December 2013 – HEALTHCARE BEAT

How Obamacare will creatively destroy primary care as we know it

What do you think about this statement: “With the exception of the very poor and the very old, people will now need to pay for primary care out of their own pocket. That’s what high deductibles mean.”

This is well worth the read …

As Obamacare is winding its way through a hellish bureaucratic labyrinth of its own creation, accompanied by cheers and boos from the blood thirsty spectator crowds, confusion, fear, trepidation, despair and exhilaration, are gripping America’s doctors all at once, because whatever else is accomplished in the next decade, medicine will never be the same.

At the confluence of cutting edge technology, great poverty and unimaginable fortunes, a new vision for the practice of medicine is beginning to emerge. Medicine was formed during times when sickness was never far from death. It was devised by old men who went to bed every night thinking that they may never awaken, and it was institutionalized by women who shunned life’s earthly pleasures. They understood the fears of old age, the loneliness of disease, and the comfort and serenity that come with putting your life in the hands of God, when all was said and done. They built houses for the poor and sick and downtrodden, with larger than life doctors as God’s emissaries, and pious sisters as angels of mercy.

Over the last century, science and technology changed hospitals from places of suffering, grief and death, to places of hope and new beginnings; from dreary spartan wards for the dying, to plush private suites for the soon to be healthy; from whispered footsteps in the twilight, to shiny instruments of mechanical shops; from final moaning and groaning, to humming of machines and laughing soundtracks of sitcoms punctuated by shrill alarms and flashing lights.

Dying in a hospital is now considered a failure of sorts, a preventable and costly mistake. There is no place for God in a modern hospital, and there is no place for special emissaries or angels. And when God vacates the premises, big business comes in to take His place.

Today’s technology driven medicine is shaped by young and invincible entrepreneurs, in search of fame and fortune. Masters of their own fate, bursting with self-quantified health, brilliantly educated in the intricacies of computerized logic, armed with stacks of data points, and carefully clad in black turtlenecks, hoodies, tee shirts and designer jeans, these modern knights of the business round table are engaging in the timeless quest of vanquishing death, or at the very least making it less expensive for the rest of us.

So where does all this leave primary care? Primary care is now considered routine care; routine, like changing oil on an automobile. Sticking a needle in your arm so you never, ever die from a plague is no longer a miracle, just like switching the lights on, or flushing the toilet is no longer deserving of thought. Miracles only happen in hospitals now, and not very often either. Primary care doctors are increasingly banned from hospitals, and asked to stick with routine care and leave the complex stuff to their betters. And primary care doctors agreed to this arrangement, mostly voluntarily, and explained (mostly to themselves) that routine care nowadays is pretty complex on its own, and arguably even more complex than the narrowly specialized interventions occurring in hospital settings. Maybe so, but routine complexity is what technology entrepreneurs eat for breakfast. Terminology is important.

When health care reformers say that primary care is foundational to reform, they mean routine care. They mean vaccines given on schedule, screenings done on time, lifestyles assessed and documented, educational materials handed out, and referrals coordinated to completion. They mean managing populations, stratifying risk, conducting outreach, dotting every BP and crossing every A1c.

Welcome to Lake Wobegon primary care where all patients come in correctly diagnosed and ready to be tracked. These things can be automated with the right technology and properly trained teams of workers, supervised by medical professionals providing spot checks and quality assurance. High tech and high deductibles will combine forces to turn routine primary care into the first medical service to become a retail product, with its Med Emporium, Osler 5th Avenue, and eventually, Hello Kitty Diabetes toolkits sold at Amazon.com. The question is no longer how to stop the train; the question is where primary care goes from here.

Let it go!

When primary care physicians became overworked and underpaid, something had to give. Inpatient care, arguably the high end portion of practicing at the top of one’s medical license, was snatched away by hospitals oblivious to their mission statement, and a good portion of complex care had to be offloaded to secondary care, just so primary care can keep up with demand for routine care.

