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Are Limited Networks Necessary to Reduce Health Care Costs?

Posted on September 10, 2014 I Written By

Andy Oram is an editor at O'Reilly Media, a highly respected book publisher and technology information provider. An employee of the company since 1992, Andy currently specializes in open source, software engineering, and health IT, but his editorial output has ranged from a legal guide covering intellectual property to a graphic novel about teenage hackers. His articles have appeared often on EMR & EHR and other blogs in the health IT space. Andy also writes often for O'Reilly's Radar site (http://radar.oreilly.com/) and other publications on policy issues related to the Internet and on trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business. Conferences where he has presented talks include O'Reilly's Open Source Convention, FISL (Brazil), FOSDEM, and DebConf.

Among the dirty words most hated by health care consumers–such as “capitation” and “insufficient medical necessity”–a special anxiety infuses the term “out-of-network.” Everybody harbors the fear that the world-famous specialist who can provide a miracle cure for a rare disease he or she may unexpectedly suffer from will be unavailable due to insurance limitations. So it’s worth asking whether limited networks save money, and whether they improve or degrade health care.
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Could Population Health Be Considered Discrimination?

Posted on August 19, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Long time reader of my site, Lou Galterio with the SunCoast RHIO, sent me a really great email with a fascinating question:

Are only the big hospitals who can afford the very expensive analytics pop health programs going to be allowed to play because only they can afford to and what does that do to the small hospital and clinic market?

I think this is a really challenging question. Let’s assume for a moment that population health programs are indeed a great way to improve the healthcare we provide a patient and also are an effective way to lower the cost of healthcare. Unfortunately, Lou is right that many of these population health programs require a big investment in technology and processes to make them a reality. Does that mean that as these population health programs progress, that by their nature these programs discriminate against the smaller hospitals who don’t have the money to invest in such programs?

I think the simple answer is that it depends. We’re quickly moving to a reimbursement model (ACOs) which I consider to be a form of population health management. Depending on how those programs evolve it could make it almost impossible for the small hospital or small practice to survive. Although, the laws could take this into account and make room for the smaller hospitals. Plus, most smaller hospitals and healthcare organizations can see this coming and realize that they need to align themselves to survive.

The other side of the discrimination coin comes when you start talking about the patient populations that organizations want to include as one of their “covered lives.” When the government talks about population health, they mean the entire population. When you start paying organizations based on the health of their patient population, it changes the dynamic of who you want to include in your patient population. Another possible opportunity for discrimination.

Certainly there are ways to avoid this discrimination. However, if we’re not thoughtful in our approach to how we design these population health and ACO programs, we could run into these problems. The first step is to realize the potential issues. Now, hopefully we can think about them going forward.

Hospital M&A Cost Boosted Significantly By Health IT Integration

Posted on August 18, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @annezieger on Twitter.

Most of the time, hospital M&A is sold as an exercise in saving money by reducing overhead and leveraging shared strengths. But new data from PricewaterhouseCoopers suggests that IT integration costs can undercut that goal substantially. (It also makes one wonder how ACOs can afford to merge their health IT infrastructure well enough to share risk, but that’s a story for another day.)

In any event, the cost of integrating the IT systems of hospitals that merge can add up to 2% to the annual operating costs of the facilities during the integration period, according to PricewaterhouseCoopers. That figure, which comes to $70,000 to $100,000 per bed over three to five years, is enough to reduce or even completely negate benefits of doing some deals. And it clearly forces merging hospitals to think through their respective IT strategies far more thoroughly than they might anticipated.

As if that stat isn’t bad enough, other experts feel that PwC is understating the case. According to Dwayne Gunter, president of Parallon Technology Solutions — who spoke to Hospitals & Health Networks magazine — IT integration costs can be much higher than those predicted by PwC’s estimate. “I think 2% being very generous,” Gunter told the magazine, “For example, if the purchased hospital’s IT infrastructure is in bad shape, the expense of replacing it will raise costs significantly.”

