Health Care Policy, Innovation and Renewal

Policy: The California Plan

2007-01-15T19:42:00.000-08:00

If you've been listening to NPR, reading the NYT or the WSJ - you've been inundated with information about California's new health initiative.

In short, the plan would (WSJ, January 9):

1) Mandate coverage for all Californians,
2) Employers with more than 10 workers who don't provide medical coverage would pay 4% of their payroll into a state fund to offset costs to the State,
3) The plan would levy a tax of 2% on doctors and 4% on hospitals to further fund the State's insurance plan.

The only problem is we still don't know how much the program will cost, how they will cover the large number of illegal immigrants in the region, and how - exactly - this will ensure costs are contained over the long run. Given the major supporter of the program is Blue Cross of California...who called the plan "bold and visionary"...I think it's fair to say that insurers plan to do pretty well in the deal...unlike the providers being asked to foot part of the bill.

So who's got a reasonable plan underway?

I still think Tennessee may lead the pack (with the Governor a former Health Plan Exec)...and Vermont as a sleeper pick. Any others out there?

I'm still looking for a plan that deals with controlling costs and helping insure the uninsured...

I'm Back

2007-01-08T18:42:00.000-08:00

My apologies to everyone who has had to drop me from their RSS feeds or has been diligently visiting only to see the aging posts on this blog. I had committed myself to finishing a paper for publication before further "blogging"- but, unfortunately, between work and the holidays - I only recently got it out the door.

For those interested, the paper is entitled "In-sourcing and Out-sourcing: Designing a Path Forward for Graduate Medical Education in Lower Income Countries," and while currently under review by a certain journal, I will be presenting my findings at the Comparative and International Education Conference in Baltimore, February 25th - March 1st.

Since most of the readers here are domestic to the US, I've haven't posted many international topics related to health and society - but if someone is particularly interested in the topic - let me know and I'll broaden the context of the site.

Again, my apologies for the extended delay. While things will be busy this quarter, I hope to at least post weekly.

Thanks for your patience!

Renewal: Health Care and Politics

2006-10-30T19:04:00.000-08:00

It's one week from mid-term elections...

...and I have heard only a whisper regarding health care reform and the plight of our uninsured. I live in Tennessee - with one of the most hotly contested Senate races in the country - and neither candidate managed to even bring up the subject in the two televised debates I saw.

Anyone experiencing something different? Any theories on why politics has gone deaf on the subject?

My sad theory is that those disenfrachised by the System, lose faith in the System, and consequently lose all interest in participating in the System. As the disenfranchised participate less and less, the system cares less and less about them...and the cycle deepens itself.

Perhaps I'm asking too much from our leaders and too little from my fellow citizens.

Please take the time to vote next Tuesday...and think of those who weren't able to make it.

Innovation: (Blog) RED

2006-10-22T18:47:00.000-07:00

"We are the people we've been waiting for."

Soon, I hope, you'll be seeing the above words everywhere you make a meaningful purchase. For those of you who haven't heard, Bono and Bobby Shriver (of the Global Health Fund) have just publicly launched the (RED) campaign - including the above mantra - encouraging major brands to donate some of their profit from key product lines tin an effort o help fight HIV and AIDS in Africa.

Having spent some time as an administrator for a rural hospital in Masvingo, Zimababwe - I have followed the AIDS epidemic in Africa quite closely...but was worried that this would simply become another cause...another ribbon...that became a fad and was lost again - making us feel like we had made a contribution while millions still quietly died a continent away.

Then I read the campaign's manifesto:

I can't remember the last time I read somthing so succinct and unabashedly transparent.

Then I went to the GAP to make my first (RED) purchases...and they were sold out. Talked to the chipper person at the front of the store and found out they had sold out twice in this, thier first week...both within 30 minutes of getting their shipments.

Then I went online...and they too were sold out of most sizes and colors. When was the last time you went online and they were sold out of nearly everything?

So I sit here quietly, hoping that this innovation becomes a new business model for things yet unseen. I hope our consumerism can be transformed into something other then our attachment to ego and vanity. I hope that our own health care system can take a lead from those more willing to take risks in new ways that help people other than ourselves.

Here's to (RED).

PS - For all you other bloggers out there...check out the (Blog) RED and think about adding a link to the (RED) campaign. Thanks for the consideration.

Innovation: Quietly working behind the scenes...

2006-10-16T18:18:00.000-07:00

A group of health care, technology, and medical device companies have formed an organization called the Continua Health Alliance.

While perhaps far from the glamorous world iPod nanos and self-parking Merzedes Benz', Continua is developing interoperability standards for remote diagnostic and monitoring medical devices. With players such as Baxter, Dell, Oracle, Motorola, Pfizer, Samsung and others - its a complete "who's who" of the technology and medical worlds - finally coming together to meet the lifestyle needs of patients throughout the world.

Still not excited?

Well the first devices are set to reach the market in 2008...with a flurry of activity expected in 2010 and 2011. Philips is already out with Motiva.

Still not worried (if you're a provider)?

