National Press Club from Washington, D.C. Free Webinar, limited seating

Fresh ideas and a new vision for health reform

Vision, policy, and politics

Please plan to join us virtually via webcast or in person tomorrow for a conversation over the vision, policy, and politics of health reform that relies on incentives, genuine competition, and consumer choice.

In person: Thursday (Feb. 27) National Press Club Ballroom, Washington, DC, beginning at 8:30 a.m. EST

Virtually: http://www.galen.org/events/health-solutions-conference/

The stage is being set right now for a pivotal debate over ObamaCare in the 2014 elections – whether it will ultimately get “fixed” or replaced by credible free-market policies.  Join us tomorrow (Thursday) as top political and policy leaders discuss “Fresh ideas and a new vision for health reform.” 

•  What are the problems we are trying to solve in the health sector?
• How would market-based solutions achieve meaningful reform?

Vision: Panel I will feature a discussion with leading members of Congress talking about their vision of a true market-based health reform. Six leaders will describe a health sector where incentives are properly aligned and consumers have more control over choices in a truly competitive market.

Sen. Richard Burr, NC
Rep. Diane Black, TN
Rep. Michael Burgess, TX
Rep. Tom Price, GA 
Rep. Phil Roe, TN
Rep. Steve Scalise, LA
*Moderated by Douglas Holtz-Eakin, American Action Forum

Policy:  On Panel II, 10 policy experts from the major market-oriented think tanks will translate the vision into policy solutions for real insurance with real examples of portability and tax fairness, protections for those with pre-existing conditions, and a strong safety net.

Jeffrey H. Anderson, Ph.D., 2017 Project
Joseph R. Antos, Ph.D., American Enterprise Institute
James C. Capretta, Ethics and Public Policy Center
John C. Goodman, Ph.D., National Center for Policy Analysis
Hadley A. Heath, Independent Women's Forum
Paul Howard, Ph.D., Manhattan Institute
Merrill Matthews, Ph.D., Institute for Policy Innovation
Thomas P. Miller, J.D., American Enterprise Institute
Nina Owcharenko, The Heritage Foundation
*Moderated by: Grace-Marie Turner, Galen Institute

Politics: Journalist Ezra Klein and Avik Roy, opinion editor of Forbes and Manhattan Institute senior fellow, will give a lively Left/Right preview of the health policy debate in the 2014 and 2016 elections.

Co-sponsoring organizations:  American Action Forum, the American Enterprise Institute, the Ethics and Public Policy Center, the Galen Institute, The Heritage Foundation, the Independent Women’s Forum, the Institute for Policy Innovation, the Manhattan Institute, the National Center for Policy Analysis, the Pacific Research Institute, and the 2017 Project.

There is no charge for attendance, but please register HERE. A continental breakfast and lunch will be served.

The full conference agenda is HERE.

And you can join the live webcast on Thursday morning HERE.

Jeffersonian Thoughts

HOW DID JEFFERSON KNOW ? 

"It has been said the greatest volume of sheer brainpower in one place occurred when Jefferson dined alone..." John Kennedy  

When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.  

Thomas Jefferson  

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.  

Thomas Jefferson  

It is incumbent on every generation to pay its own debts as it goes.  

A principle which if acted on would save one-half the wars of the world.  

Thomas Jefferson  

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.  

Thomas Jefferson  

My reading of history convinces me that most bad government results from too much government.  

Thomas Jefferson  

No free man shall ever be debarred the use of arms.  

Thomas Jefferson  

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.  

Thomas Jefferson  

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.  

Thomas Jefferson  

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.  

Thomas Jefferson

How does this relate to Health Reform......well, everything. Are you willing to give up freedom in exchange for security?