Of course, hospitals have always struggled to integrate systems when they merge, but as PwC research notes, there’s a lot more integrate these days, including not only core clinical and business operating systems but also EMRs, population health management tools and data analytics. (Given be extremely shaky state of cybersecurity in hospitals these days, merging partners had best feel out each others’ security systems very thoroughly as well, which obviously adds additional expenses.) And what if the merging hospitals use different enterprise EMR systems? Do you rip and replace, integrate and pray, or do some mix of the above?

On top of all that, working hospital systems have to make sure they have enough IT staffers available, or can contract with enough, to do a good job of the integration process. Given that in many hospitals, IT leaders barely have enough staff members to get the minimum done, the merger partners are likely costly consultants if they want to finish the process for the next millennium.

My best guess is that many mergers have failed to take this massive expense into account. The aftermath has got to be pretty ugly.

Population Health Polls

Posted on August 11, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I was thinking about population health today. It’s become a hot topic of discussion now that a lot more healthcare data is available for population health management thanks to EHR adoption. Although, in many ways, the various value based reimbursement and ACO programs are a form of population health. I guess, for me I classify all of these efforts to improve the health of a population as population health.

I just wonder how many organizations are really working on these types of solutions and how much of the population health is just talk. Let’s find out in the poll below.

I’ll be interested to hear how organizations are approaching population health. Also, let’s do another poll to see how much people will be working on population health in the future.

I’d love to hear more details to your responses in the comments. If you are working on population health, what programs are you doing and what IT solutions are you using to support it?

Farzad Mostashari Launches New Startup Company Aledade – A Physician-Led ACO in a Box

Posted on June 18, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I know when I first heard that Farzad Mostashari landed at the Brookings Institution after leaving his position as National Coordinator, I couldn’t imagine it being Farzad’s long time home. However, it was a really smart short term landing spot that would give him the opportunity to prepare for his next adventure.

We just learned that Farzad is now entering the startup world with the launch of a new company called Aledade which partners with primary care doctors to form ACOs. In a blog post introducing the startup, Farzad said “The world of start-ups may not be the usual path for those leaving a senior federal post, but it’s the right decision.” I’m not sure the career path of former senior federal employees, but I think the startup world is going to fit Farzad really well. Plus, who would you rather have leading your ACO efforts than Farzad?

Maybe we should have been able to predict this move if we’d listened closely to Neil Versel’s interview with Farzad Mostashari at HIMSS. As Neil comments, “Always the champion of the little guy in healthcare, Mostashari also brought up the notion of physician-led ACOs, or, as he called it, the “Davids going up against the Goliaths.””

Aledade has received $4.5 million in investment from Venrock and the company is targeting four areas of the country: Delaware, Arkansas, Maryland and the metro New York area (not surprising considering Farzad’s past connection to NYC).

What’s also interesting is that Aledade is building their financial model on a performance model. They aren’t requiring any up-front cost to physicians and instead are opting to make money when the physicians realize savings. I’ll be really interested to see how this works out in practice. Many of the savings that ACOs have realized could be considered fuzzy math. Although, maybe Aledade will just take a percentage of the additional ACO payments the physician ACO receives.

I’ll be interested to see what technologies come out of Aledade. I can’t imagine them launching a full EHR and so they’ll have to integrate whatever they do with dozens of EHR companies. This will be a tremendous challenge. Will they build the technology in house or just partner with an outside vendor?

I’ve heard Farzad say that the move towards value based reimbursement was happening quicker than most of us realize and that the fee for service and value based reimbursement models can’t happen at the same time. The launch of Aledade is a great example that he’s not just paying lip service, but he’s fully committed to this change.

How Technological Backwardness Wastes Health Care Money

Posted on May 23, 2014 I Written By

The following is a guest blog post by Andy Oram, writer and editor at O’Reilly Media.

