WARNING: Rough Waters Ahead
Feb 19, 2013

WARNING: Rough Waters Ahead

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This is a self-promotional blog post, but the connection to healthcare public policy is clear enough.  Just this morning Erskine Bowles and Alan Simpson released a new plan that seeks to find some balance between the polar opposition of the Republican and Democratic parties over fiscal management.

Their approach would cut $600 billion from Medicare and Medicaid and raise $600 billion in new tax revenue from ending or curbing deductions and tax breaks. It would also include $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for social security, farm program and civilian and defense retirement programs. 

The Obama Administration has discussed supporting $400 billion in cuts to Medicaid and Medicare, while the House GOP considers any new revenue a nonstarter.  The self-serving political intransigence of the two parties is unlikely to abate any time soon.  But the metaphorical swirls of focus and attention, like water in a sink flowing toward the drain, are clearly zeroing in squarely on further Medicare and Medicaid cost containment.

Healthcare providers are going to have to double down on lowering expenses while concurrently reacting to market and regulatory forces that are driving demands for improved outcomes, higher safety and better quality.  In reaction to this tremendous challenge, Artower Advisory Services has partnered with StrategyDriven Enterprises to create a new product offering that can accelerate the efforts of healthcare providers to meet these challenges.

The Value-Driven Performance Improvement Model© leverages StrategyDriven’s knowledge and expertise developing and implementing performance improvement models in the nuclear power industry to give healthcare providers the tools they need to improve efficiency, enhance production and improve outcomes while lowering costs (i.e., increase patient value).

Please take a moment to read our new White Paper, which describes the V-D PIM in detail (just click on cover page, below).

Cheers,
  Sparky

Performance Measurement Systems Cover

Filed Under: Healthcare Cost Containment, In the News · Tagged: , ,
Feb 15, 2013

Update: Hospital Readmissions

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Hospital Readmissions continues to be a driving topic of concern, debate and contention in the healthcare industry.  It also continues to be an area of great interest for potential partnerships between acute and post-acute care organizations.  Whether that interest is warranted based upon expected improvement in outcomes and cost reductions remains to be seen.

JAMA Study: Assessing Program Risk
On Tuesday of this week the Journal of the American Medical Association published a study, which looked at the relationship between risk-adjusted mortality and 30-day hospital readmissions.  The reasons for testing this relationship are because of concern that artificial incentives will drive behaviors with unintended consequences.

First, the concern is that hospitals may invest resources to lower readmissions for targeted conditions at the expense of quality care for other conditions.  Second, there is concern that patients may not cared for in an environment that is determined by clinical needs and requirements, but instead by financial considerations.  For those who believe these concern are overstated the results of this research will serve to reinforce their perception. 

Data was analyzed for Medicare beneficiaries admitted to hospitals between July 2005 and June 2008 with a heart attack, heart failure and pneumonia. These are the three conditions hospitals are now being penalized for 30-day readmissions under the Medicare Hospital Readmissions Reduction Program.  According to the study, “risk-standardized mortality rates and readmission rates were not associated for patients admitted with an acute myocardial infarction or pneumonia and were only weakly associated, within a certain range, for patients admitted with heart failure.”

RWJ Foundation: Revolving Door
Another report released this week, by the Robert Wood Johnson Foundation, found that hospitals and their partner relationships made little progress from 2008 to 2010 at reducing hospital readmissions for elderly patients.  Using new Medicare data from the Dartmouth Atlas Project, researchers found , “one in eight Medicare patients were readmitted to the hospital within 30 days of being released after surgery in 2010, while one in six patients returned to the hospital within a month of leaving the hospital after receiving medical care. Patients were not significantly less likely to be readmitted in 2010 than in 2008.”

The report also shares findings from interviews with patients and providers that sought to better understand the root causes of patient readmissions.  While some portion of those readmissions were either anticipated or necessary, there were also a significant number of readmissions that could primarily be attributed to non-clinical considerations, such as discharge planning, the individual’s support system, care coordination and the availability of primary care post-discharge.

