The Electronic Health Record Problem

https://www.commonwealthfund.org/blog/2018/electronic-health-record-problem?omnicid=EALERT1529002&mid=henrykotula@yahoo.com

Image result for benefit and cost

It’s no secret that many physicians are unhappy with their electronic health records (EHRs). They say they spend too much time keying in data and too little making eye contact with patients. They say their electronic records are clunky, poorly designed, hard to navigate, and cluttered with useless detail that colleagues have cut and pasted to meet documentation requirements. Meanwhile, the data they really need are buried almost beyond retrieval.

Not all physicians feel this way. Two-thirds of primary care physicians say there are satisfied with their current EHRs, according to a 2018 survey by The Harris Poll. But the critics have a point. Current EHRs are not well-designed to meet the needs of users. And they don’t do enough to make clinicians smarter and more efficient. This doesn’t mean we would be better off in the paper world of 10 years ago. But it does mean that EHRs need improvement.

As we think about improving them, we need to broaden the discussion of EHRs and their role. We need to reckon with the underlying causes of EHRs’ problems, how to correct them, and how to ensure that their enormous potential benefits are understood and realized.

The Causes

EHRs are a technology. Like most technologies, they can be used in a variety of ways for a variety of purposes. Their human masters decide.

In our current health system, EHRs have one critical performance requirement: generating clinical revenues. In the fee-for-service world, this means supporting providers’ billing and documentation to generate as much revenue as possible for each clinical service. EHRs also must help providers meet regulatory requirements that may have financial or accreditation implications.

This means that current EHRs were not created to support many of the things that physicians, patients, and policymakers value: better care experiences, reduced costs, or improved care quality and population health management. They were not created to make physicians better diagnosticians or more cost-effective prescribers. The reason: our health care system has mostly not rewarded these activities. They have not been mission-critical for providers or, therefore, EHR designers.

For that reason, EHRs have only the most minimal capabilities related to clinical decision support, which has been proven to increase the quality of care, or to the collection of information on duplicate and unnecessary testing, or on the aggregate health of providers’ patient populations.

To put it simply, improving EHRs will require changing the priorities governing their design. That means moving away from fee-for-service payment toward risk-sharing by providers and, ultimately, some form of prospective compensation. Until then, optimizing the usability and value of EHRs will be an uphill struggle.

EHRs’ Undervalued Benefits: Empowering Patients and Advancing Human Health

Because the benefits of EHRs may be less visible than their burdens, some of their contributions are overlooked and undervalued.

One of these benefits is giving patients access to their medical information. Meaningful-use requirements spurred the adoption of patient portals, which, though sometimes clunky, have enabled patients for the first time to routinely see their test and procedure results. Patients can also now download their entire digital record and share it with third parties that can analyze its contents and educate them on their significance. Apple, for example, has agreements with over 100 health systems and practices to perform this function, which is likely to spawn a deluge of consumer-friendly health care applications based on patients’ own information.

Another underrated EHR benefit is that, by capturing billions of patient encounters worldwide, electronic records are generating a vast store of digital health data that are available for novel uses, including research into the causes and cures of disease and the detection and prevention of threats to public health.

Think of these data as the equivalent of a new natural resource, like water or minerals; they sit in the cloud, ready for extraction, refinement, and application. Their value is increasingly understood by technology companies, new startups as well as old stalwarts, that are pouring billions into exploiting them. There are obvious privacy and security issues raised by this development. But never before in human history have we had access to this novel (un)natural resource.

In entering all that data at the point of clinical care, health professionals and patients are creating a public good. But they get little tangible in return — at least in the short run. This maldistribution of benefit and cost lies at the heart of the current EHR controversy.

What Next?

To make health professionals’ work easier, and to exploit the vast potential of EHRs, a number of interventions make sense.

The most important is unrelated to the technology. Clinicians unhappy with EHRs have a huge stake in moving from fee-for-service to value-based payment, so that providers and their EHR vendors start to prioritize the production of health and the reduction of waste in health systems. This will reduce documentation requirements, spur the creation of decision support and information exchange that make clinicians’ lives better, and focus attention on getting value from the information so laboriously recorded by doctors and other health professionals.

