Estimated Cost Savings and New Revenue From Installing an EHR

Based on research studies and federal funding estimates for an electronic health record system of no particular brand name, installing an EHR system can generate as much as $1.7 million per physician in cost savings or new revenue over five years, according to R&D MedTech, the maker of an EHR system. Here is the breakdown:

Practice Process Improvements ($216,300). A federal study found an EHR for a single physician yielded savings $26,600 in year one, $41,300 in year two, $31,400 in year three, $85,100 in year four and $85,100 in year five.

More Revenue Through Better Coding ($210,000). A study of 14 small practices found each physician could raise his/her revenue by as much $42,000 per year with increased coding levels resulting from implementation of EHR.

Malpractice Liability Insurance Discount ($25,000). Many malpractice insurance carriers are offering physicians discounts of 2-5 percent for using an EHR in their practice, on the premise the EHR system will reduce risk by helping to eliminate some of the most common reasons for claims, such as oversights on patient record reviews or notifying patients of prescription refills.

PQRI Financial Incentives ($50,000). The Physician Quality Reporting Initiative provides financial incentives of up to an additional 2 percent of Medicare payments to physicians who successfully report on specific quality measures provided to patients. Incentive payments range from $1,000 to over $98,000.

E-Prescribe Stimulus ($6,000). This amount covers two years of incentives, assuming most practices will switch to the full Medicare EHR stimulus incentive available in 2011.

Medicare/Medicaid Stimulus ($44,000/$63,750). Starting in 2011, physicians who meet the “meaningful use” criteria for certified EHRs for all applicable years would receive $44,000 through Medicare or $63,750 through Medicaid.

Tax Incentive ($250,000). The American Recovery and Reinvestment Act amended Section 179 of the Tax Code to increase the small business expense for qualified property to $250,000 with a 50 percent bonus depreciation.

Clinical Trial Revenue ($500,000). For clinical trials, additional new revenue is available to practices using EHR that was not available with paper records.

In-House Pharmacy Revenue ($360,000). This involves linking EHR to an on-site dispensing system in place of phoning or faxing prescriptions to the pharmacist, making call-backs for non-formulary drugs, and answering inquiries because of illegible handwriting and mandated prior authorization for refills.

See the full estimate by R&D MedTech.

7 Trends and Opportunities for Ophthalmology in Surgery Centers

1. Increasing volumes as the population ages. ASCs can expect an increase in demand for ophthalmic surgical procedures as Baby Boomers begin to age, says Richard Lee, MD, an ophthalmologist at Eastbay Eye Specialists in Oakland, Calif., who performs cases at EyeMD Laser and Surgery Center, also in Oakland, and is a member of the American Academy of Ophthalmology.

“The number of Medicare patients is expected to double in number over the next two decades as Baby Boomers begin to age, which will keep ophthalmology very busy,” says Dr. Lee. “Surgical volumes [for ophthalmology] are expected to increase 30-50 percent over those years.”

2. Continued focus on efficiency. ASCs that continue to focus on efficiency should experience continued success, say several ophthalmologists.

“Improving efficiencies and an increased focus on cost containment will allow ASCs to keep up with pressures of continued reduced reimbursements,” says Cary Silverman, MD, an ophthalmologist at River Drive Surgery Center in Elmwood Park, N.J.

ASCs’ costs are traditionally lower than hospitals for ophthalmology cases, and the savings ASCs offer should continue to bring eye cases to ASCs.

“The average facility fee at an ASC is $1000-$1,100, with hospital fees running up to three times as much in some cases, says Dr. Lee.

3. Growing case loads slowly. Even adding only one additional case per day can have a big impact on profitability.

Dr. Lee says his ASC worked to add an additional case per day for subsequent years, allowing volumes to grow slowly.

“There is this pressure to attract only the best and the fastest physicians for an ASC, and that’s fine until you run out of doctors,” says Dr. Lee. “You don’t need to do that. As you become more efficient, adding one more case a day can build your volumes over time.”|

Because of the principle of marginal costs, Dr. Lee’s ASC was able to generate a 60 percent increase in profitability from just a 16 percent increase in surgical volume in 2009, he says.

