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Hospitalist Model Outcomes Study

The Human Resource Management Report

Staff Reporters

people_top

 

According to a study published in Human Resource Management, hospitals that employ the hospitalist model-of-care delivered better patient outcomes.

The Study

The study explored the differences between hospitalists and traditional models of care, measuring performance outcomes in more than 6,000 cases at Newton-Wellesley Hospital in Massachusetts between July 2001 and July 2003. At the time of the study, hospitalists treated approximately one-third of the hospital’s patients, and private practice physicians treated the remaining two-thirds.

The Results

Compared to the traditional approach, researchers found that the hospitalist model:

  • Decreased the length of patient stay by about half a day and reduced costs to the hospital by $655 per patient;
  • Reduced the risk of re-admission by 41.8 percent, a key measure of quality performance in hospitals;
  • Improved coordination of care 13.2% by increasing the strength of relationships between physicians and other members of the care provider team.

Assessment

The study was reported in the Society of Hospital Medicine, on November 17, 2008

Conclusion

What do you think? As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Mercer Study Says CDHPs Rising

Join Our Mailing List

HSA / HRA Offerings Jump at Large Employers*

[By Staff Reporters] 

 

2005

2006

2007

2008

Very likely to offer in 2009

Small Employers (10-499 employees)

2%

5%

7%

9%

14%

Large Employers (500 or more employees)

5%

11%

14%

20%

25%

Jumbo Employers (20,000 or more employees)

22%

37%

41%

45%

45%

*Based on either a health savings account or health reimbursement arrangement.

Source: Mercer 2008 National Survey of Employer-Sponsored Health Plans.  www.mercer.com

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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CLINICS: http://www.crcpress.com/product/isbn/9781439879900
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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Dental eHR Controversy Continues

Response to Valerie Powell, PhDpruitt2

By Darrell K. Pruitt; DDS

Dear Valerie, 

This is a response to statements in www.ModernHealthcare.com, although to address all of the issues will probably be more space than they will want to devote to this. So, I’ll leave it to them to decide how much, if any, they would like to post.

Starting from the Top

Valerie Powell asks whether a dentist would face liability under HIPAA if electronic health data were stolen. Of course they would.  And in six months the FTC will be interested in data breaches as well. The “Red Flag Rules” were not eliminated, they were just delayed.

Practice Interference 

She asks whether the thefts would interfere with the dentist’s practice. Yes again – in many unpleasant ways. For example, if there is a data breach connected to a series of identity thefts from a dental office, the HHS Office of Civil Rights, state investigators or even the FBI can confiscate the dentist’s computer to investigate.  A search warrant would shut down an office much more unexpectedly than paper floating away in a hurricane.  By the way, using Hurricane Katrina as a reason for dentists to go digital is merely a weak rationalization commonly used by those who would de-value paper records to increase the relative value of digital.    

Self-Reporting 

If the dentist is able to self-report the breach before finding out from law officials, even before the inspectors arrive, ready to teach the careless dentist a good lesson as an example to others, the dentist would be obligated to contact every one of his or her patients as soon as possible to tell them, “I am terribly sorry to inform you that your social security number, date of birth, health insurance information and other valuable items have been stolen from my office.  However, I will assist you in watching for identity thefts for the next few years at my expense.”

The Ponemon Institute Report 

A couple of years ago, the Ponemon Institute estimated that it costs almost $200 per patient to do this.  For a small dental practice with only 2500 active patients, that is half a million dollars – even before the fines arrive.

Economic Costs 

But wait, there is more. If the immediate financial costs do not bankrupt the practice, Ponemon once estimated that 20% of the clients will never return to a business that fumbled their identity. I think Ponemon is an optimist. Ponemon’s estimate is not based on breaches from dental practices. I think at least a third of dental patients would immediately leave and probably seek out a dentist who uses paper records. And that is when they will find me.

Conclusion

And so, your thoughts and comments on this Executive-Post, and continuing discourse, are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Healthcare and the FTC “Red Flags”

The “Address Discrepancy Rules” and Medical Compliance Rules

[By Staff Reporters]Red Flag Rules

Healthcare executives and CFOs are looking for help to better understand and comply with the Red Flag and Address Discrepancy Rules from the Federal Trade Commission (FTC). The Rules were issued to curb identity theft in the United States, and require companies including most hospitals, to submit their written program to identify and manage ‘red flag’ accounts – originally – by November 1, 2008.

Core Elements

The core elements of the Red Flag Rules are identification, detection and response to patterns, practices, or specific activities – known as “red flags”. They include the two key issues. 

1. Identification/Detection:

Inconsistencies of addresses constitute a ‘red flag’ to the registrar and organization.

2. Response:

When a ‘red flag’ is found, predetermined workflows within workflow solutions guide the registration process and financial relationship with patients, including those identified as a red flag patient, using validated patient information.

FTC Grants a Delay

However, the Federal Trade Commission just suspended enforcement of the new “Red Flags Rule” until May 1, 2009, to give creditors and financial institutions additional time in which to develop and implement written identity theft prevention programs. This recent announcement, and the release of an Enforcement Policy Statement, does not affect other federal agencies’ enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance.

Assessment

info: FTC Media Contact: Office of Public Affairs [202-326-2180]

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Pondering the Health Insurance Overhaul

Mandates Include All Patients and Pre-Existing Conditions

Staff Reporters

According to the New York Times, November 20, 2008, the health insurance industry would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability, if Congress requires all Americans to have coverage.  

Industry Trade Groups

In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.

Assessment

In the absence of such a mandate, insurers said, many people will wait until they become sick before they buy insurance. Members of Congress said that they wanted to pass legislation next year to expand coverage and rein in health care costs, while the new position taken by the insurance industry could ease the way for passage of such legislation.

View Video [“Future of American Healthcare” by Uwe Reinhardt; PhD]: http://vodpod.com/watch/852139-uwe-reinhardt-future-of-american-healthcare-who-will-manage-the-system?pod=drdemmba

Conclusion

As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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About Bond Brokers

Who they are – How they get paid

Staff Writers

According to the Dictionary of Health Economics and Finance, a bond-broker derives her or his income differently than a fee-for-service financial advisor with assets-under-management [AUMs]; not necessarily unlike a stock broker.

www.HealthDictionarySeries.com

Transaction Driven Commissions

In other words, bond-brokers use transaction-driven sales, and earn commissions based on turnover in a brokerage account or portfolio.

No Quarterly Management Fees

Although the bond-broker takes no quarterly management fees like a financial advisor, the broker’s advice may be colored by the commissions associated with bond issues he or she recommends; which results in an inherent conflict of interest in the broker relationship.

Assessment

Thus, the physician-investor must constantly be aware of the potential for being sold debt-based securities that may be more advantageous to the sales broker than the doctor’s portfolio. Realize too, that the current Credit Default Swap [CDS] fiasco on Wall Street today was prompted in many respects by aggressive bond-brokers! So, always remember Caveat Emptor!

Conclusion

While a bond or stock-broker may offer advice, the physician-investor makes the decisions and therefore is accountable for them. And so, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Toxic Commercial Mortgage-Backed Securities [CMBS]

Another Impending Financial Crisis?

Staff Reporters

According to industry sources, should commercial real-estate turn out to be the next focus of the financial crisis, life insurers will be among the companies feeling the most heat.

Life Insurance Companies

According to the Dow Jones Newswires, on11/20/2008, life insurers on average have the equivalent of about 41% of their equity invested in Commercial Mortgage-Backed Securities [CMBS], compared with 23% on average for property/casualty insurers.

The Fox-Pitt Kelton Report

According to a recent analysis of 10 large public insurers by Fox-Pitt Kelton analyst, Adam Klauber, Hartford Financial Services Group (HIG); Protective Life (PL) and MetLife (MET) had the highest exposures.

Assessment

Investment banks, by contrast, held about 18% of their equity in CMBS. While the financial crisis has come late to the life insurance industry, it has hit them hard. Shares of life insurers are down nearly 72% so far this year, a bigger drop than for other types of insurers.

Conclusion

Now – forget CitiGroup – what about the health insurers? Your thoughts and comments on this Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Hospitals Financially Ailing

Economic Slowdown Cited as Causative

Staff Reporters

According to the Associated Press, November 20, 2008, the current dismal economy has American hospitals ailing. New data shows declines in overall admissions and elective procedures, plus a significant jump in patients who can’t pay for care.

AHA Study

According to a survey by the American Hospital Association [AHA], hospitals also have been hurt by losses on their investments due to the turmoil on Wall Street. Many are finding it more expensive to borrow money, while some of the hardest-hit hospitals began reducing staffing and services as early as last spring and more will follow.

Assessment

The AHA survey also found that 67 percent of hospitals saw some drop in elective procedures, with 6 percent seeing a significant drop; 63 percent saw some decline in overall admissions, with 9 percent seeing a bigger drop; while inpatient and outpatient surgeries and emergency department visits were all down roughly 1 percent in the third quarter.

More info: www.HealthcareFinancials.com

Conclusion

As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Extortion Argument for HIT De-Identification

A Really Scary Tale

By D. Kellus Pruitt; DDSpruitt

Upon arriving at the office early one morning recently, Dr. Smith logged on to the Internet to check her email. Among the usual pieces of junk email, one from Nigeria caught her eye. She recognized the name of one of her patients, written in bold letters. She thought, “That’s odd.” Smith opened the email to read more.

The Threat 

“I am revealing the name of your patient, who lives on Oak Street, as proof that your computer has been hacked. I have social security numbers, birthdates, insurance information … You name it, and I’ve got it. It will go on the market in 24 hours if you do not do exactly what I say …” (This is the start of price negotiations – for the first time).

The Decision 

What will Dr. Smith do? At the very best, she can hope that it’s a bluff. Nevertheless she must contact not only the FBI, but every one of her patients who are at risk of identity theft. That alone will bankrupt her practice because a large portion of her patients will never return. They will look for dentists with paper records. The very worse thing she could do is pay the ransom. In the end, how much did the bad guy risk to destroy a wonderful career, even if it was a bluff, or a devastatingly mean trick? You can relax now; this story is fiction. Here is the non-fiction.

NEWS FLASH!

“Script said the new letters were received by Express Script clients in recent days and is similar to the letter it first received. That letter included personal information on 75 people covered by Express Scripts, including birth dates, social security numbers and prescription information. The sender demanded money from the company, under the threat of exposing records of millions of patients.” – BusinessWeek [11.11.08]

More: http://www.businessweek.com/ap/financialnews/D94CVLJO0.htm

Lose the Threat 

Dentists must lose this danger or lose their computers. Let’s temporarily put aside our dreams about how wonderful technology might become and open our minds to ways to go around insurmountable obstacles instead of pretending everything is wonderful in stakeholder land. For once, let’s seriously look into de-identifying our patients’ electronic dental records already. Forget about HIPAA and inspections. Forget about AHIC Successor Inc. Forget about CCHIT, CMS and even the HHS. Forget about Newt Gingrich and the past, present and future Presidents of the American Dental Association who prefer to be irrelevant than to discuss anything bad about electronic dental records. And especially forget, with prejudice, executives of dental insurance companies who demand interoperability on their NPI-driven terms. Let’s sidestep the biggest mistake in healthcare history. It does not have to be ours.

More Info:  Dictionary of Health Information Technology and Security 

www.HealthDictionarySeries.com

Not a Fete’ Accompli 

Some leaders who have poor understanding of the modern marketplace would lead ADA members to believe that there is nothing that can be done to stop eHRs in the United States of America, no matter how expensive, dangerous and lousy stakeholder interests make them. Why; “cause I said so?”

Example:

Let me give you an example: “If we don’t participate, then who knows what will happen regarding the dental part of the eHR? eHR is on the way.” – Dr. John S. Findley, President of the ADA in “President-Elect’s Interview: Part 2,” ADA News Online (ADA members only).

More: http://adabei.com/members/resources/pubs/adanews/081006_findley.asp

If we don’t participate, Dr. Findley, dentistry will proceed with safe paper records like it has for a century or so.  I have clearly shown that far worse things could happen.  Shouldn’t we “first do no-harm” to our dental patients?  What happened to the ethics of the American Dental Association?

Stakeholder Optimism 

Even though optimistic stakeholders, hobbyists and hangers-on disagree with me, electronic dental records are not inevitable. At least they are not inevitable in the next decade or so.  They can easily become so lousy and so mistrusted by doctors and patients alike that they will set back miracles from Open Source Evidence-Based Dentistry forever. They are almost there already because of ambitious stakeholders, hobbyists and slow-moving hangers-on; like Dr. John S. Findley.

Assessment

Remember, decades ago the US was supposed to be on the metric system.  Sometimes inevitability takes so long that you might as well just forget about it.  And, the metric system even makes sense.

Conclusion

Unlike medical records which must remain secure even if de-identified, nobody, I repeat, nobody cares about breached dental histories. Physicians may have no choice. Dentists do! As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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The National Health Care-Scare

The Markets and Health Economics

By Dr. David Edward Marcinko; MBA, CMP™

marcinko

As a centrist fiscal conservative – social liberal – I tend to side with libertarian issues and not political parties. Nevertheless, I was dismayed with the recent presidential election and wondered what impact it would have on the stock markets. Mr. Market replied with haste.

The Question 

In the short term, the stock market collapsed back in September when most pundits opined that President-elect Barack Obama would become our new leader. In fact, the DOW has not seen its current lows since 1998, or so.

More specifically, according to one analyst from Wall Street – Paul Shread – “the Dowshould have strong support between here and 7000, which would cover the 1998 and 2002-2003 lows (7200-7400), the 50% decline mark (7100) and the October 1997 low (6971). This would be a very important place for the market to make a stand.” But other chartists see the markets falling even further, with the S&P dropping as low as 400. Why is this?

