The Truven Health Blog

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

What is Appropriate Emergency Room Utilization?

By Michael L. Taylor/Wednesday, August 28, 2013
Mike Taylor imageA recent NPR article discussed a study in the Journal of the American Medical Association pointing out that complex problems cannot be solved by simple solutions. The problem to be solved is the high cost of emergency department (ED) utilization. The solution being developed by many states: Don’t pay for non-emergent visits. Sounds logical. But, as the authors point out, patients don’t go to the emergency department with diagnoses, they go with symptoms. A person with chest pain and shortness of breath at 3 a.m. should be evaluated on an emergency basis; if that person is having a heart attack, the visit is justified. If the person actually is having gastroesophageal reflux, is the visit not necessary? How is the person to know? Clearly, some people use the ED for non-emergent conditions, but making payment decisions based on discharge diagnoses has the possibility of discouraging patients from seeking needed care. In this study, only 6.3% of ED visits were classified as “primary care-treatable.”

The article makes an excellent point—“Between 4.5% and 8% of individuals in the ED are frequent users, but they account for 21% to 28% of visits.” In a 2003 Massachusetts study, 3.8% of ED users accounted for 17.6% of all ED visits. Our own data show similar results for these ED 'frequent flyers.' Perhaps a better way to reduce ED costs is to focus on those individuals who are the most frequent users, addressing their medical and socioeconomic problems, rather than penalizing those who genuinely believe they are having a medical emergency. The Centers for Medicare and Medicaid Services (CMS) should consider studying the profiles of frequent users of the ED and designing policies to address their challenges.

In a fee for service environment, ED overutilization is a logistic challenge for hospitals, but in an accountable care organization environment, with hospitals financially responsible for the health of the population it serves, ED overutilization becomes a financial issue. It is time to take a detailed look at this problem. 

CFOs State that Innovation is Necessary to Survive Healthcare Reform

By Phil Gaughan/Thursday, August 22, 2013
The recent HealthLeaders article, "CFO Exchange: Healthcare Reform Breeds Innovation," summarizes a recent gathering of CFOs and shares their sentiment that innovation is necessary to survive healthcare reform.

I would like to congratulate HealthLeaders and the CFOs that gathered in Colorado Springs to share innovative strategies to address current challenges. Whenever an organization is able and motivated to achieve a common mission, several critical success factors should be considered and reinforced:
  • Culture change is hard work.
  • Goals must be clearly defined and communicated.
  • Process must be linked to overall corporate goals.
  • You can't over-communicate. Information is useless data, unless it's shared.
  • You need to spend significant time on departmental manager education.
  • Managers must be held accountable for results.
  • There will be casualties.
Phil Gaughan
Senior Director of Operational Improvement

Education Needed to Help Consumers Navigate Exchanges

By Anita Nair Hartman/Wednesday, August 21, 2013
Anita Nair-Hartman imageA recent Politico article discusses the dilemma insurance exchange participation represents for health insurers. Exchanges could be a great way for health plans to gain millions of newly insured members. However, the regulatory and compliance requirements -- along with underwriting and pricing challenges -- make the decision to participate more complex. In addition, the general public has little understanding of health insurance basics. The federal government has agreed to do some education to ensure consumers are ready to navigate exchanges, but health insurers need to help.

The benefits of potential new membership seem to be outweighing the risks associated with the new heavily regulated marketplace. Come October 2013, if consumers come to the marketplace, our industry will find out whether the investments worked. Regardless of the year-one experience, health plans recognize that their businesses need to change to be more consumer-centric and are investing in solutions and services to support this change.
Anita Nair-Hartman
Vice President, Market Planning and Strategy

High-Deductible Plans Present Challenges for Healthcare Providers and Consumers

By Anita Nair Hartman/Monday, August 19, 2013
Anita Nair-Hartman imageA recent Kaiser Health News article, More High-Deductible Plan Members Can’t Pay Hospital Bills, highlights the challenges high-deductible plan designs present for healthcare providers and consumers. For consumers, there is confusion about their costs and quality choices. For providers, uncertainty around consumer out-of-pocket costs results in increased administrative efforts for collections of patient liability, increased accounts receivables, and potentially bad debt.

To better manage these high deductible plans, consumers and providers both need highly accurate, real-time estimates of patient out-of-pocket costs that are easy to use and understand. At Truven Health Analytics, we believe that a critical component of transparency is ensuring that all stakeholders have access to accurate, consistent information that was created using the same methodologies and processes. To support our vision, we have created tools for both consumers and providers that support payer goals for transparency.

Anita Nair-Hartman
Vice President Market Planning and Strategy

Price Variation with No Discernible Relationship to Quality or Outcomes

By Michael L. Taylor/Friday, August 16, 2013
Mike Taylor imageTina Rosenberg, a highly respected healthcare journalist for the New York Times, recently published a two-part “Opinionator” series on healthcare costs. The second article in the series discussed the Truven Health white paper from 2012 that describes the $36 billion savings opportunity due to price variation among providers. I was pleased to speak with Ms. Rosenberg about the topic, and provide background information for the article.

Our research (and others) has shown price variation based on geographic location, with some areas of the country charging much higher rates than others for similar services—and not demonstrating any significant improvement in quality or outcomes. Our white paper extends the research to show prices also vary within any given market, again without discernible differences in quality. As an example, a hospital charge for a similar procedure may vary by a two-fold difference, based on the discounts negotiated between the payer and the hospital.

Further, the Institute of Medicine (IOM) recently reported even more information on price variation and pointed out the value of price transparency. That paper argues that it would be a mistake for CMS to make significant pricing changes based on geographic principles alone. One of the major data sources? The Truven Health MarketScan® Research Databases, and one of the consultants working with IOM on this paper was our own Teresa Gibson, PhD.

This topic of price transparency helps understand how to improve the quality and decrease the price of healthcare—the stated vision of Truven Health Analytics. This is a tangible example of how we are fulfilling that vision.

Michael L. Taylor, MD FACP
Chief Medical Officer