4. Multi-focal implants with cataract procedures. Physicians can offer improved patient outcomes and increase ASC revenue by offering patients a high-end muti-focal implant while undergoing cataract surgery, says Peter Colquhoun, MD, an ophthalmologist at Southwest Michigan Eye Center in Battle Creek, Mich., and a physician-owner of Brookside Surgery Center, also in Battle Creek.

Although the price of lens implants are bundled into payments for cataract surgery, if a physician and patient select a higher-end multi-focal implant, such Alcon’s ReStor IOL or Abbott’s ReZoom IOL, ASCs, at least in Michigan, can balance bill a patient for the additional cost of the lens, says Dr. Colquhoun. Balancing billing allows for cataract patients, who are often covered by Medicare, to receive the highest-level technology — a technology that Medicare would otherwise deny, he says.

5. Retinal procedures. While cataract surgery remains the most poplar ophthalmic procedure within the ASC setting, expanding to retinal procedures, such as pars plana vitrectomy, can be profitable if centers are willing to invest in the equipment needed to perform these cases. Shorter procedure times and less-invasive techniques have made retinal procedures now appropriate for the ASC setting.

“There is a long history of the ASC being mainly relegated to cataract surgery, with retina surgery traditionally being done in hospitals,” says Pravin Dugel, MD, an ophthalmologist at Retinal Consultants of Arizona in Phoenix who performs cases at Spectra Eye Institute in Sun City, Ariz., and member of the AAO. “Changes in instrumentation and reimbursement have made retinal procedures applicable for the ASC-setting, and that’s where growth [for ASCs] lies.”

Equipping an ASC for retinal procedures may cost as much as $200,000-$400,000, but can be “fantastic investment” if the physicians are committed and dedicated to the program, says Dr. Dugel.

6. Glaucoma procedures. Glaucoma procedures may also be a way for ophthalmology service lines to expand their offering and attract more cases.

Dr. David Kwiat, MD, FACS, an ophthalmologist at Kwiat Eye and Laser surgery who practices at Fulton County Ambulatory Surgery Center in Johnstown, N.Y., says his ASC is focusing on adding glaucoma procedures such as cyclophotocoagulation.

“For an ASC like ours that focus mainly on anterior segment surgery, adding glaucoma procedures should prove beneficial,” says Dr. Kwiat. “The patient benefits as well with a less invasive glaucoma treatment option and less postoperative difficulties.”

Dr. Colquhoun says his practice is considering recruiting a glaucoma specialist in the coming year, who could then perform some procedures such as implantations of mini shunts to treat glaucoma, at the ASC.

7. Oculoplastics. Although the volume of plastic surgery has dropped dramatically with the economy, Dr. Colquhoun expects some of that business to rebound in 2010. “With the economy improving in the next year, we are hoping lid corrections and other elective ophthalmic procedures, such as LASIK, will increase,” he says.

Illinois Supreme Court Rejects Medical Malpractice Caps

In a setback for physicians and hospitals, the Illinois Supreme Court nullified the state’s medical malpractice law, ruling that a cap on non-economic damages enacted in 2005 by the state legislature is invalid.

“Today’s court decision threatens to undo all that Illinois patients and physicians have gained under the cap, including greater access to health care, lower medical liability rates and increased competition among medical liability insurers,” said J. James Rohack, MD, president of the AMA, in a written statement following the ruling.

The Supreme Court upheld part of a lower court’s 2007 ruling that the state’s medical malpractice law violated the separation of powers clause in the Illinois Constitution by allowing lawmakers to interfere with a judge’s ability to reduce verdicts, according to a report in the Chicago Tribune.

The case, LeBron, a Minor v. Gottlieb Memorial Hospital, involved a malpractice lawsuit filed in 2006 against the hospital by the family of a girl who suffered severe brain damage and other injuries during her delivery there.

The state’s hospital association also spoke out strongly against the ruling, which has been followed closely by the healthcare industry and could play into the national healthcare reform debate this year, according to the Tribune report.

“The hospital community is deeply concerned that this decision will renew the malpractice lawsuit crisis and make it more difficult for Illinoisans to access or afford health care as liability costs for physicians and hospitals are driven to unsustainable levels,” said Illinois Hospital Association President Maryjane A. Wurth, in a written statement.

