Archive for the ‘Healthcare’ Category

Is It Time to Reform the Fee-for-Service Model?

Tuesday, September 25th, 2012

Despite the healthcare industry’s attempts to alter the way in which physician reimbursements are determined,  fee-for-service is still the accepted basis for payment.  Typically, physicians are reimbursed according to the number of patients they see and how many procedures and tests they order.  Policymakers have concluded that the “do more, earn more” business model is deeply flawed and one reason why Americans pay so much for healthcare.  In 2012, Americans will pay more than $8,000 per individual on healthcare.  That’s more than double the $3,400 average spent for each person in other industrialized nations.  What’s more, all that spending has not made Americans healthier.

The time may have come to find a new reimbursement model that places less of a financial burden on patients while still rewarding physicians.  An August article in the Journal of the American Medical Association notes that the fee-for-service payment is the foundation of even some emerging accountable-care organizations, including Medicare’s popular shared-savings program, say Drs. Allan Goroll of Harvard University Medical School and Stephen Schoenbaum of the Josiah Macy, Jr., Foundation.  The shared-savings program “Promotes accountability for a patient population and coordinates items and services under (Medicare) Part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”

Goroll and Schoenbaum isolate a number of reasons for why fee-for-service endures:  many physicians are risk-averse and so resist change; additionally, skepticism is a “major barrier” to reforming the payment model.  “Transitioning to a new payment system will require new modes of practice, and many physicians feel ill equipped to assume financial or performance risks individually or even collectively,” Goroll and Schoenbaum write.  “The concern is that continued reliance on fee-for-service payment for primary care as well as for specialists, with its emphasis on volume of services, threatens meaningful practice transformation and the very goals of delivery system reform.” The bottom line is that the healthcare industry must develop “robust, scientifically validated risk-adjustment models,” according to Goroll and Schoenbaum.  Payment reform could blend capitation and fee-for-service with a plan to revise the payments over time.

Change must be forced on the medical community, whether or not they are ready for it.  One provision of the Patient Protection and Affordable Care Act (ACA) requires alterations to payment and delivery systems to control costs and enhance the quality of care.  Rather than basing payment solely on the number of patients a physician sees and tests ordered, these methods promote preventive care and maintain open lines of communication between a patient’s multiple physicians.

The potential alternative reimbursement models presently being considered include:

•       Bundled payments or fixed amounts paid to healthcare providers for related services a patient needs within a given timeframe.

•       Patient-centered medical homes.  This model would restructure primary-care practices so that their focus is on preventive medicine, patient education and healthcare coordination.

•       Accountable care organizations, in which physicians and other providers share responsibility for providing cost-effective, quality care for patient groups.

Big Medicine Is Watching You

Monday, September 24th, 2012

Big Medicine is on the way, according to celebrated author and Harvard professor, Atul Gawande, In a major article in the New Yorker, Gawande describes the new frontier of ICUs as ones where patients may be monitored not from a telemetry station within the hospital but from a remote command center filled with high-tech screens and armies of highly-trained technicians that could be miles away and serve multiple hospitals.

Gawande cites the example of Dr. Armin Ernst, who is responsible for Steward Health Care’s ICU operations at the system’s 10 hospitals, serving approximately 8,000 patients annually.  “He sees it (the ICU) as the temporary home of the sickest, most fragile people, Gawande writes.  ”Nowhere in healthcare do we expend more resources.  Although fewer than one in 4,000 Americans are in intensive care at any given time, they account for four percent of healthcare costs.  Ernst believes that his job is to make sure that everyone is collaborating to provide the most effective and least wasteful care possible.”

Ernst’s ICU command center is a one-story building that contains millions worth of technology, banks of computer screens carrying cardiac-monitor readings, imaging scans, and lab results.  Special software sends an alert when it detects patterns that raise concerns.  Doctors and nurses operate consoles where high-definition video cameras zoom into any ICU room and talk directly to the staff or to the patients themselves.  Soon, the tele-ICU team will monitor the care for every ICU patient in the Steward system.

