Healthcare & Technology

Population Health in Crisis - Healthcare’s Business Model Origins

Healthcare’s origins are obviously not as complex or as outrageously expensive as they manifest themselves today. Healthcare has evolved into its current state over the past 150 years with decisions that have altered its sole purpose of caring for the ill to an industry of skyrocketing healthcare costs and lower quality. The latter being the quintessential definition of a dysfunctional marketplace. In 1999, the Institute of Medicine (IOM) reported the annual number of deaths in hospitals from medical errors to be between 44,000 and 98,000[i] – and 12 years later we haven’t seen improvement. In 2004, Healthcare IT News reported that “Preventable medical errors persist as the No. 3 killer in the U.S. – third only to heart disease and cancer – claiming the lives of some 400,000 people each year.”[ii] Healthcare needs dramatic changes to enhance quality and lower costs while expanding patient access – also known as the “Triple Aim.[iii] CMS seeks improvements in quality and financial metrics through its Accountable Care Organizations (ACOs), regulations, Bundled Payments, and other innovations. Despite these efforts by CMS, the question that remains is how do we fix healthcare before it starts consuming even more than 17% of GDP. Before we address the innovation issue in subsequent chapters, let’s first discuss the industry’s business model evolution over time.

In 1909, George Bernard Shaw wrote Preface on Doctors: The Doctor’s Dilemma where he claimed that “the medical service of the community, as at present provided for is a murderous absurdity. That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity. But that is precisely what we have done. And the more appalling the mutilation, the more the mutilator is paid. He who corrects the ingrowing toe-nail receives a few shillings; he who cuts your inside out receives hundreds of guineas, except when he does it to a poor person for practice.”[iv] George Bernard Shaw’s scrutiny on payment for medical services in 1909 stands as it does today – fee-for-service (FFS).

By all accounts FFS is as perverse a business model as one can imagine. In no other industry does one get paid simply for “doing stuff.” Imagine if we were having problems with our car’s brakes and we took our car to the mechanic and he invoiced us because he “did stuff” notwithstanding that our brakes were no better off when we left than when we first arrived.  FFS evolved in healthcare likely because it was the path of least resistance. Without adequate means of tracking quality, and without transparent pricing, there was very little left that a business model could be built upon. As impetuous as this model is, today’s providers are not to blame for a business model they inherited. It was, and remains, the only game in town. If you wanted to make a living as a physician, then FFS is how you were paid. This cobbled together mess that FFS encompasses is not what a civilized nation would design knowing what we know now. The reality is that the answer to this question doesn’t matter, we have to transform from where we are today, all other discussions amount to nothing more than flights of fancy.

Continuing our history, hospitals arose in the pre-1890 era, largely to care for the chronically ill in unsafe environments. Most patients preferred care at home, avoiding hospitals. “In 1908, healthcare was virtually unregulated and health insurance was nonexistent. Physicians practiced and treated patients in their homes. The few hospitals that existed provided minimal therapeutic care. When patients saw a physician, they paid their modest fees out-of-pocket; they were more concerned about the wages they would lose if illness kept them out of work than about the cost of their medical care.”[v] Even so, what doctors got paid was under a nascent FFS model. There was no way to track outcomes effectively. The concept of population health was not even a gleam in anyone’s eye.  It was word-of-mouth personal relationships that physicians used as marketing and they did whatever was within their power (i.e. the reputable ones) to save lives and/or ease suffering.

In the 1900s regulation of the health professions began. We experienced the introduction of health insurance by individual payors and government sponsored healthcare provision. In the 1950s and 1960s government expanded use of hospitals nation-wide and introduced Medicare. Since then, we’ve seen rationing of care through Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). It is hard to use the word innovation to describe HMOs and PPOs because they amounted to nothing more than zero-sum attempts at cost shifting between payers and providers with the patient left completely out of the equation. Medicare and some Medicaid recipients have been introduced to Accountable Care Organizations that seek to improve care and lower costs and out of necessity, put patient engagement at its core. Regulations are now abundant, yet we have not seen significant improvement in quality of care. Nonetheless, we see rising, unsustainable healthcare costs, and FFS still dominates, poised to remain unchallenged for the foreseeable future.

Healthcare’s Business Model, FFS, has not changed in 150 years. Therefore, healthcare executives have zero experience reinventing business models nor any practice introducing new and innovative ideas for improvement, the latter often involving a deep understanding of information technology. Healthcare needs a blood transfusion if it has any hope of eliminating the status quo that leads nowhere. We will discuss what that blood transfusion will look like at more length in the “Talent Wars” chapter; however, it is safe to assume that project teams will look radically different than they do today and that some sort of Agile methodology will be in place.

