Health Business Blog

When Debra LaChance was diagnosed with breast cancer a few years ago, she found that the illness took over her life. In addition to feeling overwhelmed by the frightening diagnosis and difficult treatments, she felt very much alone. She was a good candidate for a support group, but the realities of modern life made following that path impractical. Once her treatments ended, she founded The Healing Project (THP) and LaChance Publishing. THP develops resources to enhance quality of life for seriously ill patients and their families. LaChance publishes the Voices Of book series, which includes eight books each focused on a single disease. The books consist of short stories and essays by patients, caregivers, support organizations and others that provide deep insights into what patients go through.

I read Voices of Bipolar Disorder and found it quite informative (albeit disturbing). I have a close friend who is bipolar and while his story is quite different from those in the book, it helped me round out my understanding of the illness and what it’s like to experience it.

In this podcast interview, LaChance Publishing’s president, Victor Starsia talks about the history of the company, the relationship between LaChance and THP, and what’s planned for the next few years. Unfortunately the sound is a bit muffled, so if you can’t hear it well you can wait for the transcript.

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David Williams interviews Victor Starsia of LaChance Publishing Play Now | Play in Popup | Download

It’s a wonderful day in the wonkerhood, with so much health care policy fodder to chomp on. Let’s jump right in.

Regulating insurance rates and increasing competition in the health insurance industry could backfire. The Incidental Economist makes the point with a parable about a mother sending a son and daughter to buy a loaf of bread in the market. Will the seller cut the price when more buyers appear?

Big regional differences in health care utilization are much noted. Healthcare Economist analyzes a NEJM article that breaks the issue into two components: 1) rate of diagnosis and 2) intensity of treatment. Rate of diagnosis does matter.

Drug Channels reads the tea leaves and concludes that the creation of an Office of the Chairman at CVS Caremark means the company will break up as the architects of the deal fade away.

The new IRS 990s provide a wealth of information on not-for-profit finances, and Health Care Renewal is paying attention. For example, a major medical center pays 8 of its executives more than $1 million per year each and has major business dealings with companies owned by its board members.

Why is it so hard to devise a fix to Medicare’s Sustainable Growth Rate formula for physician pay? The Hospitalist Leader has some bad news for us: the US doesn’t have the money to remedy the problem.

Some states will expand Medicaid eligibility early under health reform. California Healthline is confident that the Golden State won’t be among them.

Uninsured patients don’t head to the emergency room more frequently than those with insurance, reports Colorado Health Insurance Insider. But Medicaid recipients tend to the use the ED a lot.

Managed Care Matters takes a speaker to task for overt bias in a presentation about health care reform. The speaker should have stuck to the facts and not inserted his view that people are uninsured by choice.

Wright on Health points out that even for people with health insurance health care is far from free. The percentage of people facing a high burden of out-of-pocket spending was about 20 percent as of 2006.

To make matters worse, even people with health insurance need to worry about rescission, right? Actually John Goodman’s Health Policy Blog says it’s Much Ado About Nothing.

Health reform includes a small employer tax credit. Health Affairs Blog lays out the details of implementation.

Planning to make money in the workers compensation business? Workers’ Comp Insider is not sanguine about near term prospects.

Healthcare Hacks thinks we can find a better measure of hospital quality than mortality rate.

One thing’s clear: nurse “presenteeism” is not good for patient care, says Interdisciplinary Nursing Quality Research Initiative.

The Apothecary frets that if insurers are required to measure Medical Loss Ratio on a per-plan rather than aggregate basis, we will see more insurance monopolies as less-established plans withdraw from various markets.

Medical Loss Ratio regulations stimulate a wider debate between “Constructionists,” who view insurance as a means of monetizing and pooling risk in a way that enables the payment of needed health care services and “Activists,” who favor using the monetizing and pooling of risk to enable the betterment of needed health care services. Disease Management Care Blog has the story.

My own Health Business Blog has a post on medical loss ratios too. I’m not afraid to explain why I like low medical loss ratios.

A Robin Hood strategy of stealing from the “rich” hospitals won’t work in Massachusetts, says InsureBlog.

OpenForum has some pragmatic ideas for those looking to control their company’s health insurance costs.

