Health and Human Services Secretary Kathleen Sebelius said Thursday that the federal government will delay for an unspecified time the implementation date for the ICD-10 diagnostic and procedural coding system.
In a media release Thursday afternoon, Sebelius said federal officials were acting on providers' concerns "about the administrative burdens they face in the years ahead. We are committing to work with the provider community to reexamine the pace at which HHS and the nation implement these important improvements to our health care system."
HHS said it will "announce a new compliance date moving forward."
ICD-10, which has been widely used in many other countries for years, was scheduled to replace ICD-9 in the United States in October 2011. During the 2008 public comment period providers asked for, and got , a delay until Oct. 1, 2013.
For the last several months, the American Medical Association and other provider groups have pressed the Obama Administration and Congress for another delay. Many providers say they would like to see the deadline extended by another two years.
Sue Bowman, director of Coding Policy and Compliance at the American Health Information Management Association, told HealthLeaders Media that the delay "raises concerns."
"The need to replace ICD-9 and go to a better coding system is still out there and hasn't gone away," Bowman says. "Actually, the need for high-quality healthcare data has gotten bigger now with meaningful use and payment reform and value-based purchasing and ACOs and all the other initiatives."
Bowman says delaying implementation of ICD-10 will delay all of the other benefits of better healthcare data. "Until we have a better coding system we can't really have a better healthcare system and achieve the goals of all of these other initiatives because they all pretty much come down to better data," she says.
Bowman says implementing ICD-10 alongside other looming initiatives such as bundled payments, electronic medical records, and accountable care organizations makes sense because "they all relate together."
"To separate them out and say 'this piece doesn't need to be done now' is somewhat shortsighted," she says. "They all link together and are interrelated in a way to promote value for healthcare both to improve the quality and costs. I don't think we are going to see the anticipated benefits of all of the other initiatives unless we move to a better coding system."
Tim Stettheimer, a Birmingham, AL-based Regional CIO for Ascension Health, told HealthLeaders Media that HHS's earlier decision to delay by 90 days the implementation of the 5010 HIPAA transaction standards signaled that federal officials understand the burdens hospitals face.
"The fiscal intermediaries for (Centers for Medicare and Medicaid Services), many of them are not even ready for 5010 and we have seen the impact on hospital cash because of delays and payers being unable to accept those federally mandated transaction standards," he says. "If we would have kept that ICD-10 implementation date in October it would have been considerably worse."
Stettheimer says payers also are having problems with the ICD-10 deadline.
"Our healthcare reimbursement environment is different from any other country. It is so convoluted," he says. "It is not tied to the diagnostic codes and if you change the codes you impact the whole reimbursement cycle within healthcare. It's not that the healthcare providers are standing alone and not being ready. It is the payers, all the insurance companies, the fiscal intermediaries that handle the transactions for CMS, all of these organizations, most of them aren't ready and would have a challenge getting ready."
ICD-10 implementation is further complicated, Stettheimer says, because there is no way to ease into it. "It is a little bit like a light switch. You go from ICD-9 to ICD-10 in a day," he says. "Because there is no way to not make it an instantaneous transition, the readiness and preparation and testing becomes that much more complex. We can't put just one hospital or unit up on ICD-10 and see how it goes."
Bowman says the "too-much-on-our-plate" excuse has been used before by providers to justify delays.
"There is never going to be a year when we don't have a lot on our plates," she says. "It is unfortunate that ICD-10 didn't get initiated several years ago ahead of these other things to set the foundation and the groundwork for these other initiatives. Of course the further it is delayed, what is going to come up that year?"
AMA President Peter W. Carmel, MD, issued a statement Thursday thanking Sebelius for her "swift response."
"The timing of the ICD-10 transition could not be worse for physicians as they are spending significant financial and administrative resources implementing electronic health records in their practices and trying to comply with multiple quality and health information technology programs that include penalties for noncompliance," Carmel said. "Burdens on physician practices need to be reduced—not created—as the nation's healthcare system undertakes significant payment and delivery reforms."
Bowman says providers should use their extended deadline to continue preparations for ICD-10. "This is a delay. It is not a stoppage of ICD-10. It's going to get done," she says. "Whatever work you get done will be done, so our message is don't stop the work you are doing."
It's no secret that, in general, rural healthcare providers lag behind their counterparts in urban and non-rural areas when it comes to the implementation of electronic medical records and other healthcare information technology.
