The Users' Guide to the Health Reform Galaxy

From a doctor's point of view: making billing better, for better care

James E. Bailey, M.D., M.P.H., is a practicing internal medicine physician, director of the Healthy Memphis Data Center and a professor of medicine at the University of Tennessee Health Science Center.  In this post, he riffs on a topic covered by a recent RWJF-supported study, about how streamlining billing procedures will increase efficiency and help improve the quality and cost of health care.

Between the recession and new health reform law, Americans have been thinking a lot about what health care costs. I’ve heard many stories of patients and their families suffering because of the cost of getting care. I also know many primary care doctors and hospitals that do their best to provide everyone the care they need most are finding it difficult to keep their doors open. Again and again, I’ve seen how the health care people receive is often of poor quality, despite its high, and rising, cost. Sadly, Americans end up getting expensive, sometimes even dangerous procedures they don’t need while their most essential health care needs are overlooked.

The health reform debate tended to focus on big, divisive issues—and rightly so. Real change in our health care system will require hard choices to be made by everyone. But there is another big issue—not quite as divisive but nonetheless worth our attention—which is the system’s misuse of time.  Any physician can speak of large amounts of time—and frustration—spent dealing with administrative issues such as billing. As a doctor, I want most to spend my time with my patients. And so every minute I spend on administrative tasks is one less minute I have for seeing patients. And instead of an efficient system that empowers doctors to best do their work, we’ve created a time hog that dictates the priorities of our practices, inhibiting us from doing what we are called to do as physicians—provide care for those who need it.

This is why reform efforts must address issues like the simplification of billing and paperwork. A new study from RWJF's Changes in Health Care Financing and Organization initiative, “Saving Billion of Dollars—And Physicians’ Time—By Streamlining Billing Practices” suggests that it is possible to streamline the billing process, increase the quality of care and eliminate some unnecessary costs. The study examines the U.S. system of billing third-party payers for health care services, arguing that the system of third-party payment is excessively cumbersome, complicated and costly. We spend about twice as much on the billing bureaucracy in America than in any other country in the world.  While it is unlikely that we will be able to eliminate third-party middlemen from the system any time in the near future, there is much that can be done now.

Health Reformer's Lexicon: Bundled Payments

The Health Reformer's Lexicon is a weekly feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit.

The term: Bundled payments

The RAND Corporation defines bundled payments—also known as “episode-base payments”—as “a single payment for all services related to a specific treatment or condition … possibly spanning multiple providers in multiple settings. Providers would assume financial risk for the cost of services for a particular treatment or condition as well as costs associated with preventable complications.”

The Robert Wood Johnson Foundation and George Washington University’s Health Reform GPS project adds: “In contrast to fee-for-service payments, which can encourage a high volume of treatment, ‘bundling’ is thought to encourage more cost-effective care.”

(Bundling payments first requires categorizing different types of medical cases. These categories are known as diagnosis-related groups, or DRGs, which Medicare uses to bundle reimbursements to hospitals for inpatient care.)

Why it matters: A root cause of many of the U.S. health care system’s most profound problems—including soaring costs and uneven quality—is the fee-for-service payment system, which encourages overuse of health care services and fails to reward value. Among the alternative options, bundled payment schemes are attractive because they give hospitals and physicians incentives to coordinate care and to provide it more efficiently. Tied to evidence-based medical practice, bundling also promises to increase the value of our health care system—producing better outcomes for patients—in a fair and equitable way.

Roots: Physicians at the Texas Heart Institute introduced bundled payments in 1984 for cardiovascular surgical procedures. A 1987 study found that the Health Care Finance Administration could decrease its costs by more than $192 million (13 percent) under Texas’ payment plan. Since then, as U.S. health care expenditures have ballooned, health reformers have continued to advance the idea of bundling as a way to reform the fee-for-service payment system. The Balanced Budget Act of 1997 established new payment systems for most types of post–acute care services; independent initiatives such as PROMETHEUS Payment have worked on the practical design and implementation of evidence-informed case rates; and President Obama championed bundling in the recent health care reform debate.

Where the term appears: The final health reform bill calls for the creation of a national Medicare pilot program by the beginning of 2013, which will develop and evaluate bundled payment systems for acute inpatient hospital services, physician services, outpatient hospital services and post–acute care services for episodes of care that begin three days prior to hospitalizations and last an additional 30 days following discharge.
 
Under the new law, the government must also set up Medicaid pilot projects by 2012 that will use bundled payments to pay for episodes of care that include hospitalizations.

The Centers for Medicare & Medicaid Services is already experimenting with bundled payments through its Acute Care Episode demonstration, with sites in Texas, Oklahoma, Colorado and New Mexico.

And recently, several major health care providers in California announced plans to use bundled payments to pay for hip and knee replacements beginning in August. The lump-sum fee will cover a full range of medical treatments from surgery to 90 days of recovery.
 
Previous Lexicon entries include:
- Flexible Spending Accounts
- Value-Based Purchasing
- High-Risk Pools

Health Reformer's Lexicon: Value-Based Purchasing … and the latest from Health Wonk Review and Grand Rounds

The Health Reformer's Lexicon is a regular feature that examines key words, terms and phrases in health reform and explores their meaning and orbit.

Today’s term: Value-based purchasing.

According to the Agency for Healthcare Research and Quality, “the term basically refers to any purchasing practices aimed at improving the value of health care services, where value is a function of both quality and cost.” AHRQ continues: “It can be helpful to think about value as the result of quality divided by cost: Value = Quality ÷ Cost. This equation shows that value increases as quality increases, holding expenditure constant.”

The term is commonly associated with specific reforms such as pay-for-performance and discrete initiatives aimed at improving outcomes for a single disease or fraction of the population. But many health care experts argue value-based purchasing must be construed more broadly if it is to be an instrument of systemic reform. For example, the Urban Institute’s Robert Berenson and New America Foundation’s Len Nichols, writing in the Health Affairs blog, offer this definition: “Value-based purchasing uses a variety of tools to try to obtain the right kind and mix of services, of desired quality, at a reasonable cost.”

