My wife’s obstetrician impacts our whole family with her care. She has now delivered two healthy baby girls for us and ensured that their mother is healthy and happy as well. In many ways, she embodies the characteristics of my favorite mentors over the years: calm, caring, knowledgeable, confident and dedicated. Though she hasn’t yet announced it, we know she’s close to retirement, and feel fortunate that we’ve had her in our lives. She’s been a constant in the community for decades, and it will be difficult to replace her skill, spirit and demeanor.

As healthcare grows in complexity and providers telescope into ever deeper and narrower areas of expertise, our fragmented care delivery system makes it difficult at times to experience the warm, personal care we received from our family obstetrician. Industry buzzwords now emphasize ideas like “care coordination,” “interoperability,” and “patient-centered care.” Yet, when I think of how those models or approaches can be most effective, I come back to the simple idea that care is best delivered by good people with strong communication skills. To me, that’s a constant of better healthcare that we can’t overlook. Effective communication fosters trust, understanding and empathy at the bedside where patients need it most.

Information theory, as defined by Claude Shannon more than 60 years ago, is based on the idea that communication can be packaged into information and defined by data. Certainly, in today’s evolving healthcare system, big data is becoming ubiquitous in the practice of medicine. However, I believe that the promise of digitization and technology to improve and integrate our system will not be fully realized if we do not appreciate the critical need for the kind of personal communication typified by the oldest tool in the physician’s handbag: a good bedside manner.

At present, it can feel as though meaningful communication is the aspect of medical practice we’re most willing to sacrifice. There’s too much to do in the course of any physician’s day already, and too little time to spend with patients. This need not be the case, though, if we can learn to apply technology to help communication with patients rather than detract from it. I’ve seen how data that is delivered in an easily digestible format to the point of care can support physicians in their interactions with patients, and how hand-held devices like iPads and smart phones can enable patients and physicians to capture information and data so that it can be thoughtfully analyzed and talked about later. This is how technology augments and enriches interpersonal communication to enhance care provision.

It may be easy to overlook, but communication is inextricably intertwined with healthcare. Despite all the changes we’re experiencing in our system, and in the delivery of care, the intimate practice of medicine remains largely the same. The work of our family obstetrician in the delivery of our daughters (in coordination with the other doctors, nurses, lactation consultants and even dad at the bedside) is proof that enhanced communication makes for better outcomes and a better healthcare experience for everyone.

Summerpal Kahlon, M.D., is vice president of business development for RelayHealth  Pharmacy Solutions, a business unit of McKesson Corp. Dr. Kahlon is focused on enhancing connectivity and communication between prescribers and pharmacy on behalf of patients and their medication needs. As an adult infectious diseases specialist, Dr. Kahlon has practiced in a variety of healthcare settings, with experience in general infectious diseases, HIV/AIDS care and travel and tropical medicine. Prior to joining RelayHealth, he also worked with EMR and telehealth systems, and he maintains an interest in optimizing the efficiency of the healthcare delivery system. Dr. Kahlon holds an M.D. from the University of Alabama School of Medicine, an M.S. in healthcare infomatics from the University of Central Florida, and a B.A. in economics from Case Western Reserve University. 

Pharmaceutical companies wind up shelving 95 percent of their in-development therapeutics, according to the NIH. In the past, those in-progress drug compounds that were seen as not meeting manufacturers’ expectations or not financially worth pursuing largely were left in drug-development limbo.

But a new NIH grant program aims to pair pharmaceutical companies with academic researchers so that the parties can revisit rejected drug compounds and possibly find new applications for them. Applying fresh perspective to rejected therapeutics, it’s hoped, may lead to treatment breakthroughs for patients. And for participating drug manufacturers, the NIH program represents a major opportunity to realize a return on their initial investment in the compounds.

It’s a two-heads-are-better-than-one approach: Nine academic researchers and research groups are receiving a total of $12.7 million from NIH to work with manufacturer partners to transform partially developed drug compounds into viable therapeutics. Eight drug manufacturers supplied to NIH 58 compounds that had “undergone significant industry research and development” before the manufacturers dropped them, according to the agency, and NIH then sought ideas from researchers about how these compounds might be salvaged.

From the proposals it received, NIH chose nine — focused on new ideas for compounds from five manufacturers (Eli Lilly, AstraZeneca, Janssen Research & Development, Pfizer and Sanofi) — to receive funding for two to three years through the pilot program. The academic-manufacturer teams will target diseases including alcoholism, Alzheimer’s, nicotine dependency, peripheral artery disease and schizophrenia.

Members of seven NIH institutes and centers, among them the National Cancer Institute and the National Institute on Drug Abuse, also will contribute their scientific expertise.

“It is crucial to accelerate the pace at which discoveries are transformed into new therapies for patients,” the NIH’s National Center for Advancing Translational Sciences (NCATS) said in a fact sheet about the program. Thousands of human diseases currently have few or no treatments, the center stated, and drug development takes an average of 13 years from initial work on the therapeutic to FDA approval.