So what to make of this? Research is continuing to support the hypothesis that cost savings are achievable by creating better alignment of care requirements and care settings without sacrificing quality.  The ways in which providers achieve such savings, however, are no clearer today than they were several years ago.  Also up for debate is whether the Hospital Readmissions Reduction Program is providing a meaningful incentive to drive innovation – or whether providers are reacting to market realities (likely some combination thereof).

What does not seem to be up for debate is the reality that proactive healthcare providers are pushing integrated delivery models that seek to facilitate better resource alignment.  Are you one of those organizations?

Cheers,
  Sparky

Filed Under: Hospital Readmissions, In the News · Tagged: , ,
Pick a Price, Any Price
Feb 11, 2013

Pick a Price, Any Price

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imageIn today’s edition of the Journal of the American Medical Association: Internal Medicine is a new research article that spotlights the challenges the average consumer faces in navigating the healthcare system.  Researches  Jaime Rosenthal, Xin Lu and Dr. Peter Cram share the results of their research on, Availability of Consumer Prices From US Hospitals for a Common Surgical Procedure.

They selected 20 of the nation’s top-ranked orthopedic hospitals, according to US News and World Report rankings, and using a secret shopper script (one of the author’s 62-year-old grandmother who did not have insurance but had considerable means to pay privately), requested from each the lowest complete bundled price (i.e., including hospital costs and physician fee) for an elective total hip arthroplasty (THA, or hip replacement).    They also contacted 102 non-top-ranked hospitals to request the same information.  What they found was considerable variability in the hospitals’ ability to respond to the request – and the range of prices quoted where responses were received. Each hospital was contacted up to 5 times.

The tables below (taken directly from the article) show the research results.  Table 1 indicates the number and percentage of hospitals unable to provide a single, bundled cost for a THA (55% of the top-ranked hospitals and 90% of the non-top-ranked hospitals).  Table 3 illustrates the significant in pricing. The range of prices for those top-ranked hospitals able to respond with a payment bundle was between $12,500 and $105,000.

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This research is hardly going to come as a surprise to those familiar with the economic realities of the US healthcare delivery system. It would have been more surprising if the results were reversed.  Healthcare cost accounting has for decades now been driven by incentives that seek to allocate costs for the purpose of maximizing third-party reimbursement and not for the purpose of understanding production costs per unit of service/care similar to what you would find in any manufacturing sector.

In September 2011 Robert Kaplan (of the Balanced Scorecard fame) and Michael Porter (Redefining Healthcare) wrote an article for Harvard Business Review, How to Solve the Cost Crisis in Healthcare.  While I challenge both the immediate practicality and scalability of their approach, it was a strong effort to advance the cost allocation discussion from the bottom up, instead of the top down as we are used to doing.

But here’s the key takeaway: Consumer-Driven Healthcare must play a critical role in the future of the US healthcare delivery system.  Debate surrounds what policies best encourage and promote CDH and to what extent consumers can truly be their own advocates in a system where even prices are hard to understand (or believe).

Regardless of policy, however, healthcare providers – and hospitals in particular – are realizing quickly how important it is in an era of hyper-competitiveness, higher costs and shrinking reimbursement to understand costs the way a Lean manufacturing concern understands costs.  We’re heading in the right direction.

Cheers,
  Sparky

Filed Under: Consumer-Driven Healthcare, Editorials & Opinions · Tagged: ,
Jan 16, 2013

Obama’s Opportunity Missed

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The human mind can be a very scary place.  There is where originates the electrochemical impulses that direct the body in carrying out some very heinous acts – such as the violence witnessed in Newtown, Connecticut just over one month ago today.