Primary care became literally broken, and with it, the entire system downstream was broken too. In a fool’s errand type of strategy, routine primary care now includes tasks aimed at gluing primary care together again (e.g. transitions of care management, exchange of clinical information across facilities). Furthermore, routine care is being expanded to include things previously in the purview of public health (e.g. health literacy, physical activity, safe sex), stuff that grandma used to do for us (e.g. eat your string beans, keep your hands out of the cookie jar) and new retail oriented things (e.g. online shopping, consumer experience, values and preferences).

Today, in a plot twist worthy of Beckett himself, tech entrepreneurs in concert with non-physician workers are vying for the business at the low end of primary care. The new routine care will be catalogued, standardized, sterilized, automated, delegated, computerized, transformed and reformed. If you hang on to it, it will drag you down to wherever it’s going. Let it go! Let it go to your “team” (read, staff), or (gasp) let it go to Med Emporium.

Insurers, who could not be made to understand the importance of continuous, comprehensive primary care, seem perfectly willing to support the low skilled, electronic strings and duct tape of the new and expanded routine care. If you have an entrepreneurial gene in your DNA, hire staff, promote your office manager to chief quality/compliance officer, your receptionist to care coordination manger, the triage nurse to director of resource allocation, and delegate the bejeebers out of your daily work. Become the CEO, and get a secretary (a.k.a. scribe), so you never have to click another box, or type another embarrassingly misspelled sentence. Double your patient population, and let your NPs see the f/u for diaper rash, sports physicals, strains and sprains, the new wave of statin seekers, and everything that your director of resource allocation deems routine.

Grab the fluctuating 25% or so of patients that are most complex and be their comprehensivist. Hospitals are routinely inventing specialties, from hospitalists to intensivists to nocturnists, to further fragment continuity of care and increase profits. It’s time to learn from the experts.

Instead of waiting for the system’s other shoe to drop (on your head), proclaim yourself a specialist in the absolutely last remaining piece of what was once primary care. Grab it and hold onto it like dear life, because it will be nibbled on from below and from above incessantly. You will have to compete with the low prices of Med Emporium on one hand and with the natural expansionist tendencies of hospitals on the other. You will have to find a way to get paid for your new specialty services, and just like every other entrepreneur, you will have to take risk; the more complex the patients are, the bigger the risk and the larger the rewards.

Fortunately, the new health care law encourages precisely this type of advanced payment models. Go for it! Spend a leisurely hour with each patient needing comprehensive care, while your routine side of the business is humming along on its own. With proper planning, you can collect the customary and usual fees for your greatly expanded panel, plus the special fees for comprehensive care, plus any shared savings you can generate from keeping these select folks out of hospitals and emergency rooms. You’ll have to do a bit of marketing and engage in some creative contract negotiations (get a lawyer), but the sky may very well be the limit.

Don’t let it go!

What if you have no entrepreneurial markers in your DNA? What if the previous few paragraphs made you sick, depressed or really angry? Fortunately, Obamacare is on your side. For all the docs who argued that health insurance destroyed the doctor-patient relationship because it inserted itself in the payment process, and for all those who argued that insurance should not pay for routine oil changes, this is your lucky day, because it doesn’t anymore.

With the exception of the very poor and the very old, people will now need to pay for primary care out of their own pocket. That’s what high deductibles mean. A good portion of these people will become savvy shoppers and choose the technology enabled do-it-yourself method, or go to Med Emporium on an as-needed basis, but there will be more than enough patients (perhaps in higher income brackets), seeking quality over cheapness. The same folks that buy artisan bread and free range eggs from local farmers will bring their family to you, if you promise to provide hand-made wholesome and holistic primary care.

Direct primary care, whether concierge, or ideal or micro, or contracted by employers and even forward thinking insurers, will most likely explode in size during the next decade. There is a huge continuum of service definitions here, and you should be able to find your comfort zone. You can go back to being a country doctor in the midst of a bustling metropolis, and care for multiple generations at home, in clinic, at the hospital, nursing home and eventually hospice. You can dial back a little bit, or a lot, and contract with midsize employers to provide outpatient primary care. You can be a high-tech, electronic-everything doctor, or an old fashioned one, or perhaps a unique combination of both. Here too, the sky seems to be the limit.

