Medical-device company Medtronic, Inc. has begun voluntarily posting annual physician payments exceeding $5,000 on its Web site, well ahead of the 2013 deadline for mandatory disclosure of such information that was included in the new healthcare reform law.
The disclosure includes information about the type of relationship—training and education, research and development, advisory services, or royalties—as well as the rough dollar amounts and a few details about the specifics of the collaboration.
In the first quarter alone, the company paid more than $15.7 million in fees to physicians, most of it to orthopedic surgeons for surgical inventions. Orthopedists received $14.2 million, and royalty payments accounted for $13.9 million of that. Vascular and cardiac specialists, heart-rhythm doctors, and neurosurgeons received about $500,000 each, according to a Wall Street Journal report.
Only 227 physicians or physician groups received $5,000 or more annually and met all the criteria for disclosure, and some received exceptionally large payments for the quarter. A Tennessee orthopedic surgeon received nearly $4 million and a Louisville, KY practice received $2.4 million in the quarter for spine surgery inventions.
Medtronic will not release aggregate dollar amounts with future updates to the disclosure database, because the "purpose of the site is not to provide that aggregate data, it's for patients to learn about the types of relationships their physicians have," says Steven Cragle, spokesman for Medtronic.
Although the healthcare reform law will require the rest of the medical device industry to disclose similar relationships with physicians in a few years, Medtronic has received special attention and criticism in recent years.
In 2008, Sens. Charles Grassley (R-IA), and Herb Kohl (D-WI) sent letters to Medtronic asking the company to provide details about its payments to physicians for consulting services after allegations surfaced that the company had paid kickbacks to surgeons to boost implant sales. Two years prior, Medtronic reached a $40 million settlement with the U.S. Department of Justice but denied any wrongdoing.
Kohl said of Medtronic's new disclosure policy that he appreciates "Medtronic's voluntary decision to stay ahead of the transparency curve."
In addition to disclosing payments to doctors, Medtronic has also revised its policies and procedures to make its relationships more transparent. Changes include limitations on royalty earnings and better documentation of fair market value and the business need for a service.
Although most of the coverage expansion under the Patient Protection and Affordability Act will come from adding to the Medicaid rolls, state governments will not have to spend much more on the program thanks to funding from the federal government, according to analysis from the Urban Institute for the Kaiser Commission on Medicaid and the Uninsured.
Enrollment in Medicaid will increase nationwide by more than 27% between 2014 and 2019, the study predicts. However, state spending on the program will inch up only 1.4%, while the federal government increases spending 22% to cover the cost.
Some of the states with the lowest coverage levels today will get the most bang for their buck. Alabama will see 53% reduction in the number of uninsured patients thanks to the Medicaid expansion, and the federal government will cover 96% of that cost. Texas, which also has a high number of uninsured patients, will see nearly a 50% decrease in its uninsured and pay only 5% of the cost of expansion.
Although the impact will be less in states with low levels of uninsured, the financial burden will be even smaller. Massachusetts, for example, already has the lowest percentage of uninsured residents in the country, so the Medicaid expansion will only result in a 10% reduction. However, the federal government is expected to pay for 100% , and state spending on the program may actually decline 2%.
Mississippi will have the biggest increase in state spending, at 4.8%.
The cost calculations were based on a higher federal match rate that assures the federal government finances much of the cost of Medicaid expansion as reform kicks in. The regular match rate is determined on a state-by-state basis by a formula, and ranges from 50% to 76%. Under reform, the match rate jumps to 100% in fiscal years 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and after.
State outreach may ultimately determine the success of the expansion and the financial burden local governments have to bear. A more aggressive outreach and enrollment campaign could lead to much higher coverage numbers, researchers said. The baseline prediction of a 15.9 million increase in Medicaid enrollees could jump to 22.8 million, under what researchers dubbed the "enhanced outreach scenario."
"The outcome of state actions will affect the extent to which implementation of health reform reaches its fullest potential. If states fall short of implementation expectations, fewer individuals will be covered and more individuals will remain uninsured. Under this scenario, states would also forgo large sums of federal funding tied to the coverage of those made newly eligible under reform," the report said.
The new data contradicts earlier criticisms from some state officials, who said the healthcare reform legislation's reliance on Medicaid would place the financial burden primarily on state governments.
"For a relatively small investment of state dollars, states could see huge returns in terms of additional coverage for their lowest income residents—with federal dollars covering the bulk of the bill," said Diane Rowland, executive vice president of the Foundation and executive director of the KCMU, in a release.