The Office of the National Coordinator recently announced that only 9% of critical access hospitals had attested to meaningful use of EHR in 2011, compared with 16% of hospitals in non-rural settings. Frankly, neither statistic is worth bragging about. But the lagging achievement in critical-access hospitals points to some unique challenges that rural healthcare providers face.
Those challenges include a lack of access to capital funding, finding qualified staff and training, finding project partners, and surmounting the byzantine federal bureaucracy.
With that in mind, the Rural Assistance Center and the National Rural Health Resource Center have launched an online HIT toolkit for rural healthcare providers.
"It's freely available. All you have to do is go on line. The kit was designed to help rural providers navigate the federal resources that are available," Kristine Sande, program director at the Rural Assistance Center, told HealthLeaders Media.
"The federal government really is putting out a lot of resources related to HIT, but they are from multiple departments and agencies and bureaus and it can be really confusing to figure out where to go different information," Sande says.
"So, we are just trying to help find the resources, understand which agency does what related to HIT, and provide them with some resources related to things like planning and implementation that can help them get their HIT systems up and running and meet the meaningful use standards."
Sande says the tool kit will allow rural providers to:
Address challenges to find funding
Support community college training programs
Stay current on legislation affecting EHRs
Leverage federal resources for projects
The toolkit can guide rural providers in the planning, setup, implementation and operation of an HIT infrastructure. Providers may also find nearby training programs, funding support and management expertise. Those resources are divided into categories for easy access, Sande says.
Sally Buck, associate director of the National Rural Health Resource Center, says only about 70% of rural healthcare providers are now being served by the regional extension centers that are funded by the Office of the National Coordinator. Some of the remaining 30% of rural providers are fending for themselves. "It is taking longer for critical access hospitals and rural providers," she says.
Sande says the Rural Assistance Center and the federal government want to hear from providers who use the tool kit, which is now considered a pilot project. "We really want feedback to see if this resource is helpful to people and what would be useful to be added to the Web site tool kit to make it even better to meet the needs of rural providers," she says.
While providing a tool kit for rural providers likely will not solve the lagging attestation rates for meaningful use, it is at least an acknowledgement from the federal government that rural providers face unique challenges implementing EHRs. In that respect, this is an important step.
Signals that federal officials might "re-examine the pace" of next year's implementation dates for ICD-10 are bringing mostly favorable reactions from healthcare providers. [Update: delay has been confirmed.]
Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, told an American Medical Association conference in Washington, DC on Tuesday that the federal government was sympathetic to physicians' concerns about the Oct. 1, 2013 implementation date for the new standard of diagnostic classification.
"I'm committing today to work with you to reexamine the pace at which we implement ICD-10," Tavenner said as a room full of doctors applauded, according to a post from the Massachusetts Medical Society. "I want to work together to ensure that we implement ICD-10 in a way that (meets its) goals while recognizing your concerns."
Tavenner made no specific promises at the AMA event, but she said CMS may soon issue a statement on the topic in the coming days or weeks.
For months AMA and other physicians' associations have called for a delay of the implementation date, saying that the switch from the old ICD-9 system to the far more granular ICD-10 represents an unfunded mandate that could cost medical practices between $82,000 and $2.7 million to install.
In November, the AMA's house of delegates voted to "vigorously work to stop the implementation" of the "onerous" implementation of ICD-10."
Those financial pressures, AMA said, come as physicians are also coping with:
the switch to mandated electronic medical records;
confusion over the requirements—and legal status—of the Affordable Care Act;
the push for Accountable Care Organizations, patient-centered medical homes, bundled payments, and other new care and compensation models;
the unsettled status of Sustainable Growth Rate funding in the Medicare "doc fix"
AMA President-elect, Jeremy A. Lazarus, MD, said in a statement Tuesday that the nation's largest physicians' organization "welcomes the opportunity to discuss ICD-10 implementation, along with many overlapping regulatory requirements that are burdening physician practices."
"The AMA appreciates that Ms. Tavenner and the administration have heard our concerns and have recognized the significant challenges and burdens ICD-10 implementation will create on the practice of medicine, and that they are committed to reviewing the pace of implementation," Lazarus said.
Pam McNutt, CIO and senior vice president at Methodist Health System in Dallas, TX, told HealthLeaders Media that providers are simply overwhelmed by the federal mandates raining down on their heads.
"All of that is happening in the same timeframe and they are all interwoven. It really seems like it is almost too much, especially when you think about it from the physicians' perspective," McNutt says.
