Health Care Reform Memo: February 20, 2012
Deloitte Center for Health Solutions publication
The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.
From Paul Keckley, Executive Director, Deloitte Center for Health Solutions
Friday marked the third anniversary of the American Recovery and Reinvestment Act (ARRA)—the most significant legislation in history to stimulate use of health information technologies (ITs) to improve the effectiveness and efficiency of the health system. And today marks the start of the perennial Woodstock for health IT purveyors and users—the Healthcare Information and Management Systems Society’s (HIMSS) Annual Conference and Exhibition in Las Vegas.
“Technology-enabled information-driven health care”…this saga seems to be taking forever. HIMSS has been around since 1961—indeed our industry is slow to change. It needs jolting at times. For instance, in April 2004, in the Bush Administration, the Office of the National Coordinator for Health Information Technology (ONC) in the U.S. Department of Health and Human Services (HHS) was created. It lit a fire.
In February 2009, President Obama signed the Health Information Technology for Economic and Clinical Health (HITECH) Act, a key element of ARRA that authorized $19.2 billion for enhanced Medicaid and Medicare payments to providers who adopt “meaningful use” of health IT in their practices between 2011 and 2015 with penalties thereafter if they don’t. It fueled the fire.
And in the Affordable Care Act (ACA), there is implicit reference to and dependence on health ITs throughout—to enable accountable care, episode based payments, physician quality reporting, medical homes, fraud detection, workforce training, enrollment in health exchanges, and an abundance of others. It fans the fire. Understandably, the Congressional Budget Office (CBO) projects the sticks and carrots approach in ACA will result in the adoption of comprehensive electronic health records (EHRs) by 90 percent of physicians and 70 percent of hospitals by 2019. I hope so.
Last week, HHS Secretary Sebelius reported that the percentage of hospitals that use EHR systems more than doubled from 2009 to 2011 per an American Hospital Association (AHA) survey. She shared that nearly 2,000 hospitals (35 percent of total) and more than 41,000 doctors have received $3.1 billion in incentive payments for ensuring meaningful use to date and, per the AHA data, 85 percent of its members intend to apply by 2015. Good news. The train has finally left the station. And gratefully, amidst the talk of a protracted economic recovery and in the heat of the political season, cuts to health IT-dependent efforts seem to have survived the scalpel of government number crunchers.
I believe in the promise of IT in health care. I am frustrated it’s taking us so long to get there, and perplexed by the myriad of excuses used to delay its full-scale adoption and, more important, embrace by its stakeholders.
This week marked my 8th week of recovery from knee surgery and subsequent clotting. To date, I have no clue what I have spent. And my medical records are floating between four hospitals and five labs. Only one comes close to meaningful use: the others are well intended but the reality is “we need to get on with it.”
Having to beg to have a record “faxed” or “e-mailed” to a referring physician instead of using snail mail as requested makes no sense.
Having to ask if my medication history can be sent from my electronic repository (personal health record [PHR]) to be embedded in charts in lieu of filling out redundant forms seems senseless.
Having to ask a clinician if they considered an alternative therapeutic strongly supported by evidence as I studied my care path to be told “it’s not something we do” is inexcusable.
Having to defend that meaningfully used electronic medical systems improve accuracy in diagnoses and appropriateness in care coordination and treatment plans only to be told “the incentive isn’t enough” makes no sense: would any other profession be given such a pass?
And knowing that we’re facing a meltdown in the system when the only route to better care and lower costs simultaneously is technology-enabled information driven health care is simply incomprehensible.
My initial reaction is to encourage the fire be stoked by equipping consumers with the knowledge they need to know which providers are meaningful users and those that are not. And perhaps amp up access to more information about performance. That will no doubt happen.
For now, I am satisfied that we accelerate a “tools not rules” approach to widespread deployment, buoyed by recognition that to do less is unprofessional and harmful to patients.
A lot has happened in since HIMSS was birthed at the “Hospital Management Systems Society” 51 years ago. Its mission “healthcare transformation through the effective use of health IT” hasn’t changed. Let’s get on with it.
Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions
Major provisions in the ACA re: adoption, standards, use of health IT
Source: HIMSS, “The Patient Protection and Affordable Care Act Summary of Key Health Information Technology Provisions,” June 2010.
CMS provides guidance for Part C, Part D plans
Friday, Centers for Medicare & Medicaid Services (CMS) announced proposed payment and policy guidance for Medicare Part C (Advantage plans) and Part D (prescription drug plans) for 2013:
- To control beneficiary costs and premium increases: using authority granted by ACA provisions, CMS stated it will deny bids that include significant increases in cost sharing or decreases in benefits from one year to the next.
- To lower drug costs: per ACA, eligible enrollees in the Medicare Part D coverage gap will continue to receive a 50 percent discount on covered prescription drugs and will see cost sharing reduced by 2.5 percent.
- To strengthen Part D and Medicare Advantage plan quality: beginning in 2013, CMS will alert beneficiaries if their selected health plan or drug has failed to achieve a three-star quality rating for three straight years. Enrollees in this case will enter a special enrollment period, which will allow them to move into a higher quality plan if they desire.
- To reduce inappropriate overuse of prescription drugs: CMS will propose improvements to Part D plans’ drug utilization management in an effort to address overprescribing and overutilization of opiates.
Key assumptions/inputs underlying Friday’s guidance:
- Initial estimates of Medicare Advantage Growth Percentage and the Fee-For-Service (FFS) Growth Percentage. Note: the effect of these growth percentages combined is estimated to be around 2.5 percent.
- Notice of changes under ACA that make Medicare Advantage benchmarks more similar to Medicare FFS costs and base part of Medicare Advantage payment on plan quality.
- Guidance to organizations interested in offering demonstration plans in 2013 from the Medicare-Medicaid Coordination Office.
- To account for discrepancies in Medicare Advantage plans and Part A and Part B providers, CMS will continue with the coding pattern adjustment of 3.41 percent applied to all Medicare Advantage plans in an effort to improve payment accuracy.
- Statutory updates to the annual benefit parameters for the defined standard Part D prescription drug benefit.
Note: CMS expects these policies will continue lowering premiums and improve benefits to beneficiaries. Last month, it announced that Medicare Advantage premiums dropped by 7 percent over the last year while enrollment increased 10 percent.
Source: CMS, “CMS Proposes 2013 Payment and Policy Updates for Medicare Drug and Health Plans to Ensure Choice and Improve Quality,” February 17, 2012.
ACRO: Payments Sunshine Act should not be applied to clinical research by physicians
Citing concerns that physicians will be discouraged from conducting research because of “potential mischaracterizations of their income,” the Association of Clinical Research Organizations (ACRO) called for CMS to exclude research on drugs not yet approved for sale by the U.S. Food and Drug Administration (FDA) from new payment reporting requirements.
In ACA, Section 6022 “Physician Payments Sunshine Act” (co-sponsored by Senators Chuck Grassley [R-IA] and Herb Kohl [D-WI]) stipulates that CMS is required to publish online payments and “transfers of value” made to physicians and teaching hospitals by group purchasing organizations (GPOs) and drug, device, biologic, and medical supply manufacturers. ACRO believes the reporting requirement would be burdensome and costly to sponsors of research and discourage investment. It estimates direct compliance costs at $224 million for its members averaging $8-10 million annually for its large members.
CMS estimates the requirements affect some 334,500 physicians, 1,100 teaching hospitals, 1,150 manufacturers, and 420 GPOs.
HHS proposed rule requiring doctors and hospitals to return overpayments
Tuesday, HHS announced a proposed rule requiring Medicare providers and suppliers paid under Medicare Parts A (i.e., hospitals) and B (i.e., physicians) to report and return overpayments within 60 days per ACA Section 6402. CMS has already received approximately $5 million in Medicare overpayments. CMS will accept comments on the rule until April 16, 2012. Medicare overpayments include:
- Duplicate submission of the same service or claim;
- Payment to the incorrect payee;
- Payment for excluded or medically unnecessary services; or
- Payment for non-covered services.
