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Tag Archives: Policy

Healthcare Update — 01-23-2012

See more medical news from around the web over at the Satellite Edition of this week’s Update at ER Stories. The story of “Dr. Douchebag” and why morale is declining in many of this country’s emergency departments. Even if you say “thank you, sir” for the abuse, your job may still be threatened because of bad Press Ganey scores. More than 80% of medical mistakes go unreported by hospitals. Let’s just get this out of the way: Doctors kill every single patient that they treat and plaintiff attorneys should be paid even more money to sue our way to better health care. That should do it. Indiana woman awarded $1.5 million after surgeon did not operate on abdomen soon enough. Two days after initial presentation, she required emergency surgery for ischemic bowel requiring that a large portion of her intestines be removed. Sorry, Grandma, I know that your bone cancer is causing you excruciating pain, but you can’t have any more pain medication. As Florida cracks down on doctors who treat chronic pain patients, the patients are having more difficulty getting their medications. Where do the patients end up? In the emergency departments. When pill abusing patients go to the emergency department and don’t get their medications, some become abusive and violent. Now some Florida hospitals are implementing a “chronic pain management plan” which requires doctors to “help educate patients about the dangers of abusing prescription drugs and addiction.” Got that, Granny? You have bone cancer and you have six months to live, but abusing oxycontin is dangerous and can kill you. As part of the “plan,” emergency physicians then will “refer the patient to a primary care physician” – who has already been “cracked down upon” and who won’t prescribe the pain medications, either. End result? In an attempt to curb abuse by criminalizing the prescription of pain medications, Florida is now affecting the ability of patients who are legitimately in pain to receive necessary treatment. Cancer pain patients in Florida now more likely to get bounced around the system and die in pain. And people blame the physicians instead of the legislators. Why let a little thing like a gangrenous appendix get between you and your wedding? Ceremony held in hospital. Both bride and groom wear “gowns.” New York jury awards 18 year old patient $3 million for delay in c-section at birth that allegedly caused patient’s cerebral palsy. Patients gone wild in Pennsylvania. Woman gives medical staff hard time in ED, pulls out IV, threatens to infect everyone around her with HIV, kicks a security guard in the cha-chas when trying to escape, then is wheeled out of the hospital by police kicking and screaming in a wheelchair. Initially charged with three felonies, but those charges were dropped by persecutors er, um prosecutors. Of course, if the security guard was an off duty police officer, the patient would be doing 20 to life in Leavenworth. Patients gone wild then … police gone wild? Patient becomes combative in emergency department. Police called, then allegedly “strike the patient, place him in a headlock, pull and twist his head and forced handcuffs on him with force and violence.” Another officer allegedly “pushed the handcuffed man over a metal chair arm with the force of his weight pressing upon him.” The officers could face jail time and fines if found guilty. Patients gone wild — Twilight Edition. Toledo woman allegedly tries to steal baby from hospital. When ED nurse approaches her, the woman turns around and bites her. Then she hisses, turns into a bat, and flies away. The Medical Marijuana ...

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Too Many CT Scans … or Not Enough?

Scary findings. Patients using Coumadin who have any head injury need repeat CT scans. The study looked at 116 patients who were taking Coumadin and who had any head injury with a GCS of 14 or 15 – regardless of loss of consciousness (patients with lower GCS were presumably at higher risk of intracranial bleeding). CT scans were performed on all patients. Of those initial 116, nineteen patients (16%) had bleeding on their initial exam. Of the remaining 97 patients with normal initial CT scans, ten refused to be in the study. Repeat CT scans were performed on the remaining 87 patients 24 hours after the first normal CT scan and showed 5 cases of new hemorrhage. Three of those patients required hospitalization and one delayed bleeding patient required brain surgery. Even after a normal CT scan 24 hours later … two additional patients still developed symptomatic subdural hematomas — one patient 2 days later, one patient 8 days later. Both of those patients had INRs greater than 3.0. The study recommends admitting patients overnight and repeating CT scans in 24 hours. Original study here (.pdf). While admission and repeat CT scan for minor head trauma hasn’t become the standard of care in the United States, this study raises questions about the optimal care of minor head injuries in patients taking blood thinners. Also at issue is the Medicare policy not to pay for “normal” CT scans of the head in atraumatic headaches. Will this policy spill over to deny elderly nursing home patients from receiving CT scans when they can’t remember whether they have hit their heads?

