Potential pitfalls of healthcare reform

In concert with our ongoing series regarding healthcare reform, I saw the article below and thought you might be interested.

Top Democrat Cites 10 Healthcare Reform Pitfalls

By Paul Bedard

Posted September 28, 2010 03:41 PM ET

One of President Obama’s architects of the historic healthcare reform, Tom Daschle, is warning that unless the still evolving “Obamacare” is instituted perfectly, Democrats could pay in the next three elections. “A lot of things have to go right for these changes to work,” Daschle writes in a new book out October 12 about the two-year healthcare battle.

In his insider’s account, Getting It Done: How Obama and Congress Finally Broke the Stalemate to Make Way for Health Care Reform, Daschle cites at least 10 huge hurdles in Obamacare that can trip up Democratic political hopes in 2010, 2014 and 2016, especially if the public continues to sour on the reform which the GOP has pledged to sideline if elected into House and Senate majorities. The potential for problems fall in three categories: higher premiums, a reduction in coverage and much higher taxes.

Daschle’s top 10 political pitfalls:

1. Higher premiums. While he says that “there is little risk” that everyone’s health insurance premium will go up, “it is unrealistic to expect that none of us will see any increases.”

2. Preexisting condition gap. 2010 will see that children with preexisting conditions can’t be rejected by health insurance companies, but adults won’t get that benefit for another four years.

3. Shrinking Medicare payments to doctors. 2011 will see payments to Medicare Advantage plans frozen and payments to providers will increase at a slower rate as it becomes official policy to expect healthcare providers to become more efficient. Daschle says that Medicare Advantage users will get fewer “extras” and he warns that the Feds will have to keep an eye out for doctors who stop seeing seniors as a result.

4. Increased senior premiums. In 2011 more high-income seniors will start paying higher premiums. They will also get less of a subsidy for prescription drug coverage.

5. Cuts in Medicare Advantage. In 2012, Obama’s reelection campaign year, Daschle says that “there will be some significant healthcare events this year that are not politically safe.” Such as: Payments to Medicare Advantage plans will now be cut, not just frozen.

6. Mediare-cutting panel. Also in 2012, Obama will have to appoint a board charged with “tightening Medicare spending even more.” Daschle concedes that “in an election year, the appointment of the board is sure to lead to a new round of overheated charges about what the board might to do seniors’ care.”

7. Medicare tax boost. Come 2013, Daschle reports that individuals earning more than $200,000 a year and couples earning $250,000 a year or more will see a boost in Medicare taxes, ironically called the “HI tax,” short for hospital insurance tax. That tax will go from 1.45 percent to 2.35 percent In addition, he notes, there will be a brand new 3.8 percent tax for these folks on unearned income from investments.

8. Change in healthcare deduction. Also in 2013, the healthcare spending deduction will change. Where you can now deduct anything spent over 7.5 percent of your income, the new base will be 10 percent of annual income. Seniors get an extension on the 7.5 percent rate until 2017.

9. Employer tax. 2014 sees many of the major changes in healthcare reform. One biggie with political implications: If employers have more than 50 full-time workers and do not provide coverage, they will be fined $2,000 for each employee. What’s more, if they provide coverage, but it’s so expensive workers seek the outside option provided in Obamacare, the employers will have to pay $2,000 each or $3,000 for those that get a tax credit, whichever penalty is less.

10. Individual penalty. In 2016, with most of the reforms, in place, individuals who don’t have health insurance will be fined $695 a year, or 2.5 percent of annual income, whichever is greater.

[See photos of healthcare reform protests.]

Daschle, whose tax troubles forced him to withdraw his nomination to be Obama’s first secretary of Health and Human Services, urged Republicans and the public to give Obamacare a chance, just like others in the past gave to Social Security, Medicare, and the civil rights movement.

“The new healthcare law deserves the same chance. There is so much potential for good in every aspect of the law, and people will begin to see the good once the biggest reforms take effect. But this will only happen if we give the law enough time to show its full potential,” he writes.

See a slide show of 10 winners in the healthcare reform debate.  http://politics.usnews.com/news/washington-whispers/slideshows/10-winners-in-the-healthcare-debate/2

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Healthcare reform and the quality of care

One of the most significant aspects of healthcare reform is its emphasis on improving the quality of care.  Many aspects of the law seek to improve the quality of care as a way of reducing cost.  The healthier we all are, the less we’ll spend on doctors and tests.  Now, if only the law could help every American lose 10 pounds!!  That would be the best ways to reduce the cost of care.