A rather disconcerting report on the state of health care payments has been released by InstaMed, a billing network that connects payers, health care providers, patients, and third-party billing services. (You can download the report after just filling out a few fields or watch some of the report details in this video.)

I think we all know that the adoption of computing technology to coordinate treatment and payments in health care lags behind most industries. This report reveals the progress it has made along with the substantial distance it has yet to go–and the effects of the lag on all of us. Patients and doctors are all suffering financially by a continued reliance on paper.

We should be charitable: the field is making progress. Half of insurers conform (p. 11) to meeting federally mandated standards covering the complex dance by which doctors request payments, insurers report back the status of the request (Electronic Remittance Advice), sometimes repeatedly over many months, and–when the doctor wins the jackpot and gets the procedure approved–insurers remit payment (Electronic Funds Transfer). Moreover, when the survey was conducted in 2013, 86 percent of health providers accepted payments by credit card or similar mechanisms (p. 9), although fewer than half of their payments actually come in that way (p. 5).

Huge amounts of time and effort are still being wasted, though. Even as patient responsibility for payment rises–because plans have been increasing copays and deductibles–there is still a tremendous lack of transparency. “In 2013, 72 percent of consumers said that they did not know their payment responsibility during a provider visit.” (p. 14) Perhaps, even worse, “42 percent of providers said that they did not know patient responsibility during the patient visit.” (p. 7)

What is the result? Providers get fewer payments at the time of visit, and have to send multiple bills to the patient by snail mail, and often even make phone calls (p. 17). About one third of the time, providers couldn’t collect payment when the service was provided because of “patient resistance,” (p. 9) probably a way to blame the victim because the patient was broke. But another third of the time, the provider admitted it didn’t know how much to charge the patient.

All this adds up to large costs for the provider. Moreover, patients can’t make intelligent choices. (We’ll leave aside for now the larger destructive consequences of fee for service.) It’s worth noting that the American College of Cardiology and American Heart Association recently recommended that doctors consider costs when recommending treatments for heart problems–certainly a harbinger of a trend. None of this can happen with the Byzantine payment systems in place.

I mentioned earlier half of payers follow standards to accept electronic payments. Well, that means that half don’t. The use of paper or fax adds an extra tax to negotiations that sometimes take months, as invoices go back and forth and payers reject invoices for a blank space or miscoding in a single field.

InstaMed recommendations include: “payers and providers must work together to help consumers take control of their healthcare payments–or risk further consumer dissatisfaction and lost revenue.” (p. 16) This is an audacious enough agenda, but I go much deeper in my call for change:

  • Publish open data on costs, hospital errors, and outcomes for common procedures. We already know that no correlation exists between cost and quality.

  • Collect detailed data about outcomes, deidentified in the best manner we know, in order to supplement clinical trials, which suffer from their own distortions. Find out where we’re wasting money just by assigning the wrong treatments.

  • Create better interfaces for submitting doctors’ bills, to eliminate the absurd ritual of multiple submissions that get rejected repeatedly by payers and create an entire third-party market just to get invoices right. Standardize billing procedures across payers. (I’m not taking on the issue of single-payer here.)

  • Eliminate fee-for-service and complete the payers’ current trend toward paying for outcome. This requires a lot more of the data mentioned in the second item, so we know what illnesses actually should cost to treat.

EMR Customer Service, EMR Not Meeting ACOs Needs, and Patient Centered EMR Rollout

Posted on April 13, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.


Zappos is in Las Vegas, and I can assure you that this story is true. I’ve always wondered how they’d scale that policy if thousands of people called for pizza. The key I think is that they do focused customer service. Chandresh asks an important question. Which EHR vendors have delightful customer service?


If EHR vendors don’t make the ACO possible, who will?


I’d be more interested in seeing an EHR roll out that considered the patient.

Planning a Successful Patient Engagement Strategy

Posted on April 2, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

On social media and at events like HIMSS, we hear a lot of discussion about this new trend called patient engagement. While there are certainly new tools to help an organization engage the patient, I don’t think it’s fair to say that patient engagement is a new strategy. Patient engagement has always been considered a good thing in practices and healthcare organizations.

