Healthcare Policy Getting Reimbursed: Its Complicated

Billing and Delivery for health services has become extremely complex. Although fee for service (volume-based care) is deemed to be on it's deathbed by proponents of payment for quality of care and outcomes, the complexity of obtaining a payment becomes more of a juggernaut. This is occuring in the face of  a system that is not ready to convert to accountable care organizations. The infrastructure for such a conversion is completely absent. The marketplace has abundant vendor offerings.  
Although the majority of health providers now are using electronic health records and are required to be certified for meaningful use, many providers are ignoring these standards.  Interoperability remains a major hindrance to  connecting all the systems of an accountable care organization

In order to address this issue and many others take this course.

You will learn about:

• The relationship between healthcare expenditures and provider compensation.
• Payment models under Medicare and the Affordable Care Act.
• The future distribution and cost of healthcare services

• Define the 3 types of provider payment schemes.
• Recite the types of national healthcare expenditures and the proportion that each contributes to the total spending.
• Compare the compensation for US and international physicians as a multiple of gross domestic product per capita.
• Describe the methods by which Medicare determines physician payments.
• List the provider components of a healthcare delivery system.

• Describe how healthcare services will be distributed in the future.
• List the types of costs associated with healthcare delivery.
• Describe bundled payments under the Affordable Care Act and how bundled payments are different from prior programs such as global surgical fees.
• Define the incentives to achieve Medicare bonus pay within a Pay-for-Value program.
• Review the concepts in the case studies.

Health Care Policy: Delivery and Payment

Mayo Clinic conversion from Cerner EHR to EPIC EHR

The Mayo Clinic in Rochester, MN has clinics in Florida, Arizona, and also MayoClinic Health System  are about to convert their electronic health record system.

The large health care system faces the challenges of RCM (Revenue Cycle Management) which the Affordable Care Act proposes to mandate. This change converts the fee for service model to one of reimbursement for quality of outcomes (Value based payment model) and Pay for Performance and is not based upon volume. This  is an enormous change about to take place.

The HIT department at Mayo Clinic is quite large, supporting clinical, administrative and educational functions. Mayo Clinic is heavily invested in  Cerner's EHR, and 'patching'  software requiring multiple changes for RCM, measuring outcomes, attesting to meaningful use present a formidable exercise at considrable expense. Ostensibly the number crunchers, clnicians, and administrators believe a fresh start allows for a more efficient transition both financially and in training staff to meet the new regulatory standards.

Cris Ross, CIO for Mayo Clinic explains,

'The scope of Mayo's practice is very large, so we have a lot – a lot – of detailed decisions to make'

John Noseworthy MD, President and CEO of Mayo Clinic, states,  “We’re confident in choosing Epic as our strategic partner as we continue to enhance Mayo Clinic’s excellence in health care and medical innovation,” said John Noseworthy, MD, Mayo Clinic's president and CEO, in a statement announcing the partnership.





The Mayo Clinic  Health System is a large health care enterprise. They have many facilities dispersed throughout the United States, and interoperability is a key factor for them. Their old system from Cerner did not provide this functionality, nor did it meet the requisites for Meaningful use and/or conversion from fee for service reimbursement to a value based reimbursement system. Redesigning or patching a legacy system would be too expensive and may not have provided the changes, or future changes to comply with CMS requirements.  User friendliness may have also contributed to changing to an entirely new software vendor.

The original concept for EHR was to make  a record more legible and to store data that was easily retrievable. This has been expanded to include data fields which allow analytics

The technical aspects to achieve interoperability, a built in tree to compute outcome analytics and quality of care go beyond this blog. In fact health clinicians must now depend upon others to design systems which will integrate record keeping with all the other mandates of the Affordable Care Act, and Accountable Care Organizations.

Accountable Care Organizaitons may well go beyond one health care provider, both clinics and hospitals. In some cases depending upon whether it will be an IPA, hospital, or insurer, each responsible organization will need to use appropriate software to integrate the ACO.


