Public Policy

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

With much of the national discussion on healthcare policy still dominated by the Affordable Care Act, which was signed into law March 23, 2010, it’s easy to forget that the healthcare industry received a big influx of money through 2009’s federal stimulus. In all, the American Recovery and Reinvestment Act gave the go-ahead for roughly $160 billion in new health-related spending. So where has that money gone, and did it achieve the Obama administration’s overall goal of stimulating the economy?

As with all economic matters, there’s no simple answer, and economists may never reach consensus. Nor has all the money yet been spent, although the vast majority is now spoken for. Nevertheless, several reports and policy experts have provided at least a glimpse of whether certain monies were indeed well spent. Here’s a look at some of the main areas of interest to HM, including funding meant to expand access to care, boost research funding, and increase medical infrastructure.

$98 Billion for Medicaid

By far the biggest chunk of healthcare money went to states to help shore up their Medicaid programs, in exchange for assurances that they would not tighten eligibility requirements. Another sizable fraction went to help unemployed people maintain their health insurance coverage through the government’s COBRA program by subsidizing 65% of their premiums. Those subsidies eventually increased to $34.3 billion through subsequent legislation, according to the U.S. Congress Joint Committee on Taxation.

Both types of spending provide assistance for lower-income people, and studies have broadly concluded that stimulus spending is more effective when directed at poorer people who are more likely to spend than save additional income. James Feyrer, PhD, associate professor of economics at Dartmouth College and a research associate at the National Bureau of Economic Research, says the stimulus’ support for low-income households yielded more than two dollars for every dollar spent.

The key question, Dr. Feyrer says, is whether government spending changes behavior. “Any money that you spend that doesn’t change anybody’s behavior isn’t going to have any stimulus effect,” he says. Because the extra Medicaid funds were contingent on states maintaining their eligibility rules, they had no choice but to spend the new money. That infusion theoretically put more cash into the pockets of the poor, increasing their own propensity to spend and delivering a boost to the economy.

But this funding model comes with a major caveat: Now that the stimulus money has run out, Dr. Feyrer says a reverse effect could take place. “The hope is that the economy will come roaring back in such a fashion that when you pull the stimulus away, it will be less painful,” he says.

That hasn’t happened, however, meaning that the loss of stimulus funds is proving particularly painful for cash-strapped states. Looming budget gaps in Medicaid and other programs for the poor could result in economic contraction. A similar effect could be in play now that COBRA subsidies have lapsed.

$22.6 Billion for Health IT

A meta-analysis by the Office of the National Coordinator for Health Information Technology concludes that HIT has had a predominantly positive effect on healthcare, mainly on quality and efficiency. In principle, most observers agree that electronic health records (EHRs) are good for medicine. In reality, however, critics say the stimulus’ huge cash incentive to get doctors and hospitals to demonstrate “meaningful use” of the technology has exposed a major weakness.

Maggie Mahar, a healthcare fellow at the Century Foundation in Washington, D.C., contends the funds should have been kept in reserve until experts could better advise doctors and hospitals about which systems would work best for their specific practices, with an eye toward ensuring that the records could be linked.

“Instead, you’ve got this sort of laissez-faire chaos of people out there selling stuff, some of which is good, some of which isn’t, to people who don’t know much about what they’re buying. And that has created real problems,” Mahar says. “Some places have very good EHR in place, up and running. Other places have bought stuff that they’d now like to throw out the window and have to replace.”

$2.8 Billion for Community Healthcare Services

SHM has long supported efforts to address the nation’s PCP shortage. In October, federal officials announced that they had made some headway on that front by nearly tripling the size of the National Health Service Corps. The loan-repayment and scholarship program grants $60,000 awards to providers in exchange for two-year commitments to medically underserved communities. In 2008, about 3,600 clinicians, mainly PCPs, were enrolled in the corps. This year, the number surpassed 10,000, boosted by $300 million in stimulus money and $1.5 billion from the ACA.

As a matter of healthcare policy, then, the program has arguably been a big success. From a purely economics angle, however, Dr. Feyrer suggests the program’s effect is likely to be more modest, because the award acts like a two-year salary boost for doctors who would likely still be employed, just somewhere else.

Conversely, infrastructure projects like the building of hospitals and community centers could have generated a fairly robust economic boost if they wouldn’t have been completed in the absence of stimulus money. A May 27 report by the Connecticut General Assembly’s Office of Legislature Research, “Health Care Centers and Providers as Economic Drivers,” attempted to quantify the return on stimulus-funded investments in the state.

Among its conclusions, the report found that roughly $11.4 million in improvement grants yielded an estimated economic impact of $18.6 million. Similarly, $16.2 million in funds to renovate existing health centers or increase space through construction of new or expanded services sites yielded an impact of $26.3 million.

$10 Billion to the NIH

A big chunk of the National Institutes of Health’s monies went toward highly rated research projects stuck in backlog. As Dr. Feyrer points out, such funding is less likely to have a short-term stimulus effect. For a quick economic shot in the arm, the main question is whether funds will help create jobs that otherwise would not have existed. Over the long haul, however, Feyrer agrees that increased medical research can yield economic rewards.

Similarly, Mahar says comparative effectiveness research (CER) could provide sizable long-term returns. “Every penny we’re spending on comparative effectiveness research should, down the road, pay off in a big way,” she says. Already, stimulus-funded studies are beginning to emerge from such efforts as a Seattle-based research consortium focused on objectively analyzing cancer diagnostic tools, screening tests, and treatments.

Such research is not without its detractors, who have criticized what they view as government intrusion into personal healthcare decisions. CER also produces winners and losers, making it more politically vulnerable. “No one wants to see their revenue stream cut, even if their overpriced device is no better than other devices,” Mahar says.

Bottom Line

So has healthcare-related stimulus spending really paid off? If early indicators seem mixed, future economic studies may provide more clarity—to a point. After all, Feyrer says, no economist can know what a world without a stimulus would have looked like, meaning the arguments won’t end anytime soon.

Bryn Nelson is a freelance medical writer based in Seattle.

With much of the national discussion on healthcare policy still dominated by the Affordable Care Act, which was signed into law March 23, 2010, it’s easy to forget that the healthcare industry received a big influx of money through 2009’s federal stimulus. In all, the American Recovery and Reinvestment Act gave the go-ahead for roughly $160 billion in new health-related spending. So where has that money gone, and did it achieve the Obama administration’s overall goal of stimulating the economy?

As with all economic matters, there’s no simple answer, and economists may never reach consensus. Nor has all the money yet been spent, although the vast majority is now spoken for. Nevertheless, several reports and policy experts have provided at least a glimpse of whether certain monies were indeed well spent. Here’s a look at some of the main areas of interest to HM, including funding meant to expand access to care, boost research funding, and increase medical infrastructure.

$98 Billion for Medicaid

By far the biggest chunk of healthcare money went to states to help shore up their Medicaid programs, in exchange for assurances that they would not tighten eligibility requirements. Another sizable fraction went to help unemployed people maintain their health insurance coverage through the government’s COBRA program by subsidizing 65% of their premiums. Those subsidies eventually increased to $34.3 billion through subsequent legislation, according to the U.S. Congress Joint Committee on Taxation.

Both types of spending provide assistance for lower-income people, and studies have broadly concluded that stimulus spending is more effective when directed at poorer people who are more likely to spend than save additional income. James Feyrer, PhD, associate professor of economics at Dartmouth College and a research associate at the National Bureau of Economic Research, says the stimulus’ support for low-income households yielded more than two dollars for every dollar spent.

The key question, Dr. Feyrer says, is whether government spending changes behavior. “Any money that you spend that doesn’t change anybody’s behavior isn’t going to have any stimulus effect,” he says. Because the extra Medicaid funds were contingent on states maintaining their eligibility rules, they had no choice but to spend the new money. That infusion theoretically put more cash into the pockets of the poor, increasing their own propensity to spend and delivering a boost to the economy.

But this funding model comes with a major caveat: Now that the stimulus money has run out, Dr. Feyrer says a reverse effect could take place. “The hope is that the economy will come roaring back in such a fashion that when you pull the stimulus away, it will be less painful,” he says.

That hasn’t happened, however, meaning that the loss of stimulus funds is proving particularly painful for cash-strapped states. Looming budget gaps in Medicaid and other programs for the poor could result in economic contraction. A similar effect could be in play now that COBRA subsidies have lapsed.

$22.6 Billion for Health IT

A meta-analysis by the Office of the National Coordinator for Health Information Technology concludes that HIT has had a predominantly positive effect on healthcare, mainly on quality and efficiency. In principle, most observers agree that electronic health records (EHRs) are good for medicine. In reality, however, critics say the stimulus’ huge cash incentive to get doctors and hospitals to demonstrate “meaningful use” of the technology has exposed a major weakness.

Maggie Mahar, a healthcare fellow at the Century Foundation in Washington, D.C., contends the funds should have been kept in reserve until experts could better advise doctors and hospitals about which systems would work best for their specific practices, with an eye toward ensuring that the records could be linked.

“Instead, you’ve got this sort of laissez-faire chaos of people out there selling stuff, some of which is good, some of which isn’t, to people who don’t know much about what they’re buying. And that has created real problems,” Mahar says. “Some places have very good EHR in place, up and running. Other places have bought stuff that they’d now like to throw out the window and have to replace.”

$2.8 Billion for Community Healthcare Services

SHM has long supported efforts to address the nation’s PCP shortage. In October, federal officials announced that they had made some headway on that front by nearly tripling the size of the National Health Service Corps. The loan-repayment and scholarship program grants $60,000 awards to providers in exchange for two-year commitments to medically underserved communities. In 2008, about 3,600 clinicians, mainly PCPs, were enrolled in the corps. This year, the number surpassed 10,000, boosted by $300 million in stimulus money and $1.5 billion from the ACA.

As a matter of healthcare policy, then, the program has arguably been a big success. From a purely economics angle, however, Dr. Feyrer suggests the program’s effect is likely to be more modest, because the award acts like a two-year salary boost for doctors who would likely still be employed, just somewhere else.

Conversely, infrastructure projects like the building of hospitals and community centers could have generated a fairly robust economic boost if they wouldn’t have been completed in the absence of stimulus money. A May 27 report by the Connecticut General Assembly’s Office of Legislature Research, “Health Care Centers and Providers as Economic Drivers,” attempted to quantify the return on stimulus-funded investments in the state.

Among its conclusions, the report found that roughly $11.4 million in improvement grants yielded an estimated economic impact of $18.6 million. Similarly, $16.2 million in funds to renovate existing health centers or increase space through construction of new or expanded services sites yielded an impact of $26.3 million.

$10 Billion to the NIH

A big chunk of the National Institutes of Health’s monies went toward highly rated research projects stuck in backlog. As Dr. Feyrer points out, such funding is less likely to have a short-term stimulus effect. For a quick economic shot in the arm, the main question is whether funds will help create jobs that otherwise would not have existed. Over the long haul, however, Feyrer agrees that increased medical research can yield economic rewards.

Similarly, Mahar says comparative effectiveness research (CER) could provide sizable long-term returns. “Every penny we’re spending on comparative effectiveness research should, down the road, pay off in a big way,” she says. Already, stimulus-funded studies are beginning to emerge from such efforts as a Seattle-based research consortium focused on objectively analyzing cancer diagnostic tools, screening tests, and treatments.

Such research is not without its detractors, who have criticized what they view as government intrusion into personal healthcare decisions. CER also produces winners and losers, making it more politically vulnerable. “No one wants to see their revenue stream cut, even if their overpriced device is no better than other devices,” Mahar says.

Bottom Line

So has healthcare-related stimulus spending really paid off? If early indicators seem mixed, future economic studies may provide more clarity—to a point. After all, Feyrer says, no economist can know what a world without a stimulus would have looked like, meaning the arguments won’t end anytime soon.

Bryn Nelson is a freelance medical writer based in Seattle.

With much of the national discussion on healthcare policy still dominated by the Affordable Care Act, which was signed into law March 23, 2010, it’s easy to forget that the healthcare industry received a big influx of money through 2009’s federal stimulus. In all, the American Recovery and Reinvestment Act gave the go-ahead for roughly $160 billion in new health-related spending. So where has that money gone, and did it achieve the Obama administration’s overall goal of stimulating the economy?

As with all economic matters, there’s no simple answer, and economists may never reach consensus. Nor has all the money yet been spent, although the vast majority is now spoken for. Nevertheless, several reports and policy experts have provided at least a glimpse of whether certain monies were indeed well spent. Here’s a look at some of the main areas of interest to HM, including funding meant to expand access to care, boost research funding, and increase medical infrastructure.

$98 Billion for Medicaid

By far the biggest chunk of healthcare money went to states to help shore up their Medicaid programs, in exchange for assurances that they would not tighten eligibility requirements. Another sizable fraction went to help unemployed people maintain their health insurance coverage through the government’s COBRA program by subsidizing 65% of their premiums. Those subsidies eventually increased to $34.3 billion through subsequent legislation, according to the U.S. Congress Joint Committee on Taxation.

Both types of spending provide assistance for lower-income people, and studies have broadly concluded that stimulus spending is more effective when directed at poorer people who are more likely to spend than save additional income. James Feyrer, PhD, associate professor of economics at Dartmouth College and a research associate at the National Bureau of Economic Research, says the stimulus’ support for low-income households yielded more than two dollars for every dollar spent.

The key question, Dr. Feyrer says, is whether government spending changes behavior. “Any money that you spend that doesn’t change anybody’s behavior isn’t going to have any stimulus effect,” he says. Because the extra Medicaid funds were contingent on states maintaining their eligibility rules, they had no choice but to spend the new money. That infusion theoretically put more cash into the pockets of the poor, increasing their own propensity to spend and delivering a boost to the economy.

But this funding model comes with a major caveat: Now that the stimulus money has run out, Dr. Feyrer says a reverse effect could take place. “The hope is that the economy will come roaring back in such a fashion that when you pull the stimulus away, it will be less painful,” he says.

That hasn’t happened, however, meaning that the loss of stimulus funds is proving particularly painful for cash-strapped states. Looming budget gaps in Medicaid and other programs for the poor could result in economic contraction. A similar effect could be in play now that COBRA subsidies have lapsed.

$22.6 Billion for Health IT

A meta-analysis by the Office of the National Coordinator for Health Information Technology concludes that HIT has had a predominantly positive effect on healthcare, mainly on quality and efficiency. In principle, most observers agree that electronic health records (EHRs) are good for medicine. In reality, however, critics say the stimulus’ huge cash incentive to get doctors and hospitals to demonstrate “meaningful use” of the technology has exposed a major weakness.

Maggie Mahar, a healthcare fellow at the Century Foundation in Washington, D.C., contends the funds should have been kept in reserve until experts could better advise doctors and hospitals about which systems would work best for their specific practices, with an eye toward ensuring that the records could be linked.

“Instead, you’ve got this sort of laissez-faire chaos of people out there selling stuff, some of which is good, some of which isn’t, to people who don’t know much about what they’re buying. And that has created real problems,” Mahar says. “Some places have very good EHR in place, up and running. Other places have bought stuff that they’d now like to throw out the window and have to replace.”

$2.8 Billion for Community Healthcare Services

SHM has long supported efforts to address the nation’s PCP shortage. In October, federal officials announced that they had made some headway on that front by nearly tripling the size of the National Health Service Corps. The loan-repayment and scholarship program grants $60,000 awards to providers in exchange for two-year commitments to medically underserved communities. In 2008, about 3,600 clinicians, mainly PCPs, were enrolled in the corps. This year, the number surpassed 10,000, boosted by $300 million in stimulus money and $1.5 billion from the ACA.

