Wisconsin was ranked first in the nation in overall healthcare quality in an annual report by the federal Agency for Healthcare Research and Quality. The state received the top ranking two years ago. It was ranked second in the country, behind Minnesota, last year. The Agency for Healthcare Research and Quality gives each state an overall score based on about 250 quality measures drawn from more than 30 sources.
The public option may be in danger of winding up in the healthcare reform scrapheap—next to Hillarycare.
House Speaker Nancy Pelosi said Thursday no health reform proposal will get a vote from the House without this essential main ingredient, but Senate Finance Committee's ranking Republican Charles Grassley, firmly stood his ground that his bipartisan committee is making "sure that there's no public option" in the final package.
In an interview on MSNBC Thursday, Grassley, whose bipartisan effort is key to a reform passage this year, said emphatically: "We don't need any more government into medicine. We got government into medicine through Medicare and Medicaid up to 45% right now and it hasn't been a good experiment from the standpoint of government price setting."
Instead, Grassley said he would rather that millions of low-income uninsured Americans have their health insurance premiums subsidized by the government so they can buy coverage through traditional means, a choice of insurance plans, or a cooperative.
Insurance companies, he said, would have to change their ways. "We're going to do it through the reform of the private insurance system," Grassley said.
Patients no longer will have to "wait until they get sick and go to the doctor because that's the most expensive form of medicine and we're going to be able to save money because of it," Grassley said with assurance. He added that the public option "shouldn't have been brought up in the first place."
A cooperative may be allowed to substitute for the so-called public plan, as long as "it isn't dominated by Washington and follows a traditional co-op plan," Grassley said.
Grassley said he is dead set against what most Democrats and the White House want, which is to get "the government more involved in the practice of medicine. They want to get a government bureaucrat between you and your doctor. And the power to tax of government is the power to destroy and it's unfair competition."
Against all this, even President Barack Obama may be starting to back off of the public option, which he had previously said was essential to health reform. His chief of staff, Rahm Emanuel, reportedly said Thursday that the public option is "not non-negotiable."
Meaning that now, a bipartisan plan may make it negotiable.
Support for public plan
There are still many who are just as insistent that a movement away from a government-run health program similar to Medicaid and Medicare, which would be made available to employees as well as the unemployed, is the only way to keep private health insurance plans in line.
Speaking before the annual meeting of America's Health Insurance Plans earlier this month, former Democratic presidential candidate Howard Dean said that without a public option, "I don't think health reform is worth doing."
Numerous left-leaning organizations, such as the Campaign for America's Future, argue that health reform without a public option would be virtually meaningless, and that 72% of Americans recently surveyed want a government-run plan similar to Medicare for people under 65 who have no other options.
Supporters of a public plan say that the option would allow workers to choose a public plan even if they have employer coverage, which may prompt better private insurance plans.
The theory is that private insurance plans might behave better, reinvest more money into the plans, and make their terms more understandable and functional for employers and members.
These pro-public plan groups for now are not speculating whether they have a plan B if the public plan is defeated. Tighter insurance industry regulation will not be nearly enough to appease them because it will take too long to implement and enforce, and may depend on state-by-state laws.
But others argue that a public option isn't needed and that the insurance industry can cover the uninsured as long as there are subsidies for poor Americans' healthcare.
"It's hard for me to believe that if (a public option) is not in the package, that the package is a failure," says Beth McGlynn Associate Director of Health for the Santa Monica, CA-based Rand Corp.
She says the public option is new to the debate and the Senate Finance Committee wasn't even considering the idea last year.
"People are posturing politically for what they want, and rhetoric is a piece of the posturing," she said. "The fact is, there are a number of steps forward or changes that could be made that could be considered successful reform without the presence of a public plan."
If there is no public plan, a huge question remains regarding how Congress intends to make sure that:
Insurance companies offer plans to everyone and don't stall or cherry pick
Everyone not otherwise covered is able to purchase a private plan or are insured through another program, such as a cooperative, Medicare, or Medicaid
"The real questions is whether Congress chooses to have those items be determined by voluntary compliance, which is what the (health insurance) industry is proposing, or whether Congress is going to choose to legislate that compliance and make it mandatory," she said.
But there's going to have to be some changes in the way private insurance companies do business, that's for sure. Health plans will have to stop denying health insurance to anyone with a pre-existing condition or even the hint of one.