The Answer is Uncertainty, Doubt and Fear

While the mounting credit default swap and mortgage crisis has had a major role in sinking stocks, some speculators worry that Obama will follow through on promises to raise income taxes on dividends and capital gains; eliminate the estate tax exemption, rescue the auto-industry and  the: airlines, home builders, furniture, footgear and apparels, textiles, glassware, tobacco, beer brewers and perhaps a few others, and generally make it difficult for private employers to resist unionizing drives. In other words – there is a rising level of fear, doubt and uncertainty over the seeming potential of Keynesianism and governmental guarantees and protectionism – rather than the opportunities of capitalism. All disguised in the “cloak of change”.

Enter the Politicians

Some economists – tax and policy experts – fear that if Obama, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid bailout these manufacturing segments instead of filing for Chapter 11, the country may face a very long recession. Just look to Japan some two decades ago, when the country bailed out its failing banks and corporations instead of letting them fall so that innovative competitors could take their place.

According to Niall Ferguson, a scholar who has studied the relationship between political, banking and financial fortunes –”you can stick money into every orifice of the big banks — their mouth, their nose, their ears, wherever — but if they can’t make loans because they have to reserve against future losses, and if they won’t make loans because there’s a recession, it won’t do any good,” Ferguson says. “If they can’t lend, there’s no money multiplier — they’re stuck, they’re zombies. It’s Japan all over again.” And, some ghoulish traders are indeed hoping for a deep recession. Today, Japan is still in worse shape than we are.

Phoenix Rising

Following such a debacle, the failed companies might then re-organize with some of their current workers under revamped union contracts. Reorganization, new labor contracts and new employee and retiree health benefit plans would make them competitive and profitable after emerging from bankruptcy; much like the proverbial Phoenix.

National Health Insurance, et al

Our physician clients and investors also are also worried that if national health insurance becomes a reality, defense spending is reduced and/or onerous regulations imposed on the surviving banks and Wall Street, the economy will be in for ride rougher than the one we have experienced to-date. No wonder a recent poll suggested that more than half of all doctors did not encourage their offspring to follow their career footsteps.

Other pressing issues for the medical profession, according to the HealthCare Group – Co-Chaired by Angela Braly of Wellpoint Inc., Dr. Denis Cortese of the Mayo Clinic, Jeffrey Kindler from Pfizer Inc., and Dr. Daniel Vasella from Novartis AG – include tort reform,defining and measuring medical value, payment reform, and building the health care workforce of the future with an emphasis on primary care, nursing and other allied health professionals. Moreover, true healthcare reform must involve integrating issues like Single Payer Systems, Consumer Directed Health Plans, Pharmaceutical Price Competition, Advanced Electronic Medical Records, and Quality & Outcomes Disclosure, etc.

The Obama Cabinet

President-elect Obama’s staff and cabinet appointments will also offer important clues for the markets, going forward. In addition to Rahm Emanuel, as the President-elect’s Chief of Staff, hearsay suggests Laura Tyson or Bill Richardson for Secretary of Commerce, Hillary Clinton as Secretary of State and Timothy Geithner as Treasury Secretary. Other considerations include Renee Glover for Secretary of Housing and Urban Development [HUD], Max Cleland as Secretary for Veteran’s Affairs, Janet Napolitano for Homeland Security, Jim Jones as National Security Advisor; and Richard Danzig and/or Chuck Hagel for other Cabinet Posts. Yet, Tom Daschle as Secretary of HHS is not exactly an “agent of change”, as the term is commonly understood.

Assessment

As the world’s markets sink, the pressure on our new administration will be to clarify these issues. Only then, will a stock market bottom be reached, and the dismal economy begins to reverse itself. Hopefully, the health care-scare will then be mitigated.

Conclusion

Your thoughts and comments on this Medical Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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Reframing the eHR Debate in Keynesian Terms

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eHRs – Good for Whom?

By Dr. David Edward Marcinko; MBA, CMP™

By Hope Rachel Hetico; RN, MHA, CMP™

We have been reading with interest the posts of dentist blogger Darrell K. Pruitt, DDS.

His comments are cogent when he opines that clinical eHRs are not yet practical in the private dental office arena; that they produce a negative ROI; are time consuming and labor intensive; are not secure; and most importantly that patient care is not really enhanced by them:

Review of the Debate

Moreover, Dr. Pruitt suggests that the old peg-board system of invoicing, with simple paper dental records, is adequate for use today. His argument that dentistry is not the same as whole-body medicine, requires fewer but highly dexterous tasks, and is largely not dramatically different than the profession he practiced several decades ago [sans the cosmetic type initiatives, etc] makes some sense. Of course, the latter issue is actually good news for patients.

Organizational Objections

Dr. Pruitt’s biggest objection seems to be with what he perceives as the heavy-fisted American Dental Association [ADA], and its leaders and related healthcare technologists. According to him, they seem to suggest eHRs as an absolute imperative; that NPI mandates are firm; HIPAA true, and that the association blindly argues contrary to his opposing thesis points above. We trend to agree with him; not the ADA. Why? Well, security among other reasons – for extreme specificity – as we just received word from Dr. Pruitt about a tremendous data breach at a dental school in Florida that occurred a month ago:

“University of Florida officials have notified about 330,000 current and former dental patients that an unauthorized intruder recently accessed a College of Dentistry computer server storing their personal information.”

Though the bad news was delayed for over 30 days, this is a major setback for dental [and all electronic] medical records. 

Read more: http://www.am850.com/news/archives/2008/11/dental_school_security_breach.asp

Archaic Trade Unions

We also suggest that most long-standing and entrenched – formal or informal – “trade-union” organizations like the ADA and the American Medical Association [AMA] are no longer responsive to member needs. And, how can you argue with him when the AMA has seen its membership roles drop from more than 90% – to less than 20% – during the last decade? Membership did rise several percentage points, recently, after a highly public and expensive membership drive; but it was not a spectacular gain. Of course, we all remember the patient privacy breach at a Washington DC VA hospital – 26 million strong – a few years ago.

Read more: http://www.ada.org/prof/resources/pubs/adanews/adanewsarticle.asp?articleid=3206

Related Medical Organizations

Related organizations, like the American Podiatric Medical Association [APMA], American Optometric Association [AOA] and others, seem to strive for increased acceptance in the medical community, muck like the ADA. Such allied healthcare providers “want to be like real doctors” and may blindly follow the AMA and promote flawed – or misaligned – initiatives like SAR-BOX, the Patriot Act or eHRs. Perhaps this is the source of the Dr. Pruitt’s disagreements with the ADA. Unlike some dentists, he seems to be very satisfied in his role as dentist – defender of oral health in Forth Worth, Texas – and one who is wholly comfortable in his professional skin. This is more than can be said for many of the podiatrists and optometrists that we encounter in our consulting activities. Now, unfortunately, the dentists seem to have become another AMA surrogate; or “me-too” group, in this case.

An Opinion

And so, let’s be clear; Dr. Pruitt is correct in his ranting-and-ravings, and they are not the ruminations of some mad-man, or aging dinosaur. But, he is simultaneously both entirely correct, and wholly incorrect. How can this be? Simple; Dr. Pruitt’s perspective is mico-economic in nature, while the ADA’s perspective appears macro-economic in scope. Dr. Pruitt is championing his personal cause, and the cause of his patients in the here and now; time-present. The ADA, and related organizations, champion the road ahead when they promote eHRs; future-present.

About John Maynard Keynes

In our consulting practice, we see far too few clients like Dr. Pruitt, and far too many like the ADA and AMA. And, if it were possible for us to have a “dental-twin”, it would more likely be him; not them. Here is why? We are producers, not consumers. We work hard, live far below our means and generally try to be accountable and personally responsible. This “depression-mentality” has served us well. On the other hand, more profligate doctors, and consumers, are struggling in the current economic malaise. Hence the paradox, pointed out by economist John Maynard Keynes [1883-1946], many years ago.

The “Paradox of Thrift”

Every year thousands of economics students are asked to accept one of Keynes’s lasting inversions of classical economics, namely the proposition that saving may be a private virtue, but a public vice. According to Keynes, a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less [witness the high-savings rate of Japan]. But, the community that increases its consumption at the expense of saving would end-up being richer and saving more. This proposition is frequently stated in macroeconomics textbooks as the “paradox of thrift.”  It applies to more than finances, of course, like eHRs. Others say, KISS [Keep It Simple Silly], or “don’t waste more firepower than the job requires.”

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documents

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The eHR Conundrum

Consumers are needed if producers are to flourish. Or, what’s good for me – is not necessarily good for the whole. Is this personal philosophy selfish? For sure, it is. But, it is the stuff of capitalism. Success is not for all. Yet, delaying present satisfaction, for a greater future payout, is not guaranteed. But, it may benefit an economic unit-of-one [Dr. Pruitt], not a unit-of-us [ADA, AMA, society, etc]; at least in the short term.  

Reframing the eHR Debate

According to HIT expert Dr. David Kibbe MBA, the broader message of eHR adoption, and ultimate success, will be its adoption by physicians and nurses. It extends communication, information and data exchange beyond the narrow confines of the four walls of a private office practice or small clinic. In other words – more than Darrell’s World! Yet, health IT needs to empower providers beyond the present parochial business model of fiercely independent private practitioners like Dr. Pruitt, and to act as effective members of a team which includes the patient, medical-home, specialists, and ancillary service providers such as pharmacists and lab technicians; as well as the podiatrists, opticians, chiropractors, etc. But, as Dr. Kibbe believes, digital records are still not enough. An enterprise-wide electronic healthcare ecosystem approach is needed.

More on “Certified” eMRs

Sure, most eMR software systems create digital versions of paper documents, which can be accessed by physicians from almost anywhere.  But, the most commercially available eHRs, including those that are “certified,” are focused on what is good for the doctors and the well-being of their medical practices. They do not yet support the capabilities required to assist patients and doctors together to collaborate and make better decisions; to help manage and coordinate care across a community of providers in different settings; or to reduce the costs of unnecessary emergency room visits, repeated lab tests, medical errors or preventable hospitalizations. It is still consumers versus producers, or as Keyes philosophy suggested; “savers versus the spenders. It is not a healthcare 2.0 collaborative ecosystem.

eHRs [Not Ready for Prime Time]

Further, according to Kibbe, currently styled eHRs have a very limited ability or commitment to capturing and transmitting data on a population of patients that would permit improvement in quality, safety, and efficiency to proceed systematically in a community, region, or state.  And perhaps worst of all, many EMR vendors have resisted the call to make their software capable of exporting and importing a standard set of summary personal health data in computable format, such as the Continuity of Care Record, [CCR], or XML electronic standard. This means that for all practical purposes, most eMRs remain “islands of data” that can’t connect even within the archipelago of data in their communities, not to mention the continents of data elsewhere. eHRs are just not ready for “prime-time”, and perhaps this is what is known by the Dr. Pruitt’s of the healthcare space.

And the Winner Is?

In time, one side of the eHR debate will win, and one side will loose. We are born, we prosper, and we die. This is the nature of evolution, and business natural selection; on many levels. There is no winner in the great eHR debate; only transitions. Out with the old – in with the new!

Assessment

Change is slow; growth is sure. We know which side will ultimately win. Thereafter, eHRs will continually morph, change and not remain static. And so, the better question in the eHR debate between doctors and their affiliated organizations ought to be – not whither eHRs – but, when; how and at what cost? Colleague John D. Halamka, MD, MS, the Chief Information Officer for the CareGroup Health System, CIO and Dean for Technology at Harvard Medical School, Chairman of the New England Health Electronic Data Interchange Network (NEHEN), CEO of MA-SHARE (the Regional Health Information Organization), Chair of the US Healthcare Information Technology Standards Panel (HITSP) – and a practicing Emergency Physician – believes that big IT Winners in 2009 will be eHRs; especially web-based applications. Why? Because the Obama administration has promised $50 billion for inter-operable eHRs!

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Medicaid MD Acceptance Slows

Delayed Reimbursements Cited as Root Cause

Staff Reporters

According to the Wall Street Journal, November 18, 2008, fewer doctors are accepting Medicaid patients. And, it’s not just because fees are so low – but because it often takes months to get paid.

Health Affairs Analysis

An analysis by the Center for Studying Health System Change says Byzantine bureaucracies can delay Medicaid payments for months. Using data provided by Athenahealth, a specialist in processing claims and payments for doctors, researchers at the Center for Studying Health System Change found that even in states with relatively high Medicaid payments yet long delays, only 50 percent of doctors took all new Medicaid patients.

Assessment

By contrast, in states with higher and speedier payments, doctor participation was 64 percent. Variations in payment delays varied wildly state to state – from a low of 37 days in Kansas to a high of 115 days in Pennsylvania.

Conclusion

What do you think is the reason for the Medicaid patient slowdown; delayed cash-flow or some other cause? As always, your thoughts and comments on this Executive-Post are appreciated

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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The Healthcare Capital Budgeting Crisis

Your Vote Counts 

Staff Reporters

Did you know that South Carolina’s Department of Health and Environmental Control [SCDHEC] will likely close some of its rural health clinics due to the state’s budget woes? It’s true; according to reports from The State of Columbia, SC. Moreover, the SCDHEC would also offer early retirement to its employees.

Hospital Bankruptcies

On another front, hospitals filing bankruptcy last quarter included: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and four hospital system Hospital Partners of America, in Charlotte. 

Private Medical Practice Impact

And, according to consultants from the Institute of Medical Business Advisors, in Atlanta [www.MedicalBusinessAdvisors.com], similar negative impacts have occurred in private medical practices, and clinics, as well.

Assessment

Will the current economic crisis have a chilling effect on your healthcare organization’s capital spending?

Conclusion

Please vote.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: http://www.medicalbusinessadvisors.com/marcinkobio.asp and www.stpub.com/pubs/authors/MARCINKO.htm

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Home Ownerships versus Stock Ownership

Understanding “Underwater” Differences

Staff Reporters

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Mark Cuban wrote an interesting piece on his website on November 11. On it, he asks; “so what’s the difference between being underwater on a mortgage and underwater on a stock?”