NIH’s NCATS was established in December 2011 to help pharmaceutical stakeholders advance the process of translating drug compounds into actual medicines. The New Therapeutic Uses pilot program isn’t the only drug-development effort on which the not-yet-2-year-old center is working: Earlier this month, NCATS announced that its Therapeutics for Rare and Neglected Diseases Program will work with Eli Lilly on four preclinical drug-development projects.

That effort, which will look to find treatments for a form of hereditary blindness and two diseases that cause heart problems, will mark the rare-diseases program’s first use of stem cells and its first partnership with a drug manufacturer, according to a news release. Unlike NCATS’s New Therapeutic Uses program, the rare-diseases program does not provide grants; teams receive in-kind support and “gain access to TRND researchers with rare-disease drug development capabilities” and clinical and regulatory resources, NIH stated.

Both the New Therapeutic Uses program and the rare-diseases program reflect a heightened emphasis at NIH creating public-private partnerships to speed drug development. NIH Director Dr. Francis Collins alluded to this when NCATS was established. Noting that patients “don’t have the luxury to wait 13 years” for new drugs to be developed, he stated, “The entire community must work together to forge a new paradigm, and NCATS aims to catalyze this effort.”

The collaborative effort demonstrates the positive possibilities for improved care and lower costs when various sectors of the healthcare industry come together to create something bigger than the sum of their parts.

“You’re carrying it but you have no signs or symptoms of any problem. But if that were to get into an open wound, it could easily infect that, and that’s what was happening,” says Louis Filhour, senior vice president for clinical quality at Albany (N.Y.) Medical Center.

Patients now get a swab and culture before surgery, and if they’re positive for the bacteria, it’s treated to eliminate possible infection. That new process has significantly reduced sternal wound infections, according to Filhour, who adds that the same pre-admission exam approach applies for detecting pressure ulcers in at-risk patients.

“They may be coming in for one thing, but we’re assessing their entire body, because they may already have a small wound or something starting,” says Filhour. “If we don’t capture that on day one, and then it develops further while the patient is here, then that also counts against us.”

Albany Medical Center is a great example of how to effectively measure value, particularly important in today’s healthcare landscape. Value these days is moving from concept to practice in healthcare as it becomes the foundation of the way health plans pay providers for the care they deliver to patients. This means that the ability to measure value must move beyond generally accepted proxies to exacting metrics that accurately measure provider performance.

Metrics need to identify the root causes of adverse patient outcomes that have a direct bearing on how much providers are paid based on the value they provide to covered lives. The metrics must be sensitive enough to determine whether providers were responsible for the adverse outcomes or whether factors outside of the providers’ control were the culprits.

“We are spending time double-reviewing anything that would be impacting a value measure, to make sure if we’re saying it’s a problem, that it really is a problem,” says Filhour. “We’ll fess up and accept it, but we need to make sure that it’s also correct.”

A study published earlier this month in the New England Journal of Medicine demonstrated the power of advanced analytics to identify patterns of patient readmissions after surgery — and, by extension, value of the care provided. The study by health services researchers at the Harvard University School of Public Health found that 13.1 percent of surgery patients were readmitted to the hospital.

More importantly, they found that surgical readmission rates varied by volume: Hospitals that performed more surgeries generally had lower readmission rates than hospitals that performed fewer surgeries. That finding suggests that the high-volume surgical hospitals are doing something different in terms of process that leads to better outcomes — and fewer financial penalties from payers.

For hospitals and health systems to cope with the move from the traditional volume-of-care payment model to one based on value, the measuring and assessment must begin internally with regular tracking and reporting of all relevant safety and quality measures, according to the American Hospital Association in its April 2013 strategy report, Metrics for the Second Curve of Health Care. Central to such objectives as reducing preventable emergency and inpatient visits are data commonly used to improve patient safety and quality.

Absent the ability to collect and analyze data, the move from volume to value for all industry stakeholders will be little more than rhetoric. Providers that are able to collect and analyze data and subsequently develop meaningful measures of value will be in the best position to collaborate with patients and payers to improve care and reduce unnecessary healthcare costs.

Editor’s Note: To learn more about the push to develop better measures of industry performance, read “Building a Better Yardstick”  exclusively on Better Thinking for Better Health.

That’s the theory behind the participation of nursing homes, skilled nursing facilities and home health agencies in Medicare’s big bundled payment demonstration project. Under Medicare’s Bundled Payment for Care Improvement Initiative, or BPCI, these post-acute care providers are working with hospitals and physician offices to improve care transitions and coordination in exchange for savings. The Patient Protection and Affordable Care Act authorized the project, which formally kicked off in January 2012.

“Bundled payments offer the opportunity to find ways to coordinate care better across care setting,” says Cristina Boccuti, senior associate at the Kaiser Family Foundation. “Incentives for better coordination could lead to better and more appropriate care.”