Once again, Massachusetts is providing a testing ground for national healthcare policy. While the U.S. Congress is only beginning a debate about regulating and capping insurance premium increases, the Massachusetts government has already denied proposed rate hikes, and insurers' reactions in the state may foreshadow what's to come at the national level.
First, a caveat: It can be risky to read too much into what happens in Massachusetts. Sometimes the state is a leading indicator of the successes and failures of national healthcare reform (the final legislation took a similar approach, after all). But often what happens in Massachusetts is simply what happens in Massachusetts. It is a unique market with its own strengths and challenges, and every change doesn't necessarily portend how other states will react to similar policy.
But in this case it's easy to connect the dots. In April, the state Division of Insurance refused to allow insurers to raise premiums to their proposed levels in the small-group market. Last week, four major Massachusetts insurers claimed that the decision to cap rate increases led to more than $150 million in first-quarter losses. This week, some of those same insurers are telling hospitals and physicians that they will freeze or slash payments in the upcoming round of contract negotiations.
In essence, the insurers are shifting their losses to hospitals and physicians.
When given the chance, most private companies will do what they can to avoid a tax or cost increase. If they can shift the price to the consumer without losing customers, they will. In this case, the government has locked down the amount that insurers can shift to those who buy their product, so now they're looking in the other direction, at providers.
There has already been a similar federal law proposed to regulate health plan premium hikes nationwide by requiring insurers to submit increases over a certain amount to the Secretary of HHS or a state agency for approval. If we stick to the Massachusetts-as-bellwether theory, then it is likely that capping rates nationwide could lead to more insurer losses, and in turn more payment reductions to hospitals and physicians.
But markets and profit margins are different everywhere, and price controls won't necessarily affect a payer in rural Oklahoma the same way it will one with most of its customers in greater Boston.
The warnings coming from Massachusetts payers do very little to address the problem that the rate caps were intended to address: Spiraling costs. Hospitals and physicians are already struggling with cuts to Medicaid and Medicare, and many don't have the margins to absorb a reduction in private rates at the same time.
Maybe providers will take it upon themselves to weed out waste in order to stay afloat with lower reimbursement levels. But the best examples of systems that increase quality while reducing costs seem to come from those that involve partnerships between providers, patients, and payers. Massachusetts insurers are moving in the other direction, with more emphasis on contract negotiations and incentives for adversarial relationships.
Insurers are being pressured by politicians and employers to do something about healthcare costs, and have an opportunity to realign their relationships with providers to dig out some of the waste in the system.
Everyone is partly responsible. There's waste in providers' practices, waste in payer policies, and waste cause by government regulations. If the reform goal is to cut out healthcare waste, each party involved needs to do more than play a game of hot potato and pass costs to someone else.<
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A new study of worldwide childhood and infant mortality rates contains both good and bad news about a major measure of the quality of the U.S. healthcare system.
On the one hand, mortality rates for children under 5 continue to drop steadily. The rate in the U.S. declined from 8.3 per 1,000 in 2000 to 6.7 in 2010—nearly a 20% drop over the 10-year period. This continues a decades-long trend of consistent improvement. Mortality rates were 25.7 per 1,000 in 1970, 16 per 1,000 in 1980, and 11.6 per 1,000 in 1990.
But the improvement doesn't negate the fact that the United States has fallen further behind other wealthy nations in childhood mortality rate comparisons, and now ranks 42nd globally, behind most of Europe and nations such as the United Arab Emirates, Chile, and Cuba.
In 1990, the U.S. ranked 29th in the world, but other nations have been improving at faster rates. For instance, Serbia and Malaysia were ranked behind the U.S. 20 years ago, but cut their mortality rates by 70% and are now ranked higher, according to the Los Angeles Times.
The study was funded by the Bill and Melinda Gates Foundation and aimed to measure progress being made toward the United Nations' Millennium Development Goal 4, which targets a two-thirds reduction in the under-five mortality rate between 1990 and 2015.
The U.S. has seen a 42% decline since 1990, but is making slower progress than more than 120 other countries. Even nations that were ranked higher than the United States in 1990 have managed to make larger gains during the period. Singapore, which currently has the lowest rates in the world and had fewer deaths per 1,000 in 2000 than the U.S. has now, was able to cut its rate by two-thirds since 1990.
The U.S. healthcare system's struggles with infant and maternal mortality received considerable attention during the healthcare reform debate, because although healthcare is expensive in the United States compared to the rest of the world, the infant mortality rankings suggest Americans are not getting value for their dollar.
In addition to struggling with infant mortality, the U.S. healthcare system falls short when it comes to maternal deaths, too. This January the Joint Commission issued a Sentinel Event Alert for preventing maternal death, highlighting an uptick in recent years.
