Change and Opportunities

By: Bill Cockrell
Cockrell and Associates, LLC

When I got into healthcare management 32 years ago (yeah, I’ve been around), Medicare paid based on your usual, customary and reasonable (UCR) fee schedule, not a system based on relative value units and a “sustainable growth rate (SGR)”.  Indeed, that was a time when you charges meant something beside what you base your contractual write off’s on.  Malpractice claims were around but were relatively rare.  We weren’t dealing with EMR’s, HIPAA, Stark Law, HMO’s, PPO’s, ACO’s or many of the other issues that face us today.  I thought, at the time, this is the easiest job in the world, the doctor sees the patient, the patient appreciates it and follows the doctor’s direction, we bill the patient who, usually, paid the bill and then collected from the insurance company themselves.

 

Today, we have The Accountable Care Act or ACA, multiple payer models, a world where we can charge what we want (and nobody cares, they pay based on their fee schedule), the Hitech Act, OIG scrutiny, RAC audits and all those other acronyms listed above.  We have the annual battle over what to do about an increasing SGR cut (despite hopes to see a true fix in 2013).  We work in an environment where everything is questioned by an increasing army of watchdogs.  We’re forced to document and share more information than ever before and there are people actually watching what we say, We have The Commonwealth Fund reporting through their www.whynotthebest.org web site and CMS rolling out their Physician Compare website and other grading systems.  Added up there are plenty of things to deal with, but is it all bad? 

 

The facts are we cannot maintain the spending pace we see, even though overall spending in healthcare is growing at a slower rate.  If we are honest with ourselves, we can all see situations where the current delivery system of medicine is ineffective.  Providers are rewarded on a transaction basis – the more they do, the more they get paid.  Specialties compete with each other for higher payments because, if we can’t increase the funds available, the only place for money to come from is from someone else. 

 

The result of all of this is that providers have to find better ways to coordinate care for the long term.  I still run into providers who are unwilling to “bite the bullet” and install an EMR (they are going to get left behind because they will be at a “competitive” disadvantage compared to their colleagues).  That competitive disadvantage comes in the form of overall quality limitations and higher costs.  This may not be on an individual physician basis but on the level of comprehensive care for an individual patient where we really can reduce costs by eliminating duplicate testing.   It’s also not good enough to claim “my patients are sicker” so I should be paid more.  The question is, can you prove it.  When a provider files an insurance claim, how many diagnoses do they enter?  Is it all, or many of, the diagnoses related to that patient or are they just the ones required for payment for that visit.  Yes, it’s more paperwork (or less if you really use an EMR) but it gives a better picture of what is going on with that patient.

 

New payment models designed to take care of patients over a longer period of time are being developed every day.  The growth of Accountable Care Organizations (ACOs), which I originally questioned, shows the focus on quality and cost over an initial three year period.  Patient Centered Medical Homes (PCMH) focus care on the patient over extended periods of time.  Reduced readmissions reduce costs and save lives because, hopefully, those readmissions are reduced because we did a better job up front.The problem is we live in a time where we want to feel gratified (paid) now.  Whether it is quarterly or annual bonuses or other rewards few deal with results from long term success.  MGMA’s Connexion Magazine summarizes ACO shared savings as “Share rate x (expected expenditures – actual expenditures) x quality multiplier = realized shared savings” (November / December 2012 edition).   The article goes on to point out that the problem is the quality measures have a long term focus.  Of the 33 measures only six (readmission rates, ambulatory-sensitive condition admission rates, medicine reconciliation, screening for falls and vaccinations) can be expected to generate short term savings.  And, once again, that frustrating documentation issue is part of the equation.

 

So, all that said, when you look at where things are, we can oppose all change or we can pick the best parts, work to implement them, and fight those parts which might not really be in the best interest of the patient but might look good politically.  Providers need to work together to make sure the best care is delivered and not as individual groups who are protecting their own turf.  If the providers don’t do it, someone else will, and they might not be the best ones to decide these things and we don’t need bureaucrats making healthcare decisions.Unless a provider is planning on retiring in the next couple of years, it’s time to add long term thinking to our existing short term processes.

 

So, in the final analysis, we can focus on fighting all change or we can adopt the opportunities that exist for improvements in the healthcare delivery system.  And, if providers really take the lead, some good things might really happen.