Improving Health Care at Hospitals

Methods for Improving Health Care in the Hospital
The Centers for Medicare and Medicaid have required hospitals to start reporting on quality criteria for reimbursement consideration as early as 2012, based on 2010 health care reforms. Major changes that clinicians and hospitals must conform to include:
Value-based Purchasing-This provides greater reimbursement with an emphasis on better clinical outcomes, starting in 2013.
Risk-Adjusted Reimbursement-This accounts for higher risk patients with multiple conditions and gives the doctor a higher fee to manage their care than previously, effective in 2014.
Reduced Payments for Hospitals with Excessive Re-admission Rates-This is a penalty for poorer performance and is effective in 2013 for hospitals who do not perform within certain guidelines for specific diagnoses.
This article reviews a report commissioned by The Commonwealth Fund to analyze some of the things the top performing hospitals, who submitted to quality surveys by the independent quality watch dog nonprofit, Leapfrog Group, are doing to improve clinical care and efficiency at their facilities.
Case Study Criteria
This information was drawn from case study analysis of 4 hospitals out of the top 13 hospitals in Leapfrog's Highest Value Hospital criteria using their 2008 survey data. Standards reviewed included short lengths of stay and low readmission rates for the following cardiac procedures; CABG, PCI, and AMI, in addition to pneunomia. The case study review was conducted by Jennifer Edwards, Sharon Silow-Carroll, and Aimee Lashbrook in a report entitled, Achieving Efficiency: Lessons from Four Top Performing Hospitals and was published as a Synthesis Report for the Commonwealth Fund in July 2011.Hospitals included in the report are Fairview Southdale Hospital in Edina, Minnesota,Park-Nicollet Methodist Hospital in Minneapolis, Minnesota, North Mississippi Medical center in Tupelo, Mississippi, and Providence St. Vincent's Medical center in Portland, Oregon. These hospitals scored high in at least three of the four criteria and were recognized as high value hospitals. The Commonwealth Fund commissioned the study in order to assess what hospitals were doing to create high quality outcomes with low resource investments, in other words, producing good results for less money. Here are the top factors influencing high patient quality outcomes at hospitals, listed in order of precedence:
Full-time Quality Assessment Departments
All four hospitals have full-time quality development, measurement, and compliance departments, but the difference between the best scoring facilities and the medium hospitals was how they trained their staff to solve quality problems as a part of their job. This includes clinical and nonclinical staff that assess performance improvement processes. At Fairview Southdale, every department director is required to sponsor at least two initiatives to improve clinical quality and produce a minimum of $60,000 in savings yearly.
Matrix Management Models Enhance Fluid Organizational Changes
In the top hospitals, executives with more fluid organizational roles rather than hierarchical, were able to make systemic adjustments more readily. Matrix operational models support management changes based on organizational links impacting outcomes rather than chain-of-command methods.
Increased Use of Hospitalists as Patient Care Coordinators
All four of these hospitals used hospitalists to coordinate inpatient care rather than "on-call" physicians. These full-time clinicians make patient assessments and provide greater continuity of patient care, making it easier to measure and track patient health. It is easier to implement standards of practice changes with full-time employees than independent contractors. Notably, the Accountable Care Organization criteria looks at reduced hospital re-admissions when rewarding hospitals with higher payments.
Engaging Staff: Quality Improvement is the Responsibility of Everyone
North Mississippi Medical Center, a recipient of the Malcolm Baldridge Award for Quality, solicits all its employees for ideas on process improvement and in 2008, 37% of those were implemented. This process is reinforced through recognition and incentives. Staff empowerment is also one of the measures for the Baldridge Award. St, Vincent's Hospital in Portland, Oregon created a new model to increase staff engagement, called self-governance or one-team-many-hands approach, which gives all staffers representation in hospital decision making.
Information Systems Supporting Patient Care
St. Vincent's and Fairview Southdale are part of integrated systems where patients can request medications on-line, facilitate non emergency health assessments, and schedule appointments. It is much harder for nonintegrated health systems to offer these tools, but here are some of the creative things these facilities have done with technology to improve patient care:
1. An electronic bed board for optimizing facility space and accommodating patients.
2. Patient discharge systems for streamlining patient processes when leaving the facility.
3. An internal alert process when a unit is close to capacity so other departments can handle the back fill.
4. Fairview Southdale uses wireless technology to allow ambulances to send electrocardiograms to the hospital when a patient is enroute, which reduces patient care time by twenty minutes.