Although the news was mixed at best for the United States, it was overall positive for global health. The cumulative effective of improvements across the world mean there will only be about 7.7 million deaths in 2010, compared to 11.9 million in 1990. Despite the successes, the pace is currently insufficient to meet the UN's goal by 2015.
Although recently-passed healthcare reform legislation will open new options for many Americans to purchase insurance through exchanges, employer-provided insurance will likely remain the most common source of coverage, suggests a survey of more than 3,000 employees conducted by the National Business Group on Health and Hewitt Associates.
The majority of workers surveyed, roughly 61%, currently rely on their employers for health insurance coverage, and about 47% plan to stick with their employer coverage in the next three to five years, the survey found. About three-quarters of the respondents were employees and roughly one-quarter received coverage as dependents.
Thirty-five percent of respondents said they would consider dropping their employer-provided health insurance if they become eligible to purchase similar plans for a lower cost. However, because the question was asked before reform was passed and most respondents were highly-concerned with the cost of coverage, it is difficult to predict how many would actually switch plans, says Cathy Tripp, principal in Hewitt's Health Management practice.
That leaves employers with the burden of providing coverage and managing wellness activities for the foreseeable future.
Many employers have implemented wellness programs in an attempt to control costs, but they have often struggled to see results. That may be because of a sharp disconnect between employees opinions and actions, the survey suggests.
Although a vast majority of the employees said smart health choices and preventive care are essential to improving health, many admitted to failing to follow suggestions regarding exercise, screenings, and other health advice.
Information seems to be the biggest obstacle for most workers. Fifty-eight percent said they weren't sure which information they could trust, 54% said the information they received was confusing, and 47% claimed they didn't know much about healthcare costs. Employers are in a unique position to close that information gap by educating their employees about health issues, says Joann Hall Swenson with Hewitt Associates. Respondents were highly in favor of personalized information, and employers will likely have more success with programs if they tailor them as much as possible to individual workers, she says.
In fact, it isn't lack of interest that is holding many workers back. Respondents were more likely to cite internal motivators than financial incentives as reasons for participating in wellness programs. For instance, 48% said they would complete a healthcare questionnaire because it was "the right thing to do," and only about 28% said they would complete it because of financial incentives or penalties.
Employers may be spending unnecessary money on incentive programs that many employees would participate in if only they had better information and resources.
"Employers don't have to pay people to do everything. It may be better to just pay for the things that are harder to do," says Swenson.
Americans' satisfaction with the hospital industry dropped 5% between the first quarters of 2009 and 2010, falling to its lowest level in five years, according to the American Consumer Satisfaction Index, which measures consumer satisfaction for 10 economic sectors.
The ACSI gauges satisfaction on a 100-point scale, and the hospital industry fell from a score of 77 to 73 this year. A 12% dip in ER satisfaction in the first quarter was partly responsible for the drop. Overall, the healthcare sector was down nearly 2% for the year.
The dissatisfaction seems primarily confined to inpatient services, however. Satisfaction with ambulatory care increased a little over 1%, and the score of 83 out of 100 was significantly higher than the satisfaction levels for hospitals.
"The downturn for hospitals suggests that initiatives to improve the quality of care have not had the desired effect," said Claes Fornell, founder of the ACSI. "A combination of a greater focus on outpatient treatments and an increase in the number of after-hours facilities as an alternative to ERs may help relieve some of the pressure on hospitals and reverse or at least slow the downturn in patient satisfaction."
In contrast to the healthcare industry, consumer satisfaction was up in other sectors of the economy. The healthcare and energy sectors were the only ones to decline in the latest report, and those drops offset gains in other areas to keep the overall consumer satisfaction level relatively unchanged.
The struggles for hospitals come despite the fact that most have made patient satisfaction one of the top strategic goals for their organization in recent years. For example, improving patient satisfaction was the second-highest ranked priority for the next three years in the 2010 HealthLeaders Media Industry Survey. More than 38% selected it as a top priority this year, compared to 26% in 2009.
Most industries tend to see a drop in consumer satisfaction scores during a recession, and although healthcare reacts differently to economic changes than other sectors, the bad economy may have played a role in the dropping satisfaction rates for hospitals last year. More than a quarter of those surveyed for the HealthLeaders Media Patient Experience Leadership Survey said lack of funding or budgeting priority was the biggest obstacle to incorporating more patient experience strategies. Many hospitals had to trim budgets in 2009, and the cost-cutting measures may have impacted patient satisfaction in some cases.