 

[i] Kohn, Linda T., Janet Corrigan, and Molla S. Donaldson. To Err Is Human: Building a Safer Health System. Washington, D.C.: National Academy, 2007. Print.

[ii] McCann, Erin. "Deaths by Medical Mistakes Hit Records." Healthcare IT News. Healthcare IT News, 18 June 2014. Web. 14 Aug. 2016.

[iii] "The IHI Triple Aim." The IHI Triple Aim. The Institute for Healthcare Improvement, n.d. Web. 14 Aug. 2016.

[iv] Shaw, George Bernard, ed. The Doctor's Dilemma: Preface on Doctors. N.p.: n.p., 1909. Print.

[v] Moseley, George B., III, JD, MBA. "The U.S. Health Care Non-System, 1908-2008." AMA Journal of Ethics®., 2008. Web. 15 Aug. 2016.

Population Health in Crisis: The Blind Leading the Blind

Everything you may know about Population Health (PH) is wrong. I wrote about the complexities associated with PH in the ACO Survival Guide (the Guide). The Guide describes the moving parts necessary to succeed using the accountable care model including data analytics, care coordination, quality metrics and, of course, a deep understanding of HHS' evolving reimbursement regulations. Certainly, any knowledgeable observer could review the Guide and conclude that the ACO model was fraught with complexity and there were plenty of opportunities for false starts and outright failures, potentially costing an organization tens of millions of dollars.

In my new book (yet untitled) I will explore the individual points of failure that will lead to many organizations experiencing failed ACO implementations. Here's my thesis in a nutshell: Effective Patient Engagement is ALL that Matters. Although the thesis  may seem obvious to knowledgeable observers, more ambiguous are the kinds of impediments and outright roadblocks that vendors put in the way of achieving this mission, combined with a specific kind of talent deficit in provider organizations that will collectively lead to less than optimal results (understatement). Now, this is not simply evil vendors looking to make a quick buck (although many obviously are) but rather that the vendors seek to impose their innovation agenda on providers and most providers are not knowledgeable enough to understand that the vendor's agenda probably (almost certainly) does not align with their own.

Healthcare providers are not savvy consumers of information technology. In fact, quite the opposite is true. Must providers have been laggards in adopting information technology. We need look no further than the fact that it took the HITECH Act (under its meaningful use provisions) to push providers into adopting electronic health records en masse. In short, even if the vendors and provider's agendas were aligned, the healthcare industry is not poised to innovate anywhere near the pace that vendors are attempting to push it. This cognitive dissonance will cause billions of dollars to go up in smoke industry-wide as population health initiatives are foisted on the marketplace not by the government, but by competitive pressures that have now been unleashed.

Not only are providers experiencing a talent deficit of a significant magnitude, but vendors themselves struggle to attract and retain the talent necessary to succeed on their own agendas, let alone delivering enough talent to support their customer’s success as well. Why is that? Part of the answer is that the healthcare industry is enormously complex; therefore, attracting talent with both information technology skills and healthcare subject matter expertise is daunting. For those of you in the middle of PH initiatives, just review how often project managers have to be swapped, clinical consultants have to be replaced, and projects are delayed due to lack of technical expertise related to one of perhaps dozens of applications that need to be modified in order for the initiative to succeed.

Lastly, technology projects, for example data warehousing/business intelligence projects, often fail (across industries) not because of algorithmic complexity but rather as a result of two principal factors: (1) data complexity (i.e. semantic challenges upholding a single source of truth); and (2) the multiplicity of interfaces between applications requiring integration. In healthcare, these two factors are critical for supporting effective patient care. So why are the blind leading the blind? Because neither vendors nor providers collectively share the same vision or agenda that powers the end game – Effective Patient Engagement. 

Accountable Care and the end of Fee-for-Service?

Link: Inside HealthPolicy: Family Medicine Initiative Releases Goals For Transforming Primary Care

 

Family Medicine for America's Health (FMAHealth), an initiative sponsored by several primary care associations, released a set of six goals for transforming the U.S. primary care system that includes working with both private and public payers to ultimately end fee-for-service pay.