The Experts

According to Mark, the “experts” will tell you to hold the stock in hopes of it going up in value and then explain that those with homes worth less than their mortgages shouldn’t feel bad about breaking them and defaulting?

The Buy and Hold Scam

He thinks “Buy and Hold” for stocks is one of the all time great marketing scams. Ignore it; always. “Buy and Hold” for your house is a mantra you should always live by; the difference?

You can live in your house. You get utility from your house. You may get a deduction for interest paid on your tax bill. You can develop a positive emotional attachment to a house.”

The Stock Difference

A share of stock … well you can … you can look up the price anytime you want if you think that’s fun. There is no utility for a share of stock beyond its financial value. The value of a house is that it is your home. Moreover, “the fact that you may be underwater in your mortgage is of no relevance if you can make the payments. If you can make the payments on your mortgage, it shouldn’t matter if your house is worth 10 pct of your mortgage. If you can make the payments, make them.”

Example:

Furthermore, as Mark recalls, “I remember being freaked out watching as my rate on my Adjustable Rate Mortgage went up and up as I watched the value of my house go down. For 2 years my rate went up, my house value went down. Fortunately, I liked living there. I wasn’t building any equity, in fact, I was negative, but I was going to have to pay to live somewhere. On top of everything, my credit was bad enough and I didn’t want to make it any worse. In fact, I knew that if I didn’t make the payments on my house, my chances of ever owning a house again were none and none. So I kept paying the note every month; in spite of the financial pain.”

Changing Times

Then, Mark says, a funny thing happened. Interest rates started to go down. I didn’t even know it until I got my annual notice saying that my mortgage payment would go down. The value of my house wasn’t going up, but for the next several years, my payments went down. It took years, but I actually built equity in the house; which is exactly the point!

Assessment

Finally, says Cuban: “Buy and hold works when it comes to the home you live in. Turning in the keys because you have negative equity is a fool’s game. If you do, you will never own a home; you will be a renter forever“. Your home has far more value than its mark to market price because you can live in it. Do whatever you can to stick it out. It will pay off for you in the long run.

Conclusion

Attention profligate doctors, and financial advisors, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Physician Legislators

More Physicians Coming to Congress

Staff Reporters

According to the AMNews [11/24/08], each of these 10 physician lawmakers vying for re-election to Congress prevailed at the November elections. They will be joined in January 2009 by at least three additional physicians who won seats in the House of Representatives.

Re-elected:
Sen. John Barrasso, MD (R, WY), orthopedic surgery
Rep. Charles Boustany, MD (R, LA), cardiovascular surgery
Rep. Paul Broun, MD (R, GA), family medicine
Rep. Michael Burgess, MD (R, TX), ob-gyn
Rep. Phil Gingrey, MD (R, GA), ob-gyn
Rep. Steve Kagen, MD (D, WI), internal medicine
Rep. Jim McDermott, MD (D, WA), psychiatry
Rep. Ron Paul, MD (R, TX), ob-gyn
Rep. Tom Price, MD (R, GA), orthopedic surgery
Rep. Vic Snyder, MD (D, AR, family medicine

Newly elected:
Rep. Bill Cassidy, MD (R, LA), family medicine
Rep. Parker Griffith, MD (D, AL), medical oncology
Rep. Phil Roe, MD (R, TN), ob-gyn

Assessment

A House race involving John Fleming, MD, a Republican internist from Louisiana, will be decided Dec. 6.

Conclusion

What do you think? Is this an emerging new trend? As always, your thoughts and comments on this Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: http://www.medicalbusinessadvisors.com/marcinkobio.asp and www.stpub.com/pubs/authors/MARCINKO.htm

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Consumer-Driven Healthcare

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An Emerging Trend Vital to Hospitals

[By Staff Reporters]

 According to Associate Professor Gregory O. Ginn; PhD, MBA, CPA, MEd., of the University of Las Vegas, an important emerging trend today is consumer-driven healthcare [CDHC] as patients become more knowledgeable and demanding about the quality of care they receive.

Definition

According to the Dictionary of Health Insurance and Managed Care, CDHC refers to health insurance plans that allow members to use personal Health Savings Accounts (HSAs), or similar medical payment products to pay routine health care expenses directly, while a high-deductible health insurance policy protects them from catastrophic medical expenses. High-deductible policies cost less, but the user pays routine medical claims using a pre-funded spending account, often with a special debit card provided by a bank or insurance plan. If the balance on this account runs out, the user then pays claims just like under a regular deductible. Users keep any unused balance or “rollover” at the end of the year to increase future balances, or to invest for future expenses.

Benefits Managers and Corporate America

Benefits managers in particular are proponents of consumer-driven healthcare. They argue that employers should focus on which plans create the most value, go with quality, get employees to pay more, and move to a defined contribution approach. The concept of consumer-driven healthcare is being implemented in employer strategies to change participant and provider strategies. This trend stimulates competition among providers based on both price and quality and forces providers to offer more information about cost and quality. Providers who successfully differentiate their strategies to respond to this trend may benefit financially.

Hospital Operations

Consumer-driven healthcare will have major ramifications for the operations management function in hospitals. In order for hospitals to compete on both price and quality, they will need to develop greater flexibility in order to differentiate their service offerings. Such flexibility is not likely to occur without sophisticated information systems that allow for data integration.

Assessment

Of course, considerable staffing and training changes may be in order to provide this type of service. 

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Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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On Alternative and Complementary Medicine

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An Emerging Trend Vital to Traditional Medicine

[By Staff Reporters]

According to Associate Professor Gregory O. Ginn; PhD, MBA, CPA, MEd., of the University of Las Vegas, the term “alternative medicine” refers to alternatives to Western medicine, such as herbal medicine or acupuncture.

Definition

According to Dictionary of Health Insurance & Managed Care the term “complementary medicine” refers to the use of alternative medicine as supportive therapy in conjunction with traditional medicine. The use of alternative or complementary medicine cannot be dismissed as a fad and is already accounting for a significant volume of healthcare business. Complementary medicine is being accepted as adjunctive therapy to make patients feel better.

Assessment

Of course, greater flexibility will be required in all aspects of healthcare organizations to accommodate different modalities of treatment and thereby increase market share and revenues.

Conclusion

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State Mandated Health Insurance Laws

A Growing Listho-journal1

By Staff Reporters

State laws inform health insurers what health coverage they must offer as state mandates. For example, if a state says “behavioral health coverage,” then health insurance policies issued in that state must provide coverage for behavioral health benefits for the insured and dependents But, recall that no two states impose the same set of mandates, and coverage changes regularly. So, here is a list:

Alabama

  • Alcohol treatment
  • dependent coverage (from the moment of birth, including abnormalities)
  • mammograms
  • open selection of pharmacy

Alaska

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including abnormalities, and those who are adopted)
  • mammography
  • pap smears
  • prostate cancer screenings
  • phenylketonuria

Arizona

  • Dependent coverage (from the moment of birth, including those who are physically or mentally handicapped, and those who are adopted) mammography
  • outpatient care
  • home health care
  • mastectomy reconstruction
  • emergency care
  • diabetes self-management; mail-order pharmacies may not be required
  • prescription contraceptives (exceptions exist for religious employers)

California

  • Alcohol/drug/nicotine treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • lead screening for children
  • preventative care for children
  • home health care
  • infertility treatment
  • mastectomy and other reconstruction
  • diabetes self-management
  • pap smears
  • temporomandibular joint disorder
  • prosthetic devices
  • osteoporosis
  • off-label drugs
  • DES effects
  • prostate cancer screening

Colorado

  • Alcohol treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, and those who are adopted)
  • mammography
  • home health care
  • hospice care
  • maternity coverage for women
  • pregnancy complications
  • prostate cancer screenings
  • coverage may not be denied to an individual solely on the basis that the individual casually or professionally participates in skiing or snowboarding activities

Connecticut

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • home health care
  • comprehensive rehabilitation
  • occupational therapy
  • long-term care
  • metabolic disorders
  • mastectomy reconstruction
  • breast implant removal
  • diabetes
  • ambulance services
  • cancer
  • accidental ingestion of controlled drugs

Delaware

  • Mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities)
  • cancer screening (including Pap tests, mammograms, ovarian cancer, and prostate screenings)
  • lead screening
  • children’s immunizations

District of Columbia

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and preventive care)
  • mammography
  • Pap tests

Florida

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • second surgical opinions
  • HIV testing/infection
  • fibrocystic breast disease
  • ambulatory surgical care
  • mastectomy
  • reconstructive surgery
  • home health care
  • acupuncture
  • mammograms
  • diabetes
  • temporomandibular joint disorders
  • osteoporosis

Georgia

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • pregnancy complications
  • mammography
  • Pap tests
  • bone marrow transplants
  • prostate cancer screening
  • diabetes
  • heart transplants
  • outpatient services
  • osteoporosis
  • chlamydia screening
  • pharmacy open choice

Hawaii

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities, those who are mentally or physically handicapped, and those who are adopted,)
  • maternity expenses if employee covered for past nine months
  • mammography
  • in vitro fertilization
  • contraceptive services
  • emergency services
  • telehealth

Idaho

  • Dependent coverage (from the moment of birth
  • including abnormalities
  • those who are mentally or physically handicapped, and those who are adopted)
  • if mastectomy covered so must mammography be
  • elective abortions must be excludable
  • involuntary complications of pregnancy

Illinois

  • Alcohol treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • examinations of criminal assault or abuse victims
  • infertility when maternity is covered
  • mastectomy
  • reconstructive surgery
  • nonexperimental organ transplants
  • treatment for DES children
  • blood processing
  • temporomandibular joint disorders
  • ambulance service
  • off-label cancer drugs
  • fibrocystic breast disease
  • breast implant removal
  • colorectal cancer screening
  • diabetes

Indiana

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • mastectomy reconstruction
  • diabetes self-management
  • off-label drugs
  • infant screening exams where maternity is covered
  • prostate cancer screening
  • colorectal cancer exams
  • morbid obesity
  • pervasive developmental disorders
  • mental health

Kansas

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities, and adopted children)
  • mammograms
  • Pap smears
  • emergency care

Kentucky

  • Alcohol treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities)
  • mammography and reconstruction where mastectomy is covered
  • ambulatory surgery care
  • home health care
  • long-term care
  • bone marrow transplants
  • temporomandibular joint disorders
  • endometriosis
  • diabetes self-management
  • off-label cancer drugs
  • hearing aids and related services

Louisiana

  • Dependent coverage (from the moment of birth, including abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • Pap tests
  • ambulatory surgery care
  • immunizations for children
  • mastectomy reconstruction
  • diabetes self-management
  • prostate cancer screening
  • emergency care
  • off-label cancer drugs
  • outpatient surgery
  • use of mail-order pharmacies cannot be mandatory

Maine

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities, and those who are adopted)
  • mammography
  • home health care
  • AIDS coverage (cannot be more restrictive than for other illnesses)
  • mastectomy reconstruction
  • diabetes self-management
  • Pap tests
  • outpatient services
  • off-label cancer and HIV drugs
  • prostate cancer screening
  • breast prostheses for mastectomies
  • clinical trials
  • emergency services

Maryland

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities, and adopted children or grandchildren)
  • hospice care
  • home health care
  • child wellness
  • metabolic disorders
  • mammograms
  • infertility if maternity is covered
  • certain blood products
  • mastectomy reconstruction
  • diabetes
  • prostate cancer screenings
  • temporomandibular joint disorders
  • outpatient care
  • osteoporosis
  • pharmacy of choice
  • tuberculosis
  • off-label drugs
  • contraceptives
  • chlamydia screening
  • hospice care
  • emergency care

Massachusetts

  • Alcohol/drug treatment (only if you have more than five employees)
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities, and those who are adopted)
  • mammography
  • infertility treatments
  • home health care
  • pregnancy and childbirth
  • hospice care
  • ABMT (treatment for breast cancer)
  • preventive care for children
  • enteral nutrition
  • DES-related conditions
  • diabetes management
  • Pap tests
  • off-label drugs for HIV/AIDS
  • scalp hair prostheses
  • cardiac rehabilitation

Michigan

  • Dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped)
  • mastectomy reconstruction and prosthetics
  • emergency care
  • off-label cancer drugs
  • hospice care

Minnesota

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • home health care
  • well-baby care
  • emergency care
  • some diabetes treatment
  • prenatal care
  • mammograms and other cancer screening
  • breast-implant-related conditions
  • reconstructive surgery
  • exposure to DES
  • phenylketonuria
  • port wine stains
  • Lyme disease
  • Pap tests
  • temporomandibular joint disorders
  • outpatient care
  • off-label cancer drugs
  • fibrocystic breast disease
  • scalp hair prostheses

Missouri

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • preventive care for children
  • bone marrow transplants
  • reconstructive surgery after mastectomy
  • phenylketonuria
  • diabetes self-management
  • speech or hearing loss
  • elective abortions may be covered only under separate policy riders for which additional premiums are paid

Mississippi

  • Alcohol treatment
  • dependent coverage (from the moment of birth, including abnormalities and those who are physically or mentally handicapped)
  • temporomandibular joint disorders
  • open choice of pharmacy
  • off-label cancer drugs
  • mammography
  • diabetes
  • dental anesthesia

Montana

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • home health care
  • inpatient care for breast surgery
  • mastectomy reconstruction
  • phenylketonuria
  • metabolic disorders
  • open choice of pharmacy

Nebraska

  • Mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped)
  • childhood immunizations
  • mammograms
  • emergency care
  • off-label cancer and HIV/AIDS drugs
  • temporomandibular joint disorders
  • diabetes
  • abortions only to prevent death of mother
  • use of mail-order pharmacies can’t be mandatory