HHS awards $9.1 million in ACA funding to strengthen primary care; technology-enabled primary care key
Monday, HHS awarded $9.1 million in ACA funding for the National Health Service Corps (NHSC) Students to Service Loan Repayment Program—a pilot program that provides up to $120,000 in loan repayment assistance to medical students (MDs and DOs) in their last year of education if they practice primary care in a health professional shortage area. Loans will go to medical students in 30 states and D.C. and will be administered by HHS’ Health Resources and Services Administration (HRSA) Students to Service.
Note: the average medical school debt of the students receiving the repayments is over $200,000 (HRSA Administrator, Mary K. Wakefield). ACA Section 5207 increases and extends the authorization of spending for the NHSC scholarship and loan repayment program for Fiscal Year (FY) 2010 – FY 2015. By 2015, the U.S. could have a shortfall of 29,800 primary care providers (PCPs) (Source: Sarah Kliff, The Washington Post, “The health reform law’s biggest threat: 30,000 too few doctors,” February 11, 2012). The Deloitte Center for Health Solutions analysis: supply is likely to be accommodated by increased residency slots in primary care, expanded scope of practice for advanced practice nurses and nurse practitioners, and use of technologies that connect PCPs with consumers: biomonitoring, group visits, telemedicine, and PHR-EHR connectivity. The supply is not a matter of MDs or DOs, but technology-enabled care management under the supervision of primary care teams.
HHS: ICD-10 implementation deadline pushed back
Thursday, HHS Secretary Kathleen Sebelius announced that “HHS will initiate a process to postpone the date” for health care entities to comply with ICD-10 as part of President Obama’s commitment to reducing regulatory burden. In a final rule released in January 2009, HHS delayed ICD-10 compliance by two years to October 1, 2013 from the original compliance date specified in the 2008 proposed rule. HHS will announce a new compliance date in the future.
Note: Tuesday, acting CMS Administrator Marilyn Tavenner told reporters after speaking at the American Medical Association (AMA) Advocacy Conference in Washington, D.C. that CMS will “re-examine the timeframe” for ICD-10 implementation through the rulemaking process stating that “there’s concern that folks cannot get their work done around meaningful use [of health IT], their work around ICD-10 implementation, and be ready for [insurance] exchanges.”
Background: ICD-9 was released by the World Health Organization (WHO) in 1975 and the U.S.-modified version was adopted in 1979. ICD-10 was endorsed by the World Health Assembly in 1990 and published in 1992. It is used by 110 countries with 25 countries adopting modified versions of ICD-10 and limited application in the U.S. Development of ICD-11 is under way with expected release in 2015 per WHO.
Note: The Deloitte Center for Health Solutions will host a webinar about ICD-10 timeline changes and implications as soon as additional detail is available.
Congress approves deal on SGR payment fix; proposes $11.1 billion in cuts to ACA
Friday, the U.S. House of Representatives (293-132) and U.S. Senate (60-36) voted to extend physician payments at current levels through the year, averting the 27.4 percent payment called the Medicare sustainable growth rate (SGR). The plan—Middle Class Tax Relief and Job Creation Act of 2012—also extends current 2 percent payroll tax breaks for employees through the end of the year.
This is the 13th time Congress has passed legislation averting cuts under the SGR. The plan’s $143 billion price tag will be paid by cutting funding for ACA, including prevention funding, and payment cuts to hospitals and clinical labs. Highlights of major program investments and cuts over ten years:
|Who is impacted||Provision||Increase in/cuts in spending over 10 years|
|Inpatient, rural hospitals||Extends higher wage payments to “Section 508 hospitals” through 3/31/2012, when the program ends.||
+ $100 million
|Outpatient facilities, rural and community hospitals||Eliminates an expansion per ACA Section 3121 that extends the outpatient hold harmless payments for rural hospitals and sole community hospitals (SCHs) with fewer than 100 beds through 12/31/2012.||
+ $100 million
|Physicians and services paid under the physician fee schedule (Medicare Part B)||Prevents 27.4% Medicare payment cuts for physicians per the SGR through 12/31/2012.||
+ $18 billion
|Physicians and those paid under physician fee schedule (Medicare Part B)||Extends the floor on the adjustment to the work portion of for physician payments that capture the geographic area where a physician practices.||+ $400 million|
|Therapists, outpatient facilities||Extends outpatient therapy caps exceptions process through 12/31/2012 and institutes modifications requiring the physician reviewing the therapy plan of care to reject claims above the spending cap that do not include the proper billing modifier. Provides for a manual review of all claims for high cost Medicare enrollees to ensure that only medically necessary services are being provided.||+ $700 million|
|Laboratories, pathologists, outpatient facilities||Allows independent laboratories that have an arrangement with eligible hospitals to bill Medicare directly, as opposed to billing the hospital, for the surgical pathology services through 6/30/2012.||
+ $50 million
Per CBO the provision increases spending by less than $50 million.
