The Maryland health plan, 3,600 primary care providers-strong, says it has saved $136 million in projected healthcare costs over two years through its large-scale network of patient-centered medical homes.
CareFirst BlueCross Blue Shield, the giant Maryland insurer, says it has saved $136 million in projected healthcare costs over two years through its large-scale network of patient-centered medical homes.
More than one million members are served by the 3,600 primary care physicians and nurse practioners who have joined team-based panels to reduce healthcare costs and improve the quality of patient care. There are 297 PCP panels across Maryland, Virginia, and Washington, DC.
PCPs drive the program because they are in the position to best understand patient needs, explains Mike Sullivan, director of external/internal communications at CareFirst. He notes that the PCP is responsible for two of the most "value-laden decisions in healthcare:"
1. When to refer a patient for additional care, and
2. Where to refer a patient for additional care
Most of the CareFirst members in the program are chronically ill with diseases such as diabetes. PCPs develop care plans for these patients with the goal of keeping them from getting sicker and incurring additional healthcare costs.
For their efforts, physicians are guaranteed a 12% boost on top of CareFirst's existing fee schedule. If the insurer normally pays $100, PCMH doctors receive $112. And that is for just participating in the program.
About 66% of the PCP panels also earned outcome incentive awards, which are based on a combination of savings against projected member costs and performance on quality measures.
"The incentives are significant enough to get doctors to take notice," says Sullivan. On average, qualifying panels will see an increase in their reimbursement level of 29 percentage points in 2013.
Sullivan says CareFirst developed its PCMH program with the thought that it would take 3—5 years for the program to sustain success. In only the second year of the program, however, 75% of the panels receiving incentive awards were repeat performers from the first year, meaning their patients registered lower-than-expected total healthcare costs for two consecutive years.
That's a sure sign that the care management concept is taking root and can build on success.
Perhaps a more telling indication of the program's success is the comparison between one million patients in the PCMH and one million members who are not attributed to the program because they don't see a PCP, or their physician doesn't participate in the program, Sullivan says "we are beginning to see hospital admissions, hospital readmissions, and the average length of stay looking better for the members in PCMH compared to those who are not in the program."
In the future, Sullivan says CareFirst wants more of its physicians using the data support it provides, which includes a portal specifically for PCMH providers. The portal provides access to a member health record for each CareFirst member within the PCMH. "The portal allows physicians to see every bit of information that we have for that member," explains Sullivan.
"Even the best EHR operated by a stand-alone PCP only has a record of what that physician does. Our member health record includes every bit of claims-based medical information that we have. So if a patient get a prescription from another doctor, has an ER visit, or visits another provider, the PCHM doctor knows it. That's very useful information."
Through the portal physicians may also access the complete care plan tool to develop a longitudinal, ongoing record of everything that has been done to a patient as part of a care plan, including notes from other providers.
There is also the searchlight function, which provides a view of a panel's entire patient base to identify gaps in care or the areas where they are doing well.
"It's a rich benefit that doctors can mine to improve their performance," says Sullivan.
CareFirst recently announced the selection of several organizations to conduct comprehensive evaluations of its PCMH. A joint team from Harvard University, Brandeis University and the Massachusetts Institute of Technology was selected, along with a team from George Mason University.
The groups will conduct qualitative and quantitative analysis of the PCMH program. "We want that independent evaluation to capture what's working and how we can improve, states Sullivan.
Class arbitration has been upheld by the U.S. Supreme Court in a case involving a dispute over payments to physicians by a health plan.
In a unanimous decision, the U.S. Supreme Court Monday affirmed an arbitrator's ruling to permit class arbitration of a physician-insurer dispute even when the two parties had not expressly agreed to that procedure.
In the case, which dates back to 2003, John Sutter, a New Jersey pediatrician, contended that he and other physicians were underpaid by Oxford Health Plans, LLC.
According to court documents Dr. Sutter provided medical services to Oxford Health Plan members under a fee-for-service contract that "required binding arbitration of contractual disputes." alleging that Oxford failed to fully and promptly pay him, however, he filed a proposed class action in New Jersey Superior Court,
The New Jersey court sent the matter to arbitration The arbitrator concluded that class arbitration was authorized, and Oxford filed a motion in federal court to vacate the arbitrator's decision, claiming that he had "exceeded [his] powers." The U.S. District Court denied the motion, which the Third Circuit Court of Appeals affirmed.
As might be expected, the American Medical Association and the Medical Society of New Jersey, which submitted a brief amici curiae to the Supreme Court on behalf of Dr. Sutter, heralded the decision. "This important ruling allows thousands of physicians to use class arbitration against a health insurer that has underpaid them for more than a decade," said AMA President Jeremy A. Lazarus, MD, in a press statement. "Without this broad-scale arbitration, physicians would have no practical means of challenging a health insurer's unfair payment practices."