Read the Illinois Supreme Court’s medical malpractice cap ruling (pdf).

Read the Chicago Tribune’s report on Illinois medical malpractice caps.

CMA Says California HMOs Will Need More Doctors to Meet New Time Limits

New state regulations setting time limits for HMO patients to see doctors may force HMOs to add more physicians to keep appointments on time, according to a release from the California Medical Association.

Under the regulations, HMOs must make sure members have urgent care within 48 hours, see a primary care physician within 10 business days of requesting an appointment and a specialist within 15 days.

“As doctors, our No. 1 priority is our patients,” said CMA President Brennan Cassidy, MD. “We want to be sure that HMOs meet these requirements without forcing doctors to shorten patient visits or meet unrealistic quotas that would comprise the quality of care.”

Read the California Medical Association’s release on patient waiting times.

Massachusetts Report Finds Hospitals’ Negotiating Clout With Insurers Drives Up Costs

Massachusetts hospitals and physician groups with market clout negotiate rates that are twice as high as for other hospitals, and such clout is the main cause of healthcare inflation in the state, according to a release by State Attorney General Martha Coakley.

Ms. Coakley’s office based the findings on a year-long study of the Massachusetts market, finding that about 10 hospitals enjoy reimbursements 10-100 percent higher, for similar work, than reimbursements for the other 55 hospitals in the state.

The office’s report says the 10 favored hospitals had brand-name recognition or few competitors in their markets, but it did not name any provider or insurer, saying its aim was to identify systemic problems and not blame individual organizations.

Based on its findings, the report recommended against establishing global payments covering a patient’s entire medical care for an illness, an approach recommended by a state commission.

The study concluded that higher healthcare costs are basically caused by rising prices, not increased demand for new services. One major insurer reported provider price increases accounted for 80 percent of the growth of medical expenses from 2006-2009.

The report called on the state to:

• Discourage or prohibit contract provisions that perpetuate market disparities;
• Increase transparency and standardization in payment and quality;
• Reform payments to account for market distortions; and
• Encourage development of a “value-based” healthcare market.

Read the Massachusetts Attorney General’s release on health insurance reimbursements.

Five-Year Fix for Medicare Doctor Pay Cuts in Works

As lobbying intensifies, momentum is building to provide a five-year reprieve that would block a 21-percent fee cut to physicians who treat Medicare patients. If no legislative action is taken this month, the physician pay cut is set to go into effect in March, according to a report in The Hill.

The Senate recently passed pay-as-you-go legislation requiring Congress to offset new spending or tax cuts with corresponding spending cuts or tax increases, and the House passed a similar bill last year and is expected to take up a new version next week, The Hill reported. The Senate bill includes an exemption from pay-as-you-go for the physician payment fix. Specifically, it would allow Congress to spend up to $82 billion for physician payments without having to find offsetting savings or revenue sources. This amount would be enough to lock in fees at their current rates for five years.

The American Medical Association and other physician groups — joined by AARP — have been lobbying for a more expensive overhaul to the Medicare physician payment system, known as the sustainable growth rate formula, or SGR. Passing a permanent fix could cost $200 billion, according to a Feb. 2 report in Politico. Finding such a solution tops the AMA’s healthcare reform agenda.

Read The Hill’s report on physician fee cuts.

W.Va. Optometrists Next to Request Removal of Practice Limits

Optometrists in West Virginia are hoping new bill is the state legislature will allow them to expand the scope of their practices, but ophthalmologists and other physician groups are arguing against the bills, according to a report inThe Charleston Gazette.

Currently, optometrists in West Virginia can perform eye exams and prescribe glasses and contact lens. They are prohibited from performing surgery, giving injections or ordering lab tests, according to the report.

If the bills pass, optometrists would be allowed to perform surgery involving lasers and scalpels and to give injections around the eyes. The bills would also expand the state’s Board of Optometry authority, which could expand optometrists’ ability to prescribe medications.

Ophthalmologists say that approval of such a bill could pose a patient-safety risk, as only ophthalmologists have the medical training to understand how certain drugs interact, according to the report. Additionally, ophthalmologists worry that some optometrists have only had weekend training in certain procedures that require more in-depth study.

Optometrists say that the bills would expand coverage to patients in rural areas, who currently have to drive hours to see an ophthalmologist.

