A perfect scenario ... perfectly bad!

A friend phoned me today with a question about medical homes and coordinated care. After hearing his scenario, I responded, "Perfect!" Unfortunately, it was a perfectly bad scenario that describes exactly how unprepared optometrists will start losing access to their own patients. I'm sorry to say it, here's the bad news ... then some good news.

An optometrist sees a patient for a regular eye health exam, does the usual diagnostic testing, and then some, and determines the patient needs to see an ophthalmologist. The patient visits the ophthalmologist who happens to be involved in a care team through an ACO or medical home. Although the patient had chosen the optometrist for the initial visit, the ongoing care is now turned over to the care coordinator whose job it is to coordinate all the care of the patient. The care coordinator schedules a follow-up visit with the care team's optometrist instead of going back to the referring optometrist.

Yes, we can hear the outcry. Unfair. Wrong. Bad business. And no doubt there's some merit to those cries. It'll happen nevertheless. The reason may constitute an unfair betrayal but it may also be legitimate. 

This scenario sits in the middle ground between legislation and reality. The legislation says patients may choose their Medicare provider but the reality is they'll often just go along with the recommendation of their doctor's office. Remember that medical homes and care coordinators are incentivized, so some will be rather convincing about the reasons to see team doctors. Also remember that there may be legitimate new reasons to have patients switch specialty providers.

What if the referring optometrist does not use EHRs? Or, the O.D. has EHRs but doesn't use them for communications. The optometrist may know nothing about care teams or medical homes, so hasn't attempted to connect with the local provider network. All of these are reasons a provider cannot be included - doesn't qualify - when it comes to team delivery of care or bundled payments.

On the other hand, let's say that optometrist is you, and you have implemented not only a certified EHR but also DIRECT communications capabilities. Admittedly, in this case you'd have been proactive enough not to end up here in the first place. But supposing you did somehow, you'd now be in a position to step in and prove value to that care team, perhaps even add more value than the incumbent optometrist. 

Do you have questions or scenarios for which you'd like to see an explanation? Submit them through the Comments and Reactions area below this post, or email us. We'll be happy to respond.

Alistair Jackson, M.Ed.

ACOs, Unlikely Homes for Medical Homes - Part 3 of 3

Continued … see part 1 of this discussion, published Monday, August 20

OK, so you’re a skeptic and the numbers from last day look just too good to be true. Let’s take a more conservative view. While the above scenarios are supported by actual clinical tests and situations, let’s suppose they are best-case scenarios and therefore extreme. If the savings were only 15% of the above, the medical home provider could still see over $100,000. Let’s say then that the medical home decides to keep 50% of the shared savings and divide the other 50% among the other team members. This means adding only $50,000 to the income of the primary care physician. Current average PCP income = $135,000. Add $75,000 net for care coordination. Add $50,000 from shared savings. $260,000.  We now have a program that, even when viewed from the most conservative vantage point, is structured to bring the income of the primary care physician from $135,000 to $260,000. In essence, the program is designed to double the income of primary care physicians who decide to participate in medical home style delivery and reimbursement systems.  

We can start to understand now why payers are willing to work together to fund the coordination of care through pilot programs like the Comprehensive Primary Care Initiative (CPCI). We can also see why 200 primary care physicians attended the first organizational meeting of the CPCI in one small city in Ohio.  And we can also understand why ACOs would not embrace this process or why, in fact, they would put as many barriers as possible in place to prevent such a system from being implemented. As we have stated already, the regulations by which ACOs can be established are so complex that almost all ACOs are large health systems. These health systems primarily generate their income from specialty care while the savings are being generated through primary care, coordinated care and the medical home.  

It is clear to see that the maximum cost savings, and the biggest boost to improving quality of care is going to work when the medical home is a separate business entity from the health system.  Predictably, we would not expect to see ACOs embrace the medical home.  On the other hand, we would expect to see – and are seeing, in fact – huge popularity of the CPCI among independent primary care physicians. ACOs are resisting expansion of the medical home even publishing negative studies to resist the concept from being established as part of the new delivery system.  

Jim Grue, O.D.

