Predatory Health Care

Brian Klepper

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.”

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A Better Way To Manage Care and Cost

Brian Klepper

http://boards.medscape.com/forums?128@864.cQ5Savfkkqo@.2a59c1b3!comment=1

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.

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Why Employers Must Collaborate On Health Care

Brian Klepper

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.

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

David Harlow

Posted August 13, 2013 on HealthBlawg

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

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.

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DOTmed – An Interview with Brian Klepper

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.

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The RUC Is Bad Medicine: It Has To Go

Brian Klepper

Posted 8/12/13 on Medscape Business of Medicine

“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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Physicians, Health Systems and the Drive For Market Dominance

Brian Klepper

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.

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Seriously Testing The ACO Waters

Brian Klepper

Published April 2013 in Accountable Care News

If 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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Why Only Business Can Save America From Health Care

Brian Klepper

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

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

Brian Klepper

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

Brian Klepper

Posted 2/1/13 on The Health Affairs Blog

On 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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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.”

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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.

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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.”

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