Health Care Payment Reform

I enjoyed speaking with Robert Siciliano, chief executive officer of IDtheftsecurity.com, about the issue of medical identify theft.

Mr. Siciliano will speak at the upcoming World Healthcare Innovation and Technology Congress later this year.

Butcher: Information technology is in the process of transforming healthcare delivery. Patients are telling physicians about their symptoms over e-mail and checking their lab tests on line, to give just a couple of examples. What security issues should hospitals and physicians be thinking about?

Siciliano: First, it does start with your information technology administrators. They are responsible to protect you from the outside–from criminal hackers– and from the inside, if you happen to have a bad seed working within your organization. So, it all starts with the IT administrators. The physicians themselves, and the employees at all levels,  need to understand what their responsibilities are regarding safety or security and privacy policies, and those policies must be enforced at all times.

Butcher: If a patient’s personal healthcare information does end up being stolen from a hospital’s computer system, what happens? What is the hospital’s liability?

Siciliano: Over the past few years, there have been some major, major breaches of personal information at the government level, corporations, associations, healthcare, insurance companies – you name it. Just about every industry has been affected by a data breach at one level or another.

And as a result of this, state to state, they have passed data breach notification laws, which require corporations–entities whose information has been compromised–to disclose  that breach and to make sure that they notify those who have been affected by that breach, so that those people can then go out and take the necessary steps in getting protection, in getting some type of insurance, or credit monitoring, whatever the case may be, so that their identity is not further damaged as a result of that breach.

Unfortunately, criminal hackers have changed the motivation significantly over the past few years, and they are really targeting everyone. I mean, nobody is immune.

Butcher: It seems to me that protecting against identity theft ultimately is the individual’s responsibility. Do you see this changing in the future, and if so, how?

Siciliano: Unfortunately, it is absolutely the individual’s responsibility. While the organization may be responsible for doing their part to keep that data safe and secure, ultimately, if it is compromised, it is in the personal identifying information, including name, address, and especially social security number, that individuals are ultimately responsible for self-protection.

Responsibilities do boil down to managing your own personal information, and ultimately making sure that, even if they do get that data, that there’s not a whole lot they can do with it.

Butcher: What should health care executives know about medical identify theft?

Siciliano: First, I think it’s very important that everybody understand the extent of the problem, that the issue of  medical identity theft is becoming an ever bigger problem.

Identity thieves have been working at this for as much as 20 years now, and they’ve figured out just about every single way to compromise our information, and then turn that data into cash.

Over the past few years, they’ve shifted just a little bit and they’re paying even closer attention to our medical information. And throughout the country, I’m seeing more and more reports where you have people checking into hospitals, into clinics, and so forth, and they are posing as the individual who owns this particular social security number and/or insurance policy, and they’re either getting medical treatments under that person’s insurance, or they’re getting pharmaceuticals, prescription drugs, under that person’s medical insurance.

I had the chance to interview Dr. Paul Ginsburg, president of the Center for Studying Health System Change, as a preview to his presentation at the World Congress on Consumer Healthcare and Wellness in mid-September.

Dr. Ginsburg is an economist, nationally recognized for his work in health economics and health policy, especially healthcare market changes and cost trends. He will participate in a panel that addresses something everyone in health care is wondering about:  Will Consumers Be Effective Catalysts to Reform the U.S. Health System?

Butcher: You just released a study that says 56 percent of American adults – that’s more than 122 million people – sought information about a personal health concern from a source other than their doctor during 2007. Does this suggest that Americans are becoming more active participants in their healthcare decision making?

Ginsburg: Oh, yes, they certainly are. American’s interest in their health has increased a great deal, say, over the past decade. We just know how much more space newspapers and television is devoting to personal healthcare issues, and of course we have a lot of development on the internet as far as sites that people can go to seek this information.

Butcher:  Many health plans have developed consumer support tools – speaking of the internet – such as online information about hospital and physician quality, and calculators that help plan members estimate the cost of care. Are consumers using these tools, and if so, how are they using them?

Ginsburg: Well, I’ve spoken to the plans, and the plans are all eagerly developing these tools. So when you ask them, Are consumers using them? They don’t know.

