Stopping the Over Charging in the U.S. Health Care System

How Profit-taking Distorts Health Care Delivery in America
Recently, a Public Broadcasting Station (Channel 9) featured a story on a for-profit hospital group which was using obscure diagnostic codes to achieve higher Medicare payments. The level of unethical and fraudulent activity was so egregious that more than one of their billing coders quit their jobs and testified against their former employer. The Wall Street Journal has also reported on fraudulent Medicare billing, including requisitioning public records from CMS(Medicare) and identifying abusive billing practices by multiple clinicians. For example, the New York City osteopath who billed Medicare 2 million for family medicine, when this was not the nature of her medical practice. WSJ staffers examined the Medicare database and uncovered 25 billing codes for an array of expensive medical tests which were regularly performed by 20 other clinicians in the country. Of that group, 33% have already been convicted of fraud, have undergone professional ethics investigations, or worked in the same firm as the convicted physicians. It is safe to say that this high correlation of billing blips is no accident. Unfortunately, because the American Medical Association prohibits the government from disclosing clinician compensation, even if billing practices are fraudulent, those physicians are not publicly named. Basically, this means a lot of people are still getting away with fraud. This article reviews how profit-taking motives distort the U.S. health care system and does not contribute to health care improvement.

First of all, it is legal to deliver health care services and make a profit in the United States, but it is not legal to defraud the government or private sector insurance companies by making false claims to incur higher reimbursements. In plain language, this is known as stealing and this article will show how the incentives to steal are so high in the current U.S. health care system that despite penalties, including jail sentences, the phenomena continues to rob money from all U.S. health care payers. The payers are the individuals who must obtain health care services at inflated prices to subsidize excessive profiteering and fraudulent activities in many sectors of the national health care milieu.

By focusing on changing the alignment of reimbursements for many health care providers from a volume-based principle to outcome-linked measures we will be able to identify the outliers in the shell game of medical monopoly. Several aspects of the 2010 health care reforms seek to address the abuses of health care reimbursement in the country, including more stringent requirements for health insurance company financial reporting of premium payment utilization. Additionally, there are financial incentives for clinicians who achieve better outcomes for targeted medical conditions under the Shared Savings Rules. And finally, the systemic review of medical supplier over-charging is also included in the reform provisions.

Accountable Care & Incentives for Health Care Outcomes
Accountable Care rules for hospitals and integrated health care organizations include Shared Savings methodology or a bonus if you will, for those medical groups which produce desirable clinical outcomes. This realignment in Medicare & Medicaid reimbursements will ultimately save U.S. taxpayers money for federally funded health care programs. In other words this changes the equation from paying for volume to actually paying for clinical performance, and the best performers will receive more money than those who have poorer clinical quality. For example, if your facility has more hospital re-admissions for a specific procedure than the evidence shows is desirable, that will impact your reimbursement. This is a good thing for the country, although I am sure some health care providers are concerned about the ramifications for their practices. Clinics and hospitals are not required to become designated as Accountable Care Organizations at this time, but the pay-for-performance methodology will ultimately be spread throughout the country as organizations respond to this trend.

Creating Efficiencies System-wide
As previously reported in 2010, the establishment of the Comparative Research Institute seeks to review system-wide data on medical equipment suppliers and clinician practices, in order to optimize value for U.S. taxpayers who fund federal health care programs like Medicare. Though this has been criticized as just another government agency, the purpose is to look across the health care system of disparate providers including; medical equipment suppliers, purveyors of high-tech devices, and clinics to find ways to save money for the entire system. Certainly not everyone will be happy with this process, but one wonders how many of them are in fact the excessive profiteers.

Like it or not, several components of the 2010 landmark health care legislation are here to stay because they profoundly impact Medicare and Medicaid programs, which consumes 32% of the 2011 federal budget. We do need to spend taxpayer money more wisely and part of that process includes scrutinizing all of the components of health care delivery. The government oversight is necessary to curtail cheating and other criminal activities.

