Tag Archives: Ed Jhu

Milliman RBRVS for Hospitals

The Milliman RBRVS for Hospitals™ Fee Schedule provides a simple solution for comparing hospital contractual allowed amounts, billed charge master levels, relative efficiency, and patient mix differences. The fee schedule is based on Relative Value Units (RVUs). There are several advantages of RBRVS for Hospitals. For example, RVUs have been developed for all hospital services, so they reflect the relative resources required to perform the care. Also, a single conversion factor can be used to benchmark a hospital contract. Milliman actuaries provide some perspective in this paper.

Post-acute care integration should be a priority for your hospital

Hospital and health system leadership teams now recognize the importance of a thorough post-acute care (PAC) integration strategy. Many of them are developing networks that integrate physicians and investing in population health analytics, positive steps towards value-based delivery. However, many of these organizations will not see the meaningful financial and patient care benefits of these initiatives for several more years. Given current market conditions, PAC integration is likely to immediately enhance the value of patient care and have a positive impact on hospitals’ financials in the near-term. Milliman’s Ed Jhu and Sean Slattery and Kurt Salmon’s Ross Armstrong offer more perspective in a recent Becker’s Hospital Review article.

What direction is preventive care utilization heading?

The Centers for Disease Control and Prevention (CDC) released a new study indicating that half of U.S. adults are receiving preventive care, a number that will be watched as the Patient Protection and Affordable Care Act (PPACA) and its preventive incentives are implemented. The entire report can be read at ModernHealthcare.com.

On the issue of preventive care, Ed Jhu and Jason Nowakowski evaluate the effects the PPACA’s reforms may have on preventive care utilization in their paper “Benchmarking Preventive Care Utilization.” They conclude:

“In general, we have found that current utilization of preventive services is roughly 60% to 70% of what is clinically recommended in PPACA for many services. However, there is fairly significant variation by service, which is due to either variation in actual utilization rates or to measurement difficulties related to some of the factors identified previously in the report. We did see higher utilization for childhood-related services thank for adults, likely for the obvious reasons: parents taking better care of their children than they do of themselves. Children are also often required to have certain vaccinations and procedures in order to attend schools. Additionally, it’s routine for newborns to be administered a certain regimen of preventive services. In general, it seems to be easier for adults to put off the preventive services recommended for them.

There’s little in the pre-PPACA data to indicate where the preventive care trends are going to go next – except, very generally, up. The focus on preventive care in the reform measures, and the publicity surrounding them alone, will presumably push utilization in that direction. There are also certain health plans that don’t presently cover some of the procedures, but will be required to now. That, coupled with the fact that many of the procedures must be offered with no copays, would also tend to suggest greater utilization moving forward. While it’s unlikely that utilization of preventive services will ever reach 100%, it is certainly possible we will see it go up from the current levels.”

Here’s more on prevention.

Moving towards prevention?

Edward JhuJason NowakowskiAccording to a recent article in the Washington Post, early data shows recent upticks in utilization of some preventive services by Medicare patients, presumably triggered by provisions in the healthcare reform law encouraging use of preventive care. Medicare enrollees can now obtain wellness checkups and screening tests for cancer and other serious conditions at no cost, for example.

Interestingly, the article notes that so far only the more general procedures, wellness exams, have seen significant bumps in utilization. At this early stage, it appears that utilization of more invasive screening procedures such as mammograms or colonoscopies is relatively flat even with the removal of cost sharing under health reform.

This could well speak to the heart of the preventive challenge itself, and certainly raises many questions: Will we ultimately see utilization remain stubbornly close to current benchmarks for some procedures? If removing copays is not sufficient, what kinds of incentives are necessary to get people to use the clinically-recommended levels of services? Where does education fit into the larger goal of persuading people to use them? If the right kind of utilization is incented, what will be the long-term cost implications?

Moving forward, it will be more important than ever for providers and carriers to attempt to answer these questions. Our recent report, “Benchmarking Preventive Care Utilization,” points out that there are “numerous problems that actuaries and other analysts may expect to encounter as they attempt to set baselines and benchmarks for preventive services”—not the least of them is agreeing on and communicating a definition of “preventive services” in the first place. Other issues are related to claim coding complexities, billing, medical innovations, considerations for “at-risk” patients, and finding ways to distinguish screening and diagnostic procedures.

The Washington Post article is only an early indicator, and it introduces more questions than answers. The march toward increased use of preventive care will be one of the more interesting aspects of reform to monitor as the American healthcare system goes through this period of evolution.

Benchmarking preventive care utilization

Under the provisions of the Patient Protection and Affordable Care Act (PPACA), all health plans (other than those that choose to remain grandfathered) will be required to provide preventive services without copays, coinsurance, or other cost sharing. Although there is no way to tell exactly how the PPACA requirements will affect preventive care trends, it is safe to say that use of preventive services overall is likely to increase. This paper discusses existing preventive care utilization rates and compares them to a calculation of the recommended utilization rates.