A second requirement will be to lower the burden of data entry. Many providers have started using scribes to take notes during visits. While many physicians love scribes, they are expensive. A better long-term solution would be to use natural language processing and artificial intelligence to enable clinicians’ conversations with patients and their subsequent assessment and treatment plan to be recorded in real time. Given the increasing power of these technologies, such applications will soon be available.

Another approach to assisting data entry is to systematically redesign records for ease of use and to prune away unnecessary recording requirements.recent New England Journal of Medicine commentary provided an excellent example of the benefits of this intervention.

A third requirement for EHR improvement falls to health professionals. When I was a medical student, I spent hundreds of hours learning how to take notes in the paper world. More experienced clinicians reviewed and graded these write-ups. Later, as a young physician, I observed the notes of clinicians I admired, and emulated them. This process of professional education in record-keeping unfolded over years and forever shaped my note-writing habits. If physicians are unhappy with how their colleagues use EHRs, they should start educating young physicians — and their peers — on how to properly keep records in the electronic world. What and how data get recorded are ultimately a professional responsibility.

Lastly, we need to find a way to correct the maldistribution of costs and benefits that now plagues the use of EHRs. By creating vast troves of electronic data and enabling patient empowerment, clinicians and their patients perform a valuable public service that has thus far been unrecognized and unrewarded. Reducing the cost of data entry will help, but as the benefits of EHRs and their data become monetized — as they will — some way to share those gains with clinicians and patients at the frontlines should be considered. This could be accomplished in a variety of ways such as voluntary contributions from businesses that rely on EHR data to an EHR innovation fund and/or directing a share of the taxes paid by these businesses to EHR improvement. But at least until EHRs become much more user friendly, this problem of unfair allocation of benefit and cost needs attention.

We are not going back to the paper world, but EHRs need to work better. As they pursue this goal, clinicians, policymakers, managers, and vendors need to understand and address the root causes of the problem they are trying to solve, and the full array of options for addressing it.

 

 

 

 

Doctors Are Fed Up With Being Turned Into Debt Collectors

https://www.bloomberg.com/news/articles/2018-11-15/doctors-are-fed-up-with-being-turned-into-debt-collectors

Highlighting a key implication of the rise in high-deductible health plans, both on the ACA exchanges and in employer-sponsored insurance, the article describes a question now commonly faced by doctors and hospitals—how best to collect their patients’ portion of the fees they charge? As one Texas doctor tells Bloomberg, reflecting the experience of the Maldonados from the other side of the equation, “If [patients] have to decide if they’re going to pay their rent or the rest of our bill, they’re definitely paying their rent.” He reports that the number of people dodging his calls to discuss payment has increased “tremendously” since the passage of the ACA. Another Texas doctor reports that his small practice had to add an additional full-time staff member just to collect money owed by patients, adding further overhead to his practice’s costs and making it more likely that he, like many other doctors, will eventually seek shelter by being employed by a larger delivery organization. That trend, as has been repeatedly shown, further increases the cost of care, exacerbating the increase in insurance costs for families like the Maldonados. This Gordian knot of increasing costs, rising deductibles, and growing premiums has left us with a healthcare system that’s forcing difficult decisions at every turn, for patients and providers.

Physicians, hospitals and medical labs are grappling with the rise in high-deductible insurance.

Doctors, hospitals and medical labs used to be concerned about patients who didn’t have insurance not paying their bills. Now they’re scrambling to get paid by the ones who do have insurance.

For more than a decade, insurers and employers have been shifting the cost of care onto their workers and customers, tamping down premiums by raising patients’ out-of-pocket costs. Last year, almost half of privately insured Americans under age 65 had annual deductibles ranging from $1,300 to as high as $6,550, government data show.

Now, instead of getting paid by insurance companies on a predictable schedule, health-care providers have to engage in an awkward dance. One moment they’re removing a pre-cancerous skin mole. The next, they’re haranguing patients to pay what’s become a growing portion of the total medical bill.

“It’s harder to collect from the patient than it is from the insurance,” said Amy Derick, a doctor who heads a dermatology practice outside Chicago. “If the plans change to a higher deductible, it’s harder to get the patients to pay.”

Independent physicians cited reimbursement pressures as their biggest concern for staying in business, according to a report by Accenture Plc in 2015.