Alistair Jackson, M.Ed.

ACOs, Unlikely Homes for Medical Homes - Part 2 of 3

Continued … see part 1 of this discussion, published Monday, August 20

When a new medical home is formed, a rather complex set of formulae is used to predict the cost of care in the traditional delivery system. Going forward, the actual cost of coordinated care is tracked, so eventually it is known whether the coordinated care or the traditional care was more expensive. The hypothesis is that coordinated care is able to deliver better quality at a lower cost, so let’s assume that the coordinated care, in fact, ends up less expensive. At least in these early years, the formula for shared savings dictates that the medical home gets paid 85% of the savings.  Yes, almost the complete amount saved through the medical home’s coordinated care approach is given back to the medical home.  This will no doubt change over time; a big return is intentionally structured as a major incentive in order to convert quickly to the new model, a similar approach to the EHRs incentive program – money speeds adoption.  

Now let’s look at the savings possible. Almost all providers, new to the medical home concept, are concerned that the primary care physician will act as a gatekeeper, preventing them from seeing the patient or doing the required tests. In reality, nothing could be further from the truth, which we’ll see below. Cost savings are not generated by reducing or eliminating necessary care. In fact, the maximum savings are generated when the coordinator ensures that the patient receives the very best care. It is difficult to think of an example where poor care is less expensive than the best care. If a patient isn’t properly diagnosed and treated then invariably there are more visits to eventually get it right. If the best surgery is not performed, the result is simply more after-care at higher expense.  So the first mandate of a care coordinator is to make sure all care received by every patient is the best available. This alone will generate savings.  

The next step is to eliminate duplication of care that doesn’t result in better outcomes. A familiar scenario will serve us well here:  in eye care, if an optometrist does specialty tests then has to refer the patient to an ophthalmologist, in almost all cases, the ophthalmologist repeats every specialized test.  In the case of ODs and retinal specialists co-following patients, both typically see the patient on an ongoing basis and both continue to perform the same specialty tests. This happens right now because the two specialists get to decide what tests they want, not to mention that it’s in the economic interests of both to perform the tests. If we were in a position to coordinate the care of this patient, we’d know exactly how to increase those shared savings! We’d make sure the appropriate tests were being done but by one provider only and we’d have the results shared by all providers seeing the patient. The only time a test would need to be repeated would be if there was a question of its accuracy, which then gives the coordinator the incentive to ensure that the office that performs the tests is the one that proves over time its ability to get the most consistent, accurate results. 

Scenarios like this one are replicated in different ways throughout medicine every day. So, the care coordinator has two simple tasks that create huge savings: ensure every patient receives the best available care at every visit; identify and reduce or eliminate redundant costs which do not improve the quality of care.

Studies have shown that these two things alone have the potential to reduce the total cost of care by as much as 30%. Those are big dollar amounts. When we consider that the cost of health care in the United States is approximately $7,000 per person per year, we start to see the potential shared savings. Using this figure, a medical home coordinating the care of 500 patients is coordinating $3.5 million dollars of care per year. If 30% can indeed be saved, the potential savings is over $1 million. The 85% rule tells us that the medical home could receive over $850,000 from shared savings. These are staggering numbers for PCPs whose average annual earnings are currently $135,000.  Do we dare think PCPs are not all over this opportunity? If in doubt, check out the website of the American Academy of Family Physicians and see what they’re doing about the PCMH initiative.

To be continued …

Jim Grue, O.D.

Alistair Jackson, M.Ed.

ACOs, Unlikely Homes for Medical Homes - Part 1 of 3

In the early days of Accountable Care Organizations, it seemed they would be the natural resting place for the patient-centered medical home (PCMH). That thinking has changed. While it appears ACOs may use some medical home concepts, there is growing doubt about the compatibility of the two entities. Let’s understand why. 

Why would ACOs would be resistant to medical homes?  First, the medical home concept promotes coordinated care and shared savings, core values in health care reform. Second and fundamentally, health care reform means a change in the financial positioning of primary care versus specialty care. In the current fee-for-service system, some would contest, primary care is underpaid while specialty care is overpaid. The balance is shifted by the core tenets of health care reform so that primary care becomes better paid, basically at the expense of specialty care. And hospitals and health systems, where ACOs typically reside, are predominantly specialist-oriented.