New Hampshire

  • Mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • nonprescription enteral formulas
  • mammograms
  • bone marrow transplants
  • mastectomy reconstruction
  • diabetes self-management
  • certain hair-loss prostheses
  • dental anesthesia

New Jersey

  • Alcohol treatment
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped)
  • mammography
  • Pap smears
  • second and third (sometimes) surgical opinions
  • reconstructive breast surgery and prostheses
  • home health care
  • blood tests
  • glaucoma tests
  • adult immunizations
  • wellness examinations
  • childhood immunizations for plans with over 49 enrollees
  • metabolic disorders
  • bone marrow transplants
  • maternity care
  • hemophilia blood products
  • diabetes self-management
  • lead poisoning screenings
  • prostate cancer screening
  • colon screening
  • open choice of pharmacy
  • off-label drugs
  • dental anesthesia

New Mexico

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • childhood immunizations
  • diabetes
  • Pap tests
  • ambulance service for childbirth

Nevada

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • mastectomy
  • reconstructive surgery and prosthetics
  • enteral formulas and special food products ordered by a physician
  • diabetes self-management
  • Pap tests
  • temporomandibular joint disorders
  • pregnancy and childbirth

New York

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped and those who are adopted)
  • mammography
  • home health care
  • preadmission tests
  • second surgical opinions
  • infertility treatment
  • preventive pediatric care
  • prescription enteral formulas
  • mastectomy reconstruction
  • maternity care
  • diabetes self-management
  • Pap tests
  • emergency care
  • nursing home care
  • hospice care
  • off-label cancer drugs

North Carolina

  • Dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted or foster children)
  • mammography
  • Pap tests
  • mastectomy reconstruction
  • diabetes self-management
  • prostate cancer screening
  • open choice of pharmacy
  • off-label cancer drugs

North Dakota

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • free choice of pharmacy
  • prostate cancer screening
  • temporomandibular joint disorder
  • dental anesthesia

Ohio

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammograms
  • Pap tests

Oklahoma

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • childhood immunizations
  • mastectomy reconstruction
  • diabetes
  • bone density tests
  • dental anesthesia
  • prostate surgery side effects
  • prostate cancer screenings

Nevada

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • mastectomy
  • reconstructive surgery and prosthetics
  • enteral formulas and special food products ordered by a physician
  • diabetes self-management
  • Pap tests
  • temporomandibular joint disorders
  • pregnancy and childbirth

Pennsylvania

  • Alcohol/drug treatment
  • dependent coverage (including those who are mentally or physically handicapped)
  • annual gynecological exams and Pap smears
  • mammograms
  • mastectomy reconstruction and prosthetics
  • phenylketonuria
  • diabetes self-management

Rhode Island

  • Alcohol/drug treatment, mental health coverage, dependent coverage (including those who are adopted)
  • home health care
  • pediatric preventive care
  • mammograms
  • mastectomy reconstruction and prosthetics
  • new cancer therapies
  • diabetes
  • Pap tests
  • second surgical opinions
  • infertility treatments
  • bone marrow donor testing abortion may be covered only under a separate rider, and only if mother endangered, rape, or incest

South Carolina

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • off-label cancer drugs
  • gynecological exams
  • mammograms
  • mastectomy reconstruction
  • Pap tests
  • prostate cancer screenings
  • emergency care
  • open choice of pharmacy

South Dakota

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • phenylketonuria
  • open choice of pharmacy
  • diabetes self-management
  • emergency care

Tennessee

  • Dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • mastectomy reconstructions
  • phenylketonuria
  • diabetes
  • prostate cancer screening
  • emergency care

Texas

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are physically or mentally handicapped, and those who are adopted)
  • coverage for AIDS (including HIV and HIV-related conditions)
  • infertility including in vitro fertilizations where pregnancy/childbirth is covered
  • childhood immunizations
  • mammograms
  • mastectomy reconstruction
  • diabetes
  • prostate cancer screening
  • temporomandibular joint disorders
  • free choice of pharmacy
  • home health care
  • telemedicine
  • emergency care

Utah

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • metabolic disorders
  • maternity benefits for birth mothers in adoptions
  • genetic information may not be used for purposes other than treatment

Vermont

  • Alcohol treatment
  • mental health coverage
  • dependent care coverage (from the moment of birth, including abnormalities, those with physical or mental handicaps, and those who are adopted)
  • mammography
  • certain cancer therapies
  • diabetes self-management
  • home health care
  • metabolic disorders
  • craniofacial disorders

Virginia

  • Alcohol/drug treatment
  • mental health coverage
  • dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • pregnancy treatment after rape or incest
  • HDC/ABMT (breast cancer treatment)
  • Pap tests
  • temporomandibular joint disorders
  • emergency care
  • early intervention therapies for children
  • open choice of pharmacy
  • off-label drugs
  • contraceptives
  • mastectomy reconstruction
  • hemophilia
  • diabetes
  • prostate cancer screening
  • cancer pain
  • hospice care

Washington

  • Alcohol/drug treatment
  • dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • home health care
  • mammography
  • breast reconstruction
  • hospice care

West Virginia

  • Dependent coverage (from the moment of birth, including abnormalities and those who are adopted)
  • home health care
  • primary care nursing
  • rehabilitation services
  • mammograms
  • diabetes
  • Pap tests
  • temporomandibular joint disorders
  • emergency care
  • childhood immunizations
  • cannot cancel if diagnosed with AIDS

Wisconsin

  • Dependent coverage (from the moment of birth, including those with abnormalities, those who are mentally or physically handicapped, and those who are adopted)
  • mammography
  • diabetes supplies
  • HIV drugs
  • home health care
  • kidney disease treatments
  • skilled nursing care
  • maternity care
  • emergency care
  • open choice of pharmacy

Wyoming

  • Dependent coverage (from the moment of birth, including abnormalities and those who are mentally or physically handicapped, and those who are adopted)

###

Alcohol Treatment: http://www.altamirarecovery.com/alcohol-treatment/

Conclusion

What do you think? As always, your thoughts and comments on this Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: http://www.medicalbusinessadvisors.com/marcinkobio.asp and www.stpub.com/pubs/authors/MARCINKO.htm

Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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A National Health Insurance Proposal

Transitioning from HIE-to-HIE

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Staff Reporters

Did you know that according to the New York Times, on November 12, 2008, Senator Max Baucus (D- Montana) would eventually require everyone – not just children – to have health insurance coverage, with federal subsidies for those who could not otherwise afford it, and possible enforcement through the federal tax-system?

The Proposed Health Insurance Exchange

The proposal would create a nationwide “health insurance exchange” [HIE] where people could compare and buy insurance policies, with an option of private insurance and a new public plan similar to Medicare. Insurers could not deny coverage to people who had been sick, and would be limited in their ability to charge higher premiums because of a person’s age or prior illness.

Adults also Insured

Adults aged 55 to 64 would be able to buy Medicare coverage if they do not have access to a public insurance program or a group health plan; Medicaid would be available to everyone below the poverty level. The State Children’s Health Insurance Program [SCHIP] would also be expanded to cover all uninsured youngsters in families with incomes at or below 250 percent of the poverty level; and legal immigrants would no longer be barred from Medicaid and the children’s health program in their first five years in the United States.

Small Business Assistance

The plan would also offer tax credits to small businesses to help them defray the costs of providing health benefits to employees, and would offer tax credits to individuals and families with incomes at or below four times the poverty level who buy coverage on their own.

Assessment

According to the Dictionary of Health Information and Technology, a health information exchange [HIE] may be defined as:

the mobilization of healthcare information electronically across organizations within a region, community or national infrastructure; especially disparate systems with the aim to facilitate access to – and retrieval of – clinical data to provide safer, more timely, efficient, effective, equitable, patient-centered care.

So, now it seems that we may be progressing from a health information exchange, to a health insurance exchange [www.HealthDictionarySeries.com]

Conclusion

What do you think? As always, your thoughts and comments on this Executive-Post are appreciated.

Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

 

 

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Evidence-Based Medicine

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An Emerging Trend Vital to Physicians

[Staff Reporters]

According to Associate Professor Gregory O. Ginn, PhD; MBA, CPA, MEd., of the University of Las Vegas, an emerging trend for all medical providers is evidence-based medicine that offers the promise of improving the quality of clinical services. And, some argue that evidence-based medicine is a trend that will prevail for the foreseeable future.

Definition

According to the Dictionary of Health Insurance and Managed Care, EBM involves the judicious use of the best current evidence in making decisions about the care of the individual patient. Evidence-based medicine (EBM) is meant to integrate clinical expertise with the best available research evidence and patient values. EBM was initially proposed by Dr. David Sackett and colleagues at McMasters University in Ontario, Canada.

Expert Driven Standards of Care

In the past, standards of care were often set by panels of experts. Today, however, there is a greater demand for empirical evidence to establish the efficacy of clinical protocols. Evidence-based medicine can directly affect financial performance because it facilitates the elimination of therapies that cannot be demonstrated to be effective.

Example:

For example, evidence-based medicine can reduce a hospital’s prescription drug costs. Evidence-based medicine may also affect operations management if it shows that multiple approaches to treatment can be efficacious. Of course, in order to accommodate different modalities of treatment, hospitals will need more sophisticated information systems that allow for data integration.

Assessment

Evidence-based medicine may also be used to support another trend, the development of alternative and complementary medicine.

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Healthcare Financials [Cash-Flow] Alert

The Cash-Crunch is On

By Dr. David Edward Marcinko; MBA, CMP™dem21

Healthcare organizations have significant short-term financing needs and are constantly rolling over large sums of commercial paper to finance accounts receivable [ARs] to pay their bills, vendors, debts, payroll and investors in the form of dividend payouts or retained earnings and disbursements, etc. 

  

But, because of the dismal economy and current credit-crunch, physician executives, healthcare administrators, hospital CEOs and all CXOs seem to be asking the same questions these days:  

·  If short-term financing suddenly becomes difficult to obtain, how will hospitals cope? 

·  What precautions can healthcare organizations take to prevent trouble down the road? 

·  Can the health industry turn to the Federal Reserve or US government for assistance? 

·  What else can we do as medical practitioners and/or as business owners/managers?  

Cause and Effect

To first understand root cause-and-effect of the credit squeeze, consider that at the beginning of 2008 there were five major investment banks in the US. By October only two remained in hybrid form, and credit was stifled.  What caused this major change was the so-called sub-prime mortgage security debt problem? Its’ prime catalysts was a financial derivative called a credit default swap (CDS) – which caused both the remaining investment and most commercial banks – to virtually stop their lending practices.

Credit Default Swaps [What they are – How they work]

According to the Dictionary of Health Economics and Finance, a derivative is a financial instrument that derives its value from another instrument www.HealthDictionarySeries.com

Derivatives can range from financial securities as simple as a stripped bond, or pooled mortgage, to extremely complex securities customized for a particular risk management need. And, some physician-executives know that perhaps the simplest form of derivative is a short-sale, where a bet is placed that some owned asset will go down, so that you are covered whichever way the asset moves. 

Example:

In an institutional example, a party would enter into a credit default swap contract with an insurance company, investment or retail bank; largely mortgage backed-securities.  Payment of premiums insured the default. In the event of obligation default, the bank would satisfy the contract. But, it is significant that in these transactions there was no federal or state regulatory body supervising them.

Why?  Because these contracts were not securities per-se and no oversight was necessary. The instrument does not even need to be associated with the buyer or the seller of the contract.

The Wall Street Gurus

And so, it seems that the smart financial folks on Wall Street that designed derivatives and credit default swaps, forgot to ask one thing; what if the parties on the other side of the bet didn’t have the [mortgage] money to pay up? As a result of this “amorphous toxicity default”, the short term commercial paper markets reached a three-year low of $1.6 trillion, in September 2008, as money-market fund managers – typically huge buyers of commercial paper – became extremely risk averse.

Some Possible Cash Crunch Solutions for Hospitals

Possible solutions to the cash-crunch involve passive external, and more active internal, strategies:

1. The EESA

Externally, for example, President Bush signed into law the Emergency Economic Stabilization Act (EESA) [Pub. L. 110-343, Div. A] On October 3, 2008. Commonly referred to as a bailout of the US financial system, it authorized the US Treasury to spend up to $700 billion to purchase distressed assets like CDSs and mortgage backed securities from the nation’s banks to free up the commercial paper market. Nine of the nation’s biggest banks have already received $125 billion of the Treasury’s $250 billion banking earmark, with $35 billion more going to various regional banks to increase liquidity.  

Traditionally, hospitals find commercial paper a less expensive liquid alternative to traditional asset-based borrowing. Commercial paper is a short-term promissory note issued by a hospital or other entity to raise short-term cash; either asset-backed or unsecured. The issuer of the note agrees to repay borrowed money within a range of one to 270 days, with 30 to 180 days being the most popular maturities.

2. The Fed’s Next Financing Gambit

Another program offered by the US Federal Reserve was to buy commercial paper as a means to increase access to funding and free up frozen credit markets. Clients, like hospitals and healthcare systems, with huge short-term funding needs are eager to take up the offer amid the difficulty in accessing credit. The new Commercial Paper Funding Facility (CPFF) provides a backstop to the commercial paper market that has been brought to a standstill, even for those industries – like healthcare – that are seemingly far removed from the financial sector. The CPFF will remain in place until Apr. 30, 2009, at which point the Fed Board of Governors would need to vote to extend it if necessary.

3. Interest Rates and the FOMC

Finally, the Federal Reserve cut interest rates at the Federal Open Market Committee [FOMC] meeting of October 29th; the second time this month. Overnight lending rates were lowered from 1.5% to 1.0%.

Other Intrinsic Financing Strategies

Other, more organizationally intrinsic, sort-term financial strategies that may be used by some hospitals to accelerate their own cash conversions cycles [CCCs] include: [1] shortening the average inventory holding period (ending inventory divided by revenues per day), and shortening the collection period (ending ARs divided by revenue per day). This is not an easy task however, but may be accomplished by streamlining and efficiently accelerating three key areas:  

1. Patient access made up of all the pre-registration, registration, scheduling, pre-admitting, and admitting functions.

2. Health information technology management consisting of chart processing, coding, transcription, correspondence, and chart completion.