Why it matters: Susan DeVore, the CEO of the Premier healthcare alliance, has put it this way: “Cutting costs while improving care is the Holy Grail of health care reform.” And in the search for that Holy Grail, many health care policy experts believe value-based purchasing will be a critical tool.

Our current health care system, structured as it is around a fee-for-service model of reimbursement, rewards doctors and hospitals for the volume of services they provide, not the value of the care they deliver for patients or populations. This causes a host of problems, not least of which is overuse of health care services.  In the long run, health care reform can only be successful if the system rewards providers for giving patients the right care at the right time in the right way.

Roots: The concept of value-based purchasing has been gaining currency since the late 1990s as health care researchers and stakeholders have been systematically examining the design, implementation and outcomes of new purchasing strategies to replace fee-for-service.

Where the term appears: The newly enacted health care reform law establishes a hospital value-based purchasing program in Medicare to pay hospitals based on their performance on certain quality measures. The new law also calls for plans to be developed to implement similar value-based purchasing programs for skilled nursing facilities, home health agencies and ambulatory surgical centers.

Previous Lexicon entries include:
- Individual Mandate
- Uncompensated Care
- Flexible Spending Accounts

Meanwhile, in other news …

In this week’s Health Wonk Review on the HealthBlawg, David Harlow mentions our recent post on the definition of uncompensated care, joking that “Titanic doesn't even begin to capture the immenseness of the galaxy” when it comes to this topic. Also, the latest edition of Grand Rounds highlights Catherine Hess’ recent post on children’s health insurance coverage.

Health Reformer's Lexicon: Uncompensated Care

The Health Reformer's Lexicon is a weekly feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit.

The Term: Uncompensated care

Researchers from the Urban Institute define it as “medical care that is either freely donated by providers or results in an unpaid bill.”

The American Hospital Association defines it in more exacting detail as “the sum of a hospital’s ‘bad debt’ and the charity care it provides.” AHA elaborates:

In terms of accounting, bad debt consists of services for which hospitals anticipated but did not receive payment. Charity care, in contrast, consists of services for which hospitals neither received, nor expected to receive, payment because they had determined the patient’s inability to pay. In practice, however, hospitals have difficulty in distinguishing bad debt from charity care.

Why It Matters: In most cases, uncompensated care is provided to people without insurance. One estimate pegged the amount of uncompensated care given to uninsured people in America at more than $50 billion a year. Government underwrites more than $40 billion of it through Medicare and Medicaid Disproportionate Share Hospital (DSH) payments and other means.

Health-policy experts have argued that failing to enact reform would have led to greater levels of uncompensated care, perhaps even double the amount. Conversely, analysts have estimated that by insuring tens of millions more people, reform will dramatically decrease uncompensated care—and thus provide substantial spending offsets for federal and state governments.

Indeed, the final reform bill signed by President Obama reduces Medicare DSH payments by 75 percent and then begins adjusting them based on the percentage of the population uninsured and the amount of uncompensated care provided. Medicaid DSH payments are set to be reduced, too.

Roots: It is difficult to pinpoint precisely when the term “uncompensated care” was coined, but a January 1974 article in the American Society of Law & Medicine’s Medicolegal News hints at its origins:

When the Hospital Construction and Survey Act of 1946, more popularly known as the Hill-Burton Act, was passed by Congress, facilities receiving federal funding were required to assure that they would provide a “reasonable volume of services to persona unable to pay therefor.” The general legislative intent was that this would help provide access to medical care to a segment of the population that had hitherto been denied care or had been reluctant to seek it because of lack of financial resources…

As became increasingly apparent throughout the next two and one-half decades, many hospitals treated the statutory mandate to deliver uncompensated services as mere surplusage. If they were required to account at all for the volume of uncompensated care provided, they simply wrote off their bad debts for the year as Hill-Burton qualifying services…

Where the Term Appears: An expected drop in uncompensated care is factored into the final health reform law in the form of the aforementioned cuts to Medicare and Medicaid DSH payments. The term—and the dollar figures associated with it—also continue to appear in post-game analyses and debates about the costs, benefits and fallout of enacting reform.

Previous Lexicon entries include:
- Meaningful Use
- Patient Centered Medical Home
- Individual Mandate

The economic squeeze on the American middle class

Brian C. Quinn a senior program officer at the Robert Wood Johnson Foundation and Lynn A. Blewett, Director of the State Health Access Data Assistance Center (SHADAC) write about Cover the Uninsured Week.

The inner researcher(s) in us don’t generally get excited about spending days working on national awareness campaigns. But for the last eight years, Cover the Uninsured Week has provided an exciting opportunity for RWJF and SHADAC to explore interesting trends in health insurance coverage. This year, with families across the country struggling through the second recession in the last decade, it seemed natural for us to look into how those economic downturns have affected health insurance coverage.

The resulting report – Barely Hanging On: Middle-Class and Uninsured –released today, chronicles coverage trends in all 50 states from 2000 to 2008.  The findings? The first decade of this century has been marked by declines in employer-sponsored insurance coverage, greater costs to employers and employees for individual and family health insurance policies and significant erosion in private coverage.   Coupled with this we find significant declines in median incomes across the US.  This raises increasing concerns for the affordability of coverage for the middle class and a continued increase in the numbers of uninsured in nearly every state.

One finding that hits home for millions of people: America’s middle-class is bearing the brunt of these trends. Middle-income earners – families making roughly $45,000 to $85,000 a year – became uninsured at a pace faster than those who made more money, as well as those with lower incomes. In total, 13 million middle-income earners were uninsured in 2008 – about 2.4 million more than in 2000.

As the cost of health insurance premiums rose by 56 percent for family coverage (adjusted for inflation), many employers stopped offering health insurance coverage, shifted the increase in costs to employees in terms of higher premiums or changed the criteria for employees’ eligibility. By 2008, more than one in five people who work in firms that offer health insurance weren’t eligible for the benefit. For those employers who still paid the bulk of their employees’ insurance premiums, rising costs have been passed on to workers, likely causing some workers to drop their work sponsored coverage. In all, 21 percent of employees who worked for firms that offered employer-sponsored insurance (ESI) in 2008 did not accept or “take up” the offer.  Among the middle class, just 66 percent now receive insurance through their employer, a drop of seven percentage points since 2000.  

