Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.
Early last year in the healthcare reform debate, the public health insurance option was seen in various discussions as a way to improve the quality of medical care—while delivering it at lower cost. It could become a "nimble purchaser of healthcare"—getting more value for each healthcare dollar, according to House Energy and Commerce Committee description of the program.
Flash forward to now, and it has become apparent that a public option found in the House reform bill is only hanging by a thread—not very likely to find its way into the reconciled healthcare reform bill. So will achieving quality healthcare at lower cost still be possible? The answer is yes—in some areas.
This past weekend, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary gave some insights where efforts to improve quality could save costs in the long run. Here are a few examples:
Hospital-acquired infections. Beginning in 2015 under the Senate bill, Medicare could decline to pay hospitals for infections incurred by individuals in the facilities. During the first year when the rule would go into effect (2015), the amount projected to be saved on HAIs is $520 million—rising in 2019 to $750 million, and eventually saving $1.9 billion over the next decade.
Hospital readmissions. Last year, a study in the New England Journal of Medicine reported that one in five Medicare patients released from the hospital returned within 30 days for either the same or different reasons. According to the report, the estimated cost of unplanned hospital rehospitalizations in 2004 accounted for $17 billion of the $102 billion spent by Medicare for hospitalizations.
If implemented, a focus on hospital readmission reductions could save, beginning in 2013, approximately $540 million annually—rising to more than $1.6 billion annually in 2019. Over a 10-year period (between 2010 to 2019), that could amount to $8.2 billion saved by Medicare.
Physician Quality Reporting Initiative. In 2006, a law was passed that would establish a physician quality reporting system—including an incentive payment for eligible professionals who satisfactorily reported data on quality measures for covered professional services. PQRIs, as found in the current version of the Senate bill, could save $190 million in 2015—rising to $530 million annually by 2019.
Senate Democrats received some good news/bad news from two new studies issued by the Centers for Medicare and Medicaid Services (CMS) on the "Patient Protection and Affordable Care Act" passed by the Senate on Dec. 24.
First, a Jan. 8 memo from CMS Chief Actuary Richard Foster finds that an additional 34 million people would be covered by 2019 from proposed reforms in the Senate healthcare reform bill—up from the 31 million projected last month by the Congressional Budget Office (CBO). This increase is related to the net effect of several shifts, he said.
In particular, 18 million people would be able to obtain primary Medicaid coverage—at a cost of $882 billion (or just $11 billion more than the CBO projection)—through the expansion of eligibility to all legal adult residents under 133% of the federal poverty level. In addition, roughly 2 million individuals with employer-sponsored insurance would enroll in Medicaid for supplemental coverage.
Also, another 21 million individuals—most of who are currently uninsured—would receive individual insurance coverage through newly created exchanges. A majority of these individuals would qualify for premium and cost-sharing subsidies. At the same time, those individuals with employer-sponsored health insurance would decline by 4 million overall —reflecting both gains and losses under the Senate legislation.
In the other Jan. 8 memo, from Solomon Mussey, director of CMS' Medicare and Medicaid Costs Estimate Group, he said the net savings to Medicare Part A (hospital) trust fund would mean a longer life for the fund—from 2017 to 2027. This is the result of combination of lower Part A or hospital costs and higher tax revenues.
Approximately, 67% of those individuals who are eligible to purchase coverage through the new insurance exchanges will do so because they do not have access to affordable plans from their employers, Foster noted in his CMS memo. Among those who decide to remain uninsured, many will conclude that the penalties the legislation would impose for not carrying insurance were not "sufficiently large" to have an impact on their coverage decision. Those fees would climb to $750 per year for individuals by 2016 as proposed under the Senate bill.
Also, similar to the memo Foster issued last month on the Senate bill, he noted that a sustained reduction in payment updates could cause Medicare payment rates to grow more slowly than providers' costs of providing beneficiary services. Simulations by the Office of the Actuary suggest that hospitals and other Part A providers could become unprofitable within a 10-year projection period.
