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Healthcare Reform Spawns Daunting Regulations

Cheryl Clark, for HealthLeaders Media, January 13, 2011
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John Toussaint, MD, president and CEO of ThedaCare Center for Healthcare Value and former president of ThedaCare, a multihospital health system based in Appleton, WI, describes his system's focus on collapsing unneeded steps in the process of delivering care. Eliminating the time patients spend waiting for various healthcare services generated huge savings.

"They're waiting for CT scans, for doctors or some procedure," he says. After redesigning the system, patients rarely have to wait, and in their clinics, patients have their test results and plan of care before they walk out the door.

No need for someone to make another appointment. No need for a phone bank to call the patients back. "And we saved $350,000 per year just in a four-person clinic."

Toussaint also says that for value-based reporting to be meaningful, value-based incentive payments must move away from measures based on process steps to those based on actual outcomes.

Payment Adjustment for Conditions Acquired in Hospitals Saves $1.4 billion over 10 years

Starting in FY 2015, hospitals deemed to have the worst risk-adjusted rate of patients with conditions acquired in their facilities---those in the top quartile---will lose 1% of what they would otherwise have received. As with readmissions and value-based purchasing incentives, these scores will be made public online.

At first, hospitals covered under the IPPS reimbursement system will be affected, but the administration may expand the formula to providers now excluded, such as hospital outpatient departments, inpatient rehabilitation facilities, skilled nursing facilities, ambulatory surgical centers, and clinics.
Any condition a patient acquires in a hospital is covered under the definition, but refinements are expected when the regulations emerge.

Worrisome to many providers is that what conditions will be counted is left unsaid. Many believe, however, that it will include medication errors, in-hospital falls, decubitus ulcers, burns, or wrong-site surgeries.

This may be a sensitive subject for many hospitals. But transparency is a crucial driver for meaningful reform, Toussaint says.

"If you're a patient going to have surgery, do you want to know how many infections the hospital has, how many medication errors the hospital had, and what your chance of living and dying is for a procedure?" says Toussaint. "Today, the system doesn't make this easy. In fact, most medication errors go unreported because of the culture we have within healthcare, which basically blames people for mistakes when almost every mistake is a process problem rather than a people problem."

Patient-Centered Outcomes Research Institute and Comparative Effectiveness Research Spends $2.5 billion 

With the 21 members of this independent panel now named, federal officials are making it clear they want to end the system that pays providers based on what a service costs rather than whether it's better.
And though the institute is prohibited from setting coverage or reimbursement criteria for public or private payers, many believe that its findings will ultimately impact how much or even whether a procedure is reimbursed.

Key to the panel's success is the appointment of a 15-member methodology committee, whose members will include directors of the National Institutes of Health and the Agency for Healthcare Research and Quality.

Already, hospital officials are saying they're making adjustments in their technology purchases based on the power this panel might wield.

The institute will have a spillover effect on private insurers, which will pay a tax that will constitute part of the institute's financial support.

"There will be a new premium put on evidence," says John Chessare, MD, CEO of the Greater Baltimore Medical Center, a 285-licensed-bed acute care hospital in Towson. "Historically, hospital presidents have spent almost zero time looking at effectiveness. They've just left it up to clinicians and patients to do whatever they felt is best. But now the stakes are too high."

As an example, Chessare says his system postponed a decision to build a new inpatient tower that would have cost hundreds of millions of dollars. "As that planning was happening a few years ago, the game was to do as many high-margin procedures as you could.

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