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Paying For The ‘Doc Fix’


March 26th, 2015

For years now it has become apparent that the Sustainable Growth Rate (SGR) system is not sustainable.  However, fixing the SGR will require increases in budgeted costs, and so one of the major barriers to replacing the SGR is figuring out how to pay for the fix. Towards this end, it is important to understand the appropriate cost-comparison.

Federal scorekeepers (appropriately) assess the cost of the SGR fix relative to current law, which assumes that fees will follow a trajectory defined by current policy. But as near as I can tell, few advocate for that path or believe it will occur; rather the current system will continue to require regular “patches”.  Therefore, the appropriate measure of the cost of the doc fix is spending with the fix relative to spending without it.  The latter includes the costs of future “patches” necessary to ensure continued operation (as well as any savings that can be achieved because of continued SGR related negotiations).  Substituting this realistic alternative into the cost calculus likely substantially lowers the incremental cost of any SGR fix.

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The Final Stage Of Meaningful Use Rules: Will EHRs Finally Pay Off?


March 25th, 2015

Six years ago, President Obama signed into law the HITECH Act, which spelled out a path to a nationwide health information technology infrastructure.  The goal was simple:  every doctor, nurse, and hospital in America should use electronic health records — and do it in a way that leads to better care delivered more efficiently.  The Act provided $30 billion in incentives for providers and hospitals who met the criteria for “Meaningful Use”, which the Obama administration was given the authority to define.  The rules were set up to be rolled out in three stages, and while the first two stages have been out for a while, the criteria for the third and final stage of Meaningful Use (MU) were finally released on March 20.

David Blumenthal, the first national coordinator under HITECH, used the analogy of the Meaningful Use program as an escalator — with the first stage focused on just getting people on board and each stage requiring a higher level of use — which would focus on demonstrating better care through advanced EHR use.  Put more simply, the goal of the three stages was to first get providers to just start using EHRs, and then over time to get them to use the systems more frequently, more robustly, and ultimately, in ways that lead to better, more efficient care.

The new stage 3 rule reflects both the successes and the failures of the first two stages.  It moves toward making the EHR market more open and competitive, and providing more choices, in ways that I think are helpful — but possibly not helpful enough.

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What Is Behind The Post-Recession Bend In The Health Care Cost Curve?


March 23rd, 2015

It has been a while since I last had the opportunity to analyze the slowdown in health spending and the extent to which it represents a lasting bend in the cost curve, as opposed to lingering effects of the “Great Recession or other temporary changes.” (See Note 1)

Distinguishing Health Care Cost Curves

When we discuss bending the health care cost curve, two questions arise: “Which curve?” and “Short run or long run?” In this post, I focus on the curve represented by the growth rate in national health expenditures (NHE) pre- and post-recession. Other curves of interest include “excess growth” (health spending growth in excess of gross domestic product [GDP] growth) and the closely related health spending share of GDP. For analysis of all three curves over the very long run, including a provocative “big bang” theory about the origins of excess growth, see Tom Getzen’s blog. A fourth curve that has gotten my attention, through the work of Gene Steuerle, is the health spending share of the growth in real per capita GDP. (See Note 2)

I now turn to the present topic, the record low growth in NHE that began in 2009 (the year in which the recession ended) and continued through 2013 (the most recent year for which we have official data). There has been extensive discussion about whether these low rates are the result of temporary cyclical factors, such as the recession, or more permanent structural factors. As detailed below, I conclude that, to a surprisingly large extent, the answer is neither: the bulk of the decline in the health care spending growth rate resulted from lower economy-wide price inflation and some temporary factors not tied to the recession.

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What Kind Of Advance Care Planning Should CMS Pay For?


March 19th, 2015

Currently, Medicare does not offer a paid benefit for advance care planning (ACP). As a result, health care providers who want to assist Medicare enrollees with ACP do so voluntarily and neither they, nor their institutions, are compensated for their time and efforts. This is not only an unfair expectation on individual practitioners or health institutions, it is also medically and ethically unsound. Fortunately, two recent events have the potential to reshape the landscape of advance care planning in the U.S.

Cultural And Policy Evolution In Advance Care Planning

On September 17, 2014, the Institute of Medicine (IOM) published Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life. The report is built on two basic premises:

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Physician Aid In Dying: Whither Legalization After Brittany Maynard?


March 12th, 2015

Editor’s note: This post is part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015. The conference brought together leading experts to review major developments in health law over the previous year, and preview what is to come. A full agenda and links to video recordings of the panels are here.

