Walters’ (1) article on the best method of managing the effects of projects to implement clinical improvement systems is a discussion on valuable considerations involving these types of projects. It is a discussion on the success factors that financial managers must consider (1). What it does lack is a look into the success factors that are important to the success of the project at whole (2).
Many of the paper’s points follow the PMI concepts of scope definition, scope management, and scope verification (2). For example, the discussion on system selection covers the scope of the project, making sure the scope is matched by the system’s characteristics (1). Obviously, scope management is important in such projects.
Conversely, other success factors are risk management techniques. Risk management is the method of identifying risk, creating an effective plan to handle the risks, and monitor those risks to determine whether the plan needs to be enacted (2). Good testing plans and data flow charts are risk mitigation efforts that reduce the change of implementation or endemic flaws with a system (1; 2).
Obviously, a good, if not mature, project management methodology integrated within the project and organization are needed for success of such implementation projects (2). Successful implementation also requires management’s acceptance of a philosophy based around that project management methodology (2). By managing the scope and risk in consideration of reimbursement, financial managers can help manage the impact and increase the financial benefit of clinical improvement projects (1).
References
1. Walters, R. (2002). Clinical transformation and the revenue cycle. Healthcare Financial Management, 56(11).
2. A guide to the project management body of knowledge (4th ed.). (2008). Newtown Square, PA: The Project Management Institute.
Thursday, July 30, 2009
Sunday, July 26, 2009
Systems Thinking and Healthcare
Systems theory, now known as systems thinking, is a holistic approach of organizational analysis, examining the inputs, outputs, and processes of the organization [1]. Systems thinking has many prevalent theories and concepts based on those theories [1]. Within healthcare, the Donabedian model of health care systems quality analysis is based on soft systems thinking, a branch of systems thinking based on subjective analysis [2; 1]
The issue with the implementation of systems thinking within health care is that it is behind the current industrial thought [3]. For example Donabedian’s SPO model was published in 1980, based on theory from the 70s and 60s [3; 2]. Many of the base theories have been refined over the interceding 28 years, which leads to the belief that major revisions can happen via implementation of current theory [3].
Systems thinking is not without its drawbacks. The complexity of systems thinking is the highest drawback [1]. Much of hard systems thinking is based on mathematics and quantification, making it difficult to implement without significant training [1]. Conversely, soft systems thinking is subjective and based on qualitative analysis, requiring another set of skills [1]. Evolutionary systems thinking tries to tie these two branches together, which does an effective job, but makes for a discipline requiring significant and disparate skills [1]. However, they can give us a significant view into how health care organizations operate with just an investment of time and talent.
2. Shi, L. & Singh, A. S. (2008). Delivering health care in America: A systems approach (4th ed.). Sudbury, MA: Jones and Bartlett Publishers
3. Komashie, A., Mousavi, A., & Gore, J. (2007). A review of historical developments of quality assessment in industry and healthcare. Proceedings of the 10th QMOD conferences, 2007, Sweden. Retrieved May 27, 2009, from http://hdl.handle.net/2438/1074
The issue with the implementation of systems thinking within health care is that it is behind the current industrial thought [3]. For example Donabedian’s SPO model was published in 1980, based on theory from the 70s and 60s [3; 2]. Many of the base theories have been refined over the interceding 28 years, which leads to the belief that major revisions can happen via implementation of current theory [3].
Systems thinking is not without its drawbacks. The complexity of systems thinking is the highest drawback [1]. Much of hard systems thinking is based on mathematics and quantification, making it difficult to implement without significant training [1]. Conversely, soft systems thinking is subjective and based on qualitative analysis, requiring another set of skills [1]. Evolutionary systems thinking tries to tie these two branches together, which does an effective job, but makes for a discipline requiring significant and disparate skills [1]. However, they can give us a significant view into how health care organizations operate with just an investment of time and talent.
References
1. Jackson, M. C. (2003). Systems thinking: Creative holism for managers. West Sussex, England: John Wiley & Sons, Ltd.2. Shi, L. & Singh, A. S. (2008). Delivering health care in America: A systems approach (4th ed.). Sudbury, MA: Jones and Bartlett Publishers
3. Komashie, A., Mousavi, A., & Gore, J. (2007). A review of historical developments of quality assessment in industry and healthcare. Proceedings of the 10th QMOD conferences, 2007, Sweden. Retrieved May 27, 2009, from http://hdl.handle.net/2438/1074
Thursday, July 16, 2009
Current State of the US Reimbursement System
Medicare, Medicaid, and SCHIP are social programs that finance health care for a certain slice of population of the United States [1]. The goal of the Federal government, through these programs, is to provide health services to the populations who might not be able to get coverage any other way [1]. As things do, the Government has changed these programs incrementally through the decades, with the intent of improving access and quality while lowering cost [1]. This work’s purpose is to review some of the important changes over the last forty years and to determine the impact of the programs and the secondary consequences and externalities.
The mainly used methodology in this work is a document review of relevant research, texts, and legislation. Documentary research is a good method for this type of research, specifically because it is easy to access the data, the data is permanent, and this type of research is inexpensive [2]. However, this method of research is dependent on researcher bias and secondary data [2]. Research bias and secondary data can cause issues with results, but as long as researchers recognize this issue, then the bias and secondary data use problems can be resolved [2]. This type of research is different from hermeneutics, which is an exhaustive analysis to reveal deeper meaning of a textual source that can have significant bias issues [3]. Where possible, the approach was to use multiple document sources to cross-verify the information, thus reducing the bias problems.