ESI has long been the mainstay of health coverage for middle-class families, who typically do not qualify for government insurance programs. Among middle-income Americans, only about half of the decline in employer-sponsored coverage from 2000 to 2008 was offset by increased enrollment in government insurance programs. For people who earned less money, declines in ESI were even steeper, but those numbers were almost completely offset by increases in coverage through government insurance programs like Medicaid and SCHIP. The result is that it’s the middle class that is going without.

America’s middle class is being squeezed to the point that they are barely hanging on. Overall, the average cost an employee paid for a family insurance policy rose significantly by 81 percent from 2000 to 2008, while median household income fell significantly by 2.5 percent (adjusted for inflation). Clearly, hard-working families are at the brink.

We are concerned about the erosion of ESI and the continued growth in health care coverage costs.  In this economic crisis, we know that business owners can’t afford to shoulder more of the burden of health care costs.  Yet, at the same time, state are facing unprecedented budget shortfalls and are not able to meet the need of  laid-off workers and the members of the once-middle class who are now uninsured.   If nothing is done to stave off these trends, it could spell doom for our nation’s middle class, our health care system, and ultimately the future of our economic recovery.

During this 8th Cover the Uninsured Week, people across the nation will hold events and have discussions about what to do about this national crisis. We’ve certainly done our part to build awareness. Now it’s up to the people to take action.

Road Closed, Danger Ahead!

RWJF President and CEO Risa Lavizzo-Mourey writes on America's uninsured.  This post first appeared on The Huffington Post today.  

For decades, our health care system has been barreling down a dangerous road, plowing through stop signs and ignoring obvious warning signs – Higher Health Costs Approaching; 46 Million Uninsured Merging; Employer-Sponsored Coverage Closed Ahead.

Today, as part of the ninth annual Cover the Uninsured Week, the Robert Wood Johnson Foundation released a new report that warns of the dangers still ahead of us – and our health care system – if we don’t change direction. The analysis, conducted by researchers at the Urban Institute, shows that without significant reform to the current health care system the number of uninsured Americans could grow by 10 million people in just five years.  Spending on government health care programs for the poor will balloon, more than doubling by 2020. For employers who continue to offer health insurance benefits, an increasing amount of the costs would come out of workers’ pockets. At the same time, individuals and families would face higher out-of-pocket costs for premiums and health care services.

The report also finds that unless we change our health system so that it expands coverage to those who don’t have it, and makes coverage more affordable for those who do, middle-income families will be hardest hit. The uninsured rate for middle-class families earning roughly $40,000-$75,000 a year – could rise up to 28 percent.  That means one in four middle-income workers could be uninsured in 10 years. Uninsured rates will also rise among adults, age 45-64 and in 10 short years nearly a quarter of these middle aged adults could be uninsured.

This tells me, Warning: Danger Ahead. While we might not have an actual bright yellow sign signaling what comes next, we do have a map.  By examining the best available economic data, we can project what will happen to our health care system on its current trajectory—the number of uninsured Americans will continue to soar, and the increases in public and private spending will be dramatic and unsustainable.

For almost four decades, the Robert Wood Johnson Foundation has been making certain that the forces of health-system change remained fueled and driving forward. But the signs on this road are clear.  Unless action is taken to change the trajectory, our nation is on a collision course.

Health Reformer’s Lexicon: Patient-Centered Medical Home

The Health Reformer’s Lexicon is a regular feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit.

The term: Patient-centered medical home

The National Committee for Quality Assurance (NCQA) provides the following definition:

The Patient Centered Medical Home is a health care setting that facilitates partnerships between individual patients and their personal physicians, and, when appropriate, the patient’s family.

It is a model of care that aims to provide structured, proactive and coordinated care for patients rather than episodic treatments for illnesses.

In a medical home, the primary-care doctor operates as a “home base” for patients, overseeing all aspects of patients’ health; scheduling regular tests and check-ups by tracking health records electronically; advocating for patients with specialists; and, with nurses and other personnel, helping patients navigate the medical system so they don’t fall through the cracks or neglect to care for a chronic condition such as heart disease.

Why it matters: The medical-home model promotes coordinated care—especially for patients with chronic conditions. This in turn cuts costs while improving the quality of care.

Roots: Pediatricians were first to coin the term “medical home.” Concerned that the care of children, especially kids with chronic conditions, was not being coordinated effectively between specialists and the child’s pediatrician, the American Academy of Pediatrics advanced the concept of coordinating care through one doctor in 1967.

Thirty years later, in 2007, leading primary-care doctors’ organizations—the American Academy of Family Physicians, American Academy of Pediatrics, American College of Physicians and American Osteopathic Association—listed requirements for a medical home in a formal statement.

Among these requirements is the idea that insurers recognize doctors’ additional work and the added value to patients for “work that falls outside of the face-to-face visit” and reward it with more compensation.

In the last few years, the American Medical Association has backed the medical-home concept; and by last year, 10 states had bills promoting medical homes.

Where the term appears: The president’s health reform proposal, like the Senate bill, sees the medical home more as an answer to shortages of primary-care doctors, nurses and others. It would spend money on training medical personnel in more efficient ways to deliver primary medical care, such as medical homes.

NCQA has established a recognition program to evaluate whether practices are operating as medical homes. Select health plans are using recognition standards like these to reward qualifying practices for improving health care quality.

Previous Lexicon entries include:
- Sustainable Growth Rate
- Accountable Care Organization
- Meaningful Use

Creating a Positive Exchange

Enrique Martinez-Vidal, Director of the State Coverage Initiatives program, discusses the role of states in building and implementing health insurance exchanges:

I think we can all agree that watching the federal health reform efforts over the past couple of months has left us feeling like we are on a rollercoaster ride. Given our continued work with state officials, we know that despite the drama here in Washington, DC, the states must continue to focus on health care issues despite the historic recession that has caused dramatic deficits in almost every state. Over the past decade, we’ve documented the efforts of states to expand coverage to the uninsured, to reorganize and improve their insurance markets, and more recently, to undertake efforts to increase value in the health care system by redesigning the delivery system and exploring alternative payment incentives. Even this past year, despite fiscal constraints and uncertainty about potential federal reforms, a number of states made substantial strides in implementing reforms.