|Emergency departments, outpatient facilities||Extends these add-on payments: 3% for urban ground ambulance services, 3% for rural ground ambulance services, and an increase to the base rate for ambulance trips starting in “super rural” areas through 12/31/2012. Also requires reports from the Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) on ambulance provider costs and whether the ambulance fee schedule should be reformed.||
+ $100 million
|Physicians, states||Extends the Medicare Qualifying Individual (QI) Program that provides federal reimbursement for states to cover Part B premiums for seniors with incomes between 120% and 135% of federal poverty level, through 12/31/2012.||
+ $600 million
|Enrollees||Extension of Transitional Medical Assistance (TMA) for low-income families transitioning into employment through 12/31/2012.||+ $1.1 billion|
|Inpatient, safety-net, and rural hospitals; nursing homes||Reduces spending for bad debt payments to hospitals and nursing homes.||
- $6.9 billion
|Prevention programs, public health providers||
Reduces funding for the Prevention and Public Health Fund.
Note: the White House’s FY 2013 budget also reduces funding for the Prevention and Public Health Fund by about $4.5 billion/10 years.
- $5 billion
|Clinical laboratories, outpatient facilities||
Reduces clinical lab service payments by 2% in 2012.
Note: the new reset base for the 2014 payment update for clinical labs will be based on that of 2013. October 2011, MedPAC recommended a 10% payment cut to clinical labs.
- $2.7 billion
|Inpatient, safety-net and rural hospitals||Rebases hospital disproportionate share hospital (DSH) payments.||
- $4.1 billion
|Louisiana||Eliminates extra funding for Louisiana's Medicaid program post-Hurricane Katrina.||- $2.5 billion|
Industry response: the AMA responded stating that Congress’ action “represents a serious missed opportunity to permanently replace the flawed Medicare physician payment formula and protect access to care for military families and seniors. People outside of Washington question the logic of spending nearly $20 billion to postpone one cut for a higher cut next year, while increasing the cost of a permanent solution by about another $25 billion.” A two-year patch to the SGR will cost $39 billion and the cost to repeal the SGR will increase from $290 billion to $346 billion. The combined cost increase for taxpayers is nearly $100 billion (AMA). Clinical labs, hospital groups, and other provider groups expressed strong opposition to the plan.
White House releases FY 2013 budget
Monday, the White House released its budget for FY 2013 closely resembling the “supercommittee’s” deficit reduction package that failed to pass the 12-person group last fall. It calls for about $3.8 trillion in deficit reduction over ten years, including $1 trillion in savings from statutory caps placed on discretionary spending by last summer’s Budget Control Act of 2011. The budget raised the estimated cost of replacing the SGR formula to $429 billion over ten years from $316 billion, CBO’s earlier estimate. Both houses of Congress must review and pass the budget for it to become law. A central feature is proposed cuts of $364 billion to Medicare and Medicaid over ten years in addition to other programmatic changes.
ACA-related features: the budget includes additional funding for ACA implementation via a CMS increase of 26 percent mainly for implementation of HIX and budgets CMS at $76.4 billion increases. The budget also proposes about $1.2 billion in funding to the U.S. Department of Treasury (DOT) to regulate ACA tax-related programs but includes cuts in preventive health programs in ACA among others:
|Medicare & Medicaid||
|ACA tax-related provisions||
Republican Senators release Medicare reform plan featuring vouchers
Thursday, Senators Tom Coburn (R-OK) and Richard Burr (R-NC) released a Medicare reform plan that allows retirees to select private health insurance coverage or traditional Medicare in 2016, gradually increases the Medicare eligibility age from 65 to 67 in 2027 to match Social Security’s eligibility age, and institutes higher premiums and co-payments (i.e., means-testing) for seniors with higher incomes. The plan also proposes to address the SGR by freezing Medicare payments at current levels and would repeal the Independent Payment Advisory Board (IPAB).
