Posts filed under ‘Patient Centered Medical Home’

The number of patient-centered medical homes recognized by the National Commission on quality Assurance is rising

The number of patient-centered medical homes is growing. They are being recognized by the National Commission on Quality Assurance and are just one part of the innovation of the American healthcare system.

Continue Reading March 10, 2015 at 10:57 AM Leave a comment


Do you know the difference between an “electronic medical record” (EMR) and an “electronic health record” (EHR)? There is a common misconception that these terms are interchangeable, and many people today could not tell you if there is a difference between the two terms, let alone what that difference is.

An EMR is essentially the equivalent of a paper chart for a patient that is filled out by providers within an individual healthcare delivery organization (e.g. hospitals, physician’s offices), and is a legal record owned by that organization. EMR computer software is sold by enterprise vendors to hospitals, clinics, and other care delivery sites.

An EHR is a subset of EMRs that contains patient information from different healthcare delivery organizations. These records are owned by the patient or stakeholder, and the information can be shared through an EHR network. Unlike EMRs, electronic health records are interactive and the patient can access and supplement the information contained in the file. EHRs connect different healthcare organizations and may contain more detailed information about a patient’s demographics, medications, medical history, etc.

So, in order to utilize EHRs and for them to be effective, EMR software must be adopted by healthcare delivery organizations. Based on an HIMSS Analytics report published in 2006, the majority of hospitals have begun to implement EMRs, but at that point were not beyond the earliest stages. Since then both EMR systems and EHRs have grown in utilization and popularity, considering the potential for the easy sharing of patient information between healthcare organizations. A 2011 presentation by HIMSS shows that in 2011 more hospitals are developing their ability to use EHRs.

Both EMRs and EHRs are clearly an area of high potential for the healthcare industry. As the systems are more widely adopted and developed further at various organizations, the added ease of access and quality of health information will ideally help care provider organizations provide better treatment for patients. There are potential worries related to privacy and security with this type of information being transmitted electronically, however that is an entirely different issue that I will leave to be discussed at another time.


Author: Jamie Notaro

Edited by: Ken Chiang


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March 21, 2012 at 11:02 AM 1 comment

HHA Workers get OT and Minimum Wage

I recently came across an interesting article regarding proposed regulations for home health workers. Sometimes, it is the little things that are not dramatic that can affect our clients’ plans.

As described in more detail in the article below, On Thursday December 11, the Obama administration proposed regulations to give the nation’s nearly two million home care workers minimum wage and overtime protections. Those workers have long been exempted from coverage.  Home healthcare aides are not protected under the Fair Labor Standards Act.  Therefore, their employers are not subject to minimum wage or overtime regulations.

NY Times Article

As home healthcare aides are a rapidly growing work force, raising their wages and providing for overtime could represent a significant increase in financial responsibility for their employers.  One result might be that home health agencies may be forced to cut hours for their workers.  Also, the agencies may not have the financial resources to hire additional aides. In a slowly recovering economy, this would be an unfortunate result for both home healthcare agencies and their workers.

Another result might be that fewer patients may receive home health services or patients may not receive all of the care they need.  Patients might be required to pay more for the home health services they do receive.  Another result might be that home health workers might not be able to make as much as they do now as overtime hours are cut.

            Requiring an increase in wages could slow the growth of the industry, despite the projected significant increase in the need for home healthcare over the next 15-20 years. Slowing the growth of the home healthcare industry could lead to a decelerating rate of growth in the demand for many home healthcare products. If the availability of home healthcare services is curtailed, might that lead to an increase in direct and indirect healthcare costs?  For example, limiting access to home healthcare could encourage the use of more costly providers or an increase in negative outcomes as patients go without the care they need.

Now, what are your thoughts? 

December 20, 2011 at 2:56 PM Leave a comment

Medicare Reductions — Real or Imaginary?

The Obama administration is expected to release a report today that indicates that healthcare reform will reduce Medicare spending by $575 billion over the next 10 years, starting with an $8 billion savings in 2011.  This could add 12 years of solvency to the program’s trust fund.