FMAHealth seeks to “adopt a uniform and simplified model of comprehensive payment that encourages front-end investment in expanded practice infrastructure and technology, rewards Triple Aim goals (better care, better health and lower costs) and supports broad, team-based care.”ⁱ

It is widely known that our country spends more on healthcare for less quality than other nations. The Commonwealth Fund sponsored an analysis of cross-national health systems based on Organization for Economic for Co-operative Development health data to place the performance of the U.S. health system in an international context.ⁱⁱ  It shows significant spending by the US in all three categories of 1) Out-of-pocket spending, 2) private spending and 3) public spending.

In the report The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations, it reports “the U.S. has fewer hospital beds and physicians, and sees fewer hospital and physician visits, than in most other countries. Prescription drug utilization, prices, and spending all appear to be highest in the U.S., as does the supply, utilization, and price of diagnostic imaging. U.S. performance on a limited set of quality measures is variable, ranking highly on five-year cancer survival, middling on in-hospital case-specific mortality, and poorly on hospital admissions for chronic conditions and amputations due to diabetes.”ⁱⁱ  

If the U.S has fewer beds, sees fewer hospital and physician visits, what is the source of our per Capita spending? Findings indicate that although healthcare spending is significantly higher than other countries, we are not delivering quality results. We had the highest rates of hospital admissions for the five major chronic conditions and the greatest number of lower-extremity amputations due to diabetes. Is it possible that Accountable Care Organizations and the goals of the Triple Aim to provide better care at lower cost will shift the cost curve down?  CMS projects health spending to grow at an average rate of 5.8 percent from 2012-2022;ⁱⁱⁱ however, in a press release dated 8/25/2015, CMS reported that "20 ACOs in the Pioneer ACO Model and 333 Medicare Shared Shavings Program ACOs generated more than $411 million in total savings in 2014, which includes all ACOs’ savings and losses. At the same time, 97 ACOs qualified for shared savings payments of more than $422 million by meeting quality standards and their savings threshold. The results also showed that ACOs with more experience in the program tended to perform better over time."^iv

"With chronic disease on the rise amidst an aging demographic and accounting for ever more health care spending, more effective treatment and management in primary care settings, and Accountable Care Organizations, may have the potential to simultaneously improve patient care while preventing the unnecessary use of scarce and expensive resources."^v 

  

For more information on Accountable Care tools and regulations please visit the ACO Survival Guide Website or sign up for the FREE ACO Newsletter.

 

ⁱ H. J. Jiang, C. A. Russo, and M. L. Barrett, Nationwide Frequency and Costs of Potentially Preventable Hospitalizations, 2006, Healthcare Cost and Utilization Project Statistical Brief #72 (Rockville, Md.: Agency for Healthcare Research and Quality, April 2009).

ii Squires, David. "The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations." The Commonwealth Fund. 1 July 2011. Web. 11 Sept. 2015. http://www.commonwealthfund.org/~/media/Files/Publications/Issue Brief/2011/Jul/1532_Squires_US_hlt_sys_comparison_12_nations_intl_brief_v2.pdf. 

iii  Ibid.

iv  "National Health Expenditure Projections 2012-2022 Forecast Summary." Centers for Medicare & Medicaid Services. Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. Web. 11 Sept. 2015. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/proj2012.pdf. 

 

Accountable Care Quality Measures

Link: What Are The 9 Reasons to Stop Scoring Patient Experience?

The above link is a post from Paul Roemer on quality measurement from the patient's perspective. Although he brings up a few good points about the timeliness and validity of the CAHPS^® Survey, monitoring and measuring the quality of care provided to ACO Beneficiaries is directly correlated to a revenue gain or bust. Of particular interest in Paul's post is the need to compare your scores, question by question (or measure by measure), against average scores for other health systems.

The ability to analyze your performance against the performance of like entities provides a data-driven, procedural approach for analyzing the delivery process. Clearly, population management relies on data-driven methods to analyze and identify high-risk members and allocate services.

So, prior to developing the ACO Quality Measure Checklist, I took a random sample of ACOs and looked at their performance on the Quality Measure Scores. There was significant variation in the results between ACOs as well as the national mean. Recently I took a random sample of ACOs and looked at their performance on the Quality Measure Scores. There was significant variation in the results between ACOs as well as the national mean. 

You can make your own conclusions...

This first domain of the Patient/Caregiver Experience shows very little variation between ACOs and against the national mean. The quality measures in this domain may easily be implemented by different practitioners.

