The Truven Health Blog

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

 

Using Data to Improve Healthcare

By Truven Staff
Mike Taylor imageAs other have pointed out repeatedly, our healthcare system is badly broken. In fact, we don’t have a healthcare system in this country – it’s a series of independent businesses, often competing with each other in the goal of making more profit. The three constituencies in the healthcare business are the customers (patients), the providers (doctors and hospitals), and the payers (health plans, employers and the government). These three groups all have perfectly misaligned incentives. Patients want care at minimal cost, providers make more money by providing more care (whether it is needed or not), and payers want to minimize payments. The payment mechanism drives more care at higher cost, and the result is the U.S. pays 18% of its GDP for healthcare – more than twice as much as any other country on the planet.

How does smarter use of data help this picture? In my opinion, more intelligent use of data is an important part of the answer. Data is a powerful tool to help physicians make better decisions. In the hospital setting, physicians should have access to ALL of a patient’s medical record, not just information gathered during a single hospital stay. In most Emergency Departments, doctors often don’t have unfettered access to outpatient medical records that may provide important clues to making correct diagnoses. Tests are needlessly repeated, incorrect medications are given and diagnostic errors are made all too often.  Electronic medical records (EMRs) should be helping this problem, but unfortunately most EMRs are simply digitized versions of the old paper record. We need EMRs to be longitudinal electronic health records, aggregating all of a person’s health information into a single record to be used by all providers of care. A unified health record then needs analytic tools to be able to use the comprehensive record to improve care, provide guidelines for evidence-based medical care, prevent incorrect medication use, stop dosing errors, and have prompts in the analytic tool to stop repeat tests and x-rays- in sum, improve the care.

A unified, single, health record for a patient would be a great tool to help improve care, but in the U.S., we have more fundamental problems than a lack of accessible data. In today’s residency training programs, physicians should be taught how to use the data and EMRs to make better decisions. An evaluation of a patient should always start with the physician sitting with the patient, taking a probing history by knowing what questions to ask, and how to elicit symptoms. This information is supplemented by knowing how to properly examine a patient and understand how to put all the information together to formulate a diagnosis. We cannot rely on an EMR or CT scans to do this job – it must start with a thorough history and a proper physical. One of the most impactful lessons I was taught in residency was that if I finished taking a patient’s medical history and yet still didn’t have a series of probable diagnoses to consider, I needed to take more history. Unfortunately, in today’s hospitals, finding a diagnosis is all too often done by ordering more testing, and in a fee-for-service payment environment, more testing means more revenue. More procedures mean more revenue. Hospitals and physicians should be paid for providing a higher level of quality, not by volume. 

I am a strong advocate of using medical data and providing better analytic tools to help physicians and patients, but tools are just tools. Physicians and other caregivers need these tools to improve care, but providers of care also need to listen to patients, think critically in making diagnostic assessments, care passionately about improving care, and use sound judgment at all times. They cannot be effective in a fee-for-service world. Providers do need to improve the care they provide, but the U.S. needs a sound healthcare strategy to solve our issues. Technology is part of that solution.

Michael L. Taylor, MD, FACP
Chief Medical Officer

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

By Truven Staff
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

Hospital-Physician Alignment Key to Hospital Success

By Truven Staff
Byron Scott imageFinally, physicians come to the forefront as the connecting link that will help hospitals address and improve financial targets in the next three years. Physician-hospital alignment tops the list in the latest HealthLeaders Media industry survey, "Forging Healthcare's New Financial Foundation," and it’s noted as the most important area of focus and improvement, followed by cost reduction and care model direction. These three areas are key as we navigate from volume-based care (or fee-for-service) to value-based care. Physicians have significant influence on quality and the process of care improvement, since they are the delivery agents. Many definitions of quality exist, but every physician and hospital is constantly evaluated on quality by organizations such as the Centers for Medicare & Medicaid Services (CMS), in addition to independent rankings such as the Truven Health 100 Top Hospitals® study.

First, it’s crucial to make sure there are enough physicians. Current Truven Health  data shows differences in productivity by age cohort, and findings show that a retiring physician may need to be replaced by more than one new physician to see the same number of patients. Second, it’s essential to have enough physicians in the right structure.

In the organized structure, there needs to be the right performance-based contract and compensation in place to ensure alignment. Part of this structure includes having the physician leadership at every level in the organization. This includes medical directors, department chiefs, and C-suite physician executive leadership. Third, make sure that physician leadership is selected, trained, and resourced to make the leadership decisions for value-based care. Knowing the practice variation amongst the group and the group variation versus benchmarks helps us understand the drivers of each group and practice to implement changes to better support the practice and reduce variation. The key to this is having health analytic tools to extract the data to measure and compare. As Walter Deming once said, “You can’t manage what you can’t measure.”

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

CMS Bundled Payment Program Re-Opens, But What Should You Include In Those Bundles?

By Truven Staff
Michael Taylor imageDid you miss out on enrolling in one of the Centers for Medicare & Medicaid (CMS) Bundled Payment programs? You’re in luck. The CMS recently announced that they are offering another chance for new participants to enroll in its Bundled Payment for Care Improvement (BPCI) program.

