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.

Continue reading “Using Strong Carrots and Sticks To Drive Health Care That Works”

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.

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

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.

Continue reading “How Physician Practices Can Prepare for a Health Care Marketplace”

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.)

Continue reading “Seriously Testing The ACO Waters”

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.”

Continue reading “When Employers Get Serious About Managing Health Care Risk”

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.

Continue reading “Why Only Business Can Save America From Health Care”

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.

Continue reading “Why EHRs Really Haven’t Made Us Healthier: A Response To Glen Tullman”

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.

Continue reading “A Broader Approach To Managing Health Care Risk”

Them, Not Us

Brian Klepper

Posted 1/7/13 on Medscape Connect’s Care and Cost Blog

“How many businesses do you know that want to cut their revenue in half? That’s why the healthcare system won’t change the healthcare system.”

Rick Scott, Governor of Florida
Former CEO, Hospital Corporation of America
Quoted by Vinod Khosla at the Rock Health Innovation Summit in August (video here)

BK 711ahip-logoThe Washington Post recently reported that health plan lobbyists, charts at the ready, are working to convince legislators that unreasonable health care costs are everyone else’s fault. Karen Ignagni, the Executive Director of America’s Health Insurance Plans (AHIP) declared: “If you’re going to have a debate and discussion about what’s driving health care costs, you have to get under the hood.”

Her first argument is that many practices of doctors, hospitals, drug, device and health information technology firms make health care cost more than it needs to be. This is well-documented and true. But her second, that health plans are different than the rest of the industry, and that they do not negatively influence care or cost, is pure marketing.

Continue reading “Them, Not Us”

Putting Physician Practices Into Context

Brian Klepper 

Posted 12/11/12 on Medscape Connect’s Care & Cost Blog 

An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. 

Jack Welch

Physicians and medical societies in all specialties would do well to take a look at this article, published in the November issue of The Journal of Oncology Practice. Authored by Elaine Towle, Thomas Barr and James Senese of Oncology Metrics (a subsidiary of the oncology electronic health record firm Altos Solutions), this year’s National Oncology Practice Benchmark Report aggregates and analyzes data on a wide variety of clinical, operational and financial business metrics. There are 89 charts in categories – work units, patient visits, revenue, practice expense, pharmacy operations, clinical trials, and staffing/productivity – from oncology practices around the country. The focus here is on the practice. The report does not delve into relative patient quality or cost.

The authors have deep experience with oncology practice, and they note that the cornerstone of their firm’s approach is “to promote the discovery and adoption of best practices.” Towle and Barr previously ran oncology practices in New Hampshire and Ft. Worth. This is their 7th annual report, meaning they have had the benefit of years of immersing in and refining their work product.

Continue reading “Putting Physician Practices Into Context”

When Employers Collaborate To Manage Health Care Costs

Brian Klepper

Published 12/09/12 in the Eau Claire, WI Leader-Telegram

Note from Brian: This piece appeared last weekend in the Eau Claire, WI newspaper, and was written with the encouragement of employers in that community who, rightly, believe they’ve been raked over the coals on their health care costs.

This argument is mainly directed at other employers, as a way of explaining that there are alternatives. That said, the dynamics described here occur in almost every community in the country.

BK 711Even compared to national health care cost growth that has skyrocketed nearly 4 times as fast as general inflation for more than a decade, Wisconsin stands out and northwest Wisconsin stands out more. Eau Claire’s health care cost burden is a whopping 16 percent higher than the national average. This is pricing many individuals and employers out of the coverage market and sapping the region’s economic vitality and competitiveness.

As Robert Kraig meticulously details in Citizen Action’s Wisconsin Health Insurance Cost Rankings 2012, Eau Claire is Wisconsin’s second-highest cost health care market, with 2011 monthly premiums of $750.46, 9.1% higher than the state average of $687.68. (La Crosse is 1st, only a hair higher at $756.70.)

Continue reading “When Employers Collaborate To Manage Health Care Costs”

Following the Money

Brian Klepper

Posted 12/06/12 on Medscape Connect’s Care & Cost Blog

On The Health Care Blog, veteran analyst Vince Kuraitis reviews a report from the consulting firm Oliver Wyman (OW), arguing that the trend toward reconfiguring health systems to deliver more accountable care is more widespread than any of us suspect.

“The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise,” our analysis finds that 25 to 31 million Americans already receive their care through ACOs-and roughly 45 percent of the population live in regions served by at least one ACO.”

Continue reading “Following the Money”

How Primary Care Became the Job Nobody Wanted (and How To Fix It))

Brian Klepper

Posted 11/21/12 on Medscape Connect’s Care & Cost Blog

Here a link on SlideServe to my plenary presentation on CMS’ relationship with the AMA’s Relative Value Scale Update Committee (RUC), and how/why it has undermined American primary care. I delivered this overview at the Medical Home Summit in Philadelphia earlier this year.

Meanwhile, the team – led by Paul Fischer MD, a primary care physician in Augusta, GA – that sued CMS and HHS over their failure to require the RUC’s to adhere to the requirements of the Federal Advisory Committee Act is awaiting the appeal court’s ruling that will determine whether the case is at an end or whether it moves forward into discovery.

Given the seriousness and far-reaching impacts of the problem, it is shameful that America’s primary care medical societies have shrunk from supporting this action. In doing so, and in yearning to continue to align and participating with the AMA and the RUC, they have become complicit with them. They have not only compromised the primary care physicians who are their members, but ignored the much larger problems of patients who are too often put at unnecessary risk through care they don’t need, and purchasers – individuals, businesses and governments – who have been exploited for more than 2 decades with costs that are double those in other industrialized nations.

Arriving at the Beginning

Brian Klepper

Posted 11/12/12 on Medscape Connect’s Care & Cost Blog

The most striking aspect of the election was that it decisively clarified the philosophical preferences of most Americans. And because the outcome was largely determined by minorities, women, and the young, it appeared to be a much broader and more independently-minded vision than most pundits have given the electorate credit for. That unexpectedly portends big changes.

Peggy Noonan’s analysis in the Wall Street Journal quotes a brutal summation by conservative activist Heather Higgins:

A majority of the American people believe that the one good point about Republicans is they won’t raise taxes. However they also believe Republicans caused the economic mess in the first place and might do it again, cannot be trusted to care about cutting spending in a way that is remotely concerned about who it hurts, and are retrograde to the point of caricature on everything else.

Continue reading “Arriving at the Beginning”

Irresistible Forces

Brian Klepper

Posted 10/28/12 on Medscape Connect’s Care & Cost Blog

At our first meeting years ago, Tom Emerick, Walmart’s then VP of Global Benefits, told me,

“No industry can grow indefinitely at a multiple of general inflation. It will eventually become so expensive that purchasers will simply abandon it.”

Continue reading “Irresistible Forces”