“If they have to decide if they’re going to pay their rent or the rest of our bill, they’re definitely paying their rent,” said Gerald “Ray” Callas, president of the Texas Society of Anesthesiologists, whose Beaumont, Texas, practice treats about 40,000 people annually. “We try to work with the patient, but on the other hand, we can’t do it for free because we still maintain a small business.”

Accenture

In 2016, Callas introduced payment options that allow patients with expensive plans to pay a portion of the bill upfront or on a monthly basis over several years. Even so, Callas said the number of people avoiding his calls after surgery has increased “tremendously” each year since the Affordable Care Act passed in 2010.

Derick instituted a “time-out” option a few years back that gives patients the billing codes before a procedure, allowing them to call their insurance companies for estimates. Even with the program, collection rates are slower, especially at the beginning of the year when insurance plan deductibles reset.

Even large medical companies with national operations are facing the problem. Quest Diagnostics Inc., the lab-testing giant, said 20 percent of services billed to patients in the third quarter of this year went unpaid, costing the company about $80 million in lost revenue.

“We certainly have a high bad-debt rate for the uninsured,” Chief Financial Officer Mark Guinan said in a telephone interview. “But really the biggest driver is people with insurance. It’s their coinsurance and their high deductibles, and they don’t always pay their bills.”

Another testing company, Laboratory Corp. of America Holdings, reported its first year-over-year uptick in unpaid bills in the first quarter of 2016. At the time, Chief Executive Officer David King said high-deductible plans, higher copays and greater incidences of non-covered services led to more dollars being shifted to patients. LabCorp declined requests for comment.

Northwell Healthcare Inc., a network of more than 700 hospitals and outpatient facilities, lost $106.9 million to unpaid services in 2015. Others have reported the same: Acute-care and critical-access hospitals reported$55.9 billion in bad debt for 2015, according to data compiled by the American Hospital Directory Inc. 

“High-deductible plans have had a very big impact,” said Richard Miller, Northwell’s chief business strategy officer.

Kaiser Family Foundation, American Hospital Association

When it comes to reimbursement, a common denominator across the health-care industry is the archaic process through which bills are processed — a web of medical records, billing systems, health insurers and contractors.

High deductibles only add to the red tape. Providers don’t have real-time, fully accurate information on patient deductibles, which fluctuate based on how much has already been paid. That forces providers to constantly reach out to insurance companies for estimates.

Tarek Fakhouri, a Texas surgeon specializing in skin cancer, had to hire an additional staff member just to reason through bills with patients and their insurers, a big expense for an office of six or seven employees. About 10 percent of Fakhouri’s patients need payment plans, delay their skin-cancer surgeries until they’ve met their deductibles, or have to choose an alternative treatment.

According to a study earlier this year by the Journal of American Medical Association, primary-care physicians at academic health-care systems lose about 15 percent of their revenue to billing activities like calling insurance companies for estimates.

“It’s an unnecessary added cost to the health-care system to have to hire staff just to sit there on hold with insurance companies to find out what a patient’s deductible status is,” said Fakhouri.

Callas, Derick, and Fakhouri said they all know physicians who have left private practice altogether, some for the sole purpose of ending their dual roles as bill collectors. According to a study by the American Medical Association, less than half of doctors were self-employed as of 2016 — the lowest total ever. Many left their own practices in favor of hospitals and large physician groups with more resources.

To cope with the challenge, labs and hospitals are investing millions in programs designed to help patients understand what they owe at the point of care. Northwell has been implementing call centers and facilities where patients can ask questions about their bills.

“There’s a burden on both sides,” said Callas. “But health-care providers get caught in the middle.”

 

Doctors Like to Think Big Pharma Doesn’t Sway Them. It Does

https://www.bloomberg.com/view/articles/2018-10-04/doctors-often-don-t-see-conflict-of-interest-in-drug-company-cash?srnd=opinion

Doctors Like to Think Big Pharma Doesn’t Sway Them. It Does.

Doctors, when surveyed, say they are opposed to the very idea of skewing their prescribing practice in favor of companies giving them money. The problem is, they still take lots of money in the form of honoraria, speaking fees, research grants, and outright gifts from pharmaceutical and medical device companies. Research suggests they can then fail to recognize that they’ve been influenced.