The mind can also be a fascinating study of unimaginable intricacy. In some infinitesimally small space wherein exists a hidden mystery explaining the difference between a physiological existence and conscious existence lies all of the energy necessary to create and destroy humanity (sort of like Einstein’s Special Theory applied to neural mass). Can you think of a more interesting basis upon which to initiate a metaphysical discussion over Creationism?

But alas, this isn’t Sparky’s Philosophy Shop.  As alluded to above, the topic of this post is Mental Health and the policy discussion it is receiving in lieu of the fatal connection between mental illness and gun violence.  Earlier today, President Obama announced a Plan to Protect our Children and our Communities by Reducing Gun Violence.  The plan outlines a number of initiatives – including 23 Gun Violence Reduction Executive Actions – that, taken together, is an attempt to put forth a reasonable agenda on gun control policy.

Of course, the cable news networks will be filled over the days ahead with talking heads who would have us believe we are now full bore on the doomsday expressway with the only two exits ahead being socialism or anarchy – and little room in between to continue having intelligent and constructive debate on how to find the most broadly acceptable policy balance between honoring and defending the second amendment while doing whatever is possible and pragmatic to prevent future tragedies like that at Sandy Hook Elementary School.

I hope rigorous and informed debate continues on the role mental illness plays in the tragedies that have brought us to this place.  And I desperately hope that debate will raise awareness of just how acute the challenges are we face as a society  resulting from mental and behavioral health issues.  If you have not already read Liza Long’s blog post, I am Adam Lonza’s Mother, it poignantly depicts the painful and helpless reality that mental illness can cause in a family.

I believe the President’s Plan on gun control offers some reasonable ideas, most of which probably won’t go very far in the House – partly because their source is the White House and partly because of understandable concerns by some House members that significant elements of their constituencies equate any discussion of gun “control” with an armed government takeover.  But the politics of gun control aside, the reality is that very often a mentally ill individual with an agenda can kill with or without a gun.  Getting guns out of the wrong hands does not address this challenge.

Or, to look at it another way – if I had to choose one investment over the other as having a greater long-term probability of reducing gun violence, I would choose investing in mental health over more gun controls.  Yet while mental health is addressed in the President’s plan, it seems like it was almost an afterthought.  The irony is disturbing because not only do policy issues stemming from mental illness and gun violence warrant a great deal more attention – but so do a host of other issues that recognize the growing awareness of the costs that poor mental health have on society – especially healthcare costs.

Although it is still a very long journey, every day science advances a step closer to understanding the raw dynamics of how the mind and body work in synthesis to have a dramatic impact on our health. Community and individual health and wellness initiatives are now focused on taking a holistic approach.  The connection between mental health and chronic disease and disability, particularly in the senior population (see my post on substance abuse among that population) offers promising opportunities to reduce disease incidence and increase the value of treatments.

To achieve the benefits of those opportunities, however, mental and behavioral health services must be socially and culturally viewed on a par with traditional medical/health services.  In defining essential health benefits that insurance companies must provide, the Affordable Care Act helps advance that initiative.  It falls short, however, of achieving true parity status for mental and behavioral health services.

The President attempted to address that discrepancy today through executive order by committing to finalize health parity regulations – and he also outlined the need to bolster mental health counseling and awareness through additional resources that will certainly not be forthcoming from a Congress (which includes the Senate) that cannot even agree to disagree for fear of reprisal (or am I getting that confused with accountability).  But I think the President missed a tremendous opportunity today to raise awareness and urgency on the critical role mental and behavioral health services must play in developing a healthcare delivery system that is truly committed to improving outcomes while reducing costs.

Cheers,
  Sparky

Filed Under: In the News, Mental Health Policy · Tagged: , , , ,
Jan 10, 2013

Such is Hope

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Among the numerous provisions included in the Taxpayer Relief Act of 2012 impacting healthcare organizations was the establishment of a new Commission on Long-Term Care.  Now we can rest easy that the demographic tidal wave threatening to destroy our society has (or at least can now) be averted.  Excuse the sarcasm, but it seems I’ve been here before, haven’t you?

