Tuberculosis treatment requires medication and monitoring

Tuberculosis (TB) continues to be a problem in the United States, particularly among at-risk populations. The groups at highest risk for TB include people living with someone who has active disease, and those with a lowered immune response, such as HIV patients.

“Every medical center in our region has tuberculosis on its risk assessment list, that is, its list of potential issues to monitor on a continuing basis,” says Stephen Parodi, MD, chief of infectious disease for Kaiser Permanente, Northern California. “We make it a priority to ensure that patients at risk for infection with TB are screened for latent infections.”

The region includes 20 medical centers serving 3.1 million members. Dr. Parodi says the plan encourages screening for those who have been incarcerated or have a history of IV drug use and has educated primary care physicians and pediatricians to screen for TB.

“We saw a significant surge in TB cases when the HIV epidemic first hit; since then we’ve seen a leveling off,” he says. “In terms of epidemiology, it’s interesting to note that many cases we’re now seeing are in foreign-born individuals. We live in a global world, and we need to be aware that constant vigilance and aggressive, early recognition of latent and active disease will prevent further spread.”

Most people infected with tuberculosis don’t have any symptoms. When a patient is positive for latent TB, the clinician looks at the risk factors and determines (based on criteria from the Centers for Disease Control) whether the person is a candidate for preventive medicine.

“Preventive medicine is a lot easier than treating the active form of the disease,” Dr. Parodi says. “With latent disease we can treat with one drug, as opposed to active disease, where we typically have to use a minimum of four drugs initially.”

Patients who develop active TB experience symptoms such as weight loss, fever, night sweats, cough, chest pain and bloody sputum.

“Until susceptibility results are available, empiric initial treatment for active TB should include four drugs: isoniazid, rifampin, pyrazinamide and ethambutol,” says Mark Abramowicz, MD, editor-in-chief of The Medical Letter on Drugs and Therapeutics, a non-profit newsletter that critically appraises drugs. “When susceptibility to isoniazid, rifampin and pyrazinamide has been documented, ethambutol can be omitted.”

DIRECT PATIENT OBSERVATION NEEDED

One of the greatest problems in TB treatment today is the emergence of drug-resistant strains of the bacteria.

“Poor adherence to TB therapy is the most common cause of treatment failure, and can lead to drug resistance,” says Dr. Abramowicz. “Medical Letter consultants recommend that most patients, including those with disease due to drug-susceptible strains, take drugs for active TB under direct observation.”

At Kaiser, patients with active TB are monitored closely, typically with a monthly office visit. Kaiser physicians sign the orders for directly observed therapy, which is provided by the county public health department.

“We provide medications, lab testing to monitor potential side effects, symptom assessments, and imaging, x-rays or CT scans as needed,” Dr. Parodi says. “Protocols differ from jurisdiction to jurisdiction in terms of exactly who gets directly observed therapy, but in our experience, most counties are aggressive. If there is an identified case of active, potentially contagious TB, that person is receiving directly observed therapy.”

Extensively drug-resistant TB is a form of the disease caused by strains that are resistant to all the most effective anti-TB drugs. The World Health Organization reports that 41 countries have cases of extensively drug-resistant TB, including the United States.

“Confirmed multidrug-resistant tuberculosis and extensively drug-resistant tuberculosis should be treated with directly observed therapy in collaboration with a clinician familiar with management of these conditions,” says Dr. Abramowicz. “Regimens for these conditions must include at least four drugs to which the organism is susceptible; the duration of therapy usually should be 18 to 24 months.”

In recent years, researchers have made considerable progress toward developing new medications that could treat tuberculosis more effectively. Eleven new medications from seven different drug classes are currently in clinical trials for tuberculosis.

“The medications that are farthest along are antibiotics called fluoroquinolones, which have the potential to shorten the duration of therapy,” says Eric Nuermberger, MD, associate professor of medicine and international health at Johns Hopkins School of Medicine, who is on the faculty of Hopkins’ Center for Tuberculosis Research. “Current medications require six to nine months; we hope fluoroquinolones will reduce that to four months. Four phase II studies of fluoroquinolones are currently underway, and we should have an answer in about two years.”

Fluoroquinolone drugs are already on the market in the United States for acute conditions such as community-acquired respiratory tract infections and urinary tract infections.

Of the medications that are being developed solely for tuberculosis, the one that’s furthest along is TMC207, developed by Tibotec.

According to a recent study in The New England Journal of Medicine, when researchers added TMC207 to a standard regimen for multidrug-resistant tuberculosis, a significantly higher proportion of patients had negative sputum cultures at two months.

Elaine Zablocki has been reporting on healthcare for more than 20 years. She is based in Oregon.

This article is based on information supplied by The Medical Letter (www.medicalletter.org), a non-profit organization that publishes newsletters offering critical appraisals of new drugs and comparative reviews of older drugs. The Medical Letter is independent of the pharmaceutical industry and supported entirely by subscription sales. Institutional site license inquiries can be sent to info@medicalletter.org [info@medicalletter.org]

Squeeze out waste

Understandably, the painstaking scrutiny of healthcare costs has reached a fever pitch. While administration is a relatively small percentage of the overall costs in the system, the pressure is on payers to trim as much waste from their operations as possible.

Administrative costs—or any outlays that are not specifically tied to medical care—are a political hot button. Insurers defend what they spend on tasks such as case management and disease management as well as investments in technology as necessary spending that results in net savings and improved health. Some critics of the insurance industry characterize administrative costs as nothing more than profits and executive compensation and seek legislation to control how premium dollars are spent.

In fact, 15 states have implemented laws dictating minimum medical loss ratios (MLRs), ranging from 50% to 80%. In 2008, California Governor Arnold Schwarzenegger vetoed a bill that would have forced insurers to maintain an MLR of 85%.

According to America’s Health Insurance Plans, in a 2008 study conducted by PricewaterhouseCoopers (PwC), 87 cents of every premium dollar goes to healthcare and medical services, and just 3 cents goes toward profits.