Psychologists George Loewenstein and Don Moore argued in a 2004 paper that while people consciously think about their professional obligations, the other half of a conflict — self-interest — is “automatic, viscerally compelling and often unconscious.” That theme keeps returning in more recent research.

As MD turned ethics professor Sunita Sah of Georgetown University concluded in a review paper, even if doctors don’t recognize what’s going on, those in the pharmaceutical industry understand social psychology and know what works. Reciprocity is a part of human nature, and field studies have shown that doctors change their practices to reciprocate gifts and favors. Those who ultimately lose in this game are the patients, who are at risk of prescriptions that are not entirely in their best interest.

Every once in a while an extreme case leads to a dramatic downfall. That happened recently when a New York Times/ProPublica story revealed that Memorial Sloan Kettering Cancer Center’s chief medical officer Jose Baselga had accepted millions from industry and then written numerous scientific papers without disclosing financial ties to the companies whose products he was studying.

He resigned within days. The larger problem remains: Conflict of interest is the norm in medicine. According to a 2007 survey, 94 percent of physicians had some sort of industry ties. And as Sah and other social scientists have shown in their research, this can bias their behavior even as they insist they are above it.

Sense of entitlement is a big factor in physicians’ acceptance of industry money. In one study she co-wrote with Loewenstein, doctors were more likely to agree they would accept industry payments when they were reminded of their sacrifices — years of medical school, debt incurred, sleep deprivation when on call. She compared the attitude to that expressed in the famous commercial for L’Oreal hair products: “I’m worth it.”

In addition to the lure of money, pharma and medical device companies can appeal to physicians’ egos by anointing them “key opinion leaders.” In one of her papers, Sah quotes one such leader, a psychiatrist, saying: “It strokes your narcissism. … The first thing they do is take you to a really nice hotel. And sometimes they pick you up in a limo, and you feel very important, and they have really, really good food.”

In another study, which examined conflict of interest and bias across professions, Sah and Lowenstein showed that people were less likely to offer biased, self-serving advice when they worked with individuals, known by name. In experiments, subjects designated as advisers could guide advisees in a number estimation game — the adviser having access to more information than the advisees. The advisers could benefit from causing advisees to make an overestimate, while the advisees benefited from getting the number right.

When they were giving advice to individuals, advisers were less likely to act selfishly. When dealing with groups, self-interest became a bigger factor, though subjects weren’t aware of the change. They reported afterward that they were unbiased and gave good advice. In interpreting the findings, the researchers suggested that in doctor-patient relationships, empathy might guide decisions. But people have more trouble feeling empathy toward nameless groups, as they would in, say, making clinical guidelines or public health recommendations. Grants for studies also appears to create a bias. Industry-funded studies are more likely than independent ones to show a product is effective, according to a 2017 review.

Disclosure rules are supposed to limit the damage, but other studies show they don’t help much. In a 2005 paper, researchers argued that advisers feel “morally licensed and strategically encouraged” to give even more erroneous or exaggerated advice once a conflict was disclosed. In another paper, Sah and colleagues showed that patients were just as likely to take advice after a conflict-of-interest disclosure. Some thought that if a doctor owned a stake in an imaging center, for example, then he or she must have expertise. Others reported they felt awkward about refusing. After a conflict-of-interest disclosure, she said, “advice can be harder to turn down because it suggests you think the doctor is biased and corrupt.”

The main benefit is that disclosure rules can discourage providers from taking money that creates a conflict in the first place. There is hope, however, that doctors can be more principled than other kinds of advisers. In a recent study, volunteers were asked to play the role of either doctors or financial advisers and were placed in a conflict situation where they could make money at the expense of advisees. Those who were reminded of their responsibility as doctors gave less selfish advice, and those reminded of their role as financial advisers gave more selfish advice. When researchers carried out the same experiment with real doctors and financial advisers, Sah said, they got pretty much the same result.

So maybe doctors are a little special after all, in that they work by professional standards that put patients’ well-being above fancy dinners, prestige and the almighty dollar. But with drug companies and others cleverly playing to doctors’ selfish desires, they may sometimes need a reminder. 