America's Health Insurance Plan spokesman Robert Zierkelbach says private plans are willing to make many concessions. However, there would still be variations in plan pricing, based on the applicant's age, place of residence, family size, and benefit design, he said. "If you would want more protection, you would pay more for that," he says, similar to various options for property or automobile insurance.
At this point, insurance companies might be willing to make those adjustments in order to not have a public plan competing against them.
CMS released further information Wednesday on its RAC Web site letting healthcare providers know when they can expect RACs to begin auditing. The new "CMS RAC Review Phase-in Strategy," details different types of reviews and dates when CMS anticipates the reviews will begin in various areas of the country.
The new information is consistent with CMS' previous indications that some providers may begin to undergo automated review this month.
According to the CMS, the earliest possible dates for RAC reviews in yellow and green states are:
June 2009—Automated reviews of black and white issues
August or September 2009—Complex reviews for DRG validation
August or September 2009—Complex review for coding errors
Fiscal year 2010, which begins October 1, 2009—Complex reviews for durable medical equipment (DME) medical necessity
Calendar year 2010—Complex reviews for medical necessity
The earliest possible dates for reviews in blue states generally fall a bit later:
August 2009—Automated reviews of black and white issues
October or November 2009—Complex reviews for DRG validation
October or November 2009—Complex review for coding errors
Fiscal year 2010—Complex reviews for DME medical necessity
Calendar year 2010—Complex reviews for medical necessity
CMS also reaffirmed that before RACs actively begin auditing in a particular state, outreach educational sessions must occur in that area.
Although the schedule calls for automated reviews as early as this month, any issue a RAC reviews must be vetted through the CMS' "Issue Review Board." In addition, RACs must post the approved issues to their Web sites before the reviews can begin.
"Providers should check their RAC's Web site often for any newly approved issues for review to anticipate their vulnerability to reviews and take backs," says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc.
Even though CMS has delayed the rollout of certain types of complex reviews, providers shouldn't ease off on their RAC preparation activities.
"Use the time wisely to continue performing your own internal vulnerability audits and ensure that all of your policies and procedures are up-to-date. Consider this a little extra time to get your facility ready for those appeals," says Tanja Twist, MBA/HCM, director of patient financial services at Methodist Hospital of Southern California.
President Barack Obama received enthusiastic applause from a room full of doctors on June 15 when he acknowledged that they feel like they're "constantly looking over their shoulders for fear of lawsuits."
But the applause quickly died, and a smattering of boos were heard when the president warned the annual gathering of the American Medical Association in Chicago not to get "too excited yet."
"I understand some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That's a real issue," Obama said to applause. "Now, just hold on to your horses here, guys. I want to be honest with you. I'm not advocating caps on malpractice awards, which I personally believe can be unfair to people who've been wrongfully harmed."
As the air momentarily left the room, the president said a focus on patient safety, and evidence-based medicine would reduce incidences of malpractice more than award caps.
If anyone was expecting any sort of malpractice reform coming out of Washington as part of the healthcare reform proposal, the president's unstated message to the nation's largest physicians' organization was: Don't hold your breath.
Rep. Charles Boustany, R-LA, and a cardiovascular surgeon, says further proof that malpractice reform is not an issue in Congress this year is in the 852-page healthcare reform bill put forward by the House Democratic leadership.
"There is nothing in there about malpractice reform," says Boustany, the ranking Republican on the Oversight Subcommittee of House Ways and Means. "Democrats don't see it as a significant program. I had a conversation with a Democratic member of the House, who was also a lawyer, who told me he doesn't think it's a problem. That's pretty much the majority opinion on the Democratic side of the aisle."
Boustany says malpractice caps have worked in California, Texas, and his home state of Louisiana. But he says other cost-saving factors need to be considered.
"Even more importantly in looking at the whole issue of malpractice, you have a lot of potential for frivolous claims," he says. "Lawyers exchange letters, costs get run up into the thousands of dollars, or tens of thousands of dollars and then the case gets dropped because it's utterly frivolous. But that is an added cost that gets tacked onto the physicians' premiums each year. What you end up with is rising health insurance premiums as a result of that activity in addition to the occasional big judgment."
Rep. Jim Cooper, D-TN, disputes Boustany's claims that malpractice caps have worked. "Caps pretend that all human beings are the same, all pain and suffering is the same. In general, one-size-fits-all solutions are not good solutions," he says.
Instead, Cooper points to his home state of Tennessee, where physicians own their own malpractice insurance company. "That aligns incentives so the doctors self-police," he says. "They've done a good job of getting rid of bad doctors in Tennessee."
