Bryn Nelson, PhD

July 1 marked the debut of several features in this year’s healthcare reform legislation, including the acceptance of uninsured applicants to high-risk insurance pools. For many hospitalists and other doctors, however, the new arrivals only heightened their disappointment over the legislation’s lost opportunity: a permanent fix to the flawed sustainable growth rate, or SGR, that dictates Medicare reimbursements.

“It should have been taken care of in that bill,” says Ron Greeno, MD, SFHM, a member of SHM’s Public Policy Committee and CMO of Brentwood, Tenn.-based Cogent Healthcare. “Obviously, there’s a lot of frustration around the issue, especially on the membership side.”

June provided a stark reminder of the potential for catastrophe should the annual rate cuts to Medicare reimbursements to physicians—21.3% to date—ever go into effect. Congress eventually pushed through yet another temporary fix, delaying any cut from June 1 until Dec. 1 (after the midterm elections, of course) and even tacking on a 2.2% increase. But the House didn’t pass the extension until June 24, nearly a week after the Centers for Medicare & Medicaid Services (CMS) began processing June claims at the lower rate.

By that point, some doctors had begun refusing to see Medicare patients. Both doctors and hospitals have since had to resubmit some June claims to gain the full value, creating new headaches and expenses over the additional paperwork. “It’s wreaking havoc on the provider community,” Dr. Greeno says. “The uncertainty that has been created around these short-term fixes is very disquieting.”

Doctors and hospitals have had to resubmit some June claims to gain the full value, creating expenses over the additional paperwork. And then, of course, there’s the new Nov. 30 deadline facing a lame-duck Congress. As politicians continue dithering over a permanent fix and an accompanying price tag of $250 billion or more over a decade, CMS has announced next year’s rate cut. With a 6.1% decrease slated to take effect on Jan. 1, 2011, the combined SGR-mandated drop would reach nearly 30%. Ouch.

Find out the latest information on SGR reform and contact your legislators in support of permanent repeal through SHM's Legislative Action Center.

July 1 marked the debut of several features in this year’s healthcare reform legislation, including the acceptance of uninsured applicants to high-risk insurance pools. For many hospitalists and other doctors, however, the new arrivals only heightened their disappointment over the legislation’s lost opportunity: a permanent fix to the flawed sustainable growth rate, or SGR, that dictates Medicare reimbursements.

“It should have been taken care of in that bill,” says Ron Greeno, MD, SFHM, a member of SHM’s Public Policy Committee and CMO of Brentwood, Tenn.-based Cogent Healthcare. “Obviously, there’s a lot of frustration around the issue, especially on the membership side.”

June provided a stark reminder of the potential for catastrophe should the annual rate cuts to Medicare reimbursements to physicians—21.3% to date—ever go into effect. Congress eventually pushed through yet another temporary fix, delaying any cut from June 1 until Dec. 1 (after the midterm elections, of course) and even tacking on a 2.2% increase. But the House didn’t pass the extension until June 24, nearly a week after the Centers for Medicare & Medicaid Services (CMS) began processing June claims at the lower rate.

By that point, some doctors had begun refusing to see Medicare patients. Both doctors and hospitals have since had to resubmit some June claims to gain the full value, creating new headaches and expenses over the additional paperwork. “It’s wreaking havoc on the provider community,” Dr. Greeno says. “The uncertainty that has been created around these short-term fixes is very disquieting.”

Doctors and hospitals have had to resubmit some June claims to gain the full value, creating expenses over the additional paperwork. And then, of course, there’s the new Nov. 30 deadline facing a lame-duck Congress. As politicians continue dithering over a permanent fix and an accompanying price tag of $250 billion or more over a decade, CMS has announced next year’s rate cut. With a 6.1% decrease slated to take effect on Jan. 1, 2011, the combined SGR-mandated drop would reach nearly 30%. Ouch.

Find out the latest information on SGR reform and contact your legislators in support of permanent repeal through SHM's Legislative Action Center.

July 1 marked the debut of several features in this year’s healthcare reform legislation, including the acceptance of uninsured applicants to high-risk insurance pools. For many hospitalists and other doctors, however, the new arrivals only heightened their disappointment over the legislation’s lost opportunity: a permanent fix to the flawed sustainable growth rate, or SGR, that dictates Medicare reimbursements.

“It should have been taken care of in that bill,” says Ron Greeno, MD, SFHM, a member of SHM’s Public Policy Committee and CMO of Brentwood, Tenn.-based Cogent Healthcare. “Obviously, there’s a lot of frustration around the issue, especially on the membership side.”

June provided a stark reminder of the potential for catastrophe should the annual rate cuts to Medicare reimbursements to physicians—21.3% to date—ever go into effect. Congress eventually pushed through yet another temporary fix, delaying any cut from June 1 until Dec. 1 (after the midterm elections, of course) and even tacking on a 2.2% increase. But the House didn’t pass the extension until June 24, nearly a week after the Centers for Medicare & Medicaid Services (CMS) began processing June claims at the lower rate.

By that point, some doctors had begun refusing to see Medicare patients. Both doctors and hospitals have since had to resubmit some June claims to gain the full value, creating new headaches and expenses over the additional paperwork. “It’s wreaking havoc on the provider community,” Dr. Greeno says. “The uncertainty that has been created around these short-term fixes is very disquieting.”

Doctors and hospitals have had to resubmit some June claims to gain the full value, creating expenses over the additional paperwork. And then, of course, there’s the new Nov. 30 deadline facing a lame-duck Congress. As politicians continue dithering over a permanent fix and an accompanying price tag of $250 billion or more over a decade, CMS has announced next year’s rate cut. With a 6.1% decrease slated to take effect on Jan. 1, 2011, the combined SGR-mandated drop would reach nearly 30%. Ouch.

Find out the latest information on SGR reform and contact your legislators in support of permanent repeal through SHM's Legislative Action Center.

Are states doing enough to discipline problem doctors? The sensitive question has flared again with the release of an annual report by Washington, D.C.-based consumer advocacy group Public Citizen.

The report analyzed statistics released by the Federation of State Medical Boards on serious disciplinary actions taken by the boards of all 50 states and the District of Columbia in 2009. Those actions include revocations, surrenders, suspensions, and probations or restrictions. Public Citizen used a three-year average (2007 to 2009) to arrive at its rate of actions per 1,000 physicians licensed in each state.

For the fourth year in a row, Alaska had the most actions, 7.89 per 1,000 doctors. Meanwhile, Minnesota had the fewest actions (1.07 per 1,000 doctors) for the second year running. For the record, the numbers aren’t broken down by specialty (see Table 1, p. 5).

So what does it all mean? Do Alaska’s doctors really require more punitive measures than those in other states, or is the state board simply more vigilant? Are Minnesota doctors that much better, or is that state failing in its duty to provide adequate oversight? Is such a ranking system even warranted?

Nearly everyone agrees on the importance of protecting the public and the integrity of the medical profession. But the aggressive jousting over what the new numbers do or do not mean suggests just how difficult it can be to come up with a metric for medical accountability that everyone agrees is both fair and reliable.

Sidney Wolfe, MD, director of Public Citizen’s Health Research Group and the lead author of the new report, dismisses the notion that Minnesota’s doctors are so good that they don’t require as many disciplinary actions. “There is not a shred of evidence for that,” he says. Instead, he calls out what he views as an ineffective board.

In turn, Robert Leach, executive director of the Minnesota Board of Medical Practice, dismisses the significance of the report’s findings. “It’s a fair ranking the way their formula applies. It’s the formula we disagree with,” he says. “It’s fairly simplistic and indicative of nothing.”

And Lisa Robin, senior vice president for advocacy and member services at the Federation of State Medical Boards, says the federation doesn’t even encourage rankings because of the variable laws and sanctions from state to state. “It doesn’t give you a true picture of what boards do, to rank them,” she says.

click for large version

A Row Over Rankings

Minnesota’s Leach has a detailed list of grievances against the report. But his biggest beef is with the fact that it ranks medical boards on the number of serious disciplinary actions per 1,000 physicians licensed by the state. “The more precise number should be the number of licensed physicians who are actually practicing in the state,” he says.

From 2008 to 2009, for example, more than 19,000 physicians were licensed in Minnesota. Yet Leach says that only a little more than 14,000 were actually practicing within the state, which he describes as a large exporter of trained doctors. “So we had 5,000 physicians who weren’t even practicing here that were counted against our one disciplinary action per thousand physicians,” he says.

Public Citizen, he says, also doesn’t recognize other interventions, such as Minnesota’s “agreements for corrective action,” that normally include training or remedial coursework for doctors with an identified weakness in subject areas such as prescribing or chronic-pain management. “Not every doctor needs to be hit over the head with a hammer of serious disciplinary action to address a problem,” Leach says.

And then there’s the sticky matter of peer review. In Minnesota, “virtually every physician now practicing works for a large health plan or a facility,” he says. “We have virtually no solo practice or isolated practice in Minnesota, and those are the physicians who get in trouble: the ones who don’t have the advantage of periodic peer review, who don’t have the advantage of adequate supervision to help keep them out of trouble.”

Doctors like those in Alaska? “You always see Alaska is rated real high,” Leach says. “You have a bunch of people out there practicing in the wilderness, out in solo practice. Physicians need to have that ability to have peer review, to be able to address problem cases with their colleagues. In Minnesota, a lot of these facilities and health plans address these problems at the practice level before they even reach the board.”

A Call To Action

Dr. Wolfe isn’t buying the notion that Minnesota doctors require less formal discipline while their colleagues in Alaska need more. Whenever other low-ranking states have provided sufficient funding, replaced ineffective leadership, granted more independence, and met the other conditions necessary for a better medical board, he notes, their rate of disciplinary actions often “rockets up.”

The medical boards of North Carolina and Washington, D.C., have risen dramatically in the rankings in recent years, and Dr. Wolfe cites effective intervention in both cases. In formerly low-ranking Arizona, he says, similar corrective action in the late 1990s led to a tripling of the rate of serious disciplinary action within three years. “That’s obviously not a period of time that’s long enough to be explained by some inward migration of bad doctors or outward migration of good doctors,” he says. “It’s because the board started functioning better.”

Meanwhile, boards in South Carolina and Massachusetts have slumped in the ratings—a decline he attributes to the loss of leadership and funds.

“One area I can agree with Dr. Wolfe on is that medical boards need resources; they need adequate structure, resources, and authority to do their job and be able to protect the public,” says Robin, of the Federation of State Medical Boards. “If they’re in a big umbrella agency and they’re just one of many and share their pool of investigators with everyone, as you can imagine, that’s probably not as efficient.”

Hospitals also share in the blame, according to a separate Public Citizen report released last year that cites a chronic underreporting of doctor misconduct or incompetence to the National Practitioner Data Bank by hospitals. Robin agrees that more diligence is needed to ensure that medical boards have the information they need to properly do their jobs. As one of her board members told her, “They can’t gain information by osmosis.”

Hospitalists, however, might be well suited for addressing the underreporting issue. HM is in a “really good position to observe behavior that needs to be brought to the attention of hospital medical staff,” Dr. Wolfe says.

He recommends that one or more hospitalists should sit on each hospital’s medical peer review committee, where they can put their expertise to good use. “Hospitalists really need to get more active in this,” he says. “It’s for the betterment of the patients in the hospital, it’s for the betterment for the reputation of the hospital and the medical staff.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

Are states doing enough to discipline problem doctors? The sensitive question has flared again with the release of an annual report by Washington, D.C.-based consumer advocacy group Public Citizen.

The report analyzed statistics released by the Federation of State Medical Boards on serious disciplinary actions taken by the boards of all 50 states and the District of Columbia in 2009. Those actions include revocations, surrenders, suspensions, and probations or restrictions. Public Citizen used a three-year average (2007 to 2009) to arrive at its rate of actions per 1,000 physicians licensed in each state.

For the fourth year in a row, Alaska had the most actions, 7.89 per 1,000 doctors. Meanwhile, Minnesota had the fewest actions (1.07 per 1,000 doctors) for the second year running. For the record, the numbers aren’t broken down by specialty (see Table 1, p. 5).

So what does it all mean? Do Alaska’s doctors really require more punitive measures than those in other states, or is the state board simply more vigilant? Are Minnesota doctors that much better, or is that state failing in its duty to provide adequate oversight? Is such a ranking system even warranted?

Nearly everyone agrees on the importance of protecting the public and the integrity of the medical profession. But the aggressive jousting over what the new numbers do or do not mean suggests just how difficult it can be to come up with a metric for medical accountability that everyone agrees is both fair and reliable.

Sidney Wolfe, MD, director of Public Citizen’s Health Research Group and the lead author of the new report, dismisses the notion that Minnesota’s doctors are so good that they don’t require as many disciplinary actions. “There is not a shred of evidence for that,” he says. Instead, he calls out what he views as an ineffective board.

In turn, Robert Leach, executive director of the Minnesota Board of Medical Practice, dismisses the significance of the report’s findings. “It’s a fair ranking the way their formula applies. It’s the formula we disagree with,” he says. “It’s fairly simplistic and indicative of nothing.”

And Lisa Robin, senior vice president for advocacy and member services at the Federation of State Medical Boards, says the federation doesn’t even encourage rankings because of the variable laws and sanctions from state to state. “It doesn’t give you a true picture of what boards do, to rank them,” she says.

click for large version

A Row Over Rankings

Minnesota’s Leach has a detailed list of grievances against the report. But his biggest beef is with the fact that it ranks medical boards on the number of serious disciplinary actions per 1,000 physicians licensed by the state. “The more precise number should be the number of licensed physicians who are actually practicing in the state,” he says.

From 2008 to 2009, for example, more than 19,000 physicians were licensed in Minnesota. Yet Leach says that only a little more than 14,000 were actually practicing within the state, which he describes as a large exporter of trained doctors. “So we had 5,000 physicians who weren’t even practicing here that were counted against our one disciplinary action per thousand physicians,” he says.

Public Citizen, he says, also doesn’t recognize other interventions, such as Minnesota’s “agreements for corrective action,” that normally include training or remedial coursework for doctors with an identified weakness in subject areas such as prescribing or chronic-pain management. “Not every doctor needs to be hit over the head with a hammer of serious disciplinary action to address a problem,” Leach says.

And then there’s the sticky matter of peer review. In Minnesota, “virtually every physician now practicing works for a large health plan or a facility,” he says. “We have virtually no solo practice or isolated practice in Minnesota, and those are the physicians who get in trouble: the ones who don’t have the advantage of periodic peer review, who don’t have the advantage of adequate supervision to help keep them out of trouble.”

Doctors like those in Alaska? “You always see Alaska is rated real high,” Leach says. “You have a bunch of people out there practicing in the wilderness, out in solo practice. Physicians need to have that ability to have peer review, to be able to address problem cases with their colleagues. In Minnesota, a lot of these facilities and health plans address these problems at the practice level before they even reach the board.”

A Call To Action

Dr. Wolfe isn’t buying the notion that Minnesota doctors require less formal discipline while their colleagues in Alaska need more. Whenever other low-ranking states have provided sufficient funding, replaced ineffective leadership, granted more independence, and met the other conditions necessary for a better medical board, he notes, their rate of disciplinary actions often “rockets up.”

The medical boards of North Carolina and Washington, D.C., have risen dramatically in the rankings in recent years, and Dr. Wolfe cites effective intervention in both cases. In formerly low-ranking Arizona, he says, similar corrective action in the late 1990s led to a tripling of the rate of serious disciplinary action within three years. “That’s obviously not a period of time that’s long enough to be explained by some inward migration of bad doctors or outward migration of good doctors,” he says. “It’s because the board started functioning better.”

Meanwhile, boards in South Carolina and Massachusetts have slumped in the ratings—a decline he attributes to the loss of leadership and funds.

“One area I can agree with Dr. Wolfe on is that medical boards need resources; they need adequate structure, resources, and authority to do their job and be able to protect the public,” says Robin, of the Federation of State Medical Boards. “If they’re in a big umbrella agency and they’re just one of many and share their pool of investigators with everyone, as you can imagine, that’s probably not as efficient.”

Hospitals also share in the blame, according to a separate Public Citizen report released last year that cites a chronic underreporting of doctor misconduct or incompetence to the National Practitioner Data Bank by hospitals. Robin agrees that more diligence is needed to ensure that medical boards have the information they need to properly do their jobs. As one of her board members told her, “They can’t gain information by osmosis.”

Hospitalists, however, might be well suited for addressing the underreporting issue. HM is in a “really good position to observe behavior that needs to be brought to the attention of hospital medical staff,” Dr. Wolfe says.