Genetic testing is coming as illustrated by recent events involving UC Berkeley and Walgreens. There are potential downsides, reports Nuts for Healthcare, but genetic testing also offers immediate benefit in individualized drug responses where drug treatments can be optimized to reduce wasteful spending and curb dangerous interactions.

Hartford Foundation reflects on the challenges and ethics involved in caring for adults with dementia who live in co-op housing and apartments.

Meaningful use conferences are a little more tolerable when held in Chocolate World, notes Healthcare Talent Transformation.

Upcoming host Tinker Ready carries news of a workshop dedicated to exploring the opportunities and challenges of designing, building and funding medical technologies for the developing world.

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Hosting a blog carnival is a good way to keep tabs on the state of the blogosphere. Over my five plus years of writing the Health Business Blog I’ve hosted blog carnivals several times, including Grand Rounds, Health Wonk Review and Cavalcade of Risk. Maybe I’m wrong, but blog carnivals used to be a bigger deal, or at least a bigger driver of traffic. Five years ago just having an entry in a blog carnival would routinely yield hundreds of hits. When I hosted Grand Rounds for the first time I got 10,000 hits in one day compared to a typical range of a few hundred. That was a result of being mentioned by a big, mainstream blog. These days I barely notice a blip from being featured in most blog carnivals, and even when I host the numbers aren’t staggering.

Tomorrow I’m hosting the Health Wonk Review. Of the 40 submissions I received, 17 appear to be from search engine optimizers seeking to increase inbound links. A typical submission from a site advertising masters degrees in biotechnology contains a list of the Top 50 Biotechnology Blogs. I’ve received a lot of emails over the past year or so from people who write these blogs, telling me that the Health Business Blog has been named one of the top 50 health business and policy blogs or something like that. From time to time I’ve mentioned these lists on Twitter.

What’s interesting about these posts is that they are not spam in the traditional sense. Rather they contain some modestly interesting content and are designed in a way to get people to link to them. Nonetheless I’m not going to include them in tomorrow’s edition.

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Before I harsh on MedWaitTime, which I will do shortly, I do want to say that the company’s heart is in the right place –to make life easier for patients whose doctors and hospitals are keeping them waiting. The company’s smartphone app and text messages let doctors notify patients that they are running late and lets emergency rooms provide information on waiting time. The idea is to avoid having patients arrive at the waiting room too soon –just like airlines do with their flight status notifications.

I read about the company in today’s Wall Street Journal (Internet Tool to Curb Waiting-Room Time).

There are a number of problems with the approach:

• As an experienced user of the airline flight status systems, I can tell you they are of little practical benefit. Flights are usually listed as on-time until it’s time to get to the airport. Once there it’s not that helpful when a delay pops up. The eventual departure time is almost never what the first or second update says it will be. You’ll also notice that there’s usually a disclaimer that says to show up on time anyway, since schedules can change. All these issues are likely to be present in the doctor’s office as well
• Doctors offices have to be careful using these systems, since they could exacerbate their scheduling problems. If a doctor is running one hour late, what is he going to tell his patients? To come one hour late? 45 minutes? 30 minutes? If the office is completely honest patients might show up late for the revised appointment and push the doctor’s schedule back farther. If the patient is told it’s a 30 minute delay but then has to wait another 30 minutes upon arrival anyway, satisfaction will suffer and the patient will game the system on the next appointment, making everything will go haywire
• Information on wait times has to be entered and updated manually. Can we really trust office staff to keep on top of this throughout the day, day after day? I highly doubt it
• Emergency room patients are not seen on a first-come/first-serve basis, so having information on wait times is not too helpful without corresponding triage information on the specific patient relative to others in the waiting room. It could be modestly helpful, though, in deciding which hospital to go to

Waiting room times are a fairly small part of the overall access and customer service problem in health care. In my opinion there’s no need for a new system and dedicated company for waiting room notifications. Maybe MedWaitTime will prove me wrong but I don’t think they have a business here. Doctors offices would do better to collect cell phone info from patients and text or call the day of the appointment if there’s a problem. They can also make the waiting room more pleasant and educational.

I also recommend open access scheduling for physicians offices. This addresses the much more troublesome issue of long lead times for appointments. I don’t really mind waiting 30 minutes in the waiting room for a same day appointment. I do mind getting an appointment date weeks or months out.

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This is the transcript of my recent podcast interview with PatientKeeper executives Paul Brient and Dr. Don Burt.

David Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Paul Brient, President and CEO of PatientKeeper and Dr. Don Burt, Chief Medical Officer.  Thanks for joining me today.

Paul Brient: Thank you David.

Williams: What are some of the issues that hospitals are facing regarding Meaningful Use?

Brient: Hospitals need to comply with 23 different criteria in order to achieve Meaningful Use.  Some of those criteria are relatively straightforward and things that most hospitals are doing or could easily do, for example filing claims electronically and checking eligibility.

However within Meaningful Use there are several “third-rail” complications, things that people have tried for a long time and have been really unsuccessful with, especially in the community setting.  These include Computerized Physician Order Entry (CPOE) and the requirement to share information, although at least in Stage One the requirements for information sharing are pretty straightforward. But as we all know that is something that the industry has tried under different acronyms, starting with CHINS back in the late 80′s and early 90′s and the RHIOs in the early 2000′s, neither of which got significant traction.  So there are real challenges within the context of Meaningful Use.

Williams: A lot of the discussion about Meaningful Use has been about physicians and electronic health records.  Are electronic health records something hospitals have deal with as well?

Dr. Don Burt: David, this is Don Burt and I’ll take that question.  Adoption of EHRs for Meaningful Use is very clear for the physicians.  It means that they have to implement the electronic health record in their office.  They are responsible for making sure that happens in terms of effort and time and capital. The financial reward will also flow to the physicians through their office.

On the inpatient hospital side of Meaningful Use the equation is quite a bit more complex.  The financial outlay is by the hospital and is layered on top of a lot of investments that the hospitals have already made in their IT infrastructure over many years.  The effort to get to Meaningful Use involves both physicians and hospitals, but the reward flows exclusively to the hospitals. The result, if it’s not done appropriately could be a decrease in physician productivity.

So for physicians there is a direct impact if their productivity goes down on their income and their ability to support their office.  Interestingly, if not done appropriately it could also decrease the hospital revenue if the physicians become less productive.

Finally, even if hospitals install software 100 percent successfully, it won’t count as Meaningful Use unless the physicians actually use it.  Residents and employed physicians are a little bit easier for the hospitals to mandate,  but as far as affiliated or non-employee physicians it becomes very difficult.

Williams: I’m just going to go back to CPOE for a minute. Paul you described that as one of the third-rail items. I guess unlike the CHINs and RHIOs it’s not one that’s changed acronyms over time. But how does CPOE fit in here and why has it been a third-rail issue?

Brient: CPOE fits in because one of the criteria for Meaningful Use is that 10 percent of your orders must be entered by physicians directly. As you point out, the acronym has been around almost since the dawn of computing.  The issue is that it slows physicians down or historically has slowed physicians down and requires them to change their workflow. That has been a real challenge to get implemented.

Roughly five percent of hospitals in the country, mostly academic medical centers, have CPOE in some level of deployment and adoption. But if you look out into the community with a typical hospital, there is very little adoption of CPOE, largely because if it slows the doctors down they’re not going to use it. And if they don’t use it, why did you deploy in the first place?

Burt: I’m a geriatrician and on average I could write my orders in maybe three or four minutes.  It would be longer for admission orders, shorter for follow up orders. There’s documentation that some CPOE systems that have been deployed would actually take the physician 30 to 33 minutes to enter their orders. Because of the information needed –lab results, my test results, my notes– I have to go to multiple places to find that information. When it takes that long, instead of decreasing medical error it can actually increase medical error. So these things have to be done very carefully.

Williams: Clearly hospitals are in a challenging situation.  They’ve had all the problems with CPOE of trying to influence physician behavior. But now it’s really going to start to count against them in terms of lost opportunities on Meaningful Use for incentives, and then eventually penalties.

So what can PatientKeeper do about it?

Brient: Our company was founded on the premise that in order to get physicians to use technology you have to save them time and improve the workflow.  If technology doesn’t really help us or make our lives better, we’re probably not going to use it.  We have always emphasized what we call “physician affinity.” When we go to a hospital we focus on how to make doctors happy and make them want to come practice medicine at that facility.  We are extending that notion into this dangerous third-rail territory called CPOE and the Meaningful Use criteria.

