South Texas Healthcare Blog

 

Doctors Say No Pay No Play -- Thursday, May 5, 2005

Planned Medicare cuts are prompting doctors to say one negative consequence will be spending for information technology. A recent AMA survey found 54 percent said they will defer IT spending if Medicare reduces rates in one year, and 67 percent will if the cuts are extended.

A report from the AMA today says the timing of the Medicare cuts couldn't be worse, because evidence suggests doctors have reached a tipping point for adopting electronic health records and other technology that ultimately could save time and money. In April, the Manhattan Research company also reported that, when it compared its 2005 survey data to results from a similar 2002 survey, it found that three times as many doctors now say technology is essential to their practice.

The AMA survey further found that eight percent (of the 5,400 polled) said they would close or sell their practice if the government goes forward with planned Medicare cuts for one year. If the cuts are extended, 43 percent said they would pack it in.

Planned Medicare cuts, now being debated in Congress, would slash physician pay by about 4 percent in 2006 and 26 percent over a six-year period ending in 2011.

Physicians Executives’ Survey Finds Ethics Troubles -- Tuesday, May 3, 2005

A survey published by the American College of Physician Executives (ACPE) suggests the that ethical challenges to physicians' professionalism are coming from external threats. Specifically, when asked who is “sowing the minefield through which today's physicians have to try to pick a righteous path, respondents named health care plans and health insurers, pharmaceutical and device manufacturers, hospitals and health system, and malpractice attorneys.

Respondents said they are troubled about unethical business practices within their own organization (one in three thought at least one physician in their organizations were "involved in unethical business practices; 11 percent thought a board member was, while 14 percent thought there was a non-physician administrator behaving unethically).

More than half of the respondents (53.8 percent), said they could identify another healthcare organization in their community that was involved in unethical business practices.

A large majority (70 percent) said their organization had a written code of ethical behavior, nearly two two-thirds (60 percent) said enforcement of code was lax.

Most respondents were concerned (33 percent “very concerned;” 33 percent “moderately concerned”) about board members or non-physician executives with conflicts of interest, especially because they accept gifts from vendors.

Some respondents comments:

• "Our health care system is designed to encourage unethical behavior by its misplaced financial priorities."
• "Current medical practice on a corporate level is schizophrenic."
• "Ultimately, the bottom line corrupts absolutely!"
• "'Business ethics'... an oxymoron?"

Now the question is how can we get the folks with these concerns together, and figure out what to do about them?

DoJ Files Suit Against Local DME Dealer -- Monday, May 2, 2005

The U.S. Department of Justice last Friday filed a civil suit against New Braunfels-based The Scooter Store, alleging the company has submitted fraudulent claims to Medicare and Medicaid for power wheelchairs. The suit, filed in the U.S. District Court for the Western District of Texas in San Antonio, is a counterclaim to a complaint filed by The Scooter Store for reimbursement for disallowed claims for power wheelchairs.

Allegations of fraulent claims are nothing new in the DME business. What is interesting in this development is that the federal government took notice of what it believes are suspicious practices of a company that hasn't exactly been invisible.

The Scooter Store was founded in 1991, has been listed on Inc. Magazine's list of "the nations fastest growing privately held companies" for each of the past four years and has submitted some $400 million in Medicare and Medicaid claims for power wheelchairs since 1997. With more than 60 retail locations nationwide, it is one of the country's largest suppliers of power wheelchairs.

The company's growth has also been aided by the millions of dollars worth of television advertising it has spent in the past few years.

The facts of the case will determine whether or not the company committed fraud. But the timing of the suit, especially as a counterclaim to the company's complaint, makes one wonder -- rhetorically, of course -- if the good folks at DoJ might have been asleep at the switch for a while.

Healthcare Insurance Reform; How Do You Like Yours? -- Wednesday, April 27, 2005

There’s a provision in the Bush tax proposals that, if passed, would all but end private health insurance as we know it. Because the proposed tax law changes are meant to be revenue-neutral, their implementation would be paid for by eliminating certain deductions on personal federal tax returns. Chief among these would be deductions for state and local taxes. Businesses no longer would be able to deduct certain expenses, chief among these are deductions for employer-paid health insurance premiums.

If these measures were to pass, be assured that most employers simply would drop comprehensive health insurance benefits.