He recommends that one or more hospitalists should sit on each hospital’s medical peer review committee, where they can put their expertise to good use. “Hospitalists really need to get more active in this,” he says. “It’s for the betterment of the patients in the hospital, it’s for the betterment for the reputation of the hospital and the medical staff.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

Are states doing enough to discipline problem doctors? The sensitive question has flared again with the release of an annual report by Washington, D.C.-based consumer advocacy group Public Citizen.

The report analyzed statistics released by the Federation of State Medical Boards on serious disciplinary actions taken by the boards of all 50 states and the District of Columbia in 2009. Those actions include revocations, surrenders, suspensions, and probations or restrictions. Public Citizen used a three-year average (2007 to 2009) to arrive at its rate of actions per 1,000 physicians licensed in each state.

For the fourth year in a row, Alaska had the most actions, 7.89 per 1,000 doctors. Meanwhile, Minnesota had the fewest actions (1.07 per 1,000 doctors) for the second year running. For the record, the numbers aren’t broken down by specialty (see Table 1, p. 5).

So what does it all mean? Do Alaska’s doctors really require more punitive measures than those in other states, or is the state board simply more vigilant? Are Minnesota doctors that much better, or is that state failing in its duty to provide adequate oversight? Is such a ranking system even warranted?

Nearly everyone agrees on the importance of protecting the public and the integrity of the medical profession. But the aggressive jousting over what the new numbers do or do not mean suggests just how difficult it can be to come up with a metric for medical accountability that everyone agrees is both fair and reliable.

Sidney Wolfe, MD, director of Public Citizen’s Health Research Group and the lead author of the new report, dismisses the notion that Minnesota’s doctors are so good that they don’t require as many disciplinary actions. “There is not a shred of evidence for that,” he says. Instead, he calls out what he views as an ineffective board.

In turn, Robert Leach, executive director of the Minnesota Board of Medical Practice, dismisses the significance of the report’s findings. “It’s a fair ranking the way their formula applies. It’s the formula we disagree with,” he says. “It’s fairly simplistic and indicative of nothing.”

And Lisa Robin, senior vice president for advocacy and member services at the Federation of State Medical Boards, says the federation doesn’t even encourage rankings because of the variable laws and sanctions from state to state. “It doesn’t give you a true picture of what boards do, to rank them,” she says.

click for large version

A Row Over Rankings

Minnesota’s Leach has a detailed list of grievances against the report. But his biggest beef is with the fact that it ranks medical boards on the number of serious disciplinary actions per 1,000 physicians licensed by the state. “The more precise number should be the number of licensed physicians who are actually practicing in the state,” he says.

From 2008 to 2009, for example, more than 19,000 physicians were licensed in Minnesota. Yet Leach says that only a little more than 14,000 were actually practicing within the state, which he describes as a large exporter of trained doctors. “So we had 5,000 physicians who weren’t even practicing here that were counted against our one disciplinary action per thousand physicians,” he says.

Public Citizen, he says, also doesn’t recognize other interventions, such as Minnesota’s “agreements for corrective action,” that normally include training or remedial coursework for doctors with an identified weakness in subject areas such as prescribing or chronic-pain management. “Not every doctor needs to be hit over the head with a hammer of serious disciplinary action to address a problem,” Leach says.

And then there’s the sticky matter of peer review. In Minnesota, “virtually every physician now practicing works for a large health plan or a facility,” he says. “We have virtually no solo practice or isolated practice in Minnesota, and those are the physicians who get in trouble: the ones who don’t have the advantage of periodic peer review, who don’t have the advantage of adequate supervision to help keep them out of trouble.”

Doctors like those in Alaska? “You always see Alaska is rated real high,” Leach says. “You have a bunch of people out there practicing in the wilderness, out in solo practice. Physicians need to have that ability to have peer review, to be able to address problem cases with their colleagues. In Minnesota, a lot of these facilities and health plans address these problems at the practice level before they even reach the board.”

A Call To Action

Dr. Wolfe isn’t buying the notion that Minnesota doctors require less formal discipline while their colleagues in Alaska need more. Whenever other low-ranking states have provided sufficient funding, replaced ineffective leadership, granted more independence, and met the other conditions necessary for a better medical board, he notes, their rate of disciplinary actions often “rockets up.”

The medical boards of North Carolina and Washington, D.C., have risen dramatically in the rankings in recent years, and Dr. Wolfe cites effective intervention in both cases. In formerly low-ranking Arizona, he says, similar corrective action in the late 1990s led to a tripling of the rate of serious disciplinary action within three years. “That’s obviously not a period of time that’s long enough to be explained by some inward migration of bad doctors or outward migration of good doctors,” he says. “It’s because the board started functioning better.”

Meanwhile, boards in South Carolina and Massachusetts have slumped in the ratings—a decline he attributes to the loss of leadership and funds.

“One area I can agree with Dr. Wolfe on is that medical boards need resources; they need adequate structure, resources, and authority to do their job and be able to protect the public,” says Robin, of the Federation of State Medical Boards. “If they’re in a big umbrella agency and they’re just one of many and share their pool of investigators with everyone, as you can imagine, that’s probably not as efficient.”

Hospitals also share in the blame, according to a separate Public Citizen report released last year that cites a chronic underreporting of doctor misconduct or incompetence to the National Practitioner Data Bank by hospitals. Robin agrees that more diligence is needed to ensure that medical boards have the information they need to properly do their jobs. As one of her board members told her, “They can’t gain information by osmosis.”

Hospitalists, however, might be well suited for addressing the underreporting issue. HM is in a “really good position to observe behavior that needs to be brought to the attention of hospital medical staff,” Dr. Wolfe says.

He recommends that one or more hospitalists should sit on each hospital’s medical peer review committee, where they can put their expertise to good use. “Hospitalists really need to get more active in this,” he says. “It’s for the betterment of the patients in the hospital, it’s for the betterment for the reputation of the hospital and the medical staff.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

With 37,000 individual members and nearly 5,000 hospitals and other provider groups on its roster, the American Hospital Association (AHA) is a major player in national healthcare debates and in shaping policies aimed at improving quality.

John Combes, MD, AHA senior vice president and president and chief operating officer of the association-affiliated Center for Healthcare Governance, serves on several national advisory groups on medical ethics, palliative care, and reducing medication errors.

Among his many duties, he is a principal investigator for a national project aimed at reducing hospital-acquired infections called “On the CUSP: Stop Bloodstream Infections,” sponsored by the Agency for Healthcare Research and Quality (AHRQ). (CUSP is the Comprehensive Unit-based Safety Program, developed by Johns Hopkins University and the Michigan Hospital Association.)

Dr. Combes recently talked with The Hospitalist about the AHA’s vision for healthcare reform, integrated care, and the role of hospitalists in redesigning hospital-based care.

Question: What are the AHA’s biggest priorities over the next year?

Answer: Healthcare reform and making sure that we can increase coverage for patients without insurance. There are 48 million uninsured in this country, and we are very supportive of increasing that coverage to make sure that people have good access to healthcare.

Q: The AHA has stated that “clinical integration holds the promise of greater quality and improved efficiency in delivering patient-centered care.” What’s your vision for clinical integration?

A: What we recognize is that in a reformed delivery system, we have to have a lot of partnerships between hospitals and clinicians—physicians in particular—and between hospitals and other facilities, such as long-term care facilities and post-acute facilities. We need to be able to bring better-coordinated care that meets the patient’s needs, and we need to work with each other to constantly improve that care. So that’s why we’re looking at an integrated delivery system. In our minds, it really means one registration, one bill, one experience for the patient.

Practically speaking, if you look at the healthcare reform legislation … there are pilots in there for accountable-care organizations (ACOs) and other payment reforms. And we’re very interested in making sure that hospitals can participate and take a leadership role in the development of those kinds of new structures.

Q: What role do you expect hospitalists to play in the continued drive for higher quality and more efficient care?

A: I think hospitalists can become a critical partner with the hospital in helping us redesign inpatient care to make it more efficient and effective. Additionally, hospitalists have a key role in engaging and keeping involved the community-based PCP, and making sure that they are considered part of the care team, even though they may not be present in the hospital, since they have the continuing responsibility for the patient.

I think as we look at other models of care delivery, such as the patient-centered medical home, it’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

It’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

Q: What are the necessary ingredients for any successful quality incentive payment program?

A: One of our big concerns is that there are lots of regulatory obstacles to true integration, where you can design some of those payment structures in terms of gainsharing and also in terms of payment for high-level-quality performance. One of the concerns of the AHM is to make sure that as we pursue these new models of care that require high levels of integration, we also look at some regulatory relief.

The promise is that if we can integrate the delivery system, we can then get focused on improving care and then rewarding high-quality delivery of care. And that can come through incentive programs or pay-for-performance programs and things of that nature that can be worked out between the hospitals and the physicians.

Q: What can be done to reduce the rates of hospital-acquired infections?

A: The idea of CUSP is that you create teams and a culture on units that will then implement the evidence-based intervention—in this case, eliminating central-line infections.

Hospitalists can play a critical role in helping create that culture of mutual accountability at the team level [and] holding each other accountable to use the evidence-based techniques for, in this case, line insertion, or for any kind of safety intervention. I think eliminating infections is a goal that’s achievable. I think we have come to the understanding over the last five or so years that these complications are avoidable in many, many cases, and that it takes teamwork, communication, and use of evidence-based procedures to get the work done.

Q: What can be done to help reduce preventable hospital readmissions?

A: There are so many things that go into readmissions. And the issue is: What is truly preventable in terms of treatments within the hospital, the coordination of discharge, and aftercare followup? A lot of readmissions are related to social determinants of health. And those have to do with people’s ability to afford their medications, people’s ability to access care, people’s home environment, and things of that nature. It’s going to take an approach by hospitals on those things that are controllable in partnerships with the physicians. But for many, many readmissions, it’s related to other issues that we as a society really have to hold ourselves accountable to.

Q: Some critics have charged that the overuse of medical technology is helping to drive up healthcare costs. Would there be more of a role for hospitals in decision-making about the appropriateness of tests within a model like an ACO?

A: In an ACO, that’s a partnership between hospitals and physicians operating as one entity. So that’s the difference, because there, everybody is aligned to make sure that we deliver the most effective care. There’s going to be much more time spent on physicians ordering the most appropriate technology or treatments for that condition that will deliver value to the patient and to the payor of that care.

But that’s in a totally integrated system. Right now we don’t have that. So where the interests of the physicians may be different from the interests of the hospital and the intentions are not aligned, it’s very hard to get at talking about what’s the most effective care.

Q: Is there a measure that hasn’t received as much attention that you would like to see more focus on to help improve the quality or cost-effectiveness of healthcare?

A: I think the one area that we’re always challenged with—and I think we’ve seen it in the healthcare debate, and I think it’s an appropriate role for us as healthcare providers to pay attention to—is palliative and end-of-life care. I don’t think we’ve done enough work, as a profession, to make sure that we deliver very-high-quality care of patients with chronic and acute catastrophic illnesses.

We need to better understand what the needs of those patients are, to ask them to work with us to set the goals with them, what they want from us.

So I think it’s an opportunity for us to have a real partnership with patients at a critical time in their lives. TH

Bryn Nelson is a freelance medical writer based in Seattle.

With 37,000 individual members and nearly 5,000 hospitals and other provider groups on its roster, the American Hospital Association (AHA) is a major player in national healthcare debates and in shaping policies aimed at improving quality.

John Combes, MD, AHA senior vice president and president and chief operating officer of the association-affiliated Center for Healthcare Governance, serves on several national advisory groups on medical ethics, palliative care, and reducing medication errors.

Among his many duties, he is a principal investigator for a national project aimed at reducing hospital-acquired infections called “On the CUSP: Stop Bloodstream Infections,” sponsored by the Agency for Healthcare Research and Quality (AHRQ). (CUSP is the Comprehensive Unit-based Safety Program, developed by Johns Hopkins University and the Michigan Hospital Association.)

Dr. Combes recently talked with The Hospitalist about the AHA’s vision for healthcare reform, integrated care, and the role of hospitalists in redesigning hospital-based care.

Question: What are the AHA’s biggest priorities over the next year?

Answer: Healthcare reform and making sure that we can increase coverage for patients without insurance. There are 48 million uninsured in this country, and we are very supportive of increasing that coverage to make sure that people have good access to healthcare.

Q: The AHA has stated that “clinical integration holds the promise of greater quality and improved efficiency in delivering patient-centered care.” What’s your vision for clinical integration?

A: What we recognize is that in a reformed delivery system, we have to have a lot of partnerships between hospitals and clinicians—physicians in particular—and between hospitals and other facilities, such as long-term care facilities and post-acute facilities. We need to be able to bring better-coordinated care that meets the patient’s needs, and we need to work with each other to constantly improve that care. So that’s why we’re looking at an integrated delivery system. In our minds, it really means one registration, one bill, one experience for the patient.

Practically speaking, if you look at the healthcare reform legislation … there are pilots in there for accountable-care organizations (ACOs) and other payment reforms. And we’re very interested in making sure that hospitals can participate and take a leadership role in the development of those kinds of new structures.

Q: What role do you expect hospitalists to play in the continued drive for higher quality and more efficient care?

A: I think hospitalists can become a critical partner with the hospital in helping us redesign inpatient care to make it more efficient and effective. Additionally, hospitalists have a key role in engaging and keeping involved the community-based PCP, and making sure that they are considered part of the care team, even though they may not be present in the hospital, since they have the continuing responsibility for the patient.

I think as we look at other models of care delivery, such as the patient-centered medical home, it’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

It’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

Q: What are the necessary ingredients for any successful quality incentive payment program?

A: One of our big concerns is that there are lots of regulatory obstacles to true integration, where you can design some of those payment structures in terms of gainsharing and also in terms of payment for high-level-quality performance. One of the concerns of the AHM is to make sure that as we pursue these new models of care that require high levels of integration, we also look at some regulatory relief.

The promise is that if we can integrate the delivery system, we can then get focused on improving care and then rewarding high-quality delivery of care. And that can come through incentive programs or pay-for-performance programs and things of that nature that can be worked out between the hospitals and the physicians.

Q: What can be done to reduce the rates of hospital-acquired infections?

A: The idea of CUSP is that you create teams and a culture on units that will then implement the evidence-based intervention—in this case, eliminating central-line infections.

Hospitalists can play a critical role in helping create that culture of mutual accountability at the team level [and] holding each other accountable to use the evidence-based techniques for, in this case, line insertion, or for any kind of safety intervention. I think eliminating infections is a goal that’s achievable. I think we have come to the understanding over the last five or so years that these complications are avoidable in many, many cases, and that it takes teamwork, communication, and use of evidence-based procedures to get the work done.

Q: What can be done to help reduce preventable hospital readmissions?

A: There are so many things that go into readmissions. And the issue is: What is truly preventable in terms of treatments within the hospital, the coordination of discharge, and aftercare followup? A lot of readmissions are related to social determinants of health. And those have to do with people’s ability to afford their medications, people’s ability to access care, people’s home environment, and things of that nature. It’s going to take an approach by hospitals on those things that are controllable in partnerships with the physicians. But for many, many readmissions, it’s related to other issues that we as a society really have to hold ourselves accountable to.

Q: Some critics have charged that the overuse of medical technology is helping to drive up healthcare costs. Would there be more of a role for hospitals in decision-making about the appropriateness of tests within a model like an ACO?

A: In an ACO, that’s a partnership between hospitals and physicians operating as one entity. So that’s the difference, because there, everybody is aligned to make sure that we deliver the most effective care. There’s going to be much more time spent on physicians ordering the most appropriate technology or treatments for that condition that will deliver value to the patient and to the payor of that care.

But that’s in a totally integrated system. Right now we don’t have that. So where the interests of the physicians may be different from the interests of the hospital and the intentions are not aligned, it’s very hard to get at talking about what’s the most effective care.

Q: Is there a measure that hasn’t received as much attention that you would like to see more focus on to help improve the quality or cost-effectiveness of healthcare?

A: I think the one area that we’re always challenged with—and I think we’ve seen it in the healthcare debate, and I think it’s an appropriate role for us as healthcare providers to pay attention to—is palliative and end-of-life care. I don’t think we’ve done enough work, as a profession, to make sure that we deliver very-high-quality care of patients with chronic and acute catastrophic illnesses.

We need to better understand what the needs of those patients are, to ask them to work with us to set the goals with them, what they want from us.

So I think it’s an opportunity for us to have a real partnership with patients at a critical time in their lives. TH

Bryn Nelson is a freelance medical writer based in Seattle.

