Only about 17% of the nation's physicians are using computerized patient records, according to a government-sponsored survey published last year in The New England Journal of Medicine. That market failure is a principal target of the Obama administration’s plan: A main feature of the legislation calls for incentive payments of more than $40,000 spread over a few years for a physician who buys and uses electronic health records. A crucial bridge to success, according to experts, will be how local organizations help doctors in small offices adopt and use electronic records.
Almost every business in the country is feeling buffeted by the recession, but for health insurance companies the bleak economy is only part of the problem. The changing of the guard in Washington is an equal if not more dangerous threat, and together these forces could deal a body blow to a business model that was already teetering. Health plans are losing millions of members who say they can no longer afford their products. Some big employers are becoming increasingly frustrated about how much they spend on health benefits. Smaller ones are being crushed by ever-rising healthcare costs. In addition, the Republicans who pushed to expand the role of private players in the healthcare system have largely been replaced by Democrats who want to overhaul it.
More than 95 million high-tech scans are done each year, and medical imaging has ballooned into a $100-billion-a-year industry in the United States, with Medicare paying for $14 billion of that. But recent studies show that as many as 20% to 50% of the procedures should never have been done because their results did not help diagnose ailments or treat patients.
The Obama administration's move to rescind broad new job protections for health workers who refuse to provide care they find objectionable triggered an immediate political storm. The administration's plans unleashed a flood of heated reaction, with supporters praising the proposal as a crucial victory for women's health and reproductive rights, and opponents condemning it as a devastating setback for freedom of religion.
Kansas Gov. Kathleen Sebelius has never lost an election, something analysts attribute to cool competence, a lifelong education in politics, and a knack for reaching across the political divide. But Sebelius has been mostly frustrated in her attempts to expand healthcare coverage in Kansas. President Obama is scheduled to formally introduce her at a White House ceremony as his nominee for secretary of health and human services, putting Sebelius in the midst of the growing debate over revamping the nation's healthcare system.
The No. 1 trait people want in a leader is honesty. The No. 2 trait is the ability to look ahead, according to an ongoing project by the Harvard Business Review that's surveying thousands of workers worldwide. The project asked workers, "What do you look for and admire in a leader (defined as someone whose direction you would willingly follow)?" Then it asked, "What do you look for and admire in a colleague (defined as someone you'd like to have on your team)?" Seventy-two percent of respondents wanted a leader to be forward-looking, whereas only 27% looked for that characteristic in a colleague.
Results-oriented (includes goal- and data-driven, accountability)—8.09%
Given the number of healthcare institutions that are still struggling to improve quality, customer satisfaction, and the bottom line, one could argue that CEOs aren't really all that visionary. But perhaps the vision is there—it's the execution of that vision that's lacking.
Only 15.7% of CEOs rated their long-term planning as very strong, and 40% rated it as slightly strong, according to the HealthLeaders Media survey. Given the myriad outside factors that can impact healthcare institutions, it's understandable that long-term planning is hard to execute with any degree of accuracy. But that's one of the CEO's core responsibilities—to be looking ahead and asking, "What's new? What's next? What's better?" and then positioning their organization accordingly. CEOs need to ensure that every employee—security, housekeeping, business staff, and clinicians, etc.—understands the vision and, perhaps most importantly, their role in making that vision a reality.
One way CEOs can establish a shared vision is by explaining to staff members and physicians how they got that vision in the first place, says an article in the Harvard Business Review. The majority of the hospital staff doesn't read the same materials or attend the same conferences as the senior leadership team. So that motivating speech or presentation that helped inspire the CEO's vision is often not shared by the rest of the staff. CEOs should look for ways to include staff members in creating the goals and vision of the organization. Having a common understanding and view of the current external environment can also help senior executives align the organization around a shared vision of the future.
After all, what good is a vision, if it never takes hold?
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
Note: You can sign up to receive HealthLeaders Media Corner Office, a free weekly e-newsletter that reports on key management trends and strategies that affect healthcare CEOs and senior leaders.
President Obama's budget would make a down payment toward his goal of covering the uninsured, and he would pay for it in part by cutting federal payments to hospitals, insurance companies, and drug companies. He would also increase premiums charged to Medicare beneficiaries with higher incomes for prescription drug coverage. Obama said he would save $176 billion over 10 years by cutting Medicare payments to health insurance companies that provide comprehensive care to more than 10 million of the 44 million Medicare beneficiaries.
President Barack Obama on Thursday unveiled a $3.1 trillion budget that includes a reserve fund of $630 billion over 10 years for healthcare reform, financed in part by cutting waste and changing payment incentives for physicians, hospitals, and insurers.
One of the biggest reimbursement changes involves a switch to bundled payments for hospitalizations. Under the model, providers would receive a single bundled payment to cover both a hospital stay as well as care for the patient for 30 days after release. The change intends to reduce the 18% of hospitalizations that result from readmissions, and the administration claims it will save $26 billion of wasted money over 10 years, in part by reducing payments to hospitals that have high rates of readmission.
Physicians would also be affected by the bundled payment change, but the budget is generally less clear regarding physician reimbursement, stating only that the payment system will be reformed. Few details are provided, other than a general goal to create "better incentives for high-quality care rather than simply more care."
The administration says these payment changes that align incentives for quality and efficiency, combined with greater accountability, can save $316 billion over three years. Much of that could come from Medicare Advantage.
The budget proposal notes that the government pays Medicare Advantage plans 14% more than what it spends for traditional fee-for-service plans, and Obama plans to establish payments through a competitive bidding system, which would save more than $175 billion over 10 years.
Karen Ignagni, president and CEO of America's Health Insurance Plans, immediately denounced the budget plan, claiming it would cut benefits for seniors. "Unfortunately, this proposal would force seniors enrolled in Medicare Advantage to fund a disproportionate share of the costs to reform the health care system," Ignagni said. "A cut of this scale would jeopardize the health security of more than 10 million seniors enrolled in Medicare Advantage and would turn back the clock on innovative payment incentives to improve the quality of care that patients receive."
What the insurance industry sees as cutting benefits, however, the Obama administration views as waste reduction. The Government Accountability Office has labeled Medicare a "high risk" for fraud and abuse, and the budget includes funding to help identify excessive payments and correct problems.
The administration acknowledges that the $634 billion is only a "down payment," and that additional funds will be needed to achieve universal coverage. The budget comes just days after the Center for Medicare and Medicaid Services projected that national health spending will reach $4.4 trillion and comprise just over one-fifth of GDP by 2018.
John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
As General Motors, Chrysler, the autoworkers union, and the Obama administration enter negotiations and plot the future of the U.S. auto industry, one of the most delicate issues they face is what to do about the health benefits for retirees. The rising cost of healthcare is one of the key burdens confronting the companies as they try to avoid collapse, illustrating the drag that healthcare can exert on the U.S. economy.
Tens of thousands of Kaiser Permanente's California workers have signed a petition to leave United Healthcare Workers West and join the newly formed National Union of Healthcare Workers. The 50,000-employee bargaining unit is one of the largest among the nation's private-sector employers, and taking it over would be a significant coup for the NUHW. The group was created last month by former leaders of the UHW after the Oakland-based local was placed under trusteeship by its parent organization, the Service Employees International Union.
