Seven of the nine S&P Healthcare Economic Indices showed slower annual growth rates for March 2013 compared to February 2013. Annual growth rates for five of the healthcare indices hit their historic lows in March. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.46% in March, down from +4.63% reported for February. The Commercial Index rate hit its historic low in March. Annual growth rates in Medicare costs increased by 0.82%, according to the S&P Healthcare Economic Medicare Index, up from +0.78% recorded last month.

The Hospital Index’s growth rate hit its historic low of +1.86% in March, down from +1.92% recorded in February. The Hospital Medicare Index posted a +1.89% annual rate in March, up from +1.73% recorded last month. The Hospital Commercial annual growth rate hit its historic low of +1.81% in March; it posted +2.03% in February.

The Professional Services Index annual growth rate was +4.09% in March 2013, down from the +4.20% February print. The Professional Services Commercial Index decelerated to +6.77% in March, down from +6.86% reported in February. The Professional Services Medicare annual growth rate set a new low of -1.01% in March, down from -0.87% posted in February.

“In March 2013 the Composite Index posted +3.02% annual growth rate, the lowest rate in its eight-year history,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Seven of the nine headline indices we cover increased less in March than in February.

“Five of the nine healthcare indices hit new lows in March since January 2005. They were the Composite Index, the Commercial Index, the Professional Services Medicare Index, the Hospital Index and the Hospital Commercial Index. The Professional Services Medicare Index went deeper into the negative territory, posting annual growth rate of -1.01%, 14 basis points down from the last month. It has the lowest annual growth rate among our healthcare indices. The Professional Services Commercial Index was +6.77% this month, 9 basis points down from its February rate. It remained the highest index among healthcare indices we cover.”

1. Benefit design changes such as increasing visit copays or putting limits on the reimbursement of number of un-necessary ED visits by a single patient.
2. Provider incentives through programs, such as Patient Centered Medical Homes (PCMH) to reduce the avoidable ER rate.
3. Structural delivery system changes to emphasize Urgent Care Facilities and after hours primary care.

Many of these interventions rely on analytics based on NYU’s avoidable ED algorithm which uses a probabilistic algorithm based on primary diagnosis code to identify the likelihood of avoidable ED visits within populations. Several analyses have now been done that analyze the effectiveness and/or the safety of these interventions.

The first analysis was done by the Washington State Health Care Authority (HCA). It cites an over 10% decrease in ED utilization and ED PMPM costs in the first six months of a program instituting seven best practices for Medicaid enrollees in the State. The best practices included the electronic exchange of information between emergency departments, patient education of ED utilizers, sharing of lists of frequent ED utilizers, development of ED care plans, guidelines and monitoring of narcotic prescribing and the periodic review of feedback reports. For more information on this program, read HCA’s report, Emergency Department Utilization: Assumed Savings from Best Practices Implementation.

The second is a peer reviewed study by ED physicians, whose conclusion was that the NYU ED algorithm did a relatively poor job in identifying an individual patient’s need for an ED visit. In this study they compared presenting complaint data with ED discharge diagnosis run through the NYU ED algorithm. They found that the presenting compliant predicted poorly whether the visit should have been avoided and that doing so could have safety consequences. While arguably the NYU ED algorithm wasn’t designed to guide individual patient decisions, the article is thought provoking and undoubtedly can be cited as an argument against ED Visit interventions. Read recent article in JAMA, Comparison of Presenting Compaint vs. Discharge Diagnosis for Identifying “Nonemergency” Emergency Department Visits for more information.

I’d expect that many more articles to be published about these interventions in the coming months and years. It will be important for informatics to be aware of these evaluations.

This article first appeared at Milliman MedInsight.

Download and read the entire article here.

This article was originally published in the May issue of the Medical Liability Monitor.

This Time article provides some background.

Most claims-based measures are process based, evaluating if appropriate services are provided for specified groups of patients, or identifying potential over-utilization of services, but claims data are not the sole source of quality measurement. Survey data are often used for patient satisfaction and operational measures, and there is increasing use of lab results and electronic medical record (EMR) data to expand the clinical components of quality that can be measured – a topic for another posting.

Despite the expansion of claims-based quality measures, some still question the merit of these measures. Those citing concerns point out known limitations associated with analyzing claims data including:

• Potential errors or inconsistencies in coding.
• Availability of required data sources may be constrained if components of benefits are administered by multiple sources.
• Lack of complete clinical information.
• No diagnostic coding for blood pressure, laboratory results or pathology results.
• Clinical information is limited to conditions for which the patient was treated and submitted a claim. A noncompliant diabetic may have no claim history of the disease.
• Timeliness of data is impacted by claim lag.

However, the advantages of analyzing claims data greatly outweigh the limitations noted above. The advantages include:

• Data are commonly available and relatively inexpensive to analyze.
• Data are available for very large populations, allowing for more robust sample sizes.
• Coding accuracy has improved dramatically over the past 20 years, and
• For some types of measures, claims may produce a more accurate picture than even chart reviews.

