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Hospitals…Thinking About Getting Into Health Insurance? 6 Reasons To Lie Down Until the Urge Goes Away.

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By Vince Kuraitis

Gregg Masters reports on a recent Kaiser Health News article: Hospitals Look to Become Insurers, As Well as Providers of Care”.

This is the dumbest idea I’ve heard since “I’m going to invest all my money in Facebook’s IPO and get rich!”

Here are six reasons why:

1) You’re too late. Health insurance was an attractive and profitable business in the 00s, but after passage of the Accountable Care Act it’s been commoditized.

First, the health plan business model of the past decade is dead. That model was — “Avoid and shed risk” — or more simply, avoid insuring people who are already sick (preexisting conditions) and get rid of people who become sick (rescissions). Under the ACA, health insurers must take all comers and they can rescind policies only for fraud or intentional misrepresentation.

Second, the ACA institutes medical loss ratio restrictions on health insurers. Depending the the type of plan, insurers now must spend at least 80-85% of premium dollars on paying medical claims; if they spend less, they must return these “excess profits” as rebates to customers. As a result, health insurance has become a highly regulated quasi public utility.

This is why you see health plan CEOs like Mark Bertolini of Aetna declaring “Health insurers face extinction”. The old health insurance model is on a burning platform, and health plans are reformulating themselves as companies involved in health IT, analytics, data mining, etc.

2) You have bigger fish to fry. Focus on developing accountable care capabilities. The AHA estimated that hospitals will need to spend $11-25 million to develop an ACO. Get going.
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A Field of Dreams?

By VINCE KURAITIS

A study released last week by the Massachusetts Attorney Generalcontains surprising data to challenge two commonly held ACO (accountable care organization) ”Field of Dreams” assumptions. These assumptions relate to patient ”leakage” — out-of-network patient care and referrals.

1) Hospital administrators assume that tighter physician-hospital integration (e.g., through employment of physicians) will result in ”captive referrals” by physicians back to the mother-ship hospital.

2) Medicare administrators are assuming that Medicare Shared Savings ACOs will be able to coordinate patient care even without limitations on patients’ choice to go to providers outside of the ACO provider network.

Here’s the data that challenges the validity of BOTH of these assumptions:

Particularly for provider systems where hospitals and physicians are jointly at risk for the quality and cost of patients’ care, and have worked together to coordinate and improve care, we would expect to see physicians referring to their partner hospital more often. However, for the two physician-hospital provider systems in Massachusetts with the most years of experience managing referrals for HMO/POS patients under a global payment, one health insurer’s 2009 referral data shows that only 35-45% of adult inpatient care, as measured by revenue, goes to the partner hospital. That percentage can be even lower for providers with little to no experience managing where their patients receive specialist/hospital care, or under plan designs that do not require referrals. [emphasis added]

 

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A Rebuttal to PHR Luddites

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By VINCE KURAITIS

Unlike some of my colleagues, I’m not losing ANY sleep over whether personal health record (PHR) systems ultimately will be adopted and used by patients.

In my mind, the issue isn’t WHETHER, but WHEN.

Yes, I know that adoption has lagged and that surveys suggest 7% or less of the U.S. population has used a PHR.

Stay with me on this one for a minute. You’d have to have two underlying beliefs to conclude that PHR systems won’t eventually emerge:

  • That health record data will persist in non-electronic formats, i.e., paper
  • That people won’t have interest in accessing or using their health record data

Please think about this a moment. If you truly believe PHRs will continue to remain a non-starter, then you MUST logically believe in one or both of these assumptions.Continue reading…

Could Facebook be Your Platform?

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By VINCE KURAITIS

My guess is you’ve probably never asked yourself this question. A quick preview:

  1. Technical barriers aren’t the limiting factors to Facebook becoming a care coordination platform.
  2. Facebook’s company DNA won’t play well in health care.
  3. Could Facebook become the care coordination platform of the future? If not Facebook, then what?

1) Technical barriers aren’t the limiting factors to Facebook as a care coordination platform.