States have a wealth of experience with health reform efforts and, among the many lessons we’ve learned along the way, perhaps one of the most important is that the success of any reform is dependent on how well it is actually implemented.  As critical as good policy is to the inherent success of a reform, so too are the operational components. That’s where the reform rubber meets the road.

A perfect example and most relevant to us theses days is the concept of establishing state exchanges. We know that President Obama’s most recent proposal follows the Senate’s framework to have states play an important role in creating and overseeing health insurance exchanges. Moreover, whether or not federal reform occurs, we believe that states will be at the forefront of establishing exchanges. Some states are contemplating creating or already working towards implementing their own exchanges as a way to improve the functionality of the individual and small group markets. Likewise, individuals and employers are yearning for more comparative information about their insurance policy benefits and costs. While we already have the experience of Massachusetts’ and Utah’s initial work to look to, they took very different approaches. With more state experimentation in this arena, there will be various iterations along the policy continuum.

Because there still remain many questions regarding how to build an effective and sustainable exchange, we have begun the process of building an inventory of resources to support state work in this area. In late January, we hosted a meeting for state policymakers in partnership with officials from Massachusetts’ Commonwealth Health Insurance Connector Authority to learn from their experience thus far. Most recently, we released an issue brief Preparing for Health Reform: The Role of the Health Insurance Exchange, that raises many important issues that states must evaluate and consider before establishing an exchange. An exchange can do a lot – organize the insurance market, provide a central source of information, enable comparability of benefit designs, administer public subsidies, facilitate the purchase of insurance through standardized enrollment processes, and improve competition among carriers. And, at its very core, an exchange can seek to alter competition in the health insurance market from one based on avoiding risk to one based on price and quality. That is, if you build it correctly.

States policymakers need to develop a thorough understanding of both their uninsured and insured populations, the existing sources of public and private coverage, and the current structure of the commercial insurance market in their state. The roles and responsibilities of an exchange must be defined to determine the appropriate administrative and governance structure it should have. States may need to determine how premium subsidies (if there are subsidies) will be targeted and processed, how to be strategic with effective outreach and enrollment, as well as how to mitigate the potential for adverse selection where one participating carrier ends up with a disproportionate share of high-cost enrollees. In the final analysis, it is critical for a state to clearly understand the goals it is trying to achieve as it takes on the restructuring of its insurance markets.

So, if states build exchanges, will the people come?  While this question may only be answered over time, we believe that, for states, much will depend on assuring they are well-prepared by having laid the necessary groundwork for the development and implementation of these mechanisms that hold the promise of improving insurance markets.

Health Reformer’s Lexicon: Meaningful Use

The Health Reformer’s Lexicon is a regular feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit. 

The term: Meaningful use – assuring that health information technology (HIT) is used in a meaningful way to provide better patient care.

Congress earmarked billions of dollars to spur investment in “health information technology” (HIT) and electronic health records technology by health care providers, but money came with a string attached known as “meaningful use.” To qualify for these subsidies, doctors and hospitals must put the HIT they purchase to “meaningful use,” to improve the quality, efficiency, safety and coordination of care, and reduce disparities and engage patients and families in their care.

Why it matters: There is a lot of money at stake. Estimates are that between $14.1 billion and $27.3 billion in subsidies could flow to qualifying providers. These funds will help providers invest in HIT infrastructure. As results from the 21st  annual Healthcare Information and Management Systems Society leadership survey indicate,

Asked to identify their single IT priority during the next two years, 42 percent of respondents identified meeting meaningful use criteria.

But as we’ve noted previously on this blog, HIT in and of itself will not improve health care, it is how we implement and use it to engage with providers and patients that truly matters.

Roots: The Health-e Information Technology Act of 2008 was introduced as a bill “to promote the adoption and meaningful use of health information technology.” But the term “meaningful use” was put on the map by the American Recovery and Reinvestment Act of 2009, aka the “stimulus bill” under the bill’s Health Information Technology for Economic and Clinical Health Act provisions.

Where the term appears:  The usage that has mattered most of late came just two days before the end of 2009 when the Centers for Medicare & Medicare Services and the Office of the National Coordinator for Health Information Technology issued proposed rules that can be read here and here to define “meaningful use.” At 700 pages, at least one wag at Modern Healthcare deemed them "meaningful obtuse.“

CMS expects to finalize its meaningful use rule later this year.

Health Reformer's Lexicon: Accountable Care Organization

The Health Reformer’s Lexicon is supposed to be a weekly feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit.  But what can I say?  Snowstorms, and other developments, all can get in the way. 

The term: Accountable care organization (ACOs)

In a recent policy brief that examines the ACO concept, Urban Institute researchers Robert Berenson, M.D., and Kelly Devers, Ph.D., provide the following definition:

 A local health care organization and a related set of providers (at a minimum, primary care physicians, specialists, and hospitals) that can be held accountable for the cost and quality of care delivered to a defined population.

Why it matters: As Berenson and Devers note,
 
Proposing a new entity with the word “accountable” in its title begs the question of who is becoming more responsible for what, when it comes to delivering high-quality and efficient health care.

Policy makers are looking at ACOs as they search for ways to deliver well-coordinated care that produces positive outcomes while also slowing the rise in health care costs.

Roots: The term ACOs emerged publicly in a 2006 Health Affairs article where a footnote traces its etymology as follows:

The idea of using the term ‘accountable care organizations’ … grew out of an exchange between Elliott Fisher and Glenn Hackbarth at a Medicare Payment Advisory Commission meeting in November 2006.” (Fisher leads the Dartmouth Atlas Project, Hackbarth is the chair of MedPAC.)

Usage: The more fully refined ACO concept appeared nearly three years later, and a similar concept –“accountable care systems”– was explored in JAMA. 

But the references that may matter most at this point are the ones found in health reform legislation.