"It is a sad commentary that it took a decade for Dr. Sutter and other New Jersey physicians to exercise the dispute mechanism allowed by their contracts," said MSNJ General Counsel Melina Martinson in a statement.
"A timely class-arbitration would have allowed them to have their payment disputes resolved more expeditiously and cost-effectively. The decision is welcome news to physicians in New Jersey and all who are concerned with the reducing the cost of medicine in this country."
What remains to be seen is whether the Supreme Court's decision will give a boost to "the medical profession's efforts to address unfair corporate policies of large health insurers that are bad for patients and physicians," as contended by the AMA in a press statement.
In a blog posting providing analysis of the decision, Mayer-Brown, a Chicago-based law firm with an international practice in employment and benefits, termed the ruling as "narrowly written," and noting that the Supreme Court decision holds that courts lack authority under the Federal Arbitration Act "to vacate an arbitral award authorizing class arbitration when the arbitrator's decision is based on an arguable effort to construe the arbitration agreement and the parties had agreed that the arbitrator should decide whether the arbitration agreement allows class-wide arbitration. Under such limited circumstances, the Court held that the FAA's limited standard of review of arbitral awards precludes a court from correcting any mistakes in interpreting the agreement."
According to the Mayer-Brown post, a broader issue, which was not addressed in the Oxford complaint, was addressed in a footnote by the Court. "The Court commented that it 'would face a different issue' had Oxford Health Plans preserved the argument that the availability of class arbitration is a 'question of arbitratibility,' which is a gateway issue for courts, rather than arbitrators, to decide.
In writing the majority opinion, Justice Elena Kagan, wrote: "Nothing we say in this opinion should be taken to reflect any agreement with the arbitrator's contract interpretation, or any quarrel with Oxford's contrary reading. All we say is that convincing a court of an arbitrator's error—even his grave error—is not enough. So long as the arbitrator was 'arguably construing' the contract—which this one was—a court may not correct his mistakes. The potential for those mistakes is the price of agreeing to arbitration."
"As we have held before, we hold again: "It is the arbitrator's construction [of the contract] which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his."
"In sum, Oxford chose arbitration, and it must now live with that choice. Oxford agreed with Sutter that an arbitrator should determine what their contract meant, including whether its terms approved class arbitration. The arbitrator did what the parties requested: He provided an interpretation of the contract resolving that disputed issue. His interpretation went against Oxford, maybe mistakenly so. But still, Oxford does not get to rerun the matter in a court."
Efforts to get comments from America's Health Insurance Plans, the industry's advocacy and lobbying group, were unsuccessful.
The cost of repealing the sustainable growth rate formula is $106 billion less than a year ago. Lawmakers have been holding hearings and stakeholder suggestions are pouring in. Is this the year a doc fix bill will be passed?
The cost of repealing the sustainable growth rate formula is practically at fire sale prices. The Congressional Budget Office put a $138 billion price tag on its most recent 10-year score for repealing the SGR. That's $106 billion less than its 2012 score and just the kind of savings that will resonate with the constituents back home.
Around Capitol Hill there's a lot of talk about seizing what Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, likes to call "this window of opportunity." One House bill has been formally presented to repeal and replace the SGR. Three more pieces of legislation—one from the Senate and two from the House—are expected.
And at least three influential Congressional committees—Senate Finance, House Ways and Means, and House Energy & Commerce—have held hearings for stakeholders to present their ideas on how best to replace the SGR. In addition, the chairs of Senate Finance and House E&C committees have asked hundreds of stakeholders to submit in writing specific recommendations for repealing and replacing the SGR.
But while there is movement toward a resolution, momentum is elusive.
At the Medical Group Management Association, Anders Gilberg, senior vice president for government affairs, is optimistic. He sees significant interest in resolving SGR policy. Noting that in recent years big policy discussions seem to take place during the fall, he says it's a good sign that "it's not even summer yet and the House and Senate are engaged on this issue. They are talking to stakeholders and collecting ideas."
John Williams, an attorney who specializes in government and public policy for Hall, Render, Killian, Heath & Lyman, an Indianapolis-based health law firm, stated in an e-mail exchange that even though it's only June, Congress is running out of 2013 calendar to see SGR action by both the Senate and House. " I think you might see something get out of one of the House committees this year, but I'm hard pressed to see how they [will] get a repeal bill done."
Williams, who heads the firm's federal advocacy practice group, also noted that no real SGR repeal bill is moving through any committee. "Although I hear it's not due to any animosity, House Ways and Means and Energy & Commerce are no longer working on a joint solution." The GOP members of E&C have released "a legislative outline, but it doesn't have enough details to be converted into a bill yet."
