Going into Drydock

I am going to take a bit of a sabbatical from this blog.  I am spending more time working with companies in the patient/provider communication space, and find my inspiration is aligning more around that subject. My husband and I contribute to a blog, “Leave a Message…”, where we share our thoughts about tips, trends, best (and worst) practices on how patients and healthcare providers interact, whether it is via phone, social media, the internet, patient portals, signal flags (just kidding)  or any other communication medium.

Healthcare is rapidly changing with tricky seas ahead. Some day, I may decide once again, to put this old boat back in the water   But til then I wish my readers smooth sailing and give a honk and a waive when you pass by.

Janet

Convenience Causes the Lines to Blur

No matter what your profession, during social events talk turns to topics that are related to what you do.   Lawyers are often engaged in conversation regarding legal topics, clergy often get cornered on religious topics, and nurses and physicians are often shanghaied into a conversation that has to do with someone’s health history.  Since my family knows that I am a recent Healthcare management MBA, the topic I often encounter is the business of healthcare, or why does it cost so much.   One such conversation occurred after Thanksgiving dinner, between my uncle, a retired businessman who survived a major health issue, my aunt who is a physician who works for the VA, and my brother who is a government employee.  The discussion had many interesting points, (VA clinics vs. Medicare vs. Private Coverage, what people pay in vs. benefits received), but what struck me as the “aha” moment was when we started comparing notes on where we all got our flu shots.   Gone are the days when you waited to make an appointment to get the vaccination from your doctor.  Nowadays, you are just as likely to get them from a pharmacist or NP at a drugstore, as you are from your GP or internist.   Cost is not a big driving factor, if one is covered by Medicare or private insurance (as we all were), the out of pocket cost is about the same.   The driver of our choices of where to go, seemed to be convenience.

The Thanksgiving conversation seemed to mirror the findings of a Rand report that was released earlier in the week.  A press release for the study noted a 10 fold increase in retail clinic usage between 2007 and 2009.  (If the numbers ran to 2011 I’m sure there would be a greater increase). The RAND team used data from a commercially-insured population of 13.3 million lives. Of that number, close to a third (3.8 million enrollees) made at least one clinic visit between 2007 and 2009.

According to the press release, “The strongest predictor of retail clinic use was proximity. Other key predictors are gender (females were more likely to visit clinics than males), age (retail clinic patients tended to be between the ages of 18 and 44; those over 65 were excluded from the study), higher income (those from zip codes with median incomes of more than $59,000 were more likely to use retail clinics than lower income groups), and good health (those with a chronic health complaint were less likely to use retail clinics).”

“It appears that those with a higher income place more value on their time, and will use clinics for convenience if they have a simple health issue such as a sore throat or earache,” said Dr. Ateev Mehrotra, the study’s senior author and an investigator at RAND and the University of Pittsburgh.”

The trend for healthcare provisioning in alternate venues will only increase as more businesses realize the synergy of being in the clinical space. If the Rand report is correct, it shows those who value time will opt for convenience (retail clinics close to home), leaving sicker/poorer patients to use the higher priced options (clinics and E/R’s).  While Wal-Mart back peddled on a rumored RFI to create a low cost integrated primary platform, (see here) make no mistake, it is looking at ways to increase its reach in the healthcare.  According to a recent report in FierceMobile Wal-Mart (like Walgreens and others) is exploring many options, including mHealth applications.  As these new players, with their deep pockets and consumer expertise, enter the clinical space, traditional players will need to adapt to keep profitable market share.   Like the dinosaurs, size will not matter.  Those who survive will understand the cultural shifts that have to start now, so that their organizations will be ready when this trend reaches critical mass. Don’t ignore the lesson of the independent drugstores. They used to be plentiful.  But when was the last time you saw one of them?

You have to give them carrots and sticks….

Hospitals are dammed if they do, dammed if they don’t.   The federal government is pushing them to reduce 30 day readmissions to lessen the Medicare spend.  However, when hospitals comply, they get bit.   An example taken from a recent post to the Bloomberg News website.

The Mount Sinai (NY) experience may be instructive. From September 2010 to May 2011, the hospital’s Medicare revenue rose only 2 percent over the previous year — in part because the number of inpatient cases fell. Why was that? One important reason was that the number of patients readmitted to the hospital within 30 days of discharge was 5 percent less than what it had been the previous year.

The post continues;

Reimbursement from Medicare is still primarily based on how many services hospitals perform rather than on how well they care for patients, so hospitals are often financially penalized for improving value and quality. The Mount Sinai program to reduce readmissions, for example, is costly for the hospital both because of the extra expense of running it and because fewer readmissions means less revenue. Ken Davis, the president and chief executive officer of Mount Sinai, says the hospital won’t be able to afford continuing the successful program if the financial incentives remain so skewed against it.