PASSING THE BLAME

Governments are taking some steps that could eventually result in lower healthcare costs, such as smoking bans in public places and removing soda and sugary snacks from school vending machines. On Jan. 1, 2010, California became the first state to ban the use of trans fats in restaurants and bakeries. New York City adopted a similar ban several years ago.

Nonetheless, it was inevitable that scrutiny would intensify on payers and their efforts to reduce costs and minimize wasted resources in the system, and now that it has, they’re possibly receiving more blame than is fair.

“When people look at waste in claims processing, for example, they assume [all of the money is being wasted] by insurers, when a lot of it is wasted by providers,” says Mark Merlis, a health policy consultant who has written several papers on the topic of healthcare waste. “But in fairness to providers, they have to comply with many different insurers’ administrative processes, so we should be doing as much as we can to promote uniform transactions.”

Merlis says the more uniformity that can be achieved among payers, the more money the system overall is going to save. Market complexity makes it difficult to identify who is “committing” the waste. Furthermore, cutting waste from one area might simply shift costs to another. For example, in an attempt to fight losses from fraud, payers could investigate more claims in detail, but that will delay payments to providers, damaging relations and potentially resulting in legal action under prompt payment laws.

TECHNOLOGY TO THE RESCUE

The siloed yet sprawling nature of the U.S. healthcare system—payers, physicians, pharmaceutical companies, hospitals, government agencies and consumers—means that waste elimination isn’t as easy as making an individual organization operate more efficiently.

Some Americans, including some physicians, believe a shift to a single payer system would simplify healthcare administration, but the large majority is firmly opposed to such a change. As Merlis points out in his paper, “Simplifying Administration of Health Insurance” (January 2009), complexity is not just a byproduct of the insurance system—it is what insurers are selling.

“The value-added of the managed care industry consists of the very features that make insurance complicated: different coverage rules and formularies, authorization requirements and careful scrutiny of claims, and so on,” he writes. “The variations are what differentiate one plan from another, and competition and uniformity may be conflicting goals.”

Still, that doesn’t mean plans can’t improve their internal operations and their relationships with other healthcare stakeholders. There are also high hopes that technology can eliminate some waste in the system, and at least one project is proving that to be true.

In 2008, Blue Shield of California (BSC) created its Partnership in Operational Excellence and Transparency (POET) transactions-tracking tool to improve payment accuracy and dispute resolution, speed claims turnaround, and increase operational transparency. The program is available online for 90 of the hospitals Blue Shield of California contracts with across the state.

“POET has been enhancing our working relationships with network hospitals by providing opportunities for data-driven discussions that directly improve operational efficiencies,” says Juan Davila, the plan’s senior vice president for network management. “Using key claims performance indicators and transparent claims data, we work jointly with our facilities to target and prioritize impactful process improvements.”

Davila says the claims-processing related improvements have been impressive, and the benefits of improved relations with network providers are even more so.

“We wanted to show that we were really trying to get at the root of the problem,” he says. “We paid for the system up-front, and we were increasing our transparency to them, as opposed to trying to cover up our errors. We genuinely wanted to develop a more collaborative relationship with our network hospitals, and that’s changed the way we think of each other in a very positive way.”

The hospital association of Southern California recently approached BSC to help the association with another large-scale project.

“I have been in this business for 20 years and have never gotten a phone call like that before,” Davila says.

Within administrative functions, such as those BSC is addressing, it’s hard to know exactly what is waste. A 2008 study by PwC’s Health Research Institute, “The Price of Excess: Identifying Waste in Healthcare Spending,” points out that “inefficiency” and “waste” are not interchangeable terms; the former is merely one component of the latter.

Authors define waste as costs that could have been avoided without a negative impact on quality, which is similar to the definition used by the Institute of Medicine and the authors of another watershed study conducted by Thomson Reuters in October 2009: expenses that don’t add value.

WHERE TO FIND WASTE

The PwC research estimates that slightly more than half of all healthcare spending ($1.2 trillion of the annual $2.2 trillion spent) is wasteful and breaks it into three categories:

• Behavioral waste, which accounts for $303 billion to $493 billion each year;
• Clinical waste, accounting for $312 billion annually; and
• Operational waste, which consumes $126 billion to $315 billion.

The study further breaks the operational waste segment down into four subsets:

• Claims processing, which accounts for $21 billion to $210 billion in waste;
• Inefficient use of technology ($81 billion to $88 billion);
• Staff turnover ($21 billion); and
• Paper prescriptions ($4 billion).

The research by New York-based Thomson Reuters Healthcare Analytics (October 2009) is slightly less pessimistic, estimating that each year, between $600 billion and $850 billion of healthcare spending is wasted.

The study, “Where Can $700 Billion in Waste Be Cut Annually from the U.S. Healthcare System?” identifies six primary culprits:

• Unnecessary care (40% of waste), accounting for $250 billion to $325 billion;
• Fraud (19%), $125 billion to $175 billion;
• Administrative inefficiency (17%), $100 billion to $150 billion;
• Healthcare provider errors (12%), $75 billion to $100 billion;
• Preventable conditions (6%), $25 billion to $50 billion; and
• Lack of care coordination (6%), $25 billion to $50 billion.

Those figures are so staggering that the system can’t expect to “cut” its way out of them, according to Bob Kelley, Thomson Reuters’ vice president of healthcare analytics and author of the report.

“Simple external controls on cost and utilization will not work, and any effort to control costs by eliminating waste must be careful to consider possible unintended impact on access to appropriate and necessary care,” he says. “We should expect that any change to the system of care that improves its performance will require a realignment of the types and levels of professional and facility resources and the relationships among these resources.”

The best solutions will effect positive changes and recognize that the healthcare market dynamic is much different from other product or service markets. Most consumers believe that their access to all potentially useful services is a right.

“We need to shift the public’s perception and expectation [of quality] away from ‘more services is better’ to ‘the care that will most likely result in the outcomes that are best for me,’” he says. “Simultaneously, we must begin to reward physicians for providing this type of care, and recognize and pay for the required time and effort.”

