With a plan "to share knowledge and expertise," Allegheny Health Network has signed a memorandum of understanding to affiliate with the Johns Hopkins Sidney Kimmel Cancer Center in Baltimore. The affiliation is expected to stipulate a five-year agreement during which the two health centers will collaborate on education, research and clinical matters. The deal is expected to be finalized within a few months. The Johns Hopkins center was one of the first to be designated a comprehensive cancer center by the National Cancer Institute, one of 41 such centers nationally including the University of Pittsburgh Cancer Institute.
Adoption of basic electronic health record (EHR) systems by office-based physicians increased 21% from 2012 to 2013, according to an issue brief from the National Center for Health Statistics (NCHS), a unit of the Centers for Disease Control and Prevention. Last year, 48.1% of physicians had basic EHRs, versus 39.6% in 2012. Basic EHR systems, as the NCHS defines them, include functions for patient history and demographics, patient problem lists, physician clinical notes, comprehensive lists of patient medications and allergies, computerized orders for prescriptions, and the ability to view lab and imaging results electronically.
The Joint Commission, a nonprofit organization that accredits more than 20,000 health care organizations and programs in the U.S., has mandated that starting in January 2014, hospitals nationwide are required to reduce "alarm fatigue," defined as "when providers become desensitized to the constant beeps from monitors that could result in a failure to respond (or failure to respond quickly enough) to alarms indicative of a potential life-threatening condition." So it's a good thing that Boston Medical Center (BMC) made this a priority years ago. BMC completed a pilot study in late 2013 that resulted in an 89 percent decrease in audible alarms in a cardiac/telemetry unit and was asked to present their findings during a Joint Commission webinar that thousands of participants from hospitals across the country watched.
An estimated 14 percent of English-speaking adults in the United States have below-basic literacy, or an inability to perform simple reading tasks. But 35 percent have only basic or below-basic health literacy. That means more than 77 million people have difficulty with common health-related reading tasks. Health literacy involves the ability to obtain, process, and understand the health information necessary to make appropriate decisions, and it's clearly essential to selecting health insurance. More Americans are enrolling in federal and state-based marketplaces, but being insured is only the beginning when it comes to reducing health disparities related to literacy.
Regular readers know that I tend to operate in a no-blame mode, i.e., be hard on the problem and soft on the people. But when someone has violated the public trust in an institution to support the commercial goals of a private company, they have shown such poor judgment that consideration must be given to terminating their employment. Today's example is the following advertisement, which appeared in the New York Times Magazine this past weekend. So far so good: A hospital is bragging about a technology it has in place to serve its customers. This happens all the time.
Insurers are dropping thousands of physicians from their managed care networks. For the physicians allowed to stay, reimbursement rates may be cut so much that they will wonder whether being dropped was the better outcome.
This article appears in the February 2014 issue of Managed Care Contracting & Reimbursement Advisor.
Insurers are dropping thousands of physicians from their managed care networks in response to growing pressures from the Affordable Care Act (ACA), leaving many doctors to wonder what plans they will still participate in for 2014 and beyond. But that's not all. If the insurer lets you stay, reimbursement rates may be cut so much that you will wonder whether being dropped was the better outcome.
UnitedHealth Group confirmed recently that it sent discontinuation letters to thousands of physicians in 10 states that cited "significant changes and pressures in the healthcare environment" as the cause. The company issued a statement saying that it expected its Medicare Advantage network, which covers about 27% of people on Medicare, to remain at about 85% of its 2013 size through the rest of 2014. The insurer currently has more than 350,000 providers in the Advantage network. (See the sidebar on p. 3 for UnitedHealth's explanation of why the cuts were necessary.)
Humana, Aetna, and WellPoint have confirmed publicly that they may trim their provider networks as well. The moves are not surprising because health plans are subjected to multiple pressure points as they attempt to craft competitive affordable products for the new health insurance exchanges while dealing with compression of Medicare and commercial revenue pressures, says Hank Osowski, cofounder and managing director of Strategic Health Group, a healthcare consulting firm in Los Angeles.