So what’s next for primary care? It seems that for physicians, the door is closing on the treadmill now known as primary care practice, but countless windows are being opened simultaneously. You just have to look up and find yours. Whether you choose to stay in the system, step half way in and half way out, or do it your way all the way, there will always be a need for good doctors. Whether you choose to run the patient mills at Med Emporium, or run your own exquisite Osler 5th Avenue, or start the Hello Kitty Diabetes Company, or care for people slowly and thoroughly, one at a time, from start to finish, primary care may just be the best place to be in right now.

Margalit Gur-Arie is founder, BizMed. She blogs at On Healthcare Technology.

Medical Document Services of Kansas, LLC (MDS) is a Wichita, Kansas healthcare document service specializing in Medical Transcription, Revenue Cycle Management, AzaleaHealth EHR, and REAL-TIME solutions. We provide efficient, accurate, affordable quality services for hospitals, clinics, and facilities of all sizes. Call 866-777-7264 today, or visit our website for more information.

Meaningful Use 2 – pushed back one year

By Joseph Conn

Posted: December 6, 2013 – 3:30 pm ET

“The CMS is giving providers another year to show they’ve met the Stage 2 criteria of the federal government’s incentive program to encourage the adoption and meaningful use of electronic health records. That means the start of the next phase will be pushed back a year.”

Stage 2 will be extended through 2016 and Stage 3 won’t begin until at least fiscal 2017 for hospitals and calendar year 2017 for physicians and other eligible professionals who have by then completed at least two years at Stage 2.The latest extension parallels what the feds did with Stage 1, which was originally set to last two years but was lengthened by a year when it appeared the industry would be overstretched to build and get acclimated to systems capable of meeting the federal payment program’s more stringent Stage 2 criteria.”

“The goal of this change is twofold,” according to a CMS statement from Robert Tagalicod, director of the Office for E-Health Standards and Services at the CMS, and Dr. Jacob Reider, acting head of the Office of the National Coordinator for Health Information Technology at HHS. First, the statement said, its aim is “to allow CMS and ONC to focus efforts on the successful implementation of the enhanced patient engagement, interoperability and health information exchange requirements in Stage 2.” Second, they said, it’s “to utilize data from Stage 2 participation to information policy decisions for Stage 3.” READ MORE

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Clinical documentation has a direct impact on Revenue Cycle Management. As ICD-10 gets closer and closer, clinics, hospitals and physician offices will need to carefully examine their documentation. The long-term financial stability can be devastating if not done correctly. Physicians, coders and healthcare document specialist will need to combine efforts, but most importantly, have the right EHR in place. Comprehensive Cloud, Next-Generation, EHR is imperative moving forward! This year, 2013, has been quoted as being the “year to change EHR systems.” However, the predictions for 2014 do not look any better as dissatisfaction is on the rise for physicians and administrators. With today’s change in health care, it is more important than ever to have an EHR that meets your needs.

If your EHR is not meeting your needs, you are not alone. According to KLAS, 50% of ambulatory practices are looking to switch EHR systems.* Top reasons to make the change include an inability to achieve Meaningful Use, a lack of support, and unfulfilled promises from the vendor.

“The American Journal of Managed Care has now weighed in on the impact of electronic health records and health IT with a special issue devoted to research on the subject. The issue is highlighted by an introduction by guest editor and former National Coordinator for Health IT Farzad Mostashari, M.D., now a visiting fellow at the Brookings Institute. Mostashari notes that this latest round of health and payment reform is different because of the new tools and data that EHRs and other health IT offer.” Read More

Healthcare – everyone should have it but how to pay for it?

“Everyone should have access to healthcare, the question is how do we pay for it? The ACT has provisions to cut the costs of healthcare, but things like wellness and preventive care, which have the potential to reduce costs, will take years for a return on the investment.”

Are you looking for a practical explanation of the Affordable Care Act? Many of us are and I believe that Mr. James McGahee, Jr. has done a nice job in this article. Our friends at AzaleaHealth have many great articles on their blog.

(The Implementation of the ACT began October 1, 2013)
Authored by: James McGahee, Jr.