While there are specific expectations and deliverables outlined in creating this new commission (see below), vesting authority in 15 individuals to investigate and discuss the problems and then suggest what are sure to be already well-documented ideas offered as solutions doesn’t quite seem to have the legislative teeth one would expect if this effort were to be any more seriously supported than was CLASS.  Assigning yet another committee to tackle the fiscal realities of our nation’s future long-term care challenges is a bit like – well, like the way our elected leaders addressed the Fiscal Cliff.

As I predicted in my post on December 26th, what played out during the first few days of January in Washington was largely just another political fiasco of kicking the can down the road once again.  And if you have had any experience in long-term care you most likely consider that par for the public policy course, so from that vantage I guess the new Commission should be taken in stride.

Section 642 of the Taxpayer Relief Act permanently eliminated the CLASS Act, which was included as Title VIII of the Affordable Care Act.  CLASS (Community Living Assistance Services and Supports) was developed as a voluntary, government-administered program that would have provided a basic lifetime benefit of at least $50 a day (indexed for inflation) in the event of prolonged physical illness, disability, or severe cognitive impairment (e.g., Alzheimer’s disease).  At its core, CLASS was an attempt to provide individual savings incentives to defray the potential future costs of long-term care where private long-term care insurance has largely failed as an aggregate solution.

As may be recalled, in October of 2011 HHS informed Congress that it was unable to ensure the program’s financial solvency over the 75-year period that was statutorily required.  Shortly thereafter (as in the time it takes between a green light and the New York cabbie behind you to honk his horn crossing 42nd Street during rush hour), Secretary Sebelius and the White House quickly abandoned whatever support there may have been.  And thus, death be to CLASS.

The sad financial irony of this, of course, was that CLASS comprised roughly one-third of the projected $210 billion in savings the ACA was to garner between 2013 and 2019.  Indeed, substantial projected savings were verified by the CBO during the 10-year scoring window, but that did not account for the program’s benefit obligations over a 75-year period (i.e., the program would not limit the benefit duration and all future payouts had to be funded entirely by premiums paid by individual participants).

So in what can only be seen as a standard course of appeasement, Section 643 of the Taxpayer Relief Act created the Commission on Long-Term Care.  The Commission’s objective is to, 

“…develop a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports, including elderly individuals, individuals with substantial cognitive or functional limitations, other individuals who require assistance to perform activities of daily living, and individuals desiring to plan for future long-term care needs”"

See, I told you you’d feel better.

The Commission is to consist of 15 members appointed not later than February 2nd by the President and majority and minority leadership from both Houses of Congress.  Further, it is to be comprised of individuals representing  consumers, older adults, individuals with cognitive or functional limitations, family caregivers, direct caregivers, private long-term insurance providers, employers, state insurance departments and State Medicaid agencies (all represented by 15 individuals mind you – what an eclectic group that will be).

In developing a plan to address future long-term care needs, the Commission is to provide recommendations that address where and how needed services and supports are currently provided for (or not) through existing governmental programs; improvements necessary in such programs to ensure future availability; and a variety of issues related to workforce adequacy, skills and capabilities (the most important element of this effort, in my opinion).

Then, no later than six months following appointment (i.e., early August of this year) the Commission is to provide (assuming it is in majority agreement) a comprehensive and detailed report, including any legislative or administrative action necessary to carry out its recommendations or proposals.  Subsequent to that (within 10 days) the “Commission bill” will be given to the President, the Vice President, the Speaker of the House of Representatives and the majority and minority Leaders of each House of Congress – and then subsequently introduced as proposed legislation into the House and Senate (by request).  The bill will also be made available to the general public at or around the same time.

I don’t know whether this new Commission holds out any greater promise of addressing the monumental challenges we face in trying to accommodate the future long-term care needs of an aging population without bankrupting this country.  My skepticism is not so thinly veiled in what I share above.