Can you imagine Facebook as a care coordination platform? I don’t think it’s much of a stretch. Facebook already has 650 million people on its network with a myriad of tools that allow for one-to-one or group interactions.

What would it take to make Facebook a viable care coordination platform?

  • More servers to handle the volume — not a problem
  • Specialized applications suited for health care conditions — not a problem
  • Privacy settings that made people comfortable — more on this later
  • A mechanism to identify and connect the members of YOUR care team — really tough, BUT this is NOT a technological problem, but a health system one

Suppose you are a 55–year-old woman who is a brittle diabetic. Your care team might include a family physician, an endocrinologist, a registered dietitian, a diabetic nurse, a ophthalmologist, a podiatrist, a psychologist, and others. Ideally you’d have one care plan that coordinates the care among members of the team, including you.Continue reading…

Why Direct is a Hit and PCAST is an Outcast

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By VINCE KURAITIS

Regular readers know that I find Professor Clay Christen’s theory of disruptive innovation to be a useful lens to explain industry evolution. Let’s look at two recent health IT initiatives and see why one is working and the other is stalled.

Characterizing the Direct Project — why it’s working:

  1. A low-end industry disruption. The Direct Project takes transactions that are routine but inefficient — fax, telephone, mail exchanges between health care providers — and specifies standardized, Internet based technologies to conduct them electronically.
  2. Incremental change — a few specified transactions.
  3. Bottom up — ONC hired a capable project manager (Arien Malec) who choreographed a small team of volunteers working under short deadlines.
  4. Implementing “better, faster, cheaper” technology on the fly (i.e., Internet transactions replace fax, phone).
  5. Under the radar — invoking little response from incumbents. Direct was seen as focusing on transactions that were peripheral to the core EHR.Continue reading…

The Thing to Watch in the Medicare ACO Regulations

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By VINCE KURAITIS

Health care lobbyists and advocates are bracing for six pages of the health care reform law to explode into more than 1,000 pages of federal regulations when the Department of Health and Human Services releases its long-delayed accountable care organization rules this week. Politico

What should you be looking for as you snuggle by the fireplace this weekend reading the draft ACO regs?

Rob Lazerow writes a helpful article listing 5 Things to Watch in the Medicare Shared Savings Program Proposed Rule. His list of five key design issues includes:

  1. How will patients be assigned to ACOs?
  2. To what cost benchmark will ACOs be compared?
  3. How will bonuses be calculated and paid?
  4. For which quality metrics will ACOs be responsible?
  5. What is the application process?

I’d like to add a sixth  item — which actually would be #1 on my list.

As I’ve previously written, IMHO the central issue around ACOs is:

Are (hospitals and doctors) viewing ACOs as a way to truly develop patient centric, collaborative care or as a means toward consolidating market power against payers? We really don’t know.Continue reading…

Doctors Love iPads. What Does it Mean? What Does it Mean?

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By VINCE KURAITIS

After attending HIMSS 11 the largest annual health IT conference of the year, John Moore reported that “nearly every EHR vendor has an iPad App for the EHR [electronic health record], or will be releasing such this year.”

Doctors love iPads…not surprising? But, how might you explain this?

There are at least two different possibilities:

  • Coincidence Theory
  • Conspiracy Theory

The Coincidence Theory

So doctors want to access EHR software through the iPad…what’s the big deal?

Apple has built a great new hardware platform with the iPad. There’s nothing else like it in the marketplace.  While other companies are building competing tablets, Apple’s has been the only viable option in the market for over a year.

The iPad is intuitive, easy to use, reasonably priced, easy to carry around, and has a lot of apps that have been developed for the platform. People — not just doctors — love the experience of using an iPad.

Doctors just happen to be one group of zillions buying iPads. Why wouldn’t they? Doctors are smart, affluent, and many are opinion leaders. Doctors like cool new technologies just like anyone else.

Doctors also are mobile. They want to access EHRs in different exam rooms, from the hospital, from their homes. The iPad is the perfect hardware platform to take with you as as a doctor goes about their day.