The Affordable Care Act requires all eligible Americans to be covered by health insurance. Simultaneously it provides a way for that to happen by providing incentives, penalties, and options to individuals, and small and large employers, including tax exempt employers. As of October 1, 2013, the ACT requires that people who do not have health insurance, regardless of reason, apply for health insurance coverage either through their employer, an insurance company, or through an exchange established by the Federal Government. Coverage for those who apply no later than December 15, 2013 and are approved, will begin January 1, 2014. Open enrollment is available through March 31,2014. Working individuals who do not have insurance and have not enrolled in a health plan by March 31, 2014 will be required to pay a 1% income tax on their adjusted gross income for 2014 and continuing as long as they are non-covered. An individual will be exempted from the 1% tax if their income is below 133% of the Federal Poverty Level which for 2013 is $15,282 for a single person and $31,322 for a family of four. In fact if the individual’s income is below the Federal Poverty Level they will qualify for Medicaid and receive healthcare coverage free.

For individuals who have health insurance coverage as of October 1, 2013, either through an individual policy or an employer’s policy, the Affordable Care Act recommends these individuals compare their plan to the plans being offered through the Governmental Exchanges to verify that their plan meets the essential benefits that are required by the Affordable Care Act. The essential benefits required by the ACT include, coverage for dependent children up to age 26, no denials for pre-existing conditions, no lifetime limit on coverage, no co-pay for prevention and wellness programs. The ACT also recommends that the covered individuals compare the cost of their plans to the costs of the Governmental Exchange Plans. If individuals are covered by Medicare or Medicaid they do not have to do anything. As stated above, if an individual does not have health insurance coverage and does not apply for coverage by March 31, 2014, his or her income, if above 133% of the Federal Poverty Level, will be subject to a 1% income tax penalty. Individuals considering applying for health coverage through the Governmental Exchanges need to compare the premiums, deductibles and co-pays to non-governmental plans and employer plans. The Governmental Exchanges offer 4 different plans. The least expensive plan is called the Bronze plan. It pays 60% of the individual’s healthcare costs. The second plan is called the Silver plan and it pays 70% of the individual’s healthcare costs. It is more expensive than the bronze plan. The third plan is called the Gold plan. It pays 80% of the covered individual’s healthcare costs and is more expensive than the first and second plan. The fourth plan is called the Platinum plan and it pays 90% of the individual’s healthcare costs. It the most expensive plan. The actual costs (premiums) for each of these plans depends on the ages of the covered individuals, the size of the family, the location where they live and their medical history. For Individuals making no more than 400% of the Federal Poverty levels, which for 2013 is $45,960 for an individual and $94,200 for a family of four, the premiums can not exceed 9.5% of their income. As an example, for a person earning $45,960 annually, their premium can not exceed $4336 per year. For an individual earning more than 400% of the annual Federal Poverty Level but less than $200,000 annually the premiums are market based. For Individuals making over $200,000 their premiums are also market based but they have to pay a .9% tax on income above $200,000. These Individuals will also be subject to a 3.8% tax on interest and dividend income, and on capital gains, including any gain exceeding $250,000 on the sale of their home. The .9% tax and the 3.8% tax will be assessed on individuals making over $200,000 beginning in 2013 and thereafter no matter what insurance plan they are covered by.

The Affordable Care Act also includes provisions for small employers and large employers. A small employer is defined as a business with less than fifty employees. A large employer is defined as a business with 50 or more full-time equivalent employees. Only a few provisions of the ACT apply to large employers. Beginning in 2015 large employers must provide affordable heath insurance that provides minimum value to all employees or pay a tax of $2,000 per employee (for all employees except the first 30). Large employers, beginning in 2015, must file a comprehensive report with the IRS verifying, first and foremost, that they are providing health insurance. The employer’s plan must meet the ACT required essential benefits including the affordable care cost formula which sets thresholds on how much the employer can charge the employee for premiums, deductibles, and co-pays. Large Employers can opt out of providing health insurance to their employees by allowing them to join a Governmental Exchange. The employer will have to pay the $2,000 per employee tax if they do so! There is no guarantee that the Exchange premiums will be less than the employer’s plan premiums.

