Understanding the CMS Changes for 2009

A new year is here, and with it comes changes in Medicare reimbursement (again) – and at least two more years until the transition is complete. In this second year in the transition, ambulatory surgery center (ASC) reimbursement is based on 50 percent of 2007 ASC rates and 50 percent of the published hospital outpatient department (HOPD) rate. When comparing the reimbursement of ASCs to that of HOPDs, the overall percentage has dropped from 63 percent in 2008 to 59 percent in 2009. Part of this drop in reimbursement is because HOPDs have received an inflationary increase in reimbursement in 2008 and 2009, while ASCs did not.

As you can see from Table 1, several specialties have an overall increase in reimbursement. However, as expected, others such as GI and pain management have decreased. The downward trend in reimbursement for these specialties and specific procedures means that it’s important to continue reassessing those procedures that already have minimal margins.

Table 1

Effect on Specialties – 2009 Proposed Change in CMS Reimbursement

Specialty	2009 Percent Change with Transition (50/50 Blend)
Eye and Ocular Adnexa (Ophthalmology)	-1 percent
Digestive System (GI and General)	-6 percent
Nervous System (Pain Management)	-3 percent
Musculoskeletal System (Orthopedics and Spine)	19 percent
Integumentary System (All Specialties)	7 percent
Genitourinary System (Urology and GYN)	11 percent
Respiratory System (General and Pulmonary)	13 percent
Cardiovascular System (General / Cardiac)	16 percent
Auditory System (ENT)	18 percent

In May 2009, the Centers for Medicare and Medicaid Services (CMS) is changing the definition of an ASC to “any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission.” This means that ASCs can now keep a patient overnight. Because of this, certain procedures that were previously thought to require an overnight stay were added to the ASC-approved list.

For 2009, CMS added a total of 30 procedures to the approved-procedures list, some of which were previously excluded and some newly added CPT codes from the American Medical Association. Additionally, there were changes to the lists of office-based and device-intensive procedures.

To obtain the 2009 CMS reimbursement list for ASCs and all of the information about office-based, device-intensive and ancillary procedures, click here. As changes are made quarterly in additions/deletions and reimbursement allowances for ancillary procedures, be sure to check regularly for updates.

The following are suggestions for tasks you may already have addressed in your preparation for 2009 changes. Review your fee schedule each time Medicare makes a major change in reimbursement allowances. Particularly check the device-intensive procedures as Medicare includes the reimbursement for the implant with the facility fee. Be aware that Medicare’s allowance for implants does not always cover cost.

• Example: 63685 – Insert/rep spinal neurostimulator
• Cost (depending on type) – $15,000 to $18,000
• Medicare 2009 allowance (including facility fee) – $14,366.35

CMS has established Conditions for Coverage (CfC) for ASCs. It is now required that ASCs gather data that will provide information on the quality of care provided to patients and its impact on patient outcome. Enactment of these CfCs will help ensure that ASCs are qualified to safely perform the broader and more complex range of services being covered in the ASC setting. The areas of focus for 2009 are:

• Strengthening patients’ rights regarding disclosure of physician financial interests; advance directives; grievances; and confidentiality.
• Imposing stronger obligations an ASCs to oversee its quality assessment and performance improvement (QAPI) program, while allowing ASCs flexibility to assess and improve patient services, outcomes and satisfaction.
• Emphasizing the importance of infection control practices.
• Strengthening the requirements for assessing the patient’s condition at admission and at discharge.
• Adopting a disaster preparedness plan.

Although overall the percentage of ASC to HOPD rates has declined, CMS continues to move forward in implementing the biggest change in reimbursement to surgery centers ever undertaken. If it has accomplished nothing else, it has inspired surgery centers to continue their efforts to remain the economic leaders in performing outpatient procedures.

Caryl A. Serbin, RN, BSN, LHRM, is president and founder of Surgery Consultants of America, Inc. and Serbin Surgery Center Billing, LLC.

2009 Outlook: Ambulatory Surgery Centers

The outlook for the ambulatory surgery center (ASC) industry in 2009 is mixed. While there is continued growth in procedure volume, there is continued pressure on reimbursement and a reduction in elective procedures that are typically self-pay (e.g., cosmetic surgery). Much has been written on certain developments, such as the abolition of “under arrangements” transactions, the prognosis for physician-owned hospitals and issues particular to the New Jersey and California markets, all of which are noteworthy. In addition, here a number of other items of interest to the ASC industry, a few of the most significant include:

1. Potential for Increased Consolidation

There are several factors that are likely to increase consolidation in the industry:

• There is decelerating (although still positive) growth in procedure-volume.
• Permanent reimbursement pressures exist.
• Competition remains high and barriers to entry are not terribly effective.
• The supply of unaffiliated surgeons is dwindling.

As a result, expect an increased focus on the acquisition by national ASC companies of smaller and less capitalized regional and national companies, as well as the combination of in-market ASCs, followed by the continued operation of both facilities or the shutdown of one of the facilities.

2. Workers’ Compensation Fee Revisions

Another trend is towards states adopting workers’ compensation fee schedules that are less than the historical method of paying a percentage of schedule. This will have obvious implications for ASCs that rely on workers’ comp cases for a significant percentage of volume.

