Robert Browning is credited for the following,”Never the time and the place and the loved one all together.” (1883). No less than a year ago a leading American healthcare consulting firm proudly announced in their 2008 seminar series presentations that we were coming upon a perfect storm for reform – players, industry, government were in sync and all interested in creating change within the industry. It appears at this point some of the legs on the preverbal stool are shaking; and, the reform is focused on the ills of the insurance industry rather than the healthcare industry en masse.
Concurrent with the congressional break and preparation for second round of debate, some of the more interesting industry events to occur are:
· Medtronic’s CEO supported their practice of collaborating with physicians for product development and product testing. Rationale for this action is based on the notion collaboration with physicians improves and supports commercialization of medical technology innovation. The tab for one of the relationships – head of the University of Minnesota Spine Surgery program, is $1.2 million between 2003 and 2007 for consultation, professional expenses and honoraria.
· Reform debate often is focused on the exponential increase during the past five years for medical imaging testing (i.e. CT, MRI). Technology enhancements enable greater volume of medical imaging equipment and operations to shift from the hospital to ambulatory setting – private entrepreneurs, private physicians, and independent practices. This has been the catalyst for imaging-in-the-box sites to pop up all over the nation. The New England Journal of Medicine in August published a study finding approximately four million Americans between 18 and 64 years of age are exposed to high or very high doses of radiation via medical testing – “…per capita dose of radiation Americans are exposed to because of medical testing has increased six fold since the 1980’s,” calling to question the value, safety, efficacy, and expense.
· The California Health Care Foundation funded research conducted by the University of Minnesota based on claims data from Health Partners enrollees (located in Minnesota) and use of convenience or retail clinics. The data indicated CVS MinuteClinics “offer(ed) a similar quality of service to physicians’ offices and urgent-care centers, for prices as much as a third less.” All the while, several medical groups – including the American Academy of Pediatrics, continue to challenge the quality, cost-effectiveness, and appropriateness of convenience clinics built on a retail model.
All of this is within an industry whose business model is in turmoil. Centers for Medicare and Medicaid Services’ market basket update for FY2010 continues a reimbursement theme – rates of increase over the next decade will not hit the same increases as the past ten years. To achieve maximum reimbursement, hospital providers, for example, will be reporting a record number of quality indicators: a 2.1% 2010 market basket update will require reporting all forty-four Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program measures. In 2011, CMS has announced changes resulting in forty-six indicators including changes within the existing forty-four. Announced changes include combining “failure to rescue” surgical measures, adding Surgical Care Improvement Project measures, new registry participation measures for stroke and nursing,
It is difficult to argue the value of these measures. The act of collecting, reporting, and analyzing these indicators is significant within a system that lacks common platforms or reporting. The cost of collection and reporting in time precludes appropriate analysis and recommendation for action.
Returning to a textbook definition of planning, strategy, and performance improvement: the value of the collection process is the analysis and recommendation for change. The 2.1% payment increase barely will cover the cost of collection. The current year indicators will be changed before the change cycle has been completed.
There has been improvement in this era of increased transparency. AHRQ in April released data indicating, for example, episiotomy rates dropped by 55% between 1996 and 2006. There is clinical evidence that episiotomy, a perineal incision performed to assist delivery, has a significant correlation with increased risk of third and fourth degree perineal lacerations. This change in clinical practice is to be lauded if not for an overall increase in cesarean delivery rates.
If this is beginning to feel like a cyclical argument – it is. I have had the opportunity to work within physician practices and hospital settings while being a sandwich generation, Baby Boomer consumer. Physician practices are independent businesses whose business model is similar to any for profit-business: secure maximum return for its stockholders (owners). Hospitals, profit and not-for-profit, operate to secure maximum reimbursement for its stockholders or to funnel back into programs and services. Physician reimbursement has been in a state of flux for years due primarily to the incongruence in value definition among consumers. The 2008 recession exacerbated issues within not-for-profit hospitals: reimbursement rarely meets cost levels.
No one discounts the issues within current healthcare industry business models. When faced with dramatic falling profit margins in 2008 and 2009, hospitals across the United States jumped on their revenue processes, employment, inpatient volumes, days cash on hand, and all cost drivers. Thomson Reuters analyzed twenty-four key indicators for four hundred plus hospitals and announced in their August, 2009 report “(the) median total margins were near zero in the third quarter of 2008. In the first quarter of 2009, all classes of hospitals had positive operating margins, reaching an average of 3.1%.” There was caution expressed by Thomson Reuters researchers for a more longitudinal study insuring industry maintaining these gains; but, it indicates ample room for improvement.
I began my professional life as a clinical social worker. When working with an eating disorders patient and her family, my instructor quickly pointed out that often the weakest personality within a family will act out when there are familial issues not being dealt with. Treating the young girl had to be addressed through treatment of the family. Insurance reform, like hospital response to dwindling margins in 2008, addresses the perceived root cause. When Browning wrote “Never the time and the place, and the loved one all together,” he wasn’t thinking about the grandmother unable to afford her medication, the child whose disease was left untreated because it required an orphan drug, or the working mother who delayed pregnancy to find the cost of invitro fertilization was beyond her means.
Or was he?
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