Meanwhile, HR 574 (Medicare Physician Payment Innovation Act of 2013), a bipartisan effort from Rep. Allyson Schwartz (D-PA) and Rep Joe Heck (R-NV), was introduced in February and referred to House Ways and Means and E&C, where it remains. The bill includes a five-year period of payment stability popular with physicians.
"Before we know it, the August recess will be upon us and there still won't be a bill moving," said Williams.
Another reason for concern: CBO releases its revised budget estimates in August. If the price tag for SGR repeal posts a significant increase, "any chance of repeal this year is dead," stated Williams. In that case he expects Congress will do another temporary "doc fix" bill at the last minute before Christmas that corrects the problem for "somewhere between one and (maybe if Boehner gets his way) four years."
Williams and Gilberg agree that while policy and price will be dealt with in separate pieces of legislation, even the $139 billion price tag for SGR repeal will be a tough sell. "I'm hard pressed to see how rank and file Republicans in the House will support anything that increases spending by that amount," said Williams.
Gilberg says it's unlikely that any pay fors or offsets will be addressed in a stand-alone SGR bill. That could be too polarizing, especially if the SGR funding involved reducing the money available for other parts of the healthcare budget.
The more likely scenario says Gilbert is that SGR repeal funding will be part of comprehensive legislation addressing deficit reduction or something equally large in scope. "It's just easier to do that way."
Williams agrees. "[Republicans] might be willing to hold their noses and vote for [the cost of repealing the SGR] as part of a larger package like tax reform."
The most prevalent arrangement for Medicare ACO contracting is 'shared savings upside,' or what is known within the industry as a one-sided risk model, survey data shows.
Early adopters of Medicare accountable care organizations have a preference for a one-sided risk model while commercial ACO participants look for care management fees, according to a survey released Wednesday by Premier healthcare alliance.
The Premier survey looks at 85 payer arrangements covering 1.8 million covered lives for 22 participants of its PACT (Partnership for Care Transformation) population health collaborative program.
The results reflect "the journey to population health management," Joe Damore, vice president, Population Health Management Premier, stated during a Wednesday press conference. "The organizations we work with are in the process of redesigning care and also redesigning their payer arrangements to support the new care model."
For the survey respondents, the payer arrangements fall into five categories:
1. Medicare and Medicare Advantage (35%)
2. Commercial (33%)
3. Medicaid (12%)
4. Self-insured employers (9%)
5. Provider-owned plans (11%)
The most prevalent arrangement for Medicare ACO contracting is shared savings upside or what is known within the industry as a one-sided risk model. These contracts involve a per capita expenditure target. As Damore explained, "if you are below that target you share in the savings with the federal government."
The reason shared savings is popular is the costs involved in building the infrastructure necessary to transition to ACOs. The American Hospital Association places the cost at $1.7 million to $12 million to develop the infrastructure and resources needed, including information technology, care management programs, and patient-centered medical homes.
Damore noted that shared savings also allow time for ACO participants to gain experience in managing risk. "One-sided risk is a good way to gain experience for organizations that are new to managing risk."
On the commercial side, the most prevalent contracting vehicle is care management fees. These are generally lower risk because there are no shared savings or losses, Damore explained. Payers provide a set fee-per-member, per month (often $3 to $5) for more active care management and preventive services, such as disease management. However, payers are not obligated to share any savings that may accrue from those efforts.
"In early stages of accountable care, this may be preferable for commercial payers. It's a set and predictable amount of spending, versus shared savings, which would vary based on the success of the program," said Damore.
A Premier report [PDF] on its payer partnership program says risk aversion could be due to payers in the commercial market having bottom line obligations that may be less tolerant of losses than public payers such as Medicare.
Damore noted that "the government, which traditionally is more conservative than the private market, appears to be more progressive when it comes to shared savings, at least for now. We are starting to see things turn around, but to date, public payers have been the leaders when it comes to broad scale shared savings agreements."
Upside arrangements are unusual in commercial markets. Among the ACOs analyzed, only 21% of commercial arrangements offer upside shared savings. Those agreements tended to be smaller in scope, usually for 5,000 covered lives or less.
Almost 70% of commercial payment arrangements are either care management fees or shared savings downside models.
In exchange for the downside risk, however, commercial payers tend to be more generous than the Medicare program, offering savings splits that typically range between 50% and 80%. Medicare, in contrast, only offers a maximum of 60% of savings, although the assumed risk is comparable in the public and private market.