Two of the four bundled payment models being tested by Medicare under the BPCI include post-acute care services. Under one of the two applicable models, the designated episode of patient care begins just prior to hospital admission and ends 30, 60 or 90 days after hospital discharge. Under this model, participating hospitals choose up to 48 clinical conditions to bundle for a fixed fee from Medicare, and they must work with post-acute care providers to seamlessly give patients the appropriate level of care across all settings. Under the second applicable model, the designated episode of care begins after a patient is discharged from the hospital to a post-acute care provider and ends 30, 60, or 90 days after initiation of the episode.

Under the first example, the bundled episode for a knee replacement procedure would include any pre-op care, the procedure and hospital stay and then any post-acute care needed until the patient’s recovery is complete. Under the second example, the bundled episode for a knee replacement procedure would include any post-acute care needed after the patient was discharged from the hospital until the patient’s recovery is complete.

The planning stages for both applicable models began in January, but the actual implementation has been delayed from July to October and, in some cases, until January of next year.

“With good reason,” says James Michel, director of Medicare research and reimbursement at the American Health Care Association, which represents long-term and post-acute care providers. “This is outrageously complex.”

But Michel says the association is keen to learn how post-acute care providers can participate in alternative payment models and move beyond fee-for-service.

“We are very anxious for this BPCI to take off,” he says. “It will help us get a better idea of what is possible. Right now there are a lot of ideas and a lot of positions but very few known facts.”

Four AHCA member companies are participating in the BPCI program. They don’t expect to see a profit on this program, and, in fact, some expect to lose money on it, he adds. But the lessons to be learned from the experience and the long-term benefits both clinically and financially are worth the short-term investment.

“There are lots of intangible reasons to do it,” Michel says. “You get to be at the table. You are redesigning and transforming care alongside Medicare.”

For example, participation in the programs has prompted the post-acute care providers to invest more in telemedicine, health information technology and other technologies to be able to support alternative payment models, he says.

In August, Kindred announced the creation of a new Care Management Division focused on improving care transitions and patient outcomes by developing capabilities to deliver integrated care across settings. The division will also test new delivery and payment models.

However, some are cautioning that bundled payments aren’t the right model for post-acute care because they carry too much risk for the most vulnerable patients.

“It potentially promotes skimping on care or avoidance of costly patients,” writes Judith Feder, professor at the Georgetown University Public Policy Institute, in the Aug. 1 issue of the New England Journal of Medicine. She cites a “long history of patient selection in nursing homes and recent evidence that the home health agencies with the highest profit margins provide fewer visits, despite serving patients with greater measured care needs.”

Boccuti of the Kaiser Family Foundation acknowledges that there is a danger of patient cherry-picking and care skimping, which is why quality controls should be in place for bundled payment models. On the flip side, better care coordination could actually lower costs for patients.

“One financial benefit could be that you don’t send a patient to a facility where care is more expensive than needed,” she says.

Boccuti’s view and the idea of including post-acute care services in bundled payment arrangements were given a boost by a recent study in Health Affairs. The study published earlier this month by three health services researchers at Harvard University found that bundled payment arrangements for acute-care services would be more effective in controlling costs if post-acute care was included in the arrangement.

The inclusion of post-acute care services “…would produce greater efficiency gains by aligning the incentives of providers and by allowing them flexibility to choose whether patients received care at acute or post-acute care facilities,” the researchers concluded.

The takeaway for payers and providers is clear.  By drawing the lines of accountable care wider, payers are incenting providers to improve care coordination and to effectively use post-acute care services to avoid repeat and costly inpatient care.

The Patient Protection and Affordable Care Act’s big game starts Oct. 1, when people begin shopping for health insurance policies through the ACA’s mandated state health insurance exchanges. Individuals are required by the law to have health insurance starting Jan. 1 or face a tax penalty. People who don’t have coverage through their employer or who don’t qualify for Medicare or Medicaid or another government insurance program are eligible to buy coverage through a state exchange.

According to figures released by the U.S. Census Bureau last week, there were 48 million uninsured Americans in 2012, representing 15.4 percent of the U.S. population. Of that, about 21.9 million are eligible to buy coverage through state health insurance exchanges, according to separately released figures from HHS.

The challenge, as we’ve all been reading, is getting those nearly 22 million people signed up. The role of hospitals in doing that was the subject of a webinar hosted last week by the nation’s three leading hospital trade groups: the American Hospital Association (AHA), the Catholic Health Association (CHA) and the Federation of American Hospitals (FAH). I listened to the webinar like I would the three-hour pregame on 620 WTMJ Milwaukee before a Packer game, and four storylines jumped out at me. Here they are, and I have no doubt that they will add to the uncertainty over how the open enrollment period will play out.

