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March 24, 2014 Gored Oxen

March 24, 2014

Gored Oxen

I don’t know how it came to be that oxen get gored as often as they do. I have never seen the goring of an ox, but the word picture is clear enough for me to get that is probably a real mess. And not a good day for the ox.

You don’t have to be an economist to know that when people talk about ‘bending the cost curve’ in healthcare that they mean cutting the cost, or at least slowing the rate of increase. You also don’t need to know Milton Friedman from Adam Smith to know that our country needs to spend less on healthcare.

But, keep in mind that every one of those $2.7 trillion (the CMS tally for 2011) that we spend on healthcare is someone’s revenue. Yours and mine, just to name two.

‘Bending the cost curve’ is necessary for the US economy.

‘Bending the cost curve’ is easier to say on the Sunday morning talk shows than, ‘Hey, we’re going to destroy the revenue and income for a whole lot of companies and people.’

But as Billy Shakespeare said, ‘Ox goring by any other name still results in a dead ox.’

OK, that is a bad translation of the Bard’s quote about roses being roses no matter what you call them, but you get the point.

March 24, 2014 Punching Back

March 24, 2014

Punching Back

In an earlier post (here), we outlined how the cost of physician care can go up when a practice is purchased by a hospital system. Long have we wondered when Washington would stand up and challenge this concept. Once again, it is proven that looking to Washington to take the lead is often a bad idea.

Instead, watch the private market.

Now Highmark, the BCBS of Pennsylvania and the largest commercial payer in that state, has said that starting April 1, they simply will not pay the facility fee tacked onto claims from hospital-employed physician practices. Period.

Company officials say this will amount to $200 million in annual savings. Even for a payer with tall shiny buildings, that is a big enough number to be interesting.

Stepping back, it makes you question what took so long.

UPMC, one of the largest health systems in the country, is crying foul. In case you did not know, the P in UPMC stands for Pittsburgh, which means the Highmark decision is not theoretical for them.

UPMC also employs a boatload of physicians. They said they expect to be paid, per their contract, which includes the hospital facility fee that gets added to their physician claims.

Highmark is big and has lawyers. UPMC is big and has lawyers as well. The patients are small, so here’s hoping they don’t get cold-cocked by a stray left hook in this brawl, but I’d suggest they prepare to duck.
There is going to be a fight, so grab some popcorn and pull up a chair. Fortunately, you don’t have to shell out $49 for the pay-per-view to watch this one.

March 24, 2014 Monday Morning Quarterbacking

March 24, 2014

Monday Morning Quarterbacking

This is the second Monday post in recent weeks that pokes a bit at our friends at CMS. I promise that I don’t spend my entire weekends thinking about those folks. Sometimes, things just happen. And yes, I need a hobby or two.

Here comes news from the General Accounting Office, the government’s official scorekeeper, that its audit of the HITECH Act’s Meaningful Use program reveals that something important might be missing: a strategy to use all of this technology to actually improve healthcare.

Seems that would have been a good thing to have in place BEFORE the government doled out north of $20 billion.

I don’t make this stuff up.

The GAO observes that while the MU guidelines that qualify docs and hospitals for subsidies measure the adoption and use of EMRs, there really are no measures that assess actual outcomes such as healthcare quality, or cost savings, or patient safety. Nor is there a plan in place to measure actual outcomes.

The grand plan seems to be something of a logical leap of faith.

Step One: Providers digitize their data and EMR sales reps win trips to Hawaii.

Step Two: Providers can email patient summaries to one another, and track whether or not people smoke and if their body mass index is changing.

Step Three: Good stuff will then just happen.

That’s it.

Maybe, said the GAO, maybe.

But wouldn’t it be a better idea to have an actual plan?

March 17, 2014 Too Hard

March 17, 2014

Too Hard

Every time I read these numbers, my head hurts.

The MGMA says as many as 65% of practices don't appeal denied claims because it is too much of a hassle. The AMA says this and other creaky billing practices cost the average doc almost $15,000 a year in lost revenue.

Granted, this is our business and this is one of the problems that we solve. Yes, I am a bit of the fox in the hen house here, but with that full disclosure out front, let me walk through some simple math here. And by simple, I mean big, round numbers because I have a degree in psychology, not calculus.

Let's assume a practice collects $500,000 per physician per year.

Let's assume it has a 50% overhead rate because, again, I am not a math major.

That means the physician gets paid $250,000 and gets to spend something closer to $200,000 after taxes.

Guess where that lost $15k comes from?

Not the staff, not the landlord, not the electric company.

To make that a little more painful, there is 'overhead' at home just like there is at the office. You pay the mortgage, feed the kids, buy tires for the car, and fix the occasional broken washer and dryer. Whatever is left is much more fun to spend, right?

That leaked $15k is not just a 6% reduction in your W2 income, or 7.5% of your net take home, but it might be a really big slice of your fun money.

Sorry to rain on your day, but you are getting hammered on all fronts financially. Continuing to leave money on the table because working denials is too hard is just ludicrous.

March 17, 2014 Jumping Garden Hoses

March 17, 2014

Jumping Garden Hoses

When my younger brother was about four years old, his great athletic feat was to back up about twenty yards, come running full speed across the yard, and leap over the garden hose. Mind you, it was not stretched between two trees to create a high jump or even a hurdle. It was laying in the grass. Like, really flat.

However, to hear my brother's reaction, he was the second coming of Dick Fosbury (hear the sound of youngsters tapping on Google?). The fact that he just leaped, oh, three inches, was not the point. That he cleared it was.

Sort of like most physician EMR companies and the Stage One Meaningful Use standards. Man, did the press releases fly.

We cleared the garden hose. Buy our stuff because, look, we have a sheet of paper that says we cleared the garden hose.

Now the hose is being lifted more than a little bit in MU2. It was not a surprise that as many as one third of the Stage One approved EMR vendors will not invest to get their product Stage Two certified.

Unfortunately, some practices that bought low end solutions that have begun sending the dreaded letters that say they will not be able to get their product Stage 2 certified. Those practices are facing the fact that their initial investment is flushed and they have to start over.

Don't forget, the Stage 3 height will be even higher.

Don't be too impressed with garden hose jumpers.

March 17, 2014 The Stimulus Package that Worked

March 17, 2014

The Stimulus Package that Worked

Good news. There are construction cranes around my hometown of Denver. Turns out these gangly creatures that temporarily puncture the skyline are popping up in other cities as well.

That is a good sign, right?

It also turns out that a very large portion of these projects involve building new hospital facilities.

One large health system executive said much of the building going on was in response to the Affordable Care Act.

And you thought Washington did not know how to stimulate the economy?

Well, of course it is a little tricky to figure out how this lowers the cost of healthcare, but let’s not get bogged down in silly details.