With 37,000 individual members and nearly 5,000 hospitals and other provider groups on its roster, the American Hospital Association (AHA) is a major player in national healthcare debates and in shaping policies aimed at improving quality.

John Combes, MD, AHA senior vice president and president and chief operating officer of the association-affiliated Center for Healthcare Governance, serves on several national advisory groups on medical ethics, palliative care, and reducing medication errors.

Among his many duties, he is a principal investigator for a national project aimed at reducing hospital-acquired infections called “On the CUSP: Stop Bloodstream Infections,” sponsored by the Agency for Healthcare Research and Quality (AHRQ). (CUSP is the Comprehensive Unit-based Safety Program, developed by Johns Hopkins University and the Michigan Hospital Association.)

Dr. Combes recently talked with The Hospitalist about the AHA’s vision for healthcare reform, integrated care, and the role of hospitalists in redesigning hospital-based care.

Question: What are the AHA’s biggest priorities over the next year?

Answer: Healthcare reform and making sure that we can increase coverage for patients without insurance. There are 48 million uninsured in this country, and we are very supportive of increasing that coverage to make sure that people have good access to healthcare.

Q: The AHA has stated that “clinical integration holds the promise of greater quality and improved efficiency in delivering patient-centered care.” What’s your vision for clinical integration?

A: What we recognize is that in a reformed delivery system, we have to have a lot of partnerships between hospitals and clinicians—physicians in particular—and between hospitals and other facilities, such as long-term care facilities and post-acute facilities. We need to be able to bring better-coordinated care that meets the patient’s needs, and we need to work with each other to constantly improve that care. So that’s why we’re looking at an integrated delivery system. In our minds, it really means one registration, one bill, one experience for the patient.

Practically speaking, if you look at the healthcare reform legislation … there are pilots in there for accountable-care organizations (ACOs) and other payment reforms. And we’re very interested in making sure that hospitals can participate and take a leadership role in the development of those kinds of new structures.

Q: What role do you expect hospitalists to play in the continued drive for higher quality and more efficient care?

A: I think hospitalists can become a critical partner with the hospital in helping us redesign inpatient care to make it more efficient and effective. Additionally, hospitalists have a key role in engaging and keeping involved the community-based PCP, and making sure that they are considered part of the care team, even though they may not be present in the hospital, since they have the continuing responsibility for the patient.

I think as we look at other models of care delivery, such as the patient-centered medical home, it’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

It’s critical that hospitalists really develop some strong relationships and communication networks with those groups as well, so that the care for the patient can become seamless and transitions are not as dangerous as they’ve been in the past, in terms of missed opportunities and missed handoffs.

Q: What are the necessary ingredients for any successful quality incentive payment program?

A: One of our big concerns is that there are lots of regulatory obstacles to true integration, where you can design some of those payment structures in terms of gainsharing and also in terms of payment for high-level-quality performance. One of the concerns of the AHM is to make sure that as we pursue these new models of care that require high levels of integration, we also look at some regulatory relief.

The promise is that if we can integrate the delivery system, we can then get focused on improving care and then rewarding high-quality delivery of care. And that can come through incentive programs or pay-for-performance programs and things of that nature that can be worked out between the hospitals and the physicians.

Q: What can be done to reduce the rates of hospital-acquired infections?

A: The idea of CUSP is that you create teams and a culture on units that will then implement the evidence-based intervention—in this case, eliminating central-line infections.

Hospitalists can play a critical role in helping create that culture of mutual accountability at the team level [and] holding each other accountable to use the evidence-based techniques for, in this case, line insertion, or for any kind of safety intervention. I think eliminating infections is a goal that’s achievable. I think we have come to the understanding over the last five or so years that these complications are avoidable in many, many cases, and that it takes teamwork, communication, and use of evidence-based procedures to get the work done.

Q: What can be done to help reduce preventable hospital readmissions?

A: There are so many things that go into readmissions. And the issue is: What is truly preventable in terms of treatments within the hospital, the coordination of discharge, and aftercare followup? A lot of readmissions are related to social determinants of health. And those have to do with people’s ability to afford their medications, people’s ability to access care, people’s home environment, and things of that nature. It’s going to take an approach by hospitals on those things that are controllable in partnerships with the physicians. But for many, many readmissions, it’s related to other issues that we as a society really have to hold ourselves accountable to.

Q: Some critics have charged that the overuse of medical technology is helping to drive up healthcare costs. Would there be more of a role for hospitals in decision-making about the appropriateness of tests within a model like an ACO?

A: In an ACO, that’s a partnership between hospitals and physicians operating as one entity. So that’s the difference, because there, everybody is aligned to make sure that we deliver the most effective care. There’s going to be much more time spent on physicians ordering the most appropriate technology or treatments for that condition that will deliver value to the patient and to the payor of that care.

But that’s in a totally integrated system. Right now we don’t have that. So where the interests of the physicians may be different from the interests of the hospital and the intentions are not aligned, it’s very hard to get at talking about what’s the most effective care.

Q: Is there a measure that hasn’t received as much attention that you would like to see more focus on to help improve the quality or cost-effectiveness of healthcare?

A: I think the one area that we’re always challenged with—and I think we’ve seen it in the healthcare debate, and I think it’s an appropriate role for us as healthcare providers to pay attention to—is palliative and end-of-life care. I don’t think we’ve done enough work, as a profession, to make sure that we deliver very-high-quality care of patients with chronic and acute catastrophic illnesses.

We need to better understand what the needs of those patients are, to ask them to work with us to set the goals with them, what they want from us.

So I think it’s an opportunity for us to have a real partnership with patients at a critical time in their lives. TH

Bryn Nelson is a freelance medical writer based in Seattle.

Whether pure political theater or a real attempt at bipartisanship, the Feb. 25 healthcare summit was a milestone on the way to March’s riveting Congressional vote in favor of healtcare reform.

Both parties arrived with some newly dusted off—or slightly tweaked—ideas to throw into the mix, in part to give voters the impression that they knew best how to move forward with healthcare reform. In the end, the legislation that narrowly prevailed March 20 incorporated some of those ideas while dumping or reshaping others (items in the reconciliation bill weren’t finalized at press time).

The fight isn’t over, however, and we are likely to hear the same dueling themes again: more federal government intervention versus more market-driven solutions for addressing access and cost. Most of the ideas influence hospital care, frequently cited as one of the most expensive sectors of healthcare. Here’s a look at key proposals that rose to the top of their parties’ wish lists in February, and how they fared in March.

Idea: Allow People to Buy Health Insurance across State Lines

Although not new, Republican legislators revived the idea bandied about during the Bush administration, and made it a key element of their alternative to the Democratic plan. Ultimately, it would hold insurance companies accountable through robust competition, but without a “federal bureaucracy,” Rep. Marsha Blackburn (R-Tenn.) said at the summit. With competition fueling reduced insurance premiums for consumers, the argument goes, the number of insured increases.

Michael Cousineau, an associate professor of research at the University of Southern California and a specialist in health policy and health services, isn’t having it. “I think that it’s a stupid proposal,” he says. First, he argues, it’s not practical for someone in California to buy a policy from Mississippi. If a consumer has a problem with an out-of-state health plan refusing to cover care, he asks, “who are you going to complain to?”

If insurance companies set up shop in the states with the lowest level of regulation, he says, younger and healthier adults would migrate to those cheaper plans, leaving the older and sicker adults who really need healthcare in plans with the strongest consumer protections. “So you’ll end up with this massive problem of sick people in some plans and well people in the other plans, and it’s just going to create havoc. I don’t think it’s a sustainable mechanism,” he says. Doctors, hospitals, and even insurers themselves would hate it, he says, because of the massive influx of out-of-state insurance companies.

Democrats, including Oregon Sen. Ron Wyden, introduced their own version of the proposal, but on a more regional level and with more rigorous oversight. Currently, insurance plans must meet the requirements of the states in which they’re sold. But states have incredibly varied mandates about what kind of healthcare must be covered. “If you permit the interstate sales of insurance under the current plans, then more or less all of those state rules go out the door,” says Leighton Ku, a health policy analyst at George Washington University. Although sidestepping state-specific regulations would permit people to buy insurance from the state with the cheapest plan, he says, “in many cases, that would be because the state has the fewest restrictions on it.”

And therein lies another big concern, he says: “That it essentially begins to create a race to the bottom.”

At the summit, President Obama supported selling insurance across state lines, but through a national exchange with at least “minimal standards” through which any insurer could participate.

Ultimately, the new legislation will allow states to form exchanges, but with an option for regional exchanges as well.

Idea: Create a Health Insurance Rate Authority

Championed by Obama, this proposal arrived on the heels of several high-profile rate increases that have generated considerable public angst. Not coincidentally, the House Energy and Commerce Committee held a hearing about soaring premiums the day before the summit.

At the hearing, legislators questioned Wellpoint president and CEO Angela Braly about the company’s Anthem Blue Cross unit and its plans to raise insurance premiums by as much as 39% for some Californians (overall, premium increases average 25%). Braly, in turn, blamed the surge on rising and “unsustainable” pharmacy and hospital care costs, the latter driven primarily by hospital reimbursement rates.

Although the general concept of federal oversight is useful, Ku says, the big question is one of authority. Regulating insurers has traditionally fallen to state governments, which likely will be reluctant to give up jurisdictional power but might accept federal assistance.

“I think in general it would help, but I don’t think it’s going to have as much of an impact unless we control the cost-of-care downlink,” Cousineau adds. Including a mandate for individuals to buy health insurance reduces the need for the authority, though he concedes that some cynics doubt whether health insurers will voluntarily lower rates even if more young, healthy people buy policies. Republicans oppose the idea of an individual mandate and a new federal regulatory entity.

In the March bill, the individual mandate prevailed while the idea of a new insurance watchdog fell by the wayside.

Idea: Provide State Grants to Expand High-Risk Pools for Uninsured

The idea, proposed by Republicans in several iterations, including Sen. John McCain (R-Ariz.) when he ran for president, was offered as a potential alternative to banning insurance companies from denying coverage to patients with pre-existing conditions. Many states already offer high-risk patient pools for patients who have been excluded from the private market, but some have long waiting lists. The Health Insurance Plan of California (HPIC), for example, has a two-year wait, according to Cousineau.

“It’s not a bad idea,” he says of a federal subsidy, but because the pools only include high-risk patients, he says they won’t solve the problem of expensive premiums. Cousineau prefers state-based exchanges that aren’t segregated by risk and spread the cost over a wider range of people, which is included in the March bill. “Otherwise, it’s too expensive, and you’re asking the states to pay for part of it,” he says.

Ku believes high-risk pools could deliver some relief to patients currently priced out of the market. “It’s not going to help the neediest of the needy, but could help some,” he says. As a temporary fix, the new legislation sets up high-risk pools in states that lack them, with $5 billion from the federal coffers. The mechanism will be phased out in 2014, however; by then, all insurers will be banned from denying coverage to anyone.

Idea: Gradually Close the “Doughnut Hole”

An idea popular with senior citizens, closing the gap in Medicare’s Part D prescription drug coverage gained further traction under Obama’s healthcare plan and was included in the healthcare reconciliation bill. The doughnut-hole closure is paid for with savings from cuts to the Medicare Advantage program.

Experts question whether it will affect as many patients as has been widely assumed. “I think it’s an important thing to do,” Cousineau says, “but I’m not as worried as much about the costs there as I am in other parts of the program.”

Uncertainties aside, closing Medicare’s doughnut hole could help ease at least one headache cited by hospitalists: struggling to sort through hospitalized patients’ formularies to insure they can afford the drugs they need upon discharge—so they won’t end up back in the hospital. TH

Bryn Nelson is a freelance medical writer based in Seattle.

Whether pure political theater or a real attempt at bipartisanship, the Feb. 25 healthcare summit was a milestone on the way to March’s riveting Congressional vote in favor of healtcare reform.

Both parties arrived with some newly dusted off—or slightly tweaked—ideas to throw into the mix, in part to give voters the impression that they knew best how to move forward with healthcare reform. In the end, the legislation that narrowly prevailed March 20 incorporated some of those ideas while dumping or reshaping others (items in the reconciliation bill weren’t finalized at press time).

The fight isn’t over, however, and we are likely to hear the same dueling themes again: more federal government intervention versus more market-driven solutions for addressing access and cost. Most of the ideas influence hospital care, frequently cited as one of the most expensive sectors of healthcare. Here’s a look at key proposals that rose to the top of their parties’ wish lists in February, and how they fared in March.

Idea: Allow People to Buy Health Insurance across State Lines

Although not new, Republican legislators revived the idea bandied about during the Bush administration, and made it a key element of their alternative to the Democratic plan. Ultimately, it would hold insurance companies accountable through robust competition, but without a “federal bureaucracy,” Rep. Marsha Blackburn (R-Tenn.) said at the summit. With competition fueling reduced insurance premiums for consumers, the argument goes, the number of insured increases.

Michael Cousineau, an associate professor of research at the University of Southern California and a specialist in health policy and health services, isn’t having it. “I think that it’s a stupid proposal,” he says. First, he argues, it’s not practical for someone in California to buy a policy from Mississippi. If a consumer has a problem with an out-of-state health plan refusing to cover care, he asks, “who are you going to complain to?”

If insurance companies set up shop in the states with the lowest level of regulation, he says, younger and healthier adults would migrate to those cheaper plans, leaving the older and sicker adults who really need healthcare in plans with the strongest consumer protections. “So you’ll end up with this massive problem of sick people in some plans and well people in the other plans, and it’s just going to create havoc. I don’t think it’s a sustainable mechanism,” he says. Doctors, hospitals, and even insurers themselves would hate it, he says, because of the massive influx of out-of-state insurance companies.

Democrats, including Oregon Sen. Ron Wyden, introduced their own version of the proposal, but on a more regional level and with more rigorous oversight. Currently, insurance plans must meet the requirements of the states in which they’re sold. But states have incredibly varied mandates about what kind of healthcare must be covered. “If you permit the interstate sales of insurance under the current plans, then more or less all of those state rules go out the door,” says Leighton Ku, a health policy analyst at George Washington University. Although sidestepping state-specific regulations would permit people to buy insurance from the state with the cheapest plan, he says, “in many cases, that would be because the state has the fewest restrictions on it.”

And therein lies another big concern, he says: “That it essentially begins to create a race to the bottom.”

At the summit, President Obama supported selling insurance across state lines, but through a national exchange with at least “minimal standards” through which any insurer could participate.

Ultimately, the new legislation will allow states to form exchanges, but with an option for regional exchanges as well.

Idea: Create a Health Insurance Rate Authority

Championed by Obama, this proposal arrived on the heels of several high-profile rate increases that have generated considerable public angst. Not coincidentally, the House Energy and Commerce Committee held a hearing about soaring premiums the day before the summit.

At the hearing, legislators questioned Wellpoint president and CEO Angela Braly about the company’s Anthem Blue Cross unit and its plans to raise insurance premiums by as much as 39% for some Californians (overall, premium increases average 25%). Braly, in turn, blamed the surge on rising and “unsustainable” pharmacy and hospital care costs, the latter driven primarily by hospital reimbursement rates.

Although the general concept of federal oversight is useful, Ku says, the big question is one of authority. Regulating insurers has traditionally fallen to state governments, which likely will be reluctant to give up jurisdictional power but might accept federal assistance.

“I think in general it would help, but I don’t think it’s going to have as much of an impact unless we control the cost-of-care downlink,” Cousineau adds. Including a mandate for individuals to buy health insurance reduces the need for the authority, though he concedes that some cynics doubt whether health insurers will voluntarily lower rates even if more young, healthy people buy policies. Republicans oppose the idea of an individual mandate and a new federal regulatory entity.

In the March bill, the individual mandate prevailed while the idea of a new insurance watchdog fell by the wayside.

Idea: Provide State Grants to Expand High-Risk Pools for Uninsured

The idea, proposed by Republicans in several iterations, including Sen. John McCain (R-Ariz.) when he ran for president, was offered as a potential alternative to banning insurance companies from denying coverage to patients with pre-existing conditions. Many states already offer high-risk patient pools for patients who have been excluded from the private market, but some have long waiting lists. The Health Insurance Plan of California (HPIC), for example, has a two-year wait, according to Cousineau.

“It’s not a bad idea,” he says of a federal subsidy, but because the pools only include high-risk patients, he says they won’t solve the problem of expensive premiums. Cousineau prefers state-based exchanges that aren’t segregated by risk and spread the cost over a wider range of people, which is included in the March bill. “Otherwise, it’s too expensive, and you’re asking the states to pay for part of it,” he says.