But I am more than willing to take the high road and give it my best shot.  I would like to think that readers stopping by the Policy Pub have a lot to offer in the way of input and ideas the Commission should consider.  To that end, I will do what I can in this space to track its formation and progress – and advise when and how those ideas might best be communicated collectively.

Until then, a quote from someone I know would have made a wonderful Pub patron:
”Such is hope, heaven’s own gift to struggling mortals, pervading, like some subtle essence from the skies, all things both good and bad – as universal as death, and more infectious than disease!”
  ~ Charles Dickens

Cheers,
  Sparky

Filed Under: Commission on Long-Term Care, In the News · Tagged: , , ,
Dec 11, 2012

Clinical Technology and Social ROI

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Welcome to another in an emerging series of Difficult Challenges in Healthcare brought to you today by demographic and economic realities – and the political nature of the US Healthcare Delivery System.  According to an annual industry survey conducted by HealthLeaders Magazine, roughly 21% of hospital CEOs surveyed indicated, “their organizations are cutting back on high-level, high-price technology for at least some service lines.”

This from the article, Scrutiny for Clinical Technology, wherein segments from interviews with those CEOs tells a story within a story: not just about the planned reduction in investment – but the means and methods being employed to determine such reductions.  As you might expect, capital investment decisions are being significantly impacted by exogenous considerations, such as the cost of capital (i.e., financing costs), uncertainty regarding future revenue streams and competing investment priorities driven by growing demand.

Free market advocates who believe the healthcare industry would produce greater access, quality and affordability if most of the current regulations could be taken away no doubt cringe at the prospect of investment decisions being made in reaction to conditions directly, or indirectly, caused by such regulations.  Conversely, advocates of a universal/single payer system will object to the prospect of speculative investments with unproven clinical value being made on the collateral of the revenue base they provide the industry through taxation.

Where does the balance lie between investing in new technologies that has the proven potential to save lives, or at least make those lives more productive and less painful – and investing in the infrastructure required to increase delivery capacity in anticipation of higher demand?  Demand that will be driven both by an aging population (natural), as well as implementation of the Affordable Care Act (through regulation).

Who should be making those decisions – and what are the criteria that should be used in weighing investment alternatives? Demand is going to grow substantially, so there must be investment in existing infrastructure.  At the same time, free cash flow is going to be strained to subsidize increased operating deficits caused by continued downward pressure on care reimbursement.  Caught there right in the middle will be thinner balance sheets forcing difficult tradeoffs for capital deployment.

According to the American Hospital Association, in 2010 approximately 56% of all care provided by hospitals was funded by Medicare and Medicaid.  In the post-acute/long-term care world the proportion of Medicare/Medicaid’s share is significantly more because of the higher prevalence of retirement age patients.  But the key takeaway is that a substantial amount of funding for healthcare delivery in the United States comes from public sources (i.e., society).

So shouldn’t society have a greater say in clinical technology investment decision making? If so, what would that look like? What do you think?

Cheers,
  Sparky

Filed Under: Clinical Technology, In the News · Tagged: ,
Nov 8, 2012

WARNING: Fiscal Cliff Ahead

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The topic of a fiscal cliff may be only indirectly related to Healthcare Reform – but that is sort of like saying Hurricane Sandy only indirectly impacted the entire Northeastern United States because it only directly hit the coast of New Jersey (and I make that observation having lost a 40-foot pine tree to Sandy – and I live in Northeast Ohio).

Metaphorically and practically, the fiscal cliff represents a whole lot more than just a short path to economic collapse of the U.S. economy – as if that prospect would need a heightened sense of awareness and urgency.  Want to up the ante further? How about if the U.S. economy collapses, then very likely so too does the rest of the world’s economies: global recession.  Got your attention now?