As a matter of healthcare policy, then, the program has arguably been a big success. From a purely economics angle, however, Dr. Feyrer suggests the program’s effect is likely to be more modest, because the award acts like a two-year salary boost for doctors who would likely still be employed, just somewhere else.

Conversely, infrastructure projects like the building of hospitals and community centers could have generated a fairly robust economic boost if they wouldn’t have been completed in the absence of stimulus money. A May 27 report by the Connecticut General Assembly’s Office of Legislature Research, “Health Care Centers and Providers as Economic Drivers,” attempted to quantify the return on stimulus-funded investments in the state.

Among its conclusions, the report found that roughly $11.4 million in improvement grants yielded an estimated economic impact of $18.6 million. Similarly, $16.2 million in funds to renovate existing health centers or increase space through construction of new or expanded services sites yielded an impact of $26.3 million.

$10 Billion to the NIH

A big chunk of the National Institutes of Health’s monies went toward highly rated research projects stuck in backlog. As Dr. Feyrer points out, such funding is less likely to have a short-term stimulus effect. For a quick economic shot in the arm, the main question is whether funds will help create jobs that otherwise would not have existed. Over the long haul, however, Feyrer agrees that increased medical research can yield economic rewards.

Similarly, Mahar says comparative effectiveness research (CER) could provide sizable long-term returns. “Every penny we’re spending on comparative effectiveness research should, down the road, pay off in a big way,” she says. Already, stimulus-funded studies are beginning to emerge from such efforts as a Seattle-based research consortium focused on objectively analyzing cancer diagnostic tools, screening tests, and treatments.

Such research is not without its detractors, who have criticized what they view as government intrusion into personal healthcare decisions. CER also produces winners and losers, making it more politically vulnerable. “No one wants to see their revenue stream cut, even if their overpriced device is no better than other devices,” Mahar says.

Bottom Line

So has healthcare-related stimulus spending really paid off? If early indicators seem mixed, future economic studies may provide more clarity—to a point. After all, Feyrer says, no economist can know what a world without a stimulus would have looked like, meaning the arguments won’t end anytime soon.

Bryn Nelson is a freelance medical writer based in Seattle.

Payment bundling may create new opportunities for hospitalists to start an important discussion with hospital executives. And forward-looking hospitalist leaders will use the new model to shape their own financial destinies.

The concept of payment bundling broadly means paying for healthcare with a single, comprehensive payment, which is intended to cover all services received by a patient. Due to the promise bundling holds when it comes to both cost containment and quality, the Affordable Care Act (ACA) includes a provision requiring the establishment of a voluntary national pilot program on payment bundling. This provision calls for bundled payments for 10 unnamed conditions by Jan. 1, 2013, and states that payment for each bundle will surround an episode of care consisting of three days prior to admission and 30 days post-hospital discharge. There is some flexibility built in because the ACA also allows for different episodes of care to be defined by the secretary of Health and Human Services.

Due to this flexibility, the discussion at SHM is probably similar to that of other forward-thinking organizations: What conditions would benefit from a hospitalist-led bundle and what is the appropriate episode of care?

In late August, the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI) answered these questions with the introduction of the Bundled Payments for Care Improvement initiative. This initiative outlines four models as options for the bundling pilot while maintaining a degree of flexibility in the details for participating providers to define:

• The first model will cover all Medicare DRGs for inpatient hospital services.
• Model two will include hospital and physician inpatient and post-discharge services.
• Model three will be for post-discharge services only.
• Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians, and other practitioners.

With the exception of the first model, providers wishing to participate may propose the condition (or conditions) their bundle will cover, the episode of care, and even the measures they will use for quality purposes.

CMMI clearly is aiming for a high level of provider involvement in developing bundling models that will work, and the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. For example, at press time, a tight application deadline and an unclear return on investment posed potential barriers.

Nevertheless, the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. At a minimum, hospitalists should be prepared to negotiate their level of involvement and how they will get paid for their work, should their institutions participate. But there is nothing preventing hospitalists from taking the lead in bringing bundled payments to their institutions by approaching hospital administrators with their own bundle for a condition they will manage.

If your group or institution is planning to participate in the bundled payments initiative, please let us know by emailing [email protected].

Payment bundling may create new opportunities for hospitalists to start an important discussion with hospital executives. And forward-looking hospitalist leaders will use the new model to shape their own financial destinies.

The concept of payment bundling broadly means paying for healthcare with a single, comprehensive payment, which is intended to cover all services received by a patient. Due to the promise bundling holds when it comes to both cost containment and quality, the Affordable Care Act (ACA) includes a provision requiring the establishment of a voluntary national pilot program on payment bundling. This provision calls for bundled payments for 10 unnamed conditions by Jan. 1, 2013, and states that payment for each bundle will surround an episode of care consisting of three days prior to admission and 30 days post-hospital discharge. There is some flexibility built in because the ACA also allows for different episodes of care to be defined by the secretary of Health and Human Services.

Due to this flexibility, the discussion at SHM is probably similar to that of other forward-thinking organizations: What conditions would benefit from a hospitalist-led bundle and what is the appropriate episode of care?

In late August, the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI) answered these questions with the introduction of the Bundled Payments for Care Improvement initiative. This initiative outlines four models as options for the bundling pilot while maintaining a degree of flexibility in the details for participating providers to define:

• The first model will cover all Medicare DRGs for inpatient hospital services.
• Model two will include hospital and physician inpatient and post-discharge services.
• Model three will be for post-discharge services only.
• Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians, and other practitioners.

With the exception of the first model, providers wishing to participate may propose the condition (or conditions) their bundle will cover, the episode of care, and even the measures they will use for quality purposes.

CMMI clearly is aiming for a high level of provider involvement in developing bundling models that will work, and the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. For example, at press time, a tight application deadline and an unclear return on investment posed potential barriers.

Nevertheless, the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. At a minimum, hospitalists should be prepared to negotiate their level of involvement and how they will get paid for their work, should their institutions participate. But there is nothing preventing hospitalists from taking the lead in bringing bundled payments to their institutions by approaching hospital administrators with their own bundle for a condition they will manage.

If your group or institution is planning to participate in the bundled payments initiative, please let us know by emailing [email protected].

Payment bundling may create new opportunities for hospitalists to start an important discussion with hospital executives. And forward-looking hospitalist leaders will use the new model to shape their own financial destinies.

The concept of payment bundling broadly means paying for healthcare with a single, comprehensive payment, which is intended to cover all services received by a patient. Due to the promise bundling holds when it comes to both cost containment and quality, the Affordable Care Act (ACA) includes a provision requiring the establishment of a voluntary national pilot program on payment bundling. This provision calls for bundled payments for 10 unnamed conditions by Jan. 1, 2013, and states that payment for each bundle will surround an episode of care consisting of three days prior to admission and 30 days post-hospital discharge. There is some flexibility built in because the ACA also allows for different episodes of care to be defined by the secretary of Health and Human Services.

Due to this flexibility, the discussion at SHM is probably similar to that of other forward-thinking organizations: What conditions would benefit from a hospitalist-led bundle and what is the appropriate episode of care?

In late August, the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI) answered these questions with the introduction of the Bundled Payments for Care Improvement initiative. This initiative outlines four models as options for the bundling pilot while maintaining a degree of flexibility in the details for participating providers to define:

• The first model will cover all Medicare DRGs for inpatient hospital services.
• Model two will include hospital and physician inpatient and post-discharge services.
• Model three will be for post-discharge services only.
• Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians, and other practitioners.

With the exception of the first model, providers wishing to participate may propose the condition (or conditions) their bundle will cover, the episode of care, and even the measures they will use for quality purposes.

CMMI clearly is aiming for a high level of provider involvement in developing bundling models that will work, and the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. For example, at press time, a tight application deadline and an unclear return on investment posed potential barriers.

Nevertheless, the inpatient focus for three out of four bundling models means that hospitalists should be prepared to play a part. At a minimum, hospitalists should be prepared to negotiate their level of involvement and how they will get paid for their work, should their institutions participate. But there is nothing preventing hospitalists from taking the lead in bringing bundled payments to their institutions by approaching hospital administrators with their own bundle for a condition they will manage.

If your group or institution is planning to participate in the bundled payments initiative, please let us know by emailing [email protected].

It reads like a brainteaser from hell: Twelve members of Congress must identify at least $1.2 trillion to cut from the federal budget over the next 10 years. Social Security cuts are a virtual nonstarter with Democrats. Tax hikes on the wealthy are anathema to Republicans. Significant Medicare cuts will invoke the wrath of seniors. The Joint Select Committee on Deficit Reduction, evenly split between both political parties, must somehow reach a majority agreement on what to trim by the Nov. 23 deadline. Then the full Congress must approve the committee’s recommendations by Dec. 23.

Here’s another caveat: In a Sept. 20 letter, SHM and 117 other medical groups urged the deficit reduction “super-committee” to “include a full repeal of the fatally flawed Medicare sustainable growth rate (SGR) formula in its final legislation.” Unless Congress repeals or delays the widely despised SGR mechanism, Medicare reimbursement rates for doctors will be cut by a catastrophic 29.4% in January. A full repeal, however, could cost $300 billion or more over 10 years, according to estimates by the nonpartisan Congressional Budget Office (CBO). If the super-committee takes up the SGR challenge, it will need to find at least $1.5 trillion worth of mutually agreeable cuts.

In a final twist, President Obama has threatened to veto any deficit reduction plan that slashes Medicare benefits and fails to raise taxes on the wealthy. The punchline is that unless the divided super-committee, a polarized Congress, and the president can all agree, $1.2 trillion in domestic and military spending cuts will automatically kick in, giving both political parties a lump of coal just in time for Christmas.

If any solution is possible, it might have to rely on some old numbers regarding potential cuts to Medicare and other federal programs. “There’s no time to develop new policy,” says Joseph Antos, PhD, a health policy expert at the American Enterprise Institute, a conservative think tank. “The old ideas that have been kicking around for years are scorable [by the CBO], and because they’ve been around for so long, it’s easier to write the legislative language.”

Here’s a look at perennial Medicare proposals and the chances of their inclusion in serious deficit-reduction negotiations.

Reduced Payments

Obama’s proposal to the super-committee includes $248 billion in Medicare cuts and savings. Of most direct relevance to hospitalists, about $57 billion comes from reduced payments to providers over 10 years. The proposal would reduce Indirect Medical Education add-on payments to teaching hospitals by 10%, end an add-on payment for hospitals and physicians in low-population states, and reduce payments to post-acute-care facilities.

Separately, the Medicare Payment Advisory Commission (MedPAC) released a proposal that would save $233 billion over 10 years—designed in large part to offset the costs necessary for a permanent SGR fix. Among its suggestions, the MedPAC proposal would freeze reimbursements for primary-care providers (PCPs) and trim payments to specialists by 5.9% per year for three years. Despite agreement by virtually everyone that the SGR has to go, groups like the Alliance of Specialty Medicine and American College of Surgeons have expressed concerns with MedPAC’s suggested offsets.

Dr. Antos says MedPAC has adopted the view that preventing the 29.4% cut in Medicare reimbursements will require spreading the pain more generally throughout the health sector. “That makes sense until you realize that politically, when you do that, you just generate lots of resistance from lots of organizations,” he says. So what about the SGR? Dr. Antos sees a permanent fix this year as “extremely unlikely,” especially given the general pessimism over the super-committee’s ability to agree on $1.2 trillion in cuts. Instead, he predicts a two-year fix that would require tens of billions in offsets but delay (yet again) more difficult political choices until after the 2012 elections. “They definitely do not want to be arguing about this next fall,” he says.

Drug Rebates

Under the president’s proposal, Medicare would receive the same rebates as Medicaid’s discount for brand name and generic drugs given to beneficiaries under the Medicare Low-Income Subsidy. This proposal alone is estimated to net some $135 billion in savings over 10 years, an inclusion that Judith Stein, executive director of the Center for Medicare Advocacy, says her organization was “delighted” to see. “We think that’s extremely reasonable, fair, good public policy, and good economic policy,” she says. Left-leaning groups are particularly vehement on this issue, given Medicare’s prohibition against negotiating with pharmaceutical companies on drug prices, a restriction that other bulk buyers, such as the Veterans Administration, don’t face.

Dr. Antos expects some form of the president’s proposal to be taken seriously. “This is something that is easy to do, and I think politically, it’s easier to go after a supplier of products—and drugs are the biggest one—than it is to go after doctors or hospitals,” he says. “And it’s hardest to go after beneficiaries.”

Premium Surcharges

Another element of President Obama’s proposal would save $20 billion by increasing wealthier beneficiaries’ insurance premiums on prescription drugs and doctors’ services. Beginning in 2017, income-based premiums for Medicare Part B and Part D both would rise by 15% for beneficiaries earning more than $85,000 annually.

AARP opposes the idea, and Stein says she’s concerned about the overall notion of basing Medicare premiums on income. “The problem is that we want to keep higher-income people satisfied with the Medicare program, because they’re the ones that get listened to,” Stein says.

Austin Frakt, PhD, a healthcare economist at Boston University, makes a similar point in a recent Health Affairs blog post: “The wealthy are a potential source of revenue for Medicare but also possess the means to finance the most strident challenge to it,” he writes. Even so, Stein says, “it’s easier to swallow than some other things,” especially if drug companies and others are required to share in the sacrifices.

Medicare Eligibility

President Obama’s proposal excludes any discussion about raising the age of Medicare eligibility, signaling a harder line on a change that Republicans and groups like the American Hospital Association have favored and that Obama himself floated as a trial balloon earlier this year. The Democratic base and AARP, however, rebelled against the notion, and Dr. Antos says the idea has “zero” chance of being included in the super-committee’s proposal. “This is the sort of thing that you don’t really want to bring up when you’re running for president, which is why the president backed off, and which is why the Republicans won’t be eager to see it, either,” he says.

Dr. Antos expects the eligible-age proposal to re-emerge in 2013, though he cautions against taking any “extravagant claims for savings” at face value. To be publicly acceptable, Medicare’s minimum age would need to rise slowly, he says, perhaps phased in over 20 years, and in a way that likely wouldn’t save a huge sum of money.

If Medicare raised its minimum age to 67 in 2014, the federal government would save roughly $5.7 billion, according to the nonprofit Center on Budget and Policy Priorities. In an “Incidental Economist” blog post, however, Dr. Frakt points out that the savings would simply shift the cost to beneficiaries, employers, private insurers, and others, a point echoed by Stein.

“All told, the cost to the system of raising the Medicare age to 67 would be $11.4 billion in 2014,” Dr. Frakt writes, “which is a high price to pay for $5.7 billion in federal savings.”

Bryn Nelson is a freelance medical writer based in Seattle.

It reads like a brainteaser from hell: Twelve members of Congress must identify at least $1.2 trillion to cut from the federal budget over the next 10 years. Social Security cuts are a virtual nonstarter with Democrats. Tax hikes on the wealthy are anathema to Republicans. Significant Medicare cuts will invoke the wrath of seniors. The Joint Select Committee on Deficit Reduction, evenly split between both political parties, must somehow reach a majority agreement on what to trim by the Nov. 23 deadline. Then the full Congress must approve the committee’s recommendations by Dec. 23.

Here’s another caveat: In a Sept. 20 letter, SHM and 117 other medical groups urged the deficit reduction “super-committee” to “include a full repeal of the fatally flawed Medicare sustainable growth rate (SGR) formula in its final legislation.” Unless Congress repeals or delays the widely despised SGR mechanism, Medicare reimbursement rates for doctors will be cut by a catastrophic 29.4% in January. A full repeal, however, could cost $300 billion or more over 10 years, according to estimates by the nonpartisan Congressional Budget Office (CBO). If the super-committee takes up the SGR challenge, it will need to find at least $1.5 trillion worth of mutually agreeable cuts.