Ku believes high-risk pools could deliver some relief to patients currently priced out of the market. “It’s not going to help the neediest of the needy, but could help some,” he says. As a temporary fix, the new legislation sets up high-risk pools in states that lack them, with $5 billion from the federal coffers. The mechanism will be phased out in 2014, however; by then, all insurers will be banned from denying coverage to anyone.

Idea: Gradually Close the “Doughnut Hole”

An idea popular with senior citizens, closing the gap in Medicare’s Part D prescription drug coverage gained further traction under Obama’s healthcare plan and was included in the healthcare reconciliation bill. The doughnut-hole closure is paid for with savings from cuts to the Medicare Advantage program.

Experts question whether it will affect as many patients as has been widely assumed. “I think it’s an important thing to do,” Cousineau says, “but I’m not as worried as much about the costs there as I am in other parts of the program.”

Uncertainties aside, closing Medicare’s doughnut hole could help ease at least one headache cited by hospitalists: struggling to sort through hospitalized patients’ formularies to insure they can afford the drugs they need upon discharge—so they won’t end up back in the hospital. TH

Bryn Nelson is a freelance medical writer based in Seattle.

Whether pure political theater or a real attempt at bipartisanship, the Feb. 25 healthcare summit was a milestone on the way to March’s riveting Congressional vote in favor of healtcare reform.

Both parties arrived with some newly dusted off—or slightly tweaked—ideas to throw into the mix, in part to give voters the impression that they knew best how to move forward with healthcare reform. In the end, the legislation that narrowly prevailed March 20 incorporated some of those ideas while dumping or reshaping others (items in the reconciliation bill weren’t finalized at press time).

The fight isn’t over, however, and we are likely to hear the same dueling themes again: more federal government intervention versus more market-driven solutions for addressing access and cost. Most of the ideas influence hospital care, frequently cited as one of the most expensive sectors of healthcare. Here’s a look at key proposals that rose to the top of their parties’ wish lists in February, and how they fared in March.

Idea: Allow People to Buy Health Insurance across State Lines

Although not new, Republican legislators revived the idea bandied about during the Bush administration, and made it a key element of their alternative to the Democratic plan. Ultimately, it would hold insurance companies accountable through robust competition, but without a “federal bureaucracy,” Rep. Marsha Blackburn (R-Tenn.) said at the summit. With competition fueling reduced insurance premiums for consumers, the argument goes, the number of insured increases.

Michael Cousineau, an associate professor of research at the University of Southern California and a specialist in health policy and health services, isn’t having it. “I think that it’s a stupid proposal,” he says. First, he argues, it’s not practical for someone in California to buy a policy from Mississippi. If a consumer has a problem with an out-of-state health plan refusing to cover care, he asks, “who are you going to complain to?”

If insurance companies set up shop in the states with the lowest level of regulation, he says, younger and healthier adults would migrate to those cheaper plans, leaving the older and sicker adults who really need healthcare in plans with the strongest consumer protections. “So you’ll end up with this massive problem of sick people in some plans and well people in the other plans, and it’s just going to create havoc. I don’t think it’s a sustainable mechanism,” he says. Doctors, hospitals, and even insurers themselves would hate it, he says, because of the massive influx of out-of-state insurance companies.

Democrats, including Oregon Sen. Ron Wyden, introduced their own version of the proposal, but on a more regional level and with more rigorous oversight. Currently, insurance plans must meet the requirements of the states in which they’re sold. But states have incredibly varied mandates about what kind of healthcare must be covered. “If you permit the interstate sales of insurance under the current plans, then more or less all of those state rules go out the door,” says Leighton Ku, a health policy analyst at George Washington University. Although sidestepping state-specific regulations would permit people to buy insurance from the state with the cheapest plan, he says, “in many cases, that would be because the state has the fewest restrictions on it.”

And therein lies another big concern, he says: “That it essentially begins to create a race to the bottom.”

At the summit, President Obama supported selling insurance across state lines, but through a national exchange with at least “minimal standards” through which any insurer could participate.

Ultimately, the new legislation will allow states to form exchanges, but with an option for regional exchanges as well.

Idea: Create a Health Insurance Rate Authority

Championed by Obama, this proposal arrived on the heels of several high-profile rate increases that have generated considerable public angst. Not coincidentally, the House Energy and Commerce Committee held a hearing about soaring premiums the day before the summit.

At the hearing, legislators questioned Wellpoint president and CEO Angela Braly about the company’s Anthem Blue Cross unit and its plans to raise insurance premiums by as much as 39% for some Californians (overall, premium increases average 25%). Braly, in turn, blamed the surge on rising and “unsustainable” pharmacy and hospital care costs, the latter driven primarily by hospital reimbursement rates.

Although the general concept of federal oversight is useful, Ku says, the big question is one of authority. Regulating insurers has traditionally fallen to state governments, which likely will be reluctant to give up jurisdictional power but might accept federal assistance.

“I think in general it would help, but I don’t think it’s going to have as much of an impact unless we control the cost-of-care downlink,” Cousineau adds. Including a mandate for individuals to buy health insurance reduces the need for the authority, though he concedes that some cynics doubt whether health insurers will voluntarily lower rates even if more young, healthy people buy policies. Republicans oppose the idea of an individual mandate and a new federal regulatory entity.

In the March bill, the individual mandate prevailed while the idea of a new insurance watchdog fell by the wayside.

Idea: Provide State Grants to Expand High-Risk Pools for Uninsured

The idea, proposed by Republicans in several iterations, including Sen. John McCain (R-Ariz.) when he ran for president, was offered as a potential alternative to banning insurance companies from denying coverage to patients with pre-existing conditions. Many states already offer high-risk patient pools for patients who have been excluded from the private market, but some have long waiting lists. The Health Insurance Plan of California (HPIC), for example, has a two-year wait, according to Cousineau.

“It’s not a bad idea,” he says of a federal subsidy, but because the pools only include high-risk patients, he says they won’t solve the problem of expensive premiums. Cousineau prefers state-based exchanges that aren’t segregated by risk and spread the cost over a wider range of people, which is included in the March bill. “Otherwise, it’s too expensive, and you’re asking the states to pay for part of it,” he says.

Ku believes high-risk pools could deliver some relief to patients currently priced out of the market. “It’s not going to help the neediest of the needy, but could help some,” he says. As a temporary fix, the new legislation sets up high-risk pools in states that lack them, with $5 billion from the federal coffers. The mechanism will be phased out in 2014, however; by then, all insurers will be banned from denying coverage to anyone.

Idea: Gradually Close the “Doughnut Hole”

An idea popular with senior citizens, closing the gap in Medicare’s Part D prescription drug coverage gained further traction under Obama’s healthcare plan and was included in the healthcare reconciliation bill. The doughnut-hole closure is paid for with savings from cuts to the Medicare Advantage program.

Experts question whether it will affect as many patients as has been widely assumed. “I think it’s an important thing to do,” Cousineau says, “but I’m not as worried as much about the costs there as I am in other parts of the program.”

Uncertainties aside, closing Medicare’s doughnut hole could help ease at least one headache cited by hospitalists: struggling to sort through hospitalized patients’ formularies to insure they can afford the drugs they need upon discharge—so they won’t end up back in the hospital. TH

Bryn Nelson is a freelance medical writer based in Seattle.

After being relegated to the back burner for months, tort reform has begun bubbling to the surface in editorials, polls, and at last month's televised healthcare summit. The focus has largely remained on how states can rein in unnecessary and expensive medical malpractice lawsuits. But a recent court case in Illinois, a new poll suggesting a high prevalence of "defensive medicine", and the glimmer of a bipartisan proposal for special "health courts" might provide the impetus for reform at the federal level.

According to the Agency for Healthcare Research and Quality (AHRQ), about half of the states have some form of medical liability caps on noneconomic damages or total damages, though the courts haven't always gone along with the limits. Last month, the Illinois Supreme Court ruled that the state's 2005 medical liability cap of $500,000 for doctors and $1 million for hospitals was unconstitutional. In a March 1 editorial, the AMA vowed to fight on, highlighting the positive experiences of tort reform in Texas.

As the "Public Policy" column in the March issue of The Hospitalist suggests, the liability caps approved by Texas voters in 2003 have led to decreases in liability insurance premiums and helped mitigate the state's physician shortage. But the jury is still out on whether the reforms have helped to improve quality and patient access.

Despite the reluctance of many Democrats to pursue liability caps, the concept of health courts has attracted some bipartisan support and the backing of President Obama. As proposed, such courts would consider only medical malpractice cases, similar to the workers' compensation system. A March 2 editorial in Roll Call by analysts at Washington, D.C., think tank Third Way asserts that health courts "can serve as the backbone for fundamental malpractice reform." Whether legislators will support a strong, single spine or more fragmented, state-based systems, however, remains to be seen.

After being relegated to the back burner for months, tort reform has begun bubbling to the surface in editorials, polls, and at last month's televised healthcare summit. The focus has largely remained on how states can rein in unnecessary and expensive medical malpractice lawsuits. But a recent court case in Illinois, a new poll suggesting a high prevalence of "defensive medicine", and the glimmer of a bipartisan proposal for special "health courts" might provide the impetus for reform at the federal level.

According to the Agency for Healthcare Research and Quality (AHRQ), about half of the states have some form of medical liability caps on noneconomic damages or total damages, though the courts haven't always gone along with the limits. Last month, the Illinois Supreme Court ruled that the state's 2005 medical liability cap of $500,000 for doctors and $1 million for hospitals was unconstitutional. In a March 1 editorial, the AMA vowed to fight on, highlighting the positive experiences of tort reform in Texas.

As the "Public Policy" column in the March issue of The Hospitalist suggests, the liability caps approved by Texas voters in 2003 have led to decreases in liability insurance premiums and helped mitigate the state's physician shortage. But the jury is still out on whether the reforms have helped to improve quality and patient access.

Despite the reluctance of many Democrats to pursue liability caps, the concept of health courts has attracted some bipartisan support and the backing of President Obama. As proposed, such courts would consider only medical malpractice cases, similar to the workers' compensation system. A March 2 editorial in Roll Call by analysts at Washington, D.C., think tank Third Way asserts that health courts "can serve as the backbone for fundamental malpractice reform." Whether legislators will support a strong, single spine or more fragmented, state-based systems, however, remains to be seen.

After being relegated to the back burner for months, tort reform has begun bubbling to the surface in editorials, polls, and at last month's televised healthcare summit. The focus has largely remained on how states can rein in unnecessary and expensive medical malpractice lawsuits. But a recent court case in Illinois, a new poll suggesting a high prevalence of "defensive medicine", and the glimmer of a bipartisan proposal for special "health courts" might provide the impetus for reform at the federal level.

According to the Agency for Healthcare Research and Quality (AHRQ), about half of the states have some form of medical liability caps on noneconomic damages or total damages, though the courts haven't always gone along with the limits. Last month, the Illinois Supreme Court ruled that the state's 2005 medical liability cap of $500,000 for doctors and $1 million for hospitals was unconstitutional. In a March 1 editorial, the AMA vowed to fight on, highlighting the positive experiences of tort reform in Texas.

As the "Public Policy" column in the March issue of The Hospitalist suggests, the liability caps approved by Texas voters in 2003 have led to decreases in liability insurance premiums and helped mitigate the state's physician shortage. But the jury is still out on whether the reforms have helped to improve quality and patient access.

Despite the reluctance of many Democrats to pursue liability caps, the concept of health courts has attracted some bipartisan support and the backing of President Obama. As proposed, such courts would consider only medical malpractice cases, similar to the workers' compensation system. A March 2 editorial in Roll Call by analysts at Washington, D.C., think tank Third Way asserts that health courts "can serve as the backbone for fundamental malpractice reform." Whether legislators will support a strong, single spine or more fragmented, state-based systems, however, remains to be seen.

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

Advocates have written open letters to politicians describing it as “the least-expensive and best-known way to lower healthcare costs.” Detractors have blogged that it has saved almost no money and instead “gutted patient rights.” Among the recent templates for whether and how to proceed on the contentious issue of tort reform, Texas has become a prime example of either the wisdom or the folly of capping medical liability payouts, depending on your vantage point.

Tort reform is backed by most doctors and the insurance industry but opposed by lawyers and consumer advocates. The Congressional Budget Office has documented increases in both medical liability premiums and average malpractice claim payments that have significantly outpaced inflation. Congress itself has largely punted on the issue, however, leaving most of the wrangling over specifics to individual states.

Which brings us to Texas. In reaction to the perception that unsustainable medical liability costs were driving away doctors and driving up healthcare costs, state voters in 2003 approved Proposition 12. Among its provisions, the state constitutional amendment capped noneconomic medical liability payouts at $250,000 in nearly all cases.

Much of the ensuing debate over whether Texas did the right thing has focused on cost: For example, will the reduction in malpractice claims translate into significant savings within the healthcare system? Is tort reform relevant in recouping the perceived waste from “defensive medicine,” in which physicians are presumed to order unnecessary tests and procedures out of fear of lawsuits?

More centrally, however, the question boils down to this: Does tort reform improve the ability of doctors to do their jobs, and the opportunity for patients to benefit from that care? So far, statistics, reports, and anecdotal information suggest that Texas has achieved the first goal but not necessarily the latter, highlighting the extreme difficulty in striking the right balance.

Mission: Predictable

Kirk A. Calhoun, MD, who became president of the University of Texas Health Science Center at Tyler in 2002, points to two principal benefits of the state’s tort reform. First, the package of reforms led to a significant number of physicians migrating to Texas and helping to deal with the state’s chronic doctor shortage. For doctors, part of that attraction was the second big benefit, a significant decrease in liability insurance premiums.

“It has resulted in making Texas a more attractive state in which to practice medicine,” Dr. Calhoun says. “As a result of those expenses going down, we are able to better invest in our primary mission, and on patient care.”

Kenneth McDaniel, a program specialist in professional liability in the Texas Department of Insurance, says the dearth of affordable or available malpractice insurance in the state had spiraled into a crisis. “In Texas, we were staring at the brink of a chasm so deep that we virtually had to do something,” he says. “We were within probably some months or a year of having almost no malpractice insurance industry at all. It had become very dire.”

McDaniel stresses that the new liability cap is only for intangibles or pain and suffering, and it leaves intact the potential for higher economic damages. “But those can be predicted,” he says. “As soon as claims became more predictable, insurers started coming back into the field.” A summary of 17 companies’ rates supplied by McDaniel includes four new arrivals to the medical liability market and the return of a fifth.

At the very least, tort reform appears to have dramatically curbed the number and cost of claims in Texas. From 2003 to 2007, malpractice payments to patients dropped by two-thirds. Liability premiums paid by doctors also have fallen, by an average of 27.5%, and more insurers have rejoined the market. “We are now back to, I would say, a pretty healthy environment,” McDaniel says.

Physician-Friendly Environs

Hospitalist Gregory Johnson, MD, chair of the Texas Medical Association’s Young Physicians Section, moved to Texas in 2002, just before the reforms were approved. “The best part about Prop 12 passing is the fact that Texas is now seen as a very physician-friendly environment,” says Johnson, who now serves as a Houston-based regional chief medical officer for Tacoma, Wash.-based Sound Physicians. The significant drops in malpractice insurance rates and lawsuits have made it far easier for him to recruit out-of-state doctors. “That basically comes off any physician’s radar as a particular concern.”

Most Texas hospitals and healthcare systems do not employ physicians directly. Instead, they contract or affiliate with private or nonprofit physicians groups. Due to that arrangement, Dr. Johnson explains, the cost of insurance premiums “becomes a much more individually based and personal issue because it’s coming out of an individual’s pocket, or a group’s pocket.”

From his own experience, Dr. Johnson says, he believes hospitalists are more willing to go to underserved parts of the state because of tort reform. Three years ago, he helped start Amarillo Hospitalist Services, a program that began with three doctors and has since grown to eight, all affiliated with Northwest Texas Hospital.

Of course, hospitalists appear to be thriving in major metropolitan areas, too. Dr. Johnson’s new employer, Sound Physicians, now operates three HM programs within Houston’s Memorial Hermann Healthcare System and employs about two-dozen physicians in all. More are on the way. “We’re actively hiring,” he says.

Mixed Outcomes

Statistics from the Texas Medical Board and Department of State Health Services confirm the anecdotal evidence that a more doctor-friendly Texas is paying dividends. Even so, they paint a somewhat more complicated picture than some commentators have portrayed in recent editorials. Doctors have indeed flocked to the state—some 11,000 since 2002 alone, an increase of 31%. That rate has far outpaced the state’s overall population growth of 14.2%.