"There are so many physicians who we need to move along the path of getting on to electronic health records. Now we are adding this burden. Plus you hear about budget cuts that are going to affect physicians and hospitals reimbursements. So the timing just doesn't seem right to be piling on all of these initiatives."
McNutt says she believes the ICD-10 implementation should be delayed until 2015 "to give ACOs, bundled payment models, and Meaningful Use Stage 2, a chance to gel. To me that would be ideal."
However, Wendy Whittington, MD, CMO at Dallas-based HIT provider Anthelio Healthcare Solutions called any effort to delay ICD-10 implementation "a bad idea."
"How can organizations be good at strategic planning if the rules keep changing," Whittington says. "A lot of proponents of putting this off are citing the fact that we are all too busy with meaningful use to deal with ICD-10. I see that as exactly the reason why we should take the deadline seriously."
"When you are thoughtful about strategic planning and you do things the right way and not just to collect the incentives you may have already been incorporating where ICD-10 is going to fit into all of this," she says. "Really, what we are doing by changing the rules mid-game is punishing those who have been thoughtfully been thinking through how to do this."
The possibility of a delay also concerns leadership at the American Health Information Management Association. In a statement issued Tuesday, AHIMA's vice president for advocacy and policy, Dan Rode, said, "any delay in the transition preparation for ICD-10 will both increase actual costs and may diminish the value of other Health and Human Services programs, including Meaningful Use.”
For the most part, however, hospital CIOs who spoke with HealthLeaders Media say they support the delay.
Mike Smith, CIO at Lee Memorial Health System, in Fort Meyers, FL says healthcare providers and the federal government should have learned the lesson from the rush to implementation of the 5010 HIPAA transaction standards.
"I think if we just observe with the 5010 implementation that these changes can have long-lived and unintended consequences," Smith says. "The ICD-10 schedule was established before meaningful use was even a thought. We just have a lot of things compressed at one time. For the best interests of patient safety and trying to handle things in an orderly fashion, it would be best for the industry that it be delayed a bit. There are a lot of good things with ICD-10 but still if you try to do too much too fast you are going to have negative unintended consequences."
Randy McCleese, CIO at St. Claire Regional Medical Center in Morehead, KY says his hospital just isn't ready to make the switch. "ICD-10 definitely gives us a more granular approach that we need, but coming from a small rural hospital, we are just now putting the things in place that will allow us to get to that depth of detail," McCleese says. "I'd like to see it delayed two years. That would help tremendously."
Robert Tennant, senior policy advisor with Medical Group Management Association, says the problem isn't the implementation date, but the implementation process.
"It's not a question of pushing it back a year or two. It's the process itself. We have gone through this before with HIPAA 4010, and now 5010. There has to be a better way," he says.
"We have been consistently over the years asking CMS to institute a pilot test to identify correctly what the benefits and the costs will be to the industry, especially to physician practices, to identify an intelligent pathway forward for any change, and to recognize that this might require some financial assistance for physician practices," Tennant said.
"And we have consistently said that we should not move forward with ICD-10 until 5010 was fully in place. The 5010 process has not gone particularly well. They are already in contingency mode and 5010 is a tiny percentage of the challenge that physician practices will face moving to ICD-10."
McNutt and Smith say that finding and training ICD-10 coders may prove to be the biggest hurdle for providers in a compressed timeframe.
"The medical records coder implementations are significant. It's not clear how significant, but you hear numbers like 25%-50% reduction in productivity," Smith says. "That means we are going to have to come up with a lot of coders in the next 18 months, not only training the ones you have on ICD-10 but additional capacity. The longer we wait the better chance we will have for more advanced automated coding assist tools to help with that transition."
Whittington says that the AMA and other groups that want to delay the implementation date are using overheated rhetoric and motivated by "their own selfish interest and not the best interest of moving healthcare in the nation forward as a whole."
"Calling this an 'unfunded mandate' is a harsh statement because the rest of the developed world is already on ICD-10," she says. "We have known about this change for years. ICD-9 was designed in the 1970s. So it's not like this is an 'all of a sudden we have to do this' thing. It's moving to a system that will work better for us."
Not-for-profit hospitals average more than 11% of total expenses on benefits to their communities, according to a study sponsored by the American Hospital Association.
