Why Employers Must Collaborate On Health Care

Brian Klepper

Published in the Columbus, GA Ledger-Enquirer on Sunday, 9/15/13

BK 711I 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.

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The RUC (Again): Is there a Light at the End of the Tunnel? A Conversation with Brian Klepper

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David Harlow

Posted August 13, 2013 on HealthBlawg

Tunnel of Light TJ Blackwell Flickr CC http://www.flickr.com/photos/tjblackwell/3362987463/

dharlow-headshot-0210-60kb-2Recently, 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.

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The RUC Is Bad Medicine: It Has To Go

Brian Klepper

Posted 8/12/13 on Medscape Business of Medicine

BK 711“One of the biggest mistakes we made … is that we took the RUC … back in 1992 and gave it to the AMA. … It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact.”

This was Tom Scully, former Bush II Administrator of the Centers for Medicare and Medicaid Services (CMS), previously the Health Care Finance Administration (HCFA). He was a panelist in a May 10, 2012 Senate Finance Committee RoundTable discussion by former HCFA/CMS Administrators and has become one of the RUC’s most outspoken critics. He was explaining how the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC), a group that asked if it could help the government by overseeing a valuation process for medical services, came to dominate and distort the pricing used in Medicare, Medicaid and commercial health plans.

Mr. Scully echoed this sentiment recently.

“The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild. … Having the AMA run the process of fixing prices for Medicare was crazy from the beginning.”

Gail Wilensky, HCFA Administrator under Bush I, was wistful. “It happened innocently enough.”

It is remarkable and compelling to hear these federal health program ex-stewards express regret about a fiasco they had a hand in. Their “mea culpas” are almost palpable. Mr. Scully, in a recent Washington Post video interview, gave a quick aside, “It’s partially my fault.”

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Why Congress Should Pass The Accuracy In Medicare Physician Payment Act

Brian Klepper and Paul Fischer

Posted 8/09/13 on The Health Affairs Blog

ALP_H_BK_0010Paul FischerWith 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.

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Hurtling Down the Road to Ruin

Brian Klepper and David C. Kibbe

Posted 6/21/13 on Medscape Internal Medicine

BK 711dckibbeA recent New York Times article that focused on colonoscopies highlighted the questionable science, predatory unit pricing, and overutilization that characterize this procedure and much of US healthcare. Patients get routine screenings that, in other industrialized countries, cost one half to one thirtieth of what they do here, then are gobsmacked by bills equivalent to the cost of a good used car. Reporters and healthcare writers have covered this topic in all its intricacies thousands of times.

But Elizabeth Rosenthal, the Times reporter, zeroed in on the root of the crisis, which is how healthcare interests have shaped market and policy forces to their own ends. “The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.”

One result is that healthcare’s cost drivers are a multiheaded monster, frustrating simplistic solutions. Many physicians own a financial stake in the care they deliver, rather than being paid to manage the care process well. Pricing is typically unrelated to cost or quality, varies wildly among providers, and often comprises dozens of components that are impossible to understand beforehand. Insurance companies may make a percentage of total cost and so are incentivized to allow healthcare to cost more. Every level of the system is rigged.

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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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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