Brittany Maynard’s highly publicized decision to end her life under Oregon’s Death With Dignity law has given a new face to the American right to die movement. It is that of a young, attractive, athletic newlywed, who would not have considered herself as having a stake in the movement until the day she learned a brain tumor was the cause of her severe headaches. She was terminally ill and faced a future of six months of increasing pain, debilitation, and severe seizures before dying.

A video of Maynard’s story produced by the non-profit advocacy organization Compassion and Choices has reached many millions of viewers. Extended coverage of her decision-making process by People Magazine resulted in record numbers of hits to the publication’s website. During her illness, Maynard moved from California to Oregon and on November 1, 2014 took barbiturates to end her life. In her memory, her husband and mother have become prominent activists in the effort to legalize physician aid-in-dying (PAD).

Is all of this likely to advance the PAD movement and, if so, through what legal processes?

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Health Affairs Web First: Assessing Efforts To ‘Solve The Sustainable Growth Rate Formula Conundrum’


March 11th, 2015

On April 1, unless Congress acts to prevent it, the current Sustainable Growth Rate (SGR) fee cut will take effect, dictating a 21.2 percent reduction in Medicare physician fees. A new commentary, released today by Health Affairs as a Web First, assesses last year’s bipartisan and bicameral legislative model for how to repeal the SGR, a model likely to be used in similar efforts this year.

The 2014 legislation contained many useful steps to replace the SGR but had a major omission, authors James Reschovsky, Larisa Converse, and Eugene Rich of Mathematica Policy Research argue: It did not adequately address overhauling the current Medicare fee schedule.

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Where Is HITECH’s $35 Billion Dollar Investment Going?


March 4th, 2015

On April 16, 2013, we released “REBOOT: Re-examining the Strategies Needed to Successfully Adopt Health IT,” outlining concerns with implementation of the Health Information Technology and Economic and Clinical Health (HITECH) Act. Specifically, we asked: What have the American people gotten for their $35 billion dollar investment?

Two years after releasing the white paper, and six years since enactment of the HITECH Act, the question remains. There is inconclusive evidence that the program has achieved its goals of increasing efficiency, reducing costs, and improving the quality of care.

We have been candid about the key reason for the lackluster performance of this stimulus program: the lack of progress toward interoperability. Countless electronic health record vendors, hospital leaders, physicians, researchers, and thought leaders have told us time and again that interoperability is necessary to achieve the promise of a more efficient health system for patients, providers, and taxpayers.

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Open Payments: Early Impact And The Next Wave Of Reform


March 3rd, 2015

Editor’s note: This post is part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015. The conference brought together leading experts to review major developments in health law over the previous year, and preview what is to come. A full agenda and links to video recordings of the panels are here.

The Physician Payments Sunshine Act, a provision in the Affordable Care Act, seeks to increase the transparency of the financial relationships between medical device and drug manufacturers, physicians, and teaching hospitals. Launched on September 30, 2014 by the Centers for Medicare & Medicaid Services (CMS), the Open Payments database collects information about these financial relationships and makes that information available to the public.

As of early February, the Open Payments database includes documentation of 4.45 million payments valued at nearly $3.7 billion made from medical device and pharmaceutical manufacturers to 546,000 doctors and 1,360 teaching hospitals between August 2013 and December 2013. This included 1.7 million records (totaling $2.2 billion) without the names of physicians or teaching hospitals who received the payments.

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The Patient Access Imperative: A Potential Triple Win For Payors, Providers, And Patients


February 26th, 2015

Long patient wait times, frustratingly high no-show rates, lack-luster call center performance, and under-utilized physicians. Does any of this sound familiar? Although a small set of health systems have boldly declared that their physicians guarantee their outpatients same- or next-day appointments, across the United States patients more typically face long wait times to both make and get appointments, as well as poor access to care.

To succeed in the future, health systems will need to have the customer orientation of a five-star hotel and the operational discipline of a factory floor. Our experience suggests that many systems can achieve substantial improvements with their existing resources and generate a 10 to 20 percent improvement in outpatient profitability within 6 to 12 months — and improve patient satisfaction too.

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Achieving Shared Decision-Making In Women’s Health


January 28th, 2015

The frustrating labor and delivery experience shared by physician and ethicist Carla Keirns in her Narrative Matters essay, “Watching The Clock: A Mother’s Hope For A Natural Birth In A Cesarean Culture,” published in the January issue of  Health Affairs, was unfortunate. That is not debatable. That her outcome was favorable – a healthy baby ultimately delivered in the way that Keirns had hoped – does not excuse the less-than-ideal coordination, and communication, of care that she received.

Fortunately, Keirns had the tools at her disposal—such as medical training and solid relationships throughout the provider community—to help ensure that she was able to have the birth that she had planned. But few women have those tools. It is time for us to work harder to ensure that the voice of the mother is factored into the birth experience — both before labor and during delivery.