Early experience has not been all that successful.  A few 'Pioneer' ACOs are operational, but several Pioneer organizations have failed, including the Sharp Health System in San Diego.

Some insurers are forming their own ACOs as an alternative for fee for service reimbursement. It promises to be a learning experience for all users

The Mayo Clinic has always fashioned itself as a 'leader". It's partnership with Epic signals a change. Kaiser Permanente already uses Epic for their system, replacing it's original system from IBM. Called Kaiser Connect it bases it's overall operation on Epic with some additional software modules to build upon it's success.

Kaiser's CEO states it's operational infrastructure upon EPIC .

Philip Fasano: We have every piece of information about that patient available to us to draw upon. The primary care physician has all the information about the patient, the specialists have all the information about the patient, and anyone they encounter in any of our hospitals has it as well. He or she can see the patient's health history, diagnosis by other providers, lab results, and prescriptions are all there. X-rays are stored digitally and are there. That information is also available if a patient goes to the ER.

Cost is significant, About $4 billion, a substantial amount of money, but we have 9 million members [so it costs about $444 per member]. This is not a one time investment.  You have to invest continuously in the infrastructure over its lifetime. People have to recognize that these systems are life-critical once implemented, so you have to invest in the infrastructure to be sure they are always on.  InfoWorld: What would it cost nationally to do what Kaiser did?Fasano: The health care reform act states that "meaningful use of technology" by providers nationally would be $11 billion. At the time, I said, "That's a nice down payment." It will cost tens of billions of dollars to implement this.

Kaiser, says Fasano blazed a new path, with considerable challenges and failures, a price from which  all future users will benefit.

The new system was built with Epic Systems, a specialist in electronic health records that is now one of the top two EHR vendors, along with Cerner.)

Health Software Vendors

Software and hardware age quickly in health care. Software and hardware evolve, change and become obsolete quickly in the course of five years. Much changed during this 1/2 decade as providers and hospitals geared up for the HIT revolution.

Just ten years ago (2004) EMRs were very few and only 10-25% of providers or hospitals had any type of electronic health record.   The concept of health information exchanges and interoperability were still seminal ideas. Mobile health applications were few.

Following the HITECH Act the progress has been staggering. On the one hand it stimulated the adoption of EHRs, on the other hand in a rush to capture the incentive and avoid penalties, users were coerced to obtain inadequate electronic systems which were not tested for ethnology or true user functionality.  Many were and still are a barrier to efficiency and do not instill confidence in physicians by patients when providers faces are embeded in their display, which minimized face-to-face contact.  Transference as most providers realize is a key component of patient reassurance and compliance.  Score two big negatives for the current generation of EMRs.

Many providers have invested in EMRs, some already had EMRs which were compliaint enough to be CCHIT certified for interoperability (necessary to use HIX (health information exchanges) to exchange data with diverse EMRs.  Some were able to be upgraded to satisfy Meaningful Use, Stage I.

However many of these pre-existing systems are now insufficient to be further upgraded due to the increasing complexity of reporting metrics to CMS and Health Insurers.  Now faced with ACOs (Accountable Care Organizations the EMR and HIX face the challenge of further requirements.

For some the time as come to upgrade their EMR even though it may be only five to ten years old.

There have been many reports about physician dissatisfaction with first, or second generation systems. Offerings are divided between small practice, medium size practices, and large enterprise integrated health systems.

Perhaps a measure of change can be found in a report from MarketWatch of the Wall Street Journal.  I find the WSJ to be a reliable source of change in markets as they measure financial changes early on.