We cannot really discuss the quality of care until we know how to measure it.  There needs to be a consensus as to what constitutes good care.  The simpler these measures are to understand, the more providers and patients can focus on them and achieve success.

We also need a system for measuring the quality of care.  Quality measures also need to be simple so that they can be implemented and data collected cost effectively.  Of course, to do that, we need widespread use of electronic health records.

The U.S. government announced in February of 2009, the American Recovery and Reinvestment Act (ARRA). The ARRA act included $19 billion under the portion of its HITECH Act to promote the adoption of Electronic Health Record (EHR) technology in healthcare. Starting in 2011, medical providers can receive up to $44,000 or more by demonstrating what has termed as “meaningful use” of certified EHR technology to be eligible for government funds. 

Back to healthcare reform — the Patient Protection and Affordable Care Act (PPACA).  To drive improved quality of care, PPACA requires the identification and publication of a core set of quality measures for Medicare and Medicaid adults.   PPACA also requires Medicaid to establish a quality measurement program. 

PPACA requires the integration of reporting on quality measures with reporting for the meaningful use of electronic health records.  By focusing on the effective use of EHRs with certain capabilities, the HITECH Act makes clear that the adoption of records is not a goal in itself:   it is the use of EHRs to achieve health and efficiency goals that matters.  HITECH’s incentives and assistance programs seek to improve the health of Americans and the performance of their health care system through “meaningful use” of EHRs to achieve five health care goals:

• To improve the quality, safety, and efficiency of care while reducing disparities;
• To engage patients and families in their care;
• To promote public and population health;
• To improve care coordination; and
• To promote the privacy and security of EHRs.

In the context of the EHR incentive programs, “demonstrating meaningful use” is the key to receiving the incentive payments. It means meeting a series of objectives that make use of EHRs’ potential and related to the improvement of quality, efficiency and patient safety in the healthcare system through the use of certified EHR technology.

Stage 1, which begins in 2011, the criteria for meaningful use focus on electronically capturing health information in a coded format, using that information to track key clinical conditions, communicating that information for care coordination purposes, and initiating the reporting of clinical quality measures and public health information.

The final rule reflects significant changes to the proposed rule while retaining the intent and structure of the incentive programs.  Key provisions in the final rule include:  

• For Stage 1, CMS’s proposed rule called on physicians and other eligible professionals to meet 25 objectives (23 for hospitals) in reporting their meaningful use of EHRs. The final rule divides the objectives into a “core” group of required objectives and a “menu set” of procedures from which providers can choose.  This “two track” approach ensures that the most basic elements of meaningful EHR use will be met by all providers qualifying for incentive payments, while at the same time allowing latitude in other areas to reflect providers’ varying needs and their individual paths to full EHR use.
•  In line with recommendations of the Health Information Technology Policy Committee, the final rule includes the objective of providing patient-specific educational resources for both EPs and eligible hospitals and the objective of recording advance directives for eligible hospitals.

Healthcare reform will fund the implementation of medication management services by pharmacists.  Medication therapy management (MTM) is a partnership of the pharmacist, the patient or their caregiver and other health professionals that promotes the safe and effective use of medications and helps patients achieve the targeted outcomes from medication therapy.  MTM includes the analytical, consultative, educational and monitoring services provided by pharmacists to help consumers get the best results from medications through enhancing consumer understanding of medication therapy, increasing consumer adherence to medications, controlling costs, and preventing drug complications, conflicts, and interactions.

Healthcare reform requires the public reporting of physician performance on quality and patient-experience measures through a website that will be called Physician Compare.  What begins with the implementation of EHR and the development of quality measures that are evaluated through data supplied by the EHR ends in public reporting of the results.  This will enable patients and hospitals to work with the physicians that provide the highest quality of care.  While high-quality of care might cost more up front, the (hoped for) decrease in hospital readmissions, adverse events and co-morbidities will (hopefully) reduce costs in the long term.