Cooper is also an advocate for "health courts" that would hear malpractice cases outside of "normal court litigation."
While pointing out that "the direct problem of malpractice is about 2% of healthcare costs," Cooper concedes that there are significant indirect costs attached to defensive medicine. "I've seen figures as high as $100 billion. That is a lot of money. I would accept that it is a real problem that needs a real solution," he says.
"What you also can't pretend isn't a problem" are the tens of thousands of preventable deaths each year in the United States that are due to medical errors, Cooper says.
Malpractice 'Bogey man'
Taylor Lincoln, research director of the Congress Watch division of Public Citizen, calls the notion that malpractice is a healthcare cost driver a "bogey man."
"This idea that healthcare costs are somehow medical malpractice is a driver of healthcare costs is completely false. There is just plain no evidence," he says.
"If you take the most inclusive broad-based read, which would be the liability insurance payments by doctors and hospitals, including their payouts, litigation costs, paying insurance company overheads, malpractice is 0.7% of all medical costs in the country," he says. "Medical malpractice payments, correcting for the CPI, have fallen for about five years in a row and yet medical provision costs, the costs of providing care in America, has continued to gallop forward at about twice the rate of inflation."
Lincoln says the more plausible explanation for the rise in healthcare costs is the financial incentive physicians get for ordering and providing more medical procedures.
He says advocates for malpractice reform ignore Institute of Medicine estimates that as many as 98,000 people die each year because of preventable medical errors. "Nobody disputes this. Hospital and medical care are extremely unsafe. Whether it is the fault of the systems or individual physicians, it's just way too unsafe," he says.
"So, to believe this defensive medicine argument, you have to believe that in the same universe you have an incredibly unsafe medical environment where way too many errors occur, with the exception of vigilance for ordering tests, in which case these doctors through no personal motivation of enrichment happen to be incredibly conscientious and vigilant," he says.
Boustany disagrees. He says healthcare reform won't work unless the federal government addresses expensive and pervasive defensive medicine. "The issue of malpractice is real. It adds significant costs to the healthcare equation, and it has to be addressed," he says.
"You can talk to physicians and you will find unanimously across the board that no matter how much they are focused on trying to practice good medicine and doing things by the book, if there is uncertainty, they will order additional tests," he adds.
When it comes to surviving Recovery Audit Contractors, effective physician advisors can be a "saving grace," according to Elizabeth Lamkin, CEO of Hilton Head Regional Hospital, a Tenet hospital in South Carolina.
Lamkin spoke at the recent Healthcare Financial Management Association's annual conference in Seattle last week.
An ineffective program, however, just won't do.
For example, you may be able to overturn denials without a strong physician advisor program, but at what cost? The American Hospital Association places the cost of managing a Medicare denial at about $2,000 per denial, while the reimbursement for the commonly denied chest pain admission is approximately $3,000, according to Joe Zebrowitz, MD, executive vice president for Executive Health Resources.
"You lose as soon as Medicare denies your claim," he says. "It's not enough to be right. You have to be so right that nobody questions you. Because once you are questioned, once you start getting denials, you may win [appeals], but it is a Pyrrhic victory. You may have won the battle, but you've really lost the war."
Trying to ensure you meet medical necessity requirements without physician advisor review is risky. If a first-level review via Interqual or Milliman, for example, doesn't certify a patient as an inpatient, you need a second-level review by a physician to determine status, says Zebrowitz.
This is a best practice, according to the Medicare regulations, the hospital payment monitoring program workbook, and the screening criteria themselves.
And don't forget to document this second-level review process, because if Medicare sees evidence of a compliant process when they audit, they are far less likely to issue a denial, says Zebrowitz. "[Medicare] knows the likelihood that the denial will be upheld in an appeal is very low."
Zebrowitz believes the keys to an effective program are fourfold. You need:
A team
Training
Content
A QA process
You need a team of physicians, because physicians have different strengths and competencies. You need someone trained in Medicare rules and regulations, someone experienced in managing appeals, someone trained in utilization management, and someone who understands hospital compliance, to name a few.
A QA process is necessary to ensure your medical decision-making is consistent. And you need to provide your physicians with access to content—"Your silver bullet," says Zebrowitz—including your local standard of care, literature-based, evidence-based consensus standards.
Take a look around your hospital, and you've probably noticed quite a few new faces.
Orientation for new residents and fellows typically occurs during the last few weeks of June. During orientation, trainees get acquainted with your hospital's policies and procedures as well as an overview of the education they will receive.