3. Patient financial services which includes all business office functions of billing, collecting, and follow-up post-patient care. These functions are optimized with automated biller queues to improve and track the productivity of each biller; claims scrubbing software to ensure that necessary data is included on the claim prior to submission; and electronic claims and reimbursement processing to expedite the payment cycle.

Moving to Cash

Under current pressure from the troubled economy, hospitals can also turn to their investment cash flow as a source of short term capital financing by focusing attention on managing and rebalancing investment portfolios. Although investment income typically is viewed in a hospital’s capital budget, it may be used as supplemental cash generated from operating activities in an emergency. This is accomplished by:  

·    allocating a greater proportion of invested assets to cash and short-term investments,

·    seeking marginally higher returns from other investment classes like mutual funds and real estate investments. 

Non-Profit Fund Raising

Of course, not-for-profit hospitals can accelerate fundraising to generate cash donations. Donations are a good source of quick capital in certain markets. However, one must be aware of expended fundraising costs and it is important to ensure that all the costs incurred in fundraising activities are properly attributed.

Assessment

For more info: www.HealthcareFinancials.com

Conclusion

Please subscribe and contribute your own thoughts, experiences, questions, knowledge and comments on this topic for the benefit of all our Executive-Post readers.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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iMBA Inc. [Meet a Sponsor]

iMBA Inc., Press Release

Atlanta Georgia

November 20, 2008

Hello, my name is Ann Miller of the Institute of Medical Business Advisors www.MedicalBusinessAdvisors.com in Atlanta, Georgia.

We are an independent medical consulting, health economics, educational publishing and information firm. We specialize in topical and analytical white-papers; dictionaries www.HealthDictionarySeries.com and books; compliance, regulatory, legal, business and financial reports; market research; and quality print-journals for all medical providers, hospitals and healthcare organizations www.HealthcareFinancials.com.

We are read by CEOs, CFOs, CXOs, physician-executives and nurse administrators, and related financial services professionals in the domestic healthcare space www.CertifiedMedicalPlanner.com

After researching and reading industry publications, I would like to share some news that your own loyal subscribers, readers and clients will appreciate. We are working with iMBA Inc., to bring you this new web forum at: www.HealthcareFinancials.wordpress.com. It is designed to serve the needs of all involved in HealthCare 2.0.

The website blog, Executive-Post, provides breaking industry updates, insider essays, editorials, interviews, expert commentaries, case models, news, a job board, an Editorial Advisory Board and moderated practice management forums with comments from both leading industry experts, grass-roots practitioners, and the internet cloud.

And, much content created for the Executive-Post is freely licensable under the GNU Free Documentation License (GFDL).

Sample Engagements: engagements

For more information, please contact:

Ann Miller; RN, MHA [Executive-Director]

Suite 5901 Wilbanks Drive

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770.448.0769 [voice]

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Hospital Administrative Systems

ROI Economics of Non-Clinical Information Systems

Staff Reporters

Unlike clinical or health information systems [CIS] or [HIS], nearly all hospitals have at least some functions computerized in a technology administrative information system environment.

Usual Functions

According to Brent A. Metfessel; MD MS, typical functions of any health or hospital administrative information system [HAIS], include the following, which may impact return on investment [ROI] economics: 

  • admission scheduling;
  • accounts payable and receivable;
  • patient and payer billing;
  • patient demographic information such as name, unique identifier, age, gender, reason for admission, and other data items;
  • staffing and staff scheduling;
  • pharmacy inventory;
  • internal finance, budgeting and accounting;
  • patient census; and
  • facility maintenance.

Invoicing and Billing Functions

Billing functions are another area where a hospital can obtain more immediate ROI. Often, newly implemented billing systems can provide a hospital with a positive ROI within the first year of active system use. Automating the billing functions, such as the Centers for Medicare and Medicaid Services (CMS) UB-92 claim submission form, can save several FTEs per 100 beds.

Administrative functions are one of the areas where computerized systems can lead to significant revenue increases, as a quicker turnaround time and computerized entry of patient information can lead to improved coding quality and efficiency.

Example:

One hospital in the southern United States enhanced its surgery departmental billing system, reducing the billing turnaround from a three- to four-day cycle to a 24-hour process, leading to a significant increase in revenue. More accurate and complete coding also leads to an increase in the revenue stream as more secondary diagnoses are entered and overly general primary diagnoses are given more specific International Classification of Diseases (ICD-9) codes.

Assessment

More info:  www.HealthcareFinancials.com

Conclusion

As always, your thoughts and comments on this Executive-Post are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Clinical Information Systems

More than Hospital Administration Technology 

Staff Reporters

In contrast to hospital administration systems [HASs], according to Richard Mata MD MIS, clinical information systems [CISs] deal directly with patient care processes and results. Clinical system sophistication varies widely from hospital to hospital and has the strongest presence in tertiary care centers. And, some hospitals have become nearly “paperless” due to the installation of leading edge clinical information systems.

Leading Edge Hospitals

Several leaders have emerged in the field of clinical informatics, most of which are tertiary care centers and teaching hospitals. Whereas the typical hospital only has about 3 to 5% of its budget allocated toward information systems, these medical centers often have a much greater percentage earmarked for such systems.

Functions and Functions

Hospital clinical information systems [CISs] encompass a wide range of features and functions, and modules may include the following:

  • pharmacy information systems which may include bar coding and drug interaction checking;
  • computer physician order entry [CPOE] systems allowing clinicians to directly order tests and treatments on line. These systems can also check for selected appropriateness of care parameters;
  • other departmental systems such as laboratory information systems [LISs], radiology systems, and intensive care clinical computing; and
  • electronic medical record (eMR) systems, which allow physician orders, free text clinical notes, decision support, radiology images, and other areas to be nearly fully computerized, allowing a “paperless” medical institution.

High Start-Up Costs

Both budget outlays and implementation strategies for these systems are highly variable and require much deliberation and foresight. The start-up costs of these systems can vary from several hundred thousand dollars for a departmental system in a community hospital to tens of millions of dollars for EMR systems in large centers.

Assessment

In addition, ROI calculations become more subjective, as ROI is more dependent on cost avoidance (e.g., from fewer medical errors, more efficient work processes) rather than revenue generation. However, improvements in quality of care from well thought-out development and implementation can still provide significant financial returns.

More info: www.HealthcareFinancials.com

Conclusion

Please contribute your own thoughts, experiences, questions, knowledge and comments on this topic for the benefit of all our Executive-Post readers.

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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About Practice Valuation On-Site Visits

Establishing Medical Practice Value

Staff Reporters 

One effective means for any valuation professional to confirm his or her understanding of medical business value, and how internal controls over financial and managerial reporting are designed and operated in a practice, is to evaluate and test its effectiveness, in-situ.

Purpose of the Visit 

According to valuation experts Robert James Cimasi, Tim Alexander and Todd A. Zigrang, of Health Capital Consultnts, LLC in St. Louis MO, the following information specific to the medical entity should be gathered by the financial executive, valuation expert or healthcare consultant. This information may be obtained through an interview, questionnaire, but preferably the on-site visit:

  • Background Information: Include such information as the number of years the entity has operated at its current location and in the community, as well as the office hours.
  • Building Description: Include the location (urban/suburban), proximity to hospitals and other medical facilities, and its size, construction, electrical and computer wiring, age, access to parking, and so on.
  • Office Description: Determine ownership or lease details, the square footage and number of rooms, and a description of different office areas. These should include, where applicable: x-ray, pharmacy, laboratory, exam rooms, waiting rooms, and other areas.
  • Management Information Systems: Document types of hardware and software and the cost, age, and suitability of all components, including their management functions, reporting capabilities, and integration between programs.
  • History of the Entity: Give the date founded and by whom, the number of full-time equivalent (FTE) physicians in practice by year, the physicians who have joined and left the entity, the dates they practiced and their relationship and practice arrangement with the entity.
  • Staff Description: Include the number and types of non-physician positions and the tenure and salary of all current employees.
  • Competitive Analysis: Include details of hospital programs impacting practice, growth or decline in the volume of business and the reasons, association with other physicians, competitive strengths and threats, the number and volume of procedures performed, any change in the number and volume, and the corresponding fees.
  • Patient Base Information: Encompass income distribution and percentages from different payers, the number of new patients and total patients seen per week, the age mix of patients, the number of hours spent in patient care per week, and the number of surgeries performed.
  • Managed Care Environment: Detail the terms and conditions of all managed care contracts including discounts and withholds, the impact on referral patterns and revenues, willingness to participate in risk sharing contracts and capitation, and the entity’s managed care reporting capabilities.
  • Hospital Privileges and Facilities: List all hospital privileges held and the requirements for acquiring privileges at the different local hospitals.
  • Credit Policy and Collections: Include practice policies for billing and payment, use of collection agencies, acceptance of assignment, other sources of revenues, and an aged breakdown of accounts receivable.
  • Financial Management: Include cash management procedures and protections, credit lines and interest, controls to improve payment of accounts payable, late payment frequency, formal or informal financial planning methods, and budgeting processes.
  • Operational Assessment: Include practice governance structure, responsibilities and procedures for performance, conflicts, recruitment, outcomes measures, case management, reimbursement, income, continuing medical education (CME), credentialing, and utilization review.

Assessment

Be sure to allow for discussion of overall relationships with physicians in the community, practice concerns, and needs.

For more info: Consult the chapter: Research and Financial Benchmarking in the Healthcare Industry, by the same authors, in www.HealthcareFinancials.com

Conclusion

And so, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Advisors Fees vs. Brokerage Commissions

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Beware Assets-under-Management [AUMs]

[Dr. David Edward Marcinko MBA, CMP™]

dem-thinking

I don’t think that doctor-colleagues realize how much more a fee-based financial planner – or financial advisor – might take from a physician-client using an assets-under-management [AUM] subscription business model; than a traditional commission-based stock broker? Of course, commissions are what stock-brokers earn; and “broker” is a bad word today. The more politically correct term seems to be “planner” or “advisor” or “vice-president” or ‘wealth manager”; and these folks earn “fees” along with their confusing nom de plumes. But should they?

Example:

Look at 1% of $100,000 which comes to $1,000 per year. If a doctor-client is in it “for the long haul,” we can see why financial advisors want this money for the “long haul.” Twenty years of this model comes out to nearly $20,000 in fees [assuming zero growth]. If a financial advisor was going to stick the doctor in some investment and leave him alone, would it not have been better to take a one-time $5,000 commission, say at 5%? This way the doctor-client keeps the remaining $15,000. If the money actually grows over time – which it should in the long run – the advisor earns even more.

False Arguments

Now, don’t try to accept the false argument that this puts financial advisors “on the same side of the fence”, as the physician-client or that it allows advisors to take better care them. First off, clients should be taken care of, well. But, it also encourages the advisor to “risk-more to earn more”, and/or to goad the doctor-client into putting more money into the subscription-based account, rather than paying off the mortgage, for example. In fact, the recent mortgage crisis and stock market meltdown suggests that this deceptive argument may have been more common than realized. So, why not ask your advisor/broker to explain both ways s/he gets paid; and then decide for yourself – fees versus commissions?

Assessment

Of course, in today’s world of “assets-under-management,” the word “commission” is taboo. No “real financial planner” takes commissions; he or she would rather manage investments for a “fee” that lasts forever.

PS: Financial advisors really don’t mange most of these accounts, anyway. They are aggregated and outsourced to other firms, for a small sub-fee [a bit less than the original 1%]. The advisor then sends a nice quarterly report to the doctor, as if they did all the work!  Now, do you realize why the best name for these folks is “asset gatherers”; they often do little more than market and sell.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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The Re-Emergence of Medical Capitation?

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Re-Thinking Fixed Payment Medicine 

[By Dr. David Edward Marcinko; MBA, CMP™ ]

[By Hope Rachel Hetico; RN, MHA, CMP™]

In February 2008, the industry leading California legislature passed “Welfare and Institutions” Code Section 14105.19. It required a 10% fee-for-service payment reduction to Medi-Cal physicians and mental healthcare providers. The new law took effect on July 1, 2008 and the rush seeking managed care capitated contracts was on. 

Capitation Back-in-the-Day

Yet, only a decade ago, astute physician executives and healthcare administrators thought it incredulous that they should accept pre-payment for unknown commitments to provide an unknown amount of medical care or health services. It seemed to create an unnatural and difficult set of incentives where fewer patients were seen, and less care rendered. It never equated to additional reimbursement. And, more than a few medical providers and healthcare facilities had a natural aversion to capitated, fixed payment or contractual medicine. It had always been associated with the worst components of managed care; hurried office visits and soul-less physicians.

Fixed Payments Re-Emerging

Today, the national conversion to a modified form of capitation financing is again re-emerging as a marketing force, and not merely a temporary healthcare business trend. More than 40% of all physicians in the country are now employees of a managed care organization that uses, or is re-considering, actuarially-equivalent medical capitation.

The Promise?

Has medical capitation reimbursement finally fulfilled its promise as a quality improving and revenue enhancing machination; or is it just another managed care cost reduction strategy that financially squeezes doctors and hospitals, and limits patient care and choice? To answer this query, one needs to review the Stark Laws.

Whole-Sale Medicine

Curiously, Stark Laws I, II and III were created to eliminate self-referral concerns potential leading to excessive medical care and fee-for-service payments. Ironically, these types of economic enriching paradigms of less-care were perfectly acceptable. Many, also never understood how a commitment to treat an entire patient population cohort could be made with little or no actuarial information. Hence frustration was the initial exposure of many medical providers to capitated reimbursement; also known as “wholesale medicine.”

