December 2010

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Bon Voyage

The Healthcare Economist will be taking a break from blogging.  I’ll be on vacation in Israel (Jerusalem and Tel-Aviv) and Egypt (Cairo) for two weeks.  Blogging will return in the new year.

Here is some information on each country:

Egypt

  • Hello: as-salam alaykum
  • Language: Arabic
  • Population: 80.5 million
  • GDP: $469 billion
  • GDP per capita: $5,900.
  • CIA World Factbook Summary: The regularity and richness of the annual Nile River flood, coupled with semi-isolation provided by deserts to the east and west, allowed for the development of one of the world’s great civilizations. A unified kingdom arose circa 3200 B.C., and a series of dynasties ruled in Egypt for the next three millennia. The last native dynasty fell to the Persians in 341 B.C., who in turn were replaced by the Greeks, Romans, and Byzantines. It was the Arabs who introduced Islam and the Arabic language in the 7th century and who ruled for the next six centuries. A local military caste, the Mamluks took control about 1250 and continued to govern after the conquest of Egypt by the Ottoman Turks in 1517. Following the completion of the Suez Canal in 1869, Egypt became an important world transportation hub, but also fell heavily into debt. Ostensibly to protect its investments, Britain seized control of Egypt’s government in 1882, but nominal allegiance to the Ottoman Empire continued until 1914. Partially independent from the UK in 1922, Egypt acquired full sovereignty with the overthrow of the British-backed monarchy in 1952. The completion of the Aswan High Dam in 1971 and the resultant Lake Nasser have altered the time-honored place of the Nile River in the agriculture and ecology of Egypt. A rapidly growing population (the largest in the Arab world), limited arable land, and dependence on the Nile all continue to overtax resources and stress society. The government has struggled to meet the demands of Egypt’s growing population through economic reform and massive investment in communications and physical infrastructure.

Israel

  • Hello: shalom
  • Language: Hebrew
  • Population: 7.3 million
  • GDP: $207 billion
  • GDP per capita: $28,600.
  • CIA World Factbook Summary:  Following World War II, the British withdrew from their mandate of Palestine, and the UN partitioned the area into Arab and Jewish states, an arrangement rejected by the Arabs. Subsequently, the Israelis defeated the Arabs in a series of wars without ending the deep tensions between the two sides. The territories Israel occupied since the 1967 war are not included in the Israel country profile, unless otherwise noted. On 25 April 1982, Israel withdrew from the Sinai pursuant to the 1979 Israel-Egypt Peace Treaty. In keeping with the framework established at the Madrid Conference in October 1991, bilateral negotiations were conducted between Israel and Palestinian representatives and Syria to achieve a permanent settlement. Israel and Palestinian officials signed on 13 September 1993 a Declaration of Principles (also known as the “Oslo Accords”) guiding an interim period of Palestinian self-rule. Outstanding territorial and other disputes with Jordan were resolved in the 26 October 1994 Israel-Jordan Treaty of Peace. In addition, on 25 May 2000, Israel withdrew unilaterally from southern Lebanon, which it had occupied since 1982. In April 2003, US President BUSH, working in conjunction with the EU, UN, and Russia – the “Quartet” – took the lead in laying out a roadmap to a final settlement of the conflict by 2005, based on reciprocal steps by the two parties leading to two states, Israel and a democratic Palestine. However, progress toward a permanent status agreement was undermined by Israeli-Palestinian violence between September 2003 and February 2005. In the summer of 2005, Israel unilaterally disengaged from the Gaza Strip, evacuating settlers and its military while retaining control over most points of entry into the Gaza Strip. The election of HAMAS to head the Palestinian Legislative Council froze relations between Israel and the Palestinian Authority (PA). Ehud OLMERT became prime minister in March 2006 and presided over a 34-day conflict with Hizballah in Lebanon in June-August 2006 and a 23-day conflict with HAMAS in the Gaza Strip during December 2008 and January 2009. OLMERT, who in June 2007 resumed talks with PA President Mahmoud ABBAS, resigned in September 2008. Prime Minister Binyamin NETANYAHU formed a coalition in March 2009 following a February 2009 general election. Direct talks launched in September 2010 collapsed following the expiration of Israel’s 10-month partial settlement construction moratorium in the West Bank. At the end of 2010, diplomatic initiatives are underway to revive negotiations through proximity talks.