Senators introduce legislation to strengthen FDA drug shortage reporting
Tuesday, Senators Amy Klobuchar (D-MN), Bob Casey (D-PA), and Susan Collins (R-ME) introduced an amendment—Preserving Access to Life Saving Medications Act—to require all drug manufacturers to report anticipated shortages of critical drugs to the FDA six months in advance. Those that don’t report shortages would face strict fines.
Note: this amendment was added to the Senate surface transportation bill instead of to the drug user fee legislation which must pass this year. The FDA averted almost 200 drug shortages in 2011 partly due to an increase in voluntary early notifications from companies.
Increased user fees for FDA in White House budget proposal
The administration’s FY 2013 budget proposal includes $583 million in seven proposed new user fees with total industry fees funding 98 percent of the agency’s $654 million increase over FY 2012 funding levels. The administration announced support for lowering biologic exclusivity to seven years from the 12 years in ACA. The changes increase the appropriation from $3.5 billion (FY 2012) to $4.5 billion (FY 2013) and industry user fees from $1.39 billion (FY 2012) to $1.97 billion (FY 2013). The proposed new user fee programs include two pending before Congress—the bio-similar drug fee program ($20.2 million), generic drug fee programs ($300 million), $14.7 million in re-inspection fees for medical products, $220 million in food facility registration and inspection fees a la the Food Safety Modernization Act, $5.6 million for FDA surveillance of products imported through international couriers, $18.7 million in cosmetic facility registration fees to give the agency more capacity to oversee cosmetics, and $4.9 million in food contact substance fees to enhance oversight of food packaging and processing equipment.
Wisconsin’s medical loss ratio (MLR) request denied, North Carolina’s is partially granted: Thursday, the Center for Consumer Information and Insurance Oversight (CCIIO) rejected Wisconsin’s request to phase in a MLR per ACA Section 1001 of 71 percent, 74 percent, and 77 percent for 2011, 2012, and 2013. CCIIO partially granted North Carolina’s request for an MLR waiver allowing them to phase in an MLR of 75 percent in 2011 reaching the 80 percent required threshold in 2012.
Note: ACA Section 1001 requires health insurance companies to spend 80 percent to 85 percent of premium dollars on medical care and health care quality improvement starting in 2011. States can apply for MLR waivers this year and in 2013. To date, CCIIO has completed reviews of MLR waiver requests from 17 states and one territory. Partial or full waivers were granted to seven states (Georgia, Iowa, Kentucky, Nevada, New Hampshire, North Carolina, and Maine [partial]) and rejected requests from ten states (Delaware, Florida, Indiana, Kansas, Louisiana, Michigan, North Dakota, Oklahoma, Texas, and Wisconsin). Guam was granted an exemption.
Note: also, Thursday, HHS posted new documents related to the MLR that health plans must complete showing how much of their premium dollars were spent on administrative costs and medical care.
Hospitals and health systems in Virginia provided over $2.2 billion in community support, accounting for about $27.7 billion in economic activity and employing about 129,000 individuals. Since 2009, hospitals in Virginia increased community support by $200 million, leading to increased economic impact worth $2.7 billion. Hospitals also increased employment by 7,000 individuals. (Source: Virginia Hospital & Healthcare Association, “The Impact of Virginia Hospitals and Health Systems on their Communities,” January 25, 2012.)
California is considering selling its three mobile hospitals next year to save the state $1.7 million annually as the state faces a $9.2 billion deficit. The hospitals were purchased in 2006 for $172 million to prepare the state for emergencies such those related to hurricanes and flu outbreaks.