Overview of CMS Programs
Medicare
Title XVIII of the Social Security Act, known as the Medicare Act, was enacted in 1965 by the U.S. Congress [1; 4]. The Congress formed the Health Care Financing Administration, now known as the Centers for Medicare and Medicaid Services (CMS), an entity of the Department of Health and Human Services (HHS), to administer the program [1]. The concept of the plan was to provide medical services for a select group of citizens of the United States: (a) the elderly , (b) persons with a permanent disability, or (c) persons with ESRD . Initially Medicare came in two parts, (a) Part A and (b) Part B [1]. Part A focused on inpatient care in a hospital setting while Part B focused on services provided by physician, on an outpatient basis, and other types [1]. Part A does not usually involve premiums, due to the Medicare Tax paid during the years of employment paid by beneficiaries [5]. Conversely, Part B usually has a monthly premium paid by its beneficiaries [5].
1997 saw the Balanced Budget Act (BBA) of that year passed by Congress; which, among other things, created Part C of Medicare, also known as Medicare Advantage [1; 6]. Part C is the provision that allows for the use of managed care providers and other health management organizations to handle Medicare recipients [1; 6]. This has given CMS some additional cost management options and plan providers can provide addition services they could not get within the normal Medicare program [6].
Congress put the last major section of Medicare, Part D, into legislation in 2003 and put into force in 2006, which implemented pharmaceutical coverage [4]. Part D involves a tiered method of coverage, where, after the first two hundred fifty dollars, the plan covers seventy five percent of all drugs up to twenty five hundred [4]. Part D does not cover twenty five hundred to five thousand, but covers any amount in expenses above the first five thousand for ninety five percent [4]. This new program does not have much in the way of research into how well it is being received or the impact [6].
Medicaid
Medicaid, also known as Title XIX, is a program design to provide health coverage to those who can afford it through a means-tested system administered as a joint venture of the States and Federal Governments [1]. Due to State Rights issues, there is no requirement for a state government to create a Medicaid program, but if accepting Federal funds, which reimbursement percentage varies from state to state, a state must follow the guidelines of Medicaid and submit plan details to HHS approval [1; 6]. The HHS enforces this through the HHS’s ability to use funding as an incentive, diminishing or eliminating funding [1]. To add to the State’s flexibility, the Federal Government can give waivers over parts of the Medicaid requirements [1]. An interesting fact is a direct correlation between how well the US Economy is doing and the number of Medicaid enrollment [6].
SCHIP
SCHIP, States Children’s Health Insurance Program or Title XXI, is the third program of CMS [1]. The Balanced Budget Act of 1997 added this program to provide coverage for children, which are in families who are above the guidelines set for Medicaid [1]. The purpose was to help the kids who happen to make up twenty five percent of the uninsured within the population [6]. Like Medicaid, the States have the option of not participating in the program [1].
Move to PPS
The Prospective Payment System (PPS) was the first major change to the CMS’s programs to reduce costs of Medicare [1]. Originally, CMS reimbursed providers based off the costs of each patient retrospectively; that is, after the patient has had the procedure performed on them [1]. This incentivizes each hospital to maximize their charges, creating inefficiencies in the reimbursement system [7]. To prevent this type of inefficiency, CMS created the PPS, which uses a payment schedule to determine reimbursement [1]. PPS determines this payment schedule via “the mean or median cost for a procedure from the cost reports at the discretion of the Secretary of HHS” [8]. An example to as how this works is shown by the reimbursement of Medicines published in the Federal Register in 2007, where five percent over the manufacturer’s average sales price became the standard, in comparison to the previously used six percent [9]. Furthermore, CMS uses a regional reimbursement factor, based off the salary section of annual cost reports submitted by hospitals to CMS, to adjust reimbursement by region [10].
PPS has been a controversial change. In the BBA of 1997, implementation of PPS for skilled nursing care reduced reimbursement below the sustainability point, causing a large number of bankruptcies of nursing homes [1]. This issue caused Congress to pass legislation in 1999 to increase reimbursement, salvaging the remaining nursing homes [4]. This resolved the issue within the short term, but may be an indication of the ineffectiveness of the bureaucracy to manage reimbursement in a crisis.
Current Cost Initiatives
Status of Medicare and Medicaid
In 2005, forty two million recipients were on the roles, up from twenty million in 1970 [11]. The fastest growing portion of the U.S. Population is the sixty-five plus segment, which generates concern, since the projections are that there will be seventy seven million recipients 2030 [11]. This fact of an increasing number of recipients is compounded due to the projection that the trust fund for Medicare will be exhausted within nine years of 2009 [12]. The only resolutions to this issue would be to (a) cut reimbursement, (b) reduce the number of recipients, (c) reduce services, (d) obtain funding from different sources, or (e) a combination of those options [12]. Currently, there is no published research on the impact of Title IX the American Recovery and Reinvestment Act of 2009 on Medicare, but funding of effectiveness studies should be able to determine the impact [13]. There was already great concern in the analysis of President Obama’s outlined Health Care Reform mentioned during President Obama’s 2008 campaign [14].