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Today I will discuss the evolution of home health care measures over the past 15 years. The majority of the content comes from an article by Robert Rosati (2009).

Timeline

Here is a link to a TIMELINE that briefly summarizes the key developments in home health care quality measurements.

Risk Adjustment

From the early development of OASIS, consideration was given to developing case mix or risk-adjusted outcome measures. Patient outcomes are adjusted based on start or resumption of care assessment information. For example, a statistical model was developed to risk adjust the improvement in dressing the lower body based on whether the patient lives alone, receives assistance provided by a caregiver, level of functional status at the start of care, and the presence of other specific clinical conditions [ICD-9 codes]…All 41 outcomes that can be generated from OAASIS have separate risk adjustment models.” Despite the sophistication of the risk adjustment models, these mechanisms only explain variance from 10% to 27%.

Case Mix Adjustment

As part of the home health, prospective payments are adjusted based on the severity of the episodes. These episodes are adjusted for a number of factors. First, the adjustments take into account the clinical and functional status of the patient. Next the episodes are adjusted for service use. Service use before 2008 consisted of whether the patient is expected to receive physical or occupational therapy visits during a home health episode of care.

In 2008 there were major changes to the payment system, including the case mix adjustments. “In 2008, there was a major revision of Prospective Payment System (PPS) with adjustments for early versus late episodes if patients remain open for extended periods (adjustment applies for the third or later contiguous 60-day episodes for a patient) and the amount of therapy services provided to a patient.” The number of case mix adjustment categories changed from 80 before 2008 to 153 in 2008. Now, “the range in an average payment from the top categories (~$8,000) to the bottom (~$2,000) is substantial.”

Quality for Public Consumption

Although public reporting measures were a subset of the home health quality metrics CMS tracked through OASIS, there were some differences. For instance, the phrasing of the measures differed. “Improvement in ambulation and locomotion was changed to percentage of patients who get better at walking and moving around on the CMS Web site.”

The NQF’s also released a report describing its efforts to develop consensus standards for home health care.

Source:

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I like maps.  Here’s different versions of how different federal agencies create regions which aggregate U.S. states into regions.  These include:

  • Census Regions,
  • Standard Federal Regions, and
  • Federal Reserve Districts



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In 2006, 2.9 million Medicare beneficiaries received home health services.  The home health benefits provides Medicare enrollees to access to services such as: skilled nursing care;  physical, occupational, and speech therapy;  medical social work, and home health aide services.

Medicare pays home health agencies (HHA) based on 60-day episodes of care.  Each HHA receives a flat payment for all services rendered during this time period.  There are some adjustments to the 60 day payment however.  These adjustments include:

  • Adjustments for geographic differences in the price of labor using the Medicare Wage Index,
  • Case Mix Adjustment using Home Health Resource Groups (HHRGs)
  • Outlier payments  made for beneficiaries who incur unusually large costs
  • If fewer than 5 visits are delivered during a 60-day episode, the HHA is paid per visit by visit type, rather than by the episode payment method.
  • If a beneficiary switches home health providers during a 60 day episode, than the original HHA only receives only a partial payment of the 60-day prospective payment.

Today, I will briefly review how Medicare constructs the HHRG. A summary of the 5 components that make up the HIPPS code can be found here.

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The second edition of the Benefits Package carnival is up at See First Blog.  Swing by to see the best posts on employee benefits.