The experience was eye-opening for Gawande.  After five minutes of observation, I realized that the remote ICU team wasn’t exactly in command; it was in negotiation, Gawande writes.  Sometimes the bedside staff resist resolving problems that the E-ICU staff identify.  You have got to be careful from patient to patient, Gerard Hayes, a tele-ICU doctor, explained.  Pushing hard has ramifications for how it goes with a lot of patients. You don’t want to sour whole teams on the tele-ICU.  Several hospitals have decommissioned their systems; clinicians have placed gowns over the camera, or torn the camera out of the wall.

Despite some opposition, there is good reason why hospitals are adopting the E-ICU model.  Remote monitoring is a high-tech solution to a sticky problem facing hospitals: how to care for the sickest patients amid a worsening shortage of intensive-care physicians.  Currently, only one third of ICU patients receive care from an intensivist.  The Department of Health and Human Services believes that demand for intensivists will outstrip supply over the next 30 years.  Initial results from the E-ICUs have been dramatic: Mortality rates are 30 to 40 percent lower when physicians provide 24/7 care to prevent complications and minimize errors. A University of Massachusetts Medical Center study of 6,400 patients in seven adult intensive-care units monitored by E-ICU showed substantial benefits in reducing both costs and mortality, according to the hospital’s director, Craig Lilly.  The hospital saved $5,000 per case, mostly because the system lets intensivists in the remote-command center “detect instability and bring new treatment to the patient before they would have received it in a typical ICU.”

GOP VP Candidate Paul Ryan Advocates “Medicare Premium Support”

Wednesday, September 5th, 2012

Now that Representative Paul Ryan (R-WI) has been selected by former Governor Mitt Romney (R-MA) as his vice presidential running mate, the debate is focusing on the Wisconsin representative’s plan to reform Medicare.  Known as Medicare Premium Support, it “refers to a system under which Medicare enrollees would pick from a menu of competing plans with a fixed government payment to help defray premium costs.  Enrollees would be on the hook for any charges above the government contribution.  But they could save money by selecting a plan with a premium below the federal subsidy.”

Ryan says that under his plan, the government’s contribution toward premiums will equal the cost of the second least expensive plan in any market — or traditional Medicare — whichever costs less.  Ryan believes that his plan is politically feasible because it doesn’t begin until 2022 with the result that it retains traditional Medicare for Americans who were 55 and older in 2011 — meaning that baby boomers are exempt from the changes.  Democrats who oppose the plan contend that Ryan’s Medicare overhaul would subject seniors to the vagaries of the private market, leaving them with little protection against rising premiums and negligible benefits.

So what is the difference between the Democratic and Republican cuts to Medicare?  The ACA stresses government control and central planning. The law creates a panel of 15 unelected government officials, called the Independent Payment Advisory Board (IPAB) to direct changes that will shrink spending by cutting physician and hospital reimbursement.  The Wyden-Ryan plan preserves the ACA’s targets for future Medicare spending, but uses competitive bidding.  Seniors would have the same benefits that they do now, and would have the option of choosing from several government-approved private insurance plans.

The Republican budget targets Medicare growth of GDP plus 0.5 percent, just as the 2013 Obama budget does. The difference lies in the fact that the GOP budget repeals the ACA, while maintaining that law’s Medicare cuts.  The Democratic budget leaves the ACA in place.

Writing in the Washington Post, Ezra Klein puts the difference in a nutshell:  “The difference between the two campaigns is not in how much they cut Medicare, but in how they cut Medicare.”

In an exclusive interview with Modern Healthcare magazine, Ryan says that “This is an idea whose time has come.  And it’s a bipartisan idea.  What Representative Ron Wyden (D-OR) and I tried to do was to plant the seeds of a bipartisan consensus.  We knew we weren’t going to pass it because of the politics.  We did this together to get the consensus-building started.”  Ryan believes that the plan’s chances for approval will greatly improve in 2013 — especially if the Romney/Ryan team wins the November 6 presidential election.  “I’m actually pretty optimistic,” he said, noting that the United States should reform healthcare on its own terms and “fix this on our terms” instead of borrowing European ideas.  “We believe there are far superior ways to get back to a patient-centered healthcare system, the nucleus of which is the patient and doctor — and not the government,” Ryan said.  “We believe consumer-driven, market-based reforms do more to alter the cost curve of healthcare inflation.”