While you might assume that insurers would oppose such a scheme, that’s unlikely. The trend in managed care already suggests that the biggest insurers can boost profits best, even as they lose customers, provided they shed the more expensive customers. The key to profits for them rests solely on the ratio of claims paid to premiums collected. Under the Bush tax proposal, insurance companies would lose a lot of customers, but most would be workers in the least competitive, and thus lowest paying jobs. These are the relatively poorer, sicker among us. Conversely, employers likely would continue to offer comprehensive healthcare benefits to workers in fields where competition for those workers is highest. Coincidentally those workers are, relatively speaking, the wealthier and healthier workers.

The social fallout, of course, is obvious. Far more lower-income workers and their families would go uninsured. Those who might find coverage likely would pay more, but they also likely would use it less. Already strained public health facilities would be overrun. State and local budgets would be stretched further still, and, of course managed care profits would soar.

Despite all those likely outcomes, political support will be ample, at least in the near term. Many individuals favor proposed tax code changes if they can be persuaded it means a theoretical extra dime in their pockets today, regardless of what it costs them down the road. Insurers likely will donate heavily to candidates who favor such changes. Eliminating employer-sponsored health care deductions almost certainly would undermine labor union strength, and thus undermine support for politicians who would oppose such tax code changes.

A cynic might view all this as part of the needed reform of our healthcare delivery system. Popular as it might be, pushing more of the sick and injured through the emergency room funnel, however, is not exactly one of the more rational reforms we might contemplate.

Price Comparison for Hospitals -- Wednesday, April 20, 2005

There's currently a bill making its way through Congress that would enable comparison shopping online for medical care:

The Hospital Price Disclosure Act (HR 1362) was introduced by Congressman Dan Lipinski this month as a way to get more healthcare price information to the public. Consumers would be able to look up prices charged for the 25 most-commonly performed inpatient and outpatient hospital procedures, and the 50 medications most often administered.

There's already a similar state-level bill underway for Ohio.

Why only 25 procedures and 50 medications? That's a ridiculously narrow sliver--why not provide the first 1,000 procedures and 5,000 medications? Once they set up the system, scaling it up likely wouldn't be a problem.

American College of Physicians Board Tackles Flawed Payment System -- Monday, April 18, 2005

The issue of the dysfunctional payment system topped the Board of Governors meeting agenda last week (04/11/05) as Governors, Regents and invited speakers met to discuss the flawed reimbursement system and ways to reform it.

"The dysfunctional payment system is oppressive, Byzantine and discriminatory," said Cecil B. Wilson, who led the discussion from the physician's perspective. Dr. Wilson, who has a solo practice in Winter Park, Fla., said he has more than 1,300 insurer addresses in his computer and that three-to-four month payment delays are common whenever a patient switches plans.

Patients often expect their physicians to know the details of each plan, he added, while insurers expect doctors to be 100 percent accurate in their filings or face payment delays. Fear of denied or delayed payments, he added, encourages physicians to adopt tactics such as downcoding to avoid denials.

Dr. Wilson listed other problems of the flawed payment system from the physician's point of view, including administrative hassles and poor communication between physicians and insurers.

The Governors discussed the idea of the primary care physician's office as the patient's "medical home," with the internist acting as care coordinator and being reimbursed accordingly.

Several Governors also suggested changes to the insurance industry, including standardizing benefits across plans and mandating individual coverage. By simplifying communication among insurers, doctors and patients, the Governors said, additional savings would be realized. Governors also pointed out that pay-for-performance programs could hold some answers by rewarding doctors for efficiently using technology and for following evidence-based guidelines.

The Governors also approved a number of resolutions related to reimbursement to be considered by the Board of Regents. Those included:

• Funding pay-for-performance rewards with new dollars created from cost savings, separate from inflationary updates in physician fee schedules.
• Increasing compensation for cognitive services by exploring changes to the current payment system. Suggested changes included changing the Medicare formula of tying fee increases to the sustainable growth rate and revising the fee-for-service-based payment methodology, which is based on acute episodic care.
• Working with the AMA to advocate for an increase in physician fees for visits to Medicare beneficiaries in nursing homes.

  

Health Plans Jump on the e-Prescribing Bandwagon -- Monday, April 18, 2005

Horizon Blue Cross Blue Shield of New Jersey is the latest health plan to provide support to physicians who shift to electronic prescribing, according to the New Jersey Star-Ledger. Doctors have been slow to embrace e-prescribing because it costs them money and time while most of the benefits accrue to health plans, pharmacies, office staff and patients.

