President Barack Obama has pledged to use technology to raise healthcare's quality and lower costs, but many in the field warn that rushing the process of digitizing patients' records could lead to wasteful spending. House Democrats recently unveiled a fiscal-stimulus bill that includes $20 billion for healthcare information technology. "In some ways I am thrilled, because IT will need federal help," said John Glaser, chief information officer for Boston-based Partners HealthCare. "But you can bring in too much money too fast and not only waste it, but set us back."
Rhode Island will be the first state to cap overall spending on Medicaid in an experiment starting early this year. In exchange, the state will be allowed to change healthcare programs that have been tightly controlled by the federal government. The agreement calls for Rhode Island to limit Medicaid spending to $12 billion over the next five years.
China has announced that it intends to spend $123 billion by 2011 to establish universal healthcare for the country's 1.3 billion people. The state news agency said the authorities would "take measures within three years to provide basic medical security to all Chinese citizens in urban and rural areas, improve the quality of medical services, and make medical services more accessible and affordable for ordinary people." Providing universal healthcare is seen by some economists as a way to stimulate domestic spending during the current economic downturn.
Capitation remains popular in California and other pockets of the country, but the rest of U.S. healthcare providers associate the phrase with not getting paid enough. Though many practices blame poor financial performance of risk contracts for not trying capitation, a recent survey found poor results are not as common as has become generally accepted.
As healthcare leaders look for ways to improve upon the fee-for-service system, capitation-type programs have been eyed as a possibility. Three such options are the medical home payment model that provides care management fees for physicians who coordinate care, quality contracts that include both a baseline payment and quality incentives, and PROMETHEUS (provider payment reform for outcomes, margins, evidence transparency, hassle-reduction, excellence, understandability, and sustainability), which pays each provider according to his/her contribution to a patient's care.
Given this greater interest in capitation-type programs, health insurers should take a look at the recent survey released by the American Medical Group Association and ECG Management Consultants. The 2008 Capitation Survey found that most respondents with capitation describe their organizations' financial performance in risk contracts as above average or excellent over the past two years. Less than 10% cited poor financial performance. As these numbers show, capitation is working for some practices.
Here are three takeaways from the study that are revealing even for health insurers not in capitation:
Physician buy-in is the first step (isn't it always?). Respondents to the survey ranked physicians not willing to accept risk as the second largest barrier for practices interested in risk contracts (behind only unfavorable contract terms). This goes to the importance of setting the groundwork by educating physicians about how your capitation program benefits them. The study also found that pay-for-performance (P4P) programs are not popular. Though many health plans are looking to P4P as a way to improve quality and patient outcomes, a mere 10% of respondents said they were participating in a P4P program. Josh Halverson, senior manager at ECG Management Consultants, says successful capitation programs reward physicians for managing health. "To successfully manage risk, there must be an underlying culture and commitment to capitation," says Halvorson.
Doctors like payment models in which they control the outcomes. Professional and primary care capitation are the most attractive to providers, while global risk is the least attractive. By opening up to global risks, physicians feel a lesser amount of control and exposes "the group to greater levels of risk to issues beyond their contract," says Halverson.
Health plans need to work collaboratively with physicians to share pertinent claims data. Respondents said health insurers are providing eligibility data, but not claims information. Practices are not able to perform the necessary audits to "ensure adherence to contracted rates for services rendered and proper premium payments for the covered population," according to the survey. Instead, health plans need to create open communications between the insurer and the practice. This can happen through networks in which the two sides share claims data and patient information. More than half of respondents said their financial performance was good or excellent with specific health plans and they appreciated when health plans provided more data and utilization support. Sharing utilization and medical expense information between health plans and physician organizations is a "significant opportunity for improvement," says Halverson. In fact, physician organizations surveyed said that valid and consistent utilization data are even more important than providing utilization management staff.
If these kinds of payment models are to work, greater collaboration between physicians and health plans is needed. This greater integration is evident not only in capitation, but in areas such as the medical home, population health, consumer-directed healthcare, and quality contracts.