In a final twist, President Obama has threatened to veto any deficit reduction plan that slashes Medicare benefits and fails to raise taxes on the wealthy. The punchline is that unless the divided super-committee, a polarized Congress, and the president can all agree, $1.2 trillion in domestic and military spending cuts will automatically kick in, giving both political parties a lump of coal just in time for Christmas.

If any solution is possible, it might have to rely on some old numbers regarding potential cuts to Medicare and other federal programs. “There’s no time to develop new policy,” says Joseph Antos, PhD, a health policy expert at the American Enterprise Institute, a conservative think tank. “The old ideas that have been kicking around for years are scorable [by the CBO], and because they’ve been around for so long, it’s easier to write the legislative language.”

Here’s a look at perennial Medicare proposals and the chances of their inclusion in serious deficit-reduction negotiations.

Reduced Payments

Obama’s proposal to the super-committee includes $248 billion in Medicare cuts and savings. Of most direct relevance to hospitalists, about $57 billion comes from reduced payments to providers over 10 years. The proposal would reduce Indirect Medical Education add-on payments to teaching hospitals by 10%, end an add-on payment for hospitals and physicians in low-population states, and reduce payments to post-acute-care facilities.

Separately, the Medicare Payment Advisory Commission (MedPAC) released a proposal that would save $233 billion over 10 years—designed in large part to offset the costs necessary for a permanent SGR fix. Among its suggestions, the MedPAC proposal would freeze reimbursements for primary-care providers (PCPs) and trim payments to specialists by 5.9% per year for three years. Despite agreement by virtually everyone that the SGR has to go, groups like the Alliance of Specialty Medicine and American College of Surgeons have expressed concerns with MedPAC’s suggested offsets.

Dr. Antos says MedPAC has adopted the view that preventing the 29.4% cut in Medicare reimbursements will require spreading the pain more generally throughout the health sector. “That makes sense until you realize that politically, when you do that, you just generate lots of resistance from lots of organizations,” he says. So what about the SGR? Dr. Antos sees a permanent fix this year as “extremely unlikely,” especially given the general pessimism over the super-committee’s ability to agree on $1.2 trillion in cuts. Instead, he predicts a two-year fix that would require tens of billions in offsets but delay (yet again) more difficult political choices until after the 2012 elections. “They definitely do not want to be arguing about this next fall,” he says.

Drug Rebates

Under the president’s proposal, Medicare would receive the same rebates as Medicaid’s discount for brand name and generic drugs given to beneficiaries under the Medicare Low-Income Subsidy. This proposal alone is estimated to net some $135 billion in savings over 10 years, an inclusion that Judith Stein, executive director of the Center for Medicare Advocacy, says her organization was “delighted” to see. “We think that’s extremely reasonable, fair, good public policy, and good economic policy,” she says. Left-leaning groups are particularly vehement on this issue, given Medicare’s prohibition against negotiating with pharmaceutical companies on drug prices, a restriction that other bulk buyers, such as the Veterans Administration, don’t face.

Dr. Antos expects some form of the president’s proposal to be taken seriously. “This is something that is easy to do, and I think politically, it’s easier to go after a supplier of products—and drugs are the biggest one—than it is to go after doctors or hospitals,” he says. “And it’s hardest to go after beneficiaries.”

Premium Surcharges

Another element of President Obama’s proposal would save $20 billion by increasing wealthier beneficiaries’ insurance premiums on prescription drugs and doctors’ services. Beginning in 2017, income-based premiums for Medicare Part B and Part D both would rise by 15% for beneficiaries earning more than $85,000 annually.

AARP opposes the idea, and Stein says she’s concerned about the overall notion of basing Medicare premiums on income. “The problem is that we want to keep higher-income people satisfied with the Medicare program, because they’re the ones that get listened to,” Stein says.

Austin Frakt, PhD, a healthcare economist at Boston University, makes a similar point in a recent Health Affairs blog post: “The wealthy are a potential source of revenue for Medicare but also possess the means to finance the most strident challenge to it,” he writes. Even so, Stein says, “it’s easier to swallow than some other things,” especially if drug companies and others are required to share in the sacrifices.

Medicare Eligibility

President Obama’s proposal excludes any discussion about raising the age of Medicare eligibility, signaling a harder line on a change that Republicans and groups like the American Hospital Association have favored and that Obama himself floated as a trial balloon earlier this year. The Democratic base and AARP, however, rebelled against the notion, and Dr. Antos says the idea has “zero” chance of being included in the super-committee’s proposal. “This is the sort of thing that you don’t really want to bring up when you’re running for president, which is why the president backed off, and which is why the Republicans won’t be eager to see it, either,” he says.

Dr. Antos expects the eligible-age proposal to re-emerge in 2013, though he cautions against taking any “extravagant claims for savings” at face value. To be publicly acceptable, Medicare’s minimum age would need to rise slowly, he says, perhaps phased in over 20 years, and in a way that likely wouldn’t save a huge sum of money.

If Medicare raised its minimum age to 67 in 2014, the federal government would save roughly $5.7 billion, according to the nonprofit Center on Budget and Policy Priorities. In an “Incidental Economist” blog post, however, Dr. Frakt points out that the savings would simply shift the cost to beneficiaries, employers, private insurers, and others, a point echoed by Stein.

“All told, the cost to the system of raising the Medicare age to 67 would be $11.4 billion in 2014,” Dr. Frakt writes, “which is a high price to pay for $5.7 billion in federal savings.”

Bryn Nelson is a freelance medical writer based in Seattle.

It reads like a brainteaser from hell: Twelve members of Congress must identify at least $1.2 trillion to cut from the federal budget over the next 10 years. Social Security cuts are a virtual nonstarter with Democrats. Tax hikes on the wealthy are anathema to Republicans. Significant Medicare cuts will invoke the wrath of seniors. The Joint Select Committee on Deficit Reduction, evenly split between both political parties, must somehow reach a majority agreement on what to trim by the Nov. 23 deadline. Then the full Congress must approve the committee’s recommendations by Dec. 23.

Here’s another caveat: In a Sept. 20 letter, SHM and 117 other medical groups urged the deficit reduction “super-committee” to “include a full repeal of the fatally flawed Medicare sustainable growth rate (SGR) formula in its final legislation.” Unless Congress repeals or delays the widely despised SGR mechanism, Medicare reimbursement rates for doctors will be cut by a catastrophic 29.4% in January. A full repeal, however, could cost $300 billion or more over 10 years, according to estimates by the nonpartisan Congressional Budget Office (CBO). If the super-committee takes up the SGR challenge, it will need to find at least $1.5 trillion worth of mutually agreeable cuts.

In a final twist, President Obama has threatened to veto any deficit reduction plan that slashes Medicare benefits and fails to raise taxes on the wealthy. The punchline is that unless the divided super-committee, a polarized Congress, and the president can all agree, $1.2 trillion in domestic and military spending cuts will automatically kick in, giving both political parties a lump of coal just in time for Christmas.

If any solution is possible, it might have to rely on some old numbers regarding potential cuts to Medicare and other federal programs. “There’s no time to develop new policy,” says Joseph Antos, PhD, a health policy expert at the American Enterprise Institute, a conservative think tank. “The old ideas that have been kicking around for years are scorable [by the CBO], and because they’ve been around for so long, it’s easier to write the legislative language.”

Here’s a look at perennial Medicare proposals and the chances of their inclusion in serious deficit-reduction negotiations.

Reduced Payments

Obama’s proposal to the super-committee includes $248 billion in Medicare cuts and savings. Of most direct relevance to hospitalists, about $57 billion comes from reduced payments to providers over 10 years. The proposal would reduce Indirect Medical Education add-on payments to teaching hospitals by 10%, end an add-on payment for hospitals and physicians in low-population states, and reduce payments to post-acute-care facilities.

Separately, the Medicare Payment Advisory Commission (MedPAC) released a proposal that would save $233 billion over 10 years—designed in large part to offset the costs necessary for a permanent SGR fix. Among its suggestions, the MedPAC proposal would freeze reimbursements for primary-care providers (PCPs) and trim payments to specialists by 5.9% per year for three years. Despite agreement by virtually everyone that the SGR has to go, groups like the Alliance of Specialty Medicine and American College of Surgeons have expressed concerns with MedPAC’s suggested offsets.

Dr. Antos says MedPAC has adopted the view that preventing the 29.4% cut in Medicare reimbursements will require spreading the pain more generally throughout the health sector. “That makes sense until you realize that politically, when you do that, you just generate lots of resistance from lots of organizations,” he says. So what about the SGR? Dr. Antos sees a permanent fix this year as “extremely unlikely,” especially given the general pessimism over the super-committee’s ability to agree on $1.2 trillion in cuts. Instead, he predicts a two-year fix that would require tens of billions in offsets but delay (yet again) more difficult political choices until after the 2012 elections. “They definitely do not want to be arguing about this next fall,” he says.

Drug Rebates

Under the president’s proposal, Medicare would receive the same rebates as Medicaid’s discount for brand name and generic drugs given to beneficiaries under the Medicare Low-Income Subsidy. This proposal alone is estimated to net some $135 billion in savings over 10 years, an inclusion that Judith Stein, executive director of the Center for Medicare Advocacy, says her organization was “delighted” to see. “We think that’s extremely reasonable, fair, good public policy, and good economic policy,” she says. Left-leaning groups are particularly vehement on this issue, given Medicare’s prohibition against negotiating with pharmaceutical companies on drug prices, a restriction that other bulk buyers, such as the Veterans Administration, don’t face.

Dr. Antos expects some form of the president’s proposal to be taken seriously. “This is something that is easy to do, and I think politically, it’s easier to go after a supplier of products—and drugs are the biggest one—than it is to go after doctors or hospitals,” he says. “And it’s hardest to go after beneficiaries.”

Premium Surcharges

Another element of President Obama’s proposal would save $20 billion by increasing wealthier beneficiaries’ insurance premiums on prescription drugs and doctors’ services. Beginning in 2017, income-based premiums for Medicare Part B and Part D both would rise by 15% for beneficiaries earning more than $85,000 annually.

AARP opposes the idea, and Stein says she’s concerned about the overall notion of basing Medicare premiums on income. “The problem is that we want to keep higher-income people satisfied with the Medicare program, because they’re the ones that get listened to,” Stein says.

Austin Frakt, PhD, a healthcare economist at Boston University, makes a similar point in a recent Health Affairs blog post: “The wealthy are a potential source of revenue for Medicare but also possess the means to finance the most strident challenge to it,” he writes. Even so, Stein says, “it’s easier to swallow than some other things,” especially if drug companies and others are required to share in the sacrifices.

Medicare Eligibility

President Obama’s proposal excludes any discussion about raising the age of Medicare eligibility, signaling a harder line on a change that Republicans and groups like the American Hospital Association have favored and that Obama himself floated as a trial balloon earlier this year. The Democratic base and AARP, however, rebelled against the notion, and Dr. Antos says the idea has “zero” chance of being included in the super-committee’s proposal. “This is the sort of thing that you don’t really want to bring up when you’re running for president, which is why the president backed off, and which is why the Republicans won’t be eager to see it, either,” he says.

Dr. Antos expects the eligible-age proposal to re-emerge in 2013, though he cautions against taking any “extravagant claims for savings” at face value. To be publicly acceptable, Medicare’s minimum age would need to rise slowly, he says, perhaps phased in over 20 years, and in a way that likely wouldn’t save a huge sum of money.

If Medicare raised its minimum age to 67 in 2014, the federal government would save roughly $5.7 billion, according to the nonprofit Center on Budget and Policy Priorities. In an “Incidental Economist” blog post, however, Dr. Frakt points out that the savings would simply shift the cost to beneficiaries, employers, private insurers, and others, a point echoed by Stein.

“All told, the cost to the system of raising the Medicare age to 67 would be $11.4 billion in 2014,” Dr. Frakt writes, “which is a high price to pay for $5.7 billion in federal savings.”

Bryn Nelson is a freelance medical writer based in Seattle.

PRO

Observational, database studies provide a powerful QI supplement

The proposed rules by the Centers for Medicare & Medicaid Services (CMS), which will allow access to patient-protected Medicare data, will provide for greater transparency and for data that could be utilized toward comparative-effectiveness research (CER). Thus, these rules have the potential to improve the quality of healthcare and impact patient safety.

The Institute of Medicine in December 1999 issued its now-famous article “To Err is Human,” which reported that medical errors cause up to 98,000 deaths and more than 1 million injuries each year in the U.S.⁶ However, the evidence shows minimal impact on improving patient safety in the past 10 years.

A retrospective study of 10 North Carolina hospitals reported in the New England Journal of Medicine by Landrigan and colleagues found that harms resulting from medical care remained extremely common, with little evidence for improvement.⁷ It also is estimated that it takes 17 years on average for clinical research to become incorporated into the majority of clinical practices.⁸ Although the randomized control trial (RCT) is unquestionably the best research tool to explore simple components of clinical care (i.e. tests, drugs, and procedures), its translation into daily clinical practice remains difficult.

Improving the process of care leading to quality remains an extremely difficult proposition based on such sociological issues as resistance to change, the need for interdisciplinary teamwork, level of support staff, economic factors, information retrieval inadequacies, and, most important, the complexity of patients with multiple comorbidities that do not fit the parameters of the RCT.

Don Berwick, MD, the lead author in the landmark IOM report and currently CMS administrator, has stated “in such complex terrain, the RCT is an impoverished way to learn.”⁹ Factors that cause this chasm include:¹⁰

• Too narrowly focused RCT;
• More required resources, including financial and personnel support with RCT, compared with usually clinical practices;
• Lack of collaboration between academic medical center researchers and community clinicians; and
• Lack of expertise and experience to undertake quality improvement in healthcare.

CER has received a $1.1 billion investment with the passage of the American Recovery and Reinvestment Act to provide evidence on the effectiveness, benefits, and harms of various treatment options.¹¹ As part of this research to improve IOM’s goals to improve healthcare, better evidence is desperately needed to cross the translational gap between clinical research and the bedside.¹² Observational outcome studies based on registries or databases derived primarily from clinical care can provide a powerful supplement to quality improvement.¹³

Thus, the ability to combine Medicare claims with other data through the Availability of Medicare Data for Performance Measurement would supply a wealth of information to potentially impact quality. As a cautionary note, safeguards such as provider review and appeal, monitoring the validity of the information, and only using the data for quality improvement are vital.

Dr. Holder is medical director of hospitalist services and chief medical information officer at Decatur (Ill.) Memorial Hospital. He is a member of Team Hospitalist.

CON

Unanswered questions, risks make CMS plan a bad idea

On June 8, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to allow “qualified entities” access to patient-protected Medicare data for provider performance publication. CMS allowed 60 days for public comment and a start date of Jan. 1, 2012. But this controversial rule appeared with short notice, little discussion, and abbreviated opportunity for comment.

CMS maintains this rule will result in higher quality and more cost-effective care. Considering the present volume of data published on multiple performance parameters for both hospitals and providers, it would seem prudent to have solid data for efficacy prior to implementing more required reporting and costs to the industry.^1,2,3

Physicians and hospitals will have 30 days to review and verify three years of CMS claims data before it is released. The burden and cost of review will be borne by the private practices involved.¹ This process will impose added administrative costs, and it is unlikely three years of data can be carefully reviewed in just 30 days. If practitioners find the review too cumbersome and expensive, which is likely, they will forgo review, putting the accuracy of the data in question.

Quality data already is published for both physicians and hospitals. Is there evidence this process will significantly increase transparency? Adding more layers of administrative work for both CMS and caregivers—higher overhead without defined benefit—seems an ill-conceived idea. From an evidence-based-practice standpoint, where is the evidence that this rule will improve “quality” and make care “cost-effective”? Have the risks (added bureaucracy, increased overhead, questionable data) and benefits (added transparency) been evaluated?