Government Run Health Care A Sad Fact

It will be a sad fact that those who propose a government run health care system, are misinformed about containment of health care costs.  They argue that ‘non-entrepenurial’ systems elimlinate abuse and misuse of health care resources. The end game of reducing costs to the  patient, and payor is offset by the increase in bureaucracy. Institutions, and provider groups will hire watchdogs as overseers to monitor the ‘quality’ of healthcare. The expense of this will be considerable to providers organization. The cost however will be absorbed and shifted to the ‘producers’ of the organization.  I was mistaken about this in my own ‘opinions’ about containing costs until I worked at a military hospital as a civilian contractor.  These organizations compete internally for allocation of ‘fixed dollars’ by ‘proving’ they produce. Departmental budgets are determined by ‘utilization, which is monitored by evaluating RVUs generated by providers. If RVUs diminish so too does there budget.  (or overall institution).  Coding experts regularly ‘train’ providers to ‘upcode’ their services. The military in particular has their own system of using

CPT codes. I would be honest in stating that this is not due to greed, but the fear that by not reporting every RVU nickel that department would be penalized. The emphasis is to ‘spend every dollar’ each fiscal year for fear of losing it in the next billing cycle.   I was amazed one day to see an emergency patient who came in with a ‘simple migraine headache’  The ER provider note’s treatment plan included a  “screening MRI”.  Perhaps this is the new paradigm for younger   providers who do rely much more heavily upon technology. Providers in this environment also seem to order more lab tests because they don’t think it ‘costs’ the system’ when a patient (or they ) never see a ‘bill’ to whomever supplies the services.  Particularly in the military these services are provided by ‘outside contractors’ who must be reimbursed as well. 

Those who observe “our system’ from 40,000 feet really have inadequate knowledge of how the systems work internally.  Those who regulate have little involvement in how and how much it costs to regulate. That is contracted out to third parties, whose costs are ‘hidden’  Congressman Pete Stark frequently tell us the overhead for medicare is 2-3%. That is just not true.  Medicare costs us much more due to cost shifting to private payors and hospitals because their rates are miserably low, and other payors pick up the difference.  Medicare and Medicaid do share in only a portion of the costs of the uninsured. This is passed on to County and State governments.  Statistic lie.

If you are upset about the government running General Motors, just wait….Is health care deemed “Too big to fail?” or Too big to suceed”?

The Future Just Passed

Things are changing quickly, at first it was little things like you are now a primary care provider instead of a GP or Family Physician. Today I read that we are now First Level Providers , or Second Level Providers instead of a specialist. What's in a name....?  Everything. Nomenclature often defines the culture, and new vocabulary and abbreviations change the way we think, write and do.

I am now lumped in with "Vision Care Providers"....which seems to lump me in with Opticians, and Optometrists.   One thing I was always challenged with is the relative lack of sophistication and/or knowledge as to the difference between and O.D. (Optometrist) and M.D. (Ophthalmologist).  In recent years Optometrists become certified in therapeutics for treatment of some eye conditions.  The threshold for medical treatment has been lowered substantially.

Health Reform iinvolves both quantity and quality of health care. During the most recent decades there are many who argue that quantity does not equate with quality of care.  Measuring quality is challenging at to where to look.  Recent ideas include better outcomes (ostensibly measured by the number of reductions in readmission after hospitalization within the first 30 days of discharge.  That metric however encompasses a small measure of health delivery.

The  outpatient, or ambulatory service setting presents the majority of health expense and visits, save for long term care of the aged population.

The affordable care act will markedly increase outpatient services for states who have opted-in for medicaid expansion.  This will be covered in an upcoming edition.

HealthLeadersMedia: Search for ROI in EMR Patient Safety and Life and Death of Small Systems

HealthLeadersMedia , a publication produced as an online and print journal measures and reports on opinions of CEOs in hospital and group medical practices.  HCLDRs reports on ‘hot topics’ in the economics of the health systems.

ln the January/February 2014 edition several areas emerge as newsworthy.

Front page:

In Search of EHRs ROI

Life or Death of Small Systems

Patient Safety

Table of Contents

Addressing Physician Engagement

Post-acute Care and the Care Coninuum

The Uneasy Journey

Cost- Cutting and the Revenue Cycle

Analytics and Value

Tech Takles Medication Managment

A recent HealthLeaders conference when asked what the most pressing problems were for CEOs and CFOs, responded with the challenges of investing and cutting costs. Any investment of  capital will reduce operating expense, and must show a return of investment over a planned recapture period.

