In general, most people can probably agree that improving consumer transparency would be a good thing that could have positive effects for the whole healthcare system. Can widgets help accomplish that goal? Healthcare.gov is trying it out.
Here are some key concepts for anyone who wants to understand accountable care organizations (ACOs):
Ambulatory care sensitive admissions (ACSA) are those for which good outpatient care can potentially prevent the need for hospitalization, or for which early intervention can prevent complications or more severe disease. ACSAs are considered a measure of the quality of ambulatory care delivery in preventing medical complications. High rates of ACSAs might indicate inadequate access to high-quality ambulatory care, including preventive and disease management (DM) services. DM programs focus on individuals with chronic conditions to aggressively monitor and educate patients in self-management of these chronic conditions. ACSAs that involve complications of diabetes, chronic obstructive pulmonary disease (COPD), congestive heart failure (CHF), coronary artery disease (CAD), asthma, and hypertension are admissions that are directly impacted by effective DM/primary care coordination efforts. Based on a Milliman analysis of Medicare claims data, 14% of total admissions are considered ambulatory care sensitive admissions.
Potentially preventable hospital readmissions are an important indicator of quality care and cause unnecessary expense. Preventable readmissions can occur because of inadequate discharge planning, inadequate post-discharge follow-up, or lack of coordination between inpatient and outpatient healthcare teams. Transition of care programs, case management, and disease management services aim to coordinate care at discharge and after; with effective care coordination and oversight, preventable readmissions should be reduced. The rate of preventable readmissions within 30 days has been reported at 11% from a study of all hospital admissions in Florida. The rate of all readmissions reported from a recent Medicare analysis is 19% with the majority reported to be preventable.
Preference sensitive admissions are admissions for elective surgical procedures where the evidence does not suggest greater efficacy between surgical management and medical management for treating particular conditions in some patients. Examples include spinal fusion, joint replacement, hysterectomy, bariatric surgery, cardiac catheterization, percutaneous transluminal coronary angioplasty (PTCA), coronary artery bypass graft (CABG), benign prostate surgery, and others. There is significant variation in the rate of these procedures by region suggesting that local medical opinion and practices have a strong influence on the choices of treatment. There has been a recent focus on the need for patients to be better informed about the treatment options along with consideration for a patient’s personal values and preferences when making medical treatment decisions. This recent trend in patient decision support has been reported to reduce the rate of these procedures. A Milliman analysis identified that, for a commercial population, approximately 16% of non-maternity admits are preference sensitive admissions.
Leakage is defined by services delivered by non-ACO providers that could be delivered by providers associated with the ACO.
For more information, see the recent healthcare reform briefing paper.
Milliman released preliminary results for its 2010-2011 Group Health Insurance Survey today. Here is an excerpt from the press release:
Preliminary results from Milliman’s 2010 Group Health Insurance Survey indicate premium rate increases continue to exceed the government’s official rate of inflation and are higher than premium increases in recent years. The estimated January 2011 renewal increases are about 9.0% for health maintenance organizations (HMOs) and 11.0% for preferred provider organizations (PPOs). This marks the seventeenth time that Milliman has conducted the survey, the complete version of which will be available in late October.
The Milliman survey is unique in that it asks HMOs and PPOs to respond regarding a given set of group health benefits and demographics. The survey removes three important factors that can skew the results of other health cost surveys: changes in plan design, shifts in premium sharing between employer and employee, and member demographics.
We blogged last week about a new cancer report. That report is now available. Here is an excerpt:
Cancer is an important cost issue for commercial benefit programs. Based on our analysis of Medstat 2007, cancer patients make up 0.68% of a commercially insured population, but account for 10% of the overall healthcare costs. Over the course of a year, a cancer patient receiving chemotherapy (approximately 22% of all cancer patients) incurred, on average, allowed costs of approximately $111,000 a year, almost four times the cost of a cancer patient not receiving chemotherapy. This paper quantifies the medical service utilization and costs of cancer patients receiving chemotherapy, and, in particular, identifies unexplained variation in several utilization and cost measures that indicate opportunities for better quality and cost management…The variation in chemotherapy-related inpatient admissions, ER visits and chemotherapy costs suggest opportunities for improvement, and we modeled the impact of a 10% reduction in national average rates for these key quality outcome metrics. The 10% reduction is significantly less than the regional variation we observed for each of these three categories. The cost reduction per chemotherapy patient would be approximately $3,000 or 2.6% of a patient’s total annual costs.