Pay for performance
Pay for Performance (P4P) is an initiative of CMS to tie reimbursement rates to evidence-based quality measures [15]. The concept is that health care will be improved with a financial incentive for higher quality [15]. There is some concern for the effectiveness and existence of secondary consequences [16; 17]. Through the demonstration projects, only moderate gains in quality were realized and hospitals with already high quality scores were the only real beneficiaries of the increase reimbursement [16]. Peterson et al. expressed concerns about the unknown benefit and effectiveness of these P4P systems, which is concerning due to the conceptual appeal of such programs [6].
RAC
The Recovery Audit Contractor (RAC) is a new method of resolution to the overpayment issue with Medicare and Medicaid [18]. CMS’s concept is that a RAC will question certain high dollar procedures involving payment from Medicare and the provider has a certain time to provide supporting documents of the procedure to validate correct reimbursement, correcting over and under payments [19]. The demonstration project of this program netted over one billion in reimbursement payment irregularities to provider [19]. Only three percent of payment issues were underpayments [19]. This might have something to do with the reimbursement methodology of the RACs. CMS only pays the RACs on overpayments to providers [20].
Other cost initiatives
One of the largest cost management initiatives is the Medicaid program. The waiver program allows CMS to encourage states to take innovative approaches in their Medicaid program [1; 21]. Section 1115, part of the waiver program, allows CMS to encourage innovations to Medicaid through their Research and Demonstration program, which then can be incorporated into Medicare and SCHIP [22]. While not a cost initiative per se, the Research and Demonstration program of the waiver provision of Medicaid and other programs of CMS are the test bed and creation point of many of innovations in cost management.
Another initiative is the nonpayment of never-events, described as “events that never should happen in any clinical care setting”, by the CMS [23; 24]. Congress allowed the HHS Secretary, via Section 5001c of the Deficit Reduction Act of 2005, not to pay Hospital Acquired Conditions (HACs), which IPPS FY 2008 and IPPS FY 2009 specify seventeen conditions [24]. This encourages hospitals to improve quality due to non-reimbursements for mistakes.
The first implication of Medicare and Medicaid are economic. The medical care demand curve is adjusted positively by the inclusion of health insurance [7]. Further, evidence exists that insurance also inflates the cost curve for medical services [25]. As insurance covers more expenses, the impact on the consumer becomes less, which encourages higher consumption. This causes the inflation of costs due to basic economics. The increase in cost and consumption due to the shielding of the consumer is the cause of the classic “Moral Hazard” problem of economics, where the choices of a party in a decision are reckless due to another party shielding the first party from the consequences [26]. Lee believes that the dramatic rise in health care cost is directly related to this moral hazard problem.
The second implication of Medicare and Medicaid is the impact on quality of health care, specifically through PPS [7]. Phelps states that private providers into their business practices have incorporated PPS. This is actually a good business decision, since the provider does not need to create a reimbursement system based on a prospective concept; they just need to base it off the already developed PPS of CMS. This increases the impact of CMS decision to pay any provider via PPS through cooption by the private industry. The impact of this considers the change in incentivization of providers that encourages a reduction in quality, the “quicker but sicker” phenomenon of health care [7].
In response to the second implication, CMS has created several quality initiatives, specifically P4P and non-payment of HACs. This creates an incentive to improve quality by introducing either an incentive to try for a higher reimbursement rate by investing in quality or by the potential loss due to a HAC. However, there would be a cost in creating quality initiatives, additional diagnostic testing to detect pre-existing conditions which would cause nonpayment through HAC related conditions, and other changes. This could be a problem for smaller, rural hospitals and providers.
CMS and the U.S. Legislature have been trying to improve the quality and reduce the cost of CMS’s programs while trying to improve access. By using research and demonstration programs, CMS has been exploring unique methods of reducing cost and improving quality, using its power to fund programs by providing waivers to states as part of Medicaid. By assisting states, CMS reduces it risk of such programs by splitting costs with a state and able to see the affects in relatively small areas. However, these programs and initiatives have a history of unintended consequences. In fact, CMS and Congress have created several initiatives, such as P4P, to correct issues caused by other initiatives, such as PPS.
Potential research questions
Several research questions become apparent in the previous discussion. First, how does the impact of the new RACs have on the reimbursement process, considering the particular incentive scheme? Second, what is the impact of the RAC, HAC non-payment, or P4P programs on smaller, rural hospitals? Finally, with the increase in the rate of reimbursement reduction and incentive force, from HAC non-payments and P4P, driving investment into quality initiatives, is there a sustainability issue being created? These should be helpful answers in determining issues before noticed by public policy.
1. Harris, D. Contemporary issues in healthcare law and ethics (2nd ed.). Chicago. AUPHA/HAP. 2003.
2. Denscombe, M. The good research guide for small-scale social research projects (3rd ed.). Boston. McGraw Hill. 2007.
3. Nueman, W. Social research methods: qualitative and quantitative approaches (6th ed.). Boston. Allyn and Bacon. 2006.
4. Miller, R. Problems in health care law 9th ed. Sudbury, MA. Jones and Bartlett. 2006.
5. CMS. Overview Medicare program. Centers for Medicare and Medicaid Services. 2005. Available at: http://www.cms.hhs.gov/MedicareGenInfo/ Accessed 03 11, 2009.