My sense is that this is clearly the direction long-term where plans will play an increasingly valuable role as an information intermediary. But I think we’re at the very early stages of it, and I doubt that there’s a lot of use. I doubt that consumers are depending on it.

One of the chicken-and-the-egg problems is that I don’t think consumers are going to be very receptive to using price information until they have more confidence in understanding the quality of different providers… Consumers can actually act perversely in the sense of not having confidence in the quality information, and equating higher price with higher quality, and thus shifting to higher priced providers, even if they actually reduce their quality of care in the process.

Butcher:  Is America’s healthcare system organized in a way that allows consumers to be effective shoppers for healthcare services? And does the healthcare marketplace respond to consumer behavior in the same way that the retail marketplace works?

Ginsburg: No, the healthcare system is very far from accommodating consumer desires, to the degree they have them, of being effective shoppers. For most cases,  medical care isn’t standardized enough that you can just call up places and, knowing what you need,  find out what the price is and the indicators of quality. Because so much of health care involves diagnosis, checking into what something is going to cost (and learning about) a provider (requires the patient) to invest a lot of time and money to make that call.

If you go to the dentist, if you need an inlay put in, a dentist won’t give you that over the phone because they’re going to say it all depends on the details of your condition. So, you’re going to have to invest the time and money of visiting a dentist to get an estimate.

So, I don’t think the healthcare consumer will ever be able to be as good a shopper as in other areas.

I enjoyed interviewing Jack Needleman, PhD, an associate professor in the Department of Health Services at UCLA’s School of Public Health. His research focuses on the impact of changing markets and public policy on quality and access to care.

Dr. Needleman is currently leading the team evaluating the Robert Wood Johnson Foundation initiative, Transforming Care at the Bedside, which is intended to improve the quality, safety, patient-centeredness and efficiency of hospital medical surgical units by engaging front line staff and unit managers in process improvement. 
 

Butcher: There are so many quality measurement initiatives in health care currently underway. Where is this movement headed?

Needleman: That’s a big question. If you look at the types of measures that are used, they fall into four categories: outcome measures like deaths or falls, process measures like beta blockers on discharge, structural measures like staffing levels, and perception measures from surveys such as the adequacy of pain management or communication with physicians and nurses. There are several directions that I think we’re moving in with regard to all of these kinds of measures. One of them is to simply expand the number of measures which raises issues of burden.  A second issue that’s emerged is what balance should there be among the four categories? Related to that, whether to give prominence to outcome measures, which require adequate risk adjustment and all the problems involved in that, or process measures which require that you have competence that the process is in fact closely associated with outcomes that we care about. So that’s a second ongoing debate that is nowhere near resolved.  A third direction is to increasingly link payment to adequate performance on specific measures.  There’s a substantial debate going on over which measures to pay on and how strongly payment should be affected by the measures.

Butcher: You mentioned burden there. I know many hospitals complain already about the burden associated with supporting the various quality measurement initiatives they participate in.  Do you see any relief for providers on the horizon?

Needleman: I think there are two different kinds of burdens we need to think about. One is due to different organizations requiring different measures of the same or similar outcomes of processes.  That, I think, is an easier issue to address, and I do see conscious efforts among the different parties, the payers, the creditors and regulators, groups that endorse measures like the national quality forum, to move to some conversion over which version of the measure is required. So that burden, I think, is going to get easier.
 
The second kind of burden is over the number of measures and whether those that are required for external reporting are actually useful for internal management in quality improvement.  I think one of the reasons why providers perceive a burden there is they don’t perceive the measures they are being asked to deliver to the outside world particularly useful in their internal work.  That’s a more difficult issue to address. Relief may emerge to the extent that providers can make the case that they are using measurements internally to improve, and the measures most useful for this work should be those that are required for external reporting.

I was lucky to interview Donald W. Fisher,  president and CEO of the American Medical Group Association (AMGA), a trade association that represents medical groups, including some of the nation’s largest, most influential integrated health care delivery systems.  

AMGA’s membership includes medical groups that deliver health care to more than 50 million Americans in 42 states.

Butcher: What have we learned from the many pay for performance programs that are already in place?