The challenge is that we’ve never rewarded those who actually did engage the patient. Healthcare reimbursement has actually discouraged patient engagement despite providers natural desire to want to engage the patient. Every doctor I know would love to sit down with a patient for an hour and really engage them in their health. Unfortunately, we don’t pay them to do this.

While I don’t think we’ll see an over night transition to hour long visits with our doctors, the move to value based reimbursement will finally start rewarding providers who engage deeply with their patients.

The next question doctors should ask is where to start when it comes to patient engagement in this changing landscape. This whitepaper on 5 Elements of a Successful Patient Engagement Strategy would be a good place to start. It provides a realistic strategy for your organization to consider.

The whitepaper also has this great quote from Leonard Kish:

“If patient engagement were a drug, it would be the blockbuster drug of the century and malpractice not to use it.”

Those practices that choose to not have a patient engagement strategy are going to fall behind. This won’t be an issue right away, but it will catch up to many practices who don’t see the coming change.

Patient Engagement Strategies Must Start with the Patient

Posted on December 18, 2013 I Written By

The following is a guest blog post by Matt Adamson, vice president of product management for ACO and value-based health at ZeOmega

Healthcare providers are preparing to engage patients at a deeper level than ever before as they strive to achieve quality and savings metrics required of accountable care models being implemented across the country. However, a critical, lingering question remains – will patients participate? Patients have grown accustomed to seeking out healthcare information on their own, with the top five healthcare websites logging more than 78 million unique visitors monthly.[i] While this is clearly a positive sign that must be leveraged to move the needle even further, the answer could lie with the addition of the care coordinator that exists in most accountable care and medical homes.

A patient portal is seen as the most likely way that care providers will interact with patients outside of resource intensive office visits or telephone conversations, but any technology adoption must be accompanied by monumental shifts in attitudes among both physicians and patients in order to be successful. Physicians already are strapped for time and few are reimbursed for patient engagement beyond the traditional face-to-face interaction. Likewise, patients may hesitate to “bother” their doctors with questions or access their personal healthcare information online.

Care coordinators could serve as the bridge that connects physicians and patients, bringing them together at a clinical connection point. Relatively new in the healthcare system, care coordinators generally are nurses with care management experience who can help put conditions and diagnoses into the appropriate clinical context while speaking with patients on their level. The patient portal would provide another avenue for patients to communicate with the care coordinator, who would serve as the liaison to the physician when appropriate.

Meaningful Use Drives Push for Patient Engagement

Patient engagement will be a critical consideration in achieving Stage 2 Meaningful Use. Now extended through 2016, Stage 2 includes objectives to improve patient care through better clinical decision support, care coordination and patient engagement. Patient engagement metrics will require that more than 5% of a practice’s patients send secure messages to the provider and more than 5% of the patients access their health information online.[ii]

The Medicare Shared Savings Programs (MSSP) and the Partnership for Patients community-based care transitions program both have measures related directly to demonstrating an enhanced communication experience between patients and physicians that can lead to recognition and additional revenue for practices and hospitals. The NCQA Patient-Centered Medical Home certification also includes elements related to patient engagement. One of the critical certification factors requires contact with at least 50% of patients to develop and document self-management plans and goals.[iii]

Beyond regulations and certifications, patient engagement is also being shown to help meet the cost savings aspects of accountable care. Patients who are more engaged have fewer hospital stays, adhere more often to prescribed medical treatments, recover faster and are more satisfied with their care.[iv]

Engaged patients are also more successful at managing chronic illness than those who are not. More than 40% of Americans are living with at least one chronic disease, which overall cause seven in 10 deaths each year in the United States, according to the Centers for Disease Control and Prevention.