6. Shi, L. & Singh, D. Delivering health care in America: a systems approach (4th ed.). Sudbury, MA. Jones and Bartlett. 2008.
7. Phelps, C. Health economics (3rd ed.). Addison Wesley. Boston. Addison Wesley. 2003.
8. Prospective payment system for hospital outpatient services 65 Fed. Reg. 18434. 2000.
9. Thompson, C. Medicare updates outpatient payment system. Am H Health Syst Pharm 2007:64. doi: 10.2146/news070103.
10. Dalton, K. & Slifkin, R. Pps inpatient payment and the area wage index. North Carolina Rural Health Research and Policy Center. Chapel Hill, NC. 2001.
11. Feldstein, P. Health policy issues: an economic perspective (4th ed.). HAP/AUPHA. Chicago. HAP/AUPHA. 2007.
12. DoBias, M. Outlook remains bleak. Modern Healthcare 2006:36(19):8-9.
13. U.S. Congress The American recovery and reinvestment act of 2009. Government Printing Office. 2009. Available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf Accessed 03 01, 2009.
14. Antos, J. Symptomatic relief, but no cure – the Obama health care reform. The New England Journal of Medicine 2008:359(16):1648.
15. CMS. Medicare pay for performance (p4p) initiatives. CMS Office of Public Affairs. 2005. Available at: http://www.cms.hhs.gov/apps/media/press/release.asp?counter=1343. Accessed 02 08, 2009.
16. Lindenauer, P., Remus, D., Roman, S., Rothburg, M, et al. Public reporting and pay for performance in hospital quality improvement. The New England Journal of Medicine 2007:356(5): 486-497.
17. Petersen, L., Woodard, L., Urech, T., Daw, C., & Sookanan, S. Does pay-for-performance improve the quality of health care? Annals of Internal Medicine 2006:145(4):265-272.
18. CMS. Cms announces new recovery audit contractors to help identify Medicare payments. CMS Office of Public Affairs. 2008. Available at: http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3292. Accessed 02 08, 2009.
19. Bibbins, B. Racs: What they are and why proactive compliance, through clinical documentation improvement programs, is so important. Journal of Health Care Compliance 2008:10(6):21-68.
20. CMS. How are the recovery audit contractors paid for finding and recovering overpayments. Centers for Medicare and Medicaid Services. Available at: http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=7728. Accessed 02 22, 2009.
21. CMS. Overview of Medicaid state waiver program demonstration projects – General information. Centers for Medicare and Medicaid Services. Available at http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/01_Overview.asp. Accessed 03 01, 2009.
22. CMS. Research & demonstration project. Centers for Medicare and Medicaid Services. Available at: http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/03_Research&DemonstrationProjects-Section1115.asp. Accessed 03 01, 2009.
23. National Quality Forum. Serious reporting events: Safety events that should never happen. Quality Healthcare, Now! Available at: http://qualityforum.org/pdf/qhn/6-1-06.pdf. Accessed 02 21, 2009.
24. CMS. Cms improves patient safety for Medicare and Medicaid by addressing never events. Centers for Medicare and Medicaid Services. Available at: http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3224. Accessed 02 21, 2009.
25. Lee, R. (1989, Fall). Insurance and medical list prices. Journal of Human Resources 1989:24(4):689-708.
26. Moral hazard. In the New Penguin Business Dictionary. London: Penguin. Available at: http://www.credoreference.com.library.capella.edu/entry/6892796/. Accessed 03 01, 2009.
i. 65 or older and receiving Social Security or paying premiums [1; 4]
ii. End Stage Renal Disease
The mainly used methodology in this work is a document review of relevant research, texts, and legislation. Documentary research is a good method for this type of research, specifically because it is easy to access the data, the data is permanent, and this type of research is inexpensive [2]. However, this method of research is dependent on researcher bias and secondary data [2]. Research bias and secondary data can cause issues with results, but as long as researchers recognize this issue, then the bias and secondary data use problems can be resolved [2]. This type of research is different from hermeneutics, which is an exhaustive analysis to reveal deeper meaning of a textual source that can have significant bias issues [3]. Where possible, the approach was to use multiple document sources to cross-verify the information, thus reducing the bias problems.
Literature Review
Overview of CMS Programs
Medicare
Title XVIII of the Social Security Act, known as the Medicare Act, was enacted in 1965 by the U.S. Congress [1; 4]. The Congress formed the Health Care Financing Administration, now known as the Centers for Medicare and Medicaid Services (CMS), an entity of the Department of Health and Human Services (HHS), to administer the program [1]. The concept of the plan was to provide medical services for a select group of citizens of the United States: (a) the elderly , (b) persons with a permanent disability, or (c) persons with ESRD . Initially Medicare came in two parts, (a) Part A and (b) Part B [1]. Part A focused on inpatient care in a hospital setting while Part B focused on services provided by physician, on an outpatient basis, and other types [1]. Part A does not usually involve premiums, due to the Medicare Tax paid during the years of employment paid by beneficiaries [5]. Conversely, Part B usually has a monthly premium paid by its beneficiaries [5].
1997 saw the Balanced Budget Act (BBA) of that year passed by Congress; which, among other things, created Part C of Medicare, also known as Medicare Advantage [1; 6]. Part C is the provision that allows for the use of managed care providers and other health management organizations to handle Medicare recipients [1; 6]. This has given CMS some additional cost management options and plan providers can provide addition services they could not get within the normal Medicare program [6].
