Physicians, Health Systems and the Drive For Market Dominance

Brian Klepper

Posted 5/23/13 on Medscape Connect’s Care & Cost Blog

BK 711Several 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.

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Posted in Health Care Cost, Innovation, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform | Tagged , , , , , , , , | 2 Comments

On Compassion

Dov Michaeli

Posted 5/12/13 on The Doctor Weighs In

For Joel Klepper, who can do it all

My friend’s son, Joel Klepper, a student at the University of Oregon, sent his father a summary of a talk by the Dalai Lama at the university. I am not going to quote the whole report, brilliant as it is. But a few choice paragraphs illuminate the thought-provoking talk of this awe-inspiring religious leader. Here is the Dalai Lama on religion and compassion:

“He started by pointing out that all of the world’s major religions have compassion and love as their defining message, and pointed to the many people that all of the major religious traditions have produced who have used it as inspiration to devote their lives to compassion and the good of humanity. He was careful to differentiate between religion and religious institutions, saying it was the latter that was susceptible to corruption, and therefore it is the institutions that drive people away, but that generally that people don’t tend to have a problem with most core tenets, but that also as human understanding advances, it is critical that religion adapt itself, and not become mired in tradition or dogma when they clash with reality. Throughout, he was big on practicality and realism”.

The most surprising to me was the broad-mindedness of the leader of Tibetan Buddhism:

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On Seeing The Dalai Lama

Joel Klepper

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.

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Using Strong Carrots and Sticks To Drive Health Care That Works

Brian Klepper

Posted 5/09/13 on Medscape Connect’s Care & Cost Blog

ALP_H_BK_0010On 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.

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Posted in Benefits, Conflicts of Interest, Health Care Cost, Innovation, Market Dynamics, Medical Management, Policy/Law/Regulation, Quality | Tagged , , , , , , | 4 Comments

Why Aren’t Primary Care Physicians More Ticked off about the RUC? An Interview with Brian Klepper

Brandon Glenn

Published 4/30/13 in Medical Economics

If primary care physicians have a bigger enemy than the RUC, Brian Klepper, PhD, hasn’t heard about it.

The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is a 31-physician panel that wields enormous influence with the Centers for Medicare & Medicaid Services (CMS) in setting the relative values of medical procedures, which are then used to determine reimbursement levels. CMS has historically accepted about 90% of the panel’s recommendations.

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Posted in Analytics, Brian Klepper, Health Care Cost, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics | Tagged , , , , , | 2 Comments

How Physician Practices Can Prepare for a Health Care Marketplace

Brian Klepper

Posted 4/21/13 on Medscape Connect’s Care and Cost Blog

BK 711What is the path forward for physicians who want to remain in private practice, outside the constraints of health system employment? How will the environment change and what new demands will that place on practices and physicians? What follows are the observations of one industry-watcher who has worked on all sides of health care, but who now spends most his time focused on the interests of those who pay for it. No crystal ball, but several trends are clear.

There are now concrete signs that health care’s purchasers are exhausted and seeking new solutions, that a competitive marketplace is emerging and getting increasing traction. As they abandon ineffective approaches, the paradigm that has dominated the industry for the past 50 years will be upended. The financial pressure felt by buyers will transfer to the supply side health industry that has come to take ever more money for granted.

For decades, fee-for-service payment, inclusive health plan networks, and a lack of quality, safety and cost transparency have been enforced by health industry influence over policy, effectively neutralizing the power of market forces.

Without market pressure, physicians have felt little need to understand their own performance relative to that of their peers. The variation of physician practice patterns within specialties has been high, with some physicians’ “optimizing their revenue opportunities” by veering wildly away from evidence-based practice. Even so, until recently in this dysfunctional environment, it has been nearly impossible to identify high and low performers.