Getting Patients Involved in Their Own Health

As clinicians work more closely with patients who are trying to manage chronic illness, it is important to note that the time patients spend with physicians, nurses and other care providers represents a very small percentage of the overall time spent managing conditions or treatments. The patient and other caregivers are largely responsible for adhering to care plans and making the necessary lifestyle changes to accommodate chronic conditions. Patients who are educated about their conditions and engaged in the process will more likely succeed in keeping their chronic conditions in check.

So using a patient portal or similar technology would seem a rational, logical way for patients to learn more about their conditions and interact with care providers in a secure, HIPAA-compliant environment. Unfortunately, it isn’t as easy as that. With all of the rules, metrics and evidence that are mandated for the clinician community, there are no such rules in place that require compliance for patients.

A portal would allow patients to contact their doctor any time, day or night, to ask a question or relate treatment information. But few doctors are trained for or desire that type of high-touch interaction, especially since reimbursement for that type of interaction is rare. The United States also is facing a rather serious primary care shortage in many areas, one that will be exacerbated as up to 30 million uninsured obtain coverage under the Affordable Care Act. So what’s the best use of physician time – diagnosing and treating an increasing number of patients or answering questions by secure email?

Patient portals and other technologies that Meaningful Use is bringing into common usage will not move the needle toward smarter health choices on their own. The technology has to be helpful and interesting for patients, providing them with an easy way to connect with care providers when they need help and to get updates and reminders when needed.

This is why the idea of using care coordinators in the role of engaging patients when not in the physician office or receiving direct care is gaining traction. The goal of care coordinators would be to guide patients and help them to navigate the healthcare system so that they stay on track with their treatments between physician visits. Care coordinators would have a direct link to a patient’s physicians, bringing them in only when needed.

Secure messaging and emails could provide an easy way for patients to submit questions or take action when they are ready to do so. Platforms that can connect and share the nursing care plans between the care coordinator, caregivers and the patient could be highly effective, especially if there are issues resulting from chronic or acute conditions. This seamless connection would allow the care coordinator to pass along educational content and become part of a two-way mechanism for tracking medications in a manner that allows patients to update and print the list.

From there, embedding incentive management and gaming features into the portal would provide a reason for the patient to keep coming back to continue the engagement.

Technology platforms built to enable the connection between the patient and the care coordinator could be the missing pieces of the puzzle that would allow patients to become more involved in their health and allow the promise of patient engagement to become a reality.

Does EHR Help or Hurt Doctors Wanting to Stay Independent?

Posted on September 11, 2013 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I’ve been hearing more and more people talk about the challenges that small independent doctors are having in this ever changing healthcare environment. In fact, I’ve heard a number of people proclaim the death of the small physician practice. I’m not ready to carve the gravestone of small practices, but there’s little doubt that the small physician practice is facing a lot of challenges from a lot of different angles.

athenahealth recently did a profile of whe Wilson Stream Family Practice’s challenge to stay independent. It’s a common case that many of us have no doubt seen. Although, what I found really interesting in the profile was they made the case that athenaCollector and athenaClinicals was key to them staying an independent practice. It’s only a two page profile, so check it out to see what I mean.

I found this a really interesting topic of discussion. Does an EHR help a practice stay independent?

As usual, the answer is that it depends. A poorly implemented EHR can put an independent practice out of business. However, the opposite can also be true. I’ve seen a well implemented EHR help a lot of practices get the business of their practice in order. I think an EHR will become even more valuable to an independent practice as the billing and coding rule complexity continues to increase.

One aspect of that reimbursement complexity revolves around the move to accountable care. Many indepents are selling off to hospitals in anticipation of this change, but there is a case to be made for Clinical Integration with your hospital system as opposed to a full on physician acquisition. However, a practice without an EHR won’t have the clinical integration option available to them. A hospital won’t be clinically integrating with a paper practice.

We’ll see what other forces start pressing down on doctors, but an EHR will be a required part of practicing medicine whether your practice remains independent or is acquired by a hospital.