Congress put the last major section of Medicare, Part D, into legislation in 2003 and put into force in 2006, which implemented pharmaceutical coverage [4]. Part D involves a tiered method of coverage, where, after the first two hundred fifty dollars, the plan covers seventy five percent of all drugs up to twenty five hundred [4]. Part D does not cover twenty five hundred to five thousand, but covers any amount in expenses above the first five thousand for ninety five percent [4]. This new program does not have much in the way of research into how well it is being received or the impact [6].
Medicaid
Medicaid, also known as Title XIX, is a program design to provide health coverage to those who can afford it through a means-tested system administered as a joint venture of the States and Federal Governments [1]. Due to State Rights issues, there is no requirement for a state government to create a Medicaid program, but if accepting Federal funds, which reimbursement percentage varies from state to state, a state must follow the guidelines of Medicaid and submit plan details to HHS approval [1; 6]. The HHS enforces this through the HHS’s ability to use funding as an incentive, diminishing or eliminating funding [1]. To add to the State’s flexibility, the Federal Government can give waivers over parts of the Medicaid requirements [1]. An interesting fact is a direct correlation between how well the US Economy is doing and the number of Medicaid enrollment [6].
SCHIP
SCHIP, States Children’s Health Insurance Program or Title XXI, is the third program of CMS [1]. The Balanced Budget Act of 1997 added this program to provide coverage for children, which are in families who are above the guidelines set for Medicaid [1]. The purpose was to help the kids who happen to make up twenty five percent of the uninsured within the population [6]. Like Medicaid, the States have the option of not participating in the program [1].
Move to PPS
The Prospective Payment System (PPS) was the first major change to the CMS’s programs to reduce costs of Medicare [1]. Originally, CMS reimbursed providers based off the costs of each patient retrospectively; that is, after the patient has had the procedure performed on them [1]. This incentivizes each hospital to maximize their charges, creating inefficiencies in the reimbursement system [7]. To prevent this type of inefficiency, CMS created the PPS, which uses a payment schedule to determine reimbursement [1]. PPS determines this payment schedule via “the mean or median cost for a procedure from the cost reports at the discretion of the Secretary of HHS” [8]. An example to as how this works is shown by the reimbursement of Medicines published in the Federal Register in 2007, where five percent over the manufacturer’s average sales price became the standard, in comparison to the previously used six percent [9]. Furthermore, CMS uses a regional reimbursement factor, based off the salary section of annual cost reports submitted by hospitals to CMS, to adjust reimbursement by region [10].
PPS has been a controversial change. In the BBA of 1997, implementation of PPS for skilled nursing care reduced reimbursement below the sustainability point, causing a large number of bankruptcies of nursing homes [1]. This issue caused Congress to pass legislation in 1999 to increase reimbursement, salvaging the remaining nursing homes [4]. This resolved the issue within the short term, but may be an indication of the ineffectiveness of the bureaucracy to manage reimbursement in a crisis.
Current Cost Initiatives
Status of Medicare and Medicaid
In 2005, forty two million recipients were on the roles, up from twenty million in 1970 [11]. The fastest growing portion of the U.S. Population is the sixty-five plus segment, which generates concern, since the projections are that there will be seventy seven million recipients 2030 [11]. This fact of an increasing number of recipients is compounded due to the projection that the trust fund for Medicare will be exhausted within nine years of 2009 [12]. The only resolutions to this issue would be to (a) cut reimbursement, (b) reduce the number of recipients, (c) reduce services, (d) obtain funding from different sources, or (e) a combination of those options [12]. Currently, there is no published research on the impact of Title IX the American Recovery and Reinvestment Act of 2009 on Medicare, but funding of effectiveness studies should be able to determine the impact [13]. There was already great concern in the analysis of President Obama’s outlined Health Care Reform mentioned during President Obama’s 2008 campaign [14].
Pay for performance
Pay for Performance (P4P) is an initiative of CMS to tie reimbursement rates to evidence-based quality measures [15]. The concept is that health care will be improved with a financial incentive for higher quality [15]. There is some concern for the effectiveness and existence of secondary consequences [16; 17]. Through the demonstration projects, only moderate gains in quality were realized and hospitals with already high quality scores were the only real beneficiaries of the increase reimbursement [16]. Peterson et al. expressed concerns about the unknown benefit and effectiveness of these P4P systems, which is concerning due to the conceptual appeal of such programs [6].
RAC
The Recovery Audit Contractor (RAC) is a new method of resolution to the overpayment issue with Medicare and Medicaid [18]. CMS’s concept is that a RAC will question certain high dollar procedures involving payment from Medicare and the provider has a certain time to provide supporting documents of the procedure to validate correct reimbursement, correcting over and under payments [19]. The demonstration project of this program netted over one billion in reimbursement payment irregularities to provider [19]. Only three percent of payment issues were underpayments [19]. This might have something to do with the reimbursement methodology of the RACs. CMS only pays the RACs on overpayments to providers [20].
Other cost initiatives
One of the largest cost management initiatives is the Medicaid program. The waiver program allows CMS to encourage states to take innovative approaches in their Medicaid program [1; 21]. Section 1115, part of the waiver program, allows CMS to encourage innovations to Medicaid through their Research and Demonstration program, which then can be incorporated into Medicare and SCHIP [22]. While not a cost initiative per se, the Research and Demonstration program of the waiver provision of Medicaid and other programs of CMS are the test bed and creation point of many of innovations in cost management.