The New York City Department of Health and Mental Hygiene Primary Care Information Project (PCIP) will test a model for the Query Health project through a pilot to expand population health monitoring.
Note: ONC launched the Query Health initiative in September 2010 stating, “Instead of relying on centralized databases, the distributed query approach provides access to aggregate data for specific analytical purposes without identifying individual information, and allows the data to remain behind the health care organization’s firewalls, thus maintaining patient privacy and security. By ‘bringing the question to the data,’ health care providers in their local communities are empowered to respond proactively to disease outbreaks, understand the efficacy of drug treatments, and monitor health trends. This ability to understand large-scale health trends can contribute to reducing the cost of health care and most importantly, improving the health of our citizens.”
Tuesday, in Oregon, 30 Republicans and one Democrat blocked approval of a bill providing final approval of the state’s HIX. Republicans in the state Senate indicated that they will block a companion bill unless it is amended to limit awards associated with medical malpractice lawsuits.
Tuesday, Vermont’s director of health care reform, Robin Lunge, said the state’s essential health benefits (EHB) package is expected to be finalized March 1. Vermont’s EHB package, effective 2014-2016, is expected to cover physician and outpatient care, inpatient hospitalizations, emergency services, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative and chronic disease care, laboratory care, preventive and wellness services, and pediatric services (including oral and vision care for children). The state’s EHB will be modeled off one of three packages already being offered in the state: one offered by MVP Health Care, the Blue Care plan from Blue Cross Blue Shield of Vermont, or the Cigna Health Care state employee plan.
Note: that state has not determined how it will pay for EHBs. EHB coverage will apply to the state’s HIXs; the state has not started planning benefit coverage for its single-payer system—Green Mountain Care—which will be operational in 2017.
Deloitte survey: consumer opinions about health IT
Today, the Deloitte Center for Health Solutions released a new Issue Brief—Engaging Health Care Consumers through Information Technology—derived from its annual 2011 Survey of Health Care Consumers in the United States. Among key findings:
- Gaps remain in consumers’ use of online tools and resources to supplement their interactions with physicians and hospitals. Of the consumers who report using the Internet in the past year, 90 percent use it to purchase merchandise, 84 percent to conduct online banking, and 65 percent to reserve an airline ticket. However, only 43 percent say they sought online information about medical treatment options, 28 percent looked for quality information on a physician or hospital, and 19 percent looked for information on treatment costs. Overall, consumers are highly interested in using devices to monitor their health and communicate with their doctor; additionally, two in three consumers say they are interested in seeing physicians who use ITs in their practice.
- Over three-quarters of consumers report that they are at least moderately concerned that the privacy and security of their information would be at risk if they were using a computer program or website to maintain a PHR, or were sharing information with their doctor through an Internet connection.
- In Deloitte’s segmentation analyses from its consumer database 2008-2011, a key cohort, “online and onboard,” represents the early adopters of IT-enabled health solutions—mainly urban, commercially insured, middle age and younger consumers inclined to use technology as a central lifestyle characteristic. As noted below, while those expressing desire for connectivity or indicating use of online tools has remained constant through the period, it appears early adopters in the “online and onboard” segment are driving greater use of and higher dependence on health IT applications in their interactions with the system.
|Expressed interest in using technology to check medical status and send it to doctor||NA||68%||NA||61%|
|Maintain a PHR in some type of electronic format||8%||9%||10%||11%|
|Searched online for information about the quality of care provided by a PCP or medical specialist||NA||27%||24%||28%|
DEA moves against major distributors
The Wall Street Journal Marketplace headline Wednesday—“Pharmacies Swept into Drug Wars” —chronicled raids on four pharmacies in Florida, alleged of fulfilling “staggering” amounts of oxycodone. At issue, the Drug Enforcement Administration’s (DEA’s) new strategy of targeting drug distribution companies in addition to the retailers and physician prescribers in its efforts to reduce drug abuses in the system.
KLAS study: EHR use improves effectiveness in medical device use
For the report—“Medical Device Integration 2012: Proven Connections”—KLAS surveyed 74 providers who gave feedback about the performance and connection/report capabilities of three major medical device integration systems (MDIS) concluding three major benefits: improved physiological monitoring accuracy by automating documentation, increased time for clinicians for patient care analysis, and increased data by which physicians may analyze trends and other clinical patterns.