But the look of graduate medical education is on the cusp of change. Graduate medical educators in all specialties got a glimpse of the future of residency and fellowship education when the Accreditation Council for Graduate Medical Education (ACGME) and the American Board of Internal Medicine (ABIM) released a draft of the milestone framework for internal medicine on behalf of the internal medicine milestones taskforce.
These are the first milestones for any specialty to be released, but task forces are developing milestones for pediatrics and general surgery as well.
"This is a step forward to advance a plan for developing competency-based education and training," says William Iobst, MD, director of education at the ABIM, who lead the facilitation of the milestones effort.
The draft framework, Developmental Milestones for Internal Medicine Residency Training, lays out a progression of competency residents should follow for each of the ACGME's six core competencies, which residents must meet in order to graduate. The milestones set forth specific behavioral anchors for each competency and a timeframe in which residents should achieve proficiency in that area, Iobst says.
"You should be able to tell a very precise story about where the resident is in his or her training," Iobst says. "The milestones will also allow residents to understand what is expected of them and how they're progressing along that road to competence."
The milestones will also strengthen the validity of trainee evaluation data. With every resident in a particular specialty being graded against the same standard, there can be more meaningful data collection across all specialties. Program directors can use comparative data to identify the strengths and weaknesses in their educational curriculum and make the appropriate adjustments.
As the milestone project is an ACGME-initiative, one must assume that it will be factored into the accreditation process in some way. However, exactly how is unknown.
The ACGME and milestones task force call on faculty, program directors, coordinators, and other stakeholders to provide their feedback on the milestones via a survey located on the ABIM's Web site.
Major organizations will also be asked to comment on the milestones. After feedback is gathered and reviewed by the task force, the group will continue to refine the framework. Eventually the milestones will be pilot tested for a few years before it's rolled out to all internal medicine programs, Iobst says.
President Barack Obama has made healthcare reform his administration's top priority, and now Congress is working to meet that goal. The task is proving to be even more difficult than originally expected: Trying to protect the business side for providers and the insurance industry while providing coverage for all Americans are among the biggest obstacles. Follow HealthLeaders Media and HCPro, Inc. as we provide up-to-date coverage on the federal government's health reform efforts.
Paul Keckley, executive director of Deloitte's Center for Health Solutions, talks about the latest developments in healthcare reform and how they might affect your organization in the near future.
While there is almost universal agreement on the need to transform our nation's healthcare system, few stakeholders agree on specific solutions. From pundits to politicians, everyone has recommendations on to how to fix healthcare, including expansion of access, increased individual responsibility, more competition, less competition, more government control or less government control.
One area of growing consensus, however, is that the information technology infrastructure underlying our healthcare system is woefully inadequate to the task of transformation. Evidence of this recognition was recently reinforced by the Obama White House and its inclusion of expanded funding for electronic medical records as part of the economic stimulus package.
In any case, healthcare transformation will require new models for sourcing, processing and distributing richer, more complex data in ways that facilitate collaboration, real-time decision-making and hands-free automation. Numerous obstacles lie on the path to real-time digital collaboration, however, including healthcare claims clearinghouses that remain the dominant electronic conduit among providers and payers.
In a 2004 Harvard Business Review article, "Redefining Competition in Healthcare," renowned strategy expert Michael Porter and innovation expert Elizabeth Teisberg argue that with the right kind of competition "the healthcare system can achieve stunning gains in quality and efficiency." The authors argue that relevant information is key to any well-functioning competitive market but is all but absent in our current healthcare system.
Imagine how an information-driven healthcare system might look and feel. Not only would consumers be better equipped to make informed decisions, but those decisions could influence other aspects of their healthcare experience, such as the cost of services or adjustable rate premiums.
In this information-rich environment, coaching and advisory services firms would emerge to guide consumers faced with making critical care decisions. Physicians would prescribe treatments based on the latest protocols and the patient's up-to-date longitudinal health record.
During recent years, vendors have leveraged their experience and assets to provide enhanced cleansing and transformation services to help payers achieve regulatory compliance at a fraction of the cost of internal development. These economics proved favorable as clearinghouses maintained their dominant position of connecting hundreds of payers with thousands of providers who lacked sufficient technology and know how.
Challenges extend well beyond technology, however, because of a business model that incentivizes exclusive relationships and controls the flow of critically important information. This situation is incompatible with the demands of today's consumer-directed health plans, incentive-based reimbursement models and the retail revolution for providers.