Aligned Incentives

But, since inception, more modern medical cost accounting endeavors have gradually demonstrated that capitation has some advantages over traditional fee-for-service care. For example, it can create and align incentives that help patients, providers and payers by limiting their contingent fiscal liabilities. So, capitation in the current credit-deprived nationally economy is increasingly being viewed in a more positive way. More importantly, those healthcare organizations and providers that embrace it may thrive going forward; while those opposed may not!

Assessment

So, how should physician and nurse executives, administrators, CXOs, managers and financial advisors navigate these treacherous fixed-payment waters?  One sound approach is to rely on a leader in the hospital, medical clinic and healthcare administration publication industry.  Our 2-volume, 24 chapters, quarterly journal-guide is relevant to the entire fluctuating healthcare space and can be a valuable navigation tool – in these troubling economic times. 

Capitation “ReDux” – Part Two

MORE: Capitation & Actuarial Medical Econometrics

Conclusion

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INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

 

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Non-Profit Hospitals Seeking Financing

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Association of Debt Financing with Not-For-Profit Hospitals

[By Dr. David Edward Marcinko; MBA, CMP™]

US not-for-profit hospitals undertook unprecedented amounts of debt in the mid-to-late 1990s. This happened because sparse corporate finance theory – and the modicum of economic literature on hospital financing at the time – suggested that debt constrained hospitals’ capacity to deliver uncompensated care.

Little Research

Yet, few health economists empirically evaluated the potential association of debt financing with uncompensated medical care. Of the first perhaps – in our space – was Stephen A. Magnus; PhD, MS Assistant Professor, Department of Health Policy and Management, University of Kansas School of Medicine; Dean G. Smith, PhD, Professor and Chair, Department of Health Management and Policy, University of Michigan School of Public Health; and John R.C. Wheeler, PhD, Professor, Department of Health Management and Policy, University of Michigan School of Public Health [personal communication].

Multi-State Statistical Analysis

In one of the first statistical analyses of a multi-state sample of audited hospital financial statements in 1997 – and ultimately published in the Journal of Health Care Finance in 2004 – the researchers found that hospital debt levels predict higher levels of uncompensated care.

More Tax-Exempt Debt Issued

As further studies yielded similar results over time; hospital boards, policy makers and regulators concerned with the provision of uncompensated care encouraged hospitals to issue more debt. This encouragement was provided through explicit flexibility, such as removing requirements for hospitals to issue tax-exempt bonds through state finance authorities and/or removing the project financing constraint. Likewise, hospital CFOs and physician-executives who managed their organizations’ financial risk, benefited from a realization that optimizing the sources of financing did not impede mission-related objectives.

Assessment of Temporal Trade-Offs

Relationships between hospital operations, including uncompensated care, and capital structure represent a fruitful area for future investigations. A key issue to explore is the possibility of inter-temporal trade-offs. Higher levels of debt may initially help to fund public services like uncompensated medical care, but debt repayment eventually could limit a hospital’s ability to provide core community benefits.

Bankruptcies

Up until the recent financial meltdown and credit market freeze, even current studies still seemed to offer no evidence to support concerns that debt had a negative impact on uncompensated care. However, hospitals filing bankruptcy in the fourth quarter, of 2008 included: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and four hospital system Hospital Partners of America, in Charlotte. 

Assessment

On the other hand, research results simply may have reflected the unusual economic and stock-market conditions prevailing in the mid 1990s; that are certainly not present today.

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Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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About Suicide Economics

Thinking the Unthinkable

By Dr. David Edward Marcinko; MBA CMP™

Staff Reporters

According to the Wall Street Journal, November 5, 2008, voters in Washington State just passed an initiative legalizing physician-assisted suicide.

Passed by a Margin of 3:2

A state measure known as “Initiative 1000” passed by a margin of 59% to 41%, making it legal for doctors to prescribe a lethal dose of medication for patients with less than six months to live. The law is packed with provisions intended to limit the practice. For example, patients must make two separate requests, orally and in writing, more than two weeks apart; must be of sound mind and not suffering from depression; and must have their request approved by two separate doctors.

The Oregon Experience

However, doctors are not allowed to administer the lethal dose. In Oregon, the only other state with a similar law, some 341 patients have committed physician-assisted suicide in the 11 years the law has been in effect.

Economics of Assisted Suicide

Decades ago, the economist John Maynard Keynes’s suggested that saving may be a private virtue, but a public vice. According to Keynes, a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less. But, the community that increases its consumption at the expense of saving would end-up being richer and saving more. This proposition is frequently stated in macroeconomics textbooks as the “paradox of thrift.”

Assessment

The average lifespan, in the US, was about 67 years when Medicare was passed. It is about 78 today. Rising healthcare costs are led by this longevity. In other words, death financially supports survivors.  

Conclusion

And so, is “Initiative 1000” a human socio-economic metaphor for the “thrift-paradox”; please opine and comment?

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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Health Economists and the Economy

“The Not-So-Dismal Science”

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

Fenway Park Dr. Marcinko

Economics was labeled the “dismal-science” by Thomas Carlyle a century ago. Since then, its tradition of negativity carries into the present recessionary environment. As the corporate credit and home mortgage crisis escalates, the financial and pharmaceutical industries implode and the population ages, hospitals are shuttered, re-sized or merely struggle onward with trepidation. And, daily, the media focuses on the increasing number of our citizens without health insurance.

To “Afflict the Comfortable and Comfort the Afflicted”

Such media coverage is expected entering into a general economic contraction, recession and/or depression for the healthcare sector, and economy as a whole.

But, in their zeal to “afflict the comfortable and comfort the afflicted”, the media victimizes the for-profit class, while it champions public hospitals, not-for-profit clinics and nanny-state medical care. The news is pre-occupied with calamity even when the health sector is fundamentally strong.

A Print Guide for us All

OK, premium print guides like Healthcare Organizations [Financial Management Strategies] know that bad news draws more subscribers than good news.

When all is well, physicians, executives and administrators are not keen on constructive change. There are also fewer reasons to log-on to this Medical Executive-Post blog. It’s all a matter of perspective!

Q: But, why is the media’s take on economic issues so important?

A: Because it has significant impact on how patients view the entire healthcare industrial complex! It influences how doctors, insurers and politicians adjust their own lobbying and legislative initiatives. And, it governs how CFOs invest in capital expenditures, as well.

Historical Review

Yet, media glare on our industry is not new. It began in 1963 with the article “Uncertainty and the Welfare of Medical Care,” and again in 1972 when Nobel Laureate Kenneth J. Arrow PhD shocked academe’ by identifying health-economics as a separate and distinct field. He codified seemingly disparate insurance, econometric, statistical, business and financial management principles for us all. And, he argued that the marketplace was incapable of insuring against the uncertainties we face in the healthcare arena.

Another View

Of course, the opposing viewpoint argues that, without the existence of a competitive market, individuals lose their freedom to choose, or are allowed to consume medical care for “free.” Therefore, the marketplace cannot learn what an individual values most.  Nevertheless, to informed executives and our readers and subscribers, Arrow served as progenitor to the modern strategic health advisory era. In 2004, he was awarded the National Medal of Science for his innovative views.

Economy as Excuse for Self-Pity

Unfortunately for some hospitals, disinformation and exaggeration about health economics is just the excuse needed for self-pity, or to reduce or cease operations. “It’s not our fault, we can’t compete in a free-market economy and our patient satisfaction rates are falling. The malaise is sapping our morale”; etc, and ad nausea 

A More Positive Approach

For others, there is the more positive proactive track of your editors, contributing authors and enlightened consultants.

Example:

In a recent budget meeting, one young hospital CFO cautioned physician-executives and healthcare administrators to watch every dollar in anticipation of a softening economy. Yet, his more seasoned CEO responded:

Fiscal prudence is important, but if you are asking me to take my foot off the gas pedal, my position is that we should choose not to participate in this recession.”

He further opined that we all must anticipate changing cycles, recessions and adverse demographics. But, let’s not make it a self-fulfilling prophecy. It is the astute CEO who realizes that strong financial statements lie in effective negotiation skills and the management of revenue cycles.

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And conversely, that strong entity management and informed decision-making is the basis of an enhanced revenue cycle. In practical terms, this means understanding the process and targeting core aspects revenue growth to fine-tune and support the entire healthcare enterprise.

And so, if you are not a subscriber to this blog, or to our print journal, we trust you will review, communicate, use and profit from both. Let Healthcare Organizations [Financial Management Strategies] enhance your knowledge of modern [new-wave] health-economics, finance and collaborative medical management and avoid its confusion with the traditional [non-Healthcare 2.0] dismal-science.

PS: Don’t forget to review-read-rave and rant online at this communications forum.

Conclusion:

Your thoughts and comments are appreciated; especially from our print journal guide subscribers and all readers of this professional network.

Related Information Sources:

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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Medical Billing Normalization Comparisons

Understanding Medical Billing Invoice Variations

Staff Reporters

Deviations in medical billing may often be detected through utilization data that the government or private insurance companies produce on all providers that submit a claim for payment of services. Uncle Sam and insurance companies track utilization through a variety of parameters, including CPT codes, ICD-9-CM, or number of referrals; etc.

Benchmark Differences

However, different programs utilize varying benchmarks to trigger a review. For example, a physician who sees patients in the office from 8:00 a.m. until 8:00 p.m., seven days a week and has the highest billing amounts in the region can be subjected to a review. This doctor’s activities would be scrutinized. The utilization review department would probably flag this doctor’s provider number and request more information on a sampling of his or her claims, based almost solely on the volume.

Doctors

Example:

Some other utilization review activities may occur due to the type of services that a doctor may offer. For example, if a cardiologist should suddenly start billing for a large number of incisions and drainage of foot abscesses, this might trigger a review, since that might not be a typical scope of service for this doctor in this locality. The same could be said for a pathologist, triggering a review due to the high volume of wound care or ulcer debridement.

Geographic Variations

Thresholds also vary from locale to locale regarding what triggers an audit. There are consultants who have suggested querying local carriers for medical provider specific information regarding utilization activity to compare against community performance. On the other hand, some Carrier Advisory Committee [CAC] representatives have indicated that this may bring undesirable attention from the Medicare program and trigger an audit.

Assessment

Now that the concept of medical billing normalization has been proposed, and we have some definitional clarity regarding potential variations, consulting professionals suggest obtaining current information with caution.

Conclusion

Please subscribe and contribute your own comments on this billing normalization topic for the benefit of all our Executive-Post readers.

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Healthcare Fraud versus Healthcare Abuse

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Understanding Definitional Semantics

[Staff Reporters]dhimc-book

Fraud Defined

Fraudmay be defined as any illegal healthcare activity where someone obtains something of value without paying for, or earning it. In healthcare, this usually occurs when someone bills for services not provided by the physician.

Abuse Defined

According to the Dictionary of Health Insurance and Managed Care, healthcare abuse is the activity where someone overuses or misuses services. And, according to the Center for Medicare and Medicaid Services [CMS]:

“although some of the practices may be initially considered to be abusive, rather than fraudulent activities, they may evolve into fraud.”

Example:

In the case of healthcare abuse, this may occur when a physician sees the patient for treatment more times than deemed medically appropriate. If there are reported issues or actions from other sources, such as the NPDB or a medical board, a health insurance program can take that opportunity to review healthcare providers’ activities. Most participation agreements allow for this type of scrutiny.

Assessment

And so, now that a workable definition of healthcare fraud and abuse has been proposed, and we have some definitional clarity, any preliminary billing or invoice review program will usually request a sampling of specific medical records. This may progress to an on-site review of any and all medical records of patients that participate in a CMS program.

These activities can be generated by the plan’s quality assurance, or quality improvement program, and often are tied to the credentialing process for a provider’s participation.

Conclusion

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The “Health-Cloud” Defined

What it is – But not how it works!

By Dr. David Edward Marcinko; MBA, CMP™

[Editor-in-Chief]

As commentators, IT pundits, health economists, journalists and so-called experts, we all know that any market is immature when an industry can’t agree on a definition or term-of-art.

Of course, that’s why we just released the Dictionary of Health Information Technology and Security, and several other related works like: Dictionary of Health Insurance and Managed Care – and – Dictionary of Health Economics and Finance.

Of Doctors and Confused Customers and Vendors

The lexicon problem is exacerbated in healthcare IT however, as customers, er-a doctors and medical professionals, still don’t understand what the “computing cloud” or “grid” actually is. This is no doubt important with the recent – and older – governmental pushes toward eHRs, as well as economic bonuses [Medicare 5.1%] for implementation of same.

And, eHR vendors compound the obfuscation when they themselves use the term to describe just about any product they can sell that can be delivered from, or touching a data center. The word “health-cloud” clutters the definitional standardization scene much as the terms “HIPAA”, “HL-7”, and “compliance” did back-in-the day. So, after editing three dictionaries – with a fourth in progress – here goes our modified definition of the “health cloud” with cudos from non-physician colleague Rob Preston of Information Week.

Health-Cloud Defined

The “health-cloud” or “health-cloud computing” refers to:

a highly scaleable health information technology source – hardware, software, CPUs, and storage capacity –  that is housed outside of medical data centers, and available on-demand by doctors, patients, payers, government and employers over the Internet, and whose secure variable usage is measured and invoiced incrementally.

Private health clouds mimic those characteristics inside health entity firewalls, but lack the economies-of-scale found in public health clouds.

Assessment

Now that a workable definition has been proposed and we have some definitional clarity, bring on the eHR products and HIT services that physicians can use.

Conclusion

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Health IT, the Markets and the New Administration

Digital Technology and Future Federal Health Policy

Staff Reporters 

According to the Dow Jones Newswires, at 12:17 PM ET on 11/05/2008, companies providing digital technology to manage patient records and prescribe drugs are likely to benefit from the administration of Barack Obama.

