that Larry cited:

  • Increased NICU admissions (and separation from mother)
  • Increased respiratory illness
  • Increased jaundice and readmissions
  • Increased suspected or proven sepsis
  • Increased newborn feeding problems and other transition issues
  • Under developed brain and lungs
  • Potential development of cerebral palsy

The good news is this is now a national quality measure for the National Quality Forum (NQF); Leapfrog Group; The Joint Commission; and AMA Physician Performance Consortium Measure.

Larry closed by noting that in the twelve months since MBGH made its initial Call to Action to reduce elective preterm deliveries, over 70% of hospitals reduced their early elective delivery rates below previous levels, and many have set 5% as their goal.


Thought Leaders Thoughts on Readmissions

By Clive Riddle, January 20, 2012

Health Policy Publishing LLC this week launched its inaugural issue of Readmissions News, which is targeted at stakeholders interested in the management of hospital readmissions. One of the features of the new monthly newsletters is a Thought Leaders corner, and in this issue, experts were asked "Do you feel significant potential savings and improvements from further reductions in hospital readmissions can be achieved through the current set of public and private initiatives, or are expectations too high?"

Here are excerpts of what they had to say in response:

Randall Krakauer, MD, FACP, FACR; Aetna’s National Medical Director, Consumer Segment said in part “….The potential for impact has been demonstrated with several different programs under different conditions.  However, there is still a significant opportunity to broaden these efforts and create additional improvements in quality and savings.  Aetna has partnered with Dr. Mary Naylor at the University of Pennsylvania School of Nursing in developing and implementing a transitional care model that has resulted in improved quality and reduced costs for our Medicare Advantage members.  The demonstrated potential creates an imperative that public and private organizations work together to continue to expand these initiatives.  We should expect these types of programs to be as much a part of health care delivery as any other public health measure with demonstrated and accepted value.”

 Jeff Lemieux, AHIP’s Senior Vice President, Research, gave a response that included:  “The 20 percent reduction in readmission rates proposed in the Partnership for Patients Initiative sets an initial target for all stakeholders.  However, preliminary studies of variation in readmission rates across regions and plan types – and the measured success of certain transitional care programs – suggest that larger reductions may be possible.  We should aim for across-the-board improvements in all hospitals and for all patients, whether coverage is through public programs or employer sponsored insurance.  We should track progress on readmissions in the context of overall hospitalization rates….”

William J DeMarco, MA, CMC, President & CEO, Pendulum Healthcare Development Corporation, included in his response:  “…Hospitals that dropped their home health agencies need to rethink how they can realign the existing home health system or expand their own to take the pressure off of doctors by having these agencies step in with skilled nursing and custodial care.  This may include cross training people to come to the aid of those with chronic conditions early instead of having these patients filling the ER.  Several HMOs and some hospitals are building ‘navigator’ programs to attract and train people who are not professional RNs or LPNs but can be trained to watch for signs of a chronic care patient losing their way on the path to improved health status….”

Brian Jack MD, Professor and Vice Chair, Department of Family Medicine, Boston University School of Medicine / Boston Medical Center;  concluded his remarks with:  “….A variety of implementation demonstrations for hospital based transition programs such as RED, BOOST, STARR, and H2H are gaining momentum and allowing researchers to study what works and what does not.  Across the country there is now a long list ‘early adopter’ hospitals that have demonstrated remarkable reductions in readmission rates.  All this effort is forcing hospitals and communities to work together as partners, a necessary ingredient for successful ACOs.  However, safe readmission reduction can only happen if hospitals have well developed community-based partners, particularly primary care partners, willing and able to care for patients in the community.  We need to ensure that this primary care safety net is available for patients.”

Alexander Domaszewicz, Principal, Mercer, concluded  “…. real, sustainable improvements that don't require constant oversight, monitoring, and effort will likely take a shift in marketplace practices driven by payment practices. HHS not paying for readmissions caused by ‘never events’ and guarantees like Geisinger's pledge to not charge for readmissions after heart surgery within ninety days are key examples of how to get every facility and practitioner keenly focused on eliminating readmissions.”

Benjamin Isgur, Director, PricewaterhouseCoopers LLP's Health Research Institute, continued his discussion, asking  “….How responsible should hospitals be when community doctors or patients fail to follow discharge instructions?  Can hospitals realistically cut readmissions when so much is out of their control?  However, it is possible to reduce preventable readmissions if hospitals address three major issues: discharge planning, length of stay, and closer alignment to physicians.  All of these issues relate to focusing on the total health of a patient instead of performing a procedure. ….”

Peter Kongstvedt, MD, FACP, Principal, P.R. Kongstvedt Co., LLC , opened his reply with “We’re going to see modest improvements at best until we address the lack of coordination and follow up in both the transition from inpatient to outpatient and coordinated outpatient management of patients with multiple chronic diseases. Many of the approaches to managing patients with multiple complex diseases are able to demonstrate improvements in quality, but few demonstrate improvements in overall costs.  The exception is nurse-led teams involving multiple clinical disciplines and access to physician support…..”

Finally, Martin S. Kohn, MD, MS, FACEP, FACPE, Chief Medical Scientist, Care Delivery Systems

IBM Research;   concluded his remarks by saying  “….Many organizations have substantially reduced re-admissions using current technology. The greater challenge will be reducing all admissions, over longer periods for more patients.  A patient will not view a re-admission on the 31st day differently from an admission on the 29th day.   Keeping more patients safely out of the hospital will require enhanced population and predictive analytics to personalize the prevention programs to make them economically efficient with improved outcomes.”

A complimentary copy of the inaugural issue of Readmissions News can be obtained by visiting http://www.readmissionsnews.com/sample_issue.php

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