Category: Tools

Applications, programs and devices that are proven to improve health care quality, safety and cost.

Getting Beyond Fee-For-Service

Brian Klepper

Posted 12/02/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010The 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?

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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” →

Are You Ready for Intense Price Competition?

Note from Brian: The article below describes my recent keynote address to a large meeting of imaging center administrators, and appears in the Sept 2012 Radiology Today. I’m reposting it because it accurately reflects, in depth, the message that I tried to deliver.

Remarkably, the audience was evenly divided in their evaluations. Half thought it was a very important but difficult to hear talk. The other half thought I was a jerk and it was the worst talk they’d ever heard. My take on this is that the responses reflected an industry that has become comfortable with a lack of accountability and market forces, and that is highly threatened by change.

Jim Knaub

Published in Radiology Today, September 2012, 13:8, p18

A keynote speaker told administrators to expect businesses threatened by ever-increasing healthcare costs with new approaches that will change how imaging organizations compete.

When Brian Klepper, PhD, delivered his keynote speech to the audience at the AHRA annual meeting in Kissimmee, Florida, last month, it was not the feel-good speech of the summer. Klepper, whose companies develop and manage worksite primary care clinics for employers and manage specialty care for those employees, told the audience that his company had recently negotiated a deal in Indiana for $450 MRI exams in a market that had technical fees ranging between $1,750 and $3,200. That was the opposite of a warm and fuzzy message to the 900 or so imaging administrators attending the meeting at the Gaylord Palms Resort and Convention Center.

“Somebody like me is going to come in to your market, and your volumes are going to plummet because there is no way you can compete against a $450 imaging price when you’re currently used to getting $2,800 or whatever you’re getting,” Klepper told the audience. “That is the problem.”

Continue reading “Are You Ready for Intense Price Competition?” →

The Most Important Health Care Group You’ve Never Heard Of

Brian Klepper and Paul Fischer

Posted 8/06/12 on Medscape Connect’s Care and Cost Blog

Excessive health care spending is overwhelming America’s economy, but the subtler truth is that this excess has been largely facilitated by subjugating primary care. A wealth of evidence shows that empowered primary care results in better outcomes at lower cost. Other developed nations have heeded this truth. But US payment policy has undervalued primary care while favoring specialists. The result has been spotty health quality, with costs that are double those in other industrialized countries. How did this happen, and what can we do about it.

American primary care physicians make about half what the average specialist takes home, so only the most idealistic medical students now choose primary care. Over a 30 year career, the average specialist will earn about $3.5 million more. Orthopedic surgeons will make $10 million more. Despite this pay difference, the volume, complexity and risk of primary care work has increased over time. Primary care office visits have, on average, shrunk from 20 minutes to 10 or less, and the next patient could have any disease, presenting in any way.

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Why Medical Management Will Re-Emerge

Brian Klepper

Posted 7/31/12 on Medscape Connect’s Care and Cost

Several years ago I had dinner with a woman who had served in the late 1990s as the national Chief Medical Officer of a major health plan. At the time, she said, she had developed a strategic initiative that called for abandoning the plan’s utilization review and medical management efforts, which had produced heartburn and a backlash among both physicians and patients. Instead, the idea was to retrospectively analyze utilization to identify unnecessary care.

This was at the height of anti-managed care fervor. A popular movie at the time, As Good As It Gets, cast Helen Hunt as the mother of a sick kid. When someone mentioned an HMO, Ms. Hunt’s character let fly a flurry of expletives. America’s theater audiences exploded in applause.

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Patent Pools Pushed To Make Drugs Affordable in Developing World

Merrill Goozner

Published 5/9/12 in The Fiscal Times

Amid a growing crisis in financing treatments for AIDS, tuberculosis and malaria in the developing world, an arm of the World Health Organization will meet in Geneva later this month to consider alternative ways of producing lower-cost drugs, vaccines and diagnostic tools to fight the those diseases in poor countries.

A background report issued last month by a working group of the World Health Assembly called for establishing a global research and development treaty that would beef up research into cures for so-called neglected tropical diseases. It also called for the treaty to create mechanisms for ensuring the next generation of drugs for fighting those diseases could be produced by generic firms at prices barely above the cost of manufacturing.

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Anatomy of a Walletectomy

Merrill Goozner

Posted 4/25/12 on Gooz News

It all began when Dr. Renee Hsia of the University of California at San Francisco received a simple request from a good friend who had checked into a local hospital for an emergency appendectomy. The fairly routine procedure took place 19,368 times during 2009 in California.

After he returned home, he received a bill from the hospital for $19,000, his co-payment for the parts of the $54,000 operation that his insurance company didn’t cover. “He wanted to know if this was the usual and customary charge for a one-day stay in the hospital,” she recalled.

And thus began her research into pricing variability in the state, which was published this week in the Archives of Internal Medicine. The prices ranged from $1,529 to $182,955 with the median hospital charge of $33,611, the study showed.

