Posted 12/02/13 on Medscape Connect’s Care and Cost Blog
The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.
The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?
Posted in Benefits, Brian Klepper, Conflicts of Interest, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Tools
Tagged Fee-for-Service, Health Care Excess, Institute for Healthcare Improvement, Overtreatment, Reimbursement
Posted 11/17/13 on Medscape Connect’s Care and Cost Blog
Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.
The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”
Posted in Analytics, Benefits, Conflicts of Interest, Health Care Cost, Policy/Law/Regulation, Reform
Tagged Billing and Collections, Brian Klepper, Hospitals, Medicare, Not-for-Profit Tax Status, Self-Pay Patients, Uninsured
October 18th, 2013
Cross-Posted 10/18/13 from The Health Affairs Blog
A Health Affairs report on health information interoperability by staffers of the Office of the National Coordinator for Health Information Technology (ONC) provides a good enough summary of the situation. But it also is not news, and falls under the Bob Dylan Rule: You don’t need a weatherman to know which way the wind blows. From the article: “In general, limited interoperability across vendors, low motivation to share information in a fee-for-service payment environment, and the high cost of interfaces remain substantial barriers to widespread health information sharing.”
Two difficult but solvable structural problems block our exchange of health care information. The first is the “transport protocol.” Most health care data transport approaches lack the strong privacy and security safeguards that other industries now consider essential. The same industry that is moving toward clinical applications of mobile health, genomics, and nanotechnology still primarily relies on cumbersome, expensive faxes to transmit clinical information between organizations.
Posted in Analytics, Health Care Cost, Health IT, Market Dynamics, Medical Management, Policy/Law/Regulation, Politics, Quality
Tagged David C. Kibbe, Direct Trust, Interoperability, Office of the National Coordinator for Health IT, ONCHIT
Posted 10/10/12 on Medscape Connect’s Care & Cost Blog
When an employer sits down with his health care partners – broker, health plan, physician, hospital, drug and device firm, health IT firm – everyone but him wants health care to cost more, and each is typically in a position to make that happen.
Lynn Jennings, CEO, WeCare TLC
A new class of health care management organization is emerging that thrives by taking advantage of health care’s rampant and institutionalized waste. These firms mine the market dysfunction that has developed over decades, which will almost certainly yield enough fuel to drive a new way to manage care and cost.
The founders of these organizations have deep health care experience, and they understand the mechanisms of excess. More important, the ones I’ve met are mission-driven, with a deep sense of outrage that health care’s exploitation has become so pervasive and overt. So their businesses are purposeful.
Posted in Analytics, Benefits, Conflicts of Interest, Health Care Cost, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform
Tagged Brian Klepper, Chen, Health Care Cost, Health Care Excess, Iora Health, Medical Management, Qliance, WeCare TLC, WellPortal
Published in the Columbus, GA Ledger-Enquirer on Sunday, 9/15/13
I recently was privileged to deliver a keynote at the Greater Columbus Chamber’s Healthcare Symposium. I get invited to meetings like this around the country because I lay out a deeply researched and frightening national problem that can only be remedied by business.
Health care is of course very important. But as has been documented over and over (to no avail), it is out of control, with costs that have become so excessive that they literally represent the greatest threat to our national economic security. At $2.8 trillion per year or about one dollar of every five of gross domestic product, health care has become our largest, wealthiest and most politically influential industry. In turn, this has allowed it to spin every piece of health care legislation to advantage.
Posted in Analytics, Benefits, Brian Klepper, Conflicts of Interest, Health Care Cost, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform
Tagged Brian Klepper, Business Health Coalitions, Columbus Chamber Health Care Symposium, Employer Collaboration, Health Care Cost
Posted August 13, 2013 on HealthBlawg
Recently, there were a couple of breathless articles about the RUC (Relative Value Scale Update Committee) published in The Washington Post and The Washington Monthly, reporting as news the state of affairs that has prevailed for years in the realm of re-setting the relative values of physician services annually for purposes of the RBRVS — which is at the heart of the Medicare Physician Fee Schedule (MPFS) and which affects physician reimbursement well beyond Medicare, since the RBRVS is used as a touchstone in determining payment levels under commercial payor agreements as well.