CONSUMER BAD HABITS

Shifting public perception is critical, because for many Americans, “waste in healthcare” brings to mind images of bloated, lethargic mega-plans with outdated technologies and overpaid, fat-cat executives. Although the U.S. Centers for Disease Control and Prevention estimate that fully half of the nation’s deaths each year are the result of bad and avoidable habits, most Americans, rather than look in the mirror, latch onto headlines about excessive health plan profits and executive bonuses.

When consumers learned that former UnitedHealth Group CEO William McGuire received more than $124 million in total compensation in 2005, it’s understandable that many of them reacted with indignation. While the public’s sensitivity to what they perceive as excessive income is at an all-time high, salaries and bonuses paid to health plan executives are a very small number in a very large sum, according to Dan Munro, principal with The DMM Group.

“If you added up all of the executive bonuses and salaries for the entire healthcare industry, it would just be a drop in the bucket compared to the other costs,” he says. “Healthcare is nothing at all like Wall Street, where firms are racing to pay back their Troubled Asset Relief Program funds because they want to go back to handing out those huge bonuses again.”

Merlis agrees, saying executive compensation “might look ugly when you see how much money certain people are being paid, but it’s really not a driver of healthcare expenses.”

It’s clear that politicians are doing what they can to foster greater use of technology in healthcare, particularly with federal funding included in the stimulus package to spur greater adoption of electronic medical records, which are not yet widely adopted.

“The government is trying to encourage the meaningful use of electronic health records,” Munro says. “For the first time, the government is mandating that EHR applications engage the consumer. If you tell most EHR vendors that you’re going to develop a patient-focused system, they’ll laugh at you. They have always been provider-focused, because that’s where the money is.”

An EHR system can cost millions of dollars, so small providers are less likely to adopt them simply because of the cost. The government has realized that use of health IT won’t progress if it doesn’t engage the consumer, Munro says.

THE OPPORTUNITIES ARE REAL

To further explore IT’s opportunities to improve healthcare, Kelley and Thomson Reuters are working on a follow-up whitepaper highlighting specific initiatives that have been successful in eliminating waste, or that show the potential to do so.

“There are certainly high expectations for the contributions of IT to both improved quality and reduced waste,” he says. “Many of these initiatives are either directly related to new or enhanced IT applications or require IT system support to enable new relationships between providers, or between providers and patients.”

Examples of the first type include electronic medical records, health information exchanges, and clinical registries. Examples of the second type include patient-centered medical homes and bundled or episode-based payment systems.

“I think that these opportunities are real, but changes in the systems of care and the relationships among providers and patients will be required if the great potential for these solutions is to be ultimately realized,” he says.

According to Davila, BSC’s POET program is improving efficiencies at the larger system level.

“Historically, when we would show up to renegotiate a contract, the hospital representative would say, ‘My people are telling me that you don’t pay your claims right, you don’t handle appeals well, and you owe us X million dollars. Before we recontract, I need you to fix that.’ The result, inevitably, was a lot of negative energy.”

To solve the problem, BSC worked with a third-party vendor to develop a system that enables participating hospitals to review 24 months of processed claims information and performance metrics on the POET Hospital Dashboard, an online performance analytics portal specifically designed for those hospitals.

Those facilities routinely receive quarterly claim summary reports that provide information on key indicators such as cycle time; submission type; denial volume and reasons for denial; appeal volume, outcomes, and reasons; and claim volume for patients with Bluecard, a national program that allows any Blue member to receive care from another Blue company when traveling or living outside of their usual service area.

“It’s all right there in black and white for everyone to see,” Davila says. “One national hospital system was upset because they thought we weren’t paying as quickly as we should, until POET revealed the problem: We were paying the claim in 12 days, but it was taking them 25 days to get the claim to us. The system showed them exactly where the process was broken so they could fix it.”

PHYSICIANS’ WEIGH THEIR COSTS

The need for such transparency is significant, according to research from the American Medical Assn. Its second annual National Insurer Report Card study attempts to diagnose the strengths and weaknesses of the claims processing systems used by eight of the nation’s largest health insurers. Five of the eight plans showed improvements in the median amount of time necessary to respond to providers’ claims, but the report estimates that providers still divert as much as 14% of their revenue to ensure they are receiving accurate payments.

Physicians reported spending three hours weekly interacting with plans in 2006, according to a Web Exclusive produced by Health Affairs in May 2009. When time is converted to dollars, the cost to practices is estimated at $23 billion to $31 billion annually, or 6.9% of all U.S. expenditures for physician and clinical services. Further, 45.9% of physicians surveyed for the report said the cost of dealing with health plans had “increased a lot.”

The report goes on to note that administrative cost cannot be reduced to zero dollars and that interactions that cost money also can produce benefit, such as prior authorization, which can reduce inappropriate use.

Making Infection Control Central to an ASC’s Operations

In my parallel life, I also edit one of our company’s sister publications, Infection Control Today (ICT) magazine, so as you can imagine, infection prevention in all healthcare environments is dear to my heart. I have been following closely the new conditions for coverage (CfCs) issued last year by the Centers for Medicare and Medicaid Services (CMS) addressing infection control in ambulatory surgery centers (ASCs), and the sense of panic that these CfCs have triggered. ASCs have traditionally enjoyed a very low infection rate, but some rather high-profile infectious outbreaks at outpatient facilities prompted a greater investigation by the government into the state of infection control at surgery centers and a few bad apples have forced a new regime. But perhaps that’s a very good thing in disguise. It’s true that human nature being what it is, people don’t always do what they are supposed to do, and so rules are made to enforce mandatory compliance. It’s always a shame when doing the right thing must be legislated instead of met voluntarily, but the bright spot in the new CfCs relating to infection control is the hope for even better patient outcomes — a distinct hallmark of the ASC industry in the first place.

In this issue you’ll meet Bruce Wallace and Anthony Pings, two people who have made infection control the focus of every decision they have made in the design and development of Renaissance Surgical Arts at Newport Harbor, LLC, a brand new multi-specialty ASC that will surely be a destination for healthcare in the Orange County, California region. Central to the center’s long list of innovations is the numerous concessions made to making infection control an imperative, from the multi-chamber sterile and substerile areas in between the operating rooms, to the extensively automated surgical device and instrument sterilization systems, to the use of touchless scrub sinks and surfaces impervious to bacteria.