For the sake of simplicity in the following discussion, we’ll be viewing primary care and specialty care in separate business contexts even though we know that within hospitals, health systems and ACOs the two exist under one roof.

To begin, let’s use precise figures from the Ohio Comprehensive Primary Care Initiative (CPCI); it is modeled as a medical home and we know the numbers. Reimbursement for primary care physicians through the medical home model involves two key changes: the first is that the medical home gets paid a separate fee for coordinating the care of patients; secondly, the medical home gets to share in the savings created as a result of care coordination.  

What is the effect on PCP income of getting paid for coordinating the care of patients? Let’s assume that the office of a primary care physician can coordinate the care of 500 patients. This requires the medical home to hire an additional staff person at a cost of $50,000.  The CPCI in Ohio is paying $22.50 per head per month for care coordination. This generates $11,500 per month, or $138,000 per year, in additional revenue to the medical home. After the cost of the additional staff person, the new revenue leaves $88,000 for organizational profit.  Supposing that the medical home provider has some miscellaneous expenses, we’ll allocate $75,000 toward profit. The average income for a primary care physician in the USA today is $135,000.  Therefore, by becoming a medical home, a primary care physician practice increases its income to about $210,000.  So we can see how becoming a medical home, versus remaining simply an independent PCP practice, can significantly increase the income of the primary care physician. Yet, we haven’t begun to consider the real income-increasing potential of a medical home: shared savings accounts. This is where it gets interesting.

To be continued …

Jim Grue, O.D.

Alistair Jackson, M.Ed.

Getting personal about Health Care Reform

On August 13, Medscape News Today published a rather worthwhile read: Healthcare Reform: It is Getting Personal by Steven D Shapiro of UPMC. Here's the outline:

• Abstract and Introduction
• Patient-centered Accountable Care
• Evidence-based Care Pathways & Clinical Effectiveness Research
• Molecular Networks
• Targeted Therapy for Cancer & the Cost–benefit Equation
• Scientific Approach to Personalized Medicine
• The Electronic Health Record & Analytics
• Conclusion
• Future Perspective

Don't let the number of topics fool you; it's not an overly lengthy article. Outside of molecular networks and cancer therapies, Shapiro covers many of the same themes we articulate here on EMRlogic Live, most of which come down to understanding the essentially predictable tides of change in healthcare, forsaking expensive and ineffective fee-for-service models and moving to a new era of patient-centered care that leverages the power available through health information technology.

In his Future Perspective, Shapiro wraps up with: 

"Sharing of data is another hurdle. This includes both patients' willingness to share their personal genetic information, as well as physician and scientist willingness to work together. .."

Let me add to that the willingness of health systems to share data. Shapiro advocates that "Medical centers should strive for a central data warehouse" ... providing "a 'single source of truth'. In a perfect world, data repositories could be powerful tools. To the degree however that the warehouse is controlled (knowledge is power) or information kept for economic gain, we shoot ourselves in the foot.

Since it's getting personal, let's not do that.

Alistair Jackson, M.Ed.

You asked about ACOs - Part 2, Team Delivery of Care

... continued from last day. For a brief discussion of ACOs and Communications, see Monday, August 13.

Team Delivery of Care

We clearly see a corollary in the development of team-based care delivery: the purists would like to see a system where all providers could form into teams to deliver care in the most efficient and cost-effective ways and in which all providers could participate in shared savings accounts. Large health systems want to maintain their dominance and even extend their control over the delivery system. What we are seeing arise is a number of programs that represent the gamut between these two extremes.  

On the one extreme are ACOs which revolve around a myriad of regulations to the point that it is difficult even to understand exactly what ACOs can and cannot do. The bottom line is that this complex set of regulations restricts ACOs to relatively large health systems in order to fulfill all the requirements. This, of course, favors health system domination and, in fact, was pushed as a complex system by the large health systems.

