June 28, 2016
Elevate your perspective to get a clear view on healthcare disruption
Healthcare in the United States is in the midst of a fundamental transformation, and the system is seeking to reward those organizations that can successfully maintain the health of their patient populations. This is in stark contrast with the old model of rewarding the care provider for the number of treatments completed. Not surprisingly, this shift from the old fee-for-service model to the new value-based model is perceived as being difficult and fraught with risk.
“For most companies, it is a very difficult position to take, to upturn the apple cart and do something completely different,” said Julie Williamson, vice president, strategy and research for Karrikins Group and co-author of the book Matter: Move Beyond the Competition, Create More Value, and Become the Obvious Choice.
“That is the concept of being on the edge of disruption, instead of just falling into it and letting the chips fall where they may,” Williamson said. She delivered a keynote session at ANI: the 2016 HFMA National Institute that highlighted ways for organizations of all sizes to make their own disruptive transformations.
To elevate your perspective and define the edge of disruption for your organization, company leaders need to become curious about what is going on not just within the healthcare industry, but also in other, non-related, industries. This is fundamentally a learning exercise and one that you should encourage others on staff to engage in as well. It takes healthy questioning from all involved to successfully define a company’s competitive edge.
She suggests examining what it is that makes your company unique and, specifically, the value it brings to the marketplace. Using this understanding for perspective, then look out into the industry and the broader market—not just your industry, but other spaces—and see the disruptions that are happening relative to the value you are trying to provide.
Assessing these two dynamics allows company executives to develop an “elevated perspective” about the company’s position in the market, the disruptions that are happening, and where they can make substantial changes within the organization that affect not just the company, but the industry and market.
Likewise, Williamson added, company leaders should bring their customers into the process to find out those things that really matter to them, as well as their views on what they value about the relationship and the services they provide.
Once a company has elevated its perspective to understand its own edge of disruption, it will need strong relationships to implement planned changes. One company that has effectively elevated its relationships, Williamson said, is healthcare supply-chain management company GHX. “They know the distributors, the suppliers, and the hospitals and other care providers. They have brought them all together to work on some pretty major industry challenges,” she said. “Having the relationships to be able to get that kind of collaboration to meaningfully change the market is a great example of the power of elevated relationships.”
Further, by developing elevated relationships, organizations are empowered to sell into higher levels of customers’ companies to elevate the value of the products and services provided. Williamson used Lakeside, a Canadian logistics company that at one time was fighting tooth and nail with other companies to book $50 freight lanes, as an example of this kind of change. Its disruption was to back away from the low-value, commoditized market of providing freight services $50 at a time to becoming a freight logistics company. Today, it is not uncommon for Lakeside to sell $1 million to $5 million contracts to manage an entire company’s logistics needs.
Defining your edge of disruption and identifying market need will make no difference if you don’t execute on the idea. This is often where the hard work begins, even after a company has built the foundation for understanding the needed disruption and leveraged relationships with others who can be brought along on the journey.
Visit HFMA for the report.
CMS announces proposed payment changes for Medicare home health agencies for 2017
The Centers for Medicare & Medicaid Services (CMS) announced proposed changes to the Medicare home health prospective payment system (HH PPS) for calendar year (CY) 2017 that would foster greater efficiency, flexibility, payment accuracy, and improved quality. Approximately 3.4 million beneficiaries received home health services from approximately 11,400 home health agencies, costing Medicare approximately $17.8 billion in 2015.
In the rule, CMS projects that Medicare payments to home health agencies in CY 2017 would be reduced by 1.0 percent, or $180 million based on the proposed policies. The proposed decrease reflects the effects of the 2.3 percent home health payment update percentage ($420 million increase); the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies (NRS) conversion factor ($420 million decrease); the effects of the -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($160 million decrease); and the effects of the proposed increase to the fixed-dollar loss (FDL) ratio used in determining outlier payments from 0.45 to 0.56 for an estimate impact of -0.1 percent ($20 million decrease).
