Health Business Blog

When I lived in Hong Kong years ago I used to read about crazy stories happening in places like the Phillipines, where a woman supposedly gave birth to a fish. Hundreds of people came to see the miracle/freak show and it made for some light entertainment around the region. We don’t have a lot of stories like that in the US, but we do have some equally outlandish medical billing tales. Here’s one from FierceHealthcare about a woman whose estate received a $9.2 million bill from a hospital in Tampa, FL. The patient had progressive demyelinating neuropathy and passed away a couple years ago.

The patient’s mother Holly Bennett accused the hospital of not feeding her daughter and giving her too much morphine, which, she claimed, resulted in the patient’s weight falling to 37 pounds.

The hospital is suing the patient’s estate for the outstanding bill.

“If they think they’re getting money from me, they’re crazy,” Bennett said in the article. “Who’s ever even heard of a bill that high?”

Although the hospital charges will likely drop to $2.25 million after readjustments, Bennett told ABC News she would not pay the multimillion-dollar bill. She said that she never received an itemized bill during the five years of treatment and that the lawsuit is a strategy to prevent her from filing her own lawsuit for medical malpractice against the hospital.

I’m sure there’s much more to the story than the article reveals. Still, it demonstrates a number of flaws in the system. Notably, the bill is beyond any reasonable comprehension and “readjustments” that can turn $9.2 million into $2.25 million show there’s no rational basis for pricing. Obviously something wasn’t managed well along the way if the bills were allowed to linger unpaid for five years. Why didn’t the patient have insurance or sign up for Medicaid? And clearly the customer service experience appears to have been worse than most.

It’s pretty obvious that the hospital won’t recover its expenses from this patient’s estate. But if the costs are real, someone is paying. It’s probably commercially insured patients paying more than they should.

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Nefsis provides cloud-based, multi-point HD video conference solutions for a variety of industries, including health care. In this podcast interview, Nefsis VP Tom Toperczer describes telemedicine applications including hospital/remote clinic consultation and tele-psychiatry. He also describes how health care applications differ from those in other industries.

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David Williams interviews Nefsis' Tom Toperczer [ 8:48 ] Play Now | Play in Popup | Download

Jacob Irwin hosts the latest Cavalcade of Risk blog carnival.

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Capacity management is one of the top two or three drivers of hospital profitability. With continued reimbursement squeezes and the emergence of global payments, strong capacity management will be needed for survival.

In this podcast interview, Jeff Terry of GE Performance Solutions and I discuss:

• The difference between capacity utilization and occupancy
• The microeconomic and macroeconomic consequences of improved capacity management
• The interrelationships among strategy, technology, operations, process improvement, scheduling and governance in capacity management
• Similarities and differences with other industries

This topic may sound dry to you, but it’s one of my favorites!

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David Williams interviews GE's Jeff Terry [ 13:22 ] Play Now | Play in Popup | Download

I really liked Dr. David J. Gross’s letter to the Wall St. Journal advocating that estates reimburse Medicare in cases where the program has paid out more than the recipient paid in.

A couple of people  –one in the comments section of my blog post, and another in a WSJ letter reply– make what they must think is the killer counter-argument:

• If estates have to pay for overuse, then they should also be reimbursed for underuse. Today’s WSJ letter writer included Social Security in this argument, then ends the letter with “Nice try, but not too logical.”

Maybe I’m missing something, but I’m having trouble understanding where these commenters are coming from. Based on the context of their comments, I think perhaps their main issue is ideological opposition to estate taxes. But in my view, their arguments to provide refunds for underuse are improvements on the original concept, not arguments against it.

• Providing refunds could enhance cost consciousness among recipients, thus helping control the cost of the overall program
• It would increase alignment between patients and Accountable Care Organizations

Why not start by implementing a 25 percent levy when Medicare pays out more than it takes in, with a 100 percent refund when Medicare has paid less?

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For some reason the Boston Globe devotes its top slot on today’s Opinion page to a tired and faulty argument (If a law doesn’t work, waive it away?) from former US GOP Senator John Sununu against the employer mandate in the Patient Protection and Affordable Care Act (PPACA). The Department of Health and Human Services has granted waivers to some employers to allow them to continue offering plans with low annual caps (aka mini-med plans).

Here’s how Sununu puts it:

A note to social engineers of all parties: If you have to protect 3 million people from a brand-new law, it probably wasn’t very well written in the first place. That this was an unintended consequence is clear from the fact that the law never contemplated a need for waivers in the first place. In a stroke of bureaucratic magic, HHS simply granted itself the power, and started dispensing the passes.