3. Out-of-Network Issues

A number of ASCs have elected to not enter into contracts with payors and to waive the differential between out-of-network and in-network co-pays. Historically, most payors have reimbursed out-of-network claims at reasonable charges. ASCs have taken the position that the charges set forth on their retail charge master represent ordinary and customary charges. Consequently, it is not unusual to see out-of-network reimbursement be as much as five times higher than contracted reimbursement rates. Payors have launched a series of attacks on out-of-network billing, billing litigation against ASCs attempting to recover a substantial portion of the out-of-network fees on a number of theories, including:

• The waiver of the co-pay is fraudulent
• Waiving the co-pay is tortious interference with the contract between the patient and the payor
• Customary and ordinary charges are not set forth on the surgery center’s charge master, but the average reimbursement actually paid by the payor to in-network ASCs.

Prospectively, payors are changing the manner in which out-of-network care is reimbursed from a percentage of ordinary and customary charges to a fee schedule. The out-of-network fee schedule is typically lower than the in-network fee schedule.

4.  Lithotripsy Opportunity

With the coming illegality of per-click arrangements between hospitals and physician-owned lithotripsy companies, an opportunity exists for urologists to lease equipment for use in the ASC setting where the urologist is a physician-investor. There should be substantially increased scrutiny under anti-kickback theories, however, focusing particularly on those arrangements where the real cost to the ASC of leasing the equipment is materially higher than the cost-to-own the equipment and avoid altogether the relationship with the physician-owned lessor.

5.  Opportunities in Bariatric Surgery

We are seeing increasing interest in ASC-based performance of lap-banding and other bariatric surgery. One model gaining favor is a contractual arrangement between the surgeon and the ASC addressing the economics of the relationship, obligations with respect to marketing and patient care and restrictions on competition.

6.  Expansion of Medicare ASC-Approved Procedures

Although the 2009 payment changes for hospital outpatient department (HOPD) and ASCs continue an expansion of the variety and numbers of procedures approved for ASC reimbursement, there remains a disconnect between the process for approving procedures for performance in the HOPD and in the ASC. The ASC Association continues to lobby to have procedures simultaneously considered for inclusion on both lists, rather then the current process, which sees procedures added to the HOPD-approved list well in advance of the ASC-approved list – if they are added to the ASC-approved list at all.

7.  New Medicare Conditions of Coverage

The Centers for Medicare and Medicaid Services (CMS) recently finalized new Medicare conditions of coverage for ASCs. Earlier, CMS had proposed changing the conditions to prohibit overnight stays, which would have adversely affected many existing surgery centers. The new conditions of coverage allow ASCs to perform procedures as long as the expected time for the procedure and recovery does not exceed 24 hours. The new conditions also place greater obligations on the ASC to provide patients with information about their rights and whether there is physician ownership in the ASC.

8.  ASC Valuation Survey Results

HealthCare Appraisers Inc. recently announced the results of its 2008 ASC Survey, to which 13 national ASC companies responded. Among the key findings:

• Multiples paid to purchase a controlling interest remained steady in 2007, as nearly 60 percent of respondents saw 6.0x to 7.0x multiples of EBITDA and 33 percent of respondents saw multiples in excess of 7.0x.
• Competition for acquisitions remains intense.
• For the buy-out of physicians who do not use an ASC as an extension of practice, one-third of respondents saw multiples of 4.0x EBITDA or higher and one-third of respondents saw multiples of between 3.0x and 3.5x EBITDA.
• For new physicians buying in to an ASC, 77 percent of respondents saw pricing multiples of between 2.5x and 4.0x EBITDA.
• Orthopedics, ENT and general surgery remain preferred specialties for ASC physician partners.

Saving the system: Mickey Herbert views market-based system as America’s way to go

 As far back as 1971, Mickey Herbert has believed that a market-based system of healthcare delivery is the only option for America. At the time, Herbert was involved in research that set the stage for the passage of the HMO Act of 1973, the pivotal legislation that prompted the epic shift from indemnity to managed care models.

Now the president and CEO of ConnectiCare, a commercial and Medicare Advantage insurer based in Farmington, Conn., Herbert still believes the market-based system is right for America. In fact, ConnectiCare is organized in such a way to allow Herbert time to hit the streets to educate policy-makers, entrepreneurs and big business on the need for maintaining a healthcare delivery system that allows for innovation, competition and market forces.

Mickey Herbert, MBA, has nearly 40 years of healthcare experience. He founded and served as CEO of Physicians Health Services, a Connecticut HMO, for 22 years. In numerous board positions in the industry and in his regional business community, Herbert has influenced policy-makers and stakeholders alike. A former all-American fast-pitch softball player, he also owned the Atlantic Professional Baseball League’s Bridgeport Bluefish for eight seasons. He earned a bachelor’s degree from Swarthmore College, an MBA from Harvard University and an honorary doctorate degree from the University of Bridgeport.

