Predatory Health Care

Brian Klepper

Posted 11/17/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010Recently 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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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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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.

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Our Aim Is At 100%. Other Than That, We Are At Zero

Paul Levy

Posted 3/21/12 on Not Running a Hospital

The power of transparency, as I have noted, is that it provides creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses, and administrators to seek constant improvements in the quality and safety of patient care.

MIT’s Peter Senge explains this more fully in his book The Fifth Discipline:

[T]he gap between vision and current reality is . . . a source of energy. If there was no gap, there would be no need for any action to move toward the vision. Indeed, the gap is the source of creative energy. We call this gap creative tension.

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Ohio Steps Backward On Transparency

Paul Levy

Posted 10/31/11 on Not Running a Hospital

After expressing enthusiastic support for many quality initiatives by hospitals in Ohio, I must report with disappointment an action by their trade association to dismantle the state’s hospital transparency website.  This article summarizes:

The Ohio Hospital Association (OHA) is backing a piece of recently introduced legislation that would free hospitals from the requirement to report performance data such as measures of heart and surgical care, infection rates and patient satisfaction.

The reason?  Alleged duplication of effort with the CMS Hospital Compare website.  According to an OHA spokesperson:

The time and effort spent on reporting the data to the state as well as the federal government reduces the resources Ohio hospitals can devote to patient care.

To which I reply, “Bull twaddle!” (This is a family blog, or I would use stronger terms.)

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Less is More: Top-Performing Hospitals Spend Less on Pharmacy and Supplies

Jane Sarasohn-Kahn

First posted 9/11/11 on Health Populi

The Top 100 performing hospitals in the U.S. spend 13% less on supply costs and 6% less on pharmacy costs, according to a research brief fromThomson ReutersAssociations Between Supply and Pharmacy Service Intensity, System Membership, and Hospital Performance.

Lower pharmacy intensity translated into lower inpatient and post-discharged mortality, and reduced complications, in the high-performing hospitals. Furthermore, these hospitals had better safety records, and shorter lengths-of-stay.

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U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years

Jane Sarasohn-Kahn

First posted 9/08/11 on Health Populi

Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.

For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.

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The Practice of Medicine: From Marcus Welby to ???

Jaan Sidorov and Vince Kuraitis

First posted 8/17/11 on e-CareManagement Blog

Physicians face great uncertainty. According to a survey conducted byThe Physicians Foundation, the great majority of physicians (89%) believe the traditional model of independent private practice is either “on shaky ground” or “is a dinosaur soon to go extinct.”

In the face of this uncertainty, many physicians are jumping to a conclusion that “I have to sell my practice to the hospital.” In this post of our series on The 100 Year Shift, we will examine physician practice.  We’ll show that the economic and clinical environment  is changing rapidly and that selling to the hospital is one option. However, it is not the only option.

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Physician-Hospital Relationships: The Hospital Morphs from Revenue Center to Cost Center

Vince Kuraitis and Jaan Sidorov

Part 3 of a Series

First posted 7/19/11 on eCareManagement

In our introductory posting of this series, we noted that economic incentives previously aligning doctor-hospital interests were changing. This creates the potential for The 100 Year Shift – physicians awakening to possibilities for stronger partnerships with payers than with hospitals.

In this post, we will zero in on the changing economic position of hospitals and the effect this is having on physician-hospital relationships. We will examine the trend of hospital employment of physicians and point out challenges and tensions for the future. [This is a long post…so now might be the time to refill your coffee cup.]

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Payment Transformation: From Volume to Value

Jaan Sidorov and Vince Kuraitis

First posted 7/7/11 on eCareManagement Blog

This is the 2nd installment in a series on the Strategic Realignment among Physicians, Hospitals and Payers

In our introductory posting, we suggested that a huge shift is underway in the health care industry.  Decades of hospital-physician cooperation are not only eroding, we suggest this trend could accelerate.  Instead of a natural clinical and economic affinity with hospitals, we foresee the potential for physicians forming a new dyad with insurer-buyers.

In this post, we will examine what we and many other commentators view as inevitable: the demise of volume-based payment systems and how the drive for greater value will cause physicians and insurers re-examine their normally antagonistic relationship.

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The 100 Year Shift? Introduction and Overview

Vince Kuraitis and Jaan Sidorov

First posted 7/5/11 on the eCareManagement Blog

Gazing at the horizon, we foresee the potential for a tectonic realignment among physicians, hospitals and payers. Here’s a quick visual representation:

Past100

Next100

This essay is the first of a seven part series. In this first post we will capsulize our vision of this potential 100 Year Shift, answer initial FAQs, and lay out the structure for the rest of the series.

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Getting Transparency Right

Paul Levy

First published 6/1/11 on Running a Hospital

This is about transparency, when it is useful and when it is not. The term is now an established part of the health care lexicon, but there is little substantive discussion about how it is being used.

As I said in an article in Business Week over three years ago:

There are often misconceptions as people talk about “transparency” in the health-care field. They say the main societal value is to provide information so patients can make decisions about which hospital to visit for a given diagnosis or treatment. As for hospitals, people believe the main strategic value of transparency is to create a competitive advantage vis-à-vis other hospitals in the same city or region. Both these impressions are misguided.

Transparency’s major societal and strategic imperative is to provide creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses, and administrators to seek constant improvements in the quality and safety of patient care.

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Let’s Just Keep Killing and Maiming Them

Paul Levy

First published 5/9/11 on [Not] Running a Hospital

Old patterns die hard. Back in March 2010, I posted a chart from the ACHE that Jim Conway had sent me showing a decrease in the ranking of quality and safety among priorities reported by hospital executives.

Now comes an article in Health, Medical, and Science Updates about a study by the Beryl Institute, entitled “The State of Patient Experience in American Hospitals.” Of those places surveyed, 51% were individual hospitals and 49% were hospital groups or systems. There was an even mix of urban, suburban, and rural facilities.
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Tire Kickers Need Not Apply – 8 First Impressions of the Medicare ACO Rule

Vince Kuraitis

First published 4/1/11 on e-Care Management

On March 31, CMS released the long-awaited “Medicare Shared Savings Program: Accountable Care Organizations” document (ACO Rule). Read the details here (strong suggestion: unless you’re working on your PhD in ACOs, start with the fact sheets).

There are many surprises. Here are eight first impressions on this 429 page tome:

  1. The bar has been set high…very high.  Tire kickers need not apply.
  2. Don’t expect to see many or any small ACOs.
  3. Patients will be confused by ACOs.
  4. Concerns over maintaining competition and avoiding antitrust are being taken seriously.
  5. CMS scores points for coordinating the ACO Rule across Federal agencies.
  6. CMS loses points for micromanagement and a controlling mindset.
  7. Possible losers — hospitals, ACO vendors.
  8. Possible winners — physicians, health plans.

The details follow.

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