Continue reading “Anatomy of a Walletectomy” →

The FDA Fails to Stop Deceptive Dementia Drug Advertising

Kenneth Lin

Posted 3/27/12 on The American Family Physician Community Blog

In the March 15, 2011 issue of American Family Physician, Drs. Mark Graber, Robert Dachs, and Andrea Darby-Stewart analyzed an industry-funded trial that compared the effects of two daily doses of the Alzheimer’s disease drug donepezil (Aricept): a new 23 mg version and the existing 10 mg version that would soon lose its patent protection. Despite the trial authors’ finding that the higher dose of donepezil slightly improved cognitive outcomes, AFP Journal Club commentators determined that this difference was clinically unimportant, and was greatly outweighed by the higher frequency of adverse effects in patients using the higher dose:

First, the authors did four comparisons. Three were negative and only one was positive. And the one that was positive was only two points different on a 100-point scale. So, although this is statistically significant, it is clinically meaningless. There is no discernible benefit for the patient or caregivers. … Also, the drop-out rate in this study was an astounding 30 percent in the higher-dose group and 18 percent in the lower-dose group.
Continue reading “The FDA Fails to Stop Deceptive Dementia Drug Advertising” →

The GOP Budget, Fiscal Responsibility and Part D

Joe Paduda

Posted 4/06/12 on Managed Care Matters

Rep. Paul Ryan (R WI) and the House Republicans are touting their budget as fiscally responsible and prudent. What Mr Ryan conveniently forgets, or more likely avoids, is this:

Eight short years ago he – and his GOP buddies – passed the single largest entitlement program since Medicare – the Medicare Part D drug benefit – with no dedicated financing, no offsets and no revenue-generators – the entire future cost –which is now around sixteen trillion dollars [see page 148] – simply added to the federal budget deficit.

According to Bruce Bartlett writing in the Fiscal Times, “By 2030, Part D alone will cost taxpayers 1 percent of GDP.”

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“Doctors call for end to five cancer tests, treatments”

Tom Emerick

Posted 4/6/12 on Cracking Health Costs

So reads the headline in a Reuters story on April 4, 2011.

Let’s linger on the notion that they are exposing procedures that are “harmful” yet “routinely prescribed.” Giving harmful care to cancer patients is not rare, but “routine”. The words immoral, unethical, unscrupulous, and venal come to mind.A private task force was led by Dr. Lowell Schnipper, a cancer physician at Beth Israel Deaconess Medical Center. The task force was organized by the American Society of Clinical Oncology.  The goal was to “…to identify procedures that do not help patients live longer or better or that may even be harmful, yet are routinely prescribed.” [Italics mine.]

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Sustainable Health Spending Under the Ryan Path for Federal Non-Health Spending

Charles Roehrig

Posted 4/5/12 on the Altarum Institute’s Health Policy Forum

Background

If you have followed Parts I and II of this series, you will be aware of the key role played by federal non-health spending in my calculation of the sustainable growth rate in national health expenditures. Given the expanded coverage provisions of the Affordable Care Act, I argued that the sustainable rate of growth in health spending is largely determined by what the nation chooses to allocate to federal health spending in future years. And this allocation is simply the difference between what the nation is willing to provide in total tax revenues and the amount of those revenues being set aside for non-health federal spending.

For example, suppose the nation wishes to keep tax revenues at 18 percent of GDP and set aside 13.5 percent of GDP for non-health spending (under a balanced primary budget). (1) Then the amount available for federal health spending would be 4.5 percent of GDP.  Using 2035 as the target year for bringing federal health spending in line with this target, I calculated that the corresponding growth rate in national health expenditures would be 2.6 percent annually, starting in 2012. This is 2.2 percent below the expected GDP growth rate over this period, and lowers the health spending share of GDP to 10.8 percent by 2035—a stark contrast to the 2011 health spending growth rate (4.5 percent) and share of GDP (18.1 percent).

Continue reading “Sustainable Health Spending Under the Ryan Path for Federal Non-Health Spending” →

What Makes a Person Expensive in Healthcare? Not What Most People Think.

Posted 4/4/12 on the HCMS Blog

A question from the audience last month: “We spend the most in healthcare on a small portion of really sick people. You don’t expect them to shop for care during an emergency do you?”

I was giving a presentation about the important role that cost-conscious consumers can and should play in healthcare. The person asking the question, as everyone could tell, disagreed with the idea. While I doubt anything changed her mind, her loaded question illustrates some common misconceptions in healthcare: 1) high costs are driven by catastrophic medical events; and 2) treatments for these severe conditions leave little room for discretion and often require quick medical  decisions.

Continue reading “What Makes a Person Expensive in Healthcare? Not What Most People Think.” →

Four Perfect Questions

Elaine Waples

In the fall of 2010, Atul Gawande, surgeon at Brigham and Women’s Hospital in Boston and an associate professor at Harvard Medical School, delivered a touching speech at the October New Yorker Festival.  My husband attended with a friend and, because he said it so profoundly impacted the audience, I watched it myself on video the next day. It was indeed amazing. Dr. Gawande, author and national health care presence, spoke unabashedly about his lack of skill in conducting end-of-life conversations with his patients.

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Is Your Hair On Fire Yet?

Joe Paduda

Posted 4/5/12 on Managed Care Matters

The single biggest crisis facing workers comp is NOT the market cycle, employment, rate adequacy, or regulatory changes.

It is opioids. As Gary Franklin MD, Washington state fund’s Medical Director says, this is a “hair on fire” issue.

I’m not talking about the $1.4 billion employers spend on these drugs, nor am I referring to the other medical costs incurred by claimants on opioids or the dollars wasted on diverted drugs or the hundreds of claimants dead from opioids prescribed for their injury; not even the disastrous personal impact on claimants and their families.

Continue reading “Is Your Hair On Fire Yet?” →