“I will have, by the time I’m retired, 40 years of experience in this business, and believe me, I learned in 1971 that this market-based system is the best way to go-it’s the only way we can go in America,” he says. “So we’ve got to do it, and we’ve got to get it right. It’s who I am. It’s what I am. If there’s going to be a legacy for me, I’d like people to think that I really did convince them that we shouldn’t scrap the healthcare delivery system that we have in America, and that we should concentrate on fixing it instead of throwing it out and adopting a European model.”

Market History

Herbert says his earliest mentor and philosophical influence was Paul Ellwood, MD, a researcher who is credited with creating the phrase “health maintenance organization.” Dr. Ellwood was a pediatric neurologist who founded a national policy research institute that later became InterStudy. Herbert was the institute’s vice president, and there he helped create the “Health Maintenance Strategy”-a proposal for a new U.S. healthcare system, in which private plans would compete to deliver higher and higher quality at increasingly affordable prices. That proposal became embedded into the groundbreaking HMO Act of 1973.

  At a glance

As a result of that act, the federal government began funding hundreds of HMO startups, all of them not-for-profit. Herbert leveraged his research experience and soon began his own HMO, Physicians Health Services (PHS), in Bridgeport, Conn., in 1976.

For two decades, Herbert built PHS market share and eventually converted it to a for-profit company, following the conversion trend of the industry at large. During that time in the 1980s, many plans began going to Wall Street to raise capital because the government had stopped funding HMOs.

“[Healthcare economist] Uwe Reinhardt used to say back in the 1980s that we created a class of robber barons in healthcare, and I was one of them,” he says. “But he meant it in a complimentary way. It was just like when we built the railroads in America. We needed folks to do this. They made themselves a lot of money, but they turned the industry on its head.”

After 22 years of running PHS, Herbert eventually sold it to Health Net in 1998 for $271 million. Health plans had accomplished a lot by the mid-1990s. They changed the way healthcare was delivered, offering broader benefits and coverage for preventive services, while indemnity insurance had basically died off. The HMO private-market model had “broken the back of medical inflation,” bringing it down to a remarkable 1%, Herbert says.

Certainly today, with medical inflation spiraling out of control, health plans aren’t viewed as the cost-savers they once were. Many things are contributing to the healthcare cost crisis, he says, and shutting down the market in favor of a single-payer system isn’t the answer. The aging of America, unhealthy lifestyles, treatments with uncertain cost effectiveness, and a host of other factors contribute to the crisis. Instituting a single-payer system would only transfer those same concerns to the government, he says.

While a government-run system could offer universal coverage, Herbert believes it still would be unable to control the root of the problem, which stems from runaway costs. Next year offers a rare opportunity-one he says only comes along every 40 years or so-to substantially reform U.S. healthcare policy, addressing cost, quality and access comprehensively.

“There are many practical solutions being prepared to help improve the healthcare system,” he says. “A government-run, single-payer system is neither practical nor financially rational.”

Herbert estimates the cost of creating a single-payer system just in his own state of Connecticut with 3.6 million residents would top $17 billion.

Single-Payer Supporters

Advocates for a single-payer, national system point to the advantages of universal access and net financial gains, such as streamlined administration, reduced overhead costs and the elimination of private-company profits. Physicians for a National Health Program (PNHP), a membership organization of 15,000 physicians, also makes a case for quality.

“The greatest quality problem of all is not to have any access to care because you’re not insured,” says Gordon Schiff, MD, associate director of the Center for Patient Safety Research and Practice at Brigham and Women’s Hospital, and a member of PNHP.

Dr. Schiff says the market-based system in addition to not guaranteeing coverage for all is structurally undermining the ability to deliver high-quality care. For example, he says 30% of U.S. physicians are PCPs, while 70% are specialists. He believes the ideal ratio would be just the opposite, but payment structures in the market inspire clinicians to become specialists instead of PCPs.

“The market-based system is not working these problems out, and I argue it’s making them worse in very fundamental ways,” he says. “A public system would facilitate quality. It wouldn’t be a magic cure for all these things but it would, in fact, give us a framework for having a much more constructive approach.”

He also believes that healthcare costs in the United States are dramatically high compared with other countries with no added outcomes improvement to show for it.

Global Comparisons

Herbert is fully aware of how the United States compares. He has traveled the globe studying healthcare models in other countries, such as Ireland, South Africa, the Netherlands and New Zealand. In New Zealand, a top healthcare official told him his country basically has ceded the role of medical innovator to the United States. They offer care for the masses and leave the technology advancement to the Americans.

Bruce Pollack, principal of Global Health Advisors and president of the Academy for International Healthcare Studies (AIHS), agrees with Herbert’s characterization. The two have traveled together on AIHS missions. Pollack says because universal coverage tends to be the norm, other nations are stunned that the U.S. healthcare system, while undoubtedly the most expensive in the world, leaves tens of millions without coverage.

“Nonetheless, as all countries struggle to control costs, access and quality, the United States is frequent looked up to as an innovator in areas such as disease management, while increasingly adapting managed care techniques,” he says.

Comments like that reinforce Herbert’s belief that innovation is one of the irreplaceable positives of the market-based system. The entrepreneurial creativity and advanced solutions shouldn’t be sacrificed.