Last fall, author Michael Pollan wrote an op-ed in the New York Times offering a simple defense of the not-yet-passed healthcare reform proposal: It would push the health insurance industry to take more interest in America's obesity problem and use its influence to reshape agricultural and food policy, he argued.
Pollan is best known for writing The Ominovore's Dilemma, and played a large role in kick starting the growing "food consciousness" in America. What began as a few scattered academic arguments about obesity and agribusiness has now morphed into a movement, with reality television shows about eating fruits and vegetables and a campaign by First Lady Michelle Obama to reverse childhood obesity, in part by offering healthier food choices in schools.
And Pollan thinks insurers can be a champion for that movement. Although health insurers have long been aware of the burden of obesity and its connection to chronic diseases, until now they have had strategies for keeping certain high-risk patients out of their pool of customers. But because insurance companies can no longer exclude patients because of pre-existing conditions or other health indicators, preventing chronic disease is now a top business priority.
"A patient with Type 2 diabetes incurs additional healthcare costs of more than $6,600 a year; over a lifetime, that can come to more than $400,000. Insurers will quickly figure out that every case of Type 2 diabetes they can prevent adds $400,000 to their bottom line. Suddenly, every can of soda or Happy Meal or chicken nugget on a school lunch menu will look like a threat to future profits," Pollan wrote.
The argument is a little simplistic, and it isn't as if insurers aren't well aware of the costs associated with obesity. But he has a point. Maybe it's time for insurers to get more involved in preventing obesity at the national level.
What if the insurance industry threw its full weight behind a tax on soda and sugary drinks? Or lobbied for agricultural policy that brought down the cost of fruits and vegetables? Individual payers could even significantly increase their reimbursements for wellness and weight loss services, and hopefully see a return on that investment in a healthier America.
Savvy insurers are already taking innovative steps to incentivize weight loss and focus on prevention. But a recent study in the American Journal of Public Health suggests some may not yet be seeing the bigger picture. Companies providing health and life insurance own roughly $1.9 billion worth of stock in the fast-food industry, according to the study.
Granted, this was probably a drop in the bucket relative to their overall portfolios. But any individual or institution interested in improving Americans' health should think twice before investing in an industry that provides the cheap, unhealthy food that helps fuel the obesity epidemic.
The campaign by Mrs. Obama to reverse childhood obesity provides a perfect jumping in point. Partnering with the White House on this initiative could not only improve the health status of the industry's future customers, but it could also help repair its tarnished public image.
And ultimately, reversing these 30-year trends will not only be good for the nation. It will be essential to insurers' bottom lines, as well.
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The Department of Health and Human Services is preparing two surveys that aim to gather information about patients' preferences and satisfaction with electronic health records and personal health records in order to improve nationwide HIT adoption efforts.
To learn more about the value of PHR adoption, HHS plans to survey about 500 Medicare beneficiaries who are enrolled in the Medicare PHR Choice Pilot, which launched in January 2009 in Arizona and Utah. The program encouraged fee-for-service beneficiaries to enroll in one of several available PHR services to track their own health and healthcare services.
"We know very little about why consumers, and specifically Medicare beneficiaries, elect to use PHRs and what functionality they want from a PHR," HHS wrote in the Federal Register. "Understanding these needs will be critical if HHS and the Centers for Medicare & Medicaid Services (CMS) are to pursue PHRs as a tool to empower consumers to manage their health and have the capability to link to their provider's EHR."
HHS hasn't yet indicated if they plan to expand the pilot project, but the results of the survey could determine whether Medicare adopts a national PHR program.
The second survey will be designed to assess the gap between patients' and providers' perceptions about how EHR systems affect the delivery of care. It will focus particularly on primary care practices, and the goal is to understand how having an EHR in a primary care office affects consumers' satisfaction with their care, their communication with their doctor, and the coordination of care.
HHS plans to gather information about EHR preferences through three projects: A survey that will collect information directly from 840 patients, a screening and recruitment form for staff at primary care practices, and a focus group of about 20 patients from primary care practices.
Although the survey is intended to enhance the effectiveness of the Health Information Technology for Economic and Clinical Health (HITECH) Act, which set aside more than $19 billion for EHR adoption, it also may address a concern that some providers have had since the program began: that EHR adoption could initially hinder, rather than help, care delivery and the physician-patient relationship.
"The research questions for the proposed Patient Perceptions of EHR Study are motivated by a concern that patients may have negative experiences as practices begin to use EHRs," HHS wrote in the proposal.
However, with many providers already moving forward with EHR implementation in order to capture the first available reimbursement bonuses in 2011, it is unlikely that the survey results will be compiled in time to change any policy or requirements before most providers roll out their new systems.
Both survey proposals are open for comments and suggestions for 30 days.