End-of-life measures proposed: NQF
Tuesday, the National Quality Forum (NQF) announced approval of 14 palliative and end-of-life care measures covering areas such as patient and family experience, pain management, and shortness of breath. An NQF panel had considered 22 such measures, ultimately endorsing the final list of 14. “For this project, NQF sought measures focused on care concerns such as managing pain, weight loss, and depression. It also sought measures that would directly assess—and improve over time—the experience of patients undergoing palliative and end-of-life care, as well as the experience of their families.” Notably, four of the 14 measures involve perceptions of care provided by patients and/or family members.
Note: NQF is a voluntary consensus standards-setting organization operated as a Non-Governmental Organization (NGO) to “build consensus on national priorities and goals for performance improvement and working in partnership to achieve them; endorse national consensus standards for measuring and publicly reporting on performance; and promote the attainment of national goals through education and outreach programs.
Survey: physicians reluctant to tell patients everything
In a nationwide survey of roughly 1,800 physicians, 55 percent of doctors admitted they had “described a patient’s prognosis in a more positive manner than warranted.” In addition, 17 percent had some level of disagreement with the notion that they should “never tell a patient something that is not true.” Not only that, but 11 percent of those surveyed acknowledged that they had told a patient “something that was not true” in the past year. (Source: Iezzoni et al, “Survey Shows That At Least Some Physicians Are Not Always Open Or Honest With Patients,” Health Affairs, February 2012, 31:2383-391.)
AAMC: changes proposed in physician training
Thursday, the Association of American Medical Colleges (AAMC) approved the fifth edition of the Medical College Admission Test (MCAT) including new sections on “psychological, social, and biological foundations of behavior and critical analysis and reasoning skills” and deleting the writing section. The updated MCAT, first used in 1928, will be used starting in 2015. The test also includes two sections on natural sciences, including biology, chemistry, biochemistry, and physics. Note: 43,919 individuals applied to U.S. medical schools in 2011 and 19,230 enrolled.
NIST seeks manufacturers to develop EHR systems
The National Institute of Standards and Technology (NIST) announced that it seeks manufacturers to supply EHR systems for NIST to use to develop a framework for assessing the usability of health IT systems, especially EHRs, and to develop performance-oriented user interface design guidelines for EHRs. NIST’s framework will be included in a report titled ‘‘NIST Usability Guidelines and Evaluation Framework for EHR Systems.’’ NIST may also examine relevant instructions, documentation, and EHR error messages. Manufacturers who want to participate must submit a request and an executed letter of understanding by March 15, 2012.
HHS recovers $4.1 billion in FY 2011 for fraud
Tuesday, HHS’s Office of Inspector General (OIG) announced that it recovered $4.1 billion in stolen or improper Medicare reimbursements—the highest annual amount recovered to date since program inception.
Note: HIPAA established a national Health Care Fraud and Abuse Control (HCFAC) Program, under joint direction of the Attorney General and the Secretary of HHS to coordinate federal, state, and local law enforcement to address health care fraud and abuse. ACA provided $350 million for HCFAC activities.
Provider prices influence regional variation in health care spending for the privately insured
Wednesday, the Center for Studying Health System Change released a study showing that variation in provider prices contributes to regional variation in health spending for the privately insured. Examining data of active and retired nonelderly autoworkers and dependents in 19 communities, the researchers found that “differences across communities in the prices paid to health care providers also explain a large share of regional spending variation. For physician office visits, prices paid by the autoworker plan are similar to Medicare prices and vary little across communities. For hospital services, the prices paid by the autoworker plan far exceed Medicare prices and vary widely across communities. The study findings suggest that “opportunities to control spending growth lie in restraining hospital prices and improving people’s health status, which will require purchasers to develop new strategies.” (Source: Chapin White, National Institute for Health Care Reform, “Health Status and Hospital Prices Key to Regional Variation in Private Health Care Spending,” February 2012.)