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Early Evidence On Medicare ACOs And Next Steps For The Medicare ACO Program (Updated)


January 22nd, 2015

Note: Pratyusha Katikaneni and Carmen Diaz also contributed to this post. They are both research assistants at the Engelberg Center for Health Care Reform, The Brookings Institution.

On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time.

The proposed rule raises more issues than it settles, but it clearly indicates that CMS is open to meaningful public comments and will make important revisions in the MSSP. However, the proposal also illustrates the challenges of resolving these issues in a way that both assures substantial ACO participation and improvement, as well as Medicare savings.

Ideally, big changes in key features in a major program like the MSSP would be based on extensive empirical evidence on what determines success in the program. Unfortunately, only limited evidence, including case studies and some comparative data, is available on the determinants of success for Medicare ACOs, and thus on the MSSP. Data released by CMS in September, which we previously reviewed, showed that the MSSP has generated over $700 million in savings to date relative to the spending benchmarks in the program. This is around 1 percent of the costs of care for beneficiaries affected by Medicare ACO initiatives.

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Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?


January 22nd, 2015

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

The event is sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine, and co-sponsored by Health Affairs, The Hastings Center, and the Center for Bioethics at Harvard Medical School. Below, we will highlight a few themes that have emerged so far. The conference’s speakers will author a series of posts that follow on more specific topics.

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Graduate Medical Education: The Need For New Leadership In Governance And Financing


January 14th, 2015

With the creation of the Medicare program in 1965, a funding stream was established to support the training of medical residents who provided care for Medicare beneficiaries. In subsequent years, Medicare has maintained these payments to teaching hospitals and remains the largest payer for Graduate Medical Education (GME), with expenditures totaling about $10 billion annually. This represents two-thirds of Federal GME support, with another $4 billion per year provided to hospitals through State Medicaid GME support.

This expenditure was a major motivation for the Senate Finance Committee to request the Institute of Medicine (IOM) to issue a report entitled “Graduate Medical Education That Meets the Nation’s Health Needs.”  The Report proposed major reforms to create a GME system with greater transparency, accountability and strategic direction, in order to increase its contribution to achieving the nation’s health goals. Prior to publication of this long awaited report on July 29, 2014, GME financing policies received substantial attention in the last two sessions of Congress, with a particular focus on increasing the number of federally funded GME positions. The House and Senate committees with GME jurisdiction produced multiple legislative initiatives.

However, there was considerable opposition from primary care stakeholders to some of the proposed changes because of inadequate emphasis on ambulatory training. Possible redistribution of Medicare GME funding was also of concern to many. This seemed to dissuade Congress from passing reform of GME policies. Nevertheless, 1,500 new GME positions were authorized in the recent Veterans Health Administration legislation.

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CMS Spending Report Leads Health Affairs 2014 Top-Ten List


January 13th, 2015

A report on 2012 health spending by analysts at the Centers for Medicare and Medicaid Services Office of the Actuary was the most-read Health Affairs article in 2014. To celebrate the New Year, Health Affairs is making this piece and all the articles on the journal’s 2014 top-ten list freely available to all readers for two weeks.

Health Affairs publishes annual retrospective analyses of National Health Expenditures by the CMS analysts, as well as their health spending projections for the coming decade. In the latest installment in this series — which also made our 2014 top ten — the analysts reported on 2013 health spending and discussed their findings at a Washington DC briefing. The two reports documented continued slow growth in health spending; the 2013 report featured the slowest rate of health spending growth since CMS began tracking NHE in 1960.

Next on the 2014 Health Affairs most-read list was an article on PepsiCo’s workplace wellnesss program. John Caloyeras and coauthors at RAND and PepsiCo found that the diseases management component of the program saved money, but the lifestyle management component did not. This was followed by two Narrative Matters essays by Charlotte Yeh and Diane Meier; another Narrative Matters piece, by Janice Lynn Schuster, rounded out the list at number ten.

The full top-ten list is below. And check out the 2014 most-read Health Affairs Blog posts and GrantWatch Blog posts.

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New Narrative Matters: A Mother’s Hope For A Natural Birth In A Cesarean Culture


January 9th, 2015

Health Affairs‘ January Narrative Matters essay features a physician and mother on giving birth in a culture that increasingly pushes women toward cesarean sections. Carla Keirns’ article is freely available to all readers, or you can listen to the podcast.

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Implementing Value-Based Payment In Practice


January 7th, 2015

Editor’s note: This post is part of a series of several posts related to the 4th European Forum on Health Policy and Management: Innovation & Implementation, to be held in Berlin, Germany on January 29 and 30, 2015. For more information or to request your personal invitation contact info@centerforhealthcaremanagement.org.