Valuable lessons that could be applied to healthcare transformation can be learned from other industries that have undergone similarly disruptive digital transformations. The advent of the Internet, supported by expanded availability of broadband services, gave fuel to the dot-com revolution of the 1990s. We have every reason to expect the same is possible in healthcare if the roadblocks of funding and common standards can be overcome.
The healthcare industry can gain insights from an examination of the changing IT landscape and its ability to increase efficiency, enhance quality and empower people to take responsibility and make informed decisions for themselves and their families. Why is it that healthcare seems unable to follow new business models based on today's information technology?
For the most part, middleware-based integration methods have proven too complicated and expensive for even the most sophisticated enterprises. Instead, a strategy of integrating disparate touch points at the transaction level, independent of user interfaces and technology preferences, is much more practical.
To achieve anything close to an integrated e-health transaction will require healthcare "transaction integrators," a new class of IT professionals whose skills and domain expertise extend far beyond electronic data interchange, messaging and networking.
Healthcare transaction integrators will possess specialized knowledge of emerging technology, business, healthcare, financial and regulatory standards. The transaction integration model emphasizes automation of virtually every element of the patient encounter life cycle from verification of coverage through real time settlement. The healthcare transaction integrator must understand the context in which these domains can be meshed to facilitate new processes.
Transformation of our healthcare delivery and support systems is an economic and social necessity. Digitization offers wondrous opportunities for greater access to better quality, lower cost care. Delivering on the promises of a 21st century healthcare system will, however, require new thinking, expertise and business models that facilitate collaboration among all participants.
Barry Byrd is president of Secure EDI, a healthcare information technology company. He can be reached at bbyrd@secureedi.com .
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Based on what I've seen and heard lately, many hospital leaders are spending a lot of time and effort focusing on the goings-on in Washington surrounding healthcare reform. I understand. It's big, scary, and generates a lot of press coverage.
We're doing a lot of that ourselves here at HealthLeaders Media. It's easy to understand why.
It's important and when Congress gets involved in your industry to such a degree, it's only smart and right to pay attention and to try to influence your legislators about how the different healthcare reform plans will likely affect your business. Logic says that Congressional action on healthcare reform this year has the potential to dramatically remake your business landscape, and if you're able to read the tea leaves, you'll be in a much better position to deal with the fallout from any legislation that finally ends up passing.
But handicapping the multitude of proposals is a fool's errand. You can't plan based on scary bills that may get shot down later in the legislative process. So don't spend so much time wondering "what if?" that you become myopic to planning for a future that includes a greater focus on outcomes and cost, two variables which any legislation will surely try to influence. Focusing on possible healthcare reform outcomes can be myopic and detrimental to the long-term health of your organization. Perhaps that should be a surgeon general's warning for hospital leaders, but I digress.
Why? The specter of healthcare "reform" portends many outcomes for healthcare providers, and when you hear about all the plans seeking greater value from healthcare, you translate all of that rhetoric into decreasing margins, tighter capital constriction, and closer scrutiny about your business practices. Your job is about to become more challenging. That's a fact. But allowing yourself, and by extension, your organization, to be whipped back and forth by the daily play-by-play about competing healthcare reform plans is a prescription for a headache, and it's a recipe for short-term, reactionary planning that won't yield the kind of results you're looking for.
Instead, perhaps it's better to focus on broad themes that will likely work in a reformed healthcare landscape and will serve your organization well regardless of what the final healthcare reform bill looks like.
Inpatient care is likely to become less lucrative, so focus less on big-ticket procedures. Perhaps centers of excellence should morph to allow closer integration with rehabilitation and wellness services that get your brand in front of the patient earlier in their lives, when you have a healthier patient whom you can influence in a variety of revenue-generating ways. After all, even healthy people end up in the hospital eventually. Get in front of them earlier, and they'll remember you.
Form or acquire wellness-oriented services and develop closer contractual relationships with rehab providers. Focusing on continuity of care will help you stand out from the crowd regardless.
See how you can help local employers cut down on healthcare costs by helping their employees better their health. That's the kind of work that will be rewarded as employers see the impact this kind of work has on their premium costs.
Recruit as many primary care physicians as you can to staff your networks and care clinics. Many newly minted docs want to be hired anyway, and they will drive traffic to your high-margin services.
Those are just a few ideas that will set you up for future success, and might divert your attention from Congress's seemingly interminable debate. It's helped me avoid healthcare play-by-play overload. It might help you too. After all, if you're waiting Congress to pass a law before working on a viable strategic plan, you're reacting.
Leadership demands more.
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