If Ryan’s plan is enacted into law, people 55 and younger would see a change from one in which everyone gets the same set of government-paid benefits to one in which the government gives all senior citizens a fixed amount of money.  They could use this to purchase private insurance or pay a portion of the cost of enrolling in traditional Medicare.  Ryan has not said how much the premium support payment would be.  But he would limit the annual growth rate to no more than one-half percent more than the economy’s overall growth rate, even though healthcare costs are rising at a significantly faster pace.  Ryan’s plan would also raise the Medicare eligibility age to 67 from 65 by 2034.

Not so fast,” Democrats warn as partisans from both parties accuse the other side of throwing senior citizens under the bus.  “Make no mistake about it — these Republicans don’t believe in Medicare,” Obama campaign senior adviser David Axelrod said.  “They want to turn it into a voucher program.  And slowly, all the burden is going to shift to seniors themselves.  And that is not an answer to entitlement reform.”

Republicans counter that $716 billion in cuts to Medicare are already a part of the Patient Protection and Affordable Care Act (ACA).  An online video created by the Republican National Committee features Ryan saying that Democrats “have refused to make difficult decision because they are more worried about their next election than they are about the next generation.”  According to Ryan, “We won’t duck the tough issues; we will lead.”

Uwe Reinhardt, a healthcare economist at Princeton University disagrees, saying that rather than motivating insurers to control their costs, the Ryan plan will not benefit seniors.  “You’re essentially shoving these guys out on a boat, saying, ‘We’ll give you a push, but if the waves are rough, you’re on your own,” he said.  “It would really worry me if I were a middle-class American.”

Is End-of-Life Care Worthwhile?

Monday, August 27th, 2012

Even in the age of advanced healthcare directives and living wills, Americans still must cope with a dilemma when it comes to end-of-life healthcare for themselves or their loved ones.  Consider the fact that Medicare pays as much as $55 billion annually for physician and hospital bills during the last two months of patients’ lives.  That’s more than the budget for the Department of Homeland Security, or the Department of Education.  Estimates are that 20 to 30 percent of these medical expenses usually have no meaningful impact.  The federal government pays for a majority of the bills with no questions asked.  Medicare spends nearly 30 percent of its budget on beneficiaries in their final year of life.

Given this information, the question is whether extending someone’s life is worth the money it can potentially cost.  The solution potentially could have been a snap for Congress when it passed the Patient Protection and Affordable Care Act (ACA).  Unfortunately, the previously bipartisan issue quickly became a political hot potato.

According to Dr. Ira Byock, it costs as much as $10,000 a day to maintain someone in the intensive-care unit, even if the patient remains there for weeks or even months.  “This is the way so many Americans die. Something like 18 to 20 percent of Americans spend their last days in an ICU,” Byock said.  This discussion raises the philosophical issue of the value of human life.   According to Byock, “While many people question spending a lot of money to prolong the life of an elderly, frail patient, it was perfectly logical for a frail person to value life extension as much as a perfectly healthy person.  With advances in medical care, it can be argued that the value of hope has been increasing along with the statistical odds of staying alive until a cure is found.”

Over-treatment, according to Byock, is an unfortunate side effect of medical advances.   “We have enormous scientific prowess and remarkable diagnostic and treatment,” so that when you are admitted to the hospital, the system “moves you quickly towards the next diagnosis and then the next diagnosis after that for the next component problem in a whole picture that few people will see.  It’s a dysfunctional system that feels like a conveyor belt.  We have a disease-treatment system rather than a healthcare system caring for human beings.”  Byock notes that the same system can lead doctors and patients to regard any reduction in treatment, or even accepting that patients are going to eventually die, as failure.  There are amazing ways to combat disease and extend life.  “That’s all well and good.  The problem is, we have yet to make even one person immortal,” Byock concluded.