As of October 1, 2013, small employers who provide health insurance to their employees, cover at least 50% their full-time employee’s premiums, and have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000 may be eligible for the Small Business Health Care Tax Credit. The credit for 2013 is 35% of premiums paid and is scheduled to increase to 50% in 2014, but in 2014, to qualify for the credit the small employer’s employees must be enrolled in a qualified health plan offered through a Small Business Health Options (SHOP) Exchange. If the small business employer qualifies for the tax credit and has no taxes due, the credit is refundable. Basically small business employers have an incentive to enroll their employees in a SHOP governmental plan by agreeing to pay half their premiums and receiving a tax credit of 50% of the costs of the premium. Between now and March 31, 2014 , the ACT focuses on getting people who do not have health insurance to get coverage. Those that do not, unless exempted by unemployment or Federal Poverty Levels, will pay a tax penalty. Individuals whose incomes are less than 4 times the Federal Poverty Levels will get subsidies or tax credits thus receiving a discounted premium. Those with incomes greater than 4 times the Poverty Levels up to $200,000 of income will pay market rate premiums. Individuals with income exceeding $200,000 will pay market rates plus an additional .9% employment tax, collected by the IRS.

Large business employers can access the Governmental Exchanges for their employees beginning the first of 2015. Large employers who opt to provide health insurance coverage to their employees through non-governmental markets have to be able to prove that their plans meet the Essential Benefits and Affordable Costs requirements of the ACT by the first of 2015 or else be prepared to receive significant penalties and taxes. Amendments and changes to the ACT will likely happen in 2014 but it is unlikely that the ACT will be overturned. The goals of the Affordable Care ACT are to provide health care insurance coverage to every eligible person in America while reducing the total health care costs. The Government is confident the Affordable Care Plans will help them achieve their goals. Looking at the average annual per person health care cost back in 2010 when the ACT was passed, it was $8402 per person in the U.S., according to the Kaiser Foundation. It is the number the Government will have to compare itself to in order to determine if the ACT has successfully reduced the cost of health care in the United States. Most employer plans historically have paid about 60% of the annual per person costs with the employee paying the other 40% through premiums, deductibles, and co-pays. Using these historical numbers, and assuming the average employer plan covers 100 employees, the combined health insurance costs for the employer and employee would be $8402 times 100. This plan would cost $840,200, with the employer paying $504,100 and the employees paying $336,080. If this employer decides to transfer his employees to a governmental plan and no longer offer a health care insurance benefit, the employer will be subject to an annual tax penalty of $2,000 per employee, resulting in a cost of $200,000 to the employer. In other words the bottom line of the employer’s business would increase $304,120. If it is the intent of the Government to hold the employee’s future insurance coverage costs comparable to the employee’s current costs the Government will have to subsidize the total costs of $840,200 minus the employer’s contribution off $200,000 and minus the employees’ costs of $336,080, to the tune of $304,120. Without the subsidy, the total health care costs per person of $8402 will have to be reduced 36%. Without this cost reduction, the Government has only four options. raise the employer’s contribution (penalty), raise the employee’s contribution (premiums, deductibles and co-pays), implement additional employment taxes on the employer and employees, or some combination of all of the above.

Everyone should have access to healthcare, the question is how do we pay for it? The ACT has provisions to cut the costs of healthcare, but things like wellness and preventive care, which have the potential to reduce costs, will take years for a return on the investment. Based on what is buried in the 2,700 page Law (the ACT) it is almost certain that all of the four options mentioned above have already been planned for.

About the Author
James McGahee, Jr. recently retired as Chief Executive Officer of South Georgia Medical Center, is a leader in the community. Mr. McGahee is a past member of the board for Valdosta-Lowndes County Chamber of Commerce, Healthcare Financial Management Association, American Institute of Certified Public Accountants, Georgia Hospital Association, and the American College of Healthcare Executives.

Medical Document Services of Kansas, LLC (MDS) is a Wichita, Kansas healthcare document service specializing in Medical Transcription, Revenue Cycle Management, EHR technology, and REAL-TIME solutions. We provide efficient, accurate, affordable quality services for hospitals, clinics, and facilities of all sizes. Call 866-777-7264 today, or visit our website for more information.