Beginning in 2009, the Internal Revenue Service required not-for-profit hospitals to file a Schedule H form to assess their community benefit. AHA hired Ernst & Young to collect and analyze the data from 571 not-for-profit hospitals.
The report found that free care, financial assistance and spending to fill gaps in Medicare underpayments average 5.7% of total hospital expenses. The report compared hospitals of similar size so that communities can better understand their hospitals’ benefit to their community. Other benefits included community health improvement programs, health research and education, and other subsidized services, the study found.
AHA President/CEO Rich Umbdenstock said in the report that Schedule H helps communities to better understand how they are served by their local hospitals.
"This means that a hospital that reported $100 million in total expenses to the IRS spent an average of more than $11 million on benefits to the community, nearly $6 million of which was directly devoted to patients in financial need," Umbdenstock said. "The AHA believes that communities themselves are in the best position to determine whether the benefits provided by their local hospitals match their needs."
Although AHA supports Schedule H, Umbdenstock said it has "limitations," and cannot substitute for direct community assessment. "The AHA believes that communities themselves are in the best position to determine whether the benefits provided by their local hospitals match their needs and aspirations," he said.
At an accelerating pace, the nation's health insurance companies are embracing the latest trend in care delivery: An ounce of prevention is worth a pound of cure.
Last month, WellPoint Inc. said it would increase payments to physicians who transition to patient-centered medical homes. Some observers believe the announcement by one of the nation's largest commercial health insurers, covering 34 million lives in affiliated plans, represents a seismic shift in the movement toward coordinated care and preventive medicine.
The plan calls for care management fees for primary care physicians, who could see fee increases of about 10% with incentives that could improve payments by as much as 50%.
And in another sign that the landscape is shifting, Horizon Blue Cross Blue Shield of New Jersey this month announced that it would fund a collaborative to train 200 nurses in the Garden State over the next two years as "population care coordinators."
Horizon Healthcare Innovations, a subsidiary of Horizon BCBSNJ, said the "first-of-its-kind initiative" is designed for nurses who work in primary care physicians' offices. The program uses curriculum developed in collaboration with Duke University School of Nursing and Rutgers College of Nursing.
The nurses who graduate from the 12-week program will work with primary care physicians, other care team members, and the patients themselves to coordinate follow-up care and create individualized health plans that empower and engage patients.
"This innovative leadership role for nurses is an example of how we are implementing the recommendations from the landmark report: the Institute of Medicine: 'Future of Nursing: Leading Change, Advancing Health' in New Jersey," Edna Cadmus, project director, and Clinical Professor at Rutgers College of Nursing, said in a media release announcing the project.
"Through this collaborative partnership we are working to shift care delivery from an illness model to one of keeping our citizens healthy, using nurses as the linchpin to analyzing data on high-risk patients and developing coordinated plans of care. These nurses are being given a unique leadership opportunity to contribute to pioneering this new model in the state," Cadmus said.
The first class of 37 population care coordinators began their studies last month. Most of the courses are delivered online and are supplemented by three "face-to-face sessions" on the Duke and Rutgers campuses. The nurses will also take part in a residency program that integrates their coursework and skills to provide a real world experience for their new roles as care coordinators.
The Horizon project courses will focus on:
Case management of patients with complex health conditions
Engagement and communication strategies with patients
Using databases, including disease registries and Electronic Medical Records
Coordinating care of "frequent flier" patients and discharged from care facilities
Implementing and managing change in healthcare organizations
Operations of a PCMH
Role of care coordinators in improving patient care and patient experience in a PCMH
The announcements from WellPoint and Horizon should be welcomed by anyone who cares about healthcare reform and the move toward the patient-centered medical home. If the commercial plans aren't on board, it's not going to work.
The initiatives also show that payers clearly understand that ongoing political dog fights and the court challenges to "ObamaCare" are just static. The plans know that regardless of who gets elected president, or who controls Congress, or which way the U.S. Supreme Court rules, there is no going back to the old fee-for-service model. It is simply too wasteful, and too unaffordable.
The plans are planting a stake on the future of healthcare and they're betting that primary care physicians and nurses will lead the way.
The more than 600 hospital leaders packed in a hotel ballroom at this week's 25th Annual Rural Health Care Leadership Conference in Phoenix were asked a simple question: How many of you have made contingencies plans for Medicare critical access funding cuts?
Only a few hands were raised.
The man asking the question, James E. Orlikoff, a senior consultant at the Center for Healthcare Governance, told HealthLeaders Media after the presentation that he was not surprised that so many rural hospitals leaders are in denial about a major funding cut that he calls "inevitable" within the next three years.