While there is very little capitation among either commercial or Medicare ACOs, that is expected to change said Damore. Capitated payments typically are paid on a periodic basis and are based on projected spending adjusted for risk. "Going forward," he said, "we'd expect that as payers and providers get more acclimated to accountable care, they will move more toward capitated arrangements."
New federal rules on wellness programs are branded as "incentives," but will do little to rally employer support.
The final rules released last week by the Department of Health and Human Services for employment-based wellness programs bring some welcome news for health plans hoping to reach new markets. But they shouldn't hold their collective breath.
Currently there is an undercurrent of grumbling by employers who are not enamored with the government-defined process of offering these programs and rewarding participants. So HHS is trying mightily to advance health awareness and disease prevention by creating incentives for employers to offer wellness programs to their employees.
Two surveys released within a few days of one another shed some light on a wellness conundrum. In a survey conducted by Virgin HealthMiles, only 25% of companies responding said they planned to implement any wellness provisions from the Patient Protection and Affordable Care Act. Employers revealed that they struggle with finding a tangible way to directly correlate wellness programs to bottom-line benefits.
On the employee side, the same survey confirms that employees love wellness programs. Eighty-seven percent of respondents said that they consider health and wellness offerings when choosing an employer. And incentives play a big role in employee motivation—61% of employees credit the incentive as the key reason for participating. Another 78% said they are interested in participating in incentive-based programs while at work.
Rand Corp. meanwhile released a sobering report on workplace wellness programs last week that is sure to give even the most committed and wellness-savvy executive heartburn. Over five years the average healthcare cost savings for an employee participating in a wellness program is $157.
That's bad news for employers who contribute thousands of dollars annually to employee healthcare benefits.
Note that the government's final rules put some big bucks in play for employees. The maximum permissible reward for some wellness programs will increase from 20% of the average annual cost of premiums to 30%. And the maximum reward for smoking cessation tops out at 50%.
Are the new incentives enough to bring more employers into the wellness fold?
That's the question health plans will ponder as they look at this potential market. And there's no easy answer. Maybe that's why the health insurers I contacted, including Blue plans, Humana, and WellPoint either didn't respond or declined to respond with much more than "it's under review."
The 123-page rule addresses two types of wellness programs, participatory and health-contingent, and prescribes a reward system for each. For participatory programs employers, through their health plans, typically reward employees for belonging to a gym or completing a health risk assessment.
The catch, at least for employers, is that the employee doesn't have to provide proof of that he uses the gym or has made lifestyle changes based on the HRA. Still, employers are usually happy to offer this type of wellness program.
Health-contingent wellness programs defined in the rule are outcome-based, so receiving a reward is contingent on an employee achievement such as losing weight, lowering cholesterol levels, or giving up tobacco products.
But the final rule requires outcome-based wellness programs to also offer a "reasonable alternative standard" to all employees who initially fail to meet their goals to "ensure that the program is reasonably designed to improve health and is not a subterfuge for underwriting or reducing benefits based on health status."
That's a sticking point for some employers and could make these programs too onerous, says Steve Wojcik, vice president of public policy for the National Business Group on Health, a Washington, DC-based group that represents almost 400 companies, including 66 of the Fortune 100 companies.
It remains to be seen how the new requirements "will affect wellness program costs, the ability for wellness programs to move the needle on health, and the willingness of employers to continue to offer outcomes-based wellness programs," says Wojcik.
Many employers, he says, are already expanding the alternatives for outcomes-based wellness programs to provide employees with multiple options to improve their health. "In some ways, the broader alternatives are being built into the programs and hopefully this new requirement won't add to that."
So where does this leave health plans? According to Rand, employers overwhelmingly expressed confidence that workplace wellness programs reduce medical cost, absenteeism, and health-related productivity losses.
The problem is that employers aren't quite sure how to make formal evaluations. Health plans have a treasure trove of healthcare data at their disposal that could be used to develop analytical tools for wellness programs to provide the financial confidence employers need to implement the complicated outcome-based wellness programs.
Building those tools and making them easily accessible would be a win-win for health plans and employers.
A coalition of kidney care experts and advocates fears that Medicare program cuts for end-stage renal disease will be so severe that the cost of delivering dialysis will exceed reimbursement for the service.
A coalition of kidney care advocates is the latest disease interest group to push back against financial cuts required by the American Taxpayer Relief Act of 2012.
In April, the American Society of Clinical Oncology and other cancer care groups projected that ATRA requirements would reduce access to cancer treatment and boost the cost of cancer drugs. The Washington Post reported that cancer clinics had started turning away " thousands of Medicare patients" because of the budget cuts tied to the sequester.
Within weeks legislation was introduced to reduce the cuts to cancer clinics.