In addition to innovation, the market-based system has virtually no rationing and almost no wait times for care. He notes that in New Zealand, for example, women with breast cancer often tap into the private market and pay large sums out-of-pocket to receive the clinically recommended 12-month treatment of trastuzumab. The government will not fund that level of care beyond six weeks.

“We hear the story in America of people going bankrupt because they don’t have health insurance, but the reality is in the government-based systems, people are also going bankrupt,” Herbert says. “They buy private insurance to jump the queue. If you need a hip or knee replacement, you get put on a list and might wait years…If you’re in America, you can get the treatment next week.”

Countries that offer a public system usually provide basic coverage to all citizens, but they are only as generous as their national budgets allow them to be. They simply have different goals, Herbert says.

“Now having said that, there really is no excuse for us not doing something about the 50 million Americans who don’t have coverage,” he says. “So we’ve got to figure out a way to do that in a market-based system.”

Shaping Policy

When Herbert joined ConnectiCare in 2005, after being out of the health plan business for several years, preserving the system became a cause célèbre for him. He noticed how pressure had increased on government to play a larger role in healthcare and how states were formulating their own solutions, especially in his own state of Connecticut.

“Connecticut is a little state, and you might not worry about it in the bigger scheme of things,” Herbert says. “But I’m telling you, we’re at a tipping point in this state where we might have legislation passed that could be a stalking horse for a single payer nationally or in other states.”

Connecticut legislators’ interest in a single-payer system seems somewhat of a paradox to Herbert.

Connecticut ranks in the top 10 states for coverage and has an 8.4% uninsured rate, which is significantly lower than the national average of 17.9%. Herbert says the prevalence of employer-sponsored coverage in the state is about 7% higher than the national average of 60% and that the overwhelming majority of employer-sponsored plan members say they’re happy with their plans. Connecticut also ranks in the top five states in terms of health status. More than 38,000 jobs around the state are tied to the insurance industry, and it is considered the insurance capital of the nation.

While Connecticut does have other challenges, such as high nursing-home costs and low scores in prenatal care and infectious disease incidence, Herbert believes a comprehensive healthcare reform plan could address the concerns-including the root causes of the cost crisis-without a complete turnover to a single payer.

In fact, last year, Herbert co-chaired the Connecticut Health Insurance Policy Council, which assembled the state’s six commercial plans and several large employers to fund and produce the report “A Framework for Health Care Reform for Connecticut.” The report suggests a possible policy structure to achieve health coverage for all residents affordably while preserving the market-based, employer-sponsored delivery system.

The report reached every legislator in the state in January 2007, and Herbert presented it to chambers of commerce in an effort to shed some light on the possibilities for healthcare reform.

In 2007, Connecticut’s single-payer bill was defeated.

Keith Stover, a spokesman for the Connecticut Association of Health Plans, says he’s pleased with the progress but continues to be surprised by the number of legislators who are still advocating for a single payer.

“Some legislators in Connecticut are philosophically inclined to support the quality and innovations that come with a market-based system, but others seem convinced that government’s magic wand-and taxing authority-are all that’s necessary to deliver healthcare for all,” Stover says.

Also in 2007, a bill passed to create a 10-member quasi-government commission, called the Health First Connecticut Authority. The commission currently is studying the state’s healthcare delivery comprehensively in the same way Herbert’s policy council had-however this commission also includes providers, advocacy groups and other stakeholders.

Herbert was appointed to represent health insurers for the commission, which will produce a report in time for the January 2009 legislative session. He says he has a formidable challenge in convincing the members of the authority council that the market-based system is the right choice.

“My concern is that the new report won’t come to the same conclusions that the [Connecticut Health Insurance Policy Council's] report did,” he says. “Each person on this commission was appointed by the legislature and the governor…and some of those people very much want a single-payer system.”

Broader Influence

Herbert also participates in several other groups to spread his message, including: the Connecticut Business and Industry Assn., the University of Connecticut Foundation, the Metro Hartford Alliance, and the Fairfield County Community Foundation. Beyond Connecticut, he is involved nationally through the America’s Health Insurance Plans (AHIP) executive strategy committee and offers advice to other leaders in managed care. He says leaders personally need to make an investment in advocacy, not leave it to their government relations staff.

“If you are a CEO or a senior officer, you have got to get involved,” he says. “You cannot stay within your health plan in a cocoon and assume that everything’s going to be okay for the next decade or so-because it’s not. Our industry is threatened, and you’ve got to be engaged politically and intellectually.”

In the past 15 years, health plans have increasingly gained a role at the table to engage Congress and state government leaders. Herbert says plans certainly won’t get everything they want, but they can effect change in a positive way that will preserve the system.

“I love what I’m doing,” Herbert says. “I go to bed every night and I thank my lucky stars I got back into this business.”

Cataract Products: Best of 2008

Both new products and the improvement of existing products in the ophthalmic marketplace made 2008 an exciting time for cataract surgeons all over the world. From advancements in phaco technology to OR safety ,this year has not only brought a fresh perspective to many old ways of thinking but these advancements have created a higher level of efficiency, patient safety, and positive outcomes.