Why are nearly all EHR vendors making their software work on the iPad?

Because doctors are demanding it.

The Conspiracy Theory

The iPad is Apple’s Trojan horse to create new revenues in an industry in which the company has had minimal presence — health care.

Apple has developed a very appealing hardware platform in the iPad. Recognizing the market strength and lock-in to their walled garden they are creating with consumers, Apple is targeting key market segments to create new revenue streams and business models. Health care is the next target for Apple’s aggressive smarts.

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Is Economic Credentialing A Tool for Primary Care to Lead ACOs?

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By VINCE KURAITIS, JD

Is economic credentialing — the use of economic factors such as loyalty and utilization rates in the physician credentialing process — a potential tool for primary care physicians to lead ACOs?   and reestablish the vitality of primary care in American health care?

Keith Wright and Gregory Drutchas’ incisive article Economic Credentialing: A Prescription To Secure Shared Savings Under Accountable Care provides useful history and context about economic credentialing:

For many years, the use of economic factors by hospitals in making medical staff credentialing decisions has been the subject of much discussion and debate among physicians, groups such as the American Medical Association (AMA), healthcare providers, payors, and attorneys….the implementation of healthcare reform is likely to bring the debate over economic credentialing to the forefront once again.

While economic credentialing has been talked about a lot, it’s rarely been used.

The controversy over economic credentialing arises again with ACO’s…and this time the answer might be different — and opportunistic for primary care.Continue reading…

PCAST HIT Report Becomes a Political Piñata

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By VINCE KURAITIS, JD

The PCAST Report on Health IT has become a political piñata.

Early Feedback on PCAST

Like many of my colleagues, I was taken aback by the release of the Report in early December 2010 — I didn’t know quite what to make of it. Response in the first week of release after Report was:

  • Limited. The first commentaries were primarily by technical and/or clinical bloggers. The mainstream HIT world had remarkably little initial reaction to the Report.
  • Respectful of the imprimatur of “The President’s” Report and noting some of the big names associated with the report (e.g., Google’s Eric Schmidt and Microsoft’s Craig Mundie.)
  • Focused on technical and/or clinical perspectives around two broad themes.
    • The vision is on target:  “extraordinary”, “breathtakingly innovative”.
    • These guys didn’t do all their technical homework. The range varies, but the message is consistent.

Today’s POV on PCAST

What  a difference a six weeks makes.

The Office of the National Coordinator for Health IT (ONC) requested comments on the Report. The comments were due by January 19 and a number of influential organizations have already made their comments public.

After having read 10 early commentaries submitted to ONC, I’ll (admittedly subjectively) divide them into 3 schools of thought:

1) PCAST is a frontal attack on mainstream clinical, technical, and economic stakeholders in existing U.S. health IT. While there are some good ideas in the report, almost all of them are already in the works.  Bury PCAST ASAP.

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Updates on Proposed Stage 2 and 3 Meaningful Use Criteria

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By VINCE KURAITIS, JD Vince_Kuraitis

The Health IT Policy Committee has published proposed Stage 2 and 3 Meaningful Use Recommendations and they’re open for public comment until February 25.

I’ll share a couple of particularly useful and well written analyses and commentaries by colleagues.

Health IT guru and thought leader Dr. John Halamka writes about The Proposed Stage 2 and 3 Meaningful Use Recommendations.

This is a great article to get a thumbnail overview of all the proposed recommendations. John lists 38 criteria and provides a quick commentary on how challenging he sees each of them. (Keep in mind that he’s CIO at one of the most HIT-advanced health systems in the country — your definition of “easy” and his might not be alike.)

It caught my eye that the more challenging criteria generally are ones involving inter-organizational health data exchange, care coordination and care management. See his comments on the following criteria: 7, 17, 20–21, and 23–34.

Dr. Halamka concludes:

…areas of concern are chemotherapy automation, recording patient communication preferences, judging clinician performance based on patient adoption of PHRs, EMAR implementation, maturity of HIE capabilities,  widespread rollout of longitudinal care planning, and public health readiness.

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