A Clinical Case: How America’s Private Health Care System Is Not Producing Best Practice Results for Kidney Dialysis
A basic tenant of a capitalist economic system creates a disproportionate incentive towards money making activities which often fall short of optimal patient care. A good example of this capitalist infusion is the kidney dialysis system in the United States, which sprang up because of the congressional ruling to cover end-stage-renal-disease under the Medicare umbrella in the 1960’s. The entities that seized this “new market” were largely for-profit corporations. For those of you who do not know, kidney dialysis is a mechanical cleansing process which is lifesaving for those whose kidneys have ceased to support their renal systems. International data on dialysis treatment shows that Americans on dialysis do not survive as long as patients in other industrialized countries and also experience more clinical complications. This should come as no surprise when the corresponding American health care incentives are based only on providing the dialysis procedure, not optimizing patient health.
For the profitable dialysis centers, like DaVita, business has been brisk as the American population undergoing dialysis has grown from 11,000 people at inception to over 300,000 people today. Each patient on dialysis brings in about $72,000 just for that procedure, so the industry is worth billions. Examples of how the maximization of profit has impaired clinical processes include the dialysis center protocols which discourage the use of fresh kidney processing devices for each patient and thereby greatly increase the chance of infection. So some MBA figured out they could save their organization money by reusing artificial kidneys on a critically ill population and this has become a standard of practice.
Another example of a U.S. renal failure outcome which differs from other global practices is the limited number of dialysis patients who use the peritoneal process, which can improve the individual’s the quality of life. Clinicians have suggested that American patients are often too ill to be eligible for the home-based peritoneal process. As a society which is paying for this treatment, we need to be asking what we can do to treat these people earlier in their disease progress, so they may become eligible for less taxing treatments(and less expensive). Too often the U.S. health care system steps in literally at the “end-stage-of-treatment” because our system of economic reinforcements only assures payment at that time. This dichotomy is what needs to change.

Evidence-based planning which I have previously written about (and continues to be one of the most popular articles for this readership) is all about reviewing appropriate scientific data to discern the optimal blend of clinical intervention and patient outcomes to benefit a population. This process is what we need to be doing as a nation in order to optimize health care services for the entire population.

Election Implications
Since 2012 is an election year, when you start to hear the rhetoric of “getting the government off our backs” remember that doesn’t mean you will pay less for your health care premiums or services. In our blended system of public and private health care services, we must have an external audit and enforcement arm and the government does this for us all. Like it or not, our government does perform essential services which benefit the average American. The 2012 election mantra should be focused on creating government oversight linked to performance outcomes, not merely less government.

Basic Economics
Anyone who has taken basic economics coursework knows that government intervention occurs when there is a failure-to-perform in the private sector. Certainly, the executives at Premera Blue Cross understand this principle, which also explains that entity’s rush to embraces some changes in their health insurance model. The old insurance company model was a paternalistic one where insurers dictated what they would cover, but the new model requires further explanation and reporting of clinical results, because of government requirements. Reporting results is a good thing for the health care consumer and the edict to explain them in an understandable transparent manner is a victory for health care consumers. This transparency also includes the disclosure of the commissions your insurance agent makes and there is nothing to be ashamed of there, if your agent or broker is working on your behalf and is not over charging (group insurance commissions are negotiated for experience-rated groups). In the truest sense of an open market, price information is available to the consumer who is then empowered to choose an agent or service provider for both the price and the value. Hopefully the disclosure will extend to voluntary health and accident programs as well, as some of the greatest abuses of value occur in that area.

The healthpolicymaven will be speaking at the Northwest Women’s Show March 2nd, 3rd, and 4th on the U.S. Health Care System and How to Optimize Your Health Care Outcomes in the Face of Reforms.

This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.

