Guest post by Ken Perez, vice president of healthcare policy, Omnicell.
Bipartisanship is not dead in the United States, and that is good news for physicians as well as Medicare beneficiaries. Building on bipartisan and bicameral support of sustainable growth rate (SGR) reform proposals that emerged at the end of 2013 and again in 2014, on Mar. 26, 2015, the House of Representatives voted overwhelmingly—392-37, with support from 212 Republicans and 180 Democrats—to pass H.R. 2, The Medicare Access and CHIP Reauthorization Act of 2015, also known as “MACRA.” Then on April 14, two days after returning from its spring recess, the Senate passed the legislation in a similarly overwhelming manner, 92-8, and a couple of days later, President Barack Obama signed MACRA into law. Thus came to an end an unpopular legislative provision that had been worked around repeatedly since 2003.
For long-time SGR critics, the passage of MACRA elicited the same kind of feeling of relief one experiences at the end of a long plane flight, when the plane’s wheels finally touch down on the tarmac.
Enacted as part of the Balanced Budget Act of 1997, the SGR formula incorporated medical inflation, the projected growth of per capita gross domestic product, forecasted growth in the number of Medicare beneficiaries, and changes in law or regulation.
The SGR required Medicare each year to set a total budget for spending on physician services for the following year. It also sought to enforce long-term fiscal accountability. If actual spending was higher than the annual budget, the Medicare conversion factor that is applied to more than 7,400 covered physician and therapy services in subsequent years was to be reduced so that over time, cumulative actual spending would not exceed cumulative budgeted (targeted) spending, with Apr. 1, 1996, as the starting point for both.
Partially because of the effective lobbying efforts of physicians, Congress temporarily suspended application of the SGR by passing legislative overrides or “doc fixes” 17 times from 2003 to 2014. As a result, actual spending exceeded budget every year during those years. Because the annual fee update had to be adjusted not only for the prior year’s variance between budgeted and actual spending but also for the cumulative variance since 1996, the next proposed update, effective Apr. 1, 2015, (but in practical terms implemented in the latter half of the month), would have been a dramatic reduction in Medicare physician fees of 21.2 percent.
Health eCareers’ new 2015 Healthcare Recruiting Trends Survey found that the demand for healthcare services is predicted to swell over the next 10 years. Unfortunately, the supply of healthcare providers is unlikely to keep up with this increased demand, creating a shortage of qualified physicians – especially those in family medicine, psychiatry, internal medicine and a variety of other specialties.
Health eCareers offers tips for healthcare employers and recruiters to address the intense hiring challenges created by the gap between physician supply and demand.
Factors Creating Physician Shortage
Bryan Bassett, Managing Director of Health eCareers, says four demand-side factors are driving this shortage: millions of newly insured people entering the system due to the Affordable Care Act, aging baby boomers with increased medical needs, aging caregivers reaching retirement age and a stronger economy.
There are also lifestyle factors at play causing shortages in specific fields, such as primary care. “Although more students are actually entering medical schools and residency programs than a decade ago, today’s young physicians often choose to specialize rather than choosing primary care as a way of ensuring a better work-life balance than their predecessors,” says Bassett.
But there’s also good news for hospitals hoping to hire new doctors.
“In the past two years, we have seen more physicians who want to be employed by healthcare organizations rather than going into private practice,” explains Barkley Davis, Senior Director, Physician Recruitment at LifePoint Hospitals®, a public company with 70 hospitals in 22 states focused primarily in non-urban markets. “They’re looking for a stable environment that has financial backing and a lot of things already in place, such as a built-in practice, electronic records, billing and collections and minimal financial risk. It’s a security thing.”
IDC Health Insights estimates that the combined annual growth rate in the analytics market during the 10 years from 2010 through 2020 will be in the 8 percent to 11 percent range; this places analytics among the top areas of spending growth for hospitals and health systems during this decade. This attractive growth rate has led to numerous new products joining an already-crowded supplier landscape.
The U.S. healthcare provider analytics market has experienced rapid growth and change since the introduction of accountable care with the patient protection and affordable care act (PPACA) of 2010. Analytics are clearly a critical tool that will allow health systems to understand and respond to the business model change and disruption of accountable care, and many types of analytics models and tools will likely be useful to providers. This IDC MarketScape report focuses on analytics platforms that allow providers to examine clinical and financial data together, and to use this data to provide actionable advice for optimizing delivery of care.