Additionally, it is unclear who will be monitoring the quality of the data published and who will provide oversight for the “entities” to ensure these data are fairly and accurately presented. Who will pay for this oversight, and what recourse will be afforded physicians and hospitals that feel they have been wronged?^4,5

The “qualified entities” will pay CMS to cover their cost of providing data, raising concerns that this practice could evolve into patient-data “purchasing.” Although it is likely the selected entities will be industry leaders (or at least initially) with the capability to protect data, is this not another opportunity for misuse or corruption in the system?

Other issues not clearly addressed include the nature of the patient-protected information and who will interpret this data in a clinical context. How will these data be adjusted for patient comorbidities and case mix, or will the data be published without regard to these important confounders?^1,3

Publishing clinical data for quality assurance and feedback purposes is essential for quality care. Transparency has increased consumer confidence in the healthcare system and, indeed, has increased the healthcare system’s responsiveness to quality concerns. Granting the benefits of transparency, published data must be precise, accurate, and managed with good oversight in order to ensure the process does not target providers or skew results. Another program, especially one being fast-tracked and making once-protected patient information available to unspecified entities, raises many questions. Who will be watching these agencies for a clear interpretation? Is this yet another layer of CMS bureaucracy? In an era of evidence-based medicine, where is the evidence that this program will improve the system for the better?

Dr. Brezina is a hospitalist at Durham Regional Hospital in North Carolina.

References

1. Under the magnifying glass (again): CMS proposes new access to Medicare data for public provider performance reports. Bass, Berry and Sims website. Available at: http://www.bassberry.com/communicationscenter/newsletters/. Accessed Aug. 31, 2011.
2. Controversial rule to allow access to Medicare data. Modern Health website. Available at: http://www.modernHealthcare.com. Accessed Aug. 31, 2011.
3. Physician report cards must give correct grades. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/09/05/edsa0905.htm. Accessed Sept. 12, 2011.
4. OIG identifies huge lapses in hospital security, shifts its focus from CMS to OCR. Atlantic Information Services Inc. website. Available at: http://www.AISHealth.com. Accessed Sept. 12, 2011.
5. Berry M. Insurers mishandle 1 in 5 claims, AMA finds. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/07/04/prl20704.htm. Accessed Sept. 12, 2011.
6. Kohn LT, Corrigan JM, Donaldson MS, eds. To error is human: building a safer health system. Washington: National Academies Press; 1999.
7. Landrigan CP, Parry GJ, Bones CB, Hackbarth AD, Goldmann DA, Sharek PJ. Temporal trends in rates of patient harm resulting from medical care. N Engl J Med. 2010;363(22):2124-2134.
8. Institute of Medicine. Crossing the quality chasm: a new health system for the 21st century. Washington: National Academy Press; 2001:13.
9. Berwick DM. The science of improvement. JAMA. 2008;299(10):1182-1184.
10. Ting HH, Shojania KG, Montori VM, Bradley EH. Quality improvement science and action. Circulation. 2009;119:1962-1974.
11. Committee on Comparative Research Prioritization. Institute of Medicine Initial National Priorities for Comparative Effectiveness Research. Washington: National Academy Press; 2009.
12. Sullivan P, Goldman D. The promise of comparative effectiveness research. JAMA. 2011;305(4):400-401.
13. Washington AE, Lipstein SH. The patient-centered outcomes research institute: promoting better information, decisions and health. Sept. 28, 2011; DOI: 10.10.1056/NEJMp1109407.

PRO

Observational, database studies provide a powerful QI supplement

The proposed rules by the Centers for Medicare & Medicaid Services (CMS), which will allow access to patient-protected Medicare data, will provide for greater transparency and for data that could be utilized toward comparative-effectiveness research (CER). Thus, these rules have the potential to improve the quality of healthcare and impact patient safety.

The Institute of Medicine in December 1999 issued its now-famous article “To Err is Human,” which reported that medical errors cause up to 98,000 deaths and more than 1 million injuries each year in the U.S.⁶ However, the evidence shows minimal impact on improving patient safety in the past 10 years.

A retrospective study of 10 North Carolina hospitals reported in the New England Journal of Medicine by Landrigan and colleagues found that harms resulting from medical care remained extremely common, with little evidence for improvement.⁷ It also is estimated that it takes 17 years on average for clinical research to become incorporated into the majority of clinical practices.⁸ Although the randomized control trial (RCT) is unquestionably the best research tool to explore simple components of clinical care (i.e. tests, drugs, and procedures), its translation into daily clinical practice remains difficult.

Improving the process of care leading to quality remains an extremely difficult proposition based on such sociological issues as resistance to change, the need for interdisciplinary teamwork, level of support staff, economic factors, information retrieval inadequacies, and, most important, the complexity of patients with multiple comorbidities that do not fit the parameters of the RCT.

Don Berwick, MD, the lead author in the landmark IOM report and currently CMS administrator, has stated “in such complex terrain, the RCT is an impoverished way to learn.”⁹ Factors that cause this chasm include:¹⁰

• Too narrowly focused RCT;
• More required resources, including financial and personnel support with RCT, compared with usually clinical practices;
• Lack of collaboration between academic medical center researchers and community clinicians; and
• Lack of expertise and experience to undertake quality improvement in healthcare.

CER has received a $1.1 billion investment with the passage of the American Recovery and Reinvestment Act to provide evidence on the effectiveness, benefits, and harms of various treatment options.¹¹ As part of this research to improve IOM’s goals to improve healthcare, better evidence is desperately needed to cross the translational gap between clinical research and the bedside.¹² Observational outcome studies based on registries or databases derived primarily from clinical care can provide a powerful supplement to quality improvement.¹³

Thus, the ability to combine Medicare claims with other data through the Availability of Medicare Data for Performance Measurement would supply a wealth of information to potentially impact quality. As a cautionary note, safeguards such as provider review and appeal, monitoring the validity of the information, and only using the data for quality improvement are vital.

Dr. Holder is medical director of hospitalist services and chief medical information officer at Decatur (Ill.) Memorial Hospital. He is a member of Team Hospitalist.

CON

Unanswered questions, risks make CMS plan a bad idea

On June 8, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to allow “qualified entities” access to patient-protected Medicare data for provider performance publication. CMS allowed 60 days for public comment and a start date of Jan. 1, 2012. But this controversial rule appeared with short notice, little discussion, and abbreviated opportunity for comment.

CMS maintains this rule will result in higher quality and more cost-effective care. Considering the present volume of data published on multiple performance parameters for both hospitals and providers, it would seem prudent to have solid data for efficacy prior to implementing more required reporting and costs to the industry.^1,2,3

Physicians and hospitals will have 30 days to review and verify three years of CMS claims data before it is released. The burden and cost of review will be borne by the private practices involved.¹ This process will impose added administrative costs, and it is unlikely three years of data can be carefully reviewed in just 30 days. If practitioners find the review too cumbersome and expensive, which is likely, they will forgo review, putting the accuracy of the data in question.

Quality data already is published for both physicians and hospitals. Is there evidence this process will significantly increase transparency? Adding more layers of administrative work for both CMS and caregivers—higher overhead without defined benefit—seems an ill-conceived idea. From an evidence-based-practice standpoint, where is the evidence that this rule will improve “quality” and make care “cost-effective”? Have the risks (added bureaucracy, increased overhead, questionable data) and benefits (added transparency) been evaluated?

Additionally, it is unclear who will be monitoring the quality of the data published and who will provide oversight for the “entities” to ensure these data are fairly and accurately presented. Who will pay for this oversight, and what recourse will be afforded physicians and hospitals that feel they have been wronged?^4,5

The “qualified entities” will pay CMS to cover their cost of providing data, raising concerns that this practice could evolve into patient-data “purchasing.” Although it is likely the selected entities will be industry leaders (or at least initially) with the capability to protect data, is this not another opportunity for misuse or corruption in the system?

Other issues not clearly addressed include the nature of the patient-protected information and who will interpret this data in a clinical context. How will these data be adjusted for patient comorbidities and case mix, or will the data be published without regard to these important confounders?^1,3

Publishing clinical data for quality assurance and feedback purposes is essential for quality care. Transparency has increased consumer confidence in the healthcare system and, indeed, has increased the healthcare system’s responsiveness to quality concerns. Granting the benefits of transparency, published data must be precise, accurate, and managed with good oversight in order to ensure the process does not target providers or skew results. Another program, especially one being fast-tracked and making once-protected patient information available to unspecified entities, raises many questions. Who will be watching these agencies for a clear interpretation? Is this yet another layer of CMS bureaucracy? In an era of evidence-based medicine, where is the evidence that this program will improve the system for the better?

Dr. Brezina is a hospitalist at Durham Regional Hospital in North Carolina.

References

1. Under the magnifying glass (again): CMS proposes new access to Medicare data for public provider performance reports. Bass, Berry and Sims website. Available at: http://www.bassberry.com/communicationscenter/newsletters/. Accessed Aug. 31, 2011.
2. Controversial rule to allow access to Medicare data. Modern Health website. Available at: http://www.modernHealthcare.com. Accessed Aug. 31, 2011.
3. Physician report cards must give correct grades. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/09/05/edsa0905.htm. Accessed Sept. 12, 2011.
4. OIG identifies huge lapses in hospital security, shifts its focus from CMS to OCR. Atlantic Information Services Inc. website. Available at: http://www.AISHealth.com. Accessed Sept. 12, 2011.
5. Berry M. Insurers mishandle 1 in 5 claims, AMA finds. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/07/04/prl20704.htm. Accessed Sept. 12, 2011.
6. Kohn LT, Corrigan JM, Donaldson MS, eds. To error is human: building a safer health system. Washington: National Academies Press; 1999.
7. Landrigan CP, Parry GJ, Bones CB, Hackbarth AD, Goldmann DA, Sharek PJ. Temporal trends in rates of patient harm resulting from medical care. N Engl J Med. 2010;363(22):2124-2134.
8. Institute of Medicine. Crossing the quality chasm: a new health system for the 21st century. Washington: National Academy Press; 2001:13.
9. Berwick DM. The science of improvement. JAMA. 2008;299(10):1182-1184.
10. Ting HH, Shojania KG, Montori VM, Bradley EH. Quality improvement science and action. Circulation. 2009;119:1962-1974.
11. Committee on Comparative Research Prioritization. Institute of Medicine Initial National Priorities for Comparative Effectiveness Research. Washington: National Academy Press; 2009.
12. Sullivan P, Goldman D. The promise of comparative effectiveness research. JAMA. 2011;305(4):400-401.
13. Washington AE, Lipstein SH. The patient-centered outcomes research institute: promoting better information, decisions and health. Sept. 28, 2011; DOI: 10.10.1056/NEJMp1109407.

PRO

Observational, database studies provide a powerful QI supplement

The proposed rules by the Centers for Medicare & Medicaid Services (CMS), which will allow access to patient-protected Medicare data, will provide for greater transparency and for data that could be utilized toward comparative-effectiveness research (CER). Thus, these rules have the potential to improve the quality of healthcare and impact patient safety.

The Institute of Medicine in December 1999 issued its now-famous article “To Err is Human,” which reported that medical errors cause up to 98,000 deaths and more than 1 million injuries each year in the U.S.⁶ However, the evidence shows minimal impact on improving patient safety in the past 10 years.

A retrospective study of 10 North Carolina hospitals reported in the New England Journal of Medicine by Landrigan and colleagues found that harms resulting from medical care remained extremely common, with little evidence for improvement.⁷ It also is estimated that it takes 17 years on average for clinical research to become incorporated into the majority of clinical practices.⁸ Although the randomized control trial (RCT) is unquestionably the best research tool to explore simple components of clinical care (i.e. tests, drugs, and procedures), its translation into daily clinical practice remains difficult.

Improving the process of care leading to quality remains an extremely difficult proposition based on such sociological issues as resistance to change, the need for interdisciplinary teamwork, level of support staff, economic factors, information retrieval inadequacies, and, most important, the complexity of patients with multiple comorbidities that do not fit the parameters of the RCT.

Don Berwick, MD, the lead author in the landmark IOM report and currently CMS administrator, has stated “in such complex terrain, the RCT is an impoverished way to learn.”⁹ Factors that cause this chasm include:¹⁰

• Too narrowly focused RCT;
• More required resources, including financial and personnel support with RCT, compared with usually clinical practices;
• Lack of collaboration between academic medical center researchers and community clinicians; and
• Lack of expertise and experience to undertake quality improvement in healthcare.

CER has received a $1.1 billion investment with the passage of the American Recovery and Reinvestment Act to provide evidence on the effectiveness, benefits, and harms of various treatment options.¹¹ As part of this research to improve IOM’s goals to improve healthcare, better evidence is desperately needed to cross the translational gap between clinical research and the bedside.¹² Observational outcome studies based on registries or databases derived primarily from clinical care can provide a powerful supplement to quality improvement.¹³

Thus, the ability to combine Medicare claims with other data through the Availability of Medicare Data for Performance Measurement would supply a wealth of information to potentially impact quality. As a cautionary note, safeguards such as provider review and appeal, monitoring the validity of the information, and only using the data for quality improvement are vital.

Dr. Holder is medical director of hospitalist services and chief medical information officer at Decatur (Ill.) Memorial Hospital. He is a member of Team Hospitalist.

CON

Unanswered questions, risks make CMS plan a bad idea

On June 8, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to allow “qualified entities” access to patient-protected Medicare data for provider performance publication. CMS allowed 60 days for public comment and a start date of Jan. 1, 2012. But this controversial rule appeared with short notice, little discussion, and abbreviated opportunity for comment.

CMS maintains this rule will result in higher quality and more cost-effective care. Considering the present volume of data published on multiple performance parameters for both hospitals and providers, it would seem prudent to have solid data for efficacy prior to implementing more required reporting and costs to the industry.^1,2,3

Physicians and hospitals will have 30 days to review and verify three years of CMS claims data before it is released. The burden and cost of review will be borne by the private practices involved.¹ This process will impose added administrative costs, and it is unlikely three years of data can be carefully reviewed in just 30 days. If practitioners find the review too cumbersome and expensive, which is likely, they will forgo review, putting the accuracy of the data in question.

Quality data already is published for both physicians and hospitals. Is there evidence this process will significantly increase transparency? Adding more layers of administrative work for both CMS and caregivers—higher overhead without defined benefit—seems an ill-conceived idea. From an evidence-based-practice standpoint, where is the evidence that this rule will improve “quality” and make care “cost-effective”? Have the risks (added bureaucracy, increased overhead, questionable data) and benefits (added transparency) been evaluated?

Additionally, it is unclear who will be monitoring the quality of the data published and who will provide oversight for the “entities” to ensure these data are fairly and accurately presented. Who will pay for this oversight, and what recourse will be afforded physicians and hospitals that feel they have been wronged?^4,5

The “qualified entities” will pay CMS to cover their cost of providing data, raising concerns that this practice could evolve into patient-data “purchasing.” Although it is likely the selected entities will be industry leaders (or at least initially) with the capability to protect data, is this not another opportunity for misuse or corruption in the system?

Other issues not clearly addressed include the nature of the patient-protected information and who will interpret this data in a clinical context. How will these data be adjusted for patient comorbidities and case mix, or will the data be published without regard to these important confounders?^1,3

Publishing clinical data for quality assurance and feedback purposes is essential for quality care. Transparency has increased consumer confidence in the healthcare system and, indeed, has increased the healthcare system’s responsiveness to quality concerns. Granting the benefits of transparency, published data must be precise, accurate, and managed with good oversight in order to ensure the process does not target providers or skew results. Another program, especially one being fast-tracked and making once-protected patient information available to unspecified entities, raises many questions. Who will be watching these agencies for a clear interpretation? Is this yet another layer of CMS bureaucracy? In an era of evidence-based medicine, where is the evidence that this program will improve the system for the better?