Dana Goldman, director of the Schaeffer Center for Health Policy and Economics at the University of Southern California and founding editor of the Forum for Health Economics and Policy, has a difference approach.  According to Goldman, “We think of healthcare as an expense, but we really should be thinking of healthcare as an investment.  We want to invest where we have the greatest return. I would put prevention in that bucket.  But the way we do it now, no one has an incentive to invest in things with a long-term return.”

Life Expectancy in the US Dropping

Wednesday, August 1st, 2012

In 2009, a baby born in America could expect to live an average of 78 years, according to estimates from the U.S. Centers for Disease Control (CDC).  But this is now changing: A study in the Journal of Health Metrics shows the United States now ranks behind 10 other developed countries when it comes to life expectancy, even though Americans spend more on health care than people in most other countries.

Another study by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington, found that between 2000 and 2007, more than 80% of counties in the US fell in standing against the average of the 10 nations with the best life expectancies in the world. Five counties in Mississippi have the lowest life expectancies for women, all below 74.5 years, putting them behind Honduras, El Salvador, and Peru. Four of those counties, along with Humphreys County, MS, have the lowest life expectancies for men, all below 67 years, meaning they are behind Brazil, Latvia, and the Philippines.

Nationwide, women fare more poorly than men. The researchers found that women in 1,373 counties – about 40% of US counties – fell more than five years behind the nations with the best life expectancies. Journal of Health Metrics editor, Dr. Chris Murray says “It’s a real surprise to us in the study that women are faring so much worse than men. American women still live longer than men by five to eight years. But they have picked up some bad habits: Women are now smoking more.  The obesity epidemic in women is greater than in men. Progress in tackling blood pressure is much worse in women,” Murray added.

So, what we need right now is more Blue Zones in the US.  The phrase was coined by in 2004 by author, Dan Buettner, who teamed up with National Geographic and hired the world’s best longevity researchers to identify pockets around the world where people reach age 100 at rates 10 times greater than in the United States – the blue zones. Some of them are:

  • Okinawa, Japan
  • Sardinia, Italy
  • Loma Linda, California
  • Nicoya, Costa Rica
  • Ikaria, Greece

So, where are our Blue Zones? Women live the longest in Collier, FL, at 86 years on average, better than France, Switzerland, and Spain. Men live the longest in Fairfax County, VA, at 81.1 years, which is higher than life expectancies in Japan and Australia. Women are also living long lives in Teton, Wyoming; San Mateo and Marin, California; and Montgomery, Maryland. For men, long life spans also can be found in Marin, California; Montgomery, Maryland; Santa Clara, California; and Douglas, Colorado.

The UK: American Healthcare Reform’s Mirror Image

Wednesday, July 25th, 2012

If you want to see a twin of our healthcare reform battle, try the other side of the Atlantic: England is undertaking the biggest reform of its government healthcare program, the National Health Service, as part of its massive 5-year austerity program. “After a year in parliament, more scrutiny than any bill in living memory, and more than 1,000 amendments in the House of Commons and the House of Lords,” as the Guardian newspaper put it, “MPs cast their final vote for the (reform) bill.” At its heart are plans which will give primary care providers more sway over the NHS’s £106 billion annual budget, and introduce more private competition. British reform moves quicker than ours — the program takes effect over the next 12 months. A major plank of the reform is the NHS Mandate, under which the government will set targets for improvement in 60 areas of care, such as patients surviving after cancer treatment, and medical errors. The goals? Reduce administration costs by one third.

And, in another instance of seeing double, we’re watching the other side working hard to repeal it and vowing to do so on Day One if they win the next election. “The government’s reforms to the NHS in England have undermined the service and opened the door to privatization,” said (opposition) shadow health secretary Andy Burnham, who championed Labour’s motion, which claims that treatments and services are being rationed in the NHS. In an opposition-led debate on the NHS on 16 July 2012, Mr. Burnham said: “We will repeal the bill; it is a defective, sub-optimal piece of legislation that is saddling the NHS with a complicated mess.” But (government) Health Minister, Simon Burns said: “Far from the meltdown that some gleefully predicted, we have seen a robust and resilient NHS delivering better care for patients. Waiting times remain low and stable, in fact below where they were at the last general election.”