Florida recently proposed a similar law that would allow optometrists to prescribe certain eye medications in oral form, which has been met with similar opposition.

Read the Gazette’s report on optometrists’ scope of practice.

Gov. Paterson proposes bill to require disclosure from PBM

New York Governor David A. Paterson has proposed legislation that would increase transparency and promote competition among pharmacy benefit managers (PBMs) by requiring them to disclose additional drug information to health plans, doctors, and patients.
“PBMs perform a valuable service, but there is little oversight of their practices and little competition,” said New York State Health Commissioner Richard Daines, M.D., in the release. “The three largest PBMs—Medco, Caremark, and Express Scripts—manage pharmacy benefits for 200 million Americans, 95% of those who have prescription drug coverage.”

Under Paterson’s bill, PBMs would be required to disclose the actual use of drugs by the health plan’s participants, any conflict of interest that the PBM might have with the health plan, any increase in the net price to the health plan for a covered drug and the reason for the increase, and all contracts entered into by the PBM with a network pharmacy or pharmaceutical manufacturer. The bill would also notify patients and disclose any relevant clinical and financial information to prescribers before a PBM could switch a patient to a more expensive drug, the governor said in the press release.

Gene expression may be linked to retinoblastoma progression

The inactivation of the 16INK4A gene may play a key role in the progression of retinoblastoma, said researchers at Thomas Jefferson University’s Sbarro Institute for Cancer Research and Molecular Medicine (Philadelphia, Pa.) in a press release.

In a recent study, published in the Journal of Cellular Physiology, researchers focused on the 16INK4A due to its suspected role in retinoblastoma progression and its link to familial cancer predisposition.

In the study, Marco G. Paggi, M.D., Ph.D., and colleagues assessed blood samples taken from 29 patients and their parents. They found low to moderate 16INK4A protein expression in five of 11 (45%) retinoblastoma tumor specimens. They also found reduced p16INK4a RNA expression in blood in 16 of 29 (55%) retinoblastoma patients compared to normal controls. This reduction was associated with the depletion of the p16INK4a gene, the researchers said in the release.

The researchers also found reduced expression in at least one parent among nine of the 16 (56%) patients with reduced p16INK4a RNA expression. This suggests a heritable susceptibility to retinoblastoma, the researchers said.

Healthcare Spending Reaches 17.3% of GNP, Largest 1-Year Rise Ever Recorded

Independent actuaries working for the CMS reported that the healthcare sector’s share of the economy grew by 1.1 percent in 2009, the largest one-year increase ever reported, according to a report in Health Affairs.

The healthcare sector’s rising share of the economy, magnified by a contraction in other sectors, reached 17.3 percent of the gross domestic product and is expected to reach 19.3 percent of GDP by the end of the decade.

Looking at another measure, healthcare spending growth, 2009 was not a record year. Healthcare spending grew by 5.7 percent to $2.5 trillion last year, higher than the 4.4 percent it logged in 2008 but lower than the 6 percent reported in 2007. This year, the actuaries expect healthcare spending growth to slow to 3.9 percent.

Factors for the 2009 increase included increased spending on Medicaid, which rose 10 percent in 2009, increased spending on COBRA health insurance for the newly jobless, a large number of baby-boomers entering Medicare and treatments for H1N1 patients.

Government healthcare spending in 2009 rose by 8.7 percent to $1.2 trillion, or nearly half of total national healthcare spending. By 2012, the government’s share of healthcare spending will exceed half, compared with one quarter 50 years ago, before Medicare and Medicaid were created.

Private-sector healthcare spending did not grow as fast as government spending and is expected to increase by 2.8 percent in 2010, a slow-down caused by continuing loss of health coverage due to unemployment and the expiration of the COBRA created by the stimulus bill.

The Los Angeles Times quoted analysts who were dismayed by the healthcare sectors’s increases.

Stuart Butler, an analyst at the Heritage Foundation, said the figures show that more aggressive cost controls are needed. “The only way to do this is to simply spend less,” he said.

Len Nichols, health policy director at the New America Foundation, added: “If you believe that much medical care is unnecessary, as I do, then it is criminal that we are spending so much.”

Read Health Affairs‘ report on healthcare spending.

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