Granted the author, Peter Orszag has a political agenda with his views, having been a President Obama’s former director of the Office of Management and Budget.   However, the only reason Mt Sinai is even looking at reducing 30 day admissions is because they are no getting paid for it.  However if at the end of the day, the math doesn’t work, look for it and other hospitals to question their readmission reduction programs.

The Intersection of Cost, Quality, and Patient Satisfaction

Now that we are in the dog days of summer, I have some time to catch up on some of my backlog.  There were two items today that caught my attention.

John Goodman (the policy analyst, not the actor), has been writing in his blog about the relationship between the underlying cost of care, wait times, amenities and quality.  In an April 27 blog post he observes that when costs are transparent, and consumers have skin in the game, providers will compete on price and quality to garner business.  In a  follow up post dated June 29th , he writes about the inverse, what happens when third-party payors obscure the true cost of care.  Goodman notes that when patients do not make choices based on price, they will make choices based on time, quality or amenities.  And since quality information is the hardest to gather, patients will make use the markers that are easier to see, time to access, and amenities.  Goodman observes in markets where there is a undersupply of services, hospitals wanting to cater to patient satisfaction might not be as quick to improve quality if it means grumbling patients have to wait longer for services.  And in markets that have oversupply, many facilities go the less expensive route and compete on amenities, rather than instituting the more expensive changes that bring up quality levels. Goodman says it best “Some of the literature on hospital economics suggests that quality improvement is quite expensive, and that dollar-for-dollar amenity improvements will increase hospital revenues by more than quality improvement. This is coupled with surveys that find patients more sensitive to amenity changes than to quality changes. (Of course, this latter finding may only reflect the fact that hospitals aren’t really trying to communicate quality information.)”

A perfect intersection of what Goodman is talking about is a new service called InQuickER.  It is a website that allows patients to schedule their ER visits with participating hospitals.   My first reaction was “Are you kidding?”, but after I counted to 10, I started to smile.

The concept is brilliant.  Emergent cases are notified to go to the nearest ER. Non-emergent cases are slotted in predictable times. Patients love that they are not sitting around the ED waiting room.  Staff likes it because it allows load balancing of non-critical cases.  Participating hospitals like it as they are able to offer a low-cost perk, and differentiator.   There is a fee to use it, which looks like $4.99 for an urgent care center appointment, $9.99 for an ED appointment.

However I have to ask, if the patient is paying the true cost instead of the co-pay, would they be going to the ED for non-critical care in the first place?   Or would they go to a physician’s office (or retail clinic) instead?

>Unintended Consequences ?

>According to an article in the blog Medical News Today, the extended drug benefits in Medicare Part D, is a good news/bad news situation for seniors.  The article sites a study from the University of Pittsburgh Graduate School of Public Health, that shows access may not mean appropriate use.

The study included more than 35,000 Medicare beneficiaries and compared their use of antibiotics two years before and after the implementation of Medicare Part D. Researchers noted that the use of antibiotic treatment for pneumonia tripled among those who previously lacked drug coverage, which they say is encouraging given the high mortality associated with community-acquired pneumonia among the elderly. However, they also found increases in antibiotic use for other acute respiratory tract infections (sinusitis, pharyngitis, bronchitis and non-specific upper respiratory tract infection) for which antibiotics are generally not indicated.

From the report

“When drug coverage is generous, people are more likely to request and fill prescriptions for antibiotics, which may lead to misuse,” said Dr. Zhang. “Although many interventions have helped curb antibiotic prescribing for acute respiratory tract infections and other conditions, our study indicates there may still be substantial room for improvement through education and changes in reimbursement practices to reduce inappropriate use of these drugs.”

To see the entire article, click here

>The recession may be succeeding where policy has not…

>From today’s WSJ:

“People just aren’t using health-care like they have,” said Wayne DeVeydt, WellPoint Inc.’s chief financial officer, in an interview Wednesday. “Utilization is lower than we expected, and it’s unusual.”

Others say that consumers are beginning to forgo elective procedures like knee replacements. “We have a very weak economy and it’s just a different environment for the elective parts of health care,” said Paul Ginsburg, a health economist who runs the Center for Studying Health System Change and has been analyzing health-company earnings. But “this could go beyond the recession. Being a less aggressive consumer of health care is here to stay.”

 Employees with employer sponsored health insurance, are paying more out of pocket, with larger co-pays and deductibles. And for those who were laid off, COBRA has run out or is too expensive. Basic economics state that when the price of a good goes up, demand decreases. This coupled with a growing trend of consumerism in healthcare means providers will have to work even harder for a patient’s dollar.