Given the mandates of the ACA-including the Essential Health Benefits package, elimination of preexisting conditions as an underwriting mechanism, and narrowing of community rating bands-insurers have few options available to rein in the cost of these new exchange products, Osowski says. Unfortunately, these limited options include reducing reimbursement to providers of healthcare services and eliminating "high-cost" providers from the plan's network.
"The consequences of these actions are generally negative for both providers and consumers. Consumers will be faced with untenable choices of changing their doctor or hospital to remain in network or paying significant sums from their own pocket to continue seeing their doctor of preference," he says. "And while robust networks may still be the norm in large commercial products, providers of healthcare services have the difficult choice of either accepting greatly reduced reimbursement for services if they choose to participate in the narrow networks or losing access to their patients."
Physicians may still receive discontinuation letters for some time, says Jodi B. Laurence, JD, a health law attorney with the Florida Health Law Center in Davie, Fla. The terminations are being driven by the continuing consolidation in the marketplace, she explains.
"In all network contracts there is a 'termination without cause' provision, meaning they can terminate on 60 days' notice," she says. "You may have been in this network for years and you were making a good living, the insurer was happy with your services, and then you can still be terminated. When that happens, there is really very little you can do."
Because of the consolidation, insurers are tending to contract with larger organizations such as accountable care organizations (ACO), large physician group practices, and hospitals that are increasingly hiring physicians, Laurence says. Working with larger providers allows more cost-effective contracting, she explains, especially with the focus on quality measures as the determinant of payment rates.
"Physicians can't bury their heads in the sand. They have to see what's going on in the marketplace and figure out how they are going to be clinically integrated," she says. "It is going to be very difficult to practice in the marketplace as a solo practitioner. That is not a realistic option anymore."
Even if you do not move to an ACO, larger group, or hospital employment, the rest of the healthcare industry will respond to that trend, Laurence says. Insurers will increasingly focus on quality measures even with those physicians who manage to stay in a small practice and retain network affiliations, she says.
"You're not going to be providing care the same way in the future. Physicians would be smart to start planning their future and determining how to be successful in this new healthcare environment," Laurence says. "It may be baby steps, but at least take some steps in that direction."
For instance, Laurence works with a solo practitioner who has been on his own for more than 20 years and does not want to join a hospital group or ACO. But he is hiring additional physicians and staff to create a small practice group that can more effectively generate the quality outcomes data that insurers are looking for now, Laurence says.
With all the emphasis on quality, some of the physician terminations may be surprising because the insurers are not just dropping poor performers, Osowski notes. At the same time they are looking for quality, they are looking for cost savings, and sometimes those goals can compete. The result sometimes is that the networks will drop physicians or groups that are providing high-quality care because that care skews too heavily in the expense consideration, he explains.
In addition, the insurance industry and consumers are not as focused on broad networks as they have been in the past.
"Now there is a feeling on the part of the plans that the appeal of the broad network is no longer as important a factor when they are trying to put together a network that provides reasonable access and availability but at the same time keeps costs down," Osowski says. "Not all plans are adopting the narrow network strategy, but their costs tend to be higher if they don't. It remains to be seen if the narrow strategy will even work, and a lot of that depends on the profile of the people who come into the exchanges and buy insurance. Are they going to select plans based on price or whether their physicians take part in the program?"
In addition to the risk of being dropped from networks, some physicians will have to decide whether they are willing to participate in the exchange products at a lower reimbursement rate, Osowski says. That decision will be based largely on the makeup of your current patient base. If you have a patient base that is primarily Medicare, the reductions in the exchange plans may not be a dramatic change. But if you have a more commercial base, the cuts will be more of a shock.
Osowski and Laurence both say the reimbursement picture for physicians will continue to be fluid and unpredictable for months as managed care plans try to determine the best path. Osowski suspects the insurers are going too far with the drive to narrow networks in hopes of lower premiums making their products more competitive. They may realize that error and expand their networks again to draw in consumers who want more access to their physicians, he says.
In the meantime, physicians could have tough decisions to make.
"If you are operating with a preponderance of commercial rates and now they want to pay you at these much lower rates, this could be quite a shock," Osowski says. "You're going to have to figure out how to keep your staff, how to cover the costs of keeping your practice running. Physicians are going to face a real economic challenge."