Phacoemulsification systems continue to develop technology that can better the modern day cataract surgeon.  The AMO Whitestar Signature has brought forth the ability to switch from a fluid based system to a vacuum based system within the same case. The Signature also has with it the new Ellips handpiece that allows for transversal ultrasound.  Sleeves and tips developed by Microsurgical Technology can be used on the Signature to accommodate a 2.2mm incision.  Bausch & Lomb’s Stellaris allows for the switch between flow based and vacuum based fluidics as well.  The Stellaris also brings with it the ability to perform longitudinal phaco through a 1.8mm incision.  For the Alcon Infiniti system, the introduction of the more rigid “Intrepid” fluid management system created the ability to minimize the amount of post occlusion surge thusly creating a higher level of safety in avoiding additional risks of capsular breaks.  The Infiniti Ozil handpiece allows for torsional phaco and allows for 2.2mm incision.  Alcon also has continued to evolve the configuration of the phaco tips as well.  The Ozil 12 is a modified bent tip with a 12 degree angulation that comes in either a Kelman or reverse Kelman configuration.  This has been developed for those surgeons who are used to a straight tip but would like the benefits of torsional phaco.

Intraocular lenses are always on the mind of surgeons; therefore every enhancement and improvement brings a sense of anticipation waiting for the new technology to hit the market.  In the world of Presbyopia correcting IOL’s, Bausch and Lomb’s Cyrstalens HD was improved in 08’ to provide better near visual acuity due to the design that increased the effective focal range.  The next generation of the Alcon ReStor multifocal will feature a +3 add.  This will allow surgeons to tailor the multifocal selection based on the vision needs of the patients to accommodate for reading or intermediate dominance.  The release of the Akreos Advanced Optics IOL, by Bausch and Lomb, is a hydrophilic acrylic aspheric IOL that can be inserted through a modified 1.8mm incision.  Another IOL that has grown in popularity this year is the single piece Technis ZCB00.  Its benefits include a lower refractive index and the edged design to help protect against dysphotopsias.  It is also noted that its hydrophobic acrylic is not prone to glistening.  The down fall of this lens however is its inability to be inserted, at this point, through a micro incision. AMO is currently working on a new system, the Viper, which will remedy this issue.  Finally, the much anticipated AcrySert C preloaded injector from Alcon will begin to make its move to become more prominent in the market for 2009.  The preloaded injector will not only be an advantage for the surgeon’s efficiency but it will also avoid unnecessary damage or contamination to the IOL.

An important tool of the trade is of course the surgical microscope.  The biggest breakthrough this year was the OPMI Lumera and Lumera T by Carl Zeiss Meditec.  Its stereo coaxial illumination and beam paths create a red reflex that is unmatched by anything that was previously offered.   These scopes also allow for a greater visualization of intraocular structures and depth perception as well.  Carl Zeiss has also developed the Callisto eye which is a data management/documentation system.  It allows for a combination of OR processes, surgical planning, documentation of disposables/IOLS through a barcode scanner, and even has video documentation possibilities.  One surgeon stated that “it will be like having a satellite office in the microscope”.

Other noteworthy products for 2008 were the development of Healon D (AMO) and the Malyugin Ring (Microsurgical Technology).  Healon D is a dispersive hyaluronic OVD.  It is very similar to Alcon’s Viscoat but it is reported that it has better clarity since it doesn’t contain chondroitin sulfate.  AMO will also be introducing a Dual Pack similar to the approach Alcon takes with its Duovisc line.  It will allow a surgeon to have viscoelastics differing in there characteristics to better accommodate surgeons needs throughout the procedure.

Some products may not have advanced in technology but have shown innovations in safety for not only the patients but for those in the OR as well.  Alcon will launch in 2009 a disposable irrigation-aspiration tip made of a soft polymer material.  This product is riding on the coat tails of the success of the silicone I/A tips that have helped improve potential risk factors for capsule rupture.  BD Health, the leaders of the movement for improved surgical blade safety, have expanded there current line of safety blades to include surgical blades as small as 1.4mm all the way up to 3mm.  The protective sheath they had developed is a significant advancement in the quest to shield healthcare workers from unnecessary risks.

Cataract surgery continues to make great strides in the advancement of technology, surgical techniques, and safety. 2008 has been a year that has brought new high quality products into the ophthalmic market place.  Hopefully, 2009 will too result in products that will continue to aid surgeons in achieving the desired outcomes and happiness of their patients.

So what does Christmas mean to you then?

Is Christmas just that time of year where you have some time off work, eat far too much food, drink far too much alcohol, spend far too much money and generally celebrate over-indulgence and consumerism? Or perhaps you’re more into the religious side of it, and you spend Christmas thinking about the birth of Santa Claus in a manger in Bethlehem hang on, I think it might have been the Baby Jesus, you know…

Or perhaps, neither of these really sum up what Christmas means to you. To a large extent, many of the things that you do at Christmas write letters to Santa, visit Santa’s Grotto and so on, are shaped by whether or not you’ve got small children. Apparently, if you keep asking to sit on Santa’s knee as an adult, this is seen as somewhat suspicious, and can theoretically get you barred from major shopping centres.