Eighteen of the 23 Meaningful Use criteria are physician-facing or involved with the physician; we help our clients meet those 18 criteria.  The other criteria that are more administrative we don’t play a big role in. But since Meaningful Use is about how to get the doctors to adopt it and use it and not slow them down, we think we’ve got a pretty big role to play.

Williams: How can you do that when other CPOE solutions have had such a challenge?

Brient: Our approach to building software is to start with the physician and work backwards. For some things that’s pretty straightforward.  In CPOE when you do that you end up with a product that is radically different than the CPOE systems that are on the market today. In fact in some cases some of our design tenets fly in the face of what the traditional view of CPOE is.

For example there is a view that you should have standard order sets for all of your conditions. That’s certainly a noble end goal but most CPOE systems make that a prerequisite. As a result you have to change your physicians’ practice patterns when they’re trying to use the computer system. And oh by the way, 70 percent of those orders in those orders sets aren’t really evidence based anyway. So you’ve got to get physician consensus before you can start.

Our philosophy is why do that?  Computers do a great job of customization and personalization, so let’s start with personalized order sets and work our way in a change management approach towards standardizing the things that matter. Frankly the things that don’t matter — let them be different.  So it puts a lot less change on the physician and makes it so that you don’t end up with these nine page consensus order sets that are really more Frankensteinian than anything else. This is a very radical approach but one that has been almost universally embraced by the community hospitals with whom we work.

Williams: A lot of folks are talking about Meaningful Use these days because that’s where the money is.  If Meaningful Use weren’t in the picture would your approach be different?

Brient: Our approach would be the same.  In fact we’ve been designing our CPOE products for the past seven years. However our timing would be very different.

Left to our own devices, if Meaningful Use had not occurred, we would probably be starting our CPOE product in a year or two. We would expect it to be almost like a long-burn R&D project where we would have to convince the market that CPOE would actually work, because most of our clients before Meaningful Use were hoping to retire long before they had to deploy CPOE.

So because of Meaningful Use we have definitely stimulated our little part of the Boston economy. We have almost doubled the size of our R&D organization to build this product that we always wanted to build because it’s an important part of the physician workflow. We believed well before Meaningful Use that we could do it differently, but the marketplace frankly was not in any way, shape or form embracing the concept at all.

Williams: I’ve seen some speculation that the Meaningful Use requirements might be scaled back because they’re considered to be difficult to meet, especially by some of the constituencies that you’re serving, in other words the community hospitals.  Do you think that’s likely to happen and do you think that’s a good idea?  Have we been too ambitious in setting out Meaningful Use requirements?

Brient: If you look at the delta between what was published last summer and the regulations published in December, to some extent they’ve already been scaled back once. I know there’s certainly a lot of speculation and requests from different provider organizations to scale them back more.

My personal view is that hospitals may say, “Hey there are 23 criteria. As it’s written now, if I do 22 of them and miss one of them, I don’t get any money at all.  That seems a little harsh, frankly, especially when you look at some of the criteria.”

If were king for a day, I might create some core criteria – ten or twelve things that you must do– then require some percentage of the remaining.  It might be a nice way to peel it back and not compromise the core.  But fundamentally, the notion behind Meaningful Use and the notion that we want to automate the workflow is a good tenet in getting people to focus on CPOE, whereas before no one was focused on CPOE.

The question is can we do it in a way that doesn’t have a negative impact on the health care system? The reason we want to do it is to make the health care system better. If we go about it in a way that decreases productivity we’ll have to make health care more expensive and maybe cause physician shortages.

Error is another issue. Handwritten records often have errors.  Well computers make errors too, just different kinds of errors.  So there have been certain situations that have been put in place that actually decrease productivity because new insidious errors show up.  If I type 54 instead of 45 you don’t even know there was a problem there.  It looks perfectly fine.  So there are other kinds of errors that can be made in the electronic world.  As long as it’s done right, I think we’re very much on the right track.

I know the folks that are working through this have a very difficult challenge with balancing the political constraints, the realities of the health care world and a desire to create change. Change requires work and costs money.  They’re doing a very noble job and I do not envy them.

Williams: Don, what are you hearing from your physician colleagues who are hospital-based?  Is there an awareness of Meaningful Use and that things are changing or has it not risen to the top?