However, health plans are realizing that they can generate a high return on investment by providing financial support for e-prescribing. Plans like e-prescribing because it improves formulary compliance and use of generics by presenting information at the point of care. It's also good for patients, because it reduces errors from sloppy handwriting and allows checking for drug-drug interaction and allergies. And it helps cut down on phone calls and paperwork for prescription renewals.

E-prescribing is also a good first step to prepare doctors for electronic medical records. And when e-prescribing, electronic medical records and claims systems are fully integrated, physicians will be able to rely on decision support systems to analyze all the information about a patient's medical record and insurance coverage to suggest the most efficacious and cost effective treatments.

Insurance Group Focuses on WC ‘Specialty Networks’ -- Monday, April 18, 2005

The RIMS (Risk Insurance Management Society) conference in Philadelphia and discussions with three large insurers have been remarkably similar; all are focusing efforts these days on so-called "specialty networks"; smaller networks of physicians who have demonstrated their ability to manage workers compensation cases cost-effectively.

This is the first of what could loosely be described as a trend in workers comp medical management.

One large insurer indicated that although it favors smaller networks built around docs that are WC experts, many of their customers are "still not there yet". That is, these policyholders are still wedded to the "percentage of savings" model for buying health care.

If you have yet to understand that the party with the most impact on a WC claim is the treating physician, now's the time to educate yourself.

Concierge Practices Fail to Thrive -- Friday, April 15, 2005

The Boston Globe reports that "concierge practices" are not succeeding. The concept refers to primary care physicians who cut their panels from about 2,000-2,500 patients down to 300-600 patients, and charge each patient an extra $1,500-4,000/year in exchange for better access, longer appointments, and more personalized care.

Why hasn’t concierge medicine caught on? Many patients get good service from their existing doctors.

Medicare physician fee cut may really happen in 2006 -- Wednesday, April 13, 2005

For the past four years, Medicare has proposed cuts in the fee schedule for physicians. And for the past three years, the AMA has prevailed upon Congress to turn those cuts into 1.5 percent increases. However, this time the proposed 4.3 percent cut may stick. The last time it happened this way was 2002, when reimbursement rates were cut by 5.4 percent.

Why the tough news for doctors now?

Utilization has been increasing, so total payments to doctors (reimbursement rate x volume) are rising much faster than the fee schedule.

• The overall budget is under pressure (think Iraq and tax cuts).
• Reversing the decrease will cause pain elsewhere: by making Medicaid cuts deeper, or making the premium increase for Medicare recipients even higher.
• The Medicare Drug Benefit is going to start squeezing out other benefits over time --although there won't be much effect next year.

The one year cut isn't a big deal. The real question is whether in the coming years we'll see fees brought back to the baseline as happened after the last cut, or whether it's the start of a downward ratchet.

Massachusetts' workers comp problems -- Friday, April 8, 2005

The state with one of the lowest fee schedules has been experiencing rapidly rising medical costs. The result of this trend has been that Massachusetts, long known for its draconian fee schedule, has seen total claims costs increase 10 percent from 2000-2002, after a period when costs were only going up 5.5 percent a year on average. The data come from the Workers' Comp Research Institute.

According to Insurance Journal:

“The major cost drivers of growth in the most recent year were continuing double-digit growth in medical costs per claim and very rapid growth in benefit delivery expenses per claim…The very rapid growth in benefit delivery expenses per claim - costs associated with managing claims - was driven by a rapid rise in medical cost containment expenses per claim and increases in litigation expenses per claim in the latest year.”

This is yet another example of the fallacy of price controls. Low fee schedules encourage over-utilization, which encourages longer disability duration, which drives up total claims costs. Moreover, this higher utilization forces payers to use cost containment programs such as UR, peer review, and clinical guidelines (where possible) in an attempt to control the volume of treatments.

Perhaps an even more important question is:

Has the fee schedule and attendant over-management of physician decision-making caused “good” doctors to abandon the WC system, thereby depriving employers and injured workers of the best possible treatment?

Nevada tries to regulate emergency room wait time -- Tuesday, April 5, 2005

Nevada legislators are pushing forward a bill to require hospitals to treat patients within 30 minutes of their arrival at the emergency room by ambulance. The bill wouldn't impose any penalties, but supporters say it would shine a spotlight on wait times because none of the hospitals would want to perform poorly.

This bill seems well intentioned, and maybe it will work. It may produce some unintended side effects, however. By only covering patients arriving by ambulance, it may encourage abuse of the EMS system by patients who could get to the ER under their own power. It could cause busy ERs to divert patients to other hospitals, which could increase the total wait time.