Imagine a world where there are half as many physician visits (given check-ups will be growingly unnecessary) and visits to the hospital only occur when they're absolutely necessary (given the device will alert you when to go to).

On the other hand...

I wonder how many people are avoiding going to both the physician and hospital when they are desperately in need of help? Perhaps remote monitoring will have the opposite effect - generating more and more business as people realize how unhealthy they really are.

Certainly the obesity epidemic would support the above hypothesis.

Either way you slice it, it's a great time to be in Health Care.

P.S. Only costs 5k for your organization to be a contributing member of Continua...may have to put that on my to do list.

Innovate: You Tube in Health Care

2006-10-10T20:09:00.000-07:00

Anybody out there wondering if their hospital will end up on You Tube?

I did a quick search using the key word "hospital" and got over 10,000 results. Here is just one example.

Only a matter of time before people start taking their camcorders in during their stay to provide their own commentary on hospital services...and then...broadcast it to the world.

On the other hand...given You Tube's democratic model...how about hospitals getting the upperhand and posting their own "patient stories"...

Every day I am more convinced that success in health care is about embracing the possibilities and using them to tell better stories and build more robust business models...disruption in the health care field is just around the corner...and I say bring it on - we'll be better for it.

Policy: American Hospital Association Up In Arms

2006-10-10T19:43:00.000-07:00

Earlier this week the American Hospital Association protested CMS' recent request to tie outpatient reimbursement rates to quality reporting on inpatient procedures. Their rational appeared to be...and I quote:

"We are troubled by CMS’ proposal for many reasons: First, it simply makes no sense to link
outpatient payments to inpatient measures of quality. Second, linking a reduction in the
conversion factor to the submission of inpatient PPS data that have already been reported and
made public does nothing to further CMS’ stated goals of encouraging hospital accountability
and quality improvement. Third, linking payment to data submission that predates the outpatient PPS rule is unfair and tantamount to retroactive rulemaking. Fourth, in linking outpatient payments to the reporting of quality data, CMS has exceeded its statutory authority."

For the actual letter to CMS...click here. Its 27 pages...just in case you thought you could make a quick read between meetings.

And while I probably don't follow the AHA like I should (nor give them enough credit for the work they do)...it would be great to see how AHA and CMS could work more closely together, in a unified manner, that might more forcefully engage the industry in quality innovations.

One of these days a group of providers will decide to compete based on quality and adequately "sell" quality to their physicians, payors and patients...then, perhaps, we'll start to see some movement to transparency and true, sustainable, improvements in quality.

Innovation: Harvard Finally Joint Ventures with their Physicians

2006-10-02T18:15:00.000-07:00

Even Harvard is not immune...from having to joint venture with their physicians to remain competitive.

Will other academic centers across the country be forced to follow their lead? Looks like hospitals and physicians will have to come together in one shape or another.

Policy: Public release of Hospital Charge Data

2006-10-02T18:07:00.000-07:00

First, let me point out another great set of commente by BC in response to my last posting. His comments are thorough, well-reasoned, and comprehensive in review of the Citizen's Action Report.

------

In the news today, Minnesota hospitals released their charges (gross prices) for 50 inpatient and 25 outpatient procedures. The charges are prices before discounts to managed care providers and are built to cover costs for basic services, nursing, technology and supplies. Physician charges are not included on the site. The Web site also displays hospital volume, average length of stay, average charge per day and average and median charges for each procedure. The website is in response to a Minnesota law passed in 2005 requiring hospital price transparency. The state is one of at least nine to publish hospital prices online, according to the National Conference of State Legislatures. Click here to view the site.

While there are numerous factors in building charges that are both local and regional in nature...its at least interesting to see how one state is bringing price information to the masses.

Innovation Follow Up: The Citizen's Action Report

2006-09-27T18:49:00.000-07:00

Earlier this year I showcased the work of the Citizen's Health Task Force and their attempts to solicit ideas on ways to innovate in health care.

After 28,000 submissions (gotta love the power of the Internet), the Task Force quietly released their report today.

While there are more than 39 pages of recommendations, here's a quit snapshot copied directly from their site (Citizens Health Care Task Force, 2006):

1. Establish Public Policy that All Americans Have Affordable Health Care.
Americans should have a health care system in which everyone participates,
regardless of their financial resources or health status, with benefits that are
sufficiently comprehensive to provide access to appropriate, high-quality care
without endangering individual or family financial security.
• This public policy should be established immediately and implemented by 2012.

2. Guarantee Financial Protection Against Very High Health Care Costs.
No one in America should be impoverished by health care costs. A national public or
private program must be established to ensure:
• Participation by all Americans
• Protection against very high out-of-pocket medical costs for everyone
• Financial assistance to pay for this coverage to families and individuals based on
ability to pay

3. Foster Innovative Integrated Community Health Networks
• The federal government will provide leadership and financing for a national initiative
to develop and expand integrated public/private community networks of health care
providers. This recommendation should be accomplished through the following
actions:
• Focus first on people and localities where improved access to high quality care is
most needed. These networks would offer local residents – including, but not limited
to, low-income and uninsured individuals and people living in rural and underserved
areas – a source of coordinated health care.
• Identify governmental agencies at the national, state and local levels to coordinate
private and public funding sources currently dedicated to helping provide care to the
underserved by supplying the necessary information and leadership.
• Establish a public/private group or not-for-profit entity at the national level responsible
for advising the federal government on the community health care network’s
performance, funding streams, best practices and research.
• Expand and modify the Federally Qualified Health Center concept to accommodate
other community-based health centers and practices serving vulnerable populations
with special emphasis on families and prevention.