But not all areas of the state have benefited equally from the influx.

Starr County, the third-poorest county in the U.S. based on per capita income, is among those that have fared well since 2002. Overall, its number of doctors increased from 14 to 24, a net increase of 71%, as its population rose by a projected 17%. But the next five poorest counties in Texas, accounting for nearly 86,000 residents in 2002, lost six doctors during the same time period—a 12.5% decline, even as their collective population rose by a projected 10.2%. Contrary to some public pronouncements, tort reform alone has not solved the chronic shortage of doctors in poor rural areas.

A withering report released in December by Washington, D.C.-based Public Citizen, a nonprofit consumer advocacy group, offers a harsher assessment, concluding that Texas’ “experiment with medical liability caps has failed” (www.citizen.org/publications/release.cfm?ID=7721). The report suggests that Texas’ dead-last ranking in percentage of uninsured residents (25%) and the doctor shortage in rural areas have actually grown worse since tort reform. Meanwhile, the cost of health insurance has more than doubled, while the cost of healthcare also has increased at nearly double the national average, other metrics that led to the organization’s vote of no confidence.

The impact on quality of care has been harder to assess. But Dr. Johnson and other observers say they haven’t seen any dip within hospitals. “I think that we as physicians and we as hospitalists really want to focus on our patients, and we can help to drive down those costs if we’re given the freedom to do our job,” he says. Tort reform, he adds, has helped doctors do precisely that.

Dr. Calhoun agrees. “No one wants to be sued. Everyone wants to do a good job,” he says. The threat of a lawsuit alone is only one of many factors influencing quality, he adds. But creating a more inviting environment for doctors can make a big difference by encouraging the increased use of hospitalists. “Having a hospitalist in the hospital all the time,” he says, “is an obvious quality improvement.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

IMAGE SOURCE: DRASCHWARTZ/ISTOCK.COM

Rising pressure to contain healthcare costs, increasing demands for safety and quality improvement, more focus on institutional accountability: In 2010, healthcare experts expect several dominant themes to continue converging and moving hospitalists even more to the center of key policy debates.

Peter Pronovost, MD, PhD, medical director of the Center for Innovation in Quality Patient Care and director of the Quality and Safety Research Group at Johns Hopkins University in Baltimore, sees three big themes moving to the fore. One is a greater focus on outcome measurements and accountability for performance, and he expects both carrots and sticks to be wielded. “So, both payment reform and social humiliation, or making things public,” Dr. Pronovost says. “Two, I see a lot more focus on measures that are population-based rather than hospital-based, so looking more at episodes of care.” The shift will force hospitalists to expand their purview beyond the hospital and, he says, partner more with community physicians to develop and monitor performance in such areas as transitions of care and general benchmarks of care.

Dr. Pronovost also expects “significant pressure on both the provider organization and individual clinician being paid less for what they do.” Finding ways to minimize costs will be a priority as payors increase scrutiny on expenses like unnecessary hospital readmissions. But hospitalists, he says, are better positioned than many other physicians to play a key role in the drive toward efficiency while also improving healthcare quality and safety. “I think hospitalists’ roles are going to go up dramatically,” Dr. Pronovost adds, “and I hope the field responds by making sure they put out people who have the skills to lead.”

End-of-Life Issues

Nancy Berlinger, PhD, deputy director and research scholar at The Hastings Center in Garrison, N.Y., cites end-of-life care as another theme likely to gain traction in 2010. As project director of the center’s revised ethical guidelines for end-of-life care, Dr. Berlinger notes how often clinicians in her working group have invoked the hospitalist profession. It’s no accident. “Hospitalists are increasingly associated with the care of patients on Medicare,” she says, adding Medicare beneficiaries are far more likely to be nearing the end of life.

Demographics suggest that connection will continue to grow in 2010 and beyond. Dr. Berlinger points to a 2009 New England Journal of Medicine study showing that the odds of a hospitalized Medicare patient receiving care from a hospitalist increased at a brisk 29.2% annual clip from 1997 through 2006.1 And while the U.S. faces a shortage of geriatricians, HM is growing rapidly as a medical profession. “By default, whether or not hospitalists self-identify as caring for older Americans,” Dr. Berlinger says, “this is their area of practical specialization.”

With that specialization comes added responsibility to assist with advanced-care planning and helping patients to document their wishes. Similarly, she says, it means acknowledging that these patients are more likely to have comorbid conditions and identify with goals of care. “I don’t think there’s any way around this,” she says. “Medicare and hospitalists, whether by accident or design, are increasingly joined at the hip. That is something that hospitalists, as a profession, will always need to keep their eye on.”

A parallel trend is that other doctors increasingly view hospitalists as hospital specialists. “The hospitalist’s responsibilities are not just in terms of the patients they care for, but also in terms of the institution itself,” Dr. Berlinger says. Non-staff physicians, for example, expect hospitalists to know how a hospital’s in-patient care system works. Practically speaking, as electronic medical records (EMR) become more commonplace, hospitalists will be increasingly relied upon to understand a hospital’s information technology.

New Economy, New Hospital Landscape

Douglas Wood, MD, chair of the Division of Health Care Policy and Research at the Mayo Clinic in Rochester, Minn., points to language in the federal healthcare reform legislation as evidence that hospitals and hospitalists will need to be in sync in other ways to avoid future penalties. One provision, for example, would increase the penalties for hospital-acquired infections. Other language seeks to reduce unnecessary readmissions.

Likewise, Dr. Wood says, addressing geographical variations in healthcare payments driven largely by unnecessary overutilization—including excessive use of ICU care, in-patient care, imaging, and specialist services—might mean asking hospitalists to take on more aspects of patient care.

Meanwhile, increased interest in demonstration projects that might achieve savings (e.g., accountable care organizations and bundled payments) suggests that proactive hospitals should again look to hospitalists. The flurry of new proposals won’t fundamentally change hospitalists’ responsibilities to provide effective and efficient care, “but it will put more emphasis on what they’re doing,” Dr. Wood says, “to the degree that hospitalists could take a lead in demonstrating how you can provide better outcomes at a lower overall utilization of resources.”

Regardless of how slowly or quickly these initiatives proceed at the national level, he says, hospitalists should be mindful that several states are well ahead of the curve and are likely to be more aggressive in instituting policy changes.

The Bottom Line

If there’s a single, overriding theme for 2010, Bradley Flansbaum, DO, MPH, FACP, FHM, director of hospitalist services at Lenox Hill Hospital in New York City and a member of SHM’s Public Policy Committee, says it might be that of dealing with the unknown. Squeezing healthcare costs and more tightly regulating inflation will have a greater effect on a hospital’s bottom line and thus impact what’s required of hospitalists. Even so, the profession will have to wait and see whether and how various proposals are codified and implemented. “We don’t know exactly what things are going to look like,” he says.

Nor is there a good sense of how new standards for transparency, quality, and accountability might be measured. “While people want more measurement and they want more report-card-type information, the data that we can acquire right now and how we analyze that data are still fairly primitive,” Dr. Flansbaum says. Even current benchmarks are lacking in how to determine who’s doing a good job and who isn’t, he says.

One big question that must be answered, then: Are we even looking at the right measurements? “Or, do the right measurements exist, or do we have the databases, the registries, the sources, to make the decisions we need to make?” he says.

Any new proposals will require another round of such questions and filling-in of blanks to add workable details to vague and potentially confusing language.

“I think we know that change is afoot, and most smart hospitalists know that the system needs to run leaner,” Dr. Flansbaum says. “But how each one of us is going to function in our hospital, and the kinds of demands that will be placed on us, and what we’re going to need to do with the doctors in the community and the other nonphysician colleagues that we work with, is all really unknown.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

Reference

1. Kuo YF, Sharma G, Freeman JL, Goodwin JS. Growth in the care of older patients by hospitalists in the United States. N Engl J Med. 2009;360(11): 1102-1112.

Image Source: PAGADESIGN, OVERSNAP/ISTOCKPHOTO.COM

Rising pressure to contain healthcare costs, increasing demands for safety and quality improvement, more focus on institutional accountability: In 2010, healthcare experts expect several dominant themes to continue converging and moving hospitalists even more to the center of key policy debates.

Peter Pronovost, MD, PhD, medical director of the Center for Innovation in Quality Patient Care and director of the Quality and Safety Research Group at Johns Hopkins University in Baltimore, sees three big themes moving to the fore. One is a greater focus on outcome measurements and accountability for performance, and he expects both carrots and sticks to be wielded. “So, both payment reform and social humiliation, or making things public,” Dr. Pronovost says. “Two, I see a lot more focus on measures that are population-based rather than hospital-based, so looking more at episodes of care.” The shift will force hospitalists to expand their purview beyond the hospital and, he says, partner more with community physicians to develop and monitor performance in such areas as transitions of care and general benchmarks of care.

Dr. Pronovost also expects “significant pressure on both the provider organization and individual clinician being paid less for what they do.” Finding ways to minimize costs will be a priority as payors increase scrutiny on expenses like unnecessary hospital readmissions. But hospitalists, he says, are better positioned than many other physicians to play a key role in the drive toward efficiency while also improving healthcare quality and safety. “I think hospitalists’ roles are going to go up dramatically,” Dr. Pronovost adds, “and I hope the field responds by making sure they put out people who have the skills to lead.”

End-of-Life Issues

Nancy Berlinger, PhD, deputy director and research scholar at The Hastings Center in Garrison, N.Y., cites end-of-life care as another theme likely to gain traction in 2010. As project director of the center’s revised ethical guidelines for end-of-life care, Dr. Berlinger notes how often clinicians in her working group have invoked the hospitalist profession. It’s no accident. “Hospitalists are increasingly associated with the care of patients on Medicare,” she says, adding Medicare beneficiaries are far more likely to be nearing the end of life.

Demographics suggest that connection will continue to grow in 2010 and beyond. Dr. Berlinger points to a 2009 New England Journal of Medicine study showing that the odds of a hospitalized Medicare patient receiving care from a hospitalist increased at a brisk 29.2% annual clip from 1997 through 2006.1 And while the U.S. faces a shortage of geriatricians, HM is growing rapidly as a medical profession. “By default, whether or not hospitalists self-identify as caring for older Americans,” Dr. Berlinger says, “this is their area of practical specialization.”

With that specialization comes added responsibility to assist with advanced-care planning and helping patients to document their wishes. Similarly, she says, it means acknowledging that these patients are more likely to have comorbid conditions and identify with goals of care. “I don’t think there’s any way around this,” she says. “Medicare and hospitalists, whether by accident or design, are increasingly joined at the hip. That is something that hospitalists, as a profession, will always need to keep their eye on.”

A parallel trend is that other doctors increasingly view hospitalists as hospital specialists. “The hospitalist’s responsibilities are not just in terms of the patients they care for, but also in terms of the institution itself,” Dr. Berlinger says. Non-staff physicians, for example, expect hospitalists to know how a hospital’s in-patient care system works. Practically speaking, as electronic medical records (EMR) become more commonplace, hospitalists will be increasingly relied upon to understand a hospital’s information technology.

New Economy, New Hospital Landscape

Douglas Wood, MD, chair of the Division of Health Care Policy and Research at the Mayo Clinic in Rochester, Minn., points to language in the federal healthcare reform legislation as evidence that hospitals and hospitalists will need to be in sync in other ways to avoid future penalties. One provision, for example, would increase the penalties for hospital-acquired infections. Other language seeks to reduce unnecessary readmissions.

Likewise, Dr. Wood says, addressing geographical variations in healthcare payments driven largely by unnecessary overutilization—including excessive use of ICU care, in-patient care, imaging, and specialist services—might mean asking hospitalists to take on more aspects of patient care.

Meanwhile, increased interest in demonstration projects that might achieve savings (e.g., accountable care organizations and bundled payments) suggests that proactive hospitals should again look to hospitalists. The flurry of new proposals won’t fundamentally change hospitalists’ responsibilities to provide effective and efficient care, “but it will put more emphasis on what they’re doing,” Dr. Wood says, “to the degree that hospitalists could take a lead in demonstrating how you can provide better outcomes at a lower overall utilization of resources.”

Regardless of how slowly or quickly these initiatives proceed at the national level, he says, hospitalists should be mindful that several states are well ahead of the curve and are likely to be more aggressive in instituting policy changes.

The Bottom Line

If there’s a single, overriding theme for 2010, Bradley Flansbaum, DO, MPH, FACP, FHM, director of hospitalist services at Lenox Hill Hospital in New York City and a member of SHM’s Public Policy Committee, says it might be that of dealing with the unknown. Squeezing healthcare costs and more tightly regulating inflation will have a greater effect on a hospital’s bottom line and thus impact what’s required of hospitalists. Even so, the profession will have to wait and see whether and how various proposals are codified and implemented. “We don’t know exactly what things are going to look like,” he says.

Nor is there a good sense of how new standards for transparency, quality, and accountability might be measured. “While people want more measurement and they want more report-card-type information, the data that we can acquire right now and how we analyze that data are still fairly primitive,” Dr. Flansbaum says. Even current benchmarks are lacking in how to determine who’s doing a good job and who isn’t, he says.

One big question that must be answered, then: Are we even looking at the right measurements? “Or, do the right measurements exist, or do we have the databases, the registries, the sources, to make the decisions we need to make?” he says.

Any new proposals will require another round of such questions and filling-in of blanks to add workable details to vague and potentially confusing language.

“I think we know that change is afoot, and most smart hospitalists know that the system needs to run leaner,” Dr. Flansbaum says. “But how each one of us is going to function in our hospital, and the kinds of demands that will be placed on us, and what we’re going to need to do with the doctors in the community and the other nonphysician colleagues that we work with, is all really unknown.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

Reference

1. Kuo YF, Sharma G, Freeman JL, Goodwin JS. Growth in the care of older patients by hospitalists in the United States. N Engl J Med. 2009;360(11): 1102-1112.

Image Source: PAGADESIGN, OVERSNAP/ISTOCKPHOTO.COM

Rising pressure to contain healthcare costs, increasing demands for safety and quality improvement, more focus on institutional accountability: In 2010, healthcare experts expect several dominant themes to continue converging and moving hospitalists even more to the center of key policy debates.

Peter Pronovost, MD, PhD, medical director of the Center for Innovation in Quality Patient Care and director of the Quality and Safety Research Group at Johns Hopkins University in Baltimore, sees three big themes moving to the fore. One is a greater focus on outcome measurements and accountability for performance, and he expects both carrots and sticks to be wielded. “So, both payment reform and social humiliation, or making things public,” Dr. Pronovost says. “Two, I see a lot more focus on measures that are population-based rather than hospital-based, so looking more at episodes of care.” The shift will force hospitalists to expand their purview beyond the hospital and, he says, partner more with community physicians to develop and monitor performance in such areas as transitions of care and general benchmarks of care.

Dr. Pronovost also expects “significant pressure on both the provider organization and individual clinician being paid less for what they do.” Finding ways to minimize costs will be a priority as payors increase scrutiny on expenses like unnecessary hospital readmissions. But hospitalists, he says, are better positioned than many other physicians to play a key role in the drive toward efficiency while also improving healthcare quality and safety. “I think hospitalists’ roles are going to go up dramatically,” Dr. Pronovost adds, “and I hope the field responds by making sure they put out people who have the skills to lead.”

End-of-Life Issues

Nancy Berlinger, PhD, deputy director and research scholar at The Hastings Center in Garrison, N.Y., cites end-of-life care as another theme likely to gain traction in 2010. As project director of the center’s revised ethical guidelines for end-of-life care, Dr. Berlinger notes how often clinicians in her working group have invoked the hospitalist profession. It’s no accident. “Hospitalists are increasingly associated with the care of patients on Medicare,” she says, adding Medicare beneficiaries are far more likely to be nearing the end of life.

Demographics suggest that connection will continue to grow in 2010 and beyond. Dr. Berlinger points to a 2009 New England Journal of Medicine study showing that the odds of a hospitalized Medicare patient receiving care from a hospitalist increased at a brisk 29.2% annual clip from 1997 through 2006.1 And while the U.S. faces a shortage of geriatricians, HM is growing rapidly as a medical profession. “By default, whether or not hospitalists self-identify as caring for older Americans,” Dr. Berlinger says, “this is their area of practical specialization.”

With that specialization comes added responsibility to assist with advanced-care planning and helping patients to document their wishes. Similarly, she says, it means acknowledging that these patients are more likely to have comorbid conditions and identify with goals of care. “I don’t think there’s any way around this,” she says. “Medicare and hospitalists, whether by accident or design, are increasingly joined at the hip. That is something that hospitalists, as a profession, will always need to keep their eye on.”