To be eligible for the home health benefit, beneficiaries must need intermittent skilled nursing or therapy services and must be homebound and under the care of a physician.
Covered home health services include skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, medical social services, and medical supplies. Home Health Agencies (HHAs) are paid a national, standardized 60-day episode payment for all covered home health services, adjusted for case-mix and area wage differences.
Provisions in these rules are helping to move our healthcare system to one that values quality over quantity and focuses on reforms such as achieving better health outcomes, preventing disease, helping patients return home, helping manage and improve chronic diseases, and fostering a more-efficient and coordinated healthcare system.
The proposal includes rebasing the 60-day episode rate; Updates to Reflect Case-Mix Growth; Negative Pressure Wound Therapy (NPWT) devices; Change in Methodology and the Fixed-Dollar Loss (FDL) Ratio Used to Calculate Outlier Payments; CMS is also proposing to update the HH PPS payment rates by the home health payment update percentage of 2.3 percent, as required by the Social Security Act; Home Health Quality Reporting Program (HH QRP); and Home Health Value-Based Purchasing Models.
For additional information about the Home Health Prospective Payment System, visit here.
For additional information about the Home Health Value-Based Purchasing Model, visit here.
The proposed rule can be viewed at www.federalregister.gov/public-inspection.
Virginia Mason investigated by feds, state after accreditation trouble
Federal and state officials are investigating potential health and safety violations at Seattle’s Virginia Mason Medical Center after the hospital was denied full accreditation by the Joint Commission during an unannounced visit in May.
The Centers for Medicare & Medicaid Services (CMS) and the Washington State Department of Health (DOH) launched a dual investigation after Virginia Mason was found to be out of compliance in 29 areas by the nonprofit group that inspects nearly 21,000 hospitals and programs in the U.S.
The agencies cited the hospital June 15 in a “statement of deficiencies” that found problems with oversight of Virginia Mason’s kidney-dialysis unit, which is run through a contract with Northwest Kidney Centers. Specifically, the person responsible for daily management of the clinic was not a registered nurse as required, but a respiratory therapist who reported to a pharmacist, who reported any problems to a nurse, the document said.
The hospital announced June 17 that staff had failed to properly screen dialysis patients for hepatitis B and issued warnings to 650 clients dating back to 2011 that they may have been exposed to the virus, though the risk was very low.
DOH and CMS typically start investigations after any notification, including findings from the Joint Commission, said Julie Graham, a DOH spokeswoman.
“These investigations remain ongoing and these are only the state findings so far,” Graham said in an email. “There may or may not be additional citations issued by CMS and/or DOH in the future relating to some or all of the various concerns raised by the Joint Commission at this hospital.”
Joint Commission officials conducted an unannounced visit to Virginia Mason on May 20, and found the hospital failed to comply with 29 standards of the more than 250 the agency monitors. Problems were detected in areas ranging from conducting fire drills and reducing the risk of infection from medical equipment and devices to providing an environment with no risk of “immediate threat to life.”
The hospital was given a preliminary denial of accreditation, a rating that was changed to contingent accreditation June 1, after a follow-up visit. Joint Commission officials will conduct an unannounced visit in the next three months to ensure that the hospital has addressed the problems.
“Much of what the Joint Commission found showed we were in compliance,” Virginia Mason spokesman Gale Robinette said in an email. “It’s important to know that most of what the surveyors questioned was at a very granular level and not related to direct patient care. We are taking swift action on the items that need to be addressed.”
The list of deficiencies cited by the Joint Commission included several crucial areas in which Virginia Mason failed to meet standards, including a requirement that the hospital has an infection-prevention and control plan, and that it inspects, tests and maintains medical equipment.
Visit the Seattle Times for the story.