The Senate Finance Committee’s bill would:

Allow providers organized as accountable care organizations that voluntarily meet quality thresholds to share in the cost-savings they achieve for the Medicare program. To qualify as an ACO, organizations must agree to be accountable for the overall care of their Medicare beneficiaries, have adequate participation of primary care physicians and specialists, define processes to promote evidence-based medicine, report on quality and costs measure, and coordinate care.

 

How Maine Used Its Clout to Press for Higher-Value Health Care

Bruce Siegel, director of the Robert Wood Johnson Foundation’s Aligning Forces for Quality initiative and the RWJF legacy program, Expecting Success: Excellence in Cardiac Care, recounts how a big health care purchaser applied its considerable leverage to insist on public reports about hospital performance. This post is part of our continuing effort to shine a light on local laboratories of health care reform.

What does a heavyweight look like in the fight for high-value health care? Take a look at how the state of Maine has used its muscle as the administrator of health plans for 34,000 employees, retirees and their families. It is an especially noteworthy story since the health care reform bills before Congress include a number of provisions to encourage the use of quality measures and value-based purchasing.
 
Maine’s State Employee Health Commission, responding to a call from the state legislature to contain health care expenses, developed a new health-benefits plan in 2006. No ordinary plan, its goals included engaging employees and retirees in the health care process, improving quality of care and encouraging providers to publicly report their performance information.

The upshot has been a value-based purchasing strategy based on public reports developed by the employer-led Maine Health Management Coalition, which works closely with the Robert Wood Johnson Foundation’s Aligning Forces for Quality grantee, Quality Counts, and the state government’s quality-improvement initiative, called the Maine Quality Forum.

'Bending the Cost Curve' by Tackling Overuse of Diagnostic Imaging

Bruce Siegel, director of the Robert Wood Johnson Foundation’s Aligning Forces for Quality initiative and the RWJF legacy program, Expecting Success: Excellence in Cardiac Care, examines how some communities are using evidence-based  guidelines to rein in a conspicuous source of health care overspending. This post is part of our continuing effort to shine a light on local laboratories of health care reform.

If you look closely in Aligning Forces for Quality communities, you can see how local laboratories are grappling with some of the most vexing delivery issues in health care. And there is probably no more vexing issue than overuse of health services—an issue that has figured prominently in the health care debate as Congress and the president wrestled with the question of how best to control costs.

Dartmouth researchers have estimated that as much as 30 percent of health care spending is for care that doesn’t improve people’s health—and don’t just take their word for it. Thompson Reuters came out with a new study last October attesting to the reasonableness of this estimate.

Diagnostic imaging, especially when it involves lower-back pain, is one case drawing the attention of overuse detectives. Lower-back pain is the fifth-most-common reason Americans see a doctor, and the common use of expensive imaging technology to diagnose it has become controversial. For more than a decade, guidelines for treating lower-back pain have recommend delaying imaging use for most patients because their backs typically get better, and their pain often subsides, within a month. A recent study published in Health Affairs took a look at the relationship between the supply of MRI machines, and their use for lower-back pain. Surprise, surprise: The researchers found “a clear relationship between MRI availability and MRI use for low back pain patients.”

Pushing ahead with malpractice reform - with or without Congress

Philip K. Howard, founder and chairman of Common Good, writes about establishing special health courts as a way to reform the medical liability system.

 

Health care reform gives the sense of a ship tossed about in stormy seas, with political decisions to steer here or there in reaction to the uncertain winds of public opinion and a gale of special interests.  The fact of a partisan mutiny makes the destination very uncertain.  Will reform capsize altogether, will it wash us onto the shoals of unaffordability, or will it lead us towards a new social contract?  

 

The area in which I’ve been most involved is trying to improve our system of medical justice.  The basic goal is to create a reliable system of justice that will provide the transparency and openness needed to improve patient safety, the trust in justice needed to reduce defensive medicine, and a reduction in adversarial process needed for quick and fair compensation for injured patients. 

 

It’s hard to find anyone in health care who doesn’t support some version of this change—patient safety experts, consumer groups, providers, as well as editorial boards and the public at large, all overwhelmingly support trying to create a reliable foundation of justice.  (See here, here, and here.) 

Finding the sweet spot between affordability and access in health reform

Bowen Garrett, a senior research associate at the Urban Institute, writes about finding the sweet spot between making health care more affordable for low- and middle-income families while limiting overall costs.

As legislators continue to hammer out details on key provisions of health reform legislation, they face a difficult balancing act. To craft a successful health reform bill, they must limit the overall cost of the reform package, while at the same time, making health insurance affordable for low- and middle-income families. That’s no small feat for even the most nimble-footed of policymakers. 

A key component in finding the right balance is where to set levels of premium and cost-sharing subsidies.  These subsidy levels will go a long way toward determining how affordable insurance coverage and access to medical care would be for families under reform.  If the levels are wrong, the cost burden will be too high for low- to moderate-income families driving down compliance with an individual mandate. The resulting lack of widespread compliance would ultimately make it very difficult to maintain insurance reforms on the table because at their core, they depend on broad risk pools.

Health reform: A holiday gift for every consumer?

Steven Findlay, senior health policy analyst with Consumers Union, explains why health reform would benefit everyone, even if it is initially disorienting.

The great health reform debate of 2009 has moved into a new phase this month with the full Senate now debating the legislation. I can’t imagine a more profound Christmas, Hanukkah, and Kwanzaa present for the nation than a Senate bill by December 24. The redeemed Scrooge himself would be proud.

Though initial Senate passage won’t seal the deal, it would create momentum that could be tough to stop.

Misinformation about how this legislation will affect consumers has abounded amid the hyper-partisan debate and the complexity of the bills. So let’s be very clear on this critical point: This legislation will benefit every American in the long run. Every single one of us. And we are not talking about some vague social good, or an indirect trickle-down effect. The legislation will directly impact our lives for the better by expanding health insurance coverage and making it more secure, by making the health system fairer and more consumer-friendly, by taking solid steps to improve the quality and safety of care, and, over time, by constraining health care costs and premiums.