 

 

Doctors Leaving Atrium Buck The National Trend Of Groups Joining Hospitals

http://www.wfae.org/post/doctors-leaving-atrium-buck-national-trend-groups-joining-hospitals#stream/0

Image result for Doctors Leaving Atrium Buck The National Trend Of Groups Joining Hospitals

Hospital systems have been on a buying binge the last few years, gobbling up doctors’ practices. By one estimate, nearly a third of medical practices nationwide are now part of a large hospital network.

But one large group of physicians is going in another direction – it’s breaking away from Atrium Health and opening an independent practice next month.
A whiteboard at the temporary Tryon Medical Partners office counts down the number of days till the practice opens. It’s made up of 88 primary care and specialty doctors who are leaving Atrium Health, formerly Carolinas HealthCare System. One of them is Dr. Dale Owen.

“Just because everybody else may be selling that doesn’t mean that we are not at the peak and it’s going to start the other direction,” he said. “Because I really think that’s what’s happening. Because we cannot keep doing the same thing. We can’t just keep buying up groups and then doctors not have any say and then expect a different outcome from the very same process each time.”

Owen is a cardiologist and CEO of the practice, called Tryon Medical Partners. The mood is different now than it was five months ago. Owen and the rest of the doctors sued Atrium so they could leave and start this practice. The hospital relented.

The doctors’ lawsuit said Atrium was making changes like cutting the number of registered nurses assisting doctors, and moving nurses from individual doctors’ offices and to a central a call center.

In preparation for the opening next month, rows of nurses are in a South Park office building taking calls from patients.

They answer questions from patients and schedule appointments. The practice will stagger the opening of eight locations in the Charlotte metro area throughout the next several months, roughly mirroring the locations of the Atrium affiliated Mecklenburg Medical Group’s offices.

What the doctors are doing is unusual. The national trend for the past several years has been practices joining hospital systems. As of 2016, about a third of doctors’ practices were owned by a hospital – a more than 100 percent increase in just four years, according to a study for the Physicians Advocacy Institute and Avalere Health. Hospitals bought 5,000 practices between July 2015 and 2016 alone.

Lisa Bielamowicz is a doctor and president of Gist Healthcare, a Washington D.C. based consulting company. She said hospitals are buying up these practices to grow their networks and keep patients in the system. Physicians sought stability and help with increasing administrative tasks due to increasing regulatory changes.

“So far there hasn’t been a ton of flux away from employment relationships. If you have health system employ hundreds of physicians, of course, there is going to be a handful chose to leave for a variety of reasons,” she said. “But it’s very rare that a group of dozens or more of physicians will leave en masse from a health system. Now that said given where the market is going and all of the change that’s occurring now it’s something that we would expect to see more of down the road.”

Because, Bielamowicz said, some doctors have found being an employee of a large health system isn’t all it’s cracked up to be.

“Most doctors are trained to be independent thinkers and don’t think of themselves as being employees of any organization even if someone is giving them a paycheck and a W2 every year,” she said. “The idea of a parent or employer organization putting limits around how they operate their office or how they would practice, the types of care that they deliver is something very difficult for a lot of physicians to adjust to.”

A few doctors from the original practice decided to stay with Atrium. The health system has said it’s hired nearly 50 providers who have already started or will start by October. As the opening date nears, Owen said his adrenaline is high and he’s excited to practice on his own terms.

“There have been lots of people who said it was going to be too hard to be independent and you can imagine that the hospitals might think that and other independent organizations because they were already independent. Plus, when you are the first do it at this kind of scale and on the backs of primary care. Everybody is going to be watching it.”

Owen and the doctors will start seeing patients the first week in September.

 

 

When Your ‘Regular Doctor’ Could Be Anyone

Image result for When Your ‘Regular Doctor’ Could Be Anyone

Just what duty, if any, exists for doctors to keep tabs on their sickest patients?

“Will you be my regular doctor?” a new patient seeing me in my primary care clinic asked.

“Sort of,” I honestly answered.

She looked back at me quizzically.

“Technically speaking I will be your doctor,” I explained. “But you may have trouble scheduling an appointment with me and may have to see another doctor here at our group clinic at times. And if you need to get admitted to this hospital, other doctors who work there will take care of you.”

The patient seemed disappointed.

“I’m sorry,” I said. “But I’ll do my best to be available for you.”

