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Monday, February 17, 2014

Up next: #HIMSS14

Twitter hashtag #HIMSS14.


Expect much exuberant talk next week at HIMSS14 about improving healthcare "value." OK, how about this?

Paul H. Keckley, Ph.D.

...Relative value is a term rooted in investing: it compares the attractiveness of one investment over others in terms of risk, liquidity, and return. In healthcare circles, it’s most prominently used to set Medicare reimbursement rates for physicians using the complicated Resource-based Relative Value Scale, and more recently in the Affordable Care Act’s Comparative Effectiveness Research effort wherein treatments will be compared based on efficacy and effectiveness.

Healthcare in the U.S. does not have a value problem. Like higher education, it does not need to demonstrate that our system outperforms others of the world in availing caregivers the latest technologies and life-saving heroics. We are quite proficient in declaring our value; we are quite challenged to assert and validate our relative value. And that’s what our market is asking…
  • What’s the value of health insurance? How do alternatives compare?
  • Why do prices for routine procedures and tests vary so widely across communities and regions, and how can what’s paid be compared to alternatives when outcomes and underlying costs are unrelated?
  • Why are there 1400 hospitals among the “Top 100”?
  • Why does each insurance plan’s small print defy side-by-side comparison against others?
  • Why do drugs with the same ingredients in the same amounts have different efficacy and different prices? And how do alternative remedies and over the counter options compare?
  • Why do academic medical centers cost dramatically more than community hospitals for routine treatments with similar results? Or routine preventive health when delivered by nurses or physicians?
  • How do end of life options compare versus expenditures and heroics that rob families and patients of resources and peace of mind?
  • What differentiates between an “essentially equivalent” device that enters a market overnight and a similar that required years to get approval?
  • Why does a nurse practitioner get paid half what a physician gets paid to diagnose a simple, uncomplicated medical problem? And what’s the difference in retail clinics operated by drugstores versus those sponsored by health systems?
  • What’s the relative balance of a high performing system’s high tech, high touch investments in care?
  • What are we getting for $9000 we spend on healthcare for every man, woman and child in the U.S. when outcomes of systems that spend significantly less rival ours?
And many others...
The relative value of the health care industry, like higher education, is an unfolding story. The industry is attracting new competitors that are unconstrained by the traditional ways we deliver and finance care. They break rules set by incumbents. They don’t worship sacred cows. They’re nimble and focused: they see the relative value issue opportunistically.

The U.S. healthcare industry does not have a value problem; it has a relative value problem. Others see it, perhaps better than we do. It’s a discussion we need. It requires straight talk.
Indeed. Myriad tough questions abound.

Medical Homes Part III: The True Cost

As the Patient Centered Medical Homes (PCMHs) train charges forward along with implementation of the Affordable Care Act, dollars are taken directly out of our health care system to certify providers in a method with no proven benefit (see Medical Homes Part II: The Depressing Data). And, while there is a marked shortage of primary care providers nationwide, funds that could be used toward providing the direct provision of, or access to, health care are instead devoted to accreditation, surveys and assessments.

As we saw in Medical Homes Part I: The Reality vs. The Hype, estimates show that 27,500 clinicians and 5,700 clinics have already been certified. The cost of certification, which involves purchasing survey tools, consultations and site visits, vary but are conservatively $550 per clinician and between $275-$2,200 per site. Nationwide, those costs for accreditation translate into $15.125 million to certify clinicians and $8.55 million for sites (using an estimated $1,500/site and not including the jump in participants from 7/13-1/14)...
[T]he price of being a PCMH becomes shockingly expensive, and represents a huge drain on our already struggling primary care system. The Commonwealth Fund’s summary of the operating costs of federally funded PCMH shows that the more regulatory PCMH rules are met, in general, the higher the operating cost. “A 10-point higher overall PCMH score was associated with a $2.26, or 4.6 percent, higher operating cost per patient per month,” which translates to “$508,207 annually for the average clinic in the study.” That amount could pay for 5 direct care nurses, or two full time primary care doctors, every year...
The data on the much-lauded PCMH approach, a cornerstone of ACA, shows that it is expensive, onerously bureaucratic, a drain on health care resources, especially for primary care providers, and a distraction from health care delivery. And, if cost savings ultimately materialize, they are likely to go to large health systems, and not to sustaining, much less expanding, primary care...
Jan poses some questions that heath care journalists should be asking regarding PCMH. Click the linked title for her Part III post. See also my February 11th post. wherein I first reported on her work on this issue.


  • Summarize the current status of the Regional Extension Centers, the provider adoption agencies created under ARRA
  • Describe and outline the future of Regional Extension Centers
  • Assess various value propositions Regional Extension Centers offer
Noon - 1 pm. Education Session 227. I will certainly cover this one. Session handout deck is here (pdf).

More to come...

1 comment:

  1. "Why does each insurance plan’s small print defy side-by-side comparison against others?"

    Why indeed, Paul, why indeed.

    That's why we whipped up CoverageFacts, a utility that shows how side-by-side - or overlay (some like that even better) comparisons can be readily performed, for cheap - like "free" cheap - provided you can lay your hands on a plan's Summary of Benefits and Coverage (ACA-mandated, don'tcha know), and can follow a few simple instructions:

    Why get tethered to the stuff health plans hand you, when - with the right tools - you can do your OWN comparisons?