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The elements of a perfect storm are massing around the issue of cost equity. Health care providers need to take seriously the public’s perception that the deck is stacked against them and that they are unwitting participants in a national shell game. Three examples illustrate why a groundswell of skepticism may erode support for meaningful health care reform initiatives.

1. Researchers at Dartmouth have meticulously documented wide variation in health care quality, let alone price, from one locale to another for specific procedures. To date, public reaction to such variability has been relatively muted because this is largely seen as inside baseball and not well understood by consumers. Within the health care industry, however, policy makers and payers have taken notice and realize that “bending the cost curve” will not occur until this issue is addressed head on — and fixed.

2. More recently, Steve Brill’s searing expose of health care costs (“The Bitter Pill” in Time (requires subscription), exposed a raw nerve in the ongoing debate about health care reform. The most obvious villain cited by Brill was the infamous chargemaster used by hospitals to aggregate unit costs. It immediately became the poster child of what is wrong with our health care system. The public saw this as an egregious example of hospitals “piling on.” While there are sound operational reasons for using a master billing mechanism, the public outcry was rooted in widespread anger and dismay over a system that the average person — or purchaser — perceives as out of whack and far beyond the ability of individual patients to influence. Read more »

Alice found a Wonderland.

What we found last week, when the Center for Medicare & Medicaid Services (CMS) released cost information for the 100 most common diagnoses and procedures in over 3,000  hospitals, is beyond Alice’s imagination. Some of the cost differences for the identical billing diagnoses qualify for “you cannot make this stuff up.”

Two examples:

• Joint replacement in Ada, Okla.: $38,000; in Monterey Park, Calif.: $223,000
• Severe sepsis with mechanical ventilation for more than 96 hours: Bronx Lebanon Hospital in New York City, $38,000; Stanford Hospital, Stanford, Calif.: $637,000

Jonathan Blum, deputy administrator and director of the Center of Medicare at CMS, stated that making this information available to the public at no charge will put pressure on expensive hospitals. But will it?

Though CMS has the clout to make cost information available to the public, the average consumer has great difficulty finding out the cost of medical services, procedures, tests. A physician colleague who gave hospital grand rounds recently described his own significant challenge as he attempted to find the cost of hospital imaging and of an outpatient procedure for a family member.

The underinsured and uninsured are most vulnerable to excess list prices. That said, these astounding — and unsupportable — charge differentials demonstrate one of the key factors that the readership of Managed Care recognizes to be contributing to our broken health care system.

CMS has given us some ammunition in the battle for price and charge transparency in health care services. Let’s advance the campaign and reflect more clearly through the looking glass.

(Note: The author holds a position with a New Jersey health plan.)

The appropriate cliché at the appropriate moment can have an impact. For instance, hearing “the right hand doesn’t know what the left hand is doing” in a hospital might be enough to spin you right back out the revolving door. You know the horror stories. Wrong limb amputated. Forgotten utensils cozying up to innards for the long haul. Those are the sensational examples, but care coordination — or lack of it — was and remains a vexing problem. This story by Kaiser Health News describes it as health care’s “dirty little secret” but it’s something we’ve been reporting on for a long time.

Another phrase that goes way back: physician buy-in. Well, turns out that physicians may buy into care coordination in a big way. About 20 percent of physician practices now employ care coordinators, according to the 2013 Staff Salary Survey by Physicians Practice magazine, a practice management publication for doctors.

Editorial Director Bob Keaveney says that the time was right to include care coordinators in the publication’s survey. “Health care is changing,” says Keaveney. “We are theoretically doing away with the volume-based system of reimbursing providers and transforming into a value-based system that will pay for outcomes and quality of care. Outpatient medical practices typically have five or fewer physicians, and traditionally have not tried to perform complex, holistic case-management that might track patients on everything from their diet to their mental health status.

“That’s why we didn’t have it in the survey before. But in this era of accountable care, practices are realizing that outcome-based population-management is how they will increasingly be paid, and that will require coordination. So we thought it was time to ask whether practices are hiring care coordinators. Still, I was surprised to see that 20 percent have already done so.”

We’re betting that medical directors are pleasantly surprised as well. 

Frank Diamond is managing editor of Managed Care.

Many economists wonder if health insurance exchanges will actually perform one of their primary functions when they open in October — increasing the competition among health insurers offering products to millions of new beneficiaries. This according to Stateline, a wire service for the Pew Charitable Trusts (http://tinyurl.com/Pew-exchanges).

States in which multiple insurers already compete are likely to see a continuation. States where one plan dominates — and Stateline lists 10 of them — won’t see any difference, according to economists. Of course, there’s always the possibility that insurers, attracted by a burgeoning market, will take the leap, but “Insurance companies have been mostly silent about their plans, with some citing uncertainty about federal and state rules as a reason for holding back,” according to Stateline.