Dr. Brezina is a hospitalist at Durham Regional Hospital in North Carolina.

References

1. Under the magnifying glass (again): CMS proposes new access to Medicare data for public provider performance reports. Bass, Berry and Sims website. Available at: http://www.bassberry.com/communicationscenter/newsletters/. Accessed Aug. 31, 2011.
2. Controversial rule to allow access to Medicare data. Modern Health website. Available at: http://www.modernHealthcare.com. Accessed Aug. 31, 2011.
3. Physician report cards must give correct grades. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/09/05/edsa0905.htm. Accessed Sept. 12, 2011.
4. OIG identifies huge lapses in hospital security, shifts its focus from CMS to OCR. Atlantic Information Services Inc. website. Available at: http://www.AISHealth.com. Accessed Sept. 12, 2011.
5. Berry M. Insurers mishandle 1 in 5 claims, AMA finds. American Medical News website. Available at: http://www.ama-assn.org/amednews/2011/07/04/prl20704.htm. Accessed Sept. 12, 2011.
6. Kohn LT, Corrigan JM, Donaldson MS, eds. To error is human: building a safer health system. Washington: National Academies Press; 1999.
7. Landrigan CP, Parry GJ, Bones CB, Hackbarth AD, Goldmann DA, Sharek PJ. Temporal trends in rates of patient harm resulting from medical care. N Engl J Med. 2010;363(22):2124-2134.
8. Institute of Medicine. Crossing the quality chasm: a new health system for the 21st century. Washington: National Academy Press; 2001:13.
9. Berwick DM. The science of improvement. JAMA. 2008;299(10):1182-1184.
10. Ting HH, Shojania KG, Montori VM, Bradley EH. Quality improvement science and action. Circulation. 2009;119:1962-1974.
11. Committee on Comparative Research Prioritization. Institute of Medicine Initial National Priorities for Comparative Effectiveness Research. Washington: National Academy Press; 2009.
12. Sullivan P, Goldman D. The promise of comparative effectiveness research. JAMA. 2011;305(4):400-401.
13. Washington AE, Lipstein SH. The patient-centered outcomes research institute: promoting better information, decisions and health. Sept. 28, 2011; DOI: 10.10.1056/NEJMp1109407.

The 2010 Affordable Care Act (ACA) mandates a hospital value-based purchasing (VBP) program to begin this time next year. But hospitalists should start preparing now to be integral parts of the program in their hospitals.

Though the ACA provision states the VBP program for hospital payments will begin with discharges on Oct. 1, 2012, performance on clinical quality and patient experience measures began impacting hospitals’ bottom lines on July 1, 2011. The VBP’s “baseline period” actually lasted from July 1, 2009, through March 31, 2010. The performance period started July 1 and will last through March 31, 2012.

On Aug. 2, 2012, CMS will notify hospitals of estimated performance scores, delivering the actual performance scores on Nov. 1, 2012. The result: Payments for any discharge on or after Oct. 1, 2012 (the beginning of fiscal-year 2013), will be paid based on the performance period currently under way.

Hospitalists and program leaders might wonder how an ACA provision could start before the ACA was passed. The HVBP program actually is a transition of the well-established “Reporting Hospital Quality Data for Annual Payment Update,” or pay-for-reporting program, which in 2003 initially provided a 0.4% payment differential for public reporting through the Hospital Compare website. The 2005 Deficit Reduction Act increased the payment to 2%, and authorized CMS to develop a HVBP plan for FY2009—it just didn’t materialize.

The ACA created the HVBP program with the intention of transforming Medicare from a passive payor to an active purchaser of higher-quality, more efficient healthcare. In essence, Medicare wants to pay for performance rather than simply accurate reporting.

So hospitalists once again are faced with partnering with their hospitals to ensure payout. Reducing a hospital’s base operating Medicare Severity Diagnosis Related Groups (MS-DRG) by the applicable percentage, which will be phased in through 2017 (starting at 1% in 2013 and increasing 0.25% each year), will generate the HVBP’s source of ongoing incentive payments.

To help, SHM this month launched the “Hospital Value-Based Purchasing Toolkit.” It will help hospitalists and hospital executives gain a better understanding of what all the information above really means (including performance measures), and what to expect when your performance scores arrive.

The toolkit is different from any other product SHM has ever produced, as subscribers will be added to their own social collaboration network, similar to a tool like LinkedIn, putting them in touch with our panel of experts and other subscribers across the nation. We also will be putting on a series of roundtables: short presentations from a subject or quality-measure expert, followed by an opportunity to ask questions of our HVBP panel. All of the information will be based on best practices pulled from case studies we have spent the last 12 months scouring the country for. Most important, the best practices will be hospitalist-relevant. The free portal to the toolkit, which includes detailed background information on each piece of the program, can be accessed at www.hospitalmedicine.org/hvbp.

A subscription to the full toolkit can be purchased through the SHM store.

The 2010 Affordable Care Act (ACA) mandates a hospital value-based purchasing (VBP) program to begin this time next year. But hospitalists should start preparing now to be integral parts of the program in their hospitals.

Though the ACA provision states the VBP program for hospital payments will begin with discharges on Oct. 1, 2012, performance on clinical quality and patient experience measures began impacting hospitals’ bottom lines on July 1, 2011. The VBP’s “baseline period” actually lasted from July 1, 2009, through March 31, 2010. The performance period started July 1 and will last through March 31, 2012.

On Aug. 2, 2012, CMS will notify hospitals of estimated performance scores, delivering the actual performance scores on Nov. 1, 2012. The result: Payments for any discharge on or after Oct. 1, 2012 (the beginning of fiscal-year 2013), will be paid based on the performance period currently under way.

Hospitalists and program leaders might wonder how an ACA provision could start before the ACA was passed. The HVBP program actually is a transition of the well-established “Reporting Hospital Quality Data for Annual Payment Update,” or pay-for-reporting program, which in 2003 initially provided a 0.4% payment differential for public reporting through the Hospital Compare website. The 2005 Deficit Reduction Act increased the payment to 2%, and authorized CMS to develop a HVBP plan for FY2009—it just didn’t materialize.

The ACA created the HVBP program with the intention of transforming Medicare from a passive payor to an active purchaser of higher-quality, more efficient healthcare. In essence, Medicare wants to pay for performance rather than simply accurate reporting.

So hospitalists once again are faced with partnering with their hospitals to ensure payout. Reducing a hospital’s base operating Medicare Severity Diagnosis Related Groups (MS-DRG) by the applicable percentage, which will be phased in through 2017 (starting at 1% in 2013 and increasing 0.25% each year), will generate the HVBP’s source of ongoing incentive payments.

To help, SHM this month launched the “Hospital Value-Based Purchasing Toolkit.” It will help hospitalists and hospital executives gain a better understanding of what all the information above really means (including performance measures), and what to expect when your performance scores arrive.

The toolkit is different from any other product SHM has ever produced, as subscribers will be added to their own social collaboration network, similar to a tool like LinkedIn, putting them in touch with our panel of experts and other subscribers across the nation. We also will be putting on a series of roundtables: short presentations from a subject or quality-measure expert, followed by an opportunity to ask questions of our HVBP panel. All of the information will be based on best practices pulled from case studies we have spent the last 12 months scouring the country for. Most important, the best practices will be hospitalist-relevant. The free portal to the toolkit, which includes detailed background information on each piece of the program, can be accessed at www.hospitalmedicine.org/hvbp.

A subscription to the full toolkit can be purchased through the SHM store.

The 2010 Affordable Care Act (ACA) mandates a hospital value-based purchasing (VBP) program to begin this time next year. But hospitalists should start preparing now to be integral parts of the program in their hospitals.

Though the ACA provision states the VBP program for hospital payments will begin with discharges on Oct. 1, 2012, performance on clinical quality and patient experience measures began impacting hospitals’ bottom lines on July 1, 2011. The VBP’s “baseline period” actually lasted from July 1, 2009, through March 31, 2010. The performance period started July 1 and will last through March 31, 2012.

On Aug. 2, 2012, CMS will notify hospitals of estimated performance scores, delivering the actual performance scores on Nov. 1, 2012. The result: Payments for any discharge on or after Oct. 1, 2012 (the beginning of fiscal-year 2013), will be paid based on the performance period currently under way.

Hospitalists and program leaders might wonder how an ACA provision could start before the ACA was passed. The HVBP program actually is a transition of the well-established “Reporting Hospital Quality Data for Annual Payment Update,” or pay-for-reporting program, which in 2003 initially provided a 0.4% payment differential for public reporting through the Hospital Compare website. The 2005 Deficit Reduction Act increased the payment to 2%, and authorized CMS to develop a HVBP plan for FY2009—it just didn’t materialize.

The ACA created the HVBP program with the intention of transforming Medicare from a passive payor to an active purchaser of higher-quality, more efficient healthcare. In essence, Medicare wants to pay for performance rather than simply accurate reporting.

So hospitalists once again are faced with partnering with their hospitals to ensure payout. Reducing a hospital’s base operating Medicare Severity Diagnosis Related Groups (MS-DRG) by the applicable percentage, which will be phased in through 2017 (starting at 1% in 2013 and increasing 0.25% each year), will generate the HVBP’s source of ongoing incentive payments.

To help, SHM this month launched the “Hospital Value-Based Purchasing Toolkit.” It will help hospitalists and hospital executives gain a better understanding of what all the information above really means (including performance measures), and what to expect when your performance scores arrive.

The toolkit is different from any other product SHM has ever produced, as subscribers will be added to their own social collaboration network, similar to a tool like LinkedIn, putting them in touch with our panel of experts and other subscribers across the nation. We also will be putting on a series of roundtables: short presentations from a subject or quality-measure expert, followed by an opportunity to ask questions of our HVBP panel. All of the information will be based on best practices pulled from case studies we have spent the last 12 months scouring the country for. Most important, the best practices will be hospitalist-relevant. The free portal to the toolkit, which includes detailed background information on each piece of the program, can be accessed at www.hospitalmedicine.org/hvbp.

A subscription to the full toolkit can be purchased through the SHM store.

In mid-August, the White House released its “Jobs and Economic Security for Rural America” report (www.whitehouse.gov), which underlines what most hospitalists already know: Rural healthcare is ailing. As the report points out, rural residents are more likely to be uninsured or be covered through public sources, while mortality rates have dropped more slowly in rural areas than in urban ones.

One troubling statistic in particular highlights the disparity in access: In 2008, the report notes, rural counties had 62 primary-care physicians (PCPs) per 100,000 residents, while urban areas counted an average of 79.5 PCPs (28% more). Although a number of initiatives have specifically sought to narrow that gap, a lesser-known dynamic between primary care and HM might be exacerbating the shortage.

Over the past few years, several reports and media accounts have suggested that medical students increasingly want practices that are either hospital-based or office-based, but not both. The presence of hospitalists, then, helps rural facilities create an attractive office-hospital divide and place PCPs in practices frequently owned by the hospital. Hospitalists, in other words, might be necessary prerequisites to help lure and retain PCPs.

To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.

—Louis J. O’Boyle, DO, FACP, FHM, medical director, Advanced Inpatient Medicine, P.C., Honesdale, Pa.

Meanwhile, many physicians already in private rural practices are burning out. According to the 2009 Rural Hospitalist Study by the Illinois Critical Access Health Network, “primary-care physicians in rural areas are throwing in the towel of managing their hospitalized patients. More and more, these PCPs unilaterally are announcing to their patients and to the local hospitals they will neither continue to take responsibility for hospitalized patients nor continue to ‘take call.’ ”

Ome Nwanze, MD, one of two hospitalists at the 42-bed Greenville Regional Hospital in Greenville, Ill., says the biggest benefit to being a rural hospitalist is the ability to make a difference in the lives of everyone in the community. Along with patients, Dr. Nwanze includes other doctors as beneficiaries: “The primary-care physicians and specialists are very happy with the program and the difference it makes in their lives.”

Competitive Business

If hospitalists are a natural solution, though, there’s a key problem: Rural communities are struggling to attract them as well. One sign of the difficulty is median salary. Similar to what surveys consistently show for other specialties, rural hospitalists outpace their urban counterparts in median annual salary, at roughly $206,000 versus $187,000, according to Becker’s Hospital Review (overall, hospitalists rank behind most other specialties in salary). The rural-urban divide can be attributed to that old real estate adage: location, location, location. Competition for hospitalist jobs in large cities is generally fierce, while rural communities often have to offer more incentives to attract and retain the doctors they need.

“The two biggest issues that I can see are recruitment and night coverage,” says Louis J. O’Boyle, DO, FACP, FHM, medical director of Advanced Inpatient Medicine (AIM), P.C., in Honesdale, Pa. He and AIM’s four other hospitalists work exclusively with the town’s 98-bed Wayne Memorial Hospital. “It is easier to recruit to a larger city, closer to more activities and residency programs,” Dr. O’Boyle says. “To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.”

Night call can be a particular sticking point: Most rural hospitals aren’t busy enough to justify an FTE nocturnist, he says, putting the onus of night call on full-time hospitalists. Wayne Memorial Hospital is fortunate in that regard, as it averages only one or two admissions a day after 10 p.m., leaving the hospitalists “fresh enough to round the next day,” Dr. O’Boyle says. “However, this still makes rural programs less attractive compared to places that can boast a nocturnist team that eliminates night call.”

Government Assistance

So what has the government done to help address the growing need for more rural hospitalists and other healthcare providers? If the Affordable Care Act’s (ACA) measures proceed as expected, most experts predict a significant drop in the number of uninsured individuals—meaning a surge in both rural and urban demand for care.

According to the White House report, the Department of Health and Human Services has funded 444 rural community health centers since 2009. The ACA has expanded and extended the Medicare Rural Community Hospital Demonstration, providing “an estimated $52 million in enhanced reimbursement for inpatient services at 25 rural hospitals.” And the administration has expanded funding for the National Health Service Corps, which offers doctors scholarships and loan repayment in exchange for a commitment to practice medicine at underserved communities. The corps website boasts that more than 8,000 clinicians are in place, but it also notes that there are “more than 9,000 job vacancies for NHSC primary care medical, dental, and mental health clinicians.” (View the full report at http://nhsc.hrsa.gov/about.) Clearly, loan forgiveness isn’t enough.

Furthermore, the government might be facing a perception problem. Dr. Nwanze describes government support to rural programs as “poor,” while Dr. O’Boyle says he’s not aware of any specific efforts to support rural hospitalists. “There may be some areas, such as giving grants for telemedicine and other tertiary support, but I don’t think those of us in rural programs can sense any impact,” Dr. O’Boyle says. Wayne Memorial Hospital is in an underserved area, he says, and PCPs there do receive loan forgiveness. “However, I was disappointed to learn that those programs are not open to hospitalists.”

Meanwhile, many rural hospitalists face daunting responsibilities. Dr. Nwanze cites “the need to be a jack-of-all-trades and master of all,” and notes the pressure of providing a wide range of services and handling almost all situations with little or no specialist support.

But Dr. O’Boyle also sees opportunity in the autonomy, such as the ability to play a larger role in hospital management and more independence. “We don’t have a plethora of subspecialists looking for business,” he says. “That means much greater responsibility for our hospitalists, who will take care of much sicker patients without specialist backup being readily available.” As a result, advanced duties like ventilator management and the care of complex patients with such diagnoses as acute renal failure or new malignancies are all within the realm of the hospitalist.

“This is an attractive prospect for certain hospitalists who like the idea of taking care of patients without feeling like a captain who merely delegates to multiple specialists,” Dr. O’Boyle says. “Also, the group integrates into hospital committees at every level, and has an overall much larger say in the day-to-day operations, something largely out of the control of a hospitalist group at a large tertiary facility.”