Another initiative is the nonpayment of never-events, described as “events that never should happen in any clinical care setting”, by the CMS [23; 24]. Congress allowed the HHS Secretary, via Section 5001c of the Deficit Reduction Act of 2005, not to pay Hospital Acquired Conditions (HACs), which IPPS FY 2008 and IPPS FY 2009 specify seventeen conditions [24]. This encourages hospitals to improve quality due to non-reimbursements for mistakes.
Implications
The first implication of Medicare and Medicaid are economic. The medical care demand curve is adjusted positively by the inclusion of health insurance [7]. Further, evidence exists that insurance also inflates the cost curve for medical services [25]. As insurance covers more expenses, the impact on the consumer becomes less, which encourages higher consumption. This causes the inflation of costs due to basic economics. The increase in cost and consumption due to the shielding of the consumer is the cause of the classic “Moral Hazard” problem of economics, where the choices of a party in a decision are reckless due to another party shielding the first party from the consequences [26]. Lee believes that the dramatic rise in health care cost is directly related to this moral hazard problem.
The second implication of Medicare and Medicaid is the impact on quality of health care, specifically through PPS [7]. Phelps states that private providers into their business practices have incorporated PPS. This is actually a good business decision, since the provider does not need to create a reimbursement system based on a prospective concept; they just need to base it off the already developed PPS of CMS. This increases the impact of CMS decision to pay any provider via PPS through cooption by the private industry. The impact of this considers the change in incentivization of providers that encourages a reduction in quality, the “quicker but sicker” phenomenon of health care [7].
In response to the second implication, CMS has created several quality initiatives, specifically P4P and non-payment of HACs. This creates an incentive to improve quality by introducing either an incentive to try for a higher reimbursement rate by investing in quality or by the potential loss due to a HAC. However, there would be a cost in creating quality initiatives, additional diagnostic testing to detect pre-existing conditions which would cause nonpayment through HAC related conditions, and other changes. This could be a problem for smaller, rural hospitals and providers.
Conclusion
CMS and the U.S. Legislature have been trying to improve the quality and reduce the cost of CMS’s programs while trying to improve access. By using research and demonstration programs, CMS has been exploring unique methods of reducing cost and improving quality, using its power to fund programs by providing waivers to states as part of Medicaid. By assisting states, CMS reduces it risk of such programs by splitting costs with a state and able to see the affects in relatively small areas. However, these programs and initiatives have a history of unintended consequences. In fact, CMS and Congress have created several initiatives, such as P4P, to correct issues caused by other initiatives, such as PPS.
Potential research questions
Several research questions become apparent in the previous discussion. First, how does the impact of the new RACs have on the reimbursement process, considering the particular incentive scheme? Second, what is the impact of the RAC, HAC non-payment, or P4P programs on smaller, rural hospitals? Finally, with the increase in the rate of reimbursement reduction and incentive force, from HAC non-payments and P4P, driving investment into quality initiatives, is there a sustainability issue being created? These should be helpful answers in determining issues before noticed by public policy.
References
1. Harris, D. Contemporary issues in healthcare law and ethics (2nd ed.). Chicago. AUPHA/HAP. 2003.
2. Denscombe, M. The good research guide for small-scale social research projects (3rd ed.). Boston. McGraw Hill. 2007.
3. Nueman, W. Social research methods: qualitative and quantitative approaches (6th ed.). Boston. Allyn and Bacon. 2006.
4. Miller, R. Problems in health care law 9th ed. Sudbury, MA. Jones and Bartlett. 2006.
5. CMS. Overview Medicare program. Centers for Medicare and Medicaid Services. 2005. Available at: http://www.cms.hhs.gov/MedicareGenInfo/ Accessed 03 11, 2009.
6. Shi, L. & Singh, D. Delivering health care in America: a systems approach (4th ed.). Sudbury, MA. Jones and Bartlett. 2008.
7. Phelps, C. Health economics (3rd ed.). Addison Wesley. Boston. Addison Wesley. 2003.
8. Prospective payment system for hospital outpatient services 65 Fed. Reg. 18434. 2000.
9. Thompson, C. Medicare updates outpatient payment system. Am H Health Syst Pharm 2007:64. doi: 10.2146/news070103.
10. Dalton, K. & Slifkin, R. Pps inpatient payment and the area wage index. North Carolina Rural Health Research and Policy Center. Chapel Hill, NC. 2001.
11. Feldstein, P. Health policy issues: an economic perspective (4th ed.). HAP/AUPHA. Chicago. HAP/AUPHA. 2007.
12. DoBias, M. Outlook remains bleak. Modern Healthcare 2006:36(19):8-9.
13. U.S. Congress The American recovery and reinvestment act of 2009. Government Printing Office. 2009. Available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf Accessed 03 01, 2009.
14. Antos, J. Symptomatic relief, but no cure – the Obama health care reform. The New England Journal of Medicine 2008:359(16):1648.
15. CMS. Medicare pay for performance (p4p) initiatives. CMS Office of Public Affairs. 2005. Available at: http://www.cms.hhs.gov/apps/media/press/release.asp?counter=1343. Accessed 02 08, 2009.