The new long term care insurance program in the bill, known as the Community Living Assistance Services and Supports (CLASS), which is included in the Senate bill, would create a net savings of $38 billion over the first 10 years. However, the program, which is voluntary, could create expenditures over the long-term that would exceed premium receipts. Adverse selection in the long run could end up making the program unsustainable, Foster said.
White House Council of Economic Advisers head Christina Romer, speaking Sunday on ABC's "This Week," sided with the report's findings on costs. "We feel very confident that...the Senate version of the bill would genuinely slow the growth of costs over the long run by about 1 percentage point a year, which may sound small, but it's actually enormous."
As Congress starts its work on reconciling the two healthcare reform bills, the American Hospital Association (AHA) said in a letter to lawmakers Thursday that it "strongly supports" keeping the level of coverage proposed in the House bill—96% of all individuals legally residing in the U.S. (as opposed to 94% projected in the Senate bill).
However, if that level of coverage cannot be offered, then hospitals' contribution to "financing healthcare reform in the form of payment cuts should be reduced," AHA wrote in the letter to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV). AHA is referring to its agreement last summer to give up about $155 billion in Medicare and Medicaid funding over the next decade to help the nation's uninsured.
In particular, shared responsibility of individuals and employers will "be critical in achieving coverage for all," AHA said in the 27-page letter. AHA urged the conferees to make certain that the final bill "balances a mandate" for individuals to obtain coverage with a strong requirement that employers continue to participate in providing healthcare coverage for their employees.
With the individual mandate, AHA said the House bill "holds the greater promise" by providing a "strong individual mandate" tied to 2.5% of modified adjusted gross income "with limits and appropriate exceptions for certain individuals."
In terms of a public insurance option, AHA is recommending that the conferees adopt the approach in the Senate bill that calls for creation of "state based, non public, nongovernmental healthcare co operatives and non public, multistate health plans." These alternatives offer "the needed opportunities for more affordable health plans while preserving market based approaches with negotiated provider rates," AHA said.
The creation of a public option to compete in an insurance exchange to individuals and businesses could put "tremendous pressure on provider payment rates"—even if the plan paid negotiated rates as proposed in the House bill.
This would "only exacerbate the underpayment of hospitals" by Medicare and Medicaid, AHA said. In 2008 alone, the combined underpayment for the hospital services provided to Medicare and Medicaid beneficiaries was $32.4 billion in 2008—which comes at a time when hospitals are being asked to do more, AHA noted.
Among the other areas that AHA commented on are:
Support for the creation of health insurance exchanges—as proposed in both bills—for assisting consumers in selecting and purchasing health plans that fit their needs.
Support for the adoption of the House provision that partially repeals the exemption from the antitrust laws established under the McCarran Ferguson Act for health and medical malpractice insurers. (This is not included in the Senate bill.)
Promote efforts by conferees to increase hospital price transparency while maintaining the "proprietary nature" of service payments negotiated between hospitals and insurers. This could be achieved in part through a medical reimbursement data center that is proposed in the Senate bill.
Support for adoption of the Senate healthcare reform proposal to expand Medicaid eligibility to those at or below 133% of the poverty level, as opposed to the House proposal that expands Medicaid to those up to 150% of the poverty level.
Urge the conferees to accept a combination of Senate and House approaches with respect to Medicaid disproportionate share hospital payment reductions. In particular, AHA is urging conferees to use the later date of 2017 (found in the House bill) to begin DSH reductions.
Support for the House approach to terminate the Children's Health Insurance Program in 2013—the first year of the health insurance exchanges.
Urge the conferees to "minimize the hospital market-basket reductions" in 2010 through 2013—unless coverage is extended in those years.
Oppose the creation of any new advisory board that would make binding recommendations on Medicare payment policy.
Support the creation of a new Center for Medicare and Medicaid Innovation Center to test models and expand those ideas that are most promising. However, AHA said, any participation should be on a voluntary basis.
Before leaving the White House following a meeting with President Obama on Wednesday, House Speaker Nancy Pelosi (D-CA) said at a briefing that there was "so much area of agreement" between the House and Senate healthcare reform bills. "I'd prefer to focus on that," she said. "The truth is that there is so much agreement in the bills, but sometimes we approach the issue differently."