As with any partisan government report, we need to evaluate the accuracy of the numbers and the underlying assumptions.  Does it present a realistic and complete assessment?  Will the savings be used to solidify the Medicare trust fund, reduce premiums for our nation’s seniors or for another purpose?  The report indicates that Medicare spending cuts will help to lower seniors’ monthly premiums by nearly $200 annually by 2018.  For the moment, let’s assume and hope that the estimate is accurate and will be used to solidify the trust fund and reduce premiums for seniors.  These are all good outcomes and well worth pursuing.

One approach to generating the above savings is to implement price controls.  Medicare spending will keep increasing, only not as fast. Under the law, spending will rise by 5.3% a year on average over the next decade, compared to 6.8% without the cuts.  

The biggest portion of the Medicare cuts is from reductions in projected payment increases to hospitals and other providers over the next 10 years. The second biggest portion is reductions in payments to Medicare Advantage plans.  Cuts to Medicare Advantage plans start right away. The report says Medicare Advantage cuts account for $5.3 billion through 2011, more than 60% of the total estimated two-year savings of $7.8 billion.  An analysis by the Kaiser Family Foundation earlier in 2010 suggests that reductions in payments to Medicare Advantage would amount to $130 billion by 2019.  The reason for these reductions, per some analysts, is that the Medicare Advantage plans are overpaid when compared to the cost of care in traditional Medicare.  

As we’ve written before, price controls produce unintended effects.  How will hospitals and physicians react to a reduction in spending?  Will they sacrifice the quality of care?  Will they provide fewer services?  Will seniors realize $200 reductions in premiums but a greater reduction in services and quality?  Is that constructive? 

The insurance industry says the cuts will mean steep premium increases for millions of seniors in the plans. That could trigger an exodus, with seniors returning to traditional Medicare.  Is this the effect the government intended?

Unintended effects also is one of the reasons that a national health plan, so seductively attractive in many ways, was not implemented.  Monopolistic, or near monopolistic control, can yield arbitrary strategies and tactics that are not beneficial to Medicare beneficiaries and providers.

More effective than using the stick (ie, payment reductions) to force providers to become more efficient is to first provide incentives to drive quality and efficiency.  For example, a program to reduce hospital readmissions due to preventable infections and other problems is estimated to save $8 billion over 10 years. And projects involving the patient-centered medical home (ie, a new, team-based approach to providing medical care for seniors) is estimated to save $5 billion over the same period, by keeping patients with chronic health problems healthier and avoiding hospitalization.

The incentives in place in our healthcare delivery system often discourage cost-effective, high quality care.  Instead, these programs encourage more cost-effective care by removing wasteful care from the system.  These programs encourage higher-quality care.   

Revising incentives, gaining consensus and support and implementing new programs takes time and investment.  While better in the long run, the issues facing Medicare and the healthcare system overall are pressing.  Therefore, the carrot (ie, programs that drive higher-quality, lower cost care) cannot be the only approach that is used.  The stick also must be used to gain short-term improvements.  Unintended effects will need to be managed. 

My suggestion is that the proportion of stick to carrot needs to be constructive.  The current approach relies heavily on price controls (ie, the stick) and experiments to a limited degree with quality-improvement programs that drive lower cost.  The ratio needs to be changed to a more even balance between the two approaches.  That will yield longer-term benefits and reduce the impact of unintended effects.

August 2, 2010 at 11:31 AM Leave a comment

Electronic Health Records — A Key to Progress

Electronic health records are a key to the advancement of the healthcare system.  Having medical records that follow patients across the continuum of care will enhance outcomes as all providers share a complete set of data.  Also, fully shared data will help reduce costs by eliminating redundant diagnostic evaluations and unnecessary prescribing of medications.  Electronic health records will facilitate the development of new models of care, such as the patient centered medical home.

However, only 20 percent of doctors and 10 percent of hospitals use even basic electronic health records according to Kathleen Sebelius, secretary of health and human services.

As reported by the New York Times yesterday (, the federal government issued new rules Tuesday that will reward doctors and hospitals for the “meaningful use” of electronic health records, a top goal of President Obama.  The rules significantly scale back proposed requirements that the health care industry had denounced as unrealistic.

The main criticism of the rules proposed by the Obama administration in January was that they took an “all or nothing” approach. Doctors could not have received any federal bonus payments unless they met 25 criteria, or objectives, and hospitals would have been required to meet 23.