What is the Fiscal Cliff?
The fiscal cliff is a term used to describe the anticipated financial/budget situation beginning next month resulting from mandated tax increases and spending cuts.  The Bush tax cuts will expire on December 31st of this year, as will the Social Security payroll tax holiday.  At the same time, several tax policies that have historically reduced individual and business tax burdens are due to expire, while several new tax provisions of the Affordable Care Act will take effect in January 2013.

On the spending side, the Budget Control Act of 2011 requires automatic spending cuts to begin on January 2nd (the sequester cuts that you have probably read about); extended unemployment benefits are due to expire at year’s end; and – somewhat less than indirectly related to Healthcare Reform – rates at which Medicare pays physicians will decrease by nearly 30% on December 31st.

What Does it Mean?
In total, the Congressional Budget Office forecasts the impact of the fiscal cliff to be a net reduction of $607B to the federal deficit in FY 2013.  Reducing the deficit is generally perceived as a good thing, right?  “Not so fast, my friend,” as Lee Corso says on College Gameday.   Most economists share a grave concern that the sudden onset of these austerity measures would send the U.S. economy into a double-dip recession. 

But most economists and financial analysts also agree that simply legislating additional delays to these measures – the proverbial kicking the can down the road again – is not going to be in the best long-term interests of the economy and will only serve to increase the stakes and consequences of an eventual fiscal collapse.  And, as we know, those charged with addressing this conundrum – elected officials, particularly in the House – tend to be long-term thinkers for only a very short period of time following an election.   And thus the stage is set.

The Election Mandate: COMPROMISE
Within a very short span of time we will learn what the next two years are going to look like in Washington. With both political parties claiming an election mandate that was clearly given to neither let’s see how long the rhetorical posturing and positioning in the media will last – and whether both parties have finally come to realize that the only mandate they were given was to stop sparring like children vying for parental attention and accomplish something meaningful!

There have been early signs of a willingness to compromise.  Republican party strategists that want to seize the new leadership void left in the wake Tuesday’s election will look to distance themselves from Grover Norquist and the Tea Party.  They appear to be willing to trade tax increases for spending cuts (as in, compromise – the way things used to get done in Congress).

In maintaining a Republican stronghold of the House, I believe voters have signaled to Democrats that fiscal conservatism is a pervading belief of the electorate.  Most political observers I think agree that entitlement spending has to be at the center of any meaningful discussion on debt reduction.  And not just at the periphery based upon an assessment of how to minimize constituency impact.  Democrats are going to have to agree to spending cuts that won’t guarantee them automatic reelection.

How this plays out over the next month leading into the holiday recess will have tremendous ramifications in setting the tone and demeanor of the 113th Congress.  And that, in turn, will have tremendous ramifications on the implementation of the Affordable Care Act.  See – took me a while, but I brought it back home.

Cheers,
  Sparky

Filed Under: Economy, In the News · Tagged: ,
Aug 2, 2012

Can Big Data Rescue Long-Term Care Providers?

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Big Challenge
Yesterday, the Alliance for Quality Nursing Home Care announced the release of a new study from Avalere Health, which projects a $65 billion cumulative reduction in Medicare funding of skilled nursing facility reimbursement over the next ten years. The cuts are projected to result from implementation of the Affordable Care Act’s productivity adjustment ($35.3 billion); the regulatory case-mix adjustment enacted in FY 2010 ($17.3 billion); a CMS forecast error adjustment in FY 2011 ($3.2 billion); and the sequestration provision of the Budget Control Act ($9.8 billion).

Several news sources have picked up the Alliance’s press release and noted those states with the highest levels of projected annual cuts, e.g., Florida ($370 million), California ($350 million), Texas ($240 million), Illinois ($240 million), New York ($220 million), Pennsylvania ($200 million) and Ohio ($200 million).  I don’t think the aggregate comparisons are necessarily very useful because there are a host of other considerations that should be included to truly understand the relative impact of these reductions on individual SNF providers in each of these states.  What is quite meaningful, however, is the stark reality the industry is facing: the decade ahead will see tremendous operational and economic challenges as providers try to accommodate the demographic realities of increasing demand at the very same time less resources are available to cover costs.