The domain of Care Coordination and its metrics begin to show some variation with the last three measures. Note the continuity of the selected ACOs for Figure 14 Care Coordination. An interesting occurrence is spot-on performance for ACO Measures 8 through 10. Items 12 and 13 show variation where it might not be expected. Medication Reconciliation and Screening for Fall Risks are two standard activities for new patients, patients admitted to hospitals, and regular screening procedures for primary care. Note the mean performance rate for all ACOs.

Now, in the domain of Preventive Health we see some significant variation that is most likely due to the fact that primary care Physicians have not previously been compensated for preventive health and associated interventions. Influenza and Pneumococcal Vaccinations are standard for individuals ages 65 and over unless contraindicated. Adult weight screening and individuals with Diabetes are another area of interest. Tobacco, colorectal, mammography and blood pressure screening should be a standard practice for primary care. Note the mean performance rate in bold for all ACOs.

And finally, in the domain of the At-Risk Population there is widespread gaps and variation in the process of care for ACO Beneficiaries with chronic conditions. Because regulations state that avoidance of At-Risk populations is cause for termination of an ACO, the population of beneficiaries that qualify for measures 22 through 33 should correlate to the number of beneficiaries with associated diagnoses or comorbid conditions. Note the mean performance rate for all ACOs.

Data Source: "Medicare_Data_to_Calculate_Your_Primary_Service_Areas." Centers for Medicare and Medicaid. Centers for Medicare and Medicaid, 2012. Web. 14 Feb. 2015. http://www.cms.gov/Medicare/Medicare-Fee-for-Service-payment/sharedsavingsprogram/Calculations.html.

 

For more information on Accountable Care tools and regulations please visit the ACO Survival Guide Website or sign up for the FREE ACO Newsletter.

 

Accountable Care Informatics Video

If more information is needed, please visit the ACO Survival Guide Website or sign up for the FREE ACO Newsletter.

Analytics and Comprehensive Primary Care

Link: Rise Health Platform Supports Comprehensive Primary Care Initiative in Colorado.

The CMS Comprehensive Primary Care (CPC) initiative is a four-year multi-payer initiative designed to strengthen primary care. CMS has collaborated with commercial and State health insurance plans in seven U.S. regions to offer population-based care management fees and shared savings opportunities to participating primary care practices to support the provision of a core set of five “Comprehensive” primary care functions.

 

These five functions are: (1) Risk-stratified Care Management; (2) Access and Continuity; (3) Planned Care for Chronic Conditions and Preventive Care; (4) Patient and Caregiver Engagement; (5) Coordination of Care across the Medical Neighborhood. 

 

Rise Health, a Best Doctors company, has engaged Physicians with valuable insights will present results at Summit by iHT2, a Healthcare IT meeting scheduled July 20-22. For more information on their efforts in Colorado, visit http://www.risehealth.com/media-room/news/rise-health-platform-supports-comprehensive-primary-care-initiative-connecting-colorado/

 

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Accountable Care Organizations and use of Telehealth/Telemedicine?

Healthcare Reform in America - Simple Medicine

Pioneer Accountable Care Organizations exhibited smaller Medicare expense

Accountable Care Organizations and use of Telehealth/Telemedicine?

Link: Early Savings from Banner Telehealth Pilot

 Health Data Management (in the above link) reported savings from use of Telehealth that resulted in reductions in readmissions and healthcare costs. The ONC's Federal Health Information Technology Strategic Plan 2011-2015 described the use of technology to improve care, improve population health and reduce per capita costs of health care.  Goal II defined opportunities to Improve Care, Improve Population Health, and Reduce Health Care Costs through the Use of Health IT.

This same technology could be used in an Accountable Care Organization (ACO) to improve care and reduce costs. Systems, like telehealth, have been implemented in certain ACOs. Remote monitoring, mobile health (mHealth), and the medical home have the potential to positively affect patient lives.

The light bulb has been turned ON. Healthcare is migrating from a disease management system to a “National Prevention and Health Promotion Strategy” that prevents adverse health conditions where possible, anticipates and responds to threats and emergencies and identifies at-risk populations. To me, this strategy represents the goals for ACOs.

Reducing spend for ACO populations is key to health transformation and overall cost reductions in Medicare spending. According to the Banner Health Telehealth pilot, results were dramatic. By having a strong support system for patients, clinicians were able to "collect and analyze objective and subjective health information to identify early stages of deterioration" and to prevent worsening health conditions. Banner health reported enrolling its 500th patient into their program.

An Accountable Care Organization has a minimum of 5,000 patients with care coordinators responsible for monitoring patient status. Their beneficiaries are located throughout a geographic area and the ACO could gain significant cost reductions with positive patient care opportunities using Telehealth.

