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Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care — NEJM

February 1, 2015 Leave a comment

Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care — NEJM

This article (reproduced in full below) in the New England Journal of Medicine, online January 26, 2015,  is by Sylva M. Burwell, Secretary of Health and Human Services.  It discusses the important concepts of efficiency, quality, waste, and rationing and their intersection with the delivery of healthcare.  References can be found at the online article.

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Now that the Affordable Care Act (ACA) has expanded health care coverage and made it affordable to many more Americans, we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of health care costs. Many efforts have already been initiated on these fronts, leveraging the ACA’s new tools. The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways: using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models; changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and harnessing the power of information to improve care for patients.

As we work to build a health care system that delivers better care, that is smarter about how dollars are spent, and that makes people healthier, we are identifying metrics for managing and tracking our progress. A majority of Medicare fee-for-service payments already have a link to quality or value. Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018. Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients. This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare. Changes assessed by these metrics will mark our progress in the near term, and we are engaging state Medicaid programs and private payers in efforts to make further progress toward value-based payment throughout the health care system. Through Healthy People 2020 and other initiatives, we will also track outcome measures that reflect changes in Americans’ health and health care.

To drive progress, we are focusing on three strategies. The first is incentives: a major thrust of our efforts is to create an environment in which hospitals, physicians, and other providers are rewarded for delivering high-quality health care and have the resources and flexibility they need to do so. The ACA creates a number of new institutions and payment arrangements intended to drive the health care system in this direction. These include alternative payment models such as ACOs, advanced primary care medical-home models, new models of bundling payments for episodes of care, and demonstration projects in integrated care for beneficiaries dually eligible for Medicare and Medicaid.

Looking ahead, we plan to develop and test new payment models for specialty care, starting with oncology care, and institute payments to providers for care coordination for patients with chronic conditions. Three years ago, Medicare made almost no payments through these alternative payment models,1 but today such payments represent approximately 20% of Medicare payments to providers, and as noted above, we aim to increase this percentage. As part of this work, we also recognize the need to continue to reach consensus on the quality measures used and address issues related to risk adjustment in these new models.

Second, improving the way care is delivered is central to our reform efforts. We have put in place policies to encourage greater integration within practice sites, greater coordination among providers, and greater attention to population health. Through the Partnership for Patients, we have engaged U.S. hospitals in learning networks to focus on high-priority risks to patient safety and have already seen significant improvement. There is now a national program to reduce hospital readmissions within 30 days after discharge, which encourages hospitals to improve transitional care and coordinate more effectively with ambulatory care providers. Readmission rates are decreasing nationwide.2 Through the Transforming Clinical Practice Initiative, we will invest up to $800 million in providing hands-on support to 150,000 physicians and other clinicians for developing the skills and tools needed to improve care delivery and transition to alternative payment models. New Medicaid health homes, patient-centered medical homes, and efforts to reorganize care for people eligible for both Medicare and Medicaid are all designed to foster greater integration and coordination.

Third, we aim to accelerate the availability of information to guide decision making. The Obama administration has led a major initiative in health information technology (IT), focusing on the adoption of electronic health records (EHRs) and their meaningful use as a central avenue for transforming care. The proportion of U.S. physicians using EHRs increased from 18% to 78% between 2001 and 2013, and 94% of hospitals now report use of certified EHRs.3 Ongoing efforts will advance interoperability through the alignment of health IT standards and practices with payment policy so that patients’ records are available when needed at the point of care to permit informed clinical decisions to be made in a timely fashion.  HHS has made a commitment to enhancing transparency in the health care market. For example, the Medicare website enables consumers to compare data on the costs and charges for hundreds of inpatient, outpatient, and physician services. Information is available on the quality of hospitals, physicians, nursing homes, and other providers, enabling consumers to make better-informed choices when selecting providers and health plans.

The ACA established the Patient-Centered Outcomes Research Institute (PCORI), dedicated to generating information that can guide doctors, other caregivers, and patients as they address important clinical decisions; PCORI is working with the Agency for Healthcare Research and Quality to disseminate this information. In the years ahead, the research findings from PCORI, disseminated in part through EHRs, can bring critical clinical information to providers and patients when they need it most, at the point of care.