"That response is very typical. There is a level of denial that says 'we understand there has to be a lot of change but it won't affect us,'" Orlikoff says. "Upton Sinclair has a wonderful quote: 'It is difficult to get a man to understand something when his salary depends upon his not understanding it.' Critical access hospitals are carved out and they have been protected. It's the normal human condition to think that this is normal, this will always last, it can't go away because if it does, it will destroy us."
In times of economic woe, however, Orlikoff says standard operating procedure is often the first casualty. Outsized payments for critical access hospitals provide low-hanging fruit for a cash-strapped healthcare delivery system.
"Anytime you face an economic crunch when you have carve-out artificial protections, they can't last," he says. "Is it evitable? Yes. 'When' and 'how' are the questions. It could happen much more quickly than any of us think depending upon how bad the market gets, how bad the debt issues become. I think things are going to happen much more quickly. I tell my critical access hospitals to strategically plan on three years to be off the cost-plus model."
Orlikoff says the critical access funding cuts will likely come sequentially, rather than hit all at once. "Many critical access hospitals don't fit within the rules, so first they will be the first to lose their protected reimbursements. Then the cuts will migrate to all critical access hospitals, especially as other markets can show the efficiencies that can be taken."
In other words, if one critical access hospital can achieve savings and efficiencies with lower reimbursements, the government will assume that every other critical access hospital can do the same.
"Many of the leaders here are so embedded in that protective philosophy that they don't know what their finances are. They don't know how much inefficiency they have in the system. So when the time comes they are going to be paralyzed," Orlikoff explains. "If they start thinking about it now, maybe they can get ahead of the curve."
So what can critical access hospitals do to prepare? Rather than looking for a magic bullet, Orlikoff recommends a series of baby steps that begin with a simple question: "'If we're taken off the cost plus reimbursement and put on prospective payment system, what would happen to us? What is our percent cushion?'" Orlikoff says. "Assuming that is lost, the second question would be 'would we be able to stay in business?' For the vast majority the answer is 'no.'"
Start with understanding your current financial situation. "Most critical access hospitals have no idea about their economic performance or how dependent they are or whether they'll go out of business if the reimbursement model changes," Orlikoff says. "Or suppose they don't eliminate the reimbursement model but they cut it by 5%. Would you swing from the black to the red?"
"Understanding that leads to 'where do we tighten up? What is the most frequent Medicare diagnosis we treat in this hospital?' Let's look at the variation there," he says. "In that one or two most frequent things we do, if we standardize to the highest quality and the lowest cost how much would that save?'"
"When you see that, you begin to realize that if standardizing is the best practice, we would have spent X dollars less. Then the leadership gets it. And you do it again and do it again," he says.
Finding the savings through improved quality and efficiency, and reduced waste is "liberating," Orlikoff says, because hospital leaders will understand that it is possible to survive—and perhaps even thrive—in an era of reduced reimbursements.
Of course, none of this can happen unless hospital governing boards acknowledge the new economic forces that are driving healthcare reform, and realize that no funding is beyond the reach of budget cuts.
"Boards are buried by curvy information and details and they aren't asking the right questions," Orlikoff says. "As the models change the questions the leaders have to ask have to change. Many of these folks are thinking the right thing but they are sucked back into the morass of old model governance."
Rick Schooler, FCHIME is CIO and vice president at Orlando Health. He has been named the 2011 John E. Gall, Jr. CIO of the Year by the College of Healthcare Information Management Executives.
In an interview with HealthLeaders Media, Rick Schooler, 54, discussed his career and the prospects for information technology in healthcare over the next decade.
The lifetime achievement award is sponsored by the College of Healthcare Information Management Executives and the Healthcare Information and Management Systems Society. The boards for both organizations select the annual winner.
The honor recognizes health IT executives who have made significant contributions to their organization and demonstrated innovative leadership through effective use of technology. It is named for the late John E. Gall Jr., who pioneered implementation of the first fully integrated medical information system in the world at California's El Camino Hospital in the 1960s.
On receiving the John E. Gall Jr. award:
"I have not accomplished anything without a lot of good teammates, a lot of good colleagues, and a lot of good support. But the award is targeted to an individual and it reflects that you have been through the throes of healthcare IT. You have transformed healthcare organizations. You're recognized as an industry thought leader. I am on a list of very good folks. I am the 23rd recipient and I know 20 of the people who have received this award."