So, just to recap, here we have the conservatives championing reform and austerity and the liberals pleading for repeal in opposition to a privatized system and rationing.  All of this, of course, is part of the cost-cutting program that some say caused Britain to fall back into a double-dip recession. After the 2010 general election, Prime Minister David Cameron, leader of a coalition of the Conservatives and the Liberal Democrats, initially said that the austerity program would finish by 2015. During this period, more than £80 billion would be raised by spending cuts and tax rises. However, the program was extended to 2017 last fall with further savings £30 billion hoped for.

Just How Fat Are We?

Tuesday, July 24th, 2012

In the race to create the most addictive app (or maybe it’s a next-generation Angry Birds game) the BBC has launched an online Biomass Meter that tells you where the percentile where you fall in terms of corpulence worldwide and, most compellingly, lets you see where in the world you’d fit in given your waistline (I’d be at home Brazil, Iran or South Africa). This calculator is based on research data pulled together by a team of researchers at the London School of Hygiene and Tropical Medicine, using UN data on population size in 177 countries, together with estimates of global weight from the WHO and mean height from national health examination surveys.

Interesting timing given that (according the New York Times) last month, researchers affiliated with the World Health Organization and the London School of Hygiene and Tropical Medicine reported that, worldwide, people’s waistlines are expanding, with the total combined weight of human beings on Earth now exceeding 287 million tons. About 3.5 million tons of that global human biomass is due to obesity, a third of which exists in North America, although we account for only 6 percent of the world’s population.

The biggest culprit ? Voluntary inactivity, according to a study in the Lancet. Led by Pedro C. Hallal, a professor at the Federal University of Pelotas in Brazil, the study finds that 31.1 percent of the world’s adults, or about 1.5 billion people, are almost completely sedentary, meaning that they do not meet the minimum recommendation of 150 minutes of walking or other moderate activity per week, or about 20 minutes a day.

But surely we can look to our teenagers as models of physical vitality, correct? Not quite. Teenagers do worse. More than 80 percent of young people ages 13 to 15 worldwide are not getting the hour a day of vigorous exercise recommended for their age group. North America leads (or wheezingly lags) the world in not exercising, with 43.3 percent of Americans not doing the bare minimum. But, it’s spreading: more than 30 percent of Russians and 27 percent of Africans are sedentary. And what’s the most sedentary nation on Earth? Malta, population 419,000, 72 percent of whom won’t be appearing on The Biggest Loser.

According to the Lancet study, the effect of being a couch potato is comparable to smoking. “Smoking and physical inactivity are the two major risk factors for non-communicable diseases around the globe. Of the 36 million deaths each year from non- communicable diseases, physical inactivity and smoking each contribute about 5 million deaths each.”

US News Names New Hospital as Best

Monday, July 23rd, 2012

Massachusetts General Hospital or Mass General is No. 1 for the first time, according to the US News & World Report Best Hospitals rankings. It marks the end of a 21-year run for Johns Hopkins that started in 1991, the year after U.S. News began publishing Best Hospitals.

When Mass General was founded, James Madison was President, Napoleon was Emperor of France and the Juliana, the first ever steam-powered ferryboat, began operation.   Only Pennsylvania Hospital (1751) and New York–Presbyterian Hospital (1771) are older. The fact that Mass General hasn’t taken the top spot before may come as a surprise to some, given its pedigree: It was the original teaching affiliate and flagship of Harvard Medical School; it remains the largest hospital-based research program in the United States, with an annual research budget of more than $400 million; and is renowned in such specialties as diabetes & Endocrinology, Ear, Nose & Throat, Neurology & Neurosurgery, Ophthalmology, Orthopedics, and Psychiatry.

The 950-bed medical center each year admits about 48,000 inpatients and handles nearly 1.5 million visits in its outpatient programs at the main campus and satellite facilities. It also delivers more than 3,600 babies annually. It is now the largest non-government employer in the city of Boston, with more than 19,000 employees, including a nursing staff of 2,900. In addition, its 3,600-member medical staff includes physicians, dentists, psychologists, podiatrists, residents and fellows.