Will all hospitals become certified application counselors?
Hospitals like other healthcare and social services organizations can become certified application counselors, or CAC, organizations that are qualified to help the uninsured obtain coverage through the state exchanges. And it was pretty clear from the statements made by the AHA’s Richard Umbdenstock, Sister Carol Keehan from the CHA and the FAH’s Chip Kahn during the webinar that they expect each and every one of their hospital members to become CAC organizations. Kahn said, “It’s a no brainer. It’s a must.” Sister Keehan said it would be an “utter catastrophe” if a hospital had the capability to help uninsured patients and didn’t. And Umbdenstock used the word “shame” to describe not finding every hospital in the country listed as a CAC organization on Health and Human Services website. With this sort of thinking, a great storyline after Oct. 1 might be which hospitals didn’t become CAC organizations and why. Try explaining that to a reporter or Sister Keehan.

Can hospitals subsidize premiums for people who buy coverage?
Let’s say a person is eligible to buy coverage through an exchange, qualifies for financial assistance to buy a policy but still can’t afford the monthly balance for his or her desired level of benefits. Can a hospital buy coverage on that patient’s behalf? That question was posed to Mandy Cohen, M.D., a senior advisor to the CMS Administrator, who was a presenter during the webinar. Dr. Cohen’s answer? “I have no idea,” she said, promising to refer the question to HHS lawyers.

The economics make sense, though. According to HHS, nearly half of the 21.9 million exchange-eligible uninsured will be able to buy coverage for less than $100 per month. If a hospital picked that up for a patient, it would be out $1,200 a year at most. If that same patient rings up a $100,000 hospital stay that year with 50 percent covered by insurance, the hospital would be reimbursed $50,000. But being an old healthcare legal reporter, I’m not so sure that would be allowed. The anti-kickback provisions of the Medicare and Medicaid fraud and abuse statutes bar any form of remuneration to induce the referral of program business, including patients. Subsidizing a patient’s exchange premium could be considered a kickback for using the hospital services. It will make a great story in 2014.

Will the variation in premiums force people to move?
Speaking of the rates people will pay for coverage through state exchanges, will the differences in prices be enough to result in population shifts across the country? No one knows exactly how much coverage will cost in each state exchange until they start selling it next month. But a report released in July by the Government Accountability Office suggests that the range in premiums could be dramatic. I went through that report and found that the base annual premium for coverage this past January for a family of four with parents age 40 or older ranged from a low of $1,857 to a high of $117,300, depending on the level of benefits and state where the insurance was being sold.

If that range is reflective of the range in premiums charged for coverage through the exchanges, it may make economic sense for people — if not companies — to relocate to another state. During the webinar, Cohen said people have to buy insurance from the exchange in the state where they file their state tax return or, if they don’t file a return, in the state of their legal residence. In-other-words, if they live in Illinois, they can’t buy cheaper coverage from the exchange in Iowa. They would have to move to Iowa. It’s just a matter of weeks before we start reading about exchange rates leading to the relocation of people and companies.

Will the enrollment and eligibility guidance from HHS be accurate and consistent?
The fourth storyline you should be ready for starting Oct. 1 is the accuracy of the enrollment and eligibility information being provided by HHS itself. During the webinar, Cohen touted the exhaustive resources the government is making available to the uninsured to help them obtain coverage through the state health insurance exchanges. [You can download Cohen’s slides from her presentation, here.] Websites, hotlines, handouts, navigators, counselors, you name it.

It made me think of the Internal Revenue Service during tax season. Every year, an enterprising reporter or consumer rights organization uncovers a discrepancy in the advice that the IRS is handing out over the phone and what the tax code really says is legal. The discrepancies can be attributed to the complexity of the U.S. tax code, but they’re often blamed on poorly trained IRS employees who are manning the phone bank in early April. Watch for that to happen to HHS after October? The ACA and its implementing regulations are just too complex for that not to occur. That same storyline could involve hospitals, physicians and health plans found to be dispensing inaccurate enrollment and eligibility information to consumers.

So there you have it. Four storylines to watch for after enrollment in health plans sold through state health insurance exchanges starts next week. Make some chili, whip up some wings and get ready for the big game. What other storylines will you be watching for after Oct. 1? Let me know, and we’ll write about them in a future column.

Thanks for reading.

David Burda, a veteran healthcare business and policy journalist, is editorial director of Better Thinking for Better Health.

According to the National Patient Safety Foundation, 90 million Americans (more than a quarter of the population) have some level of low health literacy. While these figures undoubtedly include those who are generally illiterate, it also includes people who are quite literate and motivated to know more about their health.

Medicine is complex and medical knowledge continues to expand in breadth and depth. Doctors also grapple with the enormity of medical knowledge to absorb. The result is fragmentation into ever more focused specialty areas to be able to synthesize and apply that knowledge effectively. Healthcare providers generally have become more specialized over the years in order to focus their expertise and avoid the information overload that can at times hinder, rather than help, care provision. How then does an average person come to grasp his/her own health condition when even the treating providers sometimes struggle to do so?