The only way these programs can work, experts now realize, is having health insurers, physicians, pharmacists, nurses, and myriad other healthcare professionals sharing information and working collaboratively for the patient.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com.Note: You can sign up to receiveHealth Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
Barack Hussein Obama was sworn in as the 44th president of the United States on Tuesday and promised to "begin again the work of remaking America." At his inaugural speech, Obama acknowledged that the nation was enduring a "winter of our hardship," and he reiterated his plans for massive federal spending to jumpstart the economy, particularly in areas like alternative energy, infrastructure repair, and healthcare.
Some older physicians have been known to be, shall we say, change-resistant. Chances are some of the operational practices they learned fresh out of medical school are what they're still using today. Who needs electronic medical records when you've got 5x7 note cards, a unique flair for penmanship, and a sturdy manila folder?
The problem is that the way medical care is delivered has to change quickly to adapt both to a shortage of physicians and an aging and chronically sicker demographic. This is particularly true in rural America.
A big catalyst for changing healthcare delivery in the future will be in the hands of the residents being trained today. Understanding the difficulty of teaching old docs new tricks, the University of Kansas School of Medicine has opened a new medical home program at its Smoky Hills Family Medicine Residency Program in Salina, 90 miles north of Wichita. The hope is that three years of residency under a medical home model will ingrain lessons that include the proactive coordinated care for chronic illnesses, with patients taking a role in their treatment plan; managing staff, building teams, and delegating responsibilities within the doctor's office; and cultivating technophilia, especially for electronic medical records and other areas of health information technology and linkage.
"The adoption of the medical home model at the residency level is particularly important because the office practices physicians learn in residency—good or bad—tend to translate into their 'real life' practice upon graduation," says Rick Kellerman, MD, professor and chair of the Department of Family and Community Medicine at the KU School of Medicine-Wichita.
"We're integrating all of the different components of the medical home. There are a lot of different practices that do certain elements, but to put them all together has never been done," he says.
The Smoky Hill medical home will steer 12 family practice residents—four residents per annual class—away from the traditional mindset of providing acute care and toward proactive management of chronic illnesses. "One of the big pushes in the medical home concept is not just waiting until the patient shows up in the office, but to identify those who are at risk or out of control and reaching out to them," says Terry McGeeney, MD, president and CEO of TransforMED, a subsidiary of the American Academy of Family Physicians, which is coordinating Smoky Hill's move toward the medical home model. "That is a very different model from what most of us have trained in, where we wait for the patients to show up with a problem and you take care of them and then wait until they show up the next time."
Smoky Hill residency teaches the young doctors to avoid micromanaging and encourages delegating responsibility to staff, which is crucial to the success of the medical home. McGeeney says a competent physician assistant can increase per-physician capacity by at least 20 patients a day, but only under a team concept. If the physician is checking temperatures and blood pressure and doing the paperwork instead of delegating to a physician assistant or an office administrator, that reduces the number of patients who can be seen, reduces patients' face time with their physician, and defeats the purpose of the medical home.
"When I trained in the '70s it was more 'captain of the ship' mentality," McGeeney says. "Now we need physicians to be more comfortable working with nurse practitioners and physician assistants and allowing them to do what they go to school for. We're urging physicians to practice in an environment where the patients participate in the decisions, so you work with patients and not just talk at them."
McGeeney and Kellerman carry a missionary's zeal for medical homes, particularly in the age of medical subspecialties, where the product of medical schools isn't meeting the needs of the greater society. "It's probably healthcare in America's only hope at this point," McGeeney says. "I do strongly believe the healthcare system in this country needs a strong primary care base. We know specialty care by itself is costly and fragmented and we absolutely need it but one of the big concepts of medical home is somebody coordinating the care."
Kellerman says he believes the medical home is here to stay because it's the only model that addresses the pressures facing healthcare delivery now and in the foreseeable future, particularly access. "In 20 years we are going to look at the way we've been treating patients now and we are going to disbelieve that we did it this way," he says. "No EMR, no registries, no emphasis on taking care of chronic illness and preventive care, with group visits and working as a team. I don't think it's going to be a flash in the pan."
John Commins is the human resources and community and rural hospitals editor withHealthLeaders Media. He can be reached atjcommins@healthleadersmedia.com.
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