This is a real cheap shot. PPACA is being rolled out between 2010 and 2014. The waivers are temporary and expire by 2014, when health insurance exchanges and subsidies for lower income employees are to be in place. The temporary nature of these waivers isn’t even hinted at in the article.

The objective of health reform is to get more people into coverage, not to toss them out. So the waivers are a very reasonable and rational form of government flexibility. As a commenter notes:

Agencies grant waivers all the time, regardless of whether the underlying law specifically contemplated it. Waivers are contemplated for anything that is not a clear statutory requirement (i.e. clearly stated in the law), it is not required that the underlying statute specifically allow it. Otherwise, we would be granting administrative pronouncements of the Executive Branch the same force as laws passed by Congress.

One reason health reform is so messy is that it represents a pragmatic approach. Rather than trying to shift everyone suddenly to a utopian system (such as single payer), reform leaves employer-sponsored insurance in place alongside government programs like Medicaid and Medicare. The real world is messy, something Sununu should at least be willing to acknowledge.

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FDA is proposing regulation for mobile medical applications. Not a bad idea. But I have some concerns about what it will mean for clinical diagnostics software. Here’s the definitional passage:

Mobile apps that allow the user to input patient-specific information and – using formulae or processing algorithms – output a patient-specific result, diagnosis, or treatment recommendation to be used in clinical practice or to assist in making clinical decisions. Examples include mobile apps that provide a questionnaire for collecting patient-specific lab results and compute the prognosis of a particular condition or disease, perform calculations that result in an index or score, calculate dosage for a specific medication or radiation treatment, or provide recommendations that aid a clinician in making a diagnosis or selecting a specific treatment for a patient.

Apps that provide differential diagnosis tools for a clinician to systematically compare and contrast clinical findings (symptoms/ results, etc.) to arrive at possible diagnosis for a patient.

One could imagine applying regulations to a simple calculator app with an algorithm that gives an exact result, but it seems like the proposed regulation also would also apply to diagnostic software that deals with thousands of diseases.

Such software responds differently depending on which of thousands of findings a physician chooses to enter.  One could never test all combinations, and although the diagnosis models can be excellent, I’ve never heard anyone claim they are perfect.  Is the FDA really proposing to require each version of diagnostic software to get putatively exhaustive testing before release?  This is not really possible, and not even close to possible in fields in which the knowledge changes very rapidly.

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MedCPU is a real-time decision support platform that uses screen extraction and computerized analysis of structured and unstructured electronic medical record data to advise clinicians when they are deviating from clinical guidelines or compliance requirements.

In this podcast interview, Americas CEO Dan Neuwirth discusses the company’s origins, technology and initial applications in decision support for obstetrics. He also describes the company’s compliance offering and plans to assist customers with the transition to ICD-10 coding and Accountable Care Organizations.

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David Williams interviews MedCPU's Dan Neuwirth [ 14:36 ] Play Now | Play in Popup | Download

Workers’ Comp Insider hosts the heatwave edition of the Health Wonk Review.

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Foes of the Patient Protection and Affordable Care Act (PPACA) made a big point of complaining about the length of the bill. Personally, I think that criticism is unfair, because the law deals with a complex industry that’s almost one-fifth of the economy.

But today I read a brilliant two-sentence proposal in the letters section of the Wall Street Journal from David J. Gross, a Florida dermatologist. He was reacting to an article about the extensive cardiac care received by former vice president Dick Cheney.

Before any of Dick Cheney’s heirs get a nickel from his estate, Medicare should be reimbursed for the difference between what it paid out versus what he paid in all these years. This same paradigm should apply to all of us.

(Actually the essence is expressed in just one sentence.)

If we actually implemented that solution it would have significant salutary effects:

• Make Medicare financially viable for the long run
• Improve inter-generational equity
• Instill cost consciousness in Medicare beneficiaries, thus keeping a lid on expenses
• Reduce the need for an estate tax

Of course this proposal would have drawbacks and unintended effects:

• It would cause Medicare recipients to spend down or gift their estate. This phenomenon is well known among patients trying to qualify for Medicaid payment for nursing homes
• It would penalize those who are sickest
• It might cause people to avoid needed care, harming health and ultimately driving up costs
• In some families, it might lead to tensions among the generations
• The rules to actually implement such a system would be lengthy in any case, so a simple solution would turn into a complex one

On balance I think this proposal deserves some serious consideration. Maybe a modified version, e.g., a 10 percent repayment could be tried at first

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