Standards in the new rules are less demanding and more flexible. Doctors will have to meet 15 specific requirements, plus 5 chosen from a list of 10 objectives. Hospitals will have to meet 14 requirements, plus 5 chosen from a menu of 10 goals.

Doctors, for example, will have to use electronic systems to record patients’ demographic data (sex, race, date of birth); their height, weight and blood pressure; their medications; and their smoking behavior.

To meet the new standards, doctors will have to transmit 40 percent of prescriptions electronically. Under the proposal, 75 percent of prescriptions had to be sent electronically.

The Department of Health and Human Services said doctors and hospitals could receive as much as $27 billion over the next 10 years to buy equipment to computerize patients’ medical records. A doctor can receive up to $44,000 under Medicare and $63,750 under Medicaid, while a hospital can receive millions of dollars, depending on its size.

Sometimes, small steps are better than no steps at all.  Moving physicians and other providers to communicate with each other at all sometimes seems a big enough challenge to patients.  Anything that helps a patient not have to repeat the same story to each physician is a significant accomplishment.  Therefore, not only will the system reduce costs and improve the quality of care, patients will have fewer headaches just from accessing the system.

A few years ago, I was speaking with a leading researcher at the Commonwealth Fund.  He suggested that it might take 20 years to implement a fully-functioning electronic health record.  With the current administration’s financial support and guidelines for the initiative, we might achieve that goal in that timeframe.  However, a great deal can be accomplished through the “baby steps” proposed under the relaxed guidelines. 

For example, entering demographics and utilizing e-prescribing allows basic checks of appropriateness of the prescription.  It also reduces the opportunity for over-prescribing or duplicate prescribing of pain killers and other potentially abused medications.

The final rules do not guarantee that doctors and hospitals can electronically exchange clinical information on patients. The rules do require health care providers to work toward that goal, widely seen as a way to improve the coordination of care and avoid the duplication of tests. 

Of course, this is where the rubber meets the road.  Enhancing longitudinal and intra-practice communication is a significant step forward.  Using electronic health records to compare prescribing and treatment patterns to generally-accepted practice standards and algorithms will help improve the quality of care.  But a significantly increased return on investment will occur when the systems can communicate throughout the continuum of care.  The next step is for the healthcare and information technology communities to set data layout standards that will make this possible. 

Co-operation?!  What a novel concept!

July 14, 2010 at 8:41 AM Leave a comment

Price controls — Do they ever work?

A proposed rule from CMS would reduce physicians’ Medicare payments by 6.1% starting Jan. 1, 2011. That is in addition to a projected 23.5% cut scheduled to take effect Dec. 1, 2010 unless Congress changes it.

The sustainable growth-rate formula (SGR) formula has called for payment cuts to doctors for years, with Congress stepping in intermittently to stop the reductions.  The latest intervention came on June 24, 2010 when the House replaced a 21.2% Medicare physician pay cut with a 2.2% raise through November.  Unless, Congress acts by the end of November, the 2.2% raise will be eliminated and the 21.2% cut will be implemented, resulting in a 23.5% reduction in current reimbursement rates.

Add in the potential 6.1% reduction scheduled for January 2011 and physicians face the potential of a nearly 30% SGR cut.

Do we need academic studies and journalistic investigations to tell us how doctors will respond?  Of course not.  We all can guess what will happen.  However, the studies and investigations are available.  As reported in the New York Times and elsewhere, physicians will reduce the number of Medicare patients they see.  As reported in a new study in Health Affairs, doctors will respond by simply treating more patients or ordering more tests and procedures for existing patients to make up for the lost income.  Cost cuts for Medicare will not yield a commensurate decrease in Medicare spending.  Also, there will be a growth in spending for commercial and Medicaid patients.  An onward and upward goes the healthcare cost spiral.