Key findings from the report include:
Clinical and financial analytics take many forms. This report examines platforms that allow providers to approach analytics in multiple ways, with agile tools that may include clinical and financial analytics, text and data mining, population health analytics, cost and cost accounting analytics, performance and quality management analytics and dashboards, as well as data exploration tools that can be applied to as-yet-undiscovered questions. This report examines the flexibility of analytics platforms as well as the strength and weaknesses of individual analytics applications available on the platform.
No analytics solution will meet all needs out-of-the-box. Successful analytics programs will develop and nurture platforms that assemble and manage data, offer tools to ensure data quality, and offer applications that allow providers to explore and assemble data on-demand into analytics models that meet business needs, whether they are long-established business needs or spur-of-the-moment questions.
The only valuable analytics are actionable analytics. Analytics are only valuable if they make the right information available, at the right time, at the point of decision making. Solid data and data management approaches are the foundation of analytics platforms, but the rigor of data integrity processes must be balanced.
Guest post by Geoff Zawolkow, CEO, Lab Sensor Solutions.
I woke up this morning, anxious about my doctor’s appointment. I quickly showered, dressed, walked and fed the dog, grabbed my phone, and hopped in the car for the 30-minute drive. As I took my seat in the waiting room I realized that I’d forgotten to set my home alarm.
Because of IoT the solution is now simple. I bring up the app on my phone and set the alarm to “Away”, and while I’m at it I decide to program my DVR to record the season finale of “Downton Abbey.” So, I bring up the DVR app on my phone and click-click-click, Downton Abbey will be recorded. Maybe I’ll watch last week’s episode right now, but with that, I’m called into the exam room for my appointment.
With IoT bringing convenience and luxury like this into the lives of everyone with a smart phone, it’s logical that this same technology has been extended for use by the healthcare community and the clinical laboratory in particular.
In 1999 when the article “To Err is Human—Building a Safer Health System” was published by the Institute Of Medicine, the number and complexity of medical errors shocked the whole medical community. Often, these errors could be attributed to human mistakes. Since that time the medical community has developed systems to help reduce those errors. Checklists during surgery, automated systems for testing blood in the laboratory, better procedures to prevent contamination. Even given these, eliminating errors has proven to be very difficult.
By Dave Wessinger, chief technology officer, PointClickCare.
It is estimated that one-fifth of the U.S. population will be 65 years or older by 2030. According to Florida Atlantic University, out of the 1.6 million Americans currently living in a nursing home, 60 percent of that population is sent to the emergency room, while another 25 percent are admitted to the hospital each year. As a result, the care transition process between senior communities and acute care providers has become critical to ensure the best outcomes for patients.
Traditionally, when a senior care resident is sent to a hospital, the receiving healthcare provider may not have a complete view of the patient’s history. Ideally, documentation and medical records should travel with the resident so that all the information clinicians will need to properly treat the individual will be available upon arrival. Unfortunately, this is often not the case.
The good news is that there is technology to help improve this process in three main ways:
Reducing unnecessary hospital readmissions
Reducing paper and therefore medication errors
Increased focus on person-centered care
Reducing unnecessary readmissions
There is a lot of talk in the industry about how technology is helping to reduce hospital readmissions, but these conversations often lack tangible, measurable results. One thing is certain – providers have benchmarks to meet. On Oct. 1, 2012, The Centers for Medicare & Medicaid Services (CMS) implemented penalties for hospital readmissions at a rate of one percent. By Oct. 1, 2014 this rate increased to three percent. By 2018, CMS is mandating that those same penalties that apply to hospitals will apply to skilled nursing facilities.
By Bill Reid, senior vice president of product, SCI Solutions.
Information Technology holds the promise to spur innovation in the healthcare industry. However, if IT investment is focused on simply meeting mandates and not on driving a specific differentiated business objective, then it begins to look a lot like what we are seeing today – extensive capital and resources spent on implementing and supporting IT initiatives that, so far, have provided little to no financial returns. But this does not mean that the promise of IT is empty. Instead, it calls attention to the need to look at IT not as a way to “check the box” and either collect federal incentive dollars or avoid eventual penalties, but rather as a key tool to remain competitive in the market as well as provide quality care.