I thought this confluence of publications was a good excuse to call up Brian Klepper, who is an expert critic of the RUC, to discuss the latest stories and talk about the prospects for meaningful reform.
Have a listen to our conversation (about 30 minutes long):
Brian Klepper on RUC HealthBlawg Interview with David Harlow 07262013
Brian Klepper – RUC – HealthBlawg
A transcript is appended to this post.
As detailed in our conversation, the RUC is a committee of the American Medical Association, and it operates behind a veil of secrecy. When it issues its annual update recommendations, CMS generally accepts the recommendation, and promulgates the update as a rule: the annual MPFS rule. The RUC is dominated by specialists, so the system tends to overvalue procedures and to undervalue “cognitive” services, or primary care.
Posted in Analytics, Brian Klepper, Conflicts of Interest, Health Care Cost, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform
Tagged AMA, American Medical Association, Brian Klepper, David Harlow, RBRVS, Relative Value Scale Update Committee, RUC
Loren Bonner , DOTmed News Online Editor
August 15, 2013
DMN: After Steven Brill’s blockbuster article in Time Magazine came out a few months ago, it feels like everyone is interested to know the real scoop on hospital pricing and what’s driving up the cost of health care. I think you have some opinions on this. Can you share your thoughts?
BK: Egregious hospital unit pricing is certainly one driver, but the truth is that over the last several decades, every health care sector has devised ways to extract money from the rest of us that they’re not legitimately entitled to. I’ve written extensively about the Specialty Society Relative Value Scale Update Committee (or RUC), the secretive AMA committee that has jiggered the relative value scheme that Medicare, Medicaid and most commercial payment systems are based on, driving up cost.
In my day job, I see health systems buying stakes in Pharmacy Benefit Management (PBM) firms, jacking up the generic pricing to their own members by 200% or more then telling their members that they’re managing their cost. Physicians are doing unnecessary procedures on patients, which not only costs a great deal but puts those patients at risk of physical harm. Primary care reimbursement has been driven down by Medicare and the commercial plans, which decreases visit time and increases the rate of specialty referrals and in turn produces much more costly care unnecessarily. Health plans push “choice” in networks, but having the right to go to a lousy doctor or hospital does nobody any favors, except by driving the cost up for less effective and efficient care. I could provide many, many more examples.
Posted in Analytics, Brian Klepper, Conflicts of Interest, Health Care Cost, Imaging, Innovation, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Quality, Reform
Tagged Brian Klepper, DOTmed, Excess, Health Care Cost
Published August 1, 2013 in the Self-Insurer
One of health care’s deeper mysteries is why third party administration (TPA) firms remain minor health plan players and, to a large degree, have been all but uncompetitive with the major health plans. Yes, the big plans have paid brokers more handsomely and have offered broader services, simplifying purchasing. But they have also offered mediocre-to-poor products at increasingly exorbitant cost. Why have TPAs as a group not distinguished themselves with better performance?
Most TPAs emerged as employer advocates, promising to protect their clients from the financially conflicted practices embraced by the major plans. But over time, many have become, as the term implies, administrators rather than managers, processing transactions without much focus on changing the ways that care and cost are delivered. Certainly in recent years, the majority have not attacked the egregious excesses that have made American health care so costly. Or to say it more simply, even though it has been in their clients’ interests, most have not done the hard work required to make health care cost less with better health outcomes, and so gain a quality and price advantage over their competitors. After all, there’s a good living to be had just putting together the coverage machinery processing claims.
Posted in Analytics, Benefits, Brian Klepper, Conflicts of Interest, Health Care Cost, Innovation, Market Dynamics, Medical Management, Quality
Tagged Brian Klepper, Medical Management, Self-Insurer, SIIA, Third Party Administration firms, TPAs
Brian Klepper and Paul Fischer
Posted 8/09/13 on The Health Affairs Blog
With the recent release of two mainstream exposes, one in the Washington Post and another in the Washington Monthly, the American Medical Association’s (AMA) medical procedure valuation franchise, the Relative Value Scale Update Committee (RUC), has been exposed to the light of public scrutiny. “Special Deal,” Haley Sweetland Edwards’ piece in the Monthly, provides by far the more detailed and lucid explanation of the mechanics of the RUC’s arrangement with the Centers for Medicare and Medicaid Services (CMS). (It is also wittier. “The RUC, like that third Margarita, seemed like a good idea at the time.”)