Reducing Health Care Costs By Improving Primary Health Care

How Primary Care Reduces Health Care Costs in the Long Run
Now that the teeth gnashing over health care reforms has been ongoing for two years, before the lifelines are cut on financing health care for the forty-nine million uninsured population, let’s examine the health care continuum for the impact of a failure-to-fund the health insurance subsidies. One of the things that is missing from many discussions and assertions about the 2010 U.S. health care reforms are which systems need to be changed in order to reduce the long term cost of American health care. And when I say reduce, I mean reduce the cost increases in providing health care to an aging population. It is essential the U.S.A. get the per-capita cost of its health care in-line with other nations, as it gobbles funds that could be used for education, capital investments for industry, and other economy building activities. The country will need to make substantial investments in k-12 education as well as building a more energy efficient infrastructure to have a chance at competing with global leaders for competitive contracts, as Germany and other countries have done. This article addresses the components of American health care that are impacted by the 2010 mandates and what it means for managing patient care over a lifetime.
Perspective
Rather than thinking of health care as a commodity that deserving people get, for those who have worked where it is provided by an employer or who qualify for Medicare by virtue of accumulating enough quarters of eligible earnings, or military personnel, please consider it a part of the national infrastructure for a moment. A healthy population is necessary to obtain optimal output from workers, students, and for the care of our families. The provision of health care may be considered a utility. Utilities are measured by their output, the efficiency of their output, and the cost of producing the service. Measuring quality across the United States health care system, which is disparate and complex, is a major challenge in building higher efficiency into American health care.
Measuring Health
From the moment we are born until we die, we are introduced to various aspects of health care in the U.S. system. Even from birth, we do not provide the same level of care to all pregnant women, nor do all babies have the same chance of surviving their first year in America. In my book, Unraveling U.S. Health Care, I researched all fifty states for health metrics, including infant mortality statistics and in one area of the country, infant mortality was as poor as it is in developing countries (12.6 deaths per 100,000 babies for the District of Columbia) Only in a hand full of states was the infant mortality rate equal to European standards, of 5 or fewer deaths per 100,000 infants. Health care workers do understand and are alarmed about this dramatic difference in a basic health care outcome in the country; however, it seems much of the population is uninformed. A basic measurement for health is infant care and reducing the chance of infant death.