Big Data to the Rescue?
In the July 2012 issue of HealthLeaders Magazine Philip Betbeze writes about Healthcare’s Big Data Problem.  Well, it’s a problem in so much as substantial obstacles still stand in the way of being able to use healthcare data more effectively – and more pointedly, to the real time benefit of operational, financial and clinical decision making.

If I could sum up that challenge it would be this: how do you take an unparalleled amount of disparate  data (e.g., demographic, operational, financial, clinical) and meld it together into a warehouse of information, such that the various elements of that information can be combined, compared and contrasted in ways that reflect and then empower the distinctive thought processes of clinicians, managers and executive leadership of healthcare organizations?

As the article points out, some very encouraging progress is being made to overcome this challenge, including something called, “natural language processing technology,” which integrates clinician notes from the patient’s EMR into the aforementioned information warehouse.  This could be a huge step forward because it has the potential to address a major obstacle sited by many clinicians: i.e., the ability to effectively capture and later be able to quickly recall and share ad hoc note taking that is such a critical component of a patient’s record.

When looking at the path from data to actionable knowledge it is important to remember that data becomes information only after it has been collected, aggregated and organized.  Information becomes knowledge through analysis.  Knowledge becomes wisdom through synthesis.  Wisdom is the foundation of economically beneficial decision making.  Unfortunately, effectively navigating the winding path from raw data to informed decision making has a lot more to do with human nature and individual personalities than it does with the ability to store and manipulate binary data bits.

The Big Idea
So what does this have to do with post-acute and long-term care? As many providers are beginning to realize – and some I dare say, even accept – the economic future of healthcare delivery is going be built upon value-based incentives and risks.  Ultimately, the distinctive difference between financial sustainability and going out of business will depend on the ability of direct service and care workers – whether that is the medical director or the food service aide – to make real-time decisions that allocate the organization’s resources in ways that add value and minimize risk.

Empowering those individuals with the requisite knowledge (see above) to make those decisions more quickly, more confidently and more in alignment with the organization’s value-based mission will create competitive advantages that lead to comparatively stronger financial performance under value-based contracting and integrated care delivery models.  This is a critically important consideration to have in mind when beginning to explore potential relationships with other healthcare providers in your market. 

It is likely that many if not most post-acute/long-term care providers will have to link into and utilize the Big Data solutions of more formidable acute care organizations.  In doing so, PA/LTC organizations must be in a well-informed position so that they can clearly articulate how such solutions must serve them and their direct service and care workers as a prerequisite to their adding value to an integrated delivery network.  It fundamentally has to be a core element of the negotiating process.

So my advice to the leadership of PA/LTC organizations is straight forward: if you don’t yet realize and understand the impact that emerging Big Data solutions will have on how well you are strategically positioned to compete in a value-driven world of healthcare delivery and integrated models of care – learn quickly.  Or, as an alternative, find someone you trust who does – and listen to them.

That’s what I think, anyway.  Would love to hear what you think!

Cheers,
  ~ Sparky

Filed Under: In the News, Information Technology · Tagged: , , ,
Jul 30, 2012

Medicaid Coverage of Nursing Care in Tennessee: Prudent, Rationing or Inevitable Reality?

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In an article published yesterday in the Washington Post, Guy Gugliotta writes about a new Medicaid policy in Tennessee, which seeks more efficient alignment between reimbursement and cost settings (my interpretation). 

This is very likely an important bellwether of state Medicaid policy that will be repeated in some fashion or other in other states, and it has unsurprisingly been met with a fair amount of controversy and concern.