Implications for Healthcare Manufacturers

The emphasis on quality measures will more and better opportunities for healthcare manufacturers to demonstrate how their products and applications drive improvements in the quality of care.  Such demonstrates need to be based on clinical data that demonstrate how the product or application performs compared to the quality measures that Medicaid and Medicare adopt.  Medical groups and hospitals will look to healthcare manufacturers and government agencies to provide data that cut across multiple settings of care.  However, the growing availability of sophisticated EHR systems could enable medical groups and hospitals to develop data that are specific to their own patient demographics and mix.  It is in the best interest of healthcare manufacturers and government agencies to help coordinate these efforts.  Healthcare manufacturers will be encouraged to develop data for patient niches so that they are ready to address data that medical groups and hospitals gather that might demonstrate different results than those generated by the healthcare manufacturers.

The government and healthcare community (ie, providers and payers) will develop the quality measures.  The medical groups, hospitals and other payers will implement the EHR systems required to collect data relevant to those measures.  There is an opportunity for healthcare manufacturers to play a role in connecting the two endpoints.  That is, healthcare manufacturers can develop algorithms for analyzing the data so that the results comply in an appropriate way with the outcomes measures that Medicare and Medicaid establish.

Today, retail pharmacies are a secondary or tertiary contact for those drug companies and medical device suppliers that distribute product through this channel.  The growing importance of MTM programs will increase the importance of retail pharmacies for select disease states (eg, hypertension, dyslipidemia, diabetes).   Healthcare manufacturers will need to develop programs at the corporate levels of the retail pharmacy companies as well as the neighborhood pharmacies to educate the pharmacists and encourage and support the appropriate implementation of the MTM programs.  More effective MTM programs will encourage therapy compliance and higher quality care.

As the above evaluation demonstrates, the ARRA and PPACA will provide numerous new avenues for healthcare manufacturers to work with physicians, hospitals and other providers to drive an improved level of care.  The time is now to plan for these initiatives and start their development.

PCMH Solutions

Last week, I wrote about some of the challenges facing PCMH implementation. These include:
– Universal implementation of EHR
– Integrating EHR data to facilitate sharing across all healthcare delivery sites
– Compensation systems that encourage cooperation among providers and drive improvements in outcomes while reducing the cost of care
– Shortage of primary care physicians, which will be exacerbated by the reduced patient loads primary care physicians can carry in a PCMH system
– Need for certifying PCMH-qualified primary care practices as a first step towards certifying PCMH-qualifed care teams (eg, primary care physicians, specialists, hospitals. diagnostic labs)

As demonstrated by the success of the PCMH concept at the Group Health Cooperative (Washington state) and other pilot studies, addressing these challenges can deliver significant cost savings and, hopefully, improvements in the quality of care. While the pilot studies have demonstrated these goals can be achieved in the short-term. there is a belief that even more can be accomplished in the long-term. Also, there is a belief that PCMH can achieve beneficial results outside of the controlled setting of pilot studies. Therefore, it is worthwhile to search for solutions to the challenges facing PCMH.

The solutions should recognize limitations of our healthcare delivery system that might not exist in controlled settings.

– Most primary care physicians have relationships with multiple insurers. Each insurer can offer different incentives and requirements. This could cause confusion for primary care physicians as well as an increased cost associated with learning and complying with each set of requirements.

– Specialist physicians have relationships with many primary care physicians and insurers. Specialists face similar challenges as described above for primary care physicians and, perhaps, even more so due to being another level along the healthcare delivery chain than the primary care physicians,

– Primary care practices will become more complex than they are today with the addition of physician’s assistants and the need for closer relationships with other allied health providers, such as dietitians, speech pathologists, occupational therapists and more.

– Not all insurers and providers will support the PCMH concept to the same degree. Some insurers and providers will support the concept whole heartedly while others will not support the PCMH at all. This disparity of support could hinder the development and coordination of the PCMH team.

– Support among individual insurers and providers will change over time. That is, hopefully, the number of supporters of PCMH who have made the necessary investments will increase over time. Members. providers and insurers who prefer to avoid involvement with PCMH could change referral sources and insurer relationships, creating instability in the healthcare delivery system.

– Development of the PCMH will take time and will be implemented in stages. Therefore, solutions can be implemented in stages. In some ways, this makes it easier to implement solutions as they can focus on a limited portion of the PCMH team. In other ways, it can be harder to implement solutions as each stage’s solution has its own costs and training requirements.

Over the next few days, I’ll look at potential solutions to the challenges associated with the successful implementation of PCMH. We’ll look at the lessons learned in the 1990s from a strong gatekeeper model as to what we should avoid with PCMH. We’ll also see what we compromises are required to contribute to a better financial performance for our healthcare system.