MGH is owned by Partners HealthCare, which was formed by MGH and Brigham and Women’s Hospital in 1994. MGH is also a member of the consortium which operates Boston MedFlight.

What Would Repeal Look Like?

Wednesday, July 18th, 2012

The nonpartisan Congressional Budget Office (CBO) has issued a report that the House Republicans’ bill to repeal President Obama’s health care reform legislation would increase the deficit by roughly $230 billion through 2021.   According to the CBO statement, “The March health care legislation would have a net cost of about $780 billion over the 2012-2019 period. Repealing that legislation would eliminate such costs. But [the health care legislation] also included a number of provisions to reduce federal outlays (primarily for Medicare) and to increase federal revenues (mostly by increasing the Hospital Insurance payroll tax and imposing fees on certain manufacturers and insurers); in March, CBO and JCT estimated that those provisions unrelated to insurance coverage would, on balance, reduce direct spending by about $500 billion and increase revenues by about $410 billion over the 2012-2019 period. If that legislation was repealed, such reductions in spending and increases in revenues would not occur. Thus, H.R. 2 would, on net, increase federal deficits over that period.”

Undeterred, Sen. Orrin Hatch (R-Utah), ranking member on the Finance Committee, said if Republicans gain control of the chamber next year, their efforts to replace the healthcare overhaul will focus on cost control, instead of coverage expansions. Hatch was the author (along with Ted Kennedy) of SCHIP, the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. Hatch is in position to lead the committee with primary jurisdiction over federal health policy if Republicans retake the Senate, which Republicans would do if they net only four Democratic-held seats.

As evidence of ObamaCare’s inability to reduce overall healthcare costs, Hatch cited the 9.5% increase in the cost of an average family health plan to $15,073 last year over its cost when the law was enacted.

The first cost-control efforts he would undertake would come in Medicare and Medicaid, he said. Those steps include increasing physician pay and removing “government-dictated prices” in Medicare that increases costs for the privately insured when providers pass along the cost of caring for Medicare and Medicaid patients.

ACOs Double in Size

Tuesday, July 17th, 2012

While the fate of Obama Care hung in the balance, the ACO became the voluntary dance that nobody wanted to show up to too early. Defined by the Centers for Medicare and Medicaid Services (CMS) as “an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it,” ACOs (Accountable Care Organizations) were promoted as a bigger, better model that allowed providers to get paid in a number of ways (capitation, fee-for-service, shared savings) in return for managing health at the population level across a broader swathe of the healthcare spectrum. But ACOs were tough, requiring greater accountability with providers having to report on 33 different performance measures to ensure they’re not skimping on care.  And then there was the little issue of whether reform would be repealed and make it all null and void. Well, a mere week and a half after John Roberts cast the tiebreaker to make the individual mandate — and essentially, Obama Care — a reality, the ACO program has doubled in size.  Eighty-nine participants joined 27 existing ACOs in the program. “The Medicare ACO program opened for business in January, and already, more than 2.4 million beneficiaries are receiving care from providers participating in these important initiatives,” acting CMS Administrator Marilyn Tavenner said in a statement.

According to the CMS, the selected ACO programs operate in a range of areas nationwide and nearly half are physician-led organizations that serve fewer than 10,000 beneficiaries, which indicates smaller organizations are interested in participating. Four hundred more organizations have already submitted a notice of intent to apply next month, according to the CMS. The application period is Aug. 1-Sept. 6, 2012 for organizations that want to participate in the Medicare shared-savings program starting in January 2013.

Now that reform has the imprimatur of the Supreme Court judges, the next court that the Administration will have to focus its efforts on is the court of provider and public opinion. According to a survey of 24,000 U.S. physicians by Medscape, WebMD’s flagship site for medical professionals, only about 3% of physicians participate with ACOs ; only another 5% say that they plan to become involved in the coming year.  52% percent of physicians believe that ACOs will cause a decline in income, while 12% say they will have little or no effect.  Overcoming that natural resistance to change may be the toughest part of putting the ACO in place.