On the other end of the spectrum is the new Comprehensive Primary Care Initiative, which was effected largely by the designers of health care reform and pushed by the Office of the National Coordinator. These stakeholders want to see competition in the health care marketplace and access by providers at all levels.  

From an eye care perspective, we believe it is important for every eye care provider to have a general understanding of ACOs and health information exchanges, knowing that both are too complex and too diverse to be fully understood in terms of what they can and cannot do. Every eye care provider, on the other hand, should have an intimate knowledge of how DIRECT works and the significance of the Comprehensive Primary Care Initiative, as these are the two programs that most parallel the original goals of the health care reform movement. They also show how providers may work together, through coordinated care, to provide the highest level of care within a structure that openly communicates patient health information between providers. Seeing the significance of shared savings when controlled by primary care is a key to understanding the importance of team care delivery and reimbursement.  

Once again, we believe the way that independent eye care providers are going to be most successful is to understand ACOs and exchanges generally but DIRECT and the Comprehensive Primary Care Initiative specifically. The latter pair illustrate well how the emerging system is supposed to function. Then, being involved in the local community as the care delivery structures are being formed is the most important step.  To that end, the National Eye Care Communications Project, while sponsored by EMRlogic, is offered as a vendor-neutral gathering where providers can share their learnings, their experiences and assist all participants in understanding the cultural changes necessary for business success in health care reform.

Jim Grue, O.D.
Alistair Jackson, M.Ed.

More on ACOs is available in Archives. See Categories: Accountable Care Organizations.

You asked about ACOs - Part 1, Communications

One of the participating doctors in our National Eye Care Communications Project asked for more insight into ACOs, as what some have called "the real rising power" in health care reform.  

In our attempts to understand national-scale bills or movements, such as health care reform, we must acknowledge a conceptual level where the creators and influencers would like to see things go, and also a practical level involving the passing of regulations, legislation and policy.  These two levels rarely align.  And this was never more true than in the case of health care reform.  Let’s consider two parallel situations – communications and team delivery of care – in which we see clearly this difference between how a system is ideally designed and what was necessary to put it in place on a practical basis.

Communications

In the area of communications, we see two distinct programs emerging: the first is the health information exchanges being established in almost all states; the second is the national DIRECT communications network.

From a conceptual standpoint, the purists in health care reform would like to see a system in which every provider has equal and secure access to patient health information. From a practical standpoint, health systems see an advantage in being the central hub with information easily flowing in and where they have control over what flows out. The result is the first category of exchanges, repository-type HIEs, being developed by large health systems that tend to dominate the process in their states. The health systems share patient health information through the exchange, and independent providers send information into the exchange. Independent providers however, for the most part, only have access to view patient information through portals rather than easily receive information from the exchange.

In addition to the health information exchanges, we also see the emergence of the DIRECT system, which is being resisted in many states by the large health systems. DIRECT however is being pushed by the National Coordinator of Health Information Technology and also by some state HIE adminstrators as a way of granting to all providers equal access to patient health information. This is the system that gives independent eye care providers equal access to patient health information.

To be continued ... join us next day for part 2, Team Delivery of Care.

Jim Grue, O.D.
Alistair Jackson, M.Ed.

More on ACOs is available in Archives. See Categories: Accountable Care Organizations.

Taking the long view ... again.

HITECHAnswers has published another worthwhile read for those of us who like to think big picture. It's First Glimpse at Stage 3 Meaningful Use Measures by Mary Mosquera, Senior Editor, Government Health IT. 


I'm intentionally keeping my comments short today in the hope you'll click the link and read what Ms. Mosquera has to say. If you've been following the long-term trends, you already knew that clinical decision support would be the crown jewel of Stage 3 certification. No surprise, the Health IT Policy Committee confirmed that direction at its August 1 meeting.


To date however, most talk of CDS centers around drugs: drug-drug interactions; drug allergy alerts, and so on. And, in this area, an authoritative resource is sought, versus every vendor coming up with its own rules. Great concept! That might leave vendors a place still to set themselves apart - for example, helping with the everyday decisions made by providers that are not medication related yet lead to better patient outcomes.


In the meantime, read Mary Mosquera and maybe a related post or two. Enjoy!