Although we have much to celebrate regarding increased access and quality and reduced cost growth, much of the hard work of improving our health care system lies ahead of us. Care delivered in hospitals was much safer in 2013 than it was in 2010: there were 1.3 million fewer adverse events between 2011 and 2013 than there would have been if the rate of such events had remained unchanged, and an estimated 50,000 deaths were averted. Still, far too many hospitalized patients — nearly 1 in 10 — have adverse events while hospitalized, and many people do not receive care that they should receive, while others receive care that does not benefit them. Growth of health care spending is at historic lows: Medicare spending per beneficiary increased by approximately 2% per year from 2010 to 2014 — a rate far below both historical averages and the growth rate of the gross domestic product.4 Survey data show that more than 7 in 10 people who signed up for insurance in the new health insurance marketplace last year say the quality of their coverage is excellent or good.5 However, it will take additional effort to sustain and augment the positive changes we have seen so far.

We are dedicated to using incentives for higher-value care, fostering greater integration and coordination of care and attention to population health, and providing access to information that can enable clinicians and patients to make better-informed choices. We believe that, by working in partnership across the public and private sectors, we can accelerate these improvements and integrate them into the fabric of the U.S. health system.

Vascular Access Centers: A Complex Picture

September 18, 2014 Leave a comment

Physicians are under a lot of pressure to improve their bottom line. In office procedures as described in this blog, as well as investments in surgery centers and other business ventures, all bring levels of needed regulatory compliance and increased regulatory scrutiny. From the business side, there are many stories of corporate partners from Hell! Before getting involved in any of these “opportunities,” physicians should work closely with their legal and financial advisors.  An ounce of legal prevention is worth a pound of very expensive legal cure.

Florida Healthcare Law Firm Blog

bcbs lawsuitBy: Jeff Cohen

Vascular access centers are a common ancillary service offered by a variety of physicians, mostly nephrologists.  They provide a unique setting for patients requiring interventional vascular services in connection with things like oncology, dialysis, nutritional delivery, wound healing, pain management and more.  Unlike many surgical services, however, they are typically not provided via a surgery center, but rather as part of (and inside) the physician’s practices.

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Federal Government Report Summarizes Health Care Privacy Compliance Efforts

August 31, 2014 Leave a comment

The blogger below summarizes recent reports from HHS on privacy issues. These reports demonstrate (at least, to me) that protecting the privacy of patient health information in the manner prescribed by the HIPAA (and applicable state) laws and regulations may be largely unattainable.  I have concluded that privacy does not merit the emphasis being placed on it or the financial burdens required of the health care industry in order to comply.  The task is a lot like filling up a sieve. There are more important things to worry about in American healthcare.

government buildingThe U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) has issued two reports to Congress required by Section 13402(i) of the Health Information Technology for Economic and Clinical Health (HITECH) Act:

–“Annual Report to Congress on Breaches of Unsecured Protected Health Information For Calendar Years 2011 and 2012” (the Breach Report); and

–“Annual Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance For Calendar Years 2011 and 2012” (the Compliance Report).

Both of OCR’s reports (as well as previous annual reports) may be accessed here. This post discusses the Compliance Report. We summarized the Breach Report in a separate post entitled “Federal Government Report on Data Breaches in Health Care.”

OCR is the office responsible for administering and enforcing the HIPAA Privacy, Security, and Breach Notification Rules. The Compliance Report summarizes OCR’s compliance and enforcement activity with respect…

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AHLA Health Law Curriculum Toolkit

August 24, 2014 Leave a comment

AHLA Screen

The American Health Lawyers Association is devoted to education on the legal issues in the healthcare field.  It has over 12,000 members.

The AHLA recently published its Health Law Curriculum Toolkit to address practice readiness of law school grads wanting to practice in the area of healthcare law.  The Toolkit is illuminating as to what the field of health law is and the issues and requirements that law schools and employers have in dealing with law students and law graduates interested in the field.

What Providers Need to Know Before They Balance Bill

August 16, 2014 1 comment

A very important topic that can get providers into hot water if they do not take the time to understand the requirements of their managed care contracts and Florida law.

Florida Healthcare Law Firm Blog

ACO-Payment-300x225

By: Karina Gonzalez

Balance billing occurs when a provider collects from a patient the difference between the amount billed for a covered service and the amount  paid for that service.  Balance billing does not apply when collecting deductibles, copayments or coinsurance.