4. Define Core Benefits and Services for All Americans
Establish a non-partisan public/private group to define America’s core benefits and services and
update them on an ongoing basis
• Members will be appointed through a process defined in law that includes citizens
who represent a broad spectrum of the population, including, but not limited to,
patients, providers and payers.
• The group will be staffed by experts.
• Identification of core benefits and services will be made through an independent, fair,
transparent, and scientific process.
Within economic constraints and guided by evidence-based science and expert consensus
regarding the medical effectiveness of treatments, the group will define the core benefits and
services based on the following principles:
• Core health services will cover the continuum of care throughout the individual’s
lifespan.
• Health care encompasses wellness, preventive services, primary care, acute care,
prescription drugs, patient education, and the treatment and management of health
problems provided across a full range of inpatient and outpatient settings.
• Health is defined to include physical, mental, and dental health.
• Over time, this entity would appropriately take into consideration advances in clinical
science

5. Promote Efforts to Improve Quality of Care and Efficiency
The federal government will expand and accelerate its use of public programs for advancing
strategies that improve quality and efficiency across the health care system.
Using federally funded health care programs, the federal government will promote:
• Integrated health care systems built around evidence-based best practices
• Health information technologies and electronic health record systems
• Elimination of fraud and waste in administration and clinical practices
• Widespread availability of consumer-friendly information about health care services,
including transparency on prices, cost-sharing, quality, efficiency, and benefits
• Increased focus on health education, disease prevention and health promotion,
patient-provider communication, and patient-centered care
• Biomedical research aimed at improved quality and efficiency

6. End-of-life care should be fundamentally restructured so that people of all ages have increased access to these services in the environment they choose.
End-of-life care should be fundamentally restructured so that people of all ages have increased
access to these services in the environment they choose.
• Public and private payers should integrate evidence-based science, expert
consensus, linguistically appropriate and culturally sensitive end-of-life care models
so that health services and community-based care can better handle the clinical
realities and actual needs of patients of any age and their families.
• Public and private programs should develop and support training for health care
professionals that emphasizes proactive, individualized care planning and clear
communication between providers, patients and their families.
• At the community level, funding should be made available for support services,
including non-medical services, to assist individuals and families in accessing the kind
of care they want for the last days of their lives.

Good Stuff! And a significant step forward thanks to our fellow citizens...

Innovation: Curious About Who's Most Likely To Change Health Care? Watch the VC Firms…

2006-09-22T18:17:00.000-07:00

Revolution Health

I’ve mentioned these folks before, but Steve Case (yes, the same Steve Case that started AOL) is looking to develop companies that support “sustainable living and wellness lifestyles” – clearly something our mainstream health system has struggled to do. For a quick glance, check out some of their recent investments:

Exclusive Resorts
Flexcar
Miraval

Bill Ericscon and Mohr Davidow Ventures

MDV is looking for a new device that can identify new types of hospital-borne infections in just a few hours. Places they have already invested in:

ParAllele
Pharmix

And if you’re interested in who’s looking to invest in remote monitoring implantable devices, look no further than Corey Mulloy and Highland Capital Partners. Recent investments have included:

AccentCare
Archemix
YogaWorks

Too bad mainstream providers have the longest sales cycle on the planet and are slow to adopt such innovations in the marketplace.

Innovation: Providing Capital To Those Who Have None

2006-09-20T18:39:00.000-07:00

With the growing regulations around joint ventures in diagnostic imaging (read: hospitals not currently allowed to joint venture diagnostics with physicians) and other technologies - there has been a rise in companies willing to facilitate “under-arrangements” with both hospital and physicians.

Here’s how it works:

1) A technology financing company, such as Accelitech (a newly formed company that has regrouped some of the top leadership from Neurosource) forms a “leasing company” that goes out and buys the technology of choice (in the case of Accelitech, steriotactic radiosurgery technology – such as the CyberKnife – has been a popular choice).
2) Hospitals and physicians are then allowed to buy into the “leasing company” at 10-15% each.
3) The leasing company than works out a deal with the hospital to lease the machine on a “per use” or “per click” basis.

Why do it:
1) The hospital can get the latest and greatest technology without putting up $4-5 million in capital.
2) Physicians get an opportunity to gain access to new technology and can financially participate in the long-term returns of the leasing arrangement
3) The purchase is off-balance sheet – not adversely affecting bond ratings.

For sure there will be increased scrutiny of these deals as time goes on, but certainly worth looking at if your capital starved and want to stay competitive in your marketplace.