It was not long ago that such words, coming from a doctor, would have been almost heretical. But logistical and philosophical changes in medicine have dramatically altered the doctor-patient relationship.

In clinic-based practices such as mine, patients may be told they may need to wait weeks or months in order to see their doctor. In the world of private medicine, some physicians now charge their patients extra annual fees for the privilege of seeing or speaking with their doctor more promptly.

Just how bad is this situation? Do patients followed by just one doctor do better or worse? And just what duty, if any, exists for doctors to keep tabs on their sickest patients?

My father, an infectious diseases specialist who practiced medicine from the 1950s to the 1990s, would have answered these questions: “Very bad,” “worse” and “a tremendous duty.” My dad was constantly vigilant, going to the hospital seven days a week, giving patients our home phone number and staying in touch with covering physicians when we were on vacation.

But things were different then. For one thing, it was expected that my father would follow his patients both in and out of the hospital. Today there are hospitalists — specialists in inpatient medicine who are in charge of admitted patients and specially trained to diagnose and treat illnesses requiring hospitalization. And my mother, like most doctors’ wives of a generation ago, did not expect my dad to be a co-parent. Medicine, after all, was a calling.

The reasons for the changes are diverse. For one thing, the growing number of women in medicine has helped bring a better work-life balance among physicians. In addition, the 1984 Libby Zion case, in which a young woman died while under the care of young doctors working 36-hour shifts, pointed out the potential dangers of sleep-deprived providers.

When I was a medical resident in the 1980s, the first “night floats”— doctors who covered the wards at night so other physicians could sleep or go home — appeared. To many doctors of my father’s era, this development was heresy. Medicine, they feared, was becoming “shift work.” Patients were passed from doctor to doctor, none of whom really “knew” them. With the advent of hospitalists, this fragmentation has gotten worse.

Fortunately, researchers are studying how well patients do in these competing types of systems. The 2016 FIRST trial, which received a lot of attention, found that patient safety was not compromised when doctors in training worked longer shifts.

But even when the data show that limiting work hours leads to as good or better care, physicians should not be content to play “doctor tag,” in which a physician or clinic simply designates a new provider to “take over” treatment. Just because a physician takes good care of someone during his or her shift does not mean that responsibility ends there.

It may be helpful to think about specialties within medicine that have long been associated with limited continuity, such as emergency or intensive-care medicine. In both of these venues, patients move in and out of treatment quickly and follow-up may be difficult. But it is not impossible.

In her new book, “You Can Stop Humming Now,” Dr. Daniela Lamas, a critical care specialist, recounts visits she made to patients after they had left her unit. In one case, she attends a party thrown by a man whose severe West Nile virus infection had initially made it unlikely he would ever return home. But now there he was, eating, chatting, “working the crowd” and reminding his son to videotape the event.

Dr. Lamas did this on her own time. But she found it immensely rewarding. “We rarely have the opportunity,” she writes, to follow patients “through long-term acute care hospitals, infections, delirium, readmissions, and maybe, if they are very lucky, back home to a life that looks something like what they left.” The patient and his wife seemed thrilled that she had come — not as his current doctor but as his past doctor who still cared.

And what of my patients? I have made a decision not to try to imitate my father, as much as I admire the type of doctor that he was. But patients deserve to have a “doctor,” despite the caveat to my new patient. Plus I have found that most physicians, at the end of the day, are control freaks, wanting to be in charge of their own patients.

So I try to stay in touch, by phone, computer or other messaging strategies. Patient portals, being implemented at many hospitals, now allow patients to leave messages for their physicians in secure ways that do not threaten confidentiality. And I “sneak in” patients with urgent issues when I am not scheduled in clinic but there are open rooms, such as early in the morning or during lunch. The generous staff members at my clinic help make this happen by registering these patients and getting their vital signs. My clinic is also pursuing strategies to increase the chance that patients can see their regular doctors.

My patients seem pleased when I go the extra mile. If I am willing to squeeze them in, they are willing to move around their schedules to come. But I just can’t promise I can or will always be available.

 

 

Ex-CFO, 3 surgeons charged in $950M kickback scheme in California

https://www.beckershospitalreview.com/legal-regulatory-issues/ex-cfo-3-surgeons-charged-in-950m-kickback-scheme-in-california.html

Image result for illegal kickbacks

Federal prosecutors unsealed charges this week against nine new defendants for their alleged roles in a kickback scheme that resulted in the submission of more than $950 million in fraudulent claims, mostly to California’s worker compensation system, according to the Department of Justice.