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Certificates of Medical Necessity

  Not too long ago I got a letter labeled “URGENT” in my mailbox at work. The letter was from Walgreens regarding a patient I had seen several weeks earlier. I cut and pasted parts of the letter to make it fit on one page above. As the prescribing physician, in order for our government to pay for the prescription I wrote for the patient … several weeks ago … I had to sign a statement stating the following: “I, the undersigned, certify that the above prescribed supplies/equipment are medically necessary for this patient’s well being. In my opinion, the supplies are both reasonable and necessary to the accepted standards of medical practice in the treatment of this patient’s condition and are not prescribed as convenience supplies. By signing this form, I am confirming that the above information is accurate.” Seriously? To get reimbursement for a medication on the $4 list, the government is forcing health care providers to take the following steps: A pharmacist has to receive the denial from Medicare, look at the medication, enter all the information into the CMN and generate a letter to me. The pharmacy must then spend 44 cents to mail the letter to me Once I receive the letter, I don’t remember the patient, so I am then forced to waste time looking up the patient’s chart, reading through it so I could find the diagnosis and make sure that the flipping $4 albuterol prescription wasn’t for the patient’s “convenience.” The pharmacy then spends another 44 cents for the self addressed postage paid envelope. Once the pharmacist receives the certificate saying that the patient really does need his albuterol solution, he then has to spend more time going back on the computer, matching the signed statement with the visit and then forwarding the claim onto the government for medication that has already been dispensed. Then the pharmacy waits months and hopes that it gets back $3 in reimbursement for a $4 medication. In essence, health care providers waste 50 times as much value in time getting paid for something after the fact than the item is worth. And the government knows it. It is just hoping that one of the providers won’t do all the paperwork so that someone else gets stuck paying for the medication – other than the government. No paperwork, no payment. Is this what medicine has come to? Harassing providers so much with pre-authorizations and post-authorizations because they don’t have enough to do? What other ways can we concoct to steal services and supplies from medical providers? Then I thought that since the government uses these authorizations so much, that they must be a good idea. Before I send in my next tax payment, I’m thinking about sending in a similar authorization to the IRS. “I, the undersigned, certify that the above tax payments are necessary for this country’s well being. In my opinion, the government purchases made with this money are reasonable and necessary to the accepted standards of accounting practices and are not spent on wasteful or potentially wasteful projects or items. By signing this form, I am confirming that the above information is accurate.” Any accountants out there? Would this work?

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Why Bundling Payments Won't Reduce Costs — Part 3

If you haven’t read parts 1 and 2 of this manifesto, please do so here and here before reading further. How will bundled payments affect the incentives for each of the players in the medical market? For patients, a change to bundled payments will probably have little effect upon monetary issues or fears. Demand for medical care will increase. With millions of additional patients being added to Medicaid roles, and with government “paying” the costs, there will still be little disincentive for patients to seek comprehensive care. In addition, patients who are forced to purchase insurance through health care reform will want to get something for their money. Bundled services will obviously benefit the insurers. Otherwise there would be no incentive to move to such a model. For insurers, bundled payments will increase profits. Much of the uncertainty involving payments for medical care disappears with bundled payments. If a patient with a heart attack develops a complication requiring prolonged hospitalization, in the current system the insurers bear the costs of treating that complication. Switch to a bundled payment model and the providers bear the risk of medical complications or outlier patients. Whether a patient is in a hospital for six hours or six months, the payment to the hospital for one diagnosis will be the same. The theory is that the threat of paying for complications will “encourage” hospitals to take steps to avoid those complications. In other words, a threat of financial liability will improve the quality of care. Kind of like suing our way to better health care … and we all know how well that has worked. For now, the point is that bundled payments increase profits for insurers by decreasing uncertainty in the payments that must be made to providers. As providers decrease costs, then the insurers will gradually decrease the bundled payments while gradually increasing the premiums that every person in the United States will be required to pay under health care reform. Profits go up. Demand for insurance will go up under health care reform because there is a mandate that everyone purchase insurance. Insurers will encourage people to buy into their plans. More subscribers plus relatively fixed costs equals more profits. The financial risk that insurers fear in the current medical payment model is largely erased by a bundled payment model. While insurers may be forced to accept all patients – even those with pre-existing conditions – bundled payments diffuse the risk that the insurer must accept. Even though some patients may be hospitalized more often than others, the insurers know that they will only have to pay a fixed cost for the hospitalization. There will also be a decrease in the legal risks to insurance companies with a bundled payment model. Insurers will be less liable for refusing care. They pay the providers one fee and the providers are then forced to decide what care is and is not “necessary.” Also look for our government to create additional legal protections for insurers as health care reform becomes implemented over the next few years. Probably the largest effect of bundled payments will be felt by providers of medical care. For providers, bundled payments will create an incentive to provide less care. Currently, extremely ill patients create profit through utilization of costly medical services. More services = more payments. When providers are paid one price for a given diagnosis, regardless of the severity of the illness, then the incentive will be to accept a large bundled payment and provide the least expensive medical care possible. This will happen in several ways. First, providers will ...