The height of health IT

Even health insurance giant WellPoint—with more than 35 million members and arguably enough reach to change the system with sheer volume alone—is taking few chances on the future of healthcare delivery. Like most plans, it’s testing new programs with cautious optimism, while aiming for large-scale implementation.

Charles Kennedy, MD, WellPoint’s vice president for health information technology, has a vital role in the plan’s innovation because few initiatives these days can be accomplished without the backbone of health IT.

Specifically, WellPoint’s emerging Individual Health Record—a simultaneously patient-facing and physician-facing electronic record—is “almost an air traffic control system to manage disease,” according to Dr. Kennedy. It’s probably one of the most promising efforts to control costs among members with chronic conditions. Pulling claims and clinical data through complex algorithms to arrive at a functional health summary differentiates the Individual Health Record from the typical EMR system.

“If you’re a hospital or institution, you have a variety of clinical data sources that have information on the patients that you see,” he says. “If you haven’t deployed an interface engine or some way of pulling those various clinical data sources together, you’re late to the party, and you need to do that ASAP.”

With more than 20 years of experience comprised of clinical practice and health IT implementation, Dr. Kennedy began his career in internal medicine. When he was a resident at Highland General Hospital in Oakland, Calif., he noticed how the patients’ needs far outstripped the hospital’s resources, and that experience solidified his vision of where medical care and information should meet.

“We tried to treat each patient regardless of who they were or their ability to pay,” he says. “It had the unfortunate side effect that we never thought about cost. We only thought about what was right for a patient. But that created a system where people are actually being hurt because they can’t afford care. I began to realize that the very laudable and applaudable approach of not caring about cost—only the patient—is right, but that doesn’t mean you can become cost unconscious. Cost unconsciousness has its own set of bad outcomes. That’s what’s led me into thinking we need to be more efficient. We need health IT.”

Earlier this year, Dr. Kennedy was named by the Government Accountability Office as a member of the new Health Information Policy Committee, which was established by the American Recovery and Reinvestment Act. Serving a three-year term, he and other committee members are creating policy framework for the development and adoption of a nationwide health IT infrastructure, including standards for the exchange of patient information. The committee will also make recommendations for handing out the $38 billion in health IT funding earmarked in the reinvestment act.

WHAT ARE SOME OF THE HEALTH INFORMATION POLICY COMMITTEE’S GOALS?

A:We’re trying to make sure the Obama health reform strategy becomes real. What people don’t realize is the number of things the industry and the government agree on. For instance, the government invested $1.1 billion in comparative effectiveness research.

The stimulus bill has $38 billion in it for health IT, and we’re trying to help the government develop policies to spend that money wisely. Our function is to say, ‘How do we take this incredible resource that Congress and the President have given us, and how do we turn it into an investment that creates healthcare value for the whole country?’ It’s a massive undertaking.

Our first objective was to ensure that the money from the stimulus package paid out over five years created value. We asked ourselves where we wanted to be five years from now, and then we worked backwards from there.

Deploying computers is not the goal. Having physicians and patients use computers to create better care at a lower cost is the goal. To do that, we have to set the bar high for the care system. Not only must you use the computer, you must use it in a meaningful way for better care. These are the ‘meaningful use’ criteria that we’ve published.

If we distribute a substantial number of computers, and physicians don’t use them, we won’t be successful. We didn’t want to focus on technical measures. We created the meaningful use criteria, and every single one is clinical.

We want physicians to achieve a clinical result, and we want information technology and the money in the stimulus package to be a contributor to that improved clinical result. For instance, one of the criteria is to avoid 1 million heart attacks and strokes by 2015. Another is to make cardiac disease no longer the leading cause of death in the United States. Those are stretch goals. That is not something simple and trivial.

It would have been much easier to say, ‘Our goal is to make sure 90% of physicians have computers.’ But we consciously didn’t do that because we recognize that health IT is a tool and that other changes need to happen.

HOW WILL THE INDUSTRY ACTUALLY ACHIEVE MEANINGFUL USE AND OTHER MILESTONES?

A:The law is actually quite specific in defining what a qualified system is, and we have a subcommittee that’s identifying the actual entity—such as the Certification Commission for Healthcare Information Technology (CCHIT)—that will assess systems as to whether they qualify or not. The bigger challenge is data integration.

Everyone recognizes that healthcare is horribly fragmented, that there are silos of care. We know that there’s massive inefficiencies, and there are significant quality concerns because information is not shared as people move across silos.

The challenge with data integration is that we really haven’t figured out how to do it correctly. If you’re an integrated delivery system and you buy one EMR, that’s fine, and that works. But 70% of physicians practice in a community setting, solo and small group practice. You have this tremendous problem that all of these systems are different. They call things by different names, and they even capture different sets of data.

WELLPOINT HAS CREATED THE INDIVIDUAL HEALTH RECORD SYSTEM THAT USES ALGORITHMS. HOW WILL THAT MAKE A DIFFERENCE?

A:Algorithms, also known as decision support, are going to be the key to getting value out of these systems. Let’s say the federal government funds a comparative-effectiveness study that identifies a new drug is great for certain people. In today’s world, we know it can take up to 17 years for that to be commonly found in a physician’s paper record. With this approach, you can create an algorithm as soon as physicians or specialty societies have decided on certain best practices. Now you’ve created an infrastructure to get that message to every doctor, but only when there’s an appropriate situation for that rule to be applied. That will take that 17 years down to 17 days. That’s a huge advance.

Let’s say we have noticed that there’s a lot of inappropriate use of PET scans. In today’s world, a doctor would have to call us for preauthorization every single time he orders a PET scan. In the future, the algorithms will be running, and they will only alert the doctor if there’s an issue with a PET scan. Today, they call 100% of the time, and we generally approve the scan more than 90% of the time. Algorithms will take hassles, administrative costs and bureaucratic burdens out of the system.

The right kind of health IT allows us to use new knowledge from our outcomes research subsidiary [HealthCore] and any gaps in a member’s care identified by our informatics company [Resolution Health] in much more effective ways. The right kind of health IT allows these advances to be applied real time at the point of care while the doctor is treating the patient or helping the patient at home.