The nine defendants were charged in relation to the government’s investigation into kickbacks physicians received for patient referrals for spinal surgeries performed at Pacific Hospital in Long Beach, Calif. They are among the dozens of physicians and other medical professionals allegedly involved in the scheme.

Of the nine defendants recently charged, three are orthopedic surgeons. Daniel Capen, MD, agreed to plead guilty to conspiracy and illegal kickback charges. He allegedly accounted for about $142 million of Pacific Hospital’s claims to insurers. Timothy Hunt, MD, who allegedly referred spinal surgery patients to Dr. Capen and other physicians, agreed to plead guilty to a conspiracy charge involving his receipt of illegal kickbacks. Tiffany Rogers, MD, allegedly received illegal kickbacks to refer patients for spinal surgeries to Pacific Hospital.

The other defendants recently charged in the scheme include the former CFO of Pacific Hospital’s physician management arm, George Hammer. He agreed to plead guilty to tax charges based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings. Two chiropractors as well as two companies and an individual associated with one of the chiropractors were also charged for their alleged involvement in the scheme, according to the DOJ.

Michael Drobot, former owner and CEO of Pacific Hospital, ran the 15-year-long kickback scheme. He was sentenced to more than five years in prison in January.

 

 

Health Care Is an Investment, and the U.S. Should Start Treating It Like One

https://hbr.org/2018/04/health-care-is-an-investment-and-the-u-s-should-start-treating-it-like-one

apr18-03-rawpixel-com-577480-unsplash

We invest billions of dollars each year in medicines, new technologies, doctors, and hospitals — all with the goal of improving health, arguably our most prized commodity. Yet, investments in the U.S. health care system woefully underperform relative to those made in health care in other countries. For instance, the U.S. spends nearly 7–10% more of its national income on health care than other similar countries and yet life expectancy at birth remains, on average, two to three years lower.

To be sure, many factors influence health outcomes and the investments the health care system makes are only one input. But a large reason why investments in health care underperform is because we invest so much in services that are clearly low-value — i.e., offer little or no clinical benefit relative to the cost — and likely many more where the returns are gray. Investing limited health care dollars into low-value services crowds out our ability to spend on high-value services. So if we want to see better outcomes, we need to start to think like investors.

Examples of significant investments in low-value care services abound in the U.S. health care system, ranging from expensive imaging for benign medical conditions to routine pre-operative testing before low-risk surgeries like cataract surgery. Some research estimates that 42% of Medicare beneficiaries receive some form of low-value care.

Many factors contribute to our failure to disinvest from low-value services and invest more heavily in high-value services. For one thing, physicians, insurers, and patients often have limited data on the relative value of different health care services. There is an abundance of high-quality comparative effectiveness data for pharmaceuticals, largely because of the drug approval process, but there’s less data on the value of other expensive investments into health, such as doctor visits and hospitalizations. Put differently, there is no equivalent of the Food and Drug Administration for a large chunk of the health care sector, which means evidence on value in these sectors takes long to produce, in part because nobody requires that evidence to be generated. Furthermore, even when we have good evidence that a treatment or service is highly valuable, we frequently underuse it. Many medications for chronic conditions such as heart disease, e.g., statins, are routinely underused.

Physicians and businesses also generate income from performing low-value services. They may even be able to order these services themselves, effectively generating their own business. (For example, a cardiologist who performs and reads nuclear stress tests, which are frequently low value, has the ability to order these studies for his or her patient.) So reducing investments in low-value care services means spending less on doctors, hospitals, and other health care technologies. But, like pharmaceuticals, each of these entities is represented by powerful lobbyists (such as physician and hospital organizations), who will strongly oppose any steps to reduce payments.

Patients also frequently lack the information and ability to evaluate whether or not low value studies should be performed, and to hold their physicians accountable for choosing to provide low-value care. This issue is further complicated by the fact that labeling care as low-value is context dependent — advancing imaging for back pain is often not useful but sometimes it is. And moreover, some physicians may order unnecessary low-value testing because of the perceived threat of liability. Despite significant efforts to make physicians and patients aware of low-value services, we’ve observed little improvement in reigning in use.