Kidney Care Partners, a coalition of patient advocates, researchers, and dialysis professionals, is travelling a similar path. It has garnered Congressional support in its effort to convince the Centers for Medicare & Medicaid Services to limit the end-stage renal disease program cuts expected to take place as a result of ATRA.
Better known as the fiscal cliff law, ATRA requires CMS to make payment adjustments to the ESRD bundled payment system in an effort to save $4.9 billion over 10 years. The savings will come from what is known as "rebasing." CMS will rebase the ESRD prospective payment system using drug utlilization data from 2011. The current base year is 2007.
It is a move that is supported by a December 2012 report from the Government Accountability Office. According to the report, the utilization of ESRD drugs in 2011 was about 23% lower, on average, than it was in 2007.
As a result, the GAO said Medicare may have paid more than necessary for dialysis care in 2011 because the bundled payment rate in that year was based on 2007 utilization levels. The GAO estimated that a rebase to 2011 would have saved between $650 million and $880 million in 2011.
Advocates contend that the ESRD program has already absorbed more than its share of cuts, including a 2% reduction in overall payments when the ESRD bundled payment system was implemented in 2011.
The immediate concern is that the ERSD payment will be reduced so much that the cost of delivering dialysis will exceed reimbursement for the service. That could mean fewer dialysis clinics will be in business and patient access could be limited, especially in rural and inner city areas.
Over the long-term there's concern that another reduction in payment could affect industry innovation by further limiting the ability of providers to invest in advanced therapies, says Tonya Saffer, senior federal health policy director, for the National Kidney Foundation in Washington D.C.
The payment adjustment will affect 85% of the estimated 450,000 dialysis patients. In the United States there are 5,869 profit and non-profit dialysis centers, including 780 hospital-based centers, according to the U.S. Renal Data System.
Congress seems willing to engage in the effort. A bipartisan group of senators led by Sen. Ben Cardin (D-MD) and Sen. Mike Crapo (R-ID) expressed concern in a May 17 letter that if CMS "does not exercise caution (which it has the statutory authority to do), the adjustment could threaten the improvements made to the Medicare ERSD program and jeopardize beneficiary access to care."
In a letter dated May 28, the House Ways and Means Committee's Health subcommittee chair, Rep. Kevin Brady (R-TX) and Jim McDermott (D-WA), the subcommittee ranking member, asked to be kept apprised of CMS actions. "We are specifically interested in the rulemaking that the agency is undertaking to implement the ATRA provisions."
CMS is expected to propose ESRD rules by the end of June. One kidney care advocate says the "effort right now is to make our case…to see if there's a way to get the proposed rule to be closer to what we want. It's just easier if you get it right in the proposed rule."
The Medicare program's current forecast is slightly less bleak than last year's, but the fund is headed for insolvency in 2026, say the trustees of the Medicare's Hospital Insurance Trust Fund.
This isn't exactly dance-in-the-street news but the federal Medicare program is heading for insolvency at a slightly slower pace than previously forecast.
Thanks to lower projected spending, lower projected Medicare Advantage program costs, and some technical changes in calculating projections, Medicare's Hospital Insurance Trust Fund will remain solvent until 2026, the 2013 Medicare Trustees Report shows. That's two years longer than the 2012 report estimated.
The reprieve extends to 2014 premiums for Medicare Part B, which pays outpatient expenses. Those premiums are expected to remain unchanged from 2013 levels. Also, the report confirms that Medicare Part B and Part D, which provides access to prescription drug coverage, will remain adequately financed indefinitely, in accordance with current federal law.
The fact remains, however, that the Medicare program is still headed for insolvency. "The core message from the trustees is that Medicare's financial future remains in jeopardy and structural reform is essential… it cannot be argued that the status quo is sustainable," said Mary R. Grealy, in a prepared statement. Grealy is president of the Healthcare Leadership Council, a coalition of healthcare chief executives.
The report notes that as it has since 2008, the Trust Fund will continue to pay out more in hospital benefits and other expenditures than it receives in income—a trend that is expected to continue until reserves depleted. Interest earnings and asset redemptions cover the difference. In 2012, $11 billion in interest income and $24 billion in asset reserves were used to cover the shortfall.
Contributing to continuing Trust Fund woes are low birth rates, which mean smaller future workforce volumes available to support the millions of baby boomer retirees now entering the Medicare program. In 2025, a year before latest projected insolvency, Medicare is expected to have 73 million beneficiaries.
In making their annual plea for lawmakers to address the financial challenges facing Medicare "as soon as possible," the Medicare trustees, four federal officials and two public representatives, noted that for the seventh consecutive year, the Social Security Act requires that they issue a "Medicare funding warning because projected non-dedicated sources of revenues?primarily general revenues?are expected to continue to account for more than 45% of Medicare's outlays in 2013, a threshold breached for the first time in fiscal year 2010."