To be sure, if it becomes law, the legislation will also create anxiety and confusion. Change always does. New choices and new rules would bring initial stresses. And, of course, the legislation creates a new and far-reaching demand — the requirement to have health insurance. There’s no way around it: That requirement will trigger some tough moments for millions of currently uninsured families. They will have to choose whether to adjust their budgets and obtain coverage or pay a tax penalty (and remain uninsured) because they decide they simply can’t afford the coverage even with the government subsidies that will be available.

Imagining the pain of such decisions already makes us sad. But we at Consumers Union believe that the “individual mandate” or “shared responsibility” requirement will provide people with something of significant value. First and foremost, it could spare your family from severe financial strain or even bankruptcy if serious illness strikes or an accident occurs. Health insurance also lowers the barrier to ongoing care with coverage of routine doctor visits and preventive health services.

Where's the magic with electronic medical records?

Mike Painter writes about health information technology and when might be the right time to assess its impact on health care quality and cost.

Last week a new article from The American Journal of Medicine entitled, “Hospital Computing and the Costs and Quality of Care:  A National Study” by Himmelstein, et al. appeared in my Twitter stream.  In fact, Brian Ahier (@ahier), whom I and about 3300 other tweeps like me follow, sent me a DM asking for thoughts.  In that article the authors sort of breathlessly conclude that current hospital computing has minimal impact on quality and no impact on cost.  Shocking.   Actually, it’s the kind of gotcha article that really grates—the kind that isn’t particularly helpful to anyone as the authors seem intent on drawing sweeping conclusions from pretty limited data. 

For starters, how can we draw any conclusions about the impact of widely adopted, meaningfully used electronic records until they’re, well, widely adopted?   As research by  Ashish Jha et al. highlighted in Chapter One of the recently released 2009 RWJF HIT Adoption report (results from that research also published in April NEJM) show that only 1.5% of hospitals have a comprehensive EHR system—and only another 8% have a so-called basic system.  I’m not sure how one can draw important conclusions about national hospital computing given such an unbelievably low national rate of adoption. 

More importantly, though, most do not think that simply adopting, even widely, a technology would ever magically on its own improve quality or lower costs.  I’m not sure why these authors seemed to say otherwise.  The point as many have noted over and over again is for health professionals to adopt and then USE (remember our year long discussion regarding meaningful use?) the technology FOR improved quality, including improved efficiency.  As I discuss extensively in Chapter Five of the 2009 HIT Adoption Report, one important use of the technology will be, for instance, automation of performance measurement and public reporting.   The automation enabled by widely adopted, meaningfully used EHRs will hopefully accelerate the creation of results oriented information—information that will facilitate payment reforms as well as improvement.  We absolutely cannot do the kind of payment reforms that the nation needs without creating measures from the automated collection and aggregation of clinical data.  Bundled payment reforms, like the Prometheus model for example, will not work without this kind of automation—and to get to that automation we need widespread adoption and meaningful use of the technology.  But the adopted technology is only an important step.

We are still nowhere near that kind of use in an environment of ubiquitous electronic records.  Given that small fact, to conclude that there is “evidence” that hospital EHRs “don’t” improve quality or lower costs seems pretty silly.  That’s like saying a stethoscope should, but shockingly doesn’t, improve the quality and cost of care just because an intern buys one and hangs it around her neck. 

The authors end their article asserting that predictions about cost and efficiency improvements from widely adopted EHRs “are premature, at best”.  To me that statement is pretty disingenuous, at best.  What’s premature is expecting magic transformation when folks are just getting the tools out of the box—and trumpeting the lack of that magic transformation as if it’s evidence.

 

'Cost of Dying' on 60 Minutes looks at human and financial toll of system

It's worth taking a look at “The Cost of Dying,” which aired Nov. 22 on CBS News’ 60 Minutes and explores the extraordinary amount of money spent on medical care at the very end of people’s lives.

In 2008, Medicare paid $50 billion for doctor and hospital bills during the last two months of patients' lives – with as much as 20 to 30 percent deemed to have had no meaningful impact, Steve Kroft reported.

Dr. Elliot Fisher of Dartmouth Institute for Health Policy and Clinical Practice noted that as many as one-fifth of Americans end up dying costly deaths in intensive-care units because "it's the path of least resistance" - the easiest way for doctors to manage them.

But the report is at its most powerful tackling the human costs of such a system.

Families cannot imagine there could be anything worse than their loved one dying," said Dr. Ira Byock, who heads the palliative care program at Dartmouth-Hitchcock Medical Center (DHMC) in Lebanon, NH. "But in fact, there are things worse. Most generally, it's having someone you love die badly-dying, suffering, dying connected to machines."

Recommended reading, on top of all that other reading

There's been an interesting debate brewing about costs and efficiency in health care.  Here's the latest salvo from Jack Wennberg and Shannon Brownlee, published on the Health Affairs blog.  As Jack points out, it's not that people can really object to the Dartmouth Atlas data, per se (although some certainly do keep on trying to poke holes in the research itself), it's more that they object to what actions can possibly happen in an effort to address unwarranted variations in cost and quality of health care.  It would be interesting to keep track of all the controversies that have cropped up during this national health reform discussion and someday point out which fears came true and which ones didn't.  I guess it's impossible to try and re-shape an industry that makes up so much of our country's economy without kicking a few hornets' nests along the way.

Majority of Americans believe prevention will make us healthier and wealthier

Al Quinlan, president of Greenberg Quinlan Rosner Research, talks about why prevention is one of the most popular elements of health reform.

When it comes to health care reform, one thing is clear: Americans want prevention to play a central role in shaping a new direction for our health care system.

Our latest poll shows strong support for increasing our investment in prevention. When we asked people whether we should invest more in preventative care, 71 percent said we should invest more, as opposed to 23 percent who said we should not.

Even when people learn the potential pricetag with respect to health reform, they support the investment as a way to make people healthier and drive down health care costs in the long run.

What health reform looks like in the real world, right now

Susan DeVore, the CEO of the Premier healthcare alliance, writes about the lessons health reformers can learn from its efforts to drive quality improvement and costs savings in hospitals.

A year ago, 157 hospitals in the Premier healthcare alliance set out to see if they could deliver better care to save lives, while simultaneously saving money.