Burt: It has very much risen to the top.  There is a big difference between self-employed and employed colleagues.  The largest concern I’m hearing is from community physicians. They have to implement an EMR. Basically if they do it all 100 percent right maybe they get $44,000 out of it. But if it decreases their productivity their income suffers as well.

Then on top of that they’re very much aware of the fact that the hospitals are all trying to get them to use their hospital information systems, specifically CPOE. They’re very concerned that their productivity and income will suffer while the hospital is getting all of the gain.

Williams: Most of the money for ONC as part of the stimulus package is for these physician incentives and hospital incentives for Meaningful Use. But there’s another couple of billion dollars for things like Regional Extension Centers, statewide HIEs, Beacon Communities and the SHARP grants.

What impact will those programs have?

Brient: These programs are a really interesting idea and if executed well, in some ways could have a bigger impact on the health care cost and quality equation than just about anything we’re doing.

If you think about this as a broad package, wiring up the practices and getting all the hospitals on electronic systems, that is in some ways a first step toward dealing with the health care delivery challenge that we have in this country. And these programs, especially the Beacon Community grants, are really focused on trying to identify where there are opportunities to reduce cost and improve quality and hopefully, frankly just to reduce cost. This will be done locally with physician engagement, which I think is very important.

I’m a little bit concerned given the reaction of the U.S. population to the mammogram study that came out recently changing the recommendations for when women should received mammograms, based on what appeared to be some scientific analysis.  If we’re not willing to make changes to our health care system based on understanding the efficacy of different treatments and procedures as a society, we’re going to have a very difficult time and these programs will have a low impact.

I’m hopeful that as a society we can start learning from the potential that exists in these databases and the practice of medicine throughout the country and really start to make some changes to how we deal with health care.

Williams: I’ve been speaking today with Paul Brient, President and CEO of PatientKeeper and Dr. Don Burt who is Chief Medical Officer.  Thank you very much.

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Entries are rolling in for the Health Wonk Review blog carnival. If you want to participate please send your entry by Wednesday 9 am EDT via the Blog Carnival submission form or email.

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The new health insurance reform law will generally require health plans to pay out at least 80 or 85 percent of premiums in medical expenses, depending on whether they are selling to individuals/small groups or to large groups. Intuitively it makes sense that purchasers would want the medical loss ratio to be as close to 100 percent as possible –since the purchaser doesn’t derive utility a plan’s administrative expenses and profits.

But there is another way to look at it.

From a personal perspective, I’d rather stay away from doctors, hospitals and pharmacies. If I get just my routine physical and recommended screening tests my medical cost will be very low. If everyone’s like that, then the insurance company will have a very low medical loss ratio. Maybe I’ll get lucky and it will just happen that way on its own. On the other hand, I can envision scenarios where administrative activities by my health plan help keep me healthy and away from expensive but not useful medical products and services. For example:

• Smoking cessation or anti-obesity programs that help me stave off diabetes and heart disease
• Utilization management that keeps me from getting unneeded CT scans
• A subsidy for gym membership that keeps me in shape
• Health literacy programs that help me interact with the health care system more intelligently
• Network development so that the best physicians and hospitals are in network
• Benefit design that encourages appropriate use of the health care system

Having lost the battle on medical loss ratio regulation, health plans are busy trying to classify many of the above expenses as “medical costs.” They’ll have some success in that regard but it won’t get them where they want to be.

Another reason to allow low medical loss ratios is it keeps premium inflation down over time. If insurers can make big profits by holding the line on costs, those profits will eventually be competed away. If the goal is to spend a high percentage on medical costs, the tendency will be to drive premiums up over the long term so that relatively fixed administrative costs (like executive salaries) decline as a percentage of premiums.

I’m not saying all administrative costs are good. But it is foolish to look at medical costs as good and administrative costs as bad.

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Health IT company PatientKeeper helps hospitals and physicians transition from paper-based, fragmented environments to ones where information is digital and integrated. In this podcast interview, Paul Brient and Dr. Don Burt, CEO and CMO respectively, discuss Meaningful Use and the role of Computerized Physician Order Entry (CPOE).