Whether Congress is ready to take serious steps to resolve Medicare issues remains to be seen. Medicare physician payment reform is much talked about on Capitol Hill but has so far been delayed for 10 consecutive years.
A 2011 study by the nonpartisan Kaiser Family Foundation found that raising the Medicare eligibility age from 65 to 67 in 2014 would generate about $7.6 billion in net savings to the federal government, but it would add $5.6 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree healthcare costs.
As is expected, administration officials were quick to credit the Patient Protection and Affordable Care Act with strengthening Medicare's finances by reducing the cost of care. "Medicare spending per beneficiary increased by just 0.4% last year, far below historical averages," Kathleen Sebelius, the Secretary of the Department of Health and Human Services, stated during a press conference to announce the report findings.
The reaction to the Trustee's Report by healthcare stakeholders has been generally positive. Joe Baker, president of the Medicare Rights Center, an advocacy group, noted in a statement that with insolvency delayed by two years, policymakers "have time to test and expand value-driven delivery system and payment reforms designed to improve health care quality while simultaneously driving down the cost of care. The Affordable Care Act offers a blueprint for these reforms, and testing of many promising reforms is already underway."
While praising the slowdown in healthcare spending, Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement that "hospitals are absorbing more than $400 billion in spending cuts at the same time that Medicare beneficiary enrollment is expanding at an average annual rate of 3%."
Rich Umbdenstock, president and CEO of the American Hospital Association, released remarks saying that hospitals are doing their part to hold healthcare costs down "hospital cost growth at its lowest rate in 10 years."
Repeal of the Patient Protection and Affordable Care Act won't come easily, if it comes at all. Now lawmakers are focused on whether Health and Human Services Secretary Kathleen Sebelius improperly solicited assistance from the healthcare industry to help implement the unpopular law.
The 37th attempt by the U.S. House of Representatives to repeal the Patient Protection and Affordable Care Act passed earlier this month. But this bill, like its predecessors, is unlikely to be passed by the Senate.
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Frustrated House Republicans trying another angle, are now holding Health and Human Services Secretary Kathleen Sebelius in their crosshairs as they look into reports that she may have solicited funding or assistance from the healthcare industry to help implement some of the Patient Protection and Affordable Care Act.
Correspondence released Friday by the House Energy and Commerce Committee indicates that committee members are looking for answers about HHS fundraising efforts from 15 health insurance companies and organizations.
The letter was sent to Aetna, Blue Shield of California, CareFirst BlueCross BlueShield, Cigna, Coventry Health Care, Highmark, Humana, Independence Blue Cross, Kaiser Permanente, United Healthcare, WellPoint, America's Health Insurance Plans, the BlueCross BlueShield Association, H&R Block, and HCSC Group.
While efforts to reach health plans for comments were largely mixed over the long holiday weekend, a spokesperson for Blue Shield of California replied that although the health insurer is responding to the letter, "we were not contacted by the [HHS] Secretary or staff" for solicitation. Other health plans replied that they were unfamiliar with the letter. An AHIP spokesperson said the letter was still in the review process.
The House Energy and Commerce staff did not respond to a request for information about how the recipients of the letter were selected.
The Washington Post story that first disclosed the fundraising effort cites anonymous sources saying that Sebelius made "multiple phone calls to health industry executives, community organizations and church groups and asked that they contribute whatever they can to nonprofit groups that are working to enroll uninsured Americans."
That contact would be a no-no because HHS makes decisions that directly affect health plans.
For her part, Secretary Sebelius acknowledges that she requested funds from H&R Block, the tax preparation company, and the Robert Wood Johnson Foundation, a philanthropic organization.
The House committee is particularly interested in Sebelius's efforts on behalf of Enroll America, a private nonprofit group with close ties to the Obama White House. It is dedicated to assisting the implementation of the healthcare reform law, especially in getting information about health insurance exchanges out to millions of uninsured. Enroll America was founded by Ron Pollack, executive director of Families USA, an early advocate of the PPACA.
In its letter to health plans and other organizations, the committee requested all internal documents related to contact by anyone at HHS or anyone acting on behalf of HHS "requesting contributions to assist in the establishment and implementation of PPACA." Health plans are expected to provide the names of personnel within their organizations who were contacted by HHS and to detail "any plans, commitments, or initiatives by your company to contribute to the implementation of PPACA."
The committee also requested "materials related to any meetings held at the White House on the implementation of PPACA."
That is potentially a comprehensive and time consuming list. Wouldn't it be easier to bring Secretary Sebelius before the House Committee on Government Oversight and Reform, which has investigation and oversight jurisdiction, put her under oath, and ask her if she has contacted any health plans?
