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Click Here to view our October 2011 Newsletter:
Click Here to view our October 2011 Newsletter:
Conversation regarding ACOs and even healthcare reform itself is misplaced. The well established facts are (1) more people will receive health care, and (2) the cost of healthcare will come down. It does not matter whether the stimulus is a new law or just marketplace reaction. The fact is that a healthcare system whose players are incentivized to do more with more expensive stuff is not economically sustainable or socially tolerable.
Take a look at our evolving marketplace. What’s the single most distinctive feature in healthcare, aside from inactivity? Integration. Larger hospital systems and larger medical practices, typically single specialty. Good adaptation? Maybe. It is in the short run. Single specialty aggregation is purely defensive though. It allows groups to maintain market share and to resist price compression better. But how will that allow providers to do more with less? How will that stimulate more outcome based, financial risk based care? It doesn’t. It is well established that cost and quality management demands broad spectrum system awareness….ummmm primary care physicians. The adaptation of single specialty group integration is short term. How short? Who knows? But it is clearly not as sustainable as one whose preparation for change includes primary care capabilities.
And how do hospital-based physician alliances help physicians survive and thrive? They don’t unless they have a strong primary care base, and even then it is very questionable whether hospitals will be able to utilize their PCPs and specialists in a way that rewards outcomes based, financially smart behavior. Hospitals have always been sink holes in the landscape of healthcare costs, so why jump in? Physicians need to make sure that their affiliated hospital systems have clear plans and abilities (e.g. management and good physician billing and collection experience) to deliver outcomes at the right price. Studies, however, that indicate over sixty percent of Florida hospital admissions are unnecessary are consoling in a fee for service environment, but devastating in a capitated (or other risk based) one. Physicians have to make sure the ship they book passage on can sail a long way.
And they have to make sure they are part of the right team. What expertise is there in things like IT, financial management, clinical outcomes management, and risk based contracting? You’re gonna need that!
If one believes that healthcare costs are unsustainable (this guy does) and that our entire payment system is driving that result, then the need for new payment systems is clear. And the challenge, just in terms of thinking about healthcare differently, is enormous! How do you go to work and not think “I gotta do a lot, test a lot, do lots of procedures.” How do you begin to shift? Do you shift?
The compelling answer is “YES.” Why not act now, before any law (even one dumber than the one that passed a year ago) gets passed, before our society calls the issue a failure and politicians and our neighbors demand a single payer-type system? Isn’t there a huge opportunity RIGHT NOW? You betcha.
So where is it? It’s in management. The money is in the management. The data collectors, crunchers and implementers are the new gods in healthcare. Anyone who can collect data, show what makes clinical and financial sense and then implement it will be more sought after than conflict diamonds. Show one hospital how to live in that new system, where there are more patients, but less money available, and you retire rich. Show physicians and other healthcare business people the same thing and lead change. And since physicians are busy being physicians, except for a handful of physician entrepreneurs, they’re best bet is gonna be to find good partners in “business” who embrace change and see opportunity.
ACOs and other new acronyms have swamped the minds of physicians and healthcarebusiness people alike since the terms were coined. The still new healthcare reform law continues to worry many and challenge others to figure out ways to play the game and win. While we scurry around chasing the regs and the new words and government agencies, while politics keeps moving the ball and shaping the healthcare agenda, the most central issues in healthcare cost/quality debate are not even discussed. It’s as though policy makers and business is saying “Hey, if we keep throwing new regulations at them, maybe they’ll stop asking really tough questions we can’t answer.”
Back in the 80s, the state of Oregon enacted Medicaid reform that took the breath right out of the rest of the country. Remember? The idea that a state would not list ALL medical services to ALL Medicaid patients was considered to be cruel and impolitic at the time. And the national debate about (1) whether healthcare is a right of American citizens, and if so (2) what healthcare services are “in” and which are “out” has grown virtually silent.
Instead, it seems we have entered the area of political intransigence. It appears that getting and staying in political office requires as little change as possible. So, very little seems to be accomplished or even discussed.
So what are the “elephants in the room?” They are the issues of “how much” and “patient accountability.” Though it appears that the issue of whether we Americans are entitled to receive healthcare has been skirted, we are clearly missing any discussion on the issue of how much services. Oregon hit the issue head on, but nationally there appears to be no movement or even discussion of the issue. We don’t know who should get what. We just know we want to reduce the costs (ration).
Virtually every effort to reduce costs so far has involved the use of managed care organizations. The Florida Medicaid program pilot project that began in Broward County in 2006 has produced two clear results—reduced expenditures and huge criticism that managed care has reduced costs solely by reducing access and care itself. Managed care has become the “black hat” that politics won’t pick up. It’s ok for managed care to restrict access and care because it reduces costs, but it is politically impossible to directly address the issue of “how much.” We rely on managed care to do it for us, due to our political inability to tackle the issue, then blame the payers for their (wink wink) bad behavior. If managed care is profiting, it is only because they don’t mind profiting from our unwillingness to take responsibility for the issues they deal with on a daily basis—saying “no.”