Should be interesting….

>Who’s using the ED? Part 2

>Same topic – diffent lens.

The Healthcare Cost and Utilization Project and The Agency for Healthcare Research and Quality released a statistical briefthat examined hospital readmits in 12 states during 2006 and 2007. Some of the findings included:

• Two out of every five patients who sought acute hospital care (either an inpatient stay or an emergency department visit) from 2006–2007 in the selected states made multiple visits to the hospital during the two-year period.
• When looking at inpatient visits (IP), readmission rates increased with age and insurance.  Medicare patients (an elderly patient population) had the highest readmission rates, with an average of 1.9 stays per Medicare patient. Privately insured patients had the lowest readmission rates (1.3 stays per patient).
• In contrast to IP readmission rates, ED (Emergency Department) revisit rates were highest among younger patients, those covered by Medicaid, and those living in the poorest communities. Comparable to IP readmissions, the lowest ED revisit rates were among privately insured patients (1.6 stays per patients). However, unlike IP readmissions, Medicaid patients had higher ED revisit rates compared to Medicare patients (2.5 versus 1.9 stays, respectively), which is likely due to the younger average age of Medicaid patients.

While utilization trends are dictated by patient populations, can decreasing state budgets learn from private insurance?  Or is it all a matter of primary care access?

>Who’s using the ED? It’s who you think….sort of

>The National Center of Health Statistics (bet you didn’t even know we had one), released a data brief on the patient population of emergency rooms (ED’s) in 2007.

Some of their key findings were:

• Older adults (aged 75 and over), non-Hispanic black persons, poor persons, and persons with Medicaid coverage were more likely to have had at least one emergency department (ED) visit in a 12-month period than those in other age, race, income, and insurance groups.

• Among the under-65 population, the uninsured were no more likely than the insured to have had at least one ED visit in a 12-month period. (See chart below)

• Persons with Medicaid coverage were more likely to have had multiple visits to the ED in a 12-month period than those with private insurance and the uninsured. (See chart below)

• ED visits by the uninsured were no more likely to be triaged as nonurgent than visits by those with private insurance or Medicaid coverage.

• Persons with and without a usual source of medical care were equally likely to have had one or more ED visits in a 12-month period.

For more detail on the study, click here.

>Too much of a good thing?

>In 2006, Massachusetts enacted legislation that provided universal coverage to most of its residents. By July 2007, 80,000 low income adults were enrolled in the new state plans. While this was a boon to insurers, the system is straining from lack of physicians in the primary specialties.

According to the 2009 Massachusetts Medical Society Physician Work Force Study, specialties that were identified as experiencing either critical or severe shortages included Dermatology, Family Medicine, Internal Medicine, Neurology, OB/GYN, Urology, and Vascular Surgery. Family and Internal Medicine has been on this list for at least four years, Urology and Vascular Surgery for at least the last three.

And it is not going to get any better either in Massachusetts or the US. According to a posting Monday in the Huffington Post authored by Dr. Dennis Gottfried, the problem is not the number of doctors being trained, but what specialties they are being trained in. “ The present concentration of physicians in the U.S., 29 doctors per 10,000 people, compares favorably with most countries and is considerably higher than many countries, like Japan, Canada, New Zealand, and the United Kingdom, that are generally regarded as having better health care systems than the U.S. Other countries with worse health care systems, like Bulgaria, Azerbaijan, and Kazakhstan, have even higher physician concentrations than the U.S. So the concentration of physicians in the overall population bears only a weak correlation with the quality of medical care. Attempting to increase our physician concentration avoids addressing the real problem: an overspecialized physician population.”

Congress, in the healthcare reform bills, legislated some incentives to address this problem. Starting in 2011, primary care practitioners, as well as general surgeons, will get a 10 percent Medicare bonus for five years. The bills also remove the budget-neutrality adjustment that would have offset some of dollars gained by the primary care and general surgery bonuses. There are multiple grants and other inducements to open up more slots for primary care residencies. But the real answer lies not with the amount of slots for primary care, but instead with the amount of specialty care residencies. Dr. Gottfried’s observation, “ Specialty residency programs, all of which are supported by the government, must be limited so that only the optimal number of specialists are trained to meet America’s needs. With fewer specialists, more doctors would be available to go into primary care. In that way, both the specialists glut and the primary care shortages could be corrected”.

Shifting the balance might be the answer, or part of the answer, but it will take several years to impact the system. In the meantime look for the primary care bottlenecks to get worse.

For more information:

2009 Massachusetts Medical Society Physician Work Force Study

Blog Post – Too Many Doctors, But Too Few Primary Ones