As an Alabama native and local medical school graduate, I had the opportunity to learn medicine around the same people, in the same culture, with whom I had been raised. Alabama is full of good people, but has a reputation as a state that lags in education. I found, by and large, that my patients wanted to understand what was happening with their health, but didn’t always have the resources. I can understand since it can be scary not knowing the difference between a minor ailment and a potentially deadly disease. Taking the time to explain things in a simplified manner to my patients actually made them better patients.

It goes something like this: “You have an infection called osteomyelitis, which means you have bacteria in your bone. We have to use IV antibiotics instead of pills so we make sure the right antibiotic travels through your blood and gets all the way down into the bone. We need to put a big IV in your arm and you can get your medication at home. It’s really important that you don’t miss a dose and you have to do the whole treatment course for six weeks. If it doesn’t work, sometimes you need surgery to clean out the bone. There’s a small chance — the worst case scenario — that if the antibiotics don’t work, you might have to get your foot amputated. I don’t think that’s going to happen — and we’re going to work hard to make sure it doesn’t — but it’s also important that you take your medications the right way to cure it.”

And with that, my patient says, “Alright, doc. Let’s do it. I’m ready.”

I can’t say that I ever measured myself, but I never really seemed to have a problem with non-compliance or relapse in those patients. A little time spent simplifying a complex, sometimes scary disease saved a lot of time and effort down the line.

My point is really that as the healthcare delivery system becomes more fragmented and medicine becomes more complex, much has been written about care coordination and systems that create a holistic care environment. Patient-centric care has become an industry mantra while patients are also asked to bear a greater burden in their own care. Forgotten in the debate over health reform is whether patients actually have the right knowledge and tools to adequately bear that burden on their own behalf.

What I’ve found over the years is that knowledgeable, motivated patients are empowered to drive their own health outcomes. In an increasingly digitized world, the complexities faced by patients who are drowning in undecipherable information can be simplified through the application of principles related to low health literacy. Simply giving patients access to a portal with some amount of medical and educational information doesn’t begin to actually empower that patient. Patient empowerment really begins with knowledge empowerment. As the old Saturday morning cartoon PSA saying used to go, “knowing is half the battle.”

Summerpal Kahlon, M.D., is vice president of business development for RelayHealth  Pharmacy Solutions, a business unit of McKesson Corp. Dr. Kahlon is focused on enhancing connectivity and communication between prescribers and pharmacy on behalf of patients and their medication needs. As an adult infectious diseases specialist, Dr. Kahlon has practiced in a variety of healthcare settings, with experience in general infectious diseases, HIV/AIDS care and travel and tropical medicine. Prior to joining RelayHealth, he also worked with EMR and telehealth systems, and he maintains an interest in optimizing the efficiency of the healthcare delivery system. Dr. Kahlon holds an M.D. from the University of Alabama School of Medicine, an M.S. in healthcare infomatics from the University of Central Florida, and a B.A. in economics from Case Western Reserve University. 

Hybrid ORs are equipped with fixed imaging systems that allow physicians to perform high-risk minimally invasive endovascular procedures with real-time imaging guidance and, if needed, convert instantly to open surgery use. The short-term return on investment may be lacking, but long term, hospital executives who want to offer competitive cardiovascular care in terms of both quality and cost should have a hybrid OR or at least be planning one for the future.

So says a recent report from the ECRI Institute, a nonprofit organization that researches ways to improve the safety, quality and cost-effectiveness of healthcare technology and services.  The hybrid OR may be justified for relatively few procedures today, but trends in cardiovascular care will make the room’s amenities increasingly valuable, says Thomas  Skorup, ECRI’s vice president of applied solutions.

“Looking five or seven years down the road, if a hospital wants cardiovascular services to be a key service line, it is important to establish the infrastructure and reputation to be in the space, even if it means taking a bit of a loss on the investment today,” he says.

A hybrid OR costs between $3 and $4 million to assemble, on average, because it may be embedded with up to 100 different medical devices. By definition, the room includes a fixed angiographic imaging system, wall- or boom-mounted display monitors and a heart-lung bypass machine.  To accommodate all the equipment, up to 1,400 square feet of space is needed—nearly double the size of a standard operating room—according to ECRI’s report. Walls must be lined with lead to protect against radiation exposure, ceiling supports must be reinforced to accommodate equipment booms, and positive pressure is required for OR-level sterility.

Consequently, the boom in the hybrid operating room business creates a big market opportunity for manufacturers, vendors and suppliers that offer the types of technologies to make the versatile OR of the future hum.

At the moment, only a few procedures require a hybrid OR. Most notably, the transcatheter aortic valve replacement, or TAVR, is appropriate for patients who are not candidates for open valve replacement. The CMS, which oversees the Medicare and Medicaid programs, recommends that two surgeons independently determine that a patient meets the criteria for a TAVR procedure.