A parallel trend is that other doctors increasingly view hospitalists as hospital specialists. “The hospitalist’s responsibilities are not just in terms of the patients they care for, but also in terms of the institution itself,” Dr. Berlinger says. Non-staff physicians, for example, expect hospitalists to know how a hospital’s in-patient care system works. Practically speaking, as electronic medical records (EMR) become more commonplace, hospitalists will be increasingly relied upon to understand a hospital’s information technology.

New Economy, New Hospital Landscape

Douglas Wood, MD, chair of the Division of Health Care Policy and Research at the Mayo Clinic in Rochester, Minn., points to language in the federal healthcare reform legislation as evidence that hospitals and hospitalists will need to be in sync in other ways to avoid future penalties. One provision, for example, would increase the penalties for hospital-acquired infections. Other language seeks to reduce unnecessary readmissions.

Likewise, Dr. Wood says, addressing geographical variations in healthcare payments driven largely by unnecessary overutilization—including excessive use of ICU care, in-patient care, imaging, and specialist services—might mean asking hospitalists to take on more aspects of patient care.

Meanwhile, increased interest in demonstration projects that might achieve savings (e.g., accountable care organizations and bundled payments) suggests that proactive hospitals should again look to hospitalists. The flurry of new proposals won’t fundamentally change hospitalists’ responsibilities to provide effective and efficient care, “but it will put more emphasis on what they’re doing,” Dr. Wood says, “to the degree that hospitalists could take a lead in demonstrating how you can provide better outcomes at a lower overall utilization of resources.”

Regardless of how slowly or quickly these initiatives proceed at the national level, he says, hospitalists should be mindful that several states are well ahead of the curve and are likely to be more aggressive in instituting policy changes.

The Bottom Line

If there’s a single, overriding theme for 2010, Bradley Flansbaum, DO, MPH, FACP, FHM, director of hospitalist services at Lenox Hill Hospital in New York City and a member of SHM’s Public Policy Committee, says it might be that of dealing with the unknown. Squeezing healthcare costs and more tightly regulating inflation will have a greater effect on a hospital’s bottom line and thus impact what’s required of hospitalists. Even so, the profession will have to wait and see whether and how various proposals are codified and implemented. “We don’t know exactly what things are going to look like,” he says.

Nor is there a good sense of how new standards for transparency, quality, and accountability might be measured. “While people want more measurement and they want more report-card-type information, the data that we can acquire right now and how we analyze that data are still fairly primitive,” Dr. Flansbaum says. Even current benchmarks are lacking in how to determine who’s doing a good job and who isn’t, he says.

One big question that must be answered, then: Are we even looking at the right measurements? “Or, do the right measurements exist, or do we have the databases, the registries, the sources, to make the decisions we need to make?” he says.

Any new proposals will require another round of such questions and filling-in of blanks to add workable details to vague and potentially confusing language.

“I think we know that change is afoot, and most smart hospitalists know that the system needs to run leaner,” Dr. Flansbaum says. “But how each one of us is going to function in our hospital, and the kinds of demands that will be placed on us, and what we’re going to need to do with the doctors in the community and the other nonphysician colleagues that we work with, is all really unknown.” TH

Bryn Nelson is a freelance medical writer based in Seattle.

Reference

1. Kuo YF, Sharma G, Freeman JL, Goodwin JS. Growth in the care of older patients by hospitalists in the United States. N Engl J Med. 2009;360(11): 1102-1112.

Image Source: PAGADESIGN, OVERSNAP/ISTOCKPHOTO.COM

No one can call 2009 a dull year for healthcare policy. And 2010 already is shaping up as another humdinger, with several issues bubbling to the surface. One of the biggest comes courtesy of the Dartmouth Atlas of Health Care (www.dartmouthatlas.org), as politicians, analysts, researchers, and physicians grapple over how to resolve the contentious issue of geographical disparities in healthcare spending.

One of the main bodies of evidence driving the debate, the interactive Dartmouth map, depicts a color-coded nation in which wide swaths of the Midwest and West are colored with a pale green hue, which represents a significantly reduced amount of Medicare reimbursements. Meanwhile, states such as New York, New Jersey, Massachusetts, Florida, Texas, and Louisiana are marked by a darker shade of green—representing the nation’s most expensive per capita reimbursement rates.

Tucked within 2009’s massive Affordable Health Care for America Act passed by the House is a provision calling for a study of “geographic variation in healthcare spending and promoting high-value healthcare,” which is aiming for a more evenly colored landscape.

More than 50 legislators, hailing primarily from the Midwest and Pacific Northwest and calling themselves the Quality Care Coalition, pushed through the wording as a condition for supporting the larger healthcare reform bill. One measure would direct the nonpartisan Institute of Medicine (IOM) to check the accuracy of the geographic adjustment factors that underlie existing Medicare reimbursements and suggest necessary revisions. The second would call upon the IOM “to conduct a study on geographic variation and growth in volume and intensity of services in per capita healthcare spending among the Medicare, Medicaid, privately insured, and uninsured populations.”

Recommendations to Secretary of Health and Human Services Kathleen Sebelius as a result of that study would go into effect unless the House and Senate passed a joint resolution of disapproval with a two-thirds vote.

Reimbursement Battles

The implicit message is that some states, cities, and health providers have been shortchanged in their reimbursements—a complaint that flows into the larger meme that the country’s dysfunctional payment system rewards quantity, not quality. Officials at the Mayo Clinic in Rochester, Minn., have suggested in media accounts that the current Medicare formula cost the clinic $840 million in lost reimbursements in 2008 alone.

Rep. Jay Inslee (D-Washington), whose district lies northwest of Seattle, served as one of the lead negotiators on the issue. According to Inslee spokesman Robert Kellar, the geographical disparity in healthcare spending has been a perennial concern for the Washington delegation due to reimbursement rates that lag by as much as 50%, depending on the procedure. “Hospitals haven’t been able to keep or attract the personnel that they could have because of this issue,” Kellar says. In Washington state, per capita Medicare reimbursements in 2006 hovered about $1,200 below the national average, though 15 other states, led by Hawaii, received even less.

Despite the specter of a skirmish between urban and rural states and hospitals, however, the Dartmouth Atlas suggests that many disparities are more geographically nuanced. In 2006, for example, the Miami hospital referral region received more than $16,300 in Medicare reimbursements per enrollee, while nearby Fort Lauderdale received $9,800 and Atlanta less than $7,400. By comparison, New York netted $12,100, Seattle received $7,200, Rochester, Minn., received $6,700, and Honolulu was reimbursed only $5,300.

Representatives of higher-spending areas have complained that the atlas doesn’t tell the whole story—that steep living costs, poorer populations seeking medical care, and infrastructure necessary for teaching institutions can drive up Medicare expenses. As part of a compromise negotiated with the Quality Care Coalition, the examination of per capita spending will not include expenses related to graduate medical education, disproportionate share hospital (DSH) payments, and health information technology.

In attempting to get at the source of remaining cost disparities, however, the IOM has been charged with considering such factors as a local population’s relative health and socioeconomic status (race, ethnicity, gender, age, income, and education). The study will scrutinize healthcare providers’ organizational models, practice patterns, healthcare outcomes, quality benchmarks, and doctors’ discretion in making treatment decisions, among other criteria.

Differences of Opinion

Dylan Roby, an assistant professor at the UCLA Center for Health Policy Research, says the general expectation among healthcare analysts is that significant differences will remain even with additional sophisticated modeling techniques. “The main hypothesis by most people in the field is that it’s differences in practice patterns that are really driving this, not differences in need or differences in disease burden,” he says.

But what about outcomes? A recent study of heart failure patients at six California hospitals seemed to throw cold water on the notion that higher resource use doesn’t equate with better results with patients.1 The study found more treatment did lead to higher odds of survival.

Roby thinks the study’s results lay the framework for looking at hospital-to-hospital differences in how providers deliver care and allocate resources, but he cautions that they shouldn’t be overanalyzed. All six of the California hospitals in the study are linked to universities and have ample access to resources, he points out.

HM at the Forefront

As for hospitalists, Roby hopes they will be increasingly called upon as focal points for improving efficiencies within provider networks. He concedes that plenty of challenges remain: An institution’s internal politics, for instance, could stymie even the most efficient and proactive physician. Even so, Roby is hopeful that an independent study could at least spur a dialogue about best practices. “I think what the study could potentially do, rather than just act as a way to penalize hospitals that might not be efficient with care, is really offer the ability for us to look at the characteristics of hospitals, in terms of how the care is delivered,” he says.

Ideally, the ability to learn would be followed by the impetus to change. But as analysts have noted, a panel’s recommendations on how to improve healthcare delivery don’t always neatly translate into federal policy.

Consider November’s uproar over mammogram recommendations. When the 16-member U.S. Preventive Services Task Force recommended that women wait until age 50 for routine mammograms instead of starting the screening process at 40, in large part to prevent overtreatment, the fallout was fast and furious. Sebelius quickly signaled in a strongly worded statement that federal policy wasn’t about to change, despite the evidence-based conclusions of a panel convened by her department’s Agency for Healthcare Research and Quality. A group of Republican legislators decried the recommendation as evidence of bureaucrats intruding on healthcare decisions, and even Rep. Debbie Wasserman Schulz (D-Florida), herself a breast-cancer survivor, called the panel’s recommendations “disturbing” and considered Congressional hearings.

The take-home message is readily transferrable to hospitalists: The perception that patients might receive less care can spark public upheaval and force policy makers to beat a hasty retreat away from evidence-based medicine.

Despite the best intentions, a federal panel’s recommendations over resolving geographical disparities in spending could unleash far more drama. Inevitably, such a study will identify both winners and losers, the latter of whom might not accept reduced payments willingly or quietly. TH

Bryn Nelson is a freelance writer based in Seattle.

Reference

1. Ellis SG, Miller D, Keys TF. Comparing physician-specific two-year patient outcomes after coronary angiography. J Am Coll Cardiol. 1999;33:1278-1285.

No one can call 2009 a dull year for healthcare policy. And 2010 already is shaping up as another humdinger, with several issues bubbling to the surface. One of the biggest comes courtesy of the Dartmouth Atlas of Health Care (www.dartmouthatlas.org), as politicians, analysts, researchers, and physicians grapple over how to resolve the contentious issue of geographical disparities in healthcare spending.

One of the main bodies of evidence driving the debate, the interactive Dartmouth map, depicts a color-coded nation in which wide swaths of the Midwest and West are colored with a pale green hue, which represents a significantly reduced amount of Medicare reimbursements. Meanwhile, states such as New York, New Jersey, Massachusetts, Florida, Texas, and Louisiana are marked by a darker shade of green—representing the nation’s most expensive per capita reimbursement rates.

Tucked within 2009’s massive Affordable Health Care for America Act passed by the House is a provision calling for a study of “geographic variation in healthcare spending and promoting high-value healthcare,” which is aiming for a more evenly colored landscape.

More than 50 legislators, hailing primarily from the Midwest and Pacific Northwest and calling themselves the Quality Care Coalition, pushed through the wording as a condition for supporting the larger healthcare reform bill. One measure would direct the nonpartisan Institute of Medicine (IOM) to check the accuracy of the geographic adjustment factors that underlie existing Medicare reimbursements and suggest necessary revisions. The second would call upon the IOM “to conduct a study on geographic variation and growth in volume and intensity of services in per capita healthcare spending among the Medicare, Medicaid, privately insured, and uninsured populations.”

Recommendations to Secretary of Health and Human Services Kathleen Sebelius as a result of that study would go into effect unless the House and Senate passed a joint resolution of disapproval with a two-thirds vote.

Reimbursement Battles

The implicit message is that some states, cities, and health providers have been shortchanged in their reimbursements—a complaint that flows into the larger meme that the country’s dysfunctional payment system rewards quantity, not quality. Officials at the Mayo Clinic in Rochester, Minn., have suggested in media accounts that the current Medicare formula cost the clinic $840 million in lost reimbursements in 2008 alone.

Rep. Jay Inslee (D-Washington), whose district lies northwest of Seattle, served as one of the lead negotiators on the issue. According to Inslee spokesman Robert Kellar, the geographical disparity in healthcare spending has been a perennial concern for the Washington delegation due to reimbursement rates that lag by as much as 50%, depending on the procedure. “Hospitals haven’t been able to keep or attract the personnel that they could have because of this issue,” Kellar says. In Washington state, per capita Medicare reimbursements in 2006 hovered about $1,200 below the national average, though 15 other states, led by Hawaii, received even less.

Despite the specter of a skirmish between urban and rural states and hospitals, however, the Dartmouth Atlas suggests that many disparities are more geographically nuanced. In 2006, for example, the Miami hospital referral region received more than $16,300 in Medicare reimbursements per enrollee, while nearby Fort Lauderdale received $9,800 and Atlanta less than $7,400. By comparison, New York netted $12,100, Seattle received $7,200, Rochester, Minn., received $6,700, and Honolulu was reimbursed only $5,300.

Representatives of higher-spending areas have complained that the atlas doesn’t tell the whole story—that steep living costs, poorer populations seeking medical care, and infrastructure necessary for teaching institutions can drive up Medicare expenses. As part of a compromise negotiated with the Quality Care Coalition, the examination of per capita spending will not include expenses related to graduate medical education, disproportionate share hospital (DSH) payments, and health information technology.

In attempting to get at the source of remaining cost disparities, however, the IOM has been charged with considering such factors as a local population’s relative health and socioeconomic status (race, ethnicity, gender, age, income, and education). The study will scrutinize healthcare providers’ organizational models, practice patterns, healthcare outcomes, quality benchmarks, and doctors’ discretion in making treatment decisions, among other criteria.

Differences of Opinion

Dylan Roby, an assistant professor at the UCLA Center for Health Policy Research, says the general expectation among healthcare analysts is that significant differences will remain even with additional sophisticated modeling techniques. “The main hypothesis by most people in the field is that it’s differences in practice patterns that are really driving this, not differences in need or differences in disease burden,” he says.

But what about outcomes? A recent study of heart failure patients at six California hospitals seemed to throw cold water on the notion that higher resource use doesn’t equate with better results with patients.1 The study found more treatment did lead to higher odds of survival.

Roby thinks the study’s results lay the framework for looking at hospital-to-hospital differences in how providers deliver care and allocate resources, but he cautions that they shouldn’t be overanalyzed. All six of the California hospitals in the study are linked to universities and have ample access to resources, he points out.

HM at the Forefront

As for hospitalists, Roby hopes they will be increasingly called upon as focal points for improving efficiencies within provider networks. He concedes that plenty of challenges remain: An institution’s internal politics, for instance, could stymie even the most efficient and proactive physician. Even so, Roby is hopeful that an independent study could at least spur a dialogue about best practices. “I think what the study could potentially do, rather than just act as a way to penalize hospitals that might not be efficient with care, is really offer the ability for us to look at the characteristics of hospitals, in terms of how the care is delivered,” he says.

Ideally, the ability to learn would be followed by the impetus to change. But as analysts have noted, a panel’s recommendations on how to improve healthcare delivery don’t always neatly translate into federal policy.

Consider November’s uproar over mammogram recommendations. When the 16-member U.S. Preventive Services Task Force recommended that women wait until age 50 for routine mammograms instead of starting the screening process at 40, in large part to prevent overtreatment, the fallout was fast and furious. Sebelius quickly signaled in a strongly worded statement that federal policy wasn’t about to change, despite the evidence-based conclusions of a panel convened by her department’s Agency for Healthcare Research and Quality. A group of Republican legislators decried the recommendation as evidence of bureaucrats intruding on healthcare decisions, and even Rep. Debbie Wasserman Schulz (D-Florida), herself a breast-cancer survivor, called the panel’s recommendations “disturbing” and considered Congressional hearings.

The take-home message is readily transferrable to hospitalists: The perception that patients might receive less care can spark public upheaval and force policy makers to beat a hasty retreat away from evidence-based medicine.

Despite the best intentions, a federal panel’s recommendations over resolving geographical disparities in spending could unleash far more drama. Inevitably, such a study will identify both winners and losers, the latter of whom might not accept reduced payments willingly or quietly. TH

Bryn Nelson is a freelance writer based in Seattle.

Reference

1. Ellis SG, Miller D, Keys TF. Comparing physician-specific two-year patient outcomes after coronary angiography. J Am Coll Cardiol. 1999;33:1278-1285.