EPIC has been the leading software vendor for large enterprise systems.  This year however KLAS has ranked athenahealth as the top vendor replacing EPIC as rated by thousands of health care providers across the U.S., athenahealth is now rated #1 in the following categories:

-- 2013 Best in KLAS Overall Software Vendor

-- 2013 Best in KLAS Overall Physician Practice Vendor

-- 2013 Best in KLAS Practice Management Service, athenaCollector(R), for the 1-10 and 11-75 physician segments

-- 2013 Best in KLAS Patient Portal, athenaCommunicator(R)

The old guard of HIT leaders is finally being displaced by more nimble, innovative models designed for health care's future - not for its past," said Jonathan Bush, chairman and CEO, athenahealth

Radiology One of the Highest Paying Medical Specialties

Contributions to this post are from:
Mike Bassett, 

One of the   principal determinants some medical specialties is salary. However, that is not the only factor in specialty selection by trainees.  Some of the other factors are:

Relatively good hours and call schedule
Flexibility of work locations
Group Practice insulated from  financial issues
Hospital based employment, an option
Support as consultant for most specialties
Technological advancements in CT, MRI, PET and other new imaging techniques

Fierce Medical Imaging reports that although Radiology reimbursement has flattened out and perhaps decreased there are an abuncance of job seekers in Radiology.

1. Study: Two job seekers for every new radiology position

An analysis of the American College of Radiology job board suggests that for every job posted there are two radiologists seeking jobs, according to a study published online in the Journal of the American College of Radiology.

According to Anand M. Prabhakar, M.D. of the department of radiology at Harvard Medical School and Massachusetts General Hospital, while the general impression of the radiology job market has been "grim," there has been little research done tracking employment statistics. 

The researchers found that the during the study period, the mean number of new job seekers was 168 per month--twice as many as the 84 job postings found on average per month. 

No appreciable difference in the number of new job postings between 2011 and 2012 was found, while the number of newly registered job seekers ranged from 80 in May 2012, to a high of 418 in October 2010. October through November of 2010 represented one of the peak periods of job competitiveness (represented by the number of newly registered job seekers), along with August through November of 2011 and October and November 2012.

Consequently, the researchers concluded that there is a seasonal variation in interest in the ACR jobs board coinciding with the July 1 start date of fellowship training programs.

The study is a relatively short term study and in a period of rapid change with the Affordable Care Act and the imminent development of Accountable Care Organizations.

Radiology suffers from the same pessimism stimulated by reductions in earnings. 

In the face of what appears to be a shrinking job market, practicing radiologists have an obligation to those just starting their careers "to help them get through this difficult time," write David Levin, M.D., and Vijay Rao, M.D. in an article published in the April issue of the Journal of the American College of Radiology.

A report last year by physician recruiting firm Merritt Hawkins illustrates how job prospects have declined for prospective radiologists over last several years. According to the report, demand for radiologists--Merritt Hawkins' most requested specialty in 2003--ranked just 18^th last year.

The reasons for the fall in demand, according to Levin and Rao? Slowdowns in utilization and reimbursements; longer radiologist hours to maintain compensation levels (consequently decreasing the need to hire new radiologists); current radiologists deferring retirement; and the advent of picture archiving and communications systems and other digital enhancements that have increased efficiency.

Read more: How sacrifice today will save the radiology industry tomorrow - FierceMedicalImaging http://www.fiercemedicalimaging.com/story/how-sacrifice-today-will-save-radiology-industry-tomorrow/2013-04-12#ixzz2rcaXLkft
Subscribe at FierceMedicalImaging

Accountable Care Organizations and Health Information Exchange

No surprise here.  Accountable Care Organizations are going to require massive amounts of data sharing between the hospital, it's medical staff either as a whole or by  specialty.

Electronic health records and health information exchanges are an early beginning to having meaningful data, although the true nature and scope of HIE is limited by the fields that are interoperable and visible to users. Many health information exchanges only allow sharing of limited data....ie diagnosis, medications, and perhaps a discharge summary.  That in itself would be a helpful and very useful study.

Accountable Care Organizations will be searching for information systems to accomodate the needs of an ACO.

Hospital EMR & EHR reports

With accountable care becoming the standard for providers, more and more are seeking out best-of-breed vendors that can fill in the gaps in their health IT lineup and meet expected ACO requirements. It seems that just having it EMR in place doesn’t do the trick by itself. 