Meeting the objectives of a value-based care model requires hospitals and health systems to realign operational processes, invest in targeted resources (such as physician extenders, educational initiatives and care coordination structures), educate physicians and staff, change organizational culture, and invest in capital (such as physical locations and information technology).

Within hospitals, quality measures have been evolving from purely structural-based outcomes (such as the existence of attributes or features like a hospitalist program or an electronic medical record) to process-based (the percent of surgical patients who received prophylactic antibiotics or acute myocardial infarction patients who received aspirin within 24 hours of arrival) to patient-centered outcomes (return of a patient’s functional status post-surgically or measurement of post-surgical pain).

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What Does ‘Big Data’ Mean In The Context Of Coordinated Care?


December 30th, 2014

Editor’s note: This post is part of a series of several posts related to the 4th European Forum on Health Policy and Management: Innovation & Implementation, to be held in Berlin, Germany on January 29 and 30, 2015. For more information or to request your personal invitation contact the Center for Healthcare Management.

In economic terms, coordinated care is about vertical integration in the quest of a competitive edge. Just as IBM subjects its computer chip suppliers to rigorous monitoring to ensure a high-quality, high-price product, so too do health insurance companies impose restrictions on participating providers designed to achieve a favorable ratio of patient utility to cost and with it, a competitive ratio of the utility of policy holders to premiums.

This endeavor calls for collating information from multiple sources, which is typical of big data: When does a particular health problem arise? Why? What is the appropriate intervention? Who should provide it? How should it be carried out? Where should it be provided? Answers to these questions are necessary for the implementation of quality assurance programs.

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The Strategic Challenge Of Electronic Health Records


December 16th, 2014

Despite a 2005 prediction that electronic health records (EHRs) would save $81 billion, RAND Corporation just validated clinicians’ complaints in a report describing EHRs as “a unique and vexing challenge to physician professional satisfaction.” The American Medical Association also published EHR “usability priorities” – strong evidence that current EHRs don’t support doctors in practicing medicine.

In a world of Apple-typified simplicity, why is it so hard to get the right EHR? Because, unlike Apple, EHR designers haven’t started with the question of how value can be created for users of the technology. Technology isn’t the problem. The challenge is in articulating clinicians’ information needs and meeting them by making the right tradeoffs between corporate and business unit strategies.

EHRs can, and should, provide relevant information when and where clinicians need it, recognizing that care is not a commodity and that different care processes have different information needs. User interfaces must anticipate clinicians’ needs rather than require individual user design. EHRs need to eliminate low-information pop-ups and alarms and instead provide alerts and reminders that are both timely and relevant. They must be designed with assiduous attention to data entry requirements, replacing blind mandates with thoughtful assignment of the task and the timing.

In this post I look at how rethinking the design of EHRs can better balance the different strategic needs within care delivery organizations.

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New Health Policy Brief: Physician Compare


December 16th, 2014

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at the evolution and current development plans for Physician Compare, a website mandated by the Affordable Care Act (ACA). A simple version of the site first launched in 2010.

Since then the Centers for Medicare and Medicaid Services (CMS) has slowly been adding limited sets of data listing the various physician groups participating in a number of Medicare quality improvement initiatives. In 2015 the site will expand to include more recent and extensive information about physician performance and quality of care, in a format that’s similar to the other ACA-generated websites — Hospital Compare, Nursing Home Compare, Home Health Compare, and Dialysis Facility Compare.

These sites, which encompass tens of thousands of facilities nationwide, are credited with advancing accountability and motivating improvements in care and quality. They are also faulted as poorly organized and inadequately audited when the data are submitted by facilities.

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Why I Oppose Payment Reform


December 12th, 2014

I recently gave the keynote address at the New York State Health Foundation Conference “Payment Reform: Expanding the Playing Field.” This blog post is adapted from those remarks (you can watch the half-hour speech beginning around the eight-minute mark).

I had my epiphany shortly after I announced my departure from the National Academy for State Health Policy (NASHP) about nine months ago. In an effort to help find my successor, I contacted some executive search firms. One firm quoted what they referred to as the “market price.” When I pressed them to tell me how much effort this price represented, they declined to do so. Ultimately, I recommended that NASHP contract with a search firm that charged by the hour.

It was then that I realized that, given the choice between capitation (a fixed fee for the outcome I desired) and fee-for-service (an hourly rate with no accountability for the outcome), I, as a purchaser, chose fee-for-service. Only a hypocrite would go around talking about the importance of payment reform, while secretly conducting business the old way!

Having given the matter some further thought, I present my five reasons for opposing payment reform:

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