On the decision to make healthcare IT a career:
"I was a pre-med student and unfortunately was drawn to girls and parties. I realized after two years that I was going to have to take a lot of classes over again. I had a relative in 1978 who said there are going to be opportunities in data processing."
On the overall state of healthcare IT:
"It took me about two or three years working at my first organization, which is now Indiana University Health, to figure out this industry is woefully behind in the use of technology. My first healthcare mentor was my boss there, the CIO.
He said you have to slow down and be patient because we do things by consensus. We have a long way to go and it is going to take many years to get where we need to be. He said to me very clearly that 'healthcare needs to bring people like you in to our organizations.'"
On the overall state of healthcare IT workers:
"As an industry we have done a good job growing people to do this work. When I entered healthcare in 1991, most of the people on the IT side just didn't understand industrial computing. They were used to running billing systems and systems confined in a dumb terminals and green bar reporting.
They were still using punch cards. They were so far behind, even [at] a renowned health system like IU Health back then. I think we have done a good job in the last 20 years getting people in the pipeline. So we've done a good job on that side. On the pure technology side, we still need more help from the outside.
On the prospects for healthcare IT over the next decade:
It is going to take us five to 10 more years to fully enable accountable care. I'm talking about putting information throughout a care continuum at the fingertips of those who need it to support care while on the backside having the robust analytics capabilities that mirror other industries. To do that takes everything with regard to infrastructure, with back office systems, full-blown automation of EMRs, and automation of our core processes as a business.
I want to be able to look a back and say I left a mark on this industry when I can truly demonstrate that health information exchanges, analytics, population management capabilities for patient registries, and advanced data warehousing, those types of technologies are rock solid in place and being fed by solid operational support systems like electronic medical records and ancillary systems.
On the legacy of healthcare information technology of 2012:
"We will look back and see this time as the turning point where the industry, circa 2010-14, [came] to grips with the fact that reimbursements are only going to shift and it's only going to be tougher to contain costs and the people who pay for healthcare truly have had enough."
"From an industry perspective that is when people will realize we 'got it.' One key to making that happen is a robust reliable information infrastructure. It's an awakening that many of us have had going on for several years. But if you're looking at critical mass, particularly at community hospitals they are realizing 'I have to get a partner. I can't do it on my own.' This whole idea of managing populations, whether or not you believe a disease management program saves money, it won't matter because the people paying for healthcare eventually are going to say 'either you manage that population or I won't pay you.'"
Schooler will receive the award at the 2012 Annual HIMSS Conference and Exhibition in Las Vegas on Feb. 23.
Job growth in the healthcare sector for the first month of 2012 continued the robust pace that was set throughout 2011, new federal data shows.
The Bureau of Labor Statistics data reports that the healthcare sector created 30,900 jobs in January, including 12,900 jobs in ambulatory services, and 12,700 jobs in hospitals.
J.D. Kleinke, a fellow at the American Enterprise Institute, says healthcare job growth continues—in great part—because healthcare spending continues. He dismissed recent arguments suggesting that healthcare costs had declined. In fact, Kleinke says, the costs continue to grow but at a slower rate.
"I can tell you exactly what is going on. It's not that complicated. The healthcare economy is recession proof," Kleinke told HealthLeaders Media. "There is no reduction in healthcare costs. There is a reduction in the rate of growth. So, jobs are always going to get created in healthcare because healthcare costs are always going to go up."
"Increasing costs in healthcare is a sign of a society that is taking care of higher-order problems, like curing cancer, dealing with depression, or lifestyle—we want to look perfect and have perfect children," he says. "All of that stuff is inflationary. This country will never feel healthy enough. That's another reason why healthcare is recession proof."
Kleinke says healthcare inflation has slowed over the last decade in large part because healthcare consumers have gotten smarter as their premiums, co-pays, and deductibles have risen.
"Healthcare inflation used to be double-digit, 10%–12% while the rest of the economy grew at 3%–4%," he says. "We are seeing the 'Costcoing' of healthcare." Starting with 2001, people are not demanding less care, they're getting smarter about it. They're using generic drugs. They're going to nurse practitioners. They're going to urgent care instead of the emergency room. The nature of a lot of healthcare purchasing is changing because of high deductibles."