The second elephant is the issue of patient accountability. There is none! What is the consequence of patient bad behavior? What consequence is there for refusal to exercise, quit smoking, etc.? None. We pay more. There isn’t a single provision in any federal law that punishes us for making expensive healthcare decisions or that rewards us for making cost saving healthcare decisions.
I liken it to having teenagers. Expectations with no consequences yields a predictable result of no change in behavior. Simple.
These are huge issues to tackle. So many different kinds of people, agendas and ways of seeing the issues. So, we don’t even try. Instead, we “hire” managed care to bear the burden of our failure to address and answer these issues. And we throw complex ideas like metrics and healthcare reform into the market, which only serves to distract us from addressing the root causes of our healthcare challenges.
While surgery centers generally follow the guidelines set forth in the federal Safe Harbor to the Anti Kickback Statute (AKS), not all do. In fact, there are some creative arrangements worth considering.
Some centers do not perform services which are compensated in any way by a state or federal healthcare program. As such, they don’t have to comply with the usual federal laws (e.g. AKS and Stark). That leaves the center to comply only with state regulation, which is usually far less restrictive than the federal laws. This works if the center intends, for instance, only to do work pursuant to Letters of Protection (LOP) or bodily injury suits. Though the pool of patients is very different in this type of center, the lid is nearly off when it comes to how creative the arrangements among the owners and referring physicians can be.
One of the more vexing challenges among all surgery centers is ensuring patient referrals by owner surgeons. While most centers will simply follow the federal Safe Harbor “one third test,” other centers go further and do things like: (1) making loans to owner surgeons, (2) creating “put” or “pull” periods during which time an investing physician can buy back out or be bought back out, and (3) even making exceptions to the restrictive covenants commonly contained in ASC documents.
Complying with the federal Safe Harbor applicable to surgery centers is clearly the most conservative way to go, in terms of regulatory compliance, since compliance means immunity from AKS violations. That said, Safe Harbor compliance is a little like horseshoes: coming close counts. The simple reason is that Safe Harbors are examples of conduct that complies with the AKS, but they are not all encompassing. There may be arrangements that do not violate the AKS which are simply not described in the Safe Harbors. Simply put, there are many other creative arrangements commonly employed in surgery centers. Since surgery center ownership and referral arrangements are hotly regulated, owners must be careful when considering veering off the straight course provided by federal law.
Lawyers are trained to document every conversation and communication in writing. In its dimmest light, it is simple CYA. More generously, putting things in writing ensures that everyone is on the same page and that time and faulty memory doesn’t distort things. It’s hard enough to communicate let alone remember communication! Doctors have to learn to put things in writing more.
Admittedly, putting things in writing takes time and can be viewed as hostile. Culturally, while lawyers are used to putting things in writing and don’t take that personally, the same may not be true in the world of healthcare. Still, documenting in writing conversations and agreements between people can go a long way to avoid liability and conflict.
Anti-trust laws are one of the greatest obstacles to healthcare reform. Here’s why? They limit the way competing physicians, hospitals and the like can do business together. Healthcare reform requires competing providers of all kinds to come together to deliver care in the most cost effective and quality enhancing way, and yet federal and state anti-trust restrictions frustrate nearly every effort to do so. Let’s take a quick peek behind the curtain.
The Sherman Act is a key federal law which is comprised of two sections: Section 1, prohibits concerted action which unreasonably restrains competition; and Section 2, generally prohibits monopolies.
For there to be a violation of Section 1, there must be an Aagreement@ and it must unreasonably restrain competition. For there to be an agreement, there must be more than one Aeconomic unit@ involved. That is, there can be no such agreement by one economic unit with itself. For example, generally speaking, shareholders in the same corporation are, for antitrust purposes, legally incapable of engaging in illegal concerted action together if they share substantial economic risk. They are generally considered to be part of a single economic unit. Conversely, members of two or more competing economic units, separate professional corporations, for example, may not agree to a whole host of things, because such agreements would violate one or more antitrust laws.
Some agreements are considered to be so egregious that they need not even restrain competition. The mere fact that such an agreement has occurred is enough, and there is no defense. Some of these Aper se@ violations of the antitrust laws include: agreement among two or more independent physicians to charge a particular amount for a particular service (Aprice fixing@); agreement among two or more independent physicians not to contract with a particular HMO (Aboycotting@); agreement among two or more independent physicians regarding their hours of operation, the services they will offer, or the geographic areas they will serve (Amarket allocation@). This is by no means a complete list or a complete description of the antitrust laws, but describes some types of activities that will violate antitrust laws.