House Democrats, who will officially reconvene next Tuesday in Washington following a four-week winter break, may not be so complacent about the areas of disagreement. With the Senate just squeezing out the 60 needed votes to advance its healthcare reform bill, many observers have been predicting that the Senate bill provisions will predominate in the reconciliation discussions.
However, 100-plus House Democrats, meeting through a caucus-wide telephone conference call on Thursday, are showing concerns about those particular items of disagreement in the bills that will have to be ironed out. While the public insurance option is expected to generate controversy—the House bill has a public option while the Senate does not—there are other sticking points arising that may take time to reconcile.
Here are several of them:
The "Cadillac" plan. In the bill (HR 3590) approved by the Senate Dec. 24, the so-called Cadillac plan, which would tax higher cost health plans, remained. The provision calls for a 40% tax for employer sponsored health coverage that exceeds $8,500 a year for individuals and $23,000 for families. The provision has received strong opposition from labor groups because numerous members had chosen higher cost plans over pay raises over the years.
The tax supporters have been pointing out that employers and employees would shift to less generous plans to avoid the tax—making patients more sensitive to costs and healthcare spending. But this is an argument that many House members are not buying at this time.
Rep. Joe Courtney (D-CT) has already gotten 190 other House Democrats to sign a letter that says they oppose the tax. During the caucus call, Reps. Peter Fazio (D-OR) and Carol Shea-Porter (D-NH) strongly expressed their disagreement with the plan to tax higher cost plans.
Insurance exchanges. The Senate bill calls for state exchanges whereby individuals could seek insurance coverage. However, the House—led by Rep. Henry Waxman (D-CA), chair of the House Energy and Commerce Committee—is advocating for a more uniform nation insurance exchange, which is called for in the House bill.
In addition, House members have been calling for tougher employer penalties for those who do not offer insurance. Under the House bill (HR 3962), large employers would be required to pay 8% of payroll into a health insurance exchange trust fund. In the Senate bill, though, those companies with 50 or more full time employees would pay $750 per employee if at least one employee obtains subsidized coverage through the exchange.
Financial assistance. Democrats in the House are expected to press for increased subsidies to obtain insurance for those lower income Americans who don't qualify for Medicaid. Currently, for individuals with low or moderate incomes above the poverty level, premium contributions are capped at no more than 1.5% of income, up through 400% of income. Under the Senate bill, families above the poverty level would contribute no more than 2% of income.
The Government Accountability Office (GAO), after reviewing credentialing, privileging, and performance monitoring procedures at several Department of Veterans Affairs (VA) medical centers, has called for several areas of improvement among those facilities.
GAO's interest began when seven out of 180 patients died—a rate that was far greater than expected—between October 2006 and March 2007 at a VA medical center in Marion, IL. This prompted an investigation by the VA Office of Inspector General (OIG), which later issued a report that identified numerous deficiencies related to credentialing, privileging, and monitoring surgical care.
At the time, the VA OIG found many instances in which physicians had privileges to perform procedures without evidence of competence to perform the procedures, and that the surgical program was expanded to include complex surgical procedures—even though sufficient clinical support services, such as 24 hour respiratory therapy, pharmacy, and radiology, were not available at the medical center.
Based on these events, questions were raised about physician credentialing and privileging processes at other VA facilities and whether they were performing surgical procedures backed by clinical support services. The VA OIG recommended that VA make improvements and policy changes related to these processes, and implement an oversight mechanism to ensure that appropriate clinical support services are available for all surgical procedures.
To find out if changes were being implemented, GAO visited six VA medical centers across the country. It interviewed chief medical officers and reviewed physician files—looking for evidence of omissions by physician applicants related to medical licenses, malpractice, and gaps in background greater than 30 days, according to GAO.
GAO found that the problems at the six facilities did not mirror the extent of the problems reported by investigators at the Marion VA Medical Center. However, GAO added that the staff at the six facilities did not consistently follow VA's credentialing and privileging policy requirements selected for review.
As an example, GAO found that 29 of the 180 credentialing and privileging files reviewed lacked proper verification of state medical licensure. Also, the medical centers did not identify instances when physicians appeared to have omitted required information on their applications: For instance, GAO identified 21 files where physicians did not disclose required malpractice information, which the facilities did not detect.