Our analysis focuses on 10 common cancer types where chemotherapy is a key treatment modality. These 10 cancers account for 65% of cancer patients in a commercial population, and 25% of the 10 cancer population receives chemotherapy in a year. The members receiving chemotherapy and having one of the 10 cancers make up about 0.11% of commercial members but account for about 4% of overall healthcare costs… Some payers are increasing efforts to manage chemotherapy utilization. Although treatment guidelines are well established, standards for treatment outcomes are lacking. This means that measuring adherence to guidelines rather than outcomes could be a useful tool for payers. Few payers require that providers demonstrate adherence to guidelines to receive reimbursement. Establishing best practice benchmarks for particular cost, utilization and quality metrics could improve the ability to monitor and set targets for improving the quality of care delivery for cancer patients receiving chemotherapy.
We’ve blogged before about the difficult question of wellness and whether or not it actually helps to contain costs. The New York Times picks up on this with a recent story about disease management. Here’s an excerpt:
Though chronic ailments like asthma, diabetes and heart disease consume a disproportionate share of health care costs, many critics are skeptical about the potential of improved care alone to reduce expensive hospitalizations and cut costs.
“I think it would be optimistic to assume these programs alone are going to be the savior of the cost issue that we’re challenged with,” said Robert Parke of the actuarial firm Milliman Inc., who is a member of the American Academy of Actuaries’ working group on disease management.
“That’s not to say we shouldn’t be doing them,” he went on. “Even if they don’t save you money, even if they break even, they still might be the right thing to do because they’re improving the quality of care. But there’s a cost involved in managing them, and the savings may be more than offset by those costs.”
He and other experts noted that Medicare’s efforts to stem costs through chronic disease management and care coordination among the elderly were largely unsuccessful, leading instead to higher fees.
For more on disease management, click here.
We know that the use of electronic health records (EHR) is not as pervasive as it could be, especially for outpatient facilities. The folks at Software Advice have endeavored to come up with some sense of EHR market share (both adoption and specific systems in use). You’ll find their full analysis here.
Healthcare IT News looks at cloud computing and healthcare. Here is an excerpt:
Whether called cloud computing or Software-as-a-Service (SaaS), the hosted model “certainly provides some potential for organizations dealing with both HIPAA 5010 and ICD-10 conversion efforts,” explains Kent Sacia, a principal and healthcare technology consultant at Milliman. “SaaS can provide a distinct advantage to organizations dealing with many changes, such as regulations. The model is lightweight to the end-user client and consolidates change requirements into functional models that are independent of the clients own IT processes”…
“As we see more core processing efforts achieved on the cloud, it is natural to offer these functional-based extensions,” Milliman’s Sacia explains. “I suspect we will see more cloud-based translation and simulation offerings for both providers and payers in the next 12 months.”
The Department of Health and Human Serices has issued guidance on how sponors of employment-based health plans covering early retirees may apply for the $5 billion in federal subsidies available under the reinsurance program created by the Patient Protection and Affordable Care Act. More here.
Some interesting stories emerging.
What role should hospital senior leadership play in implementing evidence-based guidelines? The recent paper by Patty Merola and Rodger Hopkins digs into this question:
What happens when senior leadership is not involved?
A more narrow departmental focus often results in a guideline implementation that does not achieve its full potential. For example:
- Guidelines are used only by a very small cohort of staff: mostly case management (CM) or utilization management (UM) staff, discharge planners, and appeals staff. Because these types of staff typically interface with payors, guidelines become perceived as a necessary tool to assist with reimbursement rather than a decision-support tool that is part of a larger clinical/quality initiative.
- Guideline selection is driven by what payors and auditors require versus what the most rigorous review of medical evidence has shown is necessary to deliver higher quality and efficiency. Or, alternatively, guideline selection is driven by input from end users who frequently focus on ease and efficiency of use at the risk of ignoring the more important scientific, evidence-based components.
- Physicians and some departments do not engage with the guidelines or may not even know they exist as a resource in the facility.
- Guidelines are not used for decision-support by clinicians, so the impact on the quality and efficiency of care is limited or nonexistent.
Clearly, these scenarios strip guidelines of the potential to drive maximum quality and efficiency improvements.
Read the full paper here. To better understand the opportunity posed by evidence-based medicine, read “The convergence of healthcare quality and efficiency.”
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