“Depending on the hospital, the pool of patients that are truly candidates for this procedure at this time can be quite small,” Skorup says.  And if that pool is too small, hospitals are in trouble: CMS will reimburse for the minimally invasive procedure only if a hospital performs at least 20 TAVR procedures a year.

Within the next few years, however, Skorup expects the range and number of procedures requiring the hybrid OR room will grow.

“These less-invasive technologies are becoming a mainstay in terms of the way in which we treat patients,” says Michael Coady, M.D., chief of cardiac surgery at Stamford Hospital in Stamford, Conn.  “The technology is developing very rapidly.”

Stamford’s hybrid OR opened last November. All its competitors already had hybrid ORs, and building its own was essential to maintain Stamford’s position as a regional healthcare facility, he says.

“We have vascular surgeons using it, we have cardiac surgeons using it, we have electro physiologists using the room, and cardiac interventionists,” he says. “It is shared pretty evenly by a lot of specialists and it is being utilized on a daily basis.”

Building the room to accommodate a wide range of specialists makes the room pay off more quickly, but it requires careful planning, Skorup says. He recommends that hospitals spend at least a year planning a hybrid OR, and the first step is to identify all potential users and bring them into the planning process at the outset.

A common mistake: Asking only one specialty (e.g., cardiac surgery) to decide how to configure equipment in the room, realizing that their volume will be insufficient to justify the expense, and then inviting other specialists to join the discussion.  In those situations, Skorup says, decisions have likely already been made that will limit the flexibility of the room, and either the cardiac surgeons or the other specialists will likely be disappointed by compromises that are required to accommodate everyone.

“Building in as much flexibility so that physicians know that they can have that room fit their way of treating their patients promotes patient safety,” he says. “That puts a surgeon in a position to be as successful as possible.”

Stamford Hospital’s Coady says site visits to university hospitals and competing institutions in the local community were essential to its hybrid OR success. “They gave us tours and were very honest and open about how they did it and what they could have done better,” he says. “It’s prudent not to reinvent the wheel.”

If that level of uncertainty made you wince, then you realize the big risk providers, payers, vendors and others are taking if they choose not to test their clinical and financial information systems for ICD-10 readiness before compliance with the new diagnosis and procedure coding system that takes effect on Oct. 1, 2014. The switch to ICD-10 from ICD-9 will increase the number of diagnostic and procedure codes from 24,000 to 155,000.

The risks of not testing—and the rewards for those who do—were outlined in an educational webinar held Aug. 7 by the Workgroup for Electronic Data Interchange, or WEDI, the private-sector coalition that promotes the use of health IT to improve care, increase efficiency and reduce costs. Three industry experts offered a vendor’s perspective on testing during the hour-long “ICD-10 End-to-End Testing Webinar Series: Successful Strategies & Practical Advice.” The experts were: Jeff Strand, solution architect at Xerox Government Healthcare Solutions; Jim Morrison, senior vice president of operations for enterprise information solutions at McKesson Technology Solutions; and Josh Berman, director of analytics and ICD-10 at RelayHealth, a McKesson health IT business unit.

All three experts strongly advocated that providers, payers, vendors and others test their information systems for ICD-10 readiness lest they end up dealing with the negative care and cost consequences of claim denials and manual intervention to resolve coding problems after Oct. 1, 2014.

One of the biggest challenges for those who choose to test is identifying all the different internal and external information systems that need to sync up with ICD-10, including many that may not be obvious, according to Morrison.

“Turn over every rock. Look at every system. And don’t assume that just because the system doesn’t sound like it’s run by diagnostic and procedure codes that it’s not impacted by ICD-10 when it might be,” Morrison said.

To illustrate his point, Morrison walked webinar registrants through the extensive process that McKesson is using to make sure all of its affected products and services will be ICD-10 compliant well before Oct. 1, 2014. He said more than 100 products or services offered by the company were affected, and McKesson has gone through two rounds of testing to make sure they are all ready for ICD-10. A third round of testing will take place later this year. He said 80 percent were compliant by July 1 of this year with another 10 percent by Jan. 1, 2014, and the remaining 10 percent by April 1, 2014.

However, not everyone is taking ICD-10 testing as seriously as they should, according to Berman.  In his presentation, Berman cited “sobering” figures on payer readiness for ICD-10. A RelayHealth survey of 548 payers conducted earlier this year found that 74 percent had not yet decided how or when to test their information systems for ICD-10 readiness.

“The vast majority of payers are going to be testing—if they test at all—in the first quarter of 2014,” Berman said.

All three presenters agreed that testing is difficult but well worth the effort, and they outlined the detailed steps and timetable providers, payers, vendors and others can follow to ensure no major hiccups when the big day comes. They recommended having all systems tested and ready by April 1, 2014, with a six-month freeze on major changes until Oct. 1, 2014.