As it turns out, they can. And there is a lesson from this effort for Congress as it struggles to find practical solutions to improve health care quality and control spending. Cutting costs while improving care is the holy grail of healthcare reform. If we can bend the curve of healthcare costs, we stop the system from careening toward insolvency and make coverage more affordable.

Premier, an alliance of 2,200 not for profit hospitals, created QUEST (for “Quality, Efficiency, Safety and Transparency), in partnership with the Institute for Healthcare Improvement, to find ways to holistically improve healthcare. To participate, hospitals joining the collaborative agreed to transparently share data and results with one another; adopt tough measures; and then observe and implement new ways of providing care to enhance quality.

This wasn’t some academic study. We pulled performance statistics on deaths, costs and effective care. We then figured out what is driving deaths, errors and excessive costs, devising the best ways to prevent them and setting aggressive improvement goals. After just one year, we estimate QUEST saved 8,043 lives, or 14 percent fewer deaths than expected. At the same time, hospitals also saved $577 million, or $343 per patient discharge.

How important are individual mandates in achieving health reform?

Debra Lipson, a senior researcher at Mathematica, writes about individual mandates and health reform through the lens of reform efforts in Massachusetts and Maine.

Nearly every health reform proposal now under consideration in Congress has a provision that would require individuals to purchase health insurance coverage. For years, the notion of government requiring individuals to have health insurance was anathema. To those on the right, it smacked of government intrusion into personal affairs. The far-left opposed mandatory purchase of private insurance because they argued that it would perpetuate an overpriced, unfair system stacked against consumers.
 
Thanks to Massachusetts’ health reforms passed in 2006, we have experience with individual mandates and lessons about what it takes to make them work:  Adequate subsidies to make premiums affordable to those with low or moderate income. Penalties for non-compliance high enough to induce participation. Exemptions for those who demonstrate that premiums for available policies remain unaffordable, even with subsidies. Regulations that require insurers to issue plans to all applicants regardless of health status, and that limit the extent to which rates can vary based on age, gender, and other personal characteristics. 

Even with such provisions, not everyone gets covered. That’s because Massachusetts is unable to raise sufficient revenues to provide adequate subsidies to everyone who needs help paying premiums. This could well be the case with federal health reform. There is little appetite on Capitol Hill (at least in the Senate) for raising enough funds to subsidize families earning more than 300 percent of the federal poverty level. In addition, Massachusetts didn’t get around to serious health care cost control until this year, so premium rates remain high.

Are accountable care organizations the answer to our problems?

Kelly Devers and Bob Berenson of the Urban Institute write about the latest policy brief by Urban and RWJF, which focuses on the concept of creating more accountable entities in health care.
 
In the often contentious health reform discussions, ideas that are good in theory often gain quick currency, but deserve closer examination as to whether they might actually work.  One such idea is the accountable care organization (ACOs).  Accountable care organization are entities—and we’ll clarify what we mean by “entities” in a second—that are intended to address one of the conundrums of our current health care system:  how to pay providers for high-quality, efficient care.  Under our current fee-for-service payment system, we end up paying for volume, not quality or value, that is better quality for the money we spend. In addition, many of the ways we deliver health care, especially for common chronic conditions like diabetes or heart disease, have become increasingly fragmented and cumbersome for both the provider and the patient.
 
To address these interrelated problems of provider payment and delivery, many health care leaders and experts have become increasingly interested in ACOs as a way to bend the cost curve, i.e., deliver higher-quality care to more people without contributing to our escalating health care tab.  ACOs are commonly understood to be local entities comprised of clinicians—primary care and specialty physicians, hospitals—that are responsible for delivering quality care and controlling health care costs in ways that current providers are not. 
 
However, the concept of what ACOs are and how they might work is still murky.  Therefore, in a new policy paper out today from the Urban Institute and the Robert Wood Johnson Foundation, we try to go to uncharted territory, and wrestle the ACO concept into the real world. 

The secrets of Massachusetts' success (including bigger carrots and smaller sticks)

Robert Restuccia, Executive Director of Community Catalyst, writes about the less-talked-about lessons from Massachusetts-style health reform.

Massachusetts as model – it’s a common claim in health policy circles. With the lowest rate of uninsured residents in the nation – just 2.7 percent – it’s clear to those watching that Massachusetts’s mix of Medicaid expansions, sliding scale subsidies, private insurance reforms and individual mandate are working to expand coverage and have served as the template for national reform. 

But there are other, less obvious lessons from the Massachusetts experience that have not really filtered into the political and policy discourse in Washington.  Here are a few of the most important.

There are good policy and political reasons for putting coverage expansions ahead of cost containment

Massachusetts made the strategic decision to tackle health coverage before cost containment – making it easier to keep all players at the table.  Despite bold words to the contrary at the start of the process, the Congressional leadership and the Obama Administration too are finding it hard to arrive at a consensus on significant cost containment while still keeping the industry backers of coverage expansion at the table.  But Massachusetts is using the pressure from the cost of its coverage expansion to jump-start a more serious debate about cost containment than ever before.

Faster is better

The current health reform is not the first time Massachusetts attempted to enact a near-universal coverage program.  In the late 1980s under Governor and soon-to-be Presidential candidate Michael Dukakis, Massachusetts enacted a major health reform proposal with an employer “pay or play” as its central element along with a number of other smaller programs.  Today those smaller programs, implemented almost immediately after reform passed, are still going strong, while the employer pay or play, which was not scheduled to go into effect for several years after passage, was first delayed and then repealed as the political and economic environment shifted.

Could health courts provide an answer on medical liability?

What should have been a heads-up on a news item last week is now a look-back--the idea of malpractice reform has occasionally bubbled to the surface of the health reform debate, it's a topic that certainly many docs feel quite passionately about, and RWJF's Pioneer portfolio has examined an approach to address the problem involving health courts.  You can read more about this work, and find a CBS Sunday Morning News piece on the project, if you click on over to our Pioneer blog, here.

Success of smoking bans showcases role of prevention

Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, writes about the implications of the Institute of Medicine report concluding that smoking bans reduce heart attacks.

In the effort to combat the epidemic of heart disease, we often focus on changing individual behaviors related to smoking, diet and exercise.