White House lawyers have filed the government's response to a lawsuit seeking to overturn the Patient Protection and Affordable Care Act, previewing what may become a state-by-state legal battle over the future of healthcare reform.
The suit was filed by the Thomas More Law Center in the U.S. District Court for the Eastern District of Michigan on behalf of four uninsured individuals who do not plan to buy health insurance and claim they will be harmed by the monetary penalty when insurance becomes mandatory in 2014. The suit asserts that the requirement and penalty are unconstitutional and seeks to overturn the law.
However, the White House issued a two-pronged defense this week.
First, the administration argued that the individuals don't have grounds for the suit because they have not suffered actual or imminent injury from the law. Any harm to the plaintiffs is "speculative and, in any event, reparable," the lawyers said, and they provided examples in which the penalties might not apply to the individuals. They could find insurance through employment between now and 2014, for instance, or may qualify for some of the available exemptions or subsidies under the law.
The second argument was broader and may indicate how the government will defend the law's constitutionality in other cases.
The administration said the individual mandate falls under Congress' authority granted by the Constitution to regulate interstate commerce and its power to tax and spend to provide for the general welfare of the United States.
Individuals who decide to forgo insurance still often receive treatment or utilize health services, shifting the cost of care to a third party--state and local governments, healthcare providers, insures, and the insured population. The administration said in its response that because this cost shifting affects people and companies in other states, the individual mandate provision is an exercise of Congress' authority over interstate commerce.
The debate over the individual mandate's constitutionality may make it all the way to the Supreme Court, through one of the dozens of other lawsuits if not the Michigan case. Seven more states have joined a lawsuit originally filed by Florida, bringing the total of state attorneys general challenging the new law up to 20, the Washington Post reports.
The state lawsuits may provide for more complicated arguments, as some states have passed laws prohibiting the individual mandate and others are considering constitutional amendments along the same lines.
In its brief, the administration defended the mandate as being essential to success of the overall reform effort.
"After decades of failed attempts, Congress enacted comprehensive healthcare reform to deal with this overwhelming national problem. The minimum coverage provision is vital to that comprehensive scheme. Enjoining it would thwart this reform and re-ignite the crisis that the elected branches of government acted to forestall."
The Partnership for Health in Aging—a coalition of more than 20 organizations representing eldercare professionals—released today a set of 23 geriatrics core competencies that it says all healthcare providers should have to better care for elderly patients.
The coalition developed the competencies in response to the Institute of Medicine's 2008 report Retooling for an Aging America: Building the Healthcare Workforce, which recommended that "licensure, certification, and maintenance of certification for healthcare professionals should include demonstration of competence in the care of older adults as a criterion."
Geriatric specialists are already in short supply and training more may not be feasible given the lack of interest and growing demands of an aging population. Some experts think training all doctors, dentists, nurses, physician therapists, social workers, and other providers in basic elder care may be the best way to prepare the nation for the "silver tsunami."
"The ultimate goal is to have universal geriatrics competencies that can enhance the capacity of the entire workforce in caring for older adults," said Todd Semla, MS, PharmD, who chairs the workgroup. The final competencies cover six domains:
Health promotion and safety. These competencies include promoting mental and physical health behaviors, assessing risks like falls and elder mistreatment, and recognizing evidence-based treatments for older adults.
Evaluation and assessment. Example competencies include, "Apply knowledge of the biological, physical, cognitive, psychological, and social changes commonly associated with aging," and, "Demonstrate knowledge of the signs and symptoms of delirium."
Care planning and coordination across the care spectrum. Emphasis was placed on ensuring person-centered and -directed care across the continuum, including end-of-life care.
Interdisciplinary and team care. The competencies encourage providers to refer to and consult with any of the multiple healthcare professionals who work with older adults and incorporate discipline-specific information into the overall care plan.
Caregiver support. The competencies call for providers to: "Assess caregiver knowledge and expectations of the impact of advanced age and disease on health needs," and take other steps to involve and work with caregivers.
Healthcare systems and benefits. One major challenge for providers would be to know how to assess and share with patients information about Medicare, Medicaid, Veterans' Services, Social Security, and other public programs.
The authors of the competencies intentionally left them broad, and expect each discipline to determine how to incorporate them into their training programs. However, the workgroup believes the competencies can apply to all entry-level professionals.
"There will be variations in how the competencies apply to each discipline, and each discipline will need to determine how the competencies will be utilized within their own curriculum development and credentialing processes. We see this as an iterative process as other disciplines build upon the work that we have started," said Semla.
The list was released today at the American Geriatrics Society's 2010 Annual Meeting.