No one can call 2009 a dull year for healthcare policy. And 2010 already is shaping up as another humdinger, with several issues bubbling to the surface. One of the biggest comes courtesy of the Dartmouth Atlas of Health Care (www.dartmouthatlas.org), as politicians, analysts, researchers, and physicians grapple over how to resolve the contentious issue of geographical disparities in healthcare spending.

One of the main bodies of evidence driving the debate, the interactive Dartmouth map, depicts a color-coded nation in which wide swaths of the Midwest and West are colored with a pale green hue, which represents a significantly reduced amount of Medicare reimbursements. Meanwhile, states such as New York, New Jersey, Massachusetts, Florida, Texas, and Louisiana are marked by a darker shade of green—representing the nation’s most expensive per capita reimbursement rates.

Tucked within 2009’s massive Affordable Health Care for America Act passed by the House is a provision calling for a study of “geographic variation in healthcare spending and promoting high-value healthcare,” which is aiming for a more evenly colored landscape.

More than 50 legislators, hailing primarily from the Midwest and Pacific Northwest and calling themselves the Quality Care Coalition, pushed through the wording as a condition for supporting the larger healthcare reform bill. One measure would direct the nonpartisan Institute of Medicine (IOM) to check the accuracy of the geographic adjustment factors that underlie existing Medicare reimbursements and suggest necessary revisions. The second would call upon the IOM “to conduct a study on geographic variation and growth in volume and intensity of services in per capita healthcare spending among the Medicare, Medicaid, privately insured, and uninsured populations.”

Recommendations to Secretary of Health and Human Services Kathleen Sebelius as a result of that study would go into effect unless the House and Senate passed a joint resolution of disapproval with a two-thirds vote.

Reimbursement Battles

The implicit message is that some states, cities, and health providers have been shortchanged in their reimbursements—a complaint that flows into the larger meme that the country’s dysfunctional payment system rewards quantity, not quality. Officials at the Mayo Clinic in Rochester, Minn., have suggested in media accounts that the current Medicare formula cost the clinic $840 million in lost reimbursements in 2008 alone.

Rep. Jay Inslee (D-Washington), whose district lies northwest of Seattle, served as one of the lead negotiators on the issue. According to Inslee spokesman Robert Kellar, the geographical disparity in healthcare spending has been a perennial concern for the Washington delegation due to reimbursement rates that lag by as much as 50%, depending on the procedure. “Hospitals haven’t been able to keep or attract the personnel that they could have because of this issue,” Kellar says. In Washington state, per capita Medicare reimbursements in 2006 hovered about $1,200 below the national average, though 15 other states, led by Hawaii, received even less.

Despite the specter of a skirmish between urban and rural states and hospitals, however, the Dartmouth Atlas suggests that many disparities are more geographically nuanced. In 2006, for example, the Miami hospital referral region received more than $16,300 in Medicare reimbursements per enrollee, while nearby Fort Lauderdale received $9,800 and Atlanta less than $7,400. By comparison, New York netted $12,100, Seattle received $7,200, Rochester, Minn., received $6,700, and Honolulu was reimbursed only $5,300.

Representatives of higher-spending areas have complained that the atlas doesn’t tell the whole story—that steep living costs, poorer populations seeking medical care, and infrastructure necessary for teaching institutions can drive up Medicare expenses. As part of a compromise negotiated with the Quality Care Coalition, the examination of per capita spending will not include expenses related to graduate medical education, disproportionate share hospital (DSH) payments, and health information technology.

In attempting to get at the source of remaining cost disparities, however, the IOM has been charged with considering such factors as a local population’s relative health and socioeconomic status (race, ethnicity, gender, age, income, and education). The study will scrutinize healthcare providers’ organizational models, practice patterns, healthcare outcomes, quality benchmarks, and doctors’ discretion in making treatment decisions, among other criteria.

Differences of Opinion

Dylan Roby, an assistant professor at the UCLA Center for Health Policy Research, says the general expectation among healthcare analysts is that significant differences will remain even with additional sophisticated modeling techniques. “The main hypothesis by most people in the field is that it’s differences in practice patterns that are really driving this, not differences in need or differences in disease burden,” he says.

But what about outcomes? A recent study of heart failure patients at six California hospitals seemed to throw cold water on the notion that higher resource use doesn’t equate with better results with patients.1 The study found more treatment did lead to higher odds of survival.

Roby thinks the study’s results lay the framework for looking at hospital-to-hospital differences in how providers deliver care and allocate resources, but he cautions that they shouldn’t be overanalyzed. All six of the California hospitals in the study are linked to universities and have ample access to resources, he points out.

HM at the Forefront

As for hospitalists, Roby hopes they will be increasingly called upon as focal points for improving efficiencies within provider networks. He concedes that plenty of challenges remain: An institution’s internal politics, for instance, could stymie even the most efficient and proactive physician. Even so, Roby is hopeful that an independent study could at least spur a dialogue about best practices. “I think what the study could potentially do, rather than just act as a way to penalize hospitals that might not be efficient with care, is really offer the ability for us to look at the characteristics of hospitals, in terms of how the care is delivered,” he says.

Ideally, the ability to learn would be followed by the impetus to change. But as analysts have noted, a panel’s recommendations on how to improve healthcare delivery don’t always neatly translate into federal policy.

Consider November’s uproar over mammogram recommendations. When the 16-member U.S. Preventive Services Task Force recommended that women wait until age 50 for routine mammograms instead of starting the screening process at 40, in large part to prevent overtreatment, the fallout was fast and furious. Sebelius quickly signaled in a strongly worded statement that federal policy wasn’t about to change, despite the evidence-based conclusions of a panel convened by her department’s Agency for Healthcare Research and Quality. A group of Republican legislators decried the recommendation as evidence of bureaucrats intruding on healthcare decisions, and even Rep. Debbie Wasserman Schulz (D-Florida), herself a breast-cancer survivor, called the panel’s recommendations “disturbing” and considered Congressional hearings.

The take-home message is readily transferrable to hospitalists: The perception that patients might receive less care can spark public upheaval and force policy makers to beat a hasty retreat away from evidence-based medicine.

Despite the best intentions, a federal panel’s recommendations over resolving geographical disparities in spending could unleash far more drama. Inevitably, such a study will identify both winners and losers, the latter of whom might not accept reduced payments willingly or quietly. TH

Bryn Nelson is a freelance writer based in Seattle.

Reference

1. Ellis SG, Miller D, Keys TF. Comparing physician-specific two-year patient outcomes after coronary angiography. J Am Coll Cardiol. 1999;33:1278-1285.

Congressional action has delayed a potentially devastating cut in Medicare physician reimbursements for at least two more months, while a separate attempt to delay the looming elimination of Medicare’s consultation billing codes now seems increasingly unlikely to succeed.

In November, the House of Representatives passed a bill that would have rescinded the 21.2% cut to Medicare’s physician fee schedule for 2010 (dictated by the current formula’s sustainable growth rate, or SGR). But the Senate balked at the expected $247 billion price tag, and was unable to muster enough votes to avert a filibuster.

Trying a different tack, House Democrats used the must-pass Defense appropriations bill to push through an amendment freezing Medicare payments at current levels through February, buying Congress more time to find a better solution. The Senate followed suit by approving the bill on Saturday, though a longer-term fix is still in flux. A joint letter by SHM, the American Medical Association (AMA), and other physicians groups calls for a permanent end to the SGR formula—a potentially contentious issue that will await Congress in 2010.

Meanwhile, a request from the AMA and other physician groups to delay the elimination of Medicare consultation codes for a year to allow more time for guidance and ironing out technical issues has yielded no guarantees from the Centers for Medicare and Medicaid Services (CMS). Sen. Arlen Specter (D-Penn.) had offered an amendment seeking such a delay to the Senate’s healthcare reform legislation, but a spokesperson from Spector's office said the amendment did not move forward with the Senate bill—an exclusion that now makes a last-minute reprieve unlikely.

In the interim, CMS has released a 29-page transmittal explaining how the eliminated codes will be replaced by existing evaluation and management codes. Click here to download a PDF of the transmittal.

Congressional action has delayed a potentially devastating cut in Medicare physician reimbursements for at least two more months, while a separate attempt to delay the looming elimination of Medicare’s consultation billing codes now seems increasingly unlikely to succeed.

In November, the House of Representatives passed a bill that would have rescinded the 21.2% cut to Medicare’s physician fee schedule for 2010 (dictated by the current formula’s sustainable growth rate, or SGR). But the Senate balked at the expected $247 billion price tag, and was unable to muster enough votes to avert a filibuster.

Trying a different tack, House Democrats used the must-pass Defense appropriations bill to push through an amendment freezing Medicare payments at current levels through February, buying Congress more time to find a better solution. The Senate followed suit by approving the bill on Saturday, though a longer-term fix is still in flux. A joint letter by SHM, the American Medical Association (AMA), and other physicians groups calls for a permanent end to the SGR formula—a potentially contentious issue that will await Congress in 2010.

Meanwhile, a request from the AMA and other physician groups to delay the elimination of Medicare consultation codes for a year to allow more time for guidance and ironing out technical issues has yielded no guarantees from the Centers for Medicare and Medicaid Services (CMS). Sen. Arlen Specter (D-Penn.) had offered an amendment seeking such a delay to the Senate’s healthcare reform legislation, but a spokesperson from Spector's office said the amendment did not move forward with the Senate bill—an exclusion that now makes a last-minute reprieve unlikely.

In the interim, CMS has released a 29-page transmittal explaining how the eliminated codes will be replaced by existing evaluation and management codes. Click here to download a PDF of the transmittal.

Congressional action has delayed a potentially devastating cut in Medicare physician reimbursements for at least two more months, while a separate attempt to delay the looming elimination of Medicare’s consultation billing codes now seems increasingly unlikely to succeed.

In November, the House of Representatives passed a bill that would have rescinded the 21.2% cut to Medicare’s physician fee schedule for 2010 (dictated by the current formula’s sustainable growth rate, or SGR). But the Senate balked at the expected $247 billion price tag, and was unable to muster enough votes to avert a filibuster.

Trying a different tack, House Democrats used the must-pass Defense appropriations bill to push through an amendment freezing Medicare payments at current levels through February, buying Congress more time to find a better solution. The Senate followed suit by approving the bill on Saturday, though a longer-term fix is still in flux. A joint letter by SHM, the American Medical Association (AMA), and other physicians groups calls for a permanent end to the SGR formula—a potentially contentious issue that will await Congress in 2010.

Meanwhile, a request from the AMA and other physician groups to delay the elimination of Medicare consultation codes for a year to allow more time for guidance and ironing out technical issues has yielded no guarantees from the Centers for Medicare and Medicaid Services (CMS). Sen. Arlen Specter (D-Penn.) had offered an amendment seeking such a delay to the Senate’s healthcare reform legislation, but a spokesperson from Spector's office said the amendment did not move forward with the Senate bill—an exclusion that now makes a last-minute reprieve unlikely.

In the interim, CMS has released a 29-page transmittal explaining how the eliminated codes will be replaced by existing evaluation and management codes. Click here to download a PDF of the transmittal.

The Mayo Clinic is technically one. So are Pennsylvania’s Geisinger Health System, California-based Kaiser Permanente, and the Cleveland Clinic. Beyond the handful of long-established and well-integrated sites being labeled as de facto accountable care organizations (ACOs), advocates are seizing the moment and pushing for a bold vision of what role ACOs will play in the movement to reform the healthcare payment system across the country. In at least two major pilot projects in the works, hospitalists are expected to be front and center in leading the transition.

An ACO is an agreed-upon group of providers bands together to assume joint responsibility for both the quality and cost of healthcare for a specific population of beneficiaries. “What an ACO is trying to do is defragment healthcare,” says Mark Werner, MD, chief medical officer for southwest Virginia’s Carilion Clinic. As long as the group meets defined quality benchmarks, its providers can share in any financial rewards that spring from cost savings. But the providers also share in the collective risk of penalties for poor performance. Using the buzzwords of the moment, an “alignment of incentives” could help “bend the curve” of the sharp upturn in healthcare delivery costs.

ACO advocates argue that by pushing quantity over quality, the current fee-for-service payment system actually punishes providers that coordinate care or promote greater efficiencies; policy analysts are nearly unanimous in decreeing that the current model is fundamentally broken and must be replaced. “Well, actually, it’s not broken,” says Alfred Tallia, MD, MPH, professor and chair of the department of family medicine at the Robert Wood Johnson Medical School in New Brunswick, N.J. “It’s working very well for delivering what we’ve got now, which is not what we need, unfortunately.”

Perfect Timing

The current push for healthcare reform offers the opportunity to make the case for a more equitable, outcome-oriented payment system as a necessary component of any structure that emerges. Many reform advocates in Massachusetts already have moved from asking how to provide more healthcare coverage to asking how the government can afford it, and ACOs have become a favored mechanism for controlling costs.

The general ACO concept has been backed by the nonpartisan Medicare Payment Advisory Commission, and received another boost when the Accountable Care Promotion Act, initially co-sponsored by Rep. Peter Welch (D-Vt.) and Rep. Earl Pomeroy (D-N.D.) in May, was incorporated in its entirety into the healthcare reform bill introduced in the House of Representatives. The bill would launch a pilot program for ACOs for Medicare beneficiaries, while similar provisions within the Senate healthcare reform bill would set up pilot projects for both Medicare beneficiaries and pediatric beneficiaries of Medicaid or the Children’s Health Insurance Program.

Among the pilot projects already planned, healthcare officials at Robert Wood Johnson are hoping to create an academic-health-center-related ACO to link the disparate elements of healthcare delivery across a large swath. “Our vision is really to build the finest 21st-century integrated delivery system for New Jersey,” Dr. Tallia says. “And that would include everything from advanced, personalized in-home and outpatient primary care to high-tech, leading-edge inpatient quaternary care—and everything in between.”

Virginia’s Carilion Clinic was the first to announce its participation in a separate pilot involving the Engelberg Center for Health Care Reform at the Brookings Institution in Washington, D.C., and the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H. Both institutions have been heavyweights in championing the ACO cause. Dr. Werner says Carilion actually began transforming itself into a more coordinated and integrated organization about three years ago, well before the current ACO buzz began. “We always said from the beginning that we were creating an accountable physicians group, where the physician group had accountability for all of the outcomes important in healthcare,” he says.

The Nitty-Gritty

So how would such organizations actually work? Dr. Tallia sees three absolutes: local accountability, shared savings, and performance measurements. Beyond those necessities, the details begin to blur. The bad taste left by the widely despised capitation payment systems of the 1980s and ’90s has made experts wary of dwelling on the similarities between ACOs and fixed, prepaid capitation plans. Any mention of the C-word, in fact, is followed almost immediately by a caveat: This is a flexible, big-tent strategy that avoids any one-size-fits-all payment prescriptions. And most advocates are emphasizing that ACOs should be voluntary.

Analyses have suggested that in order to succeed, an ACO should enroll 5,000 or more Medicare beneficiaries, or at least 15,000 privately insured patients. Which combination of patients and providers should be included has been left vague to allow emerging networks to tailor the model to their own needs. Some experts differ as to whether hospitals are a necessary component, though almost all agree on the need to include primary-care providers.

Dr. Tallia envisions his medical-school-based linkup as a marriage between New Jersey’s largest multispecialty medical network, the Robert Wood Johnson Medical Group, and the 30% to 40% of primary-care practices in the state that already have relationships with the school. “If you marry the primary-care relationships to the subspecialty care in the Robert Wood Johnson Medical Group and then tie in the area hospitals, by golly, you’ve got an ACO,” he says.

Robert Wood Johnson University Hospital is building an inpatient hospitalist service that will become an integral part of that mission, he says, with its focus on increasing efficiency, reducing the length of hospital stays, appropriate testing and handoffs, and proper communication with other care providers prior to hospital discharges.

ACO Outreach

But any system in which success leads to fewer hospitalizations also needs buy-in from those who stand to lose business. In short, hospitalists and other specialists will need financial incentives, too. That reward system, in turn, requires the right formula for setting and regularly measuring quality standards.

Based on initial savings estimates, however, Dr. Tallia isn’t worried about anyone missing out on a slice of the pie. “We’re looking at somewhere between 15% and 25% cost reductions,” he says, adding participants should gain sizable rewards. Initially, he says, he hopes to start with 5,000 to 10,000 enrollees and launch demonstration projects targeting patient subsets like Medicare beneficiaries and those insured by large employer groups. Ultimately, he’d love to have half of the state’s insured population.

From its own database models, Virginia’s Carilion Clinic estimates that its doctor group takes care of as many as 60,000 Medicare patients per year, with a strong tilt toward primary-care providers. For the past six months, the clinic has been working to identify the geographical scope and specific subset of beneficiaries that would work best for the pilot.