The solution is for cost cutting to be part of a broader strategy for healthcare cost management.  Only a partial list of strategies include:

  • Incentives that encourage patients to better manage their own health (eg, reductions in healthcare premiums for weight loss; value-based insurance design)
  • Financial incentives for physicians based on patient outcomes
  • Better management of the healthcare services and resources available to patients (eg, patient centered medical homes)
  • Evidence-based increases or reductions in reimbursement for select healthcare services based on the value they deliver in terms of outcomes
  • Reductions in administrative requirements
  • Better sharing of healthcare information between providers
  • Development of cost-effective treatment algorithms and incentives for physicians to comply with them

Taking cost out of the healthcare system will affect provider income.  However, the reduction in income does not need to translate dollar-for-dollar in a reduction in profitability.  More efficiently using our healthcare system will yield a reduction in the infrastructure required to deliver healthcare.  For example, a reduction in the administrative burden for a doctor or a hospital can be accompanied by a reduction in staff.   Therefore, reductions in services are more palatable than simple cuts in reimbursement.

A thoughtful and coordinated strategy for reducing the use of our healthcare system that improves outcomes is the critical next step.  Hodge-podge cost cuts by government and private payers only leads to more ill effects.  As illustrated above, such attempts actually lead to increases in reimbursement.  This is where the Federal administration needs to focus its efforts and provide leadership. 

Many of us look today at China and wonder about the wisdom of state capitalismUnder this system, authoritarian governments use markets “to create wealth that can be directed as political officials see fit.” The ultimate motive, he continues, “is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival).” Under state capitalism, market enterprises exist to earn money to finance the ruling class. (Credits to  “The End of the Free Market” by Ian Bremmer.)  In the United States’ healthcare industry, democratic capitalism has led to chaos. 

In 2009 and 2010, we saw how the country reacts to a state takeover of the healthcare industry.  I am not arguing for a complete takeover.  However, a step in that direction where the administration works with healthcare industry to develop a coordinated strategy seems wise and appropriate.  Once the plan is developed, we can leave it to the free markets to implement it.  Without leadership, chaos and cost rises that significantly hinder the health of business, large and small, will continue.

June 28, 2010 at 2:26 PM Leave a comment

The Big Bad Drug Industry?

A recent study by the Kaiser Family Foundation found that spending in the US for prescription drugs was $234.1 billion in 2008, nearly 6 times the $40.3 billion spent in 1990. Although prescription drug spending has been a relatively small proportion of national health care spending (10% in 2008, compared to 31% for hospitals and 21% for physician services), it has been one of the fastest growing components, until the early 2000’s growing at double-digit rates compared to single-digit rates for hospital and physician services.  

Since 2000, the rate of increase in drug spending has declined each year except for 2006, which was the year Medicare Part D was implemented. By 2008, the annual rate of increase in prescription spending was 3%, compared to 5% for hospital care and 5% for physician services. From 1998 to 2008, prescription drugs contributed 13% of the total growth in national health expenditures, compared to 30% for hospital care and 21% for physician and clinical services.  


Annual prescription spending growth slowed from 1999 (18%) to 2005 (6%).  The key reasons for this slowing of prescription drug spending are: 

  • Increased use of generic drugs
  • Increase in tiered copayment benefit plans
  • Changes in the types of drugs used
  • A decrease in the number of new drugs introduced.
This profile raises the question as to why the drug industry has been a major focus of the healthcare reform effort.  Sure, some drugs cost more than $100,000 per dose.  That is significant, even for people with insurance coverage, and not easily understood by many consumers and healthcare professionals.  But given the limited portion of healthcare costs due to drugs, the significant rate of introduction of generic drugs, the lack of a significant drug pipeline outside of oncology and other, select disease states, there seems to be limited room for better managing these costs.
Instead, the lack of a significant pipeline outside of oncology therapies should be a major concern.  Pharmaceuticals offer the potential to improve outcomes while offsetting hospital and other healthcare costs.  The United States should support research efforts into new therapies while encouraging appropriate choice of drug therapy and compliance with indicated therapy regimens.  Such concepts as the patient-centered medical home and value-based insurance design should make inroads.  Appropriate provider and patient education will encourage even better therapy choice and enhanced compliance.


Let’s focus our energies in areas where cost savings and improved outcomes can be gained as there is significant room for improvement in the United States.  Let’s not excessively beat up those who are seeking to improve healthcare outcomes in a cost-effective way.


June 9, 2010 at 2:17 PM Leave a comment

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