IS WELLPOINT’S INDIVIDUAL HEALTH RECORD WORKING? HOW IS IT ANY BETTER THAN OTHER EMRS OR PHRS?

A:We’ve run a pilot in Dayton, Ohio. The idea was not just to create interoperability—don’t just allow System A to talk to System B. When you connect systems together, what you create is just a data dumpster. It’s like putting a jigsaw puzzle on a physician’s desk.

That information has to be organized to just the summarized information that the doctor needs…You don’t take all of the information out of these various systems, you only take the information necessary for the ongoing management of the patient.

Many EMR implementations have failed to show value. About 30% of the time, physicians will actually turn them off because they are incredibly time-intensive and will reduce a physician’s productivity. That will hit them in the pocketbook. We’ve looked for solutions that wouldn’t be so intensive from a physician’s data-entry perspective and would do more sorting of information and presentation of information.

Physicians are not data generators. They’re data consumers. Their orders create significant amounts of data, but the physicians themselves usually just scribble a relatively brief note. The problem with many EMRs is they will require physicians to become data-entry clerks.

In Dayton, Ohio, we have a very significant market share. We’re Anthem Blue Cross Blue Shield of Ohio, and we also have a strong partnership with Kettering Hospital Network.

Kettering had already installed an application integration solution, so even though they had 120 different clinical sources, many of those clinical sources could be accessed through infrastructure they had already built. That made it easy for us to collect all of the clinical data out of their systems. We built feeds to the application from Anthem’s claims systems. We were able to get this application up and running in a little over three months, which is incredibly rapid. We made it available to the patient in the form of a PHR and to the doctor in the form of a CCHIT-certified EMR with e-prescribing.

When we looked at who was using the tool, we found that patients who had a higher illness burden actually made preferential use of the tool. For many of the tools we’ve deployed, the ‘worried well’ have been the type of people who used it, not the people with the chronic disease that we really need to reach.

We noticed the people who used the tool and had the higher illness burden, their cost increase year over year was actually less than the people who didn’t use the tool, even though those people who didn’t use the tool were healthier.

We built algorithms in the system that exactly correlated with various HEDIS measures and every time the doctor or the patient logged on, they could see their exact compliance. By giving the patients and the doctor the same information in a simple red light, yellow light, green light format with algorithms enabled us to see quality improvement scores of anywhere from 10% to almost 40%.

WHAT’S THE BUSINESS CASE FOR A HEALTH PLAN TO CREATE A SYSTEM LIKE THAT?

A: Our strategy is maximizing healthcare value, and healthcare information technology is really a tool to get you there. But it has to be the right kind of health information technology. It has to influence doctor’s decisions, and you have to present sufficient clinical data—not mountains of data but the key things the doctor needs to know so that you can influence his decision to do something that’s consistent with the evidence base, or to prescribe a drug that will cost the patient less but has the same likelihood of creating a good patient outcome.

If you look at why healthcare spending is out of control, it’s chronic disease, not health plan profits and not health plan administrative costs. We are seeing an explosion of chronic disease in this country, and chronic disease is managed largely by the patient at home. They’re managing their diabetes 99% of the time at their home, not in the physician’s office. If you don’t make your health IT solutions patient-centric and if they don’t address chronic disease, I don’t think that you’re going to get the kind of value that you want.

HOW ARE THE PHYSICIANS EMBRACING THE INDIVIDUAL HEALTH RECORD?

A:We have 300 physicians using the system now. We’re planning for a broader rollout to the greater Dayton area in 2010 to virtually all primary care physicians.

What we’re focusing on is chronic disease management, and there’s not huge debate about many of the things that need to be done to take care of these patients. That’s not the problem. The problem is actually getting it done. The physicians in general have been positive and are beginning to see how their lives could be easier.

We also added all of our pay-for-performance rules. We pay physicians more if they practice medicine consistent with the evidence base, and we took the existing measures and turned them into algorithms in the system. As long as the physician follows all the alerts, he can be sure that he’s going to maximize his pay for performance incentive. That’s convenient for the doctors because what they usually have to do is identify the patients who haven’t had certain interventions and then reach out and call them.

We’re just starting to incorporate our utilization management rules. If we can begin to move those algorithms to the point of care, then physicians might not have to call except for when there’s a real reason to discuss something, which might be 5% of the time.

DETERMINING THE EFFECTIVENESS OF TREATMENTS IN ORDER TO BUILD THE ALGORITHMS IS AN EXPENSIVE PROCESS. HOW CAN IT BE DONE?

A:This is the beauty of health information technology…if you bring it together in a repository that’s reflective of the patient’s clinical condition and how they’re being managed, you can begin to do database-driven studies rather than very expensive prospective clinical trials where you’re enrolling patients and following them over time. You can begin to do database driven studies that are a fraction of the cost. No, they’re not the gold standard, which will always be a randomized perspective-controlled clinical trial, but there’s a lot of information we’re going to be able to glean out of database-driven studies that are more observational and more retrospective.

BE A VISIONARY. WHAT DO YOU SEE AS THE POTENTIAL FOR HEALTH IT?

A: I hope that every time a patient needs information when they’re home or need to take care of their chronic disease or want to stay well, that they have that information at their fingertips, it’s actionable, and they don’t even have to think about it. If we can make it that easy—and there is a path to get there—we could actually fix the healthcare system.

Charles Kennedy, MD, has held strategic health IT positions with a variety of organizations. He also served as the medical director of a California health center in addition to other clinical service. He earned an MBA from Stanford University, an MD from the University of California at Los Angeles, and a bachelor’s degree in genetics from the University of California at Berkeley.
” Physicians are not data generators. They’re data consumers.”

Rituximab may help with severe Graves disease

Rituximab, often used to treat autoimmune disorders, has shown efficacy in a small group of patients with severe Graves’ eye disease, researchers said. These patients experienced rapid improvement of their symptoms, improved vision, and “significant reduction” in inflammation around their eyes and optic nerve, the University of Michigan’s Kellogg Eye Center said in a news item. These patients had been steroid non-responders.