16. Lindenauer, P., Remus, D., Roman, S., Rothburg, M, et al. Public reporting and pay for performance in hospital quality improvement. The New England Journal of Medicine 2007:356(5): 486-497.
17. Petersen, L., Woodard, L., Urech, T., Daw, C., & Sookanan, S. Does pay-for-performance improve the quality of health care? Annals of Internal Medicine 2006:145(4):265-272.
18. CMS. Cms announces new recovery audit contractors to help identify Medicare payments. CMS Office of Public Affairs. 2008. Available at: http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3292. Accessed 02 08, 2009.
19. Bibbins, B. Racs: What they are and why proactive compliance, through clinical documentation improvement programs, is so important. Journal of Health Care Compliance 2008:10(6):21-68.
20. CMS. How are the recovery audit contractors paid for finding and recovering overpayments. Centers for Medicare and Medicaid Services. Available at: http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=7728. Accessed 02 22, 2009.
21. CMS. Overview of Medicaid state waiver program demonstration projects – General information. Centers for Medicare and Medicaid Services. Available at http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/01_Overview.asp. Accessed 03 01, 2009.
22. CMS. Research & demonstration project. Centers for Medicare and Medicaid Services. Available at: http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/03_Research&DemonstrationProjects-Section1115.asp. Accessed 03 01, 2009.
23. National Quality Forum. Serious reporting events: Safety events that should never happen. Quality Healthcare, Now! Available at: http://qualityforum.org/pdf/qhn/6-1-06.pdf. Accessed 02 21, 2009.
24. CMS. Cms improves patient safety for Medicare and Medicaid by addressing never events. Centers for Medicare and Medicaid Services. Available at: http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3224. Accessed 02 21, 2009.
25. Lee, R. (1989, Fall). Insurance and medical list prices. Journal of Human Resources 1989:24(4):689-708.
26. Moral hazard. In the New Penguin Business Dictionary. London: Penguin. Available at: http://www.credoreference.com.library.capella.edu/entry/6892796/. Accessed 03 01, 2009.
End Notes
i. 65 or older and receiving Social Security or paying premiums [1; 4]
ii. End Stage Renal Disease
Tuesday, July 14, 2009
Gill's Model of Change Management
Gill presents a model of change leadership that tries to incorporate some of latest concepts of leadership into factors that lead to successful change. Five factors are identified as being essential for change (1). These factors are (a) vision, (b) values and culture, (c) strategy, (d) empowerment, and (e) motivation and inspiration. Through these values that organizations realize change in a constructive manner.
Vision, as in Business Vision, is the overarching aim or goal of an organization (2). By providing vision, the leader gives their personnel the place they are trying to go towards. Without vision, the organization is guideless, without direction. Personnel without direction will find direction themselves.
Values and culture are defined as principles that guide an organization (1). A leader must cultivate the values that they want exemplified by their organization, disapproving those which hinder the vision and run contrary to what would assist the vision. As a farmer, this cultivation must be judicious, patient, and timely.
Strategy is the method that the vision will be realized (1). The leader must create the plan as it were, building a roadmap that will help direct the organization. Strategy formation is important, but imparting the strategy is even more so (Coveney, 2004, Personal Communication). By letting the organization know the strategy, the benefit of the organization knowing what to do and why is much greater than harm caused by the competition knowing (Coveney, Personal Communication).
Empowerment is allowing the personnel of the organization the ability to accomplish their job task with the minimum of interference (1). This is not just providing the responsibility of accomplishing a goal, but the resources and authority to do such (1). This is where attempts at empowerment fail, where staff are held responsible for things that are outside their power to accomplish (Coveney, 2003, Personal Communication).
Finally, motivation and inspiration is the intangible ability of leaders to encourage those they lead (1). Through personal skill and oratory ability, a leader heartens their charges and drives those charges forward (1). Thusly, the leader becomes the driving force for change within an organization.
Through these five factors, leaders successfully implement change. Each factor is vital, being a tool of a leader. A leader must divine how to fulfill each factor as an intrinsic personal need. Not doing so will cause trouble for the implementation of change.
References
1. Gill, R. (2003). Change management – or change leadership? Journal of Change Management 3(4).
2. Corporate vision. (2006). In BUSINESS: The Ultimate Resource - Dictionary of Business and Management. London: A&C Black. Retrieved July 15, 2009, from http://www.credoreference.com.library.capella.edu/entry/ultimatebusiness/corporate_vision
Vision, as in Business Vision, is the overarching aim or goal of an organization (2). By providing vision, the leader gives their personnel the place they are trying to go towards. Without vision, the organization is guideless, without direction. Personnel without direction will find direction themselves.
Values and culture are defined as principles that guide an organization (1). A leader must cultivate the values that they want exemplified by their organization, disapproving those which hinder the vision and run contrary to what would assist the vision. As a farmer, this cultivation must be judicious, patient, and timely.
Strategy is the method that the vision will be realized (1). The leader must create the plan as it were, building a roadmap that will help direct the organization. Strategy formation is important, but imparting the strategy is even more so (Coveney, 2004, Personal Communication). By letting the organization know the strategy, the benefit of the organization knowing what to do and why is much greater than harm caused by the competition knowing (Coveney, Personal Communication).