The aim is to provide financial incentives to all providers of care — hospitals, doctors, and post-acute care providers — encouraging them to work together. This represents the ongoing CMS trend of developing new payment models that move away from fee-for-service. The agency also hopes that increasing the scope of the program will result in a richer data set that would improve its evaluation of the new payment models.

There are four basic models of bundled payments, although the re-opening is only accepting enrollment in models 2-4; not model 1:
  1. Acute care inpatient stay — similar to traditional Medicare payment model. In this model, all participants agree to accept a discount from the standard payment, but there can be gain sharing if collaboration reduces costs. Physicians are paid on a reduced Medicare level, but under fee-for-service rules, and hospitals are paid under the DRG system.
  2. Inpatient stay plus post-acute care for 30, 60, or 90 days post-discharge. Each bundle is assigned a certain predetermined payment level, and compared to actual costs.
  3. Post-acute care stay. In this model, the bundled payment is for the skilled nursing facility or long-term acute care only, not the inpatient stay.
  4. Acute care stay only. In this model, CMS pays a lump sum to the hospital for all services provided, including physicians.
This payment methodology is similar to capitation in that it shifts varying degrees of the financial risk to the providers of care and incents better oversight of the care. Under this arrangement, providers are incentivized not to provide unnecessary tests or procedures.

What to Include In the Bundles
One of the challenges with bundled payments is deciding what to include in the bundle — there are 48 different chronic conditions that can be included in the bundled methodology! At Truven Health Analytics™, our teams have done considerable work in defining how to construct these bundles. Our researchers have worked on bundles covering coronary artery bypass, heart valve replacement, defibrillator and pacemaker in-plants, and joint replacements, so Truven Health is well-positioned to support this new opportunity. Truven Health has very strong references and demonstrable expertise in this arena, as we have helped several other clients in the application and ongoing measurement for the program. We offer a well established set of services and deliverables that have been successfully delivered to multiple clients.

Re-opening the opportunity for new participants at this time will expand the breadth of these programs. There are currently 61 sites across the country participating, and gathering more data on outcomes will be fundamental to evaluating its success. CMS continues to drive fundamental changes in payment reform, helping to transition away from the waste and excesses driven by fee-for-service. Will you decide to participate?

Michael L. Taylor, MD, FACP
Chief Medical Officer

CMS Bundled Payment Program Re-Opens, But What Should You Include In Those Bundles?

By Truven Staff
Michael Taylor imageDid you miss out on enrolling in one of the Centers for Medicare & Medicaid (CMS) Bundled Payment programs? You’re in luck. The CMS recently announced that they are offering another chance for new participants to enroll in its Bundled Payment for Care Improvement (BPCI) program.

The aim is to provide financial incentives to all providers of care — hospitals, doctors, and post-acute care providers — encouraging them to work together. This represents the ongoing CMS trend of developing new payment models that move away from fee-for-service. The agency also hopes that increasing the scope of the program will result in a richer data set that would improve its evaluation of the new payment models.

There are four basic models of bundled payments, although the re-opening is only accepting enrollment in models 2-4; not model 1:
  1. Acute care inpatient stay — similar to traditional Medicare payment model. In this model, all participants agree to accept a discount from the standard payment, but there can be gain sharing if collaboration reduces costs. Physicians are paid on a reduced Medicare level, but under fee-for-service rules, and hospitals are paid under the DRG system.
  2. Inpatient stay plus post-acute care for 30, 60, or 90 days post-discharge. Each bundle is assigned a certain predetermined payment level, and compared to actual costs.
  3. Post-acute care stay. In this model, the bundled payment is for the skilled nursing facility or long-term acute care only, not the inpatient stay.
  4. Acute care stay only. In this model, CMS pays a lump sum to the hospital for all services provided, including physicians.
This payment methodology is similar to capitation in that it shifts varying degrees of the financial risk to the providers of care and incents better oversight of the care. Under this arrangement, providers are incentivized not to provide unnecessary tests or procedures.

What to Include In the Bundles
One of the challenges with bundled payments is deciding what to include in the bundle — there are 48 different chronic conditions that can be included in the bundled methodology! At Truven Health Analytics™, our teams have done considerable work in defining how to construct these bundles. Our researchers have worked on bundles covering coronary artery bypass, heart valve replacement, defibrillator and pacemaker in-plants, and joint replacements, so Truven Health is well-positioned to support this new opportunity. Truven Health has very strong references and demonstrable expertise in this arena, as we have helped several other clients in the application and ongoing measurement for the program. We offer a well established set of services and deliverables that have been successfully delivered to multiple clients.

Re-opening the opportunity for new participants at this time will expand the breadth of these programs. There are currently 61 sites across the country participating, and gathering more data on outcomes will be fundamental to evaluating its success. CMS continues to drive fundamental changes in payment reform, helping to transition away from the waste and excesses driven by fee-for-service. Will you decide to participate?

Michael L. Taylor, MD, FACP
Chief Medical Officer

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