Revised BLS figures show that healthcare created 17,600 jobs in December, finishing a strong year for job growth that saw 291,300 payroll additions in 2011. Healthcare accounted for nearly one in five new jobs in the overall economy last year, Bureau of Labor Statistics data shows.
In 2011, ambulatory services, which include physicians' offices, accounted for 59% of the job growth in healthcare. The subsector created 7,500 jobs in December and 184,700 jobs in 2011, after creating 166,100 jobs in 2010.
"Where the growth is coming from is information technology," Kleinke says. "There are grants for that and huge initiatives to train people to install computer systems. That's a good thing. Hallelujah!"
BLS data from December and January are preliminary and may be revised considerably in the coming months.
More than 14.2 million people worked in the healthcare sector in January, with nearly 4.8 million of those jobs at hospitals, and more than 6.2 million jobs in ambulatory services, which includes more than 2.3 million jobs in physicians' offices.
The 30,900 jobs created in healthcare in January represent 12.7% of the 243,000 jobs created in the overall economy for the month. In 2011, the 291,300 jobs created by healthcare represented more than 18% of the 1.6 million jobs created in the overall economy that year.
In the larger economy, the nation's unemployment rate dropped for the fifth straight month in January, falling from 8.5% to 8.3%—its lowest level since early 2009. BLS said the 243,000 new jobs created in January came from the healthcare, manufacturing, and leisure and hospitality industries.
Even with the modest gains, BLS said 12.8 million people were unemployed in January. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, was little changed at 5.5 million in January, and represented 42.9% of the unemployed.
WellPoint Inc.'s plan to increase reimbursements for primary care physicians who transition to patient-centered medical homes could signal a tipping point in the move toward the new care management model.
That's according to Glen R. Stream, MD, a family physician from Spokane, WA, and the president of the 100,300-member American Academy of Family Physicians.
"It is a significant step in the right direction," Stream told HealthLeaders Media. "WellPoint is a large insurer and their program has some features that are very much in line with what the academy has been promoting for some time: to align the payment model to support the medical home model of delivering primary care."
Indianapolis-based WellPoint, with 34 million members in affiliated plans, announced last week that it would "increase revenue opportunities" for some primary care practices that participate in patient-centered primary care medical home model.
The plan calls for care management fees for primary care physicians, who could see fee increases of about 10% with incentives that could improve payments by as much as 50%. The Wall Street Journal reported that WellPoint now spends between 6% and 8% of its $100 billion in annual claims on primary care, but that the payout could increase by an additional two percentage points under the new model.
"Primary care physicians who are committed to expanding access, to coordinating care for their patients and being accountable for the quality of care and the health outcomes of those patients, will get paid more than they do today, and we're committed to helping them achieve these quality and cost goals," Harlan Levine, MD, WellPoint executive vice president, Comprehensive Health Solutions, said in a media release.
"Primary care is the foundation of medicine, and it can and should be the foundation of our members' health."
Levine said that WellPoint's medical home models have seen an 18% decrease in acute inpatient admissions and a 15% decrease in total ER visits, while also improving compliance with evidence-based treatment and preventative care guidelines.
The AAFP's Stream says WellPoint's announcement that it will pay for care management "sends a message to primary care physicians that there is an advantage for them to transform practices because payments will align with that," he says.
"We have had a bit of a chicken-and-egg problem with patient-centered medical homes," he says. "Physicians say 'pay us more we will transform the practice.' The plans say 'transform practice and we'll pay you more.' Our responsibility in the academy is to see that there are enough of these plans moving to this payment model in an assured way so we can communicate and assist our members in transforming."
Any move to pay for care management would also make primary care a more attractive field for medical students, Stream says. "It sends an important message to medical students that we are trying to get people to choose primary care specialties," he says. "We don't want them to have that financial barrier of their educational debt and the serious discrepancy between subspecialty and primary care pay to be a disincentive to choose primary care."
Stream says a number of initiatives announced over the last several months by the federal government and private payers indicate that the patient-centered medical home model may soon expands beyond pilot project status.
He notes that at the end of September the Center for Medicare & Medicaid Innovation announced a primary care initiative that includes a similar care management fee for Medicare and Medicaid patients in a half-dozen test markets.
"The idea in those five to seven pilot markets to get to at least 60% of their patients in the practice covered under that payment model, including the care management fee that supports the services that are part of the patient-centered medical home," he says. "I'm not sure how they came up with that 60% number but it seems like a reasonable tipping point to get the practice and enough of its payers aligned with that to make it meaningful."