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Posted in Analytics, Brian Klepper, Conflicts of Interest, Health Care Cost, Innovation, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality | Tagged , , , , | 6 Comments

Seriously Testing The ACO Waters

Brian Klepper

Published April 2013 in Accountable Care News

BK 711If necessity is the mother of invention, then tentativeness and ambiguity are the parents of procrastination. In health care, fee-for-service remains the dominant paradigm, so the ACO movement, lacking almost any semblance of true financial risk, is far more bark than bite. What’s the point of health systems going to all the trouble – and there’s no question it will be an overwhelmingly complicated overhaul – required to move from volume to value if it isn’t a pressing concern? Or, as several health system CFOs have expressed it, “Why should we change what we do and take less money until we have to.” There is no immediate imperative.

But there are some strategic imperatives. Overall health care cost has continued to explode. Kaiser Family Foundation data show that, for more than a decade, health plan premiums have risen 4.5 times as fast as general inflation and more than 3.5 times workers earnings. A recent RAND calculation showed that $4 of every $5 of household income growth is now absorbed by health care. It doesn’t seem likely that much more revenue can be squeezed from group and individual purchasers. (Though many of us have been saying that for decades.)

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Posted in Analytics, Conflicts of Interest, Health Care Cost, Innovation, Medical Management, Politics, Quality, Reform | Tagged , , , , | 2 Comments

When Employers Get Serious About Managing Health Care Risk

Brian Klepper

Posted 4/07/13 on Medscape Connect’s Care & Cost Blog

ALP_H_BK_0010RostLast week I visited with Gary Rost, an unassumingly knowledgeable man and the Executive Director of the Savannah Business Group (SBG), arguably one of the most effective health care coalitions in the country. Their offices are only a couple hours away from my home on the Northeast Florida coast, so it was a quick trip up.

SBG was founded in 1982 as a way of mobilizing employer buying power for better care at lower cost. Its reach now extends beyond Savannah about an hour south, north into South Carolina and west from the coast. The vision described on its site is straightforward and easy for purchasers to appreciate:

“SBG endorses and adheres to the principles of value-based purchasing: performance measurement, transparency, public reporting, pay for performance, informed consumer choice and collective employer leadership.”

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Posted in Benefits, Brian Klepper, Consumerism, Health Care Cost, Innovation, Market Dynamics, Medical Management, Policy/Law/Regulation, Politics, Quality, Special, Tools | Tagged , , , | 7 Comments

Why Only Business Can Save America From Health Care

Brian Klepper

Posted 3/24/13 on Medscape Connect’s Care and Cost Blog

BK 711For a large and growing number of us with meager or no coverage, health care is the ultimate “gotcha.” Events conspire, we receive care and then are on the hook for a car- or house-sized bill. There are few alternatives except going without or going broke.

Steven Brill’s recent Time cover story clearly detailed the predatory health care pricing that has been ruinous for many rank-and-file Americans. In Brill’s report, a key mechanism, the hospital chargemaster, with pricing “devoid of any calculation related to cost,” facilitated US health care’s rise to become the nation’s largest and wealthiest industry. His recommendations, like Medicare for all with price controls, seem sensible and compelling.

But efforts to implement Brill’s ideas, on their own, would likely fail, just as many others have, because he does not fully acknowledge the deeper roots of health care’s power. He does not adequately follow the money, question how the industry came to operate a core social function in such a self-interested fashion or pursue why it has been so difficult to dislodge its abuses. For that, we need to turn our attention to a far more intractable and frightening problem: lobbying and the capture of regulation that dictates how American health care works.

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Posted in Analytics, Benefits, Conflicts of Interest, Health Care Cost, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform | Tagged , , , , | 7 Comments

The Reality of Health Care Cost

Brian Klepper

BK 711This beautifully written letter was forwarded after an interview with me on health care cost appeared in a Florida newspaper.

Many of us with coverage often think in abstract terms about working families that do not have access to employer-sponsored coverage, and that must shoulder the overwhelming burden of costs on their own. As Mrs. Doss describes, health care costs dominate her family’s economic life and drive many of their most important decisions.