GAO also found that the VA policies often lacked sufficient internal controls—such as specifying how compliance should be assessed—to identify and correct problems with the medical centers' noncompliance with credentialing and privileging policies.
To address these areas, GAO calls for better oversight by recommending that the Secretary of Veterans Affairs direct the Undersecretary for Health to take the following actions:
Require development of a formal oversight process that reviews credentialing and privileging files and the information used to support reprivileging of physicians. This oversight process should include feedback to VA medical center officials about the proper use of legally protected performance information—if necessary, GAO said.
Update VetPro, VA's Web based credentialing database, to more effectively display physician credentialing information. Specifically, the VA should simplify and clarify questions related to malpractice and licensure, GAO added.
Collect more information about the state medical boards' policies on the release of information.
Many people talk about value, but—even though many examples exist of achieving good healthcare value—the momentum is slowed because the efforts often seem scattershot.
However, an Institute of Medicine (IOM) roundtable made up of influential figures in various sectors of American healthcare has come up with suggestions on how to get everyone on the same page to achieve value.
The roundtable, chaired by then-Mayo President and CEO Denis Cortese, MD, met in late 2008 in a workshop in Washington, DC. Their observations and opinions are included in a new IOM book released last month called Value in Health Care: Accounting for Cost, Quality, Safety, Outcomes, and Innovation. Here are some of the common themes they addressed:
Perceptions.Value means different things to different stakeholders, so clarity of concepts is key. The roundtable participants noted that for patients, perceived value in healthcare is often described in terms of the quality of their relationship with their physicians. For patients, value improvement may mean helping them better meet personal goals or living lives that are as normal as possible.
Overall, more services or more expensive services are not necessarily needed since patients are more likely driven by sensitivity to the value of time and ensuring that out of pocket payments are targeted to their goals.
On the flip side, clinicians and providers saw value as diagnostic and treatment approaches that "increased confidence in the effectiveness of services offered." And employers viewed value improvement in terms of keeping workers and their families healthier and more productive at lower costs.
For health insurers, value improvement was described as emphasizing interventions that are "crisply defined" and supported by "a high level of evidence as to effectiveness and efficiency." Health product innovators spoke of value improvement as a product that is better for an individual patient, more profitable, and contributes to "product differentiation and innovation."
Gain.Improving value requires reliable information, sound decision principles, and appropriate incentives. With reliable information as the starting point, the roundtable underscored the importance of adequate investment in transparency and continuous improvement regarding "safety, efficacy, effectiveness, and comparative effectiveness of interventions."
Action to improve value, therefore, requires the fashioning and use of "sound decision principles tailored to the circumstances and adequate incentives to promote the desired outcome."
Urgency:The urgency to achieve greater value from healthcare is clear and compelling. Increasing healthcare costs consistently outpace inflation—the participants agreed—squeezing out employer coverage, adding to the uninsured, and doubling out of pocket payments without commensurate health improvements. They heard that perhaps one third to one half of health expenditures were unnecessary for targeted health outcomes.
Decisions:Sound decision principles are rooted in issues specific to the patient, the evidence, the social context, transparency, and learning. Decision rules often seem to many stakeholders to be "vague, inconsistent, and poorly tailored to the evidence." The roundtable participants contended that success in tailoring decisions to circumstances lies with an adequate evidence base, and with the reliability and availability of information on costs and outcomes.
Incentives.Incentives should direct attention and rewards to outcomes, quality, and cost. Roundtable participants said that the rewards and incentives prevalent in the American healthcare system were poorly aligned to effectiveness and efficiency. They discussed how the current system encouraged care that was procedure and specialty intensive—discouraging primary care and prevention.
Limits.Value may be inversely related to the level of system fragmentation. Participants suggested that moving to value driven healthcare will require "broad organizational, financial, and cultural changes" that are not likely to be attainable with the current level of fragmentation in healthcare decision making.
Communication.System level value improvement requires more seamless communication among participants. The roundtable participants noted the existence of "significant communication gaps" among individuals involved in the care delivery process.