An example of this last point would be measures focusing on patient compliance with medications. A physician may regularly write refill prescriptions for a patient’s hypertension medication, and those refills may be well documented in the patient’s chart, but those data provide no real evidence that the patient filled those prescriptions. Tracking actual claims for prescription refills is a much better measure. Granted, submitting a claim for a hypertension medication does not prove that the patient actually took the medication at the appropriate frequency, but a regular, on-going refill pattern is a better proxy of medication adherence than chart review information.

Days supplied is commonly available on claims data making it easy to calculate “possession ratios” to monitor patient compliance from pharmacy claims. A simplistic way (additional conditions can be added to the calculation) to measure possession ratios is demonstrated in table 1. For patients continuously enrolled during a 180 day period and previously diagnosed with hypertension, the possession ratio for each patient is the sum of all days supplied on their prescriptions during the study period, divided by 180 days.

Although claims data are not perfect for clinical reporting, they will continue to be a valuable and important source of data for quality reporting for a selected set of metrics.

This article first appeared at Milliman MedInsight.

This article offers guidance on the key financial reporting issues for medical professional liability (MPL) self-insurance programs. Here is an excerpt:

The following practices will help in keeping on the right course toward full compliance in financial reporting.

• Update the key parties whenever you make changes. Frequent conversations are beneficial. At minimum, you should have annual conversations with the actuary and auditor. If changes occur, in either the program or your loss experience, it is important that all parties understand all of the program changes that have been enacted by management, as soon as possible. Table 1 shows some common questions.

• Create a checklist of requirements. The best way to stay “on top” of the requirements may be to use a single source that lists all of the requirements and indicates when each is due. In addition, it may make sense to determine who will complete each task and to have a strategy in place for efficiently completing the task.

• Seek timely advice. Guidelines are best interpreted by experienced professionals who have the skills needed to understand the current practices and communicate any change from the past. Auditors and actuaries make every effort to update management on a timely basis of any changes that would affect the financial reporting of the entity’s liability, but you can help out by proactively asking for advice for any changes you find out about.

• Request more frequent evaluations. When a program experiences adverse or favorable loss activity or undergoes multiple changes during a fiscal year, you can always ask for an interim actuarial study. You’ll need to determine your comfort level with the program’s current amount of activity, with the goal of reducing year-end “surprises.” Additional analysis may also be helpful during an audit.

Reprinted from the First Quarter 2013 issue of Physician Insurer Magazine, Physician Insurers Association of America.

All nine of S&P Healthcare Economic Indices showed slower annual growth rates for February 2013 compared to January 2013. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.62% in February, down from +5.41% reported for January. Annual growth rates in Medicare claim costs increased by 0.78%, according to the S&P Healthcare Economic Medicare Index, down from +1.40% recorded last month.

The Professional Services Index annual growth rate was +4.19% in February 2013, down from the +5.00% January print. The Professional Services Commercial Index decelerated to +6.86% in February, down from +7.61% reported in January. The Professional Services Medicare annual growth rate set a new low of -0.87% in February, down from +0.02% posted in January.

The Hospital Index’s growth rate was +1.92% in February, down from +2.55% recorded in January. The Hospital Medicare Index posted a +1.73% annual rate in February, down from +2.17% recorded last month. The Hospital Commercial annual growth rate hit its historic low of +2.02% in February; it posted +2.81% in January.

“In February 2013 all the nine headline healthcare indices grew more slowly than in January,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Moreover, the difference between the Composite Index at 3.10% and the general rate of inflation measured by the CPI was less than two percentage points. Medicare cost increases were slower than the general rate of inflation.

“Five of the nine healthcare indices hit new lows in February compared to any time since January 2005. They were the Composite Index, the Medicare Index, the Professional Services Medicare Index, the Hospital Index and the Hospital Commercial Index.

“The Professional Services Index went down by 81 basis points posting +4.19% in February. The Hospital index decreased by 63 basis points; it was +1.73% this month.

“The Professional Services Medicare Index posted -0.87%, 89 basis points down from the last month. It has the lowest annual growth rate among our healthcare indices. The Professional Services Commercial Index was +6.86% this month, 75 basis points down from its January rate. It remained the highest index among healthcare indices we cover.”

This report provides an independent analysis of the ACA health insurer fee provision’s impact on the United States health insurance industry.

The Arkansas proposal has various financial implications, especially with regard to provider reimbursement levels and various aspects of the Affordable Care Act, including the minimum medical loss ratio requirement and the “3Rs” (reinsurance, risk corridors, and risk adjustment). This healthcare reform briefing paper by Rob Damler, “Considerations for Medicaid expansion through health insurance exchange coverage,” examines these key considerations for a state contemplating this approach.