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Posted in Benefits, Brian Klepper, Consumerism, Health Care Cost, Market Dynamics, Policy/Law/Regulation | Tagged , , , | Leave a comment

Why EHRs Really Haven’t Made Us Healthier: A Response To Glen Tullman

Brian Klepper

Brian Klepper, Health Care Analyst and TDWI Writers' Group

Recently-fired Allscripts CEO Glen Tullman waxed progressive in a self-promotional Forbes article last week, describing the ways past and forward for electronic health records (EHRs) and health information technology (HIT). He may have been trying to recover from a damning New York Times article that clearly illustrated the relationships between campaign contributions, influence over health information technology policy, and business success.

Tullman recalls building EHRs that moved many physicians away from paper and the errors it fosters. He calls out David C. Kibbe, MD as an example of the forces wanting to preserve paper and opposing EHRs, with quotes from a 2008 blog post suggesting that the current crop are “notoriously expensive,” “difficult to implement” and unable to demonstrate care quality improvements. He predicts that, in the future, the industry will leverage open platforms and interoperability, yielding new monitoring and management utilities that can facilitate better care at lower cost.

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Posted in Analytics, Brian Klepper, Health Care Cost, Health IT, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality, Reform | Tagged , , , , , , | 3 Comments

Truth at the End of Life

Elaine Waples

Posted 3/5/13 on TEDMED

Elaine Waples and Her Husband, Brian Klepper

Most of us have spent some time thinking about our own deaths. We do it with a sense of dreadful curiosity, but then we push it aside with “well, we’ve all got to go sometime.”

Unlike most people, I probably know the how, the why, and maybe even the when of that event. It is profound information that turns the world upside down for us, our families, friends and caregivers.

I have cancer that is incurable, aggressive, and has negligible survival odds. My chemotherapy is a long shot. I will leave a spouse, children, siblings and a life that I love and cherish. I cannot imagine existence without them.

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A Broader Approach To Managing Health Care Risk

Brian Klepper

Posted 2/15/13 on Medscape Connect’s Care & Cost Blog

BK 711Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.

The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.

The Complexity of Health Care Risk

The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.

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The RUC, Health Care Finance’s Star Chamber, Remains Untouchable

Brian Klepper

Posted 2/1/13 on The Health Affairs Blog

BK PhotoOn January 7, a federal appeals court rejected six Georgia primary care physicians’ (PCPs) challenge to the Centers for Medicare and Medicaid Services’ (CMS) 20-year, sole-source relationship with the secretive, specialist-dominated federal advisory committee that determines the relative value of medical services. The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is, in the court’s view, not subject to the public interest rules that govern other federal advisory groups. Like the district court ruling before it, the decision dismissed the plaintiffs’ claims out of hand and on procedural grounds, with almost no discussion of content or merit.

Thus ends the latest attempt to dislodge what is perhaps the most blatantly corrosive mechanism of US health care finance, a star-chamber of powerful interests that, complicit with federal regulators, spins Medicare reimbursement to the industry’s advantage and facilitates payment levels that are followed by much of health care’s commercial sector. Most important, this new legal opinion affirms that the health industry’s grip on US health care policy and practice is all but unshakable and unaccountable, and it appears to have co-opted the reach of law.

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Posted in Brian Klepper, Conflicts of Interest, Health Care Cost, Market Dynamics, Physicians, Policy/Law/Regulation, Politics, Quality, Reform | Tagged , , , | 1 Comment

Hospitals: Are We All Talking?

Elaine Waples

Elaine Headshot 11713Complications from my cancer sent me to the hospital again recently. The news that I was in trouble came unexpectedly from my oncologist’s office Thanksgiving eve, following a routine blood test. “Your liver numbers are out of whack.” My response was “Really?” as if I’d been notified that my driver’s license had expired.

I was diagnosed with a blocked bile duct and I missed the turkey and cranberry sauce. My oncologist called in a gastroenterologist, who scheduled a procedure to open the blocked duct. But my tissues were too distorted to complete the procedure, so the next day an interventional radiologist inserted a bile drain. I met him seconds before I drifted into sedation. When it was over and I was awakening, he offered me a cheery “good luck” as I rolled out the door. I never saw him again.

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