Even with private insurance, out-of-pocket costs for hospital visits shot up 37%
The amount that people with private insurance still had to pay for hospital visits grew 37 percent from 2009 to 2013, a study finds. And it's probably still going up. The study, conducted by the University of Michigan and published in JAMA Internal Medicine, adds to a growing body of evidence that suggests employers are using high-deductible plans to keep premium costs down.
It found that out-of-pocket costs increased 6.5 percent a year, on average, as overall health spending grew 2.9 percent annually. The average out-of-pocket cost of hospitalization was more than $1,000 over the five-year period, largely because of charges patients might not be aware of.
Out-of-pocket costs are those borne by individuals rather than their insurers. They include co-payments (a per-visit fee), deductibles (the amount that must be paid before insurance coverage kicks in), and co-insurance (the percentage of the hospital's charge people must pay even after insurance kicks in).
A separate, 2013 study in the Journal of Health Economics showed that only 14 percent of people understood what out-of-pocket costs, deductibles, coinsurance, and co-payments were. During the study period, deductibles grew 86 percent and coinsurance costs rose 33 percent. Co-payment costs fell, but so did the number of insurance plans that charged them. Out-of-pocket costs exceeded the annual growth of insurance premiums—the payments that companies and workers make to buy health insurance—which increased 5.1 percent a year.
A 2015 Kaiser Family Foundation survey of employers found that deductibles had been growing much more rapidly than premiums for several years. The Kaiser study surveyed employers and drew conclusions based on the type of insurance plan. The Michigan study examined data from more than 50 million Americans between the ages of 18 and 64 with insurance plans offered by three major companies—Aetna, Humana and United Healthcare.
For those with “consumer-directed” health plans—policies with high deductibles paired with personal savings accounts for employees to use when care isn't covered by insurance—the average out-of-pocket cost was approximately $1,200, about $600 less than for those with individual private plans.
The study period ended just before the Affordable Care Act, or Obamacare, took effect in January 2014, but many of the trends have likely continued. The 2015 Kaiser Family Foundation survey reported that 81 percent of people with employer-provided insurance have an annual deductible of about $1,300.
Visit Bloomberg for the report.
HHS calls on center for innovation to accelerate Zika vaccine development
To accelerate development of a Zika vaccine, the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (ASPR) will begin developing a vaccine using its Center for Innovation in Advanced Development and Manufacturing (CIADM) in Baltimore, MD.
With funding and direction from ASPR’s Biomedical Advanced Research and Development Authority (BARDA), the CIADM led by Emergent BioSolutions, Inc., will conduct a variety of studies to move quickly through early stages of vaccine development and submit an investigational new drug request to FDA to begin clinical studies. To further speed development time, the CIADM will use vaccine technology similar to that used in vaccines being developed to protect against similar viruses, such as Dengue.
Over the next 30 months, BARDA will provide more than $17.9 million to Emergent with the potential for additional work for a total of approximately $21.9 million. At any stage in development, BARDA could transfer the technology to other vaccine manufacturers to utilize the technology to produce and market the Zika vaccine.
BARDA has used the CIADMs to accelerate development of therapeutics for Ebola, develop a second-generation anthrax vaccine, and manufacture experimental vaccines to protect against influenza viruses with pandemic potential.
In addition to this vaccine development, BARDA is sponsoring development of pathogen reduction technologies to reduce the risk from Zika in the blood supply. BARDA also is using its clinical studies network to collect blood samples needed to speed development of diagnostic tests.
Visit HHS for the article.
New devices causing 'paradigm shift' in stroke care
New devices called stent retrievers, which effectively reverse strokes, have revolutionized the treatment of certain stroke patients, according to an article in the journal Expert Review of Neurotherapeutics.
"Stent retrievers are a major advance in acute ischemic stroke care and will have significant impact on the evolution of stroke systems of care," according to the article by Loyola Medicine neurologists Rick Gill, MD and Michael J. Schneck, MD. Dr. Gill is the outgoing chief resident and Dr. Schneck is a professor in the Department of Neurology of Loyola University Chicago Stritch School of Medicine.