Raymond S. Douglas, M.D., Ph.D., had previously studied the six patients while on staff at University of California at Los Angeles. In the current study, Dr. Douglas observed improvement among the patients, four of whom were women, as early as 4 weeks following the first infusion of rituximab, the university said. Researchers also observed that the positive results were sustained 4 to 6 months after treatment.

Package products for new markets

Even with major industry changes looming, new players are entering the managed care market amid the uncertainty. Experts believe the strategy has promise.

“All the stuff being promoted in the reform language is what we’ve been planning to do the last three years,” says Martin Watson, the CEO of SeeChange Health, the first new insurance company to launch in California in 20 years.

Watson says SeeChange, which offers a product for small businesses designed to reward proactive health management with reduced premiums and copays, can adapt to changing legislation.

Healthcare economist and MHE editorial advisor J.D. Kleinke agrees.

“Sometimes it easier to come in fresh than to adapt,” Kleinke says. “Big insurance companies, such as WellPoint or Anthem, are all good, but they operate gigantic organizations with an older workforce that has been doing the same old thing since the ’80s. Sometimes it’s easier to teach new dogs new tricks.”

To become the organization of choice in the healthcare world, Kleinke says, companies will need to be innovative. The rules are in flux, and the leading success factor is going to change under a reformed system. The landscape will likely depart from medical underwriting and move toward delivering good quality service for a competitive price.

“It’s not going to be who can avoid risk or who can avoid sick people,” Kleinke says. “It’s going to be those that take all comers. There are tons of people who are terrified that they are going to get cancer, who will be happy to write a check to someone that hasn’t been screwing them for the last 10 years.”

Insurance companies stand to gain millions of customers if they play their cards right. According to the U.S. Census Bureau, nearly 47 million Americans under the age of 65 were without health insurance in 2008. Once healthcare reform is enacted, the uninsured will be driven into the market with subsidized coverage, says Kleinke.

With the market expanding, the products that will come out ahead will be those that become available before 2013 and meet requirements of new regulations.

“If they can package a plan that anticipates the reform era, [health plans] are going to clean up,” Kleinke says. “They are going to have the momentum and the excitement of the passage of the bill. It’s a great marketing pitch to somebody and their family for a company to be able to say they are the first ones to have a plan based on the new Obama reality.”

It’s too early to tell whether plans like SeeChange will emerge as leaders. Watson believes the key is to stay ahead of the competition.

Health plans prepare for legislation to pass

While the U.S. House and Senate wrangle over the final healthcare bill, health plans aren’t sitting idly by waiting for the future to arrive. There are a number of trends plans can expect to affect business in 2010 and beyond.

The economy is still a wild card, but is showing signs of recovery. If the economy does improve, and more jobs are created, then health plan membership will also improve. If the economy doesn’t continue to improve, health plans must be prepared to focus even more on retaining and attracting members, according to Tom Epstein, vice president for public affairs, Blue Shield of California.

“Health plans need to develop products that are easy to understand and administer to prepare for the exchange environment,” he says. “We must also take strong action to hold the line on costs while improving care coordination and incentivizing quality care.”

Epstein says health plans will continue to seek partnerships and try new programs and technologies to improve the quality of care and lower costs.

“At Blue Shield we are piloting a new program with a medical group and a hospital where we all share the risk for providing coordinated care at a lower cost for a major customer,” he says. “Health plans will also bring more processes online to provide faster and more accurate service at a lower cost.”

Chile’s healthcare offers public and private plans

As healthcare legislation muddles through Congress, the United States could stand to learn a few lessons from Chile, such as its effective public/private partnership and guaranteed care for those with certain chronic diseases, as well as a growing emphasis on primary care and cost-effectiveness. The Academy for International Health Studies (AIHS) sponsored 50 executive delegates who traveled to Santiago, the capital city, this fall to observe the country’s health infrastructure.

Chile boasts life expectancy of 78 years, compared to that of the United States at 77.7 years of life expectancy. In just 15 years, the country has seen a 50% reduction in child mortality and can boast an insured population of more than 90%.

Unfortunately, 13.6% of Chile’s 16.9 million people—40% live in the Santiago metropolitan area—are impoverished, and 10.8% are plagued by unemployment. The Ministry of Health, however, reports that 98% of Chileans have drinkable water, 99.5% have electric lights and 89% have sanitary sewers.

MOST HAVE PUBLIC INSURANCE

The Ministry of Health is the governing body responsible for establishing health policies and for reinforcing their compliance. Under its auspices fall the public healthcare system (referred to as FONASA) and regulatory responsibility for private health insurers (referred to as ISAPREs).

The majority of the population (67%) is insured under FONASA, while 14.8% opt for insurance provided by ISAPREs. The remainder is covered by other private plans, and a fairly small percentage is uninsured. Healthcare is funded by a universal income tax deduction of at least 7% of every worker’s salary and supplemented by government to cover indigents and public health programs.

Beneficiaries in the public program are segmented into four classes based on income and subsidized accordingly. In addition, many private insurers encourage people to pay an amount above the 7% to upgrade their basic health plans.

FONASA is financed with 48% public funding, 32% individual financing and 18% copayment, while 70% of ISAPREs funding comes from individual financing and 30% from copayments. Unfortunately, the costs of caring for people don’t align with the number targeted or with risk. While the sectors equally receive 7% of wages, the public sector cares for about five times more people than the private sector. ISAPREs spend twice as much on members as FONASA does on its higher risk beneficiaries.

The public sector not only serves as the primary insurer, but also the largest healthcare provider. The state owns and operates two-thirds of inpatient capacity with 200 hospitals, 2.3 hospital beds per 1,000, and 1,000 ambulatory medical centers. FONASA covers 90% of those over 65 (11.5% of the total population in 2005, which is expected to grow to 28.2% by 2050). ISAPREs’ tightly regulated premiums are age/gender adjusted and therefore, premiums are higher for women and seniors, so seniors opt for FONASA.