But a landmark report released today by the Institute of Medicine underscores a major environmental factor – the deadly impact of second-hand smoke – and by so doing, spotlights the role of community-based prevention in keeping Americans healthy.

The IOM report concludes that smoke-free laws reduce the number of heart attacks and save lives.  It also finds conclusive evidence that secondhand smoke causes heart disease, including heart attacks – the No. 1 killer of Americans -  and compelling evidence that even relatively brief exposure to secondhand smoke can lead to a heart attack.

These pronouncements, reached by one of the most prestigious scientific authorities in the United States, send a clear message to elected officials:  As we debate how to reform our health system and rein in costs, we must recognize the key role of prevention. Strategic investment in disease prevention and population health can save lives, strengthen families and the workforce - and reduce health care spending.

CBO's scoring window: why it matters

Michael J. O’Grady, PhD, a senior fellow at the National Opinion Research Center at the University of Chicago, writes about the Congressional Budget Office and how it scores proposals.  The CBO recently issued a price tag for the Senate Finance bill on health reform that is being voted on right now.

The current debate our country is having about overhauling our health care has highlighted the sometimes challenging interaction between the worlds of budget policy and health policy.  One such interaction is the issue of scoring windows.  The Congressional Budget Office (CBO), the official scorekeeper of reform proposals, typically projects spending for a 10-year period.  However, on September 14, Senator Kent Conrad (D-ND), Chairman of the Senate Budget Committee, requested that CBO provide a twenty—year estimate of the Senate Finance Committee bill.  He was right to do so, and here’s why.

First, let’s talk about why CBO moved from the original 5-year window to the current 10-year window.  The shift occurred for a number of reasons.  The Budget Committees began looking at a longer time horizon.   In the FY 1994 Budget Resolution Congress established a 10-year budget “point of order” in the Senate.  Then in 1995, Speaker Gingrich introduced a seven year balanced budget plan, adding further momentum to estimate budget impacts beyond the five-year window.  By 1996, CBO released its first 10-year budget baseline.

How do we spur competition in the health-care marketplace?

Elliot Wicks, a senior economist with Health Management Associates, writes about how to achieve competition in the health care marketplace through health insurance exchanges.  A perspective on the public insurance option, by Karen Pollitz of the Health Policy Institute at Georgetown University, immediately follows.

If we can take the liberal Democrats at their word – that their reason for insisting on a public plan is not to achieve single-payer by stealth but rather to ensure that health insurers have to truly compete on the basis of price—at some point they should probably stop insisting. The key to achieving real competition is structuring the health insurance exchanges properly.

A public option is not a magic bullet to bring down premiums. In the first place, the public option would be available only to people who buy through the insurance exchange – that is, people who buy coverage with the help of federal subsidies, some other individuals buying on their own rather than through their employers, and some small employers. All the people who are covered by self-insured employer plans would be excluded from the competition provided by a public plan. They constitute nearly 60 percent of people with employer coverage. But these large employers can pretty much take care of themselves. All they are buying from insurers are administrative services; the employer assumes the risk associated with the medical expenses their employees incur. They wouldn’t be eligible for the public plan, and they don’t need it because they already have market clout with insurers.

Following the money: doing health care better at less cost

Thomas Bodenheimer, a physician and professor at the UCSF School of Medicine, and Rachel Berry-Millett, a University of California medical student, preview an upcoming Synthesis report on care management.

As much as we all aspire to an ideal state of health, there are some people who are sicker than others in the United States.  Approximately 10% of patients consume 70% of health care expenditures.  In this group are the patients who have multiple chronic conditions, many medications, frequent hospitalizations, and limitations on their ability to perform basic daily functions. 

Health care spending for people with five or more chronic conditions is 17 times higher than for people with no chronic conditions. With the projected growth in the Medicare population in the next decade and the far higher prevalence of chronic conditions among this group, the cost of caring for this population threatens Medicare’s future viability. A real way to “bend the curve” is to improve the care and coordination of people with multiple chronic conditions.

Recent research that we conducted for the RWJF Synthesis Project showed us that this challenge may, indeed, be possible to address.  We preview the research in a new NEJM perspective, and our full Synthesis report will be available in a few months. 

What Massachusetts teaches us about emergency departments and reform

Derek DeLia and Joel Cantor of the Rutgers University Center for State Health Policy write on the possible impact of health reform on emergency department utilization.

A popular idea in the healthcare reform debate is that enrolling more Americans in health insurance coverage will decrease emergency department (ED) use and with that alleviate other health system ills like excessive costs and ED overcrowding. A recent paper by Sharon Long and Karen Stockley on Massachusetts’ recent healthcare reform adds to a growing list of studies that cast serious doubt on this idea.  Despite the state’s remarkable progress in covering the uninsured, its ED utilization patterns look very unremarkable. Although no pre-reform data are provided, the paper is consistent with prior studies summarized in our July 2009 Synthesis Report suggesting that expanded coverage alone will not decrease ED use.

Designers of the Massachusetts reform effort understood from the beginning that covering the uninsured would be only the first step. Accordingly, the state is now moving into the second phase of its reform effort with a greater focus on healthcare delivery and reimbursement. Now is a good time for Massachusetts (and the nation) to assess the role of the ED in a reformed system and how to define its “appropriate” use.

Lessons from Massachusetts about the impact of health reform

Sharon Long of the Urban Institute writes about how health reform might change--or not change--the health insurance many people have.

I suppose I was naïve, but I really thought we’d be making progress on health reform this fall. Instead, we’re still mired in contentious debate based as much on fear as facts. One concern is the possibility that health reform could undermine employer-sponsored health insurance coverage—the backbone of the US health care system. Massachusetts, which has mounted an ambitious initiative with many of the same features currently under consideration at the national level, offers a real-world case study of what health reform can mean for employer-sponsored insurance (ESI) coverage.

The bottom line? ESI was not weakened once health care reform took hold in Massachusetts, which now enjoys the country’s lowest rate of uninsurance. Indeed, ample evidence suggests that the 2006 health care reform law significantly boosted ESI coverage, countering the trend toward lower ESI coverage in the rest of country.