Health IT Beneficiaries

Why? President-elect Obaba wants to spend $50 billion to computerize the US medical infrastructure and several companies could benefit.

For example, Irvine, Calif.-based Quality Systems Inc. (QSII), Watertown, Mass.-based Athena Health Inc. (ATHN) and Chicago-based Allscripts-Misys Healthcare Solutions Inc. (MDRX) are among the companies that could benefit, directly or indirectly, from government money as a result of an as-yet vaguely defined high-tech health-care proposal. 

Other IT Companies

Many more companies, including Allscripts’ hardware partner, Round Rock, Texas-based Dell Inc. (DELL), could even see revenue rise if investment takes off; according to the Charles Schwab Company.  

Assessment

And – as reported – according to John Sheils – senior VP of the Lewin consulting group in Virginia – “This is going to be a boon because there will be demand for these systems, then demand for maintenance and improvements, plus the software that people would need,”  

Conclusion

Your thoughts and comments on this Executive-Post are appreciated. What say our financial advisors and investment consultants?

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Securitizing Social Security?

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Socialize Medicare, Too?

[By Staff Reporters]

Social security and Medicare are always topics of discussion by healthcare administrators, physicians, advisors and related financial executives.

Investing Off the Radar Screen

But, with stocks depressed, why has the idea vanished off the radar screen? If the idea is to buy low and sell high, why isn’t it now, in the middle of a bear market, an even better idea?

Buy Low

Financial writer Jim Jubak, who is not formally an economist or even involved in healthcare, brought this up in his web column recently. His specific question, sent in by a reader, was a good one: Why isn’t anyone talking about putting Social Security money into stocks now that they’re down 40% from their October 2007 highs?

Assessment

And, what about a portion of Medicare?

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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New Federal eRx Incentives

Program to Begin on January 1, 2009

By Staff Reporters

According to the Kaiser Daily Health Policy Report, of November 2, the Centers for Medicare and Medicaid Services [CMS] confirmed details of an electronic prescribing incentive program for physicians. Scheduled to begin on Jan. 1, 2009, it would increase Medicare payments for doctors who use the health information technology.

New Program

And, under the new program, according to the Kaiser Daily Health Policy Report, physicians who use e-prescribing technology to deliver medication prescriptions to pharmacies will be eligible for a two percent increase in their Medicare payments. Physicians who participate in the agency’s Physician Quality Reporting Initiative [PQRI] would also qualify for a two percent payment increase in addition to the scheduled 1.1 percent payment increase for all physicians in 2009.

Assessment

Physicians who participate in both the e-prescribing and PQRI initiatives would receive a 5.1 percent bonus in Medicare payments next year.

Conclusion

Your thoughts and comments on this Medical Executive-Post are appreciated.

Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Healthcare Credit Squeeze

Seeking Commercial Paper

By Dr. David E. Marcinko; MBA, CMP™

Hospitals and healthcare organizations have significant short-term financing needs and are constantly rolling over large sums of commercial paper to finance accounts receivable [ARs] to pay their bills, vendors, debts, payroll and investors in the form of dividend payouts or retained earnings and disbursements, etc. But, because of the dismal economy and current credit-crunch, physician executives, healthcare administrators, hospital CEOs and all CXOs seem to be asking the same questions these days:

  • If short-term financing suddenly becomes difficult to obtain, how will hospitals cope? 
  • What precautions can healthcare organizations take to prevent trouble down the road? 
  • Can the health industry turn to the Federal Reserve or US government for assistance? 
  • What else can we do as medical practitioners, CFOs and/or physician executives?

Cause and Effect

To first understand root cause-and-effect of the credit squeeze, consider that at the beginning of 2008 there were five major investment banks in the US. By October only two remained in hybrid form, and credit was stifled.  What caused this major change was the so-called sub-prime mortgage security debt problem? Its’ prime catalysts was a financial derivative called a credit default swap (CDS) – which caused both the remaining investment and most commercial banks – to virtually stop their lending practices.

Credit Default Swaps [What they are – How they work]

According to the Dictionary of Health Economics and Finance www.HealthDictionarySeries.com, a derivative is a financial instrument that derives its value from another instrument. Derivatives can range from financial securities as simple as a stripped bond, or pooled mortgage, to extremely complex securities customized for a particular risk management need. And, some doctors know that perhaps the simplest form of derivative is a short-sale, where a bet is placed that some owned asset will go down, so that you are covered whichever way the asset moves.  

Example:

In an institutional example, a party would enter into a credit default swap contract with an insurance company, investment or retail bank; largely mortgage backed-securities.  Payment of premiums insured the default. In the event of obligation default, the bank would satisfy the contract. But, it is significant that in these transactions there was no federal or state regulatory body supervising them. Why?  Because these contracts were not securities per-se and no oversight was necessary. The instrument does not even need to be associated with the buyer or the seller of the contract.

Wall Street Gurus [nyuck! nyuck! nyuck!]

And so, it seems that the smart financial folks on Wall Street that designed derivatives and credit default swaps, forgot to ask one thing; what if the parties on the other side of the bet didn’t have the [mortgage] money to pay up? As a result of this “amorphous toxicity default”, the short term commercial paper markets reached a three-year low of $1.6 trillion, in September 2008, as money-market fund managers – typically huge buyers of commercial paper – became extremely risk averse.

Some Possible Cash Crunch Solutions for Hospitals

Possible solutions to the cash-crunch involve passive external, and more active internal, strategies.

The EESA

Externally, for example, President Bush signed into law the Emergency Economic Stabilization Act (EESA) [Pub. L. 110-343, Div. A] On October 3, 2008. Commonly referred to as a bailout of the US financial system, it authorized the US Treasury to spend up to $700 billion to purchase distressed assets like CDSs and mortgage backed securities from the nation’s banks to free up the commercial paper market. Nine of the nation’s biggest banks have already received $125 billion of the Treasury’s $250 billion banking earmark, with $35 billion more going to various regional banks to increase liquidity. Traditionally, hospitals find commercial paper a less expensive liquid alternative to traditional asset-based borrowing. Commercial paper is a short-term promissory note issued by a hospital or other entity to raise short-term cash; either asset-backed or unsecured. The issuer of the note agrees to repay borrowed money within a range of one to 270 days, with 30 to 180 days being the most popular maturities.

The Fed’s Next Financing Gambit

Another program offered by the US Federal Reserve was to buy commercial paper as a means to increase access to funding and free up frozen credit markets. Clients, like hospitals and healthcare systems, with huge short-term funding needs are eager to take up the offer amid the difficulty in accessing credit. The new Commercial Paper Funding Facility (CPFF) provides a backstop to the commercial paper market that has been brought to a standstill, even for those industries – like healthcare – that are seemingly far removed from the financial sector. The CPFF will remain in place until Apr. 30, 2009, at which point the Fed Board of Governors would need to vote to extend it if necessary.

Interest Rates and the FOMC

Finally, the Federal Reserve cut interest rates at the Federal Open Market Committee [FOMC] meeting of October 29th; the second time that month. Overnight lending rates were lowered from 1.5% to 1.0%.

Other Intrinsic Financing Strategies

Other, more organizationally intrinsic, sort-term financial strategies may be used by some hospitals, and medical clinics, to accelerate their own cash conversions cycles [CCCs]. This is not an easy task however, but may be accomplished by streamlining and efficiently accelerating three key areas:

  1. Patient access made up of all the pre-registration, registration, scheduling, pre-admitting, and admitting functions.
  2. Health information technology management consisting of chart processing, coding, transcription, correspondence, and chart completion.
  3. Patient financial services which includes all business office functions of billing, collecting, and follow-up post-patient care. These functions are optimized with automated biller queues to improve and track the productivity of each biller; claims scrubbing software to ensure that necessary data is included on the claim prior to submission; and electronic claims and reimbursement processing to expedite the payment cycle.

Moving to Cash

Under current pressure from the troubled economy, hospitals and clinics can also turn to their investment cash flow as a source of short term capital financing by focusing attention on managing and rebalancing investment portfolios. Although investment income typically is viewed in a capital budget, it may be used as supplemental cash generated from operating activities in an emergency. This is accomplished by:

  • allocating a greater proportion of invested assets to cash and short-term investments,
  • seeking marginally higher returns from other investment classes like mutual funds and real estate investments.

Non-Profit Fund Raising

Of course, not-for-profit hospitals and clinics can accelerate fundraising to generate cash donations. Donations are a good source of quick capital in certain markets. However, one must be aware of expended fundraising costs and it is important to ensure that all the costs incurred in fundraising activities are properly attributed.

Assessment

Related info: www.HealthcareFinancials.com

Conclusion

Your comments on this topic are appreciated. Is this one reason why the financial markets dropped more than 900 points in the last two days; or since election day?

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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About Clinician 1.com

Physician Assistants Establish Online Presence

Staff Reporters

As face-time with doctors is increasingly limited, the role of physician and nurse practitioners has become integral in the healthcare system. However, it hasn’t exactly become easier for PAs and NPs to obtain information about drugs and treatments. That’s about to change according to George Koroneous, the Online Content and News Editor for Pharmaceutical Executive.com on October 8, 2008.

Just Launched

Launched last week, www.Clinician1.com  is a Facebook-style social networking site targeted to the 200,000 physician and nurse practitioners that prescribe drugs in all 50 states. It features personal information pages, medical education, and areas to facilitate two-way conversations between like-minded clinicians.

Website Proposition

According to its’ website, Clinician 1 was created by leading Nurse Practitioners [NPs] and Physician Assistants [Pas]. Clinician 1 is the first Internet community where NPs and PAs across all specialties can connect, consult and converse.

Assessment

More info: http://pharmexec.findpharma.com/pharmexec/Marketing/Physician-Assistants-Establish-Online-Presence/ArticleStandard/Article/detail/556966?contextCategoryId=39717

Conclusion

Your comments on this new professional network are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Barack Obama and Health Policy

What Do -U- Think?

Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

Dr David E Marcinko MBAFirst it was Nixon’s supply-side national healthcare proposal; then it was managed care and HMO’s; next came HillaryCare, and finally the Republican’s “Contract with America”. So, will the next domestic healthcare policy initiative be; “Obama Care?”

Number 44 is Official

Now, that the United States has officially elected Barack H. Obama – the 44th president with 62 million popular votes – what does it mean to you as a doctor, financial advisor, politician, healthcare administrator, CEO, physician or nurse executive? And, what will this mean for – healthcare policy and administration  – patients and virtually all of us going forward?

Election

After nearly two years of campaigning – countless debates about McCain versus Obama’s health plan – and the possibility of reform; the US has a president-elect and put Democratic majorities in both the House of Congress and the US Senate.

Opinions Vary

And so, what do you predict the next four years will bring? This is your chance to reflect, comment, opine and debate. Please share your thoughts, and let’s get a vigorous discussion going. Medical practitioner input is especially appreciated.

Assessment

Don’t forget to integrate your opinions with the current dismal economic scene; include challenges like the aging population, personal biomedical and genetic engineering initiatives, and related competitive healthcare 2.0 concepts. As an inside – or outsider – what is the future? 

Conclusion

Your thoughts and comments on this Medical Executive-Post are appreciated.

Conclusion

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The CMP™ Professional Designation

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Join the Certified Medical PlanneR™ Revolution

By Hope Rachel Hetico; RN, MHA, CMP™

Prof. Hope R. HeticoDid you know that the best physician-focused financial advisors may be driven by a higher standard of expertise and fiduciary care?

An increasing number of advisors are putting their medical clients first by earning the Certified Medical Planner™ professional designation. And, this rigorous online education program in health economics and medical business management is growing in both scope and prestige.

Assessment

Isn’t it time you took your practice, and medical clients, to the next level?

Conclusion

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Healthcare Business Information Review

Breaking News – “U Can Use”

Staff Reporters

Mental Health Policy: The Senate adopted HR.-6049 with mental-health parity. Bipartisan lawmakers are working to make the bill law before 2009.

Regulations: Under new Medicare regulations, doctors, with a financial stake in hospitals, must tell referred patients about ownership links.

Compliance: CMS proposed October 1, 2011, for full implementation of the International Classification of Diseases, Tenth Revision (ICD-10), code sets.   

Policy:  Congress [S. 2041 and HR 4854] is considering changes to the False Claims Act that could lead to more vigorous qui tam litigation.

Accreditation: CMS approved Norwegian company Det Norske Veritas [DNV] to accredit hospitals for Conditions of Participation [COP] standards. Authority to also certify ISO 9001 compliance runs, through 2012.

Bankruptcy: Hospitals filing bankruptcy this quarter include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and the four-hospital-system Hospital Partners of America, in Charlotte. 

Insurance: First Professionals Insurance Company told the SEC that it held securities with an amortized cost of $4.1 million in Lehman Brothers, $2.1M in American International Group, $2.5M in Morgan Stanley, $2.1M in Washington Mutual and $300,000 in Fannie Mae.

Business: Emdeon, a developer of revenue and payment cycle health management products, acquired the patient statement business of GE HIT.

Finance: Minnesota’s HealthPartners new Web tool provides prices for 83 procedures in its primary care and radiology network.

More info: www.HealthcareFinancials.com print-journal and November 2008 – February 2009 issue: http://healthcarefinancials.com/Nov08Jan2009.aspx

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies].

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Singing the Wiki Pharma-Blues

Allegations of e-Chicanery at Abbott Laboratories

Staff Reporters

According to Walter Armstrong, of Pharmaceutical Executive on October 1, 2008, Abbott Laboratories recently edited its Wikipedia entry in an attempt to bolster its e-image.

Seeking Image Redeux

A fellow named Jeffrey Light, the young founder and head of tiny DC-based nonprofit Patients not Patents hit the wires recently, charged that Abbott Laboratories edited its entry in Wikipedia, the online everybody-can-play encyclopedia, trying to make itself look better.