For instance, patients and providers were determined not to communicate well with each other about diagnosis and treatment options or cost implications. This is in part, they said, because of "complex administrative and rapidly changing knowledge environments" where necessary information was not readily available to either party.
Communication—by either voice or electronic means—was often "virtually absent" among multiple providers and provider systems for a single patient. This increased the prospect of service gaps, duplications, confusion, and harm, according to the participants. Also, communication among the many groups involved in developing evidence—and the practitioners applying it—was often "unstructured and may be conflicting."
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The Department of Veterans Affairs (VA) and Kaiser Permanente have launched a pilot project in the San Diego area that they say will let them exchange—with a patient's permission—electronic health record data about health issues, medications, and allergies for the first time.
The project announced Wednesday is using the Nationwide Health Information Network (NHIN), which provides a technological gateway to support interoperability standards and permits the secure exchange of health information between treating physicians, when authorized by a patient. Led by the Department of Health and Human Services, the NHIN will let providers from participating organizations send data around-the-clock in a secure fashion.
"Today it takes weeks when a patient comes in and says, 'I've had care in another institution and I'd like you to see a doctor so you can take care of me.' They have to go through a laborious and onerous process of requesting those records, signing for them, mailing them, and having them copied on paper," said John Mattison, MD, assistant medical director and chief medical information officer at Kaiser Permanente Southern California.
"What we have achieved with this pilot is that [the] process of taking weeks to get paper records now occurs in seconds. The net affect is clearly an improvement in quality, increase in patient safety, and a tremendous improvement in efficiency of how we share information," he said at a briefing Wednesday.
Using the NHIN construct will ensure that the "same infrastructure and set of operability standards are available to anyone and everyone across the country who wants to participate," Mattison added. "We're committed to enabling others in joining in."
The NHIN isn't a system "so much as a set of standards and protocols for the exchange of health information—it will allow for the exchange of administrative data," said Stephen Ondra, MD, VA’s senior policy advisor for health affairs. "That's important because by linking ourselves with standards, we're not tied to any single system." The use of the NHIM eventually will permit the private sector "to develop more choices."
An estimated three out of four veterans currently receive a portion of their care in the private sector, Ondra said. "To take care of those patients, we really need to have the visibility to share with each other what each of us provides to those patients—to understand conditions and to understand what treatments they've had, what medications, what allergies."
The new pilot program connects VA's VistA (Veterans Affairs Health Information Systems and Technology Architecture) and Kaiser Permanente HealthConnect. VA beneficiaries and Kaiser Permanente members in the San Diego area are the first to be offered the opportunity to sign up for the pilot—with the understanding that their information would not be shared without their consent.
The program's next phase will add authorized data from the Department of Defense's healthcare system to this exchange in early 2010. The eventual goal of the program is to make it available to all veterans and service members nationwide.
The wheels of healthcare reform reconciliation began to turn this week with closed-door discussions among House leadership.
House Speaker Nancy Pelosi (D-CA), appearing with House Democratic healthcare leaders during a briefing break on Tuesday afternoon, was upbeat about the process.
"We are optimistic that there's much that we have in common with both of our bills and that we will reconcile the legislation in a way that [has] a 'triple A' rating: affordability for the middle class, accountability for the insurance companies, and accessibility to many more people in the country to quality, affordable healthcare," Pelosi said.
However, Pelosi appeared to indicate that the House would not automatically roll over and just approve what the Senate advocates in its bill. One of the areas where both bills differ is the inclusion of the controversial public option—or what Pelosi views it as "the public's option"—where insurance companies would be held accountable for their actions, she said.
"There are other ways to do it, and we look forward to those discussions. But unless we hold the insurance companies accountable, we will not be able to have the affordability for the middle class," she said.
The large question surrounding the reconciliation process is how much the American public will get to see. Despite a request last week from C-SPAN to broadcast the proceedings, the House and the Senate will likely be working behind closed doors or outside of the public view.
Saying she is not sure what "route they will take," Pelosi cited obstacles with outside special interests that were trying to stop the reconciliation process. "We will do what is necessary to pass the bill."