Note: per the study, 2009 per enrollee health spending varied widely across 19 communities with a large population of autoworkers, from $4,500 in Buffalo, NY to $9,000 in Lake County, IL. Autoworkers in high-spending communities receive about 50 percent more services than those in low-spending communities, but the higher volume appears to be contributed to greater health needs.
“The timing of the ICD-10 transition that is scheduled for Oct. 1, 2013, could not be worse as many physicians are currently spending significant time and resources implementing electronic health records into their practices…Physicians are also facing present and future financial penalties if they do not successfully participate in multiple Medicare programs underway, including the e-prescribing program, the EHR meaningful use program, and the Physicians Quality Reporting System (PQRS) program….In the wake of this onslaught of overlapping regulatory mandates and reporting requirements, HHS has an opportunity to ease the burdens on physician practices by halting the implementation of ICD-10 and calling on appropriate stakeholders, including physicians, hospitals, payers to assess an appropriate replacement for ICD-9 within a reasonable timeframe.”
— letter from Dr. James Madara, the AMA's executive vice president and CEO, to HHS Secretary Kathleen Sebelius, Thursday, February 3, 2012
“Being a good doctor is about more than scientific knowledge. It also requires an understanding of people. By balancing the MCAT exam’s focus on the natural sciences with a new section on the psychological, social, and biological foundations of behavior, the new exam will better prepare students to build strong knowledge of the socio-cultural and behavioral determinants of health.”
— Darrell Kirch, MD, AAMC President and CEO, Thursday, February 16 announcement of new MCAT test
“Patients (regardless of the type of record their physician has) see value in EHRs. When asked the extent to which people believe an EHR is or would be useful in accomplishing or improving upon seven key care elements, between 88 and 97 percent (depending on the particular care element) of EHR respondents and between 80 and 97 percent of paper respondents say EHRs would be useful. This represents a powerful seal of patient approval for EHR systems’ potential impact on major aspects of the health care process.”
— “Making IT Meaningful: How Consumers Value and Trust Health IT,” survey of 2,000 U.S., adults by Harris Interactive sponsored by National Partnership for Women and Families
- Global IT spending by industry, 2008: IT includes hardware, software, IT services, internal services, and telecommunications
- Financial services: $558.4 billion
- Manufacturing: $482.7 billion
- Communications: $368.3 billion
- Retail: $153.3 billion
- Utilities: $128.1 billion
- Transportation: $105.9 billion
- Health care: $88 billion
(Source: Gartner, Industry Market Strategies, “Forecast: Industry Market Strategies by Vertical Industry, Worldwide, 2006-2012, 1Q09 Update,” February 2009)
- Applications for health IT: 9,000 health applications available to consumers at cost of $3.21 each; 13,000 by summer 2013. (Source: MobihealthNews, July 2011)
- Health IT workforce demand: 35,000 health IT workers are needed by 2018. (Source: Bureau of Labor Statistics [BLS], 2008)
- ICD-9 to ICD-10 transition by October 1, 2013: diagnosis codes from 14,000 to 69,000 and procedure codes from 4,000 to 72,000. (Source: HHS)
- Federal health IT spending will increase from $4.5 billion in 2011 to $6.5 billion in 2016--compound annual growth rate of 7.5 percent. (Source: “Federal Health Information Technology Market, 2011-2016,” GovWin from Deltek, December 2011)
- Technology IPO trends: 271-14.5B (2005), 277-14.8 (2006), 271-19.9 (2007), 84-2.3 (2008), 90-10.1 (2009), 191-21.6 (2010), 123-13.8 (2011). (Source: Thomson Reuters)
National health reform: What now?
National health reform is here. The health reform bills (HR3590 and HR4872) are now law and will trigger sweeping changes and disruptions – some rather quickly and some over many years. The industry is asking, “What now?” At Deloitte, we continue to explore and debate the key questions facing the industry, and we look forward to helping our clients find and implement the right answers for their organizations. To learn more, visit www.deloitte.com/us/healthreform/whatnow today.
Subscribe to the Health Care Reform Memo
- Step 1, confirm your sector(s) of interest.
- Step 2, select the Health Care Reform Memo as one of your subscriptions.