I'd like that. It could quickly put to rest yet another PPACA side show.
Instead, Republicans seem intent on stretching this story out as long as possible. Last week in a hearing completely unrelated to any real or perceived actions by Sebelius, Rep. Lankford (R-OK) turned to media reports about the funding solicitations. "These actions unduly pressure private companies to financially support implementation and promotion efforts. [They are] fearing HHS retribution if they don't contribute. The secretary must stop using unethical methods to fund the law's implementation."
Democrats, with the exception of the White House, have been largely quiet on the matter. Party leaders ought to encourage Secretary Sebelius to step out in front of this issue. Straightforward answers delivered by Sebelius, not her spokesperson, might work wonders.
Of course, all of this House action is politically motivated, but what isn't in Washington?
Healthcare reform is at a critical juncture this year. Casting aspersions on the government official most closely connected with the reform effort is a distraction that needs to be resolved very quickly. Sebelius holds that key. She should speak up.
In this new Intelligence Report, we examine how resolving organizational problems in the emergency department will remain a challenge as demand for ED services increases, overcrowding elevates patient safety concerns, and quality metrics draw greater attention.
This article appears in the May issue of HealthLeaders magazine.
The emergency department continues to be challenged by its own internal problems even as it seeks to work with other hospital departments to overcome bottlenecks that can affect the efficiency and quality of patient care.
The results of the 2013 HealthLeaders Media Emergency Department Survey show that resolving these issues will remain an uphill battle as demand for ED services increases, quality metrics draw public attention, and ED overcrowding raises patient safety concerns. Reimbursement challenges and declining operating margins will further complicate matters.
Even as the healthcare industry transitions its delivery systems to emphasize patient-centered medical homes, care coordination, and the continuum of care, almost nine in 10 healthcare leaders (86%) expect their ED volumes to increase within the next three years.
It seems counterintuitive that demand for ED services is projected to grow just as millions of newly insured will enter the healthcare marketplace, but that has been the experience in Massachusetts where, in 2006, the state adopted a healthcare reform system that requires all residents to carry a minimum level of healthcare insurance.
Since then, ED volume across the state has "increased by about 1.5% annually," according to Assaad Sayah, MD, chief of emergency medicine at the three-hospital Cambridge (Mass.) Health Alliance. He notes that his own ED recorded 77,000 patients in 2005 (before Massachusetts healthcare reform), 98,000 in 2012, and is on track for 100,000 patient visits in 2013.
Sayah says physician shortages, especially in primary care, fuel much of the ED demand. "With healthcare reform, although the solution is to provide coverage for patients, the true solution is that there needs to be more patient access to primary care."
Overcrowding
As demand for ED services increases, more healthcare leaders describe their EDs as overcrowded. While 46% of respondents described their ED as being overcrowded in our 2012 ED survey, 61% do so in this year's survey. Overcrowding exacerbates some common ED challenges. About one-third of respondents (32%) said patient flow is the greatest challenge facing their ED, wait time was mentioned by 15%, and patient boarding by 13%.
Survey respondents cite a number of effective ED operations techniques to improve ED throughput: fast-track area for lower acuity (61%), triage medical evaluation process (58%), and streamlined registration process (53%).
Systemwide issues also cause headaches for the ED. "The ED only flows as well as the hospital flows," says Leon L. Haley, MD, deputy senior vice president for medical affairs and chief of emergency medicine at Grady Health System in Atlanta. "On some level, we've done ourselves a disservice by talking about ED overcrowding. We should be talking about hospital crowding and hospital flow."
Depending on the ED issue at hand, Haley says the throughput committee at Grady might consider environmental services staffing and room cleaning, radiology department staffing and testing hours, physician staffing, lab processes and structure, and possibly guest services and transportation. "It's all tied together," he says.
Bottleneck
About three-quarters of healthcare leaders (73%) identified ED-to-inpatient transfers as the biggest bottleneck for ED flow. "Keep in mind that every time you delay a discharge upstairs for an hour, it backs up in the course of the day and can be a two- or three-hour delay for the ED, says Marlon Priest, MD, executive vice president and chief medical officer for Marriottsville, Md.–based Bon Secours Health System, a 19-hospital system that serves seven states.
Protocols
Less than half of the survey respondents (44%) identified standardized handoff protocols as a method they use to increase ED throughput efficiency. That surprised Priest. "Much of the stuff that goes into the ED has pretty standard complaints. If you could figure out how to use predetermined evaluations, you could often have lab tests or x-rays done before the patient gets to the main ED area."
Priest suggests placing a physician or a nurse practitioner in a triage area to take brief patient histories and order diagnostic tests according to protocol. The protocols can "help reduce wait time between triage to ED room, to ED physician, to test area, and to test back."