Alistair Jackson, M.Ed.

A scary pilot program!

If only we could say all news of health care reform was good news! Modern Healthcare recently announced a rather scary kind of pilot program: a RAC demo program. RAC, what's that? Recovery Audit Contractors. 


The infamous RACs have been around for years already. Typically, they've gone into practices to do Medicare audits, primarily checking to see that patient records substantiate past Medicare claims. In many cases, records were found not to substantiate the claims, and significant penalties or "clawbacks" have resulted. This program was so successful in getting big dollars back into Medicare coffers that CMS could do nothing other than multiply its army of auditors. Now, CMS has taken it to a whole new level.

"After an eight-month delay, the CMS has set Aug. 27 as the date for the start of a demonstration program that will allow Medicare recovery audit contractors in 11 states to review the medical necessity of claims before the providers are ever paid. 

The demonstration program, called recovery audit prepayment review, will focus on certain types of claims that the CMS says are prone to high rates of improper payments. The reviews will focus on seven states with providers prone to errors and fraud (California, Florida, Illinois, Louisiana, Michigan, New York and Texas) and four with large volumes of short inpatient hospital stays (Missouri, North Carolina, Ohio and Pennsylvania)."

Read more here: CMS sets start date for RAC demo program | Modern Healthcare 

So what does this have to do with eye care? As is the case for all manner of change arising from health care reform, it has everything to do with eye care. It's only a matter of time before any aspect of the transformation of healthcare comes home to roost in your practice. 


A primary concern for eye care as a profession is that we're second only to radiology in the volume of imaging used for diagnostic purposes. Imaging is a primary target for RACs since they're notoriously poor at showing what the claim says they show, especially if the images are kept as paper records. 


A big lesson we see in just the brief quote above is that audits are now occurring statewide and across defined groups. How far a leap is it to move from provider groups "prone to errors and fraud" or that demonstrate "short inpatient hospital stays" to specialty provider groups? These examples prove that the analysis of broad-based provider data is alive and well at CMS. Do we think CMS has not yet identified or cannot easily spot professions or provider groups that claim every billable specialty test in order to maximize revenue? 


The bad news here is the catch-all nature of the new RAC process. Once a group is identified, it matters no longer that you're the exception. By virtue of association, you've effectively failed the audit before it starts ... akin to guilty until proven innocent. Even if the verdict is favourable, going through the process is ugly.


Our message here is more for the eye care profession and significant provider groups within it than to individual providers: it's time to pay heed to the pilot program developments in healthcare. Too often we still hear, "that's down the road" or "we'll do that once it's important. Sometimes those are foolish words from sleeping giants.


Alistair Jackson, M.Ed.

Patients with Direct addresses?

Last week, I joined in on a LinkedIN discussion about patients having Direct addresses. (You can find it here.) Should they, shouldn't they? Despite the pro and con comments, the fact is that some patients do already have Direct addresses. Here's one person's comment:

As someone who's occasionally a patient myself, I've already created my own personal Direct address (for free) via my Microsoft HealthVault account (also free). And, while I'm eagerly awaiting the day when my own PCP's patient portal (Epic-based) gets upgraded to allow for more efficient and effective 2-way messaging between me and my doctor, I'm especially looking forward to eventually being able to expect him and the other providers I see to routinely send my health information -- using CCD/CCR and other relevant PHI attachments -- to my @direct.healthvault.com address, so that I'll be able to maintain ownership and control of ALL of my own health information in one place without having to be tied to a single ambulatory practice's EMR system. Until MU Stage 2 becomes a reality, though, my HealthVault PHR is mainly just a nice place for me to be able to find all of my recent pharmacy records and lab results in a structured way (thanks to the HealthVault apps that CVS, Quest Diagnostics, and LabCorp have made available), and some self-reported PHI as well, and share this information with the various specialists I see.

The writer is obviously not your average patient. He's too well informed not to be involved directly in healthcare. But he's a patient nonetheless. Those "some patients" to whom I referred above will soon become "many patients" and eventually "most patients".