Chile’s public insurance offers one plan at variable prices, while ISAPREs offer 13 plans, each of whose prices remain constant. Even if Chileans are covered under FONASA, they can access a private provider with a copayment tied to the amount of their income. A survey by the Ministry of Health shows there is overwhelming satisfaction with both the private (96.4%) and public (82.2%) healthcare systems in Chile.

DIGGING INTO REFORM

Spending 5.4% of gross national product, or about $689 per capita, on healthcare, Chile is still readjusting to a reform initiative that began in 2002. It is tackling objectives in phases.

Initial goals are to address inequities and disparities in healthcare, strengthen the focus on primary care, reduce waiting time in the public sector, introduce more competition into the ISAPREs market, improve efficiencies and care for the ever-growing senior population.

Among the new laws that are key to reform is what’s known as the AUGE Plan (in English: the plan for universal access with explicit guarantees). AUGE specifies four basic guarantees for healthcare concerns related to 56 defined health conditions, based on the highest burden of disease, effectiveness of treatments and highest cost. Guarantees include: access, timeliness, quality and financial protection. Twenty four more conditions are slated for inclusion next year.

In short, AUGE guarantees a basic, uniform benefit plan, which applies equally to beneficiaries of public and private insurers.

“If you are a supporter of Chile’s reforms, AUGE guarantees access and assures quality,” says Bruce Pollack, president of AIHS and MHE editorial advisor. “Detractors refer to the methodology as rationing.”

One delegate, Gabriel Hanna, president and CEO of DC Chartered Health Plan based in Washington, D.C., says he does not believe that there is any competition between the public and the private healthcare sectors in Chile.

“Those who can afford to buy private coverage will receive much better access—no waiting list—to a somewhat better delivery system. On the other hand, competition among private insurers seems to exist based on levels of care and price; however, with only 13 private insurers to serve the entire country, it appears to me that there is some competition, but it doesn’t appear to be fierce,” Hanna says.

Chile has a public plan covering the majority of lives, but it is not driving the private plans out of business, according to delegate Margaret Murray, CEO, Association for Community Affiliated Plans also in Washington, D.C.

Standards in Chile’s public sector need a bit of tweaking, however. Since many low income people can only opt for the public system, there is little incentive for high performance, quality and efficient management from providers. More than 1 million members are currently on a waiting list for AUGE services, including 117,000 surgeries as well as hundreds of thousands of medical appointments.

AIHS delegates had an opportunity to visit a pre-eminent 270-bed, for-profit hospital, Santiago’s premier tertiary care public hospital with 340 beds, and a 403-bed private hospital that also serves a significant proportion of public patients. Delegates observed the comparatively superior access, negligible waiting lists and private rooms that come with the private hospitals.

Another field trip took delegates to the 216-bed Clinica Las Condes, accredited by the Joint Commission International, which benefits from a 10-year affiliation with Johns Hopkins Medicine International and the institution’s expertise.

TECHNOLOGY LEAVES A PRINT

Many delegates agree that one of the most memorable discoveries was the innovative fingerprint technology used by all public and private providers to immediately verify eligibility and benefits.

The biometric identification system captures the impression of a patient’s fingerprint, which is then used as proof of identity. The technology can also generate electronic vouchers to cover specific medical exams, procedures, treatments and consults. It is not surprising that a California Silicon Valley company is responsible for the technology.

Clinica Davila also utilizes color-coded electronic boards in its outpatient and inpatient departments, which indicate the status of patients in the clinic. As one clinic physician put it, Chile falls somewhere between being a “developing and a developed country.”

“Chile’s healthcare system does an admirable job of providing reasonably good care at remarkably low cost,” Pollack says. “A national focus has been on public health and access while guaranteeing nearly universal coverage. The public/private interface works and works well. The public option is not the option of last resort, but rather the first choice for most Chileans.”

Mari Edlin is a frequent contributor to MANAGED HEALTHCARE EXECUTIVE and has traveled with AIHS on previous missions.

Mari Edlin
The delegation from the Academy for International Health Studies included executives from public and private U.S. health plans

Green initiatives growing among healthcare facilities

From Recycling and waste management programs to nontoxic paint and permeable pavement, hospitals across the country are implementing green initiatives to produce healthier environments for patients and staff, which they say saves not only energy, but money.

Among several provider facilities going green is Stony Brook University Hospital, in Stony Book, N.Y., which recently signed an agreement with the U.S. Environmental Protection Agency (EPA). The agreement outlines energy and water conservation, waste management and the use of environmentally friendly products, and the hospital is currently auditing areas to reduce energy consumption.

“A hospital is unique in that it’s a structure that operates 24/7,” says Andrew Bellina, EPA program coordinator, “So, there are opportunities for powering down in many areas of the hospital that do not impact the people that are working or the care of the patients.”

He says the EPA is helping Stony Brook through the audit as part of its Energy Star program, which strives to reduce energy by 10%.

In addition, the hospital is taking on a number of initiatives designed to reuse materials and reduce material waste. For example, staff has eliminated the blue, disposable wrapping used for sanitary operating tools, says Bellina. Tools now arrive in reusable containers.

However, he notes, the hospital has to evaluate recycling from a practical standpoint while also maintaining strict accreditation standards. Even so, recycling at the hospital increased by about 420 tons in 2007 and 2008, and it is expected to be higher this year.

“It significantly affects your carbon footprint when you recycle waste instead of just throwing it out, because you don’t go through the actual mining, the treatment, the procurement, the manufacturing and the transportation,” he says. “You’re cutting all that out.”

Water conservation is another important aspect of the agreement struck with the EPA. Bellina notes water supply costs recently increased 20% in New York City. He predicts water shortages in as many as 36 states in the next three to five years.

The hospital is looking to conserve water in two ways. First, captured storm water can be reused for non-contact functions, such as watering lawns and landscaping. Second, he says, it will be important to reduce demand for water. The hospital is monitoring water use with equipment that limits water flow and reduces total use.

Going green will definitely show a return on investment in the long run, and in most cases, produce immediate savings, Bellina says.

“Five years ago it [going green] would have cost you money, and the payback would be seven, 10 or 12 years, but now there are immediate cost savings. For example, recycling is an immediate cost saver,” he says, “And you reap the economic benefits through the lifetime of the structure after that.”