Management of an ACO is an entirely new industry, one that is very immature and the availabliity of experienced ACO  CEOs is very limited.  I am not sure what 'best of breed vendors means in such an immature market, nor how to compare or rate vendors.  This sounds much like a repeat of EHR software or Health Information Exchange offerings.

KLAS, a large consulting firm describes its mission, helping healthcare providers make informed technology decisions by reporting accurate, honest, and impartial vendor performance data.  The Best in KLAS Awards for Medical Equipment report is published June 15 and the Best in KLAS Awards for Software and Professional Services report is published December 15. 

 KLAS spoke with 73 organizations – mostly medium- to large-sized IDNs and hospitals –  to gauge where they are in their migration from volume to value and accountable care. The goal is to eliminate reimbursing for procedures to eliminate or minimize the 'do more' to gain  income mindset that has been embedded in the economics of medical reimbursement.

That's the conclusion from the newest KLAS report, "Accountable Care Timing 2013: Migration from Volume to Value Speeds Up," which shows that more than 65 percent of providers interviewed are looking to niche vendors to address the critical areas of population health, health information exchange and business intelligence.

We’ve known all along that the ACO game was going to be an expensive one. If KLAS is right, it’s going to be a whole new independent marketplace, in which providers shop for calls that fill in huge gaps in their existing ACO toolkit. If I were CIO, however, I’d be pretty annoyed that the huge investment made situation made in an EMR can’t get the job done all by itself.

Now the question is which health IT areas hospitals and medical practices will take on first; after all, there’s lots of ways to attack the question of how to prepare for the new, bold ACO world. My guess is that tools supporting population health measures will be particularly popular, as population health management is a key capability ACOs bring to the table that health systems alone may not.

The end game is complex, how to extract the data for analysis and merge it with population health measures, comparing expense with outcomes and maximizing better outcomes while holding expense flat, or decreasing it.

Some early ACO organizations are claiming some success in managing this goal, and it would be useful to survey what vendors and/or software combinations they use. Is it done in real time, or does it require separate data entry? 

The other big question is much like the analysis of ROI for EHR and HIX.  If the ACO will require new software, it will certainly be very expensive and no one can tell for certain what the ROI will be.

Several hospitals and INDs have lost considerable sums adopting well known EHR systems such as EPIC and/or Cerner. The failure of a central software infrastructure would be a fatal blow to a young ACO.  One that would rival the near catastrophic rollout of the national health benefit exchange in October 2013.

"This is a major shift from what we are seeing in most healthcare IT areas," said report author Mark Allphin. "What we are seeing in many areas is a migration toward integration. The fact that providers tell us that they will be looking to niche vendors over their EMRs tells us that the ACO market very likely is still up for grabs.”

So, this post raises more questions rather than answers. , 

Those early IDNs and early Pioneer ACOs may be ahead in discovering the answers to our questions.

Becker's Hospital Review lists 100 early ACOs, and CMS listed  32 initially, now down to 20 due to ACO dropouts.

Much of this information is open to question, a term which I call  "Truthiness'. CMS is claiming how successful their model is working.

According to CMS Nine of the 32 Pioneer ACOs are leaving the program, but the majority will continue. It is not surprising that some health care systems would re-evaluate their participation and choose to move on. The program does not guarantee that it will be the right fit for every health system. That’s the nature of innovation. And no model may be right for every population in every community.  It is important, however, to examine these departures for the lessons they offer.

Further commentary from CMS:

"We remain optimistic. ACOs represent one innovative model with the potential to improve care coordination, ideally leading to improved quality and lower costs. Testing of that model should continue, and we are pleased that the Medicare ACO program has given a boost to the development of ACOs, which are now proliferating among private health plans and provider groups"

Is this the message of idealogues, who will forge forward no matter the variability of success or failure.

We have seen the early missteps of Health Benefit Exchanges and there should be no reason to trust  CMS plans and/or statements.

Digital Health Space will be watching this niche carefully.