Well what does it mean to me? My beliefs of what Christmas should be about were very much shaped by my own childhood. I come from a background that I would describe as a individual whom would attend church on three major holidays, but that didn’t mean I didn’t understand the story of the nativity, or that this was what Christmas was meant to be about, it just meant that this was something that wasn’t particularly focussed on in our household.

For me, there are two main strands to Christmas. The first being nice to people is a lovely thing, and you find that many people at this time of year will have more time for others. This also fits in nicely with the Christian message.

The other main strand to Christmas, and the one which stood out the most for me as a child, is that Christmas is about family.

On Christmas Eve, my mother’s younger sister would invite family round to her house for a buffet tea. There would also be a tub of gifts to exchange and the chance to play some party games (when I was particularly young, Santa himself made an appearance now and again to hand out presents to the children).

And then we’d go back to my Grandma’s house and I’d lie in bed trying to fall asleep as soon as possible to make tomorrow come faster, but also listening out just in case I could hear sleigh bells. To this day, I’d still swear I heard them once…

And then on Christmas Day, we’d open our Christmas presents first thing, play with them, discover we needed batteries and spend the rest of the morning cannibalising the rest of the gadgetry in the house so we could get my toys to work. I’d normally drive some sort of vehicle into someone’s cup of tea or coffee, which inevitably would go across the floor, but people were it being Christmas, after all invariably good tempered about this.

And then we’d have Christmas dinner. After dinner, my Dad’s brothers would arrive with their wives and children for a short while, and I’d get to play with other cousins, including my big cousin Mike, who was great fun to play Star Wars with.

Late Christmas afternoon, we’d go to my mother’s older sister’s house, who’d put on a buffet tea for the sisters, husbands, grandparents and large pile of children. After stuffing our faces, we’d normally jump onto the sofa in the front room and end up watching something that was fun, but not particularly Christmasy the Dukes Of Hazzard, for example.

But that’s what it was. Christmas Eve family. Christmas Day family.

To me, that’s what Christmas is about. Spending time with your family. Being patient with one another. Children having fun and forming bonds with their parents and grandparents. It’s a time of year where people should be happy, should put aside the stresses and strains of everyday live for a few days in the grand scale of things, does it really matter if the carrots are overdone?

So my Christmas plea to you all this year is simple.

• Spend some time thinking about your loved ones.
• Be patient with others and don’t get worked up about little things
• Have fun. Force yourself if necessary.
• …and don’t forget to Have A Very Merry Christmas, and a Happy New Year

Around the World

6 Medical Myths for the Holiday Season

Last year, the British medical journal BMJ reported on a series of medical myths that even doctors believe. Among them: Turkey makes you drowsy. Dim light ruins your eyes. Drink at last eight glasses of water a day.

This year, the same researchers, Dr. Aaron Carroll and Dr. Rachel Vreeman of the Indiana University School of Medicine, offer six new medical myths for the holiday season. The latest set of myths, published this month in BMJ, are commonly believed by the general public and many doctors, said the researchers. However, a search of the medical literature shows these myths aren’t true or lack evidence to support them.

Link: http://well.blogs.nytimes.com/2008/12/18/medical-myths-for-the-holiday-season/

Iraqi PM’s office says shoe-thrower apologizes

An Iraqi journalist who threw his shoes at U.S. President George W. Bush apologized to Iraqi Prime Minister Nuri al-Maliki for embarrassing him before the watching world, the prime minister’s office said on Thursday.

TV reporter Muntazer al-Zaidi shot to fame when he called Bush a “dog” in Arabic at a joint news conference with Maliki in Baghdad last Sunday and threw both his shoes at Bush, a gesture that is a deep insult in the Arab world.

Link: http://www.newsdaily.com/stories/tre4bh2xd-us-iraq-bush-shoes/

Hospitals freeze big-ticket plans

The recession is forcing many Massachusetts hospitals to reconsider ambitious expansion projects, put major purchases on hold, and eliminate jobs as revenues and investments shrink.

Cutbacks in healthcare, the state’s largest industry, could produce a ripple effect extending to nursing agencies, equipment suppliers, and other businesses that support hospitals.

Link: http://www.boston.com/news/local/massachusetts/articles/2008/12/14/hospitals_freeze_big_ticket_plans/

Hospitals say economic crisis is ‘far worse’ than last

Looked at one way, the current recession is always the worst one…but not this time around. According to a new survey, almost nine in 10 hospital execs believe the current economic downturn will impact them more heavily than the crash of 2001 to 2002.

The study, which was conducted by CSC, found that 55 percent of hospitals have seen Medicaid cuts, and expect to see a rise in uncompensated care. In response, 74 percent of hospital leaders are making changes to respond, and another 20 percent are preparing to do so. More than half (67 percent) expect to see growth in ED visits and 58 percent expect to see fewer routine checkups.

Link: http://www.fiercehealthfinance.com/story/hospitals-say-economic-crisis-far-worse-last/2008-12-10?utm_medium=rss&utm_source=rss&cmp-id=OTC-RSS-FHF0

Protesters run riot for a fifth day in Greece

Greece succumbed to violence for the fifth day running as 10,000 anti-Government protesters took to the streets of central Athens, while a 24-hour strike shut down the nation’s banks and schools, stopped public transport and paralysed the international airport.