Standardization and Simplification
All four hospitals had processes to eliminate unnecessary redundancies, reduce patient slow downs, and stop errors. Something as simple as a defined protocol for assigning a bed for a patient eliminated slowdowns. And in health care, minimizing delays means patients obtain care quicker and financially the facility is able to optimize its resources for all patients. St. Vincent's uses a staggered staffing system to avoid shift change down time.
Centers for Medicare and Medicaid Demonstration Projects
Here is a brief list of health care demonstration projects through CMS:
Global Capitation Payments-This is a project which is in five states and attempts to address the hospital safety net, which is the extent hospitals serve the poor and uninsured, and it runs from 2010 to 2012.
Medicare Shared Savings-This is part of the Accountable Care initiative, which rewards clinicians for performing within certain evidence-based standards for targeted diagnoses beginning in 2013.
Medicaid Children's Health Insurance Shared Savings Program-Like the adult shared savings program.
Bundled Medicaid Demonstration Projects-This reviews episodes of care in a hospital and other settings, is deployed in eight states, and runs from 2012 to 2016.
Bundled Medicare Payments-This is a method of enhancing primary or Medical Home provisions to increase clinician reimbursement for patient care.
In closing, all of the selected hospitals were part of health systems, where benchmarking and resourcing services are readily available, which could be problematic for community hospitals lacking these resources. Still, these four stellar hospitals provide creative solutions for managing patient care on a budget, in urban and suburban settings.
It was excruciating to sequester myself to write this article when it is the peak of the Pacific Northwest nirvana weather, so I thank those of you who are going to read it tomorrow morning when it posts. My service to you is reducing the 25 page report down to less than 2 pages. This is the healthpolicymaven signing off in 78 degree air with 56% humidity.

Health Insurance Premiums and Government Oversight: Consumer Implications from the Affordable Care Act Implications

Government Oversight of Private Insurance: What it Means for the Cost of Your Health Insurance
The plethora of health care laws passed in 2010 under the Affordable Care Act,include provisions for “rate setting” and monitoring of private sector insurance plans on a federal level. The ruling applies to all insurance plans which participate in any government funded health care program, including Medicare, Medicaid, and the soon-to-be-deployed regional insurance exchanges. This article explains how this differs from present rate monitoring and premium-setting and the ultimate impact on the consumer.
The Rules
Health & Human Services is charged with establishing a health insurance rate oversight committee, to assess the reasonableness of proposed health insurance rate increases starting in 2014. Since health insurance premiums have continued to grow at a rate in excess of inflation and increased 41% between 2003 and 2009, according to a Commonwealth Fund study , affordability is a concern. The federal PPACA law mandates health insurance as a means to providing national health care, so the viability of the national health care program depends on manageable health insurance premiums for the private sector.
Current State
Insurance premiums are determined based on each state’s rate authorization standards with the Insurance Commissioner, who is an elected official. Some states have a “use and file” policy which means the insurance company can decide to make plan changes, adjust the rates, and start implementing before the state approves them. Other states have a “file and preapproval” policy, which means you have to get the state office to approve of your math, the reasons for your plan increase first. The insurance company then has the opportunity to comment and either accept the commissioners regulations or withdraw the product. In the case of Principal Financial Group, when a previous Washington State Insurance Commissioner mandated that all individual medical plans provide maternity coverage and other provisions, they pulled their product from the state. In economic terms this is referred to as an unintended consequent of a regulatory action. The federal government does not have the authority to control state insurance premiums for the private sector. Medicare and Medicaid plans are of course, a different story as they are government plans.
Altered State
Through the process of gathering data, analyzing cost impacts, discerning patterns, and revealing information to health care purchasers, both individual and corporate, Health and Human Services, which oversees the Centers for Medicare and Medicaid, is charged with creating a more transparent process for what you actually end up paying for medical insurance. The intent is good, but there is no regulatory authority to enforce rate fairness by state and a regulation without enforcement can be problematic. Finally, the cost of the regulation will be borne by the private sector rate payers, which will add a nominal cost to individual premiums, spread over the entire population.
