Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, CPT billing, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Patient Choice, Policy Issues, Uncategorized

Why Value-based Payment Methods Won’t Fix Healthcare

I’ve read several posts today on so called “Value-based payment” strategies and I couldn’t resist adding my 2-cents.

VBP can’t fix these fundamental problems because it is still based on a price-opaque shell game I like to call Fee-for-Coding, which results in:

1) Price insensitivity on the utilizer’s part.

2) Misaligned incentives on the provider’s part.

3) Lack of important price signals between buyers and sellers due to lack of advance pricing capabilities.

VBP utilizes the same fundamentally flawed economic system as our current billing model.

Moving to value-based care will require…

1) A system where prices are known in advance of care (not trauma or emergency care where extent of injuries or illness are unknown at onset – but even still a lot of those can be estimated ahead of time based on scenarios).

2) …that physicians be paid to be available to solve our problems, where payment is not tied to documenting work in a chart.

3) …that we move to a system that is based on defined contributions as opposed to defined benefits. As John C. Goodman is fond of saying, “money should follow people”, not programs and insurance policies.

Value will be elusive until we let the discipline of the market work in healthcare.

Posted in Doctor-Patient Relations, Economic Issues, Electronic Health Records, Government Regulations, Government Spending, Influence peddling, Patient Safety, Patient-centered Care, Policy Issues, Protocols, Quality, Subsidies, Technology, Uncategorized, Unsettled Science

Meaningful Use: 72 Million Reasons It Will Continue – by Robert Nelson, MD

“Meaningful Use”.   We’ve all heard the term and some of us actually believe it.  It pertains to the way healthcare providers “use” electronic health records (EHR) in order to be “meaningful”.

But, meaningful to whom?

And, when it comes to the AMA’s recent urging of the EHR industry and government to change “standards” for EHR’s, we need to ask similar questions.  Who benefits from government-dictated standards?  As the AMA points out, currently EHR’s are more of a burden than a help because they are a drag on productivity.  But whose side is the AMA really on when it comes to EHR reform?

In almost all examples of government-issued standards, those that benefit are the very industries that lobby for implementation of standards.  Inevitably, those standards morph into a form of government sanctioned industry protectionism, as opposed to being about quality or consumer protection.  The economic consequences of government imposed standards on products and services generally results in stifling competition and promotes price inflation due to the regulatory cost burdens of having to meet those standards.  We see this phenomenon with business and professional licensure all the time.  Unions and certain industries (medical care included) are experts at getting regulatory standards and “minimum qualifications” on the books so as to make entry into their market space very challenging for new-comers or innovators that disrupt the status quo.

The status quo in this case is the ICD/CPT code-based billing cycle and the billions that stand to be lost if we move away from this arcane economically perverse method of paying for healthcare.  Oh, and did I mention who owns the rights to the CPT billing codes?  The AMA does.  How convenient.

If EHR reform is truly about “user-friendliness” and patient safety, then why not just copy what other industries do with their client services software?  Athletic clubs, membership based retail clubs and others all have apps to allow members/users to track usage, costs, progress and outcomes.  Some even allow you to compare competitor’s prices with those of your vendor!

The answer is, of course, it is NOT fundamentally about the user or the patient. It is really all about the billing cycle!  In essence, the EMR/EHR has turned into complicated, very expensive accounting and billing software.  One of the main reasons EHR’s are so “clunky”, is the required entry of multiple fields of often irrelevant clinical information in order to “code” the chart to be compliant with billing standards.  Being in compliance with billing standards allows submission of a claim.  And, submission of claim is essential for most doctors to get paid.

There you have it. That is the real driver behind why EHR’s operate the way they do.  They were never really designed with the doctor-patient encounter in mind.  That was an after-thought and an add-on, the language of which was designed to convince doctors that EMR/EHR’s were good for patient care by boosting productivity and cutting down on errors.

The main motivation for the original push towards EHR/EMR adoption was, and that of future reforms will continue to be: meeting government-mandated “meaningful use” standards so that physicians receive a $40K per provider credit from the federal government by documenting things like pain control and smoking cessation counseling and submitting claims electronically, which benefits CMS control.  Until that paradigm changes, don’t expect any monumental improvements in user-friendly design, efficiency or patient-centered innovations.

Despite its blustering about EHR inefficiency, the AMA likes this basic arrangement just fine, and will fight to maintain control of the CPT codes and our dysfunctional billing cycle system now used by private payers as well as government.  72 million in royalties says I’m right!