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As of 2009, only 9 percent of America’s hospitals were using even a basic form of electronic medical records (EHR) and as of 2008 only 13 percent of practicing doctors were doing so.  Yet one private health insurer has integrated EHR for hospitals, physicians, outpatient and other services.  I am of course talking about Kaiser Permanente.

Today I will review the book Connected for Health, which details how Kaiser implemented EHR in their system.  The book is not an objective evaluation in that it is written by the people who participated in Kaiser EHR implementation.  The lack of objectivity, however, is more than offset by the “insider” point of view the authors offer.  This is not a book for people interested in a fun read or general health policy.  However, if you are interested in implementing EHR in your organization, this book will likely prove invaluable.

Kaiser Overview

Kaiser Permanente is an enormous organization. It employs 14,000 physicians, 45,000 nurses, and thousands of other clinicians and staff.  It has nine regions: Northern California, Southern California, Colorado (Denver), Colorado (Southern), Georgia, Hawaii, DC/Maryland/Virginia, Ohio, Oregon/Washington.

Kaiser EHR Functionality

Kaiser’s electronic health records system, KP HealthConnect, is based primary on software from Epic Systems of Wisconsin. The KPHealthConect system has the following functionalities:

  • A personal health record,
  • Outpatient practice management
  • Outpatient clinicals (e.g., physician order entry, clinical documentation),
  • Inpatient billing,
  • Inpatient pharmacy,
  • Inpatient administrative systems,
  • Inpatient clinicals,
  • Non-Epic Systems and Pre-existing applications that integrate with KPHealth Connect.

Of particular interest is the personal health record.  Patients can view most parts of their medical record such as lab results, immunizations, past office visits, prescriptions, and more.  Patients can send secure messages to providers and view, schedule or cancel appointments.  Members can also view information on health risk assessments, drug encyclopedias, and use health insurance management tools.

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“As the number of employees grows, the amount of profit per employee shrinks…The graph reflects the bleak reality of corporate growth, in which efficiencies of scale are almost always outweighed by the burdens of bureaucracy.”

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California is in the midst of a fiscal crisis.  The New York Times reports that the state now faces a $28.1 billion shortfall in revenue over the next 18 months.  For California workers, things are also bleak.  Unemployment has reached 12% and the cost of health insurance premiums increased by 8.1%.

The California Health Care Foundation (CHCF) provides additional information on sorry state of health insurance in California in their 2010 Employer Health Benefits Survey.  Some highlights from the survey include the following.

  • Since 2002, premiums have increased 134.4 percent, more than five times the 25.4 percent rise in California’s overall inflation rate.
  • The proportion of employers offering coverage is similar to last year. However, firms that went out of business are not captured in this survey. according to the U.S. Bureau of Labor Statistics (BLS), California lost nearly 210,000 jobs from July 2009 to July 2010.
  • Single-coverage premiums in California were $5,463 annually, significantly more than the national average of $5,049. Premiums for family coverage were $14,396.
  • California workers contributed $725 annually for single coverage in 2010, and $3,632 for family coverage. The contribution for single coverage is less than for workers nationally ($899), but increased from 12 percent of the premium in 2009 to 15 percent this year.
  • Enrollment in plans with a deductible of $1,000 or more for single coverage has increased significantly for California workers in small firms, now at 27 percent, up from 7 percent in 2006.
  • Twenty-eight percent of California firms either reduced benefits or increased cost sharing for employees as a result of the economic downturn in 2010, up considerably from the 15 percent who did so in 2009.
  • Cost sharing may continue to increase for California workers. Just under half of large firms (200 or more workers) are “very” or “somewhat” likely to increase the amount workers pay for coinsurance or copayments in the next year.  Sixty-eight percent are “very” or “somewhat” likely to raise the amount workers pay toward premiums.
  • Four percent of California firms indicated they are “very likely” to drop coverage entirely in the next year. in 2008, only 1 percent of firms said this.

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