In particular, they cover:

• The key issues for hospitals in achieving Meaningful Use
• The role of CPOE, EHR and other technologies
• How PatientKeeper helps hospitals achieve Meaningful Use
• How Meaningful Use requirements are likely to be modified over time
• The role of various ONC grant programs such as Regional Extension Centers, Statewide HIEs and Beacon Communities

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David Williams interviews Paul Brient and Don Burt Play Now | Play in Popup | Download

Prescription drug utilization among children increased 5 percent in 2009, according to the Medco 2010 Drug Trend Report. The growth rate was four times as high as the population overall.

Twenty-six percent of insured children 0-19 and almost 30 percent of those aged 10-19 take one or more prescriptions for chronic conditions. Fastest growing areas in the 200s: antipsychotics, diabetes, asthma.

“[An] alarming trend since the beginning of the decade is the increasing use of medications taken by children on a regular basis and in some cases, for conditions that we don’t often associate with youth, such as type 2 diabetes,” said Dr. Robert S. Epstein, Medco’s chief medical officer and president of the Medco Research Institute in a press release.  “The fact that one-in-three adolescents are being treated for a chronic condition points to the need for additional health education and lifestyle changes that can address the obesity issue that is likely a driving force behind such conditions as type 2 diabetes and even asthma.”

Epstein and Medco CEO David Snow expanded on the findings in a conference call today.A few takeaways from the call:

• I asked about the trend in the use of anti-psychotics by children. Epstein replied that antipsychotic use among kids has increased by about 100 percent over the last decade. He added, “The drugs are also used off-label for autism and a variety of behavioral problems. Some anti-psychotics can cause diabetes, and there are a lot of reasons to be cautious” about prescribing these drugs to kids.
• The increase in diabetes drug use was most profound in girls
• Obesity is the underlying cause for the increase in diabetes in kids but also leads to other problems. For example Medco is seeing an increase in the use of lipid lowering and anti-hypertensive agents among kids. In addition, the rate of pre-diabetes is 10 times as high as for diabetes, so the diabetes figures are just the “tip of the iceberg.”

Other highlights from the report:

• ADHD drug use is rising quickly, especially among those under 35. In the 20-34 age range utilization jumped 21 percent.
• Use of stimulants for ADHD and other indications is expected to keep rising over the next few years, especially if Nuvigil is approved to treat jet lag
• Diabetes, oncology and rheumatology treatments will drive growth through 2012
• $46 billion in branded drug sales will shift to generic by the end of 2012
• Biosimilars and biogenerics won’t be a factor in the market through 2012 at least

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Under health care reform, insurers must pay at least 80 percent of premiums out in the form of medical expenses. The goal is to make insurance more affordable, reduce insurance company profits and improve value for consumers and individuals. Insurers are looking to trim administrative expenses to meet the requirements, and they have sales commissions in their sights. As the Wall Street Journal reports (Health Overhaul Hits Sales Commissions):

Among the first to feel the effects of the nation’s health-care system overhaul are insurance salespeople, whose commissions for selling policies to individuals and small groups are themselves getting overhauled… The commissions typically run between 4% and 6% of a policy’s premium, but can be as high as 30% for the first year.

Companies are already starting to change how they pay salespeople. Starting on May 1, Independence Blue Cross of Philadelphia, Pa., stopped paying small-group agents a percentage commission and instead switched to a monthly flat fee for each contract sold.

What’s going on here? Independence Blue Cross actually has a medical loss ratio of 85 percent, so it doesn’t need to cut commissions to meet the requirements. Instead, the company and others are using health reform as an opportunity to put pressure on the brokers and ultimately change the way insurance is sold. Insurers are often unhappy with brokers, especially when they switch customers between plans from one year to the next in search of a higher commission or to show their clients they are adding value. But insurers are also wary of making unilateral changes, fearing they will lose market share.

What’s going on now in health insurance reminds me of the shift by the airline industry a few years ago. In the olden days travel agents routinely received a 10% commission on domestic tickets. Eventually airlines turned to direct sales by phone and the Internet to get rid of travel agent commissions entirely. It helped to have airlines like Southwest that pioneered the direct sales model. Something similar is going on with health insurance. I wouldn’t be surprised to see insurers opening up their own retail branches and increasing their web presence.

Now that medical underwriting is falling by the wayside the selling of health insurance will become more commoditized. That will enable health plans to shift to a different model. Those that move aggressively will enjoy a competitive advantage through lower costs. My insurance agent friends might be upset at me for pointing this out –but I hope they don’t shoot the messenger.

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