Still, Sayah cautions that these techniques are only a part of the solution. "Those things work, but they don't work by themselves. They've been used for years and yet here we are today with overcrowding and long waits. What's missing? The ultimate solution needs to be a hospitalwide commitment to relieving the ED from being overcrowded, which includes rapid admission and rapid throughput."
Also important, says Sayah, is to get a C-suite commitment to help with immediate, one-off solutions. When all else fails, even in the middle of the night, the ED needs to be able to turn to the "three or four people within the hospital with the authority to escalate processes across the entire hospital system."
Staffing
Half of the healthcare leaders (50%) identified better nurse workload balancing as the most effective staffing technique to increase ED throughput efficiency. This response reinforces the systemic relationship the ED has with other hospital departments and functions.
Safety
Overcrowding is a huge concern when it comes to patient safety in the ED. Some 96% of healthcare leaders with an overcrowded ED are either "concerned" (45%) or "very concerned" (51%) with patient safety as a result of that overcrowding, which can cause delays in treatment, reduce the quality of care received, and increase the risks for some patients.
As they work toward ED improvements, healthcare leaders are keeping a watchful eye on finances. While a plurality of respondents (44%) report that their ED has a positive operating margin, one in five (18%) reports a negative ED operating margin, and 60% say they expect their ED operating margin to decrease within the next three years; only 9% expect increased ED operating margin.
In addition, 65% expect ED reimbursement rates to decrease within the same time frame, and 58% expect an increase in uninsured/self-pay patients.
As the industry continues its transition from volume to value, leaders will need to address clinical and operational concerns not only within the ED itself but also throughout the organization and the continuum of care.
Reprint HLR0513-3
This article appears in the May issue of HealthLeaders magazine.
The 2013 Milliman Medical Index pegs the annual cost of PPO coverage at 6.3% higher than last year. Physician and other professional services account for one third of annual healthcare spending.
The annual cost of healthcare for the average American family of four set another record in 2012 although the pace of that growth is the lowest it has been in more than a decade
The 2013 Milliman Medical Index pegged the annual cost of PPO coverage at $22,030, a 6.3% or $1,304 increase from the previous year. The family picked up about 42% of the total cost while the employer accounted for 58%, which is comparable to their 2012 cost sharing.
That's the third time the rate of growth has declined since the Patient Protection and Affordable Care Act was enacted in 2010. While the decline in the rate of growth is welcome, families will likely still despair at these cost comparisons provided by Milliman:
The annual cost ($22,030) is almost as much as the cost of attending an in-state public college for a year.
The employee payroll deduction ($9,144) now exceeds the cost of the family groceries.
Out-of-pocket cost ($3,600) for co-pays, coinsurance, and other cost sharing is more than the average U.S. household spends on gasoline each year.
Scott Weltz, principal and consulting actuary in Milliman's Milwaukee office, cites the economic downturn, improved efficiency in the delivery of healthcare, lower drug costs, and the absence of a blockbuster, brand-name drug as contributing to the growth rate decline.
Can the decline be sustained? "It's difficult to say what the future holds with regard to these trends," says Weltz. While Department of Health and Human Services Secretary Kathleen Sebelius would probably like everyone to give credit to the ACA, Weltz notes that the prototypical family of four used for the report is in an employer-sponsored, large group policy with gold standard coverage. The effects of the ACA will more likely be felt in the individual and small group market where access to insurance and the quality of the coverage is more of an issue.
The MMI is comprised of five components: physician and other professional services, inpatient facility care costs, outpatient facility care costs, pharmacy, and miscellaneous other.
Among the report findings:
Physician and other professional services account for 32% or $6,990 of annual healthcare spending. The 5.2% increase from 2012 is attributed to increased utilization and charge increases.
Inpatient facilitycare costs account for $6,855, or 31%, of the family's annual healthcare bill. The annual increase was 5%. Although the number of hospital inpatient days actually declined, increased labor costs, increased liability costs, and new technologies all contributed to the increase.
Outpatient facility care costs are 18% or $4,037 of total annual costs. This category scored a hefty increase, 9.2%, over 2012. That probably reflects increased utilization as inpatient services shift to outpatient facilities.
Pharmacy costs totaled $3,296 or 15% of the family's healthcare expenditures. The 7.9% increase is in line with 2010 and 2008 increases. A continued shift to generics was offset by increased utilization of high-priced specialty drugs (typically more than $600 for a 30-day supply).
Miscellaneous other costs such as durable medical equipment, ambulance services, and home health posted a 7% increase to $851.
Citing concerns about how its numbers were used, Milliman no longer includes comparative healthcare data for 14 cities in this report.