Also…my apologies for the extended absence. I’ve experienced a perfect storm the last couple of weeks and unfortunately had to forego some of my regular blogging time.

Innovation: Tapping the truly experienced

2006-09-07T18:13:00.000-07:00

Earlier this week Civic Ventures announced the winners of its Purpose Prize - five awards of $100,000 each to people over 60 who are taking on society’s biggest challenges.

Now before you think this is just another random award for people running after school programs for neighborhood kids (not that we don't need more after school program's for neighborhood kids) - take a look at some of the winners (courtesy of Civic Ventures Website):

Conchy Bretos
After a varied career in housing, marketing, health, and women’s issues, Conchy Bretos ran for a seat on the Dade County Commission in 1993 and lost. She was then appointed to the job of Florida Secretary for Aging and Adult Services, a position that allowed her to see firsthand the thousands of low-income elders and disabled adults who were not getting the service they needed to stay in their homes. As a result, many ended up in nursing homes prematurely, because they could not afford in-home care or assisted living facilities. Bretos became the driving force behind the nation’s first public housing project – the Helen Sawyer building in Miami – to bring assisted living services to older adults who just need a little help to stay in their homes. Today she runs a consulting company that has helped 40 public housing projects in a dozen states bring assisted living services to their residents.

Charles Dey
At 64, after a career in education and a record of starting programs to ensure equal educational opportunities, Charles Dey was looking for his next career. His long-time friend Alan Reich, who founded the National Organization on Disability years earlier when an accident left him a quadriplegic, told Dey to “do for young people with disabilities in the 90s what you did for minorities in the 60s.” So Dey created Start on Success, a National Organization on Disability program to provide paid internships and to assign workplace mentors to predominantly minority high school students with physical, mental, and emotional disabilities. To date, more than 1,500 disabled high school students have had internships at universities, hospitals, and small businesses in five cities. So far 85% of them have gone on to full-time jobs or further education. Without the benefit of any job training program, only about 30% of inner-city, minority students with disabilities have comparable success.

Frank Brady
A serious heart condition forced Frank Brady, a jet-setting international businessman, to retire 10 years ago. Recalling an earlier health crisis – he survived spinal meningitis as an infant thanks to experimental treatment with a new miracle drug called penicillin – Brady created Medical Missions for Children in 1999. The organization helps seriously ill children who lack access to quality medical care, and educates the medical professionals who care for them. Medical Missions for Children uses interactive video technology to allow pediatric specialists to remotely diagnose patients and recommend treatment, and internet and broadcast technology to collect and distribute cutting-edge information to thousands of medical professionals across the country.

After reading about the above three winners, I couldn't help but reframe the traditional view helath care providers take of their volunteers and retired community members. Why not ask some key members of our retired community who have worked in various industries and ask them to fix some of our deepest problems in health care? Issues might be:

Developing a retail strategy for a health system
Defining areas in which price transparency could be a competitive advantage
Building a customer service strategy for physicians in our ORs
Cost efficient ways of delivering preventative care to the uninsured

As more baby-boomers retire, live longer, use more health services, and look for a way to give back - accessing their help and expertise should become a strategic initiative itself.

Innovation: Rise and Fall of the Device

2006-09-04T11:47:00.000-07:00

News came out today that the coated stent launched in 2000...may create a significant increase risk for thrombosis, or blood clots.

While more than 6 million drug eluting stents have been implanted around the world, this recent report is unlikely to change physician or patient behaviour. Much like pharmaceuticals later to have caused serious side effects after FDA approval, Boston Scientific and others will launch a significant marketing campaign that acknowledges the risks while selling its continuing benefits to the market. The FDA may, or may not, launch an investigation - the likely outcome to be a requirement to note the increase chance for side effects.

In the end, a basic philosophical question remains: which desire is greater amongst patients - the ability to have the latest and greatest (and a higher chance of success) or the assurance that our care is 100% safe? How one answers the question creates cascading affects on cost, quality, innovation, and other significant policy attributes.

But stepping too far into innovation threatens the very trust we have in the health care system while increasing costs in an effort to bring more technology to the market.

In the end, a balance must be achieved between adequacy, equality, and efficiency...metrics for which we have not yet decided upon.

Innovation and Policy: Round-up

2006-08-31T18:34:00.000-07:00

As I've sat down throughout the week to write a post, seems everyone else has been quicker on the draw and has provided a perfectly thoughtful reflection on the weeks events. This post, consequently, is devoted to some of the best posts this week:

On the VA report in Time Magazine...

Tony Chen over at Hospital Impact has posted a quick note on this recent article arguing why the VA provides the best place to get your health care in the country.

You can find his post here.

On the challenges of being a resident...

Nick over at Blogborygmi has posted a raw and open look at the challenges our doctors face during the educational process. A thoughtful reminder of the sacrifices our medical professionals make to our communities.

And the growing challenges of being a primary care physician...

Are eloquently recorded in a recent report from the New England Journal of Medicine....simply entitled: Primary Care - Will It Survive?