Empowerment is allowing the personnel of the organization the ability to accomplish their job task with the minimum of interference (1). This is not just providing the responsibility of accomplishing a goal, but the resources and authority to do such (1). This is where attempts at empowerment fail, where staff are held responsible for things that are outside their power to accomplish (Coveney, 2003, Personal Communication).
Finally, motivation and inspiration is the intangible ability of leaders to encourage those they lead (1). Through personal skill and oratory ability, a leader heartens their charges and drives those charges forward (1). Thusly, the leader becomes the driving force for change within an organization.
Through these five factors, leaders successfully implement change. Each factor is vital, being a tool of a leader. A leader must divine how to fulfill each factor as an intrinsic personal need. Not doing so will cause trouble for the implementation of change.
References
1. Gill, R. (2003). Change management – or change leadership? Journal of Change Management 3(4).
2. Corporate vision. (2006). In BUSINESS: The Ultimate Resource - Dictionary of Business and Management. London: A&C Black. Retrieved July 15, 2009, from http://www.credoreference.com.library.capella.edu/entry/ultimatebusiness/corporate_vision
Monday, July 13, 2009
Future of Healthcare
The future of health care in consideration of spending is one geared to reducing the total cost of health care. The technology innovations down the pike are geared towards better and cheaper diagnosis, allowing for more cost effective care (1; 2; 3). By identifying the appropriateness of care, more expensive care options can be ignored if they will not be effective (3). This is important due to the Government’s commitment to reductions in health care spending, which are predicted cause issues in the short term (4). There is concern on the disparity of care between health care for advantaged and marginalized populations (5). What affects the Medicare and Medicaid costs will have on marginalized populations?
It is obvious that the future for the U.S. system is geared to some sort of managed care and/or cost mitigation strategy. The growth of health care costs in consideration of Canada, fifteen in comparison to a ten percent for Canada, show a more centralized system can reduced costs (6). However, access to care is a significant issue for Canada’s system, which helps inform the national dialog (7).
Considering the past habit of the U.S. Congress to pass legislation without though to unintended consequences, it will be a concern on how they debate this current initiative for health care reform (8). The debate needs to weigh impact on marginalized populations, beyond just healthcare. There needs to be serious consideration on the total impact of such an overhaul.
References
1. Gravitz, L. (2009, March/April). TR10: $100 genome. Technology Review. Massachusetts Institute of Technology.
2. Grifantini, K. (2009, March/April). TR10: Paper diagnostics. Technology Review. Massachusetts Institute of Technology.
3. Popovits, K. (2006). Strategies in the biopharmaceudical industry [Podcast]. Stanford’s Entrepreneurship Corner. Stanford University. Retrieved July 13, 2009 from http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1560
4. Brin, D. W. (2009, July 8) Update: U.S. hospitals’ overhaul deal may help industry longer term. Wall Street Journal. Retrieved July 13, 2009 from http://online.wsj.com/article/BT-CO-20090708-715519.html
5. Blacksher, E. (2008). Healthcare disparities: The salience of social class [Abstract]. Cambridge Quarterly of Healthcare Ethics 17(2). Retrieved July 13, 2009 from http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=1781816
6. Phelps, C. (2003). Health economics (3rd ed.). Boston: Addison Wesley.
7. Feldstein, P. (2007) Health policy issues: An economic perspective (4th ed). Chicago: HAP / AUPHA.
8. Harris, D. M. (2003) Contemporary issues in healthcare law and ethics (2nd ed,). Chicago: AUPHA / HAP.
It is obvious that the future for the U.S. system is geared to some sort of managed care and/or cost mitigation strategy. The growth of health care costs in consideration of Canada, fifteen in comparison to a ten percent for Canada, show a more centralized system can reduced costs (6). However, access to care is a significant issue for Canada’s system, which helps inform the national dialog (7).
Considering the past habit of the U.S. Congress to pass legislation without though to unintended consequences, it will be a concern on how they debate this current initiative for health care reform (8). The debate needs to weigh impact on marginalized populations, beyond just healthcare. There needs to be serious consideration on the total impact of such an overhaul.
References
1. Gravitz, L. (2009, March/April). TR10: $100 genome. Technology Review. Massachusetts Institute of Technology.
2. Grifantini, K. (2009, March/April). TR10: Paper diagnostics. Technology Review. Massachusetts Institute of Technology.
3. Popovits, K. (2006). Strategies in the biopharmaceudical industry [Podcast]. Stanford’s Entrepreneurship Corner. Stanford University. Retrieved July 13, 2009 from http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1560
4. Brin, D. W. (2009, July 8) Update: U.S. hospitals’ overhaul deal may help industry longer term. Wall Street Journal. Retrieved July 13, 2009 from http://online.wsj.com/article/BT-CO-20090708-715519.html
5. Blacksher, E. (2008). Healthcare disparities: The salience of social class [Abstract]. Cambridge Quarterly of Healthcare Ethics 17(2). Retrieved July 13, 2009 from http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=1781816
6. Phelps, C. (2003). Health economics (3rd ed.). Boston: Addison Wesley.
7. Feldstein, P. (2007) Health policy issues: An economic perspective (4th ed). Chicago: HAP / AUPHA.
8. Harris, D. M. (2003) Contemporary issues in healthcare law and ethics (2nd ed,). Chicago: AUPHA / HAP.
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