In light of recent federal mandates under meaningful use regarding the implementation of electronic health records, many EHR vendors are now propagating the idea that their software is not only compliant with regulatory statutes, but is also a singular comprehensive and strategic IT investment. However, this is just half the truth.
Under the pressures of time and expiring incentives, many healthcare executives have leapt after EHR investments without understanding the real strategic reasons for making IT investments for their enterprises. Otherwise savvy and well-meaning healthcare leaders are allowing EHR vendors to convince them that an EHR is the answer to their business needs and will provide them with an edge over competitors in the market. In reality, EHRs fail to provide a competitive advantage once most or all hospitals in a geographic market have implemented the tool. How can an organization claim it is superior in IT if it is operating the same systems as every other provider in the market? EHRs must be approached as a one-time operational input or business asset similar to hospital equipment and not the core component of a broader IT solution needed to support a sustainable business strategy. As with most investments, it is what you do with it which matters, not that you simply own it.
With the dramatic changes that have taken place in the U.S. healthcare landscape over the past several years, it’s not surprising that healthcare CIOs increasingly find leading transformation and delivering on the organization’s core strategies and objectives included in their responsibilities. (See SSi-SEARCH Research “Healthcare’s Million Dollar Man”) The CIOs for small to mid-sized payers and third party administrators are no exception.
When it comes to freeing up IT resources for mission-critical strategic tasks, decisions regarding enterprise software solutions should not be overlooked, as they can have a significant impact on success for healthcare organizations in the small to mid-sized range.
While historical experience in these IT organizations may create a bias toward choosing on-premise software solutions, one should give serious consideration to three major benefits that cloud-based solutions can deliver to the organization: speed to market, scalability and total cost of ownership. These potential—and sought after—benefits hold the promise to deliver critical return on investment and serve the critical goals of both the IT organization and the business users within the company. Let’s take a closer look at each.
Speed to Market
At first glance, the initial deployment time for cloud or desktop (on-premise) applications can appear similar. However, two areas that impact overall deployment time should not be overlooked: capabilities and accessibility.
Capabilities
One characteristic typical of cloud applications is that they generally have more robust capabilities than on-premise software. This makes them easier to use and manage by a broader group within the organization and readily delivers on the promise of fast deployment. Overall deployment of cloud applications often takes less time than desktop applications because so much of it can be performed by a wider range of (less technical) users, rather than being dependent on the schedule and resources of IT.
On Apr. 17, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update fiscal year (FY) 2016 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The proposed rule, which would apply to approximately 3,400 acute care hospitals and approximately 435 LTCHs, would affect discharges occurring on or after Oct.1, 2015.
The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and market conditions to the hospital’s geographic area.
The proposed rule proposes policies that continue a commitment to increasingly shift Medicare payments from volume to value. The administration has set measurable goals and a timeline to move the Medicare program, and the healthcare system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.
This fact sheet discusses major provisions of the proposed rule.
Background
CMS pays acute care hospitals (with a few exceptions specified in the law) for inpatient stays under the IPPS and long-term care hospitals under the LTCH PPS. Under these two payment systems, CMS generally sets payment rates prospectively for inpatient stays based on the patient’s diagnosis and severity of illness. A hospital receives a single payment for the case based on the payment classification – MS-DRGs under the IPPS and MS-LTC-DRGs under the LTCH PPS – assigned at discharge.
By law, CMS is required to update payment rates for IPPS hospitals annually, and to account for changes in the costs of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. This is known as the hospital “market basket.” LTCHs are paid according to a separate market basket based on LTCH-specific goods and services.
Changes and Updates in FY 2016 Policies
Proposed Changes to Payment Rates under IPPS
The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is 1.1 percent. This reflects the projected hospital market basket update of 2.7 percent adjusted by -0.6 percentage point for multi-factor productivity and an additional adjustment of -0.2 percentage point in accordance with the Affordable Care Act; like last year, the rate is further decreased by a proposed 0.8 percent for a documentation and coding recoupment adjustment required by the American Taxpayer Relief Act of 2012.
Hospitals that do not successfully participate in the Hospital IQR Program and do not submit the required quality data will be subject to a one-fourth reduction of the market basket update. Also, the law requires that the update for any hospital that is not a meaningful EHR user will be reduced by one-half of the market basket update in FY 2016.