Innovation and Policy: Consumer Driven Health Care and the Psychology of Pricing

2006-08-27T13:05:00.000-07:00

There is a lot of discussion these days about consumer driven health care. A quick Google search alone generates millions of results. Few, however, have begun to discuss the psychology of pricing and consumer driven acquisition of health care.

Assuming that the individual (in some shape or fashion) finally has the ability to directly spend tax-deffered money on their health care costs through a transparent pricing mechanism (i.e. a hospital website that shows the base cost of a procedure), what do you think about the following:

Should services be bundled (your "entire stay will costs x") or unbundled (the price of your stay is x, the implant for your joint is y, overnight parking is z)?
People are more likely to go to a health club the first two weeks after having paid for a membership...should hospitals run "specials" for elective surgeries shortly after people sign up for an HSA?
We often go to concerts or plays that we'd rather not attend simply because we have a $50 ticket in our pocket...how will consumers interpret "sunk costs" in their acquisition of health care services? Should hospitals run "deals" at the end of the year for people who have significant dollars left in their HSA?
Will people want to pay up-front or be billed for their health care experience? What will providers want? Will hospitals provide an estimate but ask for your credit card on the front end should you want an "upgrade" during your stay?

These are just a few of the questions that come to mind from the provider side in thinking about the pricing issues related to consumer driven health care. While greater transparency in health care is a good thing, I suspect those providers that employ the research on pricing will fair better than others.

To get started...here is a great article from the Harvard Business School.

Additional Note: I'd like to just thank Tony Chen and the folks at Hospital Impact for their outstanding work in bringing health care issues to light and expanding the presence of the health care blogosphere. Great work Tony!

Innovation and Policy: What Health Care System Do You Want?

2006-08-24T18:55:00.000-07:00

You have 7 days left to send in your comments!

To whom?

As part of the Medicare Prescription Drug, Improvement, and Modernization Act Of 2003, the U.S. Congress created the Citizens' Health Care Working Group. Composed of 14 members from throughout health care, this group was established to:

Provide for a nationwide public debate about improving the health care system to provide every American with the ability to obtain quality, affordable health care coverage.
Develop an action plan for Congress and the President to consider as they work to make health care that works for all Americans.

As part of that effort, the panel has set up a public website for citizens of every identity to send in their comments and recommendations covering all parts of the health care system. The website is citizenshealthcare.gov and is a must read.

So no matter if you're a patient, physician, administrator, insurer, employer, or policy wonk, give the site a read and let your thoughts be known!

Policy: Executive Order - Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs

2006-08-22T19:05:00.000-07:00

It's rare that I've ever taken the time to actually read an Executive Order.

So, for your reading pleasure I've actually printed the latest Executive Order regarding Health Care IT and Price Transparency below. It's short, it's specific in places while being incredibly vague in others. To make the trip a little easier I've bold faced areas to read if you only have 60 seconds left of free time. If you'd actually like to read the White House release you can click here.

Executive Order - Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs

Section 1. Purpose. It is the purpose of this order to ensure that health care programs administered or sponsored by the Federal Government promote quality and efficient delivery of health care through the use of health information technology, transparency regarding health care quality and price, and better incentives for program beneficiaries, enrollees, and providers. It is the further purpose of this order to make relevant information available to these beneficiaries, enrollees, and providers in a readily usable manner and in collaboration with similar initiatives in the private sector and non-Federal public sector. Consistent with the purpose of improving the quality and efficiency of health care, the actions and steps taken by Federal Government agencies should not incur additional costs for the Federal Government.

Sec. 2. Definitions. For purposes of this order:

(a) "Agency" means an agency of the Federal Government that administers or sponsors a Federal health care program.

(b) "Federal health care program" means the Federal Employees Health Benefit Program, the Medicare program, programs operated directly by the Indian Health Service, the TRICARE program for the Department of Defense and other uniformed services, and the health care program operated by the Department of Veterans Affairs. For purposes of this order, "Federal health care program" does not include State operated or funded federally subsidized programs such as Medicaid, the State Children's Health Insurance Program, or services provided to Department of Veterans' Affairs beneficiaries under 38 U.S.C. 1703.

(c) "Interoperability" means the ability to communicate and exchange data accurately, effectively, securely, and consistently with different information technology systems, software applications, and networks in various settings, and exchange data such that clinical or operational purpose and meaning of the data are preserved and unaltered.

(d) "Recognized interoperability standards" means interoperability standards recognized by the Secretary of Health and Human Services (the "Secretary"), in accordance with guidance developed by the Secretary, as existing on the date of the implementation, acquisition, or upgrade of health information technology systems under subsections (1) or (2) of section 3(a) of this order.

Sec. 3. Directives for Agencies. Agencies shall perform the following functions:

(a) Health Information Technology.

(1) For Federal Agencies. As each agency implements, acquires, or upgrades health information technology systems used for the direct exchange of health information between agencies and with non-Federal entities, it shall utilize, where available, health information technology systems and products that meet recognized interoperability standards.

Dinger: it's a shame interoperability is so far off.