How about you? If you're following this blog, you're also not your average patient ... but a patient nonetheless. Do you have a personal @direct address? How about a personal HealthVault account? Both are free. Why not jump in on that game? I suspect it'll help you be ready to understand what's going on when "Joan" asks you to send her health information to averagepatient@direct.healthvault.com. 


Alistair Jackson, M.Ed.

PCPs, your new best friends!

No matter how large or small your professional network, it's time to improve communications with the Primary Care Physicians in your community. Why? For years, healthcare in the USA has been specialty-centric. That is, in the M.D. world, specialties have made a lot more money than primary care. Healthcare Reform is changing that balance of power ... and payment.

Perhaps you've already read our comments about the Comprehensive Primary Care Initiative, even noticed or attended meetings in your state or city. The bottom line is that PCPs are being heavily incented to take on care coordination and to develop their practices as medical homes or medical communities. Given that care coordinators will take over the total care of the patient, we need to understand that PCPs are being placed at the power core of reformed healthcare. Not only will they coordinate every aspect of patient care, they will assemble the care team. Primary Care Physicians will play a key role in choosing the specialty providers who are able and available locally to most efficiently get the job done. Those team doctors (specialists) will need to be both available and valuable. So, when it comes to the eye care needs of the patient, will the PCP's eye care provider of choice be you?

We'd like to suggest that, more often than not, the Eye Care Practioner (ECP) of choice will be someone within the PCP's network, such as employee of the local hospital where the primary care physician already has admitting privileges and working relationships. Why? Expediency. 

If that seems discouraging, it's probably time to think hard about being an independent eye care provider. No, this is not simply the same old same old. It's not the way it's always been. In years gone by when patients chose you based on your local reputation, there was no highly incented and highly paid care coordinator in the local doctor's office taking over the scheduling of their eye care visits. 

The new realities of health care reform call for a proactive stance. YOU must step up and be counted. As we've seen in the last six posts, you have to be in the EHR game, you have to be ready for communications, you have to offer your value-add services to the local PCPs with whom you want to work. 

We'll alert you, prod you, raise the red flag, advise and help you. In the end, you have to get busy at the grass-roots level and make things happen.

Alistair Jackson, M.Ed.

Jim Grue, O.D.

Beyond EHRs - Phase 5

Today's post focuses on the last of a 5-phase continuum. If you're joining the discussion today for the first time, please refer back to our July 20th post for the big-picture overview.

At last, the end game: phase 5, Get paid through a bundled payment system. From the early days of health care reform we knew that fee-for-service reimbursement would yield to pay-for-performance. At that time, the bundled payment angle was not evident. We suspect that it's still not generally understood. Let us say it clearly and unmistakably: the way you are being paid now for your services is being phased out. 

The change will not be abrupt or sweeping but slowly you will stop billing payers directly. Instead, you will be reimbursed by the Medical Home groups (teams) with which you work. Why? Because the groups who are paid to coordinate all care for their patients will also receive bundled payments for those services and will be required to distribute funds to the participating providers based on their contribution to the care of the patient.

Surprised? Shocked perhaps? This payment model raises concerns and questions, to be sure. However, a greater question than any about being inside that reimbursement model is the question about being outside it. It is this very issue that brought us to state years ago already that "health care reform is not about stimulus money; it is about the survival of your business." What happens to your business when access to your patients is controlled by a patient-centered medical home and you don't qualify to participate therein?

At phase 5, it's important to trace all the way back to phase 1. Despite its possible flaws, questions and concerns, if you want to be on the inside of the new payment model, you must have passed successfully through phases 1 to 4. You need EHRs so you may communicate (electronically exchange protected health information with other providers) ... so you may participate in team-based care delivery ... and be accepted onto coordinated care teams ... and be one of the providers who participates in the distribution of bundled payments and shared savings.

Without question, these are alarming statements. Be assured though, no crystal ball was required to see it coming. The evidence and pilot projects that reveal the inner workings of the new delivery system are all around us.  We need only know what to look for and how to engage. Again, that's the raison d'être of the National Eye Care Communications Project. We're still in the early days of bundled payment models. There's time ... but no time to waste.

Alistair Jackson, M.Ed.

Jim Grue, O.D.