Tech Solutions

Despite the challenges, many rural hospitals are gaining new tools to help them survive, and tech-savvy hospitalists might be big assets. Smaller facilities are increasingly gaining access to electronic health records, while many also are using video links to allow specialists hundreds of miles away to help with diagnoses without having to transfer the patients.

Recent research also suggests that hospital discharges could be better in rural communities.

Bryn Nelson is a freelance medical writer based in Seattle.

In mid-August, the White House released its “Jobs and Economic Security for Rural America” report (www.whitehouse.gov), which underlines what most hospitalists already know: Rural healthcare is ailing. As the report points out, rural residents are more likely to be uninsured or be covered through public sources, while mortality rates have dropped more slowly in rural areas than in urban ones.

One troubling statistic in particular highlights the disparity in access: In 2008, the report notes, rural counties had 62 primary-care physicians (PCPs) per 100,000 residents, while urban areas counted an average of 79.5 PCPs (28% more). Although a number of initiatives have specifically sought to narrow that gap, a lesser-known dynamic between primary care and HM might be exacerbating the shortage.

Over the past few years, several reports and media accounts have suggested that medical students increasingly want practices that are either hospital-based or office-based, but not both. The presence of hospitalists, then, helps rural facilities create an attractive office-hospital divide and place PCPs in practices frequently owned by the hospital. Hospitalists, in other words, might be necessary prerequisites to help lure and retain PCPs.

To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.

—Louis J. O’Boyle, DO, FACP, FHM, medical director, Advanced Inpatient Medicine, P.C., Honesdale, Pa.

Meanwhile, many physicians already in private rural practices are burning out. According to the 2009 Rural Hospitalist Study by the Illinois Critical Access Health Network, “primary-care physicians in rural areas are throwing in the towel of managing their hospitalized patients. More and more, these PCPs unilaterally are announcing to their patients and to the local hospitals they will neither continue to take responsibility for hospitalized patients nor continue to ‘take call.’ ”

Ome Nwanze, MD, one of two hospitalists at the 42-bed Greenville Regional Hospital in Greenville, Ill., says the biggest benefit to being a rural hospitalist is the ability to make a difference in the lives of everyone in the community. Along with patients, Dr. Nwanze includes other doctors as beneficiaries: “The primary-care physicians and specialists are very happy with the program and the difference it makes in their lives.”

Competitive Business

If hospitalists are a natural solution, though, there’s a key problem: Rural communities are struggling to attract them as well. One sign of the difficulty is median salary. Similar to what surveys consistently show for other specialties, rural hospitalists outpace their urban counterparts in median annual salary, at roughly $206,000 versus $187,000, according to Becker’s Hospital Review (overall, hospitalists rank behind most other specialties in salary). The rural-urban divide can be attributed to that old real estate adage: location, location, location. Competition for hospitalist jobs in large cities is generally fierce, while rural communities often have to offer more incentives to attract and retain the doctors they need.

“The two biggest issues that I can see are recruitment and night coverage,” says Louis J. O’Boyle, DO, FACP, FHM, medical director of Advanced Inpatient Medicine (AIM), P.C., in Honesdale, Pa. He and AIM’s four other hospitalists work exclusively with the town’s 98-bed Wayne Memorial Hospital. “It is easier to recruit to a larger city, closer to more activities and residency programs,” Dr. O’Boyle says. “To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.”

Night call can be a particular sticking point: Most rural hospitals aren’t busy enough to justify an FTE nocturnist, he says, putting the onus of night call on full-time hospitalists. Wayne Memorial Hospital is fortunate in that regard, as it averages only one or two admissions a day after 10 p.m., leaving the hospitalists “fresh enough to round the next day,” Dr. O’Boyle says. “However, this still makes rural programs less attractive compared to places that can boast a nocturnist team that eliminates night call.”

Government Assistance

So what has the government done to help address the growing need for more rural hospitalists and other healthcare providers? If the Affordable Care Act’s (ACA) measures proceed as expected, most experts predict a significant drop in the number of uninsured individuals—meaning a surge in both rural and urban demand for care.

According to the White House report, the Department of Health and Human Services has funded 444 rural community health centers since 2009. The ACA has expanded and extended the Medicare Rural Community Hospital Demonstration, providing “an estimated $52 million in enhanced reimbursement for inpatient services at 25 rural hospitals.” And the administration has expanded funding for the National Health Service Corps, which offers doctors scholarships and loan repayment in exchange for a commitment to practice medicine at underserved communities. The corps website boasts that more than 8,000 clinicians are in place, but it also notes that there are “more than 9,000 job vacancies for NHSC primary care medical, dental, and mental health clinicians.” (View the full report at http://nhsc.hrsa.gov/about.) Clearly, loan forgiveness isn’t enough.

Furthermore, the government might be facing a perception problem. Dr. Nwanze describes government support to rural programs as “poor,” while Dr. O’Boyle says he’s not aware of any specific efforts to support rural hospitalists. “There may be some areas, such as giving grants for telemedicine and other tertiary support, but I don’t think those of us in rural programs can sense any impact,” Dr. O’Boyle says. Wayne Memorial Hospital is in an underserved area, he says, and PCPs there do receive loan forgiveness. “However, I was disappointed to learn that those programs are not open to hospitalists.”

Meanwhile, many rural hospitalists face daunting responsibilities. Dr. Nwanze cites “the need to be a jack-of-all-trades and master of all,” and notes the pressure of providing a wide range of services and handling almost all situations with little or no specialist support.

But Dr. O’Boyle also sees opportunity in the autonomy, such as the ability to play a larger role in hospital management and more independence. “We don’t have a plethora of subspecialists looking for business,” he says. “That means much greater responsibility for our hospitalists, who will take care of much sicker patients without specialist backup being readily available.” As a result, advanced duties like ventilator management and the care of complex patients with such diagnoses as acute renal failure or new malignancies are all within the realm of the hospitalist.

“This is an attractive prospect for certain hospitalists who like the idea of taking care of patients without feeling like a captain who merely delegates to multiple specialists,” Dr. O’Boyle says. “Also, the group integrates into hospital committees at every level, and has an overall much larger say in the day-to-day operations, something largely out of the control of a hospitalist group at a large tertiary facility.”

Tech Solutions

Despite the challenges, many rural hospitals are gaining new tools to help them survive, and tech-savvy hospitalists might be big assets. Smaller facilities are increasingly gaining access to electronic health records, while many also are using video links to allow specialists hundreds of miles away to help with diagnoses without having to transfer the patients.

Recent research also suggests that hospital discharges could be better in rural communities.

Bryn Nelson is a freelance medical writer based in Seattle.

In mid-August, the White House released its “Jobs and Economic Security for Rural America” report (www.whitehouse.gov), which underlines what most hospitalists already know: Rural healthcare is ailing. As the report points out, rural residents are more likely to be uninsured or be covered through public sources, while mortality rates have dropped more slowly in rural areas than in urban ones.

One troubling statistic in particular highlights the disparity in access: In 2008, the report notes, rural counties had 62 primary-care physicians (PCPs) per 100,000 residents, while urban areas counted an average of 79.5 PCPs (28% more). Although a number of initiatives have specifically sought to narrow that gap, a lesser-known dynamic between primary care and HM might be exacerbating the shortage.

Over the past few years, several reports and media accounts have suggested that medical students increasingly want practices that are either hospital-based or office-based, but not both. The presence of hospitalists, then, helps rural facilities create an attractive office-hospital divide and place PCPs in practices frequently owned by the hospital. Hospitalists, in other words, might be necessary prerequisites to help lure and retain PCPs.

To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.

—Louis J. O’Boyle, DO, FACP, FHM, medical director, Advanced Inpatient Medicine, P.C., Honesdale, Pa.

Meanwhile, many physicians already in private rural practices are burning out. According to the 2009 Rural Hospitalist Study by the Illinois Critical Access Health Network, “primary-care physicians in rural areas are throwing in the towel of managing their hospitalized patients. More and more, these PCPs unilaterally are announcing to their patients and to the local hospitals they will neither continue to take responsibility for hospitalized patients nor continue to ‘take call.’ ”

Ome Nwanze, MD, one of two hospitalists at the 42-bed Greenville Regional Hospital in Greenville, Ill., says the biggest benefit to being a rural hospitalist is the ability to make a difference in the lives of everyone in the community. Along with patients, Dr. Nwanze includes other doctors as beneficiaries: “The primary-care physicians and specialists are very happy with the program and the difference it makes in their lives.”

Competitive Business

If hospitalists are a natural solution, though, there’s a key problem: Rural communities are struggling to attract them as well. One sign of the difficulty is median salary. Similar to what surveys consistently show for other specialties, rural hospitalists outpace their urban counterparts in median annual salary, at roughly $206,000 versus $187,000, according to Becker’s Hospital Review (overall, hospitalists rank behind most other specialties in salary). The rural-urban divide can be attributed to that old real estate adage: location, location, location. Competition for hospitalist jobs in large cities is generally fierce, while rural communities often have to offer more incentives to attract and retain the doctors they need.

“The two biggest issues that I can see are recruitment and night coverage,” says Louis J. O’Boyle, DO, FACP, FHM, medical director of Advanced Inpatient Medicine (AIM), P.C., in Honesdale, Pa. He and AIM’s four other hospitalists work exclusively with the town’s 98-bed Wayne Memorial Hospital. “It is easier to recruit to a larger city, closer to more activities and residency programs,” Dr. O’Boyle says. “To get someone to come to our area almost always requires some form of local connection. That makes retention paramount.”

Night call can be a particular sticking point: Most rural hospitals aren’t busy enough to justify an FTE nocturnist, he says, putting the onus of night call on full-time hospitalists. Wayne Memorial Hospital is fortunate in that regard, as it averages only one or two admissions a day after 10 p.m., leaving the hospitalists “fresh enough to round the next day,” Dr. O’Boyle says. “However, this still makes rural programs less attractive compared to places that can boast a nocturnist team that eliminates night call.”

Government Assistance

So what has the government done to help address the growing need for more rural hospitalists and other healthcare providers? If the Affordable Care Act’s (ACA) measures proceed as expected, most experts predict a significant drop in the number of uninsured individuals—meaning a surge in both rural and urban demand for care.

According to the White House report, the Department of Health and Human Services has funded 444 rural community health centers since 2009. The ACA has expanded and extended the Medicare Rural Community Hospital Demonstration, providing “an estimated $52 million in enhanced reimbursement for inpatient services at 25 rural hospitals.” And the administration has expanded funding for the National Health Service Corps, which offers doctors scholarships and loan repayment in exchange for a commitment to practice medicine at underserved communities. The corps website boasts that more than 8,000 clinicians are in place, but it also notes that there are “more than 9,000 job vacancies for NHSC primary care medical, dental, and mental health clinicians.” (View the full report at http://nhsc.hrsa.gov/about.) Clearly, loan forgiveness isn’t enough.

Furthermore, the government might be facing a perception problem. Dr. Nwanze describes government support to rural programs as “poor,” while Dr. O’Boyle says he’s not aware of any specific efforts to support rural hospitalists. “There may be some areas, such as giving grants for telemedicine and other tertiary support, but I don’t think those of us in rural programs can sense any impact,” Dr. O’Boyle says. Wayne Memorial Hospital is in an underserved area, he says, and PCPs there do receive loan forgiveness. “However, I was disappointed to learn that those programs are not open to hospitalists.”

Meanwhile, many rural hospitalists face daunting responsibilities. Dr. Nwanze cites “the need to be a jack-of-all-trades and master of all,” and notes the pressure of providing a wide range of services and handling almost all situations with little or no specialist support.

But Dr. O’Boyle also sees opportunity in the autonomy, such as the ability to play a larger role in hospital management and more independence. “We don’t have a plethora of subspecialists looking for business,” he says. “That means much greater responsibility for our hospitalists, who will take care of much sicker patients without specialist backup being readily available.” As a result, advanced duties like ventilator management and the care of complex patients with such diagnoses as acute renal failure or new malignancies are all within the realm of the hospitalist.

“This is an attractive prospect for certain hospitalists who like the idea of taking care of patients without feeling like a captain who merely delegates to multiple specialists,” Dr. O’Boyle says. “Also, the group integrates into hospital committees at every level, and has an overall much larger say in the day-to-day operations, something largely out of the control of a hospitalist group at a large tertiary facility.”

Tech Solutions

Despite the challenges, many rural hospitals are gaining new tools to help them survive, and tech-savvy hospitalists might be big assets. Smaller facilities are increasingly gaining access to electronic health records, while many also are using video links to allow specialists hundreds of miles away to help with diagnoses without having to transfer the patients.

Recent research also suggests that hospital discharges could be better in rural communities.

Bryn Nelson is a freelance medical writer based in Seattle.

Only a sliver of rural hospitals would meet the Center for Medicare & Medicaid Services’ (CMS) criteria to qualify for “meaningful use” of health information technology (HIT), according to a new study, but that could be a window for HM group leaders to take the reins of technology projects.

“[Hospitalists] could be very useful as a champion,” says Brock Slabach, MPH, FACHE, senior vice president for member services at the National Rural Health Association.

The new report showed that 5% of rural hospitals could demonstrate meaningful use of an electronic health record (EHR) system, as opposed to 9% of urban hospitals (J Rural Health. 2011;27(3):329-337). The number dips to 3% for critical-access hospitals. EHR usage often is used as a benchmark for HIT implementation.

CMS has allotted $20 billion for physicians and hospitals to adopt new technologies, but entities must prove they have met “meaningful use” requirements.

Slabach, who spent 20 years as an administrator at Field Memorial Community Hospital in Centreville, Miss., says the major hurdle for HIT implementation at rural hospitals is a lack of knowledge. But if hospitalists can show other physicians the value of HIT, others will follow, he adds.

“Somebody who may not have any informatics background, but is willing to grab a hold of the system, learn its applications, develop methods to spread the knowledge to the rest of the medical staff, is critical,” Slabach says. “It just takes that one or two [people] to get the momentum starting, in terms of a transition to what for a lot of middle-aged and older physicians is a completely new world.”

Only a sliver of rural hospitals would meet the Center for Medicare & Medicaid Services’ (CMS) criteria to qualify for “meaningful use” of health information technology (HIT), according to a new study, but that could be a window for HM group leaders to take the reins of technology projects.

“[Hospitalists] could be very useful as a champion,” says Brock Slabach, MPH, FACHE, senior vice president for member services at the National Rural Health Association.

The new report showed that 5% of rural hospitals could demonstrate meaningful use of an electronic health record (EHR) system, as opposed to 9% of urban hospitals (J Rural Health. 2011;27(3):329-337). The number dips to 3% for critical-access hospitals. EHR usage often is used as a benchmark for HIT implementation.

CMS has allotted $20 billion for physicians and hospitals to adopt new technologies, but entities must prove they have met “meaningful use” requirements.

Slabach, who spent 20 years as an administrator at Field Memorial Community Hospital in Centreville, Miss., says the major hurdle for HIT implementation at rural hospitals is a lack of knowledge. But if hospitalists can show other physicians the value of HIT, others will follow, he adds.

“Somebody who may not have any informatics background, but is willing to grab a hold of the system, learn its applications, develop methods to spread the knowledge to the rest of the medical staff, is critical,” Slabach says. “It just takes that one or two [people] to get the momentum starting, in terms of a transition to what for a lot of middle-aged and older physicians is a completely new world.”

Only a sliver of rural hospitals would meet the Center for Medicare & Medicaid Services’ (CMS) criteria to qualify for “meaningful use” of health information technology (HIT), according to a new study, but that could be a window for HM group leaders to take the reins of technology projects.