(2) For Contracting Purposes. Each agency shall require in contracts or agreements with health care providers, health plans, or health insurance issuers that as each provider, plan, or issuer implements, acquires, or upgrades health information technology systems, it shall utilize, where available, health information technology systems and products that meet recognized interoperability standards.

Dinger: Once again...is there a timeframe for interoperability? Good in theory...tough in practice. It's going to be hard to tell providers who have already spent millions on IT initiatives that their systems are not interoperable.

(b) Transparency of Quality Measurements.

(1) In General. Each agency shall implement programs measuring the quality of services supplied by health care providers to the beneficiaries or enrollees of a Federal health care program. Such programs shall be based upon standards established by multi-stakeholder entities identified by the Secretary or by another agency subject to this order. Each agency shall develop its quality measurements in collaboration with similar initiatives in the private and non-Federal public sectors.

Dinger: It will be interesting to see who gets to play in the above collaboration.

(2) Facilitation. An agency satisfies the requirements of this subsection if it participates in the aggregation of claims and other appropriate data for the purposes of quality measurement. Such aggregation shall be based upon standards established by multi-stakeholder entities identified by the Secretary or by another agency subject to this order.

(c) Transparency of Pricing Information. Each agency shall make available (or provide for the availability) to the beneficiaries or enrollees of a Federal health care program (and, at the option of the agency, to the public) the prices that it, its health insurance issuers, or its health insurance plans pay for procedures to providers in the health care program with which the agency, issuer, or plan contracts. Each agency shall also, in collaboration with multi-stakeholder groups such as those described in subsection (b)(1), participate in the development of information regarding the overall costs of services for common episodes of care and the treatment of common chronic diseases.

Dinger: What exactly is the difference between "make available" and "provide for the availability?" And what does it meet to require release of prices and then let it be at the option of the agency? Sounds like we're saying we're committed without asking the agencies to commit...

(d) Promoting Quality and Efficiency of Care. Each agency shall develop and identify, for beneficiaries, enrollees, and providers, approaches that encourage and facilitate the provision and receipt of high-quality and efficient health care. Such approaches may include pay-for-performance models of reimbursement consistent with current law. An agency will satisfy the requirements of this subsection if it makes available to beneficiaries or enrollees consumer-directed health care insurance products.

Dinger: It's good to see some examples here....pay-for-performance would be a big step...but risk-adjusted quality standards are a difficult thing to develop - let alone build consensus around.

Sec. 4. Implementation Date. Agencies shall comply with the requirements of this order by January 1, 2007.

Dinger: Better get started...131 days left.

Sec. 5. Administration and Judicial Review.

(a) This order does not assume or rely upon additional Federal resources or spending to promote quality and efficient health care. Further, the actions directed by this order shall be carried out subject to the availability of appropriations and to the maximum extent permitted by law.

Dinger: It's always in the fine print...are we to understand that if there's no money to implement the above, the agencies aren't responsible for implementing? It certainly appears to be the case...

(b) This order shall be implemented in new contracts or new contract cycles as they may be renewed from time to time. Renegotiation outside of the normal contract cycle processes should be avoided.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Dinger: That is to say...in general...this order is meant as a political gesture and is unlikely to overly dictate implementation or enforceability.

After reading the above, it will be interesting to see how the media portrays this move by the White House and the degree the message is characterized as a "sure thing" coming in 2007. It should be noted that after the order was signed...Bush went directly to a campaign fundraiser.

Policy: Declining Reimbursement for Physicians

2006-08-20T14:21:00.000-07:00

CMS recently announced a proposed cut 0f 5.1% in Medicare reimbursement for Physicians.

While it is not uncommon for CMS to announce an annual reduction, this one is in the $2.5 Billion range...annually....which likely means they want to see some reduction - even if it's only a portion of the current proposal.

Outside of the growing frustration this will cause for physicians, physicians will clearly be looking for new ways to augment their already declining reimbursement. Areas of focus will likely include:

Specialty Hospital involvement
Ambulatory Surgery Center (ASC) Joint Venture involvement
Concierge Medicine Growth

...just to name a few. Taken in this context, it's no wonder CMS is making the above three areas easier for physicians to participate in.

Innovation: HBR Ideacast

2006-08-17T18:23:00.000-07:00

We're all short on time. And the Harvard Business Review is here to help.

Whether you'd prefer it on your iPod or want to listen over the web, HBR's new ideacast brings you up-to-speed on some of the latest innovations in management and business in 15-20 minutes every two weeks.

While nothing takes the place of the evidence-based research reviewed in the monthly print magazine, the ideacast is laid-back, jargon-free, and highly applicable.

This weeks favorite topic: Winning Over Change Resistors.

Enjoy!

Policy: Safe Harbors and E-Health Technology

2006-08-13T18:41:00.000-07:00

Between the fighting in the Middle East, the Landis disappointment, and the start of the upcoming NFL season, the Department of Health and Human services announced a new "safe harbor" for hospitals to provide IT services to physicians. A "safe harbor" is most easily defined as a piece of legislation that allows hospitals to provide services to physicians at low or no cost without fear of being fined for inducing referrals.