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Why Bundling Payments Won't Reduce Costs – Part 2

If you haven’t read Part 1 of this post, please do so. In that part, I try to explain the main drivers of cost in our health care system. Now that everyone has a basic grasp of the drivers of cost in our health care system, I want to try to show how the proposed changes to the system will have little effect on lowering cost in the system. Through the Affordable Care Act, government is now moving towards “bundled payments” as a means to reduce health care costs. In the current system, providers receive separate reimbursements for each of the multiple services a person may receive during a specific illness or injury. For example, a patient with chest pain may have an EKG. The hospital gets paid for doing the EKG. The cardiologist gets paid for interpreting the EKG. The emergency physician gets paid for acting on the results of the EKG. If the patient is later admitted, the hospital gets paid for the use of the hospital bed and gets paid separately for the medications the patient receives or for the machines that the patient uses. Doctors get paid separately for visiting the patient in the hospital. Bundling would add up all the payments for a given medical event and lump them into one. Instead of the government making separate payments to the hospitals, physicians, and other providers, the government pays the hospital one fee for everything and lets the hospital divide payments. Bundled payments are touted as a means to improve quality and reduce mistakes. CMS considers Bundled Payments for Care Improvement. Ezekiel Emanuel in the New York Times “Opinionator” blog says that, as a means to “save real money and improve care,” we should embrace bundling and eliminate fee-for-service. A New York Times editorial also noted how “most [unnamed] experts agree” that the solution to spiraling fee-for-service costs is to pay providers “fixed sums” to manage a patient’s care and then decide which services are truly necessary. Mayo Clinic President Denis Cortese was quoted as saying that bundled payment plans prompt hospitals to deliver the best possible care: “Once you have a bundled payment, the delivery system can really do anything they want because the money’s on the table,” Cortese said. “But the incentive is to get it right the first time. If there’s a failure, you have to redo it on your nickel.” A 2009 USA Today article noted that not only is the government advocating bundling of services, but it is also paying patients to go to hospitals that accept bundled payments. One 79 year old patient on a fixed income said that the government bribe, er, um “incentive payment” helped to “seal the deal” for her because the $271 check she received from the government for going to the hospital would come in handy for “helping get my car fixed.” I think that it is good that the federal government acknowledges it is appropriate to provide “incentive payments” to encourage patients to go to certain hospitals. Wait. Isn’t that illegal? Oh well. You call it a bribe, they call it a tax refund. Have to look at that in another post some day. Before getting into medical payment models, I want people to think about how bundling would affect us in the real world if we implemented it outside of health care. Imagine that you were going to receive a bundled payment of $100 for ten pieces of winter clothing. What would you do? I know that I would go to my closet and find the 10 cheapest pieces of clothing there. Some of ...

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Why Bundling Payments Won't Reduce Costs – Part 1

Probably one of the largest pending changes in health care is payment reform. Right now, payment for medical services is essentially a fee for service model. Patients (or their insurers) are generally charged for the services utilized. If a patient goes to hospital for chest pain, and a physician evaluates the patient, either the patient or the patient’s insurer pays the physician for those services. If the physician orders an EKG and lab tests, either the patient or the patient’s insurer pays the hospital for the EKG and lab tests. If the patient is admitted to the hospital, the hospital gets paid a given fee for the admission. It goes on and on. The feds want to reduce costs by changing the payment model for medical care to a “bundled” approach. I don’t think it’s going to work. Bundling won’t change the behaviors necessary to save money. This will be a two part post on why. This part will discuss incentives and how they drive utilization of health care. Next part will apply those concepts to bundled health care. Why is our current system going bankrupt? It is all about incentives. There are three main concepts driving health care costs: profit, demand for services, and fear. Before we can see the effects of a policy change on health care costs, we need to understand how these concepts drive the actions of the major players in the health care market. For Providers, the incentive is currently to provide more services. Demand for services is created by illness. When ill, patients often demand as many medical services as the providers are willing to provide. Patients may seek alternative providers if their demands are not met. There is little incentive to provide less care with increased demand. Profit is created by providing services. In a fee for service environment, the more services that are provided, the more that the providers are paid. If patients want the testing or services, more often than not, they get the testing or services. Unhappy patients tend not to come back. No patients = no income. The most pervasive fear for providers is fear of liability – either legal or professional. This fear is often mitigated by providing more services. Increased testing decreases the fear of liability because if there is a bad patient outcome, the provider can point to all the testing and argue that they should not be liable because “we did everything we could.” It is uncommon for a provider to suffer adverse consequences for performing too much testing. Fear of liability may lead to extremely expensive and questionably beneficial medical care. Hospitals also fear regulatory sanctions. It is comical to watch hospital administrators scurry about when there is a JCAHO survey. Poor performance on a JCAHO survey threatens a hospital’s Medicare reimbursement. For Insurers, there is an incentive to increase customers who pay into the system, but who do not take money out of the system. Demand for services is still created by illness, but as demand for services goes up, insurer profits go down (or, in the case of government insurance, debts increase). Insurers profit by having healthy and wealthy subscribers. Healthy subscribers pay into the system, but don’t take as much out of the system. Insurers can increase profits by raising insurance premiums, but must be careful when setting prices. If premiums are raised too high, healthy insurers may drop their coverage because they perceive too much of a disconnect between the premiums that they are  paying and the services that they are utilizing. In that case, the profits from increased premiums ...

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