Track-Backs

Using a brand-new online tool called the Wiki Scanner, which allows anyone to track-back the source of any change entered into any of Wikipedia’s 2 million articles, Light discovered that at 4:38 P.M. on July 2, 2007, several edits to the article on Abbott were made from a computer at Abbott’s Chicago office.

Assessment

We surmise the aging folks at Abbott are unfamiliar with the blogging concept of track-backs and pings; etc.

Read more:

http://pharmexec.findpharma.com/pharmexec/Back+Page/The-Wiki-Incident/ArticleStandard/Article/detail/463111?contextCategoryId=39722

Conclusion

As creators of the modified wiki enabled printed dictionary series: www.HealthDictionarySeries.com, we are saddened by these developments; if true. And so, your thoughts and comments are appreciated.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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The Healthcare Financial Crisis

Will the Economy Affect the Healthcare Industry?

By Dr. David Edward Marcinko; MBA CMP™

Publisher-in-Chiefdr-david-marcinko

The past decade has seen the healthcare industry move toward, away, and then back to capitation which is a system that provides a: “1) Method of payment for health services in which a physician or hospital is paid a fixed amount for each person served regardless of the actual number or nature of services provided, (2) A method of paying health care providers or insurers in which a fixed amount is paid per enrollee to cover a defined set of services over a specified period, regardless of actual services provided, and (3) A health insurance payment mechanism that pays a fixed amount per person to cover medical services,” according to the Dictionary of Health Insurance and Managed Care www.HealthDictionarySeries.com

Others simply called it “wholesale medicine.”

The Last Decade

Only a decade ago, astute physician executives and healthcare administrators found it hard to believe that they would ever accept pre-payment for unknown commitments to provide an unknown amount of medical care. They argued that it would mean fewer patients seen and less care rendered. More than a few medical providers and healthcare facilities had a natural aversion to capitated, fixed payment or contractual medicine. It had always been associated with the worst components of managed care — hurried office visits and soul-less physicians.

Today’s Marketing Force

Today, a modified form of capitation reimbursement is re-emerging as a market force, and not merely a temporary healthcare business trend. More than 40% of all physicians in the country are now employees of a managed care organization that uses, or is re-considering, actuarially equivalent medical capitation in a reincarnated form.

Legislative Example:

For example, in February 2008, the California legislature passed Welfare and Institutions Code section 14105.19. It required a 10% fee-for-service payment reduction to Medi-Cal physicians and mental healthcare providers. The new payment reform law took effect on July 1, 2008. The Centers for Medicare and Medicaid Services plan to launch similar demonstration projects in Colorado, New Mexico, Oklahoma and Texas in January 1, 2009. The rush to find capitated contracts may be on once again.

Is Capitation the Answer?

Has capitation finally fulfilled its promise as a quality-improving and revenue-enhancing model? Or is it just another cost reduction strategy that squeezes doctors and hospitals, and limits patient care and choice during this financial crisis? To answer this query, one needs to review the Stark Laws.

Stark Laws I, II and III

Curiously, Stark Laws I, II and III were created to eliminate concerns that self-referral could lead to excessive medical care and fee-for-service payments. Ironically, this system, with its potential for self-enrichment, had long been perfectly acceptable. Many also never understood how a commitment to treat an entire patient population could be made with little or no actuarial information. Hence, frustration was the initial reaction of many medical providers to capitated reimbursement.

Capitation Advantages

Contemporary medical cost accounting has demonstrated that capitation has some advantages over traditional fee-for-service care. For example, it can create and align incentives that help patients, providers, and payers by limiting their contingent fiscal liabilities. In the current credit-deprived economy, capitation is increasingly being viewed in a more positive way.

Where Are We Heading?

How should physician and nurse-executives, hospital administrators, CXOs, managers and financial advisors navigate these treacherous fixed-payment waters? What’s the trend?

Micro-capitation … Is the Word … Is the Word!

What is it — and how does it work? Most importantly, how can a healthcare organization profit by it?

For the financial cognoscenti, micro-capitation [termed by Scott Shreve; MD – personal communication] focuses on medical conditions, or subsets of clinical conditions rather than traditional CPT® codes or MS-DRG patient activities. Care is delivered in discrete “self-organized medical care packages,” not patient care packages, as before. This creates a true healthcare marketplace where price, quality, and medical outcomes can be compared side-by-side, or provider-by-provider, or facility-by-facility.

New Level of Expertise

For instance, services provided by vertically or virtually integrated medical teams would enable a new level of expertise. High-volume providers would develop additional experience, which would enable them to introduce innovations and efficiencies in a classic economies-of-scale cycle. With additional delivery and outcomes experience, providers would be much more willing to put out a set-fee for a standard grouping of clinical services, because they would have confidence in their ability to deliver care for that price.

Still Capitation, but Better

Philosophically, this is still capitation, but it is distinguished by a finer “micro-capitation” at the medical condition level (lowest common unit of care delivery that can be measured), not the patient level. So, the healthcare delivery marketplace is again attempting to control economic risk — not with toxic credit default swaps [CDSs] or other financial derivatives, but by moving to micro-capitated “units” that can be understood, measured, and marketed.

Assessment

As the domestic corporate credit crisis escalates, the pharmaceutical industry implodes, the population ages, and the media focuses on the increasing number of uninsured citizens, a growing number of hospitals are shuttered, re-sized, or struggling onward with trepidation. Nevertheless, by considering alternate reimbursement models, like microcapitation and others, healthcare organizations might again thrive going forward.

More info: www.HealthcareFinancials.com print-journal and November 2008 – February 2009 issue: http://healthcarefinancials.com/Nov08Jan2009.aspx

Conclusion

Your comments are appreciated.

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies].

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Exposing Medicare and Insurance Sales Commission Scams

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Some Agents and Brokers May Be Cashing-In

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

According to the Associated Press, on October 25, 2008, Medicare Advantage’s agents stand to make $500 to $550 this year. This happens by enrolling a beneficiary into one of their HMO type managed care type plans, while the agents could make another $500 for every year the beneficiary stays with the plan. It represents a financial reward that is raising concerns that agents and brokers will work too aggressively to enroll people into HMO plans that don’t meet their health needs; or where traditional Medicare may be a better personal fit.

CMS to Take Action

Representative Peter Stark (D-California) has urged the Centers for Medicare and Medicaid Services [CMS] to consider capping the commissions, while Kerry Weems, the acting administrator for CMS, said the agency plans to take action soon.

Insurance Policy “Twisting” and “Churning”

According to the Dictionary of Health Insurance and Managed Care, and others:www.HealthDictionarySeries.com:

  • Policy Twisting is the use of trickery to get someone to lapse an insurance policy and purchase a new one; usually in another company.

  • Policy Churning is a related fraudulent practice where an agent tricks a policy holder to fund a new one with the same insurer. Important information about the full consequences of their action is dishonestly withheld.

Both tactics are typically done to increase sales agent/broker commission income.

Scam Alerts

Although much more common with life insurance policies, each state has an insurance department that will help you if you think you’ve been scammed. Visit their website or office and you’ll get help on what to do. Many reputable insurance companies will quickly compensate you once it’s established that you were a victim of such fraud. Make sure you don’t waste you time by complaining to an insurer’s branch office. Contact the main office for swift response.

Assessment

America‘s Health Insurance Plans [AHIPs], the trade group representing insurers, encouraged CMS to develop clear and consistent standards, while two of the major players in the program, Humana Corporation and UnitedHealth Group both said that they welcomed regulation of insurance agent commissions. WellPoint and Cigna are the two other major health insurance companies in this country.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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MD Participant-Directed Investment Menus

Categorizing Investment Options

By Jeffrey Coons; PhD, CFA

By Christopher J. Cummings; CFA, CFP™

This white-paper will examine several different ways of categorizing investment options and discuss their usefulness in an average healthcare participant’s efforts to build a long-term investment program with an appropriate risk/return trade-off.  We will specifically examine the problems associated with manager style classifications (e.g., “growth” versus “value” or “growth & income” versus “growth”, etc.), with the general conclusion that style categories fail to pass the test of the four basic questions listed below.

Paper Excerpt

“The goal of designing a participant-directed investment menu should be to provide enough diversification of roles to allow participants, physician-executives and trustees to make an appropriate trade-off between risk and return, without having so many roles as to create participant confusion.  Ultimately, the burden on plan fiduciaries to adequately educate employees is largely driven by the investment decisions we require them to make in the plan, with more choices necessitating a greater understanding of the fundamental differences between and appropriate role for each choice.”

Option Menu Selection

The logical questions that arise when selecting options on a menu are:

1. Are there clear differences among the options?

2. Are these characteristics inherent to the option or potentially fleeting?

3. Are the differences among options easily communicated to and understood by the typical health investing plan participant?

Assessment

Most importantly, if healthcare participants are given choice among these different options, can the decisions they make reasonably be expected to result in an appropriate long-term investment program?

Read it here: value-or-growth
Conclusions

Your thoughts and comments are appreciated; do we even need a menu selection during this economc meltdown?

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Events-Planner: November 2008

Events-Planner:

NOVEMBER 2008

Staff Writers

“Keeping track of important health economics and financial industry meetings, conferences and summits”. 

Welcome to this issue of the Executive-Post and our Events-Planner. It contains the latest information on conferences, news, and relevant resources in healthcare finance, economics, research and development, business management, pharmaceutical pricing, and physician/entity reimbursement!  Watch for a new Events-Planner each month.

First, a little about us; the Executive-Post is still a newcomer – we just turned 1 years old!  Today, the website has almost 10,000 visitors per month from all over the country. We have been a successful collaborative effort, thanks to your contributions.  As a result, we are adding new resources daily.  And, we hope the website continues to provide the best place to go for journals, books, conferences, educational resources, tools, and other things you need to establish the value of your healthcare consulting and advisory intervention.    

So, enjoy the Executive-Post and our monthly Events-Planner with our compliments. 

 

A Look Ahead this Month

November 1: Print Edition Healthcare Journalism: If you would like to “step-up-your-game” and be considered as a peer-reviewed contributor to the third print edition of: The Business of Medical Practice [Advanced Profit Maximizing Techniques for Savvy Doctors]; just contact Ann at: MarcinkoAdvisors@msn.com. There are several chapter topics still available: 

Please send in your meetings and dates for listing in the next issue of our Events-Planner: MarcinkoAdvisors@msn.com

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Healthcare, Medicine and AIG

Hospitals, Doctors and Insurance Companies Affected

Staff Reporters

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The federal government recently announced a $100 billion rescue of American International Group [AIG], the largest insurer in the nation. Those involved in the business of insurance should know that it was the financial services operations and other non-insurance operations of AIG, and not its insurance companies, that forced the federal government to bail them out. Medical professionals should be aware, as well.

How it Happened

According to experts, the reason for AIG’s problems is two-fold. It is partly based in its dealings with credit default swaps, complicated financial instruments that investors use to protect themselves from bond defaults—which also caused the collapse of Lehman Brothers.

Insurers try to keep premiums low and profits high by investing. And while all insurers invest premiums in different forms of assets, AIG invested much of its enormous income in securities that were backed by sub-prime mortgages. As the mortgage-crisis came to a head, the value of those securities fell, creating financial problems for AIG. Insurers, like AIG, who attempted to profit from high risk investments found those investments to be so risky that they failed completely. When the investments failed, the insurer’s operating assets were reduced and it needed a major infusion of working capital. The federal loans, although enormous, are fully backed by saleable assets.

I Have AIG Insurance – Should I be Worried?

Generally no; because of the corporate structure of AIG. The holding company can be experiencing financial problems while the individual insurance company subsidiaries that agreed to insure you remain secure. They have more than adequate reserves to pay the claims anticipated. Each AIG branded insurer is a separate corporate entity that, by law, must maintain funds in secure reserves to pay claims presented.

And yet; First Professionals Insurance Company [FPIC] of Florida, recently told the SEC that it held securities with an amortized cost of $4.1 million in Lehman Brothers, $2.1M in American International Group, $2.5M in Morgan Stanley, $2.1M in Washington Mutual and $300,000 in Fannie Mae. 

Will AIG Claims be Paid?

Probably, yes. If the insurer has maintained adequate reserves, as required by state laws, there will be sufficient funds to pay all claims reasonably presented. If the individual insurer should fail, it will be taken over by the state where it is domiciled. If the insurer is faced with a catastrophe that it cannot cover and if your insurance is with an AIG company that is admitted to do business in your state, the state’s Insurance Guarantee Fund will pay your claim up to a limit that is usually no more than $500,000.  Of course, there is no absolute certainty in any situation relating to insurance, but the AIG companies are well-funded and very capable of handling all predictable claims.

On the one hand, if the insurer is put into receivership, the state regulator will use the insurer’s own assets to make payments before seeking funds from the insurance guarantee fund which is financed by assessments on all insurance companies that do business in the state. If, on the other hand, the AIG insurer is not admitted to do business in the state but does business through the surplus lines market, you are not protected by a guarantee fund and must be certain the insurer has the assets sufficient to cover any potential losses.

How Do I Determine That My Insurer Has Adequate Assets?

Contact your state department of insurance to determine if the insurer is admitted to do business and is protected by the Guarantee Fund. Also, check your policy; the insurer must tell you in writing if it is not admitted. Contact your state department of insurance to obtain financial documents filed by the insurer.

Assessment

The credit-crunch is on everywhere, and hospitals filing bankruptcy this quarter include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and four hospital system Hospital Partners of America, in Charlotte [See www.HealthcareFinancials.com; November 2008 issue].

Assessment

Finally, conventional wisdom suggests a ratings reveiw of any policy provided the insurer by Bests. It should be at least “A” rated. Review financial ratings of the insurer issued by Standard & Poors. Of course, these have become suspect of late, too! So, search the Internet with a query including the name of the insurer and the words “financial problem.” Be sure to ask your insurance agent or broker.

Conclusion

Your thoughts and comments re appreciated.

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies] www.HealthcareFinancials.com

Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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