According to CEOs and CFOs the biggest  waste is electronic health records. Many, but not all state, the reasons given are multiple:

In Search of ROI in EHRs

“Rip it and Replace it”.  Installation of EHRs requires a total redesign of work flow, and not just pasting an EHR on present administration. In additon to the cost of the physical EHR and software significant time, and expense are added in  training and loss of efficiency in operations. Initial EHRs are often  not designed with this in mind.

The “hunt for ROI” is a challenge, at the start. Are the measures strictly financial or should they include other metrics, such as reduction in errors, quality of care, safety issues, workplace satisfaction, measurement of multiple metrics. The shift to EHR also creates a shift in worker skills, proficiency in typing,and computer skills as well as experience in  specific EHRs.  Not only are clinical skills and scientific prowess important but familiarity with multiple  software systems.become critical for the search by HR for suitable employees. This also extends the training period for new employees which has an indirect effect on the costs of  hiring new employees.

Scott Mace writes, “The key to ROI is to start with a baseline and ‘redesign your thought system and processes to leverage the value of electronic records, or any IT solution. There are lessons to be learned from other industries. (HBR “Don’t automate, Obliterate”) describes how Ford first implemented information systems.

Life or Death of Small Systems:

Perhaps the greatest indicators for this threat has been the rapidity of mergers and acquisitions.  Scaling upward seems to imply stability and a major advantage to market share and negotiating   power for hospitals and providers when dealing with insurers.  This will only increase as the PPACA effect grows.  For small systems the risks are inherently greater making strategic changes quickly.  For some doing nothing does not seem to be a viable option, however making a big change may mean nothing in the long run.   Large systems are no  longer giving lip service to the promise of reduced overhead and making a serious commitment to efficiency by integrating their hospitals into an operating company structure as opposed to the holding company structures of the recent past.

Community health systems require a unique approach to ACO and develop a creative approach, such as offering PCP services in physician drought areas.  Some even develop a presence close to mega-hospitals such as the Mayo Clinic.  (Ridgeview, in Minnesota).

Patient Safety

A decade ago young new graduates would enter the system and would loyally follow their senior mentors, diligently follow their lead and rarely second guess. Several things have ocurred to change the relationship.  There are now fewer opportunities to buy a senior physician’s practice, so there is less impetus to follow along passively.  

In some hospitals the tables have turned on the senior guard. A new world order is now leading upstart youngsters to teach their senior attendings and physician leaders a new paradigm.  These changes improve quality while reducing waste, inappropriate care, and the opportunity for medical error and  harm.  The new doctors say their strategies avoid millions in unnecessary spending, tens of thousands here and there adding up into millions of dollars.

The ‘new’ order leads one CEO who recites a quote attributed to Ghandi,

“There goes my people. I must follow them, for I am their leader”.

“The fact is they are ‘doing the right thing’, putting us on course to control utilization and cost. Basic routines are questioned, such as lab sets, use of IV antibiotics in lieu of effective oral antibiotics, and even such things as packaging gloves singly if only one glove is needed.”

The current edition of HealthLeaders dives into many other areas as well. It is a good reference for anyone in the hospital industry, and physician leaders as well.  Medical staff leaders will find this to be an excellent source when interfacing with the hospital “C”suite.

The insertion of the Accountable Care Organization into provider/hospital relations requires a team approach, and HealthLeadersMedia facilitates  this progress.

The ultimate goal is to improve the quality of patient care and insure wellness.

Readers can find the entire content of this edition at Health Leaders

Enrolled in Covered California...Have insurance? Think Again

Even hardcore supporters of the affordable care act are speaking publicly about the shortcomings and misdirections of the Afffordable Care Act…  and the necessity to modify the law.  Still there is much resistance to repealing the law.

The enrollment process is somewhat easier, however the choices are still a challenge. It is stragiht forward on selecting your level of eligibility.  Choosing plans is more of a challenge, especially if some of the information is incorrect such as providers, hospitals and other service providers.  

Enrollment data is beginning to accumulate, however there have been no public announcements regarding payment of premiums, nor analysis of types of policies.