So, as most of my friends have asked - who cares?

While you can visit the HHS website for the full commentary or, better yet read the commentary from one of the best health care law firms in the country, below you can find a quick synopsis of the legislation and what it might mean:

1) Hospitals can provide e-prescribing and e-health services to physicians at no cost (e-prescribing software) or at 15% of cost (e-health services).

What this might mean: Physicians will likely get their PACS system and electronic medical record (EMR) services through a given hospital. This will significantly raise the switching cost for physicians to move their offices or begin working at a competing hospital. Physicians will save big bucks and hospitals will have one more way of retaining key physicians services at their facility.

2) Hospitals and Physicians must use governement "certified software."

What this might mean: The IT industry will be making a big push here to get involved since hospitals are now paying the bill (as opposed to price averse physician practices), but they'll also be lobbying hard to get on the "certified" list. While Adam Smith may have argued for a more open market...others will likely be buying stock in companies on "the list."

3) Organizations capable of donating services not only include health care providers, but also health plans.

What this might mean: Health plans will be equally trying to "tie up" key physicians by providing free software and support. This will likely put physicians in tough spot where the health plan lowers their reimbursement...but don't want to leave the plan because their using the plan's EMR and e-prescribing software (its unlikely the plans and providers will use the software as a leverage point for obvious reasons...but it still is a potential conflict of interest).

4) The Safe Harbor ends in 2013.

What this might mean: Everyone is incented to participate as quickly as possible. While HHS has set a limited timeframe, they've also provided a first mover advantage to Plans and Providers who quickly respond.

This is by no means comprehensive in description, but it is a significant step in moving health care into the 21st century. While more electonic medical records will help improve quality and coordination, its market affects should not be underestimated.

Innovation: Baylor meeting the needs of its patients

2006-08-13T13:53:00.000-07:00

We have all been talking about providing hotel-like amenities to our patients for some time, but it has been difficult to find some leading institutions willing to make the investments in patient comforts. While I'm sure there are others out their, a recent story covered some of the work Baylor has done in one of its new facilities.

Some of the key investments Baylor is using to differentiate themselves:

Interactive TV - where you can order on demand movies and television programs
On-demand room service 24 hours a day using a custom-designed menu (which only presents items within dietary guidelines set by the patient's physician)
Wireless internet access for laptop users
A comprehensive "business center" on each floor for families and visitors

In an industry defined by declinig reimbursement, it is likely that operating efficiency that produces necessary margins to invest in patient comfort may becoming a growing market differentiator in competing markets.

Note: If you know of other providers who are making considerable investments in patient comforts, please send us a comment below!

Innovation and Renewal: Leave it to IBM

2006-08-05T10:41:00.000-07:00

Considering my former life was spent in the technology consulting arena, I've been a close follower of "Big Blue" and there turnaround in the nineties. Their open extranets have been a significant source of innovation throughout the global technology space. Incidentally, for those who may not follow the patent world, IBM has registered the most patents annually for the last decade.

So I have to admit I was more than a little excited when I came across IBM's own Health Care Blog. It's not voluminous, nor does it contain multiple posts on a single day - but it is impressive.

Covering everything from Clinical Genomics to Patient Remote Viewing, you will find some of the best and the brightest's comments on what they think is coming around the corner.

For more information on what IBM's thinking about our own health care dilemmas, click here.

Note: I especially like their most recent note on Independent Health Banks.

Innovation: Sustainability Reports

2006-08-05T06:07:00.000-07:00

Health care, unfortunately, has not built a reputation for quality storytelling.

Health care is most often known for its acronyms, complicated research, and jargon wielding professionals. Patients are unable to read their own charts (let alone bills). And while those few items could be topics in and of themselves, I thought I would spend a few minutes on institutional storytelling.

While health care is most often believed to be a public good that should be extended to as many people as possible, providers have been reticent to talk about the margins it produces on an annual basis. For-profits don't want to draw attention to it and non-profits don't want to be accused of making too much of it.

So here is a middle way...

Phillips (and others) have recently announced the publication of "sustainability reports." While more popular in Europe than the US, these reports do an exceptional job of talking about the importance of their employees, initiatives they're involved in environmentally, dollars they're contributing to the community, and how the profits they make ensure sustainability of the organization.

I think all organizations would do well by their employees, communities, and funders (shareholders or otherwise) in producing such a report and reframing the way we think about health care and the sustainable ways it is provided to our communities.

Philip's report remains my favorite and you can find it here.

NOTE: If anyone has done a similiar report for their health care organization, please let me know and I'll make note of it in future posts.

Policy: CMS Announces Payment Reforms for Inpatient Hospital Services

2006-08-01T20:03:00.000-07:00

As promised, below are some notable changes to the inpatient hospital payment schedules announced by CMS today. For complete details, visit the official announcement on the CMS website.

The highlights (according to CMS):

The revised payments will become effective for discharges on or after October 1, 2006.

JD: You've got 90 days to get ready...