Operating under a Section 1115 waiver from CMS, TennCare is the State of Tennessee’s Medicaid program, providing health care for 1.2 million with an annual budget of $8 billion. TennCare utilizes a managed care model that extends coverage to additional populations who would not otherwise be Medicaid eligible, while seeking to maintain a consistent level of quality care.  Tennessee has one of the oldest Medicaid managed care programs in the country, having begun on January 1, 1994. It is the only program in the nation to enroll the entire state Medicaid population in managed care.

On June 20th of this year TennCare released a new Nursing Facility Level of Care Guide outlining programmatic changes to its CHOICES program, which, “are designed to target Nursing Facility services to persons with higher acuity of need, while simultaneously making Home and Community Based Services more broadly available.”  This is the subject of the above-referenced article.

With this initiative TennCare seeks to increase the Nursing Facility Level of Care criteria necessary for Medicaid eligibility to a level it believes to be more in line with criteria used in other states while providing a less costly benefit for those individuals who will no longer qualify under the new criteria.  The new criteria are being applied prospectively, so no one currently qualifying for nursing care will be affected.

Under the new eligibility criteria three groups are established:
Group 1: Individuals eligible to receive care in a nursing
                  facility (NF) and requesting care in a NF;
Group 2: Individuals eligible to receive care in a NF but
                   requesting home and community-based services
                   (HCBS) in lieu of receiving care in a NF; and
Group 3: Individuals not eligible to receive care in a NF,
                   but “at risk” of NF placement and requesting
                   HCBS in the TennCare CHOICES program.

Group 3 is the population of concern and being debated from a policy perspective.  These are individuals that may have qualified for nursing care coverage under previous criteria and been eligible for HCBS cost coverage at a level commensurate with the cost of coverage in a NF.  Now the annual benefits available to this population will be $15,000.

From a consumer advocacy perspective the concern is that many individuals in Group 3 will not receive adequate services and care because the $15,000 benefit is not sufficient.  From a state policy perspective the concern is trying to allocate finite resources in a fashion where those individuals with the greatest need are afforded the ability to receive care that meets those needs.  In short, pub patrons, welcome to Healthcare Public Policy in the 21st Century.

From a pragmatic vantage, the initiative in Tennessee has very important ramifications for providers of community-based services and post-acute/long-term care.  This is an initiative that is certain to hasten the trend toward HCBS and away from care in institutional settings.  It is a threat to projected demand for long-term care in NF settings – and it is a threat to projected reimbursement levels available to HCBS providers under Medicaid.

It seems to me that any healthcare provider wishing to include the Medicaid population in its targeted market in the future look now at how to integrate BOTH NF-based care AND HCBS in its care continuum if it wishes to be economically viable and sustainable.  What do you think?

Cheers, 
~ Sparky

Filed Under: In the News, Medicaid · Tagged: , , , ,
Jul 19, 2012

Pub Chat # 3 ~ Marcia Tetterton

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This edition of Pub Chat coincides with the release of a new report published by Artower Advisory Services, which summarizes findings and observations from the recently completed Organizational Readiness Assessment Survey Instrument (ORASI©).  For more information, please click on the links below: 

   ORASI© Press Release         2012 ORASI© Summary Report

With the recent decision handed down by the Supreme Court regarding the constitutionality of the Patient Protection and Affordable Care Act, the probability has increased substantially that healthcare providers will have to implement significant changes in the way they do business. To assist providers of home healthcare and hospice in determining their organizational readiness for Healthcare Reform, the Council of State Home Care Associations commissioned the adaptation of an organizational readiness self-assessment survey developed by Artower Advisory Services for use by member agencies.

Over 940 participants from member agencies of 26 state associations took part in the survey during the period April 3, 2012 through July 3, 2012. The primary purpose of this effort was to help those agencies and the state associations to which they belong better understand the areas where attention, focus and training are necessary to help prepare home healthcare and hospice agencies be successful under Healthcare Reform.

You can listen to my interview with Marcia by clicking on Larry’s microphone, below:

~ Sparky

Filed Under: Home Healthcare & Hospice, In the News · Tagged: , , , , , , ,
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