Several years ago, I was asked to be a panelist on a Bloomberg webinar on Telehealth. The question at the time was simple, "Is telehealth a viable alternative to face-to-face patient care?" I believed it then, and I believe it now, when used in appropriate situations. For more information on Telemedicine and its Telehealth subpart, read this post about the World Health Organization and Telemedicine Opportunities.

 

Pioneer Accountable Care Organizations exhibited smaller Medicare expense

Link: JAMA

In 2012, CMS launched the Pioneer Accountable Care Organization model and the Medicare Shared Savings Program. The Pioneer ACO model is a more ambitious test of population health management that targets experienced organizations. This model is an attempt to test viability of Accountable Care organizations and their ability to reduce spending and improve the quality of care provided to beneficiaries.

A study reported in the May 4, 2015 edition of JAMA reviewed Medicare spending, utilization and CAHPS domain scores for Pioneer ACOs in 2012 or 2013. The objective of the study was to evaluate spending and utilization between beneficiaries aligned with Pioneer ACOs and other FFS beneficiaries.

The study was "based on the work of evaluation contractors for the Evaluation of CMMI Accountable Care Organization Initiative performed under Contract HHSM-500-2011-00019i/HHSM-500-T0002 with the Centers for Medicare & Medicaid Services (CMS). CMS provided access to the data to the evaluation contractors to perform analyses under the guidance of Drs Nyweide, Lee, and Cuerdon. In conjunction with the contractors, Drs Nyweide, Lee, and Cuerdon designed the study and helped with interpretation of the data."

Data was obtained from CMS' Chronic Conditions Data Warehouse. The CMS Chronic Conditions Data Warehouse (CCW) provides researchers with Medicare and Medicaid beneficiary, claims, and assessment data linked by beneficiary across the continuum of care. The following graph is an example of Medicare Chronic Conditions by Medicare Status Code for 2013.

 For more information about Accountable Care Organizations and the regulations that support them visit the ACO Survival Guide store. ACO Quality Checklist coming soon!

 

Is Fee-for-Service dead?

Link: CMS Lays Out Vision for Physician Quality Reporting Programs.

“With passage of H.R.2 [SGR repeal and Medicare provider payment modernization], key components of these physician programs will serve as the foundation for the Merit-based Incentive Payment System.” 

“The Strategic Vision describes in concrete terms how we will advance the goals and objectives for quality improvement outlined in the CMS Quality Strategy through these quality measurement and reporting programs.”

The Medicare Sustainable Growth Rate (SGR) is a method to control spending by Medicare on physician services. CMS' Quality Strategy seeks to optimize health outcomes using clinical quality improvement and healthcare transformation, including payment reform. The vision streamlines existing quality programs to reduce healthcare professionals’ burden, acknowledging constraints of existing physician quality reporting program requirements and regulatory processes.

Source: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy-Goals-Poster.pdf

As announced in January, 2015 by HHS, the move to migrate from a purely fee-for-service (FFS) payment system to alternative payment methods, like Accountable Care reimbursement models, reward providers based on the quality and cost of care provided to Medicare beneficiaries. HHS announced the goal of "tying 30% of payments to quality and value through alternative payment models by 2016 and 50% by 2018 under alternative methods for payment reimbursement created by the Affordable Care Act. 

One aspect of the burden associated with quality reporting involves the collection of data from disparate sources in order to report and monitor quality performance. This is what I might consider the next step in technology use; movement from data captured in an EHR to analysis of clinical, operational and financial data collected from multiple sources. Data collection may accumulate in a data warehouse or an application used for data analysis. Monitoring performance and quality metrics provide the opportunity for continuous improvement in patient care and reduced costs.

As an example, Accountable Care Organizations (ACOs) have proven their ability to reduce Medicare costs in the short time of their existence. As of September, 2014, total net savings to Medicare was about $484 million in shared savings.

 

Accountable Care Organizations (“ACOs”) face Complex Regulatory Challenges

Link: Press Release

The Accountable Care (ACO) Survival Guide Store now contains a 3-hour training program with a Question and Answer Quiz to help ACO Professionals and their partners better understand the daunting challenges of CMS regulations. The training is broken up into 3 parts: Eligibility and Application Requirements, Benchmark and Performance targets, and understanding the calculations for selection of a Shared Savings and Losses risk model. For more information visit the ACO Survival Guide Store.