The selection process is important. For some levels the copays and deductibles are very high. Although  premiums  appear to be low in some cases patients will need to be prepared to spend substantial portions of their income for medications, copays for laboratory, imaging and other testing.  For those who are relatively healthy and do not ‘consume’ much in the way of health care it won’t be a burdern.   For those who have chronic and/or serious illness who may need to be seen three or four times in a month….say a newly diagnosed diabetic, (they may be faced with four provider copays amounting to $160.00 and other copays for labs and/x-rays. Add this to the premium, and the monthly payment rises.  For those on subsidies this additonal burden on a modest income is significant.

For those who are euphoric about finally obtaining insurance coverage some will be surprised to find all is not well and the plans fall short of ‘guarranteeing’ health care for them.  A challenge will be finding a provider who accepts affordable care act plans.   It is going to require 12 months or more to feret out the good from the bad policies.  

Providers are on the line as well. Many high deductible policies will place hospitals at risk, when their patients cannot afford a deductible of 10,000-12,000 dollars. This will require cost shifting to balance the equations, and will not alleviate some medically induced bankruptcies.

PPACA AND OUTPATIENT PROCEDURES

HealthCare LeadersMedia expects the Affordable Care Act to cause the number of outpatien proceures to increase for those opted-in for Medicaid expansion in the PPACA. And according to figures there is a spread seen as examined by state.   By 2015 California stands to perform 46 million outpatient procedures, while a state such as Texas (opted-out for Medicaid expansion) will decrease by 53 million cases.  (reported by Truven Health Analytics)   

These figures are further broken down by specialty. Two specialties which create a significant number of ambulatory surgeries, and among the top tier of expense are cardiology and orthopedics.  Medicaid opt-in vs opt-out produces some signifcant differences in reimbursement that outweigh numbers of cases.  The split per  specialty mirrors that of the total number gained or lost in 2016.  

Mental health services (Psychiatry) are already in short supply and  have previously been throttled by the lack of reimbursement by insurers.  PPACA has mandated an increase in these services as a covered benefit. For those states who are opted out the medicaid eligible population will suffer relative to states opted-in. Those who live in states opted-out of Medicaid expansion will not have access to insured  care for outpatient psychiatry services.

As expected the variance is greatest for California and Texas which are outliers in the data. In 2016 the volume of Cardiology cases in Califonia will increase by 672,000, while Texas will forgo 840,000 cases.  These figures also reflect population differences and the number of medicaid eligible patients in each state.

For orthopedic surgery California (opted-in) will benefit from over 299,000 outpaitent orthopedic cases, while states such as Florida and Texas (opted-out) stand to lose near 300,000 orthopedic cases.

The choice to opt-in vs opting out not only effects who will receive benefits in the eligible  population but will have significant effects on the hospital industry.  The number of outpatient surgerie outweighs the number of inpatient surgeries.  Using the present fee for service reimbursement rates under FFS hospitals have been advantaged by higher reimbursement reflected by higher cost.  The loss of coverage for medicaid eligible patients not only places them in jeopardy, it also creates significant differences in the infrastructure necessary to deliver these services.

Outpatient services in states who have opted-in will need a business plan to expand capacity which includes not only physical plant, but skilled workers, such as surgical techs, surgeons, expendables as well as revising operating schedules, reducing turn-a-round times and the like.

DME suppliers will reap these benefits in opt-in states.

The figures represent the number of cases gained vs the loss of gain by opting out. The opt-out numbers are a speculation, and do not represent an actual decrease in cases.  The number of procedure in any case will not decrease in states that have opted-out.

Increased demand for services always encourages efficiency and technical breakthroughs, to decrease loses and encourage profitability, much as occured with small incison cataract surgery and the development of small incision surgery in cardiology,general surgery and orthopedic surgery.

While ‘futurists’ attempt to predict the effects of the new law, serendipity and the butterfly effect should be expected.

This article also appears in Health Train Express, February 22, 2014. http://healthtrain.blogpot.com

The author also publishes at Digital Health Space http://digitalhealthspace.blogspot.com

If you wish subscribe, or follow  us  at our RSS feed

Doctors now Taking Payments from bitcoin

Some  say physicians are IT luddites, however there are some indications that a select few are examining other payments that border on bartering.  Bitcoin is bartering in the internet age, where privacy and security have bcome a thing of the past.