But until more private payers across the nation are willing to embrace the patient-centered medical home concept within their networks, Stream says many primary care doctors will keep their distance.
"You have an issue if you are in a market where only 20% of your business is WellPoint," he says. "This is a great initiative but is 20% enough if 80% of your patients are still covered by more traditional fee-for-service payment that is not paying adequately in primary care? Is that going to be enough to make the transition?"
"This is all a step in the right direction, but it is not the be all and end all," he says. "The real issue how many other payers are going to be willing to do this? Can we get to that critical mass that gets us over the hump for individual practices having enough patients under this payment model that allows them to transform and maintain their practices?"
Did the lawyers and leaders at Integris Canadian Valley Regional Hospital in Yukon, OK believe they could convince a jury to dismiss a fraud lawsuit leveled against the hospital by country music icon Garth Brooks, a hometown hero trying to honor the memory of his mother?
A quick recap for those who've spent the last week traipsing on the dark side of Pluto: Brooks was awarded $1 million on Jan. 25 by a jury that determined that ICVRH reneged on a promise to name a women's health center after his late mother.
Colleen Brooks died of cancer in 1999.
After hearing tearful testimony from Brooks, the jury determined that ICVRH acted with "reckless disregard." They ordered the hospital to return the $500,000 Brooks donated to in 2005, and pay him another $500,000 in punitive damages, the maximum amount under state law.
Readers seeking further details are invited to Google "Garth Brooks," and "mother" and "law suit" and sort through about 78,600 search results.
ICVRH President James Moore claimed in testimony that Brooks donated the $500,000 with no strings attached, and that the singer later asked that the money be used for a women's health center bearing his mother's name. The hospital wanted the money for other projects.
Brooks told the jury that Moore suggested naming a women's center after Colleen Brooks. "I jumped all over it. It's my mom. My mom was pregnant as a teenager," Brooks testified, according to media accounts. "She had a rough start. She wanted to help every kid out there."
Good luck with the cross examination, counselor!
According to the Tulsa World, the nine-woman, three-man Rogers County jury determined that ICVRH acted "intentionally with malice toward others." That sentiment was likely swayed when Brooks's legal team introduced a March 2009 memo from Moore to ICVRH staff which stated that "We may not deny Garth access to the money. However, we can sure as hell make him work to get it back."
It's not clear what Moore was hoping to accomplish by prolonging the fight. Did he want a drawn out and public legal battle with a deep-pocketed, living legend?
Hospital executives—more than anyone—should be well aware of the dangers of presenting a jury with emotional testimony involving human suffering and loss. It is one reason why healthcare-related suits are so expensive, why these suits often destroy reputations, and why defense attorneys try mightily to avoid jury trials.
Brooks is rarely seen without his trademark broad-brimmed Stetson. However, juror Beverly Lacy saw ICVRH as the black hats. She told the World that she voted for the punitive damages because "we wanted to show them not to do that anymore to other people who couldn't take them to court if they needed to."
Lacy's comments suggest that Brooks's victory was also a win for the little guy, because ordinary people believe they have no chance against an institution. The jury identified with the multimillionaire, world-famous singer, and not with the 75-bed acute care hospital. Institutions have money, but country singers have mamas, and so do jurors.
At a press conference after the trial, Brooks called the panel "heroes." He said he was still looking for a way to honor Colleen.
"One day mom's name is going to go on the women's center right there where the hospital is. But that hospital won't be owned by Integris when it happens, I can tell you that. That's my dream."
Integris likely will not use that quote as a centerpiece for its next fundraising campaign.
This ill will could have been avoided. After all, Brooks was acting in good faith when he made the donation. ICVRH had years to resolve the issue behind closed doors in a way that would have made everyone happy, and which would have held the good graces of a very wealthy and influential donor.
A confidential resolution would have been vastly cheaper than the verdict and the mountains of bad publicity this has generated.
This was not a frivolous lawsuit. Brooks was not trying to game the system. It was clear to the jury that the singer believed he was honoring the memory of his mother. Frankly, $500,000 is chump change for a man who has sold more albums—89 million in the US alone—than any other individual in the history of recorded music. Whether or not he was in the right, legally, is almost irrelevant. Folks, he was fighting for his mama!
In the end, this suit became a question of who to believe: Moore or Brooks. The jury believed Brooks.
ICVRH has not said if it will appeal the verdict. They should listen to the jury.