To access additional ICD-10 resources and eliminate the uncertainty over your level of readiness:

• Listen to a recording of the webinar.
• Download the slides from the webinar.
• Visit McKesson’s ICD-10 Information Portal
  
• Try out McKesson’s ICD-10 Impact Estimation Tool
• Take an online ICD-10 readiness assessment for hospitals
• Read “Prepping for the ICD-10 Shift” on Better Thinking for Better Health
• Read “F33.0: That might be your diagnosis if you’re not prepared for ICD-10” on Better Thinking for Better Health
• Download McKesson’s new 20-page ebook, “How to Avoid an Office Meltdown: Find Out the Facts about ICD-10-CM”

Hoping to harness the urgency of the situation, the American Nurses Association (ANA) recently offered the federal government what it viewed as a modest proposal for dealing with a potential strain on primary care. Though the proposal was turned down, the gesture did add to the momentum for developing new models of primary care that deliver safe and effective care at reasonable if not lower costs.

Key to that, according to nursing organizations, is giving advanced practice nurses the authority to prescribe medication without a physician’s order or oversight.

The ANA’s pitch, presented in a July 17 letter to the Centers for Medicare and Medicaid (CMS) by Administrator Marilyn Tavenner was this: Don’t let a health plan be offered through a state insurance exchange unless it includes advanced-practice registered nurses in its provider network. Having more nurse practitioners and other advanced practice registered nurses (APRNs) join the ranks of a health plan’s provider network could mean better access for patients to preventive care and chronic condition management services in areas where physicians are scarce, the ANA argues—and that could result in lower use of costly emergency care.

“Lack of inclusion in provider networks, combined with other barriers to practice such as restrictions in some state regulations, prevent many APRNs from offering the full range of services for which they are educated and licensed to provide,” the ANA said. “Consequently, APRNs are restricted from contributing to their fullest capabilities to alleviating the nation’s shortage of primary care providers.”

Advocating for nurse-practitioner rights in the context of health exchanges is the latest effort in a larger scope-of-practice effort that has seen the ANA and the American Association of Nurse Practitioners (AANP) lobby state legislatures for medication prescribing authority for nurses, which both the ANA and the AANP see as a critical component of expanding access to primary care. State laws on advanced practice nurses’ power to prescribe various classes of medicines vary widely, with most states requiring physician oversight of nurse practitioners who seek to author prescriptions.

Doctors groups, including the American Medical Association, have argued that nurses don’t have the years of education and training that licensed physicians do and that granting them new authority to prescribe medications would expose patients to critical safety risks.

“Nurses are critical to the healthcare team, but there is no substitute for education and training,” the AMA said in a statement in 2010. “Physicians have seven or more years of postgraduate education, most nurse practitioners have just two to three years of postgraduate education and less clinical experience than is obtained in the first year of a three-year medical residency.”

But nurse groups maintain that not allowing nurse practitioners — who, the AANP points out in a position paper, have advanced education beyond that of registered nurses in pathophysiology, pharmacology, and clinical diagnosis and treatment — to prescribe medicines for conditions such as high blood pressure and diabetes poses its own risk to patients who have trouble getting in to see a doctor. This risk would only be exacerbated when the population of insured individuals seeking primary care services expands, they contend.

“The ability of nurse practitioners to prescribe, without limitation, legend and controlled drugs, devices, adjunct health/medical services, durable medical goods and supplies is essential to provide cost-effective, quality healthcare for the diverse populations they serve across the life span,” the AANP states in its “Nurse Practitioner Prescriptive Privilege” position paper.

Expanding the nurse practitioners’ prescribing authority also will enable them to play a larger role in the kind of team based care that the healthcare reform law aims to promote, nurse advocates argue.  Allowing nurses to prescribe medication for managing chronic conditions could allow them to work more closely with pharmacies, for example, in coordinating patients’ everyday care, according to the groups.

Pharmacies also could benefit financially from the expanded pool of qualified medication prescribers both from an increase in the number of prescriptions filled to an increase in the medication therapy management services offered.

The CMS ultimately declined in its final insurance exchange regulations issued last month to incorporate the ANA’s proposal. However, the move is hardly a death blow for efforts by nursing organizations to make advanced practice nurses a more integral, and more equal, part of primary care in the U.S.  As the industry closely watches the opening of the insurance exchanges, expect nurse groups to continue their push for regulators and insurers to let nurses be part of a revolutionary primary care solution.

In fact, if health services researchers can identify those permanent and sustainable causes, they can be replicated and improved upon for years with the potential being an actual decrease in healthcare spending over time rather than just smaller increases in the rate of growth. That’s really good.

Tracking down those causes, whether they’re temporary or permanent, seems to be less like performing an economic analysis and more like doing a physics proof in which you demonstrate that something exists by ruling out all the other possibilities.