Under Florida law, a provider may not balance bill a patient for any service, if an HMO is liable and responsible for payment.  Contrary to what many people believe, this is true whether you are in-network or out-of-network.  Even hospital based out-of-network physicians, such as anesthesiologists, pathologists, radiologists or emergency room physicians cannot balance bill HMO members where the hospital has a contract with the HMO or there was authorization given for an episode of care.

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HFMA Research Report — Value-Focused Acquisition & Affiliation Strategies

July 26, 2014 Leave a comment

A few weeks ago, the Healthcare Financial Management Association (“HFMA”) published a report examining healthcare acquisition and affiliation activity.  The report is titled “Acquisition and Affiliation Strategies” and is available as a free download.

There are no surprises in the Report’s so-called “research highlights.”  In fact, the highlights are ho-hum obvious:

An emphasis on value-focused strategies. The healthcare organizations interviewed for this report understand that the best way to gain market share is by meeting care purchasers’ demand for high quality, convenient access, and competitive prices. They are seeking acquisition and affiliation partners that will help them achieve these goals.

An understanding that different needs require different approaches. Organizational needs vary greatly depending on local market conditions and the organization’s mission, existing capabilities, and future goals. Organizations are considering a range of partners and partnership opportunities to meet these needs, often pursuing several options simultaneously.

The emergence of new organizational combinations. Healthcare organizations are growing both horizontally (e.g., hospital to hospital) and vertically (e.g., healthcare system to health plan), and different types of organizations are combining forces (e.g., academic medical centers and regional health systems).

A blurring of the lines between competition and collaboration. Market conditions and organizational needs are opening up collaborative possibilities for organizations that may have viewed one another as competitors.

The need to change governance and support structures as organizations change. As organizations grow and gain new capabilities, they are reevaluating and reshaping existing board and management structures, IT systems, financial systems and fund-flow models, and physician relationships to accommodate the changes.

However, the conclusion reached by the Report is very telling:

Few doubt that the forces transforming health care today will lead to further consolidation within the industry.  The difference is significant, however, between consolidation that seeks only to increase market power and an acquisition and affiliation strategy that seeks partners who can help produce the cost-efficiencies, gains in clinical quality, and access that care purchasers both need and demand. By taking the latter approach, healthcare organizations will be best-positioned to compete in their markets and win market share by offering patients, employers, and other purchasers a superior value proposition. [emphasis added]

The acquisition/affiliation focus of healthcare organizations has shifted away from market share and toward quality and cost-effective care.  That is an important shift.  Healthcare organizations that may have  looked like good targets in the past may no longer be desirable.  If an acquisition or affiliation is the goal, all parties need to make sure that their own healthcare houses are in order.  Otherwise, they may be standing at the altar alone.

Hospitals Buy Clinics, Doctors’ Practices; Higher Prices Result

July 26, 2014 Leave a comment

I’m shocked to find that hospital run care is more expensive (with apologies to Casablanca):

For the past four years, Pennsylvania insurance company Highmark has watched its bills for cancer care skyrocket. The increase wasn’t because of new drugs being prescribed or a spike in diagnoses. Instead, the culprit was a change that had nothing to do with care: Previously independent oncology clinics and private practices have been acquired by big hospital systems that charge higher rates, sometimes three times as much, for chemotherapy drugs. “The site of care and the type of service provided does not change at all,” says Tom Fitzpatrick, Highmark’s vice president of contracting. “The only significant difference that we primarily see is the [patient] gets a wristband placed on them.”

Hospitals have long charged more than freestanding medical offices for similar services. It’s part of how they pay for higher operating expenses such as running 24-hour emergency rooms. As the Affordable Care Act attempts to steer people away from pricey inpatient admissions, hospitals have begun buying up doctors’ offices in hopes of increasing their revenue and market share. The number of oncology practices owned by hospitals increased by 24 percent from 2011 to 2012. By turning what used to be independent medical offices into so-called hospital outpatient centers, hospitals are creating networks that, critics say, give them the power to set prices and ultimately raise costs for private insurers and government programs such as Medicare.

From Businessweek: Hospitals Buy Clinics, Doctors’ Practices; Higher Prices Result

 

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