The union organised rally and strike – planned weeks ago in a bid to pressure the government for greater financial support for low income families – was marred by youths throwing Molotov cocktails and rocks and the use of tear gas to disperse the groups

Link: http://www.smh.com.au/news/world/protesters-run-riot-for-a-fifth-day/2008/12/11/1228584967248.html

The time of change in Healthcare IT.

During the year of 2008 we had companies come and go, however some of these companies had good ideas and others had well what else can you say but bad ideas. Rather than name individual companies, I’d like to highlight categories.

Winners

1. Electronic Health Record vendors, especially web-based applications – The Obama administration has promised  $50 billion for interoperable EHRs.
2. Software as a Service providers – SaaS providers offer lower cost of ownership and faster implementation than traditional software installation approaches.
3. Open Source – I’m embracing Open source operating systems, databases, and applications as long as they can provide the reliability and supportability that I need.
4. Green IT – Winners will be innovative techniques to adjust power draw, such as idle drive management, cpu voltage adjustments, and high efficiency power supplies.
5. Cloud Computing offerings – These are remote infrastructure utilities such as storage and high performance computing. Friday’s Cool Technology of the Week will describe a new technology called Cloud Optimized Storage.

Losers

1. Client Server applications – the cost of deploying, supporting, and maintaining client server applications is no longer affordable.
2. Proprietary operating systems – I’m eliminating Solaris, AIX, HP-UX from my data centers. 
3. High end SAN storage – I find that 90% of my storage needs are met with lower end SAN, NAS, and appliances which use low cost, high density drives (SAS and SATA).
4. Devices that do not offer energy efficient operations.
5. Applications that require a specific operating system or a specific browser on the client side. To be successful in 2009, applications should be operating system neutral, browser neutral, and easily hosted as a service accessible via the web.

I welcome your thoughts on your own winners and losers for 2009.

Hospital-Owned Ambulatory Surgery Centers as a Hospital Outpatient Department

Healthcare Venture Professionals (HVP) remains committed to facilitating and supporting the physician-hospital ASC collaboration. At the same time, we are becoming more routinely involved in working with hospital-owned ASCs operating as hospital outpatient departments (HOPD).

There are two basic variations when it comes to the development of HOPD ASCs: new ASCs that are being developed as an HOPD; and existing equity-based ASCs (either physician-owned or hospital-physician joint ventures) that are being converted to a HOPD.

Based on the ASC literature, we are not alone in seeing this phenomenon. Others have recently commented on the growth of the HOPD approach to the development of ASCs. Depending on the specific situation, there are a number of reasons why this trend may be occurring:

• The increasing numbers of “maturing” physician-owned or joint venture ASCs. Many physician owners are reaching the point where they are looking to “cash out” on their ASC investments, and the local hospital is more frequently serving as a friendly alternative (vs. selling out to a for-profit company) to accomplish this goal.
• Increasing costs and greater risks entailed for physicians to meaningfully participate in equity-based ASCs (either physician-owned or joint ventures). This includes burgeoning construction and related materials costs, as well as tightening (and more demanding) lenders when it comes to financing ASC projects.
• The predicted or actual increased scrutiny by state and federal regulators of physician ownership in ASCs. A lot of people think that physician ASC ownership is bound to come under the same fire, sooner or later, that physician ownership in hospitals has been undergoing for the past several years.
• Increasing reimbursement pressures on freestanding ASCs from managed care payors. This has been true for some time in the highly-penetrated managed care markets. There is growing evidence that this trend is quickly spreading into markets that have been historically considered as “friendly” when it comes to the negotiation of favorable reimbursement contracts. This is having a direct impact on the profitability, cash flow and ROI/distributions from equity-based ASCs.
• The recent changes to the Medicare facility payment system which began a four-year phase-in program beginning this year. There’s been a lot of misinformation about these changes and their negative impact on freestanding ASC reimbursement and profitability. The facts are that, with the exception of a few specialties, this new system should be beneficial to freestanding ASC reimbursement. Even those specialties that are being hit (i.e., G.I., ophthalmology and pain management — where Medicare spends most of its freestanding ASC dollars) can still do well under the new Medicare system, with the proper attention to cost containment and operational efficiency. Despite these facts, there is at least anecdotal evidence that these Medicare changes have made some hospital or physician investors less willing to consider an equity-based approach to ASC development.
• The increased efficiency and effectiveness of in-hospital and HOPD ambulatory surgery operations. Hospitals are even turning to professional ASC management companies to ensure that their HOPD ASC is operated, to the highest degree possible, like a freestanding ASC. In some markets, this has obviated the “need” to consider an equity-based approach to new ASC development since existing or capacity is being better utilized to the satisfaction of physicians and their patients.
• Increasing reimbursement pressures being felt by hospitals and healthcare systems. Hospitals are becoming even more reticent to share in the technical/facility component by creating a joint venture ASC with physicians, due to the negative impact such a venture will have on the hospital’s increasingly fragile bottom line.