Once it settles on the best combination, Dr. Werner says, the clinic can look at that group’s historical spend rate over the past few years, then agree on a reduction in the rate of growth by, say, 1.5%. “If we’re able to have reductions that exceed 1.5 percent, we would have an opportunity to share in those reductions,” he says.

HM Front and Center

If all goes well, the first pieces of the Carilion ACO will be in place by Jan. 1, and Ralph Whatley, MD, chair of the department of medicine, says the hospitalist program will be “ground zero” in helping to smooth the transition through the proper handling of admissions, discharges, and handoffs of care. “If we do our job as an accountable care organization well, one of the things we should see is that we have less admissions to our hospitalist service,” Dr. Whatley says, especially as the management of such conditions as chronic diseases moves to outpatient settings. Nevertheless, “we can have our hospitalists front and center in the efforts to make the acute management of illness that requires the inpatient setting more efficient, less costly, and with better outcomes.”

Carilion’s hospitalists have played prominent roles in many of the clinic’s quality, safety, and efficiency initiatives. “I would have difficulty imagining that a health system that didn’t have a widespread, cohesive hospitalist service could pull off the kind of inpatient management efficiency, even preventive medicine, that a hospitalist model like ours is going to be able to do,” Dr. Whatley says.

Similarly, he has difficulty imagining how an organization could pull off a successful ACO without ready access to patient information through electronic health records, as Carilion now does. Unsurprisingly, many healthcare payment reform advocates are pushing for the technology needed for ACO-style startups to flourish.

As Dr. Werner says, “You need to give the group of physicians that are going to be part of an accountable group the necessary infrastructure and tools to be able to provide care together.” TH

Bryn Nelson is a freelance writer based in Seattle.

The Mayo Clinic is technically one. So are Pennsylvania’s Geisinger Health System, California-based Kaiser Permanente, and the Cleveland Clinic. Beyond the handful of long-established and well-integrated sites being labeled as de facto accountable care organizations (ACOs), advocates are seizing the moment and pushing for a bold vision of what role ACOs will play in the movement to reform the healthcare payment system across the country. In at least two major pilot projects in the works, hospitalists are expected to be front and center in leading the transition.

An ACO is an agreed-upon group of providers bands together to assume joint responsibility for both the quality and cost of healthcare for a specific population of beneficiaries. “What an ACO is trying to do is defragment healthcare,” says Mark Werner, MD, chief medical officer for southwest Virginia’s Carilion Clinic. As long as the group meets defined quality benchmarks, its providers can share in any financial rewards that spring from cost savings. But the providers also share in the collective risk of penalties for poor performance. Using the buzzwords of the moment, an “alignment of incentives” could help “bend the curve” of the sharp upturn in healthcare delivery costs.

ACO advocates argue that by pushing quantity over quality, the current fee-for-service payment system actually punishes providers that coordinate care or promote greater efficiencies; policy analysts are nearly unanimous in decreeing that the current model is fundamentally broken and must be replaced. “Well, actually, it’s not broken,” says Alfred Tallia, MD, MPH, professor and chair of the department of family medicine at the Robert Wood Johnson Medical School in New Brunswick, N.J. “It’s working very well for delivering what we’ve got now, which is not what we need, unfortunately.”

Perfect Timing

The current push for healthcare reform offers the opportunity to make the case for a more equitable, outcome-oriented payment system as a necessary component of any structure that emerges. Many reform advocates in Massachusetts already have moved from asking how to provide more healthcare coverage to asking how the government can afford it, and ACOs have become a favored mechanism for controlling costs.

The general ACO concept has been backed by the nonpartisan Medicare Payment Advisory Commission, and received another boost when the Accountable Care Promotion Act, initially co-sponsored by Rep. Peter Welch (D-Vt.) and Rep. Earl Pomeroy (D-N.D.) in May, was incorporated in its entirety into the healthcare reform bill introduced in the House of Representatives. The bill would launch a pilot program for ACOs for Medicare beneficiaries, while similar provisions within the Senate healthcare reform bill would set up pilot projects for both Medicare beneficiaries and pediatric beneficiaries of Medicaid or the Children’s Health Insurance Program.

Among the pilot projects already planned, healthcare officials at Robert Wood Johnson are hoping to create an academic-health-center-related ACO to link the disparate elements of healthcare delivery across a large swath. “Our vision is really to build the finest 21st-century integrated delivery system for New Jersey,” Dr. Tallia says. “And that would include everything from advanced, personalized in-home and outpatient primary care to high-tech, leading-edge inpatient quaternary care—and everything in between.”

Virginia’s Carilion Clinic was the first to announce its participation in a separate pilot involving the Engelberg Center for Health Care Reform at the Brookings Institution in Washington, D.C., and the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H. Both institutions have been heavyweights in championing the ACO cause. Dr. Werner says Carilion actually began transforming itself into a more coordinated and integrated organization about three years ago, well before the current ACO buzz began. “We always said from the beginning that we were creating an accountable physicians group, where the physician group had accountability for all of the outcomes important in healthcare,” he says.

The Nitty-Gritty

So how would such organizations actually work? Dr. Tallia sees three absolutes: local accountability, shared savings, and performance measurements. Beyond those necessities, the details begin to blur. The bad taste left by the widely despised capitation payment systems of the 1980s and ’90s has made experts wary of dwelling on the similarities between ACOs and fixed, prepaid capitation plans. Any mention of the C-word, in fact, is followed almost immediately by a caveat: This is a flexible, big-tent strategy that avoids any one-size-fits-all payment prescriptions. And most advocates are emphasizing that ACOs should be voluntary.

Analyses have suggested that in order to succeed, an ACO should enroll 5,000 or more Medicare beneficiaries, or at least 15,000 privately insured patients. Which combination of patients and providers should be included has been left vague to allow emerging networks to tailor the model to their own needs. Some experts differ as to whether hospitals are a necessary component, though almost all agree on the need to include primary-care providers.

Dr. Tallia envisions his medical-school-based linkup as a marriage between New Jersey’s largest multispecialty medical network, the Robert Wood Johnson Medical Group, and the 30% to 40% of primary-care practices in the state that already have relationships with the school. “If you marry the primary-care relationships to the subspecialty care in the Robert Wood Johnson Medical Group and then tie in the area hospitals, by golly, you’ve got an ACO,” he says.

Robert Wood Johnson University Hospital is building an inpatient hospitalist service that will become an integral part of that mission, he says, with its focus on increasing efficiency, reducing the length of hospital stays, appropriate testing and handoffs, and proper communication with other care providers prior to hospital discharges.

ACO Outreach

But any system in which success leads to fewer hospitalizations also needs buy-in from those who stand to lose business. In short, hospitalists and other specialists will need financial incentives, too. That reward system, in turn, requires the right formula for setting and regularly measuring quality standards.

Based on initial savings estimates, however, Dr. Tallia isn’t worried about anyone missing out on a slice of the pie. “We’re looking at somewhere between 15% and 25% cost reductions,” he says, adding participants should gain sizable rewards. Initially, he says, he hopes to start with 5,000 to 10,000 enrollees and launch demonstration projects targeting patient subsets like Medicare beneficiaries and those insured by large employer groups. Ultimately, he’d love to have half of the state’s insured population.

From its own database models, Virginia’s Carilion Clinic estimates that its doctor group takes care of as many as 60,000 Medicare patients per year, with a strong tilt toward primary-care providers. For the past six months, the clinic has been working to identify the geographical scope and specific subset of beneficiaries that would work best for the pilot.

Once it settles on the best combination, Dr. Werner says, the clinic can look at that group’s historical spend rate over the past few years, then agree on a reduction in the rate of growth by, say, 1.5%. “If we’re able to have reductions that exceed 1.5 percent, we would have an opportunity to share in those reductions,” he says.

HM Front and Center

If all goes well, the first pieces of the Carilion ACO will be in place by Jan. 1, and Ralph Whatley, MD, chair of the department of medicine, says the hospitalist program will be “ground zero” in helping to smooth the transition through the proper handling of admissions, discharges, and handoffs of care. “If we do our job as an accountable care organization well, one of the things we should see is that we have less admissions to our hospitalist service,” Dr. Whatley says, especially as the management of such conditions as chronic diseases moves to outpatient settings. Nevertheless, “we can have our hospitalists front and center in the efforts to make the acute management of illness that requires the inpatient setting more efficient, less costly, and with better outcomes.”

Carilion’s hospitalists have played prominent roles in many of the clinic’s quality, safety, and efficiency initiatives. “I would have difficulty imagining that a health system that didn’t have a widespread, cohesive hospitalist service could pull off the kind of inpatient management efficiency, even preventive medicine, that a hospitalist model like ours is going to be able to do,” Dr. Whatley says.

Similarly, he has difficulty imagining how an organization could pull off a successful ACO without ready access to patient information through electronic health records, as Carilion now does. Unsurprisingly, many healthcare payment reform advocates are pushing for the technology needed for ACO-style startups to flourish.

As Dr. Werner says, “You need to give the group of physicians that are going to be part of an accountable group the necessary infrastructure and tools to be able to provide care together.” TH

Bryn Nelson is a freelance writer based in Seattle.

The Mayo Clinic is technically one. So are Pennsylvania’s Geisinger Health System, California-based Kaiser Permanente, and the Cleveland Clinic. Beyond the handful of long-established and well-integrated sites being labeled as de facto accountable care organizations (ACOs), advocates are seizing the moment and pushing for a bold vision of what role ACOs will play in the movement to reform the healthcare payment system across the country. In at least two major pilot projects in the works, hospitalists are expected to be front and center in leading the transition.

An ACO is an agreed-upon group of providers bands together to assume joint responsibility for both the quality and cost of healthcare for a specific population of beneficiaries. “What an ACO is trying to do is defragment healthcare,” says Mark Werner, MD, chief medical officer for southwest Virginia’s Carilion Clinic. As long as the group meets defined quality benchmarks, its providers can share in any financial rewards that spring from cost savings. But the providers also share in the collective risk of penalties for poor performance. Using the buzzwords of the moment, an “alignment of incentives” could help “bend the curve” of the sharp upturn in healthcare delivery costs.

ACO advocates argue that by pushing quantity over quality, the current fee-for-service payment system actually punishes providers that coordinate care or promote greater efficiencies; policy analysts are nearly unanimous in decreeing that the current model is fundamentally broken and must be replaced. “Well, actually, it’s not broken,” says Alfred Tallia, MD, MPH, professor and chair of the department of family medicine at the Robert Wood Johnson Medical School in New Brunswick, N.J. “It’s working very well for delivering what we’ve got now, which is not what we need, unfortunately.”

Perfect Timing

The current push for healthcare reform offers the opportunity to make the case for a more equitable, outcome-oriented payment system as a necessary component of any structure that emerges. Many reform advocates in Massachusetts already have moved from asking how to provide more healthcare coverage to asking how the government can afford it, and ACOs have become a favored mechanism for controlling costs.

The general ACO concept has been backed by the nonpartisan Medicare Payment Advisory Commission, and received another boost when the Accountable Care Promotion Act, initially co-sponsored by Rep. Peter Welch (D-Vt.) and Rep. Earl Pomeroy (D-N.D.) in May, was incorporated in its entirety into the healthcare reform bill introduced in the House of Representatives. The bill would launch a pilot program for ACOs for Medicare beneficiaries, while similar provisions within the Senate healthcare reform bill would set up pilot projects for both Medicare beneficiaries and pediatric beneficiaries of Medicaid or the Children’s Health Insurance Program.

Among the pilot projects already planned, healthcare officials at Robert Wood Johnson are hoping to create an academic-health-center-related ACO to link the disparate elements of healthcare delivery across a large swath. “Our vision is really to build the finest 21st-century integrated delivery system for New Jersey,” Dr. Tallia says. “And that would include everything from advanced, personalized in-home and outpatient primary care to high-tech, leading-edge inpatient quaternary care—and everything in between.”

Virginia’s Carilion Clinic was the first to announce its participation in a separate pilot involving the Engelberg Center for Health Care Reform at the Brookings Institution in Washington, D.C., and the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H. Both institutions have been heavyweights in championing the ACO cause. Dr. Werner says Carilion actually began transforming itself into a more coordinated and integrated organization about three years ago, well before the current ACO buzz began. “We always said from the beginning that we were creating an accountable physicians group, where the physician group had accountability for all of the outcomes important in healthcare,” he says.

The Nitty-Gritty

So how would such organizations actually work? Dr. Tallia sees three absolutes: local accountability, shared savings, and performance measurements. Beyond those necessities, the details begin to blur. The bad taste left by the widely despised capitation payment systems of the 1980s and ’90s has made experts wary of dwelling on the similarities between ACOs and fixed, prepaid capitation plans. Any mention of the C-word, in fact, is followed almost immediately by a caveat: This is a flexible, big-tent strategy that avoids any one-size-fits-all payment prescriptions. And most advocates are emphasizing that ACOs should be voluntary.

Analyses have suggested that in order to succeed, an ACO should enroll 5,000 or more Medicare beneficiaries, or at least 15,000 privately insured patients. Which combination of patients and providers should be included has been left vague to allow emerging networks to tailor the model to their own needs. Some experts differ as to whether hospitals are a necessary component, though almost all agree on the need to include primary-care providers.

Dr. Tallia envisions his medical-school-based linkup as a marriage between New Jersey’s largest multispecialty medical network, the Robert Wood Johnson Medical Group, and the 30% to 40% of primary-care practices in the state that already have relationships with the school. “If you marry the primary-care relationships to the subspecialty care in the Robert Wood Johnson Medical Group and then tie in the area hospitals, by golly, you’ve got an ACO,” he says.

Robert Wood Johnson University Hospital is building an inpatient hospitalist service that will become an integral part of that mission, he says, with its focus on increasing efficiency, reducing the length of hospital stays, appropriate testing and handoffs, and proper communication with other care providers prior to hospital discharges.

ACO Outreach

But any system in which success leads to fewer hospitalizations also needs buy-in from those who stand to lose business. In short, hospitalists and other specialists will need financial incentives, too. That reward system, in turn, requires the right formula for setting and regularly measuring quality standards.

Based on initial savings estimates, however, Dr. Tallia isn’t worried about anyone missing out on a slice of the pie. “We’re looking at somewhere between 15% and 25% cost reductions,” he says, adding participants should gain sizable rewards. Initially, he says, he hopes to start with 5,000 to 10,000 enrollees and launch demonstration projects targeting patient subsets like Medicare beneficiaries and those insured by large employer groups. Ultimately, he’d love to have half of the state’s insured population.

From its own database models, Virginia’s Carilion Clinic estimates that its doctor group takes care of as many as 60,000 Medicare patients per year, with a strong tilt toward primary-care providers. For the past six months, the clinic has been working to identify the geographical scope and specific subset of beneficiaries that would work best for the pilot.

Once it settles on the best combination, Dr. Werner says, the clinic can look at that group’s historical spend rate over the past few years, then agree on a reduction in the rate of growth by, say, 1.5%. “If we’re able to have reductions that exceed 1.5 percent, we would have an opportunity to share in those reductions,” he says.

HM Front and Center

If all goes well, the first pieces of the Carilion ACO will be in place by Jan. 1, and Ralph Whatley, MD, chair of the department of medicine, says the hospitalist program will be “ground zero” in helping to smooth the transition through the proper handling of admissions, discharges, and handoffs of care. “If we do our job as an accountable care organization well, one of the things we should see is that we have less admissions to our hospitalist service,” Dr. Whatley says, especially as the management of such conditions as chronic diseases moves to outpatient settings. Nevertheless, “we can have our hospitalists front and center in the efforts to make the acute management of illness that requires the inpatient setting more efficient, less costly, and with better outcomes.”

Carilion’s hospitalists have played prominent roles in many of the clinic’s quality, safety, and efficiency initiatives. “I would have difficulty imagining that a health system that didn’t have a widespread, cohesive hospitalist service could pull off the kind of inpatient management efficiency, even preventive medicine, that a hospitalist model like ours is going to be able to do,” Dr. Whatley says.

Similarly, he has difficulty imagining how an organization could pull off a successful ACO without ready access to patient information through electronic health records, as Carilion now does. Unsurprisingly, many healthcare payment reform advocates are pushing for the technology needed for ACO-style startups to flourish.

As Dr. Werner says, “You need to give the group of physicians that are going to be part of an accountable group the necessary infrastructure and tools to be able to provide care together.” TH

Bryn Nelson is a freelance writer based in Seattle.