Fisher: I think probably what we’ve learned from the get-go is that pay for performance just in and of itself does not go far enough, that if you build onto a current perverse reimbursement system incentives to kind of pay for assumed outcomes, you’re just going to get some small incremental improvements, but you’re never going to really get us to where we need to be with a new reimbursement system that really rewards quality and efficiency. Our current system which is built on volume and through-put simply will never get us there, so we need a whole new reimbursement system. I think that’s probably what we’ve learned the most is that it’s a great first step. It’s got us thinking about a new culture of payment that we need to change what we’re currently doing, but it’s not the final destination. It’s just a stop along our journey.

Butcher:  How soon do you see real payment reform coming, and do you foresee this as something that will happen gradually or are we getting ready for a rapid shift in the way care is paid for?

Fisher: I would like nothing more than to see a rapid shift to move completely away from the fee for service through-put model into something new. There’s a whole lot of proposals on the table that will get us there. I say that simply because we continue to pay for…the poorest quality gets paid the most in this country, and the less efficient providers get rewarded the same as the efficient providers. In fact, the efficient providers often get penalized for providing care efficiently and high quality. I’d prefer a rapid shift. My gut, though, says that it probably won’t happen that way. It will be incremental. There will be a lot of pilots. There will be testing of different payment mechanisms that will go on over the next three to five years, but we’ve got to have something by 2015 to 2018, because that’s when the babyboomers will be enrolled in Medicare in 2011, growing in significant numbers each year. They’re going to start to hit some chronic care conditions that are going to really drive our costs through the ceiling by 2015 to 2020.  I think it will be incremental. I’d love to see it be a rapid shift.

Butcher: Who do you think will initiate payment reform? Will this come from Medicare – I’m familiar with the MedPAC proposal – or private payers or perhaps providers themselves?

Fisher: When I look at this, I think that probably the drivers are going to be the employers and the providers themselves. I really don’t see Congress being the lead in creating health care reform. You kind of have a chicken/egg. You’ve got this large Medicare program which consumes most of the dollars in health care in this country, but yet you’ve got them governed by a Congress that has a very politicized way of looking at things. So it’s very difficult to get through the politics to do what’s really right for Medicare beneficiaries, and it’s really difficult to make changes in the system. My guess is it probably won’t come from Congress at the initial site. You’ll see a lot of things going on in the commercial side, a lot of experimentation pushed by providers as well as the employer community.

I was lucky to interview Stuart Guterman, senior program director of the Medicare’s Future program at the Commonwealth Fund. A couple of things that caught my attention:

Lola: How should value in health care be measured, and do we need more measures or fewer?

Guterman:  That’s really the crucial issue. There has been a lot of discussion about paying for outcomes, and certainly one can make a strong case that how the patients survives the health care, what the health status of the patient is in the long run is really the bottom line. But I think we are where we are on being able to pay for quality because we’ve developed a set of more reliable process measures, that is measures of how services are provided that are expected to lead to better outcomes. So we now can put together a list of things that are pretty much accepted as ways health care should be provided that will lead to better outcomes.

In terms of more measures or fewer, there are arguments for fewer measures because a long list of measures is thought to present the prospect of confusion. I think that actually if you have a longer list of measures and if you really are comprehensive in the list of measures for what you pay for, then you’re really transmitting a broader message that the objective is to improve quality and improve the value that you get for the health care dollar.  I think that’s really the message that needs to be sent in value-based purchasing, not doctors should do this or doctors should do that. Doctors should really do a broad range of things that lead to better health for their patients.

Lola: How should providers be rewarded for value?

Guterman:  There are different ways to approach rewarding for value. Certainly you want to reward providers that provide the best care.  There have been studies that found, however, that if you rely only those kinds of measures, then you end up basically making most of your bonus payments to providers who already are at the level that you’re looking for.  If you’re really trying to improve the system, then you need to provide incentives for providers that aren’t where you’d like them to be to get where you’d like them to be.

So I think at some point you need to be able to reward improvement over time, and I think you also, when we have more information and we’re able to be more confident about setting levels of acceptable care, that we might want to pay on that as well. I think a good pay for performance system will basically incorporate measures of all three types of good performance so that we can have rewards for the folks who do it right, incentives for the folks who aren’t quite there yet but are improving, and then some more explicit recognition of the fact that you really need to be at a certain level in order to be considered a top-notch provider.