Another health care measure is degree of healthy living, as measured by the DALE or Disability Adjusted Life Expectancy, which measures the number of years an American can expect to live healthily, able to move around, and do their activities of daily living. In other words, how many years you can expect to be reasonably free of impairment from chronic disease. The World Health Organization, developer of this index ranked Japan as the number one country for living longest in good health to an average age of 74.5 in the year 2,000. Though the earthquake and tsunami disaster may have some impact on this in the future, the Japanese have a national health care system designed to provide primary care for their population. The United States ranked below all other developed nations in these criteria, with a Dale index of 70 years. Women are expected to be healthy to age 72.6 (true in my Mom’s case), and American men are only healthy to age 67.5. Wake-up call for boomers born in 1957 or later, you are not eligible for full Social Security benefits (under current standards) until age 67, so guys, just about the time you are expected to lose your quality of life.
The ability to live free of chronic disease is an indication of the effectiveness of a health care system and how it identifies population needs and deploys successful interventions. The U.S. health care system has been less focused on primary care, largely because clinician reimbursements and the high cost of medical school have driven more practitioners into specialty care, which treats disease, but is not geared for prevention of chronic disease. One of the provisions of the 2010 health care reforms is the Medical Home provision in Medicare, which attempts to correct the primary care problem by paying clinicians more to be the primary care provider. This concept is a start in the right direction, but as a nation we need to have more health care incentives for primary care, which prevents chronic diseases from birth through life expectancy. Only through this process can we hope to reduce the incidence and associated costs, both social and economic of chronic disease like Type II Diabetes, hyper tension, and heart disease.
Cost of Delaying Treatment
As cited above, the United States had the poorest score for healthy life expectancy of any industrialized country, literally at the bottom, yet we spend 25% more than any other country in the world. The only way we are going to be able to change this result is to build efficiency into health care delivery and improve basic preventive and primary care.
Arguments about a person’s right to health care miss the Titanic-size glacier that pummels U.S. hospital systems, which is EMTALA, the Emergency Medical Treatment Act which requires all hospitals to treat patients, regardless of their ability to pay for services. States with huge uninsured populations, like Texas, with over 25% lacking any insurance , and half of those people are working for employers who do not provide any medical insurance . Not only do those people lack access to primary care, they appear at the hospital emergency department in advanced stages of chronic disease, which must be treated. This is not an effective way to deliver health care as a nation. Hospitals are designed to treat the acutely ill, not to provide primary care. Much discussion has occurred around the health care safety net for the nation, which directly addresses the ability of these hospital systems to continue to provide free care and pass those un-reimbursed charges on to full paying customers, enrolled in private sector health care plans.
Pass-Through Costs in the Health Care System
To those who complain about providing health insurance for the uninsured, a significant portion of the insurance premium these individuals already pay is based on reimbursing hospitals for under payment serving the uninsured and to a lesser extent, Medicare and Medicaid patients. By deferring treatment in the form of primary care, the nation has elected to force these folks to develop worse chronic disease conditions, which are more expensive to treat, and result in premature death from preventable conditions. In health care, treating a patient earlier in the care continuum is best clinically and economically and this is the direction the nation needs to go. For all of the caterwauling about health insurance rate increases, if there is any hope of stabilizing these impacts, it must be driven by increasing patient access to early and consistent primary care. Further, to those who object to paying a portion of their taxes for the provisions of health care, you are already doing so, by paying more than any other country for your health insurance and the administration of your health care. A better question would be how can we reduce the cost of health care overall? Should be continue to have employers contributing to health care financing or go the European route of having the individual be responsible? And finally, health insurance is a financing tool and not a delivery system for health care. We need to improve how we provide basic health care, including disease surveillance, continuity of care for those with chronic disease, and assurance of quality care throughout the country, not just for the lucky few who live close to centers of excellence.
Moving Forward
The 2010 health care mandates attempt to address these concerns in a number of ways, including improving access to primary care by subsidizing health insurance purchasing for small businesses and individuals and thus increasing the number of people who have health insurance and thereby the ability to obtain care. The Medical Home provisions are a start to addressing the access problem that seniors have with Medicare, which pays so little to doctors providing the care. And the Accountable Care Organization standards will pay health care systems more money for high quality patient outcomes in targeted areas for Medicare. FYI, changes in Medicare become a part of the private sector as well, so health care reporting of patient outcomes for Medicare, will also be reflected in the rest of the nonmilitary (Veterans Administration has its own health care system)population. None of these components of the 2010 reforms will go away, but further wrangling will continue on standardization of care for the health insurance purchasing cooperatives and the insurance purchasing subsidies. In a worst case scenario congress may choose not to fund the subsidies to help people buy medical insurance, which would of course result in tax penalties on all of the private sector who decide they cannot afford to buy the insurance. But then again the United States is famous for its unfair tax policies which tax the poor and middle-class much more than the wealthy. Just remember any deferment of health care access and treatment now will result in more serious chronic diseases later, which we will pay for, by increased hospital charges apportioned across the private sector insurance payers and higher costs for government health care programs.

This article was written by Roberta E. Winter, MHA, MPA an independent health care consultant and journalist and may be reprinted with her permission.

Obama Signed the most significant Healthcare Reform Bill since the Creation of Medicare

Whew! I must say I am surprised that any agreement was reached on a healthcare bill, but President Obama was presented with a bill and he signed it. Having read all 153 pages of the bill, I am NOT going to write one review of the bill, but this week, I will break it down into three articles. The first article will feature healthcare changes for hospitals, the second article will address insurance changes, and the third article will showcase how these regulatory changes will impact consumers. The only way to digest this mammoth piece of legislation is in smaller bites. So watch for more from the healthpolicymaven this week.