The latest attempt at an explanation is the working paper released by the Congressional Budget Office (CBO) in August. CBO researchers compared how much Medicare spent on inpatient and outpatient care under Part A and Part B of the program from 2000 through 2005 and from 2007 through 2010. From 2000 through 2005, Medicare spending on inpatient and outpatient care per beneficiary rose at an average annual rate of 7.1 percent. But from 2007 through 2010, Medicare spending on inpatient and outpatient care per beneficiary rose at an average annual rate of only 3.8 percent.

So why did the annual increases in Medicare spending drop by nearly half from 2007 through 2010? Of the 3.2 percentage point difference (thanks rounding!), 0.6 of that, or about 19 percent, was caused by lower demand for services by beneficiaries, according to the CBO.  Another 0.2 percentage points, or about 6 percent was caused by smaller increases in reimbursement rates paid to providers for care to beneficiaries. And none of it — as in zero — was caused by the financial crisis or the recession.

If you’re doing the math, that leaves 2.4 percentage points, or 75 percent, of the spending drop unexplained, leading the CBO to conclude: “Much of the slowdown in spending growth appears to have been caused by other factors affecting beneficiaries’ demand for care and by changes in providers’ behavior.”

The report isn’t the first to downplay the role of the recession in the healthcare spending slowdown and suggest by process of elimination other reasons for the lower growth rate of late.

• In May, the Urban Institute released a report called “What Drove the Recent Slowdown in Health Spending Growth and Can It Continue?” The report concluded that it wasn’t the recession or fundamental changes in the way care is delivered. The Urban Institute attributed the smaller increases in healthcare spending to a decade-long slowdown in overall economic activity.
• Also in May, well-known healthcare economist David Cutler and fellow Harvard University researcher Nikhil Sahni published a paper in Health Affairs. In “If Slow Rate of Health Care Spending Growth Persists, Projections May Be Off By $770 billion,” the pair examined the role of the recession on healthcare spending between 2003 and 2012. They concluded that 37 percent of the slowdown in healthcare spending during that period was caused by the recession, 8 percent was caused by a combination of fewer people with private health insurance benefits and smaller increases in Medicare reimbursement rates paid to providers and the balance — some 55 percent — was “unexplained.”
• In the same edition of Health Affairs, four other health services researchers from Harvard published a paper called “The Slowdown in Health Care Spending in 2009-11 Reflected Factors Other Than the Weak Economy and Thus May Persist” whose title pretty much gives away the ending. The quartet examined the reasons why national healthcare expenditures grew at an average annual rate of 3.1 percent from 2009 through 2011 compared with a 5.9 percent average annual increase over the previous 10-year period. They concluded that 20 percent of the slowdown could be attributed to changes in health benefits design that increased employees’ out-of-pocket payments. The researchers had no explanation for the other 80 percent.
• A month later, the Federation of American Hospitals, which represents the nation’s investor-owned hospital sector, released a report it commissioned called “Structural Changes Drive Health Care Spending Slowdown: Implications for Medicare Policy and Deficit Reduction.”  The report called the trend of smaller increases in healthcare spending “foundational, not fleeting,” and it warned against federal Medicare and Medicaid payment cuts to providers that could disrupt the progress they’re making at implementing those foundational and cost-controlling innovations.
• Also speculating on the causes of the change in spending habits were four subject matter experts who participated in a roundtable discussion moderated by yours truly in June as part of the annual MacEachern Symposium sponsored by the Kellogg School of Management at Northwestern University. The consensus of the panelists was that the slowdown was real and will continue over time because it was being driven by structural changes in healthcare delivery, not any temporary economic crisis. You can read a transcript of the panel discussion here.
• Taken together, the reports, papers and panels roundly rebut the first chapter in this healthcare whodunit published in April by the Kaiser Family Foundation and the Altarum Institute’s Center for Sustainable Health Spending. In their report, “Assessing the Effects of the Economy on the Recent Slowdown in Health Spending,” the duo attributed 77 percent of the smaller increases in healthcare expenditures to the recession with structural changes in healthcare delivery playing only a “modest” role.

All of this leads to one inescapable conclusion as to why healthcare spending has moderated in the past few years: no one knows. So here’s my common-sense theory and recommendation for providers and health plans.

When the flow of money slowed, everyone suddenly came up with new ways to provide the same or better care or service for the same or less money. Some may call that accountable care. Others may throw out the word value. I think it was much more basic: the desire to stay in business. And like businesses in any other industry, the ones that continue to innovate after the money starts flowing again will be on top. Those that fall back into their old bad habits will fail. For providers and health plans, that means taking the credit for the slowdown, not resting on their laurels but continuing to develop new ways of delivery and financing care that improve safety and quality while lowering costs.

What is your healthcare organization doing to innovate, stay on top and keep the healthcare spending streak alive?

Thanks for reading.

David Burda, a veteran healthcare business and policy journalist, is editorial director of Better Thinking for Better Health.