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The Truven Health Blog


The latest healthcare topics from a trusted, proven, and unbiased source.


Is Medicare Part D Coverage Causing a Decline in Hospitalizations?


By Michael L. Taylor/Wednesday, April 23, 2014
Mike Taylor imageA recent report found an 8% drop in hospital admissions since Part D was implemented, leading the authors to estimate an annual savings of $1.5B to the system. The report sounds promising, but it doesn’t answer some questions. Declines in hospital rates for dehydration, COPD and heart disease were found. Let’s think about this assertion for a minute. These decreased rates of admission were “associated” with the start of Medicare Part D, but an association doesn’t prove causality. What other factors might be happening at the same time that could also be involved?

First, look at specific diseases mentioned. Mortality rates for coronary artery disease (CAD) have been declining in the U.S., so I would expect to see decreased admissions for CAD events, and for its common complication, heart failure. Most experts would assert that CAD is on the decline due to better treatments and better control of risk factors, notably cholesterol and smoking. COPD is a chronic complication of smoking. For at least 90% of those afflicted by COPD, the cause is cigarette smoking. As smoking rates decline, admissions for COPD will also decline, but not because of Part D. As a physician, it’s difficult for me to speculate why better drug coverage would lessen dehydration admissions. 

Next, think about the overall effect of the severe recession starting in 2008. This recession put a temporary brake on healthcare costs, including hospitalizations. Many feel this played a major role in slowing the cost trend.

Lastly, consider that overall mortality rates didn’t fall in this group during the study period. The authors were expecting to see this. It may be plausible that better use of medications might impact mortality – the report addressed the better cost coverage, but didn’t address whether or not medication use was optimized. Medicare Part D addressed drug cost, not optimization of drug therapy. That would be an interesting study.

My main point here is “associations are not causations,” and as a nation, we can’t make pricing and policy decisions based on associations. We’ve learned this the hard way for many years and need to embrace a rigorous analytic approach when reading this type of report.

Michael L. Taylor, MD, FACP
Chief Medical Officer

Truven Health Welcomes Simpler Consulting


By Mike Boswood/Wednesday, April 16, 2014
Mike Boswood imageThis week I welcomed Simpler Consulting to our company. This acquisition makes sense because Truven and Simpler will make a game-changing combination in the healthcare marketplace – driving growth and strengthening our ability to reduce the cost and improve the quality of healthcare. Our powerful analytic capabilities, in combination with Simpler’s consultative expertise and unique approach to operational improvement, will complement each other in the following ways:

  • Enable provision of end-to-end performance improvement services for both Truven and Simpler clients
  • Support further development of enterprise-wide engagement
  • Support international growth for both businesses
In addition to its healthcare practice, Simpler has a commercial division that provides performance improvement consulting services to a wide range of businesses in the U.S., Europe, and Asia. We expect this business to expand in the immediate future and over time will look for additional opportunities with both our Commercial and Government divisions.

The entire Simpler management team is remaining with the business under the leadership of CEO Marc Hafer. They bring with them vast experience of the Lean performance improvement process along with proprietary methodologies and tools that have been developed and successfully deployed over many years.

In the past year, our company has completed the last steps of the very complex process of standing up as an independent company. Now I look forward to a bright future where, with our new colleagues, we will be able to bring ever greater value to our customers.

Mike Boswood
President and CEO

Using Algorithms and Predictive Models to Find Abuse and Fraud


By David Nelson/Monday, April 14, 2014
David Nelson imageA critical success factor in any program integrity effort is applying the appropriate algorithms and predictive models in pre-payment and post-payment claims analysis environments. Truven Health Analytics has experience developing and cataloging hundreds of algorithms which have been used (and are currently used) in various state agency, federal agency, health plan and employer operations to detect abusive and fraudulent claims schemes. We have also seen predictive model intelligence growing in the marketplace, and we are helping payers improve their predictive models so that they more effectively fight fraud and identify high risk claims before the claims are paid. While these sophisticated approaches are implemented to find what we didn’t see before, we also see our clients achieving results every year with some of the tried and true detection algorithms. Each year our expert panel – a team that works with payers across the healthcare spectrum every day – selects a set of key algorithms. We just presented a webinar on the Key Algorithms for 2014, and the presentation included:

  •  A new approach to the overuse of modifiers. We focused on modifiers 22, 24, 57, 76, and 77.
  • The device malfunction algorithm which identifies claims where the reason for treatment or services rendered is due to a malfunctioning implanted device
  • Extended DME rental use
  • Over utilization of diabetic supplies
  • Critical care on date of discharge
  • Advanced life support (ALS) transportation without an inpatient stay
  • Hospital acquired conditions
  • Over utilization of lumbar MRIs
  • Lumbar MRI, post lumbar MRI, or CT
Some of these algorithms represent new schemes we are seeing, and some represent schemes that continue to produce analytic results that PI units and Special Investigation Units (SIUs) can take action on and make recoveries. Our team has produced the Key Algorithms list annually since 2003 to support the healthcare payer community that is dedicated to improving integrity and eliminating fraud, waste, and abuse in healthcare. If you would like more information on algorithms and predictive models, feel free to reach me at david.nelson@truvenhealth.com.