Economic Impact
I spoke briefly of unintended consequences above, but let me restate, if an additional regulation means more insurance companies will cease to offer insurance plans to the small group and individual markets, this may not be a good thing for consumers. Of course, the insurance industry is already seeing a reduction in the number of companies offering medical insurance and this trend has been going on since I was in the benefits business in the 80’s and 90’s. In short, private sector companies, both for-profit and not-for-profit will make market decisions based on where their strengths lie and act accordingly. And one could argue that as long as the companies which remain are of quality and offer good consumer products and services, this change is not untenable. The Netherlands and Switzerland both have private sector insurance programs financing their public health plans and only a hand full of companies provide the coverage, which seems to work fine. Also, they pay much less per-capita for health care than the United States does, but the healthpolicymaven has told you that before.
What it Means to the Health Insurance Premium Payer
OK, here is the “skinny” on this one, since the federal government Does Not have rate setting authority for insurance, which is controlled by each state’s elected insurance commissioner and those state administrators, this change will not have a direct impact on the rates you pay for medical insurance. What is more, since it is highly unlikely the government will be able to overturn ERISA or the McCarran Ferguson Act; don’t expect to see any rate relief. ERISA is the Employee Retirement Income Security Act which created the exemption for self-funded or self-insured plans, which most major employers have used to exempt themselves from many state and federal mandates. I do not see the government succeeding in overturning this act either. The McCarran Ferguson Act is a federal law which gives states the authority to regulate insurance. It should also be noted that insurance premiums taxes are a major source of funding for the states and they will never give up that revenue. Indirectly the fact the government is requiring the disclosure of the rate factors and will publish the information is a good thing for consumers. You will no longer have to be an insider in the insurance business, which you know I was for a couple of decades, to understand this process. In conclusion, will this make your insurance cheaper, no, because that depends on many complex factors that have to do with underfunding of government programs which the private sector has to support with cost transfers, market supply factors, and the degree to which primary health care is deployed in this country. Finally, people will still have to care enough to read about the provisions and many people don’t. The healthpolicymaven’s book, Unraveling U.S. Health Care should come out later this year and it is a guidebook to our health system, in lay person’s terms, which I am hoping will facilitate more outreach in this area.

Accountable Care Medicare Shared Savings Rules and How they Benefit Consumers

Accountable Care Organizations and Medicare Shared Savings Program
The federal Department of Health and Human Services (HHS), which includes the Centers for Medicare and Medicaid Services (CMS), announced proposed rules for the much vaunted Shared Savings Program for qualifying Accountable Care Organizations on March 31st. What struck me about the program, was how much of the risk management formula was taken directly from the private insurance sector, which is an indication of a public/private hybrid for program management. Since it is my belief that we can provide optimal public services through this model, I am keen to evaluate, follow, and measure the results for this revolutionary change in health care delivery for Americans. This article explains the risk sharing mechanisms in the new program and what it may mean for consumers.
Private Sector Influence
The Centers for Medicare & Medicaid, which administer the largest health care program in the country, have created a health care program, called Accountable Care which requires clinical results within a certain range in order to get optimal reimbursement levels. Additionally, organizations which outperform the government set standards have an opportunity to receive a gain or a share of the unused funds. In the insurance business this is called retrospective financing, where the provider reimbursements and participant insurance rates are established based on certain assumptions by actuaries at the beginning of the plan year. About three months after the close of the plan year a final report is given, which illustrates the true performance compared to the expected levels. At this time the corporate insurance client either owes money or has a credit toward the new plan year. It is this type of accounting that CMS is using to gauge the “Shared Savings” for ACO participants. But before we examine the shared savings program let’s briefly review what it takes to qualify as an Accountable Care Organization.
Eligibility Rules for Accountable Care Organizations
Who is eligible to be part of an ACO? All clinicians in group practice arrangements, networks of individual practitioners, joint venture partnerships with hospitals and other professionals, hospitals who employ ACO professionals, Critical Access Hospitals, and any health care practitioner or entity receiving Medicare reimbursements for services are eligible for ACO status.