Overinvesting in low-value services by physicians, payers, and patients leads to the underinvestment in high-value services. But affordability and timing is another critical issue that stymies investment in high-value care. Many high-value treatments take several years to yield significant health benefits. Because patients regularly change insurers, any individual insurer has less incentive to commit to investing in an expensive, high-value treatment if the return on investment could end up accruing to a competitor. Short-term budget constraints among both public and private insurers, and the fact that re-allocating resources away from low value services takes time, further limit investments in high-value services.

Consider, for example, the debate around the pricing of new Hepatitis C Virus (HCV) therapies. HCV is a chronic infectious disease that affects 3 million or more Americans. If untreated, HCV can cause liver dysfunction, liver failure, cirrhosis, and ultimately death. Until recently, the only available treatments for HCV were complex, multi-drug regimens with severe side effects and only modest efficacy. In the last half decade, however, several new HCV treatments have been developed with cure rates exceeding 90%. These new treatments typically cost $40,000-$50,000 per treatment course, but they have been shown to be cost effective over the long-term, as they can help patients avoid terminal liver disease, which is extremely expensive to treat, and reduce morbidity and mortality due to progressive liver disease.

Many physicians, experts in public health, and, of course, representatives of the pharmaceutical companies which produce these new treatments contend that these drugs should be made available to all patients with HCV who could benefit from them. But both private and public payers have raised objections over the price of these therapies, in large part because the population of patients who require treatment is so large. Payers contendthat they simply cannot afford to cover the cost of these drugs for all patients who are eligible for them and still provide coverage for other health care services that patients use. And state Medicaid agencies and small insurers frequently assert that short-term budget constraints prevent them from paying for costly, high value therapies like those for HCV.

In cases like this, it may be instructive to think about the circumstances through the lens of a portfolio manager who is choosing how to allocate investments. When given the opportunity to invest in an expensive asset, with high potential for significant future returns on investment, an investment manager would not pass it over due to lack of funds, because this capital could likely be acquired at a cost below the asset’s expected return. The manager would reduce holdings in investments with lower expected returns and re-allocate these funds into more promising investments. If the investment were valuable enough, the manager might even find ways to raise additional capital to invest in this asset.

In health care, this means at least two things: (1) wrestling with the factors that continue to promote use of low-value services (like lack of information and financial incentives for patients, and inappropriately structured financial incentives for physicians) and (2) recognizing that high-value investments often require large financial outlays today that ultimately reap future benefits.

Aside from reducing the use of low-value services, one potential solution is to identify and develop sources of long-term financing for high-value services. Mortgages exist to spread the costs of a home or a car out over a longer period of time, thereby allowing people to buy a product that they otherwise could not afford. Similar approaches could be used to help finance high-value health care investments that otherwise would be unaffordable.

For both public and private insurers, a long-term view should be feasible. State governments already rely heavily on capital markets to finance infrastructure investments and it’s quite possible that the returns on these investments fall below high-value health care investments like HCV drugs. Private insurers could also access private capital markets and design contracts with other insurers that allow them to partake in some of the long-term benefit of early high-value care when individuals switch between plans. For instance, an insurer that covers HCV therapy for an individual could, in theory, be compensated by future insurers, even Medicare, that treat that patient and benefit from that patient already being cured of HCV.

Ultimately, reducing investments in low-value care will require coordinated action from many actors. Patients and providers need more robust and up-to-date information on the value of different services. Insurers must look hard at the services they cover and discourage utilization of low-value services and encourage use of high-value services, even those that are high cost. Innovators developing new drugs, devices, and procedures should look beyond profits alone and incorporate the need to add value into their investments. And policymakers must create incentives for all of the above to consider value when making decisions about how to invest their health care dollars.

These actions are important because not only does underinvesting in high-value services make them less accessible, it may also make them less available in the future. Many expensive high-value treatments — like HCV therapies, new cancer treatments, and gene therapies — are the product of extensive research and development, which are undertaken because the expected returns are thought to exceed the known costs. A failure to reduce investments in low-value care and reinvest these resources in high-value therapies will reduce incentives to develop future therapies that can deliver significant value to patients.