Insurance companies might not be the only ones not to show for the party. The educated consumer, that much-talked-about but seldom-sighted person of interest, might also hold out. The Kaiser Family Foundation finds that a majority of Americans don’t know what exchanges are (http://tinyurl.com/exchanges-survey). 

The study was done in March, so hope, if you wish, that a lot of education has gone on in the intervening months. But education is one thing; learning’s another. The Affordable Care Act did foresee the possibility that the uninsured might need some help getting coverage for the first time. So the ACA includes “navigators,” who will help people choose the coverage they need. But will there be enough of them?

California, for instance, wants 21,000 navigators. All of this adds to the costs which adds to the headaches which adds up, some would say, to a fine mess. And the starting pistol has not even been fired. 

Frank Diamond is managing editor of Managed Care.

We know Watson, the supercomputer, for its vast fund of knowledge and thinking prowess when machine bested man, defeating the all-time Jeopardy champ for games won, Ken Jennings (74), and Brad Rutter, Jeopardy’s highest money winner ($3,470,102), and winning against Jennings in a head-to-head Tournament of Champions. Now, Watson is flexing her considerable problem-solving muscle in medicine, and, more specifically, in clinical decision support. Indeed, the British edition of the online magazine Wired reports that “IBM’s Watson is better at diagnosing cancer than human doctors.” 

In September 2011, IBM and Wellpoint announced an agreement to create the first commercial applications of the IBM Watson technology to improve patient care. Watson has been a diligent medical student for the past two years, with a voracious  — perhaps insatiable  — appetite for both structured and unstructured data, including human language. Read more »

Sisyphus had to roll that boulder up the hill as punishment for deceit. Telling the truth has its own rewards, thankfully, because sometimes that too can seem a Sisyphean enterprise. Yet another warning that antibiotics are being overprescribed, this time in a letter in the April 11 issue of the New England Journal of Medicine (http://tinyurl.com/antibiotic-prescribing). The authors note that over 50 percent of antibiotics are distributed unnecessarily and find — surprise! — wide variation in prescribing patterns based on provider specialty, patient age, and location.

“Prescribing rates were higher among persons younger than 10 years of age and persons 65 years of age or older,” write authors Lauri A. Hicks, DO, and Thomas H. Taylor, Jr., MS. They examined 2010 data in the IMS Health Xponent database and found that 258 million courses of antibiotics were prescribed. Prescribing rates were highest in the South. The most frequently prescribed antibiotic agent was azithromycin.

Here’s some context: Almost 90 percent of Americans know that antibiotics can treat bacterial infections, but a third also believe that they can fight viral infections as well, according to a poll by the Centers for Disease Control and Prevention last year. More context? How about the soaring growth of antibiotic-resistant superbugs? Keep pushing that rock.  

A survey released at HIMSS by the American College of Physicians shows that there is growing serious dissatisfaction by practicing doctors with their EMRs. The type of practice doesn’t matter and neither does the brand of EMR.

It appears as if the doctors surveyed feel that the technology was oversold and does not live up to expectations. The results were compiled over by AmericanEHR Partners, an organization started by ACP and Cientis to help implement EMRs and focus on ways to use them to improve quality of care.

The surveys included over 4,200 responses collected between 2010 and 2012. Over 70% of the doctors surveyed were in practices of 10 or fewer practitioners. Over 80% were participating in Meaningful Use Incentive programs.

They may be practicing with EMRs and getting their Meaningful Use revenue, but they don’t like it.

Overall EHR satisfaction dropped 12 percentage points.  Read more »

The title is part of a quotation from Henry Chao, a CMS official who is involved with building and launching the health care exchanges. The federal government is running or co-managing 33 exchanges. They are expected to be functional by October 1 to enroll patients for coverage starting on January 1.

At a recent panel discussion at Americas Health Insurance Plans (AHIP). more than one government official showed some apprehension about missing the deadline. Chao’s full statement was, “The time for debating about the size of text on the screen or the color or is it a world-class user experience, that’s what we used to talk about two years ago. Let’s just make sure it’s not a third world experience.”

This will be a huge blow to consumers who will be depending on exchanges for next year’s coverage.  Read more »

Those seeking some clarity regarding the future of health care policy in the UK will be forgiven for being baffled by recent events. First up was an abortive attempt by the government to introduce a requirement for National Health Service commissioners (known as clinical commissioning groups –see my article on “Health Care Reform in England” in the August, 2012 issue of Managed Care  to undertake formal market testing of services. This may not seem unduly controversial – indeed in many countries it’s a legal requirement, especially as these can be multi-million dollar contracts  – but the announcement was greeted by uproar from a wide variety of groups  – including doctors  – as heralding the privatization of the NHS. Read more »