“[Hospitalists] could be very useful as a champion,” says Brock Slabach, MPH, FACHE, senior vice president for member services at the National Rural Health Association.

The new report showed that 5% of rural hospitals could demonstrate meaningful use of an electronic health record (EHR) system, as opposed to 9% of urban hospitals (J Rural Health. 2011;27(3):329-337). The number dips to 3% for critical-access hospitals. EHR usage often is used as a benchmark for HIT implementation.

CMS has allotted $20 billion for physicians and hospitals to adopt new technologies, but entities must prove they have met “meaningful use” requirements.

Slabach, who spent 20 years as an administrator at Field Memorial Community Hospital in Centreville, Miss., says the major hurdle for HIT implementation at rural hospitals is a lack of knowledge. But if hospitalists can show other physicians the value of HIT, others will follow, he adds.

“Somebody who may not have any informatics background, but is willing to grab a hold of the system, learn its applications, develop methods to spread the knowledge to the rest of the medical staff, is critical,” Slabach says. “It just takes that one or two [people] to get the momentum starting, in terms of a transition to what for a lot of middle-aged and older physicians is a completely new world.”

A 224-page document full of regulatory jargon might not be a fun summer read. Nevertheless, the U.S. Department of Health and Human Service’s (HHS) mid-July release of proposed rules for state-run health insurance exchanges (HIE) represents a major step toward expanding an insurance pool that could grow by an estimated 24 million Americans over the next eight years.

When the exchanges arrive in 2014, the single biggest impact is likely to be a major expansion of access, with 8.9 million individuals expected to sign up in the first year alone, according to projections by the Congressional Budget Office. A new report by PwC US Health Research Institute forecasts that a stunning 97% of those expected participants will be individuals who currently lack health insurance. A major driver of the new enrollments will be sliding-scale federal subsidies for individuals who earn from 138% to 400% of the federal poverty level, helping them buy insurance through the exchanges.

Experts say the exchanges also could directly impact hospitalists by bringing big changes to hospitals’ reimbursement revenue streams, spurring efforts to improve patient satisfaction metrics and increasing the momentum toward clinical comanagement agreements.

First, though, the public will get a chance to weigh in over rules that have been alternately lauded and derided, largely following the fault lines over the broader package of healthcare reforms. At a news conference set in front of a hardware store, HHS Secretary Kathleen Sebelius said competition on a level playing field would increase the purchasing power and drive down costs for individuals and small businesses. Websites for each of the exchanges would allow consumers to comparison-shop, with HHS ensuring that plans provide minimum standards for coverage. Patient groups, consumer organizations, and some small-business associations have welcomed the HHS rules, despite some concern that the exchanges could be tilted too far in favor of insurers. Overall, many analysts say, the rules have provided a fair amount of latitude over how the HIEs will be established and governed. Some business lobbyists, however, contend that the complex requirements will increase healthcare costs instead of lowering them. A July 16 editorial in the Wall Street Journal blasted the exchange rules as poorly designed and offering too little flexibility for states.

Two state-run ex-changes already exist, in Massachusetts and Utah. As of mid-July, however, states that had enacted laws to establish their own HIEs were outnumbered by those whose legislatures or governors had specifically blocked efforts to do likewise, according to the National Conference of State Legislatures. If states cannot or will not set up an exchange, HHS will step in and do it for them.

Reversal of Fortune?

Regardless of who ultimately oversees the exchanges, studies have begun suggesting who the most likely participants might be. An analysis by the Kaiser Family Foundation suggests that the newly insured are likely to be relatively older, less educated, more racially diverse, and in poorer health than those who currently carry private insurance but have fewer diagnosed conditions (www.kff.org/health reform/8147.cfm). Just as analysts, such as PwC, say that insurers will need to change their business strategy to lure and retain consumers, hospitals might need to redouble efforts to ensure high quality and patient satisfaction among a patient demographic that might be harder to please.

Mark Williams, MD, FACP, FHM, professor and chief of the division of hospital medicine at Northwestern University’s Feinberg School of Medicine in Chicago, says the shift could represent a boon for hospitals that have been forced to maximize efficiency. “In general, those hospitals that have a poorer payor mix have tended to become very efficient, and so they make money off of Medicare patients,” Dr. Williams, a former SHM president, says. “This is fascinating because, on the one hand, there may be a lot of patients for whom hospitalists can now get paid because they’re insured. But I personally think that, simultaneously, we’re going to be seeing cutbacks in payments for other patients who have private insurance.”

For some hospitals, the net effect on revenue might not be materially different, though Dr. Williams sees a potentially sizable benefit for “safety net” hospitals that care for a large proportion of uninsured patients and excel in making the most of limited resources. Some investors apparently agree. Last December, Nashville, Tenn.-based Vanguard Health Systems finalized a deal to buy Detroit Medical Center, with a total investment of nearly $1.5 billion. Dr. Williams says the expectation is that the medical center will suddenly see many more insured patients via an HIE. The result could be a dramatic boost to its finances.

Wealthier hospitals, by contrast, have had less incentive to maximize efficiency—and now are worried by the potential financial impacts of insurance exchanges. “Your classic, highly profitable community hospital that has a good payor mix loses money on Medicare patients and tends to subsidize that with their private patients,” Dr. Williams says. “The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.”

The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.

—Mark Williams, MD, FACP, SFHM, chief, division of hospital medicine, Feinberg School of Medicine, Northwestern University, Chicago

Satisfaction Times Two

With Medicare’s value-based purchasing initiative on its way, hospitals are ramping up their attention to patient satisfaction scores. So how will an influx of potentially older and sicker patients insured through the exchanges affect hospitalists’ scores? No one knows, but because hospitalists already are known for their expertise in treating this very demographic, some experts expect hospitals to lean on them more for leading quality and satisfaction initiatives. This reliance could represent a major opportunity for HM, but faulty performance metrics could also bring danger (read more about this topic in next month’s The Hospitalist).

Cherilyn Murer, president and CEO of Joliet, Ill.-based Murer Consultants Inc., says the expected shift in the nature of inpatients could accelerate efforts to be more accurate about physicians’ performance measures. “Patients who may be in the ICU are at a higher level of crisis than a person who’s in and out for an appendectomy, and yet we’re using the same tool of satisfaction,” she says. Furthermore, she adds, many factors that contribute to patient satisfaction are highly subjective and have nothing to do with a specific physician. “We have to really question the tools now, moreso than only questioning the participation and the outcome,” she says. As with other aspects of healthcare reform, Murer says, the looming arrival of exchanges also should be prompting hospitalists to ask themselves: “What’s our game plan now?” One compelling answer, she contends, is a clinical comanagement agreement that takes a longer-term view of doctors’ relationships with hospitals and gives them more control over decision-making. After all, if HM is taking care of “the sickest of the sick patients,” she says, a comanagement agreement can mean more say in factors that will directly impact their jobs over the long haul. Strategic direction of product lines, space, and equipment-buying decisions are just a few examples.

Murer ultimately sees clinical comanagement as a precursor to more widespread bundling of payments to hospitals and physicians. The mix of private and public insurance reimbursements, already in flux, might be further clouded by the arrival of HIEs. But solidifying hospital-hospitalist alignment with a flexible comanagement agreement, she says, can offer some reassurance over job structure, rewards, and authority as healthcare continues hurtling toward profound change.

Bryn Nelson is a freelance medical writer based in Seattle.

A 224-page document full of regulatory jargon might not be a fun summer read. Nevertheless, the U.S. Department of Health and Human Service’s (HHS) mid-July release of proposed rules for state-run health insurance exchanges (HIE) represents a major step toward expanding an insurance pool that could grow by an estimated 24 million Americans over the next eight years.

When the exchanges arrive in 2014, the single biggest impact is likely to be a major expansion of access, with 8.9 million individuals expected to sign up in the first year alone, according to projections by the Congressional Budget Office. A new report by PwC US Health Research Institute forecasts that a stunning 97% of those expected participants will be individuals who currently lack health insurance. A major driver of the new enrollments will be sliding-scale federal subsidies for individuals who earn from 138% to 400% of the federal poverty level, helping them buy insurance through the exchanges.

Experts say the exchanges also could directly impact hospitalists by bringing big changes to hospitals’ reimbursement revenue streams, spurring efforts to improve patient satisfaction metrics and increasing the momentum toward clinical comanagement agreements.

First, though, the public will get a chance to weigh in over rules that have been alternately lauded and derided, largely following the fault lines over the broader package of healthcare reforms. At a news conference set in front of a hardware store, HHS Secretary Kathleen Sebelius said competition on a level playing field would increase the purchasing power and drive down costs for individuals and small businesses. Websites for each of the exchanges would allow consumers to comparison-shop, with HHS ensuring that plans provide minimum standards for coverage. Patient groups, consumer organizations, and some small-business associations have welcomed the HHS rules, despite some concern that the exchanges could be tilted too far in favor of insurers. Overall, many analysts say, the rules have provided a fair amount of latitude over how the HIEs will be established and governed. Some business lobbyists, however, contend that the complex requirements will increase healthcare costs instead of lowering them. A July 16 editorial in the Wall Street Journal blasted the exchange rules as poorly designed and offering too little flexibility for states.

Two state-run ex-changes already exist, in Massachusetts and Utah. As of mid-July, however, states that had enacted laws to establish their own HIEs were outnumbered by those whose legislatures or governors had specifically blocked efforts to do likewise, according to the National Conference of State Legislatures. If states cannot or will not set up an exchange, HHS will step in and do it for them.

Reversal of Fortune?

Regardless of who ultimately oversees the exchanges, studies have begun suggesting who the most likely participants might be. An analysis by the Kaiser Family Foundation suggests that the newly insured are likely to be relatively older, less educated, more racially diverse, and in poorer health than those who currently carry private insurance but have fewer diagnosed conditions (www.kff.org/health reform/8147.cfm). Just as analysts, such as PwC, say that insurers will need to change their business strategy to lure and retain consumers, hospitals might need to redouble efforts to ensure high quality and patient satisfaction among a patient demographic that might be harder to please.

Mark Williams, MD, FACP, FHM, professor and chief of the division of hospital medicine at Northwestern University’s Feinberg School of Medicine in Chicago, says the shift could represent a boon for hospitals that have been forced to maximize efficiency. “In general, those hospitals that have a poorer payor mix have tended to become very efficient, and so they make money off of Medicare patients,” Dr. Williams, a former SHM president, says. “This is fascinating because, on the one hand, there may be a lot of patients for whom hospitalists can now get paid because they’re insured. But I personally think that, simultaneously, we’re going to be seeing cutbacks in payments for other patients who have private insurance.”

For some hospitals, the net effect on revenue might not be materially different, though Dr. Williams sees a potentially sizable benefit for “safety net” hospitals that care for a large proportion of uninsured patients and excel in making the most of limited resources. Some investors apparently agree. Last December, Nashville, Tenn.-based Vanguard Health Systems finalized a deal to buy Detroit Medical Center, with a total investment of nearly $1.5 billion. Dr. Williams says the expectation is that the medical center will suddenly see many more insured patients via an HIE. The result could be a dramatic boost to its finances.

Wealthier hospitals, by contrast, have had less incentive to maximize efficiency—and now are worried by the potential financial impacts of insurance exchanges. “Your classic, highly profitable community hospital that has a good payor mix loses money on Medicare patients and tends to subsidize that with their private patients,” Dr. Williams says. “The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.”

The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.

—Mark Williams, MD, FACP, SFHM, chief, division of hospital medicine, Feinberg School of Medicine, Northwestern University, Chicago

Satisfaction Times Two

With Medicare’s value-based purchasing initiative on its way, hospitals are ramping up their attention to patient satisfaction scores. So how will an influx of potentially older and sicker patients insured through the exchanges affect hospitalists’ scores? No one knows, but because hospitalists already are known for their expertise in treating this very demographic, some experts expect hospitals to lean on them more for leading quality and satisfaction initiatives. This reliance could represent a major opportunity for HM, but faulty performance metrics could also bring danger (read more about this topic in next month’s The Hospitalist).

Cherilyn Murer, president and CEO of Joliet, Ill.-based Murer Consultants Inc., says the expected shift in the nature of inpatients could accelerate efforts to be more accurate about physicians’ performance measures. “Patients who may be in the ICU are at a higher level of crisis than a person who’s in and out for an appendectomy, and yet we’re using the same tool of satisfaction,” she says. Furthermore, she adds, many factors that contribute to patient satisfaction are highly subjective and have nothing to do with a specific physician. “We have to really question the tools now, moreso than only questioning the participation and the outcome,” she says. As with other aspects of healthcare reform, Murer says, the looming arrival of exchanges also should be prompting hospitalists to ask themselves: “What’s our game plan now?” One compelling answer, she contends, is a clinical comanagement agreement that takes a longer-term view of doctors’ relationships with hospitals and gives them more control over decision-making. After all, if HM is taking care of “the sickest of the sick patients,” she says, a comanagement agreement can mean more say in factors that will directly impact their jobs over the long haul. Strategic direction of product lines, space, and equipment-buying decisions are just a few examples.

Murer ultimately sees clinical comanagement as a precursor to more widespread bundling of payments to hospitals and physicians. The mix of private and public insurance reimbursements, already in flux, might be further clouded by the arrival of HIEs. But solidifying hospital-hospitalist alignment with a flexible comanagement agreement, she says, can offer some reassurance over job structure, rewards, and authority as healthcare continues hurtling toward profound change.

Bryn Nelson is a freelance medical writer based in Seattle.

A 224-page document full of regulatory jargon might not be a fun summer read. Nevertheless, the U.S. Department of Health and Human Service’s (HHS) mid-July release of proposed rules for state-run health insurance exchanges (HIE) represents a major step toward expanding an insurance pool that could grow by an estimated 24 million Americans over the next eight years.

When the exchanges arrive in 2014, the single biggest impact is likely to be a major expansion of access, with 8.9 million individuals expected to sign up in the first year alone, according to projections by the Congressional Budget Office. A new report by PwC US Health Research Institute forecasts that a stunning 97% of those expected participants will be individuals who currently lack health insurance. A major driver of the new enrollments will be sliding-scale federal subsidies for individuals who earn from 138% to 400% of the federal poverty level, helping them buy insurance through the exchanges.

Experts say the exchanges also could directly impact hospitalists by bringing big changes to hospitals’ reimbursement revenue streams, spurring efforts to improve patient satisfaction metrics and increasing the momentum toward clinical comanagement agreements.

First, though, the public will get a chance to weigh in over rules that have been alternately lauded and derided, largely following the fault lines over the broader package of healthcare reforms. At a news conference set in front of a hardware store, HHS Secretary Kathleen Sebelius said competition on a level playing field would increase the purchasing power and drive down costs for individuals and small businesses. Websites for each of the exchanges would allow consumers to comparison-shop, with HHS ensuring that plans provide minimum standards for coverage. Patient groups, consumer organizations, and some small-business associations have welcomed the HHS rules, despite some concern that the exchanges could be tilted too far in favor of insurers. Overall, many analysts say, the rules have provided a fair amount of latitude over how the HIEs will be established and governed. Some business lobbyists, however, contend that the complex requirements will increase healthcare costs instead of lowering them. A July 16 editorial in the Wall Street Journal blasted the exchange rules as poorly designed and offering too little flexibility for states.

Two state-run ex-changes already exist, in Massachusetts and Utah. As of mid-July, however, states that had enacted laws to establish their own HIEs were outnumbered by those whose legislatures or governors had specifically blocked efforts to do likewise, according to the National Conference of State Legislatures. If states cannot or will not set up an exchange, HHS will step in and do it for them.

Reversal of Fortune?

