The following infographic from the Suncoast Health Council compares various health factors between Pinellas and Hillsborough Counties, Florida:
In the prior post, I noted the opening of Yale Law School’s new Solomon Center for Health Policy and Law. At the opening, there will be a conference on “The New Health Care Industry: Integration, Consolidation, Competition in the Wake of the Affordable Care Act.”
Of course, the so-called “new health care industry” is anything but new. It has been evolving for years, though Obamacare has certainly accelerated it. A better title would be “The Continuing Evolution of the Health Care Industry: Consolidation and Extinction.”
Given its title, the conference will likely focus on BigHealth — the consolidation of health systems and insurers. We are seeing it everyday, and it is certainly important. Unfortunately, the conference will ignore the real battles in the evolving health care industry and where they are being fought and by whom.
I am in the tenches everyday with solo and small physician group practices and other small health care providers as they try to remain independent and give quality health care services to their patients and get paid a fair price for their expertise.
I doubt that there will be any room for LittleHealth in the future, but maybe there should be. One size does not fit all. Who hasn’t experienced the difference between the service provided by Bank of America and that provided by the local community bank?
Nearly 40 years ago, E.F. Schumacher wrote “Small is Beautiful.” One of the lessons he sought to teach us is that we often overlook what is the most appropriate scale for an activity.
Small may not always work, and sometimes bigger is better. But I don’t know if anyone has really thought about it where people’s health is concerned. I would like to see a conference focus on the question of what is the appropriate scale for health care delivery and how to get there. If there is room for the small health care provider, we better find out before they all go the way of the dinosaurs.
When I graduated law school in 1981, health law was pretty much nonexistent. Now, to be relevant, most law schools offer some health law courses.
Because? Health law is hot. It was hot before Obamacare, and it will remain hot.
Getting healthy and staying that way is a passion for most Americans. Obamacare has changed the way the country thinks about dispensing health care. But there will always be sick people. New drugs will be invented, and new procedures adopted. All to make us healthier or to make us more comfortable in our sickness. Health care is big business, and, by necessity, will remain heavily regulated. After all, there will always be patients and providers who will try to game the system.
So, law students, if you don’t know what path to follow, you could do a lot worse than health law
Great podcast for healthcare attorneys and keeping current — The Week in Health Law.
A few weeks ago, the OIG published another one of its fraud alerts. This one was entitled, “Physician Compensation Arrangements May Result in Significant Liability.”
Everyone knows (don’t they?) that business arrangements in healthcare have to meet several legal requirements, including: (1) it cannot be based on the value or volume of referrals, (2) it must be at arms’ length, and (3) it must be commercially reasonable. When a healthcare provider enters into a transaction that violates any of these three requirements, he may have violated the anti-kickback statute or physician self-referral/Stark law or both, and any claim arising from the transaction that is submitted to the federal government for payment may be a false claim. Healthcare lawyers have long been warning their clients to be cautious about how they pay (and recruit) physician employees and contractors in order to avoid violations of the kickback, self-referral, and false claims laws. Violations carry stiff penalties and in some cases criminal sanctions.
There is nothing new in this recent Fraud Alert. Many similar fraud alerts and OIG advisory opinions and actual court cases have passed on the same message. And there is nothing surprising other than that the facts described in this Fraud Alert so obviously violate these healthcare laws that you have to ask, why is no one listening?
I have a three explanations:
- The false claims act was passed during the Civil War and was aimed at stopping corruption in how defense contractors were paid. The law made sense. There was a direct relationship between the defense contractor and the government dollars received. However, the false claims act makes no sense in healthcare — treating a patient is so separated from payment; the provider at the time of care may not know who is paying — government, commercial, the patient, or no one.
- The healthcare laws are so contrary to the economic rules that apply to other businesses and so counter-intuitive as to make them offensively ridiculous and begging to be ignored (which they are).
- As we move to a pay for performance, quality-based healthcare reimbursement system, these laws become even more irrelevant. Case in point — Accountable Care Organizations — a critical foundation for healthcare reform under the Accountable Care Act. ACOs could not operate unless waivers to these healthcare laws were implemented. Every healthcare provider is not in an ACO, but many are developing clinically integrated networks and other arrangements to oversee quality and utilization in order to compete more effectively with large healthcare systems and negotiate with payors in keeping with the goals of healthcare reform. They are forced to act as if the waivers applied to them also. In fact many consultants advise that the waivers DO apply to non-ACO networks.
It is time for a thoughtful review (and repeal) of these antiquated and economically debilitating laws in how they apply to healthcare providers. It is time to stop calling business sensible healthcare transactions fraudulent and punishing the participants.
These laws allow regulators to be lazy and stupid. Anyone can enforce laws based an strict liability or ones that have lines so faint that crossing them is unavoidable.
Seriously, who cares if someone pays a fee for referring a patient for care? Liability should be based on the quality and necessity of the care. Providing care not needed or charging for care not given — those actions should be punished. But that’s harder for regulators, so we continue to vilify healthcare providers and impose burdens on them that are far tougher than the benefits derived.
There is great celebration in the healthcare community about the repeal of the Medicare Sustainable Growth Rate (“SGR”). All the healthcare-related and other media are abuzz reporting on the jubilation:
- Becker’s Hospital CFO Report
- Health Leaders Media
- Modern Healthcare
- Kaiser Health News
In fact, the only comparable celebration that I can recall occurred on the death of the Wicked Witch in the Wizard of Oz. Actually, the repeal of the SGR and the witch’s death are more alike than different.
For years, the SGR has terrorized physicians. Every December and into the following new year, physicians had to wait to see whether their reimbursement from Medicare would be reduced by some double-digit percentage. Recently, physicians have been pawns for Democrats and Republicans trying to make points (perhaps “ping pong balls” is the better metaphor), with their livelihoods held hostage until some form of political rationality prevailed.
According to the summary/analysis of MACRA prepared by the Staffs of the House Energy and Commerce and Ways and Means Committees:
The legislation repeals the flawed Sustainable Growth Rate (SGR) formula and replaces it with the bicameral, bipartisan agreement to return stability to Medicare physician payments. The SGR formula is a cap on aggregate spending on physicians’ services where exceeding the cap resulted in punitive recoupments in subsequent years. The formula was passed into law in the Balanced Budget Act of 1997 to control physician spending, but it has failed to work. Since 2003, Congress has spent nearly $170 billion in short-term patches to avoid unsustainable cuts imposed by the flawed SGR. The most recent patch will expire on March 31st. Based on H.R. 1470, the bicameral, bipartisan unified Committee bill to replace the SGR, this policy removes the imminent threat of draconian cuts to Medicare providers and ensures a 5-year period of stable annual updates of 0.5 percent to transition to a new system. The new system moves Medicare away from a volume-based system towards one that rewards value, improving the quality of care for seniors.
The Medicare Access and CHIP Reauthorization Act, or MACRA for short, has been praised by President Obama who has promised to sign it. The 324-page Congressional print of MACRA does a lot of things in addition to repealing the SGR, including the following:
- Extension of the Children’s Health Insurance Program (“CHIP”) for two years
- Development of “alternative payment models” away from fee for service and toward quality of care
- Strengthening of Medicare’s ability to fight fraud and build on existing program integrity policies
- Additional $7.2 billion for community health centers
- Increasing Medicare premiums for some seniors and elimination of Medigap policies starting in 2020 from covering Medicare deductibles for new beneficiaries
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.