Medicare’s inpatient rates for operating expenses will increase by 3.4 percent in FY 2007 for those hospitals that report quality data to CMS. Overall, the final rule is estimated to increase payments to acute care hospitals by $3.4 billion.

JD: Note to all..."those hospitals that report quality data to CMS." We'll see what the final ruling is on the 18th, but I suspect there will be significant incentive to increase public reporting of quality data...a good thing.

The changes will reduce incentives for hospitals to invest in certain service areas because payment rates significantly exceed costs.

JD: Hmmm...I think they mean profitable services will simply become less profitable. For the more idealistic non-profit purists out there...there will be less money available for free clinics and community education courtesy of highly profitable cardiac and neuro services.

Specialty hospitals—hospitals that provide a limited range of services and typically are owned in whole or in significant part by physicians who serve as referral sources — may selectively provide such profitable services...but..as a result of the payment reforms implemented in 2006 and now for 2007, payments to cardiac specialty hospitals are expected to decline by over 5 percent between 2005 and 2007.

JD: This is big...CMS is going to start approving applications once again for specialty hospitals. Granted...they may get a bit less reimbursement...but will remain profitable ventures and attractive places to practice medicine. For all of you in non-CON (certificate of need) states...it's going to be a wild market over the next few years.

While the payment reforms will significantly improve accuracy, their effects generally balance out at the hospital level for hospitals other than specialty hospitals.
No hospital will experience an estimated decrease in payment for FY 2007 from the improvements to Medicare’s inpatient hospital system after including the update for inflation.
While some diagnosis related groups (DRGs) have significant payment increases, no DRG has a FY 2007 payment reduction more than 5.4 percent.

JD: So...you shouldn't expect to see a decline in reimbursement unless you do a significant number of procedures in one of the DRGs being reduced 5.4%? Hope CMS lets us know (soon) which DRGs are being reduced...

The payment reforms consist of two major parts which do not save money, but better align payment with the costs of care by increasing payments for some admissions and decreasing payments for others. The first part begins a transition to using estimated hospital costs, rather than list charges, to set payment. The reform will eliminate biases in the current system arising from the hospital practice of having list charges that disproportionately exceed costs for some services.

JD: The catch is always in the fine print...by making the above change, CMS effectively gets to continue lowering reimbursement as hospitals find new ways of generating a margin. A good solution in the short run...a disincentive for hospitals to keep reducing costs in the long run.

The change will go into effect October 1, 2006 and will be phased in over a 3-year period.
In addition, CMS is announcing steps to further evaluate hospital charging practices—particularly for expensive items like medical devices—as part of considering further improvements for 2008.
More accurate accounting for the severity of a patient’s illness, which has a significant impact on costs of care. In 2007, CMS is beginning the process of moving to more complete severity adjustment by adding 20 new groups to the current DRG system.

JD: A good thing...the payment system will reimburse us for how sick the patient is...

CMS is also implementing a significantly lower threshold for cost “outlier” status than had been proposed earlier this year. Consistent with the law, Medicare expects the additional payments for high cost cases will equal 5.1 percent of total inpatient payments.

JD: 5.1% of total inpatient payments above the threshold? Hope this doesn't incentivize some hospitals to discharge patients early...

CMS is committed to ensuring that Medicare beneficiaries have rapid access to new technologies by providing for temporary add-on payments for appropriate technologies. In order to be eligible for additional reimbursement, a product must be:

New – that is, less than two to three years old;
Expensive – meeting a defined cost threshold in relation to the underlying DRG; and
A substantial clinical improvement for the Medicare patient population.

JD: Can we define "additional reimbursement?" Some new devices are tens of thousands more than their generic, yet still effective, counterparts.

CMS approved new technology add-on payments for an innovative new treatment for back pain in this final rule. The technology — the X STOP Interspinous Process Decompression System — relieves pain, numbness and weakness caused when nerves coming from the spinal cord become compressed. The device prevents the patient’s nerves from being compressed while preserving motion. It is the first technology to treat this condition that offers a minimally invasive alternative to conservative treatments (exercise, physical therapy and medication) and major back surgery.

JD: Is this a commercial? Props to St. Francis Medical Technologies for getting a shout out in the new CMS ruling...it's unfortunate not all device companies could have such affective marketing efforts.

Additionally, CMS will continue to make add-on payments in FY 2007 for two technologies that were approved for new technology payments in FY 2006: Restore® Rechargeable Implantable Neurostimulator and GORE TAG.

JD: Wait...there's more? Looks like the neuro device industry hit one out of the park. It would be nice to see additional payments made to the health systems who make extra efforts to deliver vaccine and primary care to the underserved and underinsured.

With respect to payments for Graduate Medical Education (GME), the rule finalizes the clarification to the CMS policy that only time spent in patient care activities may be counted for IME purposes in the hospital complex.

JD: This is too bad...a lot of good education occurs outside the "hospital complex."

The final rule will appear in the August 18, 2006 Federal Register and will be effective for discharges on or after October 1, 2006.

JD: It's good to see CMS looking at new ways to innovate the payment system...we'll see what the next few months bear out.