David Nelson
Vice President, Market Planning & Strategy

Reducing Readmissions Must be Addressed Across the Care Continuum


By Byron C. Scott/Wednesday, April 9, 2014
Byron Scott imageA lot of attention has been given to hospital readmissions in recent years, and the establishment of a readmission outcome measure by the Centers for Medicare & Medicaid Services (CMS) in value based purchasing has incentivized hospitals to work diligently on the problem. The recent article in Kaiser Health News about Beth Israel Deaconess highlights the challenges and obstacles we must overcame to reduce readmissions. The reasons to address this issue go beyond the cost of it. One reason alone should be to improve the overall quality by preventing the re-exposure of a patient to the hospital environment where they can be subject to hospital-acquired infections and other safety concerns, such as falls.

For some of the top readmission diagnosis like Heart Failure and Pneumonia, the biggest obstacles to reducing readmissions have been not what goes on in the hospital, but what occurs when the patient is discharged. It really involves more about the psychosocial aspect of healthcare than the science of the disease and treating it. When the patient is discharged after a heart failure exacerbation, the medical component is typically stabilized. The failures often occur in the process, communication, and overall care coordination. 
  • Was the follow-up outpatient procedure scheduled before discharge?
  • Is a family member or caregiver aware of the follow-up appointment?
  • Can the family member or caregiver drive the patient to the follow-up appointment? 
  • Did the patient receive the proper diet instructions before discharge?
  • Do they have the resources at home to help comply with the dietary guidelines?
  • Can the patient afford the prescribed medications, and does the patient understand the instructions for taking their medications?
  • If the patient needs outpatient intravenous antibiotics, were home health services arranged? 
These are some of the questions that must be asked in order to reduce the risk of readmission.

Hospital systems and hospitals that have been successful in reducing readmissions have ensured a coordinated team of visiting nurses, social workers, pharmacist, and case workers all work together to coordinate the process, education, follow-up visits, and overall answers to questions that may come up to family and patients. The future of our healthcare system  will be tied to coordinating care using an overall population health analytics system that not only tracts information across inpatient and outpatient settings, but also enables all care providers to communicate more effectively, tying in real time surveillance, monitoring, and alerts. Therefore no matter where the patient is along the continuum (inpatient, outpatient, emergency department, or home) and whoever is interacting with the patient, information is constantly brought together and communicated to improve the health of the patient and reduce risk of readmission for high risk patients and chronic disease.

Byron C. Scott, MD, MBA, FACPE
Medical Director, National Clinical Medical Leader

Price Transparency for Medicare Services and Procedures Can Help Avoid Wasteful Spending


By Michael L. Taylor/Tuesday, April 8, 2014
Mike Taylor imageI welcome the recent announcement from Centers for Medicare & Medicaid Services (CMS) that it is publicly releasing extensive data detailing how much Medicare part B pays physicians for more than 6000 services and procedures. I don’t share the American Medical Association’s position that this data release will be harmful. Medicare part B pays in excess of $77 billion annually for physician services, and the public should be able to see how those dollars are spent.

Truven Health research proves there is tremendous variation in price for hospital services and procedures, and I fully expect these new data will show the same level of price variation. I expect to see considerable variation in price for physician services (office visits, consultations, etc.), but I suspect the real story will be in the prices charged for procedures rather than just the physician services.
  • How much price variation is present for frequently performed services like EKGs and blood tests? I recently received a bill for a “Metabolic Panel Comprehensive.” The test costs pennies to run—and the bill was $145! In total, my lab bill was $1035.
  • Many physicians have invested in office testing equipment and can charge a wide range of prices for these tests. Bone densitometry equipment a good example: it’s marketed with a definite business plan. Doctors are told how many tests they need to do every month to pay for the equipment and guarantee a certain profit level.
Over the past months, several Truven Health articles and studies have highlighted the huge variation in prices for colonoscopies, a recommended screening test, ranging from several hundred dollars to thousands. The public has a right to see these prices before agreeing to the tests. That is the goal of the Truven Health Treatment Cost Calculator. Patients using this tool can see the actual charge for a given test in his or her community, compare costs and then make an informed decision. Our fee-for-service payment system drives wasteful spending on medical procedures, and full transparency is one way to better understand what is driving these high costs.

Michael L. Taylor, MD, FACP
Chief Medical Officer

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