The White House is expected to take a more active role in the discussions than in the past on settling disputes. Missing from the picture, though, are Republicans from both chambers who have not been invited to ongoing discussions of the bills.
A gap appears to exist between policymakers' expectations of commercial electronic medical records (EMRs) in supporting care coordination and the way they are actually used by providers and clinicians in the healthcare environment, according to a new analysis by researchers at the Center for Studying Health System Change (HSC) in Washington, DC.
Current ambulatory care EMRs are designed to promote care coordination within a practice by making information available at the point of care. However, they actually appear less helpful for exchanging information across physician practices and care settings, according to the study, which was supported by the Commonwealth Fund. The study is published online in The Journal of General Internal Medicine.
While current commercial EMR design is driven by clinical documentation needs, the emphasis on documentation focuses on supporting billing rather than patient and provider needs related to clinical management, the researchers found. Overall, current fee for service reimbursement encourages EMR use to document billable events—such as office visits or procedures—and not care coordination, which is not a billable activity, they added.
Just promoting incentives to adopt EMRs as they currently exist—given the confines of the current payment system—could result in EMRs being designed primarily for billing purposes rather than for clinical relevance to patients and care coordinators, the researchers added.
"There's a real disconnect between policymakers' expectations that current commercial electronic medical records can improve care coordination and physicians' experiences with EMRs," said HSC Senior Researcher Ann S. O'Malley, MD, MPH, a coauthor of the study.
For the study, 60 respondents were interviewed, including: 52 physicians or staff from 26 practices with commercial ambulatory care EMRs in place for at least two years; chief medical officers at four EMR vendors; and four national thought leaders.
Other findings that emerged are:
EMRs are less able to support coordination between clinicians and settings in part due to their design and a lack of standardization of key data elements needed for information exchange.
EMRs' potential for facilitating coordination requires evolution of practice operational processes.
Management of information overflow from EMRs is a challenge for clinicians who believe current EMRs cannot adequately capture the medical decision making process or future care plans to support coordination.
Policymakers should place more emphasis on current health information technology policies to support how well tasks are coordinated, the researchers said. Also, payment reform policies should find ways to specifically "include capabilities that support coordination"—allowing for "interpractice data exchange and multiprovider clinical decision support."
The American College of Cardiology (ACC) has filed a complaint against Health and Human Services (HHS) Secretary Kathleen Sebelius in the U.S. District Court for the Southern District of Florida over "unlawfully adoption" of Medicare payment rates for cardiology services in 2010.
The complaint says that Sebelius—in her capacity as the HHS secretary—has based payment rates for cardiology services on the 2010 Medicare Physician Fee Schedule (MPFS) that uses an "invalid" physician practice information survey in "a manner that challenges access to care for patients," ACC said.
In the complaint, "defects exist" with the methodology and data used to develop the survey, which was used to base the cuts in Medicare reimbursement rates for cardiology, said ACC, which filed the complaint on Dec. 29.
This includes using a small number of cardiologists (55) to set reimbursement rates under Medicare for all cardiologists nationwide—when results from this group differed from other information that was available, said ACC. Also, it added that survey results were not in compliance with the federal regulations that "govern precision standards, transparency, and review."
"The process by which Medicare determined the reimbursement rates was deeply flawed. As a result, the 2010 Rule will levy cuts to cardiologist services by up to 40% and will deny critical cardiovascular care for millions of heart patients," said ACC CEO Jack Lewin, MD.
ACC said that according to its data, reimbursement cuts will result in three fourths of the nation's private cardiovascular practices cutting services and eliminating thousands of current staff. An upswing has been noted in cardiologists moving from private community practices to direct employment by hospitals.
"Already practices are closing their doors and their patients have nowhere to turn. Hospitals do not have the capacity or the specialized ability to absorb the influx of patients," said ACC President Albert Bove, MD.
In November, after the cuts were announced, the ACC launched a nationwide grassroots campaign to raise awareness of the issue. In late December, Rep. Charlie Gonzalez (D TX) introduced a bill with 55 bipartisan co sponsors to freeze cuts at the 2009 reimbursement levels. Sen. Bill Nelson (D FL) also is leading a sign on letter regarding the cuts in the Senate.