Potential Roadblocks in Achieving ACO Status
Rural and semi-rural areas may have difficulty with the ACO status (Wenatchee Valley Medical Center for eastern Washington comes to mind) because anti-trust hurdles must be cleared with respect to market share. I imagine the way an organization will address this is to make sure the mix of employed clinicians versus contracted ones meets the 50% or less rule for Primary Service Area standards. It also looks like the non-urban exemptions and critical access rules will allow organizations like these to qualify.
All organizations who wish to participate in the ACO program must maintain a minimum level of patient volume of 5,000 patients.
The Accountable Care Agreement is binding for Three Consecutive Years
Organizations participating in the ACO Shared Savings Program have a choice of two models, either the one-sided or two-sided version. The names are humorous to me, but let me explain where they come from in terms of insurance risk management programs. The one-sided program means the organization shares only in the “up-side” or gain for performance improvements under the contract. However, CMS always likes to be a little different and this more limited risk exposure is just for the first two years, after which the organization experiences the full risk sharing. The “two sided” model means the organization is exposed to both gains and losses from the beginning of the three year contract. This seems like a no-brainer, why would a clinic want to be on the hook for losses right away in a new Medicaid program? However there is more to it than that, because the potential for gain differs.
Government Incentive for Meeting Benchmarks
Using a complicated formula of a per-enrolled-patient-risk-adjusted cost benchmark CMS has created a financial incentive of 2% to 3.9% depending on the number of patients involved in the ACO. In my previous ACO article in September, I highlighted some of the clinical outcomes the agency was seeking, to be eligible for the shared savings. CMS has identified 65(yes, it is complex) quality measures in these five areas under ACO provisions:
1. Patient/caregiver experience
2. Care Coordination
3. Patient Safety
4. Preventive Health
5. At-risk population/frail elderly health

Conversely, in terms of shared losses, the organization’s cost basis must be 2% or more over the cap to be required to pay CMS a differential based on ACO patient performance. What is important is that the participating ACO organizations report their quality metrics using the Medicare Physician Quality Reporting System (PQRS) and also using an electronic health record or HER or EMR. This incentive system will allow Medicare, the administrator for the largest health program in the United States to make assessments and extrapolate information on its population, for better program management. This is a great thing for the consumer, which is anyone who is on Medicare now and all of us who are paying for Medicare. There is also an additional incentive to use the Medicare reporting system which is the equivalent of one half percent of the total clinician’s billing to Medicare for each eligible professional’s Medicare Part B fee (out-patient doctor’s visits). This is significant and should encourage providers to participate in the program. Another ACO rule states that at least 50% of primary care physicians must be users of a certified electronic health record by the beginning of the second year of the contract. (Tremendous opportunity for EMR companies). Another aspect of the ACO rules is public reporting of some of the quality measures, which will create a nationwide standard for health care quality measures.
The Centers for Medicare and Medicaid Services has anticipated that some organizations will have difficulty meeting 100% compliance, so they have a Corrective Action Plan process. The CAP process includes noncompliance warnings, special monitoring, and a formalized corrective plan. If an organization fails to meet the ACO compliance rules and is removed from the program, it must wait three years before re-applying for participation. The review process for noncompliance is rigorous and participating organizations must submit to period audits.
Consumer Benefits
One of the positive aspects of ACO reporting is the data which will be gathered in a standard format and shared in aggregate with participating Accountable Care Organizations. There are also methods to coordinate with other Medicare Demonstration Programs, to avoid “double-dipping.” Other Medicare Demonstration Projects include: the Independence at Home Medical Practice Demonstration, Medicare Health Care Quality Demonstration, Medical Home Demonstrations, Physician Group Practice Transition Demonstration, Community Home Health Teams supporting Patient-Centered Care, and various state initiatives supporting Medicaid patients with chronic conditions.
Conclusions for Consumers
The ground breaking requirements of the Accountable Care Organization Rules enacted in 2010 are the result of a peer review process since the International Order of Medicine’s infamous report on the poor patient safety record in many United States health care facilities. Consumers will start to have access to standardized reports on participating health care facilities clinical safety measures and patient care data. This is a tremendous step forward for American consumers, as transparency in reporting is one of the hallmarks of high quality organizations. Integrated health care organizations like Virginia Mason already provide detailed patient quality information and the CMS Shared Savings Program will help others achieve similar reporting and patient quality standards. This is an example of good governance at its best, with an incentive to respond to the consumer push for greater efficacy in patient care.