Determining effects on the quality of care is not as easy, he says, but he postulates that once the hospital’s energy audits are complete and the air handling is upgraded to a more efficient mix of outdoor and indoor air, the quality of air will improve within the hospital. Better air means better health, especially for those who need respiratory care.

EAST CAROLINA HEART INSTITUTE

The East Carolina Heart Institute, which is attached to the Pitt County Memorial Hospital in North Carolina, has implemented both green and general health ideas into its structure, including ergonomic equipment, natural light and an energy efficient utility plant.

The structure has only been open for a year, but was built with energy efficiency in mind, according to Brian Floyd, executive director of the Heart Institute. It also contains recycled materials in the carpet as well as in bathroom, kitchen and ceiling tile.

Natural lighting is one feature that overlaps in the green movement and healthy hospital movement. An effort was made to light the Institute with large windows in patient rooms, physician work areas, waiting rooms, lobbies and cafes.

“Many studies show that people recover faster when they have access to sunlight, and we want to make people as comfortable as possible and acclimate them to the day and night cycles so they can heal faster,” Floyd says.

It also requires less energy to light the facility during the day. With the help of sensors, artificial lighting turns on only when someone is in the room and dims when natural light levels are adequate.

The utility plant powering the Institute operates on energy efficient air conditioning chillers, high-efficiency electric motors and variable-speed pumping and air flow systems, according to Floyd.

The monthly electricity expenses at the Heart Institute have averaged 30 cents per square foot, or $142,000 per month, since opening in January 2009, according to James Ryals, Media Specialist for the Heart Institute and Pitt County Memorial Hospital. To compare, over the same period, monthly electricity expenses in the main hospital have averaged 45 cents per square foot, or $533,000 per month. The main hospital was built in 1977, and is twice as big as the Heart Institute, says Ryals.

“The per-square-foot figures are a better basis for comparison than the monthly totals,” he says. “It’s safe to say that, with the efficiency measures we’ve taken, our power expenses at the Heart Institute are roughly 33% lower than the main hospital.”

Certain intangible cost savings, such as worker productivity, are harder to define, says Floyd, but he has noticed that retention of staff is higher and length of patient stays are shorter.

KAISER PERMANENTE MODESTO

Kaiser Permanente’s Modesto Medical Center in California is a pilot model for green healthcare facilities aimed at improving public health, according to John Kouletsis, national director of strategy, planning and design for Kaiser. The center is equipped with everything from solar panels on the roof, rubber flooring instead of vinyl inside the hospital and permeable pavement in the parking lot.

“We’re always looking at public health,” says Kouletsis, “so, to me it’s probably the least obvious things that I think are the most dramatic and the most impressive.”

Those not-so-obvious endeavors include eliminating toxicants from paint and upholstery and eliminating polyvinyl chloride (PVC) from flooring and carpet. There is a case for patient care: When a vinyl floor is cleaned, aerosolized particles release into the air and become asthma triggers.

“It’s ironic, because [these steps are] not very sexy, they’re not very eye-catching, but they actually have a much bigger impact on keeping people healthy,” he says.

At Modesto, calculating all the sustainable strategies show a cost savings of roughly $400,000 over what would have been spent on a typical project without those sustainable elements, Kouletsis says.

“A long-term savings in terms of public health is incalculable,” he says.

Kaiser looks at sustainability through a different lens than other providers, says Kouletsis.

“Our lens has to do with patient safety and workplace safety, and what we’ve discovered is that if you look through these two lenses first, you almost always get to a sustainable product,” he says.

Fewer hospital days for seniors in MA

Seniors in Medicare Advantage spent fewer days in a hospital, were subject to fewer hospital readmissions, and were less likely to have “potentially avoidable” admissions, for common conditions ranging from uncontrolled diabetes to dehydration, according to a new analysis of publicly available data released by America’s Health Insurance Plans (AHIP).

Key findings, produced from data from the Agency for Healthcare Quality and Research, include:

• Medicare Advantage beneficiaries in California spent 30% fewer days in the hospitals than patients with FFS Medicare, and in Nevada, seniors in Medicare Advantage plans spent 23% fewer days in the hospital.
• Medicare Advantage enrollees were readmitted to the hospital in the same quarter for the same condition 15% less often in California and 33% less often in Nevada compared with FFS Medicare.
• In California and Nevada, seniors in Medicare Advantage were 6% less likely than seniors in FFS Medicare to be admitted to the hospital for conditions described by AHRQ as “potentially avoidable,” such as dehydration.

“The findings are consistent with earlier studies indicating Medicare Advantage Plans provide an important service to seniors—improved coordination of their care—which affords plan sponsors improved outcomes and lower costs,” says Paul Keckley, PhD, executive director, Deloitte Center for Health Solutions.

“Other studies have also indicated enrollees in these plans are more satisfied than those who use traditional Medicare, so a solid value proposition is evidence in the Medicare Advantage program,” Keckley says.

For Medicare Advantage Plan sponsors, a vigorous effort should be made to reduce proposed cuts to these plans by Medicare—which the White House believes might save $177 billion over 10 years. For all plans, the ability to demonstrate the ROI for improve coordination of care is an absolute necessity as employers shift responsibility to individuals for clinical decisions and costs.

“Long-term, health plans will need to provide a solid value proposition based on outcomes and cost: this study provides a useful framework for that discussion by plans,” Keckley says.

The new analysis follows a previous AHIP study comparing utilization rates among patients in eight Medicare health plans compared to seniors in FFS Medicare. This study among seniors with certain chronic conditions in California and Nevada also found that:

• Medicare Advantage beneficiaries spent an average of 18% fewer days in the hospital than seniors in FFS Medicare.
• Seniors in Medicare Advantage had an average of 27% fewer visits to the emergency room than those seniors in traditional Medicare.
• Seniors enrolled in Medicare Advantage health plans also experienced a 42% lower rate of hospital re-admissions than those seniors in FFS Medicare.
• Avoidable admissions to the hospital were 13% lower among seniors in Medicare Advantage plans than those in traditional Medicare

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