For its part, the Post contributed valuable new information by calculating the difference between the time Medicare currently credits a physician for certain procedures and actual time spent. Many readers undoubtedly were shocked to learn that, while the RUC’s time valuations are often way off, in some cases physicians are paid for more than 24 hours of procedures in a single day. It is nice work if somebody else is paying for it.
Posted in Analytics, Brian Klepper, Conflicts of Interest, Health Care Cost, Innovation, Market Dynamics, Physicians, Policy/Law/Regulation, Politics, Quality
Tagged American Medical Association, Brian Klepper, Congress, Paul Fischer, Relative Value Scale Update Committee, RUC
Posted 5/23/13 on Medscape Connect’s Care & Cost Blog
Several physicians have reached out recently to discuss attractive employment offers from health systems. They are invariably conflicted. They understand the trade-offs, that they’ll give up the autonomy they’ve become accustomed to in exchange for more money and fewer practice management headaches. On the down side, they’ll be accountable for generating significant revenues, sometimes independent of care appropriateness.
Most also are aware that the same care services they provide now will be considerably more expensive once they’re part of a system. Many appreciate that because health systems are corporations with a heavy focus on optimizing short term gains, their future employer’s loyalty is suspect. And then there is the question of whether the health system’s management team is competently preparing to be sustainable in a market that could change dramatically.
As health systems maneuver to dominate regional markets, driving utilization and gaining more leverage over contractual pricing, physician employment has become their principal lever. Primary care physicians (PCPs) are now precious commodities that can manage populations and steer patients into the system’s services. Other specialties – e.g., cardiology, orthopedics, neurosurgery and even gynecologic oncology – are desirable if they’re high yield, driving lucrative, intensive use of inpatient and outpatient services.
Posted in Health Care Cost, Innovation, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform
Tagged Brian Klepper, Excess Health Care Cost, Health Systems, Hospitals, Incentives, Massachusetts, Partners Health System, Physicians, Utilization
Brian’s Note: My son Joel is a 34 year old 2nd-round student studying conflict resolution at Portland State University in Oregon. On Saturday, he went to an all day event that featured the Dalai Lama. Here is his report.
The Dalai Lama was amazing and everything I could have hoped for: warm, intelligent, modest and thoughtful. And funny. The venue was a sold out auditorium of 11,000. He began at 9:30 am in a panel discussion with two prominent environmental activists and Gov. Kitzhaber, who also really impressed me.
They talked about the environment, and identified our nation’s (and the worldwide) culture of endless, ever-expanding consumption as the root of the issue, with nods to the political realities of trying to re-engineer a currently existing economy towards a more sustainable model. The Dalai Lama mentioned how he speaks to scientists all over the world to get an idea of the latest understanding and technologies, but was quick to defer to experts on specifics, citing his lack of knowledge. He also spoke on income disparity, and how after a certain point, more money does nothing to increase your happiness, because it does nothing to address core human needs, and can actively work against you. He even went as far as to say that he was a Socialist and an economic Marxist, but that those ideologies cannot work without guaranteed and real freedom as an indispensable part of that framework.
Posted 5/09/13 on Medscape Connect’s Care & Cost Blog
On a recent call with a large manufacturer, my company’s team expected to describe how we develop primary care medical homes that become platforms for managing comprehensive health care clinical and financial risk. But the team on the other end of the phone beat us to it. Their remarks – that health care cost is a multi-headed monster that requires a broad array of simultaneously executed approaches – were a breath of fresh air.
They wanted to avoid approaches that don’t work or are designed to accrue to a vendor’s disproportionate financial advantage, and focus instead on mechanisms that measurably improve health and reduce cost. Their conventional current clinic vendor wasn’t onboard, philosophically or in terms of capabilities, and so wasn’t getting results. They were looking for a replacement vendor that could help them drive more appropriate care, with clear rules for patients and providers.
Posted in Benefits, Conflicts of Interest, Health Care Cost, Innovation, Market Dynamics, Medical Management, Policy/Law/Regulation, Quality
Tagged Brian Klepper, Centers of Excellence, Health Care Cost, Incentives, Jerry Reeves, Medical Management, Walmart