Making the Decision — Steps to Consider

Despite strong belief in the collaborative model, an equity-based ASC joint venture is not for everyone. There can be political, practical, regulatory or other overriding reasons why a joint venture approach is not merited in a specific situation. The reasons listed above are among the numerous factors that may lead to a decision that a well-designed and professionally managed ASC, of the HOPD variety, becomes the best solution in a given market.

Nevertheless, any decision to take the HOPD approach to ASC development should be made in a thorough and thoughtful manner. There can be negative political, practical and interpersonal consequences of deciding to go the HOPD route when, in fact, a more collaborative or equity-based approach is still seen as desirable from a physician perspective.

As the movement toward the HOPD form of ASC development continues, the process used to make the decision about the need and corporate structure for any ASC (planned or existing) becomes even more critical. More than ever, the ASC business-planning and decision-making methodology must include:

• Education for hospital representatives (including the hospital board of directors) and physicians on alternative models available for the development of an ASC, together with an effective description of all steps and the specific roles of all key players in the decision making process.
• Open communications between hospitals and physicians to include the identification of formal “leaders” or “champions,” who will represent and more actively participate in all subsequent ASC discussions and deliberations on behalf of their respective constituencies.
• A professionally conducted feasibility analysis that thoroughly considers and presents the quantitative and qualitative benefits of each approach to ASC development for both the hospital and physicians.

The above approach should optimally position both the hospital and its physicians when it comes to making the critical “Go / No Go” decision for subsequent ASC development. This same approach, with only minor modifications, will also work quite well in situations where the option of converting or “flipping” an existing equity-based ASC into an HOPD is being considered.

The Best of Both Worlds

If the decision is made to go with the HOPD ASC model, the goal should be to obtain “the “best of both worlds.” From a hospital perspective, the benefits of an HOPD model should include:

• More attractive reimbursement and retention of all outpatient surgery revenues that may have been reduced in a joint venture model. An HOPD ASC, regardless of location, will operate under the hospital license and usually receive hospital payment levels from governmental and managed care payors for outpatient surgery procedures.
• Better utilization of existing operating room capacity. It is also possible to “free up” other space currently dedicated to the provision of ambulatory surgery for alternative or improved revenue generating services.
• Providing patients/family and physicians with a much improved ambulatory surgery experience. By removing this service from a hospital environment, a dedicated HOPD ASC should avoid most staffing, scheduling and logistical problems which are inevitable in even the best run hospital OR settings, due to the “mixing” of inpatient and outpatient cases, and the unpredictability and inefficiencies resulting from emergency cases. An HOPD ASC can also be designed and located to minimize traffic congestion and directional confusion, and to maximize convenience and accessibility for the public.
• “Built-in” administrative and support services for the ASC such as human resources, maintenance, biomedical engineering and housekeeping.
• “Built-in” availability of hospital systems for support of the ASC (e.g., information systems).
• Direct access to needed clinical service arrangements for the ASC, such as anesthesiology, pathology and radiology.

Achieving the Best of Both Worlds

Achieving the “best of both worlds” is directly premised on operating the ASC as if it were a “freestanding” entity vs. a hospital department. This is best done by having:

• A facility designed, equipped and staffed for efficiency and effectiveness.
• Excellent professional management with experience in the operation of a freestanding ASC. As a side note, the engagement of a professional ASC management company can make the difference in gaining physician support for an HOPD ASC model. Physicians frequently express the “fear” (for a variety of reasons) that the new ASC “will be run like the hospital operating room.”
• Commitment to providing both utilizing physicians and their patients with a “Five-Star Experience,” usually best found in a freestanding ASC setting.
• Meaningful physician input and influence on all ASC clinical matters.
• ASC control of staffing, scheduling, pre-certification, registration and billing, product standardization, credentialing, quality improvement and other key functions to the greatest extent possible.
• Establishment of quality, operational and patient satisfaction benchmarks similar to those seen in the freestanding ASC sector.

Summary

Achieving the “best of both worlds” can be a challenge, especially for the hospital. There must be a willingness and flexibility to allow for a greater degree of autonomy for the ASC vs. the typical hospital department. This must be balanced by recognizing that the ASC, as an HOPD, must be fully integrated into the hospital organizational structure. Finding this balance is very important to the ultimate success of the HOPD ASC. If the right balance is not found, the hospital can become a bureaucratic burden that works against the goal of having the ASC function in a freestanding-like fashion.

A well-planned and operated HOPD ASC should result in significant benefits for patients, physicians, hospital and the community. With the appropriate amount of communication, expertise and patience, this goal of having the “best of both worlds” with an HOPD ASC can certainly be accomplished.

John A. Smalley (jsmalley@hvpros.com) is a principal and co-founder of Healthcare Venture Professionals, LLC, a full-service ASC management, development and consulting company with special emphasis on physician/hospital joint ventures.

Healthcare claims costs for employer-sponsored plans rises

A survey by Aon Consulting indicates double-digit increases in claims costs for 2009 but employers can
reduce costs with new strategies

Insurers seek more time to adopt ICD-10 system

The proposed transition to ICD-10 and HIPAA 5010 will lead to chaos, fraud, abuse and consumer dissatisfaction because the current timeline is unworkable

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