Regardless of who ultimately oversees the exchanges, studies have begun suggesting who the most likely participants might be. An analysis by the Kaiser Family Foundation suggests that the newly insured are likely to be relatively older, less educated, more racially diverse, and in poorer health than those who currently carry private insurance but have fewer diagnosed conditions (www.kff.org/health reform/8147.cfm). Just as analysts, such as PwC, say that insurers will need to change their business strategy to lure and retain consumers, hospitals might need to redouble efforts to ensure high quality and patient satisfaction among a patient demographic that might be harder to please.

Mark Williams, MD, FACP, FHM, professor and chief of the division of hospital medicine at Northwestern University’s Feinberg School of Medicine in Chicago, says the shift could represent a boon for hospitals that have been forced to maximize efficiency. “In general, those hospitals that have a poorer payor mix have tended to become very efficient, and so they make money off of Medicare patients,” Dr. Williams, a former SHM president, says. “This is fascinating because, on the one hand, there may be a lot of patients for whom hospitalists can now get paid because they’re insured. But I personally think that, simultaneously, we’re going to be seeing cutbacks in payments for other patients who have private insurance.”

For some hospitals, the net effect on revenue might not be materially different, though Dr. Williams sees a potentially sizable benefit for “safety net” hospitals that care for a large proportion of uninsured patients and excel in making the most of limited resources. Some investors apparently agree. Last December, Nashville, Tenn.-based Vanguard Health Systems finalized a deal to buy Detroit Medical Center, with a total investment of nearly $1.5 billion. Dr. Williams says the expectation is that the medical center will suddenly see many more insured patients via an HIE. The result could be a dramatic boost to its finances.

Wealthier hospitals, by contrast, have had less incentive to maximize efficiency—and now are worried by the potential financial impacts of insurance exchanges. “Your classic, highly profitable community hospital that has a good payor mix loses money on Medicare patients and tends to subsidize that with their private patients,” Dr. Williams says. “The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.”

The wealthier hospitals are nervous because they’re worried that this entire health insurance exchange is going to put downward pressure on reimbursements from the private insurers.

—Mark Williams, MD, FACP, SFHM, chief, division of hospital medicine, Feinberg School of Medicine, Northwestern University, Chicago

Satisfaction Times Two

With Medicare’s value-based purchasing initiative on its way, hospitals are ramping up their attention to patient satisfaction scores. So how will an influx of potentially older and sicker patients insured through the exchanges affect hospitalists’ scores? No one knows, but because hospitalists already are known for their expertise in treating this very demographic, some experts expect hospitals to lean on them more for leading quality and satisfaction initiatives. This reliance could represent a major opportunity for HM, but faulty performance metrics could also bring danger (read more about this topic in next month’s The Hospitalist).

Cherilyn Murer, president and CEO of Joliet, Ill.-based Murer Consultants Inc., says the expected shift in the nature of inpatients could accelerate efforts to be more accurate about physicians’ performance measures. “Patients who may be in the ICU are at a higher level of crisis than a person who’s in and out for an appendectomy, and yet we’re using the same tool of satisfaction,” she says. Furthermore, she adds, many factors that contribute to patient satisfaction are highly subjective and have nothing to do with a specific physician. “We have to really question the tools now, moreso than only questioning the participation and the outcome,” she says. As with other aspects of healthcare reform, Murer says, the looming arrival of exchanges also should be prompting hospitalists to ask themselves: “What’s our game plan now?” One compelling answer, she contends, is a clinical comanagement agreement that takes a longer-term view of doctors’ relationships with hospitals and gives them more control over decision-making. After all, if HM is taking care of “the sickest of the sick patients,” she says, a comanagement agreement can mean more say in factors that will directly impact their jobs over the long haul. Strategic direction of product lines, space, and equipment-buying decisions are just a few examples.

Murer ultimately sees clinical comanagement as a precursor to more widespread bundling of payments to hospitals and physicians. The mix of private and public insurance reimbursements, already in flux, might be further clouded by the arrival of HIEs. But solidifying hospital-hospitalist alignment with a flexible comanagement agreement, she says, can offer some reassurance over job structure, rewards, and authority as healthcare continues hurtling toward profound change.

Bryn Nelson is a freelance medical writer based in Seattle.

Section 10332 of the Affordable Care Act (ACA) allows the Centers for Medicare & Medicaid Services (CMS) to provide Medicare claims data to “qualified” private organizations for the purpose of reporting provider performance information. On June 8, CMS issued a proposed rule that includes tight parameters on who qualifies to receive the data, beneficiary privacy protections, and the rights of providers to correct errors before reports are made public. CMS also included estimates of the fees to receive the claims data: $275,000.

The fees are not a price as much as an effort to recoup the expense associated with providing the data. CMS has interpreted expenses to include the cost of providing technical assistance, processing qualified entities’ applications, and monitoring of qualified entities to ensure appropriate use of the data and appropriate adherence to data privacy and security standards.

For hospitalists, the opportunity to access this data presents both positives and negatives. On the positive side, research and QI data sources will be greatly expanded. Currently, it is not unheard of to receive multiple, sometimes contradictory, reports from different sources because they are based on different data from piecemeal claims or measures. This initiative grants the ability to combine private sector data with the enormous amount of data at CMS, which should result in the more useful quality reports. This broad pool of data also will allow for a new level of accuracy when it comes to analyzing quality, efficiency, and resource use.

On the negative side, the expense of obtaining this data could be cost-prohibitive for smaller organizations, and access could end up being limited to those with deeper pockets. Additionally, it will be critical to identify errors and inaccuracies in reports. As a result, hospitalists could be forced to spend time and resources reviewing privately produced performance reports before they are made public.

There is potential in this initiative to change the quality measurement landscape. If done well, the opportunity to combine claims data from both Medicare and the private sector will produce a wealth of information related to how providers and suppliers are performing.

SHM will be voicing support for the concept because it serves to increase performance transparency, not just for hospitalists but for all stakeholders.

Ready to Lead Hospital Medicine?

Join an SHM Committee

Dr. Li

When Kim Dickinson, MD, joined SHM’s Administrators Committee, it expanded her network of HM professionals. It also gave her an opportunity to take some of the best practices in the specialty to others within her company.

For other hospitalists interested in flexing leadership muscles and growing their network of hospitalists, now is the time to apply for positions on more than 30 of SHM’s committees and task forces. Potential applicants are encouraged to apply before January 2012.

Committee information and applications are available at www.hospitalmedicine.org/committees.

“SHM’s committees and task forces are the engines that drive SHM toward a vision of transforming healthcare and revolutionizing patient care in the hospital,” says SHM president Joseph Li, MD, SFHM. “And the broad span of issues covered by our committees gives every aspiring hospitalist an opportunity to channel their energy into something meaningful.”

Dr. Dickinson sees committee participation as a way to learn and grow.

“I always tell people about being on committees,” she says. “It’s a good learning experience for people, and it exposes you to a wide variety of people and different perspectives. What applies to a four-member group is very different than what applies to 40-member group.

“A lot of learning that can come from that.”

SHM’s Atchley Leadership Fund Supports the Next Generation of Hospitalist Leaders

Dr. Atchley

Hospitalist Bill Atchley, MD, SFHM, was there at the beginning of SHM’s Leadership Academy. Now, he’s helping it to endure.

After participating in the first Leadership Academy, he was hooked on the concept and later became a course facilitator.

As much as Bill has been a fixture at Leadership Academy, so has his wife, Anne. There, she saw firsthand her husband’s passion not only for the specialty, but also his passion for helping groom the next generation of hospitalist leaders. The academies also were the place where many got to see Bill and Anne together after hours, a scene that reminds hospitalists that leadership is not a solitary journey, but one to embark on with both colleagues and those closest to us.

When Anne passed in December 2009, following a valiant fight against cancer, Bill worked with SHM to create the Atchley Leadership Fund. The fund honors Anne’s memory by providing partial scholarships for Leadership Academy participants.

Hospitalists can join Bill in paying tribute to Anne and paving the way for new hospitalist leaders in healthcare by making a tax-free donation to the Atchley Leadership Fund. For more information, visit www.hospitalmedicine.org/atchley.

Section 10332 of the Affordable Care Act (ACA) allows the Centers for Medicare & Medicaid Services (CMS) to provide Medicare claims data to “qualified” private organizations for the purpose of reporting provider performance information. On June 8, CMS issued a proposed rule that includes tight parameters on who qualifies to receive the data, beneficiary privacy protections, and the rights of providers to correct errors before reports are made public. CMS also included estimates of the fees to receive the claims data: $275,000.

The fees are not a price as much as an effort to recoup the expense associated with providing the data. CMS has interpreted expenses to include the cost of providing technical assistance, processing qualified entities’ applications, and monitoring of qualified entities to ensure appropriate use of the data and appropriate adherence to data privacy and security standards.

For hospitalists, the opportunity to access this data presents both positives and negatives. On the positive side, research and QI data sources will be greatly expanded. Currently, it is not unheard of to receive multiple, sometimes contradictory, reports from different sources because they are based on different data from piecemeal claims or measures. This initiative grants the ability to combine private sector data with the enormous amount of data at CMS, which should result in the more useful quality reports. This broad pool of data also will allow for a new level of accuracy when it comes to analyzing quality, efficiency, and resource use.

On the negative side, the expense of obtaining this data could be cost-prohibitive for smaller organizations, and access could end up being limited to those with deeper pockets. Additionally, it will be critical to identify errors and inaccuracies in reports. As a result, hospitalists could be forced to spend time and resources reviewing privately produced performance reports before they are made public.

There is potential in this initiative to change the quality measurement landscape. If done well, the opportunity to combine claims data from both Medicare and the private sector will produce a wealth of information related to how providers and suppliers are performing.

SHM will be voicing support for the concept because it serves to increase performance transparency, not just for hospitalists but for all stakeholders.

Ready to Lead Hospital Medicine?

Join an SHM Committee

Dr. Li

When Kim Dickinson, MD, joined SHM’s Administrators Committee, it expanded her network of HM professionals. It also gave her an opportunity to take some of the best practices in the specialty to others within her company.

For other hospitalists interested in flexing leadership muscles and growing their network of hospitalists, now is the time to apply for positions on more than 30 of SHM’s committees and task forces. Potential applicants are encouraged to apply before January 2012.

Committee information and applications are available at www.hospitalmedicine.org/committees.

“SHM’s committees and task forces are the engines that drive SHM toward a vision of transforming healthcare and revolutionizing patient care in the hospital,” says SHM president Joseph Li, MD, SFHM. “And the broad span of issues covered by our committees gives every aspiring hospitalist an opportunity to channel their energy into something meaningful.”

Dr. Dickinson sees committee participation as a way to learn and grow.

“I always tell people about being on committees,” she says. “It’s a good learning experience for people, and it exposes you to a wide variety of people and different perspectives. What applies to a four-member group is very different than what applies to 40-member group.

“A lot of learning that can come from that.”

SHM’s Atchley Leadership Fund Supports the Next Generation of Hospitalist Leaders

Dr. Atchley

Hospitalist Bill Atchley, MD, SFHM, was there at the beginning of SHM’s Leadership Academy. Now, he’s helping it to endure.

After participating in the first Leadership Academy, he was hooked on the concept and later became a course facilitator.

As much as Bill has been a fixture at Leadership Academy, so has his wife, Anne. There, she saw firsthand her husband’s passion not only for the specialty, but also his passion for helping groom the next generation of hospitalist leaders. The academies also were the place where many got to see Bill and Anne together after hours, a scene that reminds hospitalists that leadership is not a solitary journey, but one to embark on with both colleagues and those closest to us.

When Anne passed in December 2009, following a valiant fight against cancer, Bill worked with SHM to create the Atchley Leadership Fund. The fund honors Anne’s memory by providing partial scholarships for Leadership Academy participants.

Hospitalists can join Bill in paying tribute to Anne and paving the way for new hospitalist leaders in healthcare by making a tax-free donation to the Atchley Leadership Fund. For more information, visit www.hospitalmedicine.org/atchley.

Section 10332 of the Affordable Care Act (ACA) allows the Centers for Medicare & Medicaid Services (CMS) to provide Medicare claims data to “qualified” private organizations for the purpose of reporting provider performance information. On June 8, CMS issued a proposed rule that includes tight parameters on who qualifies to receive the data, beneficiary privacy protections, and the rights of providers to correct errors before reports are made public. CMS also included estimates of the fees to receive the claims data: $275,000.

The fees are not a price as much as an effort to recoup the expense associated with providing the data. CMS has interpreted expenses to include the cost of providing technical assistance, processing qualified entities’ applications, and monitoring of qualified entities to ensure appropriate use of the data and appropriate adherence to data privacy and security standards.

For hospitalists, the opportunity to access this data presents both positives and negatives. On the positive side, research and QI data sources will be greatly expanded. Currently, it is not unheard of to receive multiple, sometimes contradictory, reports from different sources because they are based on different data from piecemeal claims or measures. This initiative grants the ability to combine private sector data with the enormous amount of data at CMS, which should result in the more useful quality reports. This broad pool of data also will allow for a new level of accuracy when it comes to analyzing quality, efficiency, and resource use.

On the negative side, the expense of obtaining this data could be cost-prohibitive for smaller organizations, and access could end up being limited to those with deeper pockets. Additionally, it will be critical to identify errors and inaccuracies in reports. As a result, hospitalists could be forced to spend time and resources reviewing privately produced performance reports before they are made public.

There is potential in this initiative to change the quality measurement landscape. If done well, the opportunity to combine claims data from both Medicare and the private sector will produce a wealth of information related to how providers and suppliers are performing.

SHM will be voicing support for the concept because it serves to increase performance transparency, not just for hospitalists but for all stakeholders.

Ready to Lead Hospital Medicine?

Join an SHM Committee

Dr. Li

When Kim Dickinson, MD, joined SHM’s Administrators Committee, it expanded her network of HM professionals. It also gave her an opportunity to take some of the best practices in the specialty to others within her company.

For other hospitalists interested in flexing leadership muscles and growing their network of hospitalists, now is the time to apply for positions on more than 30 of SHM’s committees and task forces. Potential applicants are encouraged to apply before January 2012.

Committee information and applications are available at www.hospitalmedicine.org/committees.

“SHM’s committees and task forces are the engines that drive SHM toward a vision of transforming healthcare and revolutionizing patient care in the hospital,” says SHM president Joseph Li, MD, SFHM. “And the broad span of issues covered by our committees gives every aspiring hospitalist an opportunity to channel their energy into something meaningful.”

Dr. Dickinson sees committee participation as a way to learn and grow.

“I always tell people about being on committees,” she says. “It’s a good learning experience for people, and it exposes you to a wide variety of people and different perspectives. What applies to a four-member group is very different than what applies to 40-member group.

“A lot of learning that can come from that.”

SHM’s Atchley Leadership Fund Supports the Next Generation of Hospitalist Leaders

Dr. Atchley

Hospitalist Bill Atchley, MD, SFHM, was there at the beginning of SHM’s Leadership Academy. Now, he’s helping it to endure.

After participating in the first Leadership Academy, he was hooked on the concept and later became a course facilitator.

As much as Bill has been a fixture at Leadership Academy, so has his wife, Anne. There, she saw firsthand her husband’s passion not only for the specialty, but also his passion for helping groom the next generation of hospitalist leaders. The academies also were the place where many got to see Bill and Anne together after hours, a scene that reminds hospitalists that leadership is not a solitary journey, but one to embark on with both colleagues and those closest to us.

When Anne passed in December 2009, following a valiant fight against cancer, Bill worked with SHM to create the Atchley Leadership Fund. The fund honors Anne’s memory by providing partial scholarships for Leadership Academy participants.

Hospitalists can join Bill in paying tribute to Anne and paving the way for new hospitalist leaders in healthcare by making a tax-free donation to the Atchley Leadership Fund. For more information, visit www.hospitalmedicine.org/atchley.