PCMH — Overcoming a shortage of PCPs

As we explored last week, the patient centered medical home (PCMH) is a concept that is quickly gaining popularity.   Through the use of sophisticated information systems and a strong primary care physician as a coordinator of a team of providers, PCMH has been proven to deliver reductions in cost and improvements in quality of care.

These demonstrations have been conducted in carefully controlled environments with providers and patients dedicated to its success.  The question remains: Can the PCMH successfully transition to settings that are less controlled?  If so, when?

Some of the challenges we’ve already described are: 1)  a lack of widespread implementation of electronic health records among primary care physicians, specialists, hospitals and other providers; 2) patient and specialist acceptance of the primary care physician’s role as the central coordinator of care.  (Note: Under the PCMH model, any physician specialty can act as the central coordinator of care.  However, for most patients, the primary care physician will take on that role.  For example, for patients suffering from primary immune deficiency, quite often the immunologist should act as the central coordinator of care.  But, for patients suffering from Crohn’s disease or ulcerative colitis, the primary care physician should act as the central coordinator of care once the condition is in remission.)

Today, let’s look at the next issue facing the patients centered medical home: a growing shortage of primary care physicians.  The American Association of Family Practice (AAFP) is predicting a shortage of 40,000 family physicians in 2020, when the demand is expected to spike. The U.S. health care system has about 100,000 family physicians and will need 139,531 in 10 years. The current environment is attracting only half the number needed to meet the demand.

One factor contributing to the shortage is that medical students are not opting for primary care, as illustrated below.

The PCMH will exacerbate the shortage.  Today, according to an article that appeared in The New England Journal of Medicine entitled “What’s Keeping Us So Busy in Primary Care?” on average each day, a primary care physician writes 17 e-mail messages , reviews 14 consultation reports , answers 24 phone calls, reads 11 imaging reports, and refills 12 prescriptions.  This is in addition to seeing at least 18 patients per day.

The PCMH will increase the primary care physician’s work outside of direct patient care.  A more formal process to coordinate care among various providers, even with the support of more sophisticated information systems, will require more phone calls, emails and report reviews.  This will necessitate the primary care physician decreasing their patient volume by more than 20%  For example, during the Group Health Cooperative’s experience published in 2009, primary care physicians decreased their patient volume from 2,300 per year to 1,800 per year.  Decreasing the primary care physicians patient volume will further exacerbate the shortage of primary care physicians.

Next week we’ll look at more challenges with the PCMH (eg, a growing shortage of primary care physicians).  But, more importantly, we’ll look at solutions to the issues we’ve identified.  AS the saying goes, nothing worthwhile comes easily.

PCMH — Challenges to success

The patient-centered medical home (PCMH) was first defined by the American Academy of Pediatrics in 1967.  Why has it taken more than 40 years to start building momentum?  Is it truly an idea whose time has come?

A successful PCMH requires sophisticated and comprehensive communication of private medical data between the patient’s primary care physician (ie, his or her medical home), specialists, allied health providers, hospitals, diagnostic companies, and insurers.  Even with the $19.5 billion investment included in the American Recovery and Reinvestment Act to support EHR development and with the technological advances made in recent years, there is still a way to go for successful communication between independent providers.  For example, many providers do not have EHR and there are no universal data layout standards that would make communication a possibility. 

A primary care physician requires compensation for the time required to coordinate and communicate between a team of specialists for a chronically ill patient with a complex condition.  As well, the primary care physician requires additional compensation so he can reduce his or her patient load, which will enable the doctor to spend the additional time required to educate patients about the appropriate care for their condition.

Some primary care physicians have attempted to turn to their patients for this additional compensation.  They have established concierge practices.  In this type of practice, the physician ideally reduces his or her patient load to 500 to 600 patients or fewer.  The physician can then spend time with each patient to provide education and an in-depth level of care.  The physician charges each patient a fee to join the practice that can range up to the complete cost of care (ie, the physician does not accept an insurance reimbursement).

Concierge medicine has met with limited success.   Many primary care physicians who established a concierge practice have not met their goal of 500 to 600 patients. 

As patients have not been willing to support a more active role for their primary care physicians, it is left to insurers to fund the PCMH.  Until now, without conclusive evidence in a wide variety of practice settings, insurers have not been willing to provide extra compensation for primary care physicians.

Tomorrow, we continue to explore the challenges and opportunities that PCMH presents for reducing the cost of care while improving quality.  Quite a tall order.