Bitcoin is a virtual currency which offers total privacy and anonymity in payments. Explaining how and why it works goes beyond the scope of my blog, other than to offer it's positive impact it may have in this time of health reform, and new business models such as concierge or direct payment models. It remains to be seen whether it is a 'fad' or will become an alternative form of payment, such as PAYPAL.

Lower transaction costs, increased privacy protections lead some practices to accept controversial e-currency.

But it's also getting strong positive attention, especially from Internet thought leaders, because the Bitcoin system, which depends on no centralized authority but rather a loosely affiliated community of techies, offers some key breakthroughs in the areas of information exchange – particularly between parties unknown to each other – and digital cryptography.

The legal status of this so-called cryptocurrency is in flux worldwide, as various policymakers, monetary bodies and tax agencies get up to speed on its true ramifications.

In the meantime, curious people can still educate themselves and explore this new payment alternative without fear and in relative safety. Doctors who have taken bitcoins have found that doing so is both simple and relatively "unmagical," as San Francisco physician Paul Abramson, MD, put it.

Abramson, founder of My Doctor Medical Group, is a former software programmer and trained electrical engineer with a significant personal interest in privacy.

Bitcoin will only be attractive to 'techies' for the time being. and there are caveats for users intent on the new system of bitcoin.

Bitcoin has been a subject of scrutiny due to ties with illicit activity. In 2013, the US FBIshut down the Silk Road online black market and seized 144,000 bitcoins worth US$28.5 million at the time.^[9] The US is considered Bitcoin-friendly compared to other governments, however.^[10] In China, new rules restrict bitcoin exchange for local currency,^[11] and the European Banking Authority has warned that Bitcoin lacks consumer protections,^[12] Bitcoins can be stolen, and chargebacks are impossible.^[13]

Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use byspeculators, which has fueled price volatility.^[14] Bitcoin as a form of payment for products and services has seen growth, however, and merchants have an incentive to accept the currency because transaction fees are lower than the 2–3% typically imposed by credit card processors.^[15]

There are many unanswered questions about the new "currency"

Many bitcoin enthusiasts  are particularly excited about the existence of a relatively secure currency that is not controlled by a government or other central authority.

Rather, the Bitcoin system is managed by software and mathematical principles, and is made possible by a peer-to-peer network that shares the burden of tracking bitcoins to ensure nobody counterfeits any, or spends the same bitcoin twice.

The Failure of Information Technology

Hospitals, providers and patients are increasingly frustrated with the affordable care act.  The project management for the ACA was seemingly run by a Whitehouse intern.

Implementation guidelines, mandates and dates for the Affordable Care Act, seemingly were set arbitrarily with little or no assessment for success or failure.

In California where the ACA was immediately accepted and optimistically initiated with its own brand of Health Benefit Exchange, name aptly "Covered California" there were enormous problems with the web site and a crushing overload of telephone registration services.

I can attest to these challenges as I had the responsibilty to enroll a member of my family.

The next axe falling is the Small Business Benefit Exchange where employers shop for employee policies. The computer process again limped along and numerous insurance agencies reverted to paper enrollment forms, a seemingly obsolete method of doing business, which however often is superior to IT. Failure of digital systems often creates more expense than doing it right the first time with proven methods.  In a self-directed study of forms on computer vs hand written, with check off boxes we demonstrated the hand method to be faster and more accurate.

What is most frightening is that most of our support systems are becoming digital. If a particular process or enrollment does not fit into the pre-determined matrix it creates a bottleneck and the system stops.

Nuts and Bolts on The Health Train Express

In the coming weeks our format will be changed.  Our pages have become cluttered with unnecessary links that are seldom used. Because these links slow page loads significantly we are eliminating all but a few. We will continue to 'back link' to relevant content housed on our own servers.  Rather than load a link to all pages we will limit links to within the text of our posts. The changes may create an image that will be unfamliar to readers.. Rest assured the  content will be the same and the 'author' is still in the room.

Physician Experience vs. Expectation

During the past decade we have witnessed the corporatization of medicine.  Solo private practice physicians in the U.S. are dwindling rapidly in the United States, except perhaps for a few selective specialists and in underserved areas. Some physicians are experimenting with the new "Direct Payment" model or "Concierge Medicine"

Although private solo or small group practices offer autonomy and control, there are disadvantages. Those who join an integrated health system, or become employed by a hospital gain administrative support and the ability to negotiate insurance contracts with more bargaining power than a small provider. However there are serious trade-offs. Physicians who sell their practice to a hospital find that hospitals receive failing grades in their prowess to run medical practices.

This is a relatively new phenomenon and hospital management may improve in the next several years. Kaiser seems to have met the challenge by forming a separate entity for a medical group which then interfaces with the hospital.  The governance structure is distinctly separated.   This allows the providers negotiating power and the abiity to make more decisions for themselves.

There are other issues in making this transition to a group practice.  Cultural clash  and generational difference can also affect the new relationship.

 Modern Health Care presents this case

"Dr. Janet Chipman worked for more than a decade in a busy surgery practice she owned with three other physicians, treating patients and sharing the responsibility of running a multimillion-dollar business. She says she valued the autonomy of private practice, which was a common career path among her peers and one she sought when she finished her training.

"But nearly three years ago, Chipman and her colleagues signed an employment contract with Baptist Health, a Kentucky hospital operator that has doubled its number of employed doctors to 485 in the past three years. They felt that joining a sizable health system would boost their negotiating leverage with health insurers and make it easier to recruit surgeons into the practice. They'd also have more bargaining clout with vendors. And it would be more viable to participate in one of the new alternative payment and delivery models, such as an accountable care organization

Even so, Chipman had plenty of doubts before signing the deal. “The decision was incredibly hard for me personally,” she said. “I came from the culture of having your own practice and your independence.”  

Not so for Dr. Nicole Lee. The first-year fellow in maternal and fetal health at the University of Mississippi will enter the workforce in two years. She expects to go directly into hospital employment. That's because working for a large health system likely will mean less on-call duty, allowing her to balance work and personal life. “If I have a family, they will definitely be my priority,” Lee said. “Being on call every other week is not feasible to me.”

Other factors enter decisiono making processesRegular work hours, enhanced family life
Guaranteed on call coverage
Working for a large health system likely will mean less on-call duty



Younger physicians work ethic has changed, largely bevause of new workoplace rule setting strict liits for work hours, and call schedules, caliing for controls much like the airline industry for pilots to reduce risks of error due to fatigue. When thes physicians enter the workforce they carry over this new ethic in private prctice.

Doctors moving from independent practice to employment may be more autonomous, business-savvy and likely to prioritize work over other obligations. But they also may chafe under bosses and rules. “They're used to setting the rules,” said Dr. T. Clifford Deveny, Catholic Health Initiatives' senior vice president for physician services and clinical integration. “One of the things you give up is that complete independence.” 

Younger doctors may have no experience with or desire to take on demanding call schedules or leadership roles. “They're looking for lifestyle,” said Danise Cooper, manager of physician recruiting specialists for Cejka Search

Thrown together, once-independent physicians and younger doctors may clash over how to share the

workload and rotation duties. In addition, physicians may differ in how they respond to their employer's invitation to participate in quality improvement or strategic efforts. And since physicians may treat one another's patients, some doctors may worry about how their colleagues' work ethic and attitudes and accessibility to patients may reflect on them and influence their patients' satisfaction. 

Cultural discord among doctors can lead to costly turnover. Culture conflict ranked in the top five reasons for turnover among doctors in the most recent retention survey by the American Medical Group Association and Cejka Search. Hospitals lose revenue when doctors depart.


The shift is taking place relatively quickly, and may accelerate even more with the mandates of the Affordable Care Act, as more physicians are saddled with non-medical responsibilities.

Twenty percent of U.S. doctors worked for a hospital in 2012, according to the American Medical Association. That figure rises to 26% if you include doctors in a medical practice partly owned by a hospital. Six years earlier, 16% of doctors were hospital employees..

The growth in direct hospital employment of physicians has accelerated for a variety of reasons, including new payment models offered by public and private insurers that bundle payments for hospitals and doctors for entire episodes of care or establish financial incentives for providers to coordinate care and achieve better outcomes